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Speaker 1: The coin Bureau podcast is a production of I Heart Radio.

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Speaker 1: So what these non fungible tokens basically are is their

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Speaker 1: tokens that record ownership on a blockchain of the asset

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Speaker 1: that they represent. Welcome everyone to the coin Bureau Podcast.

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Speaker 1: His name Mad, Mike Merchant, and my name Guy. Welcome.

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Speaker 1: This is the second part of our Ethereum podcast. And

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Speaker 1: last time we saw we took We took it up

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Speaker 1: to Ethereum's emergence into the world years after Vitalic Puterin

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Speaker 1: came up with the idea, and we looked at all

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Speaker 1: the all the dramas that happened amongst the team as

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Speaker 1: they were trying to get it ready, and we also

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Speaker 1: just explained a little bit about what ethereum is and

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Speaker 1: why it's, why it's so cool, and what it does

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Speaker 1: and what it's place in the crypto versus. So today

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Speaker 1: I thought we'd also talk we'd go on to talk

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Speaker 1: about a bit more of its history, take it sort

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Speaker 1: of bring it sort of closer up to where we

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Speaker 1: are now. And I also thought we should just talk

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Speaker 1: about some of the things that Ethereum actually lets us do.

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Speaker 1: We talked about what it is last time, but now

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Speaker 1: I think we need to look at some of the

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Speaker 1: things that Ethereum makes possible, and this will and this

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Speaker 1: will sort of enable us to kind of branch off

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Speaker 1: into future episodes at some point. Okay, and yeah, it'll

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Speaker 1: it'll show us exactly why Ethereum is such a big deal. Okay,

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Speaker 1: So do you remember last time we talked about Ethereum

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Speaker 1: as a base layer if you like, for developers to

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Speaker 1: build these decentralized applications on top of you, like an

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Speaker 1: operating system. Yeah, these DAPs. So it's fair to say

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Speaker 1: I think that developers took this opportunity up pretty eagerly.

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Speaker 1: And there are now thousands of depths and most of them,

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Speaker 1: the last majority of them, run on Ethereum. A lot

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Speaker 1: of them run on other platforms, and there are lots

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Speaker 1: of Ethereum rivals that have sprung up we'll talk about

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Speaker 1: briefly in a moment or so. But if you look

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Speaker 1: at some of the sites that track these things, there's

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Speaker 1: sites like dap Radar is a good one. You'll see

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Speaker 1: that virtually every DAP runs on Ethereum, and maybe some

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Speaker 1: others as well. But if it it's very unusual for

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Speaker 1: adapt not to run on Ethereum. So one of the

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Speaker 1: reasons that Ethereum has been so successful, one of the

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Speaker 1: reasons why you've got so many adapts running on it

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Speaker 1: is what we call network effects. And this is the

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Speaker 1: same thing that you see with something like Facebook. Basically

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Speaker 1: Ethereum kind of got their first Ethereum is is the

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Speaker 1: leader of the pack, and as I say, it's the

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Speaker 1: same with Facebook and social media. Do you remember when

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Speaker 1: Facebook came out, there were kind of a few other

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Speaker 1: social media platforms around. There were high five Friends Reunited,

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Speaker 1: but Facebook is very much is the only one that

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Speaker 1: really survived. My Space did survive. But I mean, does

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Speaker 1: anyone use it exactly? I think, yeah, it makes my point?

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Speaker 1: Did you care um? Yes? So these network effects are

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Speaker 1: this is a this is something that we encounter quite frequently.

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Speaker 1: Basically because Ethereum is the most popular crypto ecosystem, if

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Speaker 1: you like, the most popular layer one. As we say,

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Speaker 1: that means it's able to keep hold of that market

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Speaker 1: share because building on another layer one, building on an

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Speaker 1: Ethereum rival and not ethereum is, is not going to

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Speaker 1: get you the same sort of exposure. Because ethereum is

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Speaker 1: already is already the market leader and yes. So in

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Speaker 1: the last few years, we've seen lots of other smart

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Speaker 1: contracts blockchains emerged to challenge Ethereum, and the most the

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Speaker 1: most well known are things like Cardano, which was founded

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Speaker 1: by Charles Hoskinson, who you'll remember from the last episode

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Speaker 1: was Ethereum CEO for a brief period of time before

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Speaker 1: he was kind of unceremoniously thrown out. Yeah, and you

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Speaker 1: also have the likes of Avalanche and Salana and plenty

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Speaker 1: of others as well. Silana, the Monera's Monera. I was

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Speaker 1: wondering what you meant there, Yeah, talking about the one

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Speaker 1: where the privacy cotton. Yeah, No, Slana is Slana is

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Speaker 1: another smart contract blockchain similar to Ethereum, but a lot

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Speaker 1: lot faster. And yeah, we'll have to talk about that,

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Speaker 1: but I think we'll do a whole episode on on

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Speaker 1: these other labels at some point. Um and these DAPs

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Speaker 1: that are built on top of Ethereum, they can do

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Speaker 1: all sorts of things. They're they're for all sorts of field.

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Speaker 1: There are gaming DAPs, there are adapts for finance gambling.

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Speaker 1: There are exchanges, crypto exchanges. There are marketplaces, there are

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Speaker 1: social networks. There are places where you can buy sort

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Speaker 1: of digital collectibles and things like that. There's a huge range, yeah, yeah,

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Speaker 1: which come to in a moment, And so much of

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Speaker 1: what happens now in crypto is kind of centered around

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Speaker 1: Ethereum or developed because of it. It lead the way

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Speaker 1: and three. Four of the things that I want to

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Speaker 1: look at that Ethereum has kind of made possible today

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Speaker 1: are tokens, stable coins, n f t s as you

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Speaker 1: just mentioned, and decentralized finance. So these are these are

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Speaker 1: all terms that you'll you'll have heard a lot, but yeah,

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Speaker 1: Ethereum was Ethereum was the platform that made so many

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Speaker 1: of these possible in the first place. So let's start

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Speaker 1: by talking about tokens. Okay. As we'll see later on,

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Speaker 1: Ethereum is responsible for the explosion in the number of

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Speaker 1: new cryptocurrencies that kind of appeared from about two thousands

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Speaker 1: and sixteen onwards. You remember a couple of episodes ago

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Speaker 1: we talked about all coins, and all of those were

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Speaker 1: sort of built using their own blockchains. Most of them

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Speaker 1: were kind of variations on the theme of Bitcoin. They

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Speaker 1: took bitcoins software and kind of forked it and and

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Speaker 1: made their own not in that way. But yeah, as

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Speaker 1: as I think we touched upon, it's expensive to build

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Speaker 1: your own blockchain, to get your own blockchain project off

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Speaker 1: the ground. And what Ethereum did was make it possible

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Speaker 1: to build cryptocurrencies on top of its blockchain instead. And

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Speaker 1: these are what's known as tokens, and the ability of

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Speaker 1: developers to build dapts with native tokens on top of Ethereum.

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Speaker 1: It paved the way for an entirely new form of crowdfunding.

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Speaker 1: It opened up the i c O or the initial

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Speaker 1: coin offering. Have you heard that term. Yeah, So i

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Speaker 1: c o s take their lead from I p o s,

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Speaker 1: which in traditional finances and initial public offering. So this

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Speaker 1: is where shares in the company are obviously offered to

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Speaker 1: the public for the first time. They go on general sale,

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Speaker 1: and everyone, you know, every man and his dog, can

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Speaker 1: can ape in and and by as many as they like.

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Speaker 1: And this is basically what initial coin offerings did, but

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Speaker 1: on Ethereum instead. And as we'll see, we won't get

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Speaker 1: to it in this episode, but as we'll see in

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Speaker 1: the next episode, when this really started to kick off,

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Speaker 1: it just got absolutely crazy the amount of money that

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Speaker 1: was pouring into these these initial coin offerings, these and

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Speaker 1: I can't remember if we've touched on this in a

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Speaker 1: previous episode, but it's important to draw a distinction at

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Speaker 1: this point between a token and a coin. Yeah, we have,

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Speaker 1: I think, And it's like a token is something built

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Speaker 1: off a different cryptocurrency. Yeah, you're yeah, you're on the right. Check. Yeah,

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Speaker 1: a token is something that's built on that doesn't live

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Speaker 1: on its own blockchain. Yes, that's what was so. Yeah,

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Speaker 1: anything built on top of that, you've got that, all right,

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Speaker 1: I'll give that to you. Make a note there. Yeah, Yeah,

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Speaker 1: a token is built on top of it is hosted

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Speaker 1: on another blockchain, if you like, whereas a coin is

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Speaker 1: lives on its own blockchain. So Bitcoin and BTC and

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Speaker 1: E are both coins because they live on the Bitcoin

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Speaker 1: and the Ethereum blockchains, respectively. But there are others, as

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Speaker 1: we'll see, that are tokens. So shiba Inu, for instance,

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Speaker 1: is a token because it's actually built so and as

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Speaker 1: I said, yeah, before Ethereum, if you wanted to issue

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Speaker 1: your own crypto, you'd have to build a blockchain for

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Speaker 1: it to run on as and as we've seen, that's

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Speaker 1: hard to do and expensive. But Ethereum and launching it

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Speaker 1: is tricky as well, yeah, yeah, whereas launching a token

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Speaker 1: on ethereum, it really apparently couldn't be couldn't be easier? Yeah,

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Speaker 1: I um, I I wanted to kind of look into

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Speaker 1: this to just see how difficult it was to do.

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Speaker 1: And I mean, really, all you need to launch a

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Speaker 1: token on ethereum is an idea and apparently some fairly

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Speaker 1: basic coding skills and boiled again the barries are entered

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Speaker 1: too high. It was at that point that I would

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Speaker 1: there goes, there goes the great token that's not happening.

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Speaker 1: Then I know someone who's involved in mine coin. Really, okay,

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Speaker 1: do I dare? I? Well, I mean we obviously can

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Speaker 1: guess what that's about. But no, no, I just think

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Speaker 1: it's just a stupid I think it's a complete joke coin, right, Okay,

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Speaker 1: they're not, they're not. They're not even pretending to do

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Speaker 1: anything serious. It's called mine coin, mate, what do you think? Well,

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Speaker 1: there are plenty of silly, silly named coins. Okay, I

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Speaker 1: know the guy who's involved in it. What do you

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Speaker 1: think that's the other qualifier? There's not a serious course, yes,

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Speaker 1: but I know him. So therefore four rods fair enough,

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Speaker 1: fair enough? And yeah, this predictably has led to some

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Speaker 1: crazy scam token projects being created, but also plenty of

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Speaker 1: legit ones too, it's worth pointing out. And if you

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Speaker 1: look at the top one cryptos by market cap now,

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Speaker 1: a fair proportion of them are are tokens built on

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Speaker 1: Ethereum and and elsewhere, but mostly onnes the arium. So

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Speaker 1: there are plenty of really legit token projects out there

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Speaker 1: which will see shortly. And as I said, we'll look

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Speaker 1: more into the token explosion later on, but it does

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Speaker 1: lead us kind of nicely, this idea of tokens to

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Speaker 1: one of the most important types of individual token to

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Speaker 1: emerge on ethereum. And these are stable coins. And now

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Speaker 1: you've have you heard of these? You must have come across. Yeah,

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Speaker 1: so if you look at that top no, I would

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Speaker 1: have believed just like I might ask me about one

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Speaker 1: now yeah, okay, so so no, all right, So if

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Speaker 1: you take a look at that top at that list

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Speaker 1: of top one cryptos by market cap, you'll notice straight

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Speaker 1: away that a few of them cost exactly one dollar

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Speaker 1: or thereabouts. And I think actually the third one, which

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Speaker 1: is called you you know what, I do know what

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Speaker 1: you're talking about because they track the price of the

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Speaker 1: dollar exactly another one market down on your magic a

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Speaker 1: bit there. I mean, that's half because you I had

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Speaker 1: to prompt you. So so yeah, these are These are

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Speaker 1: stable coins, and the two biggest are U s DT,

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Speaker 1: which is issued by a company called Tether, and U

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Speaker 1: s d C, which is issued by a company called Circle.

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Speaker 1: Now these are both cryptocurrencies. They're both tokens that run

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Speaker 1: on Ethereum and on other blockchains as well, and their

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Speaker 1: price is pegged to the US dollar. Now, there are

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Speaker 1: stable coins for other national currencies, but none of them

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Speaker 1: have any sort of particularly big market cap. It's it's

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Speaker 1: always at the moment, it's really just dollar dollar pegged

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Speaker 1: stable coins that are the big deal here, and the

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Speaker 1: crypto markets are are always denominated in dollars. Now, these

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Speaker 1: these stable coins have become a really fundamental part of

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Speaker 1: the whole crypto space, and the total market cap of

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Speaker 1: all of them is in the hundreds of billions of dollars.

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Speaker 1: They are huge, and they're a relatively new phenomenon. They've

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Speaker 1: only kind of come into their own in the last

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Speaker 1: sort of two or three years. So just consider for

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Speaker 1: a moment how useful they are. So let's say you

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Speaker 1: hold some BTC. You hold some Bitcoin and you see

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Speaker 1: that the price goes up, maybe it pumps massively overnight,

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Speaker 1: and you decide to sell some, but you want to

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Speaker 1: keep hold of the proceeds. You don't want to change

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Speaker 1: them back into fear do. You want to kind of

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Speaker 1: keep them handy. But you also don't want to hold

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Speaker 1: them in another crypto which may kind of lose its value.

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Speaker 1: So this is where stable coins really become useful, because

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Speaker 1: you can you can sell that crypto, you can sell

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Speaker 1: it into something like USDT or USDC, hold it in

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Speaker 1: that holds its dollar value, and then you can decide

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Speaker 1: to kind of re enter the market at at a

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Speaker 1: more competitive price point of view. Look, yeah, and these

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Speaker 1: have become really really useful. And I think anyone holding

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Speaker 1: a well balanced crypto portfolio, not you, of course, but

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Speaker 1: anyone sensible holding a well balanced crypto portfolio is advised

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Speaker 1: to keep a certain a certain dollar value kind of

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Speaker 1: parked in a stable coin. I call it dry powder.

