back to indexCharles Hoskinson: Cardano | Lex Fridman Podcast #192
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The following is a conversation with Charles Hoskinson,
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founder of Cardano, cofounder of Ethereum,
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and a mathematician who's one of the most well read
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and knowledgeable people on the technical side
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of cryptocurrency that I've ever spoken to.
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Quick mention of our sponsors, Gala Games, All Form, Indeed,
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ExpressVPN, and ASleep.
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Check them out in the description to support this podcast.
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As a side note, let me say that Charles
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is not just a mathematician or cryptocurrency innovator,
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but also a Colorado based farmer of bison and mushrooms,
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a gamer, a fisherman, and a world traveler.
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When I asked him if he has a nice professional picture
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of himself, he sent me a picture of him in Mongolia
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with a hawk on his shoulder,
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meeting the Mongolian president.
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That to me pretty much says it all,
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speaking to the humor and the intelligence
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of a man who's bold, innovative,
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and does not shy away from a bit of fun
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and a bit of controversy,
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which makes him a fascinating human being
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to explore ideas with.
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I do want to say in terms of ideas
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that at least to me, cryptocurrency is much bigger
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than just a way for a few Americans to make a quick buck
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through meme driven speculation.
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It is technology that enables freedom from oppression
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from suffering in the world because money is power.
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Mongolia, for example, was a reminder of that for me.
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Next day after talking with Charles,
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I spoke with Wyoming Park, who's a North Korean defector
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and who spent time in Mongolia as many defectors do
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in her and their escape from North Korea.
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Her story, the story of North Korea,
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the story of atrocities throughout the 20th century
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committed by Hitler, Stalin, and others
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is a reminder that the world is full of darkness,
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but it is also full of beauty and love,
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and it is a world worth fighting for
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in every way we know how.
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This is the Lex Friedman podcast,
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and here is my conversation with Charles Hoskinson.
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Let's start with a fun question.
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If we're living in a simulation,
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what programming language do you think it's written in?
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And maybe from a software engineering perspective,
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what do you think are some of the design principles
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that it operates under?
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There are a lot of really lovely papers.
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One came out of MSR, the Autodidactic Universe.
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Did you have a chance to see that?
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Oh, you gotta read it.
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It's like April of 2021, it's just brand new.
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But basically the idea is that the universe
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is like some sort of giant self learning system
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that can self evolve, almost like Nomek.
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And then you have Wolf Ram running around saying,
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hey, we can come up with like very simple rules
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and we can reconstruct all of reality
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at some arbitrary point.
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So I have absolutely no idea what's right.
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I look at it kind of like a formal system and I say,
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well, if you're stuck within the system,
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it's hard to actually understand
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that you're inside the system.
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It's kind of like an object language to a meta language.
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There's this thing that is outside of it,
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but because you're constrained and limited by the simulation,
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you can't really understand the nature of the thing
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that's outside of it.
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It's almost like Minecraft.
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You can build these redstone computers within Minecraft
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and simulate and emulate things within it,
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but you really can't go outside of that environment.
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The people outside of it can formally prove
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that it's correct or whatever,
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but the creatures inside of the system
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can't hope to perfectly understand
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and improve something about it.
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Well, also the question is, it's a computation question.
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Because you'd have to be able to emulate all of these.
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How long will it take?
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And so I have no clue what type of language
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it would have to look like,
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but it would probably not be anything we're used to
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It'd have to be something else.
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And we'd have to have some more fundamental resolution
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of the relationship of these formal systems
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and how they get extended.
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So that's like a 22nd century question instead of a 21st century.
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Do you like, do you find this Steven Wolfram idea compelling?
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It's a very different way of programming,
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which is you set some rules,
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you set some initial conditions and let it run
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and see what happens.
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Yeah, and it's not a new concept.
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I mean, like the Santa Fe Institute's been doing that
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for a long time and you can use it for economic modeling
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and you can show that in certain cases,
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there's this concept of simple rules
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evolving into a complex system
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is somewhat more predictive
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than trying to build a complex top down model for things.
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And I guess there's some analogies, these things in AI
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where you start with some simple things
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and then somehow it just figures stuff out
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in its environment over time
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and much better than if you actually tried to model it
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with prologue or something like that.
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So that is exciting because you get to just do a few things,
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let the thing run and then see what happens.
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And that's a lot of fun.
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In fact, it got so exciting Wolfram came to us
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and he said, hey, let's do an NFT marketplace.
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So I said, what do you want to do?
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And he said, I got all these universes to sell.
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I said, okay, well, that's going to be fun.
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So we're going to set up an auction system
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or something like that with him.
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And I think maybe end of this month or next month,
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we'll figure out how to do NFTs on Cardano
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with Wolfram universes.
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So as soon as we can sell one, I'll give you one.
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And then we can all just claim that we're living
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in some sort of Wolfram simulation.
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I don't know how much money I have,
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but I'm going to give everything I have to get rule 30,
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which is one of his universes that he's created.
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One of the ones, one of the first ones
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where he discovered some interesting complexities.
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I think world 30 is turned complete or is that 45?
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I can't remember which one.
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You know your stuff.
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Actually, I'm not sure if they proved anything
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about rule 30 in terms of whether it's turned complete
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or not, but there's fun competitions on it,
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which is trying to predict something about rule 30
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about the way it evolves.
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And so far, nobody's been able to do it.
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Just like looking at the middle column,
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try to predict as the system evolves,
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say anything like conclusive about the future
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of the system as it evolves.
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It's both beautiful that simple rules
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can create that kind of complexity.
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And it's also sad that we can't make perfect sense of it,
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like perfectly predict the future.
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Even though it's all simple and deterministic,
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we can't say something conclusive
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about when the thing will end.
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When will this little cellular automata
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like evolve in a certain way
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and then nuclear weapons will be invented
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and they blow each other up
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and then it'll just be this empty 1D cellular automata.
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Well, doesn't that make it fun though?
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Yeah, it's fun, but when you're trying to create
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and we'll talk about something that operates the economy
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and the way humans transact and cooperate
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and fall in love and work together,
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then you'd like to be a little bit more formal
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and try to say something conclusive.
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If this entire universe is just cellular automata,
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then being conclusive is kind of hopeless,
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generally speaking.
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And the hope is, I guess,
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that there will be pockets within the cellular automata
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where you could be predictive,
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where you can formally show that something is true
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and then you can rely on that.
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You'll be resilient and all those kinds of things,
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even though the rest of the thing is a giant mess
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that's unpredictable.
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They call that Laplace's demon.
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Yes, I wonder what the demon's up to these days.
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Okay, thank you for entertaining me with that.
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But sticking on philosophy,
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you've also mentioned, among others,
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that Bertrand Russell and Saul Kripke
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are two of your favorite philosophers.
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Maybe you can comment on what ideas of theirs
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you find insightful and also what to use the difference
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because you're both an engineer and a thinker.
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So what to use the difference
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between philosophy and computer science?
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Yeah, so yeah, there's both a deeply human element
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to both Russell and Saul.
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And then there's this, of course, amazing work
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that they did in the late 19th and 20th century.
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And you can't really talk about Russell or Saul
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without also mentioning Wittgenstein and Tarski,
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because when you actually look at these guys
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and you put them together,
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what they were attempting to do
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was increase the level of precision we had
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in analyzing both formal languages
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and also language in general.
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And so Wittgenstein makes no sense at all to me.
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So there's amazing people out there
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that somehow can parse that, but...
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He doesn't make sense to himself either.
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I think you're right about that.
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However, Kripke has Kripkenstein, you know,
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is he has his whole building on that, right?
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And he built a whole higher,
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and at least there I have modal logic
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and I have the little boxes and I have the diamonds
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and I can do a computation
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and I can kind of reason about things
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that our people are saying.
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But it really was all just about precision
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and the nature of truth,
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precision and the nature of necessity and possibility.
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And the magic of these statements is that
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you can then start getting a better understanding
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of basically how far a formal language can take you.
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And so that's the work of it.
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And David Hilbert also did the same thing.
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And in Russell, he got his career started
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working with Alfred North Whitehead.
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He was a logician and there was this whole desire
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in late 19th century mathematics to formalize mathematics
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in a completely new and better way.
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And they started with geometry
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and Hilbert's geometry was like a complete system,
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although recently we've discovered
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there's a few holes in that.
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But for the most part is complete
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and the axioms are independent and they're consistent.
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And they said, oh, well now we can do this
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for all of mathematics.
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And Russell and Whitehead wrote this huge set of books
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like two big books, Principia Mathematica,
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a thousand pages and the conclusions one plus one equals two.
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So they linked set theory and arithmetic
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and logic all in these beautiful ways.
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Then little by little as we entered the 20th century,
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logicians started chipping away at this idea
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that you could actually construct
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a complete system of mathematics.
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First with Girdle and then later
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with the work of Turing and Church and others.
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They said, oh, you're not complete, you're not decidable.
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And so suddenly Russell was left in this really bad position
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where his early life's work was basically forgotten.
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So he had to kind of reinvent himself.
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And so he went into ethics
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and he went into different fields of philosophy.
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He became just Titan in analytic philosophy
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and he was also a great pacifist
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and he was just a phenomenal writer.
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You know, if you read Why I'm Not a Christian
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or any of his other attacks on metaphysics, you know,
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he said, look, I can only deal with the world I'm in
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in the senses that I have.
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And if I can deduce it, I believe it.
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If it's outside of that,
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I really can't make meaningful statements about it.
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And he said it in a lovely English prose
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that you would expect of a man of his stature.
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Now, Sol Crickory, it was like the complete opposite.
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This guy's really down to earth, dude,
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not aristocratic at all.
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And, you know, he was one of those guys
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that just could have done anything
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because he was so, he's so brilliant.
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I guess he's still alive.
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I think he's 80 something.
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Yeah, he's getting up there, man.
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But I mean, literally when he was in high school,
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he wrote these papers and logic and Harvard contacted him
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and said, hey, could you teach graduate courses at Harvard?
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And he said, no, I really would like to finish high school
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first before I go and teach grad school at Harvard.
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And so this is just one of those guys
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that you can see through his work
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that he can think deeply about anything.
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He's like the Galois of philosophy.
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And he chose to try to clean up a lot of the messes
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that Tarski and others couldn't resolve.
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He said, let's really get serious about the nature of truth.
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Let's really try to resolve paradoxes.
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Let's really try to build things in such a way
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that the work that we leave behind
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can actually be built upon
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and it's not thrown away every 50 years or 100 years.
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And it was the same for Tarski, he comes in,
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he says, we mathematicians love this concept of truth,
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but yet we've never really created a nice rigorous definition
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that doesn't have paradoxes embedded inside of it.
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So he had to invent meta languages and object languages,
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all these notions and so forth.
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So I really like those four if you think about them
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and there's a lot of great lessons.
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And where it's relevant today is you have human beings
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and you have computers
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and they're trying to understand each other.
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And computers live in the formal world
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and human beings live in the natural language world
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and those bridges between those two
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are still not completely clear.
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And so a lot of the work that these guys were doing
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the 20th century, 19th century
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had nothing at all to do with that
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but gives you hope that perhaps a bridge can exist
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between those two worlds.
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And maybe there are some nice tools
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for that bridge to be built upon.
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And maybe that in some way will allow computers
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to better understand us.
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I mean, they've even created languages,
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natural spoken languages that are completely ambiguity free
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like Logebon and things like that.
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L O J B A N Logebon.
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It's based on a language called log land
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and it's a spoken language
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that's equivalent to first order predicate calculus.
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So no ambiguities.
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It's logically consistent.
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But can you still have fun in it?
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You can get very...
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Can you write poetry or what?
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There's people who actually write poetry in Logebon.
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I'm gonna switch to that and start tweeting in it.
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Yeah, there you go.
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So, you know, there's a lot there
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and they're just fun to study and think about.
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And unfortunately, if you go down that rabbit hole,
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you'll spend way, way too much time
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and there's diminishing returns.
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Now, the second question you asked was one on
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theoretical computer science to, I guess, engineering.
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So first step, you said humans and computers.
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So theoretical computer science is theory of the computer
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and philosophy is the theory of the human.
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And then we can dissect different stuff about the computer,
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but in terms of these two worlds of the theory of the human,
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which is philosophy and the theory of the computer,
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which is computer science,
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what do you think is the difference?
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Like, as we try to bridge that gap, as you mentioned,
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what is going to be the biggest challenge?
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Like, can we formalize love?
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Can we formalize music, art, poetry, all that kind of stuff?
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Or is that a human nonsense that we need to get rid of?
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No, I don't think it's human nonsense at all.
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I mean, there's even attempts
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to create algorithmically generated music.
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And, you know, the question is love just strictly
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a chemical phenomenon or something like metaphysical about it
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or transcendent of some sort of formal system.
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I mean, computer science is just saying,
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hey, we have this notion of computing.
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We have this brain that we've constructed,
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this formal system that we've built.
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And given that we have it, what can we do with it?
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And so some people worry about the roots
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of the tree of knowledge,
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the great Yggdrasil of computer science.
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They worry about the roots and say,
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how far can we grow them?
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And let's keep adding these new models of computation.
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And other people worry about the trunk of the tree
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and some people worry about the leaves of the tree.
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And the more advanced the field gets,
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the closer and closer it gets
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to the people who constructed it, us.
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You know, we have better image processing.
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We have better ways of handling speech to text.
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And we have better ways of computers kind of understanding
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the intent of what a human being is saying.
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And then the question is, well,
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how will a computer understand love or poetry or music?
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Well, it'll understand it the same way we understand it.
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You have to get a computer to grow up to a point
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where it can learn the way we learn
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or as close to it as possible.
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Then you just expose it to the things
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that we were exposed with.
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And then at some point,
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the computer will start creating things.
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So the question is, well, how do you quantify creativity?
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And I have no clue about that.
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You make it into an NFT and see how much it sells for.
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But basically, yeah, there's so much of a subjective.
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And that that's a fascinating whole area of,
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that I'm fascinated with this human robot interaction
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is how do we create compelling experiences
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that are subjectively compelling,
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whether it's art or just two humans talking
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or two humans interacting in some kind of way
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to maximize the richness of the subjective experience.
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And I think that could be an optimization problem
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that could be solved.
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We're solving it all the time.
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Human civilization is constantly trying to,
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we're constantly trying to impress each other.
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We're younger trying to get laid.
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Whatever, fall in love, impress your boss at work
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by all the awesome stuff you do.
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I mean, we're trying to optimize that problem
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that's purely, for the most part, subjective.
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Did you ever watch Blade Runner 2049?
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Did you remember the whole relationship between joy and K?
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You know, and like,
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did she really love him, the hologram or not?
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Was it like fake love or real love?
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Fake it till you make it is my view on love.
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No comment from Charles.
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So let's go to the difference
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between theoretical computer science and software engineering.
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Or I don't know if you draw a distinction,
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but if we look into this computer world now,
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is there a difference between theory,
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things you can say formally,
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and the pragmatic implementation of that theory
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into actual systems that people use?
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Which I guess we'll call software engineering.
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So, you know, the engineer,
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they're obsessed with the domain of,
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well, what do you want to accomplish
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and who are you accomplishing it for?
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So they live in the world of people,
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if they're good engineers.
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And they say, okay, what's the experience?
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You know, how are we going to use this?
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Why are we going to use this?
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What's the commercial application?
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What's the noncommercial application?
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And you collect all these business requirements.
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And once you've done all of that,
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the better job you do,
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the more self evident it is of how do we apply
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the toys and tools of computer science
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and other such things to actually resolve that.
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And the point of theoretical computer science
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from the software engineering domain
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is it can tell you kind of where your guardrails are.
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It won't make perfect programs.
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And there's no such thing as that.
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But rather it can give you a good notion and sense
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that your program has some desirable properties.
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Like maybe it'll, you can prove that it can terminate
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if you're dealing with total programs
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or maybe you can prove you'll never have a buffer overflow
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or, you know, you'll demote divide by zero somewhere
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or something like that.
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You know, some event won't occur
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that'll cause a catastrophic failure in your system.
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But there's always this combinatorial explosion
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between what you can test and think about
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and what you can actually code.
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So the stuff on the left hand side lives
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in a different cartonality, a different universe.
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There's something significantly larger there.
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And the tools on the right hand side, you know,
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we have property based testing and these SAT solvers.
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We have all this great stuff here in formal methods land
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and computer science theory land,
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but there's only a small subset of things
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that they actually give you good answers about.
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So the balance of the two things is basically saying,
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well, what do you care about
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and what are you okay throwing away?
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That's the art of engineering
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and building these types of things.
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So, you know, cryptocurrencies,
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we deal with these complex distributed systems
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that have cryptography and game theory and Byzantine actors.
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So the balance there is saying,
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okay, what can't fail in that system?
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And that's the kind of stuff
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that you want to apply as heavy a tool set as you can,
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because when that stuff fails,
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you either have the loss of billions of dollars,
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privacy or potentially even life,
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depending on how these systems get adopted.
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But then other things, you know, what can fail?
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Is it okay if the block doesn't get made, you know,
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every now and then, is it okay if your latency goes up
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or your network suddenly becomes asynchronous
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and, you know, you disconnect from it,
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you have to restart the computer or something like that.
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That's probably okay.
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It's an inconvenience and burden to the user.
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And if you actually try to chase that tail,
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you'll end up spending 10 years chasing phantoms and ghosts.
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And meanwhile, the whole world moves on.
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So it's really figuring out those balance of the two.
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And what's really beautiful is that the formal methods tools
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have gotten so much better over the last 20 years
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in particular, mostly because of incredibly high investments
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from Microsoft and Google and big universities,
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because these guys are building these gargantuan systems.
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If you look at the Googleplex
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or what Amazon has or others,
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and they have so much value, so many users,
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so many things going on,
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and no person can keep that in their head.
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And so you're talking about systems
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may have 10 million lines of code,
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15 million lines of code, millions of nodes connecting,
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faulty processes happening all the time,
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hackers breaking in on a regular basis.
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So when you're trying to model all of that,
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trying to ask yourself,
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what formal guarantees and properties can I get
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to simplify this system as much as possible?
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So instead of the applications of formal methods
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slowing you down, in many cases,
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it actually massively reduces your debugging time
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and your ability to find where errors occur.
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In some cases, you can't find where errors occur
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and set these massive concurrent systems.
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And you say, well, where are cryptocurrencies going?
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We're talking about just the same thing,
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but we're talking about a much more hostile
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operating environment where instead of it running
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in a pristine data center in California somewhere,
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it's running on your cell phone.
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It's running on your mom's phone.
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It's running your dad's phone.
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It's running on some computer in Mongolia
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that may have good internet on Tuesday,
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but not any other day.
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So when you live in that kind of environment,
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you really do need to think carefully
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about a whole new class of protocols.
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And then you need to think carefully
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about a whole new class of tools and techniques
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to test the reliability of those systems.
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And you need to separate the world and say,
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what is high assurance and cannot fail?
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Because if it fails, people lose money.
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And what is low assurance?
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And it's okay if that falls apart.
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The other thing I'll mention is there are
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perverse financial incentives in our industry.
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Because the reality is when something blows up,
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the people who built those things that blow up
link |
usually get paid up front.
link |
So what they're focusing on is time to market,
link |
speed to market, and getting tokens out
link |
and getting them liquid.
link |
I mean, and then people come in, they buy it,
link |
but if there's a nisiant bug in some DeFi protocol,
link |
it'll probably be discovered six months later
link |
or something like that.
link |
It blows up who suffers, the users.
link |
They already got the people that created that
link |
Exactly, that's why you pay the guy
link |
who makes the break software for your train last.
link |
And you make sure he writes the train every day.
link |
So that you're basically describing
link |
the complexity of a distributed system
link |
that's fundamentally game theoretic.
link |
And if you think about turtles all the way down,
link |
it's humans all the way down.
link |
At the very bottom, it's still human nature.
link |
Is there something you can say formally
link |
about human nature to try?
link |
You said there are certain parts of the system
link |
Some people talk about nuclear war in that same kind of way.
link |
That there's this game theoretic construction
link |
of mutually assured destruction with that rhymes.
link |
That system can't fail
link |
because you're gonna blow everyone up,
link |
but you can't formally say for sure it's not going to fail.
link |
So you're basically trying to chase,
link |
like statistically reduce the probability
link |
that these particular critical aspects will fail.
link |
And then you test, I guess, by deploying in the real world
link |
at small scale to see where things go wrong.
link |
Yeah, it's a great question.
link |
And the problem with game theory and mechanism design
link |
is that you can develop this concept of a rational actor.
link |
And I don't think in my life
link |
I've ever met a rational actor.
link |
There's a rational actor on Tuesday,
link |
but any other day of the week, who the hell knows?
link |
And there's even, I think there was a book Freakonomics
link |
and there's a few of these things
link |
where it just shows again and again
link |
where people behave in ways
link |
that are against their best interest.
link |
So then you have these protocol designers,
link |
and they say, well, we need an honest majority
link |
for this thing to work.
link |
And they say, okay, well, we'll create this incentive model
link |
and rational actors will behave with that incentive model.
link |
And I say, well, the individual won't do that,
link |
but the firm, the government, the entity will.
link |
The problem with that is we have a lot of counter examples
link |
where the system was actually behaving in weird ways.
link |
Like we almost completely eradicated
link |
the human population twice in the 20th century.
link |
Once during the Cuban Missile Crisis.
link |
And again, in the 1980s, there was a Russian colonel
link |
and they installed a new satellite system.
link |
And it said, hey, the Americans are launching missiles at us.
link |
You need to turn the key and launch all the missiles
link |
And he said, oh, that's not right.
link |
That doesn't seem right.
link |
And he was reprimanded for not launching the missiles.
link |
So in both cases, a single person stood
link |
against the systems of superpowers
link |
between us and nuclear annihilation.
link |
So in general, we're really bad
link |
at building these types of things.
link |
So what you look for instead is say,
link |
can the system be self correcting?
link |
It's not about avoiding a problem.
link |
It's more about can the problem be resolved?
link |
And that's how nature engineers things.
link |
It gives you an immune system.
link |
It gives you the ability to heal.
link |
If a rainforest has a fire or some catastrophic event,
link |
the ecosystem will find a way to patch things up.
link |
So it's a better question of how do you align the incentives
link |
over the long term of a system
link |
where all the actors within the system,
link |
when an event occurs that disrupts it,
link |
have an incentive to push it back
link |
into a healthy, productive, useful state,
link |
which is going back kind of to that complexity theory,
link |
stuff that we began with,
link |
and a little bit about how do you handle modern economics?
link |
Like for example, we knew this coming into the COVID crisis
link |
that there would be catastrophic economic disruption
link |
throughout the entire world.
link |
And the developed world,
link |
it was print lots of money and hope to God it works.
link |
And the developing of world is try not to starve to death.
link |
Over a hundred million people
link |
were pushed into acute starvation.
link |
So acute hunger, it's a terrible situation.
link |
But every economist knew we were going into that.
link |
So the question is how do you restart the system?
link |
How do you realign the system and so forth
link |
and make sure that it doesn't collapse at some point?
link |
So it's an imperfect, inexact science.
link |
And that's actually one of the things
link |
that makes our industry so much fun
link |
is that these are kind of like micro experiments
link |
In the years past,
link |
you never got a chance to experiment with monetary policy.
link |
I mean, it's like every 20 years, 30 years,
link |
they'd have some conference,
link |
usually in a cool island like Jamaica,
link |
and be like, okay, let's go talk about monetary policy
link |
and like amend the Bretton Woods Agreement.
link |
And these would be nation states, invitation only.
link |
And now you have over 8,000 cryptocurrencies floating around
link |
all with their own monetary policy and their rules.
link |
And it's very Darwinian.
link |
A lot are dying, some are succeeding.
link |
Anomalies happen like doge coin.
link |
And you say, God, is this temporary, is this permanent?
link |
Why doesn't this horrible thing die?
link |
And then other things you think would be absolutely successful
link |
and just take off and be in the top 10,
link |
don't really get as much traction.
link |
Like Al Grant is a great example of that.
link |
I mean, Silvio, he's incredibly bright guy.
link |
Every time I go to MIT, we have dinner
link |
and his work is legendary
link |
and it's just beautiful and elegant.
link |
And he literally has all the people.
link |
He went and hired Tal Robin and she got an IBM research
link |
the guy did homomorph encryption under Dan Bonet's there.
link |
There's all these amazing people on that team.
link |
And they have money in the VCs.
link |
So you'd say, okay, that's a contender.
link |
But if you look at market adoption,
link |
theorem classic sometimes is above it.
link |
And other things are above it.
link |
Then there's this weird Darwinian evolution
link |
produced doge coin organism
link |
that's just like stomping all around.
link |
Evolution doesn't make sense.
link |
Exactly, but maybe it's worth a problem, not evolution.
link |
Cause the market's the market.
link |
And you can scream and cry and pout
link |
and stamp your foot and said, this makes no sense.
link |
But that's the way the world works.
link |
There's plenty of mountain climbers
link |
that didn't want gravity to apply to them.
link |
And it's the same situation here.
link |
There's plenty of people in these marketplaces
link |
that had the best of intentions,
link |
the best team, the best technology.
link |
And for whatever reason, they didn't get that adoption.
link |
So the question isn't the local,
link |
it should be the longterm.
link |
And will the system over time converge to a state
link |
that actually is useful and meaningful to society
link |
and actually solve problems for it.
link |
And that's what we try to figure out is,
link |
how do we perturb these things in a way
link |
to kind of push them in that direction?
link |
So before we go into this fascinating
link |
Darwinian evolution of cryptocurrencies,
link |
let me ask you sort of a basic programming question.
link |
There's a fascinating aspect to your work with Cardano
link |
that use Haskell to build the infrastructure.
link |
But even stepping back more, looking at this landscape,
link |
another place where Darwinian evolution operates,
link |
looking at this landscape of programming languages,
link |
you as an engineer, you as a philosopher, both,
link |
what programming languages do you think are interesting?
link |
And more practically, what programming languages,
link |
if you were to advise students today, should they learn?
link |
Yeah, so there's the pedagogy of learning how to program
link |
and to express the theory of computer science.
link |
Like you have to learn how to write algorithms,
link |
you have to learn what data structures are,
link |
you have to be able to do analysis of these things.
link |
And that probably the, I think the debate is over,
link |
Python is probably the best language or JavaScript
link |
to get started with, because they're very useful.
link |
The libraries are amazing.
link |
There's just tons of online materials.
link |
Even MIT is now teaching their introduction
link |
to computer science and Python.
link |
And they used to do Lisp.
link |
I mean, these guys were hardcore.
link |
I still love Lisp.
link |
Oh man, it's great.
link |
These are your father's parentheses.
link |
They're elegant weapons from a time long ago.
link |
But you know, that's a great starting point.
link |
And it's not about falling in love with a language,
link |
it's just falling in love with computing.
link |
It's about falling in love with having a dialogue
link |
with a computer and thinking about,
link |
well, how would I solve that?
link |
How would I interact with that?
link |
What does this need to look like?
link |
Functional programming is what we've chosen to use
link |
for Cardano, mostly because we're living
link |
in the academic world, we've written 105 papers.
link |
And the problem is you have to translate that work into code.
link |
And the gap between an imperative language
link |
like a C++ or C and these academic rigorous papers
link |
is extremely large.
link |
And so there's gonna be a lot of semantical ambiguity
link |
between those two.
link |
And what I mean by that is that you might end up
link |
implementing a wrong thing.
link |
You might think that what you've built is the paper,
link |
but the computer's not going to tell you that
link |
because the paper's written in pros
link |
and maybe typed up in late tech or something.
link |
But there's no proof chain, evidence chain
link |
that you can show that there's no ambiguity.
link |
When you look at a functional language,
link |
you're a little closer to math.
link |
And so as a consequence, the translation of the papers
link |
that we spent so damn long writing
link |
and writing proofs about and so forth
link |
to code is much smaller.
link |
Now the downside is these functional languages
link |
tend to be a bit more academic
link |
and they tend to have not necessarily
link |
the best windows support and the libraries aren't so good.
link |
And also they tend to be a little slower
link |
when compared as a whole on average
link |
to languages like C for example.
link |
So it's really a question of okay,
link |
what are you designing for for version one?
link |
Are you designing for performance
link |
and are you designing for developer accessibility?
link |
Are you designing for correctness
link |
and are you designing for a high fidelity representation
link |
Okay, so Haskell was chosen as kind of the version one
link |
because we knew that the kinds of people
link |
who think about that are also the kinds of people
link |
that would have an easy time reading a paper
link |
like a war of oris and working their way
link |
through all of this.
link |
And they would do a pretty good job
link |
running a formal specification
link |
and then translating that into running code.
link |
Then once you have that, you have a blueprint
link |
that you can actually reason about, maintain.
link |
And if you really wanted to,
link |
you could then turn that into a Rust code base
link |
or into a Java code base.
link |
Going the other way around would be
link |
kind of pointless and counterproductive.
link |
The other side of it is that
link |
Haskell code or functional code
link |
tends to be significantly more concise.
link |
And I actually have a real life example of that.
link |
So if you take a look at Mantis,
link |
we implemented a full Ethereum node in Scala.
link |
It's only about 14 or 15,000 lines of code.
link |
And you compare that with like C++ Bitcoin,
link |
I think that's 120, 150,000 lines of code.
link |
So it's almost 10 times smaller.
link |
And so less code, less to read.
link |
And you tend to read code significantly more
link |
than you would read write code.
link |
So it's always an advantage for a maintenance,
link |
understandability, documentation and others of things
link |
when you have more concise code bases.
link |
And also it's a lot easier for you to apply
link |
stronger tools to a functional code base,
link |
like static analysis or property based testing
link |
or these types of things than an imperative code base.
link |
But you know, the thing is it's almost like a religion.
link |
It's like say, or language.
link |
It's like saying what's French versus Russian versus English.
link |
Everybody has their adherence.
link |
They say, oh, they have the best poetry here.
link |
There you go, always are in Russian.
link |
Everybody has their favorite tools
link |
and their favorite languages,
link |
but it just comes down to what problems are you trying
link |
to solve and what problem domain do you live in?
link |
If you're inventing new protocols based on science,
link |
you're gonna take the time to write a paper,
link |
go through the peer review process.
link |
As you've done personally, you know how hard it can be
link |
to get into a conference and go through that
link |
and get your ass kicked, then you also have to apply
link |
the exact same level of care to the engineering side
link |
in terms of implementation of that,
link |
or else you will make a mistake
link |
and that mistake will probably be an exploit in the system
link |
that destroys the security properties of the system.
link |
So we really had no choice,
link |
but to go to some notion of functional,
link |
the question was what's the Goldilocks language?
link |
Do you use a hybrid language like Scala and F sharp
link |
or closure where you still have some connection
link |
to understandable things like.NET or the JVM?
link |
Or do you go to an overly academic language like Idris
link |
or Agda or Isabel?
link |
And there you can really dial up the correctness
link |
and write all kinds of crazy proofs.
link |
But by the way, it's like the seven people
link |
who write your code, they go on vacation a lot,
link |
you'll never get anything done.
link |
So Haskell kind of felt like a nice middle ground
link |
between those two where we needed to pull into the left,
link |
we could, if you wanted to pull into the right,
link |
you could as well.
link |
That said, it's really amazing to see
link |
what the hybrid languages have done.
link |
If I was a new student in computer science
link |
and I said, learn any language to grow your career from,
link |
Scala three is probably the language to go with.
link |
Cause it's like you want it to be like Java, it's Java.
link |
And it looks kind of like a Java program.
link |
You want it to be like Python and scripted
link |
and you use a REPL, you can do that.
link |
You want to go hardcore dot, you know,
link |
dependent object types and do like weird proofs
link |
and stuff in the functional, you do all that.
link |
You have access to all of these things.
link |
And Martin Edersky is a brilliant guy.
link |
He's done some phenomenal work basically,
link |
cause he was one guy who created the JVM
link |
and he's worked on compilers for over 20 years.
link |
He did a lot of really hardcore work
link |
and trying to build a concise, nice, modern language
link |
that does a little bit of everything.
link |
And it's got great applications in data science and AI.
link |
And it's also heavily used in modern companies
link |
like Netflix uses Scala for all
link |
of their microservice architecture.
link |
Yeah, so that's a great language.
link |
And it's easy to pick up and it's easy to hire people into it.
link |
You just find these Eastern European guys
link |
who are Java programmers for 10 years, 15 years
link |
and they got tired of making $20 an hour.
link |
So they picked up Scala so they can make $35 an hour
link |
and they're really good at it, you know?
link |
And that's a great gateway drug
link |
cause you have a quick check in Haskell,
link |
you have Scala check in Scala.
link |
You know, you can also do model checking.
link |
You can also go and use a TLA spec
link |
and make it work with Scala and so forth.
link |
So it gets you a little bit of everything
link |
and you know, you can then move around
link |
that entire design space in a beautiful way.
link |
So the recommendation is maybe if you wanna go Vanilla,
link |
go Python and JavaScript.
link |
When you're getting started.
link |
It's getting started.
link |
Cause that'll get you everything.
link |
You can do web scrapers and anything.
link |
All this experiment with drugs
link |
and undergrad that's where Scala 3 comes in.
link |
It's a gateway drug to then potentially
link |
more hardcore functional languages like Haskell.
link |
Do you think C and C++, C++ still has a role?
link |
No, I think Rust is completely Rust.
link |
It's the need for them.
link |
You know, those are the two twins of Doom.
link |
I mean, Google created Go just to get rid of C.
link |
They hated C that much.
link |
And then Rust is just a phenomenal language as well.
link |
It can be a great motivator.
link |
Let me ask a question from Reddit on this topic.
link |
We're going depth first today.
link |
As a developer, why should I be incentivized
link |
to create Cardano based applications?
link |
What is on the Cardano developer roadmap?
link |
Any other language?
link |
I guess this is the key question I want to ask.
link |
Any other language support other than Haskell?
link |
The example this person gives us,
link |
TypeScript, Go, Java, Python, et cetera.
link |
Also, have you considered a yearly conference
link |
focused through on developers?
link |
Yeah, we saw the Plutus Fest.
link |
And we did the first one in 2018, 2019, I can't remember.
link |
And we were going to do one last year, but then COVID hit.
link |
So we'll bring it back and we'll probably do it annually
link |
at the University of Wyoming for their hackathon there.
link |
And in fact, it just so happens
link |
that coincides with the Gogan Summit.
link |
So we're doing that, I think the third week of September.
link |
But yeah, it's great to do an annual conference.
link |
You can bring a lot of cool people together
link |
and you can do hackathons and awards and so forth.
link |
But to the question in particular,
link |
Plutus is like any other language.
link |
Plutus Core, you can compile things into it.
link |
So it's entirely possible to write a Scala
link |
to Plutus Core compiler or a TypeScript compiler
link |
or something like that.
link |
But I'm a big believer of separation of concerns
link |
and we don't live in a single chain model anymore.
link |
So you have a situation where you probably want to have
link |
different execution environments and different chains.
link |
So you have different virtual machines there.
link |
And that's why we worked so closely
link |
with the University of Illinois
link |
or about a Champagne, Kugori Roshu's team
link |
at runtime verification.
link |
What they did is they said,
link |
let's start with something very familiar, LLVM,
link |
which has been around for a really long time
link |
and they happen to have created it there with Apple.
link |
And let's take that and translate that
link |
into the blockchain space.
link |
Okay, then when you have it,
link |
then it's very easy to modify compilers of standard languages
link |
like the Cs and C++s and other sort of things
link |
that do compile to LLVM already and have them run there.
link |
So that's a different execution model
link |
than what we tried to build for Plutus,
link |
which focuses on correctness.
link |
Okay, so then all you have to really do is say,
link |
can both of these models coexist within the same ecosystem?
link |
Because then you kind of,
link |
and I did a video, it was called
link |
like the island, the ocean, the pond.
link |
And the basic idea was say,
link |
you have an island where everything's perfect,
link |
Calypso lives there, life is great,
link |
people feed you grapes every day,
link |
but maybe you can't do everything on the island.
link |
And the ocean's big, it has everything,
link |
but the ocean's got sea monsters and sharks
link |
and Bodhi McBoatface and all kinds of crazy stuff, right?
link |
So that's what yellow is about.
link |
It's basically this,
link |
bring LLVM into our world.
link |
And at some point in the next three to five year time horizon,
link |
we can bring modern programming languages in,
link |
but they're gonna come in with all their flaws
link |
and their warts and their problems.
link |
And then the pond was the idea
link |
of the Ethereum virtual machine.
link |
There's some network effect around it
link |
and there's some great tooling
link |
that's a materialized and evolved.
link |
And it's not clear if that's the standard yet
link |
or if like MySpace or BlackBerry
link |
or all these other things, it'll fade away.
link |
Well, if it becomes the standard, okay,
link |
don't fight nature, just support it.
link |
And the same thing that gives you the ability
link |
to bolt on the LLVM will also give you the ability
link |
to bolt on the EVM and they can run with their own models
link |
and they're encapsulated, bulkheaded, separated systems,
link |
but you can move ADA applications,
link |
information between those two systems.
link |
And so your main chain will always stay
link |
somewhat conservative and have the minimum viable amount
link |
of expressiveness required on it
link |
to do all kinds of interesting things.
link |
And also for interoperability,
link |
be able to talk to all kinds of interesting things,
link |
but it's not trying to be everything to everyone.
link |
There's never gonna be an ice cream store in the island.
link |
You'll have the grapes and the beautiful women,
link |
Now you're just like distracting me with the ice cream.
link |
So just for, because we'll throw around a bunch of terms
link |
for the record, what is Plutus?
link |
So Plutus is a programming language.
link |
It's kind of a DSL that we built on top of Haskell.
link |
And basically we wrote it after spending
link |
about three years thinking about all smart contracts.
link |
We were trying to figure out like,
link |
what is the ideal language to express a smart contract?
link |
And then we started thinking, well,
link |
what is a smart contract?
link |
Is it the whole application
link |
or is it just like a sub module within an application?
link |
And usually it's the latter more than a former.
link |
You can build a self contained program like a script,
link |
but usually what's happening is you'll have it
link |
like a video game, let's say World of Warcraft
link |
or something like that.
link |
You say, hey, maybe I want to actually create gold
link |
in World of Warcraft that's actually a currency.
link |
Okay, so I'm going to issue a token.
link |
Well, and then maybe I want to create some mechanics
link |
behind how people are going to trade that amongst each other.
link |
So that would be like a smart contract layer
link |
and issue an asset.
link |
So you have this centralized server running
link |
and proprietary software controlled by a single company,
link |
but then you've opened your application up
link |
to a broader world.
link |
And we've done now is added a blockchain layer
link |
and the blockchain handles the accounting of that asset
link |
and the spending policy of that stuff.
link |
So that is a much smaller program
link |
than what Blizzard is doing with World of Warcraft.
