Author: naval

Vitalik: Ethereum, Part 2


This post is by naval from Naval


Haseeb and I interview Vitalik Buterin about Ethereum and blockchains. Also see Part 1.

Protocol Politics

The elder statesman of smart contract blockchains

Haseeb: Vitalik, I want to ask you a little bit about how your role has evolved since it began at Ethereum. In the very beginning before all of this, of course, you were once the uppity young entrepreneur. It’s been six or seven years now, and you’ve moved on from being the entrepreneur to being the chief technologist to being the politician. You’re now sort of the elder statesman of smart contract blockchains.

What have you learned about protocol politics?

Vitalik: Protocol politics is less different from regular politics than you might think. It’s all this emergent phenomena of what happens when you stick many thousands of people together.

You have incentives that are aligned in some cases; you have some competition in other cases. You have different groups of people that have different opinions, and they have to fight it out, sometimes within one protocol and sometimes between different protocols, where there’s competition.

A lot of the dynamics that you get are surprisingly familiar to the kinds of religious fervor that you get when people defend their opinions. Is it better to have blockchains that have smaller blocks so they’re easier to verify, versus bigger blocks so that more people can afford to use them?

People have very strong opinions in the same way that people have strong opinions about religion, or democracy, or freedom (Read more...)

Vitalik: Ethereum, Part 1


This post is by naval from Naval


Part one of my interview with Vitalik Buterin about Ethereum and blockchains

Transcript

Naval: Welcome back to the podcast. We have with us Haseeb Qureshi, who is a partner at Dragonfly and someone I used to work with back when I was more active in crypto-land. And we have Vitalik Buterin, who is, of course, the polymath genius—although he may bristle at that description—who created Ethereum, which was the first smart contract blockchain to gain any volume and changed the face of blockchain computing as we know it.

Haseeb, do you want to give us a quick, one-paragraph background on yourself?

Haseeb’s Background

Haseeb: I’m a software engineer by background and I’m now an investor. I run Dragonfly Capital, which is a global crypto fund—we only invest in crypto—and I’ve been doing this for a little bit over four years now.

It’s funny because when I first got into crypto, I remember I was actually at IC3, this academic crypto conference, where I met you and Vitalik for the first time. I had just left my job at Airbnb as a software engineer, and I remember I asked you, “What do you think is the most important problem to solve in crypto?” Your answer was something about wallets. You were like, “I think it’s important to build more wallets.” And at that time I had a vague understanding of what that meant, to build wallets. That was what triggered my dive down the rabbit hole of Ethereum.

(Read more...)

The Beginning of Infinity, Part 2


This post is by naval from Naval


Part 2 of my interview with Brett Hall about The Beginning of Infinity. Also see Part 1.

With a Good Theory of Knowledge, You Can Decide What Else Is True

David Deutsch’s theory is centered around good explanations

Naval: David Deutsch has this great view of the world where he believes that everything important is understandable by a single human. By important he means the underlying base theories that drive most of reality.

Deutsch fixates on four theories. I could argue maybe there are a few more, especially if you start getting into Adam Smith and The Wealth of Nations and a few other more sociological ones. But he’s obviously a physicist concerned more with reality and truth-seeking, not human systems.

The four he picks are the theory of epistemology; the theory of evolution by natural selection; quantum theory, into which he subsumes relativity and other physics; and the theory of computation, which includes his theory of quantum computation.

These four are fascinating. It’s probably worth exploring what’s interesting about each of them. What is the breakthrough here that might be nonobvious?

Let’s start with epistemology.

The reason I love The Beginning of Infinity is that Deutsch does a very rigorous review of what is correct in epistemology, what we know to be the best answers. Once you have a good theory of knowledge, then you can decide what else is true.

If you’re starting with a bad basis for the theory of knowledge, then you’re going to (Read more...)

To a Caveman Very Few Things Are Resources


This post is by naval from Naval


There was a time when coal wasn’t a resource

Brett: There was a story on ITV in the U.K. talking about how much supposed waste Amazon produces, that Amazon was routinely destroying a whole bunch of products.

