# 'Vitalik & Tyler Cowen talk Ethereum' - Vitalik Buterin & Tyler Cowen

- Speakers: [Vitalik Buterin](https://streameth.org/speakers/vitalik-buterin)
- Channel: [ETHGlobal](https://streameth.org/ethglobal)
- Date: 2021-10-09
- Duration: 1:17:14
- Topics: ethereum, ethonline, tyler cowen, Vitalik buterin, marginal revolution
- Watch: https://streameth.org/watch/yt-mdDEzctwve0
- YouTube: https://www.youtube.com/watch?v=mdDEzctwve0

## Description

Vitalik Buterin, Chief Scientist at the Ethereum Foundation, discusses the capabilities of Ethereum tech with Tyler Cowen, reknowned Economist and Director of the Mercatus Center.

## Transcript

all right we are just about to uh resume so uh given our lag i'll just wait five more seconds before everybody gets set up on the live stream um welcome tyler welcome vitalik um to all of our audiences thank you so much for being with us for the full day here this is our last talk and this is a talk i'm super excited about on my end and uh we are super thrilled to be joined tonight by uh tyler metallic tyler is a professor of economics at george mason university and uh the author of a popular blog called marginal revolution and he's also the post uh host of the podcast uh conversations with tyler he has described his personal moonshot as uh using the internet to ferment broad enlightenment and we hope that tonight's talk will aid in that goal in a small manner and vitalik should not need a big introduction to our community uh he is the inventor of bitcoin magazine and now he spends his time as a chief scientist at the ethereum foundation so in 2018 uh vitalik joined tyler for an episode of his podcast conversations with tyler and uh we want to think of this conversation as a spiritual successor to that episode uh but with a slight difference where the tables will be turned around a little bit and this time it'll be vitalik during the interviewing so without further ado i'd like to welcome tyler and vitalik on stage and i'll let them take off with their conversation welcome thank you very much um it's uh good to be here um so you know 2020 has been is such a fascinating year and i think it's also been fascinating in part just as a culmination of a lot of trends that have been happening for the last 15 15 years 20 years um you know we've been seeing with uh trump and other political things happening the last four years i'm just comparing it to the financial crisis that we had 12 years ago uh some of the techno politics uh that um that we've had looking at you know snowden back in 2013 the of copyright wars that were all of the rage and the zero zeros um so i want to wanted to start by kind of taking a look back at some of what i call kind of techno idealism more broadly right like i think many people view um what the crypto space is doing as a kind of continuation of this project of techno idealism and there's there's different kinds of techno idealism right there's a techno libertarianism with uh john perry blur was a declaration in 1996 and they're trying to establish the internet as a separate space away from government intervention and there's a techno egalitarianism and nobody knows that you're if you're a dog um techno world peace can we just uh make everybody more connected at techno efficient markets so with your and alex's post uh from a 2015 on the end of asymmetric um information and you know there's been all of the ways in which the the world has responded to these ideas of people trying to implement these ideas so taking a look back um roughly the 25 years since the declaration of cyberspace independence and ask the question where do you see a techno idealism in general and i just focused on the kind of info tech particularly as having succeeded and where do you see it as having failed well if we look at the last eight or nine months i think we've seen a validation of what you might call well capitalized big tech in the united states most prominently amazon people now trust those companies they've way outperformed their competitors it's good for tech it may or may not be good for crypto right i think we have also seen a validation of using electronic media including twitter but much more broadly having scientists communicate with each other that's a very old story you hear that at the beginning of the techno revolution that this is going to happen this is the year where it really mattered so we've seen a great deal of progress in understanding kovat19 and that has been because of tech would not have happened in any other era so in the last nine months those are the techno utopian that look much better if you're asking me about last 25 years i think what has been under predicted is just the resulting increase in disorientation and how poorly we as human beings deal with the world where so many things are transparent everything is said about everyone every rumor is out there and we just don't sort it very well and in the meantime we blame it on companies that maybe is the biggest trend over the longer time period mm-hmm um so peter here here's a question uh peter thiel said um a couple of years ago that uh ai is communist and crypto is a libertarian what do you think of that statement i don't think we know yet so we don't know what role crypto will play in the world's future crypto looks libertarian now i'm happy about that uh but the story is far from over ai is in some ways totalitarian so surveillance seems to be here to stay very few citizenries are opposing surveillance but oddly enough having more surveillance while i oppose it it may in some ways give governments room to open up other liberties for people in part china feels as free as it does because there's surveillance there's not a policeman on every street corner it's not going to be the case as in the old days of behind the iron curtain you had to worry about someone coming up to you and grabbing you by the collar and hauling you away so surveillance has some aspects that make autocratic societies freer the end of uh imperfect information in another way i guess um so one of the um interesting things um that's been happening i think both in the crypto space and in the world at large uh is there's a conversation about governance uh so within the crypto space and for for example you know we've been seeing um things like some of these discussions kind of in zcash for example where they as a community are trying are have decided to extend to the 20 portion of their block reward that goes to funds protocol development bitcoin cash has been trying to create a yet developer fund but it's much ended up being a much more acrimonious and unsuccessful process with a lot of opposition and in the ethereum community we've been having these git coin grants experiments with quadratic funding um sometimes the governance has even blown up uh so there was this uh fun incident a few months ago where justin's son tried to pull off a kind of hostile takeover of the steam network and it's a governance mechanism and the community reacted to this by making a fork of steam called hive where they actually deleted the money of justin sun and everyone else who participated in the attack right so these things are all happening in crypto and meanwhile in the real world and especially over the last month or so we've been seeing a lot of drama around twitter a lot of drama around social media platforms how those platforms should moderate the challenges that those platforms have in be basically trying to be what i call credibly neutral and not just being fair but actually succeeding and kind of convince convincing the large uh massive people that um that they're fair um so i guess the first question would be is just directly twitter focused which is like if you were jack or in the case of facebook if you were mark um no what would you do um you know what kinds of uh how would you govern moderation i guess and the broader question is and if might there be potentially enough common trends between the things that crypto the crypto space is figuring out and the things that the larger space is figuring out and might they end up interacting with each other many different questions are in there let me take it in a slightly different order sure if i think of crypto governance right now i think there's a great virtue and a great problem and they stem from the same factor there's a massive subsidization of resources moving into crypto because these successful assets have portfolio values that were not foreseen initially so just an incredible flow of wealth into the crypto space that attracts smart people and a lot of experimentations because of those portfolio values which doesn't at this point require