Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Joseph Lubin: ConsenSys – The Distributed Incubator which Jumpstarted the Ethereum Ecosystem

Episode Date: January 8, 2019

We’re joined by Joseph Lubin, Founder and CEO of ConsenSys. Joseph founded ConsenSys as an Ethereum development studio on the heels of the Ethereum crowd sale in 2014. The company has since grown to a distributed organization of over 1,000 people. Over 50 companies and projects have emerged from ConsenSys, including Metamask, uPort, Gnosis, and GitCoin, to name only a few. Today, the company continues to invest in growing the Ethereum ecosystem by funding projects, and through consulting services for companies and institutions. Topics covered in this episode: Joseph’s background working as a technologist in the financial industry How he discovered Bitcoin in 2011 What lead Joseph to meet Vitalik Buterin and the founding Ethereum team How he founded ConsenSys and the company’s vision The company’s impressive growth and output The recent round of layoffs at ConsenSys How he thinks blockchain can change the world for the better His advice to companies feeling the pressure of the current bear market Joseph visiton for the future of ConsenSys and Ethereum Episode links: ConsenSys website The Prophets of Cryptocurrency Survey the Boom and Bust (The New Yorker) The Uncanny Mind That Built Ethereum (WIRED) ConsenSys Monthly Report — November 2018 A Prehistory of the Ethereum Protocol Joseph Lubin on Twitter Thank you to our sponsors for their support: Simplify your hiring process & access the best blockchain talent . Get a $1,000 credit on your first hire at toptal.com/epicenter. Deploy enterprise-ready consortium blockchain networks that scale in just a few clicks. More at aka.ms/epicenter. This episode is hosted by Friederike Ernst and Sébastien Couture. Show notes and listening options: epicenter.tv/269

This is Epicenter, Episode 269 with guest Joseph Lubin. This episode of Epicenter is brought you by TopTal. Experience a new way of hiring as TopTal delivers only the top 3% of applicants, including highly skilled blockchain engineers. If you're looking to scale your team with the very best talent, visit TopTal.com slash Epicenter. And by Microsoft Azure. Configure and deploy a consortium blockchain 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. To learn more, visit aka.m.m.s. Hi, welcome to the epicenter. My name is Sebastian Kutio. And my name is Brian Farman Crane. This is a very special day today because it's five years that we've spent more than five years now that we started Epicenter. I've done a show every single week since then.

Such a long time. Five years, of course, is long even in the normal world, but in the blockchain world. It's like an eternity. Yeah, so last week, and so this is coming out the week of July 7th. And so on July, sorry, July 7th, on January 4th, we celebrated five years. January 4th, 2014 was the day that we released our very first episode, which was our predictions for 2014. I went through it, actually, I kind of listened to it a little bit. And there was some, you know, pretty interesting things in there, but I think some things also that we were. like just totally wrong about ended up being totally wrong about and how the space evolved.

But yeah, I mean, five years is like an incredibly long time. And I think one of the things that stands out the most of me is like is the fact that, you know, we've kept doing this consistently for five years. Like I've never done anything in my life. I think this consistently for this long amount of time. And had I considered it back then, I don't think I would have thought that five years from now we'd still be doing this. Yeah, that's true. I think if you had told me, okay, every single week for the next, you know, five years, you'll have to put out an episode that would have been very daunting.

But of course, that speaks also to, you know, what has made it possible, which is, you know, more people than just the two of us work on Epicenter, right? So obviously there's the new host that came on. It was Mayher in 2015, and then there was Sunny and now Federica, right? So they've been essential to be able for us to produce an interview every week. And then, of course, we have also a team, you know, from audio with a veteran to Shino's who's doing covers, to Ola, who's been helping with social media, to like Anna, who's doing some accounting and finance work, to Pida, who's helping me, we're scheduling. So, of course, all of these people have been essential that we've been able to actually do this consistently. Right. And so if you want to sort of like learn more about what we've been up to this last year and, and sort of discovered the team, we posted an article on our medium. So it's medium.com slash episode on our podcast. You can find the article there. There's lots of great pictures and, you know, interesting stats and stuff about the podcast these past years. I think like another thing also that has kept us going is obviously the people who listen to the show. I think even in the moments where I've.

I've had a bit of a lull and I felt like, maybe I don't want to do this anymore or, you know, this does get kind of a bit repetitive after a while. I feel like I have this commitment to people who listen to us to keep doing the podcast. Like that's the reason why I want to keep doing it. One of the reasons I want to keep doing it is because I know that there are people who find it very valuable and who appreciate it. And meeting those people all through the years has been just absolutely. absolutely gratifying, going to events and conferences and just having people come up to you and tell you how much they love the show and how much they appreciate it and how much they have learned from this podcast has been, I think, one of the most gratifying things in most of my

life, I think, is that very fact. Yeah, no, I agree. Absolutely. And the other thing that stands out when you think of all of this long time and all of these interviews that we've done, it's just how vibrant this. spaces and how diverse and how much activity. But when people outside of the blockchain space, sometimes I would tell about this podcast and say, like, but don't you run out of things to talk about?

