YouSaid · the spoken record

Charles Hoskinson

lines on the record: 392
first: 2021-06-16
most recent: 2021-06-16
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Okay, well, there's a failure. For example, I said one of the project goals was to achieve self-evolution. So if it doesn't achieve that, where it can evolve itself iteration by iteration, then obviously the product didn't do what was intended. If it continuously required the supervision of custodians in order for it to succeed, the system just won't work. The good news is we have a lot of data showing the opposite. We used to run an federated model, and now we're completely decentralized for block production, but that didn't just happen overnight. I mean, there was a whole process with the incentivized testnet and the stakeful pioneers program and the launch of Shelley and the decrementing of the decentralization parameter. And every step of the way, people showed up and had to do things. And we went from several to thousands of people who were regularly maintaining the infrastructure. But there's no guarantee that that would be sustainable. And there's no guarantee that”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and DNS is a genius. He's a really, really smart kid. And he got his PhD under us. He went to the University of Athens, and he was Acolos' graduate student. And now he's doing a postdoc at Stanford under David Xi. And this is literally the only thing he does. He does interoperability, sidechain stuff, Nipa Powells, and so forth. And he's written a lot of great papers on it. And that was a testimony to hard work for getting the paper published because the paper came out in 2016. But I think it took three or four years for it to go through peer review. Kept trying to push it for one conference after rejection after another rejection, but he got it through. Real proud of that kid. And then he's just doing all this beautiful derivative work now, like log space mining and so forth.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Because you have those red blocks, you have those special things. And so you know that the state you're working on is actually legitimate, right?”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to be key to the particular consensus algorithm, but usually there's some portability in this type of thing. Like we're right now exploring, can you do NEPA pals with PRISM or any of these sharded proof-of-work protocols? But it looks like you can. Closely related is log space mining. So you can use this concept, and instead of having the entire blockchain to be able to mine, you can use a compressed representation of it. We wrote a paper called Logspace Mining that basically explains how to do that. So your miner only has this very small microledger as opposed to the entire ledger.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Strikes I observe that pattern. And so it's the same concept there. And it's just a property of the engine. So you don't really need to hard fork it in. It's just there. And because you can build proofs that way, now you can use those proofs to do like clients. And you can use those proofs to do other things because you just use that as something that comes with the history. You don't have to have the whole blockchain.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“These things. So, what does it mean? It means that suddenly when you have that, now you have a way of representing a long range of history with a very small proof. So you can use it for light wallets and you also can use it for sidechains if both sidechains use proof of work. So when you see a transaction come in, you don't have a copy of the sidechain, but you have a copy of the proof of work. And it has the same algorithmic weight as the normal longest chain. Because you don't have all the greens, but the reds only occur with a certain sampling frequency. So this is the brainchild of Dionysus Zindros and Agalos. And it's just an amazing paper. And what's so cool about it is it doesn't require any structural changes, the proof of work. It's just something you notice as an off-gas of proof of work. It's like you're watching an engine operate and you notice like every 500 times a piston will do a certain weird thing. And so you take advantage of that and you say, well, if I count 10 of them, now I have 5,000 pistons.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“I was going to say that word salad basically, the idea is okay, so let's say this block, and I'm just simplifying the concept a lot. This block, you get a regular green type of proof of work. And then this block, you get a green, and you keep going. And then suddenly you get a red one. So it's still a valid proof of work, but it's more rare than the other ones. Okay, so if you notice that particular pattern, what you can do is you can just start not caring so much about the green ones, and you can just bookend your chain with red. Okay, and then you can just repeat that and repeat that, repeat, and you can create this really compressed representation.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Nippet P It's fun to say, right? It's just one of those things that you notice that certain proofs of work when you solve them come up less frequently than other ones. And just by that nature, you can sample them and then construct proofs from them. So with that just set have a more concise representation of an amount of work for a range of the chain. So that work.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Of surfaces you need, and that's actually how IT works these days with microservices and these other things and cloud software. Every firm is an aggregation of dozens of providers and basically that composition of them is your software stack.