Kind: captions
Language: en
the following is a conversation with
sergey nazarov
ceo of chain link which is a
decentralized oracle network that
provides data to smart
contracts he and his team have done
seminal research and engineering in the
space of smart contracts
check out the chain link 2.0 white paper
that i found to be a great overview of
their technology and vision
it's 136 pages but very accessible
quick mention of our sponsors wine
access
athletic greens magic spoon indeed
and better help check them out in the
description to support this podcast
as a side note let me say that
externally connected smart contracts
that combine the ocean of data out there
with the security of the blockchain
are fascinating to me both technically
and philosophically
data is knowledge and knowledge is power
i think the more reliable data sources
we integrate
into our decision making especially
when those decisions are executed by
programs the more efficient and
productive our decisions become
there are interactions between humans
that should not be formalized digitally
like love for example but for all the
others
there's no reason for smart contracts
not to automate away
the menial parts of life making more
room for
good conversation over brisket and maybe
some vodka
with old and new friends this is the lex
friedman podcast
and here is my conversation with sergey
nazarov
is that yorzuk there he so i gave away
everything i own
a few times in my life and he
accidentally survived
and i don't like stuffed animals what i
really liked about i got him in a thrift
store what i liked about him is because
i'd never seen a stuffed animal
that looks pissed off at life like
they're usually smiling in a dumbest of
ways
and this guy was just pissed yeah i
gotta tell you that's
actually pretty funny i like this guy if
you had to live
only in the digital world or the
physical world
which would you choose so i i think this
is actually a question
more about what the fidelity of the
digital world would be
versus the physical world i i think this
this type of question this whole
simulation thing actually comes
from papers about 20 30 years ago in in
the philosophical world where people
try to make this thought experiment of
of would you be comfortable
if if everything that was happening to
you happened in a simulation
what they were trying to do is they were
intuitively trying to understand
is is there some kind of intuitive um
personal connection we have to something
being the real world
right and then the matrix movie actually
came out of these papers
and then these ideas made its way it
made their way into the public
consciousness
um i personally think that if i had the
choice to be in the digital world at the
same fidelity
as the real world with immortality i
would absolutely go with the digital
wait wait wait wait wait how'd you add
the immortality part
that's a won't get immortality if you
think about how we would go into the
digital world right our our our brain
patterns would be mapped
onto some kind of uh probably virtual
machine right
and that would mean a multi immortality
right because the virtual machine has no
limit
to how long it can be don't you think
there will be like a versioning system
like uh there'll be this is a soft
fork versus hard fork question whether
sergey version
2.0 would be different from sergey
version 1.0
there'll be an upgrade so that's
immortality sergey 1.0 would die in the
digital world and you should get
you get like a software update and then
that's it
you know well yeah when people go into
the star trek transporter are they
killed or are they transported
i i don't really know i haven't read any
papers on this i haven't really thought
about it too much there's no white paper
on the transporter
not not at this point so what what does
fidelity mean exactly
to you is it like strictly so the
fidelity of the physics world
the physical world is maybe now
questions of physics
quantum mechanics what is at the at the
bottom of it all
right or do you mean the fidelity of the
actual experience it's just it's just
perception
it's just just the human but that's
limited by human cognitive capabilities
it is but i don't really have anything
else right i think all of these papers
that brought up these questions of a
simulation they were like
in epistemology and metaphysics right
and what they were trying to do
i think was they were trying to put
people through a thought experiment
where
they would come out on the other end and
say the
reality of life is really worth
something and i don't
i don't you know ignorance isn't bliss
which is that's the consistent statement
in the matrix right ignorance is bliss
is that that's what one of the guys says
when he's like you know doing something
wrong and
trying to get back into the matrix and
and the question is is ignorance bliss
um and it's like a different version of
that i
i think from a perceptual point of view
if my perceptions
aren't in any way different so fidelity
is very good
it doesn't matter now i i don't know
right so if i
that it's if i don't know something it
doesn't really exist and if it doesn't
exist
in in in my perception or my
consciousness then it doesn't exist
period for me at least and then whether
it exists in some
you know more metaphysical um version of
things
i i personally never really got into the
metaphysics stuff because i i could
never really um
i couldn't understand what the point of
it was right it it
it's one of these things where i
couldn't really get what um
what the what the practical application
of it was and this is this is from those
realm of questions right like
if there was something about the world
but you didn't have a
capacity to perceive it would it matter
to you
uh to me it wouldn't matter right to me
to me by the way the simulation thing is
a really interesting engineering
question
which is how difficult is it to engineer
virtual reality a digital world that is
sufficiently
of high fidelity where you would want to
live in it i think that's a really
testable and a fascinating engineering
question because my intuition says like
it's not as difficult as we think
it's not nearly as difficult as having
to create
a quantum mechanical simulation that's
large enough to capture the full human
experience like
it might be just as simple as just a
really nice quake game
like with a nice engine with you know
that just creating all the basic visual
elements
that tricked our cognitive our visual
cortex into believing that we're
actually
in the physical environment and i think
that
if that's true then that's quite you
know that
a high fidelity digital world is
actually achievable within
you know a century and and that changes
things
yeah yeah maybe maybe in my in our
lifetime i'm really hoping for that i'm
hoping somebody can copy my brain waves
onto a virtual machine
yeah and uh you know allow those uh
allow that consciousness to continue to
exist
whether that's that's death or not i
don't i don't know
but i i think it's actually um gonna
require some serious leaps like even
even the vr headsets right
they um don't work if they go below 90
frame rates
right people people start getting
freaked out so you have to go from one
gaming screen of you know 60 frames per
second to two screens of 90 frames per
second
and so the people's hardware today can't
even handle that and that's for these
for these two little screens by your
eyeballs
what it's going to take to like you know
completely trick my consciousness
into not knowing the difference in terms
of like you know all the
sensory inputs um my i'm keeping my
fingers crossed whoever whoever whoever
does that
and and is close to doing that they
should contact me i i want to have my
brain waves
turned into a virtual machine would you
in that context if morpheus came to you
would you take the blue pill or the red
pill
meaning would you be happy just living
in that world
and not knowing that you're living
inside that virtual world that's running
a computer
or would you want to know the truth of
it well actually
i think that's a very different question
right there's a there's a there's a
actually moral ethical question there
about whether you should allow a bunch
of people to get you know manipulated
and killed and slaved because in the
matrix they're all enslaved and
in as as as as like you know a triple a
battery
to turn a human being into the battery
right um
so i i think the the moral and ethical
question of that
fascinating enough isn't actually
different than the more unethical
questions we face today
in modern daily life but i
probably have given the choice of just
completely going along
or going against it i would probably go
against it
if i had to make this kind of binary
choice because going
going along with it
i think at that scale of scary you know
stuff happening to people
is is probably something really um
really really difficult
but for your individual life it's way
more fun to go along with it
so you're saying you value
the opposing a system that includes the
suffering of others
versus just for yourself and enjoying
the ride
i mean what what's what's if there is
such a binary choice
why choose the opposite system i think
it's the nature of um kind of the
ethical dilemma that you face in that
situation
there's kind of some you know this is
obviously not something that's happening
now right
we don't know this right
at the end of the day at that scale
of of something like that happening yeah
that scale
of of people being um you know
manipulated and harmed
then i think pretty much almost all
people have an obligation
to go to go against it uh
probably that's what that that looks
like in my opinion
so you've talked about the concept of
definitive truth
what is it and in general what is the
nature of truth in human civilization
and just talking about the digital age
uh the nature of truth in the digital
age
so the interesting thing about
definitive truth is that it actually
exists on um on this at least in my mind
on this spectrum
between objective truth and just you
know somebody
uh made something up and nobody else
agrees so what i
what i think definitive truth is is it's
somewhere in the middle on that spectrum
where if you and me define
uh what truth is right like if you and
me have an agreement of some kind
and we say as long as the weather
is sunny or the weather isn't there is
no rain on that day
then there will be an insurance policy
that results and you and me both agree
that as long as three sensors
three monitoring weather monitoring
stations all say that
then the definitive truth for us and for
that agreement
is the result of of those systems
coming to consensus about what happened
out in the real world
i i think the objective um truth
definition
from from kind of the philosophical
world is really really
stringent and very very hard to attain
and that's not
that's not what this is and that's
actually not what commerce
or the ability for people to interact
about contracts needs
what i think the world of commerce needs
is an upgrade
from someone can unilaterally decide
what the truth is
two there can be a pre-agreed set
of conditions where we define what the
truth is
under those conditions and then you know
you and me basically say
if these 20 nodes or of these 30 data
sources
come to consensus within you know this
method of consensus with this threshold
of agreement
then definitive truth has been achieved
for you and me in in our relationship
for this specific agreement and the
specificity and
and our shared agreement to that kind of
truth or that definitive truth
being acceptable to both both of us is
is probably what's
what's um kind of necessary and
sufficient for everything to move
forward in a better way
in any case much better than you know
i'm a bank or an insurance company
i'm going to unilaterally decide what
happens it's it's definitely an upgrade
from that
do you think it's possible to define
formally in this way
a definitive truth for many things in
this world like you talked about whether
basically defining that if three sensors
of weather agree
then that we're going to agree that that
is a definitive
useful truth for us to operate under
so how many things in this world can be
formalized in this way do you think
uh a huge a huge amount so so there's
there's actually
um two two things going on here
one thing is the amount of data that
already exists right and the pieces of
data coming off of
you know markets iot shipment of goods
any any number of other things like even
even your youtube channel has a certain
amount of likes
or a certain amount of clicks or certain
amount of views and even that's
quantifiable right so even
to a certain degree what we do here
today you and me right now
can be quantified as far as the amount
of views the amount of
clicks the amount of any number of
others you the viewer have power
of data in your hands by clicking like
or dislike right now
or the subscribe button or the
unsubscribe button which i encourage you
to do
anyway okay so there's data flowing in
into
all interactions in this world there's
data there's more and more data right
like
more data more and more data that data
is more and more accessible to everybody
and that accessibility and the fact that
there's more of it means we can form
more definitive truth
proofs we can form more and more proofs
and as we form those proofs
well we can provide them to these
blockchains and smart contract systems
that consume them
and then they're tamper proof right so
they can't be manipulated
and so now we've combined a system that
can prove things with a system that
guarantees us certain outcomes
and we have a better system of contracts
which is which is
uh actually an unbelievably powerful
tool that has never existed before
can we talk about the world of commerce
and finance decentralized finance
what is it uh what's its promise
from both the philosophical and uh
technical perspective if we just zoom in
on that particular space of the
digital world sure so the the
centralized finance
is the instantiation of a specific type
of
smart contract right or what i call
hybrid smart contracts
which are these contracts that combine
the on-chain code together with the
off-chain
proofs that something happened that's
they're called a hybrid because they
basically use both of these systems
right the blockchain
and the proofs about what happened and
what defy
is is one specific type of hybrid smart
contract that
is taking on the contractual agreements
you traditionally find
in the financial global financial system
right and and that's basically the world
of lending the
the world of yield generation for people
giving me or giving giving whoever their
money and
and somebody giving back them yield back
to them which is what bonds do and what
treasury's doing what a lot of the
global financial markets do as well as
the ability to gain
exposure and protection from different
types of events and risks
that's a lot of what derivatives do
right derivatives allow us to say hey
something's going to happen
and i'm either going to protect myself
by getting paid if it happens
or i'm going to benefit from it
happening by basically saying it's going
to happen putting money down on that
and that prediction will get me a return
now
that's a lot a very large part of the
global financial system
excluding all the stuff for global trade
and letters of credit and all the stuff
that facilitates
international trade so excluding
excluding that at least for now
so if we look at what decentralized
finance does it takes
all of those agreements about generating
yield lending
and all of these types of things you
find in global finance and the world of
derivatives
and a few other types of financial
products and it basically puts them
into a different format right so the
format you have
for centralized financial agreements is
that you go to a bank
even if you're a hedge fund even if
you're like the richest people you you
go to a bank
they make a product for you and you hope
that they honor the product that they
made for you
or you do a deal with another hedge fund
or or or whoever some counterparty
and you hope that that deal is honored
yep
and then um a number of very freaky
things start to take place
one one of them is people don't have
clarity
about what the agreement is right so a
lot of people don't know
exactly what the agreement is between
um between those parties because they
can't actually see it
sometimes agreements are kept very
private or parts of them are kept
private
and that keeps you know other
counterparties other people in the
system from understanding what's going
on
this is actually partly what happened
with the mortgage crisis the mortgage
crisis in 2008 was basically
there were a lot of agreements there
were a lot of assets but because the
centralized financial system worked in
such an opaque way
it was so unbelievably difficult to
understand what was going on
right and so that lack of understanding
for the global financial system
basically led to a big boom
and then correspondingly very very big
bust
which amazingly enough had a huge impact
on everybody even though they didn't
participate in the boom part of the
of the equation um in in any case
what decentralized finance does is it
takes these
financial contracts that power the
global financial system it puts them in
this new blockchain based
format that basically at this point
provides three very powerful things
the first thing that it provides is
complete transparency over what's going
on
with your financial product so this
means when you use a financial product
in the d5 format
you and you as a technical person
actually can drill down
very very very deeply and you can
understand
where the collateral is you can
understand how much collateral there is
you can understand what format it's in
you can understand how
it's changing you can understand this on
a you know second to second or block to
block basis
right so you have complete transparency
into what's going on
in the financial protocol that you have
your assets in
which is because blockchains and the
infrastructure all of these things
are built on force that transparency
right whereas the centralized financial
system is very very good at
hiding it it's very good at hiding it
and packaging things in a glossy wrapper
creating a boom then a bust
decentralized finance is built on
infrastructure that forces transparency
such that everyone can understand what
the financial product does from day one
and in fact escaping that property is
practically impossible or if someone
tries to escape it
it becomes immediately obvious and
people don't use their financial product
so so that's number one number two is
control
so if you look at what happened with
robin hood everybody thought the system
worked a certain way right everybody
thought i have a brokerage account
i can trade things under you know a
certain set of market conditions
and then the market conditions changed
within the band of what people thought
they could do and everybody was
fascinated to find out
that oh my god i thought my band of
market conditions in which i can control
my assets is x
but it's actually y it's actually much
much smaller band
and the the reason it is a much much
smaller group of market conditions
is that the system doesn't work the way
people think it works
the system was wrapped up in a nice
glossy wrapper and given to them to get
them to participate in the system
because their system requires and needs
their participation
but if you actually look at how the
system works underneath
you will see that it does not work the
way people think they that it works
and this is actually another reason that
defy is so powerful because defy
actually and and these blockchain
contracts give people
the version of the world they think they
already have
which is why they don't beg for it right
so everybody thinks they're in a certain
version of the world that works in this
reliable way
transparent way they're not they don't
realize it
and so they're confused when you tell
them i'm going to make the world work
this way because they think they're
already in that world
but then things like robin hood make it
immediately painfully clear that that's
not how the world works so that the
second real property of defy is control
which means that you control your assets
not a bank not a broker not a third
party you
you control your bitcoins you control
your tokens in the finance protocol
if you don't like how something's going
in that protocol you can remove it you
can send it to another protocol
or you can use a feature of the protocol
to do something it's supposed to do
and guess what nobody can just say oops
you know that feature that isn't so good
for my friends over here
you know that feature is actually you
know we're just going to pause that
feature in the critical moment
when you need it to to to execute your
you know your strategy which is why you
took all the risks to begin with
and then the final reason um you know
the final thing to know about d5
is that d5 is inherently global and
actually right now
provides better yield globally so if you
go to a bank right now with the us
dollar
you get one percent or less if you go to
d5 with the us dollar
you get seven or eight percent so
if if we think about that um in in a
world where there's a lot of inflation
coming down the road
and we think about well
you know a lot more systems might be
failing soon
and and and they might be highlighting
these types of problems that were there
for
or as a result of the type of control
that you see in
in robinhood and people are more and
more concerned
about both transparency and control and
