Buy the Dip

Transcript

are we recording now okay cool well my name's Rick I used to live in New York I don't anymore so it's like 6:00 a.m. local time I moved to California so I'm very tired it's the chair I'm gonna give a talk it's if you couldn't guess already it's pretty extemporaneous the title is by the dip because I needed a title so I I for those of you who may not obey a show of hands I like to I like to like interact with the audience how many of you have are familiar with the by the dip mean alright so for those of you who aren't familiar with the by the dip meme

it's actually like a premium meme it is a sort of idiomatic statement from finance when a security or asset that you're buying experience is a price dip as they like to call it well that's when you buy it you just buy the dip and then someone made this like animal animation that's really good about buying the dip and I'm gonna summarize it but basically it's a guy swearing a lot and telling someone to buy the dip it's this computer voice it's great you should just go look it up on the internet and and basically it's like well when your friends buy the dip to and you've bought

the dip first that's how buying the dip works like you're fine as long as you tell your friends to also buy the dip after you've bought the dip then you're fine and there's no issue and this is like a a central tenant of like of like retail investing when I first started getting into the blockchain space and I was meeting real traders who worked at banks for the first time I had done some trading myself but I didn't work at a bank I'd asked them what book like how what do you guys learn about trading like I've my mom's or research library and I grew up in libraries at universities like looking up stuff I'm

very comfortable looking up stuff and I was like I've booked everywhere I can't find a book on trading anywhere and everyone always said one book there's one book on trading and it's the reminiscences of a stock operator and that guy is from like the 1800s and he's basically talking about buy the dip right I mean he's basically saying the same thing he's like you know you sell when the markets going up you buy when the markets going down if you can figure that out you've won and it's like so it's about a thick like a thick book it's like it's a couple hundred pages of this guy basically saying that over and over and over and over again it's a good read but that's I just told you the whole

book so um so this talk is about a couple of different things a bunch of tweets I've had over time and I I gave an I wrote myself an outline but obviously not following it but basically you start there you start with traders buy the dip good traders understand you sell when the markets going up you buy when the market's going down you just want ride the waves you're just you're just you know counter to what other people are doing and that's how you make money you just you just you know running in front of the Bulls right and then you have Bitcoin right so so so you have all these people who were retail investors

from the 90s Bitcoin happens they're like wow I can like really like ride the waves like for real for real like we're surfing in Hawaii like we can really take it there and and that's deeply embedded in the psyche or the or the zeitgeist of of Bitcoin and then and then these brilliant people I mean that not pejoratively honestly brilliant people make aetherium and they're like wow we can raise millions of dollars with this funny money to make even funnier money and so they do that and so deep embedded in that culture is well we all know about buying the dip we all

know about funny money we all know about trading let's do that then so Bitcoin has this very frankly it's easy to lose sight it's been 10 years or whatever it's easy get confused there's crazy people yelling on Twitter and they sometimes will yell at you in person if you they are finding them in person and so it's easy to lose sight of what bitcoin is really about but bitcoin is a single application chain because it's the first chain we don't think of categorizing it that way but it's it's basically a payments network and and even though they have you know debates to the death whether it's a store of value or an exchange a medium of exchange at the end of the day everyone kind of agrees well yeah I mean there's loonatics everywhere

but basically all the same people agree that in order for Bitcoin to work it has to do some of both of those things it's kind of irrefutable it has to store some value and it has to do some medium of exchange or else neither one of those features actually works right so when you're having a dispute in Bitcoin and you're and remember in the back of your mind you're always trying to buy the dip so when things aren't going well and there's some dispute there's something going on at the end of the day in the Bitcoin community you can say are we making it a better store of value yes or no are we making it a better medium of exchange yes or no and that's gonna like ground the dispute but because aetherium happened after bitcoin and is more than Bitcoin necessarily in some meaningful

way and I'll get back to what that means because is that grounding right so if you look at the etherium narrative it very much starts with this sort of medium of exchange narrative of Bitcoin well we can just augment the medium of exchange capabilities of Bitcoin with this more programmable money then you sort of this world computer narrative then we sort of end up in this sort of weird ICO narrative and these narratives each one of these narratives represents you know this inflection point of like Oh more monies coming in right and if you actually look at the chart you can see like different narratives and

