James Robert Lay:
Do you find crypto confusing? Are you unclear about the nuances of NF T's? And how will the future of digital currency impact your financial brands future growth? Well, let's demystify digital money together on today's episode of the banking on digital growth Podcast.
Greetings and Hello, I'm James Robert Lay and I'd like to welcome you to another episode of the banking on digital growth podcast. Today's episode is part of the exponential insights series, and I'm excited to welcome Professor Tanya Evans to the show. Tanya is a distinguished professor at Penn State Dickinson law and leading expert in intellectual property and new technologies. She's also the author of the new book, digital money demystified, which we're going to talk about today to guide you forward on your own journey of growth at your bank at your credit union or at your fintech. Welcome to the show. Tanya, it is good to share time with you today.
Tonya Evans:
James. Robert, I appreciate you so much. I'm looking forward to this.
James Robert Lay:
I am looking forward to this as well because this is an important topic and is a timely topic. It is a meaningful topic. And before we get into talking your new book, digital money to fit demystified, what is good for you right now personally or professionally? It's your pick to get started on a positive note.
Tonya Evans:
Outstanding. Well, I'll go the personal route and had the chance over this last week to spend a lot of time with my darling mother, also known as Tanya's mom, but this weekend I was actually Susan's daughter. We were in DC together, attending Howard University homecoming. I graduated in 98, from the law school, Howard University School of Law, and celebrating my 25th she was celebrating the 55th reunion of her line sisters, and attendance at Howard University. We're both members of Alpha Kappa Alpha Sorority Incorporated, but just hanging out with my mom and Howard doing adult things and connecting with each other is fantastic. Because we don't live in the same place. So that that has me on a high for sure.
James Robert Lay:
Well, you also that's the personal side, but the professional side, you've got this new book, digital money, that little thing. Yeah, digital money demystified. And I know as a fellow author, the time it takes the effort, it takes the energy it takes to write a new book. So my question to just start this conversation. Why take the time to write digital money demystified right now?
Tonya Evans:
Oh, boy, I got so tired. First of all, as a law professor, I teach blockchain crypto and the law. And obviously engaging with the next wave of lawyers is fun. I'm fully immersed in that. But the idea of reaching a broader audience of folks who don't necessarily have a tech or finance background, really got wrecked at the height or the cliff that we recently experienced with the latest bear market. And with so much misinformation, disinformation, information that we call Fudd, or fear, uncertainty and doubt, and also so much FOMO. Every time there's a price pump, you're gonna see a lot of folks coming in, who are less interested in learning what's underneath the hood, and more about how to make a quick buck or Satoshi as the case may be. And I just wanted to find a track in between the carnival barkers and the naysayers to really separate fact from fiction so that people have the clarity they need to make informed decisions. And I was doing a lot of speaking engagements. I have my own weekly podcast as well, tech intersect. And I thought it was a good idea to sit down, create an evergreen book that focuses on the myths, not necessarily the technology. Of course, the tech and laws regulations change almost every day, but the myths persist. And I wanted to get at the heart of that to give people a solid foundation in a safe space and place to learn from a trusted voice and then to make their own decisions.
James Robert Lay:
I appreciate the idea of FUD, fear, uncertainty and doubt, because it's often fear of the unknown, that holds many people back from at least being curious learning. And I think if we can just come away from this conversation with an open mind of what are the possibilities but also being well informed of the misunderstandings, the misinformation, the misconceptions that are holding people back even financial brand leaders who are listening right now what are these? What are the big misconceptions that people have? In the present moment around digital money,
Tonya Evans:
I think one of the top ones I'm sure you hear this a lot and then you see it from the sensational headlines and the actual headlines, hashtag sandbank been fried about crypto, crypto, that lumping everything in, which is also a myth. Crypto is all just for criminals, a fad. All of it is a scam. It is wholly unregulated, too volatile, which was an interesting bit of research that I did for the book to kind of challenge my own assumptions and mis perceptions about volatility. That crypto may be just for a unique and specific set of people. So not kind of for a more diverse and well informed and accessible area of finance, maybe just a tech bro or crypto bro, whatever that is. And so there are a lot of misconceptions and misperceptions and misconceptions about who's involved. What crypto is the fact that we have over 30 or 40,000 different types of coins and tokens and of course, that doesn't even include NF, t's etc. So really pushing back against the perception that this is holy criminality, and, and porpoises book just leaning into companies like chainalysis, and others that do really extensive blockchain forensics to be able to actually follow the money like a public permissionless blockchain is a terrible place to engage in persistent criminal activity. And the chain analysis reports even as recently as this year say that less than 2% of crypto asset use is used in the engagement of illicit activity. And final point, the almighty dollar is actually the number one currencies still being used in in criminal activity, and I'm not burning my dollars, although they could probably print more. And I suspect you're not burning your dollars either. So it's kind of separating fact from fiction about the why the what came to wear is is one of the first parts of pushing past those fears that you mentioned.
