138 - What's Next? Vitalik Buterin | Part I

well like I don't think there is one vision for what ethereum could do I think there's many different visions and I think once ethereum manages to solve its scaling problems it's going to be in a much better place to help be the substrate that allows all of those missions to happen welcome to bankless where we explore the frontier of Internet money and internet Finance this is how to get started how to get better and how to front run the opportunity this is Ryan Sean Adams I'm here with David Hoffman and we're here

to help you become more bankless what's next with vitalik buterin that is the topic today we're doing this episode in two parts the focus is what's next in general and specifically what's next for ethereum in part one which is being released today we're going through the ethereum road map from a technical perspective this is the short to medium turn in part two we touch on the social the philosophical some of the deeper questions around the thing that we've

built called ethereum and its impact for the world that's going to come out on the following Monday I'm going to give you a teaser of part one before we get into it and also part two part one that's today's episode we're going to get vitalik's reaction on the merge it took eight years to get here how did he feel we asked him that question ethereum also no longer Burns energy what are the green Arguments for proof of stake vitalik makes them and is this whole sustainability thing really a big deal

we get into that subject why did Proof of stake take so long it's in the back of all of our minds we ask vitalik that question as well and he describes the journey to get here to the merge to proof of stake what's left is another question we review the entire road map from a technical perspective we also ask about some concerns is vitalik concerned about staking centralization for instance is he concerned about ethereum's future censorship resistance that is all in part one that is what you

are about to hear today in part two we get into the social and philosophical we zoom out we talk about ethereum holistically is it a network state is it like a country is that what we've created a whole digital country or is it a Dao a decentralized autonomous organization if it is a Dao how in general should Dao's be governed should we govern should we learn from the corporate world and Institute some sort of corporate governance policy or are there lessons for us from the political science uh side of things we ask vitalik

about that we also end with which I think is a really interesting topic I've never heard vitalik cover what's next in AI in artificial intelligence we ask vitalik to speak about AI apparently he just went on a recent trip to Silicon Valley talked to some of the foremost experts in the AI field so we asked come I mean the basics on everyone's mind is AI coming to destroy Humanity or there will there be some peaceful coexistence will there be an intersection with crypto is it crypto versus AI in a cage

match crypto representing decentralized interests and AI on the centralized side also this was interesting to me why vitalik thinks Advanced AI might actually be happening sooner than he previously thought we talk about all of those things on what's next that's in part two that is coming out the next Monday David what were your thoughts in this episode yeah well done on that Intro by the way that was the longest intro that we've done on the podcast thank you uh yeah what what's next is a really good

question and it's definitely the thing that people are asking the current state of crypto as there doesn't really seem to be too much on the horizon in terms like a narrative uh the inflation narrative is gone uh you know Cove is over uh the merge is over with so what is next but there is plenty of things that are next on the ethereum roadmap so this is an updated review part one updated review on the ethereum roadmap just to get that resynced and downloaded into your brain but I really think it's that second part they said the the

episode that's going to come next week uh that I think is the more interesting things and as the world seems to be accelerating Ryan like technology seems to be getting faster uh I know Arc is down in price but doesn't mean it's down in thesis and Kathy's word thesis that the future is coming faster than people expect it to I definitely subscribe to I think vitalik does as well and that start to be be shown in some of his conversations with people outside of the crypto space um like you alluded to in the AI space all of these things are around the

Horizon and so we need to be aware of them because if you're not seeing them coming at you they're gonna Blindside you and you're not gonna be ready for it and so understanding these conversations is the intersections of crypto and AI how Dows operate and how they should be governed and what is the long-term Network state road map for ethereum and what it may become in relation to that I think if you understand these questions you are so far ahead of the rest of the world and so that's the episode that we

try to produce here on this week and next week I will say in the first part there is a section where the terms get a little esoteric and and Technical for you that's where we go through the road map with the merge the Splurge The Purge The Verge etc etc you'll hear it when we get to that part there is another episode that we did with vitalik going through this entire road map more in layman's terms and we'll refer to that there'll be a link in the show now show notes for that some terms like DVT which we didn't defined or SSV this is a distributed

