00:00hi this is Chris Dixon this is a 16z
00:02podcast today we're gonna talk about
00:03aetherium and we have the co-founder of
00:06aetherium Vitalik boo Taryn and we had
00:08also have Fred aresome who's the
00:10co-founder of Quinn base thanks guys for
00:12come on pleasure so metallic could you
00:14tell us what what aetherium is and and
00:16why it's interesting sure so I'll
00:19probably start off by going back a
00:21couple of years to when the project
00:23first started so at the time at the end
00:26of 2013 and people are starting to get
00:28really excited about Bitcoin and people
00:31were also for the first time started
00:33starting to get excited about the
00:36bitcoins underlying technology so about
00:39watchings and decentralization you know
00:42people are starting to basically think
00:43about what other use cases can you come
00:45up with for these kinds of systems so if
00:48you've been for the in the space for a
00:49while you might have heard of namecoin
00:51which is a blockchain base that
00:53decentralized dns that a few people came
00:56up with back in 2010 there were also
00:59some projects at the time that were
01:01called covert coins which was trying to
01:02use the Bitcoin blockchain in order to
01:05store kind of more generic in different
01:07kinds of digital assets there was also a
01:09project based out of Israel called
01:11master coin that was trying to be even
01:13more advanced it was trying to support
01:15certain kinds of financial contracts and
01:17name registration betting and lots of
01:21other different use cases and I looked
01:23out this project and and at first I
01:26wasn't really too interested in any of
01:28them like I actually looked at the young
01:30master coin crowd sale and it seemed
01:32like they were asking to basically throw
01:34your Bitcoin into some address and then
01:35get some other coin and then how are you
01:37supposed to even believe that this other
01:39point is going to have any value and so
01:40forth but I got into that particular
01:44community I saw that there was like
01:46genuine development effort going into it
01:47I saw there people are genuinely excited
01:49they interested and I even started
01:52working for that team for a few weeks I
01:54then discovered that both that projects
01:57and also pretty much every other
01:59projects that existed at the time that
02:01was trying into you what you might call
02:02launching 2.0 crypto over 2.0
02:05cryptocurrencies you point out whatever
02:06you call it and the weakness is that
02:09they were trying to create either single
02:11purpose protocols or what I call Swiss
02:14like protocols so by Swiss Army knife
02:16protocol what I mean is basically you
02:19know five guys come together sit in a
02:20room and they brainstorm for an hour and
02:24they could have come up with let's say
02:2635 different use cases from watchings I
02:29can always get and then they say okay we
02:30now know the 35 years cases of watching
02:33technology let us make a protocol where
02:35we have 35 different transaction types
02:37for each type of transaction we're maybe
02:39the first byte of the transaction or
02:42presents the ID from like 0 to 34
02:44represents sort of which application or
02:46which use case it's for and then you
02:48have some special rules for handling
02:49each individual use case so this was the
02:52route that most of these projects were
02:53going towards and I after spending some
02:57time thinking about this started moving
02:59pretty heavily in the direction of
03:01trying to make the protocol more and
03:03more generic so we're trying to see at
03:05first if we could take some of these 35
03:08years cases and like expands them so
03:10that one particular type of use case
03:12could you know maybe was some kind of
03:14more generic mathematical formula wiser
03:16scripting or whatever encompass more and
03:18more at different areas and potentially
03:21even applications that people didn't
03:22think of before and eventually I
03:25realized that the thing that made the
03:26most sense is to basically just go all
03:28the way and create a blockchain where
03:30you have this principle that essentially
03:34there are no features so what there are
03:36there are no features means an ethereal
03:38and is essentially that there is no sort
03:40of specific transaction type for let's
03:43say registering an asset even like
03:45issuing an asset registering a domain
03:46entering into a financial contract or
03:49whatever older is is this sort of very
03:51generic architecture that's just based
03:53on code and whatever application you
03:57wants to build you can basically just
03:59write the code for it that describes
04:01what the state of the application is
04:03what the state transition rules are what
04:05kinds of transactions can go into it
04:07what the rules are what modifications
04:09different transactions make to the state
04:12and at the end of that what you have is
04:16the system we are no matter what someone
04:18wants to do he can just sort of write
04:20the logic up and do it so that was like
04:22the basic principle so that was the idea
04:24that a theory I'm started off in back at
04:27projects evolved quite a bit so the
04:30first version of etherium that I was
04:32thinking of building is just a very
04:34simple kind of meta protocol so
04:35something on top of the prime coin
04:38blockchain that would just make prime
04:41point transaction data have sort of
04:42different meanings that would be
04:43understood by aetherium enabled clients
04:45but then as the projects grilling
04:47developer interests grew because we
04:49don't enjoy creating our own blockchain
04:51and then team up if they're fairly
04:53advanced concept of gas accounting that
04:55we have right now and it kind of kept
04:58can you give some examples of what kind
05:00of applications someone like you know
05:02that would motivate you a reason why
05:05you'd want to use something like a
05:06theorem what were the kind of things you
05:07want people to go to build on top of it
05:09back when I started the project I was
05:10thinking of fairly simple use cases and
05:12as an example actually give one at the
05:15foundation as using right now so the
05:18idea is simple let's say you have a
05:20multi-sig wallet and with Bitcoin one
05:23thing that you could do is you could
05:24have a multi-sig wall with the rules
05:26that say you need four out of seven keys
05:28in order to move any of the coins with a
05:30theory of though you could actually do
05:32something a bit more complex and you
05:33could say well any one of the key is is
05:36allowed to move a maximum of 1000 for a
05:39day out of the wallet but if you want to
05:41go above a thousand to get for a day
05:42then you have to go up to four out of
05:44seven so if you want to have more
05:47complex rules like that yeah and to
05:49think it's pretty obvious to why you
05:51might want to have those kinds of rules
05:52because you know it's actually very
05:54similar to how your debit card works
05:56where if you send small transactions
05:58they generally go through with lower