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Do is you build layer two protocol that's blockchain agnostic and then the user can decide when and where they need an identity and then bring that identity into the system. And if you designed it right when they bring it in, it's very easy, very fluid. And suddenly the experience enhances. Everything just gets better. Oh, wow, okay, now I can use all these regulated things. They go from gray to green in the app store. That's so cool. Or, oh, wow, now I can send to human readable addresses. Because if I have an identity and you have an identity, we can alias them with some namespace. And now I sent Alex instead of some horrible Bec32 address structure. Okay, so that's really what you need to do with layer two is say, okay, each layer two protocol is meant to do something. Either it gives me payments or lower cost smart contracts or interoperability or identity. And then it's a marketplace. So you should have blockchain agnosticism with your layer two solutions. And so you can mix and match and choose whichever”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“It goes back to biology that cell differentiation concept you have to build specialized tissue to do these things. The point of layer two is to extend the network. It's adding a foot. It's adding an arm. It's adding a brain. It's adding a heart. It's adding eyes, giving you additional senses. You have years now. So when you add these layer two protocols like a tolerism is a perfect example of that. We don't have identity at the base layer of Cardano. It's a real bad deal to do that because then China will come in or US will come in and tell you how to do that.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“The same thing lets you batch things on one, will let you batch the other. So if Lightning works on Bitcoin and Hydra works on Cardano, you can eventually bridge these two together and create a way of moving back and forth. The same things that make transactions in and out of that network cheap will make creating wrapped assets cheap, at least on the Bitcoin to Cardano side. You can't create assets on Bitcoin, another flaw of Bitcoin that they've never fixed.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“You already have the intermediary, you have the channel operator, and you already have lightning. Protocol, right? And you just build a DEX that runs within that system, and they can swap assets, or you can do wrapped assets.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Is that whenever you see something, you can always generate two proofs an existential proof that the coins exist and a non-existence of a double spend. So you can always check those two properties. And the proof is verifiable and logarithmic time, ideally. So you can have giant amounts of data, but it's very small, the actual proof is concise. So there are just different boats for different floats. The advantage of a layer two network where there's actual channels and there's interaction in there's service providers is the channels can eventually scale in the collection of things that they can do and eventually they can become interoperability networks between cryptocurrencies. So at some point we could modify the bolt spec and make it somewhat interoperable with Hydra. And then what you could happen is you could use it as a bridge to actually do cross-chain traffic and send transactions between the systems. You don't really think about that too much when you're talking about roll-ups. That's more of optimizing what you have within the system.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“A single head. The next thing you do is composition. So you go multiple heads and there's a routing protocol between them. And then eventually create these tail protocols for when things get asynchronous. So instead of always being aligned and always being available, what happens if they die for a bit and then they come back? And you can create all kinds of guarantees that your funds won't be lost or locked forever or things like that. There's a failure recovery mode for this type of stuff. And basically the idea is leverage what Lightning has already achieved with Bitcoin, but then take advantage of the fact that you have a more expressive accounting model and a more expressive programming model so you can just physically do more and you can put more crypto into that thing. Now contrast it with rollups really that is just saying you're going to take some thing, batch a bunch of transactions together and you're going to generate a proof and then what you can do is whenever you see some part of that history you can check it against that proof that's rolled up and they're closely related concept of recursive snarks that you'll see a lot. There's things like the MENA protocol or other things and basically”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Where things get really complex, and this is why Hydra's novel over Lightning is when you want to move beyond payments to state management. Okay, so payments are just, I want to move between Alice Debob as quickly as possible, as low cost as possible. So for example, I have a micro tipping application, like ChangeTip on Twitter or, you know, like a video. I'm watching YouTube video, like maybe this video in the future and people really like it. And they click tip and you get five cents or something like that. Okay, so that's an example of a perfect payment application, and that's great. But what happens when you actually have a rich smart contract like a DEX or you want to do a video game or something like that? You want to run that off-chain, but then there's some reconciliation on-chain that happens. So a state channel basically lets you do that, but it's a lot more complicated, and there's a lot more to think about. So Hydra basically just has its design a collection of ideas of how to do that. And the current paper is for”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“And the layer two solution is co-designed with the layer one solution. So it's like what Lightning would have been had Lightning been co-developed when Bitcoin came out. There would have been special provisions made in Bitcoin specifically to accommodate Lightning, and it would have made it very easy for you then to move inside the system, outside of the system, and have security properties preserved, like availability, for example, or fraud resistance. You can't steal the money or these types of things.