Epicenter – Looking Back on 10 Years of Crypto. AI Doom & Gloom? SPECIAL #500

Transcript

welcome to epicenter of the show which talks about the Technologies projects and people driving decentralization and the blockchain revolution I'm Sarah sanchucho and I'm here on episode 500 of epicenter with Felix Lutz Brian crane mayor Roy Sonny Agarwal and felika Ernst and today we're going to be well looking back on the last almost 10 years of epicenter and also looking forward to the next 10 years of epicenter and uh yeah discussing a number of things including you know where we think the ecosystem is heading um things that we thought would have played out differently but uh surprised

us and um and also some some exciting surprises so let's get started in a world increasingly driven by cryptocurrencies having access to accurate and reliable data is crucial are you looking to build cutting-edge applications or websites with real-time cryptocurrency data introducing coin gecko's powerful API you gateway to comprehensive cryptocurrency information trusted by thousands of Industry leaders including metamask chain link and etherscan coin gecko our sponsor for today is the most comprehensive crypto data aggregator in the market supporting more than 10 000 crypto assets aggregating from over 700 different exchanges through coin geckos API you

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yeah Sunny how long has it been since we've been on epicenter oh when's the last time you did one of these well it's definitely only like two or three weeks because I was on one at Avalanche but before that probably like over like six months I mean Sunny almost looks grown up now I suppose this ages you I'm fine but I I feel like this is I'm not the person who this question was intended for yeah yeah okay I can uh I can go yes so some of you may have followed like you know on Twitter I was writing a little so I I was basically went to Bucharest for like a few days this is like almost a month ago now or three weeks ago or something oh maybe almost a month ago

and then I had started having this like strong intense stomach pain and I had it sort of before so I was like ah this Line's just gonna go away uh but then it didn't go away and so I ended up going to the hospital and then it was like the appendix was inflate infected and then uh and then it burst so then they had to do this uh surgery so they basically made a big cut sort of like I don't know 30 centimeters in the you know the whole stomach and had to like clean out everything and um yeah and basically are there pictures of this by the way they are they are so I was basically and then I was in the hospital one day I'd love to see this

yeah I mean I posted on Twitter uh there's some no the pictures of you opened up not the pictures no I don't have any I don't have any pictures of that I think it was like three and a half hour surgery or something yeah and then I was basically in the hospital for around almost two weeks I think and yeah and now I'm back in Portugal and so I've been kind of recovering from that uh lost like seven kilos or something uh but but I'm okay now right so now it's basically just sort of you know getting on the recovery but everything's fine but yeah it was a bit of an intense episode definitely and um yeah

if yeah it's a lesson lesson here is if you have really intense stomach pain don't ignore it got pretty tense for it got pretty tense for for at one moment I think like you were you were tweeting I think on the day after the episode uh after the the surgery that things were getting worse and you know I I got the sense that you started perhaps fearing for your life like how how bad was it like how close were you to things becoming you know potentially quite dangerous yeah it's sort of hard to tell I mean I think if you read about sort of the state I was in you know if it was like a hundred years ago right like 90 of the people in that thing would die you know

because basically uh if you didn't have antibiotics then I think uh probably would have died um so now I guess it was kind of serious it wasn't like hey you know I think they they didn't they did they diagnosed it the right way and then they sort of treated it the right way so I think it was okay you know definitely at some points the doctors were telling me like oh this is looking really bad and and things like that and of course like you know how how do you um it's hard to sort of interpret it I did have a lot of pain right I think the pain was actually the hardest thing to deal with right because when you just have hours and hours and

hours of like intense pain at some point it gets like you know really where is he down and I mean I remember going in when I was going into surgery I was like okay like maybe I die right like who knows like I mean I don't know what the chance is but so and I I felt really I felt actually quite a piece at the time and I was sort of wondering I don't know if it was just all the painkillers I was on I was like okay this is was definitely slightly high on painkillers so but I I felt reason to be at peace with the idea of like okay maybe I'll never wake up from this um so yeah who knows we're all super happy you woke up right definitely yeah

I'm I'm glad we're getting all of this out because um you know the last couple of weeks when you go to conferences people people come up to you and say like Frederica okay and like literally like at edcon I was probably asked like 15 times um how do you answer that question yeah well the first time I was like oh yeah poor Brian and so on but you know after the third time I was just like yeah he's gonna be just fine can I tell you about no it's a chain yeah but so now I'm taking it Taking a bunch of time off which is like so nice

uh so I I think this is like I mean partially having still recovering but I think partially also I just like really needed a break and so this is sort of like a nice timing too and I think it's gonna it's also nice that you know things are kind of in a good place correspondence in a good place you know here we have like you know lots of great people hosting podcasts and uh so I I think it's it's you know it's fine at the moment for me to take some a bit of time off so I'm going to take all of June off and it's like really really nice to just like do nothing for a lot and also I had a bunch of traveling uh cancel all this traveling and I I think this whole rest is like super super happy about it

and uh do you somehow uh after this ordeal did you have some some kind of you know important life realizations or anything like that that you know that this uh has sort of imbued on you or well I do feel like the sort of thing of like just taking some time to like rest and chill and do nothing I think that's like something or I you know I mean I could have of course done this anyway right they could have been like okay let me take off a month or something because uh uh but you know I sort of didn't I didn't like allow myself to do that you know it was only because of like then getting yelled at that sort of so I I do feel like that is one thing I felt like

okay I should be like maybe two years from now I will maybe take off like another month or something right so I I feel like you know I think you know if you think like let's say something like okay now you're building this company then you know it's getting kind of gets like tiring over time right and exhausting and I think a lot of people right when they build startups or build they build things they they want it to end because they're working because they're just kind of always so semi-burned out and exhausted right and then they're like okay I need to get some sort of exit or something and you know like and then then finally I can rest and I think that's obviously you know I mean okay maybe

good in the sense that people work really hard but also sort of like problematic because then you like you know you want the thing to end because he's so exhausted it just makes it sound like people want to die they're looking for an exit and it just wants some rest I mean I think it's so common I think so so many people though you talk about like running startups they're like okay I'm just like you know pushing so hard trying to get there trying to get there you know like I just have to get to this Finish Line I know it's completely unsustainable like I'm gonna like but like you know again like two more years and then like sell this thing and like I don't wanna like have anything to do this anymore and you know obviously that way you