James Robert Lay:
This is fascinating, because perception creates reality. And if all you're hearing is the bad, the negative crypto is only for criminals. Well, that becomes your reality perspective is the sum of context and framing. But I think for context here, for those who are listening, or for those who are watching, we've been here before, let's go back to 1994. The that was the year that the internet reached the mass consciousness of humanity. And it's interesting, in hindsight, we can go back there was Paul Krugman, he was a 2008, Nobel Nobel Memorial Prize for econ scientists, he wrote 1998, so four years after 94, he said by 2005 or so it will become clear that the internet's impact on the economy has been no greater than the fax machine. Well, here we are almost 30 years later. And I'm seeing history repeat itself. But it's not just with the internet, obviously, you now have digital currency, digital money, which can be then subdivided into these different buckets. But you also have this whole other AI capability. And when people's perception and working with executive and senior leadership teams, I ask them, Well, what's your perception of like AI or chat? GPT? Well, that's what kids that's what kids are going to use a cheat in school. And that's what they're hearing over and over and over again. So what, what's the story behind the story, if you will, what the Z mystify some of this, what's the difference between quote unquote, crypto, and NF T's? And then maybe even going down the whole idea of decentralized autonomous organizations. I mean, that's a whole other rabbit hole. Let's break these down, because the people might have the Senate understanding. They have knowledge, they have awareness, they don't have understanding. There's a difference between the two.
Tonya Evans:
Yeah, it so much of that may even fit into the quadrate that folks don't know that they don't know. So to your earlier point, you see a headline, you see an acronym, and maybe it's clickbait worthy. You read a couple of sentences, and then one the person knows everything there is to know so they can reject it out of hand, right? Which I think is at a at a very basic level. Just fundamentally, I want to use the word lazy. Sounds like a judgment charged word, but I think it comes from my just natural curiosity, my focus on intellectual curiosity, lifelong learning. And, you know, always wanting to be intellectually curious. But also, I'm a lawyer and a lot. I'm a tenured law professor, I have a co higher appointment at the Penn State Institute for computational and data sciences. It's like I get that part. But there's a certain fundamental cautious curiosity about the impact that technology at least can have on your existing area of expertise. So you mentioned three areas, crypto assets, more broadly, non fungible tokens. dowels are decentralized autonomous organizations, I was the chair of the maker foundation. So that's how I cut my chapter on chops on the defy side. And just at a high level, when we even think of cryptographically secured assets, where does the term crypto comes from? Because crypto currency is a bit of a misnomer to me, I'd be interested in your thoughts. But cryptography has been around for a long time the idea to encrypt messaging, yes. Use in times of war, if you have to move information from one place to another, that has been around for millennia, dare I say in some form or fashion? Obviously, it's digitized now, right? And then you take the idea of currency, the ability not only to exchange information using, again, existing technology, peer to peer networks, used to be used for file sharing for those who are listening or will listen, that's like, I have air quotes, because I'm an IP lawyer. So some of the some of it was copyright theft, it's fine. That's a story for another day. But now we can use peer to peer technology to exchange value, not just information, and obviously, leveraging the internet to do that, and, and a novel way to organize and protect that data, when you're thinking about the data of transactions and balances. And that brings us to blockchain. Right.
James Robert Lay:
I want to pause you here because I think that's such an important point, you brought up the internet backup. All of this comes back to 94 when we're talking these different types of quote unquote, digital currencies, because they're building on the back of the internet. And if you think about, for example, just just I want to pause on currency, that right there, because I was having this conversation with a board of directors the other day. And they were asking, Well, what about your what were my thoughts on crypto? And I said, Well, I don't want to go down too far in that rabbit hole, because it would have taken us off track for that particular discussion. They're like, I don't I don't get it. How can something be intangible? And it has value and I go, well, well, what is money to begin with in the first place? It's just a store of value. And it's an agreed upon value. There's some value there. Because if we go back to kind of the dawn of time, seashells has stored the value and you could exchange your seashells for some other physical, tangible good. What has happened though, since 94, Peter Diamandis has written about this is physical assets have been digitized. And when they get digitized, they get decentralized. When they get decentralized. They get democratized. When they get democratized, they get demonetised. So the whole elements transform, I mean, even you're talking IP, that's what happened in music industry. 1999, the rise of Napster built on the back of the internet five years later. So I just want to pause for a little bit more context here that money is a store of value, and it's an agreed upon value here. And maybe it's because it's intangible. But then you can make the argument, well, what's back in the dollar, because we went off the gold standard. So there's that whole conversation, right? Where do we go from here to try to gain some clarity around things like cryptocurrency, non fungible tokens, Dow, all of that? And how do they all fit together so that we can at least get clarity into, okay, this is where we're at is where we've been? This is where we're at right now in the present moment. Where do we go from here? So let's come back to the present moment and get some context of where we're at right now.
