Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Arthur Breitman & Kathleen Breitman: Tezos – The Long Road Towards A Digital Commonwealth

Episode Date: October 5, 2018

The Tezos whitepaper, published in 2014, anticipated several areas that would become major issues for blockchain networks. Especially around governance and smart contract security, Tezos proposed original solutions. The project later went on to raise $232m in the biggest token sale at the time. Recently, the Tezos network launched as the first of a wave of innovative next-generation blockchain networks. We were joined by Tezos co-founders Arthur and Kathleen Breitman to discuss the history of the project, how the network functions today and how it could develop going forward. Topics covered in this episode: What inspired the original Tezos vision from 2014 The critical importance of formal verification and governance Why Arthur thinks the blockchain scalability problem is overrated The case against decentralized applications Why the ability to evolve and adopt new features is critical for Tezos success Tezos’ Proof-of-Stake and emerging baking ecosystem The Tezos Foundation drama and Johann Gevers The relationship between their company DLS and the Tezos Foundation Episode links: Tezos Website E136 - Tezos – A Self-Amending Crypto-Ledger Tezos Whitepaper The $1 Billion Tezos Blockchain Is Officially Launching Monday Inside the Crypto World's Biggest Scandal | WIRED Tezos Twitter Thank you to our sponsors for their support: Deploy enterprise-ready consortium blockchain networks that scale in just a few clicks. More at aka.ms/epicenter. Simplify your hiring process & access the best blockchain talent . Get a $1,000 credit on your first hire at toptal.com/epicenter. This episode is hosted by Brian Fabian Crain and Meher Roy. Show notes and listening options: epicenter.tv/255

This is Epicenter, Episode 255, with guests Arthur Brightman and Kathleen Brightman. Hey, we're core organizing a live event at the San Francisco Blockchain Week. It's called SF Blockchain Epicenter, and it'll be October 8th and 9th at the Hilton Union Square. You can come see members of the Epicenter team and a lot of familiar faces from the show. There are reduced rates for developers, and you can learn more at sf blockchainweek.io. This episode of Epicenter is brought you by Microsoft Azure. configure and deploy a consortium network in just a few clicks with pre-built configurations and enterprise-grade infrastructure. Spend less time on blockchain scaffolding and more time building

your application. Learn more at aka.m.s. slash episender. And by TopTal is addressing your talent shortage in the blockchain space connecting companies of all sizes with the world's best blockchain engineers. If you're looking to scale your team, check out toptale.com slash Epicenter. Hello and welcome to Epicenter, the show which talks about the technologies, projects, and startups driving desaturizations and the global blockchain revolution. My name is Brian Fabian Crane. And I'm Meher Roy.

Today we are pleased to welcome back on the show Arthur Brightman, who is one of the co-founder of Tezos. Joining Arthur Brightman is Kathleen Brightman, who is on Epicenter for the first time. Kathleen is also a co-founder of Tezors. So Arthur and Kathleen, welcome on the show. Thank you for having us. Thank you. So before we start this show, we'd like to disclaim that both Brian and I participated in the Tesos fund fundraiser, and we continue to hold our tassies. So we are not exactly neutral interviewers for this episode.

Now, with that, Brian, you want to say something on that? Of course, Tezos, we've been aware for a long time, and our listeners have been aware for a long time. Actually, one of our most popular episodes was with Arthur back then. I think we've had maybe 40, 50,000 downloads on that one. And that was a long time ago in 2016, or at least long time ago, in Bitcoin Age, or blockchain age. And that was around a year before the fundraiser. And already at the time, the TASO's White Paper actually was quite old. So TASO white paper was originally published, I think, in 2014, under the...

the name L.M. Goodman and some who've been around in the blockchain space for a long time may, may, this may ring a bell, L.M. Goodman. Of course, there was this journalist Leah McGrath Goodman who had basically outed this poor guy in California. So that was Tezos's first encounter with really bad investigative journalism. Yeah. Yeah, no, that was definitely a remarkable episode. So that was named after that. And I think at the time you were still, working in banking and then afterwards spent some time at Google and was kind of developing Tesla's on the side and then so it's been a really long time until you know the fundraiser happened and now of course at this point Tesla's being you know live projects and quite a vibrant project it's been a long pregnancy yes yeah so one of the things I thought would be interesting to talk about a little bit to start this off is

Can you give a bit of context? Like, how did you decide back then to, you know, work on TASOS? And what were the main triggers for the core ideas of the white paper back then? Well, what I found really interesting was the idea that this blockchain system represented commons and Bitcoin had a way of paying for a decentralized way of paying for a commons, which was the security of the network. But it didn't, you know, that was very, it had very minimal governance. And on one hand, it's good to have minimal governance because you have a smaller surface area to a tax.

But on the other hand, there was also a lot of innovation coming in this field. I'm thinking in particular you have smart contracts in Ethereum or zero knowledge proofs of knowledge transactions in zero cash and there's Zcash. So all of these things were happening. And I didn't see a very clear path for how they would make their way into Bitcoin without explicit governance. And I became fascinated with the idea of what happened during fork-based governance and what happened if you had more formal governance. To me, it always seems so visionary that the Tesos white paper was published before the Bitcoin block size drama happened.

So kind of you anticipated that a problem like that was going to develop. and already had written a solution, like at least a solution that could work in practice. But then as time passed on, Tesos also acquired its second flavor, which was around smart contract safety, right? So how did that come about? Yeah, and you know, you can see the safety aspect is present

in your original papers. One of the things I got really interested in was formal verification as a technology. So it's been around for a long time. It's the idea of treating a program as a mathematical expression and making mathematical proofs about your program. It's typically been, it's typically required a lot of expertise and a lot of time and efforts.

And so it's been used in cases where the bugs are extremely costly. For example, aeronautics, where if you have one bug, your rockets can go crushing down instead of going up. That's something that actually happened. And so smart contracts are, or even, you know, in general, the codebase that underpin this digital assets are really prime example of small code bases that could easily, that could be verified not necessarily easily. And for which there is really a, it makes financial sense to actually verify those code bases. And at the same time, the tools and technology for doing formal verification has been gone and easier and easier.

So there are better libraries for the theorem provers like Koch. You also have automated provers using SMT solvers. So all of this field has been making strides. And in the same time, we have a perfect candidate for it. So it seemed like a really good fit. So of course, that has been absolutely correct in both of those points, right? Governance has become a massive topic. I think today lots of new blockchain projects come.

And governance is always one aspect that they're aware. That's a problem. There has to be some solution around that. Formal verification as well or like smart contract security and blockchain security has become massive. Of course, after the Tasos white paper, we have things like the Dow hack and the parody multi-sig bucks and other things like that that have really made that very apparent. But one of the other things that I thought was interesting is that today, if you ask people, what are the biggest issues in blockchain? there probably would say number one would be scalability, I think. And then interoperability is another one.

Probably interoperability, scalability, and governance, I would say. It would probably be the number, the three, although I'm sure some people would have different answers. And on scalability, on interoperability, there hasn't been a topic for Tezos. It wasn't in the white paper. Do you think this is something that was sort of, it should have been more of a focus of Teasos? That's a good question.

So you mentioned two things that were I mentioned. One was interoperability and the other one was throughput. In terms of throughput, I think there definitely needs to be a higher throughput than the four transactions or 10 transactions per second that you see on most blockchains. However, I've always been on the mind that the best solutions for throughput were pretty much second-layer solution. So things like the Lightning Network or even not necessarily, not even necessarily trustless things.

So different people see different things in this market. And for me, I don't necessarily think so much as cryptocurrencies as a way to disintermediate, but more as a way of making the system of intimidation permissionless. So in this respect, I've historically been less interested in throughput. Although in terms of throughput, just moving from a proof of work to proof of state system can increase your throughput greatly, although you can get the same thing in proof of work using Bitcoin-a-NG type of model.

But so there's a lot of ways to get more on-chain scalability, not get a thousand X or 10,000 X, but like reasonable gains that really makes a level two solutions practical. I also think that the reason everyone is so focused on throughput right now is because of a narrative around Ethereum DAP. So in a first phase, you had people who figured, out, it's like, hey, if I create an application and somehow I manage to tie it with a token, even though that not necessarily makes sense, then maybe I can make money, you know, maybe I'll

make money this way, and then, you know, people will use a token. And so they try to build these applications, and none of them really panned out that well, perhaps because it's early, but I think perhaps because a lot of the times the tokens or the applications themselves didn't make a whole lot of sense. There are applications which are perfectly fine as being centralized, and people were decentralizing them for the sake of using tokens. And so when it became apparent that that really wasn't going to work, people pointed out at Cryptokites and say like, oh, well, the problem, you know, of course, everyone would be working on all these great debts.

