#269 Joseph Lubin: Consensys – The Distributed Incubator which Jumpstarted the Ethereum Ecosystem

Transcript

[Music] this episode of epicenter is brought to you by top-down experience a new way of hiring as top tile delivers only the top 3% of applicants including highly skilled locked-in engineers if you're looking to scale your team with a very best talent visit top.com slash epicenter and buy microsoft azure configure and deploy a consortium blockchain network in just a few clicks with pre-built configurations and enterprise grade infrastructure spend less time on block gain scaffolding and more time building your application to

learn more visit AKMs slash epicenter hi welcome to epicenter my name is sebastian Kuja and my name is fran fog and crane this is a very special day today because it's five years that we've spend more than five years now that we started at the center I've done the show every single week since then such a long time five years of course is long even in the normal world but in the blockchain world it's like an eternity yeah so last weekend so this is coming out week of July 7th and so in July our sorry July January 7th On January 4th we celebrated five years January 4 2014 was

the day that we released our very first episode which was our predictions for 2014 I went through it actually I kind of listened to it a little bit and there was some you know pretty interesting things in there but I think some things also that we were like just totally wrong about ended up being totally wrong about and how the space evolves but yeah I mean five years is like an incredibly long time and I think one of the things that stands out the most to me is like is the fact that you know we've kept doing this consistently for five years like I've never done anything in my life I think this consistently for this long amount of time and had I considered it back then III don't think I would've

thought it you know five years from how he'd still be doing this yeah that's true I think if you told me okay every single week for the next you know five years you'll have to put out an episode that would have been very daunting but of course that speaks also to you know what has made it possible which is you know more people than just the two of us work on Episode a right so obviously there's the new host that came on it was May here in 2015 and then there was sunny and now Frederica right so they've been essential to be able for us to produce knit V every week and then of course we have also team you know from all your with a bedroom tour she knows she's doing covers to Ola who's been helping

with social media to like Anna was doing some accounting and Finance work Peter always helped me we're scheduling so of course all of these people have been essential that we've been able to actually do this consistently right and so if you want to sort of like learn more about what we've been up to this last year and and so discover the team we posted a an article on our medium so it's medium.com slash episode of podcasts you can find the article there and there's lots of great pictures and you know interesting stats and stuff about the podcasts these past years I think like another thing also that has kept this going is I mean obviously the people who listen to the show

III think even in the moments where I've I've had a bit of a lull and I felt like maybe I don't want to do this anymore or you know this does get kind of a bit repetitive after a while I feel like III have this commitment to people who listen to us to keep doing the podcast like that's the reason why I want to keep doing it well one of the reasons why I keep doing is because I know that there are people who find it very valuable and who appreciate it and meeting those people all through the years has been just absolutely gratifying going to events and conferences having people come up to you and tell you how much they love to show how much they appreciate it and how much

they you know have learned from this podcast has been I think one of the most gratifying things like in most of my life I think is it's a very fact ya know agree absolutely and the other thing that stands out when you think of all of this long time and all of these interviews that we've done it's just how vibrant the space is and how diverse and how much activity but when people outside of the walked in space sometimes I would tell about this podcast and said but don't you run out of things to talk about people say that all the time yeah and of course not at all right there is far more topics and interesting projects that we could cover then then we have a chance to write all

the time you're like you have so many potentials or people that want to be on the podcast and you have to choose just the ones that we think are best and yeah so that's I think that's also just an incredible testament to the space and and also what's what's noteworthy here is the evolution it's gone through so when we started it was called episode of Bitcoin so those who've been around for a long time they probably remember that and now even in the beginning we didn't really think it was just Bitcoin there was just some other things actually the theorem white paper had just been written about when we started so I think one of our first episode was when we spoke about the theorem white paper and so even in the beginning we started we

were speaking about other things too but back then people still fall of it as the Bitcoin space right and the term blocked in didn't even exist or maybe it existed but nobody used it so I think this this diversity of the space that just keeps getting bigger and bigger and more you know kind of like a fractal going all direction this is also an amazing thing yeah I think that's probably one of the things also that has surprised me more about the space since starting this podcast is I'd never imagined I think back then that that the space would become such a diverse set of communities and that keeps growing I mean it started sort of as the Bitcoin community and the

etherium came and then other projects came along and some have some have died others have flourished but now we have like a vibrant ecosystem where you know a lot of the big networks have their own communities their own conferences and the interactions between those communities is really great and you know there's also some rivalries I guess as in any community but but globally I think like things have turned out much more positively than I would have imagined back then I mean the growth has been just absolutely phenomenal yeah next week we want to do an episode to sort of commemorate that

