1 00:00:00,360 --> 00:00:03,520 Speaker 1: By now, most of you have probably heard of bitcoin. 2 00:00:04,240 --> 00:00:07,840 Speaker 1: Bitcoin has risen more than in the last two months. Certainly, 3 00:00:07,880 --> 00:00:11,400 Speaker 1: bitcoin is the granddaddy. Right now, Bitcoin hits a new 4 00:00:11,480 --> 00:00:14,760 Speaker 1: high briefly touching. Bitcoin is a new kind of currency 5 00:00:14,800 --> 00:00:16,960 Speaker 1: that you can use to pay for things, and it's 6 00:00:16,960 --> 00:00:20,840 Speaker 1: exploded in popularity over the last few years. Bitcoin success 7 00:00:20,840 --> 00:00:24,240 Speaker 1: has spawned tons of other digital currencies that share Bitcoin's 8 00:00:24,320 --> 00:00:29,160 Speaker 1: underlying technology. The Ripple is far ahead off everybody else 9 00:00:29,200 --> 00:00:32,680 Speaker 1: in the space. That has been replaced by Monnero as 10 00:00:32,720 --> 00:00:35,680 Speaker 1: the currency of choice. Charlie Lee is the creator of 11 00:00:35,760 --> 00:00:39,239 Speaker 1: a light coin, which is an alternative, a challenger to Bitcoin. 12 00:00:39,960 --> 00:00:43,839 Speaker 1: Right now, several of these currencies are facing a curious problem. 13 00:00:43,880 --> 00:00:46,960 Speaker 1: They become too popular for their own good. They weren't 14 00:00:46,960 --> 00:00:49,919 Speaker 1: originally designed to support so many users, and their networks 15 00:00:49,920 --> 00:00:51,840 Speaker 1: are struggling to keep up with all the new people 16 00:00:51,920 --> 00:00:55,160 Speaker 1: flooding in. Nowhere is this problem more acute than in 17 00:00:55,160 --> 00:00:58,360 Speaker 1: the clogged networks of what's quickly become the world's number 18 00:00:58,440 --> 00:01:02,960 Speaker 1: two cryptocurrency. The currency is called Ether, and the network 19 00:01:03,040 --> 00:01:06,520 Speaker 1: that powers it is called ethereum. Either's boom is meant 20 00:01:06,520 --> 00:01:09,360 Speaker 1: that its network has been bogged down by long delays, 21 00:01:10,000 --> 00:01:12,880 Speaker 1: which means that many of its users already desperate for 22 00:01:12,920 --> 00:01:15,720 Speaker 1: an overhaul. Leading the charge as a young guy I 23 00:01:15,800 --> 00:01:19,520 Speaker 1: recently met at an Ethereum conference in Cancoon. His name 24 00:01:19,920 --> 00:01:26,760 Speaker 1: Vlad Zampier. Hey everyone, how's it going? Do you have 25 00:01:26,800 --> 00:01:33,440 Speaker 1: a The thing is, if Atherorum were run by a corporation, 26 00:01:33,680 --> 00:01:36,400 Speaker 1: there'd be a CEO who could sign off on the change, 27 00:01:36,760 --> 00:01:38,640 Speaker 1: And if a theory were run by a central bank, 28 00:01:38,840 --> 00:01:41,039 Speaker 1: it would be just a handful of central bankers who 29 00:01:41,120 --> 00:01:44,640 Speaker 1: deliberate and vote yes or no. But Ethereum is run 30 00:01:44,640 --> 00:01:47,039 Speaker 1: by neither of those things. Just like many of its 31 00:01:47,040 --> 00:01:51,440 Speaker 1: other cryptocurrency siblings, including the Bitcoin, Ethereum was created with 32 00:01:51,480 --> 00:01:57,080 Speaker 1: this libertarian, anti corporate ideal of being leaderless. It's Vlad's 33 00:01:57,120 --> 00:02:00,440 Speaker 1: job to navigate the chaos and that unstructured can unity 34 00:02:00,680 --> 00:02:03,160 Speaker 1: to implement the change that he and so many others 35 00:02:03,160 --> 00:02:16,920 Speaker 1: have been dreaming of for years. Hi, I'm Brad Stone 36 00:02:17,240 --> 00:02:20,560 Speaker 1: and I'm Matthew Lising, and this week on Decrypted, we're 37 00:02:20,600 --> 00:02:24,960 Speaker 1: taking you inside Lad's planned upgrade Etheroryum, and is hoped 38 00:02:25,000 --> 00:02:27,559 Speaker 1: to pave the way for this new era of technology 39 00:02:27,560 --> 00:02:31,200 Speaker 1: to go mainstream. Glad has big dreams for Ethereum. He 40 00:02:31,240 --> 00:02:34,840 Speaker 1: sees it as so much more than infrastructure for another currency. 