The only problem is we just don't have the throughput to do it. Right. You know, we would have decentralized Facebook, decentralized all of it, we just need to have the throughput necessary on the blockchain, and finally we'll be able to do that. And so I think that's definitely one of the, that's definitely one of the marketing. angle of EOS. I don't think that's true. I think that the problem is product market fits and the fact

that decentralization is only useful in specific cases. And so I generally don't think that throughput is going to make the apps popular. I definitely think it's going to make for the next few years high throughput blockchains popular because I think it's a beauty contest and people will use the throughput as a mark of beauty as opposed to something that's really important for their platform. So you'll have a lot of discussions of throughput, but I think at the end of the day, it's not as important. The other one is interoperability. So interoperability assumes that you have many different blockchains, a very heterogeneous ecosystem. And that makes sense if there's some tradeoffs.

So if one way to design a blockchain, let's say you want to design a blockchain for smart contracts, and now you want to design a blockchain for payments, and somehow designing it, for payments or for store of value makes it very different than the design you would use for smart contracts, then now you need to have these two blockchains because you have all these different use cases which require different architecture. In that case, interoperability would be very important because you would like these blockchains to talk to each other. But I don't believe that there are such tradeoffs. I think there's very, very few tradeoffs in the design of blockchains. One of it is, I think, decentralization and throughput. That's good.

More generally speaking, you know, how decentralized you want to be and how safe. and save in a very general sense. You want to make sure that anyone can participate and everyone kind of agree, so you proceed very slowly and carefully versus something more centralized where you can go faster. So that's a real trade-off,

and I think we'll see blockchins around that spectrum, but I don't think the other ones really are, and so since they're not trade-offs, I think one system will end up absorbing a lot of the rest. So I don't think interoperability is as important as it's made out to be. So I'm really interested in like two very interesting ideas you put forward in what you said. The first was you made a statement like you weren't that interested in disintermediation itself,

but in making intermediation permission list. Did I state that correctly? Yeah, that's right. Yeah. So let's go into that concept a little bit more. What does it mean in depth? Could you restate the concept or sketch out a vision for what it means for intermediation to be? Yeah. I should state that I have many ideas about this space and some of them I hold very, very strongly. This is one of the more speculative one. I'm not I'm not as sure about that one as I would be about about other things. So there's a general concept in economics.

that what you should worry about is not a monopoly, but really not a de facto monopoly, but really freedom of entry. If you have a monopoly but any company could come in and compete, it doesn't matter if they actually compete. What matters is that they can come in. And so the problem with financial intermediation is perhaps that there's so few intermediaries.

If you have very, very high barrier to entry in financial intermediation, then you're going to have lower quality of service, higher prices, perhaps less trust. Whereas if anyone can participate, you have more competition and so possibly you have better service. So that's one point of view.

But there is something to be said about the fact that blockchains and cryptocurrency for the first time, they allow long-distance payment without intermediation. That's never happened in the history of humanity. So, you know, I would not be too quick to just take that and say like, oh, that doesn't matter. That's certainly some things that's important. But I also think that being able to have a lot of... of different, a lot of different centralized parties bloom and participate in a network of operation is very helpful. In fact, if you look at lightning, lightning network, some people of the

lightning network say, oh, it's centralized, look, it has to have all these hubs and spokes and so on and so forth. Yeah, but you have freedom of entry. I don't have to use your lightning if I don't want to. I can make a direct blockchain transaction. I can fall back on some other node. You have the freedom of choice, and at the end of the day, that's what really matters. And so as a result, I'm less concerned about the on-chain transactions throughput by itself. I see basically what happens on-chain as a fallback for a flurry of activity that happens off-chain. The second interesting concept is, like, you expressed some kind of skepticism about the value proposition of decentralized applications in terms of their product market fit. And on the other side, like, so decentralized applications, what are they?

Well, there's an, there's, I tend to think of them as like applications that do not have a single individual like service provider or central server that's like serving that application. It's like a network of nodes that's serving that application. And so you express like skepticism on the product market fit of decentralized applications. But you yourself built a smart contract chain. What's the value proposition of smart contracts? decentralized application. So I think as people are starting to make a difference between, and it's not that there's a fundamental difference,

but there's a spectrum, but we know people call it DAP and what people call a smart contract. So I heard about this DAP recently that I don't know the name, and I don't want to point any finger, but it's a DAB that lets you, you know, you take some video and then it will encode the video for you and there's a decentralized network of people who can encode your video and so on, so forth. And, you know, that's fine.

That's life peer. I'm not sold on the idea that you need to do this through a decentralized network as opposed to a, as opposed to facing a centralized website that gives you that service. And maybe I don't understand it, okay? That's going to me, I just, I don't say directly. On the other hand of the spectrum, you have something like a multi-sig contract. That's a smart contract, but no one would take a look at a multi-sig and call it a DAP. Okay?

So, this is a smart contract because you want to make things like multi-sig contracts. because if you have a smart contract language, implementing something like the Radin network is a lot more trivial than implementing something like the Lightning Network. There was this comment on Twitter recently that I thought it was really spot on. It was like something that's a paper in Bitcoin

is like a block post in Ethereum just because of the simplicity of having a smart contract language. So it's making it easier for people to write contracts like insurance contracts. Well, I think, to put it succinctly, Arthur thinks that, you know, smart contracts are a bad name for smart contracts. And one thing he'd prefer is automated escrow.

So that gives you an idea of the amount of expressivity that he'd like to see in these sorts of pieces of code. Yeah, that's right. The idea of automated escrow is that, look, you have some tokens which are stuck in the smart contract and you want to release a certain sum to certain parties depending on certain conditions. I don't say there's a substitute

to just run a full-fledged application. But, you know, or so yeah, automated escrow also alludes to the idea of, you know, just go to the blockchain for adjudication. You know, you were running an option contract, you had a dispute, you go to the chain, and then you verify what happened. So that's mostly the use case I see for it. That being said, again, I try not, if I don't need to have a very strong conviction in something, I want. And so obviously I want those to be a platform that accommodates all kinds of applications, including, including, DAPS if DAPS want to use TESOs. Like I said, there's not a whole lot of trade-offs.

So maybe StruPoot is a trade-off, and that's one I would personally favor less than decentralization. But at the end of the day, the protocol is in the hand of the community, and so if they decide to push it in the direction, that's more towards throughput and DAPS, that's what will happen. That's my personal preference. Yeah, no, this is a fascinating answer. Now, I'm, do you think, would it be fair to say that one way to think about Tizels is it's like Bitcoin, but there's governance, there are some smart contracts, and there's proof of stake instead of proof of work?

Yeah, yeah, you could, you could say that. And because, because one of the interesting question, of course, is if you had, if you look at Ethereum and if you looked at the Ethereum, basically, pitch that Ethereum made back in when they did the fundraiser and afterwards it was, okay, Ethereum is this world computer and you can run any kind of application on Ethereum and then it's trustless and in Ethereum, the token or ether the token is gas to pay for computation on this thing, right? So it was also from a token perspective seen as a very different thing from Bitcoin, which may be this money. So do you think when you look at Tesey's, Do you see those more in the kind of money camp than in the gas camp or how do you look at that?

Yeah, it's interesting. When I Therium came up with that pitch, I thought they were being Strussian. You know, I thought they were saying, of course, it's a cryptocurrency. But if we say that we're competing head on with Bitcoin, people are not going to take us seriously. So we're going to find a differentiator says that Bitcoin is gold and says that we're gas. And that's where people will see value. and then we can establish ourselves as a cryptocurrency. That's what I saw what I saw what was going on

because in my mind it was clearly a cryptocurrency. But no, I think they meant it. I now think they meant it. For me, I mean, these things are primarily useful as money, and so I see it as a cryptocurrency. But that being said, I don't think you have to be in the application camp or the money camp. It's worse.

People tend to cluster is like, okay, well, you have privacy coins, and then you have money coins, and then you have applications going. Hang on. Like I said, not a whole lot of trade off. there's no reason why you can't have privacy, you can't be money, and you can also be used to power gas and smart contracts. I mean, at the end of the day, it's not like physical gas. It's not like you have gas and then you have to break down the molecules.

