Transcript
00:00:00 The following is a conversation with Vitalik Buterin,
00:00:03 his second time on the podcast.
00:00:05 Vitalik is the cofounder of Ethereum
00:00:07 and one of the most influential people
00:00:09 in cryptocurrency and technology broadly defined.
00:00:13 Quick mention of our sponsors,
00:00:15 Athletic Greens, Magic Spoon, Indeed,
00:00:18 Four Sigmatic, and BetterHelp.
00:00:20 Check them out in the description to support this podcast.
00:00:24 As a side note, let me say that Ethereum, Bitcoin,
00:00:27 and many other cryptocurrencies
00:00:29 have been taking a wild ride of prices going up and down
00:00:33 in the past few months.
00:00:35 To me, the prices were never as important as the ideas,
00:00:38 both technical and philosophical.
00:00:41 Cryptocurrency has the potential to empower billions
00:00:43 of people to participate in the global economy
00:00:46 in a way that resists the manipulation
00:00:48 by centralized power.
00:00:50 Also with smart contracts, layer two technologies,
00:00:54 data pools, NFTs, and of course,
00:00:56 integration of artificial intelligence
00:00:58 into the whole thing, we have the opportunity
00:01:01 to build tools and worlds that transform physical
00:01:04 and digital life as we know it,
00:01:06 hopefully minimizing the suffering in the world
00:01:09 and maximizing the fun.
00:01:12 This is the Lex Friedman podcast
00:01:14 and here is my conversation with Vitalik Buterin.
00:01:19 Let’s first talk about Shiba Inu, if we can.
00:01:23 Also known as Shiba Token, code SHIB,
00:01:27 for context, Shiba Inu was created in August 2020,
00:01:31 modeled off of Dogecoin by the anonymous founder
00:01:34 known as Ryoshi.
00:01:37 On May 10th this year, it had a market capitalization
00:01:42 of over 13 billion.
00:01:45 And maybe you can explain this, but in a crazy move,
00:01:48 you were given half of SHIB’s total supply.
00:01:52 You burned, a.k.a. destroyed 90% of it.
00:01:58 That’s worth $6.7 billion.
00:02:03 And you donated 10%, that’s worth 1.2 billion at the time
00:02:09 to an India COVID 19 relief fund,
00:02:13 saying you don’t want to be the locus of this much power.
00:02:17 This is fascinating.
00:02:20 Why and how were you able to walk away
00:02:23 from this much money and this much power?
00:02:26 So I should probably start by giving some of the backstory
00:02:31 around these coins and this concept of giving me coins.
00:02:35 So first of all, Shiba Inu, as you said,
00:02:38 is this kind of knockoff of Dogecoin, right?
00:02:40 And Dogecoin was this initial kind of fun coin
00:02:44 that was created back, I think, around 2014 or so.
00:02:47 And it was just created by Jackson Palmer
00:02:50 who put it out as a joke for a couple of hours
00:02:52 and a community formed around it.
00:02:53 And at the beginning, people didn’t take it very seriously.
00:02:57 I actually remember putting about $25,000 into Doge
00:03:01 sometime around 2016.
00:03:02 And I just remember thinking to myself,
00:03:05 okay, how am I going to explain to my mom
00:03:08 that I just invested $25,000 into Dogecoins?
00:03:12 And what even are Dogecoins?
00:03:14 The only interesting thing about this coin
00:03:16 is that there’s a logo of a dog somewhere.
00:03:19 But of course, that ended up being one of the best
00:03:21 investments I’ve ever made and it did really well.
00:03:24 And then at the end of 2020, Elon Musk, of course,
00:03:28 started talking about Dogecoin and the market cap
00:03:31 just shot up to about $50 billion.
00:03:35 Actually, it shot up multiple times, right?
00:03:37 Like the first time it went up from about 0.8 cents
00:03:40 to about like 7 cents.
00:03:42 And this just happened all in one day.
00:03:44 And I remember this was when I was still in Singapore
00:03:48 in the middle of COVID and I saw that the price
00:03:53 just went up by 1000% and I was like,
00:03:56 oh my God, my Doge is worth like a lot.
00:03:59 And so I immediately called up some of my friends
00:04:02 and told them to like drop everything and scramble.
00:04:05 And I sold half the Doge and I got $4.3 million,
00:04:09 donated the proceeds to give directly.
00:04:11 And a few hours after I did this,
00:04:13 the price dropped back down from about 7 cents to 4 cents.
00:04:16 So I managed to sell the Doge at the top
00:04:18 and I remember just that feeling
00:04:20 like I was such an amazing trader.
00:04:22 But then of course, the price went up from 4 cents
00:04:24 then to 7 and then 50 and just like Doge becoming
00:04:28 this big phenomenon where there’s even a lot of people
00:04:32 that have heard of Doge that have not heard of Ethereum
00:04:34 is just like something even I wasn’t predicting, right?
00:04:36 And so after that, of course, we have Doge
00:04:38 and then people are thinking, well,
00:04:41 if the leading DOG token is worth $50 billion,
00:04:43 then surely the second largest DOG token deserves
00:04:47 at least seven or 8 billion, right?
00:04:49 Like, I feel like that’s the kind of what the mindset
00:04:52 of these Shiba people is.
00:04:54 So that of course, they did this other gimmick, right?
00:04:57 Where they gave me half the Shiba token supply.
00:05:00 They were actually not the first projects to do this.
00:05:03 So around the end of 2020,
00:05:06 there was this weird project called Teller.
00:05:08 It’s like T E L L O R.
00:05:10 I think they’re a chain link competitor
00:05:12 or something like this.
00:05:13 But I remember they just like dumped $50,000
00:05:16 worth of their token into my wallet.
00:05:18 And then they had their Twitter army
00:05:20 just like basically run around saying,
00:05:22 look, look at Vitalik’s wallet, Vitalik holds Tellers.
00:05:24 He’s one of us, he’s a supporter.
00:05:26 And as soon as I discovered this,
00:05:27 I just like publicly sold the Teller tokens on Uniswap.
00:05:31 And this created a bit of a Twitter splat.
00:05:34 Now, the Shiba people were more clever.
00:05:36 The Shiba people, instead of dumping to that wallet,
00:05:39 they dumped to my cold wallet, right?
00:05:41 So in a cryptocurrency, right,
00:05:43 there’s this concept of like cold wallets and hot wallets.
00:05:45 Basically, like the thing that actually owns your money
00:05:49 is like this 80 digit number called a private key, right?
00:05:52 And a hot wallet is when that private key
00:05:54 is just stored in memory on your computer,
00:05:56 on your phone, really easy to access.
00:05:58 Cold wallet means it’s either written down
00:06:01 on a piece of paper or it’s on a computer
00:06:04 that’s just never accessed the internet, right?
00:06:07 So cold is very inconvenient,
00:06:08 but cold is also much more secure, right?
00:06:10 Because even if that computer has some viruses on it,
00:06:13 like it’s like air gapped,
00:06:15 it’s not actually going to be able to upload it.
00:06:17 So this cold wallet and like all the money
00:06:21 is out of the cold wallet,
00:06:22 so it’s safe for me to talk about my setup now, right?
00:06:24 But it was a laptop that was sitting in Canada.
00:06:27 And I also had two pieces of paper
00:06:30 where I wrote down two numbers
00:06:32 on those two pieces of paper.
00:06:33 One was with me, one was in Canada.
00:06:35 And if you add those two numbers together,
00:06:37 you get the private key.
00:06:38 So because of COVID travel restrictions,
00:06:41 and this cold wallets in Canada,
00:06:44 like it’s very difficult for me to actually access it, right?
00:06:48 And I’m not sure if they knew this,
00:06:49 maybe they just got lucky,
00:06:51 but basically they sent a lot of these dog tokens
00:06:55 into this wallet where it was very difficult
00:06:59 for me to access it.
00:07:00 But then I saw these dog tokens,
00:07:02 I saw more and more people talking about them.
00:07:04 And then at some point I realized that like,
00:07:06 hey, these things are worth billions of dollars.
00:07:09 And like, no, there’s lots of really good things
00:07:11 that you could do with that amount of money.
00:07:13 And it would actually be a waste to just like see it go.
00:07:16 So I made the decision that like,
00:07:18 I would actually power through
00:07:20 and figure out how to like safely,
00:07:23 like basically get my private key.
00:07:24 I actually had to call up my family,
00:07:27 tell them to read out their number
00:07:29 off of their piece of paper.
00:07:30 I entered that into a fresh laptop
00:07:34 that I bought from Target.
00:07:35 Then I put in my other number on my piece of paper,
00:07:38 added the two numbers together on the computer,
00:07:40 there’s the key.
00:07:41 And at the same time, like just scrambled for two days,
00:07:45 setting up a new wallet
00:07:47 where I could move my ETH to safely,
00:07:48 like getting people to be multisig partners,
00:07:50 just like doing all sorts of like stuff
00:07:53 that 10 years ago you would expect
00:07:56 to just be part of a cyberpunk science fiction novel,
00:07:58 but now it’s all real.
00:07:59 So you’re doing this all by yourself, essentially.
00:08:03 Most of it by myself.
00:08:04 So you have to keep it secret.
00:08:05 Right, and I needed my family to actually like go
00:08:09 and read the number on their piece of paper.
00:08:12 And then in my new multisig wallet,
00:08:15 like there’s other people that are signatories,
00:08:19 but I’m obviously not gonna reveal any details beyond that.
00:08:22 So I did this, right?
00:08:24 And I actually managed to like get the private key,
00:08:28 make the first transaction that would just move all my ETH
00:08:30 to the multisig wallet so it’s safe.
00:08:32 And then second transact,
00:08:34 put the private key on my main computer,
00:08:36 then started going in and just selling some
00:08:39 of the dog tokens and then just like giving them
00:08:41 to these different charities.
00:08:43 Now, at the time I actually did not even like have any idea
00:08:49 of how much you would be able to get, right?
00:08:50 Because like on paper, the dog tokens are $7 billion,
00:08:53 but like in reality, it’s a very liquid market.
00:08:56 Are you gonna crash it after you sell 1 million worth
00:09:00 or are you gonna crash it after 10 million?
00:09:03 Might you actually be able to get like an entire 200 million?
00:09:06 I had no idea.
00:09:08 So I definitely was just over the mindset,
00:09:12 like, okay, I mean, I’ll sell a bit,
00:09:14 maybe I get some ETH and then donated some ETH
00:09:17 to give well, donated some to other groups.
00:09:19 And then, okay, have some dog tokens.
00:09:21 Like I don’t have an easy ability to sell more myself,
00:09:23 but then I’ll just like give them to these groups
00:09:25 and like, hopefully they’ll do good things with them.
00:09:29 It was actually, I actually donated at 20%
00:09:32 then dumped 80%.
00:09:33 Yeah, so the COVID India group got one batch
00:09:38 and then there’s another group that got another batch.
00:09:40 And I don’t wanna say who they are
00:09:42 cause I think that they wanna announce themselves
00:09:44 at some point.
00:09:45 Sure.
00:09:46 Yeah, but you can see the fact
00:09:48 that these transactions were made on the blockchain,
00:09:50 but it was just very interesting and unexpected
00:09:57 and just an insanely crazy situation.
00:10:00 It’s been a couple of weeks.
00:10:02 First of all, thank you for helping me hang up some curtains.
00:10:06 This is a first for the podcast
00:10:08 and shows that you’re a truly a special person
00:10:13 to be willing to help.
00:10:14 But now a couple of weeks later,
00:10:16 do you regret any aspect of that decision?
00:10:20 I’m sure there is some things
00:10:21 that I probably could have done better.
00:10:23 Like I was actually talking to some of these charities
00:10:27 and I was impressed by just how much money they managed
00:10:30 to get out of selling some of these coins.
00:10:32 So I probably could have done better
00:10:35 by just talking more with the traders
00:10:38 and actually ensuring that they can do a better job
00:10:43 of maximizing the value of all of them.
00:10:48 But it was a very stressful time
00:10:52 and I did have to act quickly.
00:10:53 Like I did manage to make a lot of the donations
00:10:57 before, a few days before the great crypto crash happened.
00:11:01 So it was, it’s difficult to,
00:11:06 obviously there’s parallel universes in which I did better,
00:11:08 but at the same time,
00:11:10 there’s also lots of parallel universes
00:11:12 where because I hesitated more
00:11:14 and tried to spend more time thinking I missed
00:11:16 the opportunity.
00:11:17 So on that, it’s like a luck of the draw
00:11:20 and I’m just happy that everything was able to turn out
00:11:25 as well as it did.
00:11:27 But psychologically, you mentioned stress.
00:11:30 How hard was it?
00:11:32 It was stressful, right?
00:11:33 I think, well, one of the really stressful parts
00:11:35 was just the fact that I had to basically move
00:11:39 all of my funds, including the 325,000 ether
00:11:42 from one cold wallet into another hot wallet,
00:11:45 or sorry, into another multi SIG wallet.
00:11:48 And maybe the multi SIG wallet had a bug in it.
00:11:50 Maybe there’s like some mistake I’ll make in the middle
00:11:53 that causes the funds to get lost.
00:11:55 You know, that part was stressful.
00:11:58 And I was definitely stressing out for two days.
00:12:01 I mean, triple checking the new wallet.
00:12:03 I even did a bit of an audit of the code myself.
00:12:05 I wrote my own JavaScript to DAP to make confirmations
00:12:10 because Gnosis Safe didn’t work with the status wallet well.
00:12:14 So there was definitely,
00:12:16 that whole thing was definitely a bit of a marathon.
00:12:19 I was also a kind of definitely a bit worried
00:12:23 about or uncertain, I guess, how the public
00:12:26 and including the coin communities
00:12:28 would perceive the whole thing.
00:12:31 But I was actually impressed.
00:12:33 Like I, for every poster that was saying like,
00:12:36 no, you know, why did Vitalik like rug pull on us?
00:12:40 He was, his wallet was supposed to be a burn address.
00:12:44 You know, there’s like 10 people that are like,
00:12:46 oh, you know, I thought I was just in this
00:12:49 because it’s a fun pyramid gambling thing.
00:12:52 But instead I ended up being part of this, you know,
00:12:54 great public good thing for humanity.
00:12:56 And that’s like even more amazing.
00:12:58 So the amounts of that that I got was very impressive.
00:13:03 So, you know, all in all, you know,
00:13:05 I think the dog people did great.
00:13:07 The dog people.
00:13:08 Is there something you can extend
00:13:10 to the bigger picture of it
00:13:12 in the principles you apply to making this decision?
00:13:15 Is there some principles, philosophies
00:13:18 that you apply also to the decisions you make
00:13:22 around Ethereum?
00:13:24 I think a big one for me is just this idea
00:13:28 that crypto, you know, isn’t just an opportunity
00:13:32 to give people like slightly better ways
00:13:35 to save value in all of these things.
00:13:37 Like it’s also an opportunity to like basically create
00:13:42 these like new digital institutions
00:13:44 that could serve the public good in new ways.
00:13:47 And that’s something that I’ve been interested in
00:13:50 for a long time.
00:13:51 I actually even have this article in Bitcoin Magazine
00:13:55 back in 2014, where I basically suggested this idea
00:13:58 that, you know, you would have coins that represent causes
00:14:00 and like people would just like buy and accept those coins
00:14:03 because they support those causes.
00:14:05 So I think it’s called markets, institutions, and currencies,
00:14:09 a new form of social incentivization or something like that.
00:14:11 And I’m sure you can find it and throw it in the links.
00:14:14 So that was interesting to kind of see becoming real.
00:14:19 And like in general, I think, you know,
00:14:21 public goods are very important
00:14:23 and on the internet, public goods are even more important.
00:14:26 Like every single Lex Friedman podcast is just on YouTube
00:14:30 and no anyone can go and see it.
00:14:31 Like there’s no way for you to like, you know, sell it
00:14:35 and so that some people can see it,
00:14:37 but then other people can’t see it.
00:14:38 Like, you know, you could do that,
00:14:40 but then you’d obviously be reducing your impact.
00:14:42 So thank you for making the amazing Lex Friedman podcast
00:14:47 so freely available.
00:14:48 Well, that’s actually a tense thing is how do you do it
00:14:51 in a way that’s not controlled in a centralized fashion?
00:14:55 Cause actually YouTube feels free and open,
00:14:59 but it nevertheless is one company
00:15:00 making centralized decisions.
00:15:01 And the first time I realized YouTube is not forever
00:15:05 is when a lot of the Joe Rogan experience library
00:15:10 was pulled from YouTube as part of the Spotify deal.
00:15:13 And it made me realize we need to,
00:15:17 it’s like the realization that fiat money is centralized
00:15:20 is realizing that, you know, this is not forever
00:15:25 and you might want to come up with schemes to distribute it,
00:15:28 to decentralize the control of it
00:15:31 in a way that audio for podcasts is just an RSS feed.
00:15:34 Exactly.
00:15:35 And I think one of the kind of philosophical things
00:15:38 that I hope to achieve is kind of decouple
00:15:40 the concept of public goods,
00:15:42 which are incredibly important
00:15:44 and are the lifeblood of modern civilization
00:15:46 from the idea that there is or can be
00:15:50 one central organization that represents the public
00:15:53 and like perfectly understands and can impose their idea
00:15:57 of what is the good, right?
00:15:58 Like it’s, when people talk about public goods,
00:16:02 it just often comes with this baggage of, you know,
00:16:05 either centralization or conformism.
00:16:07 And I think like it doesn’t have to, right?
00:16:09 Like often the most important public goods
00:16:12 are the ones that are created by, you know,
00:16:14 the crazy individualists that disagree with everyone else.
00:16:17 So trying to make this kind of synthesis
00:16:21 where you combine the values of decentralization
00:16:24 and the values of open source,
00:16:26 but you’re not naive about it.
00:16:29 And like, you know, you realize that
00:16:31 for these things to be produced,
00:16:33 there needs to be a way for it to be sustainable.
00:16:36 There needs to be some way of supporting people
00:16:38 who are working these projects.
00:16:39 But at the same time,
00:16:40 you want to avoid that turning into
00:16:44 a vector of centralization,
00:16:45 like trying to sort of get all of the good things
00:16:49 without the bad things.
00:16:50 To me, that’s a big part of sort of
00:16:55 what my grand experiment in crypto is about.
00:16:58 And like, we are doing things
00:17:00 in different kinds of things for this, right?
00:17:02 Like there’s the Gitcoin Grants quadratic funding
00:17:05 in the Ethereum ecosystem.
00:17:07 There’s obviously these dog coins
00:17:10 that just happens, I guess, accidentally.
00:17:14 There’s other projects that, like for example,
00:17:17 you know, Uniswap has their Uniswap DAO
00:17:21 that just has a huge amount of funding.
00:17:22 And like, we haven’t seen yet how that’s going to be deployed,
00:17:25 but, you know, it could be potentially deployed
00:17:28 to do lots of really good and amazing things.
00:17:31 Do you see Ethereum as essentially a mechanism
00:17:36 to fight for social causes?
00:17:41 I definitely see Ethereum as being a mechanism
00:17:46 to fight for definitely some specific things
00:17:52 that are social causes.
00:17:54 Like just, you know,
00:17:57 the fact of creating an open financial system
00:17:59 that anyone can participate in
00:18:00 no matter where they are in the world,
00:18:02 that’s a social cause.
00:18:03 Just, you know, giving people the ability
00:18:05 to organize and create projects,
00:18:08 even if it’s five people in five different countries.
00:18:10 I think that kind of inclusiveness,
00:18:12 I think that’s a social cause
00:18:14 and it’s a core crypto value.
00:18:18 But then at the same time, like the other important
00:18:21 and if part of the magic of Ethereum
00:18:23 that you have to balance that against
00:18:25 is that it is also this open platform
00:18:27 where ultimately, you know,
00:18:29 the things that are on Ethereum
00:18:31 is just the things that the community makes of it.
00:18:35 Well, you kind of briefly opened the door,
00:18:37 so let’s go there.
00:18:39 When it comes to government regulation of crypto,
00:18:44 what’s the best case scenario?
00:18:46 What’s the worst case scenario?
00:18:48 In terms of, you know, as you’ve kind of mentioned,
00:18:52 Ethereum challenges the power centers of the world
00:18:57 and how do you see the interplay between governments
00:19:01 and this new technology that resists centralized power?
00:19:06 Best case and worst case.
00:19:08 The best case is that, you know,
00:19:14 blockchains continue to prosper
00:19:17 and we figure out scalability
00:19:18 so that people can actually start doing things on block,
00:19:22 like, you know, all of the amazing use cases
00:19:24 that people have been talking about
00:19:25 instead of today where a lot of the great stuff
00:19:28 gets priced out because, you know,
00:19:29 transaction fees are at five to $10
00:19:32 and then we see a lot of different amazing applications
00:19:36 happening on blockchains.
00:19:37 You know, it could be like DAO is creating new ways
00:19:41 for people to interact and organize with each other
00:19:44 and new ways for artists to get funded
00:19:46 and just all sorts of these amazing things
00:19:50 and there’s just enough public support
00:19:55 and just enough people that see that, you know,
00:19:57 look, crypto is clearly doing a lot of good things
00:20:01 and, you know, there are definitely areas
00:20:03 where there’s tensions,
00:20:04 but in those areas where there’s tensions,
00:20:08 like, there could be some kind of creative
00:20:10 and interesting approaches that get figured out, right?
00:20:13 Like, you know, the concept of corporate taxes,
00:20:16 for example, right?
00:20:17 Like, you know, that would disappear as a revenue stream
00:20:21 if theoretically corporations just all get replaced by DAOs
00:20:23 but, you know, like maybe there’s some other creative way
00:20:28 by which DAOs themselves can kind of be code,
00:20:34 you know, have some kind of encoded governance
00:20:36 that ensures that they have at least some kind of bias
00:20:41 towards serving the global public good
00:20:43 and, you know, maybe DAOs can do enough of that
00:20:47 that people are happy with it.
00:20:48 And, you know, there are going to be things
00:20:51 that people are unhappy about.
00:20:52 There’s always gonna be the people
00:20:53 that, you know, wants to surveil everyone
00:20:55 but if the kind of effect of crypto
00:21:01 from just empowering people is greater than that
00:21:04 and greater than that in a way
00:21:05 that people can just easily see,
00:21:07 then, you know, that would be a good scenario, right?
00:21:09 And we’ll just become kind of incorporated and accepted
00:21:13 the same way as happened with the internet.
00:21:16 But in the worst case scenario would, of course,
00:21:19 be just like people suddenly, you know,
00:21:23 flipping and going into moral panic mode
00:21:25 and just, you know, oh my God,
00:21:27 like this technology is used by like, you know,
00:21:29 insert bad group over the day.
00:21:31 And then I don’t think governments have the ability
00:21:33 to ban crypto to the extent of just complete
00:21:36 like preventing blockchains from existing
00:21:39 but they definitely have the ability
00:21:40 to really marginalize it, right?
00:21:42 Like if you just ban all exchanges,
00:21:45 like in ban all links from the Fiat ecosystem to crypto
00:21:48 and, you know, you ban all kind of mainstream employers
00:21:51 from accepting or paying in cryptocurrency,
00:21:54 then like you can successfully like turn it into a,
00:22:01 like, you know, a fairly kind of niche countercultural thing
00:22:03 that has much less impact than otherwise would.
00:22:07 So it’s somewhere between the good scenario
00:22:09 and the bad scenario.
00:22:10 I’m obviously hoping for the good.
00:22:12 Well, that’s interesting also the tension
00:22:14 between governments and companies.
00:22:17 Like if you have a bunch of billionaires
00:22:19 or a bunch of companies like Tesla investing in Bitcoin
00:22:22 and then governments resisting that,
00:22:24 it’s interesting who wins out in that worst case scenario.
00:22:27 And almost when companies and rich, quote unquote,
00:22:34 respectable people embrace cryptocurrencies,
00:22:37 Bitcoin, Ethereum, so on, even the dot coins,
00:22:41 it’s almost sends a signal to everybody else
00:22:44 that this is a revolution that’s here to stay.
00:22:49 On this one little tangent that you brought up,
00:22:52 this is almost an outdated idea, but it’s still with us,
00:22:55 which is cryptocurrencies are used for illegal activity,
00:22:59 for drugs, for crime, and so on.
