#14 - Vitalik on Ethereum

30:05This is just stuff which is friction that just doesn't move as fast as the internet. And I think they're underrating that. Go ahead. So I actually, I mean, I do think that there's enough of a risk that this stuff will happen very fast for us to worry, right? And I mean, like I think probability of more humanoid robots than humans by 2040, I think it's like very non-zero. I agree with that. I think it's funny. Over the last two and a half years, I feel like AI has been both overrated and underrated. And here's why, like, obviously it's ridiculously important and in that sense under it and I think the long term is right.

30:38But in terms of, like, it's funny how people are actually using AI in practice is they're just like being extremely lazy and using chat GPT for essays, right? Or, like, it's amazing how many people will just, like, literally have chat GPT write their tweets and I'm like, you don't think I can tell? It's like, you know, there's like a rhetorical question mark and it's not this, it's that, you know, kind of thing. there's things go ahead right there's there's certain things they do where it's like actually i want a plug-in which uh a chrome plug-in maybe somebody you guys can code this that's like is underscore ai that runs um ai detection on every string on a site and then gives you a link because what will happen is if you say to somebody that posts ai sometimes they'll be like no it's not or whatever and sometimes it actually isn't you know right and it's kind of like an accusation of you're dumb, that's AI, they get offended or whatever, right?

31:33And so there's like a lot of secret AI. And so if you run isAI, you get like an either scan link and it'll tell you why that was likely to be AI. Not either scan, but a link that's like that, a permalink, okay? And you paste that and you're like, isAI, you know, probability 73 %? And you reply to that on X. And it's like, did I, like, let me AI that for you or not AI that for you, right? Right. And I think so. So the way it's being used is like not all, but it's like an idiocratic version of it. Right. The smarter you are, the better you use AI and the dumber people are or the less taste they have, the worse they use AI.

32:07Right. But that's it just feels very different than any emergence path of AI that's been in science fiction or literature or anything like that. Go ahead. Give me your thoughts. Yeah. And I think the emergence path of AI has violated expectations in just like all kinds of different ways. right and uh and so i mean even uh i mean like it just repeatedly keeps on doing that right like if you think of um like even the 1970s like they yeah like they would not have uh expected ai to be able to solve arbitrarily yeah complex arithmetic in like 10 years but take like 40 years to tell a cat from a dog right and uh and then like even uh today the like the line of what are the things AI can do and what are the things AI can't do is very difficult to describe.

32:53And I think one of my theories is actually that the last tasks that humans will be able to do better than AI will be precisely the most illegible ones because those are the ones that are the hardest to train for. Interesting. Yeah. So actually, what is your list? Because I'll give you my list. I mean, it's interesting. I remember talking to someone, he asked me, what is your benchmark for when you would say, yeah, this is AGI? And I said, when an AI is able to independently start a profitable company. Interesting. Yeah. So everybody's got, I think, I would argue we've already passed, quote, the threshold of AGI in some sense for some domains.

33:29Like it's better at math than many people. It's better at, right? Yeah, it'll make mistakes, but people make mistakes with math. You know, it's funny. These two questions, what can't AI do and what can't China do, I think are the most important questions for anybody who's doing a new startup, right? Or you build your business to assume AI or China will improve towards that, and then you'll ride with that or at least be invulnerable to that rather than the opposite. The thing that I'm seeing is AI right now, and maybe for the indefinite future, it doesn't do polish. Actually, the whole thing about AI takes a job.

34:06Here's a reframe, which is AI lets you do any job at an okay level. right? You can be an okay artist. You can be an okay video editor. You can be an okay 3D designer or whatever. You can at least get your vision out onto paper, right? And it's like kind of getting to like a five level or something like that. It might be a cheesy generic version, but you can do any job. So in a sense, AI means a crude form, not crude, improving form of digital autarchy, so long as you have access to the internet, right? And China is physical autarchy because they're the most physically independent country in the world because they can build everything themselves, right?

34:45So that's how I kind of think about it. But it's not getting really good at that area because the threshold for really good keeps moving forward as AI improves. And to actually check the result, it might generate a math theorem. We actually have to be a research mathematician to even understand the symbols and check it. Go ahead. Give me your thoughts. The mental model I use is like if human level is like normalized at like some level like this, right across a range of tasks, then basically AI kind of looks like this, right? It's like better in some domains worse than other domains and like this curve just keeps shifting to the left and like often very wobbly and unpredictable ways right and so it's uh like it's oh it's i think for 50 years it's been super cute like from okay from the perspective of the economy in 1800 by the like probably the year 2000 we basically had like asi from the perspective of like or probably over 80 of the economy right like if you think of farming what percent of that was automated even by the year 2000, if you think of manufacturing, right?

