Jerod Santo: [01:03:59.21] Gotcha. So then the other aspect of this which is I think worth talking about - you mentioned the Tor network; when you launch the application you connect to a certain number of peers on the Tor network, and then it also lists your Bitcoin network peers. Then you have a list of buy offers and sell offers, and so… I’m just looking at it right now [unintelligible 01:04:26.06] maybe there’s half a dozen or so offers to buy, and there’s zero offers to sell.

Jerod Santo: So, since Bitcoin is back in its bull run… It’s just been a few years in a bear market and then came roaring back from something like $4,000 a year ago, to 60k per coin, and around there today… People are interested once again in this crazy world of cryptocurrencies, and so we thought it’d be fun to explain Bitcoin like you’re five, because it is a difficult thing to explain, difficult to talk about, a lot of ins, a lot of outs, a lot of what-have-yous…

[19:57] The first way I would like to explain this is by stealing a tweet from Theophite on Twitter, which I thought that was a hilarious way to explain Bitcoin… Somebody tweeted out “I still don’t get Bitcoin”, and Theophite replied “Imagine if keeping your [unintelligible 00:20:13.18] for 24/7 produced solved Sudokus you could trade in for heroin.” [laughter] That’s pretty classic, right?

So of course, there’s your bear explanation, and there are lots of downsides with Bitcoin specifically around energy use and whatnot… But there is also some real value to the network. And I’m not gonna explain how Bitcoin works like we’re five, but I thought maybe I’d try to explain why some people think it’s valuable like you’re five… So here we go.

Imagine that you’re playing Monopoly with some friends… And one person decides - maybe they’re the homeowner. Usually house rules… They decide that they’re gonna be both the banker and the rule enforcer. Pretty typical. Everything starts off okay, but then the banker starts doing some things that you don’t appreciate as someone who plays the game. For example, they start injecting new money into the game, but not equally to everyone. Just to themselves and some of their friends.

They change the rules about how much money you get for passing Go, what you can go to jail for and for how long, they create over-the-top transfer fees and laws about who can trade with whom, etc.

Eventually, you and a few other people in the game decide that you want to transact without the banker’s rules, permissions, fees and so on. But you can’t use the Monopoly bucks, because the banker runs that whole system of things. So instead, you start a grouptext on your phones. And each time you wanna transfer money to and from each other, you put that in a text. Maybe you text “I’ll send five Schrute Bucks to Kball.” And then you text that out.

Everyone involved in this new way of sending money is in the grouptext, so that’s how you keep each other honest. Bitcoin is the grouptext. The end. What do you think?

Justin Garrison: I stopped using Bitcoin when I saw the energy usage of the Bitcoin networks. And just cryptocurrency in general. And then AI came along and was like “Hold my beer.”

Kevin Owocki: Okay. Web 3.0 is – oh man, I’ve gotta take a deep breath, because once you start going into blockchain, you’re just in the rabbit hole of this whole world… Yeah, hold on to your butts, because we’re about to go there. [laughter] So Web 3.0 is what the Ethereum community calls “our vision for the web when the web is blockchain-enabled.” Just to unpack that a little bit, when you browse the web, you’re using a web browser - I’m a big fan of Google Chrome, but I also have Brave, and I have Opera and Safari installed, and those applications are great at making HTTP requests to a server, and then receiving a response and rendering all of the HTML, CSS, JavaScript, that kind of stuff.

In the Web 3.0 model of the world, specifically the Ethereum Web 3.0 model of the world, your browser will become blockchain-enabled. What that means is that they can read from and write to the Ethereum blockchain. That’s an important capability for a browser to have in the Web 3.0 world, because the Ethereum blockchain is a store of value and a store of information that can be shared across the entire internet. It allows for something called fat protocol, which is just basically a way of saying that Gitcoin can share bounties information with – The Bounties Network is another bounties project that’s out there… And what this does, the reason why it’s pretty neat for it to be on the blockchain is that it prevents us from having vendor lock-in for our data.

