Vitalik Buterin: Ethereum 2.0 | Lex Fridman Podcast #188

00:00:00.000 | The following is a conversation with Vitalik Buterin,

00:00:03.160 | his second time on the podcast.

00:00:05.240 | Vitalik is the co-founder of Ethereum

00:00:07.480 | and one of the most influential people in cryptocurrency

00:00:10.860 | and technology broadly defined.

00:00:13.240 | Quick mention of our sponsors,

00:00:15.360 | Athletic Greens, Magic Spoon, Indeed,

00:00:18.320 | Four Sigmatic, and BetterHelp.

00:00:20.840 | Check them out in the description to support this podcast.

00:00:24.280 | As a side note, let me say that Ethereum, Bitcoin,

00:00:27.800 | and many other cryptocurrencies have been taking a wild ride

00:00:31.240 | of prices going up and down in the past few months.

00:00:35.100 | To me, the prices were never as important as the ideas,

00:00:38.700 | both technical and philosophical.

00:00:41.140 | Cryptocurrency has the potential to empower billions

00:00:43.720 | of people to participate in the global economy

00:00:46.600 | in a way that resists the manipulation by centralized power.

00:00:50.660 | Also with smart contracts, layer two technologies,

00:00:54.000 | data pools, NFTs, and of course,

00:00:56.560 | integration of artificial intelligence into the whole thing,

00:01:00.080 | we have the opportunity to build tools and worlds

00:01:03.240 | that transform physical and digital life as we know it,

00:01:06.720 | hopefully minimizing the suffering in the world

00:01:09.720 | and maximizing the fun.

00:01:12.520 | This is the Lex Friedman Podcast,

00:01:15.000 | and here is my conversation with Vitalik Buterin.

00:01:18.560 | Let's first talk about Shiba Inu, if we can.

00:01:23.160 | Also known as Shiba Token, code SHIB.

00:01:27.320 | For context, Shiba Inu was created in August 2020,

00:01:31.440 | modeled off of Dogecoin by the anonymous founder

00:01:34.960 | known as Ryoshi.

00:01:37.360 | On May 10th this year, it had a market capitalization

00:01:42.160 | of over 13 billion.

00:01:45.300 | And maybe you can explain this, but in a crazy move,

00:01:48.440 | you were given half of SHIB's total supply.

00:01:52.780 | You burned, aka destroyed, 90% of it,

00:01:58.480 | that's worth $6.7 billion,

00:02:03.480 | and you donated 10%, that's worth 1.2 billion at the time,

00:02:08.500 | to an India COVID-19 relief fund,

00:02:13.400 | saying you don't want to be the locus of this much power.

00:02:17.760 | This is fascinating.

00:02:20.760 | Why and how were you able to walk away

00:02:23.620 | from this much money and this much power?

00:02:26.600 | - So I should probably start by giving

00:02:29.880 | some of the backstory around these coins

00:02:33.000 | and this concept of giving me coins.

00:02:35.580 | So first of all, Shiba Inu, as you said,

00:02:38.440 | is this kind of knockoff of Dogecoin, right?

00:02:40.800 | And Dogecoin was this initial fun coin

00:02:44.480 | that was created back, I think, around 2014 or so.

00:02:47.320 | And it was just created by Jackson Palmer

00:02:50.000 | and put it out as a joke for a couple of hours

00:02:52.240 | and a community formed around it.

00:02:53.960 | And at the beginning, people didn't take it very seriously.

00:02:57.680 | I actually remember putting about $25,000 into Doge

00:03:01.040 | sometime around 2016, and I just remember

00:03:03.360 | thinking to myself, like, okay,

00:03:06.160 | how am I going to explain to my mom

00:03:08.880 | that I just invested $25,000 into dog coins?

00:03:12.480 | And like, what even are dog coins?

00:03:14.000 | Like, the only interesting thing about this coin

00:03:16.300 | is that there's a logo of a dog somewhere.

00:03:19.840 | But of course, that ended up being

00:03:21.440 | one of the best investments I've ever made.

00:03:23.120 | And it did really well.

00:03:24.880 | And then at the end of 2020, Elon Musk, of course,

00:03:28.600 | started talking about Dogecoin

00:03:30.320 | and the market cap just shot up to about $50 billion.

00:03:35.320 | Actually, it shot up multiple times, right?

00:03:37.720 | Like the first time it went up from about 0.8 cents

00:03:40.920 | to about like seven cents.

00:03:42.720 | And this just happened all in one day.

00:03:44.160 | And I remember this was when I was still in Singapore

00:03:48.420 | in the middle of COVID.

00:03:50.260 | And I saw that the price just went up by a thousand percent.

00:03:55.260 | And I was like, oh my God, my Doge is worth like a lot.

00:03:59.180 | And so I immediately called up some of my friends

00:04:02.820 | and told them to like drop everything and scramble.

00:04:05.460 | And I just sold half the Doge.

00:04:07.100 | And I got $4.3 million,

00:04:09.340 | donated the proceeds to GiveDirectly.

00:04:11.340 | And a few hours after I did this,

00:04:13.640 | the price dropped back down

00:04:14.780 | from about seven cents to four cents, right?

00:04:16.460 | So I managed to sell the Doge at the top.

00:04:18.100 | And I remember just feeling like I was

00:04:20.900 | such an amazing trader.

00:04:22.260 | But then of course, the price went up from four cents

00:04:24.740 | then to seven and then 50 and just like Doge

00:04:27.980 | becoming this big phenomenon

00:04:30.820 | where there's even a lot of people that have heard of Doge

00:04:32.980 | that have not heard of Ethereum.

00:04:34.100 | It's just like something even I wasn't predicting, right?

00:04:36.820 | And so after that, of course, we have Doge

00:04:38.980 | and then people are thinking, well,

00:04:41.140 | if the leading dog token is worth $50 billion,

00:04:43.580 | surely the second largest dog token deserves,

00:04:47.460 | you know, at least seven or eight billion, right?

00:04:49.980 | I feel like that's the kind of what the mindset

00:04:51.980 | of these Shiba people is.

00:04:54.540 | So that of course, they did this other gimmick, right?

00:04:57.020 | Where they gave me half the Shiba token supply.

00:04:59.840 | They were actually not the first projects to do this.

00:05:03.420 | So around the end of 2020,

00:05:05.980 | there was this weird project called Teller.

00:05:08.700 | It's like T-E-L-L-O-R.

00:05:10.340 | I think they're a Chainlink competitor

00:05:12.020 | or something like this.

00:05:13.220 | But I remember they just like dumped $50,000 worth

00:05:17.140 | of their token into my wallet.

00:05:18.740 | And then they had their Twitter army

00:05:20.100 | just like basically run around saying,

00:05:22.020 | look, look at Vitalik's wallet.

00:05:23.340 | Vitalik holds Teller's.

00:05:24.460 | He's one of us.

00:05:25.300 | He's a supporter.

00:05:26.280 | And as soon as I discovered this,

00:05:27.740 | I just like publicly sold the Teller tokens on Uniswap.

00:05:31.460 | And this created a bit of a Twitter splat.

00:05:34.400 | Now, the Shiba people were more clever.

00:05:36.820 | The Shiba people, instead of dumping to that wallet,

00:05:39.180 | they dumped to my cold wallet, right?

00:05:41.420 | So in a cryptocurrency, right,

00:05:43.460 | there's this concept of cold wallets and hot wallets.

00:05:45.660 | Basically, the thing that actually owns your money

00:05:49.560 | is like this 80-digit number called a private key, right?

00:05:52.740 | And a hot wallet is when that private key

00:05:54.500 | is just stored in memory on your computer, on your phone,

00:05:57.420 | really easy to access.

00:05:58.780 | Cold wallet means it's either written down

00:06:01.760 | on a piece of paper or it's on a computer

00:06:04.820 | that's just never accessed the internet, right?

00:06:07.060 | So cold is very inconvenient,

00:06:08.420 | but cold is also much more secure, right?

00:06:10.620 | Because even if that computer has some viruses on it,

00:06:13.740 | like it's air-gapped,

00:06:15.900 | it's not actually going to be able to upload it.

00:06:17.820 | So this cold wallet,

00:06:19.780 | and like all the money is out of the cold wallet,

00:06:22.300 | so it's safe for me to talk about my setup now, right?

00:06:24.460 | But it was a laptop that was sitting in Canada.

00:06:27.580 | And I also had two pieces of paper

00:06:30.940 | where I wrote down two numbers

00:06:32.580 | on those two pieces of paper.

00:06:33.860 | One was with me, one was in Canada.

00:06:35.740 | And if you add those two numbers together,

00:06:37.380 | you get the private key.

00:06:38.780 | So because of COVID travel restrictions,

00:06:41.340 | and this cold wallet's in Canada,

00:06:44.260 | like it's very difficult for me to actually access it, right?

00:06:48.020 | And I'm not sure if they knew this,

00:06:49.980 | maybe they just got lucky,

00:06:51.140 | but basically they sent a lot of these dog tokens

00:06:55.860 | into this wallet where it was very difficult

00:06:59.460 | for me to access it.

00:07:00.420 | But then I saw these dog tokens,

00:07:02.420 | I saw more and more people talking about them.

00:07:04.120 | And then at some point I realized that like,

00:07:06.940 | hey, these things are worth billions of dollars.

00:07:09.260 | And like, you know, there's lots of really good things

00:07:11.860 | that you could do with that amount of money.

00:07:13.100 | And it would actually be a waste to just like see it go.

00:07:16.140 | So I made the decision that like,

00:07:18.740 | I would actually power through and figure out

00:07:21.260 | how to like safely, like basically get my private key.

00:07:24.940 | I actually had to call up my family,

00:07:27.260 | tell them to read out their number

00:07:29.220 | off of their piece of paper.

00:07:30.660 | I entered that into a fresh laptop

00:07:34.380 | that I bought from Target.

00:07:35.380 | And then I put in my other number on my piece of paper,

00:07:38.900 | added the two numbers together on the computer,

00:07:40.660 | there's the key.

00:07:41.660 | And at the same time, like just scrambled for two days,

00:07:45.540 | setting up a new wallet

00:07:47.060 | where I could move my ETH to safely,

00:07:48.820 | like getting people to be multi-sig partners,

00:07:50.820 | just like doing all sorts of like stuff

00:07:53.980 | that, you know, 10 years ago,

00:07:55.420 | you would expect to just be part of a cyberpunk,

00:07:57.420 | you know, science fiction novel,

00:07:58.660 | but you know, now it's all real.

00:08:00.020 | - So you're doing this all by yourself, essentially.

00:08:03.140 | - Most of it by myself.

00:08:04.340 | - 'Cause you have to keep it secret.

00:08:05.780 | - Right, and I needed my family to actually like go

00:08:09.580 | and read the number on their piece of paper.

00:08:12.220 | And then I am in my new multi-sig wallet,

00:08:15.660 | like there's other people that are signatories,

00:08:19.140 | but you know,

00:08:19.980 | I'm obviously not gonna reveal any details beyond that.

00:08:22.980 | So I did this, right?

00:08:24.780 | And I actually managed to like get the private key,

00:08:28.140 | make the first transaction that would just move

00:08:30.220 | all my ETH to the multi-sig wallet, so it's safe.

00:08:32.700 | And then second transaction,

00:08:34.780 | put the private key on my main computer,

00:08:36.380 | then started, you know,

00:08:37.700 | going in and just selling some of the dog tokens

00:08:40.380 | and then just like giving them to these different charities.

00:08:43.420 | Now, at the time,

00:08:44.460 | I actually did not even like have any idea

00:08:49.220 | of how much you would be able to get, right?

00:08:50.580 | 'Cause like on paper,

00:08:52.180 | the dog tokens are $7 billion,

00:08:53.820 | but like in reality, it's a very liquid market, you know,

00:08:56.460 | are you gonna crash it by,

00:08:58.580 | after you sell 1 million worth,

00:09:00.180 | are you gonna crash it after 10 million?

00:09:01.940 | Are you gonna,

00:09:02.980 | might you actually be able to get like an entire 200 million?

00:09:06.780 | I had no idea.

00:09:07.860 | So I definitely was just over the mindset,

00:09:12.820 | like, okay, I mean, I'll sell a bit,

00:09:14.540 | maybe I get some ETH and then, you know,

00:09:16.460 | donated some ETH to give well,

00:09:17.860 | donated some to other groups and then, okay,

00:09:20.020 | have some dog tokens.

00:09:21.020 | Like I don't have an easy ability to sell more myself,

00:09:23.340 | but then I'll just like give them to these groups

00:09:25.700 | and like, you know,

00:09:26.620 | hopefully they'll do good things with them.

00:09:28.980 | It was actually,

00:09:30.220 | I actually donated a 20% and dumped 80%.

00:09:33.860 | Yeah, so the COVID India group got one batch

00:09:38.420 | and then there's another group that got another batch.

00:09:40.900 | And I don't wanna say who they are

00:09:42.340 | 'cause I think that they wanna announce themselves

00:09:44.420 | at some point.

00:09:45.260 | - Sure.

00:09:46.100 | - Yeah, but you can see the fact that these transactions

00:09:49.180 | were made on the blockchain,

00:09:50.780 | but it was just very interesting and unexpected

00:09:57.140 | and just an insanely crazy situation.

00:10:00.780 | - It's been a couple of weeks.

00:10:02.900 | First of all, thank you for helping me hang up some curtains.

00:10:06.740 | This is a first for the podcast

00:10:08.420 | and shows that you're truly a special person

00:10:12.180 | to be willing to help.

00:10:14.780 | But now a couple of weeks later,

00:10:16.620 | do you regret any aspect of that decision?

00:10:19.280 | - I'm sure there is some things

00:10:21.740 | that I probably could have done better.

00:10:23.660 | Like I was actually talking to some of these charities

00:10:27.740 | and I was impressed by just how much money they managed

00:10:30.980 | to get out of selling some of these coins.

00:10:32.900 | So I probably could have done better

00:10:35.780 | by just like talking more with the traders

00:10:38.580 | and actually ensuring that they can do a better job

00:10:43.480 | of maximizing the value of all of them.

00:10:48.480 | But it was a very stressful time

00:10:52.340 | and I did have to act quickly.

00:10:53.700 | Like I did manage to make a lot of the donations

00:10:57.300 | before a few days before the great crypto crash happened.

00:11:01.260 | So it's difficult to like,

00:11:06.260 | obviously there's parallel universes in which I did better,

00:11:08.900 | but at the same time,

00:11:10.220 | there's also lots of parallel universes

00:11:12.460 | where because I hesitated more

00:11:14.380 | and tried to spend more time thinking,

00:11:15.860 | I missed the opportunity.

00:11:17.620 | So on that, it's like a luck of the draw

00:11:20.540 | and I'm just happy that everything was able to turn out

00:11:25.540 | as well as it did.

00:11:27.340 | - But psychologically, you mentioned stress.

00:11:30.260 | How hard was it?

00:11:31.340 | - It was stressful, right?

00:11:33.300 | I think, well, one of the really stressful parts

00:11:35.580 | was just the fact that I had to basically move

00:11:39.300 | all of my funds, including the 325,000 Ether

00:11:42.820 | from one cold wallet into another hot wallet,

00:11:45.100 | or sorry, into another multi-sig wallet.

00:11:48.260 | And maybe the multi-sig wallet had a bug in it.

00:11:50.860 | Maybe there's like some mistake I'll make in the middle

00:11:53.780 | that causes the funds to get lost.

00:11:55.700 | That part was stressful.

00:11:58.780 | And I was definitely stressing out for two days.

00:12:01.900 | I mean, triple checking the new wallet,

00:12:03.540 | I even did a bit of an audit of the code myself.

00:12:05.660 | I wrote my own JavaScript to DAP to make confirmations

00:12:10.060 | because GnosisSafe didn't work with the status wallet well.

00:12:14.020 | So there was definitely,

00:12:16.540 | that whole thing was definitely a bit of a marathon.

00:12:19.620 | I was also kind of definitely a bit worried about,

00:12:23.740 | or uncertain, I guess, how the public and,

00:12:27.580 | including the coin communities

00:12:28.980 | would perceive the whole thing.

00:12:30.540 | But I was actually impressed.

00:12:34.420 | For every poster that was saying like,

00:12:36.860 | no, why did Vitalik rug pull on us?

00:12:40.940 | He was, his wallet was supposed to be a burn address.

00:12:44.940 | There was like 10 people that were like,

00:12:46.820 | oh, I thought I was just in this

00:12:49.140 | because it's a fun pyramid gambling thing.

00:12:52.060 | But instead I ended up being part of this,

00:12:54.780 | great public, good thing for humanity.

00:12:56.380 | And that's like even more amazing.

00:12:58.420 | So the amount of that that I got was very impressive.

00:13:03.420 | So all in all, I think the dark people did great.

00:13:07.700 | - The dark people.

00:13:08.620 | Is there something you can extend

00:13:10.660 | to the bigger picture of it,

00:13:13.060 | in the principles you apply to making this decision?

00:13:15.660 | Is there some principles, philosophies

00:13:18.300 | that you apply also to the decisions you make

00:13:22.220 | around Ethereum?

00:13:23.420 | - I think a big one for me is just this idea

00:13:28.540 | that crypto isn't just an opportunity

00:13:32.780 | to give people slightly better ways

00:13:35.780 | to save value in all of these things.

00:13:38.100 | It's also an opportunity to basically create

00:13:42.020 | these new digital institutions

00:13:44.540 | that could serve the public good in new ways.

00:13:47.180 | And that's something that I've been interested in

00:13:50.900 | for a long time.

00:13:51.740 | I actually even have this article in Bitcoin Magazine

00:13:55.020 | back in 2014, where I basically suggested this idea

00:13:58.420 | that you would have coins that represent causes

00:14:00.940 | and people would just buy and accept those coins

00:14:03.780 | because they support those causes.

00:14:05.420 | So I think it's called markets, institutions, and currencies

00:14:09.140 | a new form of social incentivization or something like that.

00:14:11.540 | And I'm sure you can find it and throw it in the links.

00:14:14.340 | So that was interesting to kind of see becoming real.

00:14:19.620 | And in general, I think public goods are very important

00:14:23.380 | and on the internet, public goods

00:14:24.700 | are even more important.

00:14:26.460 | Like every single like Svetlana's podcast

00:14:28.820 | is just on YouTube and anyone can go and see it.

00:14:32.460 | There's no way for you to sell it

00:14:35.740 | and so that some people can see it,

00:14:37.740 | but other people can't see it.

00:14:39.020 | You could do that, but then you'd obviously be

00:14:41.500 | reducing your impact.

00:14:42.860 | So thank you for making the amazing Lex Friedman podcast

00:14:47.100 | so freely available.

00:14:48.260 | - Well, that's actually a tense thing is how do you do it

00:14:51.940 | in a way that's not controlled in a centralized fashion?

00:14:55.620 | 'Cause actually YouTube feels free and open,

00:14:59.140 | but it nevertheless is one company

00:15:00.700 | making centralized decisions.

00:15:01.980 | And the first time I realized YouTube was not forever

00:15:05.780 | is when a lot of the Joe Rogan experience library

00:15:10.020 | was pulled from YouTube as part of the Spotify deal.

00:15:13.500 | And it made me realize we need to,

00:15:17.140 | it's like the realization that Fiat money is centralized

00:15:20.940 | is realizing that this is not forever

00:15:25.780 | and you might want to come up with schemes

00:15:27.740 | to distribute it, to decentralize the control of it

00:15:31.500 | in the way that audio for podcasters was just an RSS feed.

00:15:34.660 | - Exactly.

00:15:35.500 | And I think one of the kind of philosophical things

00:15:38.100 | that I hope to achieve is kind of decouple

00:15:40.900 | the concept of public goods, which are incredibly important

00:15:44.460 | and are the lifeblood of modern civilization

00:15:46.860 | from the idea that there is or can be

00:15:51.020 | one central organization that represents the public

00:15:53.820 | and perfectly understands and can impose their idea

00:15:57.580 | of what is the good.

00:15:58.580 | When people talk about public goods,

00:16:02.380 | it just often comes with this baggage

00:16:04.460 | of either centralization or conformism.

00:16:07.420 | And I think it doesn't have to, right?

00:16:09.460 | Like often the most important public goods

00:16:12.260 | are the ones that are created by the crazy individualists

00:16:15.660 | that disagree with everyone else.

00:16:17.580 | So trying to make this kind of synthesis

00:16:21.260 | where you combine the values of decentralization

00:16:24.740 | and the values of open source,

00:16:26.420 | but you're not naive about it.

00:16:29.100 | And you realize that for these things to be produced,

00:16:33.700 | there needs to be a way for it to be sustainable.

00:16:36.060 | There needs to be some way of supporting people

00:16:38.340 | who are working these projects.

00:16:39.900 | But at the same time, you want to avoid that turning

00:16:43.340 | into a vector of centralization,

00:16:45.780 | like trying to sort of get all of the good things

00:16:49.980 | without the bad things.

00:16:50.900 | To me, that's a big part of sort of what my grand experiment

00:16:55.900 | in crypto is about.

00:16:58.060 | And we are doing things in different kinds of things

00:17:01.980 | for this, right?

00:17:02.820 | Like there's the Gitcoin grants quadratic funding

00:17:05.620 | in the Ethereum ecosystem.

00:17:07.460 | There's obviously these dog coins that just happens,

00:17:11.820 | I guess, accidentally.

00:17:13.100 | There's other projects that, like for example,

00:17:17.900 | Uniswap has their Uniswap DAO

00:17:20.980 | that just has a huge amount of funding.

00:17:22.620 | And like, we haven't seen yet

00:17:24.380 | how that's going to be deployed,

00:17:25.620 | but it could be potentially deployed

00:17:28.540 | to do lots of really good and amazing things.

00:17:31.660 | - Do you see Ethereum as essentially a mechanism

00:17:35.140 | to fight for social causes?

00:17:38.740 | - I definitely see Ethereum as being a mechanism

00:17:46.180 | to fight for definitely some specific things

00:17:51.740 | that are social causes,

00:17:54.940 | like just the fact of creating an open financial system

00:17:59.620 | that anyone can participate in,

00:18:00.940 | no matter where they are in the world,

00:18:02.300 | that's a social cause.

00:18:03.700 | Just giving people the ability to organize

00:18:07.220 | and create projects,

00:18:08.220 | even if it's five people in five different countries.

00:18:10.620 | I think that kind of inclusiveness,

00:18:12.300 | I think that's a social cause

00:18:14.180 | and it's a core crypto value.

00:18:17.340 | But then at the same time,

00:18:20.340 | like the other important part of the magic of Ethereum

00:18:23.780 | that you have to balance that against

00:18:25.140 | is that it is also this open platform

00:18:27.860 | where ultimately the things that are on Ethereum

00:18:31.940 | is just the things that the community makes of it.

00:18:34.460 | - Well, you kind of briefly opened the door,

00:18:37.700 | so let's go there.

00:18:39.620 | When it comes to government regulation of crypto,

00:18:42.860 | what's the best case scenario,

00:18:46.220 | what's the worst case scenario?

00:18:48.500 | In terms of, as you've kind of mentioned,

00:18:52.620 | Ethereum challenges the power centers of the world

00:18:57.060 | and how do you see the interplay between governments

00:19:01.980 | and this new technology that resists centralized power?

00:19:05.240 | Best case and worst case.

00:19:08.100 | - The best case is that

00:19:12.060 | blockchains continue to prosper

00:19:17.020 | and we figure out scalability

00:19:18.700 | so that people can actually start doing things on block,

00:19:22.380 | like all of the amazing use cases

00:19:24.660 | that people have been talking about

00:19:25.820 | instead of today where a lot of the great stuff

00:19:28.420 | gets priced out because transaction fees are at $5 to $10.

00:19:32.100 | And then we see a lot of different amazing applications

00:19:36.420 | happening on blockchains.

00:19:37.780 | It could be DAOs creating new ways for people

00:19:42.220 | to interact and organize with each other,

00:19:44.900 | new ways for artists to get funded,

00:19:46.580 | and just all sorts of these amazing things.

00:19:50.100 | And there's just enough public support

00:19:55.860 | and just enough people that see that,

00:19:57.780 | look, crypto is clearly doing a lot of good things.

00:20:01.220 | And there are definitely areas where there's tensions,

00:20:04.660 | but in those areas where there's tensions,

00:20:08.380 | there could be some kind of creative

00:20:10.460 | and interesting approaches that get figured out.

00:20:12.860 | The concept of corporate taxes, for example,

00:20:16.980 | that would disappear as a revenue stream

00:20:21.020 | if theoretically corporations just all get replaced by DAOs.

00:20:23.740 | But maybe there's some other creative way

00:20:28.180 | by which DAOs themselves can have some kind

00:20:33.180 | of encoded governance that ensures that they have

00:20:38.980 | at least some kind of bias

00:20:41.100 | towards serving the global public good.

00:20:43.220 | And maybe DAOs can do enough of that

00:20:47.620 | that people are happy with it.

00:20:48.900 | And there are going to be things

00:20:51.060 | that people are unhappy about.

00:20:52.180 | There's always going to be the people

00:20:53.380 | that wants to surveil everyone.

00:20:55.660 | But if the kind of effect of crypto

00:21:00.660 | from just empowering people is greater than that

00:21:04.260 | and greater than that in a way

00:21:05.340 | that people can just easily see,

00:21:07.180 | then that would be a good scenario, right?

00:21:09.260 | And we'll just become incorporated

00:21:12.980 | and accepted the same way as happened with the internet.

00:21:16.460 | But the worst case scenario would, of course,

00:21:19.780 | be just people suddenly flipping

00:21:23.860 | and going into moral panic mode and just,

00:21:26.380 | oh my God, this technology is used by,

00:21:29.460 | insert bad group of the day.

00:21:31.140 | And then I don't think governments have the ability

00:21:33.740 | to ban crypto to the extent of just completely

00:21:37.220 | preventing blockchains from existing,

00:21:39.300 | but they definitely have the ability

00:21:40.700 | to really marginalize it, right?

00:21:42.420 | Like if you just ban all exchanges

00:21:45.260 | and ban all links from the fiat ecosystem to crypto,

00:21:48.340 | and you ban all the kind of mainstream employers

00:21:51.380 | from accepting or paying in cryptocurrency,

00:21:54.620 | then you can successfully turn it into

00:21:59.620 | a fairly kind of niche countercultural thing

00:22:03.900 | that has much less impact than otherwise would.

00:22:07.540 | So it's somewhere between the good scenario

00:22:09.820 | and the bad scenario.

00:22:10.660 | I'm obviously hoping for the good.

00:22:12.420 | - Well, that's interesting also,

00:22:13.460 | the tension between governments and companies.

00:22:17.580 | Like if you have a bunch of billionaires

00:22:19.260 | or a bunch of companies like Tesla investing in Bitcoin

00:22:22.060 | and then governments resisting that,

00:22:24.620 | it's interesting who wins out in that worst case scenario.

00:22:27.700 | And then almost when companies

00:22:31.300 | and rich quote unquote respectable people

00:22:35.500 | embrace cryptocurrencies, Bitcoin, Ethereum, so on,

00:22:39.460 | even the dog coins, it almost sends a signal

00:22:43.260 | to everybody else that this is a revolution

00:22:46.940 | and it's here to stay.

00:22:48.020 | On this one little tangent that you brought up,

00:22:51.540 | this is almost an outdated idea, but it's still with us,

00:22:55.820 | which is cryptocurrencies are used for illegal activity,

00:22:59.700 | for drugs, for crime, and so on.

00:23:02.000 | Is there some sense that worries you

00:23:05.820 | that if cryptocurrency, if Ethereum runs the world,

00:23:10.820 | then crime, making money from crime will be easier?

00:23:17.060 | - There's always that possibility,

00:23:19.060 | but at the same time, I think if you look at

00:23:21.900 | the world as a whole and the way

00:23:24.660 | all the other technological trends are going,

00:23:27.380 | in-person surveillance is just going up every year.

00:23:29.980 | If you commit a crime in meat space,

00:23:34.260 | it's getting harder and harder to get away with it.

00:23:36.700 | So if you want to do something,

00:23:40.140 | and this is something that's just happening

00:23:42.580 | as a result of just better technology

00:23:45.100 | and information transparency,

00:23:47.380 | a lot of it's hard to prevent, even if you really tried.

00:23:51.100 | So the world where things go dark to such an extent,

00:23:56.100 | as the police hawks sometimes like to say,

00:24:01.580 | to such an extent that, "Oh my God,

00:24:04.300 | "the criminals are committing crimes with impunity

00:24:06.260 | "and we can't see anything," that just seems unlikely.