05:59security if you try and send something
06:00growing big then the bank might complain
06:02about it ask you for a phone call for
06:04some extra verification and so forth but
06:07with Bitcoin itself like you can't do
06:10that because the protocol has a kind of
06:13inherent statelessness to it like you
06:14can't remember the notion of well this
06:16guy already withdrew a 500 e 36 hours
06:19ago and another 500 ether to hours ago
06:21so we can't withdraw anything else right
06:23whereas with etherium you can actually
06:25have programs that remember some notion
06:27of long term estate so that's one
06:31just simple withdrawal limits another
06:34example would be any kind of financial
06:36I was also later on thinking more and
06:41about either non currency use cases or
06:44even a use cases that already calls sort
06:47of semi financial so non currency use
06:50cases I would take a domain name
06:51registration as one example so exactly
06:54the sort of things that name point is
06:55doing except with a theory of the theory
06:58is that like people could make a hundred
07:00different name coins that each one of
07:01them could have different rules that we
07:02could experiment somewhat and see which
07:04one of the rules makes the most sense
07:05and maybe different rules is gonna make
07:07sense of different contexts you could
07:09have like various different systems
07:10involving what I would see devices
07:11talking to each other the semi financial
07:14use cases all have to do with combining
07:17a payment element with some kind of like
07:21computing or information storage or
07:25manipulation element so one of the first
07:28examples I came up with is that you
07:30could have a contract which
07:33automatically incentivizes people to
07:35store a file for some particular time so
07:38let's say if I have an encrypted copy of
07:39my hard drive and I want to incentivize
07:41people to just store a backup of it just
07:43in case then I could come up with this
07:46scheme where I sort of hash the file
07:48into a Merkel tree stick the morkul word
07:50into a contract and then the contracts
07:52automatically enforces some rules and
07:54those rules might basically say you know
07:56if you can prove to this contract every
07:59single day that you're still storing the
08:02file and there's various different kinds
08:03of sort of cryptographic compacts proofs
08:05that you can do then the contract
08:06automatically pays you five cents a day
08:08or something similar that's another
08:11example of something that you can do and
08:13there's actually huge cases for
08:15computation so you can think of this in
08:17the context of different kinds of like
08:19verifiable cloud computing file storage
08:21file retrieval and a one of these use
08:24cases are actually even being kind of
08:26developed right now so if you look at
08:28projects like swarm golem
08:31if he reaiiy mutation market yeah a true
08:34bit and in a few others they're all
08:36based off of this principle there's also
08:40more kind of complex stuff that has to
08:42do with things like daos
08:44so much more complex kinds of contracts
08:48where you incorporate and a very complex
08:50rules about that or in control of
08:54digital assets and bear
08:55place you know that's an area where
08:57still think that you know for obvious
09:00reasons it's going to be a couple of
09:01years before we really learn how to do
09:03it well and safely but it's still one of
09:04those to them what can we interest in
09:06excited about yeah the talk I think the
09:09the back story you tell is is really
09:12important and about how this kind of
09:13organically grew out of Bitcoin like in
09:16some ways what you could what you said
09:18could be simplified to I tried building
09:21advanced applications on top of Bitcoin
09:23that didn't go so well and then I
09:25decided I needed a more generalized
09:27system that would let me build
09:29generalized applications so I created
09:31the theorem is that like that kind of
09:34the gist of it I'd say so
09:35Bitcoin has it of course a scripting
09:37language it's just it's deliberately
09:38really very limited right that's that's
09:42right yeah so when Bitcoin first came
09:45out it was kind of a miracle that
09:49Bitcoin even got off the ground in the
09:51first place and still stands here today
09:53with ten billion dollars of value tied
09:55up in it right like it was really a
09:57miracle of a combination of cryptography
10:00and economics that the system actually
10:02worked were almost right out of the gate
10:05you know it was born into existence in
10:07Satoshi's whitepaper and actually worked
10:09right right away as a production network
10:11like so I think it's important to
10:13understand that context when Satoshi
10:15first outlined Bitcoin he actually
10:20thought about including more in the
10:23scripting language there's a kind of a
10:24fancy way of saying the programming
10:26language in Bitcoin but because he
10:29wanted to make sure the thing just
10:31worked at first he intentionally made
10:33that programming language extremely
10:35restrictive on I think the best analogy
10:38to use for this is if you tried to
10:41program something into the Bitcoin
10:43blockchain it's kind of like programming
10:45using a ti-83 calculator or some very
10:48very restrictive language that's very
10:50primitive you know Mike Hearn built one
10:52of the more sophisticated applications
10:53of Bitcoin I thought lighthouse I think
10:55it was called and it was sort of a
10:57crowdfunding app and it he told me it
10:59took him you know he's a super super
11:01advanced you know Google engineer it
11:04took him like eight months and I think
11:07tell me if I'm wrong it's one of your
11:08like a t-shirt yeah yeah exactly it's
11:12like a 30 line script aetherium it's
11:13just Bitcoin just wasn't it was actually
11:15sort of deliberately designed not to
11:16have right it was deliberately kind of
11:18limited because for security reasons and
11:20all the reasons you have and I totally
11:23like don't blame since I was she for
11:25doing that because bitcoin was testing
11:28so many different completely new and
11:30concepts at the same time that nobody
11:33even knew if they were going to work if
11:35there was the concept of proof of work
11:37then there was the kind of social and
11:38economic concept of using you can extend
11:41the incentives in order to secure a
11:43ledger all these ideas around the
11:45centralization the way that the Bitcoin
11:49community would be able to kind of
11:50manage itself and all these different
11:52things that i am i think Satoshi bro
11:55definitely would have had way too much
11:57on his plate if you know we're getting
11:59hacked and collapsing in 2010 because
12:02all the same time as everything else was
12:04happening he's already one of the great
12:06inventions of modern applied computer
12:08science so yeah pretty impressive so
12:12Fred you were saying more though about
12:14yeah the back story yeah exactly so I
12:16mean if you if you're looking at this
12:19from like a historical perspective I
