 I live in Colorado. So this is one of my first conferences for cryptocurrency in Colorado. I got to drive to the conference instead of fly. How's that? All right. All right. Thank you all for coming. I really do appreciate it. I didn't actually prepare a presentation, because I've been traveling extensively. And I always said, oh, I'm going to write this incredible presentation. And it's going to be just mind-blowingly amazing. But then I was in Switzerland. And then I was in Connecticut. And then I was in New York. And I actually just got in from New York yesterday. So I said, all right, well, let's do it extemporaneously. Let's just talk about where we came from and where we're going to go as a space. Because I've been in this space for a long time. We have Roger and Eric here and a few other guys. And we're all old enough in this space to remember when Bitcoin was under a dollar. And when you talked about Bitcoin, people said that thing you buy drugs with. And now we have ICOs and news and all this other stuff going on. So it's been an amazing ride. And it's been a heck of a lot of fun. I really enjoyed it. So where did we come from? And what's this all about? And where are we going? So we didn't start in 2008 or 2009 with Satoshi Nakamoto's white paper. The reality is the idea of money that lives on the internet started much, much longer a goal. It started in the 80s. See, the internet was all about moving information anywhere instantaneously. So we tend to build society around repositories of information. So you have libraries and institutions like universities and so forth. And that's where we'd all aggregate. So whoever lived close to that had an advantage over everybody else. Then the internet comes out. And you can move information anywhere instantaneously and it costs nothing. So as soon as that occurred and people got it conceptually, the cypherpunk movement said, wait a minute. Why can't we move money the exact same way? Why can't money be completely decentralized? So like all good scientists, like all good people who like thought experiments, what did they do? They started inventing things. So back in the 1980s, we had guys like David Chom and Hal Finney and others who said, how about we create digital money? The problem with digital money is you need a ledger, a database. You need something to store who owns what where. So it's entirely possible to allow the money to move anywhere. But just like kind of like email where emails have to live on a server, that ledger has to live somewhere. So the first attempts to create money online were things like DigiCash and so forth. And they had this idea of a token and the token could move anywhere, but they required somebody to run it. Now here's the problem with private money. Historically, it doesn't work out so well. Usually, governments shut them down and if they don't, the people running the private money, Rothschild's on back, what do they tend to do? They shut it down or corrupt it. They do something bad with it. So the idea of digital money never quite worked out the way. Then we had a second wave of people, the PayPal generation, the Peter Teals of the world and the Eagle people of the world who said, all right, well maybe we can do this. And they worked really, really, really, really hard. And they pushed really, really hard. They were able to create some great companies. But again, these were centralized. The core innovation that Bitcoin brought is not the money part, the digital money part, but it was this concept of constructing a ledger that was decentralized and somehow secure. So even if Alice and Bob hate the system and they want to destroy it, they don't really have the ability to do that unless they get a whole lot of people involved in that process. And eventually there's too many people involved and the whole thing falls through. So that was kind of the concept. But then the first question you have to ask is, well, why is this worth anything? You create these tokens, they're not backed by gold, they're not backed by anything. I was a big member of the Libertarian movement. There's probably more than one gold bug in here, show of hands. Yeah, all right. And we always said, hey, only gold and silver is real money, right? Because it scares and you can't manipulate it. Well, what backs Bitcoin? Nothing, except for social consensus. And little by little, we got that consensus. Little by little, it started being worth something. Originally we traded Bitcoins on spreadsheets, not exchanges, but spreadsheets. And you'd buy 10,000 of them for $5 or something like that. It was a pretty interesting time. And if you lost a few hundreds, say, ah, it's only a few hundred Bitcoin, who cares, right? Then eventually things started getting a bit more formalized and the movement started growing and growing and growing and then slowly but surely, we ended up having this beautiful currency. When I professionally entered the Bitcoin space though in 2013, the big problem we had was that we came up against a wall of capabilities where people said, wow, it is so cool that we have this protocol to move money anywhere. And this decentralized database that people can't corrupt. But I want to issue my own currency. I want to have an escrow contract. I want to do all these crazy multi-fig things to map onto my business domain. So how do you do that in a system that's blind, deaf, and dumb that you can't change the protocol of easily? It's really, really hard. So you had all these people that had color coins and master coin and alt coins come out and they tried to add a little bit more functionality through enormous pain. It was like putting nails in your hand. So we said, well, maybe there's another generation that we can do. Maybe there's some way where we can give people a programming language that