[39:51] If you think about some of the problems with Web 2.0, or at least in my opinion some of the problems with Web 2.0 is that your social network is locked into Facebook. Your search history is locked into Google, and if you wanted to transfer them to somewhere else, then it wouldn’t – it’s not self-sovereign; you can’t just go to a different social network and take your Facebook social graph with you. And I think that this is a real problem if you look at the prevalence of hacks that happened, particularly if you look at the Equifax hack that happened about six months ago… You as a consumer don’t have self-sovereign control over your identity, and in the Web 3.0 world you will, because there’s these fat protocols where the data is stored on the blockchain in a way that can be migrated from site to site, and you as a user have control over your identity and who you wanna give that information to through your Web 3.0-enabled browser.

I know I just took you all through the rabbit hole of what some of this means and what it could potentially mean, but the TL;DR, the sum is that if you install a browser extension called Metamask on your Chrome, Brave or Opera browser, then that will give you Web 3.0 capabilities in the web browser that you already know and love.

Jerod Santo: Now, maybe there’s somebody with 51% of that. Of course, Satoshi has a whole bunch of Bitcoin that has never moved, and… Honestly, the moment that moves, I think the network falls.

Paul Orlando: [48:10] Yeah, engagement is through the roof, so we wanna boost these posts. And of course, it was doing like the opposite of what they wanted. So in this case, it was a much more modest financial reward for whoever the scammer was. I think it was only around $100,000 in Bitcoin that they ended up getting away with… But you have scams that can scale. So you can scale through a social network, like Twitter, or you have something like the Garmin ransomware situation, where I’m dependent upon this one piece of tech, and now I cannot do the thing that I need to do at this moment. Or now navigating for me is impossible, or it’s really dangerous. So yeah, I like just bringing attention to these things.

For me, when I wrote them, I think I was calling back to some of the writing I did about autonomous vehicles, in both of these examples… If you don’t mind, I’ll loop in the thought on autonomous vehicles there.

Nader Dabit: Yeah, it was just definitely not expected, but it was very welcome to me, seeing it… Because I was really worried about “Okay, what if I go into this and it’s not what I thought it was?” Or maybe I go into this and I’m able to not really network and create the relationships – or really keep the relationships that I had in the past with people that I really cared about, and I always wanted to continue building those relationships. It is a 24/7 market, but it’s also an accessible market, that doesn’t need anyone to tell you that you can participate or you can’t participate.

[20:14] I think one of the biggest things that is interesting to me around any revolutionary technology is that it really is something that abstracts away something that in the past needed a lot more time, effort, work, and people to kind of make work… And to me, what you’re seeing now, especially if you look at stuff like decentralized finance, where you have these multi-billion-dollar protocols that are doing the same work with about a dozen or two dozen people, that in the past would have taken orders of magnitude more people… So we’re talking about thousands or tens of thousands of people within a traditional banking system to operate the types of operations, combining both software and physical locations and all this other stuff, that are now being done and abstracted away by teams of much smaller people… So that really excited me. The fact that anyone in the entire world can create a wallet and get paid really excited me.

One of the things that really excited me at first, honestly, was also the idea of stablecoins. When I knew about crypto, I only knew about Bitcoin and Ethereum, and that they’d go up and down every day like crazy… But in reality, some of the most interesting stuff is happening in stablecoins. And stablecoins are pegged against another piece of value in the actual physical world. And this isn’t that important for people in the U.S, whose U.S. dollar is very stable, but in other parts of the world, it’s actually really possibly game-changing, because if your currency goes up and down like Ethereum goes up and down, or even more – let’s say that it goes down to almost nothing, like it happens all the time, what if instead you could be able to have a very easy way to get paid and hold on to your value in a currency that stays the same?

