(upbeat chime music)
- Hey everyone, Bill Barhydt here.
Welcome to another edition of Crypto Bites,
I'm really excited about this one.
We've got a really special guest with us,
who we'll come to in a second.
And it's been a fantastic year for Abra,
thank you so much to the community who supported us.
We've got hundreds of thousands of users now,
our community is growing every day.
We just had our best month ever at Abra.
We launched our Index Token, which has gotten huge adoption,
the BIT10, several weeks ago.
We launched EOS a couple of weeks ago,
native support for EOS inside the Abra app,
so hopefully you all can go, the EOS community, and use Abra
to make your EOS investments.
And I'm super excited that we just launched
native ether support for the first time in Abra,
so instead of just investing in ether,
you can actually do deposits and withdrawals
using Abra as your core ether Ethereum wallet.
We think that this really sets the stage for Abra
to go deep within the Ethereum community,
and you'll see lots more announcements about our support
for Ethereum-based contracts in the future,
so I'm really excited about that.
I'm also super excited to have Vitalik Buterin with me,
I guess you call yourself the founder of Ethereum?
- So I'm curious, first of all, thank you so much
for joining us, I know the community's gonna be
super excited about having you join us.
So how did you describe your role
within the Ethereum project or community today?
What is your role?
- So, my role when I started was basically
that I was the one who came up with the initial idea.
I wrote the white paper, I kind of sent it out to people,
brought together the community initially.
Right now, I probably focus the most on,
first of all, on research problems.
So we are...
At some point fairly soon going to release an upgrade
to Ethereum called Serenity, which will include
the Proof of Stake consensus algorithm,
so this is a much more efficient form of consensus
than the existing Proof of Work chain.
- Yeah, we'll come back to that.
- Together with sharding, which is this very large,
maybe 1,000 (mumbles) scalability improvement.
I spend a lot of my time kind of figuring out the details
of that upgrade, kind of figuring out what the protocol
will look like, and things like that.
I also end up participating in different other strands
of research, so things around the cryptography economics,
different Ethereum applications.
I do also just go around the world and kind of...
Talking to different people in the Ethereum community,
and different people in larger and more mainstream circles
that are interested in figuring out how to use Ethereum.
- [Bill] Yeah, are you having fun?
- Yeah, yeah, this year has been great.
- Cool, I wanna talk about that in a minute.
I think just maybe take a step back,
and I think a lot of our traditional investors
inside of Abra don't know a lot about you,
so maybe if you don't mind, just introduce yourself,
where you come from, how you got into this
in the first place, how you went from writing about Bitcoin
to even creating Ethereum.
- Sure, so I was born in Russia in 1994,
six years (mumbles) moved to Canada.
11 years after that, heard about Bitcoin for the first time.
I first heard about it from my dad,
then I saw it again on the internet.
I kind of thought, okay, this is an interesting idea,
maybe I should kind of poke into it more.
I started poking through the Bitcoin forums.
I eventually found the guy who would pay me in Bitcoin
to write articles for a blog that he was working on.
From there, I became the co-founder of Bitcoin Magazine,
which was this kind of website and print application--
- I remember, yeah.
- That was around back during the Bitcoin early days.
Then I spent about two years working on that
and kind of getting deeper and deeper
into the Bitcoin community, and understanding how it works
on a technical level, understanding the social
and economic ideas.
- So you're literally one of the few people
who's probably spent close to half his life
in the cryptocurrency world.
What are you, you're probably like 24?
- Yeah 24, but eight divided by 24 is 1/3,
it's not quite 1/2.
- Wow, but even that is incredible, right?
- I guess.
- Well, for me it is, because when you were born,
I was at Netscape, right?
So the idea that you could even spend 1/3 of your life
specifically, not in cryptography,
because I've been doing that as well since I was 19,
but the idea that you could work on cryptocurrencies
for 1/3 of your life is incredible to me.
What was your first programming language that you learned?
- I remember when I was very young,
I would play around with Excel spreadsheets,
which is kind of a programming language.
- [Bill] Right, right.
- Then when I was a bit older, I would do Logo and C++.
The main thing I would program is programming video games
that I would then play myself until I got bored,
then I would program more.
- Right, cool, very cool.
