Lex Fridman Podcast - #188 – Vitalik Buterin: Ethereum 2.0

Starting point is 00:00:00 The following is a conversational Vitalik buterin, his second time on the podcast. Vitalik is the co-founder of Ethereum and one of the most influential people in cryptocurrency and technology broadly defined. Quick mention of our sponsors, athletic greens, magic spoon, indeed, forsegmatic, and better help. Check them out in the description to support this podcast. As a side note, let me say that Ethereum, Bitcoin, and many other cryptocurrencies have been taking a wild ride of prices going up

Starting point is 00:00:32 and down in the past few months. To me, the prices were never as important as the ideas, both technical and philosophical. Cryptocurrency has the potential to empower billions of people to participate in the global economy in a way that resists the manipulation by centralized power. Also, with smart contracts, layer 2 technologies, data pools, NFTs, and, of course, integration of artificial intelligence into the whole thing, we have the opportunity to build tools and worlds that transform physical and digital life as we know it. Hopefully, minimizing the suffering in the world and maximizing the fun. And now is the part of the program where I read the ads.

Starting point is 00:01:15 You can skip them. If you must, I even give you time stamps to make it super easy, but please still check out the sponsors. We're very picky about which sponsors we take on. So hopefully if you buy their stuff and you definitely should, you'll find value in it just as I have. It really is the best way to support this podcast. This show is sponsored by Athletic Greens, the all-in-one daily drink to support better health and peak performance. It replaced the multivitamin for me and went far beyond that with 75 vitamins and minerals. The first thing I drink every day to break my fast whether I'm eating twice a day or a one meal a day

Starting point is 00:01:53 when I was doing the 72 hour fast, I didn't do a flight of greens, but that was because I was going super strict. It definitely gives you a great base of nutrition where you can mess up and everything else, but you always have that little bit of health that you can count on. I usually like to mix it with really cold water. Shake it up really well in their offender greens container.

Starting point is 00:02:15 I think I easily fall in love with things that both taste good and create a kind of ritual, a daily ritual. It creates a structure for the day where you can inject the chaos through exploration, but you always can count on the basic structure of ritual to be there. They give you fish oil when you sign up at aflata greens.com slash legs, that's the other supplement I take as fish oil. Anyway aflata greens.com slash legs, go get them. This episode is also sponsored by Magic Splint, low carb keto friendly cereal. It has zero grams of sugar, 13 to 14 grams of protein, only 4 net grams of carbs and 140 calories in each serving.

Starting point is 00:02:57 They keep releasing new flavors, I think it's birthday cake this time, but friends, my favorite flavor is still, the flavor of champions is Coco. Also, they now ship to Canada, which is great for Canadian friends. Some of my friends keep sending me pictures of cereal boxes that they bought and supporting me. This is how you show love, but buying cereal. I think there's a lot of ways to show love, but one of them is buying a keto friendly cereal. I honestly do think that cereal represents joy for a huge number of people because it's the thing they ate in childhood, but they kind of ran away from it because it's like really I'm healthy for you because it has so much sugar. And like

Starting point is 00:03:41 magic spoon allows you to bring back the joy and still stay healthy because it has zero grams of sugar. There you go. It's a low carb way of showing love. These ad reads are getting more and more ridiculous every time. Anyway, magic spoon has a 100% happiness guarantee. So if you don't like it, they refund it. Go to magicspoon.com slash Lex, link and use CodeLex.

Starting point is 00:04:06 Check out, to say, 5 bucks off your order, that's MagicSpoon.com slash Lex, and use CodeLex. Okay, this episode is also brought to you by Indeed, a hiring website. I've used the most part of many hiring efforts I've done for the teams I've led. They have tools like Indeed Instant Match match giving you quality candidates whose resumes I indeed fit your job description immediately Basically, they really speed up that whole early candidate selection process. It's nice And if you listen to this podcast, you may have heard me mention that I'm currently hiring for a bunch of positions related to the podcast actually So not related to any startup work, but

Starting point is 00:04:44 more for video editing, camera operator, even virtual assistant, robotics engineer. If you're interested in that, I'm going to be closing those jobpostings soon, but you can apply on the website, and I'll probably use indeed to help me out on that as well. Anyway, right now you can get a free $75 sponsored job credit to upgrade your job post at indeed.com slash Lex, get it at dean.com slash Lex terms and conditions apply offer valid through June 30th. Indeed.com slash Lex. My voice can be so frustratingly monotone sometimes. What are you going to do? At some point you have to accept who you are.

Starting point is 00:05:26 sometimes. What are you going to do? At some point you have to accept who you are. This show is also sponsored by ForSigmatic, the maker of delicious mushroom coffee and plant-based protein. The coffee doesn't taste like mushroom, which is the first question I would ask. Speaking of mushrooms, there is no psychedelics mushrooms in this coffee for better or worse, but I am having a bunch of conversations about psychedelics, including psilocybin coming up. So look forward to that. I should probably talk to a coffee expert. That'll be really interesting conversation. Just the amount of coffee that's consumed every day.

Starting point is 00:05:58 Just think about it. What do a lot of people do every single day? Let's see, have sex, a lot of people do every single day. Let's see, have sex, drink coffee, go to the bathroom, sleep, but to find anything is coffee is one of them, drink water. So water and coffee. I feel like it would be fascinating to explore coffee

Starting point is 00:06:19 from both the chemistry, maybe even the distribution, the supply chain, the taste. This world is full of beautiful knowledge to discover. Get up to 40% off and free shipping and mushroom coffee bundles if you go to 4sigmatic.com slash Lex. That's 4sigmatic.com slash Lex F-O-U-R, Sigmatic.com slash Lex. This episode is also sponsored by BetterHelp spelled H-E-L-P-E-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H-H- you can explore ideas in your mind and if you dig deep enough, you can deal with some of the trauma that keeps you trapped in the past.

Starting point is 00:07:08 And if you can let go of that, you can be free, free to live in the future, to define your future, to pave whatever the hell path you want. My path seems to be increasingly likely to still run through Mr. David Goggins, even though I got injured a couple of months ago. So we decided not to do the 48 hour challenge together, decided to delay it. Probably to the summer, we'll do something crazy together. So that's going to be a kind of therapy where I get to meet my demons, get to meet his demons and make friends. Anyway, better help is easy, private, affordable, available worldwide. Check them out at betterhelp.com slash Lex.

Starting point is 00:07:51 That's betterhelp.com slash Lex. This is the Lex Friedman Podcast, and here is my conversation with Vitalik Butorin. Let's first talk about Shiba Inu, if you can. Also known as Shibotoken, Code Shib, for context Shiba Inu was created in August 2020, modeled off of Doshcoin by the anonymous founder known as Ryoishi. A May 10th this year, it had a market capitalization of over 13 billion. And maybe you can explain this, but in a crazy move, you were given half of Shib's total supply. You burned a K.A. destroyed 90% of it. That's worth $1.7 billion and you donated 10% that's worth 1.2 billion at the time to India COVID-19 relief fund saying you don't want to be the locust of this much power. This is fascinating. Why and how were you able to walk away from this much money and this much power? So I should probably start by yeah giving some of the backstory around you know these coins and this concept of giving me coins

Starting point is 00:09:34 So you know first of all you know she but you knew as you said is this like kind of knockoff of Dogecoin, right and Dogecoin was this initial kind of fun coin that was created back, I think, around 2014 or so. And it was just created by Jackson Palmer and I put it out as a joke for a couple of hours and a community formed around it. And at the beginning, people didn't take it very seriously. I actually remember putting about $25,000 into Doge sometime around 2016, and I just remember to doge sometime around 2016. And I just remember thinking to myself, like, okay, how am I going to explain to my mom that I just invested $25,000 into dog coins?

Starting point is 00:10:12 Like what even are dog coins? Like the only interesting thing about this coin is that there's a logo of a dog somewhere. But of course that ended up being one of the best investments I've ever made. And it did really well. And then at the end of 2000 and 20 Elon Musk, of course, I started talking about Dogecoin and the market cap just they shot up to about 50 billion dollars. Actually, it shot up multiple times, right? Like the first

Starting point is 00:10:37 time it went up from about 0.8 cents to about like seven cents. And this just happened all in one day. And I remember this was when I was still in Singapore in the middle of COVID. And I saw that the price just went up by 1,000%. And I was like, oh my God, my dough is worth a lot. And so I immediately called up some of my friends and told them to like, drop everything in scramble. And I sold half the doge and I got $4.3 million

Starting point is 00:11:08 donated the proceeds to give directly. And a few hours after I did this, the price dropped back down from about $0.7 to $0.4. So I managed to sell the doge at the top and I remember just feeling like I was such an amazing trader. But then of course,

Starting point is 00:11:23 the price went up for $0.4, then to $0 then 50 and just, like, doge becoming this big phenomenon where there's even a lot of people that have heard of Doge that have not heard of Ethereum is just like something even I wasn't projecting, right? And so after that, of course, you know, we have Doge and then people are thinking,

Starting point is 00:11:40 well, you know, if the leading dog token is worth 50 billion dollars, then surely the second largest dog token deserves at least $7 or $8 billion. I feel like that's kind of what the mindset of these Shiba people is. So then, of course, they did this other gimmick, right? Where they gave me half the Shiba token supply.

Starting point is 00:12:00 They were actually not the first projects to do this. So around the end of 2020, there was this weird project called Teller, like TELLR. I think they're a chain link competitor or something like this, but I remember they just dumped $50,000 worth of their token into my wallet. And then they had their Twitter RBI just like basically run around saying, look, look at Fatalix wallet. Fatalix holds tellers. He's one of us. He's a supporter.

Starting point is 00:12:25 And as soon as I discovered this, I just like publicly sold the teller tokens on you to swap. And this created a bit of a Twitter splat. Now, the Shiba people were more clever. The Shiba people, instead of dumping to that wallet, they dumped to my cold wallet. So in cryptocurrency, right, there's this concept of like cold wallets and hot wallets basically like the thing that actually owns

Starting point is 00:12:47 Your money is like this 80 digit number called a private key, right? And a hot wallet is why not private key is just stored in memory on your on your computer on your phone Really easy to access Cold wallet means that's either on Written down on a piece of paper or it's on a computer that's just never access the internet, right? So cold is very inconvenient, but cold is also much more secure, right? Because even if that computer has some viruses on it, it's like air-gapped, it's not actually going to be able to upload it. So this cold wallet and like all the money is out of the cold wallet, so it's safe for me to talk about my setup now, right? But it was a laptop that was sitting in Canada,

Starting point is 00:13:27 and I also had two pieces of paper where I wrote down two numbers on those two pieces of paper. One was with me, one was in Canada, and if you add those two numbers together, you get the private key. So because of COVID travel restrictions, and this is a cold wallets in Canada, it's very difficult for me to

Starting point is 00:13:46 actually access it, right? And I'm not sure if they knew this. Maybe they just got lucky. But basically they, you know, sent a lot of these dog tokens into this wallet where I, it was very difficult for me to access it. But then I saw these dog coak tokens. I saw more and more people talking about them. And then at some point, I realized that, hey, these things are worth billions of dollars. And there's lots of really good things that you could do with that amount of money. And it would actually be a waste to just see a go.

Starting point is 00:14:15 So I made the decision that I would actually power through and figure out how to, like, safely, like, basically get my private key. I actually had to call up my family, tell them to read out their number off of their piece of paper. I entered that into a fresh laptop that I bought from Target, then I put in my other number on my piece of paper, added the two numbers together on the computer, there's the key. And at the same time, like just scrambled for two days,

Starting point is 00:14:44 setting up a new wallet for to where I can move my eth too safely, getting people to be multi-sake partners, just like doing all sorts of like stuff that, you know, 10 years ago you would expect to just be part of a cyberpunk, you know, science fiction novel, but, you know, now it's all real. So you're doing this all by yourself, essentially, most of it by myself. So I need to keep it secret. Right. And I needed my family to actually go and read the number

Starting point is 00:15:10 on their piece of paper. And then I am in my new multi-sig wallet. Like there's other people that are signatories. But I'm obviously not going to reveal any details beyond that. So I did this, right? And I actually managed to get the private key, make the first transaction that would just move all my ether

Starting point is 00:15:30 to the multi-sig wallet so it's safe. And then second transaction, I put the private key on my main computer, then started, like going in and just selling some of the dog tokens and then just giving them to these different charities. Now, at the time, I actually did not even have any idea of how much you would be able to get, right? Because on paper, the dog tokens are $7 billion,

Starting point is 00:15:53 but in reality, it's a very liquid market. Are you gonna crash it by, yeah, after you sell one million worth, are you gonna crash it after 10 million? Or might you actually be able to get an entire 200 million, I had no idea. So I definitely was just over the mindset, like, okay, I'll sell a bit, maybe I get some eth

Starting point is 00:16:15 and then donated some eth to give well, donated some to other groups. And then, okay, have some dog tokens, like I don't have an easy ability to sell more myself, but then I'll just give them to these groups and hopefully they'll do good things with them. It was actually, I actually donated at 20% and dumped 80%.

Starting point is 00:16:33 Yeah, so the COVID-19 INTIA group got one badge and then there's another group that got another badge. I don't wanna say who they are because I think they wanna announce themselves at some point. But you can see the fact that these transactions were made on the blockchain. But it was just very interesting and unexpected and just an insanely crazy situation. It's been a couple of weeks. First of all, thank you for helping me hang up some curtains.

Starting point is 00:17:06 This is a first for the podcast and it shows that you're a truly a special person to be willing to help. But now a couple of weeks later, do you regret any aspect of that decision? I'm sure there are some things that I probably could have done better. I was actually talking to some of these charities and I was impressed by just how much money they managed to get out of selling some of these coins. So I probably could have done better by just like talking more with the traders and actually ensuring that they can do a better job of maximizing the value of all of them, but like, you know, it was this very stressful time and I did have to act quickly like I did manage to,

Starting point is 00:17:55 you know, make a lot of the donations before a few days before the Great Crypto Crash happened. So it was, and it's difficult to like obviously there's parallel universes in which I did better, but at the same time, there's also lots of parallel universes where because I hesitated more and tried to spend more time thinking I miss the opportunity. So, you know, on that, it's like a lot of the draw and I'm just, you know, happy that it was everything was able to turn out as well as it did.

Starting point is 00:18:26 But psychologically, you mentioned stress. How hard was it? It was stressful, right? I think one of the really stressful parts was just the fact that I had to basically move all of my funds, including the 325,000 ether from one cold wallet into another hot wallet, or sorry, into another hot wallet or sorry into another multi-sig wallet. And you know, maybe the multi-sig wallet had a bug in it. Maybe there's like some mistake I'll make in the middle that causes the funds to get lost. Like, you know,

Starting point is 00:18:55 that part was stressful and I was definitely stressing out for two days. I mean, a triple checking the new wallet I even did a bit of an audit of the code myself. I wrote my own JavaScript to adapt to make confirmations because Gnosis safe didn't work with the status wallet wallet. So there was definitely that whole thing was definitely a bit of a marathon. I was also kind of definitely a bit worried about or uncertain, I guess, how the public and, you know, including the coin community is what perceive the whole thing. But I was actually impressed. Like I, yeah, for every poster that was saying like, no, you know, why, yeah, why did Vitalik

Starting point is 00:19:39 like a rug pull on ice he was simple, his wallet was supposed to be a burn address. I mean, there's like 10 people that are like, oh, I thought I was just in this because it's a fun pyramid gambling thing, but instead I ended up being part of this great public good thing for humanity and that's even more amazing. So the amount of that that I got was very impressive. So all in all, I think the dog people did great that the dog people. Is there something you can extend to the bigger picture of it

Starting point is 00:20:11 in the principles you apply to making this decision? Is there some principles, philosophies that you apply also to the decisions you make around Ethereum? I think a big one for me is just this idea that crypto isn't just an opportunity to give people slightly better ways to save value in all of these things. It's also an opportunity to basically create these new digital institutions that could serve the public good in new ways and and That's something that I've been interested in for a long time

Starting point is 00:20:51 I might actually even have this article in Bitcoin magazine back in 2014 where I basically Suggested this idea that you know you would have coins that represent causes and like people would just like buy and accept Those coins because they support those causes. So I think it's called markets institutions and currencies and new form of social unsanivization or something like that. And I'm sure you can find it in the road and the links. So that was interesting to kind of see becoming real. And like in general, I think, you know, public goods are very important. And on the internet, public goods are even more important. Like every single like Friedman podcast is just on YouTube. And you know, anyone can go and see it.

Starting point is 00:21:31 Like there's no way for you to like, you know, sell it. And so that some people can see it, but then other people can't see it. Like, you know, you could do that, but then you know, you know, basically be reducing your impact. So thank you for making the, the amazing Lexi

Starting point is 00:21:45 Bencott podcast still freely available. Well, that's actually a tense thing is how do you do it? In a way that's not controlled in a centralized fashion because actually YouTube feels free and open, but it nevertheless is one company making centralized decisions. And the first time I realized YouTube was not forever is when a lot of the Joe Rogan experienced library was pulled from YouTube as part of the Spotify deal.

Starting point is 00:22:12 It made me realize we need to, it's like the realization that Fiat money is centralized. It's realizing that, you know, this is not forever, and you might want to come up with schemes to distribute it to decentralize the control of it in a way that audio for podcasts that's just an RSS feed. Exactly. I think one of the kind of philosophical things

Starting point is 00:22:37 that I hope you achieve is kind of decouple the concept of public goods, which are incredibly important and are the lifeblood of modern civilization, from the idea that there is or can be one central organization that represents the public, and perfectly understands and can impose their idea of what is the good. When people talk about public goods, it just often comes with this baggage of either centralization or conformism. I think it doesn't have to.

