Blockchain's Promise • Sheila Warren

Crypto Council for Innovation CEO Sheila Warren breaks down crypto, Web3, and blockchain once and for all. She and Niki discuss crypto’s future on Capitol Hill and how it might impact this election season, the critical role blockchain has in making AI more transparent, and why you might already have a Web3 mindset. 

“Things like authenticity, tracking, accountability, I think, are becoming even more important than they ever were before.” -Sheila Warren

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Transcript

Niki: I'm Niki Christoff and welcome to Tech’ed Up. Today, I'm joined remotely by my first-ever three-peat guest, Sheila Warren.

She's a former Wall Street lawyer, Davos exec, civic technologist, and the current CEO of the Crypto Council for Innovation. Sheila's here to talk about the state of play on Capitol Hill, crypto's political fortunes, and how blockchain technology could help solve some of the vexing issues baked into AI.

Sheila, thank you so much for coming on the podcast again.

Sheila: Thanks for having me, Niki. 

Niki: We met in exactly this format two and a half years ago when I asked a friend [chuckling], “What the hell,” - I didn't say hell - “is Web3?” And she's like, “Y’know who can explain that? Sheila Warren.”

One of your great strengths is communicating clearly and in a compelling way about technology that some people just zone out about, [Sheila: laughs] which is crypto and blockchain. 

So, I'm very grateful you're here. 

[cross talk] [Sheila: laughing]

Sheila: I think that's a very logical response, frankly, to anyone talking about the nuts and bolts of technology unless you're a technologist. 

Nobody really wants that level of detail on anything, let alone tech, to be fair. 

Niki: As the head of a big, an influential, trade organization here in DC, you're working specifically with Capitol Hill.

We both were kind of in the muck with the crypto industry and there were major headwinds caused by Sam Bankman-Fried, who is not representative of most people in the industry. And now crypto's back, baby, or, like, that's at least the word on the street. 

So can you tell us a little bit about some recent wins?

Sheila: Absolutely. It's great to note, y’know, this is certainly not the first time crypto has been back in - I don't know if it's in favor, but in the spotlight, and I think it's not the last time it will go in and out of the spotlight. There's definitely been tremendous progress in the last couple of weeks.

It's one of those things where things move very slowly and then very quickly, as is often the case, but we've seen a bipartisan support of a significant bill that passed the House called FIT21, which is a market structure bill, talks about the SEC and CFTC and their role as regulators and digital assets and in this industry.

 We saw a tremendous movement, actually, significant senators coming on side in a bipartisan fashion again to talk about their displeasure, apparently as noted by their vote on a staff accounting bulletin the SEC put down. Biden eventually allowed that to remain intact, at least for the time being, but that was tremendous as well.

I would categorize, I think, this time as a time when there seems to be a bipartisan and deep understanding in both chambers on both sides of the aisle that this is an important industry that we need to be taking it seriously in the United States. Any sort of dismissal of it, which I think was more par for the course in maybe ‘21, early ‘22, to say, “We don't have to pay attention to that thing. It doesn't really matter. That's all silly.” 

I would say that we've moved past that in a way that I do think is permanent. 

Niki: And one thing I wanted to ask you is why you think that's the case. So, one of the things that has developed over the past year, 18 months, is that the UK, Europe, UAE, Japan are embracing, not just cryp- [interrupts self] When people think crypto, they think Bitcoin generally, but not just crypto tokens, but the underlying blockchain technology. They are welcoming builders and entrepreneurs and making it easy to build there. 

Is that the issue? Is it political dynamics during a presidential year? Like, if you had to say what you think has sort of unstuck the gears here, what do you think it is?

Sheila: I think it's all of the above, to be honest. I think there was, I'll just call it what I think it is, an arrogance around the ability of, look, you're describing major economies, right? We're not talking about small countries. We're talking about major economies that have landed a clear path. It's not always an easy path to be regulated in these jurisdictions, but at least you know how to come within the perimeter, and what is in and out, and what the rules of the road are, right? 

So, that's a significant improvement over the United States where, apart from certain states at the state level, at the federal level, nobody really knows what to do and everyone feels like they're kind of guessing. By everyone, I mean industry actors. 

So, tremendous movement there, but there was an arrogance, “Oh, well, those jurisdictions aren't going to actually pull talent from the United States,.” And I think that's been proven to not be the case.