they're looking for yield to combat
inflation
um i i think that's what defy is about
in a practical sense
it is this clarity about your risk it is
control
over your assets and amazingly at the
same time as having those two
unbelievably useful properties
it is actually superior yield which
which
which which which just leads me to the
very obvious conclusion that
the only reason defy isn't more used is
because more people don't know about it
and by virtue of this long kind of you
know
explanation here and here and elsewhere
more people will know about it
and it's just such an obviously superior
solution that i i haven't heard a single
explanation as to why
um no no don't earn eight percent and
take less risk and have more
transparency
with your assets earn seven percent less
take more risk
and um give people the ability to change
the rules on you at their discretion
go do that who's going to do that and in
general
on the first two of transparency control
first of all i do
think maybe you can correct me but from
my perspective
they're they're like deeply tied
together in the sense that transparency
gives control
transparency creates accountability and
and there's this kind of
game being played game game theoretic
game where if i know
if you know i'm going to discover your
deviation you're not going to deviate
yes this could be a whole other
conversation but just as a small aside
on the social network side of things
which i've been thinking deeply about
in the past year or so of how to do it
right
there how to fix our social media
and i tend to believe that
human beings if they're given clear
transparency about which data is being
stored how it's being used
where it's being moved about just all a
clear
simple transparency of
how their data is being used and them
having the control
at the very minimal level of being able
to participate
or to walk away and walk away means
delete everything you've ever known
about me
that that will create a much much better
world
that currently there's a complete lack
of transparency on social media how the
data is being used
for your own protection i mean there's a
lot of parallels to the central bank
situation
and there's not a control element of
being able to walk away like being able
to delete all your data
delete your account on facebook is very
difficult
it doesn't take a single click which i
think is what it should take there
should be a big red button that says
delete everything you've ever known
about me or like forget me
so i think that couple together can
create a very
different kind of world and create a an
incentivization
that will uh lead to like progress and
innovation and just like a much better
social network
and a really good business for
the future social networks but so i tend
to see like control
as naturally uh being
a sort of an outgrowth from the
transparency it should all start the
transparency which is why the smart
contract formulation
is fascinating because like you're
you're formalizing
in a simple clear way any agreements
that you're participating in
and as a side comment also what's really
inspiring to me
is that i think there's a greater i
don't know if this is always the case
but it seems like from having talked to
people on the psychological element
there's a hunger amongst people
to for transparency and
for control like transparency another
word for that is authenticity
if you look at the kind of stuff that
people hunger for now
they want to know the reality of who you
are as an individual so that means you
can create businesses you can create
tools that are built on authenticity a
transparency
and then the same i'm inspired by
the intelligence of people if you give
them control if you give them power
that they would make good choices that's
really exciting
of course not everybody but that means
that decentralized power
can create effective systems
so couple that there's a hunger for
transparency so we can move to a world
where everyone's being just like real
you know
conveying their genuine human nature and
people are sufficiently intelligent that
if you're if they're given power
in a distributed mass scale sense that
we're going to build a better world to
that
as opposed to centralized supervised
control where only a small percent of
the population
know what the hell they're doing
everybody else is clueless sheep
i'm i'm so those two coupled together is
really
to me inspiring just to really quickly
comment on the stuff that you just said
which i think is super
super super fascinating um i i think
that's all exactly right
i think everything that you said is is
right and i think it's actually going to
be the same for social media and banking
and every other type of contract
is that all of those systems that house
people's value for them
and take control of of either their
social media value
or their financial value or whatever for
them
all of that is going to be made
available to people in like this
autonomous piece of code that does the
same thing that the centralized entity
used to do
so they get all the features but the
autonomous piece of code
gives them the ability to have control
while getting all the features
right so so banks give you features
social media sites give you features
you know whatever other system that you
use online gives you features
and then it takes your data and it takes
control of your assets from you
in return for those features right i
think the whole big difference here
partly in line with you know the
definition of smart contracts and its
evolution
is that there's this uh now this this
autonomous piece of code
that's giving you all those features
without
requiring the ownership and lock-in
and control and unilateral kind of
ownership of your data or your value
or or whatever it is that that you're
giving it right
and i think what this will lead to
fundamentally
is just more of a free market dynamic
among how
people make i i think with the social
media folks you should you should just
make some kind of law or something where
you can just export all your data from
them
everyone should be able to get their
data exported by another application
and then the network effect of all these
social media sites will kind of crumble
because people will just
combine your twitter data with your
facebook data with everything else
into an application that you control and
there will just be
thousands of different interfaces
competing for how to consume all the
social media data
because it isn't locked in in one
centralized actors control
and so this is this is just the
recurring pattern of what i think all of
this will do
is it'll give peach it gives it gives
people a better deal right it gives them
features
without ownership of data without
ownership of value
and and and that's really the difference
so i think this is a good place to talk
about smart contracts then can you tell
me the history of smart contracts
and the basic sort of definitions of
what is it
sure so i think smart contracts as a
definition has actually gone through
some through some kind of changes or
small evolution
initially i think it was actually a
conception of a digital agreement
that was tamper-proof and could know
things about the world right so it could
get proof
and it could define that something
happened and it could conclude
an outcome and release payment or do
something else that's actually the
definition of smart contracts
that i began working in this industry
with seven or eight years ago when i
started making smart contracts
that is the conception that i had of a
smart contract
then what happened was that was really
hard to do right
building that type of tamper-proof
digital agreement that could also know
things about the real world
and release payments back to people
about those events that were codified in
this tamper-proof format
was actually a very tall order turns out
it's consistent of three parts it's
consisting of the contract
the proof about what happened and you
know the release of value
the way things have evolved so far is
that
the definition has now come to mean
on-chain code
right so it's come to mean the
codification
of contractual agreement on a blockchain
right so there's some code of somewhere
on some blockchain
that defines what the agreement is
now that eliminates the part of the
definition that's related to knowing
things about the world
and it partly eliminates the definition
about payments and and stuff like that
but basically it's it's on chain code
right we in in our recent work on
on the second white paper have actually
put out a different definition
that we call hybrid smart contracts that
actually tries to go back to the initial
definition
that i started with seven or eight years
ago which basically says
that there's some proof somewhere that's
proven to the contract and the contract
can know that
and the contract can gain proof then it
can use that proof to settle
um the agreement that's codified on a
blockchain
so you you both need a mechanism to
provide proof you need a mechanism
to codify the contract in a tamper proof
way on something like a blockchain
and then as with all contracts there's a
presumption that there's some kind of
release of value
so i think a smart contract in our
industry right now
means on chain code which limits it to
whatever can be done on chain
only and then in in our internal
definition for us
and for us at chain link and for me um
it's hybrid smart contracts
which is actually the original
definition it's the it's the idea that a
contract
can both know what happened and
automatically
resolve to to the proper outcome based
on what happened
so you're referring to the chain link
2.0 white paper which is
uh paper that i recommend people look
it's a very easy read and very well
structured and very thorough so i really
enjoyed it
very recently released i guess can you
dig in deeper what is a hybrid
smart contract you mentioned sort of
this idea of data
or knowing about the world and on chain
and off chain so what are the different
roles in this so hybrid by the way
refers to
the fact that it's on chain and off
chain contracts
so maybe digging deeper of what the heck
is it
and what does it mean to know stuff
about the world from
like how do you actually achieve that
yeah absolutely
so the on-chain part is where the
agreement itself is
that's the smart contract itself and
that's where you codify
certain conditions such as the
conditions under which an interest
payment is made or the conditions under
which the the contract pays out the full
amount that it holds
to someone based on a derivative outcome
or something like that
now what the on chain code is very good
at is creating transparency about what
the core conditions of the contract are
it's very good at taking in money from
other private keys that send it
tokens and send it value to hold and
then it's also very good
at returning money or returning value
back to other
addresses or other private keys it can
also be involved in governance it can be
involved
in a few other private key signature
based
operations but primarily the on-chain
part of a hybrid smart contract
from what i've seen so far defines the
agreement
takes in value and returns value uh
based upon the conditions codified in
the agreement on a blockchain
the second and equally important off
chain part
is where the term oracle and oracle
comes in or an oracle mechanism or a
decentralized oracle network
as we describe it in the paper and this
is another
decentralized computational system
that has a different goal right so
blockchains
have the goal of packaging transactions
into blocks
and connecting them in a crypto
cryptographically unique way to create
security and assurance about
that chain of transactions oracles
and decentralized oracle networks
achieve
um consensus and they achieve
decentralization
about the topic of what happened right
so blockchains
structure transactions some of those
transactions might be the state changes
in different pieces of on-chain code and
then those on-chain pieces of code
require
input i think the thing that people get
kind of a little bit thrown by
is despite being called smart contracts
the on-chain code on a blockchain cannot
actually
speak to any other system so blockchains
are valuable and useful as far as
they're tamper-proof and secure
and to be tamper-proof and secure
they're made this kind of walled garden
that is able to know and interact only
with the highly reliable information
that's within that system which is
basically
tokens and private key signatures
all the other world's information is not
available in a blockchain
inherently and a smart contract or a
piece of unchained code can't just say
hey i'm going to go get some data from
over here because the api they would get
it from
creates a whole bunch of security
concerns for the blockchain itself
and a whole bunch of consensus issues
about how to agree on what that api said
or what the truth of the world is right
because it's not even agreeing
on what one api said it's more so
creating a reliable form of
decentralized computation
that can give you a definitive proof of
what happened and not just what one api
said so for example some of our most
widely used networks
have well over 30 nodes and well over 10
data sources that are all providing
information about the same type of data
and then there's consensus on that one
piece of data which is then
written in and essentially given back
into the on-chain code
to tell it what happened because you
can't really make an agreement
unless you know what happened right if
you and me were to make an agreement and
set some contractual conditions
but our agreement could never know what
happened it would be completely you know
useless
however if you and me made an agreement
and there was another system called an
oracle mechanism or decentralized oracle
network that proved what happened
definitively and you and me pre-agreed
that whatever this mechanism says is
what happened
then we can achieve an entirely new
level of automation
right we can suddenly say there's this
piece of unchained code that's highly
reliable
we can give it millions billions
eventually trillions of dollars in value
and it is controlled by this other
system over here that's also highly
reliable
under this configurable set of
definitive truth and decentralization
conditions which we all agree
are sufficiently stringent to control
that much value
and therefore the combination of this
tamper-proof on-chain representation of
a contract
and this uh mutually agreed upon
definition
of a trigger or a proof system
combined is a hybrid smart contract
which as you can see
um probably already does a lot more
than just a contract on chain right can
you talk about this consensus mechanism
which by the way is just
fascinating so there is the on-chain
consensus mechanism of proof of work and
proof of stake
and then there is this oracle network
consensus mechanism of
what is true so how do you
can you compare the two like how do you
achieve that kind of consensus how do
you achieve security
in integrating data about the world
in a way that's definitively true
in a way that is usefully true such that
we can rely on it in making
major agreements that as you said
involve billions of trillions of dollars
right so this is the challenging this is
the challenging question right this is
the challenging
um problem that oracle networks
oracles we at chain link that that we
work on
in order to create this definitive truth
to trigger
and create hyper automation in this more
advanced form
more advanced form of hybrid smart
contracts the the reality i think
of this problem is that it is very
specific to
each use case and it and this
is actually how we've architected our
system is in a very flexible way
so so for example um you need an ability
for an oracle network to grow in the
amount of nodes that it has
relative to the value it secures right
so if you have an oracle network
that secures a hundred thousand dollars
in like a beta of a financial product
maybe it can be fined with owens only
seven nodes and only two or three data
sources
right because the risk to that to that
oracle network is relatively low based
on the value it secures
so the first question is actually how
do you scale security relative to value
secured by that oracle network because
it wouldn't be very efficient to have
a thousand nodes securing a hundred
thousand dollars
worth worth of value so one of the first
questions is
how do we properly scale and how do we
compose ensembles of nodes
in a decentralized way where we can know
that okay we're going from seven nodes
in a network to 15 to 31 to 57
to 105 to you know a thousand right
so that's that's one dimension of the
problem so you have to be scaling the
number of nodes
relative to the value that's that's
derived
from the truth integrated into those
nodes
well that's not the only problem right
the the other side of this is that
you're trying to create
a deterministic result a deterministic
output
from a set of non-deterministic
disparate systems data sources
or places that prove things can you also
just as a decide
what is an oracle node what is the role
of an oracle node
sure so an an oracle node essentially
exists in both places it exists in both
worlds
it exists as an on-chain contract that
represents
either an oracle network or an oracle
node so there's an on-chain interface in
the form of a contract that says
i i exist to give you this list of
inputs
you can request weather data from me you
can request price data from me
you can ask me to send the payment
somewhere like an api so it's a pointer
to uh
api that uh about that that provides
truth about this world
it's an interface so just like an api is
an interface for web 2.0 engineers
um oracle networks and the contracts
that represent
them or individual nodes are the
interface
of web 3.0 use of services
and services includes all services
data payment systems messaging systems
whatever web 2.0 or any
kind of computing service that you can
conceptualize
needs an interface on chain in the form
of a contract that says
here are the services i can provide for
you here are the transactions you need
to send me
to get back this data or that
computation or this result
and then what you actually see is that
the centralized oracle networks because
they're uniquely capable of generating
their own computations in a
decentralized way around
the data that they have access to you
actually see
the centralized oracle networks
generating a lot of these services so
for example
we have a randomness service a
verifiable randomness
function service that basically provides
randomness
on chain and that randomness is then
used in lotteries and various other
contracts that need randomness
but that randomness that's not a piece
of data that comes from somewhere else
we don't go to another
data source and get it we generate it
within an oracle node
that then provides it over into oracle
node or oracle nodes that provide it
into the contracts
themselves so why do you say oracle
nodes are non-deterministic
well they they are as far as they come
to consensus but there's
see there's there's there's this kind of
different problem here right the
blockchains are very focused on
generating blocks of transactions within
a smaller universe of transaction types
a certain block size and a certain set
of conditions
and and then they have a economic system
that says
you i will perpetually generate blocks
of this size
with these transaction types in in this
kind of limited set of
transaction types whether those are utxo
transactions or scripted
solidity or whatever it is oracles and
oracle networks they're um
we don't have a blockchain for example
there is no chain-link blockchain our
our goal is not to generate a certain
set of
very clearly predetermined transaction
types
into a set of transactions that are put
into blocks and will infinitely be you
know done that way
our goal is actually to create what we
call a meta layer
a decentralized made a layer between the
non-deterministic
highly um unreliable world and the
highly hyper reliable world of
blockchains
so that the unreliable world can be
passed through this decentralized meta
layer
and it can co-exist with the with the
reliable chain uh unchained world
exactly it can coexist and in some cases
the meta layer might generate it
so that the problem in in giving you
this straight answer is that there's
just such a wide array of services
right right if you were to say well
sergey how how do we
generate randomness from a data source
well we don't use a data source to
generate the randomness
that's the type of service that can be
generated in an oracle network itself
and so there will be certain
computations that oracle networks
themselves
generate themselves to augment and
improve blockchains
and it is actually the goal of oracle's
to consistently do that so if you were
to think about
the stack in a very generic high level
you would see
blockchains or databases they're
basically the data structures that
retain
a lot of information in this transparent
highly reliable form
smart contract code is the application
logic
it is it is the logic under which all of
this kind of activity occurs
um you know storing data in the in the
data structure in the in the blockchain
as a database in in in a certain
conceptualization of it
and then oracles and oracle networks
are all the services that are used by
the application code
so you know by analogy let's take uber
uber initially
some core code goes and gets the gps api
from google maps about the user's
location sends a message to the user
through twilio
pays the driver through stripe if those
