Vitalik Buterin: Ethereum, Cryptocurrency, and the Future of Money | Lex Fridman Podcast #80

the following is a conversation with vitalik butyrin co-creator of an author of the white paper that launched a theory 'm and ether which is a cryptocurrency that is currently the second largest digital currency after bitcoin aetherium has a lot of interesting technical ideas that are defining the future of blockchain technology and metallic is one of the most brilliant people innovating in the space today unlike Satoshi Nakamoto the unknown person or group that created Bitcoin Vitalik is very well known and at a young age is thrust into the limelight as one of the main faces of the technology that may redefine the nature of money and all forms of digital transactions in the 21st century this is the artificial intelligence podcast if you enjoy it subscribe on youtube review it with 5 stars an apple podcast supported on patreon or simply connect with me on Twitter Alex Friedman spelled Fri DM am as usual I'll do one or two minutes of ads now and never any ads in the middle that can break the flow of the conversation I hope that works for you and doesn't hurt the listening experience quick summary of the ads to sponsors masterclass and expressvpn please consider supporting the podcast by signing up to master class and master class comm slash Lex and getting expressvpn at expressvpn dot-com / Lex pod this show is sponsored by master class sign up at master class comm / Lex to get a discount and to support this podcast when I first heard about master class I honestly thought it was too good to be true for $180 a year you get an all-access pass to watch courses from experts at the top of their field to list some of my favorites Chris Hadfield on space exploration Neil deGrasse Tyson on scientific thinking and communication will write the creator of SimCity and Sims on game design I love that game Jane Goodall on conservation Carlos Santana one of my favorite guitarists on guitar Gary Kasparov on chess obviously I'm Russian I love Gary he Daniel Negreanu on poker one of my favorite poker players also Phil Ivey is gives a course as well and many many more Chris Hadfield explaining how Rockets work and the experience of being launched into space alone is worth the money by way of advice for me the key is not to be overwhelmed by the abundance of choice pick three courses you want to complete watch each all the way through from start to finish it's not that long but it's an experience that will stick with you for a long time I promise it's easily worth the money you can watch on basically any device once again sign up a master class comm / flex to get a discount and to support this podcast this show sponsored by expressvpn download expressvpn comm / Lex pod to get a discount to support this podcast I've been using expressvpn for many years I honestly love it it's easy to use press the big power on button and your privacy is protected and if you like you can make it look like your location is anywhere else in the world I might be in Boston now but I can make it look like I'm in New York London Paris or anywhere else this has a large number of obvious benefits for example certainly it allows you to access international versions of streaming websites like the Japanese version of Netflix or the UK version of Hulu as you probably know I was born in the Soviet Union so sadly given my roots and appreciation of Russian history and culture my website and the website for this podcast is blocked in Russia so this is another example of where you can use Express VPN to access sites like the podcast that are not accessible in your country expressvpn works on any device you can imagine I use it on Linux shout out to a bunch of Windows Android but it's available everywhere else too once again download it at expressvpn comm slash Lex pod to get a discount and to support this podcast and now here's my conversation with vitalik uterine so before we talk about the fundamental ideas behind a theory I'm a cryptocurrency perhaps it'd be nice to to talk about the the origin story of Bitcoin and the mystery of Satoshi Nakamoto you give a talk that started with sort of asking the question what did Satoshi Nakamoto actually invent maybe you could say who is so Toshi Nakamoto and what did he invent sure so Satoshi Nakamoto is the name by which we know the person who originally came up with Bitcoin so the reason why I say the name by which we know is that this is a yam anonymous fellow who has shown himself to us only over the Internet just step by here first publishing the white paper for Bitcoin then releasing the original source code for Bitcoin and then talking to the very early Bitcoin community on Bitcoin forums and and if interacting with that but helping the project along for a couple of years and then at some point in late 2010 early 2011 he disappeared so Bitcoin is a fairly unique project in how it has this kind of mythical a kind of quasi godlike founder who just and if pops in he did the thing and if I disappeared and we were somehow just never heard from him again so in 2008 was so the white paper was the first do you know the white paper was the first time the name was actually appears that oshina come on leave so so how is it possible that the creator of such a impactful project remains anonymous that's a tough question and there's no similarity to it in history of technology as far as I'm aware yeah so one possibility is that it's healthy knee because healthy knee was and have also active in the Bitcoin community and as halfa Nia in those two beginning years and how is health any maybe I see you one of the people at the end of early cypherpunk community he was the computer scientists computer scientists cryptographers people interested in like technology Internet freedom like those kinds of topics it was the correct that that rather he seemed to have been involved in either the earliest or the first transaction of bitcoins yes the first transaction of ich werde was between sister was she had a health in him do you think he knew who Satoshi was if he wasn't Satoshi you probably know how is it possible to work so closely with people and nevertheless not know anything about their fundamental identity it is this like a natural sort of characteristic of the Internet like if we were to think about it because you and I just met now there's a there's a depth of knowledge that we now have about each other that's like physical like my vision system is able to recognize you I can also verify your identity of uniqueness like yep this like it's very hard to fake you being you yes so the internet the Internet has a fundamentally different quality to it which is just fascinating yeah I know definitely interesting as I definitely just know a lot of people just by their internet and next to me when I think of them like I see their internet handles and one of them has enough profile picture as this kind of face that's kind of not quite human with about your hand of psychedelic colors and at and when I visualize him I could just visualize that that's not an actual face yeah you are the creator of the second well he's currently the second most popular kept across e aetherium so on this topic if we just stick on Satoshi Nakamoto for a little bit longer you may be the most qualified person to speak to the psychology of this anonymity that we're talking about mm-hmm like your identity is known like we I've just verified it but from your perspective what are the benefits in creating a cryptocurrency and then remaining anonymous like if I can psychoanalyze Satoshi Nakamoto is there something interesting there or just a peculiar quirk of him it definitely helps create this kind of image of this mutual thing that doesn't belong to anyone and then you've created a project and because you're anonymous and because you also disappear or as unfortunately happened to help any if that is him he ended up I think dying of abou Gehrig's disease and he's in a cryogenic freezer now but like if you pop in and you'd and then you created an in you're gone and all that's remaining if that whole process is the thing itself then like no one can go and try to and if interpret any of your other behavior and try to understand like oh the like this person wrote this thing in some essay ID at age 16 where he expressed particular opinions about democracy and so because of that this project is like is a statement that's dragons you this specific thing instead it creates this environment where the thing is what you make of it and it doesn't have the yeah right the the burden of your other idea political thought and so on so so now then we're sitting with you do you feel the burden of being kind of the face of aetherium I mean there's a very large community of developers but nevertheless you know is there like a burden associated with that there definitely is this is definitely a big reason why I've been trying to kind of push for the etherium ecosystem to become more decentralized in many ways the just encouraging a lot of kind of core cerium work to happen outside of the etherium foundation and if expanding the number of people that are making different kinds of decisions having multiple software bill notations instead of one and all of these things like there's a lot of things that I've tried to do it too and we've removed myself as a single point of failure because that is something that a lot of people criticize me for so if you look at like the most fundamentally successful open source projects okay it seems that it's like a sad reality when I think about it is it seems to be that one person is a crucial contributor often if you look a lioness from from for Linux for the kernel that is possible and I'm definitely not planning to disappear that's an interesting tension that projects like this kind of desire a single entity and yet they're fundamentally distributed I don't know if there's something interesting to say about that kind of structure and thinking about the future of cryptocurrency does there need to be a leader there's different kinds of leaders you know there's there's dictators who control all the money there's people who control organizations there's a kind of high priests that just have themselves have their twitter followers what kind of leader are you would you say actually a bit more in the hyper in the high priests direction than before yeah like I definitely actually don't do all that