WEBVTT - Vitalik Buterin’s Plan for Legitimating Crypto 0:00:15.396 --> 0:00:24.036 Pushkin from Pushkin Industries. This is Deep Background, the show 0:00:24.116 --> 0:00:27.916 where we explore the stories behind the stories in the news. 0:00:28.436 --> 0:00:33.156 I'm Noah Feldman. Today we have a remarkable guest and 0:00:33.236 --> 0:00:37.276 a remarkable conversation to share with you here on Deep Background. 0:00:39.156 --> 0:00:42.596 I was fortunate enough to have a wide ranging conversation 0:00:42.996 --> 0:00:48.156 with Vitalik Bhuteran. Vitalic is the co founder of Ethereum, 0:00:48.196 --> 0:00:52.076 which you may have heard of as the other extraordinarily 0:00:52.236 --> 0:00:57.796 popular cryptocurrency and a broader blockchain that is a complex 0:00:57.876 --> 0:01:01.876 distributed computer network on which it is possible to build 0:01:02.116 --> 0:01:07.476 all sorts of different applications. Vitalik has contributed centrally to 0:01:07.596 --> 0:01:12.116 creating an enormous infrastructure and a tremendous amount of wealth, 0:01:12.716 --> 0:01:15.876 and unsurprisingly that's made him into a kind of folk 0:01:15.996 --> 0:01:19.676 hero of the crypto world. Oh and I may have 0:01:19.716 --> 0:01:23.436 forgotten to mention this Vitalk is all of twenty seven 0:01:23.596 --> 0:01:28.876 years old. Vitalik is a kind of public intellectual of 0:01:29.036 --> 0:01:33.436 the cryptocurrency and blockchain space. He has a blog where 0:01:33.436 --> 0:01:38.116 his posts are more like fully crafted, well thought out essays. 0:01:38.396 --> 0:01:41.196 This blog, which you can find at vitalic dot Ca, 0:01:41.356 --> 0:01:43.956 turns out to be one of the most extraordinary resources 0:01:43.956 --> 0:01:46.836 you can imagine for anyone who, like me, is trying 0:01:46.876 --> 0:01:49.716 to make sense of this new and complex set of 0:01:49.756 --> 0:01:53.916 developments in the world around blockchain. What inspired me to 0:01:53.956 --> 0:01:56.316 ask Metallic to come on the show was a particular 0:01:56.356 --> 0:02:00.876 post or essay on his blog about the nature of legitimacy. 0:02:01.596 --> 0:02:06.196 Legitimacy is a central concept in government, a central concept 0:02:06.236 --> 0:02:09.836 in constitutions, a central concept in property law. And I 0:02:09.916 --> 0:02:14.076 was stunned and amazed to see how central Vitalic himself 0:02:14.236 --> 0:02:17.156 made it to the whole structure of the blockchain and 0:02:17.276 --> 0:02:21.716 of cryptocurrency. I really wanted to delve deeper into his 0:02:21.836 --> 0:02:25.116 idea and to how it relates to the entire system 0:02:25.156 --> 0:02:29.236 of crypto and Vitalik graciously agreed to come and talk 0:02:29.276 --> 0:02:36.076 about exactly that topic. Vitalic, thank you so much for 0:02:36.156 --> 0:02:40.756 being here. I really appreciate your work because I see 0:02:40.756 --> 0:02:44.316 who as somebody who is simultaneously a creator, an inventor 0:02:44.316 --> 0:02:46.956 of things, and also a public intellectual of those same things. 0:02:47.436 --> 0:02:50.716 And I was extremely struck by one of the many 0:02:50.756 --> 0:02:52.596 fascinating posts that you put on your blog, and they're 0:02:52.596 --> 0:02:55.276 really I mean, most people would publish them as essays 0:02:55.276 --> 0:02:56.956 and magazines you put them up on your blog, so 0:02:57.036 --> 0:03:02.236 that makes them easily accessible about legitimacy, and in particular 0:03:02.516 --> 0:03:05.636 about the idea that legitimacy is a scarce resource and 0:03:05.836 --> 0:03:08.876 something that we need to think very seriously about. In 0:03:08.876 --> 0:03:12.516 the text of the blockchain. It grabbed my attention because 0:03:12.796 --> 0:03:14.996 my day job as being a constitutional law professor, and 0:03:14.996 --> 0:03:16.916 so what I do is I think about legitimacy twenty 0:03:16.956 --> 0:03:19.396 four seven three to six five, And I was fascinated 0:03:19.436 --> 0:03:22.156 to see the ways that you were engaging with the topic. 