link |
So the point of Plutus was let's create a language
link |
where you can write these small to mid size programs
link |
and have a high degree of confidence
link |
that they behave with correctness.
link |
And also they give you deterministic results
link |
on the consumption of resources.
link |
You can run things locally
link |
and you actually understand what it costs to run.
link |
And that doesn't change when you deploy it on the system.
link |
If you dial up the expressiveness of the system
link |
and like Ethereum does
link |
in these big mutable account systems,
link |
the problem is you have to have global state.
link |
So whatever you test locally
link |
doesn't actually necessarily translate
link |
to what you've deployed.
link |
So we spent a long time asking like
link |
where's the Goldilocks zone?
link |
Bitcoin script was too restrictive
link |
and every single time Satoshi tried to dial it up
link |
it led to mega problems.
link |
Like there was a beautiful thing
link |
called the value overflowing incident in 2010
link |
which led to the creation of billions of Bitcoin.
link |
They had to quickly clean that up
link |
and sweep it under the rug
link |
and pretend like it didn't exist.
link |
But that was mostly because of an issue
link |
with how the scripting language was implemented.
link |
And when you look at Ethereum
link |
it's like this pure game of stomping down these skirmishers
link |
where every update there's something
link |
they have to change or tune
link |
and then it's not clear how you shard such a model.
link |
So we said let's build something that's in the middle of this
link |
and that's what Plutus basically is.
link |
And it's really designed to play very nicely
link |
with off chain infrastructure
link |
as much as on chain infrastructure.
link |
So you can look at all those different examples
link |
whether it's Wolfram wants to auction off their universes
link |
or Blizzard wants to issue an in game currency
link |
or you're Uber and you wanna start putting
link |
peer to peer dynamics inside your system
link |
you're gonna gracefully connect to that on chain code
link |
and it's very clear how those two things connect together.
link |
Just so happens Haskell's really good for this.
link |
They have template Haskell
link |
and it makes it very easy to embed domain specific languages
link |
and it makes it very easy to wire your Haskell code
link |
onto off chain infrastructure.
link |
So in the future you'll be able to have your off chain
link |
run a node or the job of virtual machine
link |
or a dot net application
link |
and they'll just be this beautiful interface
link |
and then it can talk to all your on chain code
link |
and that's written in that DSL
link |
and you have a high degree of assurance that it's right.
link |
Is there like a Hello World program in Plutus
link |
that reveals the beauty of this balance
link |
that you're referring to sort of a simple
link |
but not too simple Einstein idea.
link |
Yeah, so we did do our first Hello World program
link |
actually today because we...
link |
Yeah, I heard about this.
link |
Yeah, but there you'd want to have the whole round trip.
link |
So you'd like to have an interaction
link |
and I think a video game would probably show it the best.
link |
Like if we could reimplement crypto kitties
link |
or something like that on it
link |
and you have this off chain infrastructure
link |
and you have your GUI and your front end
link |
it's running on your phone or a browser
link |
and most of that lives off chain
link |
and then but your crypto kitties they'd live
link |
on the blockchain the whole round trip end to end
link |
with relatively low fees and low latency
link |
and high availability of service.
link |
It never goes down.
link |
That would probably be the best thing to do
link |
and we'll have something like that by August.
link |
It's pretty easy to build this stuff.
link |
So what kind of off chain interactions
link |
are supported with Plutus?
link |
What are the limits you want to put on the thing
link |
so it doesn't get chaotic?
link |
That's the beautiful thing.
link |
When you have a less expressive model on chain
link |
it means you can do anything you want off chain.
link |
So you started talking about smart contracts
link |
but let's zoom back out
link |
and ask the big question here is what is a blockchain
link |
and what is a cryptocurrency?
link |
So a blockchain is just a ledger
link |
and really it has three nice properties.
link |
Your time stamp you're immutable and auditable
link |
either in a global or a local sense.
link |
And so there's all kinds of things mankind has invented
link |
where it's really important that you
link |
when you put some information down
link |
it doesn't change and other people can see it
link |
and that you know when it was put down.
link |
For example, a property ledger.
link |
So when you buy a land
link |
or you have rights associated with land
link |
like mineral rights or water rights or these things
link |
you'd like to transitively see how does it go
link |
from Alice to Bob to Charlie to Jim and so forth
link |
and what was the state of these things
link |
as they were transitioning?
link |
So how much did they pay?
link |
When did it occur, et cetera, et cetera
link |
the metadata that follows that.
link |
Okay, well normally these types of ledgers
link |
are so important that they're managed
link |
either by governments or regulated entities.
link |
And the issues are that while they can be efficient
link |
they're generally brittle to political manipulation
link |
and they're brittle to geopolitical events.
link |
For example, when Syria fell apart
link |
the very first thing ISIS did is they started saying
link |
hey, the ownership of the land
link |
it's gonna fundamentally change.
link |
We've decided that this guy over here
link |
now owns all these things.
link |
And then when peace comes like how do you unwind
link |
all of that put it all back together.
link |
So the power of a blockchain is that it gives you
link |
a transnational way of sorting all these details out
link |
putting all together in a place that you know
link |
that even if it's inconvenient to a very powerful actor
link |
that it will still stay preserved.
link |
This is an asymmetry we haven't had as a society
link |
usually kings and empires
link |
they have the ability to decide what's true.
link |
And then suddenly you have this asymmetrical thing
link |
that is above them kind of like a synthetic laws of physics
link |
and once something goes in there
link |
you know that that's there, okay.
link |
So that's the first part of it.
link |
The second part of it is that it's auditable
link |
meaning that instead of saying only the high cleric
link |
or the president or you know
link |
some very special club of people
link |
get to see what's going on
link |
suddenly now all the people
link |
can actually see who owns what where.
link |
Like imagine a tax system where you know
link |
the public club just leaked the taxes
link |
of all these different billionaires
link |
and said well how much they make and how much they pay
link |
well imagine a tax system
link |
where that's just done by default
link |
or other social systems
link |
where this type of information is put in by default.
link |
So it's tremendously useful this type of structure
link |
and all kinds of things medical records, supply chains
link |
you know just a good thought experiment is
link |
I travel a lot of into 52 countries in the last five years
link |
imagine if I got sick and Zimbabwe
link |
you know I hit by a car or something
link |
and I'm unconscious and a Zimbabwean doctor
link |
calls my doctor in Colorado and says
link |
hey you know I need all Charles's medical records
link |
you know he's unconscious right now
link |
but I need it to treat him because he's quite ill.
link |
They'd say who is this person in Zimbabwe
link |
well I don't know you I can't give you his records
link |
I need his consent oh no he's unconscious
link |
in the hospital can't do it.
link |
Well a broker system that would allow the movement
link |
of medical records would it be an example
link |
of what a blockchain could potentially do
link |
in the foreseeable future.
link |
Cryptocurrency is just an application
link |
that runs on top of blockchain
link |
because it turns out that when you issue property
link |
you also can issue tokens of value
link |
and then you could have a monetary policy
link |
it could be inflationary or deflationary
link |
you know demarrage where it decays over time
link |
or whatever have you
link |
and the very same mechanics that would ensure
link |
your property records are secure
link |
or your medical record access is secure
link |
could also be applied for the ownership
link |
of the cryptocurrency and again
link |
you can either be completely transparent
link |
and everybody can see what everybody owns
link |
and that's what Bitcoin does
link |
or you can be as opaque as you seek to be
link |
that's what Zcash basically attempts to do
link |
it says hey let's keep these things as private as possible
link |
but they have relatively the same mechanics
link |
in terms of those properties of auditability
link |
and time stamping and immutability
link |
you know things won't be reversed
link |
you know that people aren't gonna manipulate
link |
the time stamps and you can audit at least enough
link |
to know that the ownership is right.
link |
But the way if you think about physics and the universe
link |
the universe has figured out a way
link |
to update the ledger of physics in a way
link |
where like a lot of people can be updating it
link |
and it stays consistent
link |
is there something you can say about the task
link |
of updating the ledger when a bunch of people
link |
are trying to do it
link |
or a bunch of entities are trying to do it?
link |
That's the whole point of a consensus algorithm
link |
so whatever ledger you're running
link |
there has to be some mechanism to decide who's in charge
link |
and that's what proof of work does
link |
and proof of stake does and all these other systems
link |
and you break them down to basically three steps
link |
and so we'll use Eve for kind of step number one
link |
hi Eve, how you doing?
link |
And we're gonna use Wally for step number two
link |
and I need the monkey, give me the monkey.
link |
What's the monkey's name?
link |
Daisy the monkey, okay.
link |
Daisy is a very confused monkey.
link |
It's partnering its own mortality just saying.
link |
Right and so anyway the first step is all about
link |
basically deciding who's in charge for that moment.
link |
So blockchain is just a sequence of events
link |
the heart has to beat, the metronome has to click
link |
so somebody has to be in charge
link |
and so generally you have this notion of a resource
link |
so there's some pool of resource out there
link |
and it can be a token and in that case
link |
it's a plutocratic system and that's what proof of stake does
link |
or it can be computation but there can be other resources
link |
but computation is what proof of work does
link |
and so you make so many hashes
link |
and then eventually somebody wins
link |
and that person who wins is now the person
link |
who basically gets to decide the order of transactions
link |
and put them all together from their perspective
link |
Then once that person wins they'll make the block
link |
that's step two and after it's made, transmit it
link |
and it gets validated and accepted.
link |
So actually it's quite fortuitous you have the magnifying glass
link |
because at this stage people are trying to decide
link |
is what I'm looking at correct or not.
link |
Now there are other ways to potentially conceive of this
link |
but this particular model gives you a kind of a way
link |
of thinking of all consensus algorithms in one setting.
link |
You can be Algorand, you can be a classic BFT protocol
link |
you can be Paxos, you can be Raft,
link |
you can be proof of work, you can be proof of stake.
link |
It's always the same idea.
link |
You have to find someone or some group to be in charge,
link |
they'll reach a consensus on order,
link |
they have to then do some work,
link |
change the state of the system, update it
link |
and then the network has to accept that that's valid.
link |
So even if this process works well, this side will say,
link |
oh, you created a Bitcoin at a thin air,
link |
you're not allowed to do that.
link |
So that's rejected.
link |
So there's checks and balances and guards all the way through.
link |
There's a meta question of fairness in all of this.
link |
So the proof of work people, they're kind of a cult
link |
and they say that this is the only truth
link |
and everything out here, any other resources
link |
not legitimate or valid and there's not a lot
link |
of evidence to that but that's what they believe.
link |
The proof of stake people, the downside and weakest
link |
they have is it's a plutocratic model.
link |
The more ownership of the system you have,
link |
the more control you have over that system
link |
and it suffers from the same thing
link |
the shareholder models suffer from
link |
whereas you may maximize short term gain
link |
over the long term viability of the system.
link |
So a really cool question is,
link |
can you build systems that are multi resource?
link |
So instead of just pulling from one resource
link |
to select who wins, this 25% of the time
link |
and maybe this 25%, you can do that.
link |
In fact, the cryptocurrency space did that a long time ago.
link |
There was a cryptocurrency called Peercoin in 2011
link |
and it was a hybrid proof of work proof of stake.
link |
So some of the blocks were made
link |
with the token ownership distribution
link |
and some of the blocks were made with proof of work
link |
but you could keep adding, you could put in like,
link |
hey, I want hard disk in my thing,
link |
you could put permacoin in or something like that.
link |
So create incentive for hard drives
link |
and then you could say, oh no,
link |
I wanna do like a human system, like a proof of merit.
link |
Oh my God, now we're up to four
link |
and you just keep adding
link |
and each of these pools will have different adherents
link |
and actors and then you can actually balance out
link |
So as opposed to having one cult, you have many cults.
link |
And the cults argue with each other
link |
and we call that a government.
link |
By the way, not all cults are bad.
link |
Physics is a cult too.
link |
And it's sometimes bad.
link |
It's honest at least.
link |
Nature is metal, check out the Instagram.
link |
So that's really the crux of it.
link |
You have a ledger and the ledger is just all about saying,
link |
hey, we need to put some stuff in here
link |
and once it's put in here, you can't turn it back.
link |
And you know when it was put in
link |
and everybody can see it or some group can see it
link |
and then you need to pick somebody to modify that.
link |
So all this chaos will happen,
link |
all these transactions are all around the world
link |
and our perception of them are different.
link |
There's a beautiful paper from Lamport
link |
that kind of talks about this from the 70s.
link |
It's like one of the most classic papers ever
link |
in computer science.
link |
I think it's been cited like 50,000 times
link |
or something like that.
link |
But basically you have to figure out, okay,
link |
well, somebody has to be in charge.
link |
Some group has to be in charge.
link |
You can do it with a meritocratic,
link |
hash or cratic computation thing.
link |
You can say, well, if you have coins 25, 25% of supply,
link |
25% of the time on average,
link |
you'll be selected to have the right to do this
link |
or give it to somebody else.
link |
Or you can search for other resources.
link |
They can even be human resources,
link |
like some notion of merit or social benefit.
link |
Maybe you get a token for that
link |
and you can weight it with these other systems.
link |
And that's where everything's going.
link |
We're getting to a point where we've really optimized
link |
all the properties here.
link |
We've proven all these nice things about it.
link |
And there's a lot of competition
link |
to basically build like the perfect proof of stake system,
link |
whether you're Polkadot or Algorand
link |
or any of these other guys.
link |
But now the next step is say, well,
link |
why don't we just have one?
link |
We should have multiple resources.
link |
And the point is each of these
link |
has different trade off profiles.
link |
And so they balance each other
link |
and you end up building a much more resilient system.
link |
So it's not winner take all with one particular demand.
link |
Okay, so there's a million questions
link |
that spring up right there.
link |
But first, linger on this topic and say,
link |
what is proof of work?
link |
What is proof of stake?
link |
Just zooming in on each of those.
link |
And what are the differences?
link |
Okay, so they all have the same three properties
link |
of pick someone in charge, do something and validate it.
link |
The difference is that the picking mechanism
link |
for proof of work is you have to solve a puzzle.
link |
So it's basically like buying lottery tickets.
link |
And you can buy a certain amount every second
link |
with your computing devices.
link |
And some of them are ASIC resistance.
link |
You run them on like a laptop or a GPU.
link |
And some of them are you specialized hardware
link |
that you have to either manufacture
link |
or buy from someone who sells it to you.
link |
And that's just how many tickets per second you can get.
link |
And eventually you hit those magic numbers.
link |
And when you do, it means you have the right
link |
to make the block.
link |
And generally you bundle the block making
link |
with the proof of work system.
link |
Now you can do this looking for a single
link |
or you can do this to actually shard it
link |
and look for multiple block makers at the same time.
link |
So there are sharded proof of work protocols
link |
like Prism is an example of that.
link |
And actually Ethereum got started this way
link |
with Spectre and Ghost and Phantom,
link |
the Avi Zahar's work and Yonatan Samlopinsky.
link |
But the basic idea is you pick some collection of people.
link |
They make some collection of things.
link |
And there's some way to sort it all out,
link |
serialize it and prevent double spends, great.
link |
Proof of stake is the same, but it's a synthetic resource.
link |
So instead of doing things, they say,
link |
well, if you had 25% of the hash power
link |
on average over a long period of time,
link |
you'd probably win 25% of the time.
link |
Well, why don't we just introduce some randomness in
link |
from some source and then 25% of the time
link |
on average over a long period of time, you'll win.
link |
So it's a synthetic resource,
link |
but you still have to do the other two things.
link |
You still have to make the block
link |
and you still have to validate the block.
link |
The big difference is this step in the proof of work world
link |
is horrendously expensive.
link |
You use more energy than the nation of Switzerland.
link |
And the problem with that is that you have
link |
less resources for the other two.
link |
And the other problem with that is that
link |
if this is horrendously expensive,
link |
you have an economy of scale, Kecan.
link |
So what ends up happening is the system becomes
link |
less decentralized over time
link |
because you have these vertically integrated operations.
link |
I mean, not everybody can go build a mining facility
link |
on a volcano in El Salvador.
link |
Not everybody can go to Mongolia
link |
and set up a five gigawatt power plant
link |
and a huge data thing.
link |
Not everybody has access to the patent basics
link |
that people produce.
link |
Cause what if I don't sell it to you
link |
and I have the patent on it?
link |
Or what if I control the supply chain for these things?
link |
So you'll end up having centralization
link |
around maybe 10 or five major operations
link |
as we've seen historically with proof of work.
link |
And that means you end up having like a ruling class
link |
of a mining oligarchy in the system.
link |
Proof of stake, if you design the parameters correctly,
link |
you actually get more decentralized over time
link |
because as the currency goes up in value,
link |
the distribution of the currency tends to get
link |
For example, Bill Gates, when he started Microsoft,
link |
he had 64% of the shares.
link |
Now he has less than 5% of the shares.
link |
So there's founder drift over time
link |
as the value goes up, divestment occurs.
link |
You have more and more and more people coming in.
link |
That means there's more people who can participate
link |
You can even tune economic parameters.
link |
And this is what we did with Cardano and Ouroboros.
link |
We created this concept of K in the system
link |
and it's just a parameter.
link |
And it's like a forcing factor
link |
that tends to accumulate a certain amount of stake pool.
link |
So you can set it to 200 and then 500 and 1,000
link |
But the basic idea is as the price of 80 goes up,
link |
you make K larger and then you end up in practical terms
link |
having a larger and larger set of actors
link |
making blocks that are unique and distinct.
link |
And the other good thing is this is a virtual resource
link |
instead of a physical resource,
link |
which means it's portable by the click of a button.
link |
So let's say China says mining is bad.
link |
We're gonna shut it all down.
link |
And it looks like they're moving in that direction.
link |
You have all these people in WeChat
link |
just like trying to sell miners
link |
or trying to figure out how the hell do I move miners?
link |
Cause they have these huge data centers
link |
they've constructed.
link |
You can't exactly go and grab a server
link |
and like take it with you, it's huge.
link |
It's a lot of work.
link |
And if the government sees it,
link |
well it's their property now.
link |
A virtual resource, you can click a button
link |
and redeploy it to a different jurisdiction.
link |
So to me, for a virtual asset,
link |
it makes a lot more sense to try to tie your security
link |
to something endogenous, something within the system
link |
because it's just like the asset.
link |
It can move anywhere at a click of a button
link |
and human beings have a much harder time
link |
attacking something like that.
link |
Well, so people, maybe you could certainly devil's advocate
link |
and say, what is the strength of proof of work system?
link |
Because some people would argue that proof of work
link |
has, because it's outside the system,
link |
it's tied to physical resources, it's more secure.
link |
It's less prone to attack by large groups of people.
link |
Yeah, that's a great question.
link |
And the first question we had was,
link |
could proof of stake actually work or not?
link |
So the problem was that the engineers kind of led
link |
when the science should have led.
link |
And so there were all these POS protocols
link |
that came out in the early 2010s
link |
like Peercoin was the first and then NXT and others came out.
link |
And there they had suffered from things like
link |
the random number generation wasn't good.
link |
They had grinding attacks and nothing at stake
link |
and all these other things.
link |
And there's a lot of beautiful properties
link |
for proof of work from a theoretical sense.
link |
We even wrote a paper called GKL,
link |
named after the author is Juan Grey,
link |
Nickelodeon artist and Aguilos Gassis,
link |
our chief scientist.
link |
It's got 1,100 citations now and it's published in 2015.
link |
But basically all it did is just modeled a blockchain
link |
and created some security properties for it.
link |
And then it started talking about,
link |
well, what does proof of work actually do for you?
link |
And it turns out it does a lot.
link |
It's an asynchronous system.
link |
You can bootstrap from Genesis.
link |
So if Eve joins the network and Wally joins the network
link |
and Daisy joined the network,
link |
then you give them some different chains
link |
like five or 10 different chains.
link |
They can run a calculation
link |
and they will always pick the longest chain,
link |
the heaviest chain inside the system.
link |
That's a great property of proof of work
link |
until we published Orbor's Genesis in 2018.
link |
You actually needed to solve that in proof of stake
link |
with a trusted checkpoint.
link |
So some actor had to be observing,
link |
watching the whole thing and creating checkpoints.
link |
And then when new people joined in,
link |
they would only be able to distinguish between a chain
link |
based upon a checkpoint telling them that.
link |
So you have to do a lot of really wonky crazy math
link |
to show and create this notion of like density
link |
to be able to show that that's possible.
link |
But there's a lot of properties of proof of work
link |
that were super hard to replicate and emulate
link |
in the proof of stake world.
link |
Macaulay kind of revolutionized the whole VRF thing.
link |
There was a group out of Cornell
link |
that talked about better network conditions.
link |
They wrote a paper called Sleepy.
link |
We also did the very first Prupuli secure protocol.
link |
But that was six years of work and like 12 papers.
link |
And it's still not done.
link |
There's still a few polishing things
link |
that have to be cleaned up
link |
because this is a physical resource
link |
and there's something there.
link |
But there's a flaw to proof of work
link |
that is a little problematic.
link |
It's a winner take all type of a system.
link |
So maximalism is kind of philosophically
link |
and computationally built into it.
link |
Let's say you have two proof of work systems
link |
and they have roughly the same market cap and hash rate
link |
and they use the same algorithm.
link |
Then the problem is if the miner comes in
link |
and let's say the miner has enough resources
link |
to have 51% for any of these chains,
link |
they actually have a perverse incentive
link |
to come and destroy one chain
link |
and short sell the asset.
link |
It's called a gold finger attack
link |
and then go mine the other asset
link |
because they're not bound to that asset.
link |
They're not loyal to it.
link |
And they can make just as much profit mining this
link |
as they can make mining the other system
link |
and the markets allow them to profit
link |
from the destruction of a system.
link |
So that's something that proof of stake doesn't suffer from
link |
because the only way you can participate
link |
in a proof of stake system is you have to actually own equity
link |
and you have to have ownership in that system.
link |
So if you go and destroy Daisy's chain,
link |
it would just be a net loss for the most part.
link |
Unless you have really messed up markets
link |
or something like that.
link |
So there's always trade offs and all these things.
link |
And this is why I like this concept of going one to N
link |
and having multiple resources
link |
because why not have proof of work
link |
and proof of stake together?
link |
If the proof of work is useful, not wasted computation
link |
and why not add other things
link |
like create incentives for network relay.
link |
Right now there's no incentives in the system
link |
for you to run peer to peer nodes and share data.
link |
Right now it's not a problem,
link |
but if you're running like Amazon web services level
link |
at bandwidth it could cost you like $5,000 a month
link |
in bandwidth just to run a full node or something like that.
link |
No one would do it.
link |
So then your system will centralize along the weakest link
link |
whether it be the storage layer, the computation layer
link |
or the network layer of the system.
link |
So if you can incentivize the resources differently
link |
then you'll be in a beautiful position
link |
where you end up having a resilient system
link |
that pays its own bills.
link |
So how does Cardano solve the consensus problem?
link |
Do you tend to eventually wanting to solve it
link |
in the hybrid approach of proof of stake and proof of work?
link |
Yeah, this was a philosophical difference
link |
between Vitalik and myself.
link |
The problem with the people in the Ethereum side
link |
is they're really bright and these really bright people
link |
what they do is they try to do everything all at once
link |
because they're really, really smart
link |
and they keep going until they run up against the wall
link |
and they realize the problem is a lot harder.
link |
If you're more experienced
link |
and that's why we brought in proper academics
link |
like Agilos and others, because they'd been beaten up
link |
through life, Agilos worked with David Chom
link |
and these other, there's really hard work with those guys
link |
and they'd already been humiliated and yelled at
link |
and had chalk thrown at them and all that stuff.
link |
And so they were humble enough to say,
link |
I'm not smart enough to solve the big problem.
link |
So don't even try.
link |
What you do is you decompose it and you say, okay
link |
what's the first problem to solve in a chain of problems
link |
that you can compose your way up to a working system?
link |
And once you get far enough along
link |
you have something that's pretty good
link |
and then you have an obvious path forward
link |
of how do you iterate and improve that system?
link |
That's why we started with GKL 15
link |
because it was just saying,
link |
we don't know what a fucking blockchain is.
link |
What is this thing, right?
link |
What's the security properties of stuff?
link |
Like what did we really mean?
link |
Then we did Orboros Classic,
link |
the original Orboros protocol in 2017.
link |
And that protocol was like a synchronous system
link |
and it assumed the nodes were always on and it worked
link |
but it was useless because that's not real life.
link |
Then PROS came out and then suddenly we relaxed things.
link |
These are all by the way names
link |
for consensus algorithms and computations.
link |
Yeah, the papers that we published
link |
and they were all peer reviewed like GKL was EuroCrypt.
link |
That's a very hard conference to get into
link |
and Orboros Classic was crypto
link |
and PROS was EuroCrypt and Genesis was CCS.
link |
So basically every step of the way was first
link |
at academic validation that there was some merit
link |
to the work that was done.
link |
Second, it solved a particular class of problems
link |
either showing the feasibility of the entire problem.
link |
Because when I said, let's do the model first
link |
because let's see if we can do an FLP thing.
link |
Let's see if we can get a possibility theorem.
link |
That's great because you're done.
link |
It's like those short math papers were like,
link |
I found a counter example.
link |
It's like, okay, this whole thing has fallen apart
link |
because you have a two line proof, thank you.
link |
So that's what we were looking for
link |
in the beginning of the agenda was
link |
let's either prove it's possible in a strawman case
link |
or show that there exists an impossibility result
link |
in which case we can just abandon the entire inquiry.
link |
Proof of stake is impossible.
link |
And then once you've gotten past that threshold,
link |
it goes from theory to practicality.
link |
What actual network conditions are you looking at?
link |
Are you okay with living with an external clock
link |
or do you want to build time from within?
link |
How are you generating random numbers, et cetera, et cetera?
link |
And every step of the way, each paper,
link |
you're solving one particular class of problems.
link |
With Prism, it said,
link |
probably shouldn't know ahead of time who Eve is.
link |
You probably shouldn't know who's making those blocks.
link |
That should be something after the fact.
link |
But if you know ahead of time, you can attack them,
link |
you can DDoS them, you cause all kinds of problems.
link |
So adaptive security also,
link |
we moved from an MPC random number generation,
link |
which was great, but very heavy and very slow.
link |
And you can't scale to large amounts of people
link |
to a VRF based system, which is super fast,
link |
but a little dirtier,
link |
because Algorand actually did some great work there.
link |
There was some good knowledge there.
link |
What are the really hard problems that you,
link |
maybe if you just linger on a little bit,
link |
what are some of the really hard problems
link |
you have to solve along this chain of papers, ideas,
link |
the evolution of the consensus algorithm?
link |
Yeah, not only are they really hard problems,
link |
they actually require different cryptographers,
link |
because you're moving from mathematician style cryptographers,
link |
like the Neil Coplitz's and the Addie Chameer's,
link |
and the people that like start as proper mathematicians,
link |
they really love theory.
link |
And that's their thing.
link |
And the proofs are dense and they're thick
link |
and they're beautiful to practical applied work,
link |
where you're saying, okay,
link |
now this is something an engineer can look at
link |
and say, I know how to build that.
link |
I know how to think about that.
link |
So that transition from GKL to,
link |
or of course, classic to PRAUSE,
link |
I'd say the biggest leap was classic to PRAUSE,
link |
because that was going from a system
link |
that would only work in a consortium chain like fabric,
link |
to a system that would actually work and is working.
link |
That's what's implementing Cardano today.
link |
50 billion dollar cryptocurrency and all these people,
link |
that was a huge leap.
link |
But that paper alone wasn't enough.
link |
We also had to layer on the economic model,
link |
because we said, well, hang on a second here,
link |
not everybody's gonna be online all the time
link |
to be available to make a block,
link |
so you need some notion of delegation.
link |
The minute you have a notion of delegation,
link |
you have these stake pools, what the hell does that mean?
link |
And so this is a beautiful kind of interdisciplinary notion
link |
that layers computer science and biology together.
link |
And minute that complexity starts going up,
link |
you start seeing cell specialization.
link |
So you go from single cell organisms to organisms
link |
where you have eyeballs and brains and hearts,
link |
and each of these tissues do different things.
link |
Well, analogously, complex distributed systems
link |
start getting specialization.
link |
You move from the single cell thing,
link |
Bitcoin, where everything's a full node,
link |
they all have the same rights and responsibilities,
link |
a lot of homogeneity in that system,
link |
but you're only as good as your weakest link,
link |
you're only as capable as whatever the basic cell can do,
link |
to a specialized system where you start having these actors
link |
in the system that are actually a little different
link |
than the other actors.
link |
So you introduce this concept of the stake pool,
link |
and suddenly now you have this actor
link |
where you're probably gonna be online 24 seven.
link |
You're probably gonna have extra relay infrastructure.
link |
There's a trust relationship where you don't own the ADA,
link |
but you have a right to use it for something,
link |
and a person's made that choice to endow you with that.
link |
The minute that you introduce specialization, though,
link |
the system gets more complicated,
link |
the game theory gets more complicated,
link |
and then you start having to think really deeply
link |
and carefully about, okay, well,
link |
can this now introduce a new attack vector
link |
that we didn't have before?
link |
So that leap from classic to prowess,
link |
and adding in stake pools and figuring out
link |
how to handle the game theory there was exceedingly hard,
link |
but two years to do that.
link |
So stake pools allows for multiple parties
link |
to delegate their staking capabilities to others.
link |
Can you describe a little bit how this works?
link |
It's kind of fascinating.
link |
It's a super simple concept.
link |
So you register a pool, and then the pool is there,
link |
and basically they advertise,
link |
and they're actually registered on chain with a certificate,
link |
and then in the wallet software itself,
link |
you can see all of the pools that have registered.
link |
There's over 3,000 of them now inside the system,
link |
and then you can click a little tile,
link |
and it shows you all the metadata
link |
that's in the certificate,
link |
and it says, hey, I have my own pool.
link |
It's called Rats, I'm king of the rats.
link |
So you can see all the stuff that's described there,
link |
and pools have an operating fee,
link |
because they're like a business,
link |
and they say, well, if you delegate to me,
link |
I'll charge this much.
link |
So if you get like 100 bucks in rewards,
link |
I'll give you 9D, and I'll take 10 or something like that,
link |
and then you make your decision,
link |
and whichever one you select,
link |
you click delegate, push the button,
link |
and then you have now given your staking rights to them
link |
until revoked, okay, so it lived there,
link |
and then the stake pool's weight in the system
link |
is proportional to the amount of stake
link |
that they have delegated to them,
link |
and then we have this other limiting factor, K,
link |
which says that you get diminishing returns
link |
with the more stake you have,
link |
so it's kind of like an S function,
link |
so you kind of go up and up and then eventually caps,
link |
and then at some point you get no rewards
link |
beyond a certain threshold,
link |
so there's an incentive to split pools
link |
to different owners after some point.
link |
Yeah, and so that's a complex thing,
link |
and you have to actually model the game theory out
link |
to understand where those parameters should be set,
link |
and we didn't know how to do that,
link |
so what we did is we bought talent,
link |
we went to Oxford, and we hired this guy named Elias Casupis,
link |
he's an algorithmic game theorist,
link |
and we said, hey, would you like to do some game theory work
link |
in crypto, and he's like, that sounds fun,
link |
so he spent a year and a half,
link |
we built all these beautiful models,
link |
and we kind of figured out what those curves needed
link |
So figure out like the S curve, though,
link |
resulted in a nice distribution of responsibility,
link |
so not everybody delegates to the king of their ads.
link |
How does it feel to be royalty, by the way?
link |
It's not a very impressive kingdom,
link |
but you're nevertheless a king.
link |
I'll take it, because I think it's the kindest thing
link |
people call me in this space.
link |
Oh, yeah, people love you.
link |
So, okay, so that, I mean, so is that,
link |
would you say a solved problem?
link |
The game theory of stake pools?
link |
No, it's the starting, and then I was getting back
link |
to my original point,
link |
that you build things in iterations,
link |
every step, if you've done it right,
link |
is an invitation for 10 more sexy, fascinating,
link |
fun problems, and this is why we have such a great time
link |
building labs, you know, we started in Edinburgh,
link |
now we're at Tokyo Tech, and University of Wyoming,
link |
and Athens, and we're setting up more labs this year,
link |
and all these academics want to work with us, hey,
link |
because we write a lot of really fascinating papers,
link |
but B, because we're focused on all these really cool,
link |
sexy, interdisciplinary problems.
link |
We're actually running the problems
link |
where we don't even know where to publish the paper,
link |
because you'll have this paper
link |
where there's like these PL guys working with crypto guys,
link |
working with systems guys, working with economists,
link |
and you put it all together,
link |
and you have this Frankenstein paper monster,
link |
and we're like, where do we submit this?
link |
You know, where does this go?
link |
Yeah, there we go.
link |
Nature or quanta or something, I don't know.
link |
It'll write a nice little.
link |
So the sexy problems multiply exponentially.
link |
Exactly, and we've now gotten to a point
link |
where we're starting to work on refinements to the system,
link |
rather than fundamental things that are like,
link |
if you don't solve it, the system just simply doesn't work.
link |
For example, you can run all of this with NTP
link |
as your clock server,
link |
but you actually can create an ocean of time within.
link |
We wrote a paper called World War's Chronos for that, okay?
link |
But that's not necessary for the system.
link |
It's just a nice to have thing.
link |
It's a nice property.
link |
Optimization of the random number generation
link |
is another example of that.
link |
You can run it with a heavier thing.
link |
You just have more blockchain bloat
link |
and slower time and transition.
link |
We have this concept of epic.
link |
So you elect leaders to run the system
link |
every five days with Cardano,
link |
but there's been derivative work.
link |
We didn't even do this.
link |
This work occurred at University of Illinois,
link |
and that derivative work said,
link |
well, you don't actually need to do that.
link |
You can do it on a block by block basis.
link |
It's like, oh, that's pretty cool.
link |
So that's the other point about doing things
link |
in a very rigorous way,
link |
is that that way is creates a lingual franca
link |
for what you're trying to solve
link |
with the totality of the academic community.
link |
So suddenly people that you've never met,
link |
you know, nothing about have read your papers,
link |
cited your papers, and start writing their own papers,
link |
either to try to attack and destroy things you've done,
link |
or to build on top of the things that you've done.
link |
So people are trying to figure out ways to attack this.
link |
As rigorous as you are trying to do that.
link |
And I don't have to pay them.
link |
That's the beautiful thing.
link |
It's fun to try to destroy,
link |
and that's how we grow stronger.
link |
And it's how you build your career, too.
link |
There's plenty of people that they've gotten tenure
link |
just kicking the hell out of Intel SGX.
link |
You go to CCS every year,
link |
there's some guy there,
link |
and he's having a hell of a time making Intel cry.
link |
Can we pull back historically speaking,
link |
and in terms of the big picture
link |
of cryptocurrency real quick,
link |
and ask the question, what is Cardano?
link |
We started talking about already
link |
the consensus algorithm Cardano takes,
link |
but maybe when you look at the history books,
link |
you know, sort of a hitchhiker's guide to the galaxy,
link |
and Cardano will have one sentence.
link |
What's that one sentence going to be?
link |
And in general, what's like the vision
link |
in the context of the history of cryptocurrency?
link |
You have like this whiteboard overview video
link |
that you talk about the three generations
link |
of cryptocurrency where Cardano is the third.
link |
So that's like five different questions
link |
we've asked in the exact same thing
link |
you can answer however the hell you want.
link |
You know, I always term Cardano as like a FOSS,
link |
a financial operating system,
link |
and nobody likes it,
link |
and everybody picks on me for using that term.
link |
But basically the idea is that, you know,
link |
the world runs on systems,
link |
especially the financial world.
link |
You have the BIS and SWIFT and all this other stuff,
link |
and these protocols allow you to move value around
link |
and represent things like identity,
link |
and allow you to express yourself in some way.
link |
And those protocols for the most part work well
link |
for people in rich countries,
link |
and they don't work so well for people
link |
who aren't in rich countries.
link |
And so the point of what we do,
link |
or at least what I do, and what my company does,
link |
is we think a lot about how do we build
link |
a universal protocol that does all the stuff
link |
the legacy system has,
link |
but just does it better, faster, and cheaper
link |
for everybody in the world?
link |
And everybody has equal access to it, you know?
link |
So it's the people's protocol, you know?
link |
You have a situation where the guy in Senegal
link |
has the same access that I do, or Bill Gates does,
link |
or someone else who's kind of higher
link |
on the spectrum of wealth and power.
link |
And so that is what we seek to achieve,
link |
but then the question is, well, is Cardano the solution?
link |
You know, is that that thing?
link |
And the answer is no,
link |
because you need a lot more evolution.
link |
You need decades of evolution
link |
to kind of work your way there,
link |
and in many ways the work is never quite done,
link |
but it's better than what came before.
link |
Because you have a realization that first,
link |
the control of the system needs to be more balanced
link |
and nuanced, and it needs to be more democratic.
link |
So there's this sustainability component of,
link |
well, who's in charge, and how do you pay for things?
link |
Well, the system can print its own money,
link |
so it always has the ability to have a budget.
link |
Okay, so there's a treasury idea,
link |
and then there's a voting thing.
link |
Well, the same things that allow you to move money around,
link |
allow you to represent votes,
link |
so you can do eVoting with the type of system, okay?
link |
And, you know, if you played NOMIC in the 1980s,
link |
and you're a Peter Super fan or any of these things,
link |
you can build a self evolving system.
link |
You can actually create a game where the rules
link |
can be voted on and changed in the game itself.
link |
Great, okay, so that exists there.
link |
And then you say, okay, well,
link |
but this thing still has to touch the legacy world,
link |
there has to be cash in and cash out,
link |
and these types of things.
link |
So there's this interoperability thing,
link |
that you need a wifi or a Bluetooth moment for the industry,
link |
because nothing understands each other right now.
link |
And all these chains are blind deaf and dumb to each other.
link |
And then there's this thing
link |
that it has to work at a huge scale,
link |
like billions of people.
link |
And we've done that,
link |
but we've done that with large multinational
link |
trillion dollar companies with centralized infrastructure.
link |
We've never really done that with one master protocol
link |
that somehow does it for everyone.
link |
The closest approximation is probably BitTorrent.
link |
And there is, you know, it's a cool protocol,
link |
but it doesn't have all the oomph necessary
link |
to necessary to do something like this.
link |
So Cardano is just our first approximation.
link |
And like any good system,
link |
we wanted it to be self evolving.
link |
So once you get the philosophy out of,
link |
where's the target of what do you want to do?
link |
Then you build a community,
link |
you know, it's over a million people strong,
link |
and that community keeps growing,
link |
and they keep pushing the system
link |
in that particular direction.
link |
And what's nice about it is you,
link |
if you build the right philosophy within the system,
link |
it doesn't need founders.
link |
This is the great lesson of Satoshi.
link |
It doesn't need founders to be able to get there.