cannot you're gonna do something for like a long a longer time and I think this kind of break is like super valuable for that so I was also thinking you know like let's say a course one if there's people who've been there for like years and years to like you know be great right for people to maybe encourage them to do things like that as well cool very cool well uh yeah we're all glad you're doing better and uh I bet the employees of course one are also happy that they'll probably get a a month-long break at some point well it hurt here well we should discuss that internally but I I think I think that's good that area cool well uh let's let's um let's dive into uh

topics we had planned for today's episode so I think the first thing we wanted to discuss is you know I mean I mean maybe before we get into this like how does it how does it feel to everyone to be at 500 episodes you know it you know it's just it is just a number and we kind of always have a host only episode at every you know significant kind of number we did this at 400 I think we did the 300 as well yeah what how do you feel about it I think you and Brian ought to answer this fast right because you weren't here from we we got we got we weren't here from episode one right so basically I think this kind of changes something whether you kind of join at episode 1280

or whether you've always been there yeah no I mean I'm happy to share what I how I feel about it you know something so like you know as many people know I I was uh kind of running epicenter you know the company for a while and was kind of hosting a lot of episodes over over the last like like 2019 to 2021 or something and uh and then took a bit of a step back to focus on other things on interop Ventures and nebular Summit and and the interopers my other podcast and um and I also enjoyed that that period you know like when you say like this kind of burnout feeling I really felt kind of burned down or burned out around that time um and um and taking a step back from it has really made me appreciate it a lot

more and so I I do appreciate like coming back and hosting episodes uh you know on a semi-regular basis but also it's it's gotten me to appreciate just like the the importance of epicenter sort of in in crypto culture and it's something that when I was really in it I wasn't sort of fully aware or I wasn't appreciating fully just how important epicenter was to like so many people and then it's having spoken with people about it over the last like two or three years that people like you know like episode are really kind of was a part of my Learning Journey when I came into crypto or like I got rich because of epicenter or I got you know I I I got this job or like I met my co-founder through epicenter Earth and

um and so yeah I've kind of in the last couple of months or the last year I've got like a renewed appreciation for you know what we've built here um but also you know the the um the importance that it's had on the ecosystem I think to a lot of people yeah definitely it's always amazing to hear those stories uh I feel like especially at like yeah I guess it happens a lot yeah here here it's this kind of stories off and it's definitely beautiful I I think the amazing thing for me is just that like such a long time right like almost 10 years now and you know it's not like I mean it's just one episode at a time

it's just like every week with trying like okay we gotta do an episode right we gotta do an episode we're gonna do an episode and then you know you keep doing it and keep doing it and then you get to 500 at some point right so it like I think you know 500 episodes that would have seen so like inconceivably large at 10 years seems like it's a crazy amount of time but then yeah if you just just keep doing it for years and years then that's that's sort of how you get so that's pretty cool yeah yeah apart from brushing my teeth and like eating every day I think it's the thing that I've been doing for the longest of my life we still have at the state where we've only we've only missed one week in the entire 500 right the only correct like

we've actually had like wow that's that is insanely impressive yeah and I think this is also something that listeners don't always appreciate right that sometimes these episodes they're recorded just in time to be released that week I mean sometimes we have like a couple of lined up already and we kind of we have them recorded we can just release them as we go but uh yeah often it's um it's a lot of juggling yeah it's certainly a lot of juggling um so what what's uh and here are you I'm here and Felix you've been uh pretty quiet since the beginning here um mayor you've been here the longest after Brian and me so how does it feel to be here and still still coming on once in a while

yeah I mean it's great I I don't have any profound thoughts I see like the crypto space has grown way faster than what I expected it to in terms of prices in the last 10 years while I've been at epicenter and um it's grown way slower than actual usage than I thought it would so in some ways I set the the price to actual utility delivered is way out of whack than what I thought it would be in 2014 yeah so I guess like I'm I'm happy to be in the crypto space and also like wishing that

we had much better product Market fit found in the in the last 10 years so slightly disappointed also from the crypto space I think I I know where you're coming from I think if you look at the amount of tooling and the amount of infrastructure and the amount of tools in the toolkit we have at our disposal now to build products I think we're now really in a position to actually build products that are genuinely just um a better user experience than their web 2x equivalence right so and I think this is kind of that's where we kind of need to get

to to kind of work for Crypt for crypto to actually have societal value right I mean so basically you need to offer user experience that's strictly better what than what was previously possible and I think we're now starting to see like the first glimpses of what that may look like and I think that's super exciting um I also I also think it's taken longer than I would I would have imagined at the time so I totally see where you're coming from but also on the other hand there were so many things we didn't think about that you know that just needed to be built and try it out and I I mean it's not like we as an ecosystem haven't done stuff for the last 10 years

yeah I I don't jump in here maybe please so I I can I wear this very much resonates with mahera is saying I mean when I got into crypto you know this was like the 2013 time when Bitcoin went you know from like whatever seventy dollars to like a thousand something dollars at the end of the year and you know you started to have main key mainstream coverage of Bitcoin in the media you know and then it felt like wow this is really happening people are like getting on board and I was very sold on you know we are gonna have you know this is gonna go mainstream within the next like you know two years or something right like I was very

it felt like that and I think that was a pretty common view at the time and now it's you know like so many years later and like you know how many really like active crypto users are this and all a lot and then what we've had is this sort of the whole thing of oh you can issue a token and the token can sort of you know represent the future value and people may not use it but the tokens worth a lot so like it gives you funding to invest in it and it's it's fascinating how you've had basically this really substantial industry developed all based on you know future expectations you know this basically

very little you know real substance and usage and revenues in the entire space and so like oh but machine is going to happen in the future hence we're gonna value this token today hence you know you have now all these revenues and people can raise money and all these people and all of this but yeah I I would not have expected that I did not see that coming and of course maybe it's it's great for all of us working here but also yeah it is a bit disappointing that it's still like so little actual users do you think Bitcoin like is it feels like the moment that Bitcoin was like built for like is has started

