What is Ethereum and Why Should We Care? w/ Chris Chauvin

Transcript

[Music] thank you hello and welcome to the first episode of The Strange water podcast I'm your host Rex but you might know me as ham Solomon from Twitter Discord or anywhere else this community congregates I'm super excited to have you here as we figure out how to create a podcast together and we'll have some very exciting ideas for this show I don't want to give away too much yet so let me say this strange water will be a platform that elevates the voices of all the people that are building and building on top of the world computer and really for anybody that wants to learn more about

ethereum in this first episode I wanted to go back to basics what is ethereum and why should we care and so I called an old friend from my pre-crypto days and asked him if I could explain um one final note uh please don't take Financial advice from this or any podcast ethereum will change the world but you can easily lose all your money in the process and with that once again just wanted to thank you for joining us and I hope you enjoy the episode today I want to try to crypto pill or ethereum pill someone and uh for this experience I've brought one of my very

close friends from uh actually even before I started my professional career uh Chris and you know instead of giving my long-winded speech about uh all the things that we've done together Chris why don't you just jump in introduce yourself and uh and let's let the the community know who you are yeah thanks uh happy to be here uh my name is Chris Chauvin and yeah I think Rex are uh our first encounter was uh probably 2013 maybe 2012 right so I was at the time I was with Anheuser but you know roughly my second year with the company uh joined the Innovation team and I was out in the Bay Area uh working at the the beer garage uh so their

little their little incubator that's out there uh and uh went to the Stanford information session and you and I crossed paths I think we were you know you were interested in their trainee program and I had just come out of that program and so uh yeah I think I think at the time we were kind of you know I probably didn't realize how much we were going to work together and and you know how good of friends we were going to become but uh yeah you know you uh fortunately for us joined the the company I think we our paths came back together again when we were both in St Louis and then yet again when we were in New York so we're just kind of following each other here across the country

yeah man it's a it's pretty wild like the way the world turns out um for for everyone listening at home if you are like familiar with um sriram Kanan and eigenlayer he was a uh he came from University of Illinois Champaign um and like my biggest like crazy moment talking to sriram was realizing that like the University of Illinois Champaign which is like so instrumental in so much of this like technology and like this like really hard science stuff is um where I spent like what three or four times a year like coming out to hang out with Chris while he was in charge of like what what did we call the bud Lab at University of Illinois Champaign so yeah another one incubation centers yeah yeah yeah man it's uh it's

so crazy and you know I think why just like real briefly because this is not the point of this conversation but like do you want to just like talk to the folks at home like at why like people like you and me were working for this like super old um industry like trying to figure out out what we can do at in Palo Alto what we can do at research Parks yeah I mean to go back to 2010 when I first joined Anheuser-Busch and uh they were very much uh sort of a behemoth but a legacy company in the cpg space so they had a lot of traditional ways of working across the board uh at the time the CEO Carlos Frito uh I think he was quite Visionary uh and you know he you know had him come

out of Stanford had a lot of great relationships there and I think he recognized the value of innovation um you know he was following a lot of the Jim Collins uh you know content and and you know too big to fail and so on and he was trying to really apply that thinking uh to to Anheuser and so he made that initial investment to go and put the beer garage and this sort of Innovation Center in in the valley and then you know it sort of expanded from there and you know fast forward a couple of years and we've started to realize the opportunity that some of these smart uh startups or uh you know bleeding edge companies could bring to a big

traditional company you know think of like Last Mile Logistics and the Ubers of the world and so on again you know how do you apply that 10 15 years ago to to a company that is you know almost entirely anchored and rooted in distribution uh and so uh yeah you know eventually then the next big thing was data right data data is the new oil and so there was a big bet that they made at the University of Illinois and they created the the blood lab which was the the data center so I got to go and run that for a couple of years and it was the same thing right it was how do we not only leverage you know big data or uh just did the vast wealth of information that we had at our fingertips but it was also

through the lens of innovation so it's all about net new capabilities you know how do we uh reduce our dependency on some of these outside companies that are helping us do like demand forecasting and so on and how do you in-house it um and then again the leadership at the time they were they were very forward-looking and thinking and you know they were also looking for monetization opportunities and so you know I think at the time you're sort of uh trying to piece it all together and figure out you know what what am I going to do how is this going to really impact the company but I think now if you look at where Anheuser-Busch is and you know where they are in terms of D to C and B to B and there's a lot of sort of AI and big database capabilities that are part

of the core business model so uh yeah kudos to them they were they were bleeding edge yeah no and so just like to kind of wrap that up in a bow like um I'm sorry I'm cheating because I had the same job as you here but like basically you would say that like it was our job to like go figure out how technology was changing right and figure out what transformational things that were happening out in Silicon Valley OR at Urbana-Champaign or wherever and like figure out how that was going to transform this like 150 year old beer company that was like literally still using Magnetic Tape right yeah that's right and and so um okay cool yeah I mean so like that was our job and that's like how Chris and I know each other and so like that and like for those of you following