00:23:02 Is there some sense that worries you
00:23:05 that if cryptocurrency, if Ethereum runs the world,
00:23:11 then making money from crime will be easier?
00:23:17 There’s always that possibility, but like at the same time,
00:23:20 I think if you look at, you know, the world as a whole
00:23:23 and like the way all the other technological trends
00:23:26 are going, like, you know, in person surveillance
00:23:28 is just going up every year, right?
00:23:30 Like if you commit a crime in, you know, meat space,
00:23:34 it’s getting harder and harder to get away with it.
00:23:36 So like, you know, if you wants to do something,
00:23:40 and this is something that’s just like happening
00:23:42 as a result of, you know, just better technology
00:23:45 and information transparency,
00:23:46 like a lot of it’s hard to prevent even if you really tried.
00:23:51 So the world where like things go dark to such an extent,
00:23:57 you know, as the police hawks sometimes like to say,
00:24:01 to such an extent that like, you know, oh my God,
00:24:04 the criminals are committing crimes with impunity
00:24:06 and we can’t see anything, like that just seems unlikely.
00:24:09 But, you know, on the other hand,
00:24:11 like the world where there just, you know,
00:24:16 is no privacy, for example, or the world where there just
00:24:21 like is no ability to kind of act outside of the confines
00:24:28 of, you know, mainstream institutions,
00:24:30 like that’s something that’s more realistic
00:24:34 and that seems like something that could lead
00:24:37 to a lot of kind of a lot of scary things, right?
00:24:40 And like, even from a government’s point of view, right?
00:24:42 Like I think governments over the last few years,
00:24:45 a lot of them, they’re very worried about sovereignty.
00:24:47 You know, they’re worried about like,
00:24:49 if their country is economies and, you know,
00:24:53 social environments are just completely dependent
00:24:55 on basically foreign tech companies controlled
00:24:58 by foreign governments, like, you know,
00:24:59 governments are not on team government, right?
00:25:01 It’s like, you know, the Indian government is on,
00:25:04 you know, team India, then the Russian government
00:25:06 is on team Russia and so forth, right?
00:25:08 So like, you know, they don’t want the US to be able
00:25:12 to like have this big backdoor into everything.
00:25:14 So, I mean, I do think that a balance is needed,
00:25:17 but at the same time, I do think,
00:25:24 I guess I definitely like worry more
00:25:28 about the possibility that just like without things
00:25:35 to like crypto kind of acting outside of institutions
00:25:38 becomes too impossible.
00:25:40 And I don’t even necessarily mean outside of governments,
00:25:42 even just, you know, outside of corporations,
00:25:44 like becomes too impossible.
00:25:45 And there’s just like terrible things
00:25:46 that come as a result.
00:25:48 I mean, if things going in the other direction,
00:25:50 like it obviously is a risk, but no,
00:25:54 at the same time, I think in the longterm,
00:25:56 like a crypto can potentially even like offer defenses
00:26:01 as much as attacks against that sort of thing.
00:26:03 Yeah, many throughout history,
00:26:05 many of the most destructive things came
00:26:07 from centralized institutions versus sort of
00:26:10 from the people operating in the shadows.
00:26:13 And, you know, I’ve been talking to a bunch
00:26:15 of psychedelics folks that people doing researches
00:26:18 like Rick Doblin in Johns Hopkins,
00:26:21 there’s a lot of exciting research on psychedelics.
00:26:23 And one thing you could say about operating
00:26:26 at the edge of legality,
00:26:28 it could actually accelerate the adoption
00:26:32 of particular things like whether it’s marijuana
00:26:36 or psychedelics, they can help people out.
00:26:39 It’s almost accelerates the policy.
00:26:41 It forces the policy to catch up
00:26:43 to where the people stand.
00:26:44 So there’s a positive way of doing things
00:26:47 that are in the gray area of legality
00:26:49 and creating a market that allows people
00:26:51 to in a safe way be able to participate
00:26:55 in this gray area of legality.
00:26:57 The other thing to keep in mind, of course,
00:26:58 is that the set of like the kinds of things
00:27:01 that just like payment processors as companies
00:27:03 try to restrict you from is much larger
00:27:06 than the set of things that’s illegal, right?
00:27:08 Like part of that is because they wanna be
00:27:10 super conservative and like the more layers you have,
00:27:12 the more they’re like conservative
00:27:14 because they’re scared of what the layer below them
00:27:17 will do to them.
00:27:18 Sometimes they have their own moral opinions
00:27:21 of various kinds.
00:27:23 They go after lots of people, right?
00:27:24 Like they make life really hard for sex workers,
00:27:27 for example, psychedelics, as you mentioned,
00:27:30 there’s a lot of activity,
00:27:34 even including stuff that is totally legal
00:27:37 that just there’s this like shadow
00:27:40 like PayPal credit card governments
00:27:42 or whatever you wanna call it.
00:27:43 And that makes it just hard to participate in this stuff.
00:27:47 So I think like reducing the number of intermediaries
00:27:50 is definitely normally a good thing.
00:27:54 All right, let’s talk about one of the most exciting
00:27:58 technologies like technically, philosophically,
00:28:01 like socially, financially in every way,
00:28:05 which is Ethereum 2.0.
00:28:07 There’s a million things to talk about,
00:28:10 but step one is probably a good thing to do,
00:28:14 which is can you briefly summarize your vision
00:28:17 how Ethereum 2.0 will make Ethereum more scalable,
00:28:21 secure and sustainable?
00:28:23 Sure, so I think recently we’ve actually been
00:28:27 kind of deemphasizing the ETH 2.0 branding, I guess.
00:28:30 So the reason behind that was that originally
00:28:33 we envisioned something more like a big grand event
00:28:37 where all the good things would happen at the same time
00:28:39 and it would be a new blockchain,
00:28:41 and it would be a new protocol
00:28:43 and people would have to take a lot of effort
00:28:45 to migrate over.
00:28:46 But later we’ve slowly changed the roadmap
00:28:50 over to something that’s much more incremental, right?
00:28:53 So proof of stake happens kind of over time
00:28:56 and then sharding gets added over time
00:28:57 and all of these features get added over time.
00:28:59 And so the experience for just a regular Ethereum user
00:29:02 still feels very seamless, right?
00:29:04 It’s like maybe a little bit more complex
00:29:06 than the hard forks that we’ve already done
00:29:09 from a user’s point of view, but not by that much, right?
00:29:13 So the big two things that are happening, right?
00:29:17 These are what used to be considered
00:29:19 the two flagship features of ETH 2.0
00:29:21 and now they’re just the flagship features
00:29:23 of the next devolution of Ethereum,
00:29:27 as proof of stake and sharding.
00:29:31 So proof of stake is a consensus algorithm.
00:29:34 It’s a, or a consensus mechanism, I should say.
00:29:38 The difference is that like an algorithm
00:29:40 is something that you run by yourself.
00:29:41 A mechanism is like interactions between people
00:29:45 and it could even include incentives and all of that.
00:29:48 So a consensus mechanism,
00:29:52 so by which nodes in the network agree on
00:29:56 which blocks came in, which transactions came in,
00:29:58 what order, make sure that once a block gets accepted,
00:30:01 it can’t get reverted and all of these things
00:30:04 that we expect from a blockchain.
00:30:06 So existing blockchains, including Bitcoin,
00:30:08 including the Ethereum of today,
00:30:10 and including a lot of them, they use proof of work, right?
00:30:13 So the reason why we need proof of anything
00:30:17 is because they serve this function that I call
00:30:22 an economic civil resistance.
00:30:25 So that’s obviously a big word for,
00:30:28 especially if you’ve never heard of symbols before,
00:30:30 but like the basic idea is, right,
00:30:32 that you have a network and you have lots of computers
00:30:34 that agree on like which blocks to accept.
00:30:36 And sometimes you get two blocks that get published
00:30:39 at the same time and you just have to agree on an order.
00:30:41 So there has to be some kind of voting game.
00:30:44 But then the question is, well, in this voting game,
00:30:46 who gets to vote, who gets to participate?
00:30:49 Now, you can’t say one person, one vote, right?
00:30:52 The reason why you cannot say one person, one vote
00:30:54 is because you need some kind of like authority
00:30:57 or some kind of mechanism to say who the humans are.
00:31:00 And if you don’t have that,
00:31:02 then a bad guy could just come in with a virtual machine
00:31:05 or with a computer that has on it 10 billion virtual machines
00:31:08 that have 10 billion virtual nodes.
00:31:11 And then just like say, look, I’m 99% of the network,
00:31:13 I should control everything.
00:31:15 So to prevent this, what proof of work and proof of stake
00:31:19 both do is they basically say, well, the weight of your vote,
00:31:23 like how much influence your votes have in the consensus
00:31:27 is proportional to like what quantity
00:31:29 of economic resources you bring in.
00:31:31 So in the case of proof of work,
00:31:33 you prove what economic resources you have
00:31:35 because your economic resources are computers
00:31:37 and you prove that you have them
00:31:38 by just running them 24 seven
00:31:40 using these hash algorithms, right?
00:31:42 So this does solve the problem, right?
00:31:45 Because in order to attack the network,
00:31:47 you have to come in with more computers
00:31:50 and more money invested into computers and electricity
00:31:53 than the rest of the network puts together.
00:31:55 And that’s extremely expensive.
00:31:57 In proof of stake, instead of relying on people
00:32:00 with computers that are just constantly cranking out
00:32:03 hashes 24 seven, as you’re like a unit of economic resources,
00:32:08 you just use like holdings of coins inside the system, right?
00:32:11 So all of these blockchains,
00:32:12 they have some kind of coin in them.
00:32:14 Bitcoin has Bitcoin, Ethereum has ether,
00:32:17 they all have a coin.
00:32:18 So why not just use that as the economic resource
00:32:22 that you’re using to measure participation.
00:32:25 So that’s like the core distinction
00:32:29 between proof of work and proof of stake.
00:32:31 I like proof of stake
00:32:32 and I’ve liked proof of stake for many years,
00:32:35 basically because like it just requires
00:32:38 much less ongoing resource consumption, right?
00:32:41 Like with proof of work,
00:32:42 you have to like actually go and buy these physical computers
00:32:45 and these days, they have specialized hardware,
00:32:49 ASICs, application specific integrated circuits.
00:32:51 You have to go produce them and you have to go buy them.
00:32:54 And unless you have millions of dollars,
00:32:56 you have to buy them from one of these other people
00:32:58 who creates them and those other people often end up
00:33:01 taking a huge cut of the profits themselves.
00:33:03 And then you have to plug them in,
00:33:06 you have to just burn all of this electricity
00:33:09 that’s just running 24 seven.
00:33:11 So it consumes a huge amount of energy, right?
00:33:14 And not just energy, it also,
00:33:17 just to create the hardware, right?
00:33:19 Like people focus a lot on energy,
00:33:20 but like actually about half the cost of proof of work
00:33:23 mining is the cost of the hardware.
00:33:25 So hardware is a very big deal too.
00:33:28 And you need this really big and powerful,
00:33:32 very specialized hardware,
00:33:33 another kind that fills up these big warehouses.
00:33:35 So proof of stake,
00:33:36 you don’t really need that much electricity,
00:33:38 you just need just a little bit to run a regular computer.
00:33:42 You can run proof of stake validators on computers
00:33:45 that you already have.
00:33:47 So it’s just much less resource intensive.
00:33:52 And like, this is good for a few reasons, right?
00:33:53 Like one is, you know,
00:33:55 the kind of environmental rationale that, you know,
00:33:57 you’re not breaking the environment.
00:33:59 The second is that you’re not taking away electricity
00:34:03 and like other resources from other people.
00:34:06 I mean, like right now there’s,
00:34:07 I think just today I saw a story about like Iran
00:34:10 wanting to shut down some Bitcoin mining
00:34:12 because it was just grabbing up so much electricity
00:34:15 that it was, you know, outbidding the nearby towns
00:34:17 and they just didn’t have enough.
00:34:19 And then there was like Chia,
00:34:22 the one that’s doing proof of like hard disk mining
00:34:24 basically is just like grabbing up so many hard disks,
00:34:27 there’s a shortage, right?
00:34:28 So that’s the second reason.
00:34:29 And then the third more selfish reason is that
00:34:32 because participating in consensus
00:34:34 does not require so much energy expenditure,
00:34:37 you don’t need to pay people as much to participate, right?
00:34:40 So like Bitcoin and Ethereum,
00:34:42 they both issue somewhere around 4% of the total supply
00:34:46 every year right now to miners.
00:34:48 So Ethereum is about 4.7 million ether
00:34:50 and the current supply is about 115 million.
00:34:53 But with proof of stake,
00:34:54 like we expect it’ll be somewhere between 500,000
00:34:58 and one million per year.
00:35:00 So that means, you know,
00:35:02 the supply doesn’t have to increase so quickly.
00:35:06 So.
00:35:07 One of the pros that the people sort of argue for the proof
00:35:12 of work is that it is secure
00:35:14 because it’s much more difficult to sort of,
00:35:17 as you’ve highlighted, it’s difficult to participate.
00:35:19 Is there, what are your thoughts about the security
00:35:25 of the proof of stake mechanism?
00:35:28 Is there ways to make it secure?
00:35:30 So I think proof of stake is very secure
00:35:32 because in order to be able to attack the system,
00:35:36 you needs to have like basically as much stake
00:35:39 as the rest of the network, right?
00:35:41 So that means like right now, for example,
00:35:43 we have 5 million eth staking.
00:35:44 So you have to come up with 5 million eth
00:35:46 and then join the network.
00:35:47 And then the other, so 5 million eth is a lot, right?
00:35:51 It’s like, how much is it now?
00:35:53 Like $15 billion.
00:35:55 So that’s actually more than I believe the cost
00:35:58 of attacking the Bitcoin network.
00:36:00 And then the second thing is that recovering
00:36:03 from attacks is much easier in proof of stake
00:36:04 than in proof of work, right?
00:36:05 Because in proof of stake, you have, like, first of all,
00:36:08 we have for many kinds of attacks
00:36:10 that you do against this network,
00:36:12 we have this concept of like automatic slashing, right?
00:36:14 Which basically means that in order
00:36:16 to like revert a finalized block,
00:36:19 so if there’s one block that’s like accepted by the network
00:36:22 and you try to convince the network
00:36:23 to kind of revert that block and accept a different block,
00:36:26 in order to make that kind of attack,
00:36:28 you basically have to have your validator,
00:36:31 like a big portion of your validator
00:36:33 assigned to conflicting messages.
00:36:35 And this is something that like once these messages
00:36:38 are on the network, like you can go and prove,
00:36:39 like, look, these people did it.
00:36:41 And so we have this feature in the protocol called slashing
00:36:43 where you basically take all these people
00:36:45 who provably misbehaved and you burn their coins, right?
00:36:48 And you don’t burn anyone else’s coins.
00:36:50 Now, there are other cases, like for example,
00:36:53 if instead of reverting blocks,
00:36:55 the attack just tries to censor everyone, right?
00:36:57 Then everyone who got censored would just like
00:37:01 basically create the minority chain
00:37:02 and then the community would basically
00:37:05 have to do a soft fork, right?
00:37:06 They would just have to say like,
00:37:07 look, this chain is clearly attacking us,
00:37:09 this chain is the one not attacking us,
00:37:10 and so we’re gonna join this chain.
00:37:12 And then what happens is that on that new chain,
00:37:15 the attackers also lose a lot of coins, right?
00:37:17 So the difference between proof of stake and proof of work
00:37:20 is that in a proof of stake system,
00:37:22 like you can identify specific participants
00:37:24 and you can say, you know, these,
00:37:26 and like this isn’t like, you know,
00:37:27 a human going in and saying, I don’t like you,
00:37:29 I don’t like you, I don’t like you,
00:37:30 this is like automated, right?
00:37:32 So the slashing process is automated.
00:37:34 Yes.
00:37:35 Is there ways it can go wrong?
00:37:37 So that’s a painful process where the coins are burned.
00:37:41 It is painful, yes.
00:37:42 I think, I mean, the one big unknown, of course,
00:37:45 is like if an attack actually happens
00:37:48 and like if an attack happens that requires the community
00:37:51 to actually choose one of these minority forks,
00:37:53 then like what would the community
00:37:57 actually successfully coordinating on this look like, right?
00:37:59 Like it’s like, you know, we can talk about it
00:38:03 and we can, you know, write like science fiction novels
00:38:05 about it, but like until it’s happened,
00:38:07 you don’t really know the details of like what it looks like
00:38:09 and how difficult it is.
00:38:11 What are the channels of communication for the community?
00:38:13 If you can enlighten me a little bit, like what, you know,
00:38:18 in many ways in the political realm,
00:38:19 Twitter is often used as a way to kind of have
00:38:22 these emerging phenomena of large groups of people
00:38:25 coming to a consensus about a particular idea.
00:38:28 And then there’s battle for consensus.
00:38:30 What’s in the Ethereum community, how do people,
00:38:35 what are the sources of natural language based communication
00:38:39 that have an emergent belief structure that you would say?
00:38:43 Or is it all through money?
00:38:45 Is it all through trading that the communication happens?
00:38:48 There’s definitely talking as well.
00:38:50 I mean, like we have to agree on protocol changes somehow,
00:38:53 right, like there’s Twitter, there’s Reddit,
00:38:55 there’s GitHub, there’s all of the various Ethereum forums,
00:39:00 Ethereum magicians, Ethereum research.
00:39:02 There’s just in person communication.
00:39:05 Then there’s just kind of like the hidden web
00:39:06 of everyone talking to everyone on Telegram or Signal.
00:39:11 So it’s like some of everything, right?
00:39:14 But I think like the thing to emphasize around like,
00:39:17 can you actually come to consensus on, you know,
00:39:19 whether or not to fork the chain
00:39:21 because the attacker is censoring everyone,
00:39:23 just for example, is like everyone who’s running a node
00:39:27 is going to see almost the same thing, right?
00:39:30 Like they’re gonna be off by a few seconds
00:39:32 and like maybe they’ll be off by a few minutes,
00:39:34 they’ll disagree by a few minutes.
00:39:35 But like if it’s a serious attack, you know,
00:39:37 people are gonna know, right?
00:39:38 It’s not like one of those things where, you know,
00:39:40 oh, we’re trying to agree on like, I don’t know,
00:39:43 did Epstein kill himself or like some random political fact
00:39:48 where like in reality, no one knows a single thing
00:39:50 about what’s actually going on and they’re all speculating.
00:39:52 Like it is much more visible, right?
00:39:54 So we do have that, but you know, at the same time,
00:39:57 I’m happy to admit that like,
00:39:59 these are fairly untested mechanisms,
00:40:02 but like at the same time,
00:40:03 they’re also untested mechanisms in Proof of Work, right?
00:40:05 And like in Proof of Work, it’s even harder
00:40:07 because in Proof of Work, you don’t have the ability
00:40:09 to like identify and say, like, you know,
00:40:12 I’m going to these miners attacked
00:40:14 and so we’re not gonna let these miners in,
00:40:17 these miners did not attack, so we’re gonna keep them in.
00:40:20 Like you have to pretty much, you know,
00:40:21 either take out none of the miners
00:40:23 or you do a fork that changes the Proof of Work algorithm
00:40:26 which takes out all of the miners, right?
00:40:28 So the economics of like recovering from attacks
00:40:32 in Proof of Work, at least to me,
00:40:33 actually do seem like more unfavorable,
00:40:36 but you know, I’m sure the Proof of Work people you talk to
00:40:39 will give a very different and contradictory opinions
00:40:42 and that’s totally fine and amazing.
00:40:44 Some people describe MEV, minor extractable value,
00:40:48 as an existential risk to Ethereum.
00:40:51 What is MEV?
00:40:52 How important is it to solve MEV?
00:40:55 If it’s important, what ideas do you have?
00:40:57 Sure, how about after this one,
00:40:58 we’ll also talk about sharding because it’s amazing
00:41:01 and it’s part of you too.
00:41:01 Yes, we’ll return back to sharding
00:41:03 which is, we’ll return to the big picture
00:41:06 of the scaling problem as you mentioned.
00:41:07 I love this conversation, you know,
00:41:09 depth first search instead of breadth first.
00:41:11 So basically, okay, MEV, minor extractable value,
00:41:16 it is not different in Proof of Work and Proof of Stake,
00:41:19 right, so like if you want to call it, you know,
00:41:21 block proposer extractable value,
00:41:22 like it sounds a lot sexy, but you know,
00:41:24 we can call it BPEV instead of MEV, who cares?
00:41:27 So this is a problem in both Proof of Work
00:41:30 and Proof of Stake?
00:41:30 Yes, so the basic idea is that if you have the ability
00:41:36 to choose which transactions go into a block
00:41:39 and in what order, then you have the ability
00:41:42 to like take advantage of that position for economic gain
00:41:45 and for economic gain in a lot more ways
00:41:48 than just collecting transaction fees, right?
00:41:50 Like for example, there’s decentralized exchanges on chain
00:41:52 like Uniswap and like let’s say the price
00:41:56 of ETH versus USDC was 2,700 the previous block,
00:42:01 but then there was a bit of a market drop
00:42:03 and now it’s 2,680 where you can go on Uniswap
00:42:05 and you can just like gobble up the entire part of,
00:42:09 you know, the automated order book
00:42:10 that’s like between 2,700 and 2,680, right?
00:42:13 And that’s, and then at the same time, you like run a bot
00:42:16 and you know, you buy some ETH back at 2,680
00:42:19 and you’ve just like made about $10 of profit, right?
00:42:21 So, or well, $10 times, you know, whatever the depth is.
00:42:25 Right, so there’s lots of little things like that.
00:42:28 There’s also things that involve like front running
00:42:31 other people’s transactions.
00:42:33 So one example of this would be that if someone sends
00:42:37 a transaction that says, I don’t know,
00:42:39 buy me five ETH for whatever price that you can get,
00:42:45 then, but with a maximum of, let’s say $15,000,
00:42:50 then you can go and like, you can send each,
00:42:53 put a transaction right in front of that transaction
00:42:55 and you can like buy up that ETH first
00:42:57 and then you resell it to him at, you know,
00:42:59 $15,000 minus one, you know?
00:43:00 So there’s.
00:43:02 Then you get to make a little bit of money that way.
00:43:03 Exactly, so there’s a lot of these different
00:43:05 like arbitrage, front running, back running,
00:43:07 these different tricks that allow block proposers to.
00:43:11 To get some percentage on top, like overhead.
00:43:13 Exactly, and the reason why this is a challenge
00:43:17 is because it’s, I mean, like first of all,
00:43:21 it sometimes degrades user experience
00:43:24 because users get no less favorable trades,
00:43:27 but there are sometimes ways to like mitigate that
00:43:30 for applications, sometimes it’s not that bad,
00:43:32 but like the bigger risk that I think some people consider
00:43:35 more existential is that there’s just much more
00:43:38 economies of scale in figuring out
00:43:41 how to extract all this revenue, right?
00:43:43 Because if you’re just collecting transaction fees,
00:43:45 there aren’t really economies of scale,
00:43:47 there aren’t really benefits to centralizing, right?
00:43:49 Because it’s a very simple formula,
00:43:50 you just like grab up the transactions that pay you the most.
00:43:53 But with MEV, there’s all these sophisticated algorithms
00:43:57 and if you have lots of money,
00:43:59 then you can hire really smart people
00:44:01 to make amazing algorithms and then you can use
00:44:03 the other half of your money to get a lot of mining power
00:44:06 or a lot of stake and you get a lot of opportunities
00:44:08 to use your even better algorithms.
00:44:09 So there’s this risk that like as a result of this,
00:44:14 mining is basically, or even validating proof of stake
00:44:18 is going to centralize.
00:44:20 So I think the ecosystem is best replied
00:44:23 to this sort of risk and it’s the direction
00:44:25 where projects like Flashbots are going already
00:44:28 is if you can’t eliminate the centralization,
00:44:33 then you try to firewall it, right?
00:44:35 And the way that you firewall it is you basically say,
00:44:39 we’re going to try to deliberately create a marketplace
00:44:42 where people can just do the complicated work
00:44:45 of creating what are called bundles,
00:44:47 like bundles of transactions that are very profitable, right?