People say that all the time. Yeah. And of course, not at all, right? There's far more topics and interesting projects that we could cover than we have a chance to write all the time. You're like, you have so many potentials or people that want to be on the podcast and you have to choose just the ones that we think are best. And yeah, so that's, I think that's also just an incredible testament to the space.

And also what's noteworthy here is the evolution has gone through. So when we started, it was called Episode of Bitcoin. So those who've been around for a long time, they probably remember that. And now, even in the beginning, we didn't really think it was just Bitcoin. There was just some other things. Actually, the Ethereum White Paper had just been written about when we started. So I think one of our first episodes was when we spoke about the Ethereum White Paper. paper. And so even in the beginning, we started, we were speaking about other things too,

but back then people still thought of it as the Bitcoin space, right? And the term blockchain didn't even exist or maybe it existed, but nobody used it. So I think this diversity of the space that just keeps getting bigger and bigger and more, you know, kind of like a fractal going all direction. This is also an amazing thing. Yeah, I think that's probably one of the things also that has surprised me more about the space since starting this podcast. I've never imagined, I think back then, that this space would become such a diverse set of communities and that keeps growing. I mean, it started sort of as the Bitcoin community and then Ethereum came and then other

projects came along. And some have died. Others have flourished. But now we have like a vibrant ecosystem where, you know, a lot of the big. big networks have their own communities, their own conferences, and the interactions between those communities is really great. And there's also some rivalries, I guess, as in any community. But globally, I think, like, things have turned out much more positively than I would have

imagined back then. I mean, the growth has been just absolutely phenomenal. Yeah. And so next week, we want to do an episode. to sort of commemorate that, which will be, you know, all of us hosts, or most of us host at least, and we'll also be taking some questions from you.

So if you want to have anything that we answer or discuss on the show, then, you know, let us know about that, submit those questions to us and you will try to get to it. So you can either tweet at us at our Twitter or then there's also going to be a Reddit post now. Yeah, so we'll post a Reddit AMA

on our subreddit. The subreddit doesn't have a lot of subscribers at the moment something we launched just recently but the post will be there so it's

Reddit.com slash R slash epicenter podcast and the Reddit post will be there so you can ask questions you can upvote on questions and also you can send us

your questions on Twitter obviously and we will answer some of those questions in an episode coming up probably next week or the next couple

weeks yeah so look forward to that as well. Well, cool. Then let's see. Here's another great five years. Yeah. I mean, who knows? Maybe we'll be here again in five years. I guess time will tell if that will continue to happen for the next five years. I think if it does, if it does happen, then we're here for the next five years. I think the show, again, will probably be very different in five years than when it is now. Hopefully it will be much bigger and with a much bigger audience. Also, I want to mention one thing we didn't talk about before is just how much we appreciate our sponsors as well

and those companies that have supported us throughout the years. You know, they have also evolved. You know, we had some sponsors in the beginning and now, you know, much different sponsors, but nonetheless, all the companies that have helped us over the past, we like to thank you so much for your support. So to this week's episode, so this week, we talked. We talked about it. We talked, talked with Joe Lubin, who's the CEO of Consensus. And I did this episode with Frederica, and we talked with Joe for a good hour about the history of consensus, the vision, and also, so the broader Ethereum ecosystem, and, you know, got really insightful information about that. You know, sort of got the pickus brains about the ecosystem as a whole. So I hope

you like that episode. And just one disclaimer, Joe Lubin is on the board of Gnosis, where, of course, Fletiga is the C-O-O-O. And so just thought we've mentioned that before the episode. So here's our episode with Joe Lubin of Consensus. We're here with Joe Lubin. Joe is the co-founder of Ethereum and the founder of consensus. And we're here to talk about the state of consensus and the state of the ecosystem and where it's all going. Joe, so you've switched gears in your professional life a number of times. Can you give us a short overview of what you did before you first heard about blockchain technology? Hello, thanks for having me.

Short overview of my very long life. So I academically did computer science and electrical engineering. I was an athlete in college, so I actually played for a very short while on the professional squash tour and spent time sort of driving around to different tournaments and ended up at my college and ran into a professor of operations research civil engineering there, and he essentially offered me a job doing some research.

