Transcript: Vitalik Buterin and Eric Weinstein on The Portal podcast episode 12

The following transcript was generated by a machine and not edited by any human – so it’s full of of errors. I’m posting the transcript because the podcast is excellent and a crappy transcript is better than no transcript. Questions/comments: get me on Twitter @mgmobrien.

Eric Weinstein 0:07
Hello, you found the portal. I’m your host, Eric Weinstein, and I’m sitting here today with vitalik butyrin, the leader and founder of the Ethereum world of cryptocurrencies and smart contracts. Welcome to the portal.

Vitalik Buterin 0:22
Thank you. It’s good to be here, Eric,

Eric Weinstein 0:24
it’s terrific to have you.

Now in general, when I see you interviewed, immediately, everybody goes straight to cryptocurrencies and Nerium. But one of the things that I found fascinating about your story is, is that in order to be a good steward of this new emerging economics, you’ve actually applied yourself a great deal to standard and regular economic theory. And I was curious, if I understand correctly, you dropped out of college after a year you’re self taught in economics, but you’ve taken a real interest in understanding How markets and economic theory work. Is that a fair description?

Vitalik Buterin 1:04
Yeah, I think so. And economics has been of interest for me. Definitely for a long time. I mean, when I discovered Bitcoin back in 2011, and I was still in high school, it was this kind of interesting confluence of ideas that I was already pretty attracted to. So of open source culture, that was something that a good friend from high school Christopher ole had already and indoctrinated me with really well, the, the math mathematical and cryptographic aspects. Also, libertarianism and Austrian economics was kind of the Zeitgeist of the Bitcoin space at the day and those were of ideas that I definitely found philosophically quite attractive at that time. And, you know, I was definitely curious and yeah, read a bunch of books. So yeah. And read the Austrian economics Kanaan because that’s what the Bitcoin people were talking about all day. Yeah, read some kind of behavioral economics literature really kinda men and chi Dini and all of those people that just because I knew that I had to read other stuff for balance. And, and also economics itself is a kind in pretty mathematical and if subject Well, kind of right it’s it’s on the borderline because it’s kind of both mathematical and you got your curves and your derivatives and your intersections but also humanities, right, it’s really at this intersection of like both figuring out how to apply these models to a specific cases and also trying to figure out well, which models are really correct in the first place. And like the first question you can’t answer with math, but the second question, you really can’t and you need other kinds of thinking as well.

Eric Weinstein 2:58
Well, this is An area of my own interest because the way I see it, economics is odd in a way that very few people, I think have appreciated in that. If we take what could be argued to be our two greatest ideas in scientific, scientific man, let’s say, one would be sort of the geometric dynamics of physics and economics has been constructed to be an as if physics, if you will, and on the other hand, and inherits from the theory of selection, you could say that markets are the continuation of systems of selective pressures by other means. And so what happens when our two greatest ideas touch each other, and they do it in a place which has very bizarre properties, by my way of thinking that is that economists are on the one hand, very rigorous thinkers and are also very susceptible to what we might call political economy, and distorted thinking. Does that ring true to you?

Vitalik Buterin 3:59
Yeah. Definitely, and there’s definitely this combination of the four. On the one hand, you have these mathematical formulas. And on the other hand, these assumptions, and often the assumptions can be pretty, pretty well hidden, and they’re kind of difficult to see at first glance, right. And it really can be subtle, right? So like one of the arguments that economists tend to put forward is basically like mutually beneficial transactions are a bet are beneficial. And so like, we should not interfere with them, right? Like if I have a client bottle and I want to sell you the client bottle, you’re willing to pay $5 then I clearly value it at less than $5 evaluated more than $5 therefore the transactions on net good and like I, therefore I should give you the bottle and you should give me the money and that’s what we would do, but At the, the reasons why that 10 sometimes breaks down like are, in many ways more subtle, right? Like, first you have monopoly issues like, if I’m the only person selling Klein bottles, then I might want to sell them at a higher priced and you’d be willing to accept because I want to extract more value. And sometimes the things that matter most to society aren’t things that we can transfer between people from one person to another, like Klein bottles, but like public goods, and like the biggest public good of all, is that is the idea, right? And an idea? Well, if I have an idea, and I give you the idea, I still have the idea. So it’s something that once you release it, it’s out there and there isn’t this kind of property that Oh, no. Should we

Eric Weinstein 5:49
pause just briefly to talk about what a public good is? Yeah. So public good is technically defined within economics. Many people have an intuitive idea. Something which is you’re stating has this property of inexhaustible. Yeah. And then the other attribute would be excludability, which is

Vitalik Buterin 6:11
non excludability for sorry, not

Eric Weinstein 6:13
non excludability, sorry, the attribute of excludability and is used to define a public good. So, if something is inexhaustible and excludable, then it has this weird property that even hardline economists would agree that the market may fail to price, in fact, will fail to price the value to society of that object. So there is an admission within economics that there are zones of failure.

Vitalik Buterin 6:43
Right? Well, I guess the kind of the big kind of rethinking that needs to happen is that like there is a long been this kind of site guys to that private goods like things that I have, and if I give it to you, I don’t have it. And you have it on than normal and public goods are a rare exception. But like really public goods are pretty darn important. Right? Like if we didn’t have public goods, then we’d be trading sticks and be and bare pellets and we’d basically still be caveman. Like they’re basically the army would be

Eric Weinstein 7:15

Vitalik Buterin 7:16
Yeah. Yeah. In army well, armies are interesting because they’re kind of to us, like in a medium scale context or a public good and in the large scale context or a public bad because if everyone’s armies were forced to be cut down by a factor of 10, like we’d all be better off. So economics is like really subtle that way, especially once you have kind of two layers of scale at play.

Eric Weinstein 7:38
Sure. Now, one thing that I worry a lot about that almost nobody seems to join me in, is that in our mutual world, I don’t know what to call it. of people who are experimenting with what I would say the mainstream would consider far out ideas like radical life extension credit currencies is a, you know, potentially being rival risks with sovereign currencies. But in our world, we talk a lot about the abundance economy in a world of abundance. And I’m terrified of a world of abundance because one of the properties that software has had is that it has replaced physical goods and services, which have these attributes. They’re not public with small files, and when a small file is not encrypted, it has the attributes of a public good and therefore value and price can can chasm. That’s terrifying, because then this weird thing of markets which allows us respite from dictatorship and somebody’s directing our activities, and allows us to self direct goes away, because things can’t be priced accurately. Are you Do you have any does that have any purchase on your Thinking.

Vitalik Buterin 9:00
Yeah, so and I think give definitely you kind of strike at a very important points, though, I think, and if my own framing of the points is slightly different. So I think like, first of all, start off by thing by realizing that kind of private property and things is not something that fell out of the sky. It’s a social technology, right? It’s that we have the of norms that basically say, Oh, you can’t, we will create this kind of mapping from objects to people. And if an object has maps to you, then you’re allowed to do basically whatever the hell you want with it, and other people cannot do anything with it without your permission. And if that concept did not exist, then physical objects would be public goods, right? Because like, if there’s a Klein bottle over here, the Klein bottle would be there, but like, really, anyone could take it. And if you produce Klein bottles, then like you’re not producing something for yourself. You’re producing Something for pretty much the first person who comes along and grabs it. So property rights, right are this kind of social technology that helps make private good economies tractable. And we could consider making social technologies to make public good economies tractable, right, like the existence of public goods by itself is it’s not good or bad. Like, arguably, it’s even good because it means that people can cooperate with each other on such large scales. The bad thing is that we don’t really have good tools for handling it. And specifically, we don’t have good tools for handling yet that manage to simultaneous we avoid both not giving good results and like basically being centralized index editorial. And so this is where my interest in radical exchange comes in. So this was this movement that was started by Glenn while a couple of years ago when he wrote this a radical markets book And he advanced some of his proposals like Harberger taxes and quadratic voting were the ones that are kind of the most popular. And the, the core of idea behind the idea is basically as like, let’s create structures of norms and incentives that try to have the best properties that we can get out of markets, but do do so without like, basically economically breaking in the way that we know existing property rights systems do a once you enter a world where 100 of everything that you build just inherently affects millions of people.