0:03:22.556 --> 0:03:26.036 So I wonder if we could start, maybe with your 0:03:26.116 --> 0:03:29.796 working definition of legitimacy, and then from there I want 0:03:29.836 --> 0:03:32.636 you to talk to us about your leading and really 0:03:32.636 --> 0:03:35.796 fascinating example that you given the essay, which is the 0:03:35.916 --> 0:03:39.556 great powable of Steam and Hive. So maybe the start 0:03:39.596 --> 0:03:43.316 by what you mean by legitimacy. Sure, So the thing 0:03:43.396 --> 0:03:47.556 that I use the word legitimacy to refer to is 0:03:47.636 --> 0:03:51.676 this idea that there are these collective patterns of behavior 0:03:51.956 --> 0:03:55.996 where people all act in a particular way, so they 0:03:56.076 --> 0:04:00.956 play a part in enacting and participating in some particular outcome. 0:04:01.276 --> 0:04:05.076 Basically because there exists this kind of collective idea in 0:04:05.716 --> 0:04:09.676 everyone's heads, that this outcome is like it or not. 0:04:09.756 --> 0:04:12.396 It is a thing that's happening, and everyone is okay 0:04:12.436 --> 0:04:14.716 with going along with it. Right. So basically it's this 0:04:14.796 --> 0:04:17.676 sort of self referential concept that you know, there's a 0:04:17.716 --> 0:04:20.436 lot of different situations in the world where the thing 0:04:20.516 --> 0:04:23.036 that is in everyone's interests is to just sort of 0:04:23.076 --> 0:04:25.956 play along with the same game that everyone else is playing. Right, So, like, 0:04:25.996 --> 0:04:28.556 if everyone else is driving on the left side of 0:04:28.556 --> 0:04:29.996 the road, it makes a lot of sense for you 0:04:30.036 --> 0:04:31.636 to drive on the right side of the road. If 0:04:31.636 --> 0:04:33.436 everyone else is driving on the left side of the road, 0:04:33.436 --> 0:04:35.876 it makes sense for you to drive on the left 0:04:35.876 --> 0:04:38.836 side of the road. Even if there aren't any police 0:04:38.876 --> 0:04:41.996 around enforcing the rules, it would still mostly work. And 0:04:42.556 --> 0:04:44.876 you know, even if like you personally have some slight 0:04:44.956 --> 0:04:47.676 preference for one direction or the other, it's still in 0:04:47.796 --> 0:04:51.516 your interest to just sort of go along with the 0:04:51.556 --> 0:04:54.596 strategy that everyone else is going along with. And I 0:04:54.636 --> 0:04:59.596 think that this is something that goes beyond very simple 0:04:59.636 --> 0:05:04.156 examples like that. I think it's an extremely important concept 0:05:04.276 --> 0:05:06.996 in just social relations in general. Right, And I gave 0:05:07.036 --> 0:05:09.356 a few examples of this kind of both on the 0:05:09.396 --> 0:05:12.036 blockchain and off So just starting with a couple of 0:05:12.036 --> 0:05:15.876 off the blockchain examples. Like language is one good example, right, Like, 0:05:16.436 --> 0:05:19.396 you know we argue whether or not a dolphin is 0:05:19.396 --> 0:05:21.876 a fish, right, you know, a version of English where 0:05:22.196 --> 0:05:24.316 a dolphin is a fish would work totally fine. A 0:05:24.396 --> 0:05:26.356 version of English where a dolphin isn't a fish would 0:05:26.356 --> 0:05:29.316 also work totally fine. But you know, even more important 0:05:29.356 --> 0:05:32.156 than getting the right answer is just effects that we 0:05:32.196 --> 0:05:37.476 agree on an answer. National borders are also another example 0:05:37.556 --> 0:05:42.876 of legitimacy, right, Like if aliens came in tomorrow and they, yeah, 0:05:42.956 --> 0:05:47.036 kind of edited all our brains and they to make 0:05:47.156 --> 0:05:49.396 us all think that, say the border between the US 0:05:49.436 --> 0:05:52.516 and Canada is five kilometers north of where it is today, Well, 0:05:52.756 --> 0:05:54.436 you know, the world will just keep on going. But 0:05:54.476 --> 0:05:57.156 the border between the US and Canada actually would be 0:05:57.236 --> 0:06:00.396 five kilometers north of where it is today. So governments 0:06:00.396 --> 0:06:05.716 have legitimacy. Systems of property rights have legitimacy, and systems 0:06:05.756 --> 0:06:09.036 of rules inside of watchains can have legitimacy as well. 0:06:09.756 --> 0:06:13.236 One pushback question before we get to the big parable. 