along at home right we the the era that we're talking about is specifically let's say 2010 to 2020 right which uh for all of us on the crypto side of the line like recognize that as like some of like the era in which crypto like transformed into this Niche internet project into something that like could have applications outside of um uh you know speculation and so um I guess like my question to you is like during this time or like in the time after like do you um feel like like crypto was something that was like even relevant to um you know like Anheuser-Busch or the companies that you worked for after in terms of like like a

technology that could help with these kinds of problems or like from your perspective was this just like something super out of left field that would show up in the news every time like Mountain Cox was hacked or whatever yeah exactly yeah I mean I would say the the first memory that I have uh let's say Bitcoin uh being referenced it with with Anheuser and some of the Perpetual uh opportunities there uh you know a colleague of ours was putting that forward as you know an alternative to sales reps going account by account collecting cash uh you know there were you know safety benefits there were um you know the benefits tied to avoiding transaction fees and so on

um so I think at the time we didn't recognize the potential we didn't recognize the opportunity and it felt Maybe too small too too early at the time uh I think later this is you know probably less functional and more PR and consumer friendly but I know uh you know the value of blockchain and sort of understanding end to end the procurement of raw materials and kind of where those ingredients and your Budweiser came from and it was fun for storytelling but yeah I mean I would say really limited potential was was our early take on this thing um yeah and yeah so and I think even now um you know it certainly feels like

maybe it's embedded in in services that that uh you know either anhyzer uses or you know now that I'm at Keurig that we use but uh yeah I still think there's a lot of like what do we do with this thing yeah no so I mean I guess like do you what do you think when you hear like either Bitcoin or ethereum right like what in your head like is this like even a concrete like idea that has applications that aren't there yet or like do you even have an understanding of what this is yeah there's a lot that I don't understand uh admittedly I think yeah the first thing that pops into my mind is like investing asset right it's an investment

vehicle you know if you were in at the right time if you are an early adopter uh life is looking pretty good right now for you yeah uh but yeah you know I I think uh and then again there's probably some of those uh stereotypical like classical functional use cases that we were talking about um you know with with the sort of smart contract aspect of it but you know I would say by and large I don't have a deep and full understanding of it and I certainly you know I've dabbled in some of it personally speaking but I've never really got me cool very cool very good place to start um let's uh let me just like start by saying like I think there's like two ways you can understand crypto like one

is from like the very traditional sense of like there's something about like scarcity and digital store value and gold and economics and like hard money something something like Bitcoin right and then like there's another approach to looking at it which is like through the lens of computer science and like what I'll say is like almost though everybody talks about it through this like economic lens and like I think everyone doesn't understand it because of that so like let's let's like rewind to to you know 2009 right like when Bitcoin is like first getting started and and like think at the super basic

level like what really is Bitcoin like all it is is a super simple application that has like balances names and like all the application can do is like transfer from this balance to this balance right super simple list of names list of balances and like this ability to add or subtract it's like essentially like kind of a bad calculator but with memory the cool thing about Bitcoin is that like there is one instance of like the Bitcoin record right whether it's like the software is running on my computer on your computer on like some guy in China's computer all of the records will match exactly the same and like the Bitcoin software and what

proof of work is is like the ability for all of these different computers to update their program like completely synchronously but without like trusting each other so does that make sense it does Yep they're all validating each other right well it's not even yeah like they're all validating each other but more so it's like there's no there's no like Central source of truth that is like the Bitcoin state it is like the Bitcoin State exists within the actual computer that's running Bitcoin and it's an exact copy of every other Bitcoin State like there's only one Bitcoin state and like what proof of work is is the ability for all of these different computers to sync their state like

trustlessly got it and so we can like we'll talk later about what like trustlessly means but like the most important thing to realize is that like Bitcoin is just simply a computer program that is like run uh synchronously across thousands and thousands of computers trustlessly clear clear let me ask and then let me ask the maybe a silly question right so we had so you're mentioning this idea of decentralized makes sense how do you reconcile that with like the linear pathway right so it originates somewhere uh right and then there's sort of a progression from one to the next uh to get through that verification or

validation process right how do you reconcile like that linear relationship with the fact that it's it is decentralized so I understand your question what you're saying is that like yes like if you um take it for granted that it's decentralized like that makes sense but the fact is it has to start with like a single um like computer using exactly there for like the original sin is centralization exactly yeah I mean Wow Let's see this is like why I really wanted to talk to someone outside of our world because I don't think I've ever heard somebody ask that before but um I think like I so to quickly answer your question it what it really comes

down to is like how we define this word trustlessness and like what trustlessness really comes down to is that like you know what's gonna happen based on computer code you don't have to trust that like different actors in the system are going to do things that are like according to the rules and So like um when Bitcoin was originally mined um yes like the first Bitcoin had to go to someone or like the first set of the the first Bitcoin network was just a very small centralized group of people but like we in this industry are okay with like the idea that one thing is happening if it's happening in a way

that is like auditable by like everyone independently um and then like Rabbit Trail for later but like that opens up this whole question where it's like okay if everything is verifiable by like um by checking the code like the problem is that nobody knows how to check code and so then you're like re-relying on trust and that like you're saying like Okay these developers who say they're not associated say that it's trustworthy and I trust them so but we'll deal with that later yeah uh so but bottom line is um like where where we start is that um like