So let's talk about Bitcoin and the segue to Ethereum.
What attracted you to Bitcoin in the first place?
- It just seemed like something that gathered together
all of the interests that I already have
at the same time in one package.
There was the math and computer science,
the programming, the cryptography.
The community back then was very interested in talking
about different political and social ideas,
and libertarianism was very strong,
but then there were socialist and mutualist whatevers,
and all of these different fun little tribes.
There was even the sort of politics and society section
of the Bitcoin talk forum where people would just debate
these ideas with each other.
- So Bitcoin kind of had that, it had this kind of...
Community with different ideas,
and a technology that actually could
actually have a big impact on the world.
It had the open-source software aspects to it,
it had very interesting cryptography.
It seemed like almost a perfect storm
for myself to get interested in.
- Fantastic, and you had this idea that Bitcoin needed
more of a Turing complete scripting component to it,
and that led to the idea for Ethereum?
Is that a fair statement?
- So what actually happened was that back
in maybe October 2013, I spent some time working
on projects like colored coins and Mastercoin,
so these were the existing Layer 2s
that were trying to kind of extend Bitcoin
with more advanced functionality,
and at one point I realized that, hey, you could replace
these five features with one other feature
by just basically having a programming language
instead of these five specific different transaction types.
And it kind of came over time.
The first thing I did was I made a proposal to Mastercoin
that would replace basically five of the transaction types
they have with a programming language designed to express
financial contracts between two parties.
So you could do binary options,
contracts for different bets--
- Pretty much anything in that category
with one single type of thing.
- Let's take a step back for a second.
What was the attraction to you for this idea
of having contracts, executable contracts at all,
inside of a cryptocurrency-based model?
- Initially for me it was like, hey,
they're doing this thing, they're trying to make it possible
to do more stuff, that seems cool,
but I know how to do more, how to make it possible
to do more stuff with a protocol which is ten times simpler,
which is instead of basically having a Swiss Army knife
with 100 different types of features,
you would just have a programming language,
so then you could kind of build whatever you want on top.
- Did you have a vision where you said, oh my god,
the world needs this type of contract?
Or was it more for you a holistic problem?
- It kind of came over time, I started
with these two-party financial contracts,
then I kind of kept on mulling the idea over,
and at one point I sent it to the Mastercoin people,
and they said, yeah, that sounds cool,
but maybe we'll get to it in a year on our own map.
And I was like, wait, a year?
But don't you see this is literally
the most important thing out there?
I basically just decided to start working on it myself.
So free of the constraints of having to...
Iterate an existing system, I kept on thinking,
and eventually, it took me a couple of weeks to figure out
how to expand the model from just two-party contracts
to these computer programs that talk to each other
and can do pretty much whatever they want,
but once I made that one kind of leap,
suddenly everything made sense,
that you could just do everything with contracts.
- Yep, yep, okay so now let's talk about that.
So we have a lot of non-technical users of the Abra app,
people who are watching this who hold Ethereum,
but don't really understand the deep difference
between ether and Bitcoin.
So can you explain in kind of non-technical terms
to the layman, what is the difference
between Bitcoin and ether?
- Sure, so Bitcoin is kind of a special purpose blockchain.
It's good at basically the one thing that it does,
which is storing and processing
the transfer of Bitcoin balances.
Ethereum is a much more general purpose platform,
so Ethereum contains a built-in cryptocurrency called ETH
which you can use as a currency,
but then it also has these smart contracts
which you can use to implement a much broader variety
of other kinds of blockchain applications,
which could include financial contracts,
it could include decentralized domain name systems,
it could include identity systems
or reputation and so forth,
and then there's this big long list of blockchain stuff
that people get excited about,
and basically any of it is doable on Ethereum.
- And how much of that, of what you just said,
was the original vision, versus how much of that
has kind of evolved over the last five years?
- I would say a lot...
When I figured out how to move from just two-party contracts
to this broader model of contracts that can do anything,
it became very clear that this was a much more general tool
than we realized we could do.
And at that point, other people in the community
started coming up with more and more applications,
like there was some people thinking up
a decentralized file storage, there were...
People thinking up of different ways
that they could make their own tokens.