different things that happen like EEA like 10x ian aetherium and so aetherium has this history where when things when when you see the dip not only do you buy but you you change the narrative you you have this the meme shift when when you have this short dip you you you know shouts out to Andrew keys you like shift the narrative you do some EEA thing the price 10x is you bought the dip it's awesome everything's awesome we've got private jets now we've got personal helicopters to get to the private jets everything's awesome right and aetherium has done this in five years has done this multiple times and

and you can really if you've been paying attention and and you didn't get totally you know disoriented you see that these narratives have changed and and they represent some attempt to repair the price it's very conscientious it's very methodical it's it's very or it's it's decentralized but it's also very organized so we see people adopt these memes and an attempt to you know boost the price 10x the price I mean the idea with every mean is like 10x the price at least right and and so we're at a point now with aetherium all these years later

where you know there is no world computer I CEOs have basically stopped you know you know smart money on top of Bitcoin didn't you know that it was abandoned a long time ago so that didn't really happen we do sort of we do we have sort of cycled back into this programmable money thing with defy money Legos or what's this something blade goes somewhere in there I don't know what the other part is but like money Legos right but but the problem is unlike Bitcoin there's no real floor there's no real narrative grounding so when we talk about money Legos people make those and we see these sort of my

backgrounds in systems administration and in its in its and I'm older than I look you know I was doing it in the 90s and and you know we used to call it you know you know getting rep you know wrecking you know people would you know crack into your system and you got you know you got owned right and you know I'm talking to people and it's like it's sort of tribute to me it's like yeah like people were out I was out owning and you weren't even born right so like this is kind of an awkward conversation but like your got owned right I mean if you look at these defy products it's not that they're I mean there's a lot in private I've said

it I'll say here is it's not it's not that big of a deal I mean these are people who are learning what financial engineering is for the first time as 23 year olds by building products on aetherium that's the current mean that doesn't sound very sustainable to me it sounds well you know I mean it wouldn't even call it a recipe for disaster because there's no like recipe it's just disaster you just used you just jumped right in to the lava pit and you're melting and you know it's so hot you don't even know that your legs are gone because you're just burning just it's so that I don't think is gonna be the narrative shift the mimetic shift that

saves aetherium that that takes us back to a thousand dollars or ten thousand dollars or two thousand dollars I don't I don't see relying on an army of well-intentioned naive young adults losing hundreds of thousands of dollars to each other due to typos as a great growth strategy and and like I said the beginning is talks all bad news pretty much so so that's you know in scene that's act one yeah I don't think that that the that that narrative is going to support us and so you sort of say okay

well those of us who are committed to the community those of us who have invested in the community are firm believers in the community well what what other narratives are available to save us and there's this sort of to me as someone who for better or worse is immersed in the technical discussions of aetherium say well there's this eath to narrative I've been very critical of Heath to over the years of my last talk I think I said it's the disrespect is on a napkin which no they've gotten rid of the napkin there's actually a blog you can like read there's Wikipedia and stuff for wiki articles you know you there's a spec there but I still think that the 8th to narrative is

insufficient because the problem with the eath to narrative is that it's sort of in a fantasy world calls itself 8th to while ignoring 8th one almost completely so if F 1 X doesn't succeed if eath 1 X doesn't solve state growth if eath 1 X doesn't provide statement if Ethan 1 X doesn't solve all these really hard problems then if two can't work then there's no path from existing smart contracts and existing East tokens to 1/8 to network or I gave a talk in Berlin at web 3 or I've moderated a panel where I try to like slide this

into my moderation I was like hey guys I operate eath 1 nodes if I can't like switch a config flag to start running eath two nodes I'm not gonna do it I'm gonna just run another chain I'm just I'm just gonna run polka dot or something like like if what makes e 2 e 2 is the fact that it somehow relates to eath 1 in some deep and meaningful way like like as a product right and so if we so the 8th to narrative that we see now I think is very appealing to people who idolize genius and idolized with Alex genius and and have are betting on Vitalik genius and somehow saving them