00:44:51 And then at the other side of the market,
00:44:54 you just have like block proposes reminders
00:44:56 that are just dumb notes.
00:44:57 And they go and ask the what are called searchers,
00:45:00 the bundle creators, and they just ask like,
00:45:02 hey, like how much can you give me if I put in your bundle?
00:45:05 And then they just take the highest offer, right?
00:45:07 So you sort of separate out the task
00:45:09 and you have the easy part and then you have the hard part
00:45:12 and you have like this special class of actor
00:45:14 called a searcher that does the hard part
00:45:16 and then the easy part, the people doing the easy part,
00:45:19 which is just miners and validators,
00:45:20 they kind of just talk to all the different people
00:45:24 doing the searching and they just accept the highest bidder.
00:45:27 So this is also just like an interesting example
00:45:33 of like economic design philosophy, right?
00:45:35 Like sometimes you can’t just like make centralization
00:45:38 go away, sometimes it’s inevitable,
00:45:39 but no, at least you can try to kind of contain it,
00:45:43 you can direct it or you can even sort of firewall it away
00:45:47 from core consensus,
00:45:49 the parts that really do need to be decentralized.
00:45:51 But you don’t see it as an existential risk,
00:45:53 it’s just a bit of a problem
00:45:56 that it has to be constantly dealt with.
00:45:57 It’s a risk, like there’s obviously a risk
00:46:00 that it’s a very severe problem
00:46:04 and that even this flash bots approach
00:46:06 has some fatal flaw or whatever.
00:46:08 But we’re definitely approaching it
00:46:12 with the mindset of this is a problem
00:46:14 and like, yes, we do have to do some work to solve it,
00:46:16 but we’re doing it and so far it’s being solved.
00:46:20 Okay, let’s talk about the other really, really fascinating
00:46:23 part of the future of Ethereum.
00:46:26 Let’s not call it Ethereum 2.0,
00:46:28 but the future of Ethereum
00:46:30 that also may require a hard fork,
00:46:32 I don’t know, you can correct me on this,
00:46:34 is well, broadly ideas for scaling.
00:46:39 Yes.
00:46:40 And more specifically sort of layer two
00:46:44 or layer one and two intersection ideas
00:46:48 of how to achieve scaling.
00:46:50 And at the core of that is the idea of sharding.
00:46:52 So first, what is sharding?
00:46:55 Okay, so there’s two major paradigms
00:46:59 for scaling blockchains, right?
00:47:01 As you said, layer one and layer two.
00:47:03 And layer one basically means
00:47:05 make the blockchain itself capable
00:47:07 of processing more transactions
00:47:09 by having some mechanism by which it can do that
00:47:13 despite the fact that there’s a limit
00:47:15 to the capacity of each participant in the blockchain.
00:47:18 And then layer two says,
00:47:19 well, we’re gonna keep the blockchain as is,
00:47:21 but we’re gonna create clever protocols
00:47:23 that sit on top of the blockchain
00:47:25 that still use the blockchain
00:47:26 and then still kind of inherit things
00:47:28 like the security guarantees of a blockchain.
00:47:31 But at the same time, a lot of things are done off chain.
00:47:33 And so you get more scalability that way.
00:47:36 So in Ethereum, the most popular paradigm
00:47:39 for layer two is rollups
00:47:40 and the most popular paradigm for layer one is sharding.
00:47:43 So one way to achieve layer one scaling
00:47:46 is to increase the block size.
00:47:48 Yes.
00:47:48 Block size wars, quote, unquote.
00:47:51 And you actually tweeted something about,
00:47:55 people are saying that Vitalik changed his mind about,
00:47:58 he went from being a small blocker to a big to small.
00:48:05 But you said, I’ve been a medium blocker all along.
00:48:09 So maybe you can also comment on where,
00:48:11 on the very basic aspect before we even get to sharding
00:48:14 of where you stand on this block size debate.
00:48:17 Sure.
00:48:18 So the way that I think about the trade off
00:48:20 is I think about it as a trade off
00:48:21 between making it easy to write to the blockchain
00:48:24 and making it easy to read the blockchain.
00:48:26 So when I say read, I just mean,
00:48:28 have a node and actually verify it
00:48:30 and make sure that it’s correct and all of those things.
00:48:32 And then by write, I mean send transactions.
00:48:34 So I think for decentralization,
00:48:37 it’s important for both of these tasks to be accessible.
00:48:40 And I think that they’re about equally importance.
00:48:43 If you have a chain that’s too expensive to read,
00:48:45 then everyone will just trust a few people
00:48:46 to read for them.
00:48:48 And then those people can change the rules
00:48:49 without anyone else’s permission.
00:48:51 But if on the other hand,
00:48:53 it becomes really expensive to write,
00:48:55 then everyone will move on to basically
00:48:58 second layer systems that are incredibly centralized.
00:49:01 And that takes away from decentralization
00:49:04 and self sovereignty as well.
00:49:06 So this has been my viewpoints
00:49:08 pretty much the whole time, right?
00:49:09 It’s like, you need this balance
00:49:11 and going in one direction or the other direction
00:49:12 is very unhealthy.
00:49:14 In the Bitcoin case, basically what happened
00:49:16 was that Bitcoin originally,
00:49:19 at the very beginning, it didn’t really have a block size.
00:49:22 It just had an accidental block size of 32 meg,
00:49:25 or block size limit of 32 megabytes
00:49:27 because that just happens to be the limit
00:49:29 of the peer to peer messages.
00:49:31 But then…
00:49:32 Interesting, I didn’t even know that part.
00:49:33 Yeah, but then Satoshi back in 2010
00:49:36 was worried that even 32 megabyte blocks
00:49:38 would be too hard to process.
00:49:39 So he put the limit down to one megabyte.
00:49:42 And I think the…
00:49:44 I put, you mean sneaked in there.
00:49:47 Yeah, just like made an update to the Bitcoin software
00:49:49 that made blocks bigger than one,
00:49:51 I think it’s a million bytes invalid.
00:49:54 And I think the impression that most people had at the time
00:49:58 is that this is just a temporary safety measure.
00:50:01 And over time, as we become more confident in the software,
00:50:05 that limit would be raised somewhat.
00:50:10 But then when the actual usage of the blockchain
00:50:16 started going up, and then it started going up
00:50:19 first to 100 kilobytes per block,
00:50:21 then to 250 kilobytes per block,
00:50:22 then to 500 kilobytes per block,
00:50:25 there started coming out of the woodworks this opinion
00:50:28 that no, that limit should just not be increased.
00:50:31 And then there are all of these attempts at compromising.
00:50:36 First, there was a proposal for 20 megabyte blocks.
00:50:40 Then there was the 248 proposal,
00:50:43 which is a bit ironic because the 248 proposal
00:50:46 started off being a small block negotiating position.
00:50:49 But then when the big block people came back and said,
00:50:52 hey, aren’t we gonna do this?
00:50:53 They’re like, oh, no, no, no, we don’t want them.
00:50:55 We don’t want the block size increases anymore.
00:50:57 So there were these two different positions,
00:51:01 the small blockers.
00:51:02 I think they valued one megabyte blocks for two reasons.
00:51:06 One is that they just really, really believe
00:51:08 in the importance of being able to read the chain.
00:51:10 But two is that a lot of them really believe
00:51:14 in maintaining this norm of never hard forking, right?
00:51:18 So the difference between a hard fork and a soft fork
00:51:21 is basically that in a soft fork,
00:51:26 any block that’s valid under the new rules
00:51:28 was still valid under the old rules.
00:51:30 So if you have a client that verifies
00:51:31 according to the old rules,
00:51:33 then you’ll still be able to accept the chain
00:51:35 that follows the new rules.
00:51:37 Whereas with a hard fork,
00:51:38 you have to update your code in order to stay on the chain.
00:51:43 And look, they have this belief that soft forks
00:51:48 are kind of either less coercive than hard forks,
00:51:51 which by the way, I completely disagree with.
00:51:53 I actually think soft forks are more coercive
00:51:55 because basically they force everyone who disagrees
00:51:57 to sort of go along by default.
00:51:59 But, or they have this opinion that there’s like,
00:52:06 it’s more difficult to abuse soft forks
00:52:09 to do really mean things like,
00:52:11 or that like completely violate people’s expectations,
00:52:13 like increasing the supply, which is like,
00:52:16 I think there is some truth to that.
00:52:18 So because of these reasons,
00:52:20 they just say we’re only going to do soft forks
00:52:22 and we want to just not do any hard forks.
00:52:25 And they eventually discovered this idea
00:52:27 called segregated witness that allows for like
00:52:29 a very tiny block size increase
00:52:31 to like the equivalent of about two megabytes
00:52:34 with a soft fork.
00:52:36 It’s this really like weird and devious trick.
00:52:41 Like basically what they do is they take the signatures
00:52:45 of transactions and then they put them outside of the block.
00:52:48 And then they add an extra rule that says that like every,
00:52:51 for a block to be valid,
00:52:52 the block has to come with a separate,
00:52:54 like basically extension block
00:52:56 that contains all of the transaction signatures, right?
00:52:58 So when you measure it, according to the old rules,
00:53:01 like, hey, it adds up to less than a million,
00:53:02 but actually there’s this extension block
00:53:04 that the old protocol doesn’t even know about.
00:53:06 So.
00:53:07 It’s a hack that seemed to work to in a small way
00:53:10 extend the size of the block size.
00:53:12 So the small block side was like happy
00:53:14 with these very low levels of block size.
00:53:16 And then the big block side wanted to expand to,
00:53:19 at the very least go to four megabytes,
00:53:21 then maybe go maybe eight, 20.
00:53:23 There’s disagreements within there as well.
00:53:26 I definitely was favoring the big side
00:53:29 the whole way through, as you can probably tell, but.
00:53:33 Even though, so the argument against the big
00:53:36 is that it makes things more centralized.
00:53:40 Yes, because fewer people can run a note
00:53:43 that verifies the chain.
00:53:44 And also because any of these things
00:53:46 would require a hard fork
00:53:47 and hard forks are inherently risky.
00:53:49 Do you think there’s truth to that?
00:53:51 I’m pro hard fork.
00:53:52 I think hard forks are actually like
00:53:54 in a political economic sense,
00:53:57 they’re better than soft forks.
00:53:59 Well, let’s, okay, okay.
00:54:00 I think that’s a beautiful principle as stated
00:54:05 that soft forks may be more coercive than hard forks.
00:54:10 This is not just about cryptocurrency.
00:54:13 This is about politics and life.
00:54:16 That’s fascinating.
00:54:17 So you’re okay with hard forks.
00:54:20 In fact, you think hard forks is the right way
00:54:23 to make changes because then everybody’s forced
00:54:26 to make a decision.
00:54:27 Do you accept this change or not
00:54:29 as opposed to ideas being sneaked in behind the door
00:54:32 and that decision is forced on you?
00:54:34 Exactly, yeah.
00:54:36 Okay, so, but hard forks, some people say,
00:54:39 this is when they talk about sort of Ethereum,
00:54:42 is there’s some aspect to a hard fork
00:54:44 where you’re trying to upgrade a,
00:54:46 what is it, airplane while it’s flying.
00:54:49 And.
00:54:50 I think soft forks are also upgrading an airplane
00:54:52 while it’s flying.
00:54:53 But it’s a smaller upgrades.
00:54:56 That’s, there’s some truth to that.
00:54:58 Like there’s definitely a bit more risk of like a split
00:55:03 as a result of a hard fork than as a result of a soft fork.
00:55:07 And the split is highly undesirable, right?
00:55:10 Well, it depends.
00:55:11 Like if it’s a split because of a bug, then that’s horrible.
00:55:14 If it’s a split as a result of political differences,
00:55:16 then I think like a split is better than, you know,
00:55:19 one side being forced to basically just like suck it up
00:55:23 and accept the majority position even if it really hates it.
00:55:27 Well, there’s also political connections
00:55:28 throughout the history of the United States.
00:55:30 It’s like sometimes groups of people
00:55:33 that strongly disagree with each other
00:55:35 should be forced to work it out.
00:55:38 Even if they, even when a split seems like an easy thing
00:55:41 in the short term.
00:55:42 It depends.
00:55:43 And I think like, well, for blockchains in particular,
00:55:46 the costs of people being able to like peacefully do their,
00:55:50 go off and do their own thing are much lower, right?
00:55:52 Like, you know, okay, if you have a country
00:55:54 and you have two groups, then like often enough,
00:55:58 like fighting out the new rules requires, you know,
00:56:01 a civil war requires everyone to move and so forth.
00:56:03 But no, on a blockchain, like, you know,
00:56:05 the costs are lower and so.
00:56:07 So if you were to look at the way things worked out
00:56:09 with the block size wars and there was a split,
00:56:13 what is it, Bitcoin Cash and all this?
00:56:15 In Bitcoin.
00:56:16 Yeah.
00:56:17 Would you, like you looking, putting on your historian hat,
00:56:21 you mentioned offline you like Dan Carlin.
00:56:23 So if Dan Carlin wanted to do an episode
00:56:26 on the block size wars, do you think it could’ve turned out
00:56:32 better or do you, are you okay with the way it turned out?
00:56:37 I’m definitely disappointed with what happens
00:56:40 with the block, with the big block side.
00:56:44 I think the source of my disappointment is that like,
00:56:46 one of the things that you notice when just looking at
00:56:50 like this political disagreements generally,
00:56:52 especially when you have environments where, you know,
00:56:55 they’re authoritarian or like single party dominated
00:56:57 and then there’s some opposition party
00:57:00 and the opposition often has like very legitimate grievances.
00:57:03 But at the same time, the thing you notice is that often
00:57:05 enough the opposition just sucks, right?
00:57:07 Like it just doesn’t have, you know, political capacity.
00:57:10 It doesn’t have like the ability to come up with policy
00:57:13 because it’s entire culture is like designed around
00:57:17 resisting much more than it’s designed around like,
00:57:19 you know, actually debating serious policy trade offs.
00:57:23 And I worry or I guess not so much worry
00:57:27 because it’s already happened.
00:57:28 I unfortunately think that Bitcoin Cash ended up
00:57:31 being a victim of this, right?
00:57:34 Like first, no, there was a split with Bitcoin Cash.
00:57:37 And then of course, Craig Wright came in
00:57:39 and you know, Craig Wright was this basically scammer
00:57:43 who just keeps on pretending that he is Satoshi Nakamoto,
00:57:46 the inventor of Bitcoin.
00:57:47 Hey, Craig Wright’s legal team, do you hear me?
00:57:49 Yes, I still think your client is a scammer.
00:57:52 So sue me.
00:57:53 This is definitely gonna be death for a search
00:57:55 because I gotta ask you about Craig.
00:57:56 I guess these people have been contacting me
00:57:58 and I’m trying to figure out like,
00:58:00 what is up with this human being?
00:58:02 So for people who don’t know, there’s somebody who is,
00:58:05 let’s start this Satoshi Nakamoto, who is the creator
00:58:09 of Bitcoin, who’s anonymous.
00:58:11 And actually most really big people
00:58:14 in the cryptocurrency space do not like yourself
00:58:20 and others do not dare claim that they are even
00:58:23 for fun Satoshi Nakamoto.
00:58:25 In fact, if Satoshi Nakamoto is still alive
00:58:27 and is like, if say you were Satoshi Nakamoto,
00:58:29 it seems like the thing he would do is probably
00:58:32 or she is trying to remain anonymous.
00:58:35 On the flip side of that, there’s a guy named Craig Wright
00:58:39 who continually keeps claiming that he is in fact
00:58:42 Satoshi Nakamoto and keeps suing a lot of people.
00:58:45 So on him, if we could just linger on him,
00:58:49 what do you make of this character?
00:58:52 What are we supposed to make of this character?
00:58:54 Should he be ignored?
00:58:56 Is there any possible truth to his claims?
00:58:59 What do you make of him?
00:59:01 The analogy that’s at the top of my head
00:59:03 will get a bit political, but that’s fine.
00:59:06 You’ve had Michael Malice.
00:59:07 So I guess I view Craig Wright
00:59:10 as being kind of like a Donald Trump figure
00:59:12 in that he’s not very intellectual,
00:59:15 but I think he gets a big audience
00:59:17 because he says things that play to the resentments
00:59:23 that people have and he says things
00:59:25 that people wants to hear.
00:59:27 Like in the wake of this block size war,
00:59:30 the big blockers did feel very disenchanted.
00:59:32 They felt that Bitcoin always had this vision
00:59:35 that we were supposed to just keep increasing
00:59:37 the block size and Bitcoin is peer to peer cash.
00:59:39 It says so in the white paper.
00:59:40 And then this elitist clique of core devs
00:59:43 just came in and said, no, no, no,
00:59:45 we’re gonna impose this totally different vision.
00:59:47 And if you ever want your scalability,
00:59:49 you’ll have to wait for us to create
00:59:51 this totally unproven fancy technology
00:59:53 called the lightning network
00:59:54 that works under completely different principles.
00:59:56 And they were very angry at this.
00:59:58 And I mean, I think a lot of that anger is justified,
01:00:01 but at the same time, when people are in that mental state,
01:00:07 like it’s very easy for you to just kind of like latch on.
01:00:10 And if you find someone who expresses anger
01:00:13 at the same things that you’re angry at,
01:00:15 and also like it seems like someone who’s strong
01:00:19 and seems like someone who might be good to rally around,
01:00:22 it’s very easy to just like get behind that.
01:00:24 But that extra part about it where he’s
01:00:26 Satoshi Nakamura, I don’t understand why that’s necessary.
01:00:29 I think that’s, he could have done it without that,
01:00:33 but that just, it’s a marketing strategy.
01:00:36 Like it sort of gives him more salience.
01:00:38 Like there’s other big block personalities, right?
01:00:40 Well, what’s the difference with Craig Wright?
01:00:43 He’s not just a big block personality,
01:00:45 he’s potentially Satoshi.
01:00:48 And he did say all the big block things, right?
01:00:52 Like he talked about how,
01:00:53 oh, the concept of a fee market is fundamentally
01:00:56 like economically wrong and it should be a free market
01:01:00 and you should be able to have blocks as big as you want.
01:01:02 So like he repeated all the talking points.
01:01:03 And so a lot of people were kind of sucked into that, right?
01:01:07 And so he unfortunately was able to basically dominate
01:01:12 a big part of the Bitcoin cash community for a long time.
01:01:15 And then eventually, of course,
01:01:18 more and more people started to catch on.
01:01:20 He would just say technical things
01:01:22 that are completely wrong, right?
01:01:24 Like one example of this that I remember
01:01:27 is that he mixed up the concept of 256 bits
01:01:32 and two to the power of 256 bits, right?
01:01:36 So the difference is, it’s like the difference
01:01:38 between 80 and the concept of 80 digit numbers, right?
01:01:42 And because of this, like he made this arguments
01:01:46 that said that Bitcoin’s elliptic curve
01:01:50 is friendly to cryptographic pairings.
01:01:52 Like you don’t have to understand what that is,
01:01:54 but if you want to know,
01:01:55 I have articles on both at Vitalik.ca.
01:01:58 But basically he made this like technical argument
01:02:01 that really hedged on this point.
01:02:03 And then when people pressed him on,
01:02:04 it was like, yes, but no, no, like what?
01:02:06 Look, exactly, the height is like what?
01:02:09 Two to the 256 bits.
01:02:11 That’s a very tiny amount of information.
01:02:14 No, no, no, no, two to the 256 bits
01:02:17 is more than the amount of information in the universe.
01:02:19 And like he equivocated and kind of like preyed
01:02:22 on people’s inability to understand
01:02:25 that mathematical nuance.
01:02:26 And I called him out.
01:02:27 And eventually I even called him out in person
01:02:30 at this conference in Seoul.
01:02:31 Like I just stood up and asked,
01:02:34 hey, conference organizer,
01:02:36 why are you letting this fraud speak at this conference?
01:02:39 And I remember even some big blockers at the time
01:02:42 getting angry at me.
01:02:44 But eventually they did get rid of him.
01:02:47 And then Craig, well, basically Craig Wright
01:02:50 was forced to split off
01:02:52 because the rest of the community refused
01:02:54 to accept some network change that he wanted.
01:02:56 And so then there was the BCH and BSP.
01:02:59 And then in the Bitcoin Cash community,
01:03:00 there was this drama of,
01:03:02 are they going to add a developer fund
01:03:04 where they redirect 12 and a half percent of the revenue
01:03:07 from the miners to the devs?
01:03:08 And according to the libertarian not aggression principle,
01:03:11 is this technically theft?
01:03:12 Like his understanding of the technical depths
01:03:18 of cryptocurrency was lacking in a way
01:03:20 that Satoshi Nakamoto certainly would not.
01:03:23 Yes, exactly.
01:03:24 But the point is that even after Craig Wright got expunged,
01:03:27 the Bitcoin Cash community kept having these disagreements.
01:03:30 And now after this development funds dispute,
01:03:34 there was a further split between Bitcoin Cash and ABC.
01:03:37 So the branch continues to extend.
01:03:41 So in that way, it’s disappointing
01:03:43 to see those kinds of splitting that was never resolved.
01:03:46 It is.
01:03:47 I would have definitely like wanted to see more
01:03:49 of a kind of like the principled coin
01:03:54 with like tries to be Bitcoin,
01:03:56 but follows consistent big block values.
01:03:59 But I know maybe I should just like stop expecting projects
01:04:03 that I have no involvement in to care at all
01:04:06 about what my values are.
01:04:07 And like maybe Ethereum just like is.
01:04:09 I think you have a powerful voice
01:04:13 and you can inspire other projects
01:04:14 to live up to their best possible selves.
01:04:19 Okay, so that’s the layer one approach.
01:04:25 The other layer one within Ethereum
01:04:28 is the idea of sharding.
01:04:29 Yes.
01:04:30 What the heck is sharding?
01:04:31 Okay.
01:04:32 What does the future of sharding look like?
01:04:33 Right, so to summarize that big long tangent
01:04:36 that we just went into.
01:04:37 It’s a beautiful tangent by the way.
01:04:38 It’s the basic tangent.
01:04:40 And I think like crypto is just one
01:04:42 of the most underrated aspects of crypto
01:04:44 is I think how you can like analyze the sociology
01:04:48 and the politics and the anthropology.
01:04:49 And I’m sure Dan Carlin would have fun exploring
01:04:53 the space at some point.
01:04:54 But like the core trade off, right?
01:04:56 Is that if you scale blockchains the dumb way
01:04:58 just by increasing the parameters,
01:04:59 then eventually you just make it harder and harder
01:05:01 to participate as a node and you end up with a system
01:05:04 where there’s like 20 computers running the whole thing.
01:05:07 And it’s just very centralized.
01:05:09 So sharding basically says, well,
01:05:11 instead of just increasing the parameters,
01:05:13 what we’re going to do is we’re going to change
01:05:15 the blockchain architecture in such a way
01:05:19 that each individual node in the blockchain
01:05:22 only needs to store a small portion of the data
01:05:25 and only needs to process a small portion
01:05:27 of the transactions.
01:05:28 So you can think about it as being like inspired
01:05:30 by BitTorrent, right?
01:05:31 Like on BitTorrent, there’s no such thing
01:05:33 as a BitTorrent full node that has every movie, right?
01:05:35 You know, the work is like split up among a huge number
01:05:38 of computers and like that makes sense.
01:05:40 That’s, you know, the only sane way
01:05:42 to scale a system like that.
01:05:45 And if they actually tried making a version of BitTorrent
01:05:47 that required full nodes that store every movie,
01:05:50 then, you know, it would have like zero censorship
01:05:52 resistance and it would just like, you know,
01:05:54 be dead in an instant.
01:05:56 So the challenge with taking that model
01:05:59 and applying it to blockchains, right?
01:06:01 Is that blockchains aren’t just about like spreading data
01:06:04 around, they’re about agreeing on exactly what data
01:06:07 was spread around and ensuring that everything
01:06:10 that you agree on actually is correct.
01:06:12 And so you have this paradox where let’s say
01:06:14 you want to have a system that supports 10,000 transactions
01:06:18 a second, but each computer in the network
01:06:20 can only personally verify a hundred transactions a second.