I came up with some ideas around how to do things
like decentralized oracles and so forth,
and other people took those ideas
and started running with them.
Part of that is where Augur came from for example.
- [Bill] Right, prediction market.
- Yeah, well prediction markets are this other idea
that just totally came from the outside,
but the platform is general purpose,
so even though I've never heard of prediction markets
when the platform was designed for the first time,
you could still do them
- [Bill] That's super cool.
I wanna talk about some of the applications
that you were alluding to in just a second,
but what's the craziest application of Ethereum
that you've come across lately?
Like, I can't even believe that somebody came up with this.
Is there something that comes to mind?
I am definitely impressed by MakerDAO.
What MakerDAO basically is, is it's a smart contract system
that issues a currency which is pegged in value
to the dollar, but it's not dependent at all
on any outside banking systems or anything like that.
Basically there is an even larger pool of ETH
that the contract maintains, and the contract
basically maintains this kind of peg where...
It has this data feed that feeds in the price
of ETH to U.S. dollars from the outside,
and depending on what that price is,
that's the amount of ETH that you can recover from one DAI.
What that basically means is that you get
this cryptocurrency which is a sort of pure cryptocurrency
in the sense that it doesn't depend
on centralized infrastructure, but it has a stable value.
Theoretically you could extend this kind of model
to not just U.S. dollars, like you could have exposure
to arbitrary assets, you could have exposure to CPIs,
you could have exposure to real estate indices,
But the interesting thing about it,
the idea is something we knew about for a couple of years,
but they actually did it, and it actually works,
and it's worked for almost a year.
It's gonna be a year in maybe even a week or so.
The price has just actually stayed
at a dollar all the way through.
- That's awesome, and actually there's a lot of similarities
between what MakerDAO is doing and the Abra platform
using Bitcoin, because we basically use
multi-sig Bitcoin contracts to create our stable assets,
the dollar, even the ETH up until now,
was this stable asset model using Bitcoin,
although now it's a native ether wallet of course.
So let's talk about some of those applications.
Obviously, this has been a crazy year
from kind of a venture capital,
ICO perspective, right?
So I'm curious, what is your perspective
on what's happened in the past year
in this crazy ERC-20 market, and is it...
Is that a viable, interesting application of Ethereum
going forward, or do you think
that that's kind of going to die?
- I think there's definitely going to be even more ERC-20s
to keep on getting issued in the future.
I do think that the age of multi-hundred-million-dollar ICOs
has passed, at least for quite some time,
and honestly, I'm very relieved about that.
There's definitely a lot of different use cases
for issuing tokens, like one, you could use them
to represent assets, so if things
like these different stablecoin projects,
you could use them for assets inside of video games,
you could use ERC-721s, Non-Fungible Tokens,
to represent digital collectibles,
you could use ERC-20s to represent tokens
which have value inside of some applications.
I do think that the AppCoin thing has been over-hyped
and over-used, but there definitely are some areas
where I think it's totally legit.
- So we'll come back to the 721,
the collectible model in a second,
I think that's a really interesting topic as well.
On the ERC-20 topic, what do you think about
just traditional securities enabled via the ERC-20 model,
not just issuing new tokens to fund a company,
but taking existing stocks, and making them available
via ERC-20, is that something that you foresee happening
en masse in the future?
- Yeah, I think that's a totally cool idea.
- Are there startups that you're aware of
that are actually trying to do that now?
- For stocks, I don't know.
The challenge is that you want these stocks
to be issued natively, like you actually want
the record on the Ethereum blockchain
to be the authoritative thing that tells the court
who actually has the legal rights,
and that involves legal engineering more than anything else.
I know there was this company based in Singapore
called Autonomous that was trying
to do company share management on Ethereum,
and part of the long-term vision for that would be
that you could just have stocks
that get traded on the blockchain,
but then that particular company shut down.
- When you think about mainstream adoption
of decentralized applications, or any application
that takes advantage of Ethereum,
what do you think it's gonna take
for true mainstream adoption by the average consumer,
or institutional investor, are they gonna know
that they're using Ethereum?
Is it gonna be relegated to the background?
And how much of that is dependent upon
your development platform community,
versus the actual app developers?
- I would say in some cases yes, in some cases no.
