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

the following is a conversation with vitalik buterin co-creator of and author of the white paper the launched ethereum and ether which is a cryptocurrency that is currently the second largest digital currency after bitcoin ethereum has a lot of interesting technical ideas that are defining the future of blockchain technology and vitalik 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 it's 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 five stars in apple podcast support on patreon or simply connect with me on twitter alex friedman spelled f-r-i-d-m-a-n as usual i'll do one or two minutes of ads now and never any ads in the middle that can 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story of bitcoin and the uh mystery of satoshi nakamoto you give a talk that started with sort of asking the question what did uh satoshi nakamoto actually invent maybe you could say who is satoshi 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 anonymous uh fellow who has uh shown himself to us only um over the internet uh just by first publishing the white paper uh for bitcoin and then releasing the original source code for bitcoin and then talking to the very early bitcoin community on bitcoin forums and and of interacting with them and helping the project along for a couple of years um and then at some point in late 2010 to early 2011 he disappeared uh so bitcoin is uh a fairly unique project and how it has this kind of mythical kind of quasi-god-like founder who just kind of popped in and did the thing and it disappeared and we've somehow just never heard from him again so in 2008 was so the white paper was the first do you know if the white paper was the first time the name would actually appear satoshi nakamoto believe 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 hal finny um because uh hell finney was kind of also active in the bitcoin community and as um how finney um in those uh two beginning years and uh how who is how thin he may be he is one of the people in the end of early cypherpunk community he was a computer scientist just yeah computer scientists cryptographers people interested in uh like technology internet freedom like those kinds of topics was it correct that i read that he seemed to have been involved in either the earliest or the first transaction of bitcoin yes the first transaction of bitcoin was between sister oshie and alfini 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 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 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 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 this is definitely interesting because i definitely just know a lot of people just by their internet handles and like to me when i think of them like i see their internet handles and one of them has enough profile pictures this kind of face that's kind of not quite human with a bunch of kind of psychedelic colors in it 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 cryptocurrency uh ethereum so on this topic if we just stick on satoshi nakamoto for 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 like your identity is known like i've just verified it but uh from your perspective what are the benefits in uh creating a cryptocurrency and then remaining anonymous like if it can psychoanalyze satoshi nakamoto is there something interesting there or is it just a peculiar quirk of him it definitely helps create this uh kind of image of this kind of neutral thing that doesn't belong to anyone and then you've created a project and because you're anonymous and because uh you also have uh disappear or as unfortunately happened to how finny if that is him he ended up i think dying of a lou gehrig's disease and he is in a cryogenic freezer now but like if you pop in and you d and then you create it and and you're gone and uh all that's remaining of uh that whole process is the thing itself then like no one can go and try to um and if interpret any of your other behavior and try to understand like oh the this person wrote this thing um in some essay at age 16 where he expressed particular opinions about democracy and so because of that this project is like is a statement that's trying to do this specific thing instead it creates uh this uh environment where the thing is what you make of it and it doesn't have the yeah right the the burden of your other ideas political thought and so on so so now that we're sitting with you do you feel the burden of being kind of the face of ethereum i mean there's a very large community of developers but nevertheless yeah is there like a burden associated with that there definitely is this is uh definitely a big reason why i've been trying to kind of push for the ethereum ecosystem to become more decentralized in many ways just encouraging a lot of kind of core ethereum work to happen outside of the ethereum foundation and of expanding the number of people that are making different kinds of decisions having multiple software limitations instead of one and all of these things like there's a lot of things that i've tried to do to and remove myself as a single point of failure because that is something that a lot of people criticism criticize me for um so if you look at like the most fundamentally successful open source projects 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 you feel like a lioness from from uh for the for linux for the colonel yeah 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 uh there's dictators who control all the money there's people who control organizations there's uh kind of high priests that just have themselves on their twitter followers what kind of leader are you would you say yeah in these days actually a bit more in the hype in the high priest direction than before yeah like i definitely actually don't do all that much of kind of going around and like ordering ethereum foundation people to do things because i think those things are important i if there's something that i do think is important that you i do just usually kind of say it publicly or just kind of say it to people and quite often projects just going to start doing it so let's ask the high philosophical question 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 you know we have points and 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 so 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 point 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 um easy to kind of set up and it serves a lot of useful functions and so it kind of just survives in the society as a meme for thousands of years it's useful for this storage of wealth it's useful for the uh exchange of value and it's also useful for denominating 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 if you're a student of history like how has this 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 you think about yeah and i think like the big thing in the 20th century is kind of we saw a lot more intermediation i guess like you know i mean the first part is kind of the move from being adding more of different kinds of banking and then i used we saw the move from and of dollars being backed by gold to dollars being backed by gold that's only redeemable by certain people the dollars not being backed by anything um to and it's just this uh nerf system where you have a bunch of free floating currencies and then people like um getting out of bank accounts and then those things becoming electronic people getting accounts with payment processors that have account um bank accounts so so what what do you make of that is that's such a fascinating philosophical idea that money might not be backed by anything what is that like fascinating to you that money can exist without being backed by something physical it definitely is like what do you make of that like how is that possible is that stable if we look at the future of human civilization is it possible to have money at the large scale at such a hugely productive and rich societies be able to operate successfully