YouSaid · the spoken record

Sergey Nazarov

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197
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2021-05-01
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2021-05-01
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  1. “I think what you're talking about is more data marketplaces. In the data marketplace side of things, well, this is actually, once again, very applicable because there's a trust issue. At the end of the day, let's say I'm trying to sell you some data. You don't know the quality of the data, so you don't know what you want to pay for it. And I can't give you the data for you to determine the quality because I've given you the data.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Work with contracts and they're transitioning into this hybrid smart contract form, we see a substantial amount of need for privacy as an inherent property of these contracts.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “And our goal is to provide the infrastructure that gives you as a developer and as a creator of smart contracts that capability. And what we've seen is that as we provide that capability, people create more, which is also really the story of the internet, right? The story of the internet is it was really tough to do e-commerce while everything was an HTTP and credit cards were transmitted publicly. And so e-commerce was kind of tough because how am I going to send my credit card over public unencrypted channels, right? But the second HTTPS appears, e-commerce becomes a lot easier because I can put in my credit card number and it can be sent over an encrypted channel and it's not at risk. And so I can participate in e-commerce as long as I have a credit card. I think those types, and I'm sure that was unexpected, right? I'm sure at the time that was unexpected outcome from that technology. And so I think this is why we sometimes have this focus on privacy, because in our”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Right, so the ability to do a privacy preserving computation is perhaps a service without which a certain type of contract might never come into existence in the form of an on-chain hybrid smart contract. And so this is once again what we see, the centralized Oracle networks and decentralized services doing is providing people these tools and building blocks to compose, you know, like I'm great at making these derivatives contracts, but I can't make them until I can retain the privacy of them.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “But the users of that hybrid smart contract still had on-chain code that guaranteed them that as long as the decentralized Oracle network found a certain outcome, right, determined a certain outcome, that the relevant user would get paid and there was still a place to put value. So there is this kind of fundamental tension between confidentiality, privacy, which is very important for many contracts, which is critical to many contracts, and the public and transparent nature of blockchains, which I think eventually will be solved through encrypted on-chain smart contracts, that'll take some time. I think that'll take years, in my opinion. And before we arrive there, I think people will put the private portion into the centralized Oracle network. Once again, going back to what the decentralized Oracle networks do, they seek to provide these services.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “So the outcome of the contract was computed in decentralized Oracle network, and then there was a switch that triggered who received the payment. But from who, from the point of view of analyzing the on-chain transactions and seeing who received the payment or what the outcome of the contract was, you couldn't derive that, you couldn't backward engineer what that was.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “And so at the end of the day, if you look at a hybrid smart contract as gaining functionality from its on-chain code and gaining other functionality from its off-chain, the centralized Oracle network component, you can place the part of the computation that you would like to be private in the decentralized Oracle network because you can control the set of nodes, you can control the committee of nodes, and you can require that they run certain hardware to keep the information private, right? So you could basically make a derivative that or a binary option is the example used in the Mixicals paper where the payout happened on chain, but it was actually impossible to tell what the outcome of the contract was.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “So I do think and I do see blockchains working on on-chain encrypted smart contracts. That's very inefficient. It has a lot of nuances around it. That, I think, will appear at some point. I think until it appears, you have an option of taking a part of the computation and putting it into the centralized Oracle network. We actually did an entire paper about this that we presented at Stanford in February of last year. Something called Mixicals, which basically talks about how you can take an Oracle network and you can put a portion of the computation into the Oracle network, assuming that you're comfortable with that limited set of nodes knowing what the computation is.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Sure, sure, absolutely. So I think you once again need to think of the contract as existing in two parts, right? You have the on-chain code and then you have this off-chain system called the centralized Oracle network. So, the question is really what portion of the contract should live in what part of these two systems, right? So if you want to create transparency, you should put more information on chain because that's what blockchains are very good at.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “So we just initially even came up with a system where you could put Bitcoin into a smart contract and it would be released based on whether the search rank of a website got to a certain level on Google for a certain keyword, right? And so the trust problem was solved. But it's just the same story, right? It's kind of like trust issues around AI, trust issues around financial products, trust issues around insurance, trust issues around social media, whatever it is. I think that's what people looking at this industry really need to understand. And once they do understand, they realize what this is all about. This is about redefining how everyone collaborates with everyone about everything where we can prove something through data.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Where they would tell you, hey, I'm going to raise your search engine ranking, give me the money. And people wouldn't want to give them the money because they never knew if they were going to do it. And then the search engine firm doesn't want to do any work thinking they'll never get any money.