Tonya Evans:
Yeah, this is a really a hopefully, this is going to be a helpful question for us to explore because I had to sit with that question myself. Early on, I entered the space like 2017 It was at the time the proliferation of the ICO boom and bust right. And so what's the point? What is the point of this magic internet money right? And is it going to put into question my for life? Since is to practice law in New York, New Jersey, Pennsylvania, DC, like I'm not interested. But then I started to explore all the different ways or options that we have to exchange value depending upon your present needs. Sometimes I have physical cash, sometimes I have the equivalent of that in another country's currency, do some type of foreign exchange. Sometimes I have I use my credit card. Sometimes I use L, sometimes I use PayPal Venmo Cash App, sometimes I'm sending a wire, yeah, sometimes if I could find my checkbook, it could be a check, whatever that is, right, all of the different options and opportunities depending upon what your needs are in the moment. And also to distinguish which is something I had to sit with and learn between government issued currency, and other forms of value that one would agree upon and recognize to your point of cowrie shells, sugar, salt, the laundry list goes on the unfortunate, horrible scourge of enslavement that had bodies as property, there have been a lot of things throughout the history of time, where people agreed upon a value for Exchange, and this will be the next wave of it. And I think it's so important for many reasons. One, because we have many borders in the world, there's so much going on in the world not to make this a political statement, per se. But money is politics in many respects, because governments issue that for many reasons, some of which have to do with the protection of borders. But imagine this world where the monetary system and value is not beholden to a particular border, borderless, borderless, which makes it really, really powerful in times when we're seeing revolutionary revolutionary change to an increasingly globalized society. So I think that's critically important as well.
James Robert Lay:
That's a fantastic point, because it comes back to that idea of of Peter Diamandis, the 60s model, where it is decentralized. Because if you think about, you know, the monetary system, centralization, the centralized bank, if you will, and now you have decentralization, to where you almost can go outside of that to exchange value through crypto through peer to peer what are the implications for a financial brand, a bank and community bank or a credit union to be considering because I think about the last run up, you know, what was it like? 2020 2021 time period, particularly on the Bitcoin side, but you saw it in all the different coins and like you said, what is it like 30,000 coins at this point? Right, it's mind boggling. I've got a two part question. And I want to I want to come back to the coins. Because there's so many different coins everyone here is typically Bitcoin Aetherium why is it important to not know every single one but what does that mean? For those watching or listening? Who have they've heard Bitcoin? They've heard it theory them. But what does that actually really mean?
Tonya Evans:
Yeah, I also kind of compare it to all of the different forms of currency around the world currently, I mean, a good way to think it's like, Okay, we have DOLLAR YEN, you have Euro that, you know, all beholden to a particular country, but you also have these projects that serve very different purposes as well. I wouldn't necessarily categorize myself as a Bitcoin maximalist, but bitcoin is the OG it's the gold standard, no pun intended, in some sense, and there are many that forked the code the underlying code for Bitcoin to make the next Bitcoin, the next Bitcoin, whatever that means. Unless and until I see that I don't find a reason to have anything that is the next Bitcoin you have Bitcoin. And then you have choices to make about other things, obviously, coming from the decentralized finance space as well. I understand and appreciate very much that there are projects that use tokens, either one to fund be careful with that, but also to that have many other reasons, besides the purpose that Satoshi laid out for Bitcoin that serve interesting purposes as well. It also makes me think of the first use case for web 2.0, for example, was electronic mail, which we almost never open now and think look at all the cool things that we're doing the amazing transformative things that we're doing with the internet that we couldn't have contemplated when Gumball of Brian Gumbel and Katie Couric, were talking about what is electronic mail and let's get an intern in here. That's right, Your it out, right. You remember what's the at sign?
James Robert Lay:
I actually I I showed I've showed that at some planning sessions, because it's like, how quickly we forget how far we've come and really a relatively short period of time. Absolutely.
