# Failing successfully: Crypto’s complicated story - Nenad Palinkasevic | DeFi Saver

- Channel: [ETH Belgrade Community](https://streameth.org/eth-belgrade-community)
- Date: 2024-10-07
- Duration: 29:12
- Topics: People & Blogs
- Watch: https://streameth.org/watch/yt-DpxMhQjooiU
- YouTube: https://www.youtube.com/watch?v=DpxMhQjooiU

## Description

Failing successfully: Crypto’s complicated story - Nenad Palinkasevic | DeFi Saver

## Transcript

hopefully you can all hear me um welcome to e Belgrade the second time in Belgrade hopefully you all had a great swim to come here um today I'm going to talk about what it means to fail successfully before I start on that subject uh a quick intro so my name is nanut last name hard to pronounce I'm the co-founder of defy saer uh solidity develop ER since 2017 and this is my second time coming here at e Belgrade essentially to you know rent about my feelings and my opinions on on the crypto industry so as I mentioned what does it mean to fail successfully well one of the things firstly that's kind of my favorite error to get when the you know task failed successfully the second thing it was kind of an answer to the question I got I got a few weeks back it was in in which areas as a community have we actually failed um given that we're all now at a you know ethereum conference in 2024 obviously we haven't failed in a sense that the industry is alive and well you know we we are all working on the on the new and Innovative Technologies we have here but what were the promises when we first started as an industry 10 15 years ago which we haven't kept up with so it to first to answer the question you kind of have to uh figure out what the right question is right so if we're trying to figure out if we failed at something let's first figure out what we were trying to accomplish all along so a peer-to-peer electronic cash system right that's that was the name of the Bitcoin uh white paper in 2009 uh building a decentralized world computer that was essentially kind of the the tagline for the the ethereum uh when when it first came out uh banking the unbanked or de banking the banked or any combination of the words with banked and unbanked right uh building the new Financial system digital store of value when we realize that nobody's buying uh coffee with Bitcoin then it was a store of value right and of course pumping on shitcoins all kind of worthwhile things to to try and accomplish but what was everything here it has kind of a different connotation right but it has a few thing in common except maybe the the last one pumping the shitcoins but as far as the the rest the serious ones um what we're actually trying to build with the world computer with smart contracts with decentralized peer-to-peer currency essentially we're Building decentralized Systems right we are building systems that are transparent and open source um we're Building Systems using cryptography uh we're building system that have uh privacy features and in General trying to trying to be trustless right and they're all built on those fundamental ideas and those fundamental ideas are actually like they came about and people were working on them way before even Bitcoin started right so before we try and answer the question like in what area in what in what areas we've succeeded in what we've failed let's do kind of a quick uh history lesson and jump back in time and see how it all got started right so 13.8 billion years ago uh the universe was created generally it was considered a bad decision and a lot people complained about it but um yeah I probably went too far ahead so so let let's jump into 1976 um the period about 30 billion years a few notable things happened but we're not going to talk about it now but an interesting thing happened in 1976 invention of public key cryptography right um while it doesn't seem like a huge Innovation right we we often don't uh talk about it like the the Bitcoin white paper for example uh the the paper called the new directions in cryptography were released and uh the initial idea to public key cryptography was created it was called the Dy Helman key exchange even though you see like three people in the picture uh the one on the left is Merkel people who are ceterum developers probably know about Merkel trees so that guy over there is uh kind of he created that concept right and then Helman and Def uh why that was a big kind of accomplishment was that it was considered impossible uh the problem of creating a secure Connection in a public domain where nothing is secure uh that problem was considered impossible until they they created a solution and solved it and in the current uh time we basically uh if you ever you know visit a website or use any sort of a messaging app you probably interacted with some sort of a public key cryptography obviously this is a ethereum conference so everybody actually has direct interactions with it with this concept we all have wallets the the wallets have private Keys uh we have public Keys essentially the the addresses so this was kind of the core technology that we use daily that was created by these guys that we don't often talk about right essentially they they built kind of the foundation of the The cryptographic Primitives we use right now one interesting thing to talk about when we go back to the 70s and 80s and even really uh '90s is that cryptography was illegal right it was uh basically uh deemed as you were developing weapons and and if you would to develop a cryptographic algorithm and share that um essentially the government the US government will say that you were trying to distribute uh Technologies and weapons uh one of the kind of loop holes that people