can run on a blockchain and you could build whatever application you want. It's a pretty insane idea. But you know, we said, shoot, let's go for it. What was the historical analogy? It's more like the internet. The internet started with TCPIP, gave us a protocol to move data anywhere in the world. But it wasn't accessible for everyday people. You needed the web browser. And what happened to the web browser? It got a programming language. It got JavaScript. And then you could build Facebook and then you could build Gmail and then you could build all these great, beautiful applications. So analogously, what if we give a programming language to a blockchain? Then the world can build whatever financial applications they happen to want. This was the core thesis of Ethereum. And it's not something we came up with, like all great artists we steal. Vitalik and others, we took it from Nick Szabo. In 1998, he wrote this lovely paper, basically introducing the idea of the smart contract and saying that law will be automated. Contracts will be automated. We can actually enshrine them in code with a bunch of nuances about what has to still be done by people and what can be done in an automated capacity. So we had no idea how to do this. Circular learner had some ideas and other people did and we just gave it a shot. And Ethereum turned out to be one of the most successful open source projects of all time. So that's where we came from. We came from the internet, which gave us the idea that maybe we should have money move just as quickly. And then we realized that we want our money to do interesting things, not just move it between Alice and Bob. There's always a story behind that. And how about we decentralize that story so we don't have to trust just one person? Okay, but where are we going now? So after the web browser was invented, did the internet end? No, people had to build the Amazons and the Facebooks and the Ebays and all the great businesses, right? So what are the Amazons and the Facebooks and the Ebays of the cryptocurrency space? Where are we going with that? And that's kind of the core thesis of this talk is where do I feel things are going? So because people like a taxonomy, they like some sort of labeling systems, let's call Bitcoin generation one. And everything that came before that generation zero, kind of the proto Bitcoin stuff. Okay, then Ethereum is generation two. So Bitcoin was all about, let's move value between Alice and Bob. And Ethereum's all about, well, that value has a story behind it and let's program that value up into a story. The problem that we're having though is now governance and interoperability and scalability. Now we have something that's useful. We have something that potentially millions of people could indeed build businesses around. But the problem is that if you look at the total available resources that Ethereum has as advanced as it is, it will not scale to millions of users, much more billions of users. So generation three is all about asking questions of, how do you get these systems to talk to the old legacy systems that still have trillions of dollars of value available to them? How do you get these systems to scale so that when you add a user to the system it gains more resources like Bitcoin? And then it's also about the meta topic and it's something that's caused Roger and a lot of other people, a lot of heartache, which is governance. When you're a centralized entity, like your Google or your Facebook and somebody wants to change something, there's a hierarchy. There's eventually a guy or a gal at the top or a committee that says once they decide it's done, it's by fiat, they go and do it. Pretty easy, right? But how do you actually change the code, update the protocol, add more features and functionality, increase the block size, give yourself a richer transaction language when no one is in charge? Earlier today we had Roger's presentation about this island and it's a tremendously complex project but I think the hardest part of that project can end up being how do we all get along? Because we don't all get along. We have very strong differences of opinion. We come from different backgrounds. We have different religions. We have different incentives. If a person is making money off of your misfortune, you're probably not gonna just be able to go up to that person and say, I know your livelihood depends on this but can you please change for my benefit? You need a stick for that, right? So what's the stick there? And this is actually the crux of third generation cryptocurrency technology, where we're going. There's a lot of projects that are thinking about this now. It's about how do you pay for stuff? Like for example, who is paying for developing Bitcoin? It's a good question. Is it the companies? Is it the governments? Is it universities living off the NSF? It's a little bit of everything. Volunteers. So what happens when one person starts paying 85%, 90%, 95% of all of the development fees? How much control does that person have over the roadmap and where things are going to go? If your job depends on that one person, what does that mean for you and your principles? You know, as Andrew DePolitano mentioned, you have all these people like James Madison who come on in and they have great principles but then they're in charge of things and suddenly they change. Similarly, when people pay you, when people have financial control and influence over you, maybe you start making decisions a little differently. So that's a problem for cryptocurrencies because somebody has to be around to write the code. Somebody has to be around to vet the code. And what incentives do they have to do a good job? It's one of our big issues, right? So there's been some ideas like Dash, for example, was one of the first innovators here