#
The world is the way it is, and knowing that gives us a sense of comfort and stability.
#
There is an order to things.
#
We can understand everything, apart from the fact that we can die, which we can get conveniently
#
Everything makes sense.
#
And yeah, this gives us a predictable framework to live our lives.
#
But it is also dangerous.
#
When we take for granted things as they are, we ignore the possibility of a better world.
#
We also accept much that is wrong about the status quo.
#
Sometimes we need to step back and question everything.
#
This is especially so at a time where so much about the world is changing so fast.
#
If we open our eyes, we can see many things that are wrong that we took for granted.
#
We can also see the road ahead.
#
And even when that road is hazy, we can at least see that there is a road ahead.
#
Welcome to the Scene in the Unseen.
#
My guest today is Vitalik Buterin, who needs no introduction.
#
So all I'll say is that he is one of the most important thinkers in the world today.
#
I was at a conference recently organized by Shruti Rajgopalan, who is a mutual friend,
#
and she introduced me to Vitalik and assured him that he could trust me with a few hours
#
In return, I have promised to name one and a half children of mine after Shruti.
#
But as I intend to have zero kids, this was an easy promise to make.
#
Vitalik for me is not just a thinker about crypto, but the world at large.
#
And if you've been following him closely, you'd also see him as a political philosopher,
#
a techno geek, a renaissance man in the sense that he is curious about everything that there
#
is and questions everything, including the inevitability of death.
#
I asked my friend Ajay Shah to join me as a guest co-host for this episode, as I figured
#
he'd be able to get into the crypto weeds better than I could.
#
But this episode is not intended as a crypto primer or even a crypto deep dive.
#
Instead, it's an interesting conversation with an interesting man.
#
Before we get there though, let's take a quick commercial break.
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Hey, the music started and this sounds like a commercial, but it isn't.
#
It's a plea from me to check out my latest labor of love, a YouTube show I am co-hosting
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with my good friend, the brilliant Ajay Shah.
#
We've called it Everything is Everything.
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Every week, we'll speak for about an hour on things we care about, from the profound
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to the profane, from the exalted to the everyday.
#
We range widely across subjects and we bring multiple frames with which we try to understand
#
Please join us on our journey and please support us by subscribing to our YouTube channel at
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youtube.com slash Amit Verma, A-M-I-T-V-A-R-M-A.
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The show is called Everything is Everything.
#
Please do check it out.
#
Vitalik and Ajay, welcome to the scene and the unseen.
#
I'm looking forward to chatting a lot about your life, chatting a lot about the bigger
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questions and the ways that you've thought about the world.
#
But I want to ask a question about while you've thought a lot about currencies, while you've
#
thought a lot about even politics and political economy, to the point that I'd say that you're
#
not just someone who thinks about money, but you're also in a sense a political philosopher.
#
But I first want to ask you the question that just as we try to figure out the world and
#
challenge the conventions and figure out ways to reprogram and re-engineer the world, do
#
you think it's also possible to reprogram ourselves, which is a much harder question
#
because I find that when I think about the world at large, whether it's politics, economics
#
or whatever, I can be very rational or I can try to be very rational.
#
But when it comes to my own self, it's much harder to kind of grok.
#
It's much harder to be in control of oneself.
#
And I wonder what you think about that as a problem to solve.
#
I mean, I think it's important.
#
I think, I mean, with education, it's something that humanity has obviously been doing in
#
some form or another for thousands of years.
#
And I think it's, I mean, what else is education but reprogramming yourself, right?
#
And I think there's a lot of that that's like pretty necessary and valuable to live
#
in any kind of modern society, though I think there's a lot about the way that that's
#
done now that's very broken as well.
#
I think it's one of the challenges of the world that we're in now is I think pretty
#
much every major culture still has this mentality that education is mostly something that you
#
And at some point, maybe around age 23, you kind of stop and you, you know, quote, enter
#
the real world and you switch over to doing things.
#
But that's just like not compatible with how the world is today now, right?
#
And the way the world is today now, like new things appear every 10 years, like things
#
disappear every 10 years, entire paradigms stop being relevant every 10 years.
#
And that's, it's a world that requires constant adjustment much more.
#
Sometimes even like the tools for increasing your skills of all kinds get better, right?
#
If you think about like learning languages, like if you were in the middle of a village
#
and you wanted to learn Chinese like a hundred years ago, what would you even do, right?
#
And now you can go download Duolingo, there is podcasts, you can talk to GPT, there's
#
like 10 different things, right?
#
So that's what we have now.
#
And then I think over the next century, you know, there's this whole different topic
#
of rapid growth of technology and transhumanism eventually and, you know, like much more radical
#
ways to improve ourselves than what we've seen so far.
#
And that's something that I think we're just starting to be on the cusp of getting
#
into and it will be a pretty big transition that, like so far, I think we've just started
#
to see the beginnings of things like that.
#
And we've been continuing to get better at things like just treating diseases.
#
And I think the LK99 stuff last week overshadowed another promising discovery, which was that
#
like very early potential thing that might be really good for curing cancer.
#
And like for each one of those things, there is like, you know, similar things that affects
#
the mind as well, right?
#
And that's just going to keep growing and expanding over the next century as well.
#
So I think it's, yeah, like all of those things are definitely important and important to
#
Is there a tension between the means to think and reinvent oneself versus the desire to
#
think and learn and reinvent oneself in the old world?
#
We were all thrown in with a more heterogeneous group of people and we got more influences.
#
Is there a concern that in today's world, we are all more tribal, we are clannish, we
#
are stuck with each other in little filter bubbles?
#
The internet has enabled much greater homogenization of our worlds and our community.
#
So we may not even wake up and say, you know, I need to learn Chinese.
#
I want to add to that by pointing out that, you know, what you spoke about are the external
#
circumstances of the world that yeah, in the last 10 years, we've probably seen more change
#
than in any other 10 year period before that.
#
But I'm also thinking about our internal programming, like to me, the whole Enlightenment
#
project or the whole project of humanity is to sort of understand our own programming
#
and to reprogram ourselves that we are the only species that can do that.
#
So what Ajay was referring to, you know, the urge for power, like after all, that's why
#
states can be such a problem.
#
That is why, you know, there's a centralizing urge and all of that.
#
And I sometimes wonder if, you know, we self-examine that enough, we can learn about the outside
#
world, but what do we do about these intense impulses that take us into all these terrible
#
directions, whether it's power, tribalism, so on and so forth?
#
Yeah, I mean, I think it's not quite as simple as like, are you exposed to the outside world
#
or not, right? Because if you look at Twitter, like Twitter actually exposed people to opposing
#
perspectives all the time, right?
#
And like, if you measure it just by that simplistic perspective, it arguably did a better job
#
than pretty much anything we've ever had in history, right?
#
But at the same time, what it does is it basically exposes you to, like, basically the worst
#
versions of what the other side thinks, right?
#
And it, like, basically puts people in the frame of mind where the percentage of time
#
that they spend refining and improving sort of their own side's ideas keeps getting lower.
#
And the percentage of time that they spend feeling like they have to defend against some
#
other side and their ideas keeps getting higher, right?
#
So I think this is one of those things where it's not as simple as like who you're getting
#
exposed to and what percentage is.
#
It's like this really, you know, complicated ecological question almost, right?
#
You can have the right kind of exposure, the wrong kind of exposure, a kind of exposure
#
that's very healthy in a medium amount, but becomes unhealthy if you push it too far.
#
And then, of course, over the last 12 months or so, I think, you know, regardless of what
#
any one of us thinks of Elon, I think it's true that Twitter and X now has lost a lot
#
But what's interesting there is that it's lost a lot of legitimacy, but at the same
#
time, like, nothing has managed to become a successor, right?
#
Like, you know, first we saw Mastodon and, you know, Elon went, you know, so far as to
#
block Mastodon links for a bit, which is, like, one of the things I disagreed with personally,
#
but at the same time, like, Mastodon did not take over, right?
#
And then, you know, we saw, I guess, Zuck Twitter last month, and for a period of, like,
#
two or three days, like, it really felt like, you know, oh my god, all the important celebrities
#
and influencers are moving, but now, like, you know, we hear about it much less again.
#
So it feels like the internet is, I guess, entering a more pluralist era, and on the
#
one hand, like, that's a more bubbly era, in the sense that, like, different groups
#
are going to be seeing different things, but on the other hand, like, it's also an
#
era where, like, just one, you know, like, bad phenomenon, you know, very quickly spreading,
#
like, wildfires throughout the entire ecosystem is much less likely to happen.
#
I mean, it feels like, you know, the blogging era was one experiment, and then, you know,
#
Twitter was another experiment, and now we're entering some kind of third experiment, and
#
we'll see how that goes.
#
I mean, we'll definitely see how that ends up, like, affecting what our goals and motivations
#
are, which, like, I definitely agree as, you know, it's a really important thing to focus
#
on in addition to improving our skills.
#
I mean, I'd argue, you know, as our skills improve, it becomes even more important, right,
#
as we start to have, you know, more choice in, you know, sort of what kinds of things
#
we work on and even, you know, like, what team we're on in whatever sense, then, yeah,
#
it becomes, like, even more important to, like, have the wisdom to answer those things
#
I think the slogan of the Whole Earth catalog back in the 60s was something like, we are
#
as gods, so we might as well get used to it and start living consequentially.
#
Definitely getting closer and closer to that level, you know, if you just, like, even if
#
you think about, like, things that, like, you know, gods in ancient mythology could
#
do that were ascribed to them that were considered totally beyond humans and, you know, just
#
think about how many of them we've cracked, right, like, you know, flying, we've done
#
it, like, not even just in airplanes, like, you know, we have, you know, like jet packs
#
I mean, if we, you know, some of the more modern, I guess, you know, quote mythology
#
is if you think in the form of, you know, some of the superhero novels, which, you know,
#
it's, you know, you got the Iron Man suits, but then, like, we already have super vehicles
#
like that already, right, like, it's eternal life, you know, I'm actually optimistic that
#
over the next century we'll get, we'll actually get pretty close to that in some form, right,
#
like, it feels far away now, but if you think about the difference between what a computer
#
was in 1950, right, you know, the ENIAC and, like, a few thousand vacuum tubes and all
#
it could do is basic arithmetic and, like, you know, the Google pixel watch in 2023 and
#
you have, like, literal computers on your watch that can access the internet and, you know,
#
we've literally figured out how to make matrices that, you know, translate English into Chinese
#
and write songs then, like, a lot can happen in 70 years. Ajay often tells me that, you know,
#
we're going to live till 120 and I kind of have been skeptical about that, but I've been getting
#
less and less skeptical and, you know, you've spoken and written a lot about longevity and
#
sort of invested in it and so on and death is obviously the kind of the last frontier
#
and all of that. Tell me a little bit about sort of your learnings and your approach to it because
#
I think the instinctive human approach is that death is normalized. You assume you're going to
#
get old, you're going to die and that's it and, you know, there is the old fable of the, you know,
#
the mythical dragon and you have to, you know, build railroads and people to the, and it kind
#
of gets normalized. So how has your thinking on this sort of evolved over the years?
#
Yeah, I mean, so I first read Aubrey de Grey's book Ending Aging when I was 13 and I guess,
#
you know, thankfully at that time I did not yet have as much of an idea of what was supposed
#
to be normal and so I read it and, you know, it seemed kind of correct in terms of, like,
#
how important this morally is. It seemed like, you know, it made a strong case that
#
the science is, you know, definitely not solved but at least, you know, potentially solvable. It's
#
an engineering problem and there's lots of things that we have not engineered before but there's
#
lots of things that we have considered them, you know, impossible and then a few decades later
#
just went and done them. So the perspective just seemed like really reasonable at the time and I
#
think I became a big fan of that concept ever since. I think, you know, the way I think about
#
the philosophy, right, is like I see it as, you know, it's kind of similar to, you know,
#
things like Stockholm syndrome, right? It's like if you are in some situation and you see no
#
practical path to changing it, like it's a natural defense mechanism to just come up with reasons
#
why it's okay, right? Like I think, you know, in addition to, you know, like with death and disease
#
and all of those things, I think, you know, authoritarianism, like that's a big one where
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that happens a lot, right? Like in plenty of authority, like, you know, very authoritarian
#
countries, I mean, like lots of people think it's fine and I think a big part of the reason why people
#
think it's fine is that if you're in the environment and, you know, you see no practical
#
path to changing anything and nobody around you has seen a practical path to changing anything,
#
like what mind frame is better for keeping your sanity, right? Like one is, you know, the mind
#
frame of I'm stuck in evil hell and oh my god and things are terrible and how am I going to survive
#
this? And the second frame is like, well, you know, oh, actually it's, you know, important for
#
culture and stability or whatever and, you know, this is the best of the worlds that can be, right?
#
And like, I can totally see how for an average person there, like the second one makes more sense
#
to think, right? And for death, I think that's been, like, that's obviously been the case for
#
an entire 10,000 years, right? Like for, well, in some sense, like billions of years, right? Like
#
not all organisms, but most organisms on earth are mortal and have a fixed lifespan. Some do
#
have a really long lifespan, right? Like trees, some of them live for over 10,000 years. There's
#
like naked mole rats and certain other species where they do die of natural causes, but from
#
what we can tell their chance of death every year doesn't increase, which is interesting, right? But
#
yeah, for humans, it's just been this, you know, impossible dream. And there's all of these,
#
you know, emperors that try to go after it. And, you know, lots of people have tried to find the
#
fountain of youth in various forms and they've just always failed. And for most of history,
#
it's probably been better for people to just accept it, you know, believe in a story of some
#
better life that you'll get to afterwards. And all of those things, because there just is no route
#
to like fixing it. But I think over the next century, like we're going to enter this very
#
different world where like intuitions about what is natural and unchangeable and perhaps even
#
irresponsible to change because things are too complicated are going to be like basically correct
#
up until the point at which they're not right. And that's going to be an interesting and like
#
pretty quick transition to go through in a lot of cases. I should point out for my listeners and for
#
Ajay, you know, I mentioned the dragon, what that is about. In 2005, Nick Bostrom wrote an essay
#
called The Fable of the Dragon Tyrant. And the fable went this way that there is a village and
#
there is a dragon tyrant, which routinely slaughters people so that they do a deal with the dragon that
#
listen, every year we'll send you people in a train and you can take them and that's our sacrifice,
#
but you leave the rest of us alone. And the dragon agrees and that becomes a custom. They build the
#
railroads and whatever. And eventually over the centuries, there is this custom that, okay,
#
the old people first and the old people go first and et cetera, et cetera. And then after a couple
#
of generations, some people say, we've got to fight the dragon. We got to, you know, build something
#
that we can fight the dragon with. And people say, yeah, okay, whatever inertia takes over.
#
And eventually it happens and they kill the dragon and the dragon is dead.
#
Right? So I find it a sort of a profoundly moving fable. And it's also a fable, I think,
#
where the dragon is a lot more than death in the sense that there are so many things we've
#
normalized and we never question. We assume there must be a state, we assume there must be a fiat
#
currency. We assume that so many things in the world are a particular way that education looks
#
like this, work looks like this. And I want to sort of, before we get to kind of those larger
#
questions and all of that, I want to ask you about your childhood. Like what was your childhood,
#
like what was normal for you to get a sense of how we kind of break out of that? Like, you know,
#
you're born in Russia, early nineties, and then moved to Canada in 2000. Tell me a bit about your
#
childhood. Born in Russia, moved to Canada in 2000. Grew up in Toronto, basically. You know,
#
went to pretty normal school for a long time. I had a, I guess, pretty normal life with the
#
exception that I guess I did well at math. And I definitely like, I did poorly at having friends.
#
Like there was this whole concept that people are supposed to go to each other's houses after school
#
and I like, I never understood like how to break into that and like how to actually get invited to
#
places. And so I definitely did a lot of like first reading a bunch of math and science books,
#
then played World of Warcraft for a long time. Also started programming games for myself to play.
#
That was a piano as well. Some piano too. Yeah. Yeah. Programming games for myself to play is
#
how I actually started doing programming. Like basically went from, you know, zero to pretty
#
much being able to getting to the point where I could write things like Bitcoin wallets when
#
I would get into Bitcoin later, just by like writing better and better games and playing them
#
myself. Then in high school, I switched over from a public school to private school. There was a
#
local private school that was much better at motivating me than, you know, the local public
#
school system. Like the teachers felt like they were really passionate about the subjects that
#
they were teaching. They made an effort to make them actually interesting. At the same time, my
#
mom took me to like this math tutor every week where we would, you know, cover complicated stuff
#
and get into, you know, first factoring things like X to the four plus four. It's X squared plus
#
two X plus two times X squared minus two X plus two. That question was just somehow so memorable.
#
I still remember it. And then doing calculus and all of those things. And around that same time,
#
I remember getting into Bitcoin and I remember getting into like both Bitcoin and the whole
#
kind of political philosophy and meme flex. I remember listening to Doug Casey, who was this
#
American writer who was constantly talking about like basically how the collapse of the US dollar
#
is imminent and, you know, the US government is screwing everything up to the point where like
#
very soon there will be a hyperinflation. And like somehow that actually made me more productive.
#
Like believing that hyperinflation was imminent and that the economy would crash and that I needed
#
to like really, really make sure that I had skills so that I could even survive. Like somehow
#
that motivated me to like try much harder to learn everything that I was studying.