where man this is such a good question such an important question because like the the story of Bitcoin um I don't know if you know this but do you know when the Bitcoin white paper was released I don't it was in 2008 like during the financial crisis while all the like Banks and AIG and everyone was being bailed out interesting and so the like one of like the most important insights of like this the Bitcoin or the crypto industry is is if there is a system that is manipulatable by someone like there is gonna become a moment of Crisis that that person is in a Dire Straits where they're going to abuse the

system to like save it and like we can have like you know moral conversations about if saving the system is good or bad but like the reality is is that like if this power exists it will be used and so Bitcoin what Bitcoin is saying is not only can we have this calculator that has one set of data across every single computer but like we know that like no person has um like control over it is that yeah I've already lost you in the no you haven't you haven't it makes sense and I'm also I'm like very functional in my thinking uh because again I've got a very simplified View

and understanding of it and I'm thinking you know if I'm someone and I want to I want to start a contract right I wanna so let's let's go back to the um the traceability thing right which is probably one of the more common use cases for a lot of these like traditional like cpg companies right yeah right so I you know from the moment so in the Beer World right I'm sourcing my grain you know I don't know where it would start in the process but let's just say at at you know some some part in the uh in the sourcing there someone's gonna say right this came from this Farm in northern Idaho right and like so it's a there's a there's a point of origination that that has to get sort of shared down

so yeah it makes sense and that's sort of what I was that's in my mind where I was going is like you know when you're when you're using this thing functionally there's sort of like a starting point and an ending point and yet the whole thing reconciling that with with decentralization is is still like pretty far out there for me one of like the I'll kind of get to this like punchline a little bit later but like one of the best ways to understand like what crypto is is just like part of the very like clear linear development of the internet right or or more specifically like the clear linear development of like mass communications technology and like we can go all the way back to like uh the 1400s and talk about Gutenberg but

like just for the sake of all of our sanities like you know like we'll go like radio to like TV to like being able to share like over the Internet like just just to think that like we basically made it to Facebook and then Innovation stopped and after that it was like better and better ux and not even better right but like that's obviously like not how things work like the next thing that happens after we share it like first video um audio like information is like we need to be able to share property across the internet and so like why I bring up like the the analogy to the internet is because like when you think about the internet as a whole like it is decentralized like

imagine if you could get every president in the room together and like convince them that like we need to shut off the internet the internet right like it actually physically isn't possible because like even if you like go after all like the big backbone nodes like all these computers are so interconnected in a way that like the people that want to get on the internet will still always have a path to get there yeah and so like that is kind of like the model of these like crypto systems where like the whole point whether it first is Bitcoin then ethereum is to build this like credit the big word is credibly neutral right this credibly neutral infrastructure that like does what it does like North Korea can use it just the same as Mother

Teresa can use it but like the point is is that like it's there to be used in a way that like can't be abused right so let's like continue on we'll get back to like why all this is important in a second right but um so we have Bitcoin right decentralized network of calculator calculator with accounts right and so like the next obvious question is if our decentralized computer can add and subtract can't we just make it a general purpose computer right like and and this concept um is is a concept called Turing complete named after Alan Turing from I'm sure at any point somebody like imitation game is a movie about him but

the the point of a turing machine is that you can mathematically prove that anything that a turing machine can um Can execute any other turing machine can execute so if you're able to like build a system and show that it's a turing machine then you can show that any program that you could conceivably imagine can be run on that machine and so we can talk about why Bitcoin didn't just directly evolve into this as it should have let me be clear Bitcoin Maxis you [ __ ] up um like Bitcoin is just like the proof of concept that we can have decentralized Computing as a like addition and subtraction ethereum is that transition to generalized computing

does that make sense yeah no I mean I'm falling and yeah and I think the again Outsider view not not as um as as close to all of the the nuances of of this but it's interesting right as we think about or as you explain sort of the evolution from Bitcoin as proof of concept basic calculator moving now into ethereum there's much more potential much more upside going away from maybe a basic use case which is store of value and yet at least from my perspective most of the conversation most of the of the um the context right is still value-based yeah yeah well I think I

think the problem is is like there there are maybe like 400 people that are working on building like out the infrastructure layer of ethereum and like those are the people that understand like why we're doing this and like what this can kind of enable and like before we get to the end of the Pod like I really want to like paint that picture for you um but I think that like outside of this world and even within this world it's just like it's so dense and it's so opaque and like 99.9 of the people in this space are actually trying to scam you that like um you know it's just like it's totally lost and you know like I would love for a different time to just hear like your

experience of like what 2022 was for crypto um and just like as you like we all know that like our just chaos and like Ridiculousness like leaked out into the normal world but like I I just can't even imagine trying to interpret what's going on here without even like having basic understanding of like why we would bother with this technology in the first place right right exactly yeah yeah it's yeah it's you know and and I think you and I talked about this a little bit before that you know I again I've got a basic view of it for me um you know until I can tangibly you know apply an alternative use case I mean