35:42And so what I think is happening and the pattern that will continue for a while is basically this pattern where essentially like both economic and social value, they continually refocus on the subset of tasks that AI hasn't just hyperinflated to zero, right? Right. And I mean, at some point, we're going to enter a new like a regime where like that set of human dominant tasks like actually shrinks to exactly zero, right? But we're not there yet. The question is what happens when they eventually get to the point where they can like think a hundred times faster than you and at the same time they consume like 0.1 watts of energy and stuff.

36:21There's still comparative vantage, right? I mean, or rather, I guess that's a question. Does comparative vantage between AIs and humans exist? And you can argue there isn't any with dolphins, right? Like dolphins are just pets, right? Dolphins just kind of feed food. There's nothing you can really delegate to them. They just can't figure it out, whatever. You know, like, go, go, go, go have fun, right? So it's possible that it gets to that level. But I think at least until the prompting issue is solved, right now it really appears to me that it's like artificial intelligence is just constrained by human intelligence.

36:55Like, you know, it's basically like the better you are at prompting, the better the AI is. And conversely, go ahead. Even if you spell something wrong, it gives you a worse answer, right? Yeah, yeah, yeah. I fully agree that that's the status quo today and probably at least for the next couple of years. Yeah. Okay. Fine. All right. So let's move to maybe talk about one more thing and let's go to questions, okay? Yeah. Startup societies, Zizaloo and so on and so forth. So after Network State book came out, there's actually an old diagram I had, and then you kind of moved one more box on that diagram.

37:25Go ahead. Why don't you talk about that? Yeah. Basically, so the box was, I mean, this was actually originally, yeah, right, the diagram from your book, which is basically how many people are there and for how long a time do they come together, right? And so, you know, it's like number of people, you know, 200 ,000 million, and then amount of time, like one day, one week, a month, a year. And then you have like Tinder over here, and then you have eHarmony over here, you have universities over here, and then countries over here. So with this, like the idea was that, okay, you know, we've had lots of things that happen where people come together for a week.

37:55But there's this like big discontinuous change that happens. I think when you one you allow the duration of time to get longer like basically the psychological shift that happens that and I'm sure a lot of you can probably relate to it at this point is that a week is a break from your life two months is your life right like yeah like if you stay in a place for two months like actually fully readjust like that being the normal right and then like actually becomes a day-to-day rhythm as opposed to something like you know you know you've done a few days and there's a few days left and then you're gone and then on the other side is like scale right so you know like there's what you can do with like 10 people which is a hacker house but then there is what what can you do when you get to like dunbar's number which is 150 and that's the level at which you start to just need to have multi-level structure in your society right and so like two months at 150 is like this level where you actually start to get a lot of the complexities of doing something more meaningful at a larger scale but at the same time it's like still small enough that it's practical to bring together and it's manageable right and so i'm really seeing that i mean zeus was about 200 people for two months like i think it's uh it's a good range within which i got to like experiment and i try to figure out what are the actual kinds of things that we can do and uh the general way that i see this right is uh that uh like i think this is a good scale at which uh you can dog food things at which you can actually start to go from having some new idea about how civilization might work better to not just blabbing about it on the internet, which is what people did on internet forums back in 2009, but actually try it out and you actually get real-world information about where the successes and failures are.

39:43One of the things that's interesting is people in the community develop things for the community. The community puts their beta testers or what have you for different types of things. It's a full-stack incubator, right? Exactly. Basically, I think there's a big difference between being a service provider and being a community. I think, for example, this is probably one of the things that the whole e-Estonia movement of 10 years ago got wrong, which is that they had very advanced e-government for their time. You could vote online, open up bank accounts online, start companies online, all kinds of things, really advanced.

40:19But the difference between a product and a community is that a product is a hub and spoke model. It's N people who have a one-to-one relationship with some kind of center. A community is a model where you have N people that all have relationships with each other. And I just, like in Estonia, I think the problem was that, or for e-Estonia, there was not enough commonality between the different people who were e-Estonia residents for them to actually really become a cohesive community, right? Yeah, exactly. It's like community is connectivity. That's actually how, like literally of N people, you have N choose two possible relationships or N squared if they're asymmetric.