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Speaker 1: And what that means is you just have some what

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Speaker 1: are you insinuating? And what that means is that you

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Speaker 1: just have some you know, you have some crypto standing

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Speaker 1: on the sidelines that you can easily convert that you

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Speaker 1: can easily use to buy another more volatile crypto at

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Speaker 1: a at a more competitive price. And they're responsible for

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Speaker 1: these stable coins, are responsible for huge amounts of the

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Speaker 1: liquidity in the whole in the whole crypto market at

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Speaker 1: the moment. They are they are a fundamental part of it,

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Speaker 1: and they are quite controversial, and the main reason for

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Speaker 1: this is that there's a lot of concern around the

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Speaker 1: assets that actually back them, because what these companies like

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Speaker 1: Tether and Circle have done basically created yeah they have Yeah,

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Speaker 1: And Tether is particularly controversial because it's a bit of

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Speaker 1: a shady it's a bit of a shady company. You

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Speaker 1: know that they're not regulators authorities. Well, we in general

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Speaker 1: don't know as much about it as perhaps we should,

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Speaker 1: considering it's it's the largest stable coin issuer at the moment,

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Speaker 1: and there's a lot of concern over what assets it

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Speaker 1: holds to back all these stable coins, because these stable coins,

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Speaker 1: by law, they have to be um, they have to

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Speaker 1: be collateralized. There has to be something behind them. And

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Speaker 1: lots of these stable coin companies have submitted to audits

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Speaker 1: in the not too in the not too distant past,

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Speaker 1: and that means that another company is some other body

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Speaker 1: has come in and actually checked what assets they're holding

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Speaker 1: to collateralize these coins and things I and both Tether

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Speaker 1: and Circle and other stable coin issues. Pack SAUS is

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Speaker 1: another big one. Um A lot of the is actually

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Speaker 1: is backed by actual cash. All three companies do hold

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Speaker 1: a certain amount of US dollars, but they also hold

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Speaker 1: a number of other assets backing these stable coins as well.

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Speaker 1: And some of these assets are a little murky things

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Speaker 1: like US Yes, but US government debt, which is generally

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Speaker 1: perceived to be quite safe. US treasuries, they're called, and

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Speaker 1: this is the US treasuries are genuine generally generally perceived

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Speaker 1: as as a fairly kind of safe haven asset. But

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Speaker 1: Tether in particular is thought to hold a lot of

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Speaker 1: commercial debt, which is a lot more volatile, So there

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Speaker 1: is concern. There is controversy around these stable coins, particularly Tether,

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Speaker 1: but particularly U s DT, but others as well, and

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Speaker 1: it's become stable coins are talked about more and more

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Speaker 1: by regulators as this they're kind of starting to spring

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Speaker 1: up in a lot of places as this sort of

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Speaker 1: alternative source of money because they're you know, because obviously

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Speaker 1: they hold the dollar value, and there's lots of liquidity

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Speaker 1: in them. It's easy to kind of move them around.

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Speaker 1: People don't huddle them like they would things like bitcoin

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Speaker 1: and stuff like that. So yeah, they're responsible for all

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Speaker 1: this liquidity and hence pretty controversial. But we'll look at

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Speaker 1: stable coins in more detail in another episode. So the

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Speaker 1: next category of digital asset, if you like that the

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Speaker 1: etheroryum makes possible, is n f T S. You're you're

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Speaker 1: you're kind of familiar with n f T you' I

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Speaker 1: am aware of the hype. Yeah, I am interested, but

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Speaker 1: not interested enough to read anything about it, Okay, which

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Speaker 1: is which is presumably why I'm here. Yeah, okay, I'm

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Speaker 1: going to tell you all about it. Wonderful. Okay, Now, again,

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Speaker 1: this n f T S are a real rabbit hole,

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Speaker 1: So I'm just going to give you the kind of

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Speaker 1: elevator pitch for the time being, and again we'll we'll

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Speaker 1: delve into it in more detail. Data. N f T

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Speaker 1: stands forward you know, non fungible token. Okay, that's there's

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Speaker 1: a mark in the book. Yeah, non fungible token. Now,

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Speaker 1: fungible a bit of an odd word. It basically means comfortable, Yeah, interchangeable,

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Speaker 1: so if you have if you have a pound coin

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Speaker 1: in your pocket, and I have a pound coin in

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Speaker 1: mind pocket, they're fungible. That each one is worth exactly

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Speaker 1: the same as the other. And this is a really

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Speaker 1: important thing that underpins any any strong monetary system. The

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Speaker 1: units of that the units of money have to be fungible.

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Speaker 1: It's you can't have you know, you can't have a

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Speaker 1: certain dollars that are worth more than other dollars. That

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Speaker 1: would that would be nonsense. You do technically though, how's that?

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Speaker 1: So you get the rare dollar coins? Yes, yes, I suppose, yeah,

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Speaker 1: that that that they have value more in a more

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Speaker 1: as a kind of collector's item, more as an actual

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Speaker 1: kind of physical asset. Yeah, I suppose if the actual

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Speaker 1: monetary value of that dollar is the same, but some

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Speaker 1: people are willing to pay more because it was rare

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Speaker 1: one sort minted in this period of time or whatever. Yeah,

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Speaker 1: quite often, I know the Royal mint here in here

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Speaker 1: in Britain, they occasionally issue commemorative coins. And as far

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Speaker 1: as I'm aware, you can't go into a shop and

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Speaker 1: say this is a commemorative can No, you can't go

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Speaker 1: into a shop. But some people will pay more for it. Yeah,

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Speaker 1: is that not the same as an n f T

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Speaker 1: M No, No, not really not kind yeah, yeah, but yes,

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Speaker 1: certainly the idea of something being collectible an individual thing,

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Speaker 1: that's that's kind of related to the n f T,

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Speaker 1: to the n f T sector in a way. But so,

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Speaker 1: what these non fungible tokens basically are is their tokens

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Speaker 1: that record ownership on a blockchain of the asset that

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Speaker 1: they represent. Does that make sense? Yes, okay, So for instance,

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Speaker 1: you could create, you might could create a digital image,

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Speaker 1: you could turn that into an n f T, you

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Speaker 1: could mint an n f T of that image, and

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Speaker 1: you could sell it. Now, owning the n f T

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Speaker 1: of that image means that you own the image, and

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Speaker 1: your ownership of it is recorded permanently and verifiably on

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Speaker 1: the blockchain. And those two words are important. Permanently obviously

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Speaker 1: that we know that that you can't go back and

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Speaker 1: alter what's what's stored on a blockchain. They're they're immutable

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Speaker 1: and verifiably because it's perfectly easy to check a blockchain

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Speaker 1: for the relevant information. Yeah, now you can copy this image. Okay.

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Speaker 1: This is something that people that this is a problem

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Speaker 1: that a lot of people have with n f T

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Speaker 1: s it said, well, it's an image, I can okay,

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Speaker 1: it's a digital image. I can copy it, and yes

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Speaker 1: you can, unfortunately with that image that you've just shown me.

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Speaker 1: But what the n f T does is still it

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Speaker 1: still denotes ownership of the image. Even though it can

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Speaker 1: be copied, only the holder of the n f T

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Speaker 1: can actually own it. Okay. Now, I suppose a good

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Speaker 1: example of this is is the idea of a famous painting.

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Speaker 1: Let's say the Mona Lisa's one. Yeah, that's one we

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Speaker 1: always used versus a reproduction. Now you could owning the original,

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Speaker 1: the actual Mona Lisa. No, I mean, no one can

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Speaker 1: afford that. It's it's priceless, but you could have I mean,

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Speaker 1: there are the image of the Mona Lisa itself has

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Speaker 1: been reproduced countless times. Everyone knows what it looks like,

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Speaker 1: and you can quite easily buy a buy a copy

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Speaker 1: of that image and hang it on your wall. And

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Speaker 1: if you wanted to go a step further, you could

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Speaker 1: you could pretty easily have a reproduction of the painting made.

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Speaker 1: And you know, a good a good art forger if

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Speaker 1: you like, or a good artist would be able to

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Speaker 1: make a reproduction that I think a lot of people

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Speaker 1: unless they were unless they really knew their stuff, probably

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Speaker 1: wouldn't be able to tell the difference. So but still

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Speaker 1: owning one of these reproductions is the reproductions themselves are

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Speaker 1: kind of worthless. It's the original that has the value,

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Speaker 1: even though anyone can kind of own a copy of it.

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Speaker 1: Do you see what I mean? So this idea of

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Speaker 1: this idea of owning the original, even if it's a

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Speaker 1: digital image that can be easily copied, owning the original

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Speaker 1: is still a big, big deal. Yeah, it's the it's yeah,

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Speaker 1: it's the that's the magic to it. So it's kind

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Speaker 1: of like when when someone if you've got if you've

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Speaker 1: got tickets to the World Cup, Yeah, the world and

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Speaker 1: you know, and it's kind of a weird sentimental value.

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Speaker 1: Those ticket stubs are worthless, but there's a resale market

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Speaker 1: for it. Yeah, you know, people will buy memorable commemorative

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Speaker 1: stuff because it is signed by David Bowie. It's just

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Speaker 1: a bit of ink on something, but because it's an original,

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Speaker 1: it's signature autograph. Yeah, exactly, it's it's now worth that

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Speaker 1: bit of paper is now worth fifty quid or whatever.

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Speaker 1: It's a collectible. And yeah, the collectibles market is a

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Speaker 1: big thing for n f T s because what n

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Speaker 1: f T s have made it possible to do is

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Speaker 1: issue digital collectibles. So you can now do you did

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Speaker 1: you have a collect football cards at school? The Panini stickers? Yeah,

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Speaker 1: it's the same thing, but it enables it to be

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Speaker 1: done digitally. But because you hold it as an n

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Speaker 1: f T you can be sure that it has a

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Speaker 1: certain rarity value because you'll you'll be able to see

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Speaker 1: when you when you go on the n f T

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Speaker 1: marketplace in question that you buy it from, you'll be

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Speaker 1: able to check how many of that particular card, that

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Speaker 1: particular digital card have been issued, so you can keep

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Speaker 1: that kind of that structure of value by some some

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Speaker 1: some collectibles are quite common, and then you have it

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Speaker 1: gets increasingly rare and Pokemon like Pokemon. Yeah, and what

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Speaker 1: n f T s, as I say, what n f

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Speaker 1: T is allowed it allowed to happen is for these

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Speaker 1: for these cards, for the trading and holding and collecting

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Speaker 1: of these cards and other lectables, enables it to be

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Speaker 1: done digitally instead, so you don't necessarily need hard copies.

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Speaker 1: And it's important to note that n f T s

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Speaker 1: go a whole lot deeper than just digital art, than

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Speaker 1: just owning an image or or or a collectible anything

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Speaker 1: like that. They can be that they have applications in music,

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Speaker 1: so you can issue albums as n f T s.

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Speaker 1: UH event tickets site you talked about, and this is

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Speaker 1: something that's becoming more and more common. Tickets being issued

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Speaker 1: as n f T s and you can build utility

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Speaker 1: into them, so you could buy maybe let's say you

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Speaker 1: were going to a basketball game. Perhaps a fifty dollar

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Speaker 1: ticket is one that would get you a seat sort

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Speaker 1: of fairly high up um. But if you bought a

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Speaker 1: one dollar n f T, or let's say you bought

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Speaker 1: a thousand dollar ticket as an n f T, the

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Speaker 1: n f T could be structured to allow you like

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Speaker 1: you'd get maybe court side seats and maybe be able

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Speaker 1: to structure in something whereby you met the team afterwards

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Speaker 1: or something like that. That the utility that can be

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Speaker 1: built into a f T S is kind of unlimited

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Speaker 1: when it's what people can come who builds these because

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Speaker 1: this adapt Yeah, they can be that. It's quite easy

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Speaker 1: to mint an n f T online, but on their

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Speaker 1: different minting platforms platforms, Yeah, there are different Yeah, you

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Speaker 1: can use places like that. There are things like open c.

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Speaker 1: There are different yeah, different platforms. There's open se adapt,

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Speaker 1: open c is adapt yeah, yeah, yeah, and there are

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Speaker 1: there are there are other kind of there are other

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Speaker 1: kind of companies as well, other crypto projects if you

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Speaker 1: like that. There's issue n f t s too, And yeah,

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Speaker 1: how easy would it be for me to make some

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Speaker 1: event tickets on be fairly easy? Yeah, I think, Yeah,

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Speaker 1: I could show you. I think you could be you

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Speaker 1: could do it on you could do it on open

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Speaker 1: c or a similar platform, fairly easily, I think. And yeah,

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Speaker 1: it's like I say, it's becoming it's becoming more and more.

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Speaker 1: These n f t s are kind of growing in

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Speaker 1: pop ularity, and a lot of people still get kind

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Speaker 1: of heat up about them because they see them as

428
00:25:06,560 --> 00:25:10,240
Speaker 1: just this of just this way of of of marketing

429
00:25:10,320 --> 00:25:14,240
Speaker 1: digital art of owning and selling what they feel worthless

430
00:25:14,400 --> 00:25:17,159
Speaker 1: JPEX and stuff, and and it's yeah, it's really important

431
00:25:17,200 --> 00:25:19,520
Speaker 1: to understand just how much further n f t s,

432
00:25:19,560 --> 00:25:21,040
Speaker 1: how much deeper n f t s go than that.

433
00:25:22,080 --> 00:25:25,520
Speaker 1: Some of them have obviously started selling for crazy amounts

434
00:25:25,560 --> 00:25:27,919
Speaker 1: of money, and this has made them kind of more famous,

435
00:25:28,000 --> 00:25:31,320
Speaker 1: slash notorious and a little bit of history for you.

436
00:25:31,560 --> 00:25:35,760
Speaker 1: The first big n f T collection was issued on Ethereum,

437
00:25:35,960 --> 00:25:38,879
Speaker 1: of all places, and it was called the Crypto Kitties.

