12: Vitalik Buterin - The Ethereal Prince and His Virtual Machine: Difference between revisions

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== Description ==
{{EpisodeInfoBox
Β 
|title=The Ethereal Prince and His Virtual Machine
|image=[[File:The-portal-podcast-cover-art.jpg]]
|guest=[[Vitalik Buterin]]
|length=01:29:05
|releasedate=21 November 2019
|youtubedate=11 December 2019
|customlabel1=OmnyFM
|customdata1=[https://omny.fm/shows/the-portal/12-vitalik-buterin-the-ethereal-prince-and-his-vir Listen]
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|youtube=[https://www.youtube.com/watch?v=8TwNNgiNZ7Y Watch]
|link4title=Portal Blog
|link4=[https://theportal.group/12-vitalik-buterin-the-ethereal-prince-and-his-virtual-machine/ Read]
|prev=ep11
|next=ep13
}}
In this episode, [[Vitalik Buterin]] sits down with [[Eric Weinstein|Eric]] to discuss ethereum, the wider world of crypto and heterodox economics.
In this episode, [[Vitalik Buterin]] sits down with [[Eric Weinstein|Eric]] to discuss ethereum, the wider world of crypto and heterodox economics.


Taking note of the new development of blockchain in 2010, Eric wrote an essay called β€œGo Virtual Young Man”. A few years later, a Thiel Fellow named Vitalik created a virtual machine with an idiosyncratic smart contract system and a currency. Ironically, Eric had recently become a Managing Director at Thiel Capital. Perennially circling each other intellectually, the two now sit down in person to discuss economic paradigm shifts, crypto and the future of online sovereignty and social coordination.
Taking note of the new development of blockchain in 2010, Eric wrote an essay called [https://www.edge.org/response-detail/11861 β€œGo Virtual Young Man”]. A few years later, a Thiel Fellow named Vitalik created a virtual machine with an idiosyncratic smart contract system and a currency. Ironically, Eric had recently become a Managing Director at Thiel Capital. Perennially circling each other intellectually, the two now sit down in person to discuss economic paradigm shifts, crypto and the future of online sovereignty and social coordination.
Β 
Β 
<span class="button">[[ep11 | Previous Episode]]</span> <span class="button">[https://art19.com/shows/the-portal/episodes/777009b2-9a58-431f-9237-0581716107a8 Listen to Episode 12]</span> <span class="button">[https://rss.art19.com/episodes/777009b2-9a58-431f-9237-0581716107a8.mp3 Download episode (mp3)]</span> <span class="button">[https://www.youtube.com/watch?v=8TwNNgiNZ7Y Watch Episode 12]</span> <span class="button">[[ep13 | Next Episode]]</span>


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[[File:ThePortal-Ep12 VitalikButerin-EricWeinstein.png|600px|thumb|Eric Weinstein (right) talking with Vitalik Buterin (left) on episode 12 of The Portal Podcast]]


== Sponsors ==
== Sponsors ==
'''Wine Access''': [http://wineaccess.com/Portal WineAccess.com/Portal] to get $100 off your first purchase of $250 or more
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== Transcript ==
== Transcript ==
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==== Unedited Transcript ====
==== Unedited Transcript ====