40:58And then you divide how many relationships actually exist by the number of possible relationships. And they just had a hub and spoke thing where everybody was connected to eEstonia, but not to each other. Right. And so I think that one of the unique things that the sort of community as incubator can do, right, is like it actually gives you a community as a beta test user. And there's like a big, big difference between having 100 beta testers and having a community of 100 B or beta tester. Right. And the difference basically is it's the difference between 100 people who have no preexisting relationship and need to interact with each other versus people who do have a lot of those needs every day.

41:37And so this is, I think, to me, a very unique value proposition, right? That you can actually start a thing and then you can bootstrap incubated in a community and then you can actually make a huge amount of progress together. That's right. And I do think the startup society, this as a concept, like what you're doing on the Zuzo side, we're doing with Network School, we're helping bootstrap others. I think this is the third type of thing, like intranet company, intranet currency, intranet community. You know, I've said that before, but I think it's like the third type of thing that you can start.

42:08You know, go ahead. Yeah. So one other thing that we started doing in Zuzul and that we've and I think also like gotten in, I mean, we really have been in a long time, right, is biotech. And I think it's interesting that like crypto has had this kind of interesting sort of sister relationship with Frontier Biotech for pretty much ever since it began, right? Like definitely far from just myself, a lot of early crypto people were also very big into longevity. Do you have my thesis on why? Go ahead. So well, Hal Finney was an extropian, right? But I can actually give an exact parallel between crypto and longevity, which is what with Bitcoin initially, it looks like the existing financial system, but in some ways with bar charts and trading and stuff.

42:53But it rejects fundamental premises because the existing financial system says that while hyperinflation is bad. Deflation is also bad. So you should lose a little bit of your wealth every year. Like a little bit of inflation is good. That's normal. And the medical system is similar. It says while fast death is bad, right? Like trying to live forever, like deflation, the equivalent of that, increasing your lifespan every year, that's also weird and bad. So you should lose a little bit of your health every year via aging, right? So the traditional financial system says lose a little bit of your wealth every year.

43:27Traditional medical system says lose a bit of your health every year, right? And the entire crypto and longevity community says, what if we reject that? What if we attack it from first principles and say, like, maybe we don't have to go to zero. Maybe we can get to infinity instead. The nice thing about longevity, right, is that I think it's on this like really nice trajectory toward being much more mainstream now, right? Like, yeah, Brian Johnson is like a mainstream cultural figure, like non-technical friends of I think many of us know who he is, right? And, you know, there's been a huge amount of progress on that.

44:02And I think one space that I think is like still in an earlier part of the curve is resistance to airborne diseases. And I mean, we had a dry run of this during COVID, right? And like COVID is worse than existing diseases, but it's also much less bad than it could have been. and like it was in this weird mid zone where basically it was not bad enough for us to like properly take it seriously but at the same time like it actually is much worse you know there's this concept on twitter sometimes of the secret third thing have you heard that before right and essentially what if you guys don't know this meme it's like are you a democrat or republican or or a secret third thing and it presumes that you must be in one of these two categories and otherwise you know it's like a fake thing that there's any more complexity than just zero or one right but obviously if you look at and i'll get to my point in a second if you look at like an image you know an image has more than one pixel of information right and like if you only had zero or one you would be able to describe an image some things have necessary complexity more than just zero or one it can't be reduced profitably to that and i think with covid for example one way of sort of crashing the operating system of some some people online is they're like on the one hand it's like this dangerous virus that escaped from a Chinese lab and, you know, it's like so bad.

45:21And so on the other hand, it was just the flu, bro. And it didn't do anything. And why are you so mad? Right. Why do we do anything about it? Right. And a lot of people hold both of those beliefs at the same time. Right. They're obviously incompatible with each other. Right. Where either it's like this fairly serious thing or it was a completely non-issue. And I think it was actually fairly serious and it did come out of a Chinese lab. I mean, it's not the word was, right? It is very serious. It was slash is. Exactly. That's right. And it killed literally millions of people. But, and this is a weird thing.

45:48See, the thing is, in early 2020, if you had said, okay, just warp your way back to January 2020. If you said, this is going to kill 10 million people globally and a million Americans, and in a few years, it's not going to be that big a deal. Okay? That's literally how people are thinking about it, right? Which is actually kind of crazy. If you had said, it's not a big deal or it's going to kill millions of people, those just seem like thesis antithesis. And somehow we got a synthesis, which is totally crazy, where it literally killed a million or millions of people. And it's also because they're like, dude, you're just exaggerating.

