Silvio Micali: Cryptocurrency, Blockchain, Algorand, Bitcoin, and Ethereum

Silvio Micali (03:14.320)

Nobody can swap page. Nobody can change anything. And that is immutable common record is

Silvio Micali (03:21.920)

extremely powerful. And there's something fundamental that is decentralized about it.

Lex Fridman (03:27.920)

So at least in spirit, some degree against maybe a resistance to centralization.

Silvio Micali (03:33.600)

Absolutely. If it is not decentralized, how can it be common knowledge? If only one person or a

Lex Fridman (03:41.520)

few people have a ledger, you don't have a ledger, you have to ask, you know, what is on page seven?

Lex Fridman (03:47.680)

And how do you know that whatever they tell you is on page seven, they tell the same thing to

Silvio Micali (03:52.400)

everybody else. And so this commonality is extremely powerful. Just to give you an example,

Silvio Micali (04:02.000)

assume that you do an auction, okay? You have worked very hard, you build a building,

Lex Fridman (04:08.880)

and now you want to auction it off. Makes sense because you want to auction worldwide,

Silvio Micali (04:14.800)

better yet, you want to tokenize the building and sell it in all in parcels.

Silvio Micali (04:20.320)

Now, everybody sees the bids. And you know that everybody sees the bids. You and I see the same

Silvio Micali (04:26.400)

bids, and so does everybody else. So you know that a fair price has reached, and you know who owns

Lex Fridman (04:32.000)

what and who has spent how much. And if you do it instead of, otherwise, in a centralized system,

Lex Fridman (04:39.440)

I put a bid saying, oh, congratulations, Alex, you won, and your price is $12,570. How do you know?

Lex Fridman (04:47.840)

So if instead of this common knowledge is a very powerful tool for humanity.

Lex Fridman (04:56.000)

So we return to it from a bunch of different perspectives, including like a technical

Silvio Micali (05:00.320)

perspective. But you often talk about blockchain and some of these concepts of decentralization,

Silvio Micali (05:09.040)

scalability, security, all those kinds of things. But one of the most maybe impactful, exciting

Silvio Micali (05:17.760)

things that leverage the blockchain, this kind of ledger idea of common knowledge is cryptocurrency.

Lex Fridman (05:25.280)

So in the financial space. So is there, can you say in the same kind of basic way,

Lex Fridman (05:31.440)

what is cryptocurrency in the context of this common knowledge and in the context of the blockchain?

Silvio Micali (05:37.040)

Great. Cryptocurrency is a currency that is on such a ledger. So imagine that on the ledger,

Silvio Micali (05:45.280)

initially, you know that somehow, say you and I are the only owner, each one, let's give it

Silvio Micali (05:52.000)

ourselves a billion each of whatever this unit. Then I start writing on the ledger,

Silvio Micali (06:01.040)

I give 100 of these units to my sister, I give this much to my aunt. And then now,

Silvio Micali (06:08.240)

because it's written on the ledger and everybody can see, my sister can give 57 of these units

Silvio Micali (06:13.440)

that she received from me to somebody else. And that is money. And that is money because

Silvio Micali (06:19.520)

you can see that somebody who tenders your payment has really the money there. You don't

Lex Fridman (06:26.400)

have any more of a doubt when you want to sell an item. If I write you a check, is the check covered?

Silvio Micali (06:33.680)

Or do I have the money at the moment of a transaction? You really see because the ledger

Silvio Micali (06:38.800)

is always updated. What you see is what I see, what the merchant sees. You know that the money,

Silvio Micali (06:44.560)

the money is the most powerful money system there is because it is totally transparent. And so you

Silvio Micali (06:52.640)

know that you have been paid, and you know that the money is there, you have not to second guess

Silvio Micali (06:58.000)

anything else. So the common knowledge applied there is you're basically mimicking the same kind

Silvio Micali (07:04.000)

of thing you would get in the physical space, which is if you give 100 bucks or 100 of that

Silvio Micali (07:10.320)

thing, whatever of that cryptocurrency to your sister, the actual transfer is as real as you

Silvio Micali (07:18.480)

giving like a basket of apples to your sister. So in the case in the physical space, the common

Silvio Micali (07:28.880)

knowledge is in the physics of the atoms. And then it's digital space, the common knowledge

Silvio Micali (07:35.280)

is in this ledger. And so that transfer holds the same kind of power, but now it's operating

Silvio Micali (07:43.440)

in the digital space. Again, I apologize for a set of ridiculous questions, but you mentioned

Silvio Micali (07:52.960)

cryptocurrencies and money. What is money? Why do we have money? Do you think about this

Silvio Micali (08:00.320)

kind of from this high philosophical level at times of this tool, this idea that we humans

Lex Fridman (08:08.720)

have all kind of came up with and seem to be using effectively to do stuff?

Silvio Micali (08:15.360)

Money is a social construct, okay, in my opinion. And this has been somehow people always felt

Silvio Micali (08:22.720)

that somehow money is a way to allow us to transact, even though we want different things. So

Silvio Micali (08:30.400)

I have two sheep, and then you have one cow, and I want the cow, but you are looking for

Silvio Micali (08:39.760)

blankets instead, you know, so to have money is really simplifies this. But at the end of

Silvio Micali (08:44.880)

it, that's why a bit was invented. And you started with gold, you started with

Silvio Micali (08:49.600)

the coinage, then you started with the check. But at the end of the day, money is essentially

Silvio Micali (08:56.080)

a social construct because you know that what you receive, you can actually spend with somebody

Silvio Micali (09:01.680)

else. And so there is a kind of a social pact and social belief that you have. At the end of the day,

Silvio Micali (09:09.600)

even barter requires these beliefs that other people are going to accept

Silvio Micali (09:17.920)

the quote unquote currency you offer them. Because if I'm a mason, and you ask me to build a wall

Silvio Micali (09:25.600)

in your field, and I did, and you, in exchange, you give me a thousand sheep,

Lex Fridman (09:32.480)

what am I going to do? Eat them all? No, I have to feed them. And if I don't feed them, they die,

Lex Fridman (09:37.440)

and my value is zero. So in receiving this livestock, I must believe that somebody else

Silvio Micali (09:45.120)

will accept them in return for something else. So money is a social belief, social shared belief

Silvio Micali (09:53.200)

system that makes people transact. That's fascinating. I didn't even think about that,

Silvio Micali (09:58.960)

that you're actually, you have a deep like network of beliefs about how society operates.

Lex Fridman (10:06.800)

So the value is assigned even to sheep, based on that everyone will continue operating how they

Silvio Micali (10:12.240)

were previously operating. Somebody will feed the sheep. I didn't even think about that. That's

Silvio Micali (10:19.680)

fascinating. So that directly transfers to the space of money and then to the space of digital

Silvio Micali (10:26.480)

money, cryptocurrency. Okay. Does it bother you sort of intellectually when this money that is

Lex Fridman (10:33.600)

a social construct is not directly tied to physical goods like gold, for example?

Silvio Micali (10:40.400)

Not at all, because after all, gold has some industrial value. Nobody delights it. It's a

Silvio Micali (10:49.280)

metal. It doesn't oxidate. It has some good things about it. But does this industrial value

Silvio Micali (10:55.760)

really represent the value to which it now is traded? No. So gold is another way to express

Silvio Micali (11:01.920)

our belief. I give you an ounce of gold, you treat it like, oh, somebody else will want this

Silvio Micali (11:07.200)

for doing something else. So it is really this notion of this. Money is a mental construct,

Silvio Micali (11:14.480)

is really, and is shared, is a social construct, I really believe. And so some people feel that

Silvio Micali (11:21.200)

it's physical, so therefore gold exists. Then, as you know now, countries, most sophisticated

Silvio Micali (11:30.160)

country right now, they print their own money and you believe that they are not going to

Silvio Micali (11:35.360)

exaggerate it with inflation. Not everybody believes it, but at least they are not going

Silvio Micali (11:42.560)

to exaggerate it blatantly. And therefore you receive it because you know that somebody else

Silvio Micali (11:49.680)

will accept it, will have faith in the currency and so on and so forth. But whether it's gold,

Silvio Micali (11:54.080)

whether it's livestock, whatever it is, money is really a shared belief.

Lex Fridman (11:59.600)

So there is something, you know, and I've been reading more and more about different cryptocurrencies.

Silvio Micali (12:07.200)

There is a kind of belief that the scarcity of a particular resource like Bitcoin has a

Silvio Micali (12:14.880)

limited amount and it's tied to physical, you know, to proof of work. So it's tied to physical

Silvio Micali (12:23.040)

reality in terms of how much you can mine effectively and so on. That that's an

Silvio Micali (12:28.880)

important feature of money. Do you think that's an important feature to be a part of whatever

Silvio Micali (12:34.880)

the money is? That is certainly a very useful part. So at some point in time, you know,

Silvio Micali (12:40.800)

assume that money is something that all of a sudden we say, daisies are money, are the currency.

Silvio Micali (12:46.880)

Then, you know, I offer you 10 daisies in payment of whatever goods and services you want to

Silvio Micali (12:52.480)

provide. But at the end of the day, if you know that you can cultivate it and generate them at

Silvio Micali (12:59.520)

will, then perhaps, you know, you should not accept my payment. Here is a bouquet of daisies.

Lex Fridman (13:08.320)

So you need some kind of a scarcity. The inability to create it suddenly out of nothing

Silvio Micali (13:14.400)

is unimportant. And it's not an intrinsic necessity, but it's much easier to accept

Silvio Micali (13:24.560)

once you know that there is a fixed number of units of whatever currency there is and therefore

Silvio Micali (13:30.480)

you can mentally understand I'm getting, you know, this much of this piece of a pie and therefore

Silvio Micali (13:37.040)

I consider myself paid. I understand what I'm receiving. You described the goals of a blockchain.

Silvio Micali (13:43.600)

You have a nice presentation on this as scalability, security, and decentralization.

Lex Fridman (13:49.680)

And you challenged the blockchain trilemma that claims you can only have two of the three.

Lex Fridman (13:55.600)

So let's talk about each. What is scalability in the context of blockchain and cryptocurrency?

Lex Fridman (14:02.000)

What does scalability mean? So remember, we said that the blockchain is a ledger and each page

Silvio Micali (14:09.760)

receives a, gets some transaction and everybody can write in these pages of the ledger. Nobody

Silvio Micali (14:16.320)

can be stopped from writing and everybody can read them. Okay. Scalability means how fast can

Silvio Micali (14:21.760)

you write? Just imagine that you can write an entry in this special shared ledger once every

Silvio Micali (14:28.640)

hour. Well, you know, what are you going to do if you have no one transaction of an hour,

Silvio Micali (14:33.440)

the world doesn't go around. So you need to have scalability means here that you can

Silvio Micali (14:38.880)

then somehow write a lot of transaction and then you can read them and everybody can validate them.

Lex Fridman (14:47.040)

And that is the speed and the number of transactions per second and the fact that

Silvio Micali (14:54.080)

they are shared. So you want to have this speed not only in writing, but in sharing and

Silvio Micali (15:01.040)

in inspection for validity. This is scalability. The world is big. The world wants to interact,

Silvio Micali (15:09.120)

the people want to interact with each other and you better be prepared to have a ledger

Silvio Micali (15:13.520)

in which you can write lots and lots and lots of transactions in this special way very,

Lex Fridman (15:17.520)

very, very quickly. So maybe from a more mathematical perspective or can we say

Lex Fridman (15:22.800)

something about how much scalability is needed for a world that is big?

Silvio Micali (15:27.760)

Well, it really depends how many transactions you want, but remember that I think right now

Silvio Micali (15:36.400)

yet to go into at least 1000s of transactions per second, even if you look at credit cards,

Silvio Micali (15:46.480)

we are going to go from an average of 1600 to peaks of 20,000 or 40,000, something like this.

Lex Fridman (15:54.320)

But remember, it's not only a question of a transaction per se, but the value is that the

Silvio Micali (16:01.200)

transaction is actually being shared and visible to everybody and the certainty that that is the

Silvio Micali (16:08.400)

case. I can print on my own printer way more transactions, but nobody has the time to see

Silvio Micali (16:15.600)

or to inspect. That doesn't count. So you want scalability at this common knowledge level.

Silvio Micali (16:22.480)

That is the challenge. I also meant from a perspective of like a complexity analysis.

Lex Fridman (16:28.320)

So when you get more and more people involved, doesn't need to scale in some kind of way that

Lex Fridman (16:38.240)

do you like to see certain kind of properties in order to say something is scalable?

Silvio Micali (16:42.560)

Oh, absolutely. I took a little bit implicitly that the people transacting are actually very

Silvio Micali (16:48.320)

different. So if there is a two people who can do thousands of transactions per second with each

Silvio Micali (16:54.080)

other, this is not so interesting. What do we really need is to say there are billions of

Silvio Micali (16:58.320)

people at any point in time, you know, thousands and thousands of them want to transact with each

Silvio Micali (17:03.760)

other and you want to support to that. So Algorand, it solves, so that's the company,

Silvio Micali (17:12.160)

the team of cryptographers and mathematicians, engineers, so on, that challenged the blockchain

Silvio Micali (17:17.280)

trilemma. So let's break it down in terms of achieving scalability. How do we achieve scalability

Silvio Micali (17:25.600)

in the space of blockchain, in the space of cryptocurrency? Okay. So scalability, security,

Lex Fridman (17:31.680)

remember, and decentralization, right? So that's what they want. What's the best way to approach?

