Charles Hoskinson: Cardano
技术与编程音乐与艺术AI 与机器学习生物与进化数学
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bitcoindonproofstuffsaidgamecardanodoinggoingdonetryingmodelwholestakefunsayingchaingotguycode
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🎙️ 完整对话（8069 条）
Lex Fridman (00:00.000)
The following is a conversation with Charles Hoskinson, founder of Cardano, co founder
以下是与Cardano联合创始人Charles Hoskinson的对话
Lex Fridman (00:05.560)
of Ethereum, and a mathematician who is one of the most well read and knowledgeable people
以太坊的创始人，也是一位最博学、知识最渊博的数学家
Lex Fridman (00:11.160)
on the technical side of cryptocurrency that I've ever spoken to.
关于我曾经谈过的加密货币的技术方面。
Lex Fridman (00:15.800)
Quick mention of our sponsors, Galila Games, Allform, Indeed, ExpressVPN, and Asleep.
快速提及我们的赞助商 Galila Games、Allform、Indeed、ExpressVPN 和 Asleep。
Lex Fridman (00:23.480)
Check them out in the description to support this podcast.
在说明中查看它们以支持此播客。
Charles Hoskinson (00:26.960)
As a side note, let me say that Charles is not just a mathematician or cryptocurrency
顺便说一句，查尔斯不仅仅是一位数学家或加密货币
Charles Hoskinson (00:31.640)
innovator, but also a Colorado based farmer of bison and mushrooms, a gamer, a fisherman,
创新者，也是科罗拉多州的野牛和蘑菇农民、游戏玩家、渔夫，
Lex Fridman (00:40.560)
and a world traveler.
和一个环游世界的旅行者。
Charles Hoskinson (00:41.960)
When I asked him if he has a nice professional picture of himself, he sent me a picture of
当我问他是否有一张漂亮的职业照片时，他给我发了一张
Charles Hoskinson (00:46.680)
him in Mongolia with a hawk on his shoulder, meeting the Mongolian president.
他在蒙古肩上扛着鹰，会见了蒙古总统。
Charles Hoskinson (00:52.840)
That to me pretty much says it all, speaking to the humor and the intelligence of a man
对我来说，这几乎说明了一切，谈到了一个人的幽默和智慧
Charles Hoskinson (00:57.780)
who is bold, innovative, and does not shy away from a bit of fun and a bit of controversy,
他大胆、创新，不回避一点乐趣和一点争议，
Lex Fridman (01:04.120)
which makes him a fascinating human being to explore ideas with.
这使他成为一个令人着迷的人，愿意与他一起探索想法。
Charles Hoskinson (01:07.880)
I do want to say in terms of ideas that, at least to me, cryptocurrency is much bigger
我确实想说，就想法而言，至少对我来说，加密货币要大得多
Charles Hoskinson (01:13.600)
than just a way for a few Americans to make a quick buck through meme driven speculation.
而不仅仅是少数美国人通过迷因驱动的投机来快速赚钱的一种方式。
Charles Hoskinson (01:19.320)
It is technology that enables freedom from oppression, from suffering in the world, because
正是技术使我们能够摆脱世界上的压迫和苦难，因为
Lex Fridman (01:24.340)
money is power.
金钱就是力量。
Charles Hoskinson (01:26.360)
Mongolia, for example, was a reminder of that for me.
例如，蒙古就让我想起了这一点。
Charles Hoskinson (01:30.300)
Next day, after talking with Charles, I spoke with Wyoming Park, who is a North Korean defector,
第二天，在与查尔斯交谈后，我与朝鲜叛逃者怀俄明州帕克进行了交谈，
Lex Fridman (01:35.880)
and who spent time in Mongolia, as many defectors do, in her and their escape from North Korea.
和许多叛逃者一样，他在蒙古度过了一段时光，经历了她和他们逃离朝鲜的过程。
Charles Hoskinson (01:42.360)
Her story, the story of North Korea, the story of atrocities throughout the 20th century
Charles Hoskinson (01:47.840)
committed by Hitler, Stalin, and others, is a reminder that the world is full of darkness,
Lex Fridman (01:54.600)
but it is also full of beauty and love, and it is a world worth fighting for, in every
Charles Hoskinson (02:00.640)
way we know how.
Charles Hoskinson (02:03.040)
This is the Lux Friedman podcast, and here is my conversation with Charles Hoskinson.
Charles Hoskinson (02:22.760)
If you
Lex Fridman (02:37.640)
self evolve, almost like gnomic.
Lex Fridman (02:39.560)
And then you have Wolfram running around saying,
Lex Fridman (02:41.200)
hey, we can come up with these like very simple rules
Lex Fridman (02:43.400)
and we can reconstruct all of reality
Lex Fridman (02:45.160)
at some arbitrary point.
Lex Fridman (02:47.640)
So I have absolutely no idea what's right.
Lex Fridman (02:50.280)
You know, I look at it kind of like a formal system
Lex Fridman (02:52.560)
and I say, well, if you're stuck within the system,
Lex Fridman (02:54.920)
it's hard to actually understand
Charles Hoskinson (02:56.320)
that you're inside the system.
Lex Fridman (02:57.640)
You know, it's kind of like an object language
Charles Hoskinson (02:59.920)
to a metal language.
Lex Fridman (03:01.320)
You know, there's this thing that is outside of it,
Lex Fridman (03:03.760)
but because you're constrained and limited by the simulation,
Lex Fridman (03:06.720)
you can't really understand the nature of the thing
Charles Hoskinson (03:09.160)
that's outside of it.
Lex Fridman (03:10.800)
It's almost like Minecraft.
Charles Hoskinson (03:12.040)
You can build these redstone computers within Minecraft
Lex Fridman (03:14.880)
and simulate and emulate things within it,
Lex Fridman (03:16.600)
but you really can't go outside of that environment.
Lex Fridman (03:19.400)
The people outside of it can formally prove
Charles Hoskinson (03:21.120)
that it's correct or whatever,
Lex Fridman (03:22.760)
but the creatures inside of the system
Charles Hoskinson (03:24.680)
can't hope to perfectly understand it
Lex Fridman (03:27.320)
and prove something about it.
Charles Hoskinson (03:28.800)
Well, also the question is, it's a computation question.
Lex Fridman (03:31.840)
You know, does P equal NP?
Charles Hoskinson (03:33.240)
Because you'd have to be able to emulate all of these.
Lex Fridman (03:35.280)
How long will it take?
Charles Hoskinson (03:36.240)
Yeah, exactly.
Lex Fridman (03:37.080)
And so I have no clue what type of language
Charles Hoskinson (03:39.840)
it would have to look like,
Lex Fridman (03:41.160)
but it would probably not be anything we're used to
Charles Hoskinson (03:44.720)
at the moment.
Lex Fridman (03:45.560)
It'd have to be something else.
Lex Fridman (03:46.520)
And we'd have to have some more fundamental resolution
Lex Fridman (03:48.680)
of the relationship of these formal systems
Lex Fridman (03:50.800)
and how they get extended.
Lex Fridman (03:52.240)
So that's like a 22nd century question
Charles Hoskinson (03:54.480)
instead of a 21st century.
Lex Fridman (03:55.720)
Do you like, do you find the Stephen Wolfram idea compelling?
Charles Hoskinson (03:58.840)
It's a very different way of programming,
Lex Fridman (04:01.480)
which is you set some rules,
Charles Hoskinson (04:03.160)
you set some initial conditions,
Lex Fridman (04:04.520)
and let it run and see what happens.
Charles Hoskinson (04:06.120)
Yeah, and it's not a new concept.
Lex Fridman (04:07.600)
I mean, like the Santa Fe Institute's been doing that
Charles Hoskinson (04:09.760)
for a long time and you can use it for economic modeling
Lex Fridman (04:12.800)
and you can show that in certain cases,
Charles Hoskinson (04:14.640)
there's this concept of simple rules
Lex Fridman (04:16.320)
evolving into a complex system
Charles Hoskinson (04:18.160)
is somewhat more predictive
Lex Fridman (04:20.240)
than trying to build a complex top down model for things.
Lex Fridman (04:23.480)
And I guess there's some analogies to these things in AI
Lex Fridman (04:25.880)
where you start with some simple things
Lex Fridman (04:27.520)
and then somehow it just figures stuff out
Lex Fridman (04:29.520)
in its environment over time
Lex Fridman (04:30.920)
and much better than if you actually tried to model it
Lex Fridman (04:32.760)
with prologue or something like that.
Lex Fridman (04:35.720)
So that is exciting
Lex Fridman (04:38.640)
because you get to just do a few things,
Charles Hoskinson (04:40.800)
let the thing run and then see what happens.
Lex Fridman (04:43.080)
And that's a lot of fun.
Charles Hoskinson (04:43.960)
In fact, it got so exciting, Wolfram came to us and he said,
Lex Fridman (04:46.740)
''Hey, let's do an NFT marketplace.''
Charles Hoskinson (04:48.440)
I said, ''What do you wanna do?'',
Lex Fridman (04:49.280)
and he said, ''I got all these universes to sell.''
Lex Fridman (04:51.360)
And I said, ''Okay, well that's gonna be fun.
Lex Fridman (04:54.620)
So we're gonna set up an auction system
Charles Hoskinson (04:56.120)
or something like that with him.
Lex Fridman (04:57.280)
And I think maybe end of this month or next month,
Charles Hoskinson (05:00.000)
we'll figure out how to do NFTs on Cardano
Lex Fridman (05:02.800)
with Wolfram universes.
Lex Fridman (05:04.520)
So as soon as we can sell one, I'll give you one
Lex Fridman (05:06.880)
and then we can all just claim
Charles Hoskinson (05:08.360)
that we're living in some sort of Wolfram simulation.
Lex Fridman (05:10.700)
I don't know how much money I have,
Lex Fridman (05:12.160)
but I'm gonna give everything I have to get rule 30,
Lex Fridman (05:15.400)
which is one of his universes that he's created.
Charles Hoskinson (05:18.240)
One of the first ones where he discovered
Lex Fridman (05:21.560)
some interesting complexities.
Lex Fridman (05:24.280)
I think rule 30 is Turing complete or is that 45?
Lex Fridman (05:26.960)
I can't remember which one.
Charles Hoskinson (05:28.600)
You know your stuff.
Lex Fridman (05:29.720)
Actually, I'm not sure if they proved anything
Charles Hoskinson (05:31.240)
about rule 30 in terms of whether it's Turing complete
Lex Fridman (05:33.340)
or not, but there's fun competitions on it,
Charles Hoskinson (05:35.920)
which is trying to predict something about rule 30,
Lex Fridman (05:38.120)
about the way it evolves.
Lex Fridman (05:39.320)
And so far, nobody's been able to do it.
Lex Fridman (05:41.440)
Just like looking at the middle column,
Charles Hoskinson (05:43.320)
try to predict as the system evolves,
Lex Fridman (05:45.520)
say anything like conclusive about the future
Charles Hoskinson (05:49.480)
of the system as it evolves.
Lex Fridman (05:50.920)
It's fascinating.
Charles Hoskinson (05:51.880)
It's both beautiful that simple rules
Lex Fridman (05:54.560)
can create that kind of complexity.
Lex Fridman (05:56.600)
And it's also sad that we can't like make perfect sense
Lex Fridman (06:01.600)
of it, like perfectly predict the future.
Charles Hoskinson (06:05.880)
Even though it's all simple and deterministic,
Lex Fridman (06:08.240)
we can't say something conclusive about like
Charles Hoskinson (06:10.620)
when the thing will end.
Lex Fridman (06:12.240)
When will this little cellular automata
Charles Hoskinson (06:14.160)
like evolve in a certain way
Lex Fridman (06:15.680)
and then nuclear weapons will be invented
Lex Fridman (06:17.320)
and they blow each other up
Lex Fridman (06:18.260)
and then they'll just be this empty 1D cellular automata.
Lex Fridman (06:21.440)
Well, doesn't that make it fun though?
Lex Fridman (06:24.180)
Yeah, it's fun, but when you're trying to create
Lex Fridman (06:27.160)
and we'll talk about something that operates the economy
Lex Fridman (06:32.880)
and the way humans transact and cooperate
Lex Fridman (06:36.000)
and fall in love and work together,
Lex Fridman (06:39.360)
then you'd like to be a little bit more formal
Lex Fridman (06:41.160)
and try to say something conclusive.
Lex Fridman (06:42.760)
If this entire universe is just cellular automata,
Charles Hoskinson (06:45.900)
then being conclusive is kind of hopeless,
Lex Fridman (06:49.440)
generally speaking.
Lex Fridman (06:50.400)
And the hope is, I guess, that there'll be pockets
Lex Fridman (06:54.160)
of which within the cellular automata
Charles Hoskinson (06:57.280)
where you could be predictive,
Lex Fridman (06:58.720)
where you can formally show that something is true
Lex Fridman (07:01.920)
and then you can rely on that.
Lex Fridman (07:03.560)
You'll be resilient and all those kinds of things,
Charles Hoskinson (07:05.360)
even though the rest of the thing is a giant mess
Lex Fridman (07:08.720)
that's unpredictable.
Lex Fridman (07:09.560)
Didn't they call that Laplace's demon?
Lex Fridman (07:11.120)
Yes, I wonder what the demons up to these days.
Charles Hoskinson (07:14.480)
Okay, thank you for entertaining me with that.
Lex Fridman (07:17.400)
But sticking on philosophy, you've also mentioned,
Charles Hoskinson (07:21.160)
among others, that Bertrand Russell and Saul Kripke
Lex Fridman (07:24.680)
are two of your favorite philosophers.
Charles Hoskinson (07:27.960)
Maybe you can comment on what ideas of theirs
Lex Fridman (07:30.060)
you find insightful and also what do you use the difference,
Charles Hoskinson (07:33.760)
because you're both an engineer and a thinker,
Lex Fridman (07:37.280)
so what do you use the difference
Lex Fridman (07:38.480)
between philosophy and computer science?
Lex Fridman (07:40.640)
Yeah, so yeah, there's both a deeply human element
Charles Hoskinson (07:43.960)
to both Russell and Saul.
Lex Fridman (07:45.440)
And then there's this, of course, amazing work
Charles Hoskinson (07:47.780)
that they did in the late 19th and 20th century.
Lex Fridman (07:50.920)
And you can't really talk about Russell or Saul
Charles Hoskinson (07:54.360)
without also mentioning Wittgenstein and Tarski.
Lex Fridman (07:58.800)
Because when you actually look at these guys
Lex Fridman (08:00.800)
and you put them together, what they were attempting to do
Lex Fridman (08:02.840)
was increase the level of precision we had
Charles Hoskinson (08:05.080)
in analyzing both formal languages
Lex Fridman (08:06.840)
and also language in general.
Lex Fridman (08:08.960)
And so Wittgenstein makes no sense at all to me.
Lex Fridman (08:11.520)
So there's amazing people out there
Charles Hoskinson (08:13.620)
that somehow can parse that, but.
Lex Fridman (08:15.440)
He doesn't make sense to himself either.
Charles Hoskinson (08:17.280)
I think you're right about that.
Lex Fridman (08:18.260)
However, Kripke has Kripkenstein.
Lex Fridman (08:20.240)
He has his whole building on that, right?
Lex Fridman (08:24.520)
And he built a whole hierarchy.
Lex Fridman (08:25.800)
And at least there I have modal logic
Lex Fridman (08:27.600)
and I have the little boxes and I have the diamonds
Lex Fridman (08:30.420)
and I can do a computation and I can kind of reason
Lex Fridman (08:32.700)
about things that people are saying.
Lex Fridman (08:35.540)
But really it was all just about precision
Lex Fridman (08:38.280)
and the nature of truth, precision,
Charles Hoskinson (08:40.160)
the nature of necessity and possibility.
Lex Fridman (08:41.980)
And the magic of these statements
Charles Hoskinson (08:43.560)
is that you can then start getting a better understanding
Lex Fridman (08:47.440)
of basically how far a formal language can take you.
Lex Fridman (08:52.080)
And so that's the work of it.
Lex Fridman (08:53.920)
David Hilbert also did the same thing.
Lex Fridman (08:55.680)
And Russell, he got his career started
Lex Fridman (08:57.720)
working with Alfred North Whitehead.
Charles Hoskinson (08:59.080)
He was a logician and there was this whole desire
Lex Fridman (09:01.440)
in late 19th century mathematics to formalize mathematics
Charles Hoskinson (09:04.620)
in a completely new and better way.
Lex Fridman (09:07.720)
And they started with geometry
Lex Fridman (09:08.960)
and Hilbert's geometry was like a complete system,
Lex Fridman (09:11.600)
although recently we've discovered
Charles Hoskinson (09:13.240)
there's a few holes in that.
Lex Fridman (09:14.540)
But for the most part it was complete
Lex Fridman (09:16.180)
and the axioms are independent and they're consistent.
Lex Fridman (09:20.440)
And they said, oh, well now we can do this
Charles Hoskinson (09:22.040)
for all of mathematics.
Lex Fridman (09:23.080)
And Russell and Whitehead wrote this huge set of books,
Charles Hoskinson (09:26.660)
like two big books,
Lex Fridman (09:27.840)
Principia Mathematica, a thousand pages
Lex Fridman (09:29.880)
and the conclusion is one plus one equals two.
Lex Fridman (09:32.200)
So they linked set theory and arithmetic and logic
Charles Hoskinson (09:34.840)
all in these beautiful ways.
Lex Fridman (09:36.400)
Then little by little, as we entered the 20th century,
Charles Hoskinson (09:40.280)
logicians started chipping away at this idea
Lex Fridman (09:42.560)
that you could actually construct
Charles Hoskinson (09:43.640)
a complete system of mathematics.
Lex Fridman (09:45.960)
First with Gödel and then later with the work of Turing
Lex Fridman (09:48.200)
and Church and others.
Lex Fridman (09:49.440)
They said, oh, you're not complete, you're not decidable.
Lex Fridman (09:52.040)
And so suddenly Russell was left in this really bad position
Lex Fridman (09:55.460)
where his early life's work was basically forgotten.
Lex Fridman (09:59.200)
So he had to kind of reinvent himself.
Lex Fridman (10:00.800)
And so he went into ethics
Lex Fridman (10:02.060)
and he went into different fields of philosophy.
Lex Fridman (10:03.600)
He became this titan in analytic philosophy
Lex Fridman (10:05.600)
and he was also a great pacifist
Lex Fridman (10:08.000)
and he was just a phenomenal writer.
Charles Hoskinson (10:11.320)
If you read Why I'm Not a Christian
Lex Fridman (10:12.880)
or any of his other attacks on metaphysics,
Charles Hoskinson (10:15.940)
he said, look, I can only deal with the world I'm in
Lex Fridman (10:18.480)
in the senses that I have
Lex Fridman (10:19.920)
and if I can deduce it, I believe it.
Lex Fridman (10:21.880)
If it's outside of that,
Charles Hoskinson (10:23.320)
I really can't make meaningful statements about it.
Lex Fridman (10:25.920)
And he said it in a lovely English prose
Charles Hoskinson (10:28.280)
that you would expect of a man of his stature.
Lex Fridman (10:30.260)
Now, Sol Cryptry, it was like the complete opposite.
Charles Hoskinson (10:33.260)
This guy's really down to earth dude,
Lex Fridman (10:35.560)
not aristocratic at all.
Lex Fridman (10:36.920)
And he was one of those guys
Lex Fridman (10:38.680)
that just could have done anything
Charles Hoskinson (10:40.240)
because he was so, he's so brilliant.
Lex Fridman (10:42.080)
I guess he's still alive.
Charles Hoskinson (10:43.160)
I think he's 80 something.
Lex Fridman (10:44.280)
Yeah, exactly.
Charles Hoskinson (10:45.600)
Yeah, he's getting up there, man.
Lex Fridman (10:47.120)
But I mean, literally, when he was in high school,
Charles Hoskinson (10:49.040)
he wrote these papers in logic and Harvard contacted him,
Lex Fridman (10:52.000)
said, hey, could you teach graduate courses at Harvard?
Lex Fridman (10:55.080)
And he said, no, I really would like to finish high school
Lex Fridman (10:57.160)
first before I go and teach grad school at Harvard.
Lex Fridman (10:59.880)
And so this is just one of those guys
Lex Fridman (11:01.420)
that you can see through his work
Charles Hoskinson (11:03.400)
that he can think deeply about anything.
Lex Fridman (11:05.160)
He's like the Galois of philosophy
Lex Fridman (11:07.180)
and he chose to try to clean up a lot of the messes
Lex Fridman (11:10.920)
that Tarski and others couldn't resolve.
Charles Hoskinson (11:12.720)
He said, let's really get serious
Lex Fridman (11:14.240)
about the nature of truth.
Charles Hoskinson (11:15.280)
Let's really try to resolve paradoxes.
Lex Fridman (11:17.640)
Let's really try to build things in such a way
Charles Hoskinson (11:19.900)
that the work that we leave behind
Lex Fridman (11:21.920)
can actually be built upon
Lex Fridman (11:23.520)
and it's not thrown away every 50 years or 100 years.
Lex Fridman (11:26.680)
And it was the same for Tarski.
Charles Hoskinson (11:27.880)
He comes in and he says,
Lex Fridman (11:28.720)
we mathematicians love this concept of truth,
Lex Fridman (11:31.280)
but yet we've never really created
Lex Fridman (11:32.600)
a nice rigorous definition
Charles Hoskinson (11:33.880)
that doesn't have paradoxes embedded inside of it.
Lex Fridman (11:36.560)
So he had to invent metal languages and object languages,
Charles Hoskinson (11:39.160)
all these notions and so forth.
Lex Fridman (11:40.840)
So I really liked those four, if you think about them.
Lex Fridman (11:43.440)
And there's a lot of great lessons.
Lex Fridman (11:46.000)
And where it's relevant today is,
Charles Hoskinson (11:48.320)
you have human beings and you have computers
Lex Fridman (11:50.400)
and they're trying to understand each other.
Lex Fridman (11:52.000)
And computers live in the formal world
Lex Fridman (11:53.680)
and human beings live in the natural language world.
Lex Fridman (11:56.000)
And those bridges between those two
Lex Fridman (11:58.280)
are still not completely clear.
Lex Fridman (12:00.920)
And so a lot of the work that these guys were doing
Lex Fridman (12:03.120)
in the 20th century, 19th century
Charles Hoskinson (12:04.320)
had nothing at all to do with that,
Lex Fridman (12:06.160)
but gives you hope that perhaps a bridge can exist
Charles Hoskinson (12:09.020)
between those two worlds.
Lex Fridman (12:10.040)
And maybe there are some nice tools
Charles Hoskinson (12:11.960)
for that bridge to be built upon.
Lex Fridman (12:13.560)
And maybe that in some way will allow computers
Charles Hoskinson (12:16.040)
to better understand us.
Lex Fridman (12:17.040)
I mean, they've even created languages,
Charles Hoskinson (12:19.100)
natural spoken languages that are completely ambiguity free
Lex Fridman (12:21.720)
like Lojban and things like that.
Charles Hoskinson (12:23.760)
What? Yeah, right.
Lex Fridman (12:25.120)
Wait, what? L O J B A N, Lojban.
Charles Hoskinson (12:27.520)
It's based on a language called Loglan
Lex Fridman (12:29.200)
and it's a spoken language
Charles Hoskinson (12:30.920)
that's equivalent to first order predicate calculus.
Lex Fridman (12:33.280)
Oh, interesting.
Lex Fridman (12:34.120)
So no ambiguities, it's logically consistent.
Lex Fridman (12:36.600)
Yeah, Lojban.
Lex Fridman (12:38.240)
But can you still have fun in it?
Lex Fridman (12:40.080)
You can get very.
Lex Fridman (12:40.920)
Can you write poetry or what?
Lex Fridman (12:42.240)
There's people who actually write poetry in Lojban.
Charles Hoskinson (12:44.560)
I'm gonna switch to that and start tweeting in it.
Lex Fridman (12:46.480)
Yeah, there you go.
Lex Fridman (12:48.080)
So there's a lot there
Lex Fridman (12:49.880)
and they're just fun to study and think about.
Lex Fridman (12:52.080)
And unfortunately, if you go down that rabbit hole,
Lex Fridman (12:55.040)
you'll spend way, way too much time
Lex Fridman (12:56.800)
and there's diminishing returns.
Lex Fridman (12:57.980)
Now, the second question you asked
Charles Hoskinson (12:59.220)
was one on theoretical computer science to,
Lex Fridman (13:02.420)
I guess, engineering.
Charles Hoskinson (13:03.260)
Philosophy, no, no, no, no, no, no.
Lex Fridman (13:04.760)
So first step, you said humans and computers.
Lex Fridman (13:07.840)
So theoretical computer science
Lex Fridman (13:09.440)
is theory of the computer
Lex Fridman (13:11.400)
and philosophy is the theory of the human.
Lex Fridman (13:14.400)
And then we can dissect different stuff about the computer,
Lex Fridman (13:17.520)
but in terms of these two worlds
Lex Fridman (13:19.360)
of the theory of the human,
Charles Hoskinson (13:20.480)
which is philosophy and the theory of the computer,
Lex Fridman (13:22.840)
which is computer science,
Lex Fridman (13:23.800)
what do you think is the difference?
Lex Fridman (13:25.520)
Like, as we try to bridge that gap, as you mentioned,
Lex Fridman (13:29.200)
what is going to be the biggest challenge?
Lex Fridman (13:33.000)
Like, can we formalize love?
Charles Hoskinson (13:35.760)
Can we formalize music, art, poetry,
Lex Fridman (13:38.460)
all that kind of stuff?
Lex Fridman (13:39.300)
Or is that human nonsense that we need to get rid of?
Lex Fridman (13:42.040)
No, I don't think it's human nonsense at all.
Charles Hoskinson (13:43.780)
I mean, there's even attempts
Lex Fridman (13:44.960)
to create algorithmically generated music.
Lex Fridman (13:47.360)
And the question is,
Lex Fridman (13:49.440)
is love just strictly a chemical phenomena?
Charles Hoskinson (13:51.720)
Is there something like metaphysical about it
Lex Fridman (13:54.720)
or transcendent of some sort of formal system?
Charles Hoskinson (13:59.060)
I mean, computer science is just saying,
Lex Fridman (14:00.680)
hey, we have this notion of computing.
Charles Hoskinson (14:03.880)
We have this brain that we've constructed,
Lex Fridman (14:06.080)
this formal system that we've built.
Lex Fridman (14:08.280)
And given that we have it, what can we do with it?
Lex Fridman (14:11.360)
And so some people worry
Charles Hoskinson (14:12.760)
about the roots of the tree of knowledge,
Lex Fridman (14:14.920)
the great Yggdrasil of computer science.
Charles Hoskinson (14:17.060)
They worry about the roots and say,
Lex Fridman (14:18.160)
how far can we grow them?
Lex Fridman (14:20.060)
And let's keep adding these new models of computation.
Lex Fridman (14:22.800)
And other people worry about the trunk of the tree.
Lex Fridman (14:25.540)
And some people worry about the leaves of the tree.
Lex Fridman (14:27.960)
And the more advanced the field gets,
Charles Hoskinson (14:30.540)
the closer and closer it gets
Lex Fridman (14:32.400)
to the people who constructed it, us.
Charles Hoskinson (14:35.320)
We have better image processing.
Lex Fridman (14:37.580)
We have better ways of handling speech to texts.
Lex Fridman (14:39.960)
And we have better ways of computers
Lex Fridman (14:41.440)
kind of understanding the intent
Charles Hoskinson (14:43.280)
of what a human being is saying.
Lex Fridman (14:45.120)
And then the question is, well,
Lex Fridman (14:46.740)
how will a computer understand love or poetry or music?
Lex Fridman (14:50.080)
Well, it'll understand it the same way we understand it.
Charles Hoskinson (14:52.840)
You have to get a computer to grow up to a point,
Lex Fridman (14:54.840)
work and learn the way we learn
Charles Hoskinson (14:56.360)
or as close to it as possible.
Lex Fridman (14:58.400)
Then you just expose it to the things
Charles Hoskinson (15:00.360)
that we were exposed with.
Lex Fridman (15:01.480)
And then at some point,
Charles Hoskinson (15:02.320)
the computer will start creating things.
Lex Fridman (15:04.720)
So the question is, well, how do you quantify creativity?
Lex Fridman (15:07.120)
And I have no clue about that.
Lex Fridman (15:09.360)
But it's a...
Charles Hoskinson (15:10.200)
You make it into an NFT and see how much it excels for it.
Lex Fridman (15:12.240)
That's one way.
Charles Hoskinson (15:14.440)
Yeah.
Lex Fridman (15:15.280)
But basically, yeah, there's so much of it is subjective.
Lex Fridman (15:18.360)
And that's a fascinating whole area of,
Lex Fridman (15:21.240)
that I'm fascinated with this human robot interaction
Charles Hoskinson (15:23.560)
is how do we create compelling experiences
Lex Fridman (15:27.360)
that are subjectively compelling,
Charles Hoskinson (15:28.560)
whether it's art or just two humans talking
Lex Fridman (15:31.120)
or two humans interacting in some kind of way
Charles Hoskinson (15:33.440)
to maximize the richness of the subjective experience.
Lex Fridman (15:36.840)
And I think that could be an optimization problem
Charles Hoskinson (15:38.960)
that could be solved.
Lex Fridman (15:39.780)
We're solving it all the time.
Charles Hoskinson (15:41.360)
Human civilization is constantly trying to...
Lex Fridman (15:43.640)
We're constantly trying to impress each other.
Charles Hoskinson (15:46.880)
When we're younger, trying to get laid,
Lex Fridman (15:49.320)
whatever, fall in love, impress your boss at work
Charles Hoskinson (15:53.080)
by all the awesome stuff you do.
Lex Fridman (15:54.200)
I mean, we're trying to optimize that problem
Charles Hoskinson (15:56.360)
that's purely, for the most part, is subjective.
Lex Fridman (15:59.440)
Right, did you ever watch Blade Runner 2049?
Charles Hoskinson (16:01.600)
Yes.
Lex Fridman (16:02.440)
Yeah, did you remember the whole relationship
Lex Fridman (16:03.680)
between Joy and Kay?
Lex Fridman (16:05.160)
And did she really love him, the hologram or not?
Lex Fridman (16:08.720)
Was it like fake love or real love?
Lex Fridman (16:10.800)
Fake it till you make it is my view on love.
Charles Hoskinson (16:13.640)
No comment from Charles.
Lex Fridman (16:14.680)
So let's go to the difference between
Charles Hoskinson (16:19.480)
theoretical computer science and software engineering.
Lex Fridman (16:22.480)
Or I don't know if you draw a distinction,
Lex Fridman (16:24.800)
but if we look into this computer world now,
Lex Fridman (16:27.160)
is there a difference between theory,
Charles Hoskinson (16:29.680)
things you can say formally,
Lex Fridman (16:31.360)
and the pragmatic implementation of that theory
Charles Hoskinson (16:34.760)
into actual systems that people use,
Lex Fridman (16:37.400)
which I guess we'll call software engineering?
Lex Fridman (16:40.200)
So the engineer, they're obsessed with the domain of,
Lex Fridman (16:43.280)
well, what do you want to accomplish
Lex Fridman (16:44.520)
and who are you accomplishing it for?
Lex Fridman (16:46.280)
So they live in the world of people,
Charles Hoskinson (16:48.520)
if they're good engineers.
Lex Fridman (16:49.840)
And they say, okay, what's the experience?
Lex Fridman (16:52.680)
How are we going to use this?
Lex Fridman (16:54.260)
Why are we going to do this?
Lex Fridman (16:55.720)
What's the commercial application?
Lex Fridman (16:57.240)
What's the noncommercial application?
Lex Fridman (16:59.120)
And you collect all these business requirements.
Lex Fridman (17:01.300)
And once you've done all of that,
Charles Hoskinson (17:03.360)
the better job you do, the more self evident it is
Lex Fridman (17:06.520)
of how do we apply the toys and tools of computer science
Lex Fridman (17:10.480)
and other such things to actually resolve that.
Lex Fridman (17:13.260)
And the point of theoretical computer science
Charles Hoskinson (17:15.880)
from the software engineering domain
Lex Fridman (17:17.600)
is it can tell you kind of where your guardrails are.
Charles Hoskinson (17:20.160)
It won't make perfect programs.
Lex Fridman (17:22.360)
And there's no such thing as that,
Lex Fridman (17:24.280)
but rather it can give you a good notion and sense
Lex Fridman (17:27.000)
that your program has some desirable properties.
Charles Hoskinson (17:30.760)
Like maybe you can prove that it can terminate.
Lex Fridman (17:33.340)
If you're dealing with total programs
Charles Hoskinson (17:34.960)
or maybe you can prove you'll never have a buffer overflow
Lex Fridman (17:37.880)
or you won't divide by zero somewhere or something like that.
Charles Hoskinson (17:41.320)
Some event won't occur
Lex Fridman (17:43.120)
that'll cause a catastrophic failure in your system.
Lex Fridman (17:45.640)
But there's always this combinatorial explosion
Lex Fridman (17:47.680)
between what you can test and think about
Lex Fridman (17:50.700)
and what you can actually code.
Lex Fridman (17:52.820)
So the stuff on the left hand side
Charles Hoskinson (17:54.580)
lives in a different cardinality, a different universe.
Lex Fridman (17:57.700)
There's something significantly larger there.
Lex Fridman (17:59.880)
And the tools on the right hand side,
Lex Fridman (18:01.820)
we have property based testing and these SAT solvers.
Charles Hoskinson (18:04.600)
We have all this great stuff here in formal methods land
Lex Fridman (18:07.740)
and computer science theory land,
Lex Fridman (18:09.560)
but there's only a small subset of things
Lex Fridman (18:11.720)
that they actually give you good answers about.
Lex Fridman (18:14.580)
So the balance of the two things is basically saying,
Lex Fridman (18:17.220)
well, what do you care about?
Lex Fridman (18:18.900)
And what are you okay throwing away?
Lex Fridman (18:20.920)
That's the art of engineering
Lex Fridman (18:22.680)
and building these types of things.
Lex Fridman (18:24.800)
So, you know, cryptocurrencies,
Charles Hoskinson (18:26.360)
we deal with these complex distributed systems
Lex Fridman (18:28.840)
that have cryptography and game theory
Lex Fridman (18:30.880)
and Byzantine actors.
Lex Fridman (18:33.000)
So the balance there is saying,
Lex Fridman (18:35.000)
okay, what can't fail in that system?
Lex Fridman (18:37.840)
And that's the kind of stuff that you want to apply
Charles Hoskinson (18:40.240)
as heavy a tool set as you can,
Lex Fridman (18:42.340)
because when that stuff fails,
Charles Hoskinson (18:44.120)
you either have a loss of billions of dollars,
Lex Fridman (18:46.240)
privacy, or potentially even life,
Charles Hoskinson (18:48.560)
depending on how these systems get adopted.
Lex Fridman (18:50.860)
But then other things, you know, what can fail?
Lex Fridman (18:52.920)
Is it okay if the block doesn't get made every now and then?
Lex Fridman (18:56.320)
Is it okay if your latency goes up
Charles Hoskinson (18:58.240)
or your network suddenly becomes asynchronous
Lex Fridman (19:01.280)
and you disconnect from it and you have to restart
Lex Fridman (19:03.600)
the computer or something like that?
Lex Fridman (19:05.400)
That's probably okay.
Charles Hoskinson (19:06.560)
It's an inconvenience and burden to the user.
Lex Fridman (19:09.040)
And if you actually try to chase that tail,
Charles Hoskinson (19:10.880)
you'll end up spending 10 years chasing phantoms and ghosts.
Lex Fridman (19:13.640)
And meanwhile, the whole world moves on.
Lex Fridman (19:16.160)
So it's really figuring out those balance of the two.
Lex Fridman (19:18.240)
And what's really beautiful is that the formal methods tools
Charles Hoskinson (19:21.640)
have gotten so much better
Lex Fridman (19:23.080)
over the last 20 years in particular,
Charles Hoskinson (19:25.140)
mostly because of incredibly high investments
Lex Fridman (19:27.640)
from Microsoft and Google and big universities,
Charles Hoskinson (19:31.040)
because these guys are building these gargantuan systems.
Lex Fridman (19:34.920)
If you look at the Googleplex
Charles Hoskinson (19:36.160)
or what Amazon has or others,
Lex Fridman (19:37.920)
and they have so much value, so many users,
Lex Fridman (19:40.680)
so many things going on,
Lex Fridman (19:41.780)
and no person can keep that in their head.
Lex Fridman (19:44.480)
And so you're talking about systems
Lex Fridman (19:46.400)
may have 10 million lines of code,
Charles Hoskinson (19:48.400)
15 million lines of code,
Lex Fridman (19:49.740)
millions of nodes connecting,
Charles Hoskinson (19:51.840)
faulty processes happening all the time,
Lex Fridman (19:53.600)
hackers breaking in on a regular basis.
Lex Fridman (19:56.040)
So when you're trying to model all of that,
Lex Fridman (19:58.040)
trying to ask yourself,
Lex Fridman (19:59.200)
what formal guarantees and properties can I get
Lex Fridman (1:00:00.960)
And then when new people joined in,
Charles Hoskinson (1:00:02.600)
they would only be able to distinguish between a chain
Lex Fridman (1:00:05.080)
based upon a checkpoint telling them that.
Lex Fridman (1:00:07.800)
So you have to do a lot of really wonky, crazy math
Lex Fridman (1:00:10.200)
to show and create this notion of like density
Charles Hoskinson (1:00:12.920)
to be able to show that that's possible.
Lex Fridman (1:00:14.780)
But there's a lot of properties of proof of work
Charles Hoskinson (1:00:16.640)
that were super hard to replicate and emulate
Lex Fridman (1:00:19.040)
in the proof of stake world.
Charles Hoskinson (1:00:20.960)
Macaulay kind of revolutionized the whole VRF thing.
Lex Fridman (1:00:24.600)
There was a group out of Cornell
Charles Hoskinson (1:00:26.120)
that talked about better network conditions.
Lex Fridman (1:00:28.120)
They wrote a paper called Sleepy.
Charles Hoskinson (1:00:30.360)
We did Genesis.
Lex Fridman (1:00:31.960)
We also did the very first proofably secure protocol,
Lex Fridman (1:00:34.760)
but that was six years of work and like 12 papers.
Lex Fridman (1:00:37.280)
And it's still not done.
Charles Hoskinson (1:00:38.140)
There's still a few polishing things
Lex Fridman (1:00:39.840)
that have to be cleaned up
Charles Hoskinson (1:00:41.720)
because this is a physical resource
Lex Fridman (1:00:44.920)
and there's something there.
Lex Fridman (1:00:46.400)
But there's a flaw to proof of work
Lex Fridman (1:00:48.160)
that is a little problematic.
Charles Hoskinson (1:00:49.500)
It's a winner take all type of a system.
Lex Fridman (1:00:51.180)
So maximalism is kind of philosophically
Lex Fridman (1:00:54.720)
and computationally built into it.
Lex Fridman (1:00:56.640)
Let's say you have two proof of work systems
Lex Fridman (1:00:59.960)
and they have roughly the same market cap and hash rate.
Lex Fridman (1:01:03.200)
And they use the same algorithm.
Charles Hoskinson (1:01:05.320)
Then the problem is if the miner comes in
Lex Fridman (1:01:07.960)
and let's say the miner has enough resources
Charles Hoskinson (1:01:09.800)
to have 51% for any of these chains,
Lex Fridman (1:01:13.520)
they actually have a perverse incentive
Charles Hoskinson (1:01:15.080)
to come and destroy one chain
Lex Fridman (1:01:18.040)
and short sell the asset, it's called a gold finger attack,
Lex Fridman (1:01:21.200)
and then go mine the other asset
Lex Fridman (1:01:23.300)
because they're not bound to that asset.
Charles Hoskinson (1:01:25.360)
They're not loyal to it.
Lex Fridman (1:01:26.800)
And they can make just as much profit mining this
Charles Hoskinson (1:01:29.660)
as they can make mining the other system
Lex Fridman (1:01:31.840)
and the markets allow them to profit
Charles Hoskinson (1:01:33.480)
from the destruction of a system.
Lex Fridman (1:01:35.200)
So that's something that proof of stake doesn't suffer from
Charles Hoskinson (1:01:37.800)
because the only way you can participate
Lex Fridman (1:01:39.720)
in a proof of stake system
Charles Hoskinson (1:01:40.720)
is you have to actually own equity
Lex Fridman (1:01:42.160)
and you have to have ownership in that system.
Lex Fridman (1:01:44.180)
So if you go and destroy Daisy's chain, it would just be
Lex Fridman (1:01:48.760)
a net loss for the most part,
Charles Hoskinson (1:01:50.520)
unless you have really messed up markets
Lex Fridman (1:01:51.880)
or something like that.
Lex Fridman (1:01:53.140)
So there's always trade offs and all these things.
Lex Fridman (1:01:55.060)
And this is why I like this concept of going one to end
Lex Fridman (1:01:57.180)
and having multiple resources,
Lex Fridman (1:01:58.940)
because why not have proof of work
Lex Fridman (1:02:00.620)
and proof of stake together?
Lex Fridman (1:02:02.160)
If the proof of work is useful, not wasted computation,
Lex Fridman (1:02:05.400)
and why not add other things
Lex Fridman (1:02:06.600)
like create incentives for network relay?
Charles Hoskinson (1:02:08.760)
Right now there's no incentives in the system
Lex Fridman (1:02:10.440)
for you to run peer to peer nodes and the shared data.
Charles Hoskinson (1:02:12.400)
Right now it's not a problem,
Lex Fridman (1:02:13.560)
but if you're running like Amazon web services
Charles Hoskinson (1:02:16.180)
level of bandwidth,
Lex Fridman (1:02:17.040)
it could cost you like $5,000 a month in bandwidth
Charles Hoskinson (1:02:19.720)
just to run a full node or something like that.
Lex Fridman (1:02:21.380)
No one would do it.
Lex Fridman (1:02:22.480)
So then your system will centralize along the weakest link,
Lex Fridman (1:02:26.120)
whether it be the storage layer, the computation layer,
Charles Hoskinson (1:02:28.560)
or the network layer of the system.
Lex Fridman (1:02:31.160)
So if you can incentivize the resources differently,
Charles Hoskinson (1:02:33.480)
then you'll be in a beautiful position
Lex Fridman (1:02:35.040)
where you end up having a resilient system
Charles Hoskinson (1:02:37.680)
that pays its own bills.
Lex Fridman (1:02:39.480)
So how does Cardano solve the consensus problem?
Lex Fridman (1:02:43.400)
Do you tend to eventually wanting to solve it
Lex Fridman (1:02:46.800)
in the hybrid approach of proof of stake and proof of work?
Charles Hoskinson (1:02:50.360)
Yeah, this was a philosophical difference
Lex Fridman (1:02:52.240)
between Vitalik and myself.
Charles Hoskinson (1:02:54.440)
The problem with the people in the Ethereum side
Lex Fridman (1:02:56.440)
is they're really bright.
Lex Fridman (1:02:57.520)
And these really bright people,
Lex Fridman (1:02:58.960)
what they do is they try to do everything all at once
Charles Hoskinson (1:03:01.920)
because they're really, really smart
Lex Fridman (1:03:03.240)
and they keep going until they run up against the wall
Lex Fridman (1:03:05.440)
and they realize the problem is a lot harder.
Lex Fridman (1:03:07.920)
If you're more experienced,
Lex Fridman (1:03:09.360)
and that's why we brought in proper academics
Lex Fridman (1:03:11.460)
like Aggelos and others, because they've been beaten up
Charles Hoskinson (1:03:13.680)
through life, Aggelos worked with David Chom
Lex Fridman (1:03:16.560)
and these other, it's really hard work with those guys.
Lex Fridman (1:03:19.680)
And they'd already been humiliated and yelled at
Lex Fridman (1:03:22.240)
and had chalk thrown at them and all that stuff.
Lex Fridman (1:03:24.040)
And so they were humble enough to say,
Lex Fridman (1:03:25.160)
I'm not smart enough to solve the big problem.
Lex Fridman (1:03:27.200)
So don't even try.
Lex Fridman (1:03:28.280)
What you do is you decompose it and you say, okay,
Charles Hoskinson (1:03:30.600)
what's the first problem to solve in a chain of problems
Lex Fridman (1:03:33.680)
that you can compose your way up to a working system?
Lex Fridman (1:03:37.240)
And once you get far enough along,
Lex Fridman (1:03:39.240)
you have something that's pretty good
Lex Fridman (1:03:41.520)
and then you have an obvious path forward
Lex Fridman (1:03:43.720)
of how do you iterate and improve that system?
Charles Hoskinson (1:03:45.920)
That's why we started with GKL 15,
Lex Fridman (1:03:47.760)
because it was just saying,
Charles Hoskinson (1:03:48.600)
we don't know what a fucking blockchain is.
Lex Fridman (1:03:50.640)
This is, what is this thing, right?
Lex Fridman (1:03:52.440)
What's the security properties of this stuff?
Lex Fridman (1:03:54.000)
Like, what did we really mean?
Charles Hoskinson (1:03:55.720)
Then we did Ouroboros Classic,
Lex Fridman (1:03:57.320)
the original Ouroboros protocol in 2017.
Lex Fridman (1:03:59.680)
And that protocol was like a synchronous system
Lex Fridman (1:04:02.120)
and it assumed the nodes were always on and it worked,
Lex Fridman (1:04:05.160)
but it was useless because that's not real life.
Lex Fridman (1:04:08.060)
Then Prowse came out and then suddenly we relaxed things.
Lex Fridman (1:04:10.600)
So these are all, by the way,
Lex Fridman (1:04:11.440)
names for consensus algorithms.
Charles Hoskinson (1:04:12.600)
Yeah, papers that we published
Lex Fridman (1:04:14.560)
and they were all peer reviewed.
Charles Hoskinson (1:04:15.800)
Like GKL was EuroCrypt.
Lex Fridman (1:04:17.280)
That's a very hard conference to get into.
Lex Fridman (1:04:19.100)
And Ouroboros Classic was Crypto
Lex Fridman (1:04:20.660)
and Prowse was EuroCrypt and Genesis was CCS.
Lex Fridman (1:04:24.600)
So basically every step of the way
Lex Fridman (1:04:27.200)
was first an academic validation
Charles Hoskinson (1:04:28.980)
that there was some merit to the work that was done.
Lex Fridman (1:04:31.280)
Second, it solved a particular class of problems,
Charles Hoskinson (1:04:34.120)
either showing the feasibility of the entire problem.
Lex Fridman (1:04:36.840)
Because when I said, let's do the model first
Charles Hoskinson (1:04:38.720)
because let's see if we can do an FLP thing.
Lex Fridman (1:04:40.400)
Let's see if we can get them a possibility theorem.
Charles Hoskinson (1:04:42.240)
That's great because you're done.
Lex Fridman (1:04:43.720)
It's like those short math papers
Charles Hoskinson (1:04:45.600)
were like, I found a counterexample.
Lex Fridman (1:04:47.300)
It's like, oh, okay, this whole thing has fallen apart
Charles Hoskinson (1:04:49.400)
because you have a two line proof, thank you.
Lex Fridman (1:04:51.880)
So that's what we were looking for
Charles Hoskinson (1:04:53.040)
in the beginning of the agenda was,
Lex Fridman (1:04:54.700)
let's either prove it's possible in a straw man case
Charles Hoskinson (1:04:57.840)
or show that there exists an impossibility result,
Lex Fridman (1:05:00.160)
in which case we can just abandon the entire inquiry.
Charles Hoskinson (1:05:02.320)
Proof of stake is impossible.
Lex Fridman (1:05:03.880)
And then once you've gotten past that threshold,
Charles Hoskinson (1:05:06.160)
it goes from theory to practicality.
Lex Fridman (1:05:08.520)
What actual network conditions are you looking at?
Charles Hoskinson (1:05:10.920)
Are you okay with living with an external clock
Lex Fridman (1:05:13.420)
or do you wanna build time from within?
Lex Fridman (1:05:15.360)
How are you generating random numbers, et cetera, et cetera.
Lex Fridman (1:05:18.040)
And every step of the way, each paper,
Charles Hoskinson (1:05:19.960)
you're solving one particular class of problems.
Lex Fridman (1:05:22.460)
With Prism, it said, probably shouldn't know
Charles Hoskinson (1:05:24.880)
ahead of time who Eve is.
Lex Fridman (1:05:26.780)
You probably shouldn't know who's making those blocks.
Charles Hoskinson (1:05:28.880)
That should be something after the fact.
Lex Fridman (1:05:30.960)
But if you know ahead of time, you can attack them.
Charles Hoskinson (1:05:32.840)
You can DDoS them, you cause all kinds of problems.
Lex Fridman (1:05:35.600)
So adaptive security, also we moved from an MPC,
Charles Hoskinson (1:05:40.680)
random number generation, which was great,
Lex Fridman (1:05:42.360)
but very heavy and very slow.
Lex Fridman (1:05:44.240)
And you can't scale to large amounts of people
Lex Fridman (1:05:46.520)
to a VRF based system, which is super fast,
Lex Fridman (1:05:48.720)
but a little dirtier.
Lex Fridman (1:05:49.800)
Because Algorand actually did some great work there.
Charles Hoskinson (1:05:52.160)
There was some good knowledge there.
Lex Fridman (1:05:53.480)
What are the really hard problems that you,
Charles Hoskinson (1:05:54.840)
maybe if you just linger on a little bit,
Lex Fridman (1:05:56.800)
what are some of the really hard problems
Charles Hoskinson (1:05:58.600)
you have to solve along this chain of papers, ideas,
Lex Fridman (1:06:01.480)
the evolution of the consensus algorithm?
Charles Hoskinson (1:06:03.140)
Yeah, not only are they really hard problems,
Lex Fridman (1:06:05.000)
they actually require different cryptographers
Charles Hoskinson (1:06:06.760)
because you're moving from mathematician style cryptographers
Lex Fridman (1:06:10.600)
like the Neil Koblitz's and the Addie Shamir's
Lex Fridman (1:06:12.720)
and the people that like start as proper mathematicians.
Lex Fridman (1:06:14.960)
They really love theory and that's their thing.
Lex Fridman (1:06:17.720)
And the proofs are dense and they're thick
Lex Fridman (1:06:19.620)
and they're beautiful to practical applied work
Charles Hoskinson (1:06:23.720)
where you're saying, okay,
Lex Fridman (1:06:24.960)
now this is something an engineer can look at
Lex Fridman (1:06:27.120)
and say, I know how to build that.
Lex Fridman (1:06:28.660)
I know how to think about that.
Lex Fridman (1:06:30.140)
So that transition from GKL to Ouroboros Classic
Lex Fridman (1:06:34.560)
to Prowse, I'd say the biggest leap was Classic to Prowse
Charles Hoskinson (1:06:38.880)
because that was going from a system
Lex Fridman (1:06:40.960)
that would only work in a consortium chain like Fabric
Charles Hoskinson (1:06:43.640)
to a system that would actually work and is working.
Lex Fridman (1:06:45.840)
That's what's implementing Cardano today,
Charles Hoskinson (1:06:47.960)
50 billion dollar cryptocurrency and all these people.
Lex Fridman (1:06:50.720)
That was a huge leap, but that paper alone wasn't enough.
Charles Hoskinson (1:06:54.240)
We also had to layer on the economic model
Lex Fridman (1:06:56.940)
because we said, well, hang on a second here.
Charles Hoskinson (1:06:58.960)
Not everybody's gonna be online all the time
Lex Fridman (1:07:01.120)
to be available to make a block.
Lex Fridman (1:07:03.460)
So you need some notion of delegation.
Lex Fridman (1:07:05.440)
The minute you have a notion of delegation,
Lex Fridman (1:07:06.920)
you have these stake pools, what the hell does that mean?
Lex Fridman (1:07:09.360)
And so this is a beautiful kind of interdisciplinary notion
Charles Hoskinson (1:07:12.920)
that layers computer science and biology together.
Lex Fridman (1:07:16.060)
And minute that complexity starts going up,
Charles Hoskinson (1:07:18.080)
you start seeing cell specialization.
Lex Fridman (1:07:20.440)
So you go from single cell organisms to organisms
Charles Hoskinson (1:07:23.260)
where you have eyeballs and brains and hearts
Lex Fridman (1:07:26.040)
and each of these tissues do different things.
Charles Hoskinson (1:07:28.140)
Well, analogously, complex distributed systems
Lex Fridman (1:07:30.820)
start getting specialization.
Charles Hoskinson (1:07:32.100)
You move from the single cell thing, Bitcoin,
Lex Fridman (1:07:34.800)
where everything's a full node,
Charles Hoskinson (1:07:35.800)
they all have the same rights and responsibilities,
Lex Fridman (1:07:37.540)
a lot of homogeneity in that system,
Lex Fridman (1:07:39.480)
but you're only as good as your weakest link,
Lex Fridman (1:07:41.020)
you're only as capable as whatever the basic cell can do
Charles Hoskinson (1:07:45.080)
to a specialized system where you start having
Lex Fridman (1:07:47.080)
these actors in the system that are actually
Charles Hoskinson (1:07:49.240)
a little different than the other actors.
Lex Fridman (1:07:51.020)
So you introduce this concept of the stake pool
Lex Fridman (1:07:53.360)
and suddenly now you have this actor
Lex Fridman (1:07:54.760)
where you're probably gonna be online 24 seven.
Charles Hoskinson (1:07:57.680)
You're probably gonna have extra relay infrastructure.
Lex Fridman (1:08:00.160)
There's a trust relationship where you don't own the ADA,
Lex Fridman (1:08:03.640)
but you have a right to use it for something.
Lex Fridman (1:08:05.840)
And a person's made that choice to endow you with that.
Charles Hoskinson (1:08:08.520)
The minute that you introduce specialization though,
Lex Fridman (1:08:10.960)
the system gets more complicated,
Charles Hoskinson (1:08:12.560)
the game theory gets more complicated.
Lex Fridman (1:08:14.560)
And then you start having to think really deeply
Lex Fridman (1:08:16.300)
and carefully about, okay, well,
Lex Fridman (1:08:18.800)
can this now introduce a new attack vector
Lex Fridman (1:08:20.920)
that we didn't have before?
Lex Fridman (1:08:22.500)
So that leap from classic to Prowse
Lex Fridman (1:08:24.960)
and adding in stake pools and figuring out
Lex Fridman (1:08:26.700)
how to handle the game theory there was exceedingly hard.
Charles Hoskinson (1:08:29.100)
It took two years to do that.
Lex Fridman (1:08:30.520)
So stake pools allow for multiple parties
Charles Hoskinson (1:08:33.440)
to delegate their staking capabilities to others.
Lex Fridman (1:08:36.720)
Can you describe a little bit how this works?
Charles Hoskinson (1:08:38.360)
It's kind of fascinating.
Lex Fridman (1:08:39.200)
It's a super simple concept.
Lex Fridman (1:08:40.560)
So you register a pool and then the pool is there
Lex Fridman (1:08:42.760)
and basically they advertise
Lex Fridman (1:08:46.240)
and they're actually registered on chain with a certificate.
Lex Fridman (1:08:48.800)
And then in the wallet software itself,
Charles Hoskinson (1:08:50.640)
you can see all of the pools that have registered.
Lex Fridman (1:08:53.360)
There's over 3000 of them now inside the system.
Lex Fridman (1:08:56.080)
And then you can click a little tile
Lex Fridman (1:08:57.640)
and it shows you all the metadata that's in the certificate
Lex Fridman (1:09:00.000)
and says, hey, I have my own pool.
Lex Fridman (1:09:02.200)
It's called rats, king of the rats.
Lex Fridman (1:09:05.200)
So you can see all this stuff that's described there
Lex Fridman (1:09:07.360)
and pools have an operating fee
Charles Hoskinson (1:09:08.840)
cause they're like a business.
Lex Fridman (1:09:09.880)
And they say, well, if you delegate to me,
Charles Hoskinson (1:09:11.820)
I'll charge this much.
Lex Fridman (1:09:13.120)
So if you get like a hundred bucks in rewards,
Charles Hoskinson (1:09:15.680)
I'll give you 90 and I'll take 10 or something like that.
Lex Fridman (1:09:19.440)
And then you make your decision
Lex Fridman (1:09:20.440)
and whichever one you select, you click delegate,
Lex Fridman (1:09:23.600)
push the button and then you have now given
Charles Hoskinson (1:09:26.560)
your staking rights to them until revoked.
Lex Fridman (1:09:29.840)
Okay, so it lives there.
Lex Fridman (1:09:30.920)
And then the stake pools weight in the system
Lex Fridman (1:09:33.700)
is proportional to the amount of stake
Charles Hoskinson (1:09:35.560)
that they have delegated to them.
Lex Fridman (1:09:37.120)
And then we have this other limiting factor K,
Charles Hoskinson (1:09:39.400)
which says that you get diminishing returns
Lex Fridman (1:09:41.480)
with the more stake you have.
Lex Fridman (1:09:42.720)
So it's kind of like an S function.
Lex Fridman (1:09:44.320)
So you kind of go up and up and then eventually caps
Lex Fridman (1:09:46.880)
and then at some point you get no rewards
Lex Fridman (1:09:48.600)
beyond a certain threshold.
Lex Fridman (1:09:49.960)
So there's an incentive to split pools
Lex Fridman (1:09:51.760)
to different owners after some point.
Charles Hoskinson (1:09:54.440)
Yeah, and so that's a complex thing
Lex Fridman (1:09:57.080)
and you have to actually model the game theory out
Charles Hoskinson (1:09:59.160)
to understand where those parameters should be set.
Lex Fridman (1:10:01.520)
And we didn't know how to do that.
Lex Fridman (1:10:02.840)
So what we did is we bought talent.
Lex Fridman (1:10:04.880)
We went to Oxford and we hired this guy
Charles Hoskinson (1:10:06.600)
named Elias Kasupis, he's an algorithmic game theorist.
Lex Fridman (1:10:08.920)
We said, hey, would you like to do some game theory work
Lex Fridman (1:10:11.560)
in crypto?
Lex Fridman (1:10:12.400)
And he's like, that sounds fun.
Lex Fridman (1:10:13.760)
So he spent a year and a half,
Lex Fridman (1:10:15.240)
we built all these beautiful models
Lex Fridman (1:10:16.680)
and we kind of figured out what those curves
Lex Fridman (1:10:18.320)
needed to look like.
Lex Fridman (1:10:19.160)
So figure out like the S curve that would result
Lex Fridman (1:10:20.600)
in a nice distribution of responsibility.
Lex Fridman (1:10:22.880)
So not everybody delegates to the king of the rats.
Lex Fridman (1:10:26.440)
Exactly.
Lex Fridman (1:10:27.280)
How does it feel to be royalty, by the way?
Lex Fridman (1:10:28.880)
It's not a very impressive kingdom,
Lex Fridman (1:10:31.880)
but you're nevertheless a king.
Lex Fridman (1:10:33.280)
I'll take it, because I think it's the kindest thing
Charles Hoskinson (1:10:35.240)
people call me in this space.
Lex Fridman (1:10:37.840)
Yeah, people love you.
Charles Hoskinson (1:10:39.200)
So, okay, so that, I mean, so is that,
Lex Fridman (1:10:41.840)
would you say a solved problem?
Lex Fridman (1:10:43.880)
The game theory of stake pools?
Lex Fridman (1:10:45.480)
No, it's the starting, and I was getting back
Charles Hoskinson (1:10:48.040)
to my original point that you build things in iterations.
Lex Fridman (1:10:50.480)
Every step, if you've done it right,
Charles Hoskinson (1:10:53.040)
is an invitation for 10 more sexy, fascinating,
Lex Fridman (1:10:55.840)
fun problems.
Lex Fridman (1:10:56.680)
And this is why we have such a great time building labs.
Lex Fridman (1:10:58.760)
We started in Edinburgh, now we're at Tokyo Tech
Lex Fridman (1:11:01.360)
and University of Wyoming and Athens,
Lex Fridman (1:11:03.280)
and we're setting up more labs this year.
Lex Fridman (1:11:05.160)
And all these academics wanna work with us,
Lex Fridman (1:11:06.760)
hey, because we write a lot of really fascinating papers,
Lex Fridman (1:11:09.080)
but B, because we're focused on all these really cool,
Lex Fridman (1:11:12.240)
sexy, interdisciplinary problems.
Charles Hoskinson (1:11:14.120)
We're actually running into problems
Lex Fridman (1:11:15.080)
where we don't even know where to publish the paper.
Charles Hoskinson (1:11:17.040)
Because you'll have this paper where there's like
Lex Fridman (1:11:18.400)
these PL guys working with crypto guys,
Charles Hoskinson (1:11:20.400)
working with systems guys, working with economists.
Lex Fridman (1:11:23.120)
And you put it all together
Lex Fridman (1:11:23.960)
and you have this Frankenstein paper monster,
Lex Fridman (1:11:26.160)
and we're like, where do we submit this?
Lex Fridman (1:11:27.920)
Where does this go?
Lex Fridman (1:11:28.960)
Nature.
Charles Hoskinson (1:11:29.800)
Yeah, there we go.
Lex Fridman (1:11:30.720)
Nature or quanta or something, I don't know.
Charles Hoskinson (1:11:32.880)
It'll write a nice little.
Lex Fridman (1:11:33.720)
So the sexy problems multiply exponentially.
Charles Hoskinson (1:11:36.520)
Exactly, and we've now gotten to a point
Lex Fridman (1:11:39.000)
where we're starting to work on refinements to the system
Charles Hoskinson (1:11:42.040)
rather than fundamental things that are like,
Lex Fridman (1:11:44.920)
if you don't solve it, the system just simply doesn't work.
Charles Hoskinson (1:11:47.440)
For example, you can run all of this with NTP
Lex Fridman (1:11:49.920)
as your clock server,
Lex Fridman (1:11:50.840)
but you actually can create a notion of time with N.
Lex Fridman (1:11:52.680)
We wrote a paper called the Workforce Chronos for that.
Lex Fridman (1:11:55.520)
But that's not necessary for the system.
Lex Fridman (1:11:58.280)
It's just a nice to have thing.
Charles Hoskinson (1:11:59.520)
It's a nice property.
Lex Fridman (1:12:00.400)
Optimization of the random number generation
Charles Hoskinson (1:12:02.080)
is another example of that.
Lex Fridman (1:12:03.040)
You can run it with a heavier thing.
Charles Hoskinson (1:12:04.680)
You just have more blockchain bloat
Lex Fridman (1:12:06.080)
and slower time and transition.
Charles Hoskinson (1:12:08.440)
We have this concept in Epic.
Lex Fridman (1:12:09.920)
So you elect leaders to run the system
Charles Hoskinson (1:12:13.840)
every five days with Cardano,
Lex Fridman (1:12:15.760)
but there's been derivative work.
Charles Hoskinson (1:12:17.120)
We didn't even do this.
Lex Fridman (1:12:18.120)
This work occurred at University of Illinois.
Lex Fridman (1:12:20.000)
And that derivative work said,
Lex Fridman (1:12:21.160)
well, you don't actually need to do that.
Charles Hoskinson (1:12:22.360)
You can do it on a block by block basis.
Lex Fridman (1:12:24.520)
It's like, ooh, that's pretty cool.
Lex Fridman (1:12:26.160)
So that's the other point about doing things
Lex Fridman (1:12:27.560)
in a very rigorous way is that that way
Charles Hoskinson (1:12:31.040)
creates a lingua franca for what you're trying to solve
Lex Fridman (1:12:33.880)
with the totality of the academic community.
Lex Fridman (1:12:36.400)
So suddenly people that you've never met,
Lex Fridman (1:12:38.360)
you know nothing about have read your papers,
Charles Hoskinson (1:12:40.480)
cited your papers and start writing their own papers,
Lex Fridman (1:12:43.040)
either to try to attack and destroy things you've done
Charles Hoskinson (1:12:45.720)
or to build on top of the things that you've done.
Lex Fridman (1:12:48.080)
So people are trying to figure out ways to attack this.
Charles Hoskinson (1:12:50.360)
Exactly.
Lex Fridman (1:12:51.200)
As rigorous as you are trying to build up.
Lex Fridman (1:12:52.920)
And I don't have to pay them.
Lex Fridman (1:12:54.120)
That's the beautiful thing.
Charles Hoskinson (1:12:54.960)
It's fun.
Lex Fridman (1:12:55.880)
Yeah.
Charles Hoskinson (1:12:56.720)
It's fun to try to destroy
Lex Fridman (1:12:57.560)
and that's how we grow stronger.
Lex Fridman (1:12:58.400)
And it's how you build your career too.
Lex Fridman (1:12:59.840)
There's plenty of people that they've gotten tenure
Charles Hoskinson (1:13:02.280)
just kicking the hell out of Intel SGX.
Lex Fridman (1:13:04.920)
You go to CCS every year, there's some guy there
Lex Fridman (1:13:06.960)
and he's having a hell of a time making Intel cry.
Lex Fridman (1:13:11.200)
Can we pull back historically speaking
Lex Fridman (1:13:13.320)
and in terms of the big picture
Lex Fridman (1:13:14.760)
of cryptocurrency real quick
Lex Fridman (1:13:16.200)
and ask the question, what is Cardano?
Lex Fridman (1:13:19.040)
We started talking about already
Charles Hoskinson (1:13:20.440)
the consensus algorithm Cardano takes.
Lex Fridman (1:13:23.480)
But maybe when you look at the history books,
Charles Hoskinson (1:13:26.320)
you know, sort of a Hitchhiker's Guide to the Galaxy
Lex Fridman (1:13:28.800)
and Cardano will have one sentence.
Lex Fridman (1:13:31.200)
What's that one sentence going to be?
Lex Fridman (1:13:33.320)
And in general, what's like the vision
Lex Fridman (1:13:35.320)
in the context of the history of cryptocurrency?
Lex Fridman (1:13:37.560)
You have like this whiteboard overview video
Charles Hoskinson (1:13:39.560)
that you talk about the three generations of cryptocurrency
Lex Fridman (1:13:43.040)
where Cardano is the third.
Lex Fridman (1:13:44.400)
So that's like five different questions
Lex Fridman (1:13:47.680)
way of asking the exact same thing you can answer
Charles Hoskinson (1:13:49.600)
however the hell you want.
Lex Fridman (1:13:50.800)
You know, I always termed Cardano as like a FOSS,
Charles Hoskinson (1:13:55.320)
a financial operating system and nobody likes it
Lex Fridman (1:13:57.880)
and everybody picks on me for using that term.
Lex Fridman (1:14:00.000)
But basically the idea is that, you know,
Lex Fridman (1:14:01.560)
the world runs on systems, especially the financial world.
Charles Hoskinson (1:14:04.360)
You have, you know, the BIS and Swift
Lex Fridman (1:14:06.760)
and all this other stuff.
Lex Fridman (1:14:07.840)
And these protocols allow you to move value around
Lex Fridman (1:14:11.640)
and represent things like identity.
Lex Fridman (1:14:13.400)
And allow you to express yourself in some way.
Lex Fridman (1:14:17.040)
And those protocols for the most part work well
Charles Hoskinson (1:14:19.920)
for people in rich countries.
Lex Fridman (1:14:22.040)
And they don't work so well
Charles Hoskinson (1:14:23.240)
for people who aren't in rich countries.
Lex Fridman (1:14:25.560)
And so the point of what we do, or at least what I do
Lex Fridman (1:14:29.380)
and what my company does is we think a lot about
Lex Fridman (1:14:32.160)
how do we build a universal protocol
Charles Hoskinson (1:14:34.200)
that does all the stuff the legacy system has
Lex Fridman (1:14:36.560)
but just does it better, faster and cheaper
Charles Hoskinson (1:14:38.420)
for everybody in the world.
Lex Fridman (1:14:39.840)
And everybody has equal access to it, you know?
Lex Fridman (1:14:42.080)
So it's the people's protocol.
Lex Fridman (1:14:43.560)
You know, you have a situation where the guy in Senegal
Charles Hoskinson (1:14:46.240)
has the same access that I do or Bill Gates does
Lex Fridman (1:14:48.800)
or someone else who's kind of higher
Charles Hoskinson (1:14:50.480)
on the spectrum of wealth and power.
Lex Fridman (1:14:52.880)
And so that is what we seek to achieve.
Lex Fridman (1:14:56.760)
But then the question is well, is Cardano the solution?
Lex Fridman (1:14:59.480)
You know, is that that thing?
Lex Fridman (1:15:01.480)
And the answer is no,
Lex Fridman (1:15:02.680)
because you need a lot more evolution.
Charles Hoskinson (1:15:05.520)
You need decades of evolution
Lex Fridman (1:15:06.960)
to kind of work your way there.
Lex Fridman (1:15:08.860)
And in many ways the work is never quite done
Lex Fridman (1:15:11.160)
but it's better than what came before.
Lex Fridman (1:15:13.960)
Why?
Lex Fridman (1:15:14.800)
Because you have a realization that first
Charles Hoskinson (1:15:17.160)
the control of the system needs to be more balanced
Lex Fridman (1:15:19.760)
and nuanced and it needs to be more democratic.
Lex Fridman (1:15:23.640)
So there's this sustainability component
Lex Fridman (1:15:25.680)
of who's in charge and how do you pay for things?
Charles Hoskinson (1:15:28.380)
Well, the system can print its own money
Lex Fridman (1:15:30.040)
so it always has the ability to have a budget.
Charles Hoskinson (1:15:31.920)
Okay, so there's a treasury idea.
Lex Fridman (1:15:34.200)
And then there's a voting thing.
Charles Hoskinson (1:15:35.800)
Well, the same things that allow you to move money around
Lex Fridman (1:15:38.040)
allow you to represent votes.
Lex Fridman (1:15:39.320)
So you can do eVoting with the type of system, okay.
Lex Fridman (1:15:42.240)
And you know, if you played Gnomic in the 1980s
Charles Hoskinson (1:15:44.880)
or Peter Superfan or any of these things,
Lex Fridman (1:15:46.620)
you can build a self evolving system.
Charles Hoskinson (1:15:48.300)
You can actually create a game
Lex Fridman (1:15:49.520)
where the rules can be voted on and changed
Charles Hoskinson (1:15:51.380)
in the game itself, great.
Lex Fridman (1:15:53.800)
Okay, so that exists there.
Lex Fridman (1:15:56.080)
And then you say, okay, well,
Lex Fridman (1:15:57.460)
but this thing still has to touch the legacy world.
Charles Hoskinson (1:15:59.760)
There has to be cash in and cash out
Lex Fridman (1:16:01.760)
and these types of things.
Lex Fridman (1:16:02.880)
So there's just this interoperability thing
Lex Fridman (1:16:04.560)
that you need a wifi or a Bluetooth moment for the industry
Charles Hoskinson (1:16:07.140)
because nothing understands each other right now.
Lex Fridman (1:16:08.720)
There are all these chains are blind, deaf
Lex Fridman (1:16:10.520)
and dumb to each other.
Lex Fridman (1:16:11.640)
And then there's this thing that it has to work
Charles Hoskinson (1:16:13.160)
at a huge scale, like billions of people.
Lex Fridman (1:16:15.760)
And we've done that, but we've done that
Charles Hoskinson (1:16:17.320)
with large multinational trillion dollar companies
Lex Fridman (1:16:19.840)
with centralized infrastructure.
Charles Hoskinson (1:16:21.280)
We've never really done that with one master protocol
Lex Fridman (1:16:24.360)
that somehow does it for everyone.
Charles Hoskinson (1:16:25.520)
The closest approximation is probably BitTorrent.
Lex Fridman (1:16:28.080)
And there's, you know, there was, it's a cool protocol,
Lex Fridman (1:16:31.520)
but it doesn't have all the oomph necessary to,
Lex Fridman (1:16:34.640)
necessary to do something like this.
Lex Fridman (1:16:36.520)
So Cardano is just our first approximation
Lex Fridman (1:16:38.880)
and like any good system,
Charles Hoskinson (1:16:40.960)
we wanted it to be self evolving.
Lex Fridman (1:16:42.640)
So once you get the philosophy out of where's the target
Charles Hoskinson (1:16:44.960)
of what do you want to do, then you build a community.
Lex Fridman (1:16:47.880)
Now it's over a million people strong
Lex Fridman (1:16:49.720)
and that community keeps growing
Lex Fridman (1:16:51.360)
and they keep pushing the system
Charles Hoskinson (1:16:52.860)
in that particular direction.
Lex Fridman (1:16:54.240)
And what's nice about it is if you build the right philosophy
Charles Hoskinson (1:16:56.760)
within the system, it doesn't need founders.
Lex Fridman (1:16:58.920)
This is the great lesson of Satoshi.
Charles Hoskinson (1:17:00.560)
It doesn't need founders to be able to get there.
Lex Fridman (1:17:02.860)
So, you know, if you look at the academic side,
Charles Hoskinson (1:17:07.940)
that's very decentralized.
Lex Fridman (1:17:09.740)
We have more than 30 different contributors
Charles Hoskinson (1:17:11.720)
for the 105 papers and that set keeps growing
Lex Fridman (1:17:14.280)
within the next five years.
Charles Hoskinson (1:17:15.280)
It'll probably be two, three, 400 different scientists
Lex Fridman (1:17:18.100)
from all across the world, some from Russia
Lex Fridman (1:17:20.680)
and some from India, some from China and some from Japan
Lex Fridman (1:17:23.520)
and America and Africa and South America.
Lex Fridman (1:17:25.920)
And the faces change, the languages change,
Lex Fridman (1:17:28.800)
the cultures change, but the process stays the same.
Lex Fridman (1:17:32.520)
And that is a permanent organ
Lex Fridman (1:17:34.400)
within what we have constructed as a system.
Lex Fridman (1:17:36.920)
And it's the same situation entering marketplaces.
Lex Fridman (1:17:38.960)
Like we entered Ethiopia, what are we doing there?
Charles Hoskinson (1:17:41.320)
We have 5 million people in Ethiopia.
Lex Fridman (1:17:43.060)
We're getting them digital identity
Lex Fridman (1:17:44.840)
and we're dragging that digital identity into the system.
Lex Fridman (1:17:47.160)
Cause that's the most fundamental thing
Charles Hoskinson (1:17:48.440)
of a financial operating system.
Lex Fridman (1:17:50.120)
You need to know who people are
Charles Hoskinson (1:17:51.720)
in order to be able to do business with them,
Lex Fridman (1:17:53.320)
give them credit, be able to give them economic agency
Lex Fridman (1:17:56.160)
and so the thing.
Lex Fridman (1:17:57.000)
But once they're there,
Charles Hoskinson (1:17:58.200)
they're going to grow up with that system.
Lex Fridman (1:18:00.280)
They're going to deploy applications on that system.