 I think you're seeing, increasingly, developers moving offshore. You're seeing companies that are starting to get built offshore. And I think there is some recognition that that's not great.

I was kind of the one that flagged that how analogous I found this situation with the offshoring to semiconductor manufacturing, right?

And the idea that we, the United States, had deliberately actually, not even accidentally, but deliberately pushed some of that activity offshore. And now, with the CHIPS Act, trying to claw it back. And that's proven to be very expensive to do. So, I think that things like that, the recognition that, “Oh, shoot, you know, cutting edge technology, even when we don't understand what it is or what it's for, we probably want to keep that on shore.”

So, I think that's part of it. 

Niki: I'm so glad you called that out as your original thread because so many people have repeated it [chuckling] and because it's a really good parallel, which is we shipped tech overseas thinking we don't need to build that stuff here, “globalization, blah, blah, blah.”

And then we had to pay a zillion dollars. We are paying now to bring it back to the US And your point is, let's not repeat this error. 

Sheila: The other point I think that's important is, is that the point is that nobody knew. They were just like, “Ah, we think it has this defined use that we know about. That's the trajectory. If we project that out, we don't care that much about it.” 

No one foresaw, right? Even, I would argue, could have foreseen, maybe, like, two people in the world could have foreseen, that chips have become crucial to everything, national security, supply chains, like everything, right? Nobody would have known that.

And so, similarly, my point in the thread was also how arrogant of us to think that we could predict, to think that we know. And when something is as sticky as this has proven to be, it's sort of like a Pascal's wager situation, right? Even if you're, if you're not sure, are you going to bet on trying to kind of retain some jurisdiction and authority over it, or are you going to kind of, I would say blithely, y’know, kick it offshore and be like, “Well, we'll just kick that can, kick the can on that problem. And if it turns out to be a big deal, we'll deal with it later.”  

And the other point is, they're not the same thing, right? The CapEx, the OpEx on something like a manufacturing of a chip is very different from decentralized technologies. But I actually argue that makes it even harder. It makes it even harder to set the rules based on which these technologies are developing. 

These being blockchain technologies, decentralized technologies. It's even harder once, y’know, the cat's out of the bag, as it were. It's really, if not impossible. It's not a matter of how much money you can throw at it. I think it just can't be done. 

So, that was kind of the warning I was trying to make, and I do think that was taken very seriously.  But I also think, y’know, to, to the other point you raised, we certainly cannot discount it's an election cycle.

It's an election season. It's a presidential, it's a close race, no matter who you talk to [Niki: yeah], I think everybody, y’know, is going to vote. I would arguem this is a very close race and everything makes a difference. And I think the crypto industry, led by a couple of different various folks, is throwing a ton of money into the election season, which is the first time industry's shown up in that way. And that, of course, that makes a huge difference. It'd be silly to say it doesn't. I do think it's, it's Interesting to note, y’know, the magnitude of the amount, right? There are other industries that have been doing this for a generation.

Okay. So, I think the crypto is finally showing up in the way that others show up, but I think it is sort of dramatic because, for a while, the industry has really not been present in that part of activity. Around politics and politicking, and now suddenly, it is showing up in a very big way. 

For me, what the crypto industry is showing up in this way is also indicative of is the next generation of those wealthy folks who, whether we like it or not, are the ones funding a lot of campaigns, right?

So, I live out in Silicon Valley. There's a generation or two, at this point, of billionaires, y’know, who've been funding campaigns and have become, sort of, like, the de facto big funders of a lot of different people. The next generation of that money is gonna have something to do with crypto. 

Whether they're in the crypto industry or not, most people who are in tech have some sort of crypto activity. They bought Bitcoin early, they're looking at altcoins, whatever it is. They're involved in it. The perspective is that the more hostile an individual politician or party or committee or whatever is to crypto, that portends them being hostile to tech. I can tell you it's perception out in the Valley that's held pretty strongly [Niki: mmmh] that being anti-crypto is like being anti-tech. 

And here's the next leap that's happening. That means you're anti-innovation. And that is where I don't think anybody wants to be. I don't think anybody who's running for office or an elected wants to be in a situation of being perceived as being anti-innovation unless there is some really specific consumer protection reason they can articulate.