41 00:02:35,360 --> 00:02:37,680 Speaker 1: But to make all of that possible, he's got to 42 00:02:37,680 --> 00:02:41,400 Speaker 1: get everyone to agree to his overhaul. So can Glad 43 00:02:41,480 --> 00:02:44,280 Speaker 1: pull it off? Or will it prove too difficult to 44 00:02:44,360 --> 00:02:47,399 Speaker 1: rally this huge community with competing interests that's spread out 45 00:02:47,440 --> 00:02:50,240 Speaker 1: across the world. By the end of the episode, you 46 00:02:50,280 --> 00:03:07,440 Speaker 1: might even understand what blockchains all about. Stay with us, So, Mad, 47 00:03:07,520 --> 00:03:10,040 Speaker 1: I'm a little jealous. You've got to go to Cancoon 48 00:03:10,160 --> 00:03:13,680 Speaker 1: for the story I did, although I was stuck inside 49 00:03:13,720 --> 00:03:17,079 Speaker 1: this conference hall with about two thousand Ethereum developers the 50 00:03:17,120 --> 00:03:21,400 Speaker 1: whole time, and there was some bo involved. Okay, all right, 51 00:03:21,560 --> 00:03:24,240 Speaker 1: I take it back. I'm not jealous. So this conference 52 00:03:24,280 --> 00:03:26,680 Speaker 1: was where you met our protagonists of Lad. Tell me 53 00:03:26,720 --> 00:03:29,480 Speaker 1: what he was like. So he's twenty seven years old. 54 00:03:29,720 --> 00:03:32,040 Speaker 1: He has shoulder length hair that he plays with a lot. 55 00:03:32,120 --> 00:03:34,280 Speaker 1: He tends to put it in his mouth as he's talking. 56 00:03:35,040 --> 00:03:38,040 Speaker 1: He's a huge fan of the Twisted cartoon Rick and Morty. 57 00:03:38,480 --> 00:03:41,680 Speaker 1: He likes to snowboard in his off time. You know. 58 00:03:41,720 --> 00:03:45,920 Speaker 1: He reminded me of Fred Armison of SNL and Portlandia fame. 59 00:03:46,080 --> 00:03:48,520 Speaker 1: But there's another interesting thing. You know, he's got this 60 00:03:48,640 --> 00:03:53,040 Speaker 1: very international background. I was born in Prussia for Romania. 61 00:03:53,360 --> 00:03:57,720 Speaker 1: In Romania, yeah, okay, cool? Did you grow up there? Okay? 62 00:03:57,960 --> 00:04:00,720 Speaker 1: And then then where'd you go? Canada? I grew up 63 00:04:00,720 --> 00:04:03,880 Speaker 1: in Ottawa wasting. I noticed the wealth is something you list. 64 00:04:04,040 --> 00:04:05,720 Speaker 1: Are you do you living? Growth? I went to the 65 00:04:05,760 --> 00:04:07,440 Speaker 1: university and golfer I live and growth for a number 66 00:04:07,440 --> 00:04:10,880 Speaker 1: of years. Lad's parents now live in Switzerland, but Lad 67 00:04:10,920 --> 00:04:13,960 Speaker 1: himself more or less doesn't really have a home. He's 68 00:04:14,000 --> 00:04:16,920 Speaker 1: been so busy traveling from conference to conference that he's 69 00:04:16,960 --> 00:04:23,159 Speaker 1: on the road full time. Lad has been interested in 70 00:04:23,160 --> 00:04:26,320 Speaker 1: computers since he was a young boy. That's always been 71 00:04:26,360 --> 00:04:28,080 Speaker 1: my thing. My grandfather was about professor. He taught me 72 00:04:28,120 --> 00:04:31,880 Speaker 1: about Sin Sosa. Yeah. He says he got into programming 73 00:04:31,920 --> 00:04:34,719 Speaker 1: when he was eleven or twelve. I guess the first 74 00:04:34,720 --> 00:04:36,880 Speaker 1: time I got into programming, I was playing around in 75 00:04:36,880 --> 00:04:39,400 Speaker 1: the World Cup three map editor, making the custom games. 76 00:04:39,800 --> 00:04:41,400 Speaker 1: And then we had this great environment where you could 77 00:04:42,200 --> 00:04:46,400 Speaker 1: news drop down lists to program um events and all 78 00:04:46,440 --> 00:04:51,719 Speaker 1: sorts of like actually incredibly complex um things. And soon 79 00:04:51,839 --> 00:04:55,279 Speaker 1: enough that led to a passion for cryptocurrencies. At first, 80 00:04:55,600 --> 00:04:58,920 Speaker 1: he was focused on bitcoin. I actually got into bitcoin, 81 00:04:59,360 --> 00:05:07,960 Speaker 1: um in my I think, which was um the year after, 82 00:05:08,160 --> 00:05:14,040 Speaker 1: like in my first year of grade school. Um and uh, 83 00:05:14,360 --> 00:05:19,159 Speaker 1: but I I kind of dropped out, not with the 84 00:05:19,160 --> 00:05:21,919 Speaker 1: intention of going into cryptocurrency, but in like the following 85 00:05:21,960 --> 00:05:23,800 Speaker 1: months that ended up being when I ended up doing. 86 00:05:24,560 --> 00:05:29,200 Speaker 1: Now enter Batalic buterin a Russian Canadian boy genius programmer 87 00:05:29,520 --> 00:05:33,760 Speaker 1: the years when lad got into bitcoin, And that's when 88 00:05:33,760 --> 00:05:37,800 Speaker 1: Batalic created a new kind of cryptocurrency called ether, powered 89 00:05:37,800 --> 00:05:41,560 Speaker 1: by a network he called ethereum. Metallic was only nineteen 90 00:05:41,800 --> 00:05:44,600 Speaker 1: at the time. And Matt, did you meet Metallic at 91 00:05:44,600 --> 00:05:47,880 Speaker 1: this conference too? I did. I asked him how he 92 00:05:47,920 --> 00:05:50,600 Speaker 1: came up with the name ethereum. I came up with 93 00:05:50,640 --> 00:05:53,600 Speaker 1: it myself. Um, but we I and I remember myself 94 00:05:53,720 --> 00:05:57,520 Speaker 1: reading as a list of elements from science fiction. Uh. 95 00:05:57,560 --> 00:06:00,960 Speaker 1: And I remember liking ethereum because has this connection to 96 00:06:01,520 --> 00:06:07,040 Speaker 