Smash Notes
12: Vitalik Buterin - The Ethereal Prince and His Virtual Machine
Speaker 1
Hello. You found the portal. I'm your host, Eric Weinstein, and I'm sitting here today with metallic Butera in the leader and founder of the Ethereum World of Crypto Currencies and Smart Contracts. Welcome to the portal. Thank
Speaker 2
you. It's good to be here, Eric.
Speaker 1
It's terrific to have you now, In general, when I see you interviewed immediately, everybody goes straight to crypto currencies in a Miriam. But one of the things that I found fascinating about your story is that in order to be a good steward of, ah, this new and emerging economics, you've actually applied yourself a great deal to standard and regular economic theory.
And I was curious. Um, if I understand correctly, you dropped out of college after a year. You're self taught and economics, but you've taken a real interest in understanding how markets in economic theory work. Is that a fair description? Yeah,
Speaker 2
I think so. And economics has been of interest for me here, definitely for a long time. I mean, when I discovered Bitcoin back in 2011 and I was still in high school, it was this kind of interesting confluence of ideas that I was already pretty attracted Thio so of open source culture. That was something that A and a good friend from high school, Christopher all I had already and if indoctrinated me was really well, I'm the of the math mathematical in cryptographic aspect, also of libertarianism in Austrian economics was kind of the zeitgeist of the big one space at the day.
And those were ideas that I definitely have found philosophically credit. You're attractive at that time and you know, those definitely curious and read a bunch of books say Yeah and read the Austrian economics going on because that's what the big when people were kind of talking about all day. Yeah, read some kind of behavioral economics literature.
A really kind of men. And she had union all of those people that just because I knew that I had to read other stuff for balance hum on. Yeah, and also economics itself is a gun in pretty mathematical and of subject. Well, kind of right. It's it's on the borderline because it's, ah, enough both mathematical and you got your curves and your derivatives and your intersections.
But also humanity is right. It's ah, really at this intersection of like both figuring out how Thio apply these models to and of specific cases and also trying to figure out well, which models air really correct in the first place. And like the first question you can't answer with math. But the second question Do you really can't and you need other kinds of thinking as well
Speaker 1
was, This is an area of my own interest because the way I see it, economics is odd in a way that very few people, I think have appreciated in that if we take what could be argued to be our two greatest ideas and scientific scientific man, let's say one would be sort of the geometric dynamics of, um, physics and economics has been constructed to be in as if physics, if you will.
And on the other hand, in inherits from the theory of selection, you could say that markets of the continuation of systems of selective pressures by other means. And so what happens when our two greatest ideas touch each other and they do it in a place which has very bizarre properties. By my way of thinking, that is, that economists are, on the one hand, very rigorous thinkers and are also very susceptible to what we might call political economy and distorted thinking.
Does that ring true? Tiu to you?
Speaker 2
Yeah, definitely. And there's definitely this. I have combination of fur. On the one hand, you have these mathematical formulas. And on the other hand, these assumptions and often like the assumptions, can be pretty Ah, pretty well hidden. And they're kind of difficult to see at first glance right in, it really can be subtle, right? So, like one of the arguments that if you're gonna miss, tend to put forward is basically like mutually beneficial transactions are are beneficial, and so, like we should not interfere with them, right? Like if I have ah, am Klein bottle and I want to sell you the Klein bottle, you're willing to pay $5.
Then I clearly valued at less than $5. You've elevated more than $5. Therefore, the transactions on net good. And like I therefore I should give you the bottle when you should give me the money. And that's what we would d'oh. But at the the reasons why that 10 sometimes breaks down looker in many ways more subtle, right? Like first you have monopoly issues, like if I'm the only person selling Klein bottles, then I might want seldom at a of higher price than you'd be willing to accept, because I want to extract more value.
And sometimes the things that matter most of society aren't things that we can transfer between people from one person to another, like Klein bottles but public goods. And, like the biggest public good of all is that it is the idea that end an idea. Well, if I have an idea and I give you the idea, I still have the idea. So it's something that once you really said, it's out there and there isn't this kind of property of that.
Speaker 1
So, you know, we paused just briefly to talk about what a public good is for sure. Yeah. Um, so public good is technically defined within economics. Many people have an intuitive idea. A something which is is you're stating has this property of inexhaustible ity. Ah, uh, and then the other attributes would be exclude ability, which is
Speaker 2
non exclude ability for
Speaker 1
not not exclude ability. Sorry. The attribute of exclude ability, um is used it to find a public good. So if something is inexhaustible and in excludable, then it has this weird property that even hardline economists would agree that the market may fail to. Price, in fact, will fail to price the value to society of that object. So there's an admission within economics that there are zones of failure
Speaker 2
Red. Well, I guess, uh, the kind of the big kind of rethinking that needs to happen is that there is a long been this kind of zeitgeist to that private goods like things that I have. And if I give it to you, I don't have it, and you have it or the norm. And public roads are a rare exception. But, like really, public rates are pretty darn important, right? Like if we didn't have public goods, then we'd be a trading sticks and the end bear pelts, and we basically still be cavemen like they're basically the like.
An
Speaker 1
army would be a public. Yeah,
Speaker 2
yeah, in or me? Well, army's air interesting, because there are kind of to us in a medium scale context, there a public good and on a large scale context or a public bad, because if everyone's armies were forced to be cut down by a factor of 10 like we'd all be better off. So economics is like, really subtle that way, especially once you have kind of two layers of scale I'd play.
Speaker 1
You're now one thing that I worry a lot about, that almost nobody seems to join me in is that in our mutual world, I don't know what to call it, um, of people who are experimenting with what I would say the mainstream would consider far out ideas like radical life extension crypto currencies is ah, you know, potentially being rivalrous with the sovereign currencies.
But in our world, we talk a lot about the abundance economy in a world of abundance. And I'm terrified of a world of abundance because, um, one of the properties that software has had is that it has replaced physical goods, and service is which have these attributes. They're not public with small files. And when a small file is not encrypted, it has the attributes of a public good and therefore value and price can can chasm.
Um, that's terrifying, because then this weird thing of markets which allows us respite from dictatorship in somebody directing our activities and allows us to self direct goes away because things can't be priced to accurately are you? Do you have any? Does that have any purchase on your thinking? Yeah,
Speaker 2
so? And I think give definitely have struck at a very important point. So I think. And if my own framing of the point is slightly different, So e, I think like, first of all, start off by thing by realizing that kind of private property and things is not something that fell out of the sky. It's a social technology, right? It's that we have the kind of norms that basically say, Oh, you can't We will create this kind of mapping from objects to people.
And if an object is maps to you, then you're allowed to do basically whatever the hell you want with it, and other people cannot do anything with it without your permission. And if that concept did not exist, then physical objects would be public roads. Right? Because if there's a Klein bottle over here, the Klein bottle would be there. But, like, really, anyone could take it.
And if you produced Klein bottles, then you're not producing something for yourself. you're producing something for pretty much from the first person who comes along and grab said
Speaker 1
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Speaker 2
So property rights right are the scent of social technology that helps make a private good economy distractible. And we could consider making so short technologies to make Paul publicly economy extractable. Right. Like the existence of public goods by itself is, and it's not good or bad, like arguably, it's even good because it means that people can cooperate with each other on such a large scales.
The bad thing is that we don't really have good tools for handling it and specifically don't have good tools for handling it that managed thio simultaneously. You avoid both not giving good results and, like basically being centralized in dictatorial. And so this is where my interest in radical exchange comes in. So this was this a movement that was started by going while a couple of years ago when he wrote this a radical markets book, and he advanced some of his proposals, like Hardberger, taxes and a quadratic voting were the ones that are one of the most popular and the end of the corps.
