1
00:00:00,000 --> 00:00:02,000
It's definitely going to take that long.

2
00:00:02,000 --> 00:00:04,000
I hope that's enough time.

3
00:00:04,000 --> 00:00:06,000
Okay, I think it's on.

4
00:00:06,000 --> 00:00:07,000
Okay, it says live.

5
00:00:07,000 --> 00:00:08,000
It says live, yes.

6
00:00:08,000 --> 00:00:14,000
So if people didn't hear my complete sentence, you were saying that we could
broadcast for up to eight hours,

7
00:00:14,000 --> 00:00:20,000
and I was saying probably not going to be enough time, but hopefully we'll be able
to get through everything.

8
00:00:20,000 --> 00:00:22,000
Okay, let's tweet it out now.

9
00:00:22,000 --> 00:00:24,000
I mean, I'm sure we've confused everyone.

10
00:00:24,000 --> 00:00:25,000
Yeah.

11
00:00:25,000 --> 00:00:28,000
I'm just going to tweet it right now, but that's okay.

12
00:00:28,000 --> 00:00:30,000
This is so really—this is really dumb.

13
00:00:30,000 --> 00:00:37,000
I mean, if anyone wants to watch live, of course, everything will be preserved
painfully for all eternity.

14
00:00:37,000 --> 00:00:38,000
Yeah.

15
00:00:38,000 --> 00:00:40,000
Which is—

16
00:00:42,000 --> 00:00:43,000
Okay.

17
00:00:45,000 --> 00:00:47,000
Thank you for your time live on YouTube.

18
00:00:47,000 --> 00:00:50,000
Okay, so this will be the most painful intro.

19
00:00:50,000 --> 00:00:55,000
Probably not, honestly, but a pretty painful one by most standards.

20
00:00:55,000 --> 00:00:58,000
But now—okay, very informal, though.

21
00:00:58,000 --> 00:01:00,000
We like low effort.

22
00:01:00,000 --> 00:01:01,000
I like to keep it real.

23
00:01:01,000 --> 00:01:02,000
Yeah.

24
00:01:02,000 --> 00:01:04,000
Keep it very real.

25
00:01:04,000 --> 00:01:13,000
Okay, so if anyone, for some mysterious reason, decides that they really want to
watch this live, they can do that.

26
00:01:13,000 --> 00:01:14,000
So good for them.

27
00:01:14,000 --> 00:01:21,000
So now they're watching live, and I don't know exactly—it's unclear to me how I
manage the chat and talk to you at the same time,

28
00:01:21,000 --> 00:01:22,000
so I think I just won't do that.

29
00:01:22,000 --> 00:01:29,000
Okay, I'm going to retweet your link there.

30
00:01:29,000 --> 00:01:31,000
Okay, great.

31
00:01:31,000 --> 00:01:37,000
So, I mean, probably, if anyone cares at all, some people have already begun talking
in the chat.

32
00:01:37,000 --> 00:01:46,000
Okay, so for those of you who don't know anything, we just—neither of us have used
YouTube Live before ever.

33
00:01:47,000 --> 00:01:53,000
Like, none of us have been the admin, and Dan Krawitz just found out that he
can't—he was going to be the admin,

34
00:01:53,000 --> 00:02:01,000
but he found out that he can't for an obscure parochial reason that none of us know
anything about.

35
00:02:01,000 --> 00:02:03,000
But that's the setup.

36
00:02:03,000 --> 00:02:06,000
So here we are.

37
00:02:06,000 --> 00:02:08,000
We're definitely going to have to put a thing in, like, the description that says,

38
00:02:08,000 --> 00:02:16,000
actual thing begins, like, at time code, three minutes and 40 seconds or something.

39
00:02:16,000 --> 00:02:18,000
Sure.

40
00:02:18,000 --> 00:02:33,000
So, well, why don't you start by telling me about who you are and Drivechain and
Hivemind?

41
00:02:33,000 --> 00:02:34,000
Okay, great.

42
00:02:34,000 --> 00:02:36,000
Let me give you some context.

43
00:02:36,000 --> 00:02:43,000
Like, basically, you are someone who I think says intelligent things on Twitter.

44
00:02:43,000 --> 00:02:51,000
And that is basically—oh, and I read an article you wrote about prediction markets.

45
00:02:51,000 --> 00:02:55,000
So that's basically what I know about you.

46
00:02:55,000 --> 00:02:57,000
Okay, that's pretty good.

47
00:02:57,000 --> 00:03:03,000
Well, you know, I try—you know, Twitter, it's hard because so much social media is
useless,

48
00:03:03,000 --> 00:03:05,000
but Twitter is, like, the least useless.

49
00:03:05,000 --> 00:03:07,000
So I've been hanging out there.

50
00:03:07,000 --> 00:03:10,000
But, yeah, so I have this long background.

51
00:03:10,000 --> 00:03:16,000
I mean, in an alternate universe, I'm probably getting, like, an economics Ph.D.
somewhere

52
00:03:16,000 --> 00:03:19,000
and not messing around with this.

53
00:03:19,000 --> 00:03:24,000
But what bothers me is that there's a lot of stuff that you can't really fix in the
real world

54
00:03:24,000 --> 00:03:28,000
unless you go through this very disruptive software world.

55
00:03:28,000 --> 00:03:33,000
So I was working at Yale as, like, sort of a pre-doc job.

56
00:03:33,000 --> 00:03:39,000
And then I've always loved prediction markets my entire life, and I've always
thought they're really, really important.

57
00:03:39,000 --> 00:03:41,000
And so I designed this—I love Bitcoin.

58
00:03:41,000 --> 00:03:44,000
I got into it in about 2012.

59
00:03:44,000 --> 00:03:52,000
And I designed this new thing for doing—for solving the Oracle problem for Bitcoin.

60
00:03:52,000 --> 00:03:58,000
So in other words, like, there's this outside information in the world that we need
to get into the blockchain somehow.

61
00:03:58,000 --> 00:04:00,000
It has to be right.

62
00:04:00,000 --> 00:04:02,000
And so I tried to tackle that problem.

63
00:04:02,000 --> 00:04:08,000
And when I'd done that, I had ended up creating—this was, like, December 2013.

64
00:04:08,000 --> 00:04:12,000
I'd ended up creating what I called Truthcoin at the time, which is now HiveMine.

65
00:04:12,000 --> 00:04:19,000
And that unfortunately put me on kind of a collision course with, like, NXT,
BitShares, Counterparty,

66
00:04:19,000 --> 00:04:23,000
these other things that were getting going at the time in 2014.

67
00:04:23,000 --> 00:04:31,000
So I kind of—I took it upon myself to try to explain, you know, the Bitcoin 2.0
space on my blog

68
00:04:31,000 --> 00:04:36,000
because I thought that I had done it really right and everyone else had not done it
right at all.

69
00:04:36,000 --> 00:04:44,000
And now my quest to bring prediction markets to Bitcoin has just intersected with
everyone else in the Bitcoin community

70
00:04:44,000 --> 00:04:47,000
because it's so intertwined.

71
00:04:47,000 --> 00:04:51,000
There's a lot of—there's a lot to say about that, like, the consensus nature of
Bitcoin.

72
00:04:51,000 --> 00:04:57,000
But so my project wanted to be a sidechain, and now I'm working on sidechains
because no one else was,

73
00:04:57,000 --> 00:04:59,000
which is itself a long story.

74
00:04:59,000 --> 00:05:03,000
But that's kind of the short version of it.

75
00:05:03,000 --> 00:05:04,000
I'm not sure—

76
00:05:04,000 --> 00:05:05,000
Okay, wait.

77
00:05:05,000 --> 00:05:09,000
You just triggered my PTSD when you said Bitcoin 2.0

78
00:05:09,000 --> 00:05:18,000
because I have really terrible memories of having just the worst discussions
surrounding that term

79
00:05:18,000 --> 00:05:23,000
because I had almost forgotten that term existed.

80
00:05:23,000 --> 00:05:26,000
Yeah, and I'm sorry for bringing it back.

81
00:05:26,000 --> 00:05:34,000
I've only been back to that state of dreary oblivion on that particular issue.

82
00:05:34,000 --> 00:05:37,000
But, see, you and me both, though, because that was my problem was, like,

83
00:05:37,000 --> 00:05:41,000
I put all this work into something that I thought would actually do something
useful,

84
00:05:41,000 --> 00:05:46,000
whereas everyone else just kind of made up a bunch of nonsense.

85
00:05:46,000 --> 00:05:49,000
That is exactly what happened.

86
00:05:49,000 --> 00:05:50,000
Oh, my God.

87
00:05:50,000 --> 00:05:54,000
I just remember, like, oh, they were just all so terrible.

88
00:05:54,000 --> 00:05:57,000
There was, like, MasterCoin and, like—

89
00:05:57,000 --> 00:05:59,000
It was awful.

90
00:05:59,000 --> 00:06:01,000
Yeah, and so I was, like—

91
00:06:01,000 --> 00:06:07,000
Now I'm doomed because I was, like, in this category of, like, almost entirely
devoid of any merit.

92
00:06:07,000 --> 00:06:11,000
And I was, like, trying to say things like, well, this is a very ambitious project.

93
00:06:11,000 --> 00:06:12,000
It might work.

94
00:06:12,000 --> 00:06:13,000
It might not.

95
00:06:13,000 --> 00:06:19,000
But it was really unfair to me because I'm trying to, like, hedge or, say, make,
like, guarded statements.

96
00:06:19,000 --> 00:06:24,000
But in context, I mean, like, what I really could have said in context was that,
like,

97
00:06:24,000 --> 00:06:28,000
this is much better than this giant pile of nonsense.

98
00:06:28,000 --> 00:06:29,000
But it was, like—

99
00:06:29,000 --> 00:06:31,000
So I was in a very annoying—

100
00:06:31,000 --> 00:06:36,000
I was kind of gutted from both ends, right, where it was clearly way more risky than
Bitcoin

101
00:06:36,000 --> 00:06:38,000
and, like, much more kind of fringe.

102
00:06:38,000 --> 00:06:41,000
And that was something that I never wanted to deny.

103
00:06:41,000 --> 00:06:45,000
But it was, like, rock solid compared to, you know, like BitShares,

104
00:06:45,000 --> 00:06:48,000
which I thought was, like, the biggest joke possible.

105
00:06:48,000 --> 00:06:50,000
And I could never understand why anyone would say that.

106
00:06:50,000 --> 00:06:51,000
Oh, my God.

107
00:06:52,000 --> 00:06:58,000
When I first heard about BitShares, this was sort of before I had reached the point

108
00:06:58,000 --> 00:07:02,000
where I just assumed everything was a scam just to start off.

109
00:07:02,000 --> 00:07:04,000
And I was, like, wow, that's amazing.

110
00:07:04,000 --> 00:07:06,000
Like, how did they do that?

111
00:07:06,000 --> 00:07:09,000
And then I looked at it, and I was, like, oh, they just didn't.

112
00:07:09,000 --> 00:07:10,000
They just didn't.

113
00:07:10,000 --> 00:07:11,000
Right, exactly.

114
00:07:11,000 --> 00:07:12,000
Right, exactly, yes.

115
00:07:12,000 --> 00:07:16,000
And so that was annoying for me because one of the things that I did was exactly
what they didn't do,

116
00:07:16,000 --> 00:07:21,000
which is that I had some reason for how this thing would synchronize with reality at
some point.