00:24:09.820 | But on the other hand, the world where there just

00:24:15.180 | is no privacy, for example,

00:24:19.220 | or the world where there just is no ability

00:24:24.220 | to act outside of the confines of mainstream institutions,

00:24:29.980 | that's something that's more realistic.

00:24:34.860 | And that seems like something that could lead

00:24:37.940 | to a lot of scary things.

00:24:40.780 | And even from a government's point of view,

00:24:43.620 | governments over the last few years,

00:24:45.220 | a lot of them, they're very worried about sovereignty.

00:24:48.060 | They're worried about if their country's economy

00:24:52.980 | is in social environments, they're just completely dependent

00:24:55.900 | on basically foreign tech companies

00:24:57.740 | controlled by foreign governments.

00:24:59.580 | Governments are not on team government.

00:25:01.580 | Indian government is on team India,

00:25:05.620 | the Russian government is on team Russia and so forth.

00:25:08.340 | They don't want the US to be able

00:25:12.620 | to have this big backdoor into everything.

00:25:14.980 | So I do think that a balance is needed,

00:25:17.980 | but at the same time, I do think,

00:25:22.980 | I guess I definitely worry more about the possibility

00:25:29.940 | that just without things like crypto,

00:25:36.620 | kind of acting outside of institutions becomes too impossible

00:25:40.860 | and I don't even necessarily mean outside of governments,

00:25:42.660 | even just outside of corporations,

00:25:44.380 | becomes too impossible and there's just terrible things

00:25:46.580 | that come as a result.

00:25:47.660 | If things going in the other direction,

00:25:51.020 | it obviously is a risk, but at the same time,

00:25:55.260 | I think in the long term, a crypto can potentially

00:25:59.140 | even offer defenses as much as attacks

00:26:02.460 | against that sort of thing.

00:26:03.420 | - Yeah, throughout history,

00:26:05.460 | many of the most destructive things came

00:26:07.300 | from centralized institutions

00:26:08.820 | versus sort of from the people operating in the shadows.

00:26:13.100 | And I've been talking to a bunch of psychedelics folks,

00:26:16.740 | the people doing researches like Greg Doblin

00:26:19.900 | in Johns Hopkins, there's a lot of exciting research

00:26:22.700 | on psychedelics and one thing you could say

00:26:25.540 | about operating at the edge of legality,

00:26:28.460 | it could actually accelerate the adoption

00:26:32.460 | of particular things like whether it's marijuana

00:26:36.500 | or psychedelics that can help people out,

00:26:39.260 | it almost accelerates the policy.

00:26:41.460 | It forces the policy to catch up

00:26:43.380 | to where the people stand.

00:26:44.860 | So there's a positive way of doing things

00:26:47.220 | that are in the gray area of legality

00:26:49.500 | and creating a market that allows people

00:26:51.580 | to in a safe way be able to participate

00:26:55.580 | in this gray area of legality.

00:26:57.140 | - The other thing to keep in mind, of course,

00:26:58.700 | is that the set of the kinds of things

00:27:01.700 | that just like payment processors as companies

00:27:03.980 | try to restrict people you from

00:27:05.820 | is much larger than the set of things that's illegal.

00:27:08.980 | Part of that is because they wanna be super conservative

00:27:11.460 | and the more layers you have,

00:27:12.820 | the more they're conservative because they're scared

00:27:15.540 | of what the layer below them will do to them.

00:27:18.080 | Sometimes they have their own moral opinions

00:27:21.540 | of various kinds.

00:27:23.180 | They go after lots of people.

00:27:24.580 | They make life really hard for sex workers, for example,

00:27:27.900 | psychedelics, as you mentioned.

00:27:30.300 | There's a lot of activity even including

00:27:36.100 | stuff that is totally legal.

00:27:38.060 | There's this shadow like PayPal, credit card governments

00:27:42.700 | or whatever you wanna call it.

00:27:44.100 | (mumbles)

00:27:45.340 | That makes it just hard to participate in this stuff.

00:27:47.980 | So I think reducing the number of intermediaries

00:27:50.380 | is definitely normally a good thing.

00:27:54.740 | - All right, let's talk about one of the most exciting

00:27:58.060 | technologies, technically, philosophically,

00:28:02.100 | socially, financially, in every way,

00:28:05.100 | which is Ethereum 2.0.

00:28:07.180 | There's a million things to talk about,

00:28:10.500 | but step one is probably a good thing to do,

00:28:14.060 | which is can you briefly summarize your vision

00:28:17.660 | how Ethereum 2.0 will make Ethereum more scalable,

00:28:21.060 | secure, and sustainable?

00:28:23.340 | - Sure.

00:28:24.380 | So I think recently we've actually been kind of de-emphasizing

00:28:28.460 | the ETH 2.0 branding, I guess.

00:28:30.700 | So the reason behind that was that originally we envisioned

00:28:34.300 | something more like a big grand event

00:28:37.100 | where all the good things would happen at the same time.

00:28:39.900 | It would be a new blockchain,

00:28:41.860 | and it would be a new protocol,

00:28:43.140 | and people would have to take a lot of effort

00:28:45.260 | to migrate over.

00:28:46.460 | But later we've slowly changed the roadmap over

00:28:50.660 | to something that's much more incremental.

00:28:53.220 | So proof of stake happens kind of over time,

00:28:56.060 | and then sharding gets added over time,

00:28:57.540 | and all these features get added over time.

00:28:59.340 | And so the experience for just a regular Ethereum user

00:29:02.660 | still feels very seamless.

00:29:04.500 | It's maybe a little bit more complex than the hard forks

00:29:07.340 | that we've already done from a user's point of view,

00:29:10.740 | but not by that much.

00:29:13.100 | So the big two things that are happening,

00:29:17.860 | these are what used to be considered

00:29:19.820 | the two flagship features of ETH 2.0,

00:29:21.820 | and now they're just the flagship features

00:29:23.940 | of the next evolution of Ethereum,

00:29:27.740 | as proof of stake and sharding.

00:29:31.300 | So proof of stake is a consensus algorithm,

00:29:34.140 | it's a, or a consensus mechanism, I should say.

00:29:37.540 | It's, the difference is that like an algorithm

00:29:40.340 | is something that you run by yourself,

00:29:41.780 | a mechanism is like, it involves interactions between people,

00:29:45.460 | and it could even include incentives and all of that.

00:29:48.100 | So a consensus mechanism,

00:29:51.060 | so by which nodes in the network agree on,

00:29:56.220 | you know, which blocks came in,

00:29:57.500 | which transactions came in, in what order,

00:29:59.740 | to make sure that once a block gets accepted,

00:30:02.020 | it can't get reverted,

00:30:02.940 | and all of these things that we expect from a blockchain.

00:30:06.340 | So existing blockchains, including Bitcoin,

00:30:08.980 | including the Ethereum of today,

00:30:10.460 | and including a lot of them,

00:30:11.660 | they use proof of work, right?

00:30:13.660 | So the reason why we need proof of anything

00:30:18.020 | is because like, they serve this function

00:30:22.140 | that I call an economic civil resistance.

00:30:25.540 | So that's obviously a big word for,

00:30:29.140 | especially if you've never heard of civils before,

00:30:30.980 | but like the basic idea is, right,

00:30:32.540 | that you have a network and you have lots of computers

00:30:34.580 | that agree on like which block to accept.

00:30:36.860 | And sometimes you get, you know,

00:30:38.180 | two blocks that get published at the same time,

00:30:40.020 | and you just have to agree on an order.

00:30:41.420 | So there has to be some kind of voting game.

00:30:44.220 | But then the question is, well, in this voting game,

00:30:46.460 | you know, who gets to vote, who gets to participate?

00:30:49.380 | Now, you can't say one person, one vote, right?

00:30:52.140 | The reason why you cannot say one person, one vote

00:30:54.100 | is because you need some kind of like authority

00:30:57.060 | or some kind of mechanism to say, you know,

00:30:58.780 | who the humans are.

00:31:00.900 | And if you don't have that,

00:31:02.940 | then a bad guy could just come in with a virtual machine

00:31:05.900 | or with a computer that has on it 10 billion virtual machines

00:31:08.980 | that have 10 billion, you know, virtual nodes.

00:31:11.100 | And then just like say, look, I'm 99% of the network.

00:31:13.860 | I should control everything.

00:31:15.780 | So to prevent this, what proof of work

00:31:18.900 | and proof of stake both do is they basically say,

00:31:21.260 | well, the weight of your vote,

00:31:23.180 | like how much influence your votes have in the consensus

00:31:27.540 | is proportional to like what quantity

00:31:29.980 | of economic resources you bring in.

00:31:31.780 | So in the case of proof of work,

00:31:33.380 | you prove what economic resources you have

00:31:35.300 | because your economic resources are computers

00:31:37.580 | and you prove that you have them by just running them 24/7

00:31:40.420 | using these hash algorithms, right?

00:31:42.740 | So this does solve the problem, right?

00:31:45.020 | Because in order to attack the network,

00:31:47.300 | you have to come in with more computers

00:31:50.180 | or more money invested into computers and electricity

00:31:53.460 | than the rest of the network put together.

00:31:55.660 | And that's extremely expensive.

00:31:57.540 | In proof of stake, instead of relying on people

00:32:00.620 | with computers that are just constantly cranking out

00:32:03.220 | hashes 24/7, as you're like a unit of economic resources,

00:32:08.220 | you just use like holdings of coins inside the system, right?

00:32:11.860 | So all of these blockchains,

00:32:12.940 | they have some kind of coin in them.

00:32:14.660 | Bitcoin has Bitcoin, Ethereum has Ether,

00:32:17.340 | you know, they all have a coin.

00:32:18.460 | So why not just use that as the economic resource

00:32:23.140 | that you're using to measure participation?

00:32:26.020 | So that's like the core distinction

00:32:29.380 | between proof of work and proof of stake.

00:32:32.060 | I like proof of stake

00:32:33.140 | and I've liked proof of stake for many years,

00:32:35.580 | basically because like it just requires

00:32:38.460 | much less ongoing resource consumption, right?

00:32:41.460 | Like with proof of work,

00:32:42.660 | I mean, we have to like actually go

00:32:44.060 | and buy these physical computers.

00:32:45.860 | And these days, you know,

00:32:48.100 | they have specialized hardware,

00:32:49.340 | ASICs, application specific integrated circuits.

00:32:52.140 | You have to go produce them, you have to go buy them.

00:32:54.300 | And unless you have millions of dollars,

00:32:56.620 | you know, you have to buy them

00:32:57.660 | from one of these other people who creates them.

00:32:59.740 | And those other people often end up

00:33:01.500 | taking a huge cut of the profits themselves.

00:33:03.860 | And then, you know, you have to plug them in,

00:33:07.020 | you have to just burn all of this electricity

00:33:09.980 | that's just running 24/7.

00:33:12.020 | So it consumes a huge amount of energy, right?

00:33:14.500 | And it can add not just energy,

00:33:16.140 | it also, you know, just to create the hardware, right?

00:33:19.220 | Like people focus a lot on energy,

00:33:20.820 | but like actually about half the cost

00:33:23.100 | of proof of work mining is the cost of the hardware.

00:33:25.580 | So hardware is a very big deal too.

00:33:28.260 | And you know, you need this like,

00:33:30.380 | this really big and powerful,

00:33:32.180 | like very specialized hardware,

00:33:33.500 | I know the kind that fills up these big warehouses.

00:33:35.820 | So proof of stake,

00:33:36.820 | you don't really need that much electricity.

00:33:39.180 | You just need just a little bit

00:33:40.740 | to run a regular computer.

00:33:43.180 | You can run proof of stake validators

00:33:45.060 | on computers that you already have.

00:33:47.420 | So it's just much less resource intensive.

00:33:52.300 | And like, this is good for a few reasons, right?

00:33:54.100 | Like one is, you know,

00:33:55.220 | the kind of environmental rationale that,

00:33:57.380 | you know, you're not breaking the environment.

00:33:59.700 | The second is that you're not taking away electricity

00:34:04.060 | and like other resources from other people.

00:34:06.260 | I mean, like right now there's,

00:34:08.060 | I think just today I saw a story about like Iran

00:34:10.820 | wanting to shut down some Bitcoin mining

00:34:12.780 | because it was just grabbing up so much electricity

00:34:15.420 | that it was, you know, outbidding the nearby towns

00:34:17.500 | and they just didn't have enough.

00:34:19.980 | And then there was like Chia,

00:34:22.340 | the one that's doing proof of like hard disk mining,

00:34:24.940 | basically it's just like grabbing up so many hard disks

00:34:27.220 | that there's a shortage, right?

00:34:29.140 | So that's the second reason.

00:34:30.140 | And then the third more selfish reason

00:34:32.420 | is that because participating in consensus

00:34:34.860 | does not require so much energy expenditure,

00:34:37.820 | you don't need to pay people as much to participate, right?

00:34:40.900 | So like Bitcoin and Ethereum,

00:34:42.420 | they both issue somewhere around 4%

00:34:45.580 | of the total supply every year right now to miners.

00:34:48.660 | So Ethereum is about 4.7 million ether

00:34:51.060 | and the current supply is about 115 million.

00:34:53.700 | But with proof of stake,

00:34:54.700 | like we expect it'll be somewhere between 500,000

00:34:58.620 | and one million per year.

00:35:00.460 | So that means, you know,

00:35:03.140 | the supply doesn't have to increase so quickly.

00:35:07.100 | So-

00:35:07.940 | - One of the pros that people sort of argue

00:35:11.620 | for the proof of work is that it is secure

00:35:14.820 | because it's much more difficult to sort of,

00:35:17.820 | as you've highlighted, it's difficult to participate.

00:35:19.980 | Is there, what are your thoughts about the security

00:35:24.980 | of the proof of stake mechanism?

00:35:28.980 | Is there ways to make it secure?

00:35:30.700 | - So I think proof of stake is very secure

00:35:32.660 | because in order to be able to attack the system,

00:35:36.540 | you need to have like basically as much stake

00:35:39.300 | as the rest of the network, right?

00:35:41.300 | So that means like right now, for example,

00:35:43.140 | we have 5 million ETH staking.

00:35:44.660 | So you have to come up with 5 million ETH

00:35:46.300 | and then join the network.

00:35:47.660 | And then the other, so 5 million ETH is a lot, right?

00:35:52.020 | It's like, how much is it now?

00:35:53.740 | Like $15 billion.

00:35:55.260 | So that's actually more than I believe the cost

00:35:58.300 | of attacking the Bitcoin network.

00:36:00.460 | And then the second thing is that recovering

00:36:03.060 | from attacks is much easier in proof of stake

00:36:05.020 | than in proof of work, right?

00:36:05.980 | Because in proof of stake, you have, like, first of all,

00:36:08.980 | we have for many kinds of attacks

00:36:10.660 | that you do against this network.

00:36:12.100 | We have this concept of like automatic slashing, right?

00:36:14.620 | Which basically means that in order to like revert

00:36:18.460 | a finalized block, so if there's one block that's like

00:36:20.820 | accepted by the network and you try to convince the network

00:36:23.940 | to kind of revert that block and accept a different block,

00:36:26.940 | in order to make that kind of attack,

00:36:28.820 | you basically have to have your validator,

00:36:31.940 | like a big portion of your validators,

00:36:33.580 | sign two conflicting messages.

00:36:35.940 | And this is something that like,

00:36:36.980 | once these messages are on the network,

00:36:38.940 | you can go and prove, like, look, these people did it.

00:36:41.300 | And so we have this feature in the protocol called slashing

00:36:43.820 | where you basically take all these people

00:36:45.700 | who provably misbehaved and you burn their coins, right?

00:36:48.620 | And you don't burn anyone else's coins.

00:36:50.660 | Now, there are other cases, like for example,

00:36:53.540 | if instead of reverting blocks,

00:36:55.380 | the attack just tries to censor everyone, right?

00:36:57.620 | Then what you do, everyone who got censored

00:37:00.300 | would just like basically create the minority chain.

00:37:02.860 | And then the community would basically have

00:37:05.420 | to do a soft fork, right?

00:37:06.380 | They would just have to say like,

00:37:07.380 | "Look, this chain is clearly attacking us.

00:37:09.020 | This chain is the one not attacking us.

00:37:10.740 | And so we're going to join this chain."

00:37:12.340 | And then what happens is that on that new chain,

00:37:15.100 | the attackers also lose a lot of coins, right?

00:37:17.500 | So the difference between proof of stake and proof of work

00:37:20.620 | is that in a proof of stake system,

00:37:22.180 | like you can identify specific participants

00:37:24.620 | and you can say, you know, these,

00:37:26.500 | and like, this isn't like, you know,

00:37:27.940 | a human going in and saying,

00:37:29.060 | "I don't like you, I don't like you, I don't like you."

00:37:30.500 | This is like automated, right?

00:37:32.260 | You can go-

00:37:33.100 | - So the slashing process is automated.

00:37:34.620 | - Yes.

00:37:35.700 | - Is there ways it can go wrong?

00:37:37.460 | So that's a painful process where the coins are burned.

00:37:40.220 | - It is painful, yes.

00:37:42.580 | I think, I mean, the one big unknown, of course,

00:37:45.980 | is like if an attack actually happens

00:37:48.580 | and like if an attack happens that requires the community

00:37:51.380 | to actually choose one of these minority forks,

00:37:53.860 | then like what would the community

00:37:57.180 | actually successfully coordinating on this look like, right?

00:38:00.020 | Like it's like, you know, we can talk about it

00:38:03.220 | and we can, you know, write like science fiction novels

00:38:05.940 | about it, but like until it's happened,

00:38:07.900 | you don't really know the details

00:38:09.180 | of like what it looks like and how difficult it is.

00:38:11.020 | - What are the channels of communication for the community?

00:38:13.540 | If you can enlighten me a little bit, like what,

00:38:16.660 | you know, in many ways in the political realm,

00:38:19.980 | Twitter is often used as a way to kind of

00:38:22.340 | have these emerging phenomena of large groups of people

00:38:25.420 | coming to a consensus about a particular idea.

00:38:28.300 | And then there's battle for consensus.

00:38:30.380 | What's in the Ethereum community, how do people,

00:38:35.140 | what are the sources of natural language-based communication

00:38:39.420 | that have an emergent belief structure that you would say?

00:38:43.000 | Or is it all through money?

00:38:45.380 | Is it all through trading that the communication happens?

00:38:48.140 | - There's definitely talking as well.

00:38:50.140 | I mean, like we have to agree

00:38:51.940 | on protocol changes somehow, right?

00:38:53.660 | Like there's Twitter, there's Reddit, there's GitHub,

00:38:57.060 | there's all of the various Ethereum forums,

00:39:00.540 | Ethereum magicians, Ethereum research.

00:39:02.820 | There's just in-person communication.

00:39:05.060 | Then there's just kind of like the hidden web

00:39:06.900 | of everyone talking to everyone on Telegram or Signal.

00:39:11.260 | So it's like some of everything, right?

00:39:14.040 | But I think like the thing to emphasize around,

00:39:17.320 | like can you actually come to consensus on, you know,

00:39:19.700 | whether or not to fork the chain

00:39:21.540 | because the attacker is censoring everyone,

00:39:23.540 | just for example, is like,

00:39:25.940 | everyone who's running a node

00:39:27.860 | is going to see almost the same thing, right?

00:39:30.420 | Like they're gonna be off by a few seconds

00:39:32.480 | and like maybe they'll be off by a few minutes,

00:39:34.180 | they'll disagree by a few minutes.

00:39:35.500 | But like, if it's a serious attack, you know,

00:39:37.720 | people are gonna know, right?

00:39:38.820 | It's not like one of those things where, you know,

00:39:40.940 | oh, we're trying to agree on like, I don't know,

00:39:43.940 | did Epstein kill himself or like some random political fact

00:39:48.140 | where like in reality, no one knows a single thing

00:39:50.100 | about what's actually going on

00:39:51.400 | and they're all speculating.

00:39:52.620 | Like it is much more visible, right?

00:39:54.380 | So we do have that, but you know, at the same time,

00:39:57.340 | I'm happy to admit that like,

00:39:59.220 | these are fairly untested mechanisms,

00:40:02.120 | but like at the same time,

00:40:03.380 | they're also untested mechanisms in proof of work, right?

00:40:05.860 | And like in proof of work, it's even harder

00:40:07.500 | because in proof of work,

00:40:08.920 | you don't have the ability to like identify and say,

00:40:11.580 | like, you know, I'm going to, these miners attacked

00:40:14.380 | and so we're not gonna let these miners in,

00:40:17.220 | these miners not attack, so we're gonna keep them in.

00:40:20.260 | Like you have to pretty much, you know,

00:40:21.540 | either take out none of the miners

00:40:23.760 | or you do a fork that changes their proof of work algorithm,

00:40:26.500 | which takes out all of the miners, right?

00:40:28.060 | So the economics of like recovering from attacks

00:40:32.180 | in proof of work, at least to me,

00:40:33.580 | actually do seem like more unfavorable,

00:40:36.980 | but you know, I'm sure the proof of work people you talk to

00:40:39.740 | will give a very different and contradictory opinions

00:40:42.500 | and that's totally fine and amazing.

00:40:44.640 | - Some people describe MEV,

00:40:47.100 | minor extractable value as an existential risk to Ethereum.

00:40:51.720 | What is MEV?

00:40:52.860 | How important is it to solve MEV?

00:40:55.020 | If it's important, what ideas do you have?

00:40:57.180 | - Sure, how about after this one,

00:40:58.780 | we'll also talk about sharding,

00:40:59.940 | 'cause it's amazing and it's part of-

00:41:01.620 | - We'll return back to sharding,

00:41:03.660 | which is, we'll return to the big picture

00:41:06.060 | of the scaling problem, as you mentioned.

00:41:07.980 | - I love this conversation, you know,

00:41:09.740 | depth first search instead of breadth first.

00:41:12.700 | So basically, okay, MEV, minor extractable value,

00:41:17.700 | it is not different in proof of work and proof of stake,

00:41:20.180 | right, so like if you want to call it, you know,

00:41:22.140 | block proposal extractable value,

00:41:23.900 | like it sounds a lot sexy, but you know,

00:41:25.340 | we can call it BPEV instead of MEV, who cares?

00:41:28.420 | But the basic- - So this is a problem

00:41:30.220 | in both proof of work and proof of stake.

00:41:32.020 | - Yes, so the basic idea is that

00:41:36.460 | if you have the ability to choose

00:41:39.260 | which transactions go into a block and in what order,

00:41:42.580 | then you have the ability to like take advantage

00:41:45.020 | of that position for economic gain

00:41:46.900 | in a lot more ways than just collecting

00:41:48.700 | transaction fees, right?

00:41:50.060 | Like for example, there's decentralized exchanges

00:41:52.460 | on chain like Uniswap.

00:41:53.980 | And like, let's say the price of ETH versus USDC

00:41:58.820 | was 2,700 the previous block,

00:42:01.940 | but then there was a bit of a market drop

00:42:03.460 | and now it's 2,680, where you can go on Uniswap

00:42:05.940 | and you can just like gobble up the entire part of,

00:42:09.020 | you know, the automated order book

00:42:10.900 | that's like between 2,700 and 2,680, right?

00:42:13.460 | And that's, and then at the same time,

00:42:15.660 | you like run a bot and you know,

00:42:17.820 | you buy some ETH back at 2,680

00:42:19.460 | and you've just like made about $10 of profit, right?

00:42:21.740 | So, or well, $10 times, you know,

00:42:24.100 | whatever the depth is, right?

00:42:25.300 | So, and so there's lots of little things like that.

00:42:28.500 | There's also things that involve like front running

00:42:31.540 | other people's transactions.

00:42:33.220 | So one example of this would be that

00:42:35.980 | if someone sends a transaction that says,

00:42:38.860 | like, I don't know, buy me five ETH

00:42:41.260 | for whatever price that you can get,

00:42:45.700 | then, but with a maximum of, let's say,

00:42:48.420 | yeah, $15,000, then you can go and like,

00:42:52.100 | you can send each, put a transaction

00:42:54.420 | right in front of that transaction

00:42:55.820 | and you can like buy up that ETH first

00:42:57.580 | and then you resell it to him at, you know,

00:42:59.100 | $15,000 minus one.

00:43:00.900 | So there's-

00:43:02.340 | - And then you get to make a little bit of money that way.

00:43:03.860 | - Exactly.

00:43:04.700 | So there's a lot of these different like arbitrage,

00:43:06.380 | front running, back running, these different tricks

00:43:08.500 | that allow block proposers to-

00:43:11.100 | - To get some percentage on top, like overhead.

00:43:13.540 | - Exactly.

00:43:14.380 | - Okay.

00:43:15.220 | - And the reason why this is a challenge

00:43:17.460 | is because it's, like, first of all,

00:43:21.660 | it sometimes degrades user experience

00:43:24.340 | because users get in a less favorable trades,

00:43:27.460 | but there are sometimes ways to like mitigate that

00:43:30.580 | for applications, sometimes it's not that bad.

00:43:32.940 | But like the bigger risk that I think

00:43:34.860 | some people consider more existential

00:43:36.660 | is that there's just much more economies of scale

00:43:40.180 | in figuring out how to extract all this revenue, right?

00:43:43.020 | Because if you're just collecting transaction fees,

00:43:45.220 | there aren't really economies of scale,

00:43:47.420 | there aren't really benefits to centralizing, right?

00:43:49.300 | Because it's a very simple formula.

00:43:50.620 | You just like grab up the transactions

00:43:52.060 | that pay you the most.

00:43:53.380 | But with MEV, there's all these sophisticated algorithms.

00:43:57.820 | And if you have lots of money,

00:43:59.980 | then you can hire really smart people

00:44:01.420 | to make amazing algorithms.

00:44:02.660 | And then you can use the other half of your money

00:44:04.660 | to get a lot of mining power or a lot of stake.

00:44:06.820 | And you get a lot of opportunities

00:44:08.180 | to use your even better algorithms.

00:44:09.980 | So there's this risk that like as a result of this,

00:44:14.540 | mining is basically, or even validating proof of stake

00:44:18.620 | is going to centralize.

00:44:19.820 | So I think the ecosystem's best reply to this sort of risk,

00:44:24.860 | and it's the direction where projects like Flashbots

00:44:27.820 | are going already, is if you can't eliminate

00:44:31.900 | the centralization, then you try to firewall it, right?

00:44:35.300 | And the way that you firewall it is you basically say,

00:44:39.100 | we're going to try to deliberately create a marketplace

00:44:42.060 | where people can just do the complicated work

00:44:45.380 | of creating what are called bundles,

00:44:47.140 | like bundles of transactions that are very profitable.

00:44:51.900 | And then at the other side of the market,

00:44:54.260 | you just have like block proposes reminders

00:44:56.660 | that are just dumb notes.

00:44:57.820 | And they go and ask the, what are called searchers,

00:45:00.860 | the bundle creators.

00:45:01.860 | And they just ask like, hey, how much can you give me

00:45:04.620 | if I put in your bundle?

00:45:05.580 | And then they just take the highest offer.

00:45:07.740 | So you sort of separate out the task

00:45:09.380 | and you have the easy part,

00:45:11.420 | and then you have the hard part,

00:45:12.660 | and you have like this special class of actor

00:45:14.580 | called a searcher that does the hard part.

00:45:16.180 | And then the easy part, the people doing the easy part,

00:45:19.420 | which is just miners and validators,

00:45:20.740 | they kind of just talk to all the different people

00:45:24.540 | doing the searching and they just, you know,

00:45:26.180 | accept the highest bidder, right?

00:45:27.740 | So, and this is also just like interesting,

00:45:32.060 | an interesting example of like economic design philosophy,

00:45:34.980 | right?

00:45:35.820 | Like sometimes you can't just like make centralization

00:45:38.300 | go away, sometimes it's inevitable,

00:45:39.860 | but at least you can try to kind of contain it,

00:45:43.180 | you can direct it, or you can even sort of firewall it away

00:45:47.340 | from core consensus,

00:45:49.300 | the parts that really do need to be decentralized.

00:45:51.580 | - But you don't see it as an existential risk.

00:45:53.740 | It's just a bit of a problem

00:45:56.300 | that has to be constantly dealt with.

00:45:57.940 | - It's a risk.

00:45:59.380 | Like there's obviously a risk that, you know,

00:46:02.420 | it's a very severe problem,

00:46:04.060 | and that even this flashbots approach

00:46:06.020 | has some fatal flaw or whatever.