Tonya Evans:
So it's important to spend some time this is the ethos in the spirit of the crypto economy also comes from financial privacy, autonomy, self sufficiency, self determination. So a lot of power in that, but also a lot of responsibility to not abdicate our individual responsibility to someone else to not worry our pretty little heads about the details, no, but the power is in the details. And so that calls us to at least figure out what's the difference between and the point of the difference between Bitcoin eight, obviously, you know, XRP got the meme coins, you have stable, Central Bank, digital currencies, this is the language of the future of money of the future of work of the future of wealth, it will become increasingly important with more space economy exploration, like, what would be the academy in space, right? Are we still going to be beholden to particular countries or we have something more global? What will be the global and universal reserve? These are the reasons that we have to figure this out? Not all 30,000. Right. But start where you are. And definitely start with the ones that have the greatest historical timeline that you can look back to January of 2009, and says, Okay, this has some staying power. What's this about?
James Robert Lay:
It's interesting, because, you know, you go back to 2009. So that's 15 years from kind of the birth of the Internet, or at least internet reaching mass consciousness of humanity, and the Katie Couric, Brian go, it's a fantastic at this point, kind of mean, looking back, then 2013 was when Aetherium came up. Now you've got in this is, I think, the intersection of intellectual property, smart contracts, connect those dots back to the coin. What does that mean? What, how does how does the the smart contracts play into the coins themself as a store of value value exchange? And I've got a follow up to this in a minute of where I think we'll probably see an increase value here, as we move further into the age of AI, particularly around things like deep fakes and authentication. So where, where did the smart contracts play into this idea of of cryptocurrency?
Tonya Evans:
Yeah, this is interesting, particularly when you think about decentralized protocols are those those base layers, those layer one solutions that will allow for the Internet to perform like a supercomputer, and for people to then monetize or not on top of the build on top of that infrastructure to automate certain if then functions, right, as a lawyer, when I hear contract, I thought of something completely different, then the automated performance that little bits of code can do and enable to remove a lot of the friction of things that, you know, we were paying people a rip seeking premium to do. I have no fear that lawyers will be replaced, great. There's a lot of things that I had to babysit and do and people were paying me hundreds of dollars to do that I didn't want to do wasn't the best to doing and I shouldn't be involved. Like, let me do that. It depends work. But let's automate the if then sequence, right. So now when I think of smart contracts, and that rudimentary example that we tend to use, like a vending machine, if I if I want to soda, have $2, and it's $1.50, I don't need anybody to be there to God willing, let the soda drop and give me my 50 cents change. And I'll be on my way. And then you extrapolate that into some really important and sophisticated things as a matter of decentralized finance, to truly be your own bank. To truly leverage your own crypto assets and pull out value in the same way you might pull out equity in a home, right? That's really powerful stuff. And that's some of the stuff that we will see smart contracts and also wallet addresses leading to identity.
James Robert Lay:
Yeah. And that that idea of identity comes back to you know, you have your identity in the physical world, but then you have your identity in the digital world, which is becoming increasingly under potential threat. With the rise of AI deep fakes. I mean, you're seeing headlines now. Celebrities, getting deep fake to promote product, or social media. And where might Digital money, play a way to authenticate who a person really is. And it might not necessarily be digital money, but it might be the the blockchain layer behind all of it. That plays a role here. What am I missing with this?
Tonya Evans:
Yeah, you you're spot on with respect to the underlying technology. And what I alluded to a bit ago about right now we're focused on wallet addresses, you know, this alphanumeric chain that uniquely identifies the holder of a particular cryptocurrency. But the idea of going beyond that, not just in the fungible token space, but also getting back to your earlier point of a non fungible token, which becomes this unique identifier with some type of metadata that points to what right now we're focused on maybe creativity or experience, but also could uniquely and synonymously point to a particular person, I think that's going to be the ultimate flex I, that's when we get there. And I think we're going to have to get there sooner than later, given the impact of machine learning, artificial intelligence, deep fakes, everything that you've mentioned before, that is a huge and pressing concern that this novel combination of existing technology of cryptography consensus, internet, peer to peer has placed us in the position to do some really exciting things not even just for currency, but for identity, which brings safety and all sorts of really important benefits.
James Robert Lay:
Well, that I did have crypto, and you move it into the NFT of the non tangible non fungible token space. You you've got that whole narrative that was being shaped by, you know, intangible assets, going for millions and millions and millions of dollars. I mean, he was leading the way with that. Board ape, for example, was was kind of the rise out of that, that narrative, but it's, yeah, yeah. It's very hard, though, for someone to understand, well, why would someone quote unquote, invest in an intangible asset that they don't own? But they, but that's where I think ownership coming back to the point of your, you know, legal background, how does ownership play into this? Because there is ownership here? It's just not physical.