without money being backed by anything physical i 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 like you could theoretically imagine that if all of the employees wanted to they could kind of come together they would quit and you know start working on twitter 2.0 and then the value of um and just kind of build the exact the the exact same product of course possibly build a better product and then just kind of continue on from there and the original the original twitter would kind of just not have people left anymore right like the there is theoretically kind of code and like ip that's owned by the company but in reality like 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 these employees in reality aren't going to switch all at once and also the users aren't um all going to switch them at once because it's just difficult for them to switch at once and so there's these kind of meta-stable of equilibrium in the interactions between thousands and 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 of grasp of the sort of the fun fundamental dynamic like the physics of that stickiness it seems to work but uh and i think some of the cryptocurrency ideas kind of rely on it working yeah it's uh you know it's the sort of thing that's definitely been uh economically modeled a lot like one uh the kind of analogy of something as similar that uh you often see in textbooks as like what is a government like if for exa like 80 percent of uh 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 and some other thing is the government and they just kind of start acting like it then that will kind of become the new reality and then the question is well what happens if and if between zero and 80 people or and 80 of people start believing that and like what is uh the thing you also you see is that if there is one of these kind of switches happening this 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 then suddenly becomes quite safe too and so this definitely is the sort of thing that you can kind of try to analyze and understand mathematically but one of the kind of 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 uh the network affects the the fact that human beings at a scale like millions billions can share even the idea of currency like all agree that's just uh i know economics can model it i'm a skeptic on economic and uh it's like uh so my my favorite sort of field maybe recreationally psychology is trying to understand human behavior and i 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 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 um it is a big motivator and it's uh one of the closest things you have to a universal motivator i think because ultimately in like almost any person in the world if you ask them to do something like they'll be more inclined to do it if you also offer some uh offer the money right and that's uh 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 of who that person is and of what their situation is the relationship between the motive and the action and these other things what do you think is in the interplay of the other motivator from like nietzsche perspective is power do you think money equals power do you think those are conflicting ideas do you think i mean 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 explicitly be about money a lot of uh things that people spend money on are ultimately about a social status of some kind um so i mean i definitely view those two things as kind of interplaying and then there's also money as just a way of uh 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 up well one of the big benefits you get from going up to six million dollars is that now instead of uh being below the guy who has five you're above the guy who has five so you think money could be kind of uh in a game of life it's also a measure of self-worth it's like how we it's definitely how uh how a lot of people perceive it define ourselves in the hierarchy of yeah and i'm not yeah not saying it's kind of a healthy thing that people define their self-worth as money because it's definitely kind of far from a yeah perfect indicator of like how much you like value you provide to society or anything like this but i i definitely think that like 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 does the perfect world look like i guess like the economists say utopia would be one where kind of everything is an of incentive aligns in this um in the sense that there aren't enough conflicts between what satisfies your goals and kind of what is uh good for and everyone in the world um in the world as a whole what do you think that would um look like does does that mean they're still poor people and rich people there's still income inequality do you think sort of uh marxist ideas are strong do you think sort of ideas of objectivism uh like where the market rules is strong like what is there is the different economic philosophies that just seem to be reflective of what utopia would be so i definitely think that existing economic philosophies do end up kind of systematically kind of 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 yeah because like the idea is with kind of money as this game where you know i was a few coins 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 kind of model works really well when the thing that we're using money to incentivize the set 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 contacts kind of off the internet there's actions that kind of 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 who the benefit goes to right so for example this podcast you know we publish it and when it's published you don't have any fine grains 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 will 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 um so there's a lot of things in the world where you have these kind of individual actions with have concentrated costs 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 kind of tangentially connected to crypto but kind of theoretically outside of it that i work on is this sort of mechanism called quadratic funding um and the way to think about it is and i've imagine a point system where if uh like if one person gives a coin gives coins to one other person then it works the same way as money but if multiple people uh give coins to one person and they do so anonymously so it's kind of not in consideration for a specific service to that person themselves and then the number of coins received by that person is kind of greater than just the sum of the number of coins that have given by those different people um so the actual formula is you take the square root of the amount that each person gave then you add all the square roots and then you had to square the sums 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 and so they go and all kind of throw a coin um 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 uh of square roots of these tiny amounts is them that this actually kind of compensates for the tragedy of the comments right in this there's even this kind of mathematical proof that it sort of optimally compensates for it what is the tragedy of the common um this is just this idea that like if there is this uh 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 they only get a small part of the benefit from their contribution but they pay the full cost of their contribution in which context does this um sorry what is the term quadratic quadratic funding like what's in which context is this mechanism useful so obviously you said to to combat the tragedy of the commons but yeah in which context do you see it as useful actually practically yeah theoretically public goods in general right so like like services like what what are we what are we talking about what's the public yeah so within the um ethereum ecosystem for example like we've actually tried using this mechanism i yeah wrote a couple of articles about the cinevon vitalic.ca where i go through some of the most recent rounds and it's been really interesting um some of the top ones that