Eric Weinstein 11:40
Well, this is this is an interesting perspective. You, of course, are famous for implementing this aetherium protocol. But before we ever get to computer protocols, there are sort of legal and structural protocols that we impose upon ourselves in the form of government and markets that are subordinate to Government. And there’s a weird way in which you may start a process by which you write down rules for how a society should function. But once those rules are written down, you may discover all sorts of unintended properties of that rule set. And there’s a real question. Can we actually unhook ourselves from the killer app that is capitalism, or American democracy? And if we start to realize that that app is running out of control? Hmm, I guess,

Vitalik Buterin 12:38
for myself as a social technologist, and I definitely don’t think that we should be kind of overturning entire countries with the new mechanisms overnight. I think

Eric Weinstein 12:51
I wasn’t insinuating.

Vitalik Buterin 12:52
Oh, definitely. I think like, that’s figuring out how to kind of solve like, Grant problems if humanity is a long term goal, but I mean short term goals are there is definite, there’s little things that we can make better. Right? So I, and this is actually part of why I find cryptocurrency and blockchain is interesting because they are, in a lot of ways this ideal ground for economic experimentation of different types. Right? So like to give one concrete example and in. So one of the ideas that go on while and myself have come up with and are pushing forward is something called quadratic funding. And the way that quadratic funding works as roughly this, right, so you have a central kind of pool of funding. And you could imagine this coming from a government you could imagine this coming from wealthy donors, you could imagine it just being put together by some crypto economic protocol. It could come from anywhere. And then you allow people to like basically set up projects and you like people Say, I have a project here is something that I’m doing. And if you like this, then you can donate to me. And you let people donate their projects. And then the core of the mechanism is basically that if there is a projects that multiple people donate to, so there’s some project you donate to it, and someone else donates to what as well, then your donation doesn’t just benefit benefit you, it also benefits the other person and the other person’s donation doesn’t just benefit them, it also benefits you. And so to kind of counteract that, and of market failure, the mechanism basically says, well, we’re going to multiply the effect of your donation by two ads multiply the effect of the other person’s donation by two. And so now, both of your incentives are kind of aligned with the whole and you extend this mechanism. So instead of supporting two people, it supports an arbitrary number of people. And you kind of calculate these subsidies across all possible pairs of people. And what you get is this formula that basically says you’ll When people donate to different projects, you’ll look at how many people donated and how much money have donated. And based on this from the central pool of funding, you give this extra subsidy. And so it basically is like a market for public goods. Right? And in the Ethereum ecosystem, there’s something called that get coin grants, where we’ve basically started like trying to use this mechanism to fund public goods inside the aetherium ecosystem, right? So this could be implementations of the etherion protocol. It could be scaling solutions. It could be wallets, it could be educational resources. And we’ve had a sniff test around recently with about $200,000 in this central matching pool. And it recently finished and you can go to slash grants to see the results. And then we got contributions from hundreds of people and the results that gave were actually pretty reasonable.

Eric Weinstein 15:54
So and test. Yeah, and so

Vitalik Buterin 15:56
I think Ethereum could have a lot of Value us and just being a test net bed for an decentralized governance and decentralized public good funding infrastructure of this kind?

Eric Weinstein 16:10
Well, I think that that’s fascinating. I guess one of the ways in which I would understand that is, you know, when my wife was an economist, and I talk about this stuff, we often talk about a market democracy has these two voting systems, one is $1, one vote, and the other is one person, one vote theoretically, anyway, even if that’s honored only in the

Vitalik Buterin 16:29
free eye, and like, liberal democracy does this horrible thing of like treating these as opposite poles where something is either one or the other? And they’re and they’re often fighting each other when really everything’s a spectrum.

Eric Weinstein 16:41
And I like that a lot. I mean, another thing that we’ve been discussing recently, and this again is sort of drink with with pm Kalani is thinking about the Chicago approximation, where you’ve got some reality that’s incredibly nonlinear and complicated, and then weirdly in a one of these Famous instances where the map is not the territory. You take this incredibly simplified world where agents have this properties you can’t even believe you would ascribe to a human being where you call it homo economicus, and it’s perfectly rational. And it has all of these characteristics, like an automaton that only makes rational decisions. And then you impose that, like through law and economics programs, and suddenly you’ve distorted your society by taking the map as the territory so seriously, that you don’t realize that you’re destroying something in distorting. Yeah.

Vitalik Buterin 17:40
No, that’s definitely the like, it’s a it’s one approximation. And, I mean, we’re never going to have approximations that are perfect, because the world is just so glad to hear that. Yeah. And the world is just so complicated and so even rapidly changing in the 21st century. Like a proxy in all approximations are bullshit, but like you have to find a couple of good ones that work reasonably well and make progress for us.

Eric Weinstein 18:07
And I think that one of the things that’s unfairly done to cryptocurrencies is that we expect them to solve all of the problems that already cropped up. Yes, in our forms of governance in our forms of currency and exchanging court systems. And that what we should be asking of them is to be improvements or to augment already existing systems. Now, one of the odd things about governance is we could view you as in some sense starting a rival virtual country that has a legal system because the aetherium I don’t know what to call it network platform protocol.

Vitalik Buterin 18:49
Yeah, it rolls coins and it has the right to reassign those coins.

Eric Weinstein 18:52
And not only that, but it has a stand in for the legal system in the form of what are called smart contracts. Normally a we have this concept in governance, I guess it goes back to vapor that a government is supposed to be a monopoly on violence, which is an odd definition that you recover the concept of government from monopolizing violence and then you use sort of unearth and unpack all of the features of government from that one generating function. In some sense a cryptocurrency and smart contracts derive from math rather than violence

Vitalik Buterin 19:33
derived from math and social consensus rate.

Eric Weinstein 19:37
I love the fact that I was gonna get to that but I know

Vitalik Buterin 19:40
because this is important, right? Because like, for example, you know, you have the Bitcoin blockchain. And then you have the Litecoin blockchain, which operates under almost exactly the set at the same set of rules as the Bitcoin blockchain. And yet, the Bitcoin blockchain has 100 million dollar market cap and the light coin blockchain has a $3 billion market cap or something like that and much less you So, like blockchains are definitely not just math and technology, methods technology are the substrate in maybe in the same way that the military is like the substrate of keeping a country together, but

Eric Weinstein 20:15
they’re including police force

Vitalik Buterin 20:16
exactly, but like they’re the substrate but they’re not the country, right the country is the community.

Eric Weinstein 20:23
Well, and this goes to what I would love to get into you with love to get into with you, which is the way in which different utopian dreams collide in the space of cryptocurrencies. So, for example, there are some dreams that may sound more like what I assume you may be active in the effective altruism community. Is that a possibility? Yeah. Which tries to figure out how to do the most good to do good efficiently rather than sanctimoniously. There are other people who have this idea of I just want retreat from other human beings and I want to be left alone I don’t want to be taxed I don’t want to be told what to do very strong libertarian perspective sometimes those people are the same people

Vitalik Buterin 21:10
there’s two kinds of libertarians there’s well there’s many ways to split the Aryans the two kinds but one like there’s the Leave me alone type and then there’s the kind of conquer the world type right the kind that kind of relishes exceeding fiat currency is be destroyed and replaced by Bitcoin and it’s kind of you know, creating 1000 year kind of reign of sound money that soon I mean, I generally have this kind of instincts that like when someone says that like we should impose a lot of short term disruption and harm on the entire world for the sake of some nebulous a long term game. That’s something to be skeptical of. But so I’m gonna

Eric Weinstein 21:52
line the word skeptical. Hmm. You’re using an extreme form of understatement.

