The following is a conversation with Vitalik Buterin,
his second time on the podcast.
Vitalik is the cofounder of Ethereum
and one of the most influential people
in cryptocurrency and technology broadly defined.
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Check them out in the description to support this podcast.
As a side note, let me say that Ethereum, Bitcoin,
and many other cryptocurrencies
have been taking a wild ride of prices going up and down
in the past few months.
To me, the prices were never as important as the ideas,
both technical and philosophical.
Cryptocurrency has the potential to empower billions
of people to participate in the global economy
in a way that resists the manipulation
by centralized power.
Also with smart contracts, layer two technologies,
data pools, NFTs, and of course,
integration of artificial intelligence
into the whole thing, we have the opportunity
to build tools and worlds that transform physical
and digital life as we know it,
hopefully minimizing the suffering in the world
and maximizing the fun.
This is the Lex Friedman podcast
and here is my conversation with Vitalik Buterin.
Let’s first talk about Shiba Inu, if we can.
Also known as Shiba Token, code SHIB,
for context, Shiba Inu was created in August 2020,
modeled off of Dogecoin by the anonymous founder
known as Ryoshi.
On May 10th this year, it had a market capitalization
of over 13 billion.
And maybe you can explain this, but in a crazy move,
you were given half of SHIB’s total supply.
You burned, a.k.a. destroyed 90% of it.
That’s worth $6.7 billion.
And you donated 10%, that’s worth 1.2 billion at the time
to an India COVID 19 relief fund,
saying you don’t want to be the locus of this much power.
This is fascinating.
Why and how were you able to walk away
from this much money and this much power?
So I should probably start by giving some of the backstory
around these coins and this concept of giving me coins.
So first of all, Shiba Inu, as you said,
is this kind of knockoff of Dogecoin, right?
And Dogecoin was this initial kind of fun coin
that was created back, I think, around 2014 or so.
And it was just created by Jackson Palmer
who put it out as a joke for a couple of hours
and a community formed around it.
And at the beginning, people didn’t take it very seriously.
I actually remember putting about $25,000 into Doge
sometime around 2016.
And I just remember thinking to myself,
okay, how am I going to explain to my mom
that I just invested $25,000 into Dogecoins?
And what even are Dogecoins?
The only interesting thing about this coin
is that there’s a logo of a dog somewhere.
But of course, that ended up being one of the best
investments I’ve ever made and it did really well.
And then at the end of 2020, Elon Musk, of course,
started talking about Dogecoin and the market cap
just shot up to about $50 billion.
Actually, it shot up multiple times, right?
Like the first time it went up from about 0.8 cents
to about like 7 cents.
And this just happened all in one day.
And I remember this was when I was still in Singapore
in the middle of COVID and I saw that the price
just went up by 1000% and I was like,
oh my God, my Doge is worth like a lot.
And so I immediately called up some of my friends
and told them to like drop everything and scramble.
And I sold half the Doge and I got $4.3 million,
donated the proceeds to give directly.
And a few hours after I did this,
the price dropped back down from about 7 cents to 4 cents.
So I managed to sell the Doge at the top
and I remember just that feeling
like I was such an amazing trader.
But then of course, the price went up from 4 cents
then to 7 and then 50 and just like Doge becoming
this big phenomenon where there’s even a lot of people
that have heard of Doge that have not heard of Ethereum
is just like something even I wasn’t predicting, right?
And so after that, of course, we have Doge
and then people are thinking, well,
if the leading DOG token is worth $50 billion,
then surely the second largest DOG token deserves
at least seven or 8 billion, right?
Like, I feel like that’s the kind of what the mindset
of these Shiba people is.
So that of course, they did this other gimmick, right?
Where they gave me half the Shiba token supply.
They were actually not the first projects to do this.
So around the end of 2020,
there was this weird project called Teller.
It’s like T E L L O R.
I think they’re a chain link competitor
or something like this.
But I remember they just like dumped $50,000
worth of their token into my wallet.
And then they had their Twitter army
just like basically run around saying,
look, look at Vitalik’s wallet, Vitalik holds Tellers.
He’s one of us, he’s a supporter.
And as soon as I discovered this,
I just like publicly sold the Teller tokens on Uniswap.
And this created a bit of a Twitter splat.
Now, the Shiba people were more clever.
The Shiba people, instead of dumping to that wallet,
they dumped to my cold wallet, right?
So in a cryptocurrency, right,
there’s this concept of like cold wallets and hot wallets.
Basically, like the thing that actually owns your money
is like this 80 digit number called a private key, right?
And a hot wallet is when that private key
is just stored in memory on your computer,
on your phone, really easy to access.
Cold wallet means it’s either written down
on a piece of paper or it’s on a computer
that’s just never accessed the internet, right?
So cold is very inconvenient,
but cold is also much more secure, right?
Because even if that computer has some viruses on it,
like it’s like air gapped,
it’s not actually going to be able to upload it.
So this cold wallet and like all the money
is out of the cold wallet,
so it’s safe for me to talk about my setup now, right?
But it was a laptop that was sitting in Canada.
And I also had two pieces of paper
where I wrote down two numbers
on those two pieces of paper.
One was with me, one was in Canada.
And if you add those two numbers together,
you get the private key.
So because of COVID travel restrictions,
and this cold wallets in Canada,
like it’s very difficult for me to actually access it, right?
And I’m not sure if they knew this,
maybe they just got lucky,
but basically they sent a lot of these dog tokens
into this wallet where it was very difficult
for me to access it.
But then I saw these dog tokens,
I saw more and more people talking about them.
And then at some point I realized that like,
hey, these things are worth billions of dollars.
And like, no, there’s lots of really good things
that you could do with that amount of money.
And it would actually be a waste to just like see it go.
So I made the decision that like,
I would actually power through
and figure out how to like safely,
like basically get my private key.
I actually had to call up my family,
tell them to read out their number
off of their piece of paper.
I entered that into a fresh laptop
that I bought from Target.
Then I put in my other number on my piece of paper,
added the two numbers together on the computer,
there’s the key.
And at the same time, like just scrambled for two days,
setting up a new wallet
where I could move my ETH to safely,
like getting people to be multisig partners,
just like doing all sorts of like stuff
that 10 years ago you would expect
to just be part of a cyberpunk science fiction novel,
but now it’s all real.
So you’re doing this all by yourself, essentially.
Most of it by myself.
So you have to keep it secret.
Right, and I needed my family to actually like go
and read the number on their piece of paper.
And then in my new multisig wallet,
like there’s other people that are signatories,
but I’m obviously not gonna reveal any details beyond that.
So I did this, right?
And I actually managed to like get the private key,
make the first transaction that would just move all my ETH
to the multisig wallet so it’s safe.
And then second transact,
put the private key on my main computer,
then started going in and just selling some
of the dog tokens and then just like giving them
to these different charities.
Now, at the time I actually did not even like have any idea
of how much you would be able to get, right?
Because like on paper, the dog tokens are $7 billion,
but like in reality, it’s a very liquid market.
Are you gonna crash it after you sell 1 million worth
or are you gonna crash it after 10 million?
Might you actually be able to get like an entire 200 million?
I had no idea.
So I definitely was just over the mindset,
like, okay, I mean, I’ll sell a bit,
maybe I get some ETH and then donated some ETH
to give well, donated some to other groups.
And then, okay, have some dog tokens.
Like I don’t have an easy ability to sell more myself,
but then I’ll just like give them to these groups
and like, hopefully they’ll do good things with them.
It was actually, I actually donated at 20%
then dumped 80%.
Yeah, so the COVID India group got one batch
and then there’s another group that got another batch.
And I don’t wanna say who they are
cause I think that they wanna announce themselves
at some point.
Yeah, but you can see the fact
that these transactions were made on the blockchain,
but it was just very interesting and unexpected
and just an insanely crazy situation.
It’s been a couple of weeks.
First of all, thank you for helping me hang up some curtains.
This is a first for the podcast
and shows that you’re a truly a special person
to be willing to help.
But now a couple of weeks later,
do you regret any aspect of that decision?
I’m sure there is some things
that I probably could have done better.
Like I was actually talking to some of these charities
and I was impressed by just how much money they managed
to get out of selling some of these coins.
So I probably could have done better
by just talking more with the traders
and actually ensuring that they can do a better job
of maximizing the value of all of them.
But it was a very stressful time
and I did have to act quickly.
Like I did manage to make a lot of the donations
before, a few days before the great crypto crash happened.
So it was, it’s difficult to,
obviously there’s parallel universes in which I did better,
but at the same time,
there’s also lots of parallel universes
where because I hesitated more
and tried to spend more time thinking I missed
So on that, it’s like a luck of the draw
and I’m just happy that everything was able to turn out
as well as it did.
But psychologically, you mentioned stress.
How hard was it?
It was stressful, right?
I think, well, one of the really stressful parts
was just the fact that I had to basically move
all of my funds, including the 325,000 ether
from one cold wallet into another hot wallet,
or sorry, into another multi SIG wallet.
And maybe the multi SIG wallet had a bug in it.
Maybe there’s like some mistake I’ll make in the middle
that causes the funds to get lost.
You know, that part was stressful.
And I was definitely stressing out for two days.
I mean, triple checking the new wallet.
I even did a bit of an audit of the code myself.
because Gnosis Safe didn’t work with the status wallet well.
So there was definitely,
that whole thing was definitely a bit of a marathon.
I was also a kind of definitely a bit worried
about or uncertain, I guess, how the public
and including the coin communities
would perceive the whole thing.
But I was actually impressed.
Like I, for every poster that was saying like,
no, you know, why did Vitalik like rug pull on us?
He was, his wallet was supposed to be a burn address.
You know, there’s like 10 people that are like,
oh, you know, I thought I was just in this
because it’s a fun pyramid gambling thing.
But instead I ended up being part of this, you know,
great public good thing for humanity.
And that’s like even more amazing.
So the amounts of that that I got was very impressive.
So, you know, all in all, you know,
I think the dog people did great.
The dog people.
Is there something you can extend
to the bigger picture of it
in the principles you apply to making this decision?
Is there some principles, philosophies
that you apply also to the decisions you make
I think a big one for me is just this idea
that crypto, you know, isn’t just an opportunity
to give people like slightly better ways
to save value in all of these things.
Like it’s also an opportunity to like basically create
these like new digital institutions
that could serve the public good in new ways.
And that’s something that I’ve been interested in
for a long time.
I actually even have this article in Bitcoin Magazine
back in 2014, where I basically suggested this idea
that, you know, you would have coins that represent causes
and like people would just like buy and accept those coins
because they support those causes.
So I think it’s called markets, institutions, and currencies,
a new form of social incentivization or something like that.
And I’m sure you can find it and throw it in the links.
So that was interesting to kind of see becoming real.
And like in general, I think, you know,
public goods are very important
and on the internet, public goods are even more important.
Like every single Lex Friedman podcast is just on YouTube
and no anyone can go and see it.
Like there’s no way for you to like, you know, sell it
and so that some people can see it,
but then other people can’t see it.
Like, you know, you could do that,
but then you’d obviously be reducing your impact.
So thank you for making the amazing Lex Friedman podcast
so freely available.
Well, that’s actually a tense thing is how do you do it
in a way that’s not controlled in a centralized fashion?
Cause actually YouTube feels free and open,
but it nevertheless is one company
making centralized decisions.
And the first time I realized YouTube is not forever
is when a lot of the Joe Rogan experience library
was pulled from YouTube as part of the Spotify deal.
And it made me realize we need to,
it’s like the realization that fiat money is centralized
is realizing that, you know, this is not forever
and you might want to come up with schemes to distribute it,
to decentralize the control of it
in a way that audio for podcasts is just an RSS feed.
And I think one of the kind of philosophical things
that I hope to achieve is kind of decouple
the concept of public goods,
which are incredibly important
and are the lifeblood of modern civilization
from the idea that there is or can be
one central organization that represents the public
and like perfectly understands and can impose their idea
of what is the good, right?
Like it’s, when people talk about public goods,
it just often comes with this baggage of, you know,
either centralization or conformism.
And I think like it doesn’t have to, right?
Like often the most important public goods
are the ones that are created by, you know,
the crazy individualists that disagree with everyone else.
So trying to make this kind of synthesis
where you combine the values of decentralization
and the values of open source,
but you’re not naive about it.
And like, you know, you realize that
for these things to be produced,
there needs to be a way for it to be sustainable.
There needs to be some way of supporting people
who are working these projects.
But at the same time,
you want to avoid that turning into
a vector of centralization,
like trying to sort of get all of the good things
without the bad things.
To me, that’s a big part of sort of
what my grand experiment in crypto is about.
And like, we are doing things
in different kinds of things for this, right?
Like there’s the Gitcoin Grants quadratic funding
in the Ethereum ecosystem.
There’s obviously these dog coins
that just happens, I guess, accidentally.
There’s other projects that, like for example,
you know, Uniswap has their Uniswap DAO
that just has a huge amount of funding.
And like, we haven’t seen yet how that’s going to be deployed,
but, you know, it could be potentially deployed
to do lots of really good and amazing things.
Do you see Ethereum as essentially a mechanism
to fight for social causes?
I definitely see Ethereum as being a mechanism
to fight for definitely some specific things
that are social causes.
Like just, you know,
the fact of creating an open financial system
that anyone can participate in
no matter where they are in the world,
that’s a social cause.
Just, you know, giving people the ability
to organize and create projects,
even if it’s five people in five different countries.
I think that kind of inclusiveness,
I think that’s a social cause
and it’s a core crypto value.
But then at the same time, like the other important
and if part of the magic of Ethereum
that you have to balance that against
is that it is also this open platform
where ultimately, you know,
the things that are on Ethereum
is just the things that the community makes of it.
Well, you kind of briefly opened the door,
so let’s go there.
When it comes to government regulation of crypto,
what’s the best case scenario?
What’s the worst case scenario?
In terms of, you know, as you’ve kind of mentioned,
Ethereum challenges the power centers of the world
and how do you see the interplay between governments
and this new technology that resists centralized power?
Best case and worst case.
The best case is that, you know,
blockchains continue to prosper
and we figure out scalability
so that people can actually start doing things on block,
like, you know, all of the amazing use cases
that people have been talking about
instead of today where a lot of the great stuff
gets priced out because, you know,
transaction fees are at five to $10
and then we see a lot of different amazing applications
happening on blockchains.
You know, it could be like DAO is creating new ways
for people to interact and organize with each other
and new ways for artists to get funded
and just all sorts of these amazing things
and there’s just enough public support
and just enough people that see that, you know,
look, crypto is clearly doing a lot of good things
and, you know, there are definitely areas
where there’s tensions,
but in those areas where there’s tensions,
like, there could be some kind of creative
and interesting approaches that get figured out, right?
Like, you know, the concept of corporate taxes,
for example, right?
Like, you know, that would disappear as a revenue stream
if theoretically corporations just all get replaced by DAOs
but, you know, like maybe there’s some other creative way
by which DAOs themselves can kind of be code,
you know, have some kind of encoded governance
that ensures that they have at least some kind of bias
towards serving the global public good
and, you know, maybe DAOs can do enough of that
that people are happy with it.
And, you know, there are going to be things
that people are unhappy about.
There’s always gonna be the people
that, you know, wants to surveil everyone
but if the kind of effect of crypto
from just empowering people is greater than that
and greater than that in a way
that people can just easily see,
then, you know, that would be a good scenario, right?
And we’ll just become kind of incorporated and accepted
the same way as happened with the internet.
But in the worst case scenario would, of course,
be just like people suddenly, you know,
flipping and going into moral panic mode
and just, you know, oh my God,
like this technology is used by like, you know,
insert bad group over the day.
And then I don’t think governments have the ability
to ban crypto to the extent of just complete
like preventing blockchains from existing
but they definitely have the ability
to really marginalize it, right?
Like if you just ban all exchanges,
like in ban all links from the Fiat ecosystem to crypto
and, you know, you ban all kind of mainstream employers
from accepting or paying in cryptocurrency,
then like you can successfully like turn it into a,
like, you know, a fairly kind of niche countercultural thing
that has much less impact than otherwise would.
So it’s somewhere between the good scenario
and the bad scenario.
I’m obviously hoping for the good.
Well, that’s interesting also the tension
between governments and companies.
Like if you have a bunch of billionaires
or a bunch of companies like Tesla investing in Bitcoin
and then governments resisting that,
it’s interesting who wins out in that worst case scenario.
And almost when companies and rich, quote unquote,
respectable people embrace cryptocurrencies,
Bitcoin, Ethereum, so on, even the dot coins,
it’s almost sends a signal to everybody else
that this is a revolution that’s here to stay.
On this one little tangent that you brought up,
this is almost an outdated idea, but it’s still with us,
which is cryptocurrencies are used for illegal activity,
for drugs, for crime, and so on.