nfts is interesting right it still for me feels very trendy and Buzzy and you know at the time to your point it's like you're buying and you're selling art I'm sure there's inherent value there and I'm actually having the NFP but it's like okay I can go and I can create my own copy and it's like unless I'm gonna turn around and actually sell the thing or make a transaction then it's like the copy's fine uh so so there's for me I you know looked beyond all of that but yeah from um you know from a financial perspective right looking for alternative asset classes and so on I certainly played in it I saw the volatility I got nervous right because you get fomo right you you know I want to be a crypto billionaire

pretty pleased uh wouldn't we all and yeah so I played with it and you know my parents are asking me about it should we get in and then you know and just like no don't here but yeah but you know and then I jumped out and you know some sort of I've always all sort of on the on the outside looking in um casually you know trying to better understand this thing and how I use it in my everyday you know how is it helping me like everything that's going on in crypto is about um like technology infrastructure and like when I think of like what the closest analogy for ethereum will be is like HTTP I think that's what we're building and I think that like all of

the company the thing I love to say all the companies that we see today it's like imagine if it was 2003 you're at Harvard and I walked up to you and I was like Chris this is the pitch deck for Facebook here's a billion dollars and that kid over there Mark Zuckerberg he's gonna work for you here's the only problem HTTP it's not done yet all we have for HTTP is that you can send one emoji at a time that's the only way to communicate over the Internet good luck how are you gonna build it yeah exactly and so like that that is like very much like the world we're in right now um and like some people are doing some interesting things that like may or may not have staying power but um like I do I encourage you to think

about like the looking at what's going on in crypto and thinking like okay this is literally the same thing that was going on like when when geocities was being created and everything there was like all like crazy and like kind of racist and like maybe there's some Nazi things but like that kind of like spawned the thing that led to Myspace and this and this and like that's like the chaos that we're in um the difference between what happened last time in this time is that like because of what crypto is you can start to own ownership in these like protocol layers and like you know you can gain some Financial upside on that or you can like lose a bunch of money in that yeah and

I'm going to say something again not not fully informed but um I I think from my basic understanding I think one of the interesting things about ethereum is it is not it is not the asset class in and of itself it's not the story of value like a Bitcoin but rather it's a platform enabling other things um which you know potentially brings much more upside and much more potential I say that without having full appreciation for it but I do have that basic understanding that it is it's an enabler of of other things it's not the thing in and of itself exactly wait so let's talk about that right so what what you're referring to is um what I was referring to as like ethereum is turning complete right it is a platform that enables like basically

anyone to deploy their own like computer program onto it to run and like that can like hopefully generate more value like value that is like not only specific to that application but will also feedback to ethereum right and so like let's like talk about what that actually means right so what ethereum is is I literally have a computer running in my fiance's closet that is like running the piece of software that is an ethereum client and So within that ethereum client it is like the internal part of that is like literally it's just a computer all it is is a computer that has like the same thing as your MacBook just like architected you know in a different way but is capable of doing everything as

your MacBook and then on top of it it's uh there's a second piece of software it's called a consensus client and like what this does is like coordinates with every other um ethereum node to like make sure that your ethereum computer is synced with every other one and so like that's how it works um the the consensus client is the thing that runs proof of stake and so we can talk about what proof of stake is but essentially proof of stake is just what's coordinating these things and so the way that ethereum works is like I'll be the node operator I have the node in here like Chris let's say that you want to send me some money like what you do is you create a

um essentially like an instruction to the world computer that says my this is Chris I want to send one eth Terex and this is my signature and then you're gonna send it to any of the um any of the ethereum nodes you could send it to mine you could send it to like anyone's and the first thing that'll happen was is all the ethereum nodes will socialize your requests so everyone sees the request then um it'll be like one ethereum node's turn to progress the computer and that's called a block proposal and like the whole thing with blocks and blockchain is a block is just like one unit of

these transactions or these like instructions for the um the world computer to execute and so sorry this is getting long-winded but there's a point to this so when you um so Eucharist will send your instruction to the world computer and then in order for the world computer to actually execute your instructions like you you need to send some gas and what gas is is like gas is this fictitious unit of account that all it does is like measure the computational effort of like the transaction that you send so like let's say like sending eth super super simple let's say like doing like a

complex like loan and then flat like all this like derivative stuff very very complicated like so would you say it's like a transaction fee that is proportionate to the amount of work required yeah the computational work the computation yeah okay yeah and so and yes exactly exactly and so like the the whole purpose of this apparatus is that like by limiting the amount of gas available per block you are like setting the minimum required like the amount of computation that a computer needs to run ethereum okay now let me ask you another newbie question so if that if the gas is the transaction fee in quotes proportionate to the uh

computational effort um you were describing right the fact that it's decentralized and it's going to sort of go through the network um is there inherent inefficiency in that what you're asking is basically um is it inefficient to First send the transaction to one node have it distribute it and then like so so that's that is inefficient but um that is like inherent in decentralization because the problem is is that like let's say that you sent your transaction directly to me and I didn't have to socialize it if I'm like oh like let's say it's not you let's say it's