Vitalik Buterin 21:58
Yeah, yeah. And like, I guess So I’m I’m definitely not in the camp that had to actively relishes like fiat currency is being destroyed. But I mean, there’s and I definitely don’t think that all bitcoiners do like there is some that do see it as an of a something that’s supposed to coexist and something that’s supposed to provide a check and balance against the government’s monopoly on issuing money without replacing it entirely. So you know, there are there’s definitely different visions within individual communities, there’s different visions between different communities. And then there’s, it’s not just visions about what cryptocurrency should do to the world, it’s also a divisions about like, what how cryptocurrencies should work internally and what they should do to each other. So like, not in that sense, I guess, like, cryptocurrencies are interesting in in blockchains, not just because of like what they can do to the world but also just as this a microcosm of the world all unto themselves. I mean, like we talked about countries, virtual countries, but you know, there, there’s many virtual countries. Now there’s over 1400 on coin market cap, and they have some analog of God, do

Eric Weinstein 23:14
you think of them as virtual countries?

Vitalik Buterin 23:16
It’s all models are bullshit, but some are useful.

Eric Weinstein 23:22
But to the extent that a country is a sensible thing to label, yeah, yeah. So, in that world where we’re dealing with often very radical individualism, and a very strong sense that there is something wrong with the coercive aspect of a government. Do you worry that something that you have given birth to, may start to behave in very different ways ways than you would ever want.

Vitalik Buterin 24:03
Definitely. I mean, probably the closest that we’ve seen to things like this happening already would be the the initial coin offering and boom in 2017 and 2018. And like basically what happened there was that people saw that cryptocurrency is are something that could potentially hit a very high value and so people started saying, oh, like, I’m raising money like anyone come in, I give me $50 million. And I’m gonna build a cryptocurrency and I’m gonna make it great and I’ll turn your $50 million in 250 billion, guaranteed, and this and it’s complicated, right? Because I mean, on the one hand, like the possibility of kind of raising money and using it to fund cryptocurrency developments like it’s, it did a lot of good right began like in general, like the open source community. It’s like And it kind of acutely suffers from this kind of public goods challenge that we talked about because the an open source software is a very public good. And we saw some very public kind of splats involving open source software being under maintains like the CloudFlare and have issues a couple years back when it turned out that’s an open SSL library was like really, really under maintained despite billions of dollars of value depending on it. And with cryptocurrency, suddenly you can make things that are completely open source that through coins do have a funding mechanism. And like, you know, this has massively, massively accelerated the developments of many kinds of cryptography, zero knowledge proofs and peer to peer networking, a lot of other things. But at this, on the other hand, like it’s also given rise to this kind of speculation, and in many cases, the projects turned out to be outright fraudulent, right,

Eric Weinstein 25:54
but it’s a really delicious and weird situation. I haven’t asked you about it yet, but you’re right. Presumably your net worth crashed a great deal. We got run up and then came. Came back. Did you know and were you happy in any way about that?

Unknown Speaker 26:13
relieved? relieved?

Vitalik Buterin 26:14
Yeah. So when the right at the top of the big bubble like in December 2017 when Bitcoin was hitting 20,000 eath was hitting 1400 I made this tweet and a series of tweets and that sort of became somewhat famous on Myspace where I basically said, the cryptocurrency space has reached half a trillion dollars does does it deserve it? Like do the things that it’s actually accomplished? Like hold a candle to the promises that the market is ascribing to it? You know, I mean, the subtext of my answer is not yet and that was proven very right fairly quickly

Eric Weinstein 26:59
to Didn’t short it, did you?

Vitalik Buterin 27:01
So the I did can get and get the aetherium Foundation to sell about 70,000 eath like basically at the top, and that’s doubled our runway now. So it was one good decision that had that had a lot of impacts. But it did not short,

Eric Weinstein 27:21
I should say that I was weirdly somewhat relieved as well I viewed that the innovation of decentralized transactions. And then, you know, it’s hard for me to say because I actually am convinced that the blockchain should be an intermediate state and should not be the permanent version of decentralized computing. Okay. But I thought that that was such an amazing innovation that you could have a locally enforced mechanism Without a centralized authority, but with a global ledger unfun, which, which I see is a point of intellectual failure, that, in some sense, you’re mirroring the transactions of the physical world. So for example, for those listening at home, we don’t have a visual here, metallic, has several glass bottles next to him, where he could give one to me, which you shouldn’t do right now. But the idea would be that it would no longer be in his space, and it would be in mine. And that property of atoms has been somewhat mirrored in Bitcoin and blockchain and aetherium transactions.

Vitalik Buterin 28:47
And this is like, the concept of like money as a thing, right? The scarcity of the 21 million limits. If I give you five coins, I have five less than you have five more,

Eric Weinstein 28:58
right and so the idea is that it’s a What you’re doing is you’re porting conservation laws into from the physical layer into the logical layer.

Vitalik Buterin 29:07
Right? And yeah, and this then if to some extent kind of reflects the kind of very deeply kind of Austrian economic libertarian origins of the the space way back back in the end of 2009 to 2013 days in creating like digital gold was pretty much the AMA digital payment system was the first use case. But I definitely think that, like we can and should be thinking about point systems that work in ways other than money.

Eric Weinstein 29:39
Well, I agree with that. And I also think that it isn’t digital gold because as the saying goes, you know, gold or money has no stench, and that the blockchain is this bizarre difference with the physical world in that it is a distributed ledger that may be somewhat anonymous, but still gives The history like if I hand you $1, and you don’t have access to any particular means of analyzing whose DNA is on that dollar, you have no idea where it’s been. And these that is not that is violated by the current blockchain type implementations. Yes. So it isn’t a complete port of the physical world in digital, but it is a an astounding one. And I guess I get very frustrated with the economics questions like, well, what’s good, what’s good for where’s the killer app? I mean, we have all of whatever’s left of human civilization to figure out what this thing is meant to do. Yeah. And I’m not very worried that we’re not going to figure it out. I mean, we’re going to figure it out sooner or later because a conservation law in digital space is just too valuable. They’re wrong. Are you worried at all about the search for like, I just hate this question. Where’s that? Where’s the killer app? And I’m thinking, chill out, man. This is an astounding intellectual achievement. Is that wrong?

Vitalik Buterin 31:09
Yeah, and I think there’s definitely a Yeah, and have a long time to go. And I think in the apps will come and there’s the ones that are coming right now are basically going to have financial but I think, I mean, that’s kind of true, just in part because the finance the existing financial system is just like so ready and waiting there to be disrupted. That in the long term, like there’s, there’s a disruptive and

Eric Weinstein 31:37
polite term for destroy.

Unknown Speaker 31:40
You choose?

Eric Weinstein 31:44
Well, but I mean, there’s something interesting here you’re 25 years old. Hmm. Every bit of your adult life is post 2008. Mm hmm. And to be 25 years old, and in charge Have a financial ecosystem to the extent that anyone is in charge of a theory. And I don’t want to claim that you are sitting there, running it making all these decisions. That’s an astounding thing that that this has fallen to somebody who, whose adult life is post the crash. Hmm. Do you think about that at all that you don’t have the same associations the rest of us do with markets when they were claimed to be working well, like during the during the era of the great moderation, supposedly when volatility was banished?

Vitalik Buterin 32:37
Yeah. So Team 12.

Right. So one thing that I kind of only realized recently that I found interesting is that there like there aren’t kind of two tribes here. There’s three tribes, right. And what I mean by this is that there’s the tribe that says markets are are great, and there’s A tribe that says markets are bad and like we shouldn’t move to more things that look like political mechanisms. But then if you look at kind of the the Zeitgeist that’s kind of fairly popular in the cryptocurrency space, I mean, definitely even still now to a big extent, it’s that markets are great. But the thing that existed and exists like isn’t markets. And so I guess like there’s people who are pro market and who see kind of the existing financial system as being that, and there’s people who are pro market and receive the existing financial system as being like yet another one of the perversions of that that needs to be overcome.