services weren't available to the people
who made uber
they wouldn't have made uber right
because they would have written their
core code on some database
and then they would have had to make a
geolocation company a telecom messaging
company
and the global payments company and they
wouldn't have done that because it's too
hard
and that's the weird scenario that a lot
of people in our industry are in
and that's the problem that oracle's and
oracle networks fix
is they provide these decentralized
services to take
um this developer ecosystem the
blockchain
and smart contract developer ecosystem
from hey
i can have a database and write some
application logic about tokenization and
voting
and private key signing all of which is
super useful and is a critical
foundation
but now if you just lay around all the
world's services
whether that's market data weather data
randomness suddenly people can build
defy
fraud proof gaming fraud proof global
trade fraud proof ad networks
and and that's why this world of
decentralized services and decentralized
oracle networks
is particularly you know in my opinion
important to our industry
yeah it's funny and you you you talk
about that the current sort of
decentralized world d5 but decentralized
services world is primarily just tokens
and it's basically just financial
transactions
and the kind of thing the reason why
it's super exciting the kind of thing
you're doing with chain link and oracle
networks
is that you can basically open up the
whole world of services
to into this kind of uh
decentralized smart contract world
i mean you're talking about
just orders of magnitude greater impact
financially and just
socially and philosophically
are there interesting near-term and
long-term applications that excite you
yeah there's there's a lot that excites
me and that is how i think about it that
it's not just about we made a
decentralized oracle network
it's about we made a decentralized
service or collection of services that's
going from hundreds to thousands
and then people are able to build the
hybrid smart contracts which i think
will redefine what our industry is about
because for example for the people that
only learned about blockchains through
the
lens of nfts they understand blockchains
through nfts
not through speculative tokens or
bitcoins right and i think that
that that will continue i i think the
use cases that excite me
they vary between the developed uh
market that developed worlds economies
and
emerging markets i think in the
developed world
what you will see is that transparency
creating
a level a new level of information for
how
markets work and the risk that is in
markets and
kind of the dynamics that put the global
financial system
at systemic financial risk like 2008 and
my hope is that all of this
infrastructure will
will soften the boom and bust cycles
by making information immediately
available to all market participants
which is by the way what all market
participants want except for the very
very very
small minority that are able to game the
system and their benefit
and benefit from booms but avoid busts
because of their asymmetric access to
information which really everybody
should have and which this technically
solves
i think in the process of doing that and
which is happening i think right about
now
you see a polishing of the technology
such that it can be made available to
emerging markets
and on a personal level i feel that um
the emerging markets will benefit much
more from this technology
just like the emerging markets benefit
much more from the internet
or from those you know 50 android phones
that people can have
because it's it's such a massive shift
in how people's lives work right
i have always had access to books and a
library which has been fantastic and
very important
but there are places in the world where
people don't have libraries
but they now they have the internet and
a 50 android phone
and they can watch the same stanford
lecture that i watch i mean that's kind
of mind-blowing
realistically right they they just went
from zero to one in a very very dramatic
way
i think all of these smart contracts
and in in my case i think the one that i
seem to keep coming back to is crop
insurance
where partly because it doesn't have a
tokenization component partly because
it's actually much more important than
than it might seem um what is crop
insurance
right so exactly so so this this this is
the nature of why it's sometimes
hard to see the full value of what our
industry does because it solves all
these kinds of back-end problems that we
don't have right so
crop insurance is if i own a farm and it
doesn't rain i get an insurance payout
so i don't need to close down my farm
because if it didn't rain
i don't have crops right so people in
the developed world
can get crop insurance and there's
all kinds of systems that basically pay
them out and then they can argue with
the legal
with the insurance company if they don't
get paid out properly and whatever
and this allows people to smooth out
risk
in fact a lot of the global options
markets
were about this right they were
initially about people selling
their produce or their crops ahead of
time so that
if there was a risk of drought they
weren't impacted by it
right and that's where a lot of options
trading and all this kind of stuff came
from
even though it's now turned into this
kind of global casino
but in the emerging market there are
there are literally people that
if they don't have rain for two seasons
they need to close down their farm and
become a migrant worker of some kind
and now they have a 50 android phone
where they can read wikipedia
but they're still decades away from an
insurance company coming to their
geography and offering them insurance
because their local legal system simply
doesn't allow that type of thing to
exist
no insurance companies going to go and
create insurance entity and offer them
insurance
because you know the levels of fraud and
the ability to resolve that fraud
through courts would just not exist
so now these people have to wait for
decades to have this very basic form of
financial protection
or or something like a bank account even
and with this technology they don't
right so with this technology if i have
a 50 android phone
and the smart contract has data from
satellites or weather stations about the
weather conditions
in the geography that my farm is in i
can i can
put value into the smart contract and
the smart contract will automatically
pay me out back pay me back out at my
android phone
and and guess what i just leapfrogged
past
my corrupt government not being able to
to provide um a legal infrastructure to
create insurance
i just leap frog past dealing with
insurance companies that'll probably
price gouge me
and and and and often not pay out and i
leapfrogged into the world
of hyper reliable
kind of guaranteed smart contract
outcomes that are as good
or in many cases better than what
farmers in all parts of other parts of
the world have
and this type of dynamic for the
emerging markets of creating a way for
people to control and manage risk in
their economic life
i think extends way past insurance it
extends to them having bank accounts to
combat local inflation
it extends to them being able to sell
their goods on the global free market of
global trade without middlemen
it extends to all these things that we
don't really care about right because
we're not farmers
but are unbelievably impactful for
people that don't have a bank account
and their
inflation rate in their country is
double digits
or their farm completely depends our
reign or their livelihood completely
depends on their ability to sell goods
and they can't sell those goods because
there's a middleman who
essentially controls all the trust
relationships but now now we have the
internet and smart
contracts and that might not have to be
the case in
in in the next five or ten years yeah so
that definitely has a
quality of life impact on the particular
farmer's life but
i suspect it has a huge
like down the line ripple effect on the
whole supply chain so if
you think about farmers but any
other people that produce things
that are part of a large
like logistics network like supply chain
network
that means when you increase reliability
you sort of increase uh transparency and
control
but like where any one node in that
supply chain network
can formalize the way it operates
in in its agreements with others then
you could just
have a very like at scale transformative
effect on how
people that down the line use the
services that you provide the products
that you create
operate so like it's almost hard to
imagine the the possible ways it might
transform the world
i i wonder how much friction there is in
the system i guess
currently that uh smart contracts might
remove
that's so that's a that's almost unknown
you can sort of hypothesize and stuff
but i wonder
i've seen enough bureaucracy in my world
in my life
to know that smart contracts in many
cases would remove bureaucracy
and i wonder how the world will be once
you
remove much of the bureaucracy coming
from the soviet union
where i just have seen the
life sucked out of
the innovative spirit of human nature
by bureaucracy i wonder
you know the kind of amazing world that
could be created once bureaucracy is
removed
yeah i i i think it's i think it's
fascinating how the world can
can evolve i i think this extends a lot
further than people think into many many
different parts of the global economy
it might start with nfts for art or it
might start with defy
right or it might start with fraud proof
ad networks next
we we don't know what it's going to go
to next but i think the implication
of people being in a system of contracts
that holds them accountable and
guarantees contractual outcomes
regardless of a local legal system is
something that i think extends
you know to the supply chain you can
prove that goods were sourced
in an ethical way and you can prove that
in a way that can't be gamed
that'll change buying power and supplier
power and
and how people produce goods that we all
consume and then
on the political level i personally
think that in a number of
decades we could literally be in a place
where
politicians can commit to a certain set
of smart contract
um kind of budget definitional
kind of results for example you know we
discovered oil
i promise as a politician i'm going to
take the oil and i'm going to
redistribute it to all of you
well that's wonderful that's a great
idea sounds very nice when you when
you're running for office
why don't we codify that in a smart
contract and why don't we put those
conditions
very solidly on a blockchain and then
once once you you you've been elected
we'll just turn that one on
and it'll it'll it'll distribute the
money just like you said
and everything will be fine i i
personally think that this
new level of systems that allows
trustworthy collaboration
between everybody between supply chain
partners ad network users the financial
system
insurance companies and farmers all of
these
are just interactions that require a
trusted
entity or in this case a trusted piece
of code
to orchestrate the interaction in the
way
that everyone agrees yeah one of the
things that makes
the united states fascinating is the
founding documents
and it's fascinating to think of us
moving into the new in the 21st century
to a a digital version of that so the
constitution
a smart constitution no offense to the
uh paper constitution
but and i would change that would have
transformative effects on politicians
and
governments holding people accountable
oh man i that's so that's so exciting
to think that um we might
enforce uh accountability
through the smart contract process
exactly why can't that happen
anything that we could codify into a
smart contract
and anything that we all agree is the
way the world should work
and then anything that we can get proof
about right
anything that a system somewhere could
tell us happened
those are the pieces of the puzzle right
we need a trusted piece of code we need
to have agreement
that that's how the world should work
and we need a system that will tell that
trusted piece of code what happened
as as long as we have those three things
we can theoretically codify
any set of agreements about uh about
about anything
where those three properties uh take
hold
i wonder if you can apply that to like
military conflict and so on
uh recently uh the biden announced that
we're going to pull off from afghanistan
after 20
20 years in the war i wonder
there's a lot of tobacco debacles around
war in afghanistan and invasion of iraq
all those kinds of things
i wonder if that was instead formulated
as a smart contract
like uh that might have actually huge
impact on the way we do conflict so you
think of uh
smart contract as a as a kind of win-win
situation where you're doing
like financial transactions or something
like that but you could see that also
about
military conflict or like whenever two
nations
are attention with each other different
scales of conflict
that you can have conflict codified
and that would potentially resolve
conflict much faster
because there's honesty transparency and
control within that conflict because
there's conflict in this world
and i i again very very inspiring to
think about
the the kind of effects it might have on
the on
on the negative kinds of contracts and
the tense
painful kinds of contracts i i haven't
thought about that as much it's actually
kind of scary the stuff you're
you're thinking through now with like
the war contract or something you know
that's not in the white paper we don't
have
anything about war contracts or anything
again this is the the russian uh
we're both russian but i'm a little more
russian uh in the suffering side
maybe i read way too much dostoyevsky
and military kind of ideas but
anyway holding politicians accountable
in all forms i think is really powerful
is there something you could say
as a small side on how
smart contracts actually work if you
look at the code is there some nice way
to say
technically what is a smart contract
what does it mean to codify
these agreements the actual process for
people who might not at all be familiar
i i think you just write it into code
that operates
in this kind of decentralized
infrastructure you you usually write
code that runs in a central server
somewhere
now you write code that runs um across a
lot of different machines in this
decentralized way
and then after you write it you need
services and that's where oracle's come
in they provide all the services
so just like you would be writing code
in web 2.0 land running it on a server
somewhere and using an api
here you'd be writing code putting it on
a decentralized infrastructure like a
blockchain
or a smart contract platform like
ethereum and then you would be using
various services
in the form of oracle so they'll just be
called oracles or decentralized services
instead of apis
and you're you're basically composing
the same type of architecture
except it's hyper reliable at the moment
it's a little bit less efficient because
you know the
state there's an early stage to to our
industry
but it provides this extreme level of
reliability
and transparency which for certain use
cases
is an absolute critical component and
is completely reinventing how they work
so i i think people should look at what
are the use cases
where that trust dynamic can be so
heavily improved and that's probably the
ones where this is
maybe initially useful but i mean just
to emphasize i don't think
people realize when you say code that
we're talking about
non-obfuscated actual program
like you can read it you can understand
it yeah and it's
there's something about uh maybe this is
my computer science perspective of
like software engineering perspective
but there's something about the
formalism of programming languages
which enforces simplicity and clarity
and transparency and because it's
seen to everybody i mean simplicity is
enforced
there's no there's something about
natural language like language
as written in the constitution for
example
where there's so many interpretations
with the the nice thing about programs
there's no there's not going to be a
huge number of books written about
what was meant by this particular line
because it's pretty clear
like programming languages have a
clarity to them that natural language
does not and they don't have ambiguity
which i think it's important to pause on
because it's really powerful it's really
difficult to think about i think we live
in a world where all the philosophers
and legal minds
don't know how to program so i think not
all
most don't and so we don't often see
the philosophical impact of this kind of
idea
that the agreements between humans can
be written
in a programming language that's a
really transformative idea
that i mean yeah it's it's uh it's an
idea that's not just
technical it's not just financial it's
philosophical
it's rethinking human nature from a
digital perspective
the like what is human civilization it's
interaction between humans
and rethinking that interaction as a
digital interaction
that is managed by programming languages
by programs
by code i mean that's that's fascinating
that we'll look back at this time
potentially
as one where us little descendants of
apes did not realize how
how trans how important this moment in
history is
like human beings might be totally
different
a century from now because we codified
the interaction between humans that
might have more of an impact than
anything else
we do today you think about the impact
of the internet one of the cool things
is the digitization of data but we have
not yet integrated
the the tools the mechanisms fully
that use that data and interact with
humans yet and that's what smart
contracts do
i wonder if you think about the role of
artificial intelligence in all of this
because your smart contracts are kind of
agreements maybe you disagree with this
but
at least the way i'm thinking about it
is agreements between humans
or groups of humans but it seems like
because everything is operating in the
digital space that you can integrate
non-humans into this or ai
systems that help out humans managed by
humans
like what do you think about a world
of hybrid smart contracts
codifying agreements
between uh hybrid intelligent being
networks
of humans and ai systems yeah yeah i
think that makes
i think that makes perfect sense in in
terms of ai
um i'm not an expert right so it might
be a bit
simplistic or naive my my ideas in
in this field i i think you know
everyone saw the terminator movie
right everybody kind of saw the
terminator movie in the 90s
and it was like this is really scary um
i personally think ai is
is is amazing it makes makes perfect
sense
i think it will evolve to a place where
people
have you know just to understand i work
in the world of trust issues right i
work in the world of
how can technology solve trust and
collaboration
issues using encryption using
cryptographically guaranteed systems
using decentralized infrastructure right
so that's the world that i've been
inhabiting
for um you know many many years now
building smart contracts for seven or
eight doing stuff before that
it's it's it's kind of what i'm focused
on so i view ai
through that same lens and my brain
naturally asks well what is the trust
issue
that people might have with ai and my
natural
kind of response is well let's say ai
continues to be built
and improve at some point i have no clue
where we are on this now i've i've seen
different
ideas that were very far from this i've
seen other ideas very close to this
at a certain point we'd arrive at a
place with ai where we would be
a little bit worried about just how much
it could do right we might be worried
that ai could do things
we don't want it to do but we still want
to give
ai a level of control over our lives
right so
in my world that's a trust issue and the
way that that trust issue would be
solved with blockchains
is is actually very straightforward and
i think in its simplicity quite powerful
you could have an ai that has an ability
to do and control
key parts of your and our lives right
but then you could limit it with private
keys and blockchains
and create certain guard rails and firm
kind of
walls and limits to what the ai could
never go past
assuming that encryption right that
encryption
continues to work right and assuming
that if it's not that ai's
specialization to break encryption that
it wouldn't be able to do that right so
if you have an ai
that controls um something very
important whatever it is
shipping or something in defense or
something in um
you know the financial system whatever
it is but you're sitting there and
you're kind of worried hey
you know this thing is unbelievable it's
coming up with things i you know we
wouldn't have thought of in 100 years
but maybe it's a little too unbelievable
um
how do you limit it well if you bake
in private keys and you bake in these
kind of blockchain
based limitations you can create the
conditions
beyond which an ai could never act and
those could once again be codified in
the very specific
um unambiguous terms in which you
described which
once again in my trust issue focused
world would
solve the trust issue for users and make
them comfortable with
using the ai or seeding control to the
ai
which i think in more advanced versions
of ai
will continue to be a concern right this
is fascinating
so smart contracts actually provide a
mechanism for human supervision of ai
systems
for the encryption very encryption heavy
so it's not about like
is it smarter than us it's about will