0:00:07.130,0:00:11.130
Eric WeinsteinΒ  0:07
hello you found the portal
Hello, you found the portal. I'm your host, Eric Weinstein, and I'm sitting here today with vitalik butor and the leader and founder of the Ethereum world of cryptocurrencies and smart contracts. Welcome to the portal.
Β 
0:00:09.450,0:00:13.440
I'm your host Eric Weinstein and I'm
Β 
0:00:11.130,0:00:18.390
sitting here today with Vitalik Buterin
Β 
0:00:13.440,0:00:20.850
the leader and a founder of the
Β 
0:00:18.390,0:00:22.560
etherum world of cryptocurrencies and
Β 
0:00:20.850,0:00:24.390
smart contracts. Welcome to The Portal.
Β 
0:00:22.560,0:00:27.240
thank you it's good to be here Eric it's
Β 
0:00:24.390,0:00:28.740
terrific to have you now in general when
Β 
0:00:27.240,0:00:30.480
I see you interviewed immediately
Β 
0:00:28.740,0:00:32.850
everybody goes straight to crypto
Β 
0:00:30.480,0:00:34.350
currencies in a Myriam but one of the
Β 
0:00:32.850,0:00:37.469
things that I found fascinating about
Β 
0:00:34.350,0:00:40.800
your story is is that in order to be a
Β 
0:00:37.469,0:00:44.309
good steward of this new and emerging
Β 
0:00:40.800,0:00:46.950
economics you've actually applied
Β 
0:00:44.309,0:00:49.620
yourself a great deal to standard and
Β 
0:00:46.950,0:00:52.980
regular economic theory and I was
Β 
0:00:49.620,0:00:55.710
curious if I understand correctly you
Β 
0:00:52.980,0:00:57.719
dropped out of college after a year
Β 
0:00:55.710,0:00:59.160
you're self-taught in economics but
Β 
0:00:57.719,0:01:01.649
you've taken a real interest in
Β 
0:00:59.160,0:01:03.290
understanding how markets and economic
Β 
0:01:01.649,0:01:06.450
theory work is that a fair description
Β 
0:01:03.290,0:01:10.380
yeah I think so and economics has been
Β 
0:01:06.450,0:01:13.500
of an interest for me definitely for a
Β 
0:01:10.380,0:01:17.310
long time I mean when I discovered
Β 
0:01:13.500,0:01:18.720
Bitcoin back in 2011 and I was still in
Β 
0:01:17.310,0:01:21.960
high school it was this kind of
Β 
0:01:18.720,0:01:26.070
interesting confluence of ideas that I
Β 
0:01:21.960,0:01:28.740
was already pretty attracted to so open
Β 
0:01:26.070,0:01:30.299
source culture that was something that a
Β 
0:01:28.740,0:01:33.030
and a good friend from high school a
Β 
0:01:30.299,0:01:34.920
Christopher all I had already and if
Β 
0:01:33.030,0:01:38.369
indoctrinated me with really well I'm
Β 
0:01:34.920,0:01:42.540
the of the mathematical in cryptographic
Β 
0:01:38.369,0:01:45.240
aspects also libertarianism in Austrian
Β 
0:01:42.540,0:01:47.130
economics was kind of the zeitgeist of
Β 
0:01:45.240,0:01:49.710
the Bitcoin space at the day and those
Β 
0:01:47.130,0:01:53.280
were of ideas that I definitely have
Β 
0:01:49.710,0:01:56.250
found philosophically quite attractive
Β 
0:01:53.280,0:01:59.009
at that time and you know I was
Β 
0:01:56.250,0:02:01.979
definitely curious and I read a bunch of
Β 
0:01:59.009,0:02:03.899
books a yeah and read the Austrian
Β 
0:02:01.979,0:02:05.969
economics Kanaan because that's what the
Β 
0:02:03.899,0:02:09.810
Bitcoin people were kind of talking
Β 
0:02:05.969,0:02:12.090
about all day I read some kind of
Β 
0:02:09.810,0:02:13.170
behavioral economics literature Ariely
Β 
0:02:12.090,0:02:15.030
Kahneman and
Β 
0:02:13.170,0:02:17.940
Nakia D&E and all of those people just
Β 
0:02:15.030,0:02:22.770
because I knew that I had to read other
Β 
0:02:17.940,0:02:26.040
stuff for balance um and yeah and also
Β 
0:02:22.770,0:02:28.830
economics itself is a kind in pretty
Β 
0:02:26.040,0:02:30.270
mathematical and I've subject well kind
Β 
0:02:28.830,0:02:33.840
of right it's it's on the borderline
Β 
0:02:30.270,0:02:35.880
because it's kind of both mathematical
Β 
0:02:33.840,0:02:37.709
and you got your curves and your
Β 
0:02:35.880,0:02:39.569
derivatives and your intersections but
Β 
0:02:37.709,0:02:42.500
also it's humanity is right it's like
Β 
0:02:39.569,0:02:46.140
really at this intersection of like both
Β 
0:02:42.500,0:02:48.330
figuring out how to apply these models
Β 
0:02:46.140,0:02:49.709
to and of specific cases and also trying
Β 
0:02:48.330,0:02:51.360
to figure out well which models are
Β 
0:02:49.709,0:02:53.190
really correct in the first place and
Β 
0:02:51.360,0:02:54.989
like the first question you can't answer
Β 
0:02:53.190,0:02:57.600
with math but the second question you
Β 
0:02:54.989,0:02:58.470
really can't and you need other kinds of
Β 
0:02:57.600,0:03:01.769
thinking as well
Β 
0:02:58.470,0:03:05.630
well this is an area of my own interest
Β 
0:03:01.769,0:03:08.310
because the way I see it economics is
Β 
0:03:05.630,0:03:10.560
odd in a way that very few people I
Β 
0:03:08.310,0:03:12.690
think have appreciated in that if we
Β 
0:03:10.560,0:03:15.269
take what could be argued to be our two
Β 
0:03:12.690,0:03:17.970
greatest ideas in scientific scientific
Β 
0:03:15.269,0:03:22.079
man let's say one would be sort of the
Β 
0:03:17.970,0:03:24.420
geometric dynamics of physics and
Β 
0:03:22.079,0:03:27.480
economics has been constructed to be and
Β 
0:03:24.420,0:03:30.180
as if physics if you will and on the
Β 
0:03:27.480,0:03:31.859
other hand and inherits from the theory
Β 
0:03:30.180,0:03:33.690
of selection you could say that markets
Β 
0:03:31.859,0:03:35.850
are the continuation of systems of
Β 
0:03:33.690,0:03:38.700
selective pressures by other means and
Β 
0:03:35.850,0:03:42.329
so what happens when our two greatest
Β 
0:03:38.700,0:03:45.420
ideas touch each other and they do it in
Β 
0:03:42.329,0:03:47.370
a place which has very bizarre
Β 
0:03:45.420,0:03:50.640
properties by my way of thinking that is
Β 
0:03:47.370,0:03:52.890
that economists are on the one hand very
Β 
0:03:50.640,0:03:54.510
rigorous thinkers and are also very
Β 
0:03:52.890,0:03:57.180
susceptible to what we might call
Β 
0:03:54.510,0:03:59.940
political economy and distorted thinking
Β 
0:03:57.180,0:04:05.850
does that ring true to you yeah
Β 
0:03:59.940,0:04:09.900
definitely there's definitely this kind
Β 
0:04:05.850,0:04:12.060
of combination of I think for on the one
Β 
0:04:09.900,0:04:15.139
hand you have these mathematical
Β 
0:04:12.060,0:04:18.930
formulas and on the other hand these
Β 
0:04:15.139,0:04:21.810
assumptions and often like the
Β 
0:04:18.930,0:04:23.789
assumptions can be pretty pretty well
Β 
0:04:21.810,0:04:26.510
hidden and they're kind of difficult to
Β 
0:04:23.789,0:04:28.430
see at first glance right in
Β 
0:04:26.510,0:04:32.230
like it really can be subtle right so
Β 
0:04:28.430,0:04:34.220
like one of the arguments that
Β 
0:04:32.230,0:04:35.690
economists tend to put forward is
Β 
0:04:34.220,0:04:38.000
basically like mutually beneficial
Β 
0:04:35.690,0:04:39.260
transactions are but are beneficial and
Β 
0:04:38.000,0:04:43.190
so like we should not interfere with
Β 
0:04:39.260,0:04:45.590
them right like if I have a client
Β 
0:04:43.190,0:04:47.060
battle and I I want to sell you the
Β 
0:04:45.590,0:04:49.430
Klein bottle you're willing to pay five
Β 
0:04:47.060,0:04:50.870
dollars then I clearly value it at less
Β 
0:04:49.430,0:04:52.340
than five dollars you evaluated more
Β 
0:04:50.870,0:04:55.340
than five dollars therefore the
Β 
0:04:52.340,0:04:57.350
transactions on net good and like I
Β 
0:04:55.340,0:04:58.280
therefore I should give you the bottle
Β 
0:04:57.350,0:05:02.180
and you should give me the money and
Β 
0:04:58.280,0:05:06.140
that's what we would do but at the the
Β 
0:05:02.180,0:05:08.990
reasons why that 10 sometimes breaks
Β 
0:05:06.140,0:05:10.640
down liquor in many ways more subtle
Β 
0:05:08.990,0:05:13.550
right like first you have monopoly
Β 
0:05:10.640,0:05:15.770
issues like if I'm the only person
Β 
0:05:13.550,0:05:18.080
selling wine bottles then I might want
Β 
0:05:15.770,0:05:19.580
to sell them at a yeah and a higher
Β 
0:05:18.080,0:05:22.420
price than you'd be willing to accept
Β 
0:05:19.580,0:05:24.920
because I want to extract more value and
Β 
0:05:22.420,0:05:27.200
sometimes the things that matter most to
Β 
0:05:24.920,0:05:29.360
society aren't things that we can
Β 
0:05:27.200,0:05:31.340
transfer between people from one person
Β 
0:05:29.360,0:05:33.230
to another like wine bottles but like
Β 
0:05:31.340,0:05:35.540
public goods and like the biggest public
Β 
0:05:33.230,0:05:39.170
good of all is sort of is the idea right
Β 
0:05:35.540,0:05:40.820
and an idea well if I have an idea and I
Β 
0:05:39.170,0:05:45.230
give you the idea I still have the idea
Β 
0:05:40.820,0:05:47.240
so it's something that once you release
Β 
0:05:45.230,0:05:49.070
it it's out there and there isn't this
Β 
0:05:47.240,0:05:50.750
kind of property of that so you know
Β 
0:05:49.070,0:05:54.470
should we just pause just briefly to
Β 
0:05:50.750,0:05:56.450
talk about what a public good is yeah so
Β 
0:05:54.470,0:05:58.220
a public good is technically defined
Β 
0:05:56.450,0:06:01.250
within economics many people have an
Β 
0:05:58.220,0:06:03.490
intuitive idea as something which is as
Β 
0:06:01.250,0:06:05.830
you're stating has this property of
Β 
0:06:03.490,0:06:09.020
inexhaustibility mm-hm
Β 
0:06:05.830,0:06:10.130
and then the other attribute would be
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0:06:09.020,0:06:12.920
excludability
Β 
0:06:10.130,0:06:14.360
which is non excludability formal sorry
Β 
0:06:12.920,0:06:17.180
nuts non excludability
Β 
0:06:14.360,0:06:20.630
sorry the the attribute of excludability
Β 
0:06:17.180,0:06:24.910
and is used to define a public good so
Β 
0:06:20.630,0:06:27.620
if something is inexhaustible and in
Β 
0:06:24.910,0:06:30.520
excludable then it has this weird
Β 
0:06:27.620,0:06:33.260
property that even hardline economists
Β 
0:06:30.520,0:06:35.540
would agree that the market may fail to
Β 
0:06:33.260,0:06:39.110
price in fact will fail to price the
Β 
0:06:35.540,0:06:39.409
value to society of that object so there
Β 
0:06:39.110,0:06:42.169
is an
Β 
0:06:39.409,0:06:44.269
mission within economics that there are
Β 
0:06:42.169,0:06:49.519
zones of failure right
Β 
0:06:44.269,0:06:52.580
well I guess the kind of the big kind of
Β 
0:06:49.519,0:06:54.409
rethinking that needs to happen is that
Β 
0:06:52.580,0:06:56.719
there is a long been this kind of
Β 
0:06:54.409,0:06:58.429
site-geist to that private goods like
Β 
0:06:56.719,0:07:00.050
things that I have and if I give it to
Β 
0:06:58.429,0:07:01.819
you I don't have it and you have it are
Β 
0:07:00.050,0:07:04.729
the norm and public goods are a rare
Β 
0:07:01.819,0:07:06.409
exception but like really public goods
Β 
0:07:04.729,0:07:08.149
are pretty darn important right like if
Β 
0:07:06.409,0:07:11.179
we didn't have public goods then we'd be
Β 
0:07:08.149,0:07:12.829
a trading sticks and B and Bear pelts
Β 
0:07:11.179,0:07:15.379
and we basically still be cavemen like
Β 
0:07:12.829,0:07:18.519
they're basically the like an army would
Β 
0:07:15.379,0:07:20.689
be a public yeah yeah and or me well
Β 
0:07:18.519,0:07:23.539
armies are interesting cuz there are
Β 
0:07:20.689,0:07:25.279
kind of to us like in a medium scale
Β 
0:07:23.539,0:07:26.959
context or a public good and in the
Β 
0:07:25.279,0:07:28.519
large-scale context or a public bad
Β 
0:07:26.959,0:07:30.469
because if everyone's army is we're
Β 
0:07:28.519,0:07:31.729
forced to be cut down by a factor of 10
Β 
0:07:30.469,0:07:34.579
like we'd all be better off
Β 
0:07:31.729,0:07:36.259
so economics is like really subtle that
Β 
0:07:34.579,0:07:40.579
way especially once you have kind of two
Β 
0:07:36.259,0:07:42.379
layers of scale I'd play sure now one
Β 
0:07:40.579,0:07:45.050
thing that I worry a lot about that
Β 
0:07:42.379,0:07:48.919
almost nobody seems to join me in is
Β 
0:07:45.050,0:07:51.889
that in our mutual world I don't know
Β 
0:07:48.919,0:07:54.769
what to call it of people who are
Β 
0:07:51.889,0:07:57.019
experimenting with what I would say the
Β 
0:07:54.769,0:08:00.199
mainstream would consider far out ideas
Β 
0:07:57.019,0:08:03.649
like radical life extension crypto
Β 
0:08:00.199,0:08:06.019
currencies is a you know potentially
Β 
0:08:03.649,0:08:08.539
being rival risks with sovereign
Β 
0:08:06.019,0:08:11.869
currencies but in our world we talk a
Β 
0:08:08.539,0:08:14.239
lot about the abundance economy in a
Β 
0:08:11.869,0:08:18.110
world of abundance and I'm terrified of
Β 
0:08:14.239,0:08:20.599
a world of abundance because one of the
Β 
0:08:18.110,0:08:23.629
properties that software has had is that
Β 
0:08:20.599,0:08:25.729
it has replaced physical goods and
Β 
0:08:23.629,0:08:30.649
services which have these attributes
Β 
0:08:25.729,0:08:33.620
they are not public with small files and
Β 
0:08:30.649,0:08:36.649
when a small file is not encrypted it
Β 
0:08:33.620,0:08:40.659
has the attributes of a public good and
Β 
0:08:36.649,0:08:44.480
therefore value and price can can castle
Β 
0:08:40.659,0:08:46.850
that's terrifying because then this
Β 
0:08:44.480,0:08:49.370
weird thing of markets which allows us
Β 
0:08:46.850,0:08:51.559
respite from dictatorship in somebody
Β 
0:08:49.370,0:08:52.970
directing our activities and allows us
Β 
0:08:51.559,0:08:55.339
to self-direct goes
Β 
0:08:52.970,0:08:58.069
away because things can't be priced
Β 
0:08:55.339,0:09:00.379
accurately are you do you have any does
Β 
0:08:58.069,0:09:03.769
that have any purchase on your thinking
Β 
0:09:00.379,0:09:05.779
yeah so and I think give definitely you
Β 
0:09:03.769,0:09:08.060
kind of struck at a very important point
Β 
0:09:05.779,0:09:11.149
though I think and if my own framing of
Β 
0:09:08.060,0:09:14.449
the point is slightly different no I
Β 
0:09:11.149,0:09:16.819
think like first of all like you start
Β 
0:09:14.449,0:09:18.680
off by think by realizing that kind of
Β 
0:09:16.819,0:09:20.149
private property and things is not
Β 
0:09:18.680,0:09:23.029
something that fell out of the sky it's
Β 
0:09:20.149,0:09:26.000
a social technology right it's that we
Β 
0:09:23.029,0:09:30.560
have these kind of norms that basically
Β 
0:09:26.000,0:09:34.100
say oh you kid we will create this kind
Β 
0:09:30.560,0:09:35.930
of mapping from objects to people and if
Β 
0:09:34.100,0:09:37.519
an object as maps to you then you're
Β 
0:09:35.930,0:09:38.810
allowed to do basically whatever the
Β 
0:09:37.519,0:09:40.550
hell you want with it and other people
Β 
0:09:38.810,0:09:41.060
cannot do anything with it without your
Β 
0:09:40.550,0:09:44.980
permission
Β 
0:09:41.060,0:09:47.240
and if that concept did not exist then
Β 
0:09:44.980,0:09:50.149
physical objects would be public goods
Β 
0:09:47.240,0:09:51.829
right because like if there's a klein
Β 
0:09:50.149,0:09:53.600
bottle over here the Quine bottle would
Β 
0:09:51.829,0:09:56.629
be there but like really anyone could
Β 
0:09:53.600,0:09:58.759
take it and if you produce wine bottles
Β 
0:09:56.629,0:10:00.230
then like you're not producing something
Β 
0:09:58.759,0:10:01.699
for yourself you're producing something
Β 
0:10:00.230,0:10:04.180
for pretty much different the first
Β 
0:10:01.699,0:10:07.370
person who comes along and grabs it and
Β 
0:10:04.180,0:10:10.370
so property rights right are this kind
Β 
0:10:07.370,0:10:14.000
of social technology that helps make a
Β 
0:10:10.370,0:10:15.410
private good economy is tractable and we
Β 
0:10:14.000,0:10:17.149
could consider making social
Β 
0:10:15.410,0:10:18.769
technologies to make public great
Β 
0:10:17.149,0:10:21.309
economies tractable right like the
Β 
0:10:18.769,0:10:24.079
existence of public goods by itself is
Β 
0:10:21.309,0:10:26.360
and it's not good or bad like arguably
Β 
0:10:24.079,0:10:28.040
it's even good because it means that
Β 
0:10:26.360,0:10:30.649
people can't cooperate with each other
Β 
0:10:28.040,0:10:33.620
on such large scales the bad thing is
Β 
0:10:30.649,0:10:35.120
that we don't really have good tools for
Β 
0:10:33.620,0:10:37.819
handling it and specifically we don't
Β 
0:10:35.120,0:10:42.620
have good tools for handling yet that
Β 
0:10:37.819,0:10:45.410
managed to simultaneously avoid both not
Β 
0:10:42.620,0:10:48.199
giving good results and like basically
Β 
0:10:45.410,0:10:51.230
being centralized in dictatorial and so
Β 
0:10:48.199,0:10:53.389
this is where my interest in radical
Β 
0:10:51.230,0:10:55.160
exchange comes in so this was this a
Β 
0:10:53.389,0:10:57.949
movement that was started by gone while
Β 
0:10:55.160,0:11:00.889
a couple of years ago when he wrote this
Β 
0:10:57.949,0:11:02.630
a radical markets book and he advanced
Β 
0:11:00.889,0:11:04.639
some of his proposals like harberger
Β 
0:11:02.630,0:11:05.860
taxes and a quadratic voting were the
Β 
0:11:04.639,0:11:09.670
ones that
Β 
0:11:05.860,0:11:12.579
and of the most popular and the and of
Β 
0:11:09.670,0:11:15.750
the core and if idea behind the ideas
Β 
0:11:12.579,0:11:18.160
basically as like let's creates
Β 
0:11:15.750,0:11:21.279
structures of kind of norms and
Β 
0:11:18.160,0:11:22.690
incentives that try to have the best
Β 
0:11:21.279,0:11:27.339
properties that we can get out of
Β 
0:11:22.690,0:11:30.010
markets but do you do so without like
Β 
0:11:27.339,0:11:32.200
basically economically breaking in the
Β 
0:11:30.010,0:11:34.839
way that we know and if existing
Β 
0:11:32.200,0:11:36.730
property right systems do once you enter
Β 
0:11:34.839,0:11:38.350
a world where none of everything that
Β 
0:11:36.730,0:11:40.839
you build just inherently affects
Β 
0:11:38.350,0:11:42.670
millions of people well this is this is
Β 
0:11:40.839,0:11:45.760
an interesting perspective you of course
Β 
0:11:42.670,0:11:48.490
are famous for implementing this
Β 
0:11:45.760,0:11:50.709
aetherium protocol but before we ever
Β 
0:11:48.490,0:11:53.829
get to computer protocols there are sort
Β 
0:11:50.709,0:11:55.450
of legal and structural protocols that
Β 
0:11:53.829,0:11:57.820
we impose upon ourselves in the form of
Β 
0:11:55.450,0:12:01.570
government and markets that are
Β 
0:11:57.820,0:12:06.089
subordinate to government and there's a
Β 
0:12:01.570,0:12:09.390
weird way in which you may start a
Β 
0:12:06.089,0:12:12.610
process by which you write down rules
Β 
0:12:09.390,0:12:15.370
for how a society should function but
Β 
0:12:12.610,0:12:17.589
once those rules are written down you
Β 
0:12:15.370,0:12:19.930
may discover all sorts of unintended
Β 
0:12:17.589,0:12:23.110
properties of that rule set and there's
Β 
0:12:19.930,0:12:26.860
a real question can we actually unhook
Β 
0:12:23.110,0:12:32.290
ourselves from the killer app that is
Β 
0:12:26.860,0:12:34.209
capitalism or American democracy and if
Β 
0:12:32.290,0:12:39.279
we start to realize that that app is
Β 
0:12:34.209,0:12:41.470
running out of control I guess in for
Β 
0:12:39.279,0:12:44.230
and of myself as a enough social
Β 
0:12:41.470,0:12:46.029
technologist and I definitely don't
Β 
0:12:44.230,0:12:48.370
think that we should be kind of
Β 
0:12:46.029,0:12:51.550
overturning entire countries with the
Β 
0:12:48.370,0:12:53.459
new mechanisms overnight I think and I
Β 
0:12:51.550,0:12:58.360
was insinuating oh definitely I think
Β 
0:12:53.459,0:13:00.490
like that's figuring out how to kind of
Β 
0:12:58.360,0:13:02.500
solve like grand problems of humanity is
Β 
0:13:00.490,0:13:04.690
a long-term goal but I mean sure term
Β 
0:13:02.500,0:13:08.320
goals are there is definitely can make
Β 
0:13:04.690,0:13:11.610
better right so I and this is actually
Β 
0:13:08.320,0:13:13.870
part of why I find a cryptocurrency and
Β 
0:13:11.610,0:13:17.140
blockchains interesting because they are
Β 
0:13:13.870,0:13:18.810
in a lot of ways this ideal ground for
Β 
0:13:17.140,0:13:22.500
economic experimentation
Β 
0:13:18.810,0:13:26.310
different types great so I to give one
Β 
0:13:22.500,0:13:28.590
concrete example and in so one of the
Β 
0:13:26.310,0:13:30.360
ideas that go on while and myself have
Β 
0:13:28.590,0:13:33.050
come up with and are pushing forward is
Β 
0:13:30.360,0:13:36.510
something called quadratic funding and
Β 
0:13:33.050,0:13:39.779
the way that quadratic funding works is
Β 
0:13:36.510,0:13:41.970
roughly this right so you have a central
Β 
0:13:39.779,0:13:43.470
kind of pool of funding and you could
Β 
0:13:41.970,0:13:44.820
imagine this coming from a government
Β 
0:13:43.470,0:13:46.620
you could imagine this coming from
Β 
0:13:44.820,0:13:50.330
wealthy donors you could imagine it just
Β 
0:13:46.620,0:13:52.740
in being put together by some like
Β 
0:13:50.330,0:13:55.860
crypto economic protocol it could come
Β 
0:13:52.740,0:13:58.770
from anywhere and then you allow people
Β 
0:13:55.860,0:14:01.410
to basically set up projects and you
Β 
0:13:58.770,0:14:03.180
what people say I have a project here is
Β 
0:14:01.410,0:14:05.700
something that I'm doing and if you like
Β 
0:14:03.180,0:14:07.980
this then you can donate to me and give
Β 
0:14:05.700,0:14:10.529
what people donate to projects and then
Β 
0:14:07.980,0:14:13.440
the core of the mechanism is basically
Β 
0:14:10.529,0:14:15.120
that if there is a projects and multiple
Β 
0:14:13.440,0:14:17.700
people donate to so there's some
Β 
0:14:15.120,0:14:20.880
projects you donate to it and someone
Β 
0:14:17.700,0:14:23.370
else donates to it as well then your
Β 
0:14:20.880,0:14:24.839
donation doesn't just benefit you it
Β 
0:14:23.370,0:14:26.339
also benefits the other person and the
Β 
0:14:24.839,0:14:28.740
other person's donation doesn't just
Β 
0:14:26.339,0:14:31.560
benefit them it also benefits you and so
Β 
0:14:28.740,0:14:33.180
to kind of counteract that kind of
Β 
0:14:31.560,0:14:35.700
market failure the mechanism basically
Β 
0:14:33.180,0:14:37.650
says well we're gonna multiply the
Β 
0:14:35.700,0:14:38.850
effect of your donation by two and
Β 
0:14:37.650,0:14:41.790
multiply the effect of the other
Β 
0:14:38.850,0:14:43.380
person's donation by two and so now both
Β 
0:14:41.790,0:14:45.510
of your incentives are kind of aligned
Β 
0:14:43.380,0:14:47.430
with the whole and you extend this
Β 
0:14:45.510,0:14:48.990
mechanism so instead of supporting two
Β 
0:14:47.430,0:14:51.150
people it supports an arbitrary number
Β 
0:14:48.990,0:14:53.430
of people and you kind of calculate
Β 
0:14:51.150,0:14:57.630
these subsidies across all possible
Β 
0:14:53.430,0:14:59.370
pairs of people and what you get is this
Β 
0:14:57.630,0:15:00.930
formula that basically says you let
Β 
0:14:59.370,0:15:02.820
people donate to different projects you
Β 
0:15:00.930,0:15:04.890
look at how many people donated and how
Β 
0:15:02.820,0:15:06.870
much money you've donated and based on
Β 
0:15:04.890,0:15:09.330
this from the central pool of funding
Β 
0:15:06.870,0:15:11.880
you give this extra subsidy and so it
Β 
0:15:09.330,0:15:16.650
basically is like a market for public
Β 
0:15:11.880,0:15:18.480
goods right and in the etherium
Β 
0:15:16.650,0:15:20.190
ecosystem there is something called that
Β 
0:15:18.480,0:15:22.440
get coin grants where we've basically
Β 
0:15:20.190,0:15:25.589
started like trying to use this
Β 
0:15:22.440,0:15:27.510
mechanism to fund public goods inside
Β 
0:15:25.589,0:15:30.209
the etherium ecosystem right so this
Β 
0:15:27.510,0:15:32.670
could be implementations of the etherium
Β 
0:15:30.209,0:15:34.320
protocol it could be scaling solutions
Β 
0:15:32.670,0:15:37.530
could be wallets it could be educational
Β 
0:15:34.320,0:15:39.830
resources and we've had a and of tests
Β 
0:15:37.530,0:15:42.120
around recently with about and if
Β 
0:15:39.830,0:15:44.340
$200,000 in this central matching pool
Β 
0:15:42.120,0:15:47.010
and it recently finished and you can go
Β 
0:15:44.340,0:15:49.410
to a get coin dot Co slash grants to see
Β 
0:15:47.010,0:15:51.210
the results and we got contributions
Β 
0:15:49.410,0:15:52.890
from hundreds of people and the results
Β 
0:15:51.210,0:15:56.750
a gave were actually pretty reasonable
Β 
0:15:52.890,0:16:00.240
so in tests yeah and and so I I think
Β 
0:15:56.750,0:16:03.360
cerium could have a lot of value is and
Β 
0:16:00.240,0:16:05.150
just being a test net in bed for and
Β 
0:16:03.360,0:16:07.980
decentralized governance and
Β 
0:16:05.150,0:16:10.200
decentralized public good funding
Β 
0:16:07.980,0:16:12.360
infrastructure of this kind well I think
Β 
0:16:10.200,0:16:13.860
that that's fascinating I guess one of
Β 
0:16:12.360,0:16:16.620
the ways in which I would understand
Β 
0:16:13.860,0:16:18.570
that is you know when my wife who's an
Β 
0:16:16.620,0:16:21.150
economist and I talk about this stuff we
Β 
0:16:18.570,0:16:23.250
often talk about a market democracy has
Β 
0:16:21.150,0:16:25.230
these two voting systems one is one
Β 
0:16:23.250,0:16:25.980
dollar one vote and the other is one
Β 
0:16:25.230,0:16:27.480
person one vote
Β 
0:16:25.980,0:16:30.530
theoretically anyway even if that's
Β 
0:16:27.480,0:16:33.030
honor only in the debris I and like
Β 
0:16:30.530,0:16:35.040
liberal democracy does this horrible
Β 
0:16:33.030,0:16:36.570
thing of like treating these s opposite
Β 
0:16:35.040,0:16:37.920
poles where something is either one or
Β 
0:16:36.570,0:16:39.270
the other and they're and they're often
Β 
0:16:37.920,0:16:41.370
fighting each other one really
Β 
0:16:39.270,0:16:41.700
everything's a spectrum and I like that
Β 
0:16:41.370,0:16:43.470
a lot
Β 
0:16:41.700,0:16:45.870
I mean an another thing that we've been
Β 
0:16:43.470,0:16:48.410
discussing recently and this again is
Β 
0:16:45.870,0:16:51.510
sort of drink with with Pia Milani is
Β 
0:16:48.410,0:16:54.060
thinking about the Chicago approximation
Β 
0:16:51.510,0:16:56.430
you've got some reality that's
Β 
0:16:54.060,0:16:59.220
incredibly nonlinear and complicated and
Β 
0:16:56.430,0:17:01.110
then weirdly yeah in a one of these
Β 
0:16:59.220,0:17:03.990
famous instances where the map is not
Β 
0:17:01.110,0:17:07.310
the territory you take this incredibly
Β 
0:17:03.990,0:17:09.210
simplified world where agents have this
Β 
0:17:07.310,0:17:10.830
properties you can't even believe you
Β 
0:17:09.210,0:17:12.990
would ascribe to a human being where you
Β 
0:17:10.830,0:17:16.080
thought Homo economicus and you it's
Β 
0:17:12.990,0:17:18.270
perfectly rational and it it has all of
Β 
0:17:16.080,0:17:20.610
these characteristics like an automaton
Β 
0:17:18.270,0:17:24.060
that only makes rational decisions and
Β 
0:17:20.610,0:17:26.280
then you impose that like through law
Β 
0:17:24.060,0:17:29.550
and economics programs and suddenly
Β 
0:17:26.280,0:17:32.280
you've distorted your society by taking
Β 
0:17:29.550,0:17:34.530
the map as the territory so seriously
Β 
0:17:32.280,0:17:38.720
that you don't realize that you're
Β 
0:17:34.530,0:17:44.040
destroying something and distorting yeah
Β 
0:17:38.720,0:17:46.500
no that's definitely and I think it's a
Β 
0:17:44.040,0:17:49.140
social it's one approximation
Β 
0:17:46.500,0:17:50.820
and you mean we're never going to have
Β 
0:17:49.140,0:17:52.860
approximations that are perfect because
Β 
0:17:50.820,0:17:54.210
the world is just so we're glad to hear
Β 
0:17:52.860,0:17:58.169
that yeah and the world is just so
Β 
0:17:54.210,0:18:01.140
complicated and so even rapidly changing
Β 
0:17:58.169,0:18:03.419
in a 21st century like aprox in all
Β 
0:18:01.140,0:18:05.070
approximations are bullshit but like you
Β 
0:18:03.419,0:18:06.480
have to find a couple of good ones that
Β 
0:18:05.070,0:18:07.980
work reasonably well and make progress
Β 
0:18:06.480,0:18:09.419
for us and I think that one of the
Β 
0:18:07.980,0:18:11.760
things that's unfairly done to
Β 
0:18:09.419,0:18:13.830
cryptocurrencies is that we expect them
Β 
0:18:11.760,0:18:16.919
to solve all of the problems that
Β 
0:18:13.830,0:18:19.110
already cropped up yes in our forms of
Β 
0:18:16.919,0:18:21.870
governance and our forms of currency in
Β 
0:18:19.110,0:18:24.559
exchange in court systems and that what
Β 
0:18:21.870,0:18:27.090
we should be asking of them is to be
Β 
0:18:24.559,0:18:30.570
improvements or to augment mm-hmm
Β 
0:18:27.090,0:18:34.470
already existing systems now one of the
Β 
0:18:30.570,0:18:37.380
odd things about governance is we could
Β 
0:18:34.470,0:18:41.400
view you as in some sense starting a
Β 
0:18:37.380,0:18:44.940
rival virtual country that has a legal
Β 
0:18:41.400,0:18:46.919
system because the etherium I don't know
Β 
0:18:44.940,0:18:48.390
what to call it Network platform
Β 
0:18:46.919,0:18:50.610
protocol
Β 
0:18:48.390,0:18:52.710
yeah rules coins and it has the right to
Β 
0:18:50.610,0:18:55.409
reassign those coins and not only that
Β 
0:18:52.710,0:18:56.580
but it has a stand-in for the legal
Β 
0:18:55.409,0:19:03.059
system in the form of what are called
Β 
0:18:56.580,0:19:06.090
smart contracts mmm-hmm normally a we
Β 
0:19:03.059,0:19:08.400
have this concept in governance I guess
Β 
0:19:06.090,0:19:10.559
it goes back to Weber that a government
Β 
0:19:08.400,0:19:12.960
is supposed to be a monopoly on violence
Β 
0:19:10.559,0:19:15.570
which is an odd definition that you
Β 
0:19:12.960,0:19:18.330
recover the concept of government from
Β 
0:19:15.570,0:19:21.059
monopolizing violence and then you you
Β 
0:19:18.330,0:19:23.240
sort of unearth and and unpack all of
Β 
0:19:21.059,0:19:25.980
the features of government from that one
Β 
0:19:23.240,0:19:28.890
generating function in some sense a
Β 
0:19:25.980,0:19:31.890
cryptocurrency and smart contracts
Β 
0:19:28.890,0:19:35.220
derive from math rather than violence
Β 
0:19:31.890,0:19:37.799
they derive from math and social
Β 
0:19:35.220,0:19:39.630
consensus right I love the fact that I
Β 
0:19:37.799,0:19:41.549
was gonna get to that but I know I guess
Β 
0:19:39.630,0:19:43.440
this is important right because like for
Β 
0:19:41.549,0:19:45.299
example you know you have the Bitcoin
Β 
0:19:43.440,0:19:47.130
blockchain and then you have the
Β 
0:19:45.299,0:19:49.500
litecoin blockchain which operates under
Β 
0:19:47.130,0:19:51.090
ik almost exactly the set at the same
Β 
0:19:49.500,0:19:53.730
set of rules as the Bitcoin blockchain
Β 
0:19:51.090,0:19:55.500
and yet the Bitcoin blockchain has a
Β 
0:19:53.730,0:19:56.760
hundred million dollar market cap and
Β 
0:19:55.500,0:19:58.289
the white coin blockchain has a three
Β 
0:19:56.760,0:20:00.510
billion dollar market cap or something
Β 
0:19:58.289,0:20:04.110
like that and much less usage so
Β 
0:20:00.510,0:20:06.750
like blog Chin's are definitely not just
Β 
0:20:04.110,0:20:08.730
math and technology math and technology
Β 
0:20:06.750,0:20:10.560
are the substrate and maybe in the same
Β 
0:20:08.730,0:20:12.090
way that the military is like the
Β 
0:20:10.560,0:20:15.600
substrate of keeping a country together
Β 
0:20:12.090,0:20:18.600
but they're including police force yeah
Β 
0:20:15.600,0:20:19.740
exactly but like they're the substrate
Β 
0:20:18.600,0:20:22.230
but they're not the country right the
Β 
0:20:19.740,0:20:25.020
country is the community well and this
Β 
0:20:22.230,0:20:28.620
goes to what I would love to get into
Β 
0:20:25.020,0:20:31.230
you with love to get into with you which
Β 
0:20:28.620,0:20:34.260
is the way in which different utopian
Β 
0:20:31.230,0:20:37.230
dreams collide in the space of
Β 
0:20:34.260,0:20:40.110
cryptocurrencies so for example there
Β 
0:20:37.230,0:20:42.810
are some dreams that may sound more like
Β 
0:20:40.110,0:20:44.880
what I assume you may be active in the
Β 
0:20:42.810,0:20:46.710
effective altruism community is that a
Β 
0:20:44.880,0:20:48.300
possibility yeah
Β 
0:20:46.710,0:20:51.720
which tries to figure how to do the most
Β 
0:20:48.300,0:20:55.110
good to do good efficiently rather than
Β 
0:20:51.720,0:20:57.750
sanctimoniously there are other people
Β 
0:20:55.110,0:21:00.420
who have this idea of I just want to
Β 
0:20:57.750,0:21:01.950
retreat from other human beings and I
Β 
0:21:00.420,0:21:04.080
want to be left alone it want to be
Β 
0:21:01.950,0:21:06.900
taxed I don't to be told what to do very
Β 
0:21:04.080,0:21:08.550
strong libertarian perspective sometimes
Β 
0:21:06.900,0:21:10.440
those people are the same people there's
Β 
0:21:08.550,0:21:12.000
two kinds of libertarians there's well
Β 
0:21:10.440,0:21:14.100
there's many ways that's what Albertans
Β 
0:21:12.000,0:21:15.750
is the two kinds but like there's the
Β 
0:21:14.100,0:21:17.640
leave me alone type and then there's the
Β 
0:21:15.750,0:21:21.720
kind of conquer the world type right the
Β 
0:21:17.640,0:21:24.330
kind that kind of relishes seeing fiat
Β 
0:21:21.720,0:21:28.620
currencies be destroyed and replaced by
Β 
0:21:24.330,0:21:32.070
Bitcoin and it's kind of you know
Β 
0:21:28.620,0:21:35.790
creating a thousand a year kind of reign
Β 
0:21:32.070,0:21:40.020
of sound money that in I mean I
Β 
0:21:35.790,0:21:42.000
generally have this kind of instincts
Β 
0:21:40.020,0:21:43.890
that like when someone says that like we
Β 
0:21:42.000,0:21:45.630
should impose a lot of short-term
Β 
0:21:43.890,0:21:47.160
disruption and harm on the entire world
Β 
0:21:45.630,0:21:48.240
for the sake of some nebulous a long
Β 
0:21:47.160,0:21:51.000
term gain that's something to be
Β 
0:21:48.240,0:21:53.400
skeptical of but so I'm not gonna rely
Β 
0:21:51.000,0:21:55.530
on the word skeptical mmm-hmm you're
Β 
0:21:53.400,0:21:59.010
using an extreme form of understatement
Β 
0:21:55.530,0:22:02.730
yeah yeah and so I mean I'm definitely
Β 
0:21:59.010,0:22:04.910
not in in the camp that had of actively
Β 
0:22:02.730,0:22:09.060
relishes like fiat currency is being
Β 
0:22:04.910,0:22:11.250
destroyed but meanders and I definitely
Β 
0:22:09.060,0:22:13.530
don't think that all bitcoiners do it
Β 
0:22:11.250,0:22:17.010
like there is some that do see it as
Β 
0:22:13.530,0:22:18.840
and of a something that's supposed to
Β 
0:22:17.010,0:22:21.180
coexist and something that's supposed to
Β 
0:22:18.840,0:22:22.680
provide a check and balance against the
Β 
0:22:21.180,0:22:25.770
government's monopoly on issuing money
Β 
0:22:22.680,0:22:27.240
without replacing it entirely so you
Β 
0:22:25.770,0:22:28.680
know there are there's definitely enough
Β 
0:22:27.240,0:22:31.200
different visions within individual
Β 
0:22:28.680,0:22:34.230
communities there's different visions
Β 
0:22:31.200,0:22:36.570
between different communities you know
Β 
0:22:34.230,0:22:38.610
in it there's it's not just visions
Β 
0:22:36.570,0:22:40.080
about what cryptocurrencies should do to
Β 
0:22:38.610,0:22:42.600
the world it's also in your visions
Β 
0:22:40.080,0:22:44.220
about like what how cryptocurrencies
Β 
0:22:42.600,0:22:47.370
should work internally and what they
Β 
0:22:44.220,0:22:50.060
should do to each other so like that in
Β 
0:22:47.370,0:22:52.830
that sense I guess like a
Β 
0:22:50.060,0:22:54.780
cryptocurrencies are interesting in in
Β 
0:22:52.830,0:22:56.250
ball chains not just because of like
Β 
0:22:54.780,0:22:58.830
what they can do in the world but also
Β 
0:22:56.250,0:23:01.470
just as this and if microcosm of the
Β 
0:22:58.830,0:23:03.630
world all into themselves I mean like we
Β 
0:23:01.470,0:23:06.060
talked about country virtual countries
Β 
0:23:03.630,0:23:07.440
but you know there there's many virtual
Β 
0:23:06.060,0:23:09.240
countries now there's over fourteen
Β 
0:23:07.440,0:23:12.930
hundred on coin market cap and they have
Β 
0:23:09.240,0:23:16.050
some analog of you do think of them as
Β 
0:23:12.930,0:23:18.950
virtual countries it's singing all
Β 
0:23:16.050,0:23:21.210
models are bullshit but some are useful
Β 
0:23:18.950,0:23:28.110
but to the extent of the country is a
Β 
0:23:21.210,0:23:32.240
sensible thing to yes yeah yeah yeah so
Β 
0:23:28.110,0:23:38.700
in that world where we're dealing with
Β 
0:23:32.240,0:23:41.490
often very radical individualism and a
Β 
0:23:38.700,0:23:44.880
very strong sense that there is
Β 
0:23:41.490,0:23:48.060
something wrong with the coercive aspect
Β 
0:23:44.880,0:23:51.350
of a government do you worry that
Β 
0:23:48.060,0:23:57.290
something that you have given birth to
Β 
0:23:51.350,0:24:02.240
may start to behave in very different
Β 
0:23:57.290,0:24:06.270
ways than you would ever want definitely
Β 
0:24:02.240,0:24:07.860
probably the closest that we've seen to
Β 
0:24:06.270,0:24:10.410
things like this happening already would
Β 
0:24:07.860,0:24:14.460
be the the initial coin offering a boom
Β 
0:24:10.410,0:24:16.950
in the 2017 and 2018 and like basically
Β 
0:24:14.460,0:24:19.020
if what happens and there was that
Β 
0:24:16.950,0:24:21.870
people saw that cryptocurrencies are
Β 
0:24:19.020,0:24:23.580
something that could potentially had a
Β 
0:24:21.870,0:24:27.450
very high value and so people started
Β 
0:24:23.580,0:24:29.460
saying oh like I'm raising money
Β 
0:24:27.450,0:24:31.200
anyone come and give me fifty million
Β 
0:24:29.460,0:24:32.669
dollars and I'm gonna build a
Β 
0:24:31.200,0:24:34.200
cryptocurrency and I'm gonna make it
Β 
0:24:32.669,0:24:36.600
great and I'll turn your 50 million
Β 
0:24:34.200,0:24:43.440
dollars into 50 billion going guaranteed
Β 
0:24:36.600,0:24:45.149
and this like and like it's complicated
Β 
0:24:43.440,0:24:47.370
right because I mean on the one hand
Β 
0:24:45.149,0:24:48.929
like the possibility of a kind of
Β 
0:24:47.370,0:24:52.679
raising money and using it to fund
Β 
0:24:48.929,0:24:54.899
cryptocurrency development like it's it
Β 
0:24:52.679,0:24:56.610
did a lot of good right began like in
Β 
0:24:54.899,0:24:59.760
general like the open source community
Β 
0:24:56.610,0:25:01.889
it's and it kind of acutely suffers from
Β 
0:24:59.760,0:25:03.659
this have public goods challenge that we
Β 
0:25:01.889,0:25:06.600
talked about because an open source
Β 
0:25:03.659,0:25:09.299
software is a very public good and like
Β 
0:25:06.600,0:25:10.860
we saw some very public and if splats
Β 
0:25:09.299,0:25:13.529
involving open source software being
Β 
0:25:10.860,0:25:15.029
under maintains like the CloudFlare and
Β 
0:25:13.529,0:25:17.610
of issues a couple years back when it
Β 
0:25:15.029,0:25:19.320
turned out that's an open ssl library it
Β 
0:25:17.610,0:25:20.909
was like really really under maintained
Β 
0:25:19.320,0:25:23.130
despite billions of dollars of value
Β 
0:25:20.909,0:25:24.899
depending on it and with
Β 
0:25:23.130,0:25:26.100
cryptocurrencies suddenly you could make
Β 
0:25:24.899,0:25:28.799
things that are completely open-source
Β 
0:25:26.100,0:25:31.970
that through coins do have a funding
Β 
0:25:28.799,0:25:34.919
mechanism and like you know this has
Β 
0:25:31.970,0:25:36.179
massive massively accelerated the
Β 
0:25:34.919,0:25:38.250
development of many kinds of
Β 
0:25:36.179,0:25:40.740
cryptography zero-knowledge proofs and
Β 
0:25:38.250,0:25:42.750
peer-to-peer networking a lot of other
Β 
0:25:40.740,0:25:45.539
things but at this on the other hand
Β 
0:25:42.750,0:25:49.200
like it's also given rise to this kind
Β 
0:25:45.539,0:25:50.340
of speculation and in many cases the
Β 
0:25:49.200,0:25:53.490
projects turned out to be outright
Β 
0:25:50.340,0:25:55.470
fraudulent right but it's a really
Β 
0:25:53.490,0:25:57.419
delicious and weird situation I haven't
Β 
0:25:55.470,0:26:00.779
asked you about it yet but you're I
Β 
0:25:57.419,0:26:03.590
presume that your net worth crashed a
Β 
0:26:00.779,0:26:05.820
great deal we got run up and then came
Β 
0:26:03.590,0:26:10.039
came back yeah
Β 
0:26:05.820,0:26:17.429
and were you happy in any way about that
Β 
0:26:10.039,0:26:19.289
relieved relieved yeah so when the right
Β 
0:26:17.429,0:26:24.299
at the top of the big bubble like in
Β 
0:26:19.289,0:26:27.539
December 2017 when yeah good coin was
Β 
0:26:24.299,0:26:30.299
hitting 20,000 eath was hitting 1,400 I
Β 
0:26:27.539,0:26:32.880
mean I made this tweet and a series of
Β 
0:26:30.299,0:26:34.080
tweets and that and it became somewhat
Β 
0:26:32.880,0:26:36.419
famous one in the space where I
Β 
0:26:34.080,0:26:38.309
basically said the cryptocurrency space
Β 
0:26:36.419,0:26:41.040
has reached half a trillion dollars does
Β 
0:26:38.309,0:26:43.200
does it deserve it like do the thing
Β 
0:26:41.040,0:26:46.080
that it's actually accomplished like
Β 
0:26:43.200,0:26:49.020
hold a candle to the promises that my
Β 
0:26:46.080,0:26:51.450
market is ascribing to it and I mean the
Β 
0:26:49.020,0:26:54.630
subtext of my answer is not yet and that
Β 
0:26:51.450,0:26:58.620
was proven very right yeah I fairly
Β 
0:26:54.630,0:27:04.640
quickly and but you didn't short it did
Β 
0:26:58.620,0:27:07.410
you so the iana I did can you get and
Β 
0:27:04.640,0:27:09.780
get the etherium foundation to sell
Β 
0:27:07.410,0:27:11.520
about seventy thousand eath like
Β 
0:27:09.780,0:27:14.400
basically at the top and that's doubled
Β 
0:27:11.520,0:27:16.860
our runway now so there was one good
Β 
0:27:14.400,0:27:19.380
decision that had a land that had a lot
Β 
0:27:16.860,0:27:25.200
of impact but it did not short I should
Β 
0:27:19.380,0:27:29.540
say that I was weirdly somewhat relieved
Β 
0:27:25.200,0:27:34.260
as well I view that the innovation of
Β 
0:27:29.540,0:27:37.290
decentralized transactions and the bid
Β 
0:27:34.260,0:27:39.570
and you know it's hard for me to say
Β 
0:27:37.290,0:27:41.490
because I actually I'm convinced that
Β 
0:27:39.570,0:27:43.230
the blockchain should be an intermediate
Β 
0:27:41.490,0:27:46.500
state and should not be the permanent
Β 
0:27:43.230,0:27:50.190
version of decentralized computing angry
Β 
0:27:46.500,0:27:52.760
okay but I thought that that was such an
Β 
0:27:50.190,0:27:57.900
amazing innovation that you could have a
Β 
0:27:52.760,0:28:00.390
locally enforced mechanism without a
Β 
0:27:57.900,0:28:03.060
centralized Authority but with a global
Β 
0:28:00.390,0:28:08.610
ledger unfair which which I see if it is
Β 
0:28:03.060,0:28:10.710
a point of intellectual failure that in
Β 
0:28:08.610,0:28:12.990
some sense you're mirroring the
Β 
0:28:10.710,0:28:17.370
transactions of the physical world so
Β 
0:28:12.990,0:28:20.880
for example for those listening at home
Β 
0:28:17.370,0:28:23.430
who don't have a visual here Vitalik has
Β 
0:28:20.880,0:28:25.650
several glass bottles next to him were
Β 
0:28:23.430,0:28:29.760
he to give one to me which he shouldn't
Β 
0:28:25.650,0:28:31.980
do right now but the idea would be that
Β 
0:28:29.760,0:28:35.220
it would no longer be in his space and
Β 
0:28:31.980,0:28:40.640
it would be in mine and that property of
Β 
0:28:35.220,0:28:43.410
Adams has been somewhat mirrored in
Β 
0:28:40.640,0:28:46.770
Bitcoin and blockchain and aetherium
Β 
0:28:43.410,0:28:49.200
transactions I mean this is like the
Β 
0:28:46.770,0:28:51.600
concept of like money as a thing right
Β 
0:28:49.200,0:28:53.910
the and if the scarcity of the 21
Β 
0:28:51.600,0:28:54.870
million limit if I give you five coins I
Β 
0:28:53.910,0:28:57.240
have five of us and you
Β 
0:28:54.870,0:28:58.710
five more right and so the idea is that
Β 
0:28:57.240,0:29:02.370
it's a what you're doing is you're
Β 
0:28:58.710,0:29:04.680
porting conservation laws into from the
Β 
0:29:02.370,0:29:09.450
physical layer into the logical layer
Β 
0:29:04.680,0:29:11.790
right and yeah and I guess and if to
Β 
0:29:09.450,0:29:13.710
some extent kind of reflects the kind of
Β 
0:29:11.790,0:29:16.920
very deeply enough Austrian economic
Β 
0:29:13.710,0:29:19.700
libertarian and origins of the the space
Β 
0:29:16.920,0:29:24.510
way better back in the end of 2009 to
Β 
0:29:19.700,0:29:27.690
2013 days I mean creating like digital
Β 
0:29:24.510,0:29:29.250
gold was pretty much the Fukien Digital
Β 
0:29:27.690,0:29:32.580
payment system was the first use case
Β 
0:29:29.250,0:29:34.559
but and I definitely think that like we
Β 
0:29:32.580,0:29:36.120
can and should be thinking about point
Β 
0:29:34.559,0:29:38.460
systems that work in ways other than
Β 
0:29:36.120,0:29:41.030
money well I agree with that and I also
Β 
0:29:38.460,0:29:44.040
think that it isn't digital gold because
Β 
0:29:41.030,0:29:46.620
as the saying goes you know gold or
Β 
0:29:44.040,0:29:49.260
money has no stench and that the
Β 
0:29:46.620,0:29:51.480
blockchain is this bizarre difference
Β 
0:29:49.260,0:29:55.230
with the physical world and that it is a
Β 
0:29:51.480,0:29:58.320
distributed ledger that may be somewhat
Β 
0:29:55.230,0:30:01.260
anonymous but it still gives the history
Β 
0:29:58.320,0:30:05.750
like if I hand you a dollar and and you
Β 
0:30:01.260,0:30:09.090
don't have access to any particular
Β 
0:30:05.750,0:30:11.160
means of analyzing whose DNA is on that
Β 
0:30:09.090,0:30:14.790
dollar you have no idea where it's been
Β 
0:30:11.160,0:30:17.040
and these that is not that is violated
Β 
0:30:14.790,0:30:20.070
by the current block chain type
Β 
0:30:17.040,0:30:22.350
implementations yes so it isn't a
Β 
0:30:20.070,0:30:25.770
complete port of the physical world into
Β 
0:30:22.350,0:30:27.690
a digital but it is a an astounding one
Β 
0:30:25.770,0:30:30.240
and I guess I get very frustrated with
Β 
0:30:27.690,0:30:32.220
the economics questions like well what's
Β 
0:30:30.240,0:30:34.340
good what's it good for where's the
Β 
0:30:32.220,0:30:37.350
killer app I mean we have all of
Β 
0:30:34.340,0:30:40.740
whatever's left of human civilization to
Β 
0:30:37.350,0:30:42.929
figure out what this thing is meant to
Β 
0:30:40.740,0:30:44.490
do you know and I'm not very worried
Β 
0:30:42.929,0:30:46.530
that we were not going to figure it out
Β 
0:30:44.490,0:30:48.360
I mean we're going to figure it out
Β 
0:30:46.530,0:30:49.860
sooner or later because a conservation
Β 
0:30:48.360,0:30:53.429
law and digital space is just too
Β 
0:30:49.860,0:30:56.100
valuable is that wrong are you worried
Β 
0:30:53.429,0:30:58.170
at all about the search for like I I
Β 
0:30:56.100,0:30:59.640
just hate this question you know where's
Β 
0:30:58.170,0:31:02.760
that where's the killer app and I'm
Β 
0:30:59.640,0:31:05.400
thinking chill out man this is an
Β 
0:31:02.760,0:31:08.130
astounding intellectual achievement what
Β 
0:31:05.400,0:31:11.700
is that wrong yeah and I say
Β 
0:31:08.130,0:31:14.669
there's definitely a and a long time to
Β 
0:31:11.700,0:31:16.530
go and they think you know the apps will
Β 
0:31:14.669,0:31:18.500
come you know there's the ones that are
Β 
0:31:16.530,0:31:21.630
coming right now are basically a kind of
Β 
0:31:18.500,0:31:24.900
financial but I think I mean that's kind
Β 
0:31:21.630,0:31:26.760
of true just in part because the finance
Β 
0:31:24.900,0:31:28.950
the existing financial system is just
Β 
0:31:26.760,0:31:31.830
like so ready and waiting there to be
Β 
0:31:28.950,0:31:34.860
disrupted event in like in the long term
Β 
0:31:31.830,0:31:42.030
like there's there's it's disrupted and
Β 
0:31:34.860,0:31:43.470
polite term for destroyed you choose but
Β 
0:31:42.030,0:31:46.470
I mean there's something interesting
Β 
0:31:43.470,0:31:53.210
here you're 25 years old every bit of
Β 
0:31:46.470,0:31:58.289
your adult life is post 2008 mm-hmm and
Β 
0:31:53.210,0:32:01.559
to be 25 years old and in charge of a
Β 
0:31:58.289,0:32:03.270
financial ecosystem to the extent that
Β 
0:32:01.559,0:32:05.400
anyone is in charge of etherium and I
Β 
0:32:03.270,0:32:07.350
don't want to claim that you are sitting
Β 
0:32:05.400,0:32:11.820
there running and making all these
Β 
0:32:07.350,0:32:14.850
decisions that's an astounding thing
Β 
0:32:11.820,0:32:19.429
that that this has fallen to somebody
Β 
0:32:14.850,0:32:23.250
who whose adult life has post the crash
Β 
0:32:19.429,0:32:25.230
hmm do you think about that at all that
Β 
0:32:23.250,0:32:28.020
you don't have the same associations the
Β 
0:32:25.230,0:32:30.690
rest of us do with markets when they
Β 
0:32:28.020,0:32:32.340
were claimed to be working well like
Β 
0:32:30.690,0:32:34.380
during the during the era of the Great
Β 
0:32:32.340,0:32:39.840
Moderation supposedly when volatility
Β 
0:32:34.380,0:32:42.210
was banished yeah 17:12 right so one
Β 
0:32:39.840,0:32:44.010
thing that I kind of when we realized
Β 
0:32:42.210,0:32:46.289
the recently that I found interesting is
Β 
0:32:44.010,0:32:48.030
that there like there aren't kind of two
Β 
0:32:46.289,0:32:51.470
tribes here there's to be tribes right
Β 
0:32:48.030,0:32:56.340
and what I mean by this is that there's
Β 
0:32:51.470,0:32:59.039
the tribe that says markets are great
Β 
0:32:56.340,0:33:01.169
and there's the tribe that says markets
Β 
0:32:59.039,0:33:02.280
are bad and like we should move to more
Β 
0:33:01.169,0:33:05.429
things don't look like political
Β 
0:33:02.280,0:33:08.100
mechanisms but then if you look at kind
Β 
0:33:05.429,0:33:10.190
of the zeitgeist that's kind of fairly
Β 
0:33:08.100,0:33:12.210
popular in the cryptocurrencies space
Β 
0:33:10.190,0:33:16.070
definitely even still now to a big
Β 
0:33:12.210,0:33:19.559
extent it's that markets are great but
Β 
0:33:16.070,0:33:22.020
the thing that existed and exists like
Β 
0:33:19.559,0:33:26.010
isn't markets and
Β 
0:33:22.020,0:33:28.260
so yes like there's people who are pro
Β 
0:33:26.010,0:33:29.910
market and who see ahead of the existing
Β 
0:33:28.260,0:33:31.560
financial system as being that and
Β 
0:33:29.910,0:33:33.420
there's people who are pro market at
Β 
0:33:31.560,0:33:35.640
receive the existing financial system as
Β 
0:33:33.420,0:33:36.930
being like yet another one of the
Β 
0:33:35.640,0:33:39.660
perversions of that that needs to be
Β 
0:33:36.930,0:33:43.260
overcome well it's odd because I would
Β 
0:33:39.660,0:33:47.010
love to fix our democracy I'd love to
Β 
0:33:43.260,0:33:49.410
fix our markets but I am I have to say I
Β 
0:33:47.010,0:33:54.150
believe that I have grown up in a an
Β 
0:33:49.410,0:33:56.100
approximately 50 year bubble which the
Β 
0:33:54.150,0:34:00.770
Silent Generation and then the boomers
Β 
0:33:56.100,0:34:03.900
presided over and my own read is that
Β 
0:34:00.770,0:34:06.780
because of their inability to figure out
Β 
0:34:03.900,0:34:09.300
sufficient innovation to take over from
Β 
0:34:06.780,0:34:12.840
the previously innovative system that
Β 
0:34:09.300,0:34:15.360
the world of human expertise has been
Β 
0:34:12.840,0:34:17.790
almost completely contaminated by
Β 
0:34:15.360,0:34:21.270
special pleading and political economy
Β 
0:34:17.790,0:34:23.780
so that many of us who don't have a
Β 
0:34:21.270,0:34:28.620
particularly Austrian or libertarian
Β 
0:34:23.780,0:34:32.159
bent are just sick to death of being
Β 
0:34:28.620,0:34:34.010
lied to by people claim to be Nobel
Β 
0:34:32.159,0:34:37.679
laureates in economics yep
Β 
0:34:34.010,0:34:39.840
do you have any emotional connection to
Β 
0:34:37.679,0:34:42.860
you hmm
Β 
0:34:39.840,0:34:45.960
like I feel like I'm lied to about
Β 
0:34:42.860,0:34:47.370
almost almost you know the doctors are
Β 
0:34:45.960,0:34:48.390
lying the lawyers are lying the
Β 
0:34:47.370,0:34:52.010
accountants are lying
Β 
0:34:48.390,0:34:55.230
the extraction companies are lying and
Β 
0:34:52.010,0:34:57.510
it's not because of a million different
Β 
0:34:55.230,0:34:59.700
reasons it's because growth ran out and
Β 
0:34:57.510,0:35:03.000
our whole society is predicated on a
Β 
0:34:59.700,0:35:06.030
need for economic growth yeah no there's
Β 
0:35:03.000,0:35:07.710
definitely and of things that are that
Β 
0:35:06.030,0:35:10.320
have changed in us and assess them
Β 
0:35:07.710,0:35:11.490
that's just not keeping up and doesn't
Β 
0:35:10.320,0:35:16.130
and doesn't understand that there is
Β 
0:35:11.490,0:35:17.700
such a thing as keeping up and it's like
Β 
0:35:16.130,0:35:22.740
hmm
Β 
0:35:17.700,0:35:24.240
so like one thing that even Gwen talks
Β 
0:35:22.740,0:35:27.630
about this right what he talks about
Β 
0:35:24.240,0:35:31.400
kind of the mortgage markets has social
Β 
0:35:27.630,0:35:35.230
technology mentality versus the like
Β 
0:35:31.400,0:35:39.550
basically end of history mentality and I
Β 
0:35:35.230,0:35:42.730
like the way that I can and I definitely
Β 
0:35:39.550,0:35:44.680
saw this kind of zeitgeist 10 years ago
Β 
0:35:42.730,0:35:46.300
that said kind of even more broadly than
Β 
0:35:44.680,0:35:49.900
like markets versus other mechanisms
Β 
0:35:46.300,0:35:51.700
that's like things are 80% efficient and
Β 
0:35:49.900,0:35:52.240
lots of work to make them 95 percent
Β 
0:35:51.700,0:35:57.190
efficient
Β 
0:35:52.240,0:35:58.869
whereas the the thing that's really
Β 
0:35:57.190,0:35:59.980
going on is that things are 3 percent
Β 
0:35:58.869,0:36:02.080
efficient and we should work hard on
Β 
0:35:59.980,0:36:05.170
making them six percent efficient like
Β 
0:36:02.080,0:36:07.720
if you kind of move away from the narrow
Β 
0:36:05.170,0:36:08.859
context of like I'm I have something to
Β 
0:36:07.720,0:36:10.540
sell when you have something to buy
Β 
0:36:08.859,0:36:14.260
which is pretty well optimized already
Β 
0:36:10.540,0:36:15.820
then there's lots of these and very big
Β 
0:36:14.260,0:36:18.970
things that are happening that have just
Β 
0:36:15.820,0:36:23.320
completely been missed and in technology
Β 
0:36:18.970,0:36:25.180
and if Network effects and all and just
Β 
0:36:23.320,0:36:26.800
generally kind of migrating from atoms
Β 
0:36:25.180,0:36:31.180
to bits are definitely all a big part of
Β 
0:36:26.800,0:36:32.830
it so let's talk about something's a
Β 
0:36:31.180,0:36:35.800
little bit funny which is if you start
Β 
0:36:32.830,0:36:37.330
to replace government as we were talking
Β 
0:36:35.800,0:36:40.119
about it and you see it as a monopoly on
Β 
0:36:37.330,0:36:43.930
violence you notice that very often
Β 
0:36:40.119,0:36:46.480
there there's a very funny role played
Β 
0:36:43.930,0:36:48.340
by organized crime of course when we
Β 
0:36:46.480,0:36:50.770
think about organized crime we tend to
Β 
0:36:48.340,0:36:52.900
get emotionally excited by it for
Β 
0:36:50.770,0:36:56.080
whatever reason we make lots of movies
Β 
0:36:52.900,0:36:58.590
about it it occupies the mind is
Β 
0:36:56.080,0:37:01.480
something terrifying and alluring and
Β 
0:36:58.590,0:37:05.800
there's sort of two weird aspects to
Β 