117
00:07:21,000 --> 00:07:26,000
And it would check in, and it would say, like, and that was, like, a really long,
complicated thing

118
00:07:26,000 --> 00:07:30,000
that was, like, involved, like, you know, lots and lots of thought

119
00:07:30,000 --> 00:07:36,000
and 20 or 25 pages of this giant white paper that was even bigger than that

120
00:07:36,000 --> 00:07:38,000
and, like, all this big stuff that I put a lot of thought into.

121
00:07:38,000 --> 00:07:42,000
And then it was, like, Dan Larimer was just, like, well, it is a prediction market

122
00:07:43,000 --> 00:07:47,000
or that, you know, like, it will synchronize because otherwise it wouldn't have any
value.

123
00:07:47,000 --> 00:07:49,000
And I was, like, no, it's the second.

124
00:07:49,000 --> 00:07:50,000
It's the latter one.

125
00:07:50,000 --> 00:07:51,000
It just won't have any value.

126
00:07:51,000 --> 00:07:53,000
It's, like, it's not guaranteed.

127
00:07:53,000 --> 00:07:57,000
No, that is exactly what happened, yeah.

128
00:07:57,000 --> 00:08:01,000
It's, like, some kind of quantum, it's, like, some kind of, like, quantum multiverse
thing

129
00:08:01,000 --> 00:08:04,000
where it's, like, you just destroy all the universes where it didn't work

130
00:08:04,000 --> 00:08:09,000
and you just keep randomizing until you've teleported into paradise or something.

131
00:08:09,000 --> 00:08:11,000
So there's a lot of stuff, you know.

132
00:08:11,000 --> 00:08:15,000
And so this is, like, the journey, the beginning of my journey,

133
00:08:15,000 --> 00:08:18,000
and it was a weird way to start the journey off.

134
00:08:18,000 --> 00:08:19,000
But I loved it.

135
00:08:19,000 --> 00:08:22,000
So let me kind of reverse it a little bit and just say what I know about you,

136
00:08:22,000 --> 00:08:25,000
which is that you wrote a lot of stuff at the Nakamoto Institute that I like.

137
00:08:25,000 --> 00:08:30,000
And also I really like the – you have a very interesting, like, communication style

138
00:08:30,000 --> 00:08:33,000
where you aren't afraid to make it.

139
00:08:33,000 --> 00:08:34,000
You're kind of smooth.

140
00:08:34,000 --> 00:08:38,000
It reminds me a little of Mirka Popescu or whatever,

141
00:08:38,000 --> 00:08:41,000
where you're, like, you're not afraid to make it, like, really, really hard to
understand,

142
00:08:41,000 --> 00:08:45,000
like, for the select few people that you're trying to communicate to.

143
00:08:45,000 --> 00:08:49,000
Like, I noticed that when you were talking to Richard Hart, I was, like, a lot of
the stuff,

144
00:08:49,000 --> 00:08:52,000
he thought a lot of the stuff was going over your head,

145
00:08:52,000 --> 00:08:57,000
but I was, like, some of the stuff was actually going over his head, I thought.

146
00:08:57,000 --> 00:08:59,000
Oh, my God.

147
00:08:59,000 --> 00:09:02,000
That discussion was crazy.

148
00:09:02,000 --> 00:09:09,000
Well, okay, I appreciate some things about the comparison to Mirchia,

149
00:09:09,000 --> 00:09:12,000
but overall I do not like that guy.

150
00:09:12,000 --> 00:09:20,000
I think his articles are very funny, and, you know, you and me, usually I agree with
him.

151
00:09:20,000 --> 00:09:23,000
But he is a cult leader, okay?

152
00:09:23,000 --> 00:09:29,000
So anybody who don't like him too much, okay, you've got to stay away from him.

153
00:09:29,000 --> 00:09:32,000
I definitely don't want to be a cult leader.

154
00:09:32,000 --> 00:09:34,000
Oh, yeah, I think I completely agree.

155
00:09:34,000 --> 00:09:38,000
See, but this is another example of what I like about you is you're really not
afraid to ‑‑

156
00:09:38,000 --> 00:09:42,000
you have, like, a really strong kind of scientific spirit, I think,

157
00:09:42,000 --> 00:09:47,000
where you just, if you think something is not totally 100% correct, you just say it,

158
00:09:47,000 --> 00:09:49,000
and that's very rare.

159
00:09:49,000 --> 00:09:54,000
It's, like, one in 5,000 people or something.

160
00:09:54,000 --> 00:09:55,000
So I'm not sure.

161
00:09:55,000 --> 00:09:57,000
So, I mean, that came to light recently when we started.

162
00:09:57,000 --> 00:10:04,000
I mean, do I just start jumping into, like, the fork theory and, like, futures
markets?

163
00:10:04,000 --> 00:10:06,000
I don't know where you want to take this, but we can take it anywhere.

164
00:10:06,000 --> 00:10:09,000
Honestly, I think it will just be funny.

165
00:10:09,000 --> 00:10:13,000
Like, we'll just be talking about whatever, I think.

166
00:10:13,000 --> 00:10:18,000
I mean, I'm really worried about the sanity of a lot of people in this space,
including myself,

167
00:10:18,000 --> 00:10:24,000
and I'm not sure if it will hold up under this atmosphere of polarization much
longer

168
00:10:24,000 --> 00:10:27,000
where people will just ‑‑ I don't want to say that they'll quit,

169
00:10:27,000 --> 00:10:31,000
but the productivity will fall and people will just get interested in other things,

170
00:10:31,000 --> 00:10:35,000
and there's just a lot of stuff that I kind of wonder about.

171
00:10:35,000 --> 00:10:36,000
So we can just talk about it.

172
00:10:36,000 --> 00:10:38,000
We can talk about whatever you want, honestly.

173
00:10:38,000 --> 00:10:39,000
I just think it will be ‑‑

174
00:10:39,000 --> 00:10:41,000
Productivity can be deceptive.

175
00:10:41,000 --> 00:10:50,000
I mean, you know, it's easy to work a lot on something that then you can't finish

176
00:10:51,000 --> 00:10:55,000
and then you actually weren't productive that whole time.

177
00:10:55,000 --> 00:11:02,000
So, well, I would like to ‑‑ well, first of all, thanks very much for, you know,

178
00:11:02,000 --> 00:11:09,000
mentioning my communication style because that's really something that I have worked
on a lot over the years.

179
00:11:09,000 --> 00:11:13,000
That's something that I've consciously developed, so I really appreciate that.

180
00:11:13,000 --> 00:11:16,000
Now, speaking of communication style,

181
00:11:16,000 --> 00:11:22,000
I want to bring up something that you sent to me privately on Twitter just now.

182
00:11:24,000 --> 00:11:25,000
Where is it?

183
00:11:25,000 --> 00:11:30,000
You said ‑‑ oh, my God.

184
00:11:30,000 --> 00:11:32,000
I should have ‑‑

185
00:11:32,000 --> 00:11:33,000
I'm trying to remember, even.

186
00:11:33,000 --> 00:11:36,000
Oh, it's talking about a couple of things.

187
00:11:36,000 --> 00:11:39,000
Well, I couldn't find the quote quick enough,

188
00:11:39,000 --> 00:11:43,000
but you said that I should repent for my sins.

189
00:11:43,000 --> 00:11:44,000
Oh, yes, for the Lightning Network.

190
00:11:44,000 --> 00:11:48,000
Right, because I didn't understand the Lightning Network when I was talking with
Jimmy.

191
00:11:48,000 --> 00:11:52,000
So since then, I have read the Lightning Network paper,

192
00:11:52,000 --> 00:11:57,000
and, you know, I really didn't understand just what you could do with it.

193
00:11:57,000 --> 00:12:00,000
And so it sounds great.

194
00:12:00,000 --> 00:12:07,000
It sounds very complicated and something that is a long way off to me.

195
00:12:07,000 --> 00:12:09,000
Do you know anything about that?

196
00:12:09,000 --> 00:12:11,000
Well, it's a really cool idea,

197
00:12:11,000 --> 00:12:17,000
and so it's kind of a categorical improvement on speed and privacy in addition to
scalability.

198
00:12:17,000 --> 00:12:19,000
So people are very excited about it.

199
00:12:19,000 --> 00:12:23,000
Sorry to interrupt, but first of all, I just wanted to talk about sin first.

200
00:12:23,000 --> 00:12:30,000
So my investment strategy is that when I am speaking as, you know,

201
00:12:30,000 --> 00:12:35,000
in my official capacity as a Bitcoin investor, I can do no wrong.

202
00:12:35,000 --> 00:12:42,000
So no matter how much I embarrass myself, that does not lower my social standing one
bit,

203
00:12:42,000 --> 00:12:44,000
and I have no need to apologize.

204
00:12:44,000 --> 00:12:50,000
But I did read the paper because I do want to keep up on stuff that's important.

205
00:12:50,000 --> 00:12:53,000
It's just that there's so much terrible stuff.

206
00:12:53,000 --> 00:12:57,000
It's hard to figure out what I should know, you know.

207
00:12:57,000 --> 00:13:02,000
Yeah, well, that's the tragedy that I sort of discovered when I was working on –

208
00:13:02,000 --> 00:13:06,000
even when I published Truthcoin, I happened to publish it at the same time as a
bunch of other junk.

209
00:13:06,000 --> 00:13:11,000
So I was like I kind of have to start a blog talking about Bitcoin 2.0 if any,

210
00:13:11,000 --> 00:13:16,000
because I feel the exact same way that there's no – you know, the attention economy
is like

211
00:13:16,000 --> 00:13:18,000
there's not enough time at all to read all this stuff.

212
00:13:18,000 --> 00:13:22,000
But the Lightning Network is one thing that people really like a lot,

213
00:13:22,000 --> 00:13:28,000
and they have been working on it for a while, and there are a lot of different teams
working on it,

214
00:13:28,000 --> 00:13:31,000
including this team from France that made a lot of unexpected progress.

215
00:13:31,000 --> 00:13:40,000
So it is kind of far off, but it's not – it's being actively worked on by a lot of
really productive people.

216
00:13:40,000 --> 00:13:45,000
And first of all, I also would like to say that I'm a big fan of interruptions.

217
00:13:45,000 --> 00:13:48,000
I think like it's a lot worse.

218
00:13:48,000 --> 00:13:54,000
The gish galop is a lot more intolerable where someone can lead the conversation
afar afield,

219
00:13:54,000 --> 00:13:57,000
and then it takes a huge amount of effort to return to it.

220
00:13:57,000 --> 00:14:00,000
So I think I'm pro-interruption.

221
00:14:00,000 --> 00:14:05,000
Oh, okay. Well, yeah, feel free to interrupt me too if you need to jump in on
something.

222
00:14:05,000 --> 00:14:18,000
So, you know, in the Lightning Network you have like – you can have like an
arbitrary graph of, you know,

223
00:14:18,000 --> 00:14:24,000
basically addresses, right, and each – well, the nodes are addresses.

224
00:14:24,000 --> 00:14:26,000
But you have these sort of hot wallets.

225
00:14:27,000 --> 00:14:30,000
I think what people are more concerned about is not really –

226
00:14:30,000 --> 00:14:37,000
I think people are more concerned about like this is something that gets a lot of
discussion in the kind of public discourse.