So that kicked off about 10 years of work that I did in robotics, machine vision, in neural nets basically, different forms of AI, but mostly neural nets. And that led to some work in automated music composition using similar techniques. We built a composer that made some really good music and made some really bad music. I was in the context of a music studio, a company that got paid for creating music for different kinds of publications. Got much more general after that, just general software engineering. My last sort of big software engineering gig was a project at Goldman Sachs where I was on the IT side of private wealth management, working with different groups across private wealth management.

and that essentially introduced me to the world of finance. And after that, I was in the right place, right time. A friend of mine brought me in to help build out back office functions. He was running a strategy, a money-making strategy with a wealthy family, and he wanted to start a hedge fund, and he needed the partner. And so that all evolved into a successful business and was essentially my introduction to the world of finance. Ended up building different kinds of trading systems

and learning how that world, the world of finance, the world of geopolitics worked, where before I really hadn't paid much attention to it, I was mostly interested in the technology. So with that background, some technology, or actually a lot of technology, and a decent amount of finance, I became aware of what I felt were concerns about how the global financial system was operating and different issues geopolitically.

And I think that background made the Satoshi white paper immediately stick with me. Do you think that having a background in finance and technology is sort of like the sweet spot for someone entering the blockchain space in circa 2013, 2014? Is there not a better combination of skill sets to be successful in this space? I think it's pretty common in terms of people that I know who have similar backgrounds who, because of those backgrounds, resonated with the ideas. But moving forward just a little bit, as it becomes more apparent to what these decentralized protocols can evolve into and can support for society, I think it's pretty much everything. So it's currently drawing people of all interests. So when did you first hear about Bitcoin?

So very early 2011. So there were, I'm not sure if it was. was late 2010. I know there were, there's one or two slash dot appearances that I paid slight attention to, but they didn't drive me to read the white paper sometime early in 2011. I finally said I should read this. And that's when you realized this was going to be a game changer? Yeah, the white paper itself hit me pretty hard. So yes, I thought essentially, I know I've said this publicly before, but I was concerned, depressed about the state of the world. I felt like we were in a cascading collapse.

I feel like we are still in a cascading collapse. I feel like we're possibly even in worse shape right now. And back then, Central Banks still had some dry powder. Right now, Central Banks have less dry powder. So my feeling was that we were essentially at the end of the end of the United States, of life of different monetary systems, and there was so much debt in the system that could not be repaid and the interest

would keep accumulating. And essentially, there would be two likely outcomes. One would be a slow cascading collapse where growth globally would be quite slow for a couple decades maybe. Or some sort of nonlinear events, some sort of contagion, where everything is pretty awful for a while.

At that point, a lot of people were waking up to that fact. We all live in our little bubbles, so I was aware of lots of people waking up to that fact and reading about that stuff confirming my bias, shall we say. But there were people trying to occupy everything, get the word out that something is a mess. And when I read Satoshi's paper, I realized that it may not be so hopeless that we might, instead of occupying everything and exiting society, we might be able to build alternative systems, create better foundations for better systems built on top of them. My hope was sort of flit from being unhappy that central banks had, with quantitative easing, caused so much devaluation of currencies around the world and a sort of spiral to zero.

My feeling was, hey, maybe they should keep doing that for a while, and hopefully they can kick the can down the road for 10 years or so. and give us some breathing room to start building alternative systems. And back then, I and many others were so naive. We thought Bitcoin was kind of all we need. It was going to be the foundation of everything. You could build everything on top of that. And now, Bitcoin is an awesome system, and it's going to keep developing.

But it's not really easy to build versatile software on top of it. So when you first came into this in 2011, and so like we'll get to Ethereum in a second, but what were you doing between 2011 to basically essentially like when you met Vitalik was, were you working on any projects or you were still working at Goldman Sachs? No, that was way after Goldman Sachs. So I was doing trading and built trading systems. and I was from pretty much all of that time I was living in Jamaica.

So I was spending time there kind of playing around in the music industry. A friend of mine wanted to build out a music career. And tell us about what led you to meet Vitalik. I mean, you guys are both from Toronto. So how did that occur? Yeah, so December 2013, I went back over Christmas to visit my family, as I often did. And there was, I think, this thing called the Global Bitcoin Alliance. There was the Bitcoin Foundation, which I wasn't too impressed with.

And I think many people were not so impressed with it. But this guy, Anthony DiOrio, was trying to take a different approach, a sort of grassroots bottom-up approach to bringing people who cared about Bitcoin together. I think there was a Canadian version of it, and I think he was trying to put together a global version of it, and it seemed like a much healthier approach to do it bottom-up than to declare that you're the head of Bitcoin with that foundation. And so I just hadn't really, you know, since 2011,

I'd read pretty much everything about Bitcoin and the blockchain ecosystem, MasterCoin, Next, etc. But I wasn't really very active. I was mostly living in Jamaica, so I wasn't really very active in the community. And I reached out to Anthony, said hi, and he said that there was a meetup happening. January 1st, 2014, Vitalik Boudarin, who I'd read a lot of articles from, through Bitcoin magazine, which he owned at the time. And I was, I think I knew that he was very young before I spoke to Anthony.