Another idea behind the ideas basically is like let's creates structures of kind of norms and incentives that try to have the best properties that we can get out of markets. But do do so without basically economically breaking in the way that we know of existing property rights systems do. Once you enter a world where 100 everything that you build just inherently affect millions of people.
Speaker 1
Well, this is this is an interesting perspective. You, of course, are famous for implementing this ethereum protocol. But before we ever get to computer protocols, they're sort of legal and structural protocols that we impose upon ourselves in the form of government and markets that are subordinate to government. And there's a weird way in which you may start, um, a process by which you write down rules for how society should function.
But once those rules are written down, you may discover all sorts of unintended properties of that rule set. And there's a real question. Can we actually unhook ourselves from the killer app that is capitalism or American democracy? And, ah, if we start to realize that that APP is running out of control?
Speaker 2
E. Guess, um, you know, for myself as a in a social technologist, and I definitely don't think that we should be kind of overturning entire countries with the new mechanisms overnight, I think
Speaker 1
when I wasn't insinuating
Speaker 2
no, definitely, I think like that's figuring out how to and have solved grand problems of humanity is a long term goal. But I mean, sure, it some girls are there is definite. There's little things that we can make better, right? So I and listens actually part of why I find a Cryptocurrency and and block chains interesting because they are in a lot of ways this ideal ground for its economic experimentation, of different types, Right, So like to give one concrete example and in ah, So one of the ideas that go on while and myself have come up with inner pushing forward is something called quadratic funding.
And the way that quadratic funding works is roughly this. Right, So you have a central and of pool of funding and you could imagine this coming from a government. You could imagine this coming from wealthy donors. You could imagine it just being put together by some crypto economic protocol could come from anywhere. And then you allow people thio basically set up projects and you let people say I have a project.
Here is something that I'm doing And if you like this that you can donate to me and you know what people donate the projects and then the core of the mechanism is basically that if there is a project that multiple people don't need thio, so there's some project you don't need. Thio it and someone else don't need to do it as well. Then your donation doesn't just benefit benefit you.
It also benefits the other person and the other person's donation doesn't just benefit them. It also benefits you and so to kind of counter acts, that kind of market failure. The mechanism basically says, Well, we're gonna multiply the effect of your donation by two and most by the effect of the other person's donation by two. And so now both of your incentives are kind of aligned with the whole end.
You extend this mechanism. So instead of supporting two people that supports an arbitrary number of people and you kind of calculate these subsidies across all possible pairs of people end what you get is this formula that basically says you what people don't eat the different projects you look at how many people donated and how much money have donated.
And based on this from the central pool of funding, you give this extra subsidy. And so it basically is like a market for public goods rich end In the ethereum ecosystem, there is something called I get going grants where we've basically started, like trying to use this mechanism to fund public goods inside the ethereum ecosystem. Right? So this could be implementations of the ethereum protocol that could be scaling solutions that could be wallets that could be educational resources.
And we've had a kind of test around recently with about and if $200,000 in this central matching pool and it recently finished. Then you can go to a get coin dot ceo slash grants to see the results and nearly got contributions from hundreds of people. And the results that gave were actually pretty reasonable. So
Speaker 1
in test,
Speaker 2
yeah, and and so I think Ethereum could have, ah, a lot of value asses and just being a test net bed for and decentralized governance and of decentralized of public good finding infrastructure of this kind.
Speaker 1
And I think that that that's fascinating, I guess. One of the ways in which I would understand that is, um, and when my wife, who's an economist and I talk about this stuff, we often talk about a market. Democracy has thes two voting systems. One is $1.1 vote and the other is
Speaker 2
one person, one vote,
Speaker 1
theoretically, anyway, even if that's honor only in the
Speaker 2
sky. And, like liberal democracy, does this horrible thing of like treating these as opposite poles where something is either one or the other. In the end, they're often fighting each other when really everything's a spectrum and
Speaker 1
I like that a lot. I mean, another thing that we've been discussing recently again, it's sort of drink with P. M. Melanie is thinking aboutthe Chicago approximation. You've got some reality that's incredibly nonlinear and complicated. And then, weirdly, in one of these famous instances where the map is not the territory, you take this incredibly simplified world where agents have this properties you can't even believe you would describe to a human being where you called Homo economic ous, and it's perfectly rational.
And it has all of these characteristics, like an atomic Thanh that only makes rational decisions. And then you impose that, like through law and economics programs. And suddenly you've distorted your society by taking the map as the territory so seriously that you don't realize that you're destroying something in distorting. Yeah,
Speaker 2
no, it's didn't indefinitely the It's a social. It's one approximation, and you mean we're never going to have approximations that are perfect because the world is just a little
Speaker 1
glad to hear that
Speaker 2
you and the world is just so complicated and so ah, even rapidly changing in the 21st century like approx in all approximations are bullshit. But like you have to find a couple of good ones that work reasonably well and make progress for us.
Speaker 1
And I think that one of the things that's unfairly done to CRYPTOCURRENCIES is that we expect them to solve all of the problems that already cropped up. Yes, in our forms of governance in our forms of currency and exchanging court systems, and that what we should be asking of them is to be improvements or to augment already existing systems.
Now, one of the odd things about governance is we could view you as in some sense, starting a rival virtual country that has a legal system. Because the ethereum, I don't know what to call it. Network platform protocol. Um,
Speaker 2
yeah, cat rolls, coins. And it has the right to reassign those coins.
Speaker 1
And not only that, but it has a stand in for the legal system in the form of what are called smart contracts. Um, normally a way we have this concept in governance. I guess it goes back to Veber that a government is supposed to be a monopoly on violence which is an odd definition that you recover the concept of government from monopolizing violence.
And then you you sort of unearth and unpack all of the features of government from that one generating function in some sense of crypto currency and smart contracts derive from math rather than violence.
Speaker 2
Derive from math and social consensus, Right,
Speaker 1
Love the fact that it was gonna get to that. But
Speaker 2
you know, because this is important, right? Because, like, for example, you know you have the big one wash in and then you have the light coin collection, which operates under during almost exactly the Senate. The same set of rules is the big one watchin. And yet the big Quinn block Shane has $100 million market cap in the like. Wind election has a $3 billion market cap or something like that and much less usage.
So, like, both kitchens air. Definitely not just math and technology. Math and technology are the substrate and may be in the same way that the military is like the substrate of keeping our country together. But it
Speaker 1
ended there, including police force.
Speaker 2
Exactly, But like they're the substrate. But they're not the country, right? The country is the community
Speaker 1
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I think you'll be very pleased. Well, and this goes to what I would love to get into you with love to get into with you, which is the way in which different utopian dreams collide in the space of crypto currencies. So, for example, there are some dreams that may sound more like what, uh, I assume you may be active in the effective altruism community.
Is that a possibility, Um, which tries to figure how to do the most good to do good efficiently rather than sanctimoniously. Um, there are other people who have this idea of. I just want a retreat from other human beings and I want to be left alone and I want to be taxed. I want to be told what to do. Very strong libertarian perspective. Sometimes those people are the same people.
Speaker 2
There's two kinds of libertarians. There's well, there's many ways to support libertarians the two kinds, but won't like theirs. Leave me alone type. And then there's the kind of conquer the world type right? The kind that kind of relishes seeing Ah, Fiat currency is be a destroyed and replaced by Bitcoin. And it's, ah, kind of, you know, creating 1000 a year kind of rain of sound money that so you know, I mean, I generally have this, ah, instincts that, like when someone says that like, we should impose a lot of short term disruption and harbor on the entire world for the sake of some nebulous a long term gain, that's something to be skeptical of.
