Transcript

[00:21] SPEAKER_00: So what I thought would be most productive is to kind of answer a question that I've never answered. Basically, why am I part of Ethereum? What's my goal? What drives me? What's my motivating force? What do I care about? And so this really stems from a friend of mine who's really my hero. He goes by the name of Priscus. He's from Africa. He's getting a little old, but he's really an amazing person. In fact, I think he's probably one of the most amazing people I've ever met in my entire life.

So he came from a large family, a small tribe. He was the second brother in the family. His older brother was 17. He was 15. And he worshiped his brother. His brother was his hero. Everything they would do together. And every day they walked to a well that was about five miles away from their village. They had shoes. They lived off a dollar a day. Very poor family.

So one day his brother came down with malaria, a very common disease throughout Africa. It's actually killed more people than any disease in history. And for less than $3 worth of chloroquine, he died. So it kind of broke Priscus. He said, you know, this is just not going to happen anymore. I'm going to solve this for everybody, for my village, for the community that I care about.

So what did he do? He asked everybody, he said, how do I get to America? Because that was the common notion. People wanted to change the world. That's the place they go to do it. That's the place they go for opportunity. He asked everybody, they said, well, there's this tribe. They're about 80 miles west of here, and they have a connection to New York, so go talk to them. He said, okay. No questions asked. He walks barefoot for 80 miles, takes two and a half days to get there. He was moving, and he gets there and he talks to these guys. He's a young kid, he's 15 years old, and he says, I want to go to America. And they look at him and they say, eh? And they say, well, I tell you what, if you learn English, we'll let you go. We have a connection. He says, okay, well, who can teach me English? And they said, it's this factory. It's about 10 miles from where you live. If you go there, the owner of the factory can go ahead and maybe teach you. But you're kind of young. You don't have any skills. He says, okay.

So he walks back, he walks to the factory again, barefoot. He doesn't own any shoes, very poor family. He's also, because his brother's dead, responsible for taking care of the family when his father's gone. And he goes into the factory and he says, I want to learn English. Please teach me, and I don't care what I have to do. And he says, okay, work during the day. At night, I'll teach you. So he does this for three years, every single day, 10 miles there, 10 miles back, and takes care of the family and gets up early to go to the well. It's just a miserable thing for him to do, but he does it.

He goes right back to that village that told him three years ago that we'll take you to America if you know English. And he says in perfect English, I'm ready to go to New York. They say, shit, you actually have to take the guy. So he goes to New York, and the first thing he does when he gets there is he says, who makes the big money? And they say, well, you know, nurses, they do pretty well. Maybe you can go do something like that. That's the good starter profession. So he says, okay. So he spent eight years of his life pursuing that act. Becomes a nurse, and he's making good money, working overtime, about $60,000 a year. Not bad. And he said, this is shit. I need more. Who makes the big money? And they say, okay, well, you know those Wall Street guys, they make a lot of money. So, okay, okay.

Spent another five years working his ass off. He goes to an investment bank. That shall remain nameless. And he just walks right in, no appointment, no schedule, no nothing. Talks to all the hiring managers. Barges into his office and says, who the hell are you? Why are you here? And he says, you're going to hire me. And he says that was his resume. And spent three and a half hours talking to this guy. Partners come down. It was unbelievable. And he worked his way up. And at the end of the day, he started to make millions upon millions of dollars.

That journey, from when he was 15 years old to when he went back to Africa, took over 30 years. But when he went back, every single person in his village he took care of. They all got healthcare, they all went to college, and he built a well right next to his brother's grave.

Now, the reason why he's my hero is that nothing could break him. He was on a mission. It was almost spiritual. He was either going to succeed or die. So this is an anomaly. Most people in the world don't have that drive. Don't have the ability to have that drive.

So I asked about technology and what it can do to enable the Priscuses of the world to do better and encourage, promote others to grow. See, the thing about technology, especially great technology, is it's not great because it has algorithms. It's not great because you have beautiful user experience and user interface. It's about the people, it's about what it can do for people's communities.

So the reason why I'm part of Ethereum is I want to enable a thousand Priscuses. I want to have one in every single village, every single country, changing their community. Doesn't matter if it's the United States, it doesn't matter if it's Europe, it doesn't matter if it's South America, Latin America, Africa. Everybody's got a lot of problems.