Silvio Micali (17:36.480)

Can we break it down? Let's start with scalability and think about how do we achieve it? Well,

Silvio Micali (17:41.520)

to achieve it one at a time is perhaps easy, even security. If nobody transacts,

Silvio Micali (17:48.560)

nobody loses money. So that is secure, but it's not scalable. So let me tell you, I'm a cryptographer,

Lex Fridman (17:56.160)

so I try to fight the bad guys. And what you want is that the vesselager that we discussed before

Silvio Micali (18:04.240)

cannot be tampered with. So you must think of it as a special link that nobody can erase. Then

Silvio Micali (18:12.080)

it has to be, everybody should be able to read and not to alter the pages or the content of the pages.

Silvio Micali (18:22.320)

That's okay. But you know what? That is actually easy cryptographically. Easy cryptographically

Lex Fridman (18:28.640)

means you can use tools invented 50 years ago, which in cryptographic time is prehistory, okay?

Silvio Micali (18:35.120)

We cavemen working around and solve the problem in cryptography land. But there is really a

Silvio Micali (18:42.320)

fundamental problem, which is really almost a social, seems a political problem, is to say,

Silvio Micali (18:48.480)

who the hell chooses or publishes the next page of the ledger? I mean, that is really the challenge.

Silvio Micali (18:58.080)

This ledger, you can always add a page because more and more transaction had to be written on

Silvio Micali (19:03.120)

there. And somebody has to assemble this transaction, put them on a page and add the

Lex Fridman (19:08.880)

next page. Who is the somebody who chooses the page and adds it on? Who can be trusted to do it?

Silvio Micali (19:14.640)

Exactly. Assume it is me for what I'm being, not that I want to volunteer for the job, but

Silvio Micali (19:20.320)

then I would have more power than any absolute monarch in history, because I would have a

Silvio Micali (19:25.520)

tremendous power to say, these are the transactions that the entire world should see. And whatever I

Silvio Micali (19:32.080)

don't write, this transaction will never see the light of day. I mean, no one had any such a power

Silvio Micali (19:38.960)

in history. So it's very important to do that. And that is the quintessential problem in a blockchain.

Lex Fridman (19:47.200)

And people have thought about it to say, it's not me, it's not you. But for instance,

Lex Fridman (19:52.000)

in proof of work, what people say is, okay, it's not me, it's not you, you know what it is?

Silvio Micali (19:58.000)

We make a very difficult, we invented a cryptographic puzzle, very hard to solve.

Silvio Micali (1:00:05.600)

one, perhaps one chain, where you want to have to transact, maybe is another. I'm not saying that,

Silvio Micali (1:00:12.320)

you know, one chain cannot be store of value or another thing, but I really believe,

Silvio Micali (1:00:19.120)

I believe in the ingenuity of people and in the innovation that is intrinsic to the human nature.

Lex Fridman (1:00:25.120)

We want always different things. So how can it be something invented,

Silvio Micali (1:00:28.880)

whatever it is decades ago, is going to fulfill the needs of our future generations.

Silvio Micali (1:00:33.200)

I'm not going to fulfill my needs, let alone my kids or their kids. We are going to have a

Silvio Micali (1:00:43.200)

different world and things will evolve. So you believe that life, intelligent life,

Lex Fridman (1:00:50.240)

is ultimately about adaptability and evolving. So static loses in the end.

Silvio Micali (1:00:58.800)

Yes. Let me ask the, well, first the ridiculous question. Do you have any

Lex Fridman (1:01:05.680)

clue who Satoshi Nakamoto is? Is that even an interesting question?

Silvio Micali (1:01:12.560)

Well, your questions are very interesting. So, and I think, so I would say, first of all,

Silvio Micali (1:01:19.920)

it's not me. Okay. And I can prove it because, you know, if I were Satoshi Nakamoto, I would

Silvio Micali (1:01:25.360)

have not found an algorithm. It takes a totally different principle to approach to the system.

Lex Fridman (1:01:31.680)

But the other thing, who is Satoshi Nakamoto? You know what the right answer is? It's not him

Silvio Micali (1:01:36.800)

or her or them. Satoshi Nakamoto is Bitcoin. Because to me, it's such a coherent proof of

Silvio Micali (1:01:46.080)

work that at the end, the creator and the creation identify themselves. So you say,

Silvio Micali (1:01:52.640)

okay, I understand Michelangelo. Okay. He did the Sistine Chapel. Fine. He did the

Silvio Micali (1:01:57.280)

St. Peter's Dome. Fine. He did the Moses of the Pieta statue. Fine. But besides this,

Silvio Micali (1:02:04.480)

who was Michelangelo? That's the wrong question. It's his own work. That is Michelangelo.

Lex Fridman (1:02:10.160)

So I think that when you look at the Bitcoin is a piece of work that as it defects, yes,

Silvio Micali (1:02:18.640)

like anything human, but it was captivated the imaginations of millions of people as subverted

Silvio Micali (1:02:26.160)

the status quo. And I'm saying, you know, whoever this person of people are, he's living in this

Silvio Micali (1:02:34.720)

piece of work. I mean, it is Bitcoin. The idea of the work is bigger. We forget that sometimes.

Silvio Micali (1:02:43.360)

It's something about our biology likes to see a face and attach a face to the idea when really

Silvio Micali (1:02:49.200)

the idea is the thing we love. The idea is the thing that impact the idea is the thing that

Silvio Micali (1:02:54.320)

ultimately we, you know, Steve Jobs or somebody like that, we associate with the Mac or the iPhone

Silvio Micali (1:03:00.080)

with just everything he did at Apple. Apple, actually the company is Steve Jobs. Steve Jobs,

Silvio Micali (1:03:05.920)

the man is a pales in comparison to the creation. Correct. And the sense of aesthetics that has

Silvio Micali (1:03:13.520)

brought to the daily lives and very often aesthetic wins in the long, in the long,

Silvio Micali (1:03:19.680)

in the long game. And these are very elegant design product. And when you say, Oh,

Silvio Micali (1:03:25.440)

elegance, very few people care about it. Apparently millions and millions and millions

Lex Fridman (1:03:31.360)

and millions of people do because we are attacked by beauty and these are beautifully designed

Silvio Micali (1:03:36.320)

products. And, and, and, you know, and they've in addition to ever the technological aspect

Silvio Micali (1:03:44.400)

of the other thing. And I think, yes, that is, yeah, as the Stajewski said, beauty will save

Silvio Micali (1:03:50.400)

the world. So I'm, I'm with you on that one. Right. It currently seems like cryptocurrency,

Silvio Micali (1:03:57.760)

all these different technologies are gathering a lot of excitement, not just in our discourse,

Lex Fridman (1:04:07.120)

but in their like scale of financial impact. A lot of companies are starting to invest in Bitcoin.

Lex Fridman (1:04:14.640)

Do you think that the main method of store value and exchange of value, basically money will soon

Lex Fridman (1:04:25.760)

or at some point in the century will become cryptocurrency?

Silvio Micali (1:04:29.840)

Yes. So mind you, as I said, that the notion of cryptocurrency, like any other fundamental human

Silvio Micali (1:04:36.240)

notion has to evolve, but yes. So I think of it, uh, he has a lot of momentum behind it.

Silvio Micali (1:04:45.520)

Um, it's not only static as a visa programmable money as a smart contract. It allows a peer to

Silvio Micali (1:04:55.120)

peer interaction among people who don't even know each other. Right. Uh, and they don't even,

Silvio Micali (1:05:01.520)

therefore I cannot even trust each other just because they never saw each other.

Lex Fridman (1:05:06.400)

So I think it's so powerful that, uh, uh, is going to do this said again,

Silvio Micali (1:05:13.680)

a particular cryptocurrency should develop and cryptocurrency will all develop. But the answer

Silvio Micali (1:05:20.080)

is yes, we are going towards a much more, uh, unless we have a society, a sudden crisis for

Silvio Micali (1:05:28.000)

different reasons, which nobody hopes there's always an asteroid. There's always something,

Silvio Micali (1:05:34.080)

uh, nuclear war and all the existential crisis that we kind of think about,

Silvio Micali (1:05:38.640)

including artificial intelligence. Uh, okay. It's funny. You mentioned that, um,

Silvio Micali (1:05:44.560)

um, Michelangelo and Steve jobs, you know, set of ideas represents the person's work.

Lex Fridman (1:05:50.400)

So we talked about Algorand, which is a super interesting set of technologies, but,

Silvio Micali (1:05:56.240)

you know, he did also win the touring award. You have a bunch of, you have a bunch of ideas that

Silvio Micali (1:06:05.520)

are, you know, seminal ideas. So can we talk about cryptography for a little bit? What is the most

Silvio Micali (1:06:12.800)

beautiful idea in cryptography or computer science or mathematics in general asking somebody who has

Lex Fridman (1:06:19.520)

explored the depths of all? Well, there are a few contenders

Silvio Micali (1:06:29.920)

and, uh, either your work or, uh, or other words, uh, let's leave my work aside and, uh, and, uh,

Silvio Micali (1:06:38.880)

so, but one powerful idea and is, uh, both an old idea in some sense and a very, very modern one.

Silvio Micali (1:06:49.120)

And, uh, in my opinion is this idea of a one way function. So a function that easy to evaluate.

Lex Fridman (1:06:57.520)

So given X, you can compute F of X easily, but given F of X is very hard to go back to X. Okay.

Silvio Micali (1:07:06.480)

Think like breaking a glass, easy. Reconstruct the glass harder. Frying an egg, easy. From the

Silvio Micali (1:07:17.120)

fried egg to go back to the original egg, harder. If you want to be extreme, killing a living being,

Silvio Micali (1:07:24.560)

unfortunately, easy. The other way around, very hard. And so the fact that the notion of a function,

Lex Fridman (1:07:31.840)

whichever a recipe that is in front of your eyes to transform an X into F of X,

Lex Fridman (1:07:37.520)

and then from F of X, even though you see the recipe to transform it, you cannot go back to X.

Silvio Micali (1:07:43.760)

That in my opinion is one of the most elegant and momentous notions that there are. And it is a

Silvio Micali (1:07:53.440)

computational notion because of the difficulties in a computational sense. And it's a mathematical

Silvio Micali (1:07:58.960)

notion because we were talking about function. And it's so fruitful because that is actually

Silvio Micali (1:08:05.360)

the foundation of all cryptography. And let me tell you, it's an old notion

Silvio Micali (1:08:11.600)

because very often in any mythology that we think of, the most powerful gods or goddesses are the

Silvio Micali (1:08:19.600)

ones of X and the opposite of X, the gods of love and death. And when you take opposites,

Silvio Micali (1:08:27.040)

they don't just erase one another, you create something way more powerful. And this one,

Silvio Micali (1:08:32.960)

the function is extremely powerful because essentially becomes something that is easy

Silvio Micali (1:08:40.480)

for the good guys and hard for the bad guys. So for instance, in pseudo random number generation,

Silvio Micali (1:08:49.280)

the easy part of the function corresponds, you want to generate bits very quickly. And hard is

Silvio Micali (1:08:54.880)

predicting what the next bit is. It doesn't look the same. One is X f of X going from X f of X to

Silvio Micali (1:09:02.160)

X. What does it do? Predicting bits. By a magic of reductions in mathematical apparatus, this simple

Silvio Micali (1:09:12.080)

function morphs itself into pseudo random generation. This simple function morphs itself in

Silvio Micali (1:09:18.240)

digital signature scheme in which digitally signing should be easy and forging should be

Lex Fridman (1:09:23.920)

and forging should be hard. Again, a digital signature is not going from X to f of X,

Lex Fridman (1:09:29.840)

but the magic and the richness of this notion is that it is so powerful that it morphs in all

Silvio Micali (1:09:37.440)

kinds of incredible constructs. And in both these two opposites coexist, the easy and the hard,

Lex Fridman (1:09:44.720)

and in my opinion is a very, very elegant notion. That simple notion ties together cryptography,

Lex Fridman (1:09:52.160)

and like you said, pseudo random number generation. You have work on pseudo random functions.

Lex Fridman (1:10:00.080)

What are those? What's the difference in those and the generators, the pseudo random number

Silvio Micali (1:10:08.240)

generators? How do they work? Let's go back to pseudo random number generation. First of all,

Silvio Micali (1:10:16.000)

people think that the pseudo random number generation generates a random number. Not true,

Silvio Micali (1:10:19.600)

because I don't believe that from nothing you can get something. So nothing from nothing.