#
So, you know, I did and kept doing that. Lots of studying, but also slowly working into the
#
Bitcoin world. I first actually heard about Bitcoin from my dad, strangely enough. And
#
around the same time, I heard about it on a website. There was a podcast which was talking
#
about Bitcoin and it seemed cool. And the podcast at the end motivated people to like basically
#
saying like, hey, if you find this interesting, go into the Bitcoin world and like try to actually
#
participate in it. And so I took that to heart. I did. I did not have, you know, significant amounts
#
of my own money to buy Bitcoin with, but I went through the forums looking for Bitcoin jobs.
#
And I eventually found a person who was willing to pay people five Bitcoins per article, which
#
back then was $4 per article, to write articles for his blog. And at the time I was like, okay,
#
I'm earning like one sixth minimum wage, but you know, it's good work.
#
Was that an age when the bedroom PC could do decent mining?
#
It was like the very tail end of that. Yeah. So at some point later, I did some Primecoin mining on
#
my laptop. And I think in a couple of days, I earned 12 cents or something like that.
#
So yeah, very tail end of, you know, when the big CPU mining turned into first GPU mining and then
#
ASIC mining. But so I wrote these articles and then first I was writing for Bitcoin Weekly,
#
which was this person's blog. And Bitcoin Weekly ended up doing some interesting,
#
you can call it business model innovation. And that first the person, his name was Akiba,
#
he just paid me five Bitcoins per article to write articles. And then he ran out of money
#
and I came up with an idea to keep Bitcoin Weekly alive, where what we would do is every week,
#
I would publish two articles. And for both articles, we would publish only the first paragraph.
#
And then what we would say is the rest of these articles are held for ransom. Here is a Bitcoin
#
address. We will only release the article if somebody sends two and a half Bitcoins to this
#
address. This actually worked and it like kept Bitcoin Weekly alive for another couple of months.
#
Then eventually, this person from Romania, Mihai Valeriu Alisia, sent me an email and said like,
#
hey, I'm writing a, or I want to start a physical Bitcoin magazine. Do you want to join and be a
#
writer? And I'm like, wow, I get to be like a physical writer. I joined. And you know, Bitcoin
#
magazine, the website and the physical article or physical magazine, both came into existence.
#
The website much faster than the magazine, but in the magazine, you may have even seen the first
#
one. It had the anonymous mask on the cover. I wrote about 60% of the articles in the magazine,
#
but from there, it slowly continued and grew. And doing the research that I needed to write
#
the articles was my way of understanding more about the Bitcoin world, the technical aspects,
#
the political aspects, the economic aspects. But before this, help us understand your
#
relationship with college. Okay. So we're actually not yet at the point in time where I got to college,
#
but actually it's right in the middle of this. So about a year later, I finished high school,
#
entered college. I was studying computer science and coding in Racket, which was this
#
very bespoke dialect of Lisp. The computer science courses sort of intentionally used it,
#
I think, to kind of put everyone on the same level because nobody normally studies bespoke
#
Lisp dialects and doing some math number theory that actually ended up being super relevant to
#
cryptography, linear algebra and those kinds of things. So I was in a university for a total of
#
eight months and I actually enjoyed it. Waterloo was a good university. The courses were good.
#
They taught me really valuable things. But of course, after these eight months, I ended up
#
dropping out. And I actually did not decide to drop out all at once. So what happened first was
#
the University of Waterloo had this program called a co-op program, where what you can do is you can
#
study for four months, then work, and then study, and then work, and then study, and then work,
#
and you kind of cycle between those. And the idea is that you can graduate having no debt, positive
#
amount of money in your bank, and at the same time have both theoretical knowledge and really
#
valuable work skills. And the co-op job can be anything as long as it's actually relevant to
#
your work. And so what I thought was, well, I would go work for Ripple. Ripple is this company
#
building their own blockchain based on this totally different consensus mechanism. They
#
have changed a lot since then and they've taken a much more corporate and bank-oriented direction.
#
But at the time, it just seemed like this really cool and interesting project. So I called up
#
Jed McCaleb, the founder, and I asked, hey, can I work for you? And he said yes in two minutes.
#
But then we got into the trap that I'm sure lots of Indians are familiar with, which is the US visa
#
system. So the way that this program works, so I was in Canada and Ripple Labs was based in Silicon
#
Valley in the US, and the program went through this provider. And the provider had a rule that
#
the company needed to have existed for one year in order for it to be eligible. Ripple Labs had
#
only existed for nine months. And so that provider ended up not being an option. And for about a
#
month, we tried going through other providers, but eventually it just kept getting harder. And
#
after about a month and a half, when I was already two weeks into what was supposed to be the start
#
of the co-op job, we gave up. And Mihai from Bitcoin Magazine said, hey, how about you come to
#
Spain and we'll work on both Bitcoin Magazine and some Bitcoin-based e-commerce stuff that I
#
want to do together. So I gave up on the co-op job, and I decided I would take a Bitcoin trip
#
around the world. I'm a journalist. I'm supposed to be exploring all of these Bitcoin communities.
#
I also got invited to the Bitcoin conference in San Jose, which just really blew my mind in
#
terms of just how big this community is. Before that, I had just seen people on the internet,
#
and I'd been impressed by just how much stuff there was in person. There were all of these
#
big companies that had dozens of employees. There are just all kinds of people, fascinating
#
cryptographers, everything. And that really also motivated me to do this. So on 2013, June 5th,
#
I took a one-way bus ticket from Toronto to Manchester, New Hampshire in the US.
#
And I spent two weeks with the libertarian community there. Bitcoin was very heavy there.
#
On the Bitcoin site, I found someone who was renting out apartments in Manchester,
#
and it was kind of fun. I rented out a room from him for, I think it was like $500 for 10 days
#
or something like that. And I remember the rental contract. On that rental contract,
#
it said something like, this is not a state-enforced legal agreement. If you violate the
#
terms of the contract, then I reserve the right to publish the details on the internet so that the
#
community can ostracize you. This is a really dedicated libertarian, so I was impressed.
#
Spent some time in Manchester, took some trips over to Boston, paid in Bitcoin at the Bitcoin
#
accepting restaurants there. Intentionally went on a pilgrimage to Veggie Galaxy and Thelonious
#
Monkfish, which were the two restaurants that accepted Bitcoin. And I made sure to pay in
#
Bitcoin there. Then went to this gathering, this annual libertarian thing called Pork Fest.
#
Pork meaning porcupine, meaning don't tread on me, not like the meat. Which was really fun,
#
and it was this interesting community. There was a lot of Bitcoin stuff. I found it very diverse,
#
and personally, I thought it was very healthy, especially compared to what I thought,
#
unfortunately, a lot of libertarianism ended up evolving in the US over time. There were
#
people selling carnivore and paleo lunches, and they were accepting Bitcoin. But there were also
#
people doing vegan stuff, and they were accepting Bitcoin. Five years later, if you're at a Bitcoin
#
conference and you sell something vegan, no, you're a soy boy, can't do that. That was fun.
#
And I lived in a tent squatting in between two tent sites because I did not feel like
#
paying for a tent site myself. It was just an interesting community. Met Gary Johnson,
#
who was a big presidential candidate in 2012. Well, not big by mainstream standards,
#
but probably the biggest who wasn't in the two parties. Then after that, went over to Spain,
#
and it turns out that Mihai was living in this place called Colofó. It calls itself a post-capitalist
#
eco-industrial colony, and it's basically this abandoned factory that got taken over by this
#
left anarchist group that was really heavy in Catalonia. They had a place in Barcelona,
#
they had a place there, which is about 50 kilometers northwest of Barcelona.
#
It was this interesting 50-50 combination of self-sufficient agriculture and self-sufficient
#
manufacturing type of people and open source Bitcoin culture people. There was definitely a
#
divide between the two groups, which I thought was interesting to see. But that's where I ended up
#
staying for about a month. From there, I went around a bunch of other places. At this point
#
in time, by the way, I still was fully expecting I would go back to university in September.
#
At some point, I just had to decide, hey, am I continuing this or not? And I decided, hey,
#
why not? I'll extend my vacation from university to a year. So I sent an email to the university,
#
told them I would do that, and continued my Bitcoin trip. I visited a bunch of other countries,
#
eventually ended up in Israel where there were the people doing colored coins and master coin.
#
Colored coins, you can think of it as a very old analog of ERC-20, but on top of Bitcoin.
#
It's this protocol that's sat on top of Bitcoin that let you issue your own assets, and you could
#
use that for self-issued assets, stocks, currencies, all kinds of things. And then
#
master coin, which was a more complicated financial protocol. I was working for both of those teams,
#
and eventually I started working on how to improve those protocols and make them simpler
#
and more powerful at the same time. And the idea for Ethereum basically came out of that.
#
Then after Israel came to San Francisco and started slowly mentioning the idea of Ethereum
#
to more people. And then at some point Ethereum just became this bigger and bigger thing.
#
My first guess when I wrote the original white paper and I sent it out was that there is no
#
possible way that I could come up with something that so many other people have just not come up
#
with yet. Surely, if this wasn't mainstream already, it's because there were very good
#
reasons why it's not possible. And if I write this white paper, 50 people would tell me those
#
reasons very quickly and smack me down. This smackdown, of course, never happened to my
#
great surprise. And Ethereum continued. And at the end of January, there was this big Miami Bitcoin
#
conference, and I publicly presented Ethereum for the first time. And the reception was just much
#
larger than I expected. And before this, I had been expecting that Ethereum was this tiny thing
#
that I would get done in a few months. And basically, I would finish it, get it out there.
#
And then in May of that year, I would just go back to university. After this Bitcoin Miami thing,
#
and just seeing both how large the project actually is in terms of how much it needs to do
#
and how much attention it has, that's when I realized, wait, no, I'm not actually going back.
#
Ethereum started from there. And I guess that was the day when I finally decided to really drop out
#
of school. I'm hearing you being very tentative in the early days of Ethereum. I wonder if you
#
would care to psychoanalyze for us the compare and contrast against Satoshi. So Satoshi was
#
very self-confident. And one fine day that paper came out. Probably five years or 10 years had been
#
spent in refining it. And then there was that amazing decision that we're going to be anonymous.
#
We don't know whether it's one person or multiple people. So did you think about that decision about
#
having a true name or going anonymous? Or was it just that this unfolded in a tentative way so
#
that decision never was faced? I think it's the second one.
#
Before we dig into Ethereum and all, I want to ask a broader question about the evolution of
#
your thinking. Because when we start thinking about something, what happens is that you begin
#
with what is really an instinct. Like in your case, you've written about how you were, possibly
#
a mythical story, but how you were playing World of Warcraft and Blizzard changed a particular
#
damage component to one of your characters. And you were like, yeah, central planning, et cetera,
#
et cetera. But that instinct then fructifies into a coherent view of the world. The more you read
#
and the more you think about it. And I'm really interested by the fact that you were writing so
#
much. Because to my mind, when you write deeply about any subject or when you write frequently
#
about any subject, your thinking about it has to become much sharper. And so I want to know that,
#
you know, how did your thinking about all of this, because ultimately you're thinking about Bitcoin
#
is also thinking about political philosophy, about the nature of power, about the state of the world.
#
So give me a sense of how all of these ideas evolved in your mind. I'm guessing travel must
#
have played a component interacting with other people in all of these places, must have played
#
a part in it. So I'm really interested in how, you know, it evolved in your mind from what is
#
an initial instinct, which is banging up against the consensus of the world. And then how your
#
thinking sort of gets more and more deeper and coherent and structured. I'm really interested in
#
it. So I think there is basically kind of two different eras there, right? The first era was
#
probably before around 2013, when my learning was basically book driven. And as part of getting into
#
the Bitcoin community, I also became very curious about the things that the existing Bitcoin
#
community cared about. And so I started reading lots of political philosophy. I read the entire,
#
you know, standard libertarian canon, like, you know, human action, Atlas shrugged, you know,
#
Thomas Sowell, like that whole list of things. I also read some of left libertarian stuff as well.
#
David de Ugarte's Files was like one that I still remember because I mean, like more recently,
#
there ended up being this discussion about network states. And I just
#
remembered that book as being this kind of different and less capitalist, more socialist
#
perspective on what was ultimately a similar concept, as well as just other books that I saw
#
people recommend and be interested in in general. I mean, since we're on scene and on scene, I
#
definitely read Frédéric Bastien. Actually, I wrote my, I think, 11th grade French class essay
#
about him. And also Proudhon and the debate between Bastien and Proudhon in 1849, that particular
#
thing I found just really fascinating. Yeah, like back at that time, I was basically just, you know,
#
focused on reading the great books. Then sometime around 2013, I totally did not know it, right?
#
Like on 2013, June 5th, I thought that I was just starting a six-month Bitcoin trip, but I ended up
#
starting a 10-year digital nomading path. And that was totally not what I expected. It was
#
definitely a fascinating thing that took me to fascinating places. At first, I thought I would
#
be focusing on Europe and the US, but then at that exact same time, I remember hearing about
#
the Bitcoin community in China and just how massive the Bitcoin community in China was, right?
#
And at that time, the public impression of China was more optimistic, right? I mean,
#
you remember this era, a lot more optimism about reform and opening up and the society slowly
#
becoming more open and all of those things. And I became excited about that. And I actually started
#
learning Chinese then. I started basically listening to one of those pimsleur Chinese
#
learning podcasts about one a day at the same time as I was nomading. And then one year later,
#
I would end up actually visiting for the first time. And then later on, I would start coming
#
back again and again. And at least according to the charts, I've spent close to 15% of my time
#
there, though I've not yet gone back since COVID started. So that ended up going there.
#
Of course, coming here, this was my third visit, but my first longer visit, which has been really
#
fascinating. And also started going to Latin America more. I had a long trip to Africa
#
in February this year. So yeah, basically just exploring all of these different
#
crypto communities around the world has been very fascinating and unique. I feel like this is one
#
of those things that not too many people probably do because the concept of traveling and the concept
#
of digital nomading and all of those things are reasonably well known. And it's well known that
#
you can do this. But I think what a lot of people see is a very generic and cookie cutter version
#
of this, where you go to places and you don't really have much in common. You don't really have
#
any existing anchor points with any of the locals that you would be meeting. And the main people
#
you really share things in common with are basically other digital nomads in the same region.
#
But here I was exploring the global crypto community. And so whether someone was from
#
the US or from India or from China, to me, they were crypto people first and foremost.
#
And I think crypto more than pretty much anything else in the world has actually managed to maintain
#
that spirit. I think even today crypto is that one sector that manages to keep that spirit of
#
globalization alive, which I think is really beautiful. So just getting to know people
#
through that has been really interesting and it's been just fascinating to see what all of the
#
world's crypto communities are like, what kinds of things people in different environments and
#
different places care about, where there's a lot of it that are different, but at the same time,
#
sometimes they mean somewhat different things by it, but they want to see some kind of
#
like more free and open and democratic world. And that was just really interesting.
#
And when you're on this intellectual journey, I wonder if there is a danger of succumbing to
#
dogma. You pointed out what happened to the libertarian community in the US, for example,
#
or Bitcoin communities, or any kind of community that forms around a set of ideas,
#
initially you come together around a set of ideas because it seems so attractive to you,
#
that's what binds you together. But then it almost becomes tribal, there is a danger that
#
dogmas can come in. So one, is that something that you kind of encountered in the process of
#
meeting people in the process of these communities sort of forming and hardening? And two, how do you
#
avoid that in yourself? You're thinking over the years, you've continuously evolved and had more
#
and more nuanced positions and stuff. So how do you avoid that in yourself? And is that a problem
#
with what you see around you, that people can get dogmatic about positions, that people with
#
a common interest can form a tribe and then everything kind of? Yeah, I think it's definitely
#
a concern. Like Bitcoin and Ethereum, there's obviously been all kinds of tribal conflict,
#
both between those two and within those two. The Bitcoin block size war was this
#
really interesting and big conflict within Bitcoin that played out over several years,
#
and that definitely cost a lot of people a lot of time and energy. And it definitely made people
#
very upset in their ways and in a whole bunch of ways. At this point, I think
#
Bitcoin is going to stick with its own kind of proof of work pretty much forever.
#
I don't think it was that dead set on that back in 2011.
