In the Ethereum space, there's even a project called Open Law, where they take real world contracts and actually try to add a legal DSL to them. So, you combine a smart contract with a legal DSL, but you need a privacy component for this to actually work, which is why Midnight exists. I do believe we can make it quite interoperable with these things. So the fourth-generation cryptocurrency is no longer about scale...
...good to make a video; so let me go ahead and share my screen. There we go. All right, so some of you know this gentleman, Steven Nerayoff, and he had this tweet in late 2019. "Ethereum was in trouble - Vitalik asked Steph N to do some full diagnostic assessment." So, basically, Nof had a three-hour call with Vitalik in early 2015. Apparently, he recorded that call. I don't know if that was with Vitalik's consent or not. What he did is, he...
He was a big lawyer in the New York cryptocurrency community, and he ran a venture capital firm as well as another company called Cloud Park. Steve and I would talk off and on, and Steve provided a lot of assistance in the early days of the structuring of the Ethereum crowd sale, both when I was there and then after I was pushed out of the orgnaization.
Steve stayed on after I got pushed out of Ethereum and provided a lot of advice about business strategy and how to structure Ethereum. The reason I'm making this video is that he made a big deal and talked about this Ethereum rescue and restructure plan. It was dated February 4th, 2015, and here's the transcript of it. Excuse me, I'm a little under the weather today. Basically, it all boils down to...
...all the things they were talking about, and uh, you, it says like, I think we have somewhere, this is Vitalik talking, between 11,000-12,000 Bitcoin, which is roughly in the $2 to $3 million range. To give some context of what happened, the crowd sale for Ethereum occurred, I believe, in July, if memory serves right, of 2014. By February, the price of Bitcoin had been cut in half and they didn't hedge properly, and as a result...
...there was not a lot of gas left in the tank that the Ethereum Foundation had, and there were numerous infrastructural problems. These have been documented in various books and things like that. So, at this juncture of time, Vitalik was kind of in the thick of things. What Steve was basically doing was advising Vitalik to jettison a big chunk of the people, restructure, and get some 1.0 out and then, focus all efforts on a new 2.0.
The reality is that Ethereum almost didn't ship. You know, they had a very basic thing, but the ecosystem didn't have a lot of fuel left in the tank. There was a lot of stuff going on, and it just kind of gives you a sense of how difficult these things can be. Also, some of the interpersonal relationships were a little afraid and particular.
Afraid with, uh, Ming and Joe, they didn't like each other very much, uh. And then, obviously, Gavin was doing his own thing and eventually went on to create Parity. Now, uh, what's always interesting about my participation in the Ethereum ecosystem is that a history's been written where, uh, three great lies have been told. Um, one, uh, that I'm this hyper-sociopathic pathological liar who did...
and, uh, three, uh, that, uh, I constantly overstate my role in Ethereum, I really wasn't a co-founder. I had nothing to do with the organization, and I fooled and manipulated everybody. Um, and this has been reinforced by some, just hack job journalism, and other things. Now, I've been in the space for 10 years, no class-action lawsuit, no legal issues, um, you know. We built Cardano. It's 12 billion ecosystem.
...and we do real things. I'm very passionate. I work 100-hour weeks. There's a lot of stuff floating around if people go and dig. I've been an advisor of different projects or have been involved in projects or had extensive conversations about things. You know, our fingerprints are on things here and there. Even today in the Ethereum project, there are still some artifacts...
...and the Ripple Community, is of course mad as hell at Ethereum for the whole free pass stuff. You know, I wish him well and I don't really want to comment or have a place in it. But, whenever I get brought up, or my name is mentioned 69 times in a transcript, it is a good point to make a video really quickly and just kind of say, "Hey, yeah, it's here and it's there." I wouldn't be surprised if there's more conversations here and there.
But the fact of the matter is, I left Ethereum in June 2014 and never looked back. They've gone on and created a big ecosystem. This ecosystem has millions of people and they do all kinds of interesting things. They have a particular view on how stuff should work, and I have a view on how stuff should work. Sometimes there's an overlap, sometimes there's not, and we all build in one big ecosystem.
Ethereum is very strong right now. That wasn't always the case. Ethereum was remarkably weak at one point, and that transcript tends to reveal a very uncomfortable truth, I would say, about how close they came to not being able to finish what they started. But they did, and the rest is history, you know. They've delivered a lot. I don't make much of it, and I try to look forward instead of looking back.
The only constant in technology and Protocols are the fact that most of the technology protocols will change in 10 years, so Ethereum's got to evolve, and the ecosystem has to evolve. It has to have the right thought process and mentality, and Cardano has to do the same. You know, that's why we have a partner chain strategy. That's why there's a big push for on-chain governance to activate millions of people in the Cardano ecosystem to provide their wisdom and insight.
Collectively work on things because that gives you an army far larger than anything Ethereum or Bitcoin has to engage, and every year we reassess. We re-evaluate; some things get cancelled, some things turn out to not have been a good idea. Other things turned out to be a really good idea and you double down on them. You double click on them, and you push forward. You have to do that to...
Our core principles are ones we don't violate, so there's integrity in Cardano and that ecosystem that we've built together. However, at the same time, you also have to ask yourself what makes other people awesome and where can we borrow and learn lessons from them? Ethereum made the most mistakes out of any layer one project because they were the layer one project that took the biggest risks...
There are some people who have very strong access to grind as well, and they're pretty angry. They're going to do a lot to try to engage in that anger, and somehow, some way, I guess that vindicates them. My only advice to those people is to try to learn the same lessons I've had to learn the hard way. I was very, very, very angry after I got pushed out of Ethereum.
...draconian Old Testament view of 'No Mercy' - um, some people understand that people are people. You can work with them, you can talk with them, you can collaborate with them. The enemy yesterday becomes a friend today, and that's where you find a way to partner and build relationships. Gavin Wood was one of the people that pushed for me to be pushed out of Ethereum. Now, we're working with Polkadot, you know, and there's lots of stuff to do there.
Uh, it's always interesting, you know, eight years later, to go and read a transcript that mentions your name 69 times and talks about the "what if" game of where Ethereum could have been and what could have been. But, um, all things considered, this is where the space is at, and we have a lot of work to do. We just have to move forward. So, until next time everyone, good talk. Cheers.
...when you're setting up your partner chain, you start from a default where the Cardano network has the option to secure that chain. So, it almost behaves kind of like a layer two. But then you also can add on additional layers of security that are relevant to the logic of your system. To connect your system to other systems, maybe like Ethereum, maybe like Bitcoin, or maybe it's an internal thing, like you're..
And we live in a multi-chain world. We also live in a world where interoperability is king. Okay, you have to have an interoperability strategy. So, the reality is, Ethereum's not going to go away, and Bitcoin is not going to go away. So, you need some sort of mechanisms to bridge and make other networks care about your system. Okay, you need some sort of way of doing that.
...right now, the daps that live in this ecosystem, in the DAP that live here, can't talk to the things in Cardano. By having a surface layer that has a lot of hooks for interoperability, what that effectively allows you to do is to have a Dapp. Instead of just being a Cardano-native Dapp, it could be written in Solidity here on Ethereum, but then call a midnight service, or call our AI chain, or call our decentralized network, or...