I think this has really hit home for me, because I had had a family member that was visiting – or not visiting, he actually had to move from Lebanon to the United States as an economic refugee, because all of their businesses, and even their life savings and stuff ended up being stuck in one of the banks in Lebanon, because of the financial and political crisis that they’re having over there… And having a conversation with him, and seeing how someone’s life can completely be ruined almost by the limitations in centralized authorities. A lot of it has to do with money; people don’t wanna sometimes say that money is that important… Most logical people do, but there are people that will say “Oh, this isn’t perfect, so let’s not even consider it”, and then they’re sitting back on their half a million dollar or a hundred thousand dollar a year salaries, saying that “This solution isn’t perfect yet, so let’s not use it.” Meanwhile, people are literally having to flee their home country and lose all their s**t because the thing that may not be perfect would actually have saved them a lot.

I kind of have gone off on slightly of a tangent there, but that is some of the stuff that I would say interested me about this space when I decided to ultimately make the move into it.

Raul Jordan: Yeah. I think it’ll be really hard for Bitcoin to switch over. Bitcoin prides itself on kind of being unchangeable, immovable. It’s unlikely that they will adopt something as radical as this. They have a very strong perspective that proof of work is the only way to go, for example. We don’t share that mindset.

The one mindset that I do share though is that I think it is risky to launch a proof of stake network from scratch. So proof of stake, by virtue of its name, you are staking something; you’re putting something up at risk, that has value, that you don’t wanna lose, in order to secure the blockchain. If you launch a project with proof of stake - where does the value come from? You’re staking something that doesn’t have any value, and you’re telling me that it’s gonna go securely?

So I’m a lot more skeptical of projects that launch pure proof of stake. I think it can be very dangerous. But like I said, Ethereum is already proof of work for a long time, it already has this massive security pool, and migrating to proof of stake makes sense for Ethereum. So I think there’s a trade-off. But yeah, we’re working on that…

Mikeal Rogers: It’s a whole ecosystem. There’s a bunch of other blockchains as well, there’s chains that are very compatible, versus ones that have some difficulty with compatibility… It’s important here to separate what is a technical limitation because we just haven’t figured out what to do yet, but there’s an incentive to fix it, versus issues that are actual incentive problems. The players in this industry don’t want to do this, so it’s not going to happen. There have been things floated to do in Bitcoin that would be good for the people that use Bitcoin, but maybe not good for the miners… So that stuff in Bitcoin is probably not gonna happen, and may happen in some of these other chains that are being created.

Transaction fees - there’s nobody who wants all the transaction fees to be super-high, actually. The business model here is to mine new tokens, and the utility of those tokens is somewhat affected by how difficult they are to transact… So there’s a real incentive to try and get that down over time, rather than up, because that’s just not where you’re making money; nobody is making money on that. They wanna get it down.

The same thing with the power consumption. Nobody wants to pay extra power bills. Everybody’s trying to get the power consumption down. It’s just literally a technical problem that we’re iterating towards.

And Flow, for instance, like we just talked about, and NEAR Protocol for that matter - they already use proof of stake, and use way less power, and they have much lower transaction fees. Not because of that… Because of other reasons, mostly.

Anyway, if you look at the ecosystem as a whole, you don’t really have a transaction fee problem because you have all these other chains that you can use that have very low transaction fees… And if an asset gets to a certain price, you can actually move it to Ethereum. And not every protocol has worked out exactly what this is, but one of the really popular things right now is called Polygon; it’s the sidechains that are Ethereum-compatible, which means that they look more or less like Ethereum. And so if you ever want to transfer an asset from there to Ethereum, you can.

So there you can create assets for sub-penny, do all these transactions, and if some of them get to be like a million dollars and you really wanna put them in the more secure, stable, broadcasted network, you can then move them to Ethereum and pay that transaction fee. And I think the way to look at this evolving is that the way that you have to scale it is through more decentralization, not more centralization. So the solution is not to get everything into Ethereum and make Ethereum so good that it has sub-penny transaction fees, and is doing a billion ops a second, or something; that’s not realistic. It’s fine to just have these sidechains and to have the assets move around.