Niki: I think you're making a really good point here, which is it's being, for people who own crypto, Bitcoin, I own Bitcoin. I didn't buy early. I bought it late, [chuckling], which is buy low, sell high. 

Sheila: Most people who bought early, who could track it actually sold it when it went up to like 100. Like, “Oh my God, this is amazing! Y’know, that, that's amazing!” So, don't feel too bad! 

Niki: Okay. No, as my mother says, “No one feels sorry for you,” which I'm sure is true. [Sheila: laughs] But in any event, I think you make a good point about all these big funders, right? And to everyone's dismay, there are just extremely wealthy people who push levers on the political apparatus of this country.

But I have noticed another trend, which is a lot of people in the industry say, “There's a crypto voter; 20 percent of Americans own some kind of crypto. This matters to them.”  But what I would almost flip that on its head and say, “0 percent of voters are calling for crypto to be banned or regulated,” like I'm not sure. [interrupts self] 

It's not social media. It's not TikTok where you have national security people with concerns. It's not AI where you have consumer privacy advocates or people focused on equity. There is almost no [chuckling] civil society or well-funded opposition. It's just constituents who care. And then there's, there's nobody clamoring for the Securities and Exchange Commission to look more closely at this.

So, I just find it like, what's the political cost of being in favor of a technology that's not going to be uninvented?

Sheila: I think that's right. And I think it goes back to, people have seen accountability, right? There have been a number of bad actors in this space. You mentioned Sam Bankman-Fried. And those folks are in jail, y’know? So I think that consumers feel like justice has been served. Those people did terrible things. They were caught, they were taken through a trial in our court of law, there's been consequences.

I think the industry also sees that. I do feel like the percentage of scammers and whatnot, y’know, look, I think the sad truth is they're moving into the next fatty thing. So, it's not like they're gone as humans. They're just not necessarily in crypto. Right? I also think consumers are more savvy now. They're a little bit more cautious about where they're throwing their money and not just relying on some anon on Twitter as, y’know, for their financial advice, right? So, I think there is a sophistication that's grown up around this just as a function of time.

I think you're right.

People aren't really anti-crypto. They might not be pro-crypto. They're kind of like, “That's not really my issue,” right? But I think being seen as anti-crypto again, it has these broader connotations and nobody's winning any favor, y’know, I don't think that it's a winning position to be anti-technology, particularly anti-this technology.

That's, that's definitely proving to be a worse bet than the opposite position, for sure. 

Niki: Right. And we were working together alongside each other in the crypto industry back during the Sam Bankman-Fried trial. During that time, crypto got banged up pretty badly from a public relations perspective, which is what I do for a living.

And one of the things I did, back as his trial was beginning, was I ran a poll. And crypto actually pulled worse in favorability than Congress. Both, both polled horribly. And so, I think people conflate Web3 and crypto and blockchain. They kind of don't know what blockchain is.

And when we talk about crypto they think the bros and they think the Lambos in Miami. [Sheila: yeah] Talk a little bit about blockchain technology, because the other thing I found in this poll that I did it was a thousand likely voters, 90 percent had no idea what blockchain was. And that's really what you and I are super stoked about.

So, talk a little bit about what, simply, what blockchain is and, what that can do for us in the future and how you're thinking about that tech. 

Sheila: Yeah, maybe what I'll do also, Niki, is I'll just distinguish blockchain, Web3, and crypto. I think that's helpful because people don't know what the heck any of these things are, right?

So, so, blockchains are technology. Like any other technology, It's a tool, it serves a purpose. What a blockchain does is it removes centralization from record keeping. Okay, so, rather than having a single source of truth that's held by me, or you, or a company, or whatever, this is actually is distributed system.

Nobody, no one person, controls access to that system, and it creates an immutable record of an exchange. If I transact in Bitcoin, or in Ethereum , or in any of the altcoins, that is recorded on a ledger. That is visible. It is transparent. Everyone can see it and you cannot unrecord it, right? It becomes a transparent, visible chain of custody that is immutable, meaning it cannot be changed or altered. 

Niki: It is also often anonymous, but that doesn't mean it can be unrecorded.

So, one of the concerns is like, “Well, sure, you just said it's transparent and all these things, but it's just a wallet number or, y’know, some sort of address.” However, to your point, the books cannot be cooked. You can't get rid of it. It is there permanently. 