...whatever the heck we have here, especially here with this decentralized hosting, is something that is kind of a holy grail. It's a very fragile point overall in the Ethereum ecosystem. So if you care about interoperability as one of the truths, you have to have some sort of a strategy for how all these things are going to fit together. A big part of the Cardano sidechain agenda is that....
For the most part, includes many people in Bitcoin who have never really heard or cared about Cardano. Now, they actually have something to connect to. Those in Ethereum, who have kind of written this off, now will take a second look. They'll take a second look through our service layer. They don't care that it's running on Cardano. They don't care that it's secured by Cardano; it just basically creates that nice flow-through for it.
For example, if there are lots of assets that are floating here. They are female and need liquidity. Maybe there's a high liquidity Dex that lives on Cardano, but you know, there's going to be that cross-pollination that lives there. There's going to be a case where an Ethereum app calls midnight, which then in turn calls Cardano. Indirectly, Ethereum creates demand for Cardano. There are about 76 million users here, there are about 35...
When you write a dapp, you are not writing a dapp to be beholden to Vitalik Butterin's design decisions on Ethereum or the Solana developers' design decisions or the Algorand developers' design, or my design decisions. You know, pick your favorite person - you're not doing that. You're writing a piece of infrastructure that you, ideally, I would hope, want to be as decentralized as possible with predictable pricing and...
But the point is, you have a set of tools, and you know where, when, and how to use those tools to deliver a great experience to your customers. So, interoperability means you're in a multi-chain world. There's legacy stuff you have to worry about, and then obviously, you have to build bridges with people. I want tourists on our island. I want people to come and visit, so that when people do things on Ethereum, maybe, just maybe, they call a surface that lives in our layer and that indirectly benefits our ecosystem.
...because things have gotten to the point of parody at this point. Okay, so there are two different concerns about this case. Okay, the first concern is, did Ethereum get a free pass? Okay, so did something happen so that Ethereum could get a free pass from the SEC? Okay, the second concern is about whether people from Ethereum might be influencing the SEC a little bit.
Right up here, it says, "Did Ethereum get a free pass from the SEC?" So, we can do this right here. We'll just say two, and what we'll do is we'll just go down here. There we go. Why didn't I take the time to reverse the first concern? Well, it's because I really don't care. And why don't I care? Because it will be impossible to prove one way or the other. Just go ahead and put that up. Why is it impossible?
...or if there was a free passer, what the mrea was - you know, all these things, you just won't know. And yes, you guys can go until the cows come home and outline lots of things that you think are the case. And in your own mind, prove to yourself that a person is corrupt and that goes okay up here, right here. You know, did Ethereum get a free pass? And maybe in your head, you can...
...when it's political, the investigation really doesn't go anywhere. Nothing really happens, see. That's why I don't care because nothing comes from those conversations. The only thing I've spoken about historically is this right here, number two: did people from Ethereum bribe or influence the SEC to go after XRP? Okay, so we're going to go ahead and go down here. All right, and down here, we're going.
To go ahead and put these three things there, we go. Did people from Ethereum bribe the SEC to go after XRP? Okay, a little question mark here, and my first comment on that is, if so, then where is the evidence? That's what I keep asking. Where is the evidence that Hinman met with Joe Luben and Vitalik and received a bunch of money? Isn't it very plausible that that bunch of money was connected to...
...let's ensure that Ethereum is not a security. Do you have an email or other things that would qualify as evidence? For instance, is there an email that says, "Hey, go after XRP"? Is there a recording? Is there some sort of hidden text? Is there a video of these types of things where they said "Go after XRP"? Were there whistleblowers who said "We were"?
As long as you guys want to, and there are lots of reasons why you'd give her a free pass. Everything from "I just like the name Ethereum" to "they gave me a big sack of money." Now, you guys in the community seem to be combining these two things together. And I say, "All right, what evidence do you have? Do you have an email or an audio recording? Let's put the audio there." You know, like that. Do you have an...
Do you have an audio recording? Do you have hidden text? Uh, do you have video recordings? Do you have whistleblowers that claim these things? That the SEC was bribed to go after XRP by someone from Ethereum, probably Uncle Joe? If you don't have that evidence but you're saying it, that is an unsupported conspiracy. And thus, the words "grand conspiracy" came from so I say. It's nuts to believe this. It is not in the
It's in the best interest of Ethereum for any layer one to not be attacked by the Securities and Exchange Commission. Why? Because if the SEC goes after a layer one, a later Administration can use that case law's precedent. This is a point that seems to be missed time and again. Does it make sense if one layer one with similar facts and circumstances is hit by the SEC? Then, case law would...
...exists that which would be useful for other layer ones with similar facts and circumstances. So if XRP is a security, the SEC could use that same construct for Ethereum as a security. You said, "Well, they would never do that because, apparently, the entire agency is controlled by Joe Lubin." Alright, well, does that mean if, for example, Trump gets elected, or a Republican gets elected, there's...
...settlement remittances, these types of things, uh, no community control of consensus. There was no notion of mining, so no mining, these types of things. What else can you think? You know, these ecosystems have been around for a while and didn't seem to interact with Ethereum. Not once did Ethereum ever come up in any conversation. Did Ripple come up in any conversation we had with Ethereum? None.
You can't just pass an idea; you can't just touch Ethereum. You have to touch every single thing that Consensys was involved in because if you create and weaponize the law in a way that makes the SEC want to go after everything, well, anything that Consensys touched is now going to be a security. That creates a problem, doesn't it? Doesn't that, by transitivity, hurt Uncle Joe? All right, but you know, let's do it.
The Ethereum, to go after XRP, what about all this stuff? Well, let's go back to some baselines. I'm not okay with corruption. I don't like it when people use relationships to improperly influence government policy. I don't believe it was legitimate for the SEC to go after XRP, and I'm glad that they won. Okay, and I'm not going to take the time to look at Deon or all these.
We'd all have heard the audio recording a thousand times. We'd all have read The Whistleblower testimony again, and again, and again, of somebody on the Ethereum side of is, Vitalic, Joe or Gavin saying, "You know, those XRP people are super scary. We got to take them out. So, go ahead and say they're a security." That's why I call it a grand conspiracy. Now, if you believe that, they...
...here, with this, I was one of the few people in the industry when you guys got hit with the XRP is a security lawsuit. I actually came out and said, "You're not Vitalik Buterin, didn't do that." Boatloads of Layer One CEOs, they didn't do that. I was one of the few guys who said, "You guys are not a security." I've never believed that you are, and I left Ethereum. Let's, let's make...
Sure, you understand this baseline here in June of 2014. Why? Well, I think everybody knows I was pushed out. What does that infer? It infers that I'm not exactly on the best of terms with everyone over there. Do you know what that also means? It means that I had nothing to do with any of these things that occurred inside the Ethereum ecosystem. You will not find any emails or text messages, or...
...documents or other things from the Ethereum Foundation with my name on them, why? Because the Ethereum Foundation was founded after June of 2014, and the crowd sale occurred after June. I believe it was in July. They formed a different entity; there was an Ethereum Switzerland GmbH that was replaced with the Ethereum Foundation. I was the one with Mii Alisia.