people supported there were things like kind of just online user interfaces that make it easier for people to interact with ethereum there was documentation there were podcasts there were enough software kind of clients like kind of implementations of the ethereum protocol of privacy tools just like lots of things that are useful to lots of people when a lot of people are contributing like funding a particular particular entity yeah uh that's really that's really 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 um and and so each individual person's uh contribution gets multiplied by n right because you have n people yeah um and so that kind of perfectly compensates for the kind of kind of anti-1 uh tragedy of the commons i just wonder if the the squared part is yeah how fundamental no it is um and i'd uh recommend you go to uh on vitalik.ca i have this article called a quadratic payments a primer and highly recommended it's kind of at least my attempt so far and explaining 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 uh the byzantine generals problem in byzantine fault tolerance in general that i i bitcoin was taking steps to uh providing a solution for so the byzantine generals problem it's this uh paper that uh leslie lamport uh published in 1982 where he has this thought experiments where if you have two generals that are have 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 message messengers between each other but those messengers kind of could get sniped by the enemy on the road some of those messages could end up being traders and if things could end up happening and with just two mess generals it turns out that there's kind of no solution in a finite number of rounds that guarantees that they will be able to coordinate on the same answer um but then in the case where you have more than two generals and then leslie analyzes cases like um are the mess and messages kind of just oral messages are the messages kind of signed messages so i can give you a signed message and then you can pass along that signed message and the third party can 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 um among those generals kind of whether like under one conditions you actually can't agree when to launch an attack uh so it's actually a big misconception that the the byzantine general's problem was unsolved so listen lanport solved it the thing that was unsolved though is that all of these solutions assume that you've already agreed on a fixed list of who the generals are and these generals have to be kind of semi-trusted to some extent they can't just be anonymous people because if they're anonymous then like the enemy could just be 99 of the generals so right then in the 1980s and the 1990s kind of the general use case for distributed system stuff was more kind of enterprisey stuff where you could kind of assume that uh you know you know who the nodes are that are running these nf computer networks so if you wants to have some in a decentralized computer network that pretends to be a single computer and that you can kind of do do a lot of operations on then it's made out of these kind of 15 specific computers and we know kind of who and where they are and so we have a good reason to believe that say at least 11 of them would be fine and then it could also be within a single system exactly almost a network of devices sensors so on like in airplanes and i think uh like flight systems in general still use these kinds of ideas yep yep um so that's the 80s that's the it is the 90s now the cypherpunks had a different use case in mind which is that they wanted to create a fully a decentralized global permissionless currency and the problem here is that they didn't want any authorities and they didn't even want any kind of privileged 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 satoshi had this is uh kind of going back to the that presentation i made at defcon a few months ago where i said that the thing satoshi invented with crypto economics is this uh really neat idea that you can use economic resources to kind of limit identity how many identities you can get and the uh if there isn't any existing decentralized digital currency then 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 uh kind of clearly calculable amount of computational power to solve you get an identity and then you solve five of those puzzles you get five identities and then these are the identities that we run the consensus algorithm between so the proof-of-work mechanism you just described is like the fundamental idea proposed in the in the white paper that defines bitcoin uh what's the idea of consensus that we wish to reach what why is consensus important here what is consensus so the goal here in just simple technical terms is to basically kind of wire together a set of a large number of computers in such a way that they yeah kind of pretends to the outside world to be a single computer where that single computer keeps working even if a large portion of the kind of constituents the computers that make it up break and kind of break in arbitrary ways like they could shut off they could uh 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 uh that the sender has enough coins to pay for the transaction and verifies that the digital signature is correct and if the check's passed then it subtracts the coins from one account and adds the coins to the other account roughly so first of all the 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 i mean is is it is it obvious to come up with that you can use uh you can exchange basically computational resources for for identity it's uh it actually has a pretty long history it was uh first proposed in a paper by uh cynthia dwork and [Music] neor in 1994 i believe and the original use case was uh 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 the blockchain sure so the blockchain i mean my way of thinking about it is that it is this kind of system where you have this kind of one virtual computer created by this a bunch of these uh uh nodes in the network um and the reason why the term blockchain is used is because the data structure that these systems use at least so far is one uh where they um even if different nodes in the network periodically publish blocks and a block is a kind of list of transactions uh together with a pointer like a hash of a yeah a previous block that it builds on top of um and so you have a series of blocks that that nodes in the network create where 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 or is there a lot of possibilities of different ways to make sure there's no funny stuff going on there are indeed a lot of possibilities um so in a kind of just simple architecture as i just described the way the fault tolerance happens is like this right so you have a bunch of nodes and they're just happily and occasionally creating blocks building on top of each other's uh blocks and let's say you have kind of one block we'll call it kind of block one and then someone else builds another block on a steel called 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 they 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 um so you have block one which has two children block two and then block two prime now this might sometimes even happen by random chance if you know two nodes in the network just happen to create blocks at the same time and they don't hear 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 the no in the bitcoin system uh the nodes follow the longest chain um so if um this um attack had happened uh and if when the uh original chain had more than two blocks on it so if it was trying to kind of revert more than more than two blocks then everyone would just would just ignore it yeah um and everyone would just keep following the regular chain but here you know we have block two and we have block two prime and so the two are kind of even and then whatever block um 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 3 is the new head and block 2 prime is just kind of forgotten and then everyone just kind of