438
00:25:38,920 --> 00:25:42,800
Speaker 1: And this was back in seventeen and this was These

439
00:25:42,840 --> 00:25:48,240
Speaker 1: were basically pictures of digital cats, some which had various

440
00:25:48,320 --> 00:25:51,800
Speaker 1: kind of traits, some rarer than others. And they were

441
00:25:51,880 --> 00:25:55,160
Speaker 1: so popular at the time that the Ethereum blockchain ground

442
00:25:55,200 --> 00:25:58,440
Speaker 1: to a halt of all the demand. Yeah, it was

443
00:25:58,480 --> 00:26:00,879
Speaker 1: absolutely crazy. People were going nuts for the And I

444
00:26:01,000 --> 00:26:03,320
Speaker 1: remember this quite well. I remember the Crypto Kitties coming

445
00:26:03,359 --> 00:26:06,720
Speaker 1: out and it took me a while to kind of

446
00:26:07,080 --> 00:26:09,119
Speaker 1: get my head around them, as that, why are people

447
00:26:09,200 --> 00:26:13,879
Speaker 1: attaching so much value to these? I don't understand and

448
00:26:14,560 --> 00:26:17,560
Speaker 1: if and and they were pretty crazy, but the n

449
00:26:17,640 --> 00:26:20,639
Speaker 1: f T sector has become ten times crazier than that

450
00:26:20,760 --> 00:26:23,879
Speaker 1: ever since. So as I say, we'll tackle n f

451
00:26:23,960 --> 00:26:26,000
Speaker 1: T s in depth in the later episode, but there

452
00:26:26,080 --> 00:26:29,399
Speaker 1: are really fascinating and another like stable coins, another very

453
00:26:29,480 --> 00:26:34,640
Speaker 1: controversial facet of crypto, and I think it's worth pointing out.

454
00:26:34,800 --> 00:26:36,119
Speaker 1: The last thing I want to say on n f

455
00:26:36,200 --> 00:26:39,600
Speaker 1: T s is to to kind of get on board

456
00:26:39,640 --> 00:26:44,200
Speaker 1: with this idea of holding a digital asset. I think

457
00:26:44,240 --> 00:26:47,159
Speaker 1: for a lot of people, they just don't get it.

458
00:26:48,280 --> 00:26:50,440
Speaker 1: Why why would you attach any value to it? And

459
00:26:50,520 --> 00:26:52,720
Speaker 1: I think one thing to be aware of is just

460
00:26:52,880 --> 00:26:56,280
Speaker 1: how much of our lives are now digital, are now

461
00:26:56,560 --> 00:27:00,760
Speaker 1: spent online, whether we're whether we're kind of glued to

462
00:27:00,800 --> 00:27:03,000
Speaker 1: our computers at work all day, or whether we're on

463
00:27:03,080 --> 00:27:05,600
Speaker 1: our smartphone or you know, whether we're on social media

464
00:27:05,680 --> 00:27:08,679
Speaker 1: or wherever it is. We are living in in an

465
00:27:08,760 --> 00:27:11,560
Speaker 1: increasingly digitized world. And I kind of see this as

466
00:27:11,600 --> 00:27:15,840
Speaker 1: almost a kind of fourth dimension that's opened up, and

467
00:27:16,480 --> 00:27:21,440
Speaker 1: people wants ways of of of of holding value in

468
00:27:21,480 --> 00:27:24,480
Speaker 1: that world, of transacting in that world. And obviously that's

469
00:27:24,520 --> 00:27:28,360
Speaker 1: one of the things that bitcoin in the beginning made possible.

470
00:27:28,800 --> 00:27:31,240
Speaker 1: But I think it's if you're having if you're having

471
00:27:31,440 --> 00:27:33,960
Speaker 1: trouble wrapping your head around the idea of why someone

472
00:27:34,040 --> 00:27:36,600
Speaker 1: would be willing to pay so much money, why someone

473
00:27:36,640 --> 00:27:41,000
Speaker 1: would attach so much value to owning a digital image,

474
00:27:41,040 --> 00:27:44,080
Speaker 1: a digital file. It's the same concept as why everyone

475
00:27:44,200 --> 00:27:48,880
Speaker 1: was so obsessed about owning the original Mona Lisa. Yeah,

476
00:27:48,960 --> 00:27:51,680
Speaker 1: it's yeah, it's exactly. It is really pointless if you

477
00:27:51,760 --> 00:27:56,960
Speaker 1: think about it. Yeah, it's like, well, this was you

478
00:27:57,080 --> 00:27:59,359
Speaker 1: know the glove that Michael Jackson wore when he was

479
00:27:59,440 --> 00:28:03,280
Speaker 1: dangling his child off a balcony. It's just a glove.

480
00:28:03,440 --> 00:28:07,480
Speaker 1: It's just a It does nothing. But people stan and

481
00:28:07,560 --> 00:28:10,240
Speaker 1: go crazy for this, And I mean, I remember people

482
00:28:10,320 --> 00:28:12,960
Speaker 1: got very hit up about those about those football stickers,

483
00:28:12,960 --> 00:28:15,399
Speaker 1: about those Pennini sticks. You know, they're they're they're they're different,

484
00:28:16,160 --> 00:28:21,240
Speaker 1: They're very cool. Okay, shall we take a quick break

485
00:28:21,320 --> 00:28:23,920
Speaker 1: and maybe trade some football stickers? How we do it?

486
00:28:24,000 --> 00:28:41,440
Speaker 1: Do you have any Shinese? We are back. I feel

487
00:28:41,480 --> 00:28:43,200
Speaker 1: that you did better out of that football trade off,

488
00:28:43,240 --> 00:28:45,560
Speaker 1: that football sticker trade off. Then listen, some of us

489
00:28:46,200 --> 00:28:48,720
Speaker 1: are book smart. Some of us our sticker book smart.

490
00:28:50,080 --> 00:28:52,880
Speaker 1: We've talked about two of these, two of these things

491
00:28:52,920 --> 00:28:55,080
Speaker 1: that Ethereum makes possible. We've talked about stable coins, and

492
00:28:55,080 --> 00:28:58,080
Speaker 1: we've talked about n f t s. It's now time

493
00:28:58,120 --> 00:29:03,000
Speaker 1: to talk about decentralized fine or defy. Have you heard

494
00:29:03,040 --> 00:29:06,520
Speaker 1: of are you you're familiar with the term defy? Okay,

495
00:29:07,240 --> 00:29:10,240
Speaker 1: well we'll start right from the beginning there. Now, this

496
00:29:10,720 --> 00:29:14,440
Speaker 1: is another a huge sector of crypto that's kind of

497
00:29:15,040 --> 00:29:18,480
Speaker 1: it's quickly evolving into its own kind of separate industry.

498
00:29:19,000 --> 00:29:21,040
Speaker 1: A lot of people who are who are really into

499
00:29:21,120 --> 00:29:24,760
Speaker 1: defy kind of argue that crypto and defy should be,

500
00:29:25,040 --> 00:29:28,200
Speaker 1: you know, should be considered kind of almost separate entities

501
00:29:28,240 --> 00:29:31,320
Speaker 1: in a way. It's it's a really quickly growing sector.

502
00:29:32,200 --> 00:29:36,720
Speaker 1: So basically defy is it's kind of difficult to sum

503
00:29:36,840 --> 00:29:39,720
Speaker 1: it up in in one sentence, but it's basically a

504
00:29:39,800 --> 00:29:44,280
Speaker 1: whole load of financial services being offered by blockchain based

505
00:29:44,320 --> 00:29:48,880
Speaker 1: platforms that remove middlemen from the process. And as we've

506
00:29:48,880 --> 00:29:51,800
Speaker 1: seen time and again, middlemen means kind of banks and

507
00:29:52,800 --> 00:29:57,600
Speaker 1: payment processes and you know, these other interested parties. So

508
00:29:57,760 --> 00:30:00,440
Speaker 1: what it what defy enables us a to do is

509
00:30:00,480 --> 00:30:03,840
Speaker 1: take custody of their funds and allocate them directly to

510
00:30:04,000 --> 00:30:08,960
Speaker 1: whichever protocol they see fit. And because there are no middlemen,

511
00:30:09,000 --> 00:30:10,640
Speaker 1: because there are no banks or anything in them in

512
00:30:11,360 --> 00:30:15,440
Speaker 1: the middle, this means virtually no fees. Also, no need

513
00:30:15,520 --> 00:30:18,400
Speaker 1: to prove your identity or anything like that. So if

514
00:30:18,440 --> 00:30:23,040
Speaker 1: you have an Internet connection, you can basically access DEFY services.

515
00:30:23,560 --> 00:30:27,840
Speaker 1: So a simple example of a defy service of a

516
00:30:27,880 --> 00:30:33,160
Speaker 1: decentralized finance service is a loans platform. Now, if you

517
00:30:33,200 --> 00:30:36,959
Speaker 1: want to take out a traditional bank loan, you need

518
00:30:37,040 --> 00:30:39,360
Speaker 1: to provide all sorts of information. Don't you need to

519
00:30:39,640 --> 00:30:41,960
Speaker 1: you know, I D proof of address, proof of earnings,

520
00:30:42,040 --> 00:30:44,160
Speaker 1: all this sort of stuff. It can be a pretty

521
00:30:44,320 --> 00:30:47,560
Speaker 1: long drawn out process. So I'm told now, what defy

522
00:30:47,680 --> 00:30:50,640
Speaker 1: loans enable you to do. It's pretty much get these

523
00:30:50,720 --> 00:30:54,880
Speaker 1: loans very very quickly without providing any of this information.

524
00:30:56,000 --> 00:30:59,920
Speaker 1: Now do these what the platforms that issue these are

525
00:31:00,240 --> 00:31:04,080
Speaker 1: lending and borrowing protocols, and they enable users to deposit

526
00:31:04,160 --> 00:31:07,840
Speaker 1: cryptocurrency which can then be lent out to others. And

527
00:31:07,960 --> 00:31:11,120
Speaker 1: this is where so let's say you have you have

528
00:31:11,200 --> 00:31:13,160
Speaker 1: a certain amount of eth. Let's say you have a

529
00:31:13,200 --> 00:31:16,600
Speaker 1: certain amount of stable coin just sitting around not doing anything.

530
00:31:16,800 --> 00:31:20,120
Speaker 1: You could deposit that into one of these defy lending

531
00:31:20,160 --> 00:31:23,560
Speaker 1: and borrowing protocols, and what the protocol would then do

532
00:31:24,040 --> 00:31:25,920
Speaker 1: would be to use that and lend it out to

533
00:31:26,000 --> 00:31:31,320
Speaker 1: someone who wanted a loan, and in return, you would

534
00:31:31,600 --> 00:31:34,840
Speaker 1: earn a small amount of the interest on that loan.

535
00:31:35,720 --> 00:31:37,960
Speaker 1: So it makes almost this kind of peer to peer

536
00:31:38,360 --> 00:31:42,440
Speaker 1: lending possible. And you'll know that banks, and I mean

537
00:31:42,720 --> 00:31:46,000
Speaker 1: banks obviously charge a certain amount on on bank loans,

538
00:31:46,200 --> 00:31:49,360
Speaker 1: and there are other much even more unscrupulous operators, and

539
00:31:49,640 --> 00:31:51,440
Speaker 1: I mean some of these payday loans and things like

540
00:31:51,840 --> 00:31:58,640
Speaker 1: just charge the most insane interests percentages on loans, whereas

541
00:31:58,680 --> 00:32:02,920
Speaker 1: defy it's possible to borrow, but at much lower rates.

542
00:32:04,120 --> 00:32:08,080
Speaker 1: And basically a defied protocol it sets the terms of

543
00:32:08,200 --> 00:32:10,680
Speaker 1: the loan and it enforces them. There's no human or

544
00:32:10,720 --> 00:32:12,920
Speaker 1: company in the middle that can interfere, so it's it's

545
00:32:12,960 --> 00:32:16,720
Speaker 1: trust less. So the catch is that if you want

546
00:32:17,200 --> 00:32:21,800
Speaker 1: a defy loan, you have to deposit collateral, and usually

547
00:32:22,440 --> 00:32:26,400
Speaker 1: you have to deposit more collateral than you actually want

548
00:32:26,480 --> 00:32:29,640
Speaker 1: to borrow. So what's the point. Well, yeah, this is

549
00:32:29,800 --> 00:32:32,120
Speaker 1: this is the question. This is the obvious question that

550
00:32:32,280 --> 00:32:36,560
Speaker 1: comes out in that um. And let's say, well, first

551
00:32:36,600 --> 00:32:38,680
Speaker 1: of all, let's say if it just if you don't

552
00:32:38,800 --> 00:32:42,240
Speaker 1: meet your payments, your collateral is basically liquidated. Are you

553
00:32:42,560 --> 00:32:47,280
Speaker 1: sold in order to cover what you owe? Now, let's

554
00:32:47,320 --> 00:32:51,360
Speaker 1: say you have a certain amount of let's say you

555
00:32:51,400 --> 00:32:54,120
Speaker 1: have a certain amount of bitcoin, so you have or

556
00:32:54,280 --> 00:32:55,840
Speaker 1: let's say you have a certain amount of eath. Say

557
00:32:55,880 --> 00:32:58,320
Speaker 1: you have you have maybe ten dollars worth of e

558
00:32:58,960 --> 00:33:00,960
Speaker 1: Now this is your You're going to use this as

559
00:33:01,000 --> 00:33:03,560
Speaker 1: your collateral, but you don't want to actually touch that

560
00:33:03,720 --> 00:33:05,960
Speaker 1: because you think, you believe that ether is going to

561
00:33:06,000 --> 00:33:09,960
Speaker 1: go up in price, but you do need some you

562
00:33:10,040 --> 00:33:11,760
Speaker 1: do need some ready money. Let's say you have a

563
00:33:11,800 --> 00:33:14,720
Speaker 1: bill to pay, You've you've dinged your car and you

564
00:33:15,040 --> 00:33:17,160
Speaker 1: you know you need a few thousand quid or whatever

565
00:33:17,240 --> 00:33:22,440
Speaker 1: to repair it. Or you've spotted you've spotted another crypto

566
00:33:22,560 --> 00:33:25,240
Speaker 1: that you want to invest in, but you don't want

567
00:33:25,280 --> 00:33:28,560
Speaker 1: to lose any of your overall capital, So you can

568
00:33:28,640 --> 00:33:32,640
Speaker 1: deposit some of this into a defied protocol in order

569
00:33:32,800 --> 00:33:36,760
Speaker 1: to borrow against it. Now because your capital is sitting there,

570
00:33:36,840 --> 00:33:39,640
Speaker 1: that means that you have to repay the loan otherwise

571
00:33:40,200 --> 00:33:42,880
Speaker 1: you'll lose your you know, you'll lose your collateral. But

572
00:33:43,120 --> 00:33:45,480
Speaker 1: it does free up some money, but does kind of

573
00:33:45,520 --> 00:33:47,880
Speaker 1: free up some liquidity for you to go and use

574
00:33:47,960 --> 00:33:50,200
Speaker 1: that money elsewhere and then you're able to repay it

575
00:33:50,320 --> 00:33:54,880
Speaker 1: at any So, yeah, it gives it gives people access

576
00:33:55,040 --> 00:33:57,760
Speaker 1: to to kind of ready money, if you like, without

577
00:33:57,880 --> 00:34:02,000
Speaker 1: necessarily having to touch their their nest stag. And so

578
00:34:02,200 --> 00:34:04,400
Speaker 1: this is the way at the moment that kind of

579
00:34:04,480 --> 00:34:09,000
Speaker 1: defy loans work, and there are people are working. People

580
00:34:09,040 --> 00:34:11,600
Speaker 1: in the defy industry are working on ways that you know,

581
00:34:11,680 --> 00:34:14,160
Speaker 1: there must be ways that we can do this without

582
00:34:14,440 --> 00:34:17,600
Speaker 1: someone having to to overcollateralize, as we say, to deposit

583
00:34:17,719 --> 00:34:21,200
Speaker 1: more than they're actually borrowing. So defy, I think, is

584
00:34:21,239 --> 00:34:25,000
Speaker 1: something that's going to evolve massively over the next few years,

585
00:34:25,840 --> 00:34:29,560
Speaker 1: and it's becoming the defy the defy sector itself, it

586
00:34:29,600 --> 00:34:31,680
Speaker 1: goes a lot more, goes a lot further than just loans.

