Transcript

[00:00] SPEAKER_00: Gavin Wood for you. Thanks. Hello. Thank you. Wow. I thought it was going to be about five or ten people around a table at a pub like the Ethereum meetup, but yeah, I was a bit wrong there, wasn't I?

So I'm going to tell you a little bit about Ethereum. I'm going to go off on one a little bit. I'm not going to go for Vitalik's talk where he went about how it's going to revolutionize altcoin creation. I'm going to move more for the kind of what it will mean maybe for society. I've had a bit of a think about this over the past week or two, a few sort of revelations if you like. So I'd like to share them with you.

Okay, so what is Ethereum? So I didn't make this phrase. This is another guy. This is actually Charles, who is kind of running the strategy, if you like. Yeah, it's a test bed. It's a platform for making interesting new things that are going to allow people to interact differently, maybe more efficiently and maybe more trustfully in the 21st century. I really think it's going to sort of change what we consider as being the social contract. It's going to make certain things explicit and I think it's going to turn a few people into, out of their jobs. They'll have to get a proper job. Next slide please.

Okay, so Ethereum is an example of what I'd like to say is generalized selfish or social software. What do I mean by that? I think Bitcoin was probably one of the first examples, viruses notwithstanding, of software that you ran on your computer. Not specifically to gain anything immediately, but rather to join a community under the rules of that community. The community, of course, for Bitcoin was I'll respect the balance of your Bitcoins. If you respect the balance of my Bitcoins, I will conduct transactions in the expectation that you will respect those transactions and similarly I will respect your transactions. And if we look upon this as sort of an abstract kind of notion, then we can see actually there's a way of generalizing this and making more generalized social contracts under the same basic framework.

So if we want to get technical, Ethereum is a decentralized, deterministic, consensus based transaction resolution platform. I don't think we need to dwell on that.

So how is it similar? Because you guys are all Bitcoin people, I suppose. So it's similar to Bitcoin and uses similar technologies. So we have a blockchain. It's our own blockchain. We have signed transactions just like Bitcoin. So when we specify that we want to make some sort of decision and we want everybody else to respect that decision, we sign it. Cryptographically, it revolves around consensus, which means if 51% of people decide that something is the case, then that thing is the case. It doesn't matter whether it's true or not. That's the nature of consensus. It's democracy, that has interesting issues with truth, but we won't get into that now. And it's decentralized, so there isn't any single entity in control.

But it's not like Bitcoin in several other ways. It's much simpler. We don't have features. We just have a feature set, a very minimal feature set. And we have something that will allow you to make features. Let's say transactions can have arbitrary data. This is quite an important aspect of it. This means that when you sign your transaction, in Bitcoin, you might sign your transaction and say, hey, I want to pay these guys these amounts of cash from these accounts. In Ethereum, you're allowed to write stuff on the back of the check, and you can write an arbitrary amount of stuff on the back of the check, and you can make it mean whatever it means, given the context of where it's written. And we'll go into that a bit later.

Transactions can be sent to things called contracts. And this is something that we'll need to go into as well. And transactions can create those contracts as well. Contracts are effectively. Well, actually, I think I go into it on the next slide. So if you want to move on.

So what is a contract? Turing complete? Yeah. How many people here know what Turing complete means? All right. About 30%. Okay. So here's a brief history of computers. In the beginning. No. Okay. The first few computers were actually calculators. So they did specific calculations very fast. A notable example of one of the calculators that was in existence is the one that, what was his name again? The physicist. Name a famous physicist that has died in the last two decades. Richard Feynman. Yes. Well done. Richard Feynman used a computer in order to calculate the various coefficients for detonating a nuclear bomb. Yeah. Nice.

Really? You can't hear me? Okay. Okay. I'll try and keep it here. Yeah. Feynman used one of the early computers to make calculations. So the first computers were calculators. These calculators were not Turing complete. What did that mean? It means that they can't execute any arbitrary program. They cannot get into certain. They cannot do certain problems. Basically, they cannot recognize certain languages if they're going to be computer science-y about it. But we don't really get that far.

Basically, because it is Turing complete. We can make any software that we can imagine. It has state, which means it has a memory, which means it exists and it remembers what it has done in the past. You can change its state. It can change its own state. This is a bit like in Bitcoin, where your account balance, or the unspent outputs, if you want to call them, that have a state. They don't get forgotten at the end of the transaction because that would make it useless if they forgot how much money you had. It would be a bit of a shit accountant thing.