Lex Fridman (1:10:29.680)

But randomness, you cannot create it out of nothing, but what you could do

Silvio Micali (1:10:35.120)

is that it can be expanded. In other words, if you give me somehow 300 random bits,

Silvio Micali (1:10:41.840)

truly random bits, then I can give you 300,000, 300 million, 300 trillions, 300 quadrillions,

Silvio Micali (1:10:48.560)

as many as you want random bits, so that even though I tell you the recipe by which I produce

Silvio Micali (1:10:55.840)

these bits, but I don't tell you the initial 300 random numbers, I keep them secret, and you see

Silvio Micali (1:11:02.320)

all the bits I produced so far, if you were to bet, given all the bits produced so far,

Lex Fridman (1:11:09.200)

what is the next bit in my sequence? Better than 50, 50. Of course, 50, 50, anybody can guess.

Lex Fridman (1:11:15.120)

But to be inferring something, you have to be a bit better. Then the effort to do this extra bit

Silvio Micali (1:11:23.200)

is so enormous that is de facto random. So that is a pseudo random generator, are these

Lex Fridman (1:11:29.360)

expanders of secret randomness, which goes extremely fast. Okay, that said, what is that?

Silvio Micali (1:11:37.200)

Expanders of secret randomness, beautifully put. Okay, so every time somebody, if you're a

Silvio Micali (1:11:43.600)

programmer, is using a function that's not called pseudo random, it's called random usually,

Silvio Micali (1:11:49.120)

you know, these programming languages, and it's generating different, that's essentially

Silvio Micali (1:11:54.320)

expanding the secret randomness. But they should. In the past, actually, most of the library,

Silvio Micali (1:12:00.480)

they used something pre modern cryptography, unfortunately. They would be better served

Silvio Micali (1:12:07.920)

with 300 real seed random number, and then expand them properly, as we know now.

Lex Fridman (1:12:18.400)

But that has been a very old idea. In fact, one of the best philosophers have debated

Lex Fridman (1:12:27.360)

whether the world was deterministic or probabilistic. Very big questions, right?

Lex Fridman (1:12:32.240)

Does God play dice?

Silvio Micali (1:12:33.520)

Exactly. Einstein says it does, it doesn't. But in fact, now we have a language that even

Silvio Micali (1:12:40.720)

at the Albert time was not around, but it was this complex theory of modern

Silvio Micali (1:12:45.280)

complexity based cryptography. And now we know that if the universe has 300 random bits,

Silvio Micali (1:12:53.040)

whether where is random or probabilistic or deterministic, it doesn't matter,

Silvio Micali (1:12:58.000)

because you can expand this initial seed of randomness forever in which all the experiments

Silvio Micali (1:13:04.560)

you could do, all the inferences you could do, all the things you could do, they are,

Silvio Micali (1:13:08.720)

you are not be able to distinguish them from truly random. So if you are not able to distinguish

Lex Fridman (1:13:14.320)

truly random from this super duper pseudo randomness, are they really different things?

Lex Fridman (1:13:22.480)

So many to become really philosophical. So for things to be different, but I don't have

Silvio Micali (1:13:27.200)

in my lifetime, in the lifetime of the universe, any method to set them aside,

Silvio Micali (1:13:32.480)

well, I should be intellectually honest, say, well, pseudo random in this special

Silvio Micali (1:13:38.480)

fraction is as good as random.

Lex Fridman (1:13:41.040)

Do you think true randomness is possible? And what does that mean?

Lex Fridman (1:13:48.160)

So practically speaking, exactly as you said, if you're being honest,

Lex Fridman (1:13:52.320)

that the pseudo randomness approaches true randomness pretty quickly.

Lex Fridman (1:13:58.800)

But is it, maybe this is a philosophical question. Is there such a thing as true randomness?

Silvio Micali (1:14:05.760)

Well, the answer is actually maybe, but if it exists, most probably it's expensive to get.

Lex Fridman (1:14:14.800)

And in any case, if I give you one of mine,

Silvio Micali (1:14:19.040)

you will never tell them apart by any other shape, no matter how much you work on it.

Lex Fridman (1:14:26.560)

So in some sense, if it exists or not, it really is a quote philosophical sense in the

Lex Fridman (1:14:33.600)

colloquial way to say that we cannot somehow pin it down.

Lex Fridman (1:14:38.240)

Do you ever, again, just to stay unphilosophical for a bit, for a brief moment,

Lex Fridman (1:14:43.360)

do you ever think about free will and whether that exists because ultimately free will sort of

Silvio Micali (1:14:52.640)

is this experience that we have, like we're making choices, even though it appears that,

Silvio Micali (1:15:00.240)

you know, the world is deterministic at the core. I mean, that's against the debate,

Lex Fridman (1:15:05.520)

but if it is in fact deterministic at the lowest possible level, at the physics level,

Lex Fridman (1:15:14.560)

how do you make, if it is deterministic, how do you make sense of the difference between the

Lex Fridman (1:15:20.240)

experience of us feeling like we're making a choice and the whole thing being deterministic?

Lex Fridman (1:15:25.200)

So first of all, let me give you a gut reaction to the question. And the gut reaction is that

Silvio Micali (1:15:30.640)

it is important that we believe that there exists free will. And second of all, almost

Silvio Micali (1:15:41.360)

by weird logic, if we believe it exists, then it does exist. Okay. So it's very important for our

Silvio Micali (1:15:48.960)

social apparatus, for our sense of ourselves that it exists. And the moment in which, you know,

Silvio Micali (1:15:55.840)

we so want to, we almost conjure it up in existence. But again, I really feel that if

Silvio Micali (1:16:02.080)

you look at some point, the space of free will seems to shrink. We realize how more and more,

Lex Fridman (1:16:11.280)

how much of our, say, genetic apparatus dictates who we are, why we prefer certain things than

Silvio Micali (1:16:17.680)

others, right, and why we react to noises of music. We really prefer poetry and everything

Silvio Micali (1:16:23.760)

else. We may explain even all this. But at the end of the day, whether it exists in a

Silvio Micali (1:16:31.040)

philosophical sense or not, it's like randomness. If pseudo random is as good as random vis a vis

Lex Fridman (1:16:38.720)

lifetime of the universe, our experience, then it doesn't really matter.

Silvio Micali (1:16:42.560)

Yeah. So, you know, we're talking about randomness. I wonder if I can weave in

Silvio Micali (1:16:48.400)

quantum mechanics for a brief moment. There's a, you know, a lot of advancements on the quantum

Silvio Micali (1:16:55.280)

computing side. So leveraging quantum mechanics to perform a new kind of computation, and there's

Silvio Micali (1:17:02.640)

concern of that being a threat to a lot of the basic assumptions that underlie cryptography.

Lex Fridman (1:17:10.000)

What do you think? Do you think quantum computing will challenge a lot of cryptography? Will

Lex Fridman (1:17:16.800)

cryptography be able to defend all those kinds of things?

Silvio Micali (1:17:20.640)

Okay, great. So first of all, for the record, and not because I think it matters, but it's

Silvio Micali (1:17:25.440)

important to set the record, there are people who continue to contend that quantum mechanics exist,

Lex Fridman (1:17:32.400)

but that's nothing to do with computing. It's not going to accelerate it, at least, you know,

Silvio Micali (1:17:37.840)

very basic, you know, hard computation. That is a belief that you cannot take it out. I'm a little

Silvio Micali (1:17:45.600)

bit more agnostic about it, but I really believe, going back to whatever I said about the one way

Silvio Micali (1:17:52.320)

function. So one way function, what is it? That is a cryptography. So does quantum computing

Silvio Micali (1:17:58.960)

challenge the one way function? Essentially, you can boil it down to does quantum computing

Silvio Micali (1:18:04.160)

challenge the one way function. What is one way function? Easy in one direction, hard in the other.

Silvio Micali (1:18:09.360)

Okay, but if quantum computing exists, when you define what it is easy, it's not easy by a classical

Silvio Micali (1:18:16.560)

computer and hard by a classical computer, but easy for a quantum computer, that's a bad idea.

Lex Fridman (1:18:22.640)

But once easy means it should be easy for a quantum and hard for also quantum. Then you can

Silvio Micali (1:18:30.720)

see that you are, yes, it's a challenge, but you have hope because you can absorb if one computing

Silvio Micali (1:18:36.720)

really realizes and becomes available according to the promises, then you can use them also for the

Silvio Micali (1:18:44.000)

easy part. And once you use it from the easy part, the choices that you have a one way function,

Silvio Micali (1:18:50.720)

they multiply. So, okay, so they particularly candidates of one way function, they not only

Silvio Micali (1:18:57.680)

candidates of one way function, they not be one way anymore, but quantum one way function may

Silvio Micali (1:19:06.080)

continue to exist. And so I really believe that for life to be meaningful, this one way function

Silvio Micali (1:19:18.480)

had to exist. Because just imagine that anything that is becomes easy to do. I mean, what kind of

Silvio Micali (1:19:28.240)

life is it? I mean, so you need that. And if something is hard, but it's so hard to generate,

Silvio Micali (1:19:35.120)

you'll never find something which is hard for you. You want to that there is abundance,

Silvio Micali (1:19:39.920)

that is easy to produce hard problem. That's my opinion is why life is interesting,

Silvio Micali (1:19:44.960)

because pop up really, really speed. So in some sense, I almost think that I do hope they exist

Silvio Micali (1:19:54.080)

if they don't exist, somehow life is way less interesting than it actually is.

Silvio Micali (1:19:59.440)

Yeah, it does. That's funny. It does seem like the one way function is fundamental to all of life,

Silvio Micali (1:20:05.920)

which is the emergence of the complexity that we see around us seem to require the one way function.

Silvio Micali (1:20:12.720)

I don't know if you play with cellular automata. That's just another formulation of.

Silvio Micali (1:20:18.960)

I know, but it's very simple.

Silvio Micali (1:20:22.000)

It's almost a very simple illustration of starting out with simple rules in one way,

Silvio Micali (1:20:29.280)

being able to generate incredible amounts of complexity. But then you ask the question,

Silvio Micali (1:20:34.080)

can I reverse that? And it's just surprising how difficult it is to reverse that. It's surprising,

Silvio Micali (1:20:44.160)

even in constrained situations, it's very difficult to prove anything that it almost,

Silvio Micali (1:20:52.240)

I mean, the sad thing about it. Well, I don't know if it's sad, but it seems like we don't

Silvio Micali (1:20:58.160)

even have the mathematical tools to reverse engineer stuff. I don't know if they exist or not,

Lex Fridman (1:21:04.960)

but in the space of cellular automata, where you start with something simple and you create

Silvio Micali (1:21:08.640)

something incredibly complex, can you take something, a small picture of that complex

Lex Fridman (1:21:14.000)

and reverse engineer? That's kind of what we're doing as scientists here. You're seeing the result

Silvio Micali (1:21:19.520)

of the complexity and you're trying to come up with some universal law that generate all of this.

Lex Fridman (1:21:24.400)

What is the theory of everything? What are the basic physics laws that generated this whole

Silvio Micali (1:21:29.280)

thing? And there's a hope that you should be able to do that, but it gets, it's difficult.

Silvio Micali (1:21:35.120)

Yeah. But there is also some poetry on the fact that it's difficult because it gives us some

Silvio Micali (1:21:40.560)

mystery to life, without which, I mean, it's not so fun. Life is no business fun.

Lex Fridman (1:21:48.000)

Can we talk about interactive proofs a little bit and zero knowledge proofs? What are those?

Lex Fridman (1:21:52.720)

What are those? How do they work?

Lex Fridman (1:21:55.200)

So interactive proof actually is a modern realization and conceptualization of something

Silvio Micali (1:22:06.560)

that we knew was true, that is easy to go to lecture. In fact, that's my motivation.

Silvio Micali (1:22:12.880)

We invented schools to go to lecture. We don't say, oh, I'm the minister of education. I published

Silvio Micali (1:22:17.520)

this book. You read it. This is book for this year, this book for this year. We spend a lot

Silvio Micali (1:22:24.880)

of our treasury in educating our kids and in person, educating, go to class, interact with

Silvio Micali (1:22:31.600)

teacher, on the blackboard and chalk on my time. Now we can have a whiteboard and presumably you're

Silvio Micali (1:22:37.920)

going to have actually this magic pens and a display instead. But the idea is that interactively

Silvio Micali (1:22:46.240)

you can convey truth much more efficiently. We knew this psychologically. It's better to

Silvio Micali (1:22:53.280)

hear an explanation than just to belabor some paper. Same thing. So interactive proofs is a

Silvio Micali (1:23:00.320)

way to do the following. Rather than doing some complicated, very long papers and possibly

Silvio Micali (1:23:06.320)

infinitely long proofs, exponentially long proofs, you say the following. If this theorem is true,

Silvio Micali (1:23:12.720)

there is a game that is associated to the theorem. If the theorem is true, this game,

Silvio Micali (1:23:19.840)

I have a winning strategy that I can win half of the time, no matter what you do.