and I'm not making any claims or one way or the other about Vitalik genius he's obviously very talented and very capable but that's not enough to save the whole community you can't just put the whole community on what Alex back and expect that that's gonna work that's not a good just not a good strategy and so I'm very skeptical that well I'm extremely skeptical that the East to narrative that from three months ago or six months ago is going to save us I think that one of the the magical things that I see happen with italic is that he will completely change something and no one gets upset everyone's just like oh

the Dalek changed his mind and it's okay so I'm sure that between now and when these two actually launches but helical have changed his mind and something reasonable will have happened but um but I think that reasonable thing is eath 1x right my sort of hypothesis is that eath 1x you know solving the statelessness problems and these other problems account abstraction is another one these things that are imperative to be solved they'll be solved I think or use or up to optimistic roll-ups and CK roll-ups as well to a certain extent although I'm more bearish on ZK roll-ups because of the computational cost but roll ups as well I think if you take eath 1x and you take roll ups that's actually a path to eath 2 and and I think that the

narrative shift will be that we actually do it that way we actually implement roll ups and we implement this stuff and then one day someone says surprise remember when roll ups were part of eath 2 and everyone says yes we remember when roll ups were part of eath 2 and and then we have e 2 and and everyone's happy but it's worth noting that that narrative is going to be fundamentally different than the narrative we have today and in order for that narrative I think to be successful we have to sort of acknowledge that you have to make a decision is you know what is aetherium is aetherium a product for developers to build applications is aetherium a

marketplace for validators so that validators can find customers and then engage with those customers who are the DAP developers is aetherium magic internet money is aetherium money Legos is aetherium you know the world computer we have to pick one and and I think that for me looking at the community it's that not picking of one that has really put us in a sort of an awkward situation that we're in today so that was it I guess I have some other points that aren't super relevant you know I -

sounds more and more like cosmos every day that's that's one of my points which you know pros and cons I think polka dot obviously took a lot from cosmos and then didn't add much frankly but yeah I think that that's pretty much everything I'm happy to spend the rest of the time having a conversation with the audience yeah and here's the Gotham I get it hi it's good to hear sometimes some bad news I mean we are always positive in this community I mean at least for speaking for myself so it's good to hear kind of an opposite view I'm one of

those 23 years old guys and thank you for talking about us that you know like earlier at lunch I was talking to some other volunteers like me and I was like yeah I would love to stay in this industry for the next ten years you know and I have this kind of long-term vision and since I was born the second half of the 90s and you were already in New York City working like do you think it's a good idea to have a long term vision in this industry like just a personal advice like do you think it's it's it's a good point or it's risky like what do you think it's a really interesting question not at all what I was expecting when I titled this talk by the dip but I'm happy to answer it so I I started

working in 9899 the job that I had the time I was a Systems Administrator this is totally relevant to your question I was working as a systems administrator or a system administrator that s got you twenty thousand dollars extra looking at job post so it's very important and that job basically doesn't exist anymore AWS general automation virtualization I'm kind of though at 38 I'm basically one of the youngest people you'll see who what identify as a systems administrator so my parents are like ancient professions my dad's a lawyer

that's been around forever my mom's a librarian that's probably been around for at least as long if not longer they always had a way of getting a job from acquiring those skills I think that the skills that I acquired in systems administration will always be useful I'll always be able to I can do DevOps work it's a little uncomfortable at times because of the sort of narrative shift but but on the technical side of the work I can always do it and so I think that as long as you're acquiring a real skill like a concrete skill you'll always be able to get a job and there's also the question if you're in the blockchain space about wealth

accumulation like if you're actually and and another thing I've tweeted recently is people don't know what real property is and you're in Europe so civil laws a little different than common law but like real property is like land and the stuff that you build on land and you know a security or like intellectual property is like quite literally not real property and so when you talk about wealth we're talking about real property and like how far away is crypto from real property like it's not even respect it's not it doesn't even have protection under the law right like there's no law stopping just in son from tricking by Nance into crashing your your your

network right there so when you're working like presumably you're working a to sustain yourself but also hopefully some aspiration towards towards wealth creation and so as long as you're thinking about how does this job further my skills or get me actual wealth like real like real property you'll be fine and so I can the snarky response is you know if you're if you're marketing you better be good at it if your sales you better be good at it because you know eventually this markets gonna collapse and all the snake-oil is not gonna exist and if you're a coder like