Starting point is 00:23:09 Often, the most important public goods are the ones that are created by the crazy individual that disagree with everyone else. Trying to make this synthesis where you combine the values of decentralization and the values of open source, but you're not naive about it and you realize that for these things to be produced, there needs to be a way for it to be sustainable, there needs to be some way of supporting people who are working these projects, but at the same time you want to avoid that turning into time you want to avoid that turning into a vector of centralization, like trying to sort of get all of the good things without the bad things. To me, that's a big part of sort of what my grand experiment in crypto is about. And like we are doing things in

Starting point is 00:24:00 different kinds of things for this, right? Like there's the Github Grant quadratic funding in the Ethereum ecosystem. There's obviously these dog coins that just happens, I guess, accidentally. There's other projects that, like for example, you know, Uniswap has their Uniswap Dow that just has a huge amount of funding. And like we haven't seen yet how that's going to be deployed, but it could be potentially

Starting point is 00:24:27 deployed to do a lot of really good and amazing things. Do you see Ethereum as essentially a mechanism to fight for. Definitely some specific things that are social causes. Like just the fact of creating an open financial system that anyone can participate in, no matter where they are in the world. That's a social cause, just giving people the ability to organize and create projects even if it's five people in five different countries. I think that kind of inclusiveness, I think, that's a social cause and it's a core crypto value.

Starting point is 00:25:18 But then at the same time, the other important and part of the magic of Ethereum that you have to balance that against is that it is also this open platform where ultimately the things that are on Ethereum is just the things that the community makes of it. Well, you kind of briefly open the doors, so let's go there. When it comes to government regulation of crypto, what's the best case scenario? What's the worst case scenario? In terms of, as you've kind of mentioned, Ethereum challenges the power centers of the world. How do you see the interplay between governments and this new technology that resist centralized power? between governments and this new technology that resists centralized power. The best case and worst case.

Starting point is 00:26:08 The best case is that blockchain is continued to prosper and we figure out scalability is so that people can actually start doing things on block. All of the amazing use cases that people have been talking about instead of today where a lot of the great stuff gets priced out because transaction fees are at $5 to $10. Then we see a lot of different amazing applications happening on blockchains. It could be like, Dow is creating new ways for people to interact and organize with each other, new ways for artists to get funded organize with each other, new ways for artists to get funded.

Starting point is 00:26:46 And all sorts of these amazing things. And there's just enough public support and just enough people that see that, you know, what crypto is cruelly doing a lot of good things. And you know, there are definitely areas where there's tensions. But in there is areas where there's tensions, but in areas where there's tensions, there could be some kind of creative and interesting approaches that get figured out. The concept of corporate taxes, for example, that would disappear as a revenue stream if theoretically corporations just all get replaced by Dallas, but maybe there's

Starting point is 00:27:25 some other creative way by which Dallas themselves can be have some kind of encoded governance that ensures that they have at least some kind of bias towards serving the global public good. And maybe it does enough of the, Dows can do enough of that that people are happy with it. And there are going to be things that people are unhappy about. There's always going to be the people that wants

Starting point is 00:27:54 to surveil everyone. But if on the kind of effect of crypto from just empowering people is greater than that and greater than that in a way that people can just easily see. Then that would be a good scenario. And we'll just become kind of incorporating and accept it the same way as happened with the internet. But the worst case scenario would of course be just like people suddenly flipping and going into moral panic mode and just, oh my God, like this technology is used

Starting point is 00:28:28 by like insert bad group of the day. And then I don't think governments have the ability to ban crypto to the extent of just completely preventing blockchains from existing, but they definitely have the ability to really marginalize it, right? Like if you just ban all exchanges, like in ban all links from

Starting point is 00:28:45 the fiat's ecosystem to crypto, and you know, you ban all kind of mainstream employers from accepting or paying in cryptocurrency, then like you can successfully turn it into a, yeah, a fairly kind of niche countercultural thing that has much less impact than other ricewood. So it's somewhere between the good scenario and the bad scenario. I'm obviously hoping for the good. Well, that's interesting also the tension between governments and companies. Like if you have a bunch of billionaires or a bunch of companies like Tesla investing

Starting point is 00:29:20 in Bitcoin and then governments resisting that, it's interesting who wins out in that worst-case scenario. And almost when companies and rich, quote unquote, respectable people embrace cryptocurrencies, Bitcoin, Ethereum, so on, even the dog coins, it almost sends a signal to everybody else that this It's almost sends a signal to everybody else that this is a revolution is here to stay. On this one little tangent that you brought up, this is almost an outdated idea, but it's still with us, which is cryptocurrencies are used for illegal activity, for drugs, for crime, and so on. Is there some sense that worries you that if cryptocurrency Ethereum runs the world, then crime making money from crime will be easier. There's always that possibility, but at the same time, I think if you look at the world as a whole,

Starting point is 00:30:22 and the way all the other technological trends are going, in-person surveillance is just going up every year. If you commit a crime in meat space, it's getting harder and harder to get away with it. This is something that's just happening as a result of just better technology and information transparency. A lot of it's hard to prevent even if you really tried. The world where things go dark to such an ex, as the police hawks sometimes like to say, to such an extent that, oh my god, the criminals are committing crimes with impunity and we can't see anything like that just seems unlikely.

Starting point is 00:31:09 But you know, on the other hand, like the world where there just is no privacy, for example, or the world where they're just like is no ability to kind of act outside of the confines of mainstream institutions. That's something that's more realistic and that seems like something that could lead to a lot of scary things. Even from a government's point of view, right? I think a government's over the last few years a lot of them they're very worried about sovereignty you know they're worried about like if their country is economy is a you know social environments they're just completely dependent on basically foreign tech companies controlled by foreign governments like you know

Starting point is 00:31:58 governments are not on team government right that's like you know the Indian government is on you know team India the Russian government is on team Russia and so forth's like, you know, the Indian government is on, you know, team India, the Russian government is on team Russia, and so forth, right? So, you know, they don't want you as to be able to like have this big backdoor into everything. So, I mean, I do think that a balance is needed, but at the same time, I do think, I guess, definitely worry more about the possibility that just without things to like crypto, kind of acting outside of institutions becomes too imposterous. And I don't even necessarily mean outside of governments, even outside of corporations, becomes too impossible. And there's just terrible things that come as a result

Starting point is 00:32:47 And if things going in the other direction like it obviously is a risk but No at the same time I think in the long term like a cryptokin Potential even like offer Defenses as much as attacks against that sort of thing. Yeah Many throughout history many of the most destructive things came from centralized institutions versus sort of from the people operating in the shadows and You know, I've been talking to a bunch of psychedelics folks that people doing research is like we're Dublin in Johns Hopkins

Starting point is 00:33:20 There's a lot of exciting research and psychedelics. And one thing you could say about operating at the edge of legality, it could actually accelerate the adoption of particular things, like whether it's marijuana or psychedelics, they can help people out. It's almost accelerates the policy. It forces the policy to catch up to where the people stand. So there's a positive way of doing things that are in the gray area of legality and creating a market that allows people to, to, uh, in a safe way, be able to participate in this gray area of legality. I mean, the other thing to keep in mind, of course, is that the, the set of like the kinds of things that just like payment processors as companies try to restrict people you from is much larger than the set of things that's illegal, right?

Starting point is 00:34:08 Like part of that is because they want to be super conservative and like the more layers you have the more they're like kids, kids are conservative because they're scared of what the what the layer below them will do to them. Sometimes they have their own, you know, moral opinions of various kinds, you know, they go after lots of people, like they make life really hard for, you know, like sex workers, for example, you know, moral opinions of various kinds, you know, they go after lots of people, right? Like they make life really hard for, you know, like sex workers, for example, you know, psychedelics, as you mentioned, there's a, like a lot of activity, even including stuff that is totally legal. That just, you know, there's this like, you know, shadow, like paypal credit card governments or whatever you want to call it. And, you know, that makes it just hearts of participate in this stuff. So I think like reducing the number of intermediaries is definitely Normally a good thing

Starting point is 00:34:53 All right, let's talk about one of the most exciting Technologies like technically philosophically like socially financially in every way, which is Ethereum 2.0. There's a million things to talk about, but at the step one is probably a good thing to do, which is, can you briefly summarize your vision how Ethereum 2.0 will make Ethereum more scalable, secure, and sustainable? Sure. So, I think recently we've actually been kind of deemphasizing the E2.0 branding, I guess. So the reason behind that was that originally we envisioned something more like a big

Starting point is 00:35:35 grand event where all the good things would happen at the same time. And it would be a new blockchain. And it would be a new protocol and people would have to take a lot of efforts to migrate over. But later, we've slowly changed the roadmap over to something that's much more incremental. So proof of stake happens kind of over time, and then charting it's added over time, and all these features get added over time. And so the experience for just a regular theorem user still feels very seamless, right? It's like maybe a little bit more complex than the hard forks

Starting point is 00:36:06 that we've already done from a user's point of view, but not by that much. So the big two things that are happening, these are what used to be considered the two flagship features of V2.0, and now they're just the flagship features of the next devolution of Ethereum, as proof of stake and sharding. So proof of stake is a consensus algorithm. It's a, or a consensus mechanism, I should say. It's the difference is that like an algorithm is something that you run by yourself, a mechanism is like, it involves interactions

Starting point is 00:36:44 between people and it could even include incentives and all of that. yourself, a mechanism, is like interactions between people, and it could even include incentives and all of that. So, you can sense this mechanism, so by which nodes in the network agree on, which blocks came in, which transactions came in and what order, make sure that once a block gets accepted, it can't get reverted, and all of these things that we expect from a blockchain.

Starting point is 00:37:05 So existing blockchains, including Bitcoin, including the Ethereum of today and including a lot of them, they use proof of work, right? So the reason why we need proof of anything is because they serve this function that I call an economic, a civil resistance. So that's obviously a big word for, especially if you've never heard of civil as before,

Starting point is 00:37:30 but the basic idea is that you have a network and you have lots of computers that agree on which block to accept. And sometimes you get two blocks that get published at the same time and you just have to agree on an order. So there has to be some kind of voting game. But then the question is, well, in this voting game, who gets a vote, who gets a participant? Now, you can't

Starting point is 00:37:50 say one person one vote, right? The reason why you cannot say one person one vote is because you need some kind of authority or some kind of mechanism to say, you know, who the humans are. And if you don't have that, then a bad guy could just come in with a virtual machine or with a virtual machine or with a computer that has on it 10 billion virtual machines that have 10 billion virtual nodes. And then just like say, look, I'm 99% of the network, I should control everything. So to prevent this, what proof of work and proof of stake both do is they basically say, well, the weight of your vote, like how much influence your votes have in

Starting point is 00:38:26 the consensus, is proportional to like what quantity of economic resources you bring in. So in the case of proof of work, you prove what economic resources you have because your economic resources are computers and you prove that you have them by just running them 24 seven using these hash algorithms, right? So this does solve the problem, right? Because in order to attack the network, you have to come in with more computers or a more money invested into computers and electricity than the rest of the network puts together.

Starting point is 00:38:55 And that's extremely expensive. In proof of stake, instead of relying on people with computers that are just constantly cranking out HASHES 24-7, you, as your unit of economic resources, you just use holdings of coins inside the system. All of these blockchains, they have some kind of coin in them. Bitcoin has Bitcoin, Ethereum has Ether, they all have a coin. Why not just use that as the economic resource that you're using to measure participation.

Starting point is 00:39:25 That's the core distinction between proof of work and proof of stake. I like proof of stake and I've liked proof of stake for many years, basically because it just requires much less ongoing resource consumption. With proof of work, you have to actually go and buy these physical computers. And these days, you know, you have specialized hardware, ASICs, applications, specific integrated circuits. You have to go produce them, you have to go buy them. And unless you have millions of dollars, you know, you have to buy them from one of these other people who creates them. And those other people often end up taking a huge cut of the profits themselves. And then you have to plug a man, you have to just burn all of this electricity.

Starting point is 00:40:09 That's just running 24, 7. So it consumes a huge amount of energy. And it can't, not just energy, it also just to create the hardware. Like people focus a lot on energy, but actually about half the cost of proof of work mining is the cost of the hardware. So hardware is a very big deal too. And you need this really big and powerful, very specialized hardware, the kind that fills

Starting point is 00:40:33 up these big warehouses. So proof of stake, you don't really need that much electricity, you just need a little bit to run a regular computer. You can run proof of stake validators on computers that you already have. So it's just much less resource intensive. And this is good for a few reasons. One is the kind of environmental rationale that you're not breaking the environment. The second is that you're not taking away electricity and other resources from other people. Right?

Starting point is 00:41:06 No, there's, I think just today, I saw a story about Iran wanting to shut down some Bitcoin mining because it was just grabbing up so much electricity that it was outbidding the nearby towns and it didn't have enough. And then there was a like, chia, the one that's doing proof of hard disk mining basically is just like grabbing up so many hard disks, there's a shortage.

Starting point is 00:41:27 All right, so that's the second reason. And then the third more selfish reason is that because participating in consensus does not require so much energy expenditure, you don't need to pay people as much to participate. Right. So like Bitcoin and Ethereum, they both issue somewhere around 4% of the total supply every year right now It's a miners so Ethereum is about 4.7 million ether and the current supplies about 150 million But with proof of stake like we expect it will be somewhere between 500

Starting point is 00:41:57 1,000 and 1 million per year and so So that means you know the supply doesn't have to increase so quickly. So one of the pros that the people sort of argue for the proof of work is that it is secure because it's much more difficult to sort of, as you've highlighted is difficult to participate, is there, what are your thoughts

Starting point is 00:42:23 about the security of the proof of stake mechanism? Is there a way to make it secure? So I think proof of stake is very secure because in order to be able to attack the system, you need to have basically as much stake as the rest of the network. So that means right now, for example, we have 5 million eiths staking, so you have to come up with 5 million eith and then join the network. And then the other, so 5 million eith is a lot, right? It's like, how much is it now?

Starting point is 00:42:53 Like, 15 billion dollars. So that's actually more than, I believe, the cost of attacking the Bitcoin network. And then the second thing is that recovering from attacks is much easier in proof of stake than in proof of work, right? Because in proof of stake, you have, like, first of all, we have for many kinds of attacks that you do against this network, we have this concept of like automatic slashing, right? Which basically means that in order to, like,

Starting point is 00:43:17 revert a finalized block, so if there's one block that's like accepted by the network and you try to convince the network to, to kind of revert that block and accept a different block. In order to make that kind of attack, you basically have to have your validator, like a big portion of your validator, signed to conflicting messages. And this is something that like what's these messages are on the network or you can go and prove, like look, these people did it. And so we have this feature in the protocol called slashing where you basically take all

Starting point is 00:43:44 these people who provably misbehaved and you burn their coins. And you don't burn anyone else's coins. Now there are other cases like for example, if instead of reverting blocks the attack just tries to censor everyone, right, then what you do everyone who got censored would just like basically create the minority chain. And then the community would basically have to do a soft fork. They would just have to say, what could this chain is clearly attacking us? This chain is the one not attacking us.

Starting point is 00:44:10 And so we're gonna join this chain. And then what happens is that on that new chain, the attackers also lose a lot of coins. So the difference between proof of stake and proof of work is that in a proof of stake system, like you can identify specific participants. And you can say, this isn, like human going in and saying, I don't like you, I don't like you, I don't like you, this is like automated, right? You can go.

Starting point is 00:44:32 So the slashing process is automated. Yes. Is there ways it can go wrong? So that's a painful process where the coins are burned. It is painful, yes. I think, I mean, the one big unknown, of course, is painful, yes. I think the one big unknown, of course, is if an attack actually happens, and if an attack happens that requires the community to actually choose one of these minority forks, then what would the community actually successfully coordinating on this look like? We can talk about it and we can, you know, write to like science fiction novels about it, but like until it's happened, you don't really know the DCL, it's like, what it looks like and how difficult it is.

Starting point is 00:45:10 What are the channels of communication for the community if you can enlighten me a little bit? Like, where, you know, in many ways in the political realm, Twitter is often used as a way to kind of have these emerging phenomena of large groups of people coming to a consensus bought a particular idea. And then there's battle for consensus. What's in the Ethereum community? How do people what are the sources of natural language-based communication that have an emergent belief structure that you would say? Or is it all through money? Is it all through trading that the communication happens? There's definitely talking as well. I mean, like we have to agree on protocol changes somehow,

Starting point is 00:45:52 right? Like there's Twitter, there's Reddit, there's GitHub, there's all of the various Ethereum forums, Ethereum magicians, Ethereum research. There's just in-person communication, then there's just kind of like the hidden web of everyone talking to everyone on Telegram, or Signal. So it's like some of everything, right?

Starting point is 00:46:13 But I think the thing to emphasize around like can you actually come to consensus on, whether or not to fork the chain because the attacker is censoring someone, everyone just for example, is like, you, everyone who's running a node is going to see almost the same thing, right? fork the chain because the attacker is censoring someone. Everyone, just for example, is like, you, everyone who's running a node is going to see almost the same thing, right?

Starting point is 00:46:29 Like, they're gonna be off by a few seconds and like, maybe they'll be off by a few minutes, they'll disagree by a few minutes, but like, if it's a serious attack, you know, people are gonna know, right? It's not like one of those things where, you know, oh, we're trying to agree on like, I don't know, did Epstein kill himself or like some,

Starting point is 00:46:45 you know, read the political facts where like in reality, no one knows a single thing about what that was actually going on in the role speculating. Like it is much more visible, right? So we do have that, but you know, at the same time, I'm happy to admit that like, these are fairly untested mechanisms, but like at the same time, they're also untested mechanisms in proof of work, right? And like in proof of work, it's even harder because in proof of work, you don't have the ability to like identify and say, like, you know, I'm going to these miners attack and so we're not going to let these mine, um, these miners and these miners not attack. So we're going to keep them in. Like you have to pretty much, you know, either, um, take out none of the miners or you do a fork that changes the proof of work algorithm which takes out all of the miners.