Lex Fridman (1:23:26.640)

So then you say, well, is the theorem true? You believe me. Why should I believe you? Okay,

Silvio Micali (1:23:30.240)

let's play. If I prove that I have a strategy and I win the first time and I win the second time,

Silvio Micali (1:23:38.000)

then I lose a third time. But I win more than half of the time, or I win, say, all the time

Silvio Micali (1:23:45.440)

if the theorem is true, and at least at most half of the time if the theorem is false, you

Silvio Micali (1:23:50.080)

statistically get convinced. You can verify this quickly. And therefore, when the game typically

Silvio Micali (1:23:59.520)

is extremely fast, so you generate a miniature game in which if the theorem is true, I win all

Silvio Micali (1:24:06.480)

the time, and if the theorem is false, I can win at most half of the time. And if I win, win, win,

Silvio Micali (1:24:12.480)

win, win, win, win, win, you can deduce either the theorem is true, which most probably is my

Silvio Micali (1:24:16.640)

case of the week, or I've been very, very unlucky because it's like if I had 100 coin tosses and I

Silvio Micali (1:24:25.760)

got 100 heads. Very improbable. So that is a way. And so this transformation from the formal

Silvio Micali (1:24:33.520)

statement of a proof into a game that can be quickly played, and you can draw statistics

Lex Fridman (1:24:41.520)

how many times you win, is one of a big conquest of modern complexity theory. And in fact,

Silvio Micali (1:24:50.400)

actually has highlighted the notion of a proof as it really gives us a new insight of what to

Silvio Micali (1:24:57.040)

be true means and what truth is and what proofs are. So these are legitimately proofs. So what

Lex Fridman (1:25:05.760)

kind of mysteries can it allow us to unlock and prove? You said truth. So what does it allow us?

Lex Fridman (1:25:17.200)

What kind of truth does that allow us to arrive at? So it enlarges the realm of what is provable

Silvio Micali (1:25:24.160)

because in some sense of the classical way of proving things was extremely

Lex Fridman (1:25:31.280)

inefficient from the verifier point of view. Yes.

Silvio Micali (1:25:34.720)

Right. And so therefore, there is so much proof that you can take. But in this way,

Silvio Micali (1:25:41.680)

you can actually very quickly, in minutes, verify something that is the correctness of an assertion

Silvio Micali (1:25:49.920)

that otherwise would have taken a lifetime to belabor and check all the passages of a very,

Silvio Micali (1:25:56.720)

very, very long proof. And you better check all of them because if you don't check one line,

Silvio Micali (1:26:02.560)

an error can be in that line. And so you have to go linearly through all the stuff rather than

Silvio Micali (1:26:08.240)

bypass this. So you enlarge a tremendous amount what the proof is. And in addition,

Silvio Micali (1:26:13.920)

once you have the idea that essentially a proof system is something that

Silvio Micali (1:26:22.000)

allows me to convince you of a true statement, but does not allow me to convince you of a false

Silvio Micali (1:26:28.880)

statement, and that at the end is proof. Proof can be beautiful, should be elegant,

Lex Fridman (1:26:35.920)

but at the end is true or false. It is possible to prove the truth and it should be impossible

Silvio Micali (1:26:43.840)

or statistically extremely hard to prove something false. And if you do this, you can prove way,

Silvio Micali (1:26:49.760)

way more once you understand this. And on top of it, we got some insight like in this zero

Silvio Micali (1:26:56.720)

knowledge proofs that is in something which you took for granted where the same knowledge

Lex Fridman (1:27:04.320)

and verification are actually separate concepts. So you can verify that an assertion is correct

Silvio Micali (1:27:11.920)

without having any idea why this is so. And so people failed to say, if you want to verify

Silvio Micali (1:27:18.320)

something, you have to have the proof. Once you have the proof, you know why it's true,

Silvio Micali (1:27:22.320)

you have the proof itself. So somehow you can totally differentiate knowledge and verification

Silvio Micali (1:27:33.120)

validity. So totally, you can decide if something is true and still have no idea.

Lex Fridman (1:27:37.280)

Is there a good example in your mind?

Silvio Micali (1:27:38.880)

Oh, actually, you know, at the beginning, we labored to find the first zero knowledge proof.

Silvio Micali (1:27:47.600)

Then we found a second, then we found a third. And then a few years later, actually, we proved

Silvio Micali (1:27:53.280)

a theorem which essentially says every theorem, no matter what about, can be explained in a zero

Silvio Micali (1:28:01.760)

knowledge way. So it's not a class of theorem, but all theorems. And it's a very powerful thing. So

Silvio Micali (1:28:10.640)

we were really, for thousands of years, bought this identity between knowledge and verification

Silvio Micali (1:28:18.000)

had to be hand in hand together, and for no reason at all. I mean, we had to develop a

Silvio Micali (1:28:23.600)

way of technology. As you know, I'm very big on technology because it makes us more human

Lex Fridman (1:28:28.880)

and make us understand more things than before. And I think that's a good thing.

Lex Fridman (1:28:37.760)

So this interactive proof process, there's power in games.

Silvio Micali (1:28:43.600)

Yes.

Lex Fridman (1:28:43.840)

And you've recently gotten into, recently, I'm not sure you can correct me, mechanism design.

Silvio Micali (1:28:50.000)

Yeah.

Lex Fridman (1:28:50.240)

So first of all, maybe you can explain what mechanism design is and the fascinating

Silvio Micali (1:28:58.720)

space of playing with games and designing games.

Silvio Micali (1:29:03.200)

Mechanism design is that you want a certain behavior to arise. If you want to organize

Silvio Micali (1:29:11.680)

a societal structure or something, you want to have some orderly behavior to arise because

Silvio Micali (1:29:17.200)

it is important for your goals. But you know that people, they don't care what my goals are.

Silvio Micali (1:29:26.240)

They care about maximizing their utility. So put it crassly, making money. The more money,

Lex Fridman (1:29:32.960)

the better, so to speak. I'm exaggerating.

Silvio Micali (1:29:36.320)

Self interest in whatever way then.

Lex Fridman (1:29:39.280)

So what you want to do is, ideally, what you want to do is to design a game so that

Silvio Micali (1:29:48.640)

while people play it, so to maximize their self interest, they achieve the social goal

Lex Fridman (1:29:56.880)

and behavior that I want. That is really the best type of thing. And it is a very

Silvio Micali (1:30:03.760)

hard science and art to design these games. And it challenges us to actually come up with

Silvio Micali (1:30:18.560)

solution concepts for a way to analyzing the games that need to be broader. And I think

Silvio Micali (1:30:25.760)

game theory has developed a bunch of very compelling ways to analyze the game,

Silvio Micali (1:30:32.320)

that if the game has the best property, you can have a pretty good guarantee that it's going to

Silvio Micali (1:30:37.920)

be played in a given way. But as it turns out, and not surprisingly, these tools have a range

Silvio Micali (1:30:45.360)

of action like anything else. All these so called the technical resolution concept,

Silvio Micali (1:30:50.080)

the way to analyze the game, like dominant strategy equilibrium, if something comes to mind,

Silvio Micali (1:30:54.880)

would be very meaningful. But as a limited power, in some sense, the games that can be

Silvio Micali (1:31:03.600)

admit to such a way to be analyzed.

Silvio Micali (1:31:05.680)

There's a very specific kind of games and the rules are set, the constraints are set,

Silvio Micali (1:31:09.920)

the utilities are all set.

Silvio Micali (1:31:11.840)

Yes. So if you want to reason, if there is a way, say, that you can analyze a restricted

Lex Fridman (1:31:19.040)

class of games this way, but most games don't fall into this restricted class, then what do I do?

Silvio Micali (1:31:26.240)

When you need to enlarge a way what a rational player can do. So for instance, in my opinion,

Silvio Micali (1:31:35.280)

at least in some of my, I played with this for a few years, and I was doing some exoteric things,

Silvio Micali (1:31:44.080)

I'm sure, in the space that was not exactly mainstream. And then I changed my interest in

Silvio Micali (1:31:51.360)

blockchain. But what I'm saying for a while I was doing. So for instance, to me, is a way in which

Silvio Micali (1:31:58.000)

I design the game, and you don't have the best move for you. The best move is the move that is

Silvio Micali (1:32:04.720)

best for you, no matter what the other players are doing. Sometimes a game doesn't have that,

Silvio Micali (1:32:08.800)

okay, it's too much to ask. But I can design the game such that given the option in front of you

Silvio Micali (1:32:15.280)

say, oh, these are really stupid for me, take them aside. But these, these are not stupid.

Lex Fridman (1:32:21.200)

So if you design the game so that in any combination of non stupid things that the player

Silvio Micali (1:32:27.760)

can do, I achieve what I want, I'm done. I don't care to find the very unique equilibrium. I don't

Silvio Micali (1:32:36.320)

give a damn. I want to say, well, as long as you don't do stupid things, and nobody else does

Silvio Micali (1:32:41.360)

stupid things, good social things outcome arise, I should be equally happy. And so I really believe

Silvio Micali (1:32:48.640)

that this type of analysis is possible and has a bigger radius. So it reaches more games, more

Silvio Micali (1:33:01.360)

classes or games. And after that, we have to enlarge it again. And it's going to be, we're

Silvio Micali (1:33:07.920)

going to have fun because human behavior can be conceptualized in many ways. And it's a long game.

Silvio Micali (1:33:16.240)

It's a long game. Do you have favorite games that you're looking at now? I mean, I suppose

Silvio Micali (1:33:20.480)

your work with blockchain and Algorand is a kind of game that you're basically this mechanism

Silvio Micali (1:33:26.800)

design, design the game such that it's scalable, secure and decentralized, right? Yes. And very

Silvio Micali (1:33:34.720)

often you have to say, and you must also design so that the incentives are, and tell you the truth,

Silvio Micali (1:33:43.840)

whatever little I learned from my venture in mechanism design is that incentives are very

Silvio Micali (1:33:51.280)

hard to design because people are very complex creatures. And so somehow the way we design

Silvio Micali (1:33:59.040)

Algorand is a totally different way, essentially with no incentives, essentially. But technically

Silvio Micali (1:34:08.000)

speaking, there is a notion that is actually believable, right? So that to say people want

Silvio Micali (1:34:16.560)

to maximize their utility. Yes. Up to a point. Let me tell you. Assume that if you are honest,

Silvio Micali (1:34:25.040)

you make a hundred bucks. But if you are dishonest, no matter how dishonest you are,

Silvio Micali (1:34:30.720)

you can only make a hundred bucks and one cent. What are you going to be? I'm saying,

Silvio Micali (1:34:35.840)

you know what? Technically speaking, even that one cent, nobody bothers and say,

Lex Fridman (1:34:42.080)

how much am I going to make by honest? A hundred. If I'm devious and if I'm a criminal,

Silvio Micali (1:34:46.640)

100 bucks and one cent, you know, I might as well be honest. Okay. So that essentially is called,

Silvio Micali (1:34:51.280)

you know, Epsilon utility equilibrium, but I think it's good. And that's what we design

Silvio Micali (1:35:00.160)

essentially means that, you know, having no incentives is actually a good thing because

Silvio Micali (1:35:07.600)

prevent people from reasoning, how else are you going to gain the system? But why can we achieve

Silvio Micali (1:35:13.280)

an algorithm to have no incentives and in Bitcoin instead, you have to pay the miners because they

Silvio Micali (1:35:18.640)

do a tremendous amount of work. Because if you have to do a lot of work, then you demand to be

Silvio Micali (1:35:26.080)

paid accordingly. Because you, right? But if I'm going to say you have to add two and two equal

Silvio Micali (1:35:31.360)

to four, how much you want me to pay for this? If you don't give me this, I don't add the two

Lex Fridman (1:35:35.600)

and two. I would say you can add two and two in your sleep. You don't need to be paid to add the

Silvio Micali (1:35:40.240)

two and two. So the idea is that if we make the system so efficient, so that generating the next

Silvio Micali (1:35:46.320)

block is so damn simple, it doesn't hit the universe, let alone my computer, let alone

Silvio Micali (1:35:52.640)

take some microsecond of computation, I might as well not being received incentives for doing that

Lex Fridman (1:35:59.360)

and try to incentivize some other part of the system, but not to the main consensus,

Silvio Micali (1:36:03.680)

which is a mechanism for generating and adding block to the chain.

Silvio Micali (1:36:08.800)

Since you're Italian, Sicilian, I also heard rumors that you are a connoisseur of food.

Silvio Micali (1:36:19.280)

If I said today's the last day you get to be alive, you shouldn't have trusted me.

Silvio Micali (1:36:26.160)

You never know with a Russian whether you're going to make it out or not. Well, if you had

Silvio Micali (1:36:29.760)

one last meal, you can travel somewhere in the world. Either you make it or somebody else makes

Silvio Micali (1:36:36.240)

it. What's that going to look like? All right. If it's one last meal, I must say in this era of

Silvio Micali (1:36:44.320)

COVID, I have not been able to see my mom. My mom was a fantastic chef and had this very

Silvio Micali (1:36:56.000)

traditional food. As you know, the very traditional food are great for a reason,

Silvio Micali (1:37:00.880)

because they survived hundreds of years of culinary innovation. There is one very laborious

Silvio Micali (1:37:08.160)

thing, which is, you heard the name, which is parmigiana, but to do it is a piece of

Silvio Micali (1:37:16.160)

art. So many hours that only my mom could do it. If we have one last meal, I want a parmigiana.