But so I'm gonna line
Speaker 1
the word skeptical you're using a extreme form of understatement.
Speaker 2
Yeah, Yeah, like I guess so. I mean, I'm definitely not in in the camp that had actively relishes like Fiat currency is being destroyed. But now Anders and I definitely knew, Don't think that all Bitcoin er's do like there is some that do see it as and of something that's supposed to co exist in something that's supposed to provide a check and balance against the government's monopoly and issuing money without replacing it entirely.
So there are. There's definitely enough different visions with an individual communities. There's, ah, different visions between different communities. And it's not just visions about what Cryptocurrencies should do to the world. It's also a divisions about, like what? How cryptocurrencies should work internally and what they should do to each other.
So in that sense, I guess, like Cryptocurrency is, they're interesting and in block chains, not just because of what they can do to the world, but also just as this and of microcosm of the world all into themselves. Look, we talked about country virtual countries, but you know there's many virtual countries now there's over 1400 on coin market cap and they have some analog of job.
Speaker 1
Do you think of them as virtual country?
Speaker 2
It's you. All models are bullshit, but somewhere useful.
Speaker 1
But to the extent of the country is a sensible thing, Teoh. Yeah, yeah, yeah. Um,
so in that world where we're dealing with, um, often very radical individual is, um um um and ah, very strong sense that there is something wrong with the coercive aspect of a government. Do you worry that something that you have given birth to may start to behave in very different ways than you would ever want?
Speaker 2
Definitely. Probably the closest, um, that we have foreseen to things like this happening already. It would be the the initial coin offering a boom in 2017 and 2018 in, like, basically what happened there was that people saw that Cryptocurrency is are something that could potentially had a very high value. And so people started saying, Oh, like I'm I'm raising money like anyone come and give me $50 million I'm gonna build a Cryptocurrency, and I'm gonna make it great.
And I'll turn your $50 million into 50 billion Glenn Guaranteed. And this, like
it's complicated right, because I mean, on the one hand, the possibility of of raising money and using it to fund Cryptocurrency developments like it's it did a lot of good right begin, like in general, like the open source said Community. It's an it kind of acutely suffers from this Hanna public goods challenge that we talked about because they know been sort of software, is a very public good and agree saw some very public.
And if splats involving open source software being under maintains, like the Cloudflare and of issues a couple years back when it turned out that an open SSL library was like, really, really under maintained, despite billions of dollars of value, depending on it ends with Cryptocurrency. Suddenly you could make things that are completely open source that threw coins do have a funding mechanism and you know this has message massively accelerated.
The development of many kinds of cryptography is your knowledge, proofs and peer to peer networking a lot of other things, but at this, on the other hand, like it's also given rise to and it's kind of speculation, and in many cases the projects turned out to be all right, fraudulent rich,
Speaker 1
but it is a really delicious and weird situation. I haven't asked you about it yet, but you're I presume that your net worth crashed a great deal, got run up and then came came back dead. And were you happy in any way about that?
Speaker 2
Relieved? Relieved? Yeah. So when Ah, the right at the top of the big bubble. Like in December 2017. Um, when Bitcoin was hitting 20,000 teeth was hitting 1400. And I made this tweet in the series of tweets and that kind of became somewhat famous. One in the space where basically said the Cryptocurrency space has reached half a trillion dollars does doesn't deserve it, like do the things that it's actually accomplished.
Like hold a candle to the promise says that the market is ascribing to it. And I mean, the subtext of my answer is not yet. And that was proven very right A fairly quickly And
Speaker 1
but you didn't short it, did you?
Speaker 2
So the I did t get and get the Ethereum Foundation to sell about 70,000 east like basically at the top and that's doubled our runway now. So then there was one good decision that had a little in that had a lot of impacts, but did not short.
Speaker 1
I should say that I was, um, weirdly, somewhat relieved as well. I view that the innovation of decentralized, um, transactions and the bit
you know, it's hard for me to say because I actually convinced that the Blockchain should be an intermediate state and should not be the permanent version of decentralized computing. Angry. Okay, um but I thought that that was such an amazing innovation that you could have a locally enforced yeah mechanism without a centralized authority, but with a global ledger under which I see if it is, Ah, is that the point of intellectual failure that in some sense, you're mirroring the transactions of the physical world? So, for example, um, for those listening at home who don't have a visual here, Metallic has several glass bottles next to him.
Were he to give one to me, which he shouldn't do right now. But, um, the idea would be that it would no longer be in his space and would be in mine. And that property of Adams ah has been somewhat mirrored in Bitcoin and Blockchain and Ethereum transactions. I
Speaker 2
mean, this is like the concept of money as a thing, right? The scarcity of the 21 million limits. If I give you five coins, I have five less and you have five more,
Speaker 1
right? And so the idea is that it's what you're doing is you're porting conservation laws into from the physical layer intothe logical layer,
Speaker 2
right? And yeah, And this And if to some extent kind of reflects the kind of very deeply and of Austrian economic libertarian origins of the space way better back in the end of 9 4013 days and creating like digital gold was pretty much the first book. Uh, an additional payment system was the first U. S case, but and I definitely think that, like we can and should be thinking about point systems that work in ways other than money.
Speaker 1
Well, I agree with that. And I also think that it isn't digital gold because a CZ the saying goes, you know, gold or money has no stench and that the Blockchain is this bizarre difference with the physical world and that it is a distributed ledger that may be somewhat anonymous. but still gives the history like if I hand you a dollar and you don't have access to, um, any particular means of analyzing whose DNA is on that dollar, you have no idea where it's been.
And these that is not that is violated by the current Blockchain type implementations. Yes, so it isn't a complete port of the physical world in the digital, but it is a an astounding one. And I guess I get very frustrated with the economics questions like, Well, what's good? What's it good for? Where's the killer app? I mean, we have all of whatever is left of human civilization to figure out what this thing is meant to do, and I'm not very worried that we're not going to figure it out.
I mean, we're gonna figure it out sooner or later, because a conservation lawn digital space is just too valuable. Is that wrong?
You worried at all about the search for like I I just hate this question, you know, where's the where's the killer app? And I'm thinking shell out, man, this is an astounding intellectual achievement. Is that wrong?
Speaker 2
Yeah, and I think there's definitely yeah and ah, long time to go, and I think the UPS will come and there's the ones that are coming right now are basically a kind of financial. But I think I mean that scent of true just in part because the finance, the existing financial system, is just, like, so ready and waiting there to be disrupted.
Event in the long term, like theirs there. Then there's
Speaker 1
is disrupted in a polite term for destroyed, you choose
humble. But I mean, there's something interesting here. You're 25 years old. Every bit of your adult life is a post 2008. Uh huh. And to be 25 years old and in charge of a financial ecosystem to the extent that anyone is in charge of the theory and I don't want to claim that you are sitting there running at making all these decisions, that's an astounding thing.
That that this has fallen to somebody who whose adult life is post the crash, huh?
Do you think about that at all that you don't have the same associations the rest of us do with markets? When they were claimed to be working well, like during the during the era of the great moderation, supposedly when volatility was banished. Yeah, 17. 12
Speaker 2
right? So one thing that I had if when we realized the recently that I found interesting is that they're like they're Arntz kind of two tribes here, there's to be tribes, right? And what I mean by this is that there's the tribe that says markets are are are great And there's the tribe that says markets are bad and we should move to more things that look like political mechanisms.