01:06:25 So how can each computer get a guarantee
01:06:28 about the other 9,900 without actually going
01:06:31 and verifying them themselves?
01:06:33 And it turns out that there are some,
01:06:37 like a bundle of different tricks that can do that, right?
01:06:40 So like one of them is just random sampling.
01:06:43 So the idea behind random sampling is like,
01:06:46 let’s say for simplicity, this is a proof of stake chain
01:06:49 and you have 10,000 validators, validators are like,
01:06:53 you know, the stakers and like for simplicity,
01:06:56 we’ll assume they all have the same number of coins, right?
01:06:57 If someone has more coins, we’ll just kind of split them up
01:06:59 and pretend they’re 10 stakers.
01:07:01 Then you do like some random shuffling
01:07:05 and you basically say, these random hundred validators
01:07:08 are assigned to validate this block.
01:07:10 These random hundred validators
01:07:11 are assigned to validate this block.
01:07:13 These random hundred validators
01:07:14 are assigned to validate this block.
01:07:16 And so each individual computer only gets assigned
01:07:19 to validate like a small piece,
01:07:21 but then the way that the information
01:07:23 about like what’s valid gets passed around, right?
01:07:25 Is that when these hundred participants validate a block,
01:07:30 they all sign a message basically saying like,
01:07:33 yes, we agree that this block is valid.
01:07:35 And then like they combine that signature into one
01:07:37 and then they broadcast that signature.
01:07:39 And then everyone else,
01:07:40 instead of verifying the blocks directly,
01:07:42 just verifies that signature, right?
01:07:44 And so if I see the signature,
01:07:46 I’m not directly convinced that that block is valid,
01:07:49 but what I am convinced of is that out of this committee
01:07:52 of this randomly selected group of a hundred validators,
01:07:56 let’s say at least 70 of them agree
01:07:58 that this block is valid.
01:07:59 And so if I trust that the majority
01:08:02 of these participants are all honest,
01:08:04 then because it’s all randomly selected,
01:08:06 the attacker can’t just like force themselves
01:08:08 into one committee.
01:08:09 And so the attacker is gonna be evenly spread out too.
01:08:13 And so if the entire set of validators is mostly honest,
01:08:17 every committee is gonna be mostly honest.
01:08:19 And so like bad blocks are not gonna go through, right?
01:08:22 So that’s like one simple form of sharding.
01:08:24 There was also other more clever things that you can do.
01:08:26 So for example, there’s this concept of a ZK snarks, right?
01:08:29 I’ll call it as your knowledge proofs.
01:08:31 So this is the idea that you can make a cryptographic proof
01:08:34 that says, I verified or I ran some complex computation
01:08:40 on this piece of data and I got this answer.
01:08:43 And so if you make these kinds of proofs,
01:08:45 then like if you see a ZK snark
01:08:47 that says some block is valid,
01:08:49 then you’re convinced that that block is valid.
01:08:51 And even if everyone in that committee is evil,
01:08:55 like they have no way of making a valid proof
01:08:58 for a bad block, right?
01:08:59 Like, because the proof itself,
01:09:00 like it is a proof that you did the computation
01:09:03 where that proof is much easier to verify
01:09:05 than just running the computation yourself.
01:09:08 And there’s once again, super awesome mathematical
01:09:14 or cryptographic magic behind making ZK snarks work.
01:09:17 But it gives you a little bit of a leg up
01:09:20 over the 51% honest assumption.
01:09:23 So it’s a little hack that improves upon the random
01:09:25 sampling thing.
01:09:26 Exactly.
01:09:27 And like, there’s other hacks, right?
01:09:28 Like there is another hack called data availability
01:09:30 sampling that allows you to make sure that the data
01:09:32 in the blocks was actually published.
01:09:35 But like, basically, like if you stack a couple
01:09:37 of these tricks on top of each other,
01:09:39 you can create a system where like I,
01:09:41 as an individual participant can be convinced
01:09:44 that everything that’s going on in this distributed
01:09:46 blockchain thing is correct without actually personally
01:09:49 checking more than like a percent of it.
01:09:51 So that’s sharding.
01:09:52 That’s sharding.
01:09:52 But the, as I understand, maybe correct me on this,
01:09:58 is in the space of Ethereum, the sharding happens
01:10:03 on some fixed number.
01:10:05 Like the split is on some fixed number.
01:10:07 I think it’s 64 is the currently sort of proposed number.
01:10:11 So how does that help scaling?
01:10:15 Is it just the fixed constant scaling by 64?
01:10:19 And is that a way to achieve those crazy,
01:10:21 the crazy amount of scaling that seems to be required
01:10:25 to use cryptocurrency for purchasing?
01:10:28 So doing like competing with credit cards
01:10:30 and Visa and so on.
01:10:31 So first, I think like the 64 can be hard forked up
01:10:34 over time.
01:10:35 So we’ve set it so that like there’s theoretically space
01:10:39 in the data structure for 1024 shards,
01:10:42 it’s just that 64 of them are turned on.
01:10:45 There are challenges with having more shards
01:10:47 because like you have to have logic that just like checks
01:10:49 and manages all of those shards.
01:10:51 And if there’s too many of them,
01:10:52 then that becomes too expensive.
01:10:54 But even still, you can improve quite a bit.
01:10:57 And then the other thing that we’re doing is
01:11:00 if what we’re getting maximum scalability
01:11:03 by combining rollups and sharding.
01:11:05 So this might be a good time to talk about rollups.
01:11:07 What are rollups?
01:11:09 Now we’re moving into layer two ideas.
01:11:11 Yes.
01:11:12 So the idea behind a rollup is basically that,
01:11:17 so instead of just publishing transactions
01:11:23 directly on chain and having everyone do all of the checking
01:11:27 of those transactions,
01:11:28 what you do is you create a system
01:11:31 where users send their transactions to some central party
01:11:36 called an aggregator.
01:11:37 And like, well, theoretically, you can have a system
01:11:40 where like the aggregator switches around
01:11:41 or where anyone can be an aggregator.
01:11:43 So it’s still like permissionless to send things.
01:11:46 Then what the aggregator does is they strip out
01:11:51 all of the transaction data that like is not relevant
01:11:55 to helping people update the state.
01:11:57 So when I say the state,
01:11:58 this is a very important kind of technical term
01:12:01 for blockchains.
01:12:01 I mean, like account balances, code,
01:12:06 like things that are like memory,
01:12:08 internal memory of smart contracts,
01:12:10 like basically everything the blockchain
01:12:12 actually has to keep track of and remember, right?
01:12:14 So you just put in,
01:12:19 you take all these transactions,
01:12:20 strip out all the data that’s not relevant
01:12:22 to telling people how to update the state.
01:12:24 And then you take the data that’s needed
01:12:26 to update the state,
01:12:27 and then you like really compress it, right?
01:12:29 So like, for example, if we say,
01:12:31 I, Vitalik, have an account that’s 0xAB58,
01:12:35 blah, blah, blah, blah, blah, and it’s 20 bytes.
01:12:37 Well, instead we can say,
01:12:38 well, I have an account that is number 1874224 in the tree.
01:12:44 And that goes down from 20 bytes
01:12:46 to just like an index and a position,
01:12:48 which is three bytes, right?
01:12:49 So you use all sorts of these fancy compression tricks,
01:12:51 and you basically just,
01:12:53 instead of publishing all these transactions,
01:12:55 you publish this like tiny compressed blob, right?
01:12:58 So the amount of data that goes on chain
01:13:00 goes down by maybe about a factor of 10, right?
01:13:02 And then the second thing is that
01:13:04 you don’t do the computation on chain,
01:13:06 instead you do the computation off chain,
01:13:08 and there’s one of two ways to do this, right?
01:13:11 One is called a ZK rollup,
01:13:12 which is you just provide a ZK SNARK that basically says,
01:13:15 hey, look, I did this computation,
01:13:17 and I have this proof that here’s, you know,
01:13:21 some hash of the result and it’s correct.
01:13:23 And then you stick it on chain,
01:13:24 and everyone verifies this one proof
01:13:26 instead of verifying all these transactions.
01:13:29 And then the other approach is called an optimistic rollup,
01:13:31 which is basically made of the scheme where,
01:13:33 like, first someone says like,
01:13:36 hey, this is what I think the result of applying
01:13:39 these transactions is.
01:13:40 And then someone else can say,
01:13:41 I disagree, the result is different.
01:13:43 And only if two people disagree,
01:13:45 do you actually just like publish all of the data
01:13:50 and run that whole block on chain.
01:13:52 So if there’s disagreements,
01:13:53 then you just like run everything on chain
01:13:55 and whoever was wrong, like loses a lot of money, right?
01:13:58 So like disagreements are very rare
01:14:00 and they’re very expensive.
01:14:01 And then a ZK rollup,
01:14:02 you don’t even rely on this like challenging game at all,
01:14:05 you just rely on a proof.
01:14:06 So the core principle is basically that
01:14:09 instead of lots of transactions
01:14:11 and everyone verifies every transaction,
01:14:14 it is you take the transactions,
01:14:16 you strip them down and compress them as much as possible,
01:14:20 then stick that on the blockchain.
01:14:22 You do need to stick something on the blockchain
01:14:24 just so that everyone else can like keep up to date
01:14:27 with the state so they know what all the contracts are,
01:14:30 what all the balances are and all of this,
01:14:31 but it’s a very small amount of data.
01:14:33 And then you use one of these other off chain games,
01:14:36 could be this optimistic game, could be a ZK snark
01:14:39 to just prove that somebody out there did the computation
01:14:43 and the result is correct, right?
01:14:44 So you’re pushing like 90% of the work off chain
01:14:47 and then, well, 90% of the data
01:14:50 and 99% of the computation off chain,
01:14:52 and then you still have 10% of the data
01:14:54 and 1% of the computation on chain.
01:14:56 And so your scalability goes up by a factor of about 100.
01:14:59 So these systems are already alive
01:15:02 for some applications, right?
01:15:05 So there’s something called loopering,
01:15:07 which is just a ZK roll up for payments, right?
01:15:10 So you can have assets inside of the loopering system
01:15:15 and you can go around and transfer them,
01:15:21 and you get like much lower transaction fees, right?
01:15:24 Like instead of $5, you’d have to pay like less than 5 cents.
01:15:28 But the only problem is that this only supports
01:15:31 a couple of applications right now,
01:15:33 like making one that supports anything
01:15:35 that you can do on Ethereum just takes a bit more work,
01:15:37 but that’s being done as well, right?
01:15:40 So like within a few months, I’m expecting fully Ethereum
01:15:44 capable roll ups to be available as well.
01:15:48 So roll ups, just summarizing,
01:15:51 do most of the work off chain,
01:15:53 put only a little bit on chain, factor of 100 scaling,
01:15:55 sharding, another factor of 100 scaling,
01:15:57 100 times 100 factor of 10,000,
01:16:00 hundreds of thousands of transactions a second,
01:16:02 and like, you know, there’s your scalability.
01:16:04 Okay, so you achieve scalability,
01:16:05 you can do a large number of transactions very quickly
01:16:08 and the cost of doing those transactions are much lower.
01:16:11 You wrote that in the long term ZK roll ups
01:16:15 are going to win in terms of layer two technology.
01:16:18 Specifically you wrote, in general,
01:16:20 my own view is that in the short term,
01:16:23 optimistic roll ups, as you were saying,
01:16:25 are likely to win out of general purpose EVM computation
01:16:28 and ZK roll ups are likely to win out for simple payments,
01:16:35 exchange and other application specific use cases,
01:16:37 just as you were saying.
01:16:39 But in the medium to long term,
01:16:40 ZK roll ups will win out in all use cases
01:16:45 as ZK SNARK technology improves.
01:16:49 Why do you think ZK roll ups are going to win
01:16:53 the big picture battle over layer two technologies?
01:16:55 So I think ZK roll ups, like once you accept
01:16:59 that the technology works are just like conceptually simpler
01:17:03 and they have nicer properties.
01:17:04 The reason is that they do not have this concept
01:17:07 of a challenge game, right?
01:17:08 Like, as I mentioned in an optimistic roll up,
01:17:10 the way that you ensure that the results are correct
01:17:13 is that you let one person submit
01:17:15 and like they just submit with no proof.
01:17:16 They just say, here’s what I think the result is.
01:17:18 And then if someone else disagrees,
01:17:20 they make their own submission.
01:17:22 And then if you have two disagreeing submissions,
01:17:23 then you actually publish it on Chase.
01:17:25 And then you see who’s right.
01:17:27 But for this to work, like you need to actually wait
01:17:30 for someone to disagree, right?
01:17:32 So like, for example, if I have an asset inside
01:17:34 of an optimistic roll up and I wants to withdraw it,
01:17:37 then I actually have to wait a week to withdraw it.
01:17:38 Because like, if the block that contains my withdrawal
01:17:43 turned out to be invalid,
01:17:44 then there needs to be space for someone
01:17:46 to disagree with it, right?
01:17:47 Whereas with a ZK roll up,
01:17:48 like you don’t need time for disagreeing
01:17:50 because you just have a proof, right?
01:17:51 As soon as a block is submitted,
01:17:52 there’s a proof and you know it’s correct.
01:17:55 So if disagreements, especially in the longterm are sparse,
01:17:59 then you don’t want to do the optimistic,
01:18:03 the game theoretic thing, you wanna do the ZK stock.
01:18:05 Right, the ZK stuff is just,
01:18:08 like you can win a ZK roll up,
01:18:09 you can withdraw immediately.
01:18:11 You don’t have to like worry about the economics
01:18:14 of proving as much, right?
01:18:15 There’s just like fewer issues.
01:18:18 The reason why ZK roll ups are not winning everywhere today
01:18:21 is because ZK stocks are still a crazy new technology,
01:18:24 right, like this is something that 10 years ago,
01:18:27 it existed only in theory and there was none in practice.
01:18:31 Then, eight years ago,
01:18:32 people were just getting excited about it
01:18:34 in Bitcoin conferences for the first time.
01:18:37 Like four years, starting four years ago
01:18:40 or three and a half years ago even,
01:18:42 that was the first time you were able to make
01:18:43 any ZK stock based anything on Ethereum.
01:18:46 And then people started making them
01:18:48 and ZK technology has only really become efficient enough
01:18:52 to do a lot of things within the past
01:18:53 maybe one and a half years.
01:18:55 So it’s new technology, it’s crazy technology,
01:19:00 it’s admittedly scary technology.
01:19:02 If you wanna learn more,
01:19:03 I also have an article about this on Vitality.ca.
01:19:06 It’s actually really, really good.
01:19:07 You’re, most of your writing, it goes,
01:19:12 it’s technical but it’s accessible.
01:19:14 I highly, highly recommend to check out Vitality’s articles
01:19:17 and blogs, whatever you call them on the website.
01:19:20 It’s brilliant summary of the work.
01:19:22 Actually, Ethereum documentation period is really good.
01:19:25 I think that’s somewhat crowdsourced.
01:19:28 That documentation is really, really accessible
01:19:30 and brilliant.
01:19:32 But let me ask about sort of other approaches
01:19:36 to layer two, like side chains.
01:19:39 So the one popular one is Polygon.
01:19:42 What are your thoughts about Polygon,
01:19:43 which is a layer two network?
01:19:48 Is it positive?
01:19:49 Is it negative for Ethereum?
01:19:51 Is it both?
01:19:52 Does it have a future?
01:19:53 Which is its own chain, but it’s using Ethereum.
01:19:58 It’s like based on Ethereum essentially.
01:20:00 Or maybe you can describe what it is.
01:20:02 So I think there’s a really big and important difference
01:20:06 in security models between rollups and side chains,
01:20:09 which is basically that rollups inherit
01:20:11 from the security of Ethereum, right?
01:20:13 So if I have coins inside of Loopring or Optimism
01:20:17 or Arbitrum or ZK Sync,
01:20:19 then even if everyone else in the world
01:20:22 who is participating in these ecosystems
01:20:25 hates me and wants to steal my money,
01:20:27 I can still personally make sure
01:20:30 that no matter what happens, I get my money out.
01:20:33 It might be a bit expensive for me to get my money out
01:20:35 and I have to do transactions on the main chain,
01:20:37 but I’ll be able to do it.
01:20:39 Whereas in Polygon, which is a side chain,
01:20:42 and so instead of being secured by Ethereum,
01:20:45 it’s also in part secured by its own
01:20:48 proof of stake consensus with its own token.
01:20:50 So if 70% of the whole,
01:20:53 or even 51% of the holders of Polygon tokens
01:20:56 wanted to take my money in Polygon, they can, right?
01:20:59 So that’s the, and like, to be fair,
01:21:03 like there aren’t even, like the supply,
01:21:06 I don’t think is even that widely distributed, right?
01:21:08 So like potentially you could,
01:21:11 this idea of 51% of the token holders
01:21:14 coming together and stealing everything,
01:21:16 like it’s not impossible, right?
01:21:19 Where does the scaling of Polygon come from?
01:21:21 Like why is it able to process much more transactions
01:21:26 than the Ethereum main chain?
01:21:28 What’s the idea there?
01:21:29 I think in part, like I imagine,
01:21:32 I’m not sure exactly what its capacity level is,
01:21:34 but like I imagine it has a higher capacity
01:21:36 because it’s a bit more willing
01:21:38 to take centralization trade offs.
01:21:40 And then another thing is that like,
01:21:43 if the Ethereum ecosystem,
01:21:44 like even if it did not do that, right?
01:21:46 If you think about an Ethereum ecosystem
01:21:48 hypothetically scaling with side chains,
01:21:49 then you would have a hundred copies of Polygon
01:21:52 and they would each have their own tokens,
01:21:54 they would each have their own chains.
01:21:55 And so even if each one of those chains
01:21:57 was only as scalable as Ethereum,
01:22:00 you could still, like the total sum of them
01:22:02 would still be a hundred times more than Ethereum.
01:22:05 Okay.
01:22:07 The thing that I want to say in Polygon’s favor
01:22:09 just to be very fair to them,
01:22:11 like I really, you know,
01:22:14 I definitely really, you know,
01:22:15 respect the work that they’re doing.
01:22:16 So, you know, start with a bit with that word
01:22:20 of not criticism caution, right?
01:22:23 Like it’s that they made this kind of deliberate trade off
01:22:28 for very pragmatic reasons,
01:22:30 which is that the Ethereum ecosystem needs to scale now.
01:22:33 And there are applications that want to do something now.
01:22:35 And, you know, if there aren’t Ethereum friendly options
01:22:38 for them, then like, they’re not going to just wait
01:22:40 peacefully and do nothing for 12 months.
01:22:42 And they’re going to go to, you know,
01:22:44 either Binance Smart Chain or, you know,
01:22:47 one of some other system or potentially something
01:22:51 that just has totally no alignment
01:22:52 with Ethereum values whatsoever.
01:22:55 But whereas, you know, with Polygon,
01:22:58 like the best thing that you can say in Polygon’s favor
01:23:00 and against optimism is that, you know,
01:23:02 optimism is not live and Polygon is live, right?
01:23:05 Like it just takes more work to create a system
01:23:08 that has these extra rollups, security features.
01:23:12 And so Polygon just said, we’re going to be the system
01:23:14 that makes the pragmatic trade off.
01:23:16 We’re going to go, you know, functionality first,
01:23:19 and then, you know, we can talk about adding back
01:23:21 the security later.
01:23:22 So I’ve talked to them and like, in principle,
01:23:25 I think they’re very, you know, open to the idea
01:23:28 of like adding more security and like becoming more,
01:23:33 becoming a rollup or at least, you know,
01:23:36 adding a Polygon chain that’s a rollup
01:23:38 at some point in the future,
01:23:39 which is definitely something I think they, you know,
01:23:41 absolutely should follow through on.
01:23:44 But like the fact that like they exist now,
01:23:47 and so, you know, applications can kind of bootstrap now
01:23:51 on a chain that, you know,
01:23:52 even though its security isn’t perfect,
01:23:53 at least it exists and people can go use it.
01:23:55 And then over time, you know, the chain matures
01:23:58 as the applications mature.
01:24:00 Like, you know, it’s, I think a very reasonable strategy
01:24:03 and I’m definitely really happy
01:24:04 that they’re part of the ecosystem.
01:24:08 Yeah, it’s kind of interesting.
01:24:09 The history of cryptocurrency has this tension
01:24:14 of really good ideas that are hard to implement.
01:24:17 So they take longer to implement
01:24:19 and ideas that are not as good, but are faster to implement.
01:24:23 This is like the story of like, you have like JavaScript
01:24:26 that basically took over the world
01:24:28 because it was quick to implement within 10 days.
01:24:31 And then like later kept fixing itself.
01:24:35 I don’t know what to make of that.
01:24:37 Sort of from an engineering perspective,
01:24:40 I’m more and more becoming comfortable
01:24:42 and accepting the fact that our whole world
01:24:44 will run a technology that’s not as good
01:24:47 as it could have been.
01:24:48 Just because the crappy solution is faster to implement
01:24:52 and it sticks.
01:24:53 What do you make of that tension?
01:24:55 I think the compromise that we’ve been taking
01:24:57 within Ethereum is like when we have to take
01:25:00 the crappy solution, we look for crappy solutions
01:25:03 that are forward compatible with becoming good over time.
01:25:07 When you build the quick and dirty thing,
01:25:10 you would still already have ideas in your head
01:25:13 about what the more complete thing
01:25:15 with all the security features added on would look like.
01:25:18 Even if it requires a hard fork?
01:25:20 Yes.
01:25:23 For example, with sharding, I think it’s likely
01:25:26 that the first version of sharding that comes out
01:25:29 is not going to have zkstarks and data availability sampling,
01:25:31 for example.
01:25:32 But we know what these technologies are.
01:25:34 We feel like we have wrapped our heads around them.
01:25:37 And so we know how to build a system
01:25:40 where we can put all the pieces in place
01:25:42 so that it becomes very easy to bolt those components
01:25:45 on in the future.
01:25:46 So if you do things that way, then at the beginning,
01:25:50 you can have your system that has the functionality,
01:25:53 but say has less security or less sustainability
01:25:56 or less of something else.
01:25:58 But then over time, it’s designed in such a way
01:26:02 that it has this easy on ramp to adding those things.
01:26:05 And if you don’t think explicitly
01:26:07 about being future compatible,
01:26:08 then you do often end up with a quick and dirty solution
01:26:12 that backs you into a corner.
01:26:14 And then there are definitely cases
01:26:16 where I think the Ethereum ecosystem has suffered from that.
01:26:18 And we have had to expand pretty significant effort
01:26:22 on, for example, removing features that we didn’t realize
01:26:26 that we actually can’t sustain.
01:26:29 Like one big example is just increasing the gas costs.
01:26:32 So like making some operations more expensive
01:26:36 because they should be expensive
01:26:37 because they actually take a lot of time in the process.
01:26:40 So that’s making something more expensive,
01:26:44 kind of like taking some functionality away.
01:26:46 So if you can like be cognizant
01:26:49 of where you’re likely going into the future,
01:26:52 and if you don’t know, like even be cognizant
01:26:54 of both the most likely paths that you’ll take in the future
01:26:56 and coming, like thinking about your roadmap
01:26:59 and coming up with a roadmap where you know
01:27:01 that like if you wants to do either of those things,
01:27:04 then you have a clean path toward it.
01:27:06 That’s probably the best kind of practical way
01:27:09 to get the best of both worlds that we have.
01:27:12 Okay, let’s talk about this wonderful process of merging.
01:27:19 Okay, so there’s the main net,
01:27:22 which is the Ethereum 1.0 chain,
01:27:25 or the, what should we say,
01:27:27 the chain that uses proof of work
01:27:29 as a consensus mechanism.
01:27:30 And then there’s, what is it called?
01:27:33 The beacon chain that uses the proof of stake mechanism.
01:27:40 And I believe the beacon has been deployed successfully,
01:27:45 is working, so that was in December of 2020.
01:27:49 There’s a bunch of questions around that
01:27:50 that’s fascinating as well,
01:27:51 but I think the most fascinating question
01:27:54 is about merging those two.
01:27:58 When do the two chains, one that’s proof of work,
01:28:03 one that’s proof of stake, merge?