#
Bitcoin is probably not going to hard fork. I don't think it was dead set on that at all back
#
in 2011. Crypto pre-2014 felt very pluralist in a lot of ways. I remember even on Bitcoin Talk,
#
there was this section of the forum called Politics and Society, and I remember regularly
#
seeing libertarians and socialists just have long three paragraph message debates there,
#
and those debates were just so fascinating to read. But at some point, probably around the
#
same time in early 2014, there was this Tower of Babel-like splitting of the tribes, and
#
Bitcoin small blockers went one way, Bitcoin big blockers went the second way, Ethereum went
#
the third way, and then BitShares and other people went the fourth way. It was interesting
#
to see the split happen. I think there is a bit of a nuance in that there is a kind of
#
tribalism that's healthy, and the kind of tribalism that's healthy is when different communities
#
have different ideas about what's good and correct, and those communities earnestly try to
#
make the best possible version of that idea. They actually have that time and that safe space to
#
actually focus on creating the best version of their idea instead of constantly defending it
#
from the opposition. I think there have been versions of that that have happened in
#
crypto, like Bitcoin's making the best that it can out of Proof of Work and the Lightning Network,
#
and Ethereum's making the best that it can out of the Rollup-centric roadmap. The way that these
#
projects interface with each other isn't so much through arguments, it's through the power of
#
example. I think that's good, but at the same time, lots of arguments does exist, and lots of
#
people kicking each other under the bus does exist. There's plenty of, for example, Bitcoin people
#
who try to actually talk to the government and try to actively convince them to declare Ethereum
#
and other asset securities, and then these things happen in all directions. So there's some
#
destructive tribalism too. I think on that topic in general, the other thing to keep in mind is that
#
my opinion is that if we think about what kind of negative tribalism is the most dangerous,
#
to me, it's not even these internet tribes. I think it's just the really boring kind that
#
we've had for thousands of years, which is just existing countries. These tribes are just so much
#
more powerful because it's not just the bubble of what you see in your adult life, it's the bubble
#
of what you get raised by the public school system as you grow up, and the entire environment that
#
you have. As a result, if you're living in Russia, you're more likely to believe that what Russia's
#
doing is good and correct. If you live in China, you're more likely to believe that what China's
#
doing is good and correct. Different countries definitely have different levels of moral quality,
#
but ultimately every country has this phenomenon. To some extent, this is the reason why wars happen
#
and things like that are so sticky. The fact that the internet has managed to at least somewhat
#
weaken those bubbles is good, though at the same time, obviously, I would worry for a world where
#
if we go back to a supercharged Twitter-like era, people see the most toxic and jingoistic versions
#
of what people in other countries say, and they become convinced that the rest of the world is
#
batshit insane, and they keep rallying around their own flag. These things are possible.
#
I don't think there's a perfect solution. I think the closest thing we have to a mitigation is
#
reducing the extent to which people have a single dominant identity and trying to
#
move toward a world of having more plural identities. Even in the crypto space,
#
there is an example. I'm a crypto person. I'm originally from Russia, grew up in Canada.
#
Someone else is a crypto person from India. Someone else is a crypto person from Argentina.
#
There's a lot of differences, but at the same time, we are also part of this group that also
#
has these common values. If any kind of serious conflict at the national level happens, people
#
having these other loyalties to things other than the state can be a very valuable and moderating
#
influence. I want to say two things here. You will recall a book by Werner Winch called True Names
#
where there was this deep exploration around the idea that we can be multiple identities,
#
we can invent multiple identities. In the early years, there was quite a significant attempt by
#
many people to do that. One person that I know has journal pubs under a fake name because there was
#
this very self-conscious attempt that I will be multiple things in conflict against what modern
#
states are trying to do of forcing a person to have one identity and be able to biometrically
#
prove who you are. I wonder how that tension shapes up. My second set of thoughts for you is
#
around what you described as the loss of opportunity at Bitcoin to hard fork in a
#
significant way. I wondered about the role of central control in these projects. You are the
#
Linus of Ethereum. Does your chairmaning the room make a material difference to the willingness to
#
discuss, explore and actually undertake large scale change? Could sharding have been done
#
without you? Whereas maybe Bitcoin is stuck because Satoshi is gone and then the pure
#
decentralized process is not able to do those debates. Then the moment I say all this, I
#
remember the RFC process where a bunch of these UNIX hippies get together in a room and hum and
#
find a consensus. Maybe there are ways to actually achieve material changes through a process of
#
working code and decency and argument and not anger and unhappiness. What are you thinking
#
on that tension about how we can handle these projects better?
#
Yeah. First of all, to me, decentralization is not about having zero leaders. It's about
#
having many leaders. I think leaders definitely have influence and have a place in all of these
#
projects. When I suggest things, the things that I suggest are based on not just what I think is
#
right to do, but also my understanding of what kinds of things the community would be
#
willing to accept. If I tomorrow went and suggested and said Ethereum should in the
#
next hard fork print 5 million coins to go to life extension research, that would create a big
#
shit storm. I think the largest chance is that would just not get accepted. I think the worlds
#
in which that just gets cleanly accepted are close to zero. What I think ends up happening
#
is that there's a public perception that I say things and they happen when the reality is the
#
things that I say are often selected for, the things that I think can realistically happen
#
because lots of other people support them anyway. There's that distinction. There definitely have
#
been cases in the community of leaders being more haphazard and out of step with the project. That
#
generally ends up creating other kinds of tension that's very visible. There's definitely a
#
complicated art to doing that well. When you said that when you take a decision,
#
you have to think about how it will be received and how people will accept it. I wonder here
#
about that sort of tension between being pure to your ideas, being true to your ideas,
#
and the practicality of how far they would like to go. As someone who is purely in the realm of
#
ideas, I don't run an organization, I don't do anything, I can think in terms of shifting
#
the overton window, that I don't mind how outrageous something I say might sound because
#
it'll make someone else seem more reasonable and I can just think in terms of that and not have to
#
put a filter on that. But as you pointed out in your case, if you're running an organization,
#
then that whole thing of thinking about the practicality of something getting accepted
#
and actually getting stuff through comes into play. I wonder how you think about this because
#
what you're doing here in a sense is holding multiple identities simultaneously also,
#
where in one case you're a thinker and you're thinking on the larger questions,
#
and in the other case you're actually someone within the community working to make things
#
happen. So how do you sort of deal with that tension?
#
Yeah, it's definitely a tension. I'm sure that operates on a subconscious level in all kinds
#
of ways. Because if there's an idea that's within the range of things that actually can
#
be implemented, then the response is to suggest the idea so that if it's good and it turns out
#
to be good under further examination by a lot more people, it actually does get implemented.
#
But then if there's an idea that is kind of out of range from what Ethereum could practically do
#
then, or even an idea that's far off from what Ethereum does, but it just happens to be close
#
to what some other chain has already done. And so if you accept it, then the other chain will
#
basically make a big point of that being a victory lap, then that's harder in a whole bunch of
#
subconscious ways that's really difficult to get rid of. And then the other thing, of course,
#
is that as an intellectual, you can choose your audience to some degree. And it's okay to offend
#
people. And if you even say things that are offensive to some people, but that have a deep
#
and important point, then there's even other people who appreciate you for that. But if you're
#
at the same time socially stuck in one place, then that becomes harder and you have to limit
#
the topics more. So that is attention, though I think that's also attention that I feel like
#
lots of people in the pure thinking realm have as well. Because if you have a podcast,
#
The Scene and the Unseen, and it has a libertarian-leaning audience, and if one day
#
you wake up and you realize that socialism has been correct the whole time, then that's
#
going to be a pretty big cost for you personally. And so I think there's an extent to which
#
everyone after spending a certain amount of time just having a voice, they're not just a
#
free-floating agent, and there's existing community positions that get attached to them,
#
and there's costs to going too far against them. I'm kind of a newbie in terms of crypto. I just
#
have a really basic understanding of it, so I wouldn't really be able to have an intelligent
#
conversation about it. And I think that's many of my listeners. So I'd be really curious in
#
how your thinking on Bitcoin per se evolved in the sense that, A, at the level of principle,
#
what attracted you to it? What made you more and more excited as time went by? And then,
#
what were the problems that you began to see and the sort of the candidate solutions that you began
#
to come up with those problems? So I'd love to hear about that journey. Yeah. So when I first
#
heard of Bitcoin, I think it excited me so much because it was right at the intersection of a lot
#
of things that I was interested in. Bitcoin has its economics. It has its political philosophy
#
that definitely aligns with the instincts I already had at the time. It has its math and
#
programming aspects. Bitcoin is open-source software. I had been a fan of open-source
#
software. I had Linux on my laptop even for a year before I heard of Bitcoin. So
#
it did really combine a lot of interests together at the same time in a way that very few other
#
things could. And yeah, as I said before, Bitcoin back in 2011 was this very pluralist thing. It
#
had all of these sub-communities. It had people who were just idealistically trying to work on
#
all kinds of different ways to make the world better. It was one community that even both had
#
had space for the anarcho-capitalists and things that you would probably have to call socialist.
#
There was this project called Venn, which was trying to push the idea of a resource-based
#
economy, which is basically like, yeah, let's think about things from the perspective of
#
resources and have some more centralized mechanism allocate those resources more directly.
#
But people were still friendly with each other and went to the same conferences.
#
And then sometime around 2013, the first problem that I saw in Bitcoin was just its
#
insufficiency. I wanted to do things that Bitcoin by itself could not do. We wanted to
#
have more complicated agreements on the blockchain. We wanted to do prediction markets. We wanted to
#
do create organizations that could have their rules encoded and automatically run on the
#
blockchain. This is what DAOs are supposed to be. We wanted to have more complicated financial
#
markets, be able to exchange between different assets without going through a central intermediary,
#
which is something that the crypto space totally takes for granted now. But four years ago, that
#
was new. So there's a lot of things that I just thought would be amazing to do, but I just knew
#
that Bitcoin itself was not really willing to expand into. And so that's why I decided to
#
make Ethereum as something that's independent from Bitcoin. Then I also started to see the
#
cultural problems. The first cultural problem that I identified as actually this Bitcoin
#
maximalism phenomenon that I first really called attention to with that article in 2014.
#
But even back in 2013, when I was writing for Bitcoin magazine, I had a piece titled
#
In Defense of Alternative Cryptocurrencies. And I was just defending the right of things like
#
Purecoin and Primecoin to exist when a lot of people were already saying like,
#
hey, all these other coins are useless. Bitcoin is the only coin that you should
#
really be focusing on. And so at that time, maximalism was this more intellectual position,
#
just a position that it's better to have one than to have many. But then also, this was the start
#
of it evolving into this weird cultural thing that I think paralleled libertarianism's evolution into
#
this weird cultural thing in the US more generally. I think that pork fest in 2013,
#
at the time, it felt like the start of something great, but in some sense, it also felt like a
#
high-water mark. You are not going to have carnivore, meat-only people and vegans cheerfully
#
at the same event selling both of their stuff for Bitcoin today. If you look at the Bitcoin
#
conference in Miami in 2021, in some sense, that was the high-water mark of the opposite perspective
#
where there was these very specific cultural things that Bitcoin maximalism had reject all
#
other currencies and not just in an intellectual, oh, this is useless, the world needs to converge
#
on one money way, but in a very emotional way. There's this whole mentality that dollars are
#
worthless and not just hypothetically, but in the here and now, there was this famous clip of,
#
I think it was Max Keiser, I believe ripping up a $10 bill on stage and there might've been even
#
these leaf blowers, the machines that people use in their backyards to blow away leaves,
#
except it contained $1 bills and was just throwing them around as a way to basically signal that
#
dollars are worthless. It was kind of fun from its own perspective, but obviously insanely cringe
#
from the perspective of disagreeing with that position. And actually, since then, I feel like
#
Bitcoin maximalism has actually started to moderate somewhat. But the thing I noticed was,
#
yeah, there was this growing focus on Bitcoin and Bitcoin only. There was this growing hostility
#
and the small block, large block debate that started at exactly the same time ended up
#
increasing that even further. There was this intellectual transition from valuing the
#
intellectual arguments to what I unfortunately think big parts of the US conservatism are today,
#
which is this much less intellectual and more primal in a negative way thing. It's the transition
#
from everyone reading human action to everyone reading bronze age pervert and
#
trading the chatted soyjack memes. I saw the beginnings of that and that just felt
#
instinctively something wrong. And so even from the beginning in Ethereum, there's also an
#
intentional effort to try to culturally not be that. Some of the early Ethereum applications,
#
they were not about putting your money into a 3000 kilogram tungsten cube and protecting it from the
#
government trying to run around and confiscate everyone's Bitcoin. They were just around like,
#
let's create communities that can manage funds together. Let's even create universal basic income
#
coins and create things that incentivize solving climate change and that kind of stuff. So it was
#
very diverse and it had both ends, which I found definitely healthier than the approach in other
#
parts of the crypto space at the time. And then from there, I think Ethereum managed to attract
#
a bunch of people who were both disagreeing with that aspect of Bitcoin culture, but probably also
#
people who are disagreeing with specifically the small block aspect. What happened in the Bitcoin
#
block size war was that it split up into these two camps. You have the small block camp and you
#
have the large block camp. And the small block camp basically says, we're going to keep the blocks,
#
these data structures that contain Bitcoin transactions, small, and maybe sending transactions
#
will become very expensive, but at least the chain will be easy to verify and the chain will become
#
this very stable thing that almost never changes. And the big block movement basically said, hey,
#
you have to make the chain actually easy and cheap for people to use because if that doesn't happen,
#
then everyone's just going to move to centralized things that try to sit on top of Bitcoin. And
#
sure, the tiny thing will be decentralized, but what's the point when you need to go through
#
three layers of centralization to access it? You can probably tell from my description that I
#
definitely sympathized with the big block side more, though I think in a weird twist of fate,
#
it's very possible that Ethereum helps the small block side to win by basically
#
brain draining a lot of the people that would have otherwise pushed for bigger blocks inside
#
of Bitcoin. So yeah, a lot of the people that were really into functionality and being a
#
developer friendly platform and being pragmatic and caring about real world use, a lot of those
#
people got really attracted to Ethereum as well. A lot of people really appreciated the
#
moderateness that Ethereum had in that it was not all out extreme in the way that Bitcoin
#
small block movements seem to be, but at the same time, it was also not all out, hey, let's
#
embrace maximum scalability and throughput with as little decentralization as possible as
#
a lot of other chains really did at the time. And Ethereum kind of sat in the middle of those two.
#
And there were definitely a lot of people at the time that basically criticized Ethereum for
#
essentially being indecisive pussies. Either you believe in decentralization or you believe
#
in centralization, be a man, pick one. And of course, I think over time, the moderateness
#
actually ended up working out pretty well. And I wrote this article in my blog a few years ago,
#
the one on convex and concave dispositions and on the difference between seeing the world as
#
mostly being made up of situations where you got to be a man and choose one or the other versus
#
being mostly made up of situations where the compromise actually is the better approach.
#
And how I just instinctively tends to be more in the second camp. And I have noticed that lots
#
of other people tends to be more in the first camp. And I think the block size debate definitely
#
ended up being one of the things that really solidified that idea for me. Because especially
#
after the small block and the big block sides of Bitcoin split, and the big block side kept
#
the Bitcoin name and the small block side went off to become Bitcoin Cash. Within Bitcoin Cash,
#
they immediately started these arguments where some people said like, okay, well,
#
today Bitcoin Cash is 32 megabytes, but come on, we believe in big blocks. We've got to make them
#
big. Or we don't believe in central planning. We got to just let miners choose what the block size
#
is. And I remember at that time being very skeptical. And I'm like, okay, 32 megabytes
#
is actually reasonable and you can still verify blocks on a computer. But if you go to 512,
#
then actually the centralization gets worrying. And of course, lots of people on the big block
#
side were not saying this. They would say like, hey, we've agreed that we're on the big side.
#
And so the logical conclusion is that we would get super big, right? And of course, what they
#
mean by logical conclusion is basically assuming that everything is linear. And if you're willing
#
to go in one direction, you should be willing to go an unlimited number of steps further in
#
the same direction, which is a famous philosophical fallacy that all kinds of people unfortunately
#
get sucked into really easily. But that's the thing I noticed from those situations. And I
#
think over time, like Ethereum really has kept that moderate and balanced approach as a core
#
part of its culture. I'm sort of interested in what happens where communities form and people
#
come together to solve problems because at the one hand, there is a beauty of voluntary action.
#
People care about a particular thing. And like in the open source movement, they find ways to all
#
contribute or they negotiate differences and things happen. At the other end, there is an
#
instinct for control and all those personal instincts that come into play, whether it's greed
#
or fear or tribalism or whatever the case might be. And that's where dogmas form and people take
#
heart in positions like the maximalists like you pointed out. And I'm thinking that one, I'd love
#
to know about your learnings of communities and how they work together. I'm guessing for any
#
project like this, it really does take a village and which is always self-organizing. But just the
#
nature of that is interesting to me and also how you then navigate the tensions within yourself.
#
Because on the one hand, you want to be open to ideas and challenges and all of that. But on the
#
other hand, you might feel deeper ownership for the project because you worked for longer in the
#
space, you've thought harder, you might feel that ownership and I guess there would be elements of
#
ego coming into it also, which is a natural human impulse. So how do you then negotiate that? Have
#
you been through a period of self-doubt where you're wondering that, is this the right thing
#
I'm doing or should I seek control or do I need some level of control here? And your learnings
#
about communities and yourself, both of these is really a two-part question.
#
CB I think the really key points that it took me a while to recognize is this idea I mentioned
#
that decentralization is not about having zero leaders, it's about having many leaders.
#
Leaders do have an important function in any successful community or society. People have
#
like instincts and values that go in different directions, and you do need people who are able
#
to crystallize that into specific proposals that align with those values and that seem like they
#
have some chance of actually being successful in accomplishing the goal. If the leader does
#
their job well, then the leader can be appreciated. If you have a community of people that
#
want more scalability in their blockchain, for example, but at the same time, they don't want
#
to go crazy on decentralization and they don't want to betray the ideals for which they joined
#
the system in the first place. And someone comes along and says, here is a technical idea that
#
actually does the thing that most of you want, then that's something that people appreciate.