The magic of our technology and what makes our technology great is we didn't make decisions in the technology about who we wanted to help. Rather, we took a step back, we built it as arbitrary as possible. We connected it with the most beautiful platform we could think of, and we're releasing it to the world. And part of our commitment is making sure it gets distributed to the world. We have a long way to go. We have a very long road to go. And in a sense, it's like our first day at that factory. We're 15 and it might take 30 years, but I'm in. That's my job. That's Joe's job. That's all the people who are a part of this project's job.

I've been out of six countries the last two and a half months. Switzerland was absolutely amazing. Joe and Givers and I had a lot of fun together. And I also went to Amsterdam and I went to Denmark and to Iceland and to London. I was on the Kaiser Report having a lot of fun. And every single person I met, no matter where I went, they always said, can Ethereum do this? Can Ethereum do this? And they say, well, it could. You're the guy who's going to have to make it possible. And instead of them saying, ah, they say, wow, that's so cool. I'm so happy. This is really neat. So that's what drives me, is my friend and all the future people that can come from this platform, and I love it.

Inside of our project, we've got a lot of people, some very young. There was a kid in Silicon Valley that came up to Vitalik. I love Vitalik. This kid comes up to him and says, we created this application called Etherscripter. And it's like you can just drag and drop these little blocks and it generates code for you. And I was like, well, did you get his number? This is amazing. He said, no, I didn't think to do that. I was like, oh, I love this kid, he's great. He's a young kid, he did this for us.

But then we also have people who are in their 50s like Herbert. Searching and Johann and I both work with Herbert. He's this old guy, he's 55, he's worked for Oracle, he's on a lot of different boards and he's just a traditional businessman. By the time I left Switzerland he was acting like a 21 year old kid, fired up, ready to go. That is how I know this product is special. We have everybody, from the young to the old. But you know what's special is when the old people are young too. So anyway, that's all I have to say. That's why I'm part of Ethereum and I suspect we'll probably have a lot of questions. Thanks, Charles.

[08:05] SPEAKER_01: Yeah, we have a microphone up here in the middle.

[08:06] SPEAKER_02: So if anybody would like to ask some questions about Ethereum or more about why Charles is doing this, please come up to the mic, maybe introduce yourself. Go ahead.

[08:16] SPEAKER_03: Paul Reben. Maybe you can just give us the elevator pitch on Ethereum. Just give us an idea of the overarching philosophy behind what you guys are building.

[08:24] SPEAKER_00: Okay. Yeah. So basically Ethereum at its core level is a unification play. So Bitcoin proved that decentralized technology can work, obtain market value, that you didn't really need a central bank to move money around. And then what we've done is abstracted the technology for all other aspects of the Internet and society in general. So any server client model can be broken down into a peer to peer model. You can price the start where you buy tokens and then frankly you can also do anything else like decentralized law, prediction market structure, finance, micro finance, micro insurance. You could go on with the list.

So in terms of the Ethereum company, our first obligation is to deliver the protocol and deliver the reference client in a way that works for everyone. And what I mean by everyone, it works on feature phones, works on smartphones, works on the desktop environment. That's the first stage. And also to make sure there's enough resources so that you can build your own applications as easily as you can build an Android application or iOS application.

The next stage is we have an obligation to build an application ecosystem. So we're going to go ahead and fund a whole constellation of apps and those apps will go ahead and produce some profit for us and mostly profit for the community that we reinvest that ecosystem style into pretty new applications and we just keep it running. So to use an analogy, essentially what we're doing is building the Xbox. We have some launch titles, we're building an ecosystem around it and lots of people are coming in. But instead of being a gaming platform, it's re-engineering society in general.

[09:56] SPEAKER_04: Hi. Yeah, I find it really hard to explain Turing completeness to people. Could you maybe give, I don't want to say dumbed down, but the layman's version of why that's so important.

[10:04] SPEAKER_00: Yeah, so not to get into things like the NP shy domains problem or things like that. Right. A nice mathematical explanation. So yes people, have you ever used JavaScript or Python or C? And they say yes. And you say, well then you use a Turing complete language. Basically anything that can be programmed can be programmed by a Turing complete language. When you do Turing incomplete, that's when you've restricted what can be done. So usually what you say is Bitcoin was Turing incomplete because they were concerned about the security implications. But in terms of the language, just say it's just like Python, it's just like JavaScript. And so the analogy is saying the Ether platform is like the web browser and its contract language is like JavaScript. In that respect, that's probably the easiest analogy about having to get deep into technical detail.