Lex Fridman (1:37:22.160)

Okay. What's the laborious process? Is it the ingredients? Is it the actual process?

Lex Fridman (1:37:31.600)

Is it the atmosphere and the humans involved?

Silvio Micali (1:37:36.080)

The latter. The ingredient like in any other, in the Italian cuisine, believes in very few

Silvio Micali (1:37:45.200)

ingredients. If you take say quintessential Italian recipe, spaghetti pesto. Pesto is olive oil,

Silvio Micali (1:37:56.240)

very good extra virgin olive oil, basil, pine nuts, pepper, clove of garlic, not too much,

Silvio Micali (1:38:06.880)

otherwise you overpower everything. And then to do either two schools of thought, parmesan or pecorino

Silvio Micali (1:38:15.360)

or a mix of the two. I mentioned six ingredients. That is typical Italian. I understand that there

Silvio Micali (1:38:22.320)

are other cuisines, for instance, a French cuisine, which is extremely sophisticated

Lex Fridman (1:38:26.960)

and extremely combinatorial, or some Chinese cuisine, which has a lot of many more ingredients

Silvio Micali (1:38:33.360)

than this. And yet the art is to put them together a lot of things. In Italy is really the striving

Silvio Micali (1:38:40.000)

for simplicity, yet to find few ingredients, but the right ingredients to create something.

Lex Fridman (1:38:45.840)

So in parmigiana, the ingredients are eggplants, tomatoes, basil, but how to put them together

Lex Fridman (1:38:54.000)

and the process is an act of love, labor and love. You can spend the entire day,

Silvio Micali (1:39:04.560)

I'm not exaggerating, but the entire morning for sure to do it properly.

Silvio Micali (1:39:09.920)

Yeah, as a Japanese cuisine too, there's a mastery to the simplicity with the sushi. I don't know

Silvio Micali (1:39:14.800)

if you've seen Giorgio's of sushi, but there's a mastery to that that's propagated through the

Silvio Micali (1:39:19.280)

generations. It's fascinating. You know, people love it when I ask about books. I don't know

Silvio Micali (1:39:26.080)

if books, whether fiction, nonfiction, technical or completely non technical had an impact on your

Silvio Micali (1:39:32.960)

life throughout. If there's anything you would recommend or even just mention as something that

Silvio Micali (1:39:37.360)

gave you an insight or moved you in some way. So, okay. So I don't know if I can comment because

Silvio Micali (1:39:45.280)

in some sense you almost had to be Italian or to be such a scholar, but being Italian,

Silvio Micali (1:39:51.120)

one thing that really impressed me tremendously is the Divine Comedy. It is a medieval poem,

Silvio Micali (1:39:59.520)

a very long poem divided in three parts, hell, purgatory and paradise. Okay. And that is the

Silvio Micali (1:40:07.280)

non trivial story of a middle man gets into a crisis, personal crisis. And then out of this

Silvio Micali (1:40:19.200)

crisis he purifies, makes a catastrophe, purifies himself more and more and more until he's become

Silvio Micali (1:40:28.480)

capable of actually meeting God. Okay. And that is actually a complex story. So you have to get

Silvio Micali (1:40:35.280)

some very sophisticated language, maybe Latin at that point. We are talking about 1200s Italy,

Silvio Micali (1:40:45.920)

in Florence. And this guy instead, he chose his own dialect, not spoken outside his own immediate

Silvio Micali (1:40:52.800)

circle, a Florentine dialect. Actually, Dante really made Italian, Italian. How can you express

Silvio Micali (1:41:01.920)

such a sophisticated thing? And then the point is that these words that nobody actually knew

Silvio Micali (1:41:10.240)

because they were essentially dialect and plus a bunch of very intricate rhymes in which they had

Silvio Micali (1:41:16.080)

to rhyme with things. And it turns out that by getting meaning from the things that rhyme,

Silvio Micali (1:41:23.440)

you essentially guess what the word means and you invent Italian and you communicate

Silvio Micali (1:41:29.680)

it by almost osmosis what you want. It's a miracle of communication. In a dialect,

Silvio Micali (1:41:35.200)

a very poor language, very unsophisticated to express very sophisticated situation.

Silvio Micali (1:41:41.600)

I love it. People love it, Italians and not Italian. But what I got of it is that very often

Silvio Micali (1:41:52.080)

limitations are our strength. Because if you limit yourself at a very poor language,

Silvio Micali (1:41:58.000)

somehow you get out of it and you achieve even better form of communication using a hyper

Silvio Micali (1:42:04.080)

sophisticated literary language with lots of resonance from the prior books so that you can

Silvio Micali (1:42:08.640)

actually instantaneously quote. He couldn't quote anything because nothing was written in Italian

Silvio Micali (1:42:13.280)

before him. So I really felt that limitations are our strength. And I think that rather than

Silvio Micali (1:42:21.840)

complaining about the limitations, we should embrace them because if we embrace our limitation,

Silvio Micali (1:42:29.600)

limited as we are, we find very creative solutions that people with less limitation we have,

Silvio Micali (1:42:36.960)

we would not even think about it. So limitations are kind of superpower if you choose to see it

Silvio Micali (1:42:41.760)

that way. Since you speak both languages, is there something that's lost in translation to you? Is

Silvio Micali (1:42:49.440)

there something you can express in Italian that you can't in English and vice versa maybe? Is

Silvio Micali (1:42:55.120)

there something you could say to the musicality of the language? I mean, I've been to Italy a few

Silvio Micali (1:43:00.240)

times and I'm not sure if it's the actual words, but the people are certainly very, there's body

Silvio Micali (1:43:09.360)

language too. There's just the whole being is language. So I don't know if you miss some of that

Silvio Micali (1:43:16.720)

when you're speaking English in this country. Yes. In fact, actually, certainly I miss it.

Lex Fridman (1:43:25.360)

And somehow it was a sacrifice that I made consciously by the time I arrived. I knew that

Silvio Micali (1:43:33.040)

this, I was not going to express myself at that level. And it was actually a sacrifice because

Silvio Micali (1:43:40.720)

given to you also your mother tongue is Russian. So you know that you can be very expressive in

Silvio Micali (1:43:47.360)

your mother tongue and not very expressive in a new tongue, a new language. And then what people

Silvio Micali (1:43:53.520)

think of you in the new language, because when the precise of expression of things, it generates,

Silvio Micali (1:43:59.840)

it shows elegance or it shows knowledge or it shows as a census or it shows as a caste or

Lex Fridman (1:44:08.720)

education, whatever it is. So all of a sudden I found myself on the bottom.

Lex Fridman (1:44:14.560)

So I had to fight all my way up, back up. But what I'm saying, their limitations are actually

Silvio Micali (1:44:22.720)

our strength. In fact, it's a trick to limit yourself to exceed. And there are examples in

Silvio Micali (1:44:30.000)

history. If you think about Hernan Cortes, he goes to invade Mexico. He has what, a few hundred

Silvio Micali (1:44:38.640)

people with him and he has a hundred thousand people in arms on the other side. First thing he

Silvio Micali (1:44:44.560)

does, he limits himself. He sinks his own ship. There is no return. And at that point he actually

Silvio Micali (1:44:53.520)

manages. That's really profound. I actually, first of all, this inspiring to me, I feel like I have

Silvio Micali (1:45:01.040)

quite a few limitations, but more practically on the Russian side, I'm going to try to do a couple

Silvio Micali (1:45:07.200)

of really big and really tough interviews in Russian. Once COVID lifts a little bit, I'm

Silvio Micali (1:45:13.280)

traveling to Russia and I'll keep your advice in mind that the limitations is a kind of superpower.

Silvio Micali (1:45:21.280)

We should use it to our advantage because you do feel less, like you're not able to convey

Silvio Micali (1:45:28.480)

your wisdom in the Russian language. Cause I moved here when I was 13. So you don't,

Silvio Micali (1:45:35.920)

the parts of life you live under a certain language are the parts of life you're able

Silvio Micali (1:45:40.480)

to communicate. I became a thoughtful, deeply thoughtful human in English.

Lex Fridman (1:45:48.160)

But the pain from World War II, the music of the people that was instilled with me in Russian.

Lex Fridman (1:45:56.400)

So I can carry both of those and there's limitations in both. I can't say philosophically

Silvio Micali (1:46:01.600)

profound stuff in Russian, but I can't in English express like that melancholy feeling

Silvio Micali (1:46:08.160)

of like the people. And so combining those two, I'll somehow.

Silvio Micali (1:46:11.840)

Oh, beautifully said. Thanks for sharing. This is great. Yes. I totally understand you. Yes.

Silvio Micali (1:46:18.880)

You've accomplished some incredible things in the space of science, in the space of

Silvio Micali (1:46:26.160)

technology, in the space of theory and engineering. Do you have advice for somebody young,

Silvio Micali (1:46:33.120)

an undergraduate student, somebody in high school or anyone who just feels young

Lex Fridman (1:46:37.840)

about life or about career, about making their way in this world?

Lex Fridman (1:46:43.920)

So I was telling before that I believe in emotion and my thing is to be true to your

Silvio Micali (1:46:51.360)

own emotion. And that I think that if you do that, you're doing well because it's a life well spent

Lex Fridman (1:46:59.200)

and you are going never tire because you want to solve all these emotional knots that

Silvio Micali (1:47:05.840)

always intrigued you from the beginning. And I really believe that to live meaningfully,

Silvio Micali (1:47:13.360)

creatively, and yet to live your emotional life. So I really believe that whether you're a scientist

Silvio Micali (1:47:20.320)

or an artist even more, but a scientist, I think of them as artists as well. If you are a human

Silvio Micali (1:47:25.360)

being, so you are really to live fully your emotions and to the extent possible, sometimes

Silvio Micali (1:47:31.840)

emotions can be overbearing and my advice is try to express them with more and more confident.

Silvio Micali (1:47:39.520)

Sometimes it's hard, but you are going to be much more fulfilled than by suppressing them.

Lex Fridman (1:47:45.840)

What about love? One of the big ones. What role does that play?

Silvio Micali (1:47:50.400)

That's the bigger part of emotions. It's a scary thing. It's a lot of vulnerability that comes

Silvio Micali (1:47:58.720)

with love, but there is also so much energy and power and love in all senses and in the traditional

Silvio Micali (1:48:10.400)

sense, but also in the sense of a broader sense for humanity, this feeling, this compassion that

Silvio Micali (1:48:20.000)

makes us one with other people and the suffering of other people. All of this is very scary stuff,

Lex Fridman (1:48:28.560)

but it's really the fabric of life. Well, the sad thing is it really hurts to lose it.

Silvio Micali (1:48:38.320)

Yes, that's why the vulnerability comes with it. That's the thing about emotion is

Silvio Micali (1:48:43.840)

the up and the down and the down seems to come always with up, but the up only comes with the

Silvio Micali (1:48:51.440)

down. Let me ask you about the ultimate down, which is unfortunately we humans are mortal

Lex Fridman (1:49:02.640)

or appear to be for the most part. Do you think about your own mortality? Do you fear death?

Silvio Micali (1:49:11.200)

I hope so. Without death, there is no life. At least there is no meaningful life. Death is

Silvio Micali (1:49:19.840)

actually in some sense our ultimate motivator to live a beautiful and meaningful life. I myself

Silvio Micali (1:49:26.480)

felt as a young man that unless I got something that I wanted to do, I don't know why I got this

Silvio Micali (1:49:33.760)

idea of something to say. If I'm not able to say, I would suicide. Maybe it was a way to motivate

Silvio Micali (1:49:39.760)

myself, but you don't need to motivate it because in some sense, unfortunately, death is there.

Lex Fridman (1:49:44.720)

So you better get up and do your thing because that is the best motivation to live fully.

Lex Fridman (1:49:56.160)

Well, what do you hope your legacy is?

Silvio Micali (1:50:05.360)

You mentioned you have two kids.

Silvio Micali (1:50:06.720)

Yes. I really feel that on one side is my biological legacy and that is my two kids

Lex Fridman (1:50:21.840)

and their kids, hopefully. That is one side. The other thing is this common enterprise,

Silvio Micali (1:50:31.840)

which is society. I really feel that my legacy would be better by providing security and privacy.

Silvio Micali (1:50:42.400)

Actually, for me, it's metaphorical to say I want to give you the ability to interact more and take

Silvio Micali (1:50:48.720)

more risks and reach out more for more people as difficult and dangerous as it may seem.

Lex Fridman (1:50:55.280)

But my whole scientific work is about to guarantee privacy and give you the security

Silvio Micali (1:51:02.400)

of interaction. Not only in a transaction, like it would be a blockchain transaction, but

Silvio Micali (1:51:09.040)

that is really one of the hardcore of my emotional problems. I think that these are

Lex Fridman (1:51:17.280)

the problems I want to tackle. Ultimately, privacy and security is freedom.

