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Hi everybody! Okay let's make sure the stream is working. All right can everybody hear me all right? Just confirm that in the chat please. Making sure that my audio is working properly. Okay I had a little extra time today, so I figured why not actually do something a bit different; so every now and then I do an impromptu video talking about latest events for Cardano and now I said well wouldn't it be cool instead of me broadcasting to you, you broadcast back to me and ask me some questions about things that have always been on your mind. So I don't know how long I'll be here or how much time I'll have but I'll try to get to as many of your questions as possible so feel free to share the link and send me all your questions. So a few things that have already been asked that I think probably would be good to break the ice. One is do we have a partnership with Google or what is the story behind Google and you know what did we actually do there and so forth. So the story is that I met with Google I think over a month ago I was in London, and originally we were gonna meet Ireland but they said hey come to our London office and I said all right so I went there and it was an informal Q&A session. So basically they said hey we'd like to ask you lots of questions about the cryptocurrency space, about the technology that Cardano has and what IOHK does as a company. I said all right, well you could ask me whatever you guys want that's fun. Let's hope that we come to some sort of good conclusion. So we were there for about two hours give or take and we produced transcript of the questions that were asked and then there was kind of a nice tour that they gave us of the building. The London Google office was really pretty and we really enjoyed it and we went about our way. So we asked Google if they would mind us creating a transcript of the meeting and then posting it they said no because transcripts take time to produce. We spent about a month on it, and we released it, as soon as we released it we ended up getting in an overwhelmingly large response, mostly with people insinuating that there soon some sort of partnership with Google on the way. Here is the reality. Google is a multinational company. It's one of the largest most powerful engineering companies in the world. They have some phenomenal scientists working at Google from world-famous cryptographers, InfoSec people. If Google is going to do a cryptocurrency, Google does not need to partner with me and they don't need to partner with Ethereum or Bitcoin or anything else. They're just gonna go ahead and do their own thing. That said Google is a good patron of open-source technology, and many of their employees do invest their weekends and at least one day a week on contributing to some open source project. Google does have a very large internal cryptocurrency and blockchain mailing list and a lot of their employees love this space. In fact Mike Hearn is one of the most famous Googlers to work. He was originally a core developer of Bitcoin. So there's certainly a lot of interest in the company there, so we felt it'd be an excellent opportunity to tell them what we're working on and if any of their employees or affiliates want to make open source contributions we'd always welcome it; but I don't think there's going to be a partnership anytime soon with Google. I think Google like Microsoft and Apple and Facebook is just gonna go its own way and do its own thing at the high level but there always are opportunities for us to collaborate and if Google has some ideas or we have some ideas that we think makes sense then we'll of course pursue that we are using cool technology in our stack. Electron is actually a fork of chromium and node and stitched together and that's the heart of Daedalus and there's a lot of other little things that Google's worked on in the past that we've pulled into our text deck because they're just legitimately really good ideas and we hope that Google can see parts of our stack as useful to things that they work on. So that's the Google question. Okay let's take a look at these questions we have here. Oh this one's interesting.
What is your relationship with Cardano communications and your relationship with Michael Parsons?
So that looks like a fun question to ask. So the Cardano foundation, EMURGO and IOHK are kind of the three core entities at the moment behind Cardano. Cardano and from the very beginning was federated. It wasn't like in the beginning there was a person, then a company, then a collection of companies. In the beginning there was a collection of companies and each and every one of them serves a different role in purpose in the ecosystem. So IOHK builds the protocol. It's our job to figure out at least for the initial impulse what is the core collections of technologies necessary for a really good crypto currency, that the community can then take an augment, meaning that there are governance tools built in and there's funding tools built in so the community will have the resources necessary to execute on the next roadmap, post our involvement but then there of course needs to be an entity that's kind of the evangelist and it goes around and says you should build on Cardano, you should use Cardano in your stack. Cardano is the most amazing thing in the whole world and that entity is EMURGO. They're kind of like our version of consensus. consensus is tremendously successful for the Ethereum ecosystem and they've done just amazing work for Ethereum and our hope was that could there be a consensus for Cardano and that's what EMURGO does amongst other things but then there actually needs to be that objective neutral party that tends to keep everybody honest and make sure that the claims that are being made and things that are being done are reasonable. Furthermore, if there are obvious attempts to scam people like fake wallets or blatantly dishonest statements which are intended to hurt people or steal their money, there needs to be somebody who has the mandate to go out there and fight those people and get things where they need to go. So the foundation is both a community management kind of a golden source of information and it also serves as an auditor. For example they've retained if p-complete to look at our code and verify that we're actually doing our job properly. They also collaborate on things like the enterprise Cardano ideas and what is the enterprise Cardano strategy. So what we want to extend Cardano beyond just a cryptocurrency and a decentralized ledger and going to the permission blockchain space what does that need to look like and how do we need to make that work and they also hold the trademarks for Cardano. The relationship with Parsons and the relationship with the foundation is exactly what you would expect. We are our friends we work hard together and we're serving a common goal but at the end of the day we are our own people so I have my own work and he has his own work and sometimes they overlap and sometimes they don't sometimes we agree times we disagree but for the most part we've gotten along really well over the years and we have a very productive relationship.