But I was astonished when I found out how young he was because he's such a clear writer. So he said, Vitalik has this new white paper. A bunch of us are going to get together. He's going to talk about it and we'll all talk about it to come by the meetup. So I did. And spent a little time with Vitalik. He sent me the paper that night, read it that night. read it that night and a whole lot of people were excited about it.

So I, like many of those people, stayed close to the project. It was mostly meetups in Skype discussions at that point. And towards the end of that month, January, Anthony got a house in Miami in advance of the North American Bitcoin Conference. invited, I think he may have invited like nine or ten people and I was one of those people and I stayed very close to the project over that time and so I was very interested in doing

whatever I could to make Ethereum happen and so we kind of constructed the first phase of or maybe it's the second phase of the core group that brought that project to life in the several days before the North American Bitcoin conference at which Fatalik essentially delivered his white paper. Hiring is stressful.

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MT4 building trading systems. But obviously have a fairly strong background in computer science. So we did a lot of conceptual work back then, thinking about what ether was, thinking about what gas was, should we burn gas, what should be the issuance model. So I was involved in a bunch of that early on. and I guess because I probably had more experience in business than others, ended up driving a lot of the discussions with lawyers around the token launch.

So we essentially took that opportunity to tell the world what Ethereum is, what Ethereum was, and what Ether was, and what gas was. Because it was just computer science, really, at that point. And in order to help the world understand what we thought it could be, ways that these constructs could be interpreted, we worked with a prestigious law firm in New York and essentially got an opinion about what our token launch was. And essentially had to define all those things, had to define what ether was, had to define what gas was. and essentially convinced the lawyers and convinced ourselves that, according to the Howie test, we were not selling a security, an unregistered security, potentially to Americans, but we were selling this consumer utility token that people could use to run programs on a world computer,

store data on a world computer and that their fates would significantly be independent of the fates of the Ethereum Foundation and the Ethereum founders. What were lawyers' reactions when you first were bringing up this idea of Ethereum and then even more, I guess, perhaps crazy in our minds, like raising money on this platform? What were the reactions like? Well, lawyers are generally pretty happy to take your money for exploring different and hopefully complex things. But these people that we worked with at prior cashmen were already pretty savvy. So they're already significantly aware of the Bitcoin space and really great, smart guys.

It was a pleasure to work with them. and they were really excited about the project. I think they said it explicitly, but I'm pretty sure they enjoyed that project quite a lot more than your average project. Did you have any doubts at the time? So basically if now four years on, you know where Ethereum is and you could have told that to your former self, would you have been relieved or would you have been disappointed?

Not relieved, delighted, obviously. If I have doubts, I have sort of judged something and choose not to do it. I'm not a very doubt-ridden person. If I see that something can be done, I'm usually pretty clear that there are an infinite number of pathways that we could take to get it done. And essentially I, and I hope the people around me, just put our heads. down and get it done. And so that, I mean, there wasn't much doubt in my mind that these technologies were so profound that they would have extreme transformational effect on human life going forward, unless something really weird happened. Like, I don't know, some sort of asteroid set us back too much. But these are great ideas. they were out of the bag.

Nobody's going to be able to stuff them back into the bag. And so I was quite confident that it was almost an engineering problem at that point. A lot of us could see it. A lot of us could sketch the early possibilities, Dropbox, creating tokens in a few lines of code. And it's easy to imagine building societal infrastructure over. time in layers upon that sort of foundation. Have you talked to the lawyer since?

So, I mean, you said that... I've had a couple dinners, a couple dinners, seen them in a small number of places. So basically, you guys try to construct Ethereum such that it wouldn't be a security. And the SEC has since... We did, we did construct it so that it would not be a security. Yeah, I mean, basically, if you read the SEC memos, it seems that they are saying that Ether used to be a security and now it's not a security anymore.

They said without opining about whether it was ever a security or not, we do not consider it a security. Now. Okay. So I think there are different ways to read that but I mean it all ended well.

Okay, so the next stage was after Ethereum had launched and the token sale had the crowd sale had had commenced, you founded Consensus, right, in October 2014? Yeah, really, really kicked off in earnest in early 2015. But yeah.