that much creativity from crypto you can just call some bitcoin if a bunch of companies but one percent of their portfolio and bitcoin you know my goodness the value uh can go up a lot more same with ether that subsidization also means you don't have discipline on your governance experiments so people can try all sorts of things it's hard to tell what really works because there's just this flood or wave of wealth coming your way so uh might in a sense be better for crypto in some ways not to have that wave of wealth washing over it so i don't think we'll know for a long time which of the mechanisms do well there's not like a competitive market discipline it would be like if companies did venture capital and it just so happened every year you know billions of dollars of matter reigned on them from heaven they would get very sloppy they would take some more chances some of those would work now you asked about facebook and twitter and i think always of collagi when these topics come up my historical perspective is that media have always been unfair in every society the most part they've gotten away with it they don't foresee a near-term future where say there's a truly decentralized crypto run version of twitter i think hardly anyone cares other than people like us i do my self-care i think twitter will continue more or less as is and it will make whatever political finances are needed and if joseph biden is elected i think the democrats will set up a new regulatory agency to cover facebook and twitter it will somewhat cartalyze the sector or cement them in as incumbents will have higher transactions costs they'll be more labor-intensive less innovative we'll ultimately get a version of them a bit like what we have now except they'll be more risk averse and it it will be bad but i think it's more or less a stable outcome just ordinary say american users i don't see them leaping to an alternative because there's some complex argument about how it's more balanced or freedom of speech or no one can take it away from you um nothing in the previous history of media leads me to think an outcome like that or even the current status quo is unstable i think some version of it will continue of course it will change and evolve but i don't see crypto per se having a major role in the evolution there not soon i think just sorting out internally which governance experiments are working will be the main task of crypto like answering is it just a portfolio instrument which is fine i'm all for that is there something you can do with it transactionally that will truly be transformative and the two possibilities are somewhat at war with each other transactionally you want it to have at least a predictable value but probably also a stable value for your portfolio you want it to behave in ways not so well correlated with other assets and that means a certain kind of instability or unpredictability like here's the weird asset who's beta you don't really understand and that's why it's a great edge but there are these two forces plugging on crypto i don't know which will win i'm convinced the portfolio demand is real and enduring uh but i'm not at all sure which of the governance and transactional experiments are going to work out i think no this this just makes me wonder like if if it is the case that um you know in the real world there's just not that many people except for a few idealists that care about like basically the big platforms being you being neutral in any sense then like does that create some kind of pressure for you like base crypto projects um as well to also end up abandoning those values in the long run like if there is an opportunity to abandon them for competitive advantage again that's a tough question so i'm not convinced long-run future of crypto is libertarian there's always a way to co-opt crypto and the key question will be when crypto truly tries to interact with the banking system not just at arm's length how will regulators respond will they let banking and commerce in some way merge a long-standing dispute in the united states or will crypto be forced to play by the regulatory rules of the game which i suppose i think is somewhat more likely and then crypto will solve a bunch of internal problems maybe you use it to send remittances to mexico it will be contained in a kind of conservative thing just on the twitter question like you and i right now we could go to mastodon and say what we want to each other we don't do that right we read each other on twitter and we're worried about this problem so i think the rest of the world is somehow gonna react and make a change that's fair um i mean one counterpoint is that there has been this move from twitter to sub stack that's really accelerated this past half year and so it does seem possible for i guess new things to start or like what's your take on why snap stack has been getting popular i think it's people trust the media less typically for good reason uh there's a sense of censorship but i don't think most of it is from twitter i think most of it is from mainstream media and just people learning as they have with crypto assets like hey i can make a lot of money this way which was not vocal to them before so i think there'll be a lot of proliferation and twitter will be less central than it is right now there'll be a lot more alternatives simple things like whatsapp but improved version of whatsapp right will displace a lot of twitter attention clubhouse will displace a bit of twitter attention so i'm an optimist about more diversity more choice it will limit the ability of twitter to censor and that will in turn keep twitter is more or less a going viable concern rather than some stranger centralized version of it where it's not really run by anyone i mean even in the space you work in it seems to me there's somewhat more governance than there was two years ago and i asked you this two years ago i said as ethereum services become more popular you know will there be more or less governance and i think my sense from a distance is things like upgradeability matter more and there's more direct involvement and discussion the kind of dogmatic it's just what the algorithm spits out that seems weaker than it did a few years ago when you have you know the bitcoin the bitcoin purists and it has to be bitcoin cash and so on i think governance and institutions are winning in what is a necessary and probably healthy way and you're a part of that congratulations but i think it's a little different than your original vision no this is true like i mean one like i think a few years ago well there was a back when uh i was like i was first starting on my kind of journey of uh researching crypto economics and uh back when i guess i knew less than we knew less i definitely had more hope that to the extent that governance is necessary there is like some closed formula that could just deliver something close to a good result in a very robust way the same way that say we seem to have for you know decentralized consensus with like you know proof of work and and proof of stake in all these academic algorithms that are provably robust up to one-third fault or whatever that we've had for 25 years um but as i've just studied the issue and studied the um economics of the issue over time it definitely has become clear that there's this kind of fundamental instability in the governance that especially happens once your models start admitting the possibility that the different actors in the game are colluding with each other um and so basically something robust that you almost can't even be passive it has to be active to some extent like with the example i gave where the um attack on steve by justin sun goddard got responded to with the community and rising up and forking an ethereum 2.0 it's fundamentally an act of governance and institutional creation in some ways it's like the american constitutional convention uh and not very algorithmic so i think maybe the future for crypto is you have a bunch of very good institutions evolve often focused around individuals just like jimmy wales it's still important for wikipedia no matter how much he does or does not do on a given day he's like a certifier of trust and then in the nooks and crannies of the systems you'll have micro parts that do say all internet transactions with no oracle problem simply on the strict terms of the original vision but whenever you have to interact more with the so-called real world it'll get back more to governance and trust people will trust say you and the foundation and ether more than they'll trust a lot of other institutions again not everyone a lot of people