There's definitely ways that applications
can benefit from Ethereum without exposing the user
to any blockchain bits, but then
there are also other benefits that you really can only get
by making the blockchain parts closer to the user side.
As far as the big problems, my top three at this point
are probably scalability, privacy, and usability.
So scalability, Ethereum blockchain right now
can process 15 transactions a second,
really we need like 100,000.
- [Bill] Yeah.
- Privacy, every single thing you do right now
is totally public to everyone, and that doesn't do
for a whole bunch of use cases,
so this is part of why we're working on
some fancy cryptographic technology, like zkSNARKs,
to try to solve that.
Usability is a super big challenge.
A lot of blockchain applications are just very poor
on the usability side, they have a lot of hiccups,
and like, oh why'd this suddenly just totally not work,
why did this take 10 minutes longer than I expected.
The other big challenge that I care about
is usability of security, so coming up with
easy-to-use ways for people to store their private keys
that don't become vulnerable to someone losing everything
because they either lost their private key,
or their private key got stolen.
And there are some interesting solutions
that are coming out to that, but it'll still take
a couple of years for all of these different strands
to get somewhere.
- Yeah, we struggle with the last one a lot.
We force our users to actually write down
their back-up phrase to recreate the wallets.
And we have obviously near 100% compliance with that
because we don't give the user a choice,
but it is not a fun, friendly process for our users.
So let's kinda work backwards
on what you were talking about earlier.
Actually let's start from the top,
so you mentioned scalability, that it's gonna take
probably 100,000 transactions a second
at some point to really make Ethereum useful.
Where are we now in terms of getting
from 15 transactions a second
to 100,000 transactions a second in the Ethereum network?
- There's kind of two major kinds of strategies
that we're working on for scalability.
One is Layer 1 scaling, and the other is Layer 2 scaling.
So Layer 1 scaling basically means
improving the blockchain protocol itself
to allow it to process a much larger set of transactions.
And the main bottleneck with blockchains right now
is basically every user has to download the whole blockchain
which basically means the blockchain can't hold
more transactions than one guy's computer can store.
Our solution to this, called sharding,
basically means that you split up the different transactions
to randomly selected different groups of computers.
This basically means that the blockchain can process
way more things than one single computer can hold.
That could increase scalability
by maybe a factor of 1,000 or so,
but potentially even more much later down the road.
The other kind of scaling that we are working on
is Layer 2 scaling, which basically means
designing applications in such a way
that not every thing that happens
actually goes on the blockchain.
So basically instead of going to the blockchain
every single time any user does anything,
you perform most of your operations off-chain,
using just cryptographically signed messages,
and you only need to put data onto the chain
when there actually is some kind of dispute.
So there's two major classes of systems
that we're working on in this regard.
One is called estate channels,
and there's a bunch of teams working on this.
There's a team called L4 in Toronto
that's done some really good work.
And another (mumbles) project is Plasma.
And there's a lot of work that's been done on that,
OmiseGO is this decentralized exchange
that's building on Plasma.
There's the matter dot net, there's more and more
of these projects, and there's...
One of our researchers, Karl Floersch,
has been working on an implementation
of a reasonably complete Plasma Prime specification,
which is the latest version of Plasma
which has some really cool features in terms of
increasing scalability and reducing the amount
of data you have to store.
- So a question on the on-chain scaling.
So the Bitcoin Core world, for example, beyond SegWit,
has really relegated scaling to Layer 2,
which means off-chain scaling.
You obviously have a very different approach for Ethereum.
Do you think that the approach
that the Bitcoin Core community is taking
makes sense for Bitcoin?
Or should they have the same perspective
as the Ethereum project, in your opinion?
- If Bitcoin wishes to just be a store of value,
then realistically it's probably fine,
though I think they should switch to Proof of Stake.
If they want to actually be a currency
that people use for transactions,
then I do think base what you're scaling
and also kind of speeding up the blockchain,
reducing block times at the base layer,
is also something which is very important.
There are serious limits to what you can do at Layer 2.