Sheila: And so, why does that matter? Why do you care? You're like, “I don't really care. I trust so and so to be keeping a good record.” 

Well, we can't really do that as effectively as we used to be able to, given just the sheer volume and the, and the pace and the nature of exchange. And I use the word exchange very specifically because it's not just money being exchanged. It's information. It can be value. It can be data. It can be all these things. 

So, a blockchain is not tied to any sort of financial or money system. To be very clear, blockchains are used for supply chain recording. They're used for all kinds of things that have nothing to do with the financial service. It underlies things you probably use today without your realizing.

Okay. 

So, that's one thing that I'll go the way to Web 3. Web 3. I actually think is more of a cultural movement. It has specific aspects of it. Web3 is predicated on the existence and the deployment of a blockchain underlying something, right? But Web3 is really more about the movement from centralization being the safest, most trustworthy orientation to decentralization being the most trustworthy orientation. And I think it could be easy to understand why that could be beneficial or why that's a transformation outside of blockchain or crypto. 

It's happening in society more generally. Deep fakes. How do you address deep fakes? The Web3 kind of orientation or concept is designed to say, “How do you know that what you're looking at is true? How do you create authenticity around it? How do you create accountability around that authenticity.” Et cetera.

Okay, so Web3, I think of more as, like, a cultural kind of movement, if you will, that encompasses, you know, art, technology, culture, politics, all kinds of things.

Niki: We're in a, we're in a moment in time where people do want to get away from a few big companies controlling our data. That, y’know, you just have to sign the terms and conditions, you have nowhere else to go. Decentralizing it would put power back in individuals or smaller communities. And I think that is, set tech aside, we're in a moment where that is desirable because people do not trust big entities anymore. And so, it's a way to get smaller. 

So yeah, you're right. I think it's just a sort of movement, a vision for the future. 

Sheila: I actually think Cambridge Analytica did a lot more to further Web 3 than Bitcoin, but that's like a heretical position. But I mean, I'll just say it because I believe that! 

I actually think the data movement which is what got me into this space in the first place. The idea that honey pots and centralized places to hold data that were super hackable was a disaster waiting to happen. And then, of course, it happened. And it's still happening. [chuckling]

Only now we're calling it AI and language learning models because everyone's taking that data and shoving it, but it's the same problem. It's just, we're giving it a different skin, right? 

Regardless that rant aside, if you're a person who believes that, y’know, big giant tech companies having a monopoly essentially on data is problematic, you're already in a Web3 mentality and mindset, in my view. So, it's the broadest kind of thing. 

Now, what is crypto? Well, crypto, technically, crypto is the economy around tokens. It's not just an economy. It is how do you prove what is the thing that you are tracking from place to place? Okay, that is a token, almost always, it's called a token Just imagine that on a blockchain, the thing that is going from y’know place to place to place, that is called a token.

Sometimes, that token has secondary liquidity. It has a market that can go up and down and be highly volatile depending on what the token's being used for. Sometimes, that token has no market. Regardless, that function is really what crypto is. Some cryptos, in my opinion, are cryptocurrencies. Their intention and their use is currency-like. I'm not saying it's exactly the same as Fiat. I think that is the goal of some folks and some of these tokens. Some don't really have those attributes. Okay. Like, non-fungible tokens are less liquid in that fashion or not used in that fashion. 

So, regardless, a token is the basis for crypto and a token is- Again, it's a tool. It is a tool that enables you to track the movement of the thing, right? So, that's how I think about the three as distinct. Blockchain, I think it's pretty established for definitions. I wish there were definitions [chuckling] around the other things there aren't really.

So, I'm giving you mine, but I would say, having now been in this space for nine years,  I'm quite confident that this, these are sticky definitions and that we're kind of converging on these concepts in the terminology that we use across the space. 

Niki: And one of the very first episodes of this podcast, which I actually started because I did not understand a headline. It was a CNBC headline. It said something, like, “A 13-year-old mints an NFT and earns,” like, whatever, “30,000 dollars in ETH” or something. 

And I was like, “I don't understand any of that!” [Sheila: chuckles] And a woman, Jamie Smith, came on and explained it. Like, blockchain is, like, the tracks. And tokens are, like, the cars on the tracks, the things that are running.