Charles Hoskinson (1:18:02.280)
They're going to build on that system
Lex Fridman (1:18:03.400)
or use it every day for getting a loan
Charles Hoskinson (1:18:05.200)
or payments and so forth.
Lex Fridman (1:18:06.480)
And if they have pain points,
Lex Fridman (1:18:07.980)
what they're going to do is evolve that system
Lex Fridman (1:18:10.480)
to be able to mitigate,
Charles Hoskinson (1:18:11.440)
manage those particular pain points
Lex Fridman (1:18:13.600)
to a point where the system is competitive for it.
Lex Fridman (1:18:16.360)
So my job is to be,
Lex Fridman (1:18:18.880)
we have this tagline in our company, cascading disruption.
Charles Hoskinson (1:18:21.920)
My job is to be the first domino.
Lex Fridman (1:18:23.740)
Just kind of knock it over and watch the cascade
Lex Fridman (1:18:26.600)
and it kind of blows and blows and blows up
Lex Fridman (1:18:28.400)
until eventually it gets to where we need to go.
Lex Fridman (1:18:31.280)
And what I was trying to think about with Cardano
Lex Fridman (1:18:33.520)
was how do you build the minimum viable set
Charles Hoskinson (1:18:36.560)
of tools and social processes
Lex Fridman (1:18:40.200)
that once we push the domino,
Charles Hoskinson (1:18:42.080)
the system will just evolve to a point
Lex Fridman (1:18:43.880)
where eventually you can grow to fill that need,
Charles Hoskinson (1:18:46.200)
not out of charity, but out of self interest.
Lex Fridman (1:18:49.360)
People want things better, faster, cheaper.
Charles Hoskinson (1:18:51.880)
People want to have economic agency,
Lex Fridman (1:18:54.740)
especially when they lack it.
Charles Hoskinson (1:18:56.280)
Nobody wants to grow up in a world where they're unbanked
Lex Fridman (1:18:59.220)
and they have no access to marketplaces.
Charles Hoskinson (1:19:01.080)
They're gonna seek it.
Lex Fridman (1:19:02.260)
Look at Mpesa.
Charles Hoskinson (1:19:03.240)
It's the great example of that, like cell phone minutes
Lex Fridman (1:19:06.240)
they're using as a currency.
Lex Fridman (1:19:07.840)
So that's where we're at.
Lex Fridman (1:19:09.760)
And I say a few more years,
Charles Hoskinson (1:19:10.860)
I think we'll have that rate minimum viable set of dynamics
Lex Fridman (1:19:13.840)
inside the system.
Lex Fridman (1:19:15.120)
And then it's inevitable in my view
Lex Fridman (1:19:16.920)
that it'll kind of grow and consume and become this concept.
Lex Fridman (1:19:20.200)
And what's really cool is there's competition
Lex Fridman (1:19:21.640)
in the systems and concepts.
Lex Fridman (1:19:22.760)
So China is trying to do the same thing.
Lex Fridman (1:19:24.760)
They're saying, how do we de dollarize the world
Lex Fridman (1:19:26.800)
and create a digital Yuan?
Lex Fridman (1:19:28.280)
So they have a very top down notion
Charles Hoskinson (1:19:30.180)
of how to apply this technology and bring it in.
Lex Fridman (1:19:32.200)
And they even have an identity system
Charles Hoskinson (1:19:33.440)
they're building in parallel called social credit.
Lex Fridman (1:19:35.720)
We have an identity system,
Charles Hoskinson (1:19:36.680)
a talaprism that we're putting in.
Lex Fridman (1:19:38.240)
Ours is bottom up and you own your own identity,
Charles Hoskinson (1:19:40.300)
social credit.
Lex Fridman (1:19:41.140)
You have no idea.
Charles Hoskinson (1:19:41.960)
You just have a number and some computers giving it to you,
Lex Fridman (1:19:43.960)
but they're both trying to do the exact same thing.
Lex Fridman (1:19:46.140)
And it's gonna be this clash of cultures at some point
Lex Fridman (1:19:49.020)
between the open fosses
Lex Fridman (1:19:50.780)
and the top down authoritarian fosses
Lex Fridman (1:19:53.160)
and probably some Hegelian dialectic action to happen.
Charles Hoskinson (1:19:56.040)
We'll create some sort of somewhat closed,
Lex Fridman (1:19:59.120)
somewhat authoritarian, libertarian utopia.
Charles Hoskinson (1:20:02.760)
Yeah, most likely it would be AIs battling
Lex Fridman (1:20:05.560)
in the space of fosses.
Lex Fridman (1:20:06.680)
So I really like this idea of financial operating system,
Lex Fridman (1:20:08.980)
but the letter F, so financial,
Charles Hoskinson (1:20:13.520)
is this just a basic mechanism
Lex Fridman (1:20:18.020)
with which you can have social interaction
Charles Hoskinson (1:20:19.920)
therefore or all kinds of interactions
Lex Fridman (1:20:22.320)
therefore have an identity?
Lex Fridman (1:20:23.740)
Like is F essential to this?
Lex Fridman (1:20:26.180)
Yeah, because that's how people care.
Charles Hoskinson (1:20:28.220)
You need resources to survive.
Lex Fridman (1:20:30.320)
And finances is kind of like this field
Charles Hoskinson (1:20:32.520)
of managing your resources in an intelligent way.
Lex Fridman (1:20:36.160)
And you could call it SOFI too, social finance.
Charles Hoskinson (1:20:38.920)
The nomenclature hasn't exactly been settled
Lex Fridman (1:20:42.400)
for our industry and that's fun.
Lex Fridman (1:20:44.440)
But basically the concept is that you have something
Lex Fridman (1:20:48.800)
and you wanna be able to store it, transform it,
Charles Hoskinson (1:20:51.280)
trade it and use it to survive.
Lex Fridman (1:20:54.040)
And the question is what rails do you do that on?
Lex Fridman (1:20:56.720)
Do you do those on centralized controlled rails
Lex Fridman (1:20:59.360)
where there are these third parties
Charles Hoskinson (1:21:01.280)
that are basically able to live off those things,
Lex Fridman (1:21:04.440)
become very fat and nepotistic?
Lex Fridman (1:21:06.020)
Or do you wanna do it on rails where there's no middleman?
Lex Fridman (1:21:08.620)
You have a direct relationship
Charles Hoskinson (1:21:09.960)
with whoever you're doing business
Lex Fridman (1:21:11.280)
and if you invite more people into the transaction,
Charles Hoskinson (1:21:13.200)
they're middlemen of value, not necessity.
Lex Fridman (1:21:15.580)
And that's really the, I would like to say
Charles Hoskinson (1:21:17.560)
the resident detra of our space,
Lex Fridman (1:21:19.240)
that the reason we exist is to try to figure out a way
Charles Hoskinson (1:21:21.600)
to kill the middleman and try to figure out a way
Lex Fridman (1:21:24.260)
that we can better quantify value and transform it,
Charles Hoskinson (1:21:27.060)
move it, manipulate it.
Lex Fridman (1:21:28.480)
And in many ways we've actually discovered
Charles Hoskinson (1:21:30.260)
some amazing things in the last 10 years as an industry.
Lex Fridman (1:21:32.760)
Like we've kind of created the financial stem cell.
Charles Hoskinson (1:21:35.440)
This idea of a token can now is just as well
Lex Fridman (1:21:37.800)
be a national currency as a CBDC
Charles Hoskinson (1:21:39.880)
as it can represent a crypto kitty.
Lex Fridman (1:21:42.560)
The same architecture can do stuff at the nation scale,
Charles Hoskinson (1:21:46.100)
can do stuff for a 12 year old kid in Texas.
Lex Fridman (1:21:48.400)
It's pretty amazing to see that.
Lex Fridman (1:21:50.040)
But sort of in that whiteboard presentation,
Lex Fridman (1:21:54.960)
you gave these three phases and you're kind of implying
Charles Hoskinson (1:21:58.920)
that there'll be end phases to this whole evolution.
Lex Fridman (1:22:02.800)
And Cardano is just like the cutting edge.
Lex Fridman (1:22:05.400)
But if you look back to Bitcoin,
Lex Fridman (1:22:08.800)
how would you compare Cardano versus Bitcoin?
Charles Hoskinson (1:22:12.320)
Sort of where we are, how we started and how it's going.
Lex Fridman (1:22:16.200)
Okay, so what I did in that video and I've done
Charles Hoskinson (1:22:20.080)
in a lot of media interviews,
Lex Fridman (1:22:21.360)
because I think it really helps people understand
Charles Hoskinson (1:22:23.560)
where we're at in the clock is face things
Lex Fridman (1:22:26.560)
in terms of generations.
Lex Fridman (1:22:27.760)
And so I said, well, the first generation is Bitcoin.
Lex Fridman (1:22:29.920)
And really the problem Bitcoin was trying to solve
Charles Hoskinson (1:22:31.800)
is saying every time we wanna represent or move value,
Lex Fridman (1:22:34.880)
we need some sort of trusted third party to facilitate that.
Lex Fridman (1:22:39.000)
So can we build some sort of system
Lex Fridman (1:22:40.480)
where we can create some notion of value
Charles Hoskinson (1:22:42.320)
that can be teleported around the world
Lex Fridman (1:22:44.880)
and it doesn't require a trusted third party?
Charles Hoskinson (1:22:47.240)
That's it.
Lex Fridman (1:22:48.080)
And it's done in a beautiful way
Charles Hoskinson (1:22:49.720)
because it didn't try to be anything else.
Lex Fridman (1:22:52.480)
It just was, you only have Bitcoin,
Charles Hoskinson (1:22:54.480)
you can only do one type of thing, you can only push it.
Lex Fridman (1:22:56.760)
You can do some things on the encumbrances
Charles Hoskinson (1:22:58.760)
of like multi SIG and other things,
Lex Fridman (1:23:00.680)
but that's a one trick pony as a system.
Lex Fridman (1:23:04.200)
And it wasn't really clear if that was gonna work or not
Lex Fridman (1:23:06.440)
for a long time.
Charles Hoskinson (1:23:07.280)
It took several years to build up enough network effect
Lex Fridman (1:23:09.800)
and for Bitcoins to actually become valuable.
Lex Fridman (1:23:12.160)
And I'd say the inflection point was 2013.
Lex Fridman (1:23:15.160)
And at that point it became a billion dollar market cap.
Charles Hoskinson (1:23:17.720)
There were like Silicon Valley startups,
Lex Fridman (1:23:20.000)
real exchanges performing.
Lex Fridman (1:23:21.640)
And it got to a point where there was legitimacy
Lex Fridman (1:23:23.640)
behind the concept and people started getting,
Charles Hoskinson (1:23:25.480)
this is a really incredible idea
Lex Fridman (1:23:27.520)
because I can evade capital controls with it.
Charles Hoskinson (1:23:29.920)
I can like move $10 billion of something
Lex Fridman (1:23:32.800)
from one country to another country in five minutes.
Charles Hoskinson (1:23:35.080)
It's like, I could never do that before.
Lex Fridman (1:23:36.800)
And you know, this is incredible.
Charles Hoskinson (1:23:38.920)
Okay, the problem is the minute that people validate
Lex Fridman (1:23:42.000)
the idea, they immediately want something they don't have.
Lex Fridman (1:23:46.280)
So like the minute Elon can land a rocket,
Lex Fridman (1:23:48.880)
there's the next big thing, right?
Charles Hoskinson (1:23:50.480)
You've landed the Falcon 9, now you're on the Starship.
Lex Fridman (1:23:53.600)
Similarly, you say, okay,
Charles Hoskinson (1:23:55.000)
I want programmability with this thing.
Lex Fridman (1:23:57.480)
It's kind of like when JavaScript came to the web browser,
Charles Hoskinson (1:23:59.800)
you went from these static, perhaps pretty,
Lex Fridman (1:24:02.240)
but ultimately static non interactive pages
Charles Hoskinson (1:24:05.480)
to YouTube and Google and Facebook
Lex Fridman (1:24:08.080)
and these amazing, rich, incredible experiences,
Charles Hoskinson (1:24:10.840)
because now you can actually interact with the user.
Lex Fridman (1:24:13.240)
You can program things, stuff runs on their side,
Charles Hoskinson (1:24:15.520)
stuff runs on your side.
Lex Fridman (1:24:16.800)
It's a beautiful two way relationship.
Lex Fridman (1:24:19.160)
So that's what Ethereum effectively did.
Lex Fridman (1:24:21.280)
They bolted a programming language onto a blockchain
Lex Fridman (1:24:24.120)
and they went from a certain use case
Lex Fridman (1:24:27.640)
to whatever your imagination can have,
Charles Hoskinson (1:24:30.040)
you know, like sunshine and rainbows and unicorns
Lex Fridman (1:24:32.520)
and these types of things.
Lex Fridman (1:24:33.360)
So what you're saying is Bitcoin is HTML
Lex Fridman (1:24:35.800)
and Ethereum is JavaScript?
Charles Hoskinson (1:24:37.400)
Basically, yeah, it was like when JavaScript came
Lex Fridman (1:24:39.360)
and with like JavaScript,
Charles Hoskinson (1:24:41.040)
it has all kinds of problems and issues.
Lex Fridman (1:24:43.200)
I wonder who's flash in this analogy, this metaphor,
Lex Fridman (1:24:46.080)
but let's not go there.
Lex Fridman (1:24:47.080)
Well, actually there were plenty of active Xs and flashes.
Charles Hoskinson (1:24:49.480)
NXT was an example of a failed to start
Lex Fridman (1:24:52.120)
and BitShares was another example.
Charles Hoskinson (1:24:54.120)
There were a lot of people who tried to add some notion
Lex Fridman (1:24:56.120)
of programmability in or a different view
Charles Hoskinson (1:24:58.600)
of how these things should be done
Lex Fridman (1:25:00.200)
and they were not as competitive.
Charles Hoskinson (1:25:02.040)
Ethereum kind of came out at that JavaScript moment.
Lex Fridman (1:25:04.320)
Okay, the minute you have that,
Lex Fridman (1:25:05.400)
and suddenly you have ICOs and DeFi and STOs and NFTs
Lex Fridman (1:25:09.640)
and all these word salads of things
Lex Fridman (1:25:12.000)
and then people start using it, they get frustrated.
Lex Fridman (1:25:13.920)
Why?
Charles Hoskinson (1:25:14.760)
Because it's too slow, it's too expensive,
Lex Fridman (1:25:16.600)
it doesn't talk to the things they want it to talk to
Lex Fridman (1:25:18.760)
and also it gets too big to manage itself.
Lex Fridman (1:25:21.840)
When you're small, you have founders and foundations
Lex Fridman (1:25:25.120)
and you have trusted actors and core developers
Lex Fridman (1:25:27.400)
and you can feed them with pizzas.
Charles Hoskinson (1:25:29.240)
You know them, you can meet them,
Lex Fridman (1:25:30.720)
you can shake their hands at conferences.
Charles Hoskinson (1:25:32.560)
When you're a multi billion person system,
Lex Fridman (1:25:36.560)
you're too large to be able to do that.
Charles Hoskinson (1:25:39.880)
For example, we had the Shelley Summit last year,
Lex Fridman (1:25:42.880)
we invited Vint Cerf to come to the summit.
Charles Hoskinson (1:25:44.880)
Vint's a brilliant guy and he created the internet
Lex Fridman (1:25:47.560)
with Bob and the rest of the gang
Lex Fridman (1:25:49.200)
and back in those days, it was such a simple small system
Lex Fridman (1:25:53.460)
that one of their students, they said,
Charles Hoskinson (1:25:56.000)
hey, you need to test it.
Lex Fridman (1:25:56.840)
He created a video game just to kind of test the thing.
Charles Hoskinson (1:25:58.400)
You could call the guy on the other side and say,
Lex Fridman (1:26:00.120)
are you seeing this?
Lex Fridman (1:26:00.960)
Are you getting the signal?
Lex Fridman (1:26:01.840)
They used to have a actual address book for email addresses.
Charles Hoskinson (1:26:05.000)
Yeah, so you'd open up the book and look it up
Lex Fridman (1:26:07.640)
and they'll look at the internet,
Lex Fridman (1:26:08.480)
it's like, who's in charge of that?
Lex Fridman (1:26:10.040)
It's this gargantuan network
Lex Fridman (1:26:12.880)
and there's no group of people you can bring in
Lex Fridman (1:26:15.340)
and thus the internet evolves very slowly, you see?
Lex Fridman (1:26:18.960)
And so that's the problem is that you have this situation
Lex Fridman (1:26:21.360)
where you wanna do lots of utility,
Charles Hoskinson (1:26:23.340)
you wanna do a lot of things,
Lex Fridman (1:26:24.180)
you wanna be a financial operating system
Lex Fridman (1:26:26.100)
and be everything to everyone
Lex Fridman (1:26:28.800)
but then your rate of evolution slows down
Charles Hoskinson (1:26:30.660)
as your rate of adoption speeds up.
Lex Fridman (1:26:32.560)
So that's one of the other design goals
Charles Hoskinson (1:26:35.040)
of the third generation.
Lex Fridman (1:26:35.880)
It's not good enough just to do things better, faster,
Charles Hoskinson (1:26:37.680)
cheaper and have consistent cost
Lex Fridman (1:26:39.840)
with your population growing
Charles Hoskinson (1:26:41.500)
or talk to everything, your wifi moment.
Lex Fridman (1:26:43.880)
You also need a system that can govern itself
Charles Hoskinson (1:26:46.480)
at a scale of millions to billions of people
Lex Fridman (1:26:48.280)
who have divergent interests.
Charles Hoskinson (1:26:49.740)
Some cases ice pick an eye divergent interest.
Lex Fridman (1:26:52.400)
They really hate each other and they don't get along.
Lex Fridman (1:26:55.440)
And so that's what we termed
Lex Fridman (1:26:56.800)
a third generation cryptocurrency
Lex Fridman (1:26:58.360)
and there's a lot of people attempting to compete
Lex Fridman (1:27:00.920)
in that space.
Charles Hoskinson (1:27:01.760)
There's Tezos and Algran and ICP and Polkadot and so forth.
Lex Fridman (1:27:05.840)
And each and every one of them kind of brings
Charles Hoskinson (1:27:07.580)
a different blend of things that they value.
Lex Fridman (1:27:09.640)
So it's not completely equal
Charles Hoskinson (1:27:11.600)
between scalability, interoperability and sustainability.
Lex Fridman (1:27:14.640)
Some people were very focused on high throughput,
Charles Hoskinson (1:27:17.280)
lots of transactions perspective.
Lex Fridman (1:27:19.200)
Other people very focused on governance
Charles Hoskinson (1:27:21.720)
like Tezos is like the governance chain
Lex Fridman (1:27:24.880)
and they were one of the first
Charles Hoskinson (1:27:25.920)
to do a self amending ledger.
Lex Fridman (1:27:27.280)
And other people are like Aeon or Polkadot.
Charles Hoskinson (1:27:30.120)
They're really thinking carefully
Lex Fridman (1:27:31.320)
about how do we build a nice interoperable ecosystem.
Charles Hoskinson (1:27:34.040)
With Cardano, we tried to actually tackle all three
Lex Fridman (1:27:36.000)
at the same time, which was one of the reasons
Lex Fridman (1:27:37.600)
why we were a little slower out of the gate.
Lex Fridman (1:27:39.920)
We had to write a lot more protocols
Lex Fridman (1:27:41.320)
but we think we've kind of come up
Lex Fridman (1:27:42.960)
with a beautiful interlocking design for all of them.
Lex Fridman (1:27:45.880)
And again, the point is not to get it perfect
Lex Fridman (1:27:48.160)
but rather get those just right set of evolutionary factors
Charles Hoskinson (1:27:52.040)
that when you click the domino,
Lex Fridman (1:27:54.640)
it just self evolves into what you need it to get to.
Charles Hoskinson (1:27:57.520)
Allow me to stretch the metaphor farther.
Lex Fridman (1:28:01.800)
If Bitcoin is HTML, there's HTML5.
Charles Hoskinson (1:28:04.920)
If Ethereum is JavaScript, JavaScript with V8
Lex Fridman (1:28:07.680)
has become quite fast, quite, you know,
Charles Hoskinson (1:28:09.600)
it runs much of the internet.
Lex Fridman (1:28:11.240)
So the argument could be that eventually everything
Charles Hoskinson (1:28:15.600)
will be JavaScript or maybe you could say
Lex Fridman (1:28:18.440)
eventually everything will be HTML
Lex Fridman (1:28:20.600)
and it should be a bunch of different tools
Lex Fridman (1:28:22.160)
that generate that HTML.
Lex Fridman (1:28:23.800)
So is it possible that just like Rousseau,
Lex Fridman (1:28:28.280)
we eventually return to generation one Bitcoin
Charles Hoskinson (1:28:32.000)
or we return to generation two Ethereum
Lex Fridman (1:28:37.800)
at the end of this journey?
Charles Hoskinson (1:28:39.360)
Yeah, the problem is your tail is wagging the dog there.
Lex Fridman (1:28:42.280)
And it's not, you have a situation
Charles Hoskinson (1:28:44.360)
where you're so focused on the technology
Lex Fridman (1:28:46.640)
that you're failing to understand
Charles Hoskinson (1:28:48.640)
that there's still Daisy here.
Lex Fridman (1:28:50.520)
You still have the user and where's the app store?
Lex Fridman (1:28:53.120)
Where's the one click install?
Lex Fridman (1:28:54.800)
Where's the use and utility?
Charles Hoskinson (1:28:56.160)
You know, all these layer two protocols
Lex Fridman (1:28:58.040)
and these DeFi applications in five years,
Charles Hoskinson (1:28:59.880)
they're completely protocol and blockchain agnostic
Lex Fridman (1:29:03.200)
because at the end of the day,
Charles Hoskinson (1:29:04.040)
they care about liquidity, operating cost
Lex Fridman (1:29:06.000)
and user experience.
Charles Hoskinson (1:29:07.400)
It's so a preposterous and absurd for somebody to say,
Lex Fridman (1:29:10.360)
oh, well, I'm gonna go build my application,
Charles Hoskinson (1:29:13.000)
get on the Apple store
Lex Fridman (1:29:14.840)
and I am gonna use Amazon as my web host.
Lex Fridman (1:29:17.480)
And no matter what happens, I will always use Amazon
Lex Fridman (1:29:20.440)
even if the operating cost is crazy.
Lex Fridman (1:29:22.200)
I see. You see?
Lex Fridman (1:29:23.280)
And so we're just in a unique period of history
Charles Hoskinson (1:29:25.920)
where there's a network effect
Lex Fridman (1:29:27.160)
around some initial infrastructure
Lex Fridman (1:29:29.120)
and people tend to be building around that,
Lex Fridman (1:29:30.840)
but every single one of the top DeFi providers
Charles Hoskinson (1:29:34.920)
are if they're getting successful
Lex Fridman (1:29:36.680)
into a certain network effect,
Charles Hoskinson (1:29:38.000)
they're having the multi chain conversation.
Lex Fridman (1:29:40.400)
So I don't really believe in a winner takes all
Charles Hoskinson (1:29:42.560)
maximums view of, well, there's gonna be some protocol
Lex Fridman (1:29:45.120)
that becomes the God protocol first
Charles Hoskinson (1:29:46.640)
because they evolved too quickly.
Lex Fridman (1:29:48.400)
Second, the incentives aren't aligned for that.
Charles Hoskinson (1:29:50.920)
TCPIP didn't have a token connected to it.
Lex Fridman (1:29:53.240)
There was no financial incentive
Charles Hoskinson (1:29:55.000)
where if TCPIP got adopted over something else,
Lex Fridman (1:29:57.320)
they'd make some big company crazy amounts of money.
Charles Hoskinson (1:30:00.160)
It was a useful piece of infrastructure.
Lex Fridman (1:30:02.680)
So I think that the third generation is gonna be as defined
Charles Hoskinson (1:30:06.080)
by the social components and the usability components
Lex Fridman (1:30:09.080)
as it is by the technological capabilities of the system.
Charles Hoskinson (1:30:12.360)
Really what these technological capabilities gave you
Lex Fridman (1:30:14.680)
was the ability to demonstrate a proof of concept
Lex Fridman (1:30:18.040)
and say these things are possible.
Lex Fridman (1:30:19.240)
Kind of like Xerox PARC, when Steve and Bill came in,
Charles Hoskinson (1:30:22.600)
they said, wow, you have networked computers,
Lex Fridman (1:30:25.240)
object oriented programming and a GUI.
Lex Fridman (1:30:28.520)
And this is like, what was it, 70s?
Lex Fridman (1:30:30.400)
It's like, wow, it's like incredible.
Lex Fridman (1:30:32.000)
But none of that was an actual product.
Lex Fridman (1:30:33.520)
That wasn't a Macintosh, but it was enough to get the idea.
Lex Fridman (1:30:37.240)
And then it was a race to how do we productize
Lex Fridman (1:30:39.400)
something like that.
Lex Fridman (1:30:40.280)
And in that case, it actually took several decades
Lex Fridman (1:30:43.120)
to roll out that vision that those guys had.
Lex Fridman (1:30:45.200)
And I think that's what Bitcoin and Ethereum did.
Lex Fridman (1:30:47.720)
But what's unique about this is normally you throw away
Charles Hoskinson (1:30:50.400)
the prior experiments.
Lex Fridman (1:30:51.720)
With these things, these are self evolving systems.
Lex Fridman (1:30:54.040)
So it's entirely possible to, Joe Rogan quote,
Lex Fridman (1:30:57.480)
to evolve Bitcoin to a point where it could become
Charles Hoskinson (1:31:01.080)
a third generation system if desired,
Lex Fridman (1:31:02.960)
as some amalgamation of layer one and layer two protocols.
Lex Fridman (1:31:05.720)
And it's the same for Ethereum.
Lex Fridman (1:31:06.920)
In fact, Vitalik is throwing away Ethereum
Lex Fridman (1:31:09.080)
and replacing with Ethereum too,
Lex Fridman (1:31:10.960)
because he recognizes he needs to upgrade
Lex Fridman (1:31:12.760)
and evolve the system.
Lex Fridman (1:31:13.800)
And that's what makes it fun because the techniques
Lex Fridman (1:31:16.880)
and methodologies that they've chosen to evolve
Lex Fridman (1:31:19.120)
and upgrade this system are distinctly different
Charles Hoskinson (1:31:22.840)
from the ones that we've chosen.
Lex Fridman (1:31:24.280)
And we have no idea which one's actually going to win,
Lex Fridman (1:31:26.800)
but we learn from each other and we co evolve
Lex Fridman (1:31:29.160)
from each other.
Lex Fridman (1:31:30.000)
So you're running like all these experiments in real time
Lex Fridman (1:31:32.520)
in a giant marketplace, and maybe they'll consolidate,
Charles Hoskinson (1:31:35.720)
maybe they'll stay divergent.
Lex Fridman (1:31:36.880)
I mean, look at big tech, you have Google, Apple,
Charles Hoskinson (1:31:39.200)
Microsoft, Facebook, they all coexist
Lex Fridman (1:31:41.240)
and they're trillion dollar companies.
Charles Hoskinson (1:31:42.880)
Some cases with TCP, it consolidates to one standard.
Lex Fridman (1:31:46.120)
And that's what we ended up using.
Lex Fridman (1:31:47.720)
So what's your intuition with Cardano having the proof
Lex Fridman (1:31:51.760)
of stake, and then eventually smart contracts
Charles Hoskinson (1:31:55.560)
versus the Bitcoin with layer two technologies,
Lex Fridman (1:31:59.040)
this kind of evolving creature.
Charles Hoskinson (1:32:02.160)
Again, you said you can't really predict the future,
Lex Fridman (1:32:04.160)
but what's your intuition why one might be more successful
Lex Fridman (1:32:09.160)
than the other?
Lex Fridman (1:32:10.800)
So the problem with Bitcoin is it is so slow.
Charles Hoskinson (1:32:15.000)
It's like the mainframe programming of the past.
Lex Fridman (1:32:18.000)
And the only reason it's still around is because
Charles Hoskinson (1:32:20.120)
there was so much invested in keeping it around
Lex Fridman (1:32:22.280)
that we just kind of have to leave it there
Lex Fridman (1:32:24.200)
and one day Cobalt will die.
Lex Fridman (1:32:29.800)
There's nothing about it from a collection of USPs
Charles Hoskinson (1:32:32.560)
that's particularly desirable.
Lex Fridman (1:32:34.200)
You have extremely long settlement time,
Charles Hoskinson (1:32:36.040)
you have extremely low programmability.
Lex Fridman (1:32:38.240)
It is not aware of any other system.
Charles Hoskinson (1:32:39.760)
There's no native way of issuing an asset in that system.
Lex Fridman (1:32:42.400)
You can't even do a pull transaction.
Charles Hoskinson (1:32:44.200)
You can't do anything that's interesting or unique there.
Lex Fridman (1:32:47.120)
And yeah, all due respect, it's, you know,
Charles Hoskinson (1:32:50.000)
mafia, all due respect, Tom.
Lex Fridman (1:32:51.520)
You got some problems.
Charles Hoskinson (1:32:54.200)
You need to lose some weight.
Lex Fridman (1:32:55.040)
You come to me on the day of my daughter's wedding.
Charles Hoskinson (1:32:56.640)
I know, I know.
Lex Fridman (1:32:57.480)
So, you know, all due respect to the Bitcoin people.
Charles Hoskinson (1:32:59.440)
It's like an amazing, incredible first generation thing.
Lex Fridman (1:33:03.240)
And it really, we're all here because of Bitcoin.
Lex Fridman (1:33:06.520)
But the problem is you have to upgrade the damn thing.
Lex Fridman (1:33:08.600)
You know, just because you were a high school football star
Charles Hoskinson (1:33:11.600)
doesn't mean that 30 years later you're still
Lex Fridman (1:33:14.400)
a high school football star in the same shape.
Charles Hoskinson (1:33:16.320)
You got the beer belly, you're old,
Lex Fridman (1:33:17.720)
you're not doing this thing again.
Lex Fridman (1:33:18.880)
And that's what Bitcoin has to do.
Lex Fridman (1:33:20.480)
There's fundamental improvements
Charles Hoskinson (1:33:22.000)
that I think Bitcoin can make at the protocol level
Lex Fridman (1:33:25.600)
that would actually make it an incredibly competitive system.
Charles Hoskinson (1:33:28.280)
Like if they wanted to keep Nakamoto consensus,
Lex Fridman (1:33:30.560)
proof of work, there's ways to enhance proof of work.
Charles Hoskinson (1:33:33.320)
I mean, Minkun Sir did this with BitcoinNG,
Lex Fridman (1:33:36.080)
Promotivus Wanus did this with Prism.
Charles Hoskinson (1:33:38.640)
Make it 10,000 times faster
Lex Fridman (1:33:40.360)
and you don't compromise the fundamental security assumptions
Charles Hoskinson (1:33:43.040)
that the system has.
Lex Fridman (1:33:44.200)
You can add programmability to it.
Charles Hoskinson (1:33:46.080)
Blockstream created a language called Simplicity.
Lex Fridman (1:33:48.520)
And so there's actual ways to extend.
Lex Fridman (1:33:50.520)
And we did this with Cardano with the extended UTXO model.
Lex Fridman (1:33:53.360)
There's ways to extend what Bitcoin has.
Charles Hoskinson (1:33:55.680)
Keep the philosophy, the accounting,
Lex Fridman (1:33:57.480)
the way of thinking about transactions.
Lex Fridman (1:33:59.680)
But then suddenly you can now do DeFi and other things.
Lex Fridman (1:34:02.480)
But what they've done is said,
Charles Hoskinson (1:34:03.560)
we will not evolve the base layer at all.
Lex Fridman (1:34:06.240)
And we're just gonna build all this layer two stuff,
Charles Hoskinson (1:34:08.800)
which is usually highly fragile and centralized
Lex Fridman (1:34:11.680)
and requires enormous effort at the base level
Charles Hoskinson (1:34:13.760)
to do anything.
Lex Fridman (1:34:14.920)
It's not a coincidence Vitalik started as a color coins guy
Lex Fridman (1:34:17.880)
and a master coin guy hanging out in those circles.
Lex Fridman (1:34:20.280)
He was trying to innovate and do things in Bitcoin.
Lex Fridman (1:34:22.880)
And it was so hard and difficult
Lex Fridman (1:34:24.920)
that he started diverging and going and doing things
Charles Hoskinson (1:34:27.240)
in a different system entirely.
Lex Fridman (1:34:30.080)
I knew the master coin guys,
Charles Hoskinson (1:34:31.560)
JR and all these people, they were maximalists.
Lex Fridman (1:34:33.720)
They really wanted to build something cool
Lex Fridman (1:34:35.480)
and exciting for Bitcoin.
Lex Fridman (1:34:36.600)
And anything they did, the developers would attack them.
Charles Hoskinson (1:34:39.280)
It's all you're misusing op return, you're doing this,
Lex Fridman (1:34:42.000)
that it was a holy war anytime you wanted to evolve.
Lex Fridman (1:34:44.720)
So I think it's its own worst enemy.
Lex Fridman (1:34:46.760)
It has the network effect, it has the brand name,
Charles Hoskinson (1:34:49.040)
it has the regulatory approval,
Lex Fridman (1:34:51.000)
but there's no way to change the system,
Charles Hoskinson (1:34:53.720)
even correcting obvious downsides in that system.
Lex Fridman (1:34:56.720)
Now, what's really cool is Ethereum
Charles Hoskinson (1:34:58.440)
doesn't suffer from that problem.
Lex Fridman (1:35:00.360)
It's getting to a point
Charles Hoskinson (1:35:02.040)
where it has a similar network effect to Bitcoin,
Lex Fridman (1:35:04.240)
but the community there is completely different in culture.
Charles Hoskinson (1:35:08.040)
They love evolving, they love upgrading,
Lex Fridman (1:35:09.960)
sometimes a little too much.
Lex Fridman (1:35:11.600)
And so that means that if you look at the trajectory
Lex Fridman (1:35:15.080)
of things, if I had to bet just those two systems,
Charles Hoskinson (1:35:17.360)
Bitcoin or Ethereum, I would say nine times out of 10,
Lex Fridman (1:35:20.560)
Ethereum is going to win the fight against Bitcoin
Charles Hoskinson (1:35:23.400)
if it was the only competitor.
Lex Fridman (1:35:25.240)
But obviously we're here and a lot of other people are here.
Lex Fridman (1:35:27.600)
So there's different things going on.
Lex Fridman (1:35:29.640)
So it's a much more complex game.
Lex Fridman (1:35:31.520)
But I think that's always a key,
Lex Fridman (1:35:33.360)
zooming out a little bit, set the technology aside
Lex Fridman (1:35:36.640)
and the word salad of cryptography aside
Lex Fridman (1:35:38.560)
because it's too much.
Lex Fridman (1:35:39.760)
What you have to always do is say,
Lex Fridman (1:35:41.080)
what incentive does the system have to evolve?
Lex Fridman (1:35:44.040)
And when you look at things like Android and the App Store
Lex Fridman (1:35:46.640)
and these analogous platforms,
Charles Hoskinson (1:35:48.920)
you say, ah, the evolution is user driven
Lex Fridman (1:35:51.120)
and there's a financial incentive
Charles Hoskinson (1:35:52.360)
for the user to participate.
Lex Fridman (1:35:53.800)
So if I had to look at the trajectory of this thing,
Charles Hoskinson (1:35:56.200)
come back 10 years later,
Lex Fridman (1:35:57.680)
it's probably gonna have millions of applications
Lex Fridman (1:35:59.880)
and lots of stuff going on
Lex Fridman (1:36:01.720)
because that's the way the system was constructed.
Charles Hoskinson (1:36:04.240)
Okay, it makes sense.
Lex Fridman (1:36:05.560)
When you look at Bitcoin, you say,
Lex Fridman (1:36:06.680)
what is the incentive to evolve the system?
Lex Fridman (1:36:09.280)
There's none.
Lex Fridman (1:36:10.520)
What is the incentive for the system
Lex Fridman (1:36:12.360)
to get more competitive?
Charles Hoskinson (1:36:13.720)
There's none.
Lex Fridman (1:36:14.560)
In fact, it's the opposite.
Charles Hoskinson (1:36:15.400)
They've turned it into a religion.
Lex Fridman (1:36:16.540)
I was in Miami at this Bitcoin conference there.
Charles Hoskinson (1:36:19.520)
I had a toilet paper roll thrown at me
Lex Fridman (1:36:21.540)
that had shit coin written on it.
Charles Hoskinson (1:36:23.100)
You have Max Keiser out on the stage,
Lex Fridman (1:36:25.520)
doing his best Rick James impression.
Charles Hoskinson (1:36:28.320)
We'll see the guy that did the F Elon, fuck Elon.
Lex Fridman (1:36:32.060)
Yes, yes, yes.
Lex Fridman (1:36:33.100)
And so you're watching this stuff and you say,
Lex Fridman (1:36:35.500)
okay, first, why would anybody wanna join that?
Lex Fridman (1:36:37.820)
And then second, where is the conversation
Lex Fridman (1:36:40.540)
about how do we achieve something?
Charles Hoskinson (1:36:42.580)
I started with Cardano, the end in mind.
Lex Fridman (1:36:44.460)
I said, we really wanna sit down
Lex Fridman (1:36:47.040)
and build this financial operating system.
Lex Fridman (1:36:49.000)
And the definition of success is
Charles Hoskinson (1:36:50.980)
the poorest person in the world
Lex Fridman (1:36:52.340)
has access to the same system
Charles Hoskinson (1:36:53.920)
as the richest person in the world
Lex Fridman (1:36:55.500)
and they both get treated fairly.
Charles Hoskinson (1:36:57.740)
We've never had that happen before.
Lex Fridman (1:36:59.220)
Okay, that's something.
Charles Hoskinson (1:37:00.100)
You can agree with it, disagree with it,
Lex Fridman (1:37:01.380)
say it's boiling the ocean, it's impossible.
Charles Hoskinson (1:37:03.220)
At least I have something.
Lex Fridman (1:37:04.500)
I can't for the life of me understand
Lex Fridman (1:37:06.380)
what the hell is the point of Bitcoin.
Lex Fridman (1:37:08.140)
When I joined the Bitcoin space way back in the day,
Charles Hoskinson (1:37:11.160)
it was, hey, we hate the dollar.
Lex Fridman (1:37:13.060)
And hey, we like gold a lot.
Charles Hoskinson (1:37:14.920)
Let's create digital gold.
Lex Fridman (1:37:15.980)
Let's build a payment system.
Lex Fridman (1:37:17.780)
And then it just kind of went all these different directions
Lex Fridman (1:37:20.060)
and nobody can actually tell you what Bitcoin is for.
Charles Hoskinson (1:37:22.700)
It's a store of value, okay.
Lex Fridman (1:37:25.820)
There's some proof of work thing
Charles Hoskinson (1:37:27.260)
where maybe you're like incentivizing
Lex Fridman (1:37:29.700)
alternative energy to be produced.
Charles Hoskinson (1:37:30.980)
I don't know.
Lex Fridman (1:37:32.340)
Nobody really knows the philosophy.
Charles Hoskinson (1:37:33.700)
There's no direction.
Lex Fridman (1:37:35.100)
And they say, but don't worry, just buy and hold
Lex Fridman (1:37:38.340)
and everything will sort its way out.
Lex Fridman (1:37:40.340)
I believe it's HODL.
Charles Hoskinson (1:37:41.380)
Yeah, HODL.
Lex Fridman (1:37:42.620)
What about the idea of digital gold?
Lex Fridman (1:37:44.460)
So trying to replace that particular physical material
Lex Fridman (1:37:46.900)
that is gold to transfer into the digital space.
Charles Hoskinson (1:37:49.340)
That's something.
Lex Fridman (1:37:50.180)
Okay, let's do that then.
Lex Fridman (1:37:51.700)
And just say that's all it does.
Lex Fridman (1:37:52.860)
Then why are we doing lightning?
Lex Fridman (1:37:54.140)
Why are we doing any of these other things?
Lex Fridman (1:37:55.340)
You don't really need with a commodity,
Charles Hoskinson (1:37:57.740)
a digital commodity, high throughput.
Lex Fridman (1:38:00.100)
You can have slow settlement.
Charles Hoskinson (1:38:01.340)
You can have high transaction fees,
Lex Fridman (1:38:02.760)
all these types of things.
Lex Fridman (1:38:03.600)
And that's fine.
Lex Fridman (1:38:05.020)
Okay, that's something, pick it.
Charles Hoskinson (1:38:07.280)
Well, the idea is to try to come up with technology
Lex Fridman (1:38:09.940)
like the lightning network
Charles Hoskinson (1:38:11.300)
that could have something like gold,
Lex Fridman (1:38:13.620)
but then still build an economy around it.
Charles Hoskinson (1:38:16.060)
Something with a high throughput transactions.
Lex Fridman (1:38:18.020)
And have we ever built a successful banking credit system
Lex Fridman (1:38:21.100)
off of gold?
Lex Fridman (1:38:22.340)
Never.
Charles Hoskinson (1:38:23.180)
It never works because there's too much volatility
Lex Fridman (1:38:25.500)
in the underlying asset.
Lex Fridman (1:38:26.720)
Would you take a gold denominated loan for something?
Lex Fridman (1:38:28.980)
If somebody says, all right,
Charles Hoskinson (1:38:29.820)
I'll give you five bars of gold to go buy this car
Lex Fridman (1:38:32.140)
and pay me back five and a half bars of gold.
Charles Hoskinson (1:38:35.040)
Nobody would know in five years where they come out
Lex Fridman (1:38:37.380)
in that kind of a range.
Charles Hoskinson (1:38:38.220)
The idea is that the gold is used
Lex Fridman (1:38:39.620)
for the settlement of transactions
Lex Fridman (1:38:41.240)
and then you're operating,
Lex Fridman (1:38:42.700)
the actual economy is operating outside of gold.
Lex Fridman (1:38:45.940)
And then you kind of connect back to gold.
Lex Fridman (1:38:48.220)
So we had to go back to the gold reserve
Lex Fridman (1:38:49.860)
and we tried that for a long time.
Lex Fridman (1:38:51.900)
It didn't really work in a modern global economy.
Charles Hoskinson (1:38:53.780)
We had the Brentwood's agreement and all these other things.
Lex Fridman (1:38:55.900)
And so I understand what you're saying
Lex Fridman (1:38:57.860)
and maybe there's some merit to that,
Lex Fridman (1:38:59.920)
but if that was really an earnest where they want to go,
Charles Hoskinson (1:39:02.180)
then the conversation should be about,
Lex Fridman (1:39:03.900)
well, how do we make it easy for layer two protocols
Lex Fridman (1:39:06.420)
to interact with Bitcoin?
Lex Fridman (1:39:08.140)
So why is simplicity not built into it?
Lex Fridman (1:39:10.260)
Why is it taking so long to do SnoreSigs?
Lex Fridman (1:39:12.180)
Why is it taking so long to do all these obvious upgrades,
Lex Fridman (1:39:14.940)
which are cryptographically low danger?
Lex Fridman (1:39:17.220)
Also NipaPals, not interactive proofs of proof of work.
Charles Hoskinson (1:39:20.260)
There's no cost to doing that.
Lex Fridman (1:39:21.860)
It's just a property of proof of work
Charles Hoskinson (1:39:23.660)
where certain puzzles are more special than other puzzles.
Lex Fridman (1:39:26.940)
And by noticing that you can create these beautiful proofs
Charles Hoskinson (1:39:29.700)
that allow you to have side chains and like clients.
Lex Fridman (1:39:32.020)
It's not compromising security of the system.
Charles Hoskinson (1:39:34.140)
It's just something you get for free with proof of work.
Lex Fridman (1:39:36.540)
Those came out in 2016.
Charles Hoskinson (1:39:38.100)
There's derivative work fly client floating around.
Lex Fridman (1:39:40.260)
Where the hell is it?
Charles Hoskinson (1:39:41.740)
This is the frustration that I have is like,
Lex Fridman (1:39:43.780)
if you really are serious about this whole lightning
Lex Fridman (1:39:45.860)
and gold economy thing, I love choice.
Lex Fridman (1:39:48.700)
I'm a libertarian by nature.
Charles Hoskinson (1:39:50.060)
I love competition.
Lex Fridman (1:39:51.540)
And I read all those books.
Charles Hoskinson (1:39:53.060)
I read Ludwig von Mises's work and Murray Rothbard's work.
Lex Fridman (1:39:56.140)
I love what Hayek had to say about private currencies.
Charles Hoskinson (1:39:58.660)
Let's go try it.
Lex Fridman (1:39:59.700)
That's great.
Lex Fridman (1:40:00.540)
But then you have to have some focus and commitment
Lex Fridman (1:40:03.140)
as an ecosystem.
Lex Fridman (1:40:04.140)
And the excuse they use is, well, no, we don't
Lex Fridman (1:40:07.100)
because we're decentralized.
Lex Fridman (1:40:08.340)
And because we're decentralized, we don't need that.
Lex Fridman (1:40:11.380)
As if there's some sort of guiding swarm intelligence
Charles Hoskinson (1:40:14.060)
that will naturally push the system
Lex Fridman (1:40:16.220)
in that particular direction.
Lex Fridman (1:40:17.940)
But then you ask, well,
Lex Fridman (1:40:19.100)
how do people measure the success of Bitcoin?
Charles Hoskinson (1:40:21.620)
Is it the fact that they've actually achieved
Lex Fridman (1:40:23.700)
lots of transactions and lots of actual economic activity
Lex Fridman (1:40:27.700)
and lots of businesses accepting Bitcoin?
Lex Fridman (1:40:29.380)
That will go up.
Charles Hoskinson (1:40:30.380)
It's the price.
Lex Fridman (1:40:31.980)
That's what they do.
Lex Fridman (1:40:33.180)
And that's the only thing they pay attention.
Lex Fridman (1:40:34.780)
That's why this is the most attended Bitcoin conference
Charles Hoskinson (1:40:37.100)
in history.
Lex Fridman (1:40:37.940)
Not because somehow Bitcoin got so much more adoption,
Charles Hoskinson (1:40:40.540)
it's because this is the highest price point Bitcoin
Lex Fridman (1:40:43.260)
has ever been this year, over 30,000.
Lex Fridman (1:40:46.020)
So first of all, let me state that, Charles,
Lex Fridman (1:40:47.780)
for the most part is purely objective.
Charles Hoskinson (1:40:51.420)
The bias that comes in, for the record, I want to say,
Lex Fridman (1:40:55.340)
that I have heard, because you mentioned the mafia,
Charles Hoskinson (1:40:58.060)
that you prefer Goodfellas over the Godfather.
Lex Fridman (1:41:00.860)
So a man who prefers Goodfellas over Godfather,
Charles Hoskinson (1:41:04.380)
you take it for that opinion for what it is.
Lex Fridman (1:41:09.580)
I actually had to think about that one for quite a bit.
Charles Hoskinson (1:41:11.900)
I think.
Lex Fridman (1:41:12.740)
Oh, come on.
Charles Hoskinson (1:41:13.580)
Joe Pesci was so good in that movie.
Lex Fridman (1:41:14.420)
He's incredible.
Charles Hoskinson (1:41:15.260)
I also love Casino and those big glasses on De Niro.
Lex Fridman (1:41:18.260)
I love it.
Charles Hoskinson (1:41:19.460)
With Sharon Stone.
Lex Fridman (1:41:20.460)
But we could talk about that for hours.
Lex Fridman (1:41:21.980)
But let me ask you about the Bitcoin conference,
Lex Fridman (1:41:23.980)
because it is kind of, I would say,
Charles Hoskinson (1:41:27.540)
an important moment in human history.
Lex Fridman (1:41:29.380)
It was quite exciting in terms of size
Lex Fridman (1:41:31.540)
and kind of turmoil and all those kinds of things.
Lex Fridman (1:41:35.180)
And you were there in, what is it?
Charles Hoskinson (1:41:37.340)
Hot and humid Miami.
Lex Fridman (1:41:39.220)
I believe that's the way you introduced it.
Lex Fridman (1:41:41.460)
So what do you make of the community of Bitcoin
Lex Fridman (1:41:46.220)
or that particular event in human history?
Lex Fridman (1:41:49.140)
What makes me sad is I remember the old Bitcoin community
Lex Fridman (1:41:51.700)
and I've seen what it's become.
Lex Fridman (1:41:53.180)
And the old community was really fun,
Lex Fridman (1:41:54.940)
like the San Jose conference in 2013
Charles Hoskinson (1:41:57.140)
or subsequent conferences.
Lex Fridman (1:41:59.340)
You know, there was just a lot of people,
Charles Hoskinson (1:42:00.980)
they had no money and they just really loved this idea
Lex Fridman (1:42:04.700)
of decentralized money.
Charles Hoskinson (1:42:05.940)
They loved this idea of decentralization in particular.
Lex Fridman (1:42:09.180)
And you could strike up a conversation with everyone.
Charles Hoskinson (1:42:11.740)
There's no ego at all.
Lex Fridman (1:42:13.420)
But what was really fun is you could really get
Charles Hoskinson (1:42:16.780)
intimate friendships and relationships,
Lex Fridman (1:42:18.860)
great conversations with people there.
Charles Hoskinson (1:42:21.740)
It's kind of like the early days of AI.
Lex Fridman (1:42:23.260)
They all met in Dartmouth and all these other places.
Charles Hoskinson (1:42:25.060)
Very intimate, there was no egos.
Lex Fridman (1:42:26.420)
Everybody was just trying to do some really cool stuff.
Charles Hoskinson (1:42:28.660)
Now, just like those early days,
Lex Fridman (1:42:30.740)
there was an overestimate of how robust
Charles Hoskinson (1:42:33.460)
the solutions would be.
Lex Fridman (1:42:34.420)
So we believed, oh yeah, 10 years,
Lex Fridman (1:42:36.660)
we're gonna rule the whole world, right?
Lex Fridman (1:42:38.620)
Didn't exactly happen.
Charles Hoskinson (1:42:39.660)
On the other hand, Bitcoin grew from nothing
Lex Fridman (1:42:42.460)
in just 11 years to I'm in Mongolia riding camels
Lex Fridman (1:42:46.580)
and the camel herder has Bitcoin in the Coby desert.
Lex Fridman (1:42:50.100)
So that's telling you that's a pretty pervasive technology
Charles Hoskinson (1:42:52.580)
if you have that level of adoption that quickly.
Lex Fridman (1:42:54.780)
When I went to Miami, it was unrecognizable.
Charles Hoskinson (1:42:57.700)
Everything was so commercial.
Lex Fridman (1:42:59.020)
Half of the vendors at the conference were like watches
Charles Hoskinson (1:43:04.340)
that cost half a million dollars
Lex Fridman (1:43:06.260)
and they were covered in diamonds.
Lex Fridman (1:43:07.900)
So when you see that kind of materialism leak its way in,
Lex Fridman (1:43:10.460)
it's first is repulsive.
Charles Hoskinson (1:43:12.100)
The other thing was there was no,
Lex Fridman (1:43:14.340)
like I remember one of the first conferences,
Charles Hoskinson (1:43:16.260)
Mo Levin's conference in January of 2014,
Lex Fridman (1:43:19.100)
the North American Bitcoin Conference ironically in Miami,
Charles Hoskinson (1:43:22.140)
there was a Bitcoin help center booth.
Lex Fridman (1:43:24.980)
Dima ran it and a few of the other Bitcoin OGs ran it.
Charles Hoskinson (1:43:27.700)
The core developers actually came over like Jeff
Lex Fridman (1:43:29.780)
and others who were there and sat at the booth
Lex Fridman (1:43:32.020)
and anybody come up, ask a question,
Lex Fridman (1:43:34.020)
anything you wanna ask about Bitcoin.
Charles Hoskinson (1:43:35.620)
It was like, that was the culture,
Lex Fridman (1:43:36.900)
just help people welcome in.
Charles Hoskinson (1:43:38.660)
There was no help booth there.
Lex Fridman (1:43:40.820)
There was no notion of that.
Charles Hoskinson (1:43:42.060)
There were six hour lines and superstars
Lex Fridman (1:43:44.660)
and things like that.
Lex Fridman (1:43:45.500)
And again, again, it was always the same thing.
Lex Fridman (1:43:47.580)
Look how much money all these people have made.
Lex Fridman (1:43:50.740)
And the whole point of Bitcoin
Lex Fridman (1:43:52.020)
was to redefine the notion of money,
Charles Hoskinson (1:43:53.980)
redefine the notion of value, these types of things.
Lex Fridman (1:43:57.220)
So it just, I'm no longer part of that.
Lex Fridman (1:43:59.660)
And it made me sad because I really enjoyed being part of it.
Lex Fridman (1:44:02.820)
How I got started was the Bitcoin education project.
Charles Hoskinson (1:44:04.900)
I did a class on Udemy.
Lex Fridman (1:44:06.020)
I gave it away for free.
Charles Hoskinson (1:44:07.100)
I had 80,000 students and they would email me.
Lex Fridman (1:44:09.940)
I got 5,000 emails before I stopped answering them.
Lex Fridman (1:44:13.020)
And everyone come in and ask me some question
Lex Fridman (1:44:15.780)
about something, sometimes arcane, sometimes trivial.
Lex Fridman (1:44:18.780)
And I take the time to sit down and answer the question
Lex Fridman (1:44:21.260)
or forward the email to somebody I knew
Charles Hoskinson (1:44:22.900)
who could answer that particular type of question.
Lex Fridman (1:44:24.940)
And there were some amazing people in the early days
Charles Hoskinson (1:44:27.140)
like Mike Hearn and Gavin and others.
Lex Fridman (1:44:29.180)
And they were just super committed.
Lex Fridman (1:44:31.540)
And Mike's case, he knew Satoshi.
Lex Fridman (1:44:33.580)
He actually emailed them back and forth
Charles Hoskinson (1:44:35.340)
because he was around 2009, 2010.
Lex Fridman (1:44:37.620)
He did the Bitcoin Java client.
Lex Fridman (1:44:39.740)
And Satoshi was all excited.
Lex Fridman (1:44:40.740)
He said, oh, wow, Bitcoin can come to a cell phone.
Charles Hoskinson (1:44:43.180)
This is really cool and exciting.
Lex Fridman (1:44:45.540)
And then what happened?
Charles Hoskinson (1:44:46.380)
Mike left Bitcoin in 2013
Lex Fridman (1:44:48.740)
over the whole big block debate that happened.
Charles Hoskinson (1:44:51.380)
They just treated him like dirt,
Lex Fridman (1:44:53.100)
like he was subhuman or something.
Lex Fridman (1:44:54.940)
So I don't know, the culture has changed a lot.
Lex Fridman (1:44:56.780)
And if they like it, it's good for them.
Charles Hoskinson (1:44:59.900)
They can enjoy their religion, but it's not for me.
Lex Fridman (1:45:02.860)
And where I like being is, like I had a guy
Charles Hoskinson (1:45:05.820)
who used to work for me, Alex Cherpanoi,
Lex Fridman (1:45:08.260)
and he created this beautiful project called Ergo.
Charles Hoskinson (1:45:10.380)
To me, that is the spiritual successor to Bitcoin.
Lex Fridman (1:45:13.500)
Ergo is really special because it has the same culture.
Charles Hoskinson (1:45:15.940)
It has the same mentality.
Lex Fridman (1:45:17.380)
And the technology is kind of like a natural evolution
Charles Hoskinson (1:45:20.380)
of what you would do if you knew about Bitcoin
Lex Fridman (1:45:22.780)
and you wanted to build the next big thing.
Lex Fridman (1:45:24.740)
So it's still a proof of work system.
Lex Fridman (1:45:26.380)
It's still a UTXO system,
Lex Fridman (1:45:28.060)
but he added UTXO with some smart contracts.
Lex Fridman (1:45:30.460)
It's this Sigma protocol idea.
Charles Hoskinson (1:45:32.500)
On the proof of work side,
Lex Fridman (1:45:33.780)
Satoshi had this one CPU, one vote idea.
Lex Fridman (1:45:36.260)
So Alex tried to create non outsourceable puzzles
Lex Fridman (1:45:38.580)
to make it impossible to have mining pools.
Lex Fridman (1:45:40.860)
And there's all these other beautiful little things.
Lex Fridman (1:45:42.380)
And he's this brilliant Russian programmer,
Lex Fridman (1:45:45.300)
and he surrounded himself
Lex Fridman (1:45:46.260)
with all these other brilliant people.
Charles Hoskinson (1:45:47.660)
He has zero ego.
Lex Fridman (1:45:48.860)
He has negative ego.
Charles Hoskinson (1:45:50.300)
When you put him with a person with ego,
Lex Fridman (1:45:51.700)
your ego goes down, right?
Lex Fridman (1:45:53.900)
And everything about Alex is always like,
Lex Fridman (1:45:56.220)
how do I solve this?
Lex Fridman (1:45:57.100)
How do I do that?
Lex Fridman (1:45:57.980)
And he gets legitimately excited when he meets somebody
Charles Hoskinson (1:46:00.840)
that he can collaborate with or learn from.
Lex Fridman (1:46:04.060)
That's where Bitcoin was in the beginning.
Charles Hoskinson (1:46:06.580)
Everybody set their egos aside,
Lex Fridman (1:46:08.520)
whether it was Hal Finney or whatever,
Lex Fridman (1:46:10.240)
and they would just say, how can I help?
Lex Fridman (1:46:11.860)
What can I do?
Lex Fridman (1:46:12.700)
And it was all about coming up with some cool new thing
Lex Fridman (1:46:14.940)
or solving some cool new problem.
Charles Hoskinson (1:46:17.260)
I don't see any of that in Bitcoin today.
Lex Fridman (1:46:19.140)
So quite a few people are excited about Ergo
Lex Fridman (1:46:20.940)
and excited about the fact
Lex Fridman (1:46:21.900)
that you kind of appreciate Alex and Ergo.
Lex Fridman (1:46:25.080)
Do you see Cardano potentially utilizing
Lex Fridman (1:46:28.140)
the proof of work mechanism from Ergo
Lex Fridman (1:46:30.220)
as part of this pool for the consensus mechanism?
Lex Fridman (1:46:35.260)
I mean, anything's possible,
Lex Fridman (1:46:36.420)
and there's a lot of evolution Ergo has to go through.
Lex Fridman (1:46:39.220)
And Ergo, it was kind of like,
Charles Hoskinson (1:46:41.300)
when the Xbox 360 first came out,
Lex Fridman (1:46:43.620)
while they were prototyping it,
Charles Hoskinson (1:46:44.980)
Microsoft needed a development environment.
Lex Fridman (1:46:46.900)
They ironically purchased a lot of Apple computers
Charles Hoskinson (1:46:49.760)
to do that,
Lex Fridman (1:46:50.600)
because Apple was moving away from the PowerPC to Intel,
Lex Fridman (1:46:52.740)
and Microsoft was moving towards the PowerPC,
Lex Fridman (1:46:54.900)
just this weird intersection of history.
Lex Fridman (1:46:56.620)
So at that time,
Lex Fridman (1:46:57.460)
the largest order of Mac computers made
Charles Hoskinson (1:46:59.400)
was done by Microsoft,
Lex Fridman (1:47:01.020)
and they were using it for Xbox stuff.
Lex Fridman (1:47:02.660)
So Ergo, we viewed the same way.
Lex Fridman (1:47:04.260)
So we said, well, we have this extended UTXO model.
Charles Hoskinson (1:47:06.780)
The only thing that's sufficiently close to it
Lex Fridman (1:47:09.500)
where we can beta test contracts is actually with Ergo.
Lex Fridman (1:47:12.900)
And Alex just was a little faster
Lex Fridman (1:47:15.220)
in getting certain things out,
Charles Hoskinson (1:47:16.340)
because we were doing things
Lex Fridman (1:47:17.380)
in a slightly more rigorous way
Lex Fridman (1:47:18.780)
and slightly more expressive way.
Lex Fridman (1:47:20.520)
So we actually tested a stable coin and Oracle
Lex Fridman (1:47:22.740)
and other things on Ergo,
Lex Fridman (1:47:24.020)
and it has just incredible community.
Charles Hoskinson (1:47:26.740)
When we said, hey, we're coming here to work and build,
Lex Fridman (1:47:29.060)
he said, oh yeah, we'd love to work with you guys.
Charles Hoskinson (1:47:30.780)
This is so cool.
Lex Fridman (1:47:32.300)
The other thing is Alex used to work for us,
Lex Fridman (1:47:33.980)
and he had this lovely project called Scorex,
Lex Fridman (1:47:36.300)
and it was all about like a pedagogical framework
Charles Hoskinson (1:47:39.100)
for building blockchains.
Lex Fridman (1:47:40.540)
And if you want to do prototyping or academic research,
Charles Hoskinson (1:47:42.740)
it was great.
Lex Fridman (1:47:43.580)
It was super modular,
Lex Fridman (1:47:44.540)
and it separated the consensus network
Lex Fridman (1:47:46.260)
and transaction layer from each other
Charles Hoskinson (1:47:48.380)
in just the right way,
Lex Fridman (1:47:49.700)
so that you can make it modular and mix and match things.
Lex Fridman (1:47:52.180)
So you can put secure academia in,
Lex Fridman (1:47:53.500)
or maybe a different network layer
Lex Fridman (1:47:54.900)
and a different consensus protocol,
Lex Fridman (1:47:56.780)
a proof of work to another proof of work and so forth.
Lex Fridman (1:47:59.340)
So we loved having that kind of IP sitting around
Lex Fridman (1:48:02.500)
because it gave us the ability
Charles Hoskinson (1:48:03.820)
to kind of play around with ideas in a matter of weeks
Lex Fridman (1:48:06.340)
instead of months or years.
Lex Fridman (1:48:07.540)
And then he just took that concept and he gave it away.
Lex Fridman (1:48:10.500)
The wave protocol was built on it.
Charles Hoskinson (1:48:12.700)
That was Sasha Ivanov, he did that.
Lex Fridman (1:48:15.140)
And I think there's two or three other cryptocurrencies
Charles Hoskinson (1:48:17.380)
that were launched from Scorex,
Lex Fridman (1:48:18.420)
and then Alex took that and built Ergo from it.
Lex Fridman (1:48:22.040)
So there was a nice intersection
Lex Fridman (1:48:23.620)
where there was overlapping technology
Charles Hoskinson (1:48:25.500)
with Ergo with our technology.
Lex Fridman (1:48:27.620)
And the other thing was that the community
Charles Hoskinson (1:48:29.020)
was so open and friendly, it was just a no brainer.
Lex Fridman (1:48:31.380)
Just go in and start building some things there.
Charles Hoskinson (1:48:33.840)
Now, in terms of evolving ideas,
Lex Fridman (1:48:35.700)
the whole Sigma protocol idea is very different
Lex Fridman (1:48:38.020)
and it's very interesting.
Lex Fridman (1:48:39.100)
And there's a guy at Boston University,
Charles Hoskinson (1:48:42.100)
his name will come to me in a second,
Lex Fridman (1:48:43.740)
who came up with this stuff.
Lex Fridman (1:48:46.100)
And I think there's some merit there,
Lex Fridman (1:48:48.100)
especially as we start moving closer to this idea
Charles Hoskinson (1:48:51.260)
of blockchains being used to validate proofs
Lex Fridman (1:48:53.500)
instead of running computations.
Lex Fridman (1:48:54.700)
What's the Sigma protocol, by the way?
Lex Fridman (1:48:56.180)
So it's just a way of expressing scripts.
Lex Fridman (1:48:58.840)
And basically, you get these concise representations
Lex Fridman (1:49:03.220)
of proofs, and then you can say,
Charles Hoskinson (1:49:05.020)
okay, the script is correct,
Lex Fridman (1:49:06.100)
but you don't have to run the whole program.
Lex Fridman (1:49:07.820)
So there's a lot, I'm not doing the topic justice,
Lex Fridman (1:49:10.180)
there's a lot more to it, but that's the basic concept.
Lex Fridman (1:49:12.900)
And in a Redeemer validator model,
Lex Fridman (1:49:14.900)
you need stuff like that,
Charles Hoskinson (1:49:15.980)
because as your model gets more complex
Lex Fridman (1:49:19.000)
and a lot more things happen,
Charles Hoskinson (1:49:20.940)
you don't want to have a situation
Lex Fridman (1:49:22.740)
where I have to run, replay a huge amount of the UTXO graph
Charles Hoskinson (1:49:27.260)
to be able to get to a point
Lex Fridman (1:49:28.540)
where I have the state of the system.
Charles Hoskinson (1:49:30.020)
You need some mathematical artifact
Lex Fridman (1:49:32.100)
that gives you the state of the system quickly.
Lex Fridman (1:49:34.180)
And then you're saying, okay, I now know
Lex Fridman (1:49:35.980)
what computation thread I need to run
Charles Hoskinson (1:49:37.780)
to be able to get enough
Lex Fridman (1:49:39.020)
to be able to redeem this transaction.
Lex Fridman (1:49:41.400)
So he just found a more compressed representation of it,
Lex Fridman (1:49:43.620)
and the math doesn't matter.
Lex Fridman (1:49:45.460)
What matters is there's a whole beautiful field
Lex Fridman (1:49:49.060)
that thinks about this type of stuff,
Lex Fridman (1:49:51.180)
and it was never once linked before into our industry.
Lex Fridman (1:49:55.140)
The brilliance of Alex was to actually realize
Charles Hoskinson (1:49:57.140)
you could do that and pull those things together,
Lex Fridman (1:49:59.620)
and it may actually have some merit,
Lex Fridman (1:50:01.340)
but by no means is he the only guy that does this stuff.
Lex Fridman (1:50:03.820)
There's actually other approaches in verified computing
Charles Hoskinson (1:50:07.740)
that have explored that.
Lex Fridman (1:50:08.920)
Like my favorite came out of Microsoft research
Charles Hoskinson (1:50:10.860)
is a project called Pinocchio,
Lex Fridman (1:50:12.260)
and there was a followup called Geppetto.
Lex Fridman (1:50:13.860)
And the basic idea was that it's fortuitous
Lex Fridman (1:50:17.460)
that you have these computer science problems
Charles Hoskinson (1:50:19.820)
like hashing where you can do all this computation,
Lex Fridman (1:50:26.120)
and once you've done all of it,
Lex Fridman (1:50:27.340)
and you've found this magic number
Lex Fridman (1:50:28.500)
that you can verify that the computation was done correctly.
Lex Fridman (1:50:31.660)
So the proof of work works this way.
Lex Fridman (1:50:33.220)
Hard to do the proof of work,
Charles Hoskinson (1:50:34.520)
easy to check the proof of work.
Lex Fridman (1:50:37.100)
Cryptography also works this way.
Charles Hoskinson (1:50:38.620)
You have some trap door
Lex Fridman (1:50:39.700)
where you can verify something's correct,
Lex Fridman (1:50:41.200)
but to get that thing done,
Lex Fridman (1:50:43.500)
if you're doing it brute force,
Charles Hoskinson (1:50:44.780)
it takes an enormous amount of computation.
Lex Fridman (1:50:46.740)
Well, not all problems are like this,
Charles Hoskinson (1:50:48.340)
like protein folding, to verify the protein
Lex Fridman (1:50:50.540)
is folded correctly, you have to fold the protein.
Lex Fridman (1:50:52.340)
So you have to redo the work.
Lex Fridman (1:50:53.880)
But what if for arbitrary computation,
Charles Hoskinson (1:50:56.640)
you could take a problem,
Lex Fridman (1:50:58.220)
and then you could generate a proof
Charles Hoskinson (1:50:59.740)
that you've done that computation correctly,
Lex Fridman (1:51:01.940)
and the proof validates in logarithmic time
Charles Hoskinson (1:51:04.180)
or constant time.
Lex Fridman (1:51:05.200)
Wow, that's incredible, right?
Charles Hoskinson (1:51:06.980)
Well, Microsoft actually wrote a paper on how to do that.
Lex Fridman (1:51:09.260)
It's called Pinocchio.
Lex Fridman (1:51:10.360)
So that's another example of these types of things,
Lex Fridman (1:51:12.260)
these rollups of things
Charles Hoskinson (1:51:13.460)
where instead of doing the computation on chain
Lex Fridman (1:51:15.980)
or trying to create some sort of replicated machine
Charles Hoskinson (1:51:17.980)
that does all this stuff,
Lex Fridman (1:51:19.620)
you instead just say,
Charles Hoskinson (1:51:20.460)
okay, only thing I'm gonna use the blockchain for
Lex Fridman (1:51:22.440)
is to check your proof.
Lex Fridman (1:51:24.160)
But I'm gonna turn it into a distributed computing problem,
Lex Fridman (1:51:26.100)
and any person in the world can do the problem
Charles Hoskinson (1:51:28.820)
on any server, untrusted server even,
Lex Fridman (1:51:31.360)
because you don't have to trust the output,
Charles Hoskinson (1:51:33.400)
you trust the proof, and the proof is deterministic.
Lex Fridman (1:51:36.380)
It tells you these things.
Lex Fridman (1:51:37.640)
So whether you're using zero knowledge
Lex Fridman (1:51:39.680)
or Sigma protocols or some other mechanism,
Charles Hoskinson (1:51:41.940)
it's moving you in that particular direction
Lex Fridman (1:51:44.220)
to turn it from a replicated to a distributed problem
Lex Fridman (1:51:47.220)
and go from I'm doing the work to I'm checking
Lex Fridman (1:51:49.260)
that the work was done correctly.
Charles Hoskinson (1:51:50.100)
That's fascinating.
Lex Fridman (1:51:50.940)
And all of a sudden, we're back to the P equals NP thing
Charles Hoskinson (1:51:54.780)
where for many very interesting problems,
Lex Fridman (1:51:57.260)
the checking is efficient,
Charles Hoskinson (1:51:59.780)
is much more efficient than the solving.
Lex Fridman (1:52:01.660)
Right, and also do you want complete determinism
Lex Fridman (1:52:04.020)
or is it probabilistic?
Lex Fridman (1:52:05.780)
Because if you relax that requirement a little bit,
Charles Hoskinson (1:52:07.700)
then suddenly actually you have a broader class of things
Lex Fridman (1:52:10.440)
you can construct this stuff for.
Charles Hoskinson (1:52:12.300)
You mentioned UTXO.
Lex Fridman (1:52:14.140)
There's a paper titled the Extended UTXO Model.
Charles Hoskinson (1:52:18.120)
It writes in the introduction,
Lex Fridman (1:52:20.380)
Bitcoin and Ethereum hosting the two currently most valuable
Lex Fridman (1:52:23.660)
and popular cryptocurrencies
Lex Fridman (1:52:25.280)
use two rather different ledger models
Charles Hoskinson (1:52:28.020)
known as the UTXO model and the account model respectively.
Lex Fridman (1:52:33.140)
At the same time, these two public blockchains
Charles Hoskinson (1:52:35.740)
differ strongly in the expressiveness
Lex Fridman (1:52:37.620)
of the smart contracts that they support.
Charles Hoskinson (1:52:41.120)
This is no coincidence.
Lex Fridman (1:52:42.340)
Ethereum chose the account model
Charles Hoskinson (1:52:44.420)
explicitly to facilitate more expressive smart contracts.
Lex Fridman (1:52:47.640)
On the other hand, Bitcoin chose UTXO also for good reasons,
Charles Hoskinson (1:52:51.100)
including that its semantic model stays simple
Lex Fridman (1:52:54.340)
in a complex concurrent
Lex Fridman (1:52:55.460)
and distributed computing environment.
Lex Fridman (1:52:57.240)
This raises the question of whether it is possible
Charles Hoskinson (1:52:59.820)
to have expressive smart contracts
Lex Fridman (1:53:01.500)
while keeping the semantic simplicity of the UTXO model.
Charles Hoskinson (1:53:06.220)
Okay.
Lex Fridman (1:53:07.060)
So what's the fuck that mean?
Charles Hoskinson (1:53:08.580)
Exactly.
Lex Fridman (1:53:09.860)
What is UTXO, what is the account model,
Lex Fridman (1:53:13.140)
and what is the idea of the Extended UTXO model?
Lex Fridman (1:53:17.700)
So I guess the easiest way of visualizing it
Charles Hoskinson (1:53:19.540)
is that UTXO is kind of like cash register accounting.
Lex Fridman (1:53:22.740)
So let's assume you don't have credit cards,
Charles Hoskinson (1:53:24.980)
you just have cash.
Lex Fridman (1:53:25.980)
And so when you go and buy some milk and potatoes
Charles Hoskinson (1:53:28.580)
or whatever and you go to the cashier,
Lex Fridman (1:53:30.340)
you pull out your $20 bill, you give it to them,
Charles Hoskinson (1:53:33.260)
unless it comes up to 17.50, they have to make change.
Lex Fridman (1:53:36.500)
So you don't tear your $20 bill,
Charles Hoskinson (1:53:39.620)
cut a piece of it off and say, here's part of my 20.
Lex Fridman (1:53:42.260)
You give them the entire $20 bill
Lex Fridman (1:53:44.820)
and then they give you something back.
Lex Fridman (1:53:46.700)
And the things that they give you back
Charles Hoskinson (1:53:48.020)
are also atomic units, they don't cut those things up.
Lex Fridman (1:53:50.980)
So that's kind of what UTXO is all about in a nutshell
Charles Hoskinson (1:53:53.940)
is that there's inputs and outputs,
Lex Fridman (1:53:55.420)
your inputs that 20 and your outputs will be
Charles Hoskinson (1:53:57.980)
the 17.50 that goes to them
Lex Fridman (1:53:59.940)
and then the remaining change that goes back to you, okay?
Charles Hoskinson (1:54:03.740)
The problem with this particular model
Lex Fridman (1:54:05.500)
is that the way it was implemented with Bitcoin,
Charles Hoskinson (1:54:08.180)
there was no notion of how do we run complex predicates,
Lex Fridman (1:54:12.900)
complex contracts on this thing,
Charles Hoskinson (1:54:15.540)
where instead of just saying, okay,
Lex Fridman (1:54:17.460)
I'm just gonna push value to you,
Charles Hoskinson (1:54:19.180)
I wanna put lots of terms and conditions
Lex Fridman (1:54:21.260)
into the movement of that value.
Charles Hoskinson (1:54:22.860)
Like you only get this if I mow your lawn on Tuesday
Lex Fridman (1:54:26.020)
or you only get this if some event happens
Charles Hoskinson (1:54:29.620)
like the Broncos win the Super Bowl or something like that.
Lex Fridman (1:54:32.540)
Okay, so you need some notion of programmability with it.
Lex Fridman (1:54:35.460)
So a lot of people are trying to figure out
Lex Fridman (1:54:37.460)
in the early days of Bitcoin,
Lex Fridman (1:54:38.900)
how could we improve the expressiveness of the system?
