Hi, this is Charles Hoskinson broadcasting live from rough and rugged Wyoming. It's April 23rd, 2026, and it is snowing outside. It was warm just two days ago. I wanted to make a video before I went to bed about a friend of mine, an absolutely brilliant guy named Moxie Marlinspike. He wrote an essay around four years ago, and I'm going to read it to you because I really love the way he writes and thinks.
Moxie is one of the co-founders of Signal, an information security expert, and one of the original members of the 21st-century hacking class—a group of people who really understand how to write and build great projects. Moxie decided to enter the cryptocurrency space, and this essay was written in January 2022, right at the tail end of the 2021 mania. At that time, NFT madness was going on, with giant valuations. FTX and Luna were still around, and everyone was going pretty crazy about all this stuff.
Let me go ahead and share my screen to read it. Here we go.
**My First Impressions of Web 3**
Despite considering myself a cryptographer, I have not found myself particularly drawn to crypto. I don’t think I’ve ever said the words “get off my lawn,” but I’m much more likely to click on Pepperidge Farm remembers flavored memes about how crypto used to mean cryptography than I am the latest NFT drop. Also, cards on the table here: I don’t share the same generational excitement for moving all aspects of life into an instrumented economy. Even strictly on a technological level, I haven’t yet managed to become a believer.
Given all the recent attention to what is now being called Web 3, I decided to explore some of what has been happening in that space more thoroughly to see what I may be missing. Web 3 is a somewhat ambiguous term, which makes it difficult to rigorously evaluate what the ambitions for Web 3 should be. The general thesis seems to be that Web 1 was decentralized, Web 2 centralized everything into platforms, and that Web 3 will be decentralized again. Web 3 should give us the richness of Web 2 but decentralized.
It’s probably good to have some clarity on why centralized platforms emerged to begin with. In my mind, the explanation is pretty simple: people don’t want to run their own servers and never will. The premise for Web 1 was that everyone on the internet would be both a publisher and consumer of content as well as a publisher and consumer of infrastructure. Meaning, you make your own web pages, run your own server, and manage your own database. Pretty simple, right?
We’d all like to have our own web server, our own website, our own mail server for email, our own finger server for status messages, and our own chargen server for character generation. However, and I don’t think this can be emphasized enough, that is not what people want. People do not want to run their own servers. Even nerds do not want to run their own servers at this point. To be fair, not a lot of people do. Think about it: even organizations building software full-time do not want to run their own servers. If there’s one thing I hope we’ve learned about the world, it’s that people do not want to run their own servers. The companies that emerged offering to do that for you instead were very successful. The companies that iterated on new functionality based on what is possible with those networks were even more successful.
A protocol moves much more slowly than a platform. After 30 years, email is still unencrypted. Meanwhile, WhatsApp went from unencrypted to full end-to-end encryption in a year. People are still trying to standardize sharing a video reliably over IRC, while Slack lets you create custom reaction emojis based on your face. This isn’t a funding issue. If something is truly decentralized, it becomes very difficult to change and often remains stuck in time. I would argue that’s one of the things blockchain solved. That is a problem for technology because the rest of the ecosystem is moving very quickly, and if you don’t keep up, you will fail.
There are entire parallel industries focused on defining and improving methodologies like Agile to figure out how to organize enormous groups of people so that they can move as quickly as possible because it’s so critical. When the technology itself is more conducive to stasis than movement, that’s a problem. I’d argue Bitcoin is in that situation. A sure recipe for success has been to take a '90s protocol that was stuck in time, centralize it, and iterate quickly. But Web 3 intends to be different.
To get a quick feeling for the space and a better understanding of the future that may hold, I decided to build a couple of dApps and create an NFT. Making some distributed apps, I created a dApp called Autonomous Art that lets anyone mint a token for an NFT by making a visual contribution to it. By the way, he wrote this in 2022 right at the heart of NFT mania, so NFTs were big back then. The cost of making a visual contribution increases over time, and the funds a contributor pays to mint are distributed to all previous artists. Visualizing this financial structure would resemble something similar to a pyramid shape.
At the time of this writing, over $38,000 has gone into creating this collective art piece. I also made a dApp called First Derivative that allows you to create, discover, and exchange NFT derivatives that track an underlying NFT, similar to financial derivatives that track an underlying asset. Both gave me a feeling for how this space works. To be clear, there is nothing particularly “distributed” about the apps themselves. They’re just normal React websites. The distributedness refers to where the state and the logic permissions for updating the state live—on the blockchain instead of in a centralized database.
