[Music] so one of my favorite quotes from military history is by General Ferdinand fos The Supreme Allied Commander of World War I who said that airplanes are interesting toys but of no military value whatsoever with a hundred years of hindsight we can look back at quotes like this and share a laugh at how bad people can be at seeing how new technologies are going to change the future of warfare but what if there's Technologies around us today that we think about in the same vein what if we're just as guilty as general fos was at
seeing how new technologies are going to change the nature of National Defense I believe that's exactly what's happening now with this new technology called bit Bitcoin instead of being a new form of money or a new financial payment system I believe that it would be more accurate to describe Bitcoin as a new type of cyber War fighting technology and I think it's going to become critical to National Defense sounds crazy right bitcoin's interesting technology but of no military value right well before you go all for an anos on me please just indul me indulge me
for a second and let me explain my reasoning if you study nature you'll notice that animals practically all of them secure their resources the same way by using physical power whether they're trying to defend their access to their territory or their food they do it by projecting power to physically constrain other animals Nature's top survivors have been genetically optimized to do this they evolve increasingly clever ways to project power and impose physical constraints impose physically prohibitive costs on on their other animals to secure their resources to defend their freedom of action and if you study
humans in our society you'll see that we behave the exact same way we also use physical power to defend our resources and to secure our freedom of action in every domain so for example if we want to defend our our access to the land we develop Technologies to project power in from through land to physically constrain people people or impose physically prohibitive costs on any belligerent actor who would try to deny our access to the land and these same principles hold true for when civilization expands its footprint into other domains like the sea or the
air or space it turns out that security works the same way in every domain if you want to secure your resources in that domain you must project power in and from and through it and as a complex emergent benefit of all these societies competing against each other in this Grand scale physical power competition control over our resources remains decentralized you'll note that no single person or polity has ever been able to gain or maintain unimpeachable centralized control over all of the land all the sea all of our air all of our space for as long
as human civilization has existed we've been constantly engaged in this physical power competition to decentralize control over these resources we even have a special name for this protocol it's called Warfare so what happens when human civilization expands its footprint into this fifth domain of cyberspace what happens when human civilization starts to value a new resource in this domain called Data how do we secure our access to our data how do we decentralize control over our data how do we defend our freedom of action in this domain why wouldn't we expect to do it the same
way we do it in every other domain why wouldn't we expect people to project power physical power to secure their cyber resources is cyberspace some kind of special exception to this very wellestablished Trend in cyber security or are we overlooking something it seems to me like there's a missing piece of the puzzle we use physical power to defend our resources in every domain EX except cyberspace why for some inexplicable reason when we try to secure our cyber resources like our data or our information or our software we keep on trying to rely exclusively on encoded
logic so instead of trying to use physical power to physically constrain or impose physically prohibitive costs on Cyber attackers computer scientists keep on acting like there's some magical combination of if then and lse statement ments that will keep us secure and not surprisingly it doesn't work very well the third largest economy behind the United States and China is the black market digital economy is cyber crime it turns out that if you want to keep your software secure against the systemic exploitation of its encoded logic using nothing but encoded logic it's a demonstrably ineffective cyber security
strategy but recently over the past 13 years a new group of people have emerged and shown that it's possible to secure software without relying exclusively on encoded logic they've shown us that it's possible to use physical power to secure our resources to decentralize control over our resources and they've done it the same way that we do it in every other domain by physically constraining the Bad Guys by imposing physically prohibitive costs on the bad guys using this new technology they call proof of work but how do you physically constrain bad guys in cyberspace isn't cyberspace
some kind of non-physical domain so how does that work answer to that question is actually really easy all you have to do to physically constrain bad guys in cyberspace is physically constrain their computer and to do that you just really need to build a physically constrained computer and make them use it so what do I mean by that let's start with the first general purpose computer built in the 1940s over the past 80 years our computer Engineers have been trying to shrink the size and energy consumption of our computers to make them physically easier to
operate as a result of this design practice we now have microchips but if you wanted to make a physically constrained computer you would have to reverse optimize this design strategy and you'd have to march in the opposite direction so instead of a microchip you'd have to build a macr how do you build a macr turns out the infrastructure structure that you would need to build the macr chip that is the circuitry that you would need to build the largest and most energy intensive computer ever is already in place in the form of our global electric
