The Pomp Podcast - #691 Proof of Work vs. Proof of Stake with Jack Zampolin

Episode Date: October 17, 2021

Jack Zampolin is a core developer at Cosmos and a co-founder of Sommelier. In this conversation, we discuss proof of work, proof of stake, and when each is applicable for specific use cases.  ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit compassmining.io to start mining bitcoin today! ======================= AG1 by Athletic Greens, the category-leading superfood product, brings comprehensive and convenient daily nutrition to everybody. Keeping up with the research, knowing what to do, and taking a bunch of pills and capsules is hard on the stomach and hard to keep up with. To help each of us be at our best, they simplify the path to better nutrition by giving you the one thing with all the best things.                                                                                                   ONE scoop of AG1 contains 75 vitamins, minerals and whole food-sourced ingredients, including a multivitamin, multimineral, probiotic, greens superfood blend and more in one convenient daily serving. The special blend of high-quality, bioavailable ingredients in a scoop of AG1 work together to fill the nutritional gaps in your diet, support energy and focus, aid with gut health and digestion, and support a healthy immune system, - effectively replacing multiple products or pills with one healthy, delicious drink.                  To make it easy, Athletic Greens is going to give you an immune supporting FREE 1 year supply of Vitamin D AND 5 free travel packs with your first purchase if you visit athleticgreens.com/pomp today. Again, simply visit athleticgreens.com/pomp to take control of your health and give AG1 a try.

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Jack Zamplin is a core developer at Cosmos and a co-founder of Sommelier. In this conversation, we discuss proof of work, proof of stake, and when each is applicable for specific use cases. I really enjoyed this conversation with Jack, and I hope you do as well. Before we get into this episode though, I want to quickly talk about our sponsors. First up is Compass Mining. Compass Mining is the world's largest marketplace for mining hardware and hosting. With Compass, everyone can mine Bitcoin. Their team makes it easy to start mining wherever you want, at home or in one of

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Greens. Athletic Greens has a product called AG1. It's the category leading superfood product. It brings comprehensive and convenient daily nutrition to everybody. Keeping up with the research, knowing what to do, and taking a bunch of pills and capsules is hard on the stomach and hard to keep up with. To help each of us be at our best, they simplify the path to better nutrition by giving you the one thing with all the best things. One scoop of AG1 contains 75 vitamins, minerals, and whole food sourced ingredients, including a multivitamin, multimineral, probiotic, green superfood blood, and more in one convenient daily serving. The daily blend of high quality bioavailable ingredients and a scoop of AG1 work together to fill the nutritional

gaps in your diet, support energy and focus, aid with gut health and digestion, and support a immune system effectively replacing multiple products or pills with one healthy delicious drink to make it easy athletic greens is going to give you an immune supporting free one year supply of vitamin d and five free travel packs with your first purchase if you visit athletic greens.com slash pomp today again go visit athletic greens.com slash pomp to take control of your health and give AG1 a try. If it's good enough for me, it's good enough for you. So go to athleticgreens.com slash Pomp today. All right, let's get into this episode. I hope you guys enjoy this one. Anthony Pompliano runs Pomp Investments. All views of him and the guests

on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Jack here with me. Thank you so much for doing this. Hey, Pom. Thanks a lot for having me. I appreciate it. Absolutely. Let's just jump right into this. You're working on a whole bunch of stuff that I think is part of a debate around proof of work versus proof of stake, interoperability versus

kind of a fragmented ecosystem type approach. And I just want to dig into some of the explanations behind what these technologies are, or some of the mechanics and approaches. So let's start with proof of work versus proof of stake. Maybe you can highlight for folks what the difference between the two are, and then when you think that proof of stake could be valuable or effective versus times where you think that proof of work could be valuable or effective. Yeah, for sure. You know, I think that just to sort of start this conversation off, we all got into cryptocurrency through Bitcoin. And I think that proof of stake is one of those fundamental innovation, sorry, proof of work is one of those fundamental innovations that changed the way the world worked