...to tell you, you should not live a life where you're in charge of your own life. The "own nothing, you'll be happy" crowd and the WEF crowd, they exist. They're here. There's never been a case where I've sat down and said to myself, "God, how do we beat Ethereum, or Bitcoin, or XRP, and these other things?" As different or together as these technologies can be, we're all on the same side. From the
"Everybody's going to be a millionaire. There you go, in Venezuela, they're eating the animals in the zoos because there's nothing else to eat. But I guess that is okay as long as you have a lot of dollars and digits in your bank account. Okay, what's your point then? Why do you even care then about these things? XRP versus Ethereum — they're just symbols and symbols go."
...upgrade the system, and we said, "All right, well, offchain social consensus, kind of like how Bitcoin does things, or Ethereum does things, or any of these other guys, makes a lot of sense to pursue." Well, here, we kind of say we have to go a step beyond that, and we have to start actually getting into the nitty-gritty of algorithmic adjudication and algorithmic definition. We have to actually start...
...Ethereum, they put it in Coinbase custody, or they put it in Copper or these types of things, and then you give them authorization to do that. This was because of a variety of operational reasons, security reasons, and other things. But every single time something is done, there's an exhaustive off-chain process we go through and a debate we go through, and people have to...
...the community disagrees; what would they do? They would do the same thing that happened with Bitcoin Cash and Bitcoin, or Ethereum and Ethereum Classic, where an uncontrolled hard fork would occur. Basically, the network would fork, which means that Cardano regresses to a governance state that is no better than Bitcoin or Ethereum. It's just that this is something here that allows us to...
Initially that's a very primitive notion, but then the notion grows over time; it's that simple. That's how, in practice, you upgrade a system with this level of complexity, and a system that does require on-chain governance. It's the same way, when you think about it, how Polkadot has done things, how Tezos has done things, how Ethereum has done things, and how other people have done things. It’s just that there's a balance...
...through Twitter and social media, uh, when they say things like, "Ethereum's this," or "Cardano's this," or "Solana is like a Nintendo cartridge,” for example, it's viewed through that lens, you know? The point of it is just to drum up some of those feelings. But, you'll notice something - we're all in the same league; we're all cryptocurrencies; we all work together, you see.
All have the same common foes: CBDCs, central banks, and totalitarian regimes. The delta between the aspirations of your average Ethereum person, who really believes in Ethereum, and the average Cardano person, who really believes in Cardano, is not very big. You're both using public key cryptography, both using wallets, both using a cryptocurrency, which makes you a very small minority in the world.
Because there's no reasonable explanation for how we took the time to write over 200 papers in a seven-year period. What marketing value do I get out of those papers? Can anybody read them? Can anybody understand them? We predicted all the problems Ethereum was going to run into with Casper years ago. Nobody in the media looked at it, cared about it, or wrote about it.
Here's what happened. People took Hydra outside of IO as a marketing thing. They made YouTube videos and said, "Hydra is the secret weapon that's going to kill Ethereum and all these other guys. Hydra is going to do this thing - a million transactions per second." This was because I read in a blog post that that's its theoretical maximum or something like that.
...to be ecosystem builders and marketers, there are many people who are more qualified, cheaper, and better than us to pursue that, and frankly, that needs to be decentralized. The point of on-chain government is to prioritize these types of things, and then I think things will get a lot better. You know, the Ethereum community, they'll also be a lot happier with CIP1694 because what will happen is...
Separate things entirely, and there's never a reconciliation, because there's never an acknowledgement that we're talking about two separate things. When they talk about Ethgate on the other side of the aisle, they're talking about how people use connections, relationships, and perhaps money to convince insiders in the government to go easy on Ethereum. It probably happened, who knows. It's hard...
Somebody, somewhere, can do something about it. So, that's usually what they talk about with EthGate. Then, I mentioned just one thing, the grand conspiracy, which is another thing. That other thing is people from the Ethereum side bribing the Securities Exchange Commission to go after XRP. These are very different things. It's one thing to use relationships to protect your own interests, but it's another...
"Eating some steak and drinking some wine, saying, 'Hey, uh, you know, uh, maybe we should make Ethereum not a security?' I can imagine that conversation happening. I don't understand how you have any evidence that the conversation was also, 'Oh, and by the way, while you're at it, we're so scared of XRP, a system at the time that doesn't even have smart contracts.' That has nothing to do with this."
...our business model serves different customers. Can you say there's a security, and then go after them? Wouldn't the very act of weaponizing the SEC to do that create blowback, potentially causing Ethereum to be hit and impacted? Doesn't that expose all the stuff you're trying to do? Doesn't that dilute your entire goal of making Ethereum not a security, to also do that?
We've been talking about this for half the time. Seriously, we have been discussing this, and it still comes up. People on Twitter, anytime Ripple wins something against the SEC, ask, "Do you believe us now?" We're not even talking about the same thing. You have yet to provide any evidence whatsoever that a single meeting has happened in which someone in the Ethereum circuits bribed or gave.
That is a great case study in which they honestly believe I'm talking about both those things. No matter how many times I pull them apart, they say, "No, you were talking about both those things." And a conspiracy also means the other thing that I don't even care about. I don't want it and there's nothing productive there really. Also, the other thing is a litigation strategy going after Ethereum.
And there, their whole thing doesn't really make any sense. Why would you want to say, if you're litigating, that Ethereum did something improper to make itself not a security? Why wouldn't you want to say that the SEC is right, Ethereum is not a security, and then argue by analogy those same facts and circumstances apply to you to not be a security? It's actually an anti-benefit.
...Ethereum bribed the SEC to go after XRP. There is no evidence for it; it's a conspiracy theory and it proves nothing. Also, for the 67th time, I'm saying again, it is a shit litigation strategy to claim that the only reason the SEC decided Ethereum is not a security is because they were bribed, not due to the facts and merits. Because if they were bribed, then
...generation of what the Ethereum Virtual Machine should have been was a radically different view, made more traditional based on LLVM, which is a very well-established model for compilation. It's a compilation target that Apple created back in 2001, and it was created in collaboration with the University of Illinois at Urbana-Champaign. So...
...moving from that River and there are macro factors regulatory factors competitive factors if you were designing a cryptocurrency in 2015 - ethereum hadn't even launched there was no canonical smart contract methodology if you're designing a cryptocurrency in 2023 - you have many paradigms many languages thousands of approaches you have huge amounts of infostructure to...
them if you look at that journey, cardano has always been in the leading set of the thought of that and the mind share of that we've always been on the Forefront we were the first to Market with a liquid noncustodial staking protocol that automates the payments to stake pools the first to market for that we beat ethereum by like two and a half years think about that it's not a...
In the Ethereum community: Today, there are still developers who honest to God believe that Cardano can only process one transaction per block for smart contract. They actually believe this. And, when you show them all these dapps, they say they can't exist, you can't do that in extended UTXO. They also say, "Well, here's the code. It's running live on mainnet. How are we doing this? It must be fake."
Advantage: liquid non-custodial staking with Ouroboros is the greatest example of that. Whereas Ethereum went down a very different road, which I personally believe is going to centralize their network and create unpleasant regulatory realities, especially in Europe. When you look at extended UTXO, it's very easy to graft on an accounts model. But at the core, with extended UTXO, you get all the...