You're just paying, you know, you're paying miners or bakers to include your transactions. And if you're going to be paying them, you're essentially using money. So it's money that's used for a certain type of application. And the best money is the money that you can use for the most type of you. use cases, and so be it gas, be payments, being everything that you can think of. If you've listened to previous episodes with Marley Gray and Matt Kernar, you know that Microsoft is committed to providing enterprise-grade tools and infrastructure for blockchain developers. Well, the Azure blockchain workbench is perfect for organizations building consortium networks.

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in Azure, so you know you're relying on secure, redundant infrastructure that can scale. And with built-in services like authenticated APIs, off-chain databases, and secure key management services, you can scaffold your infrastructure in just a few hours. To learn more about Azure Blockchain Workbench and how Microsoft is advancing blockchain usability and enterprise, check out AKA.m.s slash Epicenter and start building today. We'd like to thank Microsoft Azure for their support of Epicenter. Recently, the guys from Multicoin, they've had some interesting thesis around that. And one of the things they've argued is that the things that will succeed as

the store of value and I think that very much ties into what you're saying are the things that will have the most usage and basically the kind of smart contract or application platform that succeeds at the biggest scales like whatever token belongs to that platform is also going to become the most valuable store of value does that kind of tie into? Yeah, yeah, no, I would agree with that thesis, although I think that they are very, very strong serious. And so just by virtue of being the first Bitcoin as a very massive lead, and it's not clear that being able to be used for smart contracts is enough of a benefit to change a selling point in people's mind that, you know, Bitcoin is it. And so that's really, really an

appeal battle for any cryptocurrency out there. Including for Tesos? Yeah, including for Tesos, of course. Okay. More so for Tesos than Issyria, because Tzos is a new which is a game. Yep. Very interesting. So, so in a sense, like, Ethereum tried to create, at least, like, publicly, this different market of a world computer and this asset as gas in that world computer.

Whereas your perspective is, like, all the cryptocurrencies are ultimately stores of value. They all compete with each other, including TESOS. Pretty much. And I think that most of the DAP cryptocurrencies, even though they are being used as store of a store of value. They basically have got in a money-like characteristic. There's cars. People are using them as money in a store of values more than anything.

But there's conversions in money. And I think you end up having the most liquid one or the most useful one be the one that dominates. Yeah. And I mean, part of the reason that there's a conversation around this that talks about it as like an app for one thing is because you don't want. to say, like, yeah, I'm competing with Bitcoin and I'm competing with Ethereum because there's a lot of entrenched players and entrenched interests and you don't want to go head to

head with it. You want to say, like, no, you know, no, I'm not competing with Ethereum because you see, I will be the application for dog walking on the blockchain. And so you can't say that I'm competing with so-and-so. So I think more, you know, for being intellectually honest, we're all kind of operating in the same space. It's just very few people want to admit it because it invites a lot of vitriol towards you. So can you start to say this? Yeah, but there are people who know that these things are competing. It's crypto Twitter.

Crypto Twitter is pretty bad. But if you look at it, and the reason you see so much animosity, I think, is because deep down people know that these things are competing at each other. Well, yeah. That and a lot of time on their hands. But yeah. Yeah. Yeah.

But, you know, just because you're competing doesn't mean that it has to be like a ferocious, like, an ugly and ugly battle. I think right now, I don't want to steal your quotes. Oh, well, it's not my quotes, Paul Graham. No, but I always, oh, I think people overstate the amount of animosity between different project leads. I think Arthur and I have a pretty good working relationship with a lot of people who work in the space who might be considered our competitors because, as I like to say,

but I appropriated some Paul Graham. You know, a startup doesn't usually compete against other startups. it usually competes against people not giving a shit about it. So, really... And it's even more true about blockchain protocols. Even more true about proxying protocols, because really, like, if you look at the amount of people who actually use this in their day-to-day,

it's actually quite meager compared to the amount of hipes and headlines that have been circulated around this. So really, you know, rising tide lifts all boats. You know, relevancy for one blockchain helps out all the others. It's not, you know, it's not crazy to posit that. helping out one project become relevant, you know, helps the others. And so, yeah. I remember when I was a kid, I watched on TV a couple, like this, there was a TV show series for Highlander.

And it was always weird to me when he had a friend who was also a Highlander. And I was like, but are you going to have to, like, kill each other down the line at some point? Why are they friends? You know? For anyone who's born after 1990, what Arthur means to say is like, well, Highlander, there can only be one. But, like, no, he makes friends along the way. It's far down the line. Yeah, exactly.

So, like, you know, we'll, like, pull out knives when, when all of these things have have become the way that you pay for coffee in Dubai and, uh, and, and, and, I don't know, Frankfort respectively. What if the real casualties as a friend of him made it along the way? Yeah, I don't think so. Anyway, um, you know, the point is, like, we have so far to go in terms of realizing the, you know, promises of this technology that it's really not. worth trying to take out other people or malign others at this at this juncture so that's a

very interesting perspective and like i i'm like tempted to contrast it to a lot of different projects in the space like the clearest contrast to me comes out with definity right like so a project that's trying to build like facebook on the blockchain or gmail on the blockchain whereas like in tezos like at least not tezos but you yourself as founders of it ideologically believe in a very different direction for the for the cryptocurrency space so yeah look at the end of the day if everyone if you know definitive comes out and everyone starts building all these applications on infinity and it becomes clear and everyone starts using them and it's great and everyone loves them you know at this point i like okay that i guess

we need, I guess we need to have throughputs. The main thing to know about Thales is that it's an evolvable system, which is really designed to favor innovation and evolvability. I think there's a lot of ideas in the definitive consensus, which are really interesting, the idea of doing sortition, but like a basic agreement with sortition using a traditional signature for getting your randomness. All of that are really good ideas, but I do expect that at some point their code will be open source.

their papers. I'm more, like, the part right now that strikes me as a little difficult as the whole distributed key generation. But look, I think the idea isn't the consensus are really good. And if they're good, there's no reason

for Tezos not to adopt them if there's demand for it. So let's switch to a different topic now. The topic is, of course, like the Tezos Foundation drama. We need to cover it even for custom sake, I guess.

So, so, like, Tezos broke out in the, in the media and in the crypto narrative because of the Tezos Foundation drama. It attracted a lot of attention. So could you just like walk us through what really happened in this episode and maybe some of your learnings from me? Well, you know, basically like Johann Gavers was called self-dealing. And so he fabricated a scandal with the help of rudders in order to create ambiguity. And also he had a lot of contacts in the crypto valleys that he leveraged to protect himself.

And so, you know, what should have been a fairly straightforward removal of a board member who committed improprieties turned into, was made into a scandal by Reuters who was trying to sell copy. But thankfully, you know, an outlet that has far more subscribers and much more page views wired actually took the effort to find out both sides of the, you know, so-called scandal. and quickly it became obvious that, you know, Arthur and I were quite wronged by this man and his accomplice, Guido Schmidt's Kruemaka. And, yeah, I mean, also that ends well. Like, thankfully, Tessus was in such a good place that, you know, the network was able to ship relatively on time. And, you know, no harm, no foul. I mean, if the Swiss really wanted to live up to the expectations that they said for everyone who they give tours of the Crypto Valley to, perhaps they'll prosecute Johann Geberers for, you know, disloyal management, much like they did, you know, the folks at FIFA.

I think this is in the same ballpark of malfeasans. But yeah, like we don't spend that much time thinking about what a South African masseuse thinks. So why should you? What of the interesting parts of, like, at least the occurrence of events as I saw it is, so you had like three bowlers. members, so Johann Gavar's, Guido Schwitz-Krumacher, and then there was Diego Pons. So Diego, as I understand it, was always very supportive of the two of you. Yeah, Diego supported the technology because he understands it. That's, you know, a first asset.

Diego is also not a fucking crook, so that helps. So, yeah, you know, Diego had a bit of it up on the two of them, but nonetheless, he still head of backbone. Yeah. Yeah. No, I think the mentioned like remarkable resilience. And yeah, I mean,

the thing is, it's like the board had a two out of three failure. I sing because of the concentration in a crypto valley. So like the board had a two out of three failure. And I actually thought like your hand, Diego's hand was just too weak

because like it was almost that like Johann and and Guido had you cornered in some sense. That is the impression I got. But then things suddenly turned around and like the situation solved. How and why did Johan did give up control? Well, there's a few things going on here. First of all, Johann is a terrible tactician.