Silvio Micali (1:51:22.800)

Freedom is at the core of this. It's dangerous. It's like the emotion thing,

Lex Fridman (1:51:30.400)

but ultimately, that's how we create all the beautiful things around us. Do you think there's

Silvio Micali (1:51:34.080)

meaning to it all, this life, except the urgency that death provides and us anxious

Lex Fridman (1:51:43.600)

beings create cool stuff along the way? Is there a deeper meaning? If it is, what is it?

Silvio Micali (1:51:48.800)

Well, meaning of life. Actually, there are three meanings of life.

Lex Fridman (1:51:53.760)

Great.

Silvio Micali (1:51:54.320)

That's great. One, to seek. Two, to seek. And three, to seek.

Lex Fridman (1:52:01.040)

To seek what? Or is there no answer to that?

Silvio Micali (1:52:04.640)

There's no answer to that. I really think that the journey is more important than the destination,

Silvio Micali (1:52:10.880)

whatever that be. I think that is a journey and is, in my opinion, at the end of the day,

Silvio Micali (1:52:19.840)

I must admit, meaningful in itself. We must admit that maybe whatever your destination might be,

Lex Fridman (1:52:30.240)

at the end, we may never get there, but hell was a great ride towards it.

Silvio Micali (1:52:37.920)

Well, I don't think there's a better way to end this, Silvio. Thank you for wasting your extremely

Silvio Micali (1:52:43.680)

valuable time with me today, joining on this journey of seeking something together. We found

Silvio Micali (1:52:50.240)

nothing, but it was very fun. I really enjoyed it. Thank you so much for talking to us.

Lex Fridman (1:52:54.800)

Thank you, Alex. It's been really special for me to be interviewed by you.

Silvio Micali (1:53:00.240)

Thank you for listening to this conversation with Silvio McCauley,

Lex Fridman (1:53:03.280)

and thank you to our sponsors, Athletic Greens Nutrition Drink, the Information In Depth

Silvio Micali (1:53:09.840)

Tech Journalism website, Four Sigmatic Mushroom Coffee, and BetterHelp Online Therapy. Click the

Silvio Micali (1:53:16.880)

sponsor links to get a discount and to support this podcast. And now, let me leave you with

Silvio Micali (1:53:22.240)

some words from Henry David Thoreau. Wealth is the ability to fully experience life.

Lex Fridman (1:53:28.240)

Thank you for listening, and hope to see you next time.

Silvio Micali (20:04.320)

The first one to solve it has the right to add one page to the ledger on behalf of everybody else.

Silvio Micali (20:12.240)

That now seems okay, because sometimes I solve a puzzle before you do, sometimes you solve

Silvio Micali (20:19.120)

before I do, or before somebody else solves it, it's okay.

Lex Fridman (20:22.640)

And presumably, the effort you put in is somehow correlated with how much trust

Silvio Micali (20:29.520)

you should be given to add to the ledger.

Silvio Micali (20:33.440)

Yeah, so somehow you want to make sure that you need to work because you want to prevent,

Silvio Micali (20:39.360)

you want to make sure that you get one solution every 10 minutes, say, like in a particular

Silvio Micali (20:46.080)

example of Bitcoin, so that it is very rare that two pages are added at the same time.

Silvio Micali (20:51.600)

Because if I solve a puzzle at the same time you do, it could happen that if it happens once or

Silvio Micali (20:58.560)

twice, we can survive it. But if it happens every other page is a double page, then which of the two

Silvio Micali (21:06.000)

is the real page, it becomes a problem. So that's why in Bitcoin, it is important to have a substantial

Silvio Micali (21:13.040)

amount of work so that no matter how many people try on Earth to solve a puzzle, you have one

Silvio Micali (21:19.680)

solution out of how many people are trying every 10 minutes. So that you have, you distance these

Silvio Micali (21:26.080)

pages, and you have the time to propagate through the network a solution and the page attached to

Silvio Micali (21:31.600)

it. And therefore, there is one page at a time that is added. And you say, well, why don't we

Silvio Micali (21:38.000)

do it? We have a solution. Well, first of all, a page every 10 minutes is not fast enough. It's a

Silvio Micali (21:46.160)

question of scalability. And second of all, to ensure that no matter how many people try, you

Silvio Micali (21:53.280)

get one page every 10 minutes, one solution to the riddle every 10 minutes. This means that the riddle

Silvio Micali (22:00.720)

becomes very, very hard. And to have a chance to solve it within 10 minutes, you must have such an

Silvio Micali (22:09.040)

expensive apparatus in terms of specialized computers, not one, not two, but thousands and

Silvio Micali (22:15.040)

thousands of them. And they produce tons of heat, okay? They dissipate heat like maniac. And then

Silvio Micali (22:20.320)

you have to refrigerate them too. And so then now you have air conditioning galore to add to the

Silvio Micali (22:26.400)

thing. It becomes so expensive that fewer and fewer and fewer people can actually compete in

Silvio Micali (22:33.680)

order to add to the page. And the problem becomes so crucial that in Bitcoin, depending on which

Silvio Micali (22:46.000)

day of the week you look at it, you are going to have two or three mining pools that are really

Silvio Micali (22:51.760)

the ones that are capable of controlling the chain. So you're saying that's almost like

Silvio Micali (22:58.480)

at least a centralization. Right. It started being decentralized, but the expenses became

Silvio Micali (23:07.520)

higher and higher and higher. When the cost becomes higher and higher, fewer and fewer

Silvio Micali (23:11.600)

people can afford them. And then it becomes de facto centralized, right? Yeah. And a different

Silvio Micali (23:19.760)

type of approach is instead, for instance, a delegated proof of stake, which is also

Lex Fridman (23:26.880)

very easy to explain, essentially boils down to say, well, look at these 21 people, say, okay?

Silvio Micali (23:35.600)

Don't they look honest? Yes, they do. In fact, I believe that they're going to remain honest

Silvio Micali (23:40.960)

for the foreseeable future. So why don't we do ourselves a favor? Let's entrust them

Silvio Micali (23:46.000)

to add the page on behalf of all of us to the ledger. Okay. Okay. But now we are going to say,

Silvio Micali (23:54.000)

is this centralized or decentralized? Well, 21 is better than one, but to say is very little.

Lex Fridman (23:59.840)

So if you look at when people rebelled to centralize power, I don't know, the French

Silvio Micali (24:04.720)

revolutions, okay? There was a monarch and the nobles. Were there 21 nobles? No, there were

Silvio Micali (24:11.600)

thousands of them, but there were millions and millions of disempowered citizens. So one is

Silvio Micali (24:18.240)

centralized, 21 is also centralized, right? So that's delegated proof of stake. Delegated. It's

Lex Fridman (24:23.760)

kind of like representative democracy, I guess. Yes, which is good. It's working great, right?

Silvio Micali (24:29.760)

It's working great. Well, it's better than the single monarch, right? There's problems.

Silvio Micali (24:39.440)

There are problems. And so we were looking for a different, when thinking about Algorand,

Silvio Micali (24:49.440)

for a different approach. And so we have an approach that is really, really decentralized

Silvio Micali (24:56.640)

because essentially it works as follows. You have a bunch of tokens, right? These are the tokens

Silvio Micali (25:04.560)

that have equal power. And you have say 10 billions of tokens distributed to the entire

Silvio Micali (25:12.080)

world. And the owners, each token has a chance to add the ledger, equal probability to everybody

Silvio Micali (25:21.280)

else. In fact, actually, if you want, here is how it works. So think about by some magic

Silvio Micali (25:29.760)

cryptographic process, which is not magic, it's mathematics, but think of it as magic. Assume that

Silvio Micali (25:36.240)

you select a thousand tokens and so sometimes a random, okay? And you have a guarantee that the

Silvio Micali (25:43.920)

random selected. And then the owners of these 1000 tokens somehow agree on the next page,

Silvio Micali (25:51.680)

they all sign it, and that is the next page. Okay? So it is clear that nobody has the power

Lex Fridman (25:59.680)

but in a while, one of your tokens is selected and you are in charge of this committee to select

Silvio Micali (26:09.280)

the next page. But this goes around very quickly. So, and if you look at this, the equation really

Silvio Micali (26:16.560)

is that it's not really centralized. And because for agreeing on the same page, it is important

Silvio Micali (26:23.760)

that the 1000 tokens that you randomly selected are in honest ends, the majority of them.

Lex Fridman (26:32.160)

So which, if the majority of the tokens are in honest ends, that is essentially true because

Silvio Micali (26:37.920)

if the majority of the tokens are in honest ends, if you select, say 90% of the people are,

Lex Fridman (26:46.000)

90% of the tokens are in honest ends. So can you randomly select a thousand,

Silvio Micali (26:51.040)

in this thousand you find the 501 tokens in bad ends. Very, very improbable.

Lex Fridman (26:58.160)

So basically, when a large fraction of people are honest, then you can use randomness as a powerful

Silvio Micali (27:05.680)

tool to get decentralization. So what does honesty mean? And now we're into the social

Silvio Micali (27:13.120)

side of things, which is how do we know that like the fraction, a large fraction of people

Silvio Micali (27:23.040)

or participating parties are honest? That is an excellent question. So by the way,

Silvio Micali (27:28.000)

first of all, we should realize that the same thing is for every other system. When you look

Silvio Micali (27:33.360)

at proof of work, you rely that the majority of the mining power is in honest ends. When you look

Silvio Micali (27:41.040)

at delegated proof of stake, you rely that the majority of these 21 people are honest. What is

Silvio Micali (27:47.920)

the difference? The difference is that in these other systems, you should say the whole economy

Silvio Micali (27:54.960)

is secure if the majority of this small piece of economy are honest. And that is a big question.

Lex Fridman (28:04.400)

But instead, in Algorand, in our approach, we say the whole economy is secure if the majority

Silvio Micali (28:12.960)

of the economy is honest. In other words, who can subvert Algorand is not a majority of a small

Silvio Micali (28:18.640)

group, but is a majority of the token holders had to conspire with each other in order to sink the

Silvio Micali (28:24.400)

very economy for which they own the majority of. That I think it is a bit harder to...

Silvio Micali (28:29.600)

Like a self destructive majority, essentially. And you're also making me realize that basically

Silvio Micali (28:36.800)

every system that we have in the world today assumes that the majority of participants is

Silvio Micali (28:43.520)

honest. Yes. The only difference is the majority of whom. And in some cases, the majority of a club

Lex Fridman (28:51.040)

and in our case is the majority of the whole system.

Silvio Micali (28:53.600)

The whole system. Okay. So that's... So through that kind of random sampling,

Silvio Micali (29:02.400)

you can achieve decentralization. You can achieve... So the scalability, I understand.

Lex Fridman (29:10.080)

And then the security that you're referring to, basically the security comes from the fact that

Silvio Micali (29:16.160)

the sample selected would likely include honest people. So it's very difficult to... So by the way,

Silvio Micali (29:23.120)

the security, as you mentioned, you're referring to is basically security against dishonesty,

Silvio Micali (29:31.360)

right? Or manipulation or whatever. Yes. Yes. So essentially when what you're going to do is to

Silvio Micali (29:37.280)

the following and say, well, Silvio, I understood what you're saying, but somebody has to randomly

Lex Fridman (29:42.320)

randomly selected these tokens, then I believe you. So then who does this random selection?

Silvio Micali (29:46.560)

That's a good point. And in Algorand, we do something a little bit unorthodox.

Silvio Micali (29:52.800)

Essentially is the token choose themselves at random. And you say, if you think about it,

Silvio Micali (30:00.480)

that seems to be a terrible idea. Because if you want to say, choose yourself at random,

Lex Fridman (30:05.200)

and whoever chooses himself is a thousand people committee, you choose the page for the rest of us.

Silvio Micali (30:11.360)

Mm hmm. And because if I'm a bad person, I'm going to select myself over and over again,

Silvio Micali (30:16.240)

because I want to be part of the committee every single time. But not so fast. So what do we do

Silvio Micali (30:22.640)

in Algorand? What does it mean that I select myself? That each one of us,

Silvio Micali (30:26.960)

in the privacy of our own computer, actually a laptop, what you do is that you execute your own

Silvio Micali (30:34.080)

individual lottery. And think about that you pull a lever of a slot machine, you can only pull the

Silvio Micali (30:42.480)

lever once, not until you win, not enough times until you win. And when you pull the lever, case

Silvio Micali (30:48.560)

one, either you win, in such a case, you have a winning ticket. Or you lose, you don't get any

Silvio Micali (30:54.640)

winning ticket. So if you don't have a winning ticket, you can say anything you want about the

Silvio Micali (31:00.480)

next page in the ledger, nobody pays attention. But if you ever win a ticket, people say, Oh,

Silvio Micali (31:07.760)

wow, this is one of the 1000 winning tickets, we better pay attention to what he or she says.