Together with the dapp developers on Cardano, the government's advancements on Cardano, and everything along the line, all of these things together is how you evolve an ecosystem. Bitcoin would die to have what we have, and frankly, Ethereum is chasing it, but they can't get there because of poor design decisions with the EVM and the account model. It's very easy through...
we can have stablecoin side chains. SingularityNET is interested in Tota, and we even wrote a paper on using proof of work to train a large language model. This provides many opportunities for building a vibrant ecosystem. So, what does this mean for Ada holders? Well, it means that Cardano offers a solution to Ethereum's parasitic load problem, where layer
..whether a cryptocurrency is sufficiently decentralized or not, it's coming along quite well. After Bitcoin, the very next measurement I'd love to see is Cardano and Ethereum so that we actually have a comparative matrix, and we, for the first time ever, see where everybody falls. I'm very excited about that. My 96-year-old mother gets about five to ten calls a day that are scams...
Okay, so this also includes a concept of roll-ups. And we've just released the first version of Mithril, and what's going to happen is Mithril is going to follow a very similar evolution to Hydra. But there is some science here, so there's kind of a question of Mithril 2.0 and how should we go about building good data availability layer for the system. Well, there's a great video that's from DC Spark and it says data availability Solutions overview Chia, Polygon, Algorand, Celestia, IPFS, and Ethereum.
This is probably the hardest thing I've ever tried to participate in in my career and no one has pulled this off in the cryptocurrency space, not Bitcoin, not Ethereum, no one. It's very easy to do parts of these types of things and there's legacy models to do these types of things but to do all of this as one bucket.
And the point of an aggregation point is you can bring all those amazing ideas into the ecosystem. So, if we see something that Polygon is doing or Solana is doing or Polkadot is doing or Algorand is doing or Ethereum proper is doing and it's a good idea, there's a place to bring people in and discuss it.
Meanwhile, the Ethereum people that eight years to figure how proof is taken, they gave you hotel California and they they gave you custodial staking that is not liquid.
More importantly, it's also a principle that everybody plays by the same rules. See, that's what makes Cardano so special. And that's what makes Bitcoin special. Ethereum special and other great protocols is this idea that everybody has to play by the same set of rules.
Joe Rogan really needs to have you on. Well, I've been trying to get on Rogan. You know, it's just an issue of timing and other things. We got the psychedelics research. I'm a bison rancher. We do guided hunts. I'm literally discovering alien shit in in Papua New Guinea, and I run six companies. We’ve got glowing plants. We are bringing it back the woolly mammoth, you know. Created Cardano, helped create Ethereum. At what point are you an interesting guest for a guy like Rogan, it's like, come on, guys.
The idea is that once things are where they need to be, and if we can get 1694 of a line based on the Community vote and Cardano hard forks to adopt that, it would be really cool to actually have the lab measure Cardano and see where our decentralization sits in relation to Bitcoin and other major cryptocurrencies like Ethereum.
There are still some frustrations and challenges here and there, but overall it's important to understand that this is not a copy paste of Ethereum. It's a completely different computational model. It's a completely different accounting model, so you can't reuse the code of Ethereum copy/paste here.
They are the ultimate opt-out. You see, it's not about tokens. This is not about some crypto wallet here or Cardano versus Ethereum. This is, at its core, about self-sovereignty and economic agency, and ultimately getting to an objective reality where we're all treated equally, and we all have access to the truth. Not the truth according to someone, but the truth, the objective reality of things, whether we like it or not, whether it offends us or not, whether it's convenient or not, or whether it perpetuates your business model or not.
Ripple is old tech; it was designed way back, more than 10 years ago. However, it's perfect for the applications they are working on and for the bridge they want to create. You know, not everything is a competition, Charles. Will Ethereum be labeled as a security because of the stake lock up and slashing stake pools? Some people still believe that. It's an interesting one.
And at that point, at some point it'll go multi-platform, and then it'll go multi-chain. And that Bitcoin Ethereum support and other support, so there's a lot of moving pieces there. So many moving pieces. Yeah, it's exciting though. It is exciting because it's fun to build a consumer product that's a B2C product, and you know, I just did the uh, while...
...been working with the lace project for quite some time, talking quite a bit about how to optimize Cardano infrastructure in general, like the deprecation of DB sync, node-to-node protocols, uh, frequency notice CLI, you know, these types of things. We've also been working quite extensively on what is required for a multi-chain, um, so, uh, basically, how do you get it to work with Bitcoin and Ethereum, and Solana...
The fact that Ethereum is struggling to pave its way to non-custodial, liquid staking, when we have natively bet on that now, is noteworthy. There were some additional comments on Haskell, and at the time we chose to use it as a language, it was a bit too rough around the edges to be a commercial language. We, as an ecosystem, had to work really hard to vastly improve the quality of Haskell to get it...
About the future of Cardano, there was no reference to Ethereum, but that's what they wanted to write. This is where we're at, and it's not going to change, so we're just going to have to outgrow them all. The reality is that over the next five, ten, or fifteen years, Cardano is going to fade into the backdrop, and it's going to be much more defined by the things built on it by you, the ecosystem, and the community.
...everyday developers use it, but let's be frank about this: very few ecosystems have any semblance of maturity, ethereum included, and they continue to be works in progress. There continues to be a lot more to add. You know, believe that, then ask yourself, what version of Java was the version that reached perfection and everyone just migrated to it? What version of C sharp reached perfection?
Um, I helped build an architecture firm, so in the middle of Qatar, I helped build an architecture firm out there. Then I went to law school and I got into crypto. I got into crypto very early on. Um, that's where Charles and I met. We met a long time ago, so before Ethereum even launched, that's where I met Charles. I was there in Toronto and that's when it all just kind of made sense for me.
From a very difficult development model, what Alonzo has come out to be is actually a pretty functional model and a pretty functional ecosystem, and it happened in about half the time it took Ethereum. So, if you give us another year or two years, it's just going to be exponentially better and there's going to be so much more capability that's inside the system. And, it's a good follow-up.
Empowering the CFTC to oversee non-security digital assets spot markets could prevent future instances of fraud, false reporting, and market manipulation as those statutory authorities align with the agency's existing derivatives oversight mandate. Number three, safe harbors for digital asset creators, Bitcoin, Ethereum, and U.S. dollar-denominated stable coins...
It's not this hard internationally. I'm an international entrepreneur. Personally, I've been to 72 countries. When I was helping set up Ethereum, we haggled, negotiated with the Swiss government for a few months. They signed a document, we had operating clarity, they had clarity, we moved on. In Japan, there were a lot of onerous requirements with the FSA, but we got it done. The Foundation got it done.
Ecosystem, then, any person, regardless of who they are, should have the ability to look at a series of documentation specifications which are independent of a particular philosophy and just have its own way of expression, whether it's written in Math, Ela, or some language. They should be able to take that and write their own client. We did this with Ethereum Classic and actually with Ethereum, along with the Back-To-His client.
We did not talk to the Ethereum Foundation. We didn't ask for permission. We didn't have to get right access to their GitHub or something like that. We just took the IELE paper, the documentation of Ethereum, and from that documentation, we were able to build a Scala client from scratch. Fifteen thousand lines of code - it took a while but we did that and that client was able to...
...Ethereum has things that are off spec. You don't need to have a specification done to ship the product. It's just, if you do that, then that means you're basically seeing the code as the specification. For example, when Runtime Verification worked on the KVM project, they found out that the IELE paper was not a complete specification of the design of the Ethereum virtual machine.