1: this nineti century scientific theory of ether, this medium where 97 00:06:07,080 --> 00:06:10,240 Speaker 1: a gift waterways travel through water, sound ways traveled through 98 00:06:10,240 --> 00:06:12,679 Speaker 1: the air, like the hypothesis will be light We've traveled 99 00:06:12,680 --> 00:06:15,799 Speaker 1: through ether. I just love this name. It's it's geeky, 100 00:06:16,040 --> 00:06:19,719 Speaker 1: it has a hat tip towards a history the sci 101 00:06:19,800 --> 00:06:23,640 Speaker 1: fi connotations. It's kind of just perfect for a cryptocurrency. Yeah, 102 00:06:23,680 --> 00:06:25,919 Speaker 1: and if you met this guy, he's almost like a 103 00:06:25,960 --> 00:06:31,680 Speaker 1: walking computer. He's just incredibly, incredibly smart. So in the 104 00:06:31,800 --> 00:06:34,480 Speaker 1: talk met Vlad at a bitcoin meet up in Toronto. 105 00:06:35,120 --> 00:06:38,240 Speaker 1: The two soon started talking about the seeds of what 106 00:06:38,320 --> 00:06:42,159 Speaker 1: will become the project. The Lad would head up May 107 00:06:42,279 --> 00:06:44,400 Speaker 1: It's play fourteen Italian thinking about it for a few 108 00:06:44,400 --> 00:06:47,280 Speaker 1: months before that, he told me there's like, you know, future, 109 00:06:47,320 --> 00:06:48,880 Speaker 1: and we kind of spent a bunch of time and 110 00:06:48,920 --> 00:06:50,680 Speaker 1: May actually like it's like hashing things out. But at 111 00:06:50,680 --> 00:06:52,120 Speaker 1: the point I was still skeptical, didn't really think it 112 00:06:52,120 --> 00:06:58,000 Speaker 1: would work. But like in September, I became like, you know, 113 00:06:58,160 --> 00:07:08,520 Speaker 1: convinced that it would work. Now in the niche, nerdy 114 00:07:08,560 --> 00:07:11,720 Speaker 1: world of Ethereum, Vlad is nothing short of a celebrity. 115 00:07:12,400 --> 00:07:15,600 Speaker 1: I followed him around at the DevCon conference and people 116 00:07:15,640 --> 00:07:18,280 Speaker 1: were hurling questions at him left and right as he 117 00:07:18,320 --> 00:07:24,400 Speaker 1: walked down the hall. But the signature is, I mean, 118 00:07:25,320 --> 00:07:33,960 Speaker 1: may not be enough. I mean it sounds like fun. Yeah, 119 00:07:34,520 --> 00:07:37,440 Speaker 1: it's pretty hectic. But you know, even before he was 120 00:07:37,480 --> 00:07:40,559 Speaker 1: scheduled to make his big speech about his project, people 121 00:07:40,560 --> 00:07:42,960 Speaker 1: are jostling to talk to him. So this is the 122 00:07:43,000 --> 00:07:46,559 Speaker 1: project that's going to unclogged the ethereum network. That's the hope. 123 00:07:47,120 --> 00:07:49,600 Speaker 1: He's named the project Casper because it's related to an 124 00:07:49,600 --> 00:07:54,120 Speaker 1: earlier type of consensus system known as Ghost or ghost 125 00:07:54,200 --> 00:08:01,720 Speaker 1: protocols with a friendly ghost correct by Construction Filtre. This 126 00:08:01,880 --> 00:08:05,520 Speaker 1: is the introduction for lad rallying the crowd. There must 127 00:08:05,520 --> 00:08:07,800 Speaker 1: have been about two thousand people in the conference hall 128 00:08:07,920 --> 00:08:10,600 Speaker 1: and they were getting excited. But then he ran into 129 00:08:10,600 --> 00:08:13,720 Speaker 1: a power Point Snaphew, as we all do, even math 130 00:08:13,800 --> 00:08:20,240 Speaker 1: wonder kids struggle with power Point. You would have thought 131 00:08:20,280 --> 00:08:23,080 Speaker 1: they were chanting for a rock star. Really sorry, guys, 132 00:08:23,200 --> 00:08:26,840 Speaker 1: but you know I swear to God's gonna happen and 133 00:08:27,360 --> 00:08:32,400 Speaker 1: you'll be impress. So did it happen? Yeah, he eventually 134 00:08:32,440 --> 00:08:35,600 Speaker 1: got it to work. And were you impressed with those ideas? Yeah? 135 00:08:35,840 --> 00:08:37,760 Speaker 1: It was mostly a ton of crazy math that I 136 00:08:37,800 --> 00:08:40,319 Speaker 1: didn't understand, but from what I could tell, it went 137 00:08:40,480 --> 00:08:51,000 Speaker 1: very well. Part of Glad's job is to figure out 138 00:08:51,040 --> 00:08:55,640 Speaker 1: the super complicated math behind his project, but another part 139 00:08:56,000 --> 00:09:00,439 Speaker 1: is evangelizing the project itself, trying to get everyone to 140 00:09:00,520 --> 00:09:03,440 Speaker 1: come aboard, and that's a steep challenge. Just as the 141 00:09:03,480 --> 00:09:06,920 Speaker 1: more technical problems he's trying to solve. Vlad is kind 142 00:09:06,920 --> 00:09:10,440 Speaker 1: of like a politician. Yeah, he'd probably cringe at that, 143 00:09:10,520 --> 00:09:15,160 Speaker 1: but it's true because then