Is there some sense that worries you
that if cryptocurrency, if Ethereum runs the world,
then making money from crime will be easier?
There’s always that possibility, but like at the same time,
I think if you look at, you know, the world as a whole
and like the way all the other technological trends
are going, like, you know, in person surveillance
is just going up every year, right?
Like if you commit a crime in, you know, meat space,
it’s getting harder and harder to get away with it.
So like, you know, if you wants to do something,
and this is something that’s just like happening
as a result of, you know, just better technology
and information transparency,
like a lot of it’s hard to prevent even if you really tried.
So the world where like things go dark to such an extent,
you know, as the police hawks sometimes like to say,
to such an extent that like, you know, oh my God,
the criminals are committing crimes with impunity
and we can’t see anything, like that just seems unlikely.
But, you know, on the other hand,
like the world where there just, you know,
is no privacy, for example, or the world where there just
like is no ability to kind of act outside of the confines
of, you know, mainstream institutions,
like that’s something that’s more realistic
and that seems like something that could lead
to a lot of kind of a lot of scary things, right?
And like, even from a government’s point of view, right?
Like I think governments over the last few years,
a lot of them, they’re very worried about sovereignty.
You know, they’re worried about like,
if their country is economies and, you know,
social environments are just completely dependent
on basically foreign tech companies controlled
by foreign governments, like, you know,
governments are not on team government, right?
It’s like, you know, the Indian government is on,
you know, team India, then the Russian government
is on team Russia and so forth, right?
So like, you know, they don’t want the US to be able
to like have this big backdoor into everything.
So, I mean, I do think that a balance is needed,
but at the same time, I do think,
I guess I definitely like worry more
about the possibility that just like without things
to like crypto kind of acting outside of institutions
becomes too impossible.
And I don’t even necessarily mean outside of governments,
even just, you know, outside of corporations,
like becomes too impossible.
And there’s just like terrible things
that come as a result.
I mean, if things going in the other direction,
like it obviously is a risk, but no,
at the same time, I think in the longterm,
like a crypto can potentially even like offer defenses
as much as attacks against that sort of thing.
Yeah, many throughout history,
many of the most destructive things came
from centralized institutions versus sort of
from the people operating in the shadows.
And, you know, I’ve been talking to a bunch
of psychedelics folks that people doing researches
like Rick Doblin in Johns Hopkins,
there’s a lot of exciting research on psychedelics.
And one thing you could say about operating
at the edge of legality,
it could actually accelerate the adoption
of particular things like whether it’s marijuana
or psychedelics, they can help people out.
It’s almost accelerates the policy.
It forces the policy to catch up
to where the people stand.
So there’s a positive way of doing things
that are in the gray area of legality
and creating a market that allows people
to in a safe way be able to participate
in this gray area of legality.
The other thing to keep in mind, of course,
is that the set of like the kinds of things
that just like payment processors as companies
try to restrict you from is much larger
than the set of things that’s illegal, right?
Like part of that is because they wanna be
super conservative and like the more layers you have,
the more they’re like conservative
because they’re scared of what the layer below them
will do to them.
Sometimes they have their own moral opinions
of various kinds.
They go after lots of people, right?
Like they make life really hard for sex workers,
for example, psychedelics, as you mentioned,
there’s a lot of activity,
even including stuff that is totally legal
that just there’s this like shadow
like PayPal credit card governments
or whatever you wanna call it.
And that makes it just hard to participate in this stuff.
So I think like reducing the number of intermediaries
is definitely normally a good thing.
All right, let’s talk about one of the most exciting
technologies like technically, philosophically,
like socially, financially in every way,
which is Ethereum 2.0.
There’s a million things to talk about,
but step one is probably a good thing to do,
which is can you briefly summarize your vision
how Ethereum 2.0 will make Ethereum more scalable,
secure and sustainable?
Sure, so I think recently we’ve actually been
kind of deemphasizing the ETH 2.0 branding, I guess.
So the reason behind that was that originally
we envisioned something more like a big grand event
where all the good things would happen at the same time
and it would be a new blockchain,
and it would be a new protocol
and people would have to take a lot of effort
to migrate over.
But later we’ve slowly changed the roadmap
over to something that’s much more incremental, right?
So proof of stake happens kind of over time
and then sharding gets added over time
and all of these features get added over time.
And so the experience for just a regular Ethereum user
still feels very seamless, right?
It’s like maybe a little bit more complex
than the hard forks that we’ve already done
from a user’s point of view, but not by that much, right?
So the big two things that are happening, right?
These are what used to be considered
the two flagship features of ETH 2.0
and now they’re just the flagship features
of the next devolution of Ethereum,
as proof of stake and sharding.
So proof of stake is a consensus algorithm.
It’s a, or a consensus mechanism, I should say.
The difference is that like an algorithm
is something that you run by yourself.
A mechanism is like interactions between people
and it could even include incentives and all of that.
So a consensus mechanism,
so by which nodes in the network agree on
which blocks came in, which transactions came in,
what order, make sure that once a block gets accepted,
it can’t get reverted and all of these things
that we expect from a blockchain.
So existing blockchains, including Bitcoin,
including the Ethereum of today,
and including a lot of them, they use proof of work, right?
So the reason why we need proof of anything
is because they serve this function that I call
an economic civil resistance.
So that’s obviously a big word for,
especially if you’ve never heard of symbols before,
but like the basic idea is, right,
that you have a network and you have lots of computers
that agree on like which blocks to accept.
And sometimes you get two blocks that get published
at the same time and you just have to agree on an order.
So there has to be some kind of voting game.
But then the question is, well, in this voting game,
who gets to vote, who gets to participate?
Now, you can’t say one person, one vote, right?
The reason why you cannot say one person, one vote
is because you need some kind of like authority
or some kind of mechanism to say who the humans are.
And if you don’t have that,
then a bad guy could just come in with a virtual machine
or with a computer that has on it 10 billion virtual machines
that have 10 billion virtual nodes.
And then just like say, look, I’m 99% of the network,
I should control everything.
So to prevent this, what proof of work and proof of stake
both do is they basically say, well, the weight of your vote,
like how much influence your votes have in the consensus
is proportional to like what quantity
of economic resources you bring in.
So in the case of proof of work,
you prove what economic resources you have
because your economic resources are computers
and you prove that you have them
by just running them 24 seven
using these hash algorithms, right?
So this does solve the problem, right?
Because in order to attack the network,
you have to come in with more computers
and more money invested into computers and electricity
than the rest of the network puts together.
And that’s extremely expensive.
In proof of stake, instead of relying on people
with computers that are just constantly cranking out
hashes 24 seven, as you’re like a unit of economic resources,
you just use like holdings of coins inside the system, right?
So all of these blockchains,
they have some kind of coin in them.
Bitcoin has Bitcoin, Ethereum has ether,
they all have a coin.
So why not just use that as the economic resource
that you’re using to measure participation.
So that’s like the core distinction
between proof of work and proof of stake.
I like proof of stake
and I’ve liked proof of stake for many years,
basically because like it just requires
much less ongoing resource consumption, right?
Like with proof of work,
you have to like actually go and buy these physical computers
and these days, they have specialized hardware,
ASICs, application specific integrated circuits.
You have to go produce them and you have to go buy them.
And unless you have millions of dollars,
you have to buy them from one of these other people
who creates them and those other people often end up
taking a huge cut of the profits themselves.
And then you have to plug them in,
you have to just burn all of this electricity
that’s just running 24 seven.
So it consumes a huge amount of energy, right?
And not just energy, it also,
just to create the hardware, right?
Like people focus a lot on energy,
but like actually about half the cost of proof of work
mining is the cost of the hardware.
So hardware is a very big deal too.
And you need this really big and powerful,
very specialized hardware,
another kind that fills up these big warehouses.
So proof of stake,
you don’t really need that much electricity,
you just need just a little bit to run a regular computer.
You can run proof of stake validators on computers
that you already have.
So it’s just much less resource intensive.
And like, this is good for a few reasons, right?
Like one is, you know,
the kind of environmental rationale that, you know,
you’re not breaking the environment.
The second is that you’re not taking away electricity
and like other resources from other people.
I mean, like right now there’s,
I think just today I saw a story about like Iran
wanting to shut down some Bitcoin mining
because it was just grabbing up so much electricity
that it was, you know, outbidding the nearby towns
and they just didn’t have enough.
And then there was like Chia,
the one that’s doing proof of like hard disk mining
basically is just like grabbing up so many hard disks,
there’s a shortage, right?
So that’s the second reason.
And then the third more selfish reason is that
because participating in consensus
does not require so much energy expenditure,
you don’t need to pay people as much to participate, right?
So like Bitcoin and Ethereum,
they both issue somewhere around 4% of the total supply
every year right now to miners.
So Ethereum is about 4.7 million ether
and the current supply is about 115 million.
But with proof of stake,
like we expect it’ll be somewhere between 500,000
and one million per year.
So that means, you know,
the supply doesn’t have to increase so quickly.
One of the pros that the people sort of argue for the proof
of work is that it is secure
because it’s much more difficult to sort of,
as you’ve highlighted, it’s difficult to participate.
Is there, what are your thoughts about the security
of the proof of stake mechanism?
Is there ways to make it secure?
So I think proof of stake is very secure
because in order to be able to attack the system,
you needs to have like basically as much stake
as the rest of the network, right?
So that means like right now, for example,
we have 5 million eth staking.
So you have to come up with 5 million eth
and then join the network.
And then the other, so 5 million eth is a lot, right?
It’s like, how much is it now?
Like $15 billion.
So that’s actually more than I believe the cost
of attacking the Bitcoin network.
And then the second thing is that recovering
from attacks is much easier in proof of stake
than in proof of work, right?
Because in proof of stake, you have, like, first of all,
we have for many kinds of attacks
that you do against this network,
we have this concept of like automatic slashing, right?
Which basically means that in order
to like revert a finalized block,
so if there’s one block that’s like accepted by the network
and you try to convince the network
to kind of revert that block and accept a different block,
in order to make that kind of attack,
you basically have to have your validator,
like a big portion of your validator
assigned to conflicting messages.
And this is something that like once these messages
are on the network, like you can go and prove,
like, look, these people did it.
And so we have this feature in the protocol called slashing
where you basically take all these people
who provably misbehaved and you burn their coins, right?
And you don’t burn anyone else’s coins.
Now, there are other cases, like for example,
if instead of reverting blocks,
the attack just tries to censor everyone, right?
Then everyone who got censored would just like
basically create the minority chain
and then the community would basically
have to do a soft fork, right?
They would just have to say like,
look, this chain is clearly attacking us,
this chain is the one not attacking us,
and so we’re gonna join this chain.
And then what happens is that on that new chain,
the attackers also lose a lot of coins, right?
So the difference between proof of stake and proof of work
is that in a proof of stake system,
like you can identify specific participants
and you can say, you know, these,
and like this isn’t like, you know,
a human going in and saying, I don’t like you,
I don’t like you, I don’t like you,
this is like automated, right?
So the slashing process is automated.
Is there ways it can go wrong?
So that’s a painful process where the coins are burned.
It is painful, yes.
I think, I mean, the one big unknown, of course,
is like if an attack actually happens
and like if an attack happens that requires the community
to actually choose one of these minority forks,
then like what would the community
actually successfully coordinating on this look like, right?
Like it’s like, you know, we can talk about it
and we can, you know, write like science fiction novels
about it, but like until it’s happened,
you don’t really know the details of like what it looks like
and how difficult it is.
What are the channels of communication for the community?
If you can enlighten me a little bit, like what, you know,
in many ways in the political realm,
Twitter is often used as a way to kind of have
these emerging phenomena of large groups of people
coming to a consensus about a particular idea.
And then there’s battle for consensus.
What’s in the Ethereum community, how do people,
what are the sources of natural language based communication
that have an emergent belief structure that you would say?
Or is it all through money?
Is it all through trading that the communication happens?
There’s definitely talking as well.
I mean, like we have to agree on protocol changes somehow,
right, like there’s Twitter, there’s Reddit,
there’s GitHub, there’s all of the various Ethereum forums,
Ethereum magicians, Ethereum research.
There’s just in person communication.
Then there’s just kind of like the hidden web
of everyone talking to everyone on Telegram or Signal.
So it’s like some of everything, right?
But I think like the thing to emphasize around like,
can you actually come to consensus on, you know,
whether or not to fork the chain
because the attacker is censoring everyone,
just for example, is like everyone who’s running a node
is going to see almost the same thing, right?
Like they’re gonna be off by a few seconds
and like maybe they’ll be off by a few minutes,
they’ll disagree by a few minutes.
But like if it’s a serious attack, you know,
people are gonna know, right?
It’s not like one of those things where, you know,
oh, we’re trying to agree on like, I don’t know,
did Epstein kill himself or like some random political fact
where like in reality, no one knows a single thing
about what’s actually going on and they’re all speculating.
Like it is much more visible, right?
So we do have that, but you know, at the same time,
I’m happy to admit that like,
these are fairly untested mechanisms,
but like at the same time,
they’re also untested mechanisms in Proof of Work, right?
And like in Proof of Work, it’s even harder
because in Proof of Work, you don’t have the ability
to like identify and say, like, you know,
I’m going to these miners attacked
and so we’re not gonna let these miners in,
these miners did not attack, so we’re gonna keep them in.
Like you have to pretty much, you know,
either take out none of the miners
or you do a fork that changes the Proof of Work algorithm
which takes out all of the miners, right?
So the economics of like recovering from attacks
in Proof of Work, at least to me,
actually do seem like more unfavorable,
but you know, I’m sure the Proof of Work people you talk to
will give a very different and contradictory opinions
and that’s totally fine and amazing.
Some people describe MEV, minor extractable value,
as an existential risk to Ethereum.
What is MEV?
How important is it to solve MEV?
If it’s important, what ideas do you have?
Sure, how about after this one,
we’ll also talk about sharding because it’s amazing
and it’s part of you too.
Yes, we’ll return back to sharding
which is, we’ll return to the big picture
of the scaling problem as you mentioned.
I love this conversation, you know,
depth first search instead of breadth first.
So basically, okay, MEV, minor extractable value,
it is not different in Proof of Work and Proof of Stake,
right, so like if you want to call it, you know,
block proposer extractable value,
like it sounds a lot sexy, but you know,
we can call it BPEV instead of MEV, who cares?
So this is a problem in both Proof of Work
and Proof of Stake?
Yes, so the basic idea is that if you have the ability
to choose which transactions go into a block
and in what order, then you have the ability
to like take advantage of that position for economic gain
and for economic gain in a lot more ways
than just collecting transaction fees, right?
Like for example, there’s decentralized exchanges on chain
like Uniswap and like let’s say the price
of ETH versus USDC was 2,700 the previous block,
but then there was a bit of a market drop
and now it’s 2,680 where you can go on Uniswap
and you can just like gobble up the entire part of,
you know, the automated order book
that’s like between 2,700 and 2,680, right?
And that’s, and then at the same time, you like run a bot
and you know, you buy some ETH back at 2,680
and you’ve just like made about $10 of profit, right?
So, or well, $10 times, you know, whatever the depth is.
Right, so there’s lots of little things like that.
There’s also things that involve like front running
other people’s transactions.
So one example of this would be that if someone sends
a transaction that says, I don’t know,
buy me five ETH for whatever price that you can get,
then, but with a maximum of, let’s say $15,000,
then you can go and like, you can send each,
put a transaction right in front of that transaction
and you can like buy up that ETH first
and then you resell it to him at, you know,
$15,000 minus one, you know?
Then you get to make a little bit of money that way.
Exactly, so there’s a lot of these different
like arbitrage, front running, back running,
these different tricks that allow block proposers to.
To get some percentage on top, like overhead.
Exactly, and the reason why this is a challenge
is because it’s, I mean, like first of all,
it sometimes degrades user experience
because users get no less favorable trades,
but there are sometimes ways to like mitigate that
for applications, sometimes it’s not that bad,
but like the bigger risk that I think some people consider
more existential is that there’s just much more
economies of scale in figuring out
how to extract all this revenue, right?
Because if you’re just collecting transaction fees,
there aren’t really economies of scale,
there aren’t really benefits to centralizing, right?
Because it’s a very simple formula,
you just like grab up the transactions that pay you the most.
But with MEV, there’s all these sophisticated algorithms
and if you have lots of money,
then you can hire really smart people
to make amazing algorithms and then you can use
the other half of your money to get a lot of mining power
or a lot of stake and you get a lot of opportunities
to use your even better algorithms.
So there’s this risk that like as a result of this,
mining is basically, or even validating proof of stake
is going to centralize.
So I think the ecosystem is best replied
to this sort of risk and it’s the direction
where projects like Flashbots are going already
is if you can’t eliminate the centralization,
then you try to firewall it, right?