Lex Fridman (1:54:41.820)
And one of ways of doing it is you can go
Charles Hoskinson (1:54:44.100)
to a different accounting model, bank style accounting.
Lex Fridman (1:54:48.260)
So in a bank ledger, every time you do a withdrawal,
Charles Hoskinson (1:54:51.260)
a deposit, it's a mutable system.
Lex Fridman (1:54:54.300)
With the cash register accounting,
Charles Hoskinson (1:54:55.900)
you don't tear up the bills,
Lex Fridman (1:54:57.100)
but the bank you can deduct or add ledger all the time.
Lex Fridman (1:55:00.260)
So Ethereum kind of works in that bank accounting system
Lex Fridman (1:55:02.780)
where you just, you send messages, you send transactions
Lex Fridman (1:55:05.780)
and you're going up or down.
Lex Fridman (1:55:07.180)
And so you can trigger programs the same way.
Lex Fridman (1:55:10.260)
So what we did is we said, okay,
Lex Fridman (1:55:12.220)
if you take the UTXO model and you have some data to it,
Lex Fridman (1:55:15.620)
and instead of saying it's just a digital signature,
Lex Fridman (1:55:17.940)
but it's in a script, you can basically create something
Charles Hoskinson (1:55:22.300)
that's still the same as cash register,
Lex Fridman (1:55:24.620)
but now you have programmability
Lex Fridman (1:55:26.020)
and the big difference is local versus global.
Lex Fridman (1:55:28.900)
So in the case of UTXO, your scripts are your concerns.
Lex Fridman (1:55:32.620)
So whatever's going on in that cash register
Lex Fridman (1:55:34.820)
has no bearing or impact on the other cash registers.
Lex Fridman (1:55:37.900)
But when you look at bank accounting,
Lex Fridman (1:55:39.540)
you have to know the state of the entire banking world
Charles Hoskinson (1:55:42.020)
to be able to make that work.
Lex Fridman (1:55:43.180)
Why?
Charles Hoskinson (1:55:44.020)
Because if that transaction is inbound,
Lex Fridman (1:55:45.460)
that wire transfer is inbound,
Charles Hoskinson (1:55:46.700)
you have to know those funds are actually there,
Lex Fridman (1:55:48.220)
that thing is actually happening.
Lex Fridman (1:55:50.060)
So when you have a global state for a program,
Lex Fridman (1:55:52.340)
it's like you could do a lot more with it,
Lex Fridman (1:55:54.220)
but it's a lot more dangerous.
Lex Fridman (1:55:55.380)
And so you have to build all these mechanisms
Charles Hoskinson (1:55:57.100)
to try to protect yourself from it.
Lex Fridman (1:55:58.780)
So what we did is we said, okay, add data,
Charles Hoskinson (1:56:01.020)
add a programmability,
Lex Fridman (1:56:02.100)
and you're kind of in this nice Goldilocks zone
Charles Hoskinson (1:56:03.900)
between what Ethereum did with an account style model
Lex Fridman (1:56:06.540)
and a global state system.
Lex Fridman (1:56:08.420)
And you're not as restrictive as Bitcoin,
Lex Fridman (1:56:10.580)
but you're still in a Turing complete world,
Charles Hoskinson (1:56:12.180)
you can still run all kinds of things.
Lex Fridman (1:56:14.100)
And then any standard mathematician, they'll say,
Lex Fridman (1:56:16.900)
okay, well, is it isomorphic?
Lex Fridman (1:56:19.940)
Is there a mapping between this?
Lex Fridman (1:56:21.140)
What type of function can I actually take something
Lex Fridman (1:56:23.780)
expressed in one structure
Lex Fridman (1:56:25.700)
and transmit it to the other structure
Lex Fridman (1:56:27.540)
and properties are preserved?
Lex Fridman (1:56:28.860)
So we wrote a paper, it's called Climatic Ledgers,
Lex Fridman (1:56:30.820)
where we actually showed that UTXO,
Charles Hoskinson (1:56:32.700)
Extended UTXO and accounts are somewhat similar
Lex Fridman (1:56:36.420)
in that you could map things that happen in one system
Charles Hoskinson (1:56:39.460)
to the other system,
Lex Fridman (1:56:40.420)
the properties are preserved between the two.
Lex Fridman (1:56:42.540)
So in practice, what's nice about Extended UTXO
Lex Fridman (1:56:45.780)
is that you can put infrastructure on top of it
Charles Hoskinson (1:56:48.740)
to make the development experience relatively similar
Lex Fridman (1:56:51.420)
to the development experience
Charles Hoskinson (1:56:52.580)
of what you would do with Ethereum,
Lex Fridman (1:56:55.020)
but you don't have to worry about this global state.
Lex Fridman (1:56:58.300)
So when you talk about sharding,
Lex Fridman (1:56:59.940)
it's a lot easier to do that.
Charles Hoskinson (1:57:01.340)
It's a lot more conceivable to that.
Lex Fridman (1:57:02.740)
And also you get determinism in the system.
Lex Fridman (1:57:05.260)
So when I have a Plutus smart contract,
Lex Fridman (1:57:07.020)
whatever I run locally is exactly what I expect to run
Charles Hoskinson (1:57:10.020)
in the system.
Lex Fridman (1:57:11.300)
When you have a concept of this mutable global state
Charles Hoskinson (1:57:13.700)
in the system, whatever you run locally
Lex Fridman (1:57:15.260)
is not necessarily what you're gonna get
Charles Hoskinson (1:57:16.740)
when you actually push it into the system.
Lex Fridman (1:57:18.780)
So you may misprice things and the contract will fail.
Charles Hoskinson (1:57:21.740)
It doesn't ever happen in the Plutus world.
Lex Fridman (1:57:23.980)
So you got a lot of advantages with this particular model.
Charles Hoskinson (1:57:26.340)
The downside is that it's a little bit less expressive
Lex Fridman (1:57:29.820)
on the boundaries and a little bit harder
Charles Hoskinson (1:57:31.980)
to write certain types of software with it.
Lex Fridman (1:57:34.860)
But again, how you resolve that is you kind of build
Charles Hoskinson (1:57:38.580)
higher level languages and other such things
Lex Fridman (1:57:40.700)
that compensate for these types of things
Lex Fridman (1:57:42.580)
and design patterns that compensate
Lex Fridman (1:57:44.180)
for these types of things.
Charles Hoskinson (1:57:45.380)
The other advantage that we have that's really fun
Lex Fridman (1:57:47.500)
and exciting is that Bitcoin lives in this model
Lex Fridman (1:57:50.300)
and there are other UTXO based systems.
Lex Fridman (1:57:52.740)
And so they're all talking about smart contracts as well.
Lex Fridman (1:57:55.380)
And they would like to continue working in the UTXO model.
Lex Fridman (1:57:58.620)
So if you're a Bitcoin contract developer or other things,
Charles Hoskinson (1:58:01.340)
there's actually already a group of people
Lex Fridman (1:58:02.820)
that understand this very well.
Lex Fridman (1:58:04.140)
And that's still a fairly large part
Lex Fridman (1:58:06.420)
of the mindshare of the entire space.
Lex Fridman (1:58:08.380)
So there are no silver bullets.
Lex Fridman (1:58:09.780)
And anytime you pick a particular model,
Charles Hoskinson (1:58:11.580)
there's an upside and a downside.
Lex Fridman (1:58:13.060)
And there's different ways of doing things
Charles Hoskinson (1:58:14.380)
from cash register accounting or bank accounting.
Lex Fridman (1:58:16.260)
You can even do different accounting models.
Lex Fridman (1:58:18.260)
But we felt this was kind of the best first step
Lex Fridman (1:58:21.620)
to go into because we started with something very familiar
Charles Hoskinson (1:58:24.700)
that had a long history behind it.
Lex Fridman (1:58:27.340)
And it maps very beautifully
Charles Hoskinson (1:58:29.180)
to functional programming principles.
Lex Fridman (1:58:30.900)
This concept of immutability and these things
Lex Fridman (1:58:33.140)
and much more strict management of state
Lex Fridman (1:58:36.180)
and no notion of having this global concept
Charles Hoskinson (1:58:39.580)
that you have to kind of manage as you break up the system.
Lex Fridman (1:58:43.900)
Now in practice, what does this mean to the developer
Lex Fridman (1:58:46.860)
when they actually start real writing an application?
Lex Fridman (1:58:50.340)
Not too much.
Charles Hoskinson (1:58:51.700)
There's gonna be a little bit of retooling
Lex Fridman (1:58:53.220)
and some new patterns you have to learn.
Lex Fridman (1:58:54.740)
But in practice, you can still do the same things.
Lex Fridman (1:58:56.540)
You can implement a Uniswap style thing.
Charles Hoskinson (1:58:59.380)
In fact, we even wrote that code
Lex Fridman (1:59:00.660)
with the Plutus Pioneers program.
Lex Fridman (1:59:01.900)
So you can go to YouTube and watch a lecture
Lex Fridman (1:59:03.860)
and see how that's done.
Charles Hoskinson (1:59:05.300)
You can do a stable coin.
Lex Fridman (1:59:06.780)
You can do an Oracle.
Charles Hoskinson (1:59:07.940)
You can do interactive contracts.
Lex Fridman (1:59:10.060)
It's just, it has to be done a little differently
Charles Hoskinson (1:59:12.140)
than the way that you would do it in an account style model.
Lex Fridman (1:59:14.300)
Just like you could run an application in Java,
Charles Hoskinson (1:59:16.660)
you can run an application in Haskell.
Lex Fridman (1:59:18.660)
They both can do the same thing,
Lex Fridman (1:59:20.020)
but the code is gonna look different.
Lex Fridman (1:59:21.380)
And the canonical way of looking at things is different.
Lex Fridman (1:59:25.180)
So in terms of Oracle, Oracle networks,
Lex Fridman (1:59:27.620)
what are your thoughts about chain link
Lex Fridman (1:59:29.100)
and external off chain data sources?
Lex Fridman (1:59:32.220)
And everything we've been talking about now
Charles Hoskinson (1:59:34.620)
with the external, with the extended UTXO model.
Lex Fridman (1:59:37.980)
Yeah, I mean, trying to do smart contracts without Oracle
Charles Hoskinson (1:59:41.780)
is like trying to have sex with your pants on.
Lex Fridman (1:59:43.620)
I mean, it's not really fun.
Charles Hoskinson (1:59:45.620)
It's not exactly the best of things.
Lex Fridman (1:59:47.620)
That's the way I've been doing it all these years.
Charles Hoskinson (1:59:49.140)
I didn't know.
Lex Fridman (1:59:49.980)
For any other person, Lex,
Charles Hoskinson (1:59:51.340)
I wouldn't believe you, but for you.
Lex Fridman (1:59:53.100)
That's why I'm single.
Charles Hoskinson (1:59:55.620)
This makes so much sense now.
Lex Fridman (1:59:57.100)
Okay, so anyway, you need the outside world
Lex Fridman (20:01.720)
to simplify this system as much as possible?
Lex Fridman (20:04.400)
So instead of the applications of formal methods
Charles Hoskinson (20:06.400)
slowing you down, in many cases,
Lex Fridman (20:08.040)
it actually massively reduces your debugging time
Lex Fridman (20:11.160)
and your ability to find where errors occur.
Lex Fridman (20:13.200)
In some cases, you can't find where errors occur
Charles Hoskinson (20:15.440)
inside these massive concurrent systems.
Lex Fridman (20:17.360)
And you say, well, where are cryptocurrencies going?
Charles Hoskinson (20:19.320)
We're talking about just the same thing.
Lex Fridman (20:21.460)
But we're talking about
Charles Hoskinson (20:22.300)
a much more hostile operating environment,
Lex Fridman (20:24.920)
where instead of it running in a pristine data center
Charles Hoskinson (20:27.400)
in California somewhere,
Lex Fridman (20:28.780)
it's running on your cell phone,
Charles Hoskinson (20:30.280)
it's running on your mom's phone,
Lex Fridman (20:31.480)
it's running your dad's phone,
Charles Hoskinson (20:32.500)
it's running on some computer in Mongolia
Lex Fridman (20:35.340)
that may have good internet on Tuesday,
Lex Fridman (20:37.640)
but not any other day.
Lex Fridman (20:39.180)
So when you live in that kind of environment,
Charles Hoskinson (20:40.800)
you really do need to think carefully
Lex Fridman (20:42.720)
about a whole new class of protocols.
Lex Fridman (20:44.760)
And then you need to think carefully
Lex Fridman (20:46.120)
about a whole new class of tools and techniques
Charles Hoskinson (20:48.180)
to test the reliability of those systems.
Lex Fridman (20:50.560)
And you need to separate the world and say,
Lex Fridman (20:52.960)
what is high assurance and cannot fail?
Lex Fridman (20:55.160)
Because if it fails, people lose money.
Lex Fridman (20:57.400)
And what is low assurance?
Lex Fridman (20:58.700)
And it's okay if that falls apart.
Charles Hoskinson (21:01.260)
The other thing I'll mention
Lex Fridman (21:02.100)
is there are perverse financial incentives in our industry.
Charles Hoskinson (21:05.360)
Because the reality is when something blows up,
Lex Fridman (21:07.760)
the people who built those things that blow up
Charles Hoskinson (21:09.580)
usually get paid upfront.
Lex Fridman (21:11.280)
So what they're focusing on is time to market,
Charles Hoskinson (21:13.760)
speed to market, and getting tokens out
Lex Fridman (21:16.160)
and getting them liquid.
Lex Fridman (21:18.200)
And then people come in, they buy it,
Lex Fridman (21:20.080)
but if there's a nascent bug in some DeFi protocol,
Charles Hoskinson (21:22.640)
it'll probably be discovered six months later
Lex Fridman (21:24.480)
or something like that.
Lex Fridman (21:25.580)
It blows up, who suffers?
Lex Fridman (21:27.280)
The users.
Charles Hoskinson (21:28.120)
The people that created that already got paid.
Lex Fridman (21:30.320)
Exactly, that's why you pay the guy
Charles Hoskinson (21:31.960)
who makes the breaks software for your train last.
Lex Fridman (21:34.860)
And you make sure he rides the train every day.
Lex Fridman (21:37.160)
So you're basically describing the complexity
Lex Fridman (21:41.800)
of a distributed system that's fundamentally game theoretic.
Lex Fridman (21:45.920)
And like, if we think about turtles all the way down,
Lex Fridman (21:48.240)
it's humans all the way down.
Charles Hoskinson (21:49.360)
I mean, at the very bottom is still human nature.
Lex Fridman (21:52.800)
Is there something you can say formally about human nature
Charles Hoskinson (21:58.640)
to try, you said you can't,
Lex Fridman (22:00.000)
there's certain parts of the system that can't fail.
Charles Hoskinson (22:02.880)
Some people talk about nuclear war in that same kind of way,
Lex Fridman (22:05.800)
that there's this game theoretic construction
Charles Hoskinson (22:08.160)
of mutually assured destruction.
Lex Fridman (22:10.000)
Oh, that rhymes, see, I'm a poet.
Charles Hoskinson (22:12.160)
That system can't fail because you're gonna blow everyone up
Lex Fridman (22:15.920)
but you can't formally say for sure
Charles Hoskinson (22:18.440)
it's not going to fail.
Lex Fridman (22:20.560)
So like, you're basically trying to chase,
Charles Hoskinson (22:24.200)
like statistically reduce the probability
Lex Fridman (22:26.200)
that these particular critical aspects will fail.
Lex Fridman (22:29.480)
And then you test, I guess, by deploying in the real world
Lex Fridman (22:32.400)
at small scale to see where things go wrong.
Charles Hoskinson (22:35.040)
Yeah, it's a great question.
Lex Fridman (22:36.360)
And the problem with game theory and mechanism design
Charles Hoskinson (22:39.280)
is that you can develop this concept of a rational actor.
Lex Fridman (22:42.120)
And I don't think in my life
Charles Hoskinson (22:43.140)
I've ever met a rational actor.
Lex Fridman (22:44.880)
There's a rational actor on Tuesday,
Lex Fridman (22:46.400)
but any other day of the week, who the hell knows?
Lex Fridman (22:49.040)
And there's even, I think there was a book Freakonomics
Lex Fridman (22:50.920)
and there's a few of these things
Lex Fridman (22:51.880)
where it just shows again and again
Charles Hoskinson (22:53.400)
where people behave in ways
Lex Fridman (22:55.560)
that are against their best interest.
Lex Fridman (22:57.400)
So then you have these protocol designers and they say,
Lex Fridman (22:59.360)
well, we need an honest majority for this thing to work.
Lex Fridman (23:02.400)
And they say, okay, well, we'll create this incentive model
Lex Fridman (23:05.200)
and rational actors will behave with that incentive model.
Lex Fridman (23:08.560)
And they say, well, the individual won't do that
Lex Fridman (23:10.360)
but the firm, the government, the entity will.
Charles Hoskinson (23:13.960)
The problem with that is we have a lot of counter examples
Lex Fridman (23:16.240)
where the system was actually behaving in weird ways.
Charles Hoskinson (23:20.280)
Like we almost completely eradicated the human population
Lex Fridman (23:22.880)
twice in the 20th century,
Charles Hoskinson (23:24.720)
once during the Cuban missile crisis.
Lex Fridman (23:26.400)
And again, in the 1980s, there was a Russian Colonel
Lex Fridman (23:29.220)
and they installed a new satellite system and it said,
Lex Fridman (23:32.060)
hey, the Americans are launching missiles at us.
Charles Hoskinson (23:34.160)
You need to turn the key in,
Lex Fridman (23:35.480)
launch all the missiles in the silo.
Lex Fridman (23:36.840)
And he said, oh, that's not right.
Lex Fridman (23:38.480)
That doesn't seem right.
Lex Fridman (23:39.440)
And he was reprimanded for not launching the missiles.
Lex Fridman (23:42.560)
So in both cases, a single person stood
Charles Hoskinson (23:45.840)
against the systems of superpowers
Lex Fridman (23:48.320)
between us and nuclear annihilation.
Lex Fridman (23:50.940)
So in general, we're really bad
Lex Fridman (23:53.340)
at building these types of things.
Lex Fridman (23:55.360)
So what you look for instead is say,
Lex Fridman (23:57.080)
can the system be self correcting?
Charles Hoskinson (23:59.100)
It's not about avoiding a problem.
Lex Fridman (24:01.400)
It's more about can the problem be resolved?
Lex Fridman (24:04.400)
And that's how nature engineers things.
Lex Fridman (24:06.320)
It gives you an immune system.
Charles Hoskinson (24:07.680)
It gives you the ability to heal.
Lex Fridman (24:09.320)
If a rainforest has a fire or some catastrophic event,
Charles Hoskinson (24:13.160)
the ecosystem will find a way to patch things up.
Lex Fridman (24:16.520)
So it's a better question of how do you align
Charles Hoskinson (24:18.240)
the incentives over the longterm of a system
Lex Fridman (24:20.460)
where all the actors within the system,
Charles Hoskinson (24:22.520)
when an event occurs that disrupts it,
Lex Fridman (24:24.880)
have an incentive to push it back
Charles Hoskinson (24:26.400)
into a healthy, productive, useful state,
Lex Fridman (24:29.520)
which is going back kind of to that complexity theory stuff
Charles Hoskinson (24:32.580)
that we began with and a little bit about,
Lex Fridman (24:35.280)
how do you handle modern economics?
Charles Hoskinson (24:37.560)
Like for example, we knew this coming into the COVID crisis
Lex Fridman (24:41.160)
that there would be catastrophic economic disruption
Charles Hoskinson (24:43.960)
throughout the entire world.
Lex Fridman (24:45.060)
In the developed world, it was print lots of money
Lex Fridman (24:48.120)
and hope to God it works.
Lex Fridman (24:49.520)
In the developing world is try not to starve to death.
Charles Hoskinson (24:52.060)
Over 100 million people were pushed into acute starvation.
Lex Fridman (24:55.400)
So acute hunger, it's a terrible situation.
Lex Fridman (24:58.200)
But every economist knew we were going into that.
Lex Fridman (25:00.520)
So the question is how do you restart the system?
Lex Fridman (25:02.260)
How do you realign the system and so forth
Lex Fridman (25:04.240)
and make sure that it doesn't collapse at some point.
Lex Fridman (25:08.180)
So it's an imperfect, inexact science.
Lex Fridman (25:11.180)
And that's actually one of the things
Charles Hoskinson (25:12.280)
that makes our industry so much fun
Lex Fridman (25:14.060)
is that these are kind of like micro experiments
Charles Hoskinson (25:16.840)
for the macro.
Lex Fridman (25:18.960)
In the years past, you never got a chance to experiment
Charles Hoskinson (25:22.360)
with monetary policy.
Lex Fridman (25:23.980)
I mean, it's like every 20 years, 30 years,
Charles Hoskinson (25:25.720)
you'd have some conference,
Lex Fridman (25:26.720)
usually in a cool island like Jamaica
Lex Fridman (25:28.840)
and be like, okay, let's go talk about monetary policy
Lex Fridman (25:31.160)
and like amend the Bretton Woods Agreement.
Lex Fridman (25:33.080)
And these would be nation states, invitation only.
Lex Fridman (25:35.560)
And now you have over 8,000 cryptocurrencies
Charles Hoskinson (25:37.600)
floating around all with their own monetary policy
Lex Fridman (25:39.760)
and their rules and it's very Darwinian.
Charles Hoskinson (25:42.140)
A lot are dying, some are succeeding.
Lex Fridman (25:44.360)
Anomalies happen like Dogecoin and you say,
Lex Fridman (25:46.760)
God, is this temporary, is this permanent?
Lex Fridman (25:48.760)
Why doesn't this horrible thing die?
Lex Fridman (25:51.000)
And then other things you think
Lex Fridman (25:52.400)
would be absolutely successful
Lex Fridman (25:54.240)
and just take off and be in the top 10
Lex Fridman (25:56.360)
don't really get as much traction.
Charles Hoskinson (25:57.840)
Like Al Grant is a great example of that.
Lex Fridman (26:00.000)
I mean, Silvio, he's an incredibly bright guy.
Charles Hoskinson (26:03.080)
Every time I go to MIT, we have dinner
Lex Fridman (26:04.940)
and his work is legendary
Lex Fridman (26:07.800)
and it's just beautiful and elegant
Lex Fridman (26:09.400)
and he literally has all the people.
Charles Hoskinson (26:11.520)
He went and hired Tal Robin
Lex Fridman (26:12.880)
and she got at IBM Research and Craig Gentry,
Charles Hoskinson (26:16.120)
the guy who did homomorphic encryption
Lex Fridman (26:17.480)
under Dan Boneh is there.
Charles Hoskinson (26:18.560)
There's all these amazing people on that team
Lex Fridman (26:20.920)
and they have money in the VCs.
Lex Fridman (26:22.860)
So you'd say, okay, that's a contender.
Lex Fridman (26:25.400)
But if you look at market adoption,
Charles Hoskinson (26:27.660)
Ethereum Classic sometimes is above it
Lex Fridman (26:30.120)
and other things are above it.
Lex Fridman (26:31.040)
And then there's this weird Darwinian evolution produced
Lex Fridman (26:35.100)
Dogecoin organism that's just stomping all around.
Charles Hoskinson (26:38.760)
Evolution doesn't make sense.
Lex Fridman (26:40.000)
Exactly, but maybe it's worth the problem, not evolution,
Charles Hoskinson (26:43.520)
because the market's the market
Lex Fridman (26:44.680)
and you can scream and cry and pout
Lex Fridman (26:48.800)
and stamp your foot and say this makes no sense,
Lex Fridman (26:50.900)
but that's the way the world works.
Charles Hoskinson (26:52.840)
There's plenty of mountain climbers
Lex Fridman (26:54.540)
that didn't want gravity to apply to them
Lex Fridman (26:56.360)
and it's the same situation here.
Lex Fridman (26:58.840)
There's plenty of people in these marketplaces
Charles Hoskinson (27:00.520)
that had the best of intentions, the best team,
Lex Fridman (27:02.360)
the best technology, and for whatever reason,
Charles Hoskinson (27:04.440)
they didn't get that adoption.
Lex Fridman (27:06.760)
So the question isn't the local,
Charles Hoskinson (27:08.400)
it should be the longterm and will the system over time
Lex Fridman (27:12.680)
converge to a state that actually is useful
Lex Fridman (27:15.180)
and meaningful to society and actually solve problems
Lex Fridman (27:17.840)
for it and that's what we try to figure out
Charles Hoskinson (27:20.460)
is how do we perturb these things in a way
Lex Fridman (27:22.840)
to kind of push them in that direction.
Lex Fridman (27:24.800)
So before we go into this fascinating
Lex Fridman (27:27.800)
Darwinian evolution of cryptocurrencies,
Charles Hoskinson (27:31.240)
let me ask you sort of a basic programming question.
Lex Fridman (27:34.360)
There's a fascinating aspect to your work with Cardano
Charles Hoskinson (27:37.160)
that use Haskell to build the infrastructure,
Lex Fridman (27:41.160)
but even stepping back more, looking at this landscape,
Charles Hoskinson (27:44.860)
another place where Darwinian evolution operates,
Lex Fridman (27:48.680)
looking at this landscape of programming languages,
Charles Hoskinson (27:51.640)
you as an engineer, you as a philosopher, both,
Lex Fridman (27:55.520)
what programming languages do you think are interesting
Lex Fridman (27:58.720)
and more practically, what programming languages,
Lex Fridman (28:01.160)
if you were to advise like students today, should they learn?
Charles Hoskinson (28:05.000)
Yeah, so there's the pedagogy of learning how to program
Lex Fridman (28:08.680)
and to express the theory of computer science.
Charles Hoskinson (28:11.120)
Like you have to learn how to write algorithms,
Lex Fridman (28:12.960)
you have to learn what data structures are,
Charles Hoskinson (28:14.800)
you have to be able to do analysis of these things
Lex Fridman (28:16.960)
and that probably the, I think the debate is over Python
Charles Hoskinson (28:21.140)
is probably the best language or JavaScript
Lex Fridman (28:24.140)
to get started with because they're very useful,
Charles Hoskinson (28:26.120)
the libraries are amazing,
Lex Fridman (28:27.440)
there's just tons of online materials,
Charles Hoskinson (28:29.800)
even MIT is now teaching their introduction
Lex Fridman (28:32.200)
to computer science in Python and they used to do Lisp,
Charles Hoskinson (28:35.600)
I mean, these guys were hardcore.
Lex Fridman (28:37.320)
I still love Lisp.
Charles Hoskinson (28:38.160)
Oh man, it's great, these are your father's parentheses,
Lex Fridman (28:41.000)
they're elegant weapons from a time long ago.
Lex Fridman (28:44.760)
But that's a great starting point
Lex Fridman (28:46.680)
and it's not about falling in love with a language,
Charles Hoskinson (28:49.280)
it's just falling in love with computing,
Lex Fridman (28:50.960)
it's about falling in love with having a dialogue
Charles Hoskinson (28:53.560)
with a computer and thinking about,
Lex Fridman (28:55.240)
well, how would I solve that?
Lex Fridman (28:56.480)
How would I interact with that?
Lex Fridman (28:57.860)
What does this need to look like?
Charles Hoskinson (29:00.860)
Functional programming is what we've chosen to use
Lex Fridman (29:02.780)
for Cardano mostly because we're living in the academic
Charles Hoskinson (29:06.360)
world, we've written 105 papers and the problem is
Lex Fridman (29:08.720)
you have to translate that work into code
Lex Fridman (29:11.600)
and the gap between an imperative language
Lex Fridman (29:14.000)
like a C++ or C and these academic rigorous papers
Charles Hoskinson (29:18.280)
is extremely large and so there's gonna be
Lex Fridman (29:20.960)
a lot of semantical ambiguity between those two
Lex Fridman (29:23.520)
and what I mean by that is that you might end up
Lex Fridman (29:26.080)
implementing a wrong thing.
Charles Hoskinson (29:28.800)
You might think that what you've built is the paper
Lex Fridman (29:31.480)
but the computer's not going to tell you that
Charles Hoskinson (29:33.720)
because the paper's written in prose
Lex Fridman (29:35.220)
and maybe typed up in LaTeX or something
Lex Fridman (29:37.540)
but there's no proof chain, evidence chain
Lex Fridman (29:40.200)
that you can show that there's no ambiguity.
Charles Hoskinson (29:42.360)
When you look at a functional language,
Lex Fridman (29:43.660)
you're a little closer to math and so as a consequence,
Charles Hoskinson (29:47.240)
the translation of the papers that we spent
Lex Fridman (29:49.680)
so damn long writing and writing proofs about
Lex Fridman (29:52.160)
and so forth to code is much smaller.
Lex Fridman (29:55.440)
Now the downside is these functional languages
Charles Hoskinson (29:57.280)
tend to be a bit more academic and they tend to have
Lex Fridman (29:59.840)
not necessarily the best Windows support
Lex Fridman (2:00:01.420)
to be injected into your system, right?
Lex Fridman (2:00:03.460)
I'm trying to keep a straight face.
Charles Hoskinson (2:00:06.300)
It's great.
Lex Fridman (2:00:07.140)
You need the outside world to make your system useful.
Charles Hoskinson (2:00:09.500)
It's like all the kinds of things that you care to do
Lex Fridman (2:00:12.020)
with a smart contract usually involve human beings
Lex Fridman (2:00:14.740)
and information streams aggregating and doing something.
Lex Fridman (2:00:17.380)
So the Oracle is a super important component in practice
Charles Hoskinson (2:00:20.940)
for any smart contract involving any notion of value.
Lex Fridman (2:00:24.100)
You need to know when things have happened,
Lex Fridman (2:00:25.460)
how they happen, who won, who lost, et cetera, et cetera.
Lex Fridman (2:00:28.900)
So first, where do you get the data from?
Lex Fridman (2:00:31.260)
So what's the aggregator?
Lex Fridman (2:00:32.860)
This is why we love our relationship with Wolfram
Charles Hoskinson (2:00:34.860)
because one of the things you'll know about Wolfram
Lex Fridman (2:00:36.900)
as you get to know the guy is he's a data pack rat.
Charles Hoskinson (2:00:39.300)
Every email, every communication, every interaction,
Lex Fridman (2:00:41.620)
he's archived somewhere.
Charles Hoskinson (2:00:43.180)
Like last time I talked to him,
Lex Fridman (2:00:44.420)
oh, yeah, I have emails from you from 2012.
Lex Fridman (2:00:46.420)
It's like, you still have those?
Lex Fridman (2:00:48.060)
Yeah, every keystroke is written down
Lex Fridman (2:00:50.220)
and stored somewhere.
Lex Fridman (2:00:51.340)
So if you use Wolfram Alpha,
Charles Hoskinson (2:00:52.740)
it's a simulacrum of the way his mind thinks.
Lex Fridman (2:00:55.140)
And so you can query the system and be like,
Charles Hoskinson (2:00:57.460)
oh, how many shipwrecks have happened in Florida
Lex Fridman (2:00:59.980)
between 1950 and 2000 that have resulted
Charles Hoskinson (2:01:02.580)
more than a billion dollars of cargo loss
Lex Fridman (2:01:04.700)
and at least one fatality?
Lex Fridman (2:01:06.620)
And it'll return an answer.
Lex Fridman (2:01:08.180)
I mean, it's an incredible source of data that's computable.
Charles Hoskinson (2:01:11.300)
For people who don't know, Wolfram Alpha
Lex Fridman (2:01:13.380)
is more than just the thing that assists you
Charles Hoskinson (2:01:15.380)
with your math homework in high school.
Lex Fridman (2:01:18.180)
It's actually this giant network of data
Charles Hoskinson (2:01:20.340)
of like weather data, of location data,
Lex Fridman (2:01:23.380)
just statistic, all kinds of,
Charles Hoskinson (2:01:25.140)
it's doing the aggregation in a way
Lex Fridman (2:01:26.780)
that you can query across data sets.
Lex Fridman (2:01:30.660)
And it's exactly this kind of idea.
Lex Fridman (2:01:34.340)
It basically represents the very kind of thing
Charles Hoskinson (2:01:36.700)
you would hope to be able to query off chain
Lex Fridman (2:01:39.980)
as part of the smart contracts.
Charles Hoskinson (2:01:41.740)
Right, but the only downside is it's centralized.
Lex Fridman (2:01:44.980)
And that's always the Achilles heel of Wolfram
Charles Hoskinson (2:01:47.060)
is he tends to like proprietary things
Lex Fridman (2:01:49.100)
and he tends to like centralizing things
Lex Fridman (2:01:50.620)
and mostly because he likes running the things.
Lex Fridman (2:01:53.100)
And everybody can have an opinion on that.
Charles Hoskinson (2:01:56.260)
The thing though is that after you've done aggregation,
Lex Fridman (2:01:59.660)
there's a question of injection.
Lex Fridman (2:02:00.940)
How do you get that data into the system?
Lex Fridman (2:02:04.100)
And you can do that in a very naive way
Charles Hoskinson (2:02:05.940)
where you can say, oh, I'm just gonna attach a public key
Lex Fridman (2:02:07.660)
to it and it'll sign for that data feed, that injection.
Lex Fridman (2:02:10.420)
And then somehow I'll just trust it as it is.
Lex Fridman (2:02:13.340)
Or you could try to make it more complicated.
Charles Hoskinson (2:02:16.540)
You could wait data feeds from different sources
Lex Fridman (2:02:18.860)
and have some notion of truthiness
Charles Hoskinson (2:02:20.700)
or a veracity metric or something like that.
Lex Fridman (2:02:23.340)
So Chainlink is just one of many different philosophies
Charles Hoskinson (2:02:27.180)
that was born out of the academy.
Lex Fridman (2:02:29.020)
I believe Ari Jewell was connected to it
Lex Fridman (2:02:30.940)
and there's some good people on that side.
Lex Fridman (2:02:33.020)
And it has a philosophy about how do you aggregate,
Charles Hoskinson (2:02:36.380)
a philosophy about how do you inject
Lex Fridman (2:02:38.540)
and how do you create incentives
Lex Fridman (2:02:39.940)
so that that process over time gets more federated
Lex Fridman (2:02:43.420)
or more decentralized instead of centralizing
Charles Hoskinson (2:02:46.020)
around one particular setup.
Lex Fridman (2:02:47.900)
Now, closely related corollary to this
Charles Hoskinson (2:02:50.140)
is computation off chain.
Lex Fridman (2:02:52.900)
So as I mentioned, smart contracts
Charles Hoskinson (2:02:54.820)
are intimately connected to our Oracle.
Lex Fridman (2:02:56.660)
The question is how much pre processing
Lex Fridman (2:02:58.340)
and state management are you gonna do outside of the system
Lex Fridman (2:03:01.420)
versus what do you do inside of the system?
Lex Fridman (2:03:03.900)
So it's a very interesting balance between these two.
Lex Fridman (2:03:07.460)
And they were thinking about this stuff for a long time.
Charles Hoskinson (2:03:09.620)
There's a great paper called Town Crier,
Lex Fridman (2:03:11.580)
came out way back in the day at Cornell.
Lex Fridman (2:03:13.380)
And that was all about using like SGX to scrape things
Lex Fridman (2:03:16.660)
and you can rely on trusted hardware to give you good data.
Lex Fridman (2:03:20.780)
But you could also use those SGX cores
Lex Fridman (2:03:22.620)
to do contract processing,
Charles Hoskinson (2:03:24.140)
because if it runs in trusted hardware,
Lex Fridman (2:03:25.740)
then it's very unlikely to be tampered with or manipulated.
Lex Fridman (2:03:28.980)
And because of that, you don't have to federate it
Lex Fridman (2:03:31.540)
or decentralize it, you can run it on a single device
Charles Hoskinson (2:03:33.900)
as if it was running on a cryptocurrency.
Lex Fridman (2:03:36.020)
So there seems to be a desire in that community
Charles Hoskinson (2:03:38.740)
to capture more and more of the smart contract stack
Lex Fridman (2:03:42.340)
and pull more and more of that stack
Charles Hoskinson (2:03:43.820)
into that layer two infrastructure
Lex Fridman (2:03:45.180)
from running on layer one.
Lex Fridman (2:03:47.140)
Why?
Lex Fridman (2:03:47.980)
Because you have cost reduction
Lex Fridman (2:03:49.140)
and potentially because your trust model collapses
Lex Fridman (2:03:51.380)
to whatever Chainlink is offering,
Charles Hoskinson (2:03:54.020)
you're not gaining anything
Lex Fridman (2:03:55.420)
by doing the computation on Ethereum or another platform.
Lex Fridman (2:04:00.620)
Because you ever watched The Simpsons?
Lex Fridman (2:04:02.780)
There was this beautiful episode where Mr. Burns
Charles Hoskinson (2:04:04.900)
wants to turn the power off in Springfield.
Lex Fridman (2:04:06.900)
It is the perfect analogy for information security.
Lex Fridman (2:04:09.980)
So he and Smithers,
Lex Fridman (2:04:11.140)
they go through this elaborate series of doors
Lex Fridman (2:04:13.540)
and secret passages and guard dogs and robots and shit
Lex Fridman (2:04:17.060)
to get to the center of the power plant
Charles Hoskinson (2:04:18.660)
to turn off the power.
Lex Fridman (2:04:20.020)
And when they arrive at the center of the plant,
Charles Hoskinson (2:04:21.940)
there's like this stray dog that's inside the room.
Lex Fridman (2:04:25.380)
And there's this wicker screen door that leads to the outside.
Lex Fridman (2:04:29.180)
And you're like, well, why the hell did you go
Lex Fridman (2:04:30.580)
through this elaborate series of doors and things
Lex Fridman (2:04:32.180)
if there's like a backdoor into your system?
Lex Fridman (2:04:34.220)
Well, that's basically a real life analogy
Charles Hoskinson (2:04:36.740)
of the relationship between the Oracle
Lex Fridman (2:04:39.500)
and the smart contract.
Charles Hoskinson (2:04:40.660)
You're only as good in your infrastructure model
Lex Fridman (2:04:42.460)
as your weakest link.
Lex Fridman (2:04:43.340)
And it doesn't matter if all of your computation
Lex Fridman (2:04:45.660)
is decentralized, if you're at the mercy of your data feed.
Charles Hoskinson (2:04:48.940)
Because I can just manipulate that
Lex Fridman (2:04:50.180)
and break the entire security model of the system, okay?
Charles Hoskinson (2:04:52.740)
You'll perfectly execute the wrong answer.
Lex Fridman (2:04:55.460)
So they say, well, if you're trusting us anyway,
Lex Fridman (2:04:57.300)
why don't you pull more of what you're doing on chain
Lex Fridman (2:04:59.980)
into our stack, which creates more transaction fees for them
Lex Fridman (2:05:02.500)
and more value for them.
Lex Fridman (2:05:04.140)
But there are many different ways you can do oracles.
Lex Fridman (2:05:06.260)
And earlier I was talking about the biology of these things,
Lex Fridman (2:05:09.540)
the cell differentiation.
Charles Hoskinson (2:05:11.020)
The minute that you admit heterogeneity in your system
Lex Fridman (2:05:14.580)
and you start having cells like stake pools
Charles Hoskinson (2:05:17.060)
or things that are on 24 seven,
Lex Fridman (2:05:20.020)
then you can start asking the what if question.
Lex Fridman (2:05:22.620)
Why don't you guys just also provide data feeds?
Lex Fridman (2:05:26.100)
Why don't you guys also provide state channels
Charles Hoskinson (2:05:28.260)
or payment channels or generate random numbers
Lex Fridman (2:05:29.940)
from here or whatever?
Lex Fridman (2:05:31.140)
And you're now a service provider.
Lex Fridman (2:05:32.420)
You're making the blockchain full time,
Lex Fridman (2:05:34.100)
but part time you're doing this.
Lex Fridman (2:05:35.420)
And if you're making bagels,
Charles Hoskinson (2:05:36.380)
you could probably make donuts, that type of a concept.
Lex Fridman (2:05:39.060)
So I think that type of competition
Charles Hoskinson (2:05:40.940)
is going to be very difficult
Lex Fridman (2:05:43.700)
for a lot of these layer two protocols
Charles Hoskinson (2:05:47.260)
that aren't tightly coupled with the protocol
Lex Fridman (2:05:49.700)
because the ones that are tightly coupled with the protocol,
Charles Hoskinson (2:05:52.900)
they have a built in trust advantage.
Lex Fridman (2:05:54.620)
They've already built a commercial reputation.
Charles Hoskinson (2:05:56.420)
There's already an increasingly more decentralized set.
Lex Fridman (2:05:58.980)
The other thing is you don't need a token.
Charles Hoskinson (2:06:01.060)
You can just use ADA.
Lex Fridman (2:06:02.900)
You don't need an oracle coin
Charles Hoskinson (2:06:04.260)
for these types of things to work.
Lex Fridman (2:06:05.540)
And by the way, that's just for the injection component
Lex Fridman (2:06:08.660)
and the veracity attestation.
Lex Fridman (2:06:10.660)
So is it true or not?
Charles Hoskinson (2:06:12.180)
That's not about the aggregation.
Lex Fridman (2:06:13.860)
That's still a tremendously time intensive,
Charles Hoskinson (2:06:15.980)
expensive proposition.
Lex Fridman (2:06:17.180)
There's only a few people in the world
Charles Hoskinson (2:06:18.780)
that have what Steve has with Wolfram.
Lex Fridman (2:06:21.540)
And those guys by just cutting off those supply
Charles Hoskinson (2:06:24.980)
to replicate what they have is something
Lex Fridman (2:06:26.740)
that would cost hundreds of millions
Charles Hoskinson (2:06:28.020)
or billions of dollars.
Lex Fridman (2:06:29.100)
And so it's an interesting question
Charles Hoskinson (2:06:30.380)
of how do you incentivize
Lex Fridman (2:06:31.780)
decentralized aggregation of information?
Lex Fridman (2:06:33.660)
And that's kind of what town crier
Lex Fridman (2:06:35.340)
and other protocols we're trying to achieve.
Lex Fridman (2:06:37.380)
So maybe you can say how town crier works
Lex Fridman (2:06:39.740)
because it's like, what's your vision?
Charles Hoskinson (2:06:41.820)
You're now partnering with Wolfram and Wolfram Alpha
Lex Fridman (2:06:45.020)
in sort of exploring this partnership of data
Lex Fridman (2:06:49.540)
and the blockchain.
Lex Fridman (2:06:51.780)
What's your vision for a possible distributed version
Lex Fridman (2:06:54.460)
of Wolfram Alpha?
Lex Fridman (2:06:56.180)
Well, the first step is just say,
Lex Fridman (2:06:58.380)
can we use this as a feed?
Lex Fridman (2:06:59.940)
And they can be what Bloomberg is to the financial markets.
Lex Fridman (2:07:02.780)
So you have a terminal and you have something
Lex Fridman (2:07:04.460)
and there's always a value of at least offering choice.
Lex Fridman (2:07:06.980)
And so it's not like we're anti chain link
Lex Fridman (2:07:08.700)
or picking winners and losers.
Charles Hoskinson (2:07:10.060)
It's an open protocol, it's an open system.
Lex Fridman (2:07:11.780)
So if we're successful, chain link will migrate
Charles Hoskinson (2:07:14.380)
or it will at least support us
Lex Fridman (2:07:16.060)
because they like money.
Charles Hoskinson (2:07:17.220)
They like users, they like liquidity.
Lex Fridman (2:07:19.100)
It's a disservice to their community
Charles Hoskinson (2:07:20.620)
not to support a potential customer set,
Lex Fridman (2:07:23.180)
but you're gonna have a spectrum
Charles Hoskinson (2:07:24.460)
from the desire to do a completely decentralized
Lex Fridman (2:07:28.420)
aggregation, curation, injection and veracity attestation
Charles Hoskinson (2:07:33.060)
to a completely centralized vertically integrated set.
Lex Fridman (2:07:36.420)
You need to be able to have that whole spectrum
Lex Fridman (2:07:38.260)
and offer that to the smart contract developer
Lex Fridman (2:07:40.420)
to decide what makes sense.
Charles Hoskinson (2:07:42.940)
By the way, a lot of cases,
Lex Fridman (2:07:44.420)
they're gonna be their own Oracle.
Lex Fridman (2:07:45.860)
So for example, the World of Warcraft example that I gave,
Lex Fridman (2:07:49.540)
well, it's a completely centralized thing.
Charles Hoskinson (2:07:51.260)
It's a video game run by a single company.
Lex Fridman (2:07:54.140)
There's no sense in saying
Charles Hoskinson (2:07:55.140)
that we're somehow going to decentralize that.
Lex Fridman (2:07:57.020)
What they're just trying to do is extend their currency
Charles Hoskinson (2:07:59.300)
or NFTs or whatever into new marketplaces.
Lex Fridman (2:08:02.780)
So the minting of that is controlled by a single entity
Lex Fridman (2:08:07.420)
and the world state of that,
Lex Fridman (2:08:08.900)
you just have to trust Blizzard
Charles Hoskinson (2:08:10.300)
to inject that into the system.
Lex Fridman (2:08:12.060)
You could try to imagine some sort of like,
Charles Hoskinson (2:08:14.740)
Sentinel group of people within the game
Lex Fridman (2:08:16.980)
who keep Blizzard honest,
Lex Fridman (2:08:18.700)
but it's completely unnecessary
Lex Fridman (2:08:19.860)
because they can change the rules
Charles Hoskinson (2:08:20.820)
of the system arbitrarily.
Lex Fridman (2:08:22.420)
So in that case, you're optimizing around efficiency
Lex Fridman (2:08:26.420)
and cost reduction.
Lex Fridman (2:08:27.660)
So you'd want a single feed that gets injected
Charles Hoskinson (2:08:30.900)
into the system from them.
Lex Fridman (2:08:32.260)
If you look at a stable coin that's algorithmic
Lex Fridman (2:08:34.780)
and it's basing its value on the aggregation
Lex Fridman (2:08:37.260)
of many different exchanges,
Charles Hoskinson (2:08:38.980)
that's the polar opposite example.
Lex Fridman (2:08:41.340)
Because there you're saying,
Lex Fridman (2:08:42.300)
okay, what's the price of my asset relative to some basket?
Lex Fridman (2:08:45.540)
But how do I know that the price feeds I'm looking at
Lex Fridman (2:08:48.540)
are accurate?
Lex Fridman (2:08:49.460)
You'd have to look at Binance and Bittrex
Lex Fridman (2:08:51.260)
and all these other things,
Lex Fridman (2:08:52.100)
or maybe there's conventional Forex exchanges
Charles Hoskinson (2:08:53.660)
or something like that.
Lex Fridman (2:08:54.740)
Okay, well, how do you weight that?
Lex Fridman (2:08:57.260)
And how do you clip outliers and these types of things?
Lex Fridman (2:08:59.700)
That's a completely different conversation.
Charles Hoskinson (2:09:01.420)
There's a lot more mechanics you have to put in
Lex Fridman (2:09:04.420)
for that bundling and attestation of the veracity
Charles Hoskinson (2:09:07.300)
of the data feed.
Lex Fridman (2:09:08.260)
And what happens if you get it wrong?
Charles Hoskinson (2:09:09.860)
Your stable coin gets mispriced and everything goes to hell.
Lex Fridman (2:09:13.820)
And the markets will eventually correct it
Charles Hoskinson (2:09:15.940)
for arbitrage seeking behavior,
Lex Fridman (2:09:17.660)
but anything that was built on that will fail
Charles Hoskinson (2:09:19.660)
in the short term.
Lex Fridman (2:09:21.300)
So Oracle is really just a game of,
Charles Hoskinson (2:09:23.460)
you have to build a standardized interfaces
Lex Fridman (2:09:25.100)
and make it as easy as possible for people to do that.
Lex Fridman (2:09:27.620)
And then let people choose how they wanna inject data
Lex Fridman (2:09:31.100)
and what level of assurance do they need behind that?
Lex Fridman (2:09:34.140)
And the question is, how much do you leave to the user
Lex Fridman (2:09:36.300)
versus how much does the protocol take care of for you?
Lex Fridman (2:09:38.780)
And it's a difficult design question.
Lex Fridman (2:09:40.940)
For our part, we love working with Steve and Wolfram
Lex Fridman (2:09:43.980)
and they're a great company
Lex Fridman (2:09:45.100)
and they really have some bright people there.
Lex Fridman (2:09:47.140)
And we know on the data set, they're second to none
Lex Fridman (2:09:49.860)
because not only do they have it, it's computable.
Charles Hoskinson (2:09:51.540)
You can do all kinds of things
Lex Fridman (2:09:52.860)
and manipulate with a very rich query language.
Lex Fridman (2:09:55.340)
So that's a great thing.
Lex Fridman (2:09:56.540)
And we wanna make sure that that's accessible
Charles Hoskinson (2:09:58.420)
to developers and Cardano.
Lex Fridman (2:10:00.620)
Remember, they're like Bloomberg.
Charles Hoskinson (2:10:01.820)
It's a centralized speed in that respect.
Lex Fridman (2:10:04.300)
So if you wanna build a Chainlink S competitor,
Charles Hoskinson (2:10:06.900)
there's other protocols you could do for that.
Lex Fridman (2:10:09.500)
Now you asked about Tom Cryer
Lex Fridman (2:10:10.700)
and that was an attempt to kind of sweep the oceans
Lex Fridman (2:10:14.700)
with the net, get the data through a decentralized way.
Lex Fridman (2:10:19.900)
And that was just saying, hey, let's use trusted hardware
Lex Fridman (2:10:22.180)
to go read all kinds of websites and other things.
Lex Fridman (2:10:24.500)
And because it's trusted hardware,
Lex Fridman (2:10:26.060)
the scraping is nonbiased.
Charles Hoskinson (2:10:28.660)
If you find something inconvenient to whatever
Lex Fridman (2:10:31.020)
the person who's scraping is,
Charles Hoskinson (2:10:32.580)
trusted hardware will still do it and it can't be changed.
Lex Fridman (2:10:35.300)
You'd have to manipulate SGX to do that.
Lex Fridman (2:10:37.900)
So that's great, but you still run into the problem
Lex Fridman (2:10:40.340)
of how do you wire that together?
Charles Hoskinson (2:10:42.060)
The underlying websites still don't have any notion
Lex Fridman (2:10:44.980)
of veracity or reputation behind them.
Lex Fridman (2:10:47.340)
And then you also have the issue of storage.
Lex Fridman (2:10:49.500)
Where the hell do you put all of it?
Charles Hoskinson (2:10:51.300)
If you have exabytes of data,
Lex Fridman (2:10:53.300)
what's the incentive for that?
Charles Hoskinson (2:10:54.780)
That's the dream of the Semantic Web.
Lex Fridman (2:10:56.660)
I still think is a fascinating idea
Lex Fridman (2:10:58.820)
how to basically convert the internet into a core,
Lex Fridman (2:11:02.100)
like a knowledge base that you can query,
Charles Hoskinson (2:11:06.660)
you can integrate in the same way you did
Lex Fridman (2:11:08.060)
with Wolfram Alpha, but much bigger.
Lex Fridman (2:11:11.300)
But that means basically revolutionizing
Lex Fridman (2:11:14.860)
the way we put the internet together,
Charles Hoskinson (2:11:17.420)
which I think these ideas of off chain data
Lex Fridman (2:11:22.420)
will motivate people, because there's a lot of money
Charles Hoskinson (2:11:26.940)
to be made.
Lex Fridman (2:11:27.780)
Finally, there's money to be made with the Semantic Web.
Lex Fridman (2:11:30.900)
So that'll be an interesting kind of future.
Lex Fridman (2:11:32.780)
I do want to ask you about video games really quick
Charles Hoskinson (2:11:35.060)
as a small tangent, because you said this really
Lex Fridman (2:11:37.300)
interesting idea of Blizzard being centralized control.
Charles Hoskinson (2:11:40.300)
Is it possible to have items in the game
Lex Fridman (2:11:45.660)
that are not controlled by Blizzard?
Charles Hoskinson (2:11:48.780)
Sure.
Lex Fridman (2:11:49.620)
Being controlled in a decentralized fashion
Charles Hoskinson (2:11:51.980)
that you can, like what is it,
Lex Fridman (2:11:53.220)
the grandfather sword in Diablo?
Lex Fridman (2:11:56.140)
Hmm, what was it really?
Lex Fridman (2:11:58.100)
Somebody was criticizing me.
Charles Hoskinson (2:11:59.220)
I was saying all these kinds of nice things
Lex Fridman (2:12:01.140)
about Diablo III, and they said Diablo II Resurrected
Charles Hoskinson (2:12:04.140)
is coming out, they need to check it out.
Lex Fridman (2:12:05.700)
There's a lot of camps and wars that need to be done.
Charles Hoskinson (2:12:08.100)
Come on, we both know that Diablo II
Lex Fridman (2:12:09.420)
is far better than Diablo III.
Charles Hoskinson (2:12:10.460)
That's what they're saying.
Lex Fridman (2:12:11.540)
This is the war that they're having.
Charles Hoskinson (2:12:12.980)
Okay, so we'll play it, it's coming out soon,
Lex Fridman (2:12:15.820)
I'll play it, fine.
Lex Fridman (2:12:17.060)
But nevertheless, those items are owned by Blizzard.
Lex Fridman (2:12:20.180)
Is it possible to create video games
Charles Hoskinson (2:12:23.300)
where items are owned by the people outside of Blizzard,
Lex Fridman (2:12:28.020)
and do you think in like a half century from now
Charles Hoskinson (2:12:32.660)
we will all live in those games,
Lex Fridman (2:12:34.260)
and we'll forget the physical space even exists?
Charles Hoskinson (2:12:35.980)
Well, yeah, that's definitely possible.
Lex Fridman (2:12:37.420)
I look at CryptoKitties, that's a great example of that.
Lex Fridman (2:12:39.740)
Can you explain what CryptoKitties is?
Lex Fridman (2:12:41.140)
Well, it's basically just a video game
Charles Hoskinson (2:12:42.660)
that kind of lives on a blockchain,
Lex Fridman (2:12:44.180)
and the creatures within the game
Charles Hoskinson (2:12:46.500)
can breed with each other and create new CryptoKitties,
Lex Fridman (2:12:48.940)
and you can own them.
Lex Fridman (2:12:50.180)
So it's like some sort of dystopian Tamagotchi
Lex Fridman (2:12:52.980)
with lots of money behind it.
Lex Fridman (2:12:54.380)
But anyway, the thing is those assets
Lex Fridman (2:12:58.220)
actually have a blockchain based representation.
Lex Fridman (2:13:00.860)
And so whether the infrastructure
Lex Fridman (2:13:03.060)
that hoists up that game off chain goes on or off,
Charles Hoskinson (2:13:05.800)
because that ledger exists outside of the game,
Lex Fridman (2:13:09.740)
any person can come in and replicate it, restore it,
Lex Fridman (2:13:12.720)
and turn it back on sans intellectual property.
Lex Fridman (2:13:16.740)
So yeah, it's completely possible
Charles Hoskinson (2:13:19.180)
to break your architecture up
Lex Fridman (2:13:20.720)
where you have a notion of the player part,
Lex Fridman (2:13:24.100)
and then you have a notion of the experience part,
Lex Fridman (2:13:27.180)
and you can interchange experiences,
Charles Hoskinson (2:13:29.900)
almost like you do cascading style sheets or something
Lex Fridman (2:13:32.260)
for different presentations,
Lex Fridman (2:13:33.780)
and the ownership of the underlying layers, the players.
Lex Fridman (2:13:36.720)
So yeah, that's definitely doable.
Lex Fridman (2:13:38.060)
And frankly, that's what's gonna happen in the gaming world,
Lex Fridman (2:13:40.500)
because there's so much value in that.
Charles Hoskinson (2:13:42.020)
I mean, everybody wants play,
Lex Fridman (2:13:43.540)
and right now the model is you make a game,
Charles Hoskinson (2:13:46.220)
you sell licenses, and you have a huge surge of people
Lex Fridman (2:13:50.420)
at the beginning of the game buying the video game,
Lex Fridman (2:13:52.340)
and then you have this long tail,
Lex Fridman (2:13:54.060)
but you've gotten almost 95% of your value
Charles Hoskinson (2:13:56.400)
in the first six months, and you have a huge churn rate.
Lex Fridman (2:13:58.820)
The odds are the vast majority of people
Charles Hoskinson (2:14:00.160)
won't be playing the game within 12 months.
Lex Fridman (2:14:02.440)
But if you can create an interactive game
Charles Hoskinson (2:14:04.140)
where there's an actual economy inside the game,
Lex Fridman (2:14:06.140)
then you have EVE Online, or Second Life,
Charles Hoskinson (2:14:08.460)
or any of these things,
Lex Fridman (2:14:09.280)
where you have people playing for 10 years,
Lex Fridman (2:14:10.720)
and there's like people buying virtual real estate
Lex Fridman (2:14:12.580)
and all these other things.
Charles Hoskinson (2:14:13.740)
You as the game developer actually don't have to create
Lex Fridman (2:14:16.180)
a lot of content.
Lex Fridman (2:14:17.620)
So your long tail gets a lot fatter,
Lex Fridman (2:14:20.380)
and it generates a lot more revenue,
Lex Fridman (2:14:21.900)
and your cost of operating the system
Lex Fridman (2:14:23.740)
is fairly fixed or diminishing.
Lex Fridman (2:14:25.900)
So the economics align for doing exactly
Lex Fridman (2:14:28.100)
what you're talking about, and I think it'll get done.
Charles Hoskinson (2:14:30.820)
Well, I just saw recently sort of this calculation
Lex Fridman (2:14:34.300)
that people played WoW and Fortnite for 140 billion hours.
Charles Hoskinson (2:14:40.260)
Yeah.
Lex Fridman (2:14:41.420)
So, and that's without the economic incentives there.
Lex Fridman (2:14:44.860)
So do you think it's possible that like most of our economy
Lex Fridman (2:14:47.860)
in the future, people playing video games essentially?
Charles Hoskinson (2:14:52.700)
Like, okay, so one vision of the future,
Lex Fridman (2:14:56.500)
especially with AI and automation,
Charles Hoskinson (2:14:58.180)
that people like, that we get wealthier and wealthier,
Lex Fridman (2:15:01.540)
there's this kind of rising GDP for the entire world,
Lex Fridman (2:15:04.580)
and then people are losing their jobs,
Lex Fridman (2:15:06.780)
but they're still well off enough
Charles Hoskinson (2:15:08.760)
to be able to have a high quality of life.
Lex Fridman (2:15:11.360)
So we're all looking for meaning,
Lex Fridman (2:15:12.820)
and the meaning we'll find is by playing video games,
Lex Fridman (2:15:14.980)
and now there's this extra levels,
Charles Hoskinson (2:15:17.180)
like you can be a Bill Gates within a video game world,
Lex Fridman (2:15:19.720)
in the digital world as opposed to the physical world.
Lex Fridman (2:15:22.660)
Is that, do you think that's the future?
Lex Fridman (2:15:24.820)
You just wanna have the Westworld
Lex Fridman (2:15:26.100)
if you can't tell the difference, does it matter?
Lex Fridman (2:15:28.180)
Lion uttered to you.
Lex Fridman (2:15:30.900)
Did you ever interview Yuval Harari?
Lex Fridman (2:15:32.820)
Not yet, eventually.
Charles Hoskinson (2:15:34.240)
Well, yeah, but yeah, I guess, you know,
Lex Fridman (2:15:35.780)
Homo Dias, that's kind of like the roadmap there, right?
Charles Hoskinson (2:15:38.580)
This hedonistic dystopia where everybody just lives
Lex Fridman (2:15:42.340)
wired into some simulation,
Lex Fridman (2:15:44.980)
and there's some movies about that,
Lex Fridman (2:15:46.420)
Ready Player One, and the other one was Surrogate,
Lex Fridman (2:15:49.740)
and so forth, so yeah, Hollywood has certainly visualized
Lex Fridman (2:15:52.960)
what this could be, but you know,
Charles Hoskinson (2:15:54.620)
I'm not so pessimistic in that respect.
Lex Fridman (2:15:58.360)
I do believe that the video game world
Charles Hoskinson (2:16:00.140)
is evolving at an amazing pace,
Lex Fridman (2:16:01.620)
if you're looking at where Unreal is at,
Charles Hoskinson (2:16:03.740)
is just incredible, the latest Unreal Engine,
Lex Fridman (2:16:06.220)
and within one or two more ticks of that clock,
Charles Hoskinson (2:16:09.100)
the iteration, so five to 10 years,
Lex Fridman (2:16:11.380)
the photorealism will be so good that it'll be hard
Charles Hoskinson (2:16:15.100)
to distinguish between real life and video games,
Lex Fridman (2:16:18.900)
and you know, the hardware is almost there,
Lex Fridman (2:16:20.980)
so the question is then,
Lex Fridman (2:16:22.940)
when you have photorealistic experiences
Charles Hoskinson (2:16:25.260)
where you've successfully traversed the uncanny valley
Lex Fridman (2:16:27.980)
to a point where it's good enough,
Charles Hoskinson (2:16:29.820)
then will virtual reality be more desirable
Lex Fridman (2:16:33.960)
than actual reality?
Lex Fridman (2:16:35.900)
And for the vast majority of people,
Lex Fridman (2:16:37.180)
the answer's probably yes,
Charles Hoskinson (2:16:38.520)
because actual reality's tough, it's hard, you know,
Lex Fridman (2:16:42.100)
but then your knowledge that you live in a virtual world
Charles Hoskinson (2:16:46.740)
actually becomes a problem for you,
Lex Fridman (2:16:48.960)
so there's gonna be this kind of sad, dark industry
Charles Hoskinson (2:16:52.180)
where people try to create amnesia,
Lex Fridman (2:16:54.140)
where they're not aware that they're inside
Charles Hoskinson (2:16:55.640)
the virtual world, and so that's interesting.
Lex Fridman (2:16:57.980)
Why is it sad?
Charles Hoskinson (2:16:58.820)
I mean, it's almost like a...
Lex Fridman (2:17:00.400)
Because you know it's not real,
Lex Fridman (2:17:02.600)
but if you could forget that it's not real,
Lex Fridman (2:17:05.060)
then you believe what you're experiencing is real.
Lex Fridman (2:17:07.760)
Yeah, but yeah, so what?
Lex Fridman (2:17:09.460)
You forget, like you forget all the ugly parts of life,
Charles Hoskinson (2:17:12.820)
which is the physical, the meat space,
Lex Fridman (2:17:14.980)
and then you get to enjoy video games.
Lex Fridman (2:17:16.700)
But it's always lurking in the back of your mind
Lex Fridman (2:17:18.160)
that you're in the matrix.
Charles Hoskinson (2:17:19.160)
Well, that's... You have to not be in the matrix.
Lex Fridman (2:17:20.660)
That's just why the bald dude in the matrix was like,
Charles Hoskinson (2:17:22.980)
I wanna be rich and have a beautiful wife
Lex Fridman (2:17:25.200)
and eat a steak every day.
Charles Hoskinson (2:17:27.020)
You know, he didn't wanna know he was in the matrix.
Lex Fridman (2:17:29.100)
So you would take the red pill, not the blue pill.
Charles Hoskinson (2:17:31.100)
Well, no, hang on, it depends on how good
Lex Fridman (2:17:34.940)
the virtual world is, Lex.
Charles Hoskinson (2:17:36.300)
Well, that's what I'm trying to tell you,
Lex Fridman (2:17:37.580)
is I mean, isn't that what most of the beautiful experiences
Charles Hoskinson (2:17:40.980)
about human life are, is forgetting for a moment,
Lex Fridman (2:17:46.220)
for a time, like the mess of it?
Charles Hoskinson (2:17:48.620)
Yeah.
Lex Fridman (2:17:49.460)
I mean, that's what love is, is you forget.
Charles Hoskinson (2:17:51.360)
Like all of a sudden everything is beautiful,
Lex Fridman (2:17:53.420)
but like the reality is you're gonna lose that person
Lex Fridman (2:17:55.460)
and most likely love will fade.
Lex Fridman (2:17:57.140)
And no matter what, even if it doesn't,
Charles Hoskinson (2:17:59.380)
you're both gonna be dead soon.
Lex Fridman (2:18:01.220)
Jesus Christ.
Lex Fridman (2:18:04.440)
So I'm taking the blue pill on that one.
Lex Fridman (2:18:06.020)
You went full Ernest Becker on me, man.
Charles Hoskinson (2:18:07.940)
Okay.
Lex Fridman (2:18:10.780)
But you know, I get what you're saying though,
Lex Fridman (2:18:12.420)
and then actually, but then it begs the question,
Lex Fridman (2:18:14.900)
how do we, and it goes back to the very first question
Charles Hoskinson (2:18:17.020)
you asked in this interview, which is like,
Lex Fridman (2:18:18.500)
how do we know we're not in a simulation?
Charles Hoskinson (2:18:20.040)
Or, you know, is this Bostrom's concepts
Lex Fridman (2:18:22.860)
or these ideas like real?
Charles Hoskinson (2:18:24.720)
Well, it's entirely possible that we are
Lex Fridman (2:18:26.580)
and that we desire to be because the real world
Charles Hoskinson (2:18:30.020)
is horrifically dystopian or bad,
Lex Fridman (2:18:32.300)
or maybe we actually don't exist, we're completely virtual
Lex Fridman (2:18:35.240)
and does it matter?
Lex Fridman (2:18:36.620)
And I'd argue that it probably doesn't
Charles Hoskinson (2:18:38.260)
at some certain point.
Lex Fridman (2:18:40.100)
If you're at the end of your life
Lex Fridman (2:18:41.420)
and you're 90s dying of cancer,
Lex Fridman (2:18:43.620)
the fact that you can live out being young, healthy,
Lex Fridman (2:18:45.820)
and 25 is probably a desirable thing
Lex Fridman (2:18:48.100)
and no one would ever complain about that.
Charles Hoskinson (2:18:50.060)
Where it becomes problematic is if the vast majority
Lex Fridman (2:18:53.180)
of society enters this virtual simulacra of reality
Lex Fridman (2:18:57.620)
and as a consequence, nothing works
Lex Fridman (2:18:59.660)
because there's no one to do anything,
Charles Hoskinson (2:19:01.260)
society falls apart in that respect.
Lex Fridman (2:19:03.620)
There's no desire to do anything in the real world.
Charles Hoskinson (2:19:05.860)
Innovation stops, the desire to actually do real work stops
Lex Fridman (2:19:09.140)
because you're always inside this virtual economy.
Lex Fridman (2:19:12.340)
So I don't know, it's an interesting question,
Lex Fridman (2:19:14.740)
but drawing it back more to where we're at today,
Charles Hoskinson (2:19:18.660)
the evolution factors are there.
Lex Fridman (2:19:20.500)
VR is evolving at a very rapid rate.
Charles Hoskinson (2:19:22.940)
The game engines are just incredible today
Lex Fridman (2:19:25.820)
and they're really doing amazing things.
Lex Fridman (2:19:27.880)
And there seems to be an overwhelming desire
Lex Fridman (2:19:30.700)
for people to escape the harshness of where they live,
Charles Hoskinson (2:19:33.480)
just by evidence by how many billions of hours
Lex Fridman (2:19:36.060)
have been spent playing video games.
Charles Hoskinson (2:19:37.340)
People still play Skyrim.
Lex Fridman (2:19:39.020)
Yeah, it's a good game.
Charles Hoskinson (2:19:41.100)
It's probably my favorite game
Lex Fridman (2:19:42.940)
of the whole Elder Scrolls series.
Lex Fridman (2:19:44.660)
But it's fascinating because smart contracts
Lex Fridman (2:19:47.860)
is actually the mechanism by which we take a lot
Charles Hoskinson (2:19:50.020)
of the meatspace stuff and move it to the digital world.
Lex Fridman (2:19:52.740)
So all the stuff we've been talking about
Charles Hoskinson (2:19:55.740)
is really probably the mechanisms which take us there,
Lex Fridman (2:19:59.700)
which I find that world not dystopian.
Charles Hoskinson (2:20:03.100)
I find that world quite dystopian
Lex Fridman (2:20:04.340)
because there's so many opportunities
Charles Hoskinson (2:20:05.500)
to create beautiful experiences.
Lex Fridman (2:20:08.900)
But since we're talking about the future,
Charles Hoskinson (2:20:11.340)
let me ask you a timeline question,
Lex Fridman (2:20:14.100)
or even just like definitional.
Lex Fridman (2:20:15.580)
What is Alonzo?
Lex Fridman (2:20:17.620)
You mentioned some fun Hello World experiments going on.
Charles Hoskinson (2:20:20.920)
Right, right.
Lex Fridman (2:20:22.260)
And how and when will Cardano get smart contracts?
Charles Hoskinson (2:20:26.380)
Yeah, so Alonzo Church is a famous, famous mathematician,
Lex Fridman (2:20:29.460)
computer science guy, and he was a contemporary of Turing.
Lex Fridman (2:20:32.260)
And there was like these three different views
Lex Fridman (2:20:34.420)
of computing, recursive functions from Gödel
Lex Fridman (2:20:36.540)
and Turing machines from Turing,
Lex Fridman (2:20:37.900)
and Church had lambda calculus, and they're all equivalent,
Lex Fridman (2:20:40.700)
and they all give you the ability to build a computer.
Lex Fridman (2:20:42.860)
So we like functional programming, so we decided.
Charles Hoskinson (2:20:46.020)
That's your favorite Church.
Lex Fridman (2:20:47.900)
So we had to name something after Church,
Lex Fridman (2:20:49.460)
and it's just weird that we never did.
Lex Fridman (2:20:52.100)
So we said, okay, Alonzo is a good release name.
Charles Hoskinson (2:20:54.660)
Basically, it was bringing smart contracts to Cardano.
Lex Fridman (2:20:56.660)
Took us a long time to get here,
Lex Fridman (2:20:58.220)
and we'll be there in the next 90 days.
Lex Fridman (2:21:00.220)
It's like everything we do, there's a process,
Lex Fridman (2:21:03.980)
and so there's all the colors of the rainbow.
Lex Fridman (2:21:05.700)
We start with Alonzo blue, and then white, and purple.
Lex Fridman (2:21:09.460)
And each step, you do some more things.
Lex Fridman (2:21:11.240)
You bring more users in, and then eventually,
Charles Hoskinson (2:21:13.220)
you get to a threshold where you say,
Lex Fridman (2:21:15.420)
okay, everything works the way intended,
Lex Fridman (2:21:17.020)
and you push a button, and we initiate
Lex Fridman (2:21:18.700)
what's called a hard fork combinator event,
Lex Fridman (2:21:20.180)
and boom, the system has smart contracts.
Lex Fridman (2:21:22.700)
You just wake up, and it's there.
Charles Hoskinson (2:21:24.260)
It's like it's in your house.
Lex Fridman (2:21:25.820)
So it's gonna be a hard fork.
Charles Hoskinson (2:21:26.660)
It's like when I got my blue check mark on Twitter,
Lex Fridman (2:21:28.140)
I woke up, and I had it.
Charles Hoskinson (2:21:29.460)
Yeah, and you were never the same.
Lex Fridman (2:21:32.300)
You can't go back.
Charles Hoskinson (2:21:33.180)
It's a, yeah, like hard fork.
Lex Fridman (2:21:34.740)
It's a hard fork of Charles.
Charles Hoskinson (2:21:36.020)
Yeah, exactly.
Lex Fridman (2:21:36.860)
You got blue mark.
Charles Hoskinson (2:21:37.680)
Well, actually, I think you can take it away, but.
Lex Fridman (2:21:39.700)
Can they take my check mark away, Flex?
Charles Hoskinson (2:21:41.620)
I think.
Lex Fridman (2:21:42.460)
Oh, but that'd be like a hard fork backwards, I guess.
Charles Hoskinson (2:21:47.340)
Okay, so great.
Lex Fridman (2:21:48.780)
So that's, but currently, there's a testing procedure
Charles Hoskinson (2:21:55.380)
going on to see what does that look like,
Lex Fridman (2:21:58.420)
and what will give you confidence
Charles Hoskinson (2:22:00.100)
that things are working well.
Lex Fridman (2:22:00.980)
Yeah, so first, you start with the marry era,
Charles Hoskinson (2:22:02.940)
which is where we're right now multi assets.
Lex Fridman (2:22:04.900)
So you can do metadata and issue tokens on Cardano,
Lex Fridman (2:22:08.080)
but you'd have limited programmability on chain.
Lex Fridman (2:22:11.180)
Alonzo adds the programmability in,
Lex Fridman (2:22:13.300)
but we already have most of the foundations
Lex Fridman (2:22:15.220)
of the extended UTXO model,
Lex Fridman (2:22:16.540)
and the smart contract model is just,
Lex Fridman (2:22:17.940)
those things aren't ready.
Lex Fridman (2:22:19.340)
So the first step is, say, fork it,
Lex Fridman (2:22:21.500)
so all those rules are now there, okay?
Charles Hoskinson (2:22:23.780)
That's what we did with Alonzo Blue.
Lex Fridman (2:22:25.460)
We forked a testnet base layer, and it successfully survived
Charles Hoskinson (2:22:29.860)
going from marry to Alonzo,
Lex Fridman (2:22:31.820)
which means that you can move transactions
Charles Hoskinson (2:22:33.420)
from one side to the other.
Lex Fridman (2:22:34.420)
Both systems work.
Lex Fridman (2:22:35.840)
And then the next step is, say, okay, well,
Lex Fridman (2:22:37.820)
are the stake pool operators, people who run
Charles Hoskinson (2:22:39.500)
the infrastructure, able to run this testnet
Lex Fridman (2:22:41.540)
just like they run Cardano?
Lex Fridman (2:22:42.860)
And that's what we're doing right now with Blue.
Lex Fridman (2:22:44.220)
We're bringing all these SPOs in,
Lex Fridman (2:22:45.860)
and then are we able to submit and run smart contracts
Lex Fridman (2:22:48.880)
on the system?
Lex Fridman (2:22:49.720)
And they actually return a round trip.
Lex Fridman (2:22:51.300)
You send something, you get something back.
Charles Hoskinson (2:22:53.040)
Yay, okay.
Lex Fridman (2:22:54.780)
So that's where we're at.
Lex Fridman (2:22:55.620)
And then what you do is each step,
Lex Fridman (2:22:57.780)
so the next is white, you go from like 50 people
Charles Hoskinson (2:23:00.400)
to several hundred, and then purple's an open testnet
Lex Fridman (2:23:03.900)
where we want every single person in the entire ecosystem
Charles Hoskinson (2:23:06.700)
to use it, and it's also a DevNet.