peacefully builds on top of block 3 and the thing continues so how difficult is it to mess with the system 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 it truly like what's your is there is there a good number serious um 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 23.2 and 50 percent of what of all of the computing power in the network sorry so 22 and 23. between 23.2 and 50 and 50 are can be uh compromised so like once you're once your pers your portion of the total um computing power the network goes above the 23.2 level then there's kind of things that you can mean things that you can potentially do and as your percentage of the network kind of keeps going up then the your abilities as you mean things kind of goes higher and then if you have above 50 then you can just break everything so how hard is it to achieve that level like it seems that so far historically speaking has been exceptionally difficult so this is a challenging question um so the economic cost of uh acquiring that level of stuff from scratch is uh fairly high i think it's uh 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 uh solve these uh puzzles is to do the mining these days small tangent uh so obviously i work a lot in deep learning with gpus and asics for that application and i tangentially kind of hear that so many of these you know sometimes nvidia gpus are sold out because of this other application like what do if you can comment 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 to do the actual computation for the the proof of work sure so in the case uh and bitcoin and ethereum are a bit different uh so in the case of bitcoin there is an algorithm called uh sha256 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 are just like specialized circuits that contain kind of circuits for evaluating this hash over and over again and you have like millions or billions of these hash evaluators since just stacked on top of each other inside of a box and you just keep on running the box 24 7. in the asx there's literally specialized hardware designed for this yes oh this is we live in an amazing world another tangent and i'll come back to the basics but uh does quantum computing throw a wrench into any of this very good question so uh quan some computers have two main kind of families of algorithms that are relevant to cryptography one is a shores algorithm ensures algorithm is one that kind of completely breaks the hardness of uh some specific kinds of mathematical problems so the one that you've probably heard of is it makes it very easy to factor numbers uh so like figure out kind of what prime factors are that kind of that you need to multiply together to get some number even if that number is extremely big um sure's algorithm can also be used to break elliptic curve cryptography um it can break like any kind of hidden 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 kind of major use of uh things that shore's algorithm breaks we already know of uh quantum proof alternatives right now we don't use these quantum proof alternatives yet because in many cases they're five to ten times what's efficient but and uh the crypto industry in general kind of knows that this is coming eventually and it's kind of ready to uh take the head and switch to that stuff when we when we have to the second algorithm that is relevant to cryptography is grover's algorithm and and grover's algorithm might even be kind of more familiar to ai people that's basically usually described as solving search problems um but the idea here is so that if you have a problem over the form finds a number that satisfies some property um then if with a classical computer you need to try kind of end times before before you find the number then with a quantum computer you only need to do square root of n computations and grovers could potentially be used for mining but there's two possibilities here one is that grovers could be used for mining and whoever creates the first working quantum computer that could do grovers we'll just mine way faster than everyone else and we'll see another round of uh what we saw when asics came out which is that's kind of the new hardware 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 quadratically faster quadratically faster which is not sort of uh it's not game-changing i would say it's like asics like you said it would be exactly yeah so it would not necessarily break proof of work as of that's right yeah now the other kind of possible world right is that quantum computers have a lot of overhead there's a lot of complexity involved in maintaining quantum states and there's also as we've been realizing recently making quantum computers requ actually work requires kind of quantum era 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 grovers which would be kind of sad but which would also mean that given proof of work would just keep working fine so they're beautifully put so so proof of work is uh the core idea of bitcoin is there other core ideas before we kind of take a step towards the origin story and the ideas of ethereum is there other stuff that uh were key to the white paper of bitcoin there's proof of work and then there's just the cryptography just kind of public keys and signatures that are used to uh verify transactions those two really big things so then what is um the origin story maybe the human side but also the technical side of ethereum sure so i joined the bitcoin community in uh 2011 and i started by just writing i first wrote for this sort of online thing called bitcoin weekly then i started writing for uh bitcoin magazine um and uh sorry to interrupt you have this funny kind of uh story true or not is uh 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 witty uh i mean the event is true of the fact that that's the reason i do decentralization is woody maybe just a small tangent d have you always had a skepticism of centralized control is that some degree yeah has that feeling evolved over time or is that just always been a core feeling that decentralized control is the future of a human society and it's definitely been something that felt very attractive to me ever since i could afford that such a thing as possible possible yeah so great so you are you join the bitcoin community in 2011 you said you began writing so what was next started writing uh moved from high school to university halfway in between that and spent a year in university um then at the end of that year i dropped out to to do uh bitcoin things uh 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 uh first in new hampshire and then spain other european voices um israel and san francisco and along the way and i've met a lot of other people that are working on different bitcoin projects and when i was in israel there were some very smart teams there that were working on ideas that people were starting to kind of call bitcoin 2.0 so one of these were covered coins which is basically saying that hey let's uh not just use the blockchain for bitcoin but let's also kind of issue other kinds of assets on it and then there was a protocol called mastercoin 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 mastercoin protocol could be improved by kind of generalizing it more right so the master 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 that just lets you specify a mathematical formula for kind of who 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 um what's a financial contract so the this is just generally an agreement where kind of either one or two parties kind of put collateral kind of in um 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 it could involve other things but they kind of get different amounts of uh of assets out that it'll just depend on things that happened so a contract is really a financial contract is the is at the core it's the it's the core interactive element of a financial system yeah there's yeah 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 uh 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 seven dollars or for every dollar that thing