for the better. And what proof of work was designed to do was providing a nation state resistant sort of global compute layer to provide support for the first cryptocurrency, which is Bitcoin. You know, I don't think Bitcoin and proof of work is ever going to go away. And I think it's amazing that it's grown the way that it has. And, you know, cool to see today that the U.S. is number one in mining after many, many years of not being so. So, you know, proof of work coming back from the U.S. is an exciting thing, too. But if you start looking to scale proof of work, it doesn't really make sense to have a lot more than one or maybe a few proof of work chains because all of the hash power is going to gravitate towards the strongest of

those chains. So how are we going to secure some of these other blockchains that are going to be needed to have higher transaction throughput, provide more programmability in some of these other types of systems? And proof of stake is an excellent mechanism for that. Proof of stake is essentially a much more resilient version of the compute networks that Google and Apple and all of the major tech giants use to run their internal services. But it adds an economic factor on top of it to help be able to run it on open networks. So, you know, that's kind of how I'd frame that discussion. When you think about how those large tech companies run, they explain a little bit more what you mean by this is kind of a more resilient way to do it, but a very similar way.

Yeah. So those large tech companies, you know, if you have a database, you know, back in the Oracle days, you would have one huge mainframe and you would shove all of the data into the mainframe. Now, if the power cuts out to that mainframe, the disks start to die, it becomes this single point of failure in your compute architecture and you have to start figuring out, well, how do I make sure that this is always available? The best way to do that is to split that database across multiple nodes and to have all of those nodes have the same data in them. And that is a field of research called consensus algorithms. And the first widely deployed commercial consensus algorithms were things like Raft and Paxos. And I could get real nerdy about this, but I don't

think your audience wants to hear that. But the key point there is that it scales it out among a number of different computers and enables that data to be always available. And the problem with those algorithms, the initial ones that are used in most large tech companies right now, is that if somebody corrupts one of the nodes the entire cluster can get taken down so it's not resilient against adversaries and the way that those tech companies protect those things is they keep them deep deep inside their physical data centers and use a lot of lines of defense to protect those servers another way to protect them is to make the consensus algorithm resilient to malicious actors so people looking to take down the system would have to you know buy a certain

number of votes within the system and that's basically how proof of stake works got it and so i think that this really highlights um you know kind of the main difference between proof of work versus proof of stake now in order to attack the proof of work system you would have to go and gain control of 51 of the network uh the way that you would do that is either you would have to somehow come into possession of uh 51 of the hash rate in terms of people already have it installed and you somehow you know kill them steal it confiscate it whatever and now all of a sudden you have 51 or two is you would have to attempt to try to purchase enough hardware and energy in order to bring on much more hash rate and get to that 51 given some of the limitations around

just how many uh chips are available how much mining hardware etc i think most people estimate that that's probably not possible just from like a physical logistics standpoint uh at the moment yeah maybe it changes in the future maybe it doesn't but for right now pretty difficult uh The existing miners are having enough trouble finding enough hardware. And so in this proof of stake system, I think that one of the concerns, whether it's well-founded or not, is, oh, you don't have to worry about kind of the supply chain. You don't have to worry about going finding the money. If I just come to the market and I've got a trillion dollars and there's a proof of stake network, that's something less than that. I could just buy 51 percent of the outstanding tokens or votes.

And then now all of a sudden I control the network. What is the kind of analysis of that? Is that true? Is it not true? And how do you think about kind of what mitigates that risk, if you will? Well, one thing that I would point out is it's actually two thirds. You need two thirds of the votes. So it's slightly more. The math behind proof of stake is slightly different than proof of work. But the way that I always think about this is that is kind of like buying and equipping an army and you use your servers that are the miners to go out and fight against other miners to find these blocks and i always think of uh computer systems as modeling human

systems so proof of work models the logic of sort of armies and you know nation states whereas proof of state models the logic of companies you know what is a token distribution other than a stock distribution and instead of only voting in board meetings you're voting once every five seconds for however long it takes to create the blocks. So, you know, I think for different jobs, for a nation state resistant digital currency that's available globally, proof of work is an excellent tool.