validator technology shared secret validators this is about decentralizing the validator network of course we've also done episodes entirely on this EIP that's an ethereum improvement proposal called 4844 which is basic sharding proto-dang sharding so this scales up the transactions per second on Roll-Ups that ethereum can support one last thing for you premium subscribers a special gift we've actually released both part one and part two today for you so you don't have to wait it's all available on

the premium feed you also will have raw access to the debrief where Dave and I give our thoughts on the vitalik show these are our unfiltered shot thoughts on the episode that was uh and there's a link in the show notes if you have not gone premium upgraded your membership from free to premium you can go do that and get access to the full episode now well without further Ado our episode with vitalik buterin but first a word from our sponsors rocketpool is your friendly decentralized ethereum staking

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his website you gotta check out I read whenever an article is published at vitalik.ca uh and there's a book out called proof of stake which is a compilation of many of those blog posts came out earlier this month he also happens to be the guy who wrote the ethereum white paper vitalik welcome to bankless post proof of work post merge how you doing uh great I'm you know obviously yeah we're really happy that this uh big long

eight year journey is uh finally at its completion um you know really yeah happy that proof of stake is uh here and it's fully here it's running it's uh actually powering the ethereum chain the whole transition seems to have happened even far more smoothly than pretty much anyone including myself expected and you know just happy that that whole chapter and you know the chapter of all of the

various uh trolls on the yadsworth are doubting whether or not river stake is even possible is over in the ethereum ecosystem it now gets there I'm gonna move over and start focusing uh Full Speed Ahead on the next thing yeah so what are the trolls going to uh focus on after the merge is done now that we have proof of sake because they're not gonna they're not gonna just uh you know wave the right flag right they're gonna move on to the next thing that's a good question yeah I mean I think uh if I was a troll I would probably be waving one of two flags so like one of the flags you can wave is obviously that uh proof of stake is

actually bad and uh the other flag you could wave is that sharding will never happen right and you know like if you want to wave the flag of uh sharding never happening then you know there are arguments that you could make about how like oh you know the yeah peer-to-peer networking of data availability sampling is actually complicated and that stuff is uh not gonna happen in actual ethereum is going to hit scalability bottleneck soon and uh you know blah blah blah blah but like betting against the ethereum ecosystems ability to

produce technology is something that clearly does not have a very good track record so I think uh yeah I know if I was a troll I would definitely kind of stick to the ideological side and just try to argue that Brew mistake is bad somehow uh vitalik you said that this the merge was even smoother than you expected uh so I'm wondering if you could just like put us into the mind of italic as we were going through the merge because this has been I mean the beacon train launched of course in December of 2020 but proof of stake as an idea has been

along even longer than that and efforts on the beacon train has been uh you know started before the beacon train launched of course uh so this has been a long time coming uh so how does it feel to be in the post-emerge world and uh what was it like to be watching this thing go through uh and also what was it like to be watching the world watch ethereum In This Moment yeah so I think one of the reasons why we're all surprised that the emerge went really well is that none of the test that

merges really quite went that amazingly smoothly right like the yeah most recent merge before the uh real one I think it was uh think the robsten merge uh yeah it even did not finalize for about an hour because uh slightly more than a third of all of the nodes did not make it through the transition and there was some code glitch and they had opted um one of the merges before like it only had something like 80 online like there was always some client combination that

just did not survive the transition um and you know there were various bugs I think uh one of the reasons why that ended up not carrying over to the mainnet and the main that ended up going great actually is that a lot of the bugs were not really bugs with the implementation there were bugs with the settings right this is the test Nets they all tend to have you know various weird and like settings choices and people are just less used to connecting in the test that's and uh update making sure they're connected in the right way than they are with the main Network and