link |
So, you know, if you look at the academic side,
link |
that's very decentralized.
link |
We have more than 30 different contributors
link |
for the 105 papers, and that set keeps growing
link |
within the next five years.
link |
It'll probably be two, three, 400 different scientists
link |
from all across the world,
link |
some from Russia and some from India,
link |
some from China and some from Japan
link |
and America and Africa and South America.
link |
And the faces change, the language has changed,
link |
the culture has changed, but the process stays the same.
link |
And that is a permanent organ
link |
within what we have constructed as a system.
link |
It's the same situation entering marketplaces,
link |
like we entered Ethiopia.
link |
What are we doing there?
link |
We have five million people in Ethiopia.
link |
We're getting them digital identity
link |
and we're dragging that digital identity into the system
link |
because that's the most fundamental thing
link |
of a financial operating system.
link |
You need to know who people are
link |
in order to be able to do business with them,
link |
give them credit, be able to give them economic agency
link |
But once they're there, they're gonna grow up
link |
They're gonna deploy applications on that system.
link |
They're gonna build on that system.
link |
We're gonna use it every day for getting a loan
link |
or payments and so forth.
link |
And if they have pain points,
link |
what they're gonna do is evolve that system
link |
to be able to mitigate, manage those particular pain points
link |
to a point where the system is competitive for it.
link |
So my job is to be, we have this tagline
link |
in our company, cascading disruption.
link |
My job is to be the first domino.
link |
Just kind of knock it over and watch the cascade
link |
and it kind of blows and blows and blows up
link |
until eventually it gets to where we need to go.
link |
And what I was trying to think about with Cardano
link |
was how do you build the minimum viable set of tools
link |
and social processes that once we push the domino,
link |
the system will just evolve to a point
link |
where eventually you can grow to fill that need,
link |
not out of charity, but out of self interest.
link |
People want things better, faster, cheaper.
link |
People want to have economic agency,
link |
especially when they lack it.
link |
Nobody wants to grow up in a world where they're unbanked
link |
and they have no access to marketplaces.
link |
They're going to seek it, look at Mpasa.
link |
It's a great example of that, like cell phone minutes.
link |
They're using it as a currency.
link |
So that's where we're at.
link |
And I say a few more years, I think we'll have
link |
that right minimum viable set of dynamics inside the system.
link |
And then it's inevitable, in my view,
link |
that it'll kind of grow and consume and become this concept.
link |
And what's really cool is there's competition
link |
in the systems and concepts.
link |
So China is trying to do the same thing.
link |
They're saying, how do we de dollarize the world
link |
and create a digital yuan?
link |
So they have a very top down notion
link |
of how to apply this technology and bring it in.
link |
And they even have an identity system
link |
they're building in parallel called social credit.
link |
We have an identity system, a teleprism,
link |
that we're putting in.
link |
Ours is bottom up and you own your own identity,
link |
social credit, you have no idea.
link |
You just have a number and some computers giving it to you.
link |
But they're both trying to do the exact same thing.
link |
And it's going to be this clash of cultures at some point
link |
between the open fosters and the top down authoritarian fosters
link |
and probably some Hegelian dialectic actions that happen.
link |
We'll create some sort of somewhat closed,
link |
somewhat authoritarian, libertarian utopia.
link |
Yeah, most likely it would be AI's battling
link |
in the space of fosters.
link |
So I really like this idea of financial operating system,
link |
but the letter F, so financial,
link |
is this just a basic mechanism
link |
with which you can have social interaction there for,
link |
or all kinds of interactions,
link |
therefore have an identity?
link |
Like is F essential to this?
link |
Yeah, because that's how people care.
link |
You need resources to survive and finances
link |
is kind of like this field of managing your resources
link |
in an intelligent way.
link |
And you could call it SOFI too, social finance.
link |
The nomenclature hasn't exactly been settled
link |
for our industry and that's fun.
link |
But basically the concept is that you have something
link |
and you want to be able to store it, transform it,
link |
trade it and use it to survive.
link |
And the question is what rails do you do that on?
link |
Do you do those on centralized controlled rails
link |
where there are these third parties
link |
that are basically able to live off those things,
link |
come very fat and epitistic,
link |
or do you want to do it on rails
link |
where there's no middleman?
link |
You have a direct relationship
link |
with whoever you're doing business
link |
and if you invite more people to the transaction,
link |
they're middleman of value, not necessity.
link |
And that's really the,
link |
I would like to say the resonant of our space,
link |
that the reason we exist is to try to figure out a way
link |
to kill the middleman and try to figure out a way
link |
that we can better quantify value and transform it,
link |
move it, manipulate it.
link |
And in many ways we've actually discovered
link |
some amazing things in the last 10 years as an industry.
link |
Like we've kind of created the financial stem cell.
link |
This idea of a token can now just as well be
link |
a national currency as a CBDC
link |
as it can represent a crypto kitty.
link |
The same architecture can do stuff at the nation scale,
link |
can do stuff for a 12 year old kid in Texas.
link |
It's pretty amazing to see that.
link |
But sort of in that whiteboard presentation,
link |
you gave these three phases
link |
and you're kind of implying that there'll be end phases
link |
to this whole evolution.
link |
And Cardano is just like the cutting edge.
link |
But if you look back to Bitcoin,
link |
how would you compare Cardano versus Bitcoin?
link |
Sort of where we are, how we started and how it's going.
link |
So what I did in that video
link |
and I've done in a lot of media interviews
link |
because I think it really helps people
link |
understand where we're at in the clock
link |
is face things in terms of generations.
link |
And so I said, well, the first generation is Bitcoin.
link |
And really the problem Bitcoin was trying to solve
link |
is saying every time we want to represent or move value,
link |
we need some sort of trusted third party to facilitate that.
link |
So can we build some sort of system
link |
where we can create some notion of value
link |
that can be teleported around the world
link |
and it doesn't require a trusted third party?
link |
That's it. And it's done in a beautiful way
link |
because it didn't try to be anything else.
link |
It just was, you only have Bitcoin,
link |
you can only do one type of thing, you can only push it.
link |
You can do some things on the encumbrances
link |
of like multi sig and other things.
link |
But that's a one trick pony as a system.
link |
And it wasn't really clear
link |
if that was going to work or not for a long time.
link |
It took several years to build up enough network effect
link |
and for Bitcoins to actually become valuable.
link |
And I'd say the inflection point was 2013.
link |
And at that point, it became a billion dollar market cap.
link |
There were like Silicon Valley startups,
link |
real exchanges were forming.
link |
And it got to a point where there was legitimacy
link |
behind the concept and people started getting,
link |
this is a really incredible idea
link |
because I can have a capital controls
link |
with that I can like move $10 billion of something
link |
from one country to another country in five minutes.
link |
It's like, I could never do that before.
link |
And you know, this is incredible.
link |
Okay. The problem is the minute that people validate
link |
the idea, they immediately want something they don't have.
link |
So like the minute Elon can land a rocket,
link |
you know, there's the next big thing, right?
link |
You've landed the Falcon 9, now you're on the Starship.
link |
Similarly, you say, okay, I want programmability
link |
It's kind of like when JavaScript came to the web browser,
link |
you went from these static, perhaps pretty,
link |
but ultimately static non interactive pages
link |
to YouTube and Google and Facebook
link |
and these amazing, rich, incredible experiences
link |
because now you can actually interact with the user.
link |
You can program things, stuff runs on their side,
link |
stuff runs on your side.
link |
It's a beautiful two way relationship.
link |
So that's what Ethereum effectively did.
link |
They bolted a programming language onto a blockchain
link |
and they went from a certain use case
link |
to whatever your imagination can have,
link |
you know, like sunshine and rainbows
link |
and unicorns and these types of things.
link |
So you're saying as Bitcoin is HTML
link |
and Ethereum is JavaScript?
link |
Basically, yeah, it was like when JavaScript came
link |
and with like JavaScript,
link |
it has all kinds of problems and issues.
link |
I wonder who's flash in this analogy.
link |
Well, that's metaphor, but let's not go.
link |
Well, actually there were plenty of active Xs and flashes.
link |
NXT was an example of a fail to start
link |
and BitShares was another example.
link |
There were a lot of people who tried to add some notion
link |
of programmability and or a different view
link |
of how these things should be done
link |
and they were not as competitive.
link |
Ethereum kind of came out at that JavaScript moment.
link |
Okay, the minute you have that,
link |
then suddenly you have ICOs and DeFi and STOs
link |
and NFTs and all these word salads of things
link |
and then people start using to get frustrated.
link |
Why? Because it's too slow, it's too expensive,
link |
it doesn't talk to the things they want it to talk to
link |
and also it gets too big to manage itself.
link |
When you're small, you have founders and foundations
link |
and you have trusted actors and core developers
link |
and you can feed them with pizzas.
link |
You know them, you can meet them,
link |
you can shake their hands at conferences.
link |
When you're a multi billion person system,
link |
you're too large to be able to do that.
link |
For example, we had the Shelley summit last year,
link |
we invited Vint Cerf to come to the summit.
link |
Vint's a brilliant guy and he created the internet
link |
with Bob and the rest of the gang
link |
and back in those days, it was such a simple,
link |
small system that one of their students,
link |
they said, hey, you need to test it,
link |
you created a video game, just kind of test the thing
link |
and you could call the guy on the other side
link |
and say, are you seeing this?
link |
Are you getting the signal?
link |
They used to have an actual address book
link |
for email addresses.
link |
Yeah, so you'd open up the books, look it up
link |
and now look at the internet.
link |
It's like, who's in charge of that?
link |
It's this gargantuan network
link |
and there's no group of people you can bring in
link |
and thus the internet evolves very slowly.
link |
You see, and so that's the problem
link |
is that you have this situation
link |
where you wanna do lots of utility,
link |
you wanna do a lot of things,
link |
you wanna be a financial operating system
link |
and be everything to everyone,
link |
but then your rate of evolution slows down
link |
as your rate of adoption speeds up.
link |
So that's one of the other design goals
link |
of the third generation.
link |
It's not good enough just to do things
link |
better, faster, cheaper and have consistent cost
link |
with your population growing or talk to everything,
link |
You also need a system that can govern itself
link |
at a scale of millions to billions of people
link |
who have divergent interest.
link |
Some cases, ice pick and eye divergent interest.
link |
They really hate each other and they don't get along.
link |
And so that's what we termed
link |
a third generation cryptocurrency
link |
and there's a lot of people attempting to compete
link |
You know, there's Taizos and Algran, ICP and Polkadot
link |
and so forth, and each and every one of them
link |
kind of brings a different blend of things that they value.
link |
So it's not completely equal between scalability,
link |
interoperability and sustainability.
link |
Some people were very focused on high throughput,
link |
lots of transactions per second.
link |
Other people very focused on governance,
link |
like Taizos is like the governance chain
link |
and they were one of the first to do a self amending ledger.
link |
And other people are like Aeon or Polkadot,
link |
they're really thinking carefully about
link |
how do we build a nice interoperable ecosystem?
link |
With Cardano, we tried to actually tackle
link |
all three at the same time,
link |
which was one of the reasons
link |
why we were a little slower out of the gate.
link |
We had to write a lot more protocols,
link |
but we think we've kind of come up
link |
with a beautiful interlocking design for all of them.
link |
And again, the point is not to get it perfect,
link |
but rather get those just right set of evolutionary factors
link |
that when you click the domino,
link |
it just self evolves into what you need it to get to.
link |
Allow me to stretch the metaphor further.
link |
If Bitcoin is HTML, there's HTML5,
link |
if Ethereum is JavaScript,
link |
JavaScript with V8 has become quite fast,
link |
quite runs much of the internet.
link |
So the argument could be that eventually
link |
everything will be JavaScript,
link |
or maybe you could say eventually everything would be HTML
link |
and it'd just be a bunch of different tools
link |
that generate that HTML.
link |
So is it possible that just like we were so,
link |
we eventually return to generation one, Bitcoin,
link |
or we return to generation two, Ethereum,
link |
at the end of this journey?
link |
You know, the problem is your tail
link |
is wagging the dog there.
link |
You have a situation where you're so focused
link |
on the technology that you're failing to understand
link |
that there's still Daisy here, you still have the user.
link |
And where's the app store?
link |
Where's the one click install?
link |
Where's the use and utility?
link |
You know, all these layer two protocols
link |
and these DeFi applications in five years
link |
that are completely protocol and blockchain agnostic.
link |
Because at the end of the day
link |
they care about liquidity, operating cost,
link |
and user experience.
link |
It's so preposterous and absurd for somebody to say,
link |
oh well, I'm gonna go build my application,
link |
get on the Apple store,
link |
and I'm gonna use Amazon as my web host.
link |
And no matter what happens, I will always use Amazon,
link |
even if the operating cost is crazy.
link |
And so we're just in a unique period of history
link |
where there's a network effect
link |
around some initial infrastructure
link |
and people tend to be building around that.
link |
But every single one of the top DeFi providers
link |
are, if they're getting successful
link |
into a certain network effect,
link |
they're having the multi chain conversation.
link |
So I don't really believe in a winner takes all,
link |
a maximless view of well, there's gonna be some protocol
link |
that becomes the God protocol.
link |
First, because they evolved too quickly.
link |
Second, the incentives aren't aligned for that.
link |
TCPIP didn't have a token connected to it.
link |
There was no financial incentive
link |
where if TCPIP got adopted over something else,
link |
they would make some big company crazy amounts of money.
link |
It was a useful piece of infrastructure.
link |
So I think that the third generation
link |
is gonna be as defined by the social components
link |
and the usability components
link |
as it is by the technological capabilities of the system.
link |
Really what these technological capabilities gave you
link |
was the ability to demonstrate a proof of concept
link |
and say these things are possible.
link |
Kind of like Xerox PARC, when Steve and Bill came in,
link |
they said, wow, you have networked computers,
link |
object oriented programming and a GUI.
link |
And this is like, what, was it 70s?
link |
It's like, wow, it's incredible.
link |
But none of that was an actual product.
link |
That wasn't a Macintosh.
link |
But it was enough to get the idea
link |
and then it was a race to how do we productize
link |
something like that.
link |
And in that case, it actually took several decades
link |
to roll out that vision that those guys had.
link |
And I think that's what Bitcoin and Ethereum did.
link |
But what's unique about this is normally you throw away
link |
the prior experiments.
link |
With these things, these are self evolving systems.
link |
So it's entirely possible to, Joe Rogan quote,
link |
to evolve Bitcoin to a point where it could become
link |
a third generation system as desired
link |
as some amalgamation of layer one and layer two protocols.
link |
And it's the same for Ethereum.
link |
In fact, Vitalik is throwing away Ethereum
link |
and replacing with Ethereum too.
link |
Because he recognizes he needs to upgrade
link |
and evolve the system.
link |
And that's what makes it fun
link |
because the techniques and methodologies
link |
that they've chosen to evolve and upgrade this system
link |
are distinctly different from the ones that we've chosen.
link |
And we have no idea which one's actually going to win.
link |
But we learn from each other
link |
and we co evolve from each other.
link |
So you're running like all these experiments in real time
link |
in a giant marketplace.
link |
And maybe they'll consolidate,
link |
maybe they'll stay divergent.
link |
I mean, look at big tech.
link |
You have Google, Apple, Microsoft, Facebook,
link |
they all coexist and they're a trillion dollar companies.
link |
Some cases with TCP, it consolidates to one standard.
link |
That's what we end up using.
link |
So what's your intuition with Cardano having the proof of stake
link |
and then eventually smart contracts
link |
versus the Bitcoin with layer two technologies,
link |
this kind of evolving creature.
link |
Again, you said you can't really predict the future,
link |
but what's your intuition?
link |
Why one might be more successful than the other?
link |
So the problem with Bitcoin is it is so slow.
link |
It's like the mainframe programming of the past.
link |
And it's the only reason it's still around
link |
is because there was so much invested in keeping it around
link |
that we just kind of have to leave it there
link |
and one day Cobol will die, you know?
link |
It's a, it's, it's,
link |
there's nothing about it from a collection of USPs
link |
that's particularly desirable.
link |
You have extremely long settlement time.
link |
You have extremely low programmability.
link |
It is not aware of any other system.
link |
There's no native way of issuing an asset in that system.
link |
You can't even do a poll transaction.
link |
You can't do anything that's interesting or unique there.
link |
And yeah, all due respect.
link |
It's, you know, mafia, all due respect.
link |
Oh, you got some problems.
link |
You need to lose the weight.
link |
You come to me on the day of my daughter's wedding.
link |
So, you know, all due respect to the Bitcoin people.
link |
It's like an amazing, incredible first generation thing.
link |
And it really, we're all here because of Bitcoin,
link |
but the problem is you have to upgrade the damn thing.
link |
You know, just because you were a high school football star
link |
doesn't mean that 30 years later,
link |
you're still a high school football star in the same shape.
link |
You got the beer belly, you're old,
link |
you're not doing this thing again.
link |
That's what Bitcoin has to do.
link |
There's fundamental improvements
link |
that I think Bitcoin can make at the protocol level
link |
that would actually make it an incredibly competitive system.
link |
Like if they wanted to keep Nakamoto consensus,
link |
proof of work, there's ways to enhance proof of work.
link |
I mean, Mingen Seer did this with Bitcoin NG,
link |
Promotivus Wanus did this with Prism,
link |
make it 10,000 times faster
link |
and you don't compromise the fundamental security assumptions
link |
that the system has.
link |
You can add programmability to it.
link |
Blockstream created a language called simplicity.
link |
And so there's actual ways to extend,
link |
and we did this with Cardano with the extended UTXO model,
link |
there's ways to extend what Bitcoin has,
link |
keep the philosophy, the accounting,
link |
the way of thinking about transactions,
link |
but then suddenly you can now do DeFi and other things.
link |
But what they've done is said,
link |
we will not evolve the base layer at all
link |
and we're just gonna build all this layer two stuff,
link |
which is usually highly fragile and centralized
link |
and requires enormous effort
link |
at the base level to do anything.
link |
There's, it's not a coincidence
link |
Vitalik started as a color coins guy
link |
and a master coin guy hanging out in those circles.
link |
He was trying to innovate and do things in Bitcoin
link |
and it was so hard and difficult
link |
that he started diverging and going and doing things
link |
in a different system entirely.
link |
You know, I knew the master coin guys,
link |
Jared and all these people, they were maximalists.
link |
They really wanted to build something cool
link |
and exciting for Bitcoin and anything they did,
link |
the developers would attack them.
link |
They say, oh, you're misusing op return.
link |
You're doing this at, it was a holy war
link |
anytime you wanted to evolve.
link |
So I think it's its own worst enemy.
link |
It has the network effect, it has the brand name,
link |
it has the regulatory approval,
link |
but there's no way to change the system,
link |
even correcting obvious downsides in that system.
link |
Now, what's really cool is Ethereum doesn't suffer
link |
from that problem.
link |
It's getting to a point where it has
link |
a similar network effect to Bitcoin,
link |
but the community there is completely different in culture.
link |
They love evolving, they love upgrading,
link |
sometimes a little too much.
link |
And so that means that if you look at the trajectory
link |
of things, if I had to bet just those two systems,
link |
Bitcoin or Ethereum, I would say nine times out of 10,
link |
Ethereum is going to win the fight against Bitcoin
link |
if it was the only competitor.
link |
But obviously we're here
link |
and a lot of other people are here,
link |
so there's different things going on.
link |
So it's a much more complex game.
link |
But I think that's always the key,
link |
zooming out a little bit.
link |
Set the technology aside
link |
and the word salad of cryptography aside,
link |
because it's too much.
link |
We have to always do is say,
link |
what incentive does the system have to evolve?
link |
And when you look at things like Android and the App Store
link |
and these analogous platforms,
link |
you say, ah, the evolution is user driven
link |
and there's a financial incentive
link |
for the user to participate.
link |
So if I had to look at the trajectory of this thing,
link |
come back 10 years later,
link |
probably gonna have millions of applications
link |
and lots of stuff going on
link |
because that's the way the system was constructed.
link |
Okay, it makes sense.
link |
When you look at Bitcoin,
link |
you say what is the incentive to evolve the system?
link |
What is the incentive for the system
link |
to get more competitive?
link |
In fact, it's the opposite.
link |
They've turned it into a religion.
link |
I was in Miami at this Bitcoin conference there.
link |
I had a toilet paper roll thrown at me
link |
that had shit coin written on it.
link |
You have Max Kaiser out on the stage,
link |
doing his best Rick James impression, you know.
link |
We'll see the guy that did the FE on.
link |
Yes, yes, yes, and so you're watching this stuff
link |
and you say, okay, first,
link |
why would anybody want to join that?
link |
And then second, where is the conversation
link |
about how do we achieve something?
link |
I started with Cardano the end in mind.
link |
I said, we really want to sit down
link |
and build this financial operating system.
link |
And the definition of success is
link |
the poorest person in the world
link |
has access the same system
link |
as the richest person in the world.
link |
And they both get treated fairly.
link |
We've never had that happen before.
link |
Okay, that's something.
link |
You can agree with it, disagree with it,
link |
say it's boiling the ocean, it's impossible.
link |
At least I have something.
link |
I can't for the life of me understand
link |
what the hell is the point of Bitcoin?
link |
When I joined the Bitcoin space way back in the day,
link |
it was, hey, we hate the dollar and, you know,
link |
hey, we like gold a lot.
link |
Let's create digital gold.
link |
Let's build a payment system.
link |
And then it just kind of went all these different directions
link |
and nobody can actually tell you what Bitcoin is for.
link |
It's a store of value, okay?
link |
You know, if there's some proof of work thing
link |
where maybe you're like incentivizing
link |
that alternative energy to be pretty, I don't know.
link |
It's like, nobody really knows the philosophy.
link |
There's no direction.
link |
And they say, but don't worry, just buy and hold
link |
and everything will sort its way out.
link |
I believe it's hoddle.
link |
What about the idea of digital gold?
link |
So trying to replace that particular physical material
link |
that is gold, the transfer into the digital space.
link |
Okay, let's do that then.
link |
And just say that's all it does.
link |
Then why are we doing lightning?
link |
Why are we doing any of these other things?
link |
You don't really need with, you know, a commodity,
link |
a digital commodity, high throughput.
link |
You can have slow settlement.
link |
You can have high transaction fees,
link |
all these types of things.
link |
And, you know, that's fine.
link |
Okay, that's something.
link |
Well, the idea is to try to come up with technology
link |
like the Lightning Network that could have something
link |
like gold, but then still build an economy around it.
link |
Something with high throughput transactions.
link |
And have we ever built a successful banking credit system
link |
It never works because there's too much volatility
link |
in the underlying asset.
link |
Would you take a gold denominated loan for something?
link |
And so he says, okay, I'll give you five bars of gold
link |
to go buy this car and pay me back five and a half bars
link |
Nobody would know in five years
link |
where they come out in that kind of a range.
link |
The idea is that the gold is used
link |
for the settlement of transactions.
link |
And then you're operating, the actual economy
link |
is operating outside of gold.
link |
And then you kind of connect back to gold for that.
link |
So you have to go back to the gold reserve.
link |
And we tried that for a long time.
link |
It didn't really work in a modern global economy.
link |
We had the Brent Woods Agreement,
link |
all these other things.
link |
And so I understand what you're saying.
link |
And maybe there's some merit to that.
link |
But if that was really in earnest where they want to go,
link |
then the conversation should be about,
link |
well, how do we make it easy for later two protocols
link |
to interact with Bitcoin?
link |
So why is simplicity not built into it?
link |
Why is it taking so long to do snorkegs?
link |
Why is it taking so long to do all these obvious upgrades
link |
which are cryptographically low danger, also NEPA POWs.
link |
Not interactive proofs of proof of work.
link |
There's no cost to doing that.
link |
It's just a property of proof of work
link |
where certain puzzles are more special than other puzzles.
link |
And by noticing that, you can create these beautiful proofs
link |
that allow you to have side chains and like clients.
link |
It's not compromising security to system.
link |
It's just something you get for free with proof of work.
link |
Those came out in 2016.
link |
There's derivative work, fly client floating around.
link |
What the hell is it?
link |
This is the frustration that I have is like,
link |
if you really are serious about this whole lightning
link |
and gold economy thing, I love choice.
link |
I'm a libertarian by nature.
link |
I love competition.
link |
And I read all those books.
link |
I read Louis von Mises's work and Murray Rothbard's works.
link |
And I love what Hayek had to say about private currencies.
link |
But then you have to have some focus and commitment
link |
And the excuse they use is, well, no, we don't
link |
because we're decentralized.
link |
And because we're decentralized, we don't need that.
link |
As if there's some sort of guiding swarm intelligence
link |
that will naturally push the system
link |
in that particular direction.
link |
But then you ask, well, how do people
link |
measure the success of Bitcoin?
link |
Is it the fact that they've actually
link |
achieved lots of transactions and lots
link |
of actual economic activity and lots of businesses
link |
accepting Bitcoin is the price?
link |
That's what they do.
link |
And that's the only thing they pay attention.
link |
That's why this is the most attended Bitcoin conference
link |
Not because somehow Bitcoin got so much more adoption.
link |
It's because this is the highest price point
link |
Bitcoin has ever been this year, over 30,000.
link |
So first of all, let me state that Charles, for the most part,
link |
is purely objective.
link |
The bias that comes in for the record,
link |
I want to say, that I have heard because you mentioned
link |
the mafia, that you prefer good fellows over the godfather.
link |
So a man who prefers good fellows over godfather,
link |
you take it for that opinion for what it is.
link |
I actually have to think about that one for quite a bit.
link |
Joe Pesci was so good at that.
link |
I also love casino and those big glasses on the denier.
link |
We'll share on stone.
link |
But we could talk about that for hours.
link |
But let me ask you about the Bitcoin conference
link |
because it is kind of, I would say, an important moment
link |
It was quite exciting in terms of size and kind
link |
of turmoil and all those kinds of things.
link |
And you were there.
link |
Hot and humaned Miami?
link |
I believe it's the way you introduced it.
link |
So what do you make of the community of Bitcoin
link |
or that particular event in human history?
link |
What makes me sad is I remember the old Bitcoin community.
link |
And I've seen what it's become.
link |
And the old community was really fun,
link |
like the San Jose conference in 2013
link |
or subsequent conferences.
link |
There was just a lot of people.
link |
They had no money.
link |
And they just really love this idea of decentralized money.
link |
They love this idea of decentralization in particular.
link |
And you could strike up a conversation with everyone.
link |
There was no ego at all.
link |
But what was really fun is you could really
link |
get intimate friendships and relationships
link |
and great conversations with people there.
link |
It's kind of like the early days of AI.
link |
They all met in Dartmouth and all these other places.
link |
There was no egos.
link |
Everybody was just trying to do some really cool stuff.
link |
Now, just like those early days, there
link |
was an overestimate of how robust the solutions would be.
link |
So we believed, oh, yeah, 10 years.
link |
We're going to rule the whole world.
link |
Didn't exactly happen.
link |
On the other hand, Bitcoin grew from nothing in just 11 years
link |
to, I'm in Mongolia riding camels.
link |
And the camel herder has Bitcoin in the desert.
link |
So that's telling you that's a pretty pervasive technology
link |
if you have that level of adoption that quickly.
link |
When I went to Miami, it was unrecognizable.
link |
Everything was so commercial.
link |
Half of the vendors at the conference
link |
were like watches that cost half a million dollars
link |
and they were covered in diamonds.
link |
So when you see that kind of materialism
link |
leak its way in, it's first is repulsive.
link |
The other thing was there was no,
link |
like I remember one of the first conferences,
link |
Mo Levin's conference in January of 2014,
link |
the North American Bitcoin Conference,
link |
ironically in Miami.
link |
There was a Bitcoin Help Center at Booth.
link |
Dima ran it and a few of the other Bitcoin OGs ran it.
link |
The core developers actually came over,
link |
like Jeff and others, who were there and sat at the booth.
link |
And anybody come up, ask a question.
link |
Anything you want to ask about Bitcoin.
link |
It was like, that was the culture.
link |
Just help people welcome it.
link |
There was no help booth there.
link |
There was no notion of that.
link |
There were six hour lines and superstars and things like that.
link |
And again, again, it was always the same thing.
link |
Look how much money all these people have made.
link |
And the whole point of Bitcoin was to redefine
link |
the notion of money, redefine the notion of value.
link |
You know, these types of things.
link |
So it just, I'm no longer part of that.
link |
And it made me sad because I really enjoyed being part of it.
link |
How I got started was a Bitcoin education project.
link |
I did a class on Udemy.
link |
I gave it away for free.
link |
I had 80,000 students and they would email me.
link |
I got 5,000 emails before I stopped answering them.
link |
And everyone come in and ask me some question about something,
link |
sometimes arcane, sometimes trivial.
link |
And I take the time to sit down and answer the question
link |
or forward the email to somebody I knew
link |
who could answer that particular type of question.
link |
And there were some amazing people in the early days,
link |
like Mike Hearn and Gavin and others.
link |
And they were just super committed.
link |
And they, Mike's case, he knew Satoshi.
link |
He actually emailed them back and forth.
link |
Because he was around 2009, 2010.
link |
He did the Bitcoin Jaffa client.
link |
And Satoshi was all excited.
link |
He said, oh, wow, Bitcoin can come to a cell phone.
link |
This is really cool and exciting.
link |
And then what happened?
link |
Mike left Bitcoin in 2013 over the whole big block debate
link |
They just treated him like dirt.
link |
Like he was subhuman or something.
link |
The culture has changed a lot.
link |
And if they like it, it's good for them.
link |
They can enjoy their religion, but it's not for me.
link |
And where I like being is, like I had a guy who used to work
link |
for me, Alex Cherpanoi.
link |
And he created this beautiful project called Ergo.
link |
To me, that is the spiritual successor to Bitcoin.
link |
Ergo is really special because it has the same culture.
link |
It has the same mentality.
link |
And the technology is kind of like a natural evolution
link |
of what you would do if you knew about Bitcoin
link |
and you wanted to build the next big thing.
link |
So it's still a proof of work system.
link |
It's still a UTXO system.
link |
But he added UTXO with some smart contracts.
link |
It's this Sigma protocol idea.
link |
On the proof of work side, Satoshi had this one CPU,
link |
So Alex tried to create non outsourcible puzzles
link |
to make it impossible to have mining pools.
link |
And there's all these other beautiful little things.
link |
And he's this brilliant Russian programmer.
link |
And he's surrounded himself with all these other brilliant
link |
He's like, he has negative ego.
link |
When you put him with a person with ego,
link |
your ego goes down.
link |
And everything about Alex is always like, how do I solve this?
link |
And he gets legitimately excited when
link |
he meets somebody that he can collaborate with or learn from.
link |
That's where Bitcoin was in the beginning.
link |
Everybody set their egos aside, whether it
link |
was Hal Finney or whatever.
link |
And they would just say, how can I help?
link |
And it was all about coming up with some cool new thing
link |
or solving some cool new problem.
link |
I don't see any of that in Bitcoin today.
link |
So quite a few people are excited about Ergo and excited
link |
about the fact that you kind of appreciate Alex and Ergo.
link |
Do you see Cardano potentially utilizing the proof of work
link |
mechanism from Ergo as part of this pool
link |
for the consensus mechanism?
link |
I mean, anything's possible.
link |
And there's a lot of evolution Ergo has to go through.
link |
And Ergo was kind of like, when the Xbox 360 first came out,
link |
while they were prototyping it, Microsoft
link |
needed a development environment.
link |
They ironically purchased a lot of Apple computers
link |
to do that, because Apple was moving away from the Power
link |
And Microsoft was moving towards the Power PC,
link |
just this weird intersection of history.
link |
So at that time, the largest order of Mac computers
link |
made was done by Microsoft.
link |
And they were using it for Xbox stuff.
link |
So Ergo, we viewed the same way.
link |
So we said, well, we have this extended UTXO model.
link |
The only thing that's as sufficiently close to it
link |
where we can beta test contracts is actually with Ergo.
link |
And Alex just was a little faster in getting certain things
link |
out, because we were doing things in a slightly more
link |
rigorous way and slightly more expressive way.
link |
So we actually tested a stablecoin and Oracle and other things
link |
And it has just incredible community.
link |
And when we said, hey, we're coming here to work and build
link |
that, oh, yeah, we love work with you guys.
link |
The other thing is Alex used to work for us.
link |
And he had this lovely project called ScoreX.
link |
And it was all about a pedagogical framework
link |
for building blockchains.
link |
And if you want to do prototyping or academic research,
link |
It was super modular.
link |
And it separated the consensus network and transaction layer
link |
from each other in just the right way
link |
so that you can make it modular and mix and mix things.
link |
So you can put secure academia in or maybe a different network
link |
layer and a different consensus protocol like proof of work
link |
to another proof of work and so forth.
link |
So we loved having that kind of IP sitting around,
link |
because it gave us the ability to kind of play around
link |
with ideas in a matter of weeks instead of months or years.
link |
And then he just took that concept and he gave it away.
link |
The Wave protocol was built on it.
link |
That was Sasha Ivanov.
link |
And I think there's two or three other cryptocurrencies that
link |
were launched from ScoreX.
link |
And then Alex took that and built Ergo from it.
link |
So there was a nice intersection where
link |
there was overlapping technology with Ergo with our technology.
link |
And the other thing was that the community was so open and friendly.
link |
It was just a no brainer.
link |
Just go in and start building some things there.
link |
Now, in terms of evolving ideas, the whole Sigma protocol idea
link |
is very different and it's very interesting.
link |
And there's a guy at a Boston University.
link |
His name will come to me in a segment who came up with this stuff.
link |
And I think there's some merit there,
link |
especially as we start moving closer
link |
to this idea of blockchains being used to validate
link |
proofs instead of running computations.
link |
What's the Sigma protocol, brother?
link |
So it's just a way of expressing scripts.
link |
And basically, you get these concise representations of proofs.
link |
And then you can say, OK, the script is correct,
link |
but you don't have to run the whole program.
link |
So I'm not doing the topic justice.
link |
There's a lot more to it.
link |
But that's the basic concept.
link |
And in a Redeemer Validator model,
link |
you need stuff like that because as your model gets more complex
link |
and a lot more things happen, you
link |
don't want to have a situation where I have to run, replay
link |
a huge amount of the UTXO graph to be able to get to a point where
link |
I have the state of the system.
link |
You need some mathematical artifact that
link |
gives you the state of the system quickly.
link |
And then you say, OK, I now know what computation thread I
link |
need to run to get enough to be able to redeem this transaction.
link |
So he just found a more compressed representation of it.
link |
And the math doesn't matter.
link |
What matters is there's a whole beautiful field that
link |
thinks about this type of stuff.
link |
And it was never once linked before into our industry.
link |
The brilliance of Alex was to actually realize
link |
you could do that and pull those things together.
link |
And it may actually have some merit.
link |
But by no means is the only guy that does this stuff.
link |
There's actually other approaches in verified computing
link |
that have explored that.
link |
Like my favorite came out of Microsoft Research
link |
is a project called Pinocchio.
link |
And there was a follow up called Gepetto.
link |
And the basic idea was that it's fortuitous
link |
that you have these computer science problems like hashing
link |
where you can do all this computation.
link |
And once you've done all of it, you
link |
found this magic number that you can verify
link |
that the computation was done correctly.
link |
So proof of work works this way.
link |
Hard to do the proof of work.
link |
Easy to check the proof of work.
link |
Cryptography also works this way.
link |
You have some trap door where you can verify something's
link |
But to get that thing done, if you're doing it brute force,
link |
it takes an enormous amount of computation.
link |
Well, not all problems are like this.
link |
Like protein folding.
link |
To verify the protein is folded correctly,
link |
you have to fold the protein.
link |
You have to redo the work.
link |
But what if, for arbitrary computation,
link |
you could take a problem and then you
link |
could generate a proof that you've done that computation
link |
correctly and the proof validates in logarithmic time
link |
Wow, that's incredible, right?
link |
Well, Microsoft actually wrote a paper on how to do that.
link |
It's called Pinocchio.
link |
So that's another example of these types of things,
link |
these rollups of things where instead of doing
link |
the computation on chain or trying
link |
to create some sort of replicated machine that
link |
does all this stuff, you instead just say, OK,
link |
only thing I'm going to use the blockchain for
link |
is to check your proof.
link |
But I'm going to turn it into a distributed computing
link |
problem and any person in the world
link |
can do the problem on any server, untrusted server even.
link |
Because you don't have to trust the output.
link |
You trust the proof.
link |
And the proof is deterministic.
link |
It tells you these things.
link |
So whether you're using zero knowledge or sigma protocols
link |
or some other mechanism, it's moving you
link |
in that particular direction to turn it from a replicated
link |
to a distributed problem and go from I'm doing the work
link |
to I'm checking that the work was done correctly.
link |
That's fascinating.
link |
And all of a sudden, we're back to the P equals NP thing
link |
where for many very interesting problems,
link |
the checking is efficient, is much more efficient
link |
And also, do you want complete determinism
link |
or is it probabilistic?
link |
Because if you relax that requirement a little bit,
link |
then suddenly, actually, you have a broader class of things
link |
you can construct this stuff for.
link |
You mentioned UTXO.
link |
There's a paper titled The Extended UTXO Model.
link |
It writes in the introduction, Bitcoin and Ethereum,
link |
hosting the two currently most valuable
link |
and popular cryptocurrencies,
link |
used two rather different ledger models known
link |
as the UTXO model and the account model respectively.
link |
At the same time, these two public blockchains
link |
differ strongly in the expressiveness
link |
of the smart contracts that they support.
link |
This is no coincidence.
link |
Ethereum chose the account model explicitly
link |
to facilitate more expressive smart contracts.
link |
On the other hand, Bitcoin chose UTXO
link |
also for good reasons, including that its semantic model
link |
stays simple in a complex, concurrent,
link |
and distributed computing environment.
link |
This raises the question of whether it is possible
link |
to have expressive smart contracts
link |
while keeping the semantic simplicity of the UTXO model.
link |
So what's the fuck that means?
link |
What is the account model?
link |
And what is the idea of the extended UTXO model?
link |
So I guess the easiest way of visualizing it
link |
is that UTXO is kind of like cash register accounting.
link |
So let's assume you don't have credit cards,
link |
you just have cash.
link |
And so when you go and buy some milk and potatoes
link |
or whatever and you go to the cashier,
link |
you pull out your $20 bill, you give it to them,
link |
and let's say that comes up to $17.50,
link |
they have to make change.
link |
So you don't tear your $20 bill and cut a piece of it off
link |
and say, here's part of my $20.
link |
You give them the entire $20 bill,
link |
and then they give you something back.
link |
And the things that they give you back
link |
are also atomic units.
link |
They don't cut those things up.
link |
So that's kind of what UTXO is all about in a nutshell,
link |
is that there's inputs and outputs.
