📜 The Crypto Renaissance | Josh Rosenthal

The Crypto Renaissance Episode Transcript in English

Below is an English transcript from the Bankless Podcast Episode “The Crypto Renaissance” with guest Joshua Rosenthal.


Bankless Podcast #63: The Crypto Renaissance | Josh Rosenthal

Intro

Ryan:

Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. I'm Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more Bankless. David, what an episode. I know it's an awesome podcast because as soon as we finish recording, I just want to listen to it again.

David:

Mm-hmm.

Ryan:

That's what happened with this recording.

David:

Yeah, to me this is the through line of crypto. If you want to figure out what crypto is, you need to go all the way back, not just back into the ’70s where cryptography was created. We are going all the way back to the 1300s—the late Dark Ages—because that's where the Renaissance happened. That's where double-entry bookkeeping happened. That's where a cultural revolution happened.

The inspiration for this podcast came when I was trying to figure out right after the NFT mania and there was some sort of loose thread about some connection between Ether as a money, blockchain as a system, NFTs as a technology, art as new culture. So, I asked on Twitter, “Hey, who has a professor that is teaching them about early European history when it comes to wealth, art and culture?” And this guy Josh just raised his hand, and is like, “I'm not a student. I am the professor.” He's got a Ph.D. in Medieval History and European History, and he's also working in the realm of crypto investments. So, Josh Rosenthal is a fantastic steward of this message that is the same underlying core advances of humanity starting in the Renaissance all the way through crypto, where we are today. The power of what Josh was able to lay down is still ringing in my ears.

Ryan:

David, I don't think I've heard a podcast like this ever in crypto across any podcast. I don't think anyone has looked at it through this technical-historical lens and brought these themes out. This is maybe the first podcast on what we call in this podcast the Crypto Renaissance. We talk about all sorts of strange and interesting things like what was life like for a peasant in the Middle Ages. How does that relate to our life today? How did that change in the Renaissance? How will our life change from the world we live in today into the Crypto Renaissance? We even talked about demons pooping, and art, and crazy things, the Medici class, the popes and all sorts of things. So, this is a tour de force of culture and societal revolution. I feel like at some level I was in the most interesting history class I've ever attended because it related all the most interesting things about the wheel of history to all of the most interesting things about technology and society and the internet and cryptography today. It was all jam packed in an hour and a half. So, what a cool podcast, man.

David:

Yeah, I was telling a Bankless marketing guru, meme lord Michael Wong about this podcast and he says it sounds like some intersection of AP European History and AP Ethereum.

Ryan:

Yes.

David:

And I think that's exactly right. That's exactly what's going on.

Ryan:

Well said.

David:

I think we should just go ahead and get right into the episode.


Josh Rosenthal, PhD

Ryan:

Bankless nation, we are super excited to introduce you to our next guest. This is Josh Rosenthal. He holds a Ph.D. in Medieval and Early Modern European History, so he's a historian. He also received a Fulbright Scholarship to Sorbonne's Institute for Advanced Studies. He's worked at a think tank mixing culture, history and technology, which is what we're going to talk about today, but he's no longer a practicing historian. He is now a partner at 6ixth Event Cataclysmic Capital, which supports early-stage founders targeting cataclysmic impact. One of those impact areas is certainly in the crypto arena. Josh, welcome to Bankless. It's fantastic to have you. How are you doing?

Josh:

Hey, I'm doing very well. Pleasure to be here, guys. Thank you very much.


The Later Middle Ages

Ryan:

Josh, this is a lens we have not yet explored on Bankless, but David and I are super excited to do so. This is like the historical lens, but not just historical because this is interdisciplinary. This blends culture as well socio economic technology. So, before we get into this podcast, I want to ground the listener with sort of a mental road map of where we're going because I think we're hitting four important aspects in our conversation with you today, Josh. And we're going to weave in and out of them. The first is we're going to talk about the Middle Ages, an era of centralization, and then the Renaissance and Reformation era of decentralization, and compare that to the era that we're in, call it the nation-state era, and then this new Crypto Renaissance that is upon us. That's one of the through lines here. The second is how technology is a catalyst. So, we're going to talk about the communication technology that made the Renaissance happen—the printing press. We're going to talk about double-entry bookkeeping, the ledger, and how those are similar to the internet—a new communication protocol for the world—and crypto, which is a ledger for the world. Then we're going to talk about how these changes affect society from an economic, cultural perspective to an institutional shift. That's number three. And fourthly, I think we're going to leave the listener with some action items. How they can position themselves for this cataclysmic change that is upon us. You ready for all this, Josh?

Josh:

I think I am. I think that's very well said. It's a lot to cover, but we'll do our best.


Value and Information

Ryan:

OK, Josh, so I'm going to hand it off to you now and we're going to explore this agenda. So, can you talk about some of these through lines matter, why they're important, and add anything to what I said earlier in the intro.

Josh:

Yeah, thank you very much, Ryan. I think that's a great summary. I'd like to take us back to a moment in time that we might not typically think about, and that's in the later Middle Ages. Sometimes you hear it spoken of as if the Middle Ages are a dark period. That's probably not the best word. I think the best word to describe it is aggregated. I'd like to walk through two different through lines: value and information. And then look at how new technology—new financial technology and information technology—essentially unraveled these power hierarchies, and what happened next.

So, starting with the Middle Ages, if we're to describe the Middle Ages in one word ‘aggregated’ would probably be a good word to use. If we were to think about value, value was really aggregated, and by that I mean that wealth was concentrated. Wealth is fundamentally land, and the Roman Catholic Church is the largest landowner, owning up to a third of the land in Europe. Options for economic output were primarily agricultural. There's land and animals and crops. And there's some guild-based manufacturing, but that tends to be fairly small. People tended to follow in family vocations, whether it was farming or craftsmanship. So, on the whole, wealth was super concentrated and it tended to be displayed in precious metals. There's some patronage of the arts, but these were subject to sumptuary laws, where the power structures were regulating how money could be spent. You did have a decent amount of finance, but that likewise was subject to usury laws—interest was limited, the powers that be controlled how money actually flowed. So, wealth was accumulated through generational consolidation, generation after generation slowly concentrating wealth. And as you might expect, power likewise was consolidated.

In the Middle Ages there was a contest for power. There were two hierarchies. One was political and one was religious. And they were at odds for a number of centuries. And this ultimately ended up with a clear win in this contest for authority with the religious coming out on top, where the Holy Roman Emperor was ritualistically humiliated by the Pope in the 11th century. That was largely because religion wasn't a private affair. It was the social and cultural institutional ties that united economic power. So, when the Pope had excommunicated the Holy Roman Emperor, all the economic contracts and political fidelity that was obligated to him was all rendered instantly moot. So, the Holy Roman Emperor begged the Pope’s forgiveness. At that point the religious hierarchy really took dominance and achieved a type of stasis for several hundred years up until the birth of the Reformation, where it broke from its symbiotic stasis.

In the Middle Ages, if you have concentrated wealth and consolidated power, naturally as you might expect, culture was largely top down, and so that flowed from the church and the nobility. And there were a limited number of fine artists, and they were commissioned by a super-concentrated elite. It's mostly painting, some music, and a very limited amount of text. There was definitely popular culture that was bottom up, but it was controlled and channeled through approved means—things like morality plays and carnival. Most of the culture was extra-textual, which means it was based on oral interaction. So, if that's an idea of value being concentrated where wealth is consolidated and power is consolidated and the culture flows top down, the way that the power structures achieve that type of stasis, the way they held onto power was fundamentally by centralizing information and controlling who had access to what information and how they're able to share it.

The other through line I'd like to look at for just a minute before we look at what changed in the Reformation and Renaissance is around this idea of centralized information. In the latter Middle Ages just before the birth of the Reformation and Renaissance, information wasn't just centralized. It was fundamentally guarded by authority. So, political and religious entities were mutually reinforcing, creating documents that were controlled by a scribal class. They're encoded in a language that most people cannot read. Very few people could read, and most of them couldn't read Latin. The documents themselves were in a particular sigla, a type of shorthand that very few people could read. They're stored in archives. They're hard to access. They're hard to keep safe. Even if you did have rights —quote unquote— in the documents, there's very limited remediation. The courts were at the service of the noblesse and the clerical estate. And getting access to those documents was incredibly difficult, partially because the transmission of them was limited. So, if literacy is around five percent and most people stay within 10 miles of their home throughout a lifetime, these manuscripts are incredibly rare and scarce and inaccessible. It costs more than the annual salary of a person. And typically, the manuscripts are created at institutions which are centralized for their creation. This is the rise of the university, and the monasteries and the nunnery.

So, just to take a step back and summarize what we've talked about. In the latter Middle Ages, there were two particular power dynamics that served to create these hierarchies. The first was aggregating value, and concentrating wealth, and controlling who had access to money and how it was used. And the second was centralizing information, controlling how ideas about money, wealth and culture could be shared, and these were fundamentally centralized. And it's against that backdrop that we can now take a turn and look at the Renaissance and Reformation and what changed. What fundamentally changed was the advent of two new types of technology which gave rise to a new class and a new expression of art and identity.