and what did they do? They created a treasury. They said, gosh, you know, we're paying all these miners to maintain the system. It's almost like a tax. Why don't we take a little bit off the top, the inflation that's created to pay the miners? And let's put it into a decentralized bank account, basically. And let's let anybody in the whole wide world send a ballot to that treasury. And if a person improves it, if the stakeholders, the owners of the token improve it, the ballot will actually pay them automatically. Well, guess what, they implemented it and now I think they have $20, $30 million a year to pay people building the protocol from the blockchain itself, not from a bank, not from a private entity, not from a government. So that's one side of it, the sustainability side. Can we build treasuries? Can we build financial systems that actually give people the funding that they need to work on these things? Furthermore, give people need the funding to market these things, to build their businesses on things, to migrate existing businesses to these things. The other side of it is, as I mentioned earlier, is this notion of soft forks and hard forks, changing things. What if I wake up and I direct my whole company and all our scientists to start working on quantum-resistant signature schemes? Because, you know, a quantum computer is gonna come out in 10 years and Shor's algorithm is gonna go ahead and end us all, because we're vulnerable to it. Great! I can get all this great research done, go to crypto 17 or Eurocrypt or ACNS, wherever and show off my cool new signature and we've done all that hard work and now I have this beautiful code that's written and I'm ready to go. So then who do I exactly go to, to put it into Bitcoin or to Ethereum or to any other cryptocurrency? I can go to Reddit. Anybody been to Reddit and had arguments and debates on Reddit? Was that fun? No. Okay, well, we know where you come from. All right, what about Bitcoin Talk? Anybody there? Anybody have fun on that? Okay, I don't know. Like, what is the canonical place that one goes to resolve these types of issues? Well, we don't have one. That's one of the biggest concerns, actually. It's a big metaproblem. It's why it's been so hard to upgrade Bitcoin in a certain respect. You have incredibly brilliant people who have damn near unlimited financial resources and great networks at their disposal who have come up with proposals for how do we scale Bitcoin? And they're really, really at a deadlock. So much so, there's now another Bitcoin version called Bitcoin Cash. They couldn't agree. It went down to the wire and it's split into two completely different cryptocurrencies. Similarly with Ethereum, we had some debates about something. I disagreed with the Dow bailout. And guess what? There's Ethereum Classic now and Ethereum. By the way, Coca-Cola Classic's better than New Coke, right? By ETC. So anyway, that's one of the biggest issues is you need to have some sort of mechanism to decide how do we change things once people propose it? That quantum immune signature scheme, I'll go ahead and propose it, Bitcoin Improvement Proposal or Ethereum Improvement Proposal. You need a system to allow you to do that. So the third generation about cryptocurrencies, the things that are coming, the ones that are really gonna be valuable, the ones that are really gonna change things that allow us to grow and actually allow these things to get enough users where they can start influencing law and governments and central banks. Those require governance. Those require scalability. Those require interoperability. The final thing we'll talk about. What is interoperability? So let's say he's Bitcoin and these two guys here are Ethereum. The problem with Bitcoin is it's blind, deaf and dumb. It doesn't know there's a whole world outside of it. It just thinks that Bitcoin is the only thing that exists. Even clones of Bitcoin like Litecoin where very little things have been changed. They can't talk to each other by design. Ethereum's a little bit better because you have programmability. So you can kind of write a smart contract up and you can build a relay or something like that, but they're very expensive to run. So you need some accommodation for identity and metadata and accommodation for relays and other standards that will allow these blockchain systems to talk to each other. Because at the end of the day, we're gonna end up having thousands of them. Some of them are gonna be private permission systems running between the banks. Some of them are gonna be completely open ledgers like Ethereum. Some of them are gonna be like semi-public, semi-private like Ripple, for example. And every single one of them has value and stories locked up in them. And interoperability is incredibly important. Or else you have two parallel financial systems that war with each other. One of which doesn't really do much for the other. So I think that's where we're gonna go. Now, what research is being done? One of the advantages I have running my company, and this is my third company. I originally started Ethereum with Vitalik and before that Invictus Innovations with Dan Larimer and we did BitShares. With IOHK, we're a research company. We have three research centers. One at Tokyo Tech, love Japan. One at University of Edinburgh, love Scotland. And Greece is awesome, one at University of Athens. We have a bunch of scientists. So we have the luxury of actually looking into the tech and the science and getting a sense of what's real, what's not real, what's possible, what's not possible. And the good news is that I think within three to five years, almost all of these problems can actually be rigorously solved. The reality is we've already figured out how to scale to billions of users. I assume everybody here has either