link |
Your inputs to that $20, and your outputs
link |
will be the $17.50 that goes to them,
link |
and then the remaining change that goes back to you.
link |
The problem with this particular model
link |
is that the way it was implemented with Bitcoin,
link |
there was no notion of how do we run complex predicates,
link |
complex contracts on this thing, where instead of just saying,
link |
OK, I'm just going to push value to you,
link |
I want to put lots of terms and conditions
link |
into the movement of that value.
link |
Like, you only get this if I mow your lawn on Tuesday,
link |
or you only get this if some event happens,
link |
like the Broncos win the Super Bowl or something like that.
link |
So you need some notion of programmability with it.
link |
So a lot of people are trying to figure out in the early days
link |
of Bitcoin, how could we improve
link |
the expressiveness of the system?
link |
And one of the ways of doing it is you
link |
can go to a different accounting model, bank style accounting.
link |
So in a bank ledger, every time you do a withdrawal or deposit,
link |
it's a mutable system.
link |
With the cash register accounting,
link |
you don't tear up the bills, but the bank.
link |
You can deduct or add a ledger all the time.
link |
So Ethereum kind of works in that bank accounting system,
link |
where you just send messages, you send transactions,
link |
and you're going up or down.
link |
And so you can trigger programs the same way.
link |
So what we did is we said, OK, if you take the UTXO model,
link |
and you have some data to it, and instead of saying
link |
it's just a digital signature, but it's in a script,
link |
you can basically create something that's still
link |
the same as cash register.
link |
But now you have programmability,
link |
and the big difference is local versus global.
link |
So in the case of UTXO, your scripts are your concerns.
link |
So whatever is going on in that cash register
link |
has no bearing or impact on the other cash registers.
link |
But when you look at bank accounting,
link |
you have to know the state of the entire banking world
link |
to be able to make that work.
link |
Because if that transaction is inbound,
link |
that wire transfer is inbound, you
link |
have to know those funds are actually there.
link |
That thing is actually happening.
link |
So when you have a global state for a program,
link |
it's like you can do a lot more with it,
link |
but it's a lot more dangerous.
link |
And so you have to build all these mechanisms
link |
to try to protect yourself from it.
link |
So what we did is we said, OK, add data, add a programmability,
link |
and you're kind of in this nice Goldilocks zone
link |
between what Ethereum did with an account style model
link |
and a global state system, and you're not as restrictive
link |
as Bitcoin, but you're still an attorney in complete world.
link |
You can still run all kinds of things.
link |
And then any standard mathematician, they'll say, OK,
link |
well, is it isomorphic?
link |
Is there a mapping between this?
link |
What type of function can I actually
link |
take something expressed in one structure
link |
and transmit it to the other structure
link |
and properties are preserved?
link |
So we wrote a paper.
link |
It's called Clymeric Ledgers, where
link |
we actually show that UTXO, extended UTXO, and accounts
link |
are somewhat similar in that you could map things that happen
link |
in one system to the other system.
link |
The properties are preserved between the two.
link |
So in practice, what's nice about extended UTXO
link |
is that you can put infrastructure on top of it
link |
to make the development experience relatively similar
link |
to the development experience of what you would do with Ethereum,
link |
but you don't have to worry about this global state.
link |
So when you talk about sharding, it's
link |
a lot easier to do that.
link |
It's a lot more conceivable to that.
link |
And also, you get determinism in the system.
link |
So when I have a Plutus smart contract,
link |
whatever I run locally is exactly what
link |
I expect to run in the system.
link |
When you have a concept of this mutable global state
link |
in the system, whatever you run locally
link |
is not necessarily what you're going to get when you actually
link |
push it into the system.
link |
So you may misprice things and the contract will fail.
link |
It doesn't ever happen in the Plutus world.
link |
So you get a lot of advantages with this particular model.
link |
The downside is that it's a little bit less
link |
expressive on the boundaries and a little bit harder
link |
to write certain types of software with it.
link |
But again, how you resolve that is
link |
you kind of build higher level languages and other such things
link |
that compensate for these types of things and design patterns
link |
that compensate for these types of things.
link |
The other advantage that we have that's really fun and exciting
link |
is that Bitcoin lives in this model
link |
and there are other UTXO based systems.
link |
And so they're all talking about smart contracts as well.
link |
And they would like to continue working in the UTXO model.
link |
So if you're a Bitcoin contract developer or other things,
link |
there's actually already a group of people
link |
that understand this very well.
link |
And that's still a fairly large part of the mindshare
link |
of the entire space.
link |
So there are no silver bullets.
link |
And anytime you pick a particular model,
link |
there's an upside and a downside.
link |
And there's different ways of doing things
link |
from cash register accounting or bank accounting.
link |
You can even do different accounting models.
link |
But we felt this was kind of the best first step
link |
to go into because we started with something very familiar
link |
that had a long history behind it.
link |
And it maps very beautifully
link |
to functional programming principles,
link |
this concept of immutability and these things
link |
and much more strict management of state
link |
and no notion of having this global concept
link |
that you have to kind of manage
link |
as you break up the system.
link |
Now in practice, what does this mean to the developer?
link |
And when they actually start real writing an application,
link |
not too much, there's gonna be a little bit of retooling
link |
and some new patterns you have to learn.
link |
But in practice, you can still do the same things.
link |
You can implement a uniswaptile style thing.
link |
In fact, we even wrote that code
link |
with the Plutus Pioneers program.
link |
So you can go to YouTube and watch a lecture
link |
and see how that's done.
link |
You can do a stable coin, you can do an Oracle,
link |
you can do interactive contracts.
link |
It's just, it has to be done a little differently
link |
than the way that you would do it in an account style model.
link |
Just like you could write an application Java,
link |
you can write an application in Haskell,
link |
they both can do the same thing,
link |
but the code is gonna look different.
link |
And the kind of the conical way of looking at things
link |
So in terms of Oracle, Oracle networks,
link |
what do you have thoughts about chain link
link |
and external off chain data sources?
link |
And everything we've been talking about now
link |
with the external, with the extended UTXO model.
link |
Yeah, I mean, trying to do smart contracts without oracles
link |
like trying to have sex with your pants on.
link |
I mean, it's not really fun.
link |
It's not exactly the best of things.
link |
That's the way I've been doing it all these years.
link |
For any other person Lex, I wouldn't believe you,
link |
That's why I'm single.
link |
This makes so much sense though.
link |
Okay, so anyway, you need the outside world
link |
to be ejected into your system, right?
link |
I'm trying to keep a straight face.
link |
You need the outside world to make your system useful.
link |
It's like all the kinds of things that you care to do
link |
with a smart contract usually involve human beings
link |
and information streams aggregating and doing something.
link |
So the Oracle is a super important component in practice
link |
for any smart contract involving any notion of value.
link |
You need to know when things have happened,
link |
how they happen, who won, who lost, et cetera, et cetera.
link |
So first, where do you get the data from?
link |
So what's the aggregator?
link |
This is why we love our relationship with Wolfram,
link |
because if one of the things you'll know about Wolfram
link |
as you get to know the guy is he's a data pack rat.
link |
Every email, every communication,
link |
every interaction he's archived somewhere.
link |
Like last time I talked to him,
link |
oh yeah, I have emails from you from 2012.
link |
It's like, you still have those?
link |
Yeah, every keystroke is written down
link |
and stored somewhere.
link |
So if you use Wolfram Alpha,
link |
it's a simulacrum of the way his mind thinks.
link |
And so you can query the system and be like,
link |
oh, how many shipwrecks have happened in Florida
link |
between 1950 and 2000 that have resulted
link |
in more than a billion dollars of cargo loss
link |
and at least one fatality?
link |
And it'll return an answer.
link |
I mean, it has this incredible source of data
link |
that's computable.
link |
For people who don't know,
link |
Wolfram Alpha is more than just the thing
link |
that assists you with your math homework in high school.
link |
It's actually this giant network of data
link |
of like weather data, of location data, just statistics,
link |
all kinds of, it's doing the aggregation
link |
in a way that you can query across data sets.
link |
And it's exactly this kind of idea.
link |
It basically represents the very kind of thing
link |
you would hope to be able to query off chain
link |
as part of the smart contracts.
link |
Right, but the only downside is it's centralized.
link |
And that's always the Achilles Heel of Wolfram
link |
is he tends to like proprietary things
link |
and he tends to like centralizing things
link |
and mostly because he likes running the things.
link |
And then everybody can have an opinion on that.
link |
The thing though is that after you've done aggregation,
link |
there's a question of injection.
link |
How do you get that data into the system?
link |
And you can do that in a very naive way
link |
where you can say, oh, I'm just gonna attach a public key
link |
to it and it'll sign for that data feed, that injection.
link |
And then somehow I'll just trust it as it is.
link |
Or you could try to make it more complicated.
link |
You could weight data feeds from different sources
link |
and have some notion of truthiness
link |
or a veracity metric or something like that.
link |
So chain link is just one of many different philosophies
link |
that was born out of the academy.
link |
I believe Ari Joule was connected to it
link |
and there's some good people on that side.
link |
And it has a philosophy about how do you aggregate
link |
a philosophy about how do you inject
link |
and how do you create incentives
link |
so that that process over time gets more federated
link |
or more decentralized instead of centralizing
link |
around one particular setup.
link |
Now closely related corollary to this is computation off chain.
link |
So as I mentioned, smart contracts
link |
are intimately connected to Oracle.
link |
The question is how much pre processing
link |
and state management are you gonna do outside of the system
link |
versus what do you do inside of the system?
link |
So it's a very interesting balance between these two.
link |
And they were thinking about this stuff for a long time.
link |
There's a great paper called Town Crier came out
link |
way back in the day at Cornell
link |
and that was all about using like SGX to scrape things
link |
and you can rely on trusted hardware to give you good data.
link |
And but you could also use those SGX cores
link |
to do contract processing.
link |
Because if it runs in trusted hardware
link |
then it's very unlikely to be tampered with or manipulated.
link |
And because of that you don't have to federate it
link |
or decentralize it, you can run it on a single device
link |
as if it was running on a cryptocurrency.
link |
So there seems to be a desire in that community
link |
to capture more and more of the smart contract stack
link |
and pull more and more of that stack
link |
into that layer two infrastructure
link |
from running on layer one.
link |
Why? Because you have cost reduction
link |
and potentially because your trust model collapses
link |
to whatever chain link is offering,
link |
you're not gaining anything by doing the computation
link |
on Ethereum or another platform.
link |
Because you ever watch The Simpsons,
link |
there was this beautiful episode
link |
where Mr. Burns wants to turn the power off in Springfield
link |
and it's the perfect analogy for information security.
link |
So he and Smithers, they go through this elaborate series
link |
of doors and secret passages and guard dogs
link |
and robots and shit to get to the center of the power plant
link |
to turn off the power.
link |
And when they arrive at the center of the plant
link |
there's like this stray dog that's inside the room.
link |
And there's this wicker door that,
link |
a screen door that leads to the outside.
link |
And you're like, well, why the hell did you go through
link |
this elaborate series of doors and things
link |
if there's like a back door into your system?
link |
Well, that's basically a real life analogy
link |
of the relationship between the Oracle and the smart contract.
link |
You're only as good in your infrasick model
link |
as your weakest link and it doesn't matter
link |
if all of your computation is decentralized
link |
if you're at the mercy of your data feed.
link |
Because I can just manipulate that
link |
and break the entire security model of the system, okay?
link |
You'll perfectly execute the wrong answer.
link |
So they say, well, if you're trusting us anyway,
link |
why don't you pull more of what you're doing on chain
link |
into our stack, which creates more transaction fees
link |
for them and more value for them.
link |
But there are many different ways you can do oracles
link |
and earlier I was talking about the biology
link |
of these things, cell differentiation.
link |
The minute that you admit heterogeneity in your system
link |
and you start having cells like stake pools
link |
or things that are on in 24 seven,
link |
then you can start asking the what if question.
link |
Why don't you guys just also provide data feeds?
link |
Why don't you guys also provide state channels
link |
or payment channels or generate random numbers for me
link |
or whatever and you're now a service provider.
link |
You're making the blockchain full time
link |
but part time you're doing this.
link |
And if you're making bagels,
link |
you could probably make donuts, that type of a concept.
link |
So I think that type of competition is going to be
link |
very difficult for a lot of these layer two protocols
link |
that aren't tightly coupled with the protocol
link |
because the ones that are tightly coupled
link |
with the protocol, they have a built in trust advantage.
link |
They've already built a commercial reputation.
link |
There's already an increasingly more decentralized set.
link |
The other thing is you don't need a token.
link |
You can just use ADA, you don't need an oracle coin
link |
for these types of things to work.
link |
And by the way, that's just for the injection component
link |
and the veracity attestation.
link |
So is it true or not?
link |
That's not about the aggregation.
link |
That's still a tremendously time intensive,
link |
expensive proposition.
link |
There's only a few people in the world
link |
that have what Steve has with Wolfram.
link |
And those guys by just cutting off those supply
link |
to replicate what they have is something that would cost
link |
hundreds of millions or billions of dollars.
link |
And so it's an interesting question of,
link |
how do you incentivize the centralized aggregation
link |
That's kind of what Towncry or another protocols
link |
we're trying to achieve.
link |
So maybe you can say how Towncry works
link |
because it's like, what's your vision?
link |
You're not partnering with Wolfram, Wolfram Alpha
link |
and sort of exploring this partnership of data
link |
and the blockchain.
link |
What's your vision for a possible distributed
link |
version of Wolfram Alpha?
link |
Well, the first step is just say, can we use this as a feed
link |
and they can be what Bloomberg is to the financial markets.
link |
So you have a terminal and you have something
link |
and there's always a value of at least offering choice.
link |
And so where it's not like we're anti chain link
link |
or picking winners and losers, it's an open protocol.
link |
It's an open system.
link |
So if we're successful, chain link will migrate
link |
or it will at least support us because they like money.
link |
They like users, they like liquidity.
link |
It's a disservice to their community
link |
not to support a potential customer set.
link |
But you're gonna have a spectrum from the desire
link |
to do a completely decentralized aggregation,
link |
curation, injection, and veracity attestation
link |
to a completely centralized, vertically integrated set.
link |
You need to be able to have that whole spectrum
link |
and offer that to the smart contract developer
link |
to decide what makes sense.
link |
By the way, a lot of cases,
link |
they're gonna be their own Oracle.
link |
So for example, the World of Warcraft example
link |
that I gave, it's a completely centralized thing.
link |
It's a video game run by a single company.
link |
There's no sense in saying that we're somehow
link |
going to decentralize that.
link |
What they're just trying to do is extend their currency
link |
or NFTs or whatever into new marketplaces.
link |
So the minting of that is controlled by a single entity
link |
and the world state of that,
link |
you just have to trust Blizzard
link |
to inject that into the system.
link |
You could try to imagine some sort of like,
link |
sentinel group of people within the game
link |
who keep Blizzard honest, but it's completely unnecessary
link |
because they can change the rules of the system arbitrarily.
link |
So in that case, you're optimizing around efficiency
link |
and cost reduction.
link |
So you'd want a single feed
link |
that gets injected into the system from them.
link |
If you look at a stable coin that's algorithmic
link |
and it's basing its value on the aggregation
link |
of many different exchanges,
link |
that's the polar opposite example.
link |
Because there you're saying, okay,
link |
what's the price of my asset relative to some basket?
link |
But how do I know that the price feeds
link |
I'm looking at are accurate?
link |
You'd have to look at Binance and Vitrix
link |
and all these other things
link |
or maybe there's conventional Forex exchanges
link |
or something like that.
link |
Okay, well, how do you weight that?
link |
And how do you clip outliers?
link |
And these types of things,
link |
that's a completely different conversation.
link |
And there's a lot more mechanics you have to put in
link |
for that bundling and attestation
link |
of the veracity of the data feed.
link |
And what happens if you get it wrong?
link |
Your stable coin gets mispriced
link |
and everything goes to hell.
link |
And the markets will eventually correct it
link |
for arbitrage seeking behavior,
link |
but anything that was built on that will fail
link |
in the short term.
link |
So Oracle's really just a game of,
link |
you have to build a standardized interfaces
link |
and make it as easy as possible for people to do that
link |
and then let people choose how they want to inject data
link |
and what level of assurance do they need behind that?
link |
And the question is how much do you leave to the user
link |
versus how much does the protocol take care of for you?
link |
And it's a difficult design question.
link |
For our part, we love working with Steve and Wolfram
link |
and they're a great company
link |
and they really have some bright people there.
link |
And we know on the data set that they're second to none
link |
because not only they have it, it's computable.
link |
You can do all kinds of things and manipulate
link |
with a very rich query language.
link |
So that's a great thing.
link |
And we want to make sure that that's accessible
link |
to developers and Cardano.
link |
But remember they're like Bloomberg,
link |
it's a centralized speed in that respect.
link |
So if you want to build a chain link as competitor,
link |
there's other protocols you could do for that.
link |
Now you asked about Tom Crier
link |
and that was an attempt to kind of sweep the oceans
link |
with the net, get the data through a decentralized way.
link |
And that was just saying,
link |
hey, let's use trusted hardware to go read law,
link |
all kinds of websites and other things.
link |
And because it's trusted hardware,
link |
the scraping is nonbiased.
link |
If you find something inconvenient
link |
to whatever the person who's scraping is,
link |
the trusted hardware will still do it
link |
and it can't be changed.
link |
You'd have to manipulate SGX to do that.
link |
So that's great, but you still run into the problem
link |
of how do you wire that together?
link |
The underlying websites still don't have any notion
link |
of veracity or reputation behind them.
link |
And then you also have the issue of storage
link |
or the hell do you put all of it?
link |
If you have exabytes of data, what's the incentive for that?
link |
That's the dream of the semantic web.
link |
I still think it's a fascinating idea
link |
ought to basically convert the internet
link |
into a court, like a knowledge base
link |
that you can query, you can integrate
link |
in the same way you did with Wolfram Alpha,
link |
But that means basically revolutionizing the way
link |
we put the internet together,
link |
which I think these ideas of off chain data
link |
will motivate people
link |
because there's a lot of money to be made.
link |
Finally, there's money to be made with a semantic web.
link |
So that'll be an interesting kind of future.
link |
I do wanna ask you about video games really quick
link |
as a small tangent,
link |
because you said this really interesting idea
link |
of Blizzard being centralized control,
link |
is it possible to have items in the game
link |
that are not controlled by Blizzard?
link |
Being controlled in a decentralized fashion.
link |
Like what is it, the grandfather sword in Diablo?
link |
What was it really?
link |
Somebody was criticizing me.
link |
I said, I was saying all these kinds of nice things
link |
about Diablo III and they said Diablo II
link |
resurrected is coming out, they need to check it out.
link |
There's a lot of camps and wars on the internet.
link |
Well, come on, we both know that Diablo II
link |
was far better than Diablo II.
link |
That's what they're saying.
link |
This is the war that they're having.
link |
Okay, so we'll play it, it's coming out soon,
link |
I'll play it, fine.
link |
But nevertheless, those items are owned by Blizzard.
link |
Is it possible to create video games
link |
where items are owned by the people outside of Blizzard?
link |
And do you think in like a half century from now,
link |
we will all live in those games
link |
and we'll forget the physical space even exists?
link |
Well, yeah, that's definitely possible.
link |
I look at crypto kitties, that's a great example of that.
link |
Can you explain what crypto kitties is?
link |
Well, it's basically just a video game
link |
that kind of lives on a blockchain
link |
and the creatures within the game
link |
can breed with each other and create new crypto kitties
link |
and you can own them.
link |
So it's like some sort of dystopian Tamagotchi
link |
with lots of money behind.
link |
But anyway, the thing is those assets
link |
actually have a blockchain based representation.
link |
And so whether the infrastructure
link |
that hoists up that game off chain goes on or off
link |
because that ledger exists outside of the game,
link |
any person can come in, replicate it, restore it
link |
and turn it back on, sans intellectual property.
link |
So yeah, it's completely possible
link |
to break your architecture up
link |
where you have a notion of the player part
link |
and then you have a notion of the experience part
link |
and you can interchange experiences
link |
almost like you do cascading style sheets
link |
or something for different presentations
link |
and the ownership of the underlying layers, the players.
link |
So yeah, that's definitely doable.
link |
And frankly, that's what's gonna happen in the gaming world
link |
because there's so much value in that.
link |
I mean, everybody wants play and right now the model is
link |
you make a game, you sell licenses
link |
and you have a huge surge of people
link |
at the beginning of the game buying the video game
link |
and then you have this long tail
link |
but you've gotten almost 95% of your value
link |
in the first six months.
link |
You have a huge churn rate.
link |
The odds are the vast majority of people
link |
won't be playing the game within 12 months.
link |
But if you can create an interactive game
link |
where there's an actual economy inside the game,
link |
then you have Eve online or Second Life
link |
or any of these things where you have people playing
link |
for 10 years and there's like people buying
link |
virtual real estate and all these other things.
link |
You as a game developer actually don't have
link |
to create a lot of content.
link |
So your long tail gets a lot fatter
link |
and it generates a lot more revenue
link |
and your cost of operating system
link |
is fairly fixed or diminishing.
link |
So the economics align for doing exactly
link |
what you're talking about.
link |
And I think it'll get done.
link |
Well, I just saw recently sort of this calculation
link |
that people played WoW and Fortnite for 140 billion hours.
link |
So, and that's without the economic incentives there.
link |
So do you think it's possible that like most of our economy
link |
in the future will be people playing video games essentially?
link |
Like, okay, so one vision of the future,
link |
especially with AI and automation
link |
that people like that would get wealthier and wealthier.
link |
There's this kind of rising GDP for the entire world.
link |
And then people are losing their jobs
link |
but they're still well off enough
link |
to be able to have a high quality of life.
link |
So we're all looking for meaning
link |
and the meaning we'll find is by playing video games
link |
and now there's this extra levels.
link |
Like you can be a Bill Gates within a video game world
link |
in the digital world as opposed to the physical world.
link |
Is that, do you think that's the future?
link |
You just wanna have the Westworld
link |
if you can't tell the difference.
link |
Does it matter why I'm uttered to you?
link |
Did you ever interview Yvonne Harari?
link |
Not yet, eventually.
link |
Well, yeah, I guess, you know,
link |
Homo Diaz, that's kind of like the roadmap there.
link |
This hedonistic dystopia
link |
where everybody just lives wired into some simulation.
link |
And there's some movies about that ready player one
link |
and the other one was surrogate and so forth.
link |
So, yeah, Hollywood has certainly visualized
link |
what this could be.
link |
But, you know, I'm not so pessimistic in that respect.
link |
I do believe that the video game world
link |
is evolving at an amazing pace.
link |
If you look at where Unreal is at,
link |
is just incredible, the latest Unreal Engine.
link |
And within one or two more ticks of that clock,
link |
the iterations, so five to 10 years,
link |
the photo realism will be so good
link |
that it'll be hard distinguish between real life
link |
And, you know, the hardware is almost there.
link |
So, the question is then,
link |
when you have photorealistic experiences
link |
where you've successfully traversed the uncanny valley
link |
to a point where it's good enough,
link |
then will virtual reality be more desirable
link |
than actual reality?
link |
And for the vast majority of people,
link |
the answer is probably yes,
link |
because for actual reality it's tough, it's hard, you know?
link |
But then, your knowledge that you live in a virtual world
link |
actually becomes a problem for you.
link |
So, there's gonna be this kind of sad, dark industry
link |
where people try to create amnesia
link |
where they're not aware that they're inside the virtual world.
link |
And so, that's an interesting...
link |
I mean, it's almost like...
link |
Because, you know, it's not real.
link |
But if you could forget that it's not real,
link |
then you believe what you're experiencing is real.
link |
Yeah, but yeah, so what?
link |
You forget, like, you forget all the ugly parts of life,
link |
which is the physicals, the meat space,
link |
and then you should get to enjoy video games.
link |
But it's always lurking in the back of your mind
link |
that you're in the matrix.
link |
You have to not be in the matrix.
link |
That's just why the bald dude in the matrix was like,
link |
I wanna be rich and have a beautiful wife
link |
and eat a steak every day.
link |
You know, he didn't wanna know he was in the matrix.
link |
So, you would take the red pill, not the blue pill?
link |
Well, no, hang on, it depends on
link |
how good the virtual world is, Lex.
link |
Well, that's what I'm trying to tell you.
link |
I mean, isn't that what most of the beautiful experiences
link |
about human life are, is forgetting for a moment,
link |
for a time, like the mess of it?
link |
I mean, that's what love is, is you forget.
link |
Like, all of a sudden, everything is beautiful.
link |
But like, the reality is you're gonna lose that person.
link |
Most likely, love will fade.
link |
And no matter what, even if it doesn't,
link |
you're both gonna be dead soon.
link |
So I'm taking the blue pill on that one.
link |
You went full Ernest Becker on me, man.
link |
But you know, I get what you're saying, though.
link |
And actually, but then it begs the question,
link |
how do we, and goes back to the very first question
link |
you asked in this interview, which is like,
link |
how do we know we're not in a simulation?
link |
Or is this Bostrom's concepts or these ideas like real?
link |
Well, it's entirely possible that we are
link |
and that we desire to be
link |
because the real world is horrifically dystopian or bad
link |
or maybe we're actually don't exist.
link |
We're completely virtual and does it matter?
link |
And I'd argue that it probably doesn't.
link |
At some certain point, if you're at the end of your life
link |
and you're 90s dying of cancer,
link |
the fact that you can live out being young, healthy
link |
and 25 is probably a desirable thing.
link |
And no one would ever complain about that.
link |
Where it becomes problematic is if the vast majority
link |
of society enters this virtual simulacra of reality
link |
and as a consequence, nothing works
link |
because there's no one to do anything.
link |
Society falls apart in that respect.
link |
There's no desire to do anything in the real world.
link |
The desire to actually do real work stops
link |
because you're always inside this virtual economy.
link |
It's an interesting question,
link |
but drawing it back more to where we're at today,
link |
the evolution factors are there.
link |
VR is evolving at a very rapid rate.
link |
The game engines are just incredible today
link |
and they're really doing amazing things.
link |
And there seems to be an overwhelming desire
link |
for people to escape the harshness of where they live
link |
just by evidence by how many billions of hours
link |
have been spent playing video games.
link |
People still play Skyrim.
link |
Yeah, it's a good game.
link |
It's probably my favorite game
link |
of the whole Elder Scrolls series,
link |
but it's fascinating because smart contracts
link |
is actually the mechanism by which we take
link |
a lot of the meat space stuff and move it to the digital world.
link |
So all the stuff we've been talking about
link |
is really probably the mechanisms which take us there,
link |
which I find that world not dystopian.
link |
I find that world quite utopian
link |
because there's so many opportunities
link |
to create beautiful experiences.
link |
But since we're talking about the future,
link |
let me ask you the timeline question
link |
or even just like definitional.
link |
You mentioned some fun Hello World experiments going on.
link |
And how and when will Cardano get smart contracts?
link |
Yeah, so Alonzo Church is a famous,
link |
famous mathematician, computer science guy
link |
and he was a contemporary of Turing.
link |
And there was like these three different views
link |
of computing recursive functions from Kirtle
link |
and Turing machines from Turing.
link |
And you know, church had lambda calculus
link |
and they're all equivalent
link |
and they all give you the ability to build a computer.
link |
So we like functional programming.
link |
That's your favorite church.
link |
So we had to name something after church
link |
and it's just weird that, you know, we never did.
link |
So we said, okay, Alonzo is a good release name.
link |
Basically it was bringing smart contracts to Cardano.
link |
It took us a long time to get here
link |
and we'll be there in the next 90 days.
link |
You know, it's like everything we do, there's a process.
link |
And so there's all the colors of the rainbow.
link |
We start with Alonzo blue and then white and purple.
link |
And each step you do some more things,
link |
you bring more users in
link |
and then eventually you get to a threshold
link |
where you say, okay, everything works the way intended
link |
and you push a button
link |
and we initiate what's called a hard for commentator event
link |
and boom, the system has smart contracts.
link |
You just wake up and it's there.
link |
It's like it's in your house.
link |
So it's like when I got my blue check mark on Twitter,
link |
I woke up and I had it.
link |
It's just like Christmas came.
link |
And you were never the same.
link |
You can't go back.
link |
It's like hard fork.
link |
It's a hard fork of Charles.
link |
You got blue mark.
link |
Well, actually I think you can take it away,
link |
but can they take my check mark away?
link |
But that'd be like a hard fork backwards, I guess.
link |
So that's, but currently there's a testing procedure
link |
going on to see what does that look like
link |
and what will give you confidence
link |
that things are working well.
link |
Yeah, so first you start with the Mary era,
link |
which is where we're right now multi assets.
link |
So you can do metadata and issue tokens on Cardano,
link |
but you'd have limited programmability on chain.
link |
Alonzo adds the programmability end,
link |
but we already have most of the foundations
link |
of the extended UTXO model and the smart contract model.
link |
It's just those things aren't ready.
link |
So the first step is say fork it.
link |
So all those rules are now there.
link |
Okay, so that's what we did with Alonzo blue.
link |
We forked a test net based layer
link |
and it successfully survived going from Mary to Alonzo,
link |
which means that you can move transactions
link |
from one side to the other, both systems work.
link |
And then the next step is say,
link |
okay, well, are the stake pull operators,
link |
people run the infrastructure,
link |
able to run this test net just like they run Cardano.
link |
And that's what we're doing right now with blue.
link |
We're bringing all these SPOs in
link |
and then are we able to submit
link |
and runs smart contracts on the system?
link |
And they actually return around trip.
link |
You send something, you get something back.
link |
So that's where we're at.
link |
And then what you do is each step,
link |
so the next is white,
link |
you go from like 50 people to several hundred
link |
and then purples and open test net
link |
where we want every single person,
link |
the entire ecosystem to use it.
link |
And it's also a dev net.
link |
So that means that people are writing
link |
with plus playground and local interpreters,
link |
their smart contracts can actually start testing them now
link |
on the public infrastructure.
link |
So it's kind of like releasing dev kits to the Xbox
link |
or something like that.
link |
You send them out to game developers
link |
before you release the Xbox
link |
so they can test their video games
link |
in anticipation of the release of the system.
link |
So you run that for at least a month.
link |
And as long as it doesn't blow up in your face
link |
and oh God, what have we done?
link |
Hindenburg, oh the humanity.
link |
You release it and you ship it.
link |
The problem is it's no longer in our control.
link |
There's over a hundred exchanges that have listed Cardano,
link |
there's lots of wallet infrastructure,
link |
there are thousands of different constituencies.
link |
So it's less of a technological problem now
link |
and it's more of a coordination problem.
link |
So you have to evolve in a very methodical way
link |
and each step of the way you bring new actors in,
link |
they get ready for it,
link |
they upgrade their infrastructure to it
link |
and then like shells,
link |
eventually you get to the outer shell
link |
which is the hard fork for the general public.
link |
And if we've done it right,
link |
like that blue check mark,
link |
they wake up and it's exactly the same.
link |
They just get a little update,
link |
they update your client.
link |
They start demanding Wagyu beef.
link |
Is there stuff you're worried about
link |
in terms of like when something's this tricky,
link |
goes up several orders of magnitudes in terms of scale?
link |
Are there problems that you foresee?
link |
Is there like we said, there's game theoretic aspects,
link |
all those kinds of things.
link |
Like what worries you the most?
link |
I mean, I sleep like a baby.
link |
I wake up every two hours crying.
link |
Oh, damn, that's a good line.
link |
You're full of good lines.
link |
I mean, there's a lot to it.
link |
You just made me realize that expression makes no sense.
link |
I slept like a baby, but go ahead.
link |
Yeah, exactly right.
link |
Messing your whole world up right now, Alex.
link |
No, I mean, there's so much that keeps me up at night.
link |
You know, it's like you're in a cold sweat every day
link |
when you have an ecosystem like this
link |
because the other thing is you're judged as much
link |
by the applications people build on the platform
link |
as you are by the platform you've constructed.
link |
So, you know, one of the most unfair things
link |
that happened in our industry
link |
was blaming Vitalik for the Dow hack.
link |
He didn't write the code.
link |
He wasn't responsible for it.
link |
It's completely independent, different team.
link |
And because it blew up,
link |
a lot of people just developed this idea.
link |
Ethereum is not secure.
link |
EVM is fundamentally broken.
link |
And it's true, there are some issues there, but come on.
link |
That's like saying, oh, well, you know,
link |
Photoshop didn't work, fuck Bill Gates, you know?
link |
And that's the issue is you get as a platform developer,
link |
you know, coupled with the wins and losses
link |
of your application developer.
link |
So if they go do amazing things, it's like,
link |
oh yeah, Windows is great, we love it.
link |
And if they go do terrible things, they're like,
link |
oh man, I guess he's trying to kill all of us.
link |
So what we're kept up at night about
link |
is not just what we've constructed,
link |
but also how do we curate an ecosystem
link |
and foster the development of an ecosystem
link |
where you have assurance baked into the application.
link |
And that's somehow expressible to the user.
link |
So when you download your smart contract
link |
or you click your one click install,
link |
you use your Uniswap clone or whatever the hell it is
link |
that's deployed on Cardano,
link |
you have a little green check mark or something
link |
that indicates to you that somebody audited the code
link |
or followed a specification.
link |
The lack of that is problematic
link |
because then first there's impersonations,
link |
the whole my ether wallet thing,
link |
or like your videos or my videos are the same.
link |
Every comment there's a bot that says,
link |
hey, give me some money or something like that.
link |
That kind of stuff happens,
link |
but then just protocol level flaws,
link |
like what happened with the Dow hack.
link |
That's what really keeps me up at night.
link |
How do you resolve that problem?
link |
Because I don't hire these people,
link |
I don't tell them what to do,
link |
I didn't tell them how to build things on the platform.
link |
They may have tons of experience and knowledge
link |
that can be Simon Payton Jones,
link |
or they could have absolutely no knowledge whatsoever
link |
and they read one tutorial
link |
and they've written three lines of code their entire life
link |
and they've deployed something horribly broken copy paste
link |
and suddenly it all goes to hell.
link |
I'm judged by both.
link |
That's what really keeps me up at night.
link |
And we're as a company trying to figure out
link |
and as the ecosystem trying to figure out standards,
link |
like at University of Wyoming,
link |
we're setting up the smart contract engineering institute.
link |
We're negotiating with them right now.
link |
And the goal there is just to create some standards
link |
for how to certify smart contracts
link |
and so that you can get that green check mark
link |
and know that it actually has some assurance level behind it.
link |
But God, that's a huge coordination problem
link |
and it's a huge information presentation problem
link |
and incentives problem and so forth.
link |
And unfortunately, people who value being first to market
link |
will kind of piss in the pool for everybody else.
link |
In terms of maybe you can comment
link |
on the topic of decentralized exchanges.
link |
What kind of decentralized exchanges, Dex,
link |
is what are they first of all
link |
and what kind would you like to see built around Cardano?
link |
Yeah, so people want to create exchanges
link |
that don't have custodial risk.
link |
The point of exchange is to build you a marketplace
link |
where bids and ass can find each other,
link |
market people can meet and trade.
link |
You can find a price and you can get liquidity.
link |
So you got gold, you want to turn your gold into dollars.
link |
Okay, well, somebody has to create a marketplace for that.
link |
So like Coinbase is an example of marketplace,
link |
But the problem is you have custodial risk.
link |
So when you put your gold and your dollars,
link |
your digital representations of these things
link |
into the exchange, what if Wally, he was,
link |
Eve broke up with him and now he's really sad
link |
and he's gone to the dark side
link |
and he's become Wally the hacker.
link |
Okay, so he can go and sneak his way in
link |
and hack into Coinbase and steal all your gold
link |
So instead of you actually being able to swap these things,
link |
you've lost all your money.
link |
And there's other problems too.
link |
Like let's say, Daisy has now come in
link |
and become a regulator and said,
link |
oh, I don't like these exchanges anymore.
link |
I'm just gonna shut them all down.
link |
Yeah, and then you have no access to it.
link |
So you have sovereign risk.
link |
You have the risk of threat.
link |
You have regulatory risk.
link |
You have the issue of banks maybe cutting you out.
link |
So it's been in our industry for more than 10 years.
link |
Mount Gox was the most famous example of that.
link |
They collapsed, I believe, in 2013
link |
and hundreds of millions of dollars was lost
link |
over the course of a while.
link |
So the point of a dex is saying,
link |
can we do what a marketplace does,
link |
but not have Coinbase,
link |
not have a central actor run this thing.
link |
And there's a lot of problems with that
link |
because exchanges are generally creatures of latency.
link |
High frequency trading, for example,
link |
these things, the nanosecond,
link |
they co locate their infrastructure with the exchange
link |
software just so they can front run orders
link |
over other people.
link |
I mean, it's crazy the amount of technology that they put in.
link |
So the traditional Wall Street version of an exchange
link |
is very centralized, very fast, very optimized
link |
and kind of behaves by a very close set of rules.
link |
When you look at a dex,
link |
you have to accept that you're gonna have
link |
to have slightly different rules
link |
because you're operating in a global systems latency.
link |
And you're operating in a system
link |
that has different behaviors.
link |
However, that said,
link |
there's a lot of great protocols that have been built for it.
link |
Uniswap has kind of evolved a lot over the years.
link |
And we've seen a huge competition
link |
and a lot of evolution to basically build out protocols
link |
that kind of excuse some of these security problems
link |
and enjoy high liquidity.
link |
And then also have this beautiful concept of openness.
link |
One of the gatekeepers to crypto
link |
when you're a cryptocurrency developer are the exchanges.
link |
I remember when we first created Cardano,
link |
you know, the Bitfinex guys reached out
link |
at the Cardano Foundation.
link |
They said, oh, we'd be happy to list data.
link |
And I said, oh, okay.
link |
And they said, yeah, we want $5 million to do it.
link |
You know, so there was kind of a sub Italian
link |
for go fuck yourself in those email conversations.
link |
Fuck, who knows what I said.
link |
But anyway, that kind of back and forth happens all the time.
link |
And because these guys are gatekeepers,
link |
they have this nepotistic control,
link |
information asymmetries and so forth.
link |
So having a DEX, you don't have that problem.
link |
You have open listing.
link |
And you basically just put the asset into it.
link |
And if anybody wants to trade it, they will.
link |
And if it seems like it's a good idea,
link |
a natural market will form,
link |
market making will occur and you get liquidity with it.
link |
So there's no barrier to entry for that type of system.
link |
The biggest existential problem for DEX is right now
link |
is the concept of regulation.
link |
So basically right now, when you use Binance
link |
or Coinbase or these other guys,
link |
you have to go through KYC and AML,
link |
know your customer and anti money laundering.
link |
So basically who are you and is your money real or not?
link |
Or are you a drug dealer or something?
link |
So normally you do that by saying,
link |
okay, I'm gonna give them my copy of my passport
link |
and maybe they're gonna request some tax records
link |
or whatever the best practices are
link |
for the particular jurisdiction.