And the way that you firewall it is you basically say,
we’re going to try to deliberately create a marketplace
where people can just do the complicated work
of creating what are called bundles,
like bundles of transactions that are very profitable, right?
And then at the other side of the market,
you just have like block proposes reminders
that are just dumb notes.
And they go and ask the what are called searchers,
the bundle creators, and they just ask like,
hey, like how much can you give me if I put in your bundle?
And then they just take the highest offer, right?
So you sort of separate out the task
and you have the easy part and then you have the hard part
and you have like this special class of actor
called a searcher that does the hard part
and then the easy part, the people doing the easy part,
which is just miners and validators,
they kind of just talk to all the different people
doing the searching and they just accept the highest bidder.
So this is also just like an interesting example
of like economic design philosophy, right?
Like sometimes you can’t just like make centralization
go away, sometimes it’s inevitable,
but no, at least you can try to kind of contain it,
you can direct it or you can even sort of firewall it away
from core consensus,
the parts that really do need to be decentralized.
But you don’t see it as an existential risk,
it’s just a bit of a problem
that it has to be constantly dealt with.
It’s a risk, like there’s obviously a risk
that it’s a very severe problem
and that even this flash bots approach
has some fatal flaw or whatever.
But we’re definitely approaching it
with the mindset of this is a problem
and like, yes, we do have to do some work to solve it,
but we’re doing it and so far it’s being solved.
Okay, let’s talk about the other really, really fascinating
part of the future of Ethereum.
Let’s not call it Ethereum 2.0,
but the future of Ethereum
that also may require a hard fork,
I don’t know, you can correct me on this,
is well, broadly ideas for scaling.
And more specifically sort of layer two
or layer one and two intersection ideas
of how to achieve scaling.
And at the core of that is the idea of sharding.
So first, what is sharding?
Okay, so there’s two major paradigms
for scaling blockchains, right?
As you said, layer one and layer two.
And layer one basically means
make the blockchain itself capable
of processing more transactions
by having some mechanism by which it can do that
despite the fact that there’s a limit
to the capacity of each participant in the blockchain.
And then layer two says,
well, we’re gonna keep the blockchain as is,
but we’re gonna create clever protocols
that sit on top of the blockchain
that still use the blockchain
and then still kind of inherit things
like the security guarantees of a blockchain.
But at the same time, a lot of things are done off chain.
And so you get more scalability that way.
So in Ethereum, the most popular paradigm
for layer two is rollups
and the most popular paradigm for layer one is sharding.
So one way to achieve layer one scaling
is to increase the block size.
Block size wars, quote, unquote.
And you actually tweeted something about,
people are saying that Vitalik changed his mind about,
he went from being a small blocker to a big to small.
But you said, I’ve been a medium blocker all along.
So maybe you can also comment on where,
on the very basic aspect before we even get to sharding
of where you stand on this block size debate.
So the way that I think about the trade off
is I think about it as a trade off
between making it easy to write to the blockchain
and making it easy to read the blockchain.
So when I say read, I just mean,
have a node and actually verify it
and make sure that it’s correct and all of those things.
And then by write, I mean send transactions.
So I think for decentralization,
it’s important for both of these tasks to be accessible.
And I think that they’re about equally importance.
If you have a chain that’s too expensive to read,
then everyone will just trust a few people
to read for them.
And then those people can change the rules
without anyone else’s permission.
But if on the other hand,
it becomes really expensive to write,
then everyone will move on to basically
second layer systems that are incredibly centralized.
And that takes away from decentralization
and self sovereignty as well.
So this has been my viewpoints
pretty much the whole time, right?
It’s like, you need this balance
and going in one direction or the other direction
is very unhealthy.
In the Bitcoin case, basically what happened
was that Bitcoin originally,
at the very beginning, it didn’t really have a block size.
It just had an accidental block size of 32 meg,
or block size limit of 32 megabytes
because that just happens to be the limit
of the peer to peer messages.
Interesting, I didn’t even know that part.
Yeah, but then Satoshi back in 2010
was worried that even 32 megabyte blocks
would be too hard to process.
So he put the limit down to one megabyte.
And I think the…
I put, you mean sneaked in there.
Yeah, just like made an update to the Bitcoin software
that made blocks bigger than one,
I think it’s a million bytes invalid.
And I think the impression that most people had at the time
is that this is just a temporary safety measure.
And over time, as we become more confident in the software,
that limit would be raised somewhat.
But then when the actual usage of the blockchain
started going up, and then it started going up
first to 100 kilobytes per block,
then to 250 kilobytes per block,
then to 500 kilobytes per block,
there started coming out of the woodworks this opinion
that no, that limit should just not be increased.
And then there are all of these attempts at compromising.
First, there was a proposal for 20 megabyte blocks.
Then there was the 248 proposal,
which is a bit ironic because the 248 proposal
started off being a small block negotiating position.
But then when the big block people came back and said,
hey, aren’t we gonna do this?
They’re like, oh, no, no, no, we don’t want them.
We don’t want the block size increases anymore.
So there were these two different positions,
the small blockers.
I think they valued one megabyte blocks for two reasons.
One is that they just really, really believe
in the importance of being able to read the chain.
But two is that a lot of them really believe
in maintaining this norm of never hard forking, right?
So the difference between a hard fork and a soft fork
is basically that in a soft fork,
any block that’s valid under the new rules
was still valid under the old rules.
So if you have a client that verifies
according to the old rules,
then you’ll still be able to accept the chain
that follows the new rules.
Whereas with a hard fork,
you have to update your code in order to stay on the chain.
And look, they have this belief that soft forks
are kind of either less coercive than hard forks,
which by the way, I completely disagree with.
I actually think soft forks are more coercive
because basically they force everyone who disagrees
to sort of go along by default.
But, or they have this opinion that there’s like,
it’s more difficult to abuse soft forks
to do really mean things like,
or that like completely violate people’s expectations,
like increasing the supply, which is like,
I think there is some truth to that.
So because of these reasons,
they just say we’re only going to do soft forks
and we want to just not do any hard forks.
And they eventually discovered this idea
called segregated witness that allows for like
a very tiny block size increase
to like the equivalent of about two megabytes
with a soft fork.
It’s this really like weird and devious trick.
Like basically what they do is they take the signatures
of transactions and then they put them outside of the block.
And then they add an extra rule that says that like every,
for a block to be valid,
the block has to come with a separate,
like basically extension block
that contains all of the transaction signatures, right?
So when you measure it, according to the old rules,
like, hey, it adds up to less than a million,
but actually there’s this extension block
that the old protocol doesn’t even know about.
It’s a hack that seemed to work to in a small way
extend the size of the block size.
So the small block side was like happy
with these very low levels of block size.
And then the big block side wanted to expand to,
at the very least go to four megabytes,
then maybe go maybe eight, 20.
There’s disagreements within there as well.
I definitely was favoring the big side
the whole way through, as you can probably tell, but.
Even though, so the argument against the big
is that it makes things more centralized.
Yes, because fewer people can run a note
that verifies the chain.
And also because any of these things
would require a hard fork
and hard forks are inherently risky.
Do you think there’s truth to that?
I’m pro hard fork.
I think hard forks are actually like
in a political economic sense,
they’re better than soft forks.
Well, let’s, okay, okay.
I think that’s a beautiful principle as stated
that soft forks may be more coercive than hard forks.
This is not just about cryptocurrency.
This is about politics and life.
So you’re okay with hard forks.
In fact, you think hard forks is the right way
to make changes because then everybody’s forced
to make a decision.
Do you accept this change or not
as opposed to ideas being sneaked in behind the door
and that decision is forced on you?
Okay, so, but hard forks, some people say,
this is when they talk about sort of Ethereum,
is there’s some aspect to a hard fork
where you’re trying to upgrade a,
what is it, airplane while it’s flying.
I think soft forks are also upgrading an airplane
while it’s flying.
But it’s a smaller upgrades.
That’s, there’s some truth to that.
Like there’s definitely a bit more risk of like a split
as a result of a hard fork than as a result of a soft fork.
And the split is highly undesirable, right?
Well, it depends.
Like if it’s a split because of a bug, then that’s horrible.
If it’s a split as a result of political differences,
then I think like a split is better than, you know,
one side being forced to basically just like suck it up
and accept the majority position even if it really hates it.
Well, there’s also political connections
throughout the history of the United States.
It’s like sometimes groups of people
that strongly disagree with each other
should be forced to work it out.
Even if they, even when a split seems like an easy thing
in the short term.
And I think like, well, for blockchains in particular,
the costs of people being able to like peacefully do their,
go off and do their own thing are much lower, right?
Like, you know, okay, if you have a country
and you have two groups, then like often enough,
like fighting out the new rules requires, you know,
a civil war requires everyone to move and so forth.
But no, on a blockchain, like, you know,
the costs are lower and so.
So if you were to look at the way things worked out
with the block size wars and there was a split,
what is it, Bitcoin Cash and all this?
Would you, like you looking, putting on your historian hat,
you mentioned offline you like Dan Carlin.
So if Dan Carlin wanted to do an episode
on the block size wars, do you think it could’ve turned out
better or do you, are you okay with the way it turned out?
I’m definitely disappointed with what happens
with the block, with the big block side.
I think the source of my disappointment is that like,
one of the things that you notice when just looking at
like this political disagreements generally,
especially when you have environments where, you know,
they’re authoritarian or like single party dominated
and then there’s some opposition party
and the opposition often has like very legitimate grievances.
But at the same time, the thing you notice is that often
enough the opposition just sucks, right?
Like it just doesn’t have, you know, political capacity.
It doesn’t have like the ability to come up with policy
because it’s entire culture is like designed around
resisting much more than it’s designed around like,
you know, actually debating serious policy trade offs.
And I worry or I guess not so much worry
because it’s already happened.
I unfortunately think that Bitcoin Cash ended up
being a victim of this, right?
Like first, no, there was a split with Bitcoin Cash.
And then of course, Craig Wright came in
and you know, Craig Wright was this basically scammer
who just keeps on pretending that he is Satoshi Nakamoto,
the inventor of Bitcoin.
Hey, Craig Wright’s legal team, do you hear me?
Yes, I still think your client is a scammer.
So sue me.
This is definitely gonna be death for a search
because I gotta ask you about Craig.
I guess these people have been contacting me
and I’m trying to figure out like,
what is up with this human being?
So for people who don’t know, there’s somebody who is,
let’s start this Satoshi Nakamoto, who is the creator
of Bitcoin, who’s anonymous.
And actually most really big people
in the cryptocurrency space do not like yourself
and others do not dare claim that they are even
for fun Satoshi Nakamoto.
In fact, if Satoshi Nakamoto is still alive
and is like, if say you were Satoshi Nakamoto,
it seems like the thing he would do is probably
or she is trying to remain anonymous.
On the flip side of that, there’s a guy named Craig Wright
who continually keeps claiming that he is in fact
Satoshi Nakamoto and keeps suing a lot of people.
So on him, if we could just linger on him,
what do you make of this character?
What are we supposed to make of this character?
Should he be ignored?
Is there any possible truth to his claims?
What do you make of him?
The analogy that’s at the top of my head
will get a bit political, but that’s fine.
You’ve had Michael Malice.
So I guess I view Craig Wright
as being kind of like a Donald Trump figure
in that he’s not very intellectual,
but I think he gets a big audience
because he says things that play to the resentments
that people have and he says things
that people wants to hear.
Like in the wake of this block size war,
the big blockers did feel very disenchanted.
They felt that Bitcoin always had this vision
that we were supposed to just keep increasing
the block size and Bitcoin is peer to peer cash.
It says so in the white paper.
And then this elitist clique of core devs
just came in and said, no, no, no,
we’re gonna impose this totally different vision.
And if you ever want your scalability,
you’ll have to wait for us to create
this totally unproven fancy technology
called the lightning network
that works under completely different principles.
And they were very angry at this.
And I mean, I think a lot of that anger is justified,
but at the same time, when people are in that mental state,
like it’s very easy for you to just kind of like latch on.
And if you find someone who expresses anger
at the same things that you’re angry at,
and also like it seems like someone who’s strong
and seems like someone who might be good to rally around,
it’s very easy to just like get behind that.
But that extra part about it where he’s
Satoshi Nakamura, I don’t understand why that’s necessary.
I think that’s, he could have done it without that,
but that just, it’s a marketing strategy.
Like it sort of gives him more salience.
Like there’s other big block personalities, right?
Well, what’s the difference with Craig Wright?
He’s not just a big block personality,
he’s potentially Satoshi.
And he did say all the big block things, right?
Like he talked about how,
oh, the concept of a fee market is fundamentally
like economically wrong and it should be a free market
and you should be able to have blocks as big as you want.
So like he repeated all the talking points.
And so a lot of people were kind of sucked into that, right?
And so he unfortunately was able to basically dominate
a big part of the Bitcoin cash community for a long time.
And then eventually, of course,
more and more people started to catch on.
He would just say technical things
that are completely wrong, right?
Like one example of this that I remember
is that he mixed up the concept of 256 bits
and two to the power of 256 bits, right?
So the difference is, it’s like the difference
between 80 and the concept of 80 digit numbers, right?
And because of this, like he made this arguments
that said that Bitcoin’s elliptic curve
is friendly to cryptographic pairings.
Like you don’t have to understand what that is,
but if you want to know,
I have articles on both at Vitalik.ca.
But basically he made this like technical argument
that really hedged on this point.
And then when people pressed him on,
it was like, yes, but no, no, like what?
Look, exactly, the height is like what?
Two to the 256 bits.
That’s a very tiny amount of information.
No, no, no, no, two to the 256 bits
is more than the amount of information in the universe.
And like he equivocated and kind of like preyed
on people’s inability to understand
that mathematical nuance.
And I called him out.
And eventually I even called him out in person
at this conference in Seoul.
Like I just stood up and asked,
hey, conference organizer,
why are you letting this fraud speak at this conference?
And I remember even some big blockers at the time
getting angry at me.
But eventually they did get rid of him.
And then Craig, well, basically Craig Wright
was forced to split off
because the rest of the community refused
to accept some network change that he wanted.
And so then there was the BCH and BSP.
And then in the Bitcoin Cash community,
there was this drama of,
are they going to add a developer fund
where they redirect 12 and a half percent of the revenue
from the miners to the devs?
And according to the libertarian not aggression principle,
is this technically theft?
Like his understanding of the technical depths
of cryptocurrency was lacking in a way
that Satoshi Nakamoto certainly would not.
But the point is that even after Craig Wright got expunged,
the Bitcoin Cash community kept having these disagreements.
And now after this development funds dispute,
there was a further split between Bitcoin Cash and ABC.
So the branch continues to extend.
So in that way, it’s disappointing
to see those kinds of splitting that was never resolved.
I would have definitely like wanted to see more
of a kind of like the principled coin
with like tries to be Bitcoin,
but follows consistent big block values.
But I know maybe I should just like stop expecting projects
that I have no involvement in to care at all
about what my values are.
And like maybe Ethereum just like is.
I think you have a powerful voice
and you can inspire other projects
to live up to their best possible selves.
Okay, so that’s the layer one approach.
The other layer one within Ethereum
is the idea of sharding.
What the heck is sharding?
What does the future of sharding look like?
Right, so to summarize that big long tangent
that we just went into.
It’s a beautiful tangent by the way.
It’s the basic tangent.
And I think like crypto is just one
of the most underrated aspects of crypto
is I think how you can like analyze the sociology
and the politics and the anthropology.
And I’m sure Dan Carlin would have fun exploring
the space at some point.
But like the core trade off, right?
Is that if you scale blockchains the dumb way
just by increasing the parameters,
then eventually you just make it harder and harder
to participate as a node and you end up with a system
where there’s like 20 computers running the whole thing.
And it’s just very centralized.
So sharding basically says, well,
instead of just increasing the parameters,
what we’re going to do is we’re going to change
the blockchain architecture in such a way
that each individual node in the blockchain
only needs to store a small portion of the data
and only needs to process a small portion
of the transactions.
So you can think about it as being like inspired
by BitTorrent, right?
Like on BitTorrent, there’s no such thing
as a BitTorrent full node that has every movie, right?
You know, the work is like split up among a huge number
of computers and like that makes sense.
That’s, you know, the only sane way
to scale a system like that.
And if they actually tried making a version of BitTorrent
that required full nodes that store every movie,
then, you know, it would have like zero censorship
resistance and it would just like, you know,
be dead in an instant.
So the challenge with taking that model
and applying it to blockchains, right?
Is that blockchains aren’t just about like spreading data
around, they’re about agreeing on exactly what data
was spread around and ensuring that everything
that you agree on actually is correct.
And so you have this paradox where let’s say
you want to have a system that supports 10,000 transactions
a second, but each computer in the network
can only personally verify a hundred transactions a second.
So how can each computer get a guarantee
about the other 9,900 without actually going
and verifying them themselves?