Protocol Labs, Juan Benet who started the company - he’s always had a lot of vision about how this stuff works in the future and about this protocol interop, and we’ve been working on standards and protocols that are just open source, open protocols that we implement. A lot of people, I think, for a long time, thought that we were over-engineering. They tended to be like “Oh, why don’t you just do your own custom thing, like we’re doing over in this chain?” And we were like, “Because it’s not about your chain, it’s about the compatibility between the things”, right?

Dominic Tarr: Reproducible builds might have flagged this, but he might have gone to – like, if they had checked in the malicious code, maybe no one would have noticed. Once it was apparent that there was some encrypted code that was being run, it was like “Something is differently very suspicious”, but if it had unencrypted, that might have actually been more effective. We don’t really know… It could have been overkill to encrypt it, and so that would have actually gotten past a reproducible build, because the bad stuff would have been just hiding in plain sight.

And the other thing is that the attack depended on the event stream code doing several things that – well, rather the flatMap() code doing several things that really had no business doing. So to successfully steal people’s Bitcoin keys and then send them back to the attacker, it needs to do network IO, and event-stream itself didn’t need to do that; that is completely outside of the stated purpose of event-stream… Same with accessing the crypto module and that sort of stuff. So if there was a specific list of what permissions, on a module basis, that…

Tim Coulter: Yeah, sure. The short version of it is when the Bitcoin boom hit in 2013 when it went from $5,000 to $1,000, I got into cryptocurrency after that, and got really excited about what it is and what it could do. In early 2014 I started mining, I mined on a bunch of different altcoins at the time now worth nothing… It was a fun experience for me, and I did it mostly on the side. I was working for startups and have worked for startups my whole career coming out of college, and the startup I was working at I eventually got laid off, and by that time I had been doing other work in cryptocurrency, I had built an application on my own time to track all of the price data for a bunch of different trading pairs; basically, every trading pair on ever exchange available at the time. I was trying to aggregate all those and eventually sell that data…

In any case, that whole thing got me in interested in the blockchain world itself, so when I got laid off from this company, I told myself “You know what, I’m gonna go work in blockchain.” So I searched around, I eventually found a post on angel.co, and that led me to consensus. That was around April of 2015. The post was actually for a web designer job. Excuse me, not web design, a graphic designer job… And I can’t actually do graphic design, but I sent them a message anyway and said “Hey look, I could try this. I’m really excited to work in the blockchain world, I’d love to work with you”, and they responded the next day.

[04:13] The rest from there is kind of history, but as far as Truffle is concerned, my past history in software development is actually in the software testing world. In college – I have a software engineering degree, but I worked a lot with a professor in software testing, and that was big in the software testing community… So when I came out of college, I used that network to find jobs in the software testing world.

What that means is that for most of my career, effectively 8 years leading up to coming into the Ethereum world, I was doing developer support. This is everything from performing manual testing, to writing software testing frameworks around new technologies. When I came to Ethereum, it was very clear that there were no tools at all; you had a compiler and a JavaScript library for interacting with the Ethereum blockchain, and that was about it. From there, it seemed very easy to fall back into this developer support role, and I ended up building tools through the Ethereum ecosystem.

Mikeal Rogers: I think even just beyond privacy, these ad networks have actually also become vectors for people to do different phishing attacks, and things like that… And not just phishing, but also getting you to download something and then taking over your entire computer and having that kind of extortionware model where you have to pay them Bitcoin in order to get your computer back. A lot of that stuff is actually delivered over these ad networks.

Most people, when they put an ad on their site, they don’t do the content deals to get that ad placed; they rely on some kind of ad network to do that placement, and those ad networks are being constantly scammed by incredibly sophisticated attacks to get these ads in. So literally, these are not verifiable; it’s not possible to get them out without just saying “No, we’re not gonna have ads anymore.” Just like it’s not possible to protect privacy without saying “You know what, we’re just not going to allow certain features in the browser that allow this kind of tracking as well.”
Brave has been incredibly aggressive about ad-blocking and tracker-blocking, and as a result a couple sites won’t work, because they’re reliant on those features. But if you look at some of the announcements that came out from Safari, and I know that even some of the Chrome people are looking at it - some of these features that we have on the web that certain sites depend on may actually get turned off because of these concerns.