link |
And then that exchange is liable if that's fucked up.
link |
So if the government comes in and says,
link |
hey guys, pull your compliance records
link |
and they find discrepancies,
link |
they'll actually put the exchange out of business
link |
or find them very heavily.
link |
JP Morgan Chase got $19 billion in finance
link |
and fines over the last 20 years
link |
for various compliance issues amongst other things.
link |
So it's expensive, very difficult thing.
link |
And at DEX it's open system.
link |
You just have value coming in, not identity.
link |
And so all these things are trading
link |
amongst sedonymous accounts.
link |
And so there's no notion of compliance
link |
right now for that.
link |
So a lot of regulators are coming in and saying,
link |
oh, well, this is just a cesspool for terrorism
link |
and drug dealing and bad stuff.
link |
And they're word salad of bullshit.
link |
But it is what it is.
link |
You have to deal with these guys.
link |
And so there's been a lot of discussions
link |
of can we take DEXes and keep the openness
link |
and keep the liquidity and no counterpart
link |
or custodial risk and can we add
link |
some notion of compliance to that?
link |
And it just centralized way.
link |
It doesn't require a single actor to be a gatekeeper.
link |
So I think actually by combining
link |
DIDS decentralized identifiers, that's the way to do it.
link |
But it's actually the next generation of the technology
link |
is the regulated DEX.
link |
And who regulates that?
link |
How does that work and so forth?
link |
But I think ultimately those are gonna be
link |
the only marketplaces that end up surviving
link |
in this current environment if your desire
link |
is to exit to a dollar.
link |
If you don't really care about the fiat side,
link |
like traditional legacy currency,
link |
you can always do things in a shadowy, unregulated way.
link |
But I mean, it's a personal preference
link |
and a business preference.
link |
Can we kind of return to proof of work and proof of stake?
link |
There's just so many topics I wanna talk to you about.
link |
So I'll jump around a little bit.
link |
But at the Bitcoin conference, Jack Dorsey spoke.
link |
I think I believe he said Bitcoin changes everything.
link |
I think you made a video for Jack
link |
trying to explain different ideas to him.
link |
I guess describing the difference between proof of work
link |
and proof of stake as we've talked about.
link |
What do you hope Jack Dorsey comes to understand
link |
about the difference between proof of work
link |
and proof of stake?
link |
Well, I hope he understands it's just a resource.
link |
That's the entire point of the video I was trying to make.
link |
It's like, dude, you're like in this cult
link |
where you think the only way to be secure is proof of work
link |
or in somehow proof of stake is less secure
link |
than proof of work.
link |
I don't even know how you put those inequalities there
link |
because you're talking about apples and oranges.
link |
You're making different trade offs
link |
and there's different assumptions
link |
about the nature of the people involved,
link |
but the mechanics are the same.
link |
And so it's really more of a question of
link |
what type of system do you prefer?
link |
Do you want mercenaries guarding Rome
link |
or do you want Roman citizens guarding Rome?
link |
Okay, and as the Romans learned,
link |
it's better to have citizens usually doing that.
link |
Okay, and that's the only point I was trying to make
link |
to Dorsey and I don't think he watched it
link |
or particularly cared, but it was more of a video
link |
for everyone and to start that dialogue
link |
realizing that the real game is proof of stake
link |
better than proof of work.
link |
It's how do we go from one to N and what should N be?
link |
You just mentioned that semantical addressable web
link |
going back to IPFS and these other concepts.
link |
Well, how do you pay for the enormous burden
link |
of storing that much data?
link |
You can create a consensus protocol for it.
link |
There actually is one, it's called Permacoin.
link |
Came out in 2014, 15, Andrew Miller wrote it
link |
and a few other authors.
link |
I think our John Katz may have been an author as well,
link |
but basically it was just a throwaway
link |
proof of work style algorithm
link |
that only works if you have large amounts of data.
link |
So it's like your miners are like a hard drive effectively.
link |
Proof of storage, I think you call this.
link |
Yeah, this type of stuff.
link |
And there's been since then many iterations,
link |
evolutions of that type of protocol.
link |
Okay, so what if you throw that into your resource bag?
link |
Now you have a capacity in your system
link |
for storing huge amounts of information
link |
that's incentivized by the way the system works.
link |
And you can balance that with a proof of stake system.
link |
And you can balance that with,
link |
let's say you have proof of useful computation.
link |
We may have a paper on that, who knows, coming soon.
link |
And what if you have a proof of useful computation
link |
where maybe you can do walk stat or something, who knows?
link |
With something like that, okay, well now you have
link |
three resources inside your system.
link |
And those three things keep your system secure,
link |
they keep each other balanced.
link |
And they just so happen to create
link |
the world's largest supercomputer that's programmable.
link |
And it just so happens to create
link |
the world's largest database that's programmable.
link |
In addition to having a shareholder style model
link |
for ownership inside of it,
link |
to kind of balance these things out.
link |
So people care about the appreciation of value
link |
inside the system.
link |
So that was my point to Jack, is your business guy,
link |
why are you betting all your eggs?
link |
And one crazy model that's a cult,
link |
step away and realize that that does something.
link |
It's a tool, but saws aren't the only tool in the toolbox.
link |
There's hammers and screwdrivers and other things.
link |
Go to end resources.
link |
And let's have a real conversation about
link |
what would a world computer or a world infrastructure
link |
that's useful for your business to name,
link |
in his case, Twitter, require.
link |
And what type of resources would you need
link |
for that such a thing?
link |
Well, in his case, Square more importantly.
link |
Currently, if you look at Square and Cash App,
link |
they support Bitcoin.
link |
He is kind of all in on the proof of work idea.
link |
Not all in, but currently kind of,
link |
that's the one supported idea.
link |
I guess there's just a tip in proof of work.
link |
I love you so much, Charles.
link |
Thank you, appreciate this.
link |
But I'm not gonna run with that,
link |
even though I'm tempted to,
link |
but looking forward to you hope Cardano
link |
becomes part of Cash App.
link |
I mean, he's the business guy,
link |
or at least I'd hope he is.
link |
And it's not about what I want or what he wants.
link |
It's about what markets want.
link |
When you run a publicly traded company,
link |
you have a fiduciary obligation to your shareholders
link |
to maximize the utility and sustainability
link |
and value of your company.
link |
And so if he's running a company that makes money
link |
off of these things,
link |
it makes absolutely no sense to be a maximalist.
link |
You want transaction volume.
link |
That's how you make your damn money.
link |
It was Coinbase was the same way.
link |
They were very maximalists in the beginning.
link |
Very quickly they started realizing,
link |
hey, we're losing a lot of money.
link |
If we want an IPO,
link |
we kind of need to be a bit more diverse.
link |
Eric Voorhees was also a maximalist way back today.
link |
Now look at Eric, he's got a shape shift.
link |
And all these other pieces of infrastructure,
link |
he's a lot more friendly with us Alties.
link |
So, you know, Jack will make that decision.
link |
His people will make that decision, I think,
link |
based on market dynamics, transaction volume,
link |
and value to the user.
link |
And if the concern is actually legitimately security,
link |
then the only question I'd ask their team is,
link |
can you please provide me a definition of one?
link |
Doing POW is more secure than proof of stake as a tweet
link |
is not really a proof.
link |
Okay, you need to actually come out and sit down and say,
link |
what is your security model?
link |
What do you care about?
link |
What do you value?
link |
What's the problems you're concerned about a proof of stake?
link |
And they never really get there.
link |
And that's why I call this maximum like a religion,
link |
because it's just like saying,
link |
you know, well, the angels descended from the heavens.
link |
And it's like, well, how do you know?
link |
Because the Bible said so, or the doctrine said so.
link |
It's like, well, that's your evidence?
link |
Somebody wrote something down.
link |
Can you please give me a little bit more?
link |
They say, no, you're challenging the word of God.
link |
In this case, you're challenging the word of Satoshi.
link |
And all I ask for is just, what is the burden of proof?
link |
We wrote the papers, we have security models,
link |
we went through the peer review process.
link |
God, that was not easy.
link |
We wrote formal specifications.
link |
In some cases, we formalize those specifications
link |
with Isabelle for God's sakes, which is not easy to do.
link |
And then we implemented it.
link |
And it's running in production with a million users
link |
at a $50 billion market cap.
link |
I mean, as a whip point, do you start saying,
link |
well, maybe there's something there?
link |
You know, and they say, no, there's nothing there.
link |
And it's not secure, it can't be secure.
link |
And he said, okay, then why do you believe what you believe?
link |
And they never come back to me with an answer, ever.
link |
Well, I believe God didn't go through a peer review process
link |
when you wrote the 10 Commandments.
link |
So sometimes it works out, sometimes not.
link |
Let me ask, on that same thread, Tesla, SpaceX, Elon Musk
link |
currently invested in Bitcoin,
link |
but are openly looking to explore
link |
other cryptocurrency investments.
link |
What case would you make for Cardano?
link |
Well, if they truly care about alternative energy
link |
and sustainability, you know, carbon reduction
link |
or carbon neutrality, you can't be in a system
link |
where there is no built in mechanism
link |
to constrain the energy consumption.
link |
You know, with proof of stake,
link |
energy consumption is a negative.
link |
You want to minimize it.
link |
If you can get the same amount of stuff done
link |
on a Raspberry Pi as you can a big server,
link |
you're going to do it on the Pi,
link |
because ultimately that server cost
link |
and the energy cost is coming out of your budget.
link |
With proof of work, any innovation you come up with
link |
to optimize power, you just build more Asics,
link |
because, you know, it's always 30% more power efficient.
link |
Great, buy 30% more.
link |
You keep adding to the work set
link |
because you want more hash power,
link |
more hash power, more share of the Pi.
link |
So you have no energy savings component.
link |
I know these people are saying,
link |
well, there's a lot of wasted energy in the grid,
link |
and this is kind of incentivizing using that wasted energy,
link |
and it's a better way of storing it than batteries
link |
because you're now storing it as a Bitcoin
link |
instead of storing it as energy.
link |
Okay, maybe there's some truth to that,
link |
but anyway, it's just...
link |
The energy is a critical point for you, like the...
link |
Yeah, that's exactly right.
link |
The energy is a critical point for me with Tesla
link |
because they assert to be an alternative energy company.
link |
And unless they can make the case
link |
that somehow the proliferation of Bitcoin
link |
is legitimately going to proliferate batteries,
link |
solar, and wind, or other things,
link |
then it's probably good for them to just focus
link |
on the most efficient energy efficient cryptocurrency possible.
link |
Otherwise, you're exacerbating global warming,
link |
you're exacerbating the ecological consequences of it.
link |
The other thing is Bitcoin is the least programmable
link |
of all the cryptocurrencies.
link |
And if you want to do interesting, sexy, unique things,
link |
let's say Tesla, for example,
link |
they want to start doing VDI and V2V for autonomous vehicles
link |
and have the vehicles start talking to each other
link |
and connected to 5G,
link |
well, imagine if you wanted to build a telco coin
link |
or some sort of 5G coin,
link |
and you want to build an IoT layer and network,
link |
there's just no real way to do that on Bitcoin
link |
with the way it's designed.
link |
So you'd need fundamentally different infrastructure
link |
to create such a token and regulate such a system
link |
and have these things autonomously negotiating
link |
and do business with each other.
link |
You need DEXs and stable coins
link |
and all kinds of mechanics
link |
to make something like that possible.
link |
Well, that's really beneficial to Tesla
link |
if they could figure that out
link |
because they could create like an information sharing
link |
incentive scheme where if the cars talk to each other,
link |
including other branded cars like GM cars and Fords,
link |
they can now actually get data from those cars
link |
through a marketplace in exchange
link |
for the benefit of autonomous driving
link |
or for the benefit of understanding road conditions
link |
or safety enhancement and so forth.
link |
So it's just depending.
link |
Are you just here to speculate?
link |
Are you here to actually use another medium of exchange
link |
or do you actually want to build infrastructure
link |
The more closely you get to utility,
link |
the further down the road you get there,
link |
then the more programmability you need.
link |
And so it makes a lot more sense
link |
to be an Ethereum fan or a Cardano fan
link |
than to be a Bitcoin fan.
link |
So to be both proof of stake
link |
and have the smart contracts capabilities.
link |
And that's why we went over Ethereum
link |
because they're proof of work.
link |
You mentioned God.
link |
God spelled backwards as dog.
link |
How's that for a transition?
link |
And Elon Musk and Tesla are at least a little bit curious
link |
about a coin called Dogecoin.
link |
You made a video directed to Elon
link |
on how to improve Dogecoin.
link |
What are your ideas for making Dogecoin
link |
even better than it already is?
link |
Well, Dogecoin is just based,
link |
it's like that nine inch nail song,
link |
a copy of a copy of a copy.
link |
Yeah, it's just a copy of a copy.
link |
It's a Bitcoin gave Litecoin, Litecoin gave Dogecoin.
link |
And it was kind of a parody cryptocurrency.
link |
And I think Jackson was trying to do it
link |
to like prove a point about altcoins.
link |
And then true to form, it's like nobody got the doctrine
link |
and completely perverted the entire religion.
link |
It's almost like the emperor of man in Warhammer 40K,
link |
who's like this atheist, don't worship me.
link |
And now there's like this whole religion
link |
built around the emperor.
link |
So Dogecoin has become a thing
link |
and it's become such a large thing
link |
that it is a reasonable target for somebody
link |
to fix it up and repair it,
link |
make it an interesting cryptocurrency.
link |
The point of the video was to show
link |
what a modern third generation cryptocurrency
link |
really would require.
link |
It's a major overhaul.
link |
And there are already people doing this.
link |
There's the Solanas and the Harmony Ones
link |
and the Cardanos, Neosis and all these other guys.
link |
And they have billions of dollars
link |
and huge dev teams and all these innovative protocols.
link |
If you're really serious about this thing sticking around,
link |
being useful in doing stuff,
link |
then the point of the video was to show
link |
the types of things you'd have to think about
link |
and the types of papers that are all open source,
link |
patent free and don't have any notion
link |
of intellectual property behind them,
link |
that his engineers could grab and go and do.
link |
And he did mention on Twitter that he was looking
link |
for feedback on how to improve Doge.
link |
And so I said, all right, well,
link |
I'll just put all these things together.
link |
It was a little tongue in cheek
link |
because I figured he'd ignore it.
link |
But it was also showing how hard it is
link |
to innovate in this tire space.
link |
You don't just go and say,
link |
I'm gonna go build a battery powered car or rocket
link |
or enter a new industry.
link |
It's really hard to do that.
link |
You spend years and lots of effort.
link |
You have to do series of small learning steps.
link |
You have to pick up destroyed rockets
link |
on the side of the beach and things like that
link |
before you get to the rocket landing itself.
link |
Well, analogously, it's really hard
link |
to build a cryptocurrency.
link |
The Satoshi probably spent years thinking carefully
link |
and that work was a derivative of 30 years of work
link |
in the digital assets space starting the 1980s,
link |
working its way through.
link |
So, and then Bitcoin only did very limited things
link |
relative to what Ethereum can do
link |
or Cardano can do and so forth.
link |
So the minute that you extend that complexity,
link |
you're talking about years of R&D,
link |
years of engineering effort that needs to be done.
link |
So what's the point of Doge?
link |
Is it just a meme?
link |
Is it actually contending to be useful?
link |
Or is it competing as a store value against Bitcoin?
link |
Now, if it's competing as a store value against Bitcoin,
link |
why the hell does it have the monetary policy it does?
link |
Also, there's predatory distribution
link |
of the underlying asset and over 90 some percent
link |
is consolidated less than 1% of the holders.
link |
For Dogecoin at a very, very low price point.
link |
So they can sell at almost any price point
link |
and make a profit.
link |
So, it hits 50 cents there, they're billionaires
link |
and it's not like 20,000 people,
link |
it's probably less than 100 wallets
link |
that have that distribution.
link |
So there's this existential ticking time bomb
link |
that's in Doge that once the guys who are vested
link |
start selling, they can just keep selling
link |
and keep selling and ride it all the way down
link |
and make windfall profits regardless
link |
of what price they sell down.
link |
And who are they selling against?
link |
The retail investors.
link |
People make $500, spare money a month
link |
or something like that.
link |
And it bothers me because I see it in my community.
link |
So I live in Longmont, now in Colorado.
link |
And I was at a restaurant and I was talking to the waitress
link |
and she asked me what business those are.
link |
And I said, I'm in the cryptocurrency space.
link |
And she's like, what is that?
link |
And I started explaining all of it.
link |
And she goes, oh, yeah, I own some Dogecoin.
link |
I said, do you want anything else?
link |
No, no, I just bought some Dogecoin.
link |
Why did you buy Dogecoin?
link |
Oh, I saw Elon tweeting about it
link |
and I thought it was a good deal.
link |
So when you see stuff like that
link |
where people have no clue what they're doing,
link |
they don't really understand the supply dynamics,
link |
the ownership dynamics and these types of things.
link |
And then when the clock stops,
link |
they're the ones who get hurt.
link |
And then the regulator comes in,
link |
the Elizabeth Warrens of the world.
link |
And they say, see, this is an evidence.
link |
These guys can't regulate themselves,
link |
control themselves.
link |
We need to control everything.
link |
Either let's ban it or let's just announce
link |
that the only three are legitimate
link |
and every one of them has to be connected to identity
link |
and rah, rah, rah.
link |
And I'm just very concerned that that's a bad thing to do.
link |
And that's why I've been so vocal about this topic.
link |
And my hope is that a compromise can be made
link |
where real developers come in
link |
and they start working on Doge
link |
and they find a way to create
link |
some sort of use and utility for it.
link |
So at least it has a value floor and won't collapse.
link |
Is it possible for Cardano and Doge
link |
going to work together somehow?
link |
Yeah, it'd be a lot of fun.
link |
I'm not adverse to the idea of cleaning up the code base
link |
but legitimately whoever comes in
link |
be two years or three years of work.
link |
Cause you have to do real stuff.
link |
And that code is like Litecoin circa 2012, 2013.
link |
Well, the interesting thing about Elon
link |
and I've got to interact with him quite a bit.
link |
That combination of humor and extreme ambition
link |
like in the face of impossible odds
link |
is something he does really well.
link |
And so I think that's the spirit of Dogecoin
link |
is fun and almost like bold, ambitious innovation.
link |
And so I think you can't discount the power of that.
link |
But where's the innovation?
link |
What's the agenda?
link |
Well, this is step one.
link |
What's going to Mars for Dogecoin?
link |
Well, I mean, he came in the same way to, to raucous.
link |
He came in the same way to, to electric cars.
link |
It was seemed impossible at first,
link |
but you step in and you solve the problems
link |
first principles one at a time.
link |
But I'll challenge you a little bit on this
link |
because I think he had some trends though
link |
that he was very smart to recognize
link |
in the case of battery powered cars.
link |
He said, hang on, everybody has tablets and cell phones
link |
and these other things.
link |
And there's an incentive to make batteries
link |
better, faster, cheaper and charge faster.
link |
And that's connected to mobile computing.
link |
So regardless if you want battery powered cars or not,
link |
every year you have billions of dollars of R&D
link |
being pushed to force this capacity to evolve.
link |
And he's just getting on the train
link |
and piggybacking on that.
link |
So that was a brilliant business acumen to recognize that.
link |
In the case of SpaceX, it was just an obvious question.
link |
If every time you get on a plane,
link |
you have to throw the plane away and no one would fly.
link |
So reusability is like a fundamental thing
link |
that if you solve that, you've now opened space up
link |
to a complete new class of commercialization.
link |
I don't see the problem in Dogecoin
link |
because if he was looking for it,
link |
then why not look at a real platform
link |
actually trying to solve a real problem?
link |
There's so many of them.
link |
He has, he throw a rock, he can hit 15 of these guys
link |
and they'd all die to work with Elon Musk.
link |
Yeah, that's very interesting.
link |
I mean, so first I could continue pushing back
link |
on your intuition about electric cars and batteries
link |
I don't think it's more obvious in retrospect
link |
than it is at the time, I would say.
link |
Because I would agree with you on the batteries front.
link |
I wouldn't necessarily agree with you with the electric car
link |
because first of all, nobody started a successful car company
link |
Well, but it was the loyalty.
link |
The EV4 guys or whatever it was with GM,
link |
they didn't want to give them back
link |
when they had the lease program.
link |
So there's some basic intuition
link |
that there is some hunger here,
link |
but it's not obvious that you can do it successfully.
link |
And with relaunching rockets for cheap,
link |
that sounds good on paper, but to do it well,
link |
NASA is spending way more money for this.
link |
And the Russians were assholes,
link |
not selling any rockets.
link |
Like, so you have to do it all yourself from scratch.
link |
How do you build the team?
link |
How do you launch rockets when,
link |
if you fail a few times, you're gonna go bankrupt?
link |
I mean, it's just business wise,
link |
I would rather build an app, like Angry Birds.
link |
Oh yeah, yeah, yeah.
link |
There's launch rockets.
link |
You gotta give him credit.
link |
He's got boulders for balls.
link |
That's a good picture.
link |
Yeah, thank you for that.
link |
But I don't, maybe that's what, I mean,
link |
I think there's not enough first principle thinking
link |
on the cryptocurrency side.
link |
I think I agree with you on that.
link |
But there's some aspect to which the seriousness
link |
of the cryptocurrency world is paralyzing.
link |
So in some way, the innovation that you spoke to
link |
requires taking risks,
link |
requires not taking everything so seriously,
link |
like being afraid to take those bold risks
link |
in the space of ideas, not in the space of financials.
link |
So in that way, I think that's one pro for Bitcoin,
link |
is there's room, it's hungry for innovation.
link |
But I think Cardano in that same way is hungry
link |
for innovation, just like you said,
link |
with some more rigor and formalism behind it.
link |
And even Ethereum has a hunger for innovation.
link |
That's where Bitcoin is a little bit more,
link |
I would say conservative in terms of how much innovating
link |
they're willing to do,
link |
in terms of the incentives they built into the systems
link |
for the evolution of the cryptocurrency.
link |
But yeah, I mean, it's difficult to psychoanalyze
link |
why Dogecoin is the thing that excites Elon so much.
link |
But at the same time, there's some power to the fun.
link |
It sounds ridiculous to say,
link |
but the fun, this idea that the most entertaining outcome
link |
was the most likely, there could be something built
link |
into the physics of the universe that makes that true.
link |
Because the viral nature of fun has power.
link |
Well, it's a neural science thing.
link |
We like dopamine, we like these chemicals in our brain.
link |
And when we have fun, we want more of it.
link |
So you tend to gravitate towards work activities
link |
and play activities that are enjoyable to you.
link |
And it is nice sometimes to kind of come in
link |
and troll an entire industry.
link |
And I can imagine he's probably at the time of his life.
link |
It's the same as like taking Tesla private at 420,
link |
that kind of stuff.
link |
And it's one thing when you do it with friends,
link |
it's another thing when you do with the whole industry
link |
and it hurts people financially.
link |
And also I understand he hates short sellers
link |
and there's some things there.
link |
And I can't speak for him
link |
because I only know the guy from a distance.
link |
It's just I live in this space
link |
and I have to deal with the consequences
link |
and clean up the mess of the company.
link |
You feel the pain.
link |
Yeah, and this results in a regulatory event.
link |
It's like, I'm the guy who has to put on a suit
link |
and go to Washington and go and sit in a Senate in Korea
link |
and all this stuff.
link |
And he's the guy that, you know,
link |
just like laugh with his friends
link |
about how he crashed the crypto market
link |
and how easy it was to do it.
link |
And that's my only umbridge about this.
link |
On the other hand, you know,
link |
if it brings a lot of cool new interesting things
link |
and people into the space, that's a net positive.
link |
And so, you know, it's not university bad
link |
or universally good.
link |
And I'd like to give people the benefit of the doubt.
link |
And so I'm really hopeful to see
link |
what comes about this recent surge of interest.
link |
And if Elon actually puts his money where his mouth is
link |
and takes some of his enormous engineering talent
link |
and, you know, capital and starts contributing
link |
and building something in the cryptocurrency space.
link |
Be really cool to see that happen.
link |
There's a bunch of different technical aspects
link |
I want to ask you about on the Cardano side.
link |
So first maybe on the scaling side, what is Hydra?
link |
How does Hydra compare to other different ideas
link |
for scalability like rollups?
link |
Main trade offs with respect to security, UX
link |
and anything else you want to talk about.
link |
You have to have a little bit more energy Lex, come on.
link |
You know what I need?
link |
I need that Coke machine that you mentioned,
link |
the thing that converts water to cocaine.
link |
Water to be cocaine from director Bullock.
link |
We'll leave this said, right?
link |
Isomorphic state channels, that's a great topic, right?
link |
There's words salad of cryptographic terms.
link |
Whether lightning, Hydra, rollups, any of these things.
link |
Really what you're trying to do is say, okay,
link |
if I do it on layer one, it's slow and expensive.
link |
What I'm going to do is batch something somehow, some way
link |
and then do it in a different system
link |
where it's fast and cheap.
link |
And what I'm doing with that is I'm losing some
link |
of the security guarantees of the base layer
link |
and admitting a slight higher degree of this,
link |
of centralization, but then I get super fast settlement.
link |
I get super low cost transactions.
link |
And potentially I may even be able
link |
to get distributed computing.
link |
Meaning that instead of having the smart contracts run
link |
in a replicated system, they can run on a single node
link |
like a stake pool and their stuff is different
link |
from the other guy's stuff.
link |
So you go from a system of capacity of whatever it is
link |
to a system of N for the totality of all the stake pools.
link |
So basically Hydra is just the next generation of that.
link |
When you have the ability to tinker with the accounting model
link |
and the layer two solution is co designed
link |
with the layer one solution.
link |
So it's like what lightning would have been
link |
had lightning been co developed when Bitcoin came out.
link |
There would have been special provisions made
link |
in Bitcoin specifically to accommodate lightning.
link |
And it would have made it very easy for you then
link |
to move inside the system, outside of the system
link |
and have security properties preserved
link |
like availability, for example,
link |
or fraud resistance say, oh, you can't steal the money
link |
or these types of things.
link |
Where things get really complex
link |
and this is why Hydra's novel over lightning
link |
is when you wanna move beyond payments to state management.
link |
Okay, so payments are just,
link |
I wanna move between Alice to Bob
link |
as quickly as possible as low cost as possible.
link |
So for example, I have a micro tipping application
link |
like change tip on Twitter or like a video
link |
I'm watching YouTube video
link |
like maybe this video in the future
link |
and people really like it and they click tip
link |
and you get five cents or something like that.
link |
Okay, so that's an example of a perfect payment application.
link |
But what happens when you actually have
link |
a rich smart contract like a DEX
link |
or you wanna do a video game or something like that.
link |
You wanna run that off chain
link |
but then there's some reconciliation on chain that happens.
link |
So a state channel basically lets you do that
link |
but it's a lot more complicated
link |
and there's a lot more to think about.
link |
So Hydra basically just has in its design
link |
a collection of ideas of how to do that.
link |
And the current paper is for a single head.
link |
The next thing you do is composition.
link |
And so you go multiple heads
link |
and there's a routing protocol between them.
link |
And then eventually create these tail protocols
link |
for when things get asynchronous.
link |
So instead of always being aligned
link |
and always being available,
link |
what happens if they die for a bit
link |
and then they come back?
link |
And you can create all kinds of guarantees
link |
that your funds won't be lost or locked forever
link |
or things like that.
link |
There's a failure recovery mode for this type of stuff.
link |
And basically the idea is leverage
link |
what lightning is already achieved with Bitcoin
link |
but then take advantage of the fact
link |
that you have a more expressive accounting model
link |
and a more expressive programming model.
link |
So you can just physically do more
link |
and you can put more crypto and type that thing.
link |
Now contrast it with rollups, really that is the thing.
link |
You're gonna take some thing,
link |
batch a bunch of transactions together
link |
and you're gonna generate a proof.
link |
And then what you can do is whenever you see some part
link |
of that history, you can check it against that proof
link |
And they're closely related concept of recursive snarks
link |
that you'll see a lot.
link |
There's things like the MENA protocol or other things.
link |
And basically the idea is that whenever you see something,
link |
you can always generate two proofs,
link |
an existential proofs that the coins exist
link |
and a non existence of a double spend.
link |
So you can always check those two properties
link |
and the proof is verifiable and logarithmic time ideally.
link |
So you can have giant amounts of data
link |
but it's very small, the actual proof is concise, okay?
link |
So they're just different boats for different floats.
link |
The advantage of a layer two network
link |
where there's actual channels and there's interaction
link |
and there's service providers is the channels
link |
can eventually scale in the collection of things
link |
that they can do and eventually they can become
link |
interoperability networks between cryptocurrencies.
link |
So at some point we could modify the bolt spec
link |
and make it somewhat interoperable with Hydra.
link |
And then what you could happen is you could use it
link |
as a bridge to actually do cross chain traffic
link |
and send transactions between the systems.
link |
You don't really think about that too much
link |
when you're talking about rollups.
link |
That's more of optimizing what you have within the system.
link |
So can you elaborate how it's possible
link |
to cross chain traffic?
link |
Well, you already have the intermediary,
link |
you have the channel operator
link |
and you already have lightning protocol, right?
link |
And you just build a dex that runs within that system
link |
and they can swap assets or you can do wrapped assets.
link |
It would be like low cost.
link |
I guess you could just switch low.
link |
Yeah, the same thing lets you batch things on one,
link |
will let you batch the other.
link |
So if lightning works on Bitcoin
link |
and Hydra works on Cardano,
link |
you can eventually bridge these two together
link |
and create a way of moving back and forth.
link |
And the same things that make transactions
link |
in and out of that network cheap,
link |
will make creating wrapped assets cheap,
link |
at least on the Bitcoin to Cardano side.
link |
You can't create assets on Bitcoin.
link |
Another flaw of Bitcoin that they've never fixed.
link |
What's your thought about layer two technologies
link |
Is there stuff you're excited about?
link |
We talked quite a bit about lightning network, Hydra.
link |
These ideas, do you think there'll be somebody
link |
that wins out or is this gonna be this kind of dynamic thing
link |
that we just keep building different ideas
link |
and they all interact with each other?
link |
It goes back to biology, that cell differentiation concept.
link |
You have to build specialized tissue to do things.
link |
The point of layer two is to extend the network.
link |
It's adding a foot, it's adding an arm,
link |
it's adding a brain, it's adding a heart, it's adding eyes.
link |
Giving you additional senses, you have years now.
link |
So when you add these layer two products,
link |
like a Tala Prism is a perfect example of that.
link |
We don't have identity at the base layer of Cardano.
link |
It's a real bad deal to do that.
link |
Because China will come in or US will come in
link |
and tell you how to do that.
link |
What we do is you build a layer two protocol
link |
that's blockchain agnostic and then the user can decide
link |
when and where they need an identity
link |
and then bring that identity into the system.
link |
And if you designed it right, when they bring it in,
link |
it's very easy, very fluid,
link |
and suddenly the experience enhances.
link |
Everything just gets better.
link |
Oh wow, okay, now I can use all these regulated things.
link |
They go from gray to green in the App Store.
link |
Or oh wow, now I can send to human readable addresses.
link |
Because if I have an identity and you have an identity,
link |
we can alias them with some namespace.
link |
And now I send to Lex instead of some horrible
link |
back 32 address structure.
link |
Okay, so that's really what you need to do with layer two
link |
is say, okay, each layer two protocol
link |
is meant to do something.
link |
Either it gives me payments or lower customer contracts
link |
or interoperability or identity.
link |
And then it's a marketplace.
link |
So you should have blockchain agnosticism
link |
with your layer two solutions.
link |
And so you can mix and match and choose
link |
whichever collection of services you need.
link |
And that's actually how IT works these days
link |
with microservices and these other things.
link |
And cloud software, you know, every firm
link |
is an aggregation of dozens of providers.
link |
And basically that composition of them is your software stack.
link |
Jumping around back to proof of work.
link |
What are non interactive proofs of proof of work?
link |
It's fun to say, right?
link |
It's just one of those things that you notice
link |
that certain proofs of work when you solve them
link |
come up less frequently than other ones.
link |
And just by that nature, you can sample them
link |
and then construct proofs from them.
link |
So you can, with that just set,
link |
have a more concise representation
link |
of an amount of work for a range of the chain.
link |
I can say that again.
link |
Yeah, I was gonna say that word salad,
link |
basically the idea is, okay, so let's say that this block,
link |
and I'm just simplifying the concept a lot,
link |
this block, you know, you get a regular green
link |
type of proof of work.
link |
And then this block, you get a green
link |
and you keep going and then suddenly you get a red one, okay?
link |
So it's still a valid proof of work,
link |
but it's more rare than the other ones, okay?
link |
So if you notice that particular pattern,
link |
what you can do is you can just start not caring
link |
so much about the green ones,
link |
and you can just bookend your chain with red, okay?
link |
And then you can just repeat that
link |
and repeat that, repeat that, and you can collect,
link |
and you can create this really compressed representation
link |
So what does it mean?
link |
It means that suddenly when you have that,
link |
now you have a way of representing a long range of history
link |
with a very small proof.
link |
So you can use it for light wallets,
link |
and you also could use it for side chains,
link |
if both side chains use proof of work.
link |
So when you see a transaction come in,
link |
you don't have a copy of the side chain,
link |
but you have a copy of the proof of work,
link |
and it has the same algorithmic weight
link |
as the normal longest chain,
link |
because you don't have all the greens,
link |
but the reds only occur
link |
with a certain sampling frequency.
link |
So this is the brainchild of Dionysus Zindros and Agalos,
link |
and it's just an amazing paper,
link |
and what's so cool about it is it doesn't require
link |
any structural changes to proof of work.
link |
It's just something you notice as an off gas
link |
It's like you're watching an engine operate,
link |
and you notice like every 500 times a piston
link |
will do a certain weird thing,
link |
and so you take advantage of that,
link |
you say, well, if I count 10 of them,
link |
now I have 5,000 pistons, strikes,
link |
because I observed that pattern,
link |
and so it's the same concept there,
link |
and it's just a property of the engine.
link |
So you don't really need to hard fork it in,
link |
and because you can build proofs that way,
link |
now you can use those proofs to do like clients,
link |
and you can use those proofs to do other things,
link |
because you can just use that as something
link |
that comes with the history,
link |
you don't have to have the whole blockchain.
link |
Now, is this a weird property
link |
of multiple proof of work chains?
link |
It has to be key to the particular consensus algorithm,
link |
but usually there's some portability
link |
in this type of thing.
link |
Like we're right now exploring,
link |
can you do NEPA piles with Prism
link |
or any of these sharded proof of work protocols,
link |
but it looks like you can.
link |
The closely related is log space mining.
link |
So you can use this concept,
link |
and instead of having the entire blockchain
link |
to be able to mine,
link |
you can use a compressed representation of it.
link |
We wrote a paper called Log Space Mining
link |
that basically explains how to do that.
link |
So your miner only has this very small micro ledger
link |
as opposed to the entire ledger.
link |
How does it connect back to the entire ledger?
link |
How does the compressed?
link |
Because you have those red blocks,
link |
you have those special things.
link |
And so you know that the state you're working on
link |
is actually legitimate, right?
link |
So the map goes both ways?
link |
Yeah, pretty cool.
link |
Wow, that's really interesting.
link |
Yeah, and DNS is a genius.
link |
He's a really, really smart kid.
link |
And he got his PhD under us.
link |
He went to University of Athens,
link |
and he was a Agilos's graduate student.
link |
And now he's doing a postdoc at Stanford under David Shee.
link |
And this is literally the only thing he does.
link |
He does interoperability, sidechain stuff,
link |
NEPA piles and so forth.
link |
And he's written a lot of great papers on it.
link |
And that was a testimony to hard work
link |
for getting the paper published
link |
because the paper came out in 2016.
link |
But I think it took three or four years
link |
for it to go through a peer review.
link |
He kept trying to push it one conference
link |
after a rejection, after another rejection,
link |
but he got it through.
link |
Real proud of that kid.
link |
And then he's just doing all this beautiful derivative work
link |
now, like log space mining and so forth.
link |
So Reddit, and he suddenly says starts with Reddit,
link |
you know, it's gonna be fun.
link |
The top question on the Cardano subreddit,
link |
which is quite a wonderful place by the way,
link |
was can you get Charles to play devil's advocate
link |
If it's going to fail, what would failure look like
link |
and what are the most likely reasons it would fail?
link |
Okay, well, there's the failure.
link |
For example, I said one of the project goals
link |
was to achieve self evolution.
link |
So if it doesn't achieve that work
link |
and involve itself iteration by iteration,
link |
then obviously the product didn't do what was intended.
link |
If it continuously required the supervision of custodians
link |
in order for it to succeed, the system just won't work.
link |
The good news is we have a lot of data showing the opposite.
link |
You know, we used to run an federated model
link |
and now we're completely decentralized
link |
for block production, but that didn't just happen overnight.
link |
I mean, there was a whole process
link |
with the incentivized test net
link |
and the stateful pioneers program
link |
and the launch of Shelly and the decrementing
link |
of the decentralization parameter.
link |
And every step of the way people showed up
link |
and had to do things.
link |
And we went from several to thousands of people
link |
who are regularly maintaining the infrastructure.
link |
But there's no guarantee that that would be sustainable.
link |
And there's no guarantee that the next step,
link |
the smart contract step will achieve what we want.
link |
And the next step, the governance step
link |
will achieve what we want.
link |
I mean, it's an experiment on all these types of things.
link |
All cryptocurrencies, all companies are in a sense
link |
experiments when they are evolving the business model.
link |
And as our case, our business's systems and society,
link |
we're offering to the world a vision
link |
of how to run humanity in a different way.
link |
And the only way the system can do that
link |
is by millions of people joining the system,
link |
self evolving the system and growing it
link |
in that particular direction.
link |
Another failure scenario would be
link |
the system evolves in the wrong direction.
link |
So it's self evolving,
link |
but it goes into a more centralized dystopian way.
link |
And that's problematic as well.
link |
What would that look like?
link |
What would dystopia, self evolution
link |
toward dystopia look like?
link |
A small group of actors have total control
link |
over who gets to use the system
link |
and how they get to use the system.
link |
And your use of the system is monitored
link |
and shared with that small group of actors.
link |
So social credit in China is a great example of that.
link |
Small group of people have access to that.
link |
And then your experience in Chinese society
link |
is determined by it.
link |
So that's an example of a failure mode.
link |
And then another could be just network effect.
link |
We start experiencing a churn rate
link |
and inputs don't match the outputs
link |
in that you lose more than you gain
link |
and then over time the system dies off.
link |
However, that's really hard in practice.
link |
Once you've reached a certain network effect,
link |
even if you become stagnant and stale,
link |
you tend not to lose your users.