just will never understand what you're doing but i think we're in that world already and we're just going to see this ongoing proliferation of trusted kind of micro institutions but they have a very long reach in terms of what they enable people to do now this is uh um definitely a uh kind of future that i s them that i see as being quite possible um a present you could argue right i know with theory of 2.0 is not here in the literal sense but it's on the drawing board pieces are in place right it's literally on a test net so yeah when i read your faq is like on sharding and on uh everything you're doing to make it work better proof of stake just feels to me like this is an institution how it works is not being reduced to a small number of dimensions that to me is what is striking yes so one um other thing that's uh just interesting about both crypto and of centralized tech is the somewhat differing relationship between i guess non-governmental projects and government or good incorporations and including non-corporate things and governments that we've uh that we've seen and i mean of course um you know it's like government governments being the kind of stolen primary top dog is definitely not the 10 000 year historical norm and historically we've seen lots of things have enough intersecting authority including various kinds of religions and plenty of other of other things as well um but one thing that strikes me as interesting is that like if you look at the discourse even just going back to twitter for a bit briefly right like there is still a mentality that kind of public and governmental are the same thing um and because twitter is a kind of quote public concern and twitter affects lots of people um there therefore it should be you know the government meaning the us government as an expression of the will of the people actually meaning the us people that should have to kind of somehow have um have a say on the whole thing and i'm of course not from the us and i'm well i haven't spent more than half a year in any single country since the 2013 and even the crypto community is just very naturally global like in any non-pandemic year you have people seeing each other in random countries every two months and i've referred to twitter before as kind of the world water cooler right so you know you have people from all sorts of places just kind of seem like they they're standing to all two meters away from each other just you know talking to each other each other in this big cacophony and you have you know people from the us say you got you know the wonderful diplomats from china and you have all sorts of people from india and there was that beautiful moment a couple of years ago where the government of iran tweeted out this trenchit message as saying israel is a malignant cancerous tumor in the west asian region that has to be removed and eradicated and an israeli embassy replied back with a meme from mean girls asking why are you so obsessed with me no that moment was just kind of great but you know just thinking about like who uses twitter like it seems clearly that just from a kind of institution design perspective it's like the us as a country is the wrong actor to be uh kind of having ultimate control of the thing and i guess like this is why for me you know given the kind of imperfect world we live in like i'm i actually think kind of jack calling the shots in the show is is less bad than a lot of other people think um but the kind of the broader thing right is that you do have these centralized platforms that are serving a global audience um but at the same time they are based in a particular country on the other hand you know you have crypto projects that are serving a global audience and in a lot of cases they actually are global and in a lot of cases you can argue like you know in the case of bitcoin like 60 of the miners are in china but then most of the developers are in the us um and some in europe uh so yeah how do you see this tension uh proceeding in the future i think two big winners from the internet are the united states and china the internet means a significant increase in one kind of america's soft power so some of our leaders have destroyed some versions of our soft power but just globally people demand debate american ideas so a big movement in iran now i read is me too where did that come from right uh throughout africa how people react to black lives matter with a lot of diversity but that's a major issue so i think once the immediate moment passes united states will see twitter and the internet for a major source of soft power cement in english people who are active in the united states intellectual community have far greater global reach than say germans do and that's been a relative shift compared to 15 or 20 years ago the u.s will accept that i think other nations already have accepted it we won't admit it it seems to me we're already there we just need to let our mental models catch up to a world we're already living in so if you're a german public intellectual your relative status is much lower actually you probably won't admit it you don't have the power to do a significant defect from the broader system in fact you'll probably be more likely to play by its rules of the game and to you matt iglesias will be a big deal even though in 1968 he never would have been he would have only been a big deal to other americans or maybe canadians yeah no so biology is uh talks about that of the difference between physical america and digital america and so like for example i personally write i've spent once again in normal years less than one sex of my time in physical america but would you consider me part of digital america yes absolutely you can talk about any american issue with great facility and obviously you've totally perfect fluent english that's all you need so i guess this is interesting right because this gets to this kind of philosophical discussion about you know what kind of quote america even uh like even is like if it's uh if it's not just the company in the jurisdiction um and it's not just the uh and it includes these uh uh tech platforms and it includes people who just kind of understands this particular bundle of cultural issues that are um that are affecting this particular kind of bundle of people like no you know and what is america and what is any country and is that is the answer different from different countries i think it's different for every country keep in mind america is going to get a big boost once go of it is over because work from a distance is now much more feasible even if it's not all the time or every day so real rents for a large number of people are going to plummet whether you stay behind rents in san francisco are down 31 or whether you move to austin miami nashville wherever so that's this big boost the standard of living it'll make people happier uh it'll be a big shot in the arm to the country and then american soft power is stronger and at the same time will be more of a mess but i don't see what there is about globalization that overturns that and then if you think that u.s and china will continue to evolve separate internets china remains a bit removed from that equation and that actually cements the relative status of the u.s in some ways and china will take cambodia laos and some other nations with it but if you're say singapore new zealand uh you're going to play in that big network and basically accept its rules mm-hmm this is a true i mean i guess um like if i'm a singaporean or new zealand or whatever intellectual and i interact with this cloud as part of these uh internet platforms then in i guess you know you could say that i'm part of the uh i'm part of digital america but i guess the question would then be that you know to what extent does uh like what i guess to what extent is it legitimate to call it i'm you know digital america as opposed to saying you know the digital angular sphere um even like to what extent does um a physical america or any kind of core end up getting uh ends up actually becoming kind of dis disproportionately the center of the network i think it's fine to call it anglosphere but still so much of it will be american the emphasis on entertainment more american than british if you look at important internet writers say from britain andrew sullivan moved to america a long time ago the kind of independent number of truly british kiwi australian voices i mean in absolute terms it's a lot of people in terms of the gravity of influences you would measure in a network model it's striking to me how american it stayed and what the incentives are to move to either american