goes down you give me seven dollars or something like that and but the main idea that these contracts have to be enforced and trusted 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 uh so you were seeking to kind of generalize this basic uh framework of contracts so what does that entail so what what technically are the steps to creating ethereum so i guess just to kind of continue a bit with this master coin story sure um so started by end of giving ideas for how to generalize the thing and eventually um this turned into a much more kind of fully fledged proposal that just says hey how about you scrap all your features and instead you just um 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 it seems like something that's we're not going to be able to put onto our roadmap 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 language i just called it ultimate scripting great uh so then i kind of went through a couple more rounds of iteration and then the idea for ethereum itself started to form um and the idea here is that you just have a blockchain where the core unit of the thing is what we call contracts it's these and if accounts that can hold assets and like like 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 kind of ether and the currency inside ethereum and it goes after that um 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 the incentive agreement self-executing agreements self-executing it's 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 um and originally i actually thought that this would be a thing that i would kind of casually work on for a couple of months publish and then go back to university um then i released it and a bunch of people or i released a white paper white paper there is there the idea the white paper um a whole bunch of people came in offering to help a 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 developments log of making something that lives up to this sort of much higher level of expectations what are the some of the is it fundamentally like software engineering challenges it was there social okay so there's social so so what are the biggest interesting challenges that you've learned about human civilization and in software engineering through this process so i guess one of the challenges for me is that like i'm one of the kind of apparently unusual geeks who was kind of never treated with anything but kindness in school yes um 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 um but the um and if the algorithm that i used for finding co-founders for this thing was not very good it was sort of literally one computer scientist called the greedy algorithm it's kind of the first 15 people who applied back offering to help kind of are the co-founders oh you mean like literally the the the people that four will form to be the the founders co-founders of the community the algorithm i like how you call it the algorithm yeah um and so what happened uh was that uh these um like especially as the projects 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 um 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 uh just about six months later led to this big governance crisis and then we kind of reshuffled leadership a bit and then uh 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 if you're 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 uh i don't know if you know i also like just think that most of the world most of the people in the world are well intentioned but the way those intentions are realized may perhaps come off as uh yeah as as negative like what uh is there is there a hopeful message here about creating a governance structure for cryptocurrency that uh where everyone gets along and after about four rounds of reshuffle i think we've actually come up with something that seems to be pretty stable and happy um i think i mean i definitely do think that 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 ego has a you think ego has a use like is ego always bad it seems like it sometimes does but then the ethereum research team i feel like we've found also kind of a lot like a lot of very good people that are just and if primarily you're just interested in things for the technology and uh you know things seem to just generally be going quite well yeah when you're when the focus and the passion is in the tech so on the so that's the human side of things but the technology side like what have you learned what have been the biggest challenges of bringing ethereum to life on the technology side so i think first of all just uh you know there's like the first law of software development which is that when someone gives you a timetable let's switch the unit of time to the next largest unit of time and had one and like we basically fell victim to that um and uh and so instead of taking those like three months it ended up taking like 20 months to watch the thing um and that was just i think underestimating the sheer technical complexity of the thing um there are 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 uh more proof of stake is to this uh alternative consensus mechanism where instead of uh having to waste a lot of uh computing power on solving these mathematical puzzles that don't mean anything you kind of prove that you have access to coins inside of the system and this uh and it 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 um i know that a lot of people say that the idea of proof of stake is really appealing can you maybe linger on a longer explain what it is sure so basically the idea is like if i kind of lock up a hundred coins then i turn that into a kind of quote virtual miner and the system itself kind of automatically and randomly assigns that in a virtual miner the right to create blocks at particular intervals and then if someone else has 200 coins and they walk on the lock there's 200 coins then they get a kind of twice as big virtual miner they'll be able to create their blocks twice as often right so it tries to kind of do similar things to proof of work except instead of the thing and rate limiting your participation being your ability to crank out uh solutions to kind of hash challenges the thing that really limits your participation is kind of how much coins you're locking into this mechanism okay so interesting so that that limit of participation doesn't require you to run a lot of compute does that mean that the richer you are so rich people um 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 common critique i think my usual answer to this is that like proof of work is even more of that kind of system exactly yeah because i didn't mean it and that statement is a criticism i think you're exactly right that's equivalent the proof of work is the same kind of thing but in the proof of work you have to also use physical resources yes and uh burn computers and burn trees and all of that stuff is there um a way to mess with the system of the proof of uh proof of stake there is but you will once again need to have uh a very large portion of all the coins that are locked in the system to do anything bad got it so yeah and just to that maybe take a small tangent one of the criticisms of cryptocurrencies the fact that it gets for the proof-of-work mechanism you have to use so much energy in the world yes is that one of the motivations of proof-of-stake is to move away from this definitely like what's your sense of the uh maybe i'm just under-informed is there like legitimately environmental impact from this yeah uh so the latest thing was that bitcoin consumed as much energy as the country of austria or something like that yeah and then ethereum is like right now maybe only like half an order of magnitude smaller than bitcoin i've heard you talk about uh ethereum 2.0 so what's the what's the dream of a theorem 2.0 what's the status of proof of stake is the mechanism that ethereum moves towards and also how do you move to a different mechanism of consensus within a cryptocurrency so ethereum 2.0 is a collection of major upgrades that we've wanted to do to ethereum for quite some