okay let's see what we have here let's here are any easy case darks coming to car Dalida about SPV nodes
So Stark technology is is really interesting. So succinct interactive arguments of knowledge. This whole notion of zero knowledge. So the point of zero knowledge is to say ok, I know something and you want to know that thing that or at the very least you want to know something about that thing. Like for example, I can claim I'm over a certain age over 18 or I can claim that I know the password to get access to a file for example. Now the problem is that when I share that information with you, you gain knowledge in that if I share the password to get access to a file, you now how also have access to the file. So anything that makes me special is now no longer special. So the point of zero knowledge is to verify to a person who's asking that you indeed do know something like the password to decrypt that file, but not actually give them that asset, so it's a very powerful primitive it's something that was originally discovered in the 1980s by people at MIT Sylvia McCauley and others. So where zero knowledge is really interesting is it can be used in the cryptocurrency context to give us either where it's called verify computation or private transactions. So in the case of verified computation what that's about is that's about saying "hey you have a program and I'm gonna give you an input for that program and I want you to give me an output" so let's say I want you to fold a protein so you're gonna do all these manipulations and then the output would be the folded protein okay and I told you how to fold it that was the input well here's the problem how do you know that I've actually done that computation correctly this is a broader problem an outsource of computation so the solution for Ethereum is by replication. So it's how math used to be done back in the day where before computers you'd have a bunch of people inside of room usually they were women and they would give them math problems to solve and they would solve and you go and say what's but for example 5 plus 11 is a simple example. If there is 11 people in the room if you know six of them raise their hand and said 11 you know they they would say okay that's the answer we're gonna go with it and that's basically how Ethereum works. You have a collection of shared computation these nodes will do it and if you have a majority answer that's the answer. Well the problem is that doesn't scale and because you add more nodes to do the computation you're getting more assurance that the computation has been done correctly but you're not actually speeding the computation up you're as slow as the slowest person. So there's been a lot of talk about could we use Stark technology or zero-knowledge technology to say okay I'm gonna give you this basket of computation to do you're gonna go ahead and run that computation and then give me an output, let's say a smart contract and you're gonna give me an output like a random number generated from it or something like that but I need to know it's been done correctly so what if I can give you a proof of correctness alongside that and looking at that you don't have to rerun the computation you just know the computations actually been done correctly. There's actually some research that's out of Microsoft for framework called Pinocchio that studies these things and basically the answer is not only can you do this the proofs are constant size, they're about 288 bytes, they're really hard to make but they're constant in terms of their size and easy to validate. So that's one Avenue where ZK is really interesting. Another Avenue is for privacy that's what Z Cash is about and that's what does Zen cash is about in these types of projects and we think a lot excuse me we think a lot about, sore throat we think a lot about how we can use Stark technology to allow us to have more anonymous transactions but also things like side chains. So the very same primitives that allow you to have private transactions and verified computation could potentially be used to verify properties of a blockchain where you don't have the underlying blockchain. So for example, let's say that you receive a side chain transaction, so something from Bitcoin to Litecoin so when it goes from Bitcoin to Litecoins. Well if you're Litecoin, those nodes need to know two things two characteristics about that particular transaction. One, they need to know that the tokens that you're sending over exist so there's an existential question or is this real Litecoin or Bitcoin that you're sending over to Litecoin for example. Second, they need to understand that you haven't double spent those tokens so how do we know that you've taken legitimate Bitcoin and you haven't also sent it to Dash or you've sent it to Ethereum or something like that so there is an existential question and then there is a non existential question on existence of a double transaction. So turns out that you potentially could build a proof using zero knowledge technology that has a nice constant size and it's easy to validate, that could answer both of those questions and the validators of that proof would not necessarily need to have a copy of the entire other blockchain to validate that. So these are kind of a spectrum of things. Now in terms of IOHK what are we doing in with respect to ZK and Cardano. So we have a collection of research streams that we're working on one is the verified computation side of things. We have a million dollar lab that we've set up at University of Edinburgh led by Markoff Cole Weiss originally was from Microsoft Research and he left and became a professor up in Edinburgh and basically they're examining how do we use zero knowledge to get ourselves more private and more verifiable computations. We are looking at pulling this technology into our side chains protocol to make it more efficient and we're also looking at this technology for private off chain smart contracts. So we have a collection of different people from DNS as in droves to Markoff to Thomas P Ober and others who are working on that and at some point we'll publish a paper but this research is pretty complicated. These things are pretty difficult to build and there's not many people who do them well so it takes a bit of time to spool things up but it's an area of inquiry that we think is quite promising and there's certainly a lot of work and a lot of different "mm-hmm"
Now that Ethereum classic has a good foothold will IOHK continue to support ETC development?
That's a good question. So you know what if ETC first came out, you know I wanted to prove a point that it is immoral when you advertise something for an ICO, to then turn tail and completely do the opposite because of legal inconvenience. You know if you say "hey code is law we're gonna invent words and we're gonna say you can't change the ledger" just because it turns out that maybe you weren't ready to commit to that you can't just suddenly pretend like you didn't make that promise. You know if I sell you a product you give me money, I can't retroactively come back and say you know I'm gonna change the terms and conditions of that transaction because I just found out it's inconvenient to me. You know as sorry if you sold something you have to deal with the consequences of the thing you sold. So when I got involved in Ethereum Classic if anything it was to prove that principles matter and that you know it's not okay to reverse and that people need to have the option. If people believe in what Vitalik has done, they can keep with Ethereum if they believe that the original intent should be maintained. They can sell their ether and stay within Ethereum Classis ecosystem and basically people were given a proper choice, not a rushed choice. Now one of the problems is that Ethereum Classic community in the beginning had no credibility, because the majority of the infrastructure developers went over to Ethereum so the rest guys the death guys these people they lived in the Ethereum side and there was nothing going on in the Ethereum Classic side that would indicate that Ethereum Classic actually had a competency that you would expect of someone who could not only maintain the chain but also upgrade the chain and grow the chain. So we felt it was very important for us to invest money into building from the ground up a completely new client from nothing, so we just took the yellow paper, the documentation we borrowed no code. We brought together a great team of Scala developers. We called them the growth indeed team and we said go have fun and they spent basically a year constructing at the moment