Lex Fridman (31:13.280)

And that's how it works. And the lottery is a cryptographic lottery, which means that even if I

Silvio Micali (31:20.400)

am an entire nation, extremely powerful, with incredible computing powers, I don't have the

Silvio Micali (31:27.040)

ability to improve even minimally my probability of one of my token winning the lottery. And

Silvio Micali (31:33.920)

that's how it happens. So everybody pulls the lever, the 1000 random winners say, Oh, here is

Silvio Micali (31:41.200)

my winning ticket. And here is my opinion up or down about the block. These are the ones that

Silvio Micali (31:46.800)

count. And if you think about it, while this is distributed, because there is, in the case of

Silvio Micali (31:53.440)

Algon, there is 10 billion tokens and you selected 1000 of them more distributed than this, you

Silvio Micali (31:59.120)

cannot get. And then why is this scalable? Because what do you have to do? Okay, you have to do the

Silvio Micali (32:06.480)

lottery. How long the lottery takes? It takes actually one microsecond. Whether you have one

Silvio Micali (32:13.280)

token or two tokens or a billion tokens is always one microsecond of computation, which is very

Lex Fridman (32:19.520)

fast. We don't hit the planet with a microsecond of computation. And finally, why is this secure?

Silvio Micali (32:27.120)

Because even if I were a very evil and very, very powerful individual, I'm so powerful that I can

Silvio Micali (32:35.600)

corrupt anybody I want instantaneously in the world, whom would I want to corrupt? The people

Silvio Micali (32:42.880)

in the committee so that I can choose the page of the ledger. But I do have a problem. I do not

Lex Fridman (32:49.360)

know whom I should corrupt. Should I corrupt this lady in Shanghai, this other guy in Paris?

Silvio Micali (32:56.400)

Because I don't know. The winners are random, so I don't know whom I should corrupt.

Lex Fridman (33:01.360)

But once the winner comes forward and says, here is my winning ticket, and you propagate

Silvio Micali (33:06.640)

your winning ticket across the network, together with your opinion about the block,

Silvio Micali (33:11.920)

now I know who they are. For sure, I can corrupt all 1000 of them given to my incredible powers.

Lex Fridman (33:18.480)

But so what? Whatever they said, they already said, and their winning tickets and their opinions

Silvio Micali (33:25.040)

are virally propagated across the network. And I do not have the power, no more than the US

Silvio Micali (33:31.200)

government or any government has the power, to put back in the bottle a message virally

Silvio Micali (33:37.120)

propagated by WikiLeaks. So everything you just described is kind of is fascinating,

Silvio Micali (33:44.560)

a set of ideas. And, you know, online I've been reading quite a bit, and people are really excited

Silvio Micali (33:50.080)

about the set of ideas. Nevertheless, it is not the dominating technology today. So Bitcoin,

Silvio Micali (33:58.560)

in terms of cryptocurrency, is the most popular cryptocurrency, and then Ethereum, and so on.

Lex Fridman (34:05.920)

So it's useful to kind of comment. We already talked about proof of work a little bit.

Lex Fridman (34:09.920)

But what, in your sense, does Bitcoin get right? And where is it lacking?

Silvio Micali (34:16.560)

Okay, so the first thing that Bitcoin got right is to understand that there was the need

Silvio Micali (34:22.800)

of a cryptocurrency. And that, in my opinion, they deserve all the success because they said

Silvio Micali (34:29.840)

the time is right for this idea. Because very often, it's not enough to be right here to be

Silvio Micali (34:34.400)

right at the right time. And somebody got it right there. So hat off to Bitcoin for that.

Lex Fridman (34:42.640)

And so what they got right is that it is hard to subvert and change the ledger, to cancel a

Silvio Micali (34:52.800)

transaction. It's not impossible. That is very hard. What they did not get right is somehow that

Silvio Micali (35:00.160)

it is a great store of value, currency wise. But money is not only a question that you store it

Lex Fridman (35:07.680)

and you put under the mattress. Money wants to be transacted. And the transaction bitcoins are very

Silvio Micali (35:13.760)

little. So if you want to store value, everybody needs a store of value. Might as well use Bitcoin.

Silvio Micali (35:19.920)

I mean, it's the plan. But if you don't look at that for a moment, at least it's a great store

Silvio Micali (35:27.360)

of value. And everybody needs a store of value. But most of the time, we want to transact. We

Silvio Micali (35:32.480)

want to interact. We don't put the money under the mattress. So we wanted to embed. They didn't get

Silvio Micali (35:38.080)

it right. That is too slow to transact. Too few transactions. There's a scalability issue.

Silvio Micali (35:45.520)

Is it possible to build stuff on top of Bitcoin that sort of fixes the scalability? I mean,

Silvio Micali (35:52.720)

this is the thing you look at. There's a bunch of technologies that kind of hit the right

Silvio Micali (36:00.240)

need at the right time and they have flaws, but we kind of build infrastructures on top of them

Lex Fridman (36:07.200)

over time to fix it as opposed to getting it right from the beginning. Or is it difficult to do?

Silvio Micali (36:14.880)

Well, that is difficult to do. So you're talking to somebody that when I decided to throw my heart

Silvio Micali (36:21.120)

in the arena and I decided, first of all, as I said before, I much admire my predecessors. I

Silvio Micali (36:27.680)

mean, they got it right, a lot of things. And I really admire for that. But I had a choice to

Silvio Micali (36:36.000)

make. Either I patch something that has holes all over the place or I start from scratch. I decided

Silvio Micali (36:41.120)

to start from scratch because sometimes it's a better way. So what about Ethereum, which looks

Silvio Micali (36:46.640)

like proof of stake and a lot of different innovative ideas that kind of improve or seek

Silvio Micali (36:52.320)

to improve on some of the flaws of Bitcoin. Ethereum made another great idea. So they

Silvio Micali (36:57.200)

figured out that money and payments are important as they are. They are only the first level, the

Silvio Micali (37:05.760)

first stepping stone. The next level are smart contracts. And they were at the vision to say

Silvio Micali (37:12.480)

the people will need smart contract, which allow me and you to somehow to transact securely without

Silvio Micali (37:20.640)

being shopped around by a trusted third party, by a mediator. By the way, because mediators are hard

Silvio Micali (37:26.080)

to find. And in fact, maybe even impossible to find if you live in Thailand and I live in New

Silvio Micali (37:32.960)

Zealand, maybe we don't have a common person that we know and trust. And even if we find them,

Silvio Micali (37:39.280)

guess what? They want to be paid. So much so that 6% of the world GDP goes into financial friction,

Silvio Micali (37:48.560)

which is essentially third party. So the head of right of the world needed that.

Lex Fridman (37:53.920)

But again, the scalability is not there. And the system of smart contracts in Ethereum is slow

Lex Fridman (38:04.400)

and expensive. And I believe that is not enough to satisfy the appetite and the need that we have

Silvio Micali (38:12.720)

for smart contracts. Well, what do you make of just as a small sort of aside in human history,

Silvio Micali (38:19.040)

perhaps it's a big one is NFT, the non fungible tokens. Do you find those interesting technically,

Silvio Micali (38:24.560)

or is it more interesting on the social side of things? Well, both. I think NFTs are actually

Silvio Micali (38:32.800)

great. So you are an artist to create a song or it could be a piece of art. He has many unique

Silvio Micali (38:46.000)

representations of a unique piece where there is an artifact of something dreamed up by you and

Silvio Micali (38:55.360)

has unique representations that now you can trade. And the important part is that now you have this

Silvio Micali (39:01.280)

is not only the NFTs themselves, but the ability to trade them quickly, fast, securely, knowing

Silvio Micali (39:11.520)

who owns which rights. And that gives a totally new opportunity for content creators to be

Silvio Micali (39:18.400)

remunerated for what they do. But ultimately, you still have to have that scalability, security

Lex Fridman (39:25.040)

and decentralization to make it, you know, to make it work for bigger and bigger applications.

Silvio Micali (39:33.680)

Correct. Yeah. Yeah. I still wonder what kind of applications are yet to be

Lex Fridman (39:38.800)

like enabled by it because so much. The interesting thing about NFTs, you know,

Silvio Micali (39:44.880)

if you look outside of art is just like money, you can start playing with different social

Silvio Micali (39:51.760)

constructs, is you can start playing with the ideas. You can start playing with even like

Silvio Micali (40:01.920)

investing. Somebody was talking about almost creating an economy out of like creative people

Silvio Micali (40:10.320)

or influencers. Like if you start a YouTube channel or something like that, you can invest

Silvio Micali (40:15.520)

in that person and you can start trading their creations. And then almost like create a market

Silvio Micali (40:22.240)

out of people's ideas, out of people's creations, out of the people themselves that generate those

Silvio Micali (40:29.440)

creations. And there's a lot of interesting possibilities of what you can do with that.

Silvio Micali (40:33.200)

I mean, it seems ridiculous, but you're basically creating a hierarchy of value, maybe artificial

Silvio Micali (40:40.880)

in the digital world and are trading that. But in so doing are inspiring people to create.

Lex Fridman (40:48.880)

So maybe as a sort of our economy gets better and better and better where actual work in the

Silvio Micali (40:55.600)

physical space becomes less and less in terms of its importance, maybe we'll completely be operating

Silvio Micali (41:01.760)

in the digital space where these kinds of economies have more and more power. And then

Silvio Micali (41:09.120)

you have to have this kind of blockchains to the scalability, security, and decentralization.

Lex Fridman (41:15.600)

And then decentralization is of course the tricky one because people in power start to get nervous.

Silvio Micali (41:23.200)

Absolutely. Once in power, you're always nervous that you'll be supplanted by somebody else.

Lex Fridman (41:29.600)

But this is your job. Congratulations, you got the job, the top job, and now everybody wants it.

Silvio Micali (41:34.880)

Well, what is your sense about our time and the future hope about the decentralization

Silvio Micali (41:42.560)

of power? Do you think that's something that we can actually achieve given that power corrupts

Lex Fridman (41:50.800)

and absolute power corrupts absolutely, and it's so wonderful to be absolutely powerful?

Lex Fridman (41:57.520)

Well, good question. So first of all, I believe that by the way, there is a

Silvio Micali (42:02.720)

complex question, Lex, and like all the rest of your questions.

Lex Fridman (42:10.720)

I'm so very sorry.

Silvio Micali (42:13.920)

It's okay. I am enjoying it. So there are two things. First of all,

Silvio Micali (42:19.360)

power has been centralized for a variety of reasons. When you want to get it, it's easier

Silvio Micali (42:24.560)

for somebody, even a single person, to grab power. But there is also some kind of a technology,

Silvio Micali (42:33.360)

lack thereof, that justified having power. Because in a society in which even communication,

Silvio Micali (42:40.480)

never mind blockchain, which is common knowledge, but even simple unilateral communication is hard,

Silvio Micali (42:46.960)

it is much easier to say, you do as I say. So there is a little bit of a technology barrier.

Lex Fridman (42:59.680)

But I think that now to get to this common knowledge, it is a totally different story.

Silvio Micali (43:04.720)

Now we have finally the technology for doing this. So that is one part. But I really believe

Silvio Micali (43:09.840)

that by having a distributed system, you have actually a much more stable and durable system.

Silvio Micali (43:19.840)

Because not only for corruption, but even for things that go astray, and given a long enough

Silvio Micali (43:24.720)

time by a strange version of Murphy's law, whatever goes wrong, goes wrong. And if the

Silvio Micali (43:33.680)

power is diffused, you actually are much more stable. If you look at any complex living being,

Silvio Micali (43:43.520)

it's distributed. I mean, I don't have somebody who says, okay, tell Silvio now it's time to eat.

Lex Fridman (43:50.560)

You have millions of cells in your body. You have billions of bacteria.

Silvio Micali (43:54.400)

Exactly. Help me in the guts. We are in a soup that somehow keeps us alive.

Lex Fridman (43:59.840)

So strange enough, however, when we design systems, we design them centralized. We ourselves

Silvio Micali (44:09.200)

are distributed beings. And when we plan to say, okay, I want to create an architecture,

Lex Fridman (44:15.760)

how about I make a pyramid, I put this on the top and the power flows down. And so again,

Silvio Micali (44:24.320)

it's a little bit perhaps of a technology problem. But now the technology is there.

Lex Fridman (44:29.200)

So that is a big challenge to rethink how we want to organize power in a very large system and

Silvio Micali (44:37.840)

distribute a system, in my opinion, much more resilient. Let's put it this way. There was

Silvio Micali (44:45.920)

Italian compatriots, Machiavelli, who looked at the time, there was a bunch of small state

Silvio Micali (44:53.680)

democratic Republic of Florence and Venice and the other thing. And there was the Ottoman Empire

Silvio Micali (44:58.560)

that at the time was an empire and the Sultan was very centralized. And he made a political

Silvio Micali (45:04.160)

observation that goes roughly to say, whenever you have such a centralized thing, it's very hard

Silvio Micali (45:09.840)

to overtake that former government is centralized. But if you get it, it's so easy to keep

Silvio Micali (45:17.840)

the population. While instead these other things are much more resilient. When the power is

Silvio Micali (45:26.400)

distributed, it's going to be lasting for a much longer time. And ultimately maybe the human spirit

Silvio Micali (45:33.280)

wants that kind of resilience, wants that kind of distribution. It's just that we didn't have

Silvio Micali (45:36.960)

technology throughout history. Machiavelli didn't have the computer, the internet.