centers or london or possibly singapore uh they'll still be strong incentives for intellectuals to cluster and aren't that many places they can do it i think london also is a big winner from this this is true um in the you know the the the london uh be becoming a kind of cultural outpost of uh something that you know of digital america is definitely a fun historical irony to some extent and you see london picking up on american wokism and political correctness to a considerable degree and you don't see that on very much of the european continent and that division as outlined by bruno macheche on twitter i might add a portuguese fellow who writes in english on twitter uh i think that's a big deal brexit was a more significant event than we realized in addition to the obvious changes in the uk or at least england deciding it will be part of the anglosphere and continental europe deciding it won't and on all sorts of other issues like attitudes towards islam there's going to be this split which i think is here already yeah no this is an on i made a comment on twitter at least once maybe multiple times where i said that i think in the 21st century people will be divided um not less by geography and more by language um so and gender also it's a separate point but i think those are the divisions that will matter okay um so i guess uh back to uh kind of crypto discussions um a little bit uh so i think a lot of people especially those who are somewhat far away from the crypto space so see it as being primarily a financial thing you know you have bitcoin as an asset you have ether as an asset you have both of those systems as a system that you can use to pay people and you have stable coins there's also a potential for um you know blockchains uh and other uh kind of what we call crypto technologies you know zero knowledge groups being a really big one as being a base for other like non-financial applications for example um do you see any potential for non-financial uh applications that use blockchains to get anywhere um and if so are there any particular categories that you see as being more promising well keep in mind as an economist to me financial things are real things automatically anyway but i think just enabling new classes of transactions so if you're going to run micro prediction markets and i'm not convinced they will take off but they might possibly you would want to do that on a global basis and you would do that using crypto and crypto will be well geared to support that kind of market that i could well imagine happening not this year but reasonably soon as virtual reality develops there are semi-autonomous worlds within virtual reality if that happens i'm not an expert on that topic but again imagine it happens you could very readily imagine crypto being very well suited in its current evolution to enable this very new class of transactions so those to me could be big deals and they're not quite next month things but you know we will live to see that happen so i think there's a lot of promise but again we're in this weird governance mix i don't think anyone has a very clear sense of which of them will work and even simple questions like thing aside krypto why don't we have more prediction markets you can argue that until you're blue in the face i don't think there are good answers i've never met a person who really understands that question right no it definitely is a puzzle and especially a given how like the amount of trading that happens on a regular financial market as i understand is like much higher than all of the no trade theorems would end up predicting then you have all these other markets you would think it's obvious they would exist oh a futures market in gdp in unemployment they're not there in the 1980s they tried a futurist market in the cpi everyone was convinced that would be a big hit when proof now these days we have lower inflation you know we we don't need it and you know the question of missing markets one of the central questions of economics we don't understand it well as economists at all so a lot of the future of crypto i think is tied up with what are your micro foundations for why these markets are missing it could be it's something so fundamental crypto won't overcome it that's a more bearish scenario for crypto it could just be they need the right nudge they need some you know oil and grease in the wheels a ways of avoiding certain regulations ways of globalizing more easily and then crypto will give us this huge takeoff [Music] that's uh definitely true and we've been seeing this uh kind of small but growing explosion in uh prediction markets um on ethereum in the last couple of months and i made a i made a bet on the uh on the trump market i won't say which side but i'm you know i'm contrarian but not super contrarian so you can probably guess which side that is um the um you bet on hillary clinton to be next president she is in those markets still this is no no i bet zuckerberg come on um it's it's like they're definitely getting easier ease of use has i think been one of the kind of drawbacks for crypto historically right you know you have to interact with this blockchain you have to send one transaction and then you wait 14 seconds for it to get included and sometimes it's four minutes and then you send another transaction um ironically enough by the time i made a trade on the prediction market it was a time of like very high congestion on the ethereum network and i i paid a transaction fee of 17.76 um which is uh fun um but you know at the same time we're working on uh working on scalability we are working on a lot of efficiency things which you know there's sharding roll-ups and you know zk roll-ups optimistic all of these buzzwords and if they succeed they should like the math says that they'll decrease all of those costs by a factor of somewhere between 100 to 10 000 so i guess that might uh that might be when the experiments will be and you know if it fails then then we can really say that it failed because there's no micro foundations and uh if it succeeds then you know user experience really was the the barrier and it'll be very bullish on all the tech stuff you're doing but let me tell you my worry if you go back and you look at hyper inflation's in history like look at israel in the 1970s there were no practical barriers to dominating your contract in terms of u.s dollars people wouldn't do so until the rate of price inflation hit about 40 percent now 40 is pretty high you might think at eight or nine percent they would start thinking about redoing the contract but they waited until 40. it seemed there were these mental transactions costs that were very high it's what we see in nominal wage stickiness which is in virtually all societies if those are very fundamental and can't be overcome by crypto overcome by sharding overcome by greater speed you're in the more bearish scenario for crypto more generally and it stays the portfolio hedge asset it doesn't open up this broad class of new transactions that to me is possible too um does uh does scripture need to become a unit of accounts to open up a broadcast of new transactions i don't think it needs to become a widely used initiative account but simply to think things through in terms of this other system this other medium you might need for dollars and other currencies to be much worse than they are and maybe that day will come right that's possible too but it doesn't seem to be now and just how sharp that substitute ability is that's always the variable i'm mentally trying to estimate in forming my own forecasts for crypto quite sure i don't know no no this is a also an interesting question right because uh i mean so you know there there is such a thing as crypto dollars right there's stable coins so there's the algorithmic stable coins like die there is the kind of asset-backed ones like usdc and usdt and so forth and like if you look you know a lot of them have like very terrible trust properties right i mean die is fairly reasonable uh but historically but i mean usdt is um held in some bank in the bahamas and i think like the terms of service say that that the entire 15 billion dollars belongs to them i mean something like this i don't remember the details um but people are still willing to use it and hold it and just use it as the base medium for for a lot of crypto trading uh so it almost seems like in the short term that uh i guess the dollar is winning as a unit of uh a base unit of accounts inside crypto um which is interesting and we'll i guess in the long run will it flip over to like btc or ether both or so or something else i don't know but you know there