the most concise Ethereum client ever built. It's only about twelve thousand lines of code it's got beautiful test coverage, it's been security audited, it's fast it's easy to use it has the Daedalus front end and we're gonna make a lot of improvements to make that even better and bring it native ERC 20 supports you can hold your ERC 20 of tokens in an addition to the ether classic and and we just went and did that. Now we're at a point where mantas is not only out it's gone through a major update and it's going to go through an even another major update and we have to kind of make a decision of where will IOHK go with ETC and there's a lot of challenges. There are governance challenges and that it doesn't have a leader, there's a very decentralized group of people kind of like Bitcoin who are doing different things and each and every one of them kind of has a vision and a different idea. Also like Bitcoin, there's no centralized source of funding. There is no one who has this ICO pool of money or pre mine who then gets to decide who gets funded even if they're beneficent and give you grants there's still no one there so there has been some attempts to create some capital aggregation but we haven't quite seen that materialize in a way that would be productive for everybody. Yeah, but doesn't say it's not gonna happen; so we're gonna have a summit in September and I'll be attending and presenting and we're gonna be showing off our latest version of Mantis where we have built-in Ethereum support so now Mantis targets both Ethereum and Classic Ethereum and it's an ERC 20 wallet so you can basically have a God's eye view of all those asset types and it'll have a few other things built under the hood that are very nice and because this is a full node you can actually technically run the entire Ethereum network or the entire Ethereum Classic network just off of that code base. Then we'll discuss at the summit with the other people what should 2019 look like and does it make sense to scale up effort keep the efforts at the same level or gradually scale down effort. You know let the community manage that that node that we've written but I think it's overall mission accomplished. Most people respect Ethereum Classic at this point if anything just for its principles. Most of the fights of the past have been resolved and even Vitalik himself actually still holds some Ether Classic and a lot of people in Ethereum ecosystem turns out never sold their Ether Classic they kept it. It's a small coin but it's probably going to stay on proof-of-work and it is a good opportunity to start having discussions about whether you can still do innovation with proof of work in the smart contract space and if it stays in that direction it doesn't compete directly with Cardano, so I see no issue with having that discussion. So that's basically where we're at right now the growth in teak team did a tremendous job. The other thing is they did a very transparent job so if you actually go to our YouTube channel and go to the IOHK Channel and you look at the growth in deke meetings you can start from March of last year and like clockwork, every single week watch if 10 to 20-minute meeting of the developers getting together and talking about what they accomplished that week, and that's been public for almost more than a year now so you can see the development evolution of the client from scratch and how it went from an idea to actual software deployed that's been audited and very high quality with good test coverage; and so I'm really proud of that level of transparency and I'm really proud that we were able to build that and to date I think it's the only functional version of Ethereum, written a version of Ethereum written in a functional language so that's a story there.
okay let's see here but do the original needs how many languages will cardano's support and smart contracts and gaps be written in and let's see get some other questions ok so there's some good questions here
all right so Cardano has been misrepresented a lot and it's it's amazing you know I guess I'm failing at comps and marketing but I hear things from we're in DRC 20 token to the only way to write smart contracts is in Haskell at the moment there is no way to write Haskell smart contracts with card ATO so I don't know where that came from but okay the goal of card I know is to be both principled and pragmatic so there are kind of three collections of problems you have to solve when you think about computation there is computation around well understood domains and the most pertinent domain to the cryptocurrency space is computation around accounting so that's what bitcoin solves and most cryptocurrencies based in that paradigm where they say I have an asset and I need to figure out who owns it and I need to have a large catalog of bespoke type transactions that allow me to move that ass between people that can be continued settlement style transactions like multi-sig for example and that can be arbitrarily complicated things that are like event based transactions or things like that so there's a whole basket of that stuff there and Bitcoin only covers a small sliver event and that's one of the original biggest frustrations that I had and other people had with Bitcoin was that it only covered a sliver of this beautiful rich financial ecosystem so what we decided to do is say all right well why don't we build an accounting ledger that allows you to represent the types of assets and those types of transactions and the most efficient way in pair Aliza balay possible so you can get Visa scale long term performance but then you can also do everything that Wall Street is used to doing so we created a domain-specific language called Marlow we created a general-purpose programming language that was functional that Marlowe and beds in called Plutus and we really rigorously thought about the UT Excel accounting model and we also came up with a way to issue assets within that model that's interoperable with the etherium style account model okay so that's one basket and we're gonna put a huge amount and we're actually already putting a huge amount of money and effort resources into getting that where it needs to go that team has grown from two people to six people and it'll soon grow to eight I and we're getting to the point we're starting to run thought experiments about different types of exotic transactions and other things and making sure that all our security assumptions are great so that's awesome and that's going to kind of finish what bitcoin started then you have the etherium style computational model which is replicated or some notion of distributed computation but what do these are are stateful programs you send messages to them they wake up they do something the outputs something and you can chain them together and there's all kinds of crazy things you can do so if you want to build a dhow or you want to build a ride-sharing application of these types of things you can have these types of programs now aetherium kind of brought this model to the forefront cool model interesting model the problem is that model at the moment does not scale and anybody is actually using that model for anything that's more than a toy has had to interface that with off chain activity you know so basically they've either had to leave aetherium they've had to kind of build a two-layer Network for the blockchain does a little something and then there's some server off in the distance that does something else that's okay that because it's prototype technology it's no no not not so capable in the beginning so we have a bunch of threads of research that we're doing about how do we make that model better so first how do we pull some of that computation off the chain and allow you still to do it in the same type of trust model or similar trust guarantees then you have as if it was replicated so that's things like what Markoff is doing with snark technology and we're also looking to things like state channels and so forth and there's a lot of different pathways you can go second you have to make sure that when you do do things on this slow engine that they're done as securely as possible and most reliably as possible with the most interoperability as possible so that's why we engage run time verification and we said first it's been a lot of time and effort understanding aetherium so they wrote the K EVM paper and wrote formal semantics for that but then also built something completely new that is built from the ground up to be really the best foundation for virtual machine for smart contracts in this model so they created yellow and yellow