It can make its own transactions, which means it's as powerful as you are the user of Ethereum. It can literally do anything you can do. It has its own balance, it has its own account, it can send money to things, it can receive money. It's its own little person, really. And it has to pay fees to run. So whereas we have to pay sort of fees, we have to eat and we have to sleep well, it has to pay fees, but its fees are denoted in Ether.

Right. What does it all mean? Right, so, okay, we've got this Turing complete language that, these contracts can have. So we have contracts that can be as complex or as simple as any software that we've already made. What does it mean? So I like to put this in kind of a progression. So in the beginning, there was the Internet. Not really. It was only actually a few years ago. But it feels like that way sometimes. And then we have Facebook. And Facebook introduced us to the notion of people sort of getting together under a certain set of rules or contexts. And then we have Bitcoin. And what did Bitcoin allow us to do? It allowed us to restrict ourselves. If you want to think of it in those ways. I like thinking in those ways.

So if I join the Bitcoin network, what do I gain? Not very much, because I have to then respect everybody else's Bitcoin account balances, which means I've gone from not owing anyone anything to kind of not having anything. And everyone else having stuff, which I don't know, it seems like a bad deal. But it's the nature of social networks, social contracts I should say. And it's good because if I ever get something in Bitcoin, so if I ever buy any Bitcoins, everyone else has to respect my Bitcoins. But at that very beginning instant when I have no Bitcoins, I'm placed in a slightly less good situation.

And so Ethereum sort of builds on this and it says, right, well that's one example of a social contract. Well maybe there are many other examples of a social contract that we can implement. Why don't we have a platform to implement them? And so in a way, whereas Bitcoin implemented the first cryptocurrency, Ethereum could be considered the first crypto law.

So the contracts in Ethereum, these Turing complete actors that are deterministic and they act according to a specific behavior that you can instantly look at and see how it would work, specify the rules of interaction. In Bitcoin, the rules of interactions are relatively simple. I give you some money, your balance goes up by that amount. My balance goes down at a high level. There's actually scripting language and all the rest of it, but we'll ignore that for now. And so these rules of interaction can be anything. In the same way that a computer has rules of action when it executes the software. The software specifies what the computer should do. So the software for Google Chrome specifies how Google Chrome should display the web page. Well those same rules, that same complexity, that same richness can now be done in terms of a blockchain based consensus.

And so we get interesting things allowed. So ultimately, right, well the first step is, hey, you can implement all of these altcoins. And it's like, wow, these altcoins only take a few lines of code to implement in Ethereum. Look, I'm wearing an Ethereum t-shirt and right, down on the back there, I don't know, can you read it? Yeah, that's Namecoin right there. Five lines. Very good.

Yeah, but you know, a bunch of other coins can be implemented in a similarly a handful of lines. It just abstracts all the differences basically and says, right, look, there's a platform here. Well we have computers, right? Computers can do all of this software. If we had a computer for playing games and a computer for writing documents and a computer for browsing the Internet and a computer for writing emails, it would get quite tiring. And at the moment that's kind of what we got with all these altcoins. Well, why not just abstract the differences, give you the base technology and let you build the apps? That's kind of what we want to do.

So where will it end? I really don't know, but it will be quite an interesting journey. What it gives you is trust, transparency and anonymity if you want it. And that's kind of what lawyers give us, the trust, not so much the transparency. So when I write a contract, if I were a lawyer to give between someone renting a house and someone who wants to rent a house, it would allow them to trust each other even though they don't know each other and it's backed by the law, by the state.

Well in Ethereum you can do pretty much the same thing except it's backed by a computer and the computer isn't a judge. It doesn't take opinions, it just executes the program. And so you can look at the program and check to make sure, hey, this contract actually doesn't work out in my favor, I'm not going to take it. Well, you can't do that so much. I mean you can if you're a lawyer and you like reading through contracts, terms and conditions, etc. But in Ethereum it makes it so much easier and so much more plain and transparent. So who knows where it will go to society? I don't, but I think it's got quite a lot of potential.

I try to keep that short in order to maximize question time. I don't know if I managed, but yeah. Say again. Give it 30 years and then maybe we'll see. I'm not sure if I'm allowed to say anything official. I would keep your eye on the website. It won't be very long. Oh, sure, yeah, sorry, that was to the question. We recently postponed the opportunity to buy Ethers in the future. Do we have any information on that? What's my biggest need? We need great people to work on this. So Ethereum is ultimately, you know, it's being done in an open source fashion. It's all very open, you know. Please join the forums, join the Skype, contact us, tell us what you're good at, you know, help us.