They had to actually look at the implementation of the machine and examine how solidity worked among other things, in order to backward engineer exactly how the Ethereum Virtual Machine works. They were required to create a complete set of formal semantics for it. We will be in a similar situation in a little while in the beginning. Certain things are off spec. They're still high-quality.
And other places are using that Enterprise framework, which we consider to be a great gateway drug to get people into the Cardano ecosystem. Because once you get them into a blockchain system, they have wallets and identities, and you can use that to connect it by our protocols to a cryptocurrency. And, of course, the one we will connect it to is Cardano, because that's the one I care about, not Ethereum.
That too, and I'm going to Denver tomorrow, so we'll see what they say. There are thousands of Ethereum people and I'll kind of walk in and we'll see if these keyboard warriors will say to my face what they tell me over Twitter. Hey, Charlie, if you worked for a company, you would have been fired long ago. There are deadlines to meet; you can't take forever with any project. Let's talk about deadlines.
...destroying your argument, they actually teach you something, and you're having a constructive, productive dialogue. So, I think that this is, frankly, the standard our industry as a whole has to embrace. Ethereum agrees with us, they've given 5 million, along with others, to Stanford and set up a lab. They're starting to move in the peer review direction. Algorand is doing the same thing. Unity is...
...with new ideas always means there's going to be a suboptimal result. The dual disadvantage of not having a reference code base to look at had we forked Bitcoin or Ethereum, we would have all the lessons that they've learned over the 10 and 4 years respectively, to leverage from. In this case, we're doing it basically all on our own, and despite that, in about a year's time...
The first instantiation of it will be for the state pool rewards. Unlike Bitcoin, when you set up a mining pool at Bitcoin, you have to trust the pool operator to pay you. We, on the other hand, can guarantee that you're automatically paid without having to trust the pool operator. To make that work well, without a lot of dust transactions, it's actually useful to use Ethereum...
We are branching out to the new wallet back-end, and we have a really good strategy for obtaining terminal support, multi-sig hardware support, and for integrating smart contracts into the system. We also have a plan for asset issues in the system and for defining what the dapp development model is going to look like. Furthermore, we aim to achieve interoperability with the Ethereum virtual machine, as well as with web assembly and other emerging standards.
Looking at the resources they need to have a shot, I want to make sure that the first crop of people coming out doesn't just guess and read tutorials and play around with things until they screw it up. This is because 60% or more of the contracts on Ethereum have some sort of flaw in them, which is not so good. They need to actually know what they are doing, and so that means we got
So, it's better to start with high quality and small. Now, we might have missed the timing, or we might have misjudged the need for volume. That's why we invested a lot of money into Ethereum interoperability. All that junk on Ethereum could conceivably be ported over to the EVM that we'll have running on a sidechain, in its own black box, to avoid contamination.
This is antithetical to completely libertarian open cryptocurrency like Bitcoin or Ethereum or ADA but might be something you'd want to do if you are an issuer who's trying to have a regulated product, but you want to take advantage of the decentralization of the system. Now, why would you want to do that?...
So, we didn't get the Treasury system in. We had ideas about sidechains that were criticized. We had ideas about charming the consensus algorithm, creating more useful proof of work system. They were also criticized, so we still participated. We put a lot of money into Mantis. We created Mantis. In my view, it's the best of their client ever made, period. Ethereum - Etherum Classic. It's 15,000 lines of code. It's very concise. It's extremely well designed. It's. Performant. It's bug free, its security audited by a third party Kudelski, and that report is public. Honestly, you couldn't ask for more for a 1.0 product that was built from scratch for our ecosystem.
I'd like to believe that there's still lots of people in the Ethereum Classic community that have a good relationship with us and think we're good people and want to work with us, and I will make every effort to collaborate with those people.
Charles, how easy will it be for projects on Ethereum to switch over to ADA. So there are two schools of thought. And actually, they're philosophically represented by two completely different frameworks within the same Cardano ecosystem...
One school of thought is that most of what has been deployed on Ethereum, while well intended, doesn't really have viability or good business model behind it. Rather, they live in the prototyping or proof of concept. And there's going to need to be considerable redesigned re architecting and in some cases, just completely recoding of what's been done to make it eventually work in the future.
And then it's an argument of security, performance and operational cost. If you're a dapp developer, maybe the initial set because they were ICO funded are Ether guys, but if this is actually going to be a real ecosystem, you're viewing Ethereum as infrastructure like Amazon Web Services or Rackspace.
And then we could just make an argument that it's faster, cheaper, safer throughout our system than it is on the Ethereum system, and a lot of people will end up agreeing with us on that.
So that means that you can use it for Ethereum, you can it for Cardano or other platforms. That's the vision. We have, containerization experts we've hired and other people we've hired, we've brought.
One of the reasons why a large majority of Dapps in Ethereum don't work or have been riddled with security flaws. We had things like the DAO hack because the initial group of developers who were developing for Ethereum, we're pretty junior. Some were experts in doing great work and there's some great examples of that If you look at...
Solidity code where it's incredibly well written, but the system was over accessible and it emphasized mass adoption when it made no sense to emphasize mass adoption because we didn't have any Ethereum ecosystem, a lot of things figured out that you need to figure it out be able to comfortably write code.
If we bet wrong, we have a backup plan that's Yella, which we will continue to invest heavily in and that will allow everything in the Ethereum ecosystem work at our ecosystem and our eventually people to port over Java and C# and so forth.
What would you like to deploy them onto the system. What can you deploy today to Ethereum?
Well, Ray, what can you deploy today that you don't have to also connect to a server if it operates at scale? Go ahead and create Uber on a blockchain. You come back to me and tell me how much your operating cost is on Ethereum for that or EOS or any of these other guys?
I could fork Ethereum any day with my own software and give you guys an EVM. Great. Have I innovated? Have I given you a good development experience. Have I given you a secure environment to write these things in good languages to write these things in? No! And nor have the competitors.
They don't have anything that we have. They just don't. They have a fantasy, a fantasy that in 2017 was worth a lot of money and in 2018 disintegrated. And over 94% the value is lost in ????? of the Ethereum side.
They took old ideas from the 1980s and both some sort of voting system on top and said look how amazing we are, or they took Ethereum and forked it and said they're the world's best standard and they just ship faceless, lots of crap.
It's incredibly important to understand that when Shelley comes out, Cardano is basically on same footing with every other major cryptocurrency in the space, and that it is fully decentralized to be 50 to 100 times more decentralized than Ethereum, Bitcoin and EOS....
And sending hundreds of emails with advice and well wishes and sometimes constructive criticism. That's the sign of a healthy, vibrant community, and it's one that I've only seen once before, not with Ethereum, but with Bitcoin itself.
First off, Ethereum Classic. This one has been a pretty difficult, uh topic for me personally because you know Ethereum Classic was the unintended product, the unintended project. Uh, there was no plan to create Ethereum Classic. It came as a result of an event, and back when I joined the community, it was unclear whether the community was going to go anywhere, the project was going to go anywhere. It was unclear if the Ethereum classic c was going to survive, but it was mostly a protest coin...