For a lot of other things, companies have proven to be very resilient to all kinds of different attacks throughout history. And they've shown the ability to manage massive economic systems. And I think proof of stake is going to prove no different. Got it. And so are there specific times

where you think the proof of stake system is more effective or more applicable versus proof of work? I know you've got some thoughts in terms of a kind of Bitcoin and resistance to potentially state attacks and things like that and proof of work being important, but maybe kind of delineate between the two. Yeah. You know, I think that a lot of these DeFi things that people are using right now are great on top of proof of stake systems. You know, we're really starting to see adoption in the, you know, the Ethereum ecosystem, but as well as the Cosmos ecosystem. We've got Osmosis, which is a great example of all of the technology that we've built over the last few years. We're working end to end. And that's a decentralized exchange.

Some of these decentralized lending protocols, things like NFTs. You know, I don't think you need a globally censorship resistant layer to provide cool profile pictures. You know, having a community run network of validator nodes that provides this really cool service to, you know, hundreds of thousands, if not millions of people globally is a much more efficient way and be cost effective way to do that. So, you know, I think that most of the applications that crypto is getting used for right now are wonderful on top of proof of stake chains. Yeah. When you start to think about the difference between proof of work and proof of stake, how do you measure kind of effectiveness or success maybe of those systems? Because I think right now, if I had to look at this and again, you know, I'm super biased. I've got kind of perspective. I have the experience and expertise I have. You have a different skill set, which may lend you to be kind of better informed about some of the nuances here is proof of work. for the most part, I think people have said, OK, yes, checks the box. This works as resistance to attack. We generally understand kind of the pros and cons of it. And for something like Bitcoin

makes a ton of sense. Go ahead and let's continue. Then my understanding is in terms a lot of these proof of stake systems and maybe not just proof of stake, but proof of time and 9000 other what appears to be kind of variations of how to do it other than proof of work that people are constantly innovating around and trying to create. Are there certain metrics you look at or milestones or anything that you kind of say like, hey, when something reaches this point, that to me means that it's been successful or effective? You know, I think we're still in the point where we as a whole crypto ecosystem are proving success and effectiveness. And I think one way of looking at that is market cap. You know, obviously, Bitcoin doing fantastic right now. That's great.

The market cap of all of the chains that are built on top of the Cosmos technology is, I'm pretty sure right now, well over $100 billion. I haven't looked at the ticker recently, but by the sort of gross monetary metrics and in proof of state, the amount of value that's secured by each individual chain is a measure of its security in the same way that hash rate is a measure of a proof of work security. um so in that way i i think we've been very successful um so far and i think that we've got a lot of work to do to kind of prove this technology out but with cosmos's key theme being interoperability one of the things that i think is really important is that we all look at crypto as this thing that we're working on together i don't really view that i have a tribe. I, you know, I work with a lot of Cosmos folks, but I work with a lot of Ethereum

folks as well. And, you know, I've got a lot of Bitcoiners who are friends. I worked at Blockstack for a year plus. So, you know, I think that this is a huge boat that we're all in together. And each of these different technologies is a piece of the puzzle that's going to bring us towards mass adoption and is going to bring into reality this world that we're all looking for that is more sovereign um more friendly towards individuals and protects our individual liberty um in a way that's deeply baked into the software as opposed to trying to trust government officials to do that so one of the things that i'm really interested in is uh if you look kind of i don't know bird's eye view at the industry right now there is bitcoin uh bitcoin is uh obviously a

technology but it has kind of a community around it has an economy around it if you will then there are others as well so you have the ethereum economy you have the ethereum uh kind of community right you have cosmos and you can go down the line uh and i frankly have lost count as to how many there are around some of them are big some of them are small and everything in between yeah tons of them uh all to varying degrees of size uh varying degrees of engagement um and then also varying degrees of success uh kind of along that as well and so one of the big questions i think that people are still trying to understand is, will we end up with highly fragmented economies and kind of communities where, you know, the Bitcoin community is off in one corner,