[13:40] SPEAKER_01: Given that Bitcoin is now bigger brand, is there a reason that you couldn't do what you're doing now on Bitcoin?

[13:53] SPEAKER_00: So the question was given that Bitcoin is a bigger brand, is there a reason that we cannot use Bitcoin, the Bitcoin technology. So I presume by this you mean can we not use the Bitcoin blockchain. Yes. So.

[14:23] SPEAKER_02: The issue is that if you just.

[14:25] SPEAKER_01: Put a little bit more effort in, you can maintain Bitcoin in some way and have a layer.

[14:31] SPEAKER_00: So the basis behind this technology is that it does require a new blockchain and so we will not co-opt the Bitcoin blockchain. People are already doing that and they're meeting with. Well, you can judge whether it's success or failure.

[14:48] SPEAKER_01: But the reason for that was just too difficult.

[14:52] SPEAKER_00: The reason for that is that Bitcoin is simply not designed for a Turing complete language to run on it. It's that simple. In terms of, you know, utilizing the Bitcoin name, I mean I don't want to piggyback on that more than we already are. So you know, I think you know we'll go at it. Well, not alone but you know, we will be in the community.

To be honest in terms of the cooperation with Bitcoin, we view Bitcoin not in any way as unnecessary or separate. As far as we're kind of seeing this. Bitcoin is the goal. Bitcoin is great for value storage and we wouldn't have it any other way. We will use Bitcoin as part, you know, within Ethereum. No, absolutely not. Absolutely not. Ethereum we consider to be. If we take Bitcoin as gold. Ethereum we consider oil. Yeah, just.

[15:50] SPEAKER_03: To be clear, Ethereum is like an open source.

[15:54] SPEAKER_00: Ethereum is open source. Yeah. You absolutely can. Yeah.

[16:01] SPEAKER_03: I was wondering of facing their implementation of Ethereum but their worry was that I, I don't know much about this but actually about concerns about the pre-mining and the pre-allocation.

[16:17] SPEAKER_00: Ah, there are there. Okay, so you're asking about the forks and pre-mining etc. All I can say really is that we'll take that risk. Sorry. If they want to. Yes.

[16:42] SPEAKER_02: If you consider Bitcoin to be the first app of blockchain, the emphasis here seems to be much more on trust and social contracts. Do you think that might open up the door to seeing the blockchain, the blockchain technologies being something more than just the financial, you know, can I buy pictures of it? And more a case of anti-twat coins. When you look at Satoshi's paper, for example, it talks about hashcash and when I looked at that I didn't think, oh great, here's a way to make a load of money. I thought oh great, here's a good way to stop dickheads from sending me an email. And people who I like love sending me email easily. And I kind of hope that that's the direction. I wonder if this gets a new spin on it and takes it out of the financial world.

[17:40] SPEAKER_00: Okay, so the question being basically will Ethereum take blockchain technology out of the financial world?

[17:45] SPEAKER_02: Kind of, yeah. Maybe more an emphasis on other things.

[17:49] SPEAKER_00: I certainly hope so. Yeah. Absolutely. I think until now a lot of the emphasis has been on Ethereum replacing altcoins and the notion of even an altcoin.

[18:05] SPEAKER_02: Where's hashcash and will this do it instead?

[18:10] SPEAKER_00: Sadly I'm not that familiar with hashcash, but I think basically yes, you know, as much as I'm qualified to say, yeah, I think it will take the notion of financial, you know, blockchain at the moment, as you say, blockchain technology is largely co-opted for financial applications. I think it will take it out of that. Yeah, ultimately maybe five years.

[18:38] SPEAKER_04: But yeah, Bitcoin is secured by its massive network of thousands of computers running. If you're not using the same blockchain, does Ethereum require another network with its own mining system, its own ASICs?

[18:54] SPEAKER_00: Yeah, and we're going to do it right this time. No ASICs, yo. Oh, sorry. He was saying, will it require a whole new network of miners, etc, ASICs, all of that. And yeah, the answer was yes it will. And we will engineer it so that ASICs are less of an issue. If you want to call them an issue. We do.

[19:24] SPEAKER_01: How do you expect to use contracts to reference Bitcoin? So I can buy an Ethereum contract?

[19:29] SPEAKER_00: Oh, that's a good question. There are a few ways we're going to. Sorry, sorry, sorry, sorry. Right, the question was, how are we going to integrate Bitcoin into Ethereum? Basically, in order that we can, well, in order that we can send Bitcoins to contracts. I mean that's kind of the same thing.