Eric Weinstein 33:40
Well, it’s odd because I would love to fix our democracy. I’d love to fix our markets. But I’m, I have to say I believe that I have grown up in a approximately 50 year bubble which the silent generation and then the boomers presided over And my own read is that because of their inability to figure out sufficient innovation to take over from the previously innovative system, that the world of human expertise has been almost completely contaminated by special pleading and political economy, so that many of us who don’t have a particularly Austrian or libertarian bent are just sick to death of being lied to by people claimed to be Nobel laureates in economics. Yeah. Dude is Yeah. 70 emotional connection to you.

Unknown Speaker 34:41
Mm hmm.

Eric Weinstein 34:42
Like, I feel like I’m lied to about almost almost, you know, the doctors are lying. The lawyers are lying. The accountants are lying. The extraction companies are aligning. And it’s not because of a million different reasons. It’s because growth ran out and our whole society is predicated on a need for economic growth.

Vitalik Buterin 35:04
Yeah, no, there’s definitely things that are that have changed in us and a system that’s just not keeping up and doesn’t and doesn’t understand that there is such a thing as keeping up. It’s like, hmm, so, like, one like that. Even Glenn talks about this, right. Like, he talks about kind of the mark markets as social technology mentality versus the, like, basically, End of History mentality, and I guess, like, the way that they can, and I definitely saw this kind of, is, I guess, 10 years ago that said, kind of even more broadly than, like markets versus other mechanisms. It’s like, things are 80% efficient and lots of work to make them 95% efficient. Whereas the, the thing that’s really going on So things are 3% efficient, and we should work hard on making them 6% efficient. Like if you kind of move away from the narrow context of like I’m, I have something to sell when you have something to buy, which is pretty well optimized already, then there’s lots of these and a very big things that are happening that have just completely been missed and in technology and then of network effects in all, and just generally kind of migrating from atoms to bits are definitely all a big part of it.

Eric Weinstein 36:31
So let’s talk about something that’s a little bit funny, which is if you’re starting to replace government, as we were talking about it, and you see it as a monopoly on violence, you notice that very often there there’s a very funny role played by organized crime. Now, of course, when we think about organized crime, we tend to get emotionally excited by it for whatever reason, we make lots of movies about it. It occupies the mind is something terrifying and alluring. And there’s sort of two weird aspects to organized crime, one of which is violence as a contract enforcement mechanism. In other words, you’re you’re gambling, so you don’t have access to the regular court system. Now you have a gambling debt. And so just the way our government would put you in jail, if you, you know, started doing things, you couldn’t fulfill all of your obligations, and you were doing harm to lots of people, you couldn’t be stopped. Organized crime has to do something can’t maintain jails. So it can put the hurt on somebody for means of contract enforcement. So it’s, it’s not looking to do violent things. It’s looking to run illegal businesses for which there’s demand. Yeah, and then it has a problem of enforcement. Then there’s another part of it which is violence is the product. So for example, extortion. The shame if anything were to happen to this lovely business that you’re running? is a veiled threat pay us or we’re going to do harm to your business or, you know, contract killings in the like, Yeah. Are you worried that effectively by introducing parallel structures, both in the form of currency and in the form of contracts, smart contracts that are the cynic one on I guess, of the difference between Bitcoin and aetherium, right that the killer app that is most likely to happen while the technology is still clunky and cumbersome and difficult, is in the parallels space that either you are going to replace organized crime as a place to do contractual business outside of the normal scope, which could be a benefit because organized crime still exists and is a bad thing because it uses violence and you would use Math and in place of it, or that it could actually be used to facilitate violence by, you know, using, let’s say prediction markets or something else, to induce people to commit crimes where the committer the committer of violence has unusual information about where the violence will be committed and therefore can profit from it.

Vitalik Buterin 39:28
It’s definitely a worry that have ion lots of people in the crypto space I’ve had since the beginning, though. I do feel like at least so far, I’ve been surprised like, it feels like less of it has happened than we had expected

Eric Weinstein 39:40
the thing. Yeah. Now what do you what accounts for the idea that something that can be drempt has mostly not occurred?

Vitalik Buterin 39:51
This I definitely have a

Eric Weinstein 39:54
maybe it’s a great thing about humans that we didn’t realize that we’re not nearly the horrible people we thought

Vitalik Buterin 39:58
and I definitely have a couple theories about this. So one of those theories is that like, basically, a lot, a lot of things that people do, and especially a lot of things that people do in the InfoSphere, because like public goods are kind of chronically underfunded, and all that rely really heavily on goodwill. And so, you know, you have goodwill that if someone if you pay someone to write some piece of piece of software for your website, it’s not gonna include some blogs code. Yeah, some bug that will steal people’s money or tell the FBI where you are that you if you create a system for enforcing agreements that they’ll actually get enforced then, even like on internet, internet forums, they depend on I know of a lot of volunteer labor for just things like moderation. And if you create a group that just goes, like, fundamentally against like the vast majority of people’s values, Then it’s just going to be hard to find volunteer effort for that sort of thing. And like this. So that’s probably the big the big reason I think why so far we don’t really see a kind of, you know, complicated decentralized structure is being created to facilitate like, black black markets for killing people and so forth. Because let’s

Eric Weinstein 41:24
start out with something more mundane like a numbers racket, right? So a numbers racket would probably be a much simpler application.

Vitalik Buterin 41:33
So what do you mean by numbers racket here?

Eric Weinstein 41:34
Well, something that takes the place of a lottery where some, let’s say some naturally occurring number that would be printed in a newspaper, and presumably, nobody has the influence over what number gets printed. Right, constitutes the lotto draw.

Vitalik Buterin 41:50
lotteries have existed on blockchain since the beginning. Yeah, okay. Even. There’s definitely been this kind of self community of people that created these things. Kind of provably fair Ponzi contracts where they have a smart contracts and you can throw money in and as soon if you’re the person to throw money in as soon as soon as to when people throw money and you get, like 1.9 back or something like that, and this was just a fun game that people have made and like participated didn’t even fully knowing what the economics of the thing are. So, yeah, and thing, things like that. It definitely happened, though. I don’t like, though, in gambling is the sort of thing that like, there isn’t like, there isn’t this kind of nine, like 99% plus consensus that it’s really horrible and evil, right? Because, like, on the one hand, like lots of people want to ban it, but on the other hand, people do it. Yeah. And it’s something that people see negative consequences of but at the same time, it’s something good is something that people participate in and enjoy whereas the None of extremely bad stuff like that’s there’s definitely this kind of this kind of barrier between kind of things that are edgy versus things that are just so far over the edge and for things that are kind of so so far over the edge like it is even with smart contracts and even with all those things, it’s still hard to coordinate those structures. And I think like the blockchain, like the block chains, inability to directly read facts about the real world could even be a saving grace here. Because like because of blockchain can’t directly read whether or not something in the real world happens. It basically means that if you want to have some application, whether a prediction market or something else that does, like so, can we

Eric Weinstein 43:47
say a little bit more about the proof of the intellectual problem that you’re, you’re touching. So the idea is that there may be something that’s very perceptible to us about the real world but We might naively think, well, the computer should be able to tell whether that happened. Right? or it didn’t happen, and that that’s a surprisingly difficult thing to code up reliably. So that the interface between the world of bits and bytes in the world of otherwise physical reality, which often we don’t realize we’re thinking about subjectively, that it’s hard to maintain that interface. So that the way in which the things that have happened in the real world can be definitely agreed upon without us any kind of adjudication inside of the digital, right. Yeah. So I don’t know how to say that. Well, blockchains are

Vitalik Buterin 44:44
in a fundamentally programmatic medium, all they see is like data that gets fed into them and what they can compute as a result of that data. And so if you wants to create a smart contract that says if someone figures out how to What the prime factors of a big number are pay them a reward, you can do that because prime non prime factors are something that you can multiply together and verify. But if you want to have a smart contract that says, if there’s a hurricane in Sri Lanka, then pay 500 bucks then, like you can’t do that on the blockchain itself, because like computer code has no idea what hurricanes are, it has no idea what Sri Lanka is.