the encryption hold up yep
so we that's based on the assumption
that the encryption holds up
i think that's a safe assumption we can
get into that whole discussion
but from quantum computing but cracking
encryption is very difficult that's a
whole another discussion right
i think we're safe on the safe ground
for quite a long time
assuming encryption holds i um
there's a space that uh is at the
cutting edge of general intelligence
research in the ai community which is
the space of
program synthesis or ai generating
programs
that's different than what you're
referring to is
ai being able to generate smart
contracts
and that to me is kind of fascinating
to think of especially two ai systems
between each other generating contracts
sort of almost creating a world
where most of the contracts are between
non-human beings
i i think an ai system as i think about
it and once again this is not my field
this is something i might watch a
youtube video on or just see something
interesting about at some point
um i think if i were to just reason
through it even even now
i think the highly deterministic and
guaranteed nature of smart contracts
would probably be preferable to an ai
because i'm guessing an ai would have a
lot of problems with dealing with the
human element
of how contracts work today right so an
ai for example
couldn't pick up the phone and call you
know dave
at a bank to do a derivative and kind of
discuss with dave and have a call with
him and kind of have a conversation and
make him comfortable
and tell him it's going to be fine and
kind of smooth out all the weird
you know social cues that have to do
with making certain derivatives
i'm assuming that that's a pretty
complicated
neural map ai kind of problem
um yeah so if i think about it
the deterministic guaranteed nature of
smart contracts
probably would and and if assuming
they're accessible to ais
could actually interestingly enough be
the format
that they prefer to codify their
relationship
with non-ai systems
and very possibly other ai systems right
because
it is very um i mean
it's pretty it's pretty guaranteed right
all the other types of contracts that an
ai could go out there
and seek to do would require
you know some language processing around
the law
and i think um uh i don't know if this
is a term
but probably not a smart ai or a good ai
or whatever the term is for a high
quality ai
would probably realize some of the
limitations and the risks
yeah yeah ai definitely dislikes
ambiguity and would prefer the the
determinism
the deterministic nature of smart
contracts
i i do wonder about this particular
problem and maybe you can speak to it of
how smart contracts can
take over certain industries in a sense
or how
certain industries can convert their
sets of agreements
into smart contracts which is uh you
mentioned sort of talking to dave from
the bank
you know many of our laws many of our
agreements are
currently through natural language
through words and so there is a process
of
mapping that has to occur in order to
convert
the legal agreements legal contracts of
today
to smart contracts that by the way ai
may be able to help with
but as a by way of question how do you
think would convert
the legal contracts on which many
industries currently function today or
not even legal contracts but ambiguous
kind of agreements
maybe they're loose sometimes into more
formal
deterministic agreements that are
represented by smart contracts
so i i think there's two um maybe two
sides to this
um i think the first one is actually not
a huge problem where you have things
like the is the master agreement for
derivatives or you have these agreements
that basically already reference a
system somewhere
right like for example many legal
agreements already accept e-signature
and so they're saying hey i'm going to
use this computing system over here
around signatures
and i'm going to consider and there's
laws around that and there's clauses
that say
signatures good enough for this
agreement i i actually don't think this
is a big problem
for the vast majority of legal
agreements that use
systems already right so what you'll do
is you'll swap out one
uh repository or one or one set of contr
system of contract
settlement and you'll just say hey this
blockchain system over here
is my new system of contract settlement
whatever it says
is the state of the agreement instead of
you know the centralized
system over there right and so there's
actually a huge amount of agreements
that are already
um able to to do that and i think we'll
we'll do that
i think there's another side to your
question which is the
amount of agreements that are very
ambiguous that can be turned into smart
contracts
and i think the limitation there is is
twofold
first of all like like you said earlier
the highly reliable smart contract and
the
and the lack of opaqueness and the
clarity of smart contracts
is is is very um high and very powerful
and very clear
and it's in my opinion going to be much
much easier to take
a smart contract and turn it into a set
of natural language
explanations and just say hey um you
know
this is what this does right so i think
that many contracts are and even now in
decentralized finance and d5
and decentralized insurance they're
basically being rebuilt in this format
and and and that rebuilding will make
them clearer like you said
and then restating those in natural
language and explaining to people well
you know if the weather does this it'll
i think it'll actually be a lot simpler
to explain to people what the contract
is about
smart contracts it's a natural language
i didn't even think about that so that's
that's
you're saying that's doable and natural
and easy to do
because there's so much clear right
there's there's that forced clarity that
you talked about
i think the second um aspect of this
problem is the nuance around
what contracts can be made unambiguous
and i think that comes down to
often comes down to proving what
happened which is where oracle networks
and decentralized oracle networks and
chain link would come in
and our experience there is you know
quite extensive over the many years that
we've worked on many different contract
types
i think what it fundamentally comes down
to
is whether there is data so we're not
going to be able to make a hybrid smart
contract
about whether somebody painted your
house the right color blue
we're just not going to be doing that
because there's no data feed that tells
us that your house was painted blue or
that it was the right color of blue
you know unless somebody sets up a drone
with a color analysis
tool and they generate that data which
by the way could be possible right
they could there could be if there's
enough demand then the service would be
created that has drones flying around
that's telling you about the colors of
you know all this kind of stuff so if
there's
actual demand that that would be created
and because because there'd be value to
connect that data feed to the smart
contracts and so on
i i think i think you have it
unbelievably right because there there
are already insurance companies that use
drones to monitor construction sites
from overhead
and see how many people are wearing hard
hats yeah and if the percentage of
people wearing hard hats isn't
sufficiently high
then you know the policy is voided and
so in that case
there is a data source and that data
source can be put into a hybrid smart
contract
so the limitation of hybrid smart
contracts is is there a data source or a
set of data sources to create definitive
truth
to settle the contract and eliminate
ambiguity
and then as you said i think as people
realize that smart contracts are a
format in which they can form agreement
about things like that insurance product
around you know how many people are
wearing hard hats
if i'm the construction site owner well
you know i would really like a guarantee
that your insurance policy is going to
pay me out
if everyone is wearing hard hats and
in that case there is demand for the
data and people will generate the data
and i actually think the insurance
industry is interestingly a precursor of
this because they're so data driven
you already see insurance companies
paying
iot companies to put data into their
customers infrastructure
at the cost of the insurance company to
generate the data that the insurance
company uses to make a policy for the
customer
so you basically already have people who
really
want to price data into their agreements
when they're sufficiently high value
paying for their own customers to get
data sensors into their infrastructure
and i think
as smart contracts become more of a
requested
format or data-driven contracts become
more of a format
there will be a growing demand about
proving what happened
through data so it'll be motivating
totally new data fees being created
by the way the the insurance industry
broadly
the revolutions there will be huge i've
worked quite a bit with autonomous
vehicles semi-autonomous
and just vehicles in general the
insurance industry that by the way
makes a huge amount of money but is
using very crappy data fees
uh revolutionizing
how like not by crappy i mean very crude
like literally the insurance is based on
things like age gen like basic
demographic information as opposed to
really high resolution information about
you as an individual
which you may or may not want to provide
so
you can choose from an individual
perspective to provide a data feed and
there
like the the um
the power of insurance to the indiv
to enable the individual to empower the
individual
could be huge because ultimately smart
contracts motivate
the use of data the creation of new data
feeds
but leveraging the the whatever service
it provides
in truth as opposed to some kind of very
loose notion of who you are so that
i'm not again not sure how that would
change things but
in terms of um the fundamental
experience of life
because i think we all rely on insurance
not just in business but in life
and grounding that insurance and more
and more
accurate representation of reality might
just have transformative effects on
society
well just to mention one quick thing
that you said where i noticed another
trust issue
you said the user might not want to
share their data yes so what you could
actually do
and what we've already worked on is you
can have a smart contract
that holds the data and evaluates the
data of the user
without sharing it with the insurance
companies and the insurance company
knows that the smart contract will
evaluate it according to the policy
they don't need the data and the and and
the user can provide the data
knowing it'll never touch the insurance
company because it's only provided to
the smart contract
and suddenly you've solved another trust
issue because an autonomous piece of
code
can evaluate information separately from
the interests
of both of the counterparties and so
this is the recurring theme i think
you're seeing this recurring theme where
there's a trust issue
people can't use the system they can't
collaborate they can't share information
that would make a better agreement for
both of them they can't
you know solve a risk in their daily
life they can't participate in a market
they can't have a bank account because
nobody will give it to them because
you know they can't give it to them in
that legal system and
once you have an autonomous piece of
code that can also
know what's going on thanks to oracle
networks and that combination of the
code
and the oracle network for the hybrid
smart contract
the same pattern just recurs it's it's
really the same pattern and
and this is why i keep saying trust
issues it's because
i basically almost every contractual
trust issue that i see
where there is a piece of data to prove
and settle the trust issue
in a way that works for both parties
there is no reason not to use an
autonomous highly reliable
contract and piece of code and
i have to tell you i've seen this in in
a lot of different industries
i've seen it insurance ad networks
global finance global trade
those are all multi-trillion dollar
industries and then there are there are
other smaller industries like even even
one of the first
smart contracts we worked on many years
ago was for search engine optimization
firms
where they would tell you hey i'm going
to raise your search engine ranking
give me the money and people wouldn't
want to give them the money because they
they never
knew if they were going to do it and
then the search engine firm doesn't want
to do any work thinking they'll never
get any money
so we just initially even came up with a
system where you could put bitcoin
into a smart contract and it would be
released
based on whether the search rank of a
website
got to a certain level on google for a
certain keyword right
and so the trust problem was solved but
it's just the same story right it's kind
of like trust issues around ai trust
issues around financial products trust
issues around insurance
trust issues around social media
whatever it is
i i think that's what um
people looking at this industry really
need to understand and once they do
understand they realize what this is all
about
this is about redefining how everyone
collaborates
with everyone about everything
where we can prove something through
data you've mentioned confidentiality
and privacy that you don't the parties
don't need to necessarily know private
data
in this interaction you talk about
confidentiality in the
in the white paper for chain link 2.0
can you talk more about how to achieve
confidentiality
in this process sure sure absolutely
um so i think you once again need to
think of the contract as existing in two
parts right you have the on-chain code
and then you have this off-chain system
called
the centralized oracle network so the
question is really
what portion of the contract should live
in what part
of these two systems right so
if you want to create transparency you
should put
more information on chain because that's
what blockchains are very good at
they're public transparent but they
don't necessarily have privacy
well those you can see how those two
things are a little bit kind of
completely uh diametrically opposed
right yes so i i do
i do think and i do see blockchains
working on
on-chain encrypted smart contracts
that's very inefficient it has a lot of
um nuances around it
that i think will appear at some point i
think until it appears
you have an option of taking a part of
the computation
and putting it into the centralized
oracle network
we actually did an entire paper about
this that we presented at stanford
in february of last year uh something
called mixicles
which basically talks about how you can
take an oracle network
and you can put a portion of the
computation into the oracle network
assuming that you're comfortable with
that limited set
of nodes knowing what the computation is
and
you can actually provide additional
confidentiality through special hardware
called trusted execution environments
that you that all those nodes are forced
to run so they won't even know what
they're operating
and so at the end of the day if you look
at a hybrid smart contract
as gaining functionality from its own
chain code and gaining other
functionality from its off-chain
the centralized oracle network component
you can place the part of the
computation that you would like to be
private
in the decentralized oracle network
because
you can control the set of nodes you can
control the committee of nodes
and you can require that they run
certain hardware
to keep the information private right so
you could basically make a derivative
that
um or a binary option is the example
used in in the mix paper
where the payout happened on chain
but it was actually impossible to tell
what the outcome of the contract was
so the the outcome of the contract was
computed in the centralized oracle
network
and then there was a switch that that
triggered who received the payment
but from who from from the point of view
of analyzing the on-chain transactions
and seeing um who received
the payment or or what the outcome of
the contract was you couldn't
you you couldn't derive that you
couldn't backward engineer what that was
but the users of that hybrid smart
contract
still had on-chain code that guaranteed
them
that as long as the decentralized oracle
network found
a certain outcome right determined a
certain outcome
that the relevant user would get paid
and
there was still a place to put value
right
so there there is this kind of
fundamental tension
between confidentiality privacy which is
very important for many contracts
which is critical to many contracts and
the public and transparent nature of
blockchains
which i think eventually will be solved
through encrypted on-chain smart
contracts
that'll take some time i think that'll
take years in my opinion
and before we arrive there i think
people will put
the private portion into the centralized
oracle network
once again going back to what the
decentralized oracle networks do
they seek to provide these services
right so the ability to do
a privacy preserving computation is
perhaps a service
without which a certain type of contract
might never come into existence
in the form of an on-chain hybrid smart
contract
and so this is once again what we see
the centralized oracle networks and
decentralized services doing
is providing people these tools and
building blocks
to compose you know like i'm i'm great
at making these derivatives contracts
but i can't make them until unless i can
retain the privacy of them
and our goal is to provide the
infrastructure
that gives you as a developer and as a
creator of smart contracts that
capability
and what we've seen is that as we
provide that capability people create
more
which is also really the story of the
internet right the story of the internet
is
it was really tough to do e-commerce
while everything was in http
and credit cards were transmitted
publicly and so e-commerce was kind of
tough because how am i going to send my
credit card
over public unencrypted channels right
but the second https appears
e-commerce becomes a lot easier because
i can put in my credit card number and
it can be sent over an encrypted channel
and you know it's not at risk and so i
can participate in e-commerce as long as
i have a credit card
i i think those types and i'm sure that
was unexpected right i'm sure at the
time that was an
unexpected outcome from from that
technology
and so i think this is why we sometimes
have this focus on privacy
because in our work with contracts and
their transition into this hybrid smart
contract form
we see a substantial amount of need for
privacy
as an inherent property of of these
contracts
and it'll take a while before that's
possible to create the kind of
technology innovation required to do
that on chain
i know there's a few ideas that are
being floating about but
so the currently distributed oracle
networks provide that feature
the which is essential to many contracts
what brings to mind
in this whole space again it might be
outside of your
expertise but within the world which i'm
passionate about which is machine
learning
and it seems like very naturally because
current machine learning systems are
very data hungry
and much of the value mined by companies
in the digital space or from data they
often
want their data to maintain privacy
so you think about an autonomous vehicle
space tesla's collecting huge amount of
data
waymo is collecting huge amount of data
it seems like it would be very
beneficial to form contracts where one
could use the data from
the other in some kind of privacy
preserving way but also where
all the uses of data are codified
and you can exchange value cleanly you
know basically
contracts over data over um
machine learning systems use of
different data i don't know do you um
do you talk to machine learning folks
that you use ideas of smart contracts or
is that from outside your interest
because it seems like exceptionally
applicable
set of when we talk about different
services that might be created
and revolutionized by smart especially
hybrid smart contracts
i think machine learning systems comes
to mind to me
in all industries i i don't know if
you've gotten a chance to interact with
those folks
with those services i i think i think
what you're talking about is more data
marketplaces in in the data marketplace
side of things um
well this is actually once again very
applicable because there's a trust issue
at the end of the day let's say i'm
trying to sell you some data
you don't know the quality of the data
so you don't know what you want to pay
for it
and i can't give you the data for you to
determine the quality because i've given
you the data
right guess what we need an autonomous
impartial agent we need an apart
impartial uh
computational kind of agent an on-chain
smart contract
with an oracle network to assess my data
to write to
to basically take random cross-section
samples of the data
assess it for quality assess it for
signal
from the algorithm you have which you
don't want to share with me
because you don't want to know the
algorithm you're working on right you
don't want me to know
what you want the data for so now the
autonomous agent
takes your algorithm keeping it private
from me and takes my data keeping it
private from you
assesses it on a random cross-section
sampling for quality of data
returns the scoring back to you allows
you to determine a price
and now you and now both you and me know
that we've arrived at a fair price
for the quality of my data for what you
want to do with it
and that's once again from what i've
seen in the
in the data marketplaces which are full