Physical Power

David:

Yeah. So, Josh, let me reiterate to you the through lines that I'm seeing here, whereas it's really the church that dictated the world, right? And they were able to dictate the world because they had all the wealth, and wealth was largely defined by land. Then also through that power, they also had a monopoly on information or what was true. What was true is dictated by the church. And you alluded to that there were some bottom-up cultural manifestations, right? Some bottom-up celebration of culture, but it was through perhaps what we would call permissioned vehicles, right? Like, it was only bottom up in so far as the church allowed that culture to manifest. The reason why the church was able to do that was because they had all the power. They had wealth. They had the land. And they had all the data, if you will, in forms of knowledge. Where does physical power come into this conversation? Does might and the sword fit into this conversation as well?

Josh:

Yeah, absolutely, that's a great question. These power hierarchies are land and economic but also military. So that was the great tension in the early part of the Middle Ages, where the political estate, which would be the Holy Roman Empire, was at odds with the church. So, there is a question for who would ultimately control temporal or physical or military authority. The church had claimed that they had authority to wield that temporal power, and as you might expect, the political apparatus disagreed. In that great contest, which lasted a number of centuries, ultimately, the church won that. They won that at Canossa, where the Holy Roman Emperor—the head of the entire political state and all the military apparatus—was on the ground, on the snow, wearing penitential rags begging the Pope's forgiveness because the Pope had excommunicated him. All the ties of military allegiance between the emperor, to his knights, and to everyone else in the noblesse was all predicated—it was all linked in a causal chain—around being a Christian and being baptized. So, when the Pope excommunicated the individual, all of those contracts, including not just economic contracts but military contracts, were rendered null and void. At that point, most historians would say that the Church took supreme dominance in terms of that hierarchy. But then, that was around the 12th century. After that, for the next two or three hundred years, the church and the ‘state’, if you want to call it the state, achieved a type of symbiotic stasis, where they're both power hierarchies and they became more and more and more inextricably linked.


A Permissioned Life

Ryan:

Can we talk a little bit about the day in the life of an average member of society? So, what you just set up for us in the Middle Ages time period was kind of the life of, I don't know if I’d call it a peasant. Let's say the life of the average person was very much permissioned, was very much top down, was very much the opposite of what Bankless preaches, which is self-sovereignty and freedom, and very much restricted in the ways you could participate in the culture, in the ways that you could participate in the economy. I mean, no such thing, I'm sure, as an entrepreneur. What would an entrepreneur do in this era? Very hard to rise above it seems. Paint the picture of a day in the life of an average peasant, an average family, an average unit of society.

Josh:

Now, that's a great question. I think that's right on all accounts. The vast majority of individuals were farmers, and it was fundamentally agriculture, subsistence-based farming. And so, you had never been more than a few miles from your farm. You probably didn't own your farm. Your farm was owned by a landowner. You might not be allowed to leave without permission. This hierarchy isn't just hierarchy in terms of economics and military, but it's hierarchy in terms of permission around identity. What you can do, how you can move, what you can acquire, how you can use the things you acquire, how you can express yourself, what you can say, what you can think.

In these two great hierarchies, you start off with the emperor, and then go down into the various princes and cities, and then into the knights, and then all the way down into agricultural workers here at the bottom of the pyramid. And on the spiritual hierarchy, it's the same thing. You start off with the pope, and then you move into bishops and various curates, and then down into your local priest, then down to yourself. So, the short answer is you're working in the fields from dawn till dusk every single day, and that's literally all you're thinking about. There isn't additional capital at your disposal. You do have exceptions where you have some guild-based manufacturing and you might be able to be a blacksmith or something like that, but you can't just set up shop and hang out a shingle. Your father had to be a blacksmith, or you had to have permission from the guild to be able to set up shop. And you had to have permission from the noble authority to be able to have a title which allowed you to actually practice.

So, at every fundamental junction of life, things were permissioned, not just economically but also around identity. The way they controlled that was through the permissioning of information. You couldn’t share anything that popped into your head in terms of speech, and documents were the sources of control and those were carefully guarded. Those weren't at loose in the population whatsoever. Is that helpful? It's a little difficult for us to imagine today, I think.

David:

The image that's being conjured in my brain is that there's a very strong lack of churn in this world, right? If you are an aspiring young lad who wants to do something cool with your life, you're just not in the environment that facilitates such an aspiration. And perhaps you don't even have the capabilities to even think about something to aspire to because you're just not in an environment that caters to such creative new thinking. You are kind of locked in this world that seems very fixed.

I also want to put an image into the listener’s heads because I think this is going to be one of, perhaps the overarching through line for this entire podcast, of the difference between the tower and the square, or the hierarchy and the network, right? Where hierarchies over time grow larger and larger and more rigid, versus the network or the town square, which is a flat topology where everyone is treated equally. There seems to be a pendulum shift that goes between these two ends of the spectrum.

And right now, in the late Dark Ages we have an extremely hierarchical religious structure that dictates the world top down using their power of wealth, culture, knowledge, and influence. That's where this story starts, or at least this podcast starts, which is the late Middle Ages with a very hierarchical structure that really determines what the individual can really do with their lives.

Josh:

I don't want to get ahead of our story, but it's important to understand that those ideas probably wouldn’t have even popped into their head, right? It was the water, the air they breathed, the water in which they swam. We're in a very similar situation today where political and ideological hierarchy is merged into a nation-state and, and we're at the subject of its permission in all sorts of facets of our life. We tend not to think about that on a daily basis, just like the average medieval farmer wouldn't have been thinking about that. For example, I tried to purchase a Bitcoin conference pass for a team member. I purchased that for the event down in Miami, and the payment was declined. When I spoke to American Express, they said, “Yeah, we know it's not fraudulent. We just, we don't like the subject matter, and we don't want to process that.” So, they won't let you spend your money that way. That's their policy. So, we're at the subject of their permission on that. So, we're in a very similar situation. Just like it didn't enter their head, it tends not to enter our head.

When we say “an entrepreneur starting something,” that wouldn't have been a category they had. Very similarly, we'll see the rise of the mercantile class where people do set up shops. That was very difficult for them to take a step back and appreciate the historical significance and say, perhaps I can do something other than be a farmer. Just like it's difficult for us to take a step back and say, perhaps I can do something other than work for a company, perhaps I can work for a DAO. That would have been something that wasn't quite on their mental map at that point in time. I don't know if that's a helpful analogy or not.


The Disillusionment Bubble

Ryan:

Josh, this is excellent foreshadowing of topics that we're going to address later in the podcast. I hope the listener gets the sense of what it's like for the average agrarian peasant. I mean, you were illiterate, you were poor, basically every day was just trying to survive. This undercurrent that leads to elements we're going to talk about in the Renaissance and Reformation is the sense of disillusionment with power structure. Can you talk a little bit about how that was bubbling up because you were talking about how a lot of people in this situation wouldn't have known better. It was kind of the air they breathe. They wouldn't have known there was another possibility. Yet, the seeds of the Renaissance and Reformation were starting to be planted, and there was this sense of disillusionment with the power structure. Can you talk about that before we lead into the next chapter of our story?

Josh:

Yeah, absolutely. There is definitely a sense of disillusionment, and death was a way of life, and hierarchy was a way of life. When you think about mortality rates, the primary popular culture was “death is among us.” It was morbid. It’s ars moriendi, you know, skeletons dancing. It's not just because you see members of your family dying in front of you on a regular basis. It's partially because you have a lack of agency.

So, what are you going to do? What choice do you have but to accept the hierarchy? You can revolt, and at times you did have peasant revolts. Those are quickly, swiftly, and effectively put down. So, essentially, you're operating in an ether where you don't have information with other people in a community. And when you're isolated, that tends to create a marked sense of disillusionment. It was in everyone's best interest to keep things in the status quo. In some sense, it was probably fortuitous that life was nasty, brutish, and short, and that you were subsistence farming because if you had too much time to think, you wouldn't have liked your chances for improving your situation.

As you mentioned before, the bottom-up culture that you do have bubbling up is largely around celebration and blowing off steam around harvest and carnival. It was very functional and very utilitarian. You know, the nature of the change— you know, there's definite cultural undercurrents where occasionally people question the hierarchy, but that tends to be put down very effectively. The reason was that it was put down whenever it would bubble up—it would bubble up out throughout the Middle Ages—but it was put down with great precision, speed, and effect partially because the power structures controlled the information. Those ideas couldn't spread. They're able to quarantine them very effectively. And so that's one of the fundamental transitions that happens with the Reformation. The ideas that were always latent in the latter Middle Ages actually had a way to express themselves in a way that was not only permissionless, but that was very difficult for the institutional power hierarchies to put down.


The Renaissance & Value

Ryan:

So, I think we've set up what the Middle Ages was like for the average commoner—how the society was structured, how the economy was structured. But then came this change. And that gets us to the second chapter that we mentioned, this Age of this Renaissance and Reformation. So, can you talk about how that change came to be and what it represented for people?

Josh:

Yeah, that was a fundamental change. It was absolutely cataclysmic, and I think we under appreciate the nature of that change. That's why I definitely appreciate taking a moment and sketching out the kind of bleak situation of an average individual in the Middle Ages. We take for granted now the ability to act without permission to a certain degree, or to share information, or to communicate value. But that was only a result of the Renaissance and Reformation.