much of kind of going around and make ordering aetherium foundation people to do things because I think those things are important if there's something that I do think it's important I use I do just do usually I kind of say it publicly or just gonna say it to people and quite often projects just gonna start doing it so let's ask the - Safa cool question just about money yeah what at the highest level is money what is money it's a kind of game and it's a game where we have points and like if you have points there's this one move where you can reduce your points by a number and increase someone else's voice by the same number and these it's a fair game hopefully well it's one kind of fair game like for example you know you can have other kinds of fair games like you're gonna have a game where if I give someone a points and you give someone a points and instead of that person getting two points that person gets four points and that's also fair but no money is easy to kind of set up for and it serves a lot of useful functions and so it kind of just survives in society as a meme for thousands of years it's useful for the storage of wealth useful for the exchange of value and it's also useful for words and nominating future payments a unit of account a unit of account so what if you look at the history of money in human civilization what just uh if you're a student of history like how has its role or just the mechanisms of money changed over time in your view even if we just look at the 20th century before and then leading up to cryptocurrencies that's something think about yeah and I think like the big thing in the 20th century is kind of we saw a lot more intermediation yes thank you I mean the first part is and if the move from Bing yeah adding more of different kinds of banking and then we saw the move from and if dollar is being backed by gold to dollars being backed by gold that's only redeemable by certain people $2 not being backed by anything soo and it's just this new system where you have a bunch of free floating currencies and then people like I'm getting and if bank accounts and then those things becoming electronic people getting accountable payment processors that have account bank accounts so so what do you make of that that's a fascinating so philosophical idea that money might not be backed by anything what is that like the fascinating to you that money can exist without being backed by something physical it definitely is what do you make of that like how how is that possible is that stable if you look at the future of human civilization is it possible to have money at the large scale it such a hugely productive and rich societies be able to operate successfully without money being backed by anything physical feel like the interesting thing about the 21st century especially is that a lot of the important valuable things are not backed by anything like if you look at like tech companies for example like something like Twitter and like you could theoretically imagine that if all of the employees wanted to or they could have kind of come together they would quit and you know start working on Twitter 2.0 and then the yeah of how you will and just kind of build the exact the the exact same product source possibly build a better product and then just and if continue on from there and the original the original Twitter would've just not have people left anymore right like that there is theoretically kind of code and like IP that's owned by the company but in reality good programmers could probably read up rewrite all that stuff in three months so the like the reason why the thing has value is just kind of network effects and coordination problems right like this employees in reality aren't going to switch all at once and also the users aren't all going to switch at once because it's just difficult for them to switch at once and so there's these and of metastable and of equilibria in interactions between thousands of millions of people that are just actually quite sticky even though if you try to kind of assume that everyone's a perfectly rational and kind of perfectly slippery spherical cow they don't seem to exist at all this that stickiness do you have a sense a grasp of the sort of the fun fundamental dynamic like the physics of that stickiness it seems to work but and I think some of the cryptocurrency ideas kind of rely on it working yeah it's you know it's the sort of thing that's definitely been have economically modeled a lot I wanna be a kind of analogy of something as similar that you often see in textbooks as like what is say yeah government like if for exactly any person if people in a country just like tomorrow suddenly had had the idea that like the laws that are currently the laws in the government that currently is the government are just people and some of us and some other thing it is the government and they just kind of start acting like it then that would kind of become the new reality and then the question is well what happens if and if between 0 and 80 people are it were an 80% if people start believing that like what is the thing you also you see instead if there is one of these kind of switches happening is kind of revolution then if you're the first person to join then like you probably probably don't have the incentive to do that but then if you're the 55th percentile person to join and then suddenly becomes quite safe too and so this definitely is the sort of thing that you can and if try to analyze it understand mathematically but one of the and if results is that the sort of like when the switch happens definitely can be chaotic sometimes yeah but still like to me the idea that the network effects that the fact that human beings at a scale like millions billions ensure even the idea of currency big yeah all agree that's just I know I can almost model it I'm a skeptic on the economic it's like somebody my favorite sort of field maybe recreationally psychology is trying to take human behavior and I think sometimes people just kind of pretend that they can have a grasp on human behavior even though we it's such a messy space that all the models that psychology or economics those different perspectives on human behavior you can have or are difficult it's difficult to know how much that's wishful thinking and how much it is actually getting to the core of understanding human behavior but on that idea what do you think is the role of money in human motivation so do you think money from an economics perspective from a psychology perspective is core to like human desires money is definitely very far from the only motivator it is a big motivator and that's one of the closest things you have to a universal motivator think because ultimately in the almost any person in the world if you ask them to do something they'll be more inclined to do it if you also offer some offer the money right and that's big there's definitely many cases where people will do things other than things that maximize how much money they have and that happens all the time but like though a lot of those other things are kind of but much more specific to and if who that person is and if where their situation is the relationship between the motive in the action and these other things what do you think is in the interplay of the other motivator from like Nietzsche perspectives power do you think money equals power do you think those are conflicting ideas do you think that's the one of the ideas that decentralized currency decentralized applications are looking at is who holds the power yeah money is definitely a kind of power and there's definitely people who want money because it gives them power and then even if my money doesn't seem to and have explicitly be about money a lot of things that people spend money on are ultimately about a social status of some kind I definitely view those two things as an interplaying and then there's also money as just a way of like measuring how successful you are I guess a scoreboard right so this kind of gets back to the game like if you have four billion dollars then the main benefit you get from going out or one of the big benefits you get from going up to six million dollars is that now instead of being below the guy who has five year above the guy who has five so you think money could be kind of in a game of life it's also a measure of self-worth it's like how we it's definitely how I have a lot of people perceive it define ourselves you know hierarchy of yeah I'm not yeah not saying it's kind of a healthy thing that people define yourself worthless money because it's definitely and of far from a perfect indicator of how much you like you value you provide the Society or anything like this but I definitely think that they as a matter of kind of current practice a bunch of people do feel that way so what does utopia from an economic perspective look like to you what is the perfect world look like I guess The Economist's utopia would be one where kind of everything is an incentive aligns in the same in the sense that there aren't enough conflicts between what satisfies your goals and kind of what is good for and if everyone in the world in the world as a whole what do you think that would look like this does that mean they're still poor people and rich people they're still income inequality do you think sort of Marxist ideas are strong do you think sort of ideas of Objectivism like where the market rules is strong like what is there is the different economic philosophies that just seem to be reflective what utopia would be no I definitely think that existing economic philosophy is do end up kind of systematically deviating from the utopia in a lot of ways yeah like one of the big things I talk about for example is public goods right and public goods are especially important on the Internet right yes like the idea is what kind of money as this game where you know I was a few coin a few coins and you gain the same number of coins is that this usually happens in a trade where I lose some money you gain some money you lose a sandwich and I gain a sandwich and this and if model works really well when the thing that were using money to incentivize this kind of private goods right things that you provide to one person where the benefit comes to one person but the like on the internet especially but also many many contexts and if off the internet there's actions that and if individuals or groups can take where