so we ended up having a lot of bugs on that side but if you're just watching as a more naive Observer from further away you might think like oh you know every one of these tests that merges had at least a bit of an issue and uh you know surely the main one is gonna have even more problems just because it's a much bigger ecosystem and you know it's all of these thousands of people and we don't have as good an ability to immediately reach everyone but you know no and uh actually the main that merge just went incredibly smoothly

so I mean the process of what waiting for the merge to happen you know it was uh in some ways surprisingly uneventful like uh you know there was a call there was a zoom call and uh everyone will or at least lots of people were on that call and I'm sure lots of people are on other calls as well and uh we were just uh you know talking about what the merge is talking about what the merge means for the world and uh then you know after

we got through a few speeches it's like oh wait okay now we're less than uh five minutes away and then everyone just started waiting for the countdown and uh eventually you know the total terminal uh the terminal block which is the block that surpasses the total terminal difficulty was hit so that's the block that like surpassed the threshold for basically how many hashes the proof of work chain is supposed to do before it turns off uh and uh that was hit and then immediately after that the first proof of a stake block happened and

everyone celebrated and then we waited um you know it's 12 minutes for it to finalize and then we finalize and then everyone celebrated again and uh like that was basically it that's really not so simple yeah easy right we should have done this years ago but but uh vitalik um to David's kind of second question part of I I think the interest from the ethereum communities is watching the world react to the merge right and and you were mentioning the trolls earlier

and you know if you were a troll what you'd do is probably like uh argue that proof of stake is a bad idea entirely as I was like looking at the world's reaction that there was one thing that kept popping up in mainstream media and that was this energy reduction narrative this decrease in electricity cost and I do think that trolls at least from a mainstream perspective right are going to have a hard time arguing with mainstream that proof of work is superior to proof of stake from a you

know a green perspective from a climate change perspective but what's your take on this the whole eth energy reduction thing do you think that is overrated do you think that it's it's underrated how much does this actually matter in the scheme of things yeah and I think there's a couple of uh levels at which you can look at that question one is the object level issue of like how important uh the climate issue is and how big of an impact the switch to approve of stake is on the climate right so I think my view on the

climate issue is kind of fairly boring and moderate which is like it's not a literal existential risk in the sense that you know it's uh not going to kill anywhere close to the number of people that like you know something like World War III would but at the same time it's a like a really crappy and terrible thing and uh if you look at you know the studies of uh what worst case global warming could lead to it's like reducing the GDP of some of the already poorest countries in the world by like a factor of two or three right so it's uh a uh

you know quite a a big deal as far as big deals that actually exist in the world are concerned and I think anything that we can do to try to move beyond our carbon heavy presence is uh definitely a good thing and I mean obviously there are all these um arguments that uh proof of work proponents uh like to trot out that like oh you know actually this is incentivizing uh green energy production or actually this is using energy that

would not be used for other purposes because proof of work is really good at like finding the energy that would not be useful anywhere else but now generally when I look at those arguments from far away they always have this kind of feeling of self-serving bias it's like it just feels like the algorithm that these people are running is like not like oh you know let me neutrally figure out whether or not proof of work is good or bad it's like oh let me yeah try my best to come up with Arguments for as you know like soldiers in this uh rhetorical war of and you know like help

me justify the cause I already decided long ago I stand for but you know you're saying it's in a convenient rationale it's like oh it's really convenient that proof of work people think that proof of work is green totally like it's the arguments to me feel like imagine if uh someone from uh Philip Morris came to you and said like hey you know Philip Morris is actually an incredibly ethical company because we're contributing to the incentive to cure lung cancer right right like this

is basically what happened yes um and then you know there's all of these like methane like flaring things and uh I think the the challenge with them is that like you can always identify you know like these really specific situations where there's something really unusual about the yeah energy Market but like the more you zoom out and like think about this in the one game it's like you know no if if if you consume energy then that Inc

on it increases energy consumption and uh energy consumption for the next while is is going to contribute to climate issues and you know there are going to be like this little discrepancies in uh both directions but the little discrepancy is over time they're just going to I think average out but just like the one big fact in the center of it is the thing that's going to dominate uh so ye I think yeah like you know people argue that you know proof of work is like a good at