just his name veragely difficult 144 00:09:17,120 --> 00:09:22,719 Speaker 1: and extraordinarily difficult systems from a distributed systems problem. What 145 00:09:22,760 --> 00:09:26,800 Speaker 1: does that mean. That's a very technical way of saying that, 146 00:09:27,200 --> 00:09:31,000 Speaker 1: just like our own messy democracy, it's really hard to 147 00:09:31,040 --> 00:09:34,400 Speaker 1: get a large group to all get behind Casper. I mean, 148 00:09:34,600 --> 00:09:37,520 Speaker 1: these are people spread all around the world, most of 149 00:09:37,559 --> 00:09:40,320 Speaker 1: whom don't know each other, So how would they actually 150 00:09:40,360 --> 00:09:45,040 Speaker 1: implement lads change? Well, once lads done figuring out the math, 151 00:09:45,280 --> 00:09:47,600 Speaker 1: then there are going to be these other developers who 152 00:09:47,640 --> 00:09:51,640 Speaker 1: come in and turn lads math into code, and that 153 00:09:51,720 --> 00:09:55,440 Speaker 1: code goes into an updated version of the software that 154 00:09:55,520 --> 00:09:59,920 Speaker 1: people use to navigate the Ethereum universe. So then people 155 00:10:00,080 --> 00:10:03,120 Speaker 1: either decide to adopt that update or not. It's kind 156 00:10:03,160 --> 00:10:05,680 Speaker 1: of like when Apple pushes a new iOS update on 157 00:10:05,760 --> 00:10:08,719 Speaker 1: you and you decide whether to download it. So was 158 00:10:08,760 --> 00:10:11,120 Speaker 1: this like a vote. It's not a formal vote now, 159 00:10:11,559 --> 00:10:13,840 Speaker 1: but you could think of it like the people who 160 00:10:13,840 --> 00:10:16,600 Speaker 1: adopt the new software or voting yes, and the people 161 00:10:16,640 --> 00:10:19,840 Speaker 1: who keep using the old software or voting no. And 162 00:10:19,920 --> 00:10:23,280 Speaker 1: as long as enough computers adopt the update with lads changes, 163 00:10:23,720 --> 00:10:27,160 Speaker 1: Ethereum will have effectively moved on to the new system. 164 00:10:27,200 --> 00:10:29,600 Speaker 1: And what happens if that fails, If not enough people 165 00:10:29,640 --> 00:10:33,720 Speaker 1: adopt the new system, well, it would basically give birth 166 00:10:33,760 --> 00:10:36,440 Speaker 1: to a new version of Ethereum. So there would be 167 00:10:36,480 --> 00:10:39,920 Speaker 1: the Ethereum based off of the old software and the 168 00:10:39,960 --> 00:10:43,280 Speaker 1: Ethereum based off the new software. That kind of split 169 00:10:43,320 --> 00:10:47,240 Speaker 1: has happened to Bitcoin and to Ethereum before it gets 170 00:10:47,320 --> 00:10:49,840 Speaker 1: really messy, though, and Vlad wants to avoid that at 171 00:10:49,880 --> 00:10:52,839 Speaker 1: all costs. Yeah, okay, so I think I understand enough 172 00:10:52,880 --> 00:10:55,280 Speaker 1: to know that that is a bad outcome. And a 173 00:10:55,360 --> 00:10:58,079 Speaker 1: lot is writing on Glad to convince everyone to take 174 00:10:58,120 --> 00:11:01,560 Speaker 1: of changes. Yeah, yeah, for sure, and he knows that 175 00:11:01,600 --> 00:11:04,199 Speaker 1: he knows the pressure he's under. But here's the thing. 176 00:11:04,640 --> 00:11:08,160 Speaker 1: Even after three years, Casper is not ready. There's been delays, 177 00:11:09,000 --> 00:11:12,199 Speaker 1: and the people who regularly use Ethereum are starting to 178 00:11:12,240 --> 00:11:16,760 Speaker 1: get impatient. So what exactly Laddin Vitallic are trying to 179 00:11:16,840 --> 00:11:20,160 Speaker 1: do in the world's first explanation of blockchain that won't 180 00:11:20,160 --> 00:11:23,160 Speaker 1: put you to sleep? We promise that is coming up. 181 00:11:35,440 --> 00:11:39,400 Speaker 1: So Matt, what exactly is Casper trying to do? Okay, 182 00:11:39,440 --> 00:11:42,679 Speaker 1: to understand it, we need to explain how the underlying 183 00:11:42,679 --> 00:11:46,280 Speaker 1: technology works. This is the technology that we've been referring 184 00:11:46,320 --> 00:11:51,400 Speaker 1: to as blockchain. Oh God, okay, I'm gonna prepare myself here. Okay, 185 00:11:51,440 --> 00:11:56,040 Speaker 1: are you ready go for it? So imagine you want 186 00:11:56,040 --> 00:11:57,720 Speaker 1: to send me a hundred bucks to thank me for 187 00:11:57,800 --> 00:12:00,679 Speaker 1: being such a great guest host on DECRYPTI okay, I 188 00:12:00,960 --> 00:12:04,960 Speaker 1: can see where this is going now. Traditionally, what would 189 00:12:05,000 --> 00:12:07,520 Speaker 1: happen is your bank would check your balance right to 190 00:12:07,600 --> 00:12:09,640 Speaker 1: make sure you actually have that one hundred bucks to 191 00:12:09,720 --> 00:12:12,319 Speaker 1: give me, right, But then if you were to give 192 00:12:12,320 --> 00:12:15,480 Speaker 1: me a hundred dollars worth of bitcoin or ether, it 193 00:12:15,520 --> 00:12:19,079 Speaker 1: works differently. So it's not a bank that checks anything 194 00:12:19,160 --> 00:12:21,560 Speaker 1: or verifies that you have a hundred dollars to give. 195 00:12:22,559 --> 00:12:25,959 Speaker 1: It's these other people in the community that perform the verification. 