227
00:14:37,000 --> 00:14:41,000
And so when you say that you're not interested in it, I think it made people very
nervous,

228
00:14:41,000 --> 00:14:46,000
which I thought was something that I thought was very funny, which is why I kind of
referred to it that way in the message.

229
00:14:46,000 --> 00:14:53,000
I said that you might want to repent your sins and talk about like why you weren't
paying attention to it or something.

230
00:14:53,000 --> 00:15:04,000
I mean it speaks to a difference between your – like what interests you and what
interests like the current kind of popular kids.

231
00:15:04,000 --> 00:15:09,000
Sure. Well, okay. Let me talk a little more about my investment strategy, okay?

232
00:15:09,000 --> 00:15:16,000
So I would – you know, I recently wrote an article called How to Face Bitcoin Forks.

233
00:15:17,000 --> 00:15:29,000
And in that article I said that investors should act basically like a nature spirit
who is asleep most of the time,

234
00:15:29,000 --> 00:15:34,000
but wakes up and has a temper tantrum, you know, every so often.

235
00:15:34,000 --> 00:15:40,000
So yeah, I want to make people nervous. I'm awake and I'm making my temper tantrum
now.

236
00:15:41,000 --> 00:15:49,000
But anyway, back to what you were saying. Oh, okay. Well, let me finish what I was
saying, what I learned about the Lightning Network.

237
00:15:49,000 --> 00:16:01,000
So you have a graph of – the nodes are addresses, and the edges are payment
channels.

238
00:16:02,000 --> 00:16:22,000
And we – each side, each – on an edge, the two nodes at each side, they are
maintaining a series of new transactions

239
00:16:22,000 --> 00:16:28,000
as they agree to send Bitcoins in one direction or another.

240
00:16:28,000 --> 00:16:39,000
And this is the part that I thought was great. They can invalidate every previous
state each time they make a new state.

241
00:16:39,000 --> 00:16:57,000
So if I send an old state into the network, the other person is able to send
something that eliminates something like a surety bond basically.

242
00:16:57,000 --> 00:17:07,000
Like we have to have money in the channel in order to use it, and I lose all of it
if I cheat and send an invalid state.

243
00:17:07,000 --> 00:17:16,000
That's what makes the state invalid. And the invalidator also becomes invalid as we
make new states. So that's really cool.

244
00:17:17,000 --> 00:17:25,000
Well, you see, this is the point. I don't think it's really about what – I mean,
it's not really about – as I was trying to say before,

245
00:17:25,000 --> 00:17:32,000
I think it just made people nervous that you weren't aware of this thing and that
you were sort of commenting on what should be done

246
00:17:32,000 --> 00:17:41,000
without knowing about it until now. So I don't think it's about the – you see what I
mean? That's why I bring it up.

247
00:17:41,000 --> 00:17:44,000
Oh, people should be nervous. Yes.

248
00:17:44,000 --> 00:18:00,000
So you know, you and I don't completely agree. So we agree on the big things, but
I'm against the hard fork for a couple of reasons,

249
00:18:00,000 --> 00:18:07,000
and even the split because it makes the network sort of difficult to use as money
during the contentious period.

250
00:18:08,000 --> 00:18:16,000
But I've gone ahead and solved that problem as of July 2015 with my futures market,
and so I don't know if –

251
00:18:16,000 --> 00:18:21,000
Oh, wait, wait. You've already figured this all out because I've been thinking about
futures market. Wait, wait.

252
00:18:21,000 --> 00:18:24,000
But you had a prediction market. Is that the same thing?

253
00:18:24,000 --> 00:18:31,000
Yes, prediction markets, and you could talk about them as event derivatives or idea
futures. Those are –

254
00:18:31,000 --> 00:18:43,000
Oh, okay. I need to understand that because what I was – I was thinking of a futures
contract that basically says if a fork exists

255
00:18:43,000 --> 00:18:54,000
and the price is a certain amount, then I transfer units from chain – or we exchange
units at a certain exchange rate.

256
00:18:54,000 --> 00:19:02,000
Yes, so that's what I wanted to do in July 2015, and that's what I presented at
Scaling Montreal.

257
00:19:02,000 --> 00:19:10,000
Oh, no, I want that. That's great. No, that is exactly – that's exactly what I was
thinking of except you figured everything out already,

258
00:19:10,000 --> 00:19:18,000
so I don't have to. That is great. That is perfect because I don't really want there
to be forks all the time.

259
00:19:19,000 --> 00:19:21,000
What I want is for –

260
00:19:21,000 --> 00:19:25,000
To be some mechanism. You want some mechanism in place. Exactly.

261
00:19:25,000 --> 00:19:35,000
Only do a fork when we can predict that the price is going to be high enough that it
justifies the switching cost. Exactly.

262
00:19:35,000 --> 00:19:37,000
No, that is amazing.

263
00:19:37,000 --> 00:19:43,000
Yes, but the other thing is that what I was certain of, even when I published the
piece in July 2015, I was like,

264
00:19:43,000 --> 00:19:48,000
I'm certain that if I do this thing – because the big thing was Bitcoin XT at the
time, and I was like,

265
00:19:48,000 --> 00:19:55,000
well, probably what will happen is it will turn this futures market on, and it will
just say that XT is worth almost nothing in the future,

266
00:19:55,000 --> 00:19:59,000
whereas Bitcoin is worth basically the same as it's worth today in the future,

267
00:19:59,000 --> 00:20:05,000
and so then that will bring an end to this conversation, and we won't have to talk
about it anymore.

268
00:20:05,000 --> 00:20:10,000
But I remained silent on that issue on purpose because, of course, this is supposed
to be a little bit of science,

269
00:20:10,000 --> 00:20:14,000
and I don't want to bias the instruments.

270
00:20:14,000 --> 00:20:20,000
It wasn't totally surprising given what I know about prediction markets, and I know
an awful lot,

271
00:20:20,000 --> 00:20:26,000
and Robin Hanson has written a lot, and he's sort of a big influence on me,

272
00:20:26,000 --> 00:20:31,000
and so we can talk about that in a moment about why I wasn't really surprised.

273
00:20:31,000 --> 00:20:37,000
But I was still a little surprised to notice that no one really cared about this at
all.

274
00:20:38,000 --> 00:20:43,000
They were just thinking like, oh, okay, we'll have this futures market, but I don't
want to do that

275
00:20:43,000 --> 00:20:48,000
because then the futures market might force me to do something that I won't want to
do.

276
00:20:48,000 --> 00:20:52,000
It's like two people in two little camps, right?

277
00:20:52,000 --> 00:20:55,000
And then I bring them a thing, and I say, look, you don't have to fight.

278
00:20:55,000 --> 00:21:01,000
This thing will tell us which camp is right, and both of the two camps said, well,
what if it says that my camp isn't right?

279
00:21:01,000 --> 00:21:06,000
Oh, my God. I can't believe that. That is so stupid.

280
00:21:06,000 --> 00:21:13,000
But it's like the 99% view. I got this over and over again from almost everyone.

281
00:21:13,000 --> 00:21:17,000
No, that is exactly what I want. That is exactly the thing.

282
00:21:17,000 --> 00:21:24,000
Man, I'm so – I just knew that there had to be – like somebody had to know how to do
this somewhere.

283
00:21:24,000 --> 00:21:26,000
Oh, this is the greatest. Oh, man.

284
00:21:26,000 --> 00:21:32,000
So even what I was doing in presenting at Montreal, I was like, we can do like a
much faster –

285
00:21:32,000 --> 00:21:37,000
it's kind of like quick and dirty version of this that just involved like getting
together some weird panel,

286
00:21:37,000 --> 00:21:40,000
and I was like, we shouldn't rely on this because it's not a good process,

287
00:21:40,000 --> 00:21:45,000
but just for this one time since we've got this crazy thing going on with Bitcoin
XT,

288
00:21:45,000 --> 00:21:49,000
and people are worried, worried enough to hold this giant conference in Montreal, et
cetera.

289
00:21:49,000 --> 00:21:55,000
I was like, we can just get this weird panel of like seven or nine people, and we
can do this multi-sig thing,

290
00:21:55,000 --> 00:22:00,000
and all you need is for the multi-sig people to sign this little message that says,

291
00:22:00,000 --> 00:22:04,000
did the fork happen, yes or no, and what is the current Bitcoin price,

292
00:22:04,000 --> 00:22:06,000
and they would have to do that in the future.

293
00:22:06,000 --> 00:22:10,000
And that would resolve the markets in like a very, very, very simple way,

294
00:22:10,000 --> 00:22:12,000
and we wouldn't need to build anything weird.

295
00:22:12,000 --> 00:22:15,000
We just need to basically trust those seven or those nine people.

296
00:22:15,000 --> 00:22:22,000
And again, I'm not advocating that – I was not at the time advocating that we make
this like a recurring thing.

297
00:22:22,000 --> 00:22:25,000
I was just saying, well, we can do this one-off thing while I finish.

298
00:22:25,000 --> 00:22:31,000
But my project, which is Hivemind, which is designed to just do all of this without
trusting anyone,

299
00:22:31,000 --> 00:22:35,000
and there's a lot of cool things about it that you might like,

300
00:22:35,000 --> 00:22:40,000
but the one thing in particular that is that it's actually possible to do –

301
00:22:40,000 --> 00:22:46,000
you do a market just by pretty similar to how Bitcoin does each transaction

302
00:22:46,000 --> 00:22:49,000
where you select the previous state, and then you update it,

303
00:22:49,000 --> 00:22:52,000
and kind of like this little line of state updates.

304
00:22:52,000 --> 00:22:58,000
You just need like one weird thing, which is that someone has to put some amount of
money,

305
00:22:58,000 --> 00:23:00,000
which can be arbitrarily small.

306
00:23:00,000 --> 00:23:04,000
They need to kind of basically sacrifice the first whatever, 10 cents,

307
00:23:04,000 --> 00:23:08,000
or it depends on how liquid you want the market to be at first.

308
00:23:08,000 --> 00:23:14,000
But if you do this, then people can make trades that are atomic, that aren't with
anyone.

309
00:23:14,000 --> 00:23:16,000
So even though they are betting against each other,

310
00:23:16,000 --> 00:23:21,000
each individual trade is just betting against this giant – it's kind of like a weird
scale.

311
00:23:21,000 --> 00:23:25,000
It's a little bit difficult to describe, but people are kind of like betting on the
scale going up and down.

312
00:23:25,000 --> 00:23:30,000
So I was like this is a really cool thing, and almost all of it doesn't need any
human beings at all.

313
00:23:30,000 --> 00:23:32,000
It just doesn't need any code.

314
00:23:32,000 --> 00:23:37,000
But the Oracle part can be – we have seven or nine people just sign this thing.

315
00:23:37,000 --> 00:23:40,000
But this is exactly what Robin Hanson found

316
00:23:40,000 --> 00:23:43,000
when he tried to get prediction markets going for like the last 20 or 30 years,

317
00:23:43,000 --> 00:23:48,000
which is that people aren't interested because – well, there's a lot of speculation
about why,

318
00:23:48,000 --> 00:23:53,000
but I think the real reason is that it's just a prediction market is too rational,

319
00:23:53,000 --> 00:23:55,000
and it's not loyal to you at all.