#
And that's definitely not something that only one person can do. If you have a structure where
#
control is based on fear, then yes, one person needs to be top dog. But I don't think Ethereum
#
is that way at all, and I don't think most crypto communities are that way at all.
#
There definitely are crypto communities that go pathological in that direction, but you can usually
#
tell the difference between those communities and the communities that are healthier. And so
#
different people can suggest different ideas and directions. And if those ideas and directions get
#
enough popular support, then they don't just need someone to suggest an original idea. Often,
#
you do need a champion to steward the idea, talk to the different stakeholders, talk to the different
#
people in the ecosystem that will have to actually implement it and be compatible with it and comply
#
with it and make sure that they're willing to actually follow through on those steps and to
#
actually make all of those things happen. And I think it's possible that one of the
#
reasons why I'm not the type of person that wants to go in a dictatorial direction is that
#
to some extent I am lazy. I don't want to have this life that consists of many hours a day of
#
meetings and constantly jumping around between doing all kinds of things and checking everything
#
myself. And so what ends up happening is we end up finding other people that are passionate about
#
specific projects and that are willing to be champions of those areas and just to give those
#
people a very high level of autonomy. And in some ways that is a strategy for growing other people
#
into being leaders over time. And a lot of new leaders I think have emerged in the Ethereum
#
ecosystem as a result of that. So one example of this is Danny Ryan. He was a developer joined in
#
2017, originally was just one developer on the Casper Proof of Stake project. Proof of Stake is
#
the consensus mechanism that we spent seven years switching Ethereum over to away from Proof of Work
#
and we finally completed that last September. And he just started off as a developer of that
#
and then he just showed his talents more and more. And over time he became a kind of
#
decentralized equivalent of a project manager for the Proof of Stake effort in that it's a
#
decentralized ecosystem. And so he doesn't have the formal authority to actually order anyone
#
around. But he does go and talk to different Ethereum client teams that are building the
#
software, different teams within the ecosystem, people who are building infrastructure for staking,
#
all kinds of people, and actually helps spread around information between that group and
#
basically coordinate them so that improvements to the Proof of Stake can actually happen.
#
And he has done an amazing job of that. Tim Bako who has basically also emerged as one of these
#
personalities that interfaces between whole groups of developers and other people. And he's managed
#
to push through all kinds of efforts. EIP 1559 was this really fascinating economic reform that
#
we did to Ethereum. It was actually inspired by some of the work on first and second price auctions
#
that I remember seeing at the, I think it was the 2018 economics and computation conference at Cornell.
#
Though it ended up being neither a first nor a second price auction because the work basically
#
ended up showing me the faults of both of those systems. But basically what that reform did is,
#
the way the blockchains all worked before this and most still do today is that you have a block
#
and each block has a limited amount of space. And we can simplify and say like each block can
#
have 500 transactions. And then users send transactions. And when users send transactions,
#
they specify what fee they're paying. And the miner or the validator, the person creating the
#
block, they choose transactions. And of course, to maximize their own profits, they're going to
#
choose the transactions that pay the highest fees and they're going to include them in the block.
#
And whatever fee you specify, that's the fee that you pay. And then everyone else waits until
#
they later get included. So this is a first price auction because whatever amount you bid,
#
either you lose and you pay nothing or you win. So it's like a normal financial market.
#
It's an order book. Exactly. Well, order books aren't
#
quite like this because it depends on the details. But it is like making an order. But in an order
#
book, you also have the ability to make a market order. And in a market order, you can get better
#
than what you were expecting. In this system, you can't. In this system, if you specify the fee
#
that you're willing to pay is like 20 cents, then you pay 20 cents even if everyone else
#
was paying 4 cents. And there's these famous theorems about how first price auctions are
#
inefficient. And you could actually see the consequences of that inefficiency in Bitcoin
#
and in Ethereum up until a couple of years ago. So different people would pay different levels of
#
fees. Some people would overpay by 5X. And sometimes what would happen is you would set a fee
#
that looks correct, but then unexpectedly many transactions come in. You end up being under the
#
threshold because all these new transactions outbid you. I'm in a hurry to get the transaction done.
#
And then I have a winner's curse that I'm overpaying. Right. Exactly. If you're in a
#
hurry, you get the winner's curse that you're overpaying. But then if you're not in a hurry
#
and you're trying to just be reasonable, there's this just random chance that you're going to get
#
unlucky and you're sort of going to get submerged in this flood of unexpectedly many transactions
#
and then other people bidding up to compete. And then your transaction just gets stuck. And then
#
maybe it gets included after like five minutes or one hour or whatever. And this was just horrible
#
for Bitcoin UX and even for Ethereum UX at the time. What EAP 1559 does is it says instead,
#
we're going to make blocks bigger, but on average we're going to target a block being half full.
#
And then what we're going to do is we're going to have a fixed fee. And that fee adjusts up and
#
down, but it only changes up and down after each block. Right. So within a block you have a fixed
#
price. And as a transaction sender, you specify the maximum price that you're willing to pay,
#
but you end up paying whatever the fixed price is. And you also have the ability to set what's
#
called a priority fee. And so if there's so many transactions in a block that it does get overful,
#
then you can still compete. But like generally blocks, like 90% of blocks are not full. Right.
#
And so 90% of the time it's like you specify the max that you're willing to pay. And if the
#
blocks fee is under the max, then you get included and you just pay the block fee. And then if the
#
blocks fee is over the max, you don't get included. Right. So it's just like basically a similar
#
experience to like going into the store, you check the price of bananas. If the bananas are
#
too expensive, you go away. If the bananas are not too expensive, you buy one and like you pay
#
whatever bananas cost, even if you would have been willing to pay five times more. Right.
#
So with this approach, it ended up being like very efficient and very visible ways.
#
And so for example, one of the big consequences of this is that three years ago, an Ethereum
#
transaction would just often take like five minutes or longer to get included. Today,
#
an Ethereum transaction can reliably get included usually within 10 seconds.
#
Like the UX improvement is just massive. And that was not through technology changes,
#
that was through an economics reform. Right. And that, but the road to getting there was like a
#
pretty long one. Right. Basically I came up with a design, I wrote a paper on it and I wrote some
#
more posts on it, eventually wrote an FAQ, but then it just kind of was not really going forward
#
and it was sort of stuck in limbo. And then eventually some other people like basically
#
stepped up and said, Hey, I want this to actually happen. Right. I think, I believe it was David
#
Hoffman from Bankless that like helped actually like write the EIP and start pushing it. Like
#
Mike Azulto helped a lot. There's a, there were a couple of people that sort of emerged as
#
the leaders of the movements to get 1559 past the finish line. And once that became the case,
#
like then, you know, things really kicked into high gear and things actually happened. Right.
#
And so sometimes, you know, like having the right person in the right place, you know,
#
crystallize the idea and push it forward. It is something that just is necessary if you want
#
ideas to get implemented in, you know, one year instead of just sitting there needlessly for
#
five years. Account abstraction, which is this effort to like basically make it possible for
#
people to use more complicated logic to secure their regular accounts. And so we don't just have
#
to have one private key or if you lose the key, you lose all your money. Or if you get stolen,
#
all your money gets stolen. Like that also was something that has been kind of sitting there
#
for a long time, but now there's a dedicated team. There are sort of leaders that are really
#
excited and energized about pushing it. Right. And so it's actually happened. Right. So that to me
#
is the kind of ecosystem that like we'd want to see. Right. Like one where, you know, leaders do
#
exist, but leaders are pluralist. There's many of them and leaders primary power is not hard power,
#
it's soft power. Right. Like the thing with hard power is that, you know, unless the mechanism that
#
can replace you does a really good job. Like if you do a bad job, then like you still stay there
#
and people are still forced to listen to you. Right. But here, like if a yell leader starts
#
saying things that lots of people are against and people just stop listening to them. And
#
Ethereum is pretty extreme in that direction because in Ethereum, we do a lot of cross
#
organizational collaboration. Right. So the account abstraction effort, for example,
#
it involves work within the Ethereum foundation to just to write what's called the EIP,
#
Ethereum Improvement Proposal, like basically the standard, or technically it's an ERC,
#
Ethereum Request for Comment. It's like the standard for how, you know, if you want to
#
be compatible with this account abstraction mechanism, how you should write your code,
#
like how you should design your account and like what thing you should plug into.
#
Then there is the infrastructure within the MEV ecosystem, which is this complicated rabbit hole
#
that basically connects to the nodes creating the blocks and like how those nodes choose the
#
contents of the blocks. And that's the ecosystem that would actually accept the transactions that
#
are compatible with this account abstraction standard. Then you have Block Explorers,
#
which is a software that people use to like look at Ethereum transactions. They need to be
#
compatible with it. Then increasingly, there's not just Ethereum layer one, there's these Ethereum
#
layer two scaling protocols, and you have to talk to them too. Right. And these are not like under
#
the same umbrella, right? Like these are totally independent private companies based in totally
#
different countries, in many cases speak different languages. And the only way to get things done is
#
to like actually go and talk to and convince people, address people's concerns, sometimes draw a hard
#
line between which concerns you are willing to address and which concerns you're not, because
#
there's just no way to address those concerns without compromising the things that make the
#
whole idea valuable and like just push hard and make that happen. Right. So that's the kind of
#
thing that I feel like Ethereum is getting better at. And I feel like, and this is true now, and I
#
think this was not true five years ago, Ethereum can totally survive fine even if I get hit by a
#
bus tomorrow. Right. And that's something that I definitely intentionally worked toward creating
#
and ensuring. And the way that that happened is basically by, you know, empowering other people
#
to be able to take their own initiative and do all kinds of things in the ecosystem by themselves.
#
And I'm curious about, you know, through this process, obviously, your thinking on stuff gets
#
more and more nuanced as you get into the details. But I'm also interested in higher order questions
#
on which you may have changed your mind. Like if you look at your journey over the last 15 years,
#
what are the big TILs, the big, you know, learnings where you just thought in a fundamentally
#
different way or you learned you were, you know, wrong in a very fundamental way about something
#
or the other? I can think of a couple. So one is that I feel like over the last 10 years,
#
I have slowly moved from being what's called an indefinite optimist to being a definite optimist.
#
So indefinite optimism like basically means that like you think that the world is going to get
#
better, but you think it's going to get better in an abstract way. You're not really sure what
#
specific thing is going to get better and you're agnostic about what needs to be done to get there.
#
And so either you kind of just sit on your back and you hope that, you know, either markets or
#
human moral improvements or whatever process that you consider automatic will just keep going and
#
accomplish that. Or you just like focus on doing these like extremely abstract things that will
#
basically make the world better no matter what the path ends up being, right? And to some extent,
#
Ethereum itself is, you know, from the beginning, a bit of an indefinite optimist project, right?
#
And that the entire core idea is that we're moving away from what we call what I called
#
pocket calculator blockchains, which are blockchains that support one feature in one application
#
and away from what I called Swiss army knife blockchains, which are blockchains that have
#
a fixed number of features and applications to what I called smartphone blockchains, right?
#
Blockchains that contain a programming language. And so whatever new thing you wanted to do,
#
even if that new thing was totally not thought about at the time the blockchain was created,
#
like you can still write the code and you can go and do it, right? So Ethereum was very indefinite
#
optimist. And I think a lot of the libertarian ideas around markets that were popular at that
#
time and that like I was very excited about back then, like had a very indefinite optimist
#
flavor. It's like, hey, property rights in some sense give good outcomes regardless of what
#
people's preferences are, right? And like Mises in human action, he is, I think, very indefinite
#
in this way. It's like, hey, whatever happens, it happens because that is the thing that people
#
value. And we know that coercion can be bad, but otherwise it is what it is. And more recently,
#
I'm more definite optimist in the sense of knowing about or having opinions about specific things
#
that need to be better for the world to be better. And if I believe in those specific things,
#
then focusing on making those specific things happen, right? And a lot of my more recent work
#
inside Ethereum is in that direction, right? So like for example, the push for account abstraction
#
is not just because I believe that it would be cool if people had more freedom to decide like
#
how their wallets verify or how their accounts verify like which transactions coming from them
#
are correct. It's because I can think of very specific problems. The problem basically being
#
that the way that most Ethereum accounts work today is you have this one key, right? This one,
#
you know, roughly 78 digit number and it's stored in your computer. And if you lose that number,
#
you lose all your money and all your life savings. And if someone else sees your number
#
and they screenshot it even once, they can steal all your life savings. Like I knew that
#
that approach is wrong and we need something better. And there's these ideas around multisig
#
wallets and social recovery wallets that improve on this in a very specific way, right?
#
You can have like five different keys and you can have one on your laptop, one on your phone,
#
two controlled by your friends, one controlled by some institution or whatever. And that way,
#
your funds are going to be much safer against all kinds of situations, even including something
#
terrible happening to you, right? And I believe in this specific thing. And for me,
#
account abstraction is the way to accomplish that and a couple of other specific things that
#
I believe in, right? And then even looking at Ethereum applications, like in 2013,
#
I thought most of the value was in things that people have not even thought of yet.
#
And today, I think most of the value is in specific things I can identify,
#
but just done better so that they can actually reach people. Yeah, so that philosophical shift
#
is one of them for me. Another one is about the limits of financialized governance, right?
#
This is something that I've written about on my blog a bunch of times. Back in 2013,
#
when Ethereum was started, one of the things that I was really interested in is this concept
#
of DAOs, right? These decentralized autonomous organizations, like organizations that instead of
#
running on people and boards of directors and courts and laws and all of these things,
#
would just run as computer programs and code. And those computer programs would include the logic
#
for how they can be governed and the governance would be done through these mechanisms that
#
anyone can participate in. And I was really excited about this idea of making a governance
#
mechanism that could be made provably secure in the same way that you can make something like
#
encryption or even something like a consensus mechanism provably secure, right? Like we can
#
actually have a mathematical proof that this thing actually is a good aggregation of the inputs
#
that are the preferences that the different participants put into the system. And what I
#
found over time is like first, I kept on trying to look for this design and I eventually identified
#
a big problem with a lot of these designs, which is the collusion problem, right? Like basically
#
bribing. So a lot of DAOs at the beginning were based on coin voting. I mean, most DAOs are still
#
based on coin voting today because no one has quite managed to legitimize something
#
better to enough of a degree, right? How do you solve arrow impossibility?
#
How do you solve advanced persistent threats? Right, okay. So I'll get to arrows impossibility
#
later. I actually think arrows impossibility theorem is overrated and other impossibility
#
theorems are underrated. I will get to this a couple of minutes into the story. It's really
#
important, right? So if you think about coin voting governance, right? Basically you issue a coin
#
and you have some number of coins and you can vote. You have some number of coins.
#
If you have twice as many coins, you could vote twice as much and like decisions are made by coin
#
voting. The problem is if you have some number of coins, I can bribe you to vote in some different
#
way, right? And the challenge with that is that like voting is not like a market transaction in
#
the sense that almost all of the impact of a vote is an externality, right? Like when you make a
#
vote, you will make that vote based on the impact that it has on you. And so if I want to bribe you,
#
I only need to bribe enough to overcome the benefit that your vote gives to you. But at the
#
same time, your vote also has this other effect of influencing the entire decision and everyone
#
else's experience from that decision, right? And so what could happen is if there's a million
#
people that are making a decision, then each person is one millionth of the deciding power
#
and each person gets a value from the decision, which is like a millionth of the total value,
#
right? And so the size of the bribe that I need to give you is actually only in the order of one
#
over a trillion, right? And then multiply that up by a million people and that's still one over a
#
million. And so I can basically bribe most people to vote for a decision that actually creates a
#
tragedy of the commons and basically pushes the system toward some kind of collective ruin.
#
And this is not just theoretical, right? The crypto space is very inventive and there are
#
a lot of ways to bribe people without making it seem like a bribe. This actually happened.
#
There was a blockchain called BitShares that was really into coin voting as a governance philosophy.
#
And the thing that happened was that there were these organizations that basically said,
#
hey, we are staking pools. And if you pool your money with us, we are going to pay you interest.
#
Now, of course, what do the staking pools do? They vote the way that the staking pools want to,
#
right? And so actually it's doing the exact same thing, right? It's paying you in exchange for
#
control. It basically is bribing people to vote, but it's a staking pool and a staking pool sounds
#
cool. And it sounds like, hey, you're part of this lovely thing where people are participating
#
in securing the network together. And lots of people joined and BitShares quickly turned into
#
actually not very interesting plutocracy. So I kept thinking about this and
#
eventually I came upon Glenn Weil's work and quadratic voting. And that's when I realized,
#
like, hey, if the provably optimal mechanism for making these collective decisions inherently relies
#
on knowing who different people are and relies on an assumption of independent decision making
#
between people, then if that is the optimal mechanism, then any optimal mechanism that
#
tries to not be aware of those things, it's clearly going to fail in some way, right?