587
00:34:31,719 --> 00:34:34,560
Speaker 1: The whole sector is becoming increasingly more sophisticated and I

588
00:34:34,560 --> 00:34:37,360
Speaker 1: should say increasingly kind of complicated. Like defy can be

589
00:34:38,120 --> 00:34:40,200
Speaker 1: really really difficult to get your head around, and there

590
00:34:40,239 --> 00:34:44,279
Speaker 1: are these all these amazing protocols and platforms and things

591
00:34:44,360 --> 00:34:47,279
Speaker 1: like that that offers some pretty crazy services, but some

592
00:34:47,400 --> 00:34:49,680
Speaker 1: of them you're just like wow, that is you know,

593
00:34:50,160 --> 00:34:53,240
Speaker 1: you really need to know what you're doing to understand

594
00:34:53,400 --> 00:34:56,400
Speaker 1: to use these properly. So there's a kind of barrier

595
00:34:56,480 --> 00:34:59,880
Speaker 1: to entry for a lot of people. But defy is

596
00:35:00,040 --> 00:35:02,120
Speaker 1: as I say, it's growing, it's growing quickly, and it's

597
00:35:02,120 --> 00:35:04,080
Speaker 1: going to become more and more part of our lives.

598
00:35:04,880 --> 00:35:06,960
Speaker 1: And as I say, it does also give you the

599
00:35:07,000 --> 00:35:10,640
Speaker 1: opportunity not just to loan, but also to to lend,

600
00:35:10,800 --> 00:35:14,600
Speaker 1: and a lot of people, a lot of people's portfolio,

601
00:35:14,760 --> 00:35:17,840
Speaker 1: some of it will be deposited in DEFY protocols to

602
00:35:18,120 --> 00:35:20,239
Speaker 1: to earn a bit of interest. And the interest that

603
00:35:20,360 --> 00:35:23,759
Speaker 1: you can get here is is way way more than

604
00:35:23,840 --> 00:35:26,279
Speaker 1: you could ever get with a traditional bank, which is

605
00:35:26,320 --> 00:35:31,040
Speaker 1: another big selling point for people. UM and DEFY also

606
00:35:31,160 --> 00:35:34,319
Speaker 1: encompasses things like decentralized exchanges, which are known as dex

607
00:35:34,480 --> 00:35:37,120
Speaker 1: is where you can basically trade tokens peer to peer.

608
00:35:37,560 --> 00:35:40,839
Speaker 1: So most cryptocurrency exchange is certainly the ones that people

609
00:35:41,000 --> 00:35:43,399
Speaker 1: use on a on a regular basis, especially when they're

610
00:35:43,440 --> 00:35:46,399
Speaker 1: new to crypto. The likes of Finance or coin base

611
00:35:46,520 --> 00:35:49,680
Speaker 1: or anything like that, they are centralized, there's there's a

612
00:35:50,040 --> 00:35:52,200
Speaker 1: there's an entity in the middle of that. But these

613
00:35:52,280 --> 00:35:55,400
Speaker 1: decentralized exchanges UNI swap is a good example, which is

614
00:35:55,440 --> 00:35:59,399
Speaker 1: built on Ethereum. These enable sort of peer to peer

615
00:35:59,440 --> 00:36:03,319
Speaker 1: trading and again there's there's no one in the middle

616
00:36:03,560 --> 00:36:07,520
Speaker 1: of these transactions. Now as we record this, there's over

617
00:36:07,840 --> 00:36:11,920
Speaker 1: seventy five billion dollars in total value locked across the

618
00:36:12,000 --> 00:36:16,279
Speaker 1: whole DeFi sector, and that's grown massively over the last

619
00:36:16,320 --> 00:36:20,120
Speaker 1: few years. Seventy five billion dollars. And if you visit

620
00:36:20,440 --> 00:36:23,000
Speaker 1: there's website called DeFi Pulse, and there's another one called

621
00:36:23,040 --> 00:36:24,960
Speaker 1: defy Lama. They both kind of do the same thing.

622
00:36:25,040 --> 00:36:26,960
Speaker 1: They kind of they give you a kind of easy

623
00:36:27,120 --> 00:36:30,600
Speaker 1: dashboard overview of the whole DeFi sector and what the

624
00:36:30,680 --> 00:36:33,920
Speaker 1: top protocols are and how much money is locked up

625
00:36:33,960 --> 00:36:35,839
Speaker 1: in all of them and the trading volume in them

626
00:36:35,880 --> 00:36:37,440
Speaker 1: and all this sort of stuff. If you visit one

627
00:36:37,480 --> 00:36:39,759
Speaker 1: of those sites, is that all just because it's kind

628
00:36:39,800 --> 00:36:41,960
Speaker 1: of open source, because it's all just on a Ledger,

629
00:36:42,200 --> 00:36:45,440
Speaker 1: so yeah, yeah, it's all on it's all on blockchain,

630
00:36:45,600 --> 00:36:47,359
Speaker 1: so yeah, it's it's visible to everyone, so you can

631
00:36:47,440 --> 00:36:49,520
Speaker 1: literally so it's not like, oh, where the biggest and

632
00:36:49,640 --> 00:36:52,879
Speaker 1: you you don't know who these cowboys are. It's all

633
00:36:53,520 --> 00:36:56,799
Speaker 1: very much there in zeros and ones you can see. Yeah,

634
00:36:56,840 --> 00:36:59,279
Speaker 1: it's easy to check how much how much money is

635
00:36:59,560 --> 00:37:03,279
Speaker 1: in a particular protocol. Yeah, And like I said, if

636
00:37:03,320 --> 00:37:06,280
Speaker 1: you go on defy Pulse, you'll see that almost every

637
00:37:06,520 --> 00:37:11,600
Speaker 1: single defy protocol currently runs on ethereum. In fact, I

638
00:37:11,680 --> 00:37:14,120
Speaker 1: think of the top hundred, they're all on ethereum, apart

639
00:37:14,200 --> 00:37:17,000
Speaker 1: from one or two which are kind of either sort

640
00:37:17,040 --> 00:37:19,560
Speaker 1: of multi chain, so they run on ethereum, and some others,

641
00:37:19,880 --> 00:37:22,720
Speaker 1: and I think there's one that runs solely on Polygon,

642
00:37:23,120 --> 00:37:27,520
Speaker 1: which is which is an Ethereum layer two, which basically

643
00:37:27,640 --> 00:37:29,320
Speaker 1: is a project that makes it kind of easier and

644
00:37:29,440 --> 00:37:32,520
Speaker 1: cheaper to interact with Ethereum. But that's a bit of

645
00:37:32,560 --> 00:37:36,400
Speaker 1: a that's another rabbit hole. There's so many of these

646
00:37:36,480 --> 00:37:38,560
Speaker 1: rabbit holes. I know, there's a lot of rabbit holes here.

647
00:37:38,719 --> 00:37:42,920
Speaker 1: You you really like water shipped down, you really need

648
00:37:42,960 --> 00:37:45,399
Speaker 1: to watch your step otherwise you will you will break

649
00:37:45,440 --> 00:37:50,920
Speaker 1: your angle. So other newer smart contract blockchains are currently

650
00:37:51,000 --> 00:37:54,279
Speaker 1: offering kind of massive incentives for DeFi projects to build

651
00:37:54,360 --> 00:37:59,120
Speaker 1: on them, but Ethereum is it's kind of still untouchable,

652
00:37:59,200 --> 00:38:04,879
Speaker 1: at least for now. Yeah. Yeah, So I just want

653
00:38:04,920 --> 00:38:07,920
Speaker 1: to before we go on that that's kind of that's

654
00:38:07,960 --> 00:38:09,719
Speaker 1: kind of what I want to That's all. I want

655
00:38:09,760 --> 00:38:11,239
Speaker 1: to kind of look out in terms of what you

656
00:38:11,320 --> 00:38:14,480
Speaker 1: can what is available on Ethereum, what Ethereum sort of offers.

657
00:38:15,520 --> 00:38:18,040
Speaker 1: But before we kind of carry on with the sort

658
00:38:18,080 --> 00:38:20,440
Speaker 1: of short history of Ethereum that we were doing last time,

659
00:38:20,480 --> 00:38:22,680
Speaker 1: I just want to do a quick side note on

660
00:38:23,800 --> 00:38:29,480
Speaker 1: the native coin of the Ethereum blockchain. Now. Um, so

661
00:38:29,760 --> 00:38:33,840
Speaker 1: everything I've just talked about all these defied protocols, stable coins, deps,

662
00:38:34,120 --> 00:38:36,719
Speaker 1: and n f T, you know, the whole n f

663
00:38:36,800 --> 00:38:40,319
Speaker 1: T sector. All this means that Ethereum and its ecosystem

664
00:38:40,560 --> 00:38:44,480
Speaker 1: is enormous. It's absolutely huge. There's so much happening on

665
00:38:44,600 --> 00:38:47,640
Speaker 1: it that just wasn't possible before Ethereum came along, and

666
00:38:47,719 --> 00:38:51,319
Speaker 1: it really is a really fundamental part of the whole

667
00:38:51,520 --> 00:38:56,600
Speaker 1: cryptocurrency sector. But remember that to use all these services,

668
00:38:56,680 --> 00:38:58,120
Speaker 1: So if you wanted to buy an n f T

669
00:38:58,239 --> 00:39:00,920
Speaker 1: on Ethereum, if you wanted to send stable coins to

670
00:39:01,120 --> 00:39:04,279
Speaker 1: use in a defied protocol, basically, if you want to

671
00:39:04,440 --> 00:39:07,239
Speaker 1: want to interact with the Ethereum network in any way,

672
00:39:07,800 --> 00:39:13,239
Speaker 1: you must pay for the computation in Ethereum's native coin,

673
00:39:13,440 --> 00:39:18,120
Speaker 1: which is so E, is very much it kind of

674
00:39:18,200 --> 00:39:20,440
Speaker 1: acts as a kind of people refer to it as

675
00:39:20,440 --> 00:39:24,840
Speaker 1: a kind of digital oil. It's it's responsible for the

676
00:39:25,080 --> 00:39:29,080
Speaker 1: for the running of the whole network, and the fee

677
00:39:29,200 --> 00:39:33,600
Speaker 1: that you pay in is known as gas and you'll

678
00:39:33,680 --> 00:39:37,280
Speaker 1: hear we'll talk about gas fees a lot in future episodes.

679
00:39:37,719 --> 00:39:41,759
Speaker 1: Gas fees are basically paid to Ethereum miners in exchange

680
00:39:41,840 --> 00:39:45,440
Speaker 1: for the computing power they use to process transactions. So

681
00:39:46,560 --> 00:39:49,200
Speaker 1: in theory, you should only be you should really only

682
00:39:49,280 --> 00:39:52,800
Speaker 1: be wanting to pay a small amount. But because Ethereum

683
00:39:52,880 --> 00:39:55,520
Speaker 1: is so popular, because there are so many people trying

684
00:39:55,560 --> 00:39:59,160
Speaker 1: to do transactions, gas fees get higher and higher because

685
00:39:59,680 --> 00:40:04,080
Speaker 1: the the ethereum miners can only process so many at

686
00:40:04,080 --> 00:40:06,359
Speaker 1: a time, And what you get is kind of people

687
00:40:06,440 --> 00:40:09,400
Speaker 1: bidding up gas fees. So if someone wanted their transaction,

688
00:40:09,680 --> 00:40:12,640
Speaker 1: if someone wanted to be sure that their transaction would

689
00:40:12,640 --> 00:40:15,600
Speaker 1: go through quickly, they would agree to pay a higher

690
00:40:15,640 --> 00:40:18,680
Speaker 1: gas fee, and this sort of drags up the average price,

691
00:40:19,040 --> 00:40:23,919
Speaker 1: like a surge charge on on on Uber. Yeah, yeah,

692
00:40:24,000 --> 00:40:27,399
Speaker 1: that's a good analogy. Yeah, basically, Yeah, as people, as

693
00:40:27,440 --> 00:40:30,160
Speaker 1: people become more desperate to to for a transaction to

694
00:40:30,200 --> 00:40:32,520
Speaker 1: go through or to get to get a ride, they're

695
00:40:32,640 --> 00:40:36,320
Speaker 1: they're willing to pay more. And gas fees are a

696
00:40:36,480 --> 00:40:39,360
Speaker 1: huge problem at the moment on Ethereum because sometimes you

697
00:40:39,440 --> 00:40:41,440
Speaker 1: can pay I mean, gas fees have been known to

698
00:40:41,440 --> 00:40:44,439
Speaker 1: go into hundreds of dollars worth of e in order

699
00:40:44,520 --> 00:40:47,680
Speaker 1: to get through a single transaction, and sometimes it's a

700
00:40:47,719 --> 00:40:51,239
Speaker 1: small transaction. What's the point, Yeah, exactly. And sometimes I've

701
00:40:51,280 --> 00:40:55,200
Speaker 1: been looking to move stable coins maybe you know, I

702
00:40:55,280 --> 00:40:57,680
Speaker 1: had some stable coins in binance once and I wanted

703
00:40:57,719 --> 00:41:00,600
Speaker 1: to move it over to to a def protocol to

704
00:41:00,840 --> 00:41:03,160
Speaker 1: put in air, to put in a pool there. And

705
00:41:03,600 --> 00:41:05,439
Speaker 1: I was only trying to move sort of a couple

706
00:41:05,440 --> 00:41:08,480
Speaker 1: of hundred dollars, and it was that the fee was

707
00:41:08,520 --> 00:41:11,680
Speaker 1: about thirty five dollars, and I thought, what's the point,

708
00:41:12,200 --> 00:41:16,600
Speaker 1: It's crazy. So this is something that Ethereum is working on.