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “And once you have an autonomous piece of code that can also know what's going on, thanks to Oracle networks and that combination of the code and the Oracle network for the hybrid smart contract, the same pattern just recurs. It's really the same pattern. And this is why I keep saying trust issues. It's because I basically almost every contractual trust issue that I see whether there is a piece of data to prove and settle the trust issue in a way that works for both parties there is no reason not to use an autonomous, highly reliable contract and piece of code. And I have to tell you, I've seen this in a lot of different industries. I've seen it insurance, ad networks, global finance, global trade. Those are all multi-trillion dollar industries. And then there are other smaller industries. Even one of the first smart contracts we worked on many”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “And insurance company knows that the smart contract will evaluate it according to the policy. They don't need the data, and the user can provide the data knowing it'll never touch the insurance company because it's only provided to the smart contract. And suddenly you've solved another trust issue because an autonomous piece of code can evaluate information separately from the interests of both of the counterparties. And so this is the recurring theme. I think you're seeing this recurring theme where there's a trust issue. People can't use a system, they can't collaborate, they can't share information that would make a better agreement for both of them. They can't, you know, solve a risk in their daily life. They can't participate in a market. They can't have a bank account because nobody will give it to them because they can't give it to them in that legal system.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Just to mention one quick thing that you said where I noticed another trust issue you said the user might not want to share their data. Yes. So, what you could actually do, and what we've already worked on is you can have a smart contract that holds the data and evaluates the data of the user without sharing it with the insurance company.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “So you basically already have people who really want to price data into their agreements when they're of sufficiently high value paying for their own customers to get data censors into their infrastructure. And I think as smart contracts become more of a requested format or data-driven contracts become more of a format, there will be a growing demand About proving what happened through data.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “And then, as you said, I think as people realize that smart contracts are a format in which they can form agreement about things like that insurance product around how many people are wearing hard hats, if I'm the construction site owner, well, I would really like a guarantee that your insurance policy If everyone is wearing hard hats, and in that case there is demand for the data and people will generate the data, and I actually think the insurance industry is interestingly a precursor of this because they're so data-driven, you already see insurance companies paying IoT companies to put data into their customers' infrastructure at the cost of the insurance company to generate the data that the insurance company uses to make a policy for the customer.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “I think you have it unbelievably right because there are already insurance companies that use drones to monitor construction sites from overhead and see how many people are wearing hard hats and if the percentage of people wearing hard hats isn't sufficiently high, then the policy is voided. And so in that case, there is a data source and that data source can be put into a hybrid smart contract. So the limitation of hybrid smart contracts is there a data source or a set of data sources to create definitive truth to settle the contract and eliminate ambiguity.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Because there's so much clearer, right? There's that forced clarity that you talked about. I think the second aspect of this problem is the nuance around. What contracts can be made unambiguous? And I think that comes down toten comes down to proving what happened, which is where Oracle networks and decentralized Oracle networks and Chainlink would come in. And our experience there is quite extensive over the many years that we've worked on many different contract types. I think what it fundamentally comes down to is whether there is data. So we're not going to be able to make a hybrid smart contract about whether somebody painted your house the right color blue. We're just not going to be doing that because there's no data feed that tells us that your house was painted blue or that it was the right color of blue unless somebody sets up a drone with a color analysis tool and they generate that data.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “And just say, hey, this is what this does, right? So I think that many contracts are, and even now in decentralized finance and DeFi and in decentralized insurance, they're basically being rebuilt in this format. And that rebuilding will make them clearer, like you said, and then restating those in natural language and explaining to people, well, the weather does this, I think it'll actually be a lot simpler to explain to people what the contract is about”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “You'll just say, Hey, this blockchain system over here is my new system of contract settlement, whatever it says is the state of the agreement instead of the centralized system over there. And so there's actually a huge amount of agreements that are already able to do that. And I think we'll do that. I think there's another side to your question, which is the Of agreements that are very ambiguous that can be turned into smart contracts. And I think the limitation there is twofold. First of all, like you said earlier, the highly reliable smart contract and the lack of opaqueness and the clarity of smart contracts is very high and very powerful and very clear And it's, in my opinion, going to be much, much easier to take a smart contract and turn it into a set of natural language explanations.