We said we don't know where we're going. We don't know what's going to happen but you know, we feel that this this issue with the DAO hack has been handled very poorly and that many people invested in who got involved in Ethereum believing that code is law. Even language was made illegality ????? and a lot of people cared a lot about basically preserving the original intent as they saw of the Ethereum blockchain, which had then been violated by this hard fork...
And hopefully grow and become its own thing. So, I put my money where my mouth was, opened up my wallet, and spent my own money to build a client from scratch. Now what's happened since that event, we've seen Mantis grow from a concept to an actual production system that now works both with Ethereum and Ethereum Classic. And members of the Ethereum Foundation have even reached out to us, asking us to find a way to change the software license, which we will do from MIT to Apache, and try to make it a Hyperledger project so that people in the Ethereum ecosystem can use our code base for their products and projects and it can be under good governance...
We've also seen now two major summits for Ethereum. One was in South Korea, the other was in Hong Kong, and we've seen a formation of a reasonable governance group within the ecosystem.
So, there's an open question now of well, what should IOHK participation be with Ethereum Classic and does this participation in any way compromise our ability to work on Cardano, slow it down, or in some way compete with the mission goal and vision of Cardano? Well, in a way, there's been a great degree of synergy...
The work on Ethereum Classic has definitely helped us have a production system that we could very quickly repurpose to test Ethereum interoperability for smart contracts in our system. So just by having Mantis, we were very easily able to plug in the K-EVM and plug in Yella and run solidity code in our system...
It would have been much harder to do that and more expensive to run these tests had we not done what we did with Ethereum Classic.
Second building that client trained our developers to understand how the Ethereum ecosystem worked. They literally started from nothing, just from the IELE paper and from the documentation and wrote 100% new code in Scala, so that exercise was incredibly valuable, creating a knowledge transfer and bridging the skill gap so that we understood where Ethereum is at and all the things it could do and all the things it couldn’t do. It's easy to be overly academic or to kind of throw the baby out with the bathwater...
One of the most difficult parts for our participation was that we predicted that there would be funding issues with Ethereum, we wrote several blog posts and lectured on a pretty regular basis about the need for something like a treasury in Ethereum Classic...
So now we're left in a situation where we're not getting any value as a company for contributing to the Ethereum Classic. We're left in a situation where the community has been very resistant historically to attempting to create mechanisms such as a treasury system to give us some certainty that if we participate as a company in the effort, we can recoup our losses, recoup our bills, and continue to contribute, and that we've already gained...
As much value as a company as we can from Ethereum classic at the moment, there's nothing innovative in the road map unless we propose something, and we do have many great things.
We have nipals ?????. We have a DAG protocol called parallel Change which works very well for proof of work. We have considerable improvements we've made to the Ethereum virtual machine. And all of these things could be put into a Ethereum classic. They take time, effort and money and a great degree of coordination, and to me it doesn't feel like it's worth the effort to put these things in, given the current structure of things...
So, we'll talk to the existing members of the Ethereum Classic community and see if there's some way that our continued participation can be subsidized. If we can't come to that arrangement, what we're going to do is retire the Mantis client for the Ethereum classic. We'll continue to support the Hyperledger version if we can get it into the Hyperledger for Ethereum support, because there was commercial value in that...
You cannot make an unlimited infinite commitment to something you have to at some point. Say that there has to be something that comes back, and we've delivered. We at the moment you could run 100% of the Ethereum Classic network on Mantis...
It is still the only client that was built from the ground up specifically for Ethereum Classic, and it was built in Scala, and it was built with great engineering practices, and it was built by great engineers, and it was built in a very transparent way. If you go to our YouTube page, IOHK YouTube, you can see the weekly stand-up meetings that we did for Mantis, and I think there's damn near hundreds of them, and we didn't miss a single one every week we showed up and we, even if there was a little progress or a lot of progress, we showed it off and people could watch us go from an idea to a fully constructed client and they can see the commits in the repository...
So, moving into 2019, we'll see what we do. But at the moment, unless the funding source comes in for Ethereum Classic, we're going to retire that team. We learned a lot. We love the. Community, we love the people there and we think it was worth the effort worth the time that was put in.
I had a great chance to go talk to the guys at Tangem. Now these are these are pretty cool. So these are actually full Bitcoin and Ethereum wallets and those little chips, right there are actually NFC trusted hardware modules and basically to use them. It's really nifty. I'll show you guys.
There's about 10 years of history in the cryptocurrency space and there's a lot of projects that focus a lot on governance From Dash to Tazos and there's good models to learn from, and my belief is that this does not not not be USP. This ought to be a best practice. Like like the Bitcoin improvement proposal of the Ethereum improvement proposal.
And there's already starting to emerge a whole development experience with this whole notion of Web3, where you can take that notion of a decentralized infrastructure and connect it to your web application and what's really important to me is to avoid vendor lock in what I don't want to happen is to say that once you've committed and you've deployed on a particular piece of infrastructure, whether that be Ethereum or Cardano or EOS, whatever that might be, that you're locked in and you're trapped there.
I don't worry about Ethereum's proof of stake at all. So, the question is what do you think about Ethereum running proof of stake they ever get here - great. Welcome to the party. I feel we are ahead of them in terms of research and in terms of engineering, in terms of clarity. On how we're going to roll it out, what we're going to do. They worry about fundamentally different problems than we worry about.
And frankly, if you wanted to Shard with the approach that Ethereum is using, it would make a lot more sense if they just did a state based election system with a, you know, like an MPC generating random numbers and elect, you know, 250 delegates and have them run something like rapid chain.
What do you do? Well, cryptocurrencies have money at stake. They have, and they're not big. If you actually look at these protocols like we wrote for Ethereum Classic and now it works with Ethereum, a client, a full node and it's only 15,000 lines of code in Scala. So, at the end of the day, these protocols that are in the cryptocurrency space, the infrastructure layers...
In addition to that, we'd like to set up a podcast where we run it maybe once to twice a week, similar in format to the let's Talk Ethereum podcast, let's talk, ETC Podcast at Christian Severino runs, but given the scope and scale of Cardano we'd like that podcast to be run by more than a single host.
So that's the whole point of having an overlay layer like for example when you want to mix accounting computation together. As Ethereum has done. Or, as EOS has done, or the other guys have done.
There's not a master slave relationship. It's a firewall relationship, meaning that it's easy to move assets to and from. On the 1st generation of sidechains we launch, will be custom tailored for K-EVM and IELE, as this is for interoperability with those smart contract paradigms, but later versions will include more generalities, so we can wire our system together with things like ETC and Ethereum and future versions of other protocols or potentially even Bitcoin, depending upon where their upgrade path sits and your cryptocurrency as well, just follow an open standard.
So Michael Shin is talking about a Dapp store for Cardano. This something near and dear to my heart. Recently Naomi Brockwell released a video of me when I was the CEO of the Ethereum project. Very early days - April of 2014. Part of the pre interview I was actually discussing this idea of Universal App Store for dapps. don't know if that made into the interview or not. I can't recall, but that was something I did discuss a lot back in those days and it's something I never forgot about.
So if you Google Mad Max Ethereum gas pricing something like that, you'll see a paper that was submitted to people in the no.
Whenever you create something good, people fork it. People steal it like no one really cared about Ethereum until Ethereum was successful and everybody wanted to be Ethereum and a lot of people forked Ethereum and stole the code and said, hey, look, we're better than Ethereum.