But then, if you look at kind of the zeitgeist, that's kind of fairly popular in the Cryptocurrency space. I mean, definitely, even still. Now, to a big extent, it's that markets are great, but the thing that existed and exists like, isn't markets. And so yes, like there's people who are pro market and who see Hadithi existing financial system as being that and there's people who are pro marketed receive the existing financial system as being like yet another.
One of the perversions of that that needs to be overcome
Speaker 1
was on because I would love to fix our democracy. I'd love to fix our markets, but I am. I have to say I believe that I have grown up in a approximately 50 year bubble, Um, which the silent generation and then the boomers presided over. And my own read is that because of their inability to figure out sufficient innovation to take over from the previously innovative system, that the world of human expertise has been almost completely contaminated by special pleading and political economy, so that many of us who don't have a particularly Austrian or libertarian bent are just sick to death, of being lied to by people claim to be Nobel Laureates in economics? Yeah, do, is it?
Yeah, 70 emotional connection to you. I feel like I'm lied to about almost almost, you know, the doctors allying, the lawyers allying. The accountants are lying. The extraction company's a relying, and it's not because of a 1,000,000 different reasons. It's because growth ran out and our whole society is predicated on a need for economic growth.
Speaker 2
Yeah, no, there's definitely enough things that are that if change Innis and a system that's just not keeping up on doesn't and doesn't understand that there is such a thing is keeping up, and it's like
s so like one like that even Glenn talks about this, Really. He talks about kind of the market markets as social technology mentality of versus the like, basically end of history mentality. And I guess, like the way that A and I definitely saw this kind of zeitgeist 10 years ago that said, even more broadly than like markets forces, other mechanisms that's like things are 80% efficient and what's worked to make them 95% efficient.
Whereas the the thing that's really going on is that things there's 3% efficient and we should work hard on making them 6% efficient. Like if you's kind of move away from the narrow context of like, I'm I have something to sell when you have something to buy, which is pretty well optimized already, Then there's lots of these and a very big things that are happening that have just completely been missed and in technology and then of network effects and oh, and just generally kind of migrating from atoms to bits are definitely all a big part of it.
Speaker 1
So let's talk about something that's a little bit funny, which is, if you're start to replace government a CZ, we're talking about it. And you see it is a monopoly on violence. You notice that very often there there's a very funny role played by organized crime. Of course, when we think about organized crime, we tend to get emotionally excited by it, for whatever reason, way make lots of movies about it.
Um, it occupies the mind is something terrifying and alluring. And they're sort of too weird aspects to organize crime, one of which is violence as a contract enforcement mechanism. In other words, you're you're gambling, so you don't have access to the regular courts system. Now you have a gambling debt, and so just the way our government would put you in jail if you, um, you know, started doing things, you couldn't fulfill all of your obligations and you were doing harm to lots of people.
You couldn't be stopped. Um, organized crime has to do something. Can't maintain jails so it can put the hurt on somebody for means of contract enforcement. So it's it's not looking to do violent things. It's looking to run illegal businesses for which there's demand, and then it has a problem of enforcement. Then there's another part of it.
which is violence Is the product, for example, extortion. Be shame If anything were to happen to this lovely business that you're running eyes, a veiled threat, pay us or we're going to do harm to your business or, you know, contract killings and the like. Are you worried that effectively by introducing parallel structures both in the form of currency and in the form of contracts, smart contracts that air the cynical anon, I guess, of the difference between Bitcoin Ethereum, right? That the killer app that is most likely to happen while the technology is still clunky and cumbersome and difficult is in the parallel space that either you are going to replace organized crime
as a place to do contractual business outside of the normal scope, which could be a benefit because organized crime still exists and is a bad thing because it uses violence and you would use math in place of it, or that it could actually be used to facilitate violence. Um, bye. You know, using ah, let's a prediction markets or something else to induce people to commit crimes where the commit er the commit er of violence has unusual information about where the violence will be committed and therefore can profit from it.
It's
Speaker 2
definitely ah worry that have I and make lots of people in the crypt of space have had since the beginning, though I do feel like at least so far have been surprised, it feels like a less of it has happens than we had
Speaker 1
expected. The thing No. Now what do you what accounts for the idea that something that can be dreamt has mostly not occurred.
Speaker 2
And I definitely have a Yeah,
Speaker 1
is maybe it's a great thing about humans that we didn't realize that we're not nearly the horrible people. We thought
Speaker 2
You and I definitely have a couple of theories about this. So one of those theory is Is that like, basically of, ah ah, lot of things that people do, and especially a lot of things that people do in the info sphere, because public goods air kind of chronically underfunded and all that rely really heavily on goodwill on dso, You know, you have goodwill that if someone if you pay someone to write some piece of species softer for your website, it's not gonna include some block disco.
Yeah, some bug that'll steal people's money or tell the FBI where you are You. If you create a system for enforcing agreements that they'll actually get enforced, then even gone intern Internet Forums Day depends on the kind of a lot of volunteer labor for just things like moderation. And if you create a group that just goes, like, fundamentally against, like the vast majority of people's values, then it's just gonna be a hard to find volunteer effort for that sort of thing and
this. So that's probably the big the big reason, I think. Why so far, we don't really see a kind of, you know, complicated, decentralized structure is being created to facilitate make bled black markets for killing people and so forth because
Speaker 1
we'll start out with something more mundane, like a numbers racket, right? So the numbers racket would probably be a much simpler application.
Speaker 2
So what do you mean by numbers racket here?
Speaker 1
Well, it's something that takes the place of a lottery where some, let's say, some naturally occurring number that would be printed in a newspaper, and presumably nobody has the influence over what number gets printed right constitutes the lotto draw.
Speaker 2
Lotteries have existed on watching since the beginning. Yeah, Nick, even There's definitely been this kind of self community of people that created these kind of provably fair Ponzi contracts where and they have a smart contracts and you can throw money in and as soon a gift, you're the ends person to throw money and ASU as soon as to end.
People throw money and you get, like, 1.9 back or something like that. And this is just, ah, fun game that people have made and participated in, even fully knowing what the economics of the thing are. So yeah, anything, things like that. It definitely happened, though I don't like, though in gambling is the sort of thing that there isn't.
There isn't this kind of 1999 9% plus consensus that it's really horrible and evil, right, because, like on the one hand, like lots of people want abandoned. But on the other hand, people do it, and it's something that people see negative consequences of. But at the same time, it's something get is something that people participated and enjoy.
Whereas the men in extremely bad stuff like that, there's definitely this kind of Ah, this kind of barrier between and of things that are edgy versus things that are just so far over the edge and for things that are so far over the edge like it is, even with smart contracts and even with all of those things that still hard to coordinate those structures.
And I think like the Blockchain, the block chains inability to directly read facts about the real world could even be a saving grace here because, like because of Walk, Shane, Can'ts directly read whether or not something in the real world happened, It basically means that if you want to have some application, weather, prediction, market or something else that does,
Speaker 1
so can we say a little bit more about the problem, the intellectual problem that you're touching. So the idea is that there may be something that's very perceptible to us about the real world, but we might naively think while the computer should be able to tell whether that happened right or it didn't happen, and that that's a surprisingly difficult thing to coat up reliably so that the interface between the world of bits and bytes and the world of otherwise physical reality which often we don't realize we're thinking about subjectively, um, that it's hard to maintain that interface so that the way in which the things that have happened in the real world could be
definitely agreed upon without us any kind of adjudication inside of the digital,
Speaker 2
right? Yeah, So
Speaker 1
I don't have to say that
Speaker 2
we'll both chains are on a fundamentally programmatic medium. All they see is data that gets fed into the ends what they can simp you'd as a result of that data. And so, if you want's Thio, create a smart contract that says, if someone figures out howto what the prime factors have, a big number are paid them a reward. You can do that because prime prime factors or something that you can multiply together in verify.