sort of grabbing those little nooks of energy that nothing else is because proof of work has this special property that you can do it from anywhere but at the same time proof of work has this property that if you want to make good use of your Hardware you have to keep it running 24 7. right like this concept of oh I'm going to only turn on my Hardware at those specific times when there is spare electricity and otherwise I'm going to shut it off like that's total BS right because just because like the heart proof Hardware cost is a big portion of the all proof of work cost

and so if you want to be competitive um you know you have to use your machine and you have to make good use of your machine until uh Moore's Law causes that machine to expire and requires you to replace it with a better machine uh so it yeah in general I'm I guess uh on the whole not convinced by any of that and I think you know reducing energy consumption is uh good and great and I'm immensely glad that we as an ecosystem have done it so that's the first level of the question right the second level

of the question is uh I guess from a kind of more selfish ethereum ecosystem uh point of view like obviously yeah the fact that we're not contributing to Breaking the environment anymore is uh good for for ethereum from a narrative perspective and uh I think there are lots of signs that this is actually true like I've personally talked to a bunch of people in you know corporate and government contexts and just lots of different voices that are like hey we want to do blockchain stuff but there's

just too many people within our organization that are really don't want to be contributing to um you know making the planet blow up and you know if the merge completes then like a lot of them have even said like you know yeah I'll be much more excited about using ethereum and I think a lot of that's true I think the subconscious line of thinking that at least some of these people that I'm kind of dismissively referring to as trolls as uh referring to is trying to make is like oh

you know this environment thing is like a centralized World economic Forum ideology and uh chances are if you're into that stuff then you're into a centralized World economic Forum stuff uh generally and so like most of people who care about that are going to also care about um you know making sure we have Global Financial surveillance because they think that's the only way to prevent crime or whatever and so why are you even trying to go after those people and uh so you know the people that you crypto should be going after are like

these sort of Steely based people who understands that like that centralized World economic Forum ideology is uh is total crap and like actually the environment's gonna be fine and like methane is great for the environment and everything's going to be solar within five years anyway and so like I think there's this sort of implied subconscious viewpoints that you know really there's just two kinds of people one or the other and uh the yeah the world economic Forum bug eaters are a lost cause and so you might as well go

after the baseball people and the base cool people don't really care about the environments and so you might as well use proof of work but I feel like that Viewpoint is just false like I've just didn't I don't know if I you know talks to lots of people I've been to like 53 countries now and uh you know chatted with all kinds of people in various Industries and governments and like I don't think it's true that like there's this binary and I think there's plenty of people that like really do deeply believe in the uh you know the

freedom thing and the open source thing and the uh you know decentralized uh like censorship resistance Global Mutual platform thing but it's like also do you care about like not blowing up the planet at the same time and like I feel like the ethereum and community in general is probably a sort of more you know on average uh it's also toward that middle though there's definitely people on uh on all sides of the spectrum so I mean you know it it sort

of ties into the uh social and cultural bet that I think uh ethereum is making that uh some of those kind of Hardcore proof of work proponents are taking the opposite side of the bet so you know I'm happy with the side of the BET I've made and I yeah I keep making it so we'll see by the way for YouTube viewers the reason David and I have a smile in our face is because we just noticed a vitalik's login name is uh Adam back which is uh maybe one of the CEOs yeah

of the Philip Morris is fighting for proof of work uh but vitalik can can I ask you um is it material like it is the difference between ethereum switching from proof of work to proof of stake is that does that have an actual material impact I think you tweeted out a Justin uh Drake figure and I'm not sure where he got this number where he sourced it something like a 0.2 reduction on worldwide electricity consumption which feels very material what kind of numbers

have you seen and are these actually material numbers or do you think it was like Much Ado About Nothing All Along and uh the 0.2 percent figure definitely roughly lines up with other statistics that I've seen right like we've seen statistics that like ethereum mining uses about as much electricity as my thank you as either half of Singapore sometimes or Austria sometimes and like those countries are about 0.1 percent of the world population but they're a wealthy 0.1 percent uh so I