00:46:08.140 | But I'm definitely,

00:46:09.980 | we're definitely approaching it with the mindset of,

00:46:13.020 | you know, this is a problem and like, yes,

00:46:14.900 | we do have to do some work to solve it,

00:46:16.460 | but we're doing it.

00:46:17.300 | And so far it's being solved.

00:46:20.260 | - Okay, let's talk about the other really,

00:46:22.420 | really fascinating part of the future of Ethereum.

00:46:26.740 | Let's not call it Ethereum 2.0,

00:46:28.940 | but the future of Ethereum

00:46:30.500 | that also may require a hard fork.

00:46:32.620 | I don't know, you can correct me on this.

00:46:34.980 | Is, well, broadly, ideas for scaling?

00:46:39.700 | - Yes.

00:46:40.540 | - And more specifically sort of layer two

00:46:44.020 | or layer one and two intersection ideas

00:46:48.500 | of how to achieve scaling.

00:46:50.060 | And at the core of that is the idea of sharding.

00:46:52.700 | So first, what is sharding?

00:46:55.260 | - Okay.

00:46:56.740 | So there's two major paradigms for scaling blockchains,

00:47:00.860 | right, as you said, layer one and layer two.

00:47:03.060 | And layer one basically means make the blockchain itself,

00:47:07.060 | like capable of processing more transactions

00:47:09.900 | by having, you know, some mechanism

00:47:12.500 | by which you can do that,

00:47:13.660 | despite the fact that there's a limit

00:47:15.620 | to the capacity of each participant in the blockchain.

00:47:18.100 | And then layer two says,

00:47:19.140 | well, we're going to keep the blockchain as is,

00:47:21.340 | but we're going to create clever protocols

00:47:23.860 | that sit on top of the blockchain

00:47:25.540 | that still use the blockchain

00:47:26.940 | and then still kind of inherit things

00:47:28.740 | like the security guarantees of a blockchain.

00:47:31.060 | But at the same time,

00:47:32.220 | a lot of things are done off chain.

00:47:33.780 | And so you get more scalability that way.

00:47:36.620 | So in Ethereum, the most popular paradigm

00:47:39.660 | for layer two is rollups

00:47:40.900 | and the most popular paradigm for layer one is sharding.

00:47:43.220 | - So one way to achieve layer one scaling

00:47:46.220 | is to increase the block size.

00:47:48.060 | - Yes.

00:47:48.900 | - Hence the block size wars, quote unquote.

00:47:51.820 | And you actually tweeted something about,

00:47:54.140 | people are saying that Vitalik changed his mind about,

00:47:59.660 | he went from being a small blocker to-

00:48:02.260 | - No, I went from being big to small.

00:48:03.500 | - Is it big to small?

00:48:04.980 | And, but you said I've been a medium blocker all along.

00:48:09.300 | So maybe you can also comment on where,

00:48:11.740 | on the very basic aspect,

00:48:13.540 | before we even get to sharding,

00:48:14.820 | of where you stand on this block size debate.

00:48:17.380 | - Sure.

00:48:18.220 | So the way that I think about the trade-off

00:48:20.100 | is I think about it as a trade-off

00:48:21.580 | between making it easy to write to the blockchain

00:48:24.180 | and making it easy to read the blockchain.

00:48:26.420 | So when I say read, I just mean,

00:48:28.500 | have a node and actually verify it

00:48:30.180 | and make sure that it's correct and all of those things.

00:48:32.380 | And then by write, I mean send transactions.

00:48:34.700 | So I think for decentralization,

00:48:37.220 | it's important for both of these tasks to be accessible.

00:48:40.220 | And I think that they're like about equally important.

00:48:43.020 | If you have a chain that's too expensive to read,

00:48:45.140 | then everyone will just trust a few people

00:48:46.820 | to read for them.

00:48:48.340 | And then those people can change the rules

00:48:49.900 | without anyone else's permission.

00:48:51.660 | But if on the other hand,

00:48:53.340 | it becomes really expensive to write,

00:48:55.180 | then everyone will move on to,

00:48:57.820 | basically, second layer systems

00:48:59.900 | that are incredibly centralized.

00:49:01.660 | And that takes away from decentralization

00:49:04.660 | and self-sovereignty as well.

00:49:06.380 | So this has been my viewpoint

00:49:08.260 | pretty much the whole time.

00:49:09.420 | It's that you need this balance

00:49:11.020 | and going in one direction or the other direction

00:49:12.780 | is very unhealthy.

00:49:14.340 | In the Bitcoin case,

00:49:15.620 | basically what happens was that Bitcoin originally,

00:49:19.740 | at the very beginning, it didn't really have a block size.

00:49:22.100 | It just had an accidental block size of 32,

00:49:25.060 | or a block size limit of 32 megabytes

00:49:27.220 | because that just happens to be the limit

00:49:29.340 | of the peer-to-peer messages.

00:49:31.380 | But then- - Interesting.

00:49:32.220 | I didn't even know that part.

00:49:33.580 | - Yeah, but then Satoshi back in 2010

00:49:36.820 | was worried that even 32 megabyte blocks

00:49:38.780 | would be too hard to process.

00:49:39.900 | So he put the limit down to one megabyte.

00:49:42.580 | And I think the-

00:49:44.820 | - By put, you mean sneaked in there.

00:49:47.220 | - Yeah, just like made an update to the Bitcoin software

00:49:49.900 | that made blocks bigger than one,

00:49:51.380 | I think it's a million bytes invalid.

00:49:54.220 | And I think the impression that most people had at the time

00:49:58.380 | is that this is just a temporary safety measure.

00:50:01.340 | And over time, as we become more confident in the software,

00:50:05.860 | that limit would be raised somewhat.

00:50:08.340 | But then when the actual usage of the blockchain

00:50:15.700 | started going up,

00:50:17.380 | and then it started going up first to 100 kilobytes per block

00:50:21.140 | then to 250 kilobytes per block,

00:50:22.580 | then to 500 kilobytes per block,

00:50:25.020 | there started a kind of coming out of the woodworks,

00:50:27.780 | this opinion that like,

00:50:28.780 | no, that limit should just not be increased.

00:50:31.460 | And then there are all of these attempts at compromising.

00:50:36.220 | First, there was like a proposal for 20 megabyte blocks.

00:50:40.940 | Then there was the 248 proposal,

00:50:43.100 | which is a bit ironic

00:50:44.860 | because the 248 proposal started off being

00:50:47.220 | like a small block negotiating position.

00:50:49.460 | But then when the big block people came back and said like,

00:50:52.100 | hey, aren't we going to do this?

00:50:53.660 | They're like, no, no, no,

00:50:54.540 | we don't want the block size increases anymore.

00:50:56.940 | So, there were these two different positions, right?

00:51:01.540 | The small blockers,

00:51:02.620 | I think they valued one megabyte blocks for two reasons.

00:51:06.060 | One is that they just like really, really believe

00:51:08.340 | in the importance of being able to read the chain.

00:51:10.940 | But two is that a lot of them really believe

00:51:14.340 | in maintaining this norm of never hard forking, right?

00:51:18.540 | So, the difference between a hard fork and a soft fork

00:51:21.140 | is basically that in a soft fork,

00:51:24.260 | blocks that were,

00:51:25.260 | any block that's valid under the new rules

00:51:28.180 | was still valid under the old rules.

00:51:29.980 | So, if you have a client

00:51:31.100 | that verifies according to the old rules,

00:51:32.940 | then you'll still be able to accept the chain

00:51:35.380 | that follows the new rules.

00:51:37.260 | Whereas with a hard fork,

00:51:38.420 | like you have to update your code

00:51:40.700 | in order to stay on the chain.

00:51:42.180 | And look, they have this belief that,

00:51:46.980 | you know, soft forks are kind of

00:51:48.940 | either less coercive than hard forks,

00:51:50.940 | which by the way, I completely disagree with.

00:51:53.340 | I actually think soft forks are more coercive

00:51:55.220 | because like basically they force everyone who disagrees

00:51:57.660 | to sort of go along by default.

00:51:59.220 | But, or they have this opinion that there's like,

00:52:05.420 | it's more difficult to abuse soft forks

00:52:09.660 | to do really mean things like,

00:52:10.980 | or that like completely violate people's expectations

00:52:13.500 | like increasing the supply,

00:52:14.940 | which is like, you know,

00:52:16.180 | I think there is some truth to that.

00:52:18.780 | So, because of, you know, these reasons,

00:52:20.540 | they just say, we're only going to do soft forks

00:52:22.420 | and we want to just not do any hard forks.

00:52:25.460 | And they eventually discovered this idea

00:52:27.860 | called segregated witness

00:52:28.940 | that allows for like a very tiny block size increase

00:52:31.860 | to like the equivalent of about two megabytes

00:52:34.820 | with a soft fork.

00:52:36.140 | It's just a really like weird and devious trick.

00:52:41.140 | Like basically what they do is,

00:52:43.780 | they take the signatures of transactions

00:52:46.180 | and then they put them outside of the block.

00:52:48.260 | And then they add an extra rule that says that like,

00:52:50.820 | every, for a block to be valid,

00:52:52.340 | the block has to come with a separate,

00:52:54.380 | like basically extension block

00:52:55.980 | that contains all of the transaction signatures, right?

00:52:58.820 | So, you know, when you measure it

00:53:00.060 | according to the old rules, like,

00:53:01.300 | you know, hey, it adds up to less than a million,

00:53:02.820 | but actually there's this extension block

00:53:04.460 | that the old protocol doesn't even know about.

00:53:06.940 | So-

00:53:07.780 | - It's a hack that seemed to work to,

00:53:09.860 | in a small way extend the size of the blocks.

00:53:11.900 | - But so, you know, the small block side was like happy

00:53:14.580 | with these very low levels of block size.

00:53:16.140 | And then the big block side wanted to expand to,

00:53:19.140 | you know, at the very least go to four megabytes,

00:53:21.100 | then, you know, maybe go maybe eight, 20.

00:53:23.300 | There's disagreements within there as well.

00:53:26.500 | I definitely was favoring the big side

00:53:29.980 | the whole way through, as you can probably tell.

00:53:33.620 | But-

00:53:34.460 | - Even though, so the argument against the big

00:53:36.940 | is that it makes things more centralized.

00:53:40.900 | - Yes, because fewer people can run a node

00:53:43.100 | that verifies the chain.

00:53:44.260 | And also because any of these things

00:53:46.180 | would require a hard fork and, you know,

00:53:48.020 | hard forks are inherently risky.

00:53:49.340 | - Do you think there's truth to that?

00:53:51.820 | - I'm pro hard fork.

00:53:52.780 | I think hard forks are actually like in a, you know,

00:53:56.300 | political economic sense, they're better than soft forks.

00:53:59.260 | - Well, let's, okay, okay.

00:54:00.740 | I think that's a beautiful principle as stated

00:54:05.020 | that soft forks may be more coercive than hard forks.

00:54:10.660 | This is not just about cryptocurrency.

00:54:13.020 | This is about politics and life.

00:54:16.260 | That's fascinating.

00:54:17.100 | So you're okay with hard forks.

00:54:20.300 | In fact, you think hard forks is the right way

00:54:23.460 | to make changes because then everybody's forced

00:54:26.340 | to make a decision.

00:54:27.540 | - Right.

00:54:28.380 | - Do you accept this change or not,

00:54:29.200 | as opposed to ideas being sneaked in behind the door

00:54:32.460 | and the decision's forced on you?

00:54:34.820 | - Exactly, yeah.

00:54:36.140 | - Okay, so, but, you know, hard forks,

00:54:38.900 | some people say, this is when they talk about

00:54:40.740 | sort of Ethereum, is there's some aspect

00:54:43.380 | to a hard fork where you're trying to upgrade,

00:54:46.860 | what is it, airplane while it's flying.

00:54:48.900 | - I think soft forks are also upgrading

00:54:52.420 | an airplane while it's flying.

00:54:53.540 | - But it's a smaller upgrade.

00:54:54.940 | - That's, there's some truth to that.

00:54:58.660 | Like there's definitely a bit more risk

00:55:02.580 | of like a split as a result of a hard fork

00:55:05.140 | than as a result of a soft fork.

00:55:07.180 | - And the split is highly undesirable, right?

00:55:10.620 | - Well, it depends.

00:55:11.460 | Like if it's a split because of a bug,

00:55:13.180 | then that's horrible.

00:55:14.140 | If it's a split as a result of political differences,

00:55:16.660 | then I think like a split is better than,

00:55:19.420 | you know, one side being forced to basically

00:55:21.860 | just like suck it up and accept the majority position,

00:55:24.700 | even if it really hates it.

00:55:26.060 | - Well, there's also political connections

00:55:28.800 | throughout the history of the United States.

00:55:30.420 | It's like sometimes groups of people

00:55:33.100 | that strongly disagree with each other

00:55:35.700 | should be forced to work it out,

00:55:38.860 | even if they, even when a split seems

00:55:40.860 | like an easy thing in the short term.

00:55:42.700 | - It depends.

00:55:43.540 | And I think like, well, for blockchains in particular,

00:55:46.020 | the costs of people being able to like peacefully do their,

00:55:50.100 | go off and do their own thing are much lower, right?

00:55:52.300 | Like, you know, okay, if you have a country

00:55:54.260 | and you have two groups, then like often enough,

00:55:58.460 | like fighting out the new rules requires,

00:56:00.780 | like, you know, a civil war requires everyone

00:56:02.380 | to move and so forth.

00:56:03.220 | But no, on a blockchain, like, you know,

00:56:05.060 | the costs are lower and so.

00:56:06.760 | - So if you were to look at the way things worked out

00:56:09.940 | with the block size wars, and there was a split,

00:56:13.040 | what is it, Bitcoin Cash?

00:56:15.420 | - And Bitcoin.

00:56:16.260 | - Yeah.

00:56:17.100 | Which, like you looking, putting on your historian hat,

00:56:21.700 | you mentioned offline you like Dan Carlin.

00:56:24.020 | So if Dan Carlin were to do an episode

00:56:26.500 | on the block size wars,

00:56:29.660 | do you think it could have turned out better?

00:56:33.020 | Do you, are you okay with the way it turned out?

00:56:36.140 | - I'm definitely disappointed with what happens

00:56:40.860 | with the block, with the big block side.

00:56:43.100 | I think the source of my disappointment is that like,

00:56:46.900 | one of the things that you notice when just looking at like

00:56:50.260 | this political disagreements generally,

00:56:52.500 | especially when you have environments where, you know,

00:56:55.380 | they're authoritarian or like single party dominated,

00:56:57.860 | and then there's some opposition party,

00:57:00.240 | and the opposition often has like very legitimate grievances

00:57:03.380 | but at the same time, the thing you notice is that often

00:57:05.660 | enough, the opposition just sucks, right?

00:57:07.180 | Like it just doesn't have, you know, political capacity.

00:57:10.220 | It doesn't have like the ability to come up with policy

00:57:13.320 | because it's entire culture is like designed around

00:57:17.740 | resisting much more, and then it's designed around like,

00:57:19.980 | you know, actually debating serious policy trade-offs.

00:57:23.260 | And I worry, or I guess not so much worry

00:57:27.220 | because it's already happened.

00:57:28.300 | I unfortunately think that Bitcoin Cash ended up being

00:57:32.140 | a victim of this, right?

00:57:34.060 | Like first, there was a split with Bitcoin Cash.

00:57:37.140 | And then of course, Craig Wright came in and you know,

00:57:39.740 | Craig Wright was this basically scammer who just keeps on

00:57:44.020 | pretending that he is Satoshi Nakamoto,

00:57:46.300 | the inventor of Bitcoin.

00:57:48.060 | Hey, Craig Wright's legal team, do you hear me?

00:57:49.980 | Yes, I still think your client is a scammer, so sue me.

00:57:53.260 | - This is definitely gonna be deaf first, sir,

00:57:55.140 | 'cause I gotta ask you about Craig.

00:57:57.060 | 'Cause these people have been contacting me

00:57:58.780 | and I'm trying to figure out like

00:58:00.220 | what is up with this human being.

00:58:02.500 | So for people who don't know, there's somebody who is,

00:58:05.440 | (both laughing)

00:58:07.140 | let's start, there's Satoshi Nakamoto,

00:58:09.020 | who is the creator of Bitcoin, who's anonymous.

00:58:11.700 | And actually most really big people

00:58:14.760 | in the cryptocurrency space do not,

00:58:18.380 | like yourself and others, do not dare claim that they are

00:58:22.900 | even for funds Satoshi Nakamoto.

00:58:25.180 | In fact, if Satoshi Nakamoto is still alive and is like,

00:58:28.100 | if say you were Satoshi Nakamoto,

00:58:29.780 | it seems like the thing he would do is probably,

00:58:32.020 | or she, is try to remain anonymous.

00:58:35.740 | On the flip side of that, there's a guy named Craig Wright

00:58:39.300 | who continually keeps claiming that he is in fact

00:58:42.060 | Satoshi Nakamoto and keeps suing a lot of people.

00:58:45.900 | So on him, if we could just linger on him,

00:58:49.420 | what do you make of this character?

00:58:51.180 | What are we supposed to make of this character?

00:58:54.420 | Should he be ignored?

00:58:56.100 | Is there any possible truth to his claims?

00:58:58.680 | What do you make of him?

00:59:01.100 | - The analogy that's at the top of my head

00:59:03.620 | will get a bit political, but that's fine.

00:59:06.000 | You've had Michael Ballas.

00:59:07.620 | So I guess I view Craig Wright as being

00:59:10.540 | kind of like a Donald Trump figure,

00:59:12.500 | in that he's not very intellectual,

00:59:15.180 | but I think he gets a big audience because he says,

00:59:19.980 | he says things that play to the resentments that people have

00:59:24.140 | and he says things that people wants to hear.

00:59:27.860 | Like in the wake of this block size war,

00:59:30.140 | the big blockers did feel very disenchanted.

00:59:32.420 | Like they felt that, you know,

00:59:33.980 | Bitcoin always had this vision that we were supposed

00:59:36.140 | to just keep increasing the block size

00:59:37.700 | and Bitcoin is peer-to-peer cash.

00:59:39.220 | It says so in the white paper.

00:59:40.540 | And then this elitist clique of core devs just like came in

00:59:44.580 | and said, you know, no, no, no,

00:59:45.580 | we're going to impose this totally different vision.

00:59:47.720 | And if you ever want your scalability,

00:59:49.260 | you'll have to wait for us to create

00:59:51.020 | this totally unproven fancy technology

00:59:53.380 | called the lightning network

00:59:54.420 | that works under completely different principles.

00:59:56.900 | And, you know, they were very angry at this.

00:59:58.420 | And I mean, I think,

00:59:59.580 | like I think a lot of that anger is justified,

01:00:01.900 | but at the same time, you know,

01:00:05.240 | when people are in that mental state,

01:00:07.540 | like it's very easy for you to just kind of like latch on.

01:00:10.300 | And if you find someone who expresses anger

01:00:13.740 | at the same things that you're angry at,

01:00:15.740 | and also like, it seems like someone who's strong

01:00:19.740 | and seems like someone who, you know,

01:00:21.620 | might be good to rally around,

01:00:22.900 | it's very easy to just like get behind that.

01:00:24.940 | - But that extra part about it,

01:00:26.380 | where he's Satoshi Nakamura,

01:00:27.500 | I don't understand why that's necessary.

01:00:29.500 | - I think that's, he could have done it without that,

01:00:33.220 | but that, I mean, that just, it's a marketing strategy.

01:00:36.740 | Like it sort of gives him more salience.

01:00:38.460 | Like there's other big block personalities, right?

01:00:40.840 | Well, what's the difference between, with Greg, right?

01:00:43.020 | He's not just a big, a big block personality.

01:00:45.820 | He's potentially Satoshi.

01:00:48.420 | And he did say all the big block things, right?

01:00:52.020 | Like he talked about how,

01:00:53.580 | oh, the concept of a fee market is fundamentally,

01:00:56.100 | like economically wrong, and it should be,

01:00:58.980 | it should be a free market,

01:01:00.220 | and you should be able to have blocks as big as you want.

01:01:02.060 | Like he repeated all the talking points.

01:01:03.620 | And so a lot of people were kind of sucked into that, right?

01:01:07.620 | And so he unfortunately was able to basically dominate

01:01:12.340 | a big part of the Bitcoin cash community for a long time.

01:01:15.320 | And then eventually, of course, you know,

01:01:18.580 | more and more people started to catch on.

01:01:21.020 | He would just say technical things

01:01:22.660 | that are completely wrong, right?

01:01:24.140 | Like one example of this that I remember

01:01:27.780 | is that he mixed up the concept of 256 bits

01:01:32.780 | and two to the power of 256 bits, right?

01:01:36.440 | So, you know, the difference is,

01:01:37.940 | it's like the difference between, you know, 80

01:01:39.780 | and the concept of 80 digit numbers, right?

01:01:42.740 | And because of this, like he made this argument

01:01:46.780 | that said that Bitcoin's elliptic curve

01:01:50.580 | is friendly to cryptographic pairings.

01:01:52.540 | Like you don't have to understand what that is,

01:01:54.500 | but if you want to know,

01:01:55.620 | I have articles on both at Vitalik.ca.

01:01:58.340 | But basically he made this like technical argument

01:02:01.460 | that really hedged on this point.

01:02:03.340 | And then when people pressed him on it,

01:02:04.900 | it was like, yes, what, no, no, like what, look, exactly.

01:02:08.340 | The height is like what, two to the 256 bits.

01:02:11.260 | That's a very tiny amount of information.

01:02:14.640 | No, no, no, no, two to the 256 bits

01:02:17.060 | is more than the amount of information in the universe.

01:02:19.500 | And like, you know, equivocated

01:02:21.460 | and kind of like preyed on people's inability

01:02:24.100 | to understand that mathematical nuance.

01:02:26.660 | And I called him out.

01:02:27.860 | And eventually I even called him out in person

01:02:30.260 | at this conference in Seoul.

01:02:31.820 | Like I just stood up and asked, you know,

01:02:34.620 | hey, you know, conference organizer,

01:02:36.820 | why are you letting this fraud speak at this conference?

01:02:39.500 | And I remember even some big blockers

01:02:42.340 | at the time getting angry at me.

01:02:44.460 | But, you know, eventually they did get rid of him.

01:02:47.740 | And then Craig, well, basically Craig Wright

01:02:50.820 | was forced to split off because the rest of the community

01:02:54.260 | refused to accept some network change that he wanted.

01:02:56.860 | And so then there was the BCH and BSV.

01:02:59.060 | And then in the Bitcoin Cash community,

01:03:00.980 | there was this drama of,

01:03:02.680 | are they going to add a developer fund

01:03:04.900 | where they redirect 12 and a half percent of the revenue

01:03:07.100 | from the miners to the devs?

01:03:08.660 | And according to the libertarian,

01:03:10.300 | not aggression principle is this technically theft.

01:03:12.960 | (laughs)

01:03:14.960 | - Like his understanding of the technical depths

01:03:18.200 | of cryptocurrency was lacking in a way that you,

01:03:21.400 | Satoshi Nakamoto certainly would not.

01:03:23.200 | - Yes, exactly.

01:03:24.080 | But the point is that even after Craig Wright got expunged,

01:03:27.560 | the Bitcoin Cash community

01:03:28.840 | kept having these disagreements, right?

01:03:30.420 | And now after this development funds dispute,

01:03:33.760 | there was a further split between Bitcoin Cash and ABC.

01:03:37.760 | So, you know, the branching tree continues to extend, right?

01:03:41.560 | So.

01:03:42.400 | - So in that way, it's disappointing

01:03:43.840 | to see those kinds of splitting.

01:03:45.280 | There was never a result.

01:03:46.280 | - It is.

01:03:47.120 | I would have definitely wanted to see more of a,

01:03:50.840 | kind of like the principled coin

01:03:54.040 | with a, like tries to be Bitcoin,

01:03:56.640 | but follows consistent big block values.

01:03:59.840 | But I don't know, maybe I should just like,

01:04:02.080 | stop expecting projects that I have no involvement in

01:04:04.800 | to care at all about what my values are.

01:04:07.200 | And, you know, like maybe Ethereum just like is.

01:04:09.600 | (laughs)

01:04:10.440 | - It's just this.

01:04:11.280 | - I think you have a powerful voice

01:04:13.360 | and you can inspire other projects

01:04:14.800 | to live up to their best possible selves.

01:04:19.040 | Okay.

01:04:20.180 | So that's the level, that's the layer one approach.

01:04:24.680 | The other layer one within Ethereum

01:04:28.120 | is the idea of sharding.

01:04:29.400 | - Yes.

01:04:30.240 | - What the heck is sharding?

01:04:31.960 | Okay, what does the future of sharding look like?

01:04:33.640 | - Right, so to summarize that big, long tangent

01:04:36.360 | that we just went through.

01:04:37.200 | - It's a beautiful tangent by the way.

01:04:38.040 | - It's an amazing tangent.

01:04:40.080 | And I think like crypto is just,

01:04:42.600 | one of the most underrated aspects of crypto

01:04:44.720 | is I think how you can like analyze the, you know,

01:04:47.440 | the sociology and the politics and the anthropology.

01:04:49.960 | And like, yeah, I mean, I'm sure Dan Carlin

01:04:51.920 | would have fun exploring the space at some point.

01:04:54.080 | But like the core trade off, right,

01:04:56.160 | is that if you scale blockchains the dumb way,

01:04:58.200 | just by increasing the parameters,

01:04:59.960 | then eventually you just make it harder and harder

01:05:01.840 | to participate as a node.

01:05:03.040 | And you end up with a system where there's like

01:05:05.800 | 20 computers running the whole thing.

01:05:07.880 | And it's just very centralized.

01:05:09.600 | So sharding basically says, well,

01:05:11.760 | instead of just increasing the parameters,

01:05:13.680 | what we're going to do is we're going to change

01:05:15.600 | the blockchain architecture in such a way

01:05:19.080 | that each individual node in the blockchain

01:05:22.720 | only needs to store a small portion of the data

01:05:25.640 | and only needs to process a small portion

01:05:27.280 | of the transactions.

01:05:28.840 | So you can think about it as being like

01:05:30.240 | inspired by BitTorrent, right?

01:05:31.480 | Like on BitTorrent, there's no such thing

01:05:33.320 | as a BitTorrent full node that has every movie, right?

01:05:35.960 | You know, the work is like split up

01:05:37.680 | among a huge number of computers.

01:05:39.080 | And like, that makes sense.

01:05:40.560 | That's the only sane way to scale a system like that.

01:05:43.760 | And if they actually tried making a version of BitTorrent

01:05:47.960 | that required full nodes that store every movie,

01:05:50.320 | then it would have like zero censorship resistance

01:05:53.240 | and it would just like, be dead in an instant.

01:05:56.280 | So the challenge with taking that model

01:05:59.280 | and applying it to blockchains, right,

01:06:01.000 | is that blockchains aren't just about

01:06:03.280 | like spreading data around.

01:06:04.600 | They're about agreeing on exactly what data

01:06:07.840 | was spread around and ensuring that everything

01:06:10.440 | that you agree on actually is correct.

01:06:12.480 | And so you have this paradox where,

01:06:14.400 | let's say you want to have a system that supports

01:06:17.520 | 10,000 transactions a second,

01:06:19.320 | but each computer in the network

01:06:20.800 | can only personally verify 100 transactions a second.

01:06:25.000 | So how can each computer get a guarantee

01:06:28.800 | about the other 9,900 without actually going

01:06:31.760 | and verifying them themselves?

01:06:33.720 | And it turns out that there are some,

01:06:37.360 | like a bundle of different tricks that can do that, right?

01:06:40.320 | So like one of them is just random sampling.

01:06:43.720 | So the idea behind random sampling is,

01:06:45.920 | like let's say for simplicity,

01:06:47.840 | this is a proof of stake chain

01:06:49.520 | and you have 10,000 validators,

01:06:52.320 | validators are like, you know, the stakers.

01:06:54.880 | And like for simplicity,

01:06:56.040 | we'll assume they all have the same number of coins, right?

01:06:57.920 | If someone has more coins,

01:06:58.920 | we'll just kind of split them up

01:06:59.880 | and pretend they're 10 stakers.

01:07:01.640 | Then you do like some random shuffling

01:07:05.720 | and you basically say,

01:07:06.760 | these random hundred validators

01:07:08.320 | are assigned to validate this block.

01:07:10.600 | These random hundred validators

01:07:11.920 | are assigned to validate this block.