And it turns out that there are some,
like a bundle of different tricks that can do that, right?
So like one of them is just random sampling.
So the idea behind random sampling is like,
let’s say for simplicity, this is a proof of stake chain
and you have 10,000 validators, validators are like,
you know, the stakers and like for simplicity,
we’ll assume they all have the same number of coins, right?
If someone has more coins, we’ll just kind of split them up
and pretend they’re 10 stakers.
Then you do like some random shuffling
and you basically say, these random hundred validators
are assigned to validate this block.
These random hundred validators
are assigned to validate this block.
These random hundred validators
are assigned to validate this block.
And so each individual computer only gets assigned
to validate like a small piece,
but then the way that the information
about like what’s valid gets passed around, right?
Is that when these hundred participants validate a block,
they all sign a message basically saying like,
yes, we agree that this block is valid.
And then like they combine that signature into one
and then they broadcast that signature.
And then everyone else,
instead of verifying the blocks directly,
just verifies that signature, right?
And so if I see the signature,
I’m not directly convinced that that block is valid,
but what I am convinced of is that out of this committee
of this randomly selected group of a hundred validators,
let’s say at least 70 of them agree
that this block is valid.
And so if I trust that the majority
of these participants are all honest,
then because it’s all randomly selected,
the attacker can’t just like force themselves
into one committee.
And so the attacker is gonna be evenly spread out too.
And so if the entire set of validators is mostly honest,
every committee is gonna be mostly honest.
And so like bad blocks are not gonna go through, right?
So that’s like one simple form of sharding.
There was also other more clever things that you can do.
So for example, there’s this concept of a ZK snarks, right?
I’ll call it as your knowledge proofs.
So this is the idea that you can make a cryptographic proof
that says, I verified or I ran some complex computation
on this piece of data and I got this answer.
And so if you make these kinds of proofs,
then like if you see a ZK snark
that says some block is valid,
then you’re convinced that that block is valid.
And even if everyone in that committee is evil,
like they have no way of making a valid proof
for a bad block, right?
Like, because the proof itself,
like it is a proof that you did the computation
where that proof is much easier to verify
than just running the computation yourself.
And there’s once again, super awesome mathematical
or cryptographic magic behind making ZK snarks work.
But it gives you a little bit of a leg up
over the 51% honest assumption.
So it’s a little hack that improves upon the random
And like, there’s other hacks, right?
Like there is another hack called data availability
sampling that allows you to make sure that the data
in the blocks was actually published.
But like, basically, like if you stack a couple
of these tricks on top of each other,
you can create a system where like I,
as an individual participant can be convinced
that everything that’s going on in this distributed
blockchain thing is correct without actually personally
checking more than like a percent of it.
So that’s sharding.
But the, as I understand, maybe correct me on this,
is in the space of Ethereum, the sharding happens
on some fixed number.
Like the split is on some fixed number.
I think it’s 64 is the currently sort of proposed number.
So how does that help scaling?
Is it just the fixed constant scaling by 64?
And is that a way to achieve those crazy,
the crazy amount of scaling that seems to be required
to use cryptocurrency for purchasing?
So doing like competing with credit cards
and Visa and so on.
So first, I think like the 64 can be hard forked up
So we’ve set it so that like there’s theoretically space
in the data structure for 1024 shards,
it’s just that 64 of them are turned on.
There are challenges with having more shards
because like you have to have logic that just like checks
and manages all of those shards.
And if there’s too many of them,
then that becomes too expensive.
But even still, you can improve quite a bit.
And then the other thing that we’re doing is
if what we’re getting maximum scalability
by combining rollups and sharding.
So this might be a good time to talk about rollups.
What are rollups?
Now we’re moving into layer two ideas.
So the idea behind a rollup is basically that,
so instead of just publishing transactions
directly on chain and having everyone do all of the checking
of those transactions,
what you do is you create a system
where users send their transactions to some central party
called an aggregator.
And like, well, theoretically, you can have a system
where like the aggregator switches around
or where anyone can be an aggregator.
So it’s still like permissionless to send things.
Then what the aggregator does is they strip out
all of the transaction data that like is not relevant
to helping people update the state.
So when I say the state,
this is a very important kind of technical term
I mean, like account balances, code,
like things that are like memory,
internal memory of smart contracts,
like basically everything the blockchain
actually has to keep track of and remember, right?
So you just put in,
you take all these transactions,
strip out all the data that’s not relevant
to telling people how to update the state.
And then you take the data that’s needed
to update the state,
and then you like really compress it, right?
So like, for example, if we say,
I, Vitalik, have an account that’s 0xAB58,
blah, blah, blah, blah, blah, and it’s 20 bytes.
Well, instead we can say,
well, I have an account that is number 1874224 in the tree.
And that goes down from 20 bytes
to just like an index and a position,
which is three bytes, right?
So you use all sorts of these fancy compression tricks,
and you basically just,
instead of publishing all these transactions,
you publish this like tiny compressed blob, right?
So the amount of data that goes on chain
goes down by maybe about a factor of 10, right?
And then the second thing is that
you don’t do the computation on chain,
instead you do the computation off chain,
and there’s one of two ways to do this, right?
One is called a ZK rollup,
which is you just provide a ZK SNARK that basically says,
hey, look, I did this computation,
and I have this proof that here’s, you know,
some hash of the result and it’s correct.
And then you stick it on chain,
and everyone verifies this one proof
instead of verifying all these transactions.
And then the other approach is called an optimistic rollup,
which is basically made of the scheme where,
like, first someone says like,
hey, this is what I think the result of applying
these transactions is.
And then someone else can say,
I disagree, the result is different.
And only if two people disagree,
do you actually just like publish all of the data
and run that whole block on chain.
So if there’s disagreements,
then you just like run everything on chain
and whoever was wrong, like loses a lot of money, right?
So like disagreements are very rare
and they’re very expensive.
And then a ZK rollup,
you don’t even rely on this like challenging game at all,
you just rely on a proof.
So the core principle is basically that
instead of lots of transactions
and everyone verifies every transaction,
it is you take the transactions,
you strip them down and compress them as much as possible,
then stick that on the blockchain.
You do need to stick something on the blockchain
just so that everyone else can like keep up to date
with the state so they know what all the contracts are,
what all the balances are and all of this,
but it’s a very small amount of data.
And then you use one of these other off chain games,
could be this optimistic game, could be a ZK snark
to just prove that somebody out there did the computation
and the result is correct, right?
So you’re pushing like 90% of the work off chain
and then, well, 90% of the data
and 99% of the computation off chain,
and then you still have 10% of the data
and 1% of the computation on chain.
And so your scalability goes up by a factor of about 100.
So these systems are already alive
for some applications, right?
So there’s something called loopering,
which is just a ZK roll up for payments, right?
So you can have assets inside of the loopering system
and you can go around and transfer them,
and you get like much lower transaction fees, right?
Like instead of $5, you’d have to pay like less than 5 cents.
But the only problem is that this only supports
a couple of applications right now,
like making one that supports anything
that you can do on Ethereum just takes a bit more work,
but that’s being done as well, right?
So like within a few months, I’m expecting fully Ethereum
capable roll ups to be available as well.
So roll ups, just summarizing,
do most of the work off chain,
put only a little bit on chain, factor of 100 scaling,
sharding, another factor of 100 scaling,
100 times 100 factor of 10,000,
hundreds of thousands of transactions a second,
and like, you know, there’s your scalability.
Okay, so you achieve scalability,
you can do a large number of transactions very quickly
and the cost of doing those transactions are much lower.
You wrote that in the long term ZK roll ups
are going to win in terms of layer two technology.
Specifically you wrote, in general,
my own view is that in the short term,
optimistic roll ups, as you were saying,
are likely to win out of general purpose EVM computation
and ZK roll ups are likely to win out for simple payments,
exchange and other application specific use cases,
just as you were saying.
But in the medium to long term,
ZK roll ups will win out in all use cases
as ZK SNARK technology improves.
Why do you think ZK roll ups are going to win
the big picture battle over layer two technologies?
So I think ZK roll ups, like once you accept
that the technology works are just like conceptually simpler
and they have nicer properties.
The reason is that they do not have this concept
of a challenge game, right?
Like, as I mentioned in an optimistic roll up,
the way that you ensure that the results are correct
is that you let one person submit
and like they just submit with no proof.
They just say, here’s what I think the result is.
And then if someone else disagrees,
they make their own submission.
And then if you have two disagreeing submissions,
then you actually publish it on Chase.
And then you see who’s right.
But for this to work, like you need to actually wait
for someone to disagree, right?
So like, for example, if I have an asset inside
of an optimistic roll up and I wants to withdraw it,
then I actually have to wait a week to withdraw it.
Because like, if the block that contains my withdrawal
turned out to be invalid,
then there needs to be space for someone
to disagree with it, right?
Whereas with a ZK roll up,
like you don’t need time for disagreeing
because you just have a proof, right?
As soon as a block is submitted,
there’s a proof and you know it’s correct.
So if disagreements, especially in the longterm are sparse,
then you don’t want to do the optimistic,
the game theoretic thing, you wanna do the ZK stock.
Right, the ZK stuff is just,
like you can win a ZK roll up,
you can withdraw immediately.
You don’t have to like worry about the economics
of proving as much, right?
There’s just like fewer issues.
The reason why ZK roll ups are not winning everywhere today
is because ZK stocks are still a crazy new technology,
right, like this is something that 10 years ago,
it existed only in theory and there was none in practice.
Then, eight years ago,
people were just getting excited about it
in Bitcoin conferences for the first time.
Like four years, starting four years ago
or three and a half years ago even,
that was the first time you were able to make
any ZK stock based anything on Ethereum.
And then people started making them
and ZK technology has only really become efficient enough
to do a lot of things within the past
maybe one and a half years.
So it’s new technology, it’s crazy technology,
it’s admittedly scary technology.
If you wanna learn more,
I also have an article about this on Vitality.ca.
It’s actually really, really good.
You’re, most of your writing, it goes,
it’s technical but it’s accessible.
I highly, highly recommend to check out Vitality’s articles
and blogs, whatever you call them on the website.
It’s brilliant summary of the work.
Actually, Ethereum documentation period is really good.
I think that’s somewhat crowdsourced.
That documentation is really, really accessible
But let me ask about sort of other approaches
to layer two, like side chains.
So the one popular one is Polygon.
What are your thoughts about Polygon,
which is a layer two network?
Is it positive?
Is it negative for Ethereum?
Is it both?
Does it have a future?
Which is its own chain, but it’s using Ethereum.
It’s like based on Ethereum essentially.
Or maybe you can describe what it is.
So I think there’s a really big and important difference
in security models between rollups and side chains,
which is basically that rollups inherit
from the security of Ethereum, right?
So if I have coins inside of Loopring or Optimism
or Arbitrum or ZK Sync,
then even if everyone else in the world
who is participating in these ecosystems
hates me and wants to steal my money,
I can still personally make sure
that no matter what happens, I get my money out.
It might be a bit expensive for me to get my money out
and I have to do transactions on the main chain,
but I’ll be able to do it.
Whereas in Polygon, which is a side chain,
and so instead of being secured by Ethereum,
it’s also in part secured by its own
proof of stake consensus with its own token.
So if 70% of the whole,
or even 51% of the holders of Polygon tokens
wanted to take my money in Polygon, they can, right?
So that’s the, and like, to be fair,
like there aren’t even, like the supply,
I don’t think is even that widely distributed, right?
So like potentially you could,
this idea of 51% of the token holders
coming together and stealing everything,
like it’s not impossible, right?
Where does the scaling of Polygon come from?
Like why is it able to process much more transactions
than the Ethereum main chain?
What’s the idea there?
I think in part, like I imagine,
I’m not sure exactly what its capacity level is,
but like I imagine it has a higher capacity
because it’s a bit more willing
to take centralization trade offs.
And then another thing is that like,
if the Ethereum ecosystem,
like even if it did not do that, right?
If you think about an Ethereum ecosystem
hypothetically scaling with side chains,
then you would have a hundred copies of Polygon
and they would each have their own tokens,
they would each have their own chains.
And so even if each one of those chains
was only as scalable as Ethereum,
you could still, like the total sum of them
would still be a hundred times more than Ethereum.
The thing that I want to say in Polygon’s favor
just to be very fair to them,
like I really, you know,
I definitely really, you know,
respect the work that they’re doing.
So, you know, start with a bit with that word
of not criticism caution, right?
Like it’s that they made this kind of deliberate trade off
for very pragmatic reasons,
which is that the Ethereum ecosystem needs to scale now.
And there are applications that want to do something now.
And, you know, if there aren’t Ethereum friendly options
for them, then like, they’re not going to just wait
peacefully and do nothing for 12 months.
And they’re going to go to, you know,
either Binance Smart Chain or, you know,
one of some other system or potentially something
that just has totally no alignment
with Ethereum values whatsoever.
But whereas, you know, with Polygon,
like the best thing that you can say in Polygon’s favor
and against optimism is that, you know,
optimism is not live and Polygon is live, right?
Like it just takes more work to create a system
that has these extra rollups, security features.
And so Polygon just said, we’re going to be the system
that makes the pragmatic trade off.
We’re going to go, you know, functionality first,
and then, you know, we can talk about adding back
the security later.
So I’ve talked to them and like, in principle,
I think they’re very, you know, open to the idea
of like adding more security and like becoming more,
becoming a rollup or at least, you know,
adding a Polygon chain that’s a rollup
at some point in the future,
which is definitely something I think they, you know,
absolutely should follow through on.
But like the fact that like they exist now,
and so, you know, applications can kind of bootstrap now
on a chain that, you know,
even though its security isn’t perfect,
at least it exists and people can go use it.
And then over time, you know, the chain matures
as the applications mature.
Like, you know, it’s, I think a very reasonable strategy
and I’m definitely really happy
that they’re part of the ecosystem.
Yeah, it’s kind of interesting.
The history of cryptocurrency has this tension
of really good ideas that are hard to implement.
So they take longer to implement
and ideas that are not as good, but are faster to implement.
that basically took over the world
because it was quick to implement within 10 days.
And then like later kept fixing itself.
I don’t know what to make of that.
Sort of from an engineering perspective,
I’m more and more becoming comfortable
and accepting the fact that our whole world
will run a technology that’s not as good
as it could have been.
Just because the crappy solution is faster to implement
and it sticks.
What do you make of that tension?
I think the compromise that we’ve been taking
within Ethereum is like when we have to take
the crappy solution, we look for crappy solutions
that are forward compatible with becoming good over time.
When you build the quick and dirty thing,
you would still already have ideas in your head
about what the more complete thing
with all the security features added on would look like.
Even if it requires a hard fork?
For example, with sharding, I think it’s likely
that the first version of sharding that comes out
is not going to have zkstarks and data availability sampling,
But we know what these technologies are.
We feel like we have wrapped our heads around them.
And so we know how to build a system
where we can put all the pieces in place
so that it becomes very easy to bolt those components
on in the future.
So if you do things that way, then at the beginning,
you can have your system that has the functionality,
but say has less security or less sustainability
or less of something else.
But then over time, it’s designed in such a way
that it has this easy on ramp to adding those things.
And if you don’t think explicitly
about being future compatible,
then you do often end up with a quick and dirty solution
that backs you into a corner.
And then there are definitely cases
where I think the Ethereum ecosystem has suffered from that.
And we have had to expand pretty significant effort
on, for example, removing features that we didn’t realize
that we actually can’t sustain.
Like one big example is just increasing the gas costs.
So like making some operations more expensive
because they should be expensive
because they actually take a lot of time in the process.
So that’s making something more expensive,
kind of like taking some functionality away.
So if you can like be cognizant
of where you’re likely going into the future,
and if you don’t know, like even be cognizant
of both the most likely paths that you’ll take in the future
and coming, like thinking about your roadmap
and coming up with a roadmap where you know
that like if you wants to do either of those things,
then you have a clean path toward it.
That’s probably the best kind of practical way
to get the best of both worlds that we have.
Okay, let’s talk about this wonderful process of merging.
Okay, so there’s the main net,
which is the Ethereum 1.0 chain,
or the, what should we say,
the chain that uses proof of work
as a consensus mechanism.
And then there’s, what is it called?
The beacon chain that uses the proof of stake mechanism.
And I believe the beacon has been deployed successfully,
is working, so that was in December of 2020.
There’s a bunch of questions around that
that’s fascinating as well,
but I think the most fascinating question
is about merging those two.
When do the two chains, one that’s proof of work,
one that’s proof of stake, merge?
And what are the most difficult parts of this process?
Right, so as you’ve said, right,
the way that we have set up this proof of stake transition
is that at first, the proof of stake chain
just launches on its own, right?
And this is the thing that happened in December.
And the proof of stake chain has been running
for close to six months now.
I mean, by the time people watch this,
it might actually be six months.