01:28:06 And what are the most difficult parts of this process?
01:28:10 Right, so as you’ve said, right,
01:28:12 the way that we have set up this proof of stake transition
01:28:15 is that at first, the proof of stake chain
01:28:18 just launches on its own, right?
01:28:19 And this is the thing that happened in December.
01:28:22 And the proof of stake chain has been running
01:28:25 for close to six months now.
01:28:28 I mean, by the time people watch this,
01:28:30 it might actually be six months.
01:28:33 But it isn’t actually coming to consensus
01:28:35 on anything except for itself, right?
01:28:37 So the idea behind that is to just
01:28:40 give the proof of stake chain time to mature,
01:28:43 time for people to build the ecosystem around it,
01:28:45 time to make sure that there aren’t any bugs,
01:28:48 and just like prove to the community
01:28:49 that no proof of stake actually is real,
01:28:51 and a full transition is realistic,
01:28:55 because the thing that you’re transitioning to
01:28:57 already exists and already works.
01:28:59 And then at some point in the future,
01:29:01 you have this event called the merge,
01:29:03 where you basically take the activity
01:29:05 that’s being done inside of the proof of work chain,
01:29:08 and you actually move it over into the proof of stake chain,
01:29:10 so you get rid of the proof of work side completely.
01:29:13 So the way that the merge will work is,
01:29:18 it’s definitely gone through a few different iterations.
01:29:22 Like the earlier versions of this
01:29:24 actually required more work for users
01:29:26 and more work for clients.
01:29:27 It was much more like,
01:29:29 oh, there’s this new chain, there’s this old chain,
01:29:31 and then everyone has to migrate
01:29:33 from the old chain to the new chain,
01:29:34 and then at some point we’ll forget about the old chain.
01:29:37 The new version is designed
01:29:39 to be much more seamless for users, right?
01:29:43 So basically what actually happens is that
01:29:45 the old chain basically becomes embedded
01:29:49 inside the new chain, right?
01:29:50 So starting from the merge transition block,
01:29:54 every proof of stake chain block
01:29:56 is going to contain a block of the,
01:29:59 what we consider now to be,
01:30:01 what we consider to be the Ethereum chain today,
01:30:03 but we’ll call it the execution chain.
01:30:05 And then at the same time, to create one of these blocks,
01:30:08 you’re not going to need proof of work anymore, right?
01:30:10 So basically at the same time,
01:30:12 you would both get rid of the proof of work requirements
01:30:15 for one of these blocks to be valid,
01:30:16 but instead you require these blocks
01:30:18 to be embedded inside of the proof of stake blocks, right?
01:30:21 So you basically have like a chain inside a chain.
01:30:24 And this is, from an architecture perspective,
01:30:28 you might think it’s a little bit suboptimal,
01:30:30 but it actually has some nice properties
01:30:32 and makes it easier to kind of think about the consensus
01:30:35 and think about what we call the execution layer,
01:30:38 like transactions and contracts kind of separately
01:30:40 and upgrade them separately.
01:30:42 And it also just means that the upgrade process
01:30:46 is extremely seamless, right?
01:30:47 Because from the point of view of a client
01:30:49 that’s following the chain,
01:30:50 you basically have to update nothing, right?
01:30:53 You’re still following the same chain
01:30:55 and follows the same rules,
01:30:56 except instead of checking proof of work,
01:30:58 you’ll switch to checking that these blocks
01:31:01 are embedded inside of blocks of the proof of stake chain.
01:31:03 So there’ll be this merge block
01:31:06 that will mark this transition.
01:31:08 And over time, I guess the new chain
01:31:11 will contain the full record
01:31:13 of all the transactions that’s ever happened
01:31:15 on the previous chain, on the old chain.
01:31:17 So maybe I’m asking a dumb question here,
01:31:20 but in this process, is the new chain going to have
01:31:25 all the information of the past transactions?
01:31:29 The new chain is not going to hold information
01:31:33 from what happened in the Ethereum chain before the merge,
01:31:36 right, so Ethereum clients that people are going to use
01:31:43 around the time of the merge and soon after the merge,
01:31:45 they’re probably just going to sync
01:31:48 and check the proof of work chain up to the merge,
01:31:50 and then they’re gonna check the proof of stake chain.
01:31:52 But at some point in the future,
01:31:53 I think people will just stop bothering
01:31:55 checking the proof of work before the merge.
01:31:57 Got it, so that old history information is not important
01:32:01 for the future, like if you’re operating actively
01:32:03 on the new chain, that history is not important to you.
01:32:08 It’s not important, so it’s not strictly important
01:32:12 for just like any smart contract
01:32:17 or just like applications that run on the blockchain.
01:32:19 It can be important to users,
01:32:21 and it can be important for some applications,
01:32:24 but we’re basically saying that like maintaining
01:32:27 and serving that is not going to be a simultaneous
01:32:29 with the responsibility of every Ethereum node.
01:32:32 If you want that information, there can be separate
01:32:34 protocols for backing it up.
01:32:36 And like these other protocols actually exist, right?
01:32:38 Like there’s something called the graph,
01:32:40 which is doing some history retrieval.
01:32:42 Potentially, you can just take that entire chain
01:32:43 and stake it on BitTorrent.
01:32:45 Like there’s lots of ways to like archive it
01:32:48 and create kind of customized search protocols for it.
01:32:51 So what’s your sense why, so there’s a Python 2
01:32:54 and Python 3, and it took forever for people to switch.
01:32:58 What’s your sense why this merge has been taking longer
01:33:02 than perhaps was expected?
01:33:05 I think the biggest reason is just we’ve been
01:33:08 underestimating the technical complexity.
01:33:11 There’s a lot of technical complexity
01:33:12 in making a successful proof of stake chain.
01:33:14 There’s a lot of technical complexity
01:33:17 in actually figuring out the transition process.
01:33:20 There’s…
01:33:22 So that’s bigger than social complexity.
01:33:24 So the technical complexity you would say
01:33:27 is the bigger reason for any delays
01:33:29 than the social complexity?
01:33:31 I actually think so.
01:33:32 I think we’ve been very fortunate
01:33:35 to not have too much social complexity around the merge.
01:33:37 So not much drama.
01:33:38 No.
01:33:40 I think the biggest part of the reason
01:33:42 is just because we have been talking
01:33:44 about proof of stake and sharding
01:33:46 as being part of the roadmap
01:33:47 since almost the very beginning of the project, right?
01:33:49 Like the very first proof of stake blog post
01:33:52 is from January 2014, which was two months
01:33:56 after the project started
01:33:57 and maybe even a day after the announcement.
01:34:01 So proof of stake was not something
01:34:06 that we kind of put on anybody by surprise.
01:34:09 And then when the Dow fork happened
01:34:11 and the people on the ETC side split off,
01:34:13 I think it also just happens that a lot of the people
01:34:16 that were not willing to stomach the Dow fork
01:34:18 and then join the ETC side,
01:34:20 they were the more Bitcoiny types.
01:34:23 And the more Bitcoiny types do also tend to like proof
01:34:26 of work more.
01:34:26 And so like that also sort of ended up,
01:34:29 sort of like purifying the communities on both sides,
01:34:32 I guess.
01:34:33 So Ethereum Classic is not switching to proof of stake
01:34:35 and they’re happy with their setup.
01:34:38 And by the time that it came
01:34:43 to the beacon chain launching into now,
01:34:45 I think the community is very strongly in favor
01:34:48 of the proof of stake switch.
01:34:50 But let me ask the question that no engineer wants to hear,
01:34:55 which is the question of timeline.
01:35:00 When do you think the merge will happen?
01:35:03 Do you have a sense it might happen this year?
01:35:06 Do you have a sense it might be pushed
01:35:07 towards next year, 2022 or even beyond?
01:35:14 I think early 2022 is the most realistic.
01:35:20 There’s definitely still like an optimistic case
01:35:22 of it happening this year,
01:35:23 but the realistic thing to count on is definitely
01:35:27 the very early part of next year.
01:35:31 Is there specific things that stand out to you
01:35:33 that will make you feel good about progress
01:35:37 if you see it happening?
01:35:40 So the thing that we had last month
01:35:43 is we had this online hackathon called Rayanism,
01:35:46 where basically a bunch of the different client developers
01:35:50 that are going to be part of the transition,
01:35:52 like hacks together some test nets
01:35:54 of the post merge Ethereum chain.
01:35:57 So these were only test nets
01:35:59 of what would happen after the merge.
01:36:01 They were not test nets of the transition itself.
01:36:03 So the thing that people are working on now actually
01:36:06 is the transition.
01:36:08 So having a full specification
01:36:12 of both the transition and post transition,
01:36:14 and we have specifications now,
01:36:16 but in a realistic way,
01:36:18 they’ll probably needs to have a couple of changes
01:36:20 and have things that continue to be ironed out,
01:36:23 and then have a test net
01:36:25 that does both the transition and the post transition.
01:36:27 And then once you have a test network,
01:36:30 then you just have to do a lot of testing and audit it,
01:36:33 and then do some runs on not just a specialized test network
01:36:38 but on say an existing test network
01:36:39 like a Robson or Rinkeby
01:36:41 that Ethereum people already significantly use.
01:36:45 And if it works,
01:36:46 then you can deploy the transition on mainnet.
01:36:49 Just as a quick comment,
01:36:50 because this is fascinating.
01:36:52 In August of last year,
01:36:54 there was this Medalla.
01:36:57 I believe it’s pronounced Medasha.
01:36:59 It’s a South American subway station.
01:37:02 I forget where.
01:37:03 But spelled with two Ls.
01:37:04 Yeah, yeah,
01:37:05 because that’s how Spanish works, right?
01:37:07 Like the two Ls have a…
01:37:09 Medasha.
01:37:10 Yeah. Okay, cool.
01:37:11 Anyway, but I read about it in middle of August, August 14th,
01:37:15 there was an incident on that test net.
01:37:17 How does this process work?
01:37:22 What do you learn from those kinds of incidents
01:37:23 when stuff goes wrong in the test process?
01:37:27 I think that incident was that
01:37:30 there was a consensus failure of some kind as I remember.
01:37:33 Basically just different clients
01:37:35 interpreting things in different ways,
01:37:37 and then one of them getting kicked off the network.
01:37:39 And then it ended up taking a while
01:37:41 to actually get everyone to get back online.
01:37:45 A big part of the reason why it took weeks to resolve
01:37:47 is because it’s on a test network,
01:37:50 like the coins are valueless.
01:37:52 And so there’s not really this big push of any kind
01:37:55 for people to actually go and download the new clients
01:37:58 so they can start participating again.
01:38:00 And so it definitely took a while
01:38:02 until the chain started finalizing again.
01:38:06 And then also there was, I think,
01:38:08 another round of just not finalizing in October,
01:38:12 as I remember.
01:38:15 There were definitely things that we learned.
01:38:17 Like there were a lot of things,
01:38:18 especially that client developers
01:38:20 just learned about like optimization
01:38:22 and how to build their clients
01:38:25 in a way that they can process things efficiently.
01:38:28 There’s a lot that we learned
01:38:30 from just like seeing the full life cycle
01:38:32 of what happens when more than a third of the validators
01:38:34 go offline and then finalization stops.
01:38:37 And then that kind of weird unusual state
01:38:42 of the chain continues for a while.
01:38:43 And then eventually everyone who is not participating
01:38:46 just gets enough of their stake.
01:38:48 Like we don’t use the word slashed,
01:38:50 we use the word leaked for this,
01:38:51 but like basically also burned
01:38:53 until the people who are participating
01:38:56 go back up to two thirds
01:38:57 and then the chain goes back to finalizing.
01:38:59 So just seeing all of those edge cases play out live,
01:39:03 I think actually helped a lot
01:39:04 and probably helped to really contribute
01:39:05 to making us feel better about Mainnet.
01:39:08 I mean, there’s also an incident just recently
01:39:11 in April 24th of 2021
01:39:15 where this was on Beacon, I guess.
01:39:18 There was a bug discovered in the software client Prism
01:39:22 that prevented roughly 70% of validators
01:39:25 on the network from producing blocks.
01:39:28 I mean, maybe you can comment on what happened,
01:39:30 but broadly like the big picture,
01:39:34 what kind of stuff are you worried about
01:39:36 in terms of problems that might arise?
01:39:39 Are we talking about small bugs?
01:39:41 Are we talking about like emergent social,
01:39:45 unexpected social bugs?
01:39:48 What are the things that worry you
01:39:49 about the future of Ethereum
01:39:50 that you want to make sure you construct mechanisms
01:39:53 that prevent those things from happening?
01:39:55 So one of the lucky things there was
01:39:57 that this particular bug only prevented
01:40:00 proposed self blocks.
01:40:01 It did not prevent attestations.
01:40:03 So attestations is just a mechanism for voting on blocks.
01:40:06 And it’s the attestations that are actually responsible
01:40:08 for the chain finalizing.
01:40:09 So like coming to this more permanence agreements on blocks.
01:40:12 So the chain was actually quite stable all the way through.
01:40:19 I think the thing that we generally learned
01:40:21 from these experiences is just how valuable it is
01:40:26 to have this multi client network.
01:40:28 So this is one of these areas where I think Ethereum
01:40:30 distinguishes itself from like Bitcoin, for example.
01:40:33 That in Ethereum, we don’t have one single client
01:40:38 that everyone just runs, right?
01:40:41 There’s multiple implementations of the protocol.
01:40:44 And these multiple implementations,
01:40:46 they all process and verify the blocks
01:40:49 that each other can verify, right?
01:40:52 So they all speak the same language.
01:40:54 Now, sometimes when there’s a bug, they disagree.
01:40:56 And when two clients disagree because of a bug,
01:40:59 we call this a consensus failure.
01:41:01 And consensus failures are pretty serious, right?
01:41:03 And when you have a client’s monoculture like Bitcoin does,
01:41:08 then it’s more rare to have consensus failures.
01:41:12 Though you still have them actually.
01:41:13 Bitcoin had a consensus failure
01:41:15 between two different versions of the same client
01:41:17 back in 2013, but they’re less likely to happen.
01:41:21 But the interesting thing is that the multi client
01:41:25 architecture has actually, I think, saved Ethereum
01:41:28 much more than it’s heard it.
01:41:30 So even in this most recent incident, right?
01:41:31 Like Prism was not producing blocks,
01:41:33 but all the other clients were still producing blocks.
01:41:36 There’s four others, right?
01:41:38 Yes, it’s a Prism, Nimbus, Teku, and the Lighthouse.
01:41:43 And then also Ethereum back in 2016 had this fun events
01:41:47 that we call the Shanghai DOS attacks.
01:41:49 They’re called that because the attacks started
01:41:52 right on the first day of our annual conference at DEF CON
01:41:56 that happens to be in Shanghai that year.
01:41:59 So what happened basically was that someone came up
01:42:03 with a way to create blocks that were very slow
01:42:07 for one client to process, but not the other client.
01:42:10 So at that time, there were basically two Ethereum clients.
01:42:12 They were called Geth and Parity.
01:42:15 Right now, I think the top three ones are Geth,
01:42:18 Nethermind, and Basu.
01:42:20 But what happened as a result of us having two clients
01:42:23 is that the attacker was just not able to come up
01:42:26 with blocks that both clients were completely failing
01:42:31 at processing.
01:42:32 And so a lot of the miners and a lot of network participants,
01:42:35 they just kept on switching between the two implementations
01:42:37 depending on which one worked.
01:42:39 And that actually really helped the chain survive
01:42:44 through that month of attacks as the attacker just kept
01:42:47 on hammering at our system and identifying all
01:42:50 of the weaknesses and just forcing our clients
01:42:53 to do this rapid sprint of just optimizing the hell
01:42:56 out of everything and make sure there aren’t any
01:42:58 of those DOS blocks or DOS bugs remaining.
01:43:02 So that was another example.
01:43:04 And then as a counter example,
01:43:07 so something that also shows the point from the other side,
01:43:11 Bitcoin had this bug in 2010, the balance overflow bug.
01:43:15 Basically someone created a transaction that had two outputs
01:43:20 and those outputs were both of a few billion Bitcoin.
01:43:24 So like about two to the power of 63 Satoshis.
01:43:27 And then if you add those numbers together,
01:43:29 you’ll go above two to the power of 64.
01:43:31 And of course, computers like once you go above
01:43:35 to the power of 64, you wrap around.
01:43:36 And so the Bitcoin nodes thought that there was enough money
01:43:40 to pay for the transaction because it was asking for,
01:43:42 let’s say like a billion Satoshis or something,
01:43:44 but actually it was asking for two to the power
01:43:46 of 64 plus a billion.
01:43:48 And so the attacker just managed to create like billions
01:43:51 of Bitcoin out of thin air.
01:43:53 And this was not only discovered and fixed
01:43:57 after something like 12 hours,
01:43:59 but if there had been,
01:44:02 if Bitcoin had been a multiple implementation system,
01:44:05 then what would have almost certainly happened
01:44:08 is like one of the clients would have bugged out,
01:44:10 but the other clients would have probably
01:44:13 actually had a check for that, right?
01:44:15 And so there would have been a consensus failure,
01:44:17 but at least that would have like alerted everyone
01:44:21 that there is a problem very quickly.
01:44:24 And it also would have given everyone
01:44:25 just like obvious social permission to go and, you know,
01:44:28 pick whichever one of the chains is correct
01:44:30 and solve the problem.
01:44:31 So like, that’s, I think a big learning that we’ve had
01:44:36 from multiple of our experiences in the Ethereum ecosystem,
01:44:40 just like validating this multi client model.
01:44:43 And like, to be fair,
01:44:44 it’s a model that we get criticized for a lot, right?
01:44:46 Like Bitcoin people talk about, you know,
01:44:48 the risk of consensus failures that this creates.
01:44:51 VC types are like, well, you know,
01:44:53 isn’t it expensive and wasteful to fund three software teams
01:44:55 where you could just be making, you know,
01:44:57 one quote focused effort, you know,
01:44:59 they love the word focused.
01:45:00 And like, you know, Ethereum is not that,
01:45:02 but it’s amazing despite not being that.
01:45:04 Yeah.
01:45:08 Basically, yeah, so that was interesting.
01:45:12 And then there have definitely been other learnings as well,
01:45:16 just from like seeing the chain live
01:45:18 and seeing what actually is the staking experience like,
01:45:23 what are the actual incentives
01:45:24 for all the different participants.
01:45:26 So I definitely feel like we’re gaining a lot
01:45:28 from this sort of one year of trial running the chain
01:45:31 before we actually make all of Ethereum depend on it.
01:45:35 Let me ask perhaps a strange question,
01:45:37 but you know, proponents of Bitcoin will say things like,
01:45:41 Bitcoin fixes everything.
01:45:44 So why do we need Ethereum?
01:45:47 Versus like Bitcoin plus lightning network for scalability
01:45:54 and then using Bitcoin for,
01:45:56 with this proof of work for security.
01:45:58 So in this kind of, it is perhaps sort of a strange question,
01:46:02 but it’s a high level question.
01:46:04 Why do we need another technology?
01:46:07 Yes, it has a bunch of nice features,
01:46:09 but like doesn’t Bitcoin fix everything already?
01:46:13 So the thing that always attracted me about Bitcoin
01:46:17 is these values of decentralization,
01:46:20 creating these open provisional systems
01:46:22 that anyone can participate in
01:46:24 and that aren’t just going to flop over and die
01:46:27 if whoever created them gets bored
01:46:28 and that are resistant to like whoever runs them
01:46:33 breaking the rules and all of these things.
01:46:35 And I think that pretty strongly that these principles
01:46:38 are like really valid in importance
01:46:40 to much more things than just money, right?
01:46:42 Like Bitcoin is the blockchain for money
01:46:45 and Ethereum was built from the start
01:46:47 as a general purpose blockchain, right?
01:46:49 There is ether the asset on Ethereum,
01:46:51 but then you can also make decentralized financial things,
01:46:56 what we call DeFi today.
01:46:58 You can make like ENS, the decentralized domain name system.
01:47:02 You can put, make prediction markets on it.
01:47:05 You can make totally nonfinancial systems
01:47:09 that just like keep track of whether or not
01:47:11 some certificate was signed
01:47:13 or whether or not some like cryptographic key got revoked.
01:47:16 There’s this big long list of like just interesting things
01:47:21 that you could use about blockchains to do, right?
01:47:23 Like basically they are sort of the missing piece
01:47:26 that where without them,
01:47:29 the kinds of things that a decentralized computer network
01:47:31 can do is very limited.
01:47:32 And once you have them,
01:47:33 a lot of those limitations end up going away.
01:47:36 And so Ethereum was like always from the beginning
01:47:42 about that, right?
01:47:43 It’s about like, hey, this isn’t just money.
01:47:45 There’s so much more that you could do
01:47:48 if you could just go ahead and make any infrastructure
01:47:51 or digital institution or DAO
01:47:54 or whatever you wanna call it,
01:47:55 where the kind of the base layer of the logic
01:47:58 is just executed in this open and transparent way
01:48:00 where everyone can see what’s going on
01:48:03 or if you like your zero knowledge proofs,
01:48:05 at least everyone can see proofs that prove to you
01:48:07 that what’s going on follows the rules
01:48:09 and you don’t need to just constantly keep trusting
01:48:13 centralized actors.
01:48:16 Hence the smart contracts
01:48:18 as being a sort of a core technology as part of Ethereum.
01:48:21 Yes, exactly.
01:48:22 Smart contracts, the computer programs
01:48:24 that are running on Ethereum,
01:48:25 they are like the core
01:48:26 of what makes Ethereum general purpose.
01:48:29 Yeah, so I do think that there’s a lot more wrong
01:48:35 with the world than just money, right?
01:48:37 Like I’m not one of these people who thinks that
01:48:40 if you get rid of fiat currency
01:48:42 and you replace it with cryptocurrency,
01:48:43 then suddenly wars are gonna go away, right?
01:48:45 Because like, first of all,
01:48:48 like say your average revenue
01:48:49 is only a small portion of government revenue, right?
01:48:51 It’s like what, 5%, 10%, something like that.
01:48:54 Second of all, like if you are the sort of,
01:48:58 this is one of the things
01:48:59 I don’t even get about their philosophy.
01:49:01 Like, let’s say you’re the sort of person
01:49:02 who is an extreme and very distrusting libertarian
01:49:06 and you think that these governments are terrible, right?
01:49:09 Like we know today that governments
01:49:11 find a combination of things like welfare
01:49:15 and things like the military
01:49:17 that goes and like bombs people in Afghanistan, right?
01:49:21 And so the question you have to ask is like, okay,
01:49:24 you with your new, you know, magic newfangled cyber currency
01:49:30 that takes over the world,
01:49:32 take away the government’s ability
01:49:33 to have seniorized revenue
01:49:34 and so you reduce the government’s revenue by 10%.
01:49:37 If the government is that evil,
01:49:39 which portion of its expenses
01:49:41 is it gonna take that 10% from?
01:49:43 Is it gonna stop the bombing people in Afghanistan
01:49:45 or is it gonna cut welfare?
01:49:47 If you think it’s the first,
01:49:48 you have a very optimistic view of the government, right?
01:49:51 So that’s, I guess, my perspective
01:49:55 on like why the whole, you know,
01:49:58 we’re going to save the world and create peace
01:50:02 by like denying governments the right
01:50:04 to stealth taxation kind of perspective
01:50:07 doesn’t really make much sense for me.
01:50:09 And I do think that there is real value
01:50:11 that comes from a decentralized and open currency.
01:50:14 Like just the fact that there is a financial infrastructure
01:50:18 that anyone in the world can go ahead and use, right?
01:50:21 It’s, that’s something that can easily be
01:50:24 a big boon for people, right?
01:50:25 There’s a lot of places where the currency
01:50:29 and is much less stable than the dollar.
01:50:32 And, you know, these people like they don’t like,
01:50:35 well, if they use Bitcoin,
01:50:37 their only option is to get Bitcoins, right?
01:50:39 Which, you know, are also pretty volatile.
01:50:42 If they use Ethereum, then, you know, they can get ether,
01:50:44 but then they can also get stable coins, right?
01:50:46 And you might think that, you know,
01:50:47 oh, you’re not being ideologically pure.