So, with those definitions in mind, you recently submitted testimony to the Wyoming State Legislature to their Blockchain Committee talking about how this technology that we're talking about - set aside Web3, this kind of movement and ecosystem and crypto, which can be cryptocurrencies or other tokens, - but the pure blockchain, how can that maybe address some of the issues we're seeing that are arising with AI?

Sheila: Yeah, it's a great question. 

I think there are two main ways, and two main challenges we're seeing with AI. So, one is just the sheer amount of compute that's needed to process. Just to put this in the simplest terms possible, right? So, you get this giant allocation of data and you have to kind of crunch it essentially, right? And that takes a lot of compute. And so, one of the problems is it's not just the access to data, which is a solvable problem, right? 

Why are big tech companies the ones driving the most into AI? Two reasons. One, they already have the data from a generation of harvesting data from all of us through our interactions online. They could choose to share the data. It's a solvable problem, right? 

The second thing is they just have the resources. They have data centers. They have the computational resources that are needed to make sense of that data and to train a model and AI. Okay. And that is a much harder problem to solve. So, one of the things I think that's really exciting about decentralized technologies is decentralized computation, which is at the heart of crypto.

Like we just talked about, this is a decentralized technology. And so, one of the things that's happening is people are getting compensated, essentially. I don't want to make this sound too exciting or whatever; it's not like, y’know, a gold mine here, but there are ways of actually motivating and incentivizing people to use their compute, like idle compute that's sitting around, right, to do things like help with the compute around AI.

So, if you - I was a nerd in college, unsurprisingly- 

Niki: [interrupts chuckling] I was too! We were different kinds of nerds, but yes!  

[cross talk] 

Sheila: In a shocking revelation, I was a nerd.

So I did, I actually did crunching and use my idle gigantic, y’know, Mac I had at the time for seti@home, right? So, seti@home was: search for extraterrestrial intelligence.

I said it was nerdy!  

Y’know, that was actually like helping who it was, Seti, essentially, like, crunch, y’know, and kind of, like, use this idle compute to figure out, like, is there, are there aliens or not aliens, right? 

That was then transformed forward into something called folding@home around protein folding which really helped create a lot of information and data that's gone into genomics and things like that.

So, it's, these are, these are models that existed for a while. What the crypto layer enables is incentivizing that system. Right? And also, the amount of compute needed for something like an LLM is massive compared to seti@home or folding@home. So, we're talking in orders of magnitude differently. But that's one thing I think is really, really important.

And some of the companies in this space, they think they can actually multiply the available compute for machine learning a hundred X, which is massive. So, you're going to get a more free and fair marketplace for competition rather than a monopoly, which is currently held by these big tech companies that can afford and have this compute, y’know, harness within their, their current operations. So that’s one. 

Niki: So, just to recap this really quickly. What you're saying is that the power needed to process these huge data sets, there are very few entities, including governments, who can do that the way it needs to be done now. The idea is if you can engage or incentivize individuals, potentially just sitting around the globe. They can get involved in, in helping process some of this AI that's happening, which will decentralize that structure and make it more fair, and it will create a little bit of a marketplace for people. 

I heard recently, and I'm probably going to get this wrong that people around the world are watching for when salmon going through a dam are, like, going to miss it and get killed. I don't know. And they're flagging it. [Sheila: yup] But I think there is a world in which people are always online And if they get passionate about something, they will use their computer and their electricity to do something that's important to them.

I think I got that entire episode wrong, but I'm sure I'll just link to it and then people can watch it for themselves. But I was like, “Oh, cool. People are sitting around trying to save sea life!” 

Sheila: I love that and I think it's amazing. And I think this is the kind of thing it's a data problem, right? 

To a large extent, a lot of challenges are data problems. And if you can get ahead and create predictive models, which you can do if you just crunch data over time. Like, tons and tons and tons of data can create a prediction model, right? That's what a lot of people do a lot of people's jobs are creating prediction markets off of data. A lot of that just needs data and data needs, y’know, to your point, it's not just electricity, it's compute power.

It's actually, the, the, your computer has the ability to do a lot more than what it's doing, like when I'm like, online, y’know, on, I don't know, surfing Twitter and, y’know, [jokingly] thinking about killing myself because it's Twitter, whatever. [Niki: laughs] There's a lot of compute, my machine is up. 