But it isn’t actually coming to consensus
on anything except for itself, right?
So the idea behind that is to just
give the proof of stake chain time to mature,
time for people to build the ecosystem around it,
time to make sure that there aren’t any bugs,
and just like prove to the community
that no proof of stake actually is real,
and a full transition is realistic,
because the thing that you’re transitioning to
already exists and already works.
And then at some point in the future,
you have this event called the merge,
where you basically take the activity
that’s being done inside of the proof of work chain,
and you actually move it over into the proof of stake chain,
so you get rid of the proof of work side completely.
So the way that the merge will work is,
it’s definitely gone through a few different iterations.
Like the earlier versions of this
actually required more work for users
and more work for clients.
It was much more like,
oh, there’s this new chain, there’s this old chain,
and then everyone has to migrate
from the old chain to the new chain,
and then at some point we’ll forget about the old chain.
The new version is designed
to be much more seamless for users, right?
So basically what actually happens is that
the old chain basically becomes embedded
inside the new chain, right?
So starting from the merge transition block,
every proof of stake chain block
is going to contain a block of the,
what we consider now to be,
what we consider to be the Ethereum chain today,
but we’ll call it the execution chain.
And then at the same time, to create one of these blocks,
you’re not going to need proof of work anymore, right?
So basically at the same time,
you would both get rid of the proof of work requirements
for one of these blocks to be valid,
but instead you require these blocks
to be embedded inside of the proof of stake blocks, right?
So you basically have like a chain inside a chain.
And this is, from an architecture perspective,
you might think it’s a little bit suboptimal,
but it actually has some nice properties
and makes it easier to kind of think about the consensus
and think about what we call the execution layer,
like transactions and contracts kind of separately
and upgrade them separately.
And it also just means that the upgrade process
is extremely seamless, right?
Because from the point of view of a client
that’s following the chain,
you basically have to update nothing, right?
You’re still following the same chain
and follows the same rules,
except instead of checking proof of work,
you’ll switch to checking that these blocks
are embedded inside of blocks of the proof of stake chain.
So there’ll be this merge block
that will mark this transition.
And over time, I guess the new chain
will contain the full record
of all the transactions that’s ever happened
on the previous chain, on the old chain.
So maybe I’m asking a dumb question here,
but in this process, is the new chain going to have
all the information of the past transactions?
The new chain is not going to hold information
from what happened in the Ethereum chain before the merge,
right, so Ethereum clients that people are going to use
around the time of the merge and soon after the merge,
they’re probably just going to sync
and check the proof of work chain up to the merge,
and then they’re gonna check the proof of stake chain.
But at some point in the future,
I think people will just stop bothering
checking the proof of work before the merge.
Got it, so that old history information is not important
for the future, like if you’re operating actively
on the new chain, that history is not important to you.
It’s not important, so it’s not strictly important
for just like any smart contract
or just like applications that run on the blockchain.
It can be important to users,
and it can be important for some applications,
but we’re basically saying that like maintaining
and serving that is not going to be a simultaneous
with the responsibility of every Ethereum node.
If you want that information, there can be separate
protocols for backing it up.
And like these other protocols actually exist, right?
Like there’s something called the graph,
which is doing some history retrieval.
Potentially, you can just take that entire chain
and stake it on BitTorrent.
Like there’s lots of ways to like archive it
and create kind of customized search protocols for it.
So what’s your sense why, so there’s a Python 2
and Python 3, and it took forever for people to switch.
What’s your sense why this merge has been taking longer
than perhaps was expected?
I think the biggest reason is just we’ve been
underestimating the technical complexity.
There’s a lot of technical complexity
in making a successful proof of stake chain.
There’s a lot of technical complexity
in actually figuring out the transition process.
So that’s bigger than social complexity.
So the technical complexity you would say
is the bigger reason for any delays
than the social complexity?
I actually think so.
I think we’ve been very fortunate
to not have too much social complexity around the merge.
So not much drama.
I think the biggest part of the reason
is just because we have been talking
about proof of stake and sharding
as being part of the roadmap
since almost the very beginning of the project, right?
Like the very first proof of stake blog post
is from January 2014, which was two months
after the project started
and maybe even a day after the announcement.
So proof of stake was not something
that we kind of put on anybody by surprise.
And then when the Dow fork happened
and the people on the ETC side split off,
I think it also just happens that a lot of the people
that were not willing to stomach the Dow fork
and then join the ETC side,
they were the more Bitcoiny types.
And the more Bitcoiny types do also tend to like proof
of work more.
And so like that also sort of ended up,
sort of like purifying the communities on both sides,
So Ethereum Classic is not switching to proof of stake
and they’re happy with their setup.
And by the time that it came
to the beacon chain launching into now,
I think the community is very strongly in favor
of the proof of stake switch.
But let me ask the question that no engineer wants to hear,
which is the question of timeline.
When do you think the merge will happen?
Do you have a sense it might happen this year?
Do you have a sense it might be pushed
towards next year, 2022 or even beyond?
I think early 2022 is the most realistic.
There’s definitely still like an optimistic case
of it happening this year,
but the realistic thing to count on is definitely
the very early part of next year.
Is there specific things that stand out to you
that will make you feel good about progress
if you see it happening?
So the thing that we had last month
is we had this online hackathon called Rayanism,
where basically a bunch of the different client developers
that are going to be part of the transition,
like hacks together some test nets
of the post merge Ethereum chain.
So these were only test nets
of what would happen after the merge.
They were not test nets of the transition itself.
So the thing that people are working on now actually
is the transition.
So having a full specification
of both the transition and post transition,
and we have specifications now,
but in a realistic way,
they’ll probably needs to have a couple of changes
and have things that continue to be ironed out,
and then have a test net
that does both the transition and the post transition.
And then once you have a test network,
then you just have to do a lot of testing and audit it,
and then do some runs on not just a specialized test network
but on say an existing test network
like a Robson or Rinkeby
that Ethereum people already significantly use.
And if it works,
then you can deploy the transition on mainnet.
Just as a quick comment,
because this is fascinating.
In August of last year,
there was this Medalla.
I believe it’s pronounced Medasha.
It’s a South American subway station.
I forget where.
But spelled with two Ls.
because that’s how Spanish works, right?
Like the two Ls have a…
Yeah. Okay, cool.
Anyway, but I read about it in middle of August, August 14th,
there was an incident on that test net.
How does this process work?
What do you learn from those kinds of incidents
when stuff goes wrong in the test process?
I think that incident was that
there was a consensus failure of some kind as I remember.
Basically just different clients
interpreting things in different ways,
and then one of them getting kicked off the network.
And then it ended up taking a while
to actually get everyone to get back online.
A big part of the reason why it took weeks to resolve
is because it’s on a test network,
like the coins are valueless.
And so there’s not really this big push of any kind
for people to actually go and download the new clients
so they can start participating again.
And so it definitely took a while
until the chain started finalizing again.
And then also there was, I think,
another round of just not finalizing in October,
as I remember.
There were definitely things that we learned.
Like there were a lot of things,
especially that client developers
just learned about like optimization
and how to build their clients
in a way that they can process things efficiently.
There’s a lot that we learned
from just like seeing the full life cycle
of what happens when more than a third of the validators
go offline and then finalization stops.
And then that kind of weird unusual state
of the chain continues for a while.
And then eventually everyone who is not participating
just gets enough of their stake.
Like we don’t use the word slashed,
we use the word leaked for this,
but like basically also burned
until the people who are participating
go back up to two thirds
and then the chain goes back to finalizing.
So just seeing all of those edge cases play out live,
I think actually helped a lot
and probably helped to really contribute
to making us feel better about Mainnet.
I mean, there’s also an incident just recently
in April 24th of 2021
where this was on Beacon, I guess.
There was a bug discovered in the software client Prism
that prevented roughly 70% of validators
on the network from producing blocks.
I mean, maybe you can comment on what happened,
but broadly like the big picture,
what kind of stuff are you worried about
in terms of problems that might arise?
Are we talking about small bugs?
Are we talking about like emergent social,
unexpected social bugs?
What are the things that worry you
about the future of Ethereum
that you want to make sure you construct mechanisms
that prevent those things from happening?
So one of the lucky things there was
that this particular bug only prevented
proposed self blocks.
It did not prevent attestations.
So attestations is just a mechanism for voting on blocks.
And it’s the attestations that are actually responsible
for the chain finalizing.
So like coming to this more permanence agreements on blocks.
So the chain was actually quite stable all the way through.
I think the thing that we generally learned
from these experiences is just how valuable it is
to have this multi client network.
So this is one of these areas where I think Ethereum
distinguishes itself from like Bitcoin, for example.
That in Ethereum, we don’t have one single client
that everyone just runs, right?
There’s multiple implementations of the protocol.
And these multiple implementations,
they all process and verify the blocks
that each other can verify, right?
So they all speak the same language.
Now, sometimes when there’s a bug, they disagree.
And when two clients disagree because of a bug,
we call this a consensus failure.
And consensus failures are pretty serious, right?
And when you have a client’s monoculture like Bitcoin does,
then it’s more rare to have consensus failures.
Though you still have them actually.
Bitcoin had a consensus failure
between two different versions of the same client
back in 2013, but they’re less likely to happen.
But the interesting thing is that the multi client
architecture has actually, I think, saved Ethereum
much more than it’s heard it.
So even in this most recent incident, right?
Like Prism was not producing blocks,
but all the other clients were still producing blocks.
There’s four others, right?
Yes, it’s a Prism, Nimbus, Teku, and the Lighthouse.
And then also Ethereum back in 2016 had this fun events
that we call the Shanghai DOS attacks.
They’re called that because the attacks started
right on the first day of our annual conference at DEF CON
that happens to be in Shanghai that year.
So what happened basically was that someone came up
with a way to create blocks that were very slow
for one client to process, but not the other client.
So at that time, there were basically two Ethereum clients.
They were called Geth and Parity.
Right now, I think the top three ones are Geth,
Nethermind, and Basu.
But what happened as a result of us having two clients
is that the attacker was just not able to come up
with blocks that both clients were completely failing
And so a lot of the miners and a lot of network participants,
they just kept on switching between the two implementations
depending on which one worked.
And that actually really helped the chain survive
through that month of attacks as the attacker just kept
on hammering at our system and identifying all
of the weaknesses and just forcing our clients
to do this rapid sprint of just optimizing the hell
out of everything and make sure there aren’t any
of those DOS blocks or DOS bugs remaining.
So that was another example.
And then as a counter example,
so something that also shows the point from the other side,
Bitcoin had this bug in 2010, the balance overflow bug.
Basically someone created a transaction that had two outputs
and those outputs were both of a few billion Bitcoin.
So like about two to the power of 63 Satoshis.
And then if you add those numbers together,
you’ll go above two to the power of 64.
And of course, computers like once you go above
to the power of 64, you wrap around.
And so the Bitcoin nodes thought that there was enough money
to pay for the transaction because it was asking for,
let’s say like a billion Satoshis or something,
but actually it was asking for two to the power
of 64 plus a billion.
And so the attacker just managed to create like billions
of Bitcoin out of thin air.
And this was not only discovered and fixed
after something like 12 hours,
but if there had been,
if Bitcoin had been a multiple implementation system,
then what would have almost certainly happened
is like one of the clients would have bugged out,
but the other clients would have probably
actually had a check for that, right?
And so there would have been a consensus failure,
but at least that would have like alerted everyone
that there is a problem very quickly.
And it also would have given everyone
just like obvious social permission to go and, you know,
pick whichever one of the chains is correct
and solve the problem.
So like, that’s, I think a big learning that we’ve had
from multiple of our experiences in the Ethereum ecosystem,
just like validating this multi client model.
And like, to be fair,
it’s a model that we get criticized for a lot, right?
Like Bitcoin people talk about, you know,
the risk of consensus failures that this creates.
VC types are like, well, you know,
isn’t it expensive and wasteful to fund three software teams
where you could just be making, you know,
one quote focused effort, you know,
they love the word focused.
And like, you know, Ethereum is not that,
but it’s amazing despite not being that.
Basically, yeah, so that was interesting.
And then there have definitely been other learnings as well,
just from like seeing the chain live
and seeing what actually is the staking experience like,
what are the actual incentives
for all the different participants.
So I definitely feel like we’re gaining a lot
from this sort of one year of trial running the chain
before we actually make all of Ethereum depend on it.
Let me ask perhaps a strange question,
but you know, proponents of Bitcoin will say things like,
Bitcoin fixes everything.
So why do we need Ethereum?
Versus like Bitcoin plus lightning network for scalability
and then using Bitcoin for,
with this proof of work for security.
So in this kind of, it is perhaps sort of a strange question,
but it’s a high level question.
Why do we need another technology?
Yes, it has a bunch of nice features,
but like doesn’t Bitcoin fix everything already?
So the thing that always attracted me about Bitcoin
is these values of decentralization,
creating these open provisional systems
that anyone can participate in
and that aren’t just going to flop over and die
if whoever created them gets bored
and that are resistant to like whoever runs them
breaking the rules and all of these things.
And I think that pretty strongly that these principles
are like really valid in importance
to much more things than just money, right?
Like Bitcoin is the blockchain for money
and Ethereum was built from the start
as a general purpose blockchain, right?
There is ether the asset on Ethereum,
but then you can also make decentralized financial things,
what we call DeFi today.
You can make like ENS, the decentralized domain name system.
You can put, make prediction markets on it.
You can make totally nonfinancial systems
that just like keep track of whether or not
some certificate was signed
or whether or not some like cryptographic key got revoked.
There’s this big long list of like just interesting things
that you could use about blockchains to do, right?
Like basically they are sort of the missing piece
that where without them,
the kinds of things that a decentralized computer network
can do is very limited.
And once you have them,
a lot of those limitations end up going away.
And so Ethereum was like always from the beginning
about that, right?
It’s about like, hey, this isn’t just money.
There’s so much more that you could do
if you could just go ahead and make any infrastructure
or digital institution or DAO
or whatever you wanna call it,
where the kind of the base layer of the logic
is just executed in this open and transparent way
where everyone can see what’s going on
or if you like your zero knowledge proofs,
at least everyone can see proofs that prove to you
that what’s going on follows the rules
and you don’t need to just constantly keep trusting
Hence the smart contracts
as being a sort of a core technology as part of Ethereum.
Smart contracts, the computer programs
that are running on Ethereum,
they are like the core
of what makes Ethereum general purpose.
Yeah, so I do think that there’s a lot more wrong
with the world than just money, right?
Like I’m not one of these people who thinks that
if you get rid of fiat currency
and you replace it with cryptocurrency,
then suddenly wars are gonna go away, right?
Because like, first of all,
like say your average revenue
is only a small portion of government revenue, right?
It’s like what, 5%, 10%, something like that.
Second of all, like if you are the sort of,
this is one of the things
I don’t even get about their philosophy.
Like, let’s say you’re the sort of person
who is an extreme and very distrusting libertarian
and you think that these governments are terrible, right?
Like we know today that governments
find a combination of things like welfare
and things like the military
that goes and like bombs people in Afghanistan, right?
And so the question you have to ask is like, okay,
you with your new, you know, magic newfangled cyber currency
that takes over the world,
take away the government’s ability
to have seniorized revenue
and so you reduce the government’s revenue by 10%.
If the government is that evil,
which portion of its expenses
is it gonna take that 10% from?
Is it gonna stop the bombing people in Afghanistan
or is it gonna cut welfare?
If you think it’s the first,
you have a very optimistic view of the government, right?
So that’s, I guess, my perspective
on like why the whole, you know,
we’re going to save the world and create peace
by like denying governments the right
to stealth taxation kind of perspective
doesn’t really make much sense for me.
And I do think that there is real value
that comes from a decentralized and open currency.
Like just the fact that there is a financial infrastructure
that anyone in the world can go ahead and use, right?
It’s, that’s something that can easily be
a big boon for people, right?
There’s a lot of places where the currency
and is much less stable than the dollar.
And, you know, these people like they don’t like,
well, if they use Bitcoin,
their only option is to get Bitcoins, right?
Which, you know, are also pretty volatile.
If they use Ethereum, then, you know, they can get ether,
but then they can also get stable coins, right?
And you might think that, you know,
oh, you’re not being ideologically pure.
Now you’re giving them stable coins,
which are mirroring dollars.
And obviously dollars are going to collapse too.
But the reality is that dollars are vastly more stable
than the Venezuelan Bolivar.
So like, there are really meaningful and beneficial things
that you can give to people by having a global
and open financial system.
But I think if you want to actually do that,
like you have to have much more than just a currency, right?
And then if you want to go beyond financial things,
then, you know, you have to obviously have much more
than a currency and then, you know,
you also have to actually take scalability seriously
because the nonfinancial applications,
like nobody’s going to pay $5 a transaction for them.
Can we return to dogs?
No, no, no, no, no.
