 Today, I want to talk to you about which blockchain is the best blockchain. Are you ready? First of all, let's ask the audience. All together, you shout out which you think is the best blockchain on three. One, two, three. Fantastic. That is what subjective experience is all about. We all have opinions, right? Opinions really don't matter. They don't. It doesn't matter if in your opinion it is the best blockchain or not. Maybe it does matter if you are a trader, trying to guess what everybody else thinks is the best blockchain. Really, it is all about perception. I am not going to tell you which is the best blockchain. I think that is a ridiculous question to even ask. It is a bit like asking, what is the best car or what is the best pair of shoes you could get? Well, it depends. It depends on what you want to achieve. It depends on what you want to do with the car or the pair of shoes. You ask one person what the best pair of shoes is, and they will tell you strong hiking boots. Great. You ask someone else what the best pair of shoes are. They are going to say Manolablanics. Have you ever tried to go hiking in Manolablanics? Have you ever tried to do a fashion show in hiking boots? Yeah, it wouldn't work so well, right? Purpose matters. The purpose you are going to use the tool for matters. The purpose determines what is the best blockchain for your purpose. The general question, what is the best blockchain, makes no sense because you have to add the purpose. You can ask the question, what is the best blockchain for my purpose? What is the best cryptocurrency for my purpose? But you can't ask what is the best, period. That makes no sense. If you start reading the marketing brochures, I am sure they will contradict what I just said. A lot of them will tell you, this blockchain does everything. It is scalable, secure, fast, smart contracts, sound money, quantum-resistant, and super-private. It uses military-grade encryption, which means 128-bit encryption. It is bullshit, which is the purpose of a marketing brochure, of course. A lot of people will tell you a lot of things about their favorite project, but you should really ask, what is the purpose? What are you trying to achieve? In architecture, there is a great term in the 80s, which is form follows function. The idea is, if you have a building, the way it looks should tell you about what it is used for. The form should follow the function. The architecture of the building should reflect what it is going to be used for. The same applies with blockchains. The architecture of the system should reflect what it is going to be used for. That is a very difficult thing to do. It is a difficult thing to do for architects and software engineers. It is a difficult thing to do for product managers, if it is a commercial system. It is even more difficult in open-source, public, and open blockchains. Quite honestly, they are the only ones I care about and think are interesting. It is difficult because there are many opinions about what a blockchain might do, or should do, or what its primary purpose is. Pick any one of the open-public projects that exist today. Ask 20 developers who are working on the project, what is this thing supposed to do? They will give you 20 different answers. It is sound money. It is digital cash. It needs big blocks. It needs small blocks. It is for smart contracts. It can do everything. What does it do for you? That is a more interesting question. You have to decide what fits the application you are trying to build. That is the question that doesn't get asked a lot. You can tell it doesn't get asked a lot, because people try to apply blockchain technology... to a whole bunch of things that don't need a blockchain. I have considered wearing a t-shirt at all the conferences I go to that say, you don't need a blockchain for that. Whenever I do a hackathon, they present applications that say, we have put digital music on the blockchain. You don't need a blockchain for that. You don't need a blockchain for that. Why do you need a blockchain for that? Just have it on a sign, and I will just pick it up every time. You don't need a blockchain for that. Why? What does blockchain do? It is not a database. It is not somewhere where you record digital signatures. You don't need a blockchain for that. It is not a content database. You certainly don't need a blockchain for that. It is not scalable or efficient. It is decentralized and very, very secure, and for the ones I care about, very robust against censorship and interference. Meaning that it keeps running even when very powerful people or organizations want to stop it from running. For that, you need a blockchain. But what kind? How would you design that? Let's talk about the engineering challenge. As an architect, when you are building these systems, you have to make choices. Some of these choices start at the very early stage. For example, do I want to build something that is very specific? Or do I want to build something that has a broad, generic purpose? Why don't we just do both? You can't do both. The things that need to be very specific have to be optimized for that one purpose. In doing so, they are no longer flexible enough to do the general purpose. The things that are general purpose