But if you want STO have a smart contract that says if there's a hurricane and in three link, then pay 500 bucks, then you can't do that on the watch in itself because, like computer code has no idea what hurricanes are. It has no idea what's real. Like I said, nobody knew
Speaker 1
it. In that case, you could have ah, a designation that you know that the national
Speaker 2
correct you can you can get data from third party sources and this is the thing that
Speaker 1
else turns it into data.
Speaker 2
Exactly. This is the thing that a lot of applications are doing. But the thing that's important to keep in mind is that as soon as you do that you're are smart. Contract has no longer fully trust Lis, right? Right.
Speaker 1
So there's this concept which is like a utopian concentrate concept of a trust lis legal system so that you don't have the messiness of humans anywhere in the system. And you can have complete faith in cotton and confidence in the contract that you've struck.
Speaker 2
Yeah, right. And like outside of ah, prove like basically giving bounties for solving math problems like it's not something that you can 100% in chief.
Speaker 1
So I can't necessarily ensure my vacation that if if I go all the way Thio Argentina and the weather is terrible Ah, it pays out because we can't agree what terrible weather is
Speaker 2
right. Like you can create structures but made out of individual participants, they can try thio and of align incentives. Thio get people toe kind of give to give correct results when you can have complicated and of contraptions involving people giving different answers and policing each other and rewarding people who give the same answer that other people have committed to and things like this.
But, like, you can only try to approach the had, like the ideal of kind of corrects truth like you could never 100% reach it.
Speaker 1
You started Ethereum in 2014 2015
Speaker 2
um, started started end of 2013. I mean, it launched in 2015.
Speaker 1
Okay, would you say let's use launch date is an artificial share date. Would you say you are more or less excited emotionally, huh? Then you were when it started. You've now been through. You've locked some miles here. If
def
Speaker 2
definitely stood and excited. Um, I think the main difference is kind of more like definitely a kind of excited in the sense of, like, four years. We'll definite and like, I kind of as opposed to indefinite, like four years. Yeah, four years ago was about like, Hey, let's make this blood form to kind of try it Really a bunch of really cool things.
We have no idea what's gonna happen and let's just stick it out there ends now like we know things about things that people are already doing. We know things about things that people wants to do on weekends. We'll also know no more about what the limitations are. And so instead of just being this kind of extremely fuzzy dream of like, let's sticks more contracts and algorithms and kind of trust classify everything.
It's something that's kind of both Maur moderate, but also a kind of Maur seeming much more like it. I like it actually has a big chance of kind of transforming the world of precisely because that's when have moderated to some extent.
Speaker 1
So you more if I gave you false three choices. And by the way, smart people always hate these things and feel free to break the model. If I gave you a choice between saying, Are you mostly excited about the technology in the amount of innovation? Are you mostly excited about the business opportunities for yourself or you mostly excited about the way in which this could transform human life? Would you be that Would that be an easy call, or would you say I reject that decision Tree
Speaker 2
Some mix of the first in the third. Ah, I don't know. I just like the framing of business opportunities is definitely kind of never like, this is weird. I mean, the despite end of even,
Speaker 1
I get the sense that you don't love money enough.
Speaker 2
Yeah, This is true. Okay? Huh? I mean, it's weird because for a long time,
Speaker 1
you have a lot of it.
Speaker 2
Yeah, well, I have a lot of it, and it's also even weirder because, like for a long time, I subscribe. So this kind of branch of economics that basically says that, like love of money, is like the best motivation for people for people to have entered
Speaker 1
a benign Randy and,
Speaker 2
um, well, in I'd say in that area
Speaker 1
that it's what I don't get that I'll be honest. I don't I just don't get that vibe
Speaker 2
right. And, uh, there's I've definitely kind of shifted a lot over the years. I think my experience, even within the crypto space itself, has kind of trend. Given me a lot of new information to work with anymore, like the BC queen. Then this goes back to this kind of Cryptocurrency is as and a microcosm of wider society thing, right? Like if you're I basically any, like any movements, regardless of what what the movement is for what its goals are, to be succeeded needs to be sufficiently big.
And once something is sufficiently big, it needs toe have internal structure to coordinate an issue of its objectives, which means that it suffers from governance issues that suffers from public goods. The issue is, it suffers from conflicts with adjacent movements, suffers from conflicts between its own values and its and its own desire to succeed and so on and so forth and like it needs toe come up with ways.
Thio answer, like basically almost the same kinds of heart problems at the world as a whole is working on.
Speaker 1
Well, you know, it's it's interesting when I look ATT. This sort of world of people maybe had an epicenter in the Bay Area, though I think it's less true now, Um, who are trying to figure out what is the future and how do we get there? There's a very clear sense that
people's creativity and their intelligence is correlated with their financial success. But it's not very tight, and so there's like an embarrassment that, well, that person is super amazing. And then not doing all that well, this person somehow metabolized Tremendous amount.
Speaker 2
This is something that I've definitely have realized just from one of my travels. Like I've interacted with all lot of kind of super famous people in different kinds of positions, which includes, like some world leaders, and include some head of leaders of, like, fields and cryptography and it and you realize that, like people in these business business positions, they are impressive.
But they're not like super amazing God like impressive rid.
Speaker 1
Some of them are. Some of
Speaker 2
them are. But then there's also super amazing, godlike, impressive people that just don't get it. I get that much ammunition. I don't
Speaker 1
know what I'm trying to get at, You know that I think about. But if you hang around with musicians very often, you'll have somebody's a super famous musicians and you wanna know who's really good and they'll tell you something I've never heard of getting well. Is that a musician's musician? Exactly. This? Yes, right? And so, um, you know, if I if I gave the name of people who are famous for being, let's say, physicists there very often the people on television as physicists.
But they would all point to some guy doesn't give a lot of interviews and say, Well, that's the top guy
Speaker 2
Exactly like basically, the social status, like is uh, predicted by competence multiplied by like basically publicity's skill. And that's have correlated with competence for obvious reasons, Right? Like those people also know the people that have the real competent.
Speaker 1
And that's one of the things that I've always found really interesting about people who have this die hard belief that markets produced justice. Um, which is I do think that success in markets is somewhat correlated or has been with things like productivity. But it's also correlated sometimes with how predatory somebody can be or how lucky they happen to be at a particular moment.
And one of the questions that I have is, um, if you're really interested in innovation, which is what I sort of pick up. One of the main things, Um, how does something like Ethereum give us a possibility to revitalize innovation after what many of us consider a period of relative stagnancy? outside of the areas of computation communication which everybody knows have exploded.
Uh, do you think about how, if ethereum can mediate a new renaissance, a new generative age?
You haven't thought about it a little bit?
Speaker 2
Definitely. And I think their scent of ethereum as a platform for experiments in governance and public arts funding is one thing I mentioned. An education is another thing that I you gonna talk about in the end, obviously doing. And I have a lot of these blood posts on metallic Nazi and other forums and like they're one of the big challenges that if, for example, is that for in and if Internet educational resources in general there's basically two kinds, right there is, like papers and Wikipedia and basically things that are technically accurate.
But they're just, like, horribly not understand, understandable at all. And we should not be forcing people to even try reading them. And then there's Pops I literature, which is very accessible, but it's often just actively wrong and really horrible ways. And I personally, even before theory, um, like I did Bitcoin magazine, for example, like I've always tried, Thio finds this kind of middle gap this way, Thio explain Conti concepts that are technical and then expand them to a bride, a broader audience so they are more accessible.