Lex Fridman (2:23:08.600)
So that means that people who are writing
Charles Hoskinson (2:23:10.420)
with Pluse Playground and local interpreters,
Lex Fridman (2:23:12.860)
their smart contracts can actually start testing them now
Charles Hoskinson (2:23:16.020)
on the public infrastructure.
Lex Fridman (2:23:17.460)
So it's kind of like releasing dev kits to the Xbox
Charles Hoskinson (2:23:20.580)
or something like that.
Lex Fridman (2:23:21.420)
You send them out to game developers
Charles Hoskinson (2:23:22.820)
before you release the Xbox,
Lex Fridman (2:23:23.980)
so they can test their video games in anticipation
Charles Hoskinson (2:23:26.580)
of the release of the system.
Lex Fridman (2:23:27.980)
So you run that for at least a month,
Lex Fridman (2:23:29.380)
and as long as it doesn't blow up in your face,
Lex Fridman (2:23:31.740)
and oh God, what have we done, Hindenburg,
Charles Hoskinson (2:23:33.740)
oh the humanity, you release it and you ship it.
Lex Fridman (2:23:37.480)
The problem is it's no longer in our control.
Charles Hoskinson (2:23:39.620)
There's over 100 exchanges that have listed Cardano.
Lex Fridman (2:23:42.300)
There's lots of wallet infrastructure.
Charles Hoskinson (2:23:43.780)
There are thousands of different constituencies.
Lex Fridman (2:23:45.980)
So it's less of a technological problem now,
Lex Fridman (2:23:49.000)
and it's more of a coordination problem.
Lex Fridman (2:23:51.020)
So you have to evolve in a very methodical way,
Lex Fridman (2:23:54.660)
and each step of the way you bring new actors in,
Lex Fridman (2:23:56.820)
they get ready for it.
Charles Hoskinson (2:23:58.020)
They upgrade their infrastructure to it,
Lex Fridman (2:23:59.800)
and then like shells, eventually,
Charles Hoskinson (2:24:01.880)
you get to the outer shell,
Lex Fridman (2:24:03.360)
which is the hard fork for the general public.
Lex Fridman (2:24:05.300)
And if we've done it right, like that blue check mark,
Lex Fridman (2:24:08.280)
they wake up and it's exactly the same.
Charles Hoskinson (2:24:11.020)
They just get a little update thing, update your client.
Lex Fridman (2:24:14.540)
And they start demanding Wagyu beef.
Charles Hoskinson (2:24:16.060)
Is there stuff you're worried about
Lex Fridman (2:24:17.480)
in terms of like when something's this tricky,
Charles Hoskinson (2:24:21.680)
you know, goes up several orders of magnitudes
Lex Fridman (2:24:24.180)
in terms of scale?
Lex Fridman (2:24:25.640)
Are there problems that you foresee?
Lex Fridman (2:24:27.440)
Is there, like we said, there's game theoretic aspects,
Charles Hoskinson (2:24:30.940)
all those kinds of things.
Lex Fridman (2:24:32.380)
Like what worries you the most?
Charles Hoskinson (2:24:33.860)
I mean, I sleep like a baby.
Lex Fridman (2:24:35.460)
I wake up every two hours crying.
Charles Hoskinson (2:24:37.500)
Um.
Lex Fridman (2:24:38.340)
Um.
Charles Hoskinson (2:24:39.180)
Um.
Lex Fridman (2:24:40.000)
Um.
Charles Hoskinson (2:24:40.840)
Um.
Lex Fridman (2:24:41.680)
Um.
Charles Hoskinson (2:24:42.520)
Um.
Lex Fridman (2:24:43.340)
Um.
Charles Hoskinson (2:24:44.180)
Um.
Lex Fridman (2:24:45.020)
Um.
Charles Hoskinson (2:24:45.840)
Um.
Lex Fridman (2:24:46.680)
And what makes no sense, I slept like a baby.
Lex Fridman (2:24:49.060)
But go ahead.
Lex Fridman (2:24:49.900)
Yeah, yeah, exactly, right.
Charles Hoskinson (2:24:51.640)
Messing your whole world up right now, Alex.
Lex Fridman (2:24:54.300)
Um.
Charles Hoskinson (2:24:55.140)
No, I mean, there's so much that keeps me up at night.
Lex Fridman (2:24:56.700)
You know, it's like you're in a cold sweat everyday
Charles Hoskinson (2:24:58.900)
when you have an ecosystem like this,
Lex Fridman (2:25:00.500)
cause you, you, the other thing is you're judged
Charles Hoskinson (2:25:02.980)
as much by the applications people build on the platform
Lex Fridman (2:25:05.420)
as you are by the platform you've constructed.
Charles Hoskinson (2:25:08.200)
So, you know, one of the most unfair things
Lex Fridman (2:25:10.460)
that happened in our industry was blaming Vitalik
Charles Hoskinson (2:25:13.140)
for the DAO hack.
Lex Fridman (2:25:14.500)
He didn't write the code, he wasn't responsible for it.
Charles Hoskinson (2:25:16.440)
It was a completely independent, different team.
Lex Fridman (2:25:18.620)
And because it blew up,
Charles Hoskinson (2:25:19.580)
a lot of people just developed this idea,
Lex Fridman (2:25:21.260)
Ethereum is not secure, the EBM is fundamentally broken.
Lex Fridman (2:25:24.220)
And it's true, there are some issues there,
Lex Fridman (2:25:25.880)
but come on, that's like saying,
Charles Hoskinson (2:25:28.160)
oh, well, Photoshop didn't work, fuck Bill Gates.
Lex Fridman (2:25:31.420)
Yeah.
Lex Fridman (2:25:32.260)
And that's the issue is you get,
Lex Fridman (2:25:34.820)
as a platform developer,
Charles Hoskinson (2:25:38.060)
coupled with the wins and losses
Lex Fridman (2:25:40.020)
of your application developer.
Lex Fridman (2:25:41.220)
So if they go do amazing things,
Lex Fridman (2:25:43.020)
it's like, oh yeah, Windows is great, we love it.
Lex Fridman (2:25:45.780)
And if they go do terrible things, they're like,
Lex Fridman (2:25:47.340)
oh man, I guess he's trying to kill all of us.
Lex Fridman (2:25:50.300)
So what we're kept up a night about
Lex Fridman (2:25:53.300)
is not just what we've constructed,
Lex Fridman (2:25:55.140)
but also how do we curate an ecosystem
Lex Fridman (2:25:58.060)
and foster the development of an ecosystem
Charles Hoskinson (2:25:59.740)
where you have assurance baked into the application,
Lex Fridman (2:26:02.060)
and that's somehow expressible to the user.
Lex Fridman (2:26:04.380)
So when you download your smart contract
Lex Fridman (2:26:06.540)
or you click your one click install,
Charles Hoskinson (2:26:08.040)
you use your unit swap clone
Lex Fridman (2:26:09.780)
or whatever the hell it is that's deployed on Cardano,
Charles Hoskinson (2:26:12.440)
you have a little green check mark
Lex Fridman (2:26:13.680)
or something that indicates to you
Charles Hoskinson (2:26:15.020)
that somebody audited the code
Lex Fridman (2:26:16.500)
or followed a specification.
Charles Hoskinson (2:26:18.260)
The lack of that is problematic
Lex Fridman (2:26:19.940)
because then first there's impersonations,
Charles Hoskinson (2:26:22.520)
the whole MyEtherWallet thing,
Lex Fridman (2:26:24.080)
like your videos or my videos are the same.
Charles Hoskinson (2:26:26.180)
Every comment, there's a bot that says,
Lex Fridman (2:26:28.220)
hey, give me some money or something like that.
Charles Hoskinson (2:26:30.780)
That kind of stuff happens.
Lex Fridman (2:26:31.880)
But then just protocol level flaws,
Charles Hoskinson (2:26:34.060)
like what happened with the DAO hack,
Lex Fridman (2:26:35.740)
that's what really keeps me up at night.
Lex Fridman (2:26:37.180)
How do you resolve that problem?
Lex Fridman (2:26:38.900)
Because I don't hire these people.
Charles Hoskinson (2:26:40.500)
I don't tell them what to do.
Lex Fridman (2:26:41.760)
I didn't tell them how to build things on the platform.
Charles Hoskinson (2:26:44.320)
They may have tons of experience and knowledge.
Lex Fridman (2:26:46.140)
They could be Simon Payton Jones
Charles Hoskinson (2:26:47.700)
or they could have absolutely no knowledge whatsoever
Lex Fridman (2:26:50.460)
and they read one tutorial
Lex Fridman (2:26:51.540)
and they've written three lines of code their entire life
Lex Fridman (2:26:53.860)
and they've deployed something horribly broken, copy paste,
Lex Fridman (2:26:56.660)
and suddenly it all goes to hell.
Lex Fridman (2:26:58.100)
I'm judged by both.
Charles Hoskinson (2:27:00.120)
That's what really keeps me up at night.
Lex Fridman (2:27:01.620)
And we're, as a company, trying to figure out,
Lex Fridman (2:27:03.620)
and as the ecosystem, trying to figure out standards.
Lex Fridman (2:27:06.300)
Like at University of Wyoming,
Charles Hoskinson (2:27:07.480)
we're setting up the Smart Contract Engineering Institute.
Lex Fridman (2:27:10.500)
We're negotiating with them right now.
Lex Fridman (2:27:12.020)
And the goal there is just to create some standards
Lex Fridman (2:27:14.940)
for how to certify smart contracts
Lex Fridman (2:27:17.500)
so that you can get that green check mark
Lex Fridman (2:27:19.220)
and know that it actually has some assurance level
Charles Hoskinson (2:27:21.660)
behind it.
Lex Fridman (2:27:22.540)
But God, that's a huge coordination problem
Lex Fridman (2:27:24.940)
and it's a huge information presentation problem
Lex Fridman (2:27:27.120)
and incentives problem and so forth.
Lex Fridman (2:27:29.060)
And unfortunately, people who value being first to market
Lex Fridman (2:27:31.940)
will kind of piss in the pool for everybody else.
Charles Hoskinson (2:27:35.120)
In terms of, maybe you can comment
Lex Fridman (2:27:37.420)
on the topic of decentralized exchanges.
Lex Fridman (2:27:40.220)
What kind of decentralized exchanges, DEXs,
Lex Fridman (2:27:43.940)
what are they, first of all,
Lex Fridman (2:27:45.020)
and what kind would you like to see built around Cardano?
Lex Fridman (2:27:48.780)
Yeah, so people want to create exchanges
Charles Hoskinson (2:27:51.100)
that don't have custodial risk.
Lex Fridman (2:27:52.980)
The point of exchange is to build you a marketplace
Charles Hoskinson (2:27:55.780)
where bids and asks can find each other,
Lex Fridman (2:27:58.340)
people can meet and trade.
Charles Hoskinson (2:28:00.420)
You can find a price and you can get liquidity.
Lex Fridman (2:28:02.460)
So you got gold, you wanna turn your gold into dollars.
Charles Hoskinson (2:28:05.820)
Okay, well, somebody has to create a marketplace for that.
Lex Fridman (2:28:08.140)
So like Coinbase is an example of a marketplace.
Charles Hoskinson (2:28:09.900)
Exactly. But it's centralized.
Lex Fridman (2:28:11.260)
But the problem is you have custodial risk.
Lex Fridman (2:28:13.100)
So when you put your gold and your dollars
Lex Fridman (2:28:15.180)
or your digital representations of these things
Charles Hoskinson (2:28:17.300)
into the exchange, what if Wally,
Lex Fridman (2:28:22.060)
Eve broke up with him and now he's really sad
Lex Fridman (2:28:24.300)
and he's gone to the dark side
Lex Fridman (2:28:25.920)
and he's become Wally the hacker.
Charles Hoskinson (2:28:27.660)
Okay, so he can go and sneak his way in
Lex Fridman (2:28:29.460)
and hack into Coinbase and steal all your gold
Lex Fridman (2:28:32.080)
and your tokens.
Lex Fridman (2:28:32.920)
So instead of you actually being able to swap these things,
Charles Hoskinson (2:28:34.740)
you've lost all your money.
Lex Fridman (2:28:36.340)
And there's other problems too.
Charles Hoskinson (2:28:37.420)
Like let's say Daisy has now come in
Lex Fridman (2:28:41.460)
and become a regulator and said,
Charles Hoskinson (2:28:42.820)
oh, I don't like these exchanges anymore.
Lex Fridman (2:28:44.380)
I'm just gonna shut them all down.
Charles Hoskinson (2:28:46.140)
Yeah, and then you have no access to it.
Lex Fridman (2:28:47.660)
So you have sovereign risk, you have the risk of threat,
Charles Hoskinson (2:28:50.060)
you have regulatory risk, you have the issue of banks
Lex Fridman (2:28:53.020)
maybe cutting you out.
Lex Fridman (2:28:54.380)
So it's been in our industry for more than 10 years.
Lex Fridman (2:28:57.280)
Mt. Gox was the most famous example of that.
Charles Hoskinson (2:28:59.560)
They collapsed, I believe in 2013
Lex Fridman (2:29:01.940)
and hundreds of millions of dollars was lost
Charles Hoskinson (2:29:05.040)
over the course of a while.
Lex Fridman (2:29:06.580)
So the point of a DEX is saying,
Charles Hoskinson (2:29:07.940)
can we do what a marketplace does,
Lex Fridman (2:29:10.940)
but not have Coinbase, not have a central actor
Lex Fridman (2:29:15.100)
run this thing?
Lex Fridman (2:29:15.940)
And there's a lot of problems with that
Charles Hoskinson (2:29:17.540)
because exchanges are generally creatures of latency.
Lex Fridman (2:29:21.980)
You know, high frequency trading, for example,
Charles Hoskinson (2:29:24.260)
the things that nanosecond,
Lex Fridman (2:29:25.580)
they co locate their infrastructure
Charles Hoskinson (2:29:27.580)
with the exchange software
Lex Fridman (2:29:28.860)
just so they can front run orders over other people.
Charles Hoskinson (2:29:31.420)
I mean, it's crazy the amount of technology that they put in.
Lex Fridman (2:29:34.500)
So the traditional Wall Street version of an exchange
Charles Hoskinson (2:29:37.460)
is very centralized, very fast, very optimized
Lex Fridman (2:29:40.380)
and kind of behaves by a very closed set of rules.
Charles Hoskinson (2:29:44.260)
When you look at a DEX, you have to accept
Lex Fridman (2:29:46.300)
that you're gonna have to have slightly different rules
Charles Hoskinson (2:29:48.940)
because you're operating in a global systems latency
Lex Fridman (2:29:52.500)
and you're operating in a system
Charles Hoskinson (2:29:53.660)
that has different behaviors.
Lex Fridman (2:29:55.260)
However, that said, there's a lot of great protocols
Charles Hoskinson (2:29:57.260)
that have been built for it.
Lex Fridman (2:29:58.100)
You know, Uniswap has kind of evolved a lot over the years
Lex Fridman (2:30:01.500)
and we've seen a huge competition
Lex Fridman (2:30:03.940)
and a lot of evolution to basically build out protocols
Charles Hoskinson (2:30:07.380)
that kind of excuse some of these security problems,
Lex Fridman (2:30:09.060)
enjoy high liquidity
Lex Fridman (2:30:10.540)
and then also have this beautiful concept of openness.
Lex Fridman (2:30:15.060)
One of the gatekeepers to crypto
Charles Hoskinson (2:30:16.500)
when you're a cryptocurrency developer are the exchanges.
Lex Fridman (2:30:19.220)
I remember when we first created Cardano,
Charles Hoskinson (2:30:21.020)
you know, the Bitfinex guys
Lex Fridman (2:30:23.140)
reached out to the Cardano Foundation.
Charles Hoskinson (2:30:24.580)
They said, oh, we'd be happy to list ADA.
Lex Fridman (2:30:26.820)
And I said, okay.
Lex Fridman (2:30:27.940)
And they said, yeah, we want $5 million to do it.
Lex Fridman (2:30:30.940)
You know, so there was kind of some Italian for go fuck
Charles Hoskinson (2:30:34.220)
yourself in those email conversations.
Lex Fridman (2:30:36.620)
Fuck, hula is what I said.
Lex Fridman (2:30:39.060)
But anyway, that kind of back and forth
Lex Fridman (2:30:41.780)
happens all the time.
Lex Fridman (2:30:42.860)
And because these guys are gatekeepers,
Lex Fridman (2:30:44.580)
they have this nepotistic control information asymmetries
Lex Fridman (2:30:47.540)
and so forth.
Lex Fridman (2:30:48.460)
So having a DEX, you don't have that problem.
Charles Hoskinson (2:30:50.700)
You have open listing
Lex Fridman (2:30:52.100)
and you basically just put the asset into it.
Lex Fridman (2:30:54.380)
And if anybody wants to trade it, they will.
Lex Fridman (2:30:56.860)
And if it seems like it's a good idea,
Charles Hoskinson (2:30:58.540)
a natural market will form, market making will occur
Lex Fridman (2:31:00.700)
and you get liquidity with it.
Lex Fridman (2:31:01.980)
So there's no barrier to entry for that type of system.
Lex Fridman (2:31:05.140)
The biggest existential problem for DEXs right now
Charles Hoskinson (2:31:08.700)
is the concept of regulation.
Lex Fridman (2:31:10.860)
So basically right now, when you use Binance or Coinbase
Charles Hoskinson (2:31:14.740)
or these other guys, you have to go through KYC and AML,
Lex Fridman (2:31:16.980)
know your customer and anti money laundering.
Lex Fridman (2:31:18.940)
So basically who are you and you know,
Lex Fridman (2:31:20.780)
is your money real or not,
Lex Fridman (2:31:22.180)
or are you a drug dealer or something?
Lex Fridman (2:31:24.220)
So normally you do that by saying, okay,
Charles Hoskinson (2:31:26.380)
I'm gonna give them my copy of my passport
Lex Fridman (2:31:29.100)
and maybe they're gonna request some tax records
Charles Hoskinson (2:31:31.220)
or whatever the best practices are
Lex Fridman (2:31:32.740)
for the particular jurisdiction.
Lex Fridman (2:31:34.580)
And then that exchange is liable if that's fucked up.
Lex Fridman (2:31:37.900)
So if the government comes in and says,
Charles Hoskinson (2:31:39.980)
hey guys, you know, pull your compliance records
Lex Fridman (2:31:43.340)
and they find discrepancies,
Charles Hoskinson (2:31:44.620)
they'll actually put the exchange out of business
Lex Fridman (2:31:46.380)
or fine them very heavily.
Charles Hoskinson (2:31:48.380)
JP Morgan Chase got $19 billion in fines
Lex Fridman (2:31:52.300)
over the last 20 years for various compliance issues
Charles Hoskinson (2:31:55.020)
amongst other things.
Lex Fridman (2:31:56.300)
So it's expensive, very difficult thing.
Lex Fridman (2:31:59.220)
And at DEX, it's open system.
Lex Fridman (2:32:01.420)
You just have value coming in, not identity.
Lex Fridman (2:32:03.660)
And so all these things are trading
Lex Fridman (2:32:04.980)
amongst anonymous accounts.
Lex Fridman (2:32:06.460)
And so there's no notion of compliance right now for that.
Lex Fridman (2:32:09.260)
So a lot of regulators are coming in and saying,
Charles Hoskinson (2:32:11.380)
oh, well, this is just a cesspool for terrorism
Lex Fridman (2:32:14.020)
and drug dealing and bad stuff.
Lex Fridman (2:32:15.340)
And they're word salad of bullshit.
Lex Fridman (2:32:18.260)
But you know, it is what it is.
Charles Hoskinson (2:32:19.140)
You have to deal with these guys.
Lex Fridman (2:32:20.340)
And so there's been a lot of discussions of,
Charles Hoskinson (2:32:22.580)
can we take DEXs and keep the openness
Lex Fridman (2:32:25.540)
and keep the liquidity
Lex Fridman (2:32:27.140)
and no counterpart or custodial risk?
Lex Fridman (2:32:29.820)
And can we add some notion of compliance to that
Charles Hoskinson (2:32:32.820)
in a decentralized way
Lex Fridman (2:32:33.980)
that doesn't require a single actor to be a gatekeeper?
Lex Fridman (2:32:37.260)
So I think actually by combining DIDs,
Lex Fridman (2:32:39.140)
decentralized identifiers, that's the way to do it.
Lex Fridman (2:32:41.140)
But it's actually the next generation of the technology
Lex Fridman (2:32:43.460)
is the regulated DEX and who regulates that,
Lex Fridman (2:32:46.300)
how does that work and so forth.
Lex Fridman (2:32:47.620)
But I think ultimately those are gonna be
Charles Hoskinson (2:32:48.980)
the only marketplaces that end up surviving
Lex Fridman (2:32:53.020)
in this current environment
Charles Hoskinson (2:32:54.140)
if your desire is to exit to a dollar.
Lex Fridman (2:32:56.500)
If you don't really care about the fiat side,
Charles Hoskinson (2:32:59.100)
like a traditional legacy currency,
Lex Fridman (2:33:01.020)
you can always do things in a shadowy, unregulated way.
Lex Fridman (2:33:05.340)
But I mean, it's a personal preference
Lex Fridman (2:33:07.740)
and a business preference.
Lex Fridman (2:33:08.980)
Can we kind of return to proof of work and proof of stake?
Lex Fridman (2:33:13.620)
There's just so many topics I wanna talk to you about.
Lex Fridman (2:33:15.780)
So I'll jump around a little bit.
Lex Fridman (2:33:17.740)
But at the Bitcoin conference, Jack Dorsey spoke,
Charles Hoskinson (2:33:21.460)
I think I believe he said Bitcoin changes everything.
Lex Fridman (2:33:25.020)
I think he made a video for Jack
Charles Hoskinson (2:33:27.340)
trying to explain different ideas to him.
Lex Fridman (2:33:30.140)
I guess describing the difference between proof of work
Lex Fridman (2:33:32.700)
and proof of stake as we've talked about.
Lex Fridman (2:33:35.100)
What do you hope Jack Dorsey comes to understand
Charles Hoskinson (2:33:37.140)
about the difference between proof of work
Lex Fridman (2:33:39.100)
and proof of stake?
Charles Hoskinson (2:33:40.660)
Well, I hope he understands it's just a resource.
Lex Fridman (2:33:42.860)
That's the entire point of the video I was trying to make
Charles Hoskinson (2:33:45.020)
is like, dude, you're like in this cult
Lex Fridman (2:33:47.380)
where you think the only way to be secure
Charles Hoskinson (2:33:49.060)
is proof of worker and somehow proof of stake
Lex Fridman (2:33:50.860)
is less secure than proof of work.
Charles Hoskinson (2:33:52.900)
I don't even know how you put those inequalities there
Lex Fridman (2:33:55.420)
because you're talking about apples and oranges.
Charles Hoskinson (2:33:57.660)
You're making different trade offs
Lex Fridman (2:33:59.500)
and there's different assumptions
Charles Hoskinson (2:34:00.500)
about the nature of the people involved,
Lex Fridman (2:34:02.700)
but the mechanics are the same.
Lex Fridman (2:34:04.620)
And so it's really more of a question of
Lex Fridman (2:34:06.700)
what type of system do you prefer?
Lex Fridman (2:34:08.500)
Do you want mercenaries guarding Rome
Lex Fridman (2:34:10.460)
or do you want Roman citizens guarding Rome?
Charles Hoskinson (2:34:13.100)
Okay, and as the Romans learn,
Lex Fridman (2:34:14.260)
it's better to have citizens usually doing that.
Charles Hoskinson (2:34:16.860)
Okay, and that's the only point I was trying to make
Lex Fridman (2:34:19.300)
to Dorsey and I don't think he watched it
Charles Hoskinson (2:34:22.500)
or particularly cared,
Lex Fridman (2:34:24.420)
but it was more of a video for everyone.
Lex Fridman (2:34:26.660)
And to start that dialogue of realizing
Lex Fridman (2:34:29.380)
that the real game is not,
Lex Fridman (2:34:31.260)
is proof of stake better than proof of work?
Lex Fridman (2:34:33.380)
It's how do we go from one to end and what should end be?
Charles Hoskinson (2:34:36.420)
You just mentioned that semantical addressable web,
Lex Fridman (2:34:38.700)
going back to IPFS and these other concepts.
Charles Hoskinson (2:34:41.780)
Well, how do you pay for the enormous burden
Lex Fridman (2:34:44.660)
of storing that much data?
Charles Hoskinson (2:34:46.220)
You can create a consensus protocol for it.
Lex Fridman (2:34:48.180)
There actually is one.
Charles Hoskinson (2:34:49.020)
It's called Permacoin, came out in 2014, 15.
Lex Fridman (2:34:51.860)
Andrew Miller wrote it and a few other authors.
Charles Hoskinson (2:34:54.460)
I think John Katz may have been an author as well.
Lex Fridman (2:34:57.900)
But basically it was just a throwaway
Charles Hoskinson (2:35:00.100)
proof of work style algorithm
Lex Fridman (2:35:02.020)
that only works if you have large amounts of data.
Charles Hoskinson (2:35:05.620)
Okay, so it's like your miner
Lex Fridman (2:35:07.460)
is like a hard drive effectively.
Charles Hoskinson (2:35:09.700)
Proof of storage, I think you call it.
Lex Fridman (2:35:11.220)
Yeah, this type of stuff.
Lex Fridman (2:35:12.780)
And there's been since then many iterations,
Lex Fridman (2:35:14.700)
evolutions of that type of protocol.
Lex Fridman (2:35:17.020)
Okay, so what if you throw that into your resource back?
Lex Fridman (2:35:20.220)
Now you have a capacity in your system
Charles Hoskinson (2:35:22.580)
for storing huge amounts of information.
Lex Fridman (2:35:24.900)
That's incentivized by the way the system works.
Lex Fridman (2:35:26.940)
And you can balance that with a proof of stake system.
Lex Fridman (2:35:29.300)
And you can balance that with,
Charles Hoskinson (2:35:31.260)
let's say you have proof of useful computation.
Lex Fridman (2:35:33.900)
We may have a paper on that, who knows, coming soon.
Lex Fridman (2:35:37.380)
And what if you have a proof of useful computation
Lex Fridman (2:35:39.340)
where maybe you can do walk stat or something, who knows?
Charles Hoskinson (2:35:41.700)
With something like that, okay,
Lex Fridman (2:35:43.180)
well now you have three resources inside your system
Lex Fridman (2:35:45.780)
and those three things keep your system secure.
Lex Fridman (2:35:47.740)
They keep each other balanced.
Lex Fridman (2:35:48.740)
And they just so happen to create
Lex Fridman (2:35:50.300)
the world's largest supercomputer that's programmable.
Lex Fridman (2:35:53.060)
And it just so happens to create
Lex Fridman (2:35:54.260)
the world's largest database that's programmable.
Charles Hoskinson (2:35:56.700)
In addition to having a shareholder style model
Lex Fridman (2:35:59.620)
for ownership inside of it,
Charles Hoskinson (2:36:00.740)
to kind of balance these things out.
Lex Fridman (2:36:02.100)
So people care about the appreciation of value
Charles Hoskinson (2:36:04.300)
inside the system.
Lex Fridman (2:36:05.500)
So that was my point to Jack is,
Lex Fridman (2:36:07.340)
you're a business guy, why are you betting all your eggs?
Lex Fridman (2:36:09.780)
And one crazy model that's a cult step away
Lex Fridman (2:36:13.100)
and realize that that does something.
Lex Fridman (2:36:14.940)
It's a tool, but saws aren't the only tool in the toolbox.
Charles Hoskinson (2:36:18.420)
There's hammers and screwdrivers and other things.
Lex Fridman (2:36:20.780)
Go to end resources.
Lex Fridman (2:36:22.140)
And let's have a real conversation about
Lex Fridman (2:36:24.100)
what would a world computer or a world infrastructure
Charles Hoskinson (2:36:27.020)
that's useful for your business domain,
Lex Fridman (2:36:28.900)
in his case, Twitter, require?
Lex Fridman (2:36:31.580)
And what type of resources would you need
Lex Fridman (2:36:33.220)
for such a thing?
Charles Hoskinson (2:36:34.140)
Well, in this case, Square, more importantly.
Lex Fridman (2:36:36.420)
Currently, if you look at Square and Cash App,
Charles Hoskinson (2:36:38.260)
they support Bitcoin.
Lex Fridman (2:36:41.100)
He is kind of all in on the proof of work idea.
Charles Hoskinson (2:36:44.260)
Not all in, but currently kind of,
Lex Fridman (2:36:46.380)
that's the one supported idea.
Charles Hoskinson (2:36:48.580)
I guess there's not just a tip in proof of work.
Lex Fridman (2:36:51.180)
I love you so much, Charles.
Charles Hoskinson (2:36:54.260)
Thank you, I appreciate this.
Lex Fridman (2:36:57.500)
But I'm not gonna run with that,
Charles Hoskinson (2:37:00.220)
even though I'm tempted to.
Lex Fridman (2:37:02.220)
But looking forward, do you hope Cardano
Lex Fridman (2:37:05.980)
becomes part of Cash App?
Lex Fridman (2:37:07.860)
I mean, he's a business guy, or at least I'd hope he is,
Lex Fridman (2:37:10.540)
and it's not about what I want or what he wants,
Lex Fridman (2:37:13.020)
it's about what markets want.
Charles Hoskinson (2:37:14.620)
When you run a publicly traded company,
Lex Fridman (2:37:16.660)
you have fiduciary obligation to your shareholders
Charles Hoskinson (2:37:18.660)
to maximize the utility, sustainability,
Lex Fridman (2:37:21.820)
and value of your company.
Lex Fridman (2:37:23.460)
And so if he's running a company
Lex Fridman (2:37:26.500)
that makes money off of these things,
Charles Hoskinson (2:37:28.340)
it makes absolutely no sense to be a maximalist.
Lex Fridman (2:37:30.980)
You want transaction volume,
Charles Hoskinson (2:37:32.220)
that's how you make your damn money.
Lex Fridman (2:37:33.620)
Coinbase was the same way.
Charles Hoskinson (2:37:34.700)
They were very maximalist in the beginning.
Lex Fridman (2:37:36.940)
Very quickly, they started realizing,
Charles Hoskinson (2:37:38.420)
hey, we're losing a lot of money.
Lex Fridman (2:37:39.940)
If we wanna IPO, we kinda need to be a bit more diverse.
Charles Hoskinson (2:37:43.340)
Eric Voorhees was also a maximalist way back today.
Lex Fridman (2:37:46.140)
Now look at Eric, he's got ShapeShift
Lex Fridman (2:37:47.780)
and all these other pieces of infrastructure.
Lex Fridman (2:37:49.940)
He's a lot more friendly with us alties.
Lex Fridman (2:37:52.420)
So Jack will make that decision,
Lex Fridman (2:37:55.140)
his people will make that decision, I think,
Charles Hoskinson (2:37:56.940)
based on market dynamics, transaction volume,
Lex Fridman (2:37:59.300)
and value to the user.
Lex Fridman (2:38:01.540)
And if the concern is actually legitimately security,
Lex Fridman (2:38:04.660)
then the only question I'd ask their team is,
Lex Fridman (2:38:06.660)
can you please provide me a definition of what?
Lex Fridman (2:38:09.420)
Doing POW is more secure than proof of stake as a tweet
Lex Fridman (2:38:14.900)
is not really a proof, okay?
Lex Fridman (2:38:16.340)
You need to actually come out and sit down
Lex Fridman (2:38:17.900)
and say, what is your security model?
Lex Fridman (2:38:19.460)
What do you care about?
Lex Fridman (2:38:20.540)
What do you value?
Lex Fridman (2:38:21.380)
What's the problems you're concerned about proof of stake?
Lex Fridman (2:38:23.940)
And they never really get there.
Lex Fridman (2:38:25.420)
And that's why I call this maximalist like a religion
Charles Hoskinson (2:38:28.420)
because it's just like saying,
Lex Fridman (2:38:30.580)
the angels descended from the heavens.
Lex Fridman (2:38:32.340)
And it's like, well, how do you know?
Lex Fridman (2:38:33.260)
Well, because the Bible said so, or this doctrine said so.
Lex Fridman (2:38:36.180)
It's like, well, that's your evidence?
Lex Fridman (2:38:37.540)
Somebody wrote something down.
Lex Fridman (2:38:39.540)
Can you please give me a little bit more?
Lex Fridman (2:38:41.140)
They say, no, you're challenging the word of God.
Charles Hoskinson (2:38:43.580)
In this case, you're challenging the word of Satoshi.
Lex Fridman (2:38:45.980)
And all I ask for is just what is the burden of proof?
Charles Hoskinson (2:38:48.340)
We wrote the papers, we have security models,
Lex Fridman (2:38:50.700)
we went through the peer review process.
Charles Hoskinson (2:38:52.060)
God, that was not easy.
Lex Fridman (2:38:53.780)
We wrote formal specifications.
Charles Hoskinson (2:38:55.420)
In some cases, we formalize those specifications
Lex Fridman (2:38:57.580)
with Isabel, for God's sakes, which is not easy to do.
Lex Fridman (2:39:00.900)
And then we implemented it.
Lex Fridman (2:39:01.980)
And it's running in production with a million users
Charles Hoskinson (2:39:04.300)
at a $50 billion market cap.
Lex Fridman (2:39:06.180)
I mean, at what point do you start saying,
Lex Fridman (2:39:08.940)
well, maybe there's something there?
Lex Fridman (2:39:11.060)
And they say, no, there's nothing there,
Lex Fridman (2:39:12.700)
and it's not secure, it can't be secure.
Lex Fridman (2:39:14.300)
And you say, okay, then why do you believe what you believe?
Lex Fridman (2:39:17.220)
And they never come back to me with an answer, ever.
Lex Fridman (2:39:19.900)
Well, I believe God didn't go through a peer review process
Charles Hoskinson (2:39:22.380)
when he wrote the 10 commandments.
Lex Fridman (2:39:23.620)
So sometimes it works out, sometimes not.
Charles Hoskinson (2:39:28.060)
Let me ask on that same thread,
Lex Fridman (2:39:31.100)
Tesla, SpaceX, Elon Musk currently invested in Bitcoin,
Lex Fridman (2:39:34.940)
but are openly looking
Lex Fridman (2:39:36.460)
to explore other cryptocurrency investments.
Lex Fridman (2:39:39.580)
What case would you make for Cardano?
Lex Fridman (2:39:41.940)
Well, if they truly care about alternative energy
Lex Fridman (2:39:43.900)
and sustainability, carbon reduction or carbon neutrality,
Lex Fridman (2:39:47.780)
you can't be in a system
Charles Hoskinson (2:39:49.860)
where there is no built in mechanism
Lex Fridman (2:39:53.060)
to constrain the energy consumption.
Charles Hoskinson (2:39:55.420)
With proof of stake, energy consumption is a negative.
Lex Fridman (2:39:58.900)
You wanna minimize it.
Charles Hoskinson (2:39:59.980)
If you can get the same amount of stuff done
Lex Fridman (2:40:01.740)
on a Raspberry Pi as you can a big server,
Charles Hoskinson (2:40:03.780)
you're gonna do it on the Pi
Lex Fridman (2:40:05.220)
because ultimately that server cost
Lex Fridman (2:40:07.100)
and that energy cost is coming out of your budget.
Lex Fridman (2:40:09.340)
With proof of work, any innovation you come up with
Charles Hoskinson (2:40:12.020)
to optimize power, you just build more ASICs
Lex Fridman (2:40:16.300)
because it's always 30% more power efficient.
Charles Hoskinson (2:40:18.780)
Great, buy 30% more.
Lex Fridman (2:40:20.980)
You keep adding to the work set
Charles Hoskinson (2:40:23.900)
because you want more hash power,
Lex Fridman (2:40:25.380)
more hash power, more share of the Pi.
Lex Fridman (2:40:27.860)
So you have no energy savings component.
Lex Fridman (2:40:30.180)
I know these people are saying,
Charles Hoskinson (2:40:31.020)
well, there's a lot of wasted energy in the grid
Lex Fridman (2:40:33.500)
and this is kind of incentivizing
Charles Hoskinson (2:40:35.700)
using that wasted energy
Lex Fridman (2:40:37.300)
and it's a better way of storing it than batteries
Charles Hoskinson (2:40:39.460)
because you're now storing it as a Bitcoin
Lex Fridman (2:40:41.140)
instead of storing it as energy.
Charles Hoskinson (2:40:42.620)
Okay, maybe there's some truth to that,
Lex Fridman (2:40:44.660)
but anyway, it's just...
Charles Hoskinson (2:40:47.740)
The energy is a critical point for you.
Lex Fridman (2:40:50.140)
Like the...
Charles Hoskinson (2:40:50.980)
Yeah, that's exactly right.
Lex Fridman (2:40:52.540)
The energy is a critical point for me with Tesla
Charles Hoskinson (2:40:55.740)
because they assert to be an alternative energy company.
Lex Fridman (2:40:58.940)
And unless they can make the case
Charles Hoskinson (2:41:00.660)
that somehow the proliferation of Bitcoin
Lex Fridman (2:41:02.300)
is legitimately going to proliferate batteries,
Charles Hoskinson (2:41:04.460)
solar and wind or other things,
Lex Fridman (2:41:06.940)
then it's probably good for them to just focus
Charles Hoskinson (2:41:09.300)
on the most efficient,
Lex Fridman (2:41:11.020)
energy efficient cryptocurrency possible.
Charles Hoskinson (2:41:13.140)
Otherwise you're exacerbating global warming,
Lex Fridman (2:41:15.300)
you're exacerbating the ecological consequences of it.
Charles Hoskinson (2:41:18.180)
The other thing is Bitcoin is the least programmable
Lex Fridman (2:41:20.380)
of all the cryptocurrencies.
Lex Fridman (2:41:21.700)
And if you wanna do interesting, sexy, unique things,
Lex Fridman (2:41:24.300)
let's say Tesla, for example,
Charles Hoskinson (2:41:26.540)
they wanna start doing V to I and V to V
Lex Fridman (2:41:28.460)
for autonomous vehicles
Lex Fridman (2:41:30.900)
and have the vehicles start talking to each other
Lex Fridman (2:41:32.540)
and connect it to 5G.
Charles Hoskinson (2:41:33.940)
Well, imagine if you wanna build a telco coin
Lex Fridman (2:41:35.820)
or some sort of 5G coin
Lex Fridman (2:41:37.700)
and you wanna build an IOT layer network,
Lex Fridman (2:41:40.380)
there's just no real way to do that on Bitcoin
Charles Hoskinson (2:41:42.860)
with the way it's designed.
Lex Fridman (2:41:44.180)
So you'd need fundamentally different infrastructure
Charles Hoskinson (2:41:46.500)
to create such a token and regulate such a system
Lex Fridman (2:41:49.500)
and have these things autonomously negotiate
Lex Fridman (2:41:52.020)
and do business with each other.
Lex Fridman (2:41:52.940)
You need DEXs and stable coins and all kinds of mechanics
Charles Hoskinson (2:41:56.380)
to make something like that possible.
Lex Fridman (2:41:58.380)
Well, that's really beneficial to Tesla
Charles Hoskinson (2:42:00.180)
if they could figure that out
Lex Fridman (2:42:01.620)
because they could create
Charles Hoskinson (2:42:02.460)
like an information sharing incentive scheme
Lex Fridman (2:42:04.340)
where if the cars talk to each other,
Charles Hoskinson (2:42:05.700)
including other branded cars, like GM cars and Fords,
Lex Fridman (2:42:08.900)
they can now actually get data from those cars
Charles Hoskinson (2:42:10.940)
through a marketplace in exchange
Lex Fridman (2:42:12.540)
for the benefit of autonomous driving
Charles Hoskinson (2:42:14.420)
or for the benefit of understanding road conditions
Lex Fridman (2:42:16.380)
or safety enhancement and so forth.
Lex Fridman (2:42:18.220)
So it's just depending, are you just here to speculate?
Lex Fridman (2:42:20.620)
Are you here to actually use it as another medium of exchange
Charles Hoskinson (2:42:23.660)
or do you actually wanna build infrastructure
Lex Fridman (2:42:25.540)
on this thing?
Charles Hoskinson (2:42:26.420)
The more closely you get to utility,
Lex Fridman (2:42:29.060)
the further down the road you get there,
Charles Hoskinson (2:42:31.300)
then the more programmability you need.
Lex Fridman (2:42:33.700)
And so it makes a lot more sense to be an Ethereum fan
Charles Hoskinson (2:42:36.260)
or a Cardano fan than to be a Bitcoin fan.
Lex Fridman (2:42:38.900)
So to be both proof of stake
Lex Fridman (2:42:40.780)
and have the smart contracts capabilities.
Lex Fridman (2:42:42.740)
Yes.
Lex Fridman (2:42:43.980)
And that's why we went over to Ethereum
Lex Fridman (2:42:45.340)
because they're proof of work.
Charles Hoskinson (2:42:47.820)
You mentioned God, God spelled backwards as dog.
Lex Fridman (2:42:52.300)
How's that for a transition?
Lex Fridman (2:42:53.980)
And Elon Musk and Tesla are at least a little bit curious
Lex Fridman (2:42:59.060)
about a coin called Dogecoin.
Charles Hoskinson (2:43:02.460)
You made a video directed to Elon
Lex Fridman (2:43:04.340)
on how to improve Dogecoin.
Lex Fridman (2:43:06.300)
What are your ideas for making Dogecoin even better
Lex Fridman (2:43:10.740)
than it already is?
Charles Hoskinson (2:43:12.900)
Well, Dogecoin is just based,
Lex Fridman (2:43:14.540)
it's like that Nine Inch Nails song,
Charles Hoskinson (2:43:16.460)
a copy of a copy of a copy.
Lex Fridman (2:43:18.020)
Yeah, it's just a copy of a copy.
Charles Hoskinson (2:43:19.540)
It's a Bitcoin gave Litecoin Litecoin.
Lex Fridman (2:43:22.540)
Bitcoin gave Litecoin Litecoin gave Dogecoin.
Lex Fridman (2:43:25.060)
And it was kind of a parody cryptocurrency.
Lex Fridman (2:43:26.820)
And I think Jackson was trying to do it
Charles Hoskinson (2:43:28.540)
to like prove a point about altcoins.
Lex Fridman (2:43:30.380)
And then true to form, it's like nobody got the doctrine
Lex Fridman (2:43:33.540)
and completely perverted the entire religion.
Lex Fridman (2:43:35.500)
It's almost like the emperor of man and Warhammer 40K.
Charles Hoskinson (2:43:37.900)
It was like this atheist don't worship me.
Lex Fridman (2:43:39.660)
And now there's like this whole religion
Charles Hoskinson (2:43:41.220)
built around the emperor.
Lex Fridman (2:43:42.740)
So Dogecoin has become a thing
Lex Fridman (2:43:44.940)
and it's become such a large thing
Lex Fridman (2:43:46.660)
that it is a reasonable target for somebody
Charles Hoskinson (2:43:49.140)
to fix it up and repair it,
Lex Fridman (2:43:50.420)
make it an interesting cryptocurrency.
Charles Hoskinson (2:43:52.580)
The point of the video was to show
Lex Fridman (2:43:54.460)
what a modern third generation cryptocurrency
Charles Hoskinson (2:43:56.540)
really would require.
Lex Fridman (2:43:57.820)
It's a major overhaul.
Lex Fridman (2:43:59.020)
And there are already people doing this.
Lex Fridman (2:44:01.100)
There's the Solanas and the Harmony Ones
Lex Fridman (2:44:03.380)
and the Cardanos, Neoses and all these other guys.
Lex Fridman (2:44:05.580)
And they have billions of dollars and huge dev teams
Lex Fridman (2:44:08.340)
and all these innovative protocols.
Lex Fridman (2:44:10.020)
If you're really serious about this thing,
Charles Hoskinson (2:44:11.620)
sticking around, being useful in doing stuff,
Lex Fridman (2:44:15.300)
then the point of the video was to show
Charles Hoskinson (2:44:16.820)
the types of things you'd have to think about
Lex Fridman (2:44:18.860)
and the types of papers that are all open source,
Charles Hoskinson (2:44:21.380)
patent free and don't have any notion
Lex Fridman (2:44:23.700)
of intellectual property behind them
Charles Hoskinson (2:44:25.140)
that his engineers could grab and go and do.
Lex Fridman (2:44:28.140)
And he did mention on Twitter
Charles Hoskinson (2:44:29.940)
that he was looking for feedback on how to improve Doge.
Lex Fridman (2:44:32.660)
And so I said, all right,
Charles Hoskinson (2:44:33.500)
well, I'll just put all these things together.
Lex Fridman (2:44:35.500)
It was a little tongue in cheek
Charles Hoskinson (2:44:36.660)
because I figured he'd ignore it,
Lex Fridman (2:44:38.660)
but it was also showing how hard it is
Charles Hoskinson (2:44:41.220)
to innovate in this entire space.
Lex Fridman (2:44:43.180)
You don't just go and say,
Charles Hoskinson (2:44:44.380)
I'm gonna go build a battery powered car
Lex Fridman (2:44:46.540)
or rocket or enter a new industry.
Charles Hoskinson (2:44:48.500)
It's really hard to do that.
Lex Fridman (2:44:49.980)
You spend years and lots of effort.
Charles Hoskinson (2:44:52.220)
You have to do series of small learning steps.
Lex Fridman (2:44:54.540)
You have to pick up destroyed rockets
Charles Hoskinson (2:44:56.420)
on the side of the beach and things like that
Lex Fridman (2:44:58.220)
before you get to the rocket landing itself.
Charles Hoskinson (2:45:00.860)
Well, analogously,
Lex Fridman (2:45:01.860)
it's really hard to build a cryptocurrency.
Charles Hoskinson (2:45:04.860)
Satoshi probably spent years thinking carefully
Lex Fridman (2:45:08.420)
and that work was a derivative of 30 years of work
Charles Hoskinson (2:45:11.420)
in the digital asset space starting in the 1980s,
Lex Fridman (2:45:13.900)
working its way through.
Charles Hoskinson (2:45:15.380)
So, and then Bitcoin only did very limited things
Lex Fridman (2:45:18.500)
relative to what Ethereum can do
Charles Hoskinson (2:45:20.100)
or Cardano can do and so forth.
Lex Fridman (2:45:22.100)
So the minute that you extend that complexity,
Charles Hoskinson (2:45:24.420)
you're talking about years of R&D,
Lex Fridman (2:45:26.140)
years of engineering effort that needs to be done.
Lex Fridman (2:45:28.660)
So what's the point of Doge?
Lex Fridman (2:45:30.140)
Is it just a meme?
Lex Fridman (2:45:32.140)
Is it actually contending to be useful?
Lex Fridman (2:45:34.500)
Or is it competing as a store of value against Bitcoin?
Charles Hoskinson (2:45:37.860)
Now, if it's competing as a store of value against Bitcoin,
Lex Fridman (2:45:39.820)
why the hell does it have the monetary policy it does?
Charles Hoskinson (2:45:42.740)
Also, there's predatory distribution
Lex Fridman (2:45:44.540)
of the underlying asset.
Charles Hoskinson (2:45:45.700)
Over 90 some percent is consolidated,
Lex Fridman (2:45:48.020)
less than 1% of the holders for Dogecoin
Charles Hoskinson (2:45:50.740)
at a very, very low price point.
Lex Fridman (2:45:52.820)
So they can sell at almost any price point
Lex Fridman (2:45:55.020)
and make a profit.
Lex Fridman (2:45:56.340)
So it hits 50 cents, they're billionaires
Lex Fridman (2:45:59.140)
and it's not like 20,000 people.
Lex Fridman (2:46:02.580)
It's probably less than 100 wallets
Charles Hoskinson (2:46:04.340)
that have that distribution.
Lex Fridman (2:46:05.780)
So there's this existential ticking time bomb
Charles Hoskinson (2:46:07.820)
that's in Doge that once the guys who are invested
Lex Fridman (2:46:10.500)
start selling, they can just keep selling
Lex Fridman (2:46:12.580)
and keep selling and ride it all the way down
Lex Fridman (2:46:14.300)
and make windfall profits regardless
Charles Hoskinson (2:46:15.860)
of what price they sell at.
Lex Fridman (2:46:16.700)
And who are they selling against?
Charles Hoskinson (2:46:18.060)
The retail investors.
Lex Fridman (2:46:20.660)
People make $500, spare money a month
Charles Hoskinson (2:46:23.900)
or something like that.
Lex Fridman (2:46:25.060)
And it bothers me because I see it in my community.
Lex Fridman (2:46:27.540)
So I live in Longmont, Colorado,
Lex Fridman (2:46:29.860)
and I was at a restaurant and I was talking to the waitress
Lex Fridman (2:46:32.700)
and she asked me what business I was in.
Lex Fridman (2:46:34.260)
I said, I'm in the cryptocurrency space.
Lex Fridman (2:46:35.740)
And she's like, what is that?
Lex Fridman (2:46:36.780)
And I started explaining all of it.
Lex Fridman (2:46:37.860)
And she goes, oh, yeah, I own some Dogecoin.
Lex Fridman (2:46:41.300)
I said, you own anything else?
Charles Hoskinson (2:46:42.580)
No, no, I just bought some Doge.
Lex Fridman (2:46:43.820)
Why did you buy Doge?
Charles Hoskinson (2:46:44.740)
Oh, I saw Elon tweeting about it
Lex Fridman (2:46:46.980)
and I thought it was a good deal.
Lex Fridman (2:46:48.940)
So when you see stuff like that
Lex Fridman (2:46:50.540)
where people have no clue what they're doing,
Charles Hoskinson (2:46:52.500)
they don't really understand the supply dynamics,
Lex Fridman (2:46:55.020)
the ownership dynamics and these types of things.
Lex Fridman (2:46:57.380)
And then when the clock stops,
Lex Fridman (2:47:00.260)
they're the ones who get hurt.
Lex Fridman (2:47:02.020)
And then the regulator comes in,
Lex Fridman (2:47:03.260)
the Elizabeth Warrens of the world,
Lex Fridman (2:47:04.660)
and they say, see, this is an evidence
Lex Fridman (2:47:06.620)
these guys can't regulate themselves, control themselves.
Charles Hoskinson (2:47:09.220)
We need to control everything.
Lex Fridman (2:47:10.860)
Either let's ban it or let's just announce
Charles Hoskinson (2:47:13.060)
that the only three are legitimate
Lex Fridman (2:47:14.580)
and every one of them has to be connected
Charles Hoskinson (2:47:16.780)
to identity and rah, rah, rah.
Lex Fridman (2:47:18.780)
And I'm just very concerned that that's a bad thing to do.
Lex Fridman (2:47:22.220)
And that's why I've been so vocal about this topic.
Lex Fridman (2:47:24.860)
And my hope is that a compromise can be made
Charles Hoskinson (2:47:27.740)
where real developers come in and they start working on Doge
Lex Fridman (2:47:30.580)
and they find a way to create some sort of use
Lex Fridman (2:47:32.300)
and utility for it.
Lex Fridman (2:47:33.460)
So at least it has a value floor and it won't collapse.
Charles Hoskinson (2:47:37.300)
Is it possible for Cardano and Dogecoin
Lex Fridman (2:47:39.420)
to work together somehow?
Charles Hoskinson (2:47:40.740)
Yeah, it'd be a lot of fun.
Lex Fridman (2:47:42.740)
I'm not adverse to the idea of cleaning up the code base,
Lex Fridman (2:47:45.660)
but legitimately, whoever comes in,
Lex Fridman (2:47:47.940)
be two years or three years of work,
Charles Hoskinson (2:47:50.500)
because you have to do real stuff.
Lex Fridman (2:47:51.860)
And that code is like Litecoin circa 2012, 2013.
Charles Hoskinson (2:47:56.740)
Well, the interesting thing about Elon,
Lex Fridman (2:47:58.540)
and I've got to interact with him quite a bit,
Charles Hoskinson (2:48:00.380)
that combination of humor and extreme ambition,
Lex Fridman (2:48:04.620)
like in the face of impossible odds
Charles Hoskinson (2:48:06.580)
is something he does really well.
Lex Fridman (2:48:08.380)
And so I think that's the spirit of Dogecoin
Charles Hoskinson (2:48:12.220)
is fun and almost like bold, ambitious innovation.
Lex Fridman (2:48:19.300)
And so I think you can't discount the power of that.
Lex Fridman (2:48:22.260)
But where's the innovation?
Lex Fridman (2:48:23.340)
What's the agenda?
Charles Hoskinson (2:48:24.180)
Well, this is step one.
Lex Fridman (2:48:25.220)
What's going to Mars for Dogecoin?
Charles Hoskinson (2:48:27.620)
Well, I mean, he came in the same way to Ruckus.
Lex Fridman (2:48:31.300)
He came in the same way to Electric Cars.
Charles Hoskinson (2:48:34.620)
It seemed impossible at first,
Lex Fridman (2:48:37.500)
but you step in and you solve the problems,
Charles Hoskinson (2:48:39.700)
first principles one at a time.
Lex Fridman (2:48:41.660)
But I'll tell you a little bit on this,
Charles Hoskinson (2:48:43.860)
because I think he had some trends
Lex Fridman (2:48:45.500)
that he was very smart to recognize.
Charles Hoskinson (2:48:47.180)
In the case of battery powered cars,
Lex Fridman (2:48:48.420)
he said, hang on, everybody has tablets and cell phones
Lex Fridman (2:48:50.580)
and these other things.
Lex Fridman (2:48:51.460)
And there's an incentive to make batteries better,
Charles Hoskinson (2:48:54.140)
faster, cheaper, and charge faster.
Lex Fridman (2:48:56.180)
And that's connected to mobile computing.
Lex Fridman (2:48:57.900)
So regardless if you want battery powered cars or not,
Lex Fridman (2:49:01.220)
every year you have billions of dollars of R&D
Charles Hoskinson (2:49:03.780)
being pushed to force this capacity to evolve.
Lex Fridman (2:49:07.420)
And he's just getting on the train
Lex Fridman (2:49:08.780)
and piggybacking on that.
Lex Fridman (2:49:10.300)
So that was a brilliant business acumen to recognize that.
Charles Hoskinson (2:49:12.940)
In the case of SpaceX, it was just an obvious question.
Lex Fridman (2:49:15.500)
If every time you get on a plane,
Charles Hoskinson (2:49:16.580)
you have to throw the plane away, no one would fly.
Lex Fridman (2:49:19.420)
So reusability is like a fundamental thing
Charles Hoskinson (2:49:22.420)
that if you solve that,
Lex Fridman (2:49:23.740)
you've now opened space up
Charles Hoskinson (2:49:25.260)
to a complete new class of commercialization.
Lex Fridman (2:49:27.940)
I don't see the problem in Dogecoin,
Charles Hoskinson (2:49:29.940)
because if he was looking for it,
Lex Fridman (2:49:31.180)
then why not look at a real platform
Lex Fridman (2:49:33.100)
actually trying to solve a real problem?
Lex Fridman (2:49:35.340)
There are so many of them.
Charles Hoskinson (2:49:37.300)
He can throw a rock, he can hit 15 of these guys
Lex Fridman (2:49:39.700)
and they'd all die to work with you at Musk.
Charles Hoskinson (2:49:42.180)
Yeah, that's very interesting.
Lex Fridman (2:49:43.220)
I mean, so first I could continue pushing back
Charles Hoskinson (2:49:45.940)
on your intuition about electric cars
Lex Fridman (2:49:48.740)
and batteries and so on.
Charles Hoskinson (2:49:49.580)
I don't think it's more obvious in retrospect
Lex Fridman (2:49:51.980)
than it is at the time, I would say,
Charles Hoskinson (2:49:55.180)
because I would agree with you on the batteries front,
Lex Fridman (2:49:57.500)
I wouldn't necessarily agree with you with the electric car
Charles Hoskinson (2:50:00.060)
because first of all,
Lex Fridman (2:50:01.140)
nobody started a successful car company for decades.
Charles Hoskinson (2:50:04.220)
Well, but it was the loyalty,
Lex Fridman (2:50:05.580)
the EV4 guys or whatever it was with GM,
Charles Hoskinson (2:50:08.500)
they didn't wanna give them back
Lex Fridman (2:50:09.900)
when they hit the lease program.
Lex Fridman (2:50:11.660)
So there's some basic intuition
Lex Fridman (2:50:13.540)
that there is some hunger here,
Lex Fridman (2:50:14.940)
but it's not obvious that you can do it successfully.
Lex Fridman (2:50:17.220)
And with relaunching rockets for cheap,
Charles Hoskinson (2:50:19.780)
that sounds good on paper, but to do it well,
Lex Fridman (2:50:22.820)
NASA is spending way more money for this.
Lex Fridman (2:50:25.380)
And the Russians were assholes, not selling any rocket.
Lex Fridman (2:50:29.540)
Like you said, you have to do it all yourself from scratch.
Lex Fridman (2:50:31.540)
How do you build the team?
Lex Fridman (2:50:33.140)
How do you launch rockets when if you fail a few times,
Lex Fridman (2:50:38.100)
you're gonna go bankrupt?
Lex Fridman (2:50:39.500)
I mean, it's just business wise,
Charles Hoskinson (2:50:41.060)
I would rather build an app like Angry Birds.
Lex Fridman (2:50:43.220)
Oh yeah, yeah, he's got it.
Charles Hoskinson (2:50:44.700)
Launch rockets.
Lex Fridman (2:50:45.540)
You gotta give him credit.
Charles Hoskinson (2:50:46.380)
He's got boulders for balls.
Lex Fridman (2:50:47.500)
I'm good for that.
Charles Hoskinson (2:50:49.460)
That's a good picture.
Lex Fridman (2:50:50.300)
Yeah, thank you for that.
Lex Fridman (2:50:52.260)
But I don't, maybe that's what, I mean,
Lex Fridman (2:50:57.020)
I think there's not enough first principle thinking
Charles Hoskinson (2:50:59.580)
on the cryptocurrency side.
Lex Fridman (2:51:00.820)
I think I agree with you on that.
Lex Fridman (2:51:02.580)
But there's some aspect to which the seriousness
Lex Fridman (2:51:06.420)
of the cryptocurrency world is paralyzing.
Lex Fridman (2:51:09.660)
So in some way, the innovation that you spoke to
Lex Fridman (2:51:14.380)
requires taking risks,
Charles Hoskinson (2:51:16.660)
requires not taking everything so seriously,
Lex Fridman (2:51:19.060)
like being afraid to take those bold risks
Charles Hoskinson (2:51:21.260)
in the space of ideas, not in the space of financials.
Lex Fridman (2:51:24.140)
So in that way, I think that's one pro for Bitcoin
Charles Hoskinson (2:51:29.940)
is there's room, it's hungry for innovation.
Lex Fridman (2:51:33.780)
But I think Cardano in that same way
Charles Hoskinson (2:51:35.220)
is hungry for innovation, just like as you said,
Lex Fridman (2:51:37.740)
with some more rigor and formalism behind it.
Charles Hoskinson (2:51:41.700)
I mean, even Ethereum has a hunger for innovation.
Lex Fridman (2:51:45.020)
That's where Bitcoin is a little bit more,
Charles Hoskinson (2:51:47.900)
I would say conservative in terms of how much innovating
Lex Fridman (2:51:50.140)
they're willing to do,
Charles Hoskinson (2:51:51.700)
in terms of the incentives they built into the systems
Lex Fridman (2:51:54.300)
for the evolution of the cryptocurrency.
Lex Fridman (2:51:57.220)
But yeah, I mean, it's difficult to psychoanalyze
Lex Fridman (2:52:00.780)
why Dogecoin is the thing that excites Elon so much.
Lex Fridman (2:52:04.820)
But at the same time, there's some power to the fun.
Lex Fridman (2:52:09.220)
It sounds ridiculous to say.
Lex Fridman (2:52:11.380)
But the fun, this idea that
Lex Fridman (2:52:17.220)
the most entertaining outcome is the most likely.
Charles Hoskinson (2:52:21.580)
There could be something built into the physics
Lex Fridman (2:52:23.700)
of the universe that makes that true.
Charles Hoskinson (2:52:25.820)
Because the viral nature of fun has power.
Lex Fridman (2:52:30.820)
A fun has power.
Charles Hoskinson (2:52:34.380)
Well, it's a neuroscience thing.
Lex Fridman (2:52:35.980)
We like dopamine, we like these chemicals in our brain.
Lex Fridman (2:52:40.660)
And when we have fun, we want more of it.
Lex Fridman (2:52:43.300)
So you tend to gravitate towards work activities
Lex Fridman (2:52:46.060)
and play activities that are enjoyable to you.
Lex Fridman (2:52:48.660)
And it is nice sometimes to kind of come in
Lex Fridman (2:52:52.380)
and troll an entire industry.
Lex Fridman (2:52:55.100)
I can imagine he's probably at the time of his life.
Charles Hoskinson (2:52:56.980)
It's the same as like taking Tesla private at 420.
Lex Fridman (2:53:00.780)
That kind of stuff.
Lex Fridman (2:53:01.820)
And it's one thing when you do it with friends.
Lex Fridman (2:53:04.620)
It's another thing when you do it with the whole industry
Lex Fridman (2:53:06.340)
and it hurts people financially.
Lex Fridman (2:53:09.020)
And also I understand he hates short sellers
Lex Fridman (2:53:11.500)
and there's some things there.
Lex Fridman (2:53:12.900)
And I can't speak for him
Charles Hoskinson (2:53:14.300)
because I only know the guy from a distance.
Lex Fridman (2:53:16.300)
It's just, I live in this space
Lex Fridman (2:53:18.220)
and I have to deal with the consequences
Lex Fridman (2:53:19.740)
and clean up the mess.
Charles Hoskinson (2:53:20.580)
You feel the pain.
Lex Fridman (2:53:21.820)
Yeah, and this results in a regulatory event.
Charles Hoskinson (2:53:24.340)
It's like, I'm the guy who has to put on a suit
Lex Fridman (2:53:26.180)
and go to Washington and go and sit in a Senate inquiry
Lex Fridman (2:53:28.780)
and all this stuff.
Lex Fridman (2:53:29.620)
I'm the guy that just like laugh with his friends
Charles Hoskinson (2:53:32.380)
about how he crashed the crypto market
Lex Fridman (2:53:33.980)
and how easy it was to do it.
Lex Fridman (2:53:36.100)
And that's my only umbrage about this.
Lex Fridman (2:53:39.300)
On the other hand, if it brings a lot of cool,
Charles Hoskinson (2:53:41.220)
new, interesting things and people into the space,
Lex Fridman (2:53:43.700)
that's a net positive.
Lex Fridman (2:53:44.700)
And so it's not universally bad or universally good.
Lex Fridman (2:53:47.580)
And I'd like to give people the benefit of the doubt.
Lex Fridman (2:53:50.380)
And so I'm really hopeful to see what comes about
Lex Fridman (2:53:53.820)
this recent surge of interest
Lex Fridman (2:53:55.260)
and if Elon actually puts his money where his mouth is
Lex Fridman (2:53:57.660)
and take some of his enormous engineering talent
Lex Fridman (2:54:00.780)
and capital and starts contributing
Lex Fridman (2:54:03.380)
and building something in the cryptocurrency space.
Charles Hoskinson (2:54:05.940)
Be really cool to see that happen.
Lex Fridman (2:54:08.860)
There's a bunch of different technical aspects
Charles Hoskinson (2:54:11.220)
I wanna ask you about on the Cardano side.
Lex Fridman (2:54:13.380)
So first maybe on the scaling side, what is Hydra?
Lex Fridman (2:54:17.460)
How does Hydra compare to other different ideas
Lex Fridman (2:54:20.420)
for scalability like rollups,
Charles Hoskinson (2:54:22.660)
main trade offs with respect to security, UX,
Lex Fridman (2:54:28.140)
and anything else you wanna talk about?
Charles Hoskinson (2:54:31.220)
You have to have a little bit more energy, Lex, come on.
Lex Fridman (2:54:33.380)
You know what I need?
Charles Hoskinson (2:54:34.740)
I need that Coke machine that you mentioned,
Lex Fridman (2:54:36.580)
the thing that converts water to cocaine.
Charles Hoskinson (2:54:38.580)
Water to cocaine from Director Bullock.
Lex Fridman (2:54:41.460)
We'll leave this in, right?
Charles Hoskinson (2:54:43.180)
Yeah.
Lex Fridman (2:54:44.260)
Isomorphic state channels, that's a great topic, right?
Charles Hoskinson (2:54:47.660)
There's a word salad of cryptographic terms.
Lex Fridman (2:54:51.060)
Whether lightning, Hydra, rollups, any of these things,
Charles Hoskinson (2:54:53.500)
really what you're trying to do is say,
Lex Fridman (2:54:54.740)
okay, if I do it on layer one, it's slow and expensive.
Lex Fridman (2:54:58.900)
What I'm gonna do is batch something somehow, some way,
Lex Fridman (2:55:02.100)
and then do it in a different system
Charles Hoskinson (2:55:04.240)
where it's fast and cheap.
Lex Fridman (2:55:07.220)
And what I'm doing with that is I'm losing
Charles Hoskinson (2:55:09.480)
some of the security guarantees of the base layer
Lex Fridman (2:55:12.620)
and admitting a slight higher degree of centralization,
Lex Fridman (2:55:17.060)
but then I get super fast settlement,
Lex Fridman (2:55:20.260)
I get super low cost transactions,
Lex Fridman (2:55:22.560)
and potentially I may even be able
Lex Fridman (2:55:24.620)
to get distributed computing.
Charles Hoskinson (2:55:26.600)
Meaning that instead of having the smart contracts
Lex Fridman (2:55:29.240)
run in a replicated system,
Charles Hoskinson (2:55:30.380)
they could run on a single node, like a stake pool,
Lex Fridman (2:55:32.860)
and their stuff is different from the other guy's stuff.
Lex Fridman (2:55:35.940)
So you go from a system of capacity of whatever it is
Lex Fridman (2:55:40.560)
to a system of N for the totality of all the stake pools.
Lex Fridman (2:55:44.140)
So basically Hydra is just the next generation of that.
Lex Fridman (2:55:48.200)
When you have the ability to tinker with the accounting model
Lex Fridman (2:55:51.220)
and the layer two solution is co designed
Lex Fridman (2:55:54.380)
with the layer one solution.
Lex Fridman (2:55:55.620)
So it's like what Lightning would have been
Lex Fridman (2:55:57.780)
had Lightning been co developed when Bitcoin came out.
Charles Hoskinson (2:56:00.820)
There would have been special provisions made in Bitcoin,
Lex Fridman (2:56:03.460)
specifically to accommodate Lightning,
Lex Fridman (2:56:05.500)
and it would have made it very easy for you then
Lex Fridman (2:56:07.220)
to move inside the system, outside of the system,
Lex Fridman (2:56:09.460)
and have security properties preserved,
Lex Fridman (2:56:12.100)
like availability, for example, or fraud resistance,
Charles Hoskinson (2:56:15.360)
say, oh, you can't steal the money or these types of things.
Lex Fridman (2:56:18.300)
Where things get really complex,
Lex Fridman (2:56:19.800)
and this is why Hydra's novel over Lightning,
Lex Fridman (2:56:22.460)
is when you wanna move beyond payments to state management.
Charles Hoskinson (2:56:25.660)
Okay, so payments are just,
Lex Fridman (2:56:26.940)
I wanna move between Alice to Bob as quickly as possible,
Charles Hoskinson (2:56:29.480)
as low cost as possible.
Lex Fridman (2:56:31.100)
So for example, I have a micro tipping application,
Charles Hoskinson (2:56:34.300)
like change tip on Twitter, or like a video,
Lex Fridman (2:56:37.200)
I'm watching YouTube video,
Charles Hoskinson (2:56:38.220)
like maybe this video in the future,
Lex Fridman (2:56:39.740)
and people really like it, and they click tip,
Lex Fridman (2:56:41.380)
and you get five cents or something like that.
Lex Fridman (2:56:43.500)
Okay, so that's an example of a perfect payment application,
Lex Fridman (2:56:46.620)
and that's great, but what happens
Lex Fridman (2:56:48.660)
when you actually have a rich smart contract,
Charles Hoskinson (2:56:50.540)
like a DEX, or you wanna do a video game,
Lex Fridman (2:56:53.440)
or something like that, you wanna run that off chain,
Lex Fridman (2:56:55.640)
but then there's some reconciliation on chain that happens.
Lex Fridman (2:56:59.080)
So a state channel basically lets you do that,
Lex Fridman (2:57:01.820)
but it's a lot more complicated,
Lex Fridman (2:57:04.020)
and there's a lot more to think about.
Lex Fridman (2:57:05.700)
So Hydra basically just has in its design,
Lex Fridman (2:57:09.040)
a collection of ideas of how to do that.
Lex Fridman (2:57:11.540)
And the current paper is for a single head.
Lex Fridman (2:57:15.220)
The next thing you do is composition.
Lex Fridman (2:57:17.420)
So you go multiple heads,
Lex Fridman (2:57:18.980)
and there's a routing protocol between them.
Lex Fridman (2:57:20.980)
And then eventually create these tail protocols
Lex Fridman (2:57:22.700)
for when things get asynchronous.
Lex Fridman (2:57:24.340)
So instead of always being aligned,
Lex Fridman (2:57:25.900)
and always being available,
Lex Fridman (2:57:26.900)
what happens if they die for a bit,
Lex Fridman (2:57:28.860)
and then they come back?
Lex Fridman (2:57:30.140)
And you can create all kinds of guarantees
Lex Fridman (2:57:31.980)
that your funds won't be lost, or locked forever,
Charles Hoskinson (2:57:34.580)
or things like that.
Lex Fridman (2:57:35.420)
There's a failure recovery mode for this type of stuff.
Lex Fridman (2:57:37.820)
And basically the idea is leverage what Lightning
Lex Fridman (2:57:40.560)
has already achieved with Bitcoin,
Lex Fridman (2:57:42.260)
but then take advantage of the fact
Lex Fridman (2:57:44.700)
that you have a more expressive accounting model,
Lex Fridman (2:57:46.920)
and a more expressive programming model,
Lex Fridman (2:57:48.740)
so you can just physically do more,
Lex Fridman (2:57:50.180)
and you can put more crypto into that thing.
Lex Fridman (2:57:52.260)
Now contrast it with rollups,
Charles Hoskinson (2:57:53.660)
really that is just saying,
Lex Fridman (2:57:55.240)
you're gonna take some thing,
Charles Hoskinson (2:57:56.660)
batch a bunch of transactions together,
Lex Fridman (2:57:58.400)
and you're gonna generate a proof.
Lex Fridman (2:58:00.040)
And then what you can do is whenever you see
Lex Fridman (2:58:02.140)
some part of that history,
Charles Hoskinson (2:58:03.420)
you can check it against that proof that's rolled up.
Lex Fridman (2:58:05.860)
And they're closely related concept of recursive snarks
Charles Hoskinson (2:58:08.680)
that you'll see a lot.
Lex Fridman (2:58:09.520)
Things like the MENA protocol, or other things.
Lex Fridman (2:58:11.620)
And basically the idea is that whenever you see something,
Lex Fridman (2:58:14.580)
you can always generate two proofs.
Charles Hoskinson (2:58:16.860)
An existential proofs that the coins exist,
Lex Fridman (2:58:19.420)
and a non existence of a double spend.
Lex Fridman (2:58:21.860)
So you can always check those two properties.
Lex Fridman (2:58:23.580)
And the proof is verifiable in logarithmic time, ideally.
Lex Fridman (2:58:27.020)
So you can have giant amounts of data,
Lex Fridman (2:58:29.340)
but it's very small.
Lex Fridman (2:58:30.620)
The actual proof is concise, okay?
Lex Fridman (2:58:33.140)
So they're just different boats for different floats.
Charles Hoskinson (2:58:35.700)
The advantage of a layer two network
Lex Fridman (2:58:38.600)
where there's actual channels,
Lex Fridman (2:58:39.940)
and there's interaction, and there's service providers,
Lex Fridman (2:58:42.560)
is the channels can eventually scale
Charles Hoskinson (2:58:44.420)
in the collection of things that they can do.
Lex Fridman (2:58:46.660)
And eventually they can become interoperability networks
Charles Hoskinson (2:58:49.700)
between cryptocurrencies.
Lex Fridman (2:58:51.380)
So at some point, we could modify the bolt spec,
Lex Fridman (2:58:53.960)
and make it somewhat interoperable with Hydra.
Lex Fridman (2:58:56.380)
And then what you could happen is you could use it
Charles Hoskinson (2:58:57.880)
as a bridge to actually do cross chain traffic,
Lex Fridman (2:59:00.140)
and send transactions between the systems.
Charles Hoskinson (2:59:02.500)
You don't really think about that too much
Lex Fridman (2:59:03.940)
when you're talking about roll ups.
Charles Hoskinson (2:59:04.960)
That's more of optimizing what you have within the system.
Lex Fridman (2:59:07.540)
Within the chain, so can you elaborate
Lex Fridman (2:59:09.980)
how it's possible to do cross chain traffic?
Lex Fridman (2:59:12.860)
Well, you already have the intermediary,
Charles Hoskinson (2:59:14.100)
you have the channel operator,
Lex Fridman (2:59:15.540)
and you already have lightning protocol, right?
Lex Fridman (2:59:18.740)
And you just build a dex that runs within that system,
Lex Fridman (2:59:21.700)
and they can swap assets, or you can do wrapped assets.
Lex Fridman (2:59:24.300)
So you lock it. So it would be like low cost?
Lex Fridman (2:59:26.220)
I guess you could just switch low.
Charles Hoskinson (2:59:28.060)
Yeah, the same thing lets you batch things on one,
Lex Fridman (2:59:30.060)
will let you batch the other.
Lex Fridman (2:59:31.020)
So if lightning works on Bitcoin,
Lex Fridman (2:59:32.420)
and Hydra works on Cardano,
Charles Hoskinson (2:59:34.080)
you can eventually bridge these two together,
Lex Fridman (2:59:35.840)
and create a way of moving back and forth.
Lex Fridman (2:59:37.740)
And the same things that make transactions
Lex Fridman (2:59:39.380)
in and out of that network cheap,
Charles Hoskinson (2:59:40.580)
will make creating wrapped assets cheap.
Lex Fridman (2:59:43.220)
At least on the Bitcoin to Cardano side,
Charles Hoskinson (2:59:45.540)
you can't create assets on Bitcoin.
Lex Fridman (2:59:47.400)
Another flaw of Bitcoin that they've never fixed.
Lex Fridman (2:59:49.860)
What's your thought about layer two technologies in general?
Lex Fridman (2:59:52.540)
Is there stuff you're excited about?
Charles Hoskinson (2:59:53.900)
We talked quite a bit about Lightning Network, Hydra,
Lex Fridman (2:59:56.260)
and these ideas.