there's another community, another corner, there's, you know, a thousand of these things, or is there ultimately going to be interoperability? So we've seen, for example, just use the two largest assets as kind of the quintessential example. There's a lot of people have taken Bitcoin. They've wrapped it through these wrapped BTC. You raised your hand, so you're one of them. And then basically bring it into, let's say, the Ethereum community. On the same side, you have something like Sovereign, which is something I've invested in, which essentially is trying to build vertically integrated, decentralized financial applications and products. But the way that they accomplish that is they build it on top of Bitcoin, leveraging interoperability with other

ecosystems other types of technologies etc and so i frankly don't have the answer like i i've uh i used to in my uh in my earlier days used to take uh kind of i believe this is going to happen i now full well throw my hands up and say look i don't know what the future holds uh i'm actually here just to kind of learn from other people and understand what uh what they think how do you think about it like what what is the end you know kind of state of that and then along the way how you measure which direction we're actually heading in yeah you know i uh i'd like to think about this from an econ 101 angle um trade between previously closed economies results in positive some interactions for both so i think that one way to think about these different protocols is is

different trading blocks and like if you look at the wbtc protocol that is the ethereum and bitcoin trading block and that has opened up opportunities between those two previously closed economies that did not exist before. So, you know, I think one way to look at success of an interoperability protocol is to look at the total value addressable over that protocol. And, you know, I think that at the end of the day, there is going to likely be one or two of two major value transfer protocols. And it will knit together all of these previously closed economies and the ones that remain disconnected will wither. And the ones that are able to access this massive pool of liquidity from all over the world will continue to prosper and will have

actually an opportunity to prosper, whereas disconnected ones will not. Yeah. And so when you start to understand kind of how that interoperability at least is moving in that way, how do you think about the individual assets, right? So again, Bitcoin versus the Ethereum community, not in terms of like pitting them against each other, but just Bitcoin has Bitcoin as the kind of reserve asset of that community. You then have Ether as the reserve of the Ethereum community. Then you've got Cosmos and all these other ones. How do you think about those assets being able to be ported or used in other economies? Is there something built on top? Like just walk me through kind of how that works from like an execution

standpoint? Yeah, you know, I think that very quickly, we're going to move into a place where all of these different tokens kind of float away. And the end user experience is driven through stable coins and other sort of much more understandable intermediaries. And a lot of the kind of financial plumbing of swapping, you know, your Ethereum for your Bitcoin to be able to pay fees on these different networks happens automagically as you make these transactions. um so you know the world that we're living in with decentralized exchange and decentralized lending platforms is powering that and uh you know all that it takes is good user experience to sort of start driving these interactions so you know if we zoom back out and look at the world

that i'm thinking about there's thousands of these different tokens and as a user you can pick and choose your exposure, um, and seamlessly move in and out of these different positions. Got it. And so when you start to look at, um, kind of the way people use this, is it ultimately that the applications that are built on some of this, what I'll call more like infrastructure layer or layer ones, whatever kind of terminology you want to use, uh, naturally, they're all going to be built for interoperability in kind of your view of the world, or is it, uh, something where we'll still also get some folks that are just focused on one single community and vertically integrate with that?

You know, I look at this the same way I look at the internet. You know, the internet started with a bunch of research institutions connecting with each other. And that's kind of the stage that we're at right now. There's a bunch of different protocols. They're all kind of warring.