What happened was, there was an advent of two types of technology: one around sharing value and around sharing information. Both of them were decentralized or distributed or permissionless. And them coming together created a situation that a number of individuals participated in. It gave rise to a whole new class of people, a working class, mercantile class, entrepreneurial class. And that class of people, it wasn't just that they were something new, it was the idea that something could be new. After a thousand years of stasis, there was new technology, which gave rise to a new community, and expressed itself through a native type of art, which was likewise a technology.

So just to take a step back in the Renaissance and Reformation, if we follow these two through lines. Value in the Middle Ages was aggregated and that became distributed in the Renaissance and Reformation. That happened around the advent of a new type of financial technology, something called double-entry bookkeeping or ledger-based technology. And for your audience, they may be familiar with this, but in the 14th century this was radical. It was magic. The idea of a ledger where assets equal liabilities and equities, with the left side of the book being debt and the right side credit. It was popularized in the 14th century by a Florentine merchant in the south of France.

The Renaissance is really a rebirth or a rediscovery or return to the sources “ad fontes.” This double-entry booking was used in the Roman Empire. Pliny the Elder mentions it in 70 AD. There's Jewish communities in North Africa using it. But essentially, the Medici family and the Medici bank went back to the sources, discovered the technology and popularized it, and used double-entry booking to completely rework the financial system. Previously, you had to stop everything and have a centralized accounting. If you can imagine not knowing where your dollars are flowing at any given point in time—I'll leave the parallels off for now. But it was like magic to be able to have an accurate accounting at any point in time. And it massively increased the power, leverage, velocity, composability and granularity of money, preventing duplicitous books and false forks. It gave rise to credit in a very specific system as well as a new host of financial products.

The Medici, and not just the Medici but the whole host of families and banks that use this, really became new players on the scene. It was a new group vying for power. For a thousand years it had been church or military or political, and now there's another group of financiers. So, they bought their way into noble estates by buying titles, and they also bought their way into ecclesiastical or church estates. But fundamentally, it was an economic rise to power powered by this ledger-based technology which essentially turbocharged their economic fortunes and allowed them to buy their way into status.

Then, following this line of value, these new players expressed their status through a new type of art. And it wasn't just Machiavellian, I have money and I want to buy art to reshape and recraft my narrative on how I establish my money and what it means for society. That's true, but it's a bit deeper than that. They cemented their status around using a new type of art.

In the Middle Ages everything was flat and symbolic. You can think of it as 2D. People didn't look like people. They looked like caricatures. And if you're in the Middle Ages, you've never seen a window or a mirror. So, the idea of seeing a reflection of you or a representation of an image that looks realistic was unheard of. As the Renaissance artists turned back to the Roman and classical sources, they were able to create hyper-realistic renditions. It was their VR and AR of the time, where they’re able to go back and paint pictures and do sculptures where it was just like being there and where you saw someone else in an image. It was like magic.

Renaissance art was really an exercise in technology around this rediscovery of source material. These are names which we still know today. It's Botticelli and Leonardo and Michelangelo, and this is how Florence became the cultural center of Europe. Part of it is a flex around this new mercantile class. But part of it is a qualitative and quantitative alignment of identity around, not just the idea of their status, but the idea that someone else could be new. The idea that it wasn't just church and political power as it had been for a thousand years, but that a new player could enter the game.

As we chatted about, in the Middle Ages the idea of something new wouldn’t have entered their minds. Now here was something new and it had entered not just their minds but manifested in the world through this technology. So, the Medici ran with that. They actually ended up taking the papacy as Leo X was a Medici and they took the throne of France with Catherine marrying in. So, this became de facto. They essentially took over this power hierarchy, this financial class. And when they took it over, they changed the nature of what was meaningful. Whereas in the Middle Ages there was sacred and profane. There was holy and religious, and there was everything else. With this advent of the class tied to some of the doctrines that Martin Luther and the Reformation were espousing at the time, this new financial class rethought what it meant to be holy and to be doing God’s work. It wasn't just in a monastery. It was actually doing your job, even engaging in finance in the world. While the Holy Roman Empire was in the fits and throws of international conflict with the Turks, and seizing land across in the New World, they essentially were using this new proto-capitalism and this new financial ledger-based technology to fund themselves.

The Reformation essentially dissolved the monasteries where people were cloistered in for the transmission of these documents. This is new, huge, up to ten percent of the population are let loose from the monasteries, and they tend to be more literate. They don't want to go back to farming. So, it introduced a whole new type of people into the workforce. They found things that were good to do in and of the world itself instead of being cloistered away. So, books that you may be familiar with address this like Max Weber’s The Protestant Ethic and the Spirit of Capitalism. The point is that the common itself became something worth doing.

Doing your job in the world, whether that was entrepreneurship or just interacting with your family and with your community, became a good thing to do. So that expressed itself in the art of the times. These are names like Rembrandt and Vermeer and Rubens. This is why you have the ubiquitous fruit bowl, right. Something as simple as a piece of fruit is meaningful in itself. Popular culture becomes significant as opposed to just the sacred.

So, I'll stop there. That would be a through line where we move from aggregated value to distributed value, really powered by this financial technology which gives rise to a new class of individuals who express themself through a new type of technology, through a new type of art, endemic to the same technology.


The Renaissance & Information

David:

So, the through lines that I'm seeing, I think, are so salient with what we are seeing today with the crypto world. So, I just want to rehash them and go through them again. Humanity invents this new thing called double-entry bookkeeping and it's this new technology. It's actually, it's not one thing. It's not like we discovered gold, or we discovered this new item. It's an idea. It's something that we can all share. We can pass around this idea of double-entry bookkeeping. It's like a mind virus. It passes from person to person. And then, all of a sudden, this technology just becomes instantiated. This technology itself both creates value and allows for value to churn at the same time. We're finally seeing churn in the world. This allows wealth to not only be created but also to proliferate around the people who didn't previously have wealth. They were just farmers, now, they can access wealth.

The other through line I'm seeing is when there is wealth that is created, art starts to be created, and culture starts to be created, and specifically new forms of art. Whereas old art was 2D, new art is 3D. It's a new magnitude of what art can be. And not only that can we create new art, but people can participate in that art not only in its creation, but also its appreciation. And it all started with double-entry bookkeeping. In the crypto world we have these new blockchains, which are new ledger systems, and we also have new art forms in NFTs and digital art expression. People are getting head over heels about whether NFTs are valuable? Why are people paying for them? Are they cool? And to some degree it just does not matter because people are paying for them and appreciating this new art form that is just blowing the minds of people who are not yet up to speed with this new culture that is being created.

And finally, as a result of all this creation of all this new wealth, this creation of all this new art is really changing how people perceive their own individual role in the world. It’s like, I can make a difference. I can do something for me, for myself, and it fits into the rest of the world. Drawing the connections between the Renaissance and what we are seeing come out of crypto networks, Ethereum DeFi, I think is so incredibly strong and really made very saliently by the transition from a hierarchical late Middle Ages society into a more distributed, more networked world that we saw in the Renaissance and Reformation. Josh, is anything that you want to clarify or add on to that analysis?

Josh:

No, I think that's very well stated. We could go in a couple different directions and there's even analogies in some of the details that we could go into. The type of art, whether it's generative art versus— there's a bunch of different ways we could take that, but I think let's just keep it focused for the audience because that's absolutely salient, and those are the main points to make. Very well said. So, absolutely. So that's the through line of value. The fundamental change to that was the hierarchy. It wasn't just in stasis anymore. There's a new player in the game, and they were expressing themselves. They're able to enter the game by engaging in finance, and that creates mobility and velocity. And then they fuse their identity through art. They use this art as a lens through which to view the world and themselves. The art had a particular type of expression which was tied to the way that they had made their money. It was a rebirth and return to the sources around double-entry bookkeeping, just as it was a return to the sources around this hyper-realistic, fresco-based, detailed type of art versus 2D art.

So, one question someone might ask—and this is what you had asked earlier, Ryan—as this was bubbling up throughout the Middle Ages, what happened? This was crushed again and again and again and again. So why wasn't the Renaissance and Reformation crushed in the way that the previous attempts at this sort of reform were crushed? Part of the answer to that question is now they have money and there's a new player in the game. Now, they're able to really coalesce around identity through this art. But the third leg of the stool that's incredibly salient is there's a new type of not just financial technology, but information technology, that essentially is likewise permissionless and prevents it from being boxed in and quarantined.

Whereas in the Middle Ages information was centralized, in the Reformation information was fundamentally decentralized and it was really around this permissionless tech which was arguably just as important as the advent of financial ledger-based tech. In the 15th century Gutenberg popularized this new type of technology which had radical decentralization. The printing press didn't have a kill switch. It was a fundamental challenge to institutions of power and transformed them. It placed them in a conundrum and eventually won them over, and then generated this whole class of meme artists that happened to topple an empire.

On this permissionless tech, you didn't need permission to share an idea. Whereas in the Middle Ages information was recorded on a manuscript, which is a piece of parchment or a piece of paper where things are written by hand. It's incredibly expensive, more than a year’s worth of salary. It's limited. It's slow. It's difficult to archive and protect. With the printing press, anyone could print. Nobles and the Roman Catholic Church attempted to regulate the industry and required people, printers to register. You can think about it like KYC almost. Some people of course complied, but all it took was a rogue printer and a room off the grid in a few hours and somebody had documents they could send everywhere at such speed that they were almost redundant, and you can think about it in terms of permaweb.