0:37:01.480,0:37:09.550
organized crime one of which is violence
Β 
0:37:05.800,0:37:11.950
as a contract enforcement mechanism in
Β 
0:37:09.550,0:37:14.890
other words you're you're gambling so
Β 
0:37:11.950,0:37:16.420
you don't have access to the regular
Β 
0:37:14.890,0:37:20.290
court system now you have a gambling
Β 
0:37:16.420,0:37:26.320
debt and so just the way our government
Β 
0:37:20.290,0:37:28.330
would put you in jail if you you know
Β 
0:37:26.320,0:37:30.130
started doing things you couldn't
Β 
0:37:28.330,0:37:31.570
fulfill all of your obligations and you
Β 
0:37:30.130,0:37:34.990
were doing harm to lots of people and
Β 
0:37:31.570,0:37:37.540
you couldn't be stopped organized crime
Β 
0:37:34.990,0:37:40.270
has to do somebody can't maintain jails
Β 
0:37:37.540,0:37:42.700
you know so it can put the hurt on
Β 
0:37:40.270,0:37:45.220
somebody for means of contract
Β 
0:37:42.700,0:37:46.930
enforcement so it's it's not looking to
Β 
0:37:45.220,0:37:48.260
do violent things it's looking to run
Β 
0:37:46.930,0:37:49.910
illegal businesses
Β 
0:37:48.260,0:37:52.100
for which there's demand yeah and then
Β 
0:37:49.910,0:37:53.560
it has a problem of enforcement then
Β 
0:37:52.100,0:37:57.370
there's another part of it which is
Β 
0:37:53.560,0:37:59.930
violence as the product so for example
Β 
0:37:57.370,0:38:01.850
extortion be shame if anything were to
Β 
0:37:59.930,0:38:04.820
happen to this lovely business that
Β 
0:38:01.850,0:38:06.920
you're running is a veiled threat pay us
Β 
0:38:04.820,0:38:09.980
or we're gonna do harm to your business
Β 
0:38:06.920,0:38:12.340
or you know contract killings and the
Β 
0:38:09.980,0:38:15.110
like yeah are you worried that
Β 
0:38:12.340,0:38:18.140
effectively by introducing parallel
Β 
0:38:15.110,0:38:22.010
structures both in the form of currency
Β 
0:38:18.140,0:38:24.320
and in the form of contracts smart
Β 
0:38:22.010,0:38:27.590
contracts that are the cynic wanna and I
Β 
0:38:24.320,0:38:30.590
guess of the difference between Bitcoin
Β 
0:38:27.590,0:38:33.410
and aetherium right that the killer app
Β 
0:38:30.590,0:38:35.090
that is most likely to happen while the
Β 
0:38:33.410,0:38:37.880
technology is still clunky and
Β 
0:38:35.090,0:38:42.920
cumbersome and difficult is in the
Β 
0:38:37.880,0:38:46.340
parallel space that either you are going
Β 
0:38:42.920,0:38:49.430
to replace organized crime as a place to
Β 
0:38:46.340,0:38:52.130
do contractual business outside of the
Β 
0:38:49.430,0:38:54.890
normal scope which could be a benefit
Β 
0:38:52.130,0:38:56.870
because organized crime still exists and
Β 
0:38:54.890,0:38:58.880
is a bad thing because it uses violence
Β 
0:38:56.870,0:39:01.850
and you would use math and in place of
Β 
0:38:58.880,0:39:07.360
it or that it could actually be used to
Β 
0:39:01.850,0:39:09.530
facilitate violence by you know using
Β 
0:39:07.360,0:39:12.290
let's say prediction markets or
Β 
0:39:09.530,0:39:16.970
something else to induce people to
Β 
0:39:12.290,0:39:20.120
commit crimes where the committer the
Β 
0:39:16.970,0:39:21.800
committer of violence has unusual
Β 
0:39:20.120,0:39:23.120
information about where the violence
Β 
0:39:21.800,0:39:27.830
will be committed and therefore can
Β 
0:39:23.120,0:39:30.290
profit from it it's definitely a worry
Β 
0:39:27.830,0:39:31.670
that have I in make lots of people in
Β 
0:39:30.290,0:39:33.920
the crypt of space have had since the
Β 
0:39:31.670,0:39:36.530
beginning though I do feel like at least
Β 
0:39:33.920,0:39:38.090
so far I've been surprised like it feels
Β 
0:39:36.530,0:39:41.960
like a less avetis happens than we had
Β 
0:39:38.090,0:39:44.330
expected the thing now what do you what
Β 
0:39:41.960,0:39:47.750
accounts for the idea that something
Β 
0:39:44.330,0:39:51.250
that can be dreamt has mostly not
Β 
0:39:47.750,0:39:53.810
occurred yes I definitely have yeah
Β 
0:39:51.250,0:39:54.860
maybe it's a great thing about humans
Β 
0:39:53.810,0:39:56.330
that we didn't realize that we're not
Β 
0:39:54.860,0:39:57.800
nearly the horrible people we thought
Β 
0:39:56.330,0:39:59.750
and I definitely have a couple of
Β 
0:39:57.800,0:40:01.640
theories about this so one of those
Β 
0:39:59.750,0:40:07.519
theories is
Β 
0:40:01.640,0:40:10.849
like basically a lot of things that
Β 
0:40:07.519,0:40:12.769
people do and especially a lot of things
Β 
0:40:10.849,0:40:14.390
that people do in the InfoSphere because
Β 
0:40:12.769,0:40:15.710
like public goods are gonna have
Β 
0:40:14.390,0:40:18.730
chronically underfunded and all that
Β 
0:40:15.710,0:40:22.180
rely really heavily on goodwill and so
Β 
0:40:18.730,0:40:25.160
you know you have goodwill that if
Β 
0:40:22.180,0:40:27.289
someone if you pay someone to write some
Β 
0:40:25.160,0:40:29.809
piece piece of software for your website
Β 
0:40:27.289,0:40:31.880
it's not gonna include some bloggers go
Β 
0:40:29.809,0:40:33.829
yeah some bug that'll steal people's
Β 
0:40:31.880,0:40:37.730
money or tell the FBI where you are that
Β 
0:40:33.829,0:40:39.079
you if you create a system for the
Β 
0:40:37.730,0:40:42.470
enforcing agreements that they'll
Β 
0:40:39.079,0:40:45.710
actually get enforced then even like on
Β 
0:40:42.470,0:40:47.989
internet forums they depend on kind of a
Β 
0:40:45.710,0:40:51.259
lot of volunteer labor for just things
Β 
0:40:47.989,0:40:54.980
like moderation and if you create a
Β 
0:40:51.259,0:40:56.809
group that just goes like fundamentally
Β 
0:40:54.980,0:40:58.460
against like the vast majority of
Β 
0:40:56.809,0:41:00.440
people's values then it's just gonna be
Β 
0:40:58.460,0:41:06.680
hard to find volunteer effort for that
Β 
0:41:00.440,0:41:08.539
sort of thing and like this so that's
Β 
0:41:06.680,0:41:11.180
probably the big in the big reason I
Β 
0:41:08.539,0:41:13.700
think why ik so far we don't really see
Β 
0:41:11.180,0:41:16.309
a kind of you know complicated like
Β 
0:41:13.700,0:41:20.059
decentralized structure is being created
Β 
0:41:16.309,0:41:21.650
to facilitate like black black markets
Β 
0:41:20.059,0:41:22.819
for killing people and so forth because
Β 
0:41:21.650,0:41:26.029
let's start off with something more
Β 
0:41:22.819,0:41:28.130
mundane like a numbers racket right so a
Β 
0:41:26.029,0:41:31.099
numbers racket would probably be a much
Β 
0:41:28.130,0:41:32.960
simpler application so what do you mean
Β 
0:41:31.099,0:41:34.400
by numbers racket here well it's
Β 
0:41:32.960,0:41:36.650
something that takes the place of a
Β 
0:41:34.400,0:41:39.619
lottery where some let's say some
Β 
0:41:36.650,0:41:41.749
naturally occurring number that would be
Β 
0:41:39.619,0:41:44.329
printed in a newspaper and presumably
Β 
0:41:41.749,0:41:47.089
nobody has the influence over what
Β 
0:41:44.329,0:41:49.670
number gets printed right constitutes
Β 
0:41:47.089,0:41:51.920
the lotto draw lotteries have existed on
Β 
0:41:49.670,0:41:55.400
watching since the beginning yeah okay
Β 
0:41:51.920,0:41:57.319
even there's definitely been this kind
Β 
0:41:55.400,0:41:59.569
of sub community of people that created
Β 
0:41:57.319,0:42:01.099
these kind of provably faire Ponzi
Β 
0:41:59.569,0:42:03.019
contracts where and we have a smart
Β 
0:42:01.099,0:42:05.180
contracts and you can throw money in and
Β 
0:42:03.019,0:42:07.339
as soon as if you're the nth person to
Β 
0:42:05.180,0:42:10.069
throw money n su as soon as two n people
Β 
0:42:07.339,0:42:11.779
throw money and you get like 1.92 back
Β 
0:42:10.069,0:42:15.739
or something like that and like this was
Β 
0:42:11.779,0:42:18.200
just a fun game that people have made
Β 
0:42:15.739,0:42:19.910
and like participated in even fully
Β 
0:42:18.200,0:42:23.569
knowing what the economics of the thing
Β 
0:42:19.910,0:42:28.690
are so yeah in thing things like that
Β 
0:42:23.569,0:42:32.089
have definitely happened so I don't like
Β 
0:42:28.690,0:42:34.700
though in gambling is the sort of thing
Β 
0:42:32.089,0:42:36.739
that like there isn't like there isn't
Β 
0:42:34.700,0:42:38.539
this kind of nine ninety nine percent
Β 
0:42:36.739,0:42:41.150
plus consensus that it's really horrible
Β 
0:42:38.539,0:42:42.589
and evil right because like on the one
Β 
0:42:41.150,0:42:44.059
hand like lots of people want to be on
Β 
0:42:42.589,0:42:49.089
it but on the other hand people do it
Β 
0:42:44.059,0:42:51.829
and it's something that I think people
Β 
0:42:49.089,0:42:53.660
see negative consequences of but at the
Β 
0:42:51.829,0:42:55.249
same time it's something it is something
Β 
0:42:53.660,0:42:59.299
that people participate in and enjoy
Β 
0:42:55.249,0:43:01.549
whereas the I mean if extremely bad
Β 
0:42:59.299,0:43:04.160
stuff like that's there's definitely
Β 
0:43:01.549,0:43:06.559
this kind of this kind of barrier
Β 
0:43:04.160,0:43:08.239
between kind of things that are edgy
Β 
0:43:06.559,0:43:11.359
versus things that are just so far over
Β 
0:43:08.239,0:43:15.799
the edge and for things that are and if
Β 
0:43:11.359,0:43:17.869
so so far over the edge like it is yeah
Β 
0:43:15.799,0:43:19.220
even with smart contracts and even with
Β 
0:43:17.869,0:43:21.410
all of those things it's still hard to
Β 
0:43:19.220,0:43:25.160
coordinate those structures and I think
Β 
0:43:21.410,0:43:28.430
like the blockchain like the blockchains
Β 
0:43:25.160,0:43:30.109
inability to directly read facts about
Β 
0:43:28.430,0:43:33.710
the real world could even be a saving
Β 
0:43:30.109,0:43:36.410
grace here because like because a
Β 
0:43:33.710,0:43:38.029
blockchain can't directly read like
Β 
0:43:36.410,0:43:39.710
whether or not something in the real
Β 
0:43:38.029,0:43:41.239
world happens it basically me and said
Β 
0:43:39.710,0:43:42.739
if you want to have some application
Β 
0:43:41.239,0:43:45.140
whether a prediction market or something
Β 
0:43:42.739,0:43:46.489
else that does okay so can we say a
Β 
0:43:45.140,0:43:48.259
little bit more about the probably
Β 
0:43:46.489,0:43:48.799
intellectual problem that you're you're
Β 
0:43:48.259,0:43:50.690
in touching
Β 
0:43:48.799,0:43:52.999
so the idea is that there may be
Β 
0:43:50.690,0:43:58.130
something that's very perceptible to us
Β 
0:43:52.999,0:44:00.019
hmm about the real world but we might
Β 
0:43:58.130,0:44:01.869
naively think well the computer should
Β 
0:44:00.019,0:44:04.400
be able to tell whether that happened
Β 
0:44:01.869,0:44:07.460
right or it didn't happen and that
Β 
0:44:04.400,0:44:11.630
that's a surprisingly difficult thing to
Β 
0:44:07.460,0:44:15.230
code up reliably so that the interface
Β 
0:44:11.630,0:44:19.420
between the world of bits and bytes in
Β 
0:44:15.230,0:44:22.279
the world of otherwise physical reality
Β 
0:44:19.420,0:44:26.150
which often we don't realize we're
Β 
0:44:22.279,0:44:27.250
thinking about subjectively hmm that
Β 
0:44:26.150,0:44:30.430
it's hard to
Β 
0:44:27.250,0:44:32.530
maintain that interface so that the way
Β 
0:44:30.430,0:44:34.360
in which the things that have happened
Β 
0:44:32.530,0:44:36.550
in the real world can be definitely
Β 
0:44:34.360,0:44:38.830
agreed upon without us any kind of
Β 
0:44:36.550,0:44:40.930
adjudication inside of the digital right
Β 
0:44:38.830,0:44:43.270
yeah so I don't know how to say that
Β 
0:44:40.930,0:44:45.730
well block chains are an a fundamentally
Β 
0:44:43.270,0:44:47.890
programmatic medium all they see is data
Β 
0:44:45.730,0:44:50.650
that gets fed into them and what they
Β 
0:44:47.890,0:44:54.370
can compute as a result of that data and
Β 
0:44:50.650,0:44:56.920
so if you wants to create a smart
Β 
0:44:54.370,0:44:59.560
contract that says if someone figures
Β 
0:44:56.920,0:45:01.330
out how to what the prime factors have a
Β 
0:44:59.560,0:45:03.370
big number or pay them a reward you can
Β 
0:45:01.330,0:45:04.510
do that because prime prime factors are
Β 
0:45:03.370,0:45:07.150
something that you can multiply together
Β 
0:45:04.510,0:45:10.000
and verify but if he wants to have a
Β 
0:45:07.150,0:45:13.000
smart contract that says if there's a
Β 
0:45:10.000,0:45:14.980
hurricane and in Srilanka then pay five
Β 
0:45:13.000,0:45:17.080
hundred bucks then like you can't do
Β 
0:45:14.980,0:45:19.390
that on the watch in itself because like
Β 
0:45:17.080,0:45:20.830
computer code has no idea what
Β 
0:45:19.390,0:45:23.590
hurricanes are it has no idea what's
Β 
0:45:20.830,0:45:26.980
real like is nobody but in that case
Β 
0:45:23.590,0:45:29.710
could have a designation that you know
Β 
0:45:26.980,0:45:31.180
that the National correct you can you
Β 
0:45:29.710,0:45:32.830
can get data from third-party sources
Β 
0:45:31.180,0:45:35.410
and this is the thing that B else turns
Β 
0:45:32.830,0:45:36.910
it into data exactly this is the the
Β 
0:45:35.410,0:45:38.560
thing that a lot of applications are
Β 
0:45:36.910,0:45:41.080
doing but the thing that's important to
Β 
0:45:38.560,0:45:43.360
keep in mind is that as soon as you do
Β 
0:45:41.080,0:45:46.210
that a guru or smart contractor has no
Β 
0:45:43.360,0:45:48.070
longer fully trust us right right so
Β 
0:45:46.210,0:45:52.900
there's this concept which is like a
Β 
0:45:48.070,0:45:54.730
utopian concept of a trustless legal
Β 
0:45:52.900,0:45:57.190
system so that you don't have the
Β 
0:45:54.730,0:45:59.320
messiness of humans anywhere in the
Β 
0:45:57.190,0:46:01.810
system and you can have complete faith
Β 
0:45:59.320,0:46:03.430
and confidence in the contract that
Β 
0:46:01.810,0:46:07.060
you've struck yeah right and like
Β 
0:46:03.430,0:46:08.770
outside of prude like basically giving
Β 
0:46:07.060,0:46:10.870
bounties for solving math problems so
Β 
0:46:08.770,0:46:12.840
like it's not something that you can
Β 
0:46:10.870,0:46:17.470
100% achieve so I can't necessarily
Β 
0:46:12.840,0:46:21.190
ensure my vacation that if if I go all
Β 
0:46:17.470,0:46:24.790
the way to Argentina and the weather is
Β 
0:46:21.190,0:46:26.860
terrible it pays out because we can't
Β 
0:46:24.790,0:46:30.040
agree what terrible weather is right
Β 
0:46:26.860,0:46:32.230
like you can create structures bit made
Β 
0:46:30.040,0:46:35.890
out of individual participants they can
Β 
0:46:32.230,0:46:38.410
try to and if align incentives to get
Β 
0:46:35.890,0:46:40.690
people to kind of give to give correct
Β 
0:46:38.410,0:46:41.150
results so and you can have complicated
Β 
0:46:40.690,0:46:42.619
and if
Β 
0:46:41.150,0:46:43.970
interruptions involving people giving
Β 
0:46:42.619,0:46:46.549
different answers and policing each
Β 
0:46:43.970,0:46:47.960
other and rewarding people who give the
Β 
0:46:46.549,0:46:49.750
same answer that other people have
Β 
0:46:47.960,0:46:53.329
committed to and things like this but
Β 
0:46:49.750,0:46:56.660
like you can only try to approach the
Β 
0:46:53.329,0:46:58.670
had like the idea love kind of correct
Β 
0:46:56.660,0:47:02.960
truth like you can never 100% reach it
Β 
0:46:58.670,0:47:06.799
now you started aetherium in 2014-2015
Β 
0:47:02.960,0:47:10.039
um started started end of 2013 I mean it
Β 
0:47:06.799,0:47:12.079
watched in 2015 okay would you say let's
Β 
0:47:10.039,0:47:15.760
use launch data as an artificial sure
Β 
0:47:12.079,0:47:21.079
date would you say you are more or less
Β 
0:47:15.760,0:47:23.240
excited emotionally hmm then you were
Β 
0:47:21.079,0:47:27.579
when it started you've now been through
Β 
0:47:23.240,0:47:27.579
so you've logged some miles here hmm I
Β 
0:47:30.069,0:47:37.640
definitely definitely stay excited I
Β 
0:47:34.150,0:47:40.880
worked I think the main difference is
Β 
0:47:37.640,0:47:43.700
kind of more like definitely a kinda
Β 
0:47:40.880,0:47:46.099
excited in the sense of like four years
Β 
0:47:43.700,0:47:48.680
well definite and like I kind of as
Β 
0:47:46.099,0:47:51.349
opposed to indefinite like four years
Β 
0:47:48.680,0:47:54.140
yeah four years ago was about like hey
Β 
0:47:51.349,0:47:56.210
let's make this platform to kind of try
Β 
0:47:54.140,0:47:57.589
really a bunch of really cool things we
Β 
0:47:56.210,0:48:00.020
have no idea what's gonna happen and
Β 
0:47:57.589,0:48:02.630
let's just stick it out there and now
Β 
0:48:00.020,0:48:04.609
like we know things about things and
Β 
0:48:02.630,0:48:07.910
people are already doing we know things
Β 
0:48:04.609,0:48:09.740
about things that people wants to do on
Β 
0:48:07.910,0:48:12.890
wait hands we'll also know more about
Β 
0:48:09.740,0:48:15.140
Nick what the limitations are and so
Β 
0:48:12.890,0:48:17.390
instead of just being this kind of
Β 
0:48:15.140,0:48:19.849
extremely fuzzy dream of like let's
Β 
0:48:17.390,0:48:22.099
stick smart contracts and algorithms and
Β 
0:48:19.849,0:48:27.609
kind of trust us if I everything right
Β 
0:48:22.099,0:48:31.400
it's something that's kind of both more
Β 
0:48:27.609,0:48:34.160
moderate but also kind of more like
Β 
0:48:31.400,0:48:36.140
seeming much more like it I like it
Β 
0:48:34.160,0:48:37.819
actually has a big chance of kind of
Β 
0:48:36.140,0:48:41.029
transforming the world and of precisely
Β 
0:48:37.819,0:48:44.180
because that's when moderated to some
Β 
0:48:41.029,0:48:46.069
extent so you more if I gave you false
Β 
0:48:44.180,0:48:47.990
three choices and by the way smart
Β 
0:48:46.069,0:48:50.029
people always hate these things so feel
Β 
0:48:47.990,0:48:51.589
free to break the model mmm if I gave
Β 
0:48:50.029,0:48:53.710
you a choice between saying are you
Β 
0:48:51.589,0:48:55.180
mostly excited about
Β 
0:48:53.710,0:48:57.730
the technology and the amount of
Β 
0:48:55.180,0:48:59.410
innovation are you mostly excited about
Β 
0:48:57.730,0:49:02.830
the business opportunities for yourself
Β 
0:48:59.410,0:49:06.119
or are you mostly excited about the way
Β 
0:49:02.830,0:49:08.740
in which this could transform human life
Β 
0:49:06.119,0:49:11.560
would you be that would that be an easy
Β 
0:49:08.740,0:49:14.140
call or would you say I reject that
Β 
0:49:11.560,0:49:19.839
decision tree some mix over the first
Β 
0:49:14.140,0:49:21.550
and the third mm no I just like the
Β 
0:49:19.839,0:49:23.619
framing of business opportunities is
Β 
0:49:21.550,0:49:26.800
definitely kind of never ik like this is
Β 
0:49:23.619,0:49:28.510
weird I mean the despite and I've even I
Β 
0:49:26.800,0:49:30.880
get the sense that you don't love money
Β 
0:49:28.510,0:49:34.869
enough yeah this is true
Β 
0:49:30.880,0:49:36.910
okay hmm I mean it's weird because I for
Β 
0:49:34.869,0:49:38.320
a long time you have a lot of it yeah
Β 
0:49:36.910,0:49:40.540
well I have a lot of it and it's also
Β 
0:49:38.320,0:49:43.630
even weirder because I like for a long
Β 
0:49:40.540,0:49:45.700
time I subscribed so this kind of branch
Β 
0:49:43.630,0:49:47.530
of economics that basically says that
Β 
0:49:45.700,0:49:49.750
like love of money is like the best
Β 
0:49:47.530,0:49:55.839
motivation for B vote for people to have
Β 
0:49:49.750,0:49:58.660
an Randian um well in I'd say make in
Β 
0:49:55.839,0:50:00.760
that area but it's but I don't get that
Β 
0:49:58.660,0:50:03.849
I'll be honest I just don't get that
Β 
0:50:00.760,0:50:05.740
vibe right I mean there's I've
Β 
0:50:03.849,0:50:08.800
definitely kind of shifted a lot over
Β 
0:50:05.740,0:50:10.869
the years I think my experience even
Β 
0:50:08.800,0:50:13.300
within the crypto space itself has kind
Β 
0:50:10.869,0:50:17.560
of trend and given me a lot of new
Β 
0:50:13.300,0:50:21.339
information to work with more like the
Β 
0:50:17.560,0:50:24.000
this basically and then this goes back
Β 
0:50:21.339,0:50:26.680
to this kind of cryptocurrencies as a
Β 
0:50:24.000,0:50:33.940
microcosm of wider society thing right
Β 
0:50:26.680,0:50:37.030
like if you're like basically any like
Β 
0:50:33.940,0:50:38.859
any movements regardless of like what it
Β 
0:50:37.030,0:50:40.330
what the movement is for what its goals
Β 
0:50:38.859,0:50:42.339
are to be succeeded needs to be
Β 
0:50:40.330,0:50:43.900
sufficiently big and once something is
Β 
0:50:42.339,0:50:45.880
sufficiently big it needs to have
Β 
0:50:43.900,0:50:47.410
internal structure to a coordinated
Β 
0:50:45.880,0:50:49.960
initially of its objectives which means
Β 
0:50:47.410,0:50:52.270
that it suffers from governance issues
Β 
0:50:49.960,0:50:55.869
it suffers from public goods the issue
Β 
0:50:52.270,0:50:58.750
is it suffers from conflicts with
Β 
0:50:55.869,0:51:01.780
adjacent movements and suffers from
Β 
0:50:58.750,0:51:04.720
conflicts between its own values and its
Β 
0:51:01.780,0:51:06.940
and its own desire to succeed and so on
Β 
0:51:04.720,0:51:10.270
and so forth and like it needs to
Β 
0:51:06.940,0:51:12.849
come up with ways to answer like
Β 
0:51:10.270,0:51:14.109
basically almost the same kinds of hard
Β 
0:51:12.849,0:51:16.960
problems at the world as a whole is
Β 
0:51:14.109,0:51:19.119
working on well you know it's
Β 
0:51:16.960,0:51:22.839
interesting when I look at this sort of
Β 
0:51:19.119,0:51:24.700
world of people maybe had an epicenter
Β 
0:51:22.839,0:51:27.849
in the Bay Area though I think it's less
Β 
0:51:24.700,0:51:29.440
true now we're trying to figure out what
Β 
0:51:27.849,0:51:34.650
is the future and how do we get there
Β 
0:51:29.440,0:51:37.380
there's a very clear sense that people's
Β 
0:51:34.650,0:51:40.920
creativity and their intelligence is
Β 
0:51:37.380,0:51:44.170
correlated with their financial success
Β 
0:51:40.920,0:51:46.240
but it's not very tight and so there's
Β 
0:51:44.170,0:51:48.970
like an embarrassment that well that
Β 
0:51:46.240,0:51:50.920
person is super amazing and then mm-hmm
Β 
0:51:48.970,0:51:53.770
not doing all that well this person
Β 
0:51:50.920,0:51:56.410
somehow metabolizing amend this amount
Β 
0:51:53.770,0:51:58.359
this is something that I've definitely
Β 
0:51:56.410,0:52:01.150
have realized just from one of my
Β 
0:51:58.359,0:52:03.250
travels like I've interacted with a lot
Β 
0:52:01.150,0:52:04.750
of kind of super famous people in
Β 
0:52:03.250,0:52:07.059
different kinds of positions which
Β 
0:52:04.750,0:52:08.920
includes like some world leaders and
Β 
0:52:07.059,0:52:13.240
includes some kind of leaders of like
Β 
0:52:08.920,0:52:16.390
fields in cryptography and it in you
Β 
0:52:13.240,0:52:19.690
realize that like people in these
Β 
0:52:16.390,0:52:22.210
positions they are impressive but
Β 
0:52:19.690,0:52:24.700
they're not like super amazing godlike
Β 
0:52:22.210,0:52:26.109
impressive right something tomorrow some
Β 
0:52:24.700,0:52:27.849
of them are but then there's also super
Β 
0:52:26.109,0:52:29.559
amazing godlike impressive people that
Β 
0:52:27.849,0:52:31.210
just like don't get her to get that much
Β 
0:52:29.559,0:52:34.210
shit I don't know what I'm trying to get
Β 
0:52:31.210,0:52:37.630
at I think about like if you hang around
Β 
0:52:34.210,0:52:39.279
with musicians very often you'll have
Β 
0:52:37.630,0:52:41.170
some buddies a super famous musicians
Β 
0:52:39.279,0:52:42.069
and you want to who's really good and
Β 
0:52:41.170,0:52:45.730
they'll tell you some of you've never
Β 
0:52:42.069,0:52:50.470
heard of and musician's musician exactly
Β 
0:52:45.730,0:52:53.589
this yes right and so you know if I if I
Β 
0:52:50.470,0:52:56.109
gave the name of people who are famous
Β 
0:52:53.589,0:52:57.970
for being let's say physicists they're
Β 
0:52:56.109,0:52:59.890
very often the people on television as
Β 
0:52:57.970,0:53:02.260
physicists mm-hmm but they would all
Β 
0:52:59.890,0:53:03.460
point to some guy who doesn't give a lot
Β 
0:53:02.260,0:53:05.950
of interviews and say well that's the
Β 
0:53:03.460,0:53:10.890
top guy exactly like basically the
Β 
0:53:05.950,0:53:14.440
social status like is predicted by
Β 
0:53:10.890,0:53:17.529
confidence multiplied by like basically
Β 
0:53:14.440,0:53:19.299
publicity skill and that's half
Β 
0:53:17.529,0:53:20.590
correlated with competence for obvious
Β 
0:53:19.299,0:53:21.730
reasons right like those
Β 
0:53:20.590,0:53:22.930
people also know the people that have
Β 
0:53:21.730,0:53:23.920
the real confidence and that's one of
Β 
0:53:22.930,0:53:25.990
the things that I've always found really
Β 
0:53:23.920,0:53:28.900
interesting about people who have this
Β 
0:53:25.990,0:53:32.860
diehard belief that markets produce
Β 
0:53:28.900,0:53:36.250
justice which is I do think that success
Β 
0:53:32.860,0:53:41.950
in markets is somewhat correlated or has
Β 
0:53:36.250,0:53:44.050
been with things like productivity but
Β 
0:53:41.950,0:53:46.270
it's also correlated sometimes with how
Β 
0:53:44.050,0:53:48.340
predatory somebody can be or you know
Β 
0:53:46.270,0:53:51.460
how lucky they happen to be at a
Β 
0:53:48.340,0:53:55.600
particular moment and one of the
Β 
0:53:51.460,0:53:57.130
questions that I have is if you're
Β 
0:53:55.600,0:53:59.170
really interested in innovation which is
Β 
0:53:57.130,0:54:03.250
what I sort of pick up is you know the
Β 
0:53:59.170,0:54:06.910
main things how does something like
Β 
0:54:03.250,0:54:10.660
aetherium give us a possibility to
Β 
0:54:06.910,0:54:12.760
revitalize innovation after what many of
Β 
0:54:10.660,0:54:15.900
us consider a period of relative
Β 
0:54:12.760,0:54:17.740
stagnancy outside of the areas of
Β 
0:54:15.900,0:54:21.310
computation communication which
Β 
0:54:17.740,0:54:24.820
everybody knows have exploded hmm do you
Β 
0:54:21.310,0:54:30.660
think about how if cerium can mediate a
Β 
0:54:24.820,0:54:30.660
new Renaissance a new generative age
Β 
0:54:31.260,0:54:37.990
about it a little bit definitely and I
Β 
0:54:34.060,0:54:42.970
think I mean there's ten of etherium as
Β 
0:54:37.990,0:54:44.650
a platform for experiments in governance
Β 
0:54:42.970,0:54:47.740
and public goods funding is one thing I
Β 
0:54:44.650,0:54:50.350
mentioned and education is another thing
Β 
0:54:47.740,0:54:52.360
that I end of talk about in the end
Β 
0:54:50.350,0:54:54.400
obviously we do I mean I have a lot of
Β 
0:54:52.360,0:54:58.960
these blog posts on Vitalik dossier in
Β 
0:54:54.400,0:55:00.970
other forums and like they're one of the
Β 
0:54:58.960,0:55:04.510
big challenges that a for example is
Β 
0:55:00.970,0:55:06.430
that like for in and of Internet
Β 
0:55:04.510,0:55:08.170
educational resources in general there's
Β 
0:55:06.430,0:55:10.900
basically two kinds right there's like
Β 
0:55:08.170,0:55:13.270
papers and I Wikipedia and like
Β 
0:55:10.900,0:55:14.950
basically things that are technically
Β 
0:55:13.270,0:55:17.590
accurate but they're just not core ibly
Β 
0:55:14.950,0:55:19.510
not understand understandable at all and
Β 
0:55:17.590,0:55:21.490
we should not be forcing people to even
Β 
0:55:19.510,0:55:23.650
try reading them and then there's pops a
Β 
0:55:21.490,0:55:26.080
literature which is very accessible but
Β 
0:55:23.650,0:55:30.280
it's often just actively wrong in really
Β 
0:55:26.080,0:55:31.720
horrible ways and okay I personally even
Β 
0:55:30.280,0:55:33.370
before a theorem like I did Bitcoin
Β 
0:55:31.720,0:55:34.420
magazine for example like I've always
Β 
0:55:33.370,0:55:37.779
tried
Β 
0:55:34.420,0:55:41.410
to find this kind of middle gap this way
Β 
0:55:37.779,0:55:43.839
to explain can take concepts that are
Β 
0:55:41.410,0:55:45.700
technical and if expand them to a bride
Β 
0:55:43.839,0:55:48.519
a broader audience so they are more
Β 
0:55:45.700,0:55:51.569
accessible and like this to me has been
Β 
0:55:48.519,0:55:53.589
important in part because like I view
Β 
0:55:51.569,0:55:55.990
accessibility of information about the
Β 
0:55:53.589,0:55:58.210
technology as a precondition for even
Β 
0:55:55.990,0:55:59.950
the decentralization of the space like
Β 
0:55:58.210,0:56:01.720
if the thing technically runs on fifty
Β 
0:55:59.950,0:56:03.039
thousand computers but only forty two
Β 
0:56:01.720,0:56:04.660
people know how it works and your
Β 
0:56:03.039,0:56:07.960
decentralization indexes and fifty
Β 
0:56:04.660,0:56:10.450
thousand it's 42 you know and so there's
Β 
0:56:07.960,0:56:15.549
a very nice point yeah and so trying to
Β 
0:56:10.450,0:56:17.140
kind of improve like even how we in the
Β 
0:56:15.549,0:56:20.019
etherium community and if work on
Β 
0:56:17.140,0:56:23.470
innovation internally but so those are
Β 
0:56:20.019,0:56:27.700
kind of things that and if that happened
Β 
0:56:23.470,0:56:29.529
in blockchains as a novella as a lab for
Β 
0:56:27.700,0:56:31.680
trying out new things kind of first for
Β 
0:56:29.529,0:56:33.549
the blockchain space and then
Β 
0:56:31.680,0:56:35.890
potentially export it to other things
Β 
0:56:33.549,0:56:38.559
and then we can also look at head of
Β 
0:56:35.890,0:56:41.799
wall chains as something that can be
Β 
0:56:38.559,0:56:45.490
used to improve and create better
Β 
0:56:41.799,0:56:48.069
institutions so like one of the etherium
Β 
0:56:45.490,0:56:50.589
foundations researchers vlad sam fear he
Β 
0:56:48.069,0:56:51.940
actually got into aetherium because he
Β 
0:56:50.589,0:56:55.720
was working at how to improve academic
Β 
0:56:51.940,0:56:57.130
publishing and like he saw things like
Β 
0:56:55.720,0:56:59.890
you know the existing peer review
Β 
0:56:57.130,0:57:01.839
mechanisms and how they were just a very
Β 
0:56:59.890,0:57:05.259
flawed in a bunch of ways and he thought
Β 
0:57:01.839,0:57:07.450
that like hey here's potentially apply
Β 
0:57:05.259,0:57:09.309
form that we could use to build
Β 
0:57:07.450,0:57:12.369
something that does better and like
Β 
0:57:09.309,0:57:15.039
that's one of his core interests and why
Β 
0:57:12.369,0:57:17.410
he is even continuing to work on the
Β 
0:57:15.039,0:57:20.170
technology you know i hadn't understood
Β 
0:57:17.410,0:57:22.750
how insiders viewed peer review in an
Β 
0:57:20.170,0:57:25.569
academic context until he finance
Β 
0:57:22.750,0:57:28.329
professor got drunk at a party and said
Β 
0:57:25.569,0:57:31.029
you know that guy who's harassing you
Β 
0:57:28.329,0:57:32.710
and your research in finance you don't
Β 
0:57:31.029,0:57:34.660
know why he's doing i said well why do
Β 
0:57:32.710,0:57:37.119
you think he's doing so i know he says
Β 
0:57:34.660,0:57:40.210
we've created a system where our fees
Β 
0:57:37.119,0:57:44.380
are sky-high to consult and we do this
Β 
0:57:40.210,0:57:46.539
by making the number of professors in
Β 
0:57:44.380,0:57:47.400
our field small by controlling peer
Β 
0:57:46.539,0:57:49.079
review
Β 
0:57:47.400,0:57:50.670
and so that effectively we are at
Β 
0:57:49.079,0:57:54.359
conspiracy in restraint like this guy's
Β 
0:57:50.670,0:57:56.130
just telling me straight out that this
Β 
0:57:54.359,0:57:58.500
is a gating function to keep their
Β 
0:57:56.130,0:58:00.569
consulting fees high and that this guy
Β 
0:57:58.500,0:58:02.609
is gonna do everything that they tell
Β 
0:58:00.569,0:58:04.109
him to do because otherwise he can't
Β 
0:58:02.609,0:58:07.200
come into the club and charge these
Β 
0:58:04.109,0:58:09.869
rates that sounds about right
Β 
0:58:07.200,0:58:11.339
right so him that one of the app another
Β 
0:58:09.869,0:58:13.559
killer application so you have one
Β 
0:58:11.339,0:58:15.569
potential suite of applications which
Β 
0:58:13.559,0:58:18.359
have to do with facilitating illegality
Β 
0:58:15.569,0:58:20.910
some of that might regard will result in
Β 
0:58:18.359,0:58:24.180
net reduction of harm because you could
Β 
0:58:20.910,0:58:27.900
replace violence with math yes on the
Β 
0:58:24.180,0:58:31.410
other hand a place where you could have
Β 
0:58:27.900,0:58:36.779
a really positive effect is political
Β 
0:58:31.410,0:58:40.980
economy where by removing the human
Β 
0:58:36.779,0:58:43.289
ability to act badly you effectively
Β 
0:58:40.980,0:58:47.880
create a much fairer more representative
Β 
0:58:43.289,0:58:50.520
world exactly you know what do we do so
Β 
0:58:47.880,0:58:52.260
you have an interest in in the two
Β 
0:58:50.520,0:58:55.440
fields that I find Wikipedia can't
Β 
0:58:52.260,0:58:58.470
explain to any normal human being our
Β 
0:58:55.440,0:59:00.359
theoretical math and physics even
Β 
0:58:58.470,0:59:01.829
biology you can sort of guess what's
Β 
0:59:00.359,0:59:04.950
going on because you have something
Β 
0:59:01.829,0:59:07.260
concrete to the area but even biology
Β 
0:59:04.950,0:59:08.609
like you got a learn math the deeply
Β 
0:59:07.260,0:59:11.010
grok it because otherwise you're just
Β 
0:59:08.609,0:59:14.910
memorizing like names of chemicals well
Β 
0:59:11.010,0:59:19.260
but you could my here I have a PhD in
Β 
0:59:14.910,0:59:22.349
math if I try to read a math paper one
Β 
0:59:19.260,0:59:25.319
or two fields over from my own field
Β 
0:59:22.349,0:59:27.420
right I will do less well with it than
Β 
0:59:25.319,0:59:29.119
if I read a biology paper and even
Β 
0:59:27.420,0:59:32.220
though I've taken no class in biology
Β 
0:59:29.119,0:59:35.880
that sounds right yeah yeah like there's
Β 
0:59:32.220,0:59:38.299
a difference between the level of math
Β 
0:59:35.880,0:59:41.010
that you have to know it's you just
Β 
0:59:38.299,0:59:44.039
because it's important for you as a
Β 
0:59:41.010,0:59:45.720
philosopher and then and like that's
Β 
0:59:44.039,0:59:47.760
about the level of math that I think you
Β 
0:59:45.720,0:59:49.319
need even to be good at biology to be
Β 
0:59:47.760,0:59:52.410
good at economics to be good at a lot of
Β 
0:59:49.319,0:59:54.420
things right it's understanding like
Β 
0:59:52.410,0:59:57.119
principles even things like for example
Β 
0:59:54.420,0:59:59.460
if you have a trade-off between x and y
Β 
0:59:57.119,1:00:01.240
and right now you're optimizing entirely
Β 
0:59:59.460,1:00:03.490
for x and it's a smooth curve
Β 
1:00:01.240,1:00:04.900
then if he wants a little bit of Y then
Β 
1:00:03.490,1:00:06.940
you can get your first bit of Y at
Β 
1:00:04.900,1:00:10.030
almost like zero cost of X right and
Β 
1:00:06.940,1:00:12.460
that's just a prop like it's a property
Β 
1:00:10.030,1:00:13.960
of continuous functions that look from
Β 
1:00:12.460,1:00:16.960
the maximum of the derivative starts at
Β 
1:00:13.960,1:00:19.960
zero you know like if you kind of just
Β 
1:00:16.960,1:00:22.180
deeply kind of mentally grok about like
Β 
1:00:19.960,1:00:23.560
a couple hundred of these facts the way
Β 
1:00:22.180,1:00:25.810
you're deeply kind of mentally grow out
Β 
1:00:23.560,1:00:28.210
like how to walk then like you get a lot
Β 
1:00:25.810,1:00:30.130
but then from there there's also like
Β 
1:00:28.210,1:00:32.860
the frontiers and often I mean the
Β 
1:00:30.130,1:00:34.210
frontiers were most important well so
Β 
1:00:32.860,1:00:36.850
here's a weird thing I don't know how to
Β 
1:00:34.210,1:00:37.750
bring up when I try to understand crypto
Β 
1:00:36.850,1:00:40.680
as a space
Β 
1:00:37.750,1:00:43.600
I'm always confronted by how incredibly
Β 
1:00:40.680,1:00:46.390
Byzantine and impossible it is to
Β 
1:00:43.600,1:00:48.369
understand all of the acronyms all of
Β 
1:00:46.390,1:00:53.440
the sub pieces of history I mean it's an
Β 
1:00:48.369,1:00:56.650
incredibly fragmented experience in
Β 
1:00:53.440,1:01:02.280
which I spend a long period of time just
Β 
1:00:56.650,1:01:05.290
feeling moronic isn't it odd that like
Β 
1:01:02.280,1:01:07.240
etherium itself suffers from this this
Β 
1:01:05.290,1:01:09.420
problem it's hard to know what's going
Β 
1:01:07.240,1:01:12.580
on yeah it's definitely something that
Β 
1:01:09.420,1:01:15.220
we wants to fix so if I mean if you ever
Β 
1:01:12.580,1:01:16.540
have suggestions on like what
Β 
1:01:15.220,1:01:18.010
specifically we could make more
Β 
1:01:16.540,1:01:21.520
understandable I'm always happy to hear
Β 
1:01:18.010,1:01:23.700
those fantastic now one thing that I
Β 
1:01:21.520,1:01:27.190
think is really interesting is this
Β 
1:01:23.700,1:01:30.790
episode that occurred in the etherium
Β 
1:01:27.190,1:01:35.440
space in which you are faced with a very
Β 
1:01:30.790,1:01:40.000
serious question of leadership having to
Β 
1:01:35.440,1:01:42.910
do with an emergency that you could have
Β 
1:01:40.000,1:01:45.100
either allowed to follow the rules that
Β 
1:01:42.910,1:01:48.850
had been previously specified in some
Β 
1:01:45.100,1:01:50.650
sense or could where you could interject
Β 
1:01:48.850,1:01:53.140
a certain amount of human intervention
Β 
1:01:50.650,1:01:57.130
but thereby letting people know that
Β 
1:01:53.140,1:01:59.830
this was to some extent not mediated
Β 
1:01:57.130,1:02:01.270
only by rules and computers can you can
Β 
1:01:59.830,1:02:05.380
you say a little bit about this famous
Β 
1:02:01.270,1:02:07.660
incident and sure so in 2016 there was
Β 
1:02:05.380,1:02:11.050
this smart contract that a group called
Β 
1:02:07.660,1:02:13.050
salokya launched called the dao and do
Β 
1:02:11.050,1:02:15.040
stands for a decentralized autonomous
Β 
1:02:13.050,1:02:17.110
organization and such our my team
Β 
1:02:15.040,1:02:19.840
with about three years before and it
Β 
1:02:17.110,1:02:21.580
basically means that maybe you can have
Β 
1:02:19.840,1:02:24.850
a smart contract to this computer
Β 
1:02:21.580,1:02:27.130
program that controls digital assets and
Β 
1:02:24.850,1:02:30.280
if encode a set of rules for an
Β 
1:02:27.130,1:02:31.930
organization and like you can use this
Β 
1:02:30.280,1:02:33.580
kind of smart contract basically as a
Β 
1:02:31.930,1:02:36.430
replacement for things like companies
Β 
1:02:33.580,1:02:39.970
and so some I could decide to launch a
Β 
1:02:36.430,1:02:42.610
Dao and their Dao was intended to be
Β 
1:02:39.970,1:02:47.080
basically a decentralized VC fund so
Β 
1:02:42.610,1:02:48.910
people could apply the Dao would vote on
Β 
1:02:47.080,1:02:51.610
which projects were worth investing in
Β 
1:02:48.910,1:02:57.130
so leaderless rule-based yeah and
Β 
1:02:51.610,1:02:59.740
virtual exactly know is they hit hit all
Β 
1:02:57.130,1:03:02.320
the cypherpunk nodes that they're in the
Β 
1:02:59.740,1:03:05.710
right place okay and the thing launched
Β 
1:03:02.320,1:03:08.200
and we were all expecting it during its
Β 
1:03:05.710,1:03:10.600
kind of initial fundraising phase which
Β 
1:03:08.200,1:03:12.730
was also like an open public blockchain
Β 
1:03:10.600,1:03:15.430
process and to maybe get five million
Β 
1:03:12.730,1:03:18.130
dollars but then it got five and it got
Β 
1:03:15.430,1:03:19.900
ten and I got twenty I got fifty and a
Β 
1:03:18.130,1:03:23.950
hundred and then the price of youth went
Β 
1:03:19.900,1:03:26.710
up and I got two hundred and then when I
Β 
1:03:23.950,1:03:29.130
was sitting at AF friends was it all
Β 
1:03:26.710,1:03:31.990
alarming that it was so successful
Β 
1:03:29.130,1:03:33.970
after the 50 mark I definitely have
Β 
1:03:31.990,1:03:35.920
switched from excitement's to deep
Β 
1:03:33.970,1:03:38.050
apprehension but you know it's a
Β 
1:03:35.920,1:03:41.530
contract did you let on that that you
Β 
1:03:38.050,1:03:45.490
were feeling that way a bit okay yeah so
Β 
1:03:41.530,1:03:47.650
on a June 17th 2016 and when I was in
Β 
1:03:45.490,1:03:52.930
Shanghai at a a friend's apartment and
Β 
1:03:47.650,1:03:57.670
it was about fifteen thirty something in
Β 
1:03:52.930,1:04:00.160
the afternoon I saw a message in one of
Β 
1:03:57.670,1:04:02.350
the Skype chats that it was that I was
Β 
1:04:00.160,1:04:03.970
in and someone basically was saying hey
Β 
1:04:02.350,1:04:05.350
guys look at the Dow it seems like
Β 
1:04:03.970,1:04:08.770
there's some money coming out of it and
Β 
1:04:05.350,1:04:12.070
so I checked on the public black
Β 
1:04:08.770,1:04:14.350
Explorer on the blockchain and I saw oh
Β 
1:04:12.070,1:04:16.570
look that it seems like about two
Β 
1:04:14.350,1:04:19.420
million dollar has actually already been
Β 
1:04:16.570,1:04:21.670
removed from the Dow and more ethos and
Β 
1:04:19.420,1:04:24.370
of slowly being drained over time and so
Β 
1:04:21.670,1:04:26.880
I pinged the core developers and I asked
Β 
1:04:24.370,1:04:30.060
hey is this normal and
Β 
1:04:26.880,1:04:31.710
at first I was thinking okay the
Β 
1:04:30.060,1:04:33.510
alternative is unthinkable there has to
Β 
1:04:31.710,1:04:36.660
be a reasonable explanation for this
Β 
1:04:33.510,1:04:41.400
and so you were locked into some sort of
Β 
1:04:36.660,1:04:44.400
denial for at the beginning yes and the
Β 
1:04:41.400,1:04:46.710
developers looked at it and over the
Β 
1:04:44.400,1:04:48.540
next half-hour as more and more people
Β 
1:04:46.710,1:04:50.580
came online and started chattering with
Β 
1:04:48.540,1:04:54.350
each other it became clear that the
Β 
1:04:50.580,1:04:57.330
unthinkable has actually happened and I
Β 
1:04:54.350,1:05:01.470
actually burned about 20 of my own if
Β 
1:04:57.330,1:05:03.480
like basically just tossing the ethereum
Β 
1:05:01.470,1:05:05.670
blockchain in itself and just spamming
Β 
1:05:03.480,1:05:07.680
it with transactions to try to and if so
Β 
1:05:05.670,1:05:09.090
low the attacker I've seen is denial of
Β 
1:05:07.680,1:05:10.620
service yeah yeah just spam the
Β 
1:05:09.090,1:05:13.020
blockchain with dren that got all of my
Β 
1:05:10.620,1:05:14.970
listeners will know the terms okay so
Β 
1:05:13.020,1:05:16.260
that the attackers transactions could
Β 
1:05:14.970,1:05:17.850
not get in as quickly because the
Β 
1:05:16.260,1:05:20.100
attackers transact the attacker could
Β 
1:05:17.850,1:05:21.720
only withdraw something like a couple
Β 
1:05:20.100,1:05:24.210
hundred East with every transaction so
Β 
1:05:21.720,1:05:26.970
it was a slow process like in the hopes
Β 
1:05:24.210,1:05:29.130
that the developers would find some way
Β 
1:05:26.970,1:05:30.990
to ply was an intentional inefficiency
Β 
1:05:29.130,1:05:32.820
or was just that it was it was not
Β 
1:05:30.990,1:05:34.500
intentional so in some weird way the
Β 
1:05:32.820,1:05:35.940
inefficiency was a good thing yes it
Β 
1:05:34.500,1:05:37.620
gets even weirder there was an even
Β 
1:05:35.940,1:05:39.560
bigger and efficiency that would that
Β 
1:05:37.620,1:05:43.890
would prove to be an even better thing
Β 
1:05:39.560,1:05:46.290
so but then the developers however did
Β 
1:05:43.890,1:05:48.360
not find a way to plug the hole but the
Β 
1:05:46.290,1:05:50.730
attacker voluntarily stopped after
Β 
1:05:48.360,1:05:53.550
stealing about 4 million eath from the
Β 
1:05:50.730,1:05:55.740
dough but in any case the this is a
Β 
1:05:53.550,1:05:58.680
second in efficiency it voluntarily
Β 
1:05:55.740,1:06:01.200
stopped yeah there was a request made no
Β 
1:05:58.680,1:06:06.900
no as in the attacker just stopped ok
Β 
1:06:01.200,1:06:07.680
and and so here's the second and bigger
Β 
1:06:06.900,1:06:10.710
in efficiency
Β 
1:06:07.680,1:06:13.170
the money that was the attacker took out
Β 
1:06:10.710,1:06:14.600
the four million eighth it did not go
Β 
1:06:13.170,1:06:17.130
into the attacker swallow it immediately
Β 
1:06:14.600,1:06:20.550
instead it went into a child smart
Β 
1:06:17.130,1:06:22.050
contract and only after 35 days could
Β 
1:06:20.550,1:06:24.450
the attacker action we take that money
Β 
1:06:22.050,1:06:27.030
out and this was child smart contract
Β 
1:06:24.450,1:06:30.120
you mean a separate smart contract that
Β 
1:06:27.030,1:06:33.750
was created through a function call of
Β 
1:06:30.120,1:06:36.420
the main Dao smart contract ok so this
Β 
1:06:33.750,1:06:39.470
was also not intended right it was just
Β 
1:06:36.420,1:06:40.890
like a random quirk of this of fate that
Β 
1:06:39.470,1:06:43.080
there was this
Β 
1:06:40.890,1:06:44.940
big bug that was the biggest smart
Β 
1:06:43.080,1:06:47.910
contract theft in history up until that
Β 
1:06:44.940,1:06:50.280
point and it put the money into this
Β 
1:06:47.910,1:06:52.410
convenient box were just a conveniently
Β 
1:06:50.280,1:06:57.180
locked for 35 days where everyone could
Β 
1:06:52.410,1:07:00.540
stare and look at it oh yeah and the
Β 
1:06:57.180,1:07:02.580
soon after this there were calls
Β 
1:07:00.540,1:07:04.560
happening between core developers and
Β 
1:07:02.580,1:07:07.950
the proposal to remedy the situation
Β 
1:07:04.560,1:07:10.320
with a blockchain fork I came into play
Β 
1:07:07.950,1:07:12.840
right so basically what happened here is
Β 
1:07:10.320,1:07:15.120
the it was a blockchain fork an
Β 
1:07:12.840,1:07:19.230
emotional issue for this community yeah
Β 
1:07:15.120,1:07:20.850
so why is it so what I guess first of
Β 
1:07:19.230,1:07:24.150
all what is it exactly so explain what
Β 
1:07:20.850,1:07:25.830
what would happen so in general a
Β 
1:07:24.150,1:07:29.040
blockchain forcus on normal process
Β 
1:07:25.830,1:07:30.930
right you have an upgrade and the
Β 
1:07:29.040,1:07:33.720
developers of the etherium clients
Β 
1:07:30.930,1:07:36.390
implement code that basically says after
Β 
1:07:33.720,1:07:38.790
block number four three seven zero zero
Β 
1:07:36.390,1:07:40.170
zero zero stop processing blocks
Β 
1:07:38.790,1:07:41.640
according to the old rules start
Β 
1:07:40.170,1:07:43.260
processing blocks according to the new
Β 
1:07:41.640,1:07:47.250
rules which have extra features attached
Β 
1:07:43.260,1:07:53.000
and where blocks are just said packages
Β 
1:07:47.250,1:07:56.940
of transactions okay and B's and so ever
Β 
1:07:53.000,1:07:59.100
before this sub I know these code
Β 
1:07:56.940,1:08:01.110
patches are formally proposed there is
Β 
1:07:59.100,1:08:02.730
this month-long period of mini month
Β 
1:08:01.110,1:08:05.070
long period of deliberation we are
Β 
1:08:02.730,1:08:08.130
changes or proposed people discuss them
Β 
1:08:05.070,1:08:09.960
people talk about them and generally
Β 
1:08:08.130,1:08:12.450
it's agreed that these changes are good
Β 
1:08:09.960,1:08:14.160
and so people just go and download the
Β 
1:08:12.450,1:08:16.470
code and because everyone's downloaded
Β 
1:08:14.160,1:08:18.150
the code the blockchain after block four
Β 
1:08:16.470,1:08:19.320
three seven zero zero zero zero follows
Β 
1:08:18.150,1:08:22.290
these difference in better it's a very
Β 
1:08:19.320,1:08:24.300
warm and very human process yeah called
Β 
1:08:22.290,1:08:29.130
logic of a machine exactly
Β 
1:08:24.300,1:08:31.920
and so the dal Fork
Β 
1:08:29.130,1:08:34.350
it was also a fork it was also a code
Β 
1:08:31.920,1:08:38.550
change implemented by the developers of
Β 
1:08:34.350,1:08:41.610
the clients that is it was pushed out
Β 
1:08:38.550,1:08:43.530
through a new version of the different
Β 
1:08:41.610,1:08:45.900
clients that people could download and
Β 
1:08:43.530,1:08:49.320
users went ahead and voluntarily
Β 
1:08:45.900,1:08:51.000
downloaded it and it would basically
Β 
1:08:49.320,1:08:52.680
change the rules of the blockchain
Β 
1:08:51.000,1:08:53.849
except instead of changing them
Β 
1:08:52.680,1:08:55.859
permanently
Β 
1:08:53.849,1:08:58.079
it would only do what a single one time
Β 
1:08:55.859,1:09:01.529
change and the single one time change
Β 
1:08:58.079,1:09:03.509
basically said during block one one nine
Β 
1:09:01.529,1:09:06.599
two zero zero zero zero before
Β 
1:09:03.509,1:09:09.989
processing any transactions take the
Β 
1:09:06.599,1:09:11.790
ether that stuck in the this child
Β 
1:09:09.989,1:09:13.739
contract and move it into another
Β 
1:09:11.790,1:09:17.819
contract that could then basically
Β 
1:09:13.739,1:09:20.339
refund it all to the victims and so this
Β 
1:09:17.819,1:09:22.859
is a very kind of manual intervention
Β 
1:09:20.339,1:09:25.310
right it basically says like we all
Β 
1:09:22.859,1:09:27.420
agree it's a run code that just
Β 
1:09:25.310,1:09:29.159
irregularly takes this money and just
Β 
1:09:27.420,1:09:32.339
reassigns it so that's other thing so
Β 
1:09:29.159,1:09:34.469
the the it's very weird because you know
Β 
1:09:32.339,1:09:37.020
we always think in like a sci-fi movie
Β 
1:09:34.469,1:09:39.810
that some thing that you think is human
Β 
1:09:37.020,1:09:42.329
would rip off its mask and reveal itself
Β 
1:09:39.810,1:09:44.520
to be a computer and this is the reverse
Β 
1:09:42.329,1:09:47.609
exactly pewter face is ripped off
Β 
1:09:44.520,1:09:50.880
revealing humans behind this this
Β 
1:09:47.609,1:09:53.099
technological stack yes and I mean
Β 
1:09:50.880,1:09:56.730
ultimately like people talk about head
Β 
1:09:53.099,1:09:58.889
of blockchain immutability and like this
Β 
1:09:56.730,1:10:00.900
is this idea that basically you're not
Β 
1:09:58.889,1:10:03.119
supposed to do this sort of thing and
Β 
1:10:00.900,1:10:05.909
where does that supposed to come from
Β 
1:10:03.119,1:10:08.010
exactly it so like there is there's
Β 
1:10:05.909,1:10:09.810
definitely a sense in which it exists
Β 
1:10:08.010,1:10:11.190
technologically because like actually
Β 
1:10:09.810,1:10:14.369
pulling off one of these Forks is
Β 
1:10:11.190,1:10:16.139
incredibly hard and for example if it
Β 
1:10:14.369,1:10:18.300
was not the case that the money was
Β 
1:10:16.139,1:10:20.550
conveniently stuck there and one nice
Β 
1:10:18.300,1:10:22.079
little address for 35 days it would
Β 
1:10:20.550,1:10:24.179
basically not have been possible to do
Β 
1:10:22.079,1:10:26.280
it right because when as soon as you
Β 
1:10:24.179,1:10:27.719
announced this protocol change that says
Β 
1:10:26.280,1:10:29.550
we're gonna take money out of CR put it
Β 
1:10:27.719,1:10:30.840
in there the attacker could just move
Β 
1:10:29.550,1:10:33.510
the money from there to a different
Β 
1:10:30.840,1:10:34.770
address and basically you play this
Β 
1:10:33.510,1:10:37.349
cat-and-mouse game and the attacker
Β 
1:10:34.770,1:10:39.989
could win but sometimes there is this
Β 
1:10:37.349,1:10:41.940
possibility where you up so that we can
Β 
1:10:39.989,1:10:44.820
and just like do these interventions and
Β 
1:10:41.940,1:10:46.199
you can just decide to stop writing this
Β 
1:10:44.820,1:10:50.159
code and start running this other code
Β 
1:10:46.199,1:10:52.500
and the only reason why this has not
Β 
1:10:50.159,1:10:54.929
done more frequently is basically
Β 
1:10:52.500,1:10:57.060
because their existing norms right in
Β 
1:10:54.929,1:10:58.770
their existing norms in the blockchain
Β 
1:10:57.060,1:11:00.510
community of lads iam fear of the
Β 
1:10:58.770,1:11:03.150
researcher I mentioned before and if
Β 
1:11:00.510,1:11:05.849
calls them a Szabo's Ally and named
Β 
1:11:03.150,1:11:07.409
after nick szabo and and nick szabo
Β 
1:11:05.849,1:11:08.900
actually just likes the moniker
Β 
1:11:07.409,1:11:10.769
like it is a pretty accurate
Β 
1:11:08.900,1:11:12.900
representation of kind of his beliefs
Β 
1:11:10.769,1:11:15.110
witches and the beliefs of many in the
Β 
1:11:12.900,1:11:18.869
crypto community which is basically that
Β 
1:11:15.110,1:11:21.630
like even though it technically is code
Β 
1:11:18.869,1:11:24.840
run by humans we should act as though it
Β 
1:11:21.630,1:11:27.059
is code not run by humans and look
Β 
1:11:24.840,1:11:29.249
because it is digital gold right gold is
Β 
1:11:27.059,1:11:30.479
not run by humans gold is gold and so if
Β 
1:11:29.249,1:11:32.550
we want to make something that is a
Β 
1:11:30.479,1:11:34.289
light gold then even though we're
Β 
1:11:32.550,1:11:35.939
unfortunately stuck with this thing run
Β 
1:11:34.289,1:11:38.459
by humans we should what try as hard as
Β 
1:11:35.939,1:11:40.260
we can to pretend it's not and like this
Β 
1:11:38.459,1:11:42.719
was the ideology of a lot of people in
Β 
1:11:40.260,1:11:46.260
this space and the dal fork very much
Β 
1:11:42.719,1:11:50.789
went against this ideology and so even
Β 
1:11:46.260,1:11:52.409
though in my opinion like having norms
Β 
1:11:50.789,1:11:54.300
that you can't just like go and edit
Β 
1:11:52.409,1:11:57.150
whatever you want is valuable but like
Β 
1:11:54.300,1:11:58.769
when so such a large fraction of the
Β 
1:11:57.150,1:12:00.869
ecosystem is at stake it's worth
Β 
1:11:58.769,1:12:02.969
rethinking things but like other people
Β 
1:12:00.869,1:12:04.889
were and if even more rigid in this
Β 
1:12:02.969,1:12:06.209
regard and so there was this kind of
Β 
1:12:04.889,1:12:08.939
split in the community
Β 
1:12:06.209,1:12:10.709
and a portion of the community actually
Β 
1:12:08.939,1:12:12.389
did not download the updates right a
Β 
1:12:10.709,1:12:13.949
portion of the community did not
Β 
1:12:12.389,1:12:16.139
download these code patches and
Β 
1:12:13.949,1:12:17.820
implement the fork and they just said we
Β 
1:12:16.139,1:12:20.579
will continue running our own our old
Β 
1:12:17.820,1:12:22.559
chain and the old chain has since then
Β 
1:12:20.579,1:12:26.249
been called a theorem classic and it
Β 
1:12:22.559,1:12:30.650
runs to this day this is a fascinating
Β 
1:12:26.249,1:12:33.209
civil war you know in essence yes and
Β 
1:12:30.650,1:12:34.919
what I get out of this is that there's
Β 
1:12:33.209,1:12:37.949
this very weird thing which is that
Β 
1:12:34.919,1:12:41.039
people get very attached to ideologies
Β 
1:12:37.949,1:12:43.019
and then they come to understand why the
Β 
1:12:41.039,1:12:46.709
simplistic version of that ideology
Β 
1:12:43.019,1:12:49.079
can't possibly work in a warm human
Β 
1:12:46.709,1:12:51.059
system I watched this it you have you
Β 
1:12:49.079,1:12:53.550
ever gone to this festival called a
Β 
1:12:51.059,1:12:55.380
femoral which is sort of Burning Man on
Β 
1:12:53.550,1:12:56.909
the water it was I was part of it and I
Β 
1:12:55.380,1:12:58.709
got invited to it but I haven't had the
Β 
1:12:56.909,1:13:01.559
chance to go yet so it's kind of a
Β 
1:12:58.709,1:13:04.679
libertarian Waterworld in the Sacramento
Β 
1:13:01.559,1:13:08.219
Delta and what was interesting is is
Β 
1:13:04.679,1:13:10.229
that one year in order to come to the
Β 
1:13:08.219,1:13:11.820
festival you had to have a lecture and
Β 
1:13:10.229,1:13:14.189
you had to agree that you would receive
Β 
1:13:11.820,1:13:15.449
the lecture because of problems that had
Β 
1:13:14.189,1:13:17.249
happened the previous year
Β 
1:13:15.449,1:13:21.170
and you realize that these libertarians
Β 
1:13:17.249,1:13:24.260
were being forced to invent governance
Β 
1:13:21.170,1:13:27.469
and rather than just anarchy you had to
Β 
1:13:24.260,1:13:30.320
have some organized system and so one of


