A Beginner's Visual Guide to Blockchain

[Music] all righty everybody we got a really special episode for you this Friday I'm asking for a friend but I'm gonna do a bit of a Mia culpa here because this should have been our first episode Ash I up we got way too deep gen so we're pulling it back and we're gonna go into the fundamentals of blockchain Technology this is an amazing piece that Ash and Anders brownworth gave a couple years ago Ash you know I know this is one of your favorite videos but uh mind teeing it up just a bit for us yeah that's exactly right Nico everything you said uh this is an important video for me because it played an incredibly important role in my own development in learning about and understanding blockchains Anders had done two of these uh demonstrations visual demonstrations for how blockchain worked on YouTube that I actually saw in 2017 and for me this was kind of the aha moment where I actually understood how blockchains work just by watching him physically walk through all of these steps in a way that was very visual so it was an incredibly uh powerful experience for me back in 2017. we asked Anders to come on real vision and do both parts together for the first time I ever for real Vision audience I was incredibly excited to get to do it and I'm incredibly excited uh to get to rebroadcast this because I think it's such an important piece of information for people who are really struggling to get their heads around this basic question hey I get it it's cool but how does it actually work well Anders has those answers absolutely so let's get right into it Anders welcome to real vision thank you Ash this is a pleasure it's such a pleasure to have you here you know Anders one of the things that I find so interesting about your demo is that very often when you ask people what a blockchain is they tell you what it can do they give you use cases they say you know Bitcoin is digital gold uh ethereum is a place to write smart contracts but they don't actually tell you what it is and what I find so fascinating about what you've done here is that your videos do something that I've never seen anyone else do which is to walk you through in a step-by-step way that's incredibly visual concept by concept the underlying technology for how blockchains work yeah I only learn visually so this is an outgrowth of uh having done the Bitcoin Deep dive and uh try to try to re-explain the basic idea behind it uh you know with pictures because that's the way I think yeah and I should say a little bit about your background you're currently principal architect at the Federal Reserve Bank of Boston you're a senior software engineer at Circle and way back I think in 2014 you co-taught the first blockchain class at MIT that's right I was lucky enough to be uh to be picked uh to do that it was uh it's it's amazing you know you go there and you've got you know 100 of the best Minds in the world and uh you're supposed to you know teach them something that they they don't know and it's in it's incredibly you know invigorating it's a lot of fun well I should say you've certainly succeeded in doing that and finally I should add if you enjoy this demo this walk through half as much as I do shout it from the rafters tweet it post about it tell your friends share it as broadly as possible I think this is something really special well thank you very much uh so if you want we can Dive Right In let's dive in great well so I think the the key is with uh blockchains there's only really two cryptographic techniques you have to understand to understand how blockchains work and we're gonna just quickly uh get a visual feel for how each of those work and this one right here we're looking at is called a Shaw 256 hash this is one of them right there looks like a bunch of letters and numbers together it's a actually a hex number and what this is is a digital fingerprint of whatever I type up here so I'm going to type something I'll type my name a-n-d-e-r-s okay well look at that uh you know some kind of you know uh seemingly random looking data but if I were to take this uh let's see first of all I should note that that starts with a 1 9 e a so let me delete what I wrote there and I'm going to type exactly the same thing and sure enough 19ea okay so anytime I type exactly the same thing here I get exactly the same hash out of it so in that sense the sha-256 hash is a digital fingerprint of whatever data I put in here now I can put uh you know I can put nothing I could put lots of data and you'll see every time I'm typing a key this is changing so you get the idea that this can be calculated very very quickly but no matter how much or little I put up here you're always going to get a shot 256 hash which is exactly this long right okay and importantly you're not going to be able to go backwards right you're not going to be able to start with this and just intrinsically know what was put in to get it you can't go in that direction but it's super easy to go in the other direction you can tell because that's how I type and it calculates it very quickly so I could put anything in here including like the Library of Congress and uh it would always come out to a hash that's just that long okay it's a critical piece of information you can go one way very easily and the other way is impossible so it only Moves In One Direction and whether you type in one character or the entire