There's no consensus on which one's going to win. But there's the beginnings of the ability to seamlessly move around a large number of these different systems. And the way that the internet spread computing was not through larger and larger supercomputers that people connected to, i.e. bigger and bigger individual blockchains. It was by connecting all of the different computers and allowing them each to talk to each other as peers. And that's what we built at Cosmos with ibc it's you know we kind of took internet protocol and we said okay how would we make this be able to work between blockchains and kind of like took the tcp paper and like

you know here's a handshake here and we're going to make some packets and send them and like that's kind of how ibc works so um you know i i do see this kind of interconnection is inevitable will there be use cases for disconnected chains and disconnected communities and economies yes Of course, there always will be. But where what will we be talking about? We will be talking about things that are connected to this broader community of cryptocurrencies. Got it. And so when you think about kind of this future that we're moving towards, zoom out 2025 years. What does that look like from a user experience standpoint and in terms of what people will be able to do that? either maybe they're not able to do today or things that folks haven't thought about being

able to do given just that the technology wasn't there. See, in the same way that you throw your hands up and you say, I don't really know where this is going. You know, I, my thoughts on this stuff is like, you know, I see what's happened in the past. And then there reached a point with the internet where we were like mobile hit. And then suddenly there was this, like a bunch of stuff that nobody predicted. And, you know, you can see the sort of liquid exchange world where there's all these decentralized exchanges. As a user, you have a single interface where you're interfacing with a lot of different backend systems and managing all of your finances through that, including your interactions with the traditional financial world. And I think that

that is the sort of 20 year vision is that we move the entirety of the financial system from sort of banks and what we think of as traditional finance today over to decentralized alternatives. And, you know, that's the mission that brought me to Cosmos is migrate finance over to decentralized alternatives. And I think that that's kind of what we're in the middle of as far as what new applications that's going to enable. There's all sorts of folks working with NFTs,

which are awesome and exciting. And like I own an NFT or two, but that's not, that's not my expertise. Um, and you know, I think that a lot of these things around social tokens and there's a lot of very exciting work being done out there, but in order to make that a possibility, we need to build the pipes. And that's kind of the work that I do in my view. Got it. And so as we see that happens, what are the kind of user experiences that you think are missing today?

Or one of the things I immediately notice is when we look at kind of maybe the version one, whether it was in Bitcoin or some of these other communities, the design, the user interfaces leave a lot to be desired, just considered to kind of Web2 consumer Internet. Right. And by the way, that was true of Web2 when it first started as well. So it's not it's not surprising, but it's obviously something that needs to be fixed. How do you evaluate like, is it just let us go hire a bunch of designers and then get them working in terms of improving it or the other things that can be done? I think that there's some fundamental weaknesses that we as crypto need to tackle. Better hardware wallets, many more of them, much more understanding around that. One of my favorite things that's ever happened to me in terms of user experience is one Christmas back in 2018, I got my mom a ledger. And I said, hey, mom, I'm watching this network and I want to give you some Adams.

And she wears an iWatch and we were sitting there setting up her ledger and she's generating her mnemonic phrase and her heart rate alarm keeps going off. This stuff is scary for people. It's hard for people to understand. And there's a lot of education that we need to do around, especially keys and self-custody. that is hard. Better understanding of key sharding and things like Shabir secret sharing and a lot of this kind of underlying cryptography. There's a lot of fundamental UX work that just needs to go on there. And, you know, I think that probably most recently, and I know that this is not something that a lot of people in crypto really care about, but the Facebook Libra team did some interesting work on sort of social key recovery. I think that in your sort of 20-year question,

one of the things that I would love to see more solved and more understood is self-custody and the keys and sort of how that works and giving people the tools, giving average people the tools to be able to do this. And that's when we're going to really take the leap from a more niche product or something that people use through intermediaries into something that is truly the vision of crypto, which is this kind of self-custody, individual liberty thing at be your own bank. And like, you can do that today.