0:06:13.476 --> 0:06:17.756 In my world, when we talk about legitimacy, we usually 0:06:18.116 --> 0:06:21.396 build into it a specific component that's in some of 0:06:21.436 --> 0:06:23.476 your examples, but maybe not in all of them, and 0:06:23.676 --> 0:06:26.236 you did allude to it, and that is not only 0:06:26.556 --> 0:06:29.796 that this is the game that's happening right now and 0:06:29.836 --> 0:06:32.036 it's in my interest to play in this game, but 0:06:32.116 --> 0:06:34.396 also the component that I think to use your words were, 0:06:34.676 --> 0:06:37.596 and I'm okay with that, right. So in other words, 0:06:37.636 --> 0:06:40.316 that's the part of legitimacy that is sometimes called not 0:06:40.396 --> 0:06:43.956 just descriptive but normative, you know, the m I okay 0:06:44.036 --> 0:06:46.196 with that part of it. And as you mentioned, it's 0:06:46.196 --> 0:06:49.396 a bit of a self referential concept because we can 0:06:49.436 --> 0:06:52.036 ask whether a system has legitimacy by asking do the 0:06:52.156 --> 0:06:55.756 people in that system feel okay with the way things 0:06:55.756 --> 0:06:58.076 that are working. The reason I bring this up, even 0:06:58.076 --> 0:07:00.396 though it's a teeny bit abstract, is that in your 0:07:00.436 --> 0:07:03.956 examples of pure coordination games like everyone drive on the 0:07:04.036 --> 0:07:05.396 right side of the road or everyone drive on the 0:07:05.476 --> 0:07:08.516 left side of the road, it literally doesn't matter which 0:07:08.516 --> 0:07:10.756 side we choose. Right in the UK and in Japan 0:07:10.796 --> 0:07:12.556 they drive on the left. In other countries they drive 0:07:12.596 --> 0:07:15.276 on the right. And you do it because everyone else 0:07:15.356 --> 0:07:17.356 is doing it, but you also do it because if 0:07:17.396 --> 0:07:20.756 you don't, you're going to smash into another car. So 0:07:21.036 --> 0:07:23.036 you're okay with it, but you're only okay with it 0:07:23.076 --> 0:07:24.596 in the sense that you had to pick one, and 0:07:24.636 --> 0:07:28.756 it's arbitrary as to which one you pick. In contrast, 0:07:28.796 --> 0:07:34.276 if you think about examples like borders, governments, property rights, 0:07:34.796 --> 0:07:37.236 saying you're okay with it means something a little more 0:07:37.276 --> 0:07:39.996 than that. It doesn't just mean, you know, like in 0:07:40.036 --> 0:07:43.196 a government of absolute arbitrary power, well, I'm going to 0:07:43.236 --> 0:07:44.676 go along with what the government says because I'm going 0:07:44.716 --> 0:07:48.156 to be killed. Otherwise, such a government might be legitimate 0:07:48.196 --> 0:07:51.396 if everyone starts saying and I'm okay with that, But 0:07:51.476 --> 0:07:54.076 the government might be illegitimate even if people are following 0:07:54.156 --> 0:07:57.796 the rules if people say to themselves, I'm not okay 0:07:57.836 --> 0:07:59.596 with this, but what am I going to do? I 0:07:59.676 --> 0:08:01.756 have no choice, And then if I knew that no 0:08:01.796 --> 0:08:04.676 one were watching, I would break the rules. So I 0:08:04.716 --> 0:08:07.316 just I guess before we dive into the concrete example, 0:08:07.356 --> 0:08:10.356 I wonder how important is it to you to give 0:08:10.356 --> 0:08:14.436 a definition of legitimacy that could be satisfied without our 0:08:14.556 --> 0:08:18.556 focusing on how okay with it people are. No, It's 0:08:18.596 --> 0:08:21.556 definitely a very good question and a very important points right, 0:08:21.596 --> 0:08:25.196 because people, I think do use the word sort of 0:08:25.276 --> 0:08:28.516 equivocating between the positive way of looking at things and 0:08:28.596 --> 0:08:30.756 the normative way of looking at things. So like the 0:08:30.796 --> 0:08:33.156 way that I defined legitimacy in the post, and you know, 0:08:33.316 --> 0:08:36.076 the government of North Korea is the legitimate government of 0:08:36.116 --> 0:08:40.996 North Korea, right, because exactly like you know, even if 0:08:41.276 --> 0:08:44.036 lots of people are really unhappy with it, North Koreans 0:08:44.116 --> 0:08:47.476 all act like it's the government of North Korea. I know, 0:08:47.516 --> 0:08:49.436 America act so like it's the government of North Korea. 