Eric Weinstein 45:24
Nobody knows. But in that case, you could have a designation that you know that the national correct you can,

Vitalik Buterin 45:31
you can get data from third party sources. And this is the thing that turns it into data. Exactly. This is the thing that a lot of applications are doing. But the thing that’s important to keep in mind is that as soon as you do that, like your smart contract is no longer fully trustless.

Eric Weinstein 45:47
Right, right. So there’s this concept, which is like a utopian Khan’s concept of a trustless legal system, so that you don’t have the messiness of humans anywhere in the system. And you can have complete faith and confidence in the contract that you’ve struck.

Vitalik Buterin 46:04
Yeah, right. And like outside of proof, like basically giving bounties for solving math problems, like it’s not something that you can 100% achieve.

Eric Weinstein 46:14
So I can’t necessarily ensure my vacation that if, if I go all the way to Argentina and the weather is terrible, it pays out because we can’t agree what terrible weather is, right? Like you

Vitalik Buterin 46:29
can create structures bit made out of individual participants that can try to align incentives to get people to kind of give to give correct results. So you can have complicated and have contraptions involving people giving different answers and policing each other and rewarding people who give the same answer that other people have committed to and things like this, but like you can only try to approach the, like, the ideal of kind of correct truth like you can never 100% Richard,

Eric Weinstein 47:01
now you started aetherium in 2014 2015.

Vitalik Buterin 47:06
Started started end of 2013. I mean, it launched in 2015.

Eric Weinstein 47:10
Okay. Would you say let’s use launch date as an artificial sure date? Would you say you are more or less excited emotionally? Hmm. Then you were when it started. You’ve now been through. you’ve logged some miles here. Hmm. I

Vitalik Buterin 47:32
definitely, definitely an excited.

Unknown Speaker 47:37
We’re excited.

Vitalik Buterin 47:38
I think the main difference is kind of more definitely a kind of excited in the sense of like four years. Well, definitely, like, kind of as opposed to indefinite, but like, four years, yeah, four years ago was about like, hey, let’s make this platform to kind of try a really a bunch of really cool things. We have no idea what’s going to happen and like Just stick it out there. And now like, we know things about things that people are already doing, we know things about things that people wants to do. And we and we also know more about what the limitations are. And so instead of just being this kind of extremely fuzzy dream of like, let’s stick smart contracts and algorithms and kind of trust or justify everything, right? It’s something that’s kind of both


moderate, but also kind of more like seeming much more like it I like it actually has a big chance of kind of transforming the world kind of precisely because that’s when moderated to some extent.

Eric Weinstein 48:43
So you more if I gave you a false three choices, and by the way, smart people always hate these things. So feel free to break the model. If I gave you a choice between saying, Are you mostly excited about the technology and the amount of innovation are you mostly excited about? About the business opportunities for yourself. Are you mostly excited about the way in which this could transform human life? Would you be that? Would that be an easy call? Or would you say I reject that decision tree? Some mix of the first and the third?

Vitalik Buterin 49:20
I don’t know. I guess like, the framing of business opportunities is definitely kind of never like, this is weird. I mean, despite of even

Eric Weinstein 49:29
I get the sense that you don’t love money enough.

Vitalik Buterin 49:31
Yeah, this is true. Okay. Hmm. I mean, it’s weird, because for a long time, you

Eric Weinstein 49:37
have a lot of it.

Vitalik Buterin 49:39
Yeah, well, I have a lot of it. And it’s also even weirder because I like for a long time I subscribed so this kind of branch of economics that basically says that like love of money is like the best motivation for Bebo for people to

Eric Weinstein 49:51
have and I’m Randy and I’m

Vitalik Buterin 49:54
well in, I’d say. Me in that area.

Eric Weinstein 49:59
Yeah. But I don’t get that. I’ll be honest, I don’t I just don’t get that vibe,

Vitalik Buterin 50:03
right? I mean, there’s, I’ve definitely kind of shifted a lot over the years. I think my experience even within the crypto space itself has kind of turned and given me a lot of new information to work with. Like this. Basically in then this goes back to this kind of cryptocurrency is as a microcosm of wider society of thing, right? Like, if you’re like, basically any like any movements regardless of what what the movement is for what its goals are to be succeeded needs to be sufficiently big. And once something is sufficiently big, it needs to have internal structure to coordinate and achieve its objectives, which means that it suffers from governance issues, it suffers from public goods The issue is, it suffers from conflicts with adjacent movement. sed suffers from conflicts between its own values and its and its own desire to succeed, and so on and so forth. And like it needs to come up with ways to answer like, basically almost the same kinds of hard problems that the world as a whole is working on. Well,

Eric Weinstein 51:18
you know, it’s interesting. When I look at this sort of World of people maybe had an epicenter in the Bay Area, though I think it’s less true now. We’re trying to figure out what is the future and how do we get there? There’s a very clear sense that people’s creativity and their intelligence is correlated with their financial success, but it’s not very tight. And so there’s like an embarrassment that, well, that person is super amazing and then not doing all that well. This person, somehow metabolizing tremendous amount.

Vitalik Buterin 51:56
This is something that I’ve definitely got to realize just from one of my travels, like I’ve interacted with a lot of kind of super famous people in different kinds of positions, which includes like some world leaders and includes some kind of leaders of like fields in cryptography. And it in you realize that, like, people in these positions, they are impressive, but they’re not like super amazing godlike, impressive, right. Some of them are, some of them are but then there’s also super amazing God like impressive people that just like don’t get to get that much recognition at all.

Eric Weinstein 52:32
What I’m trying to get at is that I think about, like, if you’re hanging around with musicians, very often, you’ll have somebody who’s a super famous musicians and you won’t know who’s really good. And they’ll tell you something you’ve never heard of you say, well,

Vitalik Buterin 52:45
this musician, exactly this Yes.

Eric Weinstein 52:48
Right. And so, you know, if I, if I gave the name of people who are famous for being let’s say, physicists, they’re very often the people on television As physicists, but they would all point to some guy who doesn’t give a lot of interviews and say, well, that’s the top guy exactly

Vitalik Buterin 53:07
like basically the social status like, is predicted by competence multiplied by, like, basically publicity skill. And that’s half correlated with competence for obvious reasons, right? Like those people also know the people that have the real competence. And

Eric Weinstein 53:24
that’s one of the things that I’ve always found really interesting about people who have this diehard belief that markets produce justice, which is, I do think that success in markets is somewhat correlated, or has been with things like productivity, but it’s also correlated sometimes with how predatory somebody can be or you know, how lucky they happen to be at a particular moment. And one of the questions that I have is if you’re really interested in innovation, which is what I do sort of pick up is one of the main things. How does something like aetherium give us a possibility to revitalize innovation after what many of us consider a period of relative stagnancy outside of the areas of computation communication, which everybody knows have exploded. Huh? Do you think about how Ethereum can mediate a new Renaissance, a new generative age? You talk about it a little bit.

Vitalik Buterin 54:35
Definitely. And I think

there’s enough aetherium as a platform for experiments in own governance and public goods funding is one thing I mentioned. And education is another thing that I kind of talk about and you and obviously we do I mean, I have a lot of these blog posts on and other forums and like this Arrow, one of the big challenges that for example is that like for in an internet educational resources in general, there’s basically two kinds, right? There’s like papers and Wikipedia and like basically things that are technically accurate, but they’re just like horribly not understood and understandable at all. And we should not be forcing people to even try reading them. And then there’s Popeye literature which is very accessible, but it’s often just actively wrong and really horrible ways. And like I I personally, even before theory, I’m like I did Bitcoin magazine, for example, like I’ve always tried to find this kind of middle gap this way to explain, take concepts that are technical and then expand them to a broad, a broader audience so they are more accessible. And like this, to me has been important in part because like I view accessibility of information about the technology as a precondition for even the decentralization over the space. Like if the thing technically runs on 50,000 computers, but only 42 people know how it works, then your decentralization, indexes and 50,000. It’s 42. And so

Eric Weinstein 56:10
it’s a very nice point.