This new culture was born with an explosion in the number of texts in it. It created new formats as well, where originally the print-based culture was a replication of what had been done in manuscript. Meaning, if you had an academic dispute between closed doors and somebody took notes on it, the first generation of printing would print that and it would be in a very similar format. The second generation of printing in the Reformation created a new medium which was endemic to the nature of the technology. Meaning, instead of just reproducing things as they were before, they created these pamphlets. They're called flugschriften. It was a big broad sheet which had an image on it and big bold type and just limited words. Even if you weren't literate, you could understand what was going on. If you were semi-literate, you could get the gist of it, and someone could read it to you. One way you can think about it is as a shift of what happened with newspapers starting out by putting PDFs online, and then moving to an interactive format. That's what happened with this print-based format where they pushed these flugschriften or these pamphlets which had images on them and conveyed radical ideas. A family could now afford one or a traveler could pack his bag full of them and share them all over.

It wasn't just that the ideas themselves were radical, which they were and we can get into. But the idea that anyone could share an idea. You didn't need permission to share this idea. That was a fundamental breakthrough, and so it posed a real challenge to the institutional power structures. If you're the Roman Catholic Church or a political regime which isn't favorable to this, and you've always claimed that you have the sole authority to create an idea, much less share an idea, and now ideas are being shared through this new print culture, what are you going to do? Are you going to just sit back and let it gain ground and let it gain popularity? That's one option. The only other option is to engage in that print culture itself and to engage in the back and forth by printing your own material. But if you do that, you concede the point that you're the only one who has authority to create and distribute information. You legitimize the competition. That's ultimately what they ended up doing, the latter option, and thereby legitimized the competition.

This created an explosion of information at scale, which made it very difficult to put back in the bottle. There's a whole genesis of audit chains in creation and transmission, and a new marketplace of remixes and compendiums and copies without permission. So, this advent of print-based technology, which was fundamentally permissionless, was one of the reasons why it was very difficult for anyone to keep the stasis that had dominated the Middle Ages. Part of that was the nature of the printing press itself, that people were generating ideas. And then part of it was the ideas they generated. The ideas they generated were very radical in terms of challenging those claims of authority.


Technology, the Catalyst

Ryan:

I want to put myself in the place of a Bankless listener because if you're a typical Bankless listener absorbing Bankless content, what Josh is just talking about probably sent some shivers down your back, right? Because you're immediately seeing the parallels with crypto, right?

We have the Middle Ages, which was an era of centralization, top-down authority, limited self-sovereignty, very permissioned, not permissionless. Now, we have the advent of something new. They didn't know it was going to be later called a Renaissance, at the time. But there were two incredibly important technologies, permissionless technologies, open technologies, distributed decentralized technologies that came about.

The first was a value transfer protocol. We used that term protocol as kind of a technology, sort of a shared coordination tool for society. That was double-entry bookkeeping. So, a new, permissionless ledger technology, if you will, for value transfer. And you've got the second piece of technology that comes about at the same time, and that is a new communication protocol, new permissionless communication protocol. Wow, interesting.

We've got this rise of the Medici, maybe a ledger native, a crypto native class that starts to change the society from the bottom to the top, starts to gain influence, starts to influence culture, in art, in all sorts of ways. And really the reason, the argument that you're making, Josh, the reason for the Reformation and the Renaissance, this new era, was actually a technology in nature. And it's interesting because— amateur historian, I enjoy history, all of these things, but I haven't heard that argument emphasized as much. That the catalyst for the Renaissance was these two permissionless technologies: a new communication protocol, it sounds similar to the internet now, a new ledger protocol, sounds maybe similar to crypto. I'm sure we'll get to those things. Why is your position, Josh, that it was really these technologies that brought about the Renaissance and influenced everything else? Why were those the catalysts?

Josh:

Yeah, that's a really good question. I think it's somewhat one of the reasons why I'm not a historian anymore just because of the lack of practical applicability in terms of applying the tools of history to the current state. That's why when crypto first came on the scene and we had sold the previous company to a publicly traded company, and started investing in crypto back in ’17, I was immediately struck by the idea that crypto wasn't just a technology or new type of technology, but it was a new way of social organization. The parallels to what I’d studied in history were immediate and salient. That was such a large transformation that I couldn't not get in on it.

I think part of it is because historians are people in their time. Sometimes we forget about that. Just as if you looked at a medieval historian at that point in time, they wouldn't have been able to articulate the deep change— they would have looked at the things on the surface of the ocean. They would have said, well, this emperor died and this next emperor took over, and this pope did this and the next pope did that. They're looking at a kind of great-men-of-history. But underneath, with the currents, those are fundamentally driven by what you might call transmission vectors. Those become technological in the early modern era around the Reformation.

It's not a trendy thing to look at in history in terms of today. But I think it's not just that it’s technology, it's that it's permissionless and distributed technology. And that fundamentally changes the nature of history in that it allows ideas to be communicated without coordination, which means there is no kill switch where previously an emperor or pope could put their finger here and stop a movement. That didn't happen this time with the Renaissance and Reformation partially because of this technology. And in fairness, we could go on, we could do philosophical or theological kind of context for all of this. In some sense, this was a return to the sources, right? Ad fontes, Renaissance. The ledger-based technology wasn't new. It was a return to what had been done in the Roman Empire. The art and the hyper-realism, although it had been lost for a thousand years, was a return to what had been done. The printing press was largely new, but it was popularized and met that moment at the precise time when the financial technology unlocked that.

So, why do I think this drives history? Partially because rather than saying there's great men of history taking agency, I think communities actually create history. But the historical problem for communities to actually act in a coordinated effort has been, how do you achieve that coordination, both in terms of value and money and in information for orchestrating it? So, these aren't technologies for the sake of technology. They get at the two particular things that drive history. How do you motivate people and compensate them? And how do you share your ideas in a way that can't be locked? I don't know if that's a good answer to your question, but that's at least how I think about it.


Fulfillment of the Internet

Ryan:

It's a great answer. Oh my God, communities create history. That is tweetable, sir. I think Bankless listeners are continuing to see the parallels here. Before we leave the two technologies—the new distributed ledger technology and the new communication protocol, the printing press—I want to talk maybe a little bit about how those intersect because both of those technologies are not only permissionless, but they're also unstoppable. As you hinted at, authorities did try to stop them in various ways, like, let's try to put a restriction, AML, KYC, on these printing presses. That didn't work out so well. But it was also not just one technology, but both of them together, sort of the confluence of them.

Bankless listener, if you were beginning to see the confluence of our new distributed communication protocol, which is TCP/IP, which is the internet, which is a meme and coordination propagation layer. We've said often before that crypto and this new distributed ledger technology would not have been possible, of course, without the internet. But also because the internet serves as a meme propagation layer and a narrative propagation layer that allows a new distributed self-sovereign money system to grow from the bottom up. And that's kind of what we're seeing with the confluence of this new distributed ledger double-entry bookkeeping system and the printing press. Because people could communicate, using modern parlance they could communicate memes and spin narratives and distribute them to the people at a rate that the authorities couldn't stop. So this enabled bottom-up revolutions. Let's talk about that a little more.

Josh:

No, that's great. It's, yeah, the speed and velocity. Just taking a step back because we're in this historical moment we see the internet as different from crypto, right? We think the internet happened, and now it's coming into its legs, and now crypto has started. But really, one way to look at it is they're part and parcel of the same thing. I mean, the cypherpunks wanted information without kill switches and value without kill switches. We saw the advent of the internet, but it's always had a kill switch. So only right now with permaweb—what I mean is Arweave or blockchain-based communication technology, which is cryptographic in nature—that really is the fulfillment of the internet. So in that sense, communicating bytes of information or bytes of information that represent value are fundamentally the same thing. It's only been a few years. We'll look back on this in a period of history and say this was all cryptography. The Internet was cryptography when it finally came into its own right. Your point is well taken. Both of those being permissionless, it allows us speed and velocity.

Bottom up always wins and self-organization always wins. It's the bazaar over the cathedral every single time because when you have 10,000 people engaging and organizing it's very difficult to tamp that down with command and control. That was essentially what happened in the Middle Ages. The authorities weren't able to do that— they couldn't ignore the medium, so they had to participate in it. And by participating in it, they thereby legitimized it. You can make all sorts of analogies for fiat and digital currency, if you feel like doing that.

The other thing I guess I would say is that the ideas that they were sharing, they're definitely not just kind of memes and silliness for the sake of silliness. But memes, as we know, have this semiotic function where they communicate something broader and more important than themselves. The ideas that they were sharing were fundamentally challenging to the power structures, right? So, people like Martin Luther, they looked back and they used these same tools and techniques and audited the source code of power where the Roman Catholic Church had built an economic system around penance, doing penance, giving alms, purchasing indulgences. Luther and company looked back from the Latin into the Greek and poenitentiam agite “do penance” becomes metanoia, which is “repent.” The power system isn't extant anymore. So, all the economics go crashing down around that.