So what was the Consensus vision back then? It wasn't too dissimilar from what we were thinking about on the Ethereum project and with the Ethereum Foundation. we had notions that that group of people would build for profit projects and companies. Once we finished, say, version one of the platform and released it into the world, gifted it into the world and put it under a foundation for future shepherding, didn't work out that way. It became clear eventually that we should just,

focus on the open source non-profit situation, the open source platform. And that was definitely Vitalik's preference, although early on he, early on we were all open to the notion that it would be a hybrid nonprofit, for-profit thing. But it was too complicated to make that work. And essentially, we all agreed that because we had these shared overarching goals, even if we might have some difficulties as any project team might, we would keep it together and achieve the goals in front of us. We got that done, and the different people have, in some cases, gone in different directions and many of us are still significantly involved in the Ethereum ecosystem. So you mentioned your family consensus. Things started happening in early 2015. Can you describe what

things were like back then? I mean, the ecosystem, the Ethereum ecosystem was very nascent. There weren't that many projects. What was it like sort of starting consensus in that context? Yeah, so I've described it as let's start a company, build software applications on a platform that isn't yet released with no developer tools in an ecosystem that doesn't yet really exist. And so that's roughly what it was like. So we started out building things like a little accounting tool and DAP store. and the people who were building stuff realized that we needed some tools to build better. And so Tim Coulter built a whole bunch of scripts when he was developing DAP store

and turned those scripts over quite a bit of time with lots of help and effort on his own part into the Truffle suite of developer tools. one of the individuals who was working on our accounting system, Balanced 3, ended up having strong ideas about identity and we built quite a large team around that to build out Euport and now 3Box. And Aaron Davis was working on Metamask and was in a situation

where it sort of made sense for him to leave that. And consensus was very, excited and happy to support that project. In Fear is a project that essentially started as a consolidation of internal consensus efforts at building a bunch of different test nets for our different projects. And some amazing engineers put some organization to that. And a few months later decided that we should make it available to the Ethereum ecosystem. and it has been available at essentially no expense to the ecosystem for a long time.

And, you know, it's don't really know what it's going to take to bootstrap technology ecosystem that's different from what's been built before. And so organically, we kind of just built what we needed. And even token launches sort of came out of that. And one of the earliest token launches was a project called NOSIS, an absolutely brilliant project. And it and Singular and a few others started to get a lot of people thinking about essentially the first killer application on Ethereum. Do you have a sense of how many projects in total were started within consensus? So we have around 50 projects running right now.

We've invested in over 40. And there are a bunch of projects that have been discontinued for various reasons. So I could look at a list. Probably significantly over 100 projects have been started at consensus, and many of those continue. So when you started consensus, and I mean, obviously the team grew, you know, to now being, you know, one of the largest, if not the largest team. I mean, I mean, I guess, you know, if you're counting like all of the projects and consensus, the largest team in the ecosystem, did you foresee that you would grow this company to, you know, over a thousand people in just over, what, four years or something like that?

So it wasn't intentional. It was responsive or reactive. As I indicated before, organically, we built what we needed to build and we developed the ability to look at different projects. And if the projects were cool or potentially valuable, then we would greenlight lots of those projects. It was a phase in our ecosystem, a period in our ecosystem where it was about exploration and demonstration. It was, as I've written now somewhat publicly, it was okay to just show up and do something cool and make a splash because we were trying to explain to the world what this technology is, how it works, and why. it might be really interesting for building systems going forward. And I think we've been very successful in that and extremely proud of the projects that we shut down but learned a ton from.

And the projects that are still going and have a life of their own, some of which have externalized out of consensus. And I think for that phase, we were exactly what we should have been. And as we recognize that we now have an ecosystem, a real thriving business ecosystem, similar to previous ecosystems like database ecosystems and browser ecosystems and mobile phone and game console ecosystems, we now have to be. a more competitive, more rigorously structured and functioning company, and essentially other entities are streaming into our ecosystem, validating what our hypotheses were,

and now we have to compete with them. And we're pretty excited about that phase. This kind of brings us to the next topic, which is the round of layoffs at consensus. Now, I believe 13 or 14% something around that has already left the company. The spokes, for the most part, are being spun off into entities of their own, and the company is downsizing, correct? Journalists tend to write things to get readership, to get listeners. and often they don't really concern themselves too much with the facts.

So there was great sensationalism and exaggeration. We did look at different groups in solutions, in HR, and community, and some other spaces within consensus. and we streamlined. We essentially removed a bunch of job functions that didn't make sense for consensus 2.0. Maybe we'll rebuild some of that going forward, but we need to be a leaner company.