12:21would I would phrase it as a theorem is
12:23kind of standing on the shoulders of
12:24giants here namely satoshis white paper
12:27so if you've been sitting in the Bitcoin
12:30community for quite a while like Fattah
12:31like has or like I have you know maybe
12:34since 2010 or 2011 Bitcoin kind of
12:38became a big thing in 2012 let's say
12:41that's when coinbase was founded and
12:43it's been getting increasing notoriety
12:47but at the same time if you're embedded
12:50in the community you're kind of or an
12:51outside observer you've been sitting
12:53here for the last three four years and
12:56saying yourself okay well we're all the
12:58apps and when you ask that question then
13:02you try to sort of do a root cause
13:05analysis of it where you ask okay well
13:07why aren't there many that many apps
13:09getting built and I think the answer you
13:11arrive at is the scripting language in
13:13Bitcoin makes it really really
13:15challenging to build an app really
13:17really easily and in my mind that's kind
13:19now it's now a counter-argument right
13:21would be that this is the sort of layer
13:22two idea that in Bitcoin you could build
13:26these applications at a higher level in
13:29the stack and these things like
13:30lightning Network or I guess or whatever
13:31right I mean this isn't there the
13:34counter-argument architecturally is you
13:36could replicate a lot of what aetherium
13:38doing with another layer of Bitcoin yeah
13:40that's the argument although I would say
13:42here the answer there is kind of
13:44sometimes yes sometimes no so one
13:47example of this is that there was a few
13:51papers came out of Cornell over the last
13:54few months like one of them was they
13:55published this after good financial
13:56cryptography 2016 workshop that they
13:59were trying to create a provably fair
14:01lottery on top of Bitcoin and it turns
14:04out that if you have n players in the
14:07lottery then you basically have to have
14:09om n cubed collateral in order for the
14:11thing to actually be safe so you
14:13basically have to have every person
14:15submit enough collateral in order to
14:18cover everyone winning simultaneously
14:20and then you actually have to have every
14:23person submit enough collateral to cover
14:25everyone simultaneously covering
14:26everyone so the way the structure works
14:29just ended up being kind of incredibly
14:31complex and basically liked worthy of a
14:32research paper whereas in aetherium the
14:36same thing could be done as they they
14:39discovered was just Oh event either
14:41there's a very simple approach for doing
14:43you with a whole event squared
14:44collateral and there's an even simpler
14:46or a slightly more complex approach
14:48rather for doing was just over two times
14:49n collateral and the reason why you can
14:54go from here to there is because there's
14:56this sort of fundamental difference
14:59between the kinds of state that Bitcoin
15:02supports and the kinds of state that
15:04aetherium supports and it's this kind of
15:05bridge that's sort of implicitly our
15:07hearts to cross the Cornell researchers
15:10actually did ended up coming up with
15:12modifications to Bitcoin look one of
15:14them were was this concept of covenants
15:17no in basically what you said to meet
15:19addresses where if you stand through
15:21those addresses that or any transactions
15:24going from those addresses what
15:26themselves have to have particular
15:27restrictions on them but the idea just
15:30ended up being kind of very complex to
15:33I think in some cases there's this sort
15:36of fundamental notion of like a
15:38different kind of statefulness that's
15:39that really hard to jump over but you
15:42know in other cases you can kind of
15:44fudge your way over it and I suppose
15:45whitening networks definitely one of
15:47those examples just looking at like you
15:50know the reddit forums or theoria man
15:52our Bitcoin that the our aetherium
15:55community seems I would describe it as
15:57much more of a computer science
15:59developer community whereas the Bitcoin
16:01community you know for whatever reasons
16:03historical reasons seems much more kind
16:05of interested in politics you know I
16:07don't know Snowden WikiLeaks Federal
16:10Reserve is sort of like if you look at
16:12the kinds of things that are posted
16:14whereas it seems like the talk what
16:16you're building and the community is
16:17sort of more of a kind of engineering
16:19computer science kind of way of thinking
16:22of things is that is that fair to say
16:23I'd say so in general kind of etherium
16:28community politics by which I mean both
16:30sort of politics regarding what to do
16:32with the blocky and it's know and what
16:34ago issues in general as different and I
16:38guess you could call it sort of more
16:40mainstream in some ways it's sort of
16:44emphasizes different things it's
16:46definitely more focused on technology
16:49like also one of the comments that I've
16:51heard from a aetherium developers that
16:53she got the impression that if you're in
16:56people in his own words value optimality
16:59this essentially means like a notion of
17:01sort of technical pragmatism and kind of
17:04building things in the way that makes
17:07the most sense rather than you know the
17:08way that's trying to you know what do
17:11some kind of classes you should know
17:13original originalism based on white
17:14papers or code review Britain doesn't
17:16intend or whatever I mean that looks
17:18another big good difference which are
17:20just sort of and in this goes to like
17:22the hard pork and all the kind of
17:23discussions lately is the attitude
17:25towards change like you seem to take the
17:28attitude that that I would say is very
17:30similar to let's say how the Linux
17:31community approaches things which is you
17:33need to build new features you need to
17:36rapidly fix things you need to make
17:37changes like you need to stay up with
17:39the future it seems like your approach
17:41is what is sort of more similar to let's
17:44kind of classic open-source projects
17:47whereas the Bitcoin community has the
17:49attitude that they're sort of this you
17:51know fixed code that should only be
17:52changed if if it's absolutely required
17:55is that fair to say and and then maybe
17:57basic talked a little bit about the hard
17:58fork and all that yeah like I think in
18:01general these yeah if you're ium
18:04attitude is probably a combination of a
18:07to some extent I would even say that
18:09this also ties into politics because for
18:12Bitcoin like practically speaking there
18:14is this political elements to the
18:16community and if you're one of the
18:18people who's in it for the political
18:19elements then you know even if the
18:21lighting network happens never happens
18:23even if hard Forks never happened even
18:26if three years from now transaction fees
18:28for Bitcoin are like $1 even still you
18:30know it's good enough for donating to
18:33WikiLeaks it's good enough for dark web
18:36stuff it's good enough for any kind of
18:38like Internet privacy preservation use