46:18It's kind of like life goes on after World War I. Well, it does for those who didn't die. Right. But, you know, it was actually a pretty big deal at the time. Right. Go ahead. Right. I mean, I think one of the important things there is that COVID itself is still an ongoing thing. Right. Actually. Yeah. I mean, I got it quite recently. Yeah. And actually, if it weren't for that, this whole thing would have been happening like a week and a half earlier. but it's still happening. It's still bad. The long-term symptoms are still pretty bad. And if you think about just how our civilization's media apparatus is handling it, from a media perspective, COVID basically ended on 2022, February 24th.

46:56That just is how our media apparatus works. You can only think about one big story at a time. And the reality, of course, is... the current thing yeah exactly like there are multiple current things you know covid was not cured there were new variants the efficacy of the vaccines went down to about a quarter and uh like basically yeah the and then the scarier thing is what could come next we basically have to get ahead of all this stuff and we have to massively increase our civilization's biodefense like i think in the uk there was a wastewater surveillance program that's like very good and like the the smart technocrats on both sides will tell you that it's good but then like pretty much Sometimes 2021, 2022, it was just canceled.

47:42I mean, I think the problem is unless the next pandemic literally photographs like Ebola or something like that, hopefully it doesn't, there's people who will just literally deny that they've gotten to the point they'll just deny the germ theory of disease. You know, they just don't even believe that like, you know, any, not that a vaccine works. They don't believe any vaccines work. They don't believe drugs work. They don't believe biotech works. They don't believe pharma works. and you're there's totally throwing the baby out with the bathwater go ahead yeah i mean well it's um i've got two solutions for that by the way sure okay what are your solutions so the two two solutions and this is actually true for everything the two heirs to american empire are china and the intranet and so for example when it comes to biotech like if you look china actually flipped the u.s and the rest of the world in like science papers nature papers um like highly cited biotech, like they have a functioning replacement for American academia.

48:38And like, if you want to know whether, like, they're not as political about, or not political about at all. So if a treatment works or not, like a Chinese clinic, they will basically be able to tell you about a crazy left or crazy right version of it. So that's one possible solution that's for, you know, within China. And the other solution is the internet where I think with DeSci, right, You can have people who are neither crazy people. The whole thing about in mid-2020, where public health people in the U.S. destroyed their reputations by saying racism is a real pandemic. You need to go out and protest and so on and so forth in the middle of a pandemic and just completely vitiated all their guidance on lockdowns or what have you.

49:18This made people completely distrust all U.S. public health. And then you have the right then saying that vaccines don't even exist. So both sides are just completely crazy about biotech. They're completely crazy about biology. So the answer is either China or it's the internet. So you have D-Sci, decentralized science, diagnostics, self-experimentation, Brian Johnsonian, where you're measuring your own body and taking responsibility for your own health. You've got the air quality metrics. You've got the personal sequencing. You've got all of this. You've got your own dashboard. And then you're working with a community of people of like mind to get to scale where you can aggregate that data.

49:53You can start calculating, okay, is my numbers? Are they out of sync? are they in sync or what have you right so those are the two approaches i think to like rebuild biotech and just assume the solution is outside america go ahead what's interesting i think on like some of this bio stuff is how a lot of the solutions are surprisingly low tech right like we're like basically so we know this lamp here this is a uv lamp 222 nanometer light so if it's under three like about two like 300 nanometers that means it's like actually like fine for your eyes and so on so it doesn't like hurt you the same way sunlight ultraviolet does and what it does is it kills the viruses right so it just passively like basically significantly reduces the chance that people in the room are going to infect each other with any airborne pathogen so this is like this is one type of technology another type of technology is air filtering a third type of technology is just better ventilation like there's really basic things that can be done.

50:48And like the big bottlenecks are like what like a lot of the time the bottlenecks are just like people getting off their butts and doing things right. And to me, this is also part of the value of some of these like startup societies, right, that you can actually take things that like really the smart people know are obviously correct. And then you can just go and do them, right. Because a lot of the time for mainstream adoption of these kinds of things like the bottleneck is not about the technology. The bottleneck is like from a politician's point of view, is this something where they have to go do something untested or is it a copy paste job?