time the two big ones uh one is proof of stake and the other is that we call sharding sharding solves another problem with blockchains 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 every participant in the network only downloads and verifies a small portion of transactions and then you kind of randomly distribute who gets how much work um and because this 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 kind of very redundant and very secure that's brilliant how hard is that to implement and how hard is uh proof of stake to implement like on the technical level yeah software level proof of stake and charting are both challenging um might say sharding is a bit more challenging the reason is that proof of stake is kind of just a change to like how the consensus lawyer works shorting does both that but it's also a change to the networking layer um 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 in the client hears it like from uh on the networking layer and so instead we have to have enough 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 a more complex architecture and it's definitely the sort of thing that has not yet been done in cryptocurrency so most most of the networking layer in uh cryptocurrency is you're shouting you're like broadcasting messages and this is more like ad hoc networks like yeah you're shouting within smaller groups smaller group but do you have like a bunch of subnet like exactly and you have to switch between oh man i'd love to see the uh so it's a beautiful idea uh so from a graph theoretic perspective but just the software like who's responsible is the ethereum project like the people involved would they be implementing like what's the actual you know this is like legit software engineering uh who like how does that work how do people collaborate build that kind of project is this like almost um like is there a a software engineering lead is there is like is it a legit almost like large-scale open-source projects there is yeah so um we have uh someone named danny ryan on our team who's 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 right the reason is that um like we also have this unique kind of organizational structure where the ethereum foundation itself kind of does research in-house but then the actual implementation is done by independent teams that are separate companies and they're located all around the world and like fun places like australia um and so you know you kind of just need a bunch of kind of almost non-stop cat hurting to just keep getting these people to kind of talk to each other and kind of implement the spec make sure that everyone agrees on what's going on and kind of how to interpret different things so how far into the future are we from these two mechanisms in ethereum 2.0 like what's what's your sense of the timeline keeping in mind the previous comments you made about the sort of uh general curse of software projects so ethereum 2.0 is split into three phases so phase zero just creates a proof of stake network and it's actually separate from kind of proof of the proof of work network at the beginning just to kind of give it time to grow and improve itself do people get to choose sorry to interrupt the people get to choose i guess yes they get to 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 sharding of a computation and then after that there is kind of the merger phase which is where the yeah and if the accounts uh kind of smart contracts like all of the activity on the the existing ether1 system just kind of gets cut and pasted into eth2 and then the proof of work chain gets forgotten and then and the things all the things that we're living there before you just kind of continue living inside of the proof of stake system so for timelines um phase 0 has been kind of almost fully implemented and now it's just a matter of a whole bunch of security auditing and testing um my own experience is that right now it feels like we're at about a phase comparable to when we were doing uh the original ethereum launch when we were maybe about four months away from lunch but that's just a hunch then that's just that's just a hunch yeah so how you know it took it took like over a decade for people to move from python to python three how do you see the move from like at this phase of zero of for for different consensus mechanism do you see there being a a drastic phase shift and people just kind of jumping to this better mechanism so in phase zero i don't expect too many people to do much because in phase zero and phase one the new chain negative deliberately enough 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 each one and then when the merger happens then the merger as they operation that happens all at once i mean so instead of one of the benefits of i can sense a system that like on the one hand you have to coordinate the upgrade but on the other hand the upgrade can be coordinated so what's casper ffg by the way um casper ffg is the consensus algorithm that we are using for the proof of stake is there something interesting uh specific about casper ffg like some beautiful aspect of it that's uh there he is so casper ffg combines together kind of two different schools of like it's not algorithm design uh so the general two different schools of the of the design are right one is uh 50 fault tolerant but dependent on network synchrony so fifty percent volume fault tolerant but it didn't tolerate up to fifty percent of faults but not more but it depends on an assumption that all of the nodes can talk uh talk to each other within some of a limited period of time like if i send the message you'll receive it within a few seconds um and the second the school is 33 fault tolerant but safe under asynchrony which means that like if we agree on something then that thing is finalized and even if the network goes horribly wonky the second after that thing is finalized there's no way to revert that thing um and that's fascinating how you would make that happen it's uh definitely quite clever um i'd recommend the casper ffg paper um if you just search like archive as in like a rx iv and casper ffg it's that's an archive the paper is an archive yeah yeah who are the authors um myself and uh virgil griffith that's awesome take a small tangent this idea of just putting out white papers and papers and putting them on archive and just putting them publicly that is that at the core is that a necessary component of particular currencies that the tradition started with uh uh satoshi nakamoto is like 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 kind of mandatory for crypto because like crypto is all about making systems where you know you don't have to trust the operators to trust that the thing works and so if anything behind how a system works is closed-sourced and that kind of uh 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 just kind of forces openness but also openness just has proven to be a really great way to collaborate and then there's actually a lot 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 etheresearch that's like e-t-h-r-e-s-e-a-r and then dot c-h um and there we publish uh kind of just ideas in a form 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 often 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 in like five to ten lines and they don't really need the whole formality of a paper exactly they don't require the kind of like ten pages of in a filler and so introduction conclusion is not needed yeah and so instead you just kind of publish the idea and then like people giggle comments on it and it's brilliant yeah this has been so great for us i think i interrupted you was there something else on casper ffg yeah so just casper ffg is just kind of combines together these two schools um and so basically it creates this system where if you have uh more than 50 that are honest then um and you have a network synchrony then the thing kind of goes as a chain but then if network security fails then kind of the last few blocks in the chain might kind of get replaced but anything