01:07:13.080 | These random hundred validators

01:07:14.280 | are assigned to validate this block.

01:07:16.080 | And so each individual computer

01:07:18.560 | only gets assigned to validate like a small piece,

01:07:21.360 | but then the way that the information

01:07:23.520 | about like what's valid gets passed around, right?

01:07:25.560 | Is that when these hundred participants validate a block,

01:07:30.400 | they all sign a message basically saying like,

01:07:33.080 | yes, we agree that this block is valid.

01:07:35.200 | And then like they combine that signature into one

01:07:37.680 | and then they broadcast that signature.

01:07:39.480 | And then everyone else,

01:07:40.760 | instead of verifying the blocks directly,

01:07:42.400 | just verifies that signature, right?

01:07:44.280 | And so if I see the signature,

01:07:46.200 | I'm not directly convinced that that block is valid,

01:07:49.080 | but what I am convinced of is that

01:07:51.280 | out of this committee of,

01:07:53.000 | or this randomly selected group of a hundred validators,

01:07:56.000 | let's say at least 70 of them

01:07:58.000 | agree that this block is valid.

01:07:59.520 | And so if I trust that, you know,

01:08:01.480 | the majority of these participants are all honest,

01:08:04.200 | then because it's all randomly selected, you know,

01:08:06.400 | the attacker can't just like

01:08:07.600 | force themselves into one committee.

01:08:09.280 | And so, you know, the attacker is gonna be

01:08:11.720 | evenly spread out too.

01:08:13.800 | And so if, you know,

01:08:15.800 | the entire set of validators is mostly honest,

01:08:17.760 | every committee is gonna be mostly honest.

01:08:19.400 | And so like bad blocks are not gonna go through, right?

01:08:22.480 | So that's like one simple form of sharding.

01:08:24.760 | There's also other more clever things that you can do.

01:08:26.920 | So for example, there's this concept of ZK-SNARKs, right?

01:08:29.920 | Or call it a zero knowledge proofs.

01:08:31.600 | So this is the idea that you can make

01:08:33.280 | a cryptographic proof that says,

01:08:35.560 | I verified or I ran some complex computation

01:08:40.560 | on this piece of data and I got this answer.

01:08:43.320 | And so if you make these kinds of proofs,

01:08:45.680 | then like if you see a ZK-SNARK

01:08:47.600 | that says some block is valid,

01:08:49.120 | then you're convinced that that block is valid.

01:08:51.680 | And even if, you know, everyone in that committee is evil,

01:08:55.320 | like they have no way of making a valid proof

01:08:58.280 | for a bad block, right?

01:08:59.680 | Like, because the proof itself,

01:09:00.840 | like it is a proof that you did the computation

01:09:03.600 | where that proof is much easier to verify

01:09:05.960 | than just running the computation yourself.

01:09:08.800 | And, you know, there's once again, you know,

01:09:11.800 | super awesome mathematical cryptographic magic

01:09:15.480 | behind making ZK-SNARKs work.

01:09:17.880 | - So it gives you a little bit of a leg up

01:09:20.120 | over the 51% honest assumption.

01:09:23.280 | So it's a little hack that improves

01:09:24.720 | upon the random sampling thing.

01:09:26.400 | - Exactly.

01:09:27.240 | And like, there's other hacks, right?

01:09:28.280 | Like there is another hack called data availability sampling

01:09:31.280 | that allows you to make sure that the data

01:09:32.800 | in the blocks was actually published.

01:09:35.040 | But like, basically, like if you stack a couple

01:09:37.920 | of these tricks on top of each other,

01:09:39.520 | you can create a system where like I,

01:09:41.520 | as an individual participant, can be convinced

01:09:44.160 | that everything that's going on

01:09:45.800 | in this distributed blockchain thing is correct

01:09:48.000 | without actually personally checking more

01:09:49.920 | than like a percent of it.

01:09:51.000 | So that's sharding.

01:09:52.040 | - That's sharding.

01:09:52.880 | But as I understand, maybe correct me on this,

01:09:57.880 | is in the space of Ethereum,

01:10:02.080 | the sharding happens on some fixed number.

01:10:05.380 | Like the split is on some fixed number.

01:10:07.920 | I think it's 64 is the currently sort of proposed number.

01:10:11.440 | So how does that help scaling?

01:10:15.760 | Is it just a fixed constant scaling by 64?

01:10:19.080 | And is that a way to achieve those crazy,

01:10:21.800 | the crazy amount of scaling that seems to be required

01:10:25.200 | to use cryptocurrency for purchasing?

01:10:28.320 | So doing like competing with credit cards

01:10:30.480 | and Visa and so on.

01:10:31.440 | - Right.

01:10:32.280 | So first I think like the 64 can be hard forked up over time.

01:10:35.800 | So we have set it so that like there's theoretically space

01:10:39.920 | in the data structure for 1,024 shards.

01:10:42.200 | It's just that 64 of them are turned on.

01:10:44.160 | There are challenges with having more shards

01:10:47.280 | because like you have to have logic

01:10:48.780 | that just like checks and manages all of those shards.

01:10:51.280 | And if there's too many of them,

01:10:52.560 | then that becomes too expensive.

01:10:54.720 | But even still you can improve quite a bit.

01:10:57.600 | And then the other thing that we're doing is

01:11:00.440 | if we're getting maximum scalability

01:11:02.980 | by combining rollups and sharding.

01:11:05.760 | So this might be a good time to talk about rollups.

01:11:07.800 | - What are rollups?

01:11:09.040 | - Okay.

01:11:09.880 | - Now we're moving into layer two ideas.

01:11:11.640 | - Yes.

01:11:12.480 | So the idea behind a rollup is basically that,

01:11:18.480 | so instead of just publishing transactions

01:11:23.480 | directly on chain and having everyone do all

01:11:27.840 | of the checking of those transactions,

01:11:29.760 | what you do is you create a system

01:11:32.000 | where users send their transactions

01:11:35.680 | to some central party called an aggregator.

01:11:38.800 | And like, well, theoretically you can have a system

01:11:41.000 | where like the aggregator switches around

01:11:42.520 | or anyone can be an aggregator.

01:11:44.040 | So it's still like permissionless to send things.

01:11:47.600 | Then what the aggregator does is they strip out

01:11:51.160 | all of the transaction data that like is not relevant

01:11:55.080 | to helping people update the state.

01:11:57.800 | So when I say the state, this is like,

01:11:59.280 | this is a very important kind of technical term

01:12:01.040 | for blockchains.

01:12:01.880 | I mean like account balances, code,

01:12:04.640 | like things that are like memory,

01:12:08.680 | internal memory of smart contracts.

01:12:10.400 | Like basically everything the blockchain

01:12:11.920 | actually has to keep track of and remember.

01:12:14.280 | Right, so you just put in,

01:12:17.720 | you take all these transactions, strip out all the data

01:12:21.600 | that's not relevant to telling people

01:12:23.720 | how to update the state.

01:12:24.840 | And then you take the data that's needed

01:12:26.680 | to update the state, and then you like really compress it.

01:12:28.720 | Right, so like for example, if we say, you know,

01:12:31.840 | I Vitalik have an account that's 0xAB58 blah, blah, blah,

01:12:36.440 | and it's 20 bytes.

01:12:37.680 | Well, instead we can say, well, I have an account

01:12:39.960 | that is number 1874224 in the tree, right?

01:12:44.800 | And that goes down from 20 bytes to just like an index

01:12:47.520 | and a position, which is three bytes, right?

01:12:49.120 | So you use all sorts of these fancy compression tricks

01:12:51.480 | and you basically just, instead of publishing

01:12:54.360 | all these transactions,

01:12:55.600 | you publish this like tiny compressed blob, right?

01:12:58.440 | So the amount of data that goes on chain

01:13:00.280 | goes down by maybe about a factor of 10, right?

01:13:02.680 | And then the second thing is that

01:13:04.160 | you don't do the computation on chain.

01:13:06.200 | Instead you do the computation off chain,

01:13:08.480 | and there's one of two ways to do this, right?

01:13:11.160 | One is called a ZK rollup, which is you just provide

01:13:14.160 | a ZK SNARK that basically says,

01:13:15.800 | hey, look, I did this computation

01:13:17.800 | and I have this proof that here's the,

01:13:20.400 | here's the, you know, some hash of the result

01:13:22.200 | and it's correct.

01:13:23.360 | And then you stick it on chain and everyone verifies

01:13:25.920 | this one proof instead of verifying all these transactions.

01:13:29.080 | And then the other approach is called an optimistic rollup,

01:13:31.560 | which is basically made of the scheme where like first

01:13:35.200 | someone says like, hey, this is what I think

01:13:37.760 | the result of applying these transactions is.

01:13:40.720 | And then someone else can say, I disagree,

01:13:42.400 | the result is different.

01:13:43.600 | And only if two people disagree,

01:13:45.640 | do you actually do it on,

01:13:47.120 | do you actually just like publish all of the data

01:13:49.960 | and run that whole block on chain.

01:13:52.360 | So if there's disagreements,

01:13:53.560 | then you just like run everything on chain

01:13:55.880 | and whoever was wrong, like loses a lot of money, right?

01:13:58.640 | So like disagreements are very rare

01:14:00.280 | and they're very expensive.

01:14:01.600 | And in a ZK rollup, you don't even rely

01:14:03.520 | on this like challenging game at all,

01:14:05.080 | you just rely on a proof.

01:14:06.760 | So the core principle is basically that

01:14:09.720 | instead of lots of transactions and all the trends

01:14:12.760 | that everyone verifies every transaction,

01:14:14.600 | it is you take the transactions,

01:14:16.640 | you strip them down and compress them as much as possible,

01:14:20.280 | then stick that on the blockchain.

01:14:22.360 | You do need to stick something on the blockchain

01:14:24.440 | just so that everyone else can like keep up to date

01:14:27.440 | with the state so they know what all the contracts are,

01:14:30.000 | what all the balances are and all of this,

01:14:31.320 | but it's a very small amount of data.

01:14:33.400 | And then you use some, one of these other off-chain games,

01:14:36.240 | you know, could be this optimistic game,

01:14:38.480 | could be a ZK snark to just prove that

01:14:41.080 | somebody out there did the computation

01:14:43.000 | and the result is correct, right?

01:14:44.520 | So you're pushing like 90% of the work off-chain

01:14:47.560 | and then, well, 90% of the data

01:14:50.080 | and 99% of the computation off-chain,

01:14:52.720 | and then you still have 10% of the data

01:14:54.280 | and 1% of the computation on-chain.

01:14:56.200 | And so, you know, your scalability goes up

01:14:57.960 | by a factor of about a hundred.

01:14:59.880 | So these systems are already alive for some applications,

01:15:05.120 | right, so there's something called loopering,

01:15:07.240 | which is just a ZK rollup for payments, right?

01:15:10.080 | So you can have, you know, assets inside of the loopering

01:15:14.440 | system and you can go around and transfer them,

01:15:17.280 | but what you, and you get like much lower transaction fees,

01:15:22.280 | right, like instead of $5,

01:15:25.600 | you'd have to pay like less than 5 cents.

01:15:28.280 | But the only problem is that this only supports

01:15:31.480 | a couple of applications right now,

01:15:32.920 | like making one that supports anything

01:15:35.480 | that you can do on Ethereum just takes a bit more work,

01:15:37.680 | but that's being done as well, right?

01:15:39.960 | So like within a few months, I'm expecting, you know,

01:15:42.360 | fully Ethereum capable rollups to be available as well.

01:15:47.360 | So then it's a rollups, just summarizing, you know,

01:15:51.720 | do most of the work off-chain,

01:15:53.040 | put only a little bit on-chain,

01:15:54.440 | factor of a hundred scaling, sharding,

01:15:56.400 | another factor of a hundred scaling,

01:15:57.880 | a hundred times a hundred, factor of 10,000,

01:16:00.120 | you know, hundreds of thousands of transactions a second,

01:16:02.280 | and like, you know, there's your scalability.

01:16:04.120 | - Okay, so you achieve scalability,

01:16:05.600 | you can do a large number of transactions very quickly,

01:16:08.040 | and the cost of doing those transactions are much lower.

01:16:11.400 | You wrote that in the long-term,

01:16:14.960 | ZK rollups are going to win in terms of layer two technology.

01:16:18.600 | Specifically, you wrote, "In general, my own view

01:16:21.760 | "is that in the short-term, optimistic rollups,"

01:16:24.720 | as you were saying, "are likely to win

01:16:26.560 | "out of general purpose EVM computation,

01:16:28.720 | "and ZK rollups are likely to win out for simple payments,

01:16:33.720 | "exchange and other application-specific use cases,"

01:16:37.680 | just as you were saying,

01:16:39.120 | "but in the medium to long-term,

01:16:40.760 | "ZK rollups will win out in all use cases

01:16:44.880 | "as ZK SNARK technology improves."

01:16:48.960 | Why do you think ZK rollups are going to win

01:16:53.040 | the big picture battle over layer two technologies?

01:16:56.800 | - So I think ZK rollups, once you accept

01:17:00.280 | that the technology works, are just conceptually simpler

01:17:04.000 | and they have nicer properties.

01:17:05.480 | The reason is that they do not have this concept

01:17:08.000 | of a challenge game, right?

01:17:09.160 | As I mentioned, in an optimistic rollup,

01:17:11.280 | the way that you ensure that the results are correct

01:17:14.440 | is that you let one person submit,

01:17:16.040 | and they just submit with no proof.

01:17:17.480 | They just say, "Here's what I think the result is,"

01:17:19.760 | and then if someone else disagrees,

01:17:21.640 | they make their own submission,

01:17:22.960 | and then if you have two disagreeing submissions,

01:17:24.680 | then you actually publish it on-chain

01:17:26.000 | and you see who's right.

01:17:27.440 | But for this to work, you need to actually wait

01:17:30.680 | for someone to disagree, right?

01:17:32.160 | So for example, if I have an asset

01:17:34.000 | inside of an optimistic rollup,

01:17:35.560 | and I want to withdraw it,

01:17:36.920 | then I actually have to wait a week to withdraw it

01:17:38.880 | because if the block that contains my withdrawal

01:17:43.280 | turned out to be invalid,

01:17:44.520 | then there needs to be space

01:17:45.520 | for someone to disagree with it.

01:17:47.400 | Whereas with a ZK rollup,

01:17:48.760 | you don't need time for disagreeing

01:17:50.080 | because you just have a proof, right?

01:17:51.240 | As soon as a block is submitted,

01:17:52.840 | there's a proof and you know it's correct.

01:17:55.840 | - So if disagreements, especially in the long-term,

01:17:57.960 | are sparse, then you don't want to do the optimistic,

01:18:02.960 | the game theoretic thing.

01:18:04.360 | You want to do the ZK Stark.

01:18:05.920 | - Right, the ZK stuff is just,

01:18:08.080 | like in a ZK rollup, you can withdraw immediately.

01:18:11.600 | You don't have to worry about the economics

01:18:14.440 | of proving as much.

01:18:15.920 | There's just fewer issues.

01:18:18.320 | The reason why ZK rollups are not winning everywhere today

01:18:21.680 | is because ZK Starks is still a crazy new technology, right?

01:18:25.000 | Like this is something that 10 years ago,

01:18:27.840 | it existed only in theory and there was none in practice.

01:18:31.240 | Then eight years ago,

01:18:32.920 | people were just getting excited about it

01:18:34.520 | in Bitcoin conferences for the first time.

01:18:36.640 | Starting four years ago or three and a half years ago, even,

01:18:42.360 | that was the first time you were able to make

01:18:43.960 | any ZK Stark-based anything on Ethereum.

01:18:46.880 | And then people started making them

01:18:48.520 | and ZK technology has only really become efficient enough

01:18:52.080 | to do a lot of things

01:18:53.000 | within the past maybe one and a half years.

01:18:55.800 | So it's new technology, it's crazy technology,

01:19:00.280 | it's admittedly scary technology.

01:19:02.840 | If you want to learn more,

01:19:03.840 | I also have an article about this on Vitalik.ca.

01:19:06.320 | - It's actually really, really good.

01:19:08.120 | Most of your writing, it's technical, but it's accessible.

01:19:14.000 | I highly, highly recommend to check out Vitalik's articles

01:19:17.360 | and blogs, whatever you call them, on the website.

01:19:20.360 | It's a brilliant summary of the work.

01:19:22.600 | Actually, Ethereum documentation period is really good.

01:19:25.640 | I think that's somewhat crowdsourced.

01:19:28.000 | That documentation is really, really accessible

01:19:30.400 | and brilliant.

01:19:31.240 | But let me ask about sort of other approaches to layer two,

01:19:37.360 | like sidechain.

01:19:39.400 | So the one popular one is Polygon.

01:19:42.400 | What are your thoughts about Polygon,

01:19:43.920 | which is a layer two network?

01:19:48.000 | Is it positive, is it negative for Ethereum, is it both?

01:19:51.840 | Does it have a future, which is its own chain,

01:19:55.720 | but it's using Ethereum,

01:19:58.160 | it's like based on Ethereum, essentially.

01:20:00.920 | Or maybe you can describe what it is.

01:20:02.840 | - So I think there's a really big and important difference

01:20:06.240 | in security models between rollups and sidechains,

01:20:09.000 | which is basically that rollups inherit

01:20:11.600 | from the security of Ethereum, right?

01:20:13.160 | So like if I have coins inside of Loopering or Optimism

01:20:17.120 | or Arbitrum or ZK-Sync,

01:20:19.920 | then even if everyone else in the world

01:20:22.920 | who is participating in these ecosystems

01:20:25.000 | hates me and wants to steal my money,

01:20:27.560 | I can still personally make sure that,

01:20:30.760 | no matter what happens, I get my money out.

01:20:33.600 | It might be a bit expensive for me to get my money out

01:20:35.480 | and I have to do transactions on the main chain,

01:20:37.840 | but I'll be able to do it.

01:20:39.560 | Whereas in Polygon, which is a sidechain,

01:20:42.360 | and so instead of being secured by Ethereum,

01:20:45.080 | it's also in part secured by its own proof of stake consensus

01:20:49.160 | with its own token.

01:20:50.320 | So if 70% of the whole,

01:20:53.560 | or even 51% of the holders of Polygon tokens

01:20:56.600 | wanted to take my money in Polygon, they can.

01:20:59.440 | So that's the, and like, to be fair,

01:21:03.480 | like there aren't even,

01:21:04.960 | the supply I don't think is even

01:21:07.320 | that widely distributed, right?

01:21:08.640 | So like potentially you could,

01:21:11.840 | this idea of 51% of the token holders

01:21:14.680 | coming together and stealing everything,

01:21:16.120 | like it's not impossible, right?

01:21:19.400 | - Where does the scaling of Polygon come from?

01:21:21.640 | Like why is it able to process much more transactions

01:21:26.280 | than the Ethereum main chain?

01:21:28.000 | What's the idea there?

01:21:29.560 | - I think in part, like I imagine,

01:21:32.480 | I'm not sure exactly what its capacity level is,

01:21:34.560 | but like I imagine it has a higher capacity

01:21:36.720 | because it's a bit more willing

01:21:38.680 | to take centralization trade-offs.

01:21:40.640 | And then another thing is that like,

01:21:43.040 | if the Ethereum ecosystem,

01:21:44.960 | like even if it did not do that, right?

01:21:46.560 | If you think about an Ethereum ecosystem

01:21:48.120 | hypothetically scaling with side chains,

01:21:49.960 | then you would have a hundred copies of Polygon

01:21:52.520 | and they would each have their own tokens,

01:21:54.320 | they would each have their own chains.

01:21:55.560 | And so even if each one of those chains

01:21:57.640 | was only as scalable as Ethereum,

01:21:59.480 | you could still, like the total sum of them

01:22:02.960 | would still be a hundred times more than Ethereum.

01:22:05.160 | - Okay.

01:22:06.000 | - The thing that I want to say in Polygon's favor,

01:22:09.680 | just to be very fair to them,

01:22:11.480 | like I really, I definitely really respect

01:22:16.000 | the work that they're doing.

01:22:16.880 | So, start with a bit with that word of,

01:22:20.800 | not criticism, caution, right?

01:22:23.560 | Like it's that they made this kind of deliberate trade-off

01:22:28.560 | for very pragmatic reasons,

01:22:30.440 | which is that the Ethereum ecosystem needs to scale now.

01:22:33.120 | And there are applications that want to do something now.

01:22:35.880 | And if there aren't Ethereum friendly options for them,

01:22:39.320 | then like they're not going to just wait peacefully

01:22:41.400 | and do nothing for 12 months.

01:22:42.680 | And they're going to go to either Binance Smart Chain

01:22:46.840 | or one of some other system,

01:22:50.240 | potentially something that just has totally no alignment

01:22:52.960 | with Ethereum values whatsoever.

01:22:55.240 | But whereas with Polygon,

01:22:58.520 | the best thing that you can say in Polygon's favor

01:23:00.840 | and against optimism is that,

01:23:02.760 | optimism is not live and Polygon is live, right?

01:23:05.480 | Like it just takes more work to create a system

01:23:08.480 | that has these extra rollups security features.

01:23:12.360 | And so Polygon just said,

01:23:13.640 | we're going to be the system

01:23:14.960 | that makes their pragmatic trade-off.

01:23:16.360 | We're going to go functionality first,

01:23:19.560 | and then we can talk about adding back the security later.

01:23:22.960 | So I've talked to them and like in principle,

01:23:25.240 | I think they're very open to the idea

01:23:28.880 | of like adding more security

01:23:30.760 | and becoming a rollup or at least adding a Polygon chain

01:23:37.600 | that's a rollup at some points in the future,

01:23:39.880 | which is definitely something I think they,

01:23:41.520 | yeah, absolutely should follow through on.

01:23:44.080 | But like the fact that like they exist now,

01:23:47.760 | and so applications can kind of bootstrap now on a chain

01:23:51.800 | that even though it's security isn't perfect,

01:23:53.720 | at least it exists and people can go use it.

01:23:55.480 | And then over time,

01:23:57.960 | the chain matures as the applications mature.

01:24:00.000 | Like, and it's, I think a very reasonable strategy

01:24:03.360 | and I'm definitely really happy

01:24:04.880 | that they're part of the ecosystem.

01:24:07.640 | - Yeah, it's kind of interesting.

01:24:09.720 | The history of cryptocurrency has this tension

01:24:13.960 | of really good ideas that are hard to implement,

01:24:17.120 | so they take longer to implement,

01:24:19.440 | and ideas that are not as good,

01:24:22.160 | but are faster to implement.

01:24:23.520 | This is like the story of like,

01:24:25.240 | you have like JavaScript that basically took over the world

01:24:28.360 | because it was quick to implement within 10 days,

01:24:31.560 | and then like later kept fixing itself.

01:24:35.120 | I don't know what to make of that.

01:24:36.880 | Sort of from the engineering perspective,

01:24:40.240 | I'm more and more becoming comfortable

01:24:42.400 | in accepting the fact that our whole world

01:24:44.400 | will run a technology that's not as good

01:24:47.120 | as it could have been,

01:24:48.760 | just because the crappy solution is faster to implement

01:24:52.040 | and it sticks.

01:24:53.200 | What do you make of that tension?

01:24:55.200 | - I think the compromise that we've been taking

01:24:57.840 | within Ethereum is like,

01:24:59.720 | when we have to take the crappy solution,

01:25:01.840 | we look for crappy solutions that are forward compatible

01:25:04.920 | with becoming good over time.

01:25:06.480 | When you build the quick and dirty thing,

01:25:09.840 | you would still already have ideas in your head

01:25:13.080 | about what the more complete thing

01:25:15.600 | with all the security features added on would look like.

01:25:18.160 | - Even if it requires a hard fork?

01:25:20.520 | - Yes.

01:25:21.360 | For example, with sharding,

01:25:25.040 | I think it's likely that the first version of sharding

01:25:28.200 | that comes out is not gonna have ZK-SNARK

01:25:30.680 | send data availability sampling, for example.

01:25:32.760 | But we know what these technologies are.

01:25:34.920 | We feel like we have wrapped our heads around them.

01:25:37.800 | And so we know how to build a system

01:25:40.760 | where we can put all the pieces in place

01:25:42.640 | so that it becomes very easy

01:25:43.880 | to bolt those components on in the future.

01:25:46.640 | So if you do things that way,

01:25:49.000 | then at the beginning,

01:25:50.200 | you can have your system that has the functionality,

01:25:53.000 | but say has less security or less sustainability

01:25:56.600 | or less of something else.

01:25:58.240 | But then over time,

01:26:00.960 | it's designed in such a way

01:26:02.280 | that it has this easy on-ramp to adding those things.

01:26:05.480 | And if you don't think explicitly

01:26:07.040 | about being future compatible,

01:26:08.600 | then you do often end up with a quick and dirty solution

01:26:12.560 | that backs you into a corner.

01:26:14.040 | And then there are definitely cases

01:26:15.920 | where I think the Ethereum ecosystem has suffered from that.

01:26:18.280 | And we have had to expend pretty significant effort on,

01:26:23.280 | for example, removing features that we didn't realize

01:26:26.800 | that we actually can't sustain.

01:26:29.680 | Like one big example is just increasing the gas costs.

01:26:32.840 | So like making some operations more expensive

01:26:36.480 | because they should be expensive

01:26:37.680 | 'cause they actually take a lot of time to process.

01:26:40.400 | So that's making some things more expensive,

01:26:44.040 | kind of like taking some functionality away.

01:26:46.680 | So if you can be cognizant

01:26:49.760 | of where you're likely going into the future,

01:26:52.080 | and if you don't know,

01:26:52.920 | like even be cognizant of both the most likely paths

01:26:55.320 | that you'll take in the future

01:26:56.720 | and thinking about your roadmap

01:26:59.200 | and coming up with a roadmap where you know that

01:27:01.800 | like if you wants to do either of those things,

01:27:04.360 | then you have a clean path toward it.

01:27:06.520 | That's probably the best kind of practical way

01:27:08.920 | to get the best of both worlds that we have.

01:27:11.120 | - Okay, let's talk about this wonderful process of merging.

01:27:16.440 | Okay, so there's the main net,

01:27:22.200 | which is the Ethereum 1.0 chain or the,

01:27:26.400 | what should we say?

01:27:27.360 | The chain that uses proof of work.

01:27:29.080 | That's the consensus mechanism.

01:27:30.920 | And then there is, what is it called?

01:27:33.480 | The beacon chain that uses the proof of stake mechanism.

01:27:38.480 | And I believe the beacon has been deployed successfully,

01:27:45.240 | is working.

01:27:46.640 | So that was in December 2020.

01:27:49.160 | There's a bunch of questions around that

01:27:50.400 | that's fascinating as well.

01:27:51.520 | But I think the most fascinating question

01:27:54.320 | is about merging those two.

01:27:58.560 | When do the two chains, one that's proof of work,

01:28:03.360 | one that's proof of stake, merge?

01:28:05.520 | And what are the most difficult parts of this process?

01:28:10.240 | - Right, so as you've said, right,

01:28:12.000 | the way that we have set up this proof of stake transition

01:28:15.640 | is that at first, the proof of stake chain

01:28:18.240 | just launches on its own, right?

01:28:19.560 | And this was the thing that happened in December.

01:28:22.160 | And the proof of stake chain has been running

01:28:25.040 | for close to six months now.

01:28:28.600 | I mean, by the time people watch this,

01:28:30.360 | it might actually be six months.

01:28:31.960 | But it isn't actually coming to consensus on anything

01:28:35.960 | except for itself, right?

01:28:37.480 | So the idea behind that is to just give

01:28:40.400 | the proof of stake chain time to mature,

01:28:43.320 | time for people to build the ecosystem around it,

01:28:45.440 | time to make sure that there aren't any bugs,

01:28:48.160 | and just like prove to the community

01:28:49.640 | that no proof of stake actually is real

01:28:52.520 | and a full transition is realistic

01:28:55.520 | because the thing that you're transitioning to

01:28:57.480 | already exists and already works.

01:28:59.400 | And then at some point in the future,

01:29:01.120 | you have this event called the merge

01:29:02.960 | where you basically take the activity

01:29:05.880 | that's being done inside of the proof of work chain

01:29:07.960 | and you actually move it over

01:29:09.160 | into the proof of stake chain

01:29:10.280 | so you get rid of the proof of work side completely.

01:29:13.400 | So the way that the merge will work is,

01:29:19.520 | it's definitely gone through a few different iterations.

01:29:21.960 | Like the earlier versions of this

01:29:24.840 | actually required more work for users

01:29:26.760 | and more work for clients.