which will be you know all of us hosts or most of us hosts at least and we'll also be taking some questions from you so if you want to have anything that we answer discussed on the show then you know let us know about that submit submit those questions to us and you will try to get to it so you can either tweet at us at our Twitter or then there's also gonna be a reddit post no sir yeah so the will will post a reddit AMA on our subreddit the summer that doesn't have a lot of subscribers at the moment it was something we launched just recently but the post will be there so it's a reddit comm slash are slash epicenter podcast and the the reddit post will be there so

you can ask your questions you can upload on questions and also you can send us your questions on Twitter obviously and we will answer we will answer some of those questions in an episode coming up probably next week when the next couple weeks yeah so look forward to that as well well cool then let's here's to another great five years yeah I mean who knows maybe we'll be here again and in in five years the I guess time will tell if that will continue to happen for the next five years I think if it does if it does happen that we're here for the next five years I think the show again we're probably very different than five years and when it does not hopefully we'll be much bigger and with a much bigger

audience also I want to mention and one thing we didn't talk about before is just how much we appreciate our sponsors as well and those companies that have supported us throughout the years you know they have also evolved you know this we had some sponsors in the beginning and now much different sponsors but nonetheless all the companies that have helped us over the past we like to thank you so much for your support so to this week's episode so this week we talked with Joe Lubin who's the CEO of consensus and I did this episode with for the Iike and we talked with Joe for a good hour about the history of

consensus the fission and also so the broader theory of ecosystem and he you know got really insights insightful information about that sort of like got the biggest brains about but the the ecosystem as a whole so hope you like that episode and just one disclaimer Joe Lubin is on the board neurosis where of course for the guy is the CEO so just but we've mentioned that before before the episode so here's our episode with Joe Rubin of consensus we're here with Joe Lupin Joe is the co-founder of etherium and the founder of consensus

and we're here to talk about the state of consensus in the state of the ecosystem and words are going Joe so you've switched gears in your professional life a number of times can you give us um a short overview of what you did before you first heard about blockchain technology um hello thanks for having me short overview of my very long life so academically did computer science and electrical engineering I was an athlete in college so I actually laid for various for a while on the professional squash tour and spent time

sort of driving around to different tournaments and ended up at my college and ran into a professor of operations research civil engineering there and he essentially offered me a job doing some research so I I that kicked off about ten years of work that I did in robotics machine vision and in in neuron that's basically different forms of AI but mostly neural nets and that led to some work in automated music composition using similar techniques we built a composer that made some really good music and made some really bad music I

was in the context of a a music studio company that got paid for creating music for different kinds of publications God much more general after that just general software engineering my last sort of big software engineering gig was a project at Goldman Sachs where I was on the IT side of Private Wealth Management working with different groups across Private Wealth Management and that essentially introduced me to the world of finance and after that I was in the right place right time a friend of mine brought me in to help build out back-office functions he was running a strategy a money-making strategy with a

wealthy family and he wanted to start a hedge fund and he needed a partner and so that all evolved into a successful business and was essentially my introduction to the world of finance ended up building different kinds of trading systems and learning how that world the world of finance the world of geopolitics worked where before I really hadn't paid much attention to it I was mostly interested in the technology so with that background some technology are actually a lot of technology and a decent amount of finance I became aware of what I felt were concerns about how

the global financial system was operating and different issues geopolitically and I think that background made the Satoshi white paper immediately stick with me you think that having a background in finance and technology is sort of like the sweet spot for someone entering the the blockchain space in a circa 2013 2014 I guess is there not a better combination of skill sets to you know be successful in the space I think it's pretty common and in terms of people that I know who have similar backgrounds

who because of those backgrounds resonated with the ideas but moving forward just a little bit as it becomes more apparent what these the simplest protocols can evolve into and can support for a society I think it's pretty much everything so it's currently drawing people of all interests so when did you first hear about Bitcoin so very early 2011 so there were I'm not sure if it was late 2010 I know there were there's one or two Slashdot appearances that I paid slight attention to but it

they didn't drive me to to read the white paper sometime early in 2011 finally said I should read this and that's when you realized this was going to be a game changer yeah the white paper itself hit me pretty hard so yes I thought essentially I know I've said this publicly before but I was concerned depressed about the state of the world I felt like we were a cascading collapse I feel like we are still in the cascading collapse I feel like we're possibly even in worse shape right now and back then central bank's still had some dry powder