1:13:27.469,1:13:34.690
Vitalik ButerinΒ  0:22Β 
my questions is is that is that dream of
Thank you. It's good to be here, Eric.


1:13:30.320,1:13:34.690
Eric WeinsteinΒ  0:24Β 
escape from the heavy hand of government
It's terrific to have you. Now, in general, when I see you interviewed, immediately, everybody goes straight to cryptocurrencies and Imperium. But one of the things that I found fascinating about your story is, is that in order to be a good steward of this new and emerging economics, you've actually applied yourself a great deal to standard and regular economic theory. And I was curious, if I understand correctly, you dropped out of college after a year you're self taught in economics, but you've taken a real interest in understanding How markets and economic theory work. Is that a fair description?


1:13:35.469,1:13:41.870
Vitalik ButerinΒ  1:04Β 
effectively not something to be pursued
Yeah, I think so. And economics has been of interest for me. Definitely for a long time. I mean, when I discovered Bitcoin back in 2011, and I was still in high school, it was this kind of interesting confluence of ideas that I was already pretty attracted to. So of open source culture, that was something that a good friend from high school Christopher Ola had already and indoctrinated me with really well. The, the math mathematical and cryptographic aspects also of libertarianism and Austrian economics was kind of the Zeitgeist of the Bitcoin space at the day and those were of ideas that I definitely found philosophically quite attractive at that time. And I know I was definitely curious and yeah, read a bunch of books. So yeah. And read the Austrian economics canon because that's what the Bitcoin people were talking about all day. Yeah, read some kind of behavioral economics literature, really kinda men and cittadini and all of those people that just because I knew that I had to read other stuff for balance.


1:13:39.040,1:13:43.969
And, and also economics itself is a kind in pretty mathematical and subject Well, kind of right it's it's on the borderline because it's kind of both mathematical and you got your curves and your derivatives and your intersections but also humanities, right, it's really at this intersection of both figuring out how to apply these models to and of specific cases and also trying to figure out well, which models are really correct in the first place. And like the first question you can't answer with math, but the second question, you really can't and you need other kinds of thinking as well.
inside of crypto space for the most part


1:13:41.870,1:13:45.710
Eric WeinsteinΒ  2:58Β 
because we realized that it is going to
Well, this is An area of my own interest because the way I see it, economics is odd in a way that very few people, I think have appreciated in that. If we take what could be argued to be our two greatest ideas in scientific, scientific man, let's say, one would be sort of the geometric dynamics of physics and economics has been constructed to be an as if physics, if you will, and on the other hand, and inherits from the theory of selection, you could say that markets are the continuation of systems of selective pressures by other means. And so what happens when our two greatest ideas touch each other, and they do it in a place which has very bizarre properties, by my way of thinking that is that economists are on the one hand, very rigorous thinkers and are also very susceptible to what we might call political economy, and distorted thinking. Does that ring true to you?


1:13:43.969,1:13:47.890
Vitalik ButerinΒ  3:59Β 
require governance and that we can't
Yeah. Definitely, I mean, there's definitely this combination of the four. On the one hand, you have these mathematical formulas. And on the other hand, these assumptions and often Nick, the assumptions can be pretty, pretty well hidden, and they're kind of difficult to see at first glance, right. And it really can be subtle, right? So like one of the arguments that economists tend to put forward is basically like mutually beneficial transactions are a bet are beneficial. And so like, we should not interfere with them, right? Like if I have a client bottle and I want to sell you the client bottle, you're willing to pay $5 then I clearly valued at less than $5 evaluated more than $5 therefore the transactions on net good and like I, therefore I should give you the bottle and you should give me the money and that's what we would do, but At the, the reasons why that 10 sometimes breaks down like are, in many ways more subtle, right? Like, first you have monopoly issues like, if I'm the only person selling Klein bottles, then I might want to sell them at a higher price than you'd be willing to accept because I want to extract more value. And sometimes the things that matter most to society aren't things that we can transfer between people from one person to another, like Klein bottles, but like public goods, and like the biggest public good of all, is that is the idea, right? And an idea? Well, if I have an idea, and I give you the idea, I still have the idea. So it's something that once you release it, it's out there and there isn't this kind of property of that.