You had asked earlier, Ryan, about the political and military arm and layer in the Middle Ages. Well, the Roman Catholic Church had won that power struggle, partially because they were able to get the emperor to repent and do penance, but partially because they had this document. This document was called the Donation of Constantine. It was the Roman Emperor Constantine giving temporal and military authority to the church. Well, that was shown to be a forgery from the Middle Ages using these new forensic source code technologies. When that happened that not only caused massive instability to the Roman Catholic claim on temporal authority, but to the core claim of papal infallibility.

So if you're a farmer and you're hearing about this sort of stuff, it causes you to say, hey, what else might I question. Or if you're a German city trying to figure out, should I join this Reformation thing, and should we get rid of the monasteries and seize that land for ourself, and take the money and perhaps redistribute it to the people. It causes me to question other things. Very similar to the idea of not just speed and velocity of sharing ideas, but the nature was not only something new, but it caused me to question the core claims of authority. You could make all sorts of parallels to core claims of nation-state authority that we're starting to see through the internet right now.

But the thing I'd like to, I guess, a salient point of that whole piece of context is that when we look at these ideas, they are profound, they're complex, they're super heavy, difficult ideas, and they have always been challenged historically through closed door academic debate and dispute. But now they could be printed. And when they're printed, as you're pointing out, they achieve this velocity. And the velocity of the spread of ideas they achieved wasn't around reproducing the old media, it was around a new form of media, and so what is the best way to communicate that core challenge to papal infallibility? Martin Luther was a professor of the Bible and philosophy, right? But instead of printing core academic disputations, he printed these—the only way to describe them accurately is to call them memes. There were these flugschriften pamphlets which just had images. A couple of the images that he used were seared into the popular imagination. One well known one from the Depiction of the Papacy in 1534 is about peasants flatulating—that's a fancy academic word for farting—in the general direction of the pope. Or another one is where they're defecating, or pooping, into the papal tiara and probably most wild of all is—


Demons Pooping & Early Memes

Ryan:

Hey, Josh, for our YouTube listeners, I'm going to actually pull these up because you sent these to us, and I was super intrigued. These are images of demons pooping, of peasants farting in the presence of the pope. You've described these pictures—

David:

Vile, vile, despicable. Unholy.

Ryan:

To my modern sensibilities, quite vile.

Josh:

It is absolutely profane. And they're saying, hey, we know that this institution has no real power. It's making claims of authority that it doesn't have. So the whole thing comes crashing down. The best way to express that wasn't in a fancy Latin disputation that only a few people could read. And it wasn't even in vernacular German that more people read. It was by this woodcut or this copper etching, where it shows 16th century German farmers essentially pulling down their pants and farting out clouds of gas towards the pope basically saying this is how we deal with these false claims of authority. We don't recognize these. Or another one is where they're literally pooping in the three-tiered papal tiara, saying that the claims you've made are false, and that's unholy. It's actually Antichrist. It's one of the reasons they thought the world was going to end. So, the best way to repay that is by pooping almost as a holy act. You're doing that to show people how ridiculous the nature of the claim is.

Then the image on the left, if you're looking at that, you see a variety of demons, and it's called the Birth of the Papal Curia. The demons are pooping out the various bishops and cardinals. There's one Medusa demon with snakes in her hair. She's suckling the pope, and you know he's the pope because he has the three-tiered papal tiara on there. And so this is what Martin Luther— he engaged in a great deal of fancy academic disputation, but essentially he was saying, hey, this spiritual hierarchy is illegitimate. These claims of authority are not legitimate. He flattened it with a doctrine called priesthood of all believers, which essentially said there's no mediation in this philosophical or theological realm. Instead of just making that argument in disputation, he made it with this image, with a pooping demon pooping out the pope. And that, as you might expect, was much more powerful— Anytime you engage in mass culture, it always degenerates into scatology, right, and so it's only a matter of time, I guess. But the point of the story is, these images were wildly popular. And for a reason, once they're in your head, you can't unsee them and it's—

David:

They're viral.

Josh:

They're viral, and they're literally memes.

Ryan:

So, Martin Luther was just printing out these images, these memes, and then distributing them to you, to the peasant class. And the peasant class, though they were illiterate, though they were poor, they instantly caught the message that he was sending and caught the narrative?

Josh:

Yep, and actually he operated within a network, kind of an informal community which had different ties of affinity in value and information. I mean, you could almost think of it in terms of a guild not a guild but— I mean, the best historical analogy of it is a DAO. It's this informal self-organizing network around value and information. He was working with a printer. The illustrator was an artist that he commissioned called Lucas Cranach the Elder. There are specific printers in the network that printed off grid and skirted KYC. They were incredibly popular. And they were these communal events. People opened them up in taverns and they read them. Even if you weren't literate, you got the idea.

We underestimate the individual at that time. They didn't just get the idea that ha-ha it's funny to be pooping in a papal hat or that the demon’s given birth to the pope. They understood the core idea that this spiritual hierarchy was illegitimate and you need to flatten it. And sometimes you need to use profanity, even scatology, as a very intentional weapon. That's very similar to the memes you see today. No one likes the unicorn just because it's pretty. It means something else, right? The unicorn means Ethereum or it means decentralized. Or ultimately it means agency and autonomy. That's why people resonate with it, not just because they like the colors.

David:

If any Bankless listener thinks that meme culture started with the internet, let's zoom out here and realize that meme culture perhaps started with a printing press, right? And the reason why these little graphics of demons pooping worked so well was because you didn't need to be literate. You could see the image and you could feel it. It was an emotional response. Inside of this very primitive, disgusting image was deep, deep meaning about the world that these people lived inside. And it was spreadable. It was viral. Everyone resonated with it, and the reason that everyone resonated with it was why it worked in the first place.

When we talked about early in the Dark Middle Ages, the late Middle Ages about why revolutions were so easily stamped out is because they didn't have viral technologies. And the printing of these memes allowed people to band together under a common banner of f*@# the establishment, f*@# the hierarchy, it's illegitimate. And it's this technology that allowed people to band together under this shared banner, like unveiling the cloak or drawing the curtain back and showing that the emperor has no clothes. But also showing that everyone else also sees the emperor without no clothes, which is critically important.

Josh, I want to take us down a sidequest real quick after this, but I want to give you the floor one last time before I do that.

Josh:

Oh sure, yeah, let me just finish this. There's actually another layer to it too in that even these internet memes that you're talking about, they're silly and it's kind of common material. That was also something— If you go back to the Reformation, typically you're printing kind of a holy text or sacred text. That was what had dominated the Middle Ages. You're printing things that are religious or sacred, and meaning is defined within that sphere.

When you have the rise of this double-entry bookkeeping and a rise of a new class, and they're sharing these ideas, the ideas they're sharing aren't just profane, but they're also common in a technical sense. Meaning the job you do, the finance you undertake, the things you do in the world are worthy in and of themselves to be rendered as ideas that you share as art, that you might commemorate. This rise of the “common” outside the “approved” was an incredibly important and powerful notion.

That was also Luther on this doctrine of vocation where you just didn't serve God by being locked away in a monastery. You could be out in the world with your family and your friends and your community and undertake commerce. And that was a good and honorable thing to do and worthy of being commemorated. As that took rise, as you trace the story throughout the 16th and 17th century you have the rise of proto-capitalism in the Low Countries that powers the whole empire. Likewise, again, you get art which is endemic to the nature of the technology. These fruit bowls are everywhere because the common itself is worth rendering and it's holy. This was all driven by the meme, and it's really important to understand that as you're flattening that hierarchy. That's a sophisticated argument that never took hold before. Essentially woodcuts of demons pooping did something that the emperor and all those armies couldn't do. They took down the Roman Catholic Church.

Each time, the art and community expression is endemic to the nature of the technology. In the 14th century you have frescoes with hyper-realism coming out of new fintech. You have meme-based woodcuts coming out of information technology. And then you have the rise of the mercantile class with hyper-realistic common actually being holy in Dutch realism. That's sort of where the story typically ends if this were a lecture and you started out in centralization and you've looked at these technologies which decentralize and radicalize value and information in terms of rendering them without permission.

What happens next is my real area of expertise, which is wars of religion when chaos and Armageddon breaks out for a while, and then the pendulum swings back. It swung back in the rise of the nation-state and that characterizes our age down until today. And then I guess my argument, or the parallel that at least I see, is instead of having separate religious and political hierarchies or cultural and religious hierarchies that unwind over time into a period of chaos through ledger-based tech and information tech, we have a nation-state where these two things are fused together. That's the exact parallel moment we're in now. So hopefully that kind of ties off the story and sets us up for a sidequest.


Money Printer Go BRR

David:

Just to draw one last comparison for the listeners. There are two memes for me that come to mind, two modern day memes that come to mind that are intentionally meant to make the receiver of the meme question authority. One is “money printer go brrr,” where that is a direct assault on the legitimacy of the dollar and the value of the dollar, perhaps the world’s largest institution these days. “Money printer go brrr,” the dollar is not sound. Another meme that comes to mind is that “Jeffrey Epstein didn't kill himself.” That's another one where people are saying, hey, we don't know what happened, but f*@# you, we also know what happened. Like, we know that Jeffrey Epstein didn't kill himself. There are powers that are masking the truth in reality, and we don't know what they are, but it doesn't matter because we know something is going on here. The reason why these memes are shared is because everyone, they resonate with the populace. So, I just wanted to drive that one last connection before we move on from memes.