right now central banks have less dry powder so my feeling was that we were essentially at the end of life of different monetary systems and there was so much debt in the system that could not be repaid and the interest would keep accumulating and essentially there would be two likely outcomes one would be a slow cascading collapse where growth globally would be quite slow for a couple decades maybe or some sort of nonlinear events and sort of contagion where everything is pretty awful for a while at that

point a lot of people were waking up to that fact well live in our little bubble so I was aware of lots of people waking up to that fact and reading about that stuff confirming my bias shall we say but you know there were people trying to occupy everything get the word out that something is a mess and when I read satoshis paper I realized that it may not be so hopeless that we might instead of occupying everything and exiting society we might be able to build alternative systems create better foundations for better systems built on

top of them my hope was sort of flipped from being unhappy that central bank said with quantitative easing caused so much devaluation of currencies around the world in a sort of spiral to zero my feeling was hey maybe they should keep doing that for a while and hopefully they can kick the can down the road for 10 years or so and give us some breathing room to start building alternative systems and back then I and many others were so naive we thought bitcoin was kind of all we need it was

gonna be the foundation of everything you could build everything on top of that and now bitcoin is an awesome system and it's going to keep developing but it's not really easy to build versatile software on top of it so when you first came into this in 2011 and so like when we'll get to sew a theorem in a second but what were you doing between 2011 - to basically answer like when you met the tally was were you working on any project so you were still working at Goldman Sachs no that was way after Goldman Sachs so I was doing trading at bil trading systems and I was

from pretty much all of that time I was living in Jamaica so I was spending time there kind of playing around in the music industry a friend of mine wanted to build out a music career and tell us about you know what led you to meet vitalik I mean you guys are both from Toronto how did that occur yes so December 2013 I went back over Christmas to visit my family as I often did and there was I think the glow this thing called the global

Bitcoin alliance there was the Bitcoin foundation which I wasn't too impressed with and I think many people were not so impressed with it but this guy Anthony Diorio was trying to take a different approach a sort of grassroots bottom-up approach to bringing people who cared about Bitcoin together I think there was a Canadian version of it and I think he was trying to put together a global version of it and seem like a much healthier approach to do it bottom-up than to declare that year the head of Bitcoin in with that foundation and so I just I hadn't really now since 2011 I've read pretty much everything about Bitcoin and the

blockchain ecosystem master coin next etc but I wasn't really very active I was mostly living in Jamaica so I wasn't really very active in the community and I've reached out to Anthony said hi and he said that there was a meet up happening January 1st 2014 Vitalik booter and who I'd read a lot of articles from through Bitcoin magazine which he owned at the time and I was yeah I think I knew that he was very young before I spoke to Anthony but I was astonished when I found out how young he was because he's such a clear writer they said Vitalik has this new white paper a bunch of us are gonna get

together you know talking about it and world will talk about it come by the meet up so I did and spent a little time with metallic he sent me the the paper that night read it that night and a lot of people were excited about it so I like many of those people stayed close to the project it was mostly meetups in Skype discussions at that point and towards the end of that month January Anthony got a house in Miami in advance of the North American Bitcoin conference invited I think he may have invited like 9 or 10 people and I was one of those people and I'd stayed very close to the

project over that time and so was very interested in doing whatever I could to make if there him happen and so we we kind of constructed the first phase of or maybe maybe it's the second phase of the core group that that brought that project to life in the several days before the North American Bitcoin conference at which Vitalik essentially delivered his white paper hiring a stressful let's face it it's a long process of sifting through resumes and interviewing candidates without any guarantee of quality but it doesn't have to be this way companies all over the place are experiencing a new way of hiring with top-down if you go to their Trustpilot page you'll see that of the hundreds of

people that have left reviews over ninety eight percent were four or five star ratings including one guy who wants to give his developer a bear hug that says a lot top dog gets all this great feedback because they focus on their clients and their top priority is quality they only accept the top 3% of applicants including highly skilled boxing engineers one of these engineers is Roddick Ostrovsky Roddick has experience as a lead software engineer and data sign just for Sony and Expedia then he discovered blockchain and he became totally consumed with etherium he worked as a consultant for the firm start on chain and his time lock tap when the top quarter consensus you port an identity blockchain hackathon then he expanded his reach through top tile he worked