um like the an Iranian and I'm the US government and I might see like oh an Iranian just tried to send money not interested and I might choose not to like move on your transaction okay so the ethereum system like forces um the nodes to like communicate all of the pending transactions before like you go into this execution phase okay got it so it's less efficient but it's the nature of the beast in that there's inherent value in being decentralized yeah and actually like that that is the that is the most important equation of crypto which is like inherently the less efficient something is the more decentralized something is and like the

easiest way to understand this is like so again we're saying that gas is um like the amount of computation that is like available it per block right per unit of time if you increase the amount of gas per block what that means is your computer needs to be more and more powerful to be able to execute that whole thing within that amount of time and it the the more powerful you make it the more like the less likely like hobbyists like myself are going to be able to participate and the more likely it's literally just going to be Amazon Facebook Google governments got it and so like you're you're completely right to recognize that like a lot of the

things that we're talking about don't seem like they're like um execution focused systems and like that's because they're not the the thing that they're optimizing for is like making sure that like literally people using Raspberry Pi's in Africa can participate in the system because like uh yeah and we can yeah so the so hopefully that's clear yeah it's clear and again there's like there's a whole nother tangent we can go down where you know I think you were saying proof of work on on bitcoin and I know that uh because of the computational workload there's a big environmental play right and so yeah I think you know uh the proof of work and now it's proof

of stake where proof of of of is it proof of stake or proof of value as the alternative yeah yeah there's lots of um like different offshoots so so the yeah um we'll get to proof of stake in one second but the important thing is like okay so gas is um yeah so so gas is like this measure of like computation and like the by like capping gas at a relatively low amount that is like how we ensure that um ethereum remains decentralized yeah and then then like you can kind of now see how this whole system works whereas like in order to participate like users like you and me have to like send uh both

like the thing that we want to get done plus like the fee that we're willing to pay to get it done and so um like that is the system ultimately like there is this like decentralized credibly neutral like property layer that exists in the background if you want to use it you pay to use it and um it's not simple now the problem the problem is that if you want to use it you pay to use it if lots of people want to use it the price is like adjust to reflect that and go up and so like the net result is like the more popular that ethereum and Bitcoin but the more popular the ethereum gets like the more expensive it is to use it and like

it kind of like breaks down the whole purpose and like the best example of this is like there are times when it can become like three or four hundred dollars just to send ethereum or like send a stable coin from one person to another and like if we're talking about like an alternate to the like The Current financial system which you know like Western Union will charge you forty dollars to send cash across the country but our system costs you 200 or 300 like what what are we even talking about here right right right so um like that is like kind of the problem of ethereum in like 2018 2019 and like that is what created like all of this like

explosion of different blockchains like Solana like um Avalanche all these other things that you've probably heard of they that like are not that are like smaller but seem like trendy and hype are essentially they're looking at ethereum and saying this is a good idea but it's just like way way too slow let's like re-implement this on super computers got it and so like Avalanche Solana all of these they're they're basically doing the exact same thing that ethereum is doing but they're running on like between like 1 and 20 computers that are like owned by the companies that founded them got it and the problem is that is no just again I'm sorry silly question

but for these these Alternatives that are sort of based on ethereum are they actually fundamentally different in any way or is it just uh like almost like a white labeling of an existing thing Okay so if you were to ask like people as part of those communities like if they're different and if they like are really doing something in a way that um will like displace ethereum like they have answers for that like my personal opinion is like it's pretty hard to look at anything uh that we in our industry called an alternative L1 or an altel one and see it as anything other than like a cash grab by like

people that understand that everyone watched ethereum like 2000 x the 20 000 X and like want to want to kind of capitalize on all the people that have like fomo and are looking for the next one yeah so like I'm super bearish and like super super skeptical of like basically anything that's not ethereum got it so yeah and and basically yeah again the way that these other companies um have like decided to like address the the ethereum scaling problem is like all right [ __ ] it like we're just gonna like make the computers like operate like modern computers and then we'll like figure out decentralization on the back

end the way that ethereum is dealing with um decentralization is like by just like totally totally embracing or sorry is is Embrace is dealing with scaling is by totally embracing the um the trade-off that we talked about earlier where the slower something is the more decentralized something is and so what ethereum is doing is saying the ethereum base chain like eth that will always be super super slow like super slow and super expensive the idea is like that will become like the background layer that like most people will never even see like that's not even HTTP that's like TCP IP or like that UDP that's like something that like

no one has ever even heard of before and then on top of ethereum we have these things called layer twos or Roll-Ups and essentially what they do is provide like super super high execution environments like very centralized like one or six computers um that are like doing all the transactions on the ethereum is capable of and then saving a copy of those transactions to like the main slow uh ethereum chain yeah and so like what this construction does is allows like all of the computation and all of like that the action to happen in these like super high performance environments that