1:13:45.710,1:13:51.920
Eric WeinsteinΒ  5:48Β 
figure out a way to turn this into a
So, should we pause just briefly to talk about what a public good is for the audience?


1:13:47.890,1:13:54.080
Vitalik ButerinΒ  5:53Β 
completely cold and methodical process
Yeah. Β 


1:13:51.920,1:13:56.960
Eric WeinsteinΒ  5:54Β 
it depends on which portion of the dream
So a public good is technically defined within economics. Many people have an intuitive idea. Something which is you're stating has this property of inexhaustible it. Yeah. And then the other attribute would be excludability, which is


1:13:54.080,1:13:58.940
Vitalik ButerinΒ  6:11Β 
you subscribe to like the if the version
non excludability for


1:13:56.960,1:14:02.000
Eric WeinsteinΒ  6:12Β 
of the dream you subscribe to is the
Sorry, not non excludability, sorry, the attribute of excludability and is used to define a public good. So, if something is inexhaustible and excludable, then it has this weird property that even hardline economists would agree that the market may fail to price, in fact, will fail to price the value to society of that object. So there is an admission within economics that there are zones of failure.


1:13:58.940,1:14:05.199
Vitalik ButerinΒ  6:43Β 
dream that says that we can finally use
Right? Well, I guess the kind of the big kind of rethinking that needs to happen is that like there is a long been this kind of site guys to that private goods like things that I have, and if I give it to you, I don't have it. And you have it on than normal and public goods are a rare exception. But like really public goods are pretty darn important, right? Like if we didn't have public goods, then we'd be trading sticks. And B and B are pellets and we basically still be caveman. Like they're basically the


1:14:02.000,1:14:08.840
Eric WeinsteinΒ  7:14
algorithms to I basically completely
Well, like an army would be a public good.


1:14:05.199,1:14:13.190
Vitalik ButerinΒ  7:16Β 
eliminate humans ability to interfere in
Yeah. Yeah. In army well, armies are interesting, because they're kind of to us, like in a medium scale context or a public good and in the large scale, context or public bad, because if everyone's armies were forced to be cut down by a factor of 10, like we'd all be better off. So economics is like really subtle that way, especially once you have kind of two layers of scale at play.


1:14:08.840,1:14:15.920
Eric WeinsteinΒ  7:38Β 
things then like if if your goal is to
Sure. Now, one thing that I worry a lot about that almost nobody seems to join me in, is that in our mutual world, I don't know what to call it. of people who are experimenting with what I would say the mainstream would consider far out ideas like radical life extension, credit. currencies is a, you know, potentially being rival risks with sovereign currencies. But in our world, we talk a lot about the abundance economy in a world of abundance. And I'm terrified of a world of abundance because one of the properties that software has had is that it has replaced physical goods and services, which have these attributes. They're not public with small files, and when a small file is not encrypted, it has the attributes of a public good and therefore value and price can can chasm. That's terrifying, because then this weird thing of markets which allows us respite from dictatorship and somebody's directing our activities, and allows us to self direct goes away, because things can't be priced accurately. Are you Do you have any does that have any purchase on your thinking?


1:14:13.190,1:14:18.739
Vitalik ButerinΒ  9:00Β 
see that enforced 100 percent then like
Yeah, so and I think give definitely kind of struck at a very important points, though, I think and if my own framing of the points is slightly different. So you know, I think like, first of all, you start off by thing by realizing that kind of private property and things is not something that fell out of the sky. It's a social technology, right? It's that we have the of norms that basically say, Oh, you can't, we will create this kind of mapping from objects to people. And if an object does maps to you, then you're allowed to do basically whatever the hell you want with that, and other people cannot do anything with it without your permission. And if that concept did not exist, then physical objects would be public goods, right? Because like, if there's a Klein bottle over here, the Klein bottle would be there, but like, really, anyone could take it. And if you produce political climate models, then you're not producing something for yourself. You're producing Something for pretty much the first person who comes along and grabs it. And so property rights, right are this kind of social technology that helps make private good economies tractable. And we could consider making social technologies to make public good economies tractable, right, like the existence of public goods by itself is it's not good or bad. Like, arguably, it's even good because it means that people can cooperate with each other on such large scales. The bad thing is that we don't really have good tools for handling it. And specifically, we don't have good tools for handling yet that manage to simultaneously avoid both not giving good results and like basically being centralized index editorial. And so this is where my interest in radical exchange comes in. So this was this some movement that was started by going wild a couple of years ago when he wrote this radical markets book and you He advanced some of his proposals like Harberger taxes and quadratic voting were the ones that are one of the most popular. And the and the core of idea behind the ideas basically is like, let's create structures of norms and incentives that try to have the best properties that we can get out of markets, but do do so without like, basically economically breaking in the way that we know existing property rights systems do a once you enter a world where kind of everything that you build is just inherently affects millions of people.


1:14:15.920,1:14:22.760
Eric WeinsteinΒ  11:39Β 
no you're not going to get that if your
Well, this is this is an interesting perspective. You, of course, are famous for implementing this aetherium protocol. But before we ever get to computer protocols, there are sort of legal and structural protocols that we impose upon ourselves in the form of government and markets that are subordinate to government. And there's a weird way in which you may start a process by which you write down rules for how a society should function. But once those rules are written down, you may discover all sorts of unintended properties of that rule set. And there's a real question. Can we actually unhook ourselves from the killer app that is capitalism, or American democracy? And if we start to realize that that app is running out of control,


1:14:18.739,1:14:25.820
Vitalik ButerinΒ  12:37Β 
dream is that you dislike how
I guess, in for I know, for myself as a social technologist, and I definitely don't think that we should be kind of overturning entire countries with the new mechanisms overnight. I think


1:14:22.760,1:14:27.380
Eric WeinsteinΒ  12:51Β 
governments have had existing
I wasn't insinuating.


1:14:25.820,1:14:29.840
Vitalik ButerinΒ  12:52Β 
governments and monopolies of violence
Oh, definitely. I think like, that's figuring out how to kind of solve grand problems. If Humanity is a long term goal. But I mean short term goals are there's, there's little things that we can make better. Right? So I and this is actually part of why I find cryptocurrency and blockchain is interesting because they are, in a lot of ways this ideal ground for economic experimentation of different types. Great. So like to give one concrete example and in. So one of the ideas that go on while and myself have come up with and are pushing forward is something called quadratic funding. And the way that quadratic funding works is roughly this, right? So you have a central hub of pool of funding. And you could imagine this coming from a government you could imagine this coming from wealthy donors, you could imagine it just being put together by some crypto economic protocol, it could come from anywhere. And then you allow people to like basically set up projects and you like people say I have a project here is something that I'm doing. And if you like this, then you can donate to me. And you let people donate to projects. And then the core of the mechanism is basically that if there is a project that multiple people donate to, so there's some project you donate to it and someone else donates to it as well, then your donation doesn't just benefit benefit you, it also benefits the other person and the other person's donation doesn't just benefit them, it also benefits you. And so to kind of counteract that, and of market failure, the mechanism basically says, well, we're going to multiply the effect of your donation by two ads multiply the effect of the other person's donation by two. And so now, both of your incentives are kind of aligned with the whole and you extend this mechanism. So instead of supporting two people, it supports an arbitrary number of people. And you kind of calculate these subsidies across all possible pairs of people. And what you get is this formula that basically says you know what people don't need different projects, you'll look at how many people donated and how much money is donated. And based on this from the central pool of funding, you give this extra subsidy. And so it basically is like a market for public goods. Right? And in the Ethereum ecosystem, there's something called I get coin grants, where we've basically started like trying to use this mechanism to fund public goods inside the aetherium ecosystem, right? So this could be implementations of the Ethereum protocol. It could be scaling solutions. It could be wallets, it could be educational resources. And we've had a sniff test around recently with about and if $200,000 in this central matching pool, and it recently finished, I mean, you can go to gitcoin.co slash grants to see the results and you've got contributions from hundreds of people and the results that gave were actually pretty reasonable. So


1:14:27.380,1:14:32.300
Eric WeinsteinΒ  15:53Β 
have hegemony over this social function
That's fantastic.


1:14:29.840,1:14:34.699
Vitalik ButerinΒ  15:54Β 
of coordination and enforcing structures
Yeah, and so like, I think, Ethereum could have a lot of value, as And just being a test net bed for an decentralized governance and decentralized public good funding infrastructure of this kind?


1:14:32.300,1:14:37.190
Eric WeinsteinΒ  16:09Β 
of rules and you want there to exist an
Well, I think that that's fascinating. I guess one of the ways in which I would understand that is, you know, when my wife, who's an economist, and I talk about this stuff, we often talk about a market democracy has these two voting systems, one is $1, one vote, and the other is one person, one vote theoretically, anyway, even if that's honor only in the breach.


1:14:34.699,1:14:39.880
Vitalik ButerinΒ  16:28Β 
alternative then like that's something
Yeah, and like, liberal democracy does this horrible thing of like treating these as opposite poles where something is either one or the other, and they're, and they're often fighting each other when really everything's a spectrum.


1:14:37.190,1:14:44.750
Eric WeinsteinΒ  16:40Β 
that we can talk about right so I mean
And I like that a lot. I mean, another thing that we've been discussing recently, and this again, is sort of joint with with Pm ilani is thinking about the Chicago approximation, where you've got some reality that's incredibly nonlinear and complicated. And then weirdly in one of these famous This is where the map is not the territory. You take this incredibly simplified world where agents have this properties you can't even believe you would ascribe to a human being where you call it homo economicus, and it's perfectly rational. And it has all of these characteristics, like an automaton that only makes rational decisions. And then you impose that, like through law and economics programs, and suddenly you've distorted your society by taking the map as the territory so seriously, that you don't realize that you're destroying something and distorting. Yeah.


1:14:39.880,1:14:48.800
Vitalik ButerinΒ  17:39
if if the dream is to augments yes and I
No, that's definitely the like, it's a socially it's one approximation and immune, we're never going to have approximations that are perfect, because the world is just so glad to hear that. Yeah. And the world is just so complicated and so even rapidly changing in the 21st century, like approx in all approximations are bullshit, but like you have to find a couple of good ones that work reasonably well and make progress for us.


1:14:44.750,1:14:50.719
Eric WeinsteinΒ  18:07Β 
mean I'd argue that the block chains
And I think that one of the things that's unfairly done to cryptocurrencies is that we expect them to solve all of the problems that already cropped up, yes, in our forms of governance and our forms of currency and exchange in court systems. And that what we should be asking of them is to be improvements or to augment already existing systems. Now, one of the odd things about governance is we could view you, as in some sense, starting a rival virtual country that has a legal system because the Ethereum I don't know what to call it network platform protocol.


1:14:48.800,1:14:53.360
Vitalik ButerinΒ  18:48
have a variant of necessary role now
Yeah, it rolls coins and it has the right to reassign those coins


1:14:50.719,1:14:55.250
Eric WeinsteinΒ  18:51Β 
especially a kind of given modern kind
And, not only that, but it has a stand in for the legal system in the form of what are called smart contracts. Normally a we have this concept in governance, I guess it goes back to Weber that a government is supposed to be a monopoly on violence, which is an odd definition that you recover the concept of government from monopolizing violence, and then you, you sort of unearth and unpack all of the features of government from that one generating function. In some sense a cryptocurrency and smart contracts derive from math rather than violence,


1:14:53.360,1:14:58.130
Vitalik ButerinΒ  19:32Β 
of political trends work there basically
derived from math and social consensus, right?


1:14:55.250,1:15:00.500
Eric WeinsteinΒ  19:36Β 
is no single traditional political body
Well, I love the fact that I was gonna get to that but


1:14:58.130,1:15:01.850
Vitalik ButerinΒ  19:39Β 
that's accepted as trustworthy by the
I know because this is important, right? Because like, for example, you know, you have the Bitcoin blockchain. And then you have the Litecoin blockchain, which operates under almost exactly the set of the same set of rules as the Bitcoin blockchain. And yet, the Bitcoin blockchain has 100 million dollar market cap and the Litecoin blockchain has a $3 billion market cap or something like that and much less usage. So, like blockchains are definitely not just math and technology, methods technology are the substrate and maybe in the same way that the military is like the substrate of keeping a country together, but


1:15:00.500,1:15:04.310
Eric WeinsteinΒ  20:14Β 
entire world and it doesn't look like
they're including police force


1:15:01.850,1:15:07.670
Vitalik ButerinΒ  20:15
there's going to be one but if your
exactly, but like they're the substrate but they're not the country, right the country is the community.


1:15:04.310,1:15:10.160
Eric WeinsteinΒ  20:21Β 
dream is to and if completely over
Well, and this goes to what I would love to get into you with love to get into with you, which is the way in which different utopian dreams collide in the space of cryptocurrencies. So, for example, there are some dreams that may sound more like what I assume you may be active in the effective altruism community, is that a possibility? Yeah. Which tries to figure out how to do the most good to do good efficiently rather than sanctimoniously. There are other people who have this idea of I just want to retreat from other human beings. And I want to be left alone I don't want to be taxed I want to be told what to do very strong libertarian perspective sometimes those people are the same people there's two


1:15:07.670,1:15:11.870
Vitalik ButerinΒ  21:08Β 
overturn things and have some simplistic
kinds of libertarians there's well there's many ways to switch over to the two kinds but one like there's the Leave me alone type and then there's the kind of conquer the world type right the kind that kind of relishes exceeding fiat currency is be destroyed and replaced by Bitcoin and it's kind of you know, creating 1000 year kind of reign of sound money that soon I mean, I generally I have this kind of instincts that like when someone says that, like we should impose a lot of short term disruption and harm on the entire world for the sake of some nebulous long term gain. That's something to be skeptical of. But so I'm


1:15:10.160,1:15:13.870
Eric WeinsteinΒ  21:50Β 
notion of digital property rights as the
Underline the word skeptical. You're using an extreme form of understatement


1:15:11.870,1:15:17.630
Vitalik ButerinΒ  21:55Β 
only thing that governs behavior then
Yeah, yeah, and I guess so I'm I'm definitely not in In the camp that had to actively relishes like fiat currency is being destroyed. But mean there's and I definitely don't think that all bitcoiners do like there's some that do see it as an of something that's supposed to coexist and something that's supposed to provide a check and balance against the government's monopoly on issuing money without replacing it entirely. So, you know, there are there's definitely enough different visions within individual communities, there's different visions between different communities. And there's, it's not just decisions about what cryptocurrency should do to the world, it's also visions about like, what how cryptocurrencies should work internally and what they should do to each other. So like, not in that sense, I guess, like, cryptocurrencies are interesting and in blockchains, not just because of like what they can do to the world but also just as this kind of microcosm of the world all unto themselves. selves. I mean, like we talked about countries, virtual countries, but you know, there, there's many virtual countries now there's over 1400 on coin market cap and they have some analog of God, if


1:15:13.870,1:15:19.820
Eric WeinsteinΒ  23:11Β 
that's something that like you can try
You do think of them as virtual countries?


1:15:17.630,1:15:21.170
Vitalik ButerinΒ  23:14Β 
for but you're not going to succeed let
it's all models are bullshit, but some are useful.


1:15:19.820,1:15:23.510
Eric WeinsteinΒ  23:19
me try something else with you that I'm
Well to the extent that a country is a sensible thing to label, yeah,


1:15:21.170,1:15:26.179
Vitalik ButerinΒ  23:23Β 
curious about you and I are both plugged
yeah. Β 


1:15:23.510,1:15:29.030
Eric WeinsteinΒ  23:28Β 
in to this weird alternate world that
So, in that world where we're dealing with often very radical individualism, and a very strong sense that there is something wrong with the coercive aspect of a government. Do you worry that something that you have given birth to, may start to behave in very different ways than you would ever want


1:15:26.179,1:15:29.919
Vitalik ButerinΒ  24:00Β 
thinks very differently and I had Andrew
Definitely, I mean, probably the closest that we've seen to things like this happening already would be the the initial coin offering boom in 2017 and 2018. And like basically, what happened there was that people saw that cryptocurrency is are something that could potentially hit a very high value. And so people started saying, oh, like, I'm raising money like anyone come in, give me $50 million. And I'm going to build a cryptocurrency and I'm going to make it great and I'll turn your $50 million dollars into 50 billion, guaranteed and this like, and it's complicated, right? Because I mean, on the one hand, like the possibility of kind of raising money and using it to fund cryptocurrency development like it's, it did a lot of good, right? Like in general, like the open source community it's in, it kind of acutely suffers from This hash public goods challenge that we talked about because then open source software is a very public good. And we saw some very public kind of splats involving open source software being under maintains like the CloudFlare and have issues a couple years back when it turned out that's an open SSL library was like really, really under maintain despite billions of dollars of value depending on it. And with cryptocurrency, suddenly you can make things that are completely open source that through coins do have a funding mechanism. And like, you know, this has massive like massively accelerated the development of many kinds of cryptography is zero knowledge proofs and peer to peer networking, a lot of other things. But at this, on the other hand, like it's also given rise to this kind of speculation, and in many cases, the projects turn out to be outright fraudulent, right?


1:15:29.030,1:15:31.510
Eric WeinsteinΒ  25:51Β 
yang
But there's a really delicious and weird situation. I haven't asked you about it yet, but you're I presume that your net worth is crashed a great deal. We got run up and then came. Came back. Did you know and were you happy in any way about that?


1:15:29.919,1:15:35.050
Vitalik ButerinΒ  26:10Β 
in that chair and you saw that episode
relieved?


1:15:31.510,1:15:38.010
Eric WeinsteinΒ  26:11Β 
of the the point before some people call
relieved?


1:15:35.050,1:15:41.409
Vitalik ButerinΒ  26:12Β 
this neuro divergence that this is a non
Yeah. So when the right at the top of the big bubble like in December 2017 when Bitcoin was hitting 20,000 eath was hitting 1400 I made this tweets and a series of tweets. And that sort of became somewhat famous on the space where I basically said, the cryptocurrency space has reached half a trillion dollars does does it deserve it? Like do the things that it's actually accomplished? Like hold a candle to the promises that the market is ascribing to it? And I mean, the subtext of my answer is not yet and that was proven very right. fairly quickly. In


1:15:38.010,1:15:46.380
Eric WeinsteinΒ  26:57Β 
neurotypical world and I would say that
could you didn't short it, did you?


1:15:41.409,1:15:50.590
Vitalik ButerinΒ  26:58Β 
both you and I exhibit some indicia of
so The AI Ziad can get and get the Ethereum foundation to sell about 70,000 eath. Like basically at the top, and that's doubled our runway now. So this was one good decision that had a lot that had a lot of impacts, but did not short,


1:15:46.380,1:15:52.300
Eric WeinsteinΒ  27:19Β 
not thinking along standard lines the
I should say that I was weirdly somewhat relieved as well, I view that the innovation of decentralized transactions and the bit you know, it's hard for me to say because I actually am convinced that the blockchain should be an intermediate state and should not be the permanent version of decentralized computing agri, okay. But I thought that that was such an amazing innovation that you could have a locally enforced mechanism without a centralized authority, but with big Global ledger unfinished, which which I see of it as a point of intellectual failure, that, in some sense, you're mirroring the transactions of the physical world. So for example, for those listening at home who don't have a visual here, metallic, has several glass bottles next to him, where he to give one to me which he shouldn't do right now. But the idea would be that it would no longer be in his space, and it would be in mind. And that property of atoms has been somewhat mirrored in Bitcoin and blockchain and aetherium transactions.


1:15:50.590,1:15:55.599
Vitalik ButerinΒ  28:45Β 
thing that occurred to me is that you
This is like the concept of like money as a thing, right? The scarcity of the 21 million limit. If I give you five coins, I have five less than you have five more,


1:15:52.300,1:15:59.110
Eric WeinsteinΒ  28:55Β 
brought up slight star codex which is
right. And so the idea is that it's what you're doing is you're putting conservation laws into from the physical layer into the logical layer.


1:15:55.599,1:16:02.679
Vitalik ButerinΒ  29:05Β 
this website that is extremely
Right? And yeah, and I this and if to some extent kind of reflects the kind of very deep way of Austrian economic libertarian origins of the the space way back back in the end of 2009 to 2013 days. And creating like digital gold was pretty much the AMA digital payment system was the first use case. But I definitely think that like we can and should be thinking about point systems that work in ways other than money.


1:15:59.110,1:16:03.699
Eric WeinsteinΒ  29:36Β 
influential in our shared world and I
Well, I agree with that. And I also think that it isn't digital gold because as the saying goes, you know, gold or money has no stench, and that the blockchain is this bizarre difference with the physical world in that it is a distributed ledger that may be somewhat anonymous but still gives the history like if I had Do $1 and you don't have access to any particular means of analyzing whose DNA is on that dollar, you have no idea where it's been. And these that is not that is violated by the current blockchain type implementations. Yes. So it isn't a complete port of the physical world of digital, but it is a an astounding one. And I guess I get very frustrated with the economics questions like, well, what's good? What's it good for? Where's the killer app? I mean, we have all of whatever's left of human civilization to figure out what this thing is meant to do. Yeah. And I'm not very worried that we're not going to figure it out. I mean, we're going to figure it out sooner or later, because of conservation law and digital space is just too valuable. They're wrong. You worried at all about the search for? Like, I just hate this question. You know, where's that where's the killer app, and I'm thinking Chill out, man is this is an astounding intellectual achievement. Is that wrong?


1:16:02.679,1:16:06.579
Vitalik ButerinΒ  31:07Β 
was thinking about the difference
Yeah. And I think there's definitely Yeah. And a long time ago, and I think in the apps will come, you know, there's the ones that are coming right now or basically you're gonna have financial but I think, I mean, that's kind of true just in part because the finance, the existing financial system is just like so ready and waiting to be disrupted that in the long term like there's, there's a disruptive and polite term for destroy.


1:16:03.699,1:16:08.550
Eric WeinsteinΒ  31:38Β 
between slate star codex and CNN in
You choose? Well, but I mean, there's something interesting here, you're 25 years old. Hmm. Every bit of your adult life is post 2008 Mm hmm. And to be 25 years old and in charge of a financial ecosystem to the extent that anyone is in charge of a theory, and I don't want to claim that you are sitting there, running it making all these decisions. That's an astounding thing that that this has fallen to somebody who, whose adult life is post the crash. Hmm. Do you think about that at all that you don't have the same associations the rest of us do with markets when they were claimed to be working well, like during the during the era of the great moderation, supposedly when volatility was banished? Yeah, so Team 12.


1:16:06.579,1:16:12.280
Vitalik ButerinΒ  32:38Β 
terms of sense making
Right. So one thing that I kind of only realized recently that I found interesting is that they're like, there aren't kind of two tribes here. There's three tribes. Right. And what I mean by this is that there's the tribe that says markets are are great. And there's the tribe that says markets are bad. And like we shouldn't move to more things that look like political mechanisms. But then if you look at kind of the the Zeitgeist that's kind of fairly popular in the cryptocurrency space, I mean, definitely even still now to a big extent, it's that markets are great. But the thing that existed and exists like isn't markets. And so I guess like there's people who are pro market and who see kind of the existing financial system as being that, and there's people who are pro market and receive the existing financial system as being like yet another one of the perversions of that that needs to be overcome.


1:16:08.550,1:16:16.869
Eric WeinsteinΒ  33:38Β 
is there any way in which the etherium
Well, it's odd because I would love to fix our democracy. I'd love to fix our markets. But I'm, I have to say I believe that I have grown up in a approximately 50 year bubble which the silent generation and then the boomers presided over and my own read That because of their inability to figure out sufficient innovation to take over from the previously innovative system, that the world of human expertise has been almost completely contaminated by special pleading and political economy, so that many of us who don't have a particularly Austrian or libertarian bent are just sick to death of being lied to by people claimed to be Nobel laureates in economics. Yeah. Do you? Is it Yeah. 70 emotional connection to you. Hmm. I feel like I'm lied to about almost almost, you know, the doctors are lying. The lawyers are lying. The accountants are lying. The extraction companies are lying. And it's not because of a million different reasons. It's because growth ran out and our whole society is predicated on it. Need for economic growth?


1:16:12.280,1:16:20.649
Vitalik ButerinΒ  35:02Β 
world can create a counterweight so that
Yeah, no, there's definitely a lot of things that are that have changed in us and a system that's just not keeping up and doesn't and doesn't understand that there is such a thing as keeping up.


1:16:16.869,1:16:22.630
It's like
the neurodivergent can rest the


1:16:20.649,1:16:25.840
so, like one, like,
stranglehold that seemingly the


1:16:22.630,1:16:28.899
even Glenn talks about this, right, like he talks about kind of the mark markets has social technology mentality versus the, like, basically, End of History mentality, and I guess, like, the way that they can, and I definitely saw this kind of, is, I guess, 10 years ago that said, kind of even more broadly than like markets versus other mechanisms that's like, things are 80% efficient, and let's work to make them 95% efficient. Whereas the, the thing that's really going on is that things are 3% efficient, and we should work hard. Making them 6% efficient. Like if you kind of move away from the narrow context of like I'm, I have something to sell when you have something to buy, which is pretty well optimized already, then there's lots of these kind of very big things that are happening that have just completely been missed and technology and then of network effects and all and just generally kind of migrating from atoms to bits are definitely all a big part of it.
neurotypical institutional world seems


1:16:25.840,1:16:32.229
Eric WeinsteinΒ  36:28Β 
to have on sense making it scale like is
So, let's talk about something that's a little bit funny, which is if you're starting to replace government, as we were talking about it, and you see it as a monopoly on violence, you notice that very often there there's a very funny role played by organized crime. Now, of course, when we think about organized crime, we tend to get emotionally excited by it for whatever reason, we make lots of movies about it. It occupies the mind is something terrifying and alluring. And there's a Sort of two weird aspects to organized crime, one of which is violence as a contract enforcement mechanism. In other words, you're you're gambling, so you don't have access to the regular court system. Now you have a gambling debt. And so just the way our government would put you in jail, if you, you know, started doing things, you couldn't fulfill all of your obligations, and you were doing harm to lots of people, you couldn't be stopped. Organized crime has to do something can't maintain jails. Yeah. So it can put the hurt on somebody for means of contract enforcement. So it's, it's not looking to do violent things. It's looking to run illegal businesses for which there's demand. Yeah. And then it has a problem of enforcement. Then there's another part of it, which is violence is the product. So for example, extortion, be shame, if anything, were to happen to this lovely business that you're running, is a veiled threat pay us or we're going to do harm to your business or, you know, contract killings and the like, Yeah. Are you worried that effectively by introducing parallel structures, both in the form of currency, and in the form of contracts, smart contracts that are the sinequan on I guess, of the difference between Bitcoin and aetherium, right that the killer app that is most likely to happen while the technology is still clunky and cumbersome and difficult, is in the parallel space that either you are going to replace organized crime as a place to do contractual business outside of the normal scope, which could be a benefit because organized crime still exists and is a bad thing because it uses violence and you would use math and in place of it or that it could actually be used to facilitate violence by, you know, using, let's say prediction markets or something else, to induce people to commit crimes, where the committer the committer of violence has unusual information about where the violence will be committed and therefore can profit from it.


1:16:28.899,1:16:33.989
Vitalik ButerinΒ  39:25Β 
there a way of promoting another blog in
It's definitely a worry that kind of iron lots of people in the crypto space I've had since the beginning, though, I do feel like at least so far, I've been surprised like, it feels like less of it has happened than we had expected


1:16:32.229,1:16:37.149
Eric WeinsteinΒ  39:38Β 
this world would be like less wrong
the thing. Yeah. Now, what do you what accounts for the idea that something that can be drempt has mostly not occurred?


1:16:33.989,1:16:39.429
Vitalik ButerinΒ  39:50Β 
there particular thinkers that I think
I definitely have a


1:16:37.149,1:16:42.099
Eric WeinsteinΒ  39:51Β 
of as being very important influential I
is maybe it's a great thing about humans that we didn't realize that we're not nearly the horrible people we thought well,


1:16:39.429,1:16:44.499
Vitalik ButerinΒ  39:56Β 
think you've given to our breda grey and
and I definitely have a couple of theories about this. So one of those theory is is that like, basically a lot of a lot of things that people do and especially a lot of things that people do in the InfoSphere, because like public goods are kind of chronically underfunded, and all that rely really heavily on goodwill. And so, you know, you have goodwill that if someone if you pay someone to write some piece of piece of software for your website, it's not going to include some blogs code. Yeah, some bug that will steal people's money or tell the FBI where you are that you if you create a system for enforcing agreements that they'll actually get enforced then, even like on internet, internet forums, they depend on kind of a lot of volunteer labor for just things like moderation. And if you create a group that just goes, like, fundamentally against like the vast majority of people's values, then it's just going to be hard to find volunteers. Record for that sort of thing. And like this. So that's probably the big the big reason I think why so far we don't really see a kind of, you know, complicated decentralized structure is being created to facilitate like, black black markets for killing people and so forth. Because let's


1:16:42.099,1:16:47.139
Eric WeinsteinΒ  41:22Β 
Elliot sir you'd kasky there's like this
start off with something more mundane like a numbers racket, right? So a numbers racket would probably be a much simpler application. So what do you mean by numbers


1:16:44.499,1:16:51.280
Vitalik ButerinΒ  41:31Β 
very different world that isn't well
racket here?


1:16:47.139,1:16:53.050
Eric WeinsteinΒ  41:32Β 
known and in part I view podcasting is
Well, something that takes the place of a lottery where some, let's say some naturally occurring number that would be printed in a newspaper, and presumably, nobody has the influence over what number gets printed. Right, constitutes the lotto draw.


1:16:51.280,1:16:55.719
Vitalik ButerinΒ  41:48Β 
like pirate radio which is the phrase I
lotteries have existed on blockchain since the beginning. Yeah, okay. Even. There's definitely been this kind of self community of people that created this kind of provably fair Ponzi contract. brackets were in smart contracts and you can throw money in and as soon as if you're the person to throw money in as soon as soon as to when people throw money and you get, like 1.9 back or something like that, and this was just a fun game that people have made and like participated didn't even fully knowing what the economics of the thing are. So, yeah, and thing, things like that, if definitely happened, though. I don't like they'll in gambling is the sort of thing that like, there isn't like, there isn't this kind of nine, like 99% plus consensus that it's really horrible and evil, right? Because like, on the one hand, like lots of people want to ban it, but on the other hand, people do it. And it's something that people see negative consequences of but at the same time, it's something good is something that people participate in and enjoy, whereas the extremely bad stuff Like that's there's definitely this kind of this kind of barrier between kind of things that are edgy versus things that are just so far over the edge and for things that are kind of So, so far over the edge like it is like even with smart contracts and even with all of those things, it's still hard to coordinate those structures. And I think like the blockchain, like the blockchains inability to directly read facts about the real world could even be a saving grace here. Because like, because a blockchain can't directly read, whether or not something in the real world happens. It basically means that if you want to have some application, whether a prediction market or something else that does make so can


1:16:53.050,1:16:58.929
Eric WeinsteinΒ  43:44Β 
keep your sum is that because you're
we say a little bit more about the problem, the intellectual problem that you're, you're in touching? Sure. So the idea is that there may be something that's very perceptible to us about the real world. But we might naively think, well, the computers should be able to tell whether that happened. Right? or it didn't happen, and that that's a surprisingly difficult thing to code up reliably. So that the interface between the world of bits and bytes in the world of otherwise physical reality, which often we don't realize we're thinking about subjectively, that it's hard to maintain that interface. So that the way in which the things that have happened in the real world can be definitely agreed upon without us any kind of adjudication inside of the digital. Right.


1:16:55.719,1:17:02.439
Vitalik ButerinΒ  44:39Β 
Russian yes what can we do potentially
Yeah. So I don't


1:16:58.929,1:17:05.139
know how to say that. Well, blockchains are on a fundamental a programmatic medium, all the CEOs data that gets fed into the ends, what they can compute as a result of that data. And so if you wants to create a smart contract that says, if someone figures out how to what the prime factors of a big amount pay them a reward, you can do that because prime non prime factors are something that you can multiply together and verify. But if you want to have a smart contract that says, if there's a hurricane in Sri Lanka, then pay 500 bucks then, like you can't do that on the blockchain itself, because computer code has no idea what hurricanes are, it has no idea what Sri Lanka is.
using your technology to even the


1:17:02.439,1:17:07.979
Eric WeinsteinΒ  45:22Β 
playing field between corporate
Nobody knows. But in that case, you could have a designation that you know that the national correct, you can now you can get data from third party sources. And this is the thing that else turns it into data.


1:17:05.139,1:17:10.360
Vitalik ButerinΒ  45:33Β 
sense-making and this kind of
Exactly. This is the thing that a lot of applications are doing. But the thing that's important sticky have in mind is that as soon as you do that, like your smart contract is no longer fully trustless.


1:17:07.979,1:17:13.139
Eric WeinsteinΒ  45:45Β 
home-brewed sense making that seems to
Right, right. So there's this concept, which is like a utopian Khan's concept of a trustless legal system, so that you don't have the messiness of humans anywhere in the system and you can have complete faith in it. confidence in the contract that you've struck?


1:17:10.360,1:17:16.059
Vitalik ButerinΒ  46:02Β 
me to be of an infinitely superior level
Yeah. Right. And like outside of proof, like basically giving bounties for solving math problems, like it's not something that you can 100% achieve.


1:17:13.139,1:17:20.409
Eric WeinsteinΒ  46:12Β 
hmm well not infinitely but quite
So I can't necessarily ensure my vacation that if, if I go all the way to Argentina and the weather is terrible, it pays out because we can't agree what terrible weather is,


1:17:16.059,1:17:23.349
Vitalik ButerinΒ  46:26Β 
superior yeah so I think like once again
right? Like you can create structures bit made out of individual participants, they can try to align incentives to get people to kind of give to give correct results. So you can have complicated kind of contraptions involving people giving different answers and policing each other and rewarding people who give the same answer that other people have committed to and things like this, but like you can only try to approach the like, the idea of kind of corrects truth like you can never 100% reach it.