that was finalized by this kind of more asynchronous process uh gets uh like can't be reverted and so you essentially get a kind of best of both worlds between those two bottles okay so i know what i'm doing to them i'm going to be reading the casper refugee paper uh apologize for the romanticized question but what to you are some or the most beautiful idea in the world of ethereum just something uh 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 um i think one of the things that i really love about ethereum is also this concept of composability so this is the idea that like 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 you don't even need to talk to me right so one really fun example of this is there was this center game on ethereum uh called a cryptokitties that just involved kind 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 cryptokitties and they just created the whole thing just like as an ethereum contract that you would send these uh these tokens that are defined by this other ethereum contract and for the interoperability to happen like the projects didn't don't really need to like the teams don't really need to talk to each other you just kind of interface with the existing program so it's uh arbitrarily composable in this kind of way so you have different uh different groups that could be working so you could see it scaling to just outside of dragons and kitties it could be you could build like entire ecosystems of software yeah it's kind of weird i mean especially in the the decentralized finance space that's been popping up the last two years there has been a huge amount of really interesting things happen as a result of this is it particular 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 one dollar but they're kind of backed by a crypt uh cryptocurrency um then there's decentralized exchanges um so when as far as the decentralized exchanges goes up there's this uh really interesting construction that has existed for about one one and a half years now called uniswap so what unit swap is let's say a smart contract that holds balances of uh two tokens we'll call them token a and token b and it maintains an invariant 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 the 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 trade you just like pick some different any 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 b tokens you get or vice versa and that's just and then kind of the slope at the current uh point on the curve kind of is the price um and so that just is the whole thing and that just allows you to kind of 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 uh the uh the fundamental the the the distributed application infrastructure and allows that somehow yes so this is a smart contract meeting this is all a computer program that's just running on ethereum smart contracts too are just fascinating they are okay do you think cryptocurrency may become the main currency in the world one day so where do you think we're headed in terms of the role of currency the structure type of currency in the world i definitely expect some fiat currency is to continue to exist and continue to be strong and i definitely expect kind of fiat currencies to also digitize in their own way over the next couple of decades what's fiat currency by the way oh just like things like us dollars and like dollars and euros and yen and these other things and they're sort of backed by governments yes but i also expect enough cryptocurrencies to play a kind of important role in just making sure that people always have an alternative if uh fiat currencies start breaking so like if or if you're in you know some at a very high inflation place like venezuela for example or if your country just kind of gets cut off from like um 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 right or something worse happens then like cryptocurrencies are the sort of thing that just because of their kind of global neutrality they're just kind 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 uh becomes the main set of currency because it feels like fiat it feels like the centralized controlled by governments of currencies limiting somehow maybe my naive utopian view of the world it's uh and it's definitely very possible i mean i think like four cryptocurrencies being the main form of uh value to and of work well like you do need to have some [Music] 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 that just is to me 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 it's such a young concept that 10 years is nothing in the history of money yeah and i think it's a combination of two things right one is um it's uh it's still early days but the other is a kind of more durable any kind of economic problem which is that like 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 dominated in that currency but if you have a currency where instead the supply can change and so the supply can go up when there's more demand than you have the supply and of absorbing more of that volatility and so the price of the currency would absorb less of the volatility on that topic so bitcoin does have a limited supply specific fixed supply yes uh what's what's the idea and the ethereum doesn't but can you clarify just in the comments you just made is ethereum qualify to the kind of currency that you're talking about and being flexible in the supply and it's a bit more flexible but kind of the thing that you would really want is something that's kind of specifically flexible in response to how valuable the currency is and and i'd recommend you to look at stable coins as well so like things like die for example that's a new like how do you spell that dai and what uh what's stable coins is that a type of cryptocurrency it is a type of cryptocurrency it's um a type of cryptocurrency that's issued by a smart contract one of these ethereum computer programs that um where the smart contract holds a bunch of ether and then it is basically like that people deposit and then at issues die and 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 of users one that wants stability and one that kind of wants extra risk together with each other and it basically creates some or gives one set of participants a guarantee that they'll be pa uh that they have this asset that can that that can be later converted back into ether but like specifically out kind of the one dollar raid and it has some kind of uh stabilizing network effects yeah it has this yeah it has many kinds of stabilizing mechanisms in it that's fascinating okay this this world is awesome technically just from a scientific perspective it's an awesome world uh that i i often don't see from an outsider's perspective what i often see is kind of uh maybe hype and a little bit if i may say so like charltonism and you don't often see at least from an outsider's perspective the beautiful science of it and the engineering of it maybe is there a comment you can make of who to follow how to learn about this world without being interrupted by the charlatans and the hype people in the space i think you do need to just know the specific kind of just people to follow like there's and there's all the kind of the cryptographers and the researchers and then there's just like even just the ethereum research crew like myself you know like dan crowd danny justin of the other people and then and if the academic cryptographers and like before um um this today was at stanford and uh stanford has the center for blockchain research and of dan bonnet that's really uh famous and great cryptographer um running it and there's a lot of other people there and there's people working on like zero knowledge proofs for example and um zuko from uh zcash has kind of one other person that i yeah you know respect so i think if you follow the technology you crawl along that yeah yeah you just start with the etherium group and then look at the academics dave and so on and then just cautiously expand the network of people you follow yeah exactly and like if someone seems too too self-promotional