It's just real hard. Yeah. And I guess part of this too is not only do some of those ethos arrive, but what do you think is like the role of Bitcoin moving forward? Because beforehand, I don't want to put you on the spot,

but beforehand you held up a poster of Hal Finney, which looked amazing. um and uh crypto graffiti is the artist he's uh one of the early bitcoin artists incredible piece and so uh it's a print he cut he cut it out of a bunch of different credit cards and made this composite that is how he actually got one of hal's credit cards and this is his signature right here that is incredible so you you got this piece you you know very clearly stated hey look uh you came into the industry, like many people through Bitcoin, you now are working on a whole bunch of different things and trying to bring on interoperability, proof of stake, et cetera,

into existence in a material kind of successful way. What do you think the role of Bitcoin is kind of moving forward? Maybe, you know, again, in that 2025 year kind of time horizon? Yeah, you know, money is a mean. And I think that more than anything, that is what crypto is showing us over and over again. And the most powerful money meme out there is the US dollar. And I think number two is probably Bitcoin. And all of these ideas that we are delving more deeply into and the rest of the crypto industry, Bitcoin is bringing to the masses in a very real way. And that has a ton of value and that's not going to go away. And that sort of mental place that Bitcoin holds as the sort of center and beating heart of cryptocurrency, I don't think is

replaceable. So, you know, Bitcoin playing this store of value and sort of large institutional adoption and settlement role and, you know, also bringing nation states into it like El Salvador and, you know, lightning adoption. It's the Bitcoin community is continuing to innovate. I think you mentioned Sovereign. Stacks is another company that I used to work for that's building smart contracts on top of Bitcoin. You know, the innovation is happening at a much slower pace than a lot of the rest of the crypto industry. But I don't see Bitcoin going anywhere and I do see it retaining its centrality in the crypto ecosystem. For sure. And I guess part of what I'm personally most interested in is like economic impact. Right. So in the last couple of days, we've seen everything from five point four percent inflation on a CPI basis.

We saw over four million people quit their jobs in August, but we have 11 million open roles. Unemployment's over five percent. You know, you just go down the line, even to the point where there was a recent op ed in one of the major financial publications that was literally advocating for higher inflation and longer lasting inflation, which to me, you know, from my view of the world. Again, maybe I'm completely wrong and I'm a complete moron or that they're wrong. Right. Who knows what ends up being history says they're wrong. But, you know, I tend to agree, but I'm trying to be nice. And so, like, we live in this world where it's like there's madness. And when there's madness, I immediately say to, wow, there's people who are getting hurt.

I'm really interested in the economic kind of protection and also the economic opportunity or prosperity. And so when you think about that, what is the thing, whether people who are listening to this are builders, investors, entrepreneurs, whatever, what can they be doing to kind of contribute? Is it literally just keep innovating, keep building, keep kind of producing things of value? Yep. You know, I think that there's that's a really powerful statement. You just made there pop and like it brings to mind a lot of things. I think this system that we have right now in the U.S., this global monetary system that's been created, the financial policymakers have kind of run away with it and it's not accountable to voters anymore. And I think that the decision that people like myself and people like you have made is that, you know, OK, great. Like if they want to go screw that system up, we're going to go build our own and we're going to build value there and we're going to continue to work on it, continue to ship code.

you know cypherpunks write code and like if you want to help be part of the change like get out there go join a crypto startup and go start building things um you know there's i i have a number of job openings if anyone's interested um but uh yeah i think that that's like ideologically i think it's just extremely important that we build this alternative system in case the other when breaks for sure what um what can people go find the job openings that you have where can they go to uh to learn more about those opportunities um go to uh sommelier.finance i think we've got a job a couple of job listings there so uh please check that out that is uh the company that i work for right now um it's a couple of other core developers from cosmos and we're building a

ethereum to cosmos bridge which is currently in production um as well as defy applications on top of that. So basically linking DeFi applications from various different blockchains together. Got it. And so explain what the value proposition of that is in terms of once you go ahead and you link them together, does it just provide more liquidity, more kind of interoperability or what's the value? Yeah. So the first thing that we're doing is we're building tools for liquidity providers on Uniswap E3. Uniswap E3 requires a lot more active management of your liquidity within liquidity pools, it's a lot more like being a market maker in traditional markets. And what we're doing is we're building automation around that. But instead of having it just behind