The other one’s categorically forbidden.
Yeah, categorically forbidden.
Is there any cryptocurrency based on cats actually?
I think there are.
Like, there was cat coin, there was nan coin.
For some reason, they just didn’t catch on as much
as the dog coins did.
Okay, so let’s talk about Dogecoin and Elon Musk.
Elon said that, quote, ideally,
Doge speeds up block time 10x,
increases block size 10x, and drops fee 100x.
Then it wins hands down, end quote.
You said in a blog post, partially responding to that,
that there are subtle technical reasons
why this is not possible.
To this, Elon said that you, quote, fear the Doge.
So let’s talk about this.
What are the technical hurdles for Dogecoin
that prevent it from becoming
one of the primary cryptocurrencies of the world?
And do you, in fact, fear the Doge?
I definitely feel obligated to correct the record.
I definitely do not fear the Doge.
No, I love the Doge.
I actually visited the Doge in Japan a few years back.
She’s an amazing dog, she’s still alive.
Wait, the original Doge?
So, you know, we accept Doge every year
for our annual DEF CON conferences.
So, I definitely don’t think Ethereum
is opposed to Doge coins.
I kind of want to feel like Ethereum
is at least a little bit in spirit itself a Dogecoin.
And then, as I mentioned, I love Doge,
I bought a bunch of Doge, I still hold a bunch of Doge.
On the scalability question,
the challenge basically is the limits to scalability
and the trade offs with centralization, right?
If you just increase the parameters
without doing anything else,
then it just becomes more and more difficult
for people to validate the chain
and it just becomes more likely that the chain
becomes centralized and becomes vulnerable
to all kinds of capture.
So, does it need like some of the layer two technologies
that we’ve been talking about?
I personally think that if Doge wants to somehow bridge
through Ethereum and then people can trade Doge
thousands of times a second inside of a loop ring,
then that would be amazing.
If they want to just like take ZK roll up style technology
and just have thousands of transactions a second
on their own chain, then that would be a great outcome
So, is there ways for Ethereum and Dogecoin
to work together?
Okay, so there’s a power behind a person like Elon Musk
pushing the development of a cryptocurrency.
Is there ways to leverage that power and that momentum
to improve Ethereum, to improve some of the sort of
cryptocurrencies that are already technologically advanced
and pushing forward that kind of technology?
I definitely think there’s room for…
You know that meme of Doge like taking over,
like that storm?
I’ve seen it.
Is there a way to ride that storm, that wave of the Doge
that’s taking over?
I think if we can have a secure Doge to Ethereum bridge,
then that would be amazing.
And then when Ethereum gets its scalability,
any scalability thing that works for Ethereum assets,
you would be able to also trade wrapped Doge
with extremely low transaction fees
and very high speed as well.
Is there precedence for building secure bridges
Is that, I mean, how difficult is this kind of task?
It’s definitely something that’s in its infancy.
There definitely have been some cross chain interaction
things that have been done before.
So, the earliest is probably the concept of merge mining,
right, when a chain just makes its entire
proof of work algorithm dependent on
the proof of work algorithm of another chain.
So, I think famous Dogecoin actually merge mines
to Litecoin, which is, I think in retrospect,
not looking like a very good choice
because now Dogecoin is bigger than Litecoin.
But, you know, if there’s potentially some way
for Dogecoin to merge mine with an Ethereum proof
of stake of some kinds,
then that could be an interesting alternative.
So, that’s one type of chain interaction.
As far as bridges, like one chain reading another chain,
early in Ethereum’s history,
there was this project called BTC Relay.
It’s a smart contract on Ethereum
that just verifies Bitcoin blocks.
I think people stopped really caring about it
and maintaining it because there just weren’t enough
applications that were actually interested
in using it at the time.
And then the transaction fees got too high
to actually maintain it.
So, I think if we want to make a BTC Relay 2.0,
that becomes cheaper because, you know,
it uses snarks or something like that,
then you probably could.
But maybe now’s the time when you actually
can do that sort of one way verification.
But the one challenge though,
is that if he wants to have a bridge
that allows you to move assets between chains,
then you don’t just need one way verification,
you need two way verification, right?
And Ethereum can verify anything
because Ethereum smart contracts
can just run arbitrary code.
But if you want Bitcoin to be able to do things
based on what happens in Ethereum lands,
then Bitcoin would have to basically,
well, they can do everything with soft forks
because that’s their religion,
but they’ll do it that way.
And if Doge wants to make a fork
where that allows for two way transferability
with Ethereum, then they could.
I mean, I think that would be a lovely collaboration
to make if there’s interest.
I think there might actually even be some multi SIG funds
that has some funding.
It’s just a bounty for someone
to make a bridge between the two.
Oh, could you maybe try to psychoanalyze Elon Musk
for a brief second?
So what are your thoughts about Tesla and Elon Musk’s
journey through the cryptocurrency world?
So first with Bitcoin and then with Dogecoin.
So acquiring, holding a large amount of Bitcoin.
And I believe, at least considering the acquiring
and holding a large amount of Dogecoin.
Positives, negatives, what do you think the future
for Tesla and SpaceX in the cryptocurrency space looks like?
Do you think they’ll consider Ethereum?
I’m sure that if they stay in the cryptocurrency system
at all, then they have to at some point.
Bitcoin number one, Dogecoin number,
I mean, come on, it deserves to be number three.
And then, or number two.
And then Ethereum can be whatever that other number is.
If Ethereum only becomes a Dogecoin somehow,
maybe change the logo to incorporate a dog of some sort.
Almost like Doge sneaking behind.
Oh, that would be fascinating.
For when the merge happens.
And I think, Elon, you definitely,
I think you would make a mistake
if you were to kind of ascribe too much sophisticated,
malevolent, or any deep intentionality to the whole process.
I think he’s just a human being and he likes dogs,
just like I like dogs.
Yeah, I think that is literally the reasoning
behind the whole Dogecoin thing.
There is some aspect to which,
I mean, the guy helped launch a car into space, right?
Like you could ask, like, what is the purpose of that?
I think the purpose of that is fun.
I think he truly is more and more, especially lately,
embodying the whole idea that the most entertaining outcome
is the most likely and he’s fully embracing
the most entertaining outcome.
And in many ways, Dogecoin is the most
As cryptocurrency becomes more and more impactful
in the world, people are getting
more and more serious about it.
And so he’s selecting the cryptocurrency
that is the least serious and the most fun.
And there’s something to that,
like coupling fun with technological sophistication
and somehow figuring out a way to do that well.
I want the world to be fun.
I think the world being fun is great.
Okay, let me ask about a couple
of other technologies if it’s okay.
What are your thoughts about Chainlink
and hybrid smart contracts that utilize
off chain external data sources?
And I think it’s definitely necessary for a smart contract
so that do a lot of things to use off chain data
of some kind, right?
Like if you want to have a stable coin,
you need a price oracle so you know
what price you’re targeting.
If you want to have some fancy no crop insurance gadget,
like I think EtherRisk has been doing
a lot of good work with that.
And I think it was either Kenya or Sri Lanka or both,
like they’re making a lot of good progress
in some of those places.
Like you need some kind of oracle to tell you,
did it actually rain in this particular area?
If he wants to have like assets that mirror
other financial assets, you need an oracle.
If you want to have a prediction market,
you need an oracle.
And so projects that provide oracles
are definitely really important.
There are definitely different kinds of use cases.
Like Augur is more about events
and the Augur oracle is designed,
I think differently from Chainlink, right?
Like Chainlink emphasizes the whole,
we have a fast automated thing
that just gives you data quickly.
Whereas Augur is more, we don’t give a crap about speed.
And look, we don’t need to give a crap about speed
because if you want to get your money out
on a prediction market that where in reality it’s resolved,
you can probably just sell your coins for 99 cents anyway.
So I mean, I think Chainlink is definitely
taking a good and important part of the oracle design space.
And I’m definitely happy that there’s
that project taking the task on.
I mean, at the same time, I do think that
their frog army on Twitter can get a bit intense at times,
I mean, is there a way to incorporate
sort of oracle network type of ideas into Ethereum?
I personally would prefer the Ethereum base layer,
like stay away from trying to provide too much functionality
because like once you have the Ethereum base layer
making a claim about like say the US dollar
to Ethereum price, like at some sense,
you’re basically saying that like Ethereum
as a base platform starts making
what could be geopolitical statements, right?
Like for example, imagine if there was some civil war
and the US split up and you had two currencies
that both claims to be the US dollar,
well, Ethereum would have to pick one
for the sake of everyone who was already using that oracle.
So does that mean that the blockchain would be
taking a position in this big mega political debate?
So I think like for just those kinds of reasons,
I would personally like prefer Ethereum itself
to be more of this sort of pure platform
that just analyzes transactions
just mathematically using deterministic consensus rules.
And then if you need the oracles, that can be layer twos.
Like I think Ethereum like benefits
from not trying to do everything at layer one
and having this like very robust layer two ecosystem
where you have all these projects doing interesting things.
Yeah, focus on the basic technology avoid the politics.
Let me ask a bit of a human question.
Charles Hoskinson, someone you’ve worked with
in the early days of Ethereum,
there appears to my outsider view
to have been a bit of a falling out.
Is there positive inspiring human story
to be told about why you two parted ways?
I kind of want to let the various books
about Ethereum speak for themselves,
but I feel like since that time,
I think Charles has clearly progressed
and matured in a lot of ways.
And people who follow Charles closely
have definitely told me that like 2021 Charles
is very different from a 2014 Charles.
And I’m sure it’s 2021 Vitalik is much different
from 2014 Vitalik as well.
I’m kind of interested how the 2030 and 2040 Vitalik
and Charles look like as well.
Like the progression of the humans.
Is this going to be one of those things
where like everyone comes full circle
and then 2030 Vitalik and Charles are best friends?
Yeah, not necessarily best friends,
but some kind of are able to reminisce
in ways that puts some of the tension of the past behind.
I think such things are possible.
I think people definitely absolutely have a right to,
and I think should strive to just constantly change
and reinvent themselves.
Is there something you could say about your thoughts
about the Cardano project that Charles Hoskinson leads?
They’ve worked on some interesting ideas
that mirror some of the ideas in Ethereum,
proof of stake, working on smart contracts
and all those kinds of things.
Is there something, again, positive,
inspiring that you could say?
Are they a competitor?
Is it complimentary technology?
There’s definitely interesting ideas in there.
I do think Cardano takes a bit of a different approach
than Ethereum in that they really emphasize
having these big academic proofs for everything,
whereas Ethereum tends to be more okay with heuristic arguments
in part because it’s just trying to do more faster.
But there’s definitely very interesting things
that come out of IOHK research.
Can you comment on that kind of idea?
I, as sort of having a foot in research,
enjoy Charles’s kind of emphasis on papers
and deep academic rigor.
What’s the role of deep research rigor
in the world of cryptocurrency?
I’m actually the sort of person
who thinks deep rigor is overrated.
The reason why I think deep rigor is overrated
is because I think in terms of why protocols fail,
I think the number of failures that are outside the model
is even more important, is bigger and more important
than the failures that are inside the model.
So if you take selfish mining, for example,
that original discovery from 2013
that showed how Bitcoin does,
even if it has a 50% fault tolerance,
assuming everyone’s honest,
it only has a zero to 33% fault tolerance,
depending on your network model,
if you assume rational actors.
And to me, that was a great example
of an outside the model failure, right?
Because traditional consensus research,
just up until or before the blockchain days,
did not think about like incentivization much, right?
There was a little bit of thought about incentivization.
There’s like a couple of papers
on the Byzantine altruist rational model,
but it wasn’t that deep.
It was mostly operating under the assumption
that we’re gonna make consensus
between 15 participants and these are institutions.
And if something goes wrong,
then we can figure out whether or not
it was deliberate offline.
And if they did something evil, we can sue them.
Whereas in the crypto world, you can’t sue that, right?
And so that whole discovery basically arose
just because the model of traditional consensus research
just didn’t cover those possibilities.
And then once you go out of the model,
those other issues do exist, right?
So, but then at the same time,
there definitely are protocols that turn out to be,
that do have failures inside the model.
Like this reminds me of the time
when I think I found a bug
in a proposed consensus implementation
from either BitShares or EOS.
This happened around the end of 2017.
So that was definitely inside the model
because like they had a very clear idea
of what they were trying to achieve.
They had a very clear description
and like there’s a very clear mathematical argument
for why the description doesn’t lead
to what they’re trying to achieve.
But ultimately what you’re trying to achieve
can never be fully described in formal language, right?
Like I think this is the big discovery of,
the AI safety people, for example, right?
Like just having a specification of what you want
is an insanely hard problem.
And like the more powerful the optimizer
that you’re giving the instructions to,
the more you have to be careful.
And so, I think there are the kind of these two sides.
And then the other thing is that
a lot of the academic approach ends up
basically optimizing for other people
inside of the academic system.
And it doesn’t really optimize for like curious outsiders.
Whereas like I personally totally optimize
for curious outsiders, or at least I feel like I strive to.
So I guess like that’s my case for why I like
tends to behave in ways that, you know,
occasionally traditional academic types
criticize as being reckless.
But I mean, on the other hand, you know,
there’s definitely real benefits that come from
like just taking a rigorous approach,
especially when, you know, you know what the thing,
like, you know what the specification is
of what you’re trying to get.
And like, you’re trying to kind of improve your ways
or provide protocols that actually provide that.
And like, you know exactly what you’re looking for.
I feel like realistically, you probably wants to do
both kinds of analysis.
And like, sometimes you even want to do
both kinds of analysis in stages, right?
Like you have, you want to do more quick and dirty things
and even wants public feedback on the quick and dirty stuff.
And then later on you formalize it more
and then you get more feedback.
Like in general, I guess I feel like the norms of research
in the future, like the internet has just changed so much.
There’s no way that it’s not going.
And you know, it’s even changed like collaboration structures
and like the patterns in which we work with each other.
There’s no way that the correct structure
for collaborative research is the same
as what it was 15 years ago.
But like, what combination of these existing components
and of new ideas it is, like that’s something
that’s, you know, totally legitimate
to kind of fight it out.
And I think it’s great that there’s different ecosystems
that have different attitudes to things.
Like, you know, I think, you know,
there’s a big possibility that, you know,
things that the Ethereum,
ways that the Ethereum ecosystem approaches some problems
is totally wrong.
And if there’s other ecosystems with different principles
and they do well, that’s something that we can learn from.
In the spirit of the depth for a search,
can you comment on AI safety?
And some people are really worried
about the existential risks of artificial intelligence.
Is there something you could say that’s hopeful
about how we avoid in the same kind of line of reasoning
about creating formal models versus kind of looking
outside the model into what the real world actually is like?
Is there some lessons from that we can take
and map onto the AI safety world
where the potentials of the technology,
whether it’s in autonomous weapon systems
or just the paperclip problem
that we can avoid AI destroying the world?
So my impression is actually that, like,
this is more of a kind of far away impression
and it could be wrong, that it might even be
that one of the challenges is that AI is not formal enough.
Like, because AI is very practitioner oriented, right?
Like, it’s all about like, hey, I found a couple of hacks
and look, I ran them and look,
they seem to improve classification accuracy
from 0.684 to 0.773.
So a lot of the time there just isn’t actual science behind
why this hack works and why this other hack doesn’t work.
You just sort of like trial and error your way into it.
And I could see how that approach works,
but at the same time, like,
that approach is not good for eligibility, for example.
Like, it’s not good for like understanding
what the heck is actually going on,
like how these kinds of systems conceivably might fail.
Like, there’s even, you know, a debate on like,
can you take GPT3 like things and just scale them up
and their intelligence will continue to improve
or is there just like some types of reasoning
that they’re fundamentally bad at
and like they’re not gonna get good at it
no matter how much you like scale this exact same approach
and add more hardware to it.
So having like thinking about what’s going on
more explicitly, I mean, my understanding
is that a big part of AI safety research
is trying to do that sort of stuff, right?
Yeah, formalize, try to improve just AI eligibility,
like trying to understand, you know,
if the AI makes some classification
so we can actually see like what happens
and like what’s going on in the middle, right?
Whereas with crypto or with traditional cryptography,
you know, it’s like very much not,
well, okay, I mean, I shouldn’t quite say that.
It’s, traditional cryptography is this interesting mix
of being very formal and being very informal
because it’s very formal with,
given these security assumptions,
prove that the protocol works
under these security assumptions.
The places where it’s very informal is like,
well, how do we even know that there isn’t
an efficient algorithm for factoring numbers?
Yeah, we kind of tried it for 40 years.
And then, you know, so far,
no one’s found anything better
than the general number field sieve.
And like, okay, fine, we’ll just assume it’s fine.
You know, how do we know you can’t find the discrete log
between two elliptic curve points?