I thought, “Why are these people inserting their opinion into a business that they know absolutely nothing about?” Would they prefer Amazon to have the perfect knowledge of precisely how many products need to be made? In other words, an epistemologically impossible situation to be in. Or would they prefer that Amazon made insufficient products, so the people who wanted to purchase them weren’t actually able to get ahold of them?

What Amazon does, of course, is make slightly more than what they need. That’s what happens in any business. They make slightly more than what they need now and again.

Naval: I once had a venture capitalist argue to me that there were too many kinds of shoes and it was an example of how capitalism had failed because nobody needs this many kinds of sneakers.

My question to him was, “When did you know that there were too many shoes?” What’s the point in history where we decide there are too many shoes? Before we needed more shoes because we needed more stretchy shoes, we needed more durable shoes, we needed thicker soled shoes, we needed lighter shoes, we needed all kinds of amazing shoe innovations.

And then at some point, somebody decides, “Actually we have enough shoes. Now we need (Read more...)

Knowledge Makes the Existence of Resources Infinite


This post is by naval from Naval


We’re going to keep creating new knowledge and new resources

Brett: Knowledge is the thing that makes the existence of resources infinite. The creation of knowledge is unbounded. We’re going to keep on creating more knowledge and, thereby, learning about more and different resources.

There’s this wonderful parable of europium in The Beginning of Infinity where David talks about when the first color television started to be manufactured about 60 years ago. There was a cathode ray tube type where you’d fire a stream of electrons at a phosphorescent screen. The phosphorescent screen would have these pixels, three different colors, one of which was red, and those red phosphors on the screen were filled with the element europium.

The interesting thing about europium is, when you put electricity through it, when you excite it, it glows with this red color. The extra-interesting thing about europium is that it is the only such element on the periodic table; it’s the only chemical that will do that. If you fire electrons at it, it will glow the red that you need to have for color television.

It was calculated that there’s only a certain amount of europium on the earth, and that amount of europium was quickly being consumed by cathode ray tube manufacturers. So the scientists had a perfectly robust mathematical theory about how the number of cathode ray tubes was finite; therefore, we’re going to run out of cathode ray tubes.

It’s true, in a very narrow sense, that for (Read more...)

Knowledge Makes the Existence of Resources Infinite


This post is by naval from Naval


We’re going to keep creating new knowledge and new resources

Brett: Knowledge is the thing that makes the existence of resources infinite. The creation of knowledge is unbounded. We’re going to keep on creating more knowledge and, thereby, learning about more and different resources.

There’s this wonderful parable of europium in The Beginning of Infinity where David talks about when the first color television started to be manufactured about 60 years ago. There was a cathode ray tube type where you’d fire a stream of electrons at a phosphorescent screen. The phosphorescent screen would have these pixels, three different colors, one of which was red, and those red phosphors on the screen were filled with the element europium.

The interesting thing about europium is, when you put electricity through it, when you excite it, it glows with this red color. The extra-interesting thing about europium is that it is the only such element on the periodic table; it’s the only chemical that will do that. If you fire electrons at it, it will glow the red that you need to have for color television.

It was calculated that there’s only a certain amount of europium on the earth, and that amount of europium was quickly being consumed by cathode ray tube manufacturers. So the scientists had a perfectly robust mathematical theory about how the number of cathode ray tubes was finite; therefore, we’re going to run out of cathode ray tubes.

It’s true, in a very narrow sense, that for (Read more...)

Groups Never Admit Failure


This post is by naval from Naval


What happens is you get a schism instead

Naval: Groups never admit failure. A group would rather keep living in the mythology of “we were repressed” than ever admit failure. Individuals are the only ones who admit failure. Even individuals don’t like to admit failure, but eventually, they can be forced to.

A group will never admit they were wrong. A group will never admit, “We made a mistake,” because a group that tries to change its mind falls apart. I’m hard pressed to find examples in history of large groups that said, “We thought A, but the answer’s actually B.”

Usually what happens in that case is a schism, where you go from the Catholic Church to Protestant and so on. There’s a divergence and usually a lot of infighting. This happens in crypto land, too, where the coins fork. Bitcoin doesn’t suddenly say, “We should have smart contracts.” ETH doesn’t suddenly say, “We should have been immutable.”