Library of Congress the hash always comes back the same length right right and and exactly the same it will always be exactly the same if you put in the Library of Congress in exactly the same order you'll always get exactly the same thing out of it that this is real time actually happening this isn't a demo this isn't a video this is actually the algorithm being calculated in real time as you see it on the screen yeah there there was uh somebody had released a shaft 256 hash uh implementation in JavaScript so I I stole it to make this that's how I did it um so yeah so that's a that's a hash you know not not very interesting I guess in in the sense that I can just type stuff and and know that I have the same thing that's you know doesn't seem all that interesting I'm gonna make what I call a block out of this okay so this I mean it looks very similar to what we were looking at before but instead of one text area now I've got three I've got one that I call a block we'll call this block number one I'll have an entry here I'll call I call a nonce we'll go into what that is later and then just some data let me type you know whatever data you want but basically this hash here this sha-256 hash is the hash of the concatenation of all this data so if you take all this stuff put it together you get that okay now importantly very importantly this is an unusual hash because it starts with four zeros in a row okay and completely arbitrarily I'm just going to say that that makes this block solved okay so what would happen Ash if I were to type something in this data area what's going to happen to this hash well that's going to change as soon as you start typing yeah what's the chance that it's going to start with zeros well probably ten thousand to one I guess right yeah exactly it's it's it's probably not right so if I type something it's going to violate what I call a hash I'm a solved block so I'm going to type something and sure enough it turns you know reddish meaning this is this is not solved so how could we solve this block right I could I could go here and I could put a number see this is my non-care and told you we'd get back to this this is uh this is what gives me a field that I can change that doesn't really affect anything else so I put a one there does it start with four zeros no well let's try two well let's try three you know as I'm going here I'm looking for one that starts with four zeros so you can tell I'm not getting it right so what we're doing right here is we're mining now I bet you wonder what this mine button does right well literally what it does is it starts at one just like what I was doing but goes all the way up and does it automatically and this is literally mining so I'm going to hit mine and there it's thinking for a little bit and it's going from starting from one and it's going to go up to whatever number it needs to get to to find a block that uh that hashes out to something starting with four zeros my my computer was taking a little bit of time for it but there we go had I gone all the way up to 71 000 whatever I eventually would have run across a hash that starts with four zeros uh and so what I'm demonstrating here is we have a block and we have done some work to satisfy what is essentially an arbitrary definition of what a solved block is and that is that it starts with four zeros right so that's it one of the things that I find really interesting about this is the way that you have this divided up you have a block you have a nonce you have the data and then you have the hash it's almost a kind of an arbitrary division uh from the perspective of mining but what makes the nonce as I understand it's so important is that you segregate the data out kind of as the payload you could think of it as uh perhaps an envelope and it's the thing inside and then you calculate uh the series of numbers going through them iterating through one by one until you solve for the hash that meets the criteria that we're looking for which in this case is four leading zeros yep yep that's exactly right yeah okay so then to to move on let me ask you what is this is a block what's a Block Chain well I have the benefit of having gone through uh your demo over a series of years but it has to do with the way these are chained together so show us exactly about how that works because I think this is really just the incredible aha moment that many people will have when they're watching this video yeah so this is how you uh chain blocks together I'm just going to make a chain of in this case here I've got five blocks these look just like what we were looking at before but interestingly I've added this previous what is previous well that number is this number is the previous blocks hash and this previous is this blocks hash right so you you know everything else is exactly the same if I change something here it's going to break this block right but what were to happen if I were to change something here it's gonna it's gonna change this hash right but that gets copied up to here so we're going to have two broken blocks right sure enough that's what happens so um we you you might say you know well that's not the end of the world we could just remind it right I could I could mine these two and then we would be fine right well as as we saw I'm going to fix that one I'm going to go back one more and I'm going to add some data here so now we have three