Like, nope, did it a couple of decades,
no one’s found anything faster
than like baby step, giant step stuff.
and like, there’s definitely ways
in which that approach really makes sense, right?
Because at least you can concentrate your analysis
on a small number of building blocks.
And like, you know, you do have some intuitive reasoning
about those building blocks,
but like at least there is a small number
of building blocks and lots of people are looking at them.
And then everything else just sort of gets formally built
on top and you actually can like mathematically reduce
the security of big things to building blocks, right?
Like you can have mathematical proofs
that say, you know, if you make a ZK Synarch
of a yes statement when in reality that statement is false,
then you can use that to like extract information
out of elliptic curves that, you know,
it completely breaks the problem or something like that.
So ZK Synarch is an example where formalism is beneficial.
And so maybe you can have the same kind of stuff
in the AI safety within AI systems
that you can get a hold of some kind of aspect
of the systems that you can control provably.
And then in blockchains and cryptocurrency,
I think the one area where consensus mechanisms
is still more an art than a science
is that these aren’t just like technological systems,
they’re crypto economic systems, right?
And they make assumptions about people.
And which assumptions you can make about people
is not something that you can prove with math.
Right, even just the basic 51%.
Can you trust the 51%?
If you can’t trust the 51%,
can you trust the other 49% to be able to coordinate
on like making their own fork?
What will happen to coin prices?
Like how do people as human beings react to these events?
Like there’s all of these assumptions.
But no, at the same time,
look, if you can write down the assumptions,
then you can like do formal things with them.
I almost forgot to ask you
about one of the most exciting aspects of Ethereum.
I mean, it’s non technical.
I think it’s a societal, it’s social, which is NFTs.
So what do you think about the explosion of NFTs
in the recent months, especially in the art world
and beyond, and what does the future look like?
So this is maybe the social impact on the world,
on the individual creators of all kinds.
Like is that something you’ve actually expected to see,
NFTs having this kind of impact?
And beyond, what do you think will happen
in the digital space with NFTs,
in virtual reality, in gaming, all those kinds of things?
I was definitely surprised by like NFTs in particular.
Like I even actually think might be on record somewhere
on some tech conference panel.
Like they were asking, you know,
it was one of those overrated or underrated sections
and ask about NFTs and I thought,
and I said like, hey, I think NFTs are overrated.
And, you know, in retrospect,
that turned out to be quite wrong.
I think, like, I guess I just personally
can’t really relate to this concept
of like spending a lot of money on a thing.
Like there’s nothing, you know,
there’s no clear kind of understanding
of why that thing would maintain its value.
Uniqueness of a thing having value.
That’s like, I definitely like cannot really understand,
you know, the psychology behind like buying,
you know, paying $200,000 for original art painting.
I’d be like, you know, if I had a mansion,
just like give me photocopies of everything.
You can hang three photocopies of the Mona Lisa section.
Why would I even have the Mona Lisa?
I think I’d probably just like have some Nyan Cats
That’s one thing where mathematics
or theoretical computer science cannot formalize
why the heck NFTs are valuable.
But the thing that makes me very happy about the space
now that it has happened is that,
and this gets back to the conversation
that we had at the beginning, right?
Like I’m interested in this concept
of decentralized public goods funding, right?
Like I want things that are good and valuable
to as much as possible also be things
that can economically sustain the people
who produce them, right?
Because if you don’t have that,
then either the public goods just don’t get produced at all
or people make like centralized versions
that have some of the properties and try to be substitutes,
but actually just like concentrate control
in a very small group, right?
And both of those things are not very nice.
So the nice thing about NFTs would be,
well, if you’re an artist and you can just mint NFTs
and this is a source of revenue,
then like great, that’s another stream of revenue
for creative work that often does still get underfunded
and that’s amazing.
Okay, let me ask you a weird question.
We talked about Craig Wright a little bit,
but a lot of people write to me, one of two emails.
One email is calling any coin outside of Bitcoin a scam
and then the other email is saying,
my favorite coin is the best coin,
it’s going to save the world, whatever that coin is.
And so I sit back and I look, I have no idea.
I try to figure out like the humans that I trust
in this space, just the basic human qualities,
but do you think some coins are scams?
Do you think some coins, maybe another way to ask it,
are scamier than other coins?
How are people that are looking outside of this space
where there’s all of these cryptocurrencies
supposed to figure out what is a scam and not,
or how to use the right kind of language
when talking about them?
Because there’s the harshness of the language
from the Bitcoin maximalists that doesn’t just say
everything’s a scam, including Ethereum,
but they use terms like shit coin
that says it’s not only a scam, it’s like a waste of time.
I mean, every word you can use, they say that.
That’s very harsh.
And then some people just apply the word scam
much, much more conservatively and just refer to coins
that legitimately are trying to scam people
out of their money as scams.
So what do we do with this word scam?
Should it ever be applied to coins?
And is it a binary thing or is it a gray area?
I think it’s definitely a gray area.
There’s definitely things that are really and actually scams.
I mean, Bitconnect would be one example
of something that’s way on the scam spectrum.
Did you see their 2017 promotional video, by the way?
Yeah, hey, hey, hey, what’s up, what’s up, what’s up?
It was this three minute, 48 second video
that was just of this guy making this totally crazy rant.
And it was at some conference in Vietnam
where they were, of course, trying to convince
a whole bunch of people to buy this coin
and they had these claims about how it would go up in value.
That was definitely the peak of these pure,
completely scammy coins.
And that was definitely really terrible.
And I feel like we have less,
despite cryptocurrency as a whole being bigger,
we actually have quite a bit less of that now.
But then, of course, there’s this spectrum
of things that are not completely scams
and then things that are not scams
and that are technically totally fine projects
but where their community is just incredibly sketchy
and then all the way to things
that are where the community is nice
but maybe the project is just fundamentally incapable
of achieving what it’s trying to do
or in the community doesn’t realize
and then really good projects, right?
So if you wanna go a step,
like if that’s 100% scam,
then what would I call say 80% scam?
Well, like Bitcoin SV is one example.
This is a Craig Wright’s fork of Bitcoin.
Theoretically, it’s a blockchain, right?
It’s a fork of Bitcoin.
It has some 512 megabyte blocks.
If you really wanted to, you could use the blockchain.
It satisfies the property
so that you can send transactions onto it.
You can probably use it as a backup
to store your files if you really wanted to
just because it has so much space.
It might fail, but at the same time,
as we basically said, Craig Wright is a scammer
and half the community is just totally batshit insane.
So the humans of a particular cryptocurrency
is what makes for a scam and not like the humans at the top
that have a voice guiding the community.
Yeah, I think in the case of BSV,
the humans, they make just completely wrong
and just obviously wrong claims
about what BSV is capable of accomplishing
and what it can say we could accomplish.
And there’s just a lot of aspects of it
that make it feel like a money grab.
So that’s one example.
And then you gotta go a bit further
and then you have the trons of the world.
And that’s a platform, you can use it,
you can do stuff on it.
But at the same time, they did plagiarize the IPFS white paper
and then they…
So there’s scammy qualities.
See, the thing that throws me off a lot,
it’s very difficult for me, is that most coins,
but the ones that make me feel like are scammy
have a large community of people
that are super positive about it.
Like, and they’ll write to me.
Now that said, sort of on the flip side of that,
Bitcoin people are also very positive.
There’s some sense in…
The reason I was having like squinty eyes
looking at Bitcoin for quite a while
is like, why is everyone so positive?
I was getting total cult vibes.
Like the ideas are not grounded in truth,
but are grounded in an obsession
of like when you can artificially conjure up a truth,
which is why I was a little bit like worried about Bitcoin.
I think I’ve learned a lot since then
to where like, I learned to separate the community
from the ideas.
And I think Bitcoin is a revolutionary idea on many fronts,
but still a community that’s like dogmatically excited
about something, whatever that is, makes me skeptical.
Maybe it’s just like my upbringing,
but when everybody’s really excited about something,
it makes me skeptical.
But it also makes me difficult to decide
what is this scam or not,
because some of the most exciting ideas in this world
have a community of people who are excited about it, right?
Because it’s, I don’t know.
I think space exploration is super exciting.
And there’s people, I know a lot of them
that are exceptionally excited about space exploration.
Does that mean it’s a scam?
So I don’t know what to do with that.
And so most I just try to stay away, I suppose,
but it’s unfortunate because I’m sure there’s a lot
of exciting technologies in that space.
Like in the case of Bitcoin,
like I would definitely not call Bitcoin a scam.
But I would also not call Litecoin a scam.
There’s people who call Litecoin a scam
because they just like say, oh, look,
it has no fundamental use case.
And the concept of being silver to Bitcoin’s gold
is just like stupid.
And like milli Bitcoin is the silver to Bitcoin’s gold.
But at the same time, like if you have these people
who just, they do seem to earnestly believe this.
And like they’re trying to just like make Litecoin
be a Litecoin as best as they can.
Then like, to me that’s enough for it to not be a scam.
And then, so yeah, I think the biggest gray area
is definitely between like projects that are earnest
but they have just all sorts of these
like different combinations of flawed qualities to them.
I mean, the ones that legitimately is a scam
is when the key people that are at the head of the project
are intentionally lying.
And I think as long as the intent
is to try to do good in the world,
even if your actual implementation of that is flawed,
I think that’s not a scam.
It could be flawed ideas, it could be wrong ideas,
but it’s not a scam.
I’m learning to navigate this space.
Yeah, it’s definitely a very challenging space
to navigate, I mean, it’s in some ways
the reflection of the world at large.
Yeah, and as we’ve said, maybe offline
that the fact that money is involved
makes it a little bit more complicated
that lives can be ruined by the choice of technologies
that are taken on.
So it makes it more real, more painful,
more like elevated the impact of this.
Like imagine like Mac versus PC wars
if everyone who bought a MacBook had 10 Apple shares
inside of it, and everyone who had a PC
had 10 Microsoft shares inside of it.
And then you had the elites who bought their Macs
back in 1983, and then they spent $500 debt,
and now they have $40 million,
and they just think that they’re these gurus
who understands the future of finance and geopolitics,
and they make theories about why Apple is the one
that’s gonna bring freedom to the world,
and Windows is secretly allied with the axis of evil.
Oh, that’s brilliant.
So yeah, this is so brilliant.
So I think the right way to think about this
is we map some of the cryptocurrency battles
into the space of like EMAX versus VIM,
or Apple versus PC, if there were some stock
that came along with each implementation of each PC,
each Mac, that’s fascinating.
This is 100% correct, 100% correct.
Because then that really energizes the armies
of people debating over this in a way
that something without money does not.
Okay, let me ask you about something really fascinating
that you are also excited about, which is longevity,
You have donated money to the SENS Foundation,
so you have an interest in this whole space
of lifespan research.
What’s your vision here?
Or what do you hope to see in antiaging
and longevity research?
I think I hope to see the concept
of seeing your parents and grandparents die
just slowly disappear from the public consciousness
as an experience that happens
over the course of half a century,
the same way that getting lost in a city
slowly disappeared over the public consciousness
over the last 50 now that we have smartphones.
The thing you have from Nick Bostrom,
the essay pinned in your Twitter argues
that essentially death is almost unethical.
The fact that we don’t do something about this thing that,
this, in the essay, is a dragon
that keeps murdering everybody around us,
including our parents and grandparents,
is, the fact that we don’t try to do something aggressively
about that dragon doesn’t make any sense.
So you think this is a battle worth fighting,
a battle for immortality, or at least longevity?
I’d say absolutely.
And I’d say a battle where we really have started
over the last five years in particular
to see the first cracks of humanity
starting to make things that look like
they’ll turn into victories.
Do you think humans can eventually live forever?
And maybe as a side comment to that,
what technology do you think will enable that
as a genetic modification?
Is it cloning, is it uploading your mind?
Define forever, like are we talking 1,000 years,
a million, 10 to the 14, 10 to the 45?
Well, let’s start, as I tweeted today,
eventually everything, the universe will be filled
with supermassive black holes.
So that forever, maybe like backtracking to where.
We’ll have 10 to the 16 years to figure it out.
Yeah, maybe travel between the multiverse,
between the different universes of the multiverse.
I mean, but forever meaning like, you know, millennia.
I definitely think that we can get there.
I definitely think that it’s the sort of thing
that’s going to take an insanely huge amount of work.
And I definitely think it’s the sort of thing
where once we figure out the first crop of problems
and like people start living to 150,
we’ll just realize that there’s like 10 other problems
that kill you half as slowly and we’ll have to do more work.
But the good news is that this is Aubrey’s longevity
escape velocity argument that if you get everyone
to live to 150 now, then you have half a century
to fix all those other problems as well.
So I’m optimistic for that reason.
I think you definitely do not want to underestimate
human ingenuity, especially over the longterm.
Like just to look at what happens to computers
between the ENIAC in 1950 and we’re around 2020, right?
Like that’s a span of 70 years.
So like, you know, both of us, I think,
with just present day technology,
I have like at least 70 more years to live.
So just like imagine what kind of sea change
will happen in biomedicine during that time.
And the other thing that made me optimistic
is that I actually think COVID has been this kind of event
that’s really kind of pushed biomedicine
and especially like activist approaches to biomedicine
really into the public consciousness, right?
Like it basically, it’s put people into this mindset
that, you know, wait, but like, you know,
it’s not just like, you know, the bits and tweets
that are gonna save the world, you know,
the bio is actually like super important and huge.
And, you know, ultimately what’s ending COVID basically,
you know, is the vaccines
and the vaccines have just been, you know, amazing.
And if you can take that energy and also like this,
I think philosophical attitude that I’ve noticed,
like the way that I would describe
the philosophical attitude here,
this is going more depth first,
is that I think the way that I kind of interpret
part of what I would call late 20th century ideology
is that there is this mentality that, you know,
nature is good and disruptions from nature are bad
and generally you wanna minimize disruptions from nature.
And like this exists everywhere in the political spectrum.
So there’s nature as in literal nature.
And my view is that like the right wing version of that
is markets as nature, right?
Like, you know, the way that like that kind of philosophy
talks about, you know, markets
and like the goal of not interfering with them,
like, you know, it is very kind of like nature styled.
And then of course, you know, the conservative one,
which is like traditional culture that existed
before the activists started controlling everything
as also being a kind of nature.
But the 21st century attitude and like really COVID,
you know, has flipped a lot of minds
because with COVID what’s happened is that,
well, no, like it’s not, nature is not safe, right?
The default is that is like, you know, untold misery
and suffering in tens of millions of people dying.
The only way out for us is through
like basically human ingenuity.
And that frame of mind is one that’s like much more friendly
to one, this other change of minds that I want to see,
which is like basically treating aging
as an engineering problem, right?
Like the default is all 7.8 billion human beings
that are currently on this earth are gonna die
and they’re gonna live their last decade of life
in debilitating pain.
And the only way to stop that is human ingenuity.
And, you know, we don’t have that solution yet,
but, you know, if we work hard, we will.
And more and more people on the biology side,
computational biology are basically converting
the mess of the human biology into an engineering problem.
And once that conversion is happening,
looking at the genetic code, the proteins,
all those kinds of things, once that conversion happens,
you can now apply the tools that we know
how to solve engineering problems to solving it that way.
And then there’s also the other version, which is, you know,
why do we romanticize this meat vehicle
that ultimately is just the thing that carries the brain,
maybe we can more and more convert ourselves
into the digital realm.
This is where like Neuralink have the computer interfaces
and then achieve immortality in the space of information
and the digital space versus the biology space.
That stuff’s interesting too, I agree.
Again, I think, you know, we have enough resources
and we should just try all the parallel tracks.
You know, it’s great that we have people
just trying to make our bodies work.
It’s great that we have people trying to upload
or improve brain scanning.
It’s also great that we have just like people
So like we could just like, you know,
go to sleep in the freezer and eventually,
hopefully sometime in the future, you know,
Hal Finney is gonna be able to wake up,
all of this, you know, anyone who gets cryo chronically
frozen today will be able to wake up,
but you know, that’s a bet, right?
That’s the last resort.
And then the other interesting thing
about the like extreme uploading approach, right,
is we’re excited about space.
And one of the points that a lot of science
or like hard science fiction types make
is that, you know, if you want to explore space,
that’s a lot easier if you’re not a human, right?
Like one example of this is that, you know,
in the context of humans, we’re talking about like,
oh, we’re gonna be able to go to the moon,
oh, we’re gonna be able to go to Mars,
but there’s this project called Starshot, I believe, right?
That’s basically trying to send spacecraft
to mini spacecrafts to Alpha Centauri,
and they literally believe that they’re going to be able
to get spacecraft over to Alpha Centauri
like four light years away by like the 2060s.
Now, I mean.
By traveling close to the speed of light, yeah.