Yeah, but look, without just spending too much time on this, essentially what happened is that, you know, he gives his very weird talk. in January at the crypto conference, you know, with large quotes of himself. And the community, which had been misled by Riders into thinking this was a dispute. And like he said, they said, they were like, okay, no, this guy is nuts. And he was obviously nuts. And Ruters knew that, you know, they did this on purpose. And so, you know, once that tilted the community released through their support behind an initiative

that also came from the community called the T2 Foundation. And when it became clear that the T2 Foundation was actually going to be the one releasing the protocol, I think it forced the hand of, I think it forced the hand of the first foundation who had to basically understand that their position was becoming untenable. I mean, basically, let's face it, you know, all of Tezos broadly construed, those who want to see the protocol in the wild are very freaking lucky that their arch nemesies were Anna Arara, Steve Secklo, Brennan Hughes-Norahuez-Nor-Gerrhus and Gwitrschmidt-Schmidt-Schru-Macker. They were not exactly the A-Team.

Yeah, they're not exactly the A-team. I'm like, we were dealing with a pretty weak hand on the other side. So even though they had a billion dollars and all of the narrative that they wanted to do to... And an international press publication really to publish anything they would say. Literally anything they would say. They still managed to fail because guess what? Soft power prevails and the narrative around Tesos is not that of enriching a South African masseuse, but rather...

Launching a decentralized network with the power of three dozen wilds. So, I mean, I mean, really, I don't want to stand my laurels because this is a pretty easy thing to trounce, but the sort of soft narrative around Tezos was really not in favor of them ever having any clout whatsoever. I mean, even the mere suggestion that Tezos would never launch, which is what Reuters tried to write twice, once in September because they didn't understand what a put option was. And the second time, you know, when this whole governance crisis came through, the whole suggestion was that Tezos had never launched,

even though there were 40,000 lines of code they've been running on a test net, for over almost a year. 60, but you know, still, yeah. There's no one. The technical illiteracy. There's no one technical who would have looked at this thing would not shape. Yeah, it's just like, it's annoying in the short term, but it's Lairns in the long term.

I don't know if it was malice on their part and just, you know, wanting to knock an ICO down or like, you know, one of these things. Or if it was just like pure incompetence. But, you know, the end result was basically the same. And I think they made a complete full out of themselves. I mean, the horror stories around Anna alone are just worth warranting. you know, its own examination. That's for another time.

Yeah, that's another time. But in any case, like, it's not worth dwelling on folks you can never, like, compile the code around Tesos to talk about how to talk about how, like, you know, they made a kind of a kerfuffle around this. So, of course, it's always tricky

to abstract from, you know, this particular story. But still, do you have some kind of lessons that you take away either for you, you know, that apply to, I don't know, business or working in general or maybe that's specific to people starting uh blockchain projects and foundations or what are kind of humane takeaways here i mean

there's a there's a there's often a tendency to over generalize uh life lessons and sometimes you know they're just they just narrow accidents but i think the most useful generalization i can give we give with each not to do business in a crypto valley i think they value their image a lot more than they value integrity and i don't think it's a good place to uh to do business they try to to be very, very attractive of the things, but at the end of the day, they haven't really attracted enough technical talents, not a critical mess. And yeah, they, you know, they haven't been reliable when Tezzo suffered, they were nowhere to be found or to help. Well, I mean, what's more, you know, when the whole Gebrus fiasco kind of came into play, we were told by many people

who were more than happy to say nice things about Johan prior to us, you know, going to this contract with the Tesas Foundation, oh yeah, Johan's a great guy. But pretty much in October, everyone was like, yeah, no one likes that dude. And we're like,

when were you going to tell us? And, you know, it kind of spans the gambit from, from regulatory officials to people who worked for monotas who actually contributed to the Tesis fundraiser. What we witnessed overall was a lot of cowardice.

Yeah, a lot of cowardice. Yeah. So, I mean, I just would never do business there. Anymore? Anymore. Yeah. another thing is I guess it's a

takeaway actually sometimes it's just that simple okay that's great and so are there ideas of moving some of the Tesos Foundation out of there as well I mean I know for example

Ethereum they have shifted some activities to Singapore although I guess the foundation is still there so I'm not totally sure to what extent But is that something Tezzo's Foundation is there and has to stay there?

You should have them. I'm sure to ask the question. But I know that there are other foundations around the world which are active, like Teasos Korea, Teasos Japan, TZF in the U.S. So there are a few other foundations. I don't know what the Thelis Foundation intends to do. Yeah. Have you ever considered that one of the biggest factors holding back growth

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after the first $2,000 paid towards their first hire. To learn more, go to toptow.com slash epicenter, and we'd like to thank TopTal for their support. So recently, like, DeSos launched its main net, right? And tell us how that experience has been and how the main net has shaped up. I think the experience was rather, the word that's been mostly used with smooth.

in a sense that, you know, it worked. I think the longest, the longer the network was unavailable was maybe for, you know, they were periods of like one hour, I think twice more new blocks were produced. And yeah, no, it's been about it. What was really great was to see how quickly bakers took off. So one of those things that worried me at first was the, you know, before the launch,

it was not a big ecosystem of bakers that had been developed. But as soon as it happened, they were 20, and then they were 50, and then, hundred bakers on the system. Right now, there's 400 addresses which are registered to bake. There's about 100 that are actively baking. And so that really, really took up very quickly. And so on the technical side, things were smooth.

And on the baking side, we had a lot of disanalysis very, very early on with a lot of people getting into the network. So I think that's been fantastic. And I think that the launch, the way that the Thel's Foundation communicated around the launch was a little low key. I think in contrast with some lunches, which are... I like to say Beyonce inspired, but...

Oh, yeah, yeah. We just dropped the mic. Album out now. Anyway. Yeah, but you know what? This environment does not really like counter-signalings. They're like, you know, you see a lot of people who are like, whoa, why didn't you do a party with a pop star for your launch?

Because it's a technological project. Yeah. Well, I think people like the comfort of looking like other things. Yeah. Yeah. So it's more like, it's not about, oh, you actually want to see Snoop Dog play. It's about, we want the assurance that you're just like the other projects that invited Snoop Dog to play. Yeah.

So, I mean, there's a whole psychology to be written about this very weird milieu in technology. Melton Demers had a, had a talk about the shit coin waterfall. And in it, she had like fake hearstone cards. Yeah, it's pretty funny. The game where you play, and then you play like you play partnership. and it's like, yeah, you play launch party and that's something you play and obviously it gives more value because we all agree

that it does. Yeah, but it costs a lot of mana. That costs a lot of of mana. But I think these things are transient. At the end of the day, having some things that's robust, that's secure, that's useful is one end up's prevailing. Yeah, I'd love to dive into a little bit

how Tysos proof of stake works because I remember reading about this before it launched and in the kind of the description and I felt it was quite interesting and unusual and it was a little bit so yeah maybe you can speak about that so right yeah but no I was I was somewhat skeptical but I feel I totally agree with you it's been interesting to watch

the baking ecosystem evolve and I think it seems to work out pretty well so far so can you can you talk around how you know maybe the role of bakers delegates, roles, endorsements, and like how, how kind of this Baker community together works on validating transactions and producing blocks? Yeah. And so one of the things that you need to separate in the algorithm is, first, what is your kind of consensus pool? Like, you know, who's really taking part of your consensus in which proportion? And then how do you reach consensus? So the first part, you know, who's your consensus pool? So it's based on proof of stake idea. And one of the

one of the design goal of Tezos is that even if you have a very, very small stake, you can still have a very, very small influence on the blocks. Yeah, the AD being like if you have 0.1% of the network, you should be able to create 0.1% of the blocks. That's one property that I wanted to, that I like about Tezos, that you don't have in systems, for example, like Depos. So I wanted to preserve that property, but you also need to have some form of delegation

because a lot of people are not necessarily going to be online or not going to run machines. So there's the idea of this optional delegation model where you can make yourself, create blocks yourself, or you can give that rights to another key, which can be controlled by a different machine, by someone else, by a consortium. So you have a wide variety of option.