01:29:27.800 | It was much more like, oh, there's this new chain,

01:29:30.240 | there's this old chain,

01:29:31.200 | and then everyone has to like migrate

01:29:33.560 | from the old chain to the new chain.

01:29:34.880 | And then at some point, we'll forget about the old chain.

01:29:37.360 | The new version is designed to be

01:29:39.400 | much more seamless for users, right?

01:29:43.480 | So basically what actually happens is that

01:29:45.960 | the old chain basically becomes embedded

01:29:49.280 | inside the new chain, right?

01:29:50.920 | So starting from the merge transition block,

01:29:54.600 | every proof of stake chain block

01:29:56.800 | is going to contain a block of the,

01:29:59.640 | what we consider now to be,

01:30:01.440 | what we consider to be the Ethereum chain today,

01:30:03.640 | but we'll call it the execution chain.

01:30:05.680 | And then at the same time, to create one of these blocks,

01:30:08.480 | you're not going to need proof of work anymore, right?

01:30:10.840 | So basically at the same time,

01:30:12.320 | you would both get rid of the proof of work requirements

01:30:14.960 | for one of these blocks to be valid,

01:30:16.520 | but instead you require these blocks to be embedded

01:30:19.680 | inside of the proof of stake blocks, right?

01:30:21.520 | So you basically have like a chain inside a chain.

01:30:23.960 | And this is, from an architecture perspective,

01:30:28.160 | you might think it's a little bit suboptimal,

01:30:30.040 | but it actually has some nice properties

01:30:32.200 | and makes it easier to kind of think about the consensus

01:30:35.080 | and think about the, what we call the execution layer,

01:30:38.000 | like transactions and contracts kind of separately

01:30:40.800 | and upgrade them separately.

01:30:43.040 | And it also just means that the upgrade process

01:30:46.480 | is extremely seamless, right?

01:30:47.720 | Because from the point of view of a client

01:30:49.760 | that's following the chain,

01:30:50.880 | you basically have to update nothing, right?

01:30:53.360 | You're still following the same chain

01:30:55.640 | and follows the same rules,

01:30:56.920 | except instead of checking proof of work,

01:30:58.760 | you'll switch to checking that these blocks

01:31:01.000 | are embedded inside of blocks of the proof of stake chain.

01:31:03.280 | - So there'll be this merge block

01:31:06.000 | that will mark this transition.

01:31:08.040 | And over time, I guess,

01:31:10.440 | the new chain will contain the full record

01:31:13.480 | of all the transactions that's ever happened

01:31:15.320 | on the previous chain, on the old chain.

01:31:17.600 | So like, maybe I'm asking a dumb question here,

01:31:20.840 | but in this process,

01:31:23.480 | is the new chain going to have all the information

01:31:26.520 | of the past transactions?

01:31:29.040 | - The new chain is not going to hold information

01:31:33.320 | from what happened in the Ethereum chain before the merge.

01:31:36.720 | Right, so like Ethereum clients

01:31:38.840 | of the, that people are going to use

01:31:43.320 | like around the time of the merge

01:31:44.600 | and soon after the merge,

01:31:45.880 | they're probably just going to sync

01:31:48.080 | and check the proof of work chain up to the merge,

01:31:50.560 | and then they're going to check the proof of stake chain.

01:31:52.400 | But at some point in the future,

01:31:53.520 | I think people will just stop bothering

01:31:55.080 | checking the proof of work before the merge.

01:31:57.200 | - Got it, so that old history information is not important

01:32:00.320 | for the future, like if you're operating actively

01:32:03.880 | on the new chain, that history is not important to you?

01:32:08.840 | - It's not, let's see,

01:32:10.800 | so it's not strictly important for just like

01:32:14.480 | any like smart contract or just like applications

01:32:18.800 | that run on the blockchain.

01:32:19.920 | It can be important to users

01:32:21.640 | and it can be important for some applications,

01:32:24.160 | but we're basically saying that like maintaining

01:32:27.080 | and serving that is not going to be simultaneously

01:32:30.080 | the responsibility of every Ethereum node.

01:32:32.240 | If you want that information,

01:32:33.640 | there can be separate protocols for backing it up.

01:32:36.320 | And like these other protocols actually exist, right?

01:32:38.440 | Like there's something called the graph,

01:32:40.180 | which is doing some history retrieval.

01:32:42.140 | Potentially you can just take that entire chain

01:32:43.960 | and stick it on BitTorrent.

01:32:45.160 | Like there's lots of ways to like archive it

01:32:48.600 | and create kind of customized search protocols for it.

01:32:51.180 | - So what's your sense why,

01:32:53.360 | so there's a Python 2 and Python 3,

01:32:55.400 | and it took forever for people to switch.

01:32:58.840 | What's your sense why this merge

01:33:01.560 | has been taking longer than perhaps was expected?

01:33:05.360 | - I think the biggest reason is just,

01:33:07.760 | no, we've been underestimating the technical complexity.

01:33:11.000 | There's a lot of technical complexity

01:33:12.480 | in making a successful proof of stake chain.

01:33:14.520 | There's a lot of technical complexity

01:33:17.160 | in actually figuring out the transition process.

01:33:20.760 | There's-

01:33:22.320 | - So that's bigger than social complexity.

01:33:24.800 | So it's the technical complexity you would say

01:33:27.240 | is the bigger reason for the,

01:33:29.000 | any delays than the social complexity.

01:33:31.160 | - I actually think so.

01:33:32.400 | I mean, I think we've been very fortunate

01:33:35.080 | to not have too much social complexity around the merge.

01:33:37.720 | - So not much drama.

01:33:38.960 | - No.

01:33:40.320 | I think the biggest part of the reason

01:33:42.560 | is just because we have been talking

01:33:44.760 | about proof of stake and sharding

01:33:46.040 | as being part of the roadmap

01:33:47.200 | since almost the very beginning of the project, right?

01:33:49.960 | Like the very first proof of stake blog post

01:33:52.400 | is from January, 2014,

01:33:54.520 | which was two months after the project started

01:33:57.720 | and like maybe even a day after the announcement.

01:34:01.640 | So, you know, proof of stake was,

01:34:05.000 | not something that we kind of put on anybody by surprise.

01:34:09.040 | And then when the DAO fork happened

01:34:11.120 | and the people on the ETC side split off,

01:34:13.800 | I think it also just happens that a lot of the people

01:34:16.640 | that were not willing to stomach the DAO fork

01:34:18.800 | and then join the ETC side,

01:34:20.360 | they were the more Bitcoiny types

01:34:23.080 | and the more Bitcoiny types do also tends

01:34:25.040 | to like proof of work more.

01:34:26.800 | And so like that also sort of ended up,

01:34:29.080 | sort of like purifying the communities on both sides,

01:34:32.560 | I guess.

01:34:33.400 | So Ethereum Classic is not switching to proof of stake

01:34:35.760 | and they're happy with their setup.

01:34:38.600 | And by the time that it came to the beacon chain launching

01:34:43.600 | and now I think the community is very strongly in favor

01:34:48.360 | of the proof of stake switch.

01:34:49.800 | - But let me ask the question that no engineer wants to hear,

01:34:55.760 | which is the question of timeline.

01:35:00.040 | When do you think the merge will happen?

01:35:03.520 | Do you have a sense it might happen this year?

01:35:06.320 | Do you have a sense it might be pushed

01:35:07.800 | towards next year, 2022 or even beyond?

01:35:12.800 | - I think early 2022 is like the most realistic.

01:35:18.880 | There's definitely still like an optimistic case

01:35:22.880 | of it happening this year,

01:35:23.840 | but the realistic thing to count on

01:35:27.040 | is definitely the early part of,

01:35:28.840 | very early part of next year.

01:35:31.400 | - Is there specific things that stand out to you

01:35:33.400 | that are like, they'll make you feel good about progress

01:35:38.240 | if you see it happening?

01:35:39.600 | - So the thing that we had last month

01:35:43.760 | is we had this online hackathon called Rayanism

01:35:46.800 | where basically a bunch of the different client developers

01:35:50.600 | that are going to be part of the transition,

01:35:52.520 | like hacks together some test nets

01:35:54.880 | of the post merge Ethereum chain.

01:35:57.520 | So these were only test nets

01:35:59.440 | of what would happen after the merge.

01:36:01.080 | They were not test nets of the transition itself.

01:36:03.360 | So the thing that people are working on now

01:36:06.280 | actually is the transition.

01:36:08.240 | So having a full specification

01:36:12.320 | of both the transition and post transition,

01:36:14.520 | I mean, we have specifications now,

01:36:16.120 | but in a realistic way,

01:36:18.720 | they'll probably needs to have a couple of changes

01:36:20.680 | and have things that continue to be ironed out

01:36:23.240 | and then have a test net that does both the transition

01:36:27.000 | and the post transition.

01:36:27.960 | And then like, once you have a test network,

01:36:30.080 | then you just have to do a lot of testing and audit it

01:36:33.000 | and then do some runs on not just a specialized test network

01:36:38.000 | but on say an existing test network,

01:36:39.920 | like a ROPS and a Rinkaby

01:36:41.160 | that Ethereum people already significantly use.

01:36:45.520 | And if it works,

01:36:46.360 | then you can deploy the transition on mainnet.

01:36:49.520 | - Just as a quick comment,

01:36:50.920 | 'cause this is fascinating,

01:36:52.200 | in August of last year,

01:36:54.320 | there was this Madala.

01:36:56.720 | - I believe it's pronounced Madasha.

01:36:59.440 | It's a South American subway station, I forget where.

01:37:03.040 | - But spelled with two Ls.

01:37:04.520 | - Yeah, yeah, 'cause that's how Spanish works, right?

01:37:07.160 | Like the two Ls have--

01:37:08.400 | - Madasha.

01:37:10.320 | - Yeah. - Okay, cool.

01:37:11.280 | Anyway, but I read about it in middle of August, August 14th,

01:37:15.520 | there was an incident on that test net.

01:37:19.680 | How does this process work?

01:37:21.800 | Like what do you learn from those kinds of incidents

01:37:23.880 | when stuff goes wrong in the test process?

01:37:26.440 | - I think that incident was that

01:37:30.320 | there was a consensus failure of some kind, as I remember.

01:37:33.720 | Basically just different clients

01:37:35.640 | interpreting things in different ways

01:37:37.080 | and then one of them getting kicked off the network.

01:37:39.360 | And then it ended up taking a while

01:37:41.960 | to actually get everyone to get back online.

01:37:45.000 | Like a big part of the reason

01:37:46.240 | why it took weeks to resolve, right,

01:37:47.880 | is because it's on a test network,

01:37:51.120 | the coins are valueless,

01:37:52.200 | and so there's not really this big push of any kind

01:37:55.560 | for people to actually go and download a new client

01:37:58.560 | so they can start participating again.

01:38:00.500 | And so it definitely took a while

01:38:02.860 | until the chain started finalizing again.

01:38:05.000 | And then also there was, I think,

01:38:08.520 | another round of just not finalizing in October,

01:38:12.060 | as I remember.

01:38:12.900 | There were definitely things that we learned.

01:38:17.280 | Like there were a lot of things,

01:38:18.720 | especially that client developers

01:38:20.880 | just learned about optimization

01:38:22.840 | and how to build their clients

01:38:25.800 | in a way that they can process things efficiently.

01:38:28.520 | There's a lot that we learned

01:38:30.360 | from just seeing the full life cycle of what happens

01:38:32.960 | when more than a third of the validators go offline

01:38:35.520 | and then finalization stops.

01:38:37.000 | And then that kind of weird, unusual state of the chain

01:38:42.000 | continues for a while.

01:38:43.520 | And then eventually everyone who was not participating

01:38:46.600 | just gets enough of their stake.

01:38:48.800 | We don't use the word slashed,

01:38:50.720 | we use the word leaked for this,

01:38:51.920 | but basically also burned

01:38:53.400 | until the people who are participating

01:38:56.080 | go back up to two thirds

01:38:57.120 | and then the chain goes back to finalizing.

01:38:59.680 | So just seeing all of those edge cases play out live,

01:39:03.080 | I think actually helped a lot

01:39:04.440 | and probably helped to really contribute

01:39:05.840 | to making us feel better about mainnet.

01:39:08.960 | - I mean, there's also an incident just recently

01:39:11.400 | in April 24th of 2021,

01:39:15.880 | where this was on Beacon, I guess,

01:39:19.240 | there was a bug discovered in the software client Prism

01:39:22.680 | that prevented roughly 70% of validators

01:39:25.440 | on the network from producing blocks.

01:39:27.480 | I mean, maybe you can comment on what happened,

01:39:30.800 | but broadly, like the big picture,

01:39:34.360 | what kind of stuff are you worried about

01:39:36.680 | in terms of problems that might arise?

01:39:39.480 | We're talking about small bugs,

01:39:41.280 | are we talking about like emergent,

01:39:44.400 | social, unexpected social bugs?

01:39:47.720 | You know, what are the things that worry you

01:39:49.240 | about the future of Ethereum

01:39:50.640 | that you want to make sure you construct mechanisms

01:39:53.360 | that prevent those things from happening?

01:39:55.440 | - So one of the lucky things there

01:39:56.920 | was that this particular bug

01:39:59.280 | only prevented proposed Zilsoft blocks,

01:40:01.400 | it did not prevent attestations.

01:40:03.200 | All right, so attestations is just a mechanism

01:40:05.000 | for voting on blocks,

01:40:06.280 | and it's the attestations that are actually responsible

01:40:08.680 | for the chain finalizing.

01:40:09.880 | So like coming to this more permanent agreements on blocks.

01:40:12.680 | Right, so the chain was actually quite stable

01:40:15.320 | all the way through.

01:40:16.320 | I think the thing that we generally learn

01:40:21.080 | from these experiences is just how valuable it is

01:40:26.120 | to have this multi-client network.

01:40:28.400 | Right, so this is one of these areas

01:40:29.720 | where I think Ethereum distinguishes itself

01:40:31.680 | from like Bitcoin, for example.

01:40:33.440 | Right, that in Ethereum,

01:40:34.800 | we don't have one single client

01:40:38.760 | that everyone just runs, right?

01:40:41.640 | There's multiple implementations of the protocol.

01:40:44.520 | And these multiple implementations,

01:40:46.120 | they all process and verify the blocks

01:40:49.440 | that each other can verify, right?

01:40:52.560 | So they all speak the same language.

01:40:54.280 | Now, sometimes when there's a bug, they disagree.

01:40:56.720 | And when two clients disagree because of a bug,

01:40:59.240 | we call this a consensus failure.

01:41:01.120 | And consensus failures are pretty serious, right?

01:41:03.200 | And when you have clients monoculture like Bitcoin does,

01:41:08.760 | then like it's more rare to have consensus failures.

01:41:12.680 | There you still have them actually.

01:41:13.880 | Bitcoin had a consensus failure

01:41:15.240 | between two different versions of the same client

01:41:17.280 | back in 2013, but they're less likely to happen.

01:41:21.920 | But the interesting thing is

01:41:23.960 | that the multi-client architecture has actually,

01:41:26.720 | I think, saved Ethereum much more than it's hurt it.

01:41:30.080 | So even in this most recent incident, right?

01:41:32.000 | Like Prism was not producing blocks,

01:41:33.480 | but all the other clients were still producing blocks.

01:41:36.000 | - There's four others, right?

01:41:38.120 | - Yes, it's Prism, Nimbus, Teku, and the Lighthouse.

01:41:42.120 | And then also Ethereum back in 2016 had this fun event

01:41:47.400 | that we call the Shanghai DOS attacks.

01:41:49.400 | They're called that because the attacks started

01:41:52.920 | right on the first day of our annual conference at DEF CON

01:41:57.000 | that happens to be in Shanghai that year.

01:41:59.360 | So what happens like basically was that

01:42:02.440 | someone came up with a way to create blocks

01:42:05.760 | that were very slow for one client to process,

01:42:08.840 | but not the other clients.

01:42:10.200 | So at that time, there were basically two Ethereum clients.

01:42:12.920 | They were called Geth and Parity.

01:42:15.080 | Right now, I think the top three ones are

01:42:17.960 | Geth, Nethermind, and Baesu.

01:42:20.760 | But what happened as a result of us having two clients

01:42:23.640 | is that the attacker was just not able to come up with blocks

01:42:27.000 | that both clients were like completely failing at processing.

01:42:32.000 | And so like a lot of the miners

01:42:33.880 | and a lot of network participants,

01:42:35.120 | they just kept on switching between the two implementations

01:42:37.800 | depending on which one worked.

01:42:39.080 | And that actually really helped the chain

01:42:44.040 | kind of survive through that month of attacks

01:42:46.200 | as the attacker just like kept on hammering at our system

01:42:49.000 | and identifying all of the weaknesses

01:42:51.240 | and just like forcing our clients to do this rapid sprint

01:42:55.080 | of just like optimizing the hell out of everything

01:42:57.120 | and make sure there aren't any of those DOS blocks

01:43:00.160 | or DOS bugs remaining.

01:43:02.560 | So that was another example.

01:43:04.800 | And then like as a counter example,

01:43:07.400 | so like something that also shows the point

01:43:09.960 | from the other side,

01:43:11.280 | Bitcoin had this bug in 2010, right?

01:43:13.600 | The balance overflow bug.

01:43:15.680 | Basically someone created a transaction that had two outputs

01:43:20.320 | and those outputs were both of a few billion Bitcoin.

01:43:24.760 | So like about two to the power of 63 Satoshis.

01:43:27.960 | And then if you add those numbers together,

01:43:29.480 | you'll go above to the power of 64.

01:43:31.840 | And of course, you know, computers,

01:43:33.120 | like once you go above to the power of 64, you wrap around.

01:43:36.960 | And so the Bitcoin nodes thought that there was enough money

01:43:40.680 | to pay for the transaction 'cause it was asking for,

01:43:42.680 | let's say like a billion Satoshis or something,

01:43:44.400 | but actually it was asking for two to the power of 64

01:43:47.040 | plus a billion.

01:43:48.120 | And so, you know, the attacker just managed to create

01:43:50.360 | like billions of Bitcoin out of thin air.

01:43:53.120 | And this was not only discovered and fixed

01:43:57.320 | after something like 12 hours,

01:43:59.800 | but if there had been,

01:44:02.360 | if Bitcoin had been a multiple implementation system,

01:44:05.040 | then what would have almost certainly happened

01:44:08.160 | is like one of the clients would have bugged out,

01:44:10.680 | but the other clients would have probably, you know,

01:44:13.280 | actually had to check for that, right?

01:44:15.080 | And so there would have been a consensus failure,

01:44:17.440 | but at least that would have like alerted everyone

01:44:21.440 | that there is a problem very quickly.

01:44:24.080 | And it also would have given everyone

01:44:25.680 | just like obvious social permission to go and, you know,

01:44:28.440 | pick whichever one of the chains is correct

01:44:30.480 | and solve the problem.

01:44:31.960 | So like, that's, I think, a big learning that we've had

01:44:36.920 | from multiple of our experiences

01:44:39.200 | in the Ethereum ecosystem,

01:44:40.240 | just like validating this multi-client model.

01:44:43.280 | And to be fair,

01:44:44.120 | it's a model that we get criticized for a lot, right?

01:44:46.160 | Like Bitcoin people talk about, you know,

01:44:48.280 | the risk of consensus failures that this creates.

01:44:51.120 | VC types are like, well, you know,

01:44:53.160 | isn't it expensive and wasteful to fund

01:44:54.960 | three software teams where you could just be making,

01:44:56.800 | you know, one quote focused effort.

01:44:59.480 | They love the word focused and like, you know,

01:45:01.440 | Ethereum is not that,

01:45:02.480 | but it's amazing despite not being that.

01:45:04.520 | - Yeah.

01:45:05.360 | - Basically, yeah, so that was interesting.

01:45:12.600 | And then there have definitely been other learnings as well,

01:45:16.680 | just from like seeing the chain live

01:45:18.640 | and seeing what actually is the staking experience,

01:45:22.800 | like what are the actual incentives

01:45:24.920 | for all the different participants.

01:45:26.480 | So I definitely feel like we're gaining a lot

01:45:28.920 | from this sort of one year of trial running the chain

01:45:31.880 | before we actually make all of Ethereum depend on it.

01:45:34.520 | - Let me ask perhaps a strange question,

01:45:37.600 | but, you know, proponents of Bitcoin will say things like,

01:45:41.280 | Bitcoin fixes everything.

01:45:42.720 | So why do we need Ethereum

01:45:46.520 | versus like Bitcoin plus Lightning Network for scalability

01:45:54.480 | and then using Bitcoin for,

01:45:56.320 | with this proof of work for security?

01:45:58.600 | So in this kind of, it is perhaps sort of a strange question,

01:46:02.840 | but it's a high level question.

01:46:04.080 | Why do we need another technology?

01:46:07.360 | Yes, it has a bunch of nice features,

01:46:09.560 | but like doesn't Bitcoin fix everything already?

01:46:13.120 | - So the thing that always attracted me about Bitcoin is,

01:46:18.080 | you know, these values of, you know, decentralization,

01:46:20.520 | creating these open provisional systems

01:46:22.960 | that anyone can participate in

01:46:24.720 | and that aren't just going to flop over and die

01:46:27.200 | if whoever created them gets bored

01:46:28.840 | and like that are resisted to like whoever runs them,

01:46:33.640 | breaking the rules and all of these things, right?

01:46:35.400 | And I think that pretty strongly that these principles

01:46:38.680 | are like really valid and important

01:46:40.640 | to much more things than just money, right?

01:46:42.560 | Like Bitcoin is the blockchain for money

01:46:45.080 | and Ethereum is built from the start

01:46:47.080 | as a general purpose blockchain, right?

01:46:48.840 | It's, you know, there is ether the asset on Ethereum,

01:46:51.600 | but then you can also make, you know,

01:46:53.720 | decentralized financial things, what we call DeFi today.

01:46:58.280 | You know, you can make like ENS,

01:46:59.560 | the decentralized domain name system.

01:47:01.440 | You can put, make prediction markets on it.

01:47:05.040 | You can make totally non-financial systems

01:47:09.240 | that just like keep track of whether or not

01:47:12.000 | some certificate was signed

01:47:13.440 | or whether or not some like cryptographic key got revoked.

01:47:16.760 | There's this big long list of like just interesting things

01:47:21.320 | that you could use about blockchains to do, right?

01:47:23.480 | Like basically they are sort of the missing piece

01:47:26.520 | that we are without them,

01:47:29.360 | the kinds of things that a decentralized computer network

01:47:31.600 | can do is very limited.

01:47:32.800 | And once you have them,

01:47:33.760 | you know, a lot of those limitations end up going away.

01:47:36.440 | And so Ethereum was like always from the beginning

01:47:41.440 | about that, right?

01:47:43.040 | It's about like, hey, this isn't just money.

01:47:45.160 | There's so much more that you could do

01:47:48.160 | if you could just go ahead and make any infrastructure

01:47:51.520 | or, you know, digital institution or DAO

01:47:54.040 | or whatever you want to call it,

01:47:55.520 | where you, the kind of the base layer of the logic

01:47:58.600 | is just executed in this open and transparent way

01:48:00.880 | where everyone can see what's going on.

01:48:03.360 | Or, you know, if you like your zero knowledge proofs,

01:48:05.320 | at least everyone can see proofs that prove to you

01:48:07.320 | that what's going on follows the rules.

01:48:09.520 | And you don't need to just constantly keep trusting

01:48:13.600 | centralized actors.

01:48:14.960 | And-

01:48:16.040 | - Hence the smart contracts.

01:48:17.640 | - Exactly.

01:48:18.480 | - As being a sort of a core technology as part of Ethereum.

01:48:21.480 | - Yes, exactly.

01:48:22.320 | Smart contracts, the computer programs

01:48:24.720 | that are running on Ethereum,

01:48:25.800 | they are like the core of what makes

01:48:27.680 | Ethereum general purpose.

01:48:29.680 | So I think, like, I do think that, you know,

01:48:33.280 | there's a lot more wrong with the world than just money.

01:48:37.120 | Right?

01:48:37.960 | Like I'm not one of these people who thinks that,

01:48:39.760 | you know, if you get rid of fiat currency

01:48:42.080 | and you replace it with cryptocurrency,

01:48:43.480 | then suddenly wars are going to go away, right?

01:48:45.360 | Because like, first of all, you know,

01:48:47.960 | like say in your rush revenue is only a small portion

01:48:50.280 | of government revenue, right?

01:48:51.440 | It's like what, five, 10%, something like that.

01:48:54.320 | Second of all, like if you are the sort of,

01:48:58.880 | this is one of the things I don't even get

01:49:00.080 | about their philosophy.

01:49:00.960 | Like, let's say you're the sort of person who is a,

01:49:03.680 | like an extreme and very distrusting libertarian.

01:49:06.560 | And you think that these governments are terrible, right?

01:49:09.280 | Like we know today that governments fund a combination of,

01:49:13.600 | you know, things like welfare

01:49:15.040 | and things like, you know, the military that,

01:49:18.440 | you know, goes and like bombs people in Afghanistan, right?

01:49:20.960 | And so the question you have to ask is like, okay,

01:49:24.200 | you with your new, you know, magic newfangled cyber currency

01:49:29.200 | that takes over the world,

01:49:32.080 | take away the government's ability

01:49:33.480 | to have seniorized revenue.

01:49:34.880 | And so you reduce the government's revenue by 10%.

01:49:37.680 | If the government is that evil,

01:49:39.400 | which portion of its expenses

01:49:41.640 | is it going to take that 10% from?

01:49:43.640 | Is it going to stop the bombing people in Afghanistan

01:49:45.800 | or is it going to cut welfare?

01:49:47.640 | If you think it's the first,

01:49:48.600 | you have a very optimistic view of the government, right?

01:49:51.600 | So that's, I guess my perspective on like why the whole,

01:49:56.600 | you know, we're going to save the world

01:50:00.440 | and create peace by like denying governments

01:50:04.480 | the right to stealth taxation kind of perspective

01:50:07.680 | doesn't really make much sense for me.

01:50:09.480 | And I do think that there is real value

01:50:11.200 | that comes from a decentralized and open currency.

01:50:14.920 | Like just the fact that there is a financial infrastructure

01:50:18.320 | that anyone in the world can, you know,

01:50:20.280 | go ahead and use, right?

01:50:21.400 | Like it's, that's something that can easily

01:50:24.480 | be a big boon for people, right?

01:50:25.680 | There's a lot of places where the currency

01:50:29.880 | and is much less stable than the dollar.

01:50:32.680 | And, you know, these people like they don't like,

01:50:35.880 | well, if they use Bitcoin,

01:50:37.520 | their only option is to get Bitcoins, right?

01:50:39.240 | Which, you know, are also pretty volatile.

01:50:41.320 | If they use Ethereum, then, you know, they can get ether,

01:50:44.280 | but then they can also get stable coins, right?

01:50:46.000 | And you might think that, you know,

01:50:47.800 | oh, you're not being ideologically pure.

01:50:49.840 | Now you're giving them stable coins,

01:50:51.160 | which are mirroring dollars.

01:50:52.360 | And obviously dollars are going to collapse too.

01:50:54.320 | But the reality is that dollars are vastly more stable

01:50:56.720 | than the Venezuelan Bolivar.

01:50:58.440 | So like there are really meaningful

01:51:03.440 | and beneficial things that you can give to people

01:51:05.960 | by having a global and open financial system.

01:51:09.080 | But I think if you want to actually do that,

01:51:11.720 | like you have to have much more than just a currency, right?

01:51:14.160 | And then if you want to go beyond financial things,

01:51:16.280 | then, you know, you have to obviously

01:51:18.960 | have much more than a currency.

01:51:20.880 | And then, you know, you also have to actually

01:51:23.560 | take scalability seriously

01:51:24.920 | 'cause the non-financial applications,

01:51:26.640 | like nobody's going to pay $5 a transaction for them.

01:51:29.280 | - Can we return to dogs?

01:51:33.840 | - Sure.

01:51:34.680 | (dog barking)

01:51:35.520 | (laughing)

01:51:38.320 | - No, no, no, no, no.

01:51:40.200 | - The other one's categorically forbidden.

01:51:41.800 | - Yeah, categorically forbidden.

01:51:43.320 | Is there any cryptocurrency based on cats, actually?

01:51:45.960 | - I think there are.

01:51:46.880 | Like there was Catcoin, there was Nandcoin.

01:51:49.600 | For some reason, they just didn't catch on

01:51:51.240 | as much as the dog coins did.