196 00:12:26,600 --> 00:12:30,240 Speaker 1: These are the people we call miners, okay, like gold miners, 197 00:12:30,920 --> 00:12:33,920 Speaker 1: yeah kind of. I presume they're not wearing hard hats 198 00:12:33,960 --> 00:12:36,400 Speaker 1: and carrying picks, So how how do they verify what 199 00:12:36,440 --> 00:12:39,640 Speaker 1: they need to verify? The first thing to understand is 200 00:12:39,640 --> 00:12:43,400 Speaker 1: how important the history of the ledger is here every 201 00:12:43,440 --> 00:12:48,160 Speaker 1: transaction and a blockchain is recorded in time stand so 202 00:12:48,240 --> 00:12:51,520 Speaker 1: when the network checks for your one bucks, there it is. 203 00:12:52,520 --> 00:12:57,120 Speaker 1: Miners are using these really powerful computers that do tons 204 00:12:57,240 --> 00:13:01,400 Speaker 1: and tons of trial and error calculations, and the first 205 00:13:01,440 --> 00:13:05,560 Speaker 1: one to get it right gets rewarded with bitcoin or 206 00:13:05,600 --> 00:13:09,959 Speaker 1: ether or whatever other cryptocurrency you're working at. So think 207 00:13:10,000 --> 00:13:13,400 Speaker 1: about it right now. That's a free seventeen tho dollars 208 00:13:13,400 --> 00:13:15,640 Speaker 1: for one bitcoin right now. So there's a lot of 209 00:13:15,679 --> 00:13:20,280 Speaker 1: money here at stake. And this is how all cryptocurrencies work. Yeah, 210 00:13:20,720 --> 00:13:24,440 Speaker 1: basically except for a few very minor ones. But you know, 211 00:13:24,640 --> 00:13:26,920 Speaker 1: it's also a process that's led to a lot of 212 00:13:26,920 --> 00:13:30,839 Speaker 1: problems like what, well, it's become expensive to be a miner. 213 00:13:31,520 --> 00:13:34,720 Speaker 1: You're competing against everyone else to be the first to crack, 214 00:13:34,960 --> 00:13:38,080 Speaker 1: you know the problem. That means you have to invest 215 00:13:38,120 --> 00:13:41,719 Speaker 1: in really powerful computers to run these calculations. You need 216 00:13:41,760 --> 00:13:44,479 Speaker 1: to pay for a lot of electricity to run those computers. 217 00:13:45,080 --> 00:13:47,800 Speaker 1: That all means that it's mostly big companies and big 218 00:13:47,800 --> 00:13:51,000 Speaker 1: groups of miners that have all banded together who are 219 00:13:51,080 --> 00:13:54,560 Speaker 1: dominating the mining of these cryptocurrencies. And there's been a 220 00:13:54,559 --> 00:13:57,400 Speaker 1: lot of talk recently about all the electricity that these 221 00:13:57,400 --> 00:14:00,880 Speaker 1: miners are wasting to perform these calculations. Yeah, I don't 222 00:14:00,880 --> 00:14:02,559 Speaker 1: know if they would say it's wasting, but it's a 223 00:14:02,640 --> 00:14:06,440 Speaker 1: lot of usage. So like a recent report estimated that 224 00:14:06,480 --> 00:14:10,240 Speaker 1: the electricity used to mind the world's bitcoin is equal 225 00:14:10,480 --> 00:14:13,959 Speaker 1: to the electricity used by Ecuador in an entire year. 226 00:14:14,720 --> 00:14:18,600 Speaker 1: And Ecuador is a country with sixteen million people. That 227 00:14:18,760 --> 00:14:22,160 Speaker 1: is absolutely crazy, particularly now when you know C two 228 00:14:22,200 --> 00:14:25,720 Speaker 1: emissions and global warming have become such a big problem. Yep, 229 00:14:26,120 --> 00:14:29,640 Speaker 1: there's another problem too. You know, when you're relying on 230 00:14:29,680 --> 00:14:35,560 Speaker 1: this time consuming trial and error process to verify transactions, 231 00:14:35,680 --> 00:14:38,880 Speaker 1: it also means you have a pretty slow network. Okay, 232 00:14:38,880 --> 00:14:41,680 Speaker 1: how slow are we talking about? At the conference, I 233 00:14:41,840 --> 00:14:44,920 Speaker 1: spoke to someone named Andrew Keys. He works for an 234 00:14:44,960 --> 00:14:48,720 Speaker 1: ethereum startup in Brooklyn called Consensus, and he compared it 235 00:14:48,760 --> 00:14:53,000 Speaker 1: to credit card transactions. American Express, Visa, master Card all 236 00:14:53,040 --> 00:14:56,360 Speaker 1: average around thirty thousand transactions per second. But if you 237 00:14:56,400 --> 00:15:01,000 Speaker 1: compare that with etherium, the public