was based on LOV M which is a very successful framework Apple funded it Steve Jobs himself really liked it the department chair of University of Illinois urbana-champaign is the one who built it with a few others so we think that that's something very awesome and it really can provide a lot of power now if yellow alone would be cool and it's pretty easy to write compilers for yellow because it's like targeting LLVM and that's very well understood at the moment by language designers that said we need a near operability as well and so we've invested a lot of money through runtime verification and this concept called semantic space compilation it's complicated but basically the concept is if you take a language and you write that language in a very special way you pay that cost one time then what happens is you can then take a program written in that language and translate it into another program written in another language that's also been written in that very careful way so if you have K semantics for one language in case' message for another you can do some notion of a translation between the two right now running experiments our RV is running experiments with semantic space compilation and throughout the summer we're going to see if that high-risk high-return effort is successful if it is then what we've done is basically built a universal compilation target and all we have to do to support a new language is just write the semantics of that language down and we could even make this a community driven effort where you can create a special transaction where you can write the semantics for your programming language whether it be a real complicated language like C++ or a toy language you've created for a domain-specific application you write those you register those and then if they're on the blockchain a compiler a special type of compiler can see them there and then we'll understand how to interpret that program and translate it to run as a smart contract in our system so it's a pretty funky crazy idea there are other concepts that people have been pursuing with this notion of universal foundation like we're all from Oracle and so forth but we think semantics based compilation could be a long art project that eventually gives us damn near universal interoperability meaning that we can eventually support hundreds if not thousands of programming languages to target our system now the really cool thing about this is if you upgrade your base layers let's say we come up with yellow 2.0 based upon all the lessons and experiences and magic we've learned from yellow you only update the semantics of yellow and you changed nothing else in the system and you don't have to update any compiler or anything like that that's the problem with upgrading your face lever here let's say you come up with the new version of Java Java 9 well then you have to upgrade all the compilers that target that or else are stuck on the legacy version whereas in this system it just auto updates everything else so that's really cool and I think there's some magic there so that's kind of the second bucket there's 19 people that are working on that some are rebuilding the K framework to make it better based on the 15 years of lessons that RV has learned from it some are working on semantics based compilations some people are working on yellow the yellow test that's actually gonna be launching at the end of the month is the first example of it and some people are working and making K faster building a kata alluvium backend so that it'll the machine generated stuff will run basically as fast as handwritten out the third option is to look at alternative models of computation so these are things like what enigma is doing with Intel or what we're doing in our Tokyo tech laboratory with multi-party computation so if you really think about it a lot of the times you don't particularly care about the blockchain side of the transaction so for example you say well if I'm playing a poker game I like the blockchain as a payment system I like the fact that it can connect me to people but at the end of the day I don't really care if my poker game is preserved or not all I care about is that it's a fair game area people can't cheat I'm playing against reasonable people and at the end of the day I get paid where my winnings and losses are all balanced money going in matches money going out and it's fair so why then would you want to do that on a system that gives you all that additional stuff it says this has to be a game the whole network cares about it's deeply public and your computation is competing for everybody else's computation furthermore your settlement time is constrained to the settlement time of the entire network so if you have 10-minute block times for example if Bitcoin you have to wait 10 minutes for the state of the game to update so you have to wait 10 minutes for you to see the next round in the game or something like that so it's not the blockchain model is really bad for those types of applications and those types of applications turn out to be a large chunk of the applications we tend to care about not just gambling but also things like exchange and so forth like if you think about a decentralized exchange do you particularly care that the order book and all of these things are preserved forever and the blockchain and you live within those constraints no most people don't they just say I want to go from like coin to Bitcoin and I want to know I can't be front-running it's a fair market place and so forth so if you use multi-party computation you kind of get the best of both worlds you use a blockchain for people to find each other use a blockchain for the exit and entry points of the transaction to be recorded and then the rest of this stuff happens off chain and its own little protocol and it just runs until it's terminated and when it's terminated people collect their winnings and losses or in case it's a centralized exchange you've done a swap the other advantages you run at the speed of participants and so if you're connecting to high-performance nodes you you you could potentially have millisecond latency 'z as opposed to 10-minute latencies and so forth and all that computation and all those resources are off chain but you can still have tunable privacy you can still do a whole bunch of things like for example kaleidoscope and royale two protocols that we've written those protocols in no way reveal card information to the other players until you want and you want to do that so you know poker is kind of pointless if people can see your cards unless you show them simply decentralize exchange you there's some you know timing behind one you actually interestings into the order book so we're investigating those options and we're seeing how we can bring those into card on oh and there's hundreds of types of NPC protocols we could develop and the good news is that they actually all share common primitives and since once we figure out the network side of it and a lot of the cryptographic primitives these things are composable and eventually we can actually construct kind of a toolkit for people to build their own NPC type protocols and put them into their DAPs so we've been calling that lebowski for the moment and Lebowski's kind of a joke about the big lebowski you know where they have the rug that ties the whole room together because this type of layer will kind of tie the blockchain together and give you new capabilities so anyway that's a big effort in 2019 and we think that's something that's very unique to Cardno not many people look into that or have those capabilities not only do we have the capabilities we've already published to peer review papers on those capabilities and we continue to publish them and at some point we're going to start dragging those capabilities into Cardno itself so those are the kind of the three models let's be the best accounting model and replicate everything that Wall Street needs let's be the best a theorem model so we can be both interoperable with what aetherium is done and future proof for everything that people are gonna want to do and allow them to write some art contracts the languages that they care to and then let's give people new capabilities whether those be off chain capabilities like payment channels or those be things new capabilities like multi-party computation and so forth which kind of fundamentally change the way that these things work so that's kind of the computational model of Cardano so then the next question that we usually get is well when is all this going to ship now it is easy to ship an incomplete product and it