[10:51] SPEAKER_01: If I could just add to that.

[10:52] SPEAKER_00: Sure.

[10:53] SPEAKER_01: Any Turing complete language can implement any other Turing complete language, of course. So imagine interchangeability. So if you write in a Turing complete language, you can do anything that can be done anywhere else in that language.

[11:09] SPEAKER_04: Hey, Howard Levin. Lag. How do you see Ethereum interacting with all of the other exciting distributed web services that are coming up? Like I'm thinking MaidSafe for example. So I want to build an app. I need some storage. Sounds great. I need some processing, some contract working your actions. You need to bring them all together. Do you have a vision of how that all comes together?

[11:31] SPEAKER_00: Yeah. Basically the idea is you have off-chain and on-chain services. Some are like BitTorrent is a great example. Or you have something like BitCloud, MaidSafe. There's a lot of these services. So at the very least what we can provide is a token of value to incentivize people to use these services. At the very most we can augment the trust layers, the logic layers. So if you need a third party to do things, this can be done on a blockchain.

[11:58] SPEAKER_04: So you have your token. But MaidSafe is going to have its own token as well.

[12:00] SPEAKER_00: Yeah, perhaps. And there'll be an exchange between it too. So in some cases they may be a soft competitor, in some cases they may be a friend. We may do things they don't do. It completely depends on their technology. We have talked to them. We actually have a Skype room specifically for MaidSafe, and we'll probably have some form of partnership with them at some point.

[12:19] SPEAKER_04: But as a system designer, where the third set of services with both your technologies. Now I'm going to have to deal with both your…

[12:29] SPEAKER_00: No, no. Interoperability is our primary goal. So we want to make sure if you live in one ecosystem, it's very seamless to move to the other ecosystem. It's about basically where the people live and the user experience of the people. So we could perhaps at the very least be a front end. Maybe we're a back end. It completely depends on the application. Thanks.

Okay. From what I gather, Ethereum, part of Ethereum is currency Ether. And I'm just wondering, as we've seen with other nascent cryptocurrencies, including Bitcoin, quite volatile, does that have an effect in terms of, you know, executing Ether contracts? Ethereum contracts, yeah, it depends on the transaction fee model, but yes, it wouldn't have an effect. The goal is, of course, to structure it in a way that the economic scale of volatility. But that's the most succinct answer one can give about getting into the models. Right. Thanks.

[13:30] SPEAKER_05: Hi. I really love that term re-engineering society, but I think our issues that we have in society are fairly large. And I'm having a little difficulty connecting the technology of Ethereum with some of our world problems. For example, let's just take GMO food. That to me is a massive jump. I just don't see the connection of how technology can affect something like our social injustices that we have. Can you comment on that?

[14:04] SPEAKER_00: Sure. So at the first level, one has to have rule of law. That's absolutely necessary. You need to have transparency. You need to have systems to properly authenticate people. You look at most of Latin America, if you look at most of Africa, a lot of them are dark. There's no authentication, there's no KYC, there's no web of reputation. So let's say I want to hire somebody from Kenya. How do I do that? What's their credibility? So at the very core we have a web of trust followed by web of credentials and web of reputation. Once this is developed, when people start doing bad things in an ecosystem, you can now label them in a way that allows it to be globally known.

Switzerland actually has this system they've been using for 750 years. So they have a nice reputation system by a credit ledger. If you screw somebody, everybody in the country kind of knows about it. So it keeps people pretty honest. But we can do this now on a global scale with our technology. So at the very least you need authentication so we can start identifying who the good actors and the bad actors are in society. The good entities versus the bad entities.

Second, you need some notion of a private legal system that countries will recognize so you can enter into contracts without having to use the local legal system. So UNIDROIT has done some very interesting things. They've been around since the League of Nations over 70 years and 63 countries have agreed to allow private commercial arbitration agreements via that system. So it's just a matter of getting those agreements onto a blockchain and getting digital signature rights onto the blockchain.

Third, you empower people by giving them economic certainty and by giving them the ability to be entrepreneurs and keep the fruits of their labors. When you have a strong middle class develop, that middle class, generally speaking, gets rid of corruption and generally re-engineers their local society. So there's a micro finance component that comes into play as well.