a multi-sig where some random people can steal all the money out of it, we're doing that automation through a validator set that's transparent, auditable, anyone can join and be a part of it. And so, yeah, it's, you know, if we were talking a lot more about DeFi and digging deeply into DeFi, I'd love to share more about some. But I think it's kind of a tough lift for a lot of folks because you have to dig into the mechanics of Cosmos, Ethereum and Uniswap itself to really fully explain the product. But basically think of it as financial automation for pretty much anyone, really. You know, that's kind of the wonders of DeFi is that previously, you know, things like prime brokerages offer these really cool services to hedge funds and high net worth individuals. But the average user can't get those. Whereas with blockchains, we can build these services, these really cool services that knit together multiple different pieces of financial infrastructure. And we can offer those permissionlessly to anyone.

Yeah. It's really interesting when you start to think about how you can build an interface on top of the layers, right? Layer ones. And if you can make it an interoperable, the market will ultimately decide where the true value is, right? Yeah. Which is fascinating. uh what's i mean you know i think in blockchain we are fundamentally believers in the free market and another thing that you you were talking earlier about the sort of inflation and you know the protection and sort of safe haven and cryptocurrency offers like i read a brand growing up and this sounds a lot like gold sculpt in real life what's been the biggest surprise to you over the last year in uh in the industry

uh wow 2020 was crazy um you know we saw the like the bottom of the crypto industry and you know for me personally i've been building for a lot of years i i started at cosmos back in 2018 and uh you know back then we didn't have a live blockchain no one had deployed proof of stake this idea of interoperability which is what we were selling was so far away and there were so many different pieces that we had to get live and uh you know that work has kind of come to a culmination over the last year and we have this internet of blockchains interoperability protocol live it's moving billions of dollars of value um and you know that has been a really fun journey for me personally and one of the most wonderful surprises of my life yeah it's uh it's fascinating

when you start to see how the industry is moving so quickly what's been the biggest disappointment to you uh that's a great question you know i'm like i'm one of these like super positive guys so uh i don't have a whole ton of disappointments um you know it's always kind of like the market's going to like whatever the market wants and you know we've all got ideas on what we like best um but yeah i don't really have a whole ton of disappointments just it's it's incredible to kind of like see this adoption cycle come back again you know uh working in kind of relative obscurity for a bunch of years and then having a ton of people really interested in what you're doing is just great so like i don't really have a whole ton of complaints

When you think about proof of stake and interoperability, what do you think is the best argument against them? Right. Like if you kind of subscribe to the thought process of you always want to be able to argue your kind of critics argument better than them. What do you think is like the fair critique of both of those? Proof of stake leads to cartels. Proof of stake is the rule of small groups, blah, blah, blah. And, you know, like kind of, you know, it's modeling what is a company and can you have cartels form within companies? Yes, absolutely. And all of the sort of criticisms of companies are valid criticisms of proof of stake. And, you know, those things are real and we need to build better governance tooling, more transparency and better processes within these organizations to help mitigate those issues. And I think that that's one of the areas where I've been most active is in the governance of these different protocols and trying to work to make sure that we automate as much as possible, ensure that things are transparent, and ensure that people are working within the interests of the token holders in these networks.

And if that sounds a lot like somebody working in traditional corporate governance, like that's because it kind of is. Yeah. And when you think about it being, you know, I'll say replica just because the easy vernacular to use of the existing system, does that lend credibility to the argument proof of work ends up being really, really good kind of where we started the conversation for things where state attack or, you know, significant resistance against kind of being taken over or attacked in some way. things like Bitcoin and digital currency is really important. But for the other stuff, actually performance is more important in terms of like high throughput, low fees and all of that. And yes, you want it to be secure, obviously, but you're less concerned in those systems with kind of the catastrophic external, you know, state level attack versus no, we really, really need high throughput and low fees. And so that's where the proof of stake systems become effective. Yeah, I definitely agree with that. But one thing I would caveat there is like,

if somebody wanted to mount a state level attack against the Cosmos hub, that would be a extremely difficult cost, potentially billions of dollars and would have to span hundreds of different jurisdictions. So it's not like somebody can show up and turn a key and like attack these systems. It would have to be a long-term sustained attack over the course of months, if not years.