broken blocks and now I'm going to say well if you were to mine it I just hit mine there and that thing is thinking well I went one relatively fast I hit this one I was taking a little bit of time and then this one right we could remind this blockchain and it would be fine it would it would satisfy our definition of what we call solved blocks in a chain right but the problem is the farther back we go the more of these you would have to fix okay so it takes it takes time to mine each of the blocks uh the farther back you go the more of that work you have to do and you know let's let's talk about this for a second right this is the work we're doing is literally the proof of work that you hear about in proof of work blockchains this is the work that they're doing so um we need some way to fix this right we have this problem because okay I did the work but how are you going to know that I've altered this chain that I've taken some data and I've chain changed it right how do you know well we can't really know we just know we have a solid chain here so what I'm going to do is I'm going to distribute this blockchain Okay so we've got exactly the same thing uh five five blocks but this is in peer a um we also have a prb right and there are five blocks in peer B and here is PRC right we have five blocks okay now how do we know let's say I were to change something I'll go back in time and change this block and I'm gonna you know remind it and uh you know I'm let's say I'm mischievous right I shouldn't be doing this I remind this block um interesting takes a long time uh and then I remind this block okay so when this completes I've got my altered chain right this is a problem um it's an altar chain but um it satisfied the criteria that we arbitrarily decided was signed which is those four leading zeros it does yeah yeah but we need to be able to detect that somebody has gone and and maliciously changed something here right so how do we know well getting back to the hash remember how it is a fingerprint of some data well this is actually a fingerprint of all of the data in this chain including the previous blocks because the previous hashes are copied up so literally all I have to do is check this right AEF ADF whatever is that the same as you know e4b no and here's another one that's claims it's e4b okay so who's right well democracy right we have this chain Pier a that says it's something and then two others that disagree so the majority wins and we just forget about this chain right so all of that work that was done was thrown away essentially yeah and this is such an important Point people frequently ask when they're new to this space well how do I know how can we know whether a particular uh computer that's telling us something on the blockchain in Bitcoin for example is reliable how do we know that people didn't uh kind of go in and and and Tinker around uh with some of the transactions and what you're seeing right here is a real-time live demo showing how you can have multiple peers on a network also called nodes that have different uh ultimate hashes which show that one chain has been changed it's really fascinating it's actually kind of a revolution in that for the first time in human history you can generate trust in a way that's decent centralized it doesn't rely on a single centralized actor a big Bank the Federal Reserve to say this is the source of Truth you can see it democratically happening uh in real time in this demo and I think that's just fascinating yeah so uh I should also note though that this is a very simplistic blockchain right we have five blocks here right now the Bitcoin blockchain is something like 680 000 blocks long so if you were to you know like one way to compare all the chains would be to literally lay out six hundred thousand blocks and check the first one is this one the same yes is this next one the same yes next one the same or you could just go to the last hash and realize that that is a a fingerprint of the entire that entire chain and compare it against any of the others right so the blockchain can get arbitrarily long billions trillions of blocks long and it will all always boil down to something that's this long and no longer it's so it's super easy to yeah so it's it's elegant I mean it's super easy to just instantly check literally terabytes of data petabytes of data in one number uh it's it's pretty neat elegant is a word that comes up over and over again when you hear people who really understand the math such as yourself or how this works I should say uh if you've heard the term Merkle tree I know it's a lot of complex cryptography and math behind it but this is really the basis for basically how you can take a hash of a hash of a hash and aggregate it so that at the end you can just look at one number and know that the entire chain is authentic yeah and that's actually a really interesting point right we we know that the chain is authentic or not we don't know what change was made right but it doesn't matter the only thing you care about is that you have the authentic one if there has been a change where it doesn't matter what the change was we're gonna drop it all right so a hash gives you a real easy way to do that now we've got a problem with this blockchain here right this is a blockchain uh and it's got some data area I can type whatever I want who cares right this is this is not valuable information