to come and is coming like I feel like we're entering this world of like d dollarization uh at least entering this like multi-polar currency world uh you see like you know the whole brick stuff happening like you know a lot of countries moving away from dollar-based Commerce and you know this is even like earlier this year you had like banking system like uh shakiness and stuff like it feels like all the problems that bitcoiners have like pointed out are like coming true but do you think Bitcoin is actually in a position to like capture any of this like China has been buying so much gold in the last like one

year basically like if you look at the how much they've been increasing their gold supplies but like you know wasn't this what Bitcoin was meant to come in and do and like hat and if and what is why do you think Bitcoin has actually failed to step in and take on that role that it was designed to Banks Banks don't like it look I mean Bitcoin and crypto in the project of crypto is is political it's like inherently political and it I mean we should always remember that and it is um threatening the the power of Institutions whether that's like governance government institutions but

also financial institutions that are you know in many places very close to government so I think um that you know in a nutshell is sort of like you know the the sort of bastardized uh explanation of why but uh yeah at a high level I think that sort of recovers it in my 10 years in the crypto space I have essentially come to the conclusion that the Bitcoin vision is kind of wrong so what I mean is the dollarization will happen yes major banking crisis will happen but

I don't think Bitcoin is the beneficiary of either of these trends to the extent that we think it is like sometimes we imagine it you know five million dollars per coin um it won't go to go to that extent and my realization is that the argument for why Bitcoin should be a beneficiary of let's say a big debt crisis or um currency people losing trust in currency is usually that a it's either like a store of value something that will hold value over the long run or B um it is like a transactional

is it transactional unit hit the transactional unit domain uh bitcoin's volatility prevents it from being a great transactional unit meaning and the the the perfect illustration of it was in geopolitics it happened like a few months ago when um so these days there's like the USSR sorry the Russia nobody won lots of countries don't want to buy oil from Russia India is kind of bucking the trend India is buying oil from Russia converting that into uh products and selling it to the West again and it's pocketing a difference

and India and Russia are kind of like negotiating what currency shall India pay Russia with and India wants to pay with the Indian rupee and Russia doesn't want to take the Indian rupee and the reason for Russia not wanting to take the Indian rupee is it can take a lot of Indian rupees sure but then what will it buy with Indian rupees it can only buy Indian products and it doesn't have a lot of demand for Indian products so it's like the economy that actually is the most productive you want to hold the currency of that economy from for transactional purposes which is why people Hold Us dollars and if the U.S declines in power whatever is the next productive geopolitical area of

the world that will work even as a transactional currency now if you think of store of value people think okay Bitcoin is a great store of value but I've also realized that Equity indexes are the best store of value so if you go and think of an equity index S P 500 it's backed by actual human productive power trade products create business models a mix of them and they they turn out based on what what is good and what is not and that is a much more stable foundation for a long-term store of

value then then a crypto coin um and so I think index-based stores of value which might come from the stock market or it might even come from crypto right an index of crypto coins Each of which have great business models I think there are going to be those things that are better stores of value and so I am no longer a Bitcoin convert on either of these dimensions but that's true that like you know on yes uh an index of all tokens is like actually outperforms markets generally and like or you know in this current historical Trend but gold is still the

highest value market cap asset in the world and like buy like you know almost an order of magnitude uh and so how like so I don't think Bitcoin ever claimed to be like uh of a placement like a productive asset or anything it was always or at least you know for a long for at this point like approaching seven eight plus years at this point right like yeah in the early days I think Bitcoin was trying to find what is its purpose kind of thing but now you know it we've been in this world long enough where it's settled like we are trying to build digital goal that's it what like the question is why has Bitcoin failed to come close to gold

or or you can argue that it hasn't right you can argue that like you know gold is a 12 trillion dollar asset market cap Bitcoin is a half trillion dollar market as a cap the fact that we're within like an order of magnitude is actually come kind of impressive but uh so you know maybe you can argue that we haven't failed yet but like um why have like do you still believe that Bitcoin will be able to replace gold as an asset one day or no I I guess two things so first of all like why hasn't Bitcoin sort of Taken on this role and and you know the dollar and and those kind of things well I mean I do you know the whole biology is argument and all of that I do agree that there is some sort of D dollarization

that's going to happen and I do agree that you know eventually the US dollar is going to you know collapse right I think it's just like it's obviously unsustainable if the debt levels and all of that however when it comes to the time Horizon of this I don't believe it's very close and I I think in the end it's still like it's still stable enough the dollar and it's still something that you it's extremely useful because it's you know because you can you can use it to trade and for most people in other Fiat currencies well like if I can like put my money in the dollar like that's pretty good right so it's like a better

store of value than Bitcoin because it's like more useful and then it's more more stable from a price perspective so I I think like when would be the time when you know you really see Bitcoin Thrive well I mean maybe if the dollar really struggles but that seems far away uh and you know maybe you have some other advantages of course right like where maybe if it's like sanctions and you're outside of banking system you have control of your assets so I think there are some of those advantages but of course a lot of people may not care that much about it right because they can get a U.S like I know if you're in Argentina and you can get a dollar account uh somewhere else you can access it well

then maybe that's good enough for you uh you know whether whether Bitcoin is going to replace gold in the longer run I I think it's possible but I still think that you know Bitcoin has unique risks that I mean of course maybe gold has risks with maybe like asteroid mining or something but Bitcoin also has risks right because Bitcoin has this whole thing about you know the you know the bitcoin's mind this you know the inflation block rewards going down after having and you know you don't really have transaction fees replacing that or like you know hold the long-term