are super cheap but like the the net result of what happened will always be like saved back to the base layer which is like uncorruptable immutable like not up like doesn't have any of the centralization risks that are like normally associated with you know this execution it's interesting this is probably yeah this is probably like uh not a correct analogy but just like as you're as you're describing that um the visual that I'm getting in my mind is kind of like like Docker containers almost right or you have like this machine and then you've got these like purpose-built things that are going and and you know

instead of asking the core machine to do everything you can containerize it all um I don't know that's that is so incredibly right like so one of like what basically how ethereum exists today two years ago was that like everything that was happening was happening in ethereum like base chain and like these smart contracts Which smart contracts terrible terrible name because like people they sorry this is an aside that's worth having whoever picked the name smart contracts was wrong because like when you hear smart contract you start your head immediately goes into this like kind of like legal frame with agreement and like there's two parties

and you know maybe like this smart contract can like do this thing that we both agree to forget all of that like the way to think of what a smart contract is is to First understand ethereum as the world computer as like yes each ethereum client is like running on an individual computer but every client is exactly synced and so therefore looking into one is looking into any or is looking into all and that's the the world computer in a smart contract is simply an application that runs on the world computer that's it right in the same way that like I'm looking at my computer I have Discord right Discord is an application that

runs on my MacBook a smart contract is an application that runs on the world computer nice that's yeah it's it's interesting I mean I think as you say it it totally makes sense um never would have pieced that together going back to this idea that like ethereum as the platform enabling other things yeah it's more clear to me than it was yeah for sure yeah okay so okay two things I want to hit before we um we head out so one I want to talk to you about like why like really why like one anyone would care but like specifically like why I care so much about having like this system that is um decentralized and like doesn't have

this uh like He-Man risk right and then the other is like okay once ethereum is like once once we've upgraded our HTTP from one emoji to like the full Suite like what type of world are we looking at right so first let's talk about why so um you know I the the classic story of like Bitcoin is like in the ashes of 2008 and it's like the the reason this happened is because like the people in control of money were like basically like up until 2008 giving like money and power to all the people that were just doing like incredibly risky stuff and then when they broke the system the people with the money came

and bailed them out right and so like what what a lot of people think about Bitcoin is like especially after um you know 2020 and now this like new banking crisis that we're experiencing right now it's like okay this is going to keep happening they're going to keep picking winners and losers like I don't want to be part of this system because like I'm probably going to be a loser and I think like that's honestly like totally totally valid um for me it's like more personal I have like two stories that just like make me like an ethereum zealot so back in 2015 I took like two weeks off work um and it was uh early in Spring Obama was signing the nuclear deal with Iran and that week I was in Budapest with

media was my mom and my grandmother and when he signed it we were on the first train of Americans to go into Iran and spend about a week there it was one of the most incredible things I've seen in my life and you know that really like opened my eyes to um to to the like the devastating consequences of like the way that we talk about other people in other cultures and so you know normal like um privileged kid like I promptly forgot about it for five or eight years um until um the last year uh in February when the Russia Ukrainian War started and so without getting into any politics or or anything um my fiance's family is like Russian uh and they like still live in Moscow

um and like I'm not here to speak for them I you know they everyone is like uh struggling through this but um let me just say like nobody is happy about what's going on in the war uh bottom line is like I over the last year have experienced first hand like what it means to be on the wrong side of American or like um Reserve currency power sanctions and like how devastating that can be to individual families Lives who have no no ability to affect the war don't want to be in a war I have no ability to stop it to start it to do anything at all but just now need to to deal with this

and then my other story was also last year um for things that are like totally unrelated to crypto I got locked out of my bank accounts for um from May until September and like the the net result of that was like I was totally unprepared I didn't have um any liquidity available I ended up having to like first putting all my credit cards on minimum payments and then um taking uh like a five figure loan from my mom and then finally missing a mortgage payment before this whole thing was resolved and like that for me was like the radicalizing moment like the moment where I realized that like not only

do I like not have control over my money but like nobody cares and nobody has any sympathy and if like something goes wrong and somebody and I need money to fix it like you need to have access to it and so like what crypto is is like an answer to that yeah I mean it's it's interesting to hear like those personal experiences and stories and I I think you know from day one as you were saying right again let's go back to bitcoin but just the fact that it's the call it the safe haven I don't know if that's the right word but it's something

other than everything else and and I think like fast forward and as this thing has really grown and popularity and awareness um you know you hear a lot more about um you know pending regulation and so on yeah I guess what are your thoughts I think that um I think that we got this far with zero regulation because um this industry one is just it's very uncoordinated decentralized but um too I think it's because like we looked at the lessons of Mark Zuckerberg and like the tech 2.0 bubble and we saw like hey look like they didn't get regulated and they

grew to take over the world like and they got so big to the point where like regulation just doesn't even like conceptually make sense anymore like that's how technology works that's the path we want to follow and I think that that was like the absolute wrong lesson to learn like the right lesson to learn and like this is something that you understand more than 99.99 of people in this industry is that like yeah the rules get changed by like people hustling behind the scenes you know like like I I forget what position you were in um in 2017 but like Anheuser-Busch played like a major role in like the tax changes um in 2017 and