Vitalik Buterin 56:11
Yeah. And so trying to kind of improve even like, even how we, in the theorem community and have work on innovation internally. But so those are kind of things that that happen in blockchains as NFL as a lab for trying out new things going to first for the blockchain space, and then potentially, potentially export it to other things. And then we can also look at kind of blockchains as something that can be used to improve and create better institutions. So like one of the theorem foundations, researchers have a lot zamfira he actually got into a theorem because he was looking at how to improve academic publishing. And, like he saw things like you know, the existing peer review mechanism And how they were just very flawed in a bunch of ways. And he thought that, like, Hey, here’s potentially a platform that we could use to build something that does better. And like that’s one of his core interests and why he’s even continuing to work on the technology.

Eric Weinstein 57:18
You know, I hadn’t understood how insiders, you’d peer review in an academic context until a finance Professor got drunk at a party and said, you know, that guy who’s harassing you in your research and finance, you don’t know why he’s doing it. So well. Why do you think he’s doing so I know, he says, We’ve created a system where our fees are sky high to consult. And we do this by making the number of professors in our fields small by controlling peer review. And so that effectively, we’re conspiracy and restraint and like, this guy’s just telling me straight out that this is a gating function to keep their consulting fees high. that this guy is going to do everything that they tell him to do. Because otherwise he can’t come into the club and charge these rates. That

Vitalik Buterin 58:07
sounds about right.

Eric Weinstein 58:09
Right. So that one of the app, another killer application. So you have one potential suite of applications, which have to do with facilitating illegality, some of that might regard result in net reduction of harm, because you could replace violence with math. Yes. On the other hand, a place where you could have a really positive effect is political economy where by removing the human ability to act badly, you effectively create a much fairer, more representative world exactly, you know, a, what do we do so you have an interest in the two fields that I find Wikipedia can’t explain to any normal human being our theoretical math and physics. Even biology you can sort of guess what’s going on because you have something concrete. But

Vitalik Buterin 59:06
it’s even biology. Like you gotta learn math to deeply grok it because otherwise you’re just memorizing like names of chemicals.

Eric Weinstein 59:13
Well, but you might hear I have a PhD in math, if I try to read a math paper, one or two fields over from my own field, right? I will do less well with it than if I read a biology paper, even though I’ve taken a class in biology.

Vitalik Buterin 59:32
That sounds right. Yeah. Yeah. Like there’s a difference between the level of math that you have to know to just because it’s important for you as a philosopher, and then and like, that’s about the level of math that I think you need even to be good at biology to be good at economics to be good at a lot of things, right. It’s understanding like principles, even things like for example, if you have a trade off between X and Y Right now you’re optimizing entirely for x and it’s a smooth curve, then if you want a little bit of y, then you can get your first bit of y at almost zero cost of x, right? And that’s just a prop. Like it’s a property of continuous functions that go from the maximum, the derivative starts at zero. And if you kind of just deeply kind of mentally grok, about like a couple hundred of these facts, while you’re deeply kind of mentally grok, like how to walk then, like you get a lot, but then from there, there’s also like the frontiers and often I mean, the frontiers are less important.

Eric Weinstein 1:00:34
Well, so here’s a weird thing. I don’t know how to bring up when I tried to understand crypto as a space. I’m always confronted by how incredibly Byzantine and impossible it is to understand all of the acronyms, all of the sub pieces of history. I mean, it’s an incredibly fragmented experience in which I spent a long period of time just feeling moronic. Isn’t it odd that like, if cerium itself suffers from this, this problem? It’s hard to know what’s going on?

Vitalik Buterin 1:01:09
Yeah, it’s definitely something that we wants to fix. So I mean, if you ever have suggestions on like, what specifically, we can make more understandable, I’m always happy to hear those.

Eric Weinstein 1:01:21
Fantastic. Now, one thing that I think is really interesting is this episode that occurred in the aetherium space in which you were faced with a very serious question of leadership having to do with an emergency that you could have either allowed to follow the rules that had been previously specified in some sense, or could where you could interject a certain amount of human intervention, thereby letting people know that this was to some extent not mediated, only by rules and computers, can you? Can you say a little bit about this famous incident? And Sure.

Vitalik Buterin 1:02:05
So in 2016, there was this smart contracts that a group called select get launched called the DA O. And D. O stands for decentralized autonomous organization. It’s a term I came up with about three years before. And it basically means that you can have a smart contract this computer program that controls digital assets and in code, a set of rules for an organization. And like you can use this kind of smart contract basically as a replacement for things like companies. And so small kid decided to launch a Gao and their Gao was intended to be basically a decentralized VC fund, so people could apply. The Gao would vote on which projects were worth investing in.

Eric Weinstein 1:02:51
So leaderless rule based, yes. And virtual Exactly.

Vitalik Buterin 1:02:56
knows the hit hit all the cipher punk notes in the in the right place, okay, and the thing lunch too and we were all expecting it during it’s kind of initial fundraising phase which was also like an open public blockchain process and to maybe get $5 million but then he got five and he got 10 and I got 20 I got 50 and 100 and then the price of eath went up and I got 200 and then when I was sitting at a friend was

Eric Weinstein 1:03:28
it all alarming that it was so successful?

Vitalik Buterin 1:03:30
it after the 50 mark, I definitely kind of switched from excitement to deep apprehension, but you know, it’s a contracted you let on it

Eric Weinstein 1:03:39
that you were feeling that way.

Vitalik Buterin 1:03:41
A bit. Okay. You know, so on June 17 2016, when I was in Shanghai at a friend’s apartment and it was about 1530 something. In the afternoon, I saw a message in one of The Skype chats that I was that I was in, and someone basically saying, hey guys look at the Dow, it seems like there’s some money coming out of it. And so I checked on the public block explorer on the blockchain. And I saw Oh, look that it seems like about $2 million eath has actually already been removed from the Dow and more eath incentive slowly being drained over time. And so I pinged the core developers and I asked, Hey, is this normal? And at first I was thinking, Okay, the alternative is unthinkable. There has to be a reasonable explanation for this. And

Eric Weinstein 1:04:37
so you were locked into some sort of denial

Vitalik Buterin 1:04:39
for the beginning. Yes. And the developers looked at it and over the next half hour, as more and more people came online and started chattering with each other, it became clear that the unthinkable has actually happened. And I actually burned about 20 of my own ether. Basically just dossing the Ethereum blockchain itself and just spamming it with transactions to try to kind of slow the attacker often is

Eric Weinstein 1:05:09
denial of service.

Vitalik Buterin 1:05:10
Yeah, yeah, just spam. The blockchain was transact not

Eric Weinstein 1:05:12
all of my listeners will know the terms,

Vitalik Buterin 1:05:14
okay, so that the attackers transactions could not get in as quickly because the attacker is transact, the attacker could only withdraw something like a couple hundred eath with every transaction. So it was a slow process, like in the hopes that the developers would find some way to play with

Eric Weinstein 1:05:29
intentional inefficiency, or it was just that

Vitalik Buterin 1:05:32
it was it was not intentional.

Eric Weinstein 1:05:34
So in some weird way, the inefficiency was a good

Vitalik Buterin 1:05:36
yes, it gets even weirder, there was an even bigger inefficiency. That was that would prove to be an even better thing. So but then the developers, however, did not find a way to plug the hole. But the attacker voluntarily stopped after stealing about 4 million eath from the Dell. But in any case, the this is the second inefficiency, right voluntarily

Eric Weinstein 1:05:57
stopped. Yeah, there was a request made

Vitalik Buterin 1:06:00
no no as in the attacker just stopped.

Okay. And

so here’s the second and bigger inefficiency, the money that was the attacker took out the 4 million eath. It did not go into the attackers wallet immediately. Instead it went into a child smart contract. And only after 35 days, could the attacker actually take that money out? And this was child smart contract, you mean a separate smart contract that that was created through a function call of the main do smart contract. Okay. So this was also not intended, right? It was just like a random quirk of fate that there was this big bug that was the biggest smart contract theft in history up until that point, and it put the money into this convenient box where it would just stay conveniently locked for 35 days, wherever one could stare and look at it.