One thing that has always felt strange to me about the cryptocurrency world is the lack of attention to the client-server interface. When people talk about blockchains, they discuss distributed trust, leaderless consensus, and all the mechanics of how that works. But often, they gloss over the reality that clients ultimately can’t participate in those mechanics. All the network diagrams are of servers. The trust model is between servers. Everything is about servers. Blockchains are designed to be a network of peers but not designed such that it’s really possible for your mobile device or your browser to be one of those peers.
With the shift to mobile, we now live firmly in a world of clients and servers, with the former completely unable to act at the latter. Your client really is not a server. The way you use this stuff is not as a server, and those questions seem more important to me than ever. Meanwhile, Ethereum actually refers to servers as clients. There’s not even a word for an actual untrusted client-server interface that will have to exist somewhere, and no acknowledgment that if successful, there will ultimately be billions more clients than servers.
For example, whenever it’s running on mobile or the web, a dApp like Autonomous Art or First Derivative needs to interact with the blockchain somehow to modify or render state—the collectively produced work of art, the edit history for it, the NFT derivatives, etc. That’s not really possible to do from the client, though, since the blockchain can’t live on your mobile device or in your desktop browser realistically. So, the only alternative is to interact with the blockchain via a node that’s running remotely on a server somewhere. A server. But as we know, people don’t want to run their own servers.
As it happens, companies have emerged that sell API access to an Ethereum node they run as a service, along with providing analytics, enhanced APIs that they’ve built on top of the default Ethereum APIs, and access to historical transactions, which sounds familiar. At this point, there are basically two companies. Almost all dApps either use Infura or Alchemy to interact with the blockchain. In fact, even when you connect to a wallet like MetaMask or to a dApp, and the dApp interacts with the blockchain via your wallet, MetaMask is actually just making calls to Infura. Those client APIs are not using anything to verify blockchain state or the authenticity of responses. The results aren’t even signed.
An app like Autonomous Art says, “Hey, what’s the output of this view function on this smart contract?” and Alchemy or Infura responds with a JSON blob that says, “This is the output.” The app just renders it. This was surprising to me. So much work, energy, and time has gone into creating a trustless distributed consensus mechanism, but virtually all clients that wish to access it do so by simply trusting the outputs from these two companies without any further verification. It also doesn’t seem like the best privacy situation. Imagine if every time you interacted with a website in Chrome, your request first went to Google before being routed to the destination and back. That would be bad, wouldn’t it? Google would see everything. That’s the situation with Ethereum today.
All right, traffic is obviously already public on the blockchain, but these companies also have visibility into almost all read requests from almost all users in almost all dApps. So, let’s stop for a moment and ask, “Is Cardano any different?” The answer is no. That’s the uncomfortable hidden truth that Moxie’s talking about. Partisans of the blockchain might say that it’s okay if these types of centralized platforms emerge because the state itself is available on the blockchain. If these platforms misbehave, clients can simply move elsewhere. However, I would suggest this is a very simplistic view of the dynamics that make platforms what they are.
Let me give you an example: making an NFT. I also wanted to create a more traditional NFT. Most people think of images and digital art when they think of NFTs, but NFTs generally do not store that data on-chain. For most NFTs of most images, that would be much too expensive. Instead of storing the data on-chain, NFTs contain a URL that points to the data. What surprised me about the standards was that there is no hash commitment for the data located at the URL. Looking at many of the NFTs on popular marketplaces being sold for tens, hundreds, or millions of dollars, that URL often just points to some virtual private server running Apache somewhere. Anyone with access to that machine, anyone who buys that domain name in the future, or anyone who compromises that machine can change the image, title, description, etc., for the NFT to whatever they’d like at any time, regardless of whether or not they own the token. There’s nothing in the NFT spec that tells you what the image should be or even allows you to confirm whether something is the correct image.
As an experiment, I made an NFT that changes based upon who is looking at it since the web server that serves the image can choose to serve different images based on the IP or the user agent of the requester. For example, it looked one way on OpenSea, another way on Rarible, but when you buy it and view it from your crypto wallet, it will always display a large emoji. What you bid on isn’t what you get. There’s nothing unusual about this NFT; it’s how the NFT specifications are built. Many of the highest-priced NFTs could turn into an emoji at any time. I just made it explicit.
So, there’s the OpenSea picture, and there’s the Rarible picture, and that’s what’s in your wallet—same NFT. But wait a minute, I thought it was immutable. It’s not. After a few days without warning or explanation, the NFT I made was removed from OpenSea, an NFT marketplace. The item you were trying to visit is no longer available on OpenSea. The takedown suggests I violated some term of service, but after reading the terms, I don’t see any that prohibit an NFT that changes based on where it’s being looked at from, and I was openly describing it that way.