And then, so, you know, once you do that, you have this idea of saying, okay, so now you have different keys, which you can create blocks, and they all have different balance. You add a coin tracking mechanism to it. It's a technique known foes, a Satoshi. The main benefits of it is that if you have a fork,

like not a hard fork, like more like another branch, someone cannot shuffle the coin around and make it look like they own a larger stake than they do. You will see that only a small fraction of the coins are participating in the consensus because you can't just move your coin between two different addresses. The system is going to track them. So it's tracked, but to be efficient, it's tracked at an aggregate,

which is a role level, which is about 10,000 tokens. So at the end of the day, what it boils down to is you have these different delegates or people participating directly, and they have a stake which is rounded down to the nearest multiple of 10,000. So since there's about 800 million coins in total, that means that you have up to 80,000 roles. So now you have these 80,000 rolls. How do you do consensus, right?

You could say, well, I'm going to do Byzantine agreement on 80,000, but, you know, that's too much. So it's a chain-based algorithm which proceeds in epoch. One epoch is 4,096 slots. And in each slots, you have a random priority. So it's your turn to create a block. And then the next turn, it's someone else's turn to create a block, and so on and so forth. And in order to converge faster, it's not like having finality.

It's more like trying to be a chain-based algorithm is kind of like optimistic BFT, in the sense of like, instead of trying to get everyone's agreements, you try to get people to agree, and then you just count how many people agree. And if a lot of people agrees, then it's probably going to converge. So we have a mechanism of endorsements where after each block, you have 32 random stakeholders

who can come in and sign and add their signature to the block. So the main benefits of doing that is that if the network is really active and is really live, then you get a lot of endorsements, which means there's a large fraction of the stakes that's involved in validating the chain. And so you need only a few confirmations in order for you to be confident that it's not going to be reversions. And if the network is not working as well, you'll get a few endorsements, and then you'll wait a little longer to get your confirmations.

That's basically the algorithm. I think the closest other algorithm that I can think of in this space would be Oroboros, which would turn out to be very, very similar to, to the algorithm for Tesos with the difference that it doesn't have the endorsement aspect, but you know, it does have the benefits of

being simple enough that you can do a full mathematical treatment of it, which is nice because you can actually prove properties about it. Whereas in Tesos, and that's one of the things you were alluding to when you were shaking your head a little bit, you have more heuristic arguments of safety.

Yeah, because one of the things with many, like, Let's say if you look at the example of like tendament or I think you need definities a similar way, right? In that you have like let's say in tenement, right, you need two thirds of the stake to sign off on each block. And so you have this finality and you also have this guarantee that, okay, as long as less than one third is malicious, you know, the chain progresses and every block, you know, they can't be like forks and stuff like that. So here you don't have that. But, of course, at the same time, you have this probabilistic characteristic that maybe you sort of implicitly have that because you would have to get extremely, extremely unlucky to have, you know, a bunch of malicious entities being chosen as block proposals in a row. Or how do you look at that kind of resilience to a group of malicious bakers?

So the way you analyze it short of being able to do formal medical treatment is mostly simulation. So, and that's why I refer to when I'm in the heirsigar. So you simulate a system where you have, for example, 10% of the stakes that's not doing anything, 50% of the stakes that's participating and maybe 40% that's malicious. And then what you try to do with a malicious participant is you try to say, okay, let's say that I want to revert an transaction in a specific block. So I can start earlier and I can add later, how often am I going to get a series of block creation rights and endorsements that will let me create a chain with more weight than the other chain? than the other chain. So, you know, how often is it that I can make, that I can catch up to a chain which has 100 endorsements? And if you, you know, if you do multicolol sampling of that, long enough, you get, you know, you get some indication of how fast these things decay.

And having endorsements make it de-scale a lot faster than if you don't have endorsements. Okay. So, but you basically have this characteristic that a little bit like similar to Bitcoin, maybe that right you have this longest chain and it starts becoming very unlikely that somebody can create a longer chain it's no longest chain it's it's total number of endorsements that's the wait yeah okay okay so it's like it's it's it's like chain but with this yeah added endorsement I mean endorsement is purely a subjective thing that you know let's say I as an exchange will take into account if you send if you deposit some taseys on the exchange and I might say okay what are the endorsements currently in a chain and how many

transactions do I need or confirmations do I need until I say I credit your account. You don't count confirmations and blocks. Ideally, you count confirmations and endorsements. And right now, I think the recommendation is way 30 blocks because there's still some, there's still better numbers which are pending, which are based on confirmation. In practice, I think, yeah. Given that every blocks has like 32 confirmations, I think in practice after a couple of blocks, you're probably fine, but, you know, waiting for these, I think it's a, important to wait for these numbers.

So both Brian and I have spent significant part of this year working to build a validator for the Cosmos network. And in the Cosmos network, that's also proof of stake. But Cosmos has the property that when a block is produced with a set of transactions in it and a set of greater than 66% of the validator set. signs off on that block. And if I'm a user and my transaction is in a block like that, when I see that single block,

I can be like, okay, my transaction is confirmed and it cannot be reversed. Right. So there's like this block finality at the point, uh, the block is produced actually. Yeah.

Does Dezos have something like that or do I as a user need to wait a few blocks, many blocks before considering my transaction final? No, yeah, you have to wait a few blocks. So basically the idea of a finality and something that cosmos is that we're going to get until everyone, and not everyone is too certain, but like a sufficiently large fraction of everyone agrees on everything. And they're not going to, you know, and they're not going to agree until they agree. So potentially it can potentially sometimes it can take longer for them to agree, but once they agree, you know, that it's not going to move. Whereas here, you'll get some of like a tentative agreement. They're like, well, you know, it looks like they're starting to agree.

and then you'll wait a few blocks. But the thing is, it's like, you know, what's the difference between finality and something like a 10 to the minus 9 probability of reversion if you wait for a certain amount of blocks? So for me, I don't see the finality as opposed to waiting for a few blocks to be that big of a deal. What does seem more important to me

and to the benefit of cosmos is that tendermint is a... So, you know, Bitcoin, or Tesos, they're both synchronous protocol, whereas you can do partial synchrony with something like Tundermint, which means essentially that in Tendermint, you can afford to go as fast as you want, and then maybe you won't get to go that fast, because maybe you'll have network delays or attackers that delay.

So maybe you'll take longer to reach your consensus, but there's no harm in trying to try and get it very, very fast. Whereas in Bitcoin, for example, you have to set 10 minutes between blocks because you don't really know how much an attacker can delay blocks, and so you have to kind of like set. this high conservative value, it would be nice to say, like, I don't know what the delays are, but so I'm going to try to go as fast as possible, and then if there are delays, I'll go slower,

but if there are no delays, I'll go fast. So to me, that's one of the main, you know, the not being fully synchronous, I think is one of the main benefits of these approaches. And for that, you need something like a Byzantine agreement. I mean, I've been thinking of different chain-based algorithm. And so one possibility is if you notice that you're missing some slots. So for example, a blog that was supposed, the first block that was supposed to be produced is not produced. And so now you have like the second priority. So if you notice that, you could increase the times. You could say, ha, you know what, I'm missing some blocks. Maybe they're being delayed by an adversary, so I'm going to wait longer. So you could do that. And it's funny because if you do that, then you're, you know, you're, you become safer against attacks. But at the same time, you start slowing down more when they're attacks. And so you can think of it as a continuum, uh, between safety and liveness. Like, you know, you can, you know, you can. You know, you can, you you can get more sluggish and more sluggish, but still have liveliness and have more safety. So they're really a continuum between the two. Now, that being said, I think that when Bitcoin came around, the two reasons for doing something

like a chain-based algorithm is I think when Bitcoin came around, there was this idea that people who just like open their laptop or their computer and participate and go online and go offline. You don't really know who's going to be online and offline. whereas quickly this thing has become professionalized. All the mining pools are professional. Most of the bakers on Tesos are professional or semi-professional. And so since these people are going to be available anyway, the risk of the risk of not being able to find two-thirds

is actually seeing lower than what was anticipated when Bitcoin was designed. Well, yeah, it was a main argument for Bitcoin. It was like, anyone could participate in the mining process and get them involved. And quickly, it's becoming not the case. Yeah, so I don't know how much of them. I'm generally wondering how much are you losing when you're doing finality on every block. And then the other problem is say, well, okay, but what if I have, you know, 80,000 roles?

I don't want to just like select the top 100 because I don't want to be, you know, I want the person who has 0.1% to do 0.1% of the blocks. But on the other hand, I don't, you know, I can't do business in agreement at this scale because it's just like way too many. and then you get into stuff like Affinity where you just like randomly select like a large enough sample and then you do business agreement between them. It seems to be a matter of taste.