I'm trying to save you know the the letter A you know that's that's not great so let's do something about that instead of that data area what I'm going to do and this is a blockchain just like we were looking at before five blocks long but the the data area I've replaced with what I'm calling transactions okay and this is just some amount going from some person to someone else and so it's transfers and there you have it now you've got a ledger that's right yeah uh but but importantly this is a ledger of transactions not a ledger of balances we are not saying John's balance is whatever we're just saying that some amount of money was sent from one person to another right and this is such a key concept I think for people who think about you know traditional accountancy uh this isn't a stock uh value it's a flow variable it's talking about what's just happened in terms of a transfer and this is a really also I think deeply fascinating and pivotal point in how blockchains work yeah these are showing changes of state okay it turns out computers are really good at calculating numbers very quickly so if we were to save the balances here it would really be duplicate information we can just say they had everyone had nothing to start with and then they got this money through through transfers um so that's that's how this goes and let me just you know just to nail the point home right if this is 2 700 some amount of dollars if I were to change that right it's going to break the block and this is very very important even if I were to change you know literally like one penny if I were to make this you know 64 cents it's going to break the blocks okay that's very important uh and now remember we also have peer B and C the whole the same thing we had before so we're we're going to essentially democratically figure out what the authoritative chain is just by you know checking who has what and counting up the the uh pointing to the one that has the majority as as essentially uh the winner but I've got a problem in my little system here I don't know if you can find it easily or not any ideas all right I think I see it but walk us through okay uh so where does money come from right how do I know that Rick here has 62 dollars to give to ilsa how do I know that you know this much money is in this guy's account for for that person uh you know by the way I don't know if you you know all these names these all come from a movie if you know what movie that is you get extra points um it's Casablanca that's right yeah each one of these there are different sort of movies um so uh so the the interesting thing here is we have no way of knowing like money just appears you know the money is just moving around that's that's great right but how we can't just have unconstruct I can't just like say uh somebody I make up gives Anders a million dollars that sounds like a great idea but it's probably not good in an economic system so we have to have a way to get money into this system okay and so in order to do this we are going to use what we will call a coinbase transaction and uh you know we'll zip forward to five here okay so I'm just going to add a new transaction at the top of the transaction stack called a coinbase and regularly every one block I'm going to release 100 to someone who well this happens to go to the person that has mined this block first okay so now we have a regular transmission of money right I create money in the coinbase so it's uh it's controlled and it oh it's always going to go to someone and then those people can then transfer the money so let's go back to the beginning of this chain first block here has a a 100 coinbase transaction goes to me I happen to uh have created this block happen to have uh solved this block but there are no transactions because I can't nobody has any money to send to anyone so there's just no transactions now the second block you'll notice that I'm the only one sending money it's all Anders Anders Anders because the the money uh you know I'm the only one who has money in the system at this point and if you add these up you'll notice that they don't go over 100 okay so it's just some basic economic you know truths that you want to uh you know have trust in right so that that'll be the economic role of this system so now as I go forward and you'll see that there are different people money is going from you'll notice that they were all given money previously right and the amount of money that they're sending is not more than what they got right okay and so if you sit here and you kind of go through all of them you'll notice it it does it does actually work um and uh you know we have uh you know an economic system here where transactions are recorded indelibly like if I were to change in if I tried to change the person's name right it's going to break the block they recorded indelibly across a bunch of peers there's prb and there's there's a bunch of peers out there and we're all agreeing on uh the the flow of funds it's interesting because most people have heard the term coinbase obviously because of the exchange and now you see where that came from and when you scroll back all the way to the first transaction uh this is the the Genesis block this is the creation of the chain that you're seeing here yeah that's right and and you'll notice there is no previous so we have this fake all zeros hash that we've put in yeah exactly this