I was on the board of a foundation that was charged with giving out money for a cause, and I found it very disillusioning because what I learned was that no matter what the foundation did, they would declare victory. Every project was victorious. Every project was a success. There was a lot of back slapping. There were a lot of high-sounding mission statements and vision statements, a lot of congratulations, a lot of nice dinners—but nothing ever got done.

I realized this was because there was no objective feedback. Because (Read more...)

Making Something Social Destroys the Truth of It


This post is by naval from Naval


Science’s biggest breakthroughs came from unpopular people

Naval: Making something social destroys the truth of it because social groups need consensus to survive—otherwise they fight and can’t get along—and consensus is all about compromise, not truth-seeking.

Science—at least the natural sciences—was this unique discipline where you could have an individual truth-seeking on behalf of the rest of society. Other individuals verify that they did, indeed, have the best current model of how reality works, and then that could be spread out through inventions to the rest of society.

But the social sciences are this virus that crept into academia and have taken over. Social sciences are completely corrupted.

First, they need to appeal to society for funding, so they are politically motivated. Then, they themselves are influenced in society because the studies and models are used to drive policy. So, of course, that ends up corrupted as well. Now even the natural sciences are under attack from the social sciences, and they’re becoming more and more socialized.

The more groupthink you see involved, the farther from the truth you actually are. You can have a harmonious society while still allowing truth seekers within the society to find truth and to find the means to alter and improve reality for the entire group.

Historically, most of the scientific breakthroughs didn’t come from scientific institutions. The big ones came from individual natural philosophers who were very independent thinkers who were reviled in their time, often persecuted, who fought against the rest of (Read more...)

Free Markets Provide the Best Feedback


This post is by naval from Naval


The alternative is who has more guns

Naval: Marc Andreessen summarizes this nicely as “strong opinions, loosely held.

As a society, if you’re truth-seeking, you want to have strong opinions but very loosely held. You want to try them, see if they work, and then error-correct if they don’t.

But instead what we get is either strong opinions strongly held—which is the intolerant minority—or we get weak opinions loosely held—which is this compromised model where no one really takes the blame, no one gets credit, no one gets to try the way that they want to, and everybody can then fall back on, “Real communism hasn’t been tried.” Although, in that case, real communism has been tried; it just hasn’t worked out well.

As a digression, one of the common critiques I hear people say is, “We need to move to a post-capitalist world. Capitalism isn’t working.” OK, what is your alternative? Usually this is where people start fumbling because there aren’t a lot of choices.

When you’re trying to figure out how to divvy up credit, divvy up resources and reward people for their work, you have two choices: feedback from free markets and reality—and the best model for that is money—or feedback from people, which is where communism ends up, which is a group of people who decide that you did the best work.

Now, who decides you did the best work? Someone has to be in charge of doing that, and invariably that ends up (Read more...)

The Poverty of Compromise


This post is by naval from Naval


Compromise tests ideas no one ever thought were correct in the first place

Brett: This idea of questioning things that hitherto you thought were unassailable in a particular domain is really interesting.

For millennia people have wondered about the best way to conceive of what democracy is.

Plato asked, “What is democracy?” and he had the question about who should rule. That’s the whole idea of democracy, supposedly. We’d have to figure out who should rule. Should it be the philosopher kings who should rule? Should it be the population of citizens?

Plato decided that the mob would readily vote away the rights of a minority, and that’s what he thought democracy was.

But Popper questioned this whole idea of looking at what democracy was. He went even deeper and roughly said, “Democracy has got nothing to do with who should rule. Democracy is the system which allows you to remove policies and rulers most efficiently without violence. And that’s how you judge different democratic systems.”

So you can actually make a judgment on France, England, the United States, Australia, Canada. Do these places have better or worse kinds of democracy to the extent that we’re actually able to get rid of the people that we don’t like from the democratic system quickly, efficiently, easily, without violence?

That’s the measure of a good democratic system, rather than trying to figure out which is going to give us the best rulers. That’s the same mistake as saying, “What method of science (Read more...)