18:41case or anything that's kind of really
18:42important I feel like it's like there is
18:45this sort of ethos that it's trying to
18:48create something that's high valid
18:50that's high value for a smaller
18:53community whereas I feel like the
18:55etherium community is trying to is more
18:58interested in building things that are a
19:00kind of medium value for a larger
19:02community and that carries with it a
19:04different set of constraints because
19:06like one of the consequences is that you
19:08know if if your IAM ends up having like
19:10a 20 minute blog time in transactions
19:12they're costing you know two and a half
19:14dollars and like user interfaces don't
19:17work well and we don't have scalability
19:19and so forth then that bit practically
19:21speaking that means that like nobody's
19:23going to use the system so in general
19:25what this means is that people view it
19:28as a project which is it's not something
19:31that's standing still conservatism as a
19:34philosophy you know in general is kind
19:36of about preserving things whereas the
19:37theory amidst the stomach project which
19:40is aimed at sort of moving towards
19:42something and the thing that it's moving
19:46toward like a large part if it doesn't
19:48here we require technical roots
19:50it requires things so like scalability
19:52it requires things like coming up with
19:54some solutions to a transaction speed
19:58Solutions to privacy it requires all
20:01these kind of changes and like people
20:04are more willing to accept you know that
20:06there's like uncertainty about what the
20:08ether supply is going to be that there's
20:10some one certainty about when is proof
20:12of state coming out Oh like what number
20:14of threats is there going to be in a
20:15theory I'm two point over for
20:17scalability and all those different
20:18statistics there are some people who are
20:21concerned like there are people who sort
20:23of come in from a big point mindset and
20:24they say well this thing over here
20:25committed to 21 million forever
20:27whereas this thing over here doesn't
20:29seems having a commitment at all and
20:30there's people for whom like that
20:32philosophy doesn't really sort of mesh
20:34too well I would argue that you know in
20:38general the etherium view is that it's
20:40definitely that the currency serves the
20:42technology and not so and not the
20:44technology serving the currency so yeah
20:47it's a probably a combination of all
20:49these different things the hard work and
20:53the and that the stuff that's been in
20:54the news is here in classic yeah I mean
20:56I think Vitalik just summed up pretty
20:58well it's basically you know we're
21:01seeing software development and money
21:05come together in a way that we've never
21:08thus were sort of facing these questions
21:11that we've never faced before on one end
21:13of the spectrum you have this idea right
21:15that the network should be immutable its
21:19very principles driven and that is the
21:23way that we can create the optimal sort
21:25of like digital money if you will on the
21:27other end of the spectrum you have more
21:30of like the startup mentality basically
21:31which is we're really really early in
21:33this space we should be trying whatever
21:35we can try to see if we can get product
21:39market fit basically and in the case of
21:42aetherium I think that means people
21:43building apps that other people in the
21:45world find useful so that that's another
21:48sort of way of looking at maybe the
21:50Bitcoin community versus the etherium
21:52community at the moment or even in the
21:54case of the hard fork the etherium
21:56classic community potentially versus the
21:58etherion community can you guys please
22:00explain that a little bit for a classic
22:02thing this for people who don't know
22:03yeah so the the basic gist of it is
22:08aetherium made a decision as
22:12a community to do what's called a hard
22:15fork a hard fork basically means you
22:19make a change to the software protocol
22:21that is not backwards compatible and the
22:24reason it's called the fork is because
22:27if you think about the blockchain as
22:29this string of transactions over time it
22:32quite literally forms a fork where when
22:36this change is made there's a new
22:38history getting created on one new
22:41version of the fork in another history
22:43that's on the other version of the
22:46software that's being run specifically
22:49what happened here is there was a
22:52decision to fork after the Dow which was
22:58a large decentralized application with a
23:01couple hundred million dollars in it was
23:03found to have a software bug and
23:06basically leaked you know let's call it
23:10160 ish million dollars worth of
23:12aetherium causing a bit of havoc on the
23:15network so there was this whole debate
23:18miners and users voted in a series of
23:21informal ways and ultimately I think to
23:26vittala credit there was a suggestion
23:29made by the foundation or by vitalik
23:31which was to do a fork users and miners
23:35were given the option of which software
23:37to run it seemed the majority of people
23:40decided that they did want to do this
23:42fork and so if theorem continues now as
23:49a necessary outcome of this as well
23:51there is another fork of the software
23:53which is now referred to as aetherium
23:55classic which is kind of the unmodified
23:57version of the of the blockchain and
24:04again I think you can you can sort of
24:06reduce this to people who support a
24:10theorem classic tend to have a hard
24:12ideological view that code is a law and
24:16that it's incorrect to modify
24:20transactions that have occurred in the
24:22past the etherium view would be more
24:27we haven't even reached product market
24:28fit yet we should be trying to make the
24:32system as good as possible and get
24:36ideological later on when it feels like
24:41the trade-off between moving fast and
24:44having extremely predictable outcomes
24:46for everything is more relevant but the
24:49talent may be curious to hear your
24:51thoughts as well I'll probably have to
24:53say that this old Fork and the
24:55circumstances around it are definitely
24:57something that was kind of unprecedented
25:02cryptocurrencies generally it's like I
25:04know there have been like Forks in much
25:08smaller blockchain so things that have
25:09like at sintered 20 million dollar
25:11market gaps that have like that much
25:13more sort of centralized and smaller
25:14development scheme where they were just
25:16able to pull it off and like in some
25:18cases and did well after that in some
25:20cases it it didn't do well but here you
25:22know we have something that's like by
25:24many metrics sort of second place among
25:27the cryptocurrencies space in general
25:29with the billion dollars of value with
25:31lots of different companies developing
25:32on top of lots of different people
25:34watching it yeah it's actually doing the
25:36thing that you know lots of people said
25:38should never happen which is what's
25:41called a controversial hard fork so it's