320
00:23:55,000 --> 00:23:57,000
It's only loyal to the truth.

321
00:23:57,000 --> 00:24:01,000
So people come up with all kinds of reasons why they don't like it.

322
00:24:01,000 --> 00:24:04,000
Sorry, that is really for me.

323
00:24:04,000 --> 00:24:08,000
But you see, this is why my project, Hivemind, is important,

324
00:24:08,000 --> 00:24:17,000
because the prediction markets have to have inherited the blockchain's immortality
and immutability,

325
00:24:17,000 --> 00:24:20,000
because people don't like them around.

326
00:24:20,000 --> 00:24:24,000
So they are constantly trying to get rid of them or discredit them or something.

327
00:24:24,000 --> 00:24:26,000
So I need something in order to get them to work,

328
00:24:26,000 --> 00:24:29,000
in order just to get prediction markets to work in general like in the real world.

329
00:24:29,000 --> 00:24:34,000
You need to be some way of doing all the market stuff and letting people earn money

330
00:24:34,000 --> 00:24:40,000
and preferably earn money anonymously, because it's not going to really work if –

331
00:24:40,000 --> 00:24:45,000
in order for all the greed-based game theory stuff to work, it has to be like cash
that they get.

332
00:24:45,000 --> 00:24:54,000
They can't get like vouchers or some weird thing that may cause their tax bill to
change

333
00:24:54,000 --> 00:24:55,000
or some weird other thing.

334
00:24:55,000 --> 00:24:58,000
Maybe they may get harassed or just marginalized.

335
00:24:58,000 --> 00:25:00,000
It's got to be like anonymous cash.

336
00:25:00,046 --> 00:25:17,046
It's got to really work. But you need that, but more importantly, someone needs to
just be able to create some market about something and just challenge all kinds of
third parties and other people to kind of bet in them, and that's why it really
needs the uncensorable properties of the blockchain.

337
00:25:18,046 --> 00:25:30,046
But then, of course, I was totally scammed by fate, because I was trying to
introduce this idea next to like Ethereum, which is going to be like the world
computer and power AI and everything.

338
00:25:30,046 --> 00:25:31,046
Oh, my God.

339
00:25:31,046 --> 00:25:33,046
How am I supposed to compete against that?

340
00:25:38,046 --> 00:25:39,046
Yeah, right.

341
00:25:39,046 --> 00:26:08,046
Exactly. So for a while, I had the Bitcoin Uncensored podcast, but then that went
away, and now it's just been a sad – I mean, there's been a lot of trends in the
Bitcoin community, but one of them that you pointed out recently was that there's
this kind of dev worshipping going on, which is – it's not the absolute worst thing
that could happen, but it's getting a little weird.

342
00:26:09,046 --> 00:26:11,046
I'm not sure where it leads.

343
00:26:12,046 --> 00:26:24,046
Well, to me, look at how much work was put into creating Ethereum, and when I think
about it, there is nothing that I would ever want to use it for.

344
00:26:24,046 --> 00:26:31,046
Any way that Ethereum is useful, there's just a different thing that's way better.

345
00:26:32,046 --> 00:26:42,046
Well, except for scamming people with the ICOs, because it pre-sorts the community
for gullibility. So that's definitely by far the most…

346
00:26:43,046 --> 00:27:00,046
Actually, here's a great idea that anybody can make. Just go and do it for me,
anybody watching. You should have an Ethereum-based artificial intelligence that
automatically creates new ICO scams.

347
00:27:01,046 --> 00:27:22,046
That was like the DAO, though, right? See, what's funny for me is they will retreat
to abstraction where I didn't even think it was even possible to get any – I already
thought Ethereum was basically the most abstract thing, so it resisted criticism
because no one could even talk about what it was, because it was just everything.

348
00:27:23,046 --> 00:27:36,046
But then the DAO was like, it will be everything again. Because they're raising all
this money, and they're like, what are you going to spend that money on? And they
don't even know. It's a free idea.

349
00:27:37,046 --> 00:27:41,046
The ICO is like, we've done no work, but here's our weirdo idea.

350
00:27:42,046 --> 00:28:00,046
Lots of developers in Ethereum did lots of work, and as far as I'm concerned, it is
totally wasted. So much better things that they could have done if they had an idea.

351
00:28:01,046 --> 00:28:19,046
Well, it's true that I also kind of contrast – I'm not sure how much of – I mean,
it's true that the people who work on Bitcoin work really, really hard, and they're
very smart, and kind of in some sense irreplaceable, but not completely.

352
00:28:19,046 --> 00:28:31,046
But there is also kind of a glamour, though, to it. People do get flown out to
conferences in exotic locations that they don't have to pay for, and they get this
cool stuff.

353
00:28:32,046 --> 00:28:50,046
I'm not exactly sure where this is going. I mean, I don't think – it's just one of
the many weird trends that I sort of see in Bitcoin. I'm not exactly sure what –
it's something that wouldn't have happened, I think, if there was more of an
emphasis on these futures markets.

354
00:28:51,046 --> 00:29:07,046
I mean, people – no one even knows – the interest is very, very low. I mean, some
people came up to me after my talk in Montreal, and they were interested, but they
were like not the elite decision makers. They were all like the young people with a
very open mind.

355
00:29:08,046 --> 00:29:14,046
Because if you aren't an elite decision maker, why would you want to be replaced by
a better decision maker?

356
00:29:14,046 --> 00:29:36,046
Right, exactly. That's the problem. And I've written extensively – at
BitcoinHiveMind.com, there's like a sequence I wrote, and if you read the first one
in the sequence, I talk a little bit about the tradeoff between loyalty and
accuracy, and how it's like – this is why no one likes prediction markets, I think.

357
00:29:37,046 --> 00:29:46,046
Which is that lots of people do like them, but they're just not – those are not the
powerful people. They're the guy who would be CEO, right?

358
00:29:47,046 --> 00:29:55,046
Like what if you go to the CEO, and you say we can do a conditional futures market.
We can say, what would the share price be if we fired the CEO or not?

359
00:29:56,046 --> 00:30:05,046
Sounds like a terrible idea. You're fired, right? It only benefits the guy who's
next in line to be the CEO.

360
00:30:06,046 --> 00:30:26,046
But in a way, this is a microcosm of the entire human struggle, though, is it not? I
mean, this is like mankind's struggle against conformity, and against tradition, and
struggling, reaching towards science and progress. This is like a microcosm of
everything, I think.

361
00:30:27,046 --> 00:30:45,046
Can I tell you something that I was thinking about, about prediction markets? So
here's something that's in my imagination. Now, did you see my video about how
Bitcoin investors should act like Yahweh?

362
00:30:46,046 --> 00:31:08,046
Okay, so to me, if we had a prediction market that people follow, it would make
intelligent decisions. It could be like something that has a discernible
personality. I mean, there would be many different people interacting.

363
00:31:09,046 --> 00:31:11,046
It would be like the representative investor, maybe.

364
00:31:12,046 --> 00:31:24,046
See, one thing I want to say is that there's a difference. People don't appreciate
the difference between this and the coin voting. So coin voting is kind of not that
bad, and just regular polling.

365
00:31:25,046 --> 00:31:34,046
So like regular polling, like on Twitter, we know why that is no good. That's
because if that were useful for anything, there would be simple attacks, and that
goes down a bad road that doesn't really lead anywhere.

366
00:31:35,046 --> 00:31:51,046
But then there's like what used to be called, I think, Bitcoinocracy or something,
or vote.bitcoin.com. Now Roger Ver is hosting it there. And that's where people can
vote with their coins, and you can see who the big holders, what their preferences
are.

367
00:31:51,046 --> 00:31:57,046
And that's fine, but that doesn't really appreciate… people don't appreciate the
difference between that and a futures market, which is that…

368
00:31:58,046 --> 00:31:59,046
You mean it's skin in the game.

369
00:32:00,046 --> 00:32:10,046
Yes, exactly. You bear no private costs to you for voting wrong at vote.bitcoin.com.
So one is like Plutarchy, where it's like rule of the wealthy, and they just decide
what to do.

370
00:32:11,046 --> 00:32:17,046
But it's the futures market that's more like capitalism, where you have to have a
lot of money, and you have to be willing to risk it.

371
00:32:18,046 --> 00:32:31,046
And so even people who are very rich, like Bill Gates, they don't get to decide how
much crude oil we make or something, because they'd have to buy those companies or
speculate in those spot markets, which they just don't do.

372
00:32:32,046 --> 00:32:40,046
Instead they buy a diversified portfolio, or they do their charity things, or they
do some other… they do the stuff that they actually care about, which is the stuff
that they know about.

373
00:32:41,046 --> 00:32:49,046
And so people don't appreciate that difference between the futures market and just
the coin voting.

374
00:32:49,046 --> 00:32:55,046
And in particular, this is the second time I'm going to make this point, I really
don't think… this whole time I've thought that…

375
00:32:56,046 --> 00:33:03,046
I don't think the market would… the most important thing is I'm open to having my
mind changed by the prediction market.

376
00:33:04,046 --> 00:33:10,046
But in my opinion is that I don't think that investors would really go for, you
know, just la-da-da, we're going to hard fork.

377
00:33:11,046 --> 00:33:16,046
And why are we hard forking to 8 megabytes? Well, you know, it just seemed like a
good number.

378
00:33:16,046 --> 00:33:21,046
I mean, I feel like the investors would just shoot that down like so quickly.

379
00:33:22,046 --> 00:33:30,046
And so I think, you know, the point is, like I said before, both of the camps should
have been very happy to go with this, but really neither of them were.

380
00:33:31,046 --> 00:33:41,046
And I don't know if I attribute that to me not explaining it very well or just the
bias that everyone has against something that's not loyal to them.

381
00:33:41,046 --> 00:33:51,046
Or if it's just plain like economic ignorance, which it may be, which would be a
very sad state of affair, but hardly unusual.

382
00:33:52,046 --> 00:34:00,046
To me, like, you can build a dumb thing out of intelligent pieces, or you can build
an intelligent thing out of dumb pieces.

383
00:34:01,046 --> 00:34:04,046
And I will always go for the intelligent thing made out of dumb pieces.

384
00:34:05,046 --> 00:34:10,046
It's always better to me, like, but that is the opposite of most people.

385
00:34:11,046 --> 00:34:15,046
Yeah. So I was like, I'm in like a weird, to just take a step back again.

386
00:34:16,046 --> 00:34:28,046
So I was like, I proposed this idea and I was like, well, you know, what I was
hoping for was that enough people would, you know, they would be willing to do kind
of what you might call the right thing and say, okay, well, I think that this is a
cool thing.

387
00:34:28,046 --> 00:34:38,046
And so even though I'm going to run the risk that the prediction market will
disagree with me, which if you think about it, you must do for anything that, well,
that's a whole nother conversation.

388
00:34:39,046 --> 00:34:44,046
But you, the epistemology of like what, like prediction markets aggregate all
available knowledge.

389
00:34:45,046 --> 00:34:54,046
So unless you're saying that you know everything about the entire world, you always
have to be like, like, open to having new information show up, which is the only
reason that being alive is interesting at all.

390
00:34:54,046 --> 00:34:55,046
It's a whole nother story though.

391
00:34:56,046 --> 00:34:58,046
But so I was kind of like, this isn't really going to work.

392
00:34:59,046 --> 00:35:06,046
And so it's, so I think that was like late 2015.