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“If I do it on layer one, it's slow and expensive. What I'm going to do is batch something somehow, some way, and then do it in a different system where it's fast and cheap. And what I'm doing with that is I'm losing some of the security guarantees of the base layer and admitting a slight higher degree of centralization, but then I get super fast settlement, I get super low cost transactions, and potentially I may even be able to get distributed computing, meaning that instead of having the smart contracts run in a replicated system, they can run on a single node like a stake pool, and their stuff is different from the other guy's stuff. So you go from a system of capacity of whatever it is to a system of n for the totality of all the stake pools. So basically Hydra is just the next generation of that when you have the ability to tinker with the accounting model.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“I need Cocaine from Director Bullock. We'll leave this in right. Isomorphic state channels. That's a great topic, right? There's word salad of cryptographic terms. Whether Lightning Hydra roll-ups any of these things, really what you're trying to do is say, okay.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and this results in a regulatory event. It's like I'm the guy who has to put on a suit and go to Washington. Just like laugh with his friends about how he crashed the crypto market and how easy it was to do it. And that's my only umbrage about this. On the other hand, if it brings a lot of cool new interesting things and people into the space, that's a net positive. And so, you know, it's not universally bad or universally good. And I'd like to give people the benefit of the doubt. And so I'm really hopeful to see what comes about this recent surge of interest and if Elon actually puts his money where his mouth is and takes some of his enormous engineering talent and capital and starts contributing and building something in the cryptocurrency space. It'd be really cool to see that happen.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a neuroscience thing. We like dopamine. We like these chemicals in our brain. And when we have fun, we want more of it. So you tend to gravitate towards work activities and play activities that are enjoyable to you. And it is nice sometimes to kind of come and control an entire industry. I could imagine he's probably up the time of his life. It's the same as like taking Tesla private at 420. Kind of stuff. And it's one thing when you do it with friends. Is another thing when you do with the whole industry and it hurts people financially? And also I understand he hates short sellers. And there's some things there. And I can't speak for him because I only know the guy from a distance. It's just, I live in this space and I have to deal with the consequences and clean up the message.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“It was the loyalty, the EV4 guys, or whatever it was with GM, they didn't want to give them back. when they had the lease program.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“So, reusability is like a fundamental thing that if you solve that, you've now opened space up to a complete new class of commercialization. I don't see the problem in Dogecoin because if he was looking for it, then why not look at a real platform actually trying to solve a real problem? There are so many of them. He throw a rock, he can hit 15 of these guys, and they'd all die to work with you, Elon Musk.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“But I'll challenge you a little bit on this because I think he had some trends that he was very smart to recognize. In the case of battery power cars, he says, hang on, everybody has tablets and cell phones and these other things. There's an incentive to make batteries better, faster, cheaper, and charge faster. And that's connected to mobile computing. So regardless if you want battery powered cars or not, every year you have billions of dollars of R&D being pushed to force this capacity to evolve. And he's just getting on the train and piggybacking on that. So that was a brilliant business acumen to recognize that. In the case of SpaceX, it was just obvious question. If every time you get on a plane, you have to throw the plane away. No one would fly.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it'd be a lot of fun. I'm not adverse to the idea of cleaning up the code base, but legitimately whoever comes in, be two years or three years of work. Because you have to do real stuff. And that code is like Litecoin Circa 2012, 2013.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Elaine tweeting about it. I thought it was a good deal. So, when you see stuff like that where people have no clue what they're doing, they don't really understand the supply dynamics, the ownership dynamics, and these types of things. And then when the clock stops, you know, they're the ones who get hurt. And then the regulator comes in, the Elizabeth Warrens of the world, and they say, see, this is an evidence these guys can't regulate themselves, control themselves. We need to control everything, either let's ban it or let's just announce that the only three are legitimate and every one of them has to be connected to identity and rah, rah, rah. And I'm just very concerned that that's a bad thing to do. And that's why I've been so vocal about this topic. And my hope is that a compromise can be made where real developers come in and they start working on Doge and they find a way to create some sort of use and utility for it. So at least it has a value floor. And it won't collapse.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Dogecoin at a very, very low price point. So they can sell at almost any price point and make a profit. So it hits 50 cents, they're billionaires. And it's not like 20,000 people. It's probably less than 100 wallets that have that distribution. So there's this existential ticking time bomb that's in Doge that once the guys who are vested start selling, they can just keep selling and keep selling and ride it all the way down and make windfall profits regardless of what price they sell on. And who are they selling against the retail investors? You know, people make $500, spare money a month or something like that. And it bothers me because I see it in my community. So I live in Longmont, Colorado, and I was at a restaurant and I was talking to the waitress and she asked me what business owners and I said, I'm in the cryptocurrency space. And she's like, what is that? And I started explaining all of it. She goes, oh, yeah, I own some Dogecoin. I said, you own anything else? No, no, I just bought some Dogecoin. Why did you buy Doge? Oh, I thought.