Ryan:

I love—just on the meme topic too—that I just did a Google search for “money printer go brrr” and there are so many variations—

David:

So many.

Ryan:

—permissionless, homemade variations of the same meme that this cannot be stopped. It cannot be deleted from the internet. If it ever was, I mean, the people would just create new ones and propagate it. It's something that is completely unstoppable by authorities, even if they wanted to stop it.

Josh:

It's a perfect historical parallel. Once authorities engaged in that sort of exchange, things went viral. They remixed, you had compendiums. Once it was permissionless, everybody was doing different versions of demons pooping. I mean, essentially, “money printer go brrr” is a historical analogy of demons pooping in a papal tiara. It's taking a sharp knife and pricking at the source of authority. In the Middle Ages it was the pope. For us, it's the dollar and the fiat-based dollar of the nation-state. I think it's perfectly historically valid.

David:

Right. Josh, something you said earlier was that all of the armies of pope competitors couldn't do anything that a demon pooping, that a pooping demon could do, right? And like we all know that the power of the dollar is upheld by the power of the US military, yet it is pricked by a “money printer go brrr” meme. Absolutely, absolutely fascinating.

Hey, guys. I hope you are enjoying the podcast episode with Josh so far. This is such a fun episode and I'm really happy that we were able to draw some of these really crazy, cool connections. What comes next in the second half of this podcast is we talk about the comparing and contrasting of Martin Luther and Satoshi Nakamoto. And what happens when somebody did something without asking for permission that really questioned the ability of the establishment to maintain control, and also was a very intentful political statement that took down the authorities. Josh does a fantastic job guiding us through the rest of these comparisons while also leaving the Bankless nation with a bunch of very specific actionable items. Now, if you believe this narrative, if you believe that this comparison is true, how can you better prepare yourself to take on this revolution rather than the revolution dictating your life? What can you do to front run the revolution and have that revolution work for you rather than against you? Really, really appreciated Josh coming on to the podcast and sharing this perspective and also leaving Bankless listeners with some actionable takeaways. So, stay tuned for the second half of this podcast. But first, we have to take a moment to talk about some of these fantastic sponsors that make this show possible.

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Satoshi & Martin Luther

David:

Josh, I want to take us down a quick rabbit hole here because I think we would be remiss if we didn't finish up a conversation on the Renaissance talking about the Protestant Reformation, the Protestant Revolution and Martin Luther’s pinning of the theses on to the church. And so, just as a backstory, Martin Luther really kicks off the Protestant Revolution by basically publicly doing something to publicly acknowledge the illegitimacy of the church, talking about how the tithes that are being paid is really just corruption. What Martin Luther was doing was saying the church is corrupt. It's illegitimate. I'm pinning my, I’m nailing my theses to the door.

To me, I see a lot of parallels between Martin Luther and Satoshi Nakamoto. So, I want to drive these comparisons behind you and ask you, how well do these two figures resonate with each other? The through lines that I see is that neither Satoshi nor Martin Luther asked for permission. Both of them took it upon themselves to make a political statement and to also empower a revolution. Both sparked a process of creative destruction of old corrupt institutions in order to create a decentralized network of new institutions, where the Catholic Church is a centralized top-down hierarchy and the Protestant religion is a decentralized bottom-up organization. And they also both created a Cambrian explosion of forks, where as soon as we forked away from the Catholic Church—

Josh:

That’s really good.

David:

—the Catholic Revolution, the Protestant, one of the reasons why the Protestant religion never took over is because people forked that, and then forked that, and forked that, and forked that. And just like how we went from three canonical television channels to 3,000,000 Youtubers, and also what Satoshi did was go from one canonical blockchain or one canonical, the dollar, to an infinite explosion of blockchains. All of these parallels are coming together to me. How does that land with you?

Josh:

I couldn't have said that better. I think that's spot on, on a number of levels. I would have taken longer to get to that point. I think, personally, my personal thesis is also that Satoshi, like Luther, was a deep industry insider who knew in his conscience that this had to be done, even begrudgingly, knowing what deep consequences it would bring, from unintended consequences as you long-term destabilize these power hierarchies. And it's necessary and exciting, but not something to be taken lightly. So, regardless of where you fall out on that, both he and Luther were able to kick start this network effect and really convert people and create a zealous following partially because the thing they unleashed had a power to itself. With Luther, no one could read the Bible. He rendered it into a common vernacular, so people could actually have direct access to the source code and that took on a life itself. The same thing with Satoshi, by having economic value through code which doesn't require permission, that thing has a power in and of itself. So I think we'll look back on Satoshi the way we look at Luther, 500 years from now, quite honestly. Maybe we'll know who or what he is by then, maybe not.


A Digital Renaissance

Ryan:

The analogies are incredible, and we have already covered so much. So, I'm going to return to the road map that we set out at the beginning of this episode. We talked about really this pendulum swing, where in the Middle Ages we had this era of economic disempowerment, lack of self-sovereignty, lack of freedom, this era of centralization, top-down authority. And then the pendulum swung in the other direction in the Renaissance and the Reformation to self-sovereignty, to the rise of the Medici class, the crypto natives of their time, if you will. All of this was catalyzed by two really important technologies. The first was a ledger technology—double-entry bookkeeping and the propagation of that standard, of that shared myth, if you will. And the second was the printing press protocol, this new communication protocol. And these two technologies together sort of shook the world.

And I think that as we transition to the era that we're in now, which maybe we'll call this— I don't know what historians will call it into the future, Josh, but let's just call it the nation-state era, the era that we're in. I just want to take a minute to say that the nation-state era is a more centralized era. I think we've swung the pendulum in the other direction. This is a bit more like the Middle Ages than an era of decentralization and freedom. But maybe we're on the cusp of something new and we'll get to that.

But I just want to mention that we have so much to be thankful for. All of the freedoms that we now enjoy, the fact that we are not agrarian peasants with absolutely no rights, the fact that we have a Bill of Rights, the fact that we have a Constitution and democratic processes, we can thank the Renaissance and Reformation for those things. So, I don't want us to put ourselves in the position of a 12th century peasant. We're doing much better than a 12th century peasant. Yet, at the same time I think many who are listening to the Bankless podcast, many who live life today in Western society, feel this sense of disenchantment. Feel a sense of I'm not in control. Feel the sense of something has to change, the power structures are illegitimate. And this is not good, right? So we feel in some ways like that 12th century peasant.

So, tee us up. We are now seeing that the pendulum has switched in the other direction. Though we are building on some of the freedoms that we established in the Renaissance and Reformation, we have centralized in these top-down nation-state type structures and we are on the cusp of something new and new Renaissance, maybe a Crypto Renaissance. Tee that up for us now, Josh. Where are we at this juncture in history?

Josh:

Yeah, I think that's spot on, and that's a great way to describe it. It's not as overt as having a medieval lord telling us how, what we can do, and what we can say, and what we can share. But you definitely have the pendulum swinging back and forth, and it may make ticks and tocks moving in a direction. The theorists talk about thesis and antithesis and synthesis. But the point of the story is that, yeah, we absolutely have moved back to centralization. In the Middle Ages, hyper-centralization, Renaissance and Reformation, this unwinding, there's a period of chaos after that, which is characterized by wars of religion and all sorts of chaos in that vacuum that the nation-state found itself. The nation state ultimately co-opted many of those same tools, double-entry bookkeeping and printing press. That was essentially what characterized the rise of the nation state.

As we're here today, it's very similar. You can think of history as a heuristic construct, meaning don't confuse the model with the thing itself, but it's very good in terms of explanatory power. Saying that, we're in a centralized period right now, it just may be more subvert or covert and not as obvious as it was before. And then even within the micro, the micro dynamic of it where technology had started out more decentralized and is now increasingly centralized. Whether it's AI or FANG, there's a micro ticking and tocking back. So, yeah, I think the moment is very similar to what we saw in the latter Middle Ages. People didn't know what's going on. There's a general sense of unease. They knew that things are hierarchically orchestrated, and that they didn't have the agency that they wanted to have. Nonetheless, there was a burgeoning of different types of technology which were fundamentally different than we had seen before, and I think that's the exact point we're at right now.

Ryan:

Can we talk about those technologies, then? It is still early and I think people don't realize to your point earlier, Josh, how early we are in the trajectory of these technologies, in the trajectory of the internet. The internet is what, two, three decades old, maybe four at most, and certainly hasn't been mainstream for nearly that long. Crypto is a decade old. These technologies are just being born today, but already we see the seeds of change that they might bring. And one is, interestingly enough, a communication protocol. The modern printing press—an unstoppable permissionless protocol that allows us to communicate all around the world. And the second is this double-entry bookkeeping solution. This immutable cryptographic ledger that they've created. What seeds of change do you think we will see as a result of these technologies? Are we at a kind of a junction point in history where we're about to enter a new thing, a different kind of Renaissance, digital renaissance, a Crypto Renaissance, if you will?