a Twitter profile, LinkedIn profile, or a Facebook page. Well, guess what? They figured out how to scale. And we can do the same thing. We just have to make some adjustments because the trust model is different. Similarly, the network protocols have to be completely overhauled and refined and how we store data and even the architecture of a blockchain itself probably has to be changed. But again, all these things can be solved. What can't be solved in a lab is the social stuff. And that's actually the really exciting thing is how do we actually get people to coordinate? How do we actually get consent? Like voting, for example. How many people here voted for the current president we have? How many people here voted for another candidate? How many people here wish we had more than the choices we had in 2016? Right, so it's not who you voted for, right? It's who's on the ballot and how does the person get to be on the ballot? So similarly, maybe I can get my quantum immune signature scheme on the ballot, but maybe he can't, even though his is better. So you don't even get to pick. You don't even get to choose. So who gets to vote? How do you get things on the ballot? The ordering, whether it's Condorcet or Borda or a linear preference ordering style system or a plurality system, all of these things are deeply interesting and really matter. But the most exciting thing about cryptocurrencies is this is like societal evolution, Darwinianism in real time. It's so fast. When we first started, we were talking about how do we issue an asset? Now we're talking about how do we buy islands and build our own governments? It's been five years. Think about how quick that is. And there's actually some legitimacy here because we can build our own money. We can make our own laws. We can do our own things. So that's why I'm in the space. That's why I started Input Output and this is why we do what we do. We're taking care of the science side, but you guys, the entrepreneurs are gonna have to figure out about the social side and propose a lot of different systems of ways to govern things. And the good news is you now have a set of tools that nobody in human history has ever had before. Everybody in the planet has access to the same information. Everybody in the planet has access to the same units of value and the same marketplaces. That's never happened before. So anyway, thank you so much for your time and I'll be glad to take any questions that all you guys have. Do you wanna come up to the mic or? Okay, for Ethereum Classic? Yeah, so the question was, so first off there's a token called ERC20 on Ethereum. So these guys wanna issue their new token, let's call it FooCoin and it's the best coin ever. Basically the way you do that on Ethereum is to use a standard called ERC20. In the Ethereum Classic community, we noticed that there were some minor problems with the ERC20 that we created a different standard called ERC223. They're equivalent to each other. I think ERC223 is a super set and I have no problem with it being a standard, but it's ruled in a centralized way. So that's one of the things we're gonna talk about in Hong Kong in November. Okay, that'll be fun. What happens in Hong Kong in November? Oh, there's an Ethereum Classic big event. All the developers are coming together and so forth and we're gonna talk about the future of Ethereum Classic and the roadmap and standards and things like that. I don't know, I mean I would be in favor of a standard. To be honest, we have to change the entire virtual machine. So we did with University of Illinois around a champagne, a project to formalize the EVM using something called K and we were able to write this really dense white paper that showed that the spec that Ethereum currently has isn't so good and there needs to be considerable improvements to the EVM. Once that's done, it makes more sense than to create a token standard because the token standard would be a consumer of the underlying infrastructure and if we make the infrastructure better, we may be able to create a better meta-token. Next question. All right, you first. Please talk more about the ETC developers. So I'm a Solidity developer myself. Okay. I didn't go with ETC at all. I'm still bothered that they still have language up on the Ethereum.org. So how do you like Solidity? Do you like your tooling? Oh yes, wonderful, yes. I'm gonna go with it. But I would love to look at ETC. But I don't know anything about the Q and A. So my company has a research team and a development team. It's called the Mantis team. We built 100% new code Scala Client, which will be released here in November. So it's on par with Parity or Geff. We have six full-time Scala developers who developed that. And there's two other teams, the Ethereum Commonwealth team and then there's the ETC Dev team, which was the original team that actually precipitated the fork and most of them are volunteers. And so one of the things we're gonna talk about in November is formalizing things, getting some permanent funding for people and also what is the vision in the roadmap. Like for example, Metropolis has just come out, so we have to make a move to that. The other thing is that Proof of Stake is coming with Casper, but the community is very keen to stay with Proof of, excuse me, Proof of Stake is coming with Casper. The community is very keen to move to, stay on Proof of Work. But for it to do that, we need a scalability roadmap for it. So the developers are quite good because some of them work for me. I'm not gonna complain about them, but it's early days. You know, there's probably another six months to a year to really build a strong identity. And at that point there'll be rapid divergence between the two platforms. As for programming languages, one of our hopes with Gregori's work over at