0:08:49.516 --> 0:08:52.156 South Korea act so like it's the government of North Korea. Right. 0:08:52.196 --> 0:08:56.356 But then at the same time, I also later on 0:08:56.396 --> 0:08:59.156 in my post, I bring up these different theories of legitimacy, 0:08:59.356 --> 0:09:05.196 basically ways in which or reasons by which some outcome 0:09:05.276 --> 0:09:08.836 could be perceived as sell legitimate, and number one in 0:09:08.836 --> 0:09:11.756 the way I put brute force, right, But aside from 0:09:11.876 --> 0:09:15.196 number one, I had all of these others and the 0:09:15.476 --> 0:09:17.996 other theories of legitimacy having to do with things like 0:09:18.156 --> 0:09:21.996 fairness and participation and continuity and like, these are things 0:09:22.036 --> 0:09:25.516 that we would be much more morally okay with. And 0:09:25.836 --> 0:09:29.836 I think if I had any point on that question, 0:09:29.996 --> 0:09:34.716 I would say that like descriptive legitimacy and a kind 0:09:34.716 --> 0:09:38.796 of moral acceptability. Like they're both real contexts, and I 0:09:38.876 --> 0:09:40.756 do think that they have some kid action even in 0:09:40.796 --> 0:09:44.156 the real world, right, Like something being morally acceptable to 0:09:44.196 --> 0:09:46.516 the people in that context as definitely is something that 0:09:46.556 --> 0:09:51.276 really contributes to that thing being legitimate in a descriptive sense, 0:09:51.316 --> 0:09:55.116 but it's also not the only thing. Let's turn now 0:09:55.196 --> 0:09:58.316 to this what I'm calling a parable And like a 0:09:58.356 --> 0:10:01.036 lot of great essays, your essay is built around a 0:10:01.156 --> 0:10:04.116 central example, and I wonder if you would describe to 0:10:04.196 --> 0:10:08.596 us the parable of Steam and Hive. Sure. So, there 0:10:08.676 --> 0:10:11.356 was a sub blockchain called Steam, right, it was a 0:10:11.636 --> 0:10:14.956 trying to be a decentralized social media thing, like you 0:10:15.116 --> 0:10:18.756 could have some system for built in tipping. There's incentives, 0:10:18.916 --> 0:10:22.556 there's like decentralized content curation of sometime. You know, it 0:10:22.956 --> 0:10:26.076 was a very interesting experiment, right, But there is also 0:10:26.196 --> 0:10:29.636 this kind of political intrium inside of the Steam ecosystem 0:10:29.636 --> 0:10:32.956 that happens where basically at the beginning there is Steam 0:10:32.996 --> 0:10:35.556 the blockchain, and then there is Steam the company, and 0:10:35.716 --> 0:10:41.316 Steam the company that it happens everywhere exactly like you know, 0:10:41.316 --> 0:10:45.116 there's a the Ethereum Foundation, there's the z cash Foundation, 0:10:45.196 --> 0:10:49.356 there's all these foundations, but the big difference between a 0:10:49.396 --> 0:10:53.276 blockchain and a traditional centralized service is that in the 0:10:53.276 --> 0:10:57.636 centralized context, the like Twitter the company based has the 0:10:57.676 --> 0:11:01.316 technical ability to do whatever they want to Twitter the service, right. 0:11:01.716 --> 0:11:05.156 But Steam the company versus Steam the blockchain, there's actually 0:11:05.196 --> 0:11:07.836 a bit more of a difference. And most of the 0:11:07.876 --> 0:11:10.356 time in crypto land, I don't really think about this, right, 0:11:10.516 --> 0:11:12.716 But what happened here was that the owner of a 0:11:12.796 --> 0:11:16.916 Steam the company decided to sell Steam the company. Now 0:11:16.916 --> 0:11:19.556 it's not actually possible to sell Steam the blockchain, right 0:11:19.556 --> 0:11:22.116 because Steam the blockchain is a thing that only exists 0:11:22.196 --> 0:11:26.996 because you have these thousands of independent, coordinating participants and they, 0:11:28.476 --> 0:11:30.636 you know, ultimately have the right to run whatever code 0:11:30.636 --> 0:11:34.196 they want. But you know, ultimately, like what code gets 0:11:34.276 --> 0:11:37.436 run is constrained by the facts that people have to 0:11:37.476 --> 