Lex Fridman (2:59:57.900)
Do you think there'll be somebody that wins out,
Lex Fridman (2:59:59.820)
or is this gonna be this kind of dynamic thing
Lex Fridman (30:02.000)
and the libraries aren't so good
Lex Fridman (30:03.200)
and also they tend to be a little slower
Charles Hoskinson (30:04.920)
when compared as a whole on average
Lex Fridman (30:07.360)
to languages like C for example.
Lex Fridman (30:10.000)
So it's really a question of okay,
Lex Fridman (30:11.800)
what are you designing for for version one?
Charles Hoskinson (30:14.080)
Are you designing for performance
Lex Fridman (30:16.160)
and are you designing for developer accessibility
Charles Hoskinson (30:19.000)
or are you designing for correctness
Lex Fridman (30:21.120)
and are you designing for a high fidelity representation
Lex Fridman (30:26.800)
of the protocol?
Lex Fridman (30:27.840)
Okay, so Haskell was chosen as kind of the version one
Charles Hoskinson (30:32.120)
because we knew that the kinds of people
Lex Fridman (30:34.160)
who think about that are also the kinds of people
Charles Hoskinson (30:36.360)
that would have an easy time reading a paper
Lex Fridman (30:38.240)
like Ouroboros and working their way through all of this
Lex Fridman (30:41.440)
and they would do a pretty good job
Lex Fridman (30:43.200)
running a formal specification
Lex Fridman (30:45.040)
and then translating that into running code.
Lex Fridman (30:47.640)
Then once you have that, you have a blueprint
Charles Hoskinson (30:49.840)
that you can actually reason about, maintain
Lex Fridman (30:52.400)
and if you really wanted to,
Charles Hoskinson (30:53.560)
you could then turn that into a Rust code base
Lex Fridman (30:55.880)
or into a Java code base.
Charles Hoskinson (30:57.640)
Going the other way around would be kind of pointless
Lex Fridman (31:00.720)
and counterproductive.
Charles Hoskinson (31:01.960)
The other side of it is that Haskell code
Lex Fridman (31:06.520)
or functional code tends to be significantly more concise
Lex Fridman (31:09.640)
and I actually have a real life example of that.
Lex Fridman (31:12.040)
So if you take a look at Mantis,
Charles Hoskinson (31:14.080)
we implemented a full Ethereum node in Scala.
Lex Fridman (31:17.880)
It's only about 14 or 15,000 lines of code
Lex Fridman (31:21.080)
and you compare that with like C++ Bitcoin,
Lex Fridman (31:23.400)
I think that's 120, 150,000 lines of code.
Lex Fridman (31:26.560)
So it's almost 10 times smaller
Lex Fridman (31:28.640)
and so less code, less to read
Lex Fridman (31:31.120)
and you tend to read code significantly more
Lex Fridman (31:33.160)
than you would read write code.
Lex Fridman (31:36.520)
So it's always an advantage for a maintenance,
Lex Fridman (31:39.280)
understandability, documentation and other sort of things
Charles Hoskinson (31:42.800)
when you have more concise code bases
Lex Fridman (31:45.200)
and also it's a lot easier for you to apply stronger tools
Charles Hoskinson (31:50.240)
to a functional code base like static analysis
Lex Fridman (31:53.440)
or property based testing or these types of things
Charles Hoskinson (31:55.960)
than an imperative code base.
Lex Fridman (31:57.320)
But the thing is, it's almost like a religion
Charles Hoskinson (31:59.960)
or language, it's like saying,
Lex Fridman (32:01.760)
French versus Russian versus English,
Charles Hoskinson (32:03.880)
everybody has their adherence.
Lex Fridman (32:05.080)
They say, oh, they have the best poetry here.
Charles Hoskinson (32:07.400)
Russian, yeah, wins.
Lex Fridman (32:08.640)
There you go, always a Russian.
Charles Hoskinson (32:10.280)
Everybody has their favorite tools
Lex Fridman (32:11.960)
and their favorite languages,
Lex Fridman (32:14.080)
but it just comes down to what problems
Lex Fridman (32:15.800)
are you trying to solve
Lex Fridman (32:16.840)
and what problem domain do you live in?
Lex Fridman (32:18.320)
If you're inventing new protocols based on science,
Charles Hoskinson (32:21.360)
you're gonna take the time to write a paper,
Lex Fridman (32:23.200)
go through the peer review process
Charles Hoskinson (32:25.400)
as you've done personally,
Lex Fridman (32:26.480)
you know how hard it can be to get into a conference
Lex Fridman (32:28.680)
and go through that and get your ass kicked.
Lex Fridman (32:30.920)
Then you also have to apply the exact same level of care
Charles Hoskinson (32:34.920)
to the engineering side in terms of implementation of that
Lex Fridman (32:37.600)
or else you will make a mistake
Lex Fridman (32:39.080)
and that mistake will probably be an exploit in the system
Lex Fridman (32:41.720)
that destroys the security properties of the system.
Lex Fridman (32:44.640)
So we really had no choice
Lex Fridman (32:46.080)
but to go to some notion of functional.
Lex Fridman (32:48.280)
The question was, what's the Goldilocks language?
Lex Fridman (32:50.600)
Do you use a hybrid language like Scala and F Sharp
Charles Hoskinson (32:53.560)
or Clojure where you still have some connection
Lex Fridman (32:56.440)
to understandable things like.NET or the JVM?
Charles Hoskinson (33:00.080)
Or do you go to an overly academic language like Idris
Lex Fridman (33:03.920)
or Agda or, you know, Isabel?
Lex Fridman (33:06.200)
And there you can really dial up the correctness
Lex Fridman (33:09.160)
and write all kinds of crazy proofs.
Lex Fridman (33:10.840)
But by the way, it's like the seven people
Lex Fridman (33:12.760)
who write your code, they go on vacation a lot,
Charles Hoskinson (33:15.100)
you'll never get anything done.
Lex Fridman (33:16.700)
So Haskell kind of felt like a nice mill ground
Charles Hoskinson (33:19.360)
between those two where if we needed to pull into the left,
Lex Fridman (33:22.200)
we could, if you wanted to pull into the right,
Charles Hoskinson (33:24.180)
you could as well.
Lex Fridman (33:25.320)
That said, it's really amazing to see
Lex Fridman (33:27.040)
what the hybrid languages have done.
Lex Fridman (33:28.560)
If I was a new student in computer science
Lex Fridman (33:30.580)
and I said, you know, learn any language
Lex Fridman (33:32.720)
to grow your career from,
Charles Hoskinson (33:34.880)
Scala 3 is probably the language to go with.
Lex Fridman (33:37.760)
Yeah, it's great,
Charles Hoskinson (33:38.600)
because it's like you want it to be like Java, it's Java.
Lex Fridman (33:41.000)
And it looks kind of like a Java program.
Charles Hoskinson (33:42.680)
You want it to be like Python and scripted
Lex Fridman (33:44.840)
and you reuse a REPL, you can do that.
Charles Hoskinson (33:46.980)
You want to go hardcore dot, you know,
Lex Fridman (33:50.320)
dependent object types and do like weird proofs and stuff
Lex Fridman (33:53.400)
and the functional, you do all that.
Lex Fridman (33:55.160)
You have access to all of these things
Lex Fridman (33:56.920)
and Martin Niederski is a brilliant guy.
Lex Fridman (33:58.760)
He's done some phenomenal work basically,
Charles Hoskinson (34:01.320)
because he was one guy who created the JVM
Lex Fridman (34:03.400)
and he's worked on compilers for over 20 years.
Charles Hoskinson (34:06.440)
He did a lot of really hardcore work
Lex Fridman (34:08.640)
in trying to build a concise, nice, modern language
Charles Hoskinson (34:12.080)
that does a little bit of everything.
Lex Fridman (34:13.900)
And it's got great applications in data science and AI.
Charles Hoskinson (34:17.600)
It's also heavily used in modern companies,
Lex Fridman (34:20.240)
like Netflix uses Scala
Charles Hoskinson (34:21.640)
for all of their microservice architecture.
Lex Fridman (34:23.920)
Yeah, so that's a great language and it's easy to pick up
Lex Fridman (34:27.120)
and it's easy to hire people into it.
Lex Fridman (34:28.760)
You just find these Eastern European guys
Charles Hoskinson (34:30.480)
who were Java programmers for 10 years, 15 years,
Lex Fridman (34:32.600)
they got tired of making $20 an hour,
Lex Fridman (34:34.960)
so they picked up Scala so they can make $35 an hour
Lex Fridman (34:38.280)
and they're really good at it.
Lex Fridman (34:39.920)
And that's a great gateway drug
Lex Fridman (34:41.440)
because you have like QuickCheck and Haskell,
Charles Hoskinson (34:43.400)
you have ScalaCheck and Scala.
Lex Fridman (34:45.320)
You can also do model checking.
Charles Hoskinson (34:47.300)
You can also go and use a TLA spec
Lex Fridman (34:49.680)
and make it work with Scala and so forth.
Lex Fridman (34:52.040)
So it gets you a little bit of everything
Lex Fridman (34:54.720)
and you can then move around that entire design space
Charles Hoskinson (34:58.920)
in a beautiful way.
Lex Fridman (34:59.940)
So the recommendation is maybe if you wanna go vanilla,
Charles Hoskinson (35:05.700)
you go Python and JavaScript.
Lex Fridman (35:07.380)
When you're getting started.
Charles Hoskinson (35:08.380)
It's the getting started.
Lex Fridman (35:09.200)
That'll get you everything.
Charles Hoskinson (35:10.040)
You can do web scrapers and anything.
Lex Fridman (35:11.900)
It's just fun.
Charles Hoskinson (35:12.740)
All this experiment with drugs in undergrad,
Lex Fridman (35:14.620)
this was where Scala 3 comes in, it's a gateway drug
Charles Hoskinson (35:17.460)
to then potentially more hardcore functional languages
Lex Fridman (35:19.900)
like Haskell.
Lex Fridman (35:21.380)
Do you think C and C++, C++ still has a role?
Lex Fridman (35:24.240)
No, I think Rust is completely replaced, a need for them.
Charles Hoskinson (35:26.780)
Go and Rust, those are the two twins of doom.
Lex Fridman (35:30.100)
I mean, Google created Go just to get rid of C.
Charles Hoskinson (35:33.340)
They hated C that much.
Lex Fridman (35:34.700)
And then Rust is just a phenomenal language as well.
Charles Hoskinson (35:37.220)
Hate can be a great motivator.
Lex Fridman (35:39.220)
Let me ask a question from Reddit on this topic.
Charles Hoskinson (35:41.920)
We're going depth first today.
Lex Fridman (35:43.220)
Sure.
Charles Hoskinson (35:45.320)
As a developer, why should I be incentivized
Lex Fridman (35:47.700)
to create Cardano based applications?
Lex Fridman (35:50.040)
What is on the Cardano developer roadmap?
Lex Fridman (35:52.480)
Any other language, I guess this is the key question
Charles Hoskinson (35:54.740)
I wanna ask.
Lex Fridman (35:55.580)
Any other language support other than Haskell?
Charles Hoskinson (35:58.620)
The example this person gives is TypeScript,
Lex Fridman (36:01.540)
Go, Java, Python, et cetera.
Charles Hoskinson (36:04.300)
Also, have you considered a yearly conference
Lex Fridman (36:06.580)
focused around developers?
Charles Hoskinson (36:07.860)
Ha ha, yeah, we saw the Plutus Fest.
Lex Fridman (36:10.180)
And we did the first one in 2018, 2019, I can't remember.
Lex Fridman (36:14.780)
And we were gonna do one last year, but then COVID hit.
Lex Fridman (36:17.380)
So we'll bring it back and we'll probably do it annually
Charles Hoskinson (36:19.500)
at the University of Wyoming for their hackathon there.
Lex Fridman (36:22.140)
In fact, it just so happens that coincides
Charles Hoskinson (36:24.060)
with the Goguen Summit.
Lex Fridman (36:24.980)
So we're doing that, I think the third week of September.
Lex Fridman (36:28.140)
But yeah, it's great to do an annual conference.
Lex Fridman (36:29.880)
You can bring a lot of cool people together
Lex Fridman (36:31.500)
and you can do hackathons and awards and so forth.
Lex Fridman (36:34.780)
But to the question in particular,
Charles Hoskinson (36:36.460)
Plutus is like any other language.
Lex Fridman (36:38.540)
Plutus core, you can compile things into it.
Lex Fridman (36:41.040)
So it's entirely possible to write a Scala
Lex Fridman (36:43.620)
to Plutus core compiler or TypeScript compiler
Charles Hoskinson (36:46.180)
or something like that.
Lex Fridman (36:47.340)
But I'm a big believer of separation of concerns
Lex Fridman (36:51.300)
and we don't live in a single chain model anymore.
Lex Fridman (36:54.660)
So you have a situation where you probably wanna have
Charles Hoskinson (36:59.020)
different execution environments and different chains.
Lex Fridman (37:01.660)
So you have different virtual machines there.
Lex Fridman (37:03.260)
And that's why we work so closely
Lex Fridman (37:04.580)
with the University of Illinois, Urbana Champaign,
Charles Hoskinson (37:06.460)
Kagori Roshu's team at runtime verification.
Lex Fridman (37:09.420)
What they did is they said,
Charles Hoskinson (37:10.360)
let's start with something very familiar, LLVM,
Lex Fridman (37:12.820)
which has been around for a really long time
Lex Fridman (37:14.420)
and they happened to have created it there with Apple.
Lex Fridman (37:17.380)
And let's take that and translate that
Charles Hoskinson (37:19.440)
into the blockchain space.
Lex Fridman (37:21.080)
Okay, then once you have it,
Charles Hoskinson (37:23.020)
then it's very easy to modify compilers
Lex Fridman (37:26.060)
of standard languages like the C's and C++'s
Lex Fridman (37:28.740)
and other things that do compile to LLVM already
Lex Fridman (37:31.780)
and have them run there.
Lex Fridman (37:33.060)
So that's a different execution model
Lex Fridman (37:34.680)
than what we tried to build for Plutus,
Lex Fridman (37:36.260)
which focuses on correctness, okay?
Lex Fridman (37:38.900)
So then all you have to really do is say,
Lex Fridman (37:40.860)
can both of these models coexist within the same ecosystem?
Lex Fridman (37:44.300)
Because then you kind of, and I did a video,
Charles Hoskinson (37:46.140)
it was called like the island, the ocean, the pond.
Lex Fridman (37:48.100)
And the basic idea was say,
Charles Hoskinson (37:49.900)
you have an island where everything's perfect.
Lex Fridman (37:51.780)
Calypso lives there, life is great.
Charles Hoskinson (37:54.940)
People feed you grapes every day,
Lex Fridman (37:56.420)
but maybe you can't do everything on the island.
Lex Fridman (37:58.940)
And the ocean's big, it has everything,
Lex Fridman (38:01.500)
but the ocean's got sea monsters and sharks
Lex Fridman (38:04.100)
and Boaty McBoatface and all kinds of crazy stuff, right?
Lex Fridman (38:08.320)
So that's what Yella is about.
Charles Hoskinson (38:10.020)
It's basically this bring LLVM into our world.
Lex Fridman (38:12.780)
And at some point in the next three to five year time
Charles Hoskinson (38:14.980)
horizon, we can bring modern programming languages in,
Lex Fridman (38:18.340)
but they're gonna come in with all their flaws
Lex Fridman (38:20.420)
and their warts and their problems.
Lex Fridman (38:22.300)
And then the pond was the idea
Charles Hoskinson (38:25.380)
of the Ethereum virtual machine.
Lex Fridman (38:26.640)
There's some network effect around it
Lex Fridman (38:28.220)
and there's some great tooling
Lex Fridman (38:29.340)
that's materialized and evolved.
Lex Fridman (38:31.100)
And it's not clear if that's the standard yet,
Lex Fridman (38:33.580)
or if like MySpace or Blackberry
Charles Hoskinson (38:35.700)
or all of these other things, it'll fade away.
Lex Fridman (38:37.680)
Well, if it becomes the standard, okay,
Charles Hoskinson (38:39.880)
don't fight nature, just support it.
Lex Fridman (38:42.980)
And the same thing that gives you the ability
Charles Hoskinson (38:44.700)
to bolt on the LLVM will also give you the ability
Lex Fridman (38:48.820)
to bolt on the EVM and they can run with their own models
Lex Fridman (38:51.420)
and they're encapsulated, bulkheaded, separated systems,
Lex Fridman (38:54.920)
but you can move ADA applications,
Charles Hoskinson (38:57.500)
information between those two systems.
Lex Fridman (38:59.860)
And so your main chain will always stay
Charles Hoskinson (39:01.780)
somewhat conservative and have the minimum viable amount
Lex Fridman (39:04.500)
of expressiveness required on it
Charles Hoskinson (39:06.340)
to do all kinds of interesting things.
Lex Fridman (39:08.900)
And also for interoperability,
Charles Hoskinson (39:10.380)
be able to talk to all kinds of interesting things,
Lex Fridman (39:12.940)
but it's not trying to be everything to everyone.
Charles Hoskinson (39:15.140)
There's never gonna be an ice cream store in the island.
Lex Fridman (39:18.160)
You'll have the grapes and the beautiful women,
Lex Fridman (39:19.780)
but no ice cream.
Lex Fridman (39:21.460)
Now you're just like distracting me with the ice cream.
Lex Fridman (39:23.700)
So just for, because we'll throw around a bunch of terms,
Lex Fridman (39:26.780)
for the record, what is Plutus?
Lex Fridman (39:28.380)
So Plutus is a programming language.
Lex Fridman (39:29.760)
It's kind of a DSL that we built on top of Haskell.
Lex Fridman (39:33.520)
And basically we wrote it after spending about three years
Lex Fridman (39:38.020)
thinking about all smart contracts.
Charles Hoskinson (39:40.060)
We were trying to figure out like,
Lex Fridman (39:41.860)
what is the ideal language to express a smart contract?
Lex Fridman (39:44.460)
And then we started thinking, well,
Lex Fridman (39:45.300)
what is a smart contract?
Charles Hoskinson (39:46.420)
Is it the whole application,
Lex Fridman (39:48.100)
or is it just like a sub module within an application?
Lex Fridman (39:50.960)
And usually it's the latter more than the former.
Lex Fridman (39:54.100)
You can build a self contained program like a script,
Lex Fridman (39:56.840)
but usually what's happening is you'll have it
Lex Fridman (39:58.620)
like a video game, let's say World of Warcraft
Charles Hoskinson (3:00:01.740)
that we just keep building different ideas,
Lex Fridman (3:00:03.800)
and they all interact with each other?
Charles Hoskinson (3:00:05.540)
It goes back to biology,
Lex Fridman (3:00:06.580)
that cell differentiation concept,
Charles Hoskinson (3:00:08.500)
is you have to build specialized tissue to do these things.
Lex Fridman (3:00:11.540)
The point of layer two is to extend the network.
Charles Hoskinson (3:00:13.580)
It's adding a foot, it's adding an arm,
Lex Fridman (3:00:15.380)
it's adding a brain, it's adding a heart, it's adding eyes,
Charles Hoskinson (3:00:18.260)
giving you additional senses, you have ears now.
Lex Fridman (3:00:20.420)
So when you add these layer two protocols,
Charles Hoskinson (3:00:21.980)
like Atala Prism is a perfect example of that.
Lex Fridman (3:00:24.040)
We don't have identity at the base layer of Cardano.
Charles Hoskinson (3:00:27.300)
It's a real bad deal to do that,
Lex Fridman (3:00:29.500)
because then China will come in,
Charles Hoskinson (3:00:30.980)
or US will come in and tell you how to do that.
Lex Fridman (3:00:32.900)
What you do is you build a layer two protocol
Charles Hoskinson (3:00:34.420)
that's blockchain agnostic,
Lex Fridman (3:00:35.700)
and then the user can decide
Charles Hoskinson (3:00:37.420)
when and where they need an identity,
Lex Fridman (3:00:38.860)
and then bring that identity into the system.
Lex Fridman (3:00:41.220)
And if you designed it right, when they bring it in,
Lex Fridman (3:00:43.340)
it's very easy, very fluid,
Lex Fridman (3:00:45.380)
and suddenly the experience enhances.
Lex Fridman (3:00:47.820)
Everything just gets better.
Charles Hoskinson (3:00:49.300)
Oh, wow, okay, now I can use all these regulated things.
Lex Fridman (3:00:51.780)
They go from gray to green in the App Store.
Charles Hoskinson (3:00:53.860)
That's so cool.
Lex Fridman (3:00:55.020)
Or, oh, wow, now I can send to human readable addresses,
Charles Hoskinson (3:00:58.420)
because if I have an identity and you have an identity,
Lex Fridman (3:01:00.220)
we can alias them with some namespace,
Lex Fridman (3:01:02.300)
and now I sent a Lex instead of some
Lex Fridman (3:01:05.620)
horrible back 32 address structure.
Charles Hoskinson (3:01:08.140)
Okay, so that's really what you need to do with layer two
Lex Fridman (3:01:10.980)
is say, okay, each layer two protocol
Charles Hoskinson (3:01:13.180)
is meant to do something.
Lex Fridman (3:01:14.220)
Either it gives me payments, or lower cost smart contracts,
Charles Hoskinson (3:01:17.360)
or interoperability, or identity,
Lex Fridman (3:01:19.820)
and then it's a marketplace.
Lex Fridman (3:01:21.580)
So you should have blockchain agnosticism
Lex Fridman (3:01:23.700)
with your layer two solutions.
Lex Fridman (3:01:25.060)
And so you can mix and match
Lex Fridman (3:01:27.040)
and choose whichever collection of services you need.
Lex Fridman (3:01:29.300)
And that's actually how IT works these days
Lex Fridman (3:01:31.580)
with microservices and these other things,
Lex Fridman (3:01:33.660)
and cloud software, you know.
Lex Fridman (3:01:35.460)
Every firm is an aggregation of dozens of providers,
Lex Fridman (3:01:38.540)
and basically that composition of them
Lex Fridman (3:01:40.660)
is your software stack.
Charles Hoskinson (3:01:43.020)
Jumping around back to proof of work.
Lex Fridman (3:01:45.840)
What are non interactive proofs of proof of work?
Charles Hoskinson (3:01:49.180)
NIPOPOWS.
Lex Fridman (3:01:51.740)
NIPOPOWS.
Charles Hoskinson (3:01:52.860)
NIPOPOWS.
Lex Fridman (3:01:53.700)
NIPOPOWS, it's fun to say, right?
Charles Hoskinson (3:01:54.860)
NIPOPOWS.
Lex Fridman (3:01:55.700)
It's just one of those things that you notice
Charles Hoskinson (3:01:57.180)
that certain proofs of work, when you solve them,
Lex Fridman (3:02:00.140)
come up less frequently than other ones.
Lex Fridman (3:02:02.060)
And just by that nature, you can sample them
Lex Fridman (3:02:05.420)
and then construct proofs from them.
Lex Fridman (3:02:07.020)
So you can, with that just set,
Lex Fridman (3:02:09.900)
have a more concise representation
Charles Hoskinson (3:02:11.980)
of an amount of work for a range of the chain.
Lex Fridman (3:02:14.060)
So that works.
Lex Fridman (3:02:14.900)
Can you say that again?
Lex Fridman (3:02:15.740)
Yeah, I was gonna say that word salad,
Charles Hoskinson (3:02:17.580)
basically the idea is, okay, so let's say that this block,
Lex Fridman (3:02:20.980)
and I'm just simplifying the concept a lot.
Charles Hoskinson (3:02:22.900)
This block, you get a regular green type of proof of work,
Lex Fridman (3:02:27.140)
and then this block, you get a green,
Lex Fridman (3:02:28.680)
and you keep going, and then suddenly you get a red one.
Lex Fridman (3:02:31.500)
So it's still a valid proof of work,
Lex Fridman (3:02:32.960)
but it's more rare than the other ones.
Lex Fridman (3:02:35.780)
So if you notice that particular pattern,
Lex Fridman (3:02:37.580)
what you can do is you can just start
Lex Fridman (3:02:39.240)
not caring so much about the green ones,
Lex Fridman (3:02:41.380)
and you can just bookend your chain with red.
Lex Fridman (3:02:44.900)
And then you can just repeat that, and repeat that,
Charles Hoskinson (3:02:47.020)
repeat that, and you can collect,
Lex Fridman (3:02:48.300)
and you can create this really compressed representation
Charles Hoskinson (3:02:50.780)
of these things.
Lex Fridman (3:02:51.720)
So what does it mean?
Charles Hoskinson (3:02:52.560)
It means that suddenly when you have that,
Lex Fridman (3:02:54.980)
now you have a way of representing a long range of history
Charles Hoskinson (3:02:58.340)
with a very small proof.
Lex Fridman (3:03:00.340)
So you can use it for light wallets,
Lex Fridman (3:03:01.900)
and you also can use it for side chains,
Lex Fridman (3:03:05.300)
if both side chains use proof of work.
Lex Fridman (3:03:07.740)
So when you see a transaction come in,
Lex Fridman (3:03:09.340)
you don't have a copy of the side chain,
Lex Fridman (3:03:11.140)
but you have a copy of the proof of work,
Lex Fridman (3:03:12.700)
and it has the same algorithmic weight
Charles Hoskinson (3:03:14.940)
as the normal longest chain,
Lex Fridman (3:03:17.460)
because you don't have all the greens,
Lex Fridman (3:03:18.960)
but the reds only occur with a certain sampling frequency.
Lex Fridman (3:03:21.900)
So this is the brainchild of Dionysus Zintros and Agelos,
Lex Fridman (3:03:25.260)
and it's just an amazing paper,
Lex Fridman (3:03:27.020)
and what's so cool about it is it doesn't require
Charles Hoskinson (3:03:29.660)
any structural changes to proof of work.
Lex Fridman (3:03:31.460)
It's just something you notice
Charles Hoskinson (3:03:32.660)
as an off gas of proof of work.
Lex Fridman (3:03:34.380)
It's like you're watching an engine operate,
Lex Fridman (3:03:36.340)
and you notice like every 500 times a piston
Lex Fridman (3:03:39.120)
will do a certain weird thing,
Lex Fridman (3:03:41.000)
and so you take advantage of that.
Lex Fridman (3:03:42.400)
You say, well, if I count 10 of them,
Charles Hoskinson (3:03:44.180)
now I have 5,000 pistons, strikes,
Lex Fridman (3:03:47.180)
as I observed that pattern.
Lex Fridman (3:03:48.620)
And so it's the same concept there,
Lex Fridman (3:03:50.380)
and it's just a property of the engine.
Lex Fridman (3:03:52.540)
So you don't really need to hard fork it in.
Lex Fridman (3:03:54.040)
It's just there, and because you can build proofs that way,
Charles Hoskinson (3:03:56.980)
now you can use those proofs to do like clients,
Lex Fridman (3:03:59.660)
and you can use those proofs to do other things,
Charles Hoskinson (3:04:01.060)
because you can just use that as something
Lex Fridman (3:04:02.540)
that comes with the history.
Charles Hoskinson (3:04:03.380)
You don't have to have the whole blockchain.
Lex Fridman (3:04:04.860)
Now, is this a weird property
Lex Fridman (3:04:06.060)
of multiple proof of work chains?
Lex Fridman (3:04:08.460)
It has to be key to the particular consensus algorithm,
Lex Fridman (3:04:12.020)
but usually there's some portability in this type of thing.
Lex Fridman (3:04:15.300)
Like we're right now exploring,
Lex Fridman (3:04:16.420)
can you do NIPA piles with Prism
Lex Fridman (3:04:17.980)
or any of these sharded proof of work protocols,
Lex Fridman (3:04:20.140)
but it looks like you can.
Lex Fridman (3:04:21.380)
The closely related is log space mining.
Lex Fridman (3:04:23.520)
So you can use this concept,
Lex Fridman (3:04:25.300)
and instead of having the entire blockchain
Charles Hoskinson (3:04:26.860)
to be able to mine,
Lex Fridman (3:04:27.820)
you can use a compressed representation of it.
Charles Hoskinson (3:04:29.940)
We wrote a paper called Log Space Mining
Lex Fridman (3:04:31.700)
that basically explains how to do that.
Lex Fridman (3:04:33.700)
So your miner only has this very small micro ledger
Lex Fridman (3:04:38.140)
as opposed to the entire ledger.
Lex Fridman (3:04:40.420)
How does it connect back to the entire ledger?
Lex Fridman (3:04:43.020)
How does the compressed?
Charles Hoskinson (3:04:43.860)
Because you have those red blocks.
Lex Fridman (3:04:45.580)
You have those special things,
Lex Fridman (3:04:46.700)
and so you know that the state you're working on
Lex Fridman (3:04:48.740)
is actually legitimate, right?
Lex Fridman (3:04:51.060)
So the map goes both ways?
Lex Fridman (3:04:52.860)
Yep, it's pretty cool.
Charles Hoskinson (3:04:55.460)
Wow, that's really interesting.
Lex Fridman (3:04:56.380)
Yeah, and Denis is a genius.
Charles Hoskinson (3:04:58.580)
He's a really, really smart kid,
Lex Fridman (3:05:00.040)
and he got his PhD under us.
Charles Hoskinson (3:05:01.740)
He went to University of Athens,
Lex Fridman (3:05:03.280)
and he was Agelos's graduate student,
Lex Fridman (3:05:05.340)
and now he's doing a postdoc at Stanford under David Shi,
Lex Fridman (3:05:08.380)
and this is literally the only thing he does.
Charles Hoskinson (3:05:10.340)
He does interoperability, sidechain stuff,
Lex Fridman (3:05:13.100)
NIPA piles and so forth,
Lex Fridman (3:05:14.580)
and he's written a lot of great papers on it.
Lex Fridman (3:05:16.580)
And that was a testimony to hard work
Charles Hoskinson (3:05:18.740)
for getting the paper published,
Lex Fridman (3:05:20.100)
because the paper came out in 2016,
Lex Fridman (3:05:21.820)
but I think it took three or four years
Lex Fridman (3:05:23.580)
for it to go through peer review.
Charles Hoskinson (3:05:25.500)
He kept trying to push it one conference
Lex Fridman (3:05:27.220)
after another rejection, after another rejection,
Lex Fridman (3:05:29.420)
but he got it through.
Lex Fridman (3:05:30.900)
Real proud of that kid.
Lex Fridman (3:05:32.220)
And then he's just doing all this beautiful
Lex Fridman (3:05:33.580)
derivative work now, like lock space mining and so forth.
Charles Hoskinson (3:05:37.020)
So, Reddit.
Lex Fridman (3:05:40.820)
Any sentence that starts with Reddit,
Charles Hoskinson (3:05:42.260)
you know it's gonna be fun.
Lex Fridman (3:05:43.640)
The top question on the Cardano subreddit,
Charles Hoskinson (3:05:47.600)
which is quite a wonderful place, by the way,
Lex Fridman (3:05:50.540)
was can you get Charles to play devil's advocate
Lex Fridman (3:05:55.240)
against Cardano?
Lex Fridman (3:05:56.980)
If it's going to fail, what would failure look like
Lex Fridman (3:06:00.080)
and what are the most likely reasons it would fail?
Lex Fridman (3:06:03.580)
Okay, well there's the failure.
Charles Hoskinson (3:06:06.620)
For example, I said one of the project goals
Lex Fridman (3:06:09.080)
was to achieve self evolution.
Lex Fridman (3:06:11.200)
So if it doesn't achieve that,
Lex Fridman (3:06:12.620)
where it can evolve itself iteration by iteration,
Charles Hoskinson (3:06:16.080)
then obviously the product didn't do what was intended.
Lex Fridman (3:06:19.220)
If it continuously required the supervision of custodians
Charles Hoskinson (3:06:23.040)
in order for it to succeed, the system just won't work.
Lex Fridman (3:06:26.740)
The good news is we have a lot of data showing the opposite.
Charles Hoskinson (3:06:29.380)
You know, we used to run a federated model
Lex Fridman (3:06:31.740)
and now we're completely decentralized
Charles Hoskinson (3:06:33.220)
for block production,
Lex Fridman (3:06:34.460)
but that didn't just happen overnight.
Charles Hoskinson (3:06:36.380)
I mean, there was a whole process
Lex Fridman (3:06:38.460)
with the incentivized test net
Lex Fridman (3:06:40.020)
and the stake pool pioneers program
Lex Fridman (3:06:41.840)
and the launch of Shelley
Lex Fridman (3:06:42.940)
and the decrementing of the decentralization parameter.
Lex Fridman (3:06:45.580)
And every step of the way people showed up
Lex Fridman (3:06:47.200)
and had to do things.
Lex Fridman (3:06:48.360)
And we went from several to thousands of people
Charles Hoskinson (3:06:51.620)
who were regularly maintaining the infrastructure,
Lex Fridman (3:06:54.080)
but there's no guarantee that that would be sustainable.
Lex Fridman (3:06:57.100)
And there's no guarantee that the next step,
Lex Fridman (3:06:59.900)
the smart contract step will achieve what we want.
Lex Fridman (3:07:02.140)
And the next step, the governance step
Lex Fridman (3:07:03.500)
will achieve what we want.
Charles Hoskinson (3:07:04.780)
I mean, it's an experiment and all these types of things.
Lex Fridman (3:07:06.860)
All cryptocurrencies, all companies are in a sense,
Charles Hoskinson (3:07:10.220)
experiments when they are evolving the business model.
Lex Fridman (3:07:12.980)
And as our case, our businesses systems and society,
Charles Hoskinson (3:07:17.620)
we're offering to the world a vision
Lex Fridman (3:07:19.660)
of how to run humanity in a different way.
Lex Fridman (3:07:22.220)
And the only way the system can do that
Lex Fridman (3:07:24.220)
is by millions of people joining the system,
Charles Hoskinson (3:07:26.580)
self evolving the system
Lex Fridman (3:07:27.900)
and growing it in that particular direction.
Charles Hoskinson (3:07:30.560)
Another failure scenario would be the system evolves
Lex Fridman (3:07:33.900)
in the wrong direction.
Lex Fridman (3:07:34.900)
So it's self evolving,
Lex Fridman (3:07:36.160)
but it goes into a more centralized dystopian way.
Lex Fridman (3:07:39.620)
And that's problematic as well.
Lex Fridman (3:07:41.380)
What would that look like?
Lex Fridman (3:07:42.220)
What would dystopia,
Lex Fridman (3:07:44.060)
self evolution toward dystopia look like?
Charles Hoskinson (3:07:46.320)
A small group of actors have total control
Lex Fridman (3:07:48.580)
over who gets to use the system
Lex Fridman (3:07:50.140)
and how they get to use the system.
Lex Fridman (3:07:51.540)
And your use of the system is monitored
Lex Fridman (3:07:53.700)
and shared with that small group of actors.
Lex Fridman (3:07:56.180)
So social credit in China is a great example of that.
Charles Hoskinson (3:07:58.980)
A small group of people have access to that.
Lex Fridman (3:08:00.860)
And then your experience in Chinese society
Charles Hoskinson (3:08:03.540)
is determined by it.
Lex Fridman (3:08:05.740)
So that's an example of a failure mode.
Lex Fridman (3:08:07.740)
And then another could be just network effect.
Lex Fridman (3:08:10.700)
We start experiencing a churn rate
Lex Fridman (3:08:13.220)
and the inputs don't match the outputs
Lex Fridman (3:08:16.860)
and that you lose more than you gain.
Lex Fridman (3:08:19.580)
And then over time, the system dies off.
Lex Fridman (3:08:21.820)
However, that's really hard in practice.
Charles Hoskinson (3:08:23.580)
Once you reach a certain network effect,
Lex Fridman (3:08:25.460)
even if you become stagnant and stale,
Charles Hoskinson (3:08:28.020)
you tend not to lose your users.
Lex Fridman (3:08:29.580)
And our evangelism is unbelievable
Charles Hoskinson (3:08:32.360)
in the Cardano community.
Lex Fridman (3:08:33.420)
I think we're number one for tattoos.
Lex Fridman (3:08:35.700)
And if you think about that,
Lex Fridman (3:08:37.300)
it's a strange metric to have,
Lex Fridman (3:08:38.900)
but there are brands that associate that way,
Lex Fridman (3:08:41.020)
like Apple and Harley Davidson and so forth.
Charles Hoskinson (3:08:43.180)
People tend to actually tattoo the logo.
Lex Fridman (3:08:45.380)
Those people don't leave.
Charles Hoskinson (3:08:47.060)
They don't actually walk away from the ecosystem.
Lex Fridman (3:08:49.460)
They're fanboys to the core.
Lex Fridman (3:08:51.340)
So there's a lot of people that are here for life.
Lex Fridman (3:08:55.240)
They don't care if it's dollar ADA, two cent ADA.
Charles Hoskinson (3:08:58.020)
They believe in the mission, vision and value
Lex Fridman (3:08:59.880)
of what we wish to achieve.
Lex Fridman (3:09:01.180)
And they've become evangelists in that respect.
Lex Fridman (3:09:03.300)
So the question is, does that community sustain itself?
Lex Fridman (3:09:06.800)
And also does that community not make the same sins
Lex Fridman (3:09:09.100)
and mistake of Bitcoin,
Charles Hoskinson (3:09:10.580)
where they become toxic and maximalistic
Lex Fridman (3:09:12.940)
and they start becoming highly religious
Lex Fridman (3:09:14.660)
about whatever beliefs they have?
Lex Fridman (3:09:16.220)
My hope is our community will be open and Socratic
Lex Fridman (3:09:20.180)
and love the scientific method
Lex Fridman (3:09:21.920)
and be willing to entertain ideas without adopting them
Lex Fridman (3:09:25.240)
and discard ideas that are proven to be wrong.
Lex Fridman (3:09:28.060)
If we become dogmatic and embrace an orthodoxy
Charles Hoskinson (3:09:31.380)
that is a counterproductive innovation,
Lex Fridman (3:09:33.700)
then it'll stall out the ecosystem.
Lex Fridman (3:09:36.120)
And you'll notice I never said price in any of this.
Lex Fridman (3:09:38.540)
I never said, hey, failure is if the price goes way down
Lex Fridman (3:09:42.580)
and success is if the price goes way up.
Lex Fridman (3:09:44.900)
That's unfortunately the metric that most people use,
Lex Fridman (3:09:46.960)
but I couldn't care less about it.
Lex Fridman (3:09:48.620)
Because the reality is if you construct a system
Charles Hoskinson (3:09:51.340)
that encompasses the entire globe
Lex Fridman (3:09:53.520)
and has billions of users,
Charles Hoskinson (3:09:55.100)
it's probably gonna be a pretty valuable system.
Lex Fridman (3:09:57.080)
That's a secondary thing.
Charles Hoskinson (3:09:59.380)
It's an after effect of having success
Lex Fridman (3:10:02.060)
in adoption, use and utility.
Charles Hoskinson (3:10:04.500)
Unfortunately, most people on Reddit and Twitter
Lex Fridman (3:10:07.780)
and other channels,
Charles Hoskinson (3:10:08.820)
they tend to just judge your entire success based on that.
Lex Fridman (3:10:11.500)
I had very few people when Shelley launched,
Charles Hoskinson (3:10:13.840)
even though it took us four years to get there,
Lex Fridman (3:10:15.540)
a lot of work, say congratulations on Shelley.
Lex Fridman (3:10:18.420)
But I had a lot of people when Ada reached the dollar
Lex Fridman (3:10:20.620)
say, we're so proud of you, amazing work,
Charles Hoskinson (3:10:22.820)
congratulations and so forth.
Lex Fridman (3:10:24.340)
And that's probably the most disheartening thing
Charles Hoskinson (3:10:26.260)
about the whole being around and doing this stuff
Lex Fridman (3:10:30.380)
where all the things you do only matter
Charles Hoskinson (3:10:32.620)
as long as it's making someone else rich.
Lex Fridman (3:10:34.580)
And in a way I feel almost like a failure
Charles Hoskinson (3:10:37.900)
because that mindset means that we haven't yet
Lex Fridman (3:10:42.460)
inculcated the community in a proper way,
Charles Hoskinson (3:10:44.860)
saying, hey guys, this is about more than money.
Lex Fridman (3:10:48.260)
It's about more than the value of Ada.
Lex Fridman (3:10:49.820)
What we're attempting to do here
Lex Fridman (3:10:51.140)
is reengineer the way society works.
Charles Hoskinson (3:10:52.940)
I'd like your voting to be different.
Lex Fridman (3:10:54.580)
I'd like your property to be different.
Charles Hoskinson (3:10:55.860)
I'd like you on your cell phone to have a universal wallet.
Lex Fridman (3:10:58.820)
And when you go to Starbucks or wherever,
Charles Hoskinson (3:11:00.500)
you can buy your coffee with silver or gold
Lex Fridman (3:11:03.460)
or airline miles or something like that.
Lex Fridman (3:11:05.400)
And they get paid whenever the hell they wanna get paid.
Lex Fridman (3:11:07.180)
And I want those rails to be done with a system
Charles Hoskinson (3:11:09.060)
that puts you in charge, not someone else.
Lex Fridman (3:11:11.220)
And they say, yeah, that's all fine and great.
Charles Hoskinson (3:11:12.740)
As long as Ada's $5, we're all happy.
Lex Fridman (3:11:15.740)
You see, so that's a problem.
Charles Hoskinson (3:11:18.040)
There are of course other things that could fail,
Lex Fridman (3:11:19.700)
like we could lose project cohesion,
Charles Hoskinson (3:11:22.100)
lots of people could quit and die.
Lex Fridman (3:11:23.820)
But again, there's so much momentum.
Charles Hoskinson (3:11:25.420)
There's so many things here.
Lex Fridman (3:11:26.420)
The ideas are already out there
Lex Fridman (3:11:27.980)
and there's no intellectual property.
Lex Fridman (3:11:29.980)
When you publish a hundred papers,
Charles Hoskinson (3:11:31.220)
you read a million lines of code,
Lex Fridman (3:11:32.620)
that's something and it's permanent.
Lex Fridman (3:11:34.460)
And it's in the commons now.
Lex Fridman (3:11:35.940)
So it's just as much yours as it is mine.
Lex Fridman (3:11:38.380)
So there's no notion that somehow,
Lex Fridman (3:11:41.180)
if the core development company disappeared,
Charles Hoskinson (3:11:43.300)
then that concept is lost forever,
Lex Fridman (3:11:46.860)
like the library of Alexandria burning to the ground.
Charles Hoskinson (3:11:50.220)
It's there.
Lex Fridman (3:11:51.380)
And someone else will take it, fork it and get it done.
Charles Hoskinson (3:11:55.420)
I mean, first of all, that's fascinating.
Lex Fridman (3:11:56.940)
The self evolution,
Charles Hoskinson (3:11:57.940)
you don't know which trajectories that's gonna take,
Lex Fridman (3:11:59.860)
but also there's could be singular events
Charles Hoskinson (3:12:03.620)
like bugs in the system create an opportunity
Lex Fridman (3:12:07.860)
to hack the system.
Charles Hoskinson (3:12:09.380)
Is that something that you see
Lex Fridman (3:12:10.780)
as a potential failure case?
Charles Hoskinson (3:12:12.860)
Yeah, it's always a possibility.
Lex Fridman (3:12:14.540)
Bugs can exist.
Charles Hoskinson (3:12:15.540)
There can be flaws in the protocol design.
Lex Fridman (3:12:17.940)
Zcash was a great example of that,
Charles Hoskinson (3:12:19.500)
where there was a subtle flaw
Lex Fridman (3:12:21.060)
and it damaged the fidelity of the cryptocurrency
Charles Hoskinson (3:12:23.340)
in ways no other cryptocurrencies ever experienced.
Lex Fridman (3:12:26.100)
Normally when you have a bug,
Charles Hoskinson (3:12:27.980)
the bug you can see it like the Bitcoin overflow,
Lex Fridman (3:12:30.300)
the value overflow incident.
Charles Hoskinson (3:12:31.380)
Yes, Bitcoin can be created,
Lex Fridman (3:12:32.580)
but we can verify they weren't.
Lex Fridman (3:12:34.460)
So the monetary policy is preserved.
Lex Fridman (3:12:36.420)
When you have a bug with a private system like Zcash
Lex Fridman (3:12:39.260)
and it exists on the shielded side,
Lex Fridman (3:12:41.460)
there's no guarantee unless you can audit
Charles Hoskinson (3:12:43.580)
the total supply inside that shielded side.
Lex Fridman (3:12:45.780)
My understanding is you can't,
Charles Hoskinson (3:12:47.340)
that somebody didn't exploit the bug
Lex Fridman (3:12:49.140)
and create trillions of these coins out of thin air
Lex Fridman (3:12:51.140)
and just hiding them on that system and dripping them out.
Lex Fridman (3:12:53.820)
And so the monetary policy is forever damaged
Charles Hoskinson (3:12:55.980)
as a consequence of bug like that.
Lex Fridman (3:12:57.540)
It's probably the worst type of bug you can have
Charles Hoskinson (3:12:59.420)
for these types of products.
Lex Fridman (3:13:01.060)
So no matter how good of a job you do,
Charles Hoskinson (3:13:03.980)
they have great scientists,
Lex Fridman (3:13:05.180)
there are great people there, great engineers there.
Charles Hoskinson (3:13:07.420)
You can always have something like that,
Lex Fridman (3:13:08.940)
seep its way in, leak its way in,
Lex Fridman (3:13:11.060)
and that lurks in the distance.
Lex Fridman (3:13:12.780)
But if that's a problem shared
Charles Hoskinson (3:13:15.500)
with every one of your neighbors,
Lex Fridman (3:13:18.220)
it's like everybody working on a nuclear power plant.
Charles Hoskinson (3:13:20.460)
Well, yeah, you can all die of radiation poisoning.
Lex Fridman (3:13:22.460)
Well, we all kind of knew that, didn't we?
Lex Fridman (3:13:24.980)
So it's like, I don't really think too much about it.
Lex Fridman (3:13:28.740)
I think the context of the question was more,
Lex Fridman (3:13:30.580)
what is Cardano specific over Ethereum or Bitcoin
Lex Fridman (3:13:33.420)
or any of these other things?
Lex Fridman (3:13:34.500)
And yeah, okay, existential lurking bug could happen.
Lex Fridman (3:13:37.540)
It's lower probability for us than the other systems
Charles Hoskinson (3:13:40.140)
because we use formal methods
Lex Fridman (3:13:41.940)
and we use peer review inside the protocol design.
Lex Fridman (3:13:45.860)
So there's been more eyeballs and tools and techniques
Lex Fridman (3:13:48.140)
used to check things.
Lex Fridman (3:13:49.180)
And we actually have discovered
Lex Fridman (3:13:50.860)
a lot of weird wonky bugs before production
Lex Fridman (3:13:53.340)
and resolve those bugs.
Lex Fridman (3:13:54.900)
So it shows you the system works.
Charles Hoskinson (3:13:56.620)
It's a lot of fun.
Lex Fridman (3:13:57.740)
What about close kind of competitors?
Charles Hoskinson (3:14:00.540)
I don't know if you would put it that way,
Lex Fridman (3:14:01.820)
but if you look in the space of ideas,
Charles Hoskinson (3:14:05.100)
competitor cryptocurrencies like Polkadot,
Lex Fridman (3:14:08.380)
what are some interesting difference
Lex Fridman (3:14:09.780)
between Cardano and Polkadot?
Lex Fridman (3:14:12.100)
Technically, philosophically, historically,
Charles Hoskinson (3:14:14.340)
is that something you think about
Lex Fridman (3:14:15.580)
when you think about the future of Cardano?
Charles Hoskinson (3:14:17.540)
Yeah, I mean, we do.
Lex Fridman (3:14:19.180)
We actually have a whole group of people
Charles Hoskinson (3:14:20.700)
that do business intelligence and comparative analysis.
Lex Fridman (3:14:23.300)
And we're getting to a point
Charles Hoskinson (3:14:24.660)
where we wanna start eventually forking their code
Lex Fridman (3:14:27.180)
and running private versions of it
Lex Fridman (3:14:28.540)
and just playing around with things.
Lex Fridman (3:14:29.660)
Well, that's fascinating.
Charles Hoskinson (3:14:30.500)
Getting better at it.
Lex Fridman (3:14:31.940)
Consensus actually does this.
Charles Hoskinson (3:14:33.260)
They actually did it with EOS.
Lex Fridman (3:14:34.100)
And they wrote this lovely report like trashing EOS,
Charles Hoskinson (3:14:36.500)
saying, hey, by the way,
Lex Fridman (3:14:37.340)
all those claims these guys made are just not true.
Lex Fridman (3:14:40.820)
But it's nice to do that.
Lex Fridman (3:14:42.900)
It's nice to use your competitor's technology
Charles Hoskinson (3:14:44.980)
or competing protocol technology
Lex Fridman (3:14:46.980)
because you learn a lot along the process.
Charles Hoskinson (3:14:48.540)
It's not all bad.
Lex Fridman (3:14:50.220)
There's always something there
Charles Hoskinson (3:14:51.700)
because they have different trade offs and customers
Lex Fridman (3:14:53.780)
that potentially are more interesting.
Charles Hoskinson (3:14:55.380)
Like right now we're grokking,
Lex Fridman (3:14:56.740)
how do we wanna do the side chain model of Cardano?
Charles Hoskinson (3:14:59.420)
Polkadot's actually a tremendously useful piece
Lex Fridman (3:15:01.980)
of infrastructure for that conversation
Charles Hoskinson (3:15:03.780)
because they copied part of our infrastructure.
Lex Fridman (3:15:07.060)
Gavin's a trained computer scientist.
Charles Hoskinson (3:15:08.700)
He got his PhD from York and he read our papers obviously.
Lex Fridman (3:15:12.860)
And he realized that Ouroboros was a really good
Charles Hoskinson (3:15:15.420)
starting place for building a proof of stake system.
Lex Fridman (3:15:18.420)
So Polkadot's consensus is very similar to ours.
Lex Fridman (3:15:21.220)
And so if you're saying,
Lex Fridman (3:15:22.060)
hey, how do you do a good side chain model
Lex Fridman (3:15:24.340)
with an Ouroboros style proof of stake?
Lex Fridman (3:15:26.900)
Well, we already have this parachain thing, right?
Lex Fridman (3:15:29.020)
And so now by just looking at that,
Lex Fridman (3:15:31.260)
I can kind of get an idea of how, one way of doing it.
Lex Fridman (3:15:34.500)
And so that's just beautiful that we live in a space
Lex Fridman (3:15:36.940)
where that's there, it's open source,
Lex Fridman (3:15:38.380)
and it's really good.
Lex Fridman (3:15:39.220)
You just say, okay, well, we'll just take that
Lex Fridman (3:15:41.140)
and adopt that.
Lex Fridman (3:15:41.980)
There's no shame.
Charles Hoskinson (3:15:43.740)
The other side of it is that Polkadot
Lex Fridman (3:15:46.820)
really has focused a lot on commercial adoption,
Charles Hoskinson (3:15:49.820)
Silicon Valley adoption, getting real use and utility.
Lex Fridman (3:15:53.420)
I say in a much more sustainable way
Charles Hoskinson (3:15:55.620)
than Ethereum is focused on.
Lex Fridman (3:15:57.380)
Ethereum was kind of a spray and pray thing.
Charles Hoskinson (3:15:59.580)
Polkadot was more of like,
Lex Fridman (3:16:00.660)
hey, let's go ahead and actually
Charles Hoskinson (3:16:02.300)
curate our ecosystem more carefully.
Lex Fridman (3:16:04.540)
And we're gonna build it in a way
Charles Hoskinson (3:16:06.420)
where there's predictable or as predictable a cost
Lex Fridman (3:16:09.380)
as possible with the rollout of the infrastructure.
Lex Fridman (3:16:12.900)
And that's so important for a business.
Lex Fridman (3:16:16.540)
It's not necessarily important for an experiment
Charles Hoskinson (3:16:18.620)
or a startup where they're just trying
Lex Fridman (3:16:20.740)
to get populations quickly as possible.
Charles Hoskinson (3:16:22.860)
We'll figure out later.
Lex Fridman (3:16:24.380)
But if you're actually sitting there saying,
Charles Hoskinson (3:16:25.660)
I need to know what my expenses are three years,
Lex Fridman (3:16:28.340)
five years, 10 years into the future,
Charles Hoskinson (3:16:30.180)
you need predictability there.
Lex Fridman (3:16:31.900)
I think they have a better shot of it than anything
Charles Hoskinson (3:16:33.820)
in F2 or with currently Ethereum.
Lex Fridman (3:16:37.580)
Now, the big contrast between the two systems,
Charles Hoskinson (3:16:40.380)
those we actually have native multi asset,
Lex Fridman (3:16:43.300)
we have a different accounting model.
Charles Hoskinson (3:16:44.620)
I think our base ledger is far more expressive.
Lex Fridman (3:16:47.260)
Our rate of evolution was proof of stake
Charles Hoskinson (3:16:48.900)
is much faster than theirs
Lex Fridman (3:16:50.140)
because they're based on derivative work
Lex Fridman (3:16:51.540)
and we already have Ouroboros Omega and other things there.
Lex Fridman (3:16:54.500)
I think we have a better,
Charles Hoskinson (3:16:55.660)
ultimately a better side chain model will come
Lex Fridman (3:16:58.460)
because we have something called Mythril for that.
Lex Fridman (3:17:00.620)
But we learned a lot from their work.
Lex Fridman (3:17:02.860)
The other thing is that we thought about governance
Charles Hoskinson (3:17:04.740)
a lot more carefully in my view.
Lex Fridman (3:17:06.540)
And we have Catalyst and Voltaire
Lex Fridman (3:17:08.260)
and really the key there is saying,
Lex Fridman (3:17:10.300)
how do we make sure that every single person
Lex Fridman (3:17:12.060)
who holds data can participate in the network?
Lex Fridman (3:17:14.740)
That wasn't a high design priority of Polkadot.
Charles Hoskinson (3:17:17.380)
It was more a fast commercial adoption.
Lex Fridman (3:17:19.700)
The acquisition of customers will come to governance later.
Lex Fridman (3:17:22.700)
And those were just different business philosophies.
Lex Fridman (3:17:25.820)
But it's nice to have a competitor like that.
Lex Fridman (3:17:28.300)
And oftentimes I've said that Polkadot's like Ethereum 1.5.
Lex Fridman (3:17:31.500)
It's what F2 probably should have been.
Charles Hoskinson (3:17:33.620)
There was what Vitalik wanted to do,
Lex Fridman (3:17:35.100)
which was incredibly aggressive and brilliant,
Lex Fridman (3:17:38.660)
but it's a lot.
Lex Fridman (3:17:39.820)
And there's so much execution risk in that plan.
Lex Fridman (3:17:42.580)
And I think they've had like six years
Lex Fridman (3:17:44.180)
of playing around with it.
Charles Hoskinson (3:17:45.620)
Had they gone down the Polkadot road,
Lex Fridman (3:17:47.860)
they probably would have been a market with it
Charles Hoskinson (3:17:49.540)
in 2018.
Lex Fridman (3:17:50.460)
And because they already had the network effect,
Charles Hoskinson (3:17:52.940)
they would have had years of building on that,
Lex Fridman (3:17:55.100)
iterating that.
Lex Fridman (3:17:55.940)
And they already had a path to it too.
Lex Fridman (3:17:57.380)
All they had to do was just give Elaine Chi
Lex Fridman (3:17:59.260)
and her cohorts at Cornell,
Lex Fridman (3:18:01.500)
five, $10 million grants.
Charles Hoskinson (3:18:02.900)
Snow White would have been the dominant protocol,
Lex Fridman (3:18:05.380)
not Ouroboros in the proof of stake space.
Lex Fridman (3:18:08.260)
So it's really fascinating historically
Lex Fridman (3:18:09.620)
when you look at these things and the rivalries
Lex Fridman (3:18:11.220)
and what they did and what they didn't do.
Lex Fridman (3:18:12.700)
And Gavin had a chance to have C++ Ethereum
Charles Hoskinson (3:18:17.700)
be used as IBM's enterprise blockchain.
Lex Fridman (3:18:21.860)
The only reason they didn't do it is it was licensed GPL.
Lex Fridman (3:18:24.740)
And I think they wanted to relicense Apache.
Lex Fridman (3:18:27.180)
If you ever talked to Bob Summerwall,
Charles Hoskinson (3:18:28.580)
he was there at the time and he had this amazing story
Lex Fridman (3:18:31.020)
about like these terrible fights where it's like,
Charles Hoskinson (3:18:34.540)
guys, just relicense the goddamn code.
Lex Fridman (3:18:36.380)
Let's figure out a way to make this happen
Lex Fridman (3:18:37.940)
so that we can get this huge network effect
Lex Fridman (3:18:40.700)
of being basically IBM's play.
Charles Hoskinson (3:18:43.180)
They didn't do it, they created Fabric,
Lex Fridman (3:18:44.900)
these types of things.
Lex Fridman (3:18:46.420)
So there's a lot of lore and stories in that respect.
Lex Fridman (3:18:49.900)
But the space is better because of Polkadot.
Lex Fridman (3:18:52.620)
And there's a lot of good people there.
Lex Fridman (3:18:53.980)
Web3 is a good concept.
Lex Fridman (3:18:55.780)
And we run into their people in Germany and Zurich a lot.
Lex Fridman (3:18:58.700)
And they've always been cordial and friendly
Lex Fridman (3:19:00.740)
and really affable.
Lex Fridman (3:19:02.900)
Before I talk to you about governance,
Charles Hoskinson (3:19:04.380)
which is one of the most fascinating things about Cardano,
Lex Fridman (3:19:07.820)
there's a lot of stuff to untangle there.
Charles Hoskinson (3:19:10.300)
Since you mentioned some humans
Lex Fridman (3:19:15.020)
in this wonderful story,
Charles Hoskinson (3:19:17.460)
you did make a video before we talked directed to me.
Lex Fridman (3:19:22.180)
Thank you so much for that.
Charles Hoskinson (3:19:24.660)
It came from a place of love.
Lex Fridman (3:19:29.460)
But it was basically saying, as we have been,
Charles Hoskinson (3:19:32.580)
you would love to talk about the technology,
Lex Fridman (3:19:34.420)
about the future that you're creating with Cardano
Lex Fridman (3:19:37.420)
and just the future of the cryptocurrency space.
Lex Fridman (3:19:40.220)
I think you're kind of worried
Charles Hoskinson (3:19:42.900)
that you'll be talking to a journalist
Lex Fridman (3:19:44.660)
that's looking for clickbait content, that kind of thing.
Lex Fridman (3:19:47.700)
But I'm fascinated by human beings.
Lex Fridman (3:19:49.420)
I think you're all, from an outsider perspective,
Charles Hoskinson (3:19:51.580)
incredible human beings.
Lex Fridman (3:19:52.780)
I don't know about personal intentions,
Charles Hoskinson (3:19:54.340)
all those kinds of stuff,
Lex Fridman (3:19:55.260)
but I think you're changing the world together
Charles Hoskinson (3:19:57.820)
in different ways.
Lex Fridman (3:19:59.060)
And I just wanted to sort of give you an opportunity.
Charles Hoskinson (3:20:02.500)
If there's, in the name of love and friendship,
Lex Fridman (3:20:06.420)
is there something from your history
Charles Hoskinson (3:20:09.700)
over the past decade or so,
Lex Fridman (3:20:11.380)
outside of technology and the human side of things
Charles Hoskinson (3:20:13.980)
that you draw inspiration from, you draw insight from,
Lex Fridman (3:20:16.940)
you're just proud that happened?
Charles Hoskinson (3:20:18.820)
I mean, it's like asking Paul McCartney about John Lennon.
Lex Fridman (3:20:21.940)
Tell us about John Lennon.
Charles Hoskinson (3:20:23.180)
It's like, you know.
Lex Fridman (3:20:24.300)
How much do you hate Yoko?
Charles Hoskinson (3:20:25.700)
For almost eight years now,
Lex Fridman (3:20:28.620)
I've been, it's just been this reoccurring pattern
Charles Hoskinson (3:20:31.300)
every interview.
Lex Fridman (3:20:32.140)
Tell us about your time at Ethereum.
Charles Hoskinson (3:20:33.820)
Those six months you spent there
Lex Fridman (3:20:35.300)
that were so pleasant and enjoyable.
Charles Hoskinson (3:20:37.380)
Tell us all about it.
Lex Fridman (3:20:38.380)
And tell us about your relationship with Vitalik.
Charles Hoskinson (3:20:40.780)
It's like, I barely talk to the guy.
Lex Fridman (3:20:42.260)
I see him every now and then.
Charles Hoskinson (3:20:43.420)
Like, every two years we say, hey.
Lex Fridman (3:20:44.900)
He says, hey.
Charles Hoskinson (3:20:45.740)
It's like, okay.
Lex Fridman (3:20:46.620)
Maybe 10, 20 years in the future,
Charles Hoskinson (3:20:49.180)
Walt Mossberg or Robo Walt will bring us together
Lex Fridman (3:20:52.540)
like he did Steve Jobs and Bill Gates.
Lex Fridman (3:20:55.820)
And we can kind of talk about, you know.
Lex Fridman (3:20:57.540)
That was a tense conversation, by the way.
Lex Fridman (3:20:59.460)
The 2007 interview?
Lex Fridman (3:21:00.820)
Yeah, the 2007.
Lex Fridman (3:21:01.660)
Oh, it was great though, wasn't it?
Lex Fridman (3:21:03.100)
Yeah, that was the body language.
Charles Hoskinson (3:21:05.580)
That was art.
Lex Fridman (3:21:06.460)
Yeah.
Charles Hoskinson (3:21:07.300)
That was fascinating.
Lex Fridman (3:21:08.860)
That was a fascinating study of human nature.
Charles Hoskinson (3:21:11.420)
Yeah, so maybe that'll be us.
Lex Fridman (3:21:12.980)
In like 10 or 20 years.
Lex Fridman (3:21:14.060)
Who the hell knows?
Lex Fridman (3:21:14.900)
The robot versions of all three of you.
Charles Hoskinson (3:21:16.340)
Yeah, my only point though is that, you know,
Lex Fridman (3:21:18.460)
it's a closed chapter and it's funny.
Charles Hoskinson (3:21:20.620)
I was there for six months.
Lex Fridman (3:21:21.740)
I've been building Cardano for years.
Charles Hoskinson (3:21:23.780)
We've done all this stuff.
Lex Fridman (3:21:25.300)
I've been to 52 countries.
Charles Hoskinson (3:21:27.140)
I love talking about those experiences.
Lex Fridman (3:21:29.540)
And there's so many of them.
Charles Hoskinson (3:21:30.580)
I've met heads of state.
Lex Fridman (3:21:32.040)
You know, I went to Mongolia, like eagle hunting
Charles Hoskinson (3:21:34.940)
and, you know, being bucked off horses
Lex Fridman (3:21:37.220)
and riding the sand dunes.
Charles Hoskinson (3:21:39.160)
We've invented all this new cool technology
Lex Fridman (3:21:43.880)
that the space itself is using.
Lex Fridman (3:21:45.800)
And we've had a chance to sit on government panels,
Lex Fridman (3:21:48.660)
pass laws, 24 laws in Wyoming.
Charles Hoskinson (3:21:51.400)
I mean, there's like all this amazing stuff that's there.
Lex Fridman (3:21:54.120)
And it's such a fun conversation.
Charles Hoskinson (3:21:55.640)
There's so many superheroes in that conversation,
Lex Fridman (3:21:57.500)
like Cailin Long and Taylor Limholm.
Lex Fridman (3:21:59.340)
And there's Alex Sherpanoi, who we already mentioned
Lex Fridman (3:22:03.040)
that I met along the travels.
Charles Hoskinson (3:22:04.440)
I met Ralph Merkle.
Lex Fridman (3:22:05.640)
Cool, I met all these amazing people along the way.
Charles Hoskinson (3:22:07.800)
I have fond memories of,
Lex Fridman (3:22:10.000)
by the way, you should interview him, by the way.
Charles Hoskinson (3:22:11.440)
Amazing guy, does nanotech now.
Lex Fridman (3:22:13.800)
You know, I met, you know, I was hanging out
Charles Hoskinson (3:22:15.520)
with Sylvia McCauley.
Lex Fridman (3:22:16.480)
And I remember before we launched Yalgrant,
Charles Hoskinson (3:22:18.400)
I said, you should really just do a Bitcoin cash style play
Lex Fridman (3:22:21.240)
and airdrop Bitcoin.
Lex Fridman (3:22:22.320)
What the hell are you doing distributing this?
Lex Fridman (3:22:24.320)
He's like, trust me, I know what I'm doing.
Charles Hoskinson (3:22:26.440)
You know, so it's like so many great conversations
Lex Fridman (3:22:29.160)
and so many great people.
Lex Fridman (3:22:30.120)
And what I've really noticed in this industry,
Lex Fridman (3:22:32.040)
when you separate the tribalism, the maximum side,
Charles Hoskinson (3:22:34.760)
there really is a love of creativity and building.
Lex Fridman (3:22:38.880)
And there's like no other industry like it.
Charles Hoskinson (3:22:41.120)
I've been in many different places in life.
Lex Fridman (3:22:42.960)
And here, people just love art.
Charles Hoskinson (3:22:44.920)
They love beauty.
Lex Fridman (3:22:45.760)
They love the unknown.
Charles Hoskinson (3:22:47.560)
They love pushing things.
Lex Fridman (3:22:48.600)
They love, you know, really, you know, in some cases,
Charles Hoskinson (3:22:53.160)
not necessarily the most socially beneficial way,
Lex Fridman (3:22:55.420)
but they really love the challenge, right?
Lex Fridman (3:22:58.560)
And that has been fun.
Lex Fridman (3:23:00.720)
I wouldn't trade it for anything in the world.
Charles Hoskinson (3:23:02.600)
The dark side of the industry is that people love labels.
Lex Fridman (3:23:07.480)
They love saying this person's good.
Charles Hoskinson (3:23:09.200)
This person's evil.
Lex Fridman (3:23:10.420)
This person's a sociopath.
Charles Hoskinson (3:23:11.960)
This person's not.
Lex Fridman (3:23:12.960)
And by the way, they've never met that person.
Charles Hoskinson (3:23:15.080)
They've never interacted with that person.
Lex Fridman (3:23:16.840)
And they just say, well, I heard from this person,
Charles Hoskinson (3:23:19.620)
I read this book, or I did that.
Lex Fridman (3:23:22.000)
I was like, oh, so some books written by a journalist
Charles Hoskinson (3:23:24.000)
makes $50,000 a year who's looking for a movie deal,
Lex Fridman (3:23:27.560)
say that somebody said this or did this
Charles Hoskinson (3:23:29.840)
in an unconfirmed way.
Lex Fridman (3:23:32.040)
What can you do, sue them for slander?
Charles Hoskinson (3:23:33.720)
I mean, so you just let it ride and you let it roll.
Lex Fridman (3:23:36.400)
And if it was just ending there, that'd be great.
Lex Fridman (3:23:38.480)
But the problem is it cascades and people just repost it
Lex Fridman (3:23:41.680)
and they relive it again and again and again.
Lex Fridman (3:23:44.160)
And then what do you do about it?
Lex Fridman (3:23:45.200)
You eventually just say,
Charles Hoskinson (3:23:46.040)
I'm not gonna talk about it anymore.
Lex Fridman (3:23:47.440)
I'm done with it.
Lex Fridman (3:23:48.400)
And you move on and you say, you know what?
Lex Fridman (3:23:50.120)
If it's your problem, it's your problem.
Charles Hoskinson (3:23:51.400)
It's your reality that you wanna live in.
Lex Fridman (3:23:53.240)
I'll be defined by the things that I achieve and do
Lex Fridman (3:23:55.800)
and the people that we help and the things that we build.
Lex Fridman (3:23:58.640)
And, you know, since I started in this industry,
Charles Hoskinson (3:24:00.960)
I've gotten to a point where not only do we have
Lex Fridman (3:24:03.560)
this amazing company with these incredible people
Charles Hoskinson (3:24:06.360)
who work at this company,
Lex Fridman (3:24:07.920)
but we also have the ability to pursue
Charles Hoskinson (3:24:09.600)
amazing different interests.
Lex Fridman (3:24:10.920)
Like I met Ben Gortzell.
Lex Fridman (3:24:13.000)
And Ben and I are gonna do an AGI project together.
Lex Fridman (3:24:15.600)
And of all places, Rwanda.
Lex Fridman (3:24:17.440)
And he gave me this 85 fucking page paper.
Lex Fridman (3:24:20.200)
He was wearing that damn hat that he always wears.
Charles Hoskinson (3:24:23.080)
I think he showers with the hat on.
Lex Fridman (3:24:25.560)
He never takes that thing off.
Charles Hoskinson (3:24:27.200)
I think he refused, I interviewed him
Lex Fridman (3:24:29.320)
and he refused to tell me the story of the hat.
Charles Hoskinson (3:24:32.040)
He wouldn't tell me either.
Lex Fridman (3:24:33.040)
I interviewed him as well in Wyoming.
Lex Fridman (3:24:34.960)
And every time I call him, he'll have his shirt off.
Lex Fridman (3:24:37.760)
He'll have the fucking hat on.
Lex Fridman (3:24:39.120)
And now all I can think about is the hat.
Lex Fridman (3:24:41.160)
I wonder what the story there is.
Charles Hoskinson (3:24:42.640)
I know, it's like, it's gotta be.
Lex Fridman (3:24:44.880)
That might be the AGI.
Charles Hoskinson (3:24:46.000)
Yeah, exactly.
Lex Fridman (3:24:46.840)
But anyway, he gives me this 80 page paper
Lex Fridman (3:24:48.800)
and he says, Charles, it's like the combination
Lex Fridman (3:24:50.920)
of everything.
Charles Hoskinson (3:24:51.760)
This is how we're gonna do AGI.
Lex Fridman (3:24:53.200)
And I said, that's crazy, Ben.
Charles Hoskinson (3:24:54.400)
I said, I'll throw some money at it.
Lex Fridman (3:24:56.400)
So we're gonna hire some developers.
Charles Hoskinson (3:24:58.120)
I have no idea where it's gonna go,
Lex Fridman (3:24:59.480)
but I mean, I get to hang out with Ben Corson.
Charles Hoskinson (3:25:02.360)
That's fun.
Lex Fridman (3:25:03.440)
That's the kind of stuff.
Lex Fridman (3:25:04.280)
And that's the really cool side of the space.
Lex Fridman (3:25:06.360)
And it's what I enjoy.
Lex Fridman (3:25:09.080)
And the Vitalik rivalry thing, the Ethereum thing,
Lex Fridman (3:25:12.360)
I try my best not to mention it.
Charles Hoskinson (3:25:14.480)
I hate the fact that still when Bloomberg
Lex Fridman (3:25:16.640)
or anybody else writes a story about me,
Charles Hoskinson (3:25:18.200)
they'll say Ethereum co founder.
Lex Fridman (3:25:20.200)
Like, can you say something else?
Charles Hoskinson (3:25:22.360)
Well, I think if I've learned anything from the internet,
Lex Fridman (3:25:24.520)
you can't resist that kind of stuff.
Charles Hoskinson (3:25:25.840)
You just have to, this is Elon.
Lex Fridman (3:25:27.680)
It's the joke, joke it away.
Charles Hoskinson (3:25:30.040)
I've noticed this, this is already starting
Lex Fridman (3:25:31.760)
to happen with me.
Charles Hoskinson (3:25:32.600)
It's like, people just make up stuff.
Lex Fridman (3:25:34.200)
They haven't made up anything interesting yet,
Lex Fridman (3:25:36.400)
but they could.
Lex Fridman (3:25:37.960)
And I've seen that with Bill Gates, for example,
Charles Hoskinson (3:25:39.880)
just stuff being made up.
Lex Fridman (3:25:41.400)
I mean, probably half of it is true.
Charles Hoskinson (3:25:43.120)
Sorry, internet.
Lex Fridman (3:25:43.960)
I'm sorry.
Lex Fridman (3:25:44.800)
But like, I guess what I realized,
Lex Fridman (3:25:48.280)
this is the dark side of memes,
Charles Hoskinson (3:25:49.720)
is you can just make something up and it'll spread.
Lex Fridman (3:25:52.920)
And then that's it.
Lex Fridman (3:25:53.760)
And that's what happens.
Lex Fridman (3:25:55.680)
But then, and the problem is half the world will believe it.
Charles Hoskinson (3:25:58.360)
Yeah, it could be good stuff, it could be bad stuff.
Lex Fridman (3:26:01.000)
So I guess the hope is it bounces off in the end.
Charles Hoskinson (3:26:04.280)
I tend to believe you almost want to play with that
Lex Fridman (3:26:06.800)
and not take it seriously.
Charles Hoskinson (3:26:08.040)
Just kind of laugh it off and enjoy life
Lex Fridman (3:26:10.040)
and keep creating, keep doing awesome stuff.
Charles Hoskinson (3:26:13.240)
Operating both in the physical space with other humans
Lex Fridman (3:26:16.160)
and in the digital space with humans and AI systems
Lex Fridman (3:26:18.640)
and just have fun.
Lex Fridman (3:26:19.800)
Because most of us in the long arc of history
Charles Hoskinson (3:26:22.960)
will be completely forgotten and will matter.
Lex Fridman (3:26:26.080)
It'll all be some kind of,
Charles Hoskinson (3:26:27.480)
just like H Hacker's Guide to the Galaxy
Lex Fridman (3:26:30.600)
will just be one sentence that summarizes
Charles Hoskinson (3:26:32.280)
all of our existence.
Lex Fridman (3:26:34.360)
And the sad thing is most of us will not be part
Charles Hoskinson (3:26:37.360)
of that sentence or all of us.
Lex Fridman (3:26:38.920)
Well, thanks for all the fish, Lex.
Charles Hoskinson (3:26:41.000)
Thanks for all the fish.
Lex Fridman (3:26:42.000)
The dolphins are running this thing
Lex Fridman (3:26:43.600)
and they're talking to the UFOs recently,
Lex Fridman (3:26:46.280)
which is very interesting.
Charles Hoskinson (3:26:48.080)
Because the UFOs keep going to the water.
Lex Fridman (3:26:50.600)
So we humans assume that the UFOs are here to visit,
Charles Hoskinson (3:26:53.760)
the aliens are here to visit us,
Lex Fridman (3:26:55.200)
but it's probably the fish.
Charles Hoskinson (3:26:56.400)
No, I just think it's next generation aircraft
Lex Fridman (3:26:58.600)
that we're using.
Charles Hoskinson (3:27:00.120)
Oh, that we're just not aware of.
Lex Fridman (3:27:01.520)
But why are they talking to the fish?