Mikeal Rogers: Yes, yes. A lot of them aren’t web-based yet, but there are a few that are, and we’re getting much more web support all the time. BcoinJS is like a Bitcoin client library as well. I know that people are working on an Ethereum one… IPFF is working on some blockchain stuff that will work in Go and in the browser at some point.

I think the best way to look at blockchains is that if you wanna have a transaction log, and you wanna have a distributed transaction log, that’s the best way to build it. It’s not the best place to store large amounts of data (it’s actually really intense for that), but if you wanna just store a transaction log, 1) it’s a good, cryptographically secure way to do those transactions, and 2) kind of built into the way that you interact with the transaction log, it has everything that it needs to keep itself alive, and keep its network alive. That’s one of the harder things to engineer, and the thing that we have for, say, BitTorrent, but we don’t have for a lot of other use cases.

Anna Derbakova: And I think I made a very wise choice because I’ve received overwhelmingly positive feedback for my talk and how helpful it was in understanding blockchain. So I essentially started with Bitcoin… I said, “Hey, here’s Bitcoin, you’ve all heard about it. It’s built on blockchain, so let’s dissect that.” I told people about the importance of how blockchain stores its data in terms of hashing its data to produce a fingerprint, a particular block, how blocks are linked together… I went through all of that and talked a little bit about the importance of consensus on the network and what it’s for…

I think the introduction to blockchain in my talk was solid, people very much appreciated that. Then I talked about Hyperledger and that it’s a collaborative effort under the Linux Foundation, and how people can get involved, get on Hyperledger.org, check out the docs, get on Slack and learn about it… I tried to kind of put a plugin for Hyperledger and talk about differences of Hyperledger with let’s say Ethereum or Bitcoin, just to kind of summarize and give people an idea of whether Hyperledger - or Hyperledger Fabric, specifically; it’s what we are working on - is right for them. It may be, but maybe they don’t need what Hyperledger provides, and that’s okay. It just depends on what you’re looking for for your application.

I’m obviously not advocating that Hyperledger Fabric is right for everyone; it just depends on what you’re building. Then I showed how to write a simple app on Hyperledger Fabric, and I pointed people to my tutorial if they want to go and get started, and where to download the Docker images to their machine and how to do that, and how to write a simple app.

That was the synopsis of my talk. People have asked if I maybe can post some slides… I’ll try to figure out how to do that; I’m not sure if the conference has any…

Brendan Eich: The story of my life. I was a Unix kernel hacker at Silicon Graphics before I ended up at Netscape, and I always worked on platform code… I think you see - it’s pretty explicit now - open fintech through the Symphony Foundation and other things… You see a lot of companies realize that open source is better for quality assurance, recruiting, lots of things that traditionally they would have to pay for themselves, so they can share the cost of platform code, or what Georgios Kontaxis calls evolutionary kernel code. This is the sort of stable code that’s conserved like the best DNA in a population. It’s like the TCP/IP or JavaScript - once you stabilize it, everybody can build huge systems above, and sometimes even below it. You can have multiple link layers and go from Ethernet being 10 Mbps on copper, all the way up to fiber (metropolitan Ethernet or whatever ATM cells) and still have this TCP/IP in the middle, and sure, IPv6, but it’s not really taking over, and it’s all evolutionary. JavaScript ES6, here we go again!

The platform code, the evolutionary kernel code that’s sort of “the commons” in the best sense of the word, is a cost center. When I was at Silicon Graphics, as I developed hot, killer graphics, workstations and then high-end multi-processors and low-end desktop graphics workstation machines, eventually to be killed by the PC and the GPU in the ’90s, the kernel group that I worked in and the network software group got kicked around. It was a cost center, it was an albatross, or else it was a source of talent for building out something important for the multiprocessor business. So they got kicked from the “hot product” group to the “not hot product” group and back. I think it even got divisionalized a little bit, not fully forked. HP did the same thing.