Yeah, yeah. But, you know, at the end of the day, I think everyone's kind of overbuilding for the demand right now in terms of consensus and throughput. So there's a lot of really cool science and engineering that's being done all around. I think it'll come down to what applications actually need.

I think that is a main differentiated for Tezos though is like this idea of inclusivity for anyone who wants to participate in the algorithm but I think we're getting a little off topic if we go down that rabbit hole. Yeah no absolutely Tizos is not married

to which consensus algorithm. No. They're dating and and Tis has a wandering eye. Yes, yes it does. So of course Tazos can change the consensus algorithm

but is that something that you will actively pursue? And if so, are there particularly attractive targets that you want to evaluate? So like I said, there's two parts of the consensus algorithm. The first is like how you selects on your core. And so the role and delegation model in Tesos, the El-Pos model, I think it's pretty good. And that thing is rather solid. What you could improve, though, is the lag between you delegating tokens. and then having creation rights.

A lot of these logs are created for security and for randomness generation. So if you can improve these things, you can reduce this lag. Yeah, no, I definitely am interested in improving the TESOS consensus algorithm. I'm, you know, reading the literature when it comes out, thinking about it.

I think the first order of bigness is improving what it already exists in Tzos. I think the randomness generation is an easy way to improve it, you know, using a trick to use in several projects. to do a PVSS in order to generate randomness. So we have that in a branch, but it's not in the main branch. So adding that would probably be a good addition.

I think the block time could be reduced a lot for the first slot. So maybe, you know, you get like, you can you get your first slot within 10 seconds, but in the second slot takes a minute. So that way you get to have a block every 10 second when everything goes, goes well. And if there's some delays, you still have, it's still very forgiving before someone else can start stealing slots. So,

once we get better simulation, a bit of formalization of the consensus algorithm, we'll be able to tweak it and get a bit of performance out of it, and then start evaluating what's out there and what's the best pet for Dezos.

But yeah, there's a lot of projects with a lot of big claims coming up, and proof is in the pudding. It's really hard to execute, but we keep a close eye on them. Yeah, but I'll say that I really like. So I really like, like tendermint as an algorithm.

One compliment I've made before is that they made consensus boring in a sense of like it's really classical it's a really classical method but at the end of the day you get so much better properties and there's a lot of really weird and cool science being done in chain bale algorithms but at the end of the day

what are you really buying when you're doing a chain base algorithm? So I think that's really cool doing sortition in doing sortition in tendermints like the infinity is doing is really cool. I don't think you necessarily need to do it with threshold cryptography.

You could be using something like PVSS to slowly generate randomness and do that. So I think that would be a fairly easy pass to take. I think that's a fairly straightforward thing to do. Yeah, so that's like one axes, which is like the consensus part of it. But then the other part is like adding privacy preserving transactions to the network

and the sort of implications of that on... Right. Oh, yeah. I mean, yeah, once you start having privacy preserving transactions, and once some of the stake becomes privates, it gets a little trickier to let people have their stack privates and participate in the consensus algorithm. Because you want people to leave their stack inside the commitment tree so that you have a bigger and unlimited set.

So these people should be getting baking rights, complicates matter quite a bit. So that's an interesting aspect as well. So you both just mentioned privacy preserving transactions in TASOS, but I didn't fully understand what exactly that means in what context they would be used there. So do you mind expanding a bit on what ideas you have in that direction? Yeah. So at the end of the day, what Cryptocurrencies are trying to do is e-cash, right? So most of the money today is electronic, but it's in a banking system. And so it means that if you want to use electronic payments, you have to go through intermediaries,

you have surveillance, you have censorship, you have all of these things. Whereas in cash, you have a lot of privacy, you have a lot of freedom. So can we get cash electronically, you know, right, that's been the dream? And one aspect of cash that's really not replicated by Bitcoin or Tesos or Ethereum for that matter is a privacy aspect. You know, it's kind of the opposite of privacy. You're broadcasting your payments to the entire world. And, you know, based on your payments, you could be targeted, you could be discriminated against.

And also, I think, just not having privacy, credentials personal expression. There's things that we want to express in the private sphere that we don't necessarily want to express in their ledgers. That's going to be recorded for everyone to see for all of eternity. Right. So in that respect, privacy is super important, and there are different ways that people have tried to tackle it. You know, early on, coin join with Bitcoin and then efforts around ring signatures and crypto notes, confidential transactions. The most privacy you can gain is basically with zero knowledge, proof of knowledge, like Zcash is doing. And so for me, that's the most interesting technology to deploy on Tesos to have private transactions.

So yeah, so you mentioned privacy preserving transaction. And of course, I think many, many of us will be in agreement that that's a very important thing. And I think that brings us to another topic, which is, you know, one of the main, main topics around TASISO, which is governance. So how actually would something like that be implemented in the governments, how would the community reach agreement? So governance was, of course, one of the main selling points, one of the main areas of focus for TASOS. So what's implemented right now in terms of government? And are there any activities already in TAS in terms of people making proposals or are people building systems to vote or like what's the kind of state there right now? Yeah, no. So in terms of what's implemented, the voting procedures are described in the white paper is implemented.

So it's a vote in several phases where in one phase many people make different proposals. Then you have an approval voting phase to select just one of these proposals. Then its proposal is submitted to a vote, then into a testing phase, and then after the testing phase, there's another vote to approve it. So that's the process. There hasn't been any proposal made. There's active development in the GitLab repo for Tesos. And so, you know, probably I think what's going to happen is at some point one of the master branch would start getting frozen into a proposal branch. And that branch will be proposed within the community.

And then, yeah, the idea is that the bakers who are, who represents a different amount of stakes gets to vote on that proposal. So basically like this, as I understand it, there's two phases. So one is the phase of like approval voting, which is like, should we consider this proposal seriously or not? Followed by actual voting. And then in actual voting, I'm assuming there's some form of. of quorum and percentage of affirmative votes needed.

And once that's there, prior to the voting process, the new client code base will already be uploaded somehow to the network. And then if there's enough votes, you switch automatically. Yeah. So the automatic switch that already happened on the network. The network switch,

the first thing the network does is switch protocol. So the genesis block in Tezos is actually a block that signs and activates a protocol, which then starts. So the protocol change, that's happened on the change. It hasn't happened yet as triggered by a vote. So that's the next step. Cool. So when do they expect?

We'll see one of these changes, governance followed by a client switch. I don't know. Right now, there's, I think, you know, I speak to different teams working on Tizos, and I think right now most of these, Most of these teams are really using the time after the launch to really get up to speed on the code base, really understanding in details, clean up as much as possible, what needs to be clean, add documentation. So I think we're really in that phase now.

I don't think it's exactly clear when they will be the first proposal. But I think, I mean, I would be surprised if it were in more than six months. I would be surprised. Well, there have been any proposals today this, there's been. No, there hasn't been proposals to date, but there's an intention to take whatever is a master branch of a GitLab and make a proposal out of it. So, of course, like, there's been quite a bit of skepticism about the idea of there being a vote in a decentralized system, followed by an automatic client switch. And one of the issues that has been pointed out by Philip Diane, who's, I think, is from Cornell.

is that like cryptocurrency-based voting systems are vulnerable to vote buying on a grand scale. So if you have a normal democratic process, let's say the US election, people can bribe voters to vote in a particular way. But then there's no way for them to verify that somebody they bribed actually voted the way they wanted them to. Because the voting is probably in the form of some electronic voting machine or, paper that doesn't leave a certificate of how the vote happened. But like with with cryptocurrency there's a there's of course you can build technology that allows people to prove that they voted a particular way and therefore you can have smart contracts where I as large-scale governance attacker can

create a bounty where I pay XYZ tessies to people that vote a certain way and and basically attract bribe an anonymous group of people to vote the way I want by paying them money. Do you think this is going to be like a practical issue in the Tesos governance mechanism

and how will you deal with it? I think this issue is really interesting and it's strongest when you are trying to do one person, one vote. If you're trying to do one person, one votes, then obviously year and a half there can be a lot of bribery happening and also on top of that, you have the problem of identifying people.

In Tezzo, the type of votes that you have is more one token, one vote. And so as a result, people already have, you know, they have an incentive to vote in a reasonable way, just based on their stakes. And so you could try to bribe people, but if, you know, if the decision they make is bad, is going to end up hurting them, then you would need to spend a lot of money for this bribery. And I think ultimately it's better to try and prevent bribery. to this kind of economic incentives by ensuring skin in the game, then by trying to, you know, to try to, to, to off a skate vote.