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “So I think there's two, maybe two sides to this. I think the first one is actually not a huge problem where you have things like the ISTAMA master agreement for derivatives or you have these agreements that basically already reference a system somewhere. For example, many legal agreements already accept e-signature. And so they're saying, hey, I'm going to use this computing system over here around signatures, and I'm going to consider, and there's laws around that, and there's clauses that say e-signature is good enough for this agreement. I actually don't think this is a big problem for the vast majority of legal agreements that use systems already. So what you'll do is you'll swap out one repository or one or one set of system of contract settlement.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “With non AI systems and very possibly other AI systems, right? Because it is very I mean, it's pretty guaranteed, right? All the other types of contracts that an AI could go out there and seek to do would require some language processing around the law. And I think, I don't know if this is a term, but probably not a smart AI or a good AI or whatever the term is for a high quality AI. Would probably realize some of the limitations and the risks that”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Because I'm guessing an AI would have a lot of problems with dealing with the human element of how contracts work today, right? So an AI, for example, couldn't pick up the phone and call Dave at a bank to do a derivative and kind of discuss with Dave and have a call with him and kind of have a conversation and make him comfortable and tell him it's going to be fine and kind of smooth out all the weird social cues that have to do with making certain derivatives. I'm assuming that that's a pretty complicated neural map AI kind of problem. Yeah, so if I think about it, the deterministic guaranteed nature of smart contracts probably would, and if assuming they're accessible to AIs, could actually, interestingly enough, be the format that they prefer to codify their relationship.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “I think an AI system, as I think about it, and once again, this is not my field. This is something I might watch a YouTube video on or just see something interesting about at some point. I think if I were to just reason through it even now, I think the highly deterministic and guaranteed nature of smart contracts would probably be preferable to an AI?”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Shipping or something in defense or something in the financial system, whatever it is, but you're sitting there and you're kind of worried, hey, this thing is unbelievable. It's coming up with things I, you know, we wouldn't have thought of in 100 years, but maybe it's a little too unbelievable. How do you limit it? Well, if you bake in private keys and you bake in these kind of blockchain based limitations, you can create the conditions beyond which an AI could never act. And those could once again be codified in the very specific unambiguous terms in which you described, which, once again, in my trust issue focused world would solve the trust issue for users and make them comfortable with using the AI or ceding control to the AI, which I think in more advanced versions of AI will continue to be a concern, right?”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “In my world, that's a trust issue. And the way that that trust issue would be solved with blockchains is actually very straightforward. And I think in its simplicity quite powerful, you could have an AI that has an ability to do and control key parts of your and our lives, right? But then you could limit it with private keys and blockchains and create certain guardrails and firm kind of Walls and limits to what the AI could never go past, assuming that encryption, right, that encryption continues to work, right? And assuming that if it's not that AI's specialization to break encryption, that it wouldn't be able to do that, right? So if you have an AI that controls something very important, whatever it is.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Through that same lens. And my brain naturally asks, Well, what is the trust issue that people might have with AI? And my natural kind of response is, well, let's say AI continues to be built and improve. At some point, I have no clue where we are on this now. I've seen different ideas that were very far from this. I've seen other ideas very close to this. At a certain point, we'd arrive at a place with AI where we would be a little bit worried about just how much it could do, right? We might be worried that AI could do things we don't want it to do, but we still want to give AI a level of control over our lives, right? So”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “Yeah, yeah, I think that makes perfect sense. In terms of AI, I'm not an expert, right? So it might be a bit simplistic or naive my ideas in this field. I think everyone saw the Terminator movie, right? Everybody kind of saw the Terminator movie in the 90s and it was like, this is really scary. I personally think AI is amazing. It makes perfect sense. I think it will evolve to a place where people have, you know, just to understand, I work in the world of trust issues, right? I work in the world of how can technology solve trust and collaboration issues using encryption, using cryptographically guaranteed systems, using decentralized infrastructure, right? So that's the world that I've been inhabiting for many, many years now, building smart contracts for seven or eight, doing stuff before that. It's kind of what I'm focused on. So I view AI.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Provides this extreme level of reliability and transparency, which for certain use cases is an absolute critical component and is completely reinventing how they work. So I think people should look at what are the use cases where that trust dynamic can be so heavily improved. And that's probably the ones where this is maybe initially useful.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “I think you just write it into code that operates in this kind of decentralized infrastructure. You usually write code that runs in a central server somewhere. Now you write code that runs across a lot of different machines in this decentralized way. And then after you write it, you need services. And that's where Oracle's come in. They provide all the services. So just like you would be writing code in Web 2.0 land, running it on a server somewhere and using an API, here you'd be writing code, putting it on a decentralized infrastructure like a blockchain or a smart contract platform like Ethereum. And then you would be using various services in the form of Oracle. So they'll just be called Oracles or decentralized services instead of APIs. And you're basically composing the same type of architecture, except it's hyper reliable. At the moment, it's a little bit less efficient because there's an early stage to our industry.