think uh if you just look at all those different estimates like somewhere vaguely in the 0.2 percent range does make sense um I mean the one argument that I have seen people make is that like oh that hash power is not going away it's just going to go to ethereum classic but and that's clearly true to some extent in the short term but just obviously can't be true on the medium or long term right like in the medium or long term like we've basically reduced the amount of uh Eve um reward that goes uh gets paid out to

people who participate in like GPU style proof of work by probably a factor of 10 right and so in the medium and long term the amount of effort going into that style of proof of work is also going to go down by a factor of 10. yeah yeah we've certainly reduced the incentive therefore it should it should follow that there will be less minors in the future we were talking to Danny Ryan and tobacco yesterday on on the live stream uh and Danny gave out this metric that I want to run by you where yes we killed 0.2 percent of global electricity

consumption but he said that if ether price went 10x then it would have actually have been two percent and I'm wondering if that's how the math checks out and and so like really it's like yes we killed it at point two percent but if we believe that ethereum is going to be the global settlement layer of the future of everything then the future energy consumption that we eliminated it's actually much more significant and that is actually the bigger story I'm wondering if that math checks out on what you think about that yeah I think I fully agree with that I

mean it you know obviously all depends on your projections for just how big the ethereum and uh crypto thing is going to get uh but uh in the bold cases where ethereum keeps becoming a more and more significant thing then yeah absolutely it's a much bigger savings than 0.2 percent mm-hmm vitalik um like like we alluded to earlier the road to proof of stake has been long and winding uh with a few dead ends a few backtracks and then moving forward to where we ultimately got here

today um but for the listeners that came in during the 2021 bull market or later in 2022 uh they might not know why ethereum proof of stake took so long so I'm wondering if you can kind of just for the listeners that weren't here in the eras of 2017 to 2020 kind of give a recap of to the journey thus far like why did Proof of stakes take so long and what were the uh the dead ends and the roads uh that we almost went down what were the some of those that path like yeah you know so

the road map public really did change a huge amount over the last few years right like the at in the 2018 17 to the beginning of 2018 there was this whole Casper FFG concept where we would basically build the proof of stake system as a smart contract on top of the proof of work chain um and then step one would be to kind of get that running and then step two would be to you know have this kind of

separate charting chain and then we would really slowly migrate the thing and then before 2017 the roadmap was something even more different it's like hey let's start a new chain from scratch and then basically just completely retire the existing one and uh demand all of the applications to actively move over the in and then in the middle of uh 2018 um Justin Drake made this post on a pragmatic PLS aggregation where he

argued that the ethereum blockchain should make really heavy use of BLS aggregation in order to support as many validators as possible and be able to be a more decentralized chin and that I think ended up being a really prescient decision ended up really simplifying the architecture and helping us a lot but the one of the consequences of that meant that we would not be able to actually yeah build the thing as a smart contract and instead it

would make much more sense to build a new chain and then find some way to like migrate the ethereum system over to it over time and so work on the beacon chain started now then simultaneously there was this parallel track of uh working on different ways of how to transition existing ethereum into the yeah Beacon chain right so in 2018 to 19 there was this concept of execution environments where it's like you can think of them as being sort of like

Roll-Ups except much more in shrines and where where the chain would not just provide data it would also provide a minimal execution layer and the idea is that the existing ethereum system would become one of those roll ups I think back then we were also really contemplating trying to upgrade from the evm to webassembly and that's one of those things that we ended up dropping over time right like one of the unfortunate things that I think was necessary as part of the merge was that there were a lot of dreams that kind of

got dropped and the ambition did end up decreasing a bit so the desire to improve the VM ended up kind of dropping off and part of that was definitely just us noticing that out of all of the East Killers the only ones that really had significant success were the ones that just uh accepted the evm and the ones that that tried to argue that oh the evm is total crap and will replace it with something much more performance it ends better look those maybe with the exception of uh Solana ended up kind of falling off mostly