51:25So this is very, very, very important because basically startup societies are deploying points for exactly the obvious cool high tech stuff that we can now deploy at 100 or a thousand unit scale because it's like uh it's something where people have opted in to basically pushing the frontier of tech and they can of course you can you know not everybody has to opt into a dna test and everybody has to opt into an air monitor but the kind of people here are going to be more interested in that kind of stuff because it's like the frontier of health frontier of tech so go ahead why don't we take some questions actually go yeah all right great so uh why didn't you build ethereum anonymously like satoshi if you could go back would you do that?

52:06I think it would have been too hard. Like the problem is that by the time Ethereum started, I was already a Bitcoin magazine author for two years. And like one, I just like put way too many words on the internet. It would have been findable. And two is I think like Ethereum's beginning really did like my ability to get any kind of critical mass. I think definitely bootstrapped a lot off of people already knowing and trusting me from Bitcoin magazine. Like it would have just been a way harder job. A non-obvious point is pseudonymity is itself a form of decentralization. and the reason it is is because like your government name is in a government database so it's a centralized name it's linked to all the information about you punch it into a search engine it pulls up everything on john smith whereas satoshi nakamoto is a decentralized name it's outside of that right so in a sense pseudonymity is itself a form of decentralization they couldn't hit either the man or the ball of the network right but once bitcoin was out there it was like a heat shield for you it's like you know the nascar or indy 500 right like you know you can kind of slipstream behind a car, right?

53:06So you didn't have to use exactly the same tactics. Similarly with network state, personal distribution is important. So the way that we're doing decentralization is lots of startup societies. So it's not just like Vitalikville or Balogyberg or whatever. I want many of you guys to set up your own startup societies, we'll fund those. There's many different visions of the good, right? And so that's decentralization in another form rather than pseudonymity. Go ahead. Well, what's interesting to me about the whole zero-knowledge proof thing in particular is it opens up the entire design space. If you remember, 15 years ago, the whole narrative is basically a dichotomy between trusted institutionally because KYC'd versus on the internet nobody knows you're a dog.

53:54The challenge now, of course, is that if you don't prove you're not a dog, then you're also not proving that you're not a bot. And so like there's no reason for people to listen to you, right? And so but what the zero-knowledge proofs gives you is they give you the ability to have privacy, but at the same time have reputation. And so and what that also means is like you actually have an incentive to like say and do things that are constructive because they increase your reputation. and that's reputation that you have and can use in a future context, despite the fact that all of this reputation is being mediated through ZK.

54:33And so like actually every operation is unlinked from every other operation. And I think like, you know, zero knowledge is definitely underrated. And if you're going to spend, if you're early in your career, that's, I don't know. There's some things, I think ZK, biotech, things like that haven't had their massive breakout moment yet. And ZK is definitely one. Okay, here's another one. You'll like this one. Okay. What are a list of some thousand to one or ten thousand to one return public goods that we could or should have but don't? and i think um one of the things is um just like more kind of like standard form packages for things um so if you want to like start a guest if you want to start a startup society and then like here's like open source software that you can start with here's like the the one two three four five guide of what kinds of things you should do if like you want to do something like say yeah you know like me thought through templates yeah exactly like thought through templates for like pretty much everything um is a big one um and also i think on the like education side like the biggest under provided thing that i think like i've identified and like i even a lot of my writing has been about trying to compensate for since the beginning is like like you've probably seen a lot of this with math right like you have a bunch on the one hand you have papers that are technically accurate but they're just like so insanely complex and everything's in like freaking greek and like nobody can understand it except for people that have had in-person conversations with the original authors and then on the other side you have like pop-sci math like stuff that just doesn't even try to be accurate right and they tell you things about how oh schrodinger's cat means that like the cat can be dead and alive at the same time and like you You know, absolutely.

56:26Like that sentence gives you absolutely no intuition whatsoever about like what is the point of quantum, right? But like it makes you feel smart because you know the password, right? And so, you know, there's like an entire space that's like in the middle there that like actually tries to like give you the intuition and like helps you understand things, right? But in a way it's like actually understandable to people. and in general like if you're creating educational resources like to me that's like a huge unclaimed like space of opportunities to provide value like and that repeats itself for pretty much everything that's emerging yeah and i think we want to do a lot of that in network state in network school so um here's a good one uh and maybe you can give an answer and this may be something we disagree or not um approximately 99 of stable coin market cap is backed by dollars this reinforces USD 7 of 10 large BTC owners or US entities.