back then were using they were actually like printing cryptographic code and algorithms on books and trying to argue that the the free speech and the first amendment is kind of protecting them to do that uh up until 1996 basically there was the struggle of essentially people wanting to work on cryptography while this sounds kind of unrealistic in in today's age we obviously see kind of similar patterns with with with what we have right now um we have a rise of protocols like uh pgp pretty good privacy uh which basically realized that the only only cryptographic algorithms were available to governments and big corporations and they wanted to develop systems that regular users could encrypt their messages and have any sort of privacy online right so uh there was emergence of a group called Cipher punks so it's not cyber punks it's Cipher uh Cipher basically means like an algorithm or a tool to encrypt or decrypt uh also it's not crypto punks that's the the nftd so Cypher punks uh if you Google that it will say an individual who is strong believer in an imunity and privacy while using the internet it doesn't really paint the whole picture essentially it was a group of Geeks in a room which is kind of the most terrifying thing you can have as an enemy and the the US government uh quickly found out uh they quickly moved out from the the mom's basement or the room and started a mailing group where people wanted to develop share and distribute uh cryptographic algorithms and protocols so the users everyday users could have anonymity privacy and obviously a lot other things that that we get with it the whole idea was that uh if we let the government be the only distrib distributor of uh cryptographic secrets and they hold essentially all the keys they will hold all the keys right nothing will be private and obviously everything we're doing today would not be possible uh there was also the mailing list where where people were like I said talking but there was a u Cipher punks uh Cypher Punk's Manifesto essentially kind of a document where they wrote all the different ideas and how they see their Community kind of battling and and what were kind of the the core principles I put here kind of just one quote from it uh but as you might see um like privacy and anonymity was something that they care deeply about a long time ago and now in 2024 we obviously see kind of the stuff they were worrying about and fighting for kind of coming together and actually being a worthwhile battle right in today's age the our data is worth a lot and mined by a big Corporation and governments and we really need to kind of fight to have Primitives where we can have privacy anonymity online okay so we talked a little bit about kind of the the history even before Bitcoin and we talked about the the cipher punks right uh even even before that or kind of in the middle of creation of Bitcoin and Cypher punks there were a lot of attempts to create a peer-to-peer digital currency or a digital currency right uh even in the early Cypher Punk meetups and ideas they were talking about Concepts like that one of the The Cypher Punk's early members was actually a creator of ecash and so on one one thing that and why with the year 2009 and the Bitcoin white paper is so critical and we often talk about it essentially because all the other um applications before that trying to do the same thing failed and essentially they were missing that secret ingredients and that was decentralized trust right because sooner or later every uh other of the the attempts before Bitcoin they kind of failed uh the they were shut down they didn't have uh they had some some aspects of cryptographic Primitives there but they didn't solve the the key feature and that's decentralized trust and that's something that the Bitcoin white paper introduced in 2009 and obviously you know 15 years later we we still have a Bitcoin as a kind of decentralized currency that's working really well um obviously we were at e Belgrade so I'm going to talk about ethereum also I think kind of the uh second largest impact in this area was the ethereum white paper in 2014 um if people here haven't read it uh I highly recommend it it's actually even if you're not a technical person it's kind of a really nice read and and you can get a lot from it uh essentially as I explained to most people the core idea was uh Bitcoin is used to be a digital currency uh obviously the blockchain technology and having decentralized trust is something that's worthwhile in other Industries as well and that was kind of the core idea of ethereum let's build a platform where we can create all sorts of use cases where it requires decentralized trust okay so one of the reasons I mentioned the Cyber punks as well was if we really think about it it was not just the uh cryptographic Primitives and the Technologies they built like the public key encryption cashing functions and so on uh the technology was obviously uh very uh fundamental for us to to have cryptocurrencies and crypto technology right now but one of the interesting points is that we couldn't really even start to build any of this if 20 30 years ago uh cryptography was still illegal right so one of the the big uh kind of struggles the The Cypher punks did for us is actually a lot of them you know went to to courts uh went to jail because they really believed in the the aspects of anonymity privacy and decentralization they they really fought to to build and leave us the building blocks so the Next Generation can build the the Bitcoins in the eum okay so let's back to the let's get back to the original question and that was have we failed and because we obviously haven't failed that much uh let's