has been this interesting trend right now rise of these stable coins rather makes me more bearish on crypto for the reasons implicit in what you're saying keep in mind also in world history exchange rate takes fixes have never ever ever held not in millennia bretton woods lasted i mean it's debated how long it lasted maybe 11 years and that was the system backed by all the world's major free countries and a lot of nuclear weapons and that lasts 11 years and how long am i supposed to think the stable coins will last uh i'm all for those as experiments i just think it'll become more floating exchange rates which i which i'm fine with i wrote a whole book defending that idea when i was starting my career um but i don't think stable coins are stable ever that's fair uh yes you know something something something fat um fat tail risks very possible um so going into kind of the macro foundation of the cultural macro foundations for crypto one of the big ones that a lot of people talk about right is distrust in governments that you know bitcoin like for example people for example talk about um bitcoin being this um trust um this is a thing that people will gravitate to because they just see how you know the us dollar is going i guess the meme says you know money printer go burr um and they see bitcoin as having this kind of sounder foundation even bruno made this a tweet a couple of years back i'm using the crypto drama as a as an example for why people would see the value in the more decentralized solutions and and in general it has this uh idea that decentralized technology could thrive because governments has this uh and huge historically dominant root of trust they're losing or losing the trust has been fairly large right and yes 2020 has been an interesting year for people's trust in governments i mean in a lot of in a lot of places it's decreasing uh i mean in east asia people's trust in their own government governments is at a high points but people's trust in each other's governments as definite is definitely decreasing as well um so i guess do we how do you see the future of uh just trust in gov in government's general in in general as being like is this something that even can be kind of broken down like as a financial trust and geopolitical trust different are they ultimately the same um to what extent is this so uh a a driver for crypto um and you know i guess where will this go for for thinking about crypto i would distinguish between trust and government and trust in the fed people trust congress less or trump laughs or the other party less that's very obvious and it's a big deal socially but in terms of institutions fed has had a 12-year run of a totally amazing positive performance in my opinion and people trusted a lot more it's the first place congress goes treasury goes there you need a problem solved you have the fed to it they did okay enough in 2008 uh this time around they did phenomenally well it's like that in the nba or our two well-functioning institutions so when the fed does well that holds back crypto because it tapers over problems in american banks banking system and people as well i'll use banks because the fed stands behind those and it's been doing well like the nba does spit tests well now there's two ways of looking at it one is just that is really credible and that will keep crypto at pay for a long time an alternative view is well the fed has done a great job but they only have so much credibility and they've spent it down maybe in an optimal way but they can only pull so much water from the well and we're getting closer to the fed not being able to pay for paper over those problems in the banking system and this is like medium term very bullish for crypto because the idea of ah it takes three days to clear you know who gives a damn i know the fed stands behind this all people maybe won't say that you know 17 years from now and they'll be thinking about safer more transparent alternatives and that would be a big boon for crypto and again there's two very different paths i'm quite sure i don't know which is true i think a lot for crypto depends on which you find to be the plausible scenario yeah okay um moving on a bit to um radical markets uh so a quote you know we i think last time we talked we talked a bit about quadratic funding um and back then quadratic funding was mostly just an idea it was this paper from myself and glenn but you know since then and in the ethereum ecosystem i don't know how much you've been following but we've done these experiments with it with a git coin grant so we have a distributed about two million dollars with the quadratic funding uh and people seem mostly happy with the results there have been experiments with uh a lot of downtown stimulus trying to use it in colorado to fund businesses um so um how i guess how have you your viewers on uh quadratic finding and quadratic other things changed and like where do you see the long-term future of those ideas being i think it can work it's been shown they can work there'll be a greater diversity of many many things including those ideas but when i think about collective choice in general to me the key input is the quality of voter preferences and if you're getting bad outcomes it's not like oh we need a new electoral system we need to you know change how the senate works or move to proportional representation those may or may not be good ideas i don't think they're fundamental it's the quality of the inputs what do people want what does your culture tell people is or should be important so i'm not sure any of those mechanisms will make a big difference for our largest problems i think especially with very well educated communities as are connected to you know ethereum there's kind of a lot of things you can take care of more effectively because within the model the efficiency properties of those methods are clear and you can use them right yeah this is true i can enjoy you know quality of inputs is definitely one of those things that you just uh can't uh get or uh get around uh just needing to have if he wants to have good outcomes um so i guess um before the uh um audience questions i wanted to finish off with a um overrated versus underrated sex oh of course uh yes uh central bank issued digital currencies i'm worried we will try them and they will suck the life out of our private banks i think probably china can do this because its private banks at state are so closely intertwined it's in broad terms one big system but other countries doing it will either be a minor add-on which i'm fine with but if it becomes really popular you end up with your central banks as the intermediaries your private banks has starved for deposits uh being broadly libertarian i see that as a bad thing so i think they're overrated i'm not even sure they're rated that much at all right but i i'm worried about the idea okay um the idea that uh remote work is making it more viable to move between different countries and so the market for which country people are are residing in will become more competitive i think remote work is making it much much more viable to move around with the country but the costs of moving to a different country i don't think have fallen very much a lot of those costs are your personal network so you could move from seattle to vancouver that still makes a big difference i don't think new viability of remote work changes that calculus very much so moving across nations will change less than people are saying moving within nations is changing more than people are saying okay um charter cities and building new cities in general people mean different things by the phrase charter city if by charter city you mean there'll be some big newspaper article that says this board of like people six of whom are white guys we'll like run a part of africa i don't think that will ever happen at least by charter cities you mean governance becomes more complex and more diverse and you have things arise almost like shopping malls today which clearly have their own governance it's just embedded within a broader structure but their actual problems they tend to solve on their own including of course security and often adjudication things like trade complexes shopping malls enterprise zones will become more significant and sovereign in an actual practical way and they will be like the vision of charter cities i think that's very definitely underrated kind of old-fashioned here's my charter city let's all vote on you know letting these people run roatan uh i would think that won't ever happen okay um online to offline communities so this idea that biology has been talking about