It turns out with the Ethereum ecosystem, via contracts for difference, one can actually construct value-pegged currencies to any standard that you desire, whether it be the US dollar or the euro, which makes these tokens which will have all the properties of Bitcoin, but the value stability by an external feed to the dollar or whatever one's desires, combined with an authentication system, you've actually built the world's largest decentralized bank. So it makes it very easy to go ahead and give money to these communities so you can authenticate them. You have stable rule of law and now you have the ability to get capital into their hands.

Kind of the highest level is the decentralized autonomous organization. This concept has been floated around a lot, requires a notion of how consensus is going to work. But the basic idea is, is you bind all your business logic. Take your entire organization, you put it completely on the blockchain, the intellectual property on the blockchain, the assets on the blockchain, decision making mandates live on blockchain and are backed by cryptography and for certain industries, this will work quite well. Now, is it a perfect solution?

[16:48] SPEAKER_01: No.

[16:49] SPEAKER_00: But it moves us forward and it makes the world better. JR hey, how you doing, buddy?

[16:57] SPEAKER_01: Doing good. I have to give a quick disclaimer that anything I say has to be taken with a grain of salt because I run a project that does some of these things on top of Bitcoin. So I just want to give that disclaimer because it's kind of a… I want to hear your response to a criticism that I don't think I've heard you guys respond to.

[17:12] SPEAKER_00: Sure.

[17:13] SPEAKER_02: So when people ask me about Ethereum, I typically point out the same thing that you guys point out, which is the JavaScript money. And that's… We can think of that as a good thing, or we can think of that as perhaps a large hurdle or challenge to overcome. When I think of JavaScript, I think of the very large attack surface that it presents to hackers. And most of your web browser exploits target JavaScript because it's Turing complete and not say HTML, although actually there are some. So we've seen with Bitcoin, when you have large amounts of money that you can steal over the Internet, people are going to try to steal it. And Ethereum strikes me as providing a, what you call a mammoth attack where the number of different ways that you can steal from Ethereum users or contracts would be huge. And I'm just curious how you guys plan to approach that problem.

[18:16] SPEAKER_03: Right.

[18:16] SPEAKER_00: And so when I signed up for this, the first thing I told Vitalik is that I didn't want to sign up to create the world's largest malware. I think Microsoft doesn't need competition. So anyway, you build with some layers and you build it very carefully and very systematically. So first and foremost, the contract layer doesn't have IO access to your disk and it can be sandboxed in many different ways on a virtual machine. So that's not really going to be a huge concern.

The big concern from a security perspective is actually the application ecosystem, because those actually write to your hard disk. And so what we're going to probably do, which we've already done, is we've partnered with AVG and we're partnering with many other organizations to help sculpt that security strategy. But we're going to build it later, we're going to have a beta, highly incentivize people to try to destroy the system via bounties and other such things, and basically build security into the DNA on day number one.

You're absolutely right. It's a tremendously complex problem, but it has been simplified by the fact that we've had things like Java and .NET around for now a decade and a half and we've also seen what's happened in the web browser. So we have a lot of foundation to stand on and there's a lot of great ideas to stand on. But at the end of the day there will be exploits. At the end of the day people will get hacked. At the end of the day people will lose money. If anybody in the software industry tells you their software is incapable of doing that, then I'll say, I'm glad you have a hand calculator. Because the reality is any complex logic, if you're going to hand this much power to somebody, there's going to be an exploit somewhere. And so it's a matter of how you manage that. Is it cascading or not? And how quickly can you fix the problems when they occur and how big of a community is going to be there to help you do these things. We have transaction validity with Bitcoin, so everybody in the ecosystem suffers together in this respect.

[20:04] SPEAKER_01: Hi, I've got a question that just as a bit of a preamble and a segue from that, I wanted to mention that what one hopes projects like Ethereum will evolve to, and if not Ethereum, then something else, is an environment where the solution to that problem is actually the system itself. Once you couple the money to the decisions, and those decisions can include what code to run and what code not to run, then Adam Smith's Invisible Hand of Capitalism starts to make some of these decisions for you automatically. And yes, that means some people or some entities within a system like that lose their money. And that entity doesn't have to be the organization that is using Ethereum, but just the code that has the money at the time. But the bugs can be rapidly fixed in a system. You know, in the real world where we live, it might take a couple years for a bad restaurant to run out of money before the landlord kicks them out and puts in a better restaurant. But in a world where there are 100,000 cycles per second in an evolutionary power like that, then the premium rises at a lot quicker. So my question to you is, to what extent are you looking at putting that type of economic discipline at a granular level in code selection?