Unknown Speaker 1:06:55
A little Oh,

Vitalik Buterin 1:06:57
yeah. And the Soon after this, there were calls happening between core developers and the proposal to remedy the situation with a blockchain fork came into play. Right. So basically what happened here is the there was a blockchain fork and emotional issue for this community. Yeah. So why is this so? Well, I guess first of all, what is it exactly? So explain what what would happen. So, in general, a blockchain fork is on normal process, right? You have an upgrade and the developers of aetherium clients implement code that basically says after block number 44370000. Stop processing blocks according to the old rules start processing blocks according to the new rules which have extra features attached. And

Eric Weinstein 1:07:47
blocks are just sent

Vitalik Buterin 1:07:49
packages of transactions. Yeah, okay, and Bs and so ever before this sub, I know these code patches are for Proposed, there is this month long period of many months long period of deliberation where changes are proposed people discuss them people talk about them. And generally it’s agreed that these changes are good. And so people just go and download the code and because everyone’s downloaded the code, the blockchain after block 4370000 followers, these difference in betters are

Eric Weinstein 1:08:21
very warm and very human processes. Yeah, cold logic of a machine.

Vitalik Buterin 1:08:25
Exactly. And so, the Dell fork, it was also a fork. It was also a code change implemented by the developers of the clients. That is him was pushed out through a new version of the different clients that people could download. And users went ahead and voluntarily downloaded. And it would basically change the rules of the blockchain, except instead of changing them permanently, it would only do a single one time change and the single one time Change basically said during block 11920000 before processing any transactions, take the ether that stuck in the this child contract and move it into another contract that could then basically refunds it all to the victims. And so this was a very kind of manual intervention, right? It basically says like, we all agree to run code that just irregularly takes us money and just reassigns it to this other thing. So

Eric Weinstein 1:09:31
it’s very weird because you know, we always think in like a sci fi movie that something that you think is human would rip off its mask and reveal itself to be a computer. And this is the reverse. pewter face is ripped off revealing humans behind this this technological stack?

Vitalik Buterin 1:09:51
Yes. And, I mean, ultimately, like people talk about head of blockchain immutability and like this is this idea. That basically you’re not supposed to do this sort of thing. And

Eric Weinstein 1:10:03
where does that supposed to come from?

Vitalik Buterin 1:10:05
Exactly. So like there is there’s definitely a sense in which it exists technologically, because like actually pulling off one of these forks is incredibly hard. And for example, if it was not the case that the money was conveniently stuck there in one nice little address for 35 days, it would basically not have been possible to do it, right. Because when as soon as you announced this protocol change that says, we’re going to take money out of here, put it on there, the attacker could just move the money from there to a different address and basically play this cat and mouse game and the attacker could win. But sometimes there is this possibility where you you absolutely can just like do these interventions and you can just decide to stop writing this code and start running this other code. And the only reason why this is not done more frequently, is basically because there exists these norms right in their existing norms in the blockchain community. Blood zamfira the researcher I mentioned before, kind of calls them a salvos ally, and like named after Nick Sabo, and an example actually dislikes the moniker salvos a lot, but like it is a pretty accurate representation of kind of his beliefs, which is and the beliefs of many in the crypto community, which is basically that, like, even though it technically is code run by humans, we should act as though it is code not run by humans. And like, because it is digital gold, right? Gold is not run by humans, gold is gold. And so if we want to make something that is like gold, then even though we’re unfortunately stuck with this thing, run by humans, we should like try as hard as we can to pretend it’s not. And like this was the ideology of a lot of people in this space. And the Dell fork very much went against this ideology. And so like, even though in my opinion, like having norms that you can’t just like, go and edit whatever you want is valuable, but like when so much such a large fraction of the ecosystem. stuff is at stake. It’s worth rethinking things. But like other people were, and if even more rigid in this regard. And so there was this kind of split in the community. And a portion of the community actually did not download the updates, right, a portion of the community did not download these code patches and implement the fork. And they just said, we will continue running our own our old chain. And the old chain has since then been called a theorem classic, and it runs to this day.

Eric Weinstein 1:12:27
This is a fascinating Civil War.

Unknown Speaker 1:12:30
In essence, yes.

Eric Weinstein 1:12:32
And what I get out of this is that there’s this very weird thing, which is that people get very attached to ideologies, and then they come to understand why the simplistic version of that ideology can’t possibly work in a warm human system. I watched this you’ve ever gone to this festival called ephemeral, which is sort of Burning Man on the water. That was I was part

Vitalik Buterin 1:12:57
of it, and I got invited to it, but I haven’t had the chance to go Yeah.

Eric Weinstein 1:13:00
So it’s kind of a libertarian Waterworld in the Sacramento Delta. And what was interesting is that one year in order to come to the festival, you had to have a lecture and you had to agree that you would receive the lecture because of problems that had happened in the previous year. And you realize that these libertarians were being forced to invent governance, and rather than just anarchy, you had to have some organized system. And so one of my questions is, is that is that dream of escape from the heavy hand of government. Effectively, not something to be pursued inside of crypto space for the most part because we realize that it is going to require governance and that we can’t figure out a way to turn this into a completely cold and methodical process.

Vitalik Buterin 1:13:55
It depends on which version of the dream you subscribe to make the if the version of the dream you Subscribe to as the dream that says that we can finally use algorithms to like, basically completely eliminate humans ability to interfere in things than, like, if your goal is to see that enforced 100% then like, no, you’re not going to get that. If your dream is that you dislike how governments have had existing governments and monopolies of violence have hegemony over this social function of coordination and enforcing structures of rules and you want there to exist an alternative, then, like that’s something that we can talk about. Right. So, like, if the if the dream is to augments? Yes. And, I mean, I’d argue that the blockchains have a very necessary role now, especially a kind of given modern kind of political trends where there basically is no single traditional public body that’s accepted as trustworthy by the entire world and it doesn’t look like there’s going to be one. But like if your dream is to, and if completely over overturn things and have like some simplistic notion of digital property rights as the only thing that governs behavior, then that’s something that like, you can try for, but you’re not going to succeed.

Eric Weinstein 1:15:22
Let me try something else with you that I’m curious about. You and I are both plugged into this weird alternate world that thinks very differently. And I had Andrew Yang, in that chair and you saw that episode of the VLOG before. Some people call this neuro divergence that this is a non neurotypical world. And I would say that both you and I exhibit some indicia of not thinking along standard lines. The thing that occurred to me is that you brought up slate star Codex, which is this website that is extremely influential in our shared world. And I was thinking about the difference between slate star Codex and CNN in terms of sense making. Is there any way in which the Ethereum world can create a counterweight so that the neurodivergent can rest the stranglehold that seemingly the neurotypical institutional world is going to have on sense making at scale? Like is there a way of promoting another blog in this world would be like less wrong? there particular thinkers that I think of as being very important, influential, I think you’ve given to Aubrey de Grey and later yudkowsky there’s like this very different world that isn’t well known. And in part I’ve used podcasting is like pirate radio, which is the phrase I keep, or some is that because you’re rushing Yes. What can we do potentially using your technology to even the playing field between corporate sense making and this kind of Home Brewed sense making that seems to me to be of an infinitely superior level? Hmm, well, not infinitely but quite superior.

Vitalik Buterin 1:17:19
Yeah. So I think like once again, there’s kind of two aspects to kind of blockchain that I think are equally valuable here. One is the technology itself and then the other is the existing community around the technology and mean with the tech with the technology itself. I mean, you can try to like create institutions for you even things like funding like podcasts, for example. And then like even like things like the kind of get going grants quadratic voting, for example, it would be potentially a great way to kind of funds media organizations. avoids the pitfalls of both, say, present day media which is funded by some combination of advert of like advertising and like horrible clickbait incentives. And at the same time, avoid the pitfalls of like, basically sent essentially controlled media and then create a third alternative. So and like it doesn’t even have to be quadratic voting, it could be some other kind of mechanism for funding and blockchains could be used as a base layer for that. There’s also the blockchain community as a group of people who care about the many of these kinds of ideas and I mean even a lot of a theory and people are definitely and swayed star Codex adjacent. And I feel like I’ve tried my best to kind of bring these worlds together and get them to talk to each other. In lien, sometimes it is a challenge because there’s ways in which they’re similar and there’s a lot of things People who are in both and there’s also ways in which they’re sometimes different. But those, those differences can be a good thing.