see like have we lived up to the expectations and essentially to to put it in short um my opinion and I'm overly positive about this is that uh we have lived to expectations I'll talk about the shitty Parts afterwards a bit because that's always interesting to mention but one one of the things if you look back to The Cypher Punk movement and how that was kind of a really small group group of people who were using the technology and actually cared about it uh now we have you know millions of people around the world having cryptographic wallets having private and public Keys having things that are in self- custody right uh the crypto industry kind of made people care and made people use all the things that the cipher punks were talking about back in the day not only that uh it's kind of an interesting thing that we kind of take it for granted but nobody's really questioning the legitimacy whether or not a cryptocurrency should exist right now it's kind of a thing that obviously it's a think and uh we kind of take it for granted that you know 15 years back it was kind of this crazy idea that nobody believed in it so um my opinion personally we are kind of pushing the the cipher Punk's Vision a lot further obviously we can go back and think about all the scams and the Hypes that this industry created but all that provided also the the funding and the Brain power for people to develop uh New cryptographic Primitives right uh I think in no point of time in history uh did people invest you know more money time and power into Building cryptographic Systems uh than now right because we have the cryptocurrencies okay so obviously like I mentioned before like there are some bad things and we we all know about it um um there I usually don't like when I'm speaking to someone who's new in the space I don't mention these stuff uh I'm trying to get them in the cart right but when we're in the kind of room of like I might like minded people and people who already kind of know the core values and ideas it's always good to look back and actually talk about the the stuff that are not so great right so if we look at the state you know banking than banked we can kind of look and see like is this technology currently used by you know first world people the most uh rich people the most or kind of tech savvy people or is it used by actually people who do not have access to the banks right we we can talk about obviously we had uh and still have you know a lot of hype and scams and the other Industries kind of looking down sometimes at C to as something that uh is kind of filled with uh shape hype and scams basically right um so all that's kind of real and we cannot uh just talk about decentralized values while at the same time in the current ecosystem we we see a lot of these things as well one thing that I wanted to mention about because you know in the past year basically everybody was talking about you know ETFs and it kind of uh ties into the that concept of like going mainstream right kind of the the Wall Street people finally accepting us so you kind of have two uh different currency in the ecosystem of like is it this is it good or bad right obviously it's good for shortterm for the price obviously everybody on crypto Twitter is all hyped uh about it but is it the the core thing we wanted to accomplish in the cyper Punk's Vision like uh did we want people to actually use decentralized open source permissionless blockchains or did we want your grandma to invest through an ETF and pump the price right obviously that's kind of the definition of why I said you know failing successfully because you cannot say that it it's a success if we all cherish that an ETF is created but obviously that's a big step forward for the industry and kind of the recognition of everybody what I'm trying to say here is basically that in my opinion it is temporarily a good thing but it isn't the main goal like we should all be aware that um people actually owning cryptocurrencies and interact in on chain with the system is kind of the way it's meant to be used and it's on us to create uh the world where it's actually an easier solution and a better solution and not kind of rely on the mainstream Wall Street kind of types to to accept uh cryptocurrency uh I I mentioned before you know banking them bank then kind of an interesting thing that if we look at you know uh some of the countries now that have you know inflation uh one of the most used Technologies there is actually you know throne and usdt um obviously you know we're at a ethereum conference so I'm guessing not a lot of fans of Throne so I can easily you know talk bad about them here but let's just say they're not really you know big innovators in this space and usdt is not exactly the decentralized stable coin we were promised one of the things I would like to mention is that you know people in the third world countries or in countries with the hyperinflation don't really care right if if it solves their problem they they will use throne and other any other Technologies uh one of the reason why that's a problem is we as a community should build you know better technologies that actually have aspects of thisin ization and trustless and provide them to the people as kind of a better alternative obviously if they're Stu using trone and usdt we have failed in that area and I I put here a graph of Terra Luna okay it's not about teruna it's about the turkey but you can obviously see the graph is kind of exactly the same right uh the turkey is all fine and well for 1,000 days and then Thanksgiving comes and most of the you know shortlived uh blockchains and and hype projects we saw in the space kind of had you know the same graph