25:44not something that's particularly novel
25:46technically because if theory I'm
25:48actually already went through too hard
25:50for it even before this one was to
25:53implement the homestead changes and one
25:56was by PS after launch to implement so
25:58the difficulty Ice Age which is
26:01something I won't go into right now but
26:02generally it essentially has the purpose
26:04of kind of putting a sort of fighting at
26:06lifestyle on the etherium watching base
26:08so basically forcing us to kind of work
26:10to add new features at some point within
26:12the next year and a half but those Forks
26:15basically pass through completely
26:17smoothly with no issues whatsoever but
26:19here the difference is that there
26:20actually is a minority of people that's
26:22a non-negligible minority of people that
26:25actually really feel strongly about and
26:27of continuing the old version and on the
26:30Bitcoin side there is this political
26:31divide where a large portion of people
26:33believe that basically you know this
26:35sort of thing should never happen in
26:38it's something that's kind of in theory
26:40and disenfranchises people and so forth
26:42but before this moment it was something
26:45that seems to be a kind of completely
26:46unknown it seems like we really just
26:48have like no idea of exactly what would
26:50happen in such a scenario and now you
26:54know we've had is a situation where it
26:56finally has happened and we actually
26:58finally have seen what there was what
27:00the results are what the results could
27:02be like we've even basically see in the
27:05blockchain quite literally split into
27:06two and both Forks continue one kind of
27:09ends up having their own kind of prices
27:11on the market so this is all stuff that
27:14I actually theorized about quite a bit
27:16I had a meet up in Silicon Valley at the
27:18end of April where it talks about
27:19protocol governance and one of the
27:21scenarios that I had was that you know
27:23if there really is a kind of chaotic
27:25they sort of maximally chaotic hard for
27:28like nobody knows which side is going to
27:30kind of quote win right right up until
27:32the last second and people sort of
27:34persistent running both chains then the
27:37theory would be that eventually like
27:39there would be a few days of confusion
27:40and then people would at some point
27:43realized that you know basically upside
27:45a hat would agree that side B is not
27:47going away side B agrees that side a is
27:48not going away and made the some extent
27:50to make peace they try to do things to
27:52prevent transaction replay attacks they
27:54would end up being listed separately on
27:57exchanges and so forth and like the
27:59situation what's what's slowly
28:00normalized like it feels kind of like
28:03almost like a sort of like a national
28:05secession scenario although it's
28:07obviously kind of very very different in
28:09lots of ways but what I what I was
28:12theorized at the time was just theory
28:14and now we've actually sort of seen a
28:16situation actually sort of happen there
28:19were a lot of kind of theory interesting
28:21variables to it that I didn't anticipate
28:24so one variable that I didn't anticipate
28:27for example is that you know the
28:29etherium classic chain would be sort of
28:32almost dormant and nothing would happen
28:33for four days and then you'll get
28:35treated on Polonia X and then all of a
28:36sudden it would get big so the thing
28:39that I would I was kind of expecting was
28:42actually for you know either classic to
28:44not be a thing at all or for it's to
28:46kind of almost immediately hit the
28:48ground running but instead he had this
28:49sort of weird wag time and as also I
28:54kind of surprised by the level of
28:57adoption of classic especially given the
29:00way the way that the situation worked
29:02select in the hours leading up to the
29:04fort where it seemed like everyone was
29:05just kind of either agreeing to it or
29:08accepting it of course you know had we
29:11known that things would turn out the way
29:12they had turned out there were things
29:14that we would have done differently so
29:15like one of them would have been
29:16including you know transaction replay
29:18protections straight in the protocol
29:20directly and that's something that we
29:21may well end up doing like even for a
29:23pretty much every normal future hard for
29:25it possible we know that we know that we
29:26know what the benefits are financially
29:29right actually womb holders because you
29:31if you had up etherium interim plastic
29:33yeah yeah ET h plus ET c is above sort
29:38of ET c before the fork which is
29:40actually interesting because and I feel
29:43like this as one of their sort of great
29:46kind of political debates that's look it
29:48has parallels even like way outside
29:50crypto lands which is that people in
29:53generally you know like these sort of
29:54ideals of unity harmony network effects
29:58people kind of working together and
30:00doing the opposite of that is sometimes
30:03sort of perceived as either kind of
30:04weakness or confute or confusion or
30:07chaos and so forth whereas the thing
30:09that might not realize is that there are
30:11times when a split actually can increase
30:14total value outside of watching lands
30:16one of the examples of this is that
30:19there's been some fairly decent amount
30:21of research like you if you read some of
30:23the behavioral economist so a condom in
30:25and so forth they'll talk about this a
30:26bit which is that merger is very often
30:29ends up reducing the value of the
30:30companies that go into them so look
30:33there are times when you know coming
30:35together is a sort of negative value
30:36events and there's times when splitting
30:38up is a positive value of ads in this
30:40case it definitely does seem like it's
30:42it's actually been positive value on
30:44that now the question of course is why
30:46and you think the answer here is
30:50interesting because like the general
30:53sort of viewpoints I think in cryptic
30:54currency and before this is sort of
30:56notion of Metcalfe's law which is that
30:58the value of a network is kind of N
31:00squared and what's the number of the
31:01users and so you want to have what all
31:02the users on a single network to
31:04maximize value but here we've basically
31:07think that there's some cases where it
31:11actually goes in the other direction and
31:13in this case I think one of the reasons
31:15why is that if you look at what the
31:18heaviest sort of DC support is right now
31:20even if you look at you know Barry
31:22Silbert has been sort of very positive
31:24on a trellis Hoskinson has been very
31:26positive on it then I Chandler Guo has
31:29been switched to be late layer then even
31:34the caste associated comodo Institute
31:36which is like justiça yesterday it was
31:40positive on it so people crew up until
31:45this day we're pretty much like a
31:46die-hard Bitcoin maximalist since either
31:48Bitcoin or nothing else and you know
31:50even Barry Silbert even admitted to