Starting point is 00:47:28 The economics of recovering from attacks and proof of work, at least to me, actually do seem more unfavorable. But I'm sure the proof of work people you talk to will give a very different and contradictory opinions, and that's totally fine and amazing. Some people describe MEV minor extractable value as an existential risk to a theorem. What is M-E-V? How important is it to solve an M-E-V if it's important what ideas do you have? Sure. How about after this one, we'll also talk about

Starting point is 00:47:58 charting because it's amazing. Yes, it's part of your turn back to charting, which is no return to the big picture of the scaling problem as you mentioned. I love this conversation. You know, depth first search instead of breadth first. So basically, okay, EBV minor extractable value. It is not difference in proof of work and proof of stake, right? So like, if you want to call it, you know, block proposal extractable value, like it sounds less sexy, but you can call it BPev instead of now who cares. But the beast is a problem in both proof of work and proof of stake. Yes.

Starting point is 00:48:32 So the basic idea is that if you have the ability to choose which transactions go into a block and in what order, then you have the ability to take advantage of that position for economic gain in a lot more ways than just collecting transaction fees. For example, there's decentralized exchanges on chain like Uniswap. Let's say the price of ETH to versus USDC was 2700, the previous block, but then there was a bit of a market drop and now it's 2680, where you can go on Uniswap and you can just gobble up the entire part of the automated order book that's between 272680. And then at the same time, you'll run a bot, and you buy some

Starting point is 00:49:17 eFBAC at 2680, and you've just made about $10 of profit. right? So, or, well, 10 dollars times, you know, whatever the depth is, right? So, and so there's lots of little things like that. There's also things that involve, like, front-running other people's transactions. So one example of this would be that, if someone sends a transaction that says, like, I don't know, buy me five ETH for whatever price that you can get, then. But with a maximum of, let's say, $15,000, then you can go and you can send each put a transaction right in front of that transaction,

Starting point is 00:49:55 and you can buy up that ETH first, and then you resell it to Hamatt, $15,000 minus one. So then you get to make a little bit of money. Exactly. So there's a lot of these different like arbitrage front running, back running, these different tricks that allow block proposers to get some percentage on top, like overhead. Exactly. And the reason why this is a challenge is because it's, I mean, first of all, it's sometimes degrades user experience because users get less favorable trades. There are sometimes ways to mitigate that for application. Sometimes it's not that bad.

Starting point is 00:50:33 The bigger risk that I think some people consider more existential is that there's just much more economies of scale in figuring out how to extract all this revenue. If you're just collecting transaction fees, there aren't really economies of scale. There aren't really benefits to centralizing, right? Because it's a very simple formula. You just grab up the transactions that pay you the most. But with MEV, there's all these sophisticated algorithms. And if you have lots of money, then you

Starting point is 00:50:59 can hire really smart people to make amazing algorithms. And then you can use the other half of your money to get a lot of mining power or a lot of stake, and you get a lot of opportunities to use your even better algorithms. So there is this risk that, as a result of this, mining is basically, or even validating proof of stake is going to centralize.

Starting point is 00:51:20 So I think the ecosystem is best replied to this sort of risk, and it's the direction where Projects like flashbots are going already is If you can't eliminate the centralization then you try to firewall it right and the way that you fire wallet is You basically say we're going to try to deliberately create a marketplace where people can just do the complicated work of creating what are called bundles like the bundles of transactions that are very profitable. And then at the other side of the market, you just have like block proposes or miners that are just dumb nodes and they go and ask the what are called searchers, the bundle creators and they just ask like, hey, how much can you give

Starting point is 00:52:03 me a fire put in your bundle? And then they just take the highest offer. So you sort of separate out the task, and you have the easy part, and then you have the hard part, and you have this special class of actor called a searcher that does the hard part, and then the easy part, the people doing the easy part, which is just miners and validators, they kind of just talk to all the different people doing the searching, and they just accept the highest better. So, this is all just like interesting, an interesting example of like economic design philosophy,

Starting point is 00:52:34 right? Like sometimes you can't just like make centralization go away, sometimes it's inevitable, but no, at least you can try to kind of contain it, you can direct it, or you can even sort of firewall it away from core consensus, the parts that really do need to be decentralized. But you don't see it as an existential risk. It's just a bit of a problem that has to be constantly dealt with. It's a risk. There's obviously a risk that it's a very severe problem and that even this flash bots approach has some fatal flaw or whatever.

Starting point is 00:53:07 But I'm definitely, we're definitely approaching it with the mindset of, you know, this is a problem. And like, yes, we do have to do some work to solve it, but we're doing it. And so far, it's being solved. Okay, let's talk about the other really, really fascinating part of the future of Ethereum. Let's not call it Ethereum 2.0, but the future of Ethereum that also may require hard fork.

Starting point is 00:53:32 You can correct me on this. Well, broadly, ideas for scaling, and more specifically, sort of, layer two or layer one and two intersection ideas of how to achieve scaling. And at the core of that is the idea of sharding. So first, what is sharding? OK. So there's two major paradigms for scaling blockchains. As you said, layer one and layer two.

Starting point is 00:54:02 And layer one basically means make the blockchain itself like a capable of Processing more transactions by having you know some mechanism by which you can do that despite the fact that there's a limit to the capacity of each Participant in the blockchain and then layer two says while we're gonna keep the blockchain as is But we're gonna create clever protocols that sit on top of the blockchain that still use the blockchain and it's still kind of inherit things like the security guarantees of a blockchain. But at the same time, a lot of things are done off-chain, and so you get more scalability that way.

Starting point is 00:54:36 So in Ethereum, the most popular paradigm for Lier 2 is Roblops, and the most popular paradigm for Lier 1 is Sharding. So one way to achieve layer one scaling is to increase the block size. Yes. Hence the block size, wars, what I'm quote. And you actually tweeted something about people are saying that Vitalik changed his mind about the,

Starting point is 00:54:58 he went from being a small, one for being big to small. He's a big to small. And but you said I've been a medium blocker all along. So maybe you can also comment on where on the very basic aspect before we even get the sharding of what you stand on this block size debate. Sure. So the way that I think about the tradeoff is I think about it as a tradeoff between

Starting point is 00:55:21 making it easy to write to the blockchain and making it easy to read the blockchain. Right. So when I say read, I just mean, you know, have a node and actually verify it and make sure that it's correct and all of those things. And then by write, I mean, send transactions. So I think for decentralization, it's important for both of these tasks to be accessible. And I think that they're like about equally important, right? If you have a chain that's too expensive to read, then everyone will just trust a few people to read for them, and then those people can change the rules without anyone else's permission. But if on the other hand, it becomes really expensive

Starting point is 00:55:54 to write, then everyone will move on to, like basically second layer systems that are incredibly centralized. And like that takes away from, you know, decentralization and self-sufferancy as well. So this has been my viewpoints like pretty much the whole time right? That's that like you know you need this balance and going in one direction or the other direction is very unhealthy. In the Bitcoin case, basically what happens was that Bitcoin originally like at the very

Starting point is 00:56:19 beginning it didn't really have a block size. It just had an accidental block size of 32 meg- or block size limit of 32 megabytes because that just happens to be the limit of the pure-to-peer messages. But then- Interesting. I didn't even know that part. Yeah, but then Satoshi back in 2010 was worried that even 32 megabyte blocks would be too hard to process. So he put the limit down to one megabyte and I think the- By put, you mean, sneak in there. Yeah, just like made and updated to the Bitcoin software that made blocks bigger than what I've

Starting point is 00:56:51 figured a million bytes invalid. And I think the impression that most people had at the time is that this is just a temporary safety measure and over time, you know, as we become more confident in the software, that limit would be raised somewhat. But then when the actual usage of the blockchain started going up and then started going up, first to 100 kilobytes per block, then to 250 kilobytes per block, then to 500 kilobytes per block. You know, they're started kind of coming out of the woodworks, this opinion that like, no, that limit should just not be increased. And then there are all of these attempts at compromising, right?

Starting point is 00:57:37 First there's like a proposal for 20 megabyte blocks, then there was the 248 proposal, which is a bit ironic because the 248 proposal started off being a small block negotiating position. But then when the big block people came back and said, hey, aren't we going to do this? They're like, oh, no, no, no, no, we don't want the block size increases anymore. So there were these two different positions, the small blockers. I think they valued one megabyte blocks for two reasons. One is that they just like really, really believe

Starting point is 00:58:07 in the importance of being able to read the chain. But two is that a lot of them really believe in maintaining this norm of never heart forking, right? So the difference between a heart fork and a soft fork is basically that in a soft fork, blocks that were of any block that's valid under the new rules was still valid under the old rules. So if you have a client that verifies according to the old rules, then you'll still be able

Starting point is 00:58:33 to accept the chain that follows the new rules. Whereas with a hard fork, like you have to update your code in order to stay on the chain. And look, they have this belief that soft forks are kind of either less coercive than hard forks, which by the way I can completely disagree with. Actually, we think soft forks are more coercive because basically they force everyone who disagrees to sort of go along by default.

Starting point is 00:59:00 But, or they have this opinion that there's like, it's more difficult to abuse soft forks to do really mean things like, or that can put we violate people's expectations like increasing the supply, which is like, I think there is sumptuous to that. So because of these reasons, they just say, we're only going to do soft forks

Starting point is 00:59:22 and we don't, we want to just not do any hardworks. And they eventually discovered this idea called segregated witness that allows for a very tiny block size increased, like the equivalent of about two megabytes with a softwork. It's just really like, weird and devious trick. Like basically what they do is they take the signatures of transactions and then they put them outside

Starting point is 00:59:46 of the block. Then they add an extra rule that says that like every block to be valid, the block has to come with a separate, basically extension block that contains all of the transaction signatures. When you measure it according to the old rules, like, no, hey, it adds up to less than a million, but actually there is this extension block that the old protocol doesn't even know about. So it's a hack that seemed to work to it to in a small way extend the box. But so, you know, small block side was like happy with these very low levels of block size. And then the big block side wanted to expand, you know, at the very least go to four

Starting point is 01:00:20 bag of bytes, then, you know, maybe go maybe eight, eight, 20, there's disagreements within there as well. I definitely was favoring the big side the whole way through as you can probably tell. Even though so the argument against the big is that it makes things more centralized. Yes, because fewer people can run and know the very eyes of the chin and also because any of these things would require a hard fork and You know hard forks are inherently risky. Do you think there's truth to that? I'm pro hard fork. I think hard forks are actually like in a yeah, you know Politically, can I make sense they're better than soft forks?

Starting point is 01:00:58 Well, let's okay. Okay. I think that's a beautiful Principle as stated that soft forks may be more coercive than hard forks. This is not just the bulk of cryptocurrency. This is about politics and life. It's fascinating. So you're okay with hard forks. In fact, you think hard forks is the right way to make changes because then everybody's forced to make a decision.

Starting point is 01:01:27 Do you accept this change or not as opposed to ideas being sneaked in behind the door and your and that decisions forced on you? Exactly. Yeah. Okay, so, but, you know, hard forks, some people say, this is when they talk about sort of Ethereum, is there's some aspect to a hard fork where you're trying to upgrade what is the airplane while it's flying. And I think soft forks are also upgrading an airplane while it's flying.

Starting point is 01:01:53 But it's a smaller. That's, you get, there's some truth to that. There's definitely a bit more risk of a split as a result of a hard fork than as a result of a soft fork. And the split is highly indesirable, right? Well, it depends. If it's a split because of a bug, then that's horrible. If it's a split as a result of political differences, then I think a split is better than one side being forced to basically just suck it up and accept the majority position, even if it really hates it. Well, there's also political connections throughout the history of the United States. It's like sometimes groups of people that strongly disagree with each other should be forced

Starting point is 01:02:37 to work it out, even if they, even when a split seems like an easy thing in the short term. It depends. And I think like, well, for blockchains in particular, the costs of people being able to, like, peacefully do their, go off and do their own thing are much lower, right? Like, you know, okay, if you have a country and you have two groups, then, like often enough,

Starting point is 01:02:57 like, fighting out the new rules requires, you know, a civil war requires that role in the move and so forth, but no, on a blockchain, like, you know, the costs are lower. So if you were to look at the way things worked out with the block size wars, and there was a split, what is the Bitcoin cash? Bitcoin?

Starting point is 01:03:15 Yeah. Which, like you looking, putting on your historian hat, you mentioned offline, you like Dan Carlin. So if Dan Carlin were to do an episode on the on the blog size wars, do you think you could have turned out better or do you are you okay with the way it turned out? I'm definitely disappointed with what happens with the block with the big block side. I think the source of my disappointment is that one of the things that you

Starting point is 01:03:47 notice when just looking at this political disagreements generally, especially when you have environments where they're authoritarian or a single party dominated. And then there's some opposition party. And the opposition often has the very legitimate grievances. But at the same time, the thing you notice is that often enough the opposition just sucks, right? Like it just doesn't have, you know, political capacity.

Starting point is 01:04:09 It doesn't have like the ability to come up with policy because its entire culture is like designed around resisting much more and then it's designed around like, you know, actually debated serious policy trade-offs. And I worry or I guess not so much worry, because it's already happened. I, yeah, unfortunately think that Bitcoin Cash ended up being a victim of this, right? Like, first, there was a split with Bitcoin Cash. And then, of course, Craig Wright came in.

Starting point is 01:04:38 And, you know, Craig Wright was this basically scammer, who just keeps on pretending that he is such a shiena Komodo, the inventor of Bitcoin. Hey, Craig writes legal teams. Do you hear me? Yes, I still think you're client is a scammer. So assume me. This is definitely going to be depth first, sir, because I got to ask you,

Starting point is 01:04:55 all right. I guess this people have been contacting me and I'm trying to figure out like what is up with this human being. So for people who don't know, there's somebody who is, is up with this human being. So for people who don't know, there's somebody who is, let's start, there's Toshina Komodo, who is the creator of Bitcoin, who's anonymous, and actually most really big people in the cryptocurrency space do not, like yourself and others, do not dare claim that they are even for funds, Tosh Camoto. In fact, if Satoshi Nakamoto is still alive and is like, if you say you were a Satoshi Nakamoto, it seems like the thing he would do is probably, or she is trying to remain anonymous.

Starting point is 01:05:35 On the flip side of that, there's a guy named Craig Wright who continually keeps claiming that he is in fact Satoshi Nakamoto and keeps suing a lot of people. So on him, if we could just linger on him, what do you make of this character? What are we supposed to make of this character? Should he be ignored? Is there any possible truth to his claims? What do you make of him? The analogy that's at the top of my head will get a bit political but that's fine you've had

Starting point is 01:06:05 Michael ballas so I guess I view Craig Wright as being kind of like a Donald Trump figure yes and that like he's not very intellectual but I think he gets a big audience because he says he says things that like play to the resentments that people have and he says things that He says things that play to the resentments that people have and he says things that people wants to hear. In the wake of this block size war, the big blockers did feel very disenchanted. They felt that Bitcoin always had this vision that we were supposed to just keep increasing the block size and Bitcoin is pew to pew cash. It says so in the white paper.

Starting point is 01:06:40 Then this elitist clique of core devs just came in and said, no you know, no, no, no, we're going to impose this totally different vision. And if you ever want your scalability, you'll have to wait for us to create this just totally unproven fancy technology called the Lightning Network that works on your completely different principles. And you know, they were very angry at this. And I mean, I think, like, I think a lot of that anger is justified. But at the same time, you know, when people are in that mental state, like, it's very easy for you to just kind of like latch on. And if you find someone who

Starting point is 01:07:12 expresses anger at the same things that you're angry at, and also, like, seems like someone who's strong and seems like someone who, you know, might be good to rally around, it's very easy to just like get behind that. But that extra part about where he's supposed to go, more I don't understand why that's necessary. I think that's, he could have done it without that, but that just, it's a marketing strategy like it sort of gives him more salience.

Starting point is 01:07:37 Like there's other big block personalities, right? Well, what's the difference between, with Greg Wright, he's not just a big block personality. He's potentially Satoshi. And he did say all the big block things, right? Like, he talked about how, oh, the concept of a fee market is fundamentally like economically wrong, and it should be, it should be a free market, and you should be able to have blocks as big as you want. Like, he repeated all the talking points. And. A lot of people were kind of sucked into that. He unfortunately was able to basically dominate a big part of the Bitcoin cash community for a long time. Eventually, more and more people started to catch on. He would just say technical things that are completely wrong. One example of this that I remember is that he mixed up the concept of 256 bits and

Starting point is 01:08:32 2 to the power of 256 bits. The difference is like the difference between 80 and the concept of 80 digit numbers. Right. And because of this, like he made this, made this argument that said that Bitcoin, that Bitcoin's elliptic curve is friendly to cryptographic pairings. Like, you don't have to understand what that is. But if you want to know, I have articles on both at the talc.ca. But basically, he made this like technical argument that really hedged on this point. And then when people, pressed them on it is like, yes, what no, no, like what look exactly the height is like what to and two to the 256 bits. That's a very tiny amount of information. No, no, no, no, no, two to the 256 bits is more than the information in the universe. And like you, you know,

Starting point is 01:09:20 equivocated and kind of like preyed on people's inability to understand that mathematical nuance. And I called him out. And eventually I even called him out in person at this conference in Seoul. Like I just stood up and asked, the, you know, hey, you know, conference organizer, why are you letting this fraud speak of this conference? And I remember even some big blockers

Starting point is 01:09:41 at the time getting angry at me. But, you know, eventually they did get rid of him and then Craig, well, basically Craig Wright was forced to split off because the rest of the community refused to accept some network change that he wanted. And so then there was the BCH and BSV. And then in the Bitcoin Cash community, there was this drama of are they going to add a developer fund

Starting point is 01:10:04 where they redirect 12.5% of the revenue from the Menders to the devs and according to the libertarian, not a Greshad principle is this technically theft. Um, like his understanding of the technical depths of cryptocurrency was lacking in a way that you satoshi to come out of certainly would not. Yes, exactly. But the point is that even after Craig Wright got expunged, the Bitcoin Cash community kept having these disagreements. And now, after this development funds dispute, there was a further split between Bitcoin Cash and ABC. The breaching tree could still use to extend.