It's an interesting question. We're not entirely sure. One option is to run a Bitcoin client actually within Ethereum, within the blockchain. So the blockchain itself connects to the Bitcoin network. Another one is to have a basket of trusted third parties that operate effectively as gateways within Bitcoin. Within Ethereum. Yo.

[20:17] SPEAKER_01: Yeah, I was just wondering, how could Ethereum enforce its contracts? So, for instance, if I was to enter a contract with IR&I, and I ignored my contract, they can come and repossess my house. So, I mean, if it was a case of Ethereum, how do you enforce?

[20:35] SPEAKER_00: Okay, so the question is, how can Ethereum enforce contracts that have arbitrary externalities, such as, if I don't pay the mortgage to my house, the bank in the real world would come and repossess my house. How can that be enforced in Ethereum?

It's an interesting question. Externalities are always an interesting question in Ethereum. And to be honest, it's not clear, but the idea is that Ethereum can allow this to be enforced. So maybe there are bailiffs who exist on Ethereum as sort of private contractors, and part of the money that you pay into the mortgage will go into an account that would then be paid to the private contractor bailiffs in order to kick you out of your house if you don't carry on the repayments, for example. I don't know, like drones a little bit. Yeah, you're not painting a really good future here. Go.

On. Well, how do you incentivize. How do you incentivize participants in the Bitcoin network? Everyone joins Bitcoin because they want to take part in the grand social contract. Yeah, we have rewards for mining blocks. Actually, the rewards for mining blocks in Ethereum are a bit sort of better. They use the what's called the GHOST algorithm, which basically means in Bitcoin, you might have the case where a bunch of people mine the block all at the same time, and only one actually gets rewarded because only one makes it into the blockchain. Well, in Ethereum, they all get rewarded. They get rewarded slightly less if they're a bit late, but they still get rewarded. So you end up with a slightly more of a reason to mine.

Isn't the GHOST Algorithm created by who, sorry, the FSB? That's the Russian Secret Service. Well, if they created it, they did us a good favor. Thanks.

When will real mining start? Real mining will start when the network goes live, which will probably be, we're hoping, before the end of the year. And the second question. Oh, no.

What makes it Turing complete? A Turing complete language is a language where you can execute. Okay. All I can really tell you at this particular context. We can talk about this a lot more when I'm off the stage. I don't think everyone really wants to know about this, but basically, it's the set of instructions that the virtual machine has make it Turing complete. Over there by the wall, Turing completeness.

[23:29] SPEAKER_01: Does it give you more problems than it solves problems?

[23:33] SPEAKER_00: No, we don't think so. I think this is massively overrated as an issue. It's fine. It's fine. It'll all be fine. We know about Turing complete. You know, it's been 60 years. We've worked stuff out. We're not children anymore. Okay? It's fine. Amir?

[23:50] SPEAKER_05: Yeah, Ethereum's a great project. I think it's really technically sound. And now you're attracting all the developers from all the other protocol layer projects, like BitShares. You have Charles, you have the Mastercoin guys. I think it's safe to say it's like the one. Like, how long before we start to see this stuff applied? Like, proper, decentralized organizations?

[24:12] SPEAKER_00: Oh, man, like, five years. Did everyone catch the question? No. So question was, how long until we get a lot of the stuff that Ethereum promises to deliver? How long until it. Sorry, how long until it takes society to change with it?

I mean, really, you got to ask a sociologist or a social historian. I don't really know. But let's say this. The Internet, originally, what was it like, 91, 92, when it first started getting public? All right, well, I mean, you know, it seems, I would say, five or six years before. So it took the Internet five or six years to catch on properly. Right? 96, 97. The Internet was sort of catching on. And it was introduced originally 91, 92. I think we've got a head start here, to be honest. So maybe half that. Two or three years, and I think we'll see some changes starting to happen, and then.

Okay, okay, here's one simple application. At the moment, we've got, well, about 100 altcoins, more or less. All right? Imagine a world with 100 million altcoins. Everyone, everyone's project, everyone's company, everyone anyone has any idea about, has an altcoin, and they're all traded on some crazy exchange. You can track how much your altcoin's worth against someone else's altcoin, and you can say, hey, I'm worth loads. You're not worth much. How about that?

One more question right there at the back. We're going to do SPV. We're going to design it properly, and it'll be, yeah, it's going to be good. Is that it? Cool. Thank you. Thank you, Gavin.