There's limits to usability of Layer 2,
and there's a tax on Layer 2,
and also the other thing to keep in mind
is that the scalability of gains from Layer 1 enhancements
and using Layer 2 are multiplicative,
so if Layer 1 can be made to be 1,000 times more scalable,
that's also 1,000 times increase in the amount
of transactions per second that you can push
to a Layer 2 thing safely.
- But I also think that there are legal implications
with Layer 2, because you get into money service business,
and e-money regulation there, that I think a lot
of the developers who don't come from the legal world
don't fully understand.
- Yeah, absolutely.
One of the benefits of Layer 1 things in general
is that they literally do not depend on operators,
they don't depend on infrastructure,
they just work directly on-chain.
And that basically, first of all, reduces legal risk
for a lot of people, because you just need
much fewer entities, and possibly no entities
that even can be classified as operators.
Also, even in the absence of legal issues,
it makes the whole thing more robust,
because you don't have to wait for these operators
to start existing, to count on them to exist,
to count on them to not coalesce into one single one
because of network effects, and then charge
monopolistic transaction fees, and all of these issues.
- So let's segue now into the privacy issues you mentioned.
How do you think...
How do you personally think about privacy requirements
for smart contracts and the Ethereum model,
and are there legal implications of your perspective
that need to be taken into account,
or is it all about doing the right thing for the protocol,
and the legal stuff will work itself out over time?
- So first of all, I think it's important
to keep in mind that in the Ethereum context,
Ethereum is a general purpose Turing complete blockchain,
and so what that means is that any...
Of these privacy-preserving protocols
just can't be done at Layer 2.
So we as designers of Layer 1 don't technically even need
to do anything for it to make it possible
for these Layer 2 zero-knowledge payment protocols
to actually work.
In some sense, what that means is that
as long as there's people who care about privacy
anywhere in the ecosystem and keep pushing it forward,
it will happen.
And it also means that at Layer 1,
we don't really need to make choices of,
do we like ring signatures, or zero-knowledge proofs,
or confidential transactions, or Rabin signatures,
or whatever fancy cryptographic buzzword of the week.
- And we can just have a programming language,
and other people can experiment with all of the designs.
From a legal point of view,
I know there definitely are regulators
in different places that are more concerned
about the kind of zero-knowledge coins
than about tokens where all of the transfers
are put onto the blockchain in plain text.
It is something that...
The kind of possibility of these technologies
is something that just is going to happen
over the next couple of years,
and I do expect that for some classes of tokens,
especially the classes of tokens
that are closer to having more dependence
on kind of traditional institutions,
so this would be security tokens,
like asset-backed stablecoins and so forth.
Regulators may end up demanding
that they set up their privacy in some way
that allows the regulators to see different parts
of transactions, and that's also something
that's kind of inevitable.
- But this idea that...
In the Bitcoin world this is a problem as well, right?
We talk about fungibility of a token,
meaning that if I have unspent output for Bitcoin,
or for ETH, that basically traces back six steps
to a public address that belonged to a drug dealer
that was arrested, that somehow I am culpable
in those transactions, because I'm still using that token.
Which by the way, is a problem with paper money,
because if you look at the average paper money,
it's got traces of all kinds of drugs on it.
It's actually disgusting, right?
So is it the protocol developers,
or is it the Ethereum project's responsibility
to deal with that fungibility issue,
so that becomes a non-issue?
- I feel like our design philosophy
for the Ethereum protocol is Layer 1 must be strong,
but Layer 2 is ultimately the more innovative,
and so we don't need to explicitly make
all ether transfers privacy-preserving or whatever
at Layer 1, and that honestly can't even work,
because Ethereum contracts need to use ETH,
and Ethereum contracts can't even hold secret keys,
so there's no way to make that kind of privacy-preserving
and what does that even mean?
So the thing that you can do of course
is all of this different Layer 2 innovation.
I know in general, like in common law,
there is this kind of legal principle
that fungibility of currency is sort of enshrined
into law, because for normal assets, like for example
there's this nemo dat quod non habet principle,
which is basically if you steal a bike,
and then you sell me a bike, and then I give the bike
to Carl, then the original owner can totally just go
to Carl and say hey, that's still my bike,
give it back to me, even though Carl himself
technically did nothing wrong.
But with currency, that's kind of explicitly overwritten
in the law, so it's explicitly designed
to treat every $10-bill as being identical
to every other $10-bill.