Charles Hoskinson (3:27:03.120)
Well, that's the place you test hypersonic aircraft
Lex Fridman (3:27:05.760)
is over oceans.
Lex Fridman (3:27:06.680)
So that's the Russians with their hypersonic nuclear weapons.
Lex Fridman (3:27:10.400)
That's what a lot.
Charles Hoskinson (3:27:11.240)
Rods from God, man, rods from God.
Lex Fridman (3:27:13.760)
So let me try to transition from UFOs to Abraham Lincoln.
Charles Hoskinson (3:27:17.800)
Lincoln said that nearly all men can stand adversity,
Lex Fridman (3:27:22.920)
but if you want to test a man's character, give him power.
Lex Fridman (3:27:27.000)
Do you think power and money can corrupt most people?
Lex Fridman (3:27:31.200)
And if so, do you worry of this corrupting force
Lex Fridman (3:27:33.960)
on your own mind?
Lex Fridman (3:27:35.480)
You're one of the leading minds in the cryptocurrency space.
Charles Hoskinson (3:27:40.360)
You're the leader of the Cardano project.
Lex Fridman (3:27:44.120)
You're the king of the rats.
Charles Hoskinson (3:27:47.160)
Does this corrupt your mind,
Lex Fridman (3:27:49.120)
both the power and the money of it?
Charles Hoskinson (3:27:51.360)
Yeah, I mean, you see this most pervasively
Lex Fridman (3:27:53.400)
with people who inherit a large amount of money
Charles Hoskinson (3:27:55.920)
or title like dynasties, like the Melons or the Rockefellers
Lex Fridman (3:28:00.400)
or other people.
Charles Hoskinson (3:28:01.240)
It's the worst thing you can do to somebody
Lex Fridman (3:28:02.720)
is just hand them an enormous amount of power
Charles Hoskinson (3:28:04.600)
that they're not prepared for.
Lex Fridman (3:28:06.600)
And the challenge with this space is like,
Charles Hoskinson (3:28:08.760)
everybody's young and we're all billionaires now
Lex Fridman (3:28:11.480)
and we have these cult followings
Lex Fridman (3:28:12.920)
and do all these things, right?
Lex Fridman (3:28:14.320)
Nobody really says no to you.
Charles Hoskinson (3:28:15.840)
Like, for example, I have this ranch up in Wyoming
Lex Fridman (3:28:18.960)
and it has 400 bison on it.
Lex Fridman (3:28:21.640)
So now I'm a bison rancher.
Lex Fridman (3:28:23.320)
Like, if somebody was like monitoring, auditing,
Charles Hoskinson (3:28:28.560)
that'd be like, Charles, do you have any experience
Lex Fridman (3:28:30.080)
raising, taking care of bison?
Charles Hoskinson (3:28:31.640)
I'd be like, no.
Lex Fridman (3:28:33.000)
So you think it's really a good idea
Charles Hoskinson (3:28:34.440)
to have this ranch with 400 bison running around.
Lex Fridman (3:28:36.800)
What the hell are you gonna do with bison?
Charles Hoskinson (3:28:38.080)
I just have to figure out
Lex Fridman (3:28:39.600)
what I'm gonna do with these bison.
Charles Hoskinson (3:28:40.920)
So, and I, you know, we'll make a video game.
Lex Fridman (3:28:43.080)
We'll do crypto, we'll do crypto.
Charles Hoskinson (3:28:44.600)
We'll make a video game, we'll do crypto bison.
Lex Fridman (3:28:47.360)
But you're gonna get one.
Charles Hoskinson (3:28:49.480)
I'm not pulling, thank you, I'd love to.
Lex Fridman (3:28:52.160)
I'm not pulling at that string just yet.
Lex Fridman (3:28:53.720)
So I'm wondering how you're gonna connect
Lex Fridman (3:28:56.520)
this back to power.
Charles Hoskinson (3:28:57.640)
Right.
Lex Fridman (3:28:58.480)
And so, but my point is that when you are unrestrained,
Charles Hoskinson (3:29:01.480)
like literally no one can say no,
Lex Fridman (3:29:03.640)
or you have the ability to distort reality around yourself
Lex Fridman (3:29:06.880)
and you're not constrained by social customs,
Lex Fridman (3:29:10.320)
it creates a situation where you start losing perspective.
Charles Hoskinson (3:29:16.160)
You're not grounded anymore, I think.
Lex Fridman (3:29:17.920)
So it's less of a question of, will you become evil or not?
Charles Hoskinson (3:29:20.760)
It's more of a question of,
Lex Fridman (3:29:21.600)
will you lose so much touch with humanity
Lex Fridman (3:29:24.080)
that you just can't relate or understand people?
Lex Fridman (3:29:26.480)
And then you inadvertently, by your actions,
Charles Hoskinson (3:29:28.440)
start harming people, either through the policies
Lex Fridman (3:29:31.240)
that you pursue or, you know,
Charles Hoskinson (3:29:33.120)
the things that you start building and so forth.
Lex Fridman (3:29:35.880)
So I think the best inoculation against that
Charles Hoskinson (3:29:38.800)
is to surround yourself with activities
Lex Fridman (3:29:40.840)
that are utterly divorced from your reputation and status.
Charles Hoskinson (3:29:44.040)
The best thing are animals and gardening.
Lex Fridman (3:29:46.800)
Because, you know, a donkey doesn't care
Charles Hoskinson (3:29:48.200)
if you're a billionaire or a baroque,
Lex Fridman (3:29:49.360)
they'll shit on you exactly the same way.
Charles Hoskinson (3:29:51.360)
Yeah.
Lex Fridman (3:29:52.600)
And so there's a humility behind these types of activities
Lex Fridman (3:29:55.800)
and these things, and there's a honest work component.
Lex Fridman (3:30:00.480)
Like when you grow hay or whatever, you have to plant,
Charles Hoskinson (3:30:03.360)
you have to actually water, you have to irrigate,
Lex Fridman (3:30:05.120)
you have to actually be there.
Lex Fridman (3:30:06.160)
And if you can't use some excuse,
Lex Fridman (3:30:07.640)
well, I was meeting the president of El Salvador,
Charles Hoskinson (3:30:09.680)
I was doing this, and the hay doesn't give a shit.
Lex Fridman (3:30:12.560)
It's hay, right?
Lex Fridman (3:30:13.680)
So it grounds and connects you.
Lex Fridman (3:30:14.800)
The other thing is you have to get used to giving away.
Charles Hoskinson (3:30:17.200)
All the best things in my life have come
Lex Fridman (3:30:19.440)
as a consequence of first giving.
Charles Hoskinson (3:30:21.360)
Like I got started in the cryptocurrency space
Lex Fridman (3:30:23.040)
by giving away a free class.
Charles Hoskinson (3:30:24.320)
Bitcoin or how we learn to stop worrying or love crypto.
Lex Fridman (3:30:26.520)
You did a free podcast, right?
Charles Hoskinson (3:30:28.160)
In life, if you give and you develop that mindset
Lex Fridman (3:30:31.360)
of I'm not attached to the things I have,
Lex Fridman (3:30:33.920)
and if push comes to shove, it goes away,
Lex Fridman (3:30:36.280)
usually you get more back.
Charles Hoskinson (3:30:37.760)
Like I gave away all my ether, I never received any of it.
Lex Fridman (3:30:39.880)
293,000 ether at the all time high over $1.2 billion.
Charles Hoskinson (3:30:44.320)
I gave it to my secretary.
Lex Fridman (3:30:46.040)
I had no idea if it was gonna be worth anything or not,
Lex Fridman (3:30:47.960)
but he kind of got shafted.
Lex Fridman (3:30:49.120)
And I was like, well, they don't like me,
Lex Fridman (3:30:51.120)
so they don't like you by the transitive property
Lex Fridman (3:30:53.120)
of relationships, so you're screwed.
Lex Fridman (3:30:55.600)
And he's like, well, I'm gonna go back
Lex Fridman (3:30:56.720)
and my wife is probably gonna divorce me
Lex Fridman (3:30:58.440)
and all this stuff, and what do I do?
Lex Fridman (3:31:00.040)
And I said, well, I'll give you my ether.
Charles Hoskinson (3:31:01.120)
I don't know if it's gonna be worth anything.
Lex Fridman (3:31:02.840)
So he's still pretty good.
Lex Fridman (3:31:05.240)
But then again, regardless of doing that,
Lex Fridman (3:31:09.200)
I now have Cordano, I have this great career,
Charles Hoskinson (3:31:11.360)
I've done all these amazing things.
Lex Fridman (3:31:12.760)
So I think that's the single best way of handling power
Charles Hoskinson (3:31:16.040)
is you have to do things to keep yourself grounded.
Lex Fridman (3:31:19.520)
Case of Washington, he was deeply connected to Mount Vernon
Charles Hoskinson (3:31:22.680)
during the Revolutionary War, he was like sending letters,
Lex Fridman (3:31:25.200)
talking about the irrigation ditches and the barn
Lex Fridman (3:31:27.400)
and things like that.
Lex Fridman (3:31:28.440)
He was always connected to that.
Lex Fridman (3:31:29.880)
And then also develop a mindset
Lex Fridman (3:31:31.480)
that you're only here temporarily.
Charles Hoskinson (3:31:34.240)
Everything you have is finite.
Lex Fridman (3:31:35.680)
It's going to go away at some point.
Charles Hoskinson (3:31:37.680)
No matter how much you want to keep it, you will die
Lex Fridman (3:31:40.360)
and somebody else will have it.
Lex Fridman (3:31:42.480)
So you live for the next generation.
Lex Fridman (3:31:44.800)
You don't live for yourself.
Charles Hoskinson (3:31:45.800)
You look to the future and you say,
Lex Fridman (3:31:47.120)
what am I going to leave behind?
Lex Fridman (3:31:48.400)
What am I going to transmit?
Lex Fridman (3:31:50.000)
And then in that kind of mindset always forces you
Charles Hoskinson (3:31:52.880)
to be more gracious, cooperative
Lex Fridman (3:31:55.720)
and collaborative with people.
Charles Hoskinson (3:31:57.160)
All these dictators, they are egomaniacs
Lex Fridman (3:32:00.680)
and they connected these fantasies
Lex Fridman (3:32:02.880)
and they live for themselves.
Lex Fridman (3:32:04.080)
Look at Xi in China, he's unraveling a power structure
Charles Hoskinson (3:32:07.520)
that was what made China, China today.
Lex Fridman (3:32:10.520)
After Mao, they said, we probably shouldn't have another
Charles Hoskinson (3:32:12.840)
one of those guys.
Lex Fridman (3:32:13.840)
And so they said, let's build something
Charles Hoskinson (3:32:16.120)
where there's checks and balances
Lex Fridman (3:32:17.840)
and no one person is going to run the whole show
Charles Hoskinson (3:32:21.120)
or else it'll descend and regress and we'll have problems.
Lex Fridman (3:32:24.320)
And then what he's done, he's thinking only about himself,
Charles Hoskinson (3:32:27.200)
not the best interest of China.
Lex Fridman (3:32:29.120)
So he's systematically unraveling a system
Charles Hoskinson (3:32:31.480)
they've been embracing for over 40 years.
Lex Fridman (3:32:34.440)
And to what end?
Charles Hoskinson (3:32:35.880)
After he dies, the next guy who comes in,
Lex Fridman (3:32:37.760)
even as he's super competent,
Charles Hoskinson (3:32:39.400)
the next guy is going to horrifically abuse
Lex Fridman (3:32:41.520)
that power structure.
Lex Fridman (3:32:42.640)
And the same thing happened with the Romans.
Lex Fridman (3:32:45.160)
After Augustus, the great emperor,
Charles Hoskinson (3:32:47.520)
then suddenly down the line you have Caligula
Lex Fridman (3:32:49.880)
and Nero and all these other terrible emperors
Charles Hoskinson (3:32:51.880)
that just destroyed everything that the Republic
Lex Fridman (3:32:54.480)
and the empire sought to achieve.
Lex Fridman (3:32:56.560)
So you have to think for the future,
Lex Fridman (3:32:58.880)
you have to think in institutions and systems,
Charles Hoskinson (3:33:01.120)
you have to have things that ground yourself
Lex Fridman (3:33:03.280)
and you have to be fully prepared to lose everything
Lex Fridman (3:33:05.800)
and give up everything.
Lex Fridman (3:33:07.080)
After I left Ethereum, I had nothing, okay?
Charles Hoskinson (3:33:10.040)
Reputation was damaged, not a lot of money,
Lex Fridman (3:33:12.920)
nobody really wanna work with me,
Charles Hoskinson (3:33:14.120)
no one pick up a phone for two whole years, it was horrible.
Lex Fridman (3:33:18.000)
And so I was at bedrock in that experience.
Lex Fridman (3:33:21.040)
And now look at where I'm at.
Lex Fridman (3:33:22.600)
I built all the way up to that.
Lex Fridman (3:33:24.200)
And so that wasn't by accident,
Lex Fridman (3:33:25.960)
it was I had to surround myself with amazing people.
Lex Fridman (3:33:29.240)
Why would amazing people wanna surround themselves
Lex Fridman (3:33:31.080)
with me if I was this narcissistic asshole
Charles Hoskinson (3:33:34.440)
who just was like, it's me, me, me,
Lex Fridman (3:33:36.920)
everything would be a transactional relationship.
Charles Hoskinson (3:33:41.320)
It would be okay, we'll get as much as we can
Lex Fridman (3:33:43.200)
and then run away as quickly as possible.
Charles Hoskinson (3:33:45.280)
Instead it was, I'm going to invest in you
Lex Fridman (3:33:47.640)
and maybe I'll win, maybe I won't win,
Lex Fridman (3:33:49.480)
but I'll be the last guy to leave the boat.
Lex Fridman (3:33:51.600)
If we're freezing to death, you get my coat
Lex Fridman (3:33:54.200)
and I'll just deal with the cold, that kind of mindset.
Lex Fridman (3:33:57.520)
You have to have that, I got that from my dad,
Charles Hoskinson (3:33:59.880)
he got it from his father.
Lex Fridman (3:34:02.040)
My grandfather and great grandfather,
Charles Hoskinson (3:34:04.160)
my dad said, I grew up in Montana
Lex Fridman (3:34:05.600)
and they were products of the Homestead Act.
Charles Hoskinson (3:34:07.960)
Very rough, Montana.
Lex Fridman (3:34:09.920)
A lot of people died and froze to death up there
Charles Hoskinson (3:34:11.960)
or eaten by animals or something
Lex Fridman (3:34:13.280)
or shot by their neighbors.
Lex Fridman (3:34:14.840)
And nobody investigates anything because it's Montana.
Lex Fridman (3:34:18.080)
So the only way you survive is by taking care
Charles Hoskinson (3:34:21.160)
of each other and being a good member of that community.
Lex Fridman (3:34:23.520)
And if somebody gets big, you have this implicit desire
Charles Hoskinson (3:34:26.600)
to go and give back and take care of the community
Lex Fridman (3:34:29.240)
that you came from and invest in that community.
Charles Hoskinson (3:34:31.520)
Like I came from the mathematical community.
Lex Fridman (3:34:32.920)
I never completed a PhD, but one of the things
Charles Hoskinson (3:34:35.480)
that I'm doing is I'm going to put $20 million
Lex Fridman (3:34:38.120)
and set up a center to do automated theorem proving
Lex Fridman (3:34:40.360)
and we're going to heavily invest in lean
Lex Fridman (3:34:42.440)
because I'm super excited about mechanizing math
Lex Fridman (3:34:44.640)
and making machine understandable.
Lex Fridman (3:34:46.400)
I know all these guys who do this work.
Charles Hoskinson (3:34:48.280)
There's like all these mathematicians
Lex Fridman (3:34:50.400)
and computer scientists and no one pays attention to them
Lex Fridman (3:34:52.640)
and they're kind of like the redheaded stepchildren
Lex Fridman (3:34:54.680)
of mathematics and they live on the boundaries
Lex Fridman (3:34:56.480)
and periphery.
Lex Fridman (3:34:57.320)
Meanwhile, they're super passionate
Lex Fridman (3:34:58.880)
and they absolutely love what they do.
Lex Fridman (3:35:01.240)
And if only they had the right resources,
Charles Hoskinson (3:35:05.200)
within 50 or 100 years, what they're doing
Lex Fridman (3:35:07.480)
can probably become the dominant model
Charles Hoskinson (3:35:09.160)
of how to do mathematics.
Lex Fridman (3:35:10.800)
So I'm now in a position where I have the financial means
Charles Hoskinson (3:35:14.160)
to take care of these guys.
Lex Fridman (3:35:15.800)
So all I have to do is just call them up and say,
Charles Hoskinson (3:35:18.080)
hey, would you like to work with, oh, absolutely
Lex Fridman (3:35:20.840)
and cut a check and it's done.
Lex Fridman (3:35:22.840)
So the interesting tension here,
Lex Fridman (3:35:25.160)
so we talked about ways to prevent power
Charles Hoskinson (3:35:27.960)
from corrupting a human being
Lex Fridman (3:35:30.240)
that's in a leadership position.
Charles Hoskinson (3:35:32.000)
There's an interesting case in the cryptocurrency space
Lex Fridman (3:35:35.960)
of Bitcoin and Satoshi Nakamoto
Charles Hoskinson (3:35:38.560)
that's basically doesn't have a leader.
Lex Fridman (3:35:40.840)
So the benefit of a leader is somebody that perhaps
Charles Hoskinson (3:35:46.200)
even when they don't carry power,
Lex Fridman (3:35:48.480)
maintains a little bit of a flame of a vision.
Charles Hoskinson (3:35:52.800)
I suppose Bitcoin has that with the original work
Lex Fridman (3:35:56.640)
by Satoshi Nakamoto and the sort of that,
Charles Hoskinson (3:36:00.920)
even though it's anonymous,
Lex Fridman (3:36:02.600)
the idea still lives on through the community,
Lex Fridman (3:36:05.120)
but nevertheless, the leader is anonymous.
Lex Fridman (3:36:08.440)
Do you think this is an interesting case study
Lex Fridman (3:36:11.960)
about leadership is for the leader to maintain anonymity?
Lex Fridman (3:36:16.880)
It was a saying from Sun Tzu, paraphrasing it,
Charles Hoskinson (3:36:19.400)
the best leaders are felt but never seen.
Lex Fridman (3:36:22.640)
So I think that's exactly right.
Charles Hoskinson (3:36:24.160)
The less the leader can be in the room
Lex Fridman (3:36:26.680)
and the more the principles of the leader are in the room,
Charles Hoskinson (3:36:28.840)
the better for the firm
Lex Fridman (3:36:29.920)
because what you're doing is creating more leaders that way.
Charles Hoskinson (3:36:32.480)
You're inspiring the next generation,
Lex Fridman (3:36:34.440)
the next wave, the next circle out
Charles Hoskinson (3:36:36.160)
to act with those principles,
Lex Fridman (3:36:38.480)
but contribute in their own way and their own flair.
Lex Fridman (3:36:41.160)
And so you gain collective intelligence
Lex Fridman (3:36:43.040)
inside the organization
Charles Hoskinson (3:36:44.120)
instead of just constraining yourself
Lex Fridman (3:36:45.760)
to however the great the leader can be.
Charles Hoskinson (3:36:48.240)
The other side of it is if the leader's principles
Lex Fridman (3:36:50.600)
are too strong, so this is the dark side of it,
Charles Hoskinson (3:36:52.760)
you end up having Disney with Walt Disney after he died.
Lex Fridman (3:36:56.240)
For 20 years, people said, we don't do that
Charles Hoskinson (3:36:58.200)
because Walt Disney wouldn't do it that way.
Lex Fridman (3:37:00.600)
Or to a lesser extent, Apple is the only don't do that
Charles Hoskinson (3:37:03.320)
because Steve Jobs wouldn't do it that way.
Lex Fridman (3:37:05.400)
Well, he's dead, he's gone.
Charles Hoskinson (3:37:06.920)
Move on.
Lex Fridman (3:37:07.760)
So somebody, I think, asked you whether you're a clone
Charles Hoskinson (3:37:10.600)
or a deep fake, and you said that you admitted,
Lex Fridman (3:37:14.000)
you slipped up on video saying that you're a deep fake.
Lex Fridman (3:37:17.320)
So on that talk.
Lex Fridman (3:37:18.160)
I'm actually a poker playing robot that escaped a lab.
Charles Hoskinson (3:37:20.920)
The truth finally comes out,
Lex Fridman (3:37:22.280)
but I said on that topic,
Lex Fridman (3:37:23.640)
who do you think is Satoshi Nakamoto?
Lex Fridman (3:37:25.600)
Is it possible that you are, in fact, Satoshi Nakamoto?
Charles Hoskinson (3:37:29.160)
No.
Lex Fridman (3:37:32.280)
If you have a preponderance of the evidence,
Charles Hoskinson (3:37:35.720)
I think the most likely candidate would be Adam Back.
Lex Fridman (3:37:39.040)
It's the Occam's razor candidate.
Lex Fridman (3:37:41.160)
And mostly because he's the right place, right time,
Lex Fridman (3:37:43.760)
right age, right skillset.
Charles Hoskinson (3:37:46.080)
If you look at the design of Bitcoin,
Lex Fridman (3:37:48.440)
the types of decisions,
Charles Hoskinson (3:37:49.440)
like the use of fourth, the scripting language,
Lex Fridman (3:37:52.000)
it was pretty common in English and European pedagogy
Charles Hoskinson (3:37:54.760)
in the 1980s and 1990s.
Lex Fridman (3:37:56.120)
It was like an example language for a stack based assembly
Lex Fridman (3:37:58.920)
and like little stuff like that, little quirks like that.
Lex Fridman (3:38:01.800)
Also, he created Hashcash,
Charles Hoskinson (3:38:03.080)
which was the predecessor of proof of work.
Lex Fridman (3:38:05.200)
He just kind of got a chip on his shoulder
Charles Hoskinson (3:38:06.600)
that Microsoft never did anything with it.
Lex Fridman (3:38:08.840)
So he's probably looking for something.
Charles Hoskinson (3:38:10.200)
He grew up with all the cypherpunks.
Lex Fridman (3:38:11.800)
He knew of Hal Finney.
Charles Hoskinson (3:38:13.640)
He knew of all these people.
Lex Fridman (3:38:15.280)
He knew Phil Zimmerman.
Lex Fridman (3:38:16.120)
You don't think it's Hal Finney?
Lex Fridman (3:38:17.160)
Well, no, because the code was not good enough.
Charles Hoskinson (3:38:21.000)
Hal was a Unix, Linux guy.
Lex Fridman (3:38:23.160)
He was a talented programmer.
Charles Hoskinson (3:38:24.920)
He was a talented developer.
Lex Fridman (3:38:26.480)
The initial code for Bitcoin was developed
Charles Hoskinson (3:38:28.640)
to look like on a Windows machine.
Lex Fridman (3:38:31.640)
Adam worked at Microsoft, go figure.
Lex Fridman (3:38:33.560)
And also it was very academic and it had to be cleaned up
Lex Fridman (3:38:36.320)
and a lot of things had to be patched up and fixed.
Charles Hoskinson (3:38:38.920)
If a guy like Hal developed it,
Lex Fridman (3:38:40.800)
they probably had less of the,
Charles Hoskinson (3:38:43.760)
let's use secp256k1 and these types of things
Lex Fridman (3:38:47.400)
and more of like, hey,
Charles Hoskinson (3:38:48.720)
let's build this cool engineering thing
Lex Fridman (3:38:50.760)
and we'll figure out the protocol design later on.
Charles Hoskinson (3:38:53.280)
It just stinks of an older academic,
Lex Fridman (3:38:56.520)
the initial design of Bitcoin
Lex Fridman (3:38:58.000)
and the initial rollout of Bitcoin.
Lex Fridman (3:38:59.480)
And then brilliant people like Greg Maxwell and others,
Charles Hoskinson (3:39:02.000)
they came and cleaned it all up.
Lex Fridman (3:39:03.840)
And lo and behold, where's Adam?
Charles Hoskinson (3:39:05.520)
Like the CEO of the largest Bitcoin development company
Lex Fridman (3:39:08.360)
in the space who's trying to keep working on
Lex Fridman (3:39:10.520)
and building out Bitcoin.
Lex Fridman (3:39:11.760)
And where the hell was Adam when Satoshi was around?
Charles Hoskinson (3:39:14.840)
I don't think there was any overlap
Lex Fridman (3:39:17.080)
where they were both together at the same period of time.
Lex Fridman (3:39:19.640)
But I mean, if you really care, you could even do this.
Lex Fridman (3:39:22.760)
There's a lovely paper written by the US Army.
Charles Hoskinson (3:39:25.320)
If you just Google like code stalometry US Army,
Lex Fridman (3:39:28.560)
it's a technique where you can use ML
Lex Fridman (3:39:31.720)
and a few other things to actually kind of develop
Lex Fridman (3:39:33.720)
a fingerprint for the way that people write code.
Lex Fridman (3:39:36.320)
So all you gotta do is take the original Bitcoin source code
Lex Fridman (3:39:39.320)
and then take all the open source repos
Charles Hoskinson (3:39:41.600)
from around that time period and before
Lex Fridman (3:39:43.640)
and see if there's a match between those two.
Charles Hoskinson (3:39:46.600)
Now, if he's really good at creating an alias,
Lex Fridman (3:39:49.560)
probably not so good at obfuscating the code
Charles Hoskinson (3:39:52.240)
that was written.
Lex Fridman (3:39:53.120)
So the odds are that you'd probably find a match
Charles Hoskinson (3:39:55.320)
to a repo that's connected to a real life human identity
Lex Fridman (3:39:58.120)
or at least a weaker opsec because you're younger,
Charles Hoskinson (3:40:01.880)
you have weaker opsec.
Lex Fridman (3:40:03.000)
Do you know if people have tried that?
Charles Hoskinson (3:40:04.160)
I don't think anybody's actually done it,
Lex Fridman (3:40:05.760)
but there's actually a beautiful paper.
Charles Hoskinson (3:40:07.320)
It's like 94% accurate, the code stalometry.
Lex Fridman (3:40:09.760)
The code stalometry.
Lex Fridman (3:40:10.600)
So I've, for various reasons, I've worked with people
Lex Fridman (3:40:15.120)
that work on stalometry of natural language.
Charles Hoskinson (3:40:17.760)
Okay.
Lex Fridman (3:40:18.720)
And I think it matches closest to Nick Sabo
Charles Hoskinson (3:40:22.240)
if you actually do the written stalometry analysis
Lex Fridman (3:40:26.440)
of Satoshi's writings to Sabo's.
Lex Fridman (3:40:28.400)
So I meant stalometry as a field.
Lex Fridman (3:40:30.040)
I didn't actually look for application
Charles Hoskinson (3:40:31.760)
for this particular problem.
Lex Fridman (3:40:33.560)
But so you're saying Nick Sabo is the closest match.
Charles Hoskinson (3:40:36.520)
Yeah, somebody did it years.
Lex Fridman (3:40:37.800)
I didn't look at if the model was sound or not,
Lex Fridman (3:40:39.800)
but I just remember reading on a Bitcoin talk
Lex Fridman (3:40:41.480)
and Sabo was another one of the common candidates.
Lex Fridman (3:40:44.240)
How many Sabo and Adam are probably the top three things
Lex Fridman (3:40:48.000)
that people could list.
Lex Fridman (3:40:48.840)
What do you think about this idea of anonymity,
Lex Fridman (3:40:51.080)
of publishing something anonymously?
Lex Fridman (3:40:53.040)
Would you ever consider publishing a paper?
Lex Fridman (3:40:55.080)
You've been part of, I mean, the Cardano ecosystem
Charles Hoskinson (3:40:59.680)
has published a lot of incredible papers.
Lex Fridman (3:41:01.840)
Is there ever a value to publish anonymously?
Charles Hoskinson (3:41:04.080)
Well, every paper that goes through the referee process,
Lex Fridman (3:41:07.000)
the authors are ripped off.
Lex Fridman (3:41:08.400)
So you don't actually see the authorship
Lex Fridman (3:41:10.320)
when you submit to the conference.
Lex Fridman (3:41:12.320)
So that's just best practice.
Lex Fridman (3:41:14.360)
But the question is, do you preserve the anonymity
Charles Hoskinson (3:41:16.200)
post conference and actually not reveal
Lex Fridman (3:41:18.920)
the author of the paper?
Charles Hoskinson (3:41:20.160)
It's a detriment for the deals we make
Lex Fridman (3:41:22.920)
because the whole premise of working with our company
Charles Hoskinson (3:41:25.640)
as an academic is that you're gonna have amazing coauthors
Lex Fridman (3:41:28.920)
and your work is gonna appear in great conferences,
Charles Hoskinson (3:41:31.080)
great journals, and as a consequence, you get tenure.
Lex Fridman (3:41:33.840)
If you publish anonymously, it's like doing clearance work
Charles Hoskinson (3:41:38.400)
in high energy physics or something like that.
Lex Fridman (3:41:40.960)
After 30 years of this amazing career
Charles Hoskinson (3:41:42.840)
working on nuclear weapons and classified reactors,
Lex Fridman (3:41:45.640)
you finish and then you go to apply for a job
Lex Fridman (3:41:48.080)
and they're like, so what have you done
Lex Fridman (3:41:48.960)
for the last 30 years?
Charles Hoskinson (3:41:50.000)
Stuff.
Lex Fridman (3:41:52.560)
Where is it on your CV?
Charles Hoskinson (3:41:53.560)
Well, I can't really talk about it.
Lex Fridman (3:41:55.240)
Okay, welcome to community college.
Lex Fridman (3:41:57.640)
So you get really screwed if you do that.
Lex Fridman (3:41:59.800)
So there's a misalignment of incentives
Charles Hoskinson (3:42:01.640)
in the academic world towards anonymity.
Lex Fridman (3:42:04.560)
And generally it's only done when you're doing something
Charles Hoskinson (3:42:07.520)
very controversial or there's a whistleblowing
Lex Fridman (3:42:09.760)
type of a component.
Charles Hoskinson (3:42:10.960)
It's not typically done for foundational work.
Lex Fridman (3:42:13.680)
And Satoshi was really one of the first things
Charles Hoskinson (3:42:15.440)
because like if there was a, Satoshi docks themselves,
Lex Fridman (3:42:17.800)
and I don't think it's possible anymore,
Lex Fridman (3:42:19.640)
but if he or she did that,
Lex Fridman (3:42:21.640)
that's like a Nobel Prize in economics likely.
Charles Hoskinson (3:42:24.600)
You're on the short list for that.
Lex Fridman (3:42:26.680)
And there's enormous accolades that would come
Charles Hoskinson (3:42:28.920)
beyond the monetary incentives
Lex Fridman (3:42:30.520)
of being able to docks yourself.
Charles Hoskinson (3:42:33.760)
That'd be cool if they give a Nobel Prize in economics
Lex Fridman (3:42:37.280)
to an anonymous, to Satoshi Nakamoto.
Charles Hoskinson (3:42:39.360)
It's been proposed and it was turned down.
Lex Fridman (3:42:41.720)
Yeah, so yeah, I mean, there are a few people
Charles Hoskinson (3:42:44.680)
in our company that have done pseudonymous publications.
Lex Fridman (3:42:47.520)
Like the, if you look at the Chimerical Edgers paper,
Charles Hoskinson (3:42:49.840)
that's a, it's not a real name, it's a crazy name.
Lex Fridman (3:42:52.600)
It's a pseudonymous publication.
Lex Fridman (3:42:55.280)
And you know, but that's usually for throwaway work.
Lex Fridman (3:42:58.400)
There is one project we inherited from an anonymous person,
Charles Hoskinson (3:43:01.120)
which is fascinating.
Lex Fridman (3:43:02.200)
It's called Cueditas.
Lex Fridman (3:43:03.760)
And it's basically a extension of the Cued manifesto
Lex Fridman (3:43:06.920)
from the 90s.
Lex Fridman (3:43:08.080)
And the pseudonym is Bill White.
Lex Fridman (3:43:10.160)
And I think it's some anonymous mathematician,
Lex Fridman (3:43:12.200)
but I can't figure out which one it is.
Lex Fridman (3:43:14.160)
But basically it's a marketplace for deduction.
Lex Fridman (3:43:16.360)
So it's like this magic machine
Lex Fridman (3:43:19.120)
where you can create incentives for people
Charles Hoskinson (3:43:20.900)
to write mathematical proofs in a theorem prover
Lex Fridman (3:43:23.120)
and make some money from it.
Lex Fridman (3:43:24.440)
So there's some cool work that's there.
Lex Fridman (3:43:26.800)
And it's sad that Bill stayed anonymous
Charles Hoskinson (3:43:29.120)
because I think that could have been easily published.
Lex Fridman (3:43:31.000)
And there was a lot of really cool things
Charles Hoskinson (3:43:32.280)
that could have been done with Cueditas.
Lex Fridman (3:43:34.440)
So you did say the success of Cardano,
Charles Hoskinson (3:43:36.400)
sort of the vision you have is for you to have less
Lex Fridman (3:43:39.520)
and less power over time.
Lex Fridman (3:43:41.340)
So this idea of governance, what's your vision
Lex Fridman (3:43:44.440)
for a decentralized secure governance system?
Lex Fridman (3:43:48.280)
So the first thing you have to do is you've got to look
Lex Fridman (3:43:50.180)
at meaningful metrics, not vanity metrics.
Lex Fridman (3:43:53.040)
So what does it mean to have legitimacy
Lex Fridman (3:43:55.880)
in a governance system?
Charles Hoskinson (3:43:56.720)
You can build any governance system you want.
Lex Fridman (3:43:58.600)
You can have a dictator, right?
Charles Hoskinson (3:43:59.880)
Like Bob is in charge.
Lex Fridman (3:44:01.280)
It's like whether you like Bob or not, he's in charge.
Charles Hoskinson (3:44:04.380)
That's not very legitimate.
Lex Fridman (3:44:05.640)
And you can have pure democracy
Charles Hoskinson (3:44:06.960)
where every single person votes
Lex Fridman (3:44:08.480)
and then nothing ever gets done.
Charles Hoskinson (3:44:10.320)
County dog catcher is like a six year election
Lex Fridman (3:44:12.920)
or something like that.
Lex Fridman (3:44:14.140)
So there's a spectrum there between absolute power to one
Lex Fridman (3:44:17.360)
and perfectly egalitarian power
Charles Hoskinson (3:44:20.240)
to every single potential participant inside the system.
Lex Fridman (3:44:23.600)
And then the question is, okay,
Lex Fridman (3:44:24.980)
well, how do you handle choice architecture in that?
Lex Fridman (3:44:28.240)
So are you asking your people about every question
Charles Hoskinson (3:44:31.960)
or are you asking your people about a subset
Lex Fridman (3:44:34.000)
of questions related to a particular set of topics,
Lex Fridman (3:44:36.380)
but then they're not allowed to talk about other topics?
Lex Fridman (3:44:38.720)
Like for example, are they allowed
Charles Hoskinson (3:44:39.720)
to change the tax rate,
Lex Fridman (3:44:40.720)
but they can't change freedom of speech,
Charles Hoskinson (3:44:42.520)
that kind of a thing.
Lex Fridman (3:44:43.760)
So the first thing you have to do
Charles Hoskinson (3:44:45.800)
when you build these types of systems
Lex Fridman (3:44:47.220)
and they get to a certain scale
Charles Hoskinson (3:44:48.960)
is you have to build some mechanism
Lex Fridman (3:44:50.860)
for people who are interested in governance
Charles Hoskinson (3:44:52.760)
to self select and participate.
Lex Fridman (3:44:54.980)
Just create a collection bucket.
Charles Hoskinson (3:44:56.800)
In Bitcoin, we had Bitcoin talk
Lex Fridman (3:44:58.460)
and Bitcoin Reddit and these things.
Lex Fridman (3:44:59.960)
And eventually the GitHub repos and these things,
Lex Fridman (3:45:02.200)
there was a place to go if you were interested.
Lex Fridman (3:45:04.780)
And you need some sort of change management system
Lex Fridman (3:45:06.760)
where people who want to evolve the system
Charles Hoskinson (3:45:08.780)
can write it down in a very careful way.
Lex Fridman (3:45:10.520)
So in Bitcoin's case,
Charles Hoskinson (3:45:11.440)
it was Bitcoin Improvement Proposal on Ethereum.
Lex Fridman (3:45:13.880)
It's the Ethereum Improvement Proposal.
Lex Fridman (3:45:15.560)
And for us, it's the SIP, the Cardano Improvement Proposal.
Lex Fridman (3:45:18.360)
But just a structured way of discussing
Lex Fridman (3:45:20.080)
how you wish to change.
Lex Fridman (3:45:21.360)
Then there's a question of,
Lex Fridman (3:45:22.820)
do you want to do this implicitly or explicitly?
Lex Fridman (3:45:25.840)
The case of Bitcoin in Ethereum, it's an implicit system.
Lex Fridman (3:45:28.840)
So there's no on chain voting.
Lex Fridman (3:45:30.760)
There's no like five people said this
Lex Fridman (3:45:32.760)
and four people said this, so we do this.
Lex Fridman (3:45:34.880)
The case of Cardano, we're actually explicitly inviting.
Charles Hoskinson (3:45:37.360)
This is one of the biggest differentiators
Lex Fridman (3:45:39.280)
between Cardano, Polkadot, and these other things
Charles Hoskinson (3:45:41.560)
is that we're really serious about governance
Lex Fridman (3:45:43.760)
to the extent that we're actually doing foundational
Charles Hoskinson (3:45:46.820)
research in eVoting.
Lex Fridman (3:45:47.880)
We're building new voting systems,
Charles Hoskinson (3:45:49.440)
we're exploring preference voting and quadratic voting.
Lex Fridman (3:45:51.960)
And the long and the short is that we want
Charles Hoskinson (3:45:53.840)
more and more people to participate in voting for things.
Lex Fridman (3:45:57.720)
And you just have to start somewhere.
Lex Fridman (3:45:59.620)
So our hypothesis is we can bootstrap the system
Lex Fridman (3:46:02.620)
with the treasury system.
Lex Fridman (3:46:05.800)
So in Cardano, some of the inflation goes
Lex Fridman (3:46:09.040)
to the block producers, just like any other cryptocurrency,
Lex Fridman (3:46:11.760)
but some goes into a decentralized treasury,
Lex Fridman (3:46:14.480)
which now has over a billion dollars of ADA in it.
Lex Fridman (3:46:17.240)
So it's a lot of money.
Lex Fridman (3:46:18.680)
And that treasury is not under my control
Charles Hoskinson (3:46:20.680)
or the foundation's control,
Lex Fridman (3:46:22.080)
it's actually controlled by the community as a whole
Charles Hoskinson (3:46:24.820)
through a program called Catalyst.
Lex Fridman (3:46:26.400)
And so all these people can come together
Lex Fridman (3:46:28.000)
and they can submit spending ballots
Lex Fridman (3:46:29.440)
and other people who hold ADA can vote to approve that.
Charles Hoskinson (3:46:32.440)
What's nice about it is you have a growth engine
Lex Fridman (3:46:34.580)
to improve two accesses.
Charles Hoskinson (3:46:36.760)
One is absolute participation.
Lex Fridman (3:46:38.680)
So increase the amount of people
Charles Hoskinson (3:46:40.640)
who hold ADA participating.
Lex Fridman (3:46:42.240)
So the absolute number of people participating.
Lex Fridman (3:46:44.360)
And the other is meaningful participation.
Lex Fridman (3:46:46.680)
So the depth of participation.
Lex Fridman (3:46:48.240)
Did you just show up and vote?
Lex Fridman (3:46:49.880)
Or did you spend hours debating things on idea scale,
Charles Hoskinson (3:46:53.320)
the innovation management platform,
Lex Fridman (3:46:54.960)
interacting with the funding proposal,
Charles Hoskinson (3:46:56.660)
going back and forth.
Lex Fridman (3:46:57.840)
And there's dozens of little things like that.
Charles Hoskinson (3:47:00.340)
Now, my hypothesis is if you run this
Lex Fridman (3:47:02.000)
with enough iterations,
Charles Hoskinson (3:47:02.920)
eventually you get to a certain critical mass,
Lex Fridman (3:47:05.360)
like over 50% absolute participation
Lex Fridman (3:47:07.640)
and a high level of meaningful participation,
Lex Fridman (3:47:09.960)
where you can move beyond funding
Lex Fridman (3:47:12.140)
and you can start actually having meaningful questions
Lex Fridman (3:47:14.760)
about protocol design and improvement proposals
Lex Fridman (3:47:17.540)
and so forth.
Lex Fridman (3:47:18.380)
And then what you can do is you can roll out
Charles Hoskinson (3:47:20.280)
new voting systems and new social structures,
Lex Fridman (3:47:22.720)
and you can let them start voting on training wheels
Charles Hoskinson (3:47:25.120)
like system parameters.
Lex Fridman (3:47:26.140)
Like for example, the minimum transaction fee
Charles Hoskinson (3:47:28.220)
or that K parameter for the amount of stake pools
Lex Fridman (3:47:30.320)
or these types of things.
Charles Hoskinson (3:47:32.120)
Then they build enough competency there
Lex Fridman (3:47:34.080)
and they move up a next level.
Lex Fridman (3:47:35.700)
And they actually start talking about hard forks
Lex Fridman (3:47:37.480)
using the update system, the hard fork combinator system.
Charles Hoskinson (3:47:40.360)
See, so that's how you.
Lex Fridman (3:47:41.200)
Voting on a hard fork.
Charles Hoskinson (3:47:42.800)
Voting on a hard fork.
Lex Fridman (3:47:44.000)
You can't do it unless your social dynamics are right
Lex Fridman (3:47:46.320)
and your voting system is right.
Lex Fridman (3:47:47.420)
And by the way, you also need to write a constitution
Charles Hoskinson (3:47:49.520)
around the same time
Lex Fridman (3:47:50.840)
because not all hard forks are created equally.
Charles Hoskinson (3:47:53.440)
The kinds of things that would add support
Lex Fridman (3:47:55.200)
for a new cryptographic primitive
Charles Hoskinson (3:47:57.480)
are distinctly different from the kinds of things
Lex Fridman (3:47:59.240)
that would change your monetary policy of the system.
Lex Fridman (3:48:02.040)
So the constitution would be written,
Lex Fridman (3:48:04.680)
and maybe you can comment on
Lex Fridman (3:48:05.800)
what is the innovation management proposal system?
Lex Fridman (3:48:09.040)
So we partnered with a company called Ideascale
Lex Fridman (3:48:11.120)
and they run a kind of a side platform.
Lex Fridman (3:48:13.280)
So people who are interested,
Charles Hoskinson (3:48:15.360)
that's kind of our version of a forum.
Lex Fridman (3:48:16.840)
They sign up and there's special tools in that platform
Charles Hoskinson (3:48:19.240)
for discussions that are productive.
Lex Fridman (3:48:21.200)
So they don't descend into kind of like
Charles Hoskinson (3:48:22.400)
trolly Reddit style conversations,
Lex Fridman (3:48:24.440)
but they're much more focused around
Lex Fridman (3:48:26.400)
how is your product building out.
Lex Fridman (3:48:28.240)
And by the way, we're gonna add more infrastructure
Charles Hoskinson (3:48:29.900)
over time.
Lex Fridman (3:48:30.740)
Our chief of staff, Tamara Hasson,
Charles Hoskinson (3:48:32.440)
she's working on setting up an incubator and accelerator.
Lex Fridman (3:48:35.360)
And we have lots of cool partners
Charles Hoskinson (3:48:36.920)
we've talked with in that space.
Lex Fridman (3:48:38.160)
And it's the same concept.
Charles Hoskinson (3:48:39.480)
Your idea comes in,
Lex Fridman (3:48:41.000)
what enters the system should not be
Lex Fridman (3:48:43.180)
what gets approved on the other side.
Lex Fridman (3:48:44.740)
It should go through some sort of gauntlet,
Charles Hoskinson (3:48:46.260)
some sort of crucible where you iterate your way through
Lex Fridman (3:48:49.120)
and there's all kinds of optimizations and upgrades
Lex Fridman (3:48:51.800)
and evolutions and combinations
Lex Fridman (3:48:53.760)
and destructions that occur.
Lex Fridman (3:48:55.120)
And then by the time you get to the other side,
Lex Fridman (3:48:56.440)
either the idea just dies on the vine
Charles Hoskinson (3:48:58.520)
because it was a bad idea,
Lex Fridman (3:48:59.720)
or it's a significantly stronger, far more fundable thing
Lex Fridman (3:49:03.080)
and potentially even gets attached with accountability.
Lex Fridman (3:49:05.280)
So you don't just fund the idea,
Charles Hoskinson (3:49:06.920)
you'd actually fund the auditor at the same time
Lex Fridman (3:49:09.520)
who actually holds the person accountable
Charles Hoskinson (3:49:10.880)
because the blockchain is not a real company.
Lex Fridman (3:49:12.840)
It's an ethereal thing.
Charles Hoskinson (3:49:14.680)
You need a counterparty to hold someone accountable
Lex Fridman (3:49:16.920)
who's real for that type of stuff and that type of funding.
Lex Fridman (3:49:19.960)
So that's what we're doing this year.
Lex Fridman (3:49:21.400)
So we have a whole team of people,
Charles Hoskinson (3:49:23.080)
partners like Governance Live and IdeaScale
Lex Fridman (3:49:25.680)
and papers we've written and about 30, 40,000 people
Charles Hoskinson (3:49:29.120)
regularly participating in this.
Lex Fridman (3:49:30.560)
So it's a huge social experiment
Lex Fridman (3:49:32.480)
and we're learning an enormous amount.
Lex Fridman (3:49:34.240)
And then our goal is by the end of the year
Charles Hoskinson (3:49:35.800)
to have a meaningful percentage
Lex Fridman (3:49:37.520)
of the entire Cardinal population inside of it,
Charles Hoskinson (3:49:39.720)
like 40, 50%.
Lex Fridman (3:49:41.360)
Then once you're at that threshold,
Charles Hoskinson (3:49:42.680)
now you have democratic majority of the entire system
Lex Fridman (3:49:46.280)
and you can have a real conversation about,
Charles Hoskinson (3:49:48.060)
okay, how do we write a constitution
Lex Fridman (3:49:50.280)
for this type of a system?
Lex Fridman (3:49:51.520)
And sorry to interrupt, but so the constitution,
Lex Fridman (3:49:54.640)
people still argue about it because natural language,
Charles Hoskinson (3:49:57.440)
much like poetry, lends itself to multiple interpretations.
Lex Fridman (3:50:00.680)
Is it possible to formalize some of these ideas
Lex Fridman (3:50:03.880)
that reduce the ambiguity?
Lex Fridman (3:50:07.560)
Everything's old is new again.
Lex Fridman (3:50:09.000)
We were talking about Lojban back in the day, right?
Lex Fridman (3:50:12.120)
So there's definitely formal languages you can use
Charles Hoskinson (3:50:15.140)
to express these things.
Lex Fridman (3:50:15.980)
This is why I'm so interested in things like Idris and Koch
Lex Fridman (3:50:18.360)
and Acta and theorem proving,
Lex Fridman (3:50:21.000)
because that's exactly what you're attempting to do
Charles Hoskinson (3:50:23.000)
is to express some concept or desire or construction
Lex Fridman (3:50:27.400)
in a language that's machine understandable
Lex Fridman (3:50:29.040)
and manipulatable.
Lex Fridman (3:50:30.120)
In particular, how does the system know its own design?
Lex Fridman (3:50:33.280)
So what is the reference of a cryptocurrency?
Lex Fridman (3:50:35.480)
Usually it's a canonical code base,
Charles Hoskinson (3:50:37.120)
like here's Bitcoin core and the C++ code
Lex Fridman (3:50:40.000)
is that is the canonical code base.
Lex Fridman (3:50:42.600)
But actually that's not right.
Lex Fridman (3:50:43.680)
You should have specifications, blueprints
Charles Hoskinson (3:50:46.400)
that are implementation agnostic
Lex Fridman (3:50:47.860)
as your canonical code base.
Lex Fridman (3:50:49.200)
And can your system know those specifications,
Lex Fridman (3:50:51.400)
understand those specifications,
Lex Fridman (3:50:52.860)
and can your change management system be for that?
Lex Fridman (3:50:55.520)
And then can you provide a proof
Lex Fridman (3:50:57.140)
that your client is by similar to that specification?
Lex Fridman (3:51:00.380)
So yeah, that's 10 years in the future,
Lex Fridman (3:51:02.200)
but that's where you would go with that kind of a concept.
Lex Fridman (3:51:05.240)
But you're tending towards a formalism.
Charles Hoskinson (3:51:08.820)
Eventually, but that's not necessary
Lex Fridman (3:51:10.820)
for the system in the short term.
Charles Hoskinson (3:51:12.300)
It's good enough just to have,
Lex Fridman (3:51:14.920)
I know in a winter and say the Haskell client is that,
Lex Fridman (3:51:17.560)
and then what you basically do is you vote on a SIP
Lex Fridman (3:51:21.260)
and then once it's approved,
Charles Hoskinson (3:51:23.280)
then you go and implement that.
Lex Fridman (3:51:24.480)
And there's some mechanism to trigger the update system,
Charles Hoskinson (3:51:26.560)
to update the reference client.
Lex Fridman (3:51:27.400)
Do you have an example of a SIP,
Lex Fridman (3:51:29.160)
a Cardano Improvement Proposal?
Lex Fridman (3:51:31.120)
Yeah, like the Curb Benefit Pledge, SIP 007.
Lex Fridman (3:51:34.360)
So the...
Lex Fridman (3:51:37.240)
007.
Charles Hoskinson (3:51:38.360)
Yeah, everybody loves that.
Lex Fridman (3:51:40.880)
Yeah, key.
Charles Hoskinson (3:51:41.720)
I'm gonna change my luggage code now, Lex.
Lex Fridman (3:51:44.400)
What is that?
Lex Fridman (3:51:45.240)
So basically it just has to do with the pledge.
Lex Fridman (3:51:50.080)
So a pledge is a certain amount of ADA
Charles Hoskinson (3:51:52.320)
that a stake pool operator will set aside
Lex Fridman (3:51:54.640)
and connect to his pool in order to be listed
Charles Hoskinson (3:51:57.960)
in the registry.
Lex Fridman (3:51:59.760)
And actually it's connected to how much income you make
Charles Hoskinson (3:52:02.760)
as a pool operator.
Lex Fridman (3:52:03.980)
So if you set it too high, you have a consolidation,
Charles Hoskinson (3:52:07.480)
you have lots of pools.
Lex Fridman (3:52:08.680)
If you set it too low, what will happen is larger pools
Charles Hoskinson (3:52:11.060)
will tend to fragment
Lex Fridman (3:52:12.540)
and actually run multiple instances of themselves.
Lex Fridman (3:52:15.480)
And so this is delicate parameter that you have to tweak.
Lex Fridman (3:52:18.040)
And so we have a formula for it,
Charles Hoskinson (3:52:19.980)
our formal specification that's quite involved.
Lex Fridman (3:52:22.040)
And so one of the community members came and said,
Charles Hoskinson (3:52:23.720)
well, I think we can massively simplify this design
Lex Fridman (3:52:27.120)
and actually get a better result
Charles Hoskinson (3:52:28.600)
for smaller stake pool operators.
Lex Fridman (3:52:30.880)
And so it's SIP 007.
Lex Fridman (3:52:33.120)
And there's actually a lot of conversation
Lex Fridman (3:52:34.640)
and people are thinking about it.
Lex Fridman (3:52:35.640)
And it was just stunning for me
Lex Fridman (3:52:37.520)
because to understand how to write a SIP like this,
Charles Hoskinson (3:52:39.600)
you actually have to read like a hundred pages
Lex Fridman (3:52:41.400)
of mathematical prose in the formal specification.
Lex Fridman (3:52:44.720)
So the guys who wrote it, I was like, fuck yeah.
Lex Fridman (3:52:47.480)
This is great.
Charles Hoskinson (3:52:48.680)
I'll just say an example of a SIP,
Lex Fridman (3:52:49.880)
but that's one thing, but it could be as big as,
Charles Hoskinson (3:52:52.520)
hey, I wanna add like quantum resistance to the system.
Lex Fridman (3:52:55.560)
And here's how you do that,
Charles Hoskinson (3:52:56.760)
like quantum VRF and I wanna put XMSS
Lex Fridman (3:52:59.480)
and all this other stuff.
Lex Fridman (3:53:00.680)
So there's a lot you can do
Lex Fridman (3:53:02.080)
and you can do it indirectly or implicitly
Charles Hoskinson (3:53:07.400)
where there's some social process outside of the system
Lex Fridman (3:53:10.080)
where you eventually approve a SIP,
Charles Hoskinson (3:53:12.400)
or you can do it explicitly where you directly vote
Lex Fridman (3:53:14.600)
or some representative democracy,
Charles Hoskinson (3:53:16.880)
some group of representatives directly votes.
Lex Fridman (3:53:19.200)
And then once you've decided it's there.
Charles Hoskinson (3:53:21.160)
The constitution is necessary
Lex Fridman (3:53:22.400)
because you need to know the decision threshold.
Lex Fridman (3:53:24.680)
Is it super majority or majority?
Lex Fridman (3:53:26.960)
And also the voting process.
Charles Hoskinson (3:53:29.040)
Like a lot of policy experts believe
Lex Fridman (3:53:30.760)
that if Brexit was a multi stage vote,
Charles Hoskinson (3:53:32.880)
it would have never passed
Lex Fridman (3:53:34.400)
because people would have done the initial stage
Lex Fridman (3:53:36.480)
and all the horrors of Brexit
Lex Fridman (3:53:37.760)
would have been broadcast to society.
Lex Fridman (3:53:39.520)
And then there would have been some reluctance
Lex Fridman (3:53:41.160)
and buyer's remorse on it.
Lex Fridman (3:53:42.920)
And then the second round would have failed
Lex Fridman (3:53:44.560)
or something like that.
Lex Fridman (3:53:45.960)
But because it was just a singular event,
Lex Fridman (3:53:48.200)
it's like they passed it now,
Charles Hoskinson (3:53:50.200)
British are all passive aggressive about it with no sign.
Lex Fridman (3:53:52.960)
Very well, we shall remove from Europe.
Lex Fridman (3:53:55.680)
And so your voting system has a lot to do
Lex Fridman (3:53:58.680)
with the outcome you get.
Lex Fridman (3:53:59.840)
The other thing is, what type of voting?
Lex Fridman (3:54:01.520)
Is it just an absolute or is it a preference voting?
Lex Fridman (3:54:04.160)
So you pick your favorite SIP,
Lex Fridman (3:54:06.200)
follow your second favorite SIP or something like that.
Lex Fridman (3:54:08.880)
So Condorcet or Borda are two examples of systems like that.
Lex Fridman (3:54:11.120)
Are you a fan of those, like the ranked choice vote?
Charles Hoskinson (3:54:13.120)
I love them so much, especially for political diversity
Lex Fridman (3:54:16.360)
because this whole concept of throwing your vote away,
Charles Hoskinson (3:54:18.800)
if it's Alice or Bob, you're always gonna get a,
Lex Fridman (3:54:21.160)
it's South Park did it best, right?
Charles Hoskinson (3:54:23.560)
The giant.
Lex Fridman (3:54:24.640)
Turd.
Charles Hoskinson (3:54:25.480)
Yeah, yeah, you know the one.
Lex Fridman (3:54:26.600)
Turd versus I forget what else, Douche versus Turd.
Charles Hoskinson (3:54:29.640)
Douche versus Turd, South Park.
Lex Fridman (3:54:31.760)
So if it's ranked order or preference voting,
Charles Hoskinson (3:54:34.480)
you never have that situation
Lex Fridman (3:54:35.640)
because you always pick your favorite
Lex Fridman (3:54:36.800)
and you get a lot more diversity on the ballot.
Lex Fridman (3:54:38.560)
But then you have arrows paradox
Lex Fridman (3:54:39.840)
and all these other things that come up.
Lex Fridman (3:54:41.800)
So there's no perfect system.
Lex Fridman (3:54:44.000)
And really you have to be comfortable with governance
Lex Fridman (3:54:47.480)
in a game of inches.
Lex Fridman (3:54:48.840)
And you start by some guiding principles.
Lex Fridman (3:54:51.240)
And the guiding principles is more is better
Lex Fridman (3:54:53.460)
and productive interactions are better
Lex Fridman (3:54:55.920)
than destructive interactions.
Lex Fridman (3:54:57.240)
And you have to be able to quantify those things.
Lex Fridman (3:54:58.840)
As long as you have an engine that allows you
Charles Hoskinson (3:55:00.560)
to grow in those directions,
Lex Fridman (3:55:02.160)
then you have a lot more people on for the ride
Charles Hoskinson (3:55:04.120)
when you actually start talking about these bigger
Lex Fridman (3:55:06.160)
and bigger things.
Charles Hoskinson (3:55:07.240)
The other challenge was that we had
Lex Fridman (3:55:08.480)
to decentralize development of the protocol
Lex Fridman (3:55:10.600)
and the brain of the protocol.
Lex Fridman (3:55:12.900)
We have fully decentralized the brain of the protocol.
Charles Hoskinson (3:55:15.360)
The peer review academic process means
Lex Fridman (3:55:17.080)
that there's now an academic incentive
Charles Hoskinson (3:55:19.400)
for graduate students, postdocs, and professors
Lex Fridman (3:55:22.240)
to spend enormous amounts of time writing papers
Charles Hoskinson (3:55:24.640)
in our ecosystem because they want tenure.
Lex Fridman (3:55:28.160)
And we showed that you can get it.
Charles Hoskinson (3:55:30.120)
There's been a lot of people who've gotten
Lex Fridman (3:55:32.080)
great academic careers from working with us.
Lex Fridman (3:55:34.320)
So yeah, keep adding to that pile of 105 papers.
Lex Fridman (3:55:37.720)
This is great.
Lex Fridman (3:55:38.880)
And that doesn't need Charles Hoskinson.
Lex Fridman (3:55:40.480)
It doesn't need IOHK funding or anything like that thereon.
Charles Hoskinson (3:55:43.120)
We're already seeing unfunded derivative work
Lex Fridman (3:55:45.080)
from people who are completely disconnected
Charles Hoskinson (3:55:46.640)
from us writing papers about stuff in our ecosystem.
Lex Fridman (3:55:49.600)
So just continue to develop that, but that's looking good.
Charles Hoskinson (3:55:53.040)
Decentralized development, we're working on that as well.
Lex Fridman (3:55:55.160)
Our goal is sometime in the next few years
Charles Hoskinson (3:55:57.160)
to make sure there's at least three independent clients,
Lex Fridman (3:56:00.080)
so three completely independent dev teams and code bases,
Lex Fridman (3:56:03.120)
and also to get a separation of the commercial clients
Lex Fridman (3:56:06.880)
from the reference code and turn the reference code
Charles Hoskinson (3:56:09.360)
into like a formal specification, a formal blueprint,
Lex Fridman (3:56:12.200)
and then have that change management
Charles Hoskinson (3:56:14.120)
be completely decentralized.
Lex Fridman (3:56:15.680)
The core developers are actually voted on,
Lex Fridman (3:56:17.880)
and the SIP process is used to change that,
Lex Fridman (3:56:21.120)
and then some way of proving that your client
Charles Hoskinson (3:56:24.000)
follows the specification as a use of the protocol.
Lex Fridman (3:56:28.200)
Is there, beyond the Cardano ecosystem,
Charles Hoskinson (3:56:32.120)
these ideas of distributed governance,
Lex Fridman (3:56:35.380)
do you see ways it could revolutionize politics?
Charles Hoskinson (3:56:40.400)
Oh yeah.
Lex Fridman (3:56:41.560)
Governments.
Charles Hoskinson (3:56:42.400)
Oh yeah, like the Ethiopia deal, for example.
Lex Fridman (3:56:45.360)
We have five million people that we brought in
Charles Hoskinson (3:56:47.240)
with the did system there.
Lex Fridman (3:56:49.280)
That's gonna follow them throughout their whole life.
Charles Hoskinson (3:56:51.160)
Right now they're high school students,
Lex Fridman (3:56:52.940)
but when they're in their 20s, 30s,
Charles Hoskinson (3:56:54.360)
they're gonna wanna use that for eVoting
Lex Fridman (3:56:55.880)
and for payments and so forth.
Lex Fridman (3:56:57.600)
Can you describe the Ethiopia project,
Lex Fridman (3:56:59.120)
because that's fascinating.
Charles Hoskinson (3:57:00.480)
Yeah, so we spent four years in Ethiopia.
Lex Fridman (3:57:02.600)
I went there in 2017 and shook a lot of hands,
Charles Hoskinson (3:57:05.380)
kissed a lot of babies, and they said,
Lex Fridman (3:57:06.680)
oh yeah, we'll have it all done in six months.
Charles Hoskinson (3:57:08.600)
Everything is a lot of fun there,
Lex Fridman (3:57:11.620)
but it takes a little bit longer than you'd think
Charles Hoskinson (3:57:13.800)
to get anything done, and that's okay.
Lex Fridman (3:57:15.760)
I really love Ethiopia, it's a beautiful country.
Lex Fridman (3:57:19.080)
So we spent four years,
Lex Fridman (3:57:20.700)
we trained a whole cohort of developers,
Lex Fridman (3:57:22.580)
and then we started a relationship
Lex Fridman (3:57:23.760)
with the Ministry of Education,
Lex Fridman (3:57:25.120)
and they care a lot about proper credentials.
Lex Fridman (3:57:28.300)
One of the biggest problems they have is,
Charles Hoskinson (3:57:30.200)
when someone graduates, it's really hard for them
Lex Fridman (3:57:32.280)
to prove the quality of the credentials that they have,
Lex Fridman (3:57:34.600)
and it's really hard for them
Lex Fridman (3:57:35.640)
to prove the knowledge that they have.
Lex Fridman (3:57:37.180)
So if you wanna be an ICT outsourcer,
Lex Fridman (3:57:39.240)
how does somebody know that this is a real program,
Charles Hoskinson (3:57:41.840)
or how does somebody really know that this is a real doctor,
Lex Fridman (3:57:44.200)
or whatever the hell you're outsourcing?
Lex Fridman (3:57:46.240)
So they said, can you come and build
Lex Fridman (3:57:47.680)
a digital identity system for credentials?
Lex Fridman (3:57:50.640)
So every student in the country at some point
Lex Fridman (3:57:52.920)
will get a DID, a decentralized identifier,
Lex Fridman (3:57:55.240)
and then you can prove all sorts of things about them,
Lex Fridman (3:57:58.160)
like GPA, or what particular diploma they hold,
Charles Hoskinson (3:58:00.960)
or blah, blah, blah, and then the beautiful thing is,
Lex Fridman (3:58:03.500)
the way we designed it is it's extensible
Charles Hoskinson (3:58:06.080)
to include payments, extensible to include proofs
Lex Fridman (3:58:09.480)
about themselves, like are you over the age of 21,
Charles Hoskinson (3:58:11.640)
that kind of stuff, and then eventually it can be used
Lex Fridman (3:58:14.120)
to link into a cryptocurrency system.
Charles Hoskinson (3:58:16.120)
In this case, we built it for Cardano.
Lex Fridman (3:58:18.140)
So Atala Prism is the framework we're using for it.
Charles Hoskinson (3:58:20.840)
Every student will get one, and then those students
Lex Fridman (3:58:23.080)
will be able to use those credentials
Charles Hoskinson (3:58:25.420)
in the Cardano ecosystem, eventually for DeFi,
Lex Fridman (3:58:28.060)
like lending and so forth.
Lex Fridman (3:58:29.200)
So it's the largest blockchain deal of its kind,
Lex Fridman (3:58:31.280)
and it probably will grow to 20 million people
Charles Hoskinson (3:58:33.960)
over the next 24 months.
Lex Fridman (3:58:35.500)
The other beautiful thing about Ethiopia
Charles Hoskinson (3:58:37.080)
that people don't know is the prime minister
Lex Fridman (3:58:38.880)
is a cryptographer, and he's in his like 40s, 50s,
Charles Hoskinson (3:58:42.280)
a young guy, and he can actually read the papers
Lex Fridman (3:58:44.360)
we write, and so he's a really bright guy,
Lex Fridman (3:58:46.880)
and he's written this beautiful agenda
Lex Fridman (3:58:48.960)
called Digital Ethiopia 2025, and one of his things
Charles Hoskinson (3:58:52.960)
in the agenda is digital identity.
Lex Fridman (3:58:55.720)
He wants every person in the country
Charles Hoskinson (3:58:57.240)
to have a digital identity by 2025,
Lex Fridman (3:59:00.000)
and he wants to implement an eVoting system
Charles Hoskinson (3:59:01.900)
at some point for that.
Lex Fridman (3:59:03.400)
So when you ask about governance,
Charles Hoskinson (3:59:04.880)
all these governance tools that we're constructing
Lex Fridman (3:59:07.200)
for Cardano are completely reusable for a nation state.
Charles Hoskinson (3:59:11.400)
A company, and by the way, if you create
Lex Fridman (3:59:13.080)
a Cardano application, will eventually be reusable for you,
Charles Hoskinson (3:59:16.280)
because if you have a DeFi protocol,
Lex Fridman (3:59:17.740)
you need a voting system, why the fuck
Lex Fridman (3:59:19.120)
do you have to reimplement that?
Lex Fridman (3:59:20.280)
Native multiasset, anything that works on ADA
Charles Hoskinson (3:59:23.000)
works with a native multiasset.
Lex Fridman (3:59:24.640)
You can use our voting system for your asset.
Lex Fridman (3:59:27.080)
So you get a government in a box
Lex Fridman (3:59:28.660)
that you can parameterize any way you want,
Lex Fridman (3:59:31.160)
and similarly, when a government does something
Lex Fridman (3:59:33.140)
with Cardano, not only do they get
Charles Hoskinson (3:59:34.980)
all this amazing infrastructure, but wait, there's more.
Lex Fridman (3:59:38.240)
They actually get this amazing voting system
Charles Hoskinson (3:59:40.240)
that they can use for smaller, large scale decisions
Lex Fridman (3:59:43.120)
that they wanna do.
Charles Hoskinson (3:59:44.200)
On the US side, we're thinking about trying
Lex Fridman (3:59:46.360)
to roll something like this out in the state of Wyoming.
Charles Hoskinson (3:59:49.120)
There's been tons of laws that are passed.
Lex Fridman (3:59:50.960)
It's a very friendly crypto place.
Charles Hoskinson (3:59:52.980)
At the very least, it'd be fun to see
Lex Fridman (3:59:54.800)
if we can do the Republican, Democrat primaries
Charles Hoskinson (3:59:57.160)
with preference voting and voter registration this way,
Lex Fridman (40:00.620)
or something like that.
Charles Hoskinson (40:01.720)
You say, hey, maybe I wanna actually create gold
Lex Fridman (40:04.620)
in World of Warcraft that's actually a currency.
Charles Hoskinson (40:07.860)
Okay, so I'm gonna issue a token.
Lex Fridman (40:09.740)
Well, and then maybe I wanna create some mechanics
Charles Hoskinson (40:11.660)
behind how people are gonna trade that amongst each other.
Lex Fridman (40:14.360)
So that would be like a smart contract layer
Lex Fridman (40:16.620)
and issue an asset.
Lex Fridman (40:17.980)
So you have this centralized server running
Lex Fridman (40:20.340)
and proprietary software controlled by a single company,
Lex Fridman (40:23.900)
but then you've opened your application up
Charles Hoskinson (40:26.500)
to a broader world.
Lex Fridman (40:27.940)
And what we've done now is added a blockchain layer
Lex Fridman (40:29.940)
and the blockchain handles the accounting of that asset
Lex Fridman (40:32.140)
and the spending policy of that stuff.
Lex Fridman (40:34.500)
So that is a much smaller program
Lex Fridman (40:37.500)
than what Blizzard is doing with World of Warcraft.
Lex Fridman (40:40.820)
So the point of Plutus was let's create a language
Lex Fridman (40:43.400)
where you can write these small to midsize programs
Lex Fridman (40:46.740)
and have a high degree of confidence
Lex Fridman (40:48.280)
that they behave with correctness
Lex Fridman (40:50.240)
and also they give you deterministic results
Lex Fridman (40:52.900)
on the consumption of resources.
Charles Hoskinson (40:54.200)
You can run things locally
Lex Fridman (40:55.980)
and you actually understand what it costs to run
Lex Fridman (40:57.920)
and that doesn't change when you deploy it on the system.
Lex Fridman (41:01.220)
If you dial up the expressiveness of the system
Lex Fridman (41:03.740)
and like Ethereum does
Lex Fridman (41:05.140)
and these big mutable account systems,
Charles Hoskinson (41:07.720)
the problem is you have to have global state.
Lex Fridman (41:09.360)
So whatever you test locally
Charles Hoskinson (41:11.040)
doesn't actually necessarily translate
Lex Fridman (41:13.320)
to what you've deployed, okay?
Lex Fridman (41:15.300)
So we spent a long time asking
Lex Fridman (41:17.860)
like where's the Goldilocks zone?
Charles Hoskinson (41:19.580)
Bitcoin script was too restrictive
Lex Fridman (41:22.140)
and every single time Satoshi tried to dial it up,
Charles Hoskinson (41:24.620)
it led to mega problems.
Lex Fridman (41:26.220)
Like there was a beautiful thing
Charles Hoskinson (41:27.220)
called the value overflow incident in 2010,
Lex Fridman (41:29.860)
which led to the creation of billions of Bitcoin.
Charles Hoskinson (41:32.500)
They had to quickly clean that up
Lex Fridman (41:33.740)
and sweep it under the rug
Lex Fridman (41:34.700)
and pretend like it didn't exist.
Lex Fridman (41:36.420)
But that was mostly because of an issue
Charles Hoskinson (41:38.740)
with how the scripting language was implemented.
Lex Fridman (41:41.340)
And when you look at Ethereum,
Charles Hoskinson (41:44.100)
it's like this pure game
Lex Fridman (41:45.820)
of stomping down these skirmishers
Charles Hoskinson (41:48.060)
where every update there's something
Lex Fridman (41:49.340)
they have to change or tune
Lex Fridman (41:50.720)
and then it's not clear how you shard such a model.
Lex Fridman (41:54.140)
So we said, let's build something
Charles Hoskinson (41:55.660)
that's in the middle of this
Lex Fridman (41:56.940)
and that's what Plutus basically is.
Lex Fridman (41:58.660)
And it's really designed to play very nicely
Lex Fridman (42:01.100)
with off chain infrastructure
Charles Hoskinson (42:02.480)
as much as on chain infrastructure.
Lex Fridman (42:04.340)
So you can look at all those different examples,
Charles Hoskinson (42:06.020)
whether it's Wolfram wants to auction off
Lex Fridman (42:07.960)
their universes or Blizzard wants
Charles Hoskinson (42:10.300)
to issue an in game currency
Lex Fridman (42:12.260)
or your Uber and you wanna start putting
Charles Hoskinson (42:14.460)
peer to peer dynamics inside your system,
Lex Fridman (42:17.180)
you're gonna gracefully connect to that on chain code.
Lex Fridman (42:20.740)
And it's very clear how those two things connect together.
Lex Fridman (42:23.180)
Just so happens Haskell's really good for this.
Charles Hoskinson (42:25.700)
They have template Haskell
Lex Fridman (42:26.840)
and it makes it very easy
Charles Hoskinson (42:27.780)
to embed domain specific languages.
Lex Fridman (42:30.060)
And it makes it very easy to wire your Haskell code
Charles Hoskinson (42:32.400)
onto off chain infrastructure.
Lex Fridman (42:34.240)
So in the future,
Charles Hoskinson (42:35.820)
you'll be able to have your off chain run a node
Lex Fridman (42:37.820)
or the Java virtual machine or a.NET application
Lex Fridman (42:40.740)
and there'll just be this beautiful interface
Lex Fridman (42:42.580)
and then it can talk to all your on chain code
Lex Fridman (42:44.260)
and that's written in that DSL
Lex Fridman (42:45.940)
and you have a high degree of assurance that it's right.
Charles Hoskinson (42:49.300)
Is there like a Hello World program in Plutus
Lex Fridman (42:52.220)
that reveals the beauty of this balance
Lex Fridman (42:55.060)
that you're referring to?
Lex Fridman (42:56.180)
Sort of simple but not too simple, the Einstein idea?
Charles Hoskinson (42:59.960)
Yeah, so we did do our first Hello World program
Lex Fridman (43:02.980)
actually today.
Charles Hoskinson (43:03.820)
Yeah, I heard about this.
Lex Fridman (43:04.900)
Yeah, but you know,
Charles Hoskinson (43:06.540)
there you'd want to have the whole round trip.
Lex Fridman (43:08.580)
So you'd like to have an interaction
Lex Fridman (43:10.300)
and I think a video game would probably show it the best.
Lex Fridman (43:12.460)
Like if we could re implement CryptoKitties
Charles Hoskinson (43:14.340)
or something like that on it
Lex Fridman (43:15.800)
and you have this off chain infrastructure
Lex Fridman (43:17.380)
and you have your GUI in your front end,
Lex Fridman (43:18.820)
it's running on your phone or a browser
Lex Fridman (43:21.100)
and most of that lives off chain.
Lex Fridman (43:22.860)
And then, but your CryptoKitties,
Charles Hoskinson (43:24.260)
they'd live on the blockchain.
Lex Fridman (43:26.180)
The whole round trip end to end
Charles Hoskinson (43:27.920)
with relatively low fees and low latency
Lex Fridman (43:30.100)
and high availability of service, it never goes down.
Charles Hoskinson (43:34.220)
That would probably be the best thing to do
Lex Fridman (43:35.980)
and we'll have something like that by August.
Charles Hoskinson (43:37.820)
It's pretty easy to build this stuff.
Lex Fridman (43:39.180)
So what kind of off chain interactions
Lex Fridman (43:40.780)
are supported with Plutus?
Lex Fridman (43:41.940)
What are the limits you want to put on the thing
Lex Fridman (43:43.980)
so it doesn't get chaotic?
Lex Fridman (43:45.100)
That's the beautiful thing.
Charles Hoskinson (43:46.000)
When you have a less expressive model on chain,
Lex Fridman (43:48.180)
it means you can do anything you want off chain.
Lex Fridman (43:50.740)
So you started talking about smart contracts,
Lex Fridman (43:52.580)
but let's zoom back out
Lex Fridman (43:55.940)
and ask the big question here is what is a blockchain
Lex Fridman (43:59.860)
and what is a cryptocurrency?
Lex Fridman (44:02.180)
So a blockchain is just a ledger
Lex Fridman (44:04.180)
and really it has three nice properties.