Economic Security to me if Bitcoin feels a bit like you know I don't know I'm not totally comfortable with it so and of course for a lot of people also just crypto still has two negative of um image right it's like they see Bitcoin and they think well crypto it's volatile it's you know criminals money laundering buying rocks online a bunch of scammers Gary gensel doesn't like it you know like is that so does that feel like a good alternative to gold I think a lot of people will probably not see it that way because of that

so I think there's still a lot of optic obstacles that I see I so I'm with Mayhem on the S P 500 thesis I also think I mean it's basically also if you look at the market cap of the S P 500 it's um several times that of gold I think maybe like five times or so that of gold Maybe a little bit less but to to me the question um is is uh in the D dollarization uh basically not when it's gold or when it's Bitcoin gonna replace the dollar uh but when are stable coins gonna uh you know baskets or stable coins or um you know somewhat stable assets devised that way through through clever basketization

um when is that gonna gonna come because that seems like closer do you guys agree I gave a talk yesterday at the Gateway conference about a Terra one year of retrospective since the crash and in that I basically you know I there was a period there where I was like highly convinced that like Tara had the potential to become like a global like currency eventually it would like de-peg from the dollar like you know follow some more floating uh exchange rate kind of thing uh But like after that whole system collapsed and you know I have all these all this what

am I talking about all the reasons that happened but like I don't know I feel a little bit sad that no one's actually worked there's very little work being done on um these like under like like algo stables and stuff since then like it feels like it's almost like yeah everyone's scared to even like talk about it and like I I think that's not great I think we do need to if if we do want to build like decentralized money decentralized stable coins we do need to figure out like open up the conversation again about like you know how do we build under collateralized algo stable systems yeah I fully agree I think the issue with uh with the stable coins today is

just that they're basically all backed by you know dollars in U.S bank accounts and I think that's just so easy to control so I don't think there's any way that the current type I mean the current type of stable coins like hopefully they can keep existing because they're super useful they're great right uh and you know they can be a great sort of uh transaction media but then they're really more of a like payment different payment rails than anything else right and I think they can never be you know the U.S financial system will never allow them to get to a threatening State and I think they can easily prevent that because they can

just freeze the Assets in these Banks and go after these Banks and so I I think they're not the current stable coins are not really they don't know they're viable they're not building a viable alternative and I think for a viable alternative you do need to have uh really decentralized system I mean I like sunny I was you know I was very bullish on Terror of course also very wrong about it right um but I I think the idea was it's just enormous and then I think that idea needs to be pursued in some way maybe it has I don't know if it if it's if like fully collateralized maybe maybe that can work

or maybe it needs to be under collateralized but maybe the not with the same mistakes that Tara made I'm not totally sure but I do think those experiments need to happen and and we need like different types of stable coins so what have we learned from the Tara collapse like oh maybe maybe just giving an Essence uh essence of your talk I think that so you know when there was a really good posts like a blog post like from like 2018 or something where you talked about like the goal with the stable coin is to like build a real economy around it and like he talked about like oh if you like build a payment system that like drives

continuous demand for it you have to like get people to like to start the nominating debts like business debts in the in this stable coin that's how you get like you know Fiat remains stable because you have this like Perpetual demand for the system well for for the for the token the currency um and that took like I think Tara had started to build like that's what the whole chai stuff was about um you know obviously now in retrospect it's unclear how much of that was fraudulent like real or not like I guess just all these like court cases going on about that um but then like you know they had started building a real D5 economy around it that was getting demand but then like eventually with they just got

greedy I think at some point like instead of like taking it like having this like actual you know sustainable growth that they were seeing they like the anchor scam came along and basically told everyone to hold like UST in this pool for 20 yield and like it was not real yield it was just being subsidized by like uh tfl and anchor emissions and like uh being propped up basically and then what happened was as soon as things got a little shaky everyone went running for the door no one was there for like actual demand they were just like everyone just exited from anchor there's all these issues like first of all like anchor should have probably had some rate limits or something but everyone

just running for the door and anchor also had this like along with like having everyone hold UST for like this fake yield it actually had this like uh bad effect where it caused it made it harder for people to build real economies around it so you know there was an episode episode with Mars a couple weeks ago and like the you know Mars was originally on Terra and they were had their own lending protocol but they struggled to get deposits because they had to compete with the 20 yield from anger and so it's like Not only was it like creating this fake economy it was actually parasiting the like real defy economy that was being built around UST um and so I don't know like what did we

learn that like stable coins propped up by Ponzi algo Farms don't work like like don't work but it's like no [ __ ] like obviously uh so that that's the part that I find the most disappointing right like we did we didn't learn anything new and it just like soured the ecosystem for everyone that it's like now the sentiment is so against algo Staples even though the original experiment of building a demand-driven crypto economy like was never tested properly right it kind of ties back to the whole infrastructure phase and real business running on the networks I think in the end Sarah was too early because there was nothing like that and I guess this Ultra Ponzi nomics that like made it scale way too quick and then in its

collapse I think right now I guess you you first need these real businesses to be on chain right and I guess then you can have a decentralized stable coin I don't think it's necessarily like a design flaw or like you can somehow fix this with design you really need like economy to migrate on chain uh like purely the better stablecoin design won't fix it right so I think it's just a it will take some time and I do actually think that overcollateralize stable coins like even like maker right is quite nice design it's not as scalable but maybe it doesn't need to be uh and when the demand is there maybe when there are reward assets on chain and more than it

it will be scalable enough at that point it could sort of be a theory I I'm not like super convinced if there is like some algo stable that like purely by Design can fix this these issues personally you need circles circuits seems like the answer here because I mean so basically these Mutual Credit lines that basically circles in effect is it lets you create money locally in groups um and kind of move it along relationships that exist and I think that's super valuable so I think I think ego Staples with essential issuance those would I mean if if we see them my

thesis would be that we will see them later and first we will see like localized versions yeah I I that kind of resonates with me I I feel like you know one of the things that we if you remember for like the the first time we interviewed um it wasn't dough but it was his his previous co-founder on on epicenter Dania Daniel right we we walked out we walked away from that episode thinking that that Tara was was not sustainable because it relied on this hypothesis of uh Perpetual growth and Perpetual demand in order to feel its growth and and stability

and um I wonder if at least currently you're in the sort of current ecosystem if it is even possible to create like enough uh demand to sustain a stable coin but like but I mean what what would that demand come from you know is it defy and D5 if you think it's D5 then I think that's sort of inherently flawed because I could mean D5 sort of built on all these kind of pillars that are also a little bit you know Brian was talking about or someone was talking about certainly about how sort of you know there is no usage behind uh behind behind much of the activity I feel like what circles hits at is it hits that real world economy sort of