#
And so here we get to the impossibility results, right? So the reason why I'm not a big fan of
#
Arrows theorem as a master explanation for why politics is broken is because Arrows theorem
#
only applies to a small class of things, right? It applies to ordinal decision-making where you
#
just choose A versus B versus C, and you don't have the ability to express to the system how
#
strongly you care about A and B and C, right? Like quadratic voting, for example, it totally
#
defeats Arrows theorem, right? Why does it defeat it? Because, well, it isn't just an A versus B
#
versus C choice, it's continuous, right? You can say, I'm going to make 2.7 votes for A, 3.4 votes
#
for B, 0.5 for C, or maybe negative 0.5 for C, right? And so the voting space is continuous
#
and it actually cares about, it makes a distinction between I slightly prefer A and B versus I strongly
#
prefer A and B, right? And by doing that, it actually does manage to get around the theorem,
#
right? And there's specific arguments for why quadratic voting is not vulnerable to
#
the kinds of strategic voting issues that make traditional voting converge to two parties,
#
for example. The impossibility result that does worry me is, so there's a difference between
#
regular game theory and what's called cooperative game theory, right? In traditional game theory,
#
there is this implicit assumption that you have N players and the N players are basically talking
#
to each other by sending messages into a black box, right? You know, the mechanism. And all the
#
mechanism is this perfect black box. You can't see what's inside of it, except you know what the
#
rules are and you send in your action and then out gets your results, right? And this is the reason
#
why there's some of these, like, I forget the name of this principle, but there's the principle
#
that what's called a direct mechanism is always possible, right? Which is an indirect mechanism
#
is like you do something and then based on that, the mechanism does calculations and then it gives
#
you the results. A direct mechanism is you just go and tell the mechanism exactly what you value
#
and then the mechanism basically simulates a copy of you and it does what you would have done in
#
the indirect mechanism and then it gives you the results, right? And so you can do lots of things
#
in this individual choice framework where people are not talking to each other and people are just
#
only interacting with this black box in the middle, right? Equilibriums always exist,
#
the theorem that a Nash equilibrium can always be found. There's just all kinds of these really
#
nice results. The problem is that once you start breaking those assumptions, then things start
#
breaking down very quickly, right? So for example, if you break down the assumption that the black
#
box is perfectly trustworthy, right? If the black box becomes an actor that has its own motivations,
#
then there's this paper by I think Li Shengwu and someone else, I believe, that was on
#
credible auctions that basically proves that second price auctions are optimal if you can't
#
trust the black box, but if you can't, then they're not optimal. And it turns out that
#
there is no mechanism that is sort of optimal including under the assumption that the black
#
box cannot be trusted. And then what cooperative game theory is, is it's the branch of game theory
#
that says, well, what happens if groups of people can talk to each other, right? And what happens
#
if groups of people can coordinate to vote for the same thing or make decisions that try to
#
maximize their collective benefit and not just their individual benefit? And the result is that
#
under those conditions, under many very large classes of games, there is no equilibrium,
#
right? So instead of talking about Nash equilibrium, you talk about cores and often
#
the core is empty, right? And so there are situations where any possible set of coalitions
#
is just inherently unstable, right? It's like if you imagine three people voting over resources,
#
and let's say me and you are going to make a coalition where I get half, you get half,
#
and a third person gets zero, then what's going to happen is in the next round, there's an incentive
#
for you to go make a coalition with the other person and basically tell him, hey, how about
#
we make this coalition where and say, yeah, I get two thirds, you get one third, and then I get
#
nothing, right? And then for two out of three participants, like that's, it's a better move
#
to switch over to that, right? And so both of you are going to vote and I'm going to be left with
#
nothing. But then in the next move, it makes sense for me to go and collude with the person who has
#
one third. And so it keeps on jumping around, right? And like, I personally am a fan of like
#
using these mathematical results as kind of a metaphor for why in some sense, politics is
#
just inherently unstable. Can I just come back in two lines of attack? What you said about
#
the marginal benefit for the individual voter is being infinitesimally small. Okay. It really
#
resonates here in India because there's quite a thing in Indian politics where there are many
#
things wrong with Indian politics. And one of them is side payments to community elders
#
who are then measured against the public transparency of the release of voting data
#
at the level of a polling booth. So it is a very scary thing that happens in Indian politics.
#
And it reflects this fact that for the individual, they just don't care. And a fairly small side
#
payment suffices to shift the vote. The second thing is everything that you said is tinged in
#
my mind with the problem of states. How the presence of states poses special challenges to
#
DAOs in general and to currencies in particular. How are we going to navigate around a Chinese
#
attempt at gaining 51%? Yeah, I think it's a tricky question, especially once we stop talking
#
about these very ultimately technically simple blockchain constructions where it's at least
#
somewhat clear what is an attack and what isn't. Because in the more subjective real world,
#
sometimes the thing that says that it's protecting from 51% attacks actually is the
#
51% attack. This is one of the things that governments sometimes say in authoritarian
#
countries is that they have to be the way they are because otherwise their culture and system
#
would basically get 51% attacked by America. It's important to be careful there and ultimately
#
look for a solution that isn't just some elite saying that I know what the correct opinions are
#
and opinions other than these opinions clearly are the 50% attack and my opinions are defending
#
against the 51% attack. So let's just stick to those solutions that somehow allow people,
#
individuals, and communities to have more autonomy over themselves.
#
What that means I think is going to be different in every context. Obviously
#
all of these basic norms that we already have about it being bad for countries to attack each
#
other and if one country does then lots of others are supposed to come in and help in various ways.
#
The more interconnected world that we've seen, it gives rise to all of these concepts of weaponized
#
interdependencies where if you have all of these interdependencies then a powerful country can
#
basically say hey you do what I want and if you don't then I'll cut off all of these things that
#
your population already depends on. That becomes a pretty tough thing to try to defend against.
#
This also continues to be one of the reasons why I'm a fan of things like open source software
#
and hardware for example. The reality is that basically all of the world is dependent on
#
lots of stuff that's coming from the US and lots of stuff that's coming from China.
#
And if you include the software and the hardware together it feels like the average person in the
#
world is vulnerable to both of them. I think one of the reasons why people were more comfortable
#
with US-based stuff historically is that the US for at least this period of time probably
#
20 years after the fall of the Soviet Union, it felt like it at least made a reasonable effort
#
at respecting the independence of private enterprises and the right of people to make
#
organizations that had their own ideas and values and all of those things. And so if you were using
#
Silicon Valley tools and software, even if it all went through their servers, that's
#
not something that the US government could potentially leverage in a hostile way.
#
A lot of stuff that's happened over the last five years, both the deplatforming of Trump and a lot
#
of the general rise of more activist politics over the last five years has pushed people more
#
toward the perspective that that's not actually true. And if you use these proprietary things,
#
then even proprietary US-based things, then that is a lever that can eventually be pulled against
#
you. And so creating more tools so that people actually have the physical ability to have
#
personal lives and economic lives and all of those things in a way that doesn't basically
#
route everything through some central server that can shut you off whenever just because.
#
Right? This is, I think, one of the things that even the crypto itself is about.
#
And it's one of those things that I think is very far from solving every problem, but it can help.
#
The larger lesson I think there is like governances of what we call singletons,
#
single things that have to have some single way that they are, and everyone has to either
#
compromise or fight over them. Those are just incredibly hard to manage. And obviously,
#
lots of public goods exist, and it's definitely not always true that you can kind of decompose
#
things. But when you can decompose things in a way that singleton doesn't exist anymore, then
#
generally you should. In some sense, it's both what libertarians have been saying for a long time,
#
but I think it's also a lesson that even the crypto space has kind of learned on its own over
#
time. Another one is that actually, this is a weird one, coming to appreciate the benefits of
#
illegible governance. So if you look at both Bitcoin and Ethereum governance, they are heavily
#
illegible in some sense. In the sense that I cannot identify a fixed set of actors that will
#
make a particular decision, pass and succeed in the Bitcoin and Ethereum blockchain.
#
It's some complicated function of who the actors are, what kind of decision it is,
#
what kinds of red lines the decision crosses, and all of this very subjective and informal stuff.
#
And it feels messy. There is the camp in crypto that is in favor of saying
#
that messiness is bad and instead we should have formalized governance mechanisms. Deciding on what
#
the rules of the blockchain are going to become should just be a function and there should be
#
clear voters that vote on it. But the reason why I disagree with that is that once things become
#
legible in that way, then it becomes attackable. As we've talked about, cooperative game theory is
#
inherently unstable. There is no such thing as a governance mechanism that is safe under
#
collusion. And so once that exists, that is a thing that can be attacked directly.
#
Take the 2020 election situation in the United States and imagine a world where
#
just somehow hypothetically everything was done with a smart contract and with total automation.
#
So you had automated rules for the election that were a piece of code, and then those automated
#
rules were directly in charge of the military and the military was just a bunch of robots.
#
And so there's no human in the middle that could make a coup or whatever.
#
Then what could happen? There's a possible good outcome, which is that individuals can all vote
#
and you don't need this whole mess of having electors and having vote counting failures and
#
all of this stuff. And the problem could have been avoided. But then there's also the
#
potential bad outcome, which is, well, what if the way that the mechanism was written,
#
it did have an unforeseen issue? And let's say, for example, it did have electors,
#
and all that Trump would have needed to do is bribe about a hundred electors to go his way,
#
and then they would have signed the law. And then according to the laws of the smart contract,
#
he would have won the election and then he would have immediately controlled the military and
#
he would have basically gotten his way. And so there's a sense in which governance mechanisms
#
that are too clean are not robust and governance mechanisms that have these different and more
#
complicated layers that sometimes pull in different directions, but where if you try to do something
#
that's clearly terrible, they're all going to start pulling against you. It's something that
#
has a lot of benefits and it's something that I think even in the crypto space, we've benefited
#
a lot from. In Ethereum, we had this major event called the Dow Fork. What happened there was
#
the very first decentralized autonomous organization, it just called itself the Dow.
#
It was basically a crypto investment fund where people could put in their
#
Ether, the cryptocurrency in Ethereum, and then they could vote and make collective investments
#
into things. And someone found a bug in the code and that bug let them drain millions of ETH at
#
the time, something like 5% of the total supply at the time. And they actually could have kept
#
going and they could have went all the way to draining almost 20% of the total supply.
#
And as a result of that, because this was still very early in Ethereum's history,
#
the blockchain had not even been alive for one year. There was this movement to do something
#
that's called a hard fork, basically make an edit to Ethereum's code that would just replace
#
the broken Dow's code with a piece of code that just gives people their money back.
#
And this was only possible to do at all because of this really unique combination of circumstances.
#
The nature of the bug was such that the attacker could not steal the money immediately.
#
The attacker could only start a proposal and then after 35 days, they can move the money into
#
another contract. And after 35 more days, they could move the money out. Generally,
#
when you see a theft, that doesn't normally happen. Generally, when there's a theft,
#
the attacker gets their money immediately. But here, there's this really weird and special
#
circumstance. And so there was a period of five weeks during which the community debated doing
#
this hard fork. And this was seen as an extremely controversial and to many even sacrilegious thing
#
because it in some sense violated the tenets of decentralization. The code was supposed to
#
do one thing and here we are just going in and arbitrarily changing the code. If you do that,
#
then what happens if five years later, you might have some company store money in a wallet and then
#
the ESG people or whatever decide that that company is not kosher enough and they're just
#
going to decide, hey, let's do a hard fork to kick out 70% of their money and redistribute it
#
to Greenpeace or whatever, right? And these are the kinds of fears people have, right? It's this
#
very slippery slope perspective. And as a result of that, eventually the Dow fork did end up
#
happening. That side of the argument did end up winning, but it was super controversial.
#
And one of the things that ended up happening was that the chain actually split. There was a
#
small block, big block Bitcoin type of split, right? Where Bitcoin had Bitcoin, which became
#
small block and Bitcoin cash, which became big block Ethereum. There was Ethereum that did the
#
Dow fork and Ethereum Classic that did not do the Dow fork. Ethereum Classic for some time,
#
it actually really looked like it was going to overtake Ethereum. And basically,
#
as a result of this decision, for a while, it really looked like the whole project might
#
politically collapse, right? And I think that event really showed people the extents to which,
#
if you do this, this is a really high cost thing to do. And since then, Ethereum has not
#
violated immutability in that way since, right? What happened was there are some coins that are
#
frozen in particular addresses because people made some mistake and basically the contract
#
was written in the wrong way and the money is stuck. And there was EIPs made to change the
#
protocol to unstick that money. And there's a lot of money in there. There's I think
#
a something like 400,000 ETH in total, like more money than the Ethereum foundation has, right?
#
And EIPs were made to try, EIPs remember, Ethereum improvement proposals, like proposals to make
#
formal changes to the Ethereum protocol to try to unstick those funds. And there was a big debate
#
about this like a year after the Dow fork. There were even some votes that were made. There were
#
these kind of off-chain, what were called carbon votes, like people could vote with their ETH,
#
but it was kind of off-chain and not binding. And so if something weird did happen with the vote,
#
where like someone started bribing someone, then everyone will just obviously ignore that vote.
#
And most people voted against. And since then, actually, even technical changes to the protocol
#
that make a lot of technical sense, but have the consequence that there's one application that
#
handles a couple of dollars somewhere that wrote their code in a totally wrong way that just takes
#
advantage of this functionality that really needs to be removed to make the thing much more
#
efficient. Even those are quite controversial and take years to pull off, right? But if Ethereum had
#
formalized governance, then it would be much easier to just like capture and for a majority to
#
start doing basically whatever they want, right? So I think the benefit that informal governance
#
has over formal, it is more flexible in this way, right? If a decision is just a technical decision
#
and everyone understands that it's a technical decision, then you can get through with relatively
#
less controversy, right? But if a decision is one that really touches on these deep complicated
#
values questions, then the bar to get it through is higher. And those things, there's even an
#
understanding within the core developer process, like the all core devs calls that decide the
#
technical decisions don't really have power over those kinds of values decisions. And that requires
#
much broader community consensus. And so, yeah, like if in the case of Ethereum, like say Bitcoiners
#
or even, I don't know, I think the FBI holds a bunch of ETH because they keep grabbing it from
#
various criminals or whoever else. If they tried to push some decision through and do a 51% attack,
#
they would just not be able to, right? And so, yeah, illegibility as a defense is good, I think.
#
IH – Is this a bit like the debate in law about written constitutions versus unwritten
#
constitutions? So in some sense, the United States is stuck with the right to bear arms,
#
whereas in the UK, there is no written constitution. And so, if you debated every step of the way,
#
you carry a community along and you're able to question fundamentals.
#
Right. That's one example. That's one parallel. The other parallel is civil law versus common law,
#
right? Civil law is much more kind of statute oriented. It's definitely closer to the ideal
#
of laws being smart contracts. And I think the general impression is that common law is the one
#
that's better at doing things like preserving people's freedoms and property rights.
#
And creating conditions for high economic growth.
#
You mentioned the FBI having a lot of ETH because they've taken it from criminals and stuff.
#
Tell me about your perception of the public relations problem that crypto has in general,
#
that A, there is an issue of it being used for all kinds of underground activity. In many cases,
#
when states wrongfully ban what I would call victimless crimes, but in many cases, not.
#
And also entirely different public relations problem where to the lay person, crypto can
#
often seem even like a Ponzi scheme. It's like the tulip craze. What's going on? That is supposed
#
to be a store of value, but instead it's like an asset. It's going up one day, it's going down
#
the other way. So, how have you grappled with these sort of perception problems over the years?
#
Yeah. I think in terms of the back and forth between the crypto community and governments,
#
you can split things down into two categories of issues. One is issues where actually the crypto
#
community's goals and the government's goals are aligned and it's just a hard problem that there
#
hasn't been a successful resolution to. And then the other category is where there is a genuine
#
value difference between the two sides. For example, crypto people value privacy and there's
#
been projects to try to improve privacy in both Ethereum, but also Zcash and plenty of other
#
systems. But then on the flip side, obviously there's things like anti-money laundering laws,
#
but then there is also this much stronger effort to push the idea of a cashless society,
#
which is something that both has a lot of benefits in terms of just things like convenience,
#
but at the same time, it basically is rapidly pushing toward a world where forms of basic
#
privacy that have existed for thousands of years are essentially disappearing within a decade.
#
Even if a hybrid cashless society compromises on that cash a lot, one thing I know that happens
#
in China is, and probably in a lot of other countries too, is the paper bills that do still
#
exist, they have serial numbers. And so if what happens is that someone takes a bill out of an
#
ATM and then pays someone else with it and that person then puts their money back into an ATM,
#
then actually even that cash link in the middle is totally not anonymous. The government sees it
#
because they see what got out of the ATM and what went in. And so for cash to provide privacy,
#
it actually needs to have that network effect and be reasonably mainstream. And even if there are a
#
few holdouts that keep using cash, that network effect is rapidly going away. And the scary thing
#
is that to a lot of people, especially some of the international policy elites that are really
#
pushing the cashless society concept, this ability of the government to see all of
#
individuals' transactions, that is actually a benefit. And I think we are definitely seeing
#
pushback against that. And sometimes we see pushback against the pushback. Even yesterday
#
I saw this fun take from, I forget, it was either the Atlantic or something else where it said
#
something like, a political party in Austria proposes the far right idea of enshrining cash
#
in the constitution. And it's like, okay, great. They're basically trying to argue the idea that
#
supporting the privacy of cash is far right now. Six months ago, caring about fitness was far right
#
and we're in a new era, we don't even know what words mean anymore. But this is a scary thing
#
because of how quickly it's getting normalized. And once it gets normalized to enough of an
#
extent, it's hard to go back. And I think this is part of this story where I'm definitely
#
concerned that the balance of power between individuals and states risks going pretty
#
rapidly into the state direction from over the next few decades. I think this is not something
#
that's always true of technology. For example, if you look at the original internet, I think the
#
original internet actually did empower individuals and empower groups that did not have power before.