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “I haven't thought about that as much. It's actually kind of scary, the stuff you're thinking through now with like the war contract or something. That's not in the white paper. We don't have anything about war contracts or anything.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “Exactly. Why can't that happen? Anything that we could codify into a smart contract and anything that we all agree is the way the world should work. And then anything that we can get proof about, right? Anything that a system somewhere could tell us happened, those are the pieces of the puzzle, right? We need a trusted piece of code. We need to have agreement that that's how the world should work. And we need a system that'll tell that trusted piece of code what happened As long as we have those three things, we can theoretically codify any set of agreements about anything where those three properties take hold.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “Where politicians can commit to a certain set of smart contract kind of budget definitional kind of results, for example, we discovered oil. I promise as a politician I'm going to take the oil and I'm going to redistribute it to all of you. Well, that's wonderful. That's a great idea. Sounds very nice when you're running for office. Why don't we codify that in a smart contract? And why don't we put those conditions very solidly on a blockchain and then once you've been elected, we'll just turn that one on and it'll distribute the money just like you said and everything will be fine. I personally think that this new level of systems that allows trustworthy collaboration between everybody, between supply chain partners, ad network users, the financial system, insurance companies, and farmers, all of these are just interactions that require a trusted”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “Yeah, I think it's fascinating how the world can evolve. I think this extends a lot further than people think into many, many different parts of the global economy. It might start with NFTs for art, or it might start with DeFi, right? Or it might start with fraud-proof ad networks next. We don't know what it's going to go to next. But I think the implication of people being in a system of contracts that holds them accountable and guarantees contractual outcomes regardless of a local ego system is something that I think extends to the supply chain. You can prove that goods were sourced in an ethical way and you can prove that in a way that can't be gamed, that'll change buying power and supplier power and how people produce goods that we all consume. And then on the political level, I personally think that in a number of decades, we could literally be in a place.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “Their farm completely depends on rain, or their livelihood completely depends on their ability to sell goods, and they can't sell those goods because there's a middleman who essentially controls all the trust relationships. Now we have the internet and smart contracts, and that might not have to be the case in the next five or ten years.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “Kind of guaranteed smart contract outcomes that are as good or in many cases better than what farmers in all parts of other parts of the world have. And this type of dynamic for the emerging markets of creating a way for people to control and manage risk in their economic life, I think extends way past insurance. It extends to them having bank accounts to combat local inflation. It extends to them being able to sell their goods on the global free market of global trade without middlemen. It extends to all these things that we don't really care about, right? Because we're not farmers, but are unbelievably impactful for people that don't have a bank account and their inflation rate in their country is double digits.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “Chords would just not exist. So now these people have to wait for decades to have this very basic form of financial protection or something like a bank account even. And with this technology, they don't, right? So with this technology, if I have a $50 Android phone and the smart contract has data from satellites or weather stations about the weather conditions in the geography that my farm is in, I can put value into the smart contract and the smart contract will automatically pay me out at my Android phone. And guess what? I just leapfrogged past my corrupt government not being able to provide a legal infrastructure to create insurance. I just leapfrog pass dealing with insurance companies that will probably price gouged me and often not pay out. And I leapfrogged into the world of hyper reliable”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “Smooth out risk. In fact, a lot of the global options markets were about this, right? They were initially about people selling their produce or their crops ahead of time so that if there was a risk of drought, they weren't impacted by it, right? And that's where a lot of options trading and all this kind of stuff came from, even though it's now turned into this kind of global casino. But in the emerging market, there are literally people that if they don't have rain for two seasons, they need to close down their farm and become a migrant worker of some kind. And now they have a $50 Android phone where they can read Wikipedia, but they're still decades away from an insurance company coming to their geography and offering them insurance because their local legal system simply doesn't allow that type of thing to exist. No insurance company is going to go and create insurance entity and offer them insurance because the levels of fraud and the ability to resolve that fraud through”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “Right. Exactly. So this is the nature of why it's sometimes hard to see the full value of what our industry does because it solves all these kinds of back-end problems that we don't have, right? So crop insurance is if I own a farm and it doesn't rain, I get an insurance payout, so I don't need to close down my farm. Because if it didn't rain, I don't have crops. So people in the developed world can't get crop insurance and there's all kinds of systems that basically pay them out and then they can argue with the insurance company if they don't get paid out properly and whatever. And this allows people to”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “To keep coming back to is crop insurance, where partly because it doesn't have a tokenization component, partly because it's actually much more important than it might seem.