is easy to ship something that people can do something with but not in a very satisfactory way so if we wanted to after the yellow test net is complete which would only take a few months we certainly could have a smart contract layer for Cardano okay that layer would be faster and have more capabilities than aetherium and would certainly have a kind of a better development experience because we probably could be more clever about the surface languages that target yellow but at the end of day wouldn't be revolutionary in that it wouldn't actually give you completely new capabilities like the npc stuff so there's always a war as a CEO in as a product manager to decide the balance between revolutionary new things and being able to be pragmatic and give people capabilities that they care about so we're exploring options about getting smart contracts into Cardno even if they're not super revolutionary and completely change the world but we have to also make sure that we do that in a very safe way so after the yellow test that's had some time to run we'll take a look at where we're at take a look at where our sidechains protocols are at and then we'll make some form of announcement of when we think we can start linking CL and SL together we already have an aetherium version of CL running it's been running for over a month and the yellow version will be running at the end of this month so you know you all the things you've come to know and love with the theory and you'll be able to do and then we'll have some new capabilities that we roll out as well what's really exciting is Plutus and Marlowe because that's a totally new thing and we think people are gonna really love that and our hope is to pull that into SL itself if possible so that you have the absolute best ledger two-issue assets on if that's your desire in terms of new capabilities the way we've built our development model as they're available we should be able to roll them into our system in a very organic and natural way so they don't require massive disruptions or huge hard Forks or like huge amounts of planning and so forth and the system is kind of layered and encapsulated so even if one of these components was to fail it wouldn't cascade through the system and cause the system to completely shut down that's one of the advantages of layering it's a little bit more expensive in terms of time and architecture but it certainly does give you a lot more protection than you would otherwise if you had a big monolithic system so that's the smart contract story in short yes you'll be able to write smart contracts and more than just Haskell I would really love to be able to write a JavaScript smart contract at some point I really would love to be able to write a Java smart contract in a C++ smart contract and I think that we have a good strategy for bringing these things into our system within a reasonable period of time okay another one is what do you think it will for our coin are to decouple Bitcoin you know so basically what crypto Kylie is asking is will we forever be in a paradigm where Bitcoin and alt colleen's are linked together and when Bitcoin goes up all coins go up when Bitcoin goes down all coins go down and basically bitcoin is leading the pack and it's completely in charge of of this stuff and the reality is that it's like any marketplace when you first start there's a leader in that marketplace who sets all those standards in that marketplace and everybody is just a mirror of that in that they do something more or they do something differently but you're basically focused on that then what ends up happening is that the marketplace grows and then you end up getting diversity within that marketplace and what happens is that people start caring less and less and less about the leader if it's IBM with computing hardware that used to own the entire industry now no one really cares they've left the market Microsoft with Windows which used to be a complete monopoly and everybody had to build their applications a certain way to correspond to their vision and now more people target Android and iOS and they do Windows and they don't really care about Windows anymore we're Internet Explorer now we have a diverse browser ecosystem with Chrome and Mozilla and Safari and so forth and I imagine that the exact same thing is going to happen what's going to end up likely occurring is Bitcoin is going to pull back in because of its rate of evolution and become a digital commodity it's going to become digital gold and it's going to be an anchor in the system a gateway drug into the system with a high degree of liquidity lots of fiat power good exchange access and then once you're in Bitcoin eventually Bitcoin will be capable enough to reasonably communicate with other cryptocurrencies maybe this will take three years maybe it'll take five years but those bridges will be constructed and once constructed we have kind of a web of different cryptocurrencies and there's infrastructural plays like people who are trying to kill Facebook and replace it with a decentralized version people are trying to kill Ober and replace it with a decentralized version and so forth so there's kind of like services there'll be other digital commodities that have different characteristics about them to compete with Bitcoin and then you'll have DAP tokens and these things so there'll be this web of value that happens a web of blockchains and these things will look more like the stock market so they'll all respond to macroeconomic trends so they'll all go down and up based upon big events that affect the entire industry like if there was a huge regulatory change for example but other than that when Microsoft goes up it doesn't necessarily mean exxon mobil is going to go up exxon mobil can go down microsoft goes up there's loosely correlate they don't have much connection to each other that said there are things that are desert connected like Microsoft Facebook Google Apple these companies tend to be in the same sectors and compete with each other so when one goes up the other ones tend to go up or down but there's some stronger tighter correlations between those pairings and it'll be the exact same thing for cryptocurrencies you'll have the digital commodity class of cryptocurrencies they'll probably be clustered with each other and when Bitcoin goes up they'll try you know rising tides they'll go up but it will not have as dramatic of effect on infrastructure tokens for example if you look at a theorem in Bitcoin the copling over time has already started to naturally decrease and when the theorem goes up or down or Bitcoin goes up or down they don't impact each other as much as you'd think they still do Bitcoin still a Goliath and Bitcoin usually is the with the kind of the canary in the coal mine if it rapidly goes down it rapidly goes up everything tends to follow it and that'll probably be the case for some time because these markets become richer or advanced financial products are created I do think we'll see some separation okay let's hear but if ha what do you think of liske since you left your adviser role do you think that they saw problems but you thought they were not focusing on so you know I'll probably talk about Liske a little bit so what happened with Liske is a good friend of mine bought a lot of Liske and he said hey I'd love for you to be an adviser of Liske and I said well I don't know too much about the project and he said well let me introduce you to the founders and you know let's see if you guys hit it off so I met max and Oliver and they're very nice guys and they're very passionate about their product they didn't quite have in my view all the experience or talent necessary to run a cryptocurrency if you actually look at a cryptocurrency it's a very involved affair I which K now is enough capabilities to develop a cryptocurrency but we now have a hundred and sixty people with a research division the full engineering division there's eight companies working on it you know we're in 16 countries it's it's a lot so you know it's just max and Oliver and it's like okay you have some money and you have some passion but you really do need to build a team so we talked for a while and my advice was well I could be come on as an advisor and help you guys since you now have capital to basically make some obviously good decisions for example you couldn't just have money sitting in a trust or personal account you needed to put that money in some sort of legal structure that was built in a way to achieve the mission of the people who gave you the money like with the theorem of italic and the rest put the money in the