of people who want that data for these
learning models often for financial
markets
often for for for for other reasons this
is their fundamental
problem which amazingly enough there's a
trust issue
that is is is getting solved and i think
you can see
even on the face of it once that trust
issue is solved
uh those markets can work a lot better
right
i don't need to know your algorithm you
don't need to know my data we both know
that the autonomous agent is not under
either of our control and gave us a fair
assessment than a fair price
and uh and that's it and we're all very
comfortable with um
with that we i could even make
conditions that your algorithm
isn't analyzing the data for something i
don't want you to analyze it for or
you could make conditions that the data
has to have you know any number of
properties
and and once again you haven't leaked
any signal to me and i haven't leaked
any
any data to you which is once again just
another type of trust issue that did all
of this solve so
it's it's the same pattern if you work
in this industry long enough or if you
really look at
these use cases long enough you'll
simply come to the question
and this is the useful question um what
is the trust issue this is solving
and then if you can get an answer to
that question on a case-by-case basis
that's when you'll understand why
blockchains are relevant
and then once you do that with enough
use cases it becomes
you know it becomes a little bit
mind-blowing you've mentioned
trust quite a bit
uh you also mentioned trust minimization
in the chain link white paper can we dig
into trust a little bit more
what is the nature of trust that you
think about any smart contracts
what is trust minimization how do we
accomplish
achieve trust minimization sure sure
i i think it's important maybe to have a
conception of
of what the alternative is right what is
highly reliable trust minimized off
chain and on-chain computation and
alternative to
so this is this is just kind of how i
how i see the world in these two in
these two camps
one camp is the traditional what i call
brand
based or paper guarantee camp
and this is the world as as pretty much
most or all people know it today
this is the world where there's a bank
logo or an insurance company logo or
some kind of logo
there's a very big building with marble
arches and and columns you know it's the
biggest building in the town it's bigger
than the church
and everybody feels very good
everybody's got such a nice logo it's
such a big building
why don't i give them my my money why
don't i i interact with them on the
basis of any kind of agreement
and that's good and that that is
definitely better than that not being
there
and that is definitely a huge
improvement for how people you know
conduct commerce you know letters of
credit
from from branded um entities are very
important for global trade to take place
in in the early stages of global trade
so
that's good but it is fundamentally just
a paper agreement
with a legal framework behind it and if
the
paper agreement you have would say
robinhood or somebody else suddenly has
to change
well it changes and you can't really do
anything about it you won't be able
to change anything about what happened
there there's some long term
service there's some other agreements
around all this stuff
at the end of the day um that's the
brand based and paper guarantee world
where it's all very vague and opaque and
you're kind of hoping for the best
because there's a nice logo it's been
around a hundred years
there's a lot of marble but a lot of
marbles big buildings lots of marbles
this is this is why banks have such nice
buildings right it's not because they
want to spend money on buildings
it's to create confidence in in them as
an entity in order for people to
transact
through them right this is why all these
kind of
go to cities that had gold rushes go to
cities
that needed banking as as a service in
certain time periods
they're the most beautiful buildings at
least in the united states
so this is the brand based paper
guarantee model
for which up until now there has never
been an alternative right so up until
now
if you had a bad experience with a bank
or insurance company or some
some logo somewhere you would only have
one option your option would be
to go across the road and down the block
to another
building with another color of marble
and
another set of agreements that are
fundamentally still paper
brand agreements right now for the first
time
you have mathematical agreements you
have
mathematically guaranteed encryption um
secured decentralized infrastructure
powered
agreements right this is um really
the shift this is really the comparison
and the alternative
through which people should view all of
this in my opinion because there's once
again this conception
that everything is fine everything works
very well
well it does it works fine and very well
as long as nothing goes wrong
and then in the cases when things go
wrong which they pretty much invariably
at some point do
then you find out that well you know
turns out they don't have to pay me or
it turns out i can't trade or turns out
the atms can be locked up and only give
me 66 euros per day
whether i'm a business or an individual
like what happened in greece a few years
ago
right and the
the reality is that once that becomes a
strong enough
uh kind of realization for people i
think they will all just migrate to
mathematically guaranteed contracts
because why why wouldn't you so in
in the world of mathematically
guaranteed contracts kind of how do we
and cryptographically secured and
decentralized infrastructure powered how
do we how do we
evolve into that world well at the end
of the day
um it comes down to consensus right it
comes down to
an in a collection of independent nodes
a collection of
provably independent computing systems
arriving at the same conclusion
impartially that conclusion might be
the transaction is valid between
address a and address b address a has
one bitcoin
wants to send it to address b now just b
has one bitcoin right
so that's one degree of validation it
has certain cryptographic primitives
that are used certain levels of
cryptography encryption and other and
other methods that basically provide
um clarity and and those guarantees
but fundamentally it's this level of
consensus that multiple
independent computing systems came to
the same conclusion
verified that conclusion and created a
sense of finality
created a final state that is globally
considered to be
the state of a transaction
and that is how it's achieved right so
it's achieved by
users looking at these mathematical
contract systems
and saying you know if i have money in a
bank
there's one single person who controls
that money that's the bank
they could choose to give me my money or
choose not to give me my money
and that's great but maybe there's a
percentage of what i own that i want to
put into another system
where there's thousands of independent
computing systems that are promising
me you know with the help of
cryptographic primitives
that i will be able to always have
access to this whatever this
is whatever this um you know token is
i will at least oh at the very least i
will always have
unfettered complete control and access
to it so
you know that's one example another
example is hey we have a hybrid smart
contract for
something like crop insurance i as the
user
evaluate where this smart contract runs
oh wow the smart contract runs on
ethereum
great thousands of nodes lots of
computational
uh security hash power so on and so on
then i look at oh well what triggers the
contract oh there's this oracle network
okay it's composed of 25 nodes or 15
nodes gets data from five different
weather stations
you know i'm comfortable with that i
have a certain level of comfort
with that hybrid smart contract and its
ability to
provide me consensus about the
transaction
once the contract knows what's happened
and i'm comfortable with the consensus
around the event that controls the
contract right because once again
that event is what determines what
happens with the contract
and if the contract is super well
written it doesn't matter if the event
isn't reliable
right so now i've made this
determination i've gotten all this clear
clear transparent information about this
system
that combines the contract code with a
decentralized oracle network
and i've made my decision to participate
in this decentralized insurance
kind of crop insurance policy i've sent
the bitcoin or the stablecoin or
whatever i have on my
on my android phone and then time goes
by and let's say it doesn't rain
low and behold the smart contract uh
returns
the the relevant amount from the policy
back to me
i continue my life as as as a farmer
and by the way the fact that that
happened contributes reputation
and contributes proof back to both the
contract
as something that can prove to other
people that it has settled
and the oracle network as something that
can prove that it has
properly assessed reality or properly
triggered a contract
and this is where there's you know one
of many network effects where
the more that smart contracts and oracle
networks are used
they they themselves generate this
immutable unchained data
that proves their value and reliability
and improving more and more of that in
more and more
kind of use cases and more and more
variants of the same contract
they arrive at a greater body of proof
that they
like i am the decentralized crop the
decentralized insurance
contract for crop insurance used by
a million users and my failure rate is
non-existent or really low and here's my
oracle network and by the way
it's also settled a million of these and
so
it's not the logo right it's not hey
what nice
what a nice logo you have um on top of a
building
above above a train terminal or
something it's much more
hey there's a million people there's a
million separate contracts that got
settled correctly i have
all the proof that i could ever need
about that
and it's it's not something that's very
easy to gain right because real value
was at stake real value was
was moved around and so i i think once
again
the transparency aspect comes in where
you're able to prove
that the cryptographically enforced
contracts
are better that said you can still
integrate the traditional banks as long
as you create a data feed on the amount
of marble that's
in it that's included so if that's
valuable to you in terms of reputation
you could still integrate the marble
the amount of marble that uh and the uh
the size of the logo we could still keep
the banks around
like i think we will i think what will
happen with the banks and all the
insurance companies by the way
is not that they'll just die or
something i think it'll be just like the
internet
there'll be some of them that adopt this
yeah and some of them that don't
and some of them to do it faster some of
them to do it slower and and that's an
economic decision that they'll make
i think their whole question is is this
a foregone conclusion
i mean i think you know my answer my
answer is yes this is definitely going
to be happening
i think they still have a question of
you know is this gonna change
my uh industry uh but i'm seeing
a definite shift in in people's
understanding
and i think that shift is gonna
accelerate rapidly as one or two of them
their competitors throw their hat in the
smart contract
ring and say well i have i have smart
contracts
i guarantee my outcomes to you what do
they do for you
you know it's risky just use mine and
the second some of them start losing
business because of that they're gonna
they're gonna move very quickly because
that's what all of their compensation
structures and their all their
goal planning structures are based
around they're based around
what is losing us business or getting us
business yeah it's fascinating
organizationally though to think about
banks they're very
old school and their ability to move
quickly
is questionable to me i just look at
basic uh
online banking like how good banks are
creating a frictionless online
experience and not
and i think they're not very good and so
that speaks to the kind of people who
are in leadership positions at banks
the kind of people they hire the kind of
culture there is
so i do wonder if banks will
from inside revolutionize themselves to
include smart contracts
or whether totally new competitors will
have to emerge
that basically create uh new kinds of
banks
whether what is the uh company square
i think that's a it comes up out of
nowhere really
with cash app and they have bitcoin on
cash app whether they will start
incorporating smart contracts and they
will revolutionize
uh the the whole banking industry or
whether bank of america
will revolutionize themselves from
within i'm skeptical on bank of america
but uh you never know it's in general
i'm fascinated by how big organizations
whether it's google and microsoft or
bank of america
pivot hard in a world that's quickly
changing
i think that takes bold leadership and a
lot of
firing and a lot of pain and a lot of
meetings where the one brings up
the from first principles idea that you
know what the ways we've been doing
stuff in the past
required you know we need to throw that
out and do stuff totally differently
i i i know a lot of those in in
in a lot of these different industries
um first of all i think they're getting
listened to more and second of all i
think all of these places
as as i look at it more and more i think
they have a fundamental line of business
that they try to protect and then
everybody's compensation and everybody's
metrics and goals is focused around that
line of business
so the second that
things begin to impact that then
everybody will be
in a senior meeting and and that
will be quite listened to
because he will have the only thoughtful
explanation as to why this is happening
how how things will evolve from there i
actually don't know because i you know
that hasn't
been the case yet but my my thinking is
that there will be people who
don't want to cannibalize certain parts
of their business or don't want to
change certain
parts of their business and then there
will be people who say
look i think this is how the world's
going to work we're going to make a very
very heavy
um kind of set
of commitments to to put resources
towards this
um i already see that with with a few
banks working working on various
blockchain based systems
but granted they've been working on
those for years so i i i think all of
this comes down to these these kind of
quarterly earnings calls
where somebody asks them hey you know i
saw that bank over there
launched a blockchain bond or or a smart
contract derivative platform
and i also saw that they made you know
10 billion dollars
in revenues or or 10 billion dollars in
volume or whatever it is from from that
what's your plan right on the earnings
call
and i i promise you by the next earnings
call there's a plan
and then the question on the next one is
well when's the plan gonna happen and
then by the next earnings call it's
uh plan is happening and and that's
that's that's what these people
are sensitive to that's what these
organizations are structured around
it's not completely economically like
disconnected right they have this core
business they want to protect it
um i understand that that idea
but um i think the the problem with that
is sometimes it requires
it requires this myopic focus right and
and that's what all the innovation stuff
is about every time somebody at a
corporate entity is about innovation
they're trying to sidestep this
but but once again the incentives to
maintain whatever the core business is
is so strong that the innovation people
even even though they they are there um
you know they get i think they get a
phone call and go like what are we doing
for this
and and and the ones that actually did
good work and got ready to do something
for this
have have done their you know their
employer and their organization a very
positive service
whereas the ones that aren't ready i
mean you know they'll make up something
and
you know maybe they're really smart and
they'll get it together i don't i don't
know can we talk about tokens a little
bit
generally speaking there's been a
meteoric rise of a bunch of different
tokens we could just talk about bitcoin
and ethereum as examples
bitcoin i think cost 60 000 in value
what are your thoughts in general on
this rise what's the future of bitcoin
what's the future of ethereum
uh there's there's the uh total value
locked metric
that i think generalizes the different
kind of value of these
uh of these tokens
what does the future value
and impact of cryptocurrency look like
if we look through the lens of these
tokens
i think valuing all these tokens and
determining that isn't something i'm
particularly great at
i haven't spent a lot of time on that
i've spent the majority vast majority of
my time on building these systems
and architecting them and getting them
to fruition and getting them to a place
where they operate properly
on both the technical and the crypto
economic and in every other and in every
other sense
i i think with bitcoin there is um
a certain conception of non-governmental
fiat money
that bitcoin is really the first
creator of right so there's this very
powerful idea called fiat money
it's basically um more or less a kind of
40-year experiment
i think on august 15th of this year is
maybe i think even the 40th anniversary
you know government can say hey i have a
currency and it's worth something
and and here it is in terms of
the way that governments have stopped
that in the past is if anyone tries to
make another fiat currency in their
country
they immediately shut it down right they
immediately say hey
this is really bad you've done something
really bad it's time for you to stop
don't do it anymore and it stops right
that's been the history of
non-governmental fiat currency bitcoin
is really due to its decentralized
nature
the first um and possibly in some cases
in many people's minds is still the only
true non-governmental fiat currency
now how powerful is non-governmental
fiat currency
i have no idea right this is why so
it's really as powerful as the ideas
that people ascribe to it
are right so let's say people start
saying
like right now people are saying hey
it's internet money it's the money of
the internet
okay great what's that worth i don't
know it's probably worth a lot i have no
idea what it's worth but it's
as an idea as a concept to underpin
the fiat money the let there be aspect
of of of a fiat and of bitcoin
you basically look at it and you say
yeah internet money
okay that could be worth whatever you
know sixty thousand six hundred thousand
great question right there are other
versions of the world right where people
say
you know um there are countries that
don't have a good fiat currency
and i see a lot of people using bitcoin
so bitcoin
isn't internet money it's um
countries without a good currency money
so all the countries without a good
currency not now use uh bitcoin
and you know let there be bitcoin as
this right as this conception of bitcoin
what's the value of that
i don't know that's a great question
probably probably a huge amount of value
um then there's then there's a further
conception of
bitcoin has some you know digital gold
there's a scarcity dynamic
there's there's all these other kinds of
dynamics
what is a portable version of digital
gold
with some kind of built-in um
built-in scarcity worth you know kind of
artificially created
scarcity um what's that worth
i don't know that's that's a great
question i haven't done the analysis on
that is the point
might be worth a lot what is it all
worth if all three of these things
you know flow into the same fiat um kind
of
let there be bitcoin as these three
things conception of bitcoin
i don't know what that's worth i also
don't know what that's worth but could
be worth a huge amount
so i i think it's it's not i don't think
it's i personally don't think it's super
important what i think it's worth
or what many other people think it's
worth i don't think that's that's really
that important
i think what's probably important is
understanding
what the societal conception of bitcoin
is
and how does that societal conception
evolve over time
and that interestingly enough doesn't
just depend on
um you know you or me or the people who
made bitcoin or anything else
it actually depends on current events so
for example if people suddenly say
i i'm more and more worried about fiat
currency
i'm more and more worried that
governmental fiat
even if it's the most reliable version
of that
is not as good as i thought it was maybe
i should go on the paypal app and maybe
i should get some bitcoin
just in case what's the world
where bitcoin is a certain percentage of
everyone's ownership
as a hedge against governmental fiat
money
not being so good haven't done the
analysis but
another example right here's this
conception that's
that's the conception so when i look at
bitcoin what i see is a lot of these
fascinating conceptions of of what the
fiat
let there be value of bitcoin is by the
way all of them could be true
um maybe some of them are true maybe
some of them aren't true
and and the fascinating thing is is that
i've seen this conception change right
so when i started
in the bitcoin space the conception was
micro payments
the the the cost of bitcoin is low we'll
have micro payments
micro payments are wonderful for uh
machine to machine
uh transactions micro payments are
wonderful in the emerging market
and that's fine right and and that was
one conception of bitcoin as