57:19How does the US not win if crypto wins? So you can give an answer. I mean, first of all, right, it's like all of these things are chaotic systems that just have a huge number of all kinds of different variables going in all kinds of different directions, right? Like five years ago, China was the winner of mining. And then, you know, the government itself like just finally banned mining hard enough that I think actually China still does 10 about 10 percent of Bitcoin's hash power. but it's like basically knocked out of the number one position. So all kinds of things could happen, right? And so, you know, and there's even all kinds of things that the U.S.

57:55could do with respects to crypto, right? And then obviously, yeah, then, you know, there's all kinds of things that even like the individual crypto holders in the U.S. could end up doing, right? So that's one. And then two, like macroeconomics can just go in all kinds of different directions, right? We're basically breaking an 80-year era of stability in about three different ways at the same time. What do you look at as those three different ways? The tech of AI and so on? Yeah, I think basically domestic politics, international politics, and AI. Even AI itself, you can expand that. Basically, thinking in terms of technology exiting the great stagnation in general.

58:40So, you know, I think we've been seeing bio exiting the great stagnation. We've been seeing virtual reality exit the great stagnation. Like a lot of these things also really feed into each other. Right. So basically from like there is just a lot. The Internet is also a big one. Like the Internet has just changed a lot of variables in terms of what kinds of things in our world have an economic premium and what kinds of things don't. And so what dominates can just change massively over the next five years in directions that pretty much nobody has been predicting is I think one part of my answer.

59:14And the other part of my answer is like once you're on crypto rails, your ability to go from one thing to another thing just becomes 100 times easier. Okay, great. So that leads directly to my answer to this question. So actually, I'm going to start doing video tweets, meaning like 59-second, 29-second vertical videos. So one of them will be on the DeFi matrix. So DeFi matrix is if you imagine the table of every asset across every asset, right? So you have fiat currencies, you have cryptocurrencies, you have NFTs, you have domain names, ENS domain names, and so on and so forth. all of them now due to uniswap and due to all of these on-chain market makers and exchanges have a price like you can get out of this asset into that asset and you can do it right now and you can do it for the whole thing you can market sell i mean you may not want to do that but you can do that right and so the moment that you loaded the dollar on chain you made it swappable in a million different venues any time of day and night by anybody in any country at some price right it's like putting something onto an ice skating rink and it can move in any direction with very little friction very, very, very, very quickly at the speed of crypto, which is like that, the speed of the internet.

1:00:29It's not banking hours, which are nine to five. It's not capital controls. It's not within the control of the US banking system in the same way. It's at the speed of the internet, right? So that alone is a huge change, which is the, you know, sometimes something is forklifted into a new domain and the forklift itself, everybody's focusing on it for a while, but it's now in a new domain and the physics are totally different. The internet is totally different. So the DeFi matrix, because it means you can swap in and out of something, that actually means, what's another term people use for cash? They call it liquidity, right?

1:01:02Getting liquid, an IPO, right? That's like how a tech bro says, like, you know, I'm making money, okay? So the, like, liquidity can now actually happen without actual cash because you have an asset that you can just swap in to whatever asset you want with a click. There'll be some price for that, but you can keep it all in Bitcoin. You can keep it in something else. So that's number one is that means, by the way, here's a very important thing. What's similar to the DeFi matrix, an analogy is in the early 2000s. There were all these newspapers and they forklifted themselves online. And there was just like the online version of the New York Times and the Miami Herald and San Francisco Chronicle.

1:01:42They just forklift themselves like, okay, I'm online. what's the big deal? I'm online, I'm offline. But once they were all online, Google News could make a table of all of them. And suddenly when you load a Google News, you saw they were all reprinting the same story, the same Reuters clip. And they didn't have unique stories. There was like 73 outlets reprinting the same Reuters clip. And suddenly everybody realized, oh, wait a second, these guys just have a thin layer of like local news on top of basically like wire services. And so that began essentially the commodization of local news. And local news basically died because you could just get your news on the internet.

1:02:16The forklifting revealed that these were commodities, and their previous moats that they didn't even realize were moats were the geography because they had trucks that delivered the newspapers. They had ink. That whole saying of never argue with a man who buys ink by the barrel, it's actually now you can always defeat a man who still buys ink by the barrel. They can't argue with you. You don't have to buy ink by the barrel. So the point being that what they didn't realize is that by forklifting it online, they'd lost their moat and then they were put into total global competition with everybody else and then all the local newspapers died and only the strong survived and the craziest you know most international news or whatever you know dominated that is what's going to happen to every fiat currency every fiat currency is now in a war for its survival comparable to local news because their only advantage was their geography they're basically all doing the same thing as everything else, right?