like tangible you know you can sort of touch it hold in your hands eat it uh drink it uh uh you use it to sustain you sort of uh economies that that are that are necessary for uh a currency to exist and maybe the algorithmic stable coins of the future will lead baskets of those types of ecosystems right like Circle and something else similar to it yeah I do feel like that's um I mean if you want to be cynical about it um the sabercoin that so far has found product Market fit is tether and the use case is tax evasion um I think I mean it's a little bit maybe it's a little bit too stuck no but I mean it's not the use case of I mean

yeah there's a lot of tether usage like globally like but have you tried to cash out tether no but yeah but it's really really difficult it's difficult to to to catch up I don't know what that has to do with tax I mean I mean tethers you so much for all kinds of stuff like it doesn't sound right to me were you saying what's interesting if you look at the tether stats on the Tron blockchain right like they have like what like 50 billion dollars of tether on there like yes 80 of it is in Exchange accounts but actually like 20 is like in like tail end wallets and that are like making like daily transactions uh like there is actually an entire like real like you go

to Thailand there's like Street Merchants accepting tether you go to Colombia there's like ATM like tether ATMs where people can like convert tether to like cash and it's like as much as we like to meme on Justin's son he's actually been like building a real like payment rail system like globally with on Tron and tether like obviously it'd be nice if it wasn't in a centralized statement was actually like a more decentralized thing but like the actual like hey you know what what most people care about right now in the world is like you know like like I've always saying Brian maybe but like you know not getting their hands on gold but it's like getting their hands on like dollars like most people in the world in third world countries just want access to

Dollars and like tether and Tron have actually been doing that pretty successfully why do you think it's tether and not say usdc because so I've talked a lot to the tether team about this and they actually like about the tail end stuff right and their claim is it's actually they weren't very involved with it it's actually been mostly like the Tron like team that was like leading this like effort and so uh I don't know just good execution skills I think kather just happened to be on Tron like accidentally like there was like this uh like why did it end up being tether and not usdc uh was just a uh Tyler came first it had more

liquidity and then a lot of people are used like you know the Tron team like to spend a lot of time like making sure like like getting all exchanges to do tether transfers via Tron and then from there they expanded into like more retail payments like if usdc existed at the time like that's the whole thing I think that that's what like bidance was trying to do with busd the problem with usdc is there's like not a global distribution rail for it what binance was trying to do with busd was basically tether yes like you know it is sketchier than like your you like your actually regulated stable coins financials trying to take a regulated stable coin buy paxos and then use the

binance system to like as a global distribution rail for like how do we get this like better more secure stable coin than tether in the hands of people globally and of course obviously that got like shut down basically effectively by the government but like that is I think what they were trying to do so we had here in the rundown that we would talk about you know which project uh had we think had the most significant pivot and I feel like this sort of covers that uh I guess I guess tether for for a lot of us uh or sorry uh Tara for a lot of us was was that project what about things that you were super excited about that have faded out or

ceased to exist um I know Philadelphia you had some ideas here what projects that you were interested in over the years that have faded out or maybe you were surprised faded out any thoughts there yeah I mean basically it's just sometimes you speak to a team and you just immediately see the value of that project and you think oh yeah I would totally use that and I will use that and then you kind of it just Fades out and you never hear from Madigan or you it basically I I think the the example that I made was Dharma um at the time it just seemed so novel and then basically they pivoted to

um a mighty sick wallet and I and I before he recorded this episode I said I wonder what happened to them I haven't actually thought about them for a long time um and uh someone said they were acquired by openc um yeah it's it's just sometimes um sometimes it just plays out differently than you thought and I was wondering um whether you had any of those moments recently I I had one which is an app I was using a lot during covet and actually they were they were sponsoring this show for a while it was Peppo was this kind of crypto tick tocks like thing that was on the OST chain or by the OST team and um they yeah they were around for like I

think two or three years something like that they were trying to build uh they were trying to build out this kind of crypto version of tick tock and uh there were a lot of like cool content creators there like just so very like Niche people met a few folks there as well but yeah then they decided to just like shut it down and pivot it and you know Jason uh Goldberg was running that project is now doing some kind of like online gym or something like that but um yeah that was one one recent one recent example yeah I don't I I'm not gonna say anchor no um like I guess for me it's probably like the some of the scaling Solutions or some of

the initial ideas like plasma or even true bit I was like just looking back at the episodes sort of when I started to listen to epicenter around like 150 or something and sort of fascinated about these initial ideas of scaling and sort of how it developed into what we have today like roll ups and and this kind of designs obviously like some of the early designs sort of just faded or or teams even dissolved or got to work somewhere else I I guess I would probably mention those where I was like pretty bullish on but that specific project for example didn't make it like like a true bit they kind of ended up inspiring the like all the optimistic Roll-Ups that are

being built today but yeah right idea wrong time I guess for me what's really interesting is how hard it is to disrupt the the tcpip HTTP stack and one can see that in kind of like the struggles ipfs has or I mean I think the struggles our bit will have all of these um projects that are trying to reinvent the networking and like data transport around the web they haven't done as well as I thought they would I mean you see ipfsb used in summed apps but then

they're going to be like you'll come across a Cutting Edge ecosystem and it will have nearly zero ipfs penetration with all the wallets being traditional centralized wallets it kind of reinforces how how sticky the the current web stack really is for me I think the one that you know has people might remember I was like huge on interledger and I was like really excited about like the you know hey let's build a generalized payments protocol that will span across all the chains like and you know I don't know a lot of reasons I think the project

didn't really succeed like I think one it was trying to do too much at the same time it was trying to be like a payment Channel network as well as like an exchange system as well as like a crop like a bridging kind of protocol and those are kind of do all this stuff into in one thing at the same time and so I don't know I think like learning from that is like important like okay maybe don't try to do too much in in one stat protocol and obviously I do think that the Ripple Association is part of what killed it where like you know I it came from out of the Ripple team and like because of that it just didn't get the political will from other ecosystems to like really put effort behind it you know I talked to a team recently and