I see a pattern here, where open source is serving the commons, it’s not serving the differentiated, risky or for-profit innovation, that for better or worse some of that stuff stays proprietary. But anything that starts to become a platform, starts to become a cost center and needs to have its costs shared if it’s of interest to many other players. And how do you fund that? I wouldn’t say it’s exactly like publishers, because publishers often are for-profit. But not always - Dow Jones was a long-time family-owned and subsidized… In some ways we need Carlos Slim and Jeff Bezos to prop up the nation’s number one and two papers of record, right?

[01:00:22.27] Newspapers have been in a decades-long decline, and they always relied on advertising and subscriptions, and subscriptions never paid for the whole thing; they were always a minority of the revenue needed to run a newspaper business, even back in the heyday, the golden age of newspapers. Because people would subscribe, and there was some revenue you made there, but advertising paid the bulk of it, and that’s still true.

The way I look at this is not to say “We must have advertising. Advertising is always good.” There was a TV executive I heard about in the ‘50s who said, “It’s inconceivable that television will ever be other than free and advertising-supported”, and of course we have Netflix now, so never say never. Maybe the Brave donation model, in some future frictionless micro-donation, micro-payment, micro-royalty world will suffice. We still have free television with ads for sure, even with Netflix. But if you look at how costs are covered, you have to look at what’s happening today. If 70 billion is spent on ads in the U.S. (I think this year, or maybe it was last year), and Facebook and Google are taking a lot of it (they’re taking 80%) and the increment in spending from last year - maybe it went from 60 to 70 - of that 10 billion increment they’re 90%, that’s not leaving a lot for the publishers. And if you look at how the publishers do their ad businesses, they have to pay if they sell direct ad space. If they do indirect, they’re at the mercy of malware, like I said, but they’re also getting far less, because there’s so many people in the middle, cutting out from the pie; by the time the pie gets from the marketing side to the publisher, there’s very little left - 35-40% or less.

Still, that’s a lot of money. That’s billions of dollars a year, and these companies need to get it, so how would you go about replacing that? Assume for a moment things need to be replaced as is, that we won’t get a better model, we won’t find fusion energy, like Sam Altman thinks would make electricity free - I kind of doubt that - but ceteris paribus (all else equal), how would you replace that 70 billion? I think about that a lot. First of all, I think a lot of it is wasted on ads that never are viewed. This is the big scandal that’s been breaking for the last year or so, thanks to my friends at White Ops Security; there was another group whose acronym I’m forgetting - ANA I think, that did a study that showed there was a lot of fraud and kickback nonsense going on…

[01:02:56.04] A lot of ads aren’t being viewed. Facebook recently announced that its video ad metrics were off, way high from what they actually were. And they were charging accordingly, so people are kind of mad about this. But we have computers, we have smartphones; we could theoretically do a very private platform that measures what you’re interested in without giving away your data profile or your privacy, and matches valuable opportunities to you and give you a cut. That makes me think there’s a way to fund the web even if it’s not a commons. But certainly, for things like a publisher site that is more of a commons - obviously, Wikipedia is an example, but there are others - or all the open source software that everybody wants to share the cost of, because it is a cost centre, it is even an evolutionary kernel in some sense, and it has to be sustained by everybody who’s chipping in. I think there are ways to fund it, it’s just we haven’t found the ways to do it. That’s why Brave’s doing Bitcoin under the hood. It’s not because we love Bitcoin; we don’t want everyone to learn about Bitcoin. We do not intend people to have to become Bitcoin gurus. We haven’t announced yet, we’re doing a deal where you can easily just trust us with your credit card to do a recurring small charge to get Bitcoins; you don’t have to think about it at all. Currently, the way you fund your Brave wallet while we’re doing this Brave payments, beta is with Coinbase (we’ve partnered with Coinbase), but you still have to think a little bit about Bitcoin. And the publisher side, they’re getting Bitcoin out; we’re gonna make that easy to get fiat [currency] out.