with a bunch of clients on projects such as smart contract development and a POC that leverages blockchain if you want to hire engineers like Roddick for your team go to top tile comm slash epicenter for a Norris trial a top tile director of engineering will deliver your next hire in as fast as 48 hours and you'll get $1,000 credit when you decide to hire we'd like to thank top towel for their support of epicenter so the etherion founders a group is quite an eclectic bunch right I mean there's so many people who have very different skill sets and skill sets and very strong skill sets so what was what was it that you brought to the table that that that you contributed to the project um so I was a software engineer for a long time

but at that point I hadn't been a software engineer for 10 or so years I you know dabbled a little bit in Mathematica and other things MT for building trading systems but obviously have a fairly strong background in computer science so we did a lot of conceptual work back then thinking about what if there was thinking about what gas was should we burn gas what should be the the issuance model so I was involved in a bunch of that early on and and I guess because I probably had more experience in business than others ended

up driving a lot of the discussions with lawyers around the token launch so we essentially took that opportunity to tell the world what aetherium is what a theorem was and what ether was and what gas was because it was just it's just computer science really at that point and in order to help the world understand what we thought it could be we is that these constructs could be interpreted we worked with the a prestigious law firm in New York and essentially got an opinion about what our token launch was and essentially had

to define all those things had to define what either was had to define what gas was and essentially convinced the lawyers and convinced ourselves that according to the Howey test we were not selling security an unregistered security potentially to Americans but we were selling this consumer utility token that people could use to run programs on a world computer store data on a world computer and that their fates would significantly be independent of the fates of the etherium foundation and the

etherium founders what were lawyers reactions when you first were bringing up this idea of aetherium and and then even even more i guess perhaps crazy inner minds like raising money on this platform what were the reactions like um lawyers are generally pretty happy to take your money um for exploring different and hopefully complex things but these these people that we worked with at prior cashman were already pretty savvy so they're already significantly aware of the Bitcoin space and really great smart guys it was a pleasure to work with them and they were

they were really excited about the project I think I think they said it explicitly but I'm pretty sure they enjoyed that project quite a lot more than your average project did you have any doubts at the time so basically if if now four years on you know where theorem is and you could have told that to your former self would you have been relieved or what you have been disappointed not relieved delighted obviously if I have doubts I have sort of judged something and chooses not to do it I'm not a very doubt ridden person if I see that something can be done I'm usually

pretty clear that there in the infinite number of pathways that we could take to get it done and essentially I and I hope the people around me and just put our heads down and get it done and so that I mean we there wasn't much doubt in my mind that these technologies were so profound that they would have extreme transformational effect on human life going forward unless something really weird happened like some sort of asteroid set us back too much but these are great ideas they were out of the bag nobody's gonna be

able to stuff them back into the bag and so I was quite confident that it was almost an engineering problem at that point a lot of us could see it a lot of us could sketch the the early possibilities Dropbox creating tokens in a few lines of code and it's easy to imagine building societal infrastructure over time in layers upon that sort of foundation have you talked to the lawyer since so I mean you said that that dinners a couple dinners in them in a small number of places so basically you you you guys try to construct ithi reom

such that it wouldn't be security and the sec has since we did we did construct it so that it would not be a security yeah I mean basically if you read the as you see memos it seems that they they are saying that ether used to be a security and now they said there without opining about whether it was ever a security or not we do not consider it a security now okay so I think that bad different ways three that but I mean it all ended well okay so so the next stage was was after theorem had launched and the token sale had the crowd sale had had commenced you

found out consensus right in October 2014 yeah really really kicked off in earnest in early 2015 but yeah so what was the consensus vision back then it wasn't too dissimilar from what we were thinking about on the etherion project and with the etherium foundation we had notions that that group of people would build for-profit projects and companies once we finished us a version one of the platform and released it into the world gifted it into the world and put it under a foundation for her future

shepherding didn't work out that way it became clear eventually that we should just focus on the open source nonprofit situation the open source platform and and that was definitely vote Alex preference although early on he early on we were all open to the notion that it would be a hybrid nonprofit for-profit thing but it was too complicated to make that work and essentially we all agreed that because we had these shared overarching goals even if we might have

some difficulties as any project team might we would keep it together and and achieve the goals in front of us and we got that done and and the different people have in some cases gone in different directions and are many of us are still significantly involved in the a theorem ecosystem so you mentioned you founded consensus I guess things started happening in early 20 fifteen can you scribe what things were like back then I mean the the ecosystem the Ethier musica system was very nascent there weren't that many projects what was it like sort of starting