Josh:

Yeah, I think that's absolutely the case. That point is very well made, that historians will look back in 500 years— When we think of the early modern era, we think of the printing press, and that's what characterizes that age. We think that's what gave us a number of the liberties and individual rights we have and that was the highpoint of technology. Up until recently, up until a couple decades ago, that still was the highpoint of technology, right, the printing press. It lasted for hundreds of years and characterized the ability to share information and engage information and mass media, the newspaper for hundreds of years.

So, historians 1000 years from now or 500 years from now will look back and say things changed fundamentally with two different distributed technologies—just like they did in the Renaissance and Reformation—coming into finding their feet in the early 21st century. They'll have academic debates and conferences trying to parse out the exact year. Was it 2021 or was it 2020? Maybe it was 2019, we don't exactly know. But no, that's absolutely the case that being able to share information en masse, we did that previously through printing things on paper.

The internet itself— I think Arweave is a great example of this, right? Like, this permaweb. The Arab Spring won't happen again because there's kill switches on that. That's not the case with this next generation of communication protocols which are cryptographically hashed. We've never had, from a historical perspective, the opportunity or technology that allows the rise of the sovereign individual as a sovereign unit of information, much less value. That hasn't ever been the case before. We approximated it in historical analogy in the Reformation, but this time I think we're going to do it at scale and at a magnitude of order.

The change from the latter Middle Ages to what we have today it’s going to be a magnitude of order larger, the change that we're in the middle of now, between what's going to come when we look back. That sounds kind of odd to say, but ironically, paradoxically, historically, when you're in the middle of a massive change, and, the bigger the change, the more difficult it is to understand the significance of it at that point in time, until you reach a breaking point. So, I think we're in a massive change and that's why we only have these kinds of hints and riddles about that general disillusionment, an idea that value can be communicated without permission. In our gut we know it's important and we know it's big, but we can't yet imagine the societal transformation, this transformative impact. Just like the medieval farmer couldn't yet imagine the idea of bookkeeping and what a mercantile class would actually mean. I don't know if that's online with what you're thinking.

David:

I think there's one significant difference that I see between the Renaissance—now we have to differentiate between the Renaissances, so the Renaissance in the 1300s and 1400s in Europe, and the Crypto Renaissance that we believe that we are embarking upon—is that the original Renaissance, the Renaissance of Italy and Florence, that had an epicenter where it bled out from. The ripples bled out from Europe out to the rest of the world. With the Crypto Renaissance, there is no epicenter. It exists on the internet. You can tap into the Renaissance wherever you are in the world, which means that the magnitude is perhaps greater, but also the velocity and speed of this revolution can happen instantaneously because we don't have to wait for this Renaissance to ripple out to the rest of the world. Everyone can access it equally from across the whole entire world.

Josh:

Now, that's an absolutely great point. In academic circles you can actually map out the nodes on the network with the printing press and how ideas are disseminated. And you see it geographically, kind of spreading slowly over time, year after year, decade after decade. Yeah, that's a great point. The velocity this time is hyperbolic. It's a magnitude of order faster, greater velocity, and I think fundamentally societal impact as well. Where previously you had the rise of a new class, and that's great, but the majority of the population is still agricultural. At least you could do something new if you wanted to. This time, literacy isn't just five percent, it's much more significant. If the Reformation was this crucible where you had all these things in the pot at the right time, powered by technology which prevented it from being tamped down, I think we have a very similar situation just we're doing it with plutonium this time.


A Genie and a Bottle

David:

So, Josh, I'm hoping you can paint a picture for the Bankless listener, and perhaps even specifically the younger people who are part of this digital revolution. I think most of this digital crypto revolution are younger people, but specifically talking about the zoomers and millennials who feel more specifically rejected from modern institutions and are specifically looking for optimism and opportunity in a world where there doesn't seem to be churn. So, if we can extrapolate what it was like to be a farmer in the Dark Ages versus a Renaissance man in the 1400s, and extrapolate that into young people coming out of college who are looking to find their place in the world, and they're not seeing the opportunity that they really want to see. How can we give these people this optimism about the future that I think is coming with this whole Crypto Renaissance, drawing the parallels back from the old Renaissance, of course.

Josh:

I think they're right not to rely on institutions of the time. The people who made out the best during our last Renaissance and Reformation were those who intentionally broke from the institutions of power and forged out on their own way, and embraced the technology—both communication and financial—to improve their own socio-economic situation. They essentially opted out of the system of hierarchy. That was the first time they had the opportunity to do that. It's always difficult and scary anytime you're in that situation and you're breaking away from what has happened before and what your friends and family are doing. But those who moved first had a disproportionate, asymmetric advantage, from doing so. So, the overall optimism would be that it's very difficult to put the genie back in the bottle. Historically, once these types of technologies are out in the world, they tend to unravel power hierarchies. It's just how it works over time. And so you want to be on the right side of that. By all means, don't latch yourself to one of these power hierarchies, particularly at this moment in time. Step out and engage with the technology itself and—

David:

Explore the frontier as we say on the Bankless podcast.

Josh:

Yeah, explore the front— And there's some very specific things that they can do around that. Rather than just being totally philosophical around it, you generally want to lean into it.


Get Involved in Crypto Art

Ryan:

So, let's get into them, Josh, because I think a lot of people at this point in the podcast might be persuaded. They've listened to enough Bankless. They've seen enough that's going on in crypto. They know the current situation. They believe this story, right, that we are in this junction in history, at this point in history where we are transitioning from an old set of institutions, in a centralized set of institutions to a new set of institutions that are decentralized. So, they're wondering how to be ready for that. How to position themselves in the Medici group rather than those that are kind of left behind by the technology. Yeah, I want to be part of Martin Luther’s crew, and part of the future, and not part of the past.

So, you put together some action items for us. This is the last piece of our road map that we want to run through, which is some concrete ways that people can get involved and get ready for this Crypto Renaissance that might be coming. The first that you mentioned is engaging in crypto art, and it's so interesting that you put art as number one. Talk about what people can do and why engaging in art, crypto art is important.

Josh:

Yeah, that's absolutely right. And back to your earlier point about optimism on this. In case I didn't hammer this clearly enough, all three of these action items kind of flow from the idea that rarely do you get an opportunity to participate in something so meaningful on a historical scale, where all the cards are being reshuffled, right. So, take advantage of the opportunity, by all means. I know you guys like action items, so here are some particular ideas.

So crypto art, so if you believe this historical narrative then you would conclude that NFTs are real, and they're here to stay, and that actually they’re the culmination of popular art using distributed technology. Historically, each culture expresses its identity as an art endemic to the nature of that transformation. AKA new tech goes hand in glove with cultural transformation and emerging art. In the 14th century you have this ledger-based tech finding its feet with a version of AR and VR, this hyper-realistic Renaissance fresco. Sixteenth century information tech found its identity using this art in a version of meme warfare, the demon-pooping flugschriften. Seventeenth century financial trades and rise in mercantile and proto-capitalism found beauty in the mundane around the sacred, with Dutch masters doing these fruit bowls.

At each time the art seems at odds— it just seems odd to the power holders, right? But they eventually adopt and then appropriate it. So, you want to get in on the right side of it, not just for rallying around the community, but purchase it, participate in it, buy early. It's not something to be taken lightly, as silly as some of the things may seem.

Ryan:

It's very funny, David and I on one Bankless podcast weekly recap actually just replayed the reaction from the Good Morning America crew. They were trying to describe what NFTs were, and they were laughing about it, it’s like, “So somebody is purchasing an image on the Internet. How ridiculous is that? This is a fad. This is kind of just going to go by the wayside.” You're saying, ignore that noise. Ignore the old legacy media institutions because if this Crypto Renaissance is coming, this art is going to be important. It makes sense that Beeple art NFTs would sell for millions of dollars. And you're encouraging people to get involved and figure out this crypto art movement.

Josh:

Yeah, the art actually might be more important than the finance, which sounds crazy to say. But I think there might be something to that, or at least they might be the same thing at the end of the day. If crypto is really a means of societal transformation, the value access and information access is important, but being able to communicate that object of value, not as a byte representing a mark on a ledger, but as something that has meaning in and of itself might be more important. Said differently, look if you’re a millennial, you’re a zoomer, and you're like, what am I going to do, right? Maybe I'll buy some stock. OK, I'll have a Fidelity account, a Robinhood account. Once you realize you don't actually own that stock anyway, but you just have an IOU, then what am I going to do? Maybe Coke or GE? No, Tesla might be more interesting. Well, maybe instead of Tesla I can use these NFTs and cross collateralize them and actually yield from that. Now, I can find whatever floats my boat. I can do that with Teenage Mutant Ninja Turtles if I want to.

David:

Maybe an NFT about Tesla and Elon Musk?

Josh:

No, exactly right. So now I'm finding something. If it's all arbitrary anyway, and turtles all the way down at shared consensus, and this is the technology that allows you to do it, why not find something that has meaning for you and for the community. It actually might be the same thing, particularly when you start doing things like NFTfi and you're able to cross collateralize NFT rights from a protocol. I think this just might be a historical aberration where we see these things as different things. I think NFTs actually might be the real thing itself long term, longue durée.


Prep with Crypto

Ryan:

So fascinating. OK, that's number one. Get involved in the crypto art scene, the NFT scene, if you will. And of course, all of these technologies combine so NFTs as finance are the same as DeFi as well. You can get involved through a DAO. There’s all sorts of ways to plug in. All of these things have a certain amount of confluence. Let's talk about number two. This is super interesting. It's something we also preach on Bankless. Your action item is for people to prep with crypto. What do you mean by prep?