1:17:20.409,1:17:26.889
Eric WeinsteinΒ  46:59Β 
there's kind of two aspects to kind of
Now. You Started aetherium in 2014 2015,


1:17:23.349,1:17:28.809
Vitalik ButerinΒ  47:04Β 
blockchain TM that I think are equally
started started end of 2013. I mean, it launched in 2015.


1:17:26.889,1:17:30.280
Eric WeinsteinΒ  47:08Β 
valuable here one is the technology
Okay. Would you say let's use launch date as an artificial sure date? Would you say you are more or less excited emotionally? Huh? Then you were when it started. You've now been through. you've logged some miles here. Hmm. I


1:17:28.809,1:17:32.199
Vitalik ButerinΒ  47:30Β 
itself and then the other is the
definitely, definitely an excited.


1:17:30.280,1:17:35.469
Eric WeinsteinΒ  47:34Β 
existing community around the technology
I was excited.


1:17:32.199,1:17:39.639
Vitalik ButerinΒ  47:36Β 
and I mean with the tech with the
I think the main difference is kind of more definitely a kind of excited in the sense of like four years. Well, definitely, like, kind of as opposed to indefinite it like four years, yeah, four years ago was about like, hey, let's make this platform to kind of try a really a bunch of really cool things. We have no idea what's going to happen and let's just stick it out there and Now like, we know things about things that people are already doing, we know things about things that people wants to do. And we and we also know more about Nick what the limitations are. And so instead of just being this kind of extremely fuzzy dream of like, let's stick smart contracts and algorithms and kind of trust or justify everything, right? It's something that's kind of both more moderate, but also kind of more like seeming much more like it. Like it actually has a big chance of transforming the world you know, precisely because that's when moderated to some extent. So you more


1:17:35.469,1:17:43.119
Eric WeinsteinΒ  48:42Β 
technology itself I mean you can try to
if I gave you a false three choices, and by the way, smart people always hate these things. So feel free to break the model. If I gave you a choice between saying, Are you mostly excited about the technology in the amount of innovation? Are you mostly excited about the business opportunities for yourself? Are you mostly excited about the way in which this could transform human life? Would you be that? Would that be an easy call? Or would you say I reject that decision tree?


1:17:39.639,1:17:43.600
Vitalik ButerinΒ  49:13Β 
like create and you know institutions
Some mix of the first and the third?


1:17:43.119,1:17:47.050
I don't know. I guess like, the framing of business opportunities is definitely kind of never like, this is weird. I mean, despite of even
for


1:17:43.600,1:17:49.780
Eric WeinsteinΒ  49:26Β 
I could do even things like funding like
I get the sense that you don't love money enough.


1:17:47.050,1:17:51.640
Vitalik ButerinΒ  49:29Β 
podcasts for example and like even like
Yeah, this is true. Okay. Hmm. And you know, it's weird, because for a long time, you


1:17:49.780,1:17:53.380
Eric WeinsteinΒ  49:35Β 
things like this kind of get coin grants
have a lot of it.


1:17:51.640,1:17:56.080
Vitalik ButerinΒ  49:36Β 
quadratic voting for example it would be
Yeah, well, I have a lot of it. And it's also even weirder, because like, for a long time, I subscribed to this kind of branch of economics that basically says that like love of money is like the best motivation for vivo for people to have and I'm randian


1:17:53.380,1:17:58.120
Well, and I'd say,
a potentially a great way to kind of


1:17:56.080,1:18:02.440
me in that area,
funds media organizations that avoids


1:17:58.120,1:18:04.270
Eric WeinsteinΒ  49:57Β 
the pitfalls of both say a present-day
but it's but I don't get that I'll be honest. I I just don't get that vibe,


1:18:02.440,1:18:06.190
Vitalik ButerinΒ  50:01Β 
media which is funded by some
right? And there's, I've definitely you kind of shifted a lot over the years. I think my experience even within the crypto space itself has kind of


1:18:04.270,1:18:08.290
given me a lot of new information to work with.
combination of battery of like


1:18:06.190,1:18:10.420
Like this. Basically in then this goes back to this kind of cryptocurrency is as a microcosm of wider society thing, right? Like, if you're like, basically any like any movements regardless of like what what the movement is for what its goals are to be succeeded needs to be sufficiently big. And when something is sufficiently big, it needs to have internal structure to coordinate and achieve its objectives, which means that it suffers from governance issues it suffers from public goods issue is it suffers from conflicts with adjacent movements suffers from conflicts between In its own values, and its and its own desire to succeed, and so on and so forth. And like it needs to come up with ways to answer like, basically almost the same kinds of hard problems that the world as a whole is working on. Well,
advertising and horrible work made


1:18:08.290,1:18:13.000
Eric WeinsteinΒ  51:16Β 
incentives and at the same time avoid
you know, it's interesting. When I look at this sort of World of people maybe had an epicenter in the Bay Area, though I think it's less true now. We're trying to figure out what is the future and how do we get there? There's a very clear sense that people's creativity and their intelligence is correlated with their financial success, but it's not very tight. And so there's like an embarrassment that well, that person is super amazing and they're not doing all that well. This person, somehow metabolizing tremendous amount. This is


1:18:10.420,1:18:15.160
Vitalik ButerinΒ  51:54Β 
the pitfalls of like basically sent
something that I've definitely got to realize just from kind of my travels like I've interacted with a lot of kind of super famous people in different kinds of positions, which includes like some world leaders and includes some kind of leaders of like fields in cryptography. And it in you realize that, like people in the speeches, positions, they are impressive, but they're not like super amazing godlike, impressive, right. Some of them are, some of them are but then there's also super amazing God like impressive people that just like don't get to get that much recognition at all. What I'm trying to


1:18:13.000,1:18:18.460
Eric WeinsteinΒ  52:31Β 
accentually controlled media and create
get at is that I think about, like, if you hang around with musicians, very often, you'll have somebody who's a super famous musicians and you won't know who's really good. And they'll tell you something you've never heard of, and you say, well, is that musicians musician? Exactly. This


1:18:15.160,1:18:20.080
Vitalik ButerinΒ  52:45Β 
a third alternative so and like it
Yes.


1:18:18.460,1:18:22.750
Eric WeinsteinΒ  52:46Β 
doesn't even have to be quadratic voting
Right. And so, you know, if I, if I gave the name of people who are famous for being let's say, physicists, they're very often the people on television as physicists, but they will point to some guy who doesn't give a lot of interviews and say, well, that's the top guy exactly


1:18:20.080,1:18:24.610
Vitalik ButerinΒ  53:04Β 
it could be some other kind of mechanism
like basically, the social status like, is predicted by competence multiplied by, like, basically publicity skill. And that's half correlated with competence for obvious reasons, right? Like those people also know the people that have the real competence. And


1:18:22.750,1:18:26.980
Eric WeinsteinΒ  53:22
for funding and blog chains could be
that's one of the things that I've always found really interesting about people who have this diehard belief that markets produce justice, which is, I do think that success in markets is somewhat correlated, or has been with things like productivity, but it's also correlated sometimes with how predatory somebody can be or you know, how lucky they happen to be at a particular moment. And one of the questions that I have is, if you're really interested in innovation, which is what I sort of pick up is one of the main things How does something like aetherium? Hmm, give us a possibility to revitalize innovation after what many of us consider a period of relative stagnancy outside of the areas of computation communication, which everybody knows have exploded. Huh? Do you think about how Ethereum can mediate a new Renaissance, a new generative age?


1:18:24.610,1:18:30.880
Vitalik ButerinΒ  54:31Β 
used as a base layer for that there's
You talk about it a little bit. Definitely. And I think, I mean, there's a ton of aetherium as a platform for experiments in own governance and public goods funding is one thing I mentioned. And education is another thing that I kind of talk about and you and obviously we do. I mean, I have a lot of these blog posts on vitalik.ca and other forums, and like, they're one of the big challenges. If for example is that like for in an of internet educational resources in general there's basically two kinds, right? There's like papers and I Wikipedia and like basically things that are technically accurate, but they're just like horribly not understood and understandable at all and we should not be forcing people to even try reading them. And then there's Popeye literature which is very accessible but it's often just actively wrong and really horrible ways. And like I I personally, even before theory, I'm like I did Bitcoin magazine, for example, like I've always tried to find this kind of middle gap this way to explain, take concepts that are technical and expand them to broad a broader audience so that they are more accessible. And like this, to me has been important in part because like I view accessibility of information about the technology as a precondition for even the decentralization of the space. Like if the thing technically runs on people 30,000 computers, but only 42 people know how it works and your decentralization, indexes and 50,000. It's 42. And so


1:18:26.980,1:18:36.130
Eric WeinsteinΒ  56:07Β 
also the end up watching community as a
it's a very nice point.


1:18:30.880,1:18:38.680
Vitalik ButerinΒ  56:09Β 
group of people who care about the many
Yeah. And so trying to kind of improve even like, even how we, in the theorem community and of work on innovation internally. But so those are kind of things that that happen in blockchains as NFL as a lab for trying out new things kind of first for the blockchain space, and then potentially, it could potentially export it to other things. And then we can also look at kind of blockchains as something that can be used to improve and create better institutions. So like one of the aetherium foundations, researchers have allowed Sam fair, he actually got into aetherium because he was looking at how to improve academic publishing. And, like he saw things like you know, the existing peer review mechanisms and how they were just a few flawed in a bunch of ways. And he thought that, like, Hey, here's a potentially apply form that we could use to like build something that does better. And like that's one of his core interests and why he is even continuing to work on the technology.


1:18:36.130,1:18:40.450
Eric WeinsteinΒ  57:16Β 
of these kinds of ideas and I mean even
You know, I hadn't understood how insiders used peer review in an academic context until a finance Professor got drunk at a party and said, you know, that guy who's harassing you in your research and finance, you don't know why he's doing so well. Why do you think he's doing so I know, he says, We've created a system where our fees are sky high to consult. And we do this by making the number of professors in our field small by controlling peer review. And so that effectively, we're conspiracy in restraint. Like this guy's just telling me straight out that this is a gating function to keep their consulting fees high, and that this guy is going to do everything that They tell him to do because otherwise he can't come into the club and charge these rates. That


1:18:38.680,1:18:43.600
Vitalik ButerinΒ  58:05Β 
a lot of etherion people are definitely
sounds about right. Right.


1:18:40.450,1:18:46.450
Eric WeinsteinΒ  58:07Β 
and some weight star codecs adjacent and
So that one of the app, another killer application. So you have one potential suite of applications, which have to do with facilitating illegality, some of that might regard result in net reduction of harm, because you could replace violence with math. Yes. On the other hand, a place where you could have a really positive effect is political economy where by removing the human ability to act badly, you effectively create a much fairer, more representative world exactly, you know, a, what do we do so you have an interest in the two fields that I find Wikipedia can't explain to any normal human being our theoretical math and physics, even biology. You can sort of Guess what's going on because you have something concrete to think


1:18:43.600,1:18:49.480
Vitalik ButerinΒ  59:03Β 
then I feel like I have tried my best to
through. But it's even biology. Like you gotta learn math to deeply grok it because otherwise you're just memorizing like names of chemicals.


1:18:46.450,1:18:52.120
Eric WeinsteinΒ  59:10Β 
kind of bring these worlds together and
Well, but you might hear I have a PhD in math, if I try to read a math paper, one or two fields over from my own field, right? I will do less well with it than if I read a biology paper, even though I've taken no class in biology.


1:18:49.480,1:18:54.360
Vitalik ButerinΒ  59:30Β 
get them to talk to each other in means
That sounds right.


1:18:52.120,1:18:56.380
Eric WeinsteinΒ  59:31Β 
sometimes it is a challenge because
Yeah. Yeah.


1:18:54.360,1:18:58.270
Vitalik ButerinΒ  59:31Β 
there's ways in which they're similar
Like there's a difference between the level of math that you have to know to just because it's important for you as a philosopher, and then and like, that's about the level of math that I think you need even to be good at biology to be good at economics to be good at a lot of things, right. It's understanding like principles, even things like for example, if you have a trade off between x and y, and right now you're optimizing entirely for accent it's a smooth curve, then, if you want a little bit of y, then you can get your first bit of y at almost zero cost of x, right? And that's just a prop. Like it's a property of continuous functions that like, from the maximum, the derivative starts at zero. And if you kind of just deeply kind of mentally grok, about like a couple hundred of these facts, we're deeply kind of mentally grok. Like how to walk then, like you get a lot. But then from there, there's also like the frontiers and often I mean, the frontiers are less important.


1:18:56.380,1:19:02.140
Eric WeinsteinΒ  1:00:32Β 
and there's a lot of people who are in
Well, so here's a weird thing I don't know how to bring up when I tried to understand crypto as a space. I'm always confronted by how incredibly Byzantine and impossible it is to understand all of the acronyms, all of the sub pieces of history. I mean, it's an incredibly fragmented experience in which I spent a long period of time just feeling moronic. Isn't it odd that like aetherium itself suffers from this, this problem? It's hard to know what's going on?


1:18:58.270,1:19:05.230
Vitalik ButerinΒ  1:01:07Β 
both and there's also ways in which
Yeah, it's definitely something that we wants to fix. So I mean, if you ever have suggestions on like, what specifically we can make more understandable, I'm always happy to hear those.


1:19:02.140,1:19:07.030
Eric WeinsteinΒ  1:01:19
they're sometimes different but those
Fantastic. Now one thing that I think is really interesting is this episode that occurred in the Ethereum space in which you were faced with a very serious question of leadership having to do with an emergency that you could have either allowed to follow the rules that had been previously specified in some sense, or could where you could interject a certain amount of human intervention, thereby letting people know that this was to some extent, not mediated only by rules and computers. Can you Can you say a little bit about this famous incident? And Sure.


1:19:05.230,1:19:09.970
Vitalik ButerinΒ  1:02:02Β 
those differences can be a good thing
So in 2016, there was this smart contracts that a group called select get launched called the D eo. And d O stands for a decentralized autonomous organization. And that's where I'm I came up with about three years before. And it basically means that you can have a smart contracts this computer program that controls digital assets and encode a set of rules for an organization. And like you can use this kind of smart contract basically as a replacement for things like companies, and so small, I could decide to launch a DA Oh, and there, Gao was intended to be basically a decentralized VC fund, so people could apply. The Gao would vote on which projects were worth investing in.


1:19:07.030,1:19:11.950
Eric WeinsteinΒ  1:02:49Β 
yeah I guess I'm concerned that in our
So leaderless, rule-based, yes. And virtual, exactly.


1:19:09.970,1:19:17.470
Vitalik ButerinΒ  1:02:53Β 
we were coming up on an election in the
Yes.


1:19:11.950,1:19:19.300
Hit hit all the cypherpunk notes at the end there. Right Place, okay, and the thing launched and we were all expecting it during it's kind of initial fundraising phase, which was also like an open public blockchain process and to maybe get $5 million. But then he got five, and he got 10 and I got 20 I got 50 and 100. And then the price of eath went up and I got 200. And then when I was sitting at a friend was
US and I view Fox News in the New York


1:19:17.470,1:19:23.320
Eric WeinsteinΒ  1:03:26Β 
Times and CNN is like watching
it all alarming that it was so successful?


1:19:19.300,1:19:25.300
Vitalik ButerinΒ  1:03:28Β 
professional wrestling it's got a very
it after the 50 mark, I definitely kind of switched from excitement to deep apprehension, but you know, it's a contract did you let on it


1:19:23.320,1:19:28.630
Eric WeinsteinΒ  1:03:37Β 
clear narrative structure before the
that you were feeling that way? A bit. Okay.


1:19:25.300,1:19:29.890
Vitalik ButerinΒ  1:03:41Β 
facts even come in yeah this is this is
You know, so on a June 17 2016, when I was in Shanghai at a friend's apartment, and it was about 15 and 30 something in the afternoon, I saw a message in one of the Skype chats that it was I was in and someone basically saying, hey guys look at the Dow, it seems like there's some money coming out of it. And so I checked on the public block explorer on the blockchain. And I saw a look that it seems like about $2 million eath has actually already been removed from the Dow and more eath incentive slowly being drained over time. And so I pings, the core developers, and I asked, Hey, is this normal? And at first I was thinking, Okay, the alternative is unthinkable. There has to be a reasonable explanation for this. And


1:19:28.630,1:19:31.990
Eric WeinsteinΒ  1:04:35Β 
actually one of the things I've only
see, we're locked into some sort of denial


1:19:29.890,1:19:36.540
Vitalik ButerinΒ  1:04:37Β 
really started noticing maybe in the
for the beginning. Yes. And the developers looked at it and over the next half hour, as more and more people came online and started chattering with each other, it became clear that the unthinkable has actually happened. And I actually burned about 20 of my own eath like basically just Dawson My the the theory on blockchain itself and just spamming it with transactions to try to kind of slow the attacker often is


1:19:31.990,1:19:39.190
Eric WeinsteinΒ  1:05:07Β 
last like one to two years I think it's
denial of service.


1:19:36.540,1:19:41.230
Vitalik ButerinΒ  1:05:08Β 
narratives are something that like don't
Yeah, yeah, just spam the blockchain with transact, not


1:19:39.190,1:19:43.870
Eric WeinsteinΒ  1:05:10Β 
seem like you're there when you're fully
all of my listeners will know the terms,


1:19:41.230,1:19:47.200
Vitalik ButerinΒ  1:05:12Β 
inside of them but once you and have
okay, so that the attackers transactions could not get in as quickly because the attackers transact, the attacker could only withdraw something like a couple hundred eath with every transaction. So it was a slow process, like in the hopes that the developers would find some way to apply was an


1:19:43.870,1:19:49.240
Eric WeinsteinΒ  1:05:27Β 
step outside and you start seeing that
intentional inefficiency, or was just that


1:19:47.200,1:19:50.980
Vitalik ButerinΒ  1:05:30Β 
Nick wait these people are missing
it was it was not intentional.


1:19:49.240,1:19:53.200
Eric WeinsteinΒ  1:05:31Β 
something and they're making predictions
So in some weird way, the inefficiency was a good


1:19:50.980,1:19:55.780
Vitalik ButerinΒ  1:05:34Β 
that turn out to be materially incorrect
yes, it gets even weirder, there's an even bigger inefficiency. That was the that would prove to be an even better thing. So but then the developers however, did not find a way to plug the hole. But the attacker voluntarily stopped after stealing about 4 million eath from the Dow. But in any case, the this is a second inefficiency, right voluntarily


1:19:53.200,1:19:56.830
Eric WeinsteinΒ  1:05:55Β 
like yeah there's no memory like there's
stopped. Yeah, there was a request made


1:19:55.780,1:19:59.260
Vitalik ButerinΒ  1:05:58Β 
no cost
no no as in the answer. just stopped. Okay. And so here's the second and bigger inefficiency, the money that was the attacker took out the 4 million if it did not go into the attackers wallet immediately. Instead it went into a child smart contract. And only after 35 days, could the attacker actually take that money out? And this was child smart contract. Do you mean a separate smart contract that that was created through a function call of the main da Oh, smart contract? Okay. So this was also not intended, right? It was just like a random quirk of fate that there was this big bug that was the biggest smart contract theft in history up until that point, and it put the money into this convenient box where it would just stay conveniently locked for 35 days, wherever one could stare and look at it. Oh, yeah. And the soon after this, there, were A call is happening between core developers and the proposal to remedy the situation with a blockchain fork came into play. Right. So basically what happened here is the there was a blockchain fork and emotional issue for this community. Yeah. So why is this so? Well, I guess first of all, it is I know exactly. So explain what what would happen. So, in general, a blockchain fork is on normal process, right? You have an upgrade and the developers of the Ethereum clients implement code that basically says after block number 4370000 stop processing blocks according to the old rules start processing blocks according to the new rules which have extra features attached and


1:19:56.830,1:20:01.750
Eric WeinsteinΒ  1:07:44Β 
yeah yeah you want to there's no
were blocks are just sent


1:19:59.260,1:20:04.420
Vitalik ButerinΒ  1:07:46Β 
accountability at all and it's something
packages of transactions. Yeah, okay, and B's and so ever before this sub, I know these code patches are formally proposed, there is this month period of many months long period of deliberation where changes are proposed people discuss them people talk about them. And generally it's agreed that these changes are good. And so people just go and download the code. And because everyone's downloaded the code, the blockchain after block 4370000 follows these difference in veterans are


1:20:01.750,1:20:07.180
Eric WeinsteinΒ  1:08:19Β 
that you just actively start thinking
very warm and very human processes. Yeah, whole logic of a machine.


1:20:04.420,1:20:11.730
Vitalik ButerinΒ  1:08:23Β 
seeking out how to move beyond yeah you
Exactly. And


1:20:07.180,1:20:15.940
so, the Dell fork, it was also a fork. It was also a code change implemented by the developers of the clients that is in was pushed out through a new version of the different clients that people could download. And users went ahead and voluntarily downloaded. And it would basically change the rules of the blockchain, except instead of changing them permanently, it would only do what a single one time change, and the single one time change basically said during Block 11920000 before processing any transactions, take the ether that stuck in the this child contract and move it into another contracts that could then basically refunds it also the victims. And so this was a very kind of manual intervention, right? It basically says like, we all agree to run code that just irregularly takes us money and just reassigns it to this other thing. So
know I think figuring out a better


1:20:11.730,1:20:18.730
Eric WeinsteinΒ  1:09:29Β 
funding model for media organizations in
it's very weird because, you know, we always think in like a sci fi movie that something that you think is human would rip off its mask and reveal itself to be a computer. And this is the reverse. Exactly. pewter face is ripped off revealing humans behind this this technological stack.


1:20:15.940,1:20:21.010
Vitalik ButerinΒ  1:09:49Β 
general seems because in some ways what
Yes. And, I mean, ultimately, like people talk about head of blockchain immutability, and like this is this idea that basically you're not supposed to do this. sort of thing. And


1:20:18.730,1:20:23.500
Eric WeinsteinΒ  1:10:01Β 
I'm concerned about is that something
where does that supposed to come


1:20:21.010,1:20:26.380
Vitalik ButerinΒ  1:10:03Β 
like podcasting is almost a public good
from? Exactly. So like there is there's definitely a sense in which it exists technologically, because like actually pulling off one of these forks is incredibly hard. And for example, if it was not the case that the money was conveniently stuck there in one, nice little azureus for 35 days, it would basically not have been possible to do it right. Because when as soon as you announced this protocol change that says we're going to take money out of here, put it in there, the attacker could just move the money from there to a different address and basically play this cat and mouse game and the attacker could win, but sometimes there is this possibility where you you absolutely can just like do these interventions and you can just decide to stop writing this code and start running this other code. And the only reason why this is not done more frequently, is basically because there exists these norms right in their existing norms in the blockchain community of law exam fear the researcher, I mentioned before And if calls them suppose ally, and like named after Nick Sabo and Nick's Apple actually dislikes the moniker Sabo is a lot but like it is a pretty accurate representation of kind of his beliefs, which is and the beliefs of many in the crypto community, which is basically that, like, even though it technically is code run by humans, we should act as though it is code not run by humans. And like because it is digital gold, right? Gold is not run by humans, gold is gold. And so if we want to make something that is like gold, then even though we're unfortunately stuck with this thing, run by humans, we should like try as hard as we can to pretend it's not. And like this was the ideology of a lot of people in this space. And the Dell fork very much went against this ideology. And so like, even though in my opinion, like having norms that you can't just like, go and edit whatever you want is valuable, but like when so much such a large fraction of the ecosystem is at stake. It's worth rethinking things. But like other people were, and if even more rigid in this regard. And so there was this kind of split in the community. And a portion of the community actually did not download the updates, right, a portion of the community did not download these code patches and implement the fork. And they just said, we will continue running our own our old chain. And the old chain has since then been called a theorem classic, and it runs to this day.


1:20:23.500,1:20:28.630
Eric WeinsteinΒ  1:12:25Β 
and so that's probably a public good
This is a fascinating Civil War, get F


1:20:26.380,1:20:30.910
Vitalik ButerinΒ  1:12:28Β 
well I'm advertising in the one thing
in essence, yes.


1:20:28.630,1:20:34.360
Eric WeinsteinΒ  1:12:30Β 
that right I keep I call it the business
And what I get out of this is that there's this very weird thing, which is that people get very attached to ideologies. And then they come to understand why the simplistic version of that ideology can't possibly work in a warm human system. I watched this, if you ever gone to this festival called ephemeral, which is sort of Burning Man on the water, that was


1:20:30.910,1:20:37.360
Vitalik ButerinΒ  1:12:54Β 
model of last resort yes and we are
part of it, and I got invited to it, but I haven't had the chance to go yet.


1:20:34.360,1:20:39.070
Eric WeinsteinΒ  1:12:58Β 
going with an ad-supported model because
So it's kind of a libertarian. Waterworld in the Sacramento Delta. And what was interesting is that one year in order to come to the festival, you had to have a lecture and you had to agree that you would receive the lecture because of problems that had happened the previous year. And you realize that these libertarians were being forced to invent governance, and rather than just anarchy, you had to have some organized system. And so one of my questions is, is that is that dream of escape from the heavy hand of government. Effectively, not something to be pursued inside of crypto space for the most part because we realize that it is going to require governance and that we can't figure out a way to turn this into a completely cold and methodical process.


1:20:37.360,1:20:41.560
Vitalik ButerinΒ  1:13:52Β 
I don't want to disguise we were
It depends on which version of the dream you subscribe to,


1:20:39.070,1:20:46.630
like the if the version of the dream you subscribe to was the dream that says We can finally use algorithms to like, basically completely eliminate human's ability to interfere in things than,
somebody offered to endow the podcast


1:20:41.560,1:20:48.310
like,
not not my employer and I decided


1:20:46.630,1:20:50.170
if your goal is to see that enforced 100%, then like, no, you're not going to get that. If your dream is that you dislike how governments have hit existing governments and monopolies of violence have hegemony over this social function of coordination and enforcing structures of rules and you want there to exist an alternative, then, like that's something that we can talk about.
against it because I think what I really


1:20:48.310,1:20:52.690
Right. So, like,
want to do is to try to figure out how


1:20:50.170,1:20:53.730
if the if the dream is to augments? Yes. And, I mean, I'd argue that the blockchains have a very necessary role now, especially kind of given modern kind of political trends work. There basically is no single, traditional political body that's accepted. trustworthy by the entire world and it doesn't look like there's going to be one. But like if your dream is to, and if completely over overturn things and have like some simplistic notion of digital property rights as the only thing that governs behavior, then that's something that they,
to improve the business model we've


1:20:52.690,1:20:57.970
you can try for, but you're not going to succeed.
talked about a couple different


1:20:53.730,1:21:01.210
Eric WeinsteinΒ  1:15:19Β 
variations on advertising in order to
Let me try something else with you that I'm curious about. You and I are both plugged in to this weird alternate world that thinks very differently. And I had Andrew Yang, in that chair, and you saw that episode of the show before. Some people call this neuro divergence that this is a non neurotypical world. And I would say that both you and I exhibit some indicia of not thinking along standard lines. The thing that occurred to me is that you brought up slate star Codex, which is this website that is extremely influenced In our shared world, and I was thinking about the difference between slate star Codex and CNN in terms of sense making. Is there any way in which the Ethereum world can create a counterweight so that the neurodivergent can rest the stranglehold that seemingly the neurotypical institutional world seems to have on sense making at scale? Like, is there a way of promoting another blog in this world would be like less wrong? There are particular thinkers that I think of as being very important, influential, I think you've given to Aubrey de Grey and elites or yudkowsky. There's like this very different world that isn't well known. And in part I've used podcasting is like pirate radio, which is the phrase I keep, or some is that because you're rushing Yes. What can we do potentially using your technology to even the playing field between corporate sensemaking. And this kind of homebrewed sense making, it seems to me to be of an infinitely superior level. Hmm, well, not infinitely but quite superior.


1:20:57.970,1:21:04.150
Vitalik ButerinΒ  1:17:17Β 
make sure that controversial but very
Yeah. So I think like, once again, there's kind of two aspects to kind of blockchain that I think are equally valuable here. One is the technology itself and then the other is the existing community around the technology and mean with the tech with the technology itself. I mean, you can try to like create institutions for you even things like funding like podcasts, for example. And like even like things like the kind of get going grants quadratic voting, for example, it would be potentially a great way to kind of funds media organizations that avoids the pitfalls of both Say a present day media which is funded by some combination of advert of like advertising and like horrible clickbait incentives. And at the same time, avoid the pitfalls of like, basically sent essentially controlled media and then create a third alternative. So and like it doesn't even have to be quadratic voting, it could be some other kind of mechanism for funding and blockchains could be used as a base layer for that. There's also the blockchain and community as a group of people who care about the many of these kinds of ideas. And I mean even a lot of a theory and people are definitely and swayed star Codex adjacent. And I feel like I've tried my best to kind of bring these worlds together and get them to talk to each other. In lien, sometimes it is a challenge because there's ways in which they're similar and there's a lot of people who are in both and There's also ways in which they're sometimes different. But those, those differences can be a good thing.


1:21:01.210,1:21:06.010
Eric WeinsteinΒ  1:19:07Β 
sensible and level-headed people can
Yeah, I guess I'm concerned that in our we're coming up on an election in the US, hmm. And I view fox news in the New York Times, and CNN is like watching professional wrestling. It's got a very clear narrative structure before the facts even come in.


1:21:04.150,1:21:08.620
Vitalik ButerinΒ  1:19:27Β 
weather the storm that the big problem
Yeah, this is this is actually one of the things I've only really started noticing, maybe in the last like, one to two years. Like it's narratives are something that like, don't seem like you're there when you're fully inside of them. But once you kind of step outside, and you start seeing that, like, wait, these people are missing something, and they're making predictions that turn out to be materially incorrect. Like,


1:21:06.010,1:21:11.620
Eric WeinsteinΒ  1:19:54Β 
that I keep seeing is that advertisers
no, there's no memory, like there's no


1:21:08.620,1:21:15.460
Vitalik ButerinΒ  1:19:56Β 
pull when there's a coordinated campaign
cost and yeah, yeah, you want to there's no accountability. at all, then it's something that you just actively start thinking seeking out how to move beyond. Yeah, you know, I think figuring out a better funding model for media organizations in general seems


1:21:11.620,1:21:19.570
Eric WeinsteinΒ  1:20:16Β 
to say drop that program or else yes and
to me in some ways, what I'm concerned about is that something like podcasting is almost a public good. And so the ad totally


1:21:15.460,1:21:21.940
Unknown SpeakerΒ  1:20:25Β 
there's a a need for something like the
a public good.


1:21:19.570,1:21:24.850
Eric WeinsteinΒ  1:20:26Β 
blockchain or a smart contract to make
But advertising is the one thing that right I keep, I call it the business model of last resort. Yes. And we are going with an ad supported model, because I don't want to disguise we were somebody who offered to endow the podcast, not not my employer. And I decided against it because I think what I really want to do is to try to figure out how to improve the business model. We've talked about a couple different variations on advertising, in order to make sure that content reversal but very sensible and level headed people can weather the storm that the big problem that I keep seeing is that advertisers pull when there's a coordinated campaign to say, drop that program or else Yes. And there's a need for something like the blockchain or smart contract to make sure that you can't silence people who are speaking decently, just because they've pissed off a very large activist community. Right. So, do you see any way in which the blockchain for example, like I might give up advertising, if I could figure out a way to fund not only this program, but allied programs?


1:21:21.940,1:21:27.520
Vitalik ButerinΒ  1:21:43Β 
sure that you can't silence people who
So in 2011, when I was starting Bitcoin magazine, I yeah. Well, it started off with like with this one anonymous person whose name I'll never know who will aside from T by his internet handle, and who was just paying The five Bitcoin which back then was $4 per article to write articles for him. And I mean, this was five times lower than the minimum wage, but I loved it because it was the higher highest wage I've ever had. And eventually, despite paying me five times less than minimum wage, I Kiba ran out of money. And like he's told me, hey, maybe Bitcoin week, we will have to shut down. And I came up with, with this business model that actually ended up saving it for a few months, and basically saving it all the way until I got rid of poached by Bitcoin magazine. And the business model is basically, I write two articles a week, and we'll publish the first paragraph of each article, kind of publicly. And we'll say the rest of these articles is kind of hidden for ransom. And here are some Bitcoin addresses. And if people can collectively come together and pay 2.5 BTC to these Bitcoin addresses for everybody. Yes, then it's nice. Yeah. And it actually worked well and it actually started breaking And like much more money than Kiba had paid before. So it's not saying like that precise model is gonna save.


1:21:24.850,1:21:29.890
Eric WeinsteinΒ  1:23:08Β 
are speaking decently just because
It's a clever, it's a clever exploit. Yeah,


1:21:27.520,1:21:33.460
Vitalik ButerinΒ  1:23:10Β 
they've pissed off a very large activist
exactly. And like, to me, more clever experiments as like what smart contracts are all about. So like, let's try lots of different things. And we're gonna have come upon some steps forward that are interesting.


1:21:29.890,1:21:35.380
Eric WeinsteinΒ  1:23:26Β 
community right so do you see any way in
But I'd love to have you come back and talk to us about other things that other points. But let me just close by asking you a couple of questions about the mysterious origins of decentralized computing the blockchain and all of this stuff. Sure. What the hell? Why don't we know who Satoshi is at this point, where Satoshi seemingly came up with the first really viable version of this this idea, huh? We can prove that. Yeah, I guess those have been Those blocks have never transacted that, that are under satoshis control one would think. Yeah, and that's a very mysterious origin story.


1:21:33.460,1:21:38.170
Vitalik ButerinΒ  1:24:10Β 
which the blockchain for example like I
Yeah. It surprises a lot of people.