Starting point is 01:10:41 So in that way, it's disappointing to see those kind of splitting. It was never a result. It is. I would have definitely like wanted to see more of a kind of like the principled coin with a like tries to be Bitcoin, but you know, follows consistent big block values. But I know, maybe I should just like stop expecting projects that I have no involvement in to be care at all about what my values are. Maybe Ethereum is just like... I think you have a powerful voice and you can inspire other projects to live up to their best possible selves. Okay, so that's the layer one approach. The other layer one within Ethereum is the idea of sharding.

Starting point is 01:11:29 What the heck is sharding? Okay. What does the future of sharding look like? Right. So to summarize that big long tangent that we just went through. It's a beautiful tangent by the way. It's a sort of basic tangent. And I think like crypto is just one of the most underrated aspects of crypto is I think

Starting point is 01:11:44 how you can like analyze the, you know, the sociology and the politics and the anthropology and like, yeah, and I'm sure the at-carve would have fun exploring this base at some point. But like the core trade off, right, is that if you scale blockchains the dumb way just by increasing the parameters, then eventually you just make it harder and harder to participate as a node and you end up with a system where there's like 20 computers running the whole thing and it's just very centralized. So, Sharding basically says, well, instead of just increasing the parameters, what we're going to do is we're going to change the blockchain architecture in such a way that each individual node in the blockchain only needs the

Starting point is 01:12:22 store a small portion of the data and only needs to store a small portion of the data and only needs to process a small portion of the transactions. So we can think about it as being like inspired by BitSorrent, right? Like on BitSorrent, there's no such thing as a BitSorrent full node that has every movie, right? You know, the work is like split up among a huge number of computers and like that makes sense. That's, you know, the only sane way to scale a system like that. And if they actually tried making a version of bits or that required full nodes, that story of your movie,

Starting point is 01:12:49 then it would have zero censorship resistance and it would just be dead in an instant. So the challenge with taking that model and applying it to blockchains, is that blockchains aren't just about like spreading data around. They're about agreeing on exact to what data was spread around and ensuring that everything that you agree on

Starting point is 01:13:10 actually is correct. And so we have this paradox where let's say you want to have a system that supports 10,000 transactions a second, but each computer in the network can only personally verify 100 transactions a second. So how can each computer get a guarantee about the other 9,900 without actually going and verifying them themselves? And it turns out that there are some like a bundle of different tricks that can do that, right?

Starting point is 01:13:40 So like one of them is just random sampling. So the idea behind random sampling is like let's say for simplicity, this is a proof of stake chain, and you have 10,000 validators, validators, so like, you know, the stakers. And like for simplicity, we'll assume they all have the same number of coins, right? If someone has more coins, we'll just kind of split them up and pretend they're 10 stakers, then you do like some random shuffling and you basically say, these random hundred validators are assigned to validate this block. These random hundred validators are assigned to validate this block. These random hundred validators are assigned to validate this block.

Starting point is 01:14:15 And so each individual computer only gets assigned to validate like a small piece, but then the way that the information about like what's a valid gets passed around, right, is that when these 100 participants validate a block, they all sign a message, basically saying like, yes, we agree that this block is valid. And then like they combine that signature into one, and then they broadcast that signature. And then everyone else, instead of verifying the blocks directly, just verifies that signature, right. And so if I see the signature, I'm not directly convinced that that block is valid, but what I am convinced of is that out of this random we selected group of 100 validators, let's say at least 70 of them agree that this block is valid.

Starting point is 01:14:58 If I trust that the majority of these participants are all honest, then because it's all randomly selected, the attacker can't just force themselves into one committee. And so the attacker is even least spread out too. And so if the entire set of validators is most honest, every committee is going to be most honest. And so bad blocks are not going to go through. So that's one simple form of sharding.

Starting point is 01:15:24 There's also other more clever things that you can do. So for example, there's this concept of zk snarks, right? No, it's called zero knowledge proofs. So this is the idea that you can make a cryptographic proof that says, I verified or I ran some complex computation on this piece of data and I got this answer. And so if you make these kinds of proofs, then if you see a Zekis Nork that says some block is valid, then you're convinced that that block is valid. And even if everyone in that committee is evil,

Starting point is 01:15:54 like they have no way of making a valid proof for a bad block. Like because the proof itself, like it is a proof that you did the computation where that proof is much easier to verify than just running the computation yourself. There's once again, super awesome mathematical cryptographic magic behind making ZK Snarks work. It gives you a little bit of a leg up over the 51% honest assumption. It's a little hack that improves upon the random sampling thing.

Starting point is 01:16:25 Exactly. And there's other hacks, right? Look, there is another hack called data availability sampling that allows you to make sure that the data in the blocks was actually published. But basically, if you stack a couple of these tricks on top of each other, you can create a system where I, as an individual participant, can be convinced that everything that's going on in this distributed blockchain thing is correct without actually personally checking more than like a percent of it. So that's charting. That's charting. But the, as I understand, maybe correct me on this is in the space of

Starting point is 01:17:00 Ethereum, the charting happens on some fixed number, like theing happens on some fixed number. The split is on some fixed number. I think it's 64, is the currently proposed number. How does that help scaling? Is it just a fixed constant scaling by 64? Is that a way to achieve those crazy amount of scaling that seems to be required to use cryptocurrency for purchasing, so competing with credit cards and visa and so on. Right. So first, I think the 64 can be hard forked up over time. So we've stated so that there's

Starting point is 01:17:37 theoretically space in the data structure for 1024 shards, it's just that 64 of them are turned on. There are challenges with having more shards because you have to have logic that just like to be able to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that.

Starting point is 01:17:51 So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that.

Starting point is 01:17:59 So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. So, I think that's the only way to do that. if we're getting maximum scalability by combining rollups and sharding. So this might be a good time to talk about rollups. What are rollups?

Starting point is 01:18:08 Now we're moving into layer two ideas. Yes. So the idea behind a rollup is basically that, so instead of just publishing transactions directly on chain, and having everyone do all of the checking of those transactions. What you do is you create a system where users send their transactions

Starting point is 01:18:35 to some central party called an aggregator. And like, well, theoretically, you can have a system where like the aggregator, which is around or where anyone can be an aggregator. So, it's still like permissionless to send things. Then what the aggregator does is they strip out all of the transaction data that is not relevant to helping people update the state. So when I say the state, this is like a very important kind of technical surround from blockchain. I mean, like account balances, code,

Starting point is 01:19:01 that goes around from blockchains. I mean, account balances, code, things that are like internal memory of smart contracts. So like basically everything in the blockchain actually has to keep track of it and remember. Right, so you just put in, you take all these transactions, strip out all the data that's not relevant to telling people how to update the state.

Starting point is 01:19:24 And then you take the data that's needed to update the state and then you're like really compress it, right? So like, for example, if we say, you know, I've had like having accounts that 0x AB 58 blah, blah, blah, blah, blah, blah. And it's 20 bytes. Well, instead we can say, well, I have an account that is number 187 4224 in the tree, right? And that goes down from 20 bytes to just like an index and a position, which is three bytes.

Starting point is 01:19:48 So you use all sorts of these fancy compression tree acts, and you basically just, instead of publishing all these transactions, you publish this tiny compressed blob. So the amount of data that goes on chain goes down by maybe about a factor of 10. And then the second thing is that you don't do the computation on chain. Instead, you do the computation off chain. And there's one of two ways to do this. One is called a ZK rollup, which is you just provide a ZK snark that basically says, hey, look, I did this computation.

Starting point is 01:20:17 And I have this proof that here's the sum hash of the result and it's correct. And then you stick it on chain, and everyone verifies this one proof instead of verifying all these transactions. And then the other approach is called an optimistic roll-up, which is basically made of this scheme where first someone says, hey, this

Starting point is 01:20:36 is what I think the result of applying these transactions is. And then someone else can say, I disagree. The result is different. And only if two people disagree, do you actually do it on it? Like, do you actually just like publish all of the data and run the whole, that whole blog on chain? So if there's disagreements, then you just like run everything on chain and whoever was wrong, like loses a lot of money.

Starting point is 01:20:58 So disagreements are very rare and they're very expensive. And in a ZK roll-up, you don't even rely on this like challenging game at all. You just rely on a proof. So, you know, the core principle is basically that instead of lots of transactions and all the transit everyone verifies every transaction, it is, you take the transactions, you strip a strip of them down and compress them as much as possible, then stick that on the blockchain. You do need to stick something on the blockchain just so that everyone else can like keep up to date with the state so they know what all the contracts are,

Starting point is 01:21:29 what all the balances are in all of this, but it's a very small amount of data. And then you use one of these other off-chain games, could be this optimistic game, could be a ZGIS NARC, to just prove that somebody out there did the computation and the result is correct. So you're pushing 90% of the work off chain and then, well, 90% of the data

Starting point is 01:21:49 ends 99% of the computation off chain and then you still have 10% of the data and 1% of the computation on chain. And so, you know, your scalability goes up by a factor of about 100. So these systems are already live for some applications. There's something called loopring, which is just a SDK roll up for payments. You can have assets inside of the loopring system, and you can go around and transfer them. But you get much lower transaction fees.

Starting point is 01:22:24 Instead of five dollars, you'd have to pay less than five sets. But the only problem is that this only supports a couple of applications right now, like making one that supports anything that you can do on Ethereum just takes a bit more work, but that's being done as well, right? So like within a few months,

Starting point is 01:22:40 I'm expecting, you know, fully Ethereum capable of roll-ups to be available as well. So roll-ups just summarizing, do most of the work-off chain, put only a little bit on-chain, factor of 100 scaling, sharding, another factor of 100 scaling, 100 times 100 factor of 10,000, hundreds of thousands of transactions a second, and there's your scalability. Okay. So you choose scalability, you can do a large number of transactions very quickly and the cost to do those transactions is a much lower. You wrote that in the long-term

Starting point is 01:23:14 ZK rollups are going to win in terms of layer two technology. Specifically, you wrote, in general, my own view is that in the short term, optimistic rollups, as you were saying, are likely to win out of general purpose EVM computation and ZK rollups are likely to win out for simple payments, exchange and other application specific use cases, just as you were saying. But in the medium to long term, ZK rollups will win out in all use cases as ZK snark technology improves.

Starting point is 01:23:48 Why do you think ZK roll ups are going to win the big picture battle over layer two technologies? So I think ZK roll ups, like once you accept that the technology works are just like conceptually simpler and they have nicer properties. The reason is that they do not have this concept of a challenge game, right? Like as I mentioned, in an optimistic rollup, the way that you ensure that the results are correct is that you let one person submit and like they just submit with no proof. They just say here is what I think the result is. And then if someone else disagrees, they make their own submission.

Starting point is 01:24:22 And then if you have to disagreeing submissions, then you actually publish it on chain and you see who's right. But for this to work, you need to actually wait for someone to disagree. So for example, if I have an asset inside of an optimistic roll up and I want to withdraw it, then I actually have to wait a week to withdraw it because if the block that contains my withdrawal turned

Starting point is 01:24:43 out to be invalid, then there needs to be space for someone to disagree with it. But as with a ZK roll-up, you don't need time for disagreeing because you just have a proof. As soon as a block is submitted, there is a proof and it's correct. So, if this agreement's especially in the long term or sparse, then you don't want to do the optimistic, the game theoretic thing. You want to do the ZK stock.

Starting point is 01:25:05 Right. The ZK stuff is just like, you can, in a ZK roll-up, you can withdraw immediately. You don't have to like worry about the economics of proving as much. There's just like fewer issues. The reason why ZK roll-ups are not winning everywhere today is because, in a ZK case, darks are still a crazy new technology, right? This is something that 10 years ago, it existed only in theory and there was not in practice. Then eight years ago, people were just getting excited about it. Bitcoin conferences for the first time, four years, starting four years ago or three and a half years ago, even. That was the first time you were able to make any Zekia'sark based anything on Ethereum, and then people started making them, and ZK technology has only really become efficient enough to do a lot of things within the past maybe one

Starting point is 01:25:53 and a half years. So it's new technology, it's crazy technology, it's admittedly scary technology. If you want to learn more, I also have an article about this on Vatel.ca. It's actually really, really good. Most of you are writing, it's technical, but it's accessible. I highly, highly recommend to check out Vatel.c's articles and blogs, whatever you call them. It's brilliant summary of the work. Actually, Ethereum documentation period is really good. I think that's somewhat crowdsourced. That documentation is really, really accessible and brilliant. But let me ask about sort of other approaches to layer two, like side chains. So the one popular one is polygon. is polygon. What are your thoughts about polygon, which is a layer two network? Is it positive? Is it negative for Ethereum? Is it both? Does it have a future? Which is its own chain, but it's

Starting point is 01:26:55 using a theory, it's like based on Ethereum essentially, or maybe you can describe what it is. So I think there is a really big and important difference in security models between role ups and sidechains, which is basically that role ups inherit from the security of Ethereum. So like if I have coins inside of loopering or optimism or arbitrage room or ZK sync, then even if everyone else in the world who is participating in these ecosystems, so it hates me and wants to steal my money, I can still personally make sure that, no matter what happens, I get my money out. It might be a bit expensive for me to get my money out, and I have to do transactions on the main chain, but I'll be able to do it. Whereas in Polygon, which is a side chain, and so instead of being secured by Ethereum, it's also in part secured by its own

Starting point is 01:27:47 approved of stake in census with its own token. So if 70% of the whole, or even 51% of the holders of Polygon tokens wanted to take my money in Polygon, they can. Right. So that's the, and like to be fair, like there aren't even like the supply. I don't think it's even that wide we distribute it, right?

Starting point is 01:28:08 So like potentially you could, you could, this idea 51% of the token holders come in and gather and stealing everything like it's, it's not impossible. Right. Where does the scaling of polygon come from? Like why is it able to process much more transactions than the Ethereum mainchain? What's the idea there? I think in part, like, I imagine, I'm not sure exactly what its capacity level is, but like I imagine it has a higher capacity because it's a bit more willing to take centralization trade-offs. And then another thing is that, like, if the Ethereum ecosystem,

Starting point is 01:28:44 like, even if it did not do that, if you think about an Ethereum ecosystem hypothetically scaling with side chains, then you would have 100 copies of Polygon. They would each have their own tokens, they would each have their own chains. Even if each one of those chains was only as scalable as Ethereum, the total sum of them would still be 100 times more than Ethereum. could still make the total sum of them would still be 100 times more than Ethereum. Okay. Um, the, um, the thing that I want to say in Polygon's favor just to be very, a, a fairer of them, like, I guess, I, I, I, I, I, I definitely, really, you know,

Starting point is 01:29:14 respect the work that they're doing. So, you know, start with the, a bit with that word of, uh, not criticism caution, right? Like it's, um, of not criticism caution, right? Like it's that they made this kind of deliberate trade-off for very pragmatic reasons, which is that the Ethereum ecosystem needs to scale now. And there are applications that want to do something now. And, you know, if there aren't Ethereum friendly options for them, then like they're not going to just wait peacefully and do nothing for 12 months. And they're going to go to, gonna go to either Binance Smart Chain or one of some other system, or potentially something that just has

Starting point is 01:29:51 totally no alignment with Ethereum values whatsoever. But whereas with Polygon, the best thing that you can say in Polygon's favor and against optimism is that, optimism is not live in Polygonious Life. It just takes more work to create a system that has these extra roll-up security features. And so Polygon just said,

Starting point is 01:30:13 we're gonna be the system that makes the pragmatic trade-off, we're gonna go functionality first, and then we can talk about adding back the security later. So I've talked to them, and in principle, I think they're very open to the idea of like adding more security and becoming more, becoming a rollup or at least, you know, adding a polygon chain, let's say, roll up at some points in the future, which is definitely something I think they, yeah, you know, absolutely showed full through one. But like the fact that like they exist

Starting point is 01:30:46 now and so, you know, applications can kind of bootstrap now on a chain that, you know, even though it security isn't perfect, at least it exists and people can go use it. And then over time, you know, the chain mature as the applications mature, like units, I think of a very reasonable strategy and I'm definitely really happy that they're part of the ecosystem. Yeah, it's kind of interesting. The history of cryptocurrency has this tension of really good ideas that are hard to implement, so they take longer to implement.

Starting point is 01:31:18 And ideas that are not as good, but are faster to implement. This is like the story of like, That are not as good, but are faster to implement. This is like the story of like you have like JavaScript I basically took over the world because it was quick to implement within 10 days and then like later kept fixing itself I don't know what to make of that be I sort of from the engineering perspective Mm-hmm. I'm more and more becoming comfortable in accepting the fact that our whole world will run a technology that's not as good as it could have been, just because the crappy solution is faster to implement in the sticks. What do you make of that tension? I think the compromise that we've been taking with Anetherium is like when we have to take the crappy solution, we look for crappy solutions that are forward compatible with becoming good over time.

Starting point is 01:32:07 When you build the quick and dirty thing, you would still already have ideas in your head about what the more complete thing with all the security features that it all would look like, even if it requires a hard fork. Yes. Even so, for example, we're shorting. I think it's likely that the first version of shorting that comes out, like is not going to have ZK Snark's and Data Availability sampling, for example. But we know what these technologies are.