And like this to me, has been important in part because, like I've you accessibility of information about the technology as a precondition for even the decentralization of the space. Like if the thing technically runs on 50,000 computers. But only 42 people know how it works and you're decentralization indexes and 50,000 it's 42 so that is
Speaker 1
a very nice point.
Speaker 2
Yeah, so it's trying Thio kind of improve, like even how we in the Ethereum community and of work on innovation internally. But so those are kind of things that that happened in Block shins as and as a lab for trying out new things, going to first for the Blockchain space and then potentially exported to other things. And then we can also look at hand of watch chains as something that can be used.
Thio improve and create better institutions. So, like one of you, the theorem foundations, researchers have lots and fear he actually got into Ethereum because he was looking at how to improve academic publishing and, like he saw things like, you know, the existing peer review mechanisms and how they were just a very flawed in a bunch of ways.
And he thought that like, Hey, here's potentially apply for him that we could use Thio build something that does better And that's one of his core interests and why he's even continuing to work on the technology. You
Speaker 1
know, I hadn't understood how insiders you peer review in an academic context until a finance professor got drunk at a party and said, You know that guy who's harassing you in your research and finance You don't know why he's doing so well. Why do you think he's doing so? I know, he says. We've created a system where our fees are sky high to consult, and we do this by making the number of professors in our fields small by controlling peer review and so that effectively, we're conspiracy in restraint.
Like this guy's just telling me straight out that this is a gating function to keep their consulting fees high and that this guy is going to do everything that they tell him to do, because otherwise he can't come into the club and charge these rates.
Speaker 2
That sounds about right.
Speaker 1
Right, So that one of the another killer application. So you have one potential suite of applications which have to do with facilitating illegality. Some of that might regard result in net reduction of harm because you could replace violence with math. On the other hand, um, a place where you could have a really positive effect is political economy, where by removing, um, the human ability to act badly, Um, you effectively create a much fairer, more representative world.
Exactly. Ah, what do we do? So you have an interest in in the two fields? I find Wikipedia can't explain to any normal human being our theoretical math and physics. Even biology can sort of guess what's going on because you have something concrete.
Speaker 2
But even biology, like you've gotto learn math. The deeply grok it because otherwise you're just memorizing names of chemicals. Well,
Speaker 1
but you could my I have a PhD in math. If I try to read a math paper one or two fields over from my own field, right, I will do less well with it than if I read it Biology, paper, even though I've taken no class in biology.
Speaker 2
That sounds right. Yeah, yeah, like there's a difference between the level of math that you have to know. It's you just because it's important for you as a philosopher and then and look, that's about the level of math that I think you need. Even t gonna biology to be good on economics, to be good at a lot of things right? It's understanding like principles, even things like, for example, if you have a trade off between X and why ends right now, you're optimizing entirely for ex sentence, a smooth curve.
Then, if he wants a little bit of why, then you can get your first bit of why it almost like zero cost of X right? And that's just a proper like it's a property of continuous functions that from the maximum of the derivative, starts at zero. And if you kind of just deep, we kind of mentally grok about like a couple 100 of these facts to see where you're deeply kind of mentally growing like howto walk, then like you get a lot.
But then, from there, there's also like the frontiers and often mean the frontiers are less important.
Speaker 1
Well, so here's a weird thing. I don't know how to bring up when I try to understand. Crypto was a space. I'm always confronted by how incredibly Byzantine and impossible it is to understand all of the acronyms, all of the sub pieces of history. I mean, it's an incredibly fragmented experience in which I spend a long period of time just feeling moronic.
Isn't it odd that, like Ethereum itself suffers from this? This problem, it's hard to know what's going on.
Speaker 2
Yeah, it's definitely something that we once defects. So I mean, if you ever have suggestions on what specifically we could make more understandable, I'm always happy to hear those.
Speaker 1
Fantastic. Now, one thing that I think is really interesting is this, uh, episode that occurred in the ethereum space in which you were faced with a very serious question of leadership, having to do with an emergency, that you could have either allowed to follow the rules that had been previously specified in some sense, or could where you could interject a certain amount of human intervention.
But they're by letting people know that this was to some extent, um, not mediated only by rules and computers. Can you Can you say a little bit about this famous incident? Insure
Speaker 2
eso in 2016 there was this smart contracts that a group called Silicate launched, called the D A O and D O stands for a decentralized autonomous organization. In such charm, I came up with the bow three years before, and it basically means that you can have a smart contract to this computer program that controls digital assets And if in code, a set of rules for an organization and like you can use this kind of smart contract basically as a replacement for things like companies and so simple, I could decide to launch a Dio and their dio was intended to be basically a decentralized VC fund so people could apply the G A o would, um, vote on which projects were worth
investing in.
Speaker 1
So leaderless rule based and virtual
Speaker 2
exactly noses the hit hit all the safer punk. No, it's in the right place, okay? And the thing launched and we were all expecting it. Ah, during its kind of initial fundraising phase, which was also like an open public Blockchain process and to maybe get $5 million. But then it got five and he got 10 and I got 20. You got 50 and 100 and then the price of youth went up and I got 200.
And then when I was sitting at a friend's
Speaker 1
was, is it all alarming that it was so successful
Speaker 2
it after the 50 mark, I definitely kind of switched from excitement's the deep apprehension. But, you know, it's a contract. You little on it
Speaker 1
that you were feeling that way
Speaker 2
a bit. OK s O on a June 17th 2060 and when I was in Shanghai, a day a friend's apartment and it was about 15. 30 something. I'm in the afternoon, I, uh So I a message in one of the Skype chats that was that I was in and someone basically saying, Hey, guys, look at the Dow. It seems like there's some money coming out of it. And so I checked on the public like Explorer on the watch in, and I saw a look that it seems like about $2 million each has actually already been removed from the Dow and ah morethan Senate solely being drained over time.
And so I pinned to the core developers and I asked, Hey, is this normal? And at first I was thinking, OK, the alternative is unthinkable. There has to be a reasonable explanation for this. And
Speaker 1
you were locked into some sort of denial
Speaker 2
for you in the beginning. Yes. And the developers looked at it. And over the next half hour, as more and more people came online and started chattering with each other, it became clear that the unthinkable has actually happened. And I actually burned about 20 of my own teeth, like basically just dos ing the ethereum Blockchain itself just spamming it with transactions to try toe have slowed the attacker
Speaker 1
denial of service.
Speaker 2
Yeah, just spam the Borchin. With
Speaker 1
that, not all of my listeners will know the terms
Speaker 2
so that the Attackers transactions could not get in as quickly because the Attackers transact the attacker could only withdraw something like a couple 100 east with every transaction. So it was the sole process, like in the hopes that the developers would find some way to ply,
Speaker 1
was an intentional inefficiency or is just that it
Speaker 2
was It was not intentional.
Speaker 1
So in some weird way. The inefficiency was a good
Speaker 2
yes, it gets even weirder. There's an even bigger inefficiency that would that would prove to be an even better thing. So but then the developers, however, did not find a way to plug the hole. But the attacker voluntarily stopped after stealing about four million teeth from the dough. But in any case, this is a second inefficiency
Speaker 1
voluntarily stopped. Yeah, there was a request made
Speaker 2
known as in the attacker just stopped, okay, on end. So here's the second and bigger inefficiency. The money that was the attacker took out the four million if it did not go into the Attackers while it immediately. Instead, it went into a child smart contract. And on Lee after 35 days, could the attacker actually take that money out? And this
Speaker 1
one child's weren't contract. You mean a
Speaker 2
separate smart contractor that was created through a function call of the main Diego smart contract? Okay, so this was also not intended, right? It was just like a random quirk of the of fate that there was this big bug that was the biggest smart contract theft in history. Up until that point and it put the money into this convenient box.