Josh:

Yeah, in a nutshell, just expect some serious upheaval, cultural and geopolitical. And on one hand, that seems like an easy prediction to make, but it's especially salient from this historical perspective. Each time you see a technological and cultural shift from aggregation to disaggregation, things get really interesting, really dicey. It's not just Fourth Turning type of stuff, but this longue durée or these mega century trends or super trends colliding. It's not based on generational turning or calendars, but on technological impact with which the pendulum swings from aggregation to disaggregation and then back centralized again. During that swing back from chaos to co-option, things tend to get really dicey. Yeah, I'm based in Kentucky, and so prepping is kind of a way of life here. But the point is prep with some digital assets instead of just canned corn this time. So, get some digital assets, put some in cold storage. Make sure NFTs are on permaweb, right?

Ryan:

This is a way to get ready for political upheaval, societal upheaval is having these assets in a place being in control of your private keys. That's what you're talking about here.

Josh:

Yeah, absolutely. I mean even taking it as far as being able to hash things out with paper and remember a seed phrase. I mean, I know it sounds kind of crazy and tinfoil hat-ish, but I’d definitely give some serious thought to that. It's a side bet, which I think you’d be on the right side of history making, especially if you're a zoomer and you're talking about the next 30-40 years. Yeah, I'd expect some serious upheaval at that point. So, I definitely use crypto as the means of prepping.


Working for Crypto

Ryan:

That is definitely not a fringe idea on Bankless. Thank you for articulating it in the way you did within a concrete action step. I hope people are listening. Let's get to the third. This is important as well and this is working for crypto. Maybe working for DAOs. Are you talking about— yeah, what are you talking about here, Josh?

Josh:

Yeah, so essentially find a new way to make a living. If you think about the late Middle Ages, you're a farmer, maybe you're a monk. And then when the monasteries are dissolved—meaning the cities—take back over them, and the Reformation takes it back over, and they're opened back up and people go back into the workforce. What are you going to do? Some people went back to farming, but some tried to find new ways to make a living and essentially availed themselves of the new technology of the day. They became printers or they engaged in that double-entry bookkeeping and became financiers. If this megatrend is aggregation to disaggregation, the mini-trend is really around financialization versus disintermediation of things.

So, Gen X doesn't know what a 401(k) is and millennials never left elementary school without one. The basic idea is that the dialectic between social acceptance of building wealth versus Dadaism of sharing experiences is kind of a false construct. You want to do both at the same time and try to do it without relying on institutions. So, find a new way to make a living endemic to the new technology. Work for a protocol, create NFTs or get good at evaluating them. There's things coming online now around just knowing subject matter and being good at appraising. And if you don't own that stock anyway, find something that you think is interesting and get good at that, whether it's game-based price discovery, or if you can't code, work for a DAO. Or if you aren't timely enough for Polkamarkets, then listen to Audius or run a Helium unit or, you get the idea.

We're going to start seeing crypto moving from entities like DAOs that employ people around finance to being core business models around things in the real world. If Web 2.0. was about rendering people as products, this crypto turn is about turning people from community members into co-owners of the things. So, when you see things like Audius and Helium, I think that’s kind of a foretaste of what we're going to start to see. If you're listening to music, do it on a platform where you own part of the platform through a token, right? Or if you're if you're running a node, you might, not just a hashing node, but running a Wi-Fi or a LoRaWAN unit, run a node or set up a little side business around doing that as a side hustle where you're playing around with things or helping others figure it out.

I guess the overall point is you don't just have to code and you don't just have to stake. Yes, you can work for DAO and you should absolutely do that. That's like working for a financial house for the first time, like part of the crypto first Medici. But also explore these other things in the real world that are backed by crypto. You guys talk about a DeFi mullet. There's also a real-world mullet, where crypto is the back end, the business model of these other things, whether they're music or IoT nodes.

David:

My big takeaway from this is that I first got into crypto just as a side gig along my normal job where I could keep my foundations. I didn't have to just wipe the floor clean and commit to something that was risky. I was able to build out my first podcast POV Crypto in parallel, just like how Ryan started the Bankless newsletter in parallel with his main gig. And then, we actually started the Bankless podcast again in parallel, and all of a sudden Bankless became ready for us to commit full time. And we never actually had to commit to it full time originally. So, you don't have to jump in with two feet. You can put a toe in first and go from there.

The other takeaway that I've gotten from these three action items—engage in crypto art, prep, and work for crypto—is that you could actually do all of these things all at once, right? There are some platforms that really cohere all of these things together. It's just like you were talking about with Audius. For example, if you like to make music and deploy it on Audius, not only are you just doing the thing that you like to do if you like to make music, but you're also earning tokens for doing so, and you can hold onto those tokens. Therefore, you are both working for crypto and prepping with crypto and also doing something that inspires you. The amount of surface area there is for people to figure out how to do these things is almost infinite. And it's just a matter of you figuring it out, and thankfully, the Bankless newsletter puts out Tactics Tuesdays every single Tuesday. So you just go into the Bankless archive and find something that works for you because the reason why the Bankless newsletter exists is to help democratize access before we even knew how to articulate it. Democratize access to undergoing this new Crypto Renaissance rather than having it undergo you.

Josh:

No, that's great. Absolutely well said, well said.


Change over Time

Ryan:

Do you know what it feels like? Josh, this is not in your action items, but it feels like the worst thing you could do is just bet that the past will be the same as the future and just go with the flow of what the institutions and those generations who came before you say is the path. That seems like it could be particularly hazardous at this juncture in history.

Josh:

That’s so good. Yeah, that's absolutely right. If you widen your gaze, I mean, the problem with history is that you're always subject to your own experience, right? So you're a zoomer and you're saying, hey, this is all I've known and it's going to be this way in the future so I'm going to continue to be disillusioned, blah, blah, blah. But if you widen your gaze back and say no, no, this tends to happen historically, these institutions become undone and new opportunities open up and people benefit from that, and it's a very bright future. That's what the past actually teaches us. One of the other things that it teaches us is that change doesn't happen all at once. It's a slow culmination that reaches a breaking point, right? And it happens very quickly.

When you're in the middle of something where it’s like water flowing very quickly around you, it might be a fad, but it actually might be something fundamental in societal transformation. That's what happened last time in the Renaissance and Reformation. We talked about it over the period of a hundred years. But it was also immediate. It was one year after another year after another year. Fintech was coming on at the same time the printing press was coming online, and Luther was nailing this up, and the monasteries were dissolved. It happens very quickly.

So, you always want to be asking yourself, is this something fundamental or is it a little fad? And I believe you have more than enough evidence now to look back and say this pattern fits a historical pattern where the pendulum swings back. Even if you don't believe a word of this podcast, and you say all these guys are cracked, it's still worth making a side bet on it, right? Because it’s like asymmetric returns. If you're wrong, you're silly. You learn a new technology. You think differently about the way you work and about art and identity. But if you're right, getting in early on something at this scale is fundamentally transformative to your position as well as your community. So don't miss the opportunity.


Closing & Disclaimers

Ryan:

Josh, this has been phenomenal. We just, I think, told a story that has never been told. At least I've never heard it, this techno-historical perspective on the Crypto Renaissance, this new movement. Maybe that's the title of the podcast, David. We haven't talked about that yet. But this is such a pivotal time in human history. I really appreciate you articulating this, and even leaving us with some action steps so people don't feel helpless, like just victims of the next thing that's going to happen. There are actual concrete action steps that we have in this episode to help you. Thanks so much for spending your time with us and sharing this story, Josh.

Josh:

This is an absolute pleasure. And if I could leave the listeners just with one thought, it’d be that a thousand years from now historians are going to look back on this point in time today and say this is the moment the “world that was,” was changed into the “world that is to become.” And it's going to be a date just like 1492, where everybody knows the year. We're going to look back on 2020 or 2021 and say that was the moment at which our horizons fundamentally broadened to include this new world. So, thanks for taking a breath and appreciating the moment, guys. Really appreciate it.

David:

Thank you. Thank you, Josh.

Ryan:

Yeah, thank you. I think people who listen to this podcast might be hungry for some more information or more thoughts from Josh. Where can they follow you? Where can they keep up with your work? Are you even publishing this type of work? What are you involved in these days?

Josh:

No, this was new. So, we've been doing crypto investment. These are things that have been rattling around since my dissertation a number of years ago as it's been unfolding in real time. So, I haven't really clarified the thought outside of this conversation with you guys, but I do dabble in it here and there. Twitter @JoshuaRosenthal is probably the easiest way to get a hold of me.

Ryan:

Fantastic. Well, thank you, Josh. Bankless listeners, the action items were actually included in the show this time, so we don't have to go over them once again. Just read, listen to that last section where we talked about the three action items that Josh left us. What a fantastic episode. Of course, risks and disclaimers—crypto is risky, ETH is risky, Bitcoin is risky, so is DeFi. But staying with this status quo also seems like it could be risky. Of course, you could lose what you put in, but we are headed West. This is the frontier. It's not for everyone, but thanks for joining us on the Bankless program.