709
00:41:16,920 --> 00:41:19,040
Speaker 1: And we'll see more of this when we start to

710
00:41:19,080 --> 00:41:23,000
Speaker 1: talk about Ethereum two, if you like, in another episode. Yeah,

711
00:41:23,040 --> 00:41:27,160
Speaker 1: that that is that is coming um. But this, this whole,

712
00:41:27,360 --> 00:41:30,800
Speaker 1: this utility that eath has is what makes it, is

713
00:41:30,840 --> 00:41:34,240
Speaker 1: what creates value for it, and it's why is second

714
00:41:34,360 --> 00:41:37,920
Speaker 1: only to BTC to bitcoin. There's so much demand for

715
00:41:38,120 --> 00:41:42,479
Speaker 1: it to use in all the services that Ethereum offers. Okay,

716
00:41:42,560 --> 00:41:46,680
Speaker 1: so that's that's important to remember because again people can

717
00:41:46,760 --> 00:41:49,719
Speaker 1: often think that you're you know, you're buying you're buying

718
00:41:50,239 --> 00:41:54,000
Speaker 1: ethereum as a speculative asset, and of course a lot

719
00:41:54,040 --> 00:41:59,040
Speaker 1: of people are, but increasingly more people buy in order

720
00:41:59,120 --> 00:42:01,320
Speaker 1: to be able to use the Ethereum network, which is

721
00:42:01,520 --> 00:42:06,040
Speaker 1: what its main use is. Okay, yeah, cool, all right,

722
00:42:06,280 --> 00:42:10,040
Speaker 1: So shall we continue with the short history of Ethereum. Yeah,

723
00:42:10,480 --> 00:42:12,360
Speaker 1: there's there's a bit more. There's a bit more spice

724
00:42:12,440 --> 00:42:16,600
Speaker 1: to come. Yeah, as you do love some Yeah, as

725
00:42:16,640 --> 00:42:19,920
Speaker 1: you remember last time, the people who the co founders

726
00:42:19,960 --> 00:42:23,960
Speaker 1: of Ethereum didn't always get on. There was a lot

727
00:42:24,000 --> 00:42:25,880
Speaker 1: of drama. It became a bit like a sort of

728
00:42:25,920 --> 00:42:28,360
Speaker 1: soap opera. In this uh, in this house, in this

729
00:42:28,520 --> 00:42:33,279
Speaker 1: is TikTok house. Yeah, there's crypto house which is called

730
00:42:33,320 --> 00:42:36,600
Speaker 1: the spaceship in Switzerland. Yeah, it all got pretty dramatic.

731
00:42:36,880 --> 00:42:40,240
Speaker 1: So last time we got up to the launch of Ethereum,

732
00:42:40,239 --> 00:42:42,440
Speaker 1: which was July two thousand and fifteen, we left it

733
00:42:42,480 --> 00:42:47,799
Speaker 1: there and we'd seen just how much work and internal

734
00:42:47,880 --> 00:42:50,160
Speaker 1: strife had had gone on to make this idea that

735
00:42:50,239 --> 00:42:54,640
Speaker 1: fatalic had had become reality. So the first thing to

736
00:42:54,920 --> 00:42:57,239
Speaker 1: to know you're you might remember last time we talked

737
00:42:57,239 --> 00:42:59,520
Speaker 1: about this stiff pool that had been set up in

738
00:42:59,600 --> 00:43:02,040
Speaker 1: this kind of Swiss entity that to make sure that

739
00:43:02,160 --> 00:43:05,640
Speaker 1: Ethereum remained a nonprofit organization, which was one of the

740
00:43:05,719 --> 00:43:08,080
Speaker 1: big fallings out that people had. Some people wanted it

741
00:43:08,120 --> 00:43:11,279
Speaker 1: to be a nonprofit vitallic and others and other people

742
00:43:11,320 --> 00:43:13,520
Speaker 1: wanted it to be a for profit, and they're kind

743
00:43:13,560 --> 00:43:16,359
Speaker 1: of nonprofit as one, and the for profits were sort

744
00:43:16,400 --> 00:43:22,400
Speaker 1: of unceremoniously booted out. Now the stiff Tongue basically became

745
00:43:22,560 --> 00:43:26,879
Speaker 1: known as the Ethereum Foundation, and this is the body

746
00:43:26,960 --> 00:43:29,440
Speaker 1: that kind of oversees the development of Ethereum. And I

747
00:43:29,520 --> 00:43:31,040
Speaker 1: just want to read out this thing that's on the

748
00:43:31,080 --> 00:43:35,000
Speaker 1: Ethereum Foundation's website. It's kind of it's kind of reason

749
00:43:35,080 --> 00:43:39,240
Speaker 1: for being what it does. So the Ethereum Foundation describes itself,

750
00:43:39,560 --> 00:43:43,320
Speaker 1: we are a part of a large ecosystem of organizations, individuals,

751
00:43:43,400 --> 00:43:46,880
Speaker 1: and companies that support Ethereum. Our mission is to do

752
00:43:47,120 --> 00:43:50,719
Speaker 1: what is best for Ethereum's long term success. Our role

753
00:43:50,920 --> 00:43:53,800
Speaker 1: is to allocate resources to critical projects, to be a

754
00:43:53,960 --> 00:43:57,640
Speaker 1: valued voice within the Ethereum ecosystem, and to advocate for

755
00:43:57,960 --> 00:44:01,200
Speaker 1: Ethereum to the outside world. So this is the this

756
00:44:01,360 --> 00:44:03,759
Speaker 1: is the kind of entity that is, yeah, one of

757
00:44:03,840 --> 00:44:07,040
Speaker 1: the one of the entities that's kind of overseeing Ethereum

758
00:44:07,120 --> 00:44:11,960
Speaker 1: as as a project. Now, just before Ethereum officially launched,

759
00:44:12,040 --> 00:44:15,680
Speaker 1: the Ethereum Foundation had hired an executive director, a woman

760
00:44:15,840 --> 00:44:20,680
Speaker 1: called Ming Chan, and as we'll find out later on,

761
00:44:21,840 --> 00:44:23,520
Speaker 1: she wasn't she didn't turn out to be a very

762
00:44:23,520 --> 00:44:28,200
Speaker 1: good higher. Yeah. Now, although Ethereum was live, there was

763
00:44:28,320 --> 00:44:30,759
Speaker 1: still tons of development work to be done, and the

764
00:44:30,800 --> 00:44:35,000
Speaker 1: whole project, as you can probably imagine, was burning through money. Yea.

765
00:44:35,400 --> 00:44:38,080
Speaker 1: And I mean as any kind of as any kind

766
00:44:38,080 --> 00:44:41,399
Speaker 1: of startup world. I think most most startups do burn

767
00:44:41,480 --> 00:44:44,359
Speaker 1: through money. And I think Uber. I don't think Uber

768
00:44:44,440 --> 00:44:47,560
Speaker 1: for instance, as yet actually made a profit. And it's

769
00:44:47,600 --> 00:44:50,520
Speaker 1: been around for I mean at least ten years, isn't it.

770
00:44:51,600 --> 00:44:56,160
Speaker 1: So yeah, Ethereum Ethereum was was eating up a lot

771
00:44:56,280 --> 00:44:59,080
Speaker 1: of money, and this, as you can imagine, was kind

772
00:44:59,120 --> 00:45:02,120
Speaker 1: of a point of contention, you know, whenever whenever there's

773
00:45:02,480 --> 00:45:05,399
Speaker 1: money involved. Um, So there was a lot of bad

774
00:45:05,480 --> 00:45:10,560
Speaker 1: blood about how much eth many people were rewarded. Because

775
00:45:10,600 --> 00:45:13,279
Speaker 1: even the likes of Charles Hoskinson and a mere Chet

776
00:45:13,320 --> 00:45:16,319
Speaker 1: trit who were these yeah, who were booted out, Um,

777
00:45:16,800 --> 00:45:20,360
Speaker 1: they were both awarded a large amount of eight whereas

778
00:45:20,760 --> 00:45:24,280
Speaker 1: as kind of co founders, if you like. When Ethereum launched,

779
00:45:24,640 --> 00:45:28,080
Speaker 1: and this annoyed a lot of people. Why are these

780
00:45:28,120 --> 00:45:30,359
Speaker 1: guys getting so much? They don't even have anything more

781
00:45:30,400 --> 00:45:34,800
Speaker 1: to do with theorem, they were fired, Um and I

782
00:45:34,920 --> 00:45:36,839
Speaker 1: think part of the reason for this was that these

783
00:45:36,880 --> 00:45:39,960
Speaker 1: amounts had been decided a while back, and it kind

784
00:45:40,000 --> 00:45:42,840
Speaker 1: of all came down to Vitalic because he was he

785
00:45:42,960 --> 00:45:45,239
Speaker 1: was the guy who had had the idea, and he

786
00:45:45,400 --> 00:45:46,840
Speaker 1: was the kind of you know and still is that

787
00:45:47,000 --> 00:45:50,680
Speaker 1: kind of spiritual leader of Ethereum, and he was very

788
00:45:50,760 --> 00:45:52,759
Speaker 1: much sort of well, I'd said that, I've said that

789
00:45:52,840 --> 00:45:54,560
Speaker 1: this is what people are going to get, and I'm

790
00:45:54,600 --> 00:45:56,640
Speaker 1: not going to go back on my word. And again,

791
00:45:56,760 --> 00:45:58,680
Speaker 1: I think, as we discussed last time, the poor guy

792
00:45:58,880 --> 00:46:02,279
Speaker 1: was in a really kind of difficult position. He'd gone

793
00:46:02,360 --> 00:46:04,920
Speaker 1: from being this guy had had an idea and wanted

794
00:46:04,960 --> 00:46:07,120
Speaker 1: to build this thing, and he was now having to

795
00:46:07,200 --> 00:46:13,440
Speaker 1: be now making these sort of boardroom decisions that a teenager.

796
00:46:13,560 --> 00:46:16,320
Speaker 1: Was he a teenager, Yes he was. I think he

797
00:46:16,400 --> 00:46:18,279
Speaker 1: was in his early twenties by this point the time

798
00:46:18,280 --> 00:46:20,200
Speaker 1: the theory, But he was a teenager when he first

799
00:46:20,200 --> 00:46:22,920
Speaker 1: came up with the So someone in the early twenties.

800
00:46:23,000 --> 00:46:25,120
Speaker 1: I mean when I was in my early twenties, it

801
00:46:25,280 --> 00:46:27,839
Speaker 1: was I felt had achieved something. If I've gotten out

802
00:46:27,880 --> 00:46:33,279
Speaker 1: of bed, so you did, yeah, I mean very well done. Yeah,

803
00:46:34,400 --> 00:46:37,200
Speaker 1: I managed to get out of bed consistently over a

804
00:46:37,239 --> 00:46:40,480
Speaker 1: period of several years. I remember some days when you

805
00:46:40,560 --> 00:46:44,840
Speaker 1: haven't managed to get so, let's be honest, maybe not

806
00:46:45,000 --> 00:46:49,200
Speaker 1: that consistently, but yeah, so Vitalic was was in this

807
00:46:49,520 --> 00:46:52,239
Speaker 1: kind of really difficult position. You know, he just and

808
00:46:52,719 --> 00:46:55,280
Speaker 1: to be fair, this is something that that's happened. Happens

809
00:46:55,320 --> 00:46:57,560
Speaker 1: with a lot of a lot of creators, a lot

810
00:46:57,600 --> 00:47:00,880
Speaker 1: of developers in cryptocurrency and elsewhere. I think, you know,

811
00:47:01,000 --> 00:47:02,759
Speaker 1: they just want to code, They just want to build

812
00:47:02,800 --> 00:47:06,080
Speaker 1: their things and get on with it. But because they

813
00:47:06,320 --> 00:47:08,359
Speaker 1: are very much the focal point of the project, they

814
00:47:08,400 --> 00:47:10,319
Speaker 1: find themselves having to deal with all sorts of other

815
00:47:10,520 --> 00:47:16,400
Speaker 1: crack anstructions. Yeah. So another one who another person who

816
00:47:16,680 --> 00:47:19,719
Speaker 1: was was also becoming unpopular was Anthony Dorio. Now he

817
00:47:19,840 --> 00:47:21,320
Speaker 1: was you might remember him. He was one of the

818
00:47:21,400 --> 00:47:24,880
Speaker 1: early backers. He was very much a money man. He

819
00:47:25,120 --> 00:47:28,719
Speaker 1: was getting very unpopular and a lot of the developers

820
00:47:28,760 --> 00:47:31,480
Speaker 1: basically saw him as just just money. You know, he

821
00:47:31,600 --> 00:47:34,279
Speaker 1: wasn't really doing anything to help ethereums development. He just

822
00:47:34,520 --> 00:47:37,120
Speaker 1: got in early funded a bit of it and was

823
00:47:37,200 --> 00:47:39,360
Speaker 1: now sort of regarded as kind of deadweight by a

824
00:47:39,440 --> 00:47:42,040
Speaker 1: lot of people. And then we also had ming Chan

825
00:47:42,239 --> 00:47:45,080
Speaker 1: this director of the Ethereum Foundation. She was causing problems.

826
00:47:45,280 --> 00:47:49,120
Speaker 1: She made a totally unsubstantiated claim of sexual harassment against

827
00:47:49,160 --> 00:47:53,520
Speaker 1: a colleague Um, and many people began to see her

828
00:47:53,600 --> 00:47:57,279
Speaker 1: as trying. She was very close to Vitalic, and many

829
00:47:57,400 --> 00:48:01,400
Speaker 1: people began to began to feel she was manipulating him.