of kind of communities forming offline and then intentionally coming together in some place uh what is it exactly you mean by that like we all move to austin and eat barbecue together um were potent potentially just people agreed to move to move to a particular place for a longer period of time i don't know you know overall moving in the united states you probably know has gone down every decade since the early 1980s people move less and find one place they really like and they stay there i think work from a distance will shift one place you find but rather than boston maybe it's chattanooga cheaper better weather over time it will have food just as good as boston but i still think your tendency to move only once won't change so much so we'll have different one-time moves to very different places and that will matter a lot but i don't think we'll see that much hopscotch unless you mean you know the very wealthy who kind of fly around and in some ways don't quite live anywhere okay a virtual reality it makes me dizzy and i think i'm enough of a arbitrary subjectivist that i'm not convinced uh so i'm not ready to press the button on predicting that one i'll i'll say overrated but i could easily easily be wrong my main complaint so brutish and biological and simple and stupid my argument is so unsophisticated my argument is either totally correct or totally wrong and it's probably totally wrong but i don't i don't quite see the people want to do it okay um small countries as a category i think they will do fine but they will attach themselves to larger units they will have to make choices countries such as singapore that play a complex game between china and the united states they will be put in increasingly stressful and difficult positions but at the end of the day a lot of them are well run they have to be well-run to stay competitive and i think we're going to do great new zealand now obviously with govind19 taiwan you're seeing a lot of successes that will be replicated as future crises come along and we have this long stretch of decades with few major crises but the stupidities of large bungling countries such as mine in brazil got away with it and all of a sudden now they're not getting away with it and it is looking better and it is i mean it's big physically but it's like a small country in in some ways especially not quebec canada and quebec has done the worst yep um the united nations well it's certainly vastly overrated in normal humans who went to public school and were told it was great but when i look at actual econometric papers like does the un modestly reduce the scope of conflict in the world in those papers it seems it does just the u.n on a regular very totally regular basis put out messages that completely offend me it does so i don't like it at the end of the day it's still a modest positive declining all the time in many many issues it's just not a player and again the public school rhetoric is so over the top i have to say overrated no i mean that's uh definitely fair i again i i participated in a model he won in high school and it definitely decreased my uh perception of the real thing to some degree um mars i'm a skeptic about space travel i'm not a skeptic about mars per se any more than any other location it seems to me the journey is perilous the experimentation for re-entry for normal humans in an age of litigation complacency and risk aversion is a lot to swallow and i sometimes say you know when nevada is full i'll start to think about mars so i don't see what's there of value unless you have a kind of utopian libertarian heinlein-esque governance scenario we're going to go there and do things all over again it just seems the costs and problems and radiation are so daunting and you end up dependent on the governments here anyway for getting back and forth but to me it seems way overrated by those who are enthusiasts but i'm not sure the normal american is wrong about it probably they expect nothing from mars and i think that's about right um so what do you think um is going to uh take the place uh or or of uh peoples and need for some kind of frontier um over the next century well we may be frustrated and unhappy from not having a frontier which arguably is the case now but i see a lot of advance in biomedicine it may not feel like a frontier to people but it could make the world very strange and different and people will talk about that much more than mars okay well that and that ends the the list of things that i have uh so i guess we can have some questions from the audience amazing well metallic tyler thank you so much for that conversation uh what we're gonna do is just gonna anybody listening feel free to start posting your questions we've had a handful of them already come in so as we kind of get them we'll we'll kind of ask them out i kind of want to start off by uh sort of more of an open-ended question for both of you uh in this case tyler you kind of talked about some of your opposing views on the use of blockchains and just in general kind of the need for this feature it offers i guess i'm curious on hearing that from the vitalik side what are kind of some of the things that you would probably disagree on the most uh firm from that argument and kind of i feel like we only heard one side of their argument but i'm curious to see if there's something executed you want me to disagree with the sir so tyler kind of talked about that uh people largely may not care um when we were kind of talking about mastodon and just social media are just the benefits that you would get on censorship resistance or or having control over your information um there's definitely an effect that does happen a lot of the time where people don't care until uh something personally affects them um but you know the eventually things is like if it's a bad system then eventually it will personally affect you um right so you know historically like people start using vpns when something that they personally wants to access and starts getting censored and i guess people will use crypto based solutions when it and it is the case that there is like some some specific issue that they that they personally care about that the existing platforms are not serving them well on um so i guess it is possible um that uh just big centralized platforms are going to are going to miscalculate massively um it is also possible that just um in order even just for lower grade kind of public relations reasons that the existing platforms are going to kind of evolve some evolve somewhat in a kind of not fully crypto-y but somewhat more decentralized direction and so one of the reasons why i think this is uh i wrote this postdoc a year ago on liability control as a liability um this idea that you know if you do put yourself into a position where you have control over a lot of things that can easily come back to bite you um and you know if like now of course reducing control doesn't like it could mean crypto but it doesn't have to mean they're kind of going all out on a decentralization it could even just mean something as simple as um you know establishing some kind of independent independent governing council as you know what mark has done uh and just like let it making that more transparent and letting it have a final say over um over decisions in some way it could also mean that jacka recently retweeted this uh approach in favor of this approach where he says that people should be free to choose like what moderation algorithm algorithms they want to use they use for their tweet which is also also interesting so some degree of experimentation of that of uh those kinds of things i can see happening uh i mean fully decentralized things i i expect will continue as a and as a niche uh in the short term and what they will be in the long term depends on like one is you know if they find the use case two as if the the mainstream systems just completely break and three as having figured out figure it out technologically when you find it striking how few chinese use vpn or that tv network news in the u.s has always been terrible even with cable and satellite um those would be my comparator points right i mean this is true but i guess well i guess it depends on what your definition of like few versus many is like the number of vpn users is definitely in the tens of millions um it's uh and it may even those tens of millions may even be the ten the the tens of millions that uh kind of matter more uh in terms of uh just their in their long-term impact on global culture um the uh it also i think is the case that um even if these technologies do not get widely adopted the credible threat of them