Starting point is 01:32:34 We feel like we have wrapped our heads around them. And so we know how to build a system where we can put all the pieces in place so that it becomes very easy. It's a bolt those components on in the future. So if you do things that way, right? Then at the beginning, you can have your system that has the functionality, but say has less security or less sustainability

Starting point is 01:32:56 or less of something else. But then over time, it's designed in such a way that it has this easy on ramp to adding those things. And if you don't think explicitly about being future-capable, you do often end up with a quick and dirty solution that backs you into a corner. There are definitely cases where I think the Ethereum ecosystem has suffered from that, and we have had to expand pretty significant effort on, for example, removing features that we didn't realize that we actually can't sustain.

Starting point is 01:33:29 One big example was just increasing the gas costs, so making some operations more expensive because they should be expensive, because they actually take a lot of time in the process. So that's making something more expensive, taking some functionality away. So if you can be cognizant of where you're likely going into the future, and if you don't know,

Starting point is 01:33:52 like even be cognizant of both the most likely paths that you'll take in the future, and thinking about your roadmap and coming up with a roadmap where you know that, if you want to do either of those things, then you have a clean path toward it. That's probably the best kind of practical way to get the best of worst worlds that we have. Okay, let's talk about this wonderful process of merging. Okay, so there's the main net, which is the Ethereum 1.0 chain or the chain, what should we say?

Starting point is 01:34:26 The chain that uses proof of work as the consensus mechanism, and then there is what is it called? The beacon chain that uses the proof of stake mechanism, and I believe the beacon has been deployed successfully, is working, so that was in December of 2020. There's a bunch of questions around that that's fascinating as well, but I think the most fascinating question is about merging those two. When do the two chains, one that's proof of work, one that's proof of stake merge? And's proof of stake, merge. And what are the most

Starting point is 01:35:06 difficult parts of this process? Right. So as you've said, the way that we have set up this proof of stake transition is that at first, the proof of stake change is to launch it on its own. And this is the thing that happened in December. And the proof of stake chain has been running for close to six months now. I mean, by the time people watch this, it might actually be six months. But it isn't actually coming to consensus on anything except for itself. Right. So the idea behind that is to just give the proof of stake chain time to mature time for people to build the ecosystem around it, time

Starting point is 01:35:45 to make sure that there aren't any bugs. And just like proof to the community that no proof of stake actually is real. And a full transition is realistic because you know the thing that you're transitioning to already existing already works. And then at some points in the future, you have this event called the merge where you basically take the activity that's being done inside of the proof of work chain, and you actually move it over into the proof of stick chain, so you get rid of the proof of work side completely.

Starting point is 01:36:13 So the way that the merge will work is, it's definitely gone through a few different iterations. Like, the earlier versions of this actually required more work for users and more work for clients. It was much more like, oh, there's this new chain, there's this old chain. And then everyone has to like migrate from the old chains of the new chain. And then at some points, well, forget about the old chain. The new version is designed to be much more seamless for users. Right. So basically, what actually happens is that the old chain basically becomes embedded inside the new chain. So starting from the merge transition block,

Starting point is 01:36:54 every proof of stake chain block is going to contain a block of what we consider now to be the Ethereum chain today, but we'll call it the execution chain. And then at the same time to create one of these blocks, you're not going to need proof of work anymore, right? So basically at the same time, you both get rid of the proof of work requirements for one of these blocks to be valid.

Starting point is 01:37:16 But instead, you require these blocks to be embedded inside of the proof of stake blocks, right? So you basically have like a chain inside a chain. And this is from an architecture perspective, you perspective, you might think it's a little bit sub-optimal, but it actually has some nice properties. It makes it easier to think about the consensus and think about what we call the execution layer, transactions and contracts separately and upgrade them separately. And it also just means that the upgrade process is extremely seamless, right?

Starting point is 01:37:47 Because from the point of view of a client that's following the chain, you basically have to update nothing, right? You're still following the same chain and follows the same rules, except instead of checking proof of work, you'll switch to checking that these blocks are embedded inside of blocks of the proof stake chatter.

Starting point is 01:38:02 So there'll be this merge block that will mark this transition. And over time, I guess the new chain will contain the full record of all the transactions that has ever happened on the previous chain, on the old chain. So like maybe I'm asking a dumb question here, but in this process, is the new chain going to have all the information of the past, all transactions? The new chain is not going to hold information from what happened in the Ethereum chain before the merge.

Starting point is 01:38:36 So, Ethereum clients that people are going to use around the time of the merge and soon after the merge, they're probably just going to sink and check the proof of work chain up to the merge, and then they're going to check the proof stake chain. But at some point in the future, I think people will just stop bothering checking the proof of work before the merge. Got it.

Starting point is 01:38:57 So that old history information is not important. Or for the future, like if you're operating actively on the new chain, that history is not important to you. It's not important. So it's not strictly important for just like any smart contract or just like applications that run on the blockchain. It can be important to users and it can be important for some applications.

Starting point is 01:39:23 But we're basically saying that maintaining and serving that is not going to be simultaneously the responsibility of every Ethereum node. If you want that information, there can be separate protocols for backing it up. These other protocols actually exist. There's something called the graph, which is doing some history retrieval.

Starting point is 01:39:41 Potentially, you can just take that entire chain and stick it on BitSport. There's lots of ways to archive it and create kind of customized search protocols for it. So what's your sense why, so there's a Python 2 and Python 3 and it took forever for people to switch? What's your sense why this merge has been taking longer than perhaps was expected? I think the biggest reason is just, we've been underestimating the technical complexity.

Starting point is 01:40:10 There's a lot of technical complexity in making a successful proof of stake chain. There's a lot of technical complexity in actually figuring out the transition process. There's... So that's bigger than social complexity. So the technical complexity, you would would say is the bigger reason for the Any delays than the social complexity. I actually think so. I mean, I think we've been very fortunate to not have too much social complexity around the merge So not much drama. No, I think the biggest part of the reason is just because we have been talking about proof of stake and sharding as being part of the roadmap since almost a very beginning of the project, right?

Starting point is 01:40:49 Yes. The very first proof of stake blog post is from January 2014, which was, you know, two months after the project started and like maybe even a day after the announcement. So you know, proof of stake was not something that we kind of put on anybody by surprise. And then when the Dow fork happened and, you know, the people on the ETC side split off, I think it also just happens that a lot of the people that were not willing to stomach the Dow fork and then join the ETC side, they were the more Bitcoin-y types and the more Bitcoin-y types do also tend to like

Starting point is 01:41:25 proof-of-work more. And so, that also sort of ended up, sort of purifying the communities on both sides, I guess. So, Ethereum Classic is not switching to proof-of-stake, and they're happy with their setup. By the time that it came to the beacon channel launching. And so now I think the community is the very strongly in favor of the proof of stake switch. But let me ask the question that no engineer wants to hear, which is the question of timeline. When do you think the merge will happen. Do you have a sense it might happen this year? Do you have a sense it might be pushed towards next year 2022 or or even beyond?

Starting point is 01:42:14 I think early 2020 is the most realistic. There's definitely still like an optimistic case of it happening this year, but the realistic thing to count on is definitely the early part of a very early part of next year. Is there specific things that stand out to you? There are, like, though, make you feel good about progress, if you see it happening. So the thing that we had last month is that had this online hackathon called Ray and SOM, where basically a bunch of the different client developers that are going to be part of the transition, like hacks together some test

Starting point is 01:42:53 nets of the post merge, if there are M chain. So these were only test nets of what would happen after the merge. They were not test nets of the transition itself. So the thing that people are working on now, actually, is the transition. So having a full specification of both the transition and post transition, I mean, we have specifications now,

Starting point is 01:43:15 but in a realistic way, they'll probably needs to have a couple of changes and have things that continue to be ironed out. And then have a test net that does both the transitioning and the post-transition. And then once you have a test network, then you just have to do a lot of testing and audit it. And then do some runs on not just a specialized test network,

Starting point is 01:43:37 but on, say, an existing test network like Rob Center Rinkerby that Ethereum people already significantly use. And if it works, then you can deploy the transition on mainnet. Just as a quick comment, because this is fascinating. In August of last year, there was this modala. I believe it's pronounced mdasha. It's a yes, South American subway station. I forget where. But spelled the two Ls. Yeah, yeah, because that's, you know, that's how Spanish works, right? Like the two Ls have a Natasha.

Starting point is 01:44:09 Yeah, okay. Cool. Anyway, but I read about it in middle of August, August 14th, there was an incident on that test net. What, how does this process work? Like, what do you learn from those kinds of incidents when stuff goes wrong in the test process? I think that incidence was that there was a consensus failure of some kind as I remember, and basically just different clients and interpreting things in different ways, and then one of

Starting point is 01:44:36 them getting kicked off the network, and then it ended up taking a while to actually like get everyone to get back online. Like a big part of the reason why it took weeks to resolve is because it's on a test network, the coins are valuable. There's not really this big push of any kind for people to actually go and download the new client so they can start participating again. It definitely took a while until the chain started finalizing again. But and then also like there was, I think, another round of just not finalizing in October as I remember. There were definitely things that we learned.

Starting point is 01:45:16 Like there were a lot of things, especially that client developers just learned about like optimization and how to build their clients in a way that they can process things efficiently. There's a lot that we learned from just seeing the full lifecycle of what happens when more than a third of the validators go offline and then finalization stops. And then that kind of weird, unusual state of the chain continues for a while. And then eventually, everyone who is not participating just gets enough of their stake. We don't use the word slash, we use the word leaked for this,

Starting point is 01:45:51 but basically also burned until the people who are participating go back up to two-thirds, and then the chain goes back to finalizing. So just seeing all of those edge cases play out live, I think actually helped a lot and probably helped really contribute to making us feel better about main net. I mean, there's also an incident just recently in April 24th of 2021 where this was on beacon, I guess, that was a bug discovered in the software client prism that prevented roughly 70% of validators on the network from producing blocks. I mean, maybe you can comment on what happened, but broadly, like the big picture, what kind of stuff are you worried about in terms of problems that might arise? I was talking about small bugs. I was talking about like emergent social, unexpected social bugs. I were talking about like emergent social unexpected social bugs. You know, what are

Starting point is 01:46:47 the things that worry you about the future of Ethereum that you want to make sure you construct mechanisms that prevent those things from happening? So one of the lucky things there was that this particular bug only prevented proposals of self blocks. It did not prevent attestations. Right. So attestations is just a mechanism for voting on blocks. And it's the attestations. Attestations is just a mechanism for voting on blocks. And it's the attestations that are actually responsible for the chain finalizing. So it coming to this more permanent agreement on blocks. So the chain was actually quite stable all the way through.

Starting point is 01:47:18 I think the thing that we generally learned from these experiences is just how valuable it is to have the some multi-client network. So this is one of these areas where I think Ethereum distinguishes itself from Bitcoin, for example, right? That in Ethereum, we don't have one single client that everyone just runs, right? There's multiple implementations of the protocol. And these multiple implementations, they all process and verify the blocks that each other can, you know, verify, right? So they all speak the same language. Now, sometimes when there's a bug, they disagree. And when two coins disagree because of a bug, we call this a consensus failure. And consensus failures are pretty serious, right? And when you have a client's monoculture, like Bitcoin does,

Starting point is 01:48:07 then it's more rare to have consensus failures. There you still have them actually. Bitcoin had a consensus failure between two different versions of the same client back in 2013. But there were less likely to happen. But the interesting thing is that the multi-client architecture has actually, I think, saves Ethereum much more than it's heard it. So even in this most recent incidents, like, Prism was not producing blocks, but all the other clients were still producing blocks.

Starting point is 01:48:36 There's four others, right? Yes, it's Prism, Nimbus, Tecru, and the Lighthouse. And then also Ethereum back in 2016 had this fun events that we call the Shanghai DOS attacks. They're called that because the attacks started right on the first day of our annual conference at Defcon that happens to be in Shanghai that year. So what happened, so like basically was that someone came up with a way to create blocks that were very slow for one client to process, but not the other clients. So at that time, they were basically two Ethereum clients.

Starting point is 01:49:12 They were called Geth and parody. Right now, I think the top three ones are Geth, Nethermind, and Basu. But what happened as a result of us having two clients is that the attacker was just not able to come up with blocks that both clients were like Completely failing at processing and so like a lot of the miners and a lot of network participants They just kept on switching between the two implementations Depending on which one worked and that actually really helped the chain the Chain kind of survive through that month of attacks as the attacker just like kept on hammering at our system and identifying all of the weaknesses and just like forcing

Starting point is 01:49:51 our clients to do this, you know, rapid sprints of just like optimizing the hell out of everything and make sure there aren't any of those dots blocks or a dots bugs remaining. So that was another example. And then like as a counter example, so like something that also shows the point from the other side, Bitcoin had this bug in 2010, right? The balance overflow bug. Basically, someone created a transaction

Starting point is 01:50:18 that had two outputs. And those outputs had, like, we're both of a few billion Bitcoin. So it could go to the power of 63 Satoshi's. And then if you add those outputs had, like, we're both of a few billion Bitcoin. So it could go to the power of 63 Satoshi's. And then if you add those numbers together, you go above to the power of 64. And of course, you know, computers like once you go above to the power of 64, you wrap around. And so the Bitcoin nodes thought that there was enough money to pay for the transaction

Starting point is 01:50:41 because it was asking for, let's say, like, a billion Satoshi's or something, but actually it was asking for to the power of 64 plus a billion. And so, you know, the attacker just managed to create like billions of Bitcoin out of thin air. And this was not only discovered and fixed after something like 12 hours, but, you know, if there had been, like, if Bitcoin had been a multiple implementation system, then what if almost certainly happened is one of the clients would have bugged out, but the other clients would have probably actually had a check for that.

Starting point is 01:51:14 And so there would have been a consensus failure, but at least that would have awarded everyone that there is a problem very quickly. And it also would have given everyone just obvious social permission to go and pick whichever one of the chains is correct and solve the problem. So, that's, I think, a big learning that we've had from multiple of our experiences in the Ethereum ecosystem, just like validating this multi-client model. And to be fair, it's a model that we get criticized for a lot, right?

Starting point is 01:51:45 Like Bitcoin people talk about, you know, the risk of consensus failures that this creates. VC types are like, well, you know, isn't it expensive and wasteful to fund three software teams when you could just be making, you know, one quote-focused effort. You know, they love the word focused. And like, you know, Ethereum is not that, but it's amazing despite not being at.

Starting point is 01:52:04 Yeah. And if your aim is not that, but it's amazing despite not being at. Basically, so that was interesting. And then there have definitely been other warnings as well, just from seeing the chain live and seeing what actually is the staking experience, like what are the actual inside- incentives for all the different participants. So I definitely feel like we're gaining a lot from this sort of one year of trial running the chain before we actually make all of Ethereum depend on it. Let me ask perhaps a strange question, but you know proponents of Bitcoin will say things like Bitcoin fixes everything. things like Bitcoin fixes everything. So why do we need Ethereum versus like Bitcoin plus lightning network for scalability and then using Bitcoin for it with its proof of work for security. So in this kind of it is perhaps sort of a strange

Starting point is 01:53:01 question but it's a high level question. Why do we need another technology? Yes, there's a bunch of nice features, but like, doesn't Bitcoin fix everything already? So the thing that always attracted me about Bitcoin is these values of decentralization creating these open, provisional systems that anyone can participate in and that aren't just going to flop over and die if whoever created them gets bored and that are resistance to whoever runs them breaking the rules and all of these things. And I think that pretty strongly that these principles are really valid and important to much more things than just money.

Starting point is 01:53:42 Bitcoin is the blockchain for money and Ethereum is built from the start as a general purpose blockchain, right? It's, you know, there is ether of the asset on Ethereum, but then you can also make decentralized financial things, what we call defi today. You know, you can make like ENS the decentralized domain name system.

Starting point is 01:54:00 You can put make prediction markets on it. You can make totally non-financial systems that just keep track of whether or not some certificate was signed or whether or not some cryptographic key got revoked. There's this big long list of just interesting things that you could use of what blockchains to do, right? Like basically, they are sort of the missing piece that we are without them. The kinds of things that a decentralized computer network can do is we are limited. And once you have them, and a lot of those limitations end up going away. And so Ethereum was like always from the beginning about that, right?

Starting point is 01:54:42 It's about like, hey, this isn't just money. There's so much more that you could do. If you could just go ahead and make any infrastructure or a digital institution or a dow or whatever you want to call it, where the base layer of the logic is just executed in this open and transparent way where everyone can see what's going on. Or if you like your zero knowledge proofs,

Starting point is 01:55:04 at least everyone can see proofs that prove to you that what's going on, or if you like your zero knowledge proofs, at least everyone can see proofs that prove to you that what's going on follows the rules. And you don't need to just constantly keep trusting centralized actors. And- Hence the smart contracts. Exactly. As being a core technology as part of Ethereum.

Starting point is 01:55:20 Yes, exactly. Smart contracts, the computer programs that are running on Ethereum, they are the core of what makes Ethereum. Yes, exactly. Smart contracts, the computer programs that are running on Ethereum, they are the core of what makes Ethereum general purpose. I do think that there's a lot more that are wrong with the world than just money. I'm not one of these people who thinks that if you get rid of the currency and you replace it with cryptocurrency, then suddenly wars are going to go away, right? Because like, first of all, you know, like seniorized revenue is only a small portion of government revenue, right? It's like what, 5, 10% something like that. Second of all, like if you are the sort of, this is one of the things I don't

Starting point is 01:55:59 even get about their philosophy. Like, let's say you're the sort of person who is a, like, in extreme and very distrusting libertarian, and you think that these governments are terrible, right? Like we know today that governments find a combination of, you know, things like welfare and things like, you know, the military that, you know, goes in like, bombs, people in Afghanistan, right? And the, so the question you have to ask is like, okay, you with your new, you know, magic newfangled cyber currency that takes over the world, take away the government's ability to have senior Azure revenue, and so you reduce the government's revenue by 10%. If the government

Starting point is 01:56:37 is that evil, which portion of its expenses isn't going to take that 10% from? Is it going to stop the bombing people in Afghanistan or is it going to cut welfare? If you think it's expenses, is it going to take that 10% from? Is it going to stop the bombing people and if you understand or is it going to cut welfare? If you think it's the first, you have a very optimistic view of the government. Right? So that's, I guess, my perspective on like why the whole, you know, we're going to save the world and create, and create peace by like denying governments the right the stealth taxation kind of perspective. Doesn't really make much sense for me. And I do think that there is real value that comes from a decentralized and open currency.