like it wasn't just because like we were sitting on the side and like writing thought pieces about like why regulation needed to do this X Y and Z it's because like we had boots on the ground like we had people in Washington we had like factories in States like that were like putting out Communications about real people with real jobs and like regulation gets shaped by like by Industries and like crypto has been completely absent up until like we experience an existential threat and so I think like we're in a pretty dire situation right now it's not good and I think that like even if we were able to like go and find all of the Senators and like convince all the Senators who think

the wrong things and convince them about what good regulation is and get the perfect Bill drafted like the reality of our government right now is like I do not believe we can pass a new law and I I don't know when that's going to change again and so like I I think that um like again I I'm more worried about things in our society like falling apart than I am for crypto but you know and um like like bottom line you can go back to like some of my older podcasts but I say this all the time like I fully believe in a world where Washington just like makes it illegal to hold crypto

that that totally could happen in fact like it might even be likely to happen and like my response to that is like well I'm moving to Singapore or I'm moving to Dubai or I'm moving to like I'm moving to Moscow you know like I like what is being built here is inevitable like I made a website called inevitable ethereum um which is a quick plug little uh Wiki style um website of like all my writings that like essentially boil down to my thesis that like again this is just the Natural Evolution of the internet like we had to figure out a way to like move property through this space and like while I'm

like looking around and watching like like governments don't work anymore negotiations don't work anymore like coordinating doesn't work anymore like I'm in Los Angeles I live like near Venice Beach right now somehow like in the most expensive part of the country is also like the biggest homeless camps of the country like when I see ethereum it is like just like like science and humanity and like people like just not relying on like these big systems that aren't working anymore and like coming together and figuring out how to make this work and for me in let's say anyone else not not as much in the know I guess for those looking to drive regulations what are the

what what are the top two or three things that they are anchoring in on right I mean certainly when you see how much adoption is driving up the inherent price and value of this thing and then you see people that are financially gaining and benefiting from that There's an opportunity there for them to go and jump in but let's say above and beyond that are there other you know core pillars to their uh you know advocacy for regulation I mean on so like really where regulation is right now is like super super combative like there's not really I mean I'm sure there's people that would take offense to what I'm about to say but it's like not really like a an industry group that's like coming and

advocating and like trying to like get Congress to do good legislation instead it's more like reactionary people in Congress um watching things like FTX like watching things like svb bank and Signature Bank um SUV pink is the wrong example but Signature Bank um like do some like things that like whether or not are actually okay like look really really sketch um and so like the the dynamic that's going on is like the SEC and like some Congress people are like basically saying like we need to just like burn it all down get rid of this and then you have like kind of the crypto Community like coming out

like with weapons ready to defend um and and so like it's just it's very chaotic I'd say like the big like pillars that are being argued around are um one is like ethereum and Bitcoin and and coins are they Commodities or securities um two is like really around like the like what it means to be a stable coin and like do you need to have reserves do you need to um like be able to convert to like a a real dollar as opposed to like other kinds of stable coins like those kinds of things um and then there's like a so much stuff around um privacy and um know your customer kind of stuff so you know like honestly it's like really really boring Financial stuff and like

when people always like kind of get worked up about um about regulation like my opinion on it is like look there's like bad regulation there's stuff that can make like it harder to start companies and to build stuff and like ultimately like there's regulation that would mean like the real zealots like myself are leaving the country but 99.9 of Regulation is just like straight up good and like the reason that it's good is because it like provides the permission structure for like real businesses to enter the space and like actually build things with concrete value and not just like speculative value and so you know it's like it's just it's really frustrating to like

talk about regulation in this space because a lot of people just like don't really understand how regulation works and and what we should be hoping for but um yeah I don't know I mean I hope that answers your question yeah yeah no it's I think it's good it's good to get your stance on it right yeah because I agree I think regulation can be good so long as it doesn't overstep and that's that's the balance yeah well and I mean it's just like the way the world works and so like by not having it it doesn't like create a more conducive environment it creates like a more shadowy environment and and like the result of it yeah I would say it gives it credibility right yeah for sure in some ways it could support growth for no I mean it

definitely will I it's it's um like let me put it this way right like great example and this is like without spilling any company Secrets but like the thing that we always used to talk about like especially in the 2013 to 18 era at Anheuser-Busch was like oh are we gonna like buy a weed company right and it was always like I mean maybe like it's interesting like obviously like share of people's leisure time is going to be eaten up but like we're not even gonna entertain this conversation until like there's regulation that makes this not a federal crime yeah and like again like Anheuser-Busch right like as someone who is responsible

for essentially transferring money between Belgium and U.S like six times a day like crypto today could like change the game but like they're not gonna go like drop a billy on like ethereum when like next week like the SEC could be like okay if you own ethereum that puts you like in concert with North Korea you know like and so like regulation I like very much believe is like bullish and like is the key to growth um at least in the United States yeah I mean again I I'm you you and I are friends no [ __ ] but like yeah I mean this is something where uh