We’d like to use something like Bitcoin though because we think there’s a future where you have a frictionless system - no interchange charge, none of the hidden charges that are associated with the credit cards where fraud sticks the merchant with the overhead or the cost of having funds clawed back to the bank. The interchange charge is like 2,15% or something (it varies), but the hidden cost of fraud is high, and a lot of merchants have to eat it. It’s not a good deal for them, especially the small businesses.

[01:04:57.10] So I think there’s something coming to the web in terms of frictionless payments, whether it’s Bitcoin, or Ethereum classic, or son of daughter of redhead’s stepchild of both… There’s something coming there, and the important properties are the permissionless property, no intermediary, frictionless property… Ideally, it would be anonymous and capable of doing micro transactions with Bitcoin as not currently. But that’s why Brave has this Brave payment solution - we solve that ahead of some next-generation solution that is coming to Bitcoin. And we want to, again, make it just work with your native fiat currency. If that happens, then I think it will be easier to micro-tip, micro-donate, have micro royalties.

Think about the Ted Nelson’s project Xanadu vision, and now think about VR if it ever takes off, or AR, because it really should be in our sunglasses. In ten years it probably will be, then all the great stuff creative people build for the augmented or virtual world - you can’t really DRM it. It’s a shared world, there’s too many eyeballs to ray trace and path trace to. You can’t say, “These are encrypted pixels and you cannot touch them, or we’ll put you in jail under the DMCA.”

All your models and your texture art - they’re gonna be out there, just like they were in Second Life. How do you protect that stuff? Well, you can watermark it; that’s a traditional method, it goes back to real-world paintings and documents. That is more of an identification system for prosecuting gross copyright violations after the fact. What if you could just have automatic micro royalties, like

Ted Nelson envisioned? People are looking at or using, or borrowing, or creative-commons-ing, meshing up some bit of art - there’s a micro royalty associated to the artist. That can be automated too, and that’s another thing that I think you can do with cryptocurrencies if you do them right. That should be part of the web standard, future AR web. I’ll pause there because I’ve said a lot, but you can see that there’s a big vision here, and I hope it’s exciting to everybody because it goes way beyond just browsers.

Tess Rinearson: We use something related to PBFT, but we basically have - again, without getting too into the nuts and bolts of it - a single node that we have been calling the generator node, although we’ve just started discussing changing that to the block proposer, that is responsible for gathering the transactions along the network and creating a new block. This is in a lot of ways a single point of failure, but the other nodes in the system basically can audit it and can halt the system if the block generator fails.

In the case of these financial networks, that’s actually not a bad thing, because if some institution in the network is going rogue, you have a bigger problem than the state of your databases; you have sort of an organizational problem that has to be dealt with offline. So the fact that we use that as our consensus model, again, for now, there’s room in our protocol to refine and improve. That system gives us much better performance than something like proof of work, which is what Bitcoin uses.

Gavin Wood: I think some parallels can be drawn to the early internet, where it was sort of slightly scary to send payment information over the internet. I remember back in ‘98, it was still relatively commonplace, I was still being asked to pass my credit card information via email. It’s like, “Well, I don’t really want to do that… That’s incredibly insecure.” SSL was still a fairly new thing, to the point that the eCommerce sites often didn’t have it implemented.

We’re gonna have to go through the same phase with Ethereum. There’s gonna be an early teething stage where things don’t operate quite as you expect. Either the Ethereum technology itself doesn’t - luckily, we haven’t had any of those bugs yet, but in principle it could happen; it is a nascent technology. It happened with Bitcoin, so I wouldn’t rule it out, though we have taken very particular steps to avoid that, in particular multiple implementations and a formal specification.