What I found most interesting, though, is that after OpenSea removed my NFT, it also, this is bolded for a reason, no longer appeared in any crypto wallet on my device. This is Web 3. How is it possible? A crypto wallet like MetaMask, Rainbow, etc., is non-custodial. The keys are kept client-side, but it has the same problems as my dApps above. A wallet has to run on a mobile device or in your browser. Meanwhile, Ethereum and other blockchains have been designed with the idea that it’s a network of peers, but not designed such that it’s really possible for your mobile device or your browser to be one of those peers.
A wallet like MetaMask needs to do basic things like display your balance, your recent transactions, and your NFTs, as well as more complex things like constructing transactions and interacting with smart contracts. In short, MetaMask needs to interact with the blockchain. But the blockchain has been built such that clients like MetaMask can’t interact with it. Like my dApp, MetaMask accomplishes this by making API calls to three companies that have consolidated in this space. For instance, MetaMask displays your recent transactions by making an API call to Etherscan and gives you a little bit of code on how that works. It displays your NFTs by making an API call to OpenSea.
In other words, your wallet’s not actually pulling it from a blockchain; it’s pulling it from a centralized server with a centralized owner. Like my dApp, these responses are not authenticated in some way. They’re not even signed, so you could later prove that they were lying. It reuses the same connections TLS session tickets for all the accounts in your wallet. So, if you’re managing multiple accounts in your wallet to maintain some identity separation, these companies know they’re linked. MetaMask doesn’t actually do much; it’s just a view onto data provided by these centralized APIs.
This isn’t a problem specific to MetaMask. What other option do they have? Rainbow, etc., are all set up in exactly the same way. All this means that if your NFT is removed from OpenSea, it also disappears from your wallet. It doesn’t functionally matter that my NFT is indelibly on the blockchain somewhere because the wallet, and increasingly everything else in the ecosystem, is just using the OpenSea API to display NFTs, which began returning a 304 no content for the query of the NFTs owned by my address.
Given the history of why Web 1 became Web 2, what seems strange to me about Web 3 is that technologies like Ethereum have been built with many of the same implicit trappings as Web 1. To make these technologies usable, the space is consolidating around platforms—again, people who will run servers for you and operate and iterate on the new functionality that emerges. Infura, OpenSea, Coinbase, Etherscan. Likewise, the Web 3 protocols are slow to evolve.
When building First Derivative, it would have been great to price minting derivatives as a percentage of the underlying value. The data is not on-chain, but it’s an API that OpenSea will give you. People are excited about NFT royalties for the way that they can benefit creators, but royalties aren’t specified in the ERC-721 standard, and it’s too late to change it. So, OpenSea has its own way of configuring royalties that exist in the Web 2 space. Iterating quickly on centralized platforms is already outpacing distributed protocols and consolidating control into platforms.
Given those dynamics, I don’t think it should be a surprise that we’re already at a place where your crypto wallet’s view of your NFTs is OpenSea’s view of your NFTs. I don’t think we should be surprised that OpenSea isn’t a peer view that can be replaced since it’s been busy iterating the platform beyond what is possible strictly with the difficult-to-change standards. I think this is very similar to the situation with email. I can run my own server, but it doesn’t functionally matter for privacy, censorship resistance, or control because Gmail is going to be on the other end of every email that I send or receive anyway.
Once a distributed ecosystem centralizes around a platform for convenience, it becomes the worst of both worlds. This is the most important sentence in the entire essay, so I’ll read it again: once a distributed ecosystem centralizes around a platform for convenience, it becomes the worst of both worlds—centralized control, but still distributed enough to become mired in time. So, you’re ossified and centralized. Bad.
I can build my own NFT marketplace, but it doesn’t offer any additional control if OpenSea mediates the view of all NFTs in the wallet ecosystem and every other app in the ecosystem. This isn’t a complaint about OpenSea or an indictment of what they’ve built. Just the opposite; they’re trying to build something that works. I think we should expect this kind of platform consolidation to happen. Given the inevitability, we should design systems that give us what we want when that’s how things are organized.
My sense and concern, though, is that Web 3 expects some other outcome than what we’re already seeing. “It’s early days still” is the most common refrain I see from people in the Web 3 space when discussing matters like these. In some ways, cryptocurrency’s failure to scale beyond relatively nascent engineering is what makes it possible to consider the days early since, objectively, it has already been a decade. However, even if this is just the beginning—and it very well might be—I’m not sure we should consider that any consolation. I think the opposite may be true.