Silvio Micali (45:43.040)

That is certainly part of a reason. Yes. You've written an interesting blog post. If we

Silvio Micali (45:48.720)

just take a step out of the realm of bits and into the realm of governance, you wrote a blog

Silvio Micali (45:56.960)

post about making Algorand governance decentralized. Can you explain what that means, the philosophy

Lex Fridman (46:03.120)

behind that? How you decentralized basically all aspects of this kind of system?

Silvio Micali (46:09.600)

Let's start with the philosophy. I really believe that nothing fixed lasts very long.

Lex Fridman (46:21.760)

So I really believe that life is about intelligent adaptation. Things change, and we have to be

Silvio Micali (46:30.240)

nimble and adjust to change. When I see a lot of a crypto project, I'm actually very proud to say

Silvio Micali (46:42.400)

it's fixed in stone. Code is law. Law is code. I verify the code. It will never change. You go,

Silvio Micali (46:50.400)

wow. When I'm saying this is a recipe to me of disaster, not immediately, but soon. Just imagine

Silvio Micali (46:56.320)

you take an ocean liner, and you want to go, I don't know, from Lisbon to New York, and you set

Silvio Micali (47:04.880)

a course, iceberg, no iceberg, tempest, no tempest. It doesn't matter. You need a teal. You need to

Silvio Micali (47:15.200)

correct. You need to adjust. By the way, you would design Algorand with the idea that the code was

Silvio Micali (47:25.920)

evolving as the needs. Of course, there is a system in which every time there is an adjustment,

Silvio Micali (47:32.880)

you must have essentially a vote that right now is orchestrated at 90% of the stake. They say,

Silvio Micali (47:39.920)

okay, we are ready. We agree on the next version, and we pick up this version. So we are able to

Silvio Micali (47:45.680)

evolve without losing too many components left and right. But I think without evolving, any system

Silvio Micali (47:51.840)

essentially becomes aesthetic and is going to shrivel and die sooner or later. That is needed.

Lex Fridman (48:01.200)

What you want to do on the blockchain, you have a perfect platform in which you can log

Silvio Micali (48:08.480)

your wishes, your votes, your things, so that you have a guarantee that whatever vote you express

Silvio Micali (48:14.080)

is actually seen by everybody else. Everybody sees really the outcome, call it a referendum,

Silvio Micali (48:20.480)

of a change. And Vete is, in my opinion, a system that wants to live long as to adapt.

Silvio Micali (48:28.640)

There is an interesting question about leaders. I've talked to Vitalik Buterin. I'll probably

Silvio Micali (48:33.040)

talk to him again soon. He's one of the leaders, maybe one of the faces of the Ethereum project.

Lex Fridman (48:40.720)

And it's interesting. You have Satoshi Nakamoto, who's the face of Bitcoin, I guess. But he's

Silvio Micali (48:47.760)

faceless. He, she, they. It does seem like in our whatever it is, maybe it's 20th century,

Silvio Micali (48:57.360)

maybe it's Machiavellian thinking, but we seek leaders. Leaders have value. Linus Torvalds,

Silvio Micali (49:04.400)

the leader of Linux, the open source development a lot. It's not that the leadership is sort of

Silvio Micali (49:14.240)

dogmatic, but it's inspiring. And it's also powerful in that through leaders, we propagate

Silvio Micali (49:24.400)

the vision. Like the vision of the project is more stable. Maybe not the details, but the vision.

Lex Fridman (49:30.640)

And so do you think there's value to, because there's a tension between decentralization

Lex Fridman (49:36.640)

and leadership, like in visionaries. What do you make of that tension?

Silvio Micali (49:41.760)

SL. Okay. So I really believe that, that's another great question. I think of it,

Silvio Micali (49:47.680)

I really believe in the power of emotions. I think the emotion are of a creative impulse

Silvio Micali (49:52.720)

of everybody else. And therefore it's very easy for a leader to be a physical person, a real

Silvio Micali (49:59.760)

being, and that interprets our emotions. And by the way, these emotions have to resonate.

Lex Fridman (50:07.040)

And what is good is that the more intimate our emotions are, the more universal they are,

Silvio Micali (50:13.200)

paradoxically. The more personal, the more everybody else somehow magically agrees and

Silvio Micali (50:19.360)

feels a bit of the same. And it's very important to have a leader in the initial phase that

Silvio Micali (50:26.480)

generates out of nothing something. That is important leadership. But then the true tested

Silvio Micali (50:31.520)

leadership is to disappear after you lead the community. So in my opinion, the quintessential

Silvio Micali (50:37.680)

leader according to my vision is George Washington. He served for one term, he served for another

Silvio Micali (50:48.000)

term, and then all of a sudden he retired and became a private citizen. And two hundred and

Silvio Micali (50:54.080)

change years later, we still are, with some defects, but we have done a lot of things right.

Lex Fridman (51:00.640)

And we have been able to evolve. That to me is success in leadership.

Silvio Micali (51:05.280)

While instead you contrast our experiment with a lot of our experiment. I've done so much so well

Lex Fridman (51:10.800)

that I want another four years. And why shouldn't I be only a four and I have another eight?

Lex Fridman (51:16.640)

Why should it be another eight? Give me 16 and I will fix all your problems. And then is the type,

Silvio Micali (51:21.920)

in my opinion, of failed leadership. Leadership ought to be really lead, ignite, and disappear.

Lex Fridman (51:29.200)

And if you don't disappear, the system is going to die with you. It is not a good idea for everybody

Silvio Micali (51:34.800)

else. So we've been talking a little bit about cryptocurrency, but is there spaces where

Silvio Micali (51:40.720)

this kind of blockchain ideas that you're describing, which I find fascinating,

Lex Fridman (51:47.040)

do you think they can revolutionize some other aspects of our world that's not just money?

Silvio Micali (51:52.320)

A lot of things are going to be revolutionized is independent of finance. By the way,

Lex Fridman (51:59.920)

I really believe that finance is an incredible form of freedom. I mean,

Silvio Micali (52:07.600)

if I'm free to do everything I want, but I don't have the means to do anything, that's a bad idea.

Lex Fridman (52:11.760)

So I really think financial freedom is very, very important. But you just can say that against

Silvio Micali (52:18.720)

you know, censorship, you write something on the chain and now nobody can take it out.

Silvio Micali (52:24.080)

That is a very important way to express our view. And then the transparency that you give,

Silvio Micali (52:35.120)

because everybody can see what's happening on the blockchain. So transparency is not money.

Lex Fridman (52:41.520)

But I believe that transparency actually is a very important ingredient also of finance. Let's put

Silvio Micali (52:49.520)

this way, as much as I'm enthusiastic about blockchain and decentralized finance, and we have

Silvio Micali (52:57.760)

actually our expression, we're creating this future five, because as much as we want to do,

Silvio Micali (53:03.280)

we must agree that the first guarantee of financial growth and prosperity are really

Silvio Micali (53:11.680)

the legal system, the courts. Because we may not think about them and say, oh, the courts

Silvio Micali (53:16.720)

are a bunch of boring lawyers. But without them, I'm saying there is no certainty. There is no

Silvio Micali (53:24.160)

notion of equality. There is no notion that you can resolve your disputes thing. That's

Lex Fridman (53:29.600)

what thrives commerce and things. And so what I really believe that the blockchain actually

Silvio Micali (53:35.040)

makes a lot of this trust essentially automatic, but make it impossible to cheat in very way. You

Silvio Micali (53:41.440)

don't even need to go to court if nobody can change the ledger. So essentially it's a way of

Silvio Micali (53:50.880)

you cannot solve an illegal system that reduces to a blockchain. But what I'm saying, a big chunk

Silvio Micali (53:55.680)

of it can actually be guaranteed. And there is no reason why technology should be antagonistic

Silvio Micali (54:03.680)

to legal scholarship. It could be actually coexisting and one should start to doing the

Silvio Micali (54:09.120)

interest things that the technology alone cannot do. And then you go from there. But I think that

Lex Fridman (54:16.160)

essentially blockchain can affect all kinds of our behavior.

Silvio Micali (54:23.920)

Yeah. So in some sense, the transparency, the required transparency ensures honesty,

Silvio Micali (54:30.400)

prevents corruption. So there's a lot of systems that could use that. And the legal system is one

Silvio Micali (54:34.320)

of them. There's a little bit of attention that I wonder if you can speak to where this kind of

Silvio Micali (54:40.880)

transparency, there's a tension with privacy. Is it possible to achieve privacy if wanted

Silvio Micali (54:49.440)

on a blockchain? Do you have ideas about different technologies that can do that? People have been

Silvio Micali (54:55.440)

playing with different ideas. So absolutely. The answer is yes. And by the way, I'm a cryptographer.

Silvio Micali (55:04.000)

Right. Okay. So I really believe in privacy and I believe in and I've devoted a big chunk of my

Silvio Micali (55:13.200)

life to guarantee privacy, even when it seems almost impossible to have it. And it is possible

Silvio Micali (55:20.320)

to have it also in the blockchain too. However, I believe in timing as well. And I believe that

Silvio Micali (55:28.560)

the people have the right to understand their system they live in. And right now people can

Silvio Micali (55:41.200)

understand the blockchain to be something that cannot be altered and is transparent. And that

Silvio Micali (55:50.560)

is good enough. And there is a pseudo privacy for the fact that who knows if this public key belongs

Silvio Micali (55:59.520)

to me or to you. And I can, when I want to change my money from one public key, I split it to other

Silvio Micali (56:05.440)

public keys, going to figure out which one is Silvio or all of them are Silvio or only one of

Silvio Micali (56:09.520)

Silvio. Who knows? So you get some vanilla privacy, not the one I could talk. And I think it's good

Silvio Micali (56:15.600)

enough because, and it's important for now that we absorb this stage. Because in the next stage,

Silvio Micali (56:21.680)

we must understand the privacy tool rather than taking on faith. When the public starts saying,

Silvio Micali (56:27.040)

I believe in the scientists and whatever they say, I swear by them. And therefore,

Silvio Micali (56:31.120)

the term is private is private and nobody understands it very well. We need a much more

Silvio Micali (56:35.520)

educated about the tools we are using. And so I look forward to deploying more and more privacy

Silvio Micali (56:44.400)

on the blockchain, but we are not, I will not rush to it until the people understand and are behind

Silvio Micali (56:53.680)

whatever we have right now. So you build privacy on top of the power of the blockchain. You have

Silvio Micali (56:59.760)

to first understand the power of the blockchain. Yes. So Algorand is like one of the most exciting,

Silvio Micali (57:06.320)

technically at least from my perspective, technologies, ideas in this whole space.

Lex Fridman (57:12.160)

What's the future of Algorand look like? Is it possible for it to dominate the world?

Silvio Micali (57:17.760)

Let's put it this way. I certainly working very hard with a great team to give the best blockchain

Silvio Micali (57:26.320)

that one can demand and enjoy. And they said, I really believe that there is going to be,

Silvio Micali (57:35.680)

it's not a winner takes them all. So it's going to be a few blockchains and each one is going to

Silvio Micali (57:42.080)

have its own brand and it's going to be great at something. And sometimes it's scalability,

Silvio Micali (57:49.600)

sometimes it's your views, sometimes it's a thing. And it's important to have a dialogue between

Silvio Micali (57:56.320)

these things. And I'm sure, and I'm working very hard to make sure that Algorand is one of them,

Lex Fridman (58:01.440)

but I don't believe that it's even desirable to have a winner takes all because we need to express

Silvio Micali (58:11.920)

different things. But the important thing is going to have enough interoperability with

Silvio Micali (58:16.400)

various systems so that you can transfer your assets where you have the best tool to service

Silvio Micali (58:23.520)

them, whatever your needs are at the time. So there's an idea, I don't know, they call

Silvio Micali (58:28.560)

themselves Bitcoin maximalists, which is essentially the bet that the philosophy that

Silvio Micali (58:36.400)

Bitcoin will eat the world. So you're talking about, it's good to have variety.

Silvio Micali (58:42.560)

Their claim is it's good to have the best technology dominate the medium of exchange,

Silvio Micali (58:50.640)

the medium of store of value, the money, the digital currency space.

Lex Fridman (58:58.160)

What's your sense of the positives and the negatives of that?

Lex Fridman (59:03.360)

So I feel people are smart and it's going to be very hard for anybody to win. And because

Silvio Micali (59:12.400)

people want more and more things. There is an Italian saying that translates well, I think.

Silvio Micali (59:20.640)

It goes, the appetite grows while eating. I think you understand what he means. So I say,

Silvio Micali (59:27.040)

I'm not hungry. Okay, food. Let me try this. So we want more and more and more. And when you find

Silvio Micali (59:33.520)

something like Bitcoin, which are already very good things to say, but it does something very

Silvio Micali (59:39.360)

well, but it's a static, I mean, store of value. Yes, I think it's a great way for the rest. You

Silvio Micali (59:47.680)

know, it would be a sad world if the world in which we are so anchoring down, so defensive

Silvio Micali (59:53.920)

that we want to store value and hide it under the mattress. I long for a world in which is open.

Silvio Micali (59:59.840)

People want to transact, interact with each other. And therefore, when you want to store value,