01:50:49 Now you’re giving them stable coins,
01:50:51 which are mirroring dollars.
01:50:52 And obviously dollars are going to collapse too.
01:50:54 But the reality is that dollars are vastly more stable
01:50:56 than the Venezuelan Bolivar.
01:50:58 So like, there are really meaningful and beneficial things
01:51:04 that you can give to people by having a global
01:51:07 and open financial system.
01:51:09 But I think if you want to actually do that,
01:51:11 like you have to have much more than just a currency, right?
01:51:14 And then if you want to go beyond financial things,
01:51:16 then, you know, you have to obviously have much more
01:51:19 than a currency and then, you know,
01:51:21 you also have to actually take scalability seriously
01:51:24 because the nonfinancial applications,
01:51:26 like nobody’s going to pay $5 a transaction for them.
01:51:31 Can we return to dogs?
01:51:33 Sure.
01:51:34 Woof, woof.
01:51:35 No, no, no, no, no.
01:51:40 The other one’s categorically forbidden.
01:51:41 Yeah, categorically forbidden.
01:51:43 Is there any cryptocurrency based on cats actually?
01:51:45 I think there are.
01:51:46 Like, there was cat coin, there was nan coin.
01:51:49 For some reason, they just didn’t catch on as much
01:51:51 as the dog coins did.
01:51:53 Okay, so let’s talk about Dogecoin and Elon Musk.
01:51:57 Elon said that, quote, ideally,
01:52:01 Doge speeds up block time 10x,
01:52:04 increases block size 10x, and drops fee 100x.
01:52:10 Then it wins hands down, end quote.
01:52:14 You said in a blog post, partially responding to that,
01:52:18 that there are subtle technical reasons
01:52:20 why this is not possible.
01:52:23 To this, Elon said that you, quote, fear the Doge.
01:52:30 So let’s talk about this.
01:52:31 What are the technical hurdles for Dogecoin
01:52:34 that prevent it from becoming
01:52:35 one of the primary cryptocurrencies of the world?
01:52:38 And do you, in fact, fear the Doge?
01:52:41 I definitely feel obligated to correct the record.
01:52:43 I definitely do not fear the Doge.
01:52:45 Okay.
01:52:46 No, I love the Doge.
01:52:47 I actually visited the Doge in Japan a few years back.
01:52:51 She’s an amazing dog, she’s still alive.
01:52:54 Wait, the original Doge?
01:52:55 Yeah.
01:52:56 Oh, wow.
01:52:58 So, you know, we accept Doge every year
01:53:02 for our annual DEF CON conferences.
01:53:05 So, I definitely don’t think Ethereum
01:53:09 is opposed to Doge coins.
01:53:11 I kind of want to feel like Ethereum
01:53:13 is at least a little bit in spirit itself a Dogecoin.
01:53:16 And then, as I mentioned, I love Doge,
01:53:18 I bought a bunch of Doge, I still hold a bunch of Doge.
01:53:24 On the scalability question,
01:53:25 the challenge basically is the limits to scalability
01:53:29 and the trade offs with centralization, right?
01:53:31 If you just increase the parameters
01:53:33 without doing anything else,
01:53:34 then it just becomes more and more difficult
01:53:37 for people to validate the chain
01:53:38 and it just becomes more likely that the chain
01:53:41 becomes centralized and becomes vulnerable
01:53:44 to all kinds of capture.
01:53:45 So, does it need like some of the layer two technologies
01:53:48 that we’ve been talking about?
01:53:50 I personally think that if Doge wants to somehow bridge
01:53:55 through Ethereum and then people can trade Doge
01:53:57 thousands of times a second inside of a loop ring,
01:53:59 then that would be amazing.
01:54:01 If they want to just like take ZK roll up style technology
01:54:05 and just have thousands of transactions a second
01:54:07 on their own chain, then that would be a great outcome
01:54:10 as well.
01:54:11 So, is there ways for Ethereum and Dogecoin
01:54:15 to work together?
01:54:16 Okay, so there’s a power behind a person like Elon Musk
01:54:22 pushing the development of a cryptocurrency.
01:54:25 Is there ways to leverage that power and that momentum
01:54:30 to improve Ethereum, to improve some of the sort of
01:54:33 cryptocurrencies that are already technologically advanced
01:54:38 and pushing forward that kind of technology?
01:54:41 I definitely think there’s room for…
01:54:45 You know that meme of Doge like taking over,
01:54:48 like that storm?
01:54:49 I’ve seen it.
01:54:50 Is there a way to ride that storm, that wave of the Doge
01:54:56 that’s taking over?
01:54:57 I think if we can have a secure Doge to Ethereum bridge,
01:55:00 then that would be amazing.
01:55:02 And then when Ethereum gets its scalability,
01:55:04 any scalability thing that works for Ethereum assets,
01:55:07 you would be able to also trade wrapped Doge
01:55:10 with extremely low transaction fees
01:55:11 and very high speed as well.
01:55:13 Is there precedence for building secure bridges
01:55:16 between cryptocurrencies?
01:55:18 Is that, I mean, how difficult is this kind of task?
01:55:21 It’s definitely something that’s in its infancy.
01:55:23 There definitely have been some cross chain interaction
01:55:26 things that have been done before.
01:55:28 So, the earliest is probably the concept of merge mining,
01:55:30 right, when a chain just makes its entire
01:55:34 proof of work algorithm dependent on
01:55:36 the proof of work algorithm of another chain.
01:55:38 So, I think famous Dogecoin actually merge mines
01:55:41 to Litecoin, which is, I think in retrospect,
01:55:44 not looking like a very good choice
01:55:45 because now Dogecoin is bigger than Litecoin.
01:55:49 But, you know, if there’s potentially some way
01:55:53 for Dogecoin to merge mine with an Ethereum proof
01:55:57 of stake of some kinds,
01:55:59 then that could be an interesting alternative.
01:56:04 So, that’s one type of chain interaction.
01:56:06 As far as bridges, like one chain reading another chain,
01:56:09 early in Ethereum’s history,
01:56:10 there was this project called BTC Relay.
01:56:13 It’s a smart contract on Ethereum
01:56:14 that just verifies Bitcoin blocks.
01:56:17 I think people stopped really caring about it
01:56:20 and maintaining it because there just weren’t enough
01:56:22 applications that were actually interested
01:56:24 in using it at the time.
01:56:25 And then the transaction fees got too high
01:56:27 to actually maintain it.
01:56:28 So, I think if we want to make a BTC Relay 2.0,
01:56:33 that becomes cheaper because, you know,
01:56:35 it uses snarks or something like that,
01:56:37 then you probably could.
01:56:38 But maybe now’s the time when you actually
01:56:42 can do that sort of one way verification.
01:56:44 But the one challenge though,
01:56:45 is that if he wants to have a bridge
01:56:47 that allows you to move assets between chains,
01:56:49 then you don’t just need one way verification,
01:56:52 you need two way verification, right?
01:56:53 And Ethereum can verify anything
01:56:55 because Ethereum smart contracts
01:56:57 can just run arbitrary code.
01:56:58 But if you want Bitcoin to be able to do things
01:57:02 based on what happens in Ethereum lands,
01:57:03 then Bitcoin would have to basically,
01:57:06 well, they can do everything with soft forks
01:57:07 because that’s their religion,
01:57:10 but they’ll do it that way.
01:57:12 And if Doge wants to make a fork
01:57:15 where that allows for two way transferability
01:57:19 with Ethereum, then they could.
01:57:22 I mean, I think that would be a lovely collaboration
01:57:24 to make if there’s interest.
01:57:27 I think there might actually even be some multi SIG funds
01:57:30 that has some funding.
01:57:34 It’s just a bounty for someone
01:57:35 to make a bridge between the two.
01:57:37 Oh, could you maybe try to psychoanalyze Elon Musk
01:57:40 for a brief second?
01:57:42 So what are your thoughts about Tesla and Elon Musk’s
01:57:47 journey through the cryptocurrency world?
01:57:49 So first with Bitcoin and then with Dogecoin.
01:57:53 So acquiring, holding a large amount of Bitcoin.
01:57:57 And I believe, at least considering the acquiring
01:58:01 and holding a large amount of Dogecoin.
01:58:03 Positives, negatives, what do you think the future
01:58:06 for Tesla and SpaceX in the cryptocurrency space looks like?
01:58:10 Do you think they’ll consider Ethereum?
01:58:13 I’m sure that if they stay in the cryptocurrency system
01:58:17 at all, then they have to at some point.
01:58:19 Bitcoin number one, Dogecoin number,
01:58:27 I mean, come on, it deserves to be number three.
01:58:29 And then, or number two.
01:58:31 And then Ethereum can be whatever that other number is.
01:58:39 If Ethereum only becomes a Dogecoin somehow,
01:58:42 maybe change the logo to incorporate a dog of some sort.
01:58:46 Almost like Doge sneaking behind.
01:58:50 Oh, that would be fascinating.
01:58:52 For when the merge happens.
01:58:53 And I think, Elon, you definitely,
01:58:56 I think you would make a mistake
01:58:58 if you were to kind of ascribe too much sophisticated,
01:59:02 malevolent, or any deep intentionality to the whole process.
01:59:07 I think he’s just a human being and he likes dogs,
01:59:10 just like I like dogs.
01:59:11 Yeah, I think that is literally the reasoning
01:59:14 behind the whole Dogecoin thing.
01:59:16 There is some aspect to which,
01:59:18 I mean, the guy helped launch a car into space, right?
01:59:24 Like you could ask, like, what is the purpose of that?
01:59:27 I think the purpose of that is fun.
01:59:31 I think he truly is more and more, especially lately,
01:59:35 embodying the whole idea that the most entertaining outcome
01:59:39 is the most likely and he’s fully embracing
01:59:42 the most entertaining outcome.
01:59:44 And in many ways, Dogecoin is the most
01:59:46 entertaining cryptocurrency.
01:59:48 As cryptocurrency becomes more and more impactful
01:59:50 in the world, people are getting
01:59:52 more and more serious about it.
01:59:53 And so he’s selecting the cryptocurrency
01:59:56 that is the least serious and the most fun.
01:59:59 And there’s something to that,
02:00:01 like coupling fun with technological sophistication
02:00:06 and somehow figuring out a way to do that well.
02:00:10 I want the world to be fun.
02:00:12 I think the world being fun is great.
02:00:15 Okay, let me ask about a couple
02:00:17 of other technologies if it’s okay.
02:00:19 Sure.
02:00:20 What are your thoughts about Chainlink
02:00:22 and hybrid smart contracts that utilize
02:00:24 off chain external data sources?
02:00:28 And I think it’s definitely necessary for a smart contract
02:00:32 so that do a lot of things to use off chain data
02:00:35 of some kind, right?
02:00:36 Like if you want to have a stable coin,
02:00:38 you need a price oracle so you know
02:00:39 what price you’re targeting.
02:00:41 If you want to have some fancy no crop insurance gadget,
02:00:45 like I think EtherRisk has been doing
02:00:47 a lot of good work with that.
02:00:49 And I think it was either Kenya or Sri Lanka or both,
02:00:53 like they’re making a lot of good progress
02:00:56 in some of those places.
02:00:59 Like you need some kind of oracle to tell you,
02:01:01 did it actually rain in this particular area?
02:01:05 If he wants to have like assets that mirror
02:01:07 other financial assets, you need an oracle.
02:01:09 If you want to have a prediction market,
02:01:10 you need an oracle.
02:01:12 And so projects that provide oracles
02:01:15 are definitely really important.
02:01:18 There are definitely different kinds of use cases.
02:01:20 Like Augur is more about events
02:01:22 and the Augur oracle is designed,
02:01:24 I think differently from Chainlink, right?
02:01:26 Like Chainlink emphasizes the whole,
02:01:29 we have a fast automated thing
02:01:31 that just gives you data quickly.
02:01:33 Whereas Augur is more, we don’t give a crap about speed.
02:01:38 And look, we don’t need to give a crap about speed
02:01:40 because if you want to get your money out
02:01:41 on a prediction market that where in reality it’s resolved,
02:01:44 you can probably just sell your coins for 99 cents anyway.
02:01:48 So I mean, I think Chainlink is definitely
02:01:52 taking a good and important part of the oracle design space.
02:01:58 And I’m definitely happy that there’s
02:02:00 that project taking the task on.
02:02:02 I mean, at the same time, I do think that
02:02:04 their frog army on Twitter can get a bit intense at times,
02:02:07 but like.
02:02:08 I mean, is there a way to incorporate
02:02:10 sort of oracle network type of ideas into Ethereum?
02:02:14 I personally would prefer the Ethereum base layer,
02:02:17 like stay away from trying to provide too much functionality
02:02:21 because like once you have the Ethereum base layer
02:02:25 making a claim about like say the US dollar
02:02:29 to Ethereum price, like at some sense,
02:02:33 you’re basically saying that like Ethereum
02:02:35 as a base platform starts making
02:02:38 what could be geopolitical statements, right?
02:02:40 Like for example, imagine if there was some civil war
02:02:44 and the US split up and you had two currencies
02:02:46 that both claims to be the US dollar,
02:02:47 well, Ethereum would have to pick one
02:02:50 for the sake of everyone who was already using that oracle.
02:02:53 So does that mean that the blockchain would be
02:02:56 taking a position in this big mega political debate?
02:02:59 So I think like for just those kinds of reasons,
02:03:03 I would personally like prefer Ethereum itself
02:03:08 to be more of this sort of pure platform
02:03:11 that just analyzes transactions
02:03:13 just mathematically using deterministic consensus rules.
02:03:17 And then if you need the oracles, that can be layer twos.
02:03:20 Like I think Ethereum like benefits
02:03:23 from not trying to do everything at layer one
02:03:26 and having this like very robust layer two ecosystem
02:03:29 where you have all these projects doing interesting things.
02:03:31 Yeah, focus on the basic technology avoid the politics.
02:03:34 Gotcha.
02:03:36 Let me ask a bit of a human question.
02:03:40 Charles Hoskinson, someone you’ve worked with
02:03:43 in the early days of Ethereum,
02:03:46 there appears to my outsider view
02:03:48 to have been a bit of a falling out.
02:03:51 Is there positive inspiring human story
02:03:54 to be told about why you two parted ways?
02:03:56 I kind of want to let the various books
02:04:01 about Ethereum speak for themselves,
02:04:04 but I feel like since that time,
02:04:09 I think Charles has clearly progressed
02:04:14 and matured in a lot of ways.
02:04:16 And people who follow Charles closely
02:04:19 have definitely told me that like 2021 Charles
02:04:22 is very different from a 2014 Charles.
02:04:24 And I’m sure it’s 2021 Vitalik is much different
02:04:26 from 2014 Vitalik as well.
02:04:28 I’m kind of interested how the 2030 and 2040 Vitalik
02:04:32 and Charles look like as well.
02:04:34 Oh, interesting.
02:04:35 Like the progression of the humans.
02:04:37 Is this going to be one of those things
02:04:39 where like everyone comes full circle
02:04:40 and then 2030 Vitalik and Charles are best friends?
02:04:43 Yeah, not necessarily best friends,
02:04:45 but some kind of are able to reminisce
02:04:50 in ways that puts some of the tension of the past behind.
02:04:55 I think such things are possible.
02:04:58 I think people definitely absolutely have a right to,
02:05:02 and I think should strive to just constantly change
02:05:06 and reinvent themselves.
02:05:08 Is there something you could say about your thoughts
02:05:11 about the Cardano project that Charles Hoskinson leads?
02:05:15 They’ve worked on some interesting ideas
02:05:19 that mirror some of the ideas in Ethereum,
02:05:22 proof of stake, working on smart contracts
02:05:27 and all those kinds of things.
02:05:28 Is there something, again, positive,
02:05:31 inspiring that you could say?
02:05:33 Are they a competitor?
02:05:34 Is it complimentary technology?
02:05:37 There’s definitely interesting ideas in there.
02:05:40 I do think Cardano takes a bit of a different approach
02:05:43 than Ethereum in that they really emphasize
02:05:45 having these big academic proofs for everything,
02:05:48 whereas Ethereum tends to be more okay with heuristic arguments
02:05:53 in part because it’s just trying to do more faster.
02:05:55 But there’s definitely very interesting things
02:05:59 that come out of IOHK research.
02:06:03 Can you comment on that kind of idea?
02:06:05 I, as sort of having a foot in research,
02:06:08 enjoy Charles’s kind of emphasis on papers
02:06:12 and deep academic rigor.
02:06:15 What’s the role of deep research rigor
02:06:18 in the world of cryptocurrency?
02:06:20 Interesting.
02:06:21 I’m actually the sort of person
02:06:22 who thinks deep rigor is overrated.
02:06:25 The reason why I think deep rigor is overrated
02:06:27 is because I think in terms of why protocols fail,
02:06:32 I think the number of failures that are outside the model
02:06:37 is even more important, is bigger and more important
02:06:39 than the failures that are inside the model.
02:06:41 So if you take selfish mining, for example,
02:06:43 that original discovery from 2013
02:06:47 that showed how Bitcoin does,
02:06:53 even if it has a 50% fault tolerance,
02:06:56 assuming everyone’s honest,
02:06:57 it only has a zero to 33% fault tolerance,
02:07:01 depending on your network model,
02:07:02 if you assume rational actors.
02:07:05 And to me, that was a great example
02:07:08 of an outside the model failure, right?
02:07:10 Because traditional consensus research,
02:07:12 just up until or before the blockchain days,
02:07:16 did not think about like incentivization much, right?
02:07:19 There was a little bit of thought about incentivization.
02:07:21 There’s like a couple of papers
02:07:23 on the Byzantine altruist rational model,
02:07:25 but it wasn’t that deep.
02:07:26 It was mostly operating under the assumption
02:07:28 that we’re gonna make consensus
02:07:31 between 15 participants and these are institutions.
02:07:34 And if something goes wrong,
02:07:36 then we can figure out whether or not
02:07:38 it was deliberate offline.
02:07:40 And if they did something evil, we can sue them.
02:07:42 Whereas in the crypto world, you can’t sue that, right?
02:07:44 And so that whole discovery basically arose
02:07:47 just because the model of traditional consensus research
02:07:52 just didn’t cover those possibilities.
02:07:54 And then once you go out of the model,
02:07:56 those other issues do exist, right?
02:07:59 So, but then at the same time,
02:08:01 there definitely are protocols that turn out to be,
02:08:06 that do have failures inside the model.
02:08:08 Like this reminds me of the time
02:08:09 when I think I found a bug
02:08:12 in a proposed consensus implementation
02:08:16 from either BitShares or EOS.
02:08:18 This happened around the end of 2017.
02:08:21 So that was definitely inside the model
02:08:23 because like they had a very clear idea
02:08:25 of what they were trying to achieve.
02:08:26 They had a very clear description
02:08:27 and like there’s a very clear mathematical argument
02:08:30 for why the description doesn’t lead
02:08:32 to what they’re trying to achieve.
02:08:33 But ultimately what you’re trying to achieve
02:08:35 can never be fully described in formal language, right?
02:08:38 Like I think this is the big discovery of,
02:08:41 the AI safety people, for example, right?
02:08:43 Like just having a specification of what you want
02:08:48 is an insanely hard problem.
02:08:49 And like the more powerful the optimizer
02:08:52 that you’re giving the instructions to,
02:08:54 the more you have to be careful.
02:08:55 And so, I think there are the kind of these two sides.
02:09:02 And then the other thing is that
02:09:05 a lot of the academic approach ends up
02:09:09 basically optimizing for other people
02:09:11 inside of the academic system.
02:09:12 And it doesn’t really optimize for like curious outsiders.
02:09:17 Whereas like I personally totally optimize
02:09:20 for curious outsiders, or at least I feel like I strive to.
02:09:23 So I guess like that’s my case for why I like
02:09:29 tends to behave in ways that, you know,
02:09:31 occasionally traditional academic types
02:09:33 criticize as being reckless.
02:09:35 But I mean, on the other hand, you know,
02:09:37 there’s definitely real benefits that come from
02:09:41 like just taking a rigorous approach,
02:09:46 especially when, you know, you know what the thing,
02:09:49 like, you know what the specification is
02:09:51 of what you’re trying to get.
02:09:53 And like, you’re trying to kind of improve your ways
02:09:56 or provide protocols that actually provide that.
02:09:58 And like, you know exactly what you’re looking for.
02:10:00 I feel like realistically, you probably wants to do
02:10:04 both kinds of analysis.
02:10:06 And like, sometimes you even want to do
02:10:07 both kinds of analysis in stages, right?
02:10:09 Like you have, you want to do more quick and dirty things
02:10:11 and even wants public feedback on the quick and dirty stuff.
02:10:14 And then later on you formalize it more
02:10:16 and then you get more feedback.
02:10:18 Like in general, I guess I feel like the norms of research
02:10:23 in the future, like the internet has just changed so much.
02:10:27 There’s no way that it’s not going.
02:10:29 And you know, it’s even changed like collaboration structures
02:10:32 and like the patterns in which we work with each other.
02:10:35 There’s no way that the correct structure
02:10:38 for collaborative research is the same
02:10:40 as what it was 15 years ago.
02:10:42 But like, what combination of these existing components
02:10:46 and of new ideas it is, like that’s something
02:10:48 that’s, you know, totally legitimate
02:10:50 to kind of fight it out.
02:10:52 And I think it’s great that there’s different ecosystems
02:10:54 that have different attitudes to things.
02:10:56 Like, you know, I think, you know,
02:10:57 there’s a big possibility that, you know,
02:10:59 things that the Ethereum,
02:11:01 ways that the Ethereum ecosystem approaches some problems
02:11:03 is totally wrong.
02:11:04 And if there’s other ecosystems with different principles
02:11:06 and they do well, that’s something that we can learn from.
02:11:09 In the spirit of the depth for a search,
02:11:11 can you comment on AI safety?
02:11:13 And some people are really worried
02:11:15 about the existential risks of artificial intelligence.
02:11:18 Is there something you could say that’s hopeful
02:11:22 about how we avoid in the same kind of line of reasoning
02:11:26 about creating formal models versus kind of looking
02:11:30 outside the model into what the real world actually is like?
02:11:33 Is there some lessons from that we can take
02:11:36 and map onto the AI safety world
02:11:39 where the potentials of the technology,
02:11:41 whether it’s in autonomous weapon systems
02:11:45 or just the paperclip problem
02:11:47 that we can avoid AI destroying the world?
02:11:51 So my impression is actually that, like,
02:11:54 this is more of a kind of far away impression
02:11:56 and it could be wrong, that it might even be
02:11:58 that one of the challenges is that AI is not formal enough.
02:12:01 Like, because AI is very practitioner oriented, right?
02:12:05 Like, it’s all about like, hey, I found a couple of hacks
02:12:08 and look, I ran them and look,
02:12:09 they seem to improve classification accuracy
02:12:12 from 0.684 to 0.773.
02:12:15 So a lot of the time there just isn’t actual science behind
02:12:20 why this hack works and why this other hack doesn’t work.
02:12:23 You just sort of like trial and error your way into it.
02:12:27 And I could see how that approach works,
02:12:30 but at the same time, like,
02:12:31 that approach is not good for eligibility, for example.
02:12:34 Like, it’s not good for like understanding
02:12:36 what the heck is actually going on,
02:12:37 like how these kinds of systems conceivably might fail.
02:12:42 Like, there’s even, you know, a debate on like,
02:12:45 can you take GPT3 like things and just scale them up
02:12:49 and their intelligence will continue to improve
02:12:51 or is there just like some types of reasoning
02:12:53 that they’re fundamentally bad at
02:12:54 and like they’re not gonna get good at it
02:12:57 no matter how much you like scale this exact same approach
02:12:59 and add more hardware to it.
02:13:01 So having like thinking about what’s going on
02:13:06 more explicitly, I mean, my understanding
02:13:08 is that a big part of AI safety research
02:13:10 is trying to do that sort of stuff, right?
02:13:13 Formalize.
02:13:14 Yeah, formalize, try to improve just AI eligibility,
02:13:19 like trying to understand, you know,
02:13:21 if the AI makes some classification
02:13:23 so we can actually see like what happens
02:13:25 and like what’s going on in the middle, right?