31:52saying they like Kiba for easy see it he
31:54never bought like an other
31:55cryptocurrencies now they're starting to
31:57sort of be interested in getting into a
32:01theory on because either they feel like
32:03there's a sort of a version of a theorem
32:05that has their philosophy attached to it
32:08or something similar like that is one
32:11you know I think one of the reasons why
32:13people sometimes believe that you know
32:16this notion of kind of true of
32:18emphasizing choice is a good thing
32:20because you know if you have choices
32:22then you're able to kind of attract
32:24large groups of people that have
32:25different values it's actually similar
32:27to a Balaji Thrun of Austin's sort of
32:29voice and exit philosophy it's
32:31interesting it's sort of like you know
32:32an eBay and PayPal and it but it was
32:35like seventy five billion dollars before
32:36the split and then make eighty-five
32:38after the split there's actually a
32:39decent precedent for like Wall Street
32:41when companies split up all right I mean
32:43so the Bitcoin the conservative people
32:45can have their own version of aetherium
32:47and there's a you know everyone gets
32:51yeah I mean purely from a like things
32:53being tried in the world point of view
32:55which again I think is where we are just
32:57in the in the timeline of digital
32:59currency it feels like a good thing
33:02you know personal views about the hard
33:04fork aside or anybody's personal views
33:06about the hard fork aside I think it's a
33:08good thing that we're just trying
33:10multiple things in the world like I
33:12think it's very easy to think about
33:15these seemingly political issues and
33:19take a side and sort of
33:21vigorously defend a particular side but
33:24at the end of the day if you're just
33:25rooting for digital currency to do great
33:27things in the world and to figure out
33:29what's going to work best in the world
33:30as quickly as possible then it's
33:32actually a really great thing that
33:33multiple things are being tried even if
33:35you happen to agree with one approach
33:38and not agree with them so when it when
33:39Bitcoin was coming up people with
33:41Bitcoin projects would come to people
33:43like us venture capitalists to raise
33:44money with aetherium people have been
33:47crowdfunding much more and not coming to
33:49people like us which I might I would
33:51think is a bad thing I think it's a
33:52great thing I think it just sort of
33:54increases the amount of innovation but
33:55so so like vitalik you like etherium
33:57foundation itself I believe was funded
34:00through a period sales right and then
34:02the Dow and auger and I don't know
34:06there's a whole bunch there's a whole
34:07long list Fred and the targets can you
34:09guys have a idea that have already a
34:11file and sort of people by aetherium
34:14itself right because a lot of these
34:15things are built on top of a theorem and
34:17then part of it is just kind of the
34:18spirit of the community yeah so yeah I
34:22mean it's an interesting mechanism right
34:23like like as you're saying the sort of
34:26normal route for a company is let's get
34:30an idea together or let's hopefully get
34:31some some type of a prototype together
34:33we're gonna drop some on paper legal and
34:37corporation documents then we're gonna
34:38go to some angel investors or venture
34:40capitalists raise some money if all that
34:44goes well hopefully we IPO on the Nasdaq
34:47or the New York Stock Exchange at some
34:48point in the future right and this whole
34:51I and and this whole thing is kind of
34:53this closed process right where venture
34:56capital itself like a lot of the funding
34:59comes from a couple of guys sitting on
35:01Sand Hill Road out here in the valley
35:02and this you know just in the way that I
35:06think Bitcoin aetherium are sort of
35:08turning finance on its head into a
35:09software problem and a fundamentally
35:11open network instead of a closed network
35:13we're seeing the same thing happen for
35:15projects to get funded and financed so
35:20yeah I mean we've seen what five or six
35:23different projects at least raise a
35:25couple million dollars in funding just
35:27through crowdfunding on the blockchain
35:29and I think at first glance this stuff
35:35just a new way of financing a company
35:38and it goes a lot deeper than that it
35:41turns out that these things really
35:43aren't companies projects might not even
35:45really be the way or the right word for
35:47them they're really software protocols
35:51that are almost replacing a centralized
35:54a centralized company or what a
35:56centralized company in the world we know
35:58today would do so one example of this
36:03and who knows if this project will
36:05actually work or not is steam which is a
36:08decentralized news and social network
36:11and the model is instead of having a
36:14centralized company sort of create and
36:18extract rent from owning that network so
36:21like you know Facebook created a
36:24Facebook network and makes a bunch of
36:25money off of it every day through ads or
36:28reddit as the central hoster of that
36:30community it's a decentralized protocol
36:35where people can share in this case news
36:37information with each other and if you
36:41contribute to the network then you get
36:43paid in the native token to that network
36:45and that represents either a liquid
36:48payment you cash out for dollars or
36:50something that feels kind of like equity
36:52in the network where if the network's
36:54successful and it presumably goes up in
36:56value over time and you benefit as an
36:58early contributor so this is sort of
36:59like a whole new business model that I
37:03think we're seeing sort of emerge in the
37:07it's I think the best way maybe to
37:09describe it is if you saw internet first
37:11companies kind of in the 90s as a
37:14concept that creates entirely new core
37:17companies that look entirely new from a
37:19structure perspective although it
37:20doesn't make sense for everyone the same
37:22thing with mobile first companies in the
37:242000s I think we now have these sort of
37:25like blockchain or decentralized first
37:29projects where again it will redefine
37:31how people look at the business model it
37:34doesn't mean it makes sense for everyone
37:36yeah in general I've always been kind of
37:40a proponent of crowd sales as this sort
37:43of very experimental but interesting
37:45different way of getting funding for
37:48we been very hard to get funding for and
37:51I do think that they have their problems
37:53so like some examples would be just the
37:56fact that with a traditional crowd sale
37:58the incentives the developers are all
37:59upfront and there is here but it could
38:01be not as much incentive for the
38:03developers to kind of keep working on
38:04the project in the long term there's the
38:06fact that you know quite honestly a
38:08large number of them or for projects
38:09that aren't very good and some of them
38:12are even dishonest in various ways but
38:14like even still I think on the whole
38:17it's like bottom level protocols are