instead of the benefit going to one person the benefit just goes to many people at the same time and you can't control where the benefit goes to right so for example this podcast I know we publish it and when it's published you don't have any fine-grained control over like oh these 38,000 people can watch it and then like these other 29,000 people can't it's like once the number goes high enough then you know people just like copy it and then when I write articles on a blog then they're just like free for everyone and that stuff's even harder to prevent anyone from copying so and aside from that things like you know scientific research for example and even taking more pedestrian examples like climate change mitigation would be a big one so there's a lot of things in the world where you have these kind of individual actions with have concentrated cost and distributed benefits and money as a point system does not do a good job of encouraging these things and one of the kind of other things even tangentially connected to crypto but kind of theoretically outside of it that I work on is this sort of mechanism called quadratic funding and the way to think about it is I and I've imagined a point system where if like if one person gives coin gives points to one other person then it works the same way as money but if multiple people and give coins to one person and they do so anonymously so it's kind if not in consideration for a specific service to that person themselves and then the number of Quinns are received by that person and of greater than just the sum of the number of coins that have given by those different people so the actual formula is you take the square root of the amount that each person gave then you add all the square roots so then you're going to square the sums because yeah and then you give that and the idea here would basically be that if let's say for example you just started going off and kind of planting a lot of trees and there's a bunch of people that are really happy that you're planting trees so that so they go and all kind of throw a coin your way then the like there is like basically the fact that kind of you get more than the sum you get this kind of square of some of these of a square root some of these tiny amounts as that this actually and if compensates for the tragedy of the Commons rightness there is even this kind of mathematical proof that it's sort of optimally compensates for it what is the tragedy of the Commons this is just this idea that if there is this situation where there's some public good that lots of people benefit from then no individual person wants to contribute to it because if they contribute to only get a small part of the benefit from their contribution but they pay the full cost of their contribution in which context is this sorry what is the term quadratic quadratic funding like what's in which context is this mechanism useful so obviously you said to combat the tragedy of the Commons but you know in which context do you see it as useful in practice yes theoretically public goods in general right so like like services like what do we what are we talking about what's the public within the etherium ecosystem for example like we've actually tried using this mechanism I wrote a couple of articles about the Senate on Vitalik CA where it goes through some of the most recent rounds and it's been really interesting some of the top ones that people supported there were things like you can just unwind user interfaces that make it easier for people to interact with etherium there was documentation there are podcasts there were you know software and of clients like kind of implementations of the etherium protocol of privacy tools just like lots of things that are gonna be useful to lots of people wouldn't a lot of people are contributing for like funding a particular take care entity yeah and it's really actually interesting is there something special about the quadratic the the the summing of the square roots yeah so another way to think about it is like imagine if n people each give a dollar then the person gets N squared right and and so each individual person's contribution gets multiplied by n because you have n people and so that kind of perfectly compensates for the kind that kind of end to one tragedy over the comments I just wonder if the squared part is yeah fundamental though it is an Ida recommend you go to Vitalik CA I have this article called quadratic payments of primer and highly recommended it's kind of at least my attempt so far and if exploiting the intuition behind this intuition so if we could can we go to the the very basic what is the blockchain or perhaps we might even start at the the Byzantine generals problem and presenting fault tolerance in general that I big coin was taking steps to providing a solution for so the Byzantine generals problem it's this paper that Leslie Lamport published in 1982 where she has thought experiments where if you have two generals that are camped out on opposite sides of a city and they're planning when to attack the city then the question is and if how could those generals coordinate with each other and they could send messengers between each other but those messengers and if could get sniped by the enemy on the row road some of those messages could end up being traitors and if things could end up happening and with just two mess generals it turns out that there's and if no solution and a finite number of rounds that guarantee is dead they will be able to end of coordinate on the same answer but then in the case where you have more than two generals that then Leslie analyzes cases like are the mess and message is kind of just oral messages are the messages kind of signed messages so I can give you a man assigned messages and you can pass along that signed message and the third party could still verify that I originally made that message and depending on those different cases there's kind of different bounds on like given how many generals and how many traders among those generals so I move whether like under what conditions you actually can't agree once I launch an attack so it's actually a big misconception that the the Byzantine generals problem was unsolved so let's go import solve that the thing that was unsolved though is that all of these solutions assume that you've already agreed on and I'm affixed a list of who the generals are and these generals have to be a kind of semi trusted to some extent they can't just be anonymous be because if they're anonymous stand like the enemy could just be 99% of the generals uh so I'm in the 1980s and the 1990s head of the general use case for distributed system stuff was more and if enterprise-e stuff where you could and have assumed that no you know who the nodes are that are running the sign of computer networks so if he wants to have some movement of decentralized computer network that pretends to be a single computer and that you can kind of do a do and of operations on then it's made out of these and a fifty in specific computers and we know and if who and where they are and so we have a good reason to believe that say at least eleven of that would be fine and it could also be within a single system yes exactly almost a network of devices sensors you know on like in air airplanes and I think like flight systems generally use these kinds of ideas yep yep so that's the eighties that's the eighties and nineties now the cypherpunks had a different use case in mind which was that they wanted to create a yeah for a decentralized global permission was currency and the problem here is that they didn't want any authorities and they didn't even want any kind of privilege the list of people and so now the question is well how do you use these techniques to create consensus when you have no way of kind of measuring identities right you have no way of kind of determining whether or not some 99% of participants aren't actually all the same guy and so the clever solution that's it was she had this is and if going back to the that presentation I made a Def Con a few months ago where I said that the things that o she invented was crypto economics is this a really neat idea that you can use economic resources to kind of all admit identity how many identities you can get and the if there isn't any existing decentralized digital currency that the only way to do this is with proof of work right so with proof of work the solution is just you publish a solution to a hard mathematical puzzle that takes some and if clearly calculable amount of computational power to solve you get an identity and then you solve a five of those puzzles you get five identities and then these are the identities that we run the kids not this algorithm between so the proof-of-work mechanism you just described is like the fundamental idea proposed in in the white paper that defines bitcoin what's the idea of consensus that we wish to reach what wise consensus important here what is consensus so the goal here in just simple technical terms yes to kind of wire together a set of a large number of computers in such a way that they kind of pretends to the outside world to be a single computer where that single de pute er keeps working even if a large portion of the kind of constituents the computers that make it up break it kind of break in arbitrary ways like they could shut off they could try to actively break a system they could do lots of mean things so the reason why the cypherpunks wanted to do this is because they wanted to run one particular program on this virtual computer and the one particular program that they wanted to run is just a currency system right it's a system that just processes a series of transactions and for every transaction it verifies that the sender has enough coins to pay for the transaction it verifies that the digital signature is correct and if the checks pass then it subtracts the coins from one accounts and adds the coins to the other account roughly so first of all the the proof of work idea is kind of I mean at least to me seems pretty fascinating it is I mean that's a it's kind of a revolutionary idea is it is it obvious to come up with that you can use you can exchange basically computational resources for for identity it's it actually has a pretty long history it was first proposed in a paper by a Cynthia to work in a or in 1994 I believe and the original use case was a combating email spam so the