1:03:08It's only the geography that provides any advantage for a fiat currency. So what that means is they're now going to have to, if you think that would happen with local news or the news, it couldn't compete on geography. Instead, it competed on ideology. You have all of these online different niches and verticals that are global, but competing on ideology as opposed to location, right? Okay. So that's what's going to happen with assets already happening. They're going from competing on geography, like, you know, this fiat and that fiat to competing on ideology and on features, which are like, you know, zero knowledge or like smart contracts or like unprintability of Bitcoin.

1:03:41That's already happening and you're having tribes form around them. What hasn't happened is for many fiats to die. Many fiats are going to die. This is my view, right? When many fiats die, lots of things break because it's a tool for social control and so on. And Bitcoin will moon more than you can imagine it can moon. And so be in a safe country at that time. And so then the other point is like, how does the, so that's how like basically with a stablecoin market cap. And then, so it doesn't reinforce USD exactly, it just makes it very liquid and it can swap into anything else. And you can easily have some other asset that you swap into.

1:04:15And then in terms of seven of the 10 largest holders are American, well, the issue is that the US is not, it's not a United States, it's a dis-United States. And so everybody's just taking a chair and using it against the next guy. And the red team says the blue team did it, which they did. And the blue team says the red guys just did it, which they did. So even Delaware is being destroyed, right? It's like a civil war where every institution in the U.S. is getting wrecked, right? And then the internet survives because the internet is what stays up even in the time of nuclear war. So the only reboot is from the internet.

1:04:44That's not the U.S. winning. That is the internet surviving after all these institutions get melted down, which is a very different thing. And fundamentally, I think the fundamental optical illusion that you wrestle with is is the internet American right it's like saying is America British on the one hand of course America is British it was born out of Britain speaks English like you know the early colonists the names of towns George Washington all that kind of stuff on the other hand it's clearly something that's become much more than Britain it's exceeded even it's worthy progenitor okay so I'm going to do a few more and then we have two more and then we'll wrap right okay so all right this is a good one.

1:05:21How can we mega? How can we make Ethereum great again? All right. Or if you maybe have a different slogan. So massive tariffs on all Uniswap trades out of Ethereum, right? Okay, fine. No. How can we make Ethereum great again? What should Ethereum's North Star goal be? Number of DAOs, price, total hodlers, et cetera? Yeah, I mean, I think Ethereum in general, like it needs to have like twin, like the twin goals basically are like one is like getting used and getting used at a large scale. and the other is of course continuing to be something that's worth being used in the sense of being something that's meaningfully much more secure and much more decentralized and so on than the kinds of systems that people would be using otherwise.

1:06:16And obviously I think if we sacrifice on either of those things there's no point, right? Because if Ethereum can't scale and it can't provide enough security and it can't provide enough experience, then whatever properties that happens, they don't reach anyone. On the other hand, if Ethereum gets scaling and UX at the cost of basically becoming a copy of TradFi, then there's also either no points or at least much less of a point that there could have been. And so the question is how do we do that? Can I kind of argue that point? My argument is sometimes you can have something that's cyclical in the XY plane, but the progress is on the Z axis.

1:06:58So even if you rebuild, like for example, there was Microsoft and then there was Google and then there was Facebook. And even though they're like new guys, same as old guys, they're not exactly the same. There's actually progress technically. Like React is better than Angular, for example. Right? Go ahead. Yeah, yeah. Okay. That is fair. But I think there is a strong technical roadmap that gets us both of those things. And the technical roadmap is, I mean, basically there's a bunch of strategies to scale both L1 and L2 execution. And I mean, we've talked, like there's stuff like delayed block execution, block level access lists, distributed history storage, like stuff that I think there is like a pretty good bankless podcast with Ethereum researcher.

1:07:45about some of these kinds of things about a week ago. So on the L1 side and then on the L2 side, of course, increasing the number of blobs and using PeerDAS to be able to handle that. And then finally using ZK, Synarx, or I guess realistically, Starks inside of the L1 for scaling. So just like actually applying all of that technology. And I think there are things that we have to kind of rethink on a fundamental level and like beta update some of the ideals from some of the early satoshi era right so like probably the biggest thing is that like the thing that satoshi did not understand that well is the asymmetry between creating and verification and it's ironic because in proof of work like he actually totally did right but if you think about every other aspect of bitcoin right a block takes as much computation to like create not the proof of work part but like the part of choosing the contents and let right as it does first for someone else to verify right like the cost that it takes the amount of computation bandwidth storage that it takes to run a verifier is exactly the same as as what it takes to actually like choose the contents of the block in the first place right and that was an inherent limitation of the pre zk snark era the pre stateless client era, the pre-access list era, basically the era before all of these different scaling concepts have come up.