etherium foundation so similarly I recommended creating a Swiss foundation and there's a lot of little advice that I gave like that but at the end of the day what ended up happening is about six months into the year that I agreed to help them come on board I gave became increasingly frustrated because I felt like things were moving a bit too slowly and that my advice really wasn't being listened to or I should say even if it was being listened to wasn't being executed on in a way that made sense so that's okay you know people have diverging visions but the thing was that I was consuming money from the list project by being there and I felt it was morally irresponsible to be an advisor to a project where I was being paid but now really doing much so I said well I keep what you've paid me and then for the other six months you go ahead and keep that and I'll bow out now since I've left what's happened is the list has grown a lot they've gotten some great key people and they've managed to actually do a lot of work and it's one of the most active blockchain projects now and I'm very proud that max has been able to to get himself it seems where he needs to be and I hope that Liz can find its own way and really become a great platform for people to use you know there was a project that Microsoft released called Project Bletchley which was kind of like a blockchain as a service project and there's a litany of things you could imagine like consensus as a service or storage as a service and I always felt that that was a good direction for list to go into as kind of a direction that yose has been pursuing so if they go down that road I think Liz will have a lot of utility and value and because they've chosen a language that is easy to develop in and easy to find developers for and they got a pretty good foundation to build on I think they can execute very quickly and Liz can still be quite a valuable project but ultimately that's up to max and Oliver and they have their vision and may have their work their doing and we wish them well you know we think that their best days could be ahead of them and they certainly have the resources to get themselves where they need to go and that's really the nature of the space if you look at it at the end of the day there's more in common between projects and there is in opposition between projects there are some projects that are very difficult for a variety of reasons for me to understand or relate to or interact with and in some of the communities of these projects are extremely negative and toxic and say incredibly hurtful things for sometimes no reason whatsoever but for the most part once you separate that drama and the small minority of people that actively seek to be bad actors for the most part people like working together are talking together we talk to the - people Charley Lee and I are always having fun on Twitter and there's a dozen or so projects that I interact with on pretty much a weekly basis if anything just asks them where the road map is at what's going on and you know I witch Kay is not just the Cardano company we're a blockchain company and we build blockchain technology we develop protocols and as a consequence of developing those protocols we're always thinking carefully about well who could benefit the most as another example of this recently I I treated the Justin son a recommendation that he used mantis for Tron why because I noticed that Justin seems to be using aetherium Java and he's made some modifications to it but it's still basically a theory Amjad and that code base is not optimal and if you want us beyond the Java Virtual Machine and use the theorem I feel that mantis would be a much much much better foundation to build on and there's a lot more innovation that you could do then you could potentially do with the theory of Java and there's a lot less risk and danger given that our code is security audited then the etherium Java code base that they're using so I made that recommendation it's open source technology there's no partnership I don't make any money from it it's just me saying well they have a community if they fail it's gonna hurt a lot of people you know people are gonna lose money so I'd rather see them succeed and I'd rather see them deliver a great product market because it ultimately means that the ecosystem as a whole is stronger and I have a lot of faith in the products that my company builds so of course I'm gonna recommend those and sup to them to decide whether that makes sense or not if they don't who cares it's no skin off my back we have other uses for mantis but if they do well then actually it means that it's become a truly open source product that's being used by more than just AI ohk and I which kaise affiliates it's now being used by independent people we've already seen this happen once before I which K invested a lot of time and effort into building up score X and Sasha Ivanov took score X and built waves from it and waves has been a very successful product for the position it's in we didn't tell him to do that he just forked the code and did it and he's actually made some contributions back into the score X framework and we wish them well so that's how this space works and I hope that people have a bit more common sense and civility and they also realized that this is not a sum 0 space the reality is the space is is much more nuanced and we should focus on the things that hold us together rather than the things that tear us apart okay let's see here and I'll go back to some of the older questions because I've been talking for a long time ah the Bitcoin maximalist a question that's an interesting one yeah so I've been in the Bitcoin space as an investor and as a miner and as probably person's been aware of it since 2011 so those were very very taste it was like dollar to $4 Bitcoin or something like that and it had already had gone through collapse I think it actually had an all-time high like 30 or something and then I fell apart and people said oh I guess bitcoins dead and the community was incredibly small in fact I live in Colorado and I signed up for a meetup group for Bitcoin and I went there was only two people who registered myself and someone else it was at the Gypsy House Cafe and Denver I went there and I was the only person who showed up so that's how small Bitcoin was when I entered and it was just unimaginable for the cryptocurrency space to be where it is it today and have the global scale that it had today the reality is that there were kind of two groups of people that were in the cryptocurrency space there were these computer science the open source ecipher punky crypto nomicon guys who they knew about digital money and they liked this idea of open source projects and peer-to-peer protocols and this was just cool thing to play around with and then there was this libertarian gold community and they were you know quite complimentary in a certain respect you know a lot of them on the libertarian side actually came out of the Ron Paul movement where we had kind of lost in 2008 and we were frustrated so we needed someplace to vent and you know this idea of creating our own money and screw the Federal Reserve that was kind of fun and if anything it was a protest but no one in either camp had this vision that we wake up and this thing would be gargantuan you know people like to revise history and you know reinvent themselves so there's always you know the leaders today's all well I heard about Bitcoin I knew it was going to be a trillion dollars and it's gonna be a great ecosystem but that in my experience in the interactions I had with the big guys then who are still the big guys now that was not the case it was it was a fun thing to do and it was an interesting thing to do and we achieved a lot I professionally entered the space in 2013 it was a very different space from 2011 2013 we started seeing Bitcoin actually being worth something was the ecosystem was worth about a billion dollars the market cap had really accelerated a lot there was ton of interest in it and people started legitimately talking about Bitcoin businesses I mean bitpay was originally set up because the guys who ran it were traders and they wanted to come up with a scheme to get themselves more Bitcoin because they were long on it you know they didn't think too much about how do we build something to kill PayPal or Visa they can tell you that but that's what they started it as whereas in 2013 there were really people serious about saying well no we actually think this cryptocurrency thing could change the world and there were actually billions of dollars of easy capital