idea is that if you send an email you have to send it with a proof-of-work attached and like this makes it reasonably cheap to send emails to your friends but it makes it really expensive to send spam to a million people yeah that's a simple brilliant idea so maybe also taking a step back so what is the role of blockchain in this what is blockchain sure so the blockchain I mean my way of thinking about it is that it is this and if system where you have this kind of one virtual computer created by this a bunch of these of nodes in the network and the reason why the term blockchain is used is because the data structure that these systems use at least so far is one where they even if different nodes in the network periodically published blocks and a block is a kind of list of transactions together with a pointer like a hash of a previous block that it builds on top of and so you have a series of blocks that that no one's in the network create for each block points to the previous block and so you have this chain of them is a fault tolerance mechanism built into the idea of blockchain there's a lot of possibilities I've got a ways to make sure there's no funny stuff going on there are indeed a lot of possibilities so in Egan and just simple architecture as I just described is the way the fault tolerance happens it's like this right so you have a bunch of nodes and they're just happily and if occasionally creating blocks building on top of each other's blocks and let's say you have kind of one block we'll call it kind of block one yeah and then someone else builds another block honestly we'll call it block two then we have an attacker and what the attacker tries to do is the attacker tries to revert block two and the way the revert block two is instead of doing the thing they're supposed to do which is build a block on top of block two they're gonna build another block on top of block one so you have block one which has two children block two in the walk to prime now this light sometimes even happened by random chance if you know two nodes in the network just happened to create blocks at the same time and then over here about each other's things before they create their own but this also could happen because of an attack now if this happens you have an attack then we know in the Bitcoin system the nodes follow the longest chain so if this attack had happened and if when the original chain had more than two blocks on its know if it was trying to kind of revert more than more than two blocks then everyone would just taken one just ignore it and everyone would just keep following the regular chain but here you know we have walked two and we have walked two prime and snow this you were kind of even and then whatever block the next block is created on top of so say block three is now created on top of block two prime then everyone says agrees that block three is than you had and block two prime is just kind of forgotten and then everyone just kind of peacefully builds on top of block 3 anything continues so how difficult is it to mess with the system I know so how like if we look at the general problem like how many what fraction of people who participate in the system have to be bad players in order to mess with actually like what's your is there is there a good number areas well depending on kind of what your model of the participants is and like what kind of attack we're talking about it's anywhere between twenty three point two and fifty percent of what of all of the computing power in the network sorry so twenty two and twenty or three point between twenty three point zero and 50% and 50% are can be compromised so like once you're once your purse your portion of the total computing power the network goes above the twenty three point two level then there's and if things that you could mean things that you can potentially do and as your percentage of the network kind of keeps going up then the your abilities does you mean things kind of goes higher and then if you have about 50% then you can just break everything so how hard is it to achieve that level like it seems that so far historically speaking it's been exceptionally difficult so this is a challenging question so the economic cost of acquiring that level of stuff from scratch is fairly high I think it's somewhere in the low billions of dollars and when you say that stuff you mean computational resources yeah so specifically specialized hardware and of Asics that people use to solve these puzzles to do the mining small tangent so obviously I work a lot in deep learning with GPUs and Asics for that application and I tangentially kind of here that's so many of these you know sometimes NVIDIA GPUs are sold out uh-huh because because of this other application that would do work if you can come out I don't know if you're familiar or interested in the space what kind of Asics what kind of hardware is generally used these days for the to do the actual computation for the proof-of-work sure so in the case in Bitcoin and etherium are a bit different so in the case of Bitcoin there is an algorithm called sha-256 it's just a hash function and so the puzzle is just coming up with a number where the hash of the number is below some threshold and so because the hashes are designed to be random you just have to keep on trying different numbers until one works and the Asics are just like specialized store gets to contain and if circuits for evaluating this hash over and over again and you have like millions or billions of these hash evaluators and just stacked on top of each other inside of a box and you just keep on running the box 24/7 and the issues there's literally specialized hardware design for this yes oh this is we live in an amazing world another tangent and I'll come back to the basics but this quantum computing throw a wrench into any of this very good question so what quantum computers have two main and a families of algorithms that are relevance to cryptography one is a Shor's algorithm ensures algorithm is one of kimbley he breaks the hardness of some specific kinds of mathematical problems so the one that you've probably heard of is it makes it very easy to factor numbers so it figure out kind of what prime factors are they're kind of that you need to multiply together to get some number even if that number is extremely big Shor's algorithm can also be used to break and look to curve cryptography it can break like any kind of hit an order group so it breaks a lot of kind of cryptographic nice things that we're used to but the good news is that for every and of major use of things that Shor's algorithm breaks we already know of quantum proof alternatives now these we don't use these quantum proof alternatives yet because in many cases they're faster ten times what sufficient but and the crypto industry in general kind of knows that this is coming eventually and it's kind of ready to take the hit and switch to that stuff when we when we have to the second algorithm that is the relevant to cryptography is Grover's algorithm and in Grover's algorithm might even be a more familiar to AI people that's basically usually described as solving search problems them but the idea here is that if you have a problem over the form find a number that satisfies some property then if with a classical computer you needs to try and have n times before before you find a number then with a quantum computer you only need to do square root of n computations and the Grover's could potentially be used for mining but there's two possibilities here one is that Grover's could be used for mining and whoever creates the first working quantum computer that could do Grover's will just mind way faster than everyone else and we'll see another round of what we saw when a six came out which is that kind of the new hard were just kind of dominated the old stuff and then eventually it switched to a new equilibrium but by the way way faster not exponentially faster quadratic we found radically faster which is not sort of uh it's not game-changing I would say it's like a sex like you said it would be exactly yes so it would not necessarily break proof-of-work as of this right yeah yeah the other kind of possible world right is that quads are computers have a lot of overhead there's a lot of Anacapa like city involved in maintaining quantum states and there's also as we've been realizing recently meeting quantum computers were actually work requires that have quantum error correction which requires kind of a thousand real qubits per logical qubit and so there's the very real possibility that the overhead of running a quantum computer will be higher than the speed-up you get with Grover's which would be kind of sad but which would also mean that given proof of work we'll just keep working fine so the beautifully put soso proof of work is the core idea of Bitcoin is there are other core ideas before we kind of take a step towards the origin story and ideas of aetherium is there other stuff that will key to the white paper of Bitcoin there is proof of work and then there's just the cryptography it just kind of public keys and signatures that are used to verify transactions those two are the big things so then what is the origin story maybe the human side but also the technical side of aetherium sure so I joined the Bitcoin community in 2011 you know they started by just writing I first wrote for the sort of online thing called Bitcoin weekly then I started writing for Bitcoin magazine um you know sorry to interrupt you have this funny kind of story true or not is that you were disillusioned by the downsides of centralized control from your experience with Wow world of warcraft is this true or you're just being woody I mean the event is true the fact that that's the reason I do decentralization is witty maybe just a small tangent have you always had a skepticism of centralized control is that sloppy Korea has that feeling evolved over time or is that just always been a core feeling that decentralized control is the future of human society it's definitely been something that felt very attractive to me ever since I could afford that such a thing is possible yeah they're so great so you're you joined the Bitcoin community in 2011 you say you began writing so what what's next started writing moved from high school to university a half way in between that spent a year in university then at the end of that year I had dropped out to do