And spokes have spun out of consensus since the start. That's essentially been the plan. We have essentially a pipeline where many spokes can stay within consensus if they're doing great work for quite a long time and be well supported. Other spokes prefer to go it on their own and choose to leave consensus. We are going to move from what I would consider to be an opportunistic model to something that's much more structured. And this is something that has been in design for close to a year now. But how much of this, so I'd interrupt, but how much of this is linked to the state of the

market right now? I mean, other companies also are laying off people. And surely there must be some component. Definitely. Yeah, definitely accelerated by the drop in price in our ecosystem. the contraction in our ecosystem. But again, it's about us getting much more structured about how we form spokes, how we invest in spokes, and how we move them through what we're thinking of as a pipeline, where they essentially get involved with other VCs towards the end of that pipeline. If you've listened to previous episodes with Marley Gray and Matt Kernan, you know that Microsoft is committed to providing enterprise-grade tools and infrastructure for

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We'd like to thank Microsoft Azure for their support of Epicenter. When you think back at Consensus 1.0 now, other things that you would have done differently, could you do it all over again? I don't really think that way. I think if there are any mistakes that we've made, and I'm sure there were many, many mistakes, those are just things to learn from. There's no way to, in my opinion, plot a perfect path through a complex domain.

You have to bump into stuff and learn and get better. So I just, things don't pop to mind about, you know, what big thing we did wrong that we should have done differently. It's gone remarkably well so far, in my opinion. Are there any mistakes that you can think of that perhaps in hindsight, now you can in fact learn from in this time? So nothing is coming to mind right now. And we could have taken different pathways in our ecosystem.

We could have moved faster at the protocol level. perhaps the biggest mistake that wasn't really a mistake was that consensus didn't spend a lot more time building a team focusing on Ethereum Protocol level activities. We sort of expected that the ecosystem would develop the theorem 2.0 more quickly and layer two technologies more quickly and we were focusing perhaps too much at the application layer and we have starting maybe 18 months ago we started to correct that we have essentially built something called Pegasus protocol engineering and systems team and

I think we're around 60 people that are building out the Pantheon client and doing work on Quorum and doing work on different side chain mechanisms and layer two mechanisms and lots of R&D on Ethereum 2.0 stuff and Ethereum 1.X work. And our own fear team has actually been driving some of that stuff as well. Are these things that you would have hoped the Ethereum Foundation was going to tackle? What a mean question. Yeah, so the Ethereum Foundation is good at shepherding research, at setting up grants, now they employ some important people in our ecosystem,

and Vitalik is doing an absolutely astounding job on the technical side of driving the most capable platform forward. And it's a complicated endeavor. It's really complicated to try to stay neutral, which I think makes a lot of sense for the foundation, and yet still drive the technology well and quickly. I think Vitalik has chosen a good balance, and I think in the context of so many mean

and clueless people on the internet who attack a brilliant young man. He's made some great choices. He has done what he can to try to decentralize the process more. It's already quite a decentralized process. It always has been. I've been very comfortable with that.

And, you know, he leads by doing. He leads by example. He never tells anybody what to do. So I'm happy with the foundation, and the foundation itself is evolving. So it's opening up much more. And it's great to see that. I think the foundation and the ECF are putting bounties out on Gitcoin and trying to further decentralized development.

And consensus and Pegasus are really happy to be one of the many teams that are building Ethereum clients. I think they're like 10 or so teams at this point. And I haven't. So collaboration was quite good early on, but I haven't seen this much warm, friendly, excited collaboration where lots of people are meeting in different parts of the world every few months and getting on calls every week.

And really, it's moving really fast right now. So exciting to see. I do think the timelines for Ethereum 2.0 are contracting right now. People are building Ethereum 2.0 as we speak. As a follow on from this, consensus during the last four years has changed considerably from Consensus 1 to Contentices 2. So you said that the vision has kind of stayed the same, but the process is... We're at about 1.2 right now. 1.2. Okay. So yeah, so basically it's a process, right?

Where do you see consensus going? Do you think consensus is going to be a thing in 20 years' time? So, as you're significantly aware, and people that you work with are quite aware, consensus has really been many companies. It's gone through many iterations since it was essentially birthed in New York City in 2014. So we started as a venture production studio. We thought we would build some MVPs and wrap companies around them and bring in venture investment to grow them and started getting calls from different companies and governments and central banks even to explain this Ethereum thing and evolved a consulting practice from there. And we'd seen synergies between the consulting practice and the venture production studio. and we built an academy and we started doing different capital markets activities.