consensus in that context yeah so I've described it as let's start a company um build software applications on a platform that isn't yet released with no no developer tools in an ecosystem that doesn't yet really exist and so that's roughly what it was like so we started out building things like a little accounting tool and adapt store and the people who were building stuff realized that we needed some tools to build better and so Tim Coulter built a whole

bunch of scripts when he was developing DAP store and turned those scripts over quite a bit of time with lots of help and effort on his own part into the truffle suite of developer tools one of the individuals who is working on our accounting system balance three ended up having strong ideas about identity and built a quite a large team around that to build out you port and in now three box and Aaron Davis was working on meta mask and was in a situation where sort of made sense for him to leave that and

consensus was very excited and happy to support that project in fear as a project that essentially started as a consolidation of internal consensus efforts at building are a bunch of different test nets for our different projects and some amazing engineers put some organization to that and a few months later decided that we should make it available to the Jeremy system and it has been available that essentially no expense to the ecosystem for a long time and you know it's a don't really know what it's going to

take to bootstrap technology ecosystem that's different from what's been built before and so organically we kind of just built what we needed and even token launches sort of came out of that one of the earliest token launches was a project called gnosis absolutely brilliant project and it and and singular and a few others started to get a lot of people thinking about essentially the first killer application on a theorem do you have a sense of how many projects in total we're started

within consensus so we have around 50 projects running right now we've invested in over 40 in there a bunch of projects that have been discontinued for various reasons so I could look at a list of probably over significantly over 100 projects have been started at consensus and many of those continue so when you start at consensus and I mean obviously the team grew you know to now being one of the largest if not the largest team a I mean I guess a I guess

you know if you're counting like all the projects in consensus the the largest team in the human ecosystem did you foresee that you would grow this company to you know over a thousand people in just over what four years just like that oh so it wasn't intentional it was a responsive or reactive now as I indicated before organically we we built what we needed to build and we developed the ability to look at different projects and if the projects were cool or potentially valuable then we would greenlight lots of those

projects it was a phase in our ecosystem a period in our ecosystem where it was about exploration and demonstration it was as I've written now somewhat publicly um it was okay to just show up and do something cool and make a splash because we were trying to explain to the world what this technology is how it works in and why it might be really interesting for building systems going forward and I think we've been very successful in that and extremely proud of the projects that we shut down but

learned a ton from and the projects that are still going and have a life of their own some of which have externalized out of consensus and I think for that phase we were exactly what what we should have been and as we recognize that we now have an ecosystem a real thriving business ecosystem similar to previous ecosystems like database ecosystems and browser ecosystems and mobile phone game console ecosystems we now have to be a more competitive more rigorously

structured and functioning company and essentially other entities are streaming into our ecosystem validating what our hypotheses were and now we have to compete with them and we're pretty excited about that pace this kind of brings us to the next topic which is the round of layoffs at consensus now I believe 13 or 14 percent something around that has already left the company the spokes for the most part are being spun off into entities of their own and the company is downsizing correct

journalists tend to write things to get readership to get listeners and often they don't really concern themselves too much with the facts so there was a great sense sensational ISM and exaggeration we did look at different groups in solutions in HR in community and some other spaces within consensus and we streamlined we essentially removed a bunch of job functions that didn't make

sense for consensus 2.0 and maybe will rebuild some of that going forward but we need to be a leaner company and spokes have spun out of consensus since the start that's essentially been the plan we have essentially a pipeline where many spokes can stay within consensus if they're doing great work for quite a long time and be well supported other spokes prefer to go it on their own and you know choose to leave consensus we are going to move

from what I would consider to be an opportunistic model to something that's much more structured and this is something that has been in design for close to a year now probably how much now this how much of this is linked to the state of the market right I mean other companies also are laying off people and I mean surely there must be some component definitely yeah definitely accelerated by the drop in price in our ecosystem by the contraction in our ecosystem but again it's it's about us getting much more structured about how we form spokes

how we invest in spokes and how we move them through what we're thinking of as a pipeline where they essentially get involved with other VCS towards the end of that pipeline if you've listened to previous episodes with Marly gray and Matt Turner you know that Microsoft is committed to providing enterprise-grade tools and infrastructure for blockchain developers well the azure blockchain workbench is perfect for organizations building consortium networks take the etherium proof of authority template for example it's ideal for permission networks where consensus participants are known and reputable etherium on Azure has on chain network governance that leverages parodies extensible proof Authority client each consortium member