830
00:48:01,560 --> 00:48:03,960
Speaker 1: And some of the stories, again I refer you to this,

831
00:48:04,280 --> 00:48:07,839
Speaker 1: these this amazing book by Laura Shin called The Cryptopians,

832
00:48:08,680 --> 00:48:13,040
Speaker 1: in particular, that some of the stories about her suggests

833
00:48:13,080 --> 00:48:16,120
Speaker 1: that she was kind of very unstable, sort of very

834
00:48:16,280 --> 00:48:18,960
Speaker 1: emotionally charged a lot of the time, and could be

835
00:48:19,080 --> 00:48:22,520
Speaker 1: quite manipulative as well. And this it's got a lot

836
00:48:22,560 --> 00:48:24,840
Speaker 1: of people working on was she the Yoko own no

837
00:48:25,040 --> 00:48:30,680
Speaker 1: of Crypto Um? Perhaps? Yeah, perhaps? Yeah. A lot of people,

838
00:48:30,840 --> 00:48:32,600
Speaker 1: a lot of people aren't fans of Yoko are there

839
00:48:32,600 --> 00:48:34,719
Speaker 1: because they feel that she's sort of well, I mean,

840
00:48:34,840 --> 00:48:39,919
Speaker 1: like I suppose, probably not a good analogy singers. She's

841
00:48:39,960 --> 00:48:44,600
Speaker 1: no longer involved. I'm assuming no Ming ming Chan was. Yeah,

842
00:48:44,640 --> 00:48:47,840
Speaker 1: she she was eventually let go, but actually she stuck

843
00:48:47,880 --> 00:48:51,480
Speaker 1: around for quite a while, as we'll see. But yeah,

844
00:48:51,520 --> 00:48:54,440
Speaker 1: actually Vitale was was in fact persuaded. I think at

845
00:48:54,480 --> 00:48:58,440
Speaker 1: one point to fire her, and um and I think

846
00:48:58,480 --> 00:49:02,759
Speaker 1: he tried, but sort of wasn't. She didn't actually leave,

847
00:49:03,160 --> 00:49:06,040
Speaker 1: She just kind of stuck around. And then after a

848
00:49:06,239 --> 00:49:09,880
Speaker 1: period of time, people like, right, she's still here, Okay,

849
00:49:10,760 --> 00:49:13,480
Speaker 1: so I guess she's still she's still doing a thing.

850
00:49:13,719 --> 00:49:15,680
Speaker 1: So it took it was a long time before they

851
00:49:15,800 --> 00:49:18,000
Speaker 1: before they were actually able to get rid of her. Now,

852
00:49:18,120 --> 00:49:21,759
Speaker 1: these arguments over costs that we've talked about, as well

853
00:49:21,920 --> 00:49:25,080
Speaker 1: as accusations about being difficult to work with, meant that

854
00:49:25,320 --> 00:49:31,200
Speaker 1: Gavin Would was eventually fired towards the end of and

855
00:49:31,520 --> 00:49:34,319
Speaker 1: your member. Gavin Would from last time. He's the he's

856
00:49:34,360 --> 00:49:36,640
Speaker 1: the British guy again who came on board very very

857
00:49:36,680 --> 00:49:39,600
Speaker 1: early and did loads of the development work for Ethereum.

858
00:49:40,560 --> 00:49:44,920
Speaker 1: And after Ethereum launched, he was he was off working

859
00:49:45,520 --> 00:49:50,360
Speaker 1: on one particular version of of an Ethereum client and

860
00:49:50,520 --> 00:49:52,520
Speaker 1: he had his own team working under him, and then

861
00:49:52,520 --> 00:49:56,800
Speaker 1: there was another developer working on a different Ethereum client,

862
00:49:57,320 --> 00:50:00,279
Speaker 1: and there were accusations that sort of Gavin was kind

863
00:50:00,320 --> 00:50:02,920
Speaker 1: of putting his team his work ahead of ahead of

864
00:50:02,960 --> 00:50:07,160
Speaker 1: the other teams, and um, it wasn't you know, basically

865
00:50:07,320 --> 00:50:10,960
Speaker 1: wasn't being much of a team player. And again there

866
00:50:11,000 --> 00:50:14,600
Speaker 1: are there are different versions of all this, and obviously

867
00:50:14,640 --> 00:50:18,880
Speaker 1: Gavin would would argue otherwise, and it's it's difficult to

868
00:50:18,960 --> 00:50:21,640
Speaker 1: get to get Yeah, I mean unless you're there. I

869
00:50:21,719 --> 00:50:25,759
Speaker 1: don't know. Yeah, um, but yeah, there were a lot

870
00:50:25,800 --> 00:50:29,280
Speaker 1: of concerns voiced in several quarters about how much actually

871
00:50:29,320 --> 00:50:34,240
Speaker 1: Gavin's side of things was all costing. And yeah, the however,

872
00:50:34,320 --> 00:50:37,120
Speaker 1: anyone sees the whole episode, whoever said what to human

873
00:50:37,280 --> 00:50:39,879
Speaker 1: However it panned out, the result was basically the same.

874
00:50:40,120 --> 00:50:42,560
Speaker 1: Another founder was gone, Gavin was Gavin was kind of

875
00:50:42,600 --> 00:50:46,239
Speaker 1: another one bites the dust. Yeah, Gavin was kind of

876
00:50:46,400 --> 00:50:50,520
Speaker 1: unceremoniously booted off as well. But bye, goodbye Gavin. You

877
00:50:50,840 --> 00:50:53,640
Speaker 1: won't be joining us on the next lego, you won't

878
00:50:53,680 --> 00:50:56,719
Speaker 1: be coming to London. Whatever I wish, I wish they

879
00:50:56,800 --> 00:50:59,840
Speaker 1: fired them in Like, could everyone whose name begins with

880
00:51:00,200 --> 00:51:05,759
Speaker 1: Gavin stand up? Don't you no longer work here? What's

881
00:51:05,800 --> 00:51:08,160
Speaker 1: the other one? The apprentice? Everyone who works here put

882
00:51:08,200 --> 00:51:15,880
Speaker 1: their hand up, not you, Gavin. Well, if anyone from

883
00:51:15,920 --> 00:51:19,319
Speaker 1: ethereum is listening, that's the new HR policy. Yeah, that's

884
00:51:19,360 --> 00:51:21,279
Speaker 1: that's our suggestion of how you should do things. Works

885
00:51:21,360 --> 00:51:25,200
Speaker 1: very well at the coin vireau Um. So, as we've seen,

886
00:51:25,280 --> 00:51:28,160
Speaker 1: Gavin had contributed a lot to Ethereum. He wrote the

887
00:51:28,239 --> 00:51:31,720
Speaker 1: Yellow Paper, He also co created Solidity, the coding language

888
00:51:31,760 --> 00:51:34,320
Speaker 1: that Ethereum is written in, and basically, if you like,

889
00:51:34,440 --> 00:51:37,080
Speaker 1: did a lot of the heavy lifting needed to actually

890
00:51:37,200 --> 00:51:41,080
Speaker 1: create Ethereum. And even though he's gone, even though he's

891
00:51:41,120 --> 00:51:44,040
Speaker 1: gone on to other things, he is still very much

892
00:51:44,080 --> 00:51:48,080
Speaker 1: associated with ethere with the Ethereum projects, and yeah, I

893
00:51:48,120 --> 00:51:53,000
Speaker 1: mean his contribution contribution was huge. Um. He's now best

894
00:51:53,080 --> 00:51:56,880
Speaker 1: known for developing Polka Dot, which is a blockchain network

895
00:51:57,000 --> 00:52:00,520
Speaker 1: that's seen as a rival to Ethereum. So you remember,

896
00:52:00,600 --> 00:52:03,560
Speaker 1: Charles Hoskinson has gone off and created Cardano, which is

897
00:52:03,600 --> 00:52:06,960
Speaker 1: another Ethereum rival, and Gavin Wood has done a similar thing.

898
00:52:07,360 --> 00:52:10,760
Speaker 1: And Gavin Woods, like Charles Hoskinson, is still a major

899
00:52:10,840 --> 00:52:13,279
Speaker 1: figure in crypto, not just because of what he what

900
00:52:13,440 --> 00:52:15,719
Speaker 1: he did with Ethereum, but because of what he's now

901
00:52:15,840 --> 00:52:19,279
Speaker 1: doing with Polka Dot and particularly Web three, this kind

902
00:52:19,280 --> 00:52:22,719
Speaker 1: of next generation of the Internet. He's a really big

903
00:52:22,800 --> 00:52:27,680
Speaker 1: figure in that. So after Gavin's departure, all these arguments

904
00:52:27,680 --> 00:52:31,759
Speaker 1: about money and clashes of personality, they basically continued on

905
00:52:32,000 --> 00:52:34,720
Speaker 1: as they had before. So it didn't really solve anything

906
00:52:34,960 --> 00:52:38,680
Speaker 1: on on that front. But Ethereum had a much bigger

907
00:52:38,760 --> 00:52:42,560
Speaker 1: problem ahead of it in which will look out after

908
00:52:42,600 --> 00:53:00,439
Speaker 1: a break, shall we cool? Welcome back everyone, the third

909
00:53:00,520 --> 00:53:03,439
Speaker 1: and final part of today's episode. This is part three,

910
00:53:03,560 --> 00:53:07,640
Speaker 1: and this is all about the DOW hack. I better

911
00:53:07,680 --> 00:53:11,319
Speaker 1: explain that, hadn't I so a bit of context. First,

912
00:53:11,440 --> 00:53:16,560
Speaker 1: in Ethereum suffered what was arguably its most serious ever setback,

913
00:53:17,560 --> 00:53:20,200
Speaker 1: and it was alter ing Chan. It's not ming Chan,

914
00:53:20,520 --> 00:53:23,839
Speaker 1: No she was. She didn't exactly help. I think it's

915
00:53:23,840 --> 00:53:26,799
Speaker 1: fair to say, but no, she was. She was nothing

916
00:53:26,880 --> 00:53:29,399
Speaker 1: compared to what what happened with the DOW. So yeah,

917
00:53:29,480 --> 00:53:31,200
Speaker 1: this was all to do with something that was called

918
00:53:31,560 --> 00:53:36,520
Speaker 1: the DOW. Now, a dow is a blockchain based organization

919
00:53:36,880 --> 00:53:41,279
Speaker 1: that's managed by its members, and this is another big, big,

920
00:53:41,440 --> 00:53:45,520
Speaker 1: kind of emerging field in cryptocurrency now that the concept

921
00:53:45,560 --> 00:53:50,800
Speaker 1: of dows decentralized autonomous organizations, that's what DOW stands for.

922
00:53:52,360 --> 00:53:56,120
Speaker 1: The concept of dow's was first proposed by Dan Larama

923
00:53:56,200 --> 00:53:59,520
Speaker 1: and his father Stan. Now you might vaguely remember Dan

924
00:53:59,600 --> 00:54:03,040
Speaker 1: laramat he we mentioned him in the context of Charles Hoskinson.

925
00:54:03,200 --> 00:54:06,520
Speaker 1: In the last episode, him and Charles Hoskinson started bit

926
00:54:06,640 --> 00:54:10,879
Speaker 1: chairs together before falling out, as so many of these

927
00:54:10,920 --> 00:54:13,520
Speaker 1: people keep doing in crypto. It's at falling out in

928
00:54:15,719 --> 00:54:18,879
Speaker 1: you may yeah, you may remember Dan. So they are

929
00:54:19,239 --> 00:54:22,759
Speaker 1: these dows are coded to follow a certain set of

930
00:54:22,840 --> 00:54:26,880
Speaker 1: rules and they aren't controlled by any single person or entity.

931
00:54:27,719 --> 00:54:30,200
Speaker 1: And a big part of their purpose is to remove

932
00:54:30,800 --> 00:54:33,840
Speaker 1: fallible human beings from the chain of command and basically

933
00:54:33,960 --> 00:54:37,160
Speaker 1: let code run things. And this is the expression code

934
00:54:37,200 --> 00:54:40,560
Speaker 1: is law. Yeah, I think I've used that before. So

935
00:54:41,680 --> 00:54:44,480
Speaker 1: for an example, for example, members can deposit crypto into

936
00:54:44,520 --> 00:54:48,880
Speaker 1: their chosen dow and are rewarded with dow tokens in return,

937
00:54:49,080 --> 00:54:52,200
Speaker 1: and this allows them to vote on how the dow

938
00:54:52,280 --> 00:54:55,880
Speaker 1: in question is run. And this is this process is

939
00:54:55,960 --> 00:54:58,640
Speaker 1: known as governance. And this is another big thing in

940
00:54:58,760 --> 00:55:02,440
Speaker 1: crypto and also web three, this idea of crypto holders

941
00:55:02,760 --> 00:55:05,960
Speaker 1: having a say in how in how these protocols, how

942
00:55:06,040 --> 00:55:10,680
Speaker 1: these projects are run. So dows are becoming very popular

943
00:55:10,719 --> 00:55:13,879
Speaker 1: and crypto, as I said, especially in Defied, but they

944
00:55:14,040 --> 00:55:17,880
Speaker 1: didn't have a very auspicious beginning. Now by the end

945
00:55:18,040 --> 00:55:21,800
Speaker 1: of there would adapts be starting to appear. On Ethereum,

946
00:55:21,960 --> 00:55:24,440
Speaker 1: and developers were starting to wake up to all the

947
00:55:24,520 --> 00:55:31,000
Speaker 1: possibilities that these offered, and in early November there was

948
00:55:31,040 --> 00:55:34,200
Speaker 1: something called It's the first ever Ethereum dev Com, which

949
00:55:34,200 --> 00:55:36,840
Speaker 1: is basically a developer conference where a whole lot of

950
00:55:36,880 --> 00:55:39,520
Speaker 1: geeks get together and sit around laptops all day long

951
00:55:39,719 --> 00:55:42,960
Speaker 1: and occasionally do talks and things. And there was a

952
00:55:43,080 --> 00:55:47,800
Speaker 1: German developer called Christophe Gents who proposed a venture called

953
00:55:48,200 --> 00:55:53,839
Speaker 1: slock it at at this dev com. Slock it Okay, Now,

954
00:55:53,960 --> 00:55:56,960
Speaker 1: the idea behind slock it was to create a kind

955
00:55:57,040 --> 00:56:01,440
Speaker 1: of decentralized sharing economy. And I guess the best the

956
00:56:01,520 --> 00:56:03,920
Speaker 1: best kind of point of reference for this is Airbnb,

957
00:56:04,200 --> 00:56:06,840
Speaker 1: a kind of decentralized airb and b if you like,

958
00:56:07,840 --> 00:56:11,640
Speaker 1: but with no one entity in control. And the idea

959
00:56:11,840 --> 00:56:14,800
Speaker 1: was to use this device called a slock, and basically

960
00:56:14,920 --> 00:56:18,600
Speaker 1: it was a lock that could be opened using an

961
00:56:18,640 --> 00:56:24,839
Speaker 1: Ethereum transaction. And so here's an example that you've got

962
00:56:24,920 --> 00:56:28,440
Speaker 1: a you've got a car pool protocol, you've got a

963
00:56:28,480 --> 00:56:32,440
Speaker 1: car pool platform, and the car is locked using a slock.

