Transcript

[00:01] SPEAKER_00: If you think the Internet has affected your life, Ethereum will have that same pervasive influence on our communications, on our entire information infrastructure. It's going to impact all aspects of our existence.

[00:32] SPEAKER_01: Joe Lubin is the founder of ConsenSys, a Brooklyn-based software production studio that employs 68 people in nine countries. The company, which Lubin started in 2014, is developing applications built to run on an ambitious new online computing platform. It's called Ethereum.

[00:52] SPEAKER_00: Ethereum represents a new paradigm in computing that puts a lot more power and sovereignty in the individual.

[01:01] SPEAKER_01: On Ethereum, the same types of services offered by companies like Facebook, Google, eBay, and Amazon will be provided instead by computers distributed around the globe. So how does Ethereum bring together these scattered computers into one network? By using the groundbreaking organizational system known as a blockchain, which the Economist has aptly dubbed the Trust Machine. It's the same technology that makes possible peer-to-peer exchange of Bitcoins without a bank keeping track of who owns what. Ethereum is controlled by a different kind of blockchain that's specifically designed to keep these scattered computing nodes in sync, forming one powerful network that could one day match the capabilities of a Facebook or Google.

[01:50] SPEAKER_00: The Internet, over time, became a set of centralized services and systems. Ethereum will enable the replication of all those functionalities, but in a fully decentralized context.

[02:04] SPEAKER_01: But why do these services that have already improved our lives immeasurably need replication? The first advantage of Ethereum, Lubin says, is that it cuts out the middlemen.

[02:14] SPEAKER_00: That thin command and control infrastructure that does extract an enormous amount of money. The Uber Quantity Corporation or the Airbnb Corporation. It will be possible to realize that so that the central control, if there's any at all, will extract much less value from the whole ecosystem.

[02:36] SPEAKER_01: Take the music industry. Though it's already been thoroughly disrupted by the Internet, Lubin believes that computer code running on Ethereum can eliminate the last remaining entities that stand between musicians and their customers. Online music stores like iTunes, Spotify, and Pandora take a cut on every song downloaded or streamed, as do licensing firms like Audiosocket, Getty, and Rumblefish. So ConsenSys is building Ujo, a new website for buying music online that's run on Ethereum. It's merely software that facilitates direct trade between musicians and their customers. In the case of this song, Tiny Human, by British singer-songwriter Imogen Heap, all revenues are divided between Heap and her collaborators according to a set formula. And when users click to buy Tiny Human, the musicians receive their share of the proceeds within seconds. Since there's no intermediary, it's going to…

[03:38] SPEAKER_00: Put a lot more value in the pockets of the content creators.

[03:46] SPEAKER_01: Another advantage of running websites on Ethereum is that they can be designed in a way that prevents anyone from censoring their content. In contrast to today's most popular web platforms, take the online discussion board Reddit. In 2015, the company shut down five forums for offensive content and users cried censorship. So ConsenSys is building a new decentralized version of Reddit called Nonsense, a platform for unfettered speech that's owned and controlled by no one. But Reddit was dreamed up by two entrepreneurs in 2005, before anyone thought there would be a market demand for such a service. And the iTunes store was built by Steve Jobs, who first had to convince the recalcitrant record labels that they had no choice but to get on board with digital downloads. In an Internet without intermediaries, who's going to stake money on the next visionary idea? The thing I still find unsettling is where does Steve Jobs and Larry Page fit in? Will there be some huge business owners?

[04:46] SPEAKER_00: I don't understand why you think that decentralization will kill creativity. And there are so many amazing people out there coming up with great ways of offering better solutions in so many different niches. If there is no single insanely wealthy individual in all of that, and I think there will be lots of very wealthy individuals in all of that, that's great, I think. It is possible that many, many more really cool services solutions will be built and maybe the wealth will be spread out a little bit more.

[05:27] SPEAKER_01: Ethereum has another big advantage over today's Internet. It makes government surveillance more difficult. As the Snowden leaks revealed, the National Security Agency has in the past established direct access to information stored in the data centers of nine major Internet companies. With Ethereum, there won't always be a data center to gain access to, and there won't always be a company to serve with a court order or force offline. This will also make run-of-the-mill government regulation more difficult to enforce. But Lubin says that websites running on Ethereum will be largely self-regulating anyway. Take Internet poker sites, many of which have been shut down by the government for rigging games and mishandling their customers' money. So ConsenSys is building an online poker application on Ethereum with no third-party company to cheat or steal. Users maintain control of their own money and anyone can verify that the game is fair by inspecting the underlying code, which is open for anyone to see. But just because regulation isn't necessary doesn't mean the government will recognize that to be the case, Lubin says. In many instances that won't matter because with no intermediaries, there will be nobody to hold accountable.

[06:40] SPEAKER_00: It won't be hard to stand up a business that is located everywhere and nowhere. Instead of having this choke point, this centralized corporation that you can step on, take information from or cause to act in a certain way, regulators will have to go door to door and shut down tens, hundreds of thousands or millions of different participants in the system. This is an unstoppable computational machine.

[07:14] SPEAKER_01: Ethereum's underlying infrastructure is being rolled out in stages, but it's all happening fast. The idea was hatched just three years ago in a white paper written by a then 19-year-old prodigy named Vitalik Buterin, who is now the project's chief scientist. Ethereum officially launched last summer and over the past eight months, daily activity on the network has shot up. So who's paying the bills at ConsenSys? Lubin says the company is currently self-funded, but it has been rapidly striking consulting deals with businesses that are looking to incorporate Ethereum into their internal processes.

[07:50] SPEAKER_00: A libertarian should care about Ethereum because it gives people the freedom to do the things that they want to do, control the things that they are and that they own, and essentially transact in an uncensorable context.