Tonya Evans:
Right? Right. Because we have to, you know, some of the comparisons, I used to at least get people to appreciate what the non fungible token is, which is an asset in its own right, but really pointing to and connecting the evidence of ownership or at least a connection to some person place thing. Correct, right. And so the best way to even at a high level, understand that connection is to think of the deed to a house versus a house. And yes, you know, I can drive down the street and take a picture of a house, I can frame the picture of the house, I can hang that picture in my house, maybe I can even sell that as well, but I don't know if the house. If I'm fine with that, that's fine as well, or, but the deed is my ability to exercise kind of Dominion control or the connection to this other asset. And the same can be true. And then when we think of intellectual property, I started off all of my IP surveys say, you know, we're talking about is not physical, but actual property that is created with the mind that we evidence in some physical or tangible form, but the copyright is not the copyrighted, creative or artistic content, like copyright is the state given rights to exclusive rights over this property for a certain period of time. And it's also those property rights are created by government as well. So I think once people start to unpack what that means, then makes it easier to make the connection of this next intellectual leap.
James Robert Lay:
I think that right there is that next thing, it's like, where are we going from here is that future focus? Because if we think back to 2020 21, I know there are a lot of Community Financial brands that were caught off guard, they were unaware of the deposit loss from moving assets, deposit assets out of there, quote unquote Dominion control to use your words into the crypto market, whether that be Bitcoin was the big one or any of the other coins. They weren't even aware. And I'm like, well, we'll go look at your transactions, how much was moving from you to say, just a coin base, for example? And then it's kind of quieted down. Like, it has not been a big, big point of conversation over the past couple of years. But I think that was just the tip of the iceberg. It was the first iteration, and it's going to come back. Right now it's kind of a bit of a Lowell. What should a community institution be thinking about going forwards into the future? When it comes to digital money, where are the opportunities that they could be aware of to continue to create value for their members or for their account holders?
Tonya Evans:
This is such an important time and any downmarket I feel like this is my third because things get quiet. We talk about people building, because you're not chasing price action. People are kind of licking their wounds. And reorganizing from an investor point of view, folks are kind of repositioning themselves, this is the best time for business leaders, for brands to learn without the FOMO pressure of you know, on the pure investor side, we spent so much time talking about the investor side, it's important. Personally, I am invested in the market professionally, I have earned different types of cryptocurrencies in my tenure, but the best in biggest and most impactful relationship that I've had with the future of the digital economy is my professional pivot. My ability kind of in this, I know, I look very young, but on the inside, I'm quite old before it was over 50. listy and so kind of like it this mid level of my career. How do you remain relevant in a world that changes not in decades, not in years, in many instances, hashtag AI not even in months. And that's been around a long time. But coming in to your earlier point of public consciousness. The risk that business leaders are subjecting themselves to their C suite, their workforce and their relationships with partners, and their ability to be viable. In the future is created right now. It harkens back to that pivotal moment between, you know, blockbusters or Netflix like, which said, Are you wrapping as the young folks would say, Where are you going to fall and we don't have the luxury of time. You don't have the luxury of time to wait for legal to come down the hall and tell us it's okay now. Yeah, because it's a both and scenario where learning and positioning yourself because we're still relatively early, not even relatively early, we're still early. This is the opportunity to learn so that you can lead
James Robert Lay:
As we wrap up, I want to give people some context here. Alvin Toffler in the 1970s wrote, the illiterate of the 21st century will be will not be those who cannot read and write, but it will be those who cannot learn, unlearn, and relearn. And I think right now is a great unlearning relearning opportunity. Where can they grab your book, Tanya, to relearn for this new future? That is, it's coming. And there's a lot of fear, uncertainty and doubt. But you have a path forward to guide them, where can they grab your book and how can they connect with you?
Tonya Evans:
Absolutely. The book just launched on October 24. So it is out in the world and available wherever books are sold. If you want the fast track to quickly connect with me and the book, you can go to digital money demystified.com That will lead you to my free weekly digital money demystified, investor digest, and also the professional version of that that focuses on business rather than pure investment. I have masterclasses I have VIP training and consulting opportunities and all of that can you can find all of that at digital money demystified.com
James Robert Lay:
Get the book connected with Tanya Tanya, this has been such a great conversation. Thanks again for joining me for another episode of the banking on digital health podcast.
Tonya Evans:
Thank you so much.
James Robert Lay:
As always, and until next time, be well do good and be the light.