has the power to govern the network or delegate their consensus participants to a trusted operator and parodies webassembly support allows developers to write smart contracts and for many languages like C C++ and rust Azure blockchain workbench was created on the same principles that drive all production services and Azure so you know you're relying on secure redundant infrastructure that can scale and with built-in services like authenticating api's off chain databases and secure key management services you can scaffold your infrastructure in just a few hours to learn more about Azure blockchain workbench and home Microsoft is advancing blockchain usability and enterprise check out AKMs slash epicenter and start building today we'd like to thank Microsoft Azure for their

support of epicenter when you think back at consensus 1.0 now other things that you would have done differently could you do it all over again I don't really think that way I think if there are any mistakes that we've made and I'm sure there were many many mistakes those are just things to learn from tonight there's no way to in my opinion plot a perfect path through a complex domain you have to bump into stuff and learn and get better so again I just things don't talk to mind about you know what big thing we did wrong that we

should have done differently it's gone remarkably well so far in my opinion all right are there any mistakes that you you think you can think of the perhaps in hindsight now you could you can you can fact learn from in this time so nothing is coming to mind right now and it's you know we could have taken different pathways in our ecosystem we could have moved faster at the protocol level perhaps the biggest mistake it wasn't really a mistake was that consensus didn't spend a lot more time

building a team focusing on aetherium protocol level activities we sort of expected that the ecosystem would develop theorem 2.0 more quickly and layer two technologies more quickly and we were focusing perhaps too much at the application layer and we have starting maybe eighteen months ago we started to correct that we have essentially built something called Pegasus protocol engineering and systems team and I think we're around sixty people that are

building out the Pantheon client and doing work on quorum and doing work on different side chain mechanisms and layer two mechanisms and lots of Rd on theorem 2.0 stuff and a theorem one dot X work and our in fear team has actually been driving some of that stuff as well are these things that you would have hoped the etherium foundation was going to tackle Oh what what a mean question yes so the etherium foundation is good at shepherding research at setting up grants at now they employ some important

people in our ecosystem and Vitalik is doing an absolutely astounding job on the technical side of driving the most capable platform forward and it's a complicated endeavor it's really complicated to try to stay neutral which i think makes a lot of sense for the foundation and yet still drive the technology well in quickly I think Vitalik has chosen a good balance and I think in the context of so many mean and clueless people on the internet who

attack a brilliant young man he's made some great choices he has done what he can to try to decentralize the process more it's already quite a decentralized process it always has been I've been very comfortable with that and you know we have he leads by doing he leads by example he never tells anybody what to do so I'm I'm happy with with the foundation and the foundation itself is evolving so it's opening up much more in it so it's great to see that like the foundation and the ECF four are putting bounties out on on get coin and trying

to further decentralize development and consensus and Pegasus are really happy to be one of the many teams that are building as their own clients I think they're like 10 or so teams at this point and I haven't so collaboration was quite good early on but I haven't seen this much warm friendly excited collaboration where lots of people are meeting in different parts of the world every few months and getting on calls every week and really it's moving really fast right now so exciting to see I do think the timelines for a theorem 2.0 are

contracting right now people are building theorem 2.0 as we speak as a follow-on from this consensus during the last four years has changed considerably from consensus one to content misses - so you said that the vision has kind of stayed the same but the bill isn't worried about one point two right now one point two okay so yeah so it basically it's it's it's it's a process right where do you see consensus going do you think consensus is going to be a thing in twenty years time so as you're significantly aware and people that you work with are quite aware consensus has really been many companies it's gone

through many iterations since it was essentially birthed in New York City and in 2014 so we started as a venture production studio we thought we would build some MVPs and rap companies around them and bring in a venture investment to grow them and started getting calls from from different companies and governments and central banks even to explain this aetherium thing and evolved a consulting practice from there and we'd seen synergies between the consulting practice and the venture production studio and we built an academy and we started doing different

capital markets activities so we've really evolved through several stages already consensus 2.0 is going to be a lot like consensus 1.0 will still embrace experimentation but there will be much more rigor in how we move spokes through the company and now we're already starting to we're seeing pretty great traction on the solutions the consulting side of things and we'll see many solutions project use many of our components and components from the

etherium ecosystem things like maker dye and aragon as we're starting to see essentially can convergence in the many things that we a consensus are doing in the many things that people in the ecosystem are doing over we can always start to use each other stuff to build more complex solutions to bigger problems so it's kind of streamlined and better version of what we're doing less about doing something fun and cool and more about doing things that are genuinely valuable to people out in the world 20 years from now nobody has a shot at