[21:42] SPEAKER_00: Thank you. Okay. So we are a large holder of Ether. We would love to make sure that Ether is valuable and we'd love to make sure the ecosystem is robust and lots of people are in it. So obviously internally all of our decisions will be to secure the ecosystem and make sure the ecosystem is vibrant and growing.

Part of having an open source movement. If one looks at Android for example, it's not just Google's problem if Android is secure or not. It's actually Samsung's problem more so than Google and HTC's problem and many other people. So your greatest insulation to security problems is to broaden the amount of people whose problem it is. So if you have 500 businesses, 1,000 businesses, 2,000 businesses that have all built infrastructure, every single one of them relies on that common base. So they're going to work with you to actually go ahead and make sure it's secure.

So part of our challenge is to make sure that we can productively work with people, we can productively partner with people. It's a tremendous logistics challenge, it's a tremendous developers challenge. But we're open source and there's a lot of precedent for how to do this from what's happened with Java and how not to do things, .NET for how not to do things to what's been done with the Chromium platform. And a lot of them rushing against this. So that's the best answer I can give you is build a broad base of partners, couple their economic interests with our interests and if there are security problems, nobody uses the ecosystem or platform, so we all have the same economic interest. That's the best way of doing it.

[23:24] SPEAKER_02: Maybe we can have one more question.

[23:25] SPEAKER_00: I ran out of time. Okay.

[23:26] SPEAKER_03: Actually, you're kind of limited by your imagination what can be built on this platform. So what are the top three applications you would love to see built?

[23:35] SPEAKER_00: Well, first I'd love to see proper authentication. So cryptography, we worry about four things. Confidentiality, integrity, non-repudiation and authentication. PGP solved three of the four quite accurately. But the authentication component has not been handled. You know, you got PKI and you got web of trust, but for the most part we still have passwords. How many people here have passwords? So we actually had proper public key cryptography. You don't need that anymore. So I at the very least would like to see a really solid authentication metric and revocation built into the ecosystem.

Then from that I would love to see people build their reputations and their credentials around that identity that they have living on a blockchain that actually changes education. By the way, has anybody taken a class on Coursera or Udacity or edX, any of these platforms or the MOOCs massive open online courses? Wouldn't it be so cool is after you take that class incrementally that the website is assigned to your ID living on a blockchain and then the whole world knows about that and they know the quality of your work. And wouldn't it be so cool if you make a commit to GitHub? There's a way of qualifying and quantifying that and actually having that signed to a digital ID living on blockchain. So that's the first application I'd really love to see is a proper development of authentication and then a web of reputation credentials formula.

Second, I really would love to see innovations in micro finance and micro insurance that will change billions of people's lives. There's a lot of people who are one disaster away from being completely wiped out and starving to death in the world. Insurance prevents that, but it's not cost effective to write a 5 or 10 or 25 or $100 policy given to somebody living in Africa or in South America. So if we could actually take something that works just as well for a multinational company, scale it all the way down to something that's going to work for just a small co-op in the middle of Zimbabwe that doesn't have any risk from the local government, that would be a magical, wonderful thing.

And the same for microfinance, if you look at how it works, it's terrible. It's like 45%, 50% interest rates on these loans. That's not a wealth creation engine. But if we can build a better way of distributing capital throughout the world, which presupposes you have better metrics for creditworthiness, then guess what, those loans will go down. They'll still be profitable, much more so than American or European loans, but it will allow wealth creation.

The final thing is I'd like to see, I wouldn't say a killer application, but rather a really good development experience that can be localized very quickly so that we can get a lot of apps created. So we're going to be investing into a new type of IDE. Our chief technology officer actually wrote his dissertation on this. But there's a lot of really good ideas we've come up with for how to write code better and how to deploy code faster. And that's the third application that I'd love to focus on is the developer experience. The developer knowledge and developer localization. So we can take people with no background in computer science and very quickly teach them how to use contracts, or quickly teach them how to build applications. Within three months, they're writing something specifically for their community, because then they're going to change the world, given this platform.

All right, well, it looks like I'm out of time. Thanks, everybody. Ladies and gentlemen.

[26:54] SPEAKER_01: Thank you very much.

[26:55] SPEAKER_00: We'll have a couple minutes before it.