actually learn I mean it just it breaks my heart like like learn real programming like actually learn real stuff like and that's not about the blockchain space that's about JavaScript there's this thing called like I think it's jams and and I don't even remember what it stands for anymore it was some crazy thing where it was basically like somebody had to market eyes and product eyes building a static website they had to like they had to like make like a meme about like this is how static websites work like you don't need a database to run a static website because people don't learn computer science they don't learn like the actual first principles and fundamentals and so they sort of screw themselves because they

don't really have skills so that was a long way of saying like acquire skills and you'll be fine we have any other questions or comments maybe more about crypto but can we just go in order for like front to back what's your view on the day trading in yeah what do you think of that broadly speaking having lived in New York for I lived there for 11 years a lot of people you met I met there were traders day trading is fine apropos of my thing about work right it's uh it's not I tried it a little bit not really it was very unappealing to me

I'm the kind of person I rank Lee I what I do now is I talk to people about mechanism design which is a very abstract and bizarre business if I could make the same kind of living as a carpenter I would absolutely and which to a certain extent I could have the stone stonemasons in the United States drive Ferraris I mean they're very well-off if you if you can naturally build a stone castle for someone in the United States the people who want that can usually afford to pay you so yeah I mean day trading is fine it's it's a fine profession but it's also very risky and and not really what you should build a whole community on a nascent community and then there is a person in the back and where did Kris

go the tryst leave was Chris somewhere I'm kind of surprised to hear you say that the theory was looking more like cosmos every day why do you say that a theorem - because at some point I spent a lot of time recently at I've been involved in tournament for a long time I I was just talking out in the hall one of my PRS was actually pulled was actually I added a feature to tinder MIT many years ago that was recently removed or I paid someone to write the code anyway why how is the theory I'm to looking like cosmos because there's it's

an important point but I think it sort of represents the minutiae that there's a difference between side-chain security and sharded security so the security guarantees that you get from your shard are very different than the security guarantees that you get from a side chain but like we can add at some intellectual level we can have that conversation we can talk about those features but like those crypto kitties give a like know like they don't care that it's a side chain or a shard they don't care about that security guarantee if we're gonna have people selling their house on their own REIT on the blockchain that person isn't gonna care whether it's a shard or a side chain and so once you break through the

sort of language barrier of the different projects you know IBC is inter blockchain communication is this sort of all-encompassing umbrella that cosmos has but it's such a deep like which i think is a pro and a con but you know you when you map the terms over a cosmos zone and an O R you are almost identical and so once you remove there was this idea and ease to that I immediately rallied against and it was in Prague so whatever DEFCON that was where basically when a shard was under load consensus would rotate which

validators worked that shard well just computer science and game very simple game theory tells you that that can't work because if Theatre in a BFT environment in an adversarial environment because what will happen is the adversary knows where they're placing the load the adversary is looking at the entire chain the adversary will be controlling your load balancing and that's a horrible outcome right so you have to remove that you have to have a bottom-up system and so so I I described that years ago as app starting in private conversations I don't write blogs or whatever so-and-so app sharding is just a very intuitive concept it's just like an app change just like Bitcoin like if you just have

a bunch of individual chains that have their own sovereignty that are for particular application and then you link them together somehow I think that actually works whereas when you have this top-down sharding which to me is the at a high level in an abstract the main difference sharding is top-down you know Cosmo style is sort of bottom-up I think that you get this robustness from bottom-up that you don't get from top-down and so ultimately when you're working through it you I understand the inclination for starting top-down but as you chip away at it you know working through the mechanisms you're gonna end up with a bottom-up mechanism anyway because that's people have to have you

know it's a this might be a little too abstract to be useful for computer scientists but people have to maintain their sovereignty these these communities that define these block chains have to maintain their sovereignty and so that's why I see ease to becoming more like cosmos every day and then there was another question and Chris seems to have left and I'm out of time yeah oh yeah I'm happy to answer them outside there's a thing two of you and I know Chris we work together so he can ask me whenever he wants um thank you folks [Applause]