38:20something that's been like so horribly
38:22underfunded you know like in the
38:24mainstream world if you look at even
38:25something like the heartbleed bug which
38:27happens in war apart because open SSL
38:30security research was just like horribly
38:32underfunded like a world we are base
38:35where protocols actually do is sort of
38:38more naturally get developer attention
38:40seems like some a very attractive thing
38:43almost all widespread protocols are 20
38:4630 years old and we're government-funded
38:48right I mean because it's basically no
38:49funding since since then for protocols
38:52I'd probably make an exception for some
38:54things that just sort of ended up as
38:55being soft standards that what came out
38:57of Apple and Google but Apple and Google
39:00these days are in some ways acting more
39:03and more like sort of governments of the
39:04Internet in probably of both positive
39:06and negative sense of the word yeah
39:08Vitalik how would you sort of if you
39:11think about maybe the dynamics that
39:13would exist in the world if there are
39:15more protocols and less sort of
39:18centralized companies what do you what
39:20do you think the outcome of this like
39:22idea of creating app coins or
39:26crowdfunding or more protocol
39:28development at whatever angle you might
39:29take what does that look like in the
39:31world in 10 years I think that in
39:34general it definitely has the potential
39:37to make things kind of both more
39:40competitive and more efficient and kind
39:44of allow a lot of the benefits of
39:46network effects without the horn so if
39:48you know having assume let's say gonna
39:49topple a company control again an entire
39:52particular industry one of the examples
39:55that people are quite often bring up is
39:57you even looking at something like uber
40:01if you look at it naively you might
40:03think that there's only kind of two
40:04roles in it in the uber ecosystem which
40:07is that you're either a driver or you're
40:08a passenger but if you look at the
40:10ecosystem kind of more deeply that you
40:13realize that there's actually a lot more
40:14functions that are part of that sort of
40:17ecosystem so one of them would be
40:19filtering libraries so check even things
40:22like checking if the drivers are good
40:23checking that they have insurance
40:24they're credible in general there's
40:26providing a search engine providing an
40:29interface providing kind of ratings of
40:31verification for passengers number all
40:33other smaller tasks and one of the ideas
40:37in this protocol centric notion or a
40:40role has always been that you can take
40:42these kinds of industries they actually
40:44sort of decompose them in this kind of
40:46very multilateral way we allow people
40:48it's like here except really focus on
40:50you should be visual components we are
40:52you know the theory is that you might if
40:54there's some company that's really good
40:56at this you know warning that it might
40:57apply it's machine a warning to you
40:59could even think of it as a sort of
41:01special kind of mining we are like the
41:05tasks might be things like matching up
41:07drivers and passengers tasks might be
41:09things like you know flying finding
41:12efficient routes finding arbitrage
41:15opportunity is finding a cheaper ways to
41:18move some product from one place to
41:20another yeah it's a sort of unbundling
41:24almost right I mean it's it's uber
41:26without the central controller of the
41:29network uber and what you're seeing in
41:31this new model is a lot of the value
41:34that was once extracted by owning the
41:36network moves into sort of this general
41:39ownership model by all the people who
41:40contribute to the network in one way or
41:42another whether they program the
41:43software or they're you know they
41:47contribute their labels labor to the
41:48network or whatever it may be and then
41:50the business model as you're sort of
41:52saying really becomes one of these
41:53value-added services around the edges of
41:55the network whether it's verifying
41:58drivers are very familiar to the web or
42:00something right we have the the network
42:01his community and he's on top of it if I
42:04could just wrap it up by getting exact
42:06to talk about your predictions for the
42:08next 5-10 years about a theorem in
42:11you know I guess one what's the future
42:13of aetherium will it coexist with
42:15Bitcoin what are some of the
42:16applications you think might be built
42:18over the next 5-10 years you know what
42:22do you think the future of
42:22cryptocurrency is just the very
42:24beginnings just like 1985 in the
42:27internet and over 1995 ever where are we
42:30one of my favorite quotes with regarding
42:33the to the general sort of this is the
42:35easier X of the Y pattern is that
42:37history doesn't repeat but it does rhyme
42:39you might say that this is you know
42:41state this is equivalence the stage
42:43access some other technology why but in
42:45reality there's gonna be a lot of
42:47similarities and there's also going to
42:48be are evil are gonna be a lot of this
42:49fundamental differences so just that's
42:53one simple example and you know the
42:54internet or Bitcoin started off as
42:57almost being you know run by crypto
43:00anarchists the Internet's are talking
43:01run by the government and you know those
43:03are kind of polar opposites that you're
43:05gonna expect to see sort of fundamental
43:07structural differences coming out as a
43:09result of those of that kind of
43:11difference with regards to where we're
43:13actually at I think that in the last 6
43:17to 12 months we've actually been
43:19starting to see projects start forming
43:22around actual use cases and we've been
43:24starting to see all these different
43:26ideas get tried like in some cases it's
43:28some kind of what Kyoshi being run
43:30inside of a bank in some cases it's an
43:32actual startup making a product and
43:34actually if pushing it out to the public
43:36in some cases it's still projects that
43:38are under development and we've been
43:40seeing reason increasingly many
43:42industries including you know finance
43:44IOT whatever else so I think that in the
43:47next few years like we're going to start
43:50seeing there's some applications I don't
43:53think there's gonna be one killer app
43:54but I think there is going to be a few
43:56that we're gonna see start finally sort
43:58of breaking out into the mainstream and
44:00there are I think a few kind of limiting
44:04factors that have been preventing that
44:06from happening up and so now but there
44:08are sort of receding on a similar
44:09schedule what if that means just the
44:12technology in general being kind of
44:13perceived as being trusted so like how
44:15much people are willing to work with it
44:17at much people are willing to trust that
44:19how much people are comfortable with
44:20using yet there's obviously the sort of
44:22governments and regulatory issues
44:24there's also the user interface issues
44:27and like this practical security
44:30then there's the constraints that have