So we've really evolved through several stages already. Consensus 2.0 is going to be a lot like Consensus 1.0. We'll still embrace experimentation, but there will be much more rigor in how we move spokes through the company and we're already starting to, we're seeing pretty great traction on the solutions, the consulting side of things and we'll see many solutions project use many of our components and components from the Ethereum ecosystem, things like Maker die and Aragon, as we're starting to see essentially convergence in the many things that we had consensus. are doing in the many things that people in the ecosystem are doing,

where we can all start to use each other stuff to build more complex solutions to bigger problems. So it's kind of streamlined and better version of what we're doing, less about doing something fun and cool and more about doing things that are genuinely valuable to people out in the world. 20 years from now, nobody has shot at making predictions about 20 years from now unless they're really macro

predictions. So if it's a macro prediction, then hopefully the world moves towards more decentralized protocols rather than centralized siloed systems. Politically, unfortunately, it doesn't seem like we're moving that direction right now, but hopefully clear heads will prevail. And protocol-based open platforms are incredibly valuable for enabling more people to access more value very inexpensively.

So if you set up a platform for the music industry, for instance, maybe it's called Ujo, rights management and enabling content creators to do, directly access their consumers with little intermediation or right-sized intermediation, then I think you have a context in that industry and many other industries where more people have greater agency and more ability to make a living. So hopefully, intermediation around the world gets right-sized in the banking industry, in the insurance industry, in the ride-sharing industry, et cetera. intermediaries are great, but they often extract too much value from transaction flows.

And these kinds of systems, I believe, will enable us to have very thin intermediation layers. So you have said many times before that you think blockchain is going to make the world better. And you just said that this intermediation is going to be a good thing. think if you had to specify a metric which to use, by which to showcase that the word with blockchain is actually better than a word without blockchain, would it be the disintermediation or would it be something else? Probably moving towards decentralization, disintermediation is part of that. So decentralization can imply that I'm in control of my identity, that I'm in control of my personal information, that I'm not being treated as a product, that I'm not being exploited, that people aren't keeping information from me that might be valuable for me to make my own best decisions.

I think smarter people than I will have to put metrics to all of that. But certainly those two elements, disintermediation and decentralization go hand in hand, I believe. I think there will be divisions within the science of crypto economics that explore those things. In the current state of the ecosystem, there are, like, there's an entire spectrum of of technologies and I guess more accurately implementations of those technologies. So on one end of the spectrum, we have something like Ethereum, which is actually quite decentralized. I would put the polka dots, the cosmos, Bitcoin, et cetera, in the same category. And on the other side of that, well, we have permissioned networks, so consortium networks that are implemented by banks,

insurance companies, you know, companies in the supply chain space, et cetera, and others, which we don't really know about, but some of them we do because most of them are sort of kept behind closed doors and serve a specific purpose. And then there's perhaps some solutions in between. Moving forward and sort of in the next year, two years and then perhaps even further to 10, 20 years, what do you see the ecosystem looking like? Do you think that things will go either one way or another, or do you see more of a multitude of solutions working together?

What's your take on that? Sure. So for a lot of people, blockchain technology, decentralizing technology has become a religion, has become tribal. And my perspective is, I think, more pragmatic. We are running a company, a set of companies that are trying to figure out valuable solutions, either for consumers or for corporate entities or other kinds of organizations. And essentially, I believe one should use technology that is appropriate for the use case. So in a context where you have a consortium, it might make sense to build a private permission blockchain solution

so that they can all trust one another more. One advantage of that is that once they see the value of decentralizing technology, they might move further and further down that pathway as it gets more proven and common. The decentralized protocols are not sufficiently scalable at this point. They don't have sufficient privacy and confidentiality at this point, or that those activities or technologies are nascent. And so I can absolutely imagine an Ethereum or a similar platform being public and

permissionless at its base while different systems built on top of it are private and permissioned. So just like companies moved from their own internal data centers to the cloud as they got more and more comfortable with that technology, I think we're going to see the same thing because I think we can build better, fairer systems on decentralized technologies with decentralized compute and storage and bandwidth. I think the cloud is a really great analogy. And I think similarly, we might look at something like all the companies that were running

corporate intranets in the 90s and how progressively they moved on to, so the internet and now using cloud services and Salesforce or whatever. So if you look at those, if you look at those examples of the past, right, on like how companies went from experimenting with new technology and then moving to something that was more robust, more cost efficient, sort of better off for everyone, what are the steps that one can take in the blockchain space to say get a company like a bank or consortium in banks to start moving towards that more decentralized model? Well, build something for or with them that they appreciate. So a consortium or a supply chain

can be somewhat closed for a while. But when you're putting real financial assets on blockchains, you simply can't have those financial assets on private permission blockchain. They're not going to be able to serve the world very well. They may serve a very limited context. So when you're putting cryptocurrencies or other kinds of crypto assets like bonds and equities and derivatives on a blockchain system, that has to be a radically decentralized system. Otherwise, you're going to have collusion or censorship or government. control, essentially,

it is improper government control. It is necessary to build financial infrastructure on that radically decentralized platform. So if you're, say, trying to build a commodities