link |
And our evangelism is unbelievable
link |
in the Cardinal community.
link |
I think we're number one for tattoos.
link |
And that's, if you think about that,
link |
it's a strange metric to have,
link |
but there are brands that associate that way.
link |
Apple and Harley Davidson and so forth,
link |
people tend to actually tattoo the logo.
link |
Those people don't leave.
link |
They don't actually walk away from the ecosystem.
link |
They're fanboys to the core.
link |
So there's a lot of people that are here for life.
link |
They don't care if it's dollar, eight, two cent data.
link |
They believe in the mission, vision and value
link |
of what we wish to achieve.
link |
And they've become evangelists in that respect.
link |
So the question is, does that community sustain itself?
link |
And also does that community not make the same sins
link |
and mistake of Bitcoin,
link |
where they become toxic and maximalistic
link |
and they start becoming highly religious
link |
about whatever beliefs they have?
link |
My hope is our community will be open and socratic
link |
and love the scientific method
link |
and be willing to entertain ideas without adopting them
link |
and discard ideas that are proven to be wrong.
link |
If we become dogmatic and embrace an orthodoxy
link |
that is counterproductive innovation,
link |
then it'll stall out the ecosystem.
link |
And you'll notice I never said price in any of this.
link |
I never said, hey, failure is if the price goes way down
link |
and successes if the price goes way up.
link |
That's unfortunately the metric that most people use,
link |
but I couldn't care less about it.
link |
Because the reality is if you construct a system
link |
that encompasses the entire globe
link |
and has billions of users,
link |
probably gonna be a pretty valuable system.
link |
That's a secondary thing.
link |
It's an after effect of having success
link |
and adoption, use and utility.
link |
Unfortunately, most people on Reddit
link |
and Twitter and other channels,
link |
they tend to just judge your entire success based on that.
link |
I had very few people when Shelly launched,
link |
even though it took us four years to get there,
link |
a lot of work, say congratulations on Shelly.
link |
But I had a lot of people when Ada reached the dollar,
link |
say we're so proud of you, amazing work,
link |
congratulations and so forth.
link |
And that's probably the most disheartening thing
link |
about the whole being around and doing this stuff
link |
where all the things you do only matter
link |
as long as it's making someone else rich.
link |
And in a way, I feel almost like a failure.
link |
Because that mindset means that we haven't yet
link |
inculcated the community in a proper way saying,
link |
hey guys, this is about more than money.
link |
It's about more than the value of Ada.
link |
What we're attempting to do here
link |
is reengineer the way society works.
link |
I'd like your voting to be different.
link |
I'd like your property to be different.
link |
I'd like you out of your cell phone
link |
to have a universal wallet.
link |
And when you go to Starbucks or wherever,
link |
you can buy your coffee with silver or gold
link |
or airline miles or something like that.
link |
And they get paid whenever the hell they wanna get paid.
link |
And I want those rails to be done with a system
link |
that puts you in charge, not someone else.
link |
And they say, yeah, that's all fine and great.
link |
As long as eight is $5, we're all happy.
link |
You see, so that's a problem.
link |
There are of course other things that could fail,
link |
like we could lose project cohesion.
link |
Lots of people could quit and die.
link |
But again, there's so much momentum.
link |
There's so many things here.
link |
The ideas are already out there.
link |
And there's no intellectual property.
link |
When you publish 100 papers,
link |
you write a million lines of code.
link |
That's something and it's permanent.
link |
And it's in the commons now.
link |
So it's just as much yours as it is mine.
link |
So there's no notion that somehow,
link |
if the core development company disappeared,
link |
then that concept is lost forever,
link |
like the library of Alexandria burning to the ground.
link |
It's there and someone else will take it,
link |
fork it and get it done.
link |
I mean, first of all, that's fascinating.
link |
The self evolution,
link |
you don't know which trajectories that's gonna take.
link |
But also there's could be singular events,
link |
like bugs in the system create an opportunity
link |
to hack the system.
link |
Is that something that you see
link |
as a potential failure case?
link |
Yeah, it's always a possibility.
link |
There can be flaws in the protocol design.
link |
Zcash was a great example of that
link |
where there was a subtle flaw
link |
and it damaged the fidelity of the cryptocurrency
link |
in ways no other cryptocurrencies ever experienced.
link |
Normally when you have a bug,
link |
the bug, you can see it like the Bitcoin overflow,
link |
the value overflow incident.
link |
Yes, Bitcoin can be created,
link |
but we can verify they weren't.
link |
So the monetary policy is preserved.
link |
When you have a bug with a private system like Zcash
link |
and it exists on the shielded side,
link |
there's no guarantee unless you can audit the total supply
link |
inside that shielded side.
link |
My understanding is you can't
link |
that somebody didn't exploit the bug
link |
and create trillions of these coins out of thin air
link |
and just hiding them on that system and dripping them out.
link |
And so the monetary policy is for every damage
link |
as a consequence of bug like that.
link |
It's probably the worst type of bug you can have
link |
for these types of products.
link |
So, no matter how good of a job you do,
link |
they have great scientists,
link |
they're great people there, great engineers there.
link |
You can always have something like that,
link |
seep its way in, leak its way in,
link |
and that lurks in the distance.
link |
But if that's a problem shared
link |
with every one of your neighbors,
link |
it's like everybody working on a nuclear power plant.
link |
Well, yeah, you can all die of radiation poisoning.
link |
Well, we all kind of knew that, didn't we?
link |
So it's like, I don't really think too much about it.
link |
I think the context of the question was more,
link |
what is Cardano specific over Ethereum or Bitcoin
link |
or any of these other things?
link |
And yeah, okay, existential lurking bug could happen.
link |
It's lower probability for us than the other systems
link |
because we use formal methods.
link |
And we use peer review inside the protocol design.
link |
So there's been more eyeballs and tools
link |
and techniques used to check things.
link |
And we actually have discovered a lot
link |
of weird wonky bugs before production
link |
and resolve those bugs.
link |
So it shows you the system works, it's a lot of fun.
link |
What about close kind of competitors?
link |
I don't know if you would put it that way,
link |
but if you look in the space of ideas,
link |
competitor cryptocurrencies like Polkadot,
link |
what is some interesting difference
link |
between Cardano and Polkadot?
link |
Technically, philosophically, historically,
link |
is that something you think about
link |
when you think about the future of Cardano?
link |
Yeah, I mean, we do.
link |
We actually have a whole group of people
link |
that do business intelligence and comparative analysis.
link |
And we're getting to a point
link |
where we wanna start eventually forking their code
link |
and running private versions of it
link |
and just playing around with things.
link |
Well, that's fascinating.
link |
Better, you see, Consensus actually does this.
link |
They actually did it with Eos
link |
and they wrote this lovely report like Trashing Eos saying,
link |
hey, by the way, all those claims these guys made
link |
are just not true.
link |
But it's nice to do that.
link |
It's nice to use your competitor's technology
link |
or competing protocol technology
link |
because you learn a lot along the process.
link |
There's always something there
link |
because they have different tradeoffs and customers
link |
that potentially are more interesting.
link |
Like right now we're grocking, how do we wanna do
link |
the side chain model of Cardano?
link |
Polkadot's actually a tremendously useful piece
link |
of infrastructure for that conversation
link |
because they copied part of our infrastructure.
link |
You know, Gavin's a trained computer scientist.
link |
He got his PhD from York and he read our papers obviously
link |
and he realized that Ouroboros was a really good
link |
starting place for building a proof of stake system.
link |
So Polkadot's consensus is very similar to ours.
link |
And so if you're saying, hey,
link |
how do you do a good side chain model
link |
with an Ouroboros style proof of stake?
link |
Well, we already have this parachain thing, right?
link |
And so now by just looking at that,
link |
I can kind of get an idea of how, one way of doing it.
link |
And so that's just beautiful that we live in a space
link |
where that's there, it's open source,
link |
and it's really good.
link |
You just say, okay, well, we'll just take that
link |
There's no shame, you know?
link |
The other side of it is that Polkadot
link |
really has focused a lot on commercial adoption,
link |
Silicon Valley adoption, getting real use in utility.
link |
I say in a much more sustainable way
link |
than Ethereum has focused on.
link |
Ethereum was kind of a spray and pray thing.
link |
Polkadot was more of like, hey, let's go ahead
link |
and actually curate our ecosystem more carefully.
link |
And we're gonna build it in a way where there's predictable
link |
or as predictable a cost as possible
link |
with the rollout of the infrastructure.
link |
And that's so important for a business.
link |
It's not necessarily important for an experiment
link |
or a startup where they're just trying to get
link |
populations quickly as possible,
link |
we'll figure out later.
link |
But if you're actually sitting here saying,
link |
I need to know what my expenses are three years,
link |
five years, 10 years into the future,
link |
you need predictability there.
link |
I think they have a better shot of it
link |
than anything in F2 or with currently Ethereum.
link |
Now, the big contrast between the two systems, those,
link |
we actually have native multi asset,
link |
we have a different accounting model.
link |
I think our base ledger is far more expressive.
link |
Our rate of evolution with proof of stake
link |
is much faster than ours
link |
because they're based on derivative work
link |
and we already have Oris Omega and other things there.
link |
I think we have a better, ultimately,
link |
a better side chain model will come
link |
because we have something called Mithril for that,
link |
but we learned a lot from their work.
link |
The other thing is that we thought about governance
link |
a lot more carefully in my view.
link |
And we have Catalyst and Voltaire
link |
and really the key there is saying,
link |
how do we make sure that every single person
link |
who holds data can participate in the network?
link |
That wasn't a high design priority of Polkadot.
link |
It was more a fast commercial adoption.
link |
The acquisition of customers will come
link |
to governance later.
link |
And those were just different business philosophies,
link |
but it's nice to have a competitor like that.
link |
And oftentimes I've said that Polkadot's like Ethereum 1.5.
link |
It's what F2 probably should have been.
link |
There was what Vitalik wanted to do,
link |
which was incredibly aggressive and brilliant,
link |
And there's so much execution risk in that plan.
link |
And I think they've had like six years
link |
of playing around with it.
link |
Had they gone down the Polkadot road,
link |
they probably would have been a market within 2018.
link |
And because they already had the network effect,
link |
they would have had years of building on that,
link |
And they already had a path to it too.
link |
All they had to do was just give Elaine Shee
link |
and her cohorts at Cornell a $5, $10 million grants.
link |
No white would have been the dominant protocol,
link |
not at Orboros in the proof of stake space.
link |
So it's really fascinating historically
link |
when you look at these things and the rivalries
link |
and what they did and what they didn't do.
link |
And Gavin had a chance to have C++ Ethereum be used
link |
as IBM's enterprise blockchain.
link |
The only reason they didn't do it is it was licensed GPL.
link |
And I think they wanted to re license Apache.
link |
If you ever talked to Bob Summerwall,
link |
he was there at the time and he had this amazing story
link |
about like these terrible fights where it's like guys,
link |
just re license the goddamn code.
link |
Let's figure out a way to make this happen
link |
so that we can get this huge network effect
link |
of being basically IBM's play.
link |
They didn't do it, they created fabric,
link |
these types of things.
link |
So there's a lot of lore and stories, not respect,
link |
but the space is better because of Polkadot.
link |
And there's a lot of good people there.
link |
Web three is a good concept.
link |
And we've run into their people in Germany and Zurich a lot
link |
and they've always been cordial and friendly
link |
and really affable.
link |
Before I talked to you about governance,
link |
which is one of the most fascinating things about Cardano.
link |
There's a lot of stuff to untangle there.
link |
Since you mentioned some humans
link |
in this wonderful story,
link |
you did make a video before we talked directed to me.
link |
Thank you so much for that.
link |
It came from a place of love.
link |
But it was basically saying as we have been,
link |
you would love to talk about the technology,
link |
about the future that you're creating with Cardano
link |
and just the future of the cryptocurrency space.
link |
I think you're kind of worried
link |
that you'll be talking to a journalist
link |
that's looking for clickbait content, that kind of thing.
link |
But I'm fascinated by human beings.
link |
I think you're all from an outside perspective,
link |
incredible human beings.
link |
I don't know about personal tensions,
link |
all those kinds of stuff,
link |
but I think you're changing the world together
link |
in different ways.
link |
And I just wanted to sort of give you an opportunity
link |
if there's in the name of love and friendship,
link |
is there something from your history
link |
over the past decade or so,
link |
outside of technology and the human side of things
link |
that you draw inspiration from, you draw insight from.
link |
You're just proud that happened.
link |
I mean, it's like asking Paul McCartney about John Lennon.
link |
Tell us about John Lennon.
link |
It's like, you know.
link |
How much do you hate Yoko?
link |
For almost eight years now,
link |
it's just been this reoccurring pattern every interview.
link |
Tell us about your time at Ethereum.
link |
Those six months you spent there that were so pleasant
link |
and enjoyable, tell us all about it.
link |
And tell us about your relationship with Vitalik.
link |
It's like, barely talk to the guy,
link |
I see him every now and then, like every two years,
link |
we say, hey, he says, hey, it's like, okay,
link |
maybe 10, 20 years in the future, you know,
link |
Walt Mossberg or Robo, Walt will bring us together
link |
like he did Steve Jobs and Bill Gates.
link |
And we can kind of talk about, you know.
link |
That was a tense conversation, by the way.
link |
The 2007 interview.
link |
Oh, great though, wasn't it?
link |
Yeah, that was the body language, that was art.
link |
It was, that was fascinating.
link |
That was a fascinating study of human nature.
link |
Yeah, so maybe that'll be us in like 10 or 20 years.
link |
Who the hell knows?
link |
The robot versions of all three of you.
link |
Yeah, my only point though, was that, you know,
link |
it's a closed chapter and it's funny,
link |
I was there for six months,
link |
I've been building Cardano for years,
link |
we've done all this stuff, I've been to 52 countries.
link |
I love talking about those experiences.
link |
And there's so many of them, I've met heads of state.
link |
You know, I went to Mongolia like eagle hunting
link |
and, you know, being bucked off horses
link |
and riding the sand dunes.
link |
We've invented all this new cool technology
link |
that the space itself is using
link |
and we've had a chance to sit on government panels,
link |
pass laws, 24 laws in Wyoming.
link |
I mean, there's like all this amazing stuff that's there
link |
and it's such a fun conversation.
link |
There's so many superheroes in that conversation,
link |
like Kailin Long and Taylor Limholm
link |
and there's Alex Schirpinoy, who we already mentioned
link |
that I met along the travels.
link |
I met Ralph Merkel, cool.
link |
I met all these amazing people along the way.
link |
I have fond memories of, by the way,
link |
you should interview him, by the way,
link |
the amazing guy does nanotech now.
link |
You know, I met, you know, I was hanging out
link |
with Sylvia McCauley and I remember before I launched
link |
Yalgrant, I said, you should really just do
link |
a Bitcoin cash style play and airdrop Bitcoin.
link |
What the hell are you doing distributing this?
link |
He's like, trust me, I know what I'm doing.
link |
You know, so it's like so many great conversations
link |
and so many great people.
link |
And what I've really noticed in this industry,
link |
when you separate the tribalism, the maximum side,
link |
there really is a love of creativity and building.
link |
And there's like no other industry like it.
link |
I've been in many different places in life
link |
and here people just love art, they love beauty,
link |
they love the unknown, they love pushing things,
link |
you know, really, you know, in some cases,
link |
not necessarily the most socially beneficial way,
link |
but they really love the challenge, right?
link |
And that has been fun.
link |
I wouldn't trade it for anything in the world.
link |
The dark side of the industry is that people love labels.
link |
They love saying this person's good, this person's evil,
link |
this person's a sociopath, this person's not.
link |
And by the way, they've never met that person.
link |
They've never interacted with that person.
link |
And they just say, well, I heard from this person,
link |
I read this book or I did that.
link |
I was like, oh, so some books written by a journalist
link |
makes $50,000 a year who's looking for a movie deal,
link |
say that somebody said this or did this
link |
in an unconfirmed way.
link |
So what can you assume for slander?
link |
I mean, so you just let it ride and you let it roll.
link |
And if it was just ending there, that'd be great.
link |
But the problem is it cascades and people just repost it
link |
and they relive it again and again and again.
link |
And then what do you do about it?
link |
You eventually just say, I'm not gonna talk about it anymore.
link |
And you move on and you say, you know what?
link |
If it's your problem, it's your problem,
link |
it's your reality that you wanna live in,
link |
I'll be defined by the things that I achieve and do
link |
and the people that we help and the things that we build.
link |
And, you know, since I started this industry,
link |
I've gotten to a point where not only do we have
link |
this amazing company with these incredible people
link |
who work at this company, but we also have the ability
link |
to pursue amazing different interests.
link |
Like I met Ben Gortzel and Ben and I are gonna do
link |
an AGI project together and of all places for Wanda.
link |
And he gave me this 85 fucking page paper.
link |
He was wearing that damn hat that he always wears.
link |
I think he showers with the hat on.
link |
He never takes that thing off.
link |
I think he refused, I interviewed him and he refused
link |
to tell me the story of the hat.
link |
He wouldn't tell me either.
link |
I interviewed him as well in Wyoming.
link |
And every time I call him, he'll have his shirt off,
link |
he'll have the fucking hat on.
link |
And now all I can think about is the hat.
link |
I wonder what the story there is.
link |
I know, it's like, it's gotta be.
link |
That might be the AGI.
link |
But anyway, he gives me this 80 page paper
link |
and he says, Charles, it's like the culmination
link |
of everything I wanna, this is how we're gonna do AGI.
link |
And I said, that's crazy, Ben.
link |
I said, I'll throw some money at it.
link |
So we're gonna hire some developers
link |
and I have no idea where it's gonna go.
link |
But I mean, I get to hang out with Ben Courtson.
link |
You know, that's fun.
link |
That's the kind of stuff.
link |
And that's the really cool side of the space.
link |
And it's what I enjoy in the Vitalik rival thing,
link |
the Ethereum thing.
link |
I try my best not to mention it.
link |
I hate the fact that still when Bloomberg
link |
or anybody else writes a story about me,
link |
they'll say, Ethereum co founder.
link |
Like, can you say something else?
link |
Well, I think if I've learned anything from the internet,
link |
you can't resist that kind of stuff.
link |
You just have to say Elon, it's the joke.
link |
I've noticed this.
link |
This is already starting to happen with me.
link |
It's like, people just make up stuff.
link |
They haven't made up anything interesting yet,
link |
And I've seen that with Bill Gates, for example,
link |
just stuff being made up.
link |
I mean, probably half of it is true.
link |
Sorry, internet, I'm sorry.
link |
But like, you know, I guess what I realized,
link |
this is the dark side of memes,
link |
is you can just make something up and it'll spread.
link |
And then that's it.
link |
And that's what happens.
link |
And the problem is half the world will believe it.
link |
It could be good stuff and it could be bad stuff.
link |
So I guess the hope is it bounces on the end.
link |
I tend to believe you almost want to play with that
link |
and not take it seriously.
link |
Just kind of laugh it off and enjoy life
link |
and keep creating, keep doing awesome stuff.
link |
Operating both in the physical space with other humans
link |
and in the digital space with humans and AI systems
link |
and just have fun.
link |
Because most of us in the long arc of history
link |
will be completely forgotten.
link |
None of it will matter.
link |
It'll all be some kind of just like H H Hacker's guide
link |
into the galaxy will just be one sentence
link |
that summarizes all of our existence.
link |
And the sad thing is most of us
link |
will not be part of that sentence or all of us.
link |
Well, thanks for all the fish, Lex.
link |
Thanks for all the fish.
link |
The dolphins are running this thing.
link |
And they're talking to the UFOs recently,
link |
which is very interesting.
link |
Because the UFOs keep going to the water.
link |
So we humans assume that the UFOs are here to visit,
link |
the aliens are here to visit us,
link |
but it's probably the fish.
link |
No, I just think it's next generation aircraft
link |
Oh, that we're just not aware of.
link |
But why are they talking to the fish?
link |
Well, that's the place you test hypersonic aircraft
link |
So that's the Russians with their hypersonic nuclear weapons.
link |
That's what we're watching.
link |
Rod's from God, man.
link |
So let me try to transition from UFOs to Abraham Lincoln.
link |
Lincoln said that nearly all men can stand adversity.
link |
But if you want to test a man's character, give him power.
link |
Do you think power and money can corrupt most people?
link |
And if so, do you worry of this corrupting force
link |
You're one of the leading minds in the cryptocurrency space.
link |
You're the leader of the Cardano project.
link |
You're the king of the rats.
link |
Does this corrupt your mind?
link |
Both the power and the money of it?
link |
Yeah, I mean, you see this most pervasively
link |
with people who inherit a large amount of money or title
link |
like dynasties like the melons or the Rockefellers
link |
The worst thing you can do to somebody
link |
is just hand them an enormous amount of power
link |
that they're not prepared for.
link |
And the challenge with this space is like everybody's young.
link |
And we're all billionaires now.
link |
And we have these cult followings
link |
and do all these things, right?
link |
Nobody really says no to you.
link |
Like for example, I have this ranch up in Wyoming
link |
and it has 400 bison on it.
link |
So now I'm a bison rancher.
link |
If somebody was monitoring, auditing, that'd be like,
link |
Charles, do you have any experience
link |
racing taking care of bison?
link |
So you think it's really a good idea
link |
to have this ranch with 400 bison running around.
link |
What the hell are you going to do with bison?
link |
Just have to figure out what I'm going to do with these bison.
link |
So we'll make a video game.
link |
We'll do crypto bison.
link |
But you're going to get one.
link |
I'm not pulling it.
link |
I'm not pulling it that string just yet.
link |
So I'm wondering how you're going to connect this back to power.
link |
And so my point is that when you are unrestrained,
link |
like literally no one can say no,
link |
or you have the ability to distort reality around yourself
link |
and you're not constrained by social customs,
link |
it creates a situation where you start losing perspective.
link |
You're not grounded anymore, I think.
link |
So it's less of a question of, will you become evil or not?
link |
It's more of a question of, will you lose so much touch
link |
with humanity that you just can't relate or understand people?
link |
And then inadvertently, by your actions,
link |
start harming people, either through the policies
link |
that you pursue or the things that you start building
link |
So I think the best inoculation against that
link |
is to surround yourself with activities
link |
that are utterly divorced from your reputation and status.
link |
The best thing are animals and gardening.
link |
Because a donkey doesn't care if you're a billionaire or broke,
link |
he'll shit on you exactly the same way.
link |
And so there's a humility behind these types of activities
link |
And there's an honest work component,
link |
like when you grow hay or whatever, you have to plant.
link |
You have to actually water, you have to irrigate,
link |
you have to actually be there.
link |
And you can't use some excuse while I was meeting
link |
the president of El Salvador.
link |
I was like, hey, it doesn't give a shit.
link |
It's heady, right?
link |
So it grounds it connects you.
link |
The other thing is you have to get used to giving away.
link |
All the best things in my life
link |
have come as a consequence of first giving.
link |
Like I got started in the cryptocurrency space
link |
by giving away a free class,
link |
Bitcoin or how we learn to stop wearing your love crypto.
link |
You did a free podcast, right?
link |
In life, if you give and you develop that mindset
link |
of I'm not attached to the things I have
link |
and if push comes to shove, it goes away.
link |
Usually you get more back.
link |
Like I gave away all my ether,
link |
I never received any of it, 293,000 ether.
link |
At the all time high over $1.2 billion.
link |
I give it to my secretary.
link |
I had no idea if it was gonna be worth anything or not,
link |
but he kind of got shafted.
link |
And I was like, well, they don't like me.
link |
So they don't like you by the transitive property
link |
So you're screwed.
link |
And he's like, well, I'm gonna go back
link |
and my wife is probably gonna divorce me
link |
and all this stuff.
link |
And then what do I do?
link |
And I said, well, I'll give you my ether.
link |
I don't know if it's gonna be worth anything.
link |
So, you know, he's still pretty good.
link |
So, you know, but then again,
link |
regardless of doing that, I now have Cardano.
link |
I have this great career.
link |
I've done all these amazing things.
link |
So I think that's the,
link |
there's a single best way of handling power
link |
is you have to do things to keep yourself grounded.
link |
In case of Washington,
link |
he was deeply connected to Mount Vernon.
link |
During the Revolutionary War,
link |
he was like sending letters,
link |
talking about the irrigation ditches
link |
and the barn and things like that.
link |
He was always connected to that.
link |
And then also develop a mindset
link |
that you're only here temporarily.
link |
Everything you have is finite.
link |
It's going to go away at some point.
link |
No matter how much you want to keep it,
link |
you will die and somebody else will have it.
link |
So you live for the next generation.
link |
You don't live for yourself.
link |
You look to the future and you say,
link |
what am I going to leave behind?
link |
What am I going to transmit?
link |
And then in that kind of mindset,
link |
always forces you to be more gracious,
link |
cooperative and collaborative with people.
link |
All these dictators, they are egomaniacs
link |
and they get connected to these fantasies
link |
and they live for themselves.
link |
Look at Xi and China.
link |
He's unraveling a power structure
link |
that was what made China, China today.
link |
After Mao, they said,
link |
we probably shouldn't have another one of those guys.
link |
And so he said, let's build something
link |
where there's checks and balances
link |
and no one person is going to run the whole show
link |
or else it'll descend and regress and we'll have problems.
link |
And then what he's done,
link |
he's thinking only about himself,
link |
not the best interest of China.
link |
So he's systematically unraveling a system
link |
they've been embracing for over 40 years.
link |
After he dies, the next guy who comes in,
link |
even as Xi is super competent,
link |
the next guy is going to horrifically abuse
link |
that power structure.
link |
And the same thing happened with the Romans.
link |
After Augustus, the great emperor,
link |
then suddenly down the line, you have Caligula and Nero
link |
and all these other terrible emperors
link |
that just destroyed everything
link |
that the republic and the empire sought to achieve.
link |
So you have to think for the future.
link |
You have to think in institutions and systems.
link |
You have to have things that ground yourself
link |
and you have to be fully prepared to lose everything
link |
and give up everything.
link |
After I left Ethereum, I had nothing, okay?
link |
Reputation was damaged, not a lot of money.
link |
Nobody really want to work with me.
link |
No one pick up a phone for two whole years.
link |
And so I was at bedrock in that experience.
link |
And now look where I'm at.
link |
I built all the way up to that.
link |
And so that wasn't by accident.
link |
It was, I had to surround myself with amazing people.
link |
Why would amazing people want to surround themselves with me?
link |
If I was this narcissistic asshole
link |
who just looks like it's me, me, me,
link |
everything would be a transactional relationship.
link |
It would be, okay, we'll get as much as we can
link |
and then run away as quickly as possible.
link |
Instead, it was, I'm going to invest in you.
link |
And maybe I'll win, maybe I won't win,
link |
but I'll be the last guy to leave the boat.
link |
If we're freezing to death, you get my coat
link |
and I'll just deal with the cold, that kind of mindset.
link |
You have to have that.
link |
I got that from my dad.
link |
He got it from his father.
link |
You know, my grandfather and great grandfather,
link |
my dad's, I grew up in Montana
link |
and they were like products of the Homestead Act.
link |
Very rough Montana.
link |
You know, a lot of people died and froze to death
link |
up there eating by animals or something.
link |
They were shot by their neighbors
link |
and nobody investigates anything because it's Montana.
link |
So the only way you survive is by taking care of each other
link |
and being a good member of that community.
link |
And if somebody gets big,
link |
you feel have this implicit desire to go and give back
link |
and take care of the community that you came from
link |
and invest in that community.
link |
Like I came from the mathematical community.
link |
I never completed a PhD,
link |
but one of the things that I'm doing
link |
is I'm going to put $20 million and set up a center
link |
to do automated theorem proving
link |
and we're going to heavily invest and lean
link |
because I'm super excited about mechanizing math
link |
and making machine understandable.
link |
I know all these guys who do this work.
link |
There's like all these mathematicians and computer scientists
link |
and no one pays attention to them.
link |
And they're kind of like the redheaded stepchildren
link |
of mathematics and they live on the boundaries and periphery.
link |
Meanwhile, they're super passionate
link |
and they absolutely love what they do.
link |
And if only they had the right resources,
link |
within 50 or 100 years, what they're doing
link |
can probably come the dominant model
link |
of how to do mathematics.
link |
So I'm now in a position where I have the financial means
link |
to take care of these guys.
link |
So all I have to do is just call them up and say,
link |
hey, would you like to work with?
link |
And cut a check and it's done.
link |
So the interesting tension here,
link |
so we talked about ways to prevent power
link |
from corrupting a human being
link |
that's in a leadership position.
link |
There's an interesting case in the cryptocurrency space
link |
of Bitcoin and Satoshi Nakamoto
link |
that basically doesn't have a leader.
link |
So the benefit of a leader is somebody
link |
that perhaps even when they don't carry power
link |
maintains a little bit of a flame of vision.
link |
I suppose Bitcoin has that
link |
with the original work by Satoshi Nakamoto
link |
and the sort of that, even though it's anonymous,
link |
the idea still lives on through the community.
link |
But nevertheless, the leader is anonymous.
link |
Do you think this is an interesting case study
link |
about leadership is for the leader to maintain anonymity?
link |
It was a saying from Sun Tzu paraphrasing it,
link |
the best leaders are felt but never seen.
link |
Yeah, so I think that's exactly right.
link |
The less the leader can be in the room
link |
and the more the principles of the leader are in the room,
link |
the better for the firm.
link |
Because what you're doing is creating more leaders that way.
link |
You're inspiring the next generation, the next wave,
link |
the next circle out to act with those principles
link |
but contribute in their own way and their own flair.
link |
And so you gain collective intelligence
link |
inside the organization
link |
instead of just constraining yourself
link |
to however the great the leader can be.
link |
The other side of it is if the leader's principles
link |
are too strong, so this is the dark side of it,
link |
you end up with what's happened in Disney
link |
with Walt Disney after he died for like 20 years.
link |
People say, well, we don't do that
link |
because Walt Disney wouldn't do it that way.
link |
Or to a lesser extent, Apple.
link |
They say, oh, we don't do that
link |
because Steve Jobs wouldn't do it that way.
link |
Well, he's dead, he's gone, move on.
link |
So somebody I think asked you whether you're a clone
link |
or a deep fake and you said that you admitted,
link |
you slipped up on video saying that you're a deep fake.
link |
I'm actually a poker playing robot that escaped a lab.
link |
The truth finally comes out.
link |
But I said on that topic,
link |
who do you think is Satoshi Nakamoto?
link |
Is it possible that you are in fact, Satoshi Nakamoto?
link |
If you have a preponderance of the evidence,
link |
I think the most likely candidate would be Adam Back.
link |
It's the Occam's razor candidate.
link |
And mostly because he's the right place, right time,
link |
right age, right skill set.
link |
If you look at the design of Bitcoin,
link |
the types of decisions like the use of fourth,
link |
the scripting language,
link |
that was pretty common in English
link |
and European pedagogy in the 1980s and 1990s.
link |
It's like an example language for a stack based assembly.
link |
And like little stuff like that, little quirks like that.
link |
Also he created HashCash,
link |
which was the predecessor of Proof of Work.
link |
He just kind of got a chip on his shoulder
link |
that Microsoft never did anything with it.
link |
So he's probably looking for something.
link |
He grew up with all the cipherpunks.
link |
He knew of Hal Fennie.
link |
He knew of all these people.
link |
He knew Phil Zimmerman.
link |
You don't think it's Hal Fennie?
link |
Well, no, because the code was not good enough.
link |
Hal was a Unix, Linux guy.
link |
He was a talented programmer.
link |
He was a talented developer.
link |
The initial code for Bitcoin
link |
was developed to look like on a Windows machine.
link |
You know, Adam worked at Microsoft, go figure.
link |
And also it was very academic.
link |
And it had to be cleaned up
link |
and a lot of things had to be patched up and fixed.
link |
If it got like Hal developed it,
link |
it probably had less of the, you know,
link |
let's use secp246k1 and these types of things
link |
hey, let's build this cool engineering thing
link |
and we'll figure out the protocol design later on.
link |
It just stinks of an older academic,
link |
the initial design of Bitcoin
link |
and the initial rollout of Bitcoin.
link |
And then brilliant people like Greg Maxwell and others,
link |
they came and cleaned it all up.
link |
And lo and behold, where is Adam?
link |
It's like the CEO of the largest Bitcoin development company
link |
in the space who's trying to keep working on
link |
and building out Bitcoin.
link |
And where the hell was Adam when Satoshi was around?
link |
I don't think there was any overlap
link |
where they were both together at the same period of time.
link |
But I mean, if you really care,
link |
you can even do this.
link |
There's a lovely paper written by the US Army.
link |
If you just Google like code, stalometry, US Army,
link |
it's a technique where you can use ML
link |
and a few other things to actually kind of develop
link |
a fingerprint for the way that people write code.
link |
So all you gotta do is take the original Bitcoin source code
link |
and then take all the open source repos
link |
from around that time period and before
link |
and see if there's a match between those two.
link |
Now, if he's really good at creating an alias,
link |
probably not so good at obfuscating the code that was written.
link |
So the odds are that you'd probably find a match
link |
to a repo that's connected to a real life human identity
link |
or at least a weaker Opssec
link |
because you're younger, you have weaker Opssec.
link |
Do you know if people have tried that?
link |
I don't think anybody's actually done it,
link |
but there's actually a beautiful paper.
link |
It's like 94% accurate, the code stalometry.
link |
The code stalometry, so for various reasons,
link |
I've worked with people that work on stalometry
link |
of natural language.
link |
Okay, and I think it matches closest to Nick Sabo
link |
if you actually do the written stalometry analysis
link |
of Satoshi's writings to Salvatore.
link |
So I meant stalometry as a field.
link |
I didn't actually look for application
link |
for this particular problem,
link |
but so you're saying Nick Sabo is the closest match.
link |
Yeah, somebody did it years ago.
link |
I didn't look at if the model was a sound or not,
link |
but I just remember reading on a Bitcoin talk
link |
and Sabo is another one of the common candidates.
link |
How many Sabo and Adam are probably the top three things
link |
that people could list.
link |
What do you think about this idea of anonymity,
link |
of publishing something anonymously?
link |
Would you ever consider publishing a paper?
link |
You've been part of, I mean, the Cardano ecosystem
link |
has published a lot of incredible papers.
link |
Is there ever a value to publish anonymously?
link |
Well, every paper that goes through the referee process,
link |
the authors are ripped off.
link |
So you don't actually see the authorship
link |
when you submit to the conference.
link |
So that's just best practice.
link |
But the question is,
link |
do you preserve the anonymity post conference
link |
and actually not reveal the author of the paper?
link |
It's a detriment for the deals we make
link |
because the whole premise of working with our company
link |
as an academic is that you're gonna have amazing coauthors
link |
and your work is gonna appear in great conferences,
link |
great journals, and as a consequence, you get tenure.
link |
If you publish anonymously,
link |
it's like being like doing clearance work
link |
in high energy physics or something like that.
link |
It's like, after 30 years of this amazing career
link |
working on nuclear weapons and classified reactors,
link |
you finish and then you go to apply for a job
link |
and they're like, so what have you done
link |
for the last 30 years?
link |
Stuff, where is it on your CV?
link |
Well, I can't really talk about it.
link |
Okay, welcome to community college.
link |
So you get really screwed if you do that.
link |
So there's a misalignment of incentives
link |
in the academic world towards anonymity.
link |
And generally it's only done
link |
when you're doing something very controversial
link |
or there's a whistleblowing type of a component.
link |
It's not typically done for foundational work.
link |
And Satoshi was really one of the first things
link |
because like if there was a Satoshi dox themselves,
link |
and I don't think it's possible anymore,
link |
but if he or she did that,
link |
that's like a Nobel Prize in economics, likely.
link |
You're on the shortlist for that.
link |
And there's enormous accolades
link |
that would come beyond the monetary incentives
link |
of being able to dox yourself.
link |
But that'd be cool if they give a Nobel Prize in economics
link |
to an anonymous, to Satoshi Nakamoto.
link |
It's been proposed and it was turned down.
link |
Yeah, so yeah, I mean,
link |
there are a few people in our company
link |
that have done Sadonymous publications
link |
like the, if you look at the Chimerical Edgers paper,
link |
that's a, it's not a real name, it's a crazy name.
link |
It's a Sadonymous publication.
link |
And you know, but that's usually for throwaway work.
link |
There is one project we inherited
link |
from an anonymous person, which is fascinating.
link |
It's called Qedidas.
link |
And it's basically an extension
link |
of the QED manifesto from the 90s.
link |
And the pseudonym is Bill White.
link |
And I think it's some anonymous mathematician,
link |
but I can't figure out which one it is.
link |
But basically it's a marketplace for deduction.
link |
So it's like a, so it's like this magic machine
link |
where you can create incentives for people
link |
to write mathematical proofs and a theorem prover
link |
and make some money from it.
link |
So there's some cool work that's there.
link |
And it's sad that Bill stayed anonymous
link |
because I think that could have been easily published.
link |
And there was a lot of really cool things
link |
that could have been done with Qedidas.
link |
So you did say the success of Cardano,
link |
sort of the vision you have is for you
link |
to have less and less power over time.
link |
So this idea of governance,
link |
what's your vision for a decentralized,
link |
secure governance system?
link |
So the first thing you have to do
link |
is you got to look at meaningful metrics,
link |
not vanity metrics.
link |
So what does it mean to have legitimacy
link |
in a governance system?
link |
You can build any governance system you want.
link |
You have a dictator, right?
link |
Like Bob is in charge.
link |
It's like, whether you like Bob or not,
link |
It's not very legitimate.
link |
And you can have pure democracy
link |
where every single person votes
link |
and then nothing ever gets done.
link |
County dog catcher is like a six year election
link |
or something like that.
link |
So there's a spectrum there
link |
between absolute power to one
link |
and perfectly egalitarian power
link |
to every single potential participant inside the system.
link |
And then the question is, okay,
link |
well, how do you handle choice architecture in that?
link |
So like, are you asking your people about every question?
link |
Or are you asking your people
link |
about a subset of questions
link |
related to a particular set of topics,
link |
but then they're not allowed to talk about other topics?
link |
Like for example, are they allowed to change the tax rate
link |
but they can't change freedom of speech?
link |
That kind of a thing.
link |
So the first thing you have to do
link |
when you build these types of systems
link |
and they get to a certain scale
link |
is you have to build some mechanism
link |
for people who are interested in governance
link |
to self select and participate.
link |
Just create a collection bucket.
link |
In Bitcoin, we had Bitcoin talk
link |
and Bitcoin Reddit and these things
link |
and eventually the GitHub repos and these things,
link |
there was a place to go if you were interested.
link |
And you need some sort of change management system
link |
where people who want to evolve the system
link |
can write it down in a very careful way.
link |
So in Bitcoin's case,
link |
it was Bitcoin improvement proposal
link |
and Ethereum, it's the Ethereum improvement proposal.