Starting point is 01:57:14 Like just the fact that there is a financial infrastructure that anyone in the world can go ahead and use, right? Like it's, that's something that can easily be a big boon for people, right? There's a lot of places where the currency is much less stable than the dollar. And you know, these people like they don't, well, if they use Bitcoin, their only option is to get Bitcoin's, right? Which, you know, are also pretty volatile. If they use Ethereum, then, you know, they can get Ether, but then they can also get stable coins, right? And you might think that, you know, oh, you're not being ideologically pure,

Starting point is 01:57:49 and now you're giving them stable coins, which are mirroring dollars, and obviously dollars are going to collapse too. But the reality is that dollars are fast, we're more stable than the Venezuelan ball of R. So like, there are really meaningful and beneficial things that you can give to people by having a global and open financial system. But I think if you want to actually do that, like you have to have much more than just a currency, right? And then if you want to go beyond financial things,

Starting point is 01:58:15 then you have to obviously have much more than a currency and then you also have to actually take scalability seriously, because non-financial applications like nobody's going to pay five dollars a transaction for them. Can we return to dogs? Sure. No, no, no, no, no, no, no. The other ones categorically forbidden.

Starting point is 01:58:41 Yeah, categorically, for a bit. Is there any cryptocurrency based on cats actually? I think there are like was there was cat coin. There was an Yan coin. For some reason they just didn't catch on as much as the dog coins did. Okay. So let's talk about dogecoin and Elon Musk. Elon said that quote, ideally doge speeds up block time 10x, increases block size 10x, and drops fee 100x. Then it wins

Starting point is 01:59:11 hands down." You said in a blog post, partially responding to that, that there are subtle technical why this is not possible. To this Elon said that you quote fear the doge. So let's talk about this. What are the technical hurdles for dogecoin that prevent it from becoming one of the primary cryptocurrencies of the world and do you in fact fear the doge? I definitely feel obligated to correct the record. I definitely do not fear the doge. Okay. No, I love the doge. I actually visited the doge. I definitely feel obligated to correct the record. I definitely do not fear the doge. Okay. No, I love the doge. I actually visited the doge in a Japan a few years back. It's she's an amazing dog. This is still alive. Wait, the original doge? Yeah. Oh, wow. So, you know, we accept doge every year for our annual DEF CON conferences. So I definitely don't think Ethereum is opposed to Darkcoins.

Starting point is 02:00:11 I kind of want to feel like Ethereum is at least a little bit in spirit itself, a Dark Coin. And then, as I mentioned, I love Doge. I bought a bunch of Doge. I still hold a bunch of Doge. On the scalability question, the challenge basically is the limits scalability and the trade-offs with centralization. If you just increase the parameters without doing anything else, then it just becomes more and more difficult

Starting point is 02:00:36 for people to validate the chain and it just becomes more likely that the chain becomes centralized and becomes vulnerable to all kinds of capture. So does it need like some of the layer two technologies that we've been talking about? I mean, I personally think that, you know, if Doge wants to somehow bridge through a theorem and then people can trade Doge thousands of times a second inside of a loop ring, then, you know, that would be amazing. I mean, if they want to just like take ZK roll-up style technology and just have thousands of transactions a second on their own chain, then that's, you know, that would be a great outcome as well. So what is there ways for Ethereum and

Starting point is 02:01:14 a dogecoin to work together? So okay, so there's a power behind a person like Elon Musk pushing the development of a cryptocurrency. Is there a ways to leverage that power and that momentum to improve Ethereum, to improve some of the sort of cryptocurrencies that are already technologically advanced and pushing forward that kind of technology? I definitely think there's room for, you know, that meme of Doge taking over that store. I've seen it. Is there a way to ride that storm, that wave of the Doge, taking over? I think if we can have a secure Doge to Ethereum bridge, then that would be amazing.

Starting point is 02:02:01 And then, when Ethereum gets its scalability, any scalability thing that works for Ethereum assets, you would be able to also trade wrapped doors with extremely low transaction fees and very high speed as well. Is there a, is there precedence for building secure bridges between cryptocurrencies? Is that, I mean, how difficult is this kind of task? That's, it's definitely something

Starting point is 02:02:21 that's in its infancy. There definitely have been some cross-chain interaction things that have been done before. And so what, the earliest is probably the concept of merge mining, right? When a chain just makes its entire proof of work algorithm dependent on the proof of work algorithm of another chain. And so I think famous, the douche coin actually merge mines to light coin, which is, I think in rush respects, not looking like a very good choice because now Dogecoin is bigger than Litecoin. But, you know, if there's potentially some way for Dogecoin to merge mine with an Ethereum

Starting point is 02:02:56 proof of stake in some kinds, then that could be an interesting alternative. So that's one type of like chain interaction. As far as like bridges, like one chain reading another chain, early in Ethereum's history, there was this project called BTC really. It's a smart contract on Ethereum that just verifies Bitcoin blocks. I think people stopped really caring about and maintaining it because there just weren't enough applications that were actually interested in using it at the time, and the transaction fee has got too high to actually maintain it. So I think if we want to make a BTC relay 2.0, that becomes cheaper because you know, it uses an arcs or something like that,

Starting point is 02:03:36 then you probably could. But it maybe now is the time when you actually can do that sort of one wave hereification. But the one challenge though is that if you want to have a bridge that allows you to move assets between chains, then you don't just need one wave verification, you need two wave verification. And Ethereum can verify anything because Ethereum smart contracts can just run arbitrary code. But if you want Bitcoin to be able to do things based on what happens in Ethereum lands, then Bitcoin would have to basically, well, they can do everything with soft forks because that's their religion,

Starting point is 02:04:09 but they'll do it that way. If Doge wants to make a fork, that allows for two-way, yeah, transferability with Ethereum, then they could. I think that would be a lovely collaboration to make it for, and there's interest. I think there might actually even be some multi-seag funds that have some, some funding. It's just a bounty for someone to make a bridge between the two. Yeah. Could you maybe try to psychoanalyze Elon Musk for a brief second? So what are your thoughts about Tesla and Elon Musk's journey

Starting point is 02:04:47 through the cryptocurrency world? So first with Bitcoin and then with Doshcoin. So acquiring and large acquiring holding a large amount of Bitcoin, and I believe at least considering the acquiring and holding a large amount of Doshcoin, positive as negatives. What do you think the future for Tesla and SpaceX in the cryptocurrency space looks like? Do you think they'll consider a theorem? I'm sure that if they stay in the cryptocurrency ecosystem at all, then they have to at some point. I'm a bright one big. Yeah. You know, big one, number one, dogecoin, number, I mean, you know, come on, it deserves to be number three.

Starting point is 02:05:28 And then, or number two, and then Ethereum can be whatever that, whatever that other number is. But, but, um, the, well, if Ethereum only becomes a dog coin somehow, maybe it changes the logo to incorporate a dog as I'm sort of almost like doors like sneak in behind. Oh, that would be fascinating. What would the merge happen?

Starting point is 02:05:52 And I think, Elon, you definitely, I think you would make a mistake if you were to kind of ascribe too much like sophisticated malevolent or any deep intentionality to the whole process. I think he's just a human being and he likes dogs, just like I like dogs. Yeah. But I think that is literally the reasoning behind the whole dog's going thing. There is some aspect to which I mean, the guy helped launch a car into space, right? Like you could ask, like, what is the purpose of that? I think the purpose of that is fun.

Starting point is 02:06:29 There, I think he truly is more and more, especially lately, embodying the whole idea that the most, the most entertaining outcome is the most likely, and he's fully embracing the most entertaining outcome. And in many ways, Dosh Cohen is the most entertaining outcome. And in many ways, Doshcoin is the most entertaining cryptocurrency. As cryptocurrency becomes more and more impactful in the world, people are getting more and more serious about it.

Starting point is 02:06:53 And so he's selecting the cryptocurrency that is the most, the least serious and the most fun. And there's something to that, like coupling fun with technological sophistication, and somehow figuring out a way to do that. Absolutely. I want the world to be fun. I think the world being fun is great. Okay. Let me ask about a couple other technologies.

Starting point is 02:07:18 It's okay. Sure. What are your thoughts about Chainlink and hybrid smart contracts that utilize off-chain external data sources? I think it's definitely your necessary for a smart contract so that you do a lot of things to use off-chain data of some kind. If you want to have a stable coin, you need a price to work also, you know what price you're targeting.

Starting point is 02:07:41 If you want to have some fancy crop insurance gadget. Like I think Etherisk has been doing a lot of good work with that. And I think it was either Kenya or Sri Lanka are both like they're making a lot of good progress in some of those places. Like you need some kind of Oracle to tell you, you know, did it actually rain in this particular area. If you want to have assets that mirror other financial assets you need an Oracle,

Starting point is 02:08:08 if you want to have a prediction market, you need an Oracle. And so projects that provide Oracle's are definitely really important. There are definitely different kinds of use cases like Auger is more about events. And the Oracle is designed, I think differently from channeling, right? Like channeling emphasizes the whole,

Starting point is 02:08:28 like we have a fast automated thing that just gives you data quickly. Whereas auger is more, we don't give a crap about speed. And look, we don't need to give a crap about speed because if you want to get your money out on a prediction market that we're in reality, it's resolved, you can probably just sell your coins for 99 cents anyway. So, I think the chain link is definitely like taking a good and the important part of

Starting point is 02:08:56 the Oracle design space. And I'm definitely happy that there is that project taking the task on. At the same time, I do think that their Frog army on Twitter can get a bit intense at times, but is there a way to incorporate an Oracle network type of ideas into Ethereum? I personally would prefer the Ethereum base layer, like stay away from trying to provide too much functionality, because once you have the Ethereum base layer making a claim

Starting point is 02:09:26 about the US dollar to Ethereum price, and at some sense, you're basically saying that Ethereum as a base platform starts making what could be geopolitical statements. For example, imagine if there was some civil war in the US split up and you had two currencies that both claims to be the US dollar. Well, Ethereum would have to pick one for the sake of everyone who was already using that work. Also, does that mean that the blockchain would be taking a position in this big, mega political debate? So I think, for just those kinds of reasons, I would personally prefer Ethereum itself to be more

Starting point is 02:10:08 of this sort of pure platform that just analyzes transactions, just mathematically using deterministic incentives rules, and then if you need the Oracle, that can be a layer too. I think Ethereum benefits from not trying to do everything out layer one and having this very robust way or two ecosystem where you have all these projects doing interesting things? Yeah, focused on the basic technology of way the politics got you.

Starting point is 02:10:35 Let me ask a bit of a human question. Charles Hoskinson, someone you've worked with in the early days of Ethereum, there appears to my outsider view to have been a bit of a falling out. Is there a positive, inspiring human story to be told about why YouTube parted ways? I kind of want to let the various books about Ethereum speak for themselves. But I feel like since that time, I think Charles has clearly progressed and matured in a lot of ways. And people who follow Charles closely have definitely told me that 2021 Charles is very different from that 2014 Charles. And I'm sure it's 2021 Vatelic is much different from 2014 Vatelic as well.

Starting point is 02:11:27 I'm kind of interested how the 2030 and 2040 Vatelic and Charles look like as well. Oh, interesting. Like the progression of the humans. Is this going to be one of those things or like everyone comes full circle and then 2030 Vatelic and Charles are best friends? Yeah. I mean, not the best friends, but some kind of, are able to reminisce in ways that put some of the tension of the past behind. I think such things are possible. I mean, I think people definitely absolutely have a right to, and they should strive to just constantly change and reinvent themselves. Is there something you could say about your thoughts about the Cardano project that Charles Hoskinson leads?

Starting point is 02:12:14 They've worked on some interesting ideas that mirror some of the ideas in Ethereum, proof of stake, working on smart contracts and all those kinds of things. Is there something again positive inspiring that you could say? Are they a competitor? Is it complimentary technology? There's definitely interesting ideas in there. I do think Cardano takes a bit of a different approach than Ethereum and that they really emphasize having these big academic proofs for everything. Whereas Ethereum tends to be more okay with heuristic arguments.

Starting point is 02:12:52 In part because it's just trying to do more faster, but there's definitely very interesting things that come out of IOHK research. Can you comment on the idea? I sort of having a foot in research, enjoy Charles' emphasis on papers and deep academic rigor. Is there what's the role of deep research rigor in the world of cryptocurrency? Interesting. I'm actually the sort of person who thinks deep rigor is overrated. The reason why I think deep rigor is overrated is because I think the in terms of why protocols fail, I think the number of failures that are outside the model is even more important,

Starting point is 02:13:37 is bigger and more important than the failures that are inside the model. Right, so if you take selfish mining, for example, like that original discovery from 2013 that showed how Bitcoin does, like even if it has a 50% fault tolerance, assuming everyone's honest, and when we have a, you know, zero to 33% fault tolerance, depending on your network model, if you assume rational actors. To me, that was a great example of an outside the model failure, because traditional consensus research, just up until before the blockchain days, did not think about incentivization much. There was a little bit of thought about incentivization.

Starting point is 02:14:21 There's a couple of papers on the Byzantine Outroruist rational model, but it wasn't that deep. It was mostly operating under the assumption that, you know, this we're going to make consensus between 15 participants and these are institutions. And if something goes wrong, then, you know, if it was to we can figure out whether or not it was deliberate offline, and if they did something evil, we can sue them. Whereas, you know, in the crypto world, you can't do that, Right. And so like that whole discovery, basically, I rose just because, like, you know, the model of traditional consensus research just like didn't cover the responsibilities. And then once you go out of the model, those

Starting point is 02:14:56 sec, other issues do exist. Right. So, but then at the same time, like, there definitely are protocols that turn out to be insecure, that do have failures inside the model. This reminds me of the time when I think I found a bug in a proposed consensus implementation from either Bitchhairs or EOS. This happened around the end of 2017. So that was definitely inside the model because they had a very clear idea

Starting point is 02:15:24 of what they were trying to achieve. They had a very clear description. And like there's a very clear mathematical argument for why the description doesn't lead to what they're trying to achieve. But ultimately, what you're trying to achieve can never be fully described in formal language, right? Like this is the big discovery of the AI safety people,

Starting point is 02:15:42 for example, right? Just having a specification of what you want is an insanely hard problem. And the more powerful the optimizer that you're giving the instructions to, the more you have to be careful. And so I think there are these two sides. And then the other thing is that a lot of the academic approach ends up,

Starting point is 02:16:08 like, basically optimizing for other people inside of the academic system. And it doesn't really optimize for, like, curious outsiders. Whereas, like, I personally met, like, totally optimized for curious outsiders, or at least I feel like I strive to. So I guess like that's my case for why I yeah, like tends to behave in ways that, you know, occasionally traditional academic types criticize as being reckless. But I mean, on the other hands, you know, there's definitely real benefits that come from like taking a rigorous approach, especially when you know what the thing, like you know what the specification is of what you're trying to get, and like you're trying to kind of improve your way or provide protocols that actually provide that, and like you know

Starting point is 02:16:58 exactly what you're looking for. I feel like realistically, you probably want to do both kinds of analysis. And like sometimes even want to do both kinds of analysis and stages, right? Like you have, you want to do more quick and dirty things and even watch public feedback on the quick and dirty stuff and then later on you formalize it more and then you get more feedback. Like in general, I guess I feel like the norms of research in the future, like the internet has just changed so much. There's no way that it's not going,

Starting point is 02:17:28 and it's even changed like collaboration structures and like the patterns in which we work with each other. There's no way that the correct structure for collaborative research is the same as what it was 15 years ago, but like what combination of these existing components and of newly ideas it is, that's something that's totally legitimate to kind of fight it out.

Starting point is 02:17:52 I think it's great that there's different ecosystems that have different attitudes to things. I think there's a big possibility that things that the Ethereum, ways that the Ethereum ecosystem approaches some problems is totally wrong. If there's other ecosystem with different principles and they do well, that's something that we can learn from. In the spirit of the depth for search, can you comment on AI safety and some people are really worried about the existential risks of artificial intelligence. Is there something

Starting point is 02:18:19 you could say that's hopeful about how we avoid in the same kind of line of reasoning about creating former models versus kind of looking outside the model into what the real world actually is like. Is there some lessons from that we can take and map onto the AI safety world where the potentials of the technology, whether it's in autonomous weapon systems or just the paperclip problem that we can avoid AI destroying the world. So, my impression is actually that this is more of a kind of far away impression and it could be wrong, that it might even be that one of the challenges that AI is not formal enough.

Starting point is 02:19:01 Because AI does is very practitioner oriented, right? Like it's all about like, hey, I found a couple of hacks and look, I ran them and look, you know, they seem to improve classification accuracy from 0.684 to 0.773. So a lot of the time, look, there just isn't actual science behind like why this hack works and why this other hack doesn't work. You just sort of like trial and error your way into it. But I can see how that approach works.

Starting point is 02:19:29 But at the same time, that approach is not good for a legibility. For example, it's not good for understanding what the hack is actually going on, how these kinds of systems can seevably might fail. Like there is even a debate on, can take GPT-3-like things and just scale them up and their intelligence will continue to improve or is there just some types of reasoning that they're fundamentally bad at and they're not going to get good at no matter

Starting point is 02:19:57 how much you scale this exact same approach and add more hardware to it. So having, like, thinking about what's going on more explicitly, I mean, my understanding is that a big part of a I say if your research is trying to do that sort of stuff, right? Formalize. Yeah, formalize, try to improve just AI eligibility, like trying to understand, you know, if the AI makes some classification, so we can actually see like what happens and look what's going on in the AI makes some classification, so we can actually see what happens and what's going on in the middle. Whereas with traditional cryptography, it's very much not.