44:33to do with the technology itself so like
44:35there's a huge number of applications
44:37that unfortunately it's like most of the
44:39applications that people intends to be
44:41excited about know be viable of
44:43watchings give you fifty thousand
44:44transactions a second but what totally
44:46non-viable watchings can do 15 so you
44:48know aetherium bitcoin bitcoin classic
44:52and its bitcoin with segway like all
44:53four of those are just pretty much two
44:55really useless for a lot of what people
44:57want to do as a scalability just isn't
44:58high enough and that's just one
45:00practical thing that we're gonna just
45:01have to get over in some way i think
45:03that technological barrier is just going
45:05to have to be solved over the next few
45:07years or so and then there's general
45:09kind of ecosystem maturity and the sort
45:12of higher-level infrastructure around
45:13this technology is being sort of trusted
45:16enough in order for people to be willing
45:18to put like huge amounts of capital
45:19behind it yeah i mean it does it does
45:23feel like we're sort of hitting our
45:25stride in terms of people actually
45:27building interesting things in a way
45:29that we really haven't for the last
45:31three to four years in bitcoin land
45:34right like if it feels like we're just
45:36at the very very beginning of people
45:38figuring out what really useful services
45:41can i build using a blockchain
45:45specifically aetherium I think is where
45:46most of the interesting stuff is
45:47happening and what is the right kind of
45:50model around around that look like I
45:53mean it took quite a while for somebody
45:55to set the size bitcoin in the first
45:57place as a you know as an idea that
46:00combined a decentralized network with
46:03the right economic incentives to keep
46:05the thing running and I think we're
46:06basically seeing that but people are now
46:08applying it to all sorts of different
46:10ideas businesses applications and it's
46:13gonna take a while for people to hone in
46:16both the economic model for those and
46:19technologically just to build these
46:20things in the first place right like we
46:22saw with the Dow it's not so easy to
46:24build a decentralized application that
46:26has a bunch of money involved so if you
46:29look at like a lot of the projects that
46:31are being built right now let's take a
46:33Gore prediction market I mean they're
46:35they're sort of thinking about the
46:38things on a daily basis and struggling
46:39through them as one of the first people
46:41that are really building a decentralized
46:42app so it's you know how do I really
46:46easily do an initial crowd sale for my
46:49project like there's not a standard
46:51library out there that lets you have a
46:53smart contract that offers up some
46:55percentage of your app coins to be sold
46:58and have people send money to an address
47:00and then you distribute kind of the app
47:03coins based on how much each individual
47:05contributed on a pro-rata basis like
47:06that should be a standard software
47:07component that just isn't quite built
47:09yet other people are working on even
47:11like board governance libraries really
47:14more or less so it's like it's it's
47:18early and people are sort of building
47:19the tools I think in the way that we saw
47:21people building easy to use kind of
47:25software scaffolding or frameworks in
47:27the earlier days of web apps so like you
47:30know we don't have sort of templates for
47:34building apps in the way that things
47:36like iOS or Ruby on Rails or bootstrap
47:39gave us easy ways to kind of construct
47:42web apps out of different components
47:44that being said like I think as people
47:46hone that hone these things iteration
47:49will start to get quicker and I think
47:51the first thing we'll really start to
47:53see is this idea of like X without the X
47:56getting built you know we talked before
47:58about like uber without the uber I think
48:00that'll that'll be tried for a number of
48:02different ideas you can you basically
48:07can apply it to any business right now
48:08it's based on network effects and take
48:11the central owner or operator of the
48:12network out of the equation if for me a
48:15key moment will be the day I can't wait
48:17for is when there's an application bill
48:19that's used by people who aren't
48:21interested in cryptocurrency right and
48:23just like crosses over and you don't
48:26even realize it's built on top of a
48:27Syrian or a Bitcoin or whatever it might
48:29be in the same way that you know people
48:32that use web browsers and whatever go to
48:34Facebook don't think about HTTP and HTML
48:37and things like that it feels like it's
48:39that we're at a very exciting time now
48:41because I think a lot of the work that
48:42you guys both have done where we're now
48:45starting to see kind of this new wave of
48:47applications and at some point I think
48:49some of them will start to work and I
48:51is my hope my hope is we're sort of
48:52exiting the infrastructure era and
48:54entering the application era I guess and
48:56it seems like that but it's always hard
48:59to know I think realistically
49:01infrastructure and applications are both
49:03gonna continue progressing in parallel
49:05for the next few years or so yeah it's
49:08done but but we're starting to see more
49:10and more applications and it's and the
49:11infrastructure is good enough that you
49:13can start to build on top of it reliably
49:14yeah it almost feels like ben horowitz
49:17told this story to coinbase one time
49:21where he talked about how in the early
49:23days in netscape they had somebody asked
49:25them to come build an an online virtual
49:28shopping mall and that kind of caused
49:31them to ask all these questions of what
49:33the internet could do that they hadn't
49:35previously solved I think out of that
49:37has to sell the protocol for securely
49:40transmitting data over the internet was
49:41invented so I feel like we're in a
49:43similar stage where like there's enough
49:46tooling and infrastructure out there to
49:51build an application it's just
49:53challenging and then as developers kind
49:55of work through building these early
49:58applications more and more of that
50:00infrastructure will kind of get built in
50:01parallel I think as batalik is implying
50:03yeah I mean that's a people people a lot
50:05of people forget this now Netscape built
50:07JavaScript they built cookies they built
50:08SSL and they built them because they had
50:10to for their customers because of the
50:13kind of academic research internet
50:14before hadn't had needed those things so
50:16no you're right that these things will
50:17be built out as as the applications get
50:19more sophisticated the infrastructure
50:21will will continue to get built out yeah
50:23awesome I think we're out of time thanks
50:25so much for talaq and bread all right
![How To Succeed As A NEW & YOUNG Realtor [Deals Every Month + Luxury Listings]](/_next/image?url=https%3A%2F%2Fi.ytimg.com%2Fvi%2FrtrRghgTayc%2Fhqdefault.jpg&w=3840&q=75)