0:11:39.596 agree to all run the same code. And if you 0:11:39.676 --> 0:11:42.756 run different code from everyone else, then you know, even 0:11:42.756 --> 0:11:44.476 if your code is better, you're just kind of off 0:11:44.516 --> 0:11:46.396 in your own little universe and you're not talking to 0:11:46.436 --> 0:11:49.196 anyone else. Right. The blockchain's kind of forked, and you know, 0:11:49.236 --> 0:11:51.316 if you're on the minority for it, that's a lonely 0:11:51.316 --> 0:11:55.276 place to be. So Steam the company got sold and 0:11:55.676 --> 0:11:58.756 the new buyer, the new owner or Steam the company 0:11:58.796 --> 0:12:03.756 as this a character named Justin's son. And Justin's son 0:12:04.196 --> 0:12:09.076 is this crypto entrepreneur who's you know, a very controversial 0:12:09.516 --> 0:12:12.396 and is widely known for doing a lot of things 0:12:12.396 --> 0:12:15.356 that I personally against it are unethical, like you know, 0:12:15.436 --> 0:12:18.516 like his white paper, plagiarized ipfs, and there's other examples. 0:12:18.836 --> 0:12:21.956 So there's reasons for the community to be a kind 0:12:21.956 --> 0:12:25.676 of very suspicious of him. So overnight, basically this a 0:12:25.756 --> 0:12:28.236 sale was announced and I don't think the community was 0:12:28.276 --> 0:12:32.276 really consulted about it and the company to clarified by 0:12:32.276 --> 0:12:33.876 the way, because I think it's useful for people who 0:12:33.876 --> 0:12:36.556 are like me, who are come from other worlds. The 0:12:36.556 --> 0:12:39.516 things that he's done that you consider unethical are unethical 0:12:39.596 --> 0:12:44.756 within the ethical framework shared by other people who operate 0:12:44.796 --> 0:12:47.556 in and live in the blockchain. They're not illegal in 0:12:47.596 --> 0:12:49.036 some sense of the term. Or do you think maybe 0:12:49.036 --> 0:12:52.116 they were illegal in some cases it's possible that he 0:12:52.236 --> 0:12:54.396 did illegal stuff. It's possible he didn't. I don't. I 0:12:54.396 --> 0:12:57.436 don't know, but like plagiarism, that's one example, right, Like 0:12:57.476 --> 0:13:00.636 I don't that's not illegal, but that is considered unethical 0:13:00.676 --> 0:13:03.276 in a context much broader than the blockchain space. And 0:13:03.956 --> 0:13:06.076 like his white paper, did you know a copy a 0:13:06.116 --> 0:13:08.396 bunch of pages of I think it was the IPFS 0:13:08.396 --> 0:13:12.076 white paper pretty directly. Okay, thanks so close, Parenthices, go 0:13:12.116 --> 0:13:16.036 back to your story. Okay, So basically overnight, right, the 0:13:16.116 --> 0:13:20.396 Steam community woke up and they realized that Steam the Company, 0:13:20.676 --> 0:13:22.916 this thing that was supposed to be a steward of 0:13:22.916 --> 0:13:25.356 Steam the blockchain, and up until then they kind of 0:13:25.356 --> 0:13:28.356 trusted without really thinking about it, is suddenly controlled by 0:13:28.356 --> 0:13:32.276 a potentially hostile actor. And you know, they were obviously 0:13:32.396 --> 0:13:35.996 very scared by this, right, and so they and they 0:13:36.036 --> 0:13:39.276 before there was this sort of informal gentlemen's agreement that 0:13:39.676 --> 0:13:43.036 the funds that are that are controlled by Steam the Company. 0:13:43.196 --> 0:13:45.156 So Steam the Company had twenty percent of all the 0:13:45.156 --> 0:13:48.836 Steam tokens would be like are sort of held in trust, right, 0:13:48.836 --> 0:13:53.676 and they're intended for the ongoing development of the Steam ecosystem, 0:13:53.676 --> 0:13:55.796 and they're not just like, you know, the personal play 0:13:55.796 --> 0:13:58.956 money of the founder. But then when Justin Sun comes in, 0:13:59.116 --> 0:14:01.476 they did not have the trust that this agreement would 0:14:01.476 --> 0:14:04.116 be honored, and so they had decided to make a 0:14:04.156 --> 0:14:07.356 move on the Steam blockchain, so using the voting mechanism 0:14:07.396 --> 0:14:10.276 of the allegated proof of stakes mechanism that's built into 0:14:10.316 --> 0:14:13.236 Steam in order to just add a rule that says 0:14:13.276 --> 