964
00:56:32,760 --> 00:56:35,960
Speaker 1: So the person wanting to use it sends some crypto

965
00:56:36,239 --> 00:56:39,600
Speaker 1: to the slock and the car is unlocked in order

966
00:56:39,640 --> 00:56:42,560
Speaker 1: for them to use it. Then when they finished and

967
00:56:42,960 --> 00:56:45,200
Speaker 1: the car is locked back up again, their crypto is

968
00:56:45,280 --> 00:56:48,680
Speaker 1: returned to them, minus, of course, a small fee for

969
00:56:48,960 --> 00:56:53,839
Speaker 1: the use of the car. Interesting. Yeah, yeah, it's it's

970
00:56:53,920 --> 00:56:58,200
Speaker 1: some it's on papers or on block chains on the screen.

971
00:56:58,280 --> 00:57:01,560
Speaker 1: Looks like a good idea, Yeah, And a lot of

972
00:57:01,640 --> 00:57:03,480
Speaker 1: the people, a lot of people kind of in this

973
00:57:03,920 --> 00:57:07,160
Speaker 1: in this field, were really really excited by the idea

974
00:57:07,320 --> 00:57:11,000
Speaker 1: of this sharing economy. And you can dig quite down,

975
00:57:11,320 --> 00:57:14,080
Speaker 1: quite far down into it and and talk about how,

976
00:57:14,600 --> 00:57:16,520
Speaker 1: you know, this idea of why do we all own

977
00:57:16,600 --> 00:57:18,480
Speaker 1: all these things? You know, why do we own Why

978
00:57:18,560 --> 00:57:22,000
Speaker 1: do we own cars that we only use for a

979
00:57:22,200 --> 00:57:25,520
Speaker 1: few hours a week and the rest of the time

980
00:57:25,520 --> 00:57:28,000
Speaker 1: they're just sitting there doing nothing. What if there was

981
00:57:28,080 --> 00:57:29,800
Speaker 1: a way that we could share it out, you know,

982
00:57:29,920 --> 00:57:34,680
Speaker 1: we'd all need fewer cars. Um. And you this idea

983
00:57:34,800 --> 00:57:38,600
Speaker 1: gets taken, you know, extrapolated a heck of a lot.

984
00:57:38,720 --> 00:57:41,439
Speaker 1: And and it's basically that the principle behind airbnb, isn't

985
00:57:41,440 --> 00:57:43,560
Speaker 1: it You've got a flat, you're gonna you're not going

986
00:57:43,600 --> 00:57:45,760
Speaker 1: to be in it, so why not rent it out?

987
00:57:45,840 --> 00:57:48,320
Speaker 1: And you know why why have someone pay for an

988
00:57:48,320 --> 00:57:52,280
Speaker 1: expensive hotel room. And obviously, as we've seen, Airbnb has

989
00:57:52,360 --> 00:57:56,600
Speaker 1: completely changed. I don't think it's exaggerating to say it's

990
00:57:56,680 --> 00:58:00,320
Speaker 1: changed the world, hasn't. I mean, it's just changed a

991
00:58:00,680 --> 00:58:05,840
Speaker 1: massive market, holiday and sort of hotel industry. But of

992
00:58:05,960 --> 00:58:09,920
Speaker 1: course Airbnb is very centralized. Everything goes through the Airbnb

993
00:58:10,280 --> 00:58:15,040
Speaker 1: platform and companies. So unsurprisingly with crypto, there were people

994
00:58:15,080 --> 00:58:19,400
Speaker 1: who wanted to create this kind of decentralized platform instead,

995
00:58:19,400 --> 00:58:21,680
Speaker 1: and this is what slock it was kind of aiming at.

996
00:58:22,240 --> 00:58:26,560
Speaker 1: And so Slocket decided to launch this project as a DOW,

997
00:58:26,720 --> 00:58:30,960
Speaker 1: as a decentralized autonomous organization to basically attract investment. Rather

998
00:58:31,040 --> 00:58:33,160
Speaker 1: than do a token sale or an I c O,

999
00:58:33,240 --> 00:58:34,880
Speaker 1: which is what a lot of other projects were doing,

1000
00:58:34,920 --> 00:58:37,960
Speaker 1: they decided to do it a bit differently. Now, they

1001
00:58:38,000 --> 00:58:39,920
Speaker 1: were been on an imaginative in that they called it

1002
00:58:40,520 --> 00:58:46,200
Speaker 1: the DOW, and it kind of morphed into a decentralized

1003
00:58:46,240 --> 00:58:49,560
Speaker 1: kind of venture fund that anyone could could buy into.

1004
00:58:50,640 --> 00:58:54,320
Speaker 1: And the crowd sale for this DOW opened at the

1005
00:58:54,400 --> 00:58:59,600
Speaker 1: end of April and it was insanely popular and apparently

1006
00:58:59,720 --> 00:59:03,080
Speaker 1: at the time I sort of vaguely remember this, I wasn't.

1007
00:59:03,360 --> 00:59:07,040
Speaker 1: It wasn't something I was involved in, fortunately, but I

1008
00:59:07,080 --> 00:59:09,480
Speaker 1: do remember at the time a lot of everyone seemed

1009
00:59:09,480 --> 00:59:12,560
Speaker 1: to be talking about this dow and really it became,

1010
00:59:12,880 --> 00:59:14,720
Speaker 1: you know, it became the obsession of the of the

1011
00:59:14,840 --> 00:59:17,840
Speaker 1: Etherrem community for that time. Way more money was put

1012
00:59:17,880 --> 00:59:22,680
Speaker 1: into it than anyone had imagined. And when the sale

1013
00:59:22,800 --> 00:59:27,080
Speaker 1: finished on the twenty eighth of May, a hundred and

1014
00:59:27,240 --> 00:59:31,040
Speaker 1: fifty million dollars worth of eight had been pumped into

1015
00:59:31,080 --> 00:59:34,400
Speaker 1: the doubt and that was about four of all the

1016
00:59:34,800 --> 00:59:38,040
Speaker 1: that was currently in existence at that time. Just crazy

1017
00:59:38,120 --> 00:59:42,360
Speaker 1: like it. Really, the Eighth community went absolutely bonkers for it.

1018
00:59:43,800 --> 00:59:46,960
Speaker 1: Now what that meant was all this had been deposited

1019
00:59:47,120 --> 00:59:50,320
Speaker 1: into the Dow's smart contract and we touched on we

1020
00:59:50,360 --> 00:59:53,360
Speaker 1: remember we touched on smart contracts last time. And this

1021
00:59:53,600 --> 00:59:56,240
Speaker 1: had to be fair to the Slockett guys. This had

1022
00:59:56,360 --> 00:59:58,760
Speaker 1: been audited to make to check that it was secure,

1023
00:59:59,240 --> 01:00:02,760
Speaker 1: because obviously, you know, they're opening this investment vehicle, you've

1024
01:00:02,760 --> 01:00:04,840
Speaker 1: got to make sure the code underlying it. So they

1025
01:00:04,880 --> 01:00:07,480
Speaker 1: had had it ordered. It wasn't. It wasn't a completely

1026
01:00:08,000 --> 01:00:13,880
Speaker 1: you know, cowboy operation. Now, some in the crypt cowboys

1027
01:00:13,960 --> 01:00:19,160
Speaker 1: get sort of a bad repeat do look at these cowboys.

1028
01:00:19,160 --> 01:00:20,920
Speaker 1: I thought, you know, it's and it's kind of like, okay,

1029
01:00:20,960 --> 01:00:23,800
Speaker 1: well they can they can they can rustle cattle, but

1030
01:00:24,080 --> 01:00:27,720
Speaker 1: can they code. It's but cowboys become a kind of

1031
01:00:27,760 --> 01:00:32,640
Speaker 1: shorthand for just kind of charlatan. And yeah, why is that?

1032
01:00:32,800 --> 01:00:37,320
Speaker 1: I don't know what. Cowboys notoriously unreliable? Maybe I mean,

1033
01:00:37,400 --> 01:00:40,760
Speaker 1: if you ask the Native American Indians, maybe, like I guess,

1034
01:00:40,800 --> 01:00:42,760
Speaker 1: maybe that's where I guess they take a pretty dim

1035
01:00:42,840 --> 01:00:46,720
Speaker 1: view of Yeah, it's I feel perhaps in that respect,

1036
01:00:46,800 --> 01:00:49,120
Speaker 1: cowboys have been a bit hard done by. Yeah. Anyway,

1037
01:00:49,160 --> 01:00:52,800
Speaker 1: I'm very good at at fork in the conversation. So

1038
01:00:53,200 --> 01:00:55,320
Speaker 1: you're very good at taking the conversation to places it

1039
01:00:55,400 --> 01:00:59,800
Speaker 1: really doesn't need to go. Yeah, that's my scatti brain.

1040
01:01:01,000 --> 01:01:03,640
Speaker 1: I mean, people might argue that it's more interesting than dows,

1041
01:01:04,040 --> 01:01:07,240
Speaker 1: but it didn't. You know, I do want to know,

1042
01:01:07,320 --> 01:01:09,360
Speaker 1: I do want to know. I was just just it's

1043
01:01:09,360 --> 01:01:13,680
Speaker 1: just my a D D brain. Just cowboys, Why cowboys? Anyway?

1044
01:01:15,160 --> 01:01:17,040
Speaker 1: So no, it's quite all right. Um So yes, So

1045
01:01:17,200 --> 01:01:19,680
Speaker 1: some in the crypto community did did kind of have

1046
01:01:19,800 --> 01:01:21,960
Speaker 1: their doubts about the DOW and actually, just a day

1047
01:01:22,040 --> 01:01:25,600
Speaker 1: before the crowd sale, actually ended. Some of them published

1048
01:01:25,640 --> 01:01:28,640
Speaker 1: a paper where they kind of expressed their concerns about

1049
01:01:28,680 --> 01:01:31,960
Speaker 1: it and and was sort of calling for like a

1050
01:01:32,080 --> 01:01:34,440
Speaker 1: moratorium on it. Basically like, guys, everyone just I think

1051
01:01:34,480 --> 01:01:37,000
Speaker 1: we should just calm down. Yeah. Stop. And one of

1052
01:01:37,080 --> 01:01:40,400
Speaker 1: the stop, one of the people who put their name

1053
01:01:40,440 --> 01:01:43,000
Speaker 1: to this paper was was a chap called Emmin Gun

1054
01:01:43,120 --> 01:01:46,640
Speaker 1: Sarah who was a professor at Cornell who would later

1055
01:01:46,720 --> 01:01:51,000
Speaker 1: go on to found Avalanche, which is another ethereum competitor um.

1056
01:01:51,560 --> 01:01:54,840
Speaker 1: So yeah, another kind of crypto og popping up the

1057
01:01:54,880 --> 01:01:59,919
Speaker 1: conversation for the first time. So about a week after

1058
01:02:00,040 --> 01:02:03,040
Speaker 1: to the sale closed and the Dow was created, another

1059
01:02:03,120 --> 01:02:10,880
Speaker 1: developer called Christian right visna apologies Christian ivive mangled your name.

1060
01:02:11,440 --> 01:02:15,280
Speaker 1: He actually spotted a bug in the Dow's smart contract.

1061
01:02:15,600 --> 01:02:17,600
Speaker 1: He was looking through it and he spotted something. And

1062
01:02:17,680 --> 01:02:20,400
Speaker 1: when you when you do something, when the smart contract,

1063
01:02:20,400 --> 01:02:23,320
Speaker 1: they've got to be right done there, exactly, Yeah, because

1064
01:02:23,400 --> 01:02:26,880
Speaker 1: if they're not, then something can go very badly wrong. Now,

1065
01:02:27,360 --> 01:02:30,320
Speaker 1: Christian spotted this bug and it was what was known

1066
01:02:31,040 --> 01:02:34,760
Speaker 1: as a re entrancy bug. Now this sounds quite complicated,

1067
01:02:34,840 --> 01:02:36,600
Speaker 1: but it's I think it's fairly easy to explain. So,

1068
01:02:37,400 --> 01:02:41,760
Speaker 1: if a request was made by a user to withdraw funds,

1069
01:02:42,960 --> 01:02:48,800
Speaker 1: their balance wouldn't be updated until the funds had been sent,

1070
01:02:49,760 --> 01:02:51,600
Speaker 1: so they could just make that request over and over

1071
01:02:51,640 --> 01:02:55,280
Speaker 1: and over again. Yeah, you've got it. That's exactly what happened. Yeah,

1072
01:02:55,880 --> 01:02:59,440
Speaker 1: So if the gap between the funds being sent and

1073
01:02:59,520 --> 01:03:03,040
Speaker 1: the balance being updated was too large, which was another

1074
01:03:03,200 --> 01:03:06,880
Speaker 1: request could be made to withdraw funds, which the smart

1075
01:03:06,920 --> 01:03:09,560
Speaker 1: contract would assume was still there because the balance hadn't

1076
01:03:09,600 --> 01:03:14,920
Speaker 1: been updated. And this is exactly what happened. Anyone who

1077
01:03:15,000 --> 01:03:16,760
Speaker 1: was able to anyone who was able to spot this

1078
01:03:16,840 --> 01:03:21,080
Speaker 1: floor could submit multiple withdrawal requests and basically steal the

1079
01:03:21,160 --> 01:03:24,800
Speaker 1: funds that were in it. But because this is all

1080
01:03:24,840 --> 01:03:28,400
Speaker 1: on a Lleger, is it not obvious where that's all gone. Well,

1081
01:03:28,920 --> 01:03:30,640
Speaker 1: it was obvious where it had gone. Yeah, it's a

1082
01:03:30,640 --> 01:03:34,040
Speaker 1: good question. So that basically by the time they got

1083
01:03:34,120 --> 01:03:35,920
Speaker 1: it out, it's kind of like, okay, cool, this is

1084
01:03:36,040 --> 01:03:39,040
Speaker 1: just more hassled to deal with. Well, it all, it

1085
01:03:39,160 --> 01:03:44,480
Speaker 1: all kind of it just this extraordinary kind of saga. Basically,

1086
01:03:44,560 --> 01:03:48,600
Speaker 1: So here's what happened. Basically, someone who until very recently

1087
01:03:49,360 --> 01:03:52,120
Speaker 1: was they didn't know who it was and again Laura Shin,

1088
01:03:52,760 --> 01:03:55,600
Speaker 1: who wrote this book The Cryptopians, has managed to uncover

1089
01:03:56,000 --> 01:03:59,280
Speaker 1: their identity. So if you're interested in finding out more,

1090
01:03:59,400 --> 01:04:07,160
Speaker 1: Professor Professor Plum in the library with smart with there

1091
01:04:07,200 --> 01:04:10,000
Speaker 1: we are some some ideas for the makers of clud

1092
01:04:10,040 --> 01:04:12,840
Speaker 1: oh there to bring it into the century. Yes, So

1093
01:04:13,000 --> 01:04:16,360
Speaker 1: what this chap did was basically spot this floor in

1094
01:04:16,440 --> 01:04:18,280
Speaker 1: the code and exploit it for all it was worth.