link |
And for us, it's the SIP,
link |
the Cardano improvement proposal.
link |
But it's just a structured way
link |
of discussing how you wish to change.
link |
Then there's a question of,
link |
do you want to do this implicitly or explicitly?
link |
In the case of Bitcoin and Ethereum,
link |
it's an implicit system.
link |
So there's no on chain voting,
link |
there's no like five people said this
link |
and four people said this, so we do this.
link |
In the case of Cardano,
link |
we're actually explicitly inviting this.
link |
This is one of the biggest differentiators
link |
between Cardano, Polkadotios and these other things
link |
is that we're really serious about governance
link |
to the extent that we're actually doing
link |
foundational research in eVoting.
link |
We're building new voting systems,
link |
we're exploring preference voting and quadratic voting.
link |
And the long and the short is
link |
that we want more and more people
link |
to participate in voting for things.
link |
And you have to start somewhere.
link |
So our hypothesis is we can bootstrap the system
link |
with the treasury system.
link |
So in Cardano, some of the inflation goes
link |
to the block producers,
link |
just like any other cryptocurrency,
link |
but some goes into a decentralized treasury,
link |
which has over a billion dollars of ADA in it.
link |
So it's a lot of money.
link |
And that treasury is not on our mind control
link |
or the foundation's control,
link |
it's actually controlled by the community as a whole.
link |
Through a program called Catalyst.
link |
And so all these people can come together,
link |
they can submit spending ballots
link |
and other people who hold ADA can vote to approve that.
link |
What's nice about it is you have a growth engine
link |
to improve two accesses.
link |
One is absolute participation.
link |
So increase the amount of people
link |
who hold ADA participating.
link |
So the absolute number of people participating.
link |
And the other is meaningful participation.
link |
So the depth of participation.
link |
Did you just show up and vote?
link |
Or did you spend hours debating things on idea scale,
link |
the innovation management platform,
link |
interacting with the funding proposal,
link |
going back and forth.
link |
And there's dozens of little things like that.
link |
Now my hypothesis is if you run this with enough iterations,
link |
eventually you get to a certain critical mass,
link |
like over 50% absolute participation
link |
and a high level of meaningful participation,
link |
where you can move beyond funding
link |
and you can start actually having meaningful questions
link |
about protocol design and improvement proposals
link |
And then what you can do is you can roll out
link |
new voting systems and new social structures.
link |
And you can let them start voting on training wheels
link |
like system parameters.
link |
Like for example, the minimum transaction fee
link |
or that K parameter for the amount of stake pools
link |
or these types of things.
link |
Then they build enough competency there
link |
and they move up a next level
link |
and they actually start talking about hard forks
link |
using the update system, the hard fork combinator system.
link |
See, so that's how you.
link |
Voting on a hard fork.
link |
Voting on a hard fork.
link |
You can't do it unless your social dynamics are right
link |
and your voting system is right.
link |
And by the way, you also need to write a constitution
link |
around the same time.
link |
Because not all hard forks are created equally.
link |
The kinds of things that would add support
link |
for a new cryptographic primitive
link |
are distinctly different from the kinds of things
link |
that would change your monetary policy of the system.
link |
So the constitution would be written
link |
and maybe you can comment on
link |
what is the innovation management proposal system?
link |
So we partnered with a company called IdeaScale
link |
and they run a kind of a side platform.
link |
So people are interested.
link |
They kind of, that's kind of our version of a forum.
link |
They sign up and there's special tools
link |
on that platform for discussions that are productive.
link |
So they don't descend it
link |
to kind of like trolley Reddit style conversations,
link |
but they're much more focused
link |
around how's your product building out.
link |
And by the way, we're gonna add more infrastructure
link |
In fact, our chief of staff, Tamara Hasson,
link |
she's working on setting up an incubator and accelerator.
link |
And we have lots of cool partners
link |
we've talked with in that space.
link |
And it's the same concept.
link |
Your idea comes in,
link |
what enters the system should not be
link |
what gets approved on the other side.
link |
It should go through some sort of gauntlet,
link |
some sort of crucible
link |
where you iterate your way through
link |
and there's all kinds of optimizations and upgrades
link |
and evolutions and combinations and destructions
link |
And then by the time you get to the other side
link |
either the idea just dies on the vine
link |
because it was a bad idea
link |
or it's a significantly stronger,
link |
far more fundable thing
link |
and potentially even gets attached with accountability.
link |
So you don't just fund the idea.
link |
You'd actually fund the auditor at the same time
link |
who actually holds the person accountable
link |
because the blockchain is not a real company.
link |
It's a ethereal thing.
link |
You need a counterparty to hold someone accountable
link |
who's real for that type of stuff
link |
and that type of funding.
link |
So that's what we're doing this year.
link |
It's like we have a whole team of people,
link |
partners like Governance Live and IdeaScale
link |
and papers we've written
link |
and about 30, 40,000 people regularly participating in this.
link |
So it's a huge social experiment
link |
and we're learning an enormous amount
link |
and then our goal is by the end of the year
link |
to have a meaningful percentage
link |
of the entire cardinal population inside of it,
link |
Then once you're at that threshold,
link |
now you have democratic majority of the entire system
link |
and you can have a real conversation about,
link |
okay, how do we write a constitution
link |
for this type of a system?
link |
And sorry to interrupt,
link |
but so the constitution,
link |
people still argue about it because natural language,
link |
lends itself to multiple interpretations.
link |
Is it possible to formalize some of these ideas
link |
that reduce the ambiguity?
link |
Everything is old is new again.
link |
We were talking about loge bond back in the day, right?
link |
So there's definitely formal languages
link |
you can use to express these things.
link |
That's why I'm so interested in things like address
link |
and Coq and Acta and theorem proving
link |
because that's exactly what you're attempting to do
link |
is to express some concept or desire or construction
link |
in a language that's machine understandable
link |
and manipulatable.
link |
In particular, how does the system know its own design?
link |
So what is the reference of a cryptocurrency?
link |
Usually it's a canonical code base,
link |
like here's Bitcoin Core and the C++ code
link |
is that is the canonical code base.
link |
But actually that's not right.
link |
You should have specifications, blueprints
link |
that are implementation agnostic
link |
as your canonical code base.
link |
And can your system know those specifications,
link |
understand those specifications
link |
and can your change management system be for that?
link |
And then can you provide a proof
link |
that your client is by similar to that specification?
link |
So that's 10 years in the future,
link |
but that's where you would go with that kind of a concept.
link |
But you're tending towards the formalism?
link |
Eventually, but that's not necessary
link |
for the system in the short term.
link |
It's good enough just to have,
link |
I know in a winner and say the Haskell client is that.
link |
And then what you basically do is you vote on a SIP
link |
and then once it's approved,
link |
then you go and implement that.
link |
And there's some mechanism to trigger the update system
link |
to update the reference client.
link |
Do you have an example of a SIP,
link |
a Cardano Improvement Proposal?
link |
Yeah, like the Kurt Benefit Pledge, SIP 007.
link |
Yeah, everybody loves that.
link |
I'm gonna change my luggage code now, Lex.
link |
Yeah, so basically it just has to do with the Pledge.
link |
So Pledge is a certain amount of ADA
link |
that a stake pool operator will set aside
link |
and connect to his pool in order to be listed
link |
And actually it's connected to how much income you make
link |
as a pool operator.
link |
So if you set it too high, you have a consolidation
link |
and you have lots of pools.
link |
If you set it too low,
link |
what will happen is larger pools
link |
will tend to fragment
link |
and actually run multiple instances of themselves.
link |
And so there's this delicate parameter
link |
that you have to tweak.
link |
And so we have a formula for it,
link |
our formal specification that's quite involved.
link |
And so one of the community members came and said,
link |
well, I think we can massively simplify this design
link |
and actually get a better result
link |
for smaller stake pool operators.
link |
And so it's SIP 007.
link |
And there's actually a lot of conversation
link |
and people are thinking about it.
link |
And it was just stunning for me
link |
because to understand how to write a SIP like this,
link |
you actually have to read like a hundred pages
link |
of mathematical pros in the formal specification.
link |
So the guys who wrote, I was like, fuck yeah, this is great.
link |
I'll just say an example of a SIP.
link |
That's one thing, but it can be as big as,
link |
hey, I want to add like quantum resistance to the system.
link |
And here's how you do that, you know, like quantum VRF
link |
and I want to put XMSS and all this other stuff.
link |
So there's a lot you can do.
link |
And you can do it indirectly or implicitly
link |
where there's some social process outside of the system
link |
where you eventually approve a SIP
link |
or you can do it explicitly where you directly vote
link |
or some representative democracy,
link |
some group of representatives directly votes.
link |
And then once you've decided it's there,
link |
the constitution is necessary
link |
because you need to know the decision threshold.
link |
Is it super majority or majority?
link |
And also the voting process.
link |
Like a lot of policy experts believe
link |
that if Brexit was a multi stage vote,
link |
it would have never passed
link |
because what people would have done the initial stage
link |
in all the horrors of Brexit
link |
would have been broadcasted to society.
link |
And then there would have been some reluctance
link |
and buyer's remorse on it.
link |
And then the second round would have failed
link |
or something like that.
link |
But because it was just a singular event, you know,
link |
it's like they passed it now.
link |
British are all passive aggressive about it with no sign.
link |
Very well, we shall remove from Europe.
link |
And so your voting system has a lot to do
link |
with, you know, the outcome you get.
link |
The other thing is, you know, what type of voting?
link |
Is it just an absolute or is it preference voting?
link |
Like, so, you know, you pick your favorite sip,
link |
your second favorite sip or something like that.
link |
You know, so Condorcet or Borda are two examples of systems.
link |
Are you a fan of those like the rank choice vote?
link |
I love them so much, especially for political diversity.
link |
Because this whole concept of throwing your vote away,
link |
if it's Alice or Bob,
link |
you're always going to get a,
link |
it's self parked it at best, right?
link |
The giant, the, yeah, yeah, you know, you know the one.
link |
Turd versus I forget what else, douche versus turd.
link |
Douche versus turd, self park.
link |
So if it's ranked order, you know, or preference voting,
link |
you never have that situation
link |
because you always pick your favorite
link |
and you get a lot more diversity on the ballot.
link |
But then you have arrows, paradox,
link |
and you know, all these other things that come up.
link |
So it's, there's no perfect system.
link |
And really you have to be comfortable
link |
with governance in a game of inches.
link |
And you start by some guiding principles.
link |
The guiding principles is more is better
link |
and productive interactions are better
link |
than destructive interactions.
link |
And you have to be able to quantify those things.
link |
As long as you have an engine
link |
that allows you to grow in those directions,
link |
then you have a lot more people on for the ride
link |
when you actually start talking
link |
about these bigger and bigger things.
link |
The other challenge was
link |
that we had to decentralize development of the protocol
link |
and the brain of the protocol.
link |
We have fully decentralized the brain of the protocol.
link |
The peer review academic process means
link |
that there's now an academic incentive
link |
for graduate students, postdocs, and professors
link |
to spend enormous amounts of time writing papers
link |
in our ecosystem because they want tenure, you know,
link |
they want to, and we show that you can get it.
link |
We should, there's been a lot of people
link |
who've gotten great academic careers
link |
from working with us.
link |
So yeah, keep adding to that pile of 105 papers.
link |
And that doesn't need Charles Hoskins
link |
and it doesn't need IOHK funding or anything like that.
link |
They're on, we're already seeing unfunded derivative work
link |
from people who are completely disconnected
link |
from us writing papers about stuff in our ecosystem.
link |
So just continue to develop that, but that's looking good.
link |
To centralize development, we're working on that as well.
link |
Our goal is sometime in the next few years
link |
to make sure there's at least three independent clients,
link |
so three completely independent teams and code bases,
link |
and also to get a separation of the commercial clients
link |
from the reference code and turn the reference code
link |
into like a formal specification, a formal blueprint,
link |
and then have that change managed
link |
may be completely decentralized.
link |
The core developers are actually voted on
link |
and the SIP process is used to change that,
link |
and then some way of proving
link |
that your client follows the specification
link |
as a use of the protocol.
link |
Is there beyond the Cardano ecosystem
link |
these ideas of distributed governance?
link |
Do you see ways it could revolutionize politics,
link |
you know, our governments?
link |
Oh yeah, like Ethiopia deal for example,
link |
we have five million people
link |
that we brought in with the DIT system there.
link |
That's gonna follow them throughout their whole life.
link |
Right now they're high school students,
link |
but when they're in their 20s, 30s,
link |
they're gonna want to use that for eVoting
link |
and for payments and so forth.
link |
Can you describe the Ethiopia project
link |
because that's fascinating.
link |
Yeah, so we spent four years in Ethiopia.
link |
I went there in 2017 and shook a lot of hands,
link |
kissed a lot of babies, and they said,
link |
oh yeah, we'll have it all done in six months.
link |
Everything is a lot of fun there,
link |
but it takes a little bit longer
link |
than you'd think to get anything done, and that's okay.
link |
I really love Ethiopia, it's a beautiful country.
link |
So we spent four years,
link |
we trained a whole cohort of developers,
link |
and then we started a relationship
link |
with the Ministry of Education,
link |
and they care a lot about proper credentials.
link |
One of the biggest problems they have
link |
is when someone graduates,
link |
it's really hard for them to prove the quality
link |
of the credentials that they have,
link |
and it's really hard for them to prove the knowledge
link |
So if you want to be an ICT outsourcer,
link |
how does somebody know that this is a real programmer,
link |
or how does somebody really know that this is a real doctor,
link |
or whatever the hell you're outsourcing?
link |
So they said, can you come and build
link |
a digital identity system for credentials?
link |
So every student in the country at some point
link |
will get a did, a decentralized identifier,
link |
and then you can prove all sorts of things about them,
link |
like GPA, or what particular diploma they hold,
link |
or blah, blah, blah.
link |
And then the beautiful thing is the way we designed it
link |
is it's extensible to include payments,
link |
extensible to include proofs about themselves,
link |
like are you over the age of 21, that kind of stuff,
link |
and then eventually it can be used
link |
to link into a cryptocurrency system.
link |
In this case, we built it for Cardano.
link |
So Italo Prism is the framework we're using for it,
link |
every student will get one,
link |
and then those students will be able
link |
to use those credentials in the Cardano ecosystem,
link |
eventually for DeFi, like lending, and so forth.
link |
So it's the largest blockchain deal of its kind,
link |
and it probably will grow to 20 million people
link |
over the next 24 months.
link |
The other beautiful thing about Ethiopia
link |
that people don't know is the prime minister
link |
is a cryptographer, and he's like 40s, 50s, a young guy,
link |
and he can actually read the papers, if you're right.
link |
And so he's a really bright guy,
link |
and he's written this beautiful agenda
link |
called Digital Ethiopia 2025,
link |
and one of his things in the agenda is digital identity.
link |
He wants every person in the country
link |
to have a digital identity by 2025,
link |
and he wants to implement an eVoting system
link |
at some point for that.
link |
So when you ask about governance,
link |
all these governance tools that we're constructing
link |
for Cardano are completely reusable for a nation state,
link |
a company, and by the way,
link |
if you create a Cardano application,
link |
will eventually be reusable for you.
link |
Because if you have a DeFi protocol,
link |
you need a voting system,
link |
why the fuck do you have to reimplement that?
link |
Native multi asset, anything that works on ADA
link |
works with a native multi asset.
link |
I can, you can use our voting system for your asset.
link |
So you get a government in a box
link |
that you can parameterize any way you want.
link |
And similarly, when a government does something
link |
with Cardano, not only did they get all this
link |
amazing infrastructure, but wait, there's more.
link |
They actually get this amazing voting system
link |
that they can use for small or large scale decisions
link |
that they wanna do.
link |
On the US side, we're thinking about trying to roll
link |
something like this out in the state of Wyoming.
link |
You know, there's been tons of laws that are passed.
link |
It's a very friendly crypto place.
link |
The very least, it'd be fun to see if we can do
link |
the Republican Democrat primaries with preference voting
link |
and voter registration this way and do it,
link |
and do it completely online with an E voting system.
link |
So, you know, that's something we'll be pursuing in 2022.
link |
You think there's some openness to that?
link |
That's the one good thing about the craziness of Trump.
link |
He's made like half of America,
link |
I think the election system is completely
link |
air pairably broken.
link |
So, you know, you walk in and it's like,
link |
we're gonna go kill Dominion.
link |
And they're like, yay, that's great.
link |
Whether you believe that or not,
link |
you know, it's created a market opportunity,
link |
created a lack of faith and credibility in the system.
link |
To improve the system.
link |
What do you think about El Salvador becoming
link |
the first country to approve a cryptocurrency,
link |
Bitcoin in this case, as legal currency?
link |
And where's this trend going?
link |
First of all, this event,
link |
if we mentioned the Bitcoin conference,
link |
the Bitcoin folks believe that this is a monumental event.
link |
Do you think this is a start of something new?
link |
Well, they're both right.
link |
The critics and the pro people.
link |
So the critics are saying this is a nothing burger
link |
and it's just a publicity event for El Salvador.
link |
And then the people say this is the most monumental event.
link |
They may actually be right
link |
because there's reciprocal agreements.
link |
When a country issues a currency,
link |
other countries honor that usually.
link |
And it trades on Forex exchanges.
link |
So if like Bitcoin becomes a recognized currency
link |
of a country, then it may be the case
link |
that United States and European Union,
link |
others can't actually stop them
link |
from trading on Forex exchanges
link |
and being treated as a currency
link |
from a regulatory perspective.
link |
So it was like a really clever backdoor
link |
into the League of Nations.
link |
And actually we had this crazy hair brained idea
link |
years ago, we were down in Mexico
link |
at the Satoshi Roundtable and we're like,
link |
hey, let's go buy a country.
link |
Let's go to Tuvalu and get them to do something
link |
with a cryptocurrency.
link |
Cause they sell everything in Tuvalu,
link |
like the dot TV extension and their fishing rights
link |
and Taiwan pays them money to recognize them
link |
So I'm like, man, maybe we can convince Tuvalu
link |
to do something with crypto.
link |
That didn't work out so well.
link |
But now El Salvador is actually playing the game
link |
and that's a real country.
link |
It's got like five million people and so forth.
link |
So we know the president's brother
link |
and we've had some conversations there.
link |
So maybe we'll go, you know, the next few months
link |
and see what's going on there
link |
and do a state visit and talk to the president.
link |
But it's an interesting development.
link |
And it's one of those things that it can't quite be ignored
link |
because the nation states doing it.
link |
On the other hand, you have to manage expectations.
link |
Is the central bank taking a position in Bitcoin?
link |
You know, are they actually switching over
link |
to a cryptocurrency as their unit of account?
link |
Are they now getting off of BIS
link |
and they're all using the settlement rails
link |
Are they actually block chaining the entire country
link |
and they have some broad, ambitious agenda
link |
to go and do all that that remains to be seen.
link |
And so it really is a commitment there.
link |
The other thing is that if you're autocratic,
link |
these systems are not so good for you.
link |
Because the minute you adopt these types of systems,
link |
you're pushing a lot of power to the edges.
link |
So there's a world of difference
link |
between optics and actual commitment.
link |
And actual commitment is I'm prepared
link |
to accept the consequences that the state
link |
is going to lose a lot of power along the way.
link |
And the problem is it's not clear to me
link |
some of these politicians who are pro blockchain
link |
and I'm not making a statement on El Salvador in particular,
link |
I'm just saying in general,
link |
are fully aware of that reality.
link |
A lot of them seem to think that somehow
link |
they can contain the blockchain genie in the bottle
link |
and blockchain their whole country,
link |
but stay president for life.
link |
That doesn't work once they have that power, they're gone.
link |
So do you think once they realize
link |
that this is one of the failure cases,
link |
one of the things that people are concerned about
link |
is governments banning cryptocurrency?
link |
Well, that's China case, right?
link |
They started realizing this was a legitimate threat
link |
to capital controls into the autocratic system
link |
that they've constructed there.
link |
And then suddenly China started to build its own
link |
People's Bank of China blockchain
link |
and Bitcoin is now the redheaded stepchild.
link |
They didn't really care too much
link |
because it was great for corruption.
link |
You could have a capital control
link |
since all the like well connected people,
link |
they're, oh yeah, Bitcoin's bad,
link |
but then they'd have Bitcoin of their own
link |
and they could use it to send money around.
link |
But now the government has gotten very serious about it.
link |
They're saying like, okay, we want to control
link |
and dominate this whole thing.
link |
And it's a threat to our plan for the digital you want
link |
to become the world standard to displace the dollars.
link |
But so the moment you have El Salvador
link |
in just more and more countries,
link |
say there'll be a country in Europe, for example.
link |
That accepts Bitcoin or other cryptocurrencies, Cardano.
link |
The idea is it would put a lot of pressure on you.
link |
So there'll be like this kind of ripple effect that you,
link |
and then the individual governments
link |
won't be able to help.
link |
And eventually there'll be a superpower like,
link |
I don't know, Russia or the United States
link |
and or I don't know, Canada.
link |
So do you see that sort of an inevitable trend
link |
where cryptocurrency takes over the world
link |
as a store of value and as a method of payments?
link |
I mean, you can do just so much more
link |
with programmable finance.
link |
You know, transactions in general have five properties.
link |
You know, you have the asset that runs on the rail.
link |
That's what we always think about.
link |
And you can transact that, you know,
link |
and then you have the identity
link |
and you transact that either like one to one,
link |
one to many, many to one or many to many.
link |
Then you have metadata.
link |
So that's the story of the transactions.
link |
Like where did it take place, these types of things.
link |
And then you have the contractual relationship.
link |
So that's the smart contract opponent.
link |
And then you embed that within regulation.
link |
So transactions always live within jurisdictions.
link |
This is relevant to the conversation
link |
will digital currencies take over
link |
because those things are right now done separately
link |
in a very fragmented and fractured way.
link |
And they're not completely globalized.
link |
And so super expensive to hoist up this entire system
link |
and automate things like compliance.
link |
It's usually a huge part of every bank's balance sheet.
link |
So when you look at the concept of a digital currency,
link |
you're saying all five of those things are programmable.
link |
And so they could be like library driven.
link |
You say, oh, I want to be in compliance with the air tray.
link |
Okay, pull up the air tray and library.
link |
Now you are, it's built into the transaction.
link |
Previously, it's like, go hire some lawyers
link |
and go figure out the entire code
link |
and translate some things and rah, rah, rah.
link |
So just the orders of magnitude efficiency gains
link |
that you get and the increased liquidity you get
link |
and the fact that you can now represent all assets
link |
with a universal way, that financial stem cell.
link |
There's an inevitability to the victory of our industry.
link |
The challenge is, how do we deal with this
link |
with the squabbling of superpowers?
link |
China wants to be the new world standard.
link |
America wants to preserve that.
link |
And the rest of the world is trying to figure out
link |
how do we create something that's a bit more fair and balanced.
link |
And so crypto comes in and it potentially is
link |
both an ally and a competitor to those desires.
link |
Because if you do too much crypto,
link |
you don't need to nation state anymore.
link |
If you do too little crypto, well, it's China or America.
link |
So what's that sweet spot?
link |
Do you hope that in the process of cryptocurrency
link |
pushing power to the edges to the people
link |
that we would be able to alleviate some of the suffering
link |
in the world caused by centralized power
link |
and the abuses of power and corruption
link |
and all those kinds of things?
link |
A hundred percent, I made a very angry video months ago.
link |
I make angry videos.
link |
I should drink, Lex.
link |
I mean, you should drink more.
link |
Yeah, I know, right?
link |
It depends on who you ask.
link |
I made a video a little while.
link |
I said, you know, our industry is an industry of frustration.
link |
It exists because we weren't the industry
link |
that charged 85% interest to the poorest people
link |
in the world for loans.
link |
We weren't the industry that charged 15% to move money
link |
for a maid sending money home to mom and Manila.
link |
You know, we weren't the industry that laundered
link |
hundreds of billions of dollars of drug money
link |
and funded arms dealers in Africa and all these things
link |
or permitted oil for food to exist and so forth.
link |
And the people who did these things aren't in jail.
link |
They're billionaires.
link |
They fly private jets.
link |
So our industry is the antidote to these types of things.
link |
We say, guys, we want a system that's fair.
link |
And we want everybody to be treated equally.
link |
That doesn't mean it's everybody's going to win.
link |
It doesn't mean that when you lose, you know,
link |
somebody's going to come on a white horse and bail you out,
link |
you're going to have winners and losers, but it's fair.
link |
That's all we want.
link |
That's all we've ever wanted.
link |
There's no coincidence that Bitcoin was created
link |
right around the same time as the 2008 financial crisis.
link |
It's not like these were just unrelated events.
link |
They're highly correlated to each other, OK?
link |
I'd say perhaps even causal.
link |
And everything we've done as an industry from that moment
link |
to today and beyond has been about that endless, relentless
link |
desire to make things a little bit less corrupt,
link |
a little bit less nepotistic, and a bit more open.
link |
And it's gotten so insane that you have these things
link |
in Wyoming called speedy banks where you're full reserve banks.
link |
They have 100% of their balance sheet is accounted for.
link |
And then you have the people in the banking community saying,
link |
well, those are a risk to banking.
link |
We were scared that these speedy banks are going to default.
link |
It's like, what world are you living in?
link |
You have fractional reserve, sometimes like 2% assets
link |
on the balance sheet.
link |
And then you're worried that the guys who actually
link |
have a dollar for every dollar they say they have
link |
are the ones that are going to collapse.
link |
It's like the 1984 level doublespeak
link |
when you see the system and negative interest rates
link |
and all these other things.
link |
And so I absolutely believe the direction course
link |
of this industry is to make things more honest and fair.
link |
And also, by its very existence, it
link |
exposes double standards, hypocrisy, and corruption.
link |
Just the fact that it's there.
link |
Because it's one thing to say that, well, it just
link |
can't be because of the nature of global finance.
link |
There's no way to do it otherwise.
link |
It's another thing to see it there as an example and say,
link |
well, that thing is doing it.
link |
Why can't you guys be this way?
link |
That's why I'm so passionate about Africa
link |
because they don't like the systems they have.
link |
And everybody's really young.
link |
And they are going to throw all the systems out
link |
in the next 20 years.
link |
And they're going to replace them with something else.
link |
If we get this stuff into Africa, 1.2 billion people
link |
will be living in a considerably better system
link |
than the rest of the world.
link |
And then everybody else will look at that and say,
link |
why the hell are those guys so rich?
link |
Why are those guys making the money?
link |
Why are those guys doing so well?
link |
And it's not satisfying here.
link |
Well, Africa is just better.
link |
No one's going to say that.
link |
They're going to say, OK, yeah, it's nepotism and corruption
link |
and lack of transparency and these types of things.
link |
So I think absolutely it has the potential
link |
to improve the human condition.
link |
But humans have to get out of the way.
link |
Humans have ingrained in themselves selfishness
link |
and it is a desire to maximize them for themselves
link |
and their family and not thinking systems.
link |
And so we have to evolve capitalism at the same time.
link |
And what I mean by that is right now you're
link |
trying to maximize the amount of resources you get today.
link |
What we need to do is start thinking
link |
about how do we create future versions of ourselves in 2100
link |
and create a resource for that time period.
link |
And then the name of the game is to maximize that or balance
link |
that with what you get in the short term.
link |
And then suddenly you're saying to yourself, well,
link |
if I'm doing things that are good for me today,
link |
but compromising then, I make less money.
link |
So capitalism as an engine is OK.
link |
The problem is it's misparameterized.
link |
Right, almost like inject long term incentives
link |
into the capitalist system.
link |
And cryptocurrency space is the only economic system
link |
where that's actually possible.
link |
You can create a tokenomics scheme
link |
where doing things that are beneficial for people
link |
you'll never meet because you're long dead actually
link |
makes you money today.
link |
You can't do that in a legacy financial system and so forth.
link |
So I think that that's the real impact capital
link |
conversation that has to be had as you explore these things
link |
is you have to talk to people and say, look,
link |
it's not about communism or socialism versus capitalism.
link |
It's not about, hey, let's donate and save the world
link |
or try to be charity and make things better.
link |
It's all about how do you use the fact
link |
that we have a better toolkit to create a different system,
link |
a different incentive model where the default configuration
link |
of the system is long term thinking.
link |
And the default consideration of the system
link |
is to get rid of all these negative externalities
link |
that marketplaces have and judge the success of society
link |
not by how the greatest of society are doing,
link |
but by how the least of society are doing.
link |
HDI, not GDP, this kind of thinking.
link |
And I think crypto can actually be the vanguard
link |
that pushes us there.
link |
And the first countries to adopt that
link |
are going to be just significantly better places to live.
link |
And the people who envy them will force the other countries
link |
That's right, that'd be a ripple effect.
link |
So when you wake up in the morning
link |
or as you sleep like a baby,
link |
wake up multiple times in the middle of the night,
link |
are you, do you feel the burden of this kind of future
link |
that's in your hands and not to mess it up?
link |
Like what is it, Big Lebowski?
link |
Her life is in your hands, dude.
link |
Don't worry about them, they're nihilists, honey.
link |
Do you feel the burden of like,
link |
because we're talking about all these 100 plus papers
link |
and the academic beauty of the algorithms
link |
we're talking about,
link |
but then there's millions of human lives that stay here.
link |
I mean, you always feel the burden,
link |
especially my own company.
link |
I mean, I have all these people work for me
link |
and they eat because I pay them, right?
link |
So if I can't pay them, then that's my fault.
link |
So you have to, as a leader,
link |
you always have to be cognizant
link |
that there's all these people who've signed up
link |
for your crazy vision
link |
and you have to be larger than life.
link |
You always have to be good.
link |
You're not allowed to have a bad day.
link |
You're not allowed to feel like shit.
link |
You always have to show up.
link |
You always have to be pushing forward.
link |
And so that's a huge burden on many respects
link |
because there's Charles the person
link |
and then Charles the CEO
link |
and these are very different things
link |
in terms of expectations, at the very least.
link |
And so it's heavy in that respect.
link |
That said, what gives you solace
link |
is that you're not in it alone.
link |
It's lonely, but you're not all alone.
link |
You have so many amazing people around you
link |
that are willing to help
link |
and actually take some of that burden.
link |
And my life has gotten considerably better
link |
when I learned how to delegate and trust.
link |
And even if people screw up and fail,
link |
it's worth the risk
link |
because ultimately you're amplifying yourself.
link |
The other thing is that it's okay not to get all the way.
link |
You want to, you want to push there,
link |
but make sure whatever the hell you do,
link |
you leave something for somebody else to pick up
link |
That's why we care so much about the publication process
link |
and open source code.
link |
We'll never file a patent in our entire history
link |
because whatever we do, it's yours as much as it is mine.
link |
And maybe I can only get you 70% of the way
link |
and I'll plop over dead from a heart attack
link |
or get killed by an eagle or something like that.
link |
Maybe somebody brings the has,
link |
maybe somebody brings the has eagle back and it kills me.
link |
So it could happen.
link |
They're bringing the Willie Mammoth back.
link |
Talk to the George church about that.
link |
That's a good way to go.
link |
Either the eagle or the mammoth.
link |
I'd rather be crushed by a mammoth
link |
because eagles actually fly you up and drop you.
link |
Oh, so you won't die, it'll be a slow death
link |
and they probably peck at you.
link |
You'd just be grievously wounded on the ground
link |
and the eagle's like slowly devouring you.
link |
Yeah, don't go down that way.
link |
I've lost my train of thought.
link |
The point is that you feel deeply grateful
link |
that a bunch of people around you and then you give...
link |
Yeah, you delegate and somebody fights the eagle
link |
and then other people takes care of that
link |
and this, that and the other.
link |
You just do the best you can.
link |
You're in the arena.
link |
You fight as hard as you can.
link |
You leave nothing for home.
link |
You could put it all on the field.
link |
And then when you go home,
link |
you have pride in what you've done.
link |
And you know that you've at least made a slight difference.
link |
You know, one person can make a huge difference.
link |
Look at Norman Borlong.
link |
I mean, just one or a whole world teaching people
link |
how to grow crops that he saved a billion lives
link |
over the course of his life.
link |
Billion people didn't start to death because of one guy.
link |
It's amazing the asymmetry and the returns
link |
on that type of a thing.
link |
Just for the knowledge transfer of all things
link |
and yet not a household name.
link |
So that's the other side of it, of the burdens.
link |
You know, people always want something or something.
link |
So they say, oh, if I endured all these burdens,
link |
I should be given something.
link |
I entered into this space fully expecting
link |
that probably the most likely outcome was jail.
link |
That's what my dad told me and other people told me.
link |
And it was because it's like, look at where we came from.
link |
The Liberty Dollar, Eagle, all these things.
link |
Anybody tries to innovate the monetary system,
link |
either end up like Gaddafi or they end up in prison
link |
or they end up like nepotistic corrupt banker
link |
or something like that.
link |
And so, you know, the financial regulations
link |
are not built for rapid innovation.
link |
They're not built for Bitcoin.
link |
There's a reason Satoshi was anonymous.
link |
It wasn't because, you know, he enjoyed the anonymity
link |
because there was legitimate criminal risk
link |
for this type of activity.
link |
So the fact that I've gotten this far
link |
and I'm doing pretty good, that's a win.
link |
You know, you take that, life is good.
link |
What is a productive day in the life
link |
of Charles Hoskinson look like?
link |
Now, we're getting to the details here.
link |
Diet, like fasting or not, maybe.
link |
Coffee, non coffee, exercise, sleep,
link |
scheduling like periods of deep work, programming,
link |
then the social media stuff that you do.
link |
You clearly enjoy being on social media
link |
and also live streaming, educating, inspiring the world.
link |
Or getting drunk and ranting at the computer.
link |
Well, first off, you do a wet year and a dry year.
link |
That's what prevents you from becoming an alcoholic.
link |
So unfortunately, the way that schedule worked,
link |
2020 was my dry year.
link |
Like I didn't drink the entire year.
link |
Now, single sip of alcohol, it was the worst.
link |
Yeah, you do a dry year and then you do a wet year.
link |
Oh, so this is one of your ideas about life
link |
Yeah, you have to alternate.
link |
You know, never do too much of any one thing.
link |
Well, Churchill never alternate.
link |
He just kept drinking throughout his life.
link |
He did pretty good, just to push back against you.
link |
Yeah, him and Alfred North Whitehead.
link |
Although, didn't Churchill get kicked out
link |
as Prime Minister at some point?
link |
So maybe he took one dry year.
link |
Yeah, he was sober, happy in shape, Churchill.
link |
He had to let it Britain for 30 fucking years, but.
link |
See Lex, that's why we can't have nice things.
link |
Hunter S. Thompson, maybe you're onto something.
link |
Oh, you know, it's really crazy if you go to Aspen
link |
and see the bar he used to go to.
link |
I actually met a waitress who knew him really well
link |
and he'd go in there like two, three times a day.
link |
And she's like, yeah, he'd do cocaine right here
link |
on the table and he'd come in with lots of pills
link |
and just put them all out on the table
link |
and be taking them at different hours.
link |
And they were all clearly illegal substances,
link |
but we just give him coffee for whatever he wanted.
link |
But then we asked the day in the life of Charles.
link |
I fast, I tried to intermittent fasting 16, 8.
link |
The longest fast I ever did for a long term fast
link |
was two weeks, which was just crazy.
link |
Can you take me to the journey of like philosophically
link |
what was going on in your mind?
link |
Well, so normally when I do an extended fast
link |
it's about three, four days,
link |
because that's the sweet spot
link |
before you start losing muscle mass
link |
and other things start happening.
link |
And there's people know so much more about this than I do,
link |
but I just feel pretty good.
link |
And you kind of get addicted to the fast high.
link |
You know, you don't have to eat, you have no downtime.
link |
You're just going, your energy never dips.
link |
And so I used to do like three, five days,
link |
maybe three, four was the sweet spot.
link |
But then after about a week, I was like,
link |
how long do I, can I make this go?
link |
And so I started talking to some people,
link |
I said, well, Angus Barberry did 384 days.
link |
Of course I'm not as fat as Angus.
link |
So I said, oh, I can do two weeks.
link |
So I just kept going and kept going
link |
and kept going and kept going.
link |
And right around the two week mark,
link |
you know, I fainted for a little bit in a chair.
link |
And I was like, okay, maybe I should start eating again.
link |
But then I was legitimately worried
link |
about like refeeding syndrome and this stuff like, okay,
link |
how do I, how do I take care of that?
link |
So my brother's a doctor and I called him and I said,
link |
hey, Willie, you know, I haven't eaten in two weeks.
link |
How do I, how do I start eating again?
link |
And he's like, what?
link |
So the usual routine intermittent fasting,
link |
although I haven't been as good about it as I should be.
link |
And I used to work out, I don't do as much as that.
link |
The stress and the work life balance
link |
has been horrible the last 24 months.
link |
And I've gained a lot of weight and all that stuff.
link |
But I'll fix that.
link |
But I do try a lot of things.
link |
Like I use the call map and I do meditation.
link |
Recently I started doing photobiomodulation.
link |
You ever heard of that?
link |
It's crazy headset called a V light.
link |
You saw that picture of me with like the weird thing
link |
with the red lights on.
link |
Actually it shoots lights into your brain.
link |
It's really cool stuff.
link |
But it proves blood flow.
link |
And actually there's some peer reviewed studies
link |
that show that it does neurogenesis.
link |
So you actually generate new neurons and things like that.
link |
It's really cool stuff.
link |
So I do that and it actually helps a lot.
link |
And you know, it's every day is a little different.
link |
Do you get a few hours of like a long time to work to think?
link |
Yeah, deep work is so important.
link |
You know, there's even a book on that, like deep work.
link |
Yeah, by Cal Newport.
link |
I think you interviewed him, didn't you?
link |
Yeah, everyone should listen to his podcast.
link |
Deep questions, he's awesome.
link |
He's a mathematician, a theoretical computer scientist.
link |
So those guys really need their time
link |
That's the one thing I deeply miss.
link |
When you're a CEO, you're the master of the five minute deal.
link |
You come in, you talk to people for a minute,
link |
you make a decision, you move on the next thing,
link |
you move on the next thing.
link |
And I used to be used to like really deep focus.
link |
You'd sit down and think about something
link |
for 10 hours, 15 hours, 20 hours.
link |
It was just so beautiful to get lost into something
link |
and just go and go and go.
link |
And then you become a CEO and it's like,
link |
you never can go and go.
link |
You're lucky if you read a four page thing,
link |
because there's something else that comes up, you know?
link |
You have to travel, you have to do that.
link |
So I've been trying lately to have,
link |
and actually our chief of staff recommended,
link |
like Fridays is do not disturb day.
link |
So it's for deep work, you know,
link |
you don't have meetings and any of these things.