393
00:35:06,046 --> 00:35:07,046
And I kind of was like, okay.

394
00:35:07,046 --> 00:35:10,046
So then I went to scan Hong Kong in December 2015.

395
00:35:11,046 --> 00:35:20,046
And by in the intervening time, I invented this other thing called now called
Drivechain, which is like the sidechains technology.

396
00:35:20,046 --> 00:35:30,046
And so I'm in like even weirder position where I have two things that I think would
just instantly decapitate the scaling conversation like perfectly.

397
00:35:31,046 --> 00:35:36,046
That's sort of the futures market idea, which could have been done like quick and
dirty.

398
00:35:36,046 --> 00:35:41,046
But you see, if you do the quick and dirty version, you need a little bit more
community buy in that I thought I was ever going to get.

399
00:35:41,046 --> 00:35:44,046
So I was like, well, I'll just give up on that.

400
00:35:44,046 --> 00:35:47,046
And then I had the second thing, which is the sidechains path.

401
00:35:47,046 --> 00:35:58,046
And then I have a really they add up to my own project, which is Bitcoin hype mind,
which is itself a sidechain of Bitcoin that does all these futures markets
automatically.

402
00:35:58,046 --> 00:36:01,046
But I'm in kind of a weird position where I can't like finish all of them.

403
00:36:02,046 --> 00:36:08,046
So I've kind of switched away from that, because you may be wondering, like, why
didn't I push more on this as I thought it would work?

404
00:36:08,046 --> 00:36:10,046
And I honestly did believe it would work.

405
00:36:11,046 --> 00:36:15,046
And the answer is that I just happened to find this new thing Drivechain that I also
think would work.

406
00:36:16,046 --> 00:36:22,046
But it's being met with resistance for a lot of the similar reasons, really, which
is that it lets everyone get what they want.

407
00:36:22,046 --> 00:36:33,046
And I just feel that at this point, some people are just so upset that they're not
not everyone, but some people are just so upset that they don't even want.

408
00:36:34,046 --> 00:36:40,046
They're worried about people are worried about like control and these other things,
and they're just like, oh, give give some control away.

409
00:36:40,046 --> 00:36:43,046
And then it will be the end.

410
00:36:44,046 --> 00:36:47,046
The culture in Bitcoin is absolutely mad.

411
00:36:47,046 --> 00:36:55,046
So, you know, I deliberately decided to go crazy in order to deal with it now.

412
00:36:57,046 --> 00:36:59,046
So, yeah.

413
00:36:59,046 --> 00:37:00,046
Yeah.

414
00:37:00,046 --> 00:37:12,046
So, yeah, I think, well, you could use a prediction market for anything, for
directing any organization that has, you know, owners like a stock.

415
00:37:13,046 --> 00:37:16,046
You need a measurable outcome, which is the difficult part.

416
00:37:17,046 --> 00:37:21,046
But for a corporation, it's perfect because you have the stock price, which is just
it's actually not perfect.

417
00:37:21,046 --> 00:37:28,046
I've noticed because, you know, you have weird like stock splits and like weird
other stuff that like threatens to make it.

418
00:37:28,046 --> 00:37:33,046
But you can easily tame that and smooth it over and just say, OK, this is how we're
going to do things.

419
00:37:34,046 --> 00:37:42,046
And what I've actually Robin Hansen's goal is to and my goal as well, I've inherited
from him, I guess, which is that you try and eventually set these up.

420
00:37:43,046 --> 00:37:52,046
And then you do some you a little research project over a few years and you see, OK,
here's all the here's the class of corporations that followed the prediction markets
advice and fired the CEO.

421
00:37:53,046 --> 00:37:54,046
And it said they should fire him.

422
00:37:55,046 --> 00:37:58,046
And here's the class is like the group that did not follow the advice.

423
00:37:59,046 --> 00:38:07,046
And you see whether or not you can demonstrate that there's a much larger return,
which I hope that you would be able to demonstrate this.

424
00:38:08,046 --> 00:38:16,046
The you know, that the shareholders get a better return on investment if they follow
the prediction markets advice, which I think you and I would agree follows pretty
clearly from theory.

425
00:38:16,046 --> 00:38:19,046
But it would be nice to have some kind of experiment to validate this as well.

426
00:38:20,046 --> 00:38:32,046
Because what you then do, this is the last part, is you then go to the board of
directors and you threaten to sue them for mismanaging the company because they have
a fiduciary duty to optimize the share values.

427
00:38:33,046 --> 00:38:39,046
Then you go to them and you just say, you have to follow the advice in this thing or
we'll imprison you for fraud or something like that.

428
00:38:40,046 --> 00:38:44,046
And that is, you know, you're keeping your friend on as CEO and we know that he
shouldn't be.

429
00:38:45,046 --> 00:38:47,046
So that's so that is a goal of mine.

430
00:38:48,046 --> 00:38:49,046
It's a little bit more difficult.

431
00:38:50,046 --> 00:38:55,046
And my goal is I mean, my real goal is to actually I think it's like the
congressional elections.

432
00:38:56,046 --> 00:39:00,046
Most people don't know their their senators names or their representatives name.

433
00:39:01,046 --> 00:39:04,046
And so there's I think people rationally choose to stop voting there.

434
00:39:04,046 --> 00:39:13,046
But I think if people had a little more advice, all the people who don't vote could
be turned into a strong weapon for like optimizing these, whatever you want to make.

435
00:39:14,046 --> 00:39:17,046
But there's like another layer, which is that you need something measurable.

436
00:39:18,046 --> 00:39:19,046
But otherwise, I'm like 100%.

437
00:39:20,046 --> 00:39:21,046
I love prediction markets.

438
00:39:22,046 --> 00:39:23,046
So we need all the help we can get on this team.

439
00:39:24,046 --> 00:39:26,046
So we'll spread the gospel.

440
00:39:26,046 --> 00:39:37,046
Well, to me, like if you were to use a prediction market to manage a company and you
would say like, you know, should we fire the CEO or whatever?

441
00:39:38,046 --> 00:39:39,046
It's not a prediction market.

442
00:39:40,046 --> 00:39:41,046
It's a direction market.

443
00:39:42,046 --> 00:39:49,046
It's like the investors are directly giving orders and the company should follow it
because it's their company.

444
00:39:50,046 --> 00:39:59,046
Sometimes a distinction is drawn between the markets that are used to make decisions
and the ones that are just used to make predictions like who will win the Academy
Award or whatever.

445
00:40:00,046 --> 00:40:04,046
But I think I'm not really sure there's a big difference between those.

446
00:40:05,046 --> 00:40:06,046
And other people have agreed that there's not.

447
00:40:07,046 --> 00:40:09,046
But when the distinction is drawn, sometimes those are called decision markets.

448
00:40:10,046 --> 00:40:12,046
So that is actually a phrase that people use.

449
00:40:13,046 --> 00:40:14,046
Sure.

450
00:40:15,046 --> 00:40:17,046
But I would say that there really isn't a difference.

451
00:40:18,046 --> 00:40:35,046
It's just that if we're talking about people who own a company and they are making
predictions about what the board of directors should do, it would be bad if the
board of directors didn't do what the market said.

452
00:40:36,046 --> 00:40:37,046
I agree.

453
00:40:37,046 --> 00:40:41,046
But, you know, there's a lot of people come up with all these excuses all the time.

454
00:40:42,046 --> 00:40:43,046
They say, blah, blah, blah, manipulation.

455
00:40:44,046 --> 00:40:45,046
Oh, my God.

456
00:40:46,046 --> 00:40:47,046
Those traders don't know anything.

457
00:40:48,046 --> 00:40:49,046
They're not experts.

458
00:40:50,046 --> 00:40:51,046
You know, it's all the stuff that you've already been hearing from people about.

459
00:40:52,046 --> 00:40:53,046
Yeah, yeah.

460
00:40:54,046 --> 00:40:59,046
You know, as if you would make a trade without being informed by some knowledge from
yourself or something.

461
00:41:00,046 --> 00:41:01,046
Sorry.

462
00:41:02,046 --> 00:41:03,046
Sorry.

463
00:41:04,046 --> 00:41:05,046
Are you familiar with quantum mechanics at all?

464
00:41:05,046 --> 00:41:06,046
A little bit.

465
00:41:07,046 --> 00:41:08,046
It's quite difficult.

466
00:41:09,046 --> 00:41:10,046
But, yeah, I am a little bit familiar.

467
00:41:11,046 --> 00:41:12,046
Do you know about statistical ensembles?

468
00:41:13,046 --> 00:41:15,046
You may have to refresh my memory.

469
00:41:16,046 --> 00:41:35,046
So, one thing that we do, you know, we can have, when we're shooting a beam of
particles at a target, we describe the beam of particles via a statistical ensemble.

470
00:41:36,046 --> 00:41:42,046
It's a matrix that says what kinds of states the particles are in.

471
00:41:42,046 --> 00:41:48,046
So, an individual particle, it is like a vector in a linear space.

472
00:41:49,046 --> 00:41:51,046
It's called a Hilbert space, but it's a vector in a Hilbert space.

473
00:41:52,046 --> 00:41:56,046
And there's one, there's one, just imagine there's one linear space.

474
00:41:57,046 --> 00:41:58,046
I'm slightly familiar.

475
00:41:59,046 --> 00:42:02,046
I know about like the, what is it, the Mach-Zelda or interferometer or something.

476
00:42:03,046 --> 00:42:06,046
So, I'm sort of familiar with what you're talking about, where they're watching the
photons go through.

477
00:42:07,046 --> 00:42:12,046
They always come out one side, and they are, that is evidence of multiverse or
something.

478
00:42:13,046 --> 00:42:14,046
So, I'm a little familiar with that.

479
00:42:15,046 --> 00:42:17,046
Well, but, okay, that's not the part that I wanted to talk about, though.

480
00:42:18,046 --> 00:42:27,046
The point is that the particle is in some state, and it's like a, it's like a
probability vector, squared, and then it becomes a probability, but whatever.

481
00:42:28,046 --> 00:42:35,046
It's a vector, and, but there's a matrix that describes the beam as a whole.

482
00:42:36,046 --> 00:42:44,046
Because not every particle is exactly in the same state, and we don't know what each
individual particle is like.

483
00:42:45,046 --> 00:42:51,046
So, what you can, so now let's talk about like an election result.

484
00:42:52,046 --> 00:43:03,046
Okay, so say, you know, it's either, you know, Trump or Clinton, and there's going
to be a percentage for each of them.

485
00:43:03,046 --> 00:43:07,046
And let's say there aren't any third parties or independents, everybody's forced to
vote.

486
00:43:08,046 --> 00:43:10,046
So, it's, the numbers add up to 100%.

487
00:43:11,046 --> 00:43:34,046
And, but we could have a, we could describe people qualitatively, and we could say,
like, people are more polarized or less polarized, and that wouldn't change the
result of the election.

488
00:43:34,046 --> 00:43:36,046
Does what I'm saying make, does that make sense?

489
00:43:37,046 --> 00:43:49,046
Like, if people, like, it could still end up like 51%, 49%, even if, like, people
are on, mostly on both ends, or if they're mostly in the center.

490
00:43:50,046 --> 00:43:51,046
Does that, does that make sense?