There's a lot of extra space, let's call it, or extra power there. It's not being used. It could be used for all kinds of things, and it doesn't actually add to the electrical load, to be clear. It's just idle. It's called idle compute. You could use that and harness it for something else, and that's a choice you could make, and so part of what decentralized systems do is make that easier and also incentivize you to do it.

So, that's kind of the difference, the nuance I want to put it. Power is, I think, a broad term. People usually think that's about energy. It isn't necessarily about energy, meaning electricity. It's about this compute power that's kind of sitting there, not doing anything and could actually be deployed. 

Niki: And also human capital power. I mean, I don't know what kind of idleness I have [laughing]. I could probably be doing something with both my excess compute [chuckling] and my excess brainpower that I'm not doing other than watching a cult documentary. 

[both laughing] 

Sheila: Pretty sure, pretty sure. 

[both laughing]

Niki: Okay, so given all of this, this is one example of how blockchain technology can help democratize, in some ways, the AI system that we're all now in a hype cycle around.

Sheila: Yeah, and there's a second one I think is really, that I think is intuitively very obvious to people. And this is kind of, like, we'll call it the deepfake authenticity provenance example, okay? So, how do you know that the thing you're looking at is authentic, that it's real, that it was created by the handle that said they created it. 

How do you know what data goes into an AI and and also what data does not go into an AI? Okay, so I'll use the example: Scarlett Johansson and OpenAI. Okay, so I'll assume listeners are relatively familiar with this.

The idea is Scarlett Johansson was approached to say, “Can we use your voice for this kind of avatar?”  She said, “No.” When the thing was released, well, surprise, she had friends and family pinging her to say, “Oh, we didn't realize that you decided to do it!” And she was like, “I did not decide to do it. What are you talking about?” And it turns out that it sounded a lot like her voice. Okay. 

The question becomes, like, “Huh, because on the one hand, how could the company prove that they did not use, if they had wanted to claim, we did not actually use any of Scarlett Johansson's, you know, voice or whatever?” 

You can't prove that, right? Like, you don't know what was ingested by the language learning model that created this voice that they ultimately used. If you could track the inputs on a blockchain and immutable source of truth, you could actually prove a, what went into the system. So, you wanted to show, “I didn't use a super-biased data set. I used one that was geographically or demographically diverse,” whatever. You could prove that. Okay. Using a blockchain. You could also prove, “ I did not input X, Y, and Z data that I, that was not supposed to be in there. I did not do that.” You could prove it.

This is already underway and being used. So, hopefully, the system makes sense, right? You can track what goes in and then you know that what comes out. At least objectively, you know, the inputs that went in were supposed to be there and nothing that was extraneous or inappropriate, right?

FICO is doing this. So, FICO, we all know FICO, has patented a blockchain that actually tracks and audits both their AI-driven scoring models, right? So, the idea here is they're looking at what decisions is the model making and they're creating these permanent records of how they're developing the model.

90 percent of all credit decisions in the United States are determined by FICO scores. So it's really important what goes into your FICO score and what doesn't go into your FICO score. And a blockchain is demonstrating and proving that those inputs are leading to verifiable, fair, y’know, scores on the other side that are then being used for all kinds of reasons. 

Niki: Those examples get at two things.

One, the first is, was Scarlett Johansson's voice used to create this model? And also, we're all curious, what did they use? They, I mean, was it a voice actress that just sounded just like her? So, you could find out. [Sheila: yeah]

The second, is the idea that companies, or algorithms, or your credit score can tell you exactly what inputs are going in and they can track it. They're trying to avoid bias, but also errors that are catastrophic for people if they can't get a mortgage.  [Sheila: yeah]

And then, I know Getty Images is looking at this, but I think people do care to know if what they're looking at is a real thing, or if it's a modified photograph.

And so, provenance, which you referred to, the idea that you know what this image is and has it been edited. [Sheila: right] Y’know, I mean, whatever “poor Kate Middleton,” but also, like, the Photoshopping of her image is an example where people said, “Wait this has been messed with!” And in a moment where truth seems so hard to settle on, this is a way to provide some trust in various things by having the blockchain prove what happened.

Sheila: That's right.