It seems like we should take notice that from the very beginning, these technologies immediately tended towards centralization through platforms in order for them to be realized. This has zero negative effect on the velocity of the ecosystem, and most participants don’t know or care it’s happening. This might suggest that decentralization itself is not actually of immediate practical or pressing importance to the majority of people downstream. That the only amount of decentralization people want is the minimum amount required for something to exist. If it’s not very consciously accounted for, these forces will push us further from rather than closer to the ideal outcome as the days become less early.
God, he’s such a great writer, isn’t he? When you think about it, OpenSea would actually be much better in the immediate sense if all the Web 3 parts were gone. It would be faster, cheaper for everyone, and easier to use. For example, to accept a bid on my NFT, I would have to pay over $80 to $150 just in Ethereum transaction fees. That puts an artificial floor on all bids since otherwise, you’d lose money by accepting a bid for less than the gas fees. Payment fees by credit card, which typically feel extraordinarily extortionate, look cheap compared to that. OpenSea could even publish a simple transaction transparency log if people wanted a public record of transactions, offers, bids, etc., to verify their accounting.
However, if they’d built a platform to buy and sell images that wasn’t nominally based on crypto, I don’t think it would have taken off. Not because it isn’t distributed, but because, as we’ve seen, so much of what’s required to make
Web 3 came in with a promise that we'd take it back. But we forgot that we have to meet the users where they're at, not where we want them to be, and this is where they're at. This is not a server, and it's not going to be. So, you have to build infrastructure for it, and the people who really care about this stuff are the ones who are going to change the world and make things better.
Ethereum is not committed to decentralizing infrastructure, and Alchemy. Those companies are owned by people like Andreessen Horowitz, Pantera, and Lightspeed, who invest in all the other dapps. They benefit by having a monopoly in creating a Google of the future. They want centralized off-chain infrastructure because those become choke points, and choke points are valuable. They are the Microsofts; those are the Windows. Those are the things upon which you exert influence and control. If you decentralize those, they lose all their value. They go to the token holders.
What we proved with Midnight is that we can do a glacier drop, and we proved out the partner chains model. We've been building that model systematically. Throughout this year and subsequent years, we're going to refine and make that model beautiful, but it only works if we keep building partner chains. Every time there's a glacier drop, the Cardano network benefits better than any other network. Cardano got a larger distribution than Bitcoin or Ethereum did, in fact, both of them combined. Right now, that's hundreds of millions of dollars, and as Midnight grows, it could very well be billions of dollars of value. These are just facts.
When we ask for these proposals, we want these teams to innovate and grow. We want the Cardano ecosystem to feel a sense of ownership and connection to them. I also understand that each of these things is necessary for bringing new users in, giving us a better story than the one we had, and ultimately continuing to grow the ecosystem with principles. Blockfrost's destiny, should we fund it, is to become the decentralized infrastructure and Alchemy that we all wish we would have had, and something that Moxi could write about as the proper good alternative, the thing that is philosophically consistent.
It's also another opportunity to continue building up that model. We're not quite there yet, but amazing progress has been made. The point of treasury priorities is for people to understand that this work is underway, and people are working on it. I don't bring things to you that are random or purely commercial. There's always a philosophical purpose at the end of the rainbow.
It's the same when you look at Midgard. We need someone to fully realize the potential of technologies like Hydra and the layer 2 potential of Cardano, or else it makes absolutely no sense to have done extended UTXO. We paid as an ecosystem a terrible price, a high bar for extended UTXO. We gained a lot of benefits like local determinism and great formalities, parallelism, but the biggest benefit is the isomorphism between the things off-chain and the things on-chain. Ethereum tried plasma, and it failed. Bitcoin's been trying for a long time with lightning, and yet somehow the world doesn't run on lightning yet after ten years of hearing about how great it is. Hydra and the derivative protocols of it are really one of the core USPs of who we are.
Now, I fully appreciate that some have voted against it because they've been hurt on Twitter by things said by founders of some of these projects, or they're direct competitors in some way to what these projects present. It's their prerogative, and it's fair. They can do whatever they want to do. All I can speak for is Input Output, its partners, and its vision, and where we want to take things. I don't want to retire, look back at Cardano, and say it was 75% there to change the world. We almost got it, but we let the turkeys win. The centralized actors, the web 2.5ers, they won. I want to look back and say it was a tough and close fight, but in the end, we came together and got it done. Because it made it all worth it for all of us.
A lot of us have sacrificed, and I fully appreciate we're in a rough spot, both macro and micro. There are divisions, egos, and people who, no matter what, don't seem to be able to connect to a broader vision. They live in the local and succumb to the same petty forces that have brought the world to its knees so many times. This has always been an experiment of optimism and an acknowledgment of where we can and have made mistakes in the past. When we look to partner chains, it's a resetting of the economic forces towards cooperation and blockchain-to-blockchain partnerships. It means that everyone's customer can become our customer. We're no longer adversarial with the Solanas and the Ethereums, and the layer one wars have ended.