Bitcoin things full-time and this was a combination of continuing the right Bitcoin magazine but also increasingly work on software projects and I traveled around the world for about six months and just going to different Bitcoin communities like I went to first in New Hampshire then Spain other European places I'm Israel then San Francisco and along the way and have met a lot of other people that are working on different Bitcoin projects and when I was in Israel there were some kind of very smart teams there that were working on ideas that people were starting to kind of called Bitcoin 2.0 so one of these worse colored coins which is basically saying that hey let's not just use the blockchain for Bitcoin but let's also kind of issue other kinds of assets on it and then there is a protocol called master coin that supported issuing assets but also supported many other things like financial contracts like domain name registration and a lot of different things together and I spent some time working with these teams and I quickly kind of realized that this master coin protocol could be improved by kind of generalizing it more right so the best the analogy I use is that the master coin protocol was like the Swiss Army knife you have 25 different transaction types for 25 different applications but what I realized is that you could replace a bunch of them with things that are more general-purpose so one of them was that you could replace like three transaction types for three types of financial contracts with a generic transaction type for a financial contract so just what you specify mathematical formula for kind of gurgi how much money each side gets by the way it's a small pause what's you say financial contract just the terminology what is the contract what's a financial contract so the a this is just generally an agreement where I know if either one or two parties kind of put collateral or kind of in and then they depending on and if certain conditions like this could involve prices of assets this could involve different the actions of the two parties could involve other things but they you kind of get rid of different amounts of and of assets out that it'll just depend on things that happened so a contract is really a financial contract as at the core it's the it's the core interactive element of a financial system yeah there's there's many different kinds of financial contracts like there's things like options where you kind of give someone the right to buy a thing that you have for some specific price for some period of time there's contracts for difference where you basically are kind of making a bet that says like for every dollar this thing goes up I'll give you $7 or for every dollar the thing goes down you give me $7 or something like that you know but the main idea that these contracts have to be enforced and trusted then yes exactly you have to trust that they will work out in a system where nobody can be trusted yes this is such a beautiful complicated system okay so so you're seeking to kind of generalize this basic framework of contracts hmm so what is that entail so what what technically are the steps to creating aetherium sure so I guess just they're going to continue a bit with this master coin story term so started by and of giving ideas for how to generalize the thing and eventually this turned into a much more kind of fully fledged proposal that just says hey how about you scrap all your future is and instead you just put in this programming language and I gave this idea to them and their response was something like hey this is great but this seems complicated and this seems like something that's we're not gonna be able to put onto a road map for a while and my response to this was like wait do you not realize how revolutionary this is well just go do it myself and then I was the name of the programming approach I just called it ultimate scripting great so then I kind of went through a couple more rounds of iteration and then the idea for aetherium itself started to form and the idea here is that you just have a blockchain where the core unit of the thing is what we call contracts as these and if accounts that can hold assets and like they have their own internal memory but that are controlled by a piece of code and so if I send some ether to a contract the only thing that can determine where that and if either the currency inside etherium item goes after that is the code of that contract itself and so basically you're kind of sending assets to computer programs becomes this kind of paradigm for creating these sort of agreement self executing agreements self executing as so cool that code is sort of part of this contract so that that's what's meant by smart contracts yeah so how hard was it to build this kind of thing harder than expected I mean originally I actually thought that this would be a thing that I would kind of casually work on for a couple of months published and then go back to university then I released it and a bunch of people or I released a white paper white paper that paper a whole bunch of people came in offering how about huge number of people and have expressed interest and this was something I was totally not expecting and then I kind of realized that this would be something that's kind of much bigger than I had ever thought that it would be and then we started on this kind of much longer development slog of making something that lives up to this sort of much higher level of expectations what if this some of those is it fundamentally software engineering challenges your whether social okay so there's a social so so what are the biggest interesting challenges that you've learned about human civilization and engine software engineering through this process so I guess one of the challenges for me is that like I'm one of the I know apparently unusual geeks course and have never treated with anything but kindness in school yes and so when I got into crypto I kind of expected everyone would just kind of be the same kind of altruistic and nice in that same way but the and if the algorithm that I used for finding co-founders for this thing was not very good it was literally what computer scientists called the greedy algorithm it's said of the first 15 people who replied back offering to help and if I were the co-founders do you mean like literally the people that four will form the founders cofounders of the community the algorithm I like how you call it the algorithm yeah and so what happened was that these but especially as the project got really big like there started to be a lot of this kind of infighting and there are a lot of like I wanted the thing to be a non-profit and some of them wanted to be a for-profit and then there started to be people who were just kind of totally unable to work with each other there were people that were kind of trying to get an advantage for themselves in a lot of different ways and this just about six months later went to this big governance crisis and then we got a reshuffled leadership a bit and then the project kept on going then nine months later there was another governance crisis and then there was a third governance crisis and so is there a way to looking at the human side of things is there a way to optimize this aspect of the cryptocurrency world it seems that there is from my perspective there's a lot of different characters and personalities and egos and like you said I don't know if you know I also like to think that most of the world mostly people in the world are well-intentioned but the way those intentions are realised may perhaps come off as you know as negative like what is there is there a hopeful message here about creating a governance structure for cryptocurrency that where everyone gets along and after about four rounds of reshuffle like I think we've actually come up with something that seems to be pretty stable and happy and I think I mean I definitely do think that you know most people are well-intentioned I just think that like one of the reasons why I like decentralization is just because there's like this thing about power where power attracts people with egos and so that just allows a very small percentage of people to just ruin so many things you think he goes uh you think ego has a use like is he go always bad it seems like sometimes does but Scindia theory research team I feel like we've found also kind of a lot a lot of very good people that are just gonna primarily you're just interested in things for the technology and the thing says seem to just generally be going quite well yeah when you're when the focus and the passion is an attack so on the so that's the human side of things but and the technology side like what have you learned what would have been the biggest challenges of bringing aetherium to life on the technology side so I think first of all just you know there's like the first law of software development which is that when someone gives you a timetable of which the unit of time to the next largest unit of time and add one he's like we basically fell victim to that and so instead of taking this at like three months it ended up taking like 20 months to watch the thing that was just I think under estimating the sheer technical complexity over the thing there were research challenges like so for example one of the things that we've been saying from the start that we would do one is a switch from a proof of work to a proof of stake more proof of stake is this alternative consensus mechanism where instead of there having to waste a lot of a computing power on solving these mathematical Possible's that don't mean anything you kind of proved that you have access to coins inside of the system and this gives you some level of participation in the consensus can you maybe elaborate on that a little bit I understand the idea of proof of work I know that a lot of people say that the idea of proof of stake is really appealing can maybe linger on a longer explain what it is sure so basically the idea is like if I kind of a walk up a hundred coins then I turned that into a kind of court virtual Minor and the system itself I kind of automatically in a random way assigns that in a virtual minor is a right to create blocks at particular intervals and then if someone else has 200 coins and then a walk on the walk there's 200 coins then they get a kind of twice as big a virtual minor they'll be able to create blocks twice as often good so