0:14:16.356 that that accounts cannot be used to vote, because like, 0:14:16.436 --> 0:14:18.196 if that accounts could be used to vote, right, that's 0:14:18.196 --> 0:14:20.316 one accountable twenty percent of all the Steam tokens, and 0:14:20.356 --> 0:14:23.436 that would just give Justin Son essentially like you and 0:14:23.476 --> 0:14:26.596 a later all rule setting power. So just pause for 0:14:26.636 --> 0:14:30.676 clarification purposes, the people who the other holders of the 0:14:30.716 --> 0:14:36.796 tokens exercise their voting power to disenfranchise whoever would be 0:14:36.836 --> 0:14:38.036 the owner of it. In this case, it was a 0:14:38.076 --> 0:14:42.476 particular person, the owner of twenty percent of the tokens 0:14:42.476 --> 0:14:44.756 that were out there. So as it were eighty percent, 0:14:44.836 --> 0:14:46.196 I mean it made it probably wasn't all of them, 0:14:46.356 --> 0:14:49.556 but a majority of the of all the voters voted 0:14:49.596 --> 0:14:54.356 to disenfranchise the person who held twenty percent, right, Okay, 0:14:54.396 --> 0:14:56.356 go on. That's fascinating in its own right because of 0:14:56.396 --> 0:14:58.596 the way that's parable as headache. It is. Yeah, So 0:14:58.716 --> 0:15:01.716 Justin Son struck back, right, and what he did was 0:15:01.756 --> 0:15:05.436 that he made another proposal. The eventual result of them 0:15:05.556 --> 0:15:09.556 was to basically like kick out the delegates, the kind 0:15:09.556 --> 0:15:14.316 of elected participants that participated in the original move against him, 0:15:14.556 --> 0:15:17.916 and basically kind of secure majority control over the blockchain 0:15:17.996 --> 0:15:20.996 to the point where he could not be diswatched anymore. 0:15:21.436 --> 0:15:25.236 And he did this using not just funds that he 0:15:25.276 --> 0:15:28.436 had directly, but he also talked to exchanges, right, because 0:15:28.596 --> 0:15:30.876 there's a lot of users that just have like their 0:15:30.916 --> 0:15:34.476 Steam tokens held by exchanges and exchanges like they have 0:15:34.556 --> 0:15:37.156 the private key, so they theoretically have the ability to vote. 0:15:37.356 --> 0:15:39.116 And so he wants to a bunch of these big 0:15:39.116 --> 0:15:41.876 exchanges and convinced them to make this kind of big 0:15:41.956 --> 0:15:46.196 move to basically make a counter vote reverse those results 0:15:46.236 --> 0:15:51.076 and just secure power for himself. Now again clarification question, 0:15:51.316 --> 0:15:54.476 when you say secure power for himself, if you asked him, 0:15:54.516 --> 0:15:57.036 if we had him on the show, wouldn't he say, 0:15:57.476 --> 0:15:59.636 what do you mean? Secure power for myself? They just 0:15:59.716 --> 0:16:03.076 disenfranchised me, and so all I was trying to do 0:16:03.236 --> 0:16:05.836 was get back my voting power. I mean, leaving aside 0:16:05.836 --> 0:16:07.276 whether that would be sure or not. Is that what 0:16:07.316 --> 0:16:09.836 he would say? I think so? And what do you 0:16:09.876 --> 0:16:13.236 make of it? I mean, well, there's multiple levels to this, right, 0:16:13.276 --> 0:16:16.316 because this is one of those situations where there's like, 0:16:17.156 --> 0:16:21.476 like there was this sort of informal agreement that the 0:16:21.596 --> 0:16:24.236 coins owned by the companies should like should not be 0:16:24.316 --> 0:16:26.596 used to vote in before the handover, were not being 0:16:26.716 --> 0:16:29.756 used to vote. But then of course that agreements have 0:16:29.956 --> 0:16:33.076 ended up never being put into stone. So you can 0:16:33.076 --> 0:16:35.796 blame the community for not being careful as well. You know, 0:16:35.876 --> 0:16:37.876 you can blame the ritual owners of Steam for not 0:16:37.916 --> 0:16:41.076 being transparent and not consulting with the community about the handover. 