getting widely adopted is enough to push centralized actors to be to be more reasonable i guess the go-to example of this as the argument that the possibility of people pirating everything um like in terms of just like movies and music um really pushed the recording labels to become more reasonable and eventually and start creating things like spot uh spotify and netflix which you know people use now but i mean arguably if the ability to just illegally tour in things that did not exist as a backstop the terms would be considerably less favor less favorable to consumers i was going to see if that's how i was going to respond uh no no next question yeah great um a question for tyler and i i think it's wrong to think that vitalik and i is disagreeing i would say we have different stances i'm a very detached distant observer he is a doer let's say difference in perspective is more important and our stances might differ i would admit on all these issues he knows more than i do but would be inclined to bend toward him just epistemically on that basis but still his different role as doer and mine as distant observer will make us feel like we have somewhat different views when maybe we really don't know absolutely and it's also uh it's the time uh interval that you're kind of debating this on also that matters and shifts that perspective so i've kind of seen that happen and you've kind of brought up different timelines where this may be important or not important a question for tyler is if you were trying to convince some bright economic students um that ethereum was an interesting thing to study how would you pitch it to them i'm not sure the pitch matters i think you need to see that a paper on ethereum and related services can get in a top journal there are some papers on crypto in top journals there might be an ethereum vitalik would know i don't recall seeing one and it's all proof by showing they don't give a damn what you say they want to see it it's probably unfortunate it shows too much conformism and status quo bias but i think it's how it's working right now yeah and there's definitely been uh quite a bit of of academic publishing on ethereum within the cryptography space and within the economic space well there's uh those papers that eric buddish has uh done and and there's definitely and a few things here and there um there's uh well there's tiff tim rough gardens of upcoming analysis on our fee market reform a proposal the ap 1559 which and it's not an academic paper in the standard sense but it is something that is could just end up showing that you know this is an area that um that has interesting economics uh problems that are worth looking at got it um another question for tyler and uh this is more around uh the audience trying to understand if you have looked at or have followed what's been happening recently in the world of decentralized finance or depay and if so kind of what do you think about that as a as sort of a new enablement in kind of what's possible now especially using cryptocurrencies and uh kind of how do you think about that if you have kind of paid attention to that sector i read about it a fair amount but i'm quite sure i don't understand it and i'm not a participant i suspect it's one of those areas to understand you need to actually try to do it i would repeat my broader point flow of wealth into crypto has meant all these incredible experiments and the creation literally of new worlds new vocabularies to me that's just phenomenal and exciting at the same time it has so weakened the market tests for these things the normal metrics i would use look at say the market for thumbtacks like which thumbtacks are going to work well i'm not a thumbtack profit but i sort of know how to figure that out i can't do that in these areas so i read i listen to podcasts you know like also on bitcoin every and at the end of it all i'm basically confused and i don't see that my mental models have let me narrow it down to questions reducible to a few dimensions that's my impression that's my answer totally acceptable answer um a question for vitalik is uh for a new developer in this ecosystem what would you recommend um that they start reading to get involved in developing the code base and and i think this is more uh the way i understand it towards contributing to the development of ethereum instead of building on top of it uh but uh happy to accept any answers that will clarify yeah i mean i think like just going through the process of developing a simple application on top of ethereum like even just a simple like wallet dap or even just a adapt that points to a smart contract and let's take like a button that sends a transaction and that adds uh some one to some number and just kind of walk through that entire process and see what all the different steps are um is a valuable exercise for any new developer to go through like myself as a learner i've learned felt like and this just doing and kind of getting into the nuts and bolts of things is generally uh a great uh take uh definitely a better technique than reading um for just get giving yourself a better understanding of like what the heck is going on in the different parts um then branching out from there i think it really depends on like you know what it is that he wants to focus on like if he wants to focus on you know building and developing applications then you might want to look at existing ones um if you're looking at the protocol then you know we're talking about eth1 or we're talking about eth2 or we're talking about layer two protocols it's definitely uh just importance to kind of get away of the land in terms of what the space is and what all of these different components are as uh you know ethereum is this a big ecosystem and there's a growing number of these just kind of baseline things that you do needs to learn about and keep track of and then from there it depends on a specific thing um and once again like if he wants to uh become an uh if to developer just um like poking around the spec um trying to um even like build a chain or doing the same with each one like it's a and it's a challenge but if you want to be a core dev it's the sort of thing that you do have to just be able to do in principle um and then just go from there awesome next we have actually a clarification and and more of uh an insight that we would love from tyler uh you kind of talked about when you were commenting on the the us dominance uh through uh the media power it has uh and the question is what about the rise of non-american anglo soft power um in kind of specifically the world of entertainment so as kind of uh the indian nigerian and and a handful of other film industries sort of begin to really scale and take off um to a lot bigger audiences do you think that the us will still retain that soft power of having control over media content or did you mean something else from that point or just kind of what's your reaction to that statement well i think u.s soft power in movies has always been weaker than people have charged that was formerly a major trade dispute that soft power was super strong in canada and a few other places but of course as you mentioned never in india uh middle east or or many other parts of the world future us soft power is through the internet and social media and that i think is still accelerating the extent to which say the two of us by having this conversation in what is north american english or reaching the whole world uh people haven't haven't grasped the import of that yet and it's not hollywood hollywood is decaying uh not going to have that soft power or carry it being much worse of course with covet but that was already the trend so i think it's all about social media korean movies are better than hollywood movies it's not close and and sorry is that a comment on the quality or the the reach or the propagation of how many people end up viewing them or sort of is there a specific metric where you measure this against i think there's been an act of self-destruction that goes on in hollywood precisely by trying to reach a more global market it comes down the product dialogue is less clever more things blow up and say korean cinema a more extreme example iranian cinema being directed to much smaller audiences it's back to this collective choice mechanism what really makes for good results is a quality audience and that's the truly scarce variable here and hollywood deliberately aims at a not so quality audience so it it becomes crud it's my subjective judgment but i think it's true ooh um so here's some actually an interesting question um what do you think about the possibility