Starting point is 02:20:32 Well, I should quite say that. Traditional cryptography is this interesting mix of being very formal and being very informal, because it's very formal with, given these security assumptions, prove that the protocol works under these security assumptions. The voices where it's very informal is like, well, how do we even know that there isn't any efficient algorithm for factoring numbers? Yeah, we've kind of tried it for 40 years, and then so far no one's found anything better

Starting point is 02:20:58 than the general number field sieve. And like, okay fine, we'll just assume it's fine. You know, how do we know you can't find the discrete log between two olipid curve points? Like, there are a couple of decades, no one's found anything faster than like, baby step, giant step, stuff. So that's, and like there's definitely ways

Starting point is 02:21:23 in which that approach really makes sense, right? Because at least you can concentrate your analysis on a small number of building blocks. And like, you do have some intuitive reasoning about those building blocks, but like, at least there's a small number of building blocks and lots of people are looking at them. And then everything else just sort of gets formally built on top and you actually can, like mathematically reduce the security of big things to building blocks, right? Like you can have mathematical proofs that say, you know, if you make a ZK sonarck of a yes statement when in reality that statement is false, then you can use that to like extract information out of olipto curves that, you know, it completely breaks the problem

Starting point is 02:22:01 or something like that. So, ZK not because an example where formalism is beneficial. Absolutely. And so maybe you can have the same kind of stuff in the AI safety within, within AI systems that you can get, get, get a hold of some kind of aspect of the systems that you can control, right? Proveably. And then in group blockchains and cryptocurrency, I think the one area where consensus mechanisms is still more in art than a science is that these aren't just like technological systems,

Starting point is 02:22:31 they're crypto economic systems, right? And they make assumptions about people and which assumptions you can make about people is not something that you can prove with math. Right. Even just the basic 51%. Exactly. People are honest. Yeah. Can you trust the 51% honest. Can you trust the 51%?

Starting point is 02:22:46 If you can't trust the 51%, can you trust the other 49% to be able to coordinate on making their own fork? What will happen to coin prices? How do people as human beings react to these events? There's all of these assumptions. But at the same time, if you can write down the assumptions, then you can do formal things with them. I almost forgot to ask you about one

Starting point is 02:23:10 of the most exciting aspects of Ethereum. I mean, it's non-technical. I think it's a societal, it's social, which is NFTs. So what do you think about the explosion of NFTs in the recent months, especially in the art world and beyond, and what does the future look like? So this is maybe the social impact on the world, on the individual creators of all kinds. Is that something you've actually expected to see an FT's having this kind of impact. And beyond what do you think will happen in the in a digital space within FT's in virtual reality and gaming, all those kinds

Starting point is 02:23:53 of things? I was definitely surprised by like NFT is in particular. I even actually think might be on records somewhere on some tech conference panel. Like they were asking, you know, it was one of those overrated or underrated sections and ask about NFTs. And I thought, and I said, like, hey, I'd if they get NFTs or overrated. And you know, in retrospect, that turned out to be quite wrong. I think, like, I guess I just personally can't really relate to this concept of like spending a lot of money on a thing.

Starting point is 02:24:21 Like there's nothing, you know, there's no queer kind of understanding of why that thing would maintain its value. Right. Uniqueness of a thing having value. Right. Exactly. I definitely cannot really understand, you know, the psychology behind, like paying $200,000 for original art painting.

Starting point is 02:24:43 I'd be like, you know, if I had a mansion, just like give me photocopies of everything. You can hang three photocopies of the Mona Lisa. Why would even have the Mona Lisa? I think I'd probably just like have some neon cats or something. That's one thing where mathematics or theoretical computer science cannot formalize why the heck NFTs are valuable at all.

Starting point is 02:25:01 But the thing that makes me very happy about the space now that it has happened is that, I mean, this gets back to the conversation that we had at the beginning, right? Like, I'm interested in this concept of decentralized public goods funding, right? Like, I want things that are good and valuable to, as much as possible, also be things that can't, you know, economically sustain the people who produce them. Because if you don't have that, then either the public goods just don't get produced at all, or people make centralized versions that have some of the properties and try to be substitutes, but actually just like concentrate control in a very small group. And you know, both of those

Starting point is 02:25:41 things are not very nice. So the nice thing about NFTs would be, well, if you're an artist and you can just mint NFTs and this is a source of revenue, it's gonna look great. That's another stream of revenue for creative work that often does still get underfunded and that's amazing. Okay, let me ask you a weird question. We talk about Craig Wright a little bit,

Starting point is 02:26:00 but a lot of people write to me. One of two emails. One email is calling any coin outside of Bitcoin, a scam, and then the other email is saying, my favorite coin is the best coin is going to save the world. Whatever that coin is. And so I sit back and I look, I have no idea.

Starting point is 02:26:29 I try to figure out like the humans that I trust in the space, just basic human qualities. But do you think some coins are scams? Do you think some coins, maybe another way to ask it are scammier than other coins? Are people that are looking outside of the space where there's all these cryptocurrencies, supposed to figure out what is a scam and not, or how to use the right kind of language when talking about them? Because there's the harshness of the language from the Bitcoin Maximus that doesn't just say everything's a scam including Ethereum, but they use terms like shitcoin that says it's not only a scam, it's like a waste of time. I mean

Starting point is 02:27:14 every word you can use they say that, that's very harsh and then some people are just apply the word scam a little much much more conservatively and just refer to coins that legitimately are trying to scam people out of their money as scams. So what do we do with this word scam? Should it ever be applied to coins? And is it a binary thing or is it a gray area? Hmm. It's, I think it's definitely a gray area. Like there's definitely things that are really an actual we scams. Like, I mean, BitConnect would be one example of something that's a way on the scam spectrum.

Starting point is 02:27:50 Did you see there, it's 2017 promotional video, by the way. Oh, BitConnect. Yeah. Hey, hey, hey. What's up, what's up, what's up, BitConnect? This was, there was this three-bid at 48 second video. That was just of this guy making this totally crazy rad. So it was at some conference in Vietnam

Starting point is 02:28:10 where they were, of course, like trying to convince so much of people to buy this coin and they had these claims about how it would go up and value. That was definitely the peak of these pure, completely scammy coins. And you know, that was definitely really terrible. And I actually, I feel like we have a less despite cryptocurrency

Starting point is 02:28:30 as a whole being bigger. We actually have quite a bit less of that now. But then of course, there is this spectrum of things that are not completely scams and then things that are not scams and that are technically totally fine projects, but where their community is just incredibly sketchy and then all the way to, you know, things that are where the community is nice, but maybe the, what the project is just fundamentally incapable of achieving what it's trying to do or in the community doesn't realize and

Starting point is 02:28:57 then, you know, really good projects, right? So like, if you want to go a step, like, well, if that's 100% scam, then what would I call 80% scam? Bitcoin SV is one example. This is a Craig Wright's work of Bitcoin. Theoretically, it's a blockchain. It's a fork of Bitcoin. It has 512 megabyte blocks. If you really wanted to, you could use the blockchain.

Starting point is 02:29:22 It satisfies the properties that you can send transactions onto it. You can probably use it as a backup to store your files if you really wanted to just because it has so much space. It might fail, but it's the but at the same time, like, you know, as we basically said, like Craig Wright is a scammer and half the community is just totally that shit insane. So the humans of a particular cryptocurrency is what makes for a scam and not the humans at the top that have a voice guiding the community? Yeah, I think in the case of BSV, the humans they make just completely wrong and just obviously wrong claims about what BSV is capable of accomplishing and what it can say will be could accomplish.

Starting point is 02:30:12 And there's just a lot of aspects of it that make it feel like a money grab. So that's one example. And then you got to go a bit further and then you have the trunks of the world. And that's a plot, you can use it, you can do stuff on it, but at the same time, they did plagiarize the IPFS white paper, and then they had... So there's scammy qualities.

Starting point is 02:30:35 See, the thing that throws me off a lot, it's very difficult for me, is that most coins, but the ones that make me feel like are scammy, have a large community of people that are super positive about it, like, and they'll write to me. Now that said, sort of on the flip side of that, Bitcoin people are also very positive. There's some sense and the reason I was having like squinty eyes looking at Bitcoin for quite a while is like why is everyone so positive? I was getting total cult vibes. Like the ideas are not grounded in truth but are grounded in an obsession of like when you can artificially conjure up a truth,

Starting point is 02:31:28 which is why I was a little bit like worried about Bitcoin. I think I've learned a lot since then to where like I learned to separate the community from the ideas and I think Bitcoin is a revolution idea on many fronts, but still a community that's like dogmatically excited about something, whatever that is, makes me skeptical. Maybe it's just like my upbringing. But when everybody's really excited about something, it makes me skeptical. But it also makes me difficult to decide what is this camera not because some of the most exciting ideas in this world have a community of people who are excited about it right because it's I don't know. I think space exploration is super exciting and And there's people I know a lot of them that are exceptionally excited about space exploration

Starting point is 02:32:20 Does that mean it's a scam? No, so I don't know what to do with that. And so most I just try to stay away, I suppose, but it's unfortunate because I'm sure there's a lot of exciting technologies in that space. Like in the case of Bitcoin, like I would definitely not call Bitcoin a scam. Right. That's, again, right. I would not, I would, I would also not call white coin a scam. There is people who call white coin a scam because they just say, oh, look, it has no fundamental use case and the concept of being silver to Bitcoin's gold is just stupid and, you know, like, millie Bitcoin is the silver to Bitcoin's gold.

Starting point is 02:32:57 But at the same time, like, if you have these people who just, you know, they do seem to earn us to believe this and Like they are trying to just like make a like one be like when it's about as best as they can and like that's To me that's enough for it to not be a scam. Yeah that's And then so, yeah, I think the the biggest gray area is definitely between project that biggest gray areas definitely between projects that are earnest, but they have all sorts

Starting point is 02:33:29 of these different combinations of flawed qualities to them. Yeah. I mean, the ones that legitimately scam is when the key people that are at the head of the project are intentionally lying. And I think as long as the intent is to try to do good in the world even if the your actual implementation of that is flawed, I think that's not a scam. Like, you flawed ideas, it could be wrong ideas, but that's not a scam. I'm learning to navigate this space.

Starting point is 02:33:59 Yeah, it's definitely a very challenging space to navigate. I mean, you know, it's in some very challenging space to navigate. I mean, you know, it's in some ways a reflection of the world at large. Yeah. And as we've said, maybe offline that the fact that money is involved makes it a little bit more complicated that, you know, lives can be ruined by, um, by, by the choice of technologies that are taken on. So it makes it more real, more painful, more like elevated impact of this. Like imagine Mac versus PC wars,

Starting point is 02:34:34 if everyone who bought a MacBook had 10 Apple shares inside of it, and everyone who had a PC had 10 Microsoft shares inside of it, and then you had the elites who bought their Macs back in 1983 and that they spent $500 debt and now they have $40 billion. And they just think that they're these gurus who understands the future of finance and geopolitics and they make theories about why, you know, Apple is the one that's going to bring freedom to the world. And Windows is like, you know, secretly aligned with the access of evil. Oh, that's brilliant. So, yeah, this is so brilliant. So, I think the right way to think about this is we map

Starting point is 02:35:09 the some of the cryptocurrency battles into the space of like Emax versus VIM or Apple versus PC if there was some stock that came along with each each implementation of the, you know, each PC each Mac, that's fascinating. This is 100% correct, 100% correct, because then that really energizes the armies of people debating over this in a way that something without money does not. Okay, let me ask you about something really fascinating that you are also excited about, which is longevity, anti-aging.

Starting point is 02:35:42 You have donated money to the SENS foundation. So you have an interest in this whole space of lifespan research. What's your vision here? What do you hope to see in anti-aging and longevity research? I think I hope to see the concept of what of seeing your parents and grandparents die just slowly disappear from the public conscious this as an experience that happens over the course of a half a century, the same way that getting lost in a city slowly disappeared over the public consciousness over the last 15 hours that we have smart phones. The thing you have from Nick Bostrom, the essay,

Starting point is 02:36:29 have from Nick Bostrom, the essay, a pen in your Twitter, is argues that essentially that, you know, death is almost unethical. Like the fact that we don't do something about this thing that this, in the essay is, it's a dragon that keeps like murdering everybody around us, including our parents and grandparents, is like the fact that we don't try to do something aggressively about that dragon does make any sense. So you think this is a battle worth fighting, a battle for immortality or at least longevity. I'd say absolutely. And I'd say battle where I battle where we're really have started over the last five years in particular to see the first cracks of humanity. And me starting

Starting point is 02:37:14 to make things that look like the return into victories. Do you think humans can eventually live forever? And maybe as a side comment to that, what technology do you think will enable that as a genetic modification? Is it cloning? Is it uploading your mind? Define forever. Are we talking 1,000 years, a million, 10 to the 14,

Starting point is 02:37:36 10 to the 45? Well, let's start as I tweeted today, eventually everything, the universe will be filled with super massive black holes. So that that forever maybe like tracking to work. We'll have we'll have 10, 11, 16 years to figure it out. Yes. Yeah, maybe travel between between the multiverse, between the different universes, the multiverse. for the universe, the multiverse. I mean, but forever meaning like, you know, millennia.

Starting point is 02:38:08 Hmm. I definitely think that we can get there. I definitely think that it's the sort of thing that's going to take an insanely huge amount of work. And I definitely think it's the sort of thing where once we figure out the first crop of problems and people start living to 150, we'll just realize that there's 10 other problems that kill you half a

Starting point is 02:38:29 solely and we'll have to do more work. But the good news is that this is Aubrey's one-genities, escape velocity argument that if you get everyone to live to 150 now, then you have half a century to fix to all those other problems as well. So, I'm optimistic for that reason, I think. You definitely do not want to underestimate human ingenuity, especially over the long term, just to look at what happens to computers between the NEAC in 1950 and where we're around in 2020, right?

Starting point is 02:38:59 That's a span of 70 years. So, both of us, I think, with, you know, just present day technology, you know, I have at least 70 more years to left. So just like you mentioned, what kind of sea change will happen in biomedicine during that time. And the other thing that made me optimistic is that I actually think COVID has been this kind of event

Starting point is 02:39:21 that's really a kind of pushed biomedicine. And especially like activist approaches to biomedicine really into the public consciousness, right? Like it basically, it's put people into this mindset that, you know, wait, but like, you know, it's not just like, you know, the bits and tweets that are going to save the world. The bio is actually super important and huge. Ultimately, what's ending the COVID basically is the vaccines and the vaccines have just been amazing. If you can take that energy and also this philosophical attitude that I've noticed, and I think the way that I would describe the philosophical attitude here, this is going more depth first, is that I think the way that I kind of interpret

Starting point is 02:40:15 part of what I would call late 20th century ideology is that there is this mentality that, you know, nature is good and disruptions from nature are bad. And generally, you wanna minimize disruptions from nature. And this exists everywhere in the political spectrum. So there's nature as in literal nature. And my view is that the right wing version of that is markets has nature, right?

Starting point is 02:40:37 Markets is nature. Yeah, the way that that kind of philosophy talks about markets and the goal of not interfering with them. It is very nature-styled. And then of course, the conservative one is just like traditional culture that existed before the activists started controlling everything, as also being a kind of nature. But the 21st century attitude and like really COVID, you know, it has, it flipped a lot of minds because with COVID what's happened is that, well, no, like it's not nature is not safe, right? The default is that is like, you know, untold misery and suffering in tens of

Starting point is 02:41:17 millions of people dying. The only way out for us is through like basically human ingenuity. And that frame of mind is one that's like much more friendly to one, this other change of minds that I want to see, which is like basically treating aging as an engineering problem. Right? Like the default is all 7.8 billion human beings that are currently on this earth are gonna die and they're gonna live their last decade of life in debilitating pain.

Starting point is 02:41:48 And the only way to stop that is human ingenuity. And we don't have that solution yet, but if we work hard, we will. And more and more people on the biology side, computational biology, are basically converting the mess of the human biology into an engineering problem. And once that conversion is happening, looking at the genetical, the proteins, all those kinds of things, once that conversion happens, you can now apply the tools that we know how to solve engineering problems to solve and get that way.

Starting point is 02:42:17 And then there's also the other version, which is, you know, why do we romanticize this meat vehicle that ultimately is just the thing that carries the brain Maybe we can more and more convert ourselves into the digital realm This is where like neural link. Yeah, I have the brain computer interfaces and then achieve immortality in the space of information And the digital space versus the biology space that's stuff's interesting to I agree I mean, I think you know We we have enough resources

Starting point is 02:42:45 and we should just try all the payroll tracks. You know, it's great that we have people just trying to make our bodies work. It's great that we have people trying to upload, improve brain scanning. It's also great that we have just like people improving cryonics. We could just like, you know, go to sleep in the freezer and eventually hopefully sometime in the future. You know, Halfinney is going to be able to wake up all of these, you know, anyone who gets a cryocronically frozen today will be able to wake up, but you know, that's a bad, right? That's the last resort.

Starting point is 02:43:18 And then the other interesting thing about the like extreme uploading approach is, we're excited about space. And one of the points that a lot of science or hard science fiction types make is that if you wanna explore space, that's a lot easier if you're not a human. Like one example of this is that, in the context of humans, we're talking about like,

Starting point is 02:43:42 oh, we're gonna be able to go to the moon, oh, we're gonna be able to go to Mars. But there is this project called Starshot, I believe, right? That's basically trying to send spacecraft to mini-spacecrafts to Alpha Centauri. And they literally believe that they're going to be able to get spacecraft over to Alpha Centauri, like four light years away by the 2060s.