ethereum main net average 238 00:15:01,040 --> 00:15:05,320 Speaker 1: it about seven. So if Ethereum can process seven transactions 239 00:15:05,320 --> 00:15:09,400 Speaker 1: per second and there's demand for a hundred, what happens, Well, 240 00:15:09,440 --> 00:15:12,480 Speaker 1: you get a backlog Uh, there's transactions that are just 241 00:15:12,520 --> 00:15:16,440 Speaker 1: waiting to get verified, which leads to long delays. That's 242 00:15:16,480 --> 00:15:19,920 Speaker 1: exactly what's happening now. Recently, it's gotten really bad to 243 00:15:20,800 --> 00:15:23,880 Speaker 1: some transactions have taken as long as twenty minutes and 244 00:15:24,000 --> 00:15:26,920 Speaker 1: glad you know he's out there saying, Hey, my proposal 245 00:15:26,960 --> 00:15:32,760 Speaker 1: is going to fix this, good old Lad. Okay, so 246 00:15:32,800 --> 00:15:36,800 Speaker 1: what would lads changes actually do. Here's the gist. In 247 00:15:36,840 --> 00:15:40,240 Speaker 1: the current system, miners are the ones who verify transactions, 248 00:15:40,960 --> 00:15:44,960 Speaker 1: but Lad and Metallic wanted to move that responsibility to 249 00:15:45,080 --> 00:15:49,600 Speaker 1: these people that they're calling stakeholders stakeholders. Okay, the metaphors 250 00:15:49,600 --> 00:15:53,960 Speaker 1: aren't quite consistent, but tell us who are the stakeholders? Okay, 251 00:15:54,000 --> 00:15:58,360 Speaker 1: A stakeholder is anyone who owns ether. That's the currency 252 00:15:58,480 --> 00:16:02,200 Speaker 1: remember for ethereum. Here's the catch. You have to lock 253 00:16:02,280 --> 00:16:05,280 Speaker 1: it up and like an escrow account or for a 254 00:16:05,280 --> 00:16:07,640 Speaker 1: short period of time. It's sort of like in a 255 00:16:07,680 --> 00:16:13,240 Speaker 1: security deposit box. And as they're working on verifying other 256 00:16:13,280 --> 00:16:19,160 Speaker 1: people's transactions, they get rewarded if they verify legitimate trades. Uh, 257 00:16:19,200 --> 00:16:22,040 Speaker 1: if they verify bad ones, or if they try to 258 00:16:22,120 --> 00:16:26,160 Speaker 1: mess with the system, they can lose those security deposits. Okay, 259 00:16:26,160 --> 00:16:28,520 Speaker 1: so I get it. It's against their interest to try 260 00:16:28,560 --> 00:16:33,080 Speaker 1: to do anything bad exactly. And in this new system 261 00:16:33,120 --> 00:16:36,520 Speaker 1: to verify transactions, um, you don't need an army of 262 00:16:36,560 --> 00:16:41,840 Speaker 1: computers to be running those energy consuming, time consuming trial 263 00:16:41,920 --> 00:16:46,680 Speaker 1: and error calculations. The verifications here would happen much faster, 264 00:16:47,280 --> 00:16:49,080 Speaker 1: so the network would be able to take on a 265 00:16:49,080 --> 00:16:52,920 Speaker 1: lot more volume. It would also be more energy efficient 266 00:16:53,280 --> 00:16:57,320 Speaker 1: and less expensive. Proponents hope that would have the benefits 267 00:16:57,440 --> 00:17:01,440 Speaker 1: of allowing more people, ordinary people to earn more Ether 268 00:17:02,120 --> 00:17:05,720 Speaker 1: and also keep the cryptocurrency from getting concentrated in the 269 00:17:05,800 --> 00:17:09,359 Speaker 1: hands of just a few rich people and those mining 270 00:17:09,400 --> 00:17:12,800 Speaker 1: groups that we've been talking about. Yeah, but Matt, it 271 00:17:12,840 --> 00:17:15,359 Speaker 1: does sound like this is a system that benefits people 272 00:17:15,359 --> 00:17:18,400 Speaker 1: who already own a ton of Ether, these so called stakeholders. 273 00:17:18,560 --> 00:17:21,640 Speaker 1: Wouldn't they just go on to earn more. Yeah, that's 274 00:17:21,680 --> 00:17:25,040 Speaker 1: definitely an argument against it. But they also feel that 275 00:17:26,000 --> 00:17:28,359 Speaker 1: think about the barrier to entry of mining. You have 276 00:17:28,400 --> 00:17:29,760 Speaker 1: to have all the equipment, you have to know what 277 00:17:29,800 --> 00:17:32,160 Speaker 1: you're doing here, you just have to own the currency, 278 00:17:32,160 --> 00:17:33,919 Speaker 1: which is a lot easier to get into it. So 279 00:17:33,960 --> 00:17:39,800 Speaker 1: they hope that it kind of democratizes it So remember 280 00:17:39,800 --> 00:17:41,919 Speaker 1: how I told you earlier that people are getting anty 281 00:17:42,000 --> 00:17:45,320 Speaker 1: for this upgrade. They're getting so anty now that Vitalic 282 00:17:45,840 --> 00:17:49,520 Speaker 1: is pushing another version of Casper, another version, so there's 283 00:17:49,560 --> 00:17:54,200 Speaker 1: Casper two point. Oh yeah, they're not necessarily competing proposals