And it's so funny you mentioned Kate Middleton because I had been telling [interrupts self] industry people who are passionate about technology, any technology, they also don't believe that like [sing-song voice]  their build and what I call the elegance of the technology is going to be like this dispositive thing that gets everyone on side. Right. 

And I'm like, “No.” And I actually said, about six months ago, it's going to be something like a royal who has some issue around a deep fake, and that's going to blow this up. And that's going to be the catalyst for centralized AI. These are the kinds of things, you're exactly right, that are capturing the popular imagination. And people are kind of saying, “Oh, okay! In other examples. I probably really do want to know if that thing is real or not real, or if the person calling me is actually who they say they are.” Right? 

So, all these kinds of things, I think, are going to matter increasingly in a world where, as AI becomes more and more prominent, as you're talking to an AI agent, most of the time, you're just going to want to have some verification mechanism that what you're getting is legitimate. It's authentic and also that it is as it's sent to you as it was intended to be sent to you without alteration by some, y’know, hacker or middleman in the middle. [Niki: yup] 

I think that's going to become sadly much more important, even more than it is today. 

Niki: I think that's exactly right because technology in general, I mean, whether it's AI or quote unquote crypto or whatever it is, it's just an accelerant our impulses that already exist, which is you're constantly parrying between truth and being an honest broker and law enforcement and, like, just people who are crummy and are going to take advantage of it. And so, we're in this cat-and-mouse game. And I love the idea that this can be a way to, sort of, sidestep those by giving some legitimacy to things we really care about. 

Okay, we'll end on as you look forward to the next, let's say, six months as we get through an election and you're thinking about your industry or global trends, what are, what's the most important thing to you?

Like, what are you focused on? 

Sheila: I wish I could say that it was something narrow, but I think for me it is the broad question of are we losing the American innovative edge? 

And that sounds melodramatic, I realize, but it is something that keeps me quite awake because I do see technology blooming. I've had global jobs for the last 15 years, right? I've had the privilege and luxury of traveling all over the world. And we're really falling behind in a lot of ways. And it's not just the regulatory environment that's holding us back. It's also that, y’know, we went digitally native as a culture, like a decade, almost a half generation after a lot of other countries. 

We are just behind a lot of other places. Part of the edge that I think the United States does retain is our commitment to democracy. And if that falters, we are losing what I think is our kind of remaining competitive advantage, that, and, of course, the dollar. Dominance of the dollar. Some of that, some of what we have done with the dollar, the global reserve currency, is eroding, because we're not necessarily perceived the way that we were two generations ago.

It's a sort of a, a dramatic answer to your question, but I would say that's what my eyes are on more than any sort of specific nuance on any kind of detail. It's that broader frame that I think is keeping me up at night. 

Niki: So, you just made some really smart points about innovation. We have been in a unipolar world. Like it is, iIt is absolutely dominated by American technology, and now we're seeing, as we potentially overregulate, or don't regulate, or have fear dominate things. We are kind of losing that edge. 

And I would put it more simply, this is me being emotional, but we're in a state as a country of, like, self-sabotage, where I'm like, “Can we just bring it down a notch and just focus on our strengths a little bit?” [chuckling] Because we do have a lot of things going for us.

So, I am hopeful. I am cautiously optimistic that democracy will remain intact. We will consider our courts to be legitimate and that they will act legitimately and that we will be pro-innovation. I mean, that's me personally!

Sheila: I think this reality distortion field is so strong as people are getting information from these narrower and narrower sources that are reinforcing these things. And I'm trying to pull out of that whenever I possibly can. Hence my comment about Twitter and my not loving it there, y’know, as an echo chamber, trying to pull out of that every time I can. 

Things like authenticity, tracking, accountability, I think are becoming even more important than they ever were before.

Niki: Hopefully, common sense will prevail and some critical thinking will apply. And certainly when it comes to, and just, it is quite narrow, but to blockchain technology, I just don't see a downside to us embracing it.

Even if you don't understand it, it's going to underpin many things in a positive way as a layer. Who knows how your email works, but nobody wants to not to have it in Washington. We're losing a lot of people for next year. So, you'll be back in DC pounding the pavement, explaining this all again. 

Thank you so much, as usual, for taking so much time to explain things to us. I'm grateful you came on. 

Sheila: Oh, thanks, Niki. It's always such a pleasure to chat with you!