Exactly, like, so the way it works is, you know,
you have these light sails,
like you basically take these a spacecraft
and you shine a laser at it,
and the laser is insanely strong,
quickly accelerated at a hundred Gs or,
no, I think it was 10,000 Gs
until it gets to 20% of the speed of light,
and then, you know, it goes on your merry way, right?
So if you wants to be in,
like personally explore the Alpha Centauri system
within like two centuries or one century,
then, you know, being a robot is like,
by far the most practical way to do it,
because there’s no way that a human being
can survive 10,000 Gs.
So it’s definitely interesting longterm,
but at the same time,
there’s definitely a lot of like psychological hangups
and a lot of like deep philosophy
that we’ll just have to grapple with to get there.
I think what it hangs on the topic
of whether we can convert consciousness
into an engineering problem.
So like, is consciousness tied to our biology?
Because the moment we can convert consciousness
into a digital form,
then we can send it with that light sail
to Alpha Centauri.
Until then, a robot is not carrying anything
except maybe some basic knowledge like Wikipedia.
It’s not carrying the flame of human consciousness.
I have high hopes for converting consciousness
into an engineering problem.
In fact, I think it’s not as difficult as people think.
I’m like, yeah, I agree with that.
I’m definitely in the camp that consciousness
is a property of the algorithm
and not a property of a brain structure.
The other fun, like the kinds of philosophical things
we’d have to grapple with is like,
once you upload yourself, like you can hit Control C,
you know, like it wouldn’t be lovely
to have like 10 copies of Alex Friedman
and then like we could just interview everyone.
So this is, I mean, this is, I have to ask this question.
It’s a difficult one,
which I don’t think it’d be wonderful, first of all.
So in the following way,
and this has to do with immortality as well,
there’s something about scarcity that creates value.
Or there’s a bunch of philosophers,
Viktor Frankl, Bernard Williams, Ernest Becker,
they argue that death or the scarcity of life
The reason we, life is beautiful,
the reason so many moments of experience
of love or delicious food,
all those things are made delicious
because they’re finite, because they end,
and because we don’t have that many of them.
And there’s a kind of worry
that if we extend the human lifespan,
if we achieve immortality, or if we, God forbid,
clone me multiple times,
then you lose the richness of what it means
to have this life, to have this experience.
Is that worry you at all?
Do you think there’s some aspect
to which death does in fact give meaning to life?
I guess like the one historical parallel,
and this might be a bit unfair,
is that there have been philosophers
that have said things like,
war gives meaning to human collectives,
and the struggle for supremacy between nations and races
is this big driver of progress
that ensures that everyone strives to be their best.
And of course, this viewpoint got into the head
of a crazy Austrian guy, and 20 years later,
his soldiers were shooting at my grandparents.
So these days we don’t really have that,
but yet life still feels meaningful.
We’ve still found other ways to,
there’s still a striving for technological progress.
There’s still a striving for self improvements in general.
And it turns out that you don’t actually need
to have existential conflicts in order to have that.
Now, maybe you need conflict,
but we have other kinds of conflict, right?
Like we have competition between businesses,
competition between political ideologies,
competition between projects.
And so these are, like whatever the psychological needs are,
like they’re just our substitutes for it.
So I guess like, yeah, so if we trying to say,
I feel like once we start living to the age of 200,
then like, I’m just intuitively expecting
that we’ll see substitutes emerge in the same way.
Yeah, we’ll create conflicts of other sorts
that lead to less human suffering than wars do.
Like we’ll just start playing Diablo four, five, six,
cause you die in video games.
So maybe we’ll get some of the inkling of scarcity
through the activities we partake in
as opposed to our own body dying.
I mean, I feel shitty when I, like you can,
I remember in Diablo three, you can play in hardcore mode
where if you die in the game, your character’s dead.
Maybe we’ll get the richness that we currently get from life
by having like little artificial versions
of ourselves that die.
Interesting enough, as I’ve just like personally
spent more time in this world, I’ve started realizing
that there is a concept of like real finiteness
that still exists and it might even still be a thing
that provides meaning that doesn’t require anyone
to actually die.
Like for example, like how many people from middle school
or even high school are yours?
Like do you still talk to regularly?
I happen to be close friends with like four or five of them.
Okay, well, like in my case, the answer is zero
for middle school and two for high school.
But you’re right.
It dropped close to zero.
Exactly, it dropped a lot, right?
And so like there’s a lot of these just like relationships
that end up being very finite.
A person changes their, I feel like a person changes enough
of their worldview after 25 years.
Was there even a study about this?
Something like a person and themselves 25 years later
are about as different as like two different people
or something like this.
So, I mean, just like you can have conflict
without bloodshed, I think you can have finiteness
and even the necessary sorrows of finiteness
that give meaning without like literally anyone
having to end their life.
And hopefully if we do extend our life,
we’ll figure out ways to extend the period of time
where there’s neuroplasticity
to where we could change our worldviews continually
throughout that time.
So you can have these different phases of life.
I thought it would be fun to hear you speak a little Russian.
Do you speak Russian?
Yes, of course.
How did your Russian roots help you?
That’s an interesting question.
What can you say in Russian about that?
What can I say about my Russian roots?
When I just look at other projects,
other people in the blockchain industry,
sometimes when I look at what Russian people are doing,
what other people are doing,
I can sometimes feel that these people who are Russian
have something that feels similar to me,
but I don’t know how to explain it.
Do you think there’s, so for people who don’t speak Russian,
that Vitalik said that there is something to the spirit
of the people that are Russian
that are working in the cryptocurrency world
that is a little bit different
and it’s something that connects to some kind of aspect
of your own self, some kind of roots there.
And it’s kind of interesting.
Do you think that there’s, does it make you sad
that there’s these two different worlds
that are sort of in part disconnected by language?
And I’m sure the same could be the case with China
and other parts of the world,
where the language slows the transmission of the beauty
of the culture in a certain kind of way
where you can’t truly collaborate.
Like you can all speak English,
so you’re collaborating on maybe a technical level,
but you’re not collaborating on the level
of some deep human connection.
Do you see that being able to speak both languages?
There’s definitely benefits, I think,
to be able to speak multiple languages.
And once you can, you discover that even your mindset changes
while you’re speaking in one language versus the other.
People have told me this, like, when I speak Russian,
I sound more, I guess, to the point and pragmatic.
When I speak Chinese, I sound more cute.
When I speak English, I’m something else.
I guess there’s definitely a richness that you’re missing
if you’re only in one of these language bubbles.
But I guess the arguments on the other side would be that
if everyone spoke the same language,
then there would just be one bubble.
This is the challenge, I think.
There are actually benefits to having cultural diversity,
and you definitely don’t want the entire world
to be too conformist.
Well, one of the interesting things about crypto
is that it’s just a culture that actually manages
to somehow have its uniqueness and even preserve its independence
from all of these surrounding countries
despite being embedded in all of them.
So it spans outside of the geographic boundaries,
and language in some ways does as well.
And the way these cultures, these bubbles are created,
I mean, they overlap in interesting ways.
It’s almost like a hierarchy,
and the same is the case of the crypto world.
There’s communities associated with these cryptocurrencies.
There’s communities within those communities, and it’s…
Yeah, I mean, I think it’s definitely sad
whenever these groups are fighting each other,
and it’s definitely good for them if people can cooperate more.
But at the same time, just having groups of people
that have different kinds of life experiences,
there’s definitely something to benefit from that.
So let me ask one last question.
I don’t think I asked you last time
the ridiculous question about the meaning of life.
You know, Dostoevsky said,
beauty will save the world.
Krasata spacet mir.
Some people believe money is a big part of happiness,
and you’ve turned…
First of all, you’ve made a lot of money.
You turned away a lot of money.
You turned away a lot of power.
So you’re a fascinating person to ask,
what do you think is meaning to life?
The thing that I’ve realized with money
as I have experienced both having little of it
and having a lot of it is that the benefit of…
You can get the most out of money if you think of it
not as something that lets you do and have more things,
but as something that lets you worry about fewer things, right?
Like, if your savings are just nonzero at all,
then you don’t have to worry as much about losing your job.
And if you feel like you have a job
that just really conflicts with your values,
then if you have even six months saved up,
that just makes it easier for you to say,
bye bye, I’m going to do something else.
If you have more money, then you can not worry about
even what you’re doing needing to be profitable at all.
Once you get more money, then you can choose transportation options
and food options that just have less hassle in your life
and allow you to be lazier.
So, this aspect of just reducing troubles
and opening up room for other things, I think, is a big part of it.
If you instead think of money as being this positive
or this thing that gives you stuff
and you try to derive meaning from the stuff,
I think that’s much more likely to be a road to basically squandering that opportunity.
So, yeah, and I guess my philosophy on that is definitely more subtractive than additive there.
But once you have enough money that you don’t have to worry about the money,
you’re burdened with another question, which is of meaning.
Do you think there’s meaning to it all?
Or it seems like your own life,
you’re trying to build cool stuff that alleviates some level of suffering in the world.
Well, I mean, one way to think about it is like,
think back to how you thought about life when you were in school, right?
In school, this act is interesting to think about, right?
Because in a lot of ways, it’s just totally outside of bounds of the kinds of systems,
like social systems that we live in as adults,
or maybe not, like maybe things like academia are intended to replicate parts of school.
Like, first of all, school is very totalitarian, right?
Like, you have to follow the teacher’s instructions,
the bulk of your schedule is like forced to be in particular areas,
and you can control the real purview from leaving the grounds during this period of time,
assign a lot of homework.
But at the same time, also, school is a bit of a post scarcity utopia
in that you just don’t have to worry about getting resources for yourself.
And we’ve both lived through 12 years of that, right?
So, what does that say about us?
And I think one thing of aspects, obviously, is that there’s definitely an easiness to living life
if all of your decisions are made for you.
And one of the challenges of adulthood, I guess, is moving to this world
where all your choices are much more self directed,
and you just have to learn to live and deal with that.
Yeah, dealing with the burden of freedom, in some sense.
It’s actually interesting, because in some ways, I feel like even my first five years
of doing Ethereum things, my life was not even all that self directed,
because a lot of it was just responding to obligations.
Like someone said, oh, come to speak at this event in Korea.
Okay, come to speak at this thing in Taiwan.
For Ethereum to launch, we need this particular piece to be done and tested.
Okay, work on that.
We need some proof of stake algorithm, work on that.
And the last year of COVID life, basically, I was holed up in Singapore for much of it.
And it gave me a lot more alone time.
I had much less travel.
And that was definitely a very new and interesting experience for me.
Would you characterize it by sadness, melancholy, hope, dreaming, innovative period?
How would you characterize that alone time?
Some of all five, definitely some self discovery.
I definitely did make this very deliberate decision that, okay, I have this time,
and I’m going to actually make something meaningful out of it.
So one example of the things I did is I just actually started
listening to your audio books and podcasts much more.
Just this year, I basically discovered that the podcast space is real for the first time,
Like before that, there would be things that I would get interviewed for,
but I was not mentally incorporate this idea that podcasts are a thing that you can go listen to.
And this year I did.
My friend, Carl Lafleur, one of the optimism people, recommended hardcore history to me.
And so I went ahead and just listened to all the hardcore histories.
And then after that, I listened to like 10 Luxfried mids and then a bunch of others.
And after that, I also got into audio books.
Oh, I listened to the entire The Rise and Fall of the Third Reich, the whole thing, 45 hours.
That was fascinating.
So let me ask about Dan, because Dan is going to love hearing this.
I’m going to send it to him.
Do you have a period of history, whether it’s Dan or in general,
that you draw for your own life, like kind of thinking about the world,
about human nature that you go to?
Is it World War II?
Is it Wrath of the Khans, the Genghis Khan?
Is it some other more ancient history?
Is it World War I?
Is there something that kind of echoes with you in the voice of Dan or anyone else that you connect to?
I feel like the 1930s and 40s are fascinating because they force you to really grapple with
the question of where does evil come from, right?
The sort of mental puzzle that I’ve always had in my head is, on the one hand,
things like the Holocaust happened.
But on the other hand, if you just go and have a coffee with people,
then a hundred times out of a hundred, everyone just seems so nice.
How do you kind of reconcile the macro and the micro there, right?
And that’s the sort of thing that’s very difficult if you don’t have a lot of,
I guess, the right kind of personal experience,
especially if your personal experience starts off being sheltered, like it was for me, right?
I know the stereotype is that the nerds get bullied in school, but actually for me,
in my school experience was just being treated with kindness by everyone.
So that definitely made it harder to understand things.
I remember actually being pretty blindsided when I started Ethereum.
And then within six months, there started being fights over who would get more shares
if Ethereum turned out to be a company.
And then I suggested we should just make it to be a non profit,
and somehow that ended up upsetting people.
So the fascinating thing for me is that I’ve been obviously reading and listening to the history,
and then at the same time, just observing things happening in the crypto world.
And so one of my interesting mental intuitions that I’ve gotten is that I think most evil
doesn’t come out of greed, it comes out of fear.
And one example of this in Ethereum lands, right, is I think the part of Ethereum history
where I thought that the Ethereum community was at its lowest,
and even when I personally was at my lowest.
Now, if you go back to the Dow fork in 2016, right, so the Dow hack happened,
and then we made this controversial decision to change the Ethereum protocol.
And then there was that Ethereum Classic split.
And as soon as that Ethereum Classic split happened, there was a lot of anger everywhere.
And there started especially being anger when the price of ETC started taking up.
So this was the time when Ether started off being $13 and Ethereum Classic started at zero,
but then suddenly there was this one day when like ETH dropped to 12.5,
ETC went up to 0.5, and then they dropped more.
And people were saying things like,
oh, this whole Ethereum Classic is just a psyop by the Bitcoin community
and just the wealthy Bitcoiners trying to destroy Ethereum.
And in the back of my mind, I knew that that wasn’t entirely true.
There definitely were Bitcoiners.
But at the same time, I think blaming disagreements on foreign interference,
like this is the sort of thing that countries, governments do all the time,
it’s a very convenient excuse because it allows you to just blame these things
that are happening on the foreigners and avoid actually grappling with the facts that like,
well, no, actually you have people in your very own community
who just disagree with you and have a different belief.
And I feel like the Ethereum community during that time
did not do a very good job of grappling with that.
And I feel like I during that time did not do a very good job of grappling with that.
And so there was a lot of blaming the Bitcoiners.
There were also even a lot of people calling for us to use trademark law
and basically sue exchanges and try to prevent them from listing Ethereum Classic.
And to me, that was very unethical, right?
Like basically using the government as a weapon to try to attack the other cryptocurrency
and destroy it goes completely against the ideals of freedom
and things that at least in theory were supposed to stand for.
But in that particular time, basically what was happening was that the ETC price was rising.
And at the same time, the ETH price was dropping in lockstep.
And there were a lot of Bitcoin people basically saying this is the end of Ethereum.
And I think a lot of people really were afraid that
Ethereum would be just like completely destroyed as a result of this.
And so that’s where the anger came from.
Exactly. Yeah, exactly.
It came from the fear.
And that’s what allowed people to rationalize in abandonment of principles
that I think they would not have accepted in other circumstances.
And I definitely, to some extent, played along with this myself.
And I do definitely regret that to some extent.
Well, I definitely regret the excesses completely.
And then obviously, Bitcoin block size war, similar sort of stuff happened.
So that insight was interesting because it does mentally make a lot of sense
when you’re actually afraid that unless you act in some way
that your entire world is going to collapse.
It’s much easier to just rationalize forgetting your principles
and doing whatever you have to just save the specific thing that you care about.
It feels like the right thing to do, the brave thing to do is in the face of fear
to still have compassion, to still have love as opposed to hate.
So the darkest moments, the toughest moments of human history
are those where fear is everywhere.
And despite that, the way to get out of that is through love, not giving into the fear.
And again, that’s the lesson that you draw from all those moments of history.
Well, I like you have in terms of those coffee and the kindness that people have,
it does seem that everybody has the capacity for evil
and everybody has the capacity for love.
And you just have to create mechanisms and incentives
that prioritize the latter over the former.
Vitalik, you’re one of the most interesting people I’ve gotten a chance to talk to.
Thank you so much for talking to me.
I hope we get a chance to talk again.
I hope I can at least be some small part.
This would be awesome in a podcast with you and Dan Carlin.
That would be an awesome conversation.
Thank you so much for doing so much incredible technical innovation
that inspires the computer scientists, the economists,
inspires the world and what technology can do.
And now with longevity, I do hope we live a very long time
and play Diablo to make that long time fun.
Thank you so much for talking today.
Thank you too, Alex.
This was great.
Thanks for listening to this conversation with Vitalik Buterin
and thank you to Athletic Greens, Magic Spoon,
Indeed, Four Sigmatic and BetterHelp.
Check them out in the description to support this podcast.
And now let me leave you with some words from Nelson Mandela.
When a man is denied the right to live the life he believes in,
he has no choice but to become an outlaw.
Thank you for listening and hope to see you next time.