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Extend that complexity, you're talking about years of RD, years of engineering effort that needs to be done. So what's the point of Doge? Is it just a meme? Is it actually contending to be useful or is it competing as a store of value against Bitcoin? Now, if it's competing as a store value against Bitcoin, why the hell does it have the monetary policy it does? Also, there's predatory distribution of the underlying asset. Over 90-some percent is consolidated less than 1% of the holders.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“And he did mention on Twitter that he was looking for feedback on how to improve Doge. And so I said, all right, well, I'll just put all these things together. It was a little tongue-in-cheek because I figured he'd ignore it, but it was also showing how hard it is to innovate in this entire space. You know, you don't just go and say I'm going to go build a battery-powered car or rocket or enter a new industry. It's really hard to do that. You spend years and lots of effort. You have to do a series of small learning steps. You have to pick up destroyed rockets on the side of the beach and things like that before you get to the rocket landing itself. Well, analogously, it's really hard to build a cryptocurrency. Satoshi probably spent years thinking carefully, and that work was a derivative of 30 years of work in the digital assets base starting in the 1980s, working its way through. And then Bitcoin only did very limited things relative to what Ethereum can do or Cardano can do and so forth. So the minute that you...”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“You're really serious about this thing sticking around being useful in doing stuff, then the point of the video was to show the types of things you'd have to think about and the types of papers that are all open source, patent-free, and don't have any notion of intellectual property behind them, that his engineers could grab and go and do.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, Dogecoin is just based on that 9 inch NL song, a copy of a copy of a copy. Yeah, it's just a copy of a copy. Bitcoin gave Litecoin, Litecoin gave Dogecoin. And it was kind of a parody cryptocurrency. And I think Jackson was trying to do it to prove a point about altcoins. And then true to forms, like nobody caught the doctrine and completely perverted the entire religion. It's almost like the Emperor of Man and Warhammer 40K was like this atheist don't worship me. And now there's like this whole religion built around the emperor. So Dogecoin has become a thing and it's become such a large thing that it is a reasonable target for somebody to fix it up and repair it, make it an interesting cryptocurrency. The point of the video was to show what a modern third generation cryptocurrency really would require. It's a major overhaul. And there are already people doing this. You know, there's the Solanas and the Harmony Ones and the Cardanos, Neoses, and all these other guys, and they have billions of dollars and huge dev teams and all these innovative protocols.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Could now actually get data from those cars through a marketplace in exchange for the benefit of autonomous driving or for the benefit of understanding road conditions or safety enhancements and so forth. So it's just depending. Are you just here to speculate? Are you here to actually use it as another medium of exchange? Or do you actually want to build infrastructure on this thing? The more closely you get to utility, the further down the road you get there, then the more programmability you need. And so it makes a lot more sense to be an Ethereum fan or a Cardano fan than to be a Bitcoin fan.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Infrastructure to create such a token and regulate such a system and have these things autonomously negotiate and do business with each other. You need DEXs and stablecoins and all kinds of mechanics to make something like that possible. Well, that's really beneficial to Tesla if they could figure that out because they could create like an information sharing incentive scheme where if the cars talk to each other, including other branded cars like GM cars and Fords.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and that's exactly right. The energy is a critical point for me with Tesla because they assert to be an alternative energy company. And unless they can make the case that somehow the proliferation of Bitcoin is legitimately going to proliferate batteries, solar and wind, or other things, then it's probably good for them to just focus on the most efficient, energy efficient cryptocurrency possible. Otherwise, you're exacerbating global warming. You're exacerbating the ecological consequences of it. The other thing is Bitcoin is the least programmable of all the cryptocurrencies. And if you want to do interesting, sexy, unique things, let's say Tesla, for example, they want to start doing VDI and V2V for autonomous vehicles and have the vehicles start talking to each other and connect it to 5G. Well, imagine if you wanted to build a telco coin or some sort of 5G coin and you want to build an IoT layer and network, there's just no real way to do that on Bitcoin with the way it's designed. So you'd need fundamentally different”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“So you have no energy savings component. And I know these people are saying, well, there's a lot of wasted energy in the grid. And this is kind of incentivizing using that wasted energy. And it's a better way of storing it than batteries because you're now storing it as a Bitcoin instead of storing it as energy. Okay, maybe there's some truth to that. Anyway,”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“If they truly care about alternative energy and sustainability, carbon reduction or carbon neutrality, you can't be in a system where there is no built-in mechanism to constrain the energy consumption. You know, with proof of stake, energy consumption is a negative. You want to minimize it. If you can get the same amount of stuff done on a raspberry pi, you can't a big server, you're going to do it on the pie because ultimately that server cost and the energy cost is coming out of your budget. With proof of work, any innovation you come up with to optimize power you just build more ASICs because it's 30% more power efficient. Great. Buy 30% more. You keep adding to the work because you want more hash power, more hash power, more share of the pie.