let there be bitcoin as micro payments
platform right
but then the value rose and things
changed there was enough expansion in
certain ways
and and now the conception has evolved
into this other conception
but but at the end of the day um i think
governments
have a very clear set of steps for
directing
the public's conception of
their fiat right they say our fiat is
worth this
for these these reasons bitcoin doesn't
have that bitcoin doesn't have
an official bitcoin spokesperson that
goes out and says
the non-governmental money called
bitcoin the non-governmental fiat money
called bitcoin
has value on the basis of this this this
and this here's our fiscal budget here's
our future plans
you know our money will continue to be
safe and secure and reliable
and so it's what what that hole creates
is a is a hole that we all fill right we
all basically come to some vague
kind of group understanding that you
know bitcoin
is worth is worth this because it is
tied let
is it is tied to um
you know let's say
all non-governmental fiat money comes
into question everybody doubts it
uh possibly due to inflation and
everybody says you know
this is nice but i'd like to keep 10 20
of my of my wealth in non-governmental
fiat
just in case um you know
what what are those numbers i mean if
that happens
you know i'm guessing you can add a few
zeros
i like how you say i haven't done the
analysis as if i'm sure a lot of people
have done
quote-unquote analysis but it's not it's
still speculation nobody
can predict the future especially when
so much of it has to do with
a large number of people holding an idea
in their mind
as to the importance of a particular
technology like bitcoin
there's a lot of excitement by its
possibilities but the number of zeros
you add
is uh is an open question and nobody can
do a perfect analysis
except whoever created this simulation
let me ask you this question
who is satoshi nakamoto there's quite a
few people
who suggest that person is you
so is it you
no who do you think it could be
i don't know who it is i i think if i
had to guess it's probably
a group of people some of which might
not even be around anymore
um you know obviously i'm very grateful
to if this is a singular or a group of
people for kicking off this entire
industry and making this amazing change
in the world
that you know i have the the privilege
and luxury of
of being part of in in some small way in
the work that i do
um i think also this kind of focus on
who is
satoshi or who is in satoshi shouldn't
in my opinion matter
so much because regardless of who it is
that in my opinion should have no
substantial significant effect or
bearing on
the functioning or the value or the use
or the
or the security of of of the bitcoin
system right so i think
whoever it is they're probably better
off not not not making that public
and i think beyond that um whoever it
turned out to be
shouldn't matter because it has nothing
to do
with how the system is made useful or
secure or anything else
and so i think that's the um you know
that's the point of view that i have
now if you were satoshi nakamoto would
you tell me
because you said they shouldn't whoever
satoshi is
you should keep that private so would
you tell it to me
or no we're in some kind of weird like
thought experiment here if if i was this
guy
um let me think about this which i'm not
by the way i am not
this person but if you were would you
say it
um i think
uh probably not i don't see the i i
i think that they would cause a lot of
distraction and a lot of weird stuff
and so realistically i don't think it
would help
anybody or even the person who discloses
it but just to be clear i am not
and whoever it is i think they haven't
said anything because they don't want
the attention and they don't want the
distraction and they don't want all the
problems from this
and that's that makes sense to me
conceptually
it's fascinating to think if they're
still out there and part of the
the bitcoin the cryptocurrency community
and um it is inspiring to think that
if they're out there that they're not
revealing their identity because it
would be a distraction
that's kind of inspiring that people are
like that just like george washington
relinquishing power is inspiring because
it's ultimately about the progress of
the community
not some kind of ego driven attention
scheme
again very inspiring the humans at their
best are inspiring
what do you think about the certainty
that people in the bitcoin maximalist
community
have about this particular piece of
technology bitcoin
is there something interesting they you
think that you might want to say
about this community or is it just is
what it is
i think at the end of the day results
speak for themselves and bitcoin
has had an amazing impact on our
industry
and had has had an amazing impact on the
world
and i think you know the result is still
that bitcoin is very widely adopted
and driving um the adoption of our
industry in many ways
so i think it's very difficult for
people to say that you know bitcoin
maximalists don't have something
that they can latch on to and say hey
there's something very real here
i i think there's been decisions made by
the bitcoin community and the people who
made the bitcoin protocol
to focus it on bitcoin and to focus in
on
the kind of storing of the ledger of
bitcoin and the information about
bitcoin and the transaction of bitcoin
and to focus on securing that
and i and you know i understand why that
decision was made to a certain degree
right it was about focus it is
it was about getting something
worthwhile right without adding
additional features and additional risk
and you know that decision is
is a decision that was made and has kind
of
the benefits of focus and the benefits
of
um a certain amount of security and a
certain amount of
guarantees around uh bitcoin and and
what that is and
and the the value of that and then it
has certain
um limitations you know as a consequence
of
of of of doing less or having the system
hold data that isn't related to bitcoin
or not having the system
hold contracts uh contractual outcomes
or smart contract code
so i i think it's just kind of a
decision right and and i i understand
why they're excited and i'm very excited
i started in this industry going to
bitcoin meetups
and i met a lot of fantastic people
libertarian
people that wanted to see the world work
differently and shared a lot of my
beliefs and a lot of my points of view
and so you know anyone who's been in the
industry as long as i have
um has had to come from the bitcoin
ecosystem by virtue of
kind of starting out that early so i
have an unbelievable amount of respect
and um admiration and gratitude for
for bitcoin and that it exists and
everything that it's done and that it
birthed this industry there's absolutely
no doubt about that
you know at the same time whatever
design decisions people make
are the design decisions they make right
and so they
if you've made a design decision that
this ledger and this thing will be about
bitcoin
it won't be about colored coins it won't
be about op return at 80 bytes
it won't be about these other kind of
nuances
that you don't want this to be about
then that's fine
that's that's fine and that's that's
that's a logical decision that's
that's called focus and focus has a lot
of value
um and a lot of great um technology
products have
focused on something and and done that
and then there's a lot of smart people
around bitcoin
building um kind of additional systems
that anchor their security within
bitcoin
and i think that's an interesting
approach that could that could bear
fruit
i think it'll eventually require an
interaction with the bitcoin protocol
in more advanced ways and then there
will be another question of
you know what is the design decision for
bitcoin
is it that bitcoin will be just about
the bitcoin ledger
or does bitcoin want to evolve into
um you know an anchor for all these
other
other systems and and maybe create
additional
data you know kind of more data on chain
on the bitcoin blockchain related to
that
so i i'm excited to see how that evolves
but until then
kind of results speak for themselves and
the results that bitcoin has achieved
for our industry and for itself as
you know kind of the dominant
cryptocurrency and and the conception of
our industry that people interact with
first
is obviously very important and
something that um
i think really everybody in our industry
is grateful for right because without
bitcoin
where where where would our industry be
and that's obviously something that we
we can't forget what are your thoughts
about ethereum
in this in the chain link distributed
oracle network world
is it competition is it collaboration
is it complementary technology what do
you think about ethereum
how much do you think about ethereum
what role does it have
yeah i think about a lot i think it's
complete we're completely complimentary
so there's no competitive dynamics in my
opinion we
are completely collaborative and
complementary with ethereum
and all other blockchains and all other
layer twos
that operate a contract right so we do
not
seek to operate a smart contract we seek
to augment
and enable smart contracts to go further
in what they're able to do
in fact oracle networks have some value
but they don't have nearly as much value
in what they do
if there isn't a mission critical system
like a smart contract
that needs their data right so we've
made our own explicit design decisions
in our own
and created our own focus around
guaranteeing that
smart contracts can go further we've
already done that right decentralized
finance
the the rate at which we put data is to
a degree the rate at which certain
decentralized financial markets grow
and as we put more data we see more
financial products go live
gaming we provide vrf so we have this
kind of focus and it's a very useful
useful and valuable kind of valuable for
our industry focus
at at the end of the day i think that
smart contract platforms like ethereum
made a different set of design decisions
from bitcoin and others and they focused
on creating the smart contract
capability
and and and they kind of wanted that
functionality to exist and i think since
then there's been a number of people
that try to improve on that or try to
you know make variance of that from our
point of view
we want to support smart contracts in
all of their variations
and in all of their use cases so one of
the things that i i personally
like about chain link is their ability
uh or chain links ability and the chain
link network's ability to be useful to
many different chains
and across many different use cases i'm
personally you know a fan of ethereum
ethereum's done a huge amount for our
industry as well
ethereum took us from a world where it
literally took months to make a new
smart contract
by being forced to code it into a
protocol you had to go to the protocol
developers and you had to say hey
i need a dex or i need some kind of
smart contract
put it in the protocol itself put it in
the actual blockchain
mining and kind of block generation
transaction generation protocol
that would take months or sometimes even
over a year that was a horrible
experience
and and obviously very few people wanted
to participate in that and so very few
people made smart contracts
which i was not a fan of right and then
ethereum came along
and um really did a lot of innovative
things and introduced
this approach to scriptable smart
contracts where you could script
all of these different conditions and i
i i found that fascinating before
ethereum i found that fascinating once
ethereum
arrived i found it fascinating after
ethereum launched and i still find it
fascinating and i'm
i'm also very grateful to vitalik and
the ethereum community and all the core
developers there
for taking our industry a step further
so i think they absolutely deserve a
huge amount of credit
for taking our industry from it takes
months to make a really small smart
contract
to it takes you know weeks to make a
relatively secure
relatively advanced piece of on-chain
code that anybody can script and people
can do audits on
and you know that's that's an
unbelievable leap forward for our
industry
and i'm i'm genuinely grateful to them
for that
i think the next step um in line with
our body of work
is how does that scriptable on-chain
code
become more advanced in its interaction
with all of the systems and events in
the real world
which is in my opinion the final missing
piece of the puzzle
right so my body of work the body of
work that i'm involved in
would not be where it is right now
without bitcoin by any measure
it wouldn't even be where it is now
without ethereum and
the growth in smart contract development
that they've created
and now what what i think is going to
happen next is there will be a lot of
different smart contract platforms
a lot of different layer twos some of
them will be private for enterprise some
of them are the republic
there will be some public winners in
certain geographies for
maybe regulation reasons maybe other
reasons there will be other public
winners
um you know the larger internet and and
there will be a number of different
people building smart contracts in
different languages
we are excited and you know i am excited
and the chain-link community is excited
and
and basically there's a lot of um
i mean for lack of a better word
excitement in seeing our industry
graduate to providing more
um use cases more usable hybrid smart
contracts
right because once again it's absolutely
amazing that bitcoin created
non-governmental fiat money
it's an unbelievable innovation and an
invented decentralized infrastructure
and and and birthed our industry it's an
unbelievably
um great achievement an amazing
achievement that we now have scriptable
smart contracts through something like
ethereum
once again monumental achievement in my
opinion
once again we still need to look to the
future we need to look to
how do we take the decentralized
infrastructure
concepts that bitcoin initially put
forward that ethereum then
improved upon and created into these
scriptable smart contract formats
and how do we expand that into the world
of
real world outcomes to change the global
financial industry the global trade
industry
the global data marketplace industry you
know the
and and many other global industries you
mentioned results speak for themselves
and how design
decisions have consequences you've
the chain-link community have come up
with a lot of
brilliant designs so how do you think
through the design choices that you're
facing
where you can't predict the future but
you're trying to create
a better future is there
something low-level
introspective advice that you can give
or describe as to how you think through
those decisions
or high-level how you think about those
decisions
sure absolutely um i think i think
that's a great question and i think that
actually gets
to the core of what the chain link
network is uh supposed to achieve
we are supposed to achieve a maximally
flexible system
so once again this is the big difference
between chain link and oracle networks
in general
and blockchains in my opinion
blockchains do not seek to be maximally
flexible right they say
here's my block size here's the
transaction types you can you
you can put in those blocks here's the
contract language i have
here's here's kind of my blockchain
system right
here's the here's the fee structure for
those blocks they're going to keep
getting you know kind of
composed transactions are going to get
put into blocks blocks they'll get
connected and it'll continue right and
that's a very focused type of system
and that's great and that makes sense
because it's focused on creating
security
for that category of on-chain activity
which is once again
a critical critical part of building a
highly transparent system
and something that chain link enables
and you know doesn't compete with and
just enables to do more
oracle networks conversely have to
interact with all the world's data and
provide
all the services that blockchains don't
provide right so there's kind of a
spectrum
on one end of the spectrum you have
blockchains that are highly secure
highly reliable highly tamper proof
highly transparent
but are not very feature-rich for
example they cannot talk to an api
many of them can't generate randomness
they cannot do some kind of privacy
preserving computation so they're very
secure and they're these kind of
data structures and smart contract
platforms to hold
unchained code that can define
conditions receive
value pay value back out under
conditions and create transparency
around all that
which makes perfect sense and then
there's oracles and oracle networks
that is all the world's data right we're
talking about taking
all the world's data and making it
consumable for
all the world's use cases that have
trust issues
so the amount of variability there is
absolutely massive right
it's like the the decentralized oracle
network and the conditions that that
decentralized oracle network needs to
meet is going to vary very widely from
an insurance contract
to a lending contract to an ad network
contract
to the data sales contract that that we
discussed
to any number of other smart contracts
so really
the ability of a decentralized oracle
network to flexibly address
all of those requirements is what's
necessary
so flexibility is the goal whereas with
uh
on chain like bitcoin flexibility is the
enemy
in the sense that uh you want security
the
you want the focus there and
in that kind of world design decisions
have huge consequences
and then if you look at the distributed
oracle network side
you want to remove the restrictions of
design choices
you want to provide maximal flexibility
then so
it's a completely separate kind of uh
design framework it's a slightly
different problem right because i
we're not trying to define transaction
types fitting into blocks
on a certain timeline of those blocks
being generated we're trying to say hey
there's this world of services or this
world of data that's not very
deterministic
but it's unbelievably useful to these
smart contracts over here
and actually they need it to even exist
and we really want them to
exist because once they exist it's going
to completely redefine what our whole
industry is known for
right and define nfts are not even the
tip of the iceberg they're like
like the snow coming off the top of the
iceberg
and so our goal is to create a framework
and an infrastructure
and a software that allows people to
compose decentralized oracle networks
right so
initially you can compose a
decentralized oracle network
of seven nodes that goes to three data
sources to trigger your contract worth a
million dollars
and that's where you could start and
then let's say your smart contract your
d5 smart contract goes to a billion
dollars
well then you need to make some changes
right you need to go from seven nodes
to 15 or maybe 31 nodes and you need to
go from three data sources
to five or seven and you maybe need to
create some
some kind of what we call circuit
breakers
and and some other checks and you need
to make sure that the centralized oracle
network comes to consensus around those
checks because now
the decentralized oracle network isn't
controlling a million dollars it's
controlling a billion dollars
and we have decentralized oracle
networks that control well over a
billion dollars multiple billions of
dollars
and we see them growing and getting more
advanced data sources and more advanced
features
and then if somebody else comes and says
well you know i don't really want to
make a d5 product i want to make crop
insurance
and i have a completely different set of
conditions i want this method of
consensus
and i want data to be aggregated in this
way but not the way that you do for
decentralized financial products
i mean what are we supposed to tell them
we're supposed to tell them no you know
our decentralized oracle network can't
let you do that
and yours you know you can go and and
wait another five years until
until somebody builds it for you that's
not what we want to do right what we
want to do is be able to say
absolutely here's an example
of how somebody else made a
decentralized oracle network for
for weather weather insurance right um
here's a template change that template
evolve it to meet your needs
and then someone else comes and says hey
i have some some other use case in
gaming
right i want to make nfts related to
real world sports events or i want to do
whatever i want to do with with some
kind of sports related data
wonderful here's the framework here are
your risk
dynamics here's a collection of node
operators
here's a set of pre pre-integrated data
sources here's a reputation system to
assess
the quality of your ensemble of nodes
here's a way to scale that up as the
as the value in your contract scales
here's all the tools that you need
to build this contract and and what we
actually see now as we as there are
multiple types of computations and data
data sources that are provided by
different decentralized oracle networks
of which there are now hundreds we now
see
that a single hybrid smart contract
might use multiple decentralized oracle
networks
so there might be a hybrid smart
contract that uses a
price data decentralized oracle network
a proof of reserve
oracle network a random historical
network
and i think we're going to continue to
see this dynamic
that more and more advanced contracts
compose
various decentralized oracle networks
into more advanced use cases
and this is this is the dynamic that um
you know we're focused on enabling and i
think it's actually a very virtuous