at making predictions about 20 years from now unless they're they're really macro predictions so if it's a macro prediction then hopefully the world moves towards more decentralized protocols rather than centralized siloed systems politically unfortunately it doesn't seem like we're moving in that direction right now but hopefully clear heads will prevail and protocol-based open platforms are incredibly valuable for enabling more people to access more value very inexpensively so if you set up a platform for the music industry for

instance maybe it's called gujo rights management and enabling content creators to directly access their consumers with little or right-sized intermediation then think you have a context in that industry and many other industries where more people have greater agency and more ability to make a living so hopefully intermediation around the world gets right-sized in the banking industry and the insurance industry and the ride sharing industry etc intermediaries are great but they often extract too much value from transaction flows and in

these kinds of systems I believe will enable us to have very thin intermediation layers so you have said many times before that you think blockchain is going to make the world better and you just said that disintermediation is going to be a good thing do you think if if you had to specify a metric which to use by which to showcase that the word with blockchain is actually better than a word without rough chain would it be the would it be the disintermediation or would it be something else probably probably moving towards decentralization

disintermediation as part of that so decentralization can imply that I'm in control of my identity that I'm in control of my personal information that I'm not being treated as a product that I'm not being exploited that people aren't keeping information from me that might be valuable for me to make my own best decisions I think smarter people than I will have to put metrics to all of that but certainly those two elements disintermediation and decentralization go hand in hand I believe like I think

there will be divisions within the science of crypto economics that explore those things like in there in the current state of the ecosystem you know they're like there's an entire spectrum of technologies and I guess more more accurately implementations of those technologies so on one end of the spectrum we have something like aetherium which is actually quite decentralized I would put you know the polka dots the cosmos Bitcoin etc in the same category and on the other side of that well we have permissioned networks so consortium networks that are demented by banks insurance companies you know companies in the supply chain space etc and others which we don't really know

about but some of them we do because most of them are sort of kept behind closed doors and serve a specific purpose and then there's you know perhaps some solutions in between moving forward and sort of in the next year or two years and then perhaps even further to 10 20 years what do you see the ecosystem looking like do do you think that things will go either one way or another or do you see like I'm more of a multitude of solutions working together what's your take on on that sure so for a lot of people blockchain technology decentralizing technology has become a religion has become tribal and my perspective is I think more pragmatic we

are running a company set of companies that are trying to figure out valuable solutions either for consumers or for corporate entities or other kinds of organizations and essentially I believe one should use technology that is appropriate for the use case so in a context where you have a consortium it might make sense to build a private permission blockchain solution so that they can all trust one another more one advantage of that is that once they see the value of decent

revising technology they might move further and further down that pathway as it gets more proven and in common the decentralized protocols are not sufficiently scalable at this point they don't have sufficient privacy and confidentiality at this point or that those activities or technologies are nascent and so I can absolutely imagine a an aetherium or similar platform being public and permissionless at its base while different systems built on top of it are our private and permissioned so

now just like companies moved from you know their own internal data centers to the cloud as they got more and more comfortable that with that technology I think we're gonna see the same thing because I think we can build better fairer systems on decentralized technologies with decentralized compute and storage and bandwidth I think the cloud is a really great analogy and I think similarly we might look at something like V all the companies that were running corporate intranets in the 90s and how progressively they moved on to so the public internet and now using cloud services and Salesforce or whatever so if you look at those if you

look at those examples of the past right unlike how how companies went from experimenting with new technology and then moving to something that was you know more robust more cost-efficient so it's better off for everyone what are the steps that one can take in the blockchain space to say get a company like a bank or consortium and banks to start moving towards that more decentralized model well build something for or with them that they appreciate so a consortium or a supply chain can be somewhat closed for a while but when you're putting real financial

assets on blockchains you simply can't have those financial assets on private permission blockchain so that we're not gonna be able to serve the world very well they may serve a very limited context so when you're putting crypto currencies or other kinds of Krypt of assets like bonds and equities and derivatives on a blockchain system that has to be a radically decentralized system otherwise you're gonna have collusion or censorship or government control essentially it is or improper government control it is necessary to build financial infrastructure on that

radically decentralized platform so if you're say trying to build a commodities trade finance Network as we're actually doing in the form of Congo you start by building a handful of use cases so kyc document exchange you might put letters of credit on that next at some point you're probably gonna want to interact with a network that has quote real money and magic internet money is rapidly becoming real money so you may want to enable payments in Bitcoin or ether you