#
If we even think about military transitions, I know of historians that talk about the transition
#
from bows to guns. And the interesting thing about that is even though the early guns were
#
actually significantly worse than bows, a bow required 10 years of skill to use. And so it
#
empowered professionals and elite armies and noble families and all of those things. And
#
guns could actually be used by regular people. So technological shifts do go in both directions
#
all the times, but it feels like this most recent wave. I feel like early social media was
#
more on the pro-decentralization side, but late social media goes in the other direction.
#
And then if we talk about these casual society initiatives and AI and all of those things,
#
there's definitely a lot of risk there. So that's an area where I think it's good that the crypto
#
space exists. And in some ways the crypto space possibly is the largest thing that's offering
#
pushback against this idea that the way that digitization has to happen is any way that
#
centralizes power more. And so that's an area of genuine disagreements. But at the same time,
#
there are areas of agreement between the two groups. If you think about something like just
#
preventing large-scale hacks and preventing thefts. The US government does not want $75
#
million to go to North Korea. Well, the DeFi people that are getting stolen from also don't
#
want $75 million of their dollars going to North Korea. The government doesn't want people to get
#
scammed. Well, people also don't want to get scammed. And so these are areas where there
#
actually is a lot of alignment. And I think it's important to not take the maximalist posture and
#
try to say that literally everything the government is trying to do is bad really loudly
#
because that just risks creating too many enemies. And I think the reality is that there are lots of
#
cases where there are aligned interests. And I think even among people within the government,
#
there are people who are totally willing to accept moderate views on questions like
#
privacy and questions like people's right to have assets that are independent of
#
state-based issuance systems, for example. But they're not going to be pro-DeFi people
#
losing $75 million of their money and that going to North Korea. So there's these
#
areas on which there's really a room to try to push forward on where I think part of the answer
#
is that the community just needs to continue stepping up and doing a better job. There is
#
part of it on which I am still a bit of an indefinite optimist on the question. And I think
#
the reason why I say this is that if you look at the worst situations that have happened in terms
#
of things like scams and hacks, it usually happens during one of these bubbles where the crypto
#
ecosystem grows by a factor of 10 and you have totally new people. And so all of the harder end
#
lessons that were learned during the previous cycle are totally not known by the new people.
#
But the problem is that the scammers have been there the whole time and they just keep getting
#
better and better and bigger and bigger. And the reason I'm optimistic is that we've actually
#
already hit the ceiling of that kind of growth. More than 10% of people in lots of countries
#
already have heard of crypto. In some countries, more than 10% of people already have crypto.
#
In big parts of the world, there just is no opportunity to do another 10X anymore.
#
And the only thing that you can do is reach existing people and convince them to not just
#
think about crypto once a year when they see it on the news, but actually use it. And so
#
I think that's healthier and there is at least not as much room for the exact same kinds of
#
attacks and hacks and those things to repeat over and over again. I think if you ask most
#
people in the crypto community, 2023 is much healthier than 2021. 2021 was this very bubbly,
#
very sort of new paradigm kind of era where people were actively pumping things.
#
Terra Luna was the big one. There were a lot of people who were just seriously saying like,
#
hey, this project clearly is the future and uncollateralized stablecoins, they have scale
#
and they're going to do better than collateralized ones and Dukwan is going to defeat Dai.
#
Dukwan himself said, by my hands, Dai will die. Of course, a year later by his hand, Terra ended
#
up collapsing and a year after that he is in jail in Montenegro. There really was that era where
#
the people that were focusing on the fundamentals were getting kind of ignored and kind of treated
#
as being stodgy old carmagians. But then the Terra collapse happened and then six months later,
#
the FTX situation happened and then six months after that, I think it was either Blockfire or
#
the Barry Silbert Empire or some of these other groups. I forget exactly the order in which
#
things happened, but some of them went down too. And recently, Richard Hart got charged for
#
securities fraud. So it seems like things are improving. The thing that you would argue
#
historically is like, oh, even if there's improvements, the next time there's a bull,
#
that's going to disappear. But the reality is that here, the future bull is not going to be
#
like previous bulls because there isn't this 10X massive total noobs to reach out to anymore.
#
So that's my reason to be hopeful, but I definitely don't put more than 50% of my hope on that.
#
So if you think about the issue of thefts, for example, one of the big things I've been talking
#
about over the past year is this idea of account abstraction. Basically, instead of your wallet
#
that holds your money being controlled by one key, you could have your wallet controlled by
#
multiple keys. You could have, for example, five keys where you need three of them to approve a
#
transaction. I personally use this to hold most of my crypto. If anyone's listening to this is
#
curious about which specific solution I use Safe, formerly called Gnosis Safe, if you just Google
#
either of those and then plus Ethereum or plus wallet or whatever, you can find it. It's probably
#
the best practical way to at least hold Ethereum assets right now. And it does this thing. You can
#
specify a list of keys and you can set it either half of them or two thirds of them or whatever to
#
actually send a transaction. And the hope there is to basically make things like people losing funds
#
accidentally and people's funds getting stolen because of someone hacking into their computer
#
or whatever, not an issue anymore. That only solves part of the problem. There's other parts
#
of the problem that can be worked on, I think, in a way that improves the goals of both sides.
#
On the privacy side, for example, one of the interesting things that I'm working on and
#
collaborating with some other people, actually including some policy academics, is this idea of
#
proof of innocence. Basically, the way that this works is that if you look at how some of the
#
advanced privacy solutions in crypto work today, so there's Zcash, TornadoCash, like some of these
#
others, the way they work is basically, let's say you take one coin and you deposit it into a pot.
#
Later on, you can take a coin out. When you take a coin out, you don't have to point to the specific
#
coin you put in. Instead, you create this cryptographic object called a zero-knowledge proof,
#
and the zero-knowledge proof proves that you put one coin into the pot, and it proves that you put
#
in a coin or that you're pointing to a coin that has not yet been pointed to by another withdrawal.
#
Aside from that, it doesn't reveal anything else about the coin.
#
Basically, if 10 people put a coin in, 10 people take coins out, then the system can make sure that
#
if you put one coin in, you can only take one coin out, and you can't take three coins. If you put
#
zero coins in, you can't take anything out. But the system also makes sure that the link between
#
which coin went in and which coin went out is totally private, and nobody except for the
#
holder of the coin can see it. Pretty powerful privacy technology. There was a recent legal
#
situation about two years ago where basically tornado cash got sanctioned in the United States,
#
and the core developers into the project got into some serious legal trouble, I think,
#
unfortunately. Those cases are actually being challenged on things like free speech grounds.
#
The story that the government tells is basically that lots of DeFi projects started getting hacked
#
by North Korea, and so North Korea is basically pushing their money through these systems to
#
anonymize it and then using that to fund things like weapons programs. One way to look at that
#
question is privacy bad because of this. Another way to look at this is privacy is the cost of
#
having a society where governments like North Korea don't take over everything, and you gotta
#
eat the loss. A third approach is to say, well, we can actually be more clever, and the technology
#
lets us be more clever. Here's what you do. When you withdraw, instead of making a zero
#
knowledge proof that proves that you're one of any of the deposits, your proof can instead prove
#
that I was one of the deposits, but I was not one of this list of large-scale DeFi hackers.
#
If you make a default interface where people can basically subscribe to lists, what the
#
major instances of hacks and thefts and these kinds of things are, and you can even make these
#
lists community curated potentially, then when you withdraw, most users of the system would be
#
automatically proving that not just that they deposit into the system, but also that they're
#
not one of those people. Then they can take their coins out, and then if they later send their coins
#
for example, in exchange, the exchange would know that whatever their source of funds is,
#
it's not one of these bad things. If you look at it from the point of view of the hackers,
#
well, the hackers would not be able to make that proof because you can't prove a statement that's
#
not true. The hackers would only be able to basically mix their coins with each other,
#
and they would still be in trouble. This is something that I think is really cool because
#
it still preserves very meaningful privacy and anonymity for regular users. It does so without
#
stuff like relying on back doors where we trust that there's one organization that's totally going
#
to only look at funds to screen for criminal activity, and they're not going to give that
#
key to anyone else. No back doors. Government doesn't see things. They only see the specific
#
facts that individuals are proving that their funds, wherever they came from, did not come
#
from a hacker. One way to look at this is if you think about cash and the privacy that cash had,
#
with cash, it's very easy to totally anonymously move $100. It's harder to anonymously move $100,000
#
and it's even harder to anonymously move $100 million. If you do that, then lots of people
#
are going to see it. The new equilibrium here would basically be if it's going to be easy to
#
mix a lot of things, but if you're mixing things from some public event where it's clearly something
#
bad happens, then you're going to have a very hard time there. I think there is room to use technology
#
and these kinds of ideas to really do a lot of good and try to satisfy
#
the parts of the government's concerns and public's concerns that are totally understandable.
#
Definitely, I think the crypto community will have to continue to be the source of pushback on
#
important questions like making sure privacy doesn't just completely go down to zero over
#
the next couple of decades. That's much easier to do and get people on your side to the extent
#
that you can work collaboratively with objectives and goals that you can relate to without making
#
any sacrifices that are unacceptable to you. You totally actually should go and do that.
#
I have a narrow response and then a larger question. The narrow response is that
#
you say the negative list is proven hackers. Now proven by who? Proven in the eyes of a
#
criminal justice system. Now you're at the tender mercies of a government's capabilities to work
#
correctly and fairly in a criminal justice system. I can think of many countries in the world
#
where opposition parties will immediately be put on that negative list. The moment you go down
#
that route, now you are intermediated by the extent to which a government actually works
#
with rule of law. That's not a state that can be assured in many, many places in this world.
#
That takes me to the larger question. What is fascinating about Ethereum and that goes well
#
beyond the currency orientation of the Bitcoin world is that it's a dream of a digital economy.
#
It's much more than a currency. Yes, of course, it's a currency, but it's much more than that.
#
And then it's always interesting to ask that where does this world interface with
#
the men with guns? Business as we know it, economics as we know it, is ultimately backstopped
#
by the men with guns because you get to contract enforcement and then you go to court and you go
#
to jail. And the entire edifice of the market economy is ultimately backstopped by the men
#
with guns. So where are the men with guns in your world, in your vision?
#
I think those are important things to keep in mind. The proof of innocence ideas, they're
#
not perfect and how well they do definitely depends a lot on implementation and depends a
#
lot on the environments that they're in. And I think it's also important to remember the
#
counterfactual, which is that a country where the government can force people to include an
#
inclusion list that includes all kinds of political opposition, for example, is also one where they
#
can ban crypto entirely. And I think actually banning political opposition is probably
#
technically harder to do than it is to go after things like large scale thefts, for example,
#
because if let's say we think about a political group that's raising donations for some cause or
#
campaign or something like that, then you can actually do is you can use technology called
#
stealth addresses where basically people can send money to you, but that money doesn't actually go
#
to one single plot. That money goes into a set of totally separate addresses that actually look
#
like normal addresses. There isn't this one big event that happens where you can go and flag it.
#
I think these are things that will evolve over time. And I think in all of these situations,
#
there's a risk that we end up getting it wrong in one direction or the other. And I think to some
#
extent, that's a risk that does have to be taken, right? Because otherwise, if you try to grab too
#
much, then that does create more ammo for governments to ban things entirely and have enough
#
of an ability to do that without getting really strong pushback. But then on the other hand,
#
there's definitely risks of not asking for enough. And it's a complicated political art that I think
#
lots of people fail at all the time. Even some things that some of these encrypted messaging
#
apps are faced with all the time and even things like Twitter and when they choose to accept
#
requests from the government to take down content and when they choose to challenge them,
#
and it's so easy to fail in either direction. I definitely don't want to say that the challenge
#
is easy and that there isn't a difficult political challenge involved there. I think one of those
#
things where the community is really going to need to work hard on and not just on the privacy
#
question, right? Also on questions like protecting users from theft, for example, right?
#
There's an easy way where that can go wrong, where for convenience reasons, users will end up
#
using an institutional guardian as one of their keys and that also ends up compromising their
#
privacy in a different way. Or they start using guardians that look independent, but if they can
#
all be strong-armored by the same government, there's lots of ways in which that can go wrong,
#
too. And sometimes it does happen that the good thing is uncomfortably closer to the bad thing
#
than we would like. This is one of the reasons why I guess I'm more of this definite optimist
#
recently, right? You can't just create these very abstract forces and just hope for the best.
#
Sometimes there's a lot of this really detailed work that needs to be done to actually make sure
#
that a specific good outcome happens. So that's one of the issues. And then on this question of,
#
yeah, where do the men with guns come in? I obviously think they exist, they continue to
#
exist. And I think, unfortunately, the world is entering into a trend where I think they're going
#
to get more powerful. There's technological reasons why. I think there's also the broad
#
political reason, which is that over 10,000 years of human history, human freedom and human life have
#
generally not been at the top of the priority lists. And the 20 years that are between
#
the end of the Cold War and about a decade ago feel like they were this uniquely peaceful time
#
in human history where perception of threat was low and people were willing to be open to each
#
other. But the challenge is often the things that perception of threat itself is the thing that
#
drives agencies to do things that are evil and people to passively accept those acts of evil.
#
And those acts end up themselves being the threat from someone else's perspective. And so it becomes
#
a cycle. And I do worry that it's, to some extent, regressing to the mean. There is an
#
active war going on in Europe that's not World War II scale, but definitely similar to something
#
like Vietnam scale. And there's people who worry that we're in the equivalent of where 1931 was
#
for World War II, like we're there for World War III. And I think these futures are undetermined
#
until they actually happen, but there's reasons to worry that the influence of the guns is
#
right now on an upward trend. I think the thing that does not work is I think sailing directly
#
downwind against the wind does not work, right? If you're a sailor, then you can actually sail
#
against the wind, right? If the wind is blowing south, then you can sail north, but you cannot
#
go north directly, right? You have to first go northeast and then go northwest and then go
#
northeast again, right? You have to be smart and somewhat indirect about it, right? And the
#
equivalent of sailing downwind against the wind is basically here just like going out and publicly
#
saying like, hey, what government does is slavery and theft and their laws are illegitimate and
#
we're going to really loudly and openly violate them and come and get us, right? And there are
#
specific social contexts where sometimes that's fine, right? But those specific social contexts
#
are the contexts where those laws already have lost a lot of legitimacy already. And there's probably
#
even lots of people within the governments that are totally on your side, right? In a lot of other
#
cases, what happens is they do come and they do get you and you're in trouble for a long time and
#
you haven't actually made an impact. I think the weaver that we do have is I think people
#
overestimate the extent to which these state ecosystems have one mind and one will. They
#
often have lots of different components that end up interfering with each other in all kinds of
#
complicated ways, right? Within the United States, there's lots of examples of this, right? Weed and
#
psychedelics are federally illegal, but in places like Colorado and California and other places,
#
they're totally normalized. There's sanctuary cities where you have literal government agencies
#
providing services to undocumented immigrants. There's unrecognized countries in the world or
#
countries with limited recognition that have this weird status where they're still able to peacefully
#
operate, but it's somewhat less clear what actually would happen if people started really
#
pushing hard on that particular situation. Within a particular government, there's
#
lots of situations where if the government tries to do one thing, then it will get through. But if
#
the government tries to do another thing, then even the police itself would end up rebelling
#
at some point, right? There is a political game that can be played and ultimately even the people
#
in charge, they don't want to be maximally evil. They want to stay in power, right? And whether
#
it's in a democracy or in an autocracy, and even autocracies care about their international image
#
to some extent, right? And they don't want their best and brightest people to leave, for example.
#
And so there are margins on which you can play. There's an art to creating something that
#
works with them and works with people's values enough that it can continue to survive and
#
continue to prosper. But at the same time, it does make an impact and it does push against some of
#
the more dangerous of these trends. I think there really is a way to do it, right? I think
#
the reality is that no one is universally statist, right? Even statists of one country
#
are often very afraid of the status that are in charge of other countries, right? The idea that
#
people should be able to act independently of each other is something that I think almost everyone
#
in the world believes with respect to at least one context, right? So there's always, I think,
#
things that you can appeal to. And it's good to make those appeals and, at the same time,
#
push forward with the technology that has the properties that you actually need and,
#
at the same time, try to push against any totally unnecessary harm that ends up happening for
#
whatever reason. I think it's not easy, but I don't think this century is easy.
#
The reason crypto is so attractive to people like us is that fiat currencies essentially seem to me
#
taking us down the road to serfdom, right? If the state controls our wealth, if the monopoly of
#
violence requires a monopoly on producing money, one way out of that is crypto. However, besides
#
this basic moral objection, there are sort of consequential aspects to looking at different
#
currencies and the impacts that they have. Ajay has written about and spoken about the five
#
attributes of currency and how you can compare different currencies to each other and to crypto.
#
So Ajay, I'd like you to elaborate on that because I really love Vitalik's response.