That doesn't mean you can do both. I mean, there's definitely very, uh, more literature in, uh, in cryptographic voting. And what Dezos is doing is very, very, uh, simple. And it's all just a public broadcast. At the end of the day, if you don't have something like, like an isolation boost, it's really hard to, uh, prevent the person from just, you. giving user key. And the thing is, like, we're talking about really kind of remote scenarios where, like, oh, you know, you bribe me, but I don't completely trust you. So give me an SGX station

that you're going to get my money back. I mean, you know, people just like trust weird exchanges to not steal their money. So clearly, you know, what's, you know, what's, what would stop them from being bribe is not the lack of SGX accessation. It's interesting can be exercise, but like, I would contend that people are much more bribeable than even what is what is assumed. So really the only defense is to, uh, a, try to align economic incentives so that bribing is not a big issue. And mind you, you can still try to play games and say, hey, everyone who votes for this proposal gets newly created money, everyone who goes against it, loses it. And then everyone is like, oh no, prisoner dilemma. I have to vote for it.

but there's a lot of delays in the things. You know, there's long testing periods and there's enough time for people to coordinate and to say, well, that was a stupid vote. Well, that was manipulative and hard fork out of bad decisions like this. So I'm not really concerned about the practicality of these attacks.

I'm more concerned about attacks that don't look obviously evil like, you know, master-trolling villain, which looked like they would be for the benefit of the network, but which actually end up harming the network or devaluing the network. The under-eded O'Camel contest. Well, that's more about like introducing bugs.

It's more of like, well anyways. You vote for my bad proposal, I vote for your bad proposal. You vote for my bad project, I vote for your bad project, and we have an equilibrium that way. Yeah, but you need to get 80% of people to vote for your bad proposals. That's a wide, that's a wide array of people. You know, the voting in Tesos is not. not so much about like, oh my God, let's all agree to do this change.

It's like, I want to put this change. Oh, no. How am I going to do that? I get to get so many people to agree. It's going to be hard. The point of governance in Tesos is that if something is really obviously good, it should go through. If it's not, it's going to be hard for it to change. And in some sense, it makes, it can make changes to the protocol harder.

So imagine you have a protocol where you say, there's never going to be any change whatsoever. We can't change it. If you change it, it's a scam. Okay. So you try to have a cultural taboo against it. But then people are going to say, oh, but we really need to change it because, you know, we have this and that and we really need to change it. What are we going to do? Well, we're going to hard fork.

Okay. Well, if you're hard forking, what else is on the table, and then now you can do everything. Whereas if you have a protocol and you say, well, we really need to change it. And the answer it's like, well, of course you can change it. All you need to do is first convince the prediction market. it is a valuable protocol, and then you need to get a collision of 80% to vote for your protocol twice after a long period of testing and all of this stuff. Then now you can't really agit it for a hard fork anymore because there's a viable pass for inclusion, even if this pass is hard.

So having some flexibility in protocol changes can actually make you more resilient to protocol changes. That's a paradox of having formal governance. The other thing is there's interesting predictions that you can use at the protocol level. So protocol intesespect into the change. So you don't just accept anything that people send you. First of all, everything is sandboxed. So a protocol that you accept is just a pure function. It's not going to be something that access a file system or anything like that.

The second thing is it's a set of files. So you can choose which file you're allowed to change and which file you're not allowed to change. So in the A Camel module system, it's pretty. straightforward to create a module that handles all of the token creation and token movement and token destruction. So it's fairly straightforward in Tesos to have a rule that says, hey, you know what, you can change a protocol with a vote, but you cannot have, you cannot create more than 10% of token a year. Like you can't do that. If you want to do that, you need 95% of the vote, for example. So you can introduce these rules. You can go even further

and say, we'll have a proof checker in a protocol. And then unless you have a formal proof that you verify such and such properties, then we won't accept your change. So there's a lot of things you can do to improve the governance beyond simple voting. The point of voting in Tezos is not to give everyone a voice. It's to make good decisions. Yeah, I think the biggest misconception that we come across is that Arthur and I are somehow pro-democracy, and we came up with Tezos because we're like pro-democracy and everyone having like a voice in a way to express themselves.

Like really governance is a procedure that's a means. to an end and the end is a better way to incorporate new innovations into the blockchain. And so it can take a lot of different manifestations beyond just one token, one token, one vote. You know, people, the idea of democracy is not to, so I think in general political system,

the idea of democracy is not to give power to the people to destroy power, because you have a lot of people who have a lot of power, and instead of coordinating and making a revolution, they're going to vest all of this power into someone who doesn't really have any power. And so that's really neat way of not having power and not doing things in a government. I mean, that's my take on it more than anything. But you know what? There are people who participate in Tizzles because

they love the participating aspect and maybe I'm completely wrong about it and maybe TASO is great for reasons others than the one I believe it's good for. And that's completely fine. There's a lot of smart people who are very welcome to disagree about these things. And that's the beauty of having a community of like, you know, thousands and thousands of people who have their own unique voice and things. So if this would be very unfun if it was just if it was just the voice or opinions of a few select folks

who were coming at the table. I mean, the opinion is overused, but a strong opinion weekly held. Yep. Cool. Well, let's speak briefly a bit about well, first of all, on the governance side, I'm super excited to see this in you know, in real, real action when some

proposals come and we'll actually see some upgrades and all of that. And I think it's going to be one of the most interesting areas of experimentation in governance in the next few years. And, you know, let's see which way it goes. But I would love to speak a bit at this point about the TASO's community. So there has a community merged since the fundraiser and since the network launch. So can you speak a bit about, you know, what are some of the main players in this community? And also, what is the role of sort of your company at DLS, you know, going forward and in the relationship

between the company and the foundation? So I'll let Arthur take the hard question first, which was the relationship between DLS and the foundation, because I think that's something that's very poorly understood but deserves clarification. Yeah, so originally TESOS was developed by this company called DynamicLGEL Solutions. It was a pretty boring name.

I think it was purposefully boring. And it was developed with a team of programmers, Adoc MLPro. And so the TAS Foundation signed a contract with DLS back in June, I think, of 2017. And after that, they basically took on the responsibility to develop the project and to further its ecosystem. And so when Gavers and Gwedo reneged on their obligation to do that, DLS tried to keep involved, to keep the project going.

But so, you know, now that the foundation has a functional board, we've taken back seats. And the system itself, it's being developed by many companies, nomadic, obsidian, cryptonomic, and there's one that's just started in Japan, so there's really an array of developers around the world working on

on Tesos, and I think, like, for casting a night, at this, for myself, what I, what I try to do is meet with these developers and, you know, and try to sit down with them and say, like, hey, you know, here's what I think about the consensus algorithm, this type of

these type of things. Yeah, we spent a lot of time evangelizing, but we have no formal role within the foundation and DLS doesn't or hasn't over for over a year had any contractual relationships with any development shop. So it's a very interesting, interesting yoke it wears reputationally, but yeah, it doesn't have any formal role within development current day. But as I mentioned before, there's like tens of thousands of people in the TIS community. Yeah, we do have a contract back in January. But it's been a while. No, June, June.

No, in January, Kathleen. Oh, okay. But not with a foundation. With over a year. Yeah, okay. It's felt like more than a year. Yeah, sorry. It's time dilation is an issue here.

But I digress. Yeah, back in July of 2017, at least, you know, 30,000 wallets are open for the Tessus fundraiser that represents, you know, tens of thousands of people across the world. There's many more people in the Texas community, arguably, than those who participated in the fundraiser. But for sake of argument, you know, that's a good, good metric or a good number to kind of put our hat on. You know, since the fundraiser has occurred, and since the board has been governed by, you know, sane people, there's been a lot of interesting, interesting, more formal and informal ways that the community has come around. One of them has been in terms of non-profit foundations across the world, notably Tezas, Japan,

in Tezos, Korea, which have taken the mantle of evangelizing and creating meetups and whatnot. And baking classes. And baking classes. And really getting into the roots of the technology. So we see a lot of strong presence in Asia and strong presence in the U.S. and in Europe for interest in Tezos, and Latin America as well. Like, Tezos Brazil is a pretty big baking, baking cohort. Yeah. And that's truly the strength of the network.