is the Genesis block and a matter of fact in in the code uh what you do is you you create the first block and you say okay this is this is the official first block this is the hash of the first block and that in that sense the first block in in public blockchains is very important because you base what you're going to follow on that um but that's all kind of hard set in The Code by the time you you get it right um yeah so remember I said that there were two cryptographic uh operations that you kind of had to have a sort of a feel for um there is another one that we're going to jump into here now all of what we've seen so far has just relied on this one-way function called a hash uh we have an issue though what if I don't want to put my name or my Identity or something there I want to I want to kind of you know step away from that somehow okay so the other cryptographic primitive that I want to introduce is this concept of public and private key pairs okay and I'm gonna be slightly hand wavy on the math behind this but I will show you the the the uh sort of the truth that it allows so this is a private key okay it's pretty pretty long one and from this private key is derived a public key okay that's that's this is you know many digits long right but you could be anything the one is a private key it's not a very good one because other people have thought of one before right uh you can you can just type whatever you want and that's also a private key it's probably not great because humans aren't very good at coming up with Randomness that's why I put this little random button all right I can press this random button a bunch of times and get a you know some value for my private key now a private key is literally just a number and as the name would suggest though it's a number that you want to keep private you don't want to ever tell anyone this number okay this would be like your email password right you don't want to tell people your email password however from this private key I derived this public key and as the name would suggest this is public like my email address I would want to give you my email address uh so the the math behind this as as I say you know you have to take it on uh you know on faith that that actually works but let me show you what this allows us to do let me just add also the the public key that you're looking at you see letters and numbers in it but that's really just a number it's just represented in hexadecimal base 16 uh this the short simple version of it is you can put more uh digits more representations of numbers into a shorter space so what you're looking at at the top and what you're looking at the bottom are both just numbers just expressed in a slightly different way yeah that's exactly right great Point um uh you know these these numbers can literally be hundreds of digits long so so you want to compress them if you can right so you can see them okay so let's look at the the way that this uh public private key pair can be used all right so what I'm going to do is I'm gonna I'm gonna make a message you know hello there just some message and this could be something that I um you know I just want to prove the authenticity of okay nobody really cares about hello there but we use it so here's my private keyword this is copied from that last that last screen 37a whatever it is this is my this is my private key and I am going to using this private key run it through some math that spits out a message signature okay so now this don't get confused about the uh sha-256 hash thing this is a signature of this data but it requires uh you know the original message to be exactly the same and something else okay so we'll see what that is if I flip over to my little verify screen and I take my exact same message and now the public key so this is something that anyone out there on the internet can do okay we can take the message that you've that you've posted and we can take your public key which you've told the world about and then you can send along the signature that we just made and you can run an operation called verify and sure enough that verifies all right you create a message you sign it with your private key and then you post that uh digital uh signature and then anyone who has your public key which is posted for everyone to read can verify that you in fact are the person who sent the message and that it hasn't been tampered with or modified in any way that's exactly right but only by using your public key they don't have to use your private key to figure that out and that is the core piece that the public private key pair enables you to do so as long as I haven't you know leaked my private key you you have high confidence well I'll just say you have absolute confidence that someone in possession of the private key presumably me has signed this message so now if I alter the message and hit verify it's not going to work right I'll fix that if I alter the signature right I'll make that a four that won't work so you get the idea if anything is out of place it's going to notice that okay so now here is the here is how we're going to bring this into uh our our blockchain what I'm going to do is instead of the message being you know I typed hello there instead of that I'm going to say the message is a transaction so does is literally like I'm saying twenty dollars goes from some public key mine to some other public key yours