#
There's been a lot of discussion in your world around debates like the United States dollar,
#
and you described some of those more extremist views that we are at the end of the world now
#
and the US dollar is about to collapse and so on. And from a distance, we think that the US dollar
#
is actually doing pretty good, that the US Fed is a nice, well-functioning institution or the
#
European Central Bank. But you are in a much more end-of-the-world scenario in a Zimbabwe, say,
#
where man-made money, where state-made money has literally broken down and they had a hyper
#
inflation only recently. Or for instance, Amit and I were talking that when the Wagner rebellion
#
started in Russia, there was this little rush of many people in Russia buying cryptocurrency
#
because you're gearing up for that end-of-the-world scenario. So it's interesting to think of a
#
spectrum of capability on the part of state-made money. And then you start thinking about these
#
things as more shades of gray rather than a frontal debate around Bitcoin versus USD or Ethereum
#
versus USD. So I think of five dimensions which are interesting. One is store of value,
#
that you need price stability. We only got to inflation targeting in New Zealand in 1987.
#
So after a thousand years of fumbling and failing on fiat money, we finally got to inflation
#
targeting. In India, we've had a problem of demonetization, where one fine day a government
#
announces that your pieces of paper are worthless. The second dimension is capital controls, where a
#
government tries to interfere with the freedom of people to move money across the border.
#
The third dimension is the access to APIs and access to the core IT systems. Lots of governments
#
have this multi-tiered system, where there is an RTGS at the core of the central bank,
#
and only banks are permitted. And then a whole bunch of technology players can only go to banks.
#
And so as an end user, as somebody in the economy, I face the frictions and the vulnerability
#
of going through this chain as opposed to being able to directly open API access to the core
#
systems, which is a consideration for the way many people might like to think. So like this,
#
when we think of these aspects, the fourth is privacy. You've already talked at length
#
that there are some miraculous things about cash. For thousands of years, cash has been a part of
#
the deep privacy of the human being, and that is increasingly being stripped away. So there are
#
these many dimensions in which we should think of currencies. And it takes us back to the human
#
agency, where each human chooses, that each person has a choice. You're not just a prisoner
#
of the currency of your country, but you actually have a choice of looking at the world. And maybe
#
in Zimbabwe, you want to use more US dollars. Maybe Indian rupees are widely accepted in Sri Lanka,
#
and so on. So all these five angles of acceptance, privacy, API access,
#
the extent of price stability, these are all considerations that are on the minds of different
#
people. And I think that this creates a gray zone rather than black and white. And then you
#
don't have to get to an apocalyptic discussion around the US dollar. And maybe in countries with
#
good institutions, state-made money is a better offering. But there are many governments in the
#
world where this is less so. And then the new world that is coming up may be far more attractive
#
in some of these places. Yeah, I mean, I agree with that perspective. I think I actually have
#
agreed with it for more than 10 years. I remember even writing in the Bitcoin magazine back in 2012
#
that places like Argentina and Iran are just places where the immediate fiat collapse narrative
#
just actually makes more sense than it does in places like the US. And I think that's definitely
#
true. And I think in those places, cryptocurrency already is being used by many people. I remember
#
when I visited Argentina back in 2021, I saw there were huge amounts of people that were using,
#
whether it's BTC or ETH or USTC or USDT or whatever, for all kinds of purposes. There's
#
people using it for just transactions in regular life, often things like selling cars or selling
#
houses. There's even coffee shops that accept cryptocurrency. I remember one time I was walking
#
around in Buenos Aires on Christmas Day, and at the time, most of the stores were closed,
#
and I just wanted to go somewhere to get a tea with my friends. And the very first shop that we
#
found just randomly opened up, and the owner recognized me. And I asked the owner if he had
#
an Ethereum account and if we could pay in crypto. And he said that he did, and we could.
#
So whether for savings or for business, people there already do use all kinds of cryptocurrency
#
all the time. And for them, it makes sense. Argentina has been averaging something like
#
30% annual inflation for basically the last century. And then that's a medium case. I think
#
I've described Argentina as a low state capacity, high people capacity country.
#
It's in an interesting position because lots of institutions are broken, but they're not
#
fully broken. And because they're not fully broken, that still creates an opportunity for
#
people to thrive to some extent there. And then in Venezuela, unfortunately, the most successful
#
Venezuelans end up going whether to the US or to other Latin American countries and setting up
#
their businesses there. And then aside from Argentina and Turkey, its exchange rate has been
#
going down pretty hard over the last decade. I remember transiting Istanbul airport for the
#
first time something like 10 years ago, and I remember the rate of a try to USD being 3.5 to 1.
#
And of course, today it's something like 27 to 1. Obviously, rubles in Russia as well, though I
#
think in Russia, it's a combination of fear of hyperinflation and fear of having everything
#
you have grabbed up by the government. And even more so if you do pretty much anything connected
#
to any kind of opposition. And in Africa, there's some countries where this happens as well. So
#
it's definitely a real phenomenon. And in those cases where the existing fiat already has that
#
level of instability, people do switch over to crypto all the time already. People are clever
#
when you have a basic need for some kind of thing, then people do find a way to fill that
#
need and crypto is there. And before crypto became a thing, this was US dollars. So El Salvador
#
dollarized and Ecuador, I believe, was dollarized as well. And in a lot of those situations, there's
#
good arguments to be made that dollarization is a net good. Even though you don't have control
#
over your own monetary policy, at least you have basic economic stability. And that's much better
#
than having an asset that depreciates by somewhere between 20 and 50% every year and has a risk of,
#
in any given year, just blowing up and hyperinflating entirely.
#
And then now, of course, there's El Salvador doing its experiments of trying to move from
#
dollars to Bitcoin at a government level. And I have very complicated feelings about that. I
#
think there's a lot that went wrong in the execution. And generally, doing those
#
kinds of things coercively, and especially both coercively and in this low-quality haphazard way,
#
you just easily end up causing a lot of problems. But at the same time, it makes sense why
#
Bukele thought that it made sense to do that. Because I think for a lot of governments,
#
the preference order is number one, they're in control, then number three, someone else is
#
in control, and then number two, no one is in control. And not always, but I think sometimes
#
this is a thing that happens. And I think it also explains why even though a lot of authoritarian
#
countries have been unfriendly to crypto, a lot of them have been less unfriendly to crypto than
#
they have been toward centralized applications that are being made in the countries that are
#
their great power rivals. Because you have the two fears. Your one fear is that your own
#
intelligence agencies are no longer able to see everything. And then your second fear is that the
#
US is able to see everything. And I think for different people, it's a different combination
#
of both. And the presence of that second argument often ends up convincing people who would be
#
ordinarily scared of just the first argument. And so the hope is that crypto-based and
#
decentralized solutions would not trigger the second. And so people basically see that
#
their governments would have just the first to contend with. And in a lot of those cases,
#
there might even be enough pressure for the decentralized stuff to be more accepted.
#
So I think the stakes are true both on the monetary level, which is, as you say, definitely
#
not a big deal in the US of today, but definitely a big deal in some pretty important countries
#
that actually total up to several hundred million people. And I think on the API and
#
the openness of the API side, it's kind of similar to what I said about the tech platforms.
#
Digital currency with any API is a kind of tech product. And the best thing for a country from
#
its intelligence agency's perspective is for its citizens to be using the CBDC so they can see
#
everything. The second best thing is crypto or some properly private solution. And the third
#
best thing is for them to be dependent on some foreign, whether CBDC or corporate
#
payments platform. And so I think it is the case where I do think that crypto and stablecoins on
#
top of blockchains do have some degree of opening. Vitalik, I want you to talk to us in India
#
about the economics of the digital economy, about the real world applications
#
that have emerged in the Ethereum world. All too often, we hear very serious, famous people
#
dismissing the entire crypto world as being some fringe rubbish that is a subject of some bubble
#
and is entirely irrelevant and in any case is going to be completely banned by law enforcement
#
agencies. To what extent is that a fair description? And can you show us living,
#
breathing examples of genuine economic activity, of genuine business that has emerged in the
#
Ethereum world and that might trigger of thinking on the part of some of us that
#
could I build something like this? And to add to that, in 1943, Thomas Watson,
#
who was the president of IBM, famously said, I think there is a world market of maybe five computers
#
and people have been similarly dismissive of crypto. And it's all about passing that point
#
where you begin to realize that, man, this is really serious. And I think therefore that
#
goes into your question about concrete examples of saying that, hey, this is not a world market
#
of five computers kind of thing. This is now real. Yeah. So I think there's a few different
#
categories of applications that I'm excited about and that I think are already starting to happen
#
now. I think the first and most important is just everything around payments and money.
#
And I think making payments internationally is a very big one. So for example, I've done
#
a lot of philanthropy of various kinds. I've donated groups looking into issues of AI risk
#
to all kinds of biomedical research. The dog coins last year that I ended up donating,
#
to which the largest share is being actually spent by a group in India now called Blockchain
#
for Impact. And basically, initially focusing on the COVID situation that was a really big deal
#
in India back then, but then now focusing on upgrading India's local medical infrastructure
#
and talent in all kinds of ways. But then there was also, in addition to that, portions of the
#
money ended up going internationally. There's an effort called Balvi. There's another one called
#
Conroe, which myself and some other people are a part of that's funded all kinds of stuff ranging
#
from long COVID research to vaccine development, including maximally open source vaccine development
#
to ventilation, early detection of pandemics, all kinds of things. Basically, solve pandemics in
#
ways that are maximally friendly to preserving people's freedom and their ability to live their
#
normal lives so that people don't even get to the point where we need to think about the other
#
approaches, I think is the philosophy. And that ended up supporting a whole bunch of things
#
all around the world in all of those areas. And most of the payments were actually done through
#
crypto. And doing the payments through crypto is genuinely much easier, much better user experience,
#
much quicker and simpler than doing things through bank wires. And this is feedback that we've gotten
#
from all kinds of people. And I think this is true not just in the biomedical space, it's true
#
for all kinds of projects that are trying to get funding. It's just actually much easier to move
#
money around, especially if your project involves a whole bunch of beneficiaries and a whole bunch
#
of contributors in many different countries around the world. So I think it's important to just start
#
with the most basic app because even though ultimately Ethereum is all about enabling the
#
other stuff, that one basic thing that even Bitcoin started with is just so important all
#
by itself. Then expanding out from there, there's different things that you can do with money that
#
are possible in crypto that are not possible otherwise. The concept of multi-sig wallets
#
that I mentioned, you can also use those to have organizations manage funds. And you don't need to
#
trust one person with the money. If you have a group of seven people, you have a wallet between
#
them and four of them need to sign off on a transaction. And this is just a really powerful
#
and convenient tools for people to manage funds, also for organizations that want to be transparent
#
to be able to spend their funds transparently. And it actually works quite well for a lot of people.
#
With smart contracts and the DeFi, it can potentially go out into a bunch of different areas
#
giving people in less privileged parts of the world access to assets that currently are only
#
available in rich parts of the world, giving people the ability to do things like decentralized
#
community savings and insurance, for example, groups of people just coming together on their own
#
pool their funds and help each other save and cover for each other's expenses. There's a lot
#
of projects, especially in Africa, because in analog offline version of this was just part of
#
the culture in many parts of there for quite a long time. And there's projects that are trying
#
to basically digitize that. Starting to go beyond the money use cases, I think in the non-financial
#
ones, the whole decentralized identity and social media thing is interesting. Because the way that
#
all of that stuff works on the internet today is you have a Google account and you use your
#
Google account to sign into everything. Google sees everything that you're doing and Google
#
basically controls the digital representation of your identity. What you can do on Ethereum is
#
you can basically just make your identity essentially be your wallet. And for security,
#
you can do all of this multisig and recovery stuff that I talked about. And I actually think
#
that's better than the centralized forms of recovery. Because today, if something goes
#
wrong and you forget your password, it's actually much harder than people think to go and appeal to
#
these companies and get it back. I've known people who are just not able to do it at all.
#
And with your own accounts, you can set it up and you can give three of your five family members
#
or friends the ability to recover. And then you can start plugging that into other things.
#
For the last year or so, as I mentioned, there's been a lot of interest in trying to make some of
#
these alternative social media applications. And there are some that are within the crypto space,
#
like Lens and Farcaster are probably two of the largest ones, where their goal is to basically
#
get to the point where social media is a thing where the base layer of people being able to post
#
what they want is either on chain or on some kind of decentralized network that is similarly
#
decentralized, but maybe not quite a chain because other data structures make sense when
#
you're trying to do much larger amounts of information. And that directly plugs into
#
people's accounts that are contracts on Ethereum. And then if people wants to prove things about
#
themselves, then they're able to do that cryptographically because there's other records
#
that publish information either directly onto Ethereum or kind of in some zero knowledge or
#
hashed form already. And then if you want to do things like content filtering and moderating or
#
just prioritizing what people see, then you can have different people have different interfaces
#
that do that, that all points to the same underlying data. And so with this kind of approach,
#
basically you don't have this problem where if you want to create a new social media thing,
#
you have to start from scratch and from zero users. You can instead make a different view
#
to an existing ecosystem and your new view can just go and show different things. So that's
#
something that I think is interesting, especially in this context where a lot of people
#
are concerned about these big social media platforms that we all depend on them. Who's
#
actually running them and how might their opinions randomly change over the next six or 12 months,
#
creating this more decentralized alternative and building those kinds of things using
#
blockchains as a backend basically means that you can build these ecosystems where the base of the
#
ecosystem doesn't require everything to be built on top of one particular company.
#
The reason why this doesn't happen in the centralized world is because
#
in order for someone to build these common databases, someone needs to run them and then
#
other people are always going to be concerned. Well, do I actually trust them? And there's
#
different kinds of trust. There's a trust in terms of, are they going to just update the database in
#
a way that follows the rules? Are they going to get hacked? Are they going to just go out of
#
business and disappear? Are they going to start charging for their service? We saw Twitter,
#
it was open access for anyone to read up until a month ago and then now it's just suddenly become
#
closed for most people to read. You don't want to build on top of things. They can just arbitrarily
#
change the rules on you and decentralized services, they can actually give that kind of trust. So
#
using decentralized services as a base layer and then building all of these more centralized apps
#
as of use that are on top of that, that go into these different applications that are on chain,
#
that are able to talk to and interact with each other, that can create a way to actually solve
#
those problems. And I think this is something that has relevance in a lot of areas. I mean,
#
obviously, if you're a low income person and your current concern is making sure you have enough
#
food and your children can get a decent education, making sure that your ability to tweet is
#
credibly fair and neutral is not on the top of your mind. But I think from a macro perspective,
#
the ability to just be able to have tech startups and businesses and
#
economies that do not depend on a thing that is based in either Silicon Valley or Beijing and
#
subject to the random directions of one of those two places' policies. I think that's something
#
that's going to appeal to a lot of people. Then there's enterprise applications. So basically,
#
the idea here is you have different companies, like the status quo, you have different companies
#
that have their own spreadsheets, and then they use complicated spreadsheets or complicated
#
techniques to make their spreadsheets match with each other. And if they don't match, they
#
use more complicated techniques to do whatever kinds of reconciliation. Instead, you have one
#
shared spreadsheet, and the cells on the spreadsheet can be encrypted if you want,
#
but it's still one shared spreadsheet and all the updates happen on that one shared spreadsheet.
#
That makes it easier for all kinds of processes that involve collaboration across an industry,
#
especially internationally across an industry, to happen in a way where if something goes wrong,
#
you can actually figure out what is the piece that gets stuck. Paul Brody has been very into
#
this for a long time. He was in EY, and they're trying to build something that's based on this.
#
This has been attempted for a long time within the crypto space, but I think the main way in
#
which it has been attempted up until maybe around 2020 is people would try to make their own
#
blockchains, what are called consortium chains. But the problem was that consortium chains,
#
they ended up being the wrong kind of compromise. The good kind of compromise is the one that's
#
good enough for both sides. The wrong kind of compromise is the one that alienates both sides.
#
And so the consortium blockchains were clunky enough to be a hurdle for people to adopt,
#
but they were also centralized enough that people still did not trust them.
#
And the way the new technology works is by using zero-knowledge proofs to provide scalability and
#
privacy, but then leveraging existing public chains like Ethereum as the base. So that's
#
something that's starting to happen more and more. And then things in this Ethereum-based identity
#
and attestations ecosystem, it's starting to happen. I will admit that today it's mostly
#
happening within Ethereum land and for things that are relevant to the Ethereum community,
#
but you could imagine versions of that being applied, for example, for job boards. If people
#
are looking for work and they want to prove things about their past work experience,
#
you can obviously digitize existing credentials, but what about more informal kind of credentials?
#
You made a pull request to some major piece of software and it got accepted. That is a
#
provable micro-credential that says something about your quality as a software engineer.
#
Doing more of those kinds of things, I think, is something that is totally possible to do as well.
#
With the combination of blockchains and zero-knowledge proofs, you might actually
#
have enough technology to be able to do it. NFTs, I think, are an important sector to
#
talk about just because lots of people do talk about them and I think gaming is a somewhat
#
adjacent area. This is an area where I have somewhat mixed feelings about because I think
#
there's a good version of those ideas and there's a bad version of those ideas.
#
The versions of those ideas that I'm not a big fan of are like there's these NFT party
#
events in New York City where you have a dozen Lamborghinis parked outside and you need to
#
have a digital monkey that costs enough money to feed someone in an Indian village for a lifetime
#
as a pass in order to get into one of these parties and they go and trade their digital
#
monkeys for $2 million or whatever. To me, this just feels not too interesting and kind of
#
uninspiring, but there are versions of NFT culture that can work well.