they were like we're building on on uh on interludger I was like what that thing is still around and yeah I guess there's some like some usage in Latin America or something like that yeah I mean one one project that came to my mind maybe it was like radical so radical was like trying to do this uh decentralized GitHub alternative which also seemed like you know such a big need uh you know I think for at one point there was a lot of discussion about this right because you'd have projects that would be you know kind of decentralized like Bitcoin for example this was a big topic right where you have like of course Very decentralized network but then the code

is all run or hosted on a centralized platform GitHub where you have you know a bunch of like maintainers that you know babies these roles controlled by the GitHub company that end up having a lot of power so like you know it's and then of course other things right where like GitHub will like exclude people from certain jurisdictions you know like if you're Ronnie and you can't use GitHub and stuff like that so it did feel like you know that that would be cool idea to do a sort of you know decentralized alternative to it but then and I think you know the team was pretty strong like that you know but then somehow I think it didn't manage to do it uh I mean it's still around to some extent but I don't know you don't hear

much about it and are you both on guitar I I don't know okitofia no idea yeah I'm just going to bring that up goodtopia is a project that's like doing the same like similar thing like GitHub like a decentralized version of GitHub and actually in my opinion doing it correctly like I I was on the episode you know I did the episode with radical and I I was I was actually always like very skeptical about the approach that they were taking where arguably it was a bit too radical where like their take on like software development was that like Master branches are a source of centralization and like we have to get rid of Master branches we have to go to a world where like back to when everyone had their own personal branches and we're all like merging patches amongst

each other it's like no like that's not actually how like real software development it's done and like I think like yeah I think radical is trying to like shove this like weird esoteric like software development philosophy baked into the model of their system and I think that was the problem I think so what Utopia is doing is actually doing it correctly which is like taking the infrastructure that that GitHub has done in a very centralized way and actually just moving that onto a blockchain so I I'm personally really excited about Utopia like it's I think it's radical done right yeah and the other thing that's cool about Utopia is it incorporates or at least they they want to incorporate all this this kind of like Dow tooling within the system so that you know you

can essentially sort of have your git repo be managed by a Dao and what I'm really looking forward to here is like when all of this tooling is built in a kind of one click uh system where like if you're launching a blockchain project you can just go to Utopia or like some interface built on top of it say I'm looking for like this kind of structure like I want to be like been a dictator or I want my my project to be run by a Dao or like some other model or some kind of custom multi-sig or whatever and like within one transaction you can start the Dao you can distribute the tokens you have the git repos you have like all the permission to access and it's just like it just becomes a default for any crypto project that's starting they're not going to go to GitHub

they're going to go to like digitopia and sort of get started there I think that would be really powerful super nice before we move on to another topic could I take another thing that faded out so one of the weird things that for me like fitted out but then is reborn like a phoenix in the ashes is the idea of the private corporate blockchain or the blockchain or the private Enterprise blockchain which has this from my perspective weird story of um the bear Market of 2017 hits and suddenly it's all the Vogue there are

companies digital asset r3cb it is a hyperledger has a bunch of projects all of them trying to build blockchains for the Enterprise and as far as I can see none of those applications have have really stuck and that initial idea that you can build blockchains without a crypto coin uh and then those blockchains would be used by insurance companies and big Banks kind of faded out and became much smaller than the noise at that point in time what's it really weird is that idea I think is being reborn in the N2 space so

when you look at like coinbase base well isn't that really an Enterprise blockchain it's like built by built by coinbase their vision is to onboard 80 million users of coinbase onto that blockchain it's going to have a centralized sequencer it's an l22 ethereum so it's using this crypto economic mechanisms but it feels awfully like an Enterprise blockchain and I think there's going to be more of them like that so I think that idea may again reappear with the big qualifier that those Enterprise blockchains will be built by crypto native Enterprises

so that's kind of like a weird story that has existed in our space yeah I think that makes sense there's also like another version of this that I've seen uh like one or two examples of and that is uh products projects building with the cosmos SDK with the hopes that uh Industrials will become validators so one example is a project that I know of course one you guys I think invested in this store chain and so they're building a decentralized network for basically vehicle data it's like a vehicle data market and so there's like this whole industry like so kind of like vertical

that's emerging around Vehicles sharing data with each other and with infrastructure Etc and there's there's no kind of you know decentralized infrastructure to incentivize uh that data to be shared with uh with the with so like the greater Network and they're working with auto manufacturers and parts manufacturers and one of their Ambitions I think is to have you know the Fords and Toyotas of the world be validators on this network and you know when we at stratum were working on permissionless or permission consortiums back in back in those days days back in 2016 2017 and onwards you know that was the idea the idea was we're going to create these use cases that corporations

will want to uh hop on board and and become validators in these networks but I think that the technology wasn't quite there yet maybe the understanding that crypto economics are an important aspect of um so maintaining incentives in the system so I'm happy to see that those types of use cases are kind of coming back and the nice thing about the cosmos SDK is that it can start this kind of permissioned and become permissionless over time and IBC enables some of that as well so it's it's a it's it's a sort of you know Network architecture that I'm quite quite bullish on and I wish like you know the interchange Foundation would spend a little bit more time doing business development around um this kind of thing

maybe let's change gears and talk about the converse so every now and then there are niches in this ecosystem that grow way faster it become way more useful than we would have thought like even a couple of months before they kind of exploded onto the scene right so basically one thing I'm thinking about for instance is um ckp technology right so basically if you look at how much it's kind of shaped what we think the ecosystem can do over the next couple of years it's enormous right another thing is AI so let's talk about these the the thing with AI here here's what's what's kind of funny about about like the whole Ai and blockchain uh topic is

that once again like this this is a topic that has kind of done a 360 because or maybe a 180. because a couple of years ago like you know in the last cycle you know people would talk about Ai and blockchain and like it was just kind of this like kind of weird cringe topic that we all thought you know wasn't going to amount to much and it was just sort of like buzzwords that people would put on a pitch deck the rates funds and you know a lot like teams did raise funds but but now it actually starts to make sense you know like of the last three episodes we did on the interop you know the topic of AI and blockchain was kind of central to that to the episodes and you know Sonny we did an episode with um with amine of uh of avalanche and