1:09:13And the way that all of these scaling concepts work is they basically say, well, they put more load on one node and they ask the one node to do more work in order to create hints that then make the work of verifying much, much easier for everyone else. And so take advantage of that asymmetry right that is what sales clients are about it's what zk starks are about it's what data availability sample is about like basically all of the fancy buzzword technologies are ultimately some version of this right and the challenge is like early bitcoin mentality really valued this concept of like running a node at home right and the challenge of like the good aspect of this is like what you want is you want a system where the rules of the system are rules where like the if those rules start getting broken the the blocks that break the rules just automatically get rejected by everyone immediately right like swift does not give you that property right credit cards do not give you that property like if i get like have a us dollar balance i have no way to verify that these were dollars created with an algorithm that obeys any particular limit on how many dollars are in existence right and so you what you do not want is you do not want a system where like five people can get together they can change the rules and then everyone else accepts them by default right you want a system where changing the rules is actually hard right this is like constitutionalism but like a level above that because we're like basically going into smart contracts and doing it at the level of tech right and so to do that like basically the bitcoin way was to say well you'll have everyone re-executing everything at home right but with snarks like basically you have this asymmetry you have the difference between nodes that are responsible for building the chain and nodes that are responsible for verifying the chain.

1:10:59And then you have a whole spectrum in the middle. Right. And the question is, well, actually, if you allow the cost of building parts of the chain to be a little bit higher, then you can massively increase the scale and you can increase the scale. Basically, you can increase the number of users who actually get to benefit from your chain's guarantees directly right like this is one of those things that like mistakes that el salvador made right it's like the lightning network implementation like it was actually based on custodial wallets like that but so on that right i'll say something but like basically the question is like how do you avoid that right and uh basically the solution is like well you basically have this kind of hub like model where you have a smaller number of more powerful nodes and like you're concentrating the proving work and at the same time you're massively distributing the verifying work right Basically, the challenge is if we can actually do this, then we actually can create something that is sort of maximum decentralization and maximum scale at the same time.

1:11:59And the technology exists to actually do that. It's funny because that is like 10 years after Bitcoin. It would only have come up after people have pushed on that part of the technology. One thing is, I do think, quote, Bitcoin scalability, it's not lightning. I'm very skeptical in some ways about it. But it actually already exists, which is it's either A, an infrequent on-chain transaction, or B, it's an off-chain transaction to something like Coinbase or Binance or El Salvador or whatever that just runs essentially off-chain transactions between its people. So you have infrequent digital gold movements between these hubs, and then you have all these spokes on these hubs, and that's basically how Bitcoin scales.

1:12:38My critique of that kind of stuff is basically that if the open permissionless censorship resistant aspects of the ecosystem are not aspects that are experienced by users directly, and we just say those things belong to institutions, then that's just something that's inherently more vulnerable to capture. Okay, last question, then let's wrap. Some say Silicon Valley SF is losing its supreme position as the center of tech founders. Do you agree? Yes, no. And if so, where do you think is the best place to start a global startup? I think it depends on your industry, right? Like if you're an AI, then spending a lot of time there like is like very helpful.

1:13:18I mean, I think like my personal philosophy toward that whole region is like, there's a lot of value you can get by being part of it. But like, I think if you go visit for two to three weeks a year, then you get the majority of the benefit. And at the same time, like that's still a low enough dose that you can like avoid imbibing the crazy. I think a lot of parts of the world are great places to be based in, right? I mean, even if it's like places like Berlin, like I'm always a big fan of Berlin because I think the local community does a great job of like remembering what crypto is actually there for.

1:13:55Right. And like basically not just, you know, like chasing like the short term narratives. There's a huge amount of top tier talent, right? Like even like SAFE, like the smart contract, a lot of people are there. Huge numbers of Ethereum core developers are there. right so there's a lot of like different parts of of the world that are like this and so i think especially with a combination of the internet and with a combination of more localized net like in-person network effect hubs like this you're the like the need to be in a global superstar city to be at the front of the world is much less than it was five years ago i agree with that all Alright, with that, let's wrap.

1:14:38Thanks everybody. Thank you, Vitaly.