491
00:43:52,046 --> 00:44:00,046
It does, but I'm struggling to see the relevance to when people complain about,
because I've listened to people complain about prediction market accuracy for years.

492
00:44:00,046 --> 00:44:17,046
But see, I think that if you had a futures market, you would be able to tell what
people are thinking in a much more, you know, attuned way.

493
00:44:18,046 --> 00:44:27,046
So, it's not like just for or against, but like, how many, how much are people
polarized versus how much are they indifferent?

494
00:44:28,046 --> 00:44:29,046
Does that make sense?

495
00:44:30,046 --> 00:44:35,046
I think it does. I mean, you could, what you could do is you could run the
conditional parts in a different way.

496
00:44:36,046 --> 00:44:39,046
So, like, with Bitcoin, it's like, if Bitcoin forks, will the exchange rate go up?

497
00:44:40,046 --> 00:44:47,046
But you could do something weirder with the election. You could say, like, if the
Republican Party ran Ron Paul, would he actually win?

498
00:44:48,046 --> 00:44:53,046
Like, if he got debate time, would he win the nomination? If he won the nomination,
would he win the election?

499
00:44:53,046 --> 00:45:01,046
And so, even though his probability of winning the nomination might be, like, 1% or
something, you could then split that.

500
00:45:02,046 --> 00:45:07,046
You could say, like, okay, but if that happens, then he's guaranteed to win the
general election or something like that.

501
00:45:08,046 --> 00:45:10,046
And then you could draw, like, weird evidence from that.

502
00:45:10,046 --> 00:45:17,046
But I think the way I would use prediction markets would be a different way in,
like, a civic sense.

503
00:45:18,046 --> 00:45:24,046
It would be something like, what do you want the unemployment? Here's what the
unemployment rate would be if we elected the Democrat.

504
00:45:25,046 --> 00:45:28,046
And here's what the unemployment rate would be if we elected the Republican.

505
00:45:29,046 --> 00:45:35,046
And then you kind of turn the two-party system against itself a little bit, where
they're each trying to stab each other in the back to try and get this number down.

506
00:45:36,046 --> 00:45:38,046
And they end up converging to, like, you know, a rational.

507
00:45:38,046 --> 00:45:40,046
Oh, that's a great idea.

508
00:45:41,046 --> 00:45:46,046
Well, sorry, that was probably a very roundabout and confusing way to ask my
question just now.

509
00:45:47,046 --> 00:45:52,046
But I'm just going to have to read all of your stuff for next time.

510
00:45:53,046 --> 00:45:59,046
But I think that I haven't figured out how to do the math yet.

511
00:46:00,046 --> 00:46:08,046
But I think that with a futures market, you could get basically a statistical
ensemble of the people.

512
00:46:09,046 --> 00:46:15,046
And, like, not just for or against, but, like, how much, like, how radical are they?

513
00:46:16,046 --> 00:46:27,046
See, again, the trick with the prediction market, in my view, if you ask me, is that
you have something that will be really easy to measure in the future, but it's
really hard to measure now.

514
00:46:27,046 --> 00:46:31,046
So, like, now we all know that Donald Trump won in the future, but we don't know who
would win.

515
00:46:32,046 --> 00:46:35,046
We didn't know who would win, like, last year or, you know, years or whatever ago.

516
00:46:36,046 --> 00:46:37,046
I like how you're, like, now in the future.

517
00:46:38,046 --> 00:46:39,046
Yes, people of the past.

518
00:46:40,046 --> 00:46:41,046
No.

519
00:46:42,046 --> 00:46:43,046
Exactly.

520
00:46:44,046 --> 00:46:45,046
And so all you need to do, though, is you need to tag.

521
00:46:46,046 --> 00:46:49,046
It's a little bit like quantum, like, entanglement or something, where it's, like,
you have these pieces of paper.

522
00:46:50,046 --> 00:46:53,046
One is worth a dollar if Hillary Clinton wins, and one's worth a dollar if Donald
Trump wins.

523
00:46:54,046 --> 00:46:55,046
And it's cheap.

524
00:46:56,046 --> 00:46:58,046
You're going to entangle it with something in the future that's really easy to get.

525
00:46:59,046 --> 00:47:07,046
But in return for doing that, you get kind of like a time machine where it's
broadcasting backwards in time, like, what all the information is about whether or
not this will happen.

526
00:47:08,046 --> 00:47:14,046
Well, next you need to invent a blockchain that does time travel for me.

527
00:47:15,046 --> 00:47:23,046
And then how much – I could definitely do – I could do an ICO, and then I could time
travel to before I had done that ICO, and I could do it again.

528
00:47:24,046 --> 00:47:25,046
Perfect.

529
00:47:26,046 --> 00:47:27,046
Infinite series of ICOs.

530
00:47:28,046 --> 00:47:29,046
Yeah, yeah.

531
00:47:30,046 --> 00:47:38,046
Yeah, I would like to see an infinite series of stupid ICOs that just happen until
the idea is totally beaten into the ground.

532
00:47:39,046 --> 00:47:41,046
So what do you think, like, is the right – let's talk about that.

533
00:47:42,046 --> 00:47:47,046
Like, what do you think should – is the strategy for killing the ICO nonsense?

534
00:47:48,046 --> 00:47:56,046
Is that just, like, if you can't beat them, join them, and you just, like, do, like,
some – and we just, like, exhaust the space of, like, uninformed capital?

535
00:47:57,046 --> 00:47:59,046
And, like, what is the – what's the deal with that?

536
00:48:00,046 --> 00:48:01,046
Or do we just wait for, like, someone to go to prison?

537
00:48:02,046 --> 00:48:07,046
I mean, why is – like, why is Eric Borg, who's running ShapeShift from the United
States?

538
00:48:08,046 --> 00:48:11,046
It seems like you can say they're stupid as much as you want.

539
00:48:12,046 --> 00:48:13,046
It doesn't matter.

540
00:48:14,046 --> 00:48:21,046
We just have a lot of, like, cheerleaders saying, like, oh, like, pink coin is going
to do great, or whatever.

541
00:48:22,046 --> 00:48:26,046
I just remember that was something somebody invented in 2014, I think.

542
00:48:27,046 --> 00:48:29,046
Didn't you just say – I just saw Preston Byrne.

543
00:48:30,046 --> 00:48:32,046
It was like Ferrari coin or something.

544
00:48:33,046 --> 00:48:35,046
You get to take home a Ferrari if you participate.

545
00:48:36,046 --> 00:48:37,046
You get to enter into a lottery.

546
00:48:38,046 --> 00:48:41,046
To me – like, here's what I say about that.

547
00:48:42,046 --> 00:48:50,046
Like, it's risky to make a stupidity play, and you shouldn't lie to yourself if you
are making a stupidity play.

548
00:48:51,046 --> 00:48:56,046
But I don't think that it is wrong to make an investment that is a stupidity play.

549
00:48:57,046 --> 00:49:02,046
I think it's something that I would want to avoid generally, because I can't predict
stupidity.

550
00:49:03,046 --> 00:49:17,046
But I think if I could get a lot of guaranteed money out of an ICO, I would do it,
and I would not lie about why I was doing it.

551
00:49:18,046 --> 00:49:23,046
I would say I am taking advantage of stupid people, and I have a great opportunity,
so that's what I'm doing.

552
00:49:24,046 --> 00:49:31,046
I would not say, like, oh, you know, whatever coin is going to turn the universe
inside out or whatever.

553
00:49:32,046 --> 00:49:33,046
No.

554
00:49:34,046 --> 00:49:35,046
Yeah, no, I think you're right.

555
00:49:36,046 --> 00:49:42,046
See, this is where – so I think almost everyone in the Bitcoin community thinks that
the ICO should be, like, legal,

556
00:49:43,046 --> 00:49:48,046
and that you shouldn't, like, use force to, like, kind of suppress this absurd
phenomenon.

557
00:49:49,046 --> 00:49:54,046
But I think there is a crime against the truth almost always when the ICO –

558
00:49:54,046 --> 00:49:59,046
and it creates – it makes the space just so much more confusing, because it's
impossible to –

559
00:50:00,169 --> 00:50:12,169
go anywhere or try to review anything or even just exist in any public capacity
without getting emails constantly from all kinds of people who are trying to ask you
to, like, endorse this or whatever.

560
00:50:12,169 --> 00:50:29,169
I mean, I just – I can't believe, like, how often someone in Bitcoin
enthusiastically, you know, tells me about something, and I'm thinking, oh, my –
that idea is just terrible, and then it makes a billion dollars.

561
00:50:29,169 --> 00:50:30,169
Yeah, I know, right?

562
00:50:30,169 --> 00:50:36,169
It doesn't make any sense. Like, all of these things are so dumb. Like, do you
remember Steam?

563
00:50:36,169 --> 00:50:38,169
Oh, my God, that was ridiculous.

564
00:50:39,169 --> 00:50:53,169
That was just the worst. I can't believe people were pumping that. Like, it was just
– it just seems like you think about this for – well, like, look at how many people
are fooled by multilevel marketing schemes.

565
00:50:53,169 --> 00:51:17,169
But it's so obvious. It's like, well, it's hierarchical. Well, it's not exactly.
It's like a tree, right? And the root of the tree gets almost all of the money, and
the leaves don't get very much. But you're not allowed to just come in at the root.
You have to be a leaf, you know, whatever.

566
00:51:17,169 --> 00:51:34,169
That's the thing is the tokens – that's in my opinion, because I've been trying to
wrap my head around this issue for a long time, and I think one of the major factors
is that all of the token-based stuff, for good or for ill, it comes with kind of an
MLM scheme built in. All the token stuff does.

567
00:51:34,169 --> 00:51:57,169
So you pump the token. You own – you become an owner. You've got skin in the game.
You want to pump this token, and so then you hand it off to people who want to pump
the token. And so then it becomes like an MLM scheme. And so it's similar like it
does in Bitcoin as well. But so that's not – but I'm just saying that's the dominant
factor that makes some of this – that fuels a lot of this, I think.

568
00:51:58,169 --> 00:52:14,169
So it's another reason to be wary. But yeah, I don't know like why – it does bring
me back to something else I was going to say about the Dao, which was that it was
like another level of abstraction. And then right when I thought, okay, this is the
dumbest it could possibly get.

569
00:52:14,169 --> 00:52:30,169
Like I literally – I sat down, and I tried to think like is there a way to – because
I was literally thinking like, okay, if these people are this dumb, like I might
want to like try and like make like a fake account somewhere and throw my hat in the
ring and just get like whatever, like $200 million or something somehow.

570
00:52:30,169 --> 00:52:54,169
And I was like, can I make it even more abstract? And I thought, no, there is no
possible way. But like a week after that, someone right before the Dao got hacked
and everyone kind of sobered up, someone did – do you remember this? Someone did the
Dao of Daos. And I was like, that's it. All I did was the word of and the second
Dao, and I would have been there.

571
00:52:54,169 --> 00:52:55,169
Wait a minute.

572
00:52:56,169 --> 00:52:59,169
I'm pretty sure that wasn't that high.

573
00:53:01,169 --> 00:53:15,169
I mean I don't know like how people even thought of that. It's just like their minds
work a different way than yours. Somehow they have some way of thinking of the next
like bigger thing. And then fortunately the Dao hacker.

574
00:53:15,169 --> 00:53:20,169
Yeah, yeah. No, the Dao hacker is one of my heroes.