they're putting a large language model in in a blockchain so that you don't have to run code anymore you can just tell it what to do and it will send those instructions to to validators um a Cosh network is uh working on a decentralized Marketplace in which you know amongst other types of of uh execution uh resources would also be his gpus uh that you know people could use to train models so that the topic of it and I'm watching is coming back in a really big way and I think like in a really relevant way so yeah curious I know Mary you use this topic you've sort of spending a lot of time researching curious what your thoughts are on that too so I've I've kind of followed this topic

for six or seven years in fact the if you look at the classic articles for AI and blockchain they are written by Trent McConaughey where he has a series called wild woolly AI daus I think 2016 and 2017 and I'm actually cited in in the blog so shout out to Tran shout out to Trent I've kind of gone to uh I kind of followed a lot of these these projects and I think like the I think that the one major idea here is okay can you use can you train AI models on on Hardware that is kind of incentivized in by some crypto Network so that's

that's one idea that is that is very prominent I actually don't know how successful it is going to be um inside I'm not highly convinced about it so in general Ai and blockchain is very hard to mix and it is so even now um I don't think gpts have changed a lot but what I do suspect crypto could deliver the AI space in a very powerful fashion is when you have aai agents that end up becoming very powerful the only way to

contain them starts to be zero knowledge technology or blockchains so um so imagine right um imagine you have like an AI agent that is as intelligent as a human right and you want to jail that AI agent in some way by jail meaning you want to restrict it from doing certain things the problem is that if if you as a developer are developing such an agent and there are there are some examples like that then because you're fundamentally building software that is as intelligent as you it can always Escape into the broader internet

and it can it can replicate and you can have very little control over it so how do you have how do you exercise control over an agent over a piece of software that is as intelligent as you are this is what is called the alignment problem uh in the AI space and I think the point at which Ai and blockchain are going to merge on a very in a powerful way is the way you actually control a highly intelligent AI system is that the entire execution of that AI agent continually output some kind of zero knowledge proofs and for example if you

want to have a kill switch on any agent so I assume that there's an AI agent that is extremely intelligent the minimum thing I want is to install a kin switch into that EA agent that when I say die I can make it die with 100 guarantee and the AI agent cannot break the kin switch itself because if the agent can break the kill switch then it can leak out into the world and replicate across the internet so how do you implement a guaranteed kill switch that's a type of alignment problem and I think the answer to it is you have to write an AI agent inside like an orbit or inside like a ZK evm

like computational platform where where you can write the key switch as some kind of logic with which has a zero knowledge proof and as the computer executes there are guarantees that the kill switch isn't disabled so when you think of this problem of extremely intelligent systems verifiable software is going to become really important and what we are fundamentally developing we are the mechanism of zero knowledge proofs is actually verifiable software fundamentally and I think that that's why I think there is an intersection in the future I mean this makes sense to me but like

how do you deal like when you have open source models and like that you know how do you force things to to have kill switches built in right like I that's that I think that's the concern issue I have with this like idea so you can have an open source model right uh the model is just code or it's it's the weights of a network and it is open source the thing that is dangerous is not the model itself but actually a running version of the model right it's if somebody something has to be executing making calls to the model and it has to be executing it as a as a

process that it's that process that is that can be dangerous and how do you have any kinds of limitations posed on a running computer process that is as intelligent As You Are you want a verifiable kin switch or verifiable power limitation switch and I think like that is fundamentally what crypto provides so to me I mean so the care switch idea to me makes sense but how do you know when to press it right so basically to me the danger would be that kind of the AI just outsmarts you and it looks harmless but uh in in the back end and

actually makes something malicious because it knows in principle you can shut it down so I mean it's a cat and mouse game no exactly you are saying you want an auditable log out of the AI agent whatever the a agent does it has to guarantee it appear into a log that you can see and analyze with a different system that's another verifiable computation problem guaranteed printing of a log that's a crypto problem that's a zkb organizing this is this is this is what I suspect is going to be r value proposition to that field do you think so basically I recently spent a lot of time also reading about AI stuff do you think this is going to

be the end of all of us at some point because basically so there's so many ways it could in principle go wrong um and basically dealing with something that is just you know inherently more power of it than you are yourself it may just be it's probably impossible to contain at least um reliably and I mean there they only have to be one hiccup right um and it's uh it it that may well spell the end of all of us so do you see that danger and if so what do we do against it I recently heard a couple of people say that they

think our only way to kind of survive this is kind of just upgrading ourselves too with kind of neuralink um type technology I don't buy that um but basically the question is as someone who's actually thought about this a lot do you think we're in any sort of real Danger so this is this is essentially known in various places as the control problem and like the alignment problem the control problem being is like how do you place restrictions on something that is smarter than you can replicate across the internet right like so if so if you you're running it

on some computer system [Music] and that running agent is kind of smarter than you are it can always kind of jailbreak and go to the internet and start running on some other Hardware so how do you place uh restrictions on it is is one highly important problem and then the other problem is kind of when you're not placing restrictions on it uh for for some reasons right like you need to do it a certain task and it is making autonomous decisions then how do you make sure that those autonomous decisions are kind of in alignment with what your

original desires work and kind of these are these are unsolved problems right and there are many people in the world that believe Humanity won't be able to solve these problems on a on the time scale at which we will build systems more smarter than us so if under any problem being that we will build things as intelligent as us before we know how to control or align them and that timing mismatch is what Dooms us or domes human civilization fundamentally to end and the end being defined in in various various ways some people who

literally Define it as every human dying others defining it as some combination of AI is becoming the dictators of of humanity Etc so it's an unsolved problem if you just look at how in the last you know six months large language models have become um so prevalent like you know all everybody do you just chat GPT for some for something right and and lots of startups are now being used are now using uh chat GPT or sort of large language models and GPT models to uh to create new products none of these

products are being designed with these sorts of containment models um in mind right so they're they're being built as SAS products and people using them and you know they're they're in your call recorder software or they're in like you know tomorrow they'll be like reading your email and you know giving you some advice about how you should be responding to your email or perhaps even responding to your email for you like these things are coming and they're coming fast none of these products have this containment in mind and so why would at some point like you know in a year from now or three or five years from now and these systems have uh infiltrated our lives right and we're using them and we're talking to Siri and like Siri is now basically like GPT right and why at