University of Illinois is to give you the ability to write smart contracts in the languages you've come to know and love, such as Java C, JavaScript and so forth. To me is a little crazy to say, hey, there's this whole new platform, throw away everything you've ever learned and learn this new thing for an unstable language with bad infrastructure that's really hard to debug. And oh, by the way, code is law, so if you make a mistake, you're brutally punished by Old Testament gods. Lots of laws, no mercy. So instead, what I'd like to do is say, hey, how about we formalize something with K? And then any language we've actually written in K, we can use a technique called semantics-based compilation. And it'll allow us to auto-build the compiler from that to the EVM. So we've already have committee semantics for Java, JavaScript and C. And actually a language we created, functional programming language called Plutus, specifically for smart contract development. So once we have the SBC stuff done, you can just write smart contracts in those languages and they run on the infrastructure. That's our hope. And then to add new language support, you just write the semantics in K which takes about two to four weeks. So our hope is we can have a huge, huge supply of languages that developers can use and they're not forced to use bamboo or viper or solidity or all these other things. Now it is a natural question to ask about SDKs and syntactic sugar and other things to make it a little easier to run the smart contract. But there's also a lot of open questions about resource awareness and static analysis and dynamic analysis and so forth. Those are all academic questions that never were actually rigorously stated when we created Ethereum. So that's one of the deficits we're trying to make up with teams at Carnegie Mellon and University of Illinois and so forth. Do you have a particular question or? Is the conference open to Ethereum? Yeah, anybody can come. It's an open conference. We're not aggression people here. If you show up, you can do whatever you want. Just keep your shirt on. Yes, in the back, what's going on in the state level? So when cryptocurrencies first came out, they were novelty and a curiosity but nobody really paid any attention to them. It's like who the heck cares what all these pasty white nerds do in their mom's basement. Now we have things like capital controls which are actively being evaded in Ukraine and in China and in other countries where this matters a lot. A friend of mine runs an exchange in China and he told me the horse story of what recently happened there. So after China started getting very aggressive on things, he got a call up and said, you will show up on Tuesday to this office building. He said, okay, you ever get a call like that or a government official calls you and says coming on Tuesday, not could you come in on Tuesday? That's the difference between China and Japan. So he shows up and there's this U-shaped table and there's all these Chinese bureaucrats at the table and they just start yelling at them for 45 minutes to stabilizing the peace, destroying cultural harmony. And at the end of all of it, they said, on Friday, come back with a plan to shut your exchange down. No debate, no questions. And he said, where is all this coming from? And they said, it's not us, it's Beijing. And they implied heavily that it had to do with capital controls as well as the leadership conference. So we are seeing more authoritarian governments or governments that really like control over money, taking a second look at these things and saying, well, maybe they aren't such a good idea to run after all and we want to control them through some sort of back channel. Problem with this technology is it's extremely difficult to control. So the minute that people actually get these nos, they get these things in their mind, they get incredibly creative with ways to evade things. But nonetheless, we see a lot of crackdown coming from a crackdown against ICOs saying, hey, these things are securities to crackdown against the free trade of these things, to crackdown against operational components. Like there's a big open question of what's gonna happen to the mining pools in China. If the Chinese government's now anti-Bitcoin, a very substantial part of the mining capacity is in China. And it's not like you can just grab your miner and run. These things are warehouses, they're huge. So they require some sort of buy-in from the local government. So the short answer is I actually don't know what's gonna happen in a global sense, but I can speculate that what we're gonna see is a transition where more laissez-faire libertarianist governments like Switzerland will continue to embrace and reap enormous financial benefits as a result. More ossified countries like the UK and the United States will doggedly hold on to regulation for a bit until they're forced to throw in the towel as they did with the internet. And authoritarian countries like Russia and China and other words will try to find a niche where they can control it. And how they can control it and where and how the cronies can make money, it will be very legal. And where they can't control it, a lot of people will go to prison. Does that kinda answer your question, Max, or do you want me? That's a very good, yeah, if it happened, yeah, of course, Bitcoin would probably have a 10 or 100X minimum. As with all things, central banks have a diversified monetary policy and it depends upon the particular central bank and its role geopolitically. I believe that there's actually some Caribbean central banks that have already considered or have used cryptocurrencies as a part of their portfolio. Gabe Abed would know more about that. But then in terms of the Federal Reserve system, they tend to be a little