0:16:41.476 --> 0:16:46.316 I think ultimately, like the thing that caused the community 0:16:46.356 --> 0:16:48.436 to do this is just that like they you know, 0:16:48.516 --> 0:16:52.116 did not want to participate in a blockchain where one 0:16:52.116 --> 0:16:55.516 participant had this amount of power Like that just sort 0:16:55.556 --> 0:16:57.756 of goes against what even the purpose of a blockchain 0:16:57.876 --> 0:17:00.236 is trying to be. So then what happened when he 0:17:00.316 --> 0:17:02.636 got back the power that he had been taken haven't 0:17:02.636 --> 0:17:05.196 been teamed from him. So when he got that power back, 0:17:05.356 --> 0:17:08.996 at that point, he had power secured in the sense 0:17:09.276 --> 0:17:11.436 that he had all of these delegates, he had a 0:17:11.436 --> 0:17:14.636 lot of coins, and so the only move that the 0:17:14.636 --> 0:17:17.596 community had available was to do this sort of extra 0:17:17.636 --> 0:17:20.596 protocol appeal, right, they announced that they would make a 0:17:20.636 --> 0:17:24.196 hard work. They would just release a new version of 0:17:24.236 --> 0:17:27.796 the software, and that new version of the software would 0:17:28.716 --> 0:17:32.236 basically remove the right to vote from and I think 0:17:32.356 --> 0:17:37.076 even burned the coins of anyone who participated on justin 0:17:37.156 --> 0:17:39.316 sun side during the votes, right, so they made this 0:17:39.356 --> 0:17:42.716 protocol keeping while keeping the value of their own coins, 0:17:42.756 --> 0:17:45.796 I guess, transposing it precisely. So they decided this is 0:17:45.916 --> 0:17:48.996 totally fascinating, and it's it's where your story starts to 0:17:49.036 --> 0:17:51.156 look really different from what could have happened in a country. 0:17:51.236 --> 0:17:53.716 Let's say they said, we're going to go and make 0:17:53.756 --> 0:17:58.676 our own new ecosystem copied from the old ecosystem, excluding 0:17:58.796 --> 0:18:00.956 the wealth and the power of the people whom we 0:18:01.556 --> 0:18:04.996 now see as the bad guys, replicating our own wealth 0:18:04.996 --> 0:18:07.876 and power, but in theory in precise proportion to how 0:18:07.876 --> 0:18:11.476 it's allocated among us right now, minus the parts that 0:18:11.516 --> 0:18:16.796 we burned, exactly. And they did this right, and for 0:18:17.316 --> 0:18:20.316 trademark reasons, they had to rename it, so instead of 0:18:20.316 --> 0:18:22.676 being Steam, it was called Hive, and a huge part 0:18:22.716 --> 0:18:25.356 of the ecosystem actually did migrate, right. So I think 0:18:25.596 --> 0:18:28.436 since then the market caps over the two have actually 0:18:28.516 --> 0:18:30.556 been sort of pretty neck and neck against each other. 0:18:31.876 --> 0:18:35.436 So what is your takeaway from this whole parable? Right? 0:18:35.476 --> 0:18:39.276 I mean, you know, many influential people in history, religious 0:18:39.316 --> 0:18:41.516 leaders amongst them, like to speak in parables. It's a 0:18:41.516 --> 0:18:43.316 good way to reach people, but it's sometimes helpful to 0:18:43.356 --> 0:18:45.396 explain what the parable means. So what does this parable 0:18:45.436 --> 0:18:48.356 mean to you? Right? So the conclusion that I made 0:18:48.396 --> 0:18:51.796 in the post, right, is that this was proof that 0:18:52.356 --> 0:18:55.396 like Justin Sun never actually owns the coins. Like when 0:18:55.396 --> 0:18:59.116 we talk about ownership, there's you know, this concept of 0:18:59.156 --> 0:19:02.276 like usas fructus and abusis I think is the Latin 0:19:02.316 --> 0:19:04.436 phrase like you can use the property, you can enjoy it, 0:19:04.516 --> 0:19:06.676 or you can abuse it. Like those are the rights 0:19:06.676 --> 0:19:08.996 of ownership. Right, If you own something, you can you know, 0:19:09.196 --> 0:19:11.916 basically do whatever you want with it, with the exception 0:19:11.996 --> 0:19:14.836 of regulations that apply regardless of what property you're using 0:19:14.876 --> 0:19:17.436 to do things. But clearly, in this sense, like Justin 0:19:18.316 --> 0:19:21.476 used the coins that were in his possession, but he 0:19:21.596 --> 0:19:23.956 ended up not being able to use them successfully, right, 0:19:23.996 --> 0:19:27.316 because you know, the ecosystem forked off and he was 0:19:27.436 --> 0:19:30.836 not able to sort of fully implement the thing that 0:19:30.876 --> 0:19:33.436 