it tries to do similar things to proof of work except instead of the thing and if very limiting your participation being your ability to crank out its solutions to and if hash challenges the thing that real love is your participation is kind of how much coins you're walking into this mechanism okay so interesting so that that limit of participation doesn't require you to run a lot of compute mmm-hmm does that mean that the richer you are so rich people are more like their identities more right and this stable yeah verifiable or whatever whatever the right terminology is right and this is definitely a copied critique I think my usual answer to this is that like proof of work is even more of that kind of thing exactly yeah I didn't mean it investing there's a criticism I think you're exactly right that's equivalent the proof of work is the same kind of thing but before work you have to also use physical resources yes and burn computers and burn trees and all of that stuff is there a way to mess with the system of the proof of proof of stake there is but you will once again need to have a very large portion of all the coins that are locked in the system to do anything bad got it yeah and just to that maybe take a small change and one of the criticisms of cryptocurrency is the fact that it gets for the proof of work mechanism you have to use so much energy in the world yes is one of the motivations of proof of stake is to move away from this definitely like what's your sense of it maybe I'm just under informed is there like legitimately environmental impact from this yeah so the latest thing was that Bitcoin consumed as much energy as the country of Austria or something like that yeah and then etherium is like right now me only like half an order of magnitude smaller than Bitcoin I've heard you talking about a theorem 2.0 so what's the what's the dream of a theorem 2.0 what's the the status of proof of stake is the mechanism that a theory moves towards and also how do you move to a different mechanism of consensus sure that within a cup of currency so theorem 2.0 is a collection of major upgrades that we've wanted to do to aetherium for quite some time the two big ones one is upper of steak and the other is so we call sharding sharding solves another problem with block chains which is a scalability and what sharding does is it basically says instead of every participant in the network having to personally download and verify every transaction everybody else pins in the network only downloads and verifies a small portion of transactions eelain's you kind of randomly distribute who gets how much work and because the issue of how the distribution is random it still has the property that you need a large portion of the entire network to corrupt what's going on inside of any shard but the system is still in a very redundant and very secure how hard is that to implement and how hard is proof of stake to implement like on a technical level yes after level proof of stake in charting are both challenging might say charting is a bit more challenging the reason is that proof of stake is can have just I changed the causa consensus or works sharding does both that but it's also a change to the networking layer the reason is that charting is kind of pointless if at the networking layer you still do what you do today which is you kind of gossip everything which means that if someone publishes something every other node and the client Sears it a like from on the networking layer and so instead we have to have and if sub networks and the ability to quickly switch between sub networks and other sub networks talk to each other and this is all doable but it's say yeah more complex architecture and it's definitely the sort of thing that it has not yet been done in cryptocurrencies so most most of the networking layer in cryptocurrency is you're shouting like broadcast messages and this is more like ad hoc networks like yeah you're shouting within smaller groups small group but do you have like a bunch of sub note like exactly you have to switch between ah man I'd love to see that there's a beautiful idea so from a graph theoretic perspective but just the software that who's responsible is a theorem project like the people involved would they be implementing like what's the actual you know this is like legit software engineering who like how does that work how do people collaborate build that kind of project is this like almost like is there a software engineering lead is there it's like is it legit almost like large-scale open-source projects yeah so we have someone named Danny Ryan on our team has just been brilliant and great all around and he is a kind of de facto kind of development coordinator I guess it's like you have to invent job titles for this stuff as the reason is that look we also have this unique kind of organizational structure where they theorem foundation itself and of does research in-house but then the actual implementation is by independent teams that are separate companies and they're located all around the world and fun places like Australia and and so no you can kind of just need a bunch of and have almost non-stop cat herding to just keep getting these people to have talked to each other and never kind of implement this back make sure that everyone agrees on mind of what what's going on and kind of how to interpret different things so how far into the future are we from these two mechanisms and etherium 2.0 like what's what's your sense of the timeline keeping in mind the previous comment you made about the sort of general curse of software projects so if the REM 2.0 is split into three phases so face gyro just creates a proof stake network and it's actually separate from and of proof of the proof of work network at the beginning just and if give it time to grow and improve itself do people get to choose sorry to interrupt if people get to choose I guess yes you can think yes I choose to move over if they want to then phase one adds sharding but it only adds sharding of and of data storage and not charting of computation and then after that there is and if the merger phase which is where the yeah and if the accounts kind of smart contracts like all of the an activity and a the existing is one system just kind of gets cut and pasted into eighth - and then the proof of work chain gets forgotten and then and things all the things that we're living there before you're just kind of continual living inside of the pro stake system so for timelines um phase zero has been kind of almost fully implemented and now it's just a matter of a whole bunch of security auditing and testing my own experience is that right now it feels like right about a phase comparable to when we were doing the original aetherium launch when we were maybe about four months away from launch that's just a hunch then that's just a hunch yeah so how you know it took took over a decade for people to move from Python to to Python 3 how do you see the move from like this phase of 0 of 4 for different consistent mechanism do you see there being a drastic phase shift in people just kind of jumping to this better mechanism so in phase 0 don't expect too many people to do much because in phase 0 in phase 1 then you chain negative deliberately and it doesn't have too much functionality turned on it's there just like if you want to be a proof of stake validator you can get things started if you want to store data for other blockchain applications you can get started but existing applications will largely keep living on East one and then when the merger happens then the merger is a operation that happens all at once I mean so instead of one of the benefits of I can sense a system that Nick on the one hand you have to coordinate the upgrade but on the other hand the upgrade can be coordinated so what's Gasper FFG um Gasper FFG is their consensus algorithm that we are using for other proofs take is there something interesting specific about Casper FFG like some beautiful aspect of it that's there is so in Casper FFG combines together kind of two different schools of a Kuznets algorithm design so the general two different schools of the design are right one is at a 50% fault tolerant but dependent on network synchrony so 50% faults are fault tolerant but it's all rate up to 50% of faults but not more but it depends on an assumption that all of the nodes can talk talk to each other within some development period of time like if I send the message you'll receive it within a few seconds and the second of school is 33% fault tolerant but safe under a synchrony which me instead like if we agree on something then that thing is finalized and even if the network goes horribly wonky the second after nothing is finalized there's no way to revert that thing and that's fascinating how you would make that happen it's definitely quite clever I'd recommend the Casper FFG paper if you just search like archive I said like arxiv Casper FFG it's that's the papers an archive yeah yeah who are the authors myself and every Joel Griffith that's awesome I take a small tangent this idea of just putting out white papers and papers and putting them on archives just putting them publicly is it is that at the core is that a necessary component of cryptocurrencies that the tradition started with Satoshi nakamoto's what do you make of it like what do you make of the future of that kind of sharing of ideas I guess so yeah and it's definitely something that's like kind of mandatory for crypto because like crypto is all about making systems where you don't have to trust the operators to trust that the thing works and so if anything behind our system works is closed sourced and that kind of kills the point and so there is the kind of a sense in which the fundamental properties of the category of the thing we're trying to build is just kind of forces openness but also openness just has proven to be a really great way to collaborate and there's actually a lot of n of innovation and academic collaboration that's just kind of happened ad hoc in the crypto space the last few years so like for example we have this forum called ëthe research that's like eth our ESEA are the dots eh and there we publish and of just ideas in a forum that's kind of half formal like it's halfway in between like it's it's a kind of a text write up and then you can have math in it but it's the often--and of much shorter than a paper and it turns