02:13:27 Whereas with crypto or with traditional cryptography,
02:13:30 you know, it’s like very much not,
02:13:33 well, okay, I mean, I shouldn’t quite say that.
02:13:35 It’s, traditional cryptography is this interesting mix
02:13:37 of being very formal and being very informal
02:13:40 because it’s very formal with,
02:13:43 given these security assumptions,
02:13:44 prove that the protocol works
02:13:46 under these security assumptions.
02:13:47 The places where it’s very informal is like,
02:13:49 well, how do we even know that there isn’t
02:13:51 an efficient algorithm for factoring numbers?
02:13:53 Yeah, we kind of tried it for 40 years.
02:13:56 And then, you know, so far,
02:13:57 no one’s found anything better
02:13:58 than the general number field sieve.
02:14:00 And like, okay, fine, we’ll just assume it’s fine.
02:14:03 You know, how do we know you can’t find the discrete log
02:14:07 between two elliptic curve points?
02:14:08 Like, nope, did it a couple of decades,
02:14:11 no one’s found anything faster
02:14:13 than like baby step, giant step stuff.
02:14:15 So that’s,
02:14:18 and like, there’s definitely ways
02:14:24 in which that approach really makes sense, right?
02:14:25 Because at least you can concentrate your analysis
02:14:28 on a small number of building blocks.
02:14:30 And like, you know, you do have some intuitive reasoning
02:14:33 about those building blocks,
02:14:33 but like at least there is a small number
02:14:35 of building blocks and lots of people are looking at them.
02:14:38 And then everything else just sort of gets formally built
02:14:40 on top and you actually can like mathematically reduce
02:14:43 the security of big things to building blocks, right?
02:14:45 Like you can have mathematical proofs
02:14:47 that say, you know, if you make a ZK Synarch
02:14:51 of a yes statement when in reality that statement is false,
02:14:54 then you can use that to like extract information
02:14:59 out of elliptic curves that, you know,
02:15:00 it completely breaks the problem or something like that.
02:15:03 So.
02:15:04 So ZK Synarch is an example where formalism is beneficial.
02:15:08 Absolutely, yeah.
02:15:09 And so maybe you can have the same kind of stuff
02:15:11 in the AI safety within AI systems
02:15:14 that you can get a hold of some kind of aspect
02:15:18 of the systems that you can control provably.
02:15:21 And then in blockchains and cryptocurrency,
02:15:24 I think the one area where consensus mechanisms
02:15:27 is still more an art than a science
02:15:29 is that these aren’t just like technological systems,
02:15:32 they’re crypto economic systems, right?
02:15:33 And they make assumptions about people.
02:15:35 And which assumptions you can make about people
02:15:37 is not something that you can prove with math.
02:15:39 Right, even just the basic 51%.
02:15:43 Exactly.
02:15:44 Honest.
02:15:45 Can you trust the 51%?
02:15:47 If you can’t trust the 51%,
02:15:49 can you trust the other 49% to be able to coordinate
02:15:53 on like making their own fork?
02:15:55 What will happen to coin prices?
02:15:56 Like how do people as human beings react to these events?
02:16:00 Like there’s all of these assumptions.
02:16:02 But no, at the same time,
02:16:03 look, if you can write down the assumptions,
02:16:05 then you can like do formal things with them.
02:16:08 I almost forgot to ask you
02:16:10 about one of the most exciting aspects of Ethereum.
02:16:13 I mean, it’s non technical.
02:16:14 I think it’s a societal, it’s social, which is NFTs.
02:16:19 So what do you think about the explosion of NFTs
02:16:24 in the recent months, especially in the art world
02:16:28 and beyond, and what does the future look like?
02:16:31 So this is maybe the social impact on the world,
02:16:35 on the individual creators of all kinds.
02:16:38 Like is that something you’ve actually expected to see,
02:16:42 NFTs having this kind of impact?
02:16:44 And beyond, what do you think will happen
02:16:48 in the digital space with NFTs,
02:16:51 in virtual reality, in gaming, all those kinds of things?
02:16:55 I was definitely surprised by like NFTs in particular.
02:16:58 Like I even actually think might be on record somewhere
02:17:02 on some tech conference panel.
02:17:03 Like they were asking, you know,
02:17:05 it was one of those overrated or underrated sections
02:17:07 and ask about NFTs and I thought,
02:17:09 and I said like, hey, I think NFTs are overrated.
02:17:11 And, you know, in retrospect,
02:17:12 that turned out to be quite wrong.
02:17:14 I think, like, I guess I just personally
02:17:17 can’t really relate to this concept
02:17:19 of like spending a lot of money on a thing.
02:17:22 Like there’s nothing, you know,
02:17:24 there’s no clear kind of understanding
02:17:27 of why that thing would maintain its value.
02:17:32 Uniqueness of a thing having value.
02:17:34 Right, exactly.
02:17:36 That’s like, I definitely like cannot really understand,
02:17:39 you know, the psychology behind like buying,
02:17:42 you know, paying $200,000 for original art painting.
02:17:44 I’d be like, you know, if I had a mansion,
02:17:46 just like give me photocopies of everything.
02:17:48 You can hang three photocopies of the Mona Lisa section.
02:17:52 Why would I even have the Mona Lisa?
02:17:53 I think I’d probably just like have some Nyan Cats
02:17:55 or something.
02:17:56 That’s one thing where mathematics
02:17:57 or theoretical computer science cannot formalize
02:18:00 why the heck NFTs are valuable.
02:18:01 Exactly.
02:18:02 But the thing that makes me very happy about the space
02:18:07 now that it has happened is that,
02:18:09 and this gets back to the conversation
02:18:11 that we had at the beginning, right?
02:18:12 Like I’m interested in this concept
02:18:14 of decentralized public goods funding, right?
02:18:17 Like I want things that are good and valuable
02:18:20 to as much as possible also be things
02:18:23 that can economically sustain the people
02:18:25 who produce them, right?
02:18:26 Because if you don’t have that,
02:18:29 then either the public goods just don’t get produced at all
02:18:32 or people make like centralized versions
02:18:34 that have some of the properties and try to be substitutes,
02:18:37 but actually just like concentrate control
02:18:39 in a very small group, right?
02:18:41 And both of those things are not very nice.
02:18:43 So the nice thing about NFTs would be,
02:18:46 well, if you’re an artist and you can just mint NFTs
02:18:49 and this is a source of revenue,
02:18:50 then like great, that’s another stream of revenue
02:18:52 for creative work that often does still get underfunded
02:18:57 and that’s amazing.
02:18:58 Okay, let me ask you a weird question.
02:18:59 We talked about Craig Wright a little bit,
02:19:01 but a lot of people write to me, one of two emails.
02:19:06 One email is calling any coin outside of Bitcoin a scam
02:19:15 and then the other email is saying,
02:19:17 my favorite coin is the best coin,
02:19:21 it’s going to save the world, whatever that coin is.
02:19:25 And so I sit back and I look, I have no idea.
02:19:28 I try to figure out like the humans that I trust
02:19:33 in this space, just the basic human qualities,
02:19:38 but do you think some coins are scams?
02:19:43 Do you think some coins, maybe another way to ask it,
02:19:46 are scamier than other coins?
02:19:48 How are people that are looking outside of this space
02:19:51 where there’s all of these cryptocurrencies
02:19:53 supposed to figure out what is a scam and not,
02:19:57 or how to use the right kind of language
02:19:59 when talking about them?
02:20:01 Because there’s the harshness of the language
02:20:03 from the Bitcoin maximalists that doesn’t just say
02:20:06 everything’s a scam, including Ethereum,
02:20:09 but they use terms like shit coin
02:20:11 that says it’s not only a scam, it’s like a waste of time.
02:20:14 I mean, every word you can use, they say that.
02:20:17 That’s very harsh.
02:20:18 And then some people just apply the word scam
02:20:22 much, much more conservatively and just refer to coins
02:20:26 that legitimately are trying to scam people
02:20:29 out of their money as scams.
02:20:31 So what do we do with this word scam?
02:20:33 Should it ever be applied to coins?
02:20:35 And is it a binary thing or is it a gray area?
02:20:41 I think it’s definitely a gray area.
02:20:42 There’s definitely things that are really and actually scams.
02:20:46 I mean, Bitconnect would be one example
02:20:48 of something that’s way on the scam spectrum.
02:20:51 Did you see their 2017 promotional video, by the way?
02:20:54 Of Bitconnect?
02:20:55 Yeah, hey, hey, hey, what’s up, what’s up, what’s up?
02:20:59 Bitconnect!
02:21:01 It was this three minute, 48 second video
02:21:03 that was just of this guy making this totally crazy rant.
02:21:07 And it was at some conference in Vietnam
02:21:10 where they were, of course, trying to convince
02:21:12 a whole bunch of people to buy this coin
02:21:14 and they had these claims about how it would go up in value.
02:21:17 That was definitely the peak of these pure,
02:21:23 completely scammy coins.
02:21:24 And that was definitely really terrible.
02:21:27 And I feel like we have less,
02:21:29 despite cryptocurrency as a whole being bigger,
02:21:31 we actually have quite a bit less of that now.
02:21:34 But then, of course, there’s this spectrum
02:21:37 of things that are not completely scams
02:21:40 and then things that are not scams
02:21:42 and that are technically totally fine projects
02:21:44 but where their community is just incredibly sketchy
02:21:48 and then all the way to things
02:21:50 that are where the community is nice
02:21:52 but maybe the project is just fundamentally incapable
02:21:55 of achieving what it’s trying to do
02:21:56 or in the community doesn’t realize
02:21:57 and then really good projects, right?
02:22:00 So if you wanna go a step,
02:22:04 like if that’s 100% scam,
02:22:06 then what would I call say 80% scam?
02:22:09 Well, like Bitcoin SV is one example.
02:22:11 This is a Craig Wright’s fork of Bitcoin.
02:22:13 Theoretically, it’s a blockchain, right?
02:22:15 It’s a fork of Bitcoin.
02:22:17 It has some 512 megabyte blocks.
02:22:20 If you really wanted to, you could use the blockchain.
02:22:23 It satisfies the property
02:22:24 so that you can send transactions onto it.
02:22:27 You can probably use it as a backup
02:22:30 to store your files if you really wanted to
02:22:32 just because it has so much space.
02:22:35 It might fail, but at the same time,
02:22:42 as we basically said, Craig Wright is a scammer
02:22:46 and half the community is just totally batshit insane.
02:22:49 So the humans of a particular cryptocurrency
02:22:53 is what makes for a scam and not like the humans at the top
02:22:56 that have a voice guiding the community.
02:22:58 Yeah, I think in the case of BSV,
02:23:01 the humans, they make just completely wrong
02:23:04 and just obviously wrong claims
02:23:07 about what BSV is capable of accomplishing
02:23:10 and what it can say we could accomplish.
02:23:12 And there’s just a lot of aspects of it
02:23:15 that make it feel like a money grab.
02:23:17 So that’s one example.
02:23:18 And then you gotta go a bit further
02:23:20 and then you have the trons of the world.
02:23:23 And that’s a platform, you can use it,
02:23:26 you can do stuff on it.
02:23:27 But at the same time, they did plagiarize the IPFS white paper
02:23:32 and then they…
02:23:34 So there’s scammy qualities.
02:23:36 See, the thing that throws me off a lot,
02:23:38 it’s very difficult for me, is that most coins,
02:23:43 but the ones that make me feel like are scammy
02:23:47 have a large community of people
02:23:49 that are super positive about it.
02:23:53 Like, and they’ll write to me.
02:23:56 Now that said, sort of on the flip side of that,
02:24:00 Bitcoin people are also very positive.
02:24:04 There’s some sense in…
02:24:05 The reason I was having like squinty eyes
02:24:09 looking at Bitcoin for quite a while
02:24:12 is like, why is everyone so positive?
02:24:14 I was getting total cult vibes.
02:24:18 Like the ideas are not grounded in truth,
02:24:22 but are grounded in an obsession
02:24:25 of like when you can artificially conjure up a truth,
02:24:29 which is why I was a little bit like worried about Bitcoin.
02:24:31 I think I’ve learned a lot since then
02:24:33 to where like, I learned to separate the community
02:24:38 from the ideas.
02:24:39 And I think Bitcoin is a revolutionary idea on many fronts,
02:24:43 but still a community that’s like dogmatically excited
02:24:48 about something, whatever that is, makes me skeptical.
02:24:51 Maybe it’s just like my upbringing,
02:24:53 but when everybody’s really excited about something,
02:24:56 it makes me skeptical.
02:25:02 But it also makes me difficult to decide
02:25:03 what is this scam or not,
02:25:04 because some of the most exciting ideas in this world
02:25:07 have a community of people who are excited about it, right?
02:25:09 Because it’s, I don’t know.
02:25:12 I think space exploration is super exciting.
02:25:14 And there’s people, I know a lot of them
02:25:17 that are exceptionally excited about space exploration.
02:25:21 Does that mean it’s a scam?
02:25:23 No.
02:25:24 So I don’t know what to do with that.
02:25:26 And so most I just try to stay away, I suppose,
02:25:28 but it’s unfortunate because I’m sure there’s a lot
02:25:31 of exciting technologies in that space.
02:25:33 Like in the case of Bitcoin,
02:25:34 like I would definitely not call Bitcoin a scam.
02:25:36 Right.
02:25:37 But I would also not call Litecoin a scam.
02:25:43 There’s people who call Litecoin a scam
02:25:45 because they just like say, oh, look,
02:25:47 it has no fundamental use case.
02:25:49 And the concept of being silver to Bitcoin’s gold
02:25:52 is just like stupid.
02:25:53 And like milli Bitcoin is the silver to Bitcoin’s gold.
02:25:58 But at the same time, like if you have these people
02:26:03 who just, they do seem to earnestly believe this.
02:26:06 And like they’re trying to just like make Litecoin
02:26:09 be a Litecoin as best as they can.
02:26:11 Then like, to me that’s enough for it to not be a scam.
02:26:17 And then, so yeah, I think the biggest gray area
02:26:21 is definitely between like projects that are earnest
02:26:27 but they have just all sorts of these
02:26:30 like different combinations of flawed qualities to them.
02:26:34 I mean, the ones that legitimately is a scam
02:26:36 is when the key people that are at the head of the project
02:26:40 are intentionally lying.
02:26:42 And I think as long as the intent
02:26:45 is to try to do good in the world,
02:26:48 even if your actual implementation of that is flawed,
02:26:51 I think that’s not a scam.
02:26:53 It could be flawed ideas, it could be wrong ideas,
02:26:55 but it’s not a scam.
02:26:58 I’m learning to navigate this space.
02:27:00 Yeah, it’s definitely a very challenging space
02:27:03 to navigate, I mean, it’s in some ways
02:27:07 the reflection of the world at large.
02:27:10 Yeah, and as we’ve said, maybe offline
02:27:13 that the fact that money is involved
02:27:15 makes it a little bit more complicated
02:27:17 that lives can be ruined by the choice of technologies
02:27:24 that are taken on.
02:27:25 So it makes it more real, more painful,
02:27:28 more like elevated the impact of this.
02:27:31 Like imagine like Mac versus PC wars
02:27:35 if everyone who bought a MacBook had 10 Apple shares
02:27:38 inside of it, and everyone who had a PC
02:27:40 had 10 Microsoft shares inside of it.
02:27:42 And then you had the elites who bought their Macs
02:27:45 back in 1983, and then they spent $500 debt,
02:27:48 and now they have $40 million,
02:27:50 and they just think that they’re these gurus
02:27:52 who understands the future of finance and geopolitics,
02:27:55 and they make theories about why Apple is the one
02:27:59 that’s gonna bring freedom to the world,
02:28:00 and Windows is secretly allied with the axis of evil.
02:28:05 Oh, that’s brilliant.
02:28:06 So yeah, this is so brilliant.
02:28:07 So I think the right way to think about this
02:28:09 is we map some of the cryptocurrency battles
02:28:12 into the space of like EMAX versus VIM,
02:28:14 or Apple versus PC, if there were some stock
02:28:19 that came along with each implementation of each PC,
02:28:23 each Mac, that’s fascinating.
02:28:25 This is 100% correct, 100% correct.
02:28:28 Because then that really energizes the armies
02:28:31 of people debating over this in a way
02:28:32 that something without money does not.
02:28:35 Okay, let me ask you about something really fascinating
02:28:38 that you are also excited about, which is longevity,
02:28:42 antiaging.
02:28:44 You have donated money to the SENS Foundation,
02:28:48 so you have an interest in this whole space
02:28:50 of lifespan research.
02:28:53 What’s your vision here?
02:28:54 Or what do you hope to see in antiaging
02:28:58 and longevity research?
02:28:59 I think I hope to see the concept
02:29:03 of seeing your parents and grandparents die
02:29:06 just slowly disappear from the public consciousness
02:29:08 as an experience that happens
02:29:10 over the course of half a century,
02:29:12 the same way that getting lost in a city
02:29:15 slowly disappeared over the public consciousness
02:29:16 over the last 50 now that we have smartphones.
02:29:19 The thing you have from Nick Bostrom,
02:29:21 the essay pinned in your Twitter argues
02:29:26 that essentially death is almost unethical.
02:29:33 The fact that we don’t do something about this thing that,
02:29:36 this, in the essay, is a dragon
02:29:38 that keeps murdering everybody around us,
02:29:43 including our parents and grandparents,
02:29:46 is, the fact that we don’t try to do something aggressively
02:29:49 about that dragon doesn’t make any sense.
02:29:53 So you think this is a battle worth fighting,
02:29:58 a battle for immortality, or at least longevity?
02:30:01 I’d say absolutely.
02:30:02 And I’d say a battle where we really have started
02:30:07 over the last five years in particular
02:30:09 to see the first cracks of humanity
02:30:13 starting to make things that look like
02:30:16 they’ll turn into victories.
02:30:18 Do you think humans can eventually live forever?
02:30:22 And maybe as a side comment to that,
02:30:26 what technology do you think will enable that
02:30:28 as a genetic modification?
02:30:29 Is it cloning, is it uploading your mind?
02:30:32 Define forever, like are we talking 1,000 years,
02:30:34 a million, 10 to the 14, 10 to the 45?
02:30:38 Well, let’s start, as I tweeted today,
02:30:40 eventually everything, the universe will be filled
02:30:43 with supermassive black holes.
02:30:44 So that forever, maybe like backtracking to where.
02:30:49 We’ll have 10 to the 16 years to figure it out.
02:30:52 Yes, exactly.
02:30:55 Yeah, maybe travel between the multiverse,
02:30:59 between the different universes of the multiverse.
02:31:02 I mean, but forever meaning like, you know, millennia.
02:31:11 I definitely think that we can get there.
02:31:13 I definitely think that it’s the sort of thing
02:31:15 that’s going to take an insanely huge amount of work.
02:31:19 And I definitely think it’s the sort of thing
02:31:21 where once we figure out the first crop of problems
02:31:24 and like people start living to 150,
02:31:27 we’ll just realize that there’s like 10 other problems
02:31:29 that kill you half as slowly and we’ll have to do more work.
02:31:32 But the good news is that this is Aubrey’s longevity
02:31:36 escape velocity argument that if you get everyone
02:31:38 to live to 150 now, then you have half a century
02:31:41 to fix all those other problems as well.
02:31:44 So I’m optimistic for that reason.
02:31:47 I think you definitely do not want to underestimate
02:31:52 human ingenuity, especially over the longterm.
02:31:54 Like just to look at what happens to computers
02:31:56 between the ENIAC in 1950 and we’re around 2020, right?
02:32:00 Like that’s a span of 70 years.
02:32:02 So like, you know, both of us, I think,
02:32:04 with just present day technology,
02:32:08 I have like at least 70 more years to live.
02:32:11 So just like imagine what kind of sea change
02:32:12 will happen in biomedicine during that time.
02:32:16 And the other thing that made me optimistic
02:32:17 is that I actually think COVID has been this kind of event
02:32:22 that’s really kind of pushed biomedicine
02:32:26 and especially like activist approaches to biomedicine
02:32:29 really into the public consciousness, right?
02:32:32 Like it basically, it’s put people into this mindset
02:32:36 that, you know, wait, but like, you know,
02:32:37 it’s not just like, you know, the bits and tweets
02:32:39 that are gonna save the world, you know,
02:32:41 the bio is actually like super important and huge.
02:32:46 And, you know, ultimately what’s ending COVID basically,
02:32:51 you know, is the vaccines
02:32:53 and the vaccines have just been, you know, amazing.
02:32:56 And if you can take that energy and also like this,
02:33:03 I think philosophical attitude that I’ve noticed,
02:33:05 like the way that I would describe
02:33:07 the philosophical attitude here,
02:33:09 this is going more depth first,
02:33:12 is that I think the way that I kind of interpret
02:33:15 part of what I would call late 20th century ideology
02:33:19 is that there is this mentality that, you know,
02:33:21 nature is good and disruptions from nature are bad
02:33:25 and generally you wanna minimize disruptions from nature.
02:33:28 And like this exists everywhere in the political spectrum.
02:33:31 So there’s nature as in literal nature.
02:33:33 And my view is that like the right wing version of that
02:33:35 is markets as nature, right?
02:33:37 Like, you know, the way that like that kind of philosophy
02:33:44 talks about, you know, markets
02:33:45 and like the goal of not interfering with them,
02:33:48 like, you know, it is very kind of like nature styled.
02:33:51 And then of course, you know, the conservative one,
02:33:53 which is like traditional culture that existed
02:33:56 before the activists started controlling everything
02:33:59 as also being a kind of nature.
02:34:01 But the 21st century attitude and like really COVID,
02:34:05 you know, has flipped a lot of minds
02:34:08 because with COVID what’s happened is that,
02:34:10 well, no, like it’s not, nature is not safe, right?
02:34:13 The default is that is like, you know, untold misery
02:34:17 and suffering in tens of millions of people dying.
02:34:19 The only way out for us is through
02:34:22 like basically human ingenuity.
02:34:25 And that frame of mind is one that’s like much more friendly
02:34:30 to one, this other change of minds that I want to see,
02:34:36 which is like basically treating aging
02:34:37 as an engineering problem, right?
02:34:39 Like the default is all 7.8 billion human beings
02:34:43 that are currently on this earth are gonna die
02:34:44 and they’re gonna live their last decade of life
02:34:47 in debilitating pain.
02:34:48 And the only way to stop that is human ingenuity.
02:34:51 And, you know, we don’t have that solution yet,
02:34:54 but, you know, if we work hard, we will.
02:34:56 And more and more people on the biology side,
02:34:58 computational biology are basically converting
02:35:00 the mess of the human biology into an engineering problem.
02:35:05 And once that conversion is happening,
02:35:07 looking at the genetic code, the proteins,
02:35:09 all those kinds of things, once that conversion happens,
02:35:12 you can now apply the tools that we know
02:35:15 how to solve engineering problems to solving it that way.
02:35:18 And then there’s also the other version, which is, you know,
02:35:21 why do we romanticize this meat vehicle
02:35:24 that ultimately is just the thing that carries the brain,
02:35:28 maybe we can more and more convert ourselves
02:35:30 into the digital realm.
02:35:32 This is where like Neuralink have the computer interfaces
02:35:35 and then achieve immortality in the space of information
02:35:38 and the digital space versus the biology space.
02:35:40 That stuff’s interesting too, I agree.
02:35:42 Again, I think, you know, we have enough resources
02:35:45 and we should just try all the parallel tracks.
02:35:48 You know, it’s great that we have people
02:35:50 just trying to make our bodies work.
02:35:51 It’s great that we have people trying to upload
02:35:54 or improve brain scanning.
02:35:56 It’s also great that we have just like people
02:35:58 improving cryonics.
02:35:59 So like we could just like, you know,
02:36:01 go to sleep in the freezer and eventually,
02:36:04 hopefully sometime in the future, you know,
02:36:06 Hal Finney is gonna be able to wake up,
02:36:08 all of this, you know, anyone who gets cryo chronically
02:36:13 frozen today will be able to wake up,
02:36:15 but you know, that’s a bet, right?
02:36:17 That’s the last resort.
02:36:18 And then the other interesting thing
02:36:20 about the like extreme uploading approach, right,
02:36:23 is we’re excited about space.