Yeah. It's it's, it's crazy to me to kind of just think through how so much game theory is at play. And the short answer is nobody knows until it all plays out. Right. We're going to find out. Absolutely. Absolutely. And you know like I remember prior to launching the Cosmos Hub, we basically all the engineering team did was sit and talk about different potential attacks on proof of stake in the specific system that we were

building. And that period was so, so fun. um and i love it and you know there's a lot of github issues and write-ups of some of these different attacks that people have thought up and a lot of them are really creative really really cool um but you know what gave me confidence in launching the system and you know there's a video of me in a bow tie like watching the first block and i go completely apeshit but uh it's what gave me the confidence to launch the system is when you sit down and practically think that with a couple of hundred, well, I think we've got 150 on the Cosmos Hub right now, 150 validators that are geographically distributed, what would really be required to take down the network? And think about

it from a practical perspective. And the answer is, it's really hard. And that this protocol and this proof of safety system that we built offers a lot of very, very strong assurances for users. And that was what kind of gave me the confidence to go ahead and launch the system. Where can people learn more about actually what you're building and follow you on Twitter? Yeah, I'm at Jack underscore Zamplin on Twitter. And I've got two things that I'm building. The main one is sommelier finance. And that is, as I was talking about earlier, providing tooling for liquidity providers across the interchain. And that is a really interesting project. We've got a lot of stuff happening there. We're going to be at the conference in Lisbon

starting in early November. So please come and see us. And then the other one is my validator company called Strange Love Ventures. And we provide consulting and services as well as contributing code and work to the various protocols that we invest and work on. So those are the two main places that I am and where I would suggest folks check out what I'm working on. Awesome, man. Well, listen, thank you so much for taking the time to do this. It's fascinating to kind of watch the proof of work, proof of stake conversation play out and kind of the different reasons why somebody would want to use them. And then obviously this kind of move towards interoperability that a lot of people are working on. So I appreciate you taking the time to come

on. I highly suggest people. Can I say one thing about that? You know, I see on Twitter, a lot of Bitcoiners out there being very tribal. And, you know, I just want to speak out against that. Like I bought my first Bitcoin back in 2013. I work with a lot of people in this proof of stake world. All of them own Bitcoin. All of them got into crypto for Bitcoin. Like Bitcoin is the values that Bitcoin has are broadly shared by the rest of the industry. And I would encourage people that have bought Bitcoin to try out some of these other systems. Go to Osmosis, which is a really cool decentralized exchange on top of Cosmos, which shows how all of these pieces I've been talking about with interoperability today fit together. And, you know, make a decision for

yourself. Maybe it's not right and that's OK. But, you know, get out there and at least try some of these things. And don't be so assured that Bitcoin is the one and only thing that you ever need. And the only things built on top of Bitcoin are the one true gospel, because there's a lot of things out there. This technology is still in its infancy. And there's a lot of other things that are going to be really successful. And you're going to miss out on a lot of really fantastic investment opportunities. That's not financial advice, just FYI. But yeah, that's what I'd encourage folks and, you know, try to keep a little bit more of an open mind towards some these other systems would it be fair to follow that up and say that some of the other ecosystems

are just as tribal oh yeah i mean i tell this to the ethereum people who are tribal i tell this to the cosmos people who are tribal and you know but like this is one of the reasons i like cosmos is all of the leaders in this ecosystem are all out there saying like the same thing i'm saying like get out there and try a bunch of other stuff there's all kinds of great ideas out there and And in order to really reach the goals that we have as an industry, we're going to need to incorporate all of the best ideas from all over this industry. And there's really no other way to do it. I think that's a perfect place to end my friend.

Thank you so much for taking that time to do this. We'll definitely have to do it again in the future. Absolutely. Thanks a lot. And talk soon.