then just like remove them is there books that are 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 uh introductory material so prefer 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 lysing announced that there's one about the history of ethereum um for technical ones and there's andreas antonopoulos as mastering ethereum great so um let me ask you sort of uh sorry to pull back to the the idea of governments and decentralized currency uh you know there's a tension between decentralization of currency and the power of nations the power of governments you um what's your sense about that tension can is there some rule for regulation of currency 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 like the one thing that people forget is that it's clearly not entirely an enemy because i think uh if uh there hadn't been so much government regulation on and if centralized uh digi like issuing centralized digital currencies then like we would 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 uh clearly been kind of more of a help i just kind of set the stage for the end of the existence as a of the sector in some ways um but also and i think some of both you know like there's definitely things that governments kind of can do in some cases have done to have hurt the spread of uh and of growth of of blockchains there's uh things that they've done to help and they've in some cases definitely done a good job of kind of going after fraudulent projects and they're going after some of the projects that have some of the kind of craziest and most misleading marketing um there's uh also the possibility that governments will end up using blockchains for a lot of different things like you know governments yeah i mean they do a lot more than just regulating right but there's also like they have the identity of records and they have like property registry is even just their own currency is like security 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 uh governments often lag behind in terms of their acceptance and leverage of technology if you look at the autonomous vehicle space ai in general they're uh they're a few years behind it'd be nice uh to help them catch up that's a that's that's always ongoing problem you uh met vladimir putin to discuss the centralized currency here you're born in uh where were you born columnar it's a city about 115 kilometers south of moscow in russia yes yeah i grew up in moscow i mean it's vladimir putin is a central figure in this part of the world so what was that like meeting or meeting him what was that experience like he's taller in photos than in person yeah yeah that's right he's five seven i think five eight maybe yeah and that's uh unfortunately we didn't actually kind of 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 like some of the other end of government ministers and like he recommended some and uh some of them are are actually interested in trying to use some like blockchains to look for various government use cases they're going to have limited corruption and other things and i have it's hard to tell from one conversation kind of what things are genuine and what things are just like oh watching is cool let's do blockchain right but you know when i when i listen to like uh barack obama talk about artificial intelligence there's certain things i hear where 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 uh even if it's just reading a wikipedia page like he really thought about what this technology means did you get a sense that uh putin or some of the ministers like thought about blockchain like thought about the fundamentals the technology understand it intuitively or are they too old school to try to grasp it summer old school somewhere more new school it depends it's it's definitely depends on who you talk to i mean that's an open question for me for with putin because putin has said uh i don't know as i said i've only talked to him for about one minute so but sometimes you can pick up sort of insights as a quick comment there they're about maybe you can correct me on this but they're about 3 000 cryptocurrencies being actively traded yes uh and ethereum is one of you know a lot of people believe that there will be the the main cryptocurrency i think bitcoin is currently still the main cryptocurrency but ethereum very likely might become that the the main one um is this kind of diversity good in the crypto world do you see it sticking around should there should there be a winner like should there be some consensus globally around uh bitcoin or around ethereum like what's your what's your sense i definitely think that diversity is good and i definitely i think also that there's probably too many people trying to make separate blockchains of right now and the numbers should definitely be greater than one and probably greater than two or even five uh not three thousand not three thousand yeah and also not even like 40 high quality platforms to try to do the same thing there's definitely this range from just like one person who 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 to like scammers to people like making something that's actually successful and then there's a lot of different categories of blockchain and you have project in terms of what it's trying to do and what applications it's for um and i think the experimentation is definitely healthy if you look at the two worlds there might be a little bit disjoints but uh the distributed applications cryptocurrency and then the world of artificial intelligence do you see there's some overlap between these worlds that both worry 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 had a thought about things like like the ai and if control problems and alignment problems and all of those things do you worry about the existential threat of ai that's definitely one of the things i worry about they think um blood there's a lot of kind of common challenges because in in both cases what 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 uh these as strong ais the idea would be that the simple system is people and the complex system is well whatever um thing uh the people the people end up kind of unleashing on the universe that'll hopefully be a great thing um and in the case of blockchains and of the complex well the simple thing is the algorithm which is a piece of static and fully open source code and the more complex thing is just the num all of the different possible kind of human actors and of the strategies that they might end up used to participate in the network do you think about your own mortality like what you hope to accomplish in your life oh i definitely i definitely think about ending my own mortality so that's if i gave you the option to live forever would you depends a lot on what the fine bridge is i mean you know if it's one of those things where i'm going to be kind of like floating through empty space for 10 to the 75 years then no if it's uh um forever worth of uh end of having you know fulfilling life with uh and if meaningful with with friends to uh to spend the time with with kind of meaningful challenges to explain explore and adventure interesting things to be working on then i think absolutely move that's uh beautifully put live forever but uh you'd have to check the fine print um i think there's no better way to end it vitalik thank you so much for talking to us so exciting to follow your work from the distance and uh 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 buterin and thank you to our sponsors expressvpn and masterclass please consider supporting the podcast by signing up to masterclass at masterclass.com lex and getting expressvpn at expressvpn.com lex pod if you enjoy this podcast subscribe on youtube review it with five stars on apple podcast support it on patreon or simply connect with me on twitter at lex friedman and now let me leave you with some words from vitalik buterin the thing that i often ask startups on top of ethereum is can you please tell me why using ethereum 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