The second thing that could happen is just the economic foundation behind the smooth running of the Ethereum at work gets a little afraid, and that’s pretty much what happened with the DAO. The fact it forked owed to the fact that there was such a large contingent of value that people wanted to save, that were also people who maintained the Ethereum network.

[50:05] I think as the network matures, that’s gonna be much less likely to happen, quite simply because the value of Ethereum is going to disperse as more and more people get involved.

Juan Benet: The core principle underlying IPFS is to model data and link data using causal linking. This is an idea that goes way back to people like Leslie Lamport and others in distributed systems that really had a good framing for how to move around data. But more recently, I think distributed version control systems like Git and Mercurial and so on prove to us how valuable it is to model data this way. They weren’t the first systems to do it, there were others before, but I think they were certainly the most widely used. The same fundamental property that underlies Git is same is the property that underlies things like Bitcoin is the idea of linking objects using hashes. This is both causal linking, meaning that one object is ordered after the other. You can say that when you link something by cryptographic hash, the object that is linking to another has to always come after the other; it orders them in time.

The other piece of it is that by using cryptographic hashes you can verify the content. So if I have a link to an object or a file and that link has a cryptographic hash, it means that I can find that file anywhere. I don’t have to go and ask any specific location or authority for the file; anyone can serve me that file. And I can check that it is the right file because I can hash it and I can verify the hashes match. That is an organizing principle for the entire file system that you can build on top it.

The kernel on the inside of something like IPFS - and other systems not just IPFS - is that if you center on this as the main way to model your data and link the data, then you can make a lot of problems easier. You can easily reason about what content came before what other content; you can easily reason about making sure that the content is correct and valid, you can authenticate the content, you can verify that it is correct and you are free to now accept it from anyone in the network. You no longer have to go to specific web servers. You can really get it from any other computer. You can also not have to be connected to the internet, actually. You can be in a different network that is separate and using and manipulating the exact same set of links.

The underlying principle of linking something by hash - we call it Merkle linking, and it comes from Merkle trees. Merkle trees are a data structure that was invented by Ralph Merkle, a very eminent cryptographer. Ralph Merkle has done a lot of other amazing things. Perhaps his most famous contribution was called Merkle puzzles, that proved that you could establish secure communications with each other in the clear. This was before public/private key pair and so it was a big, important contribution. This idea of merkle linking through Merkle trees stayed buried in the cryptography community and the low-level systems community for a long time, probably because it was patented, I think people were more reluctant to use it. But I think the patent has expired since and then it began to be used all over the place, in systems like Git and so on.

This is what gives rise to the nice distributed systems properties. When you think about a Git object, you have a SHA-1 hash that you can use to address the commit or address the file or the directory and whatever, and you no longer have to trust the network to provide the correct content to you. You can reason about the history. You can even find out about the server and find out that it has been compromised because it is serving you some other completely different history. Or maybe it has not been compromised, but people did rewrite history and you can tell that that is happening and you can be selective about the changes that you take in.

So that fundamental property, which again, to restate it, you’re just linking objects with hashes. You are embedding into one object the hash of the other. This gives you a way to tie up content causally. So if one object gets updated, then all of the links it to have to change, and so on. And this gives you the ability to verify and validate the content and to also content-address it. There is another leap there, which is you have to also consider that these hashes may not just be a good way to verify the content, you can also use them as a way to address the content in the links themselves. You can put it in a file system or an address bar or something, and ask for something by hash. This is also an old idea. It has been used in many systems.

But by using these simple abstractions and piecing them well together, you can build a distributed system - a distributed information system if you will - that can move around content in a much safer way, because you can verify all of it. It’s faster because you can often times check caches that are local to you - it could be in the same machine, it could be in a machine close to you physically or it could be in the network that you are in, not even having to talk to the internet backbone and so on. It just makes information distribution faster, and allows you to reuse the bandwidth of all your peers. You no longer have to trust others, you can ask them for something and you can verify that they are giving you the right content. All of this falls out of the fundamental idea of Merkle linking.