575
00:53:20,169 --> 00:53:22,169
I'm so happy. I campaigned a lot.

576
00:53:23,169 --> 00:53:29,169
I said that on one of my articles. But I mean how can you not admire the guy? His
hat was great.

577
00:53:30,169 --> 00:53:53,169
That was amazing. And when you pointed out in your article about Ethereum is doomed,
I had no idea that that quote that was in the code that said like to the extent that
you think that you may interpret this differently. It said like the terms and
conditions are the code and that's it. And if anything unexpected happens at all,
that's what we wanted to happen.

578
00:53:54,169 --> 00:53:59,169
Do you remember when you put that in? I was like this is unbelievable. I was like is
this real?

579
00:53:59,169 --> 00:54:00,169
They removed that from their page.

580
00:54:05,169 --> 00:54:16,169
I heard an episode of Bitcoin Uncensored where they described the Dao as a way of
spending money on things that you don't want.

581
00:54:17,169 --> 00:54:19,169
Because you put the money in and then they vote on it.

582
00:54:23,169 --> 00:54:30,169
It's a way of tying up your money to do something that you can't control.

583
00:54:32,169 --> 00:54:42,169
It has no revenue model. So theoretically, the tokens shouldn't be worth anything
different than the money.

584
00:54:42,169 --> 00:54:45,169
Well, they should be worth less because you can do less with them.

585
00:54:46,169 --> 00:54:55,169
They should be worth less. If they were worth less than the money that you put in,
they're not like an investment at all. Well, none of this stuff is.

586
00:54:55,169 --> 00:54:57,169
I know. But that's it.

587
00:54:58,169 --> 00:55:05,169
So Coindesk asked a bunch of people, including myself, for opinions on the Dao and
what Ethereum should do.

588
00:55:05,169 --> 00:55:15,169
And one of the things I said was that, well, I think people did some of that
reasoning, but the Dao told them, the people who programmed the Dao and everything,

589
00:55:15,169 --> 00:55:22,169
they told them that, well, if you don't like what the Dao is doing, you can withdraw
your own money at any time.

590
00:55:22,169 --> 00:55:33,169
But that turned out to be the attack vector that the Dao hacker used to just
withdraw his own money multiple times and just emptying it of cash,

591
00:55:33,169 --> 00:55:46,169
which is very funny. It was really truly a black swan type thing where all that the
Dao really was was a way of removing the key pair security of your money

592
00:55:46,169 --> 00:55:49,169
and instead making some weird other security.

593
00:55:50,169 --> 00:56:06,169
Whoever this hacker was, he knew Ethereum inside and out. But it was great. It was
like he had to exhaust the program stack and it was just crazy.

594
00:56:06,169 --> 00:56:20,169
If it wasn't an inside job, it was somebody who was really studying everything and
it really worked out for him too.

595
00:56:20,169 --> 00:56:32,169
I didn't think it was a good idea to study Ethereum, but I had because I could have
thought of the hack. That's a great investment.

596
00:56:33,169 --> 00:56:41,169
It's funny because in equilibrium, Ethereum would just be worth zero and you would
have been right not to study Ethereum.

597
00:56:41,169 --> 00:56:51,169
I really think it probably was an inside job, but I don't know. Just think about how
easy that would be if you see the ICO stuff.

598
00:56:52,169 --> 00:56:58,169
Just look at what happened with the Parity wallet recently as well where they just
emptied it.

599
00:57:00,169 --> 00:57:13,169
If you see this ICO fever and there's all this money, you know how it is. When you
are the guy working on the code, you know where the bodies are buried.

600
00:57:14,169 --> 00:57:23,169
Other people know nothing. They could never know as much as you did. So it's
probably an inside job, but we'll never know I guess.

601
00:57:24,169 --> 00:57:30,169
Yeah, I mean I would be surprised if it wasn't. You know what else I like about
Ethereum?

602
00:57:30,169 --> 00:57:49,169
I like how the board of, well, whoever is in charge, the Ethereum gods, they decided
that they were just going to erase the transaction of the hacker that stole the
money

603
00:57:49,169 --> 00:58:01,169
without any regard to their conflicts of interest in the project.

604
00:58:01,169 --> 00:58:12,169
It is clearly better for Ethereum that we should not have our money stolen, so we'll
just change the rules and that's better.

605
00:58:13,169 --> 00:58:18,169
But you see actually it was smart because, and this is something I pointed out in
the CoinDesk thing if I remember correctly,

606
00:58:18,169 --> 00:58:28,169
because I think the only way Ethereum can really differentiate itself from Bitcoin
is to be more, it's just about being different I think.

607
00:58:28,169 --> 00:58:38,169
They're just like we have better leadership, which is to say, I'm not sure how to
translate that, but it's something like more leadership or centralization or
something.

608
00:58:39,169 --> 00:58:49,169
And they like, I think they have to be different. You see like it would be a mistake
if they, because they don't want to be too much like Bitcoin because they can't
compete with Bitcoin.

609
00:58:49,169 --> 00:59:02,169
Yeah, well I guess that does kind of make sense now the way you put it that way. So
yeah, I mean, but any way that they can be different than Bitcoin would be bad. I
mean almost anything.

610
00:59:02,169 --> 00:59:10,169
But they are doing, they're doing like, I mean for a while I was just very confused,
but it started to become clearer to me like a year and a half ago.

611
00:59:10,169 --> 00:59:19,169
Like they're doing like a weird kind of, they're kind of like redoing the Ripple
thing where they're compromising a little bit and they, you know what I mean?

612
00:59:19,169 --> 00:59:33,169
Like they're getting people like Congress people, like the governor of Delaware or
whatever and like Larry Summers who was at Consensus 2016.

613
00:59:33,169 --> 00:59:36,169
Yeah, he's a speaker.

614
00:59:37,169 --> 00:59:43,169
And getting all these people to be like excited about blockchain and so they're kind
of like doing a little bit of a half and half.

615
00:59:43,169 --> 00:59:49,169
And I really don't think it will work, but I kind of get it a little bit more now,
even though I still think it's…

616
00:59:49,169 --> 00:59:59,169
Okay, there is nothing to get. They're just like, they're just randomly doing things
and you know selecting whatever is kind of working out a little better.

617
01:00:00,169 --> 01:00:08,169
The one thing, they do everything. That's one thing that's funny to me about
Ethereum is that they don't just like, you know like it's rational in all science
and all thinking.

618
01:00:08,169 --> 01:00:14,169
And especially in computer science to like do like modular, like one little change
at a time, right?

619
01:00:14,169 --> 01:00:23,169
But Ethereum of course, they do like the proof of stake, sharding, it's going to be
2% inflation forever.

620
01:00:23,169 --> 01:00:28,169
It's like every weird thing that you could find in the past a lot of times, they put
it all in there.

621
01:00:28,169 --> 01:00:32,169
And that makes it harder to criticize because you can't like one thing.

622
01:00:32,169 --> 01:00:39,169
It's like, it's perfect that they're getting involved with government because
Ethereum could have been a government project.

623
01:00:40,169 --> 01:00:52,169
It's like something designed by somebody who had no connection to like real world
uses at all, you know.

624
01:00:52,169 --> 01:00:57,169
I mean, I don't even know. I'm not sure.

625
01:00:58,169 --> 01:01:04,169
Well, certainly it's been said that like stuff from the government is like, what's
it called?

626
01:01:04,169 --> 01:01:07,169
I think it's called like waterfall or something where there's like the feature
matrix.

627
01:01:07,169 --> 01:01:12,169
They just have to build it to like, okay, will it have proof of stake? Check that
box.

628
01:01:12,169 --> 01:01:16,169
Will it have like whatever, monetary policy, you know, check.

629
01:01:16,169 --> 01:01:26,169
So, it like checks all the boxes but it ends up being like some weird thing because
it was always about checking boxes and not about like solving like a real world
problem.

630
01:01:26,169 --> 01:01:35,169
So, I think that that is a phenomenon that is known in government computer science
versus Agile, which is like Silicon Valley, which is just like iterate constantly.

631
01:01:35,169 --> 01:01:41,169
Do you believe that proof of stake could actually work in some way?

632
01:01:41,169 --> 01:01:49,169
Well, I've published numerous times that it destroys just as much value as proof of
work does.

633
01:01:49,169 --> 01:01:51,169
So, it seems to me to be totally pointless.

634
01:01:51,169 --> 01:01:57,169
And one, I have an interesting story about that, which is that I convinced Vlad
Zamfir of that in early 2016.

635
01:01:57,169 --> 01:02:03,169
And so, I ran into him at Consensus in 2016, which is again like now this is like
more than a year ago.

636
01:02:03,169 --> 01:02:07,169
And I was like, you know, hi Vlad, how are you? And he was like, hi.

637
01:02:07,169 --> 01:02:14,169
And I was like, so why are you still working on proof of stake?

638
01:02:14,169 --> 01:02:18,169
And I was like, didn't you agree with me that it's just as wasteful as proof of
work?

639
01:02:18,169 --> 01:02:20,169
And he was like, yes.

640
01:02:20,169 --> 01:02:23,169
And I was like, so why are you still working on it?

641
01:02:23,169 --> 01:02:29,169
And he was like, well, you know, some people think like it has different better
security properties or whatever.

642
01:02:29,169 --> 01:02:31,169
They were treated like some weird thing like that, you know.

643
01:02:31,169 --> 01:02:35,169
And this is the same thing that Jay Kwon did when I made the similar demonstration
to him.

644
01:02:35,169 --> 01:02:44,169
So, I mean, I don't think people really even thought it through like what it would
mean.

645
01:02:44,169 --> 01:02:48,169
I think I could have done a better job, even though I've already explained it like
three different times,

646
01:02:48,169 --> 01:02:55,169
about how proof of stake, you're just locking up a bunch of capital that is like
destroyed in an indirect way.

647
01:02:55,169 --> 01:03:01,169
I don't think if you really try to imagine what it would be like if people were
earning as much money as the Bitcoin miners are,

648
01:03:01,169 --> 01:03:05,169
for doing almost nothing, just leaving their money kind of sitting there.

649
01:03:05,169 --> 01:03:12,169
Then I think it's not – people don't really know that like everyone would be locking
up their money for like, you know, a year.

650
01:03:12,169 --> 01:03:14,169
It's like a long lockup period.

651
01:03:14,169 --> 01:03:19,169
So it's like the sheer amount of just capital that would just be trapped here is
going to be like, you know,

652
01:03:19,169 --> 01:03:22,169
two or three hundred times all the capital spent on Bitcoin mining.

653
01:03:22,169 --> 01:03:25,169
It would just be locked up somewhere.

654
01:03:25,169 --> 01:03:32,169
I mean, but see, the bigger thing is that it's not really about whether it works or
not.

655
01:03:32,169 --> 01:03:38,169
This is just the thing to make it more abstract and more confusing to like take
investors' money from them.

656
01:03:38,169 --> 01:03:40,169
So I think by the time they even figure – and it's like a hot potato thing.

657
01:03:40,169 --> 01:03:44,169
I think by the time anyone figures it out, like everyone has already jumped ship.

658
01:03:44,169 --> 01:03:46,169
Like look, Gavin Wood already left.

659
01:03:46,169 --> 01:03:48,169
Like everyone already left, right?