Charles Hoskinson (44:05.900)
You're timestamped, you're immutable and auditable,
Lex Fridman (44:08.260)
either in a global or a local sense.
Lex Fridman (44:10.240)
And so there's all kinds of things mankind has invented
Lex Fridman (44:13.460)
where it's really important
Charles Hoskinson (44:15.080)
that when you put some information down,
Lex Fridman (44:17.700)
it doesn't change and other people can see it
Lex Fridman (44:21.220)
and that you know when it was put down.
Lex Fridman (44:23.260)
For example, a property ledger.
Lex Fridman (44:24.660)
So when you buy land or you have rights associated with land
Lex Fridman (44:28.020)
like mineral rights or water rights or these things,
Charles Hoskinson (44:31.040)
you'd like to transitively see how does it go
Lex Fridman (44:33.700)
from Alice to Bob to Charlie to Jim
Lex Fridman (44:35.700)
and so forth and what was the state of these things
Lex Fridman (44:38.540)
as they were transitioning?
Lex Fridman (44:39.620)
So how much did they pay, when did it occur,
Lex Fridman (44:43.260)
et cetera, et cetera, the metadata that follows that.
Charles Hoskinson (44:46.140)
Okay, well normally these types of ledgers
Lex Fridman (44:48.540)
are so important that they're managed either by governments
Charles Hoskinson (44:51.020)
or regulated entities.
Lex Fridman (44:52.420)
And the issues are that while they can be efficient,
Charles Hoskinson (44:55.820)
they're generally brittle to political manipulation
Lex Fridman (44:58.940)
and they're brittle to geopolitical events.
Charles Hoskinson (45:02.060)
For example, when Syria fell apart,
Lex Fridman (45:04.500)
the very first thing ISIS did, they started saying,
Charles Hoskinson (45:06.580)
hey, the ownership of the land,
Lex Fridman (45:08.640)
it's gonna fundamentally change.
Charles Hoskinson (45:10.380)
We've decided that this guy over here
Lex Fridman (45:12.380)
now owns all these things and then when peace comes,
Lex Fridman (45:15.140)
how do you unwind all of that, put it all back together?
Lex Fridman (45:18.440)
So the power of a blockchain is that it gives you
Charles Hoskinson (45:21.220)
a transnational way of sorting all these details out,
Lex Fridman (45:25.100)
putting all together in a place that you know
Charles Hoskinson (45:29.620)
that even if it's inconvenient to a very powerful actor,
Lex Fridman (45:33.320)
that it will still stay preserved.
Charles Hoskinson (45:35.660)
This is an asymmetry we haven't had as a society.
Lex Fridman (45:38.780)
Usually kings and empires,
Charles Hoskinson (45:40.860)
they have the ability to decide what's true.
Lex Fridman (45:43.260)
And then suddenly you have this asymmetrical thing
Charles Hoskinson (45:45.420)
that is above them, kind of like a synthetic laws of physics
Lex Fridman (45:49.020)
and once something goes in there,
Charles Hoskinson (45:50.860)
you know that that's there.
Lex Fridman (45:52.840)
Okay, so that's the first part of it.
Charles Hoskinson (45:54.780)
The second part of it is that it's auditable,
Lex Fridman (45:59.500)
meaning that instead of saying only the high cleric
Charles Hoskinson (46:02.700)
or the president or some very special club of people
Lex Fridman (46:07.260)
get to see what's going on,
Charles Hoskinson (46:08.980)
suddenly now all the people can actually see
Lex Fridman (46:11.820)
who owns what where.
Charles Hoskinson (46:13.300)
Like imagine a tax system where the public club
Lex Fridman (46:16.100)
just leaked the taxes of all these different billionaires
Lex Fridman (46:19.140)
and said, well, how much do they make
Lex Fridman (46:20.100)
and how much do they pay?
Charles Hoskinson (46:21.340)
Well, imagine a tax system where that's just done by default
Lex Fridman (46:24.700)
or other social systems where this type of information
Charles Hoskinson (46:27.800)
is put in by default.
Lex Fridman (46:29.220)
So it's tremendously useful, this type of structure
Lex Fridman (46:32.840)
and all kinds of things, medical records, supply chains,
Lex Fridman (46:35.780)
just a good thought experiment is I travel a lot,
Charles Hoskinson (46:38.500)
I've been to 52 countries in the last five years.
Lex Fridman (46:41.060)
Imagine if I got sick in Zimbabwe,
Charles Hoskinson (46:43.660)
I get hit by a car or something and I'm unconscious
Lex Fridman (46:46.140)
and a Zimbabwean doctor calls my doctor in Colorado
Lex Fridman (46:48.820)
and says, hey, I need all Charles's medical records.
Lex Fridman (46:51.700)
He's unconscious right now, but I need it to treat him
Charles Hoskinson (46:54.740)
because he's quite ill.
Lex Fridman (46:56.220)
They'd say, who is this person in Zimbabwe?
Charles Hoskinson (46:58.860)
I don't know you, I can't give you his records,
Lex Fridman (47:00.820)
I need his consent.
Charles Hoskinson (47:01.660)
Oh no, he's unconscious in the hospital, I can't do it.
Lex Fridman (47:04.180)
Well, a broker system that would allow the movement
Charles Hoskinson (47:06.260)
of medical records would be an example
Lex Fridman (47:07.800)
of what a blockchain could potentially do
Charles Hoskinson (47:09.420)
in the foreseeable future.
Lex Fridman (47:10.820)
Cryptocurrency is just an application
Charles Hoskinson (47:12.700)
that runs on top of blockchain
Lex Fridman (47:14.220)
because it turns out that when you issue property,
Charles Hoskinson (47:16.460)
you also can issue tokens of value
Lex Fridman (47:18.860)
and then you could have a monetary policy,
Charles Hoskinson (47:20.420)
it could be inflationary or deflationary,
Lex Fridman (47:22.660)
you know, demurrage where it decays over time
Charles Hoskinson (47:25.080)
or whatever have you.
Lex Fridman (47:27.300)
And the very same mechanics that would ensure
Charles Hoskinson (47:29.940)
your property records are secure,
Lex Fridman (47:31.500)
your medical record access is secure,
Charles Hoskinson (47:33.420)
could also be applied for the ownership
Lex Fridman (47:35.140)
of the cryptocurrency.
Lex Fridman (47:36.180)
And again, you can either be completely transparent
Lex Fridman (47:38.780)
and everybody can see what everybody owns
Lex Fridman (47:40.240)
and that's what Bitcoin does,
Lex Fridman (47:41.640)
or you can be as opaque as you seek to be,
Charles Hoskinson (47:44.220)
that's what Zcash basically attempts to do.
Lex Fridman (47:46.420)
It says, hey, let's keep these things
Charles Hoskinson (47:47.740)
as private as possible.
Lex Fridman (47:49.100)
But they have relatively the same mechanics
Charles Hoskinson (47:50.740)
in terms of those properties of auditability
Lex Fridman (47:52.660)
and timestamping and immutability.
Charles Hoskinson (47:54.700)
You know things won't be reversed,
Lex Fridman (47:56.380)
you know, that people aren't gonna manipulate
Charles Hoskinson (47:57.900)
the timestamps and you can audit at least enough
Lex Fridman (48:01.160)
to know that the ownership is right.
Lex Fridman (48:03.220)
But the way, if you think about physics and the universe,
Lex Fridman (48:06.500)
the universe has figured out a way
Charles Hoskinson (48:07.900)
to update the ledger of physics
Lex Fridman (48:10.580)
in a way where like a lot of people can be updating it
Lex Fridman (48:13.380)
and it stays consistent.
Lex Fridman (48:16.100)
Is there something you can say about the task
Charles Hoskinson (48:19.660)
of updating the ledger when a bunch of people
Lex Fridman (48:21.940)
are trying to do it or a bunch of entities
Lex Fridman (48:23.820)
are trying to do it?
Lex Fridman (48:24.660)
Oh yeah, that's the whole point of a consensus algorithm.
Lex Fridman (48:26.260)
So whatever ledger you're running,
Lex Fridman (48:28.260)
there has to be some mechanism to decide who's in charge.
Lex Fridman (48:32.080)
And that's what proof of work does
Lex Fridman (48:33.720)
and proof of stake does and all these other systems.
Lex Fridman (48:35.860)
And you break them down to basically three steps.
Lex Fridman (48:37.900)
And so we'll use Eve for kind of step number one.
Lex Fridman (48:40.620)
Hi, Eve, how are you doing?
Lex Fridman (48:42.100)
And we're gonna use Wally for step number two.
Lex Fridman (48:44.380)
And I need the monkey, give me the monkey.
Lex Fridman (48:47.180)
What's the monkey's name?
Charles Hoskinson (48:49.040)
Daisy.
Lex Fridman (48:49.880)
Daisy the monkey, okay.
Charles Hoskinson (48:50.980)
I like Daisy.
Lex Fridman (48:52.340)
Daisy is a very confused monkey.
Charles Hoskinson (48:54.980)
It's pondering its own mortality.
Lex Fridman (48:56.740)
Right.
Lex Fridman (48:57.580)
And so anyway, the first step is all about
Lex Fridman (49:00.220)
basically deciding who's in charge for that moment.
Lex Fridman (49:03.180)
So blockchain is just a sequence of events.
Lex Fridman (49:05.100)
The heart has to beat, the metronome has to click.
Lex Fridman (49:08.100)
So somebody has to be in charge.
Lex Fridman (49:09.900)
And so generally you have this notion of a resource.
Lex Fridman (49:12.000)
So there's some pool of resource out there
Lex Fridman (49:14.220)
and it can be a token.
Lex Fridman (49:15.420)
And in that case, it's a plutocratic system
Lex Fridman (49:17.260)
and that's what proof of stake does
Charles Hoskinson (49:18.780)
or it can be computation, but there can be other resources.
Lex Fridman (49:21.720)
But computation is what proof of work does.
Lex Fridman (49:23.340)
And so you make so many hashes
Lex Fridman (49:25.060)
and then eventually somebody wins.
Lex Fridman (49:27.060)
And that person who wins is now the person
Lex Fridman (49:29.360)
who basically gets to decide the order of transactions
Lex Fridman (49:32.060)
and put them all together
Lex Fridman (49:33.260)
from their perspective in the system.
Charles Hoskinson (49:35.500)
Then once that person wins, they'll make the block.
Lex Fridman (49:37.940)
That's step two.
Lex Fridman (49:38.980)
And after it's made, transmit it
Lex Fridman (49:41.240)
and it gets validated and accepted.
Lex Fridman (49:43.100)
So actually it's quite fortuitous
Lex Fridman (49:44.160)
you have the magnifying glass
Charles Hoskinson (49:45.540)
because at this stage people are trying to decide
Lex Fridman (49:48.740)
is what I'm looking at correct or not.
Charles Hoskinson (49:51.120)
Now, there are other ways to potentially conceive of this,
Lex Fridman (49:54.400)
but this particular model gives you a kind of a way
Charles Hoskinson (49:57.540)
of thinking of all consensus algorithms in one setting.
Lex Fridman (4:00:00.400)
and do it completely online with an eVoting system.
Lex Fridman (4:00:03.900)
So that's something we'll be pursuing in 2022.
Lex Fridman (4:00:06.560)
You think there's some openness to that?
Charles Hoskinson (4:00:08.080)
Yeah, yeah.
Lex Fridman (4:00:09.440)
That's the one good thing about the craziness of Trump
Charles Hoskinson (4:00:11.440)
is you made half of America think the election system
Lex Fridman (4:00:13.560)
is completely, irreparably broken.
Lex Fridman (4:00:15.680)
So you walk in, it's like, we're gonna go kill Dominion,
Lex Fridman (4:00:18.320)
and they're like, yay, that's great, let's go do that.
Charles Hoskinson (4:00:20.920)
Whether you believe that or not,
Lex Fridman (4:00:23.040)
it's created a market opportunity,
Charles Hoskinson (4:00:24.480)
created a lack of faith and credibility in the system.
Lex Fridman (4:00:26.960)
To improve the system.
Charles Hoskinson (4:00:28.640)
Exactly, exactly.
Lex Fridman (4:00:30.200)
What do you think about El Salvador
Charles Hoskinson (4:00:32.240)
becoming the first country to approve a cryptocurrency,
Lex Fridman (4:00:35.840)
Bitcoin in this case, as a legal currency?
Lex Fridman (4:00:39.080)
And where's this trend going?
Lex Fridman (4:00:40.640)
First of all, this event,
Charles Hoskinson (4:00:42.480)
if you mentioned the Bitcoin conference,
Lex Fridman (4:00:44.160)
the Bitcoin folks believe that this is a monumental event.
Lex Fridman (4:00:47.520)
Do you think this is a start of something new?
Lex Fridman (4:00:49.840)
Well, they're both right, the critics and the pro people.
Lex Fridman (4:00:53.400)
So the critics are saying this is a nothing burger,
Lex Fridman (4:00:55.520)
and it's just a publicity event for El Salvador.
Lex Fridman (4:00:58.200)
And then the people say this is the most monumental event.
Lex Fridman (4:01:00.720)
They may actually be right, because there's
Charles Hoskinson (4:01:02.520)
reciprocal agreements.
Lex Fridman (4:01:04.240)
When a country issues a currency,
Charles Hoskinson (4:01:06.040)
other countries honor that, usually,
Lex Fridman (4:01:08.200)
and it trades on forex exchanges.
Lex Fridman (4:01:09.800)
So if Bitcoin becomes a recognized currency of a country,
Lex Fridman (4:01:14.080)
then it may be the case that the United States
Lex Fridman (4:01:16.560)
and European Union and others can't actually stop them
Lex Fridman (4:01:18.760)
from trading on forex exchanges
Lex Fridman (4:01:20.520)
and being treated as a currency
Lex Fridman (4:01:22.240)
from a regulatory perspective.
Lex Fridman (4:01:23.600)
So it was like a really clever backdoor
Lex Fridman (4:01:26.160)
into the League of Nations.
Lex Fridman (4:01:28.960)
And actually, we had this crazy harebrained idea years ago.
Lex Fridman (4:01:31.960)
We were down in Mexico at the Satoshi Roundtable,
Lex Fridman (4:01:34.520)
and we're like, hey, let's go buy a country.
Lex Fridman (4:01:36.680)
Let's go to Tuvalu and get them to do something
Charles Hoskinson (4:01:39.200)
with the cryptocurrency,
Lex Fridman (4:01:40.560)
because they sell everything in Tuvalu,
Charles Hoskinson (4:01:42.120)
like the.tv extension and their fishing rights,
Lex Fridman (4:01:44.800)
and Taiwan pays them money to recognize them and so forth.
Lex Fridman (4:01:48.160)
So I'm like, man, maybe we can convince Tuvalu
Lex Fridman (4:01:50.160)
to do something with crypto.
Lex Fridman (4:01:51.760)
And that didn't work out so well.
Lex Fridman (4:01:53.520)
But now El Salvador is actually playing the game,
Lex Fridman (4:01:56.520)
and that's a real country.
Lex Fridman (4:01:57.560)
It's got like 5 million people and so forth.
Lex Fridman (4:02:00.120)
So we know the president's brother,
Lex Fridman (4:02:02.000)
and we've had some conversations there.
Lex Fridman (4:02:03.800)
So maybe we'll go in the next few months
Lex Fridman (4:02:05.640)
and see what's going on there,
Lex Fridman (4:02:06.880)
and do a state visit and talk to the president.
Lex Fridman (4:02:09.200)
But it's an interesting development.
Lex Fridman (4:02:11.560)
And it's one of those things that it can't quite be ignored
Lex Fridman (4:02:14.280)
because the nation state's doing it.
Charles Hoskinson (4:02:15.920)
On the other hand, you have to manage expectations.
Lex Fridman (4:02:18.480)
Is the central bank taking a position in Bitcoin?
Charles Hoskinson (4:02:22.320)
Are they actually switching over to a cryptocurrency
Lex Fridman (4:02:24.840)
as their unit of account?
Charles Hoskinson (4:02:26.640)
Are they now getting off of BIS
Lex Fridman (4:02:28.320)
and they're all using the settlement rails of central banks?
Charles Hoskinson (4:02:31.680)
Are they actually block chaining the entire country
Lex Fridman (4:02:34.120)
and they have some broad, ambitious agenda
Lex Fridman (4:02:36.800)
to go and do all that?
Lex Fridman (4:02:37.840)
That remains to be seen.
Lex Fridman (4:02:38.880)
And so it really is a commitment there.
Lex Fridman (4:02:40.640)
The other thing is that if you're autocratic,
Charles Hoskinson (4:02:43.520)
these systems are not so good for you.
Lex Fridman (4:02:45.280)
Because the minute you adopt these types of systems,
Charles Hoskinson (4:02:47.200)
you're pushing a lot of power to the edges.
Lex Fridman (4:02:49.600)
So there's a world of difference between optics
Lex Fridman (4:02:51.840)
and actual commitment.
Lex Fridman (4:02:53.400)
And actual commitment is I'm prepared
Charles Hoskinson (4:02:55.720)
to accept the consequences that the state
Lex Fridman (4:02:58.000)
is going to lose a lot of power along the way.
Lex Fridman (4:03:00.960)
And the problem is it's not clear to me
Lex Fridman (4:03:03.240)
some of these politicians who are pro blockchain,
Lex Fridman (4:03:05.560)
and I'm not making a statement on El Salvador in particular,
Lex Fridman (4:03:08.160)
I'm just saying in general, are fully aware of that reality.
Charles Hoskinson (4:03:11.680)
A lot of them seem to think that somehow
Lex Fridman (4:03:13.400)
they can contain their blockchain genie in the bottle
Lex Fridman (4:03:16.120)
and blockchain their whole country,
Lex Fridman (4:03:17.640)
but stay president for life.
Charles Hoskinson (4:03:19.800)
That doesn't work.
Lex Fridman (4:03:21.720)
Once they have that power, they're gone.
Lex Fridman (4:03:23.640)
So do you think once they realize that this is one
Lex Fridman (4:03:26.840)
of the failure cases, one of the things
Charles Hoskinson (4:03:28.360)
that people are concerned about
Lex Fridman (4:03:29.360)
is governments banning cryptocurrency?
Lex Fridman (4:03:31.240)
Well, that's China case, right?
Lex Fridman (4:03:32.520)
They started realizing this was a legitimate threat
Charles Hoskinson (4:03:35.400)
to capital controls and to the autocratic system
Lex Fridman (4:03:37.880)
that they've constructed there.
Lex Fridman (4:03:38.960)
And then suddenly China started to build its own
Lex Fridman (4:03:41.200)
People's Bank of China blockchain,
Lex Fridman (4:03:43.200)
and Bitcoin is now the redheaded stepchild.
Lex Fridman (4:03:46.040)
They didn't really care too much
Charles Hoskinson (4:03:47.040)
because it was great for corruption.
Lex Fridman (4:03:48.120)
You could evade capital controls,
Lex Fridman (4:03:49.520)
and so all the well connected people,
Lex Fridman (4:03:51.640)
they're, oh yeah, Bitcoin's bad,
Lex Fridman (4:03:53.040)
but then they'd have Bitcoin of their own,
Lex Fridman (4:03:54.640)
and they could use it to send money around.
Lex Fridman (4:03:56.840)
But now the government has gotten very serious about it.
Lex Fridman (4:03:59.280)
They're saying like, okay, we wanna control
Lex Fridman (4:04:01.440)
and dominate this whole thing,
Lex Fridman (4:04:02.840)
and it's a threat to our plan for the digital yuan
Charles Hoskinson (4:04:05.080)
to become the world standard to displace the dollar.
Lex Fridman (4:04:07.240)
But so the moment you have El Salvador
Lex Fridman (4:04:09.160)
and just more and more countries,
Lex Fridman (4:04:10.640)
say there'll be a country in Europe, for example,
Charles Hoskinson (4:04:13.360)
that accepts Bitcoin or other cryptocurrencies, Cardano,
Lex Fridman (4:04:18.800)
the idea is it would put a lot of pressure on you.
Lex Fridman (4:04:21.080)
So there'll be like this kind of ripple effect
Lex Fridman (4:04:23.280)
that you, and then the individual governments
Charles Hoskinson (4:04:26.160)
won't be able to help,
Lex Fridman (4:04:27.000)
and eventually there'll be a superpower like,
Charles Hoskinson (4:04:29.520)
I don't know, Russia or the United States,
Lex Fridman (4:04:32.000)
and or, I don't know, Canada.
Lex Fridman (4:04:34.520)
So do you see that sort of an inevitable trend
Lex Fridman (4:04:38.440)
where cryptocurrency takes over the world
Lex Fridman (4:04:40.320)
as a store of value and as a method of payments?
Lex Fridman (4:04:46.040)
Yeah, probably.
Charles Hoskinson (4:04:46.880)
I mean, you can do just so much more
Lex Fridman (4:04:48.840)
with programmable finance.
Charles Hoskinson (4:04:49.960)
You know, transactions in general have five properties.
Lex Fridman (4:04:51.920)
You know, you have the asset that runs on the rail.
Charles Hoskinson (4:04:54.320)
That's what we always think about.
Lex Fridman (4:04:55.760)
And you can transact that, you know,
Lex Fridman (4:04:58.000)
and then you have the identity,
Lex Fridman (4:04:59.560)
and you transact that either like one to one,
Charles Hoskinson (4:05:02.040)
one to many, many to one, or many to many.
Lex Fridman (4:05:04.480)
And then you have metadata.
Lex Fridman (4:05:05.400)
So that's the story of the transactions,
Lex Fridman (4:05:07.200)
like where did it take place, these types of things.
Lex Fridman (4:05:09.600)
And then you have the contractual relationship.
Lex Fridman (4:05:12.280)
So that's the smart contract component.
Lex Fridman (4:05:13.640)
And then you embed that within regulation.
Lex Fridman (4:05:15.280)
So transactions always live within jurisdictions.
Charles Hoskinson (4:05:18.280)
This is relevant to the conversation
Lex Fridman (4:05:19.760)
that digital currencies take over
Charles Hoskinson (4:05:22.440)
because those things are right now done separately
Lex Fridman (4:05:25.800)
in a very fragmented and fractured way,
Lex Fridman (4:05:27.960)
and they're not completely globalized.
Lex Fridman (4:05:30.000)
And so super expensive to hoist up this entire system
Lex Fridman (4:05:33.080)
and automate things like compliance.
Lex Fridman (4:05:35.280)
It's usually a huge part of every bank's balance sheet.
Lex Fridman (4:05:39.400)
So when you look at the concept of a digital currency,
Lex Fridman (4:05:42.320)
you're saying all five of those things are programmable.
Lex Fridman (4:05:45.000)
And so they could be like library driven.
Lex Fridman (4:05:47.280)
You say, oh, I wanna be in compliance
Charles Hoskinson (4:05:48.560)
with the Eritrea, okay, pull up the Eritrean library.
Lex Fridman (4:05:51.920)
Now you are, it's built into the transaction.
Charles Hoskinson (4:05:54.520)
Previously, it's like, go hire some lawyers
Lex Fridman (4:05:56.800)
and go figure out the entire code
Lex Fridman (4:05:58.760)
and translate some things and rah, rah, rah.
Lex Fridman (4:06:01.280)
It's crazy.
Lex Fridman (4:06:02.800)
So just the orders of magnitude efficiency gains
Lex Fridman (4:06:07.520)
that you get and the increased liquidity you get
Lex Fridman (4:06:10.240)
and the fact that you can now represent all assets
Lex Fridman (4:06:13.040)
with a universal way, that financial stem cell,
Charles Hoskinson (4:06:15.720)
there's an inevitability to the victory of our industry.
Lex Fridman (4:06:18.680)
The challenge is how do we deal with this
Lex Fridman (4:06:21.300)
with the squabbling of superpowers?
Lex Fridman (4:06:24.040)
China wants to be the new world standard,
Charles Hoskinson (4:06:25.800)
America wants to preserve that,
Lex Fridman (4:06:27.280)
and the rest of the world is trying to figure out
Lex Fridman (4:06:29.200)
how do we create something that's a bit more fair
Lex Fridman (4:06:31.000)
and balanced?
Lex Fridman (4:06:32.280)
And so crypto comes in and it potentially is both an ally
Lex Fridman (4:06:36.440)
and a competitor to those desires.
Charles Hoskinson (4:06:38.120)
Because if you do too much crypto,
Lex Fridman (4:06:40.200)
you don't need a nation state anymore.
Charles Hoskinson (4:06:42.240)
If you do too little crypto, well, it's China or America.
Lex Fridman (4:06:45.640)
So what's that sweet spot?
Lex Fridman (4:06:47.880)
Do you hope that in the process of cryptocurrency
Lex Fridman (4:06:52.320)
pushing power to the edges to the people
Charles Hoskinson (4:06:55.440)
that we would be able to alleviate
Lex Fridman (4:06:57.400)
some of the suffering in the world
Charles Hoskinson (4:06:58.920)
caused by centralized power and the abuses of power,
Lex Fridman (4:07:01.920)
corruption, all those kinds of things?
Charles Hoskinson (4:07:03.320)
100%.
Lex Fridman (4:07:04.160)
I made a very angry video months ago.
Charles Hoskinson (4:07:07.280)
I make angry videos.
Lex Fridman (4:07:08.800)
I shouldn't drink, Clex.
Charles Hoskinson (4:07:11.440)
Maybe you should drink more.
Lex Fridman (4:07:12.280)
Yeah, I know, right?
Charles Hoskinson (4:07:13.160)
It depends on who you ask.
Lex Fridman (4:07:14.520)
I made a video a little while.
Charles Hoskinson (4:07:15.720)
I said, our industry is an industry of frustration.
Lex Fridman (4:07:18.000)
It exists because we weren't the industry
Charles Hoskinson (4:07:21.120)
that charged 85% interest to the poorest people
Lex Fridman (4:07:23.760)
in the world for loans.
Charles Hoskinson (4:07:24.760)
We weren't the industry that charged 15% to move money
Lex Fridman (4:07:27.800)
for a maid sending money home to mom in Manila.
Charles Hoskinson (4:07:32.240)
We weren't the industry that laundered
Lex Fridman (4:07:33.760)
hundreds of billions of dollars of drug money
Lex Fridman (4:07:36.040)
and funded arms dealers in Africa and all these things
Lex Fridman (4:07:38.880)
or permitted oil for food to exist and so forth.
Lex Fridman (4:07:42.880)
And the people who did these things aren't in jail.
Lex Fridman (4:07:44.880)
They're rich.
Charles Hoskinson (4:07:45.720)
They're billionaires.
Lex Fridman (4:07:46.560)
They fly private jets.
Lex Fridman (4:07:48.240)
So our industry is the antidote to these types of things.
Lex Fridman (4:07:51.560)
And we say, guys, we want a system that's fair.
Charles Hoskinson (4:07:54.800)
That's it.
Lex Fridman (4:07:56.280)
And we want everybody to be treated equally.
Charles Hoskinson (4:07:59.000)
That doesn't mean everybody's gonna win.
Lex Fridman (4:08:01.000)
It doesn't mean that when you lose,
Charles Hoskinson (4:08:03.160)
somebody's gonna come on a white horse and bail you out.
Lex Fridman (4:08:05.880)
You're gonna have winners and losers, but it's fair.
Charles Hoskinson (4:08:08.080)
That's all we want.
Lex Fridman (4:08:09.040)
That's all we've ever wanted.
Charles Hoskinson (4:08:10.640)
There's no coincidence that Bitcoin was created
Lex Fridman (4:08:12.640)
right around the same time as the 2008 financial crisis.
Charles Hoskinson (4:08:16.080)
It's not like these were just unrelated events.
Lex Fridman (4:08:17.920)
They're highly correlated to each other, okay?
Charles Hoskinson (4:08:20.200)
I'd say perhaps even causal, go figure.
Lex Fridman (4:08:23.120)
And everything we've done as an industry
Charles Hoskinson (4:08:26.080)
from that moment to today and beyond
Lex Fridman (4:08:28.800)
has been about that endless, relentless desire
Charles Hoskinson (4:08:32.760)
to make things a little bit less corrupt,
Lex Fridman (4:08:35.400)
a little bit less nepotistic and a bit more open.
Lex Fridman (4:08:38.920)
And it's gotten so insane
Lex Fridman (4:08:42.000)
that they have these things in Wyoming called speedy banks,
Charles Hoskinson (4:08:44.360)
where you're full reserve banks.
Lex Fridman (4:08:45.680)
They have 100% of their balance sheet is accounted for.
Charles Hoskinson (4:08:49.760)
They don't lend.
Lex Fridman (4:08:51.120)
And then you have the people in the banking community
Charles Hoskinson (4:08:53.040)
saying, well, those are a risk to banking.
Lex Fridman (4:08:55.360)
We're scared that these speedy banks are gonna default.
Lex Fridman (4:08:59.680)
It's like, what world are you living in?
Lex Fridman (4:09:02.240)
You have fractional reserves,
Charles Hoskinson (4:09:03.520)
sometimes like 2% assets on the balance sheet.
Lex Fridman (4:09:06.280)
And then you're worried that the guys
Charles Hoskinson (4:09:07.680)
who actually have a dollar for every dollar
Lex Fridman (4:09:09.600)
they say they have are the ones that are gonna collapse.
Charles Hoskinson (4:09:12.560)
It's like the 1984 level doublespeak
Lex Fridman (4:09:15.080)
when you see the system and negative interest rates
Lex Fridman (4:09:17.080)
and all these other things.
Lex Fridman (4:09:17.960)
And so I absolutely believe the direction course
Charles Hoskinson (4:09:20.880)
of this industry is to make things more honest and fair.
Lex Fridman (4:09:24.240)
And also by its very existence,
Charles Hoskinson (4:09:26.480)
it exposes double standards, hypocrisy and corruption.
Lex Fridman (4:09:30.520)
Just the fact that it's there,
Charles Hoskinson (4:09:32.200)
because it's one thing to say that, well,
Lex Fridman (4:09:34.200)
it just can't be because of the nature of global finance.
Charles Hoskinson (4:09:36.760)
There's no way to do it otherwise.
Lex Fridman (4:09:38.440)
It's another thing to see it there as an example
Lex Fridman (4:09:41.760)
and say, well, that thing is doing it.
Lex Fridman (4:09:43.400)
Why can't you guys be this way?
Charles Hoskinson (4:09:45.360)
That's why I'm so passionate about Africa
Lex Fridman (4:09:46.920)
because they don't like the systems they have
Lex Fridman (4:09:48.800)
and everybody's really young.
Lex Fridman (4:09:50.360)
And they are gonna throw all the systems out
Charles Hoskinson (4:09:52.560)
in the next 20 years.
Lex Fridman (4:09:53.560)
And they're gonna replace them with something else.
Charles Hoskinson (4:09:55.480)
If we get this stuff into Africa,
Lex Fridman (4:09:57.360)
1.2 billion people will be living
Charles Hoskinson (4:09:59.400)
in a considerably better system than the rest of the world.
Lex Fridman (4:10:02.280)
And then everybody else will look at that and say,
Lex Fridman (4:10:03.880)
why the hell are those guys so rich?
Lex Fridman (4:10:05.720)
Why are those guys making the money?
Lex Fridman (4:10:07.040)
Why are those guys doing so well?
Lex Fridman (4:10:08.840)
And it's not satisfying to hear,
Charles Hoskinson (4:10:10.080)
well, Africa is just better.
Lex Fridman (4:10:13.360)
No one's gonna say that.
Charles Hoskinson (4:10:14.480)
They're gonna say, okay, yeah, it's nepotism and corruption
Lex Fridman (4:10:17.680)
and lack of transparency and these types of things.
Lex Fridman (4:10:19.920)
So I think absolutely it has the potential
Lex Fridman (4:10:22.160)
to improve the human condition,
Lex Fridman (4:10:23.760)
but humans have to get out of the way.
Lex Fridman (4:10:26.240)
Humans have ingrained in themselves selfishness
Lex Fridman (4:10:29.040)
and it is a desire to maximize for themselves
Lex Fridman (4:10:32.040)
and their family and not thinking systems.
Lex Fridman (4:10:34.520)
And so we have to evolve capitalism at the same time.
Lex Fridman (4:10:38.160)
And what I mean by that is right now you're trying
Charles Hoskinson (4:10:40.280)
to maximize the amount of resources you get today.
Lex Fridman (4:10:42.560)
What we need to do is start thinking about
Lex Fridman (4:10:44.600)
how do we create future versions of ourselves in 2100
Lex Fridman (4:10:47.920)
and create a resource for that time period.
Lex Fridman (4:10:50.200)
And then the name of the game is to maximize that
Lex Fridman (4:10:53.120)
or balance that with what you get in the short term.
Lex Fridman (4:10:55.800)
And then suddenly you're saying to yourself,
Lex Fridman (4:10:57.440)
well, if I'm doing things that are good for me today,
Lex Fridman (4:11:00.160)
but compromising then I make less money.
Lex Fridman (4:11:02.720)
So capitalism as an engine is okay.
Charles Hoskinson (4:11:05.560)
The problem is it's misparameterized.
Lex Fridman (4:11:07.600)
Right, almost like inject longterm incentives
Charles Hoskinson (4:11:10.040)
into the capitalist system.
Lex Fridman (4:11:10.880)
Exactly.
Lex Fridman (4:11:11.720)
And cryptocurrency space is the only economic system
Lex Fridman (4:11:13.880)
where that's actually possible.
Charles Hoskinson (4:11:15.640)
You can create a tokenomic scheme
Lex Fridman (4:11:17.240)
where doing things that are beneficial for people
Charles Hoskinson (4:11:19.200)
you'll never meet because you're long dead
Lex Fridman (4:11:21.720)
actually makes you money today.
Charles Hoskinson (4:11:23.400)
You can't do that in a legacy financial system and so forth.
Lex Fridman (4:11:26.480)
So I think that that's the real impact capital conversation
Charles Hoskinson (4:11:29.400)
that has to be had as you explore these things
Lex Fridman (4:11:32.080)
is you have to talk to people and say,
Charles Hoskinson (4:11:34.000)
look, it's not about communism
Lex Fridman (4:11:35.560)
or socialism versus capitalism.
Charles Hoskinson (4:11:37.560)
It's not about, hey, let's donate and save the world
Lex Fridman (4:11:40.480)
or try to be charity and make things better.
Charles Hoskinson (4:11:43.120)
It's all about how do you use the fact
Lex Fridman (4:11:44.760)
that we have a better toolkit to create a different system,
Charles Hoskinson (4:11:48.160)
a different incentive model
Lex Fridman (4:11:49.720)
where the default configuration of the system
Charles Hoskinson (4:11:51.720)
is longterm thinking.
Lex Fridman (4:11:53.160)
And the default consideration of system
Charles Hoskinson (4:11:54.720)
is get rid of all these negative externalities
Lex Fridman (4:11:56.600)
that marketplaces have and judge the success of society,
Charles Hoskinson (4:11:59.880)
not by how the greatest of society are doing,
Lex Fridman (4:12:02.440)
but by how the least of society are doing.
Charles Hoskinson (4:12:04.880)
HDI, not GDP, this kind of thinking.
Lex Fridman (4:12:07.200)
And I think crypto can actually be the vanguard
Charles Hoskinson (4:12:09.880)
that kind of pushes us there.
Lex Fridman (4:12:10.720)
And the first countries to adopt that
Charles Hoskinson (4:12:12.880)
are gonna be just significantly better places to live.
Lex Fridman (4:12:16.040)
And the people who envy them
Charles Hoskinson (4:12:17.240)
will force the other countries to change.
Lex Fridman (4:12:18.560)
That's right.
Charles Hoskinson (4:12:19.400)
That'd be a ripple effect.
Lex Fridman (4:12:20.240)
So when you wake up in the morning
Charles Hoskinson (4:12:21.600)
or as you sleep like a baby,
Lex Fridman (4:12:23.080)
wake up multiple times in the middle of the night,
Lex Fridman (4:12:25.440)
do you feel the burden of this kind of future
Lex Fridman (4:12:31.640)
that's in your hands and not to mess it up?
Lex Fridman (4:12:34.400)
Like, what is it, Big Lebowski?
Lex Fridman (4:12:37.000)
Her life is in your hands, dude.
Charles Hoskinson (4:12:38.640)
Don't worry about them.
Lex Fridman (4:12:41.680)
They're nihilists, Tony.
Lex Fridman (4:12:43.000)
Do you feel the burden of like,
Lex Fridman (4:12:46.760)
because we're talking about all these 100 plus papers
Lex Fridman (4:12:49.480)
and the academic beauty of the algorithms
Lex Fridman (4:12:52.200)
we're talking about,
Lex Fridman (4:12:53.040)
and there's millions of human lives at stake here.
Lex Fridman (4:12:56.280)
I mean, you always feel the burden,
Charles Hoskinson (4:12:57.880)
especially in my own company.
Lex Fridman (4:12:59.040)
I mean, I have all these people work for me
Lex Fridman (4:13:00.640)
and they eat because I pay them, right?
Lex Fridman (4:13:03.200)
So if I can't pay them, then that's my fault.
Lex Fridman (4:13:06.320)
So you have to, as a leader,
Lex Fridman (4:13:09.280)
you always have to be cognizant
Charles Hoskinson (4:13:10.560)
that there's all these people
Lex Fridman (4:13:11.480)
who have signed up for your crazy vision
Lex Fridman (4:13:13.520)
and you have to be larger than life.
Lex Fridman (4:13:16.000)
You always have to be good.
Charles Hoskinson (4:13:18.240)
You're not allowed to have a bad day.
Lex Fridman (4:13:20.400)
You're not allowed to feel like shit.
Charles Hoskinson (4:13:21.760)
You always have to show up.
Lex Fridman (4:13:23.080)
You always have to be pushing for it.
Lex Fridman (4:13:26.160)
And so that's a huge burden in many respects
Lex Fridman (4:13:28.080)
because there's Charles the person
Lex Fridman (4:13:29.560)
and then Charles the CEO,
Lex Fridman (4:13:31.880)
and these are very different things
Charles Hoskinson (4:13:34.720)
in terms of expectations, at the very least.
Lex Fridman (4:13:37.200)
And so it's heavy in that respect.
Charles Hoskinson (4:13:39.880)
That said, what gives you solace
Lex Fridman (4:13:41.480)
is that you're not in it alone.
Charles Hoskinson (4:13:43.560)
It's lonely, but you're not alone.
Lex Fridman (4:13:45.240)
You have so many amazing people around you
Charles Hoskinson (4:13:47.680)
that are willing to help
Lex Fridman (4:13:48.720)
and actually take some of that burden.
Charles Hoskinson (4:13:51.080)
My life has gotten considerably better
Lex Fridman (4:13:53.200)
when I learned how to delegate and trust.
Lex Fridman (4:13:55.680)
And even if people screw up and fail,
Lex Fridman (4:13:57.960)
it's worth the risk
Charles Hoskinson (4:13:59.920)
because ultimately you're amplifying yourself.
Lex Fridman (4:14:02.360)
The other thing is that it's okay not to get all the way.
Charles Hoskinson (4:14:06.120)
You want to, you wanna push there,
Lex Fridman (4:14:07.800)
but make sure whatever the hell you do,
Charles Hoskinson (4:14:10.160)
you leave something for somebody else
Lex Fridman (4:14:12.000)
to pick up and carry on.
Charles Hoskinson (4:14:13.840)
That's why we care so much about the publication process
Lex Fridman (4:14:16.880)
and open source.
Charles Hoskinson (4:14:17.720)
We'll never file a patent in our entire history
Lex Fridman (4:14:20.480)
because whatever we do, it's yours as much as it is mine.
Lex Fridman (4:14:23.800)
And maybe I can only get you 70% of the way
Lex Fridman (4:14:26.280)
and I'll plop over dead from a heart attack
Charles Hoskinson (4:14:28.200)
or get killed by an eagle or something like that.
Lex Fridman (4:14:30.600)
Maybe somebody brings the.
Charles Hoskinson (4:14:31.440)
Eagle.
Lex Fridman (4:14:32.440)
Maybe somebody brings the hast eagle back and it kills me.
Lex Fridman (4:14:35.200)
So it could happen.
Lex Fridman (4:14:36.280)
They're bringing the woolly mammoth back.
Charles Hoskinson (4:14:37.600)
Talk to George Church about that.
Lex Fridman (4:14:39.880)
It's a good way to go.
Charles Hoskinson (4:14:40.720)
Yeah, I know.
Lex Fridman (4:14:41.560)
Even the eagle or the mammoth.
Charles Hoskinson (4:14:42.680)
I'd rather be crushed by a mammoth
Lex Fridman (4:14:44.080)
because eagles actually fly you up and drop you.
Charles Hoskinson (4:14:46.520)
It's.
Lex Fridman (4:14:47.360)
Oh, so you won't die via slow death
Lex Fridman (4:14:48.720)
and they probably peck at you.
Lex Fridman (4:14:49.960)
Exactly.
Charles Hoskinson (4:14:50.800)
You just be grievously wounded on the ground
Lex Fridman (4:14:52.720)
and the eagle is like slowly devouring you.
Charles Hoskinson (4:14:55.080)
Yeah, don't go down that way.
Lex Fridman (4:14:56.800)
I've lost my train of thought.
Charles Hoskinson (4:14:58.200)
The point is you feel deeply great
Lex Fridman (4:15:03.200)
with a bunch of people around you and then you give.
Charles Hoskinson (4:15:06.280)
Yeah, you delegate, you delegate.
Lex Fridman (4:15:07.800)
And somebody fights the eagle
Lex Fridman (4:15:09.600)
and then other people takes care of that
Lex Fridman (4:15:11.160)
and this, that and the other.
Charles Hoskinson (4:15:12.000)
You just do the best you can.
Lex Fridman (4:15:13.240)
You're in the arena.
Charles Hoskinson (4:15:14.080)
You fight as hard as you can.
Lex Fridman (4:15:15.240)
You leave nothing for home.
Charles Hoskinson (4:15:19.120)
You could put it all on the field
Lex Fridman (4:15:20.720)
and then when you go home,
Charles Hoskinson (4:15:21.680)
you have pride in what you've done
Lex Fridman (4:15:23.160)
and you know that you've at least made a slight difference.
Charles Hoskinson (4:15:26.000)
You know, one person can make a huge difference.
Lex Fridman (4:15:28.280)
Look at Norman Borlaug.
Charles Hoskinson (4:15:30.240)
I mean, he just went around the whole world
Lex Fridman (4:15:31.400)
teaching people how to grow crops.
Charles Hoskinson (4:15:32.880)
He saved a billion lives over the course of his life.
Lex Fridman (4:15:35.560)
Billion people didn't starve to death because of one guy.
Charles Hoskinson (4:15:38.720)
It's amazing the asymmetry
Lex Fridman (4:15:40.200)
and the returns on that type of a thing
Charles Hoskinson (4:15:41.760)
just for the knowledge transfer of all things
Lex Fridman (4:15:44.080)
and yet not a household name.
Lex Fridman (4:15:46.080)
So that's the other side of it, of the burdens.
Lex Fridman (4:15:49.200)
People always want something or something.
Lex Fridman (4:15:51.560)
So they say, oh, if I endured all these burdens,
Lex Fridman (4:15:53.240)
I should be given something.
Charles Hoskinson (4:15:54.720)
I entered into this space fully expecting
Lex Fridman (4:15:57.120)
that probably the most likely outcome was jail.
Charles Hoskinson (4:16:00.320)
That's what my dad told me and other people told me.
Lex Fridman (4:16:02.480)
And it was because it's like, look at where we came from.
Charles Hoskinson (4:16:04.880)
The Liberty Dollar, eGold, all these things.
Lex Fridman (4:16:07.040)
Anybody tries to innovate the monetary system,
Charles Hoskinson (4:16:09.560)
either end up like Gaddafi or they end up in prison
Lex Fridman (4:16:12.040)
or they end up like nepotistic corrupt banker
Charles Hoskinson (4:16:15.120)
or something like that.
Lex Fridman (4:16:16.520)
And so the financial regulations
Charles Hoskinson (4:16:19.760)
are not built for rapid innovation.
Lex Fridman (4:16:22.280)
They're not built for Bitcoin.
Charles Hoskinson (4:16:24.040)
There's a reason Satoshi was anonymous.
Lex Fridman (4:16:26.040)
It wasn't because he enjoyed the anonymity.
Charles Hoskinson (4:16:28.480)
There was legitimate criminal risk
Lex Fridman (4:16:30.840)
for this type of activity.
Lex Fridman (4:16:32.360)
So the fact that I've gotten this far
Lex Fridman (4:16:34.320)
and I'm doing pretty good, that's a win.
Charles Hoskinson (4:16:37.000)
You take that, life is good.
Lex Fridman (4:16:39.960)
What does a productive day in the life
Lex Fridman (4:16:41.640)
of Charles Hoskinson look like?
Lex Fridman (4:16:43.720)
Now we're getting to the details here.
Charles Hoskinson (4:16:46.000)
Diet, like fasting or not maybe,
Lex Fridman (4:16:49.320)
coffee, non coffee, exercise, sleep,
Charles Hoskinson (4:16:54.120)
scheduling like periods of deep work, programming,
Lex Fridman (4:16:57.600)
then the social media stuff that you do.
Charles Hoskinson (4:16:59.840)
You clearly enjoy being on social media
Lex Fridman (4:17:01.600)
and also live streaming, educating, inspiring the world
Charles Hoskinson (4:17:04.280)
or getting drunk and ranting at the computer.
Lex Fridman (4:17:07.880)
Well, first off you do a wet year and a dry year.
Charles Hoskinson (4:17:10.240)
That's what prevents you from becoming an alcoholic.
Lex Fridman (4:17:12.360)
So unfortunately the way that schedule worked,
Charles Hoskinson (4:17:14.960)
2020 was my dry year.
Lex Fridman (4:17:17.000)
Like I didn't drink the entire year.
Charles Hoskinson (4:17:18.760)
Not a single sip of alcohol.
Lex Fridman (4:17:20.160)
It was the worst.
Charles Hoskinson (4:17:21.000)
On purpose.
Lex Fridman (4:17:21.840)
Yeah, you do a dry year and then you do a wet year.
Charles Hoskinson (4:17:23.560)
Oh, so this is one of your ideas about life
Lex Fridman (4:17:26.240)
is you alternate.
Charles Hoskinson (4:17:27.280)
Yeah, you have to alternate.
Lex Fridman (4:17:28.760)
Never do too much of any one thing.
Charles Hoskinson (4:17:30.440)
Well, Churchill never alternated.
Lex Fridman (4:17:31.640)
He just kept drinking throughout his life.
Charles Hoskinson (4:17:32.960)
He did pretty good.
Lex Fridman (4:17:33.960)
Just to push back against the year.
Charles Hoskinson (4:17:37.760)
Yeah, he had an Alfred North Whitehead.
Lex Fridman (4:17:39.400)
Although didn't Churchill get kicked out
Lex Fridman (4:17:41.000)
as prime minister at some point?
Lex Fridman (4:17:42.240)
So maybe he took one dry year.
Charles Hoskinson (4:17:44.280)
Yeah, he was a sober, happy, in shape Churchill.
Lex Fridman (4:17:47.120)
He would have led a Britain for 30 fucking years.
Lex Fridman (4:17:49.320)
But you know, see Lex, that's why we can't have nice things.
Lex Fridman (4:17:55.120)
Conor S. Thompson, maybe you're onto something.
Charles Hoskinson (4:17:57.000)
Oh, you know, it's really crazy if you go to Aspen
Lex Fridman (4:17:58.960)
and see the bar he used to go to.
Charles Hoskinson (4:18:00.840)
I actually met a waitress who knew him really well
Lex Fridman (4:18:02.680)
and he'd go in there like two, three times a day
Lex Fridman (4:18:05.360)
and she's like, yeah, he'd do cocaine
Lex Fridman (4:18:07.240)
right here on the table and he'd come in with lots of pills
Lex Fridman (4:18:10.280)
and just put them all out on the table
Lex Fridman (4:18:12.320)
and be taking them at different hours
Lex Fridman (4:18:13.880)
and they were all clearly illegal substances
Lex Fridman (4:18:15.760)
but we'd just give him coffee or whatever he wanted.
Charles Hoskinson (4:18:18.320)
He's a great guy.
Lex Fridman (4:18:19.320)
But anyway, that's the day in the life of Charles.
Charles Hoskinson (4:18:20.800)
I fast, I tried to do intermittent fasting, 16, eight.
Lex Fridman (4:18:23.920)
The longest fast I ever did for a long term fast
Charles Hoskinson (4:18:26.200)
was two weeks, which was just crazy.
Lex Fridman (4:18:28.120)
Wow.
Charles Hoskinson (4:18:28.960)
Oh my God, I was.
Lex Fridman (4:18:30.200)
Can you take me through the journey of like philosophically
Lex Fridman (4:18:33.160)
what was going on in your mind?
Lex Fridman (4:18:34.720)
Well, so normally when I do an extended fast
Charles Hoskinson (4:18:37.120)
it's about three, four days
Lex Fridman (4:18:38.680)
because that's the sweet spot before you start losing
Charles Hoskinson (4:18:40.840)
muscle mass and other things start happening
Lex Fridman (4:18:42.880)
and people know so much more about this than I do
Lex Fridman (4:18:45.800)
but I just feel pretty good
Lex Fridman (4:18:47.080)
and you kind of get addicted to the fast high.
Charles Hoskinson (4:18:49.520)
You don't have to eat, you have no downtime,
Lex Fridman (4:18:52.280)
you're just going, your energy never dips
Lex Fridman (4:18:54.680)
and so I used to do like three, five days,
Lex Fridman (4:18:58.200)
maybe three, four was the sweet spot
Lex Fridman (4:19:00.800)
but then after about a week I was like,
Lex Fridman (4:19:02.640)
how long do I, can I make this go?
Lex Fridman (4:19:04.560)
And so I started talking to some people,
Lex Fridman (4:19:05.760)
I said, well, Angus Barbary did 384 days,
Charles Hoskinson (4:19:09.840)
of course I'm not as fat as Angus
Lex Fridman (4:19:11.240)
so I said, oh, I can do two weeks.
Lex Fridman (4:19:13.080)
So I just kept going and kept going and kept going
Lex Fridman (4:19:15.440)
and kept going and right around the two week mark
Charles Hoskinson (4:19:19.280)
I fainted for a little bit in a chair
Lex Fridman (4:19:21.640)
and I was like, okay, maybe I should start eating again
Lex Fridman (4:19:24.920)
but then I was legitimately worried
Lex Fridman (4:19:26.160)
about like refeeding syndrome and this stuff,
Lex Fridman (4:19:28.040)
like, okay, how do I take care of that?
Lex Fridman (4:19:30.040)
So my brother's a doctor and I called him
Lex Fridman (4:19:31.640)
and I said, hey, Willie, I haven't eaten in two weeks,
Lex Fridman (4:19:34.360)
how do I start eating again?
Lex Fridman (4:19:36.480)
And he's like, what?
Lex Fridman (4:19:39.880)
Slowly.
Charles Hoskinson (4:19:40.720)
Slowly, yeah, so the usual routine intermittent fasting,
Lex Fridman (4:19:43.800)
although I haven't been as good about it as I should be
Lex Fridman (4:19:46.080)
and I used to work out, I don't do as much as that,
Lex Fridman (4:19:49.080)
the stress and the work life balance has been horrible
Charles Hoskinson (4:19:52.800)
the last 24 months and I've gained a lot of weight
Lex Fridman (4:19:55.000)
and all that stuff but I'll fix that
Lex Fridman (4:19:57.080)
but I do try a lot of things,
Lex Fridman (4:19:58.240)
like I used to call map and I do meditation,
Charles Hoskinson (4:20:00.320)
recently I started doing photobiomodulation,
Lex Fridman (4:20:02.760)
you ever heard of that?
Charles Hoskinson (4:20:03.680)
It's a crazy headset called a Vlite,
Lex Fridman (4:20:06.160)
you saw that picture of me with like the weird thing
Charles Hoskinson (4:20:08.120)
with the red lights on,
Lex Fridman (4:20:09.400)
it actually shoots lights into your brain,
Charles Hoskinson (4:20:10.920)
it's really cool stuff but it improves blood flow
Lex Fridman (4:20:13.240)
and actually there's some peer reviewed studies
Charles Hoskinson (4:20:15.320)
that show that it does neurogenesis
Lex Fridman (4:20:17.240)
so you actually generate new neurons and things like that,
Charles Hoskinson (4:20:19.880)
it's really cool stuff so I do that
Lex Fridman (4:20:21.960)
and it actually helps a lot
Lex Fridman (4:20:24.000)
and every day's a little different.
Lex Fridman (4:20:27.400)
Do you get a few hours of like alone time to work, to think?
Charles Hoskinson (4:20:31.320)
Yeah, deep work is so important,
Lex Fridman (4:20:34.280)
there's even a book on that, like Deep Work.
Charles Hoskinson (4:20:36.800)
Yeah, by Cal Newport.
Lex Fridman (4:20:38.080)
I think you interviewed him, didn't you?
Charles Hoskinson (4:20:39.200)
Yeah, everyone should listen to this podcast,
Lex Fridman (4:20:41.560)
Deep Questions, he's awesome,
Charles Hoskinson (4:20:43.320)
he's a mathematician, theoretical computer scientist
Lex Fridman (4:20:46.760)
so those guys really need their time
Lex Fridman (4:20:48.400)
and want to really think.
Lex Fridman (4:20:49.560)
That's the one thing I deeply miss,
Charles Hoskinson (4:20:51.320)
when you're a CEO, you're the master of the five minute deal,
Lex Fridman (4:20:54.800)
you come in, you talk to people,
Charles Hoskinson (4:20:56.360)
you make a decision, you move on to the next thing,
Lex Fridman (4:20:58.040)
you move on to the next thing
Lex Fridman (4:20:58.880)
and I used to be used to like really deep focus,
Lex Fridman (4:21:01.240)
you'd sit down and think about something
Charles Hoskinson (4:21:02.680)
for 10 hours, 15 hours, 20 hours and that's that
Lex Fridman (4:21:05.760)
and I enjoyed it, it was just so beautiful
Charles Hoskinson (4:21:08.000)
to get lost into something and just go and go and go
Lex Fridman (4:21:11.800)
and then you become a CEO and it's like
Charles Hoskinson (4:21:13.320)
you never can go and go,
Lex Fridman (4:21:14.320)
you're lucky if you read a four page thing
Charles Hoskinson (4:21:16.360)
because there's something else that comes up,
Lex Fridman (4:21:18.080)
you have to travel, you have to do that
Lex Fridman (4:21:19.720)
so I've been trying lately to have
Lex Fridman (4:21:21.600)
and actually our chief of staff recommended
Charles Hoskinson (4:21:23.800)
like Fridays is do not disturb day
Lex Fridman (4:21:26.200)
so it's for deep work, you don't have meetings,
Charles Hoskinson (4:21:28.840)
none of these things
Lex Fridman (4:21:29.680)
and so far I have not committed to that
Lex Fridman (4:21:32.040)
but everybody else in the organization
Lex Fridman (4:21:33.320)
has started to move there
Lex Fridman (4:21:34.200)
but my hope is next month
Lex Fridman (4:21:35.640)
that I can actually get serious about that.
Charles Hoskinson (4:21:37.580)
The other time I'm lost in thought
Lex Fridman (4:21:39.000)
is I do a lot of float tanks,
Lex Fridman (4:21:40.740)
have you ever done isolation tanks?
Lex Fridman (4:21:42.360)
But I really want to.
Charles Hoskinson (4:21:43.800)
It's one of the most amazing things you can do,
Lex Fridman (4:21:46.280)
you come out on the other side
Lex Fridman (4:21:48.000)
and all your stress worries, they're just gone
Lex Fridman (4:21:51.240)
and you have so much productivity and clarity,
Charles Hoskinson (4:21:53.880)
if you combine that with daily naps, that's the way to go.
Lex Fridman (4:21:57.160)
Yeah, I'm a huge fan of naps
Lex Fridman (4:21:58.560)
so what about the social media stuff
Lex Fridman (4:22:01.520)
and like you doing the live streams,
Lex Fridman (4:22:04.540)
do you ever dread those?
Lex Fridman (4:22:06.680)
Are you energized by those?
Charles Hoskinson (4:22:08.960)
Because you're exceptionally good
Lex Fridman (4:22:10.280)
at communicating all the different kinds of ideas
Lex Fridman (4:22:12.240)
and being very transparent with the community,
Lex Fridman (4:22:14.000)
all those kinds of things.
Charles Hoskinson (4:22:14.820)
I really enjoy the live streams,
Lex Fridman (4:22:16.840)
it's fun, it's never been a chore
Charles Hoskinson (4:22:18.920)
because it's for them,
Lex Fridman (4:22:20.520)
it's a chance for people in the community
Charles Hoskinson (4:22:22.240)
who've been loyal and they really love it
Lex Fridman (4:22:23.600)
to actually just be there, ask some questions
Lex Fridman (4:22:25.560)
and I try to make it as entertaining as possible
Lex Fridman (4:22:28.320)
and you have your trolls and you have your love
Lex Fridman (4:22:32.160)
and it's actually nice to have a mixture of the two
Lex Fridman (4:22:34.680)
because sometimes you can beat down trolls just for fun,
Charles Hoskinson (4:22:37.200)
that kind of stuff and it's grown to a cult following,
Lex Fridman (4:22:40.460)
I think there's like 40, 50,000 people
Lex Fridman (4:22:42.480)
and it's almost like Fight Club in a certain respect.
Lex Fridman (4:22:45.360)
So I was in Vancouver years ago
Lex Fridman (4:22:47.400)
and I was in Air Canada checking in,
Lex Fridman (4:22:49.320)
just about to fly back to Colorado
Lex Fridman (4:22:50.920)
and I was getting this weird vibe
Lex Fridman (4:22:52.520)
from the guy that was checking me in
Lex Fridman (4:22:53.920)
and then right after he takes my bag,
Lex Fridman (4:22:55.960)
he kind of leans over to me, he's like,
Lex Fridman (4:22:57.320)
I love Ada and I was like, really?
Lex Fridman (4:23:00.280)
He's like, yeah, I watch your live streams
Lex Fridman (4:23:02.480)
and then I was flying into London,
Lex Fridman (4:23:04.000)
I was in London Heathrow Airport
Lex Fridman (4:23:05.440)
and the passport control guy was there
Lex Fridman (4:23:07.280)
and I was just about to take my passport out
Lex Fridman (4:23:09.080)
and he says, welcome to London, Mr. Hoskinson.
Lex Fridman (4:23:11.400)
I was like, oh God, am I going to jail in London?
Lex Fridman (4:23:15.440)
Why does the border patrol guy know who I am?
Lex Fridman (4:23:17.520)
This is a bad deal for me
Lex Fridman (4:23:19.400)
and it turned out he watched my live streams
Lex Fridman (4:23:22.020)
and so there's a lot of that and that's so much fun.
Charles Hoskinson (4:23:25.760)
In fact, here in Austin, I was at a Mexican restaurant
Lex Fridman (4:23:28.240)
just down in the closest place
Lex Fridman (4:23:31.120)
and while eating there, two different people recognized me
Lex Fridman (4:23:33.920)
and I took a picture with one of them
Lex Fridman (4:23:35.400)
and again, they watched the live streams.
Lex Fridman (4:23:37.240)
So that's.
Charles Hoskinson (4:23:38.080)
Well, if it's anything like Fight Club,
Lex Fridman (4:23:39.260)
you have to wonder if some of those people
Charles Hoskinson (4:23:40.920)
or all of them are just figments of your imagination.
Lex Fridman (4:23:43.500)
Right, I would.
Charles Hoskinson (4:23:46.160)
I don't have an answer for that.
Lex Fridman (4:23:49.480)
I could be a figment of your imagination
Charles Hoskinson (4:23:51.160)
which just proves that yes.
Lex Fridman (4:23:52.000)
Yeah, but honestly,
Charles Hoskinson (4:23:52.840)
if I was capable of that level of delusion,
Lex Fridman (4:23:54.640)
why the hell don't I look like Brad Pitt?
Charles Hoskinson (4:23:56.400)
Good point.
Lex Fridman (4:23:57.240)
Okay, so on this topic, let me ask you about mushrooms.
Charles Hoskinson (4:24:02.400)
You're interested in mushrooms, growing mushrooms.
Lex Fridman (4:24:05.580)
I believe you are also interested
Charles Hoskinson (4:24:08.240)
in the mind expanding capabilities of psychedelics.
Lex Fridman (4:24:11.320)
At least you mentioned kind of the interesting place
Charles Hoskinson (4:24:14.240)
where your interest in non psychedelic mushrooms might go.
Lex Fridman (4:24:17.520)
Can you explain the nature of your interest in mushrooms?
Lex Fridman (4:24:21.120)
Is it personal, is it business, is it both?
Lex Fridman (4:24:24.120)
No, it's a little bit of everything.
Charles Hoskinson (4:24:25.480)
You know, it's just an underexplored area
Lex Fridman (4:24:28.000)
of science and botany that ought to be explored
Charles Hoskinson (4:24:31.200)
because there's so much cool, interesting stuff there.
Lex Fridman (4:24:34.600)
Mushrooms do so much.
Charles Hoskinson (4:24:37.320)
Like they have these things called cordyceps
Lex Fridman (4:24:39.380)
and they are like a zombie fungus that infects insects,
Charles Hoskinson (4:24:43.720)
takes them over and then it will have them
Lex Fridman (4:24:46.360)
kind of get to other insects
Lex Fridman (4:24:47.720)
and then burst out of their head like an alien
Lex Fridman (4:24:50.160)
and spray spores on them and repeat the process.
Charles Hoskinson (4:24:52.240)
I mean, they even made a damn game about this.
Lex Fridman (4:24:53.920)
The Last of Us or something like that.
Lex Fridman (4:24:55.840)
And this is a real thing.
Lex Fridman (4:24:56.880)
Like you can Google it and see like these dead ants
Charles Hoskinson (4:24:59.020)
with these fungal stabs coming out of them.
Lex Fridman (4:25:01.440)
It's like, holy God, this is crazy.
Lex Fridman (4:25:03.840)
And in the same topic, you go all the way to Lion's Mane
Lex Fridman (4:25:09.720)
and it could actually help treat Alzheimer's
Lex Fridman (4:25:11.760)
and treat depression and Parkinson's
Lex Fridman (4:25:14.480)
and regrow nerves and so forth.
Charles Hoskinson (4:25:16.720)
Other things, they've shown some effectiveness
Lex Fridman (4:25:19.640)
against COVID, you know, it's just so crazy
Charles Hoskinson (4:25:22.280)
the diversity in the mushroom kingdom
Lex Fridman (4:25:24.200)
of the medicinal applications, the pesticide applications.
Charles Hoskinson (4:25:29.580)
You can use it a lot to kind of save hay and trees.
Lex Fridman (4:25:32.320)
There's a lot of things you can do
Charles Hoskinson (4:25:33.920)
to combat all kinds of invasive species.
Lex Fridman (4:25:37.160)
And it's true, there's a lot of cool stuff
Charles Hoskinson (4:25:39.600)
with psychedelic mushrooms and there's a great book
Lex Fridman (4:25:42.080)
from Michael Pollan, How to Change Your Mind,
Charles Hoskinson (4:25:44.880)
where he was really the first journalist
Lex Fridman (4:25:46.320)
a long time to go and Roland Griffiths
Charles Hoskinson (4:25:48.720)
work his way through the Johns Hopkins studies.
Lex Fridman (4:25:50.960)
But the long and short for me when I read that book,
Charles Hoskinson (4:25:53.000)
like, okay, mind expansion is great,
Lex Fridman (4:25:54.880)
but look at the effectiveness of psychedelics,
Charles Hoskinson (4:25:59.280)
psilocybin mushrooms with SSRIs,
Lex Fridman (4:26:02.200)
selective serotonin reuptake inhibitors
Charles Hoskinson (4:26:04.000)
for the treatment of depression.
Lex Fridman (4:26:05.540)
They showed in the Johns Hopkins studies
Charles Hoskinson (4:26:07.840)
that they're equal or better in effectiveness
Lex Fridman (4:26:09.920)
in many cases for the treatment of depression
Charles Hoskinson (4:26:13.720)
than a drug that you have to take forever.
Lex Fridman (4:26:16.660)
And this is just one or two treatments
Lex Fridman (4:26:18.560)
and then you desist from it.
Lex Fridman (4:26:20.520)
That's a miracle because there's so many people
Charles Hoskinson (4:26:22.640)
suffer from severe depression and it's a lifetime ailment.
Lex Fridman (4:26:26.760)
And the fact that we have something in the toolbox
Charles Hoskinson (4:26:29.040)
that we've underexplored is a very powerful thing.
Lex Fridman (4:26:32.400)
The other thing was end of life issues.
Charles Hoskinson (4:26:34.520)
A lot of people get cancer.
Lex Fridman (4:26:35.840)
I've lost people in the family from cancer.
Lex Fridman (4:26:38.240)
And it's so hard those last two, three months
Lex Fridman (4:26:41.120)
because they kind of have this,
Charles Hoskinson (4:26:43.320)
they're in a horrific pain, they're trying to find meaning
Lex Fridman (4:26:45.720)
and why is this happening to me?
Lex Fridman (4:26:47.560)
And if you can just give them a substance
Lex Fridman (4:26:49.200)
that on the other side of it, there's a good chance
Charles Hoskinson (4:26:51.120)
they can come to peace with everything
Lex Fridman (4:26:52.720)
and die with a lot more dignity and happiness.
Charles Hoskinson (4:26:56.240)
That alone justifies an enormous amount of study
Lex Fridman (4:26:59.440)
and the fact that these things are super cheap
Lex Fridman (4:27:01.560)
and they grow pretty much anywhere, it's pretty cool.
Lex Fridman (4:27:03.920)
Now on the commercial side,
Charles Hoskinson (4:27:04.920)
you can make a lot of money from mushrooms.
Lex Fridman (4:27:07.000)
I'm working with a company called Farmbox Foods
Lex Fridman (4:27:09.240)
and it's one of the,
Lex Fridman (4:27:11.240)
they do both vertical hydropartic farming,
Charles Hoskinson (4:27:13.600)
they also do mushroom and they put these amazing labs
Lex Fridman (4:27:18.240)
and shipping containers
Charles Hoskinson (4:27:20.080)
that are kind of like controlled environments.
Lex Fridman (4:27:22.080)
You grow 400 pounds of gourmet mushrooms
Charles Hoskinson (4:27:24.280)
a single week off of that.
Lex Fridman (4:27:26.160)
And your margins can be up to 30% per year.
Charles Hoskinson (4:27:28.480)
If you're just selling them for food consumption,
Lex Fridman (4:27:31.360)
if you're doing supplements,
Charles Hoskinson (4:27:32.280)
they can be even higher than that.
Lex Fridman (4:27:34.400)
So it just kind of made sense
Charles Hoskinson (4:27:35.480)
from a diversification of assets to say,
Lex Fridman (4:27:37.320)
hey, let's do some stuff in hydroponics
Lex Fridman (4:27:38.960)
and aquaponics and mushrooms.
Lex Fridman (4:27:40.920)
But the more I do and the more I learn that community,
Charles Hoskinson (4:27:43.280)
just the cooler that community is.
Lex Fridman (4:27:45.400)
Like I went to this beautiful mushroom festival
Charles Hoskinson (4:27:47.240)
in Cape Springs down in Georgia.
Lex Fridman (4:27:49.880)
And I met this guy named Bill Yule
Lex Fridman (4:27:52.920)
and he just looks like a druid.
Lex Fridman (4:27:55.040)
You know, it's just like he lives in a tree
Lex Fridman (4:27:56.680)
and he opens up the tree and goes out and everything.
Lex Fridman (4:27:58.680)
And I was like, Bill, what do you do?
Charles Hoskinson (4:27:59.840)
He said, I go and I try to study beetles and boletes
Lex Fridman (4:28:03.480)
and a very particular type of beetle.
Lex Fridman (4:28:05.120)
And they mate in the most crazy way.
Lex Fridman (4:28:07.640)
It's like this beetle will fuse on top of another beetle
Lex Fridman (4:28:10.520)
and they'll vibrate.
Lex Fridman (4:28:11.680)
And if they make the right harmony,
Charles Hoskinson (4:28:12.880)
she'll mate with them, otherwise they'll kick her off.
Lex Fridman (4:28:14.960)
And you can only make the harmony
Charles Hoskinson (4:28:16.320)
while you're on a specific type of bolete mushroom.
Lex Fridman (4:28:18.840)
If it's anywhere else, the harmony doesn't.
Lex Fridman (4:28:20.520)
It's like, who the fuck does this?
Lex Fridman (4:28:21.880)
It's like 20 years, 30 years just thinking
Charles Hoskinson (4:28:25.320)
about goddamn beetles and bolete mushrooms,
Lex Fridman (4:28:27.880)
but that's that community.
Lex Fridman (4:28:29.040)
And they're the happiest people you'll ever meet.
Lex Fridman (4:28:31.600)
And they're just so much fun to talk to.
Lex Fridman (4:28:33.280)
And there's just so much lore there that's not discovered.
Lex Fridman (4:28:36.520)
The other thing is there's a ton of undiscovered mushrooms.
Charles Hoskinson (4:28:39.800)
So, you go to my ranch up in Wyoming,
Lex Fridman (4:28:42.080)
go out that national forest next to it,
Charles Hoskinson (4:28:43.720)
you'll probably discover six or seven new species
Lex Fridman (4:28:46.080)
just doing some gene sequencing and things like that.
Charles Hoskinson (4:28:49.000)
So, there's like a gold rush for new things to discover,
Lex Fridman (4:28:52.640)
to treat all kinds of things.
Charles Hoskinson (4:28:53.920)
So, I love mushrooms, love that community.
Lex Fridman (4:28:55.640)
I think there's a lot of wonderful medicinal properties
Lex Fridman (4:28:57.840)
and everybody there is just a lot of fun to hang out with.
Lex Fridman (4:29:00.840)
The other passion is aquaponics and hydroponics.
Lex Fridman (4:29:03.080)
And I got a lot more serious after COVID.
Lex Fridman (4:29:06.080)
I go to the supermarket, all the store shelves are barren.
Charles Hoskinson (4:29:08.640)
I say, guys, can you imagine if we had a real big thing,
Lex Fridman (4:29:12.120)
what this would be like?
Charles Hoskinson (4:29:13.480)
We need to have domestic food production.
Lex Fridman (4:29:15.560)
We need to have resilience at the community level.
Charles Hoskinson (4:29:18.040)
So, let's go build a $40, $50 million aquaponics facility
Lex Fridman (4:29:21.280)
next to every major city.
Charles Hoskinson (4:29:23.440)
So, at least you have some local production of food
Lex Fridman (4:29:26.360)
and people won't starve to death.
Charles Hoskinson (4:29:27.920)
Otherwise, it's very bad.
Lex Fridman (4:29:29.720)
And again, the margins are phenomenal there, 20%, 30%,
Charles Hoskinson (4:29:32.960)
if you actually do it right
Lex Fridman (4:29:34.200)
and alternate your crops properly and so forth.
Lex Fridman (4:29:36.440)
And you create a lot of high paying jobs with it as well.
Lex Fridman (4:29:38.960)
And so, you kind of draw a lot of value
Charles Hoskinson (4:29:41.780)
from staying close to nature in all of these kinds of ways
Lex Fridman (4:29:44.280)
that are keeping you humble.
Lex Fridman (4:29:45.580)
Like you said, what is it?
Lex Fridman (4:29:46.720)
The goat is still gonna crap on you.
Charles Hoskinson (4:29:49.200)
Oh, yeah, the donkeys will shit on you
Lex Fridman (4:29:50.720)
whether you're broke or a billionaire.
Charles Hoskinson (4:29:53.200)
That's a good line.
Lex Fridman (4:29:54.040)
That's the line you'll be remembered for
Charles Hoskinson (4:29:59.800)
if the universe has a sense of humor.
Lex Fridman (4:30:01.440)
It's a neo Yogi Berra.
Charles Hoskinson (4:30:04.520)
So, I think mushrooms is a good place to ask
Lex Fridman (4:30:07.800)
about my friend, Joe Rogan.
Charles Hoskinson (4:30:11.220)
So, I keep folks from the Cardano community
Lex Fridman (4:30:13.320)
kept saying, keep saying things like,
Charles Hoskinson (4:30:15.900)
Lex podcasts first, then Joe Rogan experience.
Lex Fridman (4:30:19.880)
I guess I'm the moon and Joe is Mars in this metaphor.
Charles Hoskinson (4:30:24.000)
Since I'm a CS person, I can talk a little bit
Lex Fridman (4:30:27.440)
more fluently about cryptocurrency
Charles Hoskinson (4:30:29.120)
because fundamentally cryptocurrency
Lex Fridman (4:30:31.600)
is a computational idea.
Lex Fridman (4:30:33.080)
But then there's somebody like Joe
Lex Fridman (4:30:34.800)
who is more like an everyman.
Charles Hoskinson (4:30:36.240)
He does not necessarily know the technical intricacies
Lex Fridman (4:30:39.360)
of cryptocurrencies.
Lex Fridman (4:30:40.720)
And I don't think he's had a cryptocurrency person on.
Lex Fridman (4:30:45.120)
Didn't he interview Andreas on Todopolis?
Charles Hoskinson (4:30:47.480)
Oh, he did.
Lex Fridman (4:30:48.320)
That's right, a long, long time ago.
Lex Fridman (4:30:49.400)
But that was almost like the cryptocurrency space
Lex Fridman (4:30:53.400)
goes through phases.
Lex Fridman (4:30:54.880)
And I think we're in a new era of some kind.
Lex Fridman (4:30:57.600)
And how do you talk to Joe about Cardano?
Lex Fridman (4:31:01.840)
How do you talk to Joe about what the heck?
Lex Fridman (4:31:04.880)
I remember somebody tried to explain to him
Lex Fridman (4:31:06.200)
what Dogecoin is.
Lex Fridman (4:31:07.960)
How do you explain this whole space?
Charles Hoskinson (4:31:09.360)
Of where Bitcoin is, of where Ethereum is,
Lex Fridman (4:31:12.080)
of where Cardano and smart contracts
Lex Fridman (4:31:13.840)
and some of this proof of work,
Lex Fridman (4:31:15.220)
with this proof of stake ideas
Charles Hoskinson (4:31:17.080)
that we've been talking about.
Lex Fridman (4:31:18.500)
You don't.
Lex Fridman (4:31:19.340)
What you do is you start with applications
Lex Fridman (4:31:20.880)
that they're interested in.
Lex Fridman (4:31:21.820)
So he's an elk hunter.