that uh ai and you know good recent developments with the the gpts and so forth is going to massively decrease the cost of making a movie to the point that a less than institutional actor and even an individual will be able to do it i think that's already true even without all of those developments but what's special about movies is people want to see the same movie as what other people are seeing that means you end with a pretty high degree of civilization no matter what it's like well michael jordan lebron they're the best players yes but you want to talk to other people about them though i'm not sure how much it will matter we'll get this blossoming it'll mean that the players will pull from a bigger tent of talent that has to be a good thing right but still they'll be the centralization at the top right there will be centralization but like the mechanisms that we have for um pushing things into uh kind of massive heights of popularity to the point where they get that kind of position as the thing that you have to watch them because everyone else watches them historically it's been very kind of institutionally driven and you know how it makes the movies and they market their movies to hell but this seems like a process that social media potentially could end up getting into disrupting at some point soon as you well know youtube stars instagram stars are typically bigger than movie stars there may be a few older movie stars everyone knows them because they became famous in this earlier world but movie stars today they're not that important again youtube and instagram much more powerful producers of celebrity already and that's typically not without complex ai or gpt three um we want to just ask a couple more questions before we wrap today and uh we are a little bit over so i want to thank you for for kind of going over with us uh the question is kind of uh how do you kind of think uh crypto will shape uh the regulatory framework around how findings is structured right now do you think it'll be in a positive way do you think it'll be because we'll force it to sort of meant to allow some of these applications to work uh is that even a valid question to you like how do you react to the regulatory aspect of cryptocurrencies obviously it depends on the country the united states the sec has been very light on crypto i would not at all assume that will last and if biden is elected which as we speak seems more likely uh it's almost certainly not going to last and then there's this longer term issue as banks move into tech and fintech moves into services closer to banking how will the regulators react when banking and commerce start to mix in the united states that will have major implications for crypto i wouldn't say i have a particular prediction but i think if you want to think through the future of crypto just the regulatory side don't assume you know the light hand is going to last i would bet against that you know at least five to one and we'll see what comes i don't know um so we'll just do two more questions a little bit for for both of you uh so the second last question i have is if uh all we end up with is a really efficient replacement for the existing financial infrastructure and that's kind of the primary and the most exciting use case for blockchains uh is that a win uh in any account from from each of you um and and kind of if all we kind of as you kind of pointed out a clearing time becomes three seconds instead of three days is that's the way not positive for us or not for me i i would say that doesn't excite me but again there are these options on things like prediction markets economies either in virtual reality or in some other future thing that wants to behave in a seamless way that fiat currencies and financial regulation won't allow i see a reasonably high chance all that can be significant i'm not ready to predict it the exciting side lies in these future dimensions that current institutions have just not evolved to handle and they will be slow and sluggish and trying to do so and crypto's going to whip their ass if that what comes to pass so that's the exciting scenario we'll see we will see indeed great i'm excited that's awesome so uh the last question i want to ask and we want to wrap this up based on this question is it's been two years since your last conversation uh at least on air and uh we want to see if we can end today's chat with making a prediction on what you think the future v theorem will be two years from now um i'll kind of take predictions from both sides and uh we'll call it what is it two years from now a prediction on the future of ethereum two years from now what do you think ethereum specifically will be uh down the road whether that's a political answer or a technological answer or a user adoption answer um what do you kind of predict for the development of the their ecosystem colic deserves the last word so let me go first it will be more of an august mainstream institution known to more people the pollock will be more of an elder statesman uh and it will all feel like more grave and serious but it will be doing uh more things that's my prediction i think uh i mean we're going to see just first of all a continued steady growth and i'm very hopeful that all of the things that we're doing with technology including you know sharding roll-ups proof of stakes your knowledge proofs and all of these things will be continue progressing extremely quickly the same way that i mean our zika snarks have been progressing extremely quickly in the last year um and this will be is kind of necessary bedrock to enable a lot more applications to um to happen and i think we will continue to see as we have seen historically um people attempt to try to break out and make crypto things that just kind of go viral independently um and try to reach larger numbers of people um so two years ago we've seen cryptokitties as um as one example and i think there are going to be more examples and and i think these examples are each going to be kind of more interesting and meaningful than the um than the previous and and once the tech is uh actually there to handle it that when the thing it gets uh just when the thing gets big the transaction fees don't just immediately um force it to come screeching to a stop like once that stops being a factor i think the results may well be amazing amazing uh tyler vitalik thank you so much uh for being with us today and not sharing your thoughts i'm sure there'll be a lot more follow-ups on twitter and other platforms and uh we'll be sure to release some of those user questions to you thank you thank you kartik thank you vitalik a real pleasure and honor yes thank you everyone for listening thanks and with that i am proud to sort of say that we are at the end of our our eat online summit and the month of october uh we kind of did some of this summary at the beginning of uh this morning after the summits but this has been an incredible month for us for eve global and eat online we had 710 developers uh spend the last three weeks working on amazing projects and now we saw 12 of our favorites as a finalist present with their live demos and together we contribute 175 projects just in the last three weeks uh scaling uh spanning anywhere from d5 to scalability in ethereum uh to experiments with governance and uh and just to summarize how this year has been for us uh we've been able to onboard and host uh 1713 developers uh over the course of this year uh by running online and in-person events and together they've contributed to over 470 projects into the dram ecosystem um as i kind of said this earlier today some of these projects have gone to become well-funded companies from just this year some of them have been just fun experiments and the thing that's consistent with all of them is that 100 of these projects have been made because the people wanted to build it for themselves and they really cared about sort of bringing that on and trying that out and just working on it directly and sharing it with all of us so uh with that said i would like to thank all of you for spending the last four weeks with us and everybody was here on the chat and our speakers today and uh last but not least uh even though we're going to announce some of our future events soon now we are going to hint about and announce that we will be doing ebogita or our next hackathon that will be in person uh on august 68 in bogota colombia in tandem with devcon so uh can i do keep an eye out out on this announcement and i want to thank all of you here for being with us so thanks again and hope you have a great uh afternoon and evening and night and uh goodbye