cycle for everybody because
the more of these hybrid smart contracts
we enable on ethereum
and other blockchains the more our
industry provides
real world outcomes to the larger world
which is at the end of the day what i
think everybody in our industry wants
everybody in our industry wants hybrid
smart contracts
to become the way that global finance
works global trade works global
insurance products work
because they will inherently need both a
blockchain
on which on which the contract itself
lives and an oracle network
that powers all of the other
interactions right as a developer
how would you recommend somebody
listening to this
but also me
to get started with smart contracts and
to get started with hybrid
smart contracts well well for hybrid
smart contracts i'm going to have to do
some kind of shameless promotion
please where let me twist your arm
thank you um i i think you can go to our
youtube
we we have a lot a number of developer
tutorials chain link youtube
yeah chain link you i think you could
just search shane link on youtube you
should you should find it
um beyond that we recently had a
hackathon we
where we had a huge amount of very very
kind of advanced hybrid smart contracts
getting built to elaborate on that
you had a hackathon is that something
that people can follow along
like a video or there's web page
traces of what happened or is there
future actual hackathons that people
could
literally participate in there's plenty
of more hackathons coming up we want to
enable as many developers in web 3 and
web 2 to build hybrid smart contracts as
a way to redefine our industry and
and kind of make all of these smart
contracts come to life
there are definitely going to be more
hackathons so people should go and
pre-register register on a list to get
involved in that that's a great resource
where we have a lot of speakers and a
lot of educational tools they happen
over a course of
weeks not days so there's a long time
for people
to work on these things at the speed
that they that they find comfortable
two questions one is there kind of a
hello world
entry point for uh
hybrid smart contracts and two on the
hackathon side like what kind of stuff
do you see people building at first
just kind of getting their feet wet like
why in terms of the kind of applications
that could be enabled
i mean there's there's unbelievable
things that that that we see people
building i i think
how to get your feed with i think the
hello world is probably define because
it's pretty straightforward
and there's a large amount of data
sources that we already have putting
data on chain on testnet
which is the test environment in which
people would build so i think d5 is
probably
to a certain degree the most exciting
for certain people and pretty pretty
expansive in terms of the tutorials and
the amount of contracts to see how
people have already built it
i think beyond that we see people
building amazing things at these
hackathons in the previous hackathon
we saw somebody build a smart contract
that allows
the rental out someone to rent out their
tesla
right so it allows the tesla api
to give someone else access and rent out
someone's tesla on the basis of a smart
contract kind of coordinating payment
which was you know which was kind of
amazing the the more recent hackathon we
saw something
called d-bridge which uh is a
cross-chain solution that uses oracle
networks to confirm data on different
chains
so i think the things that people build
will will just become expansive and
varied in ways that i can't
can't even imagine um but i i think this
recent hackathon saw
a huge huge list of different um
different kind of winners in different
categories
and there's so many different categories
we even have a gov tech category and
a whole a whole bunch of things if
people want to see what's possible they
can go look at the winners
i think that's that's probably a good
idea at
yeah that's that'll be on the side of
the hackathon there's a blog related to
that
and we're going to have more of these
and once again our our explicit goal
is to take our industry into this world
of hybrid smart contracts
which which just benefits everybody it
makes more on chain activity
it it helps provide real world value to
the average person from all of this
infrastructure period
and at the end of the day i think that
it just redefines what our industry is
about through use cases right because
if you only learn through our industry
from the point of view of a single use
case
like the nft use case or some other use
case that's what our industry is about
and the more of these use cases that
people can make available
to the average person or to the fintech
world or to the insurance world or
wherever
the faster our industry will not just be
about bitcoins or tokens it will be
about changing global finance
changing global insurance changing
global trade and
and that's the change in the world that
i and a lot of other people in this
industry i think
got into this for now it's funny you've
mentioned about
you've had a lot of kind words to say
about bitcoin and um
ethereum as important technology that
paved the way for the future
and you somehow did not mention one of
the most profound pieces of technology
which is dogecoin
what are your thoughts about this
particular uh
uh revolutionary technology and what are
your thoughts about deutsche coin going
to the moon
to mars and outside of the solar system
i think dogecoin is um is a very
interesting kind of uh
probably closer to a social experiment
than than anything else
isn't everything a social experiment
yeah i i guess that's fair to to a
degree
yeah um i think it's fascinating how
that's evolved
um i think the people that made it made
it with certain you know
goals in mind and then it's kind of
taken on a life of its own
i don't fully understand exactly why
it's taking on a life of
of its own at this point um i once again
i don't spend too much time thinking
about you know different tokens and
and and how they're evolving i'm much
more focused on on the launching
and um the technology around trust
and all those kinds of ideas but you
know i think
one of the fascinating things about
doshcoin is
how technology that is
that leverages social dynamics that
technology's ability
to utilize fun and memes
to spread i think it's really
interesting
i i don't think it should be discounted
as a
as if i think i tweeted today something
about like the fundamental force
field of fun uh that fun
has an effect on the space time so
general relativity
describes how mass and energy
can curve space time and i was just
giving an example that when life is fun
it seems short when life is not fun it
seems very long
so fun has a very similar effect on
space time like in current space time
in that same sense there there is a
power to the meme
and i think dogecoin illustrates that i
think elon is an example of somebody
that uses dogecoin i don't know his
philosophy but
in particular in this aspect but he does
use it effectively
to excite the world in a fun way
about the possibilities of future
technologies like cryptocurrency
i think the bitcoin world is very
serious right now
and we've spoken to about bitcoin
maximalists
there is very little space for fun and
joking
in the bitcoin world but there's still
a little bit of fun and uh humor left in
the dochcoin world
in that sense i think it's exceptionally
powerful to inspire to excite
to uh to be able to talk about stuff
without um
without the seriousness of
financial impact that uh now certain
cryptocurrencies have like bitcoin
so i i keep an eye on i i've previously
mentioned that dogecoin i think
is a fascinating piece of technology
because i do
think cryptocurrency is much bigger than
uh the the technology like that you
focus on
there is also social element that you
also spoke to
that's uh i think not quite yet
understood
and it's fascinating to watch especially
as it covals
with the different tools on the internet
different social networks
social network mechanisms on the
internet so
i'm a huge supporter of dogecoin because
i'm a huge supporter of fun
i'm fascinated to see how it'll work out
you think i'll go to the moon you think
it'll be the first cryptocurrency to
land on the moon
i i couldn't say i i haven't i haven't
done the analysis as
i've said before i haven't done the
analysis well yeah
no matter what i do hope we uh we'll get
humans back on the moon
and uh hopefully get humans on mars soon
coin bitcoin
or not let me ask you about books
and movies what books and movies in your
life
long ago when you were a baby sergey or
today
had an impact on you maybe you would
recommend to others
and and maybe what ideas um you took
away from those
books movies coloring books children's
books
blogs whatever yeah yeah sure
um so i think one of the things that had
a very big impact on me
were plato's dialogues and particularly
protagoras and gorgeous as
as as some of the two initial ones
i i think what plato's dialogues do very
well is they
give people a clear picture of what
dialogue looks like
and what the assessment of information
um
probably should look like right and how
the dissection
and analysis of an idea is very
important and how it can actually be
taken in either
direction but at the end of the day that
the process of eliminating
um kind of this fuzzy thinking
and arriving at whether it's an external
dialogue or an internal dialogue
about an accurate picture of reality is
actually very important
and so i think i'm very lucky to have
read the dialogues
when i was uh in my early teenage years
and it had a very large impact on me
because it kind of
showed me that you know nobody knows
what they're talking about
i would i would play out dialogues in my
mind
and i would engage in certain dialogues
with with um with different people
and what you know the platonic dialogue
showed me was
kind of how to tell when someone has no
clue
and a lot of people are very good at um
kind of
say they have a clue right saying like
here is how the world works here's what
you should do with your life here's what
you should do with your time here's what
you should do with your money here's
what you should do with your attention
here's what you should do with all these
things and
i think the ability to evaluate
information
generally is something that is
surprisingly under
taught i i don't actually understand why
there isn't a course
in like high schools or universities
that's just like
here is how you evaluate information
here's how you engage in external
dialogue and internal dialogue
to arrive at an accurate picture of
reality rather than the picture of
reality that other people want you to
have
for their benefit most often right and
at the end of the day
i think that put me down a path to
really try and understand
beyond that um i think biographies
have had a very large impact on me um
you know plutarch's greek and roman
lives after i read plato
i started reading a bunch of stuff greek
stuff i was just like these greek guys
they really know how it is
you know they did this 2000 years ago
and they still got it right
there's something here it's kind of this
like theory of time
around um the value of intellectual
ideas right if an intellectual idea
has survived the test of time it's much
more valuable than the intellectual idea
that i just came up with 10 minutes ago
haven't told anybody and hasn't gone up
against
you know the all of the kind of
rebuttals so so what's your favorite
what would you say would be a most
impactful biography that you've come
across
i don't think it was those greek roman
biographies because they were very
uh far away i think that um
probably one of the most impactful ones
that i can
remember recently is around uh
vanderbilt
and so vanderbilt was these uh was this
guy who basically
without that much of an education he
would
invent or work with people to make these
steamboats and then he had a lot of
acumen
around creating certain monopolies
regardless of you know what
was um right or wasn't right
and then fascinatingly enough it all
hinged on like a supreme court case
that decided if monopolies were
acceptable
um in in the form of state created
monopolies or not
and if they were you know if it was
deemed that the greater monopolies were
acceptable he would have had a huge
problem this guy
but it was deemed that state created
monopolies through these um
licenses for steamboat uh routes
was not acceptable and that did two
interesting things that unseated
um some kind of old-time landed gentry
in the americas in like the 1830s and
40s
and it um you know basically made him
right and he saw it before other people
so i i think this i think vanderbilt was
a very interesting
um personality first of all of all the
of all the biographies that i read
is um is somebody who really took um
took the situation in hand and kind of
took action to achieve an outcome
which i i think was uh was an amazing uh
amazing um
result the fascinating thing by the way
is
or amazing way of looking at things the
fascinating thing by the way is that the
ferries now
in new york harbor are all um run
as a public good so the fascinating
thing is that the guy he
he focused on an industry and he worked
on something that was so important
that it ended up becoming a public good
and i
i think that that that's an interesting
conception of of how to look at
this industry um i think there's um
a lot of economics dynamics around this
industry but i think i might have sent
this i might have said this somewhere
else before
but really the success of someone in
this industry
is whether they're able to make a linux
or http or an https like system
that lives on for a very long time
and is essentially a kind of public good
it's a success
of an idea even if that idea is
originally sort of a capitalist
idea about that's grounded in financial
benefit
success of it is if it becomes a public
good it is so universal
it is it is so fundamental to the
quality of life that it's a public good
it's deemed to be so valuable that it
should be a public good
yeah i think so i think that's a pretty
uh a pretty good definition of success
that you
you work on a body of work and that body
of work isn't just
some commercial enterprise it's um it's
a body of work that
whatever commercial aspects or economic
incentive aspects it might have
it eventually is so important that it
becomes
um critical to how society functions uh
i'm personally quite
um you know lucky and grateful to be in
my opinion
working on something like that with an
amazing
team and an amazing community that uh
seems to really very much care about
this hybrid smart contract
transparent uh world that uh you know
a lot of people on our industry
realistically i think this is why a lot
of them signed up
you know this is why i came into our
industry it wasn't because
bitcoin it was it was because
bitcoin was a picture of how the world
could work in so many other ways
and that picture of how the world could
work in so many other ways
um attracted me a very long time ago
and i think that
all of this stuff will eventually become
a public good i think it'll become so
critical to how
societies function internally and
internationally
that just like there are systems you
know like the federal reserve like
global payment systems like all these
types of things
i think eventually all of the all of
this technology will be baked into these
society societally critical systems
and if i in our community and the people
i work with in the body of work that
we're working on
can make some kind of contribution to
that shift
um towards a fair economically fair
transparent
society from my point of view it's a
very very worthwhile body of work
in in terms of the show you you also
mentioned the show
you know one of the shows that i really
um seem to like more and more for some
reason
is uh star trek not the old star trek i
don't really get the old star trek the
special effects aren't good enough star
trek like the next generation and
voyager
yes and um deep space nine and all those
i i think whenever i happen to watch a
star trek
show again i have a very simple
conception in my mind that i really
didn't
have whenever i saw it way back when
it's that
this is what the world looks like if
technology
takes us towards a utopia right so i
think there's this
fascinating thing where technology can
take us towards the utopia or towards
the dystopia
and in my mind those kind of three star
trek shows
are a picture of what
human civilization looks like if
everybody's technological ambitions
successfully take us towards a utopia
right because in the star trek universe
you're not seeking money or you're not
seeking safety or you're not seeking
you're not really seeking anything for
yourself everybody you know within
maslow's
hierarchy of needs has has gotten so
many things for themselves that their
that their goal
is learning and discovering and or
helping
and i i think there is this conception
of human life
once the baser needs are satisfied and
at the at the end of the day i think
that's what technology
generally can elevate um all of human
civilization to right it can
elevate us to star trek world where
if people want to invent they can do
that all day and nothing else if people
want to explore the stars they can
explore the stars and and they don't
have to worry about
economic scarcity or any number of these
other conceptions
so i i don't know what the most
impactful on me shows have been
but for some reason recently star trek
um in this in the newer variant
um not the most new new star trek shows
those shows are a little strange the
the kind of middle star trek universe
where where everybody
is doing something with like a very uh
important purpose
and and nobody's thinking about like
where's my paycheck or where's my
you know where's my whatever they're all
kind of like we have to discover
the formula to this to save the planet
over there and literally every episode
you're discovering a formula to save a
planet right of some kind or a universe
or
ecosystem or whatever and it's and
you're looking at you're like
you know this this this is this is like
this is a pretty good place to end up
this is where we might want to end up
so it gives you hope i mean it's funny
that we don't generating
we don't often think about the
i think it's very useful to think about
positive visions of the future
when we're trying to design technology
there's
a lot of sort of in public discourse
a lot of people are thinking about kind
of how everything goes wrong
it's important to think about that
sometimes but in moderation i think
because you
there's not enough in my little
corner of artificial intelligence world
people are very kind of fear monger
centered there's a lot of discussions
about how everything goes wrong
important to do but it's also really
important to talk about
how things can go right
because we ultimately want to guide the
design of the systems we create
to make things right and i think with
hope and
optimism not naiveness but
optimism you can actually create a
better world
like you have to think about a positive
a better world as you create because
then you can actually create it
um yeah i'm i'm one of the people who
thinks that
having an optimistic view of the world
is better for design and creativity
than having a pessimistic one it's hard
to design when you're in fear
uh do you have advice for
young people speaking of being excited
about and hopeful about the future world
do you have uh advice for young people
today
in uh computer science world and
software engineering world and crypto
world but
maybe in any world whatsoever
for life how to pick a career or how to
live life in general
i think the thing that that young people
should do
is is not any one specific thing for any
any one specific young
person i think what they should do is
what they won't be able to do in the
later stages of their life
yeah and the way in my opinion from a
framework point of view to think about
that
is that the amount of obligations
and the amount of time that a person has
seems to just diminish over time right
so the amount of free time they have
right
so you start your job you get a bunch of
responsibilities some something with
your partner's spouse
more responsibilities kids probably even
more responsibilities
and soon enough the time that you have
to educate yourself to travel
to you know experience the world however
create whatever creative endeavor you're
interested in um
slowly but surely disappears i think
this is something that you know young
people don't fully
realize they they assume that the world
as it is now
and the amount of free time that they
have
to travel to educate themselves to make
new friends
to do all these things will somehow
maybe diminish by ten percent
it won't diminish by ten percent it'll
diminish by 90
yeah and the 10 that you have you'll be
resting
to get back to work and get things done
so yeah what i think young people should
do and this is why it's very different
for each of them right
i can't tell young people hey you should
study philosophy
travel and start um your own enterprise
to achieve something worthwhile in the
world right that might be
something that's good for me with my
values and my um
kind of worldview but for other people
might be something else
i i think the way that they should
conceptualize it
is imagine if
over the next um 10 12 years
the amount of choice that you had about
what you could do
was cut down by 90 percent
what would you and this is you know
copying from this kind of just
jeff bezos regret minimization framework
in that framework it's like what would i
regret not doing at 80.