and private money that entered the space to get it there right around that time I realized that if this was to be a useful ecosystem we needed to have the ability to represent complex transactions and we needed to have the ability to represent complex programs and it's not a new idea Nick Szabo had it the 90s and guys like Sergio Lerner had been working on it in the early 2012-2013 of italic was working on it so we Posse DUP together and created a theorem and you know obviously aetherium kind of led the second major wave and also brought the ICL revolution and so forth well here's what happened as a theorem in the ICL revolution changed the narrative and stoled the entire spotlight that bitcoin had and it was equally likely when you ran into a taxi driver and you were talking about crypto currencies that they held ether then they held Bitcoin and a lot of people actually believed that ether could actually supplant Bitcoin one day so there was a reaction that said hey known bitcoin is the only thing everything else is useless it's all a scam because of a pre miner because of this and logic just went completely out the door and it almost became like a cult and unfortunately because of that we've seen a lot of the best people leave Bitcoin and go elsewhere either left to space entirely or they've created all coins and they've done their own thing and working on their own project also we really just don't see a lot of innovation coming out of Bitcoin these days which is tragic because there's a lot of great ideas simplicity is a great idea mast is a great idea lightning is a great idea sidechains they're a great idea we've we have our own protocols for that which you're awesome so these are great ideas and these ideas really should be adopted but for whatever reason they're not adopted and it's extremely painful to watch something that is so beloved and has so much promise in potential and ought to be Darwinian competitive hobbled by its inability to make decisions even small changes like increasing the block size seem to be just beyond the capabilities of that ecosystem at the moment they're having a party about the notion of adding snore signatures into Bitcoin this is a 20 year old piece of cryptography I don't have parties about putting 20 year old technology into my system I don't wake up and say boy I put PGP into my wallet huzzah look how innovative I am you know it's it's it's absurd so I think Bitcoin maximalism is a difficult tribal response to either jealousy of the innovation and the narrative that the altcoin space is stolen and it's also a lot of people being very unreasonable about what it takes to innovate no matter how brilliant a person is no matter how incredibly well thought-out an idea is it's subject to modification due to the nature of new ideas new realities technological improvements the Wright brothers can be the greatest geniuses in the world but nobody in the right mind would build a commercial airline off of the Wright brothers plane and to say that somehow bitcoin was so mad that it in its original design is going to somehow serve as a global payment system a global commodity a global smart contract system is absurd it's absolutely absurd it's provably wrong furthermore it is really starting to show its vulnerability x' recent paper that came out March of 2018 written at Cornell University measured the level of decentralisation and the Bitcoin network and an indicated that there are less than 20 major nodes in the system that control eighty to ninety percent of the total hash power depending upon the range that you look at that's not a decentralized system and also the supply chain of these devices necessary to control the system are patented controlled even if you could buy them you're going to get them much later than the people who make them and you're going to be competing with people with subsidized power so you can claim that proof of work is somehow permissionless to centralized network but if only a small group of people ever get to play that game and control that game and they can hold back innovation for profit you're really not thinking it through and it's really unfortunate so unfortunately I think Bitcoin maximalism is going to continue but I think it's consequences it's going to make Bitcoin less and less relevant the market capitalization of Bitcoin will continue to erode or stay stagnant relative to the old coins and Bitcoin may even lose the top one slot and maybe that's going to be psychologically a wake-up call for people to become a bit more aggressive with innovation the other thing is that you can't have a Bitcoin cache every time you have a disagreement it was very painful for the space and it's caused a lot of emotional harm and it's been very disenfranchising for a lot of people so I would hope that moving forward they find a way to innovate more for me I we find our ways to make contributions to Bitcoin where we can because I still love that coin I still hold Bitcoin we put some money into a paper called dandy-lion that was written by a professor named promote amongst others at university of illinois and it looks like dandy-lion will be adopted by bitcoin as a bit so indirectly i which k has some contribution to bitcoin core and we're glad that to see that there is still some innovation there we still do learn from ideas that block stream is presented Russel O'Connor's work on simplicity for example was very elegant and really helped us think through some ideas about Plutus we would hope that the Bitcoin core developers take some of our work more seriously in particular work on side-chains and in particular our work on UT EXO wallet design unfortunately that just doesn't seem to be the case but that is what it is so maximalism in my view is bad maximalism and my v will slow down the ecosystem and in my view will make Bitcoin much less competitive in we live in a Darwinian environment so it doesn't really matter because that will not slow down the cryptocurrencies space that will not slow down my innovation or aetherium zenovation or other actors innovation and we're just going to keep going til someone gets it done and if Bitcoin wants to be mosaic it can be and it'll certainly be a great historical footnote if it wants to be chrome it can be as well that's up for the people who guide that ecosystem and for them to make those choices but I will remind them that we really can't move is so slow that you're looking like a monopoly and then unfortunately that seems to be the pace that they're moving yet okay let's see here will there be a minimum stick required to register a stake pull in production yeah I've seen this a lot where they say oh well only 100 stake pools can exist or only a hundred people can control the network or something it's it's crazy okay so first DPOs andorra forest does not stand for delegated proof of stake some people can't read I'm not going to mention their names but they can't read it stands for dynamic proof of stake okay so what do we mean by this we mean that in the beginning you have a distribution that's the genesis block so there's a collection of people who own a DES or token and their percentages okay so if you have 10,000 tokens and bob has a thousand Bob owns 10% that's simple so when you have a distribution then you can use that distribution as the input into a lottery and then you can run it and your chance of winning is proportional to the amount that you have and then you can populate a collection of people whose responsibility is to run the network that's step one then you have to make a decision of are you gonna actually show up and run the network for your turn or are you not going to do that or are you gonna give that right to someone else just that simple and that's where you need a delegation mechanic because the reality is that the people who hold the coca not necessarily be the people who want to maintain the network and I'll give you a great succinct example of that what if you have cold storage what if you've decided that you want to take your tokens and put them away for 10 years into a mountain in Switzerland well if every time because you have a large percentage of the togas list 5% of the network you know your turn comes up you'd have to go into the mountain and take it out make the keys go live and run your blocks that's a very unrealistic model so it'd be nice to be able to say that you have your cake and eat it too that you can go ahead and put it in the mountain delegate it to another address and then they have that address whether you own it and control it or somebody else owns it can control it run that collection of block creation and