1095
01:04:18,400 --> 01:04:23,480
Speaker 1: So on the seventeenth of June, this guy began draining

1096
01:04:23,680 --> 01:04:26,360
Speaker 1: the down and some of the you know, some of

1097
01:04:26,400 --> 01:04:28,280
Speaker 1: the dev's noticed this. It was all taking place on

1098
01:04:28,440 --> 01:04:31,360
Speaker 1: chain so they could see it, and about a hundred

1099
01:04:32,040 --> 01:04:35,720
Speaker 1: was draining out of the dow every single second. Now

1100
01:04:36,440 --> 01:04:39,040
Speaker 1: a quick side note, here's how the dow basically worked.

1101
01:04:40,040 --> 01:04:43,880
Speaker 1: Users who wanted to withdraw their funds for whatever reason

1102
01:04:44,160 --> 01:04:48,040
Speaker 1: had to create a so called child dow into which

1103
01:04:48,160 --> 01:04:51,960
Speaker 1: these funds could be siphoned, and then the main dow

1104
01:04:52,080 --> 01:04:55,720
Speaker 1: itself just carried on without them. Now, I guess the

1105
01:04:55,840 --> 01:04:57,560
Speaker 1: best way that I can find to explain this because

1106
01:04:57,560 --> 01:05:00,520
Speaker 1: it does get very complicated, but imagine it's kind of

1107
01:05:00,600 --> 01:05:02,680
Speaker 1: like parking them in a life parking your funds in

1108
01:05:02,720 --> 01:05:06,800
Speaker 1: a lifeboat on a ship so if you like these,

1109
01:05:07,080 --> 01:05:10,760
Speaker 1: these funds were being channeled this the attacker basically created

1110
01:05:10,800 --> 01:05:15,040
Speaker 1: a child down and started funneling all this eat into it.

1111
01:05:16,160 --> 01:05:19,480
Speaker 1: And they basically stopped a few hours later, but by

1112
01:05:19,560 --> 01:05:23,680
Speaker 1: this point they drained around three point six million from

1113
01:05:23,880 --> 01:05:26,600
Speaker 1: the DOW and it was sitting in this child down

1114
01:05:26,920 --> 01:05:30,880
Speaker 1: that they created. Now, as you can imagine, this caused

1115
01:05:31,000 --> 01:05:33,960
Speaker 1: a bit of a stir in the ethereum community when

1116
01:05:34,000 --> 01:05:38,360
Speaker 1: it got out, and um, it basically kicked off this

1117
01:05:38,760 --> 01:05:42,560
Speaker 1: huge debate about what what on earth they were going

1118
01:05:42,640 --> 01:05:48,120
Speaker 1: to do because the attacker was the attacker couldn't withdraw

1119
01:05:48,240 --> 01:05:51,040
Speaker 1: their funds straight away, that they had to sit in

1120
01:05:51,120 --> 01:05:54,440
Speaker 1: this child down for a certain period of time. And

1121
01:05:54,920 --> 01:05:57,520
Speaker 1: in in a book the Cryptopians, Laurishan, I mean, she

1122
01:05:57,600 --> 01:06:00,400
Speaker 1: go she she devotes whole pages to what was happening.

1123
01:06:00,440 --> 01:06:03,800
Speaker 1: You know, a group of developers who became known as

1124
01:06:03,880 --> 01:06:07,520
Speaker 1: the kind of the white hat group. They started trying

1125
01:06:07,680 --> 01:06:10,800
Speaker 1: working on ways to try and try and thwart this attack.

1126
01:06:11,600 --> 01:06:13,960
Speaker 1: But what's really I guess what's really interesting about the

1127
01:06:14,000 --> 01:06:18,200
Speaker 1: whole thing is is the debate around it. Now, some people,

1128
01:06:18,600 --> 01:06:24,000
Speaker 1: myself included, argue that this is basically theft right, what

1129
01:06:24,160 --> 01:06:26,880
Speaker 1: this what this guy had done, he'd spotted a floor

1130
01:06:26,920 --> 01:06:29,959
Speaker 1: in the code and he'd used it to basically nick

1131
01:06:30,280 --> 01:06:35,200
Speaker 1: money that wasn't his, nickothereum that wasn't his. And but

1132
01:06:35,360 --> 01:06:39,040
Speaker 1: other people in the community at the time and still

1133
01:06:39,200 --> 01:06:44,160
Speaker 1: do say, well, code's law, the smart contract was was

1134
01:06:44,600 --> 01:06:47,640
Speaker 1: was created imperfectly. There was a bug in it, and

1135
01:06:47,760 --> 01:06:52,760
Speaker 1: what this guy did was basically exploit that. And you know,

1136
01:06:52,920 --> 01:06:54,840
Speaker 1: he didn't that. They would argue that he wasn't doing

1137
01:06:54,840 --> 01:06:58,280
Speaker 1: anything illegal, he was just using the smart contract in

1138
01:06:58,360 --> 01:07:01,280
Speaker 1: the way that it was possible to use it. And

1139
01:07:02,680 --> 01:07:05,600
Speaker 1: I mean there's a point here. I think you can

1140
01:07:05,680 --> 01:07:08,120
Speaker 1: definitely kind of argue in that direction. But for me,

1141
01:07:08,520 --> 01:07:11,520
Speaker 1: it still comes down I mean there's a moral bankruptcy

1142
01:07:11,600 --> 01:07:16,000
Speaker 1: around it. Yeah, it's yeah, it was. It was a

1143
01:07:16,160 --> 01:07:20,080
Speaker 1: pretty it was a pretty incredible time for if you're

1144
01:07:20,160 --> 01:07:23,040
Speaker 1: in community. And so who was it, Well, I'm gonna

1145
01:07:23,400 --> 01:07:26,200
Speaker 1: i'll we'll we'll talk about that perhaps another time, because

1146
01:07:26,200 --> 01:07:28,200
Speaker 1: I don't want to. I don't want to take away

1147
01:07:28,240 --> 01:07:30,520
Speaker 1: from Laura shin scoop, because this was quite a scoop

1148
01:07:31,000 --> 01:07:34,760
Speaker 1: that she unfortunately or fortunately perhaps you know, it didn't

1149
01:07:34,800 --> 01:07:37,840
Speaker 1: turn out to be like some big figure in crypto,

1150
01:07:38,120 --> 01:07:40,880
Speaker 1: like because that really would have been an amazing story.

1151
01:07:40,960 --> 01:07:43,680
Speaker 1: But yeah, this guy was on the house lights them Massachusetts,

1152
01:07:44,640 --> 01:07:46,560
Speaker 1: that would have been even better. No, it was actually

1153
01:07:46,600 --> 01:07:52,040
Speaker 1: another kind of crypto person who a crypto developer, but

1154
01:07:52,280 --> 01:07:56,040
Speaker 1: not not anyone famous or particularly well known. There will

1155
01:07:56,080 --> 01:07:59,760
Speaker 1: be so they are, Yeah, they're quite notorious. Now. Now,

1156
01:08:00,000 --> 01:08:03,080
Speaker 1: as I said, the DOW code basically stipulated that child

1157
01:08:03,160 --> 01:08:06,440
Speaker 1: dows couldn't be cashed out straight away. So there was

1158
01:08:06,520 --> 01:08:09,600
Speaker 1: this kind of window in which the Ethereum developers needed

1159
01:08:09,640 --> 01:08:12,240
Speaker 1: to decide what the heck they were going to do,

1160
01:08:13,560 --> 01:08:18,200
Speaker 1: and many thought that whatever they decided to do or

1161
01:08:18,680 --> 01:08:23,760
Speaker 1: not do could irreparably damage Ethereum for good. It was,

1162
01:08:24,000 --> 01:08:25,840
Speaker 1: it was kind of it was on that the whole

1163
01:08:25,840 --> 01:08:27,599
Speaker 1: project was on a bit of a knife edge at

1164
01:08:27,640 --> 01:08:32,840
Speaker 1: this point, and they were left with a very stark choice.

1165
01:08:32,920 --> 01:08:35,559
Speaker 1: There was there was a course of action that they

1166
01:08:35,600 --> 01:08:39,799
Speaker 1: could take in order to in order to counter this attack,

1167
01:08:41,160 --> 01:08:43,559
Speaker 1: and we'll look at that next time. Yeah, we're going

1168
01:08:43,600 --> 01:08:47,080
Speaker 1: to finish on a cliffhanger. The look on your face,

1169
01:08:49,080 --> 01:08:54,920
Speaker 1: how could you? I'm generally goutt it good? Good, Well,

1170
01:08:54,960 --> 01:08:56,360
Speaker 1: it'd be easier to get you back in here for

1171
01:08:56,400 --> 01:09:02,960
Speaker 1: the next time, so I google it. In conclusion, basically,

1172
01:09:03,040 --> 01:09:05,360
Speaker 1: Ethereum as we see, as we saw, blew the whole

1173
01:09:05,439 --> 01:09:08,200
Speaker 1: crypto industry wide open with what it enabled people to do.

1174
01:09:08,360 --> 01:09:11,800
Speaker 1: But even so, it wasn't all plain sailing, and these

1175
01:09:11,880 --> 01:09:14,800
Speaker 1: personal conflicts, these kind of existential risks, if you like,

1176
01:09:14,960 --> 01:09:18,040
Speaker 1: they just continued. Um. You know, the bigger it got,

1177
01:09:18,479 --> 01:09:23,000
Speaker 1: the more problems came along, more money, more problems. Yeah,

1178
01:09:23,479 --> 01:09:27,439
Speaker 1: as as you always say, Um, So next time we'll

1179
01:09:27,479 --> 01:09:30,799
Speaker 1: look at basically how the Ethereum community fought back against

1180
01:09:30,880 --> 01:09:34,719
Speaker 1: the Dow hacker. We'll also look at some further attacks

1181
01:09:34,760 --> 01:09:37,519
Speaker 1: that it came under, because you know, there was still

1182
01:09:37,680 --> 01:09:39,880
Speaker 1: there was still a lot of strife ahead. And I

1183
01:09:39,920 --> 01:09:41,760
Speaker 1: think we'll look at the I c O boom as well.

1184
01:09:41,760 --> 01:09:43,599
Speaker 1: I touched on that at the beginning of the episode.

1185
01:09:43,600 --> 01:09:46,439
Speaker 1: But that's yeah, that that's some very entertaining craziness that

1186
01:09:46,520 --> 01:09:51,320
Speaker 1: went on back in there back in the day. Sweet Okay, Mike,

1187
01:09:51,600 --> 01:09:54,280
Speaker 1: it's been a pleasure. I hope you feel likewise. Yeah, yeah,

1188
01:09:54,439 --> 01:09:56,559
Speaker 1: I hope all the listeners feel likewise. I think there

1189
01:09:56,800 --> 01:09:59,760
Speaker 1: was a good episode. Good, good, well, thanks for sticking

1190
01:09:59,800 --> 01:10:03,360
Speaker 1: with everyone, And yeah, do join us next time to

1191
01:10:03,560 --> 01:10:06,680
Speaker 1: discover what happened. Thank you so much for listening to

1192
01:10:06,920 --> 01:10:09,200
Speaker 1: the coin Bureau podcast. If you'd like to learn more

1193
01:10:09,240 --> 01:10:13,120
Speaker 1: about cryptocurrency, you can visit our YouTube channel at YouTube

1194
01:10:13,200 --> 01:10:15,960
Speaker 1: dot com forward slash coin Bureau. You can also go

1195
01:10:16,080 --> 01:10:18,800
Speaker 1: to coin bureau dot com for loads more information about

1196
01:10:18,880 --> 01:10:21,479
Speaker 1: all things crypto. You can follow me on Twitter and

1197
01:10:21,600 --> 01:10:24,120
Speaker 1: at coin bureau or one word, and I'm also active

1198
01:10:24,160 --> 01:10:27,559
Speaker 1: on TikTok and Instagram as well. First of all, it's

1199
01:10:27,600 --> 01:10:31,920
Speaker 1: not thank you for listening, you're welcome for great content. Yeah,

1200
01:10:32,439 --> 01:10:35,839
Speaker 1: like this is free and they're learning about a fairly

1201
01:10:35,960 --> 01:10:39,280
Speaker 1: great topic in a non boring way. If you'd like

1202
01:10:39,400 --> 01:10:42,160
Speaker 1: to visit me and hear more about me, go to

1203
01:10:42,280 --> 01:10:45,080
Speaker 1: mooch about, m O O C H A, b O

1204
01:10:45,400 --> 01:10:58,599
Speaker 1: U T or else. For more podcasts from my Heart Radio,

1205
01:10:58,880 --> 01:11:01,920
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1206
01:11:02,080 --> 01:11:12,920
Speaker 1: wherever we get your podcasts. The coin burea podcast is

1207
01:11:12,960 --> 01:11:14,799
Speaker 1: a production of I Heart Radio