power grid the global electric power grid is huge so big that no single nation can control it the global electric power grid uses a lot of energy so much so that no single nation can power it but at the end of the day the global electric power grid is a bunch of electricity passing across a bunch of wires it's the same exact technology that's in our computers except it's been reverse optimized it's physically expensive to operate so from a computer science perspective it'd be really easy to convert the global electric power grid into a giant
physically to physically expensive to operate computer all you would have to do is apply Boolean logic to the power build some kind of converter to convert watts into bits of information that can pass across the internet and guess what that converter is already built it's already been adopted it's already scaled globally that technology is called Bitcoin Bitcoin converts our global electric power grid into a giant physically expensive computer and then uses it to secure data and messages passing across the internet Bitcoin is special because it secures this data not by relying exclusively on encoding logic
but instead by tapping into the physical constraints of the power grid to physically constrain the bad guys trying to use it Bitcoin also decentralizes control over this data by enabling people to compete in a global scale physical power competition for that control sound familiar Bitcoin satisfies the same function as the other War fighting technologies that we use in these other domains but it takes a different form that we haven't seen before it's the same game but in a different domain so if you combine all these Concepts together we can see that Bitcoin could be the
missing piece of this puzzle of all people bitcoiners have figured out how to project power in from and through cyberspace bitcoiners have figured out how to secure data decentralized data preserve freedom of action in cyberspace that doesn't sound like just a mon technology to me folks that sounds like a cyber War fighting technology a cyber security technology a cyber defense technology maybe Nations will use it to do defense differently in the future I think that we may be at the dawn of a new age of digital power projection as Humanity expands its footprint into cyberspace
I think this technology is going to become critical that nations are going to rely on it to secure their cyers space just like they rely on airplanes to secure their airspace and I think most people in this room don't get it yet because they think it's just the coin they think maybe at best that it's interesting technology but of no military value whatsoever ironically here's the here's the ironic part about this this has happened before for hundreds of years the Chinese Alchemist who invented black powder thought it was just medicine it took centuries for people
to figure out that black powder was useful for way more than just medicine that it would change the game of National Security they say that history doesn't repeat they say that it echoes I think history is e echoing right now with this new technology that people think is just the coin so if I'm right if this really is a military-grade technology then we're already in a space race it's already a cyberspace race and as JFK said the exploration of this domain will go forward whether we participate in it or not and no nation that expects
to be the leader of other nations can expect to stay behind in this race for this reason I believe that becoming masters of the Cyber power projection technology is in fact a US national strategic imperative I fear that by ignoring this technology or underestimating this technology that we the dod could be making a huge strategic blunder and I used to think I was alone in this line of thinking but then after my National Defense fellowship at MIT after publishing a book on this subject it became a number one bestseller top 10 Global release so maybe
I'm not alone and at the same time I've noticed a dramatic shift in the attitude of our adversaries a change we can't ignore over the last couple years China and Russia have done a complete 180 on this technology they've gone from being super unsupportive of this technology to being super supportive of this technology they're now the second and third largest players in this industry I'm concerned that they may have figured this out before we have I'm concerned that they realize that this is a defense technology not a monetary technology and if it's true that this
is a defense technology then that would imply that it's it's up to the Department of Defense to get us back on track to lead the national conversation on this not the Department of Treasury and especially not the non-government Federal Reserve Bank the people with the biggest Financial conflicts of interest possible I guess what I'm trying to say is that the dod can't afford to F this up I think we could probably age that the future of National Security is cyber security and I just showed you a new approach to cyber security where people have figured
out how to tap into physical power to physically constrain bad guys to impose physically prohibitive costs on bad guys all to secure their cyber resources the same exact way that we do it in every other domain I just showed you this yet people still don't see it probably because they're extrapolating from the past making that same rookie mistake that we've talked about multiple times today of expecting the next War to look like the last war the next War fighting technology to look like the last war fighting technology if that's true then we're no different than
the Chinese Alchemist who didn't understand the Strategic importance of black powder we're no different than General fos who didn't understand the significance of airplanes we have to start taking this technology seriously not as a monetary technology but as a cyber security technology a defense technology we have to start thinking critically about the national strategic implications of Bitcoin our nation is counting on us to recognize these Trends and to posture this country to be a leader in these defense Technologies when they emerge to be the first to be the best before it's too late and the
clock is ticking thank [Applause] you