bit more conservative, but it's not outside the realm of possibility. The US government also still does own some Bitcoin, usually because they seize them from people and that's how they end up getting them. Good old civil asset forfeiture, right? Or these things. But it brings up a broader question of, okay, is Bitcoin the standard to go with or maybe do you go with a portfolio or maybe they just create their own asset like this notion of a banker coin where the central banks create a settlement unit and that becomes the reserve. I actually don't know. Frankly, I don't think the central banks themselves know. If you talk to a lot of the local central bank guys because the Federal Reserve's a little bit decentralized, the ones outside of DC and New York, they're actually very pro-competing private currencies because they've always tended to be a bit more libertarian and conservative. The ones who are like in with the banks, they think these things are competitive threats and not so good. So they historically say, no, no, no, we want nothing to do with this. We should have already shut this down. Why the hell are we doing it? Jamie Dimon's comments don't exist in a bubble. They're just a reflection of the environment that those people tend to live into. The last point is actually this notion of an internet of value, this idea of the liquification of value. So I was recently in Europe, I went to many different countries. I never actually bought any local currency. I didn't use any paper money. I used my credit card. So what if on your phone, you can have this idea of a universal wallet and anything you own, whether it be gold, silver, dollars, euros, what have you, it becomes a token in some capacity and you can store all of them as you store Bitcoin on your phone. And what if there's a whole network of decentralized market makers floating all around? So what does that mean? It means that you can move at any time to one portfolio to another portfolio. So you can live in Ukraine but have dollar-based assets and gold-based assets. You can live in Russia, have real estate in South America, some of your primary money. And here's where it gets really cool. Because this is all decentralized and because we have decentralized market making, when you go to Starbucks to buy something, you can have your token that represents real estate in Argentina and you can be in the UK and pay them in pounds sterling. They didn't know they accepted that. Just like when I pay with my card, they get paid in euros or Swiss francs or dollars or these types of things. So if we're capable of living in a world like that, we have to actually start asking, why does the central bank matter? Because at any time, I can just create any portfolio I want on my phone and there's this huge global financial web that can move anything to anything. So I don't really have to care what's going on with the dollar. It doesn't matter to me, it's as consequential as what's going on with the drachma. By the way, it doesn't exist anymore. Question in the back. The first question is what is a cryptocurrency? There's a lot of ideas on it, but we didn't exactly get from God golden tablets that told us the 10 commandments of cryptocurrency. So the challenge is not only developing standards and there's actually been some attempts, like the IETF has some people thinking about it. The W3C has the interledger committee and the web payments committee. So there actually are some real legitimate standards, efforts that are occurring, but the bigger concern is, what is a cryptocurrency in general? What properties does it have? What properties doesn't it have? And how do you formalize that in a way that we can understand and actually iterate on top of? So there are some projects that are actually trying to solve this problem in a very abstract way. There's a project called Tesos. They recently raised about over $200 million. And what Arthur is doing is he's created a formal language that a machine can understand that he can actually define a consensus protocol and a transaction language and your network stack in a way that a computer can understand and create a mechanism to change it to a new configuration. Now, if that work is sufficiently abstracted and that work is sufficiently good, meaning it's at bedrock, then that can become the foundation upon which all of these things can live and then you would be able to actually create standards and standards pass towards particular different things. There also is an important thing to distinguish between private infrastructure and public infrastructure. So private infrastructure like IBM Fabric or Bletchley or what R3-SEV is doing and so forth, this is all about, I have a group of enterprises or an enterprise that's large with many departments and we have coordination and synchronization problems where we can't agree on a common ledger for something like settlement. So let's create something that's not in anyone's control that allows us to vastly reduce settlement times or other problems between our databases and systems. What in the world does that have to do with Bitcoin or Ethereum? In some respects, there's some technological synergies there that are valuable, but in other respects, that's a closed trusted system that defeats the entire point of what cryptocurrencies are about. So we're probably gonna see enterprise standards form differently like with the Ethereum Enterprise Alliance and others from cryptocurrency standards. And we haven't quite yet seen a cryptocurrency standards body materialize. Now IOHK because we love formal languages and we're all Haskell developers and we do high assurance code. We actually are thinking about how one would model a both a smart contract as well as a full on cryptocurrency protocol. And we've even written a paper called an