don't have the unique characteristics you need for specific applications. That should be a conscious decision at the beginning. Some blockchains are designed for specific applications, and some blockchains are designed to do generic applications, and both claim they can do both. Once you have decided on that first question, you then have to make further decisions, all of which involve intractable trade-offs. Intractable trade-offs means trade-offs that I can't get both sides. I have to choose. That choice then determines the path that that blockchain will take. As a designer, as a developer, as an architect, you don't get to tell the market how they will use your product. If you try to get too specific, the market may decide that it is not suitable for what they need. If you make it generic enough, and you have one type of application in mind, the market may decide to use it for a completely different type of application. Hopefully they will. As an engineer, as a designer, you don't have the exclusive knowledge of what other people need. There is too much variety. You can't imagine what kind of things people might need in other places in the world. Under different circumstances than your own. You certainly can't do that across a broad time frame. We are building systems here that might last, should last, will last decades. What do people need today? What do people need in thirty years? Very different. The software developers who are making these very careful trade-off decisions have to consider that they are making those decisions with incomplete information. Even if they try to design something with very specific applications in mind, the market may decide to do something completely different. Back to architecture. In the 1960s and 1970s, in California, they made swimming pools in organic shapes. No longer square, they made them with curves. Have you seen those types of swimming pools? Then there was a big drought. For a couple of years, it was forbidden to fill your swimming pool because there was not enough water. Guess what happened next? Skateboarding exploded across California. Skateboarders saw those curves and thought, if I stand on the edge and I kick down, we could have some fun with this. All of the swimming pools in California that had been designed in the 60s with curves became the first skate parks. Skateboarding wasn't a big thing before then, and it mostly involved going in straight lines. That sport was transformed. Do you think the swimming pool designers could imagine that ten years after they made a swimming pool, some snotty kid would stick a board with wheels and start whizzing around because it was empty? No. Form follows function sometimes. Sometimes it doesn't. Sometimes the form follows the function the designer thought it would have. Then the market says, I have another function that fits perfectly for this type of curve. You can never know how that is going to play out. The same thing is going to happen with blockchains. Ultimately, the users decide, the markets decide. You can have all of the design ideas. Here we are arguing. Maybe we will have a panel here. There will be six very serious experts. They will say, it is really a store value. Somebody else will say, it is a medium of exchange. Somebody else will say, but it can't be a unit of account because it is not scalable enough, or it is too volatile, or whatever. Someone will say, maybe we should do more with smart contracts. They don't know what they are talking about because they don't get to decide. These are opinions, but they are not users. Users get to decide. You can make something that fits better into a store value model, or works best for smart contracts. The designers of Bitcoin and the developers of Bitcoin had some ideas about it being digital cash. For some period of time, it plays digital cash. For some period of time, it plays speculative gambling casino money. For some period of time, it plays store value, especially in countries where their currency is distressed. Which of those will it be? We don't know. It depends. It depends on a lot of factors we don't know yet about. It depends on what happens to national currencies. It depends on what happens to inflation in Europe and the US and Japan. It depends on how the world transforms. It depends on whether cash, as it exists today, will still exist in 15 years. All of these factors have nothing to do with Bitcoin. The designers of Ethereum had certain applications in mind with their smart contracts, mostly engineering applications. Did they think it would become a platform for launching 10,000 scams and pump and dumps? No, it was very good at that. A generic platform that allows flexibility to build whatever smart contract you can imagine will attract the kind of person who is going to build their beautifully engineered pump and dump scheme with a smart contract. Does that change what Ethereum does? No. It just means that that was a niche that the market decided was really hot. Why? Because a whole bunch of naive investors, and even more naive venture capitalists, were throwing as much money as possible into this new space. Two years ago, you could attach blockchain to any other word and make something that a VC would throw a couple million dollars at