Lex Fridman (4:31:22.920)
And so he's probably interested in elk tags, right?
Lex Fridman (4:31:25.840)
So you start there and you say,
Lex Fridman (4:31:27.080)
that whole system can be put on a blockchain
Lex Fridman (4:31:29.200)
and here's how it's gonna be better for you.
Lex Fridman (4:31:31.720)
You say, that's what you do.
Charles Hoskinson (4:31:32.800)
You always connect it to something they know and love.
Lex Fridman (4:31:35.120)
And then once they get that, they say,
Charles Hoskinson (4:31:36.640)
oh, that's really cool.
Lex Fridman (4:31:37.840)
And then they ask, what else can you do with it?
Lex Fridman (4:31:39.720)
What else can you sell me on it?
Lex Fridman (4:31:41.200)
And you kind of work your way outwards there.
Charles Hoskinson (4:31:43.120)
Problem technologists make is they're so damn in love
Lex Fridman (4:31:45.480)
with the technology.
Charles Hoskinson (4:31:46.440)
They have that tail wagging the dog
Lex Fridman (4:31:48.160)
where they just wanna talk about the technology
Lex Fridman (4:31:50.440)
and how incredibly cool it is.
Lex Fridman (4:31:52.000)
And that's fun.
Charles Hoskinson (4:31:52.820)
It's like talking about math.
Lex Fridman (4:31:53.720)
Oh God, let's talk about cool boardisms.
Charles Hoskinson (4:31:55.820)
That's fun.
Lex Fridman (4:31:56.660)
All right, yeah.
Charles Hoskinson (4:31:58.120)
Everybody's eyes glows over.
Lex Fridman (4:31:59.520)
No, you always have to connect it
Charles Hoskinson (4:32:01.400)
to the interest of the particular person
Lex Fridman (4:32:03.500)
and what they care about, what they love, what they need.
Charles Hoskinson (4:32:05.680)
Royalty payments.
Lex Fridman (4:32:07.120)
He's a big guy.
Charles Hoskinson (4:32:08.080)
He's got the Spotify thing.
Lex Fridman (4:32:09.440)
He's got all these things going on.
Charles Hoskinson (4:32:11.000)
Intellectual property is probably pretty important, Joe,
Lex Fridman (4:32:13.160)
at some juncture.
Lex Fridman (4:32:14.400)
So NFTs.
Lex Fridman (4:32:15.520)
We could talk about this concept of perpetual royalties.
Lex Fridman (4:32:18.560)
So for example, let's say that you create a piece of art.
Lex Fridman (4:32:21.480)
You can build into the token itself
Charles Hoskinson (4:32:24.280)
a perpetual royalty to something you care about.
Lex Fridman (4:32:26.720)
Maybe every time it sells, it pays it back to you.
Charles Hoskinson (4:32:29.680)
Or maybe every time it sells,
Lex Fridman (4:32:31.460)
it donate to some clean water charity
Charles Hoskinson (4:32:33.360)
or something like that.
Lex Fridman (4:32:34.640)
The point is that the actual acquisition
Charles Hoskinson (4:32:36.960)
of the NFT requires adherence to that smart contract.
Lex Fridman (4:32:40.200)
So people can't deviate from your desire even after you die.
Lex Fridman (4:32:43.840)
So stuff from Andy Warhol or from Picasso,
Lex Fridman (4:32:46.920)
that can still be generating some donation
Charles Hoskinson (4:32:49.480)
every time a Picasso sells to something else.
Lex Fridman (4:32:52.120)
You can do that with NFTs.
Lex Fridman (4:32:54.160)
And so he starts thinking, God, what else can I do?
Lex Fridman (4:32:56.020)
I do shows.
Charles Hoskinson (4:32:56.960)
Maybe I can do my tickets with these types of things.
Lex Fridman (4:32:59.080)
Maybe I can do loyalty points for my fans.
Lex Fridman (4:33:01.320)
So now you got him engaged,
Lex Fridman (4:33:02.680)
and he's thinking of all the opportunities for him,
Lex Fridman (4:33:04.840)
and it gives him an incentive to anchor
Lex Fridman (4:33:07.200)
and connect to those concepts.
Lex Fridman (4:33:08.880)
And then over time, he starts asking the question,
Lex Fridman (4:33:11.200)
well, how do we know it's secure?
Charles Hoskinson (4:33:12.960)
Then we can talk about proof of work or proof of stake
Lex Fridman (4:33:15.400)
or these types of things.
Charles Hoskinson (4:33:16.320)
Well, so this is how it stays secure
Lex Fridman (4:33:18.200)
if you're really interested.
Lex Fridman (4:33:19.480)
And there's an incentive to have the attention span
Lex Fridman (4:33:22.860)
necessary to do the homework,
Charles Hoskinson (4:33:24.280)
eat the broccoli and get over that hill.
Lex Fridman (4:33:25.920)
But it's also an opportunity, at least it was for me,
Charles Hoskinson (4:33:27.880)
especially with Bitcoin a while ago,
Lex Fridman (4:33:30.400)
is to take another look at the monetary system.
Charles Hoskinson (4:33:34.000)
Even look at the, I've been looking quite a bit
Lex Fridman (4:33:36.440)
at the history of the 20th century
Lex Fridman (4:33:38.120)
and sort of look at that history
Lex Fridman (4:33:39.960)
through the perspective of the monetary system,
Charles Hoskinson (4:33:42.280)
the gold standard and all those kinds of things.
Lex Fridman (4:33:44.080)
And you just add that little layer of consideration
Charles Hoskinson (4:33:47.400)
of how much money,
Lex Fridman (4:33:49.280)
of how money can be used by people in power
Charles Hoskinson (4:33:53.680)
to control the populace.
Lex Fridman (4:33:55.400)
And it's fascinating to look at the history
Charles Hoskinson (4:33:59.980)
from that perspective,
Lex Fridman (4:34:00.960)
and then that allows you to look at the future
Charles Hoskinson (4:34:03.360)
of how we can change that in order to empower people.
Lex Fridman (4:34:06.700)
And then of course, the governance thing
Charles Hoskinson (4:34:09.800)
that you're working on is fascinating
Lex Fridman (4:34:11.240)
because I mean, I don't know,
Lex Fridman (4:34:13.620)
but it seems like deeply broken aspect of our government
Lex Fridman (4:34:16.880)
is just the voting system.
Lex Fridman (4:34:18.840)
And discussing how that could be revolutionized
Lex Fridman (4:34:21.760)
is fascinating.
Charles Hoskinson (4:34:22.820)
Because a lot of conversations end up being on the internet
Lex Fridman (4:34:27.720)
about like number go up, which is like financial side.
Lex Fridman (4:34:30.960)
And to me personally at least, I think that's the same
Lex Fridman (4:34:34.480)
for Joe is that's just boring.
Charles Hoskinson (4:34:36.760)
Like it's the investing, the financial side of it,
Lex Fridman (4:34:40.140)
I know it has a lot of impact, but it's kind of boring.
Charles Hoskinson (4:34:43.360)
Cause longterm is not gonna have any impact.
Lex Fridman (4:34:45.080)
If the idea is a strong longterm, it's going to win.
Charles Hoskinson (4:34:48.040)
The idea is a weak, longterm is gonna lose.
Lex Fridman (4:34:50.400)
The ups and downs of the short term don't matter.
Charles Hoskinson (4:34:52.800)
That's just like casino games that you play.
Lex Fridman (4:34:58.160)
Speaking of games, video games,
Charles Hoskinson (4:35:00.220)
gotta ask you about those.
Lex Fridman (4:35:01.320)
Okay.
Charles Hoskinson (4:35:02.160)
You mentioned Diablo, maybe you're a fan of Diablo.
Lex Fridman (4:35:04.240)
Well, yeah, and Diablo 2 was great.
Lex Fridman (4:35:06.200)
Do you like Skyrim?
Lex Fridman (4:35:07.260)
Skyrim was great too.
Charles Hoskinson (4:35:08.580)
Like the Elder Scrolls.
Lex Fridman (4:35:09.420)
I actually bought the game that the Elder Scrolls
Lex Fridman (4:35:11.260)
was based on, do you know that?
Lex Fridman (4:35:13.000)
So way back in the day, the Elder Scrolls series
Charles Hoskinson (4:35:16.320)
was inspired by a game called Legends of Valor
Lex Fridman (4:35:18.600)
that I played when I was a little kid.
Lex Fridman (4:35:20.120)
And it doesn't actually have an ending.
Lex Fridman (4:35:22.000)
They ran out of money before they finished it.
Lex Fridman (4:35:23.640)
So they just kind of like put this little thing on
Lex Fridman (4:35:25.680)
and said, okay, but you never finish it.
Lex Fridman (4:35:27.460)
So I actually bought all the intellectual property
Lex Fridman (4:35:29.680)
of the game.
Charles Hoskinson (4:35:30.520)
I saw that.
Lex Fridman (4:35:31.340)
I didn't know there was a connection
Charles Hoskinson (4:35:32.180)
between Legends of Valor and Arena.
Lex Fridman (4:35:33.000)
Yeah, well, I forget the name.
Lex Fridman (4:35:34.720)
The guy, was it Todd something at Bethesda?
Lex Fridman (4:35:37.640)
He played it and he was inspired by it
Lex Fridman (4:35:40.280)
and then he created Arena right after playing it.
Lex Fridman (4:35:42.520)
That was such a good game.
Charles Hoskinson (4:35:43.800)
Arena, Daggerfall.
Lex Fridman (4:35:45.260)
Yeah.
Charles Hoskinson (4:35:46.100)
Yeah.
Lex Fridman (4:35:47.080)
I had a copy of Daggerfall when I was a kid,
Lex Fridman (4:35:48.960)
but it had a bug and so when you left the dungeon,
Lex Fridman (4:35:51.000)
it would crash.
Lex Fridman (4:35:51.960)
And this was before, like you can get an easy patch for it.
Lex Fridman (4:35:54.880)
So I never actually played Daggerfall.
Charles Hoskinson (4:35:56.920)
I entered in through Morrowind.
Lex Fridman (4:36:00.120)
Yeah, no, the Daggerfall was the fascinating thing.
Charles Hoskinson (4:36:02.920)
We were just jumping all over,
Lex Fridman (4:36:04.040)
but we'll return to Legends of Valor
Charles Hoskinson (4:36:05.520)
because I want to ask you about that.
Lex Fridman (4:36:06.480)
But Daggerfall was fascinating
Charles Hoskinson (4:36:07.760)
because I think of all the other scroll games,
Lex Fridman (4:36:11.140)
it was like the largest
Charles Hoskinson (4:36:12.320)
because it was like randomly generated.
Lex Fridman (4:36:15.600)
It would like randomly generate the worlds,
Charles Hoskinson (4:36:17.240)
the dungeons and so on,
Lex Fridman (4:36:18.760)
which is fascinating to think about like,
Lex Fridman (4:36:20.560)
how big can you make the world both in actuality and feel?
Lex Fridman (4:36:25.560)
Like it's incredible to have a video game,
Charles Hoskinson (4:36:29.400)
I don't know how many video games do this well,
Lex Fridman (4:36:32.200)
where the feeling is you can be lost here forever.
Charles Hoskinson (4:36:35.920)
You can live here because most video games
Lex Fridman (4:36:39.520)
have like a bottom.
Charles Hoskinson (4:36:40.840)
It feels like you can run out of stuff.
Lex Fridman (4:36:42.600)
When Daggerfall was like, I can just keep doing this.
Charles Hoskinson (4:36:45.800)
At least that's what I felt at the time.
Lex Fridman (4:36:47.200)
But yeah, what the heck Legends of Valor?
Lex Fridman (4:36:50.240)
What's the idea there?
Lex Fridman (4:36:51.800)
Well, I mean, there's really nothing about it
Charles Hoskinson (4:36:54.700)
that's super compelling today.
Lex Fridman (4:36:56.280)
I mean, there's a nostalgia of youth that's there,
Lex Fridman (4:36:59.400)
but I mean, it doesn't even have a class system,
Lex Fridman (4:37:00.920)
a level system, the combat system is terrible.
Charles Hoskinson (4:37:03.520)
There's no journal,
Lex Fridman (4:37:04.360)
the magic system is terrible and so forth.
Lex Fridman (4:37:06.260)
And so I just wanted to start somewhere
Lex Fridman (4:37:08.160)
and I felt like that would be
Charles Hoskinson (4:37:09.220)
an incredibly fun overhaul project.
Lex Fridman (4:37:11.120)
I kind of got the idea from Beamdog Studios
Charles Hoskinson (4:37:13.160)
when they did another one of my favorite games,
Lex Fridman (4:37:15.180)
remember Baldur's Gate?
Charles Hoskinson (4:37:16.960)
Yeah, they did the enhanced.
Lex Fridman (4:37:17.800)
I love that Baldur's Gate too.
Charles Hoskinson (4:37:18.760)
Oh yeah, the enhanced edition was great.
Lex Fridman (4:37:21.000)
They should have never just done thrown a ball,
Charles Hoskinson (4:37:22.880)
they should have done an actual proper sequel
Lex Fridman (4:37:24.920)
and gone down that whole road.
Lex Fridman (4:37:27.520)
But anyway, I got the idea there.
Lex Fridman (4:37:29.920)
I said, well, take some old piece of IP
Lex Fridman (4:37:32.480)
and then you can kind of retrofit it and clean it up.
Lex Fridman (4:37:34.940)
And what's nice about Legends of Valor
Charles Hoskinson (4:37:36.440)
is it's a blank slate.
Lex Fridman (4:37:37.440)
You can do your own Elder Scrolls,
Charles Hoskinson (4:37:39.280)
you can create your own class system
Lex Fridman (4:37:40.600)
and level system and so forth.
Charles Hoskinson (4:37:42.580)
You could write some beautiful,
Lex Fridman (4:37:43.880)
exciting, fun narratives for that.
Lex Fridman (4:37:46.280)
And also it gives me a chance to explore a lot of things
Lex Fridman (4:37:49.040)
I think should be dragged into game development,
Charles Hoskinson (4:37:50.920)
like algorithmically generated music
Lex Fridman (4:37:52.600)
is one example.
Charles Hoskinson (4:37:53.720)
The problem with games, as you mentioned,
Lex Fridman (4:37:55.920)
you play lots and lots of hours,
Lex Fridman (4:37:57.940)
but your sound content is much smaller.
Lex Fridman (4:38:00.040)
So you have tons of repetition in the soundtrack.
Lex Fridman (4:38:02.600)
So what if you could connect the music
Lex Fridman (4:38:05.040)
to the state of the game world
Lex Fridman (4:38:06.700)
and it automatically through some process
Lex Fridman (4:38:08.680)
will generate music.
Lex Fridman (4:38:09.520)
And there's actually people who study this.
Lex Fridman (4:38:11.760)
And so that's one dimension.
Charles Hoskinson (4:38:12.920)
The other thing is you have things like GPT3 and so forth.
Lex Fridman (4:38:15.120)
There was a great game, Event Zero,
Lex Fridman (4:38:18.280)
and it came out like 2016 where you could actually
Lex Fridman (4:38:21.400)
have a dialogue with an AI and you're like a marooned
Charles Hoskinson (4:38:25.160)
astronaut on a space station that's abandoned.
Lex Fridman (4:38:28.000)
And you have to somehow work with this AI
Charles Hoskinson (4:38:30.580)
through communicating with it to convince you
Lex Fridman (4:38:32.760)
to take you home.
Lex Fridman (4:38:34.720)
But the AI is a bit duplicitous.
Lex Fridman (4:38:37.000)
And I don't wanna spoil the plot of the game
Charles Hoskinson (4:38:38.800)
because it's such a cool game,
Lex Fridman (4:38:39.980)
but it's actually like a paint by numbers.
Charles Hoskinson (4:38:41.800)
It's almost like Zork where you don't have
Lex Fridman (4:38:45.100)
preselected dialogue.
Charles Hoskinson (4:38:46.520)
You actually type in the terminal
Lex Fridman (4:38:48.280)
and the AI will reply to you back and forth.
Lex Fridman (4:38:50.360)
And this was 2016 and it's like things have gotten
Lex Fridman (4:38:52.560)
an order of magnitude better.
Lex Fridman (4:38:54.160)
So the evolution of that tech,
Lex Fridman (4:38:55.720)
I think within the next five years,
Charles Hoskinson (4:38:57.320)
brought into video games could give you
Lex Fridman (4:38:59.040)
incredibly cool dialogue inside the game.
Lex Fridman (4:39:02.920)
So algorithmically generated music,
Lex Fridman (4:39:04.560)
better dialogue, better gameplay mechanics.
Charles Hoskinson (4:39:06.560)
Also, I'd love to explore alternative physics systems,
Lex Fridman (4:39:10.720)
alternative geometries like hyperbolic geometry
Charles Hoskinson (4:39:14.520)
or these types of things.
Lex Fridman (4:39:15.600)
And there's actually Hyperbolica is a game that does that.
Lex Fridman (4:39:19.060)
And you can do down the Euclidean geometry as well
Lex Fridman (4:39:21.480)
and bring those elements into a game design.
Lex Fridman (4:39:23.640)
And that's what we'll do with Legends of Valor.
Lex Fridman (4:39:25.200)
So it'll be kind of like Skyrim,
Lex Fridman (4:39:26.640)
but with a lot of really cool new shit.
Lex Fridman (4:39:28.600)
It's kind of like, I saw Aerosmith years ago
Lex Fridman (4:39:30.960)
and he was out there, he's like,
Lex Fridman (4:39:31.800)
do you like the old shit?
Lex Fridman (4:39:32.800)
Do you like new shit?
Lex Fridman (4:39:34.280)
Kind of middle shit, you know?
Charles Hoskinson (4:39:36.280)
So.
Lex Fridman (4:39:37.120)
So you're going for the middle.
Charles Hoskinson (4:39:38.080)
Yeah, I'm gonna try to do some of the old
Lex Fridman (4:39:39.900)
and some of the new and bring it in.
Lex Fridman (4:39:41.720)
So that'll be a lot of fun.
Lex Fridman (4:39:43.520)
And what's nice about it is that there is a lot of
Charles Hoskinson (4:39:49.080)
new play in the market
Lex Fridman (4:39:51.840)
because of the Microsoft acquisition of Bethesda.
Charles Hoskinson (4:39:54.480)
They've been losing employees like crazy
Lex Fridman (4:39:56.520)
and there's a lot of belief that Elder Scrolls 6
Charles Hoskinson (4:39:58.440)
will not live up to expectations
Lex Fridman (4:40:00.280)
because Microsoft will kill it.
Charles Hoskinson (4:40:01.360)
I will tweet.
Lex Fridman (4:40:02.560)
Okay, listen to me.
Charles Hoskinson (4:40:03.800)
I will go into, I'm all about love on the internet,
Lex Fridman (4:40:07.960)
but I will go hard at you Microsoft
Charles Hoskinson (4:40:09.840)
if you screw up Elder Scrolls.
Lex Fridman (4:40:11.440)
Well, we might have to do a spiritual successor, right?
Charles Hoskinson (4:40:14.160)
It might have to happen with Legends of Valor.
Lex Fridman (4:40:16.160)
You never know.
Lex Fridman (4:40:17.480)
But it's a passion project,
Lex Fridman (4:40:18.600)
so I have no time for it at all.
Charles Hoskinson (4:40:20.360)
It's like solo on my list of things to do.
Lex Fridman (4:40:22.120)
So I'll probably do it in 2022, 2023
Lex Fridman (4:40:24.680)
and we'll build a nice crew and we'll do it in Wyoming,
Lex Fridman (4:40:27.480)
probably in Wheatland or some really small town
Lex Fridman (4:40:29.560)
and we'll import everybody
Lex Fridman (4:40:31.320)
and then we'll have to build the whole city up
Charles Hoskinson (4:40:32.980)
like Elon is doing here in Texas.
Lex Fridman (4:40:34.840)
It'll be a fun project.
Charles Hoskinson (4:40:36.760)
Well, I like programmatically generated music.
Lex Fridman (4:40:38.600)
You mentioned Baldur's Gate.
Charles Hoskinson (4:40:40.440)
By the way, Haskell frameworks for that.
Lex Fridman (4:40:41.920)
Euterpe is one.
Lex Fridman (4:40:43.000)
For generating music?
Lex Fridman (4:40:44.000)
Yeah, for doing it.
Charles Hoskinson (4:40:45.440)
I wonder how successful that could be
Lex Fridman (4:40:46.680)
because I remember Baldur's Gate was the first game
Charles Hoskinson (4:40:49.120)
where I realized music is so important to the game.
Lex Fridman (4:40:52.200)
It was the thing I remembered about the game.
Charles Hoskinson (4:40:54.160)
It was the reason that,
Lex Fridman (4:40:55.480)
it was the thing I thought about
Charles Hoskinson (4:40:57.500)
when I was away from the game
Lex Fridman (4:40:59.480)
is like the feeling it created, that music.
Charles Hoskinson (4:41:02.760)
I don't even remember the music anymore,
Lex Fridman (4:41:04.600)
but I remember the music.
Charles Hoskinson (4:41:05.440)
Bum, bum, dum, dum.
Lex Fridman (4:41:08.160)
Jeremy Soule, I think was the composer.
Charles Hoskinson (4:41:10.760)
It was great.
Lex Fridman (4:41:12.000)
And actually getting like Raman Juwadi
Charles Hoskinson (4:41:13.960)
or Bear McCready in to do that, that would be so cool.
Lex Fridman (4:41:17.000)
Okay, this is awesome.
Charles Hoskinson (4:41:19.600)
Ridiculous question.
Lex Fridman (4:41:20.500)
What's the, maybe let's say top three
Lex Fridman (4:41:23.200)
graded video games of all time?
Lex Fridman (4:41:26.680)
Yeah, Baldur's Gate is definitely in the top three.
Charles Hoskinson (4:41:28.360)
Arcanum is my favorite game.
Lex Fridman (4:41:30.280)
And Arcanum was, Troika Games was just this amazing studio
Charles Hoskinson (4:41:34.440)
where they took the time to build probably
Lex Fridman (4:41:38.360)
the most compelling game worlds.
Charles Hoskinson (4:41:40.480)
In the case of Arcanum, it takes place
Lex Fridman (4:41:42.160)
in kind of like a 19th century Victorian England play.
Lex Fridman (4:41:44.960)
So steampunk, but then there's also magic
Lex Fridman (4:41:47.520)
inside this game world.
Lex Fridman (4:41:48.600)
And there's this crazy juxtaposition
Lex Fridman (4:41:50.680)
between magic and technology.
Lex Fridman (4:41:52.020)
And the more technology you have, magic stops working.
Lex Fridman (4:41:54.700)
The more magic you have, it disrupts technology.
Lex Fridman (4:41:57.160)
So all the people on the magic side
Lex Fridman (4:41:58.600)
hate the technology people and vice versa.
Lex Fridman (4:42:00.840)
And so you're just this character in this game world
Lex Fridman (4:42:03.320)
and you're just trying to figure out like where do you fit?
Lex Fridman (4:42:06.080)
And it has this incredible plot
Lex Fridman (4:42:08.720)
where you're kind of just a stowaway on a zeppelin
Charles Hoskinson (4:42:11.640)
that gets shot down and you get dragged
Lex Fridman (4:42:13.980)
into this conspiracy and you have to kind of figure out
Charles Hoskinson (4:42:16.860)
the conspiracy as you go through the whole game world.
Lex Fridman (4:42:18.880)
And you meet all these different races
Charles Hoskinson (4:42:20.160)
like the elves and the dwarves and so forth.
Lex Fridman (4:42:21.920)
And they've all been impacted by the proliferation
Charles Hoskinson (4:42:24.240)
of technology in different ways.
Lex Fridman (4:42:25.620)
Like the humans use steam engines
Charles Hoskinson (4:42:27.920)
to clear cut all the forest and it caused a lot of problems.
Lex Fridman (4:42:30.720)
The dwarves leaked that technology to the humans
Lex Fridman (4:42:33.440)
and so they kind of got exiled for it and so forth.
Lex Fridman (4:42:36.080)
And you have to decide like where do you fit in all of this?
Lex Fridman (4:42:38.100)
And you have a lot of choices as a player.
Lex Fridman (4:42:39.960)
You can be on the magic side, the technology side,
Charles Hoskinson (4:42:42.040)
kind of be neutral.
Lex Fridman (4:42:43.640)
And there's like 40 different endings for the game.
Charles Hoskinson (4:42:46.120)
It's just incredible.
Lex Fridman (4:42:47.360)
And this is all like 2000.
Lex Fridman (4:42:48.800)
And then you talk about a procedurally generated world.
Lex Fridman (4:42:51.160)
You have a quick travel, but if you want,
Charles Hoskinson (4:42:53.040)
you can just walk and the world randomly generates.
Lex Fridman (4:42:55.000)
But it's not like Daggerfall
Charles Hoskinson (4:42:56.080)
where there was interesting things along the way.
Lex Fridman (4:42:58.000)
So it was really ahead of its time
Lex Fridman (4:42:59.780)
and it was kind of the last of a generation of games.
Lex Fridman (4:43:03.320)
It was based on the same framework
Charles Hoskinson (4:43:05.360)
that Interplay used for Fallout,
Lex Fridman (4:43:07.280)
the original Fallout and Fallout 2.
Lex Fridman (4:43:09.400)
So that was really a cool setup.
Lex Fridman (4:43:11.240)
How were the graphics that were not essential to the game?
Charles Hoskinson (4:43:13.000)
Oh, it's isometric, top down.
Lex Fridman (4:43:15.640)
So kind of like the Fallout look.
Lex Fridman (4:43:17.920)
And so it doesn't hold up super well today,
Lex Fridman (4:43:21.520)
but that was never the point.
Charles Hoskinson (4:43:22.880)
It was more of a story driven game.
Lex Fridman (4:43:24.920)
But it was one of the very few games
Charles Hoskinson (4:43:26.740)
where at the very end of the game,
Lex Fridman (4:43:27.800)
you can actually talk the villain into killing himself
Charles Hoskinson (4:43:31.000)
instead of fighting you.
Lex Fridman (4:43:33.480)
If you, and you had to really work at it,
Charles Hoskinson (4:43:35.520)
you had to become a master of persuasion
Lex Fridman (4:43:37.340)
and get your charisma score maxed out
Lex Fridman (4:43:39.300)
and learn all this stuff along the way.
Lex Fridman (4:43:40.840)
And you have this philosophical debate
Charles Hoskinson (4:43:42.480)
over the nature of life and death with him.
Lex Fridman (4:43:44.080)
That's amazing.
Charles Hoskinson (4:43:44.920)
Yeah, and then you're just like,
Lex Fridman (4:43:45.880)
by the way, you're wrong and here's why.
Lex Fridman (4:43:47.480)
And he's like, oh yeah, you got a point.
Lex Fridman (4:43:48.720)
I'm just gonna kill myself.
Charles Hoskinson (4:43:50.040)
I was like, wow, this is great.
Lex Fridman (4:43:52.940)
Planescape Torment is the other one,
Charles Hoskinson (4:43:54.880)
I think is probably the greatest.
Lex Fridman (4:43:56.080)
Was it called Planescape?
Charles Hoskinson (4:43:57.240)
Yeah, it's another one on the Infinity Engine,
Lex Fridman (4:43:59.480)
which was what was used for Baldur's Gate.
Lex Fridman (4:44:01.360)
So it looks like Baldur's Gate.
Lex Fridman (4:44:02.680)
And God, that was such an incredibly well written game.
Charles Hoskinson (4:44:06.020)
You play this character called the Nameless One,
Lex Fridman (4:44:07.760)
this little blue guy, and you wake up in a morgue.
Lex Fridman (4:44:10.120)
And it turns out that you're a mortal.
Lex Fridman (4:44:11.940)
And every time you die, you lose all your memories.
Lex Fridman (4:44:14.260)
And so you've just been apparently living this life
Lex Fridman (4:44:17.440)
for a very long time.
Lex Fridman (4:44:18.680)
And you meet all these people
Lex Fridman (4:44:20.040)
in this crazy city called Sigil who know you,
Lex Fridman (4:44:22.380)
but you don't know yourself.
Lex Fridman (4:44:23.720)
And you're trying to figure out your name, your identity,
Lex Fridman (4:44:25.760)
and why do you have this curse where you live forever,
Lex Fridman (4:44:28.800)
but you keep forgetting every time you get killed.
Lex Fridman (4:44:31.200)
And it turns out you weren't such a nice person
Lex Fridman (4:44:33.680)
throughout this entire game world.
Lex Fridman (4:44:35.160)
But then again, there's this question of,
Lex Fridman (4:44:36.640)
well, if you can start over and you lose all your memories,
Lex Fridman (4:44:40.400)
do you have a chance for redemption or not?
Lex Fridman (4:44:42.760)
So it's an incredible game, Planescape Torment.
Lex Fridman (4:44:45.160)
And it's actually another one of those games
Lex Fridman (4:44:46.600)
where you can never actually have a fight.
Charles Hoskinson (4:44:49.000)
You can just kind of talk your way out of everything.
Lex Fridman (4:44:50.880)
And there's probably like a thousand pages of dialogue
Charles Hoskinson (4:44:53.680)
inside the game.
Lex Fridman (4:44:54.520)
You guys had a lot of fun and a lot of drugs
Charles Hoskinson (4:44:56.440)
making that game.
Lex Fridman (4:44:57.840)
Do you think these three games are the kinds
Charles Hoskinson (4:45:00.480)
that would still be okay to play today
Lex Fridman (4:45:02.400)
or are they forever lost in time
Charles Hoskinson (4:45:03.920)
because we sort of got desensitized
Lex Fridman (4:45:08.360)
to the richness of computer graphics
Lex Fridman (4:45:10.560)
and all those kinds of things in modern games?
Lex Fridman (4:45:12.400)
I think you can enhance these games
Charles Hoskinson (4:45:14.000)
because your storytelling medium is so much more engaging.
Lex Fridman (4:45:17.600)
I was at the movie theater before COVID
Lex Fridman (4:45:19.440)
and the person to the left of me
Lex Fridman (4:45:21.160)
was looking at their cell phone during the movie.
Lex Fridman (4:45:23.040)
And the person to the right of me
Lex Fridman (4:45:24.000)
was looking at their cell phone.
Charles Hoskinson (4:45:25.080)
They're just not engaged anymore.
Lex Fridman (4:45:26.320)
Everybody is attention starved.
Lex Fridman (4:45:28.560)
And the video game is one of the last mediums
Lex Fridman (4:45:30.600)
where you have undivided attention of people.
Charles Hoskinson (4:45:33.160)
They're really into it.
Lex Fridman (4:45:34.640)
They're all into that thing.
Lex Fridman (4:45:35.960)
And so I think the fact that you have VR and AR
Lex Fridman (4:45:39.080)
and enhanced graphics and all these new gameplay mechanics,
Charles Hoskinson (4:45:42.480)
it's a value add instead of a value negative
Lex Fridman (4:45:44.920)
because ultimately what are you doing?
Charles Hoskinson (4:45:46.080)
You're telling stories
Lex Fridman (4:45:47.720)
and you're trying to connect people to something.
Charles Hoskinson (4:45:49.760)
Maybe it's the nature of life and death
Lex Fridman (4:45:52.040)
or are we truly real?
Charles Hoskinson (4:45:53.480)
Or are we in a simulation or not or something like,
Lex Fridman (4:45:55.640)
it'd be great to do 13th floor as a game
Charles Hoskinson (4:45:57.520)
or something like that.
Lex Fridman (4:45:59.320)
And the question is, well, how good of a story can you tell?
Charles Hoskinson (4:46:02.120)
Well, you're constrained
Lex Fridman (4:46:02.960)
by your storytelling tools and technology.
Charles Hoskinson (4:46:05.200)
The fact that games are so much more advanced now
Lex Fridman (4:46:07.680)
means that you now have many more dimensions
Charles Hoskinson (4:46:10.160)
of storytelling available to you.
Lex Fridman (4:46:12.120)
And actually with AI now coming in
Lex Fridman (4:46:14.160)
and really good AI coming in the next five or 10 years,
Lex Fridman (4:46:17.480)
your storytelling is not static anymore.
Charles Hoskinson (4:46:20.040)
The person can actually majorly participate
Lex Fridman (4:46:22.880)
and change the outcome in ways
Charles Hoskinson (4:46:24.360)
that were previously unpredictable.
Lex Fridman (4:46:26.280)
The other thing is they're still educational.
Charles Hoskinson (4:46:27.720)
You can teach people concepts that they never knew before.
Lex Fridman (4:46:30.560)
And it's like, if you wanna teach people
Charles Hoskinson (4:46:32.200)
about bizarre geometries or like Minecraft
Lex Fridman (4:46:35.280)
is a great example.
Charles Hoskinson (4:46:36.760)
A lot of people learned how computers work from Redstone.
Lex Fridman (4:46:40.160)
Think about that.
Charles Hoskinson (4:46:41.800)
It's true.
Lex Fridman (4:46:42.640)
Yeah. Yeah.
Charles Hoskinson (4:46:43.960)
Yeah, I mean, yeah, as we said,
Lex Fridman (4:46:45.880)
we're more and more going to be living
Charles Hoskinson (4:46:47.480)
in a video game worlds might as well
Lex Fridman (4:46:50.280)
sort of as opposed to just make it fun,
Charles Hoskinson (4:46:52.960)
also expand our knowledge,
Lex Fridman (4:46:55.560)
expand our ability to think,
Charles Hoskinson (4:46:57.880)
like explore different ideas
Lex Fridman (4:47:00.440)
and do education broadly defined
Charles Hoskinson (4:47:02.360)
within those video game worlds.
Lex Fridman (4:47:03.760)
So we do the entirety,
Charles Hoskinson (4:47:05.120)
the entirety of life in the video game worlds.
Lex Fridman (4:47:08.240)
Hopefully it doesn't look like Minecraft, but we'll see.
Lex Fridman (4:47:11.280)
Do you have advice for young people today
Lex Fridman (4:47:13.680)
aside from playing lots of video games?
Charles Hoskinson (4:47:16.440)
You know, high schoolers, college students,
Lex Fridman (4:47:19.080)
thinking about their career, thinking about life.
Charles Hoskinson (4:47:23.320)
Well, we no longer live in a world
Lex Fridman (4:47:24.720)
where you get one skill set,
Charles Hoskinson (4:47:25.840)
you do it for 40 years and retire.
Lex Fridman (4:47:28.280)
I mean, that ship has sailed a long time ago.
Lex Fridman (4:47:30.400)
So learn how to learn and learn an appreciation
Lex Fridman (4:47:33.360)
and love for learning.
Lex Fridman (4:47:34.640)
So that's the first thing, you know,
Lex Fridman (4:47:36.120)
Josh Waitzkins wrote this beautiful book,
Charles Hoskinson (4:47:37.840)
The Art of Learning, if you ever read it.
Lex Fridman (4:47:39.920)
Stuff like that.
Lex Fridman (4:47:41.480)
So good study skills, you know,
Lex Fridman (4:47:43.200)
slip box notes, these things.
Lex Fridman (4:47:44.760)
What was it, Zettelkasten or whatever it is.
Lex Fridman (4:47:48.080)
Yeah, there's a lot of little techniques
Charles Hoskinson (4:47:49.480)
that you can pick up along the way.
Lex Fridman (4:47:50.920)
And basically they teach you how to process
Charles Hoskinson (4:47:52.640)
lots of information very quickly,
Lex Fridman (4:47:54.560)
retain it and then decide what's useful to you
Charles Hoskinson (4:47:57.160)
for that moment.
Lex Fridman (4:47:58.360)
The second thing is do not undervalue EQ,
Charles Hoskinson (4:48:00.600)
emotional intelligence.
Lex Fridman (4:48:01.800)
We've lived for a long time in a society
Charles Hoskinson (4:48:03.880)
where IQ was dominant.
Lex Fridman (4:48:06.040)
It's like how smart you are excuses everything else.
Charles Hoskinson (4:48:08.920)
You can be a horrible human being,
Lex Fridman (4:48:10.640)
but he's a really bright guy, right?
Charles Hoskinson (4:48:12.640)
The asshole mathematician or physicist.
Lex Fridman (4:48:15.320)
We now live in a world where the balance
Charles Hoskinson (4:48:17.200)
is far more important.
Lex Fridman (4:48:18.600)
You have to be smart, but you also have to be a nice guy.
Lex Fridman (4:48:21.640)
And don't undervalue that.
Lex Fridman (4:48:23.000)
So learn things like closed circuit communication
Lex Fridman (4:48:25.080)
and active listening.
Lex Fridman (4:48:26.480)
These skillsets will always pay enormous dividends
Charles Hoskinson (4:48:30.000)
along the way.
Lex Fridman (4:48:31.440)
Third, remember that you're judged for the things
Charles Hoskinson (4:48:33.320)
that you have and what you do with those things.
Lex Fridman (4:48:35.280)
You know, if you have very little,
Charles Hoskinson (4:48:36.720)
you still have to do something.
Lex Fridman (4:48:37.840)
When you have a lot, you have to do even more.
Lex Fridman (4:48:39.680)
So learn how to give and do that early on.
Lex Fridman (4:48:43.240)
Learn how to give back, volunteerism, charity,
Charles Hoskinson (4:48:46.000)
mentoring, these types of things.
Lex Fridman (4:48:48.160)
Those are so incredibly valuable to a person who's developed.
Charles Hoskinson (4:48:51.320)
The people that you mentored in the academic world,
Lex Fridman (4:48:53.400)
you learn this, you have graduate students.
Charles Hoskinson (4:48:55.360)
They one day will be professors.
Lex Fridman (4:48:58.200)
And it might just so happen, they might eclipse you.
Charles Hoskinson (4:49:00.720)
Remember Gauss had a doctoral advisor.
Lex Fridman (4:49:04.200)
Never forget that, you know, and so did Feynman.
Charles Hoskinson (4:49:08.160)
Make sure that you mentor people, you give back
Lex Fridman (4:49:10.440)
and you learn how to learn and you learn how to teach.
Charles Hoskinson (4:49:12.680)
Super important for your development as a person.
Lex Fridman (4:49:15.160)
And you'll notice all those things are agnostic
Charles Hoskinson (4:49:17.000)
to whatever domain you happen to have chosen.
Lex Fridman (4:49:19.120)
You could be in medicine or law or technology, whatever.
Charles Hoskinson (4:49:21.800)
That's your fancy, whatever your passion happens to be.
Lex Fridman (4:49:24.680)
And don't conflate your earning in your career.
Charles Hoskinson (4:49:27.800)
If people try to keep putting these things together,
Lex Fridman (4:49:30.760)
they're increasingly becoming decoupled.
Charles Hoskinson (4:49:32.760)
There's a lot of cases where people do their passions
Lex Fridman (4:49:34.840)
and they do it for free or, you know, for sustenance,
Lex Fridman (4:49:37.800)
but then they have something else they do on the side
Lex Fridman (4:49:39.600)
to also augment or supplement their income.
Charles Hoskinson (4:49:41.840)
Probably best that way.
Lex Fridman (4:49:43.560)
When you conflate the two, you tend to get
Charles Hoskinson (4:49:45.440)
burned out terribly.
Lex Fridman (4:49:46.600)
You see this a lot with musicians or other people.
Charles Hoskinson (4:49:49.120)
They just, they want to make music,
Lex Fridman (4:49:50.480)
but they have to tour or whatever,
Charles Hoskinson (4:49:51.800)
because they gotta pay bills.
Lex Fridman (4:49:53.280)
Stuff like that happens.
Charles Hoskinson (4:49:54.920)
Other than that, I mean, I'm not a guru.
Lex Fridman (4:49:57.280)
I'm not in any particular position to...
Charles Hoskinson (4:49:59.200)
You showed up in a robe, which I thought was kind of weird.
Lex Fridman (4:50:01.760)
And you had a crown and you kept calling yourself king.
Charles Hoskinson (4:50:04.320)
King of the rats.
Lex Fridman (4:50:06.400)
And that was in a robe that was a yukata.
Charles Hoskinson (4:50:08.360)
Okay, thank you for clarifying.
Lex Fridman (4:50:10.280)
Audience, he's joking.
Charles Hoskinson (4:50:11.600)
I read it.
Lex Fridman (4:50:15.000)
I heard somebody who's gonna write blog posts.
Charles Hoskinson (4:50:17.480)
Charles Hoskinson walks around with a crown.
Lex Fridman (4:50:20.840)
Let me ask you a ridiculously big
Lex Fridman (4:50:23.400)
and the most important question.
Lex Fridman (4:50:24.800)
What's the meaning of this whole thing, of life?
Charles Hoskinson (4:50:28.080)
Well, I got a story for that.
Lex Fridman (4:50:31.560)
Does this have something to do with a farm?
Charles Hoskinson (4:50:33.800)
Well, no, no, no, it's from Japan.
Lex Fridman (4:50:35.360)
I used to live in Japan.
Charles Hoskinson (4:50:36.200)
I live in Osaka, right next to Namba, beautiful area.
Lex Fridman (4:50:39.640)
It's like, if you're gonna live anywhere in Japan,
Charles Hoskinson (4:50:41.280)
I live in Osaka.
Lex Fridman (4:50:42.120)
You live anywhere in Osaka,
Charles Hoskinson (4:50:43.240)
live next to the restaurant district.
Lex Fridman (4:50:44.880)
Four o clock in the morning, you can get good ramen.
Charles Hoskinson (4:50:47.240)
These are the things in life that make you who you are.
Lex Fridman (4:50:50.640)
So there was a shogun and he was kind of a bad ass.
Charles Hoskinson (4:50:54.360)
He was really good killing people,
Lex Fridman (4:50:55.960)
really good at running his empire.
Lex Fridman (4:50:57.360)
And then he got a bit disgruntled in his late 40s.
Lex Fridman (4:50:59.960)
And he said, you know, I'm just gonna give it all to my son
Lex Fridman (4:51:03.080)
and I'm gonna wander around Japan
Lex Fridman (4:51:04.880)
until I find the perfect cherry blossom.
Charles Hoskinson (4:51:07.200)
That's what I'm gonna do.
Lex Fridman (4:51:08.520)
Everybody thought he went crazy.
Charles Hoskinson (4:51:09.800)
He said, no, no, no, that's what I'm gonna do.
Lex Fridman (4:51:11.120)
And he took his whole entourage with him.
Lex Fridman (4:51:12.600)
And so his son is now the shogun.
Lex Fridman (4:51:14.720)
And then he's just wandering throughout Japan
Lex Fridman (4:51:16.680)
and having all these incredible crazy adventures
Lex Fridman (4:51:19.000)
as he's wandering throughout Japan,
Charles Hoskinson (4:51:20.480)
fighting bandits and loving beautiful women and so forth.
Lex Fridman (4:51:24.280)
And then 30 years later, he's passing these two geisha gals
Lex Fridman (4:51:28.880)
and one of them turns around
Lex Fridman (4:51:31.080)
and they notice him slumped over next to a cherry tree.
Lex Fridman (4:51:33.960)
And so she goes over to try to rouse him and he's dead.
Lex Fridman (4:51:37.760)
And in his hands is a wilted cherry blossom.
Lex Fridman (4:51:41.480)
So that's a very Japanese story, right?
Lex Fridman (4:51:43.880)
The point is that it's not the actual blossom
Charles Hoskinson (4:51:47.440)
finding the perfection that matters.
Lex Fridman (4:51:49.360)
It's the things you do on a day to day basis.
Charles Hoskinson (4:51:52.000)
The places you go, the people you meet,
Lex Fridman (4:51:53.560)
the experiences you have and the joy you take
Charles Hoskinson (4:51:55.720)
in the things that you do here in the moment now.
Lex Fridman (4:51:58.480)
You have to get there.
Charles Hoskinson (4:51:59.840)
You know, if you look at Jiro dreams of sushi,
Lex Fridman (4:52:02.040)
there's this guy 70 years of his life
Charles Hoskinson (4:52:03.880)
making the same damn piece of sushi
Lex Fridman (4:52:05.600)
again and again and again.
Charles Hoskinson (4:52:06.800)
He's the happiest guy around.
Lex Fridman (4:52:08.600)
Albert Camus and his story of Sisyphus.
Charles Hoskinson (4:52:11.160)
You know, Sisyphus should be miserable.
Lex Fridman (4:52:12.760)
It's the Greek curse.
Charles Hoskinson (4:52:13.680)
No, he's happy.
Lex Fridman (4:52:15.040)
He has total clarity of purpose.
Lex Fridman (4:52:17.120)
And every day he gets to basically roll that stone
Lex Fridman (4:52:19.800)
just a little bit better than the day before,
Charles Hoskinson (4:52:21.680)
a different way than the day before.
Lex Fridman (4:52:23.640)
And it's not the destination.
Charles Hoskinson (4:52:25.600)
It isn't getting the stone up
Lex Fridman (4:52:26.920)
to the top of the hill that matters.
Charles Hoskinson (4:52:28.680)
It's the fact that the act,
Lex Fridman (4:52:30.360)
you find that joy in that act, that ikigai,
Charles Hoskinson (4:52:32.480)
that way of life, that purpose of life.
Lex Fridman (4:52:35.160)
That I think is the closest thing
Charles Hoskinson (4:52:37.080)
a human can get to a meaning.
Lex Fridman (4:52:39.960)
You're a blip.
Charles Hoskinson (4:52:40.920)
You know, you didn't exist, you're dead.
Lex Fridman (4:52:44.840)
And if you compare it to the size of the universe
Charles Hoskinson (4:52:47.800)
in that time, it's just a little blip.
Lex Fridman (4:52:49.680)
So all you can do with what you have
Charles Hoskinson (4:52:51.840)
is just find meaning in the things
Lex Fridman (4:52:53.240)
that you do on a daily basis.
Lex Fridman (4:52:54.600)
And you can't predict the macro.
Lex Fridman (4:52:56.440)
We have all this wealth and power in America.
Lex Fridman (4:52:58.360)
What if a world war breaks out?
Lex Fridman (4:52:59.960)
We could be destitute like Walmart Germany.
Lex Fridman (4:53:02.720)
And so, you know, you could be a big guy.
Lex Fridman (4:53:04.720)
You could be now living on the street side.
Lex Fridman (4:53:07.120)
Would you be miserable?
Lex Fridman (4:53:08.520)
The point of life is getting to a point
Charles Hoskinson (4:53:10.240)
that no matter what comes your way,
Lex Fridman (4:53:11.720)
what misfortune comes your way,
Charles Hoskinson (4:53:13.720)
you're in a position where you can find
Lex Fridman (4:53:15.480)
a modicum of happiness and love and empathy
Charles Hoskinson (4:53:18.920)
for others in that moment.
Lex Fridman (4:53:21.480)
And then the highest pursuit of life
Charles Hoskinson (4:53:23.160)
is the ability to share that mindset with other people
Lex Fridman (4:53:25.920)
and give it to them somehow.
Lex Fridman (4:53:27.760)
And that's really hard, you know,
Lex Fridman (4:53:29.560)
because everybody comes in, they're always Eeyore,
Charles Hoskinson (4:53:31.560)
oh, doom and gloom and cynical,
Lex Fridman (4:53:33.040)
and but this and that and reputation this and that.
Charles Hoskinson (4:53:35.560)
You have to somehow transcend all of it and say,
Lex Fridman (4:53:37.280)
you know, that doesn't matter.
Charles Hoskinson (4:53:38.800)
Look at the cherry blossoms.
Lex Fridman (4:53:40.160)
Aren't they beautiful today?
Lex Fridman (4:53:41.440)
And let's find a better one tomorrow.
Lex Fridman (4:53:44.520)
See, you're also a fan of fishing, I read somewhere.
Lex Fridman (4:53:48.400)
And one of my favorite books is Old Man and the Sea,
Lex Fridman (4:53:52.320)
where there's an old man sort of battling a big fish
Lex Fridman (4:53:58.360)
and basically closing out the last chapter of his life
Lex Fridman (4:54:01.480)
in this battle.
Lex Fridman (4:54:02.880)
So I think another aspect of life with this boulder,
Lex Fridman (4:54:06.080)
it feels like the boulder gets bigger and bigger
Charles Hoskinson (4:54:07.960)
as we get closer to death.
Lex Fridman (4:54:10.960)
And, you know, you find yourself married
Charles Hoskinson (4:54:13.800)
to a particular struggle in life
Lex Fridman (4:54:17.640)
that eventually just kind of overtakes
Charles Hoskinson (4:54:20.800)
the entirety of meaning of your existence.
Lex Fridman (4:54:23.640)
Do you think, I know what it is for me.
Lex Fridman (4:54:26.240)
Do you have something like that?
Lex Fridman (4:54:28.520)
The broader vision that unites your work with Cardano
Lex Fridman (4:54:32.480)
and everything you've done in life,
Lex Fridman (4:54:34.240)
the big fish that you're going to end up
Charles Hoskinson (4:54:37.480)
in the dark of night,
Lex Fridman (4:54:38.960)
struggling with the last chapter of your life,
Lex Fridman (4:54:42.240)
like the big problem you're taking on?
Lex Fridman (4:54:45.720)
Well, in mathematics, it was the Goldbach conjecture.
Charles Hoskinson (4:54:48.040)
I'd like to prove that.
Lex Fridman (4:54:49.040)
That's probably not gonna work.
Charles Hoskinson (4:54:51.320)
That's a really big fish.
Lex Fridman (4:54:53.240)
So do you still have a love for mathematics?
Charles Hoskinson (4:54:54.920)
Oh God, yeah, of course I do.
Lex Fridman (4:54:57.040)
You never lose that.
Charles Hoskinson (4:54:58.040)
You never lose that.
Lex Fridman (4:54:58.880)
You lose the ability to do deep work
Lex Fridman (4:55:00.880)
and you don't have the creativity
Lex Fridman (4:55:02.400)
and the raw inspiration.
Charles Hoskinson (4:55:04.080)
This is why I've gotten to automated theorem proving
Lex Fridman (4:55:06.040)
because what I lack and because I'm getting older,
Charles Hoskinson (4:55:08.600)
I can now have computers understand it
Lex Fridman (4:55:10.120)
and use AI to just solve this stuff.
Charles Hoskinson (4:55:11.820)
It's like the cheat codes for math.
Lex Fridman (4:55:13.960)
Fuck those guys, we'll still do that.
Lex Fridman (4:55:16.520)
But you know, mathematics still has those last passions
Lex Fridman (4:55:19.080)
and there's all kinds of cool things
Charles Hoskinson (4:55:20.800)
that I'd like to see done.
Lex Fridman (4:55:22.280)
Like quota complexes allow you to unify topology
Lex Fridman (4:55:24.880)
and number theory in really novel ways.
Lex Fridman (4:55:26.600)
And there are all kinds of cool things, but who cares?
Charles Hoskinson (4:55:29.100)
Everybody has those white whales.
Lex Fridman (4:55:34.400)
Another thing I love to do is bring back the woolly mammoth.
Charles Hoskinson (4:55:37.200)
That's George Church's hidden pleasure.
Lex Fridman (4:55:39.240)
In five to 10 years, it's actually gonna happen.
Lex Fridman (4:55:41.200)
And I have this beautiful ranch in Wyoming
Lex Fridman (4:55:42.760)
and I gotta find a way to convince George
Charles Hoskinson (4:55:44.440)
to let me raise his clone mammoth fence on my ranch.
Lex Fridman (4:55:47.480)
Among the bison.
Charles Hoskinson (4:55:48.400)
Among the bison.
Lex Fridman (4:55:49.240)
They'd probably get along really well.
Lex Fridman (4:55:50.800)
And then I have to learn all these cool things
Lex Fridman (4:55:52.440)
about woolly mammoths.
Charles Hoskinson (4:55:53.360)
Like do you shave them in the summertime
Lex Fridman (4:55:55.440)
and let them get shaggy during the winter
Lex Fridman (4:55:56.880)
or do you just let that coat go and then it falls?
Lex Fridman (4:55:58.720)
Who knows?
Charles Hoskinson (4:56:00.320)
It's an undiscovered country.
Lex Fridman (4:56:02.040)
I just had the image of Charles Hoskinson alone
Charles Hoskinson (4:56:05.000)
on a bison farm trying to raise a woolly mammoth.
Lex Fridman (4:56:09.600)
Just start wearing a white suit
Lex Fridman (4:56:10.800)
and say welcome to Hoskinson's ranch.
Lex Fridman (4:56:13.080)
I'll have a cane with amber on it.
Charles Hoskinson (4:56:14.640)
Yeah, with a chalkboard that you keep scrambling on
Lex Fridman (4:56:17.140)
like the beautiful mind in the movie
Lex Fridman (4:56:20.040)
and you'll have voices.
Lex Fridman (4:56:20.920)
All the schizophrenia's already come.
Charles Hoskinson (4:56:22.480)
You guys are all figments of my imagination anyway.
Lex Fridman (4:56:25.440)
Now one of my goals though, I love catfish
Lex Fridman (4:56:27.960)
and they live a long time.
Lex Fridman (4:56:28.920)
They get really damn big if you see those guys.
Charles Hoskinson (4:56:31.000)
I'd love to catch one now and be in my 60s
Lex Fridman (4:56:33.560)
and catch the same fish twice and recognize it.
Charles Hoskinson (4:56:36.560)
Maybe I'll lift a scar or something.
Lex Fridman (4:56:38.200)
That'd be really cool, going back to the fish thing.
Charles Hoskinson (4:56:41.080)
Because both the fish has gone through a lot,
Lex Fridman (4:56:42.880)
I've gone through a lot.
Charles Hoskinson (4:56:43.840)
We can just be like old friends.
Lex Fridman (4:56:44.680)
Reminisce.
Charles Hoskinson (4:56:45.520)
Exactly, exactly.
Lex Fridman (4:56:47.340)
About a life well lived.
Charles Hoskinson (4:56:49.000)
Then I'll die of a heart attack and my mammoths will eat me.
Lex Fridman (4:56:51.640)
That's something to look forward to.
Charles Hoskinson (4:56:53.400)
Charles, this is one of the most amazing conversations
Lex Fridman (4:56:56.280)
I've ever had.
Charles Hoskinson (4:56:57.120)
It's truly an honor that you would spend
Lex Fridman (4:56:59.720)
your valuable time with me.
Charles Hoskinson (4:57:01.640)
I'm glad you exist in the cryptocurrency
Lex Fridman (4:57:03.560)
and the technology space.
Charles Hoskinson (4:57:05.160)
I can see your love for mathematics and your love for life
Lex Fridman (4:57:07.720)
just radiate through everything you do.
Charles Hoskinson (4:57:09.960)
Thank you for being you
Lex Fridman (4:57:11.040)
and thank you for talking to me today.
Charles Hoskinson (4:57:12.880)
It's a lot of fun.
Lex Fridman (4:57:13.720)
Thank you so much, Lex.
Charles Hoskinson (4:57:15.640)
Thanks for listening to this conversation
Lex Fridman (4:57:17.080)
with Charles Hoskinson.
Charles Hoskinson (4:57:18.480)
Thank you to Gala Games, Allform, Indeed, ExpressVPN,
Lex Fridman (4:57:23.560)
and Eight Sleep.
Charles Hoskinson (4:57:25.000)
Check them out in the description
Lex Fridman (4:57:26.480)
to support this podcast.
Lex Fridman (4:57:28.520)
And now, let me leave you with some words
Lex Fridman (4:57:30.800)
from William Faulkner.
Charles Hoskinson (4:57:32.720)
You cannot swim for new horizons
Lex Fridman (4:57:35.320)
until you have the courage to lose sight of the shore.
Charles Hoskinson (4:57:38.340)
Thank you for listening and hope to see you next time.
Lex Fridman (50:02.620)
You can be Algorand, you can be a classic BFT protocol,
Charles Hoskinson (50:06.100)
you can be Paxos, you can be Raft,
Lex Fridman (50:08.060)
you can be proof of work, you can be proof of stake.
Charles Hoskinson (50:10.320)
It's always the same idea.
Lex Fridman (50:12.340)
You have to find someone or some group to be in charge.
Charles Hoskinson (50:15.980)
They'll reach a consensus on order.
Lex Fridman (50:18.520)
They have to then do some work,
Charles Hoskinson (50:21.140)
change the state of the system, update it,
Lex Fridman (50:23.460)
and then the network has to accept that that's valid.
Lex Fridman (50:26.400)
So even if this process works well,
Lex Fridman (50:28.540)
this side will say,
Charles Hoskinson (50:29.380)
oh, you created a Bitcoin at a thin air,
Lex Fridman (50:31.020)
you're not allowed to do that.
Lex Fridman (50:32.020)
So that's rejected.
Lex Fridman (50:33.580)
So there's checks and balances and guards all the way through.
Charles Hoskinson (50:36.600)
There's a meta question of fairness in all of this.
Lex Fridman (50:39.740)
So the proof of work people, they're kind of a cult
Lex Fridman (50:42.060)
and they say that this is the only truth
Lex Fridman (50:44.980)
and everything out here,
Charles Hoskinson (50:46.560)
any other resource is not legitimate or valid.
Lex Fridman (50:49.420)
And there's not a lot of evidence to that,
Lex Fridman (50:51.460)
but that's what they believe.
Lex Fridman (50:52.740)
The proof of stake people,
Charles Hoskinson (50:53.820)
the downside and weakness they have
Lex Fridman (50:55.300)
is it's a plutocratic model.
Charles Hoskinson (50:57.100)
The more ownership of the system you have,
Lex Fridman (50:59.020)
the more control you have over that system.
Lex Fridman (51:01.240)
And it suffers from the same thing
Lex Fridman (51:03.280)
that shareholder models suffer from,
Charles Hoskinson (51:04.780)
whereas you may maximize short term gain
Lex Fridman (51:07.620)
over the long term viability of the system.
Lex Fridman (51:09.860)
So a really cool question is,
Lex Fridman (51:11.340)
can you build systems that are multi resource?
Lex Fridman (51:14.020)
So instead of just pulling from one resource
Lex Fridman (51:16.660)
to select who wins,
Charles Hoskinson (51:18.520)
this 25% of the time and maybe this 25%, you can do that.
Lex Fridman (51:22.220)
In fact, the cryptocurrency space did that a long time ago.
Charles Hoskinson (51:25.220)
There was a cryptocurrency called Peercoin in 2011,
Lex Fridman (51:27.900)
and it was a hybrid proof of work proof of stake.
Lex Fridman (51:30.380)
So some of the blocks were made
Lex Fridman (51:31.780)
with the token ownership distribution
Lex Fridman (51:34.700)
and some of the blocks were made with proof of work,
Lex Fridman (51:36.660)
but you could keep adding.
Charles Hoskinson (51:38.300)
You could put in like, hey, I want hard disk in my thing.
Lex Fridman (51:41.260)
You can put Permacoin in or something like that.
Lex Fridman (51:43.380)
So it created incentive for hard drives.
Lex Fridman (51:45.020)
And then you could say, oh no,
Charles Hoskinson (51:45.860)
I want to do like a human system, like a proof of merit.
Lex Fridman (51:48.820)
Oh my God, now we're up to four.
Lex Fridman (51:50.140)
And you just keep adding.
Lex Fridman (51:51.380)
And each of these pools will have different adherence
Lex Fridman (51:54.140)
and actors, and then you can actually balance out
Lex Fridman (51:56.540)
the whole thing.
Lex Fridman (51:57.380)
So as opposed to having one cult, you have many cults.
Lex Fridman (51:59.940)
Exactly. And they argue.
Lex Fridman (52:01.140)
And the cults argue with each other
Lex Fridman (52:02.420)
and we call that a government.
Charles Hoskinson (52:03.460)
By the way, not all cults are bad.
Lex Fridman (52:05.220)
Physics is a cult too.
Lex Fridman (52:06.780)
And it's sometimes bad.
Lex Fridman (52:09.360)
It's honest at least.
Charles Hoskinson (52:10.940)
Nature is a cult.
Lex Fridman (52:12.080)
Nature is metal, I saw it on Instagram.
Lex Fridman (52:15.640)
So that's really the crux of it.
Lex Fridman (52:17.600)
You have a ledger and the ledger is just all about saying,
Charles Hoskinson (52:20.480)
hey, we need to put some stuff in here.
Lex Fridman (52:21.960)
And once it's put in here, you can't turn it back.
Lex Fridman (52:24.520)
And you know when it was put in and everybody can see it
Lex Fridman (52:27.880)
or some group can see it.
Lex Fridman (52:29.240)
And then you need to pick somebody to modify that.
Lex Fridman (52:31.640)
So all this chaos will happen.
Charles Hoskinson (52:33.120)
All these transactions are all around the world
Lex Fridman (52:35.160)
and our perception of them are different.
Charles Hoskinson (52:37.280)
There's a beautiful paper from Lamport
Lex Fridman (52:38.900)
that kind of talks about this from the 70s.
Charles Hoskinson (52:40.760)
It's like one of the most classic papers ever
Lex Fridman (52:43.320)
in computer science.
Charles Hoskinson (52:44.220)
I think it's been cited like 50,000 times
Lex Fridman (52:46.960)
or something like that.
Charles Hoskinson (52:47.800)
It's a crazy paper.
Lex Fridman (52:48.840)
But basically you have to figure out,
Charles Hoskinson (52:50.400)
okay, well, somebody has to be in charge.
Lex Fridman (52:51.920)
Some group has to be in charge.
Lex Fridman (52:53.580)
And you can do it with a meritocratic,
Lex Fridman (52:55.640)
hashocratic computation thing.
Charles Hoskinson (52:58.000)
You can say, well, if you have coins 25% of supply,
Lex Fridman (53:00.920)
25% of the time on average,
Charles Hoskinson (53:03.060)
you'll be selected to have the right to do this
Lex Fridman (53:04.840)
or give it to somebody else.
Charles Hoskinson (53:06.200)
Or you could search for other resources.
Lex Fridman (53:07.880)
And they can even be human resources,
Charles Hoskinson (53:09.160)
like some notion of merit or social benefit.
Lex Fridman (53:12.060)
Maybe you get a token for that
Lex Fridman (53:13.400)
and you can weight it with these other systems.
Lex Fridman (53:15.760)
And that's where kind of where everything's going.
Charles Hoskinson (53:18.000)
We're getting to a point where we've really optimized
Lex Fridman (53:21.080)
all the properties here.
Charles Hoskinson (53:22.120)
We've proven all these nice things about it.
Lex Fridman (53:24.080)
And there's a lot of competition
Charles Hoskinson (53:25.740)
to basically build like the perfect proof of stake system,
Lex Fridman (53:28.800)
whether you're Polkadot or Algorand
Charles Hoskinson (53:30.920)
or any of these other guys.
Lex Fridman (53:32.820)
But now the next step is say, well,
Lex Fridman (53:34.640)
why don't we just have one?
Lex Fridman (53:36.860)
We should have multiple resources.
Lex Fridman (53:38.960)
And the point is each of these
Lex Fridman (53:40.480)
has different trade off profiles.
Lex Fridman (53:42.240)
And so they balance each other
Lex Fridman (53:43.680)
and you end up building a much more resilient system.
Lex Fridman (53:45.660)
So it's not winner take all with one particular demand.
Lex Fridman (53:49.260)
Okay, so there's a million questions
Charles Hoskinson (53:50.960)
that spring up right there.
Lex Fridman (53:52.440)
But first linger on this topic and say,
Lex Fridman (53:54.440)
what is proof of work?
Lex Fridman (53:55.520)
What is proof of stake?
Charles Hoskinson (53:56.820)
Just zooming in on each of those.
Lex Fridman (53:59.480)
And what are the differences?
Charles Hoskinson (54:01.500)
Okay, so they all have the same three properties
Lex Fridman (54:03.920)
of pick someone in charge, do something and validate it.
Charles Hoskinson (54:06.640)
The difference is that the picking mechanism for proof
Lex Fridman (54:09.280)
of work is you have to solve a puzzle.
Lex Fridman (54:11.400)
So it's basically like buying lottery tickets
Lex Fridman (54:13.600)
and you can buy a certain amount every second
Charles Hoskinson (54:16.480)
with your computing devices.
Lex Fridman (54:18.040)
And some of them are ASIC resistant.
Lex Fridman (54:19.640)
So you run them on like a laptop or a GPU.
Lex Fridman (54:22.000)
And some of them are you specialized hardware
Charles Hoskinson (54:24.400)
that you have to either manufacturer
Lex Fridman (54:26.320)
or buy from someone who sells it to you.
Lex Fridman (54:28.600)
And that's just how many tickets per second you can get.
Lex Fridman (54:31.120)
And eventually you hit those magic numbers.
Charles Hoskinson (54:32.960)
When you do, it means you have the right to make the block
Lex Fridman (54:36.360)
and generally you bundle the block making
Charles Hoskinson (54:38.320)
with the proof of work system.
Lex Fridman (54:39.980)
Now you can do this looking for a single
Charles Hoskinson (54:43.020)
or you can do this to actually shard it
Lex Fridman (54:44.640)
and look for multiple block makers at the same time.
Lex Fridman (54:47.560)
So there are sharded proof of work protocols
Lex Fridman (54:49.200)
like Prism is an example of that.
Lex Fridman (54:50.840)
And actually Ethereum got started this way
Lex Fridman (54:53.800)
with Spectre and Ghost and Phantom,
Charles Hoskinson (54:56.360)
the Aviz Ahar's work and Yonatan Sonlopinsky.
Lex Fridman (54:59.700)
But the basic idea is you pick some collection of people,
Charles Hoskinson (55:02.400)
they make some collection of things
Lex Fridman (55:03.540)
and there's some way to sort it all out,
Charles Hoskinson (55:04.920)
serialize it and prevent double spends, great.
Lex Fridman (55:07.720)
Proof of stake is the same, but it's a synthetic resource.
Lex Fridman (55:11.200)
So instead of doing things, they say,
Lex Fridman (55:13.160)
well, if you had 25% of the hash power on average
Charles Hoskinson (55:15.840)
over a long period of time,
Lex Fridman (55:17.180)
you'd probably win 25% of the time.
Charles Hoskinson (55:19.560)
Well, why don't we just introduce some randomness in
Lex Fridman (55:21.800)
from some source and then 25% of the time on average
Charles Hoskinson (55:24.960)
over a long period of time, you'll win.
Lex Fridman (55:26.920)
So it's a synthetic resource,
Lex Fridman (55:28.820)
but you still have to do the other two things.
Lex Fridman (55:30.560)
You still have to make the block
Lex Fridman (55:31.880)
and you still have to validate the block.
Lex Fridman (55:33.900)
The big difference is this step in the proof of work world
Charles Hoskinson (55:36.940)
is horrendously expensive.
Lex Fridman (55:38.800)
You use more energy than the nation of Switzerland.
Lex Fridman (55:41.540)
And the problem with that is that you have less resources
Lex Fridman (55:43.860)
for the other two.
Lex Fridman (55:45.020)
And the other problem with that is that
Lex Fridman (55:46.440)
if this is horrendously expensive,
Charles Hoskinson (55:48.280)
you have an economy of scale kick in.
Lex Fridman (55:50.500)
So what ends up happening is the system becomes
Charles Hoskinson (55:52.500)
less decentralized over time
Lex Fridman (55:54.420)
because you have these vertically integrated operations.
Charles Hoskinson (55:56.860)
I mean, not everybody can go build a mining facility
Lex Fridman (55:59.020)
on a volcano in El Salvador.
Charles Hoskinson (56:00.840)
Not everybody can go to Mongolia
Lex Fridman (56:02.880)
and set up a five gigawatt power plant
Lex Fridman (56:05.120)
and a huge data thing.
Lex Fridman (56:06.320)
Not everybody has access to the patented basics
Charles Hoskinson (56:08.980)
that people produce.
Lex Fridman (56:10.120)
Because what if I don't sell it to you
Lex Fridman (56:11.340)
and I have the patent on it?
Lex Fridman (56:12.640)
Or what if I control the supply chain for these things?
Lex Fridman (56:15.280)
So you'll end up having centralization around maybe 10
Lex Fridman (56:18.720)
or five major operations as we've seen historically
Charles Hoskinson (56:22.300)
with proof of work.
Lex Fridman (56:23.320)
And that means you end up having like a ruling class
Charles Hoskinson (56:27.120)
of a mining oligarchy in the system.
Lex Fridman (56:29.420)
Proof of stake, if you design the parameters correctly,
Charles Hoskinson (56:32.320)
you actually get more decentralized over time
Lex Fridman (56:34.960)
because as the currency goes up in value,
Charles Hoskinson (56:37.220)
the distribution of the currency
Lex Fridman (56:38.880)
tends to get more egalitarian.
Charles Hoskinson (56:43.120)
For example, Bill Gates, when he started Microsoft,
Lex Fridman (56:45.640)
he had 64% of the shares.
Charles Hoskinson (56:47.500)
Now he has less than 5% of the shares.
Lex Fridman (56:49.880)
So this founder drift over time,
Charles Hoskinson (56:52.040)
as the value goes up, divestment occurs,
Lex Fridman (56:54.120)
you have more and more and more people coming in.
Charles Hoskinson (56:56.600)
That means there's more people
Lex Fridman (56:57.520)
who can participate in the consensus.
Charles Hoskinson (56:59.320)
You can even tune economic parameters.
Lex Fridman (57:01.160)
And this is what we did with Cardano and Ouroboros.
Charles Hoskinson (57:03.960)
We created this concept of K in the system
Lex Fridman (57:06.680)
and it's just a parameter.
Lex Fridman (57:07.600)
And it's like a forcing factor
Lex Fridman (57:09.640)
that tends to accumulate a certain amount of stake pools.
Lex Fridman (57:12.280)
So you can set it to 200 and then 500 and 1000 and so forth.
Lex Fridman (57:16.160)
But the basic idea is as the price of ADA goes up,
Charles Hoskinson (57:19.280)
you make K larger and then you end up in practical terms
Lex Fridman (57:23.080)
having a larger and larger set of actors making blocks
Charles Hoskinson (57:27.080)
that are unique and distinct.
Lex Fridman (57:28.600)
And the other good thing is this is a virtual resource
Charles Hoskinson (57:31.440)
instead of a physical resource,
Lex Fridman (57:32.960)
which means it's portable by the click of a button.
Lex Fridman (57:35.840)
So let's say China says, mining is bad,
Lex Fridman (57:37.880)
we're gonna shut it all down.
Lex Fridman (57:39.000)
And it looks like they're moving in that direction.
Lex Fridman (57:40.960)
You have all these people in WeChat,
Charles Hoskinson (57:42.160)
just like trying to sell miners
Lex Fridman (57:44.080)
or trying to figure out how the hell do I move miners,
Charles Hoskinson (57:46.640)
because they have these huge data centers
Lex Fridman (57:48.200)
they've constructed.
Charles Hoskinson (57:49.040)
You can't exactly go and grab a server
Lex Fridman (57:50.760)
and like take it with you, it's huge.
Charles Hoskinson (57:52.440)
It's a lot of work.
Lex Fridman (57:53.280)
And if the government sees it,
Charles Hoskinson (57:54.340)
well, it's their property now.
Lex Fridman (57:56.000)
A virtual resource, you can click a button
Lex Fridman (57:57.900)
and redeploy it to a different jurisdiction.
Lex Fridman (58:00.760)
So to me, for a virtual asset,
Charles Hoskinson (58:03.480)
it makes a lot more sense to try to tie your security
Lex Fridman (58:06.080)
to something endogenous, something within the system,
Charles Hoskinson (58:08.960)
because it's just like the asset,
Lex Fridman (58:11.000)
it can move anywhere at a click of a button
Lex Fridman (58:13.160)
and human beings have a much harder time
Lex Fridman (58:15.120)
attacking something like that.
Charles Hoskinson (58:16.480)
Well, so people, maybe you could sort of play devil's advocate
Lex Fridman (58:19.520)
and say, what is the strength of proof of work system?
Charles Hoskinson (58:21.560)
Because some people would argue that proof of work has,
Lex Fridman (58:25.380)
because it's outside the system,
Charles Hoskinson (58:28.000)
it's tied to physical resources, it's more secure.
Lex Fridman (58:31.240)
It's less prone to attack by large groups of people.
Charles Hoskinson (58:36.540)
Yeah, that's a great question.
Lex Fridman (58:37.840)
And the first question we had was,
Lex Fridman (58:39.900)
could proof of stake actually work or not?
Lex Fridman (58:41.780)
So the problem was that the engineers kind of led
Charles Hoskinson (58:44.740)
when the science should have led.
Lex Fridman (58:46.080)
And so there were all these POS protocols
Charles Hoskinson (58:48.180)
that came out in the early 2010s,
Lex Fridman (58:50.440)
like Peercoin was the first and then NXT and others came out.
Lex Fridman (58:54.280)
And there they had suffered from things
Lex Fridman (58:55.520)
like the random number generation wasn't good.
Charles Hoskinson (58:57.560)
They had grinding attacks and nothing at stake
Lex Fridman (58:59.800)
and all these other things.
Lex Fridman (59:00.760)
And there's a lot of beautiful properties
Lex Fridman (59:02.580)
for proof of work from a theoretical sense.
Charles Hoskinson (59:04.420)
We even wrote a paper called GKL,
Lex Fridman (59:07.560)
named after the authors, Juan Gray, Niko Leonardis
Lex Fridman (59:10.640)
and Agelos Gassis, our chief scientist.
Lex Fridman (59:13.080)
It's got 1100 citations now and it was published in 2015.
Lex Fridman (59:17.320)
But basically all it did is just model the blockchain
Lex Fridman (59:19.440)
and created some security properties for it.
Lex Fridman (59:21.200)
And then it started talking about,
Lex Fridman (59:22.480)
well, what does proof of work actually do for you?
Lex Fridman (59:24.600)
And it turns out it does a lot.
Lex Fridman (59:26.240)
It's an asynchronous system.
Charles Hoskinson (59:28.040)
You can bootstrap from Genesis.
Lex Fridman (59:29.660)
So if Eve joins the network and Wally joins the network
Lex Fridman (59:34.040)
and Daisy joined the network,
Lex Fridman (59:36.880)
then you give them some different chains,
Charles Hoskinson (59:39.500)
like five or 10 different chains.
Lex Fridman (59:41.280)
They can run a calculation
Lex Fridman (59:42.960)
and they will always pick the longest chain,
Lex Fridman (59:45.120)
the heaviest chain inside the system.
Charles Hoskinson (59:47.220)
That's a great property of proof of work.
Lex Fridman (59:49.480)
Until we published Ouroboros Genesis in 2018,
Charles Hoskinson (59:52.880)
you actually needed to solve that in proof of stake
Lex Fridman (59:54.880)
with a trusted checkpoint.
Lex Fridman (59:56.600)
So some actor had to be observing,
Lex Fridman (59:58.840)
watching the whole thing and creating checkpoints.
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