#
One NFT culture that I respect is the NFT culture in Africa. There's this cultural movement in
#
Africa called Afrofuturism that basically combines together images and styles from Africa's
#
pre-colonial traditional culture and combines them with these optimistic forward-looking ideas about
#
humanity going out into the moon and the stars and having robots everywhere and all of those
#
nice things and makes those two really fit together in a coherent way. There's a community of artists
#
that makes this really nice art that is based off of these ideas and this is a good source of income
#
for the artists because they're basically able to sell these internationally and able to get quite
#
a substantial amount of income that they would not be able to get if they were just selling
#
within their local market. At the same time, this is a way for them to basically promote and spread
#
their culture. That's an example of something that I find interesting. I think in gaming,
#
the story is kind of similar in that in order to make a good game, first and foremost, the game
#
has to be fun. In order for a project to be sustainable, all participants in the project
#
need to feel like they're getting out more than they're putting in. From a money perspective,
#
it sums up to zero. In a long-term sustainable project, for people to be gaining money,
#
there must be people who are losing money. And those people who are losing money must be willing
#
to keep losing it because they're getting some other kind of value. It's a game that they actually
#
enjoy. The blockchain games that we've seen so far, there was a big boom of these back in 2020
#
and 2021, but they did not really survive up to now basically because they tried to use the casino
#
aspect as a substitute for the fun. That works well in a bull market because everything is rising
#
in price and so every participant is gaining money. In a bear market, people are losing money
#
and people need a reason to keep coming back despite losing the money. They were just not
#
able to provide that because they just did not think enough about the aspect of making the game
#
fun in a way that's independent of the money aspect. EVE Online is not a blockchain game,
#
but it's an example of a project that's done that much better. There's spaceships that are
#
worth tens of thousands of dollars that regularly get destroyed in battles, but it has its audience
#
and it has its people who actually really enjoy it. This is something that the blockchain-based
#
stuff has not really yet cracked and there's definitely a desire among some people to try
#
to do play-to-earn type of things where you have some players that are actually getting
#
some amount of money. Back in 2021, some of these projects did manage to give some level of earnings
#
to their participants. I think it got up to the $400 a month level or something like that briefly,
#
but then other people were actually willing to pay for that, but it was not really sustainable.
#
So there's challenges in there that have not been cracked. I think creating digital online worlds
#
that have some kind of financial component and that also have some kind of non-financial reason
#
for people to want to interact with them and be part of them is something that could be done
#
better and I think there's opportunities to do it better as well. NFT in games, mixed feelings,
#
it's complicated. And then I think there's lots of other smaller different spaces like prediction
#
markets. In the last week, the whole LK99 stuff, superconductor stuff has been happening and
#
prediction markets have actually been one of the best sources of very down-to-earth aggregated news
#
of what should I feel about whether this is real or not, which is not something that you can get
#
just by looking at this very chaotic and contradictory Twitter vibe by itself.
#
So that's still fairly niche and there's this long list of interesting niche things that I think are
#
valuable to all kinds of people that are slowly growing, but there's definitely still a long way
#
to go. Can I ask you to go deeper into smart contracts? Same question, is this just cute,
#
curious, mathematical possibility? Is it something that is happening in the real
#
world in any meaningful way? And should the business and real world community start
#
thinking about building real world applications? So I can list some smart contract-based applications
#
that people use on Ethereum all the time. Uniswap, which is an exchange for trading
#
between different digital assets without having to go through a centralized intermediary,
#
that's a smart contract. MakerDAO and RAI, which are systems that are what we call
#
algorithmic stablecoins. They are stablecoins that maintain a stable value, which targets
#
in one case one US dollar, in another case an index that's similar but not quite the US dollar,
#
and they basically do this using financial contracts. So in the case of RAI, the collateral
#
is ETH, and one side has zero exposure to ETH, and the other side has double exposure to ETH.
#
So that's a way of giving people access to stable value, even if the formal links to the
#
financial system that enable things like USDC end up not working out. Prediction markets that
#
I mentioned, Polymarket is one that's really successful recently. Those are based on smart
#
contracts. Multisig wallets that we've talked about are smart contracts. ENS, which is a
#
system that basically lets you register decentralized usernames. So if I want to
#
have an Ethereum account, that I go and log into these decentralized social medias and other things
#
with the name and the system that makes sure that my name is uniquely my name is a system of smart
#
contracts that sits on Ethereum. A lot of the other kinds of logic for things like Farcaster and
#
Lens is also smart contracts. So actually, a lot of things are smart contracts in various ways,
#
like anytime you want to have a system of rules where you're not just depending on one person
#
to continue executing and implementing those roles, you can do it as a contract.
#
Okay. And in similar fashion, can I ask you a question for the great Indian hinterland?
#
India is an IT superpower. There is a tremendous intellectual capacity in software
#
all over the country. So whether you think of geniuses who will do PRs on GitHub, or you think
#
about software services and software product development on a global market, what are the
#
things that people in the Indian software world should be thinking about your world?
#
I think there is a lot of opportunity for Indians to both benefit and contribute.
#
It's one of the really beautiful things about crypto that is not shared by a lot of other
#
tech sectors is just how global it is already, and just how friendly it is to being global as
#
a result of that. There's the mentality that if you want to be an AI, you have to be in San Francisco.
#
And to the extent that that's true for AI, I think it's much less true for crypto. The Ethereum
#
Foundation, for example, is legally based in Switzerland, has another major base in Singapore.
#
A lot of its developers are in Berlin. There are major client teams in Romania and Australia.
#
There are scaling protocols for Ethereum that are based in China, one in India, actually,
#
Polygon, and a bunch of others in all kinds of places around the world. One in Singapore,
#
two, one in the US. It's very possible to contribute and make a big thing from anywhere.
#
The fact that there is English as a shared language actually makes it easier for
#
people here compared to people in other places like East Asia, for example, where there's this
#
ongoing language barrier that just makes it difficult for people to
#
quite get the knowledge that they need at the right speed. And so there's always some
#
friction in interacting with the global community. So I think from an individual perspective, there's
#
lots of projects where you can go and first start learning and then start contributing.
#
The other thing I think that the blockchain space has already done well is it's made a lot of the
#
educational resources very available to people who have not taken the standard path of learning
#
about the topic in college. You can just learn about how these complicated zero-knowledge
#
proofs work just by reading a bunch of blogs, watching a bunch of videos, reading someone
#
else's blog to cross-check against the first blog, and understanding the concepts and eventually
#
just trying to implement it yourself. And this is something that's definitely starting to get
#
better in other sectors as well. AI definitely has its fair share of these kinds of materials,
#
too. But I feel like crypto did really pioneer this kind of approach. So the opportunities to
#
learn are definitely there if you're looking for them. The opportunities to contribute in
#
all kinds of ways, not just as a researcher and developer, but also even things like translations.
#
The Ethereum Foundation has a translation program, and if we want to translate to
#
local Indian languages, for example, then that is something where we're very open to
#
people helping, and people can go and sign up for that. There's all kinds of things that various
#
individual projects want. There's all kinds of positions that, for example, I'm sure Polygon is
#
looking for, and I'm sure plenty of other projects are as well. So there's, I think, a lot of
#
places for people to do things both in contributing to the base layer of the ecosystem and in trying
#
to build out the applications that work well for both India and probably emerging markets in
#
general. I think there's a lot of common needs among emerging markets, people in very common
#
situations that are nevertheless different from what people in places like the US have. There's
#
opportunity for people to build applications that actually connect between the blockchain ecosystem
#
and actually providing real value to the outside. There's room to provide a lot of value and also
#
work your way into the ecosystem by working on those. A couple of final questions. Besides money,
#
what else do we need to rethink? Because one of the great revelations of learning about crypto and
#
thinking about the world is that there is a lot that we take for granted, which, like the dragon
#
tyrant, we don't actually need to do. So you've already spoken about, hey, we need to rethink
#
debt. But do we need to rethink the nation state? Do we need to rethink the university system and
#
how we are educated? Do we need to rethink the nature of work and the way that we work?
#
What else do we need to rethink? I think there's definitely a lot of things that are really
#
worth rethinking. On this nation state topic, it's fascinating because there's both the exercise of
#
imagining if you could redraw the world, what kinds of institutions would actually make sense
#
for doing the best possible job of meeting the needs of all kinds of people and the various
#
diverse values that they have. There's a lot of big imbalances right now. If you're part of a
#
mainstream culture of a particular region, you have a government that can push the values of
#
that culture. But if you're in some minority culture, then often you don't and often the
#
government that you're in actively works against you. There's all kinds of these problems. There's
#
the intellectual exercise of figuring out what actually would be the ideal, which I think is good
#
to do and I think it's valuable to do because you can't just be fighting against something.
#
You have to have something that you're fighting for because if you don't do that, then what often
#
happens is that one is that your energy has just become more destructive and then the other is you
#
end up allying with people that you think are on your team because you totally vibe with them on
#
what you hate. But then once you start winning and the time comes to actually implement something else,
#
then you end up just totally splintering and breaking in all kinds of ways. But at the same
#
time, there's this other exercise of trying to figure out what is a path to get from where we
#
are today with the actors that exist today and the kinds of power and incentives that those actors
#
have to a world that's in at least a somewhat better direction than what we would otherwise have.
#
That's never going to even come close to matching my utopia or your utopia or any person's utopia,
#
but that still can be much better and it's good to think about both of those layers.
#
I think on the first side, what directions to think about for what an ideal world would look
#
like. I think one of the big challenges right now is that the nation-state system is designed around
#
this assumption that there is such a thing as collectives and cultures and peoples.
#
They reasonably map to particular regions of space and we can try to redraw maps or if you
#
want to be aggressive about it, fight a few wars to try to redraw those lines in a way that you
#
think is better, but otherwise that's how it works. Physical space and people's affinity for
#
each other and public goods that people share in common all line up, but over the last 20 years,
#
that's becoming less and less true. There are more and more public goods where the scope of
#
that public good is not a physical space. It's a very amorphous community that exists on the
#
internet. One example of that is translations of the Ethereum website from English to Spanish.
#
It's a public good and the scope of that public good is Spain, Latin America,
#
except Brazil. They're still kind of Brazil because if you have the Spanish translation,
#
it becomes easier to get to the Portuguese one and you still have some Brazilian people.
#
Regions of the United States, Spanish people abroad in all kinds of positions.
#
And then if you think about open-source software communities, they have fans pretty much everywhere.
#
If you think about people trying to learn about chemistry, those exist pretty much everywhere.
#
And with the internet, there's the ability to provide things that have a reach that's
#
pretty much everywhere. And then the kinds of alignments that people have with each other
#
are more and more de-correlated with the kind of large-scale physical location.
#
In a lot of places, the divide between the city and the country is bigger than the divide between
#
two cities or two countrysides a thousand kilometers away. I remember visiting
#
like Austria and Europe and being in Vienna for a week and then being in this small town called
#
Karlsamm-Gosklöckner about 500 kilometers to the west in the middle of the mountains.
#
The kind of food that I get is just totally different. There's traditional Germanic food
#
and then there's modern Germanic food culture, which is basically hipster food with your salads
#
and your avocados and your sushi and making sure there's healthy options and
#
making sure things are bio and organic. It's like two different worlds. The difference between
#
that world and the other world is bigger than the difference between going 500 kilometers to
#
a different city in pretty much any direction, even if it's a different country. This is also
#
one of the reasons why I think as much as the US has these deep internal tensions,
#
like actual full secession is significantly less realistic in answer than it was 100 or even 50
#
years ago. If you look at the map of who's red and who's blue, it's this crazy thing that parts
#
weave into each other and there's islands of red and the blue and then there's islands of blue and
#
the red and the blue. I think there's value in trying to think through, okay, if there's groups
#
with different values and let's try to create some kind of plural legal structure that can
#
accommodate both, but actually having two fully separate countries just feels less realistic
#
as an answer than it did before. So there's just all kinds of ways in which it doesn't work.
#
And I think some kind of structure that focuses on both preserving people's ability to be
#
autonomous and people's ability to be mobile and be part of the communities that they want to be
#
in, but at the same time actually ensures that those communities have the, whether they're
#
physical or virtual, have the practical ability to provide public goods, to be able to actually
#
maintain their own cultures and all of those things. It seems valuable and I don't think
#
people have come up with a great answer to this yet, but I think that's a really valuable
#
direction to try to shoot for, to try to come up with something better there. But then there's
#
the answer of like, okay, or the question of we're in this existing world and there's these
#
countries and these actors and you can't just imagine a world where you have these people with
#
differences, but that still work together in harmony because you have people today who are
#
at each other's throats. And the new world that you're trying to push toward, it's going to have
#
to be stable against the people going at its throat after it succeeds and even before it
#
succeeds. It needs to have some way of actually getting there. Could we imagine breaking with
#
the idea that a nation is a convex set of points that are geographically contiguous?
#
So if red and blue America were organized as non-convex nations and they went their own way,
#
maybe they would not be at each other's throats so much.
#
CB I mean, I think absolutely. I think there's definitely a lot to that kind of idea. And
#
I mean, I think it's interesting to think through that, right? Because at least,
#
actually this might be a place where I'd ask you the question. India has a version of something
#
like this already, right? And that there are different religions that have their own
#
legal rules to some extent, right? Actually, do you have your own opinions on to what extent
#
that works well, to what extent that doesn't work well?
#
It's been quite a burning discussion. For a long time, there were separate laws for separate
#
religions. And there is a sense in which, at a fundamental level, it militates against
#
the idea of liberalism and universal human values. And in some sense, it helps keep the peace. So
#
those were the kind of trade-offs that were made in the early years after the founding of the
#
republic and are being questioned today. And in an existing sense, I guess there is
#
still a practical difference between what Hayek would have called laws and legislation.
#
So the conventional ways in which people organize their lives and then the frameworks of the state
#
that we have to work within. Almost out of time, last question for you. You know, for us and our
#
listeners, would you like to recommend books, music, films that you feel everyone should check
#
out or especially anything that changed the way you think about the world?
#
CB Yeah, it's a good question. I mean, I think it's always valuable, I think, to expand your
#
horizons in various ways. If you're thinking about new institutions, what are good things that
#
approximate different aspects of those and try to learn from what their successes and failures are.
#
I think in the realm of art, there is value in going out and exploring internationally as well.
#
I've definitely recently been sort of internationalizing that aspect of things
#
more. I've actually watched some of the Chinese sci-fi. There's things like the Wandering Earth
#
and some of the three-body series. And it's interesting to look at that and look at the
#
worldview that's sort of implied in that and at the same time, kind of critically interrogate
#
that worldview because there's obviously a lot to critically interrogate there and also to
#
appreciate it and see the perspective. I mean, there's the Studio Ghibli movies from Japan.
#
Some of my favorites. I mean, this might be kind of less of a delta from an Indian perspective
#
because I feel like India is culturally more polytheistic already. But what struck me was
#
how in a lot of the movies, they're not presenting a narrative of like,
#
these are the humans, these are the orcs, and victory is the humans beating the orcs.
#
The narrative that a lot of them present is these are two tribes, both of whom have the narrative
#
that they're the humans and the other side are the orcs. And the hero is like someone who is stuck
#
in the middle and finds a way to support peace between them. And that was a perspective that
#
I found really, really refreshing at the time. And so, yeah, that's on the movie side. One other
#
casual thing I sometimes do is when I watch just as a way of learning languages and keeping up my
#
French and German and so on, when I listen to movies that are supposed to be in English,
#
I try to switch the audio to either French or German or whatever else when I can. And
#
it's just a nice and simple way of passively learning those languages more. So that's a little
#
hack that's been helpful to me. Yeah, and then I do some more things with music as well, of course.
#
I think less than half of what's in my library right now is even in English at the moment,
#
the rest is just, I guess, mattering of various things. Yeah, I think works of fiction that actually
#
try to depict new political worlds and try to look at the social science aspect of them,
#
I think they can be fascinating. I remember reading Robert Heinlein's The Moon is a Harsh
#
Mistress was an interesting one on that. I feel like that's a genre that's sort of becoming
#
somewhat weaker recently. It's interesting. I think in the West, we've kind of gone from
#
things like The Lord of the Rings to things like Game of Thrones that has a pretty sort of bleak
#
and kind of black bill perspective, that sort of dysfunction is largely all that you can expect
#
and whatever is happening now. But I'd almost want to encourage people to try to write more works of
#
fiction that try to actually imagine worlds and imagine what the consequences of different
#
institutions actually existing might be. And there's definitely some good historical things
#
that can serve as an inspiration there, but also just your own thinking and your own imagination.
#
What's the last film or book that made you cry?
#
Oh, actually, the video version of the Fable of the Dragon Tyrant actually continues to make
#
me cry when I watch it. Vitalik, thanks so much. We could speak to you for five more hours,
#
but this is how long we had the room. But thanks so much. It's been amazing.
#
Yeah, thank you too. This has been very fun.
#
Did you enjoy this episode of The Scene and the Unseen? If so, would you like to support
#
the production of the show? You can go over to sceneunseen.in slash support and contribute
#
any amount you like to keep this podcast alive and kicking. Thank you.