We're just stay conveniently walked for 35 days where everyone could stare and look at it. LeBeau. Yeah, And the soon after this, there were a call us happening between core developers and the proposal to remedy the situation with a Blockchain fork came into play. Right? So basically, what happened here is the It
Speaker 1
was a Blockchain fork. An emotional issue for this community. Yeah. So why is this
Speaker 2
so? Well, I guess first of all,
Speaker 1
what is it
Speaker 2
exactly? So explain what? What would happen? Eso in general election focused on normal process. Right, You have. Ah, an upgrade ends. The developers of the ethereum clients implements code that basically says after block number 4370000 Stopped processing blocks according to the old rules. Start processing blocks according to the new rules, which have extra features attached.
And
Speaker 1
we're blocks air just said packages
Speaker 2
of transactions. Okay, bees. And so ever before this up, uh, these code patches air formally proposed There is this month long period of many months long period of deliberation where changes their proposed people discussed on people talk about them, and generally it's agreed that these changes are good. And so people just going to download the code and because everyone's down ordered the code.
The Borg chan after Block 4370000 photos. The's difference in better,
Speaker 1
very warm and very human process of cold logic of a machine.
Speaker 2
Exactly. End S so the Del Fork. It was also a fork. It was also a code change implemented by the developers of the clients. That is, it was pushed out through a new version of the different clients that people could download, and users went ahead and voluntarily downloaded it. And it would basically change the rules of the watch in. Except instead of changing dumper permanently, it would only do well.
A single one time change in the single one time change basically said during block 11 90 year, 0000 before processing any transactions. Take the ether that's stuck in the this child contract and move it into another contracts that could then basically refunds oodles of the victims. And so this was a very kind of manual intervention, right? It basically says, like we all agree to run code that just irregularly takes us money and just re assigns it to this other thing
Speaker 1
so that it's very weird because, you know, we always think in like a sci fi movie. That's something that you think is human, would rip off its mask and reveal itself to be a computer on. This is the reverse. Exactly. The computer faces ripped off, revealing humans behind things. Technological stack.
Speaker 2
Yes, and I mean ultimately, like people talk about creative block, Shane and mutability and, like this is this idea that basically you're not supposed to do this sort of thing. And
Speaker 1
where does that supposed to come from?
Speaker 2
Exactly? So like there's there's definitely a sense in which it exists technologically, because, like actually pulling off one of these forks is incredibly hard. And, for example, if it was not the case that the money was conveniently stuck there in one nice little address for 35 days, it would basically not have been possible to do it right, because when as soon as you announced off this protocol change that says we're going to take money out of here, put it and they're the attacker could just move the money from there to a different address and basic.
We play this cat and mouse game in the attacker could win. But sometimes there is this possibility. Where you you up so that we can and just, like, do these interventions and you can just decide to stop running this code and start running this other code. And the only reason why this has not done more frequently is basically because their existence norms right in their existing norms in the watch in Community of law exam Fear.
The researcher I mentioned before and have caused Emma salvos lie and named after Nick Szabo and Mixed Double actually dislikes the moniker salvos a lot, but like it is a pretty accurate representation of kind of his beliefs, which is an the beliefs of many in the criminal community, which is basically that, like, even though it technically is code run by humans, we should act as though it is code not run by humans and because the decisional gold right gold is not run by humans, gold is gold.
And so if you want to make something that is like gold, then even though we're unfortunately stuck with this thing run by humans. We should, like, try as hard as we can to pretend it's not. And like this is the ideology of a lot of people in this base. And the Del Fork very much went against this ideology. And so even though, in my opinion, like having norms that you can't just like going at it, whatever you want is valuable.
But like when Soma such a large fraction of the ecosystem is at stake, it's worth rethinking things, but like other people were and even more rigid in this regard. And so there was this kind of sport in the community, and a portion of the community actually did not down while the updates right. A portion of the community did not download these code patches and implement the fork, and they just said We will continue running our own.
Our old chain and the old Chan has since then been called Ethereum Classic, and it runs to this day.
Speaker 1
This is a fascinating civil war in F, in essence, yes, and what I get out of this is that there's this very weird thing, which is that people get very attached to ideologies and then they come to understand why the simplistic version of that ideology can't possibly work in a warm human system. I watch this that you have you ever gone to this festival called Ephemeral, which is sort of burning man on the water.
It was It was
Speaker 2
hard of it, and I got invited to it, but I haven't had the chance to go yet.
Speaker 1
So it's kind of a libertarian Waterworld in the Sacramento Delta on. And what was interesting is that one year, um, in order to come to the festival, you had to have a lecture and you had to agree that you would receive the lecture because of problems that had happened the previous year. And you realize that these libertarians were being forced to invent governance, and rather than just anarchy, you had to have some organized system.
And so one of my questions is the is that dream of escape from the heavy hand of government. Ah, effectively, not something to be pursued inside of crypto space for the most part, because we realized that it is going to require governance and that we can't figure out a way to turn this into a completely cold and ah, methodical process. It depends on
Speaker 2
which version of the dream you subscribe to like the if the version of the dream, you subscribe, Thio said. The dream that says that we can finally use algorithms, thio I basically completely eliminate human's ability to interfere in things than make. If if your goal is to see that enforced 100% then no, you're not going to get that. If your dream is that you dislike how governments have existing governments and monopolies of violence have hegemony over this social function of coordination and enforcing structures of rules and you want there to exist in alternative, then like that's something that we can talk about it.
So if the if the dream is to augments yes and I am you, I'd argue that the blood chains have a variant of necessary role now, especially you kind of given modern hand of political trends were like they're basically is no single traditional political body that's accepted as trustworthy by the entire world, and it doesn't look like there's going to be one.
But if you're a dream ist thio and if completely over overturned things and have some simplistic notion of digital property rights as the only thing that governs behavior. Then that's something that you can try for. But you're not going to succeed.
Speaker 1
Let me try something else with you that I'm curious about. You and I are both plugged in to this weird alternate world that thinks very differently. And I had Andrew Yang in that chair and you saw that episode of the 24. Um, some people call this neurodevelopmental. It's that this is a non neuro, typical world and I would say that both you and I exhibit some indicia of not thinking along standard lines.
The thing that occurred to me is that you brought up slight star Codex, which is this website that is extremely influential in our shared world. And I was thinking about the difference between Slate star Codex and CNN in terms of sense making. Is there any way in which the Ethereum world can create a counterweight so that the neuro divergent can rest the stranglehold that seemingly the neuro typical institutional world is usedto have on sense making its scale like Is there a way of promoting another blawg in this world would be like less wrong.
Their particular thinkers that I think of as being very important, influential. I think you've given toe Aubrey de Grey in Elliot's or you'd Kowski. There's like this very different world that isn't well known. Um, and in part of you, podcasting is like pirate radio, which is a phrase I keep your son. Is that because you're Russian? Yes. What can we do? Potentially using your technology to even the playing field between corporate sense making and this kind of home brewed since making that seems to me to be oven infinitely superior level Mm, Not infinitely, but quite superior.
Speaker 2
Yeah, So I think like once again, there's kind of two aspects to kind of Blockchain tm that I think are equally valuable here. One is the technology itself, and then the other is the existing community around the technology. And I mean with the with the technology itself, and you can try toe like, creating institutions for you. Even things like funding like broadcasts, for example, like even like things like this kind of get gwen grants quadratic voting, for example, it would be a potentially a great way.