There are things that can go wrong there in plutocracies, not necessarily the best government. So, you have to think carefully long term about how to ameliorate that. So, it's the first step. There have been many finally. There's also this idea of computational fuel, which is what Ethereum pioneered.
So, there was a great paper written by IBM called Adept, and they were using TeleHash, BitTorrent and the Ethereum blockchain back in, I think it was 2015 to study IT and I'd encourage people to look into that paper and I see things like HOLO chain or avalanche, just kind of a natural continuation of that line of thought, but with different ways of handling consensus.
So Litecoin is the silver to bitcoins gold and then feather coin comes out where the copper to the silver right and that's where we're at and then suddenly, you know this innovation comes out and says, hey. Ethereum and NXT actually got to give the NXT guys credit. They were actually the 1st in my view, major innovation and bitshares was pretty innovative too.
And so these new wave of things like bit shares and NXT and Ethereum came out and then it got really interesting there. And then all this new stuff came on the that and now we're entering the third generation. So Vitalik is right, we've probably peaked on the 2nd and we're getting crowded in that side of the space.
And So, what we haven't figured out in the cryptocurrency space is what that triangle needs to look like for us to actually have an innovation. So, for example, if you have crypto kitties. Should 100% of that run on Ethereum? Or is it OK for a large chunk of that to run on a server?
And maybe we use Ethereum as a verifier and an auditor to make sure that there's a consistent state amongst the users, but the actual game itself is conducted out of band and there's some notion of eventual so eventual.
So the other side of Cardano is about thinking more holistically about where or how, when and who are going to run my applications and what am I giving up for what I'm gaining and have a much more nuanced scenario than the replicated computational environment that Ethereum has, which is you add more minors.
So there's already been a lot of innovation done in the Ethereum community and it would be nice to leverage that innovation and try to take it to the next level.
And there are some people in the ethereum community who really care about this a lot.
We've done already one major update to it and in my opinion, it's the best Ethereum client on the market.
Like Ethereum support and ERC 20 support and so forth, and some enhancements we've made to.
Recapping the whole year, you know, the other thing is I've become good friends with a lot of people in the Ethereum Classic ecosystem, and so it is really cool.
The success of Ethereum kind of was the end of Bitcoin maximalism in my approximation because it proved you could have legitimate options that weren't clones of Bitcoin that had totally new innovations and brought completely new ideas.
One of the great advantages of working with the Ethereum Classic community is that they proved how to do that.
And we think that they're going to bring a heck of a lot of innovation to the space, which is very different than the innovation that was brought with the Ethereum model.
IELE ellow is more of a logical refinement of everything that Ethereum was about, and just trying to take an old thing and make it better.
You know, it's really a bad world if everything you do vendor locks you into a particular blockchain solution like Ethereum or EOS or Cardano.
There's dozens of them running around, even some people in the Ethereum space are starting to take this real seriously.
This is the philosophical difference between ourselves and EOS and Ethereum and other ventures in the space.
Google is a multinational company, one of the largest, most powerful engineering companies in the world. They have some phenomenal scientists working at Google from world famous cryptographers to infosec people. If Google is going to do a cryptocurrency, they don't need to partner with me, they don't need to partner with Ethereum or Bitcoin or anything else. They're just going to go ahead and do their own thing.
Then there needs to be an entity that's kind of the evangelist, and it goes around and says you should build on Cardano, use Cardano in your stack. Cardano is the most amazing thing in the whole world and that entity is EMURGO, they're kind of like our version of Consensus. Consensus is tremendously successful for the Ethereum ecosystem, and they've done just amazing work for Ethereum, and our hope was that there could be a Consensus for Cardano, and that's what EMURGO does, amongst other things.
OK. And I told you how to fold it. That was the input. Well, here's the problem. How do you know that I've actually done that computation correctly? This is a broader problem in outsourcing computation, so the solution for Ethereum is by replication.
We're going to go with it and that's basically how Ethereum works. You have a collection of shared computation. These nodes will do it, and if you have a majority answer, that's the answer. Well, the problem is that doesn't scale because as you add more nodes to do the computation, you're getting more assurance that the computation has been done correctly, but you're not actually speeding the computation up.
Second, they need to understand that you haven't double spent those tokens. So how do we know that you've taken legitimate Bitcoin and you haven't also sent it to Dash, or you sent it to Ethereum or something like that? So, there is an existential question, and then there's a non-existence of a double transaction.
Now that Ethereum Classic has a good foothold will IOHK continue to support ETC development? That's a good question. So, you know, when ETC first came out, I wanted to prove a point, that it is immoral when you advertise something for an ICO to then turn tail and completely do the opposite because of legal inconvenience.
Sorry, if you sold something you have to deal with the consequences. So, when I got involved in Ethereum Classic, if anything, it was to prove that principles matter and that it's not OK to reverse. People need to have the option if they believe in what Vitalik has done, they can keep with Ethereum.
If they believe that the original intent should be maintained, they can sell their Ether and stay within the Ethereum Classic ecosystem and basically people were given a proper choice, not a rushed choice. Now one of the problems is that the Ethereum Classic community in the beginning had no credibility because the majority of the infrastructure developers went over to Ethereum.
So, the Rust guys, the Geth guys, these people, they lived on the Ethereum side and there was nothing going on on the Ethereum Classic side that would indicate that Ethereum Classic actually had the competency you would expect of someone who could not only maintain the chain, but also upgrade the chain and grow the chain.
So, we felt it was very important for us to invest money into building from the ground up a completely new client from nothing. So we just took the IELE paper, the documentation we borrowed no code, we brought together a great team of Scala developers. We called them the growth team and we said to have fun, and they spent basically a year constructing at the moment the most concise Ethereum client ever built.
It's only about 12,000 lines of code. It's got beautiful test coverage. It's been security audited. It's fast, it's easy to use, it has the Daedalus frontend and we're going to make a lot of improvements to make that even better and bring in native ERC20 support so you can hold your ERC20 tokens in and in addition to Ethereum classic and we just went and did that.
Now we're at a point where Mantis is not only out, it's gone through a major update and it's going to go through an even another major update. And we have to kind of make a decision of where will IIOHK go with Ethereum Classic.
So we're going to have a summit in September, and I'll be attending and presenting and we're going to be showing off our latest version of Mantis where we have built in Ethereum support. So now Mantis targets both Ethereum Classic, Ethereum, and it's an ERC20 wallet. So, you can basically have a God's eye view of all those asset types, and it will have a few other things built under the hood that are very nice. And because this is a full node you can actually technically run the entire Ethereum network or entire Ethereum Classic. Just off that code base.
Then we'll discuss at the summit with the other people what should 2019 look like, and does it make sense to scale up effort, keep the effort at the same level or gradually scale down effort and, you know, let the community manage that that node that we've written, but I think it's overall mission accomplished most people respect Ethereum Classic at this point. Anything, just for its principles. Most of the fights of the past have been resolved and even Vitalik himself stil holds his Ethereum Classic. And a lot of people in Ethereum ecosystem, turns out never sold their Ethereum classic
Bitcoin only covers a small sliver of it, and that's one of the original biggest frustrations that I had and others had with Bitcoin was It only covered a sliver of this beautiful, rich financial ecosystem. So what we decided to do is say, all right, why don't we build an accounting ledger that allows you to represent the types of assets and those types of transactions in the most efficient and parallelizable way possible? 00:20:29 So, you can get these to scale long-term performance, but then you can also do everything that Wall Street is used to doing. So, we created a domain-specific language called Marlowe. We also created a general-purpose programming language that was functional that Marlowe embeds in called Plutus, and we really rigorously thought about the UTXO accounting model. We also came up with a method to issue assets within that model that's interoperable with the Ethereum-style account.