In the case of cryptocurrency...
I don't think there has been a very specific case
about this, but I know they are classifying it
as property, which does mean there's some risk
that they'll try to treat specific tokens differently
depending on where they seem to come from.
Privacy preservation is definitely one way
to make it less feasible to do things like that,
which I think is definitely a gain for the usability
of the platform as a whole.
- So that's an interesting segue
into this idea of governance, right?
I mean last year, we went through this whole SegWit2x debate
in the Bitcoin world, and obviously you guys
went through the Proof of Stake and Plasma debates as well
in the Ethereum world, how do you think about governance?
First of all, what does the word governance mean to you,
and how do you think it should apply
to decentralized protocol like Ethereum?
- So blockchains are interesting,
because they are this fundamentally new class of thing,
whether an organism, meme, whatever word you wanna use,
they're kind of like corporations,
but also not quite like corporations.
They're kind of like countries,
they're also not quite like countries.
They're kind of like open-source projects,
but not quite like them.
They're kind of like religions, but not quite like them.
They combine elements of all these things,
and add some new ideas and elements of their own.
The kind of properties that matter I think with blockchains
are that they have this property of open-source software
that ultimately the value of the thing
is entirely what people assign to it.
At the end of the day, if you want, you can fork.
But compared to open-source software,
I think there are also stronger disincentives
against forking, and if forking is infinitely difficult,
then you get back to the governance
of things like corporations, right?
I think blockchains are sort of in the middle
between those two.
I view governance as a coordination process.
So the idea is basically that all of the users
in a blockchain ecosystem are playing this game
where they keep on deciding every day
basically what software they're running.
So am I running Geth, am I running Parity,
am I running Bitcoin ABC, am I running Bitcoin SV,
something else, and...
The one property that this game has
is that you benefit from making the same move
as many other people are making.
If I run a version of the Ethereum client
that issues an extra 20 million units of ether to me,
it might seem like a benefit 'cause I get 20 million ether,
but I lose because really nobody else values that ether,
and I am just going to get forked off
of everyone else's chain.
Because governance is this game where everyone benefits
from making moves in concert,
there's a huge number of different equilibria
that can arise inside of this game.
You could have the equilibrium where
everyone runs the same software forever,
you could have the equilibrium where
everyone runs the software that I tell them to run,
and I say something on Twitter that points to a new version,
and that's the version everyone downloads,
you could imagine an equilibrium where
there's some group of core developers,
you could imagine miners having a hash-war to vote.
Each of these equilibria are sticky, right?
Once the system falls into one of these equilibrium,
you will have the expectation that it is this way,
then every single individual has an incentive
to act in that way, because they benefit
from being in the same universe as everyone else.
- So ideally, I guess what you're saying to some degree
is you're aligning incentives
if you do governance correctly in the Ethereum world?
- Basically, governance is this...
It is the question of what specific equilibrium
should we be in right now,
and within one of these equilibria,
if you want to cause some change to happen,
or prevent some change to happening,
then how do you do that?
- So let's talk about governance and decentralization.
So to me, the litmus test to have a decentralized protocol
on the internet is probably two things in my mind.
Maybe you agree or disagree.
One is, is there a central off-switch.
And two, can I stop the developers
from actually contributing to this decentralized thing
that has no central off-switch.
So I think about BitTorrent as the first project
that passed the litmus test for me,
where you couldn't really stop either.
The governments tried, right?
Do you think that we've achieved that
with Bitcoin and Ethereum,
where there's no central off-switch
that would allow you to really shut it off,
and that you couldn't really stop the developers
from contributing if governments didn't like
what they were doing?
- Yeah, actually I'm not worried about the blockchain
being shut off from a development side,
because first of all, there's lots of people running nodes,
and even if the developers all go poof in a puff of smoke,
then people can just keep running
the same client version forever.
- [Bill] Sure, but with the bugs that they had before.
- Yes, and then if bugs come up,
there could be new developers that would pop in,
and it would take longer to fix,
but it would still get fixed.
Second, in Ethereum we've taken really great care
to ensure that there are multiple implementations
of the protocol that people actively use,
so in Ethereum 1.0, we have Geth, the go version,
and Parity, which is this independently developed
version in Rust.