link |
And so far I have not committed to that,
link |
but everybody else in the organization
link |
has started to move there.
link |
But my hope is next month
link |
that I can actually get serious about that.
link |
The other time I'm lost in thought is
link |
I do a lot of float tanks.
link |
Have you ever done isolation tanks?
link |
But I really want to.
link |
It's one of the most amazing things you can do.
link |
You know, you come out on the other side
link |
and all your stress worries, they're just gone.
link |
And you have so much productivity and clarity.
link |
If you combine that with daily naps, that's the way to go.
link |
Yeah, I'm a huge fan of naps.
link |
So what about the social media stuff
link |
and like you doing the live streams?
link |
Do you ever dread those?
link |
Do you, are you energized by those?
link |
So because you're exceptionally good at communicating
link |
all the different kinds of ideas
link |
and being very transparent with the community,
link |
all those kinds of things.
link |
I really enjoy the live streams.
link |
You know, it's fun, it's never been a chore
link |
because it's for them.
link |
You know, it's a chance for people in the community
link |
who've been loyal and they really love it
link |
to actually just be there, ask some questions
link |
and I try to make it as entertaining as possible.
link |
And you know, you have your trolls and you have your love
link |
and it's actually nice to have a mixture of the two
link |
because sometimes you can beat down trolls just for fun.
link |
You know, that kind of stuff.
link |
And I, it's grown to a cult following.
link |
I think there's like 40, 50,000 people
link |
and it's almost like Fight Club in a certain respect.
link |
So I was in Vancouver years ago
link |
and I was at Air Canada checking in
link |
just about to fly back to Colorado
link |
and it's getting this weird vibe
link |
from the guy that was checking me in.
link |
And then right after he takes my bag,
link |
he kind of leans over to me, he's like, I love Ada.
link |
You know, and I was like, really?
link |
He's like, yeah, I watch your live streams.
link |
And then I was flying into London.
link |
I was in London, he threw airport
link |
and the passport control guy was there
link |
and I was just about to take my passport out
link |
and he says, welcome to London, Mr. Hoskinson.
link |
I was like, oh God, am I going to jail in London?
link |
Why does the border patrol guy know who I am?
link |
This is a bad deal for me.
link |
And it turned out he watched my live streams.
link |
And so there's a lot of that and that's so much fun.
link |
In fact, here in Austin,
link |
as a Mexican restaurant just down close to this place,
link |
and while eating there,
link |
two different people recognized me
link |
and I took a picture with one of them.
link |
And again, they watched the live streams.
link |
Well, if it's anything like Fight Club,
link |
you have to wonder if some of those people
link |
or all of them are just figments of your imagination.
link |
Right, I don't have an answer for that.
link |
I could be a figment of your imagination,
link |
it just proves that yes.
link |
Yeah, but honestly,
link |
if I was capable of that level of delusion,
link |
why the hell don't I look like Brad Pitt?
link |
Okay, so on this topic, let me ask you about mushrooms.
link |
You're interested in mushrooms, growing mushrooms.
link |
I believe you are also interested
link |
in the mind expanding capabilities of psychedelics.
link |
At least you mentioned kind of the interesting place
link |
where you're interested
link |
in non psychedelic mushrooms might go.
link |
Can you explain the nature of your interest in mushrooms?
link |
Well, it's a little bit of everything.
link |
You know, it's just an underexplored area
link |
of science and botany that ought to be explored
link |
because there's so much cool, interesting stuff there.
link |
Mushrooms do so much.
link |
Like they have these things called courtesepes
link |
and they are like a zombie fungus
link |
that infects insects, takes them over
link |
and then it will have them kind of get to other insects
link |
and then burst out of their head like an alien
link |
and spray spores on them and repeat the process.
link |
I mean, they even made a damn game about this,
link |
the last of us or something like that.
link |
And this is a real thing.
link |
Like you can Google it and see like these dead hands
link |
with these fungal stabs coming out of them.
link |
It's like, holy God, this is crazy.
link |
And in the same topic,
link |
you go all the way to Lion's Mane
link |
and it could actually help treat Alzheimer's
link |
and treat depression and Parkinson's
link |
and regrow nerves and so forth.
link |
Other things, they've shown some effectiveness against COVID.
link |
You know, it's just so crazy the diversity
link |
in the mushroom kingdom of the medicinal applications,
link |
the pesticide applications.
link |
You can use it a lot to kind of save hay and trees.
link |
There's a lot of things you can do
link |
to combat all kinds of invasive species.
link |
And it's true, there's a lot of cool stuff
link |
with psychedelic mushrooms and there's a great book
link |
from Michael Pollan, How to Change Your Mind,
link |
where he was really the first journalist
link |
a long time to go and Roland Kriss has worked his way
link |
through the Johns Hopkins studies.
link |
But the longest short for me when I read that book,
link |
like, okay, mine expansion is great,
link |
but look at the effectiveness of psychedelics,
link |
psalocybe mushrooms with SSRIs,
link |
selective serotonin readup take inhibitors
link |
for the treatment of depression.
link |
They showed in the Johns Hopkins studies
link |
that they're equal or better in effectiveness
link |
For the treatment of depression,
link |
then a drug that you have to take forever.
link |
And this is just one or two treatments
link |
and then you desist from it.
link |
because there's so many people suffer
link |
from severe depression and it's a lifetime ailment.
link |
And the fact that we have something in the toolbox
link |
that we've under explored is a very powerful thing.
link |
The other thing was end of life issues.
link |
A lot of people get cancer.
link |
I've lost people in the family from cancer.
link |
And it's so hard those last two, three months,
link |
because they kind of have this,
link |
they're in a horrific pain,
link |
they're trying to find meaning
link |
and why is this happening to me?
link |
And if you can just give them a substance
link |
that on the other side of it,
link |
there's a good chance they can come to peace
link |
with everything and die with a lot more dignity
link |
and happiness, that alone justifies
link |
an enormous amount of study.
link |
And the fact that these things are super cheap
link |
and they grow pretty much anywhere, pretty cool.
link |
Now, on the commercial side,
link |
you can make a lot of money from mushrooms.
link |
And I'm working with a company called Farmbox Foods.
link |
And it's one of the,
link |
they do both vertical hydropartic farming.
link |
They also do mushroom.
link |
And they put these amazing labs and shipping containers
link |
that are kind of like controlled environments.
link |
And you grow 400 pounds of gourmet mushrooms
link |
a single week off of that.
link |
And your margins can be up to 30% per year.
link |
If you're just selling them for food consumption,
link |
if you're doing supplements,
link |
they can be even higher than that.
link |
So it just kind of made sense
link |
from a diversification of assets to say,
link |
hey, let's do some stuff in hydroponics
link |
and aquaponics and in mushrooms.
link |
But the more I do,
link |
the more I learn that community,
link |
just the cooler that community is.
link |
Like I went to this beautiful mushroom festival
link |
in Cape Springs down in Georgia.
link |
And I met this guy named Bill Yule.
link |
And he just looks like a druid.
link |
You know, just like he lives in a tree
link |
and he opens up the tree and goes out and everything.
link |
And I was like, Bill, what do you do?
link |
He said, I go and I try to study beetles and bull eats
link |
in a very particular type of beetle.
link |
And they mate in the most crazy way.
link |
It's like this beetle will fuse on top of another beetle
link |
and they'll vibrate.
link |
And if they make the right harmony,
link |
she'll mate with them.
link |
Otherwise, they'll kick her off.
link |
And you can only make the harmony
link |
while you're on a specific type of bully mushroom.
link |
If it's anywhere else, the harmony doesn't.
link |
It's like, who the fuck does this stuff?
link |
It's like 20 years, 30 years,
link |
just thinking about goddamn beetles and bully mushrooms.
link |
But that's that community.
link |
And they're the happiest people you'll ever meet.
link |
And they're just so much fun to talk to
link |
and there's just so much lore there that's not discovered.
link |
The other thing is there's a ton of undiscovered mushrooms.
link |
So, you know, you go to my ranch up in Wyoming,
link |
go out that national forest next to it.
link |
You'll probably discover six or seven new species,
link |
just doing some gene sequencing and things like that.
link |
So there's like a gold rush for new things to discover
link |
to treat all kinds of things.
link |
So love mushrooms, love that community.
link |
I think there's a lot of wonderful medicinal properties
link |
and everybody there is just a lot of fun to hang out with.
link |
The other passion is aquaponics and hydroponics.
link |
And I got a lot more serious after COVID.
link |
I go to the supermarket, all the store shelves are barren.
link |
And I say, guys, can you imagine
link |
if we had a real big thing, what this would be like?
link |
We need to have domestic food production.
link |
We need to have resilience at the community level.
link |
So let's go build a $40, $50 million aquaponics facility
link |
next to every major city.
link |
So at least you have some local production of food
link |
and people won't starve to death.
link |
Otherwise, it's very bad.
link |
And again, the margins are phenomenal there, 20%, 30%.
link |
If you actually do it right
link |
and alternate your crops properly and so forth.
link |
And you create a lot of high paying jobs with it as well.
link |
And so you kind of draw a lot of value
link |
from staying close to nature and all of these kinds of ways
link |
to keeping you humble.
link |
Like you said, what is it?
link |
The goat is still gonna crap on you.
link |
Oh yeah, the doggies will shit on you
link |
whether you're broke or a billionaire.
link |
That's a good line.
link |
I just don't like, the line you'll be remembered for
link |
if the universe has a sense of humor.
link |
Yes, it's a Neo Yogi para.
link |
So I think mushrooms is a good place
link |
to ask about my friend, Joe Rogan.
link |
So I keep folks from the Cardano community
link |
keep saying things like,
link |
legs podcast first, then Joe Rogan experience.
link |
I guess I'm the moon and Joe's Mars in this metaphor.
link |
Since I'm a CS person,
link |
I can talk a little bit more fluently about cryptocurrency
link |
because fundamentally cryptocurrency
link |
is a computational idea.
link |
But then there's somebody like Joe
link |
who's more like an every man
link |
and he does not necessarily know
link |
the technical intricacies of cryptocurrencies.
link |
What kind of, and I don't think
link |
he's had a cryptocurrency person on.
link |
Did I do any interview and dress on Tidopolis?
link |
I had long, long time ago.
link |
But that was almost like,
link |
the cryptocurrency space goes through phases.
link |
And I think we're in a new era of some kind.
link |
And what, how do you talk to Joe about Cardano?
link |
How do you talk to Joe about what the heck,
link |
I remember somebody tried to explain to him
link |
How do you explain this whole space?
link |
So what Bitcoin is, of where Ethereum is,
link |
where Cardano smart contracts
link |
and some of this Puthas work
link |
with this Puthas stake ideas that we'll be talking about.
link |
You don't, what you do is you start with applications
link |
that they're interested in.
link |
So he's an Elk Hunter.
link |
And so he's probably interested in Elk tags, right?
link |
So you start there and you say that whole system
link |
can be put on a blockchain
link |
and here's how it's going to be better for you.
link |
You say that's what you do.
link |
You always connect it to something they know and love.
link |
And then once they get that, they say, oh, that's really cool.
link |
And then they ask, what else can you do with it?
link |
What else can you sell me on it?
link |
And you kind of work your way outwards there.
link |
Problem technologists make
link |
is they're so damn in love with the technology.
link |
They have that tail wagging the dog
link |
where they just want to talk about the technology
link |
and how incredibly cool it is.
link |
It's like talking about math.
link |
Oh God, let's talk about cobertisms.
link |
Everybody's eyes glows over.
link |
No, you always have to connect it
link |
to the interest of the particular person
link |
and what they care about, what they love,
link |
what they need, royalty payments.
link |
He's a big guy, he's got the Spotify things,
link |
got all these things going on.
link |
Intellectual property is probably pretty important, Joe,
link |
but some juncture.
link |
So NFTs, we can talk about this concept
link |
of perpetual royalties.
link |
So for example, let's say that you create a piece of art.
link |
You can build into the token itself.
link |
A perpetual royalty is something you care about.
link |
Maybe every time it sells, it pays it back to you.
link |
Or maybe every time it sells,
link |
it donate to some clean water charity
link |
or something like that.
link |
The point is that the actual acquisition of the NFT
link |
requires adherence to that smart contract.
link |
So people can't deviate from your desire
link |
even after you die.
link |
So stuff from Andy Warhol or from Picasso,
link |
that can still be generating some donation
link |
every time a Picasso sells to something else.
link |
You can do that with NFTs.
link |
And so he starts thinking, God, what else can I do?
link |
Maybe I can do my tickets with these types of things.
link |
Maybe I can do loyalty points for my fans.
link |
So now you've got to engage
link |
and he's thinking of all the opportunities for him.
link |
And it gives him an incentive to anchor
link |
and connect to those concepts.
link |
And then over time, he starts asking question,
link |
how do we know it's secure?
link |
Then we can talk about proof of work or proof of stake
link |
or these types of things.
link |
Well, so this is how it stays secure
link |
if you're really interested.
link |
And there's an incentive to have the attention span
link |
necessary to do the homework, eat the broccoli
link |
and get over that hill.
link |
But it's also an opportunity, at least it was for me,
link |
especially with Bitcoin a while ago,
link |
is to take another look at the monetary system.
link |
Even look at the, I've been looking quite a bit
link |
at the history of the 20th century
link |
and sort of look at that history
link |
through the perspective of the monetary system
link |
or the gold standard and all those kinds of things.
link |
And just add that little layer of consideration
link |
of how much money, of how money can be used
link |
to buy people in power to control the populace.
link |
And it's fascinating to look at the history
link |
from that perspective.
link |
And then that allows you to look at the future
link |
of how we can change that in order to empower people.
link |
And then of course, the governance thing
link |
that you're working on is fascinating
link |
because, I mean, I don't know,
link |
but it seems like a deeply broken aspect
link |
of our government is just the voting system.
link |
And discussing how that could be revolutionized
link |
is fascinating because a lot of conversations
link |
end up being on the internet about like number go up,
link |
which is like financial side.
link |
And to me personally, at least,
link |
I think that's the same for Joe, that's just boring.
link |
Like it's the investing, the financial side of it.
link |
I know it has a lot of impact, but it's kind of boring
link |
because longterm is not going to have any impact.
link |
If the idea is a strong longterm, it's going to win.
link |
The ideas are weak, longterm is going to lose.
link |
The ups and downs of the short term don't matter.
link |
That's just like casino games that you play.
link |
Speaking of games, video games,
link |
gotta ask you about those.
link |
Will you mention Diablo?
link |
Maybe you're a fan of Diablo.
link |
Well, yeah, Diablo is great.
link |
Do you like Skyrim?
link |
Skyrim is great too.
link |
Like The Elder Scrolls.
link |
I actually bought the game
link |
that The Elder Scrolls was based on, do you know that?
link |
So way back in the day, The Elder Scrolls series
link |
was inspired by a game called Legends of Valor
link |
that I played when I was a little kid.
link |
And it doesn't actually have an ending.
link |
They ran out of money before they finished it.
link |
So they just kind of like put this little thing on
link |
and said, okay, but you never finish it.
link |
So I actually bought all the intellectual property
link |
I didn't know there was a connection
link |
to Legends of Valor.
link |
Yeah, I forget the name.
link |
The guy was at Todd's Something at Bethesda.
link |
He played it and he was inspired by it.
link |
And then he created Arena right after playing it.
link |
That was such a good game.
link |
Arena, Daggerfall.
link |
I had a copy of Daggerfall when I was a kid,
link |
but it had a bug in.
link |
So when you left the dungeon, it would crash.
link |
And this was before, like he can get an easy patch for it.
link |
So I never actually played Daggerfall.
link |
I entered in through Morrowind.
link |
No, the Daggerfall was the fascinating thing
link |
which jumping all over,
link |
but we'll return to Legends of Valor
link |
because I want to ask you about that.
link |
But Daggerfall was fascinating
link |
because I think of all of the Elder Scroll games,
link |
it was like the largest
link |
because it was like randomly generated.
link |
It would like randomly generate the worlds,
link |
the dungeons and so on,
link |
which is fascinating to think about like,
link |
how big can you make the world?
link |
Both in actuality and feel.
link |
Like it's incredible to have a video game.
link |
I don't know how many video games do this well,
link |
where the feeling is you can be lost here forever.
link |
You can live here.
link |
Cause most video games have like a bottom.
link |
It feels like you can run out of stuff.
link |
Where Daggerfall was like, I can just keep doing this.
link |
At least that's what I felt at the time.
link |
But yeah, why, what the heck Legends of Valor?
link |
What's the idea there?
link |
Well, I mean, there's really nothing about it
link |
that's super compelling today.
link |
I mean, there's a nostalgia of youth that's there,
link |
but I mean, it doesn't even have a class system,
link |
the level system, the combat system is terrible.
link |
There's no journal, the magic system is terrible
link |
And so I just wanted to start somewhere.
link |
And I felt like that would be
link |
an incredibly fun overhaul project.
link |
I kind of got the idea from Beam Dog Studios
link |
when they did another one of my favorite games.
link |
Remember Baldur's Gate?
link |
Yeah, they did the...
link |
I love that Baldur's Gate too.
link |
Oh yeah, the enhanced edition was great.
link |
They should have never just done thrown a ball.
link |
They should have done an actual proper sequel.
link |
And I got down that whole road.
link |
But anyway, I got the idea there.
link |
I said, well, take some old piece of IP
link |
and then you can kind of retrofit it and clean it up.
link |
And what's nice about Legends of Valor is it's a blank slate.
link |
You can do your own elder scrolls.
link |
You can create your own class system and level system
link |
You could write some beautiful, exciting,
link |
fun narratives for that.
link |
And also it gives me a chance to explore a lot of things
link |
that I think should be dragged into game development.
link |
Like algorithmically generated music is one example.
link |
The problem with sound games, as you mentioned,
link |
you play lots and lots of hours,
link |
but your sound content is much smaller.
link |
So you have tons of repetition in the soundtrack.
link |
So what if you could connect the music
link |
to the state of the game world
link |
and automatically through some process
link |
will generate music.
link |
And there's actually people who study this.
link |
And so that's one dimension.
link |
The other thing is you have things like GPT3 and so forth.
link |
There was a great game, Event Zero.
link |
And it came out in like 2016
link |
where you could actually have a dialogue with an AI
link |
and you're like a marooned astronaut
link |
and a space station that's abandoned.
link |
And you have to somehow work with this AI
link |
through communicating with it
link |
to convince you to take you home.
link |
But the AI is a bit duplicitous
link |
and I don't want to spoil a plot of the game
link |
because it's such a cool game,
link |
but it's actually like a paint by never say.
link |
It's almost like Zork
link |
where you don't have preselected dialogue.
link |
You actually type in the terminal
link |
and the AI will reply to you back and forth.
link |
And this was 2016 and it's like things have gotten
link |
in order magnitude better.
link |
So with the evolution of that tech,
link |
I think within the next five years
link |
brought into video games,
link |
could you give you incredibly cool dialogue
link |
So algorithmically generated music,
link |
better dialogue, better gameplay mechanics.
link |
Also, I'd love to explore alternative physics systems,
link |
alternative geometries,
link |
like hyperbolic geometry or these types of things.
link |
And there's actually Hyperbolic is a game that does that.
link |
And you can do down the Euclidean geometry as well
link |
and bring those elements into a game design.
link |
And that's what we'll do as legends of valor.
link |
So it'll be kind of like Skyrim,
link |
but with a lot of really cool new shit.
link |
It's kind of like, I saw Aerosmith years ago
link |
and he was out there, he's like,
link |
do you like the old shit?
link |
Do you like new shit?
link |
Kind of middle shit.
link |
So you're going for the middle.
link |
Yeah, I'm gonna try to do some of the old
link |
and some of the new and bring it in.
link |
So that'll be a lot of fun.
link |
And what's nice about it is that there is a lot of new
link |
play in the market
link |
because of the Microsoft acquisition of Bethesda.
link |
They've been losing employees like crazy.
link |
And there's a lot of belief that Elder Scrolls 6
link |
will not live up to expectations
link |
because Microsoft will kill it.
link |
Okay, listen to me.
link |
I will go into, I'm all about love on the internet,
link |
but I will go hard at you Microsoft
link |
if you screw up Elder Scrolls.
link |
Well, we might have to do a spiritual successor, right?
link |
And it might have to happen with legends of valor.
link |
But it's a passion project.
link |
So I have no time for it at all.
link |
It's like so low on my list of things to do.
link |
So I'll probably do it in 2022, 2023,
link |
and we'll build a nice crew and we'll do it in Wyoming,
link |
probably in Wheatland or some really small town
link |
and we'll import everybody.
link |
And then we'll have to build the whole city up
link |
like Elon is doing here in Texas.
link |
It'll be a fun project.
link |
Well, I like programmatically generated music.
link |
You mentioned Baldur's Gate.
link |
By the way, Haskell frameworks for that.
link |
For generating music?
link |
Yeah, for doing it.
link |
I wonder how successful that could be
link |
because I remember Baldur's Gate was the first game
link |
where I realized music is so important to the game.
link |
It was the thing I remembered about the game.
link |
It was the reason that it was the thing I thought about
link |
when I was away from the game
link |
is like that, the feeling it created that music.
link |
I don't even remember the music anymore,
link |
but I remember the music.
link |
Jeremy Soul, I think was the composer.
link |
And actually getting like Rahman Juati
link |
or Bear McCready to do that would be so cool.
link |
Okay, this is awesome.
link |
Ridiculous question.
link |
What's the maybe let's say top three
link |
great video games of all time?
link |
Yeah, Baldur's Gate is definitely in the top three.
link |
Arkane M is my favorite game.
link |
And Arkane M was, Troika Games was just this amazing studio
link |
where they took the time to build
link |
probably the most compelling game worlds.
link |
In the case of Arkane M, it takes place
link |
in kind of like a 19th century Victorian England play.
link |
But then there's also magic inside this game world.
link |
And there's this crazy juxtaposition
link |
between magic and technology.
link |
And the more technology you have, magic stops working.
link |
The more magic you have, it disrupts technology.
link |
So all the people on the magic side
link |
hate the technology people and vice versa.
link |
And so you're just this character in this game world
link |
and you're just trying to figure out like where do you fit?
link |
And it has this incredible plot
link |
where you're kind of just a stowaway on a zeppelin
link |
that gets shot down and you get dragged into this conspiracy
link |
and you have to kind of figure out the conspiracy
link |
as you go through the whole game world
link |
and you meet all these different races
link |
like the elves and the dwarves and so forth.
link |
And they've all been impacted
link |
by the proliferation of technology in different ways.
link |
Like the humans, you steam engines to clear cut
link |
all the forest and it caused a lot of problems.
link |
The dwarves leaked that technology to the humans.
link |
And so they kind of got exiled for it and so forth.
link |
And you have to decide like where do you fit all this?
link |
And you have a lot of choices as a player.
link |
You can be on the magic side,
link |
the technology side kind of be neutral.
link |
And there's like 40 different endings for the game.
link |
It's just incredible.
link |
And this is all like 2000.
link |
And you talk about a procedurally generated world,
link |
you have a quick travel, but if you want,
link |
you just walk and the world randomly generates.
link |
But it's not like Daggerfall
link |
where there was interesting things along the way.
link |
So it was really ahead of its time
link |
and it was kind of the last of a generation of games.
link |
It was based on the same framework
link |
that Interplay used for Fallout,
link |
the original Fallout and Fallout 2.
link |
So that was really a cool setup.
link |
So how were the graphics?
link |
They were not essential to the game?
link |
Oh, it's isometric top down.
link |
So yeah, kind of like the Fallout look.
link |
And so it doesn't hold up super well today,
link |
but that was never the point.
link |
It was a more of a story driven game.
link |
But it was in one of the very few games
link |
where at the very end of the game,
link |
you could actually talk the villain
link |
into killing himself instead of fighting you.
link |
If you, and you had to really work at it,
link |
you had to become a master of persuasion
link |
and get your charisma score maxed out
link |
and learn all this stuff along the way.
link |
And you have this philosophical debate
link |
over the nature of life and death with him.
link |
Yeah, and then you're just like,
link |
by the way, you're wrong and here's why.
link |
And he's like, oh yeah, you got a point.
link |
I'm just gonna kill myself.
link |
And I was like, wow, this is great.
link |
Planescape Torment is the other one,
link |
I think is probably the greatest.
link |
Was it called Planescape?
link |
Yeah, it's another one on the Infinity engine,
link |
which was what was used for Baldur's Gate.
link |
So it looks like Baldur's Gate.
link |
And God, that was such an incredibly well written game.
link |
You play this character called the Nameless One.
link |
It's this little blue guy and you wake up in a morgue.
link |
And it turns out that you're immortal.
link |
And every time you die, you lose all your memories.
link |
And so you've just been apparently living this life
link |
for a very long time.
link |
And you meet all these people
link |
in this crazy city called Sigil who know you,
link |
but you don't know yourself.
link |
And you're trying to figure out your name,
link |
your identity and why do you have this curse
link |
where you live forever,
link |
but you keep forgetting every time you get killed.
link |
And it turns out you weren't such a nice person
link |
throughout this entire game world.
link |
But then again, it's this question of,
link |
well, if you can start over and you lose all your memories,
link |
do you have a chance for redemption or not?
link |
So it's incredible game, Plainscape Torment.
link |
And it's actually another one of those games
link |
where you can never actually have a fight.
link |
You can just kind of talk your way out of everything.
link |
And there's probably like 1,000 pages of dialogue
link |
Those guys had a lot of fun and a lot of drugs
link |
Do you think these three games are the kinds
link |
that would still be okay to play today
link |
or are they forever lost in time?
link |
Because we sort of got desensitized
link |
to the richness of computer graphics
link |
and all those kinds of things in modern games.
link |
I think you can enhance these games
link |
because your storytelling medium is so much more engaging.
link |
You know, I was at the movie theater before COVID
link |
and the person to the left of me
link |
was looking at their cell phone during the movie
link |
and the person to the right of me
link |
was looking at their cell phone.
link |
They're just not engaged anymore.
link |
Everybody is attention starved.
link |
And the video game is one of the last mediums
link |
where you have undivided attention of people.
link |
They're really into it.
link |
They're all into that thing.
link |
And so I think the fact that you have VR and AR
link |
and enhanced graphics and all these new gameplay mechanics,
link |
it's a value add instead of a value negative
link |
because ultimately what are you doing?
link |
You're telling stories
link |
and you're trying to connect people to something.
link |
Maybe it's the nature of life and death
link |
or are we truly real?
link |
Are we in a simulation or not or something like that?
link |
It'd be great to do 13th floor as a game
link |
or something like that.
link |
And the question is, well, how good of a story can you tell?
link |
Well, you're constrained by your storytelling tools
link |
and technology. The fact that games
link |
are so much more advanced now means that you now have
link |
many more dimensions of storytelling available to you.
link |
And actually with AI now coming in
link |
and really good AI coming in the next five or 10 years,
link |
your storytelling is not static anymore.
link |
The person can actually majorly participate
link |
and change the outcome in ways
link |
that were previously unpredictable.
link |
The other thing is they're still educational.
link |
You can teach people concepts that they never knew before.
link |
And it's like, if you want to teach people
link |
about bizarre geometries or like Minecraft is a great example.
link |
A lot of people learned how computers work from Redstone.
link |
Think about that. It's true.
link |
Yeah, I mean, yeah, as we said,
link |
we're more and more going to be living
link |
in the video game worlds might as well,
link |
sort of as opposed to just make it fun,
link |
also expand our knowledge, expand our ability to think,
link |
like explore different ideas
link |
and do education broadly defined
link |
within those video game worlds.
link |
So we can do the entirety,
link |
the entirety of life in the video game worlds.
link |
Hopefully it doesn't look like Minecraft, but we'll see.
link |
Do you have advice for young people today,
link |
aside from playing lots of video games?
link |
You know, high schoolers, college students,
link |
thinking about their career, thinking about life.
link |
Well, we no longer live in a world
link |
where you get one skill set.
link |
You do it for 40 years and retire.
link |
I mean, that ship has sailed a long time ago.
link |
So learn how to learn and learn an appreciation
link |
and love for learning.
link |
So that's the first thing, you know,
link |
Josh Waitzkin's wrote this beautiful book,
link |
The Art of Learning, if you ever read it,
link |
So good study skills, you know,
link |
slip box notes, these things,
link |
what was it, Zettel Kasten or whatever it was.
link |
Yeah, there's lots of little techniques
link |
that you can pick up along the way.
link |
And basically the teacher had to process
link |
lots of information very quickly, retain it,
link |
and then decide what's useful to you for that moment.
link |
The second thing is do not undervalue EQ,
link |
emotional intelligence.
link |
We've lived for a long time in a society
link |
where IQ is dominant.
link |
It's like how smart you are excuses everything else.
link |
You could be a horrible human being,
link |
but he's a really bright guy, right?
link |
The asshole mathematician or physicist.
link |
We now live in a world where the balance
link |
is far more important.
link |
You have to be smart, but you also have to be a nice guy
link |
and don't undervalue that.
link |
So learn things like closed circuit communication
link |
and active listening.
link |
These skill sets will always pay enormous dividends
link |
Third, remember that you're judged
link |
for the things that you have
link |
and what you do with those things.
link |
You know, if you have very little,
link |
you still have to do something,
link |
but you have a lot, you have to do even more.
link |
So learn how to give and do that early on.
link |
Learn how to give back, volunteerism, charity,
link |
mentoring, these types of things.
link |
Those are so incredibly valuable to a person's develop.
link |
The people that you mentored in the academic world,
link |
you learn this, you have graduate students.
link |
They one day will be professors
link |
and it might just so happen, they might eclipse you.
link |
Remember, Gauss had a doctoral advisor.
link |
Never forget that, you know, and so did Feynman.
link |
Make sure that you mentor people, you give back
link |
and you learn how to learn
link |
and you learn how to teach.
link |
Super important for your development as a person.
link |
Now you'll notice all those things are agnostic
link |
to whatever domain you happen to have chosen.
link |
You could be in medicine or law or technology,
link |
whatever that you're fancy,
link |
whatever your passion happens to be.
link |
And don't conflate your earning in your career.
link |
If people try to keep putting these things together,
link |
they're increasingly becoming decoupled.
link |
There's a lot of cases where people do their passions
link |
and they do it for free or, you know, for sustenance,
link |
but then they have something else they do on the side
link |
to also augment or supplement their income.
link |
Probably best that way.
link |
When you conflate the two,
link |
you tend to get burned out terribly.
link |
You see this a lot with musicians or other people,
link |
they just, they wanna make music,
link |
but they have to tour or whatever
link |
because they gotta pay bills, stuff like that happens.
link |
Other than that, I mean, I'm not a guru.
link |
I'm not in any particular position.
link |
You showed up in a robe, which I thought was kind of weird.
link |
And you had a crown and you kept calling yourself king.
link |
And that was in a robe that was a Yukata.
link |
Okay, thank you for clarifying.
link |
The audience, he's joking.
link |
I heard somebody's gonna write blog posts.
link |
Charles Hoskinson walks around with a crown.
link |
Let me ask you a ridiculously big
link |
and the most important question.
link |
What's the meaning of this whole thing of life?
link |
Well, I got a story for that.
link |
Does this have something to do with the farm?
link |
Well, no, no, no, it's from Japan.
link |
I used to live in Japan.
link |
I live in Osaka, right next to Namba, a beautiful area.
link |
It's like, if you're gonna live anywhere in Japan,
link |
live in Osaka and you live anywhere in Osaka,
link |
live next to the restaurant district.
link |
Four o clock in the morning and get good ramen.
link |
These are the things in life that make you who you are.
link |
So there was a shogun and he was kind of a bad ass.
link |
He was really good at killing people,
link |
really good at running his empire.
link |
And then he got a bit disgruntled in his late 40s.
link |
And he said, you know, I'm just gonna give it all to my son
link |
and I'm gonna wander around Japan
link |
until I find the perfect cherry blossom.
link |
That's what I'm gonna do.
link |
Everybody thought he went crazy.
link |
He said, no, no, no, that's what I'm gonna do.
link |
And he took his whole entourage with him
link |
and so his son is now the shogun.
link |
And then he's just wandering throughout Japan
link |
and having all these incredible crazy adventures
link |
as he's wandering throughout Japan.
link |
He got a fighting bandits
link |
and loving beautiful women and so forth.
link |
And then 30 years later,
link |
he's passing these two geisha gals
link |
and one of them turns around
link |
and they notice them slumped over next to a cherry tree.
link |
And so she goes over to try to rouse them and he's dead.
link |
And in his hands is a wilted cherry blossom.
link |
So that's a very Japanese story, right?
link |
The point is that it's not the actual blossom
link |
finding the perfection that matters.
link |
It's the things you do on a day to day basis.
link |
The places you go, the people you meet,
link |
the experiences you have
link |
and the joy you take
link |
and the things that you do here in the moment now.
link |
You have to get there.
link |
You know, if you look at Jiro Dreams of Sushi,
link |
there's this guy 70 years of his life
link |
making the same damn piece of sushi again
link |
and again and again.
link |
He's the happiest guy around.
link |
Albert Camus and his story of Sisyphus.
link |
You know, Sisyphus should be miserable.
link |
It's the Greek curse.
link |
He has total clarity of purpose.
link |
And every day he gets to basically rule that stone
link |
just a little bit better than the day before,
link |
a different way than the day before.
link |
And it's not the destination.
link |
It isn't getting the stone up
link |
at the top of the hill that matters.
link |
It's the fact that the act,
link |
you find that joy in that act,
link |
that ikigai, that way of life, that purpose of life.
link |
That I think is the closest thing a human can get
link |
You know, you didn't exist, you're dead.
link |
And if you compare it to the size of the universe
link |
in that time, it's just a little blip.
link |
So all you can do with what you have
link |
is just find meaning in the things
link |
that you do on a daily basis.
link |
And you can't predict the macro.
link |
We have all this wealth and power in America.
link |
What if a world war breaks out?
link |
We could be destitute like war mark Germany.
link |
And so, you know, you could be a big guy.
link |
You could be now living on the street side.
link |
Would you be miserable?
link |
The point of life is getting to a point
link |
that no matter what comes your way,
link |
what misfortune comes your way,
link |
you're in a position where you can find
link |
a modicum of happiness and love and empathy
link |
for others in that moment.
link |
And then the highest pursuit of life
link |
is the ability to share that mindset with other people
link |
and give it to them somehow.
link |
And that's really hard, you know,
link |
because everybody comes in, they're always EOR,
link |
oh, doom and gloom and cynical.
link |
Yeah, and but this and that and reputation, this and that.
link |
You have to somehow transcend all of it and say,
link |
you know, that doesn't matter.
link |
Look at the cherry blossoms.
link |
Aren't they beautiful today?
link |
All right, let's find a better one tomorrow.
link |
See, you're also a fan of fishing, I've read somewhere.
link |
And one of my favorite books is Old Man in the Sea,
link |
where there's an old man sort of battling a big fish
link |
and basically closing out the last chapter
link |
of his life in this battle.
link |
So I think another aspect of life with this boulder,
link |
it feels like the boulder gets bigger and bigger
link |
as we get closer to death.
link |
And, you know, you find yourself married
link |
to a particular struggle in life
link |
that eventually just kind of overtakes the entirety
link |
of meaning of your existence.
link |
Do you think, I know what it is for me.
link |
Do you have something like that?
link |
The broader vision that unites your work with Cardano
link |
and everything you've done in life,
link |
the big fish that you're going to end up
link |
in the dark of night struggling with in the last chapter
link |
of your life, like the big problem you're taking on?
link |
Well, in mathematics, it was the Goldbach conjecture.
link |
I'd like to prove it.
link |
That's probably not gonna happen.
link |
That's a really big fish.
link |
So do you still have a love for mathematics?
link |
Oh God, yeah, of course I do.
link |
You never lose that, you never lose it.
link |
You lose the ability to do deep work
link |
and you don't have the creativity
link |
and the raw inspiration.
link |
This is why I've gotten to automated theorem proving
link |
because what I lack and because I'm getting older,
link |
I can now have computers understand it and use AI
link |
to just solve this stuff.
link |
It's like the cheat codes for math.
link |
Fuck those guys, we'll still do that.
link |
But the mathematics still has those last passions
link |
and there's all kinds of cool things
link |
that I'd like to see done.
link |
Like quota complexes allow you to unify topology
link |
and never theory in really novel ways.
link |
And they're all kinds of cool things, but who cares?
link |
Everybody has those white whales.
link |
Another thing I love to do is bring back to Willie Mammoth.
link |
That's George Church's hidden pleasure
link |
and five to 10 years, it's actually gonna happen.
link |
And I had this beautiful ranch in Wyoming
link |
and I got to find a way to convince George
link |
to let me raise his clone mammoth fence on my ranch.
link |
Among the bison, they'd probably get along really well.
link |
And then I have to learn all these cool things
link |
about Willie Mammoth.
link |
Like, do you shave them in the summertime
link |
and let them get shaggy during the winter
link |
or do you just let that coat go and then fall?
link |
Who knows, it's an undiscovered country.
link |
I just had the image of Charles Hoskinson alone
link |
on a bison farm, trying to raise a Willie Mammoth.
link |
Just start wearing a white suit
link |
and say welcome to Hoskinson's ranch.
link |
I'll have a cane with amber on it.
link |
Yeah, with the chalkboard that you keep scrambling on,
link |
like the beautiful mind in the movie
link |
and you have voices that you can hear.
link |
Oh, the schizophrenia has already come.
link |
You guys are all figments of my imagination anyway.
link |
Now, one of my goals though, I love catfish
link |
and they live a long time.
link |
They get really damn big if you see this guy.
link |
I'd love to catch one now and be in my 60s
link |
and catch the same fish twice and recognize it.
link |
Maybe I'll lift a scar or something.
link |
That'd be really cool.
link |
Going back to the fish thing, you know?
link |
Cause both the fish has gone through a lot.
link |
I've gone through a lot and we can just be like old friends.
link |
And then I'll die of a heart attack
link |
and my mammoths will eat me.
link |
That's something to look forward to.
link |
Charles, this was one of the most amazing conversations
link |
It's truly an honor that you would spend
link |
your valuable time with me and I'm glad you exist
link |
in the cryptocurrency and the technology space
link |
and I can see your love for mathematics
link |
and your love for life just to radiate
link |
through everything you do so.
link |
Thank you for being you and thank you for talking to me today.
link |
That's a lot of fun.
link |
Thank you so much, Lex.
link |
Thanks for listening to this conversation
link |
with Charles Hoskinson and thank you to Gala Games,
link |
All Form, Indeed, ExpressVPN and Eight Sleep.
link |
Check them out in the description
link |
to support this podcast.
link |
And now, let me leave you with some words
link |
from William Faulkner.
link |
You cannot swim for new horizons
link |
until you have the courage to lose sight of the shore.
link |
Thank you for listening and I hope to see you next time.