out that the great majority of new ideas like they're just kind of fairly small nuggets that you can explain and like five to ten lines that they don't really need the whole formality paper exactly they don't require the kind of like ten pages of an ax filler and so introduction conclusion is not needed yeah and so instead you just kind of published the idea and then people can go comments on it really yeah I said great for us I think I interrupted you was there something else on Casper effigy that's like just Casper FFG is just kind of combines together these two schools and so basically it creates this system where if you have more than 50% that are honest then the and you have network synchrony then the thing kind of goes as a chain but then if network synchrony fails then kind of the last few blocks in the chain might be kind to get replaced but anything that was finalized by this side of more asynchronous process gets I can't be reverted and so you essentially get a kind of best of both worlds between those two models okay so I know what I'm doing to them I'm currently reading the Casper effigy paper apologize for the romanticized question but what do you are some or the most beautiful idea in the world of aetherium just something surprising something beautiful something powerful yeah I mean I think the fact that money can just emerge out of a database if enough people believe in it I think is definitely one of those things that's up there I think one of the things that I really love about aetherium is also this concept of composability so this is the idea that if I build an application on top of ethereum then you can build an application that talks to my application and you don't even need my permission you don't even need to talk to me right so one really fun example of this as there was this end of game on aetherium called that Krypto kitties the just involve head of breeding digital cats yes and someone else created a game called crypto dragons where the way you play crypto dragons is you have a dragon and you have to feed it crypto kitties and they just created the whole thing just like as an etherium contract that you would send these these tokens that are defined by this other etherium contract for the interoperability to happen like the project's didn't don't really need sir like the teams don't really need to talk to each other you just kind of interface with the existing program it's just arbitrarily composable in this kind of ways you have different you know some groups they could be working and so you could see it scaling to just outside of dragons and kitties it could be you build like entire ecosystems of software yeah it's kind of mean especially in the decentralized finance space that's been popping up in the last two years there's been a huge amount of really interesting things happen as a result of this is it particularly kind of like financial applications kind of thing yeah I mean there's like stable coins so this is a kind of tokens retain value I'm equal to $1 but they're kind of backed by crypt cryptocurrency then there's decentralized exchanges so when as far as the decentralized exchanges go there's this really interesting construction that has existed for about one one and a half years they all called yuna swap so what yuna swap is let's say a smart contract that holds imbalances of two tokens will call them token a and token B and it maintains that invariants that the balance of token a multiplied by the balance of token B has to equal the same value and so the way that you trade against a thing is basically like you have this kind of curve you know like x times y equals K and yeah before you trade it's at some points on the curve after you tre you just like pick some different any to any other points on the curve and then whatever the Delta X is that's the amount of a tokens you provide whatever the Delta Y is that's the amount of beads no case you get or vice versa and that's just and then and if the slope is I'm at the current points on the curve and it is the price and so that just is the whole thing and that just allows you to have have this exchange for tokens and even if there's very few participants and the whole thing is just like so simple and it's just very easy to set up very easy to participate in and it just provides so much value to people so and the the fundamental the the distributor application infrastructure allows that somehow yes so this is a smart contract meeting this is all a computer program that's just running on areum smart contracts to her just fascinating they are okay do you think cryptocurrency may become the main currency in the world one day so what do you think we're headed in terms of the role of currency the structure type of currency in the world I definitely expect fiat currencies to continue to exist and continue to be strong and I definitely expect had a fiat currency stall so digitized have their own way over the next couple of decades what's fiat currency by the way so just like things like US dollars like dollars and euros and Yemen these other things and they're backed by government's yes but I also expect and if cryptocurrencies to play the set of important role in just making sure that people always have an alternative if fiat currency start breaking so like if or if you're in you know some had a very high inflation place like Venezuela for example or if you're my country just kind of gets cut off from like cut off from other financial systems because of like something the banks do a gift for any kind of if there's even like some major trade disruption or something worse happens then like cryptocurrencies are the sort of thing that just because of their kind of global neutrality they were just and of always there and you can keep using them it's interesting that you're quite humble about the possibilities of the future of cryptocurrency you don't think there's a possible future where it becomes the main set of currency because it feels like fear it feels like the centralized control by governments of currencies limiting somehow maybe my naive utopian view of the world it's a and it's definitely very possible I'm I think for cryptocurrencies being the main form of value to and of work well like did you need to have some much more price stability than they have today and I mean there are now stable coins and there are kind of cryptic cryptocurrencies that try to be more stable than existing things like Bitcoin and ether but and that just is a tsamina kind of the main challenge do you think oh that's do you think that's a characteristic of this just being the early days is such young concept in ten years is nothing in the history of money yeah I think it's a combination of two things right one is it's it's still early days but the other is a kind of more durable any kind of economic problem which is that demand for currency is volatile right because of like recessions booms changes to technology lots of things and if people's demand for how much currency they want to hold changes and if you have a currency that has a fixed supply then the change in demand has to be entirely expressed as a change in value of the currency and so what that means is that kind of the volatility of demand becomes entirely translated into volatility and ahead of prices of things that updated in that currency but if you have a currency where instead the supply can change and so the supply can even go up when there's more demands then you have the supply and of absorbing more of that volatility and so the price of the currency what absorb lost some of the volatility on that topic so Bitcoin does have a limited supply specific things supply yes what's what's the idea and theorem doesn't but can you clarify just in the comment you just made is aetherium qualified to the kind of currency that you're talking about and being flexible in the supply it's a bit more flexible but you know the thing that you would really want is something that's kind of specifically flexible in a response to how valuable the currency is and and I'd recommend you know what get stable coins as well so like things like dye for example like baseball that Dai and whoa what's stable coins is it a type of cryptocurrency it is the type of cryptocurrency it's um a type of cryptocurrency that's issued by a smart contract one of these aetherium computer programs that where the smart contract holds a bunch of ether and then it is basically look that people deposit and then it issues diane's the reason why people deposit is because they wants to kind of go high leverage on their ether and so it kind of pairs these two sets have you use there's one that wants to bility and one that kind of wants extra risk together with each other and it basically creates or gives one set of participants a guarantee that they'll be paid that they have this asset that can that can be later converted back into ether but it specifically at the end of the one dollar rate and it has some kind of stabilizing network offense yeah yeah it has many kinds of stabilizing mechanisms in it that's fascinating okay this is this world is awesome technically just from a scientific perspective is an awesome world that I often don't see from an outsider's perspective what I often see is kind of maybe hype and a little bit if I may say so like Charlton ISM and you don't often see at least for my outsider's perspective the beautiful science of it and the engineering of it me maybe is there a comments you can make of who to follow how to learn about this world without being interrupted by the charlatans and the hyperbole in this space I think you need to just know the specific just people to follow like there's you know there's all there kind of the cryptographers and the researchers and there's just like even just the etherium research crew like myself st. grad Danny Justin none of the other people are and then and if the academic cryptographers and I give you like before with this today I was at Stanford and Stanford has the Center for watch research and of Dan Bonet this really famous and great cryptographer was never running yet and there's a lot of other people there and there's people working on necks your knowledge proof so for example and Zuko from a-z caches and of one other person that I get respect so I think if you follow the technicals you crawl along that yeah you just sit with your in-group and then look at the academics de Beaune and so on and