okay and I am using my private key it's the private key behind my public key I will use this private key to sign this message which is just the concatenation of these three things up here so I'm going to hit sign and I get some message signature there great now how do you know that you got paid right well you verify so I'm giving you the message it says twenty dollars is going from my public key to your public key you already have my public key because it's in the message all you need to do is check this stuff against the signature that I've also attached and you'll find out that it works now you could just steal you know a hundred dollars from me right no you can't I pose the transaction that I want to send I sign it and then it's valid okay so if we were now to take this concept and place it on the blockchain suddenly we don't have that problem where it says Anders got this amount of money and uh you know transferred it to Ash or whomever right so let's look at block number five here again so so it's got some kind of announce and here we are the same this is getting kind of folded over a little bit but it's you see that this is a coinbase transaction to some public key whose is that I don't know can that one person have many public Keys yes so this is a set of transactions that are being posed from some public key to some other private key and importantly also in the blockchain I'm adding the signature that proves that I did that okay so watch what happens if I change this to eight dollars of course it breaks the block the block is no longer valid but also notice the signature is red the signature doesn't check out anymore so we have we have multiple things we can check for correctness in these blocks to make sure that um you know the money the money flows uh properly this is you know this gets to the the Bitcoin concept of a pseudonymous uh blockchain so we're we're moving money around between public keys and we're just requiring that the people behind them have signed the transactions correctly and if somebody goes in there and tries to change seven dollars to eight dollars it's not going to work it's gonna break so only the people that have the money are allowed to you know okay will create a signature that will be accepted we'll create a transaction that will be accepted so in that sense this whole system operates as a push uh you know a push Financial system people that have money may push it to to others and importantly right all you have is a private key all you have is the permission to push the money you actually don't really have the money it's just that no one else can push it but you right um so that's that's sort of the that's sort of the other way uh to think about it now one last thing and then and then and then I'm I'm done here but uh there is we do have a little bit of a problem and that is if you give me seven dollars you could just take the original signature and Repose exactly the same transaction again and again and again and you keep getting seven dollars and you'll notice that that's what I've done I've got seven dollars here and then seven dollars here to the same keys well what I've also added to this is the sequence number and I'm going to require that the sequence number is always unique always stepping up by one so the sequence number over here is two that makes this signature actually different than this one so you can't just replay the same transaction over and over so that's uh that's a blockchain you don't you didn't have to learn about encryption there is no encryption it's just two uh cryptographic Primitives a sha-256 hash and a uh the public and private key pair uh with signing so that's uh that's how blockchains uh work internally now this is a bit of a you know a a demo right we're not I don't have many many nodes I'm doing very simple mining you're seeing we're looking at four uh you know zeros in in in Bitcoin you know that's 10 15 18 zeros in a row so these are not numbers that you can come by easily right uh it's not really gonna compute on my laptop so this is somewhat of a toy blockchain also the Bitcoin blockchain uses utxos which is uh you know my little example here is more like an account model right um there's some you know kind of you can definitely dive deeper than this but I don't think those those uh you know differences are quite as important as uh sort of highlighting these so that's that's how I got to it yeah I mean the extraordinary thing about this is you can build up an understanding of how this works block by block pun not intended as you walk through this demo and the Really incredible thing about it honors is you've created this you wrote this down so it's now out there on the internet anyone can go up and play with it and do exactly what you did by changing transactions entering values and actually see physically touch how it works and you know go through those steps just as you did yeah this is uh actually up on my website you can just go there and and uh try you know messing around and changing numbers and you know seeing things break and stuff like that uh this is all available I actually open sourced uh the data and uh the code behind this and a bunch of people have translated it to a bunch of different languages um but the uh the the origin story of this thing is is I think interesting um back in uh 2014 MIT asked me to to teach this class and it happened to be starting in