he was entitled to emplements. According to the formal rules 0:19:33.436 --> 0:19:36.116 of the system. And what that shows to me is 0:19:36.156 --> 0:19:38.756 that this is proof that justin sun Never and even 0:19:38.796 --> 0:19:41.636 the Steam company never actually owns those coins. Right, the 0:19:41.716 --> 0:19:45.876 coins in some sense actually were sort of owned not 0:19:46.036 --> 0:19:48.796 just by the holder of a cryptographic key, but they 0:19:48.796 --> 0:19:54.076 were also owned directly by a community conception of legitimacy. Right, 0:19:54.116 --> 0:19:58.156 they were directly owned sort of by this metaphysical object 0:19:58.316 --> 0:20:02.436 that consists of this set of principles that existed and 0:20:02.516 --> 0:20:05.796 we're maybe unstated and we're maybe informal and vague up 0:20:05.836 --> 0:20:09.876 until that point in the Steam community's heads, and like, 0:20:09.996 --> 0:20:14.596 that's a really powerful thing. It's tremendously powerful. So now 0:20:14.636 --> 0:20:16.516 if I may, let me just say a quick word 0:20:16.716 --> 0:20:20.516 and ask your dreer reaction about how these same issues 0:20:20.516 --> 0:20:22.476 are thought about in the context of property law and 0:20:23.036 --> 0:20:25.996 constitutional law, which you think of themselves. You know, constitution 0:20:26.076 --> 0:20:28.396 law thinks it's the law of the blockchain, and property 0:20:28.476 --> 0:20:30.396 law thinks it's the law of the tokens, at least 0:20:30.556 --> 0:20:33.436 in this particularity. So in that world, we would say 0:20:33.516 --> 0:20:36.796 everything that you described could happen in a real existing 0:20:36.996 --> 0:20:41.436 community or government. It's usually called a revolution. Right, you 0:20:41.556 --> 0:20:44.876 have some backgrounds set of principles that people think of 0:20:44.916 --> 0:20:48.316 as the allocation of power. Who's in charge, who are 0:20:48.316 --> 0:20:50.116 the courts, who do you have to listen to? Who 0:20:50.116 --> 0:20:52.916 are the police? And then that system uses some set 0:20:52.916 --> 0:20:56.236 of rules to decide who owns what property law governs 0:20:56.276 --> 0:20:58.436 the stuff you own, voting rights law, which used to 0:20:58.476 --> 0:21:00.156 be thought of many many years ago as a species 0:21:00.156 --> 0:21:03.996 of property law, because they're closely connected. Governs how you 0:21:04.036 --> 0:21:08.156 get to participate in decision making. But if someone exercises, 0:21:08.236 --> 0:21:09.796 or some group of people or size a lot of 0:21:09.836 --> 0:21:12.476 power in a way that makes other people in this system, 0:21:13.076 --> 0:21:14.756 usually a majority of them, but it doesn't have to 0:21:14.756 --> 0:21:18.396 be a majority angry enough to break the system. You 0:21:18.436 --> 0:21:21.596 can get a revolution, and in that revolution, people break 0:21:21.596 --> 0:21:25.156 the existing structures of power. They take away people's property rights. 0:21:25.756 --> 0:21:28.796 They can take away physical objects that people have, or 0:21:28.836 --> 0:21:31.676 they can take away their abstract rights, like you know, 0:21:31.716 --> 0:21:34.276 the abstract idea that they own a piece of land, 0:21:34.956 --> 0:21:37.636 or you know the shares that they In theory wouldn't 0:21:37.676 --> 0:21:40.676 that kind of value can be destroyed, And because we 0:21:40.756 --> 0:21:43.476 know that that can happen, we tend to think their 0:21:43.476 --> 0:21:48.076 property law and a whole constitutional order are contingent and 0:21:48.116 --> 0:21:51.356 their contingent on their not being a revolution. And when 0:21:51.396 --> 0:21:53.396 we're looking for a word to describe the world where 0:21:53.396 --> 0:21:55.676 there's no revolution, sometimes we use the exact same word 0:21:55.716 --> 0:21:58.036 that you used. We say this system has a property 0:21:58.036 --> 0:22:01.676 of legitimacy, meaning that right now, no one is starting 0:22:01.716 --> 0:22:04.636 a revolution who has enough support to make it into 0:22:04.716 --> 0:22:07.956 a very successful revolution. And we think that all the 0:22:07.996 --> 0:22:13.196