may want to enable payments in many of the price stable currencies that I think there are about ten of them ten projects or so on a theorem right now with price table currencies the maker Die is one of the strongest at this point and so either building bridges between one of those networks so that they can interact with a public blockchain or migrating one of those networks to public aetherium is one possible path forward and one of the beauties of aetherium unlike any other platform is that there is the public network that is seeing so much activity built on it but there also

many private permits and implementations in different situations and those things are really quite trivial to migrate to the public watching when it is sufficiently scalable and when business interests are comfortable with that so they use cases all over this very broad spectrum of decentralization do you think there's a chance that the entire technology so blockchain is a technology will just vanish that it'll go go away and in 20 years time no one will know what this thing was I think people will remember at minimum but so I think people are interested in having better systems

better economic and social political systems by which we conduct our lives if a if an a general AI was developed perhaps and we could do proofs that would constrain that general ai's behavior to only act in the best interests of human beings it might be nepeta in a sense iran Nishant and and craft great lives of challenge and wonder for all of us and you know maybe that wouldn't be such a bad situation and maybe we wouldn't need blockchain but until that sort of thing happens if

it ever happens which probably won't we need to be able to interact with one another in fair contexts on on flat playing fields we need to be able to transact with one another in ways that can't be cheated even if we don't know one another even if we're competing with one another and these decentralized protocols are currently the the best implementation of that so it may not be a blockchain system like I feel like it's probably gonna have very significant elements of blockchain and that you'll have minimally sufficient decentralization for different transactions and we'll

have to get quite scientific about what that means but I don't know any other way to ensure that people will be fair with one another other than by having other entities verified the fairness of their interactions so doctrine of blockchain like systems are here to say you think what but what what would you see as a failure of aetherium so what in in ten years time what kind of set of events would make you say oh gosh that really shouldn't have happened that way a failure of a theorem would be if it squanders what I consider to be an order

of magnitude or two orders of magnitude lead in terms of technology development and ecosystem development we're still attracting many of the best and the brightest and there are other great projects out there that are attracting great people and exploring the solution space building up the technology it really does look like a lot of the next generation platforms are converging on similar solutions like you awesome and beacon chains etc and seems very likely that hmm if the Ihram is gonna get there first or very close to first and in the meantime there's just so much being

built on a theorem at the base layer and at layer two with different kinds of technologies how does the theorem fail from there I guess by giving up its the momentum is pretty strong so I it's hard to see if there iam becoming inconsequential ten years from now the technology will evolve quite rapidly I believe there will be something called aetherium 1020 years from now won't look a lot like version 1.0 of aetherium and i'm sure there will be many other decentralized protocol

platforms including ones that do things similar to what a theorem does but theorem is unlikely to go away anytime soon so we've talked about this before but the bear market is is really you know putting a huge toll on the ecosystem as a whole like what do you what advice would you give the companies that are kind of in like life support mode and what do you think like if this this current situation lasts a long time you know what do you think people will accomplish in this time of adversity well I think I think we turned the corner I am aware of so many things that are going to be happening that are news that's going to be released in 2019 that I'm extremely optimistic about about

this year I think it's going to be another massive growth year for our ecosystem that said it's a really good idea to think lean at consensus one of the things that we want to return to is to having more constrained budgets so that we have to think through things more and build better solutions with less and what's your wish for 2019 what do you what would you most love to see happen in this ecosystem I think an epic result for 2019 would be a fully

decentralized thing consisting of a decentralized autonomous organization that supports some sort of useful application like an exchange something that is profoundly decentralized in in virtually all of its aspects that would be a really great thing in half yeah a true Dao that you know works and doesn't crash and fail miserably yeah that would be an epic and stray ssin awesome well Joe thanks so much for coming on the show today was a great pleasure to talk to you and looking forward to having you on again in the future and best of luck for 2019 great thank you both I the best thank

you for joining us on this week's episode we released new episodes every week you can find and subscribe to the show on iTunes Spotify YouTube SoundCloud or wherever you listen to podcasts and if you have a Google home or Alexa device you can tell it to listen to the latest episode of the epicenter podcast go to epicenter TV slash subscribe for a full list of places where you can watch and listen while you there be sure to sign up for the newsletter so you get new episodes in your inbox as they're released if you want to interact with us the guest or other podcast listeners you can follow us on Twitter and please leave us a review on iTunes it helps people find the show and we're always happy to read them so thanks so much and we look forward to being back [Music] [Music]