Like, that's something that can be easily either, you know, disbanded or replicated. So we see that as a true strength of Tezos is the number of people who have, you know, shown an interest in this technology. Just to clarify briefly, so you mentioned DLS had a, I mean, of course, DLS was the company you founded, and that was originally started working on TESOS. And you mentioned that DLS had the contract and was kind of working for TESA foundation, but not anymore. So does that mean at the moment,

neither of you has a kind of, you know, formal work engagement on behalf of Tasos and you're just sort of working on your own time or like, what does it look like at this point? Yeah, pretty much. We're working on our own time. I like the term fun employment, but, you know, not formally working sounds good too. Yeah. And it's the idea that

down the line, are you planning on building DLS into like an organization or like, so you don't have it or building out a team to work on TESOLs or maybe starting, I don't know, different types of projects or building things on TASO, so what do you, what are you long-term plans? No, no, so the agreement was at the fund, you know, DLS itself would be acquired by the, by the, by the, by the Tazos foundation. And, you know, it remains to be seen what, you know, what they want to do with it. But, you know, that hasn't happened. We haven't. We haven't, made money yet, but we're a pretty comfortable lifestyle, so we're not in any rush. Yeah, I mean, I think just logically, like, you know, Arthur and I are hold officer positions

in DLS and the CEO, I'm the CEO, or there's a CTO. Moving forward, I think it makes more sense for me to focus on the application layer, for example, and it makes more sense for Arthur to focus on the protocol layer, as he's just outlined, he has many ideas about it. I have less conviction about what types of libraries ought to be added and whatnot. So we just in general, like our natural interest kind of lead us to separate at this point. And so I, you know, I'll look forward to doing my next thing. And Arthur do his role with Tezos, whatever he winds up wanting to do. But the logical endpoint for our association with DLS has always been, you know, the launch of

a network that was robust enough that the foundation felt comfortable with. So holding to that, holding to that, you know, I guess milestone, it doesn't really make much sense for DLS to operate much further. Yeah. So essentially, like, as DLS, you mentioned earlier in the show that you have a put option with the foundation, which means that once the network is functioning well, maybe even better than today, and it has met certain metrics, then DLSD company can be sold to the foundation.

foundation and then you as the promoters of that company will receive like I think 10% of tessies and a percentage of the fundraiser proceeds and thereafter sort of you can form your own other companies to either focus on protocol development or application development and this will be completely independent of the desos foundation yeah exactly yep okay okay so kathleen would you do you have a particular application level project in mind that you would want to pursue that you feel strongly for? Oh, yeah. Well, I think the main problem to having blockchain technology adopted broadly construed

is that many people don't know how to interact with, interact with the blockchain. In particular, smart contracts seem to intimidate people, and rightfully so. It's very easy to shoot yourself in the foot. And so one thing I was thinking of is like, hey, you know, there's a bunch of different use cases that everyone spews on panels at all these different conferences. The one that I find to be the most engaging is online video games, because I don't think it's a coincidence that one of the most popular applications that started to use Bitcoin was a magic the gathering exchange. So these people have a sort of natural disposition towards using digital assets first.

And so I want to focus my efforts on understanding how people might interact with smart contracts. And it makes sense to that end to use video games at the hook for building up better applications and tools. And I found a really cool co-founder. Hopefully we'll have some news over the next few weeks about the exact direction we want to take things in, but I don't want to jinx myself. So thank you for asking. And I'm sorry, it can't be a little bit more explicit with my intention. But that's the idea.

Yeah, and I think the main contribution I can do to Dezos is keeping in the direction of, you know, the three directions we've mentioned, which kind of consensus algorithms are going to be most helpful for Tezos, how to get security in a code base, and in the smart contracts, which are written around Tezos, and also especially governance, how to improve the governance model.

Very explicitly is a devoting mechanism is a bootstrap mechanism for Tezos. And so improving that with pseudarchy, with constitutionalism and rules around which amendment are permissible and not permissible, that's mostly what I want to be researching and developing and essentially proposing to the community. We've spoken a little bit about this before,

but since Tasos, the original Thaisers concept was developed, of course, the blockchain space, and especially the space for your next generation blockchain has become extremely competitive and extremely active. And I think also a lot of investors and the VCs that basically they saw Ethereum and there was such a massive amount of money made with Ethereum, and then they were all like, oh, no, we didn't make any of this money.

So now we have to invest in the next thing. And so I think because of that, we've seen a massive investment in, you know, next generation blockchain project. And many of those are working, you know, with large teams. So there's things like Cosmos, Definity, polka dot, Algarand, EOS, and many others, you know, with also lots of money. One of these is not like the others. Right.

Now, one of the interesting question then becomes the differentiation, right? Like, which of those is, you know, is it going to be Winni Tategall or are there particular areas where a project is going to do better? So how do you see TASO differentiated in this aspect? And do you think that there are a pretty particular types of application where TAS will do best in? So, yeah, there's different ways to differentiate. One way to differentiate is you can be Bitcoin. And you're like, well, you know, where's the first one?

we're the most legitimate one, and obviously we're going to win. And then if you're convincing enough people of that, then it becomes a self-fulfilling prophecy. So that's one way to defer to yourself. If you're not Bitcoin, it's trickier. And I don't think you can do it by just having better technology, especially since most of these technologies open source. And so as long as you have other teams who are competent

and who can integrate that, you know, who can observe good technology, who can be wise enough to not have the not invented here syndrome and adopt it inside your own platforms. I don't think technology becomes an advantage. So what really becomes important is how good your community of core developers is and how easily you can improve and incrementally develop on your platform. people make a big deal about the entire, you know, developer ecosystem in this area. I mean, it's certainly a strength, but it's all an application layer ecosystem.

There's not a whole lot of core developers. And so having a really, really strong core developers who are really personally invested in your project, who really want to, you know, make it a big success, that I think allows you to integrate the technologies that different, projects they're having. And so at the end of the day, I think the differentiator becomes community and governance. If you have a large community and a good governance model, then it then is, then is that's something that's hard to, uh, to compete with. Yeah. And, and I mean, obviously, you know, to some extent, we think those are strengths that Tessus has. So we're,

we're, you know, there's a bias here. Yeah, there's a clear bias here. But in general, I just think, you know, if you look back at other projects that launched over the past years that had a lot of technical strengths. You have things like NXT, you have things like stellar, so and so forth. And they sort of came off with a bit of a whimper because they didn't sort of have this organic, natural community behind them. I think that's telling on a few fronts. It's a little bit in governance, but it's also a bit in the message that they had around them and the myth that they had around them. So Tezos, you know, you can say many things about it. But one thing we're certain it's got this sort of grassroots organic quality to it that allows people to

really get involved in the heart of the algorithm by allowing for this inclusive algorithm. So I think that's something that at least gives it an advantage of other projects. And the other things like technological advances are things that Tesos was meant to incorporate because it anticipated these things. So I do think... Yeah. It's also a field where you succeed by not face planting. So, you know, if you're a ramog enough and you stick around and you don't have major problems

and you keep being used just by virtue of doing this for a long time, I think you gain, you get a lot of credibility and resilience. Yeah. Just by doing this. So, and it's not easy. It's not easy to have longevity in this space. It's tough because a lot of the narratives around other projects really start around what they promised to deliver

and very few of them actually focus on what's there today. There's sort of this romanticism around what people say they're going to do that drives a lot of invitation for comparison, but if we look at what's actually been shipped, you know, it's a bit of a murkier territory.

It's also, you know, development priority because you still have efforts to make and at the end of the day, you know, if you're not, if you're spending a lot of, you know, if your community spend a lot of time, developing solutions for getting a million transaction per second. It turns out no one needs it.

Yeah. Then you wish a lot of time. Whereas if your community developed, I don't know, for example, all solutions for having more privacy in your transaction, it turns out that a lot of people want that, then you end up having more staying powers because of that. Cool. Well, thanks so much for coming on. It was really a pleasure to, you know, speak again about TAS and to hear a bit an update about project and it's been fascinating to watch how the project has developed and the kind of ecosystem

has started emerging since the main net launch and the beta launch so yeah thanks so much for coming on it was a pleasure thanks for having us and yeah thanks so much for a listener for once again tuning in if you want to learn more about tasers of course we'll have links to many of the things we talked about in the show notes so you can learn more about it and if you want to support the show you can leave us an iTunes review that helps new people find the show and we're very grateful for that and yeah we look forward to being back next week so see you then