though, 284 00:17:54,840 --> 00:17:58,680 Speaker 1: Laden Vitalic on good terms, and Thetalic plan is more 285 00:17:58,720 --> 00:18:02,679 Speaker 1: like a stop gap aragement for Ethereum developers as they 286 00:18:02,720 --> 00:18:06,240 Speaker 1: wait for lads more permanent fix to be ready. Why 287 00:18:06,240 --> 00:18:08,399 Speaker 1: it definitely has his own ideas that he wants to 288 00:18:08,400 --> 00:18:11,120 Speaker 1: fully flesh out, whereas I'm more concerned about let's get 289 00:18:11,119 --> 00:18:13,600 Speaker 1: something out there and now because they know people are 290 00:18:14,000 --> 00:18:16,960 Speaker 1: demanding some kind of crocustique to be out there. When 291 00:18:16,960 --> 00:18:21,000 Speaker 1: the talent created Ethereum, in from the very beginning, he 292 00:18:21,080 --> 00:18:24,200 Speaker 1: intended it to be so much more than Bitcoin, so 293 00:18:24,320 --> 00:18:27,520 Speaker 1: much more than a network that powers just another currency. 294 00:18:28,240 --> 00:18:31,720 Speaker 1: Like what all right, you remember crypto Kitties from a 295 00:18:31,760 --> 00:18:35,160 Speaker 1: few weeks ago. That's exactly what happened to the Ethereum 296 00:18:35,200 --> 00:18:39,520 Speaker 1: network this week, an application called crypto Kities clogged the 297 00:18:39,680 --> 00:18:44,520 Speaker 1: entire network. Crypto Kitties is a great example of an 298 00:18:44,560 --> 00:18:51,160 Speaker 1: application that's built on the Ethereum network, and it's a game, right, Yeah. Essentially, 299 00:18:51,760 --> 00:18:55,399 Speaker 1: so you purchased these virtual cats and they have their 300 00:18:55,440 --> 00:18:59,280 Speaker 1: own unique digital DNA. You can breed them, and you 301 00:18:59,320 --> 00:19:01,960 Speaker 1: can collect more war cats and sell those cats to 302 00:19:02,000 --> 00:19:05,240 Speaker 1: other people. It's kind of like Beanie babies, remember, but 303 00:19:05,640 --> 00:19:09,840 Speaker 1: if beanie babies could have their own babies. But it's 304 00:19:09,840 --> 00:19:12,760 Speaker 1: not just that the payments in this game happen in Ether. 305 00:19:13,240 --> 00:19:17,560 Speaker 1: The blockchain technology is keeping a record of the exact 306 00:19:17,720 --> 00:19:21,440 Speaker 1: kind of cats everyone owns. So when it comes time 307 00:19:21,480 --> 00:19:24,800 Speaker 1: to sell your aqua marine kitty, it verifies that you 308 00:19:24,840 --> 00:19:27,760 Speaker 1: actually have an Aqua marine kitty. And I know you 309 00:19:27,840 --> 00:19:30,960 Speaker 1: have one, brat I have two of them, so you know. 310 00:19:31,080 --> 00:19:34,440 Speaker 1: Basically this is all being based on Ethereum, and it 311 00:19:34,520 --> 00:19:36,760 Speaker 1: keeps track of how much Ether is going in and out, 312 00:19:37,160 --> 00:19:39,360 Speaker 1: and cats are why lad has been working so hard 313 00:19:39,359 --> 00:19:42,440 Speaker 1: on this. Let me give you a less weird example. 314 00:19:42,600 --> 00:19:45,040 Speaker 1: So the other week I bought a record on the 315 00:19:45,080 --> 00:19:47,840 Speaker 1: Ethereum blockchain. I had to pay for it with Ether. 316 00:19:48,440 --> 00:19:52,560 Speaker 1: It was about ten bucks, and I spent and I 317 00:19:52,600 --> 00:19:56,000 Speaker 1: went directly to the artists who wrote the music, so 318 00:19:56,160 --> 00:19:59,720 Speaker 1: there was no record company in the middle, no music 319 00:20:00,000 --> 00:20:03,679 Speaker 1: busher taking a cut. My ten bucks was split up 320 00:20:03,720 --> 00:20:06,919 Speaker 1: exactly as the band wanted it to be. So maybe 321 00:20:06,960 --> 00:20:10,160 Speaker 1: five bucks went to the singer, three bucks to the guitarists, 322 00:20:10,400 --> 00:20:14,200 Speaker 1: that kind of thing. So it's cutting out the middleman exactly, 323 00:20:15,160 --> 00:20:18,320 Speaker 1: and it's making it possible to do all of this 324 00:20:18,560 --> 00:20:22,720 Speaker 1: in an automated way. So imagine how it would have 325 00:20:22,840 --> 00:20:26,520 Speaker 1: implications for all these other kinds of services that connect 326 00:20:26,560 --> 00:20:29,800 Speaker 1: people who need each other, like how Uber makes it 327 00:20:29,840 --> 00:20:33,560 Speaker 1: possible for a rider to get a car and a driver, 328 00:20:33,920 --> 00:20:37,399 Speaker 1: or how Airbnb makes it possible for a traveler to 329 00:20:37,440 --> 00:20:40,920 Speaker 1: find a room at someone's apartment. If it's all automated, 330 00:20:41,119 --> 00:20:44,199 Speaker 1: if it's all code, all of these services would be 331 00:20:44,240 --> 00:20:47,919 Speaker 1: a lot cheaper for consumers. There's a picture that I 332 00:20:47,960 --> 00:20:54,080 Speaker 1: love to show people about Apple's evolution because because I'm 333 00:20:54,119 --> 00:21:00,680 Speaker 1: I'm always trying to basically parallel this way. Three point 334 00:21:00,680 --> 00:21:03,840 Speaker 1: oh two Web two point oh. This is Andrew Keys, 335 00:21:04,320 --> 00:21:06,840 Speaker 1: the Ethereum startup guy who I met at the conference. 