Thio of funds, media organizations that avoids the pitfalls of both, say, present Day Media, which is funded by some combination of advent of like advertising and Korbel Clickbait incentives and at the same time avoid the pitfalls of, like, basically sent essentially controlled media and create 1/3 alternative. So and like, it doesn't even have to be quadratic voting.
It could be some other kind of mechanism for funding and bought chains could be used as a base were for that. There's also of the end of watching of community as a group of people who care about the many of these kinds of ideas ends. I mean, even a lot of a theory, and people are definitely. And so Wait Star Kodak's adjacent and I feel like I've tried my best to kind of bring these worlds together and get them to talk to each other.
And then sometimes it is a challenge because there's ways in which they're similar, and there's a lot of people who are in both and and there was also ways in which they're sometimes different. But then there's there. There's differences can be a good thing.
Speaker 1
Yeah, I guess I'm concerned that in our we're coming up on an election in the US Um, and I view Fox News and The New York Times and CNN is like watching professional wrestling. Ah, it's got a very clear narrative structure before the facts even come in.
Speaker 2
Yeah, this is This is actually one of the things I've only really started noticing. Maybe in the last, like, 1 to 2 years, they it's narratives or something that, like, don't seem like you're there when you're fully inside of them. But once you and if I step outside and you start seeing that Nick, wait, these people were missing something, and they're making predictions that turn out to be materially incorrect, like there's
Speaker 1
no memory like there's no Boston.
Speaker 2
Yeah, yeah, you want, and there's no accountability at all. Then it's something that you just actively start thinking, seeking out how to move beyond Yeah, you know, I think figuring out a better have funding model for media organizations in general seems
Speaker 1
in some ways what I concerned about is that something like podcasting is almost a public good, and so it's
Speaker 2
probably a public good
Speaker 1
advertising in the one thing that red keep. I call it the business model of last resort? Yes, and we're going with an ad supported model because I don't want to disguise. We were somebody offered to endow the podcast, Not not my employer. Um, and I decided against it because I think what I really want to do is to try to figure out how to improve the business model.
We've talked about a couple of different variations on advertising in order to make sure that controversial but very sensible and level headed people can weather the storm. That the big problem that I keep seeing is that advertisers pull when there's a coordinated campaign to say, Drop that program or else. Yes. And there's a need for something like the Blockchain or smart contract to make sure that you can't silence people who are speaking decently just because they've pissed off a very large activist community.
Right? So do you see any way in which the block chain, for example, like I might give up advertising if I could figure out a way to fund not only this program but allied programs?
Speaker 2
So in 2011 when I was starting Bitcoin magazine, I, uh, well, it started off with, like, this one anonymous person whose name will never know who, aside from T by his Internet handle and who was just paying me five Bitcoin, which back then was $4 per article to write articles for him. And I mean, this was five times lower than a minimum wage, but I loved it because it was the higher highest wage I've ever had.
And eventually, despite paying me five times less than minimum wage, Akiba ran out of money and, like he's told me, hey, maybe a Bitcoin week. We will have to shut down. And I came up with this business model that actually ends up saving it for a few months and basically saving it all the way until a God could have poached by Bitcoin magazine.
And the business model is basically I write to articles a week and we'll publish the first paragraph of each article kind of publicly, and will say the rest of these articles is kind of hidden for ransom. And here are some Bitcoin address is, And if people can collectively come together and pay 2.5 btc to these Bitcoin, address isn't for everybody.
Yes, and then it's nice. Yeah, and it actually worked well, and it actually started raking in like much more money than Cuba had paid before. So and it's not saying like that process
Speaker 1
is totally going to say, If it's a clever it's a clever expert. Yeah,
Speaker 2
exactly. And neck to me, Mork Lover experiments as like what smart contracts are all about. So look, let's try lots of different things, and we're gonna have come upon some steps forward that are interesting.
Speaker 1
I'd love to have you come back and talk to us about other things, that other points. But let me just close by asking you a couple of questions about the mysterious origins of decentralized computing, the block chain and all of this stuff. Sure, What the hell? Why don't we know who is Satoshi is at this point where Satoshi see seemingly came up with the first really viable version of this This idea we can prove that, e I guess those those blocks have never transacted that are just a toe.
She's control, one would think, and that's a very mysterious origin story.
Speaker 2
Yeah, it surprises. A lot of people doesn't surprise you. It does. I mean, it's there's definitely not many people that have managed Thio stay anonymous kind of threw of that level of prominence given Silk Road the kind of first big round of crypto anarchist outlaw project On top of it, Quite like after about two years, Russell Birk got caught.
And I mean the tools for just continuing toe Look at things that you say until eventually you slip up and you use some word word patterns that match like word patterns that you used under your name. And then you correlate things like it's difficult to get around like I ve
Speaker 1
una bomber got away with it for a long time. The, uh, you know about the Citizens committee to investigate the FBI that pulled off this amazing heist in 1971.
Speaker 2
So in Ted rode his stuff in the 19 seventies, right? And that's also 19 7 You know, same. And now we have. We have the Internet and everyone's stuff is on. Vah is publicly available. We have machine warning. We have statistical tools.
Speaker 1
Do you think it's well known whose sister she is within a group that doesn't want to talk?
Speaker 2
No. So I and I think the I mean there's high uncertainty about this, but I think that it's Ah Jiri a likely that acceptable. She is one person.
Speaker 1
You think there is one person?
Speaker 2
Yeah, and the like. There isn't some like you're very grand conspiracy, a big
Speaker 1
thank you know, sit ocean. Not that you know who's Satoshi is, but do you think
Speaker 2
I think it's someone I know personally? Um, so if I had to pick one person and the and I'm
Speaker 1
not asking you to out that you can say it,
Speaker 2
you'll say it. It's it's not an uncommon opinion. If I if I had to, like, get my wife on one person in health any basically because in how was around in the early days, he clearly understood what was going on here. Clearly participated since the beginning, and he also died at the exact time. Basically, that's it. There she disappeared, and so there's a lot of these kind of coincidences in his favor.
But then he's the one person I did bet on if I had to bet on someone. But it also bet against Hamlet gets well under 50% so it's
Speaker 1
a pretty good caper.
Speaker 2
Yeah, and there's there's definitely a significant chance that it's like someone who's still in the in the curvature of space somewhere that I've met at some point, Um, or it could just be a someone we have never met and never will.
Yeah, he's done a really good job, like even just kind of setting himself up as this kind of perfect reward.
Speaker 1
Share. They?
Speaker 2
Yes, yes, I didn't know she would. She really, like impressed a lot of people.
Speaker 1
It's pretty. I find it very inspiring. One of the great intellectual feats of our time would have anonymous authorship, and the only story I know that's comparable to that is this bizarre break in story where there was a woman I believe named Judy Feingold, who was determined to take the secret to the grave. And the other people in the conspiracy left the conspiracy after the statute of limitations has run out and they started talking and then her perspective.
As we all agreed, we were never going to mention who did it. There's some desire, usually to get caught and an urge to purge.
Speaker 2
Yeah, well, that does make it more likely there's one person, right. Conspiracies get exponentially harder than where people you add.
Speaker 1
That's true. Um, it's been fantastic having you here. I want to let you know that you're welcome to come back and to talk about things that are unrelated to Ethereum and Blockchain and crypto. Because, actually, I have to say I found very inspiring. Um, your attempt to use this platform to rethink what can economics be repurposed to do? And I think that that's Ah, an unheralded potential killer app for your program.
Speaker 2
Thank you. It's been it's been good to be on care.
Speaker 1
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