1:21:35.380,1:21:40.930
Eric WeinsteinΒ  1:24:13Β 
might give up advertising if I could
Does it surprise you?


1:21:38.170,1:21:46.300
Vitalik ButerinΒ  1:24:16Β 
figure out a way to fund not only this
It does. I mean, it's like there's definitely not many people that have managed to stay anonymous kind of through that level of prominence. Like even like silk road does kind of first big round of crypto anarchist outlaw project on top of Bitcoin like after about two years, Ross Ulbricht got caught. And then the tools for just continuing to look at things that you say until eventually you slip up and you use some word word patterns that match like word patterns that you used under your name and then you correlate things like it's difficult to get around like I've


1:21:40.930,1:21:49.290
Eric WeinsteinΒ  1:24:55Β 
program but allied programs so in 2011
unabomber got away with this for a long time. The yeah The Citizens Committee to investigate the FBI that pulled off this amazing heist in 1971.


1:21:46.300,1:21:52.180
Vitalik ButerinΒ  1:25:05Β 
when I was starting Bitcoin magazine I
So in Ted wrote his stuff in the 1970s. Right? And that's also 19. Seven, you know, saying, now we have, we have the internet and everyone's stuff is on a law is publicly available. We have machine learning, we have statistical tools.


1:21:49.290,1:21:54.040
Eric WeinsteinΒ  1:25:21
well it started off with like with this
Do you think it's well known who Satoshi is within a group that doesn't want to talk? No.


1:21:52.180,1:21:56.770
Vitalik ButerinΒ  1:25:25Β 
one anonymous person whose name I'll
So I am I think the I mean, there's high uncertainty about this, but I think that it's it's very likely is that the Satoshi is one person.


1:21:54.040,1:21:59.800
Eric WeinsteinΒ  1:25:40Β 
never know who aside from Kiba his
You think that he is one person?


1:21:56.770,1:22:02.050
Vitalik ButerinΒ  1:25:42Β 
internet handle and who was just paying
Yeah. And then there isn't some, like a theory grants conspiracy theory. I think you know, Satoshi,


1:21:59.800,1:22:03.970
Eric WeinsteinΒ  1:25:50Β 
me five Bitcoin which back then was $4
not that. You know, who's Satoshi is. But do


1:22:02.050,1:22:07.240
Vitalik ButerinΒ  1:25:53Β 
per article to write articles for him
you think I think it's someone I know personally. Yeah.


1:22:03.970,1:22:08.650
So if I had to pick one One person and the and
and I mean this was five times or lower


1:22:07.240,1:22:09.910
Eric WeinsteinΒ  1:26:03Β 
than a minimum wage but I loved it
I'm not asking you to out that. Well, you can say


1:22:08.650,1:22:10.660
Vitalik ButerinΒ  1:26:05Β 
because it was the higher highest wage
yeah, and I will say it. It's like, it's not an uncommon opinion if I if I had to, like bet my life on one person who helped me, basically because and how was around in the early days, he clearly understood what was going on here clearly participated since the beginning. And he also died at the exact time basically that she disappeared. And so there's a lot of these kind of coincidences in his favor, but then he's the one person I bet on if I had to bet on someone, but I'd also bet against him like it's well under 50% God, so it's a pretty good caper. Yeah. And there's, there's definitely a significant chance that it's like someone who's still in the in the crypto space somewhere that I've met at some point. Or it could just be someone we have never met and never will. He He's done a really good job, leg. Even just kind of setting himself up as this kind of perfect role or are they? Yes, yes and no. Yeah, she is. She really like, impressed a lot of people.


1:22:09.910,1:22:15.250
Eric WeinsteinΒ  1:27:15Β 
I've ever had
It's pretty, I find it very inspiring. One of the great intellectual feats of our time, would have anonymous authorship. And the only story I know that's comparable to that is this bizarre break in story where the there was a woman I believe, named Judy fine gold, who was determined to take the secret to the grave. The other people in the conspiracy, left the conspiracy after the statute of limitations had run out and they started talking and then her perspective, as we all agreed, we were never going to mention who did it. There's some desire usually, to get caught and an urge to purge.


1:22:10.660,1:22:17.650
Vitalik ButerinΒ  1:27:55Β 
um and eventually despite paying me five
Yeah, well, that does make it more likely there's one person right conspiracies get exponentially harder, the more people you add. That's true.


1:22:15.250,1:22:20.260
Eric WeinsteinΒ  1:28:05Β 
times less than minimum wage at Kiba I
It's been fantastic having you here, I want to let you know that you're welcome to come back and to talk about things that are unrelated to aetherium and blockchain and crypto, because I actually I have to say I found very inspiring. Your attempt to use this platform to rethink what can economics be repurposed to do and I think that that's an unheralded potential killer app for your your program.


1:22:17.650,1:22:22.830
Vitalik ButerinΒ  1:28:31Β 
ran out of money and like he's told me
Thank you. It's been it's, it's been good to be on here.


1:22:20.260,1:22:22.830
Eric WeinsteinΒ  1:28:34Β 
hey maybe
Okay. You've been through the portal with Vitalik Buterin. Thanks for joining us. Please remember to subscribe wherever you listen to podcasts and to check out our YouTube channel. And to subscribe there and click the bell for more episodes when they become available. Thanks for joining us.


'''(Last few minutes are missing)'''
[[Category:The Portal Podcast]]
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Revision as of 18:52, 10 February 2023

The Ethereal Prince and His Virtual Machine
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Information
Guest Vitalik Buterin
Length 01:29:05
Release Date 21 November 2019
YouTube Date 11 December 2019
OmnyFM Listen
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Episode Highlights

In this episode, Vitalik Buterin sits down with Eric to discuss ethereum, the wider world of crypto and heterodox economics.

Taking note of the new development of blockchain in 2010, Eric wrote an essay called β€œGo Virtual Young Man”. A few years later, a Thiel Fellow named Vitalik created a virtual machine with an idiosyncratic smart contract system and a currency. Ironically, Eric had recently become a Managing Director at Thiel Capital. Perennially circling each other intellectually, the two now sit down in person to discuss economic paradigm shifts, crypto and the future of online sovereignty and social coordination.

Eric Weinstein (right) talking with Vitalik Buterin (left) on episode 12 of The Portal Podcast

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Transcript

This content does not yet have an edited transcript. The Portal Group's Transcript Completion Project generates transcripts for content related to Eric Weinstein and The Portal Podcast. If you would like to contribute, contact Aardvark or Brooke on The Portal Group Discord Server for access to this content's machine-generated transcript.


Unedited Transcript

Eric Weinstein 0:07 Hello, you found the portal. I'm your host, Eric Weinstein, and I'm sitting here today with vitalik butor and the leader and founder of the Ethereum world of cryptocurrencies and smart contracts. Welcome to the portal.

Vitalik Buterin 0:22 Thank you. It's good to be here, Eric.

Eric Weinstein 0:24 It's terrific to have you. Now, in general, when I see you interviewed, immediately, everybody goes straight to cryptocurrencies and Imperium. But one of the things that I found fascinating about your story is, is that in order to be a good steward of this new and emerging economics, you've actually applied yourself a great deal to standard and regular economic theory. And I was curious, if I understand correctly, you dropped out of college after a year you're self taught in economics, but you've taken a real interest in understanding How markets and economic theory work. Is that a fair description?

Vitalik Buterin 1:04 Yeah, I think so. And economics has been of interest for me. Definitely for a long time. I mean, when I discovered Bitcoin back in 2011, and I was still in high school, it was this kind of interesting confluence of ideas that I was already pretty attracted to. So of open source culture, that was something that a good friend from high school Christopher Ola had already and indoctrinated me with really well. The, the math mathematical and cryptographic aspects also of libertarianism and Austrian economics was kind of the Zeitgeist of the Bitcoin space at the day and those were of ideas that I definitely found philosophically quite attractive at that time. And I know I was definitely curious and yeah, read a bunch of books. So yeah. And read the Austrian economics canon because that's what the Bitcoin people were talking about all day. Yeah, read some kind of behavioral economics literature, really kinda men and cittadini and all of those people that just because I knew that I had to read other stuff for balance.

And, and also economics itself is a kind in pretty mathematical and subject Well, kind of right it's it's on the borderline because it's kind of both mathematical and you got your curves and your derivatives and your intersections but also humanities, right, it's really at this intersection of both figuring out how to apply these models to and of specific cases and also trying to figure out well, which models are really correct in the first place. And like the first question you can't answer with math, but the second question, you really can't and you need other kinds of thinking as well.

Eric Weinstein 2:58 Well, this is An area of my own interest because the way I see it, economics is odd in a way that very few people, I think have appreciated in that. If we take what could be argued to be our two greatest ideas in scientific, scientific man, let's say, one would be sort of the geometric dynamics of physics and economics has been constructed to be an as if physics, if you will, and on the other hand, and inherits from the theory of selection, you could say that markets are the continuation of systems of selective pressures by other means. And so what happens when our two greatest ideas touch each other, and they do it in a place which has very bizarre properties, by my way of thinking that is that economists are on the one hand, very rigorous thinkers and are also very susceptible to what we might call political economy, and distorted thinking. Does that ring true to you?

Vitalik Buterin 3:59 Yeah. Definitely, I mean, there's definitely this combination of the four. On the one hand, you have these mathematical formulas. And on the other hand, these assumptions and often Nick, the assumptions can be pretty, pretty well hidden, and they're kind of difficult to see at first glance, right. And it really can be subtle, right? So like one of the arguments that economists tend to put forward is basically like mutually beneficial transactions are a bet are beneficial. And so like, we should not interfere with them, right? Like if I have a client bottle and I want to sell you the client bottle, you're willing to pay $5 then I clearly valued at less than $5 evaluated more than $5 therefore the transactions on net good and like I, therefore I should give you the bottle and you should give me the money and that's what we would do, but At the, the reasons why that 10 sometimes breaks down like are, in many ways more subtle, right? Like, first you have monopoly issues like, if I'm the only person selling Klein bottles, then I might want to sell them at a higher price than you'd be willing to accept because I want to extract more value. And sometimes the things that matter most to society aren't things that we can transfer between people from one person to another, like Klein bottles, but like public goods, and like the biggest public good of all, is that is the idea, right? And an idea? Well, if I have an idea, and I give you the idea, I still have the idea. So it's something that once you release it, it's out there and there isn't this kind of property of that.

Eric Weinstein 5:48 So, should we pause just briefly to talk about what a public good is for the audience?

Vitalik Buterin 5:53 Yeah.

Eric Weinstein 5:54 So a public good is technically defined within economics. Many people have an intuitive idea. Something which is you're stating has this property of inexhaustible it. Yeah. And then the other attribute would be excludability, which is

Vitalik Buterin 6:11 non excludability for

Eric Weinstein 6:12 Sorry, not non excludability, sorry, the attribute of excludability and is used to define a public good. So, if something is inexhaustible and excludable, then it has this weird property that even hardline economists would agree that the market may fail to price, in fact, will fail to price the value to society of that object. So there is an admission within economics that there are zones of failure.

Vitalik Buterin 6:43 Right? Well, I guess the kind of the big kind of rethinking that needs to happen is that like there is a long been this kind of site guys to that private goods like things that I have, and if I give it to you, I don't have it. And you have it on than normal and public goods are a rare exception. But like really public goods are pretty darn important, right? Like if we didn't have public goods, then we'd be trading sticks. And B and B are pellets and we basically still be caveman. Like they're basically the

Eric Weinstein 7:14 Well, like an army would be a public good.

Vitalik Buterin 7:16 Yeah. Yeah. In army well, armies are interesting, because they're kind of to us, like in a medium scale context or a public good and in the large scale, context or public bad, because if everyone's armies were forced to be cut down by a factor of 10, like we'd all be better off. So economics is like really subtle that way, especially once you have kind of two layers of scale at play.

Eric Weinstein 7:38 Sure. Now, one thing that I worry a lot about that almost nobody seems to join me in, is that in our mutual world, I don't know what to call it. of people who are experimenting with what I would say the mainstream would consider far out ideas like radical life extension, credit. currencies is a, you know, potentially being rival risks with sovereign currencies. But in our world, we talk a lot about the abundance economy in a world of abundance. And I'm terrified of a world of abundance because one of the properties that software has had is that it has replaced physical goods and services, which have these attributes. They're not public with small files, and when a small file is not encrypted, it has the attributes of a public good and therefore value and price can can chasm. That's terrifying, because then this weird thing of markets which allows us respite from dictatorship and somebody's directing our activities, and allows us to self direct goes away, because things can't be priced accurately. Are you Do you have any does that have any purchase on your thinking?

Vitalik Buterin 9:00 Yeah, so and I think give definitely kind of struck at a very important points, though, I think and if my own framing of the points is slightly different. So you know, I think like, first of all, you start off by thing by realizing that kind of private property and things is not something that fell out of the sky. It's a social technology, right? It's that we have the of norms that basically say, Oh, you can't, we will create this kind of mapping from objects to people. And if an object does maps to you, then you're allowed to do basically whatever the hell you want with that, and other people cannot do anything with it without your permission. And if that concept did not exist, then physical objects would be public goods, right? Because like, if there's a Klein bottle over here, the Klein bottle would be there, but like, really, anyone could take it. And if you produce political climate models, then you're not producing something for yourself. You're producing Something for pretty much the first person who comes along and grabs it. And so property rights, right are this kind of social technology that helps make private good economies tractable. And we could consider making social technologies to make public good economies tractable, right, like the existence of public goods by itself is it's not good or bad. Like, arguably, it's even good because it means that people can cooperate with each other on such large scales. The bad thing is that we don't really have good tools for handling it. And specifically, we don't have good tools for handling yet that manage to simultaneously avoid both not giving good results and like basically being centralized index editorial. And so this is where my interest in radical exchange comes in. So this was this some movement that was started by going wild a couple of years ago when he wrote this radical markets book and you He advanced some of his proposals like Harberger taxes and quadratic voting were the ones that are one of the most popular. And the and the core of idea behind the ideas basically is like, let's create structures of norms and incentives that try to have the best properties that we can get out of markets, but do do so without like, basically economically breaking in the way that we know existing property rights systems do a once you enter a world where kind of everything that you build is just inherently affects millions of people.

Eric Weinstein 11:39 Well, this is this is an interesting perspective. You, of course, are famous for implementing this aetherium protocol. But before we ever get to computer protocols, there are sort of legal and structural protocols that we impose upon ourselves in the form of government and markets that are subordinate to government. And there's a weird way in which you may start a process by which you write down rules for how a society should function. But once those rules are written down, you may discover all sorts of unintended properties of that rule set. And there's a real question. Can we actually unhook ourselves from the killer app that is capitalism, or American democracy? And if we start to realize that that app is running out of control,

Vitalik Buterin 12:37 I guess, in for I know, for myself as a social technologist, and I definitely don't think that we should be kind of overturning entire countries with the new mechanisms overnight. I think

Eric Weinstein 12:51 I wasn't insinuating.

Vitalik Buterin 12:52 Oh, definitely. I think like, that's figuring out how to kind of solve grand problems. If Humanity is a long term goal. But I mean short term goals are there's, there's little things that we can make better. Right? So I and this is actually part of why I find cryptocurrency and blockchain is interesting because they are, in a lot of ways this ideal ground for economic experimentation of different types. Great. So like to give one concrete example and in. So one of the ideas that go on while and myself have come up with and are pushing forward is something called quadratic funding. And the way that quadratic funding works is roughly this, right? So you have a central hub of pool of funding. And you could imagine this coming from a government you could imagine this coming from wealthy donors, you could imagine it just being put together by some crypto economic protocol, it could come from anywhere. And then you allow people to like basically set up projects and you like people say I have a project here is something that I'm doing. And if you like this, then you can donate to me. And you let people donate to projects. And then the core of the mechanism is basically that if there is a project that multiple people donate to, so there's some project you donate to it and someone else donates to it as well, then your donation doesn't just benefit benefit you, it also benefits the other person and the other person's donation doesn't just benefit them, it also benefits you. And so to kind of counteract that, and of market failure, the mechanism basically says, well, we're going to multiply the effect of your donation by two ads multiply the effect of the other person's donation by two. And so now, both of your incentives are kind of aligned with the whole and you extend this mechanism. So instead of supporting two people, it supports an arbitrary number of people. And you kind of calculate these subsidies across all possible pairs of people. And what you get is this formula that basically says you know what people don't need different projects, you'll look at how many people donated and how much money is donated. And based on this from the central pool of funding, you give this extra subsidy. And so it basically is like a market for public goods. Right? And in the Ethereum ecosystem, there's something called I get coin grants, where we've basically started like trying to use this mechanism to fund public goods inside the aetherium ecosystem, right? So this could be implementations of the Ethereum protocol. It could be scaling solutions. It could be wallets, it could be educational resources. And we've had a sniff test around recently with about and if $200,000 in this central matching pool, and it recently finished, I mean, you can go to gitcoin.co slash grants to see the results and you've got contributions from hundreds of people and the results that gave were actually pretty reasonable. So

Eric Weinstein 15:53 That's fantastic.

Vitalik Buterin 15:54 Yeah, and so like, I think, Ethereum could have a lot of value, as And just being a test net bed for an decentralized governance and decentralized public good funding infrastructure of this kind?

Eric Weinstein 16:09 Well, I think that that's fascinating. I guess one of the ways in which I would understand that is, you know, when my wife, who's an economist, and I talk about this stuff, we often talk about a market democracy has these two voting systems, one is $1, one vote, and the other is one person, one vote theoretically, anyway, even if that's honor only in the breach.

Vitalik Buterin 16:28 Yeah, and like, liberal democracy does this horrible thing of like treating these as opposite poles where something is either one or the other, and they're, and they're often fighting each other when really everything's a spectrum.

Eric Weinstein 16:40 And I like that a lot. I mean, another thing that we've been discussing recently, and this again, is sort of joint with with Pm ilani is thinking about the Chicago approximation, where you've got some reality that's incredibly nonlinear and complicated. And then weirdly in one of these famous This is where the map is not the territory. You take this incredibly simplified world where agents have this properties you can't even believe you would ascribe to a human being where you call it homo economicus, and it's perfectly rational. And it has all of these characteristics, like an automaton that only makes rational decisions. And then you impose that, like through law and economics programs, and suddenly you've distorted your society by taking the map as the territory so seriously, that you don't realize that you're destroying something and distorting. Yeah.

Vitalik Buterin 17:39 No, that's definitely the like, it's a socially it's one approximation and immune, we're never going to have approximations that are perfect, because the world is just so glad to hear that. Yeah. And the world is just so complicated and so even rapidly changing in the 21st century, like approx in all approximations are bullshit, but like you have to find a couple of good ones that work reasonably well and make progress for us.

Eric Weinstein 18:07 And I think that one of the things that's unfairly done to cryptocurrencies is that we expect them to solve all of the problems that already cropped up, yes, in our forms of governance and our forms of currency and exchange in court systems. And that what we should be asking of them is to be improvements or to augment already existing systems. Now, one of the odd things about governance is we could view you, as in some sense, starting a rival virtual country that has a legal system because the Ethereum I don't know what to call it network platform protocol.

Vitalik Buterin 18:48 Yeah, it rolls coins and it has the right to reassign those coins

Eric Weinstein 18:51 And, not only that, but it has a stand in for the legal system in the form of what are called smart contracts. Normally a we have this concept in governance, I guess it goes back to Weber that a government is supposed to be a monopoly on violence, which is an odd definition that you recover the concept of government from monopolizing violence, and then you, you sort of unearth and unpack all of the features of government from that one generating function. In some sense a cryptocurrency and smart contracts derive from math rather than violence,

Vitalik Buterin 19:32 derived from math and social consensus, right?

Eric Weinstein 19:36 Well, I love the fact that I was gonna get to that but

Vitalik Buterin 19:39 I know because this is important, right? Because like, for example, you know, you have the Bitcoin blockchain. And then you have the Litecoin blockchain, which operates under almost exactly the set of the same set of rules as the Bitcoin blockchain. And yet, the Bitcoin blockchain has 100 million dollar market cap and the Litecoin blockchain has a $3 billion market cap or something like that and much less usage. So, like blockchains are definitely not just math and technology, methods technology are the substrate and maybe in the same way that the military is like the substrate of keeping a country together, but

Eric Weinstein 20:14 they're including police force

Vitalik Buterin 20:15 exactly, but like they're the substrate but they're not the country, right the country is the community.

Eric Weinstein 20:21 Well, and this goes to what I would love to get into you with love to get into with you, which is the way in which different utopian dreams collide in the space of cryptocurrencies. So, for example, there are some dreams that may sound more like what I assume you may be active in the effective altruism community, is that a possibility? Yeah. Which tries to figure out how to do the most good to do good efficiently rather than sanctimoniously. There are other people who have this idea of I just want to retreat from other human beings. And I want to be left alone I don't want to be taxed I want to be told what to do very strong libertarian perspective sometimes those people are the same people there's two

Vitalik Buterin 21:08 kinds of libertarians there's well there's many ways to switch over to the two kinds but one like there's the Leave me alone type and then there's the kind of conquer the world type right the kind that kind of relishes exceeding fiat currency is be destroyed and replaced by Bitcoin and it's kind of you know, creating 1000 year kind of reign of sound money that soon I mean, I generally I have this kind of instincts that like when someone says that, like we should impose a lot of short term disruption and harm on the entire world for the sake of some nebulous long term gain. That's something to be skeptical of. But so I'm

Eric Weinstein 21:50 Underline the word skeptical. You're using an extreme form of understatement

Vitalik Buterin 21:55 Yeah, yeah, and I guess so I'm I'm definitely not in In the camp that had to actively relishes like fiat currency is being destroyed. But mean there's and I definitely don't think that all bitcoiners do like there's some that do see it as an of something that's supposed to coexist and something that's supposed to provide a check and balance against the government's monopoly on issuing money without replacing it entirely. So, you know, there are there's definitely enough different visions within individual communities, there's different visions between different communities. And there's, it's not just decisions about what cryptocurrency should do to the world, it's also visions about like, what how cryptocurrencies should work internally and what they should do to each other. So like, not in that sense, I guess, like, cryptocurrencies are interesting and in blockchains, not just because of like what they can do to the world but also just as this kind of microcosm of the world all unto themselves. selves. I mean, like we talked about countries, virtual countries, but you know, there, there's many virtual countries now there's over 1400 on coin market cap and they have some analog of God, if

Eric Weinstein 23:11 You do think of them as virtual countries?

Vitalik Buterin 23:14 it's all models are bullshit, but some are useful.

Eric Weinstein 23:19 Well to the extent that a country is a sensible thing to label, yeah,

Vitalik Buterin 23:23 yeah.

Eric Weinstein 23:28 So, in that world where we're dealing with often very radical individualism, and a very strong sense that there is something wrong with the coercive aspect of a government. Do you worry that something that you have given birth to, may start to behave in very different ways than you would ever want

Vitalik Buterin 24:00 Definitely, I mean, probably the closest that we've seen to things like this happening already would be the the initial coin offering boom in 2017 and 2018. And like basically, what happened there was that people saw that cryptocurrency is are something that could potentially hit a very high value. And so people started saying, oh, like, I'm raising money like anyone come in, give me $50 million. And I'm going to build a cryptocurrency and I'm going to make it great and I'll turn your $50 million dollars into 50 billion, guaranteed and this like, and it's complicated, right? Because I mean, on the one hand, like the possibility of kind of raising money and using it to fund cryptocurrency development like it's, it did a lot of good, right? Like in general, like the open source community it's in, it kind of acutely suffers from This hash public goods challenge that we talked about because then open source software is a very public good. And we saw some very public kind of splats involving open source software being under maintains like the CloudFlare and have issues a couple years back when it turned out that's an open SSL library was like really, really under maintain despite billions of dollars of value depending on it. And with cryptocurrency, suddenly you can make things that are completely open source that through coins do have a funding mechanism. And like, you know, this has massive like massively accelerated the development of many kinds of cryptography is zero knowledge proofs and peer to peer networking, a lot of other things. But at this, on the other hand, like it's also given rise to this kind of speculation, and in many cases, the projects turn out to be outright fraudulent, right?

Eric Weinstein 25:51 But there's a really delicious and weird situation. I haven't asked you about it yet, but you're I presume that your net worth is crashed a great deal. We got run up and then came. Came back. Did you know and were you happy in any way about that?

Vitalik Buterin 26:10 relieved?

Eric Weinstein 26:11 relieved?

Vitalik Buterin 26:12 Yeah. So when the right at the top of the big bubble like in December 2017 when Bitcoin was hitting 20,000 eath was hitting 1400 I made this tweets and a series of tweets. And that sort of became somewhat famous on the space where I basically said, the cryptocurrency space has reached half a trillion dollars does does it deserve it? Like do the things that it's actually accomplished? Like hold a candle to the promises that the market is ascribing to it? And I mean, the subtext of my answer is not yet and that was proven very right. fairly quickly. In

Eric Weinstein 26:57 could you didn't short it, did you?

Vitalik Buterin 26:58 so The AI Ziad can get and get the Ethereum foundation to sell about 70,000 eath. Like basically at the top, and that's doubled our runway now. So this was one good decision that had a lot that had a lot of impacts, but did not short,

Eric Weinstein 27:19 I should say that I was weirdly somewhat relieved as well, I view that the innovation of decentralized transactions and the bit you know, it's hard for me to say because I actually am convinced that the blockchain should be an intermediate state and should not be the permanent version of decentralized computing agri, okay. But I thought that that was such an amazing innovation that you could have a locally enforced mechanism without a centralized authority, but with big Global ledger unfinished, which which I see of it as a point of intellectual failure, that, in some sense, you're mirroring the transactions of the physical world. So for example, for those listening at home who don't have a visual here, metallic, has several glass bottles next to him, where he to give one to me which he shouldn't do right now. But the idea would be that it would no longer be in his space, and it would be in mind. And that property of atoms has been somewhat mirrored in Bitcoin and blockchain and aetherium transactions.

Vitalik Buterin 28:45 This is like the concept of like money as a thing, right? The scarcity of the 21 million limit. If I give you five coins, I have five less than you have five more,

Eric Weinstein 28:55 right. And so the idea is that it's what you're doing is you're putting conservation laws into from the physical layer into the logical layer.

Vitalik Buterin 29:05 Right? And yeah, and I this and if to some extent kind of reflects the kind of very deep way of Austrian economic libertarian origins of the the space way back back in the end of 2009 to 2013 days. And creating like digital gold was pretty much the AMA digital payment system was the first use case. But I definitely think that like we can and should be thinking about point systems that work in ways other than money.

Eric Weinstein 29:36 Well, I agree with that. And I also think that it isn't digital gold because as the saying goes, you know, gold or money has no stench, and that the blockchain is this bizarre difference with the physical world in that it is a distributed ledger that may be somewhat anonymous but still gives the history like if I had Do $1 and you don't have access to any particular means of analyzing whose DNA is on that dollar, you have no idea where it's been. And these that is not that is violated by the current blockchain type implementations. Yes. So it isn't a complete port of the physical world of digital, but it is a an astounding one. And I guess I get very frustrated with the economics questions like, well, what's good? What's it good for? Where's the killer app? I mean, we have all of whatever's left of human civilization to figure out what this thing is meant to do. Yeah. And I'm not very worried that we're not going to figure it out. I mean, we're going to figure it out sooner or later, because of conservation law and digital space is just too valuable. They're wrong. You worried at all about the search for? Like, I just hate this question. You know, where's that where's the killer app, and I'm thinking Chill out, man is this is an astounding intellectual achievement. Is that wrong?

Vitalik Buterin 31:07 Yeah. And I think there's definitely Yeah. And a long time ago, and I think in the apps will come, you know, there's the ones that are coming right now or basically you're gonna have financial but I think, I mean, that's kind of true just in part because the finance, the existing financial system is just like so ready and waiting to be disrupted that in the long term like there's, there's a disruptive and polite term for destroy.

Eric Weinstein 31:38 You choose? Well, but I mean, there's something interesting here, you're 25 years old. Hmm. Every bit of your adult life is post 2008 Mm hmm. And to be 25 years old and in charge of a financial ecosystem to the extent that anyone is in charge of a theory, and I don't want to claim that you are sitting there, running it making all these decisions. That's an astounding thing that that this has fallen to somebody who, whose adult life is post the crash. Hmm. Do you think about that at all that you don't have the same associations the rest of us do with markets when they were claimed to be working well, like during the during the era of the great moderation, supposedly when volatility was banished? Yeah, so Team 12.

Vitalik Buterin 32:38 Right. So one thing that I kind of only realized recently that I found interesting is that they're like, there aren't kind of two tribes here. There's three tribes. Right. And what I mean by this is that there's the tribe that says markets are are great. And there's the tribe that says markets are bad. And like we shouldn't move to more things that look like political mechanisms. But then if you look at kind of the the Zeitgeist that's kind of fairly popular in the cryptocurrency space, I mean, definitely even still now to a big extent, it's that markets are great. But the thing that existed and exists like isn't markets. And so I guess like there's people who are pro market and who see kind of the existing financial system as being that, and there's people who are pro market and receive the existing financial system as being like yet another one of the perversions of that that needs to be overcome.

Eric Weinstein 33:38 Well, it's odd because I would love to fix our democracy. I'd love to fix our markets. But I'm, I have to say I believe that I have grown up in a approximately 50 year bubble which the silent generation and then the boomers presided over and my own read That because of their inability to figure out sufficient innovation to take over from the previously innovative system, that the world of human expertise has been almost completely contaminated by special pleading and political economy, so that many of us who don't have a particularly Austrian or libertarian bent are just sick to death of being lied to by people claimed to be Nobel laureates in economics. Yeah. Do you? Is it Yeah. 70 emotional connection to you. Hmm. I feel like I'm lied to about almost almost, you know, the doctors are lying. The lawyers are lying. The accountants are lying. The extraction companies are lying. And it's not because of a million different reasons. It's because growth ran out and our whole society is predicated on it. Need for economic growth?

Vitalik Buterin 35:02 Yeah, no, there's definitely a lot of things that are that have changed in us and a system that's just not keeping up and doesn't and doesn't understand that there is such a thing as keeping up.

It's like

so, like one, like,

even Glenn talks about this, right, like he talks about kind of the mark markets has social technology mentality versus the, like, basically, End of History mentality, and I guess, like, the way that they can, and I definitely saw this kind of, is, I guess, 10 years ago that said, kind of even more broadly than like markets versus other mechanisms that's like, things are 80% efficient, and let's work to make them 95% efficient. Whereas the, the thing that's really going on is that things are 3% efficient, and we should work hard. Making them 6% efficient. Like if you kind of move away from the narrow context of like I'm, I have something to sell when you have something to buy, which is pretty well optimized already, then there's lots of these kind of very big things that are happening that have just completely been missed and technology and then of network effects and all and just generally kind of migrating from atoms to bits are definitely all a big part of it.

Eric Weinstein 36:28 So, let's talk about something that's a little bit funny, which is if you're starting to replace government, as we were talking about it, and you see it as a monopoly on violence, you notice that very often there there's a very funny role played by organized crime. Now, of course, when we think about organized crime, we tend to get emotionally excited by it for whatever reason, we make lots of movies about it. It occupies the mind is something terrifying and alluring. And there's a Sort of two weird aspects to organized crime, one of which is violence as a contract enforcement mechanism. In other words, you're you're gambling, so you don't have access to the regular court system. Now you have a gambling debt. And so just the way our government would put you in jail, if you, you know, started doing things, you couldn't fulfill all of your obligations, and you were doing harm to lots of people, you couldn't be stopped. Organized crime has to do something can't maintain jails. Yeah. So it can put the hurt on somebody for means of contract enforcement. So it's, it's not looking to do violent things. It's looking to run illegal businesses for which there's demand. Yeah. And then it has a problem of enforcement. Then there's another part of it, which is violence is the product. So for example, extortion, be shame, if anything, were to happen to this lovely business that you're running, is a veiled threat pay us or we're going to do harm to your business or, you know, contract killings and the like, Yeah. Are you worried that effectively by introducing parallel structures, both in the form of currency, and in the form of contracts, smart contracts that are the sinequan on I guess, of the difference between Bitcoin and aetherium, right that the killer app that is most likely to happen while the technology is still clunky and cumbersome and difficult, is in the parallel space that either you are going to replace organized crime as a place to do contractual business outside of the normal scope, which could be a benefit because organized crime still exists and is a bad thing because it uses violence and you would use math and in place of it or that it could actually be used to facilitate violence by, you know, using, let's say prediction markets or something else, to induce people to commit crimes, where the committer the committer of violence has unusual information about where the violence will be committed and therefore can profit from it.

Vitalik Buterin 39:25 It's definitely a worry that kind of iron lots of people in the crypto space I've had since the beginning, though, I do feel like at least so far, I've been surprised like, it feels like less of it has happened than we had expected

Eric Weinstein 39:38 the thing. Yeah. Now, what do you what accounts for the idea that something that can be drempt has mostly not occurred?

Vitalik Buterin 39:50 I definitely have a

Eric Weinstein 39:51 is maybe it's a great thing about humans that we didn't realize that we're not nearly the horrible people we thought well,

Vitalik Buterin 39:56 and I definitely have a couple of theories about this. So one of those theory is is that like, basically a lot of a lot of things that people do and especially a lot of things that people do in the InfoSphere, because like public goods are kind of chronically underfunded, and all that rely really heavily on goodwill. And so, you know, you have goodwill that if someone if you pay someone to write some piece of piece of software for your website, it's not going to include some blogs code. Yeah, some bug that will steal people's money or tell the FBI where you are that you if you create a system for enforcing agreements that they'll actually get enforced then, even like on internet, internet forums, they depend on kind of a lot of volunteer labor for just things like moderation. And if you create a group that just goes, like, fundamentally against like the vast majority of people's values, then it's just going to be hard to find volunteers. Record for that sort of thing. And like this. So that's probably the big the big reason I think why so far we don't really see a kind of, you know, complicated decentralized structure is being created to facilitate like, black black markets for killing people and so forth. Because let's

Eric Weinstein 41:22 start off with something more mundane like a numbers racket, right? So a numbers racket would probably be a much simpler application. So what do you mean by numbers

Vitalik Buterin 41:31 racket here?