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“The Angels descended from the heavens, and it's like, well, how do you know? Well, because the Bible said so, or this doctrine said so. It's like, well, that's your evidence. Somebody wrote something down. Can you please give me a little bit more? They say, no, you're challenging the word of God. In this case, you're challenging the word of Satoshi. And all I ask for is just, what is the burden of proof? We wrote the papers. We have security models. We went through the peer review process. God, that was not easy. We wrote formal specifications. In some cases, we formalize those specifications with Isabel, for God's sakes, which is not easy to do. And then we implemented it. And it's running in production with a million users at a $50 billion market cap. I mean, at what point do you start saying, well, maybe there's something there? And they say, no, there's nothing there. And it's not secure. It can't be secure. He said, okay, then why do you believe what you believe? And they never come back to me with an answer ever.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, legitimately security, then the only question I'd ask their team is can you please provide me a definition of one? Doing POW is more secure than proof of stake as a tweet is not really a proof. You need to actually come out and sit down and say, what is your security model? What do you care about? What do you value? What's the problems you're concerned about a proof of stake? And they never really get there. And that's why I call this.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, he's a business guy, or at least I'd hope he is, and it's not about what I want or what he wants, it's about what markets want. You know, when you run a publicly traded company, you have a fiduciary obligation, you have shareholders to maximize the utility, the sustainability, and value of your company. And so if he's running a company that makes money off of these things, it makes absolutely no sense to be a maximalist. You want transaction volume. That's how you make your damn money. It was Coinbase was the same way. They were very maximalist in the beginning. Very quickly, they started realizing, hey, we're losing a lot of money if we want to IPO. We kind of need to be a bit more diverse. Eric Voorhees was also a maximalist way back in the day. And now look at Eric. He's got Shapeshift and all these other pieces of infrastructure. He's a lot more friendly with us ultis. So, you know, Jack will make that decision. His people will make that decision, I think, based on market dynamics, transaction volume, and value to the user. And if the concern is.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“In addition to having a shareholder style model for ownership inside of it to kind of balance these things out so people care about the appreciation of value inside of the system. So that was my point to Jack is you're a business guy, why are you betting all your eggs and one crazy model that's a cult, step away and realize that that does something, it's a tool, but saws aren't the only tool in the toolbox. There's hammers and screwdrivers and other things. Go to end resources and let's have a real conversation about what would a world computer or a world infrastructure that's useful for your business domain, in his case Twitter, require and what type of resources would you need for this? Such a thing?”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, this type of stuff. And there's been since then many iterations and evolutions of that type of protocol. Okay. So what if you throw that into your resource back? Now you have a capacity in your system for storing huge amounts of information that's incentivized by the way the system works. And you can balance that with a proof of stake system. And you can balance that with a, let's say you have proof of useful computation. We may have a paper on that, who knows, coming soon. And what if you have a proof of useful computation where maybe you can do Walkstat or something? Who knows? With something like that, okay, well, now you have three resources inside your system, and those three things keep your system secure. And they just so happen to create the world's largest supercomputer that's programmable, and it just so happens to create the world's largest database that's programmable.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Just mentioned that semantical addressable web going back to IPFS and these other concepts. Well, how do you pay for the enormous burden of storing that much data? You can create a consensus protocol for it. There actually is one. It's called Primacoin. Came out in 2014-15. Andrew Miller wrote it and a few other authors, I think John Katz may have been an author as well. But basically it was just a throwaway proof of work style algorithm that only works if you have large amounts of data. So it's like your minor is like a hard drive effectively.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I hope you understand it's just a resource. That's the entire point of the video I was trying to make. It's like, dude, you're like in this cult where you think the only way to be secure is proof of worker and somehow proof of stake is less secure than proof of work. I don't even know how you put those inequalities there because you're talking about apples and oranges. You're making different trade-offs and there's different assumptions about the nature of the people involved, but the mechanics are the same. And so it's really more of a question of what type of system do you prefer? Do you want mercenaries guarding Rome or do you want Roman citizens guarding Rome? Okay, and as the Romans learn, it's better to have citizens usually doing that. And that's the only point I was trying to make to Dorsey. And, you know, I don't think he watched it or particularly cared, but it was more of a video for everyone to start that dialogue of realizing that the real game is not, is proof of stake better than proof of work. It's how do we go from one to end and what should end be?”