02:36:27 And one of the points that a lot of science
02:36:32 or like hard science fiction types make
02:36:34 is that, you know, if you want to explore space,
02:36:36 that’s a lot easier if you’re not a human, right?
02:36:38 Like one example of this is that, you know,
02:36:40 in the context of humans, we’re talking about like,
02:36:42 oh, we’re gonna be able to go to the moon,
02:36:44 oh, we’re gonna be able to go to Mars,
02:36:46 but there’s this project called Starshot, I believe, right?
02:36:49 That’s basically trying to send spacecraft
02:36:52 to mini spacecrafts to Alpha Centauri,
02:36:55 and they literally believe that they’re going to be able
02:36:58 to get spacecraft over to Alpha Centauri
02:37:00 like four light years away by like the 2060s.
02:37:03 Now, I mean.
02:37:04 By traveling close to the speed of light, yeah.
02:37:05 Exactly, like, so the way it works is, you know,
02:37:08 you have these light sails,
02:37:09 like you basically take these a spacecraft
02:37:10 and you shine a laser at it,
02:37:12 and the laser is insanely strong,
02:37:13 quickly accelerated at a hundred Gs or,
02:37:17 no, I think it was 10,000 Gs
02:37:18 until it gets to 20% of the speed of light,
02:37:20 and then, you know, it goes on your merry way, right?
02:37:22 So if you wants to be in,
02:37:27 like personally explore the Alpha Centauri system
02:37:30 within like two centuries or one century,
02:37:33 then, you know, being a robot is like,
02:37:37 by far the most practical way to do it,
02:37:39 because there’s no way that a human being
02:37:40 can survive 10,000 Gs.
02:37:42 So it’s definitely interesting longterm,
02:37:45 but at the same time,
02:37:47 there’s definitely a lot of like psychological hangups
02:37:50 and a lot of like deep philosophy
02:37:52 that we’ll just have to grapple with to get there.
02:37:55 I think what it hangs on the topic
02:37:57 of whether we can convert consciousness
02:37:59 into an engineering problem.
02:38:01 So like, is consciousness tied to our biology?
02:38:05 Because the moment we can convert consciousness
02:38:07 into a digital form,
02:38:09 then we can send it with that light sail
02:38:11 to Alpha Centauri.
02:38:12 Until then, a robot is not carrying anything
02:38:16 except maybe some basic knowledge like Wikipedia.
02:38:18 It’s not carrying the flame of human consciousness.
02:38:21 I have high hopes for converting consciousness
02:38:25 into an engineering problem.
02:38:27 In fact, I think it’s not as difficult as people think.
02:38:30 I’m like, yeah, I agree with that.
02:38:31 I’m definitely in the camp that consciousness
02:38:33 is a property of the algorithm
02:38:35 and not a property of a brain structure.
02:38:38 The other fun, like the kinds of philosophical things
02:38:41 we’d have to grapple with is like,
02:38:43 once you upload yourself, like you can hit Control C,
02:38:46 you know, like it wouldn’t be lovely
02:38:48 to have like 10 copies of Alex Friedman
02:38:50 and then like we could just interview everyone.
02:38:53 So this is, I mean, this is, I have to ask this question.
02:38:56 It’s a difficult one,
02:38:57 which I don’t think it’d be wonderful, first of all.
02:39:01 Sure.
02:39:02 So in the following way,
02:39:04 and this has to do with immortality as well,
02:39:06 there’s something about scarcity that creates value.
02:39:11 Or there’s a bunch of philosophers,
02:39:13 Viktor Frankl, Bernard Williams, Ernest Becker,
02:39:16 they argue that death or the scarcity of life
02:39:20 creates meaning.
02:39:21 The reason we, life is beautiful,
02:39:24 the reason so many moments of experience
02:39:27 of love or delicious food,
02:39:31 all those things are made delicious
02:39:34 because they’re finite, because they end,
02:39:36 and because we don’t have that many of them.
02:39:39 And there’s a kind of worry
02:39:40 that if we extend the human lifespan,
02:39:43 if we achieve immortality, or if we, God forbid,
02:39:46 clone me multiple times,
02:39:51 then you lose the richness of what it means
02:39:53 to have this life, to have this experience.
02:39:56 Is that worry you at all?
02:39:58 Do you think there’s some aspect
02:39:59 to which death does in fact give meaning to life?
02:40:02 I guess like the one historical parallel,
02:40:05 and this might be a bit unfair,
02:40:06 is that there have been philosophers
02:40:09 that have said things like,
02:40:11 war gives meaning to human collectives,
02:40:14 and the struggle for supremacy between nations and races
02:40:18 is this big driver of progress
02:40:21 that ensures that everyone strives to be their best.
02:40:25 And of course, this viewpoint got into the head
02:40:28 of a crazy Austrian guy, and 20 years later,
02:40:30 his soldiers were shooting at my grandparents.
02:40:33 So these days we don’t really have that,
02:40:36 but yet life still feels meaningful.
02:40:39 We’ve still found other ways to,
02:40:43 there’s still a striving for technological progress.
02:40:47 There’s still a striving for self improvements in general.
02:40:52 And it turns out that you don’t actually need
02:40:55 to have existential conflicts in order to have that.
02:40:58 Now, maybe you need conflict,
02:40:59 but we have other kinds of conflict, right?
02:41:01 Like we have competition between businesses,
02:41:03 competition between political ideologies,
02:41:05 competition between projects.
02:41:07 And so these are, like whatever the psychological needs are,
02:41:12 like they’re just our substitutes for it.
02:41:14 So I guess like, yeah, so if we trying to say,
02:41:19 I feel like once we start living to the age of 200,
02:41:24 then like, I’m just intuitively expecting
02:41:27 that we’ll see substitutes emerge in the same way.
02:41:31 Yeah, we’ll create conflicts of other sorts
02:41:35 that lead to less human suffering than wars do.
02:41:38 Like we’ll just start playing Diablo four, five, six,
02:41:42 cause you die in video games.
02:41:44 So maybe we’ll get some of the inkling of scarcity
02:41:48 through the activities we partake in
02:41:50 as opposed to our own body dying.
02:41:52 I mean, I feel shitty when I, like you can,
02:41:55 I remember in Diablo three, you can play in hardcore mode
02:42:00 where if you die in the game, your character’s dead.
02:42:03 Maybe we’ll get the richness that we currently get from life
02:42:09 by having like little artificial versions
02:42:11 of ourselves that die.
02:42:12 Interesting enough, as I’ve just like personally
02:42:15 spent more time in this world, I’ve started realizing
02:42:18 that there is a concept of like real finiteness
02:42:22 that still exists and it might even still be a thing
02:42:25 that provides meaning that doesn’t require anyone
02:42:27 to actually die.
02:42:28 Like for example, like how many people from middle school
02:42:32 or even high school are yours?
02:42:34 Like do you still talk to regularly?
02:42:36 I happen to be close friends with like four or five of them.
02:42:39 Okay, well, like in my case, the answer is zero
02:42:41 for middle school and two for high school.
02:42:43 But you’re right.
02:42:43 Right.
02:42:44 It dropped close to zero.
02:42:45 Exactly, it dropped a lot, right?
02:42:47 And so like there’s a lot of these just like relationships
02:42:50 that end up being very finite.
02:42:52 A person changes their, I feel like a person changes enough
02:42:56 of their worldview after 25 years.
02:42:58 Was there even a study about this?
02:42:59 Something like a person and themselves 25 years later
02:43:03 are about as different as like two different people
02:43:06 or something like this.
02:43:08 So, I mean, just like you can have conflict
02:43:10 without bloodshed, I think you can have finiteness
02:43:14 and even the necessary sorrows of finiteness
02:43:18 that give meaning without like literally anyone
02:43:21 having to end their life.
02:43:22 And hopefully if we do extend our life,
02:43:24 we’ll figure out ways to extend the period of time
02:43:27 where there’s neuroplasticity
02:43:30 to where we could change our worldviews continually
02:43:33 throughout that time.
02:43:34 So you can have these different phases of life.
02:43:38 I thought it would be fun to hear you speak a little Russian.
02:43:41 Do you speak Russian?
02:43:42 Yes, of course.
02:43:44 How did your Russian roots help you?
02:43:48 That’s an interesting question.
02:43:50 What can you say in Russian about that?
02:43:52 What can I say about my Russian roots?
02:43:55 When I just look at other projects,
02:44:03 other people in the blockchain industry,
02:44:07 sometimes when I look at what Russian people are doing,
02:44:12 what other people are doing,
02:44:14 I can sometimes feel that these people who are Russian
02:44:21 have something that feels similar to me,
02:44:27 but I don’t know how to explain it.
02:44:32 Do you think there’s, so for people who don’t speak Russian,
02:44:35 that Vitalik said that there is something to the spirit
02:44:40 of the people that are Russian
02:44:42 that are working in the cryptocurrency world
02:44:44 that is a little bit different
02:44:46 and it’s something that connects to some kind of aspect
02:44:51 of your own self, some kind of roots there.
02:44:54 And it’s kind of interesting.
02:44:56 Do you think that there’s, does it make you sad
02:44:59 that there’s these two different worlds
02:45:01 that are sort of in part disconnected by language?
02:45:07 And I’m sure the same could be the case with China
02:45:09 and other parts of the world,
02:45:11 where the language slows the transmission of the beauty
02:45:17 of the culture in a certain kind of way
02:45:19 where you can’t truly collaborate.
02:45:21 Like you can all speak English,
02:45:23 so you’re collaborating on maybe a technical level,
02:45:25 but you’re not collaborating on the level
02:45:28 of some deep human connection.
02:45:30 Do you see that being able to speak both languages?
02:45:34 There’s definitely benefits, I think,
02:45:35 to be able to speak multiple languages.
02:45:38 And once you can, you discover that even your mindset changes
02:45:44 while you’re speaking in one language versus the other.
02:45:47 People have told me this, like, when I speak Russian,
02:45:50 I sound more, I guess, to the point and pragmatic.
02:45:54 When I speak Chinese, I sound more cute.
02:45:56 When I speak English, I’m something else.
02:46:00 I guess there’s definitely a richness that you’re missing
02:46:06 if you’re only in one of these language bubbles.
02:46:10 But I guess the arguments on the other side would be that
02:46:14 if everyone spoke the same language,
02:46:16 then there would just be one bubble.
02:46:19 This is the challenge, I think.
02:46:22 There are actually benefits to having cultural diversity,
02:46:25 and you definitely don’t want the entire world
02:46:27 to be too conformist.
02:46:30 Well, one of the interesting things about crypto
02:46:31 is that it’s just a culture that actually manages
02:46:34 to somehow have its uniqueness and even preserve its independence
02:46:40 from all of these surrounding countries
02:46:42 despite being embedded in all of them.
02:46:44 So it spans outside of the geographic boundaries,
02:46:48 and language in some ways does as well.
02:46:51 And the way these cultures, these bubbles are created,
02:46:54 I mean, they overlap in interesting ways.
02:46:56 It’s almost like a hierarchy,
02:46:57 and the same is the case of the crypto world.
02:47:00 There’s communities associated with these cryptocurrencies.
02:47:03 There’s communities within those communities, and it’s…
02:47:06 Yeah, I mean, I think it’s definitely sad
02:47:09 whenever these groups are fighting each other,
02:47:13 and it’s definitely good for them if people can cooperate more.
02:47:19 But at the same time, just having groups of people
02:47:24 that have different kinds of life experiences,
02:47:27 there’s definitely something to benefit from that.
02:47:30 So let me ask one last question.
02:47:31 I don’t think I asked you last time
02:47:33 the ridiculous question about the meaning of life.
02:47:37 You know, Dostoevsky said,
02:47:38 beauty will save the world.
02:47:40 Krasata spacet mir.
02:47:43 Some people believe money is a big part of happiness,
02:47:46 and you’ve turned…
02:47:48 First of all, you’ve made a lot of money.
02:47:50 You turned away a lot of money.
02:47:51 You turned away a lot of power.
02:47:53 So you’re a fascinating person to ask,
02:47:56 what do you think is meaning to life?
02:47:59 The thing that I’ve realized with money
02:48:01 as I have experienced both having little of it
02:48:05 and having a lot of it is that the benefit of…
02:48:12 You can get the most out of money if you think of it
02:48:15 not as something that lets you do and have more things,
02:48:18 but as something that lets you worry about fewer things, right?
02:48:22 Like, if your savings are just nonzero at all,
02:48:28 then you don’t have to worry as much about losing your job.
02:48:31 And if you feel like you have a job
02:48:35 that just really conflicts with your values,
02:48:36 then if you have even six months saved up,
02:48:39 that just makes it easier for you to say,
02:48:40 bye bye, I’m going to do something else.
02:48:42 If you have more money, then you can not worry about
02:48:49 even what you’re doing needing to be profitable at all.
02:48:53 Once you get more money, then you can choose transportation options
02:48:59 and food options that just have less hassle in your life
02:49:02 and allow you to be lazier.
02:49:04 So, this aspect of just reducing troubles
02:49:11 and opening up room for other things, I think, is a big part of it.
02:49:16 If you instead think of money as being this positive
02:49:20 or this thing that gives you stuff
02:49:22 and you try to derive meaning from the stuff,
02:49:25 I think that’s much more likely to be a road to basically squandering that opportunity.
02:49:32 So, yeah, and I guess my philosophy on that is definitely more subtractive than additive there.
02:49:38 But once you have enough money that you don’t have to worry about the money,
02:49:41 you’re burdened with another question, which is of meaning.
02:49:45 Do you think there’s meaning to it all?
02:49:47 Or it seems like your own life,
02:49:51 you’re trying to build cool stuff that alleviates some level of suffering in the world.
02:49:59 Well, I mean, one way to think about it is like,
02:50:02 think back to how you thought about life when you were in school, right?
02:50:06 In school, this act is interesting to think about, right?
02:50:09 Because in a lot of ways, it’s just totally outside of bounds of the kinds of systems,
02:50:16 like social systems that we live in as adults,
02:50:19 or maybe not, like maybe things like academia are intended to replicate parts of school.
02:50:23 Like, first of all, school is very totalitarian, right?
02:50:26 Like, you have to follow the teacher’s instructions,
02:50:30 the bulk of your schedule is like forced to be in particular areas,
02:50:33 and you can control the real purview from leaving the grounds during this period of time,
02:50:43 assign a lot of homework.
02:50:45 But at the same time, also, school is a bit of a post scarcity utopia
02:50:50 in that you just don’t have to worry about getting resources for yourself.
02:50:53 And we’ve both lived through 12 years of that, right?
02:50:57 So, what does that say about us?
02:50:59 And I think one thing of aspects, obviously, is that there’s definitely an easiness to living life
02:51:10 if all of your decisions are made for you.
02:51:12 And one of the challenges of adulthood, I guess, is moving to this world
02:51:20 where all your choices are much more self directed,
02:51:22 and you just have to learn to live and deal with that.
02:51:26 Yeah, dealing with the burden of freedom, in some sense.
02:51:30 It’s actually interesting, because in some ways, I feel like even my first five years
02:51:38 of doing Ethereum things, my life was not even all that self directed,
02:51:43 because a lot of it was just responding to obligations.
02:51:47 Like someone said, oh, come to speak at this event in Korea.
02:51:51 Okay, come to speak at this thing in Taiwan.
02:51:52 Okay.
02:51:55 For Ethereum to launch, we need this particular piece to be done and tested.
02:52:00 Okay, work on that.
02:52:01 We need some proof of stake algorithm, work on that.
02:52:05 And the last year of COVID life, basically, I was holed up in Singapore for much of it.
02:52:14 And it gave me a lot more alone time.
02:52:16 I had much less travel.
02:52:18 And that was definitely a very new and interesting experience for me.
02:52:21 Would you characterize it by sadness, melancholy, hope, dreaming, innovative period?
02:52:31 How would you characterize that alone time?
02:52:33 Some of all five, definitely some self discovery.
02:52:37 I definitely did make this very deliberate decision that, okay, I have this time,
02:52:43 and I’m going to actually make something meaningful out of it.
02:52:48 So one example of the things I did is I just actually started
02:52:53 listening to your audio books and podcasts much more.
02:52:57 Just this year, I basically discovered that the podcast space is real for the first time,
02:53:02 I guess.
02:53:03 Like before that, there would be things that I would get interviewed for,
02:53:06 but I was not mentally incorporate this idea that podcasts are a thing that you can go listen to.
02:53:16 And this year I did.
02:53:17 My friend, Carl Lafleur, one of the optimism people, recommended hardcore history to me.
02:53:24 And so I went ahead and just listened to all the hardcore histories.
02:53:27 And then after that, I listened to like 10 Luxfried mids and then a bunch of others.
02:53:32 And after that, I also got into audio books.
02:53:37 Oh, I listened to the entire The Rise and Fall of the Third Reich, the whole thing, 45 hours.
02:53:44 That was fascinating.
02:53:45 So let me ask about Dan, because Dan is going to love hearing this.
02:53:48 I’m going to send it to him.
02:53:50 Do you have a period of history, whether it’s Dan or in general,
02:53:54 that you draw for your own life, like kind of thinking about the world,
02:53:58 about human nature that you go to?
02:53:59 Is it World War II?
02:54:01 Is it Wrath of the Khans, the Genghis Khan?
02:54:05 Is it some other more ancient history?
02:54:08 Is it World War I?
02:54:09 Is there something that kind of echoes with you in the voice of Dan or anyone else that you connect to?
02:54:16 I feel like the 1930s and 40s are fascinating because they force you to really grapple with
02:54:21 the question of where does evil come from, right?
02:54:25 The sort of mental puzzle that I’ve always had in my head is, on the one hand,
02:54:31 things like the Holocaust happened.
02:54:33 But on the other hand, if you just go and have a coffee with people,
02:54:38 then a hundred times out of a hundred, everyone just seems so nice.
02:54:41 Yeah, exactly.
02:54:43 How do you kind of reconcile the macro and the micro there, right?
02:54:47 And that’s the sort of thing that’s very difficult if you don’t have a lot of,
02:54:56 I guess, the right kind of personal experience,
02:54:58 especially if your personal experience starts off being sheltered, like it was for me, right?
02:55:03 I know the stereotype is that the nerds get bullied in school, but actually for me,
02:55:07 in my school experience was just being treated with kindness by everyone.
02:55:11 Yeah.
02:55:12 So that definitely made it harder to understand things.
02:55:15 I remember actually being pretty blindsided when I started Ethereum.
02:55:19 And then within six months, there started being fights over who would get more shares
02:55:24 if Ethereum turned out to be a company.
02:55:26 And then I suggested we should just make it to be a non profit,
02:55:29 and somehow that ended up upsetting people.
02:55:34 So the fascinating thing for me is that I’ve been obviously reading and listening to the history,
02:55:40 and then at the same time, just observing things happening in the crypto world.
02:55:45 And so one of my interesting mental intuitions that I’ve gotten is that I think most evil
02:55:55 doesn’t come out of greed, it comes out of fear.
02:55:58 And one example of this in Ethereum lands, right, is I think the part of Ethereum history
02:56:08 where I thought that the Ethereum community was at its lowest,
02:56:10 and even when I personally was at my lowest.
02:56:12 Now, if you go back to the Dow fork in 2016, right, so the Dow hack happened,
02:56:17 and then we made this controversial decision to change the Ethereum protocol.
02:56:21 And then there was that Ethereum Classic split.
02:56:28 And as soon as that Ethereum Classic split happened, there was a lot of anger everywhere.
02:56:34 And there started especially being anger when the price of ETC started taking up.
02:56:41 So this was the time when Ether started off being $13 and Ethereum Classic started at zero,
02:56:46 but then suddenly there was this one day when like ETH dropped to 12.5,
02:56:50 ETC went up to 0.5, and then they dropped more.
02:56:55 And people were saying things like,
02:56:57 oh, this whole Ethereum Classic is just a psyop by the Bitcoin community
02:57:03 and just the wealthy Bitcoiners trying to destroy Ethereum.
02:57:06 And in the back of my mind, I knew that that wasn’t entirely true.
02:57:11 There definitely were Bitcoiners.
02:57:12 But at the same time, I think blaming disagreements on foreign interference,
02:57:20 like this is the sort of thing that countries, governments do all the time,
02:57:25 it’s a very convenient excuse because it allows you to just blame these things
02:57:31 that are happening on the foreigners and avoid actually grappling with the facts that like,
02:57:36 well, no, actually you have people in your very own community
02:57:38 who just disagree with you and have a different belief.
02:57:41 And I feel like the Ethereum community during that time
02:57:46 did not do a very good job of grappling with that.
02:57:48 And I feel like I during that time did not do a very good job of grappling with that.
02:57:52 And so there was a lot of blaming the Bitcoiners.
02:57:56 There were also even a lot of people calling for us to use trademark law
02:58:00 and basically sue exchanges and try to prevent them from listing Ethereum Classic.
02:58:05 And to me, that was very unethical, right?
02:58:07 Like basically using the government as a weapon to try to attack the other cryptocurrency
02:58:17 and destroy it goes completely against the ideals of freedom
02:58:21 and things that at least in theory were supposed to stand for.
02:58:25 But in that particular time, basically what was happening was that the ETC price was rising.
02:58:32 And at the same time, the ETH price was dropping in lockstep.
02:58:36 And there were a lot of Bitcoin people basically saying this is the end of Ethereum.
02:58:40 And I think a lot of people really were afraid that
02:58:42 Ethereum would be just like completely destroyed as a result of this.
02:58:45 And so that’s where the anger came from.
02:58:48 Exactly. Yeah, exactly.
02:58:50 It came from the fear.
02:58:51 And that’s what allowed people to rationalize in abandonment of principles
02:58:56 that I think they would not have accepted in other circumstances.
02:59:01 And I definitely, to some extent, played along with this myself.
02:59:06 And I do definitely regret that to some extent.
02:59:10 Well, I definitely regret the excesses completely.
02:59:17 And then obviously, Bitcoin block size war, similar sort of stuff happened.
02:59:21 So that insight was interesting because it does mentally make a lot of sense
02:59:30 when you’re actually afraid that unless you act in some way
02:59:34 that your entire world is going to collapse.
02:59:36 It’s much easier to just rationalize forgetting your principles
02:59:39 and doing whatever you have to just save the specific thing that you care about.
02:59:44 It feels like the right thing to do, the brave thing to do is in the face of fear
02:59:51 to still have compassion, to still have love as opposed to hate.
02:59:56 So the darkest moments, the toughest moments of human history
03:00:01 are those where fear is everywhere.
03:00:04 And despite that, the way to get out of that is through love, not giving into the fear.
03:00:14 And again, that’s the lesson that you draw from all those moments of history.
03:00:20 Yeah.
03:00:21 Well, I like you have in terms of those coffee and the kindness that people have,
03:00:26 it does seem that everybody has the capacity for evil
03:00:29 and everybody has the capacity for love.
03:00:31 And you just have to create mechanisms and incentives
03:00:35 that prioritize the latter over the former.
03:00:38 Vitalik, you’re one of the most interesting people I’ve gotten a chance to talk to.
03:00:44 Thank you so much for talking to me.
03:00:45 I hope we get a chance to talk again.
03:00:47 I hope I can at least be some small part.
03:00:50 This would be awesome in a podcast with you and Dan Carlin.
03:00:53 That would be an awesome conversation.
03:00:56 Thank you so much for doing so much incredible technical innovation
03:01:01 that inspires the computer scientists, the economists,
03:01:05 inspires the world and what technology can do.
03:01:08 And now with longevity, I do hope we live a very long time
03:01:14 and play Diablo to make that long time fun.
03:01:19 Thank you so much for talking today.
03:01:20 Thank you too, Alex.
03:01:21 This was great.
03:01:23 Thanks for listening to this conversation with Vitalik Buterin
03:01:26 and thank you to Athletic Greens, Magic Spoon,
03:01:29 Indeed, Four Sigmatic and BetterHelp.
03:01:32 Check them out in the description to support this podcast.
03:01:36 And now let me leave you with some words from Nelson Mandela.
03:01:40 When a man is denied the right to live the life he believes in,
03:01:44 he has no choice but to become an outlaw.
03:01:47 Thank you for listening and hope to see you next time.