two weeks and oh by the way we don't really have a syllabus yet um so would you do it and so I said first yes and then I just stayed up all night trying to figure this out I I when I was done with teaching that semester I I didn't feel like I actually transferred the information appropriately so I started working on this demo um I ended up presenting it at the Federal Reserve Bank of Boston uh strangely enough at a hub week uh uh demo and uh I honed it over time at uh Yale and um a lot of classes at MIT a lot in the Sloan school and eventually I got it to a point where I could actually just explain just the important points it took about two years and then I was in my kitchen and I recorded it on my iMac as a movie and I thought I should put this on YouTube so I did and I I wasn't really quite prepared for the response but it just kind of has an interesting backstory to it yeah you got over a million views of this just pretty extraordinary yeah I I I don't know where that came from uh it it it just trended I think it was on Hacker News one one day and it it just kind of took off from there by the way I should say I was absolutely mesmerized the first time I saw this but I didn't fully understand it it took me days and I think weeks of going and watching the video again and again and that's pretty the amazing thing about video I think is you can see something and be like wow that's really cool but I don't quite understand it and you watch it two or three times and somehow almost magically you know by the fifth or sixth time you watch it or the second or third time if you're a lot smarter than I am you go I kind of get this it's pretty amazing did you ever mess with the uh the uh the demo on the web at all or was just video oh yeah absolutely I went back and forth between watching the video and okay going out the demo experimenting doing your data watching the video again and slowly uh but surely after I kept playing with both uh it started to sink in and you you have these little kind of epiphany moments uh and then what was interesting is like I would understand it while I was watching it and then I'd try and explain to someone because I was so excited and I'd get completely goofed up and realize nope I gotta go back and watch it again it definitely takes time these are some really really big ideas and some of the smartest people in the world uh some of the smartest people in finance have struggled to get their heads around this yeah it's uh one of those things that it's really a basically a complete rethink you know this doesn't come out of uh uh you know a computer science program it's very multi-disciplinary there's there's economics there's you know basic human greed there's uh cryptographic stuff and it's all kind of put together in an industry very interesting and unique way and it requires you to Deep dive everybody says you know how did you go down the rabbit hole well you have to go down the rabbit hole you cannot just take it all on faith at this stuff you know works because you you won't understand why we can be completely confident that you know the history has not been changed this is why we can completely like uh you know be comfortable or you know to some degree in in uh defy and how smart contracts work because they're just written literally right into the blockchain um so you you have confidence that they won't be altered you don't have confidence that they don't have bugs but you do have confidence that what it has been written will not be altered right I should say uh for real Vision subscribers I actually did a deep dive on some of the underlying math that we're talking about here uh talking about the power of Randomness how difficult it is uh to break these uh passwords with your uh former MIT colleague Silvio Macaulay uh so if you're interested in the Deep dive uh nerdiness on the map please do go check out that video absolutely it's uh it's really super fun stuff I mean it's it's captivated me for for 10 years at least so uh I'm submitting so Anders we've walked through this entire demo uh end to end both demos together for the first time ever really extraordinary work that you've done here give us some key takeaways uh for the audience if if you could because this has obviously been a lot of information what are some of the big picture things that people should leave this conversation with while my hope is that I haven't confused you right the the technology uh is actually a bunch of very simple building blocks put together and you can get it you can understand the stuff it is reachable um you don't have to delve into the deep math behind it but it is reachable it is just a complete rethink so the important things are uh I would argue that there is a new trust layer on the internet uh enabled by these Technologies um and uh that allows us allows programmers to do really new and interesting things but in order for you to have confidence about that you kind of have to have us like a seat of the pants feel for like this is why I am confident that this information won't change or something won't just be you know swapped out from under me uh it's it's a you know a and both an economic system them in the sense that my miners uh out there on the network are being incented by receiving that coinbase transaction uh and in uh in some networks fees as well uh to create these blocks and you know if if someone decides to go Rogue they