Eric Weinstein 41:32 Well, something that takes the place of a lottery where some, let's say some naturally occurring number that would be printed in a newspaper, and presumably, nobody has the influence over what number gets printed. Right, constitutes the lotto draw.

Vitalik Buterin 41:48 lotteries have existed on blockchain since the beginning. Yeah, okay. Even. There's definitely been this kind of self community of people that created this kind of provably fair Ponzi contract. brackets were in smart contracts and you can throw money in and as soon as if you're the person to throw money in as soon as soon as to when people throw money and you get, like 1.9 back or something like that, and this was just a fun game that people have made and like participated didn't even fully knowing what the economics of the thing are. So, yeah, and thing, things like that, if definitely happened, though. I don't like they'll in gambling is the sort of thing that like, there isn't like, there isn't this kind of nine, like 99% plus consensus that it's really horrible and evil, right? Because like, on the one hand, like lots of people want to ban it, but on the other hand, people do it. And it's something that people see negative consequences of but at the same time, it's something good is something that people participate in and enjoy, whereas the extremely bad stuff Like that's there's definitely this kind of this kind of barrier between kind of things that are edgy versus things that are just so far over the edge and for things that are kind of So, so far over the edge like it is like even with smart contracts and even with all of those things, it's still hard to coordinate those structures. And I think like the blockchain, like the blockchains inability to directly read facts about the real world could even be a saving grace here. Because like, because a blockchain can't directly read, whether or not something in the real world happens. It basically means that if you want to have some application, whether a prediction market or something else that does make so can

Eric Weinstein 43:44 we say a little bit more about the problem, the intellectual problem that you're, you're in touching? Sure. So the idea is that there may be something that's very perceptible to us about the real world. But we might naively think, well, the computers should be able to tell whether that happened. Right? or it didn't happen, and that that's a surprisingly difficult thing to code up reliably. So that the interface between the world of bits and bytes in the world of otherwise physical reality, which often we don't realize we're thinking about subjectively, that it's hard to maintain that interface. So that the way in which the things that have happened in the real world can be definitely agreed upon without us any kind of adjudication inside of the digital. Right.

Vitalik Buterin 44:39 Yeah. So I don't

know how to say that. Well, blockchains are on a fundamental a programmatic medium, all the CEOs data that gets fed into the ends, what they can compute as a result of that data. And so if you wants to create a smart contract that says, if someone figures out how to what the prime factors of a big amount pay them a reward, you can do that because prime non prime factors are something that you can multiply together and verify. But if you want to have a smart contract that says, if there's a hurricane in Sri Lanka, then pay 500 bucks then, like you can't do that on the blockchain itself, because computer code has no idea what hurricanes are, it has no idea what Sri Lanka is.

Eric Weinstein 45:22 Nobody knows. But in that case, you could have a designation that you know that the national correct, you can now you can get data from third party sources. And this is the thing that else turns it into data.

Vitalik Buterin 45:33 Exactly. This is the thing that a lot of applications are doing. But the thing that's important sticky have in mind is that as soon as you do that, like your smart contract is no longer fully trustless.

Eric Weinstein 45:45 Right, right. So there's this concept, which is like a utopian Khan's concept of a trustless legal system, so that you don't have the messiness of humans anywhere in the system and you can have complete faith in it. confidence in the contract that you've struck?

Vitalik Buterin 46:02 Yeah. Right. And like outside of proof, like basically giving bounties for solving math problems, like it's not something that you can 100% achieve.

Eric Weinstein 46:12 So I can't necessarily ensure my vacation that if, if I go all the way to Argentina and the weather is terrible, it pays out because we can't agree what terrible weather is,

Vitalik Buterin 46:26 right? Like you can create structures bit made out of individual participants, they can try to align incentives to get people to kind of give to give correct results. So you can have complicated kind of contraptions involving people giving different answers and policing each other and rewarding people who give the same answer that other people have committed to and things like this, but like you can only try to approach the like, the idea of kind of corrects truth like you can never 100% reach it.

Eric Weinstein 46:59 Now. You Started aetherium in 2014 2015,

Vitalik Buterin 47:04 started started end of 2013. I mean, it launched in 2015.

Eric Weinstein 47:08 Okay. Would you say let's use launch date as an artificial sure date? Would you say you are more or less excited emotionally? Huh? Then you were when it started. You've now been through. you've logged some miles here. Hmm. I

Vitalik Buterin 47:30 definitely, definitely an excited.

Eric Weinstein 47:34 I was excited.

Vitalik Buterin 47:36 I think the main difference is kind of more definitely a kind of excited in the sense of like four years. Well, definitely, like, kind of as opposed to indefinite it like four years, yeah, four years ago was about like, hey, let's make this platform to kind of try a really a bunch of really cool things. We have no idea what's going to happen and let's just stick it out there and Now like, we know things about things that people are already doing, we know things about things that people wants to do. And we and we also know more about Nick what the limitations are. And so instead of just being this kind of extremely fuzzy dream of like, let's stick smart contracts and algorithms and kind of trust or justify everything, right? It's something that's kind of both more moderate, but also kind of more like seeming much more like it. Like it actually has a big chance of transforming the world you know, precisely because that's when moderated to some extent. So you more

Eric Weinstein 48:42 if I gave you a false three choices, and by the way, smart people always hate these things. So feel free to break the model. If I gave you a choice between saying, Are you mostly excited about the technology in the amount of innovation? Are you mostly excited about the business opportunities for yourself? Are you mostly excited about the way in which this could transform human life? Would you be that? Would that be an easy call? Or would you say I reject that decision tree?

Vitalik Buterin 49:13 Some mix of the first and the third?

I don't know. I guess like, the framing of business opportunities is definitely kind of never like, this is weird. I mean, despite of even

Eric Weinstein 49:26 I get the sense that you don't love money enough.

Vitalik Buterin 49:29 Yeah, this is true. Okay. Hmm. And you know, it's weird, because for a long time, you

Eric Weinstein 49:35 have a lot of it.

Vitalik Buterin 49:36 Yeah, well, I have a lot of it. And it's also even weirder, because like, for a long time, I subscribed to this kind of branch of economics that basically says that like love of money is like the best motivation for vivo for people to have and I'm randian

Well, and I'd say,

me in that area,

Eric Weinstein 49:57 but it's but I don't get that I'll be honest. I I just don't get that vibe,

Vitalik Buterin 50:01 right? And there's, I've definitely you kind of shifted a lot over the years. I think my experience even within the crypto space itself has kind of

given me a lot of new information to work with.

Like this. Basically in then this goes back to this kind of cryptocurrency is as a microcosm of wider society thing, right? Like, if you're like, basically any like any movements regardless of like what what the movement is for what its goals are to be succeeded needs to be sufficiently big. And when something is sufficiently big, it needs to have internal structure to coordinate and achieve its objectives, which means that it suffers from governance issues it suffers from public goods issue is it suffers from conflicts with adjacent movements suffers from conflicts between In its own values, and its and its own desire to succeed, and so on and so forth. And like it needs to come up with ways to answer like, basically almost the same kinds of hard problems that the world as a whole is working on. Well,

Eric Weinstein 51:16 you know, it's interesting. When I look at this sort of World of people maybe had an epicenter in the Bay Area, though I think it's less true now. We're trying to figure out what is the future and how do we get there? There's a very clear sense that people's creativity and their intelligence is correlated with their financial success, but it's not very tight. And so there's like an embarrassment that well, that person is super amazing and they're not doing all that well. This person, somehow metabolizing tremendous amount. This is

Vitalik Buterin 51:54 something that I've definitely got to realize just from kind of my travels like I've interacted with a lot of kind of super famous people in different kinds of positions, which includes like some world leaders and includes some kind of leaders of like fields in cryptography. And it in you realize that, like people in the speeches, positions, they are impressive, but they're not like super amazing godlike, impressive, right. Some of them are, some of them are but then there's also super amazing God like impressive people that just like don't get to get that much recognition at all. What I'm trying to

Eric Weinstein 52:31 get at is that I think about, like, if you hang around with musicians, very often, you'll have somebody who's a super famous musicians and you won't know who's really good. And they'll tell you something you've never heard of, and you say, well, is that musicians musician? Exactly. This

Vitalik Buterin 52:45 Yes.

Eric Weinstein 52:46 Right. And so, you know, if I, if I gave the name of people who are famous for being let's say, physicists, they're very often the people on television as physicists, but they will point to some guy who doesn't give a lot of interviews and say, well, that's the top guy exactly

Vitalik Buterin 53:04 like basically, the social status like, is predicted by competence multiplied by, like, basically publicity skill. And that's half correlated with competence for obvious reasons, right? Like those people also know the people that have the real competence. And

Eric Weinstein 53:22 that's one of the things that I've always found really interesting about people who have this diehard belief that markets produce justice, which is, I do think that success in markets is somewhat correlated, or has been with things like productivity, but it's also correlated sometimes with how predatory somebody can be or you know, how lucky they happen to be at a particular moment. And one of the questions that I have is, if you're really interested in innovation, which is what I sort of pick up is one of the main things How does something like aetherium? Hmm, give us a possibility to revitalize innovation after what many of us consider a period of relative stagnancy outside of the areas of computation communication, which everybody knows have exploded. Huh? Do you think about how Ethereum can mediate a new Renaissance, a new generative age?

Vitalik Buterin 54:31 You talk about it a little bit. Definitely. And I think, I mean, there's a ton of aetherium as a platform for experiments in own governance and public goods funding is one thing I mentioned. And education is another thing that I kind of talk about and you and obviously we do. I mean, I have a lot of these blog posts on vitalik.ca and other forums, and like, they're one of the big challenges. If for example is that like for in an of internet educational resources in general there's basically two kinds, right? There's like papers and I Wikipedia and like basically things that are technically accurate, but they're just like horribly not understood and understandable at all and we should not be forcing people to even try reading them. And then there's Popeye literature which is very accessible but it's often just actively wrong and really horrible ways. And like I I personally, even before theory, I'm like I did Bitcoin magazine, for example, like I've always tried to find this kind of middle gap this way to explain, take concepts that are technical and expand them to broad a broader audience so that they are more accessible. And like this, to me has been important in part because like I view accessibility of information about the technology as a precondition for even the decentralization of the space. Like if the thing technically runs on people 30,000 computers, but only 42 people know how it works and your decentralization, indexes and 50,000. It's 42. And so

Eric Weinstein 56:07 it's a very nice point.

Vitalik Buterin 56:09 Yeah. And so trying to kind of improve even like, even how we, in the theorem community and of work on innovation internally. But so those are kind of things that that happen in blockchains as NFL as a lab for trying out new things kind of first for the blockchain space, and then potentially, it could potentially export it to other things. And then we can also look at kind of blockchains as something that can be used to improve and create better institutions. So like one of the aetherium foundations, researchers have allowed Sam fair, he actually got into aetherium because he was looking at how to improve academic publishing. And, like he saw things like you know, the existing peer review mechanisms and how they were just a few flawed in a bunch of ways. And he thought that, like, Hey, here's a potentially apply form that we could use to like build something that does better. And like that's one of his core interests and why he is even continuing to work on the technology.

Eric Weinstein 57:16 You know, I hadn't understood how insiders used peer review in an academic context until a finance Professor got drunk at a party and said, you know, that guy who's harassing you in your research and finance, you don't know why he's doing so well. Why do you think he's doing so I know, he says, We've created a system where our fees are sky high to consult. And we do this by making the number of professors in our field small by controlling peer review. And so that effectively, we're conspiracy in restraint. Like this guy's just telling me straight out that this is a gating function to keep their consulting fees high, and that this guy is going to do everything that They tell him to do because otherwise he can't come into the club and charge these rates. That

Vitalik Buterin 58:05 sounds about right. Right.

Eric Weinstein 58:07 So that one of the app, another killer application. So you have one potential suite of applications, which have to do with facilitating illegality, some of that might regard result in net reduction of harm, because you could replace violence with math. Yes. On the other hand, a place where you could have a really positive effect is political economy where by removing the human ability to act badly, you effectively create a much fairer, more representative world exactly, you know, a, what do we do so you have an interest in the two fields that I find Wikipedia can't explain to any normal human being our theoretical math and physics, even biology. You can sort of Guess what's going on because you have something concrete to think

Vitalik Buterin 59:03 through. But it's even biology. Like you gotta learn math to deeply grok it because otherwise you're just memorizing like names of chemicals.

Eric Weinstein 59:10 Well, but you might hear I have a PhD in math, if I try to read a math paper, one or two fields over from my own field, right? I will do less well with it than if I read a biology paper, even though I've taken no class in biology.

Vitalik Buterin 59:30 That sounds right.

Eric Weinstein 59:31 Yeah. Yeah.

Vitalik Buterin 59:31 Like there's a difference between the level of math that you have to know to just because it's important for you as a philosopher, and then and like, that's about the level of math that I think you need even to be good at biology to be good at economics to be good at a lot of things, right. It's understanding like principles, even things like for example, if you have a trade off between x and y, and right now you're optimizing entirely for accent it's a smooth curve, then, if you want a little bit of y, then you can get your first bit of y at almost zero cost of x, right? And that's just a prop. Like it's a property of continuous functions that like, from the maximum, the derivative starts at zero. And if you kind of just deeply kind of mentally grok, about like a couple hundred of these facts, we're deeply kind of mentally grok. Like how to walk then, like you get a lot. But then from there, there's also like the frontiers and often I mean, the frontiers are less important.

Eric Weinstein 1:00:32 Well, so here's a weird thing I don't know how to bring up when I tried to understand crypto as a space. I'm always confronted by how incredibly Byzantine and impossible it is to understand all of the acronyms, all of the sub pieces of history. I mean, it's an incredibly fragmented experience in which I spent a long period of time just feeling moronic. Isn't it odd that like aetherium itself suffers from this, this problem? It's hard to know what's going on?

Vitalik Buterin 1:01:07 Yeah, it's definitely something that we wants to fix. So I mean, if you ever have suggestions on like, what specifically we can make more understandable, I'm always happy to hear those.

Eric Weinstein 1:01:19 Fantastic. Now one thing that I think is really interesting is this episode that occurred in the Ethereum space in which you were faced with a very serious question of leadership having to do with an emergency that you could have either allowed to follow the rules that had been previously specified in some sense, or could where you could interject a certain amount of human intervention, thereby letting people know that this was to some extent, not mediated only by rules and computers. Can you Can you say a little bit about this famous incident? And Sure.

Vitalik Buterin 1:02:02 So in 2016, there was this smart contracts that a group called select get launched called the D eo. And d O stands for a decentralized autonomous organization. And that's where I'm I came up with about three years before. And it basically means that you can have a smart contracts this computer program that controls digital assets and encode a set of rules for an organization. And like you can use this kind of smart contract basically as a replacement for things like companies, and so small, I could decide to launch a DA Oh, and there, Gao was intended to be basically a decentralized VC fund, so people could apply. The Gao would vote on which projects were worth investing in.

Eric Weinstein 1:02:49 So leaderless, rule-based, yes. And virtual, exactly.

Vitalik Buterin 1:02:53 Yes.

Hit hit all the cypherpunk notes at the end there. Right Place, okay, and the thing launched and we were all expecting it during it's kind of initial fundraising phase, which was also like an open public blockchain process and to maybe get $5 million. But then he got five, and he got 10 and I got 20 I got 50 and 100. And then the price of eath went up and I got 200. And then when I was sitting at a friend was

Eric Weinstein 1:03:26 it all alarming that it was so successful?

Vitalik Buterin 1:03:28 it after the 50 mark, I definitely kind of switched from excitement to deep apprehension, but you know, it's a contract did you let on it

Eric Weinstein 1:03:37 that you were feeling that way? A bit. Okay.

Vitalik Buterin 1:03:41 You know, so on a June 17 2016, when I was in Shanghai at a friend's apartment, and it was about 15 and 30 something in the afternoon, I saw a message in one of the Skype chats that it was I was in and someone basically saying, hey guys look at the Dow, it seems like there's some money coming out of it. And so I checked on the public block explorer on the blockchain. And I saw a look that it seems like about $2 million eath has actually already been removed from the Dow and more eath incentive slowly being drained over time. And so I pings, the core developers, and I asked, Hey, is this normal? And at first I was thinking, Okay, the alternative is unthinkable. There has to be a reasonable explanation for this. And

Eric Weinstein 1:04:35 see, we're locked into some sort of denial

Vitalik Buterin 1:04:37 for the beginning. Yes. And the developers looked at it and over the next half hour, as more and more people came online and started chattering with each other, it became clear that the unthinkable has actually happened. And I actually burned about 20 of my own eath like basically just Dawson My the the theory on blockchain itself and just spamming it with transactions to try to kind of slow the attacker often is

Eric Weinstein 1:05:07 denial of service.

Vitalik Buterin 1:05:08 Yeah, yeah, just spam the blockchain with transact, not

Eric Weinstein 1:05:10 all of my listeners will know the terms,

Vitalik Buterin 1:05:12 okay, so that the attackers transactions could not get in as quickly because the attackers transact, the attacker could only withdraw something like a couple hundred eath with every transaction. So it was a slow process, like in the hopes that the developers would find some way to apply was an

Eric Weinstein 1:05:27 intentional inefficiency, or was just that

Vitalik Buterin 1:05:30 it was it was not intentional.

Eric Weinstein 1:05:31 So in some weird way, the inefficiency was a good

Vitalik Buterin 1:05:34 yes, it gets even weirder, there's an even bigger inefficiency. That was the that would prove to be an even better thing. So but then the developers however, did not find a way to plug the hole. But the attacker voluntarily stopped after stealing about 4 million eath from the Dow. But in any case, the this is a second inefficiency, right voluntarily

Eric Weinstein 1:05:55 stopped. Yeah, there was a request made

Vitalik Buterin 1:05:58 no no as in the answer. just stopped. Okay. And so here's the second and bigger inefficiency, the money that was the attacker took out the 4 million if it did not go into the attackers wallet immediately. Instead it went into a child smart contract. And only after 35 days, could the attacker actually take that money out? And this was child smart contract. Do you mean a separate smart contract that that was created through a function call of the main da Oh, smart contract? Okay. So this was also not intended, right? It was just like a random quirk of fate that there was this big bug that was the biggest smart contract theft in history up until that point, and it put the money into this convenient box where it would just stay conveniently locked for 35 days, wherever one could stare and look at it. Oh, yeah. And the soon after this, there, were A call is happening between core developers and the proposal to remedy the situation with a blockchain fork came into play. Right. So basically what happened here is the there was a blockchain fork and emotional issue for this community. Yeah. So why is this so? Well, I guess first of all, it is I know exactly. So explain what what would happen. So, in general, a blockchain fork is on normal process, right? You have an upgrade and the developers of the Ethereum clients implement code that basically says after block number 4370000 stop processing blocks according to the old rules start processing blocks according to the new rules which have extra features attached and

Eric Weinstein 1:07:44 were blocks are just sent

Vitalik Buterin 1:07:46 packages of transactions. Yeah, okay, and B's and so ever before this sub, I know these code patches are formally proposed, there is this month period of many months long period of deliberation where changes are proposed people discuss them people talk about them. And generally it's agreed that these changes are good. And so people just go and download the code. And because everyone's downloaded the code, the blockchain after block 4370000 follows these difference in veterans are

Eric Weinstein 1:08:19 very warm and very human processes. Yeah, whole logic of a machine.

Vitalik Buterin 1:08:23 Exactly. And

so, the Dell fork, it was also a fork. It was also a code change implemented by the developers of the clients that is in was pushed out through a new version of the different clients that people could download. And users went ahead and voluntarily downloaded. And it would basically change the rules of the blockchain, except instead of changing them permanently, it would only do what a single one time change, and the single one time change basically said during Block 11920000 before processing any transactions, take the ether that stuck in the this child contract and move it into another contracts that could then basically refunds it also the victims. And so this was a very kind of manual intervention, right? It basically says like, we all agree to run code that just irregularly takes us money and just reassigns it to this other thing. So

Eric Weinstein 1:09:29 it's very weird because, you know, we always think in like a sci fi movie that something that you think is human would rip off its mask and reveal itself to be a computer. And this is the reverse. Exactly. pewter face is ripped off revealing humans behind this this technological stack.

Vitalik Buterin 1:09:49 Yes. And, I mean, ultimately, like people talk about head of blockchain immutability, and like this is this idea that basically you're not supposed to do this. sort of thing. And

Eric Weinstein 1:10:01 where does that supposed to come

Vitalik Buterin 1:10:03 from? Exactly. So like there is there's definitely a sense in which it exists technologically, because like actually pulling off one of these forks is incredibly hard. And for example, if it was not the case that the money was conveniently stuck there in one, nice little azureus for 35 days, it would basically not have been possible to do it right. Because when as soon as you announced this protocol change that says we're going to take money out of here, put it in there, the attacker could just move the money from there to a different address and basically play this cat and mouse game and the attacker could win, but sometimes there is this possibility where you you absolutely can just like do these interventions and you can just decide to stop writing this code and start running this other code. And the only reason why this is not done more frequently, is basically because there exists these norms right in their existing norms in the blockchain community of law exam fear the researcher, I mentioned before And if calls them suppose ally, and like named after Nick Sabo and Nick's Apple actually dislikes the moniker Sabo is a lot but like it is a pretty accurate representation of kind of his beliefs, which is and the beliefs of many in the crypto community, which is basically that, like, even though it technically is code run by humans, we should act as though it is code not run by humans. And like because it is digital gold, right? Gold is not run by humans, gold is gold. And so if we want to make something that is like gold, then even though we're unfortunately stuck with this thing, run by humans, we should like try as hard as we can to pretend it's not. And like this was the ideology of a lot of people in this space. And the Dell fork very much went against this ideology. And so like, even though in my opinion, like having norms that you can't just like, go and edit whatever you want is valuable, but like when so much such a large fraction of the ecosystem is at stake. It's worth rethinking things. But like other people were, and if even more rigid in this regard. And so there was this kind of split in the community. And a portion of the community actually did not download the updates, right, a portion of the community did not download these code patches and implement the fork. And they just said, we will continue running our own our old chain. And the old chain has since then been called a theorem classic, and it runs to this day.

Eric Weinstein 1:12:25 This is a fascinating Civil War, get F

Vitalik Buterin 1:12:28 in essence, yes.

Eric Weinstein 1:12:30 And what I get out of this is that there's this very weird thing, which is that people get very attached to ideologies. And then they come to understand why the simplistic version of that ideology can't possibly work in a warm human system. I watched this, if you ever gone to this festival called ephemeral, which is sort of Burning Man on the water, that was

Vitalik Buterin 1:12:54 part of it, and I got invited to it, but I haven't had the chance to go yet.

Eric Weinstein 1:12:58 So it's kind of a libertarian. Waterworld in the Sacramento Delta. And what was interesting is that one year in order to come to the festival, you had to have a lecture and you had to agree that you would receive the lecture because of problems that had happened the previous year. And you realize that these libertarians were being forced to invent governance, and rather than just anarchy, you had to have some organized system. And so one of my questions is, is that is that dream of escape from the heavy hand of government. Effectively, not something to be pursued inside of crypto space for the most part because we realize that it is going to require governance and that we can't figure out a way to turn this into a completely cold and methodical process.

Vitalik Buterin 1:13:52 It depends on which version of the dream you subscribe to,

like the if the version of the dream you subscribe to was the dream that says We can finally use algorithms to like, basically completely eliminate human's ability to interfere in things than,

like,

if your goal is to see that enforced 100%, then like, no, you're not going to get that. If your dream is that you dislike how governments have hit existing governments and monopolies of violence have hegemony over this social function of coordination and enforcing structures of rules and you want there to exist an alternative, then, like that's something that we can talk about.

Right. So, like,

if the if the dream is to augments? Yes. And, I mean, I'd argue that the blockchains have a very necessary role now, especially kind of given modern kind of political trends work. There basically is no single, traditional political body that's accepted. trustworthy by the entire world and it doesn't look like there's going to be one. But like if your dream is to, and if completely over overturn things and have like some simplistic notion of digital property rights as the only thing that governs behavior, then that's something that they,

you can try for, but you're not going to succeed.

Eric Weinstein 1:15:19 Let me try something else with you that I'm curious about. You and I are both plugged in to this weird alternate world that thinks very differently. And I had Andrew Yang, in that chair, and you saw that episode of the show before. Some people call this neuro divergence that this is a non neurotypical world. And I would say that both you and I exhibit some indicia of not thinking along standard lines. The thing that occurred to me is that you brought up slate star Codex, which is this website that is extremely influenced In our shared world, and I was thinking about the difference between slate star Codex and CNN in terms of sense making. Is there any way in which the Ethereum world can create a counterweight so that the neurodivergent can rest the stranglehold that seemingly the neurotypical institutional world seems to have on sense making at scale? Like, is there a way of promoting another blog in this world would be like less wrong? There are particular thinkers that I think of as being very important, influential, I think you've given to Aubrey de Grey and elites or yudkowsky. There's like this very different world that isn't well known. And in part I've used podcasting is like pirate radio, which is the phrase I keep, or some is that because you're rushing Yes. What can we do potentially using your technology to even the playing field between corporate sensemaking. And this kind of homebrewed sense making, it seems to me to be of an infinitely superior level. Hmm, well, not infinitely but quite superior.

Vitalik Buterin 1:17:17 Yeah. So I think like, once again, there's kind of two aspects to kind of blockchain that I think are equally valuable here. One is the technology itself and then the other is the existing community around the technology and mean with the tech with the technology itself. I mean, you can try to like create institutions for you even things like funding like podcasts, for example. And like even like things like the kind of get going grants quadratic voting, for example, it would be potentially a great way to kind of funds media organizations that avoids the pitfalls of both Say a present day media which is funded by some combination of advert of like advertising and like horrible clickbait incentives. And at the same time, avoid the pitfalls of like, basically sent essentially controlled media and then create a third alternative. So and like it doesn't even have to be quadratic voting, it could be some other kind of mechanism for funding and blockchains could be used as a base layer for that. There's also the blockchain and community as a group of people who care about the many of these kinds of ideas. And I mean even a lot of a theory and people are definitely and swayed star Codex adjacent. And I feel like I've tried my best to kind of bring these worlds together and get them to talk to each other. In lien, sometimes it is a challenge because there's ways in which they're similar and there's a lot of people who are in both and There's also ways in which they're sometimes different. But those, those differences can be a good thing.

Eric Weinstein 1:19:07 Yeah, I guess I'm concerned that in our we're coming up on an election in the US, hmm. And I view fox news in the New York Times, and CNN is like watching professional wrestling. It's got a very clear narrative structure before the facts even come in.

Vitalik Buterin 1:19:27 Yeah, this is this is actually one of the things I've only really started noticing, maybe in the last like, one to two years. Like it's narratives are something that like, don't seem like you're there when you're fully inside of them. But once you kind of step outside, and you start seeing that, like, wait, these people are missing something, and they're making predictions that turn out to be materially incorrect. Like,

Eric Weinstein 1:19:54 no, there's no memory, like there's no

Vitalik Buterin 1:19:56 cost and yeah, yeah, you want to there's no accountability. at all, then it's something that you just actively start thinking seeking out how to move beyond. Yeah, you know, I think figuring out a better funding model for media organizations in general seems

Eric Weinstein 1:20:16 to me in some ways, what I'm concerned about is that something like podcasting is almost a public good. And so the ad totally

Unknown Speaker 1:20:25 a public good.

Eric Weinstein 1:20:26 But advertising is the one thing that right I keep, I call it the business model of last resort. Yes. And we are going with an ad supported model, because I don't want to disguise we were somebody who offered to endow the podcast, not not my employer. And I decided against it because I think what I really want to do is to try to figure out how to improve the business model. We've talked about a couple different variations on advertising, in order to make sure that content reversal but very sensible and level headed people can weather the storm that the big problem that I keep seeing is that advertisers pull when there's a coordinated campaign to say, drop that program or else Yes. And there's a need for something like the blockchain or smart contract to make sure that you can't silence people who are speaking decently, just because they've pissed off a very large activist community. Right. So, do you see any way in which the blockchain for example, like I might give up advertising, if I could figure out a way to fund not only this program, but allied programs?

Vitalik Buterin 1:21:43 So in 2011, when I was starting Bitcoin magazine, I yeah. Well, it started off with like with this one anonymous person whose name I'll never know who will aside from T by his internet handle, and who was just paying The five Bitcoin which back then was $4 per article to write articles for him. And I mean, this was five times lower than the minimum wage, but I loved it because it was the higher highest wage I've ever had. And eventually, despite paying me five times less than minimum wage, I Kiba ran out of money. And like he's told me, hey, maybe Bitcoin week, we will have to shut down. And I came up with, with this business model that actually ended up saving it for a few months, and basically saving it all the way until I got rid of poached by Bitcoin magazine. And the business model is basically, I write two articles a week, and we'll publish the first paragraph of each article, kind of publicly. And we'll say the rest of these articles is kind of hidden for ransom. And here are some Bitcoin addresses. And if people can collectively come together and pay 2.5 BTC to these Bitcoin addresses for everybody. Yes, then it's nice. Yeah. And it actually worked well and it actually started breaking And like much more money than Kiba had paid before. So it's not saying like that precise model is gonna save.

Eric Weinstein 1:23:08 It's a clever, it's a clever exploit. Yeah,

Vitalik Buterin 1:23:10 exactly. And like, to me, more clever experiments as like what smart contracts are all about. So like, let's try lots of different things. And we're gonna have come upon some steps forward that are interesting.

Eric Weinstein 1:23:26 But I'd love to have you come back and talk to us about other things that other points. But let me just close by asking you a couple of questions about the mysterious origins of decentralized computing the blockchain and all of this stuff. Sure. What the hell? Why don't we know who Satoshi is at this point, where Satoshi seemingly came up with the first really viable version of this this idea, huh? We can prove that. Yeah, I guess those have been Those blocks have never transacted that, that are under satoshis control one would think. Yeah, and that's a very mysterious origin story.

Vitalik Buterin 1:24:10 Yeah. It surprises a lot of people.

Eric Weinstein 1:24:13 Does it surprise you?

Vitalik Buterin 1:24:16 It does. I mean, it's like there's definitely not many people that have managed to stay anonymous kind of through that level of prominence. Like even like silk road does kind of first big round of crypto anarchist outlaw project on top of Bitcoin like after about two years, Ross Ulbricht got caught. And then the tools for just continuing to look at things that you say until eventually you slip up and you use some word word patterns that match like word patterns that you used under your name and then you correlate things like it's difficult to get around like I've

Eric Weinstein 1:24:55 unabomber got away with this for a long time. The yeah The Citizens Committee to investigate the FBI that pulled off this amazing heist in 1971.

Vitalik Buterin 1:25:05 So in Ted wrote his stuff in the 1970s. Right? And that's also 19. Seven, you know, saying, now we have, we have the internet and everyone's stuff is on a law is publicly available. We have machine learning, we have statistical tools.

Eric Weinstein 1:25:21 Do you think it's well known who Satoshi is within a group that doesn't want to talk? No.

Vitalik Buterin 1:25:25 So I am I think the I mean, there's high uncertainty about this, but I think that it's it's very likely is that the Satoshi is one person.

Eric Weinstein 1:25:40 You think that he is one person?

Vitalik Buterin 1:25:42 Yeah. And then there isn't some, like a theory grants conspiracy theory. I think you know, Satoshi,

Eric Weinstein 1:25:50 not that. You know, who's Satoshi is. But do

Vitalik Buterin 1:25:53 you think I think it's someone I know personally. Yeah.

So if I had to pick one One person and the and

Eric Weinstein 1:26:03 I'm not asking you to out that. Well, you can say

Vitalik Buterin 1:26:05 yeah, and I will say it. It's like, it's not an uncommon opinion if I if I had to, like bet my life on one person who helped me, basically because and how was around in the early days, he clearly understood what was going on here clearly participated since the beginning. And he also died at the exact time basically that she disappeared. And so there's a lot of these kind of coincidences in his favor, but then he's the one person I bet on if I had to bet on someone, but I'd also bet against him like it's well under 50% God, so it's a pretty good caper. Yeah. And there's, there's definitely a significant chance that it's like someone who's still in the in the crypto space somewhere that I've met at some point. Or it could just be someone we have never met and never will. He He's done a really good job, leg. Even just kind of setting himself up as this kind of perfect role or are they? Yes, yes and no. Yeah, she is. She really like, impressed a lot of people.

Eric Weinstein 1:27:15 It's pretty, I find it very inspiring. One of the great intellectual feats of our time, would have anonymous authorship. And the only story I know that's comparable to that is this bizarre break in story where the there was a woman I believe, named Judy fine gold, who was determined to take the secret to the grave. The other people in the conspiracy, left the conspiracy after the statute of limitations had run out and they started talking and then her perspective, as we all agreed, we were never going to mention who did it. There's some desire usually, to get caught and an urge to purge.

Vitalik Buterin 1:27:55 Yeah, well, that does make it more likely there's one person right conspiracies get exponentially harder, the more people you add. That's true.

Eric Weinstein 1:28:05 It's been fantastic having you here, I want to let you know that you're welcome to come back and to talk about things that are unrelated to aetherium and blockchain and crypto, because I actually I have to say I found very inspiring. Your attempt to use this platform to rethink what can economics be repurposed to do and I think that that's an unheralded potential killer app for your your program.

Vitalik Buterin 1:28:31 Thank you. It's been it's, it's been good to be on here.

Eric Weinstein 1:28:34 Okay. You've been through the portal with Vitalik Buterin. Thanks for joining us. Please remember to subscribe wherever you listen to podcasts and to check out our YouTube channel. And to subscribe there and click the bell for more episodes when they become available. Thanks for joining us.