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “Doing that, and which is happening, I think right about now, you see a polishing of the technology such that it can be made available to emerging markets. And on a personal level, I feel that the emerging markets will benefit much more from this technology, just like the emerging markets benefit much more from the internet or from those $50 Android phones that people can have because it's such a massive shift in how people's lives work, right? I have always had access to books in a library, which has been fantastic and very important. But there are places in the world where people don't have libraries, but now they have the internet and a $50 Android phone, and they can watch the same Stanford lecture that I watch. I mean, that's kind of mind-blowing realistically, right? They just went from zero to one in a very, very dramatic way. I think all of these smart contracts, and in my case, I think the one that I seen.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “I think the use cases that excite me vary between the developed market, the developed world's economies and emerging markets. I think in the developed world, what you will see is that transparency, creating a new level of information for how markets work and the risk that is in markets and kind of the dynamics that put the global financial system at systemic financial risk like 2008. And my hope is that all of this infrastructure will soften the boom and bust cycles by making information immediately available to all market participants, which is, by the way, what all market participants want, except for the very, very, very small minority that are able to game the system and their benefit and benefit from booms but avoid busts because of their asymmetric access to information, which really everybody should have and which this technically solves. I think in the process of”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “There's a lot that excites me, and that is how I think about it it's not just about we made a decentralized Oracle network, it's about we made a decentralized service or collection of services that's going from hundreds to thousands.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “And that's why this world of decentralized services and decentralized Oracle networks is particularly, in my opinion, important to our industry.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “If those services weren't available to the people who made Uber, they wouldn't have made Uber, right? Because they would have written their core code on some database and then they would have had to make a geolocation company, telecom messaging company, and the global payments company. And they wouldn't have done that because it's too hard. And that's the weird scenario that a lot of people in our industry are in. And that's the problem that Oracles and Oracle networks fix is they provide these decentralized services to take this developer ecosystem, the blockchain and smart contract developer ecosystem from, hey, I can have a database and write some application logic about tokenization and voting. and private key signing, all of which is super useful and is a critical foundation. But now if you just lay around all the world services, whether that's market data, weather data, randomness, suddenly people can build DeFi, fraud-proof gaming, fraud-proof global trade, fraud-proof ad networks.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “And it is actually the goal of Oracle's to consistently do that. So if you were to think about the stack in a very generic high level, you would see blockchains or databases. They're basically the data structures that retain a lot of information in this transparent, highly reliable form. Smart contract code is the application logic. It is the logic under which all of this kind of activity occurs, storing data in the data structure in the blockchain as a database in a certain conceptualization of it. And then Oracles and Oracle networks Are all the services that are used by the application code? So by analogy, let's take Uber. Uber initially some core code goes and gets the GPS API from Google Maps about the user's location, sends a message to the user through Twilio, pays the driver through Stripe.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “Exactly. It can coexist, and in some cases, the metal layer might generate it so the problem in giving you this straight answer is that there's just such a wide array of services If you were to say, well, Sergei, how do we generate randomness from a data source? Well, we don't use a data source to generate the randomness. That's the type of service that can be generated in an Oracle network itself. And so there will be certain computations that Oracle networks themselves generate themselves. To augment and improve blockchains”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “Oracles and Oracle networks, we don't have a blockchain, for example. There is no chainlink blockchain. Our goal is not to generate a certain set of very clearly predetermined transaction types into a set of transactions that are put into blocks and will infinitely be done that way. Our goal is actually to create what we call a meta layer, a decentralized meta layer between the non-deterministic, highly unreliable world And the highly hyper reliable world of blockchains so that the unreliable world can be passed through this decentralized meta layer.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  49. “Well, they are as far as they come to consensus, but see, there's this kind of different problem here, right? The blockchains are very focused on generating blocks of transactions within a smaller universe of transaction types, a certain block size, and a certain set of conditions. And then they have an economic system that says I will perpetually generate blocks of this size with these transaction types in this kind of limited set of transaction types, whether those are UTXO transactions or scripted Solidity or whatever it is.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source

  50. “And then, what you actually see is that the centralized Oracle networks, because they're uniquely capable of generating their own computations in a decentralized way around the data that they have access to, you actually see decentralized Oracle networks generating a lot of these services. So for example, we have a randomness service, a verifiable randomness function service that basically provides randomness on chain, and that randomness is then used in lotteries and various other contracts that need randomness. But that randomness, that's not a piece of data that comes from somewhere else. We don't go to another data source and get it. We generate it within an Oracle node that then provides it over into Oracle node or Oracle nodes that provide it into the contracts themselves.”

    2021-05-01 · Lex Fridman Podcast · #181 – Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks · IDENTIFIED FROM THE TRANSCRIPT · source