Eric Weinstein 1:19:09
Yeah, I guess I’m concerned that in our we’re coming up on an election in the US. And I view fox news in the New York Times, and CNN is like watching professional wrestling. It’s got a very clear narrative structure before the facts even come in.

Vitalik Buterin 1:19:29
Yeah, this is this is actually one of the things I’ve only really started noticing, maybe in the last like, one to two years. Like it’s narratives are something that like, don’t seem like you’re there when you’re fully inside of them. But once you kind of step outside, and you start seeing that, like, wait, these people are missing something, and they’re making predictions that turn out to be materially incorrect. Like, there’s no memory like there’s no cost and yeah, yeah, you You want to there’s no accountability at all, then it’s something that you just actively start thinking, seeking out how to move beyond. Yeah, you know, I think figuring out a better funding model for media organizations in general.

Eric Weinstein 1:20:19
Because in some ways, what I’m concerned about is that something like podcasting is almost a public good. And so

Vitalik Buterin 1:20:27
totally a public good.

Eric Weinstein 1:20:28
But advertising is the one thing that I keep, I call it the business model of last resort. Yes. And we are going with an ad supported model, because I don’t want to disguise we were somebody who offered to endow the podcast, not not my employer. And I decided against it because I think what I really want to do is to try to figure out how to improve the business model. We’ve talked about a couple different variations on on advertising in order To make sure that controversial but very sensible and level headed people can weather the storm that the big problem that I keep seeing is that advertisers pull when there’s a coordinated campaign to say, drop that program or else Yes. And there’s a need for something like the blockchain or a smart contract to make sure that you can’t silence people who are speaking decently, just because they’ve pissed off a very large activist community. Right. So, do you see any way in which the blockchain for example, like I might give up advertising, if I could figure out a way to fund not only this program, but allied programs?

Vitalik Buterin 1:21:46
So in 2011, when I was starting Bitcoin magazine, I yeah. Well, it started off with like this one anonymous person whose name I’ll never know who will aside from T by his internet handle Who was just paying me five Bitcoin, which back then was $4 per article to write articles for him. And I mean, this was five times lower than the minimum wage, but I loved it because it was the higher highest wage I’ve ever had. And eventually, despite paying me five times less than minimum wage, I Kiba ran out of money. And like he’s told me, hey, maybe Bitcoin week, we will have to shut down. And I came up with, with this business model that actually ended up saving it for a few months, and basically saving it all the way until I got rid of poached by Bitcoin magazine. And the business model is basically, I write two articles a week, and we’ll publish the first paragraph of each article, kind of publicly, and we’ll say the rest of these articles is kind of hidden for ransom. And here are some Bitcoin addresses. And if people can collectively come together and pay 2.5 BTC to these Bitcoin addresses for everybody. Yes, then it’s nice. Yeah, and it out. We worked well and it actually started raking in like much more money than Akiba had paid before. So it’s not saying like that precise model is gonna save.

Eric Weinstein 1:23:10
It’s a clever, it’s a clever exploit. Yeah,

Vitalik Buterin 1:23:12
exactly. And like to me, more clever experiments as like what smart contracts are all about. So like, let’s try lots of different things. And we’re gonna have come upon

some steps forward that are interesting

Eric Weinstein 1:23:28
to tell you. I’d love to have you come back and talk to us about other things that other points but let me just close by asking you a couple of questions about the mysterious origins of decentralized computing the blockchain and all of this stuff. Sure. What the hell? Why don’t we know who Satoshi is at this point, where Satoshi seemingly came up with the first really viable version of this this idea. We can prove that Yeah, I guess those those blocks have never transacted that, that are under satoshis control one would think. Yeah, and that’s a very mysterious origin story.

Vitalik Buterin 1:24:12
Yeah. It surprises a lot of people.

Eric Weinstein 1:24:16
Does it surprise you?

Vitalik Buterin 1:24:18
It does. I mean, it’s like there’s definitely not many people that have managed to stay anonymous kind of through that level of prominence. Like even like silk road does kind of first big round of crypto anarchist outlaw project on top of Bitcoin like after about two years Ross Albert’s card. And then the tools for just continuing to look at things that you say until eventually you slip up and you use some word word patterns that match like word patterns that you used under your name, and then you correlate things like it’s difficult to get around. Like I’ve

Eric Weinstein 1:24:57
unabomber got away with this for a long time. The Yeah, you know, but the Citizens Committee to investigate the FBI that pulled off this amazing heist in 1971.

Vitalik Buterin 1:25:07
So then Ted wrote his stuff in the 1970s. Right. And that’s also 19. Seven, you know, saying, now we have, we have the internet and everyone’s stuff is on a law as publicly available. We have machine learning, we have statistical tools.

Eric Weinstein 1:25:23
Do you think it’s well known who Satoshi is within a group that doesn’t want to talk? No.

Vitalik Buterin 1:25:27
So I am I think the I mean, there’s high uncertainty about this, but I think that it’s zero urea likely that they said she is one person,

Eric Weinstein 1:25:42
you think he is one person.

Vitalik Buterin 1:25:44
Yeah. And then there isn’t some, like a theory grants conspiracy theory. I think you know, Satoshi,

Eric Weinstein 1:25:52
not that. You know, who Satoshi is.

Vitalik Buterin 1:25:55
But do you think I think it’s someone I know personally Yeah.

So If I had to pick one person and the and I’m not asking

Eric Weinstein 1:26:05
you to out that, well, you can say

Vitalik Buterin 1:26:07
yeah, and I will say it. It’s like, it’s not an uncommon opinion. I know if I if I had to, like bet my life on one person who could help me, basically because and how was around in the early days, he clearly understood what was going on here. Clearly participated since the beginning. And he also died at the exact time basically, that’s it, he disappeared. And so there’s a lot of these kind of coincidences in his favor, but then he’s the one person I bet on if I had to bet on someone, but I’d also bet against him like it’s well under 50%. So it’s a pretty good caper. Yeah. And there’s, there’s definitely a significant chance that it’s like someone who’s still in the in the crypto space somewhere that I’ve met at some point. Or it could just be someone we have never met and never will. Hmm he he’s done a really Like a job, like, even just kind of setting himself up as this kind of perfect role or she are they? Yes, yes. No. Yeah, she is. She you really like, impressed a lot of people.

Eric Weinstein 1:27:17
It’s pretty true. I find it very inspiring. One of the great intellectual feats of our time, would have anonymous authorship. And the only story I know that’s comparable to that is this bizarre breaking story where the there was a woman I believe, named Judy fine gold, who was determined to take the secret to the grave, and the other people in the conspiracy, left the conspiracy after the statute of limitations had run out and they started talking and then her perspective, as we all agreed, we were never going to mention who did it. There’s some desire usually, to get caught in an urge to purge.

Vitalik Buterin 1:27:57
Yeah, well, that does Make it more likely there’s one person right conspiracies get exponentially harder, the more people you add. That’s true.

Eric Weinstein 1:28:08
It’s been fantastic having you here, I want to let you know that you’re welcome to come back and to talk about things that are unrelated to aetherium and blockchain and crypto, because I actually, I have to say I found very inspiring your attempt to use this platform to rethink what can economics be repurposed to do and I think that that’s an unheralded potential killer app for your your program.

Vitalik Buterin 1:28:33
Thank you. It’s, it’s, it’s been good to be on here.

Eric Weinstein 1:28:36
Okay, you’ve been through the portal with vitalik butyrin. Thanks for joining us. Please remember to subscribe wherever you listen to podcasts and to check out our YouTube channel. And to subscribe there and click the bell for more episodes when they become available. Thanks for joining us.