01:51:53.160 | - Okay, so let's talk about Dogecoin and Elon Musk.

01:51:56.360 | Elon said that, quote,

01:52:00.440 | "Ideally, Doge speeds up block time 10x,

01:52:04.640 | increases block size 10x, and drops fee 100x.

01:52:09.640 | Then it wins hands down," end quote.

01:52:14.080 | You said in a blog post, partially responding to that,

01:52:18.240 | that there are subtle technical reasons

01:52:20.560 | why this is not possible.

01:52:22.080 | To this, Elon said that you, quote, "fear the Doge."

01:52:28.760 | So let's talk about this.

01:52:31.560 | What are the technical hurdles for Dogecoin

01:52:34.560 | that prevent it from becoming

01:52:35.880 | one of the primary cryptocurrencies of the world?

01:52:38.800 | And do you, in fact, fear the Doge?

01:52:41.240 | - I definitely feel obligated to correct the record.

01:52:43.560 | I definitely do not fear the Doge.

01:52:45.400 | - Okay. - No, I love the Doge.

01:52:47.120 | I actually visited the Doge in Japan a few years back.

01:52:50.440 | She's an amazing dog, she's still alive.

01:52:53.920 | - Wait, the original Doge?

01:52:55.080 | - Yeah. - Oh, wow.

01:52:56.600 | - So, you know, we accept Doge every year

01:53:02.840 | for our annual DEF CON conferences.

01:53:05.560 | So I definitely don't think Ethereum is opposed to Dogecoin.

01:53:10.560 | I kind of want to feel like Ethereum

01:53:13.760 | is at least a little bit in spirit itself a Dogecoin.

01:53:16.000 | And then, as I mentioned, I love Doge.

01:53:18.920 | I bought a bunch of Doge.

01:53:20.920 | I still hold a bunch of Doge.

01:53:22.520 | On the scalability question,

01:53:25.560 | the challenge basically is the limits to scalability

01:53:29.840 | and the trade-offs with centralization.

01:53:31.920 | If you just increase the parameters

01:53:33.920 | without doing anything else,

01:53:34.920 | then it just becomes more and more difficult

01:53:37.280 | for people to validate the chain.

01:53:38.640 | And it just becomes more likely

01:53:41.240 | that the chain becomes centralized

01:53:42.960 | and becomes vulnerable to all kinds of capture.

01:53:45.920 | - So does it need some of the layer two technologies

01:53:48.760 | that we've been talking about?

01:53:50.960 | - I personally think that if Doge

01:53:53.560 | wants to somehow bridge to Ethereum

01:53:55.640 | and then people can trade Doge thousands of times a second

01:53:58.600 | inside of a loop ring, then that would be amazing.

01:54:01.600 | If they want to just take ZK roll-up style technology

01:54:05.240 | and just have thousands of transactions a second

01:54:07.480 | on their own chain, then that would be

01:54:10.160 | a great outcome as well.

01:54:11.440 | - So is there ways for Ethereum

01:54:13.600 | and Dogecoin to work together?

01:54:16.120 | So there's a power behind a person like Elon Musk

01:54:22.000 | pushing the development of a cryptocurrency.

01:54:24.160 | Is there ways to leverage that power

01:54:28.520 | and that momentum to improve Ethereum,

01:54:31.240 | to improve some of the sort of cryptocurrencies

01:54:35.720 | that are already technologically advanced

01:54:38.040 | and pushing forward that kind of technology?

01:54:40.400 | - I definitely think there's room for-

01:54:45.240 | - You know that meme of Doge taking over?

01:54:48.960 | - Yes, yes, I've seen it.

01:54:50.400 | - Is there a way to ride that storm,

01:54:53.800 | that wave of the Doge taking over?

01:54:57.120 | - I think if we can have a secure Doge to Ethereum bridge,

01:55:00.280 | then that would be amazing.

01:55:01.960 | And then when Ethereum gets its scalability,

01:55:04.360 | any scalability thing that works for Ethereum assets,

01:55:07.520 | you would be able to also trade wrapped Doge

01:55:10.360 | with extremely low transaction fees

01:55:11.840 | and very high speed as well.

01:55:13.240 | - Is there precedence for building secure bridges

01:55:16.560 | between cryptocurrencies?

01:55:17.960 | How difficult is this kind of task?

01:55:21.160 | - It's definitely something that's in its infancy.

01:55:23.920 | There definitely have been some cross-chain interaction

01:55:26.440 | things that have been done before.

01:55:28.160 | So the earliest is probably the concept of merge mining,

01:55:31.120 | when a chain just makes its entire proof of work algorithm

01:55:35.320 | dependent on the proof of work algorithm of another chain.

01:55:38.720 | And so I think famous Dogecoin

01:55:40.920 | actually merge mines to Litecoin,

01:55:42.440 | which is, I think in retrospect,

01:55:44.120 | it's not looking like a very good choice

01:55:45.520 | because now Dogecoin is bigger than Litecoin.

01:55:47.720 | But if there's potentially some way for Dogecoin

01:55:53.960 | to merge mine with an Ethereum proof of stake

01:55:58.040 | and stuff some kinds,

01:55:59.040 | then that could be an interesting alternative.

01:56:01.480 | So that's one type of chain interaction.

01:56:06.560 | As far as bridges, like one chain reading another chain,

01:56:09.600 | early in Ethereum's history,

01:56:10.880 | there was this project called BTC Relay.

01:56:12.960 | It's a smart contract on Ethereum

01:56:14.600 | that just verifies Bitcoin blocks.

01:56:16.960 | I think people stopped really caring about

01:56:20.040 | and maintaining it because there just weren't enough

01:56:22.280 | applications that were actually interested

01:56:24.680 | in using it at the time.

01:56:25.680 | And then the transaction fees got too high

01:56:27.520 | to actually maintain it.

01:56:28.960 | So I think if we want to make a BTC Relay 2.0,

01:56:33.480 | that becomes cheaper because it uses snarks

01:56:36.360 | or something like that, then you probably could.

01:56:38.320 | But maybe now's the time when you actually

01:56:42.120 | can do that sort of one-way verification.

01:56:44.440 | But the one challenge though is that

01:56:46.120 | if he wants to have a bridge

01:56:47.840 | that allows you to move assets between chains,

01:56:50.000 | then you don't just need one-way verification,

01:56:52.120 | you need two-way verification.

01:56:54.000 | And Ethereum can verify anything

01:56:55.520 | because Ethereum smart contracts

01:56:57.120 | can just run arbitrary code.

01:56:58.840 | But if you want Bitcoin to be able to do things

01:57:02.120 | based on what happens in Ethereum lands,

01:57:03.880 | then Bitcoin would have to basically,

01:57:06.240 | well, they can do everything with soft forks

01:57:07.840 | 'cause that's their religion, but they'll do it that way.

01:57:12.600 | And if Doge wants to make a fork

01:57:15.160 | where that allows for two-way transferability

01:57:19.920 | with Ethereum, then they could.

01:57:22.080 | I mean, I think that would be a lovely collaboration

01:57:24.680 | to make if there's interest.

01:57:27.280 | I think there might actually even be some multi-SIG funds

01:57:30.880 | that has some funding.

01:57:33.440 | It's just a bounty for someone

01:57:35.680 | to make a bridge between the two.

01:57:37.400 | - Oh.

01:57:38.760 | Could you maybe try to psychoanalyze Elon Musk

01:57:41.080 | for a brief second?

01:57:42.640 | So what are your thoughts about Tesla and Elon Musk's journey

01:57:47.640 | through the cryptocurrency world?

01:57:49.960 | So first with Bitcoin and then with Dogecoin.

01:57:53.160 | So acquiring and holding a large amount of Bitcoin.

01:57:57.440 | And I believe, at least considering the acquiring

01:58:01.520 | and holding a large amount of Dogecoin,

01:58:03.720 | positives, negatives, what do you think the future

01:58:06.560 | for Tesla and SpaceX in the cryptocurrency space looks like?

01:58:10.120 | Do you think they'll consider Ethereum?

01:58:12.040 | - I'm sure that if they stay in the cryptocurrency ecosystem

01:58:17.680 | at all, then they have to at some point.

01:58:19.680 | (Lex laughing)

01:58:22.280 | You know, Bitcoin, number one, Dogecoin, number,

01:58:27.040 | I mean, you know, come on, it deserves to be number three.

01:58:29.440 | And then, or number two.

01:58:31.320 | And then Ethereum can be whatever that other number is.

01:58:34.720 | (Lex laughing)

01:58:37.400 | - If Ethereum only becomes a dog coin somehow,

01:58:42.680 | maybe change the logo to incorporate a dog of some sort.

01:58:46.440 | Almost like Doge sneaking behind.

01:58:50.320 | - Oh, that would be fascinating.

01:58:52.200 | - That's when the merge happens.

01:58:53.120 | - And I think, like Elon, you definitely,

01:58:56.480 | I think you would make a mistake if you were to kind of

01:58:59.640 | ascribe too much like sophisticated, malevolent,

01:59:03.200 | or any deep intentionality to the whole process.

01:59:07.280 | I think, like, he's just a human being and he likes dogs,

01:59:10.160 | just like I like dogs.

01:59:11.280 | - Yeah, I think that is literally the reasoning

01:59:14.120 | behind the whole Dogecoin thing.

01:59:16.240 | There is some aspect to which, I mean,

01:59:18.680 | the guy helped launch a car into space, right?

01:59:23.680 | Like, you could ask, like, what is the purpose of that?

01:59:27.560 | I think the purpose of that is fun.

01:59:30.400 | I think he truly is, more and more, especially lately,

01:59:35.200 | embodying the whole idea that the most entertaining outcome

01:59:39.760 | is the most likely, and he's fully embracing

01:59:42.320 | the most entertaining outcome.

01:59:44.060 | And in many ways, Dogecoin is the most

01:59:46.240 | entertaining cryptocurrency.

01:59:48.320 | As cryptocurrency becomes more and more impactful

01:59:50.840 | in the world, people are getting more and more serious

01:59:53.420 | about it, and so he's selecting the cryptocurrency

01:59:55.980 | that is the least serious and the most fun.

01:59:59.280 | And there's something to that, like coupling fun

02:00:03.280 | with technological sophistication,

02:00:05.780 | and somehow figuring out a way to do that well.

02:00:10.320 | - You know, I want the world to be fun.

02:00:12.400 | I think the world being fun is great.

02:00:14.240 | - Okay, let me ask about a couple

02:00:17.840 | of the technologies, if it's okay.

02:00:19.680 | - Sure.

02:00:20.520 | - What are your thoughts about Chainlink

02:00:22.680 | and hybrid smart contracts that utilize

02:00:24.760 | off-chain external data sources?

02:00:26.920 | - And I think it's definitely necessary

02:00:31.360 | for a smart contract so that you do a lot of things

02:00:34.280 | to use off-chain data of some kind, right?

02:00:36.720 | Like, if you want to have a stable coin,

02:00:38.480 | you need a price oracle so you know

02:00:39.840 | what price you're targeting.

02:00:41.400 | If you want to have some fancy crop insurance gadget,

02:00:45.520 | like I think Ether Risk has been doing a lot

02:00:48.200 | of good work with that, and I think it was either Kenya

02:00:51.840 | or Sri Lanka or both, like they're making a lot

02:00:54.640 | of good progress in some of those places.

02:00:59.200 | Like, you need some kind of oracle to tell you,

02:01:01.600 | you know, did it actually rain in this particular area?

02:01:04.300 | If he wants to have, like, assets that mirror

02:01:07.240 | other financial assets, you need an oracle.

02:01:09.320 | If you want to have a prediction market, you need an oracle.

02:01:11.960 | And so projects that provide oracles

02:01:15.400 | are definitely really important.

02:01:18.240 | There are definitely different kinds of use cases,

02:01:20.320 | like Augur is more about events,

02:01:22.340 | and the Augur oracle is designed, I think,

02:01:24.820 | differently from Chainlink, right?

02:01:26.040 | Like, Chainlink emphasizes the whole, you know,

02:01:28.920 | like we have a fast automated thing

02:01:31.600 | that just gives you data quickly,

02:01:33.680 | whereas Augur is more, you know,

02:01:35.720 | we don't give a crap about speed.

02:01:38.160 | And look, we don't need to give a crap about speed

02:01:39.960 | because if you want to get your money out

02:01:41.360 | on a prediction market that where in reality it's resolved,

02:01:44.240 | you can probably just sell your coins for 99 cents anyway.

02:01:47.080 | So, I mean, I think, I mean, Chainlink is definitely,

02:01:51.520 | like, taking a good, important part

02:01:56.280 | of the oracle design space.

02:01:58.400 | And I'm definitely happy that there's, like,

02:02:00.880 | that project's taking the task on.

02:02:02.640 | I mean, at the same time, I do think that, you know,

02:02:04.480 | their frog army on Twitter can get a bit intense at times,

02:02:07.160 | but like- - The frog army?

02:02:08.860 | Is there a way to incorporate sort of oracle network

02:02:11.500 | type of ideas into Ethereum?

02:02:14.460 | - I personally would prefer the Ethereum base layer,

02:02:17.900 | like, stay away from trying to provide

02:02:20.860 | too much functionality because, like,

02:02:22.980 | once you have the Ethereum base layer making a claim

02:02:27.140 | about, like, say, the US dollar to Ethereum price,

02:02:31.580 | like, at some sense, you're basically saying

02:02:34.180 | that, like, Ethereum as a base platform

02:02:37.300 | starts making what could be geopolitical statements.

02:02:40.100 | - Right. - Right?

02:02:40.940 | Like, for example, you know, imagine if there was some,

02:02:43.460 | you know, civil war and the US split up

02:02:45.380 | and you had two currencies

02:02:46.420 | that both claims to be the US dollar.

02:02:47.900 | Well, you know, Ethereum would have to pick one

02:02:50.900 | for the sake of everyone who was already using that oracle.

02:02:53.020 | So, you know, does that mean that the blockchain

02:02:54.940 | would be, like, taking a position

02:02:57.380 | in this big mega-political debate?

02:02:59.380 | So, I think, like, for just those kinds of reasons,

02:03:03.540 | I would personally, like, prefer Ethereum itself

02:03:08.180 | to be more of this sort of pure platform

02:03:11.340 | that just analyzes transactions,

02:03:13.780 | just mathematically using, like,

02:03:16.380 | deterministic consensus rules.

02:03:17.860 | And then if you need the oracles, that can be layer twos.

02:03:20.220 | Like, I think Ethereum, like, benefits

02:03:23.540 | from not trying to do everything at layer one

02:03:26.260 | and having this, like, very robust layer two ecosystem

02:03:29.260 | where you have all these projects doing interesting things.

02:03:31.340 | - Yeah, focus on the basic technology, avoid the politics.

02:03:34.020 | Gotcha.

02:03:34.860 | Let me ask a bit of a human question.

02:03:37.940 | Charles Hoskinson, someone you've worked with

02:03:43.740 | in the early days of Ethereum,

02:03:45.980 | there appears, to my outsider view,

02:03:48.820 | to have been a bit of a falling out.

02:03:51.060 | Is there a positive, inspiring human story

02:03:53.980 | to be told about why you two parted ways?

02:03:59.540 | - I kind of want to let the various books

02:04:01.740 | about Ethereum speak for themselves,

02:04:04.260 | but, you know, I feel like, you know,

02:04:07.940 | since that time, I think, you know,

02:04:10.420 | Charles has clearly, I mean,

02:04:14.180 | progressed and matured in a lot of ways.

02:04:16.860 | And people who follow Charles closely

02:04:19.700 | have definitely told me that, you know,

02:04:21.140 | like, 2021 Charles is very different from 2014 Charles.

02:04:24.140 | And I'm sure 2021 Vitalik is much different

02:04:26.500 | from 2014 Vitalik as well.

02:04:28.500 | - I'm kind of interested how the 2030 and 2040 Vitalik

02:04:32.380 | and Charles look like as well.

02:04:34.060 | - Oh, interesting.

02:04:35.380 | - Like the progression of the humans.

02:04:37.420 | - Is this going to be one of those things

02:04:39.140 | where, like, everyone comes full circle

02:04:40.740 | and then 2030 Vitalik and Charles are best friends?

02:04:43.260 | - Yeah, not necessarily best friends,

02:04:45.620 | but some kind of,

02:04:47.100 | are able to reminisce in ways that is,

02:04:51.820 | that puts some of the tension of the past behind.

02:04:55.460 | - I think such things are possible.

02:04:58.420 | I think, you know, people definitely,

02:05:01.380 | absolutely have a right to,

02:05:02.820 | and I think should strive to just constantly change

02:05:06.220 | and reinvent themselves.

02:05:07.420 | - Is there something you could say about your thoughts

02:05:11.100 | about the Cardano project that Charles Hoskinson leads?

02:05:15.540 | They've worked on some interesting ideas

02:05:19.220 | that mirror some of the ideas in Ethereum,

02:05:22.700 | proof of stake, working on smart contracts

02:05:27.660 | and all those kinds of things.

02:05:28.860 | Is there something, again, positive,

02:05:31.420 | inspiring that you could say?

02:05:33.140 | Are they a competitor?

02:05:34.380 | Is it complimentary technology?

02:05:36.300 | - There's definitely interesting ideas in there.

02:05:39.940 | I mean, I do think Cardano takes a bit of a different

02:05:42.420 | approach than Ethereum in that, you know,

02:05:44.580 | they really emphasize having these big academic proofs

02:05:47.580 | for everything, whereas Ethereum tends to be more okay

02:05:51.580 | with heuristic arguments, in part because it's just trying

02:05:54.300 | to do more faster.

02:05:55.980 | But there's definitely very interesting things

02:05:59.700 | that come out of IOHK research.

02:06:02.460 | - Can you comment on that kind of idea?

02:06:05.420 | I, as sort of having a foot in research,

02:06:08.860 | enjoy Charles's kind of emphasis on papers

02:06:12.180 | and deep academic rigor.

02:06:14.340 | What's the role of deep research rigor

02:06:18.780 | in the world of cryptocurrency?

02:06:20.560 | - Interesting.

02:06:21.400 | I'm actually the sort of person who thinks

02:06:22.580 | deep rigor is overrated.

02:06:25.220 | The reason why I think deep rigor is overrated

02:06:27.340 | is because I think, in terms of why protocols fail,

02:06:32.340 | I think the number of failures that are outside the model

02:06:37.020 | is even more important, is bigger and more important

02:06:39.340 | than the failures that are inside the model.

02:06:41.580 | Right, so if you take selfish mining, for example,

02:06:44.180 | that original discovery from 2013 that showed how

02:06:51.580 | Bitcoin does, even if it has a 50% fault tolerance,

02:06:56.180 | assuming everyone's honest, it only has a zero to 33%

02:07:00.500 | fault tolerance, depending on your network model,

02:07:02.760 | if you assume rational actors.

02:07:05.140 | And to me, that was a great example of an outside

02:07:09.300 | the model failure, right?

02:07:10.180 | Because traditional consensus research, just up until,

02:07:14.020 | before the blockchain days, did not think about

02:07:17.260 | incentivization much, right?

02:07:19.420 | There was a little bit of thought about incentivization.

02:07:21.620 | There's a couple of papers on the Byzantine Altruist

02:07:24.380 | rational model, but it wasn't that deep.

02:07:26.860 | It was mostly operating under the assumption that

02:07:29.180 | we're gonna make consensus between 15 participants

02:07:33.020 | and these are institutions, and if something goes wrong,

02:07:36.260 | then we can figure out whether or not it was deliberate

02:07:39.500 | offline, and if they did something evil, we can sue them.

02:07:42.100 | Whereas in the crypto world, you can't do that, right?

02:07:44.500 | And so, that whole discovery basically arose

02:07:47.700 | just because the model of traditional consensus research

02:07:52.700 | didn't cover those possibilities, and then once you go out

02:07:56.140 | of the model, those other issues do exist, right?

02:07:59.100 | So, but then at the same time, there definitely are

02:08:03.340 | protocols that turn out to be, that do have failures

02:08:07.220 | inside the model.

02:08:08.180 | Like this reminds me of the time when I found a bug

02:08:12.780 | in a proposed consensus implementation from either

02:08:16.900 | BitShares or EOS.

02:08:18.180 | This happened around the end of 2017.

02:08:20.100 | So, that was definitely inside the model because they had

02:08:24.420 | a very clear idea of what they were trying to achieve.

02:08:26.340 | They had a very clear description, and there's a very clear

02:08:29.380 | mathematical argument for why the description doesn't lead

02:08:32.020 | to what they're trying to achieve.

02:08:33.020 | But ultimately, what you're trying to achieve can never

02:08:35.820 | be fully described in formal language, right?

02:08:38.340 | Like this is the big discovery of the AI safety people,

02:08:42.580 | for example, right?

02:08:43.420 | Like just having a specification of what you want

02:08:48.020 | is an insanely hard problem.

02:08:49.780 | And like the more powerful the optimizer that you're giving

02:08:53.300 | the instructions to, the more you have to be careful.

02:08:56.260 | And so, you know, I think there are kind of these two sides.

02:09:01.260 | And then the other thing is that a lot of the academic

02:09:07.540 | approach ends up like basically optimizing for other people

02:09:11.100 | inside of the academic system.

02:09:12.940 | And it doesn't really optimize for like curious outsiders.

02:09:17.780 | Whereas like I personally, Matt, like totally optimize

02:09:19.940 | for curious outsiders, or at least I feel like I strive to.

02:09:23.140 | So I guess like that's my case for why I like tends

02:09:28.140 | to behave in ways that, you know, occasionally traditional

02:09:32.620 | academic types criticize as being reckless.

02:09:35.140 | But I mean, on the other hand, you know, there's definitely

02:09:39.660 | real benefits that come from like just taking

02:09:43.660 | a rigorous approach, especially when, you know,

02:09:47.700 | you know what the thing, like you know what the specification

02:09:50.980 | is of what you're trying to get.

02:09:53.100 | And like, you're trying to kind of improve your way

02:09:56.420 | or provide protocols that actually provide that.

02:09:58.700 | And like, you know exactly what you're looking for.

02:10:00.740 | I feel like realistically, you probably want to do

02:10:04.260 | both kinds of analysis.

02:10:05.940 | And like sometimes even want to do both kinds of analysis

02:10:08.180 | in stages, right?

02:10:09.020 | Like you have, you want to do more quick and dirty things

02:10:11.740 | and even wants public feedback on the quick and dirty stuff.

02:10:14.140 | And then later on you formalize it more

02:10:16.140 | and then you get more feedback.

02:10:17.740 | Like in general, I guess I feel like the norms of research

02:10:23.540 | in the future, like the internet has just changed so much.

02:10:27.660 | There's no way that it's not going.

02:10:28.980 | And you know, it's even changed like collaboration

02:10:32.020 | structures and like the patterns in which we work

02:10:34.380 | with each other.

02:10:35.460 | There's no way that the correct structure

02:10:38.220 | for collaborative research is the same

02:10:40.700 | as what it was 15 years ago.

02:10:42.100 | But like what combination of these existing components

02:10:46.460 | and of new ideas it is like that's something that's,

02:10:48.900 | you know, totally legitimate to kind of fight it out.

02:10:52.260 | And I think it's great that there's a different ecosystems

02:10:54.780 | that have different attitudes to things.

02:10:56.020 | Like, you know, I think, you know, there's a big possibility

02:10:58.780 | that, you know, things that the Ethereum,

02:11:01.100 | ways that the Ethereum ecosystem approaches

02:11:02.660 | some problems is totally wrong.

02:11:03.980 | And if there's other ecosystems with different principles

02:11:06.340 | and they do well, that's something that we can learn from.

02:11:09.340 | - In the spirit of the depth first search,

02:11:11.300 | can you comment on AI safety?

02:11:13.260 | And some people are really worried about

02:11:15.500 | the existential risks of artificial intelligence.

02:11:18.400 | Is there something you could say that's hopeful

02:11:22.340 | about how we avoid in the same kind of line of reasoning

02:11:26.700 | about creating formal models versus kind of looking

02:11:30.100 | outside the model into what the real world actually is like.

02:11:33.380 | Is there some lessons from that we can take

02:11:36.580 | and map onto the AI safety world where the potentials

02:11:40.460 | of the technology, whether it's in autonomous weapon systems

02:11:45.260 | or just the paperclip problem,

02:11:47.140 | that we can avoid AI destroying the world?

02:11:50.820 | - So my impression is actually that like,

02:11:54.380 | this is more of a kind of far away impression

02:11:56.860 | and it could be wrong, that it might even be

02:11:58.540 | that one of the challenges is that AI is not formal enough.

02:12:01.500 | Like because AI is very practitioner oriented, right?

02:12:05.860 | Like it's all about like, hey, I found a couple of hacks

02:12:08.620 | and look, I ran them and look, they seem to improve

02:12:11.020 | classification accuracy from 0.684 to 0.773.

02:12:15.980 | So a lot of the time, there just isn't actual science

02:12:19.660 | behind why this hack works and why this other hack

02:12:23.220 | doesn't work, you just sort of like trial and error

02:12:24.980 | your way into it.

02:12:25.880 | And I could see how that approach works,

02:12:30.140 | but at the same time, like that approach is not good

02:12:32.740 | for eligibility, for example, it's not good

02:12:35.340 | for like understanding what the heck is actually going on,

02:12:37.780 | like how these kinds of systems conceivably might fail.

02:12:41.980 | Like there's even a debate on like,

02:12:45.900 | can you take GPT-3 like things and just scale them up

02:12:49.140 | and their intelligence will continue to improve

02:12:51.300 | or is there just like some types of reasoning

02:12:53.660 | that they're fundamentally bad at

02:12:54.940 | and like they're not gonna get good at it

02:12:57.380 | no matter how much you like scale this exact same approach

02:12:59.740 | and add more hardware to it.

02:13:01.180 | So having like thinking about what's going on

02:13:06.180 | more explicitly, I mean, my understanding is that

02:13:08.380 | a big part of AI safety research is trying to do

02:13:12.100 | that sort of stuff, right?

02:13:13.860 | - Formalize.

02:13:14.820 | - Yeah, formalize, try to improve just AI eligibility,

02:13:19.180 | like trying to understand if the AI makes some

02:13:22.180 | classification so we can actually see like what happens

02:13:25.520 | and look what's going on in the middle, right?

02:13:27.840 | Whereas with crypto or with traditional cryptography,

02:13:31.200 | it's like very much not, well, okay,

02:13:33.960 | I mean, I should quite say that.

02:13:35.240 | It's traditional cryptography is this interesting mix

02:13:37.920 | of being very formal and being very informal

02:13:40.200 | because it's very formal with given

02:13:43.520 | these security assumptions prove that the protocol

02:13:45.760 | works under these security assumptions.

02:13:47.520 | The places where it's very informal is like,

02:13:49.440 | well, how do we even know that there isn't

02:13:51.320 | an efficient algorithm for factoring numbers?

02:13:53.480 | Yeah, we kind of tried it for 40 years

02:13:56.000 | and then so far no one's found anything better

02:13:58.600 | than the general number field sieve and like,

02:14:01.240 | okay, fine, we'll just assume it's fine.

02:14:03.560 | How do we know you can't find the discrete log

02:14:07.120 | between two elliptic curve points?

02:14:08.520 | Like, nope, did it a couple of decades,

02:14:11.040 | no one's found anything faster than like baby step,

02:14:14.260 | giant step stuff.

02:14:15.760 | So that's, and like there's definitely ways

02:14:20.760 | in which that approach really makes sense, right?

02:14:25.980 | Because at least you can concentrate your analysis

02:14:28.840 | on a small number of building blocks.

02:14:30.860 | And like, you do have some intuitive reasoning

02:14:33.040 | about those building blocks, but like at least

02:14:34.840 | there was a small number of building blocks

02:14:36.400 | and lots of people are looking at them.

02:14:38.040 | And then everything else just sort of gets formally built

02:14:40.440 | on top and you actually can like mathematically

02:14:42.720 | reduce the security of big things to building blocks, right?

02:14:45.660 | Like you can have mathematical proofs that say,

02:14:49.240 | if you make a ZK-SYNARC of a yes statement

02:14:52.480 | when in reality that statement is false,

02:14:54.480 | then you can use that to like extract information

02:14:59.360 | out of elliptic curves that, you know,

02:15:00.800 | it completely breaks the problem or something like that.

02:15:03.820 | So-

02:15:04.660 | - So ZK-SYNARC is an example where formalism is beneficial.

02:15:08.560 | - Absolutely, yeah.