Starting point is 02:44:02 No, I mean, that traveling close to the speed of light. Yeah, exactly. Like so based the way it works is you know, you have these light sales, like you basically take these as spacecraft and you shine a laser at it and the laser is insanely strong, quickly accelerated at 100 Gs for or I think it was 10,000 Gs until it gets to 20% of the speed of light and then you know, it goes on your merry way, right? So if you want to be in like

Starting point is 02:44:26 personally explore the alpha centauri system within like two centuries or one century then being a robot is like by far the most practical way to do it because there's no way that a human being can survive 10,000 years. So it's definitely interesting long term, but at the same time, there's definitely a lot of psychological hang-ups and a lot of deep philosophy that we'll just have to grapple with. Well, I think that's it. I think it hangs on the topic of whether we can convert

Starting point is 02:44:58 consciousness into an engineering problem. So it's consciousness tied to our biology because the moment we can convert consciousness into a digital form, then we can send it with that light sail to the office and Tari. Until then a robot is not carrying anything except maybe some basic knowledge that could compete. It's not carrying the flame of human consciousness. I have high hopes for converting consciousness into an engineering problem. In fact, I think it's not as difficult as people think.

Starting point is 02:45:29 I agree with that. I'm definitely in the camp that I conscious this is a property of the algorithm and not a property of a brain structure. The other fun, the kind of philosophical things we'd have to grapple with is like once you upload yourself like you can hit control C you know like it would be wouldn't be lovely to have like 10 copies of a like experiment and then like we can just interview everyone. So this is I mean this is I have to ask this question is the difficult one which I don't think it'd be wonderful first of all. Sure. So in the following way and this has to do with immortality as well, there's something about scarcity that creates value. Or there's a bunch of philosophers, Victor Franco, Bernard Williams, Ernest Becker, they argue that death or the scarcity of life creates meaning. The reason we life is beautiful, the reason so many moments of experience of love or delicious food, all those things are made delicious because they're finite, because they end, and because

Starting point is 02:46:36 we don't have that many of them. And there's a kind of worry that if we extend the human lifespan, if we achieve a mortality, or if we got forbid, clone me multiple times, then you lose the richness of what it means to have this life, to have this experience. Is that worry you at all? Do you think there's some aspect to which death does in fact give meaning to life? I guess like the one historical parallel and this might be a bit unfair is that there have been philosophers that have said things like war gives meaning to human collectives and this struggle for supremacy between nations and races is this big driver of progress

Starting point is 02:47:20 that ensures that everyone strives to be their best. And, you know, of course, this viewpoint got into the head of a crazy Austrian guy and 20 years old or his soldiers were shooting at my grandparents. So, you know, these days we don't really have that, but yet life still feels meaningful. We've still found other ways to, or the like they're still a striving for technological progress. There's still, you know, a striving for self-improvement in general. And it turns out that, you know, you don't actually need to have existential conflicts in order to, in order to have that. Now maybe you need conflict, but we have other kinds of conflicts, right?

Starting point is 02:48:00 Like we have, you know, competition between businesses, competition between political ideologies, competition between projects. And so, you know, these are, like, whatever, whatever the psychological needs are, like, there just are substitutes for it. So I guess, like, yeah, so if we, yeah, trying to say, I feel like once we start living to the age of 200, then, like then I'm just intuitively expecting that we'll see a substitute emerge in the same way. Yeah, that will create conflicts of other sorts that lead to less human suffering than wars do. We'll just start playing Diablo 4, 5, 6, and because you die in video games, so maybe you will get some of the inkling of scarcity through the activities we partake in as opposed to our own body dying. I mean, I feel shitty when I, like you can, I remember in Diablo 3, you can play in hardcore

Starting point is 02:48:58 mode where if you die in the game, your character's dead. Maybe we'll get the richness of what we currently get from life by having little artificial versions of ourselves that die. Interesting enough, as I've just personally spent more time in this world, I've started realizing that there is a concept of real fight-knit finiteness that still exists, and it might even still be a thing that provides meaning that doesn't require anyone to actually die. Like for example, how many people from middle school or even high school, yours, do you still talk to regularly? I'm happening to close friends with four or five of them.

Starting point is 02:49:39 Okay. In my case, the answer is zero for middle school and two for high school. Wait, you're right. It dropped almost zero. Exactly school and two for high school. But you're right, right. It dropped. Exactly. We had dropped a lot, right? And so like, there's a lot of these, just like relationships that end up being very finite. A person changes their, I feel like a person changes enough of their worldview after

Starting point is 02:49:56 it's 25 years. Was it there even a study about this? Something like a person and themselves 25 years later about as different as like two different people or something like this. So, you know, like, I mean, just like you can have conflict without bloodshed, I think, you know, you can have finiteness and even, you know, the necessary sorrows of finiteness that give meaning without, like, literally anyone having their life. And hopefully, if we do extend our life, we'll figure out ways to extend the period of time where there's neuroplasticity, or we could change our worldviews continually throughout

Starting point is 02:50:33 that time, so you have these different phases of life. I thought it would be fun to hear you speak a lot of Russian. Ты по-русски говоришь? Да, конечно. Как твои русские корни помогли тебе? Это интересный вопрос. Что можно сказать по-русски об этом? Что можно сказать моих русских корнях?

Starting point is 02:50:56 Я когда просто смотрю на другие проектове, другие люди в блокчейновой, я индустрии, когда смотрю на то, что русские люди делают, то, что другие люди делать, это могу иногда чувствовать, что вот эти вот люди, которые рус, там есть что-то, что чувствуется похожее ко мне, но я не знаю как объяснить. Это, ты думаешь, что для людей, которые не спецназм, что Виталюк сказал, что там есть что-то спирт, а люди, которые в России, которые работают в Криптовалконосе, the people that are Russian that are working in the cryptocurrency world, that's a little bit different and It's something that

Starting point is 02:51:48 that connects to some kind of aspect of your own Self some kind of roots there. It's kind of interesting. Do you think that there's Does it make you sad that there's these two different worlds that are? sort of in part disconnected by the language. And I'm sure the same could be the case with China and other parts of the world, or the language slows the transmission of the beauty of the culture in a certain kind of way where you can't truly collaborate. Like you can all speak English, you're collaborating on maybe a technical level,

Starting point is 02:52:25 but you're not collaborating on the level of like some deep human connection. Do you see that being able to speak both languages? There's definitely benefits, I think, to be able to like speak multiple languages. And like once you can, right? Like you discover that, like even your mindset changes while you're in the speaking in one language versus the other like people have told me this like when I speak Russian I sound more like I guess like to the points and pragmatic when I speak Chinese I sound more cute when I speak English I'm something else. I guess there's definitely like a richness that you're missing if you're only in one of these

Starting point is 02:53:08 language bubbles. But I guess the arguments on the other side would be that if everyone spoke the same language then there would just be one bubble. This is the challenge, I think. There are actually benefits to having cultural diversity and you definitely don't want the entire world to be too conformist. And well, one of the interesting things about crypto is that it's just a culture that actually manages to somehow have its uniqueness and preserve its independence from all of these

Starting point is 02:53:41 surrounding countries despite being embedded in all of them. So it spans outside of the geographic boundaries and Language in some way does as well and then in the way these cultures these bubbles are created I mean they overlap in interesting ways. It's almost like a hierarchy and the same is the case with the crypto world There's you know, there's communities associated with each crypto currencies. There's communities associated with each cryptocurrencies, there's communities within those communities. And it's, yeah, I think like, it's definitely sad whenever these groups are fighting each other. And it's definitely good for them to, like if people can cooperate more,

Starting point is 02:54:19 but at the same time, like just having groups of people that have, different kinds of life experiences, like, you know, there's definitely something you benefit from that. So let me ask one last question. I don't think I asked you last time. There are dick-yos question about the meaning of life. You know, Dostoyevsky said, be the will save the world. Krasataspaśodmiir. Some people believe money is a big part of happiness and you've turned First of all, you've made a lot of money. You turned away a lot of money

Starting point is 02:54:51 He turned away a lot of power So you're a fascinating person to ask what do you think is meaning to life? The thing that I've realized with money as I yeah And the have experience to both having a little of it and having a lot of it is that the benefit of like you can get the most out of money if you think of it not as something that lets you do and have more things but as something that lets you worry about fewer things.

Starting point is 02:55:22 Right, like if you have, if your savings are just non-zero at all, then you don't have to worry as much about losing your job. And if you feel like you have a job that just really conflicts with your values, then if you have even six months saved up that just makes it easier for you to save, bye-bye, I'm going to do something else. If you have more money than you can not worry about what you're doing, needing to be profitable at all. Once you get more money, you can choose transportation options and fruit options that just have less hassle in your life and allow you to be a ways here. So if you, like, this aspect of just, like, reducing troubles and, like, opening up room for other things, I think, is a big part of it.

Starting point is 02:56:15 Like, if you just, if you instead think of money as being, like, this positive or this thing that, like, gives you stuff and you try to derive meaning from the stuff. I think that's much more likely to be a road to basically squandering that opportunity. I guess my philosophy is definitely more subtractive than additive there. But once you have enough money that you don't have to worry about the money, you're burdened with another question, which is of meaning. Do you think there's meaning to it all or it seems like your own life, you're trying to build cool stuff that alleviates some level of suffering in the world.

Starting point is 02:56:58 Well, I mean, one way to think about it is like think back to like how you thought about life when you were in school, right? In school, that is interesting to think about it is like think back to like how you thought about life when you were in school, right? In school, that is interesting to think about, right? Because in a lot of ways, like, it's just totally outside of bounds of the kinds of systems that are like social systems that we live in as adults, or maybe not, like maybe things like academia are intended to replicate parts of school. Like, first of all, school is very totalitarian. You have to follow the teacher's instructions. The bulk of your schedule is forced to be in particular areas.

Starting point is 02:57:33 You can control real view from leaving the grounds during this period of time, assign a lot of homework. But at the same time, also, school is a bit of a post-care city or Tokyo, and that you just don't have to worry about getting resources for yourself. And we've both lived through 12 years of that. So what does that say about us? I think in one thing of aspects obviously is that in it does like there's definitely like an easiness to living life if all of your decisions are made for you.

Starting point is 02:58:13 And one of the challenges of adulthood, I guess, is moving to this world where like all your choices are much more self directed. And you just have to learn to live and deal with that. Yeah, dealing with the burden of freedom. Yeah, that's some sense. Actually, interesting, because in some ways I feel like even my first five years of doing Ethereum things, my life was not even all that self-directed because a lot of it was just you know responding to obligations Like someone said, oh, you know come to speak at this event in Korea. Okay, you know come to speak of the thing in Taiwan

Starting point is 02:58:52 Okay, oh like we meet up for a theory I'm to launch we need You know this particular piece to be done and tested okay work on that right. We know we need some Approved for stake algorithm work on that, right? We know we need some, a proof of stake algorithm work on that. And the last year of COVID life, like basically I was like, holed up in Singapore for much of it, right? And it gave me a lot more alone time, you know, I had much less travel.

Starting point is 02:59:17 And that was definitely a very new and interesting experience for me. Would you characterize it by sadness, melancholy, hope, dreaming, like, innovative period, like how would you characterize that alone time? Some of all five, definitely some self-discovery. I definitely did, like, take this, make this very deliberate decision that, like, okay, I have this time and I'm going to actually make

Starting point is 02:59:46 something meaningful out of it. So one example of the things I did is I just actually started listening to your audio books and podcasts much more. Just this year, I basically kind of discovered that the podcast space is real for the first time I guess. Before that, there would be things that I would get interviewed for, but I was not really mentally incorporated. It did not mentally incorporate this idea

Starting point is 03:00:12 that podcast are a thing that you can go listen to. And this year I did, I'm a friend, Carl LaFlor, show one of the optimism people recommended hardcore history to me, and so I went ahead and just listened to all the hardcore histories. And that after that, like, listen to like 10 looks readbids and that a bunch of others.

Starting point is 03:00:32 And after that, I also got into audio books. Oh, I listened to the entire The Rise and Fall of the Third Reich, the whole thing 45 hours. That was fascinating. So what we ask about Dex Dan is going to love hearing this. I'm going to say it too. Do you have a do you have a period of history, whether it's Dan or in general, that you draw for your own life, like kind of thinking about the world,

Starting point is 03:00:58 about human nature that you go to? Is it World War two? Is it a wrath of the cons that get inis Khan? Is it some other more ancient history? Is it World War I? Is there something that kind of echoes with you in the voice of Dan or anyone else that you connect to? I feel like the 1930s and 40s are fascinating because they force you to really grapple with the question of where does evil come from. The mental puzzle that I've always had in my head is on the one hand, things like the Holocaust happened.

Starting point is 03:01:34 But on the other hand, if you just go in have a coffee with people, then a hundred times out of a hundred everyone just seems so nice. Exactly. Yeah, how do you reconcile the macro and the micro there, right? And that's the sort of thing that's very difficult if you don't have a lot of, I guess, the right kind of personal experience. Like, especially if your personal experience starts off being sheltered, like it was for me, right?

Starting point is 03:02:04 Like, I know the stereotype is that the nerds get bullied in school, but like actually for me, in my school experience was just being treated with kindness by everyone. And so that definitely made it harder to understand things. I remember actually being pretty blindsided when I started Ethereum, and then within six months, they're started being fights over like who would get more

Starting point is 03:02:24 shares if Ethereum turned out to be a company. And then I suggested we should just make it a be an on-profit and somehow that ended up upsetting people. So the fascinating thing for me is that I've been, obviously reading and listening to the history and then at the same time, just like observing things happening in the crypto space. And so one of my interesting more like mental intuitions that I've gotten is

Starting point is 03:02:52 that I think like most evil doesn't come out of greed. It comes out of fear. And like one example of this in Ethereum lands, right, is like think, the part of Ethereum history where I thought that the Ethereum community was at its lowest and even when I personally was at my lowest. If you go back to the Dow fork in 2016, the Dow hack happened and then we made this controversial decision to change the Ethereum protocol. And we, you know, then there was that Ethereum class exploit. And as soon as that Ethereum class exploit happened, you know, there was like a lot of anger everywhere. And there started, there started especially

Starting point is 03:03:37 being anger when the price of ETC started like taking up right. So this was the time when ether started off being $13 and Ethereum Classic started at zero, but then suddenly there was this one day when like, ETH dropped its 12.5, ETC went up to 0.5, and then they dropped more. And people were saying things like, you know, oh, this whole thing, Ethereum Classic is just a, like, a siop by, you know, the Bitcoin community and just the wealthy Bitcoiners trying to destroy Ethereum. And like in the back of my mind, I knew that that wasn't entirely true. Like there were definitely were Bitcoiners, but at the

Starting point is 03:04:12 same time, like I think blaming political, like internal diss, or blaming disagreements on foreign interference, right? Like this is a sort of thing that, you know, like country is a government's do all the time. It's a very convenient excuse, right? Because it allows you to just blame these things that are happening on the foreigners and avoid actually grappling with the facts that, well, no, actually, you have people in your very own community who just disagree with you and have a different belief. I think, no, I feel like the Ethereum community like during that time did not do a very good job of grappling with that. And if you're like, I during that time did not

Starting point is 03:04:50 do a very good job of grappling with that. And so there was a lot of like blaming the Bitcoiners. There were also even a lot of people calling for us to use trademark while I basically sue exchanges and try to prevent them from a listing Ethereum classic. To me, that was very unethical. Basically, using the government as a weapon to try to attack the other cryptocurrency and destroy it as it goes completely against them. The idea was a freedom and things that, in theory in theory, we're supposed to stand for. But in that particular time, what was happening

Starting point is 03:05:30 was that the ETC price was rising. At the same time, the ETH price was dropping in lockstep. And there are a lot of Bitcoin people basically saying, and this is the end of Ethereum. And I think a lot of people really were afraid that Ethereum would be just completely destroyed as a result of this. And so, like, they were the angry came from the fear.

Starting point is 03:05:49 Exactly. It came from the fear and that's what I like allowed people to rationalize like an abandonedment of principles that I think they would not have accepted in other circumstances. And I definitely, like, to some extent played along with this myself right now, I do definitely like, to some extent, played along with this myself, and I do definitely regret that to some extent. Well, and I definitely regret like the excess completely. But so that, and then obviously, you know, Bitcoin block size war similar sort of stuff happens. So like that insight was interesting because like it does mentally make a lot of sense, right? Like when you're actually afraid that

Starting point is 03:06:32 you know, unless you act in some way that, you know, your entire world is going to collapse. So like it's much easier to just rationalize, you know, forgetting your principles and doing whatever you have to just save the specific thing that you care about. you have to just save the specific thing that you care about. It feels like the right thing to do, the brave thing to do is in the face of fear to still have compassion, to still have love as opposed to hate. So the darkest moments, the toughest moments of human history are those where fear is everywhere. And despite that, like, the way to get out of that is through love, not giving into the fear. And again, that's the lesson that you draw from all

Starting point is 03:07:17 those moments of history. Yeah. Well, I like you have in terms of those coffee and the kindness that people have. It does seem that everybody has the capacity for evil and everybody has the capacity for love. And you just have to create mechanisms and incentives that prioritize the latter over the former. But talk like you're one of the most interesting people. I've gotten a chance to talk to. Thank you so much for talking to me. I hope we get a chance to talk again. I hope I can at least be a small part. This would be awesome in a podcast with you in Dan Carlin. That would be an awesome conversation. Thank you so much for doing so much incredible

Starting point is 03:07:59 technical innovation that inspires the computer scientists, the economists, inspires the world and what technology can do. And now with longevity, I do hope we live a very long time and play Diablo to make that long time fun. Thank you so much for talking today. Thank you to Alexis was great. When a man is denied the right to live the life he believes in, he has no choice but to become an outlaw. Thank you.

Lex Fridman Podcast - #188 – Vitalik Buterin: Ethereum 2.0

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