660
01:03:48,169 --> 01:03:53,169
Like I think even Vitalik is like going to leave like very soon, the Ethereum
project.

661
01:03:53,169 --> 01:03:56,169
So this whole thing is just like a weird kind of –

662
01:03:56,169 --> 01:04:02,169
We'll grab Dan Larimer where it was just like one thing after another thing and then
now out the door.

663
01:04:02,169 --> 01:04:05,169
It was like BitShares, like AngelShares, BitShares.

664
01:04:05,169 --> 01:04:08,169
Then it was like Steam and then EOS.

665
01:04:08,169 --> 01:04:12,169
So what do you think, like what's your prediction on like five years from now,

666
01:04:12,169 --> 01:04:16,169
do you think Dan Larimer will be on his like 15th blockchain project?

667
01:04:16,169 --> 01:04:18,169
Oh man, I don't make predictions.

668
01:04:18,169 --> 01:04:26,169
But I thought it was interesting that your criticism of proof of stake isn't one
that I've heard before.

669
01:04:26,169 --> 01:04:40,169
But I mean if there is a fork, it's like you have the same power on both chains.

670
01:04:40,169 --> 01:04:46,169
Yes, but what they claim, which I think is incorrect, is that you can –

671
01:04:46,169 --> 01:04:51,169
so they claim like a lot of weird things, but a lot of it is difficult to explain.

672
01:04:51,169 --> 01:04:55,169
But what they claim to be able to do is prove that you double signed ever.

673
01:04:55,169 --> 01:04:59,169
And so they claim to be able to enforce.

674
01:04:59,169 --> 01:05:08,169
I think my view is actually that the appropriate way to attack the argument of proof
of stake is to actually –

675
01:05:08,169 --> 01:05:12,169
they draw this weird distinction, the Ethereum crowd currently,

676
01:05:12,169 --> 01:05:16,169
draws this distinction between a short-range attack and the so-called long-range
attack.

677
01:05:16,169 --> 01:05:23,169
And so they say within short-range, they have some kind of way of resolving the
fork,

678
01:05:23,169 --> 01:05:30,169
which sort of like uses bootstraps off of some longer-term thing that they just
assume is there.

679
01:05:30,169 --> 01:05:35,169
And then the long-term thing, they just get some other way where you just –

680
01:05:35,169 --> 01:05:41,169
you have to – somehow you have to find like the little critical hash somewhere

681
01:05:41,169 --> 01:05:47,169
and that has to match the thing, and then you get that – you get something to work
that way.

682
01:05:47,169 --> 01:05:54,169
I think really the appropriate thing to do is try to get the critical hash, the
valid one,

683
01:05:54,169 --> 01:06:00,169
the one that Vitalik says is right, from – I think this is the best way to attack
proof of stake, as you say.

684
01:06:00,169 --> 01:06:07,169
I have the real hash that Vitalik says is the correct one from the genesis block or
from whatever when we started proof of stake.

685
01:06:07,169 --> 01:06:11,169
And then you move from there, and you rebuild the history from there,

686
01:06:11,169 --> 01:06:14,169
and you do that like a million times using your supercomputer,

687
01:06:14,169 --> 01:06:19,169
and you replay every single transaction that has ever existed.

688
01:06:19,169 --> 01:06:24,169
And then you have all the histories that are exactly the same, and I think that's
the way to do it.

689
01:06:24,169 --> 01:06:27,169
It's not – don't fall for their trick of the long-range versus short-range.

690
01:06:27,169 --> 01:06:30,169
Just go way back to the genesis block because this is all free.

691
01:06:30,169 --> 01:06:33,169
Oh, wow. That's a great idea. I love that idea.

692
01:06:33,169 --> 01:06:38,169
I've been dealing with this proof of stake stuff for a very long time, and you don't
want to be fooled.

693
01:06:38,169 --> 01:06:42,169
Either they add – what they want to do is sometimes they want to add,

694
01:06:42,169 --> 01:06:49,169
oh, we'll randomly pick people to be the next block leader, and that's a different
version of proof of work.

695
01:06:49,169 --> 01:06:51,169
You can just regrind that.

696
01:06:51,169 --> 01:06:56,169
It sounds like they're just lying about having proof of stake.

697
01:06:56,169 --> 01:07:00,169
It sounds like there's like a – like proof of stake is like a formality,

698
01:07:00,169 --> 01:07:04,169
but it's not really what's happening at all.

699
01:07:04,169 --> 01:07:06,169
Yeah, it's like asking Vitalik's house.

700
01:07:06,169 --> 01:07:09,169
Yeah, it's just proof of Vitalik.

701
01:07:09,169 --> 01:07:14,169
Yeah, you call him up on the phone, and you type in your product key,

702
01:07:14,169 --> 01:07:22,169
and he gives you back the nine digits or whatever to activate, to become Microsoft
whatever it's called.

703
01:07:22,169 --> 01:07:26,169
But it's not – that's a little bit unfair.

704
01:07:26,169 --> 01:07:29,169
I mean they have – there's like some legitimate theory to it,

705
01:07:29,169 --> 01:07:36,169
but it's devoid of its actual – it's the solution in search of a problem

706
01:07:36,169 --> 01:07:40,169
because as I've tried to demonstrate, it will –

707
01:07:40,169 --> 01:07:46,169
there's no way of getting around the fact that the next block is going to be worth
like $5,000 to someone.

708
01:07:46,169 --> 01:07:49,169
So they're going to be fighting over that to the tune of $5,000,

709
01:07:49,169 --> 01:07:51,169
and they're not going to fight over it for more than $5,000,

710
01:07:51,169 --> 01:07:54,169
but they're not going to fight over it for less than $5,000 either.

711
01:07:54,169 --> 01:08:00,169
So if it only costs them $4,000 to rewrite the entire blockchain from the Genesys
block

712
01:08:00,169 --> 01:08:04,169
with their supercomputer and just roll a couple things in their –

713
01:08:04,169 --> 01:08:06,169
I hope my monitor stopped working.

714
01:08:06,169 --> 01:08:07,169
Okay.

715
01:08:07,169 --> 01:08:13,169
If they just want to roll a couple things in whatever the parts that are random,

716
01:08:13,169 --> 01:08:17,169
and random is not proof of work in the magical thinking of the Ethereum community,

717
01:08:18,169 --> 01:08:20,169
they will do that.

718
01:08:20,169 --> 01:08:26,169
And so if that only costs $4,200, then they'll do that every time,

719
01:08:26,169 --> 01:08:29,169
and then everyone will do that, and then they will just have regressed to proof of
work

720
01:08:29,169 --> 01:08:33,169
exactly as Andrew Polstra wrote about in like 2013,

721
01:08:33,169 --> 01:08:35,169
which is where this conversation should have ended.

722
01:08:35,169 --> 01:08:38,169
The actual rubric for this is like how do they trick –

723
01:08:38,169 --> 01:08:42,169
how do they make it more abstract to trick investors into thinking that

724
01:08:42,169 --> 01:08:45,169
it's an incredibly deep revolutionary idea,

725
01:08:45,169 --> 01:08:47,169
and in reality it's just like a more confusing idea.

726
01:08:47,169 --> 01:08:48,169
Yeah, no.

727
01:08:48,169 --> 01:08:54,169
To me this is exactly like how Catholics say like, yeah, Thomas Aquinas,

728
01:08:54,169 --> 01:08:56,169
he was a great philosopher.

729
01:08:56,169 --> 01:09:00,169
And then people are like, oh, well, his book is 3,000 pages long.

730
01:09:00,169 --> 01:09:01,169
I'll just believe them.

731
01:09:01,169 --> 01:09:05,169
And when you actually look in it, it's like this is utter drivel.

732
01:09:05,169 --> 01:09:08,169
It's the same thing except with cryptography.

733
01:09:08,169 --> 01:09:10,169
Yeah, there is a kind of – it's funny.

734
01:09:10,169 --> 01:09:14,169
There is a kind of like a one-way hash function.

735
01:09:14,169 --> 01:09:16,169
It's like this exhaustion.

736
01:09:16,169 --> 01:09:21,169
It's like a denial-of-service attack on the reviewer because it's just like

737
01:09:21,169 --> 01:09:26,169
they can permutate the scheme faster than you can review it.

738
01:09:26,169 --> 01:09:28,169
Unfortunately.

739
01:09:28,169 --> 01:09:32,169
A permanent disadvantage to the defender or whatever.

740
01:09:32,169 --> 01:09:33,169
Yeah, exactly.

741
01:09:33,169 --> 01:09:36,169
That's too bad.

742
01:09:36,169 --> 01:09:43,169
And then all of the good ideas get drowned out in the noise, the nonsense.

743
01:09:43,169 --> 01:09:46,169
Anyway, I think that I have to get going now.

744
01:09:46,169 --> 01:09:48,169
But it was really great to talk to you,

745
01:09:48,169 --> 01:09:52,169
and I definitely want to read everything on your blog now.

746
01:09:52,169 --> 01:09:54,169
All right, cool.

747
01:09:54,169 --> 01:09:56,169
Let's keep in touch.

748
01:09:56,169 --> 01:09:59,169
If you want – it's like the blog is about like it's just me –

749
01:09:59,169 --> 01:10:01,169
it probably has not very much that you don't already know.

750
01:10:01,169 --> 01:10:03,169
But it's mostly the beginning.

751
01:10:03,169 --> 01:10:07,169
I just complained about 2.0 projects and proof of stake and stuff,

752
01:10:07,169 --> 01:10:08,169
which you may find interesting.

753
01:10:08,169 --> 01:10:14,169
But my project on Bitcoin Hivemind is like more about blockchain futures markets

754
01:10:14,169 --> 01:10:16,169
than you could probably ever want to know,

755
01:10:16,169 --> 01:10:18,169
when I imagine you'd want to know quite a bit.

756
01:10:18,169 --> 01:10:20,169
So there's a lot of cool stuff over there.

757
01:10:20,169 --> 01:10:21,169
Oh, okay.

758
01:10:21,169 --> 01:10:23,169
I want to read that first.

759
01:10:23,169 --> 01:10:24,169
Send me that.

760
01:10:24,169 --> 01:10:25,169
Okay.

761
01:10:25,169 --> 01:10:26,169
I will.

762
01:10:26,169 --> 01:10:27,169
Okay.

763
01:10:27,169 --> 01:10:28,169
Okay, great.

764
01:10:28,169 --> 01:10:30,169
Well, talk to you later.

765
01:10:30,169 --> 01:10:32,169
Bye, anybody who's watching.

766
01:10:32,169 --> 01:10:35,169
Yeah, some people will find this interesting.

767
01:10:35,169 --> 01:10:37,169
I don't know if they will or not, though.

768
01:10:37,169 --> 01:10:39,169
So thanks, everyone.

769
01:10:39,169 --> 01:10:41,169
Thanks to Dan, Daniel.

770
01:10:41,169 --> 01:10:44,169
And so maybe we'll do this again sometime.

771
01:10:44,169 --> 01:10:48,169
And good luck, everyone, out there in the Bitcoin world.

772
01:10:48,169 --> 01:10:52,169
May you live in interesting times, yes.

773
01:10:52,169 --> 01:10:53,169
Yeah.

774
01:10:53,169 --> 01:10:54,169
Okay, see you.

775
01:10:54,169 --> 01:10:56,169
All right, cool.