and that's kind of meant to create this
long-term view
and make these decisions now that'll get
you to
a long-term future that you can look
back on and be proud of your life right
what i think young people should do is
they is they they should say to
themselves look
if i never get the chance to travel for
as long as i live
assuming that after 25 after 27
after 29 that's the case how will i feel
about that
if i never get to start a company after
after i get married after i have kids
how will i feel about that
and whatever they feel the worst about
is what they should do
whatever they feel like when they say to
themselves you know if
i don't travel now i will never travel
and they feel horrible about that they
just have an overwhelming
fear and disgust at themselves
in that type of state at 25 27
29 that's what they should do and they
shouldn't listen to anybody else
um i i i let me put it through this way
if you're really smart you're gonna make
it anyway
there's a lot of people putting a lot of
pressure on you because they're afraid
whether you're going to make it if
you're really smart you're going to make
it anyway
if you're not really smart you're
screwed anyway
so either way just relax with it and use
your time well to do the the the things
you would
most regret not doing that's really
fascinating
i i wouldn't i wouldn't say relax i
would say very much
cherish the free time yeah the
discretionary time that you have
from the age of 18 to maybe 25.
yeah because at 25 everyone's going to
start looking at each other
and asking what have what have i
achieved like my friends have achieved i
haven't achieved
and then by the time you get to 30
you're going to look at each other again
and go
well my friends have a family or a
company
or a phd or whatever what do i have
and the pressure will just increase and
it'll increase so much
that even if you want to go and do the
fun thing
it will not be fun because the pressure
yeah
of comparing yourself to your friends at
25 or your peers at
30 will be so great that you will
no longer it will no longer be normal
for you to be in a hostel at 30
you know kind of like living it up right
if if and and this is why i also can't
tell you specifically what it is for me
it was getting an education in
philosophy that was rigorous and in
depth
it was traveling and it was starting an
enterprise that i thought were that was
worthwhile that i directed that i could
make into something great
that's what it was for me for other
people it might be something with a band
it might be something with painting it
might be an education
you you by the way should also should
not assume that your ability to get an
education
will um improve all of those
responsibilities
will take away your ability to get an
education
so if you value having an education if
you value being
a deeply educated well-rounded person
with a wide array of knowledge on a wide
array of topics
capitalism will force you to specialize
that's what it's good at
it's going to take you it's going to
fashion you into a very specific tool
for a very most people into a very
specific set of tasks
if you want to have an education in
something get it now
if you want to travel somewhere travel
there now if you want to you know do
some kind of creative endeavor that you
doubt whether you'll have time for in
the future do it now
you won't have time for it in the future
you won't have time to
read philosophy books all day
unfortunately you won't have time
to fly to you know italy and
kind of hang out with people if you're
serious about your life
you're going to get more
responsibilities you're going to get
more stuff to do
and so my advice to you is do not piss
away
this rare unique discretionary time
and if your friends are get new friends
get smarter friends get people who are
using the limited time they have better
yeah um that's my advice so it's just a
quickly comment it's brilliant
you know to reframe high school and
undergraduate college education
sometimes people want to quickly get it
over with
but one thing
i remember thinking and it's very true
about high school it's one of the only
times in
in your life you'll get a chance to
truly get a broad education
you don't often think of it that way but
it's a chance to really
enjoy learning things that are outside
of the specialty that you'll eventually
end up with
and that's how college education is and
a more fun side
i played music i i did martial arts
and we offline mentioned played video
games i find it fascinating
and brilliant what you said which is the
world will
will not give you a chance to truly
enjoy many of these things
and truly get value from many of those
things
uh once you get older i find it
exceptionally difficult to enjoy video
games now
there's so much stuff to do so
responsibility
and i at the time when i played elder
scrolls
and baldr's gate and diablo ii and
at the time i thought maybe that was a
waste of time
but now looking back i realize
because i always thought you know let me
get the career first
and then i'll have a chance to play
video games that's the way i was
thinking
you know it was a waste of time because
i should really
progress on the career and then i'll
have time to play video games no the
reality is
that was really fulfilling those are
some of the happiest
travel experiences of my life as me
traveling to those
virtual worlds and spending time in them
and it was really fulfilling and they
stayed with me for the rest of my life
and i get to experience echoes of that
when i play video games these days for
an hour here an hour there
like one hour a month or something like
that but
even those experiences as silly as they
are they seem like a waste of time at
the time
enjoying them fully unapologetically
and you know in a framework exactly as
you said would i regret
being the kind of person who've never
played those video games
and i can for myself honestly say that
yes
uh look when i'm on my deathbed
i'm i'm glad at boulder's gate yeah we
built
ballers gate 2 and and all those uh
arena daggerfall morrowind
and all the elder scrolls games and
um yeah
the things that don't necessarily fit
into this kind of storyline of what a
career is supposed to be
travel and all those experiences that
you might i think i just like to say one
one one final quick thing on on this um
i i think this extends to really hard
things as well it extends to the things
you want to do
but one of the best pieces of advice one
of my mentors um
gave me early on in in my career at
around this time
is that it will actually become harder
to start a company
as you get older yes once again because
you have more responsibilities you're
responsible
to your partner for some kind of income
to create a life together
once you have kids you're responsible
for an even greater income to create a
life for kids
and startups do not generate income
right they take
many many years before anything happens
people are getting evicted people are
eating ramen noodles that is a thing
that happens that that that will happen
so i'm not saying that you should do the
fun things or the enjoyable things
i'm saying the things that you would
regret
not doing that you can uniquely do
in the time span from 18 to 25
which one of which is if you plan to
have a family
and start a family when you're 25 you
should start a company now
you should not wait until a bunch of
people depend on you for income to eat
to start a company the amount of
pressure that will be on you at that
point
will be monumental you should start a
company when nobody depends on you
and you can sleep on the floor eating
ramen noodles
and still have a great time and show up
with a lot of enthusiasm
and be excited so um i i just mean
whatever you want
to really devote yourself to and and and
really do
don't put it off don't go to consulting
or banking or any other industry and say
i'm going to do this for three years and
i'll get experience
the only way you get experience is by
doing something you go
you do it you fail you do it again and
again and again and again and again
and then you have experience and then
you can do it right that's the only way
experience happens there is no other way
short of mentorship if you're lucky to
get mentorship 99 of people don't get
mentorship
and even though we're talking about
young people i feel like you're speaking
to me as somebody who's
who spent the last two weeks sleeping on
the floor because there's no mattress
and somebody who is single and somebody
who's thinking about it doing a startup
i felt like you were speaking to me as a
yeah as a fellow young person
let me ask you about this whole
life of ours to zoom out on the big
philosophical question the ridiculous
question
what do you think is the meaning of it
all
do you think about this kind of stuff as
you're creating all the technology
uh as you're thinking about this future
you ever zoom out and think like why
why why are you sergey striving why are
we
the human species striving for the stars
so i think it comes down to um you know
whether
people want to live in society so if
if people decide to be part of society
they have a certain um
set of conditions that they decide to
take part in
right so i i think what this what this
comes down to
is a lot of really involved
conversations
but if we assume people have free will
and choice we just kind of make that
blanket assumption
then the question starts to become well
what choices do we make
and how do we live with those choices
and
i think probably the most fundamental
choice is whether we exist
in a society or we choose to leave
society
and there are people that do this there
are people who live in the woods there
are people that immigrate to other
societies
and they make a choice right and as they
enter those other societies or they
choose to leave
leave society and go live in the woods
they um
adopt a certain set of values right they
adopt values that the society prescribes
they compromise their own values they
define their own values and they create
a set of values for themselves
right i think um
at the end of the day if you're going to
choose to live in society
in addition to all the minimums of you
know not throwing garbage on the floor
and
you know doing doing nice things for
people that need help and
and and doing any number of things to
just be a normal human being within
society
you you have to ask yourself what am i
doing as part of society
right you can always say hey i'm gonna
leave society i'm gonna live in the
woods
i did that right i went and i lived in
the woods and i gave it a shot
realizes a ton of stuff huge amount of
clarity from that but
when you decide to live in society you
you take on
first of all certain minimal agreements
you you
mold your values a little bit to that
society that's another choice that
people
inherently make and then there's
uh a question of well what am i doing
here right what am i doing in society
right so when people say the meaning of
life i don't know what the meaning of
life is the meaning of life in society
right what what's the meaning of life
for the choice that you've made within
society right because that's
maybe the first fundamental choice you
made you made a choice and you continue
to make a choice
to be part of society and a specific
society
right so you've made this choice you're
part of a society
and now you kind of have
a life and you have people around you
and then the question is in my in my
opinion the question is what is the body
of work
that you want to make right
i think personally that life is kind of
so short
and the ability to get enough resources
for yourself in
at least the developed markets where
we're like lucky to be in
is so relatively abundant that
we you and me have the luxury you know
by your pursuit of a phd
you you know you've had this luxury i've
had this luxury um
through the work that i've been doing to
pursue
something that makes society better
so this is kind of the um
question i would say the question is am
i going to live in society yes or no yes
okay most people choose yes
i understand why to a degree i
understand why some people choose now
and then um what is the but i'm going to
be in society i'm going to
if you choose to be in society you're
just choosing to abide by the rules
you're choosing to just do the minimum
right that's what being part of society
means
people that choose to be part of society
but don't want to do this it's very
confusing they should just leave they
should just go look
i don't like this deal i'm going to go
somewhere else i'm going to live in
tibet i'm going to
live in the woods i'm going to live
wherever where the rules are to my
liking
right um you you've chosen to be in
society
next question kind of final question is
what is the body of work
that i'm going to be involved in because
in in looking at that jeff bezos kind of
regret minimization framework thing i
think that's what a lot of it really
comes down to
is you kind of the framework is at eight
years old you look back over your life
what would you regret not doing
what would you regret not not pursuing
i think there there are a number of
things on a personal level each person
has
but i think at least for me and and
probably for many of the other people i
know there's a question of
what is the body of work that i was
involved in
what did i do what what happened right
what was i involved in
and in my opinion you you should have a
good answer to that
and you mentioned the body work in
relation to
whether it helped make a better world
and
the fundamental question there is what
does better mean
so it's our striving to understand what
is better
what kind of world would we love to
exist
after we're gone and i think that's
another
thing almost unanswerable question but
it's one we can strive
towards is what is what is a better
world
right i i think that's all that's that's
once again a very that's a very personal
question i'm not sure if there's an
objective moral truth
that's going to suddenly give us all an
answer i think it's actually quite
fascinating to me when people feel they
have this objective moral truth they're
so sure in their opinions you know
this is what we do we should go you know
hurt them or help them or
kill them or or or rescue them or
whatever right there's this there's all
these kind of
very situational specific kind of like
this is the right thing to do the
objective moral truth told me
that this is it but maybe there's a
definitive truth
that we can uh arrive towards uh sort of
a consensus
of what that is within the little local
pocket
of society that you're in yeah that's
the point that that's what happens
people just then mislabel it and they go
like objective moral truth
yeah this is this is not my this is not
our idea yeah you know this is coming up
from on high here this is
this is the this is the the objective
moral truth that
you know i i think exists in some
metaphysical form
somewhere and then you build a building
with marble and it's big and
usually what happens and then you
convince yourself that that building
represents i think those people actually
under
the people who build those buildings
under probably understand that there is
no musical object they're just like
we're all just coming to consensus i'm
going to build the biggest building and
you're like me and that's what we're
going to do right like
they just they just look at it that way
probably i
i i think i think what ends up happening
with with all these values is yeah
people should determine that for
themselves i i agree that there's a
second order question here of what is
the best the
the best body of work to work on um
personally i think that's probably a mix
of
what could you realistically achieve you
know
is that going to have an impact on
society that you feel good about yeah
right so these these are probably the
two aspects of this question and
is this going to have a good impact on
society that you feel good about
obviously very subjective right some
people save animals some people say
forests um we and and i are creating
this
uh system of economic fairness and
transparency
i feel that i'm in a good position to
enable that
i feel that i have a good chance of
succeeding at that and i think that the
impact will be
quite um quite meaningful for a large
number of people
and so i'm completely happy to look back
once i made ian see a body of work that
achieved that
and be very proud of that right because
i think that's what i'll be doing
when i'm looking back so well i agree
with you the the scale of impact
as about smart hybrid smart contracts
this whole idea that you're working on
has the potential to transform the world
for the better
at a scale that
that i can't even imagine so speaking of
which
means even more that you would waste so
many hours of that exciting life with me
thank you so much for talking today
sergey this is a really fascinating
conversation
a really fascinating space and i can't
wait to learn more so thank you so much
for talking today
thank you for having me it's been an
absolute pleasure thanks for listening
to this conversation with sergey nazarov
and thank you to wine access athletic
greens
magic spoon indeed and better help
check them out in the description to
support this podcast
and now let me leave you with some words
from copernicus
to know that we know what we know and to
know
that we do not know what we do not know
that
is true knowledge thank you for
listening and hope to see you
next time
you