ontology of smart contracts where we try to abstract it to its bedrock. But it turns out to be a devilishly hard problem and it's something that we really enjoy thinking about. Sure. Okay, real quickly and then these guys down here. Well, everybody who's ever had a problem with mining in Bitcoin now gets to say ha ha and we move on. Bitcoin is the most resilient thing I've ever seen in the world. Bitcoin was a person. Bitcoin could go on a grand theft auto style ride to the city, killing people and setting buildings on fire and the price would go up. I've never seen anything like it in my life. It's like China bans Bitcoin. It's like we're really serious this time and this is one of the biggest trading markets and it goes down $1,000. And then I get a call from Bloomberg and they say, what do you think about this? And I said, guys, don't talk to me for three days. Call me back. And three days later it's back up at $4,000 and they never called me back for some reason. But no, I mean, this is the reality of things. So if the mining pools get hammered or hit, what's gonna end up happening is we'll change the algorithm or we'll see a relocation of mining hardware to different countries that are a bit more stable. Being very pro-America, maybe they can come to the United States and that'd be great and we can work something out there. But the point is that Bitcoin will live on. Either the consensus algorithm will have to change, maybe go back to a GPU standard. Maybe it'll go to some sort of hybrid algorithm like we have one called Twins Coins that we'd be happy for them to use or maybe even proof of stake. Or we'll just see a relocation of the hardware with a temporary drop of hash rate. If the hash rate drops by 60%, we're at Bitcoin last year. Was Bitcoin last year secure and work? Yeah, okay. So it's an event and Bitcoin is very good at surviving events. Somebody here had a question? Yes. I see a government given this question on it seems that that is a threat is the power, right? Right. So that's controlled by some sort of currency and one of the reasons people went to Iraq was to keep them going off of the dollar standard. And Libya and Syria? Yeah, Libya and Syria. So this is a question, and then there's something like a comprehensive body. So my question is, is there a way that you see to play nice with this other force that wants that control and what does that scenario look like? People who have the power to kill you and throw you in prison seldom make deals. When you have all the leverage and all the control, why would you in any way shape or form want to give some of it up? Cryptocurrencies are a continuation of a longstanding philosophy born out of the internet called the cypherpunk movement which says we should be self sovereign. We should be in control of our own destiny and our own money and our own power. And the reality is the tighter the government gets, the more they seize people's assets and the more people they throw in jail, the better our technology will get. We have a great micro example of this already. History, it doesn't repeat it rhymes. So what was the prior lyric? Well, it was Napster. So you have these people say, wow, we can now share information anywhere on the internet. So they created centralized servers to do this. And the RIAA and all these other people came in and they just brutalized these poor guys and threw 12 year old girls in jail and sued people for millions of dollars. And what did we create? We created a bit torrent. And now more people watch Game of Thrones illegally than they do legally and HBO has never made more money. What does that mean? It means the old model of thinking expired due to innovation. So if the government really clamps this hand down, what are we gonna see? Huge investments into ZK Snarks. Huge investments into anonymous transactions and anonymous network stacks and so forth. And now we live in a paradigm that's so dangerous to the government because not only do we have control over our own money, the government doesn't know how much money you have. Think about that. Because I can just have 12 magic words in the back of my mind that have $5 million on them. No wallet, no nothing. I just remember 12 magic words that can at any time regenerate my cryptocurrency wallet. And now I have access to that $5 million. So I just have a shirt on my back. I can go from country to country and then regenerate my wallet, take some money out of a Bitcoin ATM and then destroy the wallet again, right? Nobody even knows I have it. So what does that do to our taxation system? Which is predicated on the fact that they know how much you make. It means we have to move to a sales tax, doesn't it? So maybe we'll get a fair tax out of it. And so similarly there's a whole bunch of other regulations like KYC and AML. KYC and AML are built on the paddle tail system. So let's say Michael there runs a bank, which he actually did, he created Emirates Bank. There's a great story about the Prince of Dubai or something giving him a stamp. But anyway, let's say he owns a bank. Well, what does the regulator do to Michael? They say, Michael, that guy over there, we're a little worried about him. You need to tattle on him. You gotta fill out what's called a SAR, suspicious activity report. So the regulatory bodies, they don't just sit down with binoculars looking for people, they let the banks tattle tail on people. But what happens when everybody's a bank? Are you gonna tell on yourself? That whole regulatory system that's been constructed starts evaporating, they lose control. And that's what I think is gonna happen. It's gonna become harder and harder to know how much money people make. It's gonna become harder and harder to get compliance with the KYC and AML regime. And as a consequence, we're gonna see an exodus of capital