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think actually by combining dids, decentralized identifiers, that's the way to do it. But it's actually the next generation of the technology, it's the regulated DICs and who regulates that, how does that work and so forth. But I think ultimately those are going to be the only marketplaces that end up surviving in this current environment if your desire is to exit to a dollar, if you don't really care about the fiat side, like traditional legacy currency, you can always do things in a shadowy, unregulated way. But, I mean, it's a personal preference and a business preference.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“You just have value coming in, not identity. And so all these things are trading amongst pseudonymous accounts. And so there's no notion of compliance right now for that. So a lot of regulators are coming in and saying, oh, well, this is just a cesspool for terrorism and drug dealing and bad stuff. They're word salad of bullshit. But, you know, it is what it is. You have to deal with these guys. And so there's been a lot of discussions of can we take DEXs and keep the openness and keep the liquidity. And no counterpart or custodial risk. And can we add some notion of compliance to that in a decentralized way that doesn't require a single actor to be a gatekeeper?”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“And then that exchange is liable if that's fucked up. So if the government comes in and says, hey guys, you know, Pull your compliance records and they find discrepancies, they'll actually put the exchange out of business or find them very heavily. JPMorgan Chase got $19 billion in fines over the last 20 years for various compliance issues, amongst other things. So it's expensive, very difficult thing. And at DEX, it's open system.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“But anyway, that kind of back and forth happens all the time, and because these guys are gatekeepers, they have this nepotistic control information asymmetries and so forth. So having a DAX, you don't have that problem. You have open listing. You basically just put the asset into it. And if anybody wants to trade it, they will. And if it seems like it's a good idea, a natural market will form, market making will occur and you get liquidity with it. So there's no barrier to entry for that type of system. The biggest existential problem for DEX is right now is the concept of regulation. So basically right now when you use Binance or Coinbase or these other guys, you have to go through KYC and AML. Know your customer and anti-money laundering. So basically who are you and is your money real or not or are you drug dealer or something? So normally you do that by saying, okay, I'm going to give them my copy of my passport and maybe they're going to request some tax records or whatever the best practices are for the particular jurisdiction.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“Behaves by a very close set of rules. When you look at a DEX, you have to accept that you're going to have to have slightly different rules because you're operating at a global system's latency. And you're operating in a system that has different behaviors. However, that said, there's a lot of great protocols that have been built for it. Uniswap has kind of evolved a lot over the years. And we've seen a huge competition and a lot of evolution to basically build out protocols that kind of eskew some of these security problems, enjoy high liquidity. and then also have this beautiful concept of openness. One of the gatekeepers to crypto when you're a cryptocurrency developer are the exchanges. I remember when we first created Cardano, you know, the Bitfinex guys reached out to the Cardano Foundation. They said, oh, we'd be happy to list data. And I said, okay. And they said, yeah, we want $5 million to do it. So there was kind of some Italian for go fuck yourself in those email conversations.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“And you have no access to it. So you have sovereign risk, you have the risk of threat, you have regulatory risk, you have the issue of banks maybe cutting you out. So it's been in our industry for more than 10 years. Mt. Gox was the most famous example of that. They collapsed, I believe, in 2013 and hundreds and millions of dollars was lost over the course of a while. So the point of a dex is saying, can we do what a marketplace does but not have Coinbase, not have a central actor run this thing. And there's a lot of problems with that because exchanges are generally creatures of latency, high-frequency trading, for example. These are things that nanosecond. They co-locate their infrastructure with the exchange software just so they can front run orders over other people. I mean, it's crazy the amount of technology that they put in. So the traditional Wall Street version of an exchange is very centralized, very fast, very optimized, and kind of...”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source
“But it's centralized. But the problem is you have custodial risk. So when you put your gold and your dollars or your digital representations of these things into the exchange, what if Wally broke up with him and now he's really sad and he's gone to the dark side and he's become Wally the hacker. Okay, so he can go and sneak his way in and hack into Coinbase and steal all your gold and your tokens. So instead of you actually being able to swap these things, you've lost all your money. And there's other problems too. Daisy has now come in and become a regulator and said, Oh, I don't like these exchanges anymore. I'm just going to shut them all down.”
2021-06-16 · Lex Fridman Podcast · #192 – Charles Hoskinson: Cardano · IDENTIFIED FROM THE TRANSCRIPT · source