you. Music, blockchain. Movies, blockchain. Real estate, blockchain. Blockchain, real estate. Asparagus, blockchain. Blockchain, asparagus. Two million dollars for you, sir. That sounds fascinating. Or you could even combine it with the other cool words. You could say, we will cultivate asparagus with blockchain-based artificial intelligence autonomous flying drones. That way you could check all of the boxes, and then they'd throw tens of millions of dollars at you. None of it made sense. The market not only decides, but sometimes the market is stupid. It's crazy. It's irrational. It's driven by sentiment and emotion. Over the next decade, things will calm down. People will figure out, you don't need a blockchain for that. How will they figure that out? They'll invest their money. They'll lose their money. They'll invest their money. They'll lose their money. By the third time, most smart investors start picking up on that pattern. Some less smart investors might take them 10 or 15 rounds. The bottom line is, there is no best for every purpose. The people who are involved every day in making difficult trade-offs cannot design for a purpose... that's too specific, because that's limiting and may miss what the market wants to do, or miss the timing. They can't design for something that's too generic, because it won't have enough powerful capabilities... to solve real problems that we have. They have to make difficult trade-offs. You can't simply be scalable, decentralized, secure, and fast. You can't. In engineering terms, there are some fundamental trade-offs. We call these dilemmas, or trilemmas, sometimes. A classic trilemma is, you can't design for security, decentralization, and scalability. Pick two. In a trilemma, you can only do two of the three things at the same time. If you make something that is scalable and secure, it's not decentralized. Or it will be less decentralized. If you make something that's scalable and decentralized, it won't be as secure. If you make something that's decentralized and secure, it won't be as scalable. Then, as the blockchain will tell you, we do all three in the trilemma. What that means is they don't understand the trade-off, which is even more dangerous. There are two possibilities, a lie or ignorance. Ignorance is far worse if you don't actually understand that trilemma. It's a bit like how I used to tell my consulting clients, I can deliver the solution, it will be fast, it will be cheap, or it will be great. Pick two. I can do fast and cheap, it won't be great. I can do cheap and great, it won't be fast. And I can do fast and great, and trust me, it won't be cheap. That's the essence of a trilemma, we face these things every day in life. And we understand intuitively that life involves choices. Think of it as a journey. When you open the left door and go one way, you have chosen not to take the right road. You can never go back and take that road. All the roads that come off that are gone. You've made your choice. When dealing with trying to build the best blockchain for a specific purpose, every choice you make, whether you know it or not, closes many possibilities. Next time someone asks you, what is the best blockchain, instead of shouting out your favorite product or project, ask for what? Thank you very much. Yes? Hello. Hello. So my question is, today you were specifically talking about blockchain. Yes. I want to know what is your opinion about different kinds of distributed ledger technologies, for example, like direct data security graphs. There was some presence hiding yesterday from Hedera, for example. How probable you think it is that a newer kind of distributed ledger technology solves the blockchain dilemma and is used and is widely adopted in the future? So most distributed ledger technologies that I've seen are permission systems, or they involve federations of permissioned consensus players. From that perspective, they do not address the primary aspect of open public blockchains, which is censorship resistance. If you have known identified participants in the consensus environment, those participants can be coerced, they can collude, and they can attack the system itself. So I'm highly skeptical of distributed ledger technologies for serving the open cryptocurrency problem, for serving other problems, like if you currently have one company clearing all of the equities in a stock exchange, would it be better if instead of one you had five? Yes, that's an improvement. But that's not an improvement compared to an open public blockchain that has tens of thousands of participants in consensus. That's a massive degradation. So if you go from the 1970s banking system that is centralized down to a point of one, and you have the massive amount of corruption and front-running and all of the other transparency problems you have in these markets going from one to five, or from one to a hundred, that's an improvement. But those don't solve censorship issues. No one is censoring the rich, right? That's not really a problem. They can work around censorship. There's no censorship problem in those markets, and it can solve problems in those markets, primarily around corruption and transparency, but I'm not interested in that. That's not the area I'm interested in.