uh price goes up people are happy nobody thinks about does it have any real value and then Thanksgiving comes and you're the turkey okay uh I actually wanted to talk when we talk about oh there's a lot of hype and in this area this is one of my favorite lecturers probably ever U people who don't know him this is andrees Antonopoulos one of the early Bitcoin Advocates uh in 2017 he actually had this great presentation uh everybody should check it out it's called blockchain versus right and as he mentioned in the presentation they both start with the B so it's kind of hard to to distinguish with it but he had kind of a a nice little heris how to determine whether it's a blockchain or it's a if you can swap the blockchain word with the data base and it sounds exactly the same it's probably right one of the things I found it interesting given this talk was kind of the early talks I listened to when I was getting into the space that kind of the the hype words have changed right in 2017 people were starting to use the word blockchain kind of uh putting everything and anything uh on the blockchain and kind of using that hype currently we you know moved on past that hype term we're using different ones but kind of the the core concept is the same you can kind of easily tell is it blockchain or is it by essentially seeing if it has any uh fundamental values and we talked about the the cipher punks like does it have any values of trustless Open Source decentralizations if not it's probably right so when talking about I kind of had to put a couple of the key stars in the past few years the the bullshitters here essentially just to say you know them we can see a few nice pictures of here's thean in Montenegro enjoying uh the summertime you can see the three Arrow capital guy is also enjoying Sam mman freed right uh here he is on the trial right why I put here false profits in crypto it's one of the kind of faults in the industry that we often kind of gather around people who seem that they know what they're doing and that provides kind of a shortterm uh hype and value right none of these people actually really had any sort of resemblance to the cyberp punk Vision right you know building a centralized crypto exchange like SBF did and trying to hide where the funds are and essentially building the complete opposite of what the the industry was founded to do and then we're surprised when he rcks right it's kind of on us on that one and also then we're surprised when other people are seeing that and kind of determining that the whole industry is like that as a community we definitely should be really careful about who we give attention to because those people will be kind of in the forfront and representing all of us okay I definitely didn't want to end this presentation on a down note talking about isbf so one of the positive things right now that I kind of all over everything for the past 10 minutes is technology is getting better uh what I mean by that is if you kind of realistically look and if I remember how I was using ethereum you know 7 years ago uh 90% of the stuff I'm using today didn't really existed before um the proof of stake for instance that we were promised you know years ago and and a lot of development time was put into developing it is live and it's working really well everybody is saying that you know ethereum is a proof of work chain that is bad for the environment and uh wasting a lot of resources they don't have they don't have kind of any value to to say it anymore um scaling and l2s are now a thing right uh we have the centralized scaling solutions that we were kind of looking forward to build years ago and the cryptography and you know the the ZK proofs and and all that kind of uh came to to a point where we can actually perform and build these things now I I would be kind of I have to say about the the l2s one thing as even though it's a great Tech we have to keep things accountable that uh I was talking about the cipher Punk visions and currently most l2s aren't full fully decentralized right so we have to keep them accountable that even though it's on the right path we we have to essentially uh have things that that abide by by the the initial Visions or will quickly end up doing kind of the blockchain and then you put in the database and if it's the same if it's just a central server right we we didn't really do anything uh the ux is actually better that's essentially became one of the the memes in in the in the past uh I don't know 10 years right that the crypto ux suck it's actually getting better right we we see a lot of account abstractions and uh a lot of ways that new uh people who are coming into space don't have to be cryptographic experts to actually use it obviously security and stability each year we're getting better and better in that as well so to wrap it all up we definitely haven't failed right um there's a lot of messy Parts here there's a lot of things that we obviously didn't get quite right but one thing I would like to kind of be the main point of the presentation is actually to look back and think about the uh Cypher Punk Vision that came before us and the people who actually fought for cryptography to be legal that made a uh that made kind of a community which enabled the whole crypto Community to came about and it's essentially our job and if you think about it like The Cypher punks of the current age are actually us is the crypto community and it's on us to kind of leave uh for the future generation and open trustless decentralized system they can build on top of because if we don't do that that the Next Generation or Innovations will not come that's it for me um thank you all for listening um yeah