from these locked down, terrible jurisdictions that want total control to jurisdictions that embrace freedom. And because those countries are prospering, they get more control in the overall macro economy of how the world works. And so we'll see a gradual movement towards freedom in a certain respect. This technology is basically like the antidote for the evils that we see in the system. At least in my crazy view. Yes, sir. Does that make sense to you or? Right, well, okay, you have a pile of gold. And when more people wanna buy that pile of gold, does it mean we get more gold in the pile? No. So we have a scarce resource. It's artificially scarce, but it's done in such a clever way that basically it is what it is. So if there's more global demand that comes in, necessarily the assets have to become more valuable. That does not mean they're less volatile, but quite the opposite. Usually when you have a big group of people come in, you see much more volatility until you create products to dampen the volatility in a certain respect. It's less of a question of how much is it worth? It's more of a question of what parts of the economy can it be used in or replace? So the point of Ethereum was we gave a better toolkit to people to do more. And similarly, if Bitcoin is to survive, it must adopt that same mentality over an arc of time or else what it'll become is digital gold. Basically it becomes an artificial store of value on the internet that we just through pixie dust and magic agreed is worth what it is and people buy and sell and trade it. But it will not be a payment system and it will not be a currency. That hasn't been invented yet. There's no cryptocurrency on the market or anything coming yet that's at that capability that can grow and replace PayPal and Visa and all of the other networks. I mean just think of it for a moment. You have to create a value stable currency if you plan to do lending. Imagine if you took a loan in Bitcoin in December of 2012 and you say pay me, I'll give you 10 and I'll pay you 11 back in December of 2013. You took $100, you have to pay back $12,000. Now let's do that again from 2013 to 2014 in December. You have to pay back $2,000. Does that make sense for anybody? No. So you need to actually dampen volatility and have value stability. That's just one problem. There's hundreds of them and so forth. So that's my overall view on these things is that we have a lot more to go but value is disconnected in certain ways from utility. It's very speculative right now. Yes sir. Which is bigger than any ICO by the way. Just a point that actually had a whole ICO market together. Bitcoin cash is worth more. No, no, no, no, you misunderstand completely. Where does value come from? It doesn't come from the fork. I can fork on the stage right now Bitcoin with my cell phone if I wanted to. I just push a few buttons, deploy another repo. It's done. The value is people. People live underneath and behind and prop up the cryptocurrency and what do we have going on in Bitcoin? We had two factions that really just stopped getting along a long time ago. It's like mom and dad are fighting a lot. And at some point mom and dad got to get a divorce. And they did. So mom took her friends and dad took his friends and now we got Bitcoin and Bitcoin cash. The reason why Bitcoin cash is worth something is because there's people behind it. So if you can resolve the governance problem you pull things together. People have an incentive to be together. If you can't, you pull things apart and we end up having hundreds of microcamps of people. There's still value there. Still trading going on and we have now an internet of blockchains. The question rather isn't will this continue to happen or not? It's a question of what will happen if we have good governance versus bad governance? But the value is always constant. It's nothing to do with the code. It's everything to do with the people. Bitcoin is right now the most primitive of all cryptocurrencies. And it's the most valuable. It's most primitive because it was the first. Ethereum is one of the most advanced. There's ones coming after it that are even more advanced, worth less than Ethereum. So it's not the technology. All right, one more question I already asked her. Yes, sir. Oh, with Bitcoin? Yes. Maybe we'll have another one. But what's she call it? Like Bitcoin Classic, Bitcoin Cash Squared. Tricoin. It'll be like, hey, man, I have the power. I don't know, man. I mean, I spent a long time in the politics. I know my current pretty well and he got kind of railroaded as well. And I gave up on it. That's why I'm in the altcoin space and we build things. Sergio Lerner is one of the best guys ever met in the entire space. He's down in Argentina. He's an incredible InfoSec guy. He discovered a bug where you could create billions of Bitcoins out of thin air. This is how long he's been in the space and he fixed these things, right? So he was actually one of the first guys to talk about turn complete smart contracts. This was six months before Vitalik. And what's the first thing Sergio did? He went to the core developers. How we should change the scripting language to allow us to have these new capabilities? No, so the problem is, even if you have good ideas or things are happening, these camps are so volatile and so difficult to deal with and they pull apart so much that I imagine we'll see more forks coming. They're not bad things. It just means the divorce happens. Mom and dad can get remarried. They can have more kids. They can live a prosperous life. It just means we don't consolidate all the value into one thing. It's only bad for the people who hold Bitcoin. All right, we good? Oh, okay, sorry guys. I wish I could take more questions. Thank you so much. That was a lot of fun. Very good, thank you.