And there are others, but people use them less,
but people could start using them more.
For Serenity, so this is the upgrade that adds in
Proof of Stake and sharding, that's gone up
to something like eight implementations,
and there's eight different companies
that are working on implementations,
one in Python, one in Rust, one or two in Java,
and a couple of others, one in Nim.
That basically means that even if one development team
goes down, the others can keep going.
I think shutting down is not the only risk
you need to be worried about.
The other risk you need to be worried about is capture.
- Define capture.
- So basically, can a small group of actors
gain enough power inside the decision-making process
to ensure that things go their way,
and especially if their way might not be aligned
with the way that the community
of the blockchain actually wants.
- [Bill] Or a simple attack or something similar.
- Well the exact kind of attack depends
on what your exact mechanism is.
So for example, if you have a community
where the religion is that 51% hash power decides,
then you can just totally break and capture it
by getting 51% of the hash power.
If you have something where some small group
of developers decide, then you can...
Either be one of those developers,
and kind of get a cabal together,
or even just create an ideological orthodoxy
that this is the way to do things,
or you could try to join this group over time,
you could even try to hire them as a company,
or you could try to influence them in a bunch of ways.
- But a 51% attack, at least to the usefulness
of a network for Abra, is almost the same thing
as having an off-switch, because at that point,
the network is no longer useful.
- There's different kinds of 51% attacks.
So for example, you can do a 51% attack
that just makes the blockchain break,
but I can also do a 51% attack
that censors all transactions, except for those transactions
where the transaction fee is at least $100.
And if I do the second one, then that's something
that makes the blockchain still kind of useful,
and maybe people will just keep on paying the $100,
and it'll be super profitable for me.
- [Bill] Right, fascinating.
So are you convinced that we've reached the point
where either a 51% attack, or just some kind
of government collusion to shut off the networks
is just no longer possible?
Specifically for Ethereum.
- I think if governments collude to try
to bring the network down, they could probably do it,
and developers would have to actively fight back
and keep trying to make different network protocols
and so forth, and that's something that would
just kind of keep on happening.
I mean, fight off government attacks
without active developers, I think realistically
we're totally not there yet,
and that'll probably take much longer.
- [Bill] Right, right, right.
Probably another podcast or video session,
fascinating topic, I love that topic.
I think that the libertarian in me wants
a fully decentralized network, but I also realize
that we're getting there in very logical steps
that also have to safeguard the value
of what people are using the network for
in the first place along the way.
So this has been kind of a heavy conversation,
maybe we can close it out by lightening it up a bit.
So I'm curious, do you have hobbies outside of Ethereum?
Do you read a lot?
- Yeah, I definitely do read.
I try reading books during those times
when I'm either traveling or someplace
where I can't be productive on something else.
- [Bill] What do you enjoy reading?
- Right now I'm going through Jane Jacobs's
The Death and Life of Great American Cities.
- [Bill] Yeah, so you just like to stay
with the heavy stuff, huh?
- Yeah, I guess.
I definitely try mixing my entertainment with learning
or keeping up my German, or weird things like that.
The lighter thing I do is probably going on walks.
- You're a hiker?
- Right on.
Well we'll have to pick up this conversation over a hike.
I spend a lot of time in the mountains, so I'd enjoy that.
So look, this has been awesome.
I could talk to you literally all day about this stuff.
But I think we'll stop there.
This has been, like I said, fantastic.
Thank you so much for the time,
and for everything that you do for the community,
and obviously you're representative of a lot
of awesome developers, and we are very grateful
to the entire Ethereum development community
for everything they do.
We're really excited about going deep
within not only supporting ETH,
but the Ethereum platform at Abra.
We didn't really get to dig in too much
on the CFD swap model, we should do another conversation
with that, I think we could probably spend an hour
just talking about financial products,
which I think for a core part of our audience
would be interesting.
So thanks everyone for joining us
this episode of Crypto Bites, this was super fun.
Check out the new e-support in Abra,
you can literally transfer your ETH to the Abra app,
use it to invest in other currencies,
buy other currencies, store your ETH,
and have a great holiday, and we'll talk to you soon.
Take care, everyone.
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