that point containment models um uh start it would be it would be so difficult and I think like practically impossible that at that point to um to incorporate containment models so I think you know the the odds of this going wrong are fairly High although I love GPT you know it's great I actually I'm I'm an optimist and I believe and I and I believe we will solve it we will solve the control problem and I actually think crypto is already solving the Conti the control Problem by developing verifiable verifiable compute so if you look at like an orbit planet what's really fascinating about at orbit

planet is everything that at an orbit Planet computes it can create a proof that it computed as per the code that you had put in and so even invisibly PR developing verifiable compute and and we will be able to uh put some control into these these systems and on the other side I actually think making highly capable AI open source and distributing this power across many parties is also essential because then Humanity get in a sense divide and conquer where you don't want one once highly

super intelligent or two highly super intelligent systems in the world that are only managed by 300 programmers each which is the size of open AI because if if only 600 people are going to be managing super intelligences it's way riskier than 60 000 people managing it or 600 000 people managing it and do and fundamentally I think we have to open source in make sure that the world's GPU capacity is being used for artificial intelligence by lots of parties and we have to be we have to ensure that like it designs for all of these systems are very different want them to be heterogeneous and then we want to use

crypto to be able to put in containment measures for this technology you have verifiable compute and I think that is why the values of Open Source uh white distribution and verifiable compute will play an essential role in in in this technological area that's my belief anyway in the shorter term do you think that um so in the shorter term do you think that uh decentralized identity systems protect us from some of the some of the people some of the things that people are afraid of so like the disinformation uh risk that comes with all the

generative AI uh that is like coming to production to product now you know like things like Stables Fusion Etc and all the video creation uh algorithms that are that exist now do you think that identity systems can help uh with you know proving that uh content was created like by a person or created by an AI right yeah so I mean like this is actually uh this is actually a rhyming version of the bigger problem so the bigger problem is once the software is as intelligent as you are or more than you are how do you contain it inside sound computational box essentially right and and how do you

know that what the outputs you're getting from the computational box are what the system is thinking that's the that's the high level problem 10 years from now for Humanity but the the short scale problem interestingly is also a problem of verification and cryptography again where when the cost of producing any piece of content goes down to a dollar so for a dollar you could produce any 10 minute movie about anything in the world it could be a clip of Harry Potter it could be a clip of Donald Trump talking something for a dollar if you could produce that how do you make sure that what you are seeing has been produced by a human on the other side

that's you see another cryptography problem we have to give private keys to every human in the world that's a problem we are working on so in a sense it it Rhymes doesn't iterate like so we know how to solve this problem via public private key cryptography we are naturally as a space building that technology even if he had in the existing would build it but because AI exists there is enormous incentive to adopt cryptography and I think because AI will get stronger they'll be enormous incentive to adopt very Fire full computation and I think yeah those problems are rhyming and we will manage to solve

these problems fundamentally no one tji how to use public private key cryptography then okay yeah these are be sure not to teach them how to use it no no one should give uh numbers to give their AI a ledger or connected to an HSN um so barring some AI apocalypse uh where you know we all disappear uh what are you most looking forward to in the next 10 500 episodes and I guess I guess a bigger question is like how do we keep this going so that we could be here in the next 500 episodes I'm the other uh internal Optimist I in

the next say 100 episodes I really want to see the stuff we're building kind of hit normal people in a big way so I don't want to see them I don't want to say the mainstream because it doesn't have to be mainstream but I kind of I wanted to I want to have products that I build on blockchain technology that had just legitimately fun to use and better to use than the Alternatives and I think this is kind of this is what I this is what I want same here yeah and I I I do I I'm increasingly I'm thinking that more and more I think that like this will come from some combination of

gaming slash like social fi applications I I do it's a space that I'm not like I don't have a whole lot of like visibility into but I do hear a lot of people building infrastructure telling me that they're um that the market that they're addressing is this gaming and and social fi use case right and uh and that has the potential to bring in like a lot of young people I think and young people you know tend to use technology sort of adopt technology faster than old people and so and I also like to play games and are very social so I think that that's it uh a decent hypothesis you're talking like we are not some of

them only sunny yeah I would say aside from maybe like AI generated host that can take stuff on some episodes that'll be helpful actually on some weeks in some weeks I think that would be good if we had it in AI host yeah we can spice it up and then don't tell people and you have to find out which one was the AI episode yeah yeah so what are we doing for episode 1000 what kind of topics will we cover by then guesses courageous guesses we'll still be questioning mainstream adoption yeah yeah yeah

when is it finally going to happen that people use this stuff yeah sure or are we gonna talk with metallic about ethereum scaling roadmap do you guys think Bitcoin will still feature yes yes what about gold yes yeah the dollar yes yeah I go Stables yes yeah I think I think that I think the dollar has a has the highest chance of not being around anymore except yeah out of those three out of those three no I will put Bitcoin above that are you for Bitcoin yeah okay yeah I mean your goal will still be around for sure most chance to stay

around is gold then uh dollar then Bitcoin okay yeah I agree so my my of peak uh idea would be I think in 10 years uh this thing that will become really massive and hopefully bigger than Bitcoin are fundamentally all of the amazing exchange technologies that are being invented in this space so when I look at when I look at like what crypto has genuinely done new I think on the exchange space we have this automated market makers one of which

Sunny is building maybe this second or third most popular of which some is building we have the badge auction Exchange which is this freakingly amazing exchange technology that replaces market makers with solvers open source solvers and could result in better prices man that could be amazing Street liquor is involved with that and then we have the invention of the Perpetual where without having a sport asset I can go long or short with leverage without having exported to this spot and like if you look at like these three Technologies none of them exist in the stock markets Bond markets of the world

and I think the world will realize what a me and and maybe there will be more of these amazing inventions and I think the world will come to realize that if you want to do cheap transactional cost Exchange you have to go to a crypto Network very cool I think that's a good note to end on uh guys this has been really fun and uh I mean I when I when I say it's been really fun I mean like the last the last 500 episodes have been really fun and also this one has been really fun and I really look forward to doing more of these with all of you me too thanks so much thanks

everyone see you in 500 episodes