trade finance network, as we're actually doing in the form of Congo, you start by building a handful of use cases. So KY, document exchange, you might put letters of credit on that next. At some point, you're probably going to want to interact with a network that has,

quote, real money. And magic internet money is rapidly becoming real money. So you may want to enable payments in Bitcoin or Ether. You may want to enable payments in many of the price stable currencies that I think there are about 10 of them, 10 projects or so on Ethereum right now with price stable currencies. The maker die is one of the strongest at this point. And so either building bridges between one of those networks so that they can interact with a public blockchain or migrating one of those networks to public Ethereum is one

possible path forward. And one of the beauties of Ethereum, unlike any other platform, is that there is the public network that is seeing so much activity built on it. But there are also many private permissioned implementations in different situations. And those things are really quite trivial to migrate to the public blockchain when it is sufficiently scalable and when business interests are comfortable with that. So there are use cases all over this very broad spectrum of decentralization. Do you think there's a chance that the entire technology, so blockchain as a technology, will just vanish?

That will go away. And in 20 years time, no one will know what this thing was. Well, I think people will remember at minimum. But so I think people... are interested in having better systems, better economic and social political systems by which we conduct our lives. If a general AI was developed, perhaps, and we could do proofs that would constrain that general AI's behavior to only act in the best interests of human beings, it might be omniping. in a sense are omniscient and craft great lives of challenge and wonder for all of us. And maybe that wouldn't be such a bad situation.

And maybe we wouldn't need blockchain. But until that sort of thing happens, if it ever happens, which probably won't. We need to be able to interact with one another in fair contexts on flat playing fields. we need to be able to transact with one another in ways that can't be cheated, even if we don't know one another, even if we're competing with one another. And these decentralized protocols are currently the best implementation of that. So it may not be a blockchain system. I feel like it's probably going to have very significant elements of blockchain and that you'll have minimally sufficient decentralization for different transactions and we'll have to get quite scientific about

what that means. But I don't know any other way to ensure that people will be fair with one another other than by having other entities verify the fairness of their interactions. So blockchain or blockchain-like systems are here to say, you think. But what would you see as a failure of Ethereum? So in 10 years' time, what kind of set of events would make you say, oh gosh, that really shouldn't have happened that way? A failure of Ethereum would be if it squanders what I consider to be an order of magnitude or two orders of magnitude lead in terms of technology development

and ecosystem development. We're still attracting many of the best and the brightest, and there are other great projects out there that are attracting great people and exploring the solution space, building up the technology. It really does look like a lot of the next generation platforms are converging on similar solutions, like Ewasim and beacon chains, etc.

And it seems very likely that Ethereum is going to get there first or very close to first. And in the meantime, there's just so much being built on Ethereum at the base layer and at layer two with different kinds of technologies. How does Ethereum fail from there? I guess by giving up. The momentum is pretty strong. So I start to see Ethereum becoming inconsequential 10 years from now. The technology will evolve quite rapidly. I believe there will be something called Ethereum 10, 20 years from now.

It won't look a lot like version 1.0 of Ethereum. And I'm sure there will be many other decentralized protocol platforms, including ones that do things similar to what Ethereum does. But Ethereum is unlikely to go away anytime soon. So we've talked about this before, but the bear market is really putting a huge toll on the ecosystem as a whole. What advice would you give to companies that are kind of in life support mode? And what do you think, like if this current situation lasts a long time, you know, what do you think people will accomplish in this time of adversity? Well, I think we turn the corner. I'm aware of so many things that are going to be happening, that are news that's going to be released in 2019,

that I'm extremely optimistic about this year. I think it's going to be another massive growth year for our ecosystem. system. That said, it's a really good idea to think lean. At consensus, one of the things that we want to return to is to having more constrained budgets so that we have to think through things more and build better solutions with less. And what's your wish for 2019? What do you? What do what would you most love to see happen in this ecosystem? I think an epic result for 2019 would be a fully decentralized thing consisting of a decentralized autonomous organization that supports some sort of useful application like an exchange,

something that is profoundly decentralized in virtually all of its aspects. that would be a really great thing to have. Yeah, a true Dow that works and doesn't crash and fail miserably. Yeah, that would be an epic demonstration. Awesome. Well, Joe, thanks so much for coming on the show today. It's a great pleasure to talk to you and looking forward to having you on again in the future. And best of luck for 2019.

Great. Thank you both. All the best. Thank you for joining us on this week's episode. We release new episodes every week. You can find and subscribe to the show on iTunes, Spotify, YouTube, SoundCloud, or wherever you listen to podcasts. And if you have a Google Home or Alexa device, you can tell it to listen to the latest episode

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