I recognize the potential for this thing but I didn't understand enough about the thing itself to act on it right and so I've always been passive outside looking and you can't be blind with this thing I mean I every time I open up you know any news app right there's always something there's always something going on so it's there it's in your face more than it's ever been and yet it's in a lot of ways feels more Out Of Reach than than ever because again the oversimplified price and sort of financial gain feels like that's come and gone and so now in a lot of ways

it's like more inaccessible than ever because you don't know what else there is on the surface um you know Behind these things so um yeah I mean I know I'm coming out of this you know having a better understanding for it and I think your your passion for it is certainly contagious um this is a funny anecdote right like like I just remember this is probably like 2012 maybe uh so so fairly young fairly new in our career and I I realized I'm like you know what I gotta start investing yeah I don't know if you remember this right I gotta start investing so who I do I call Rex Rex do you do any investing yeah yeah I do nothing all right uh what do you use I use e-train yeah whatever so what do I

do I go home and like that night I'm like in E-Trade buying at the time probably Apple Amazon some of these things still have it to this day and then I remember fast forward a couple of months you know hey hey Rex this E-Trade thing's going great if you had to do it all over again what would you do the next thing out of Rex is my you know there's just there's this new thing better man it's kind of cool went home I opened a betterment account I went all in on betterment right the thing bought our house right so so Rex is you're my go-to uh you know the total opposite direction because like all I can do is lose my own money so I'm glad it's working out for you I think I think it's just timing I think

it's just timing yeah I got it and yeah and then I got rid of it before everything happened because we bought the house so I don't know maybe that's not a complete win no man no I I think um yeah I think the wrong way to look at investing is like number go up and it is about like what kind of Life are you trying to live and I feel like at the end of the day like my dumb uneducated comment like bought you a house like I mean literally what more can you ask for so yeah yeah so here man like the what here's what I'll say about crypto and like I didn't enter this conversation like hoping that you join our little cult but uh I would like love if that's the end result but um back in 2018 when I was like like

really thinking hard about leaving Anheuser-Busch and like when I ultimately did um I like I'll never forget I said to one person um the the head of the Beer Garden in St Louis and I said to her I was like look I just feel like everything that I've done at this company has been like managing something that's falling apart and like everything is on its way down and like it's just like filling holes and disaster crisis and like I just like I really want to like work on something where I feel like I'm building something and I'm growing something and like I'm trying to achieve something and like what she said to me was Rex

this might not be the right company for you and like for me like that blew my mind because like this is like a super senior person at the company who like I couldn't believe could ever say something not positive about the company that they work for but um like what what I've like taken away from that was like I spent like the next however long like looking for a job and like trying to find something that like would not have that problem you know and that like I would like really be enthusiastic about like going to work like not because like I cared about the people or anything but because like I like needed that company to succeed and like you know my story you know how many like

different like jobs and and like different places I looked at like the first time I like really felt excited each day to like get closer to the Future was like when I found ethereum and so um again like for me I I like I'm such a tumor these days like I really live in this world that's like falling apart and like whether it's because of like the war in Europe or like our own domestic problems or like this like you know like world war three that's like looming over Taiwan or like literally anything anything I didn't even mention the pandemic because like I feel like that we're over that right but like um like their ethereum is like what it you know is is us still moving forward and

like that's not it's not the only place where that exists but like I do think it's the only place where like it exists and like you are not only welcome but encouraged to like walk up to the group and like help in whatever way you can yeah and I think you know and I think you know thanks for sharing the personal story there and and frankly I left Anheuser for the same reason right I think I I I was looking for the opportunity to get back the building right so we sort of both came in through the Innovation track and then we both found our ourselves and different parts of the company and you know eventually you know most of the company doesn't they're not thinking in in like net new

capabilities and building they're just it's either status quo maybe you're optimizing more often than not you're fixing and it's such a dream and I love for the same reasons and that's why I went to a startup because there was a lot of excitement there new to the world in a lot of ways it was you know and in place a new city I knew everything and yeah just the excitement to build was totally there and so you know same thing for you know ethereum right I understand the excitement of building something and then and then just this the undertones of this being potentially so good for the world is also something at least for me that's become increasingly important right because it's like of all the things I

can go to work and do every single day why am I doing the thing I'm doing is it just for me is it just for financial gain is there something more to it I haven't found this something more yet right I'm getting there and I'm caring more and more um but just my point being I think your message totally resonates with me because I think that's the same excitement that I'm looking for yeah no yeah I mean and I think I think like I think that's part of at least the American condition and it might be more broad than that but like the word that I used with um with that executive was like my job has since I started here has always been managing the decline and like I think that's what it means to like largely live in our society

um and um like with ethereum I feel like that like that is so far off the table like what to climb like we're not we haven't even started yet and so for anyone yourself included that's looking for um that kind of like spark to life like the great part about ethereum is like you can start getting involved without quitting your job so um with that what I'll say is Chris thank you so much it was such an honor and I really appreciate you just letting me lecture you about um The Cult that I found and uh I hope you enjoyed your time yeah it was a pleasure being here and uh thanks for putting up with my uh I don't know lack of knowledge here no

please you're perfect you're perfect all right thank you so much I'll talk to you soon all right foreign