So, that’s awesome and that’s gonna to kind of finish what Bitcoin started. Then you have the Ethereum-style computational model, which is replicated on some notion of distributed computation. But what if these programs are stateful? You send messages to them, they wake up, they do something, they output something, and you can chain them together. There are all sorts of crazy things you can do.
So if you want to build a DAO or you want to build a ride-sharing application and these types of things, you can now create these types of programs. Ethereum kind of brought this model to the forefront. It's a cool model and an interesting model. The problem is that model currently does not scale, and anyone who's actually using that model for anything that’s more than a toy has had to interface that with off-chain activity.
Basically, they've either had to leave Ethereum or create a two-layer network where the blockchain does a little something, and then there's some server off in the distance that does something else. That's OK, because it's prototype technology and, you know, not so capable in the beginning. So, we have a bunch of threads of research that we're conducting about how do we make that model better.
Secondly, you have to ensure that when you do things on this slow engine, they're done as securely as possible, as reliably as possible, and with the most interoperability as possible. That's why we engage with runtime verification. We spent a lot of time and effort understanding Ethereum, so they wrote the K-EVM paper, wrote formal semantics for that, but then also built something completely new that is built from the ground up to be really the best foundation for a virtual machine for smart contracts in this model.
Let's be the best accounting model and replicate everything that Wall Street needs. Let's be the best Ethereum model so we can be both interoperable with what Ethereum has done and future proof for everything that people are going to want to do and allow them to write smart contracts in the languages that they care to.
OK, that layer would be faster and have more capabilities than Ethereum and would certainly have a kind of a better development experience because we probably could be more clever about the surface languages that target IELE.
We already have an Ethereum version of CL running. It's been running for over a month and the IELE version will be running at the end of this month, so you know all the things you come to know and love with Ethereum you'll be able to do, and then we'll have some new capabilities that we roll out as well.
For example, if you look at Ethereum and Bitcoin, the coupling over time has already started to naturally decrease. And when Ethereum goes up or down, or Bitcoin goes up or down, they don't impact each other as much as you'd think. They still do bitcoins, still a Goliath, and Bitcoin usually is the kind of the Canary in the coal mine.
So, it's just Max and Oliver, and it's like, OK, you have some money and passion, but you need to build a team. So, we talked for a while, and my advice was I could become an advisor and help you guys, since you now have capital, to make some obviously good decisions. For instance, you couldn't have money sitting in a trust or personal account; you needed to put that money into some sort of legal structure designed to accomplish the mission of the people who gave you the money, like with the Ethereum, Vitalik and the rest put the money in the Ethereum Foundation.
And you know IOHK is not just the Cardano company. We're a blockchain company and we build blockchain technology. We develop protocols, and as a consequence of developing those, we're always thinking carefully about who could benefit the most. For instance, I recently tweeted to Justin Sun, recommending that he use Mantis for Tron because I noticed that Justin seems to be using Ethereum Java with some modifications, but it's still essentially Ethereum Java.
That code base is not optimal, and if you want to be on the Java virtual machine and use Ethereum, I feel that Mantis would be a far better foundation to build on with much more potential for innovation than Ethereum Java offers. Plus, there's less risk given our code of security. That's why I made that recommendation—it's open-source technology with no partnership. I don't profit from it. I'm merely suggesting that they have a community, and if they fail, it could hurt a lot of people.
Nick Szabo had it in the 90s and guys like Sergio Lerner had been working on it in the early 20012/2013 Vitalik was working on it, so we teamed up together and we created Ethereum and you know, obviously Ethereum kind of led the second major wave and also brought the ICO Revolution and so forth.
Well, here's what happened The Ethereum and the ICO Revolution changed the narrative and stole the entire spotlight that Bitcoin had.
And it was equally Likely when you ran into a taxi driver and you were talking about cryptocurrencies that they held Ethereum then they held Bitcoin, and a lot of people actually believe that Ethreum could actually supplant Bitcoin one day, so there was a reaction that said, "Hey, no, Bitcoin is the only thing. Everything else is useless. It's all a scam because of a premine.” Because of this, logic just went completely out the door, and it almost became like a cult.
Unfortunately, that just doesn't seem to be the case. But that is what it is. So maximalism, in my view, is bad. Maximalism, in my view, will slow down the ecosystem and in my view, will make Bitcoin much less competitive. And we live in a Darwinian environment, so it doesn't really matter, because that will not slow down the cryptocurrency space. That will not slow down my innovation or Ethereum innovation or other actor's innovation. And we're just going to keep going till someone gets it done.
It's incredibly frustrating. Twitter is just a bad platform. It's not innovative, it's old. It really needs a refresh. They need to think more careful about it and you know, Slack has its issues too. We originally created the Cardano and Ethereum Classic communities in Slack.
So, the act of doing everything that we figured out how to do for Ethereum has been franchised, white-labelled, and is now a science now. People know how to do it really well, and Ethereum is used as the majority platform because it's the most secure, it's the largest, and it's the best understood, with the best tooling existing there.
We get all that tooling for free with the K-EVM, so anything built for Ethereum runs in our system, but it runs faster, safer, and better. So, if people are just doing apples to apples, we'd be a great platform for that. But we're entering ICO 2.0, which is the notion of the security token.
Then if the token has real utility and it actually really does become decentralized and the person who sold it is no longer necessary to maintain it, like what's recently happened with Ethereum, the token may become a non security and as a consequence of being a non security it would then be regulated by a different agency. In this case probably the CFTC for the United States.
For example orbs is deploying as an ERC 0 token on Ethereum. But you don't actually get any utility or use out of that. You have to send it to an overlay system that actually runs its own BFT and it does all the magic and it's doing its own thing.
...and then to make matters worse, Microsoft tried to get people into a development paradigm called ActiveX, which was horribly insecure, and it was very bad for everybody, but it also locked people into Internet Explorer, and now we see companies running around and say use Ethereum or use EOS or use IOTA or use Cardano.
So the whole point of the Daedalus model that we've developed for Cardano is this idea of an application ecosystem and it's blockchain agnostic. So you'll be able to deploy that on Ethereum or deploy that on Cardano, you want to go live in hell, deploy it EOS.
I don't always agree with the Vitalik, but I've never had a bad conversation with him and I do respect him. He's a good guy at the end of the day and he It's good work. and I will never in my life ever say that he doesn't care about Ethereum or the mission of Ethereum or the goals of Ethereum.
So, as it stands right now, what we believe the best option is to take the Mantis client that we've constructed for Ethereum Classic ETC and to make the virtual machine component of the Mantis client pluggable.
So, at the moment it's using the Ethereum virtual machine.
I understand how difficult this is. We live in a space that tends to measure things in terms of days and weeks. And most of our competitors tend to deal with forked code so they don't start from scratch. They start from Bitcoin, or they start from Ethereum or from Bithares.