02:15:09.400 | - And so maybe you can have the same kind of stuff

02:15:11.360 | in the AI safety within AI systems

02:15:14.560 | that you can get a hold of some kind of aspect

02:15:18.760 | of the systems that you can control provably.

02:15:21.360 | - And then in blockchains and cryptocurrency,

02:15:24.120 | I think the one area where consensus mechanisms

02:15:27.360 | is still more an art than a science

02:15:29.000 | is that these aren't just like technological systems,

02:15:32.040 | they're crypto economic systems, right?

02:15:33.560 | And they make assumptions about people.

02:15:35.380 | And which assumptions you can make about people

02:15:37.760 | is not something that you can prove with math.

02:15:39.520 | - Right, even just the basic 51% people are honest.

02:15:44.520 | - Can you trust the 51%?

02:15:47.360 | If you can't trust the 51%,

02:15:49.200 | can you trust the other 49% to be able to coordinate

02:15:53.380 | on making their own fork?

02:15:55.120 | What will happen to coin prices?

02:15:56.760 | How do people as human beings react to these events?

02:16:00.440 | There's all of these assumptions.

02:16:02.360 | But at the same time,

02:16:04.040 | if you can write down the assumptions,

02:16:05.680 | then you can do formal things with them.

02:16:08.520 | - I almost forgot to ask you

02:16:10.440 | about one of the most exciting aspects of Ethereum.

02:16:13.360 | I mean, it's non-technical.

02:16:14.600 | I think it's societal, it's social, which is NFTs.

02:16:20.040 | So what do you think about the explosion of NFTs

02:16:24.660 | in the recent months,

02:16:26.340 | especially in the art world and beyond?

02:16:29.980 | And what does the future look like?

02:16:31.680 | So this is maybe the social impact on the world,

02:16:35.820 | on the individual creators of all kinds.

02:16:38.720 | Is that something you've actually expected to see,

02:16:42.500 | NFTs having this kind of impact?

02:16:44.740 | And beyond, what do you think will happen

02:16:48.140 | in the digital space with NFTs,

02:16:51.700 | in virtual reality, in gaming, all those kinds of things?

02:16:54.540 | - I was definitely surprised by NFTs in particular.

02:16:59.260 | I even actually, I think, might be on record somewhere

02:17:02.240 | on some tech conference panel.

02:17:03.780 | They were asking,

02:17:05.220 | it was one of those overrated or underrated sections,

02:17:07.460 | and it asked about NFTs.

02:17:08.540 | And I thought, and I said,

02:17:10.020 | hey, I think NFTs are overrated.

02:17:11.820 | And in retrospect, that turned out to be quite wrong.

02:17:14.420 | I think, I guess I just personally

02:17:17.540 | can't really relate to this concept

02:17:19.980 | of spending a lot of money on a thing.

02:17:22.500 | There's no clear understanding

02:17:27.380 | of why that thing would maintain its value.

02:17:31.160 | - Uniqueness of a thing having value.

02:17:34.700 | - Right, exactly.

02:17:35.700 | I definitely cannot really understand

02:17:40.220 | the psychology behind paying $200,000

02:17:43.420 | for original art painting.

02:17:44.540 | I'd be like, if I had a man,

02:17:46.260 | he should just give me photocopies of everything.

02:17:48.580 | You can hang three photocopies of the Mona Lisa.

02:17:52.260 | Why would I even have the Mona Lisa?

02:17:53.420 | I think I'd probably just have some Nyan cats or something.

02:17:56.180 | - That's one thing where mathematics

02:17:57.740 | or theoretical computer science cannot formalize

02:18:00.060 | why the heck NFTs are valuable at all.

02:18:02.420 | - But the thing that makes me very happy

02:18:06.700 | about the space now that it has happened

02:18:08.740 | is that, this gets back to the conversation

02:18:11.740 | that we had at the beginning.

02:18:13.020 | I'm interested in this concept

02:18:14.500 | of decentralized public goods funding.

02:18:17.620 | I want things that are good and valuable

02:18:20.860 | to as much as possible also be things

02:18:23.780 | that can economically sustain the people who produce them.

02:18:27.060 | Because if you don't have that,

02:18:29.060 | then either the public goods just don't get produced at all

02:18:32.060 | or people make centralized versions

02:18:34.620 | that have some of the properties and try to be substitutes,

02:18:37.100 | but actually just like concentrate control

02:18:39.340 | in a very small group.

02:18:40.440 | Both of those things are not very nice.

02:18:44.580 | The nice thing about NFTs would be,

02:18:46.260 | well, if you're an artist and you can just mint NFTs

02:18:49.580 | and this is a source of revenue,

02:18:50.660 | then like, great, that's another stream of revenue

02:18:52.700 | for creative work that often does still get underfunded.

02:18:57.020 | And that's amazing.

02:18:58.140 | - Okay, let me ask you a weird question.

02:18:59.500 | We talked about Craig Wright a little bit,

02:19:01.300 | but a lot of people write to me, one of two emails.

02:19:06.300 | One email is calling any coin outside of Bitcoin

02:19:13.980 | a scam, and then the other email is saying,

02:19:18.980 | my favorite coin is the best coin,

02:19:22.720 | it's going to save the world, whatever that coin is.

02:19:25.320 | And so I sit back and I look, I have no idea.

02:19:30.140 | I try to figure out like the humans

02:19:34.020 | that I trust in this space, just the basic human qualities.

02:19:38.140 | But do you think some coins are scams?

02:19:42.660 | Do you think some coins, maybe another way to ask it,

02:19:46.060 | are scammier than other coins?

02:19:48.700 | How are people that are looking outside of this space

02:19:51.360 | where there's all of these cryptocurrencies

02:19:53.660 | supposed to figure out what is a scam and not,

02:19:57.540 | or how do you use the right kind of language

02:19:59.500 | when talking about them?

02:20:01.220 | Because there's the harshness of the language

02:20:03.260 | from the Bitcoin maximalists that doesn't just say

02:20:06.220 | everything's a scam, including Ethereum,

02:20:08.620 | but they use terms like shitcoin

02:20:11.580 | that says it's not only a scam, it's like a waste of time.

02:20:14.220 | I mean, every word you can use, they say that.

02:20:17.100 | That's very harsh.

02:20:18.460 | And then some people are just, apply the word scam

02:20:22.060 | much, much more conservatively and just refer to coins

02:20:26.780 | that legitimately are trying to scam people

02:20:29.260 | out of their money as scams.

02:20:31.420 | So what do we do with this word scam?

02:20:33.100 | Should it ever be applied to coins?

02:20:35.420 | And is it a binary thing or is it a gray area?

02:20:41.020 | - I think it's definitely a gray area.

02:20:42.860 | There's definitely things that are really and actually scams.

02:20:46.300 | Like, I mean, BitConnect would be one example

02:20:48.260 | of something that's a way on the scam spectrum.

02:20:51.660 | Did you see their 2017 promotional video, by the way?

02:20:54.900 | - Oh, BitConnect? - Yeah.

02:20:55.980 | ♪ Hey, hey, hey ♪

02:20:57.620 | ♪ What's up, what's up, what's up ♪

02:20:59.100 | ♪ BitConnect ♪

02:21:01.500 | It was this three minute, 48 second video

02:21:03.740 | that was just of this guy making this totally crazy rant.

02:21:07.820 | And it was at some conference in Vietnam

02:21:10.740 | where they were, of course, trying to convince

02:21:12.940 | a whole bunch of people to buy this coin

02:21:14.580 | and they had these claims about how it would go up in value.

02:21:17.700 | That was definitely the peak of these pure,

02:21:20.580 | completely scammy coins.

02:21:24.500 | And that was definitely really terrible.

02:21:27.660 | And I actually, I feel like we have less,

02:21:29.660 | despite cryptocurrency as a whole being bigger,

02:21:31.660 | we actually have quite a bit less of that now.

02:21:34.860 | But then, of course, there's this spectrum

02:21:37.820 | of things that are not completely scams

02:21:40.220 | and then things that are not scams

02:21:42.540 | and that are technically totally fine projects,

02:21:44.420 | but where their community is just incredibly sketchy.

02:21:48.500 | And then all the way to things

02:21:50.580 | that are where the community is nice,

02:21:52.460 | but maybe the project is just fundamentally incapable

02:21:55.380 | of achieving what it's trying to do

02:21:56.660 | or in the community doesn't realize.

02:21:57.980 | And then really good projects.

02:22:00.140 | So if you wanna go a step,

02:22:04.020 | if that's 100% scam,

02:22:06.780 | then what would I call, say, 80% scam?

02:22:09.580 | Bitcoin SV is one example.

02:22:11.220 | This is a Craig Wright's fork of Bitcoin.

02:22:13.620 | Theoretically, it's a blockchain, right?

02:22:15.580 | It's a fork of Bitcoin.

02:22:16.980 | It has 512 megabyte blocks.

02:22:20.180 | If you really wanted to, you could use the blockchain.

02:22:23.340 | It satisfies the properties

02:22:24.660 | that you can send transactions onto it.

02:22:27.220 | You can probably use it as a backup to store your files

02:22:31.540 | if you really wanted to, just because it has so much space.

02:22:35.780 | It might fail, but

02:22:39.340 | it's, but at the same time,

02:22:42.020 | like, you know, as we basically said,

02:22:43.580 | like Craig Wright is a scammer

02:22:46.460 | and like half the community is just totally batshit insane.

02:22:49.580 | - So the humans, the humans of a particular cryptocurrency

02:22:53.260 | is what makes for a scam and not,

02:22:54.980 | like the humans at the top that have a voice

02:22:57.580 | guiding the community.

02:22:58.900 | - Yeah, like I think, you know, in the case of BSV,

02:23:01.660 | the humans, they make just completely wrong

02:23:04.780 | and just obviously wrong claims

02:23:07.620 | about like what BSV is capable of accomplishing

02:23:10.140 | and what it conceivably could accomplish.

02:23:12.620 | And like, there's just a lot of aspects of it

02:23:15.260 | that make it feel like a money grab.

02:23:17.100 | So that's one example.

02:23:18.380 | And then, you know, you gotta go a bit further

02:23:20.780 | and then, you know, you have like the trons of the world

02:23:23.420 | and like, you know, that's a platform, you know,

02:23:25.580 | you can use it, you can do, you can do stuff on it.

02:23:27.980 | But at the same time, like, you know,

02:23:30.140 | they did plagiarize the IPFS white paper and then,

02:23:33.660 | you know, they-

02:23:34.580 | - So the scam equalities.

02:23:36.180 | - Yeah.

02:23:37.020 | - The thing that throws me off a lot,

02:23:38.540 | this makes it very difficult for me,

02:23:40.860 | is that most coins, but the ones that make me feel like

02:23:45.620 | are scammy, have a large community of people

02:23:49.540 | that are super positive about it.

02:23:53.140 | Like, and they'll write to me.

02:23:54.720 | Now that said, sort of on the flip side of that,

02:24:00.500 | Bitcoin people are also very positive.

02:24:04.180 | There's some sense, the reason I was having like squinty eyes

02:24:09.180 | looking at Bitcoin for quite a while,

02:24:12.620 | is like, why is everyone so positive?

02:24:14.780 | I was getting total cult vibes.

02:24:18.020 | Like, the ideas are not grounded in truth,

02:24:22.380 | but are grounded in an obsession of like,

02:24:26.460 | when you can artificially conjure up a truth,

02:24:29.020 | which is why I was a little bit like worried about Bitcoin.

02:24:31.700 | I think I've learned a lot since then

02:24:33.280 | to where like, I learned to separate the community

02:24:38.280 | from the ideas, and I think Bitcoin is a revolutionary idea

02:24:42.300 | on many fronts, but still a community that's like

02:24:46.460 | dogmatically excited about something,

02:24:48.940 | whatever that is, makes me skeptical.

02:24:51.260 | Maybe it's just like my upbringing,

02:24:53.700 | but when everybody's really excited about something,

02:24:56.940 | it makes me skeptical.

02:25:02.140 | But it also makes me difficult to decide

02:25:03.800 | what is a scam or not, because some of the most

02:25:05.600 | exciting ideas in this world have a community

02:25:08.040 | of people who are excited about it, right?

02:25:09.680 | 'Cause it's, I don't know.

02:25:12.360 | I think space exploration is super exciting,

02:25:14.840 | and there's people, I know a lot of them,

02:25:17.960 | that are exceptionally excited about space exploration.

02:25:21.400 | Does that mean it's a scam?

02:25:23.360 | No. - No.

02:25:24.840 | - So I don't know what to do with that,

02:25:26.200 | and so most say just try to stay away, I suppose,

02:25:28.680 | but it's unfortunate, because I'm sure there's

02:25:31.080 | a lot of exciting technologies in that space.

02:25:33.720 | - Like in the case of Bitcoin, I would definitely

02:25:35.640 | not call Bitcoin a scam.

02:25:36.840 | - Right. (laughs)

02:25:39.320 | Right.

02:25:40.160 | - I would also not call Litecoin a scam.

02:25:43.320 | There's people who call Litecoin a scam

02:25:45.160 | because they just say, oh, look,

02:25:47.480 | it has no fundamental use case,

02:25:49.320 | and the concept of being silver to Bitcoin's gold

02:25:52.800 | is just stupid, and milli-Bitcoin is the silver

02:25:56.840 | to Bitcoin's gold.

02:25:58.200 | But at the same time, if you have these people

02:26:03.080 | who just, they do seem to earnestly believe this,

02:26:06.600 | and they're trying to just make Litecoin be Litecoin

02:26:10.440 | as best as they can, then to me,

02:26:13.000 | that's enough for it to not be a scam.

02:26:14.960 | - Yeah.

02:26:15.800 | - And then, so yeah, I think the biggest gray area

02:26:21.400 | is definitely between projects that are earnest,

02:26:27.880 | but they have just all sorts of these different

02:26:31.280 | combinations of flawed qualities to them.

02:26:33.560 | - Yeah. - Yeah.

02:26:34.400 | - I mean, the ones that legitimately is a scam

02:26:36.800 | is when the key people that are at the head

02:26:39.200 | of the project are intentionally lying.

02:26:42.440 | And I think as long as the intent is to try

02:26:46.520 | to do good in the world, even if your actual

02:26:49.840 | implementation of that is flawed,

02:26:51.840 | I think that's not a scam.

02:26:53.560 | It could be flawed ideas, it could be wrong ideas,

02:26:55.700 | but it's not a scam.

02:26:57.640 | I'm learning to navigate this space.

02:27:00.600 | - Yeah, it's definitely a very challenging space

02:27:03.960 | to navigate.

02:27:04.840 | I mean, it's in some ways a reflection

02:27:08.400 | of the world at large.

02:27:10.240 | - Yeah, and as we've said, maybe offline,

02:27:13.020 | that the fact that money is involved

02:27:15.200 | makes it a little bit more complicated,

02:27:17.480 | that lives can be ruined by the choice of technologies

02:27:24.840 | that are taken on.

02:27:25.680 | So it makes it more real, more painful,

02:27:28.920 | more elevated, the impact of this.

02:27:31.720 | - Like imagine Mac versus PC wars,

02:27:35.120 | if everyone who bought a MacBook had 10 Apple shares

02:27:38.480 | inside of it, and everyone who had a PC

02:27:40.160 | had 10 Microsoft shares inside of it.

02:27:42.320 | And then you had the elites who bought their Macs

02:27:45.920 | back in 1983, that they spent $500 dead,

02:27:48.920 | and now they have $40 billion.

02:27:50.320 | So they just think that they're these gurus

02:27:52.640 | who understands the future of finance and geopolitics,

02:27:55.320 | and they make theories about why Apple

02:27:58.640 | is the one that's gonna bring freedom to the world,

02:28:00.680 | and Windows is secretly aligned with the axis of evil.

02:28:05.080 | - Oh, that's brilliant.

02:28:06.080 | So yeah, this is so brilliant.

02:28:07.680 | So I think the right way to think about this

02:28:09.520 | is we map some of the cryptocurrency battles

02:28:12.620 | into the space of like Emacs versus Vim,

02:28:14.760 | or Apple versus PC, if there were some stock

02:28:19.320 | that came along with each implementation of,

02:28:23.040 | each PC, each Mac, that's fascinating.

02:28:25.600 | This is 100% correct, 100% correct.

02:28:28.840 | 'Cause then that really energizes the armies

02:28:31.160 | of people debating over this in a way

02:28:32.640 | that something without money does not.

02:28:35.560 | Okay, let me ask you about something really fascinating

02:28:38.560 | that you are also excited about, which is longevity.

02:28:41.500 | Anti-aging.

02:28:44.280 | You have donated money to the Sense Foundation.

02:28:48.280 | So you have an interest in this whole space

02:28:50.800 | of lifespan research.

02:28:51.980 | What's your vision here?

02:28:54.560 | Or what do you hope to see in anti-aging

02:28:58.000 | and longevity research?

02:28:59.880 | - I think I hope to see the concept

02:29:03.120 | of seeing your parents and grandparents die,

02:29:06.440 | just slowly disappear from the public consciousness

02:29:08.920 | as an experience that happens

02:29:10.680 | over the course of half a century,

02:29:12.600 | the same way that getting lost in a city

02:29:15.080 | slowly disappeared over the public consciousness

02:29:16.960 | over the last 50 now that we have smartphones.

02:29:19.760 | - The thing you have from Nick Bostrom,

02:29:21.960 | the essay pinned in your Twitter,

02:29:26.240 | argues that essentially that death is almost unethical.

02:29:31.240 | Like the fact that we don't do something

02:29:34.440 | about this thing that, in the essay,

02:29:37.560 | is a dragon that keeps murdering everybody around us,

02:29:42.560 | including our parents and grandparents,

02:29:46.000 | is like the fact that we don't try to do something

02:29:48.640 | aggressively about that dragon

02:29:50.480 | doesn't make any sense.

02:29:53.360 | So you think this is a battle worth fighting,

02:29:58.540 | a battle for immortality or at least longevity?

02:30:01.760 | - I'd say absolutely.

02:30:02.680 | And I'd say it's a battle where we really have started

02:30:07.680 | over the last five years in particular

02:30:09.560 | to see the first cracks of humanity

02:30:14.480 | starting to make things that look like

02:30:16.080 | they'll turn into victories.

02:30:17.480 | - Do you think humans can eventually live forever?

02:30:22.680 | And maybe as a side comment to that,

02:30:26.120 | what technology do you think will enable that?

02:30:28.000 | Is it genetic modification?

02:30:29.960 | Is it cloning?

02:30:30.780 | Is it uploading your mind?

02:30:32.400 | - Define forever.

02:30:33.240 | Like are we talking a thousand years, a million,

02:30:35.360 | 10 to the 14, 10 to the 45?

02:30:38.480 | - Well, let's start, as I tweeted today,

02:30:40.520 | eventually everything, the universe will be filled

02:30:43.040 | with super massive black holes.

02:30:44.760 | So that forever maybe like backtracking to where--

02:30:49.120 | - We'll have 10 to the 16 years to figure it out.

02:30:52.440 | - Yes, exactly.

02:30:54.140 | Yeah, maybe travel between the multiverse,

02:30:59.920 | between the different universes of the multiverse.

02:31:02.960 | I mean, but forever meaning like, you know, millennia.

02:31:11.640 | I definitely think that we can get there.

02:31:13.920 | I definitely think that it's the sort of thing

02:31:15.880 | that's going to take an insanely huge amount of work.

02:31:19.280 | And I definitely think it's the sort of thing where,

02:31:21.880 | you know, once we figure out the first crop of problems

02:31:24.760 | and like people start living to 150,

02:31:27.640 | we'll just realize that there's like 10 other problems

02:31:29.680 | that kill you half as slowly and we'll have to do more work.

02:31:32.120 | But you know, the good news is that this,

02:31:34.480 | this is Aubrey's longevity escape velocity argument

02:31:37.240 | that if you get everyone to live to 150 now,

02:31:39.960 | then you know, you have half a century to fix

02:31:41.720 | to all those other problems as well.

02:31:44.320 | So I'm optimistic for that reason.

02:31:47.380 | I think you definitely do not want to underestimate

02:31:52.080 | human ingenuity, especially over the longterm.

02:31:54.480 | Like just to look at what happens to computers

02:31:56.400 | between, you know, the ENIAC in 1950

02:31:58.480 | and where we are in 2020, right?

02:32:00.000 | Like that's a span of 70 years.

02:32:02.720 | So like, you know, both of us, I think,

02:32:04.640 | with just present day technology,

02:32:07.720 | I mean, we have at least 70 more years to live.

02:32:11.080 | So just like imagine what kind of sea change

02:32:13.000 | will happen in biomedicine during that time.

02:32:16.120 | And the other thing that made me optimistic

02:32:17.800 | is that I actually think COVID has been this kind of event

02:32:22.480 | that's really kind of pushed biomedicine

02:32:26.520 | and especially like activist approaches to biomedicine

02:32:29.800 | really into the public consciousness, right?

02:32:32.420 | Like it basically, it's put people into this mindset

02:32:36.200 | that, you know, wait, like, you know,

02:32:37.840 | it's not just like, you know, the bits and tweets

02:32:39.840 | that are gonna save the world.

02:32:41.600 | You know, the bio was actually like super important and huge

02:32:46.040 | and, you know, ultimately what's ending COVID basically,

02:32:51.040 | you know, is the vaccines and the vaccines

02:32:54.040 | have just been, you know, amazing.

02:32:56.160 | And if you can take that energy and restart,

02:33:01.160 | and also like this, I think, philosophical attitude

02:33:04.840 | that I've noticed, like I think the way

02:33:06.800 | that I would describe the philosophical attitude here,

02:33:09.960 | this is going more depth first,

02:33:12.000 | is that I think the way that I kind of interpret

02:33:15.840 | part of what I would call late 20th century ideology

02:33:19.560 | is that there is this mentality that, you know,

02:33:21.760 | nature is good and disruptions from nature are bad.

02:33:25.600 | And generally you wanna minimize disruptions from nature.

02:33:28.680 | And like this exists everywhere

02:33:29.960 | in the political spectrum, right?

02:33:31.160 | So there's nature as in literal nature.

02:33:33.280 | And my view is that like the right wing version of that

02:33:35.760 | is markets as nature, right?

02:33:37.400 | - Markets as nature.

02:33:39.400 | - Yeah, like, you know, the way that, like,

02:33:42.920 | that kind of philosophy talks about, you know,

02:33:45.360 | markets and like the goal of not interfering with them,

02:33:48.240 | like, you know, it is very kind of like nature styled.

02:33:51.400 | And then of course, you know, the conservative one,

02:33:53.880 | which is like traditional culture that existed

02:33:56.920 | before the activists started controlling everything

02:33:59.480 | as also being a kind of nature.

02:34:01.960 | But the 21st century attitude and like really COVID,

02:34:05.280 | you know, has flipped a lot of minds

02:34:08.640 | because with COVID what's happened is that,

02:34:10.800 | well, no, like it's not nature is not safe, right?

02:34:13.720 | The default is that is like, you know,

02:34:15.760 | untold misery and suffering

02:34:17.880 | in tens of millions of people dying.

02:34:19.640 | The only way out for us is through like basically

02:34:23.360 | human ingenuity.

02:34:25.800 | And that frame of mind is one that's like

02:34:29.000 | much more friendly to one,

02:34:31.360 | this other change of minds that I want to see,

02:34:36.240 | which is like basically treating aging

02:34:37.760 | as an engineering problem, right?

02:34:39.560 | Like the default is all 7.8 billion human beings

02:34:43.320 | that are currently on this earth are gonna die

02:34:44.880 | and they're gonna live their last decade of life

02:34:47.280 | in a debilitating pain.

02:34:48.800 | And the only way to stop that is human ingenuity.

02:34:51.920 | And, you know, we don't have that solution yet,

02:34:54.520 | but you know, if we work hard, we will.

02:34:56.640 | - And more and more people on the biology side,

02:34:58.680 | computational biology, are basically converting

02:35:00.760 | the mess of the human biology into an engineering problem.

02:35:05.320 | And once that conversion is happening,

02:35:07.360 | looking at the genetic code, the proteins,

02:35:09.840 | all those kinds of things,

02:35:10.680 | once that conversion happens,

02:35:12.360 | you can now apply the tools

02:35:14.760 | that we know how to solve engineering problems

02:35:17.120 | to solving it that way.

02:35:18.120 | And then there's also the other version,

02:35:19.760 | which is, you know, why do we romanticize this meat vehicle

02:35:24.520 | that ultimately is just a thing that carries the brain,

02:35:28.480 | maybe we can more and more convert ourselves

02:35:30.440 | into the digital realm.

02:35:32.520 | This is where like Neuralink,

02:35:33.960 | have the brain-computer interfaces

02:35:35.640 | and then achieve immortality in the space of information

02:35:38.640 | in the digital space versus in the biology space.

02:35:40.920 | - That stuff's interesting too, I agree.

02:35:42.640 | I mean, I think, you know, we have enough resources

02:35:45.960 | and we should just try all the parallel tracks.

02:35:48.040 | You know, it's great that we have people

02:35:50.240 | just trying to make our bodies work.

02:35:51.480 | It's great that we have people trying to upload

02:35:54.440 | or improve brain scanning.

02:35:56.520 | It's also great that we have just like people

02:35:58.440 | improving cryonics.

02:35:59.440 | So like we could just like, you know,

02:36:01.240 | go to sleep in the freezer and eventually,

02:36:04.040 | hopefully sometime in the future, you know,

02:36:06.560 | how Finny is gonna be able to wake up all of this.

02:36:09.480 | You know, anyone who gets cryochronically frozen today

02:36:14.240 | will be able to wake up, but you know,

02:36:15.880 | that's a bet, right?

02:36:17.200 | That's the last resort.

02:36:18.600 | And then the other interesting thing

02:36:20.280 | about the like extreme uploading approach, right?

02:36:23.920 | Is like, we're excited about space

02:36:27.200 | and one of the points that a lot of science

02:36:32.200 | or like hard science fiction types make is that,

02:36:34.640 | you know, if you wanna explore space,

02:36:35.920 | that's a lot easier if you're not a human, right?

02:36:38.320 | Like one example of this is that, you know,

02:36:40.720 | in the context of humans, we're talking about like,

02:36:42.840 | oh, we're gonna be able to go to the moon

02:36:44.240 | or we're gonna be able to go to Mars,

02:36:46.080 | but there's this project called Starshot, I believe, right?

02:36:49.480 | That's basically trying to send spacecrafts

02:36:52.800 | to mini spacecrafts to Alpha Centauri.

02:36:55.160 | And they literally believe that they're going to be able

02:36:58.120 | to get spacecraft over to Alpha Centauri

02:36:59.960 | like four light years away by like the 2060s.

02:37:03.360 | Now, I mean-

02:37:04.200 | - By traveling close to the speed of light, yeah.

02:37:05.480 | - Exactly, like, so the way it works is, you know,

02:37:08.200 | you have these light sails,

02:37:09.240 | like you basically take these as a spacecraft

02:37:10.920 | and you shine a laser at it and the laser is insanely strong,

02:37:13.880 | quickly accelerated at a hundred Gs,

02:37:17.000 | no, I think it was 10,000 Gs

02:37:18.720 | until it gets to 20% of the speed of light.

02:37:20.840 | And then, you know, it goes on your merry way, right?

02:37:22.880 | So if you want to be in, like,

02:37:27.480 | personally explore the Alpha Centauri system

02:37:30.080 | within like two centuries or one century,

02:37:33.560 | then, you know, being a robot is like

02:37:37.480 | by far the most practical way to do it

02:37:39.320 | 'cause there's no way that a human being

02:37:40.800 | can survive 10,000 Gs.

02:37:42.440 | So it's definitely interesting long-term,

02:37:45.160 | but at the same time,

02:37:47.240 | there's definitely a lot of like psychological hangups

02:37:50.040 | and a lot of like deep philosophy

02:37:52.040 | that we'll just have to grapple with to get there.

02:37:55.640 | - I think what it hangs on the topic

02:37:57.920 | of whether we can convert consciousness

02:37:59.880 | into an engineering problem.

02:38:01.360 | So like, is consciousness tied to our biology?

02:38:05.160 | Because the moment we can convert consciousness

02:38:07.720 | into a digital form,

02:38:09.080 | then we can send it with that light sail

02:38:11.840 | to Alpha Centauri.

02:38:12.800 | Until then, a robot is not carrying anything

02:38:16.360 | except maybe some basic knowledge like Wikipedia.