essentially risk wasting all of their resources to create an alternate view of the universe that nobody follows so um it's a network effect kind of a thing the more you get the more nodes there are the more hashing power you have just trying to find that you know needle in the haystack uh uh uh nonce that's makes that block solved uh the more that there is the more confident you are that this is you know not going to be subverted out from under you um so yeah those are the takeaways I think yeah you were saying earlier this idea that it's a multi-disciplinary approach one of the things that's so interesting about this to me is how it just Builds on layer after layer of Technology you know the underlying TCP that runs the internet obviously you need that as the very base of your stack but also the kind of peer-to-peer aspect of this um you know it's really interesting we think about the the music sharing software uh that came out in I guess it was the late 90s now hard to believe so long ago um but that idea that you have different peers on a network that can interact with each other and then you build layer upon layer until you get this incredible system uh in the form of Bitcoin and some of the other coins that we have out there uh you know all based on these Technologies like tcpip and the peer-to-peer network of Napster public key cryptography I mean it's just such a fascinating agglomeration of things put together and what you have at the end is the ability to share uh value to share money Financial transactions across the web globally in a trustless way yeah I think the the word is elegant and this is why it's so captivating you sit there and and look at this and you think these completely disparate uh cryptographic things create this just this elegant thing that hangs together and gives you this brand new capability that you know this is a new sort of a primitive that we haven't had as programmers more than you know 10 or 12 years so it's it's quite you know quite compelling yeah well if you're anything like me I certainly didn't get it the first time I went uh and watched the video so uh please feel free to watch again and again and by the way I should say if you have friends and family who you've tried to explain this concept to uh but gotten caught up as I have uh you start to get into and you go oh wait a minute maybe that's not quite right please share this video so we can get Anders great work out to as many people as possible so that we can share the understanding uh and the passion that I and you and so many others have for this technology yeah thank you please do um don't get lost in the weeds nobody nobody likes somebody trying to explain something if they're lost in the weeds uh I've I've lost in the weeds too much so hopefully it helps honors thank you so much for joining us I wanted to do this conversation for years and I'm just so excited to get this information uh this demo that you created out to the world to an even broader audience of in the millions you've already had see this work well my pleasure and thanks for uh Distributing it it's uh I think it's a very fundamental stuff we all should be aware of yeah thanks for joining us and thank you for watching everyone I hope you enjoyed Andres work uh a tenth as much as I have thanks a lot Ash it's been a couple years since I watched this but God it just blows my mind every time it really speaks to how some of these um you know these Technologies really have to be seen on the base layer to understand what were your key takeaways from it well that's exactly right Nico you said it perfectly there you have to really see it at the base layer to understand how it works and I think once you understand how it works it gives you a sense of how this is truly a decentralized technology uh that drives things in a way that doesn't require governments centralized institutions corporations uh to come to that consensus to come to that trust layer uh you know my biggest key Takeaway on this was if you didn't get it all the first time don't worry I didn't either I think I had to watch it three four five times before I really understood it but just the first time there was this kind of like mind melt effect where you get this sense of oh man this is something that's just incredibly powerful so I would advise if you didn't understand it go back watch it again there's certainly no shame in it God knows I did it absolutely and um it really is interesting because everything else we've talked about on this Friday series of asking for a friend relies on this base layer we just saw so thank you so much Ash um we'll see you uh next Friday for another episode of asking for a friend and we'll be back next Monday with our regular scheduled interviews thank you for watching everybody [Music] foreign

Channel: Real Vision Crypto

Views: 1,773

Keywords: Crypto Investing, Real Vision Crypto, BTC, Crypto, Ethereum, Bitcoin, Blockchain, Digital Assets, Alt Coins, Crypto Asset, Crypto Adoption, Altcoins, Decentralized Finance, DeFi, raoul pal, real vision, web3, ETH, crypto crash, crypto regulation, ash bennington, jay janer, crypto hedge fund, crypto analysis, ethereum classic, paul guerra, elaine ly, laura shin, cryptopians, crypto craze, eth analysis, ethereum merge, eth 2.0, bitcoin proof of work, proof of stake, defi hack

Id: _99r5u7zVIk

Length: 48min 20sec (2900 seconds)

Published: Sat Jun 03 2023