validation for you I think that's a fair trade-off profile so that's level two is you need a delegation system then level three is okay well once you've constructed that how do you build a system that's tenable so you do not want a situation where you have tens of thousands of steak poles why because you want these steak poles to be 24/7 uptime super reliable running rellenos providing lots of value to the system if Dan Larimer is taught to space anything it's that having a smaller quorum of dedicated nodes is actually pretty good it gives you much better performance gives you a much more reliable network topology and it allows you to start building some meta infrastructure like payment channels and these things given that these actors exist but you don't want them to be too few like Bitcoin or there's only a small collection of mining pools that exist so what you can do is you can build a model and that model can be parameterized in a game theoretic way to kind of converge to what you think is a reasonable set of delegates that if people are going to delegate then the most profitable thing to do is to delegate only to a subset that exists there now they're not pre-selected they're selected by the community and anybody in the community can set up their own pools if they want to and market the hell out of them and convince people to join them but at the end of the day you need to have that balance between too few and too many too many creates performance issues too few creates resiliency issues and centralization issues so you want to have a reasonable set and then you want to have controls where if they don't do their job there are economic recourses for them to not get paid and thus lose all the stake that's been delegated and lose the brand of reputation that they've constructed so that's the third layer and that's what we've written in a paper that's soon-to-be-released about how that model works and how to set those parameters now what's going to happen is that we're gonna allow people to register stake pools on blockchain it's gonna be a real easy process to do anyone can do it they pay a transaction fee to register it but there is no minimum stake required to do it and then it's just how good of a marketer you are to get people to come on board and run with your pool second we're going to create some form of an image like a docker image that has a basically a default stake pool and you can just take that and deploy it to Amazon or take that and deploy at the Rackspace and so forth and try to run that as a business and what fees you charge for that pool so how much the pool gets versus how much do the people who have delegated to again is set by you during the registration time so I think that's a good starting model now course can have some issues and we're gonna try to work our way through those but I think that's the way to get started to bootstrap the system and you don't go from nothing to something what you do is you have a series of iterations that allow you to get there successfully so what we started we start a stateful registration through a form and anybody was interested we got collected thousands and thousands of people who were we're gonna launch a test net at some point soon and once we launched that test then it'll have everything set up for state pools and then we'll run a subset of them maybe a hundred or two hundred and we'll take a look at performance we'll take a look at reliability and take a look at operational costing and so forth and then we'll Telegraph when the network is going to upgrade to Shelley and have those capabilities and because some subset of people have already developed experience and skills we will have a reasonable expectation that when the levers pulled and the system decentralizes that there is a reasonable set of people to be there to take it over now when you have let's say 1% of the system and you want to just do it all yourself you don't give a about anybody else you want to delegate you can still stake you have a point one percent if you want a slot you can still stake those capabilities are built in it's dynamic in that respect ultimately it's the users decision whether they want to show up to make the blocks they've been elected to or they want to delegate that to somebody else that's your decision as the user if elected and I think that's the fairest way of running the system because what's going to end up happening is you're going to have consensus as a service and you look at stake pools as providing value to the system and then it's a game of who can provide the most value which means these pools are competing with each other because it's a race to the bottom just to compete on fees yes so you know people are always going to be charging less and less so other people are gonna say hey I'm gonna offer Oracle services and I'm gonna offer payment channels and I'm gonna offer off chain computation like enabling NPC circuits and these types of things and so tougher and tougher competition will be more and more services are provided to the ecosystem which means overtime Cardano gets faster and gets more capable at a lower cost to everybody in the system that makes common sense to me if we get it wrong because we build models first we can retune the models and will it'll be blatantly obvious that we've gone it wrong because we can look at things like for example chain quality we can say okay there's twenty thousand six hundred slots in an epoch how many blocks were actually produced where the blocks produced in a reasonable synchronized order or were they coming in asynchronously were blocks being properly propagated and transmitted through the system you know how long did it take for them to traverse the network diameter there's hundreds of metrics we can follow and each of those would give us a strong indication of whether the network is healthy or unhealthy if the parameters ation is wrong then the network will tend towards an unhealthy configuration and state if the Pro ization is right then the network will be healthy and resilient and you can perturb it and it would still be able to run effectively that's how you release a consensus protocol as you do it in layers you do it in a systematic way you do it with a lot of telegraphing and a lot of community involvement and then you get the system out there now over time the system will scale into other configurations when we're no longer in a replicated mode and you are having lots of nodes doing different computations then it's actually advantageous to have a lot of stake pools because instead of having a hundred people do the same thing you're having a hundred people do different things so it's probably good idea to have tens of thousands hundreds of thousands millions of people involved in the validation and consensus process because then means you're getting amplification as you add new nodes not replication that's called orb or Hydra and it's a research effort that we're right now looking aggressively into from first principles and as we enter 2019 and 2020 that's going to be the next major configuration of the system so the goal with Shelli is get stake pools out get delegation out get all these rewards out and these types of things and just get the system to centralize them working and hand it to the community then the next generation is now how can we leverage the fact that the network has hundreds of thousands to millions of people so that we can have incredible performance like tens the hundreds of thousands of net transactions per second over an arc of time so that's the next big move it means you have to change your incentive models but you have to develop more sophisticated security models it means that you have to give up the idea that everybody is going to be synchronized with the network and and have the same view of the state of the network that they'll eventually settle but some people will see things before other people and so you have to think very carefully about the security consequences of that but we we understand this problem we understand the trade-off profile of that and we have actually one of the best Byzantine researchers around his name is Mattias frites who's from Switzerland and he worked at ETH Zurich and we brought him on board specifically to work on this type of project and over time you'll see some papers being published if you're more curious about trade-off profiles there's a great paper called Omni Ledger om and I led ger which is written out of Trinity College and Aquileia Polytechnic the discern and this is a paper that starting point and we'll do the exact same thing with Ouroboros Hydra let's see here