02:38:18.560 | It's not carrying the flame of human consciousness.

02:38:21.600 | I have high hopes for converting consciousness

02:38:25.600 | into an engineering problem.

02:38:27.520 | In fact, I think it's not as difficult as people think.

02:38:30.200 | - I agree with that.

02:38:31.560 | I'm definitely in the camp that consciousness

02:38:33.920 | is a property of the algorithm

02:38:35.920 | and not a property of brain structure.

02:38:38.680 | The other fun, like the kinds of philosophical things

02:38:41.520 | we'd have to grapple with is like,

02:38:43.680 | once you upload yourself, like you can hit Control + C.

02:38:46.160 | You know, like it wouldn't be lovely

02:38:48.480 | to have like 10 copies of a little experiment

02:38:50.760 | and then like we could just interview everyone.

02:38:53.400 | - So this is, I mean, this is,

02:38:54.800 | I have to ask this question.

02:38:56.200 | It's a difficult one, which,

02:38:58.480 | I don't think it'd be wonderful, first of all.

02:39:00.800 | - Sure.

02:39:02.560 | - So in the following way,

02:39:04.320 | and this has to do with immortality as well,

02:39:06.360 | there's something about scarcity that creates value.

02:39:11.360 | Or there's a bunch of philosophers,

02:39:13.400 | Viktor Frankl, Bernard Williams, Ernest Becker,

02:39:16.280 | they argue that death or the scarcity of life

02:39:20.200 | creates meaning.

02:39:21.400 | The reason we, life is beautiful,

02:39:24.440 | the reason so many moments of experience

02:39:27.680 | of love or delicious food,

02:39:31.640 | all those things are made delicious

02:39:34.480 | because they're finite, because they end,

02:39:36.920 | and because we don't have that many of them.

02:39:39.680 | And there's a kind of worry that

02:39:41.540 | if we extend the human lifespan,

02:39:43.800 | if we achieve immortality,

02:39:45.520 | or if we, God forbid, clone me,

02:39:50.080 | multiple times, then you lose the richness

02:39:52.920 | of what it means to have this life,

02:39:55.320 | to have this experience.

02:39:57.000 | Is that worry you at all?

02:39:58.480 | Do you think there's some aspect to which

02:40:00.320 | death does in fact give meaning to life?

02:40:02.840 | - I guess the one historical parallel,

02:40:05.480 | and this might be a bit unfair,

02:40:06.960 | is that there have been philosophers

02:40:09.120 | that have said things like,

02:40:11.360 | war gives meaning to human collectives,

02:40:14.520 | and the struggle for supremacy

02:40:16.800 | between nations and races

02:40:18.840 | is this big driver of progress

02:40:21.040 | that ensures that everyone strives to be their best.

02:40:25.200 | And of course, this viewpoint got into the head

02:40:28.840 | of a crazy Austrian guy,

02:40:30.000 | and 20 years later, his soldiers

02:40:31.440 | were shooting at my grandparents.

02:40:33.240 | So, these days we don't really have that,

02:40:36.880 | but yet life still feels meaningful.

02:40:39.460 | We've still found other ways to,

02:40:41.320 | there's still a striving for technological progress,

02:40:47.160 | there's still a striving for self-improvement in general,

02:40:52.160 | and it turns out that you don't actually need

02:40:55.320 | to have existential conflicts in order to have that.

02:40:58.760 | Now, maybe you need conflict,

02:40:59.880 | but we have other kinds of conflict, right?

02:41:01.280 | Like we have competition between businesses,

02:41:03.680 | competition between political ideologies,

02:41:05.420 | competition between projects.

02:41:07.560 | And so, these are,

02:41:09.400 | whatever the psychological needs are,

02:41:12.720 | they're just our substitutes for it.

02:41:14.520 | So, I guess, yeah, so if we,

02:41:17.240 | trying to say, I feel like once we start living

02:41:21.920 | to the age of 200, then I'm just intuitively expecting

02:41:26.920 | that we'll see substitutes emerge in the same way.

02:41:30.800 | - Yeah, we'll create conflicts of other sorts

02:41:35.700 | that lead to less human suffering than wars do.

02:41:38.880 | Like we'll just start playing Diablo 4, 5, 6,

02:41:42.440 | 'cause you die in video games.

02:41:44.200 | So, maybe we'll get some of the inkling of scarcity

02:41:48.440 | through the activities we partake in

02:41:50.400 | as opposed to our own body dying.

02:41:52.400 | I mean, I feel shitty when I,

02:41:54.080 | I remember in Diablo 3, you can play in hardcore mode,

02:42:00.320 | where if you die in the game, your character's dead.

02:42:03.080 | So, maybe we'll get the richness of,

02:42:07.440 | like that we currently get from life

02:42:09.520 | by having little artificial versions of ourselves that die.

02:42:12.960 | Interestingly enough, as I've just personally

02:42:15.760 | spent more time in this world,

02:42:17.120 | I've started realizing that there is a concept

02:42:19.520 | of real finiteness that still exists,

02:42:23.880 | and it might even still be a thing that provides meaning

02:42:25.880 | that doesn't require anyone to actually die.

02:42:28.160 | Like, for example, how many people from middle school

02:42:32.160 | or even high school, yours,

02:42:34.920 | do you still talk to regularly?

02:42:36.640 | - I happen to be close friends with four or five of them.

02:42:39.560 | - Okay, well, in my case, the answer is zero

02:42:41.440 | for middle school and two for high school.

02:42:43.000 | - But you're right.

02:42:43.840 | - Right.

02:42:44.680 | - It dropped.

02:42:45.520 | - Exactly, it dropped a lot.

02:42:46.360 | - Close to zero.

02:42:47.200 | - And so, there's a lot of these just,

02:42:49.480 | like relationships that end up being very finite.

02:42:52.600 | A person changes their,

02:42:54.800 | I feel like a person changes enough of their worldview

02:42:57.160 | after 25 years.

02:42:58.200 | Was there even a study about this?

02:42:59.600 | Something like a person and themselves 25 years later

02:43:03.080 | are about as different as like two different people

02:43:06.640 | or something like this.

02:43:08.000 | So, yeah, like I mean, just like you can have conflict

02:43:10.880 | without bloodshed.

02:43:11.720 | I think you can have finiteness

02:43:14.760 | and even the necessary sorrows of finiteness

02:43:18.520 | that give meaning without like literally

02:43:20.760 | anyone having to end their life.

02:43:22.760 | - And hopefully, if we do extend our life,

02:43:24.640 | we'll figure out ways to extend the period of time

02:43:27.920 | where there's neuroplasticity

02:43:30.280 | to where we could change our worldviews

02:43:33.160 | continually throughout that time

02:43:34.740 | so you can have these different phases of life.

02:43:38.800 | - I thought it would be fun to hear you speak a little Russian.

02:43:42.360 | - Yes, of course.

02:43:44.160 | - How did your Russian roots help you?

02:43:47.280 | - That's an interesting question.

02:43:50.520 | - What can you say in Russian about that?

02:43:52.600 | - What can I say about my Russian roots?

02:43:55.760 | When I just look at other projects,

02:44:00.760 | other people in the blockchain industry,

02:44:07.800 | sometimes when I just look at what Russian people do,

02:44:12.560 | what other people do,

02:44:14.320 | I can sometimes feel that these people

02:44:19.320 | who are Russian,

02:44:21.760 | there's something that feels like me,

02:44:26.760 | but I don't know how to explain it.

02:44:31.280 | - You think there's,

02:44:33.320 | so for people who don't speak Russian,

02:44:35.640 | that Vitalik said that there is something

02:44:40.240 | to the spirit of the people that are Russian

02:44:42.240 | that are working in the cryptocurrency world

02:44:44.960 | that's a little bit different

02:44:46.800 | and it's something that connects

02:44:50.160 | to some kind of aspect of your own self,

02:44:53.080 | some kind of roots there.

02:44:54.480 | It's kind of interesting.

02:44:56.600 | Do you think that there's,

02:44:58.440 | does it make you sad that there's these two different worlds

02:45:01.640 | that are sort of in part disconnected by language?

02:45:06.640 | And I'm sure the same could be the case with China

02:45:09.840 | and other parts of the world,

02:45:11.680 | where the language slows the transmission

02:45:16.480 | of the beauty of the culture

02:45:18.240 | in a certain kind of way where you can't truly collaborate.

02:45:21.400 | Like you can all speak English,

02:45:23.200 | you're collaborating on maybe a technical level,

02:45:25.840 | but you're not collaborating on the level

02:45:28.400 | of some deep human connection.

02:45:30.680 | Do you see that being able to speak both languages?

02:45:34.160 | - There's definitely benefits, I think,

02:45:35.880 | to be able to speak multiple languages.

02:45:39.000 | And once you can, right?

02:45:41.680 | You discover that even your mindset changes

02:45:45.000 | while you're speaking in one language versus the other.

02:45:47.520 | Like people have told me this,

02:45:48.640 | like when I speak Russian, I sound more like,

02:45:52.280 | I guess like to the point and pragmatic.

02:45:54.400 | When I speak Chinese, I sound more cute.

02:45:56.440 | When I speak English, I'm something else.

02:45:59.160 | I guess there's definitely like a richness

02:46:05.960 | that you're missing if you're only

02:46:08.280 | in one of these language bubbles,

02:46:10.560 | but I guess the arguments on the other side would be that,

02:46:14.960 | if everyone spoke the same language,

02:46:16.560 | then like there would just be one bubble, right?

02:46:19.560 | This is the challenge, I think.

02:46:21.160 | Like if there are actually benefits

02:46:24.400 | to having cultural diversity

02:46:25.680 | and you definitely don't want the entire world

02:46:27.600 | to be too conformist.

02:46:29.040 | And well, one of the interesting things about crypto

02:46:31.800 | is that it's just a culture that actually like manages

02:46:34.800 | to somehow have its uniqueness

02:46:37.920 | and even preserve its independence

02:46:40.200 | from all of these surrounding countries,

02:46:43.000 | despite being embedded in all of them.

02:46:45.000 | - So it spans outside of the geographic boundaries

02:46:48.800 | and language in some ways does as well.

02:46:51.040 | And the way these cultures, these bubbles are created,

02:46:54.560 | I mean, they overlap in interesting ways.

02:46:56.360 | It's almost like a hierarchy

02:46:57.480 | and the same as the case of the crypto world.

02:47:00.040 | There's communities associated with each cryptocurrencies,

02:47:03.520 | there's communities within those communities and it's-

02:47:06.880 | - Yeah, I mean, I think like,

02:47:08.520 | it's definitely sad whenever these groups

02:47:10.320 | are fighting each other.

02:47:12.520 | And like, it's definitely good for them to,

02:47:16.160 | like if people can cooperate more,

02:47:19.720 | but at the same time,

02:47:21.200 | like just having like groups of people

02:47:24.480 | that have different kinds of life experiences,

02:47:27.200 | like there's definitely something to benefit from that.

02:47:30.280 | - So let me ask one last question.

02:47:32.000 | I don't think I asked you last time,

02:47:33.840 | the ridiculous question about the meaning of life.

02:47:37.480 | Dostoevsky said, "Beauty will save the world."

02:47:40.200 | (speaking in foreign language)

02:47:43.880 | Some people believe money is a big part of happiness

02:47:46.840 | and you've turned, first of all, you've made a lot of money,

02:47:50.360 | you turned away a lot of money,

02:47:51.920 | you turned away a lot of power.

02:47:53.940 | So you're a fascinating person to ask,

02:47:56.320 | what do you think is meaning to life?

02:47:58.320 | - The thing that I've realized with money

02:48:01.360 | as I have experienced both having a little of it

02:48:05.560 | and having a lot of it is that the benefit of,

02:48:10.560 | you can get the most out of money if you think of it,

02:48:15.640 | not as something that like lets you do and have more things,

02:48:18.840 | but as something that lets you worry about fewer things.

02:48:22.200 | If your savings are just non-zero at all,

02:48:28.400 | then you don't have to worry as much about losing your job.

02:48:31.360 | And if you feel like you have a job

02:48:35.160 | that just like really conflicts with your values,

02:48:37.000 | then if you have even six months saved up,

02:48:39.120 | that just makes it easier for you to say,

02:48:40.520 | bye-bye, I'm going to do something else.

02:48:42.720 | If you have more money, then you can not worry

02:48:47.720 | about even what you're doing

02:48:51.560 | needing to be profitable at all.

02:48:53.800 | Once you get more money,

02:48:55.000 | then you can choose transportation options

02:48:59.320 | and food options that just have less hassle in your life

02:49:02.520 | and allow you to be lazier.

02:49:04.360 | So this aspect of just reducing troubles

02:49:09.360 | and opening up room for other things,

02:49:14.280 | I think is a big part of it.

02:49:16.400 | If you instead think of money as being this positive

02:49:20.240 | or this thing that gives you stuff

02:49:22.480 | and you try to derive meaning from the stuff,

02:49:25.840 | I think that's much more likely to be a road

02:49:29.280 | to basically squandering that opportunity.

02:49:32.320 | So, yeah, and I guess my philosophy on that

02:49:35.200 | is definitely more subtractive than additive there.

02:49:38.480 | - But once you have enough money

02:49:39.960 | that you don't have to worry about the money,

02:49:41.720 | you're burdened with another question, which is of meaning.

02:49:45.080 | I mean, do you think there's meaning to it all?

02:49:48.000 | Or it seems like your own life,

02:49:50.800 | you're trying to build cool stuff

02:49:54.920 | that alleviates some level of suffering in the world.

02:49:59.360 | - Well, I mean, one way to think about it is like,

02:50:02.960 | think back to how you thought about life

02:50:05.160 | when you were in school.

02:50:06.680 | In school, it's interesting to think about,

02:50:09.080 | because in a lot of ways,

02:50:11.000 | it's just totally outside of bounds

02:50:14.000 | of the kinds of systems that are,

02:50:16.400 | like social systems that we live in as adults,

02:50:19.560 | or maybe not, like maybe things like academia

02:50:21.640 | are intended to replicate parts of school.

02:50:23.840 | First of all, school is very totalitarian.

02:50:25.960 | You have to follow the teacher's instructions,

02:50:30.600 | the bulk of your schedule is like forced

02:50:32.520 | to be in particular areas.

02:50:33.920 | And we can control

02:50:36.080 | real you from leaving the grounds

02:50:41.240 | during this period of time,

02:50:43.960 | assign a lot of homework.

02:50:45.280 | But at the same time, also,

02:50:47.080 | school is a bit of a post-scarcity utopia

02:50:50.320 | in that you just don't have to worry

02:50:51.680 | about getting resources for yourself.

02:50:53.640 | And we've both lived through 12 years of that.

02:50:57.800 | So, what does that say about us?

02:50:59.680 | And I think, like,

02:51:01.880 | in one thing of aspect, obviously,

02:51:04.320 | is that in,

02:51:05.720 | it does, like, there's definitely an easiness

02:51:09.960 | to living life if all of your decisions are made for you.

02:51:13.040 | And one of the challenges of adulthood, I guess,

02:51:17.760 | is moving to this world where all your choices

02:51:21.840 | are much more self-directed,

02:51:23.040 | and you just have to learn to live and deal with that.

02:51:27.000 | - Yeah, dealing with the burden of freedom.

02:51:29.440 | - Yeah. - Makes some sense.

02:51:30.840 | - Actually interesting, because,

02:51:34.400 | in some ways, I feel like even my first five years

02:51:38.880 | of doing Ethereum things,

02:51:41.440 | my life was not even all that self-directed

02:51:43.480 | because a lot of it was just responding to obligations.

02:51:47.480 | Like, someone said, "Oh, come to speak

02:51:49.480 | "at this event in Korea."

02:51:51.120 | Okay, "Come to speak at this thing in Taiwan."

02:51:53.000 | Okay, "Oh, for Ethereum to launch,

02:51:57.040 | "we need this particular piece to be done and tested."

02:52:00.840 | Okay, "Work on that."

02:52:01.760 | Right, "We need a proof-of-stake algorithm.

02:52:04.800 | "Work on that."

02:52:05.800 | And the last year of COVID life,

02:52:09.760 | like, basically, I was holed up in Singapore

02:52:13.520 | for much of it, right?

02:52:14.400 | And it gave me a lot more alone time.

02:52:16.560 | You know, I had much less travel.

02:52:18.160 | And that was definitely a very new

02:52:19.760 | and interesting experience for me.

02:52:21.560 | - Would you characterize it by sadness,

02:52:25.000 | melancholy, hope, dreaming, like, innovative period?

02:52:30.000 | Like, how would you characterize that alone time?

02:52:33.320 | - Some of all five.

02:52:34.680 | Definitely some self-discovery.

02:52:36.520 | I definitely did, like, take this,

02:52:40.120 | make this very deliberate decision that, like,

02:52:42.200 | okay, I have this time and I'm going to, like,

02:52:46.120 | actually make something meaningful out of it.

02:52:48.920 | So, like, one example of the things I did

02:52:50.880 | is I just, like, actually started listening

02:52:54.560 | to audio books and podcasts much more.

02:52:57.480 | Like, just this year, I basically kind of discovered

02:53:00.440 | that the podcast space is real for the first time, I guess.

02:53:03.560 | Like, before that, you know,

02:53:04.640 | there would be things that I would get interviewed for,

02:53:06.360 | but I was not really kind of, like, mentally incorporated.

02:53:11.000 | I did not mentally incorporate this idea

02:53:13.200 | that, like, podcasts are a thing

02:53:14.960 | that you can go listen to.

02:53:16.320 | And this year I did, like, my friend,

02:53:19.760 | Carl LaFleur, one of the optimism people,

02:53:22.920 | recommended Hardcore History to me.

02:53:24.480 | And so I went ahead and I just listened

02:53:26.000 | to all the hardcore histories.

02:53:27.680 | And then after that, you know,

02:53:29.720 | listened to, like, Ted Luxfried bids

02:53:31.560 | and then a bunch of others.

02:53:33.040 | And after that, I also got into audio books.

02:53:37.080 | Oh, I listened to the entire,

02:53:40.560 | the Rise and Fall of the Third Reich,

02:53:42.120 | the whole thing, 45 hours.

02:53:44.640 | That was fascinating.

02:53:45.760 | - So what, let me ask about that,

02:53:47.240 | 'cause Dana's going to love hearing this.

02:53:48.720 | I'm going to tell him to tell.

02:53:50.520 | Do you have a period of history,

02:53:52.960 | whether it's Dan or in general,

02:53:54.960 | that you draw for your own life,

02:53:57.040 | like, kind of thinking about the world,

02:53:58.760 | about human nature that you go to?

02:54:00.600 | Is it World War II?

02:54:01.800 | Is it Wrath of the Khans, the Genghis Khan?

02:54:06.080 | Is it some other more ancient history?

02:54:09.140 | Is it World War I?

02:54:10.360 | Is there something that kind of echoes with you

02:54:12.680 | in the voice of Dan or anyone else that you connect to?

02:54:17.240 | - I feel like the 1930s and '40s are fascinating

02:54:20.160 | because they force you to really grapple

02:54:22.120 | with the question of where does evil come from?

02:54:26.560 | The sort of mental puzzle that I've always had in my head

02:54:30.240 | is on the one hand, things like the Holocaust happened,

02:54:34.960 | but on the other hand,

02:54:36.440 | if you just go and have a coffee with people,

02:54:39.360 | then 100 times out of 100, everyone just seems so nice.

02:54:42.640 | - Yeah, exactly.

02:54:44.960 | - Yeah, how do you kind of reconcile

02:54:47.160 | the macro and the micro there?

02:54:49.040 | And that's the sort of thing that's very difficult

02:54:53.200 | if you don't have a lot of, I guess,

02:54:58.200 | the right kind of personal experience,

02:55:00.320 | like, especially if your personal experience

02:55:02.140 | starts off being sheltered, like it was for me, right?

02:55:04.560 | Like, I know the stereotype

02:55:06.560 | is that the nerds get bullied in school,

02:55:08.120 | but like, actually for me, in my school experience,

02:55:10.560 | was just being treated with kindness by everyone.

02:55:12.880 | And so that definitely made it harder to understand things.

02:55:17.260 | I remember actually being pretty blindsided

02:55:19.760 | when I started Ethereum, and then within six months,

02:55:22.400 | there started being fights over like,

02:55:24.280 | who would get more shares

02:55:25.880 | if Ethereum turned out to be a company.

02:55:27.800 | And then I suggested we should just make it be a nonprofit,

02:55:30.560 | and somehow that ended up upsetting people.

02:55:32.660 | So the fascinating thing for me is that,

02:55:38.600 | like I've been, you know,

02:55:40.040 | obviously reading and listening to the history,

02:55:42.080 | and then at the same time,

02:55:43.080 | just like observing things happening in the crypto space.

02:55:46.920 | And so one of my interesting,

02:55:50.580 | like mental intuitions that I've gotten

02:55:52.740 | is that I think like most evil doesn't come out of greed,

02:55:56.900 | it comes out of fear.

02:55:58.740 | And like one example of this in Ethereum lands, right,

02:56:03.740 | is like, I think the part of Ethereum history

02:56:08.340 | where I thought that the Ethereum community

02:56:09.820 | was at its lowest,

02:56:10.660 | and even when I personally was at my lowest,

02:56:12.740 | I mean, if you go back to the Dow fork in 2016, right?

02:56:16.540 | So, you know, the Dow hack happens,

02:56:17.980 | and then we made this controversial decision

02:56:19.580 | to change the Ethereum protocol.

02:56:22.020 | And we, you know,

02:56:25.860 | then there was that Ethereum Classic split.

02:56:28.300 | And as soon as that Ethereum Classic split happened,

02:56:32.540 | you know, there was like a lot of anger everywhere.

02:56:34.980 | And there started especially being anger

02:56:38.340 | when the price of ETC started like taking up, right?

02:56:41.540 | So this was the time when Ether started off being $13,

02:56:45.340 | and Ethereum Classic started at zero,

02:56:46.980 | but then suddenly there was this one day

02:56:48.940 | when like ETH dropped to 12.5,

02:56:50.980 | ETC went up to 0.5,

02:56:53.420 | and then they dropped more.

02:56:55.300 | And people were saying things like, you know,

02:56:58.140 | oh, this whole thing,

02:56:59.660 | Ethereum Classic is just a like a sign up by,

02:57:02.700 | you know, the Bitcoin community

02:57:04.100 | and just the wealthy Bitcoiners trying to destroy Ethereum.

02:57:06.980 | And like in the back of my mind,

02:57:08.980 | I knew that that wasn't entirely true.

02:57:11.060 | Like there were definitely were Bitcoiners,

02:57:12.620 | but at the same time,

02:57:13.660 | like I think blaming political,

02:57:16.980 | like internal or blaming disagreements

02:57:19.580 | on foreign interference, right?

02:57:20.980 | Like this is the sort of thing that, you know,

02:57:22.460 | like countries, governments do all the time.

02:57:25.660 | Like it's a very convenient excuse, right?

02:57:28.540 | Because it allows you to just like blame these things

02:57:31.460 | that are happening on the foreigners

02:57:32.860 | and avoid actually grappling with the facts that like,

02:57:36.580 | well, no, actually you have people

02:57:37.980 | in your very own community who just disagree with you

02:57:40.340 | and have a different belief.

02:57:41.780 | And I think, you know,

02:57:44.060 | I feel like the Ethereum community,

02:57:45.380 | like during that time did not do a very good job

02:57:48.180 | of grappling with that.

02:57:49.020 | And I feel like I during that time

02:57:50.700 | did not do a very good job of grappling with that.

02:57:53.020 | And so there was a lot of like blaming the Bitcoiners.

02:57:56.220 | There were also even a lot of people calling for us

02:57:59.140 | to use trademark law and like basically sue exchanges

02:58:02.540 | and like try to prevent them from listing Ethereum Classic.

02:58:05.820 | And like, to me, that was very unethical, right?

02:58:07.620 | Like this,

02:58:11.180 | like basically using the government as a weapon

02:58:14.260 | to try to attack the other cryptocurrency

02:58:17.260 | and like destroy it as like goes completely against them,

02:58:20.220 | you know, the ideals of freedom and, you know,

02:58:21.900 | like things that at least in theory

02:58:23.940 | we're supposed to stand for.

02:58:25.700 | But, you know, like in that particular time,

02:58:28.980 | like basically what was happening was that, you know,

02:58:31.380 | the ETC price was rising and at the same time,

02:58:33.620 | the ETH price was dropping in lockstep.

02:58:36.140 | And there were a lot of Bitcoin people basically saying,

02:58:39.060 | "This is the end of Ethereum."

02:58:40.340 | And I think a lot of people really were afraid

02:58:42.340 | that Ethereum would be just like completely destroyed

02:58:45.060 | or as a result of this.

02:58:46.100 | And so like--

02:58:47.860 | - That's where the anger came from.

02:58:48.860 | - Exactly, that's, yeah, exactly.

02:58:50.460 | It came from the fear and like that's what I like

02:58:53.580 | allowed people to rationalize

02:58:55.340 | like in abandonment of principles

02:58:57.100 | that I think they would not have accepted

02:58:59.580 | in other circumstances.

02:59:01.860 | And I definitely, like to some extent,

02:59:05.540 | played along with this myself, right?

02:59:06.980 | And I do definitely regret that to some extent.

02:59:10.220 | Well, I definitely regret like the excesses completely.

02:59:14.820 | But so that, and then obviously, you know,

02:59:18.620 | Bitcoin block size war, similar sort of stuff happens.

02:59:21.660 | So like that insight was interesting

02:59:26.660 | because like it does mentally make a lot of sense, right?

02:59:30.700 | Like when you're actually afraid that, you know,

02:59:33.060 | unless you act in some way that, you know,

02:59:34.820 | your entire world is going to collapse.

02:59:36.300 | Like it's much easier to just rationalize, you know,

02:59:38.980 | forgetting your principles and doing whatever you have to

02:59:41.060 | to just save the specific thing that you care about.

02:59:44.260 | - It feels like the right thing to do,

02:59:47.020 | the brave thing to do is in the face of fear

02:59:51.820 | to still have compassion, to still have love

02:59:54.620 | as opposed to hate.

02:59:56.940 | So the darkest moments, the toughest moments

03:00:00.780 | of human history are those where fear is everywhere.

03:00:04.820 | And despite that, like the way to get out of that

03:00:09.820 | is through love, not giving into the fear.

03:00:15.020 | And again, that's the lesson that you draw

03:00:17.540 | from all those moments of history.

03:00:19.240 | Yeah, well, I like you have in terms of those coffee

03:00:24.740 | and the kindness that people have,

03:00:26.180 | it does seem that everybody has the capacity for evil

03:00:29.500 | and everybody has the capacity for love

03:00:31.580 | and you just have to create mechanisms and incentives

03:00:35.220 | that prioritize the latter over the former.

03:00:38.580 | But Alec, you're one of the most interesting people

03:00:41.300 | I've gotten a chance to talk to.

03:00:42.900 | Thank you so much for talking to me.

03:00:45.540 | I hope we get a chance to talk again.

03:00:47.660 | I hope I can at least be as some small part,

03:00:50.540 | this would be awesome in a podcast with you and Dan Carlin.

03:00:53.540 | That would be an awesome conversation.

03:00:55.440 | Thank you so much for doing so much

03:00:59.460 | incredible technical innovation

03:01:01.940 | that inspires the computer scientists,

03:01:04.900 | the economists, inspires the world

03:01:07.140 | and what technology can do.

03:01:08.980 | And now with longevity, I do hope we live a very long time

03:01:13.980 | and play Diablo to make that long time fun.

03:01:19.740 | Thank you so much for talking to me.

03:01:21.020 | - Thank you too, Alexis, it was great.

03:01:23.500 | - Thanks for listening to this conversation

03:01:25.020 | with Vitalik Buterin.

03:01:26.260 | A thank you to Athletic Greens, Magic Spoon,

03:01:29.580 | Indeed, Four Sigmatic and BetterHelp.

03:01:33.040 | Check them out in the description to support this podcast.

03:01:35.940 | And now let me leave you with some words

03:01:38.820 | from Nelson Mandela.

03:01:40.940 | "When a man is denied the right to live the life

03:01:43.420 | "he believes in, he has no choice but to become an outlaw."

03:01:48.420 | Thank you for listening and hope to see you next time.

03:01:51.860 | (upbeat music)

03:01:54.440 | (upbeat music)

03:01:57.020 | [BLANK_AUDIO]

Vitalik Buterin: Ethereum 2.0 | Lex Fridman Podcast #188

Chapters