336 00:21:07,440 --> 00:21:09,760 Speaker 1: He pulled up a chart on his phone that showed 337 00:21:09,760 --> 00:21:12,840 Speaker 1: the growth in the number of iOS apps, and it 338 00:21:12,920 --> 00:21:15,240 Speaker 1: starts out in two thousand seven where there were zero, 339 00:21:15,800 --> 00:21:17,560 Speaker 1: and then in two thousand and eight there were hundred. 340 00:21:17,600 --> 00:21:21,640 Speaker 1: Then there were a thousand up to two eighteen, where 341 00:21:21,680 --> 00:21:24,000 Speaker 1: they were a billion. So Andrew thinks there will be 342 00:21:24,000 --> 00:21:28,280 Speaker 1: a lot more Crypto Kitties in the future. Yeah, but 343 00:21:28,520 --> 00:21:31,639 Speaker 1: only if the Ethereum network gets the upgrade it needs, 344 00:21:32,280 --> 00:21:35,639 Speaker 1: the kind of upgrade that lads working on. When people 345 00:21:35,720 --> 00:21:39,160 Speaker 1: rushed into the Crypto Kitties game, those Crypto Kitty users 346 00:21:39,280 --> 00:21:43,600 Speaker 1: made up of all Ethereum transactions. And that's all for 347 00:21:43,680 --> 00:21:48,480 Speaker 1: a relatively simple game about collectible cats. Yeah, so imagine 348 00:21:48,520 --> 00:21:50,120 Speaker 1: how much worse it would be to run a huge, 349 00:21:50,200 --> 00:21:56,200 Speaker 1: complicated business like Uber or eBay on Ethereum. Okay, so 350 00:21:56,280 --> 00:21:58,879 Speaker 1: the Ethereum developers have some big dreams for where this 351 00:21:58,960 --> 00:22:01,840 Speaker 1: technology could go, but they can't do any of it 352 00:22:01,920 --> 00:22:04,840 Speaker 1: unless they can increase the number of transactions happening at 353 00:22:04,840 --> 00:22:07,800 Speaker 1: a time, and that means it's all up to Casper. 354 00:22:07,960 --> 00:22:10,920 Speaker 1: So what's the timeline for its rollout? I asked Metalic 355 00:22:11,000 --> 00:22:14,560 Speaker 1: about this uh and his temporary kind of stop gap measure, 356 00:22:15,160 --> 00:22:16,879 Speaker 1: and he said he was aiming for the end of 357 00:22:16,920 --> 00:22:19,880 Speaker 1: the year. This was in early November and there aren't 358 00:22:19,920 --> 00:22:22,320 Speaker 1: many days left in the year. And I haven't heard 359 00:22:22,320 --> 00:22:25,440 Speaker 1: anything yet about it being rolled out. And what about 360 00:22:25,520 --> 00:22:29,960 Speaker 1: Vlad and his big overhaul, so he said was very likely, 361 00:22:30,200 --> 00:22:32,600 Speaker 1: though he doesn't have a hard deadline at this point. 362 00:22:33,600 --> 00:22:36,240 Speaker 1: I see, but once Casper has been rolled out, can 363 00:22:36,320 --> 00:22:40,399 Speaker 1: we expect Ethereum to start really going mainstream. That's certainly 364 00:22:40,400 --> 00:22:43,520 Speaker 1: the hope, although Vlad was cautious when I asked him 365 00:22:43,560 --> 00:22:46,040 Speaker 1: that same question about how long it would take to 366 00:22:46,080 --> 00:22:49,760 Speaker 1: bring Ethereum to the masses. He said, you know, even 367 00:22:49,840 --> 00:22:53,320 Speaker 1: beyond Casper, Ethereum developers still have a lot more work 368 00:22:53,359 --> 00:23:05,879 Speaker 1: to do. And that's it for this week's episode of Decrypted. 369 00:23:06,040 --> 00:23:08,679 Speaker 1: Thanks for listening. Hey, do you use Ethereum and have 370 00:23:08,720 --> 00:23:11,639 Speaker 1: a story to share, Send us an email at Decrypted 371 00:23:11,800 --> 00:23:14,879 Speaker 1: at Bloomberg dot net, or you can reach out to 372 00:23:14,960 --> 00:23:19,120 Speaker 1: us on Twitter. I'm at Matt Licening and I'm at 373 00:23:19,160 --> 00:23:22,400 Speaker 1: brad Stone. If you haven't already, please subscribe to our 374 00:23:22,400 --> 00:23:25,280 Speaker 1: show wherever you get your podcasts, and while you're there, 375 00:23:25,400 --> 00:23:27,040 Speaker 1: I hope you'll take a minute to leave us a 376 00:23:27,119 --> 00:23:29,680 Speaker 1: rating and a review. It does so much to get 377 00:23:29,720 --> 00:23:32,800 Speaker 1: us in front of more listeners. This episode was produced 378 00:23:32,800 --> 00:23:38,040 Speaker 1: by Pierre Gadkari, Liz Smith, and Magnus Henrikson. Fancesca Levi 379 00:23:38,320 --> 00:23:41,840 Speaker 1: is the head of Bloomberg Podcasts. We'll see you next week.