they just cautiously expand the network of people who fall yeah exactly and like if someone seems to to self-promotional than just like remove them is there books there so there's these white papers and we just discussed about about ideas being condensed into really small parts is there books that are emerging that are kind of good introductory material so for a historical ones and there's like Nathaniel poppers digital gold which is just about the history of Bitcoin there's like one and then Matthew Ising announced that there's one about the history of aetherium for technical ones in there's injurious Antonopoulos is mastering aetherium great so let me ask you sort of sorry to pull back to the the idea of governments and decentralized currency you know there's a tension between the centralization of currency and the power of nations the power of governments you what's your sense about that tension can is there some rule for regulation of currency you yeah is there like is the government the enemy of digital currency of distributed currency or can they be like cautious friends I mean I think the one thing that people forget is that it's clearly not entirely an enemy because they think if there hadn't been so much government regulation on and if centralized the issuing centralized digital currency is that like be seeing things with people like Google and Facebook and Twitter just kind of issuing them left and right and then like if that was the case then decentralized currencies would still appeal to some people but they definitely would appeal to less people than today so even in that sense I think it's they clearly been more of a help just and if set the stage for the end of the existence as system of the sector in some ways but but also and I think some of both you know like there's definitely things that governments and if can do in some cases have done to I have hurt the spread of and of growth of a of blockchains there's things that they've done to help and there in some cases definitely done a good job of and if going after fraudulent projects and they're going after some of the projects that have some of their enough craziest and most misleading marketing there's also the possibility that governments will end up using block chains for a lot of different things like you know governments do and they do a lot more than just regulating right but there is also the they have then if identity records and they have kind of like property registry is even this their own currency is like secure big lots of different kind of things that they're operating and there's even blockchain applications in a lot of those and they can you know they can leverage technology do a lot of good for our societies it is a little unfortunate that governments often lag behind in terms of their acceptance the leverage of technology if you look at the autonomous vehicle space AI in general they're they're a few years behind it'd be nice to help them catch up that's a that's that's the always ongoing problem you uh met Vladimir Putin to discuss the central experience a year you're born in the world were you born Columbus it's a city about 115 km/h go I mean that's vitamin potent is a is a central figure in this part of the world so what was that like meeting meeting him what was that experience like he's taller and photos than in person yeah that's right he's five seven I think five eight maybe yeah unfortunately we didn't actually again have too much of a chance to talk to him like I managed to see him for about one minute at the end of this meeting and I did get a chance to see a lot some of the other end of government ministers and he recommended some and some of them are actually and if interested in trying to use blockchains to look for various government use cases the kind of a little bit corruption and other things and I have like it's hard to tell from one conversation kind of what things are genuine and what things are just like Oh blotchiness cool let's do blockchain right but you know when I when I listen to like Barack Obama talk about artificial intelligence there's certain things I hear were okay so he might not be an expert in AI but he know he like actually studied it carefully enough to think about it like he internal like even if it's just reading a Wikipedia page huh like you really thought about what this technology means did you get a sense that Putin or some of the ministers like thought about blockchain like thought about the fundamentals it's like know like understand it intuitively or they to old school to try to grasp it some are old school some are more new school it depends it's definitely depends on who you talk to I mean that's an open question for me from with Putin because witness said yeah I don't know I've only talked to him for about one minute so but sometimes you can pick up sort of insights there's a quick comment there there about maybe you can correct me on this but they're about 3,000 cryptocurrencies being actively traded yes and aetherium is one of you know a lot of people believe that there will be the the Cryptococcus i think bitcoin is currently still the main cup to consoles but out there and very likely might become that the the main one is this kind of diversity good in the crypto world DC is sticking around should though should there be a winner like should there be some consensus globally around bitcoin or around a theory and like what's your what's your sense i havent nobody think of the diversity is good and i definitely i think also that there's probably too many people trying to make separate block chains so and if right now i mean the number should definitely be greater than one and probably greater than two or even five not three thousand not three thousand yeah and also not even like forty high-quality platforms that try to do the same thing i mean there's definitely this range from just like one person who would just like wrongly thinks that you can create a cryptocurrency in like 12 hours and doesn't even think about kind of the community aspects of maintaining it going to people actually trying but only creating a really tiny one - like scammers to people like making something that's actually successful and then you know there's a lot of different categories of blockchain then you have project in terms of what it's trying to do in what applications it's for um and I think the experimentation is definitely healthy if you look at the two world there might be a little bit disjoints but the distributed applications cryptocurrency and in the world of artificial intelligence do you see there's some overlap between these worlds that both worried about centralized control is there some overlap that's interesting that you think about do you think about AI much yeah and I think definitely would have thought about things like like the AI and if control problems and a lot of problems and all of those things do you worry about the existential threat of AI it's definitely one of the things I worry about you think block there's a lot of kind of common challenges because in in both cases when you're ultimately trying to do is you're trying to kind of get a simple system to direct a more complex system like in the case of this as strong AI as the idea would be that this simple system is people and the complex system is well whatever thing the people the people end up and if unleashing on in the universe that'll hopefully be a great thing and in the case of vlog chains and of the complex well the simple thing is the algorithm which is a piece of static and Foley open source code and the more complex thing is just then um all of the different possible and if human actors and if the strategy is that they yet might end up be used to participate in the network mmm do you think about your own mortality like what you hope to accomplish in your life and no I definitely I definitely think about anything my own mortality so that's if I give you the option to live forever would you it depends a lot on what the fine birds is you know if it's one of those things where I'm gonna be a kind of like floating through empty space for 10 to the 75 years than know if it's forever worth of and of having you know for fulfilling life with a new meaning flood with with friends tend to spend the time with we're gonna meaningful challenges to explore and and eventually interesting things to be working on then I think the absolutely move as beautifully put live forever but you'd have to check the fine print mmm I think there's no better way to end it Vitalik thank you so much for talking is so exciting to follow your work my distance and thank you for creating a revolutionary idea and sticking with it and building it out and doing some incredible engineering work and thanks for talking today yeah thank you thanks for listening to this conversation with vitalik butyrin and thank you to our sponsors expressvpn and master class please consider supporting the podcast by signing up to master class at master class complex and getting expressvpn at expressvpn comm slash Lex pod if you enjoy this podcast subscribe on youtube review it with five stars an apple podcast supported on patreon or simply connect with me on Twitter at Lex Friedman and now let me leave you with some words from vitalik butyrin the thing that I often ask startups on top of the theorem is can you please tell me why using a theory and blockchain is better than using Excel and if they can come up with a good answer that's when you know you got something really interesting thank you for listening and hope to see you next time you

Channel: Lex Fridman

Views: 1,413,507

Rating: 4.639595 out of 5

Keywords: vitalik buterin, ethereum, bitcoin, blockchain, crypto, satoshi nakamoto, artificial intelligence, agi, ai, ai podcast, artificial intelligence podcast, lex fridman, lex podcast, lex mit, lex ai, lex jre, mit ai

Id: 3x1b_S6Qp2Q

Length: 95min 4sec (5704 seconds)

Published: Mon Mar 16 2020

Reddit Comments

[u/cbarland]

Vitalik mentions Quadratic Payments, here is a link to his post about it: https://vitalik.ca/general/2019/12/07/quadratic.html

A great piece of info that I wasn't previously aware of. A mathematical solution to the tragedy of the commons is a huge selling point for ETH in the debate between capitalism vs. socialism.

[u/JoeThankYou]

playback on other applications has been disabled by the video owner

[u/chainclash]

Gosh, I love the way Vitalik explains things.