When we look to Blockfrost, we say we have a debt to pay as an industry. We said you're going to be your own bank, run your own money, and run your own infrastructure, but we didn't do that. We have to finish the job. We need decentralized infrastructure and decentralized Alchemy, and we have to bring that to bear for everyone in this space. That dual tokenomics is purpose-built for that type of work because it truly does bring everybody in. Every time we do it, we gain new users, our TVL goes up, our transaction volume goes up, and it benefits the network. Every time we do this, it gets cheaper. $2 million is a small price to pay when I spent $200 million on Midnight. We benefit tremendously from these orders of magnitude reductions in the cost to build things and bring them to bear. There are good people there, a good team there; they deserve a shot. Let's do it for Moxi.
This space is what we make of it, and it's hard being bottom-up, voting on things, honoring the process, and admitting that others have different opinions. They will say and do things that you consider to be stupid, harmful, dangerous, or counterproductive. But you have to respect the process, and that's the nature of democracy. As bad as it is, it is good that people have a voice, and it's good that they exercise it. It makes us all better and reminds us of why we're here and why we do what we do.
I'm not always right; I make a lot of mistakes, and I don't have a perfect personality. I'm absolutely adversarial, combative, and overly passionate at times. It's my hot Italian blood from the Protassio family and before them, the Borghese. Years and years of hot-blooded people. But it's because I care; it's because I'm passionate. It's 11:24 p.m., almost midnight. I should be in bed sleeping because I don't get a lot of that these days. I have some early morning meetings, but I'm with all of you because I think there are things to say and things to do. The people around me know I'm a fighter, and I fight for the things that I think need to get done and need to pass. I'm willing to go toe-to-toe with anybody.
It wasn't wise back in 2025 to go toe-to-toe with the president of the United States about things I felt were wrong. In hindsight, I appear to be vindicated. Perhaps it's not right that they issued their own coins, built their own projects, and sculpted everything for their own benefit. And now, where are we at? A resigned crypto czar, no clarity act, and a very difficult election season where the Democrats have already taken an anti-crypto position, much more so than Gary's days. They're even funding documentaries like "Everyone's Lying to You" for money just to tar and feather our space and throw out the baby with the bathwater. All the good we've done doesn't matter because crypto equals Trump.
It takes courage to step up and say, "You know what? Enough. We have to move beyond a person, a philosophy, an agenda, a country, and recognize this is a global movement." It takes courage to keep fighting and pushing. But that's what I am, and I take the hits. Some days are easier than others, and some days I'm tired, but I still show up. So when we ask for funding, that's what you get: a passionate person who has a vision and wants to fight and keep the fight going. It's been 15 long years. Some of my friends are dead, some are in jail, and most of my friends in this industry are retired. Very few are left. But I'm still here. I posted on Bitcoin Talk today. I'm not going to leave until you tell me to leave, and the only group of people that get to tell me that is this ecosystem. That's your prerogative, Cardano.
These votes are a referendum on that. Do you still think there's value here? Do you still think we can get the job done? Do you still think we have some fight left in us that's worth fighting for? And do you still think our future is better than our past? ADA was at about $1.60 when this was written, and the industry was in a much better space. It's up to you to decide if you think we can get back there and beyond, and if we can continue to grow and thrive, or if we've already lost. I don't believe that. I believe we can win. But it's going to require a lot of work, a lot of creativity, pivots, some new blood here and there, and the discipline to show up every day, no matter how much it hurts, how old we get, or how many complaints occur. That's what you buy when you go with us. And every person on the team feels the same way.
You can go with someone else; maybe they have it too, and maybe they have a better idea. I don't know. That's the nature of elections, the nature of voting, and the nature of having the ability to make a decision. Unlike the people in Washington who tell you you don't have a voice, that it doesn't matter, or that you should vote for party A or party B and that's the only legitimate choice, I'm here to tell you that you actually do have one. Your voice matters; your opinion matters, whatever it is. Ultimately, I have faith that you'll make the right decisions, whatever they are, and somehow this ecosystem will continue to grow and thrive despite the challenges it has faced and will continue to face.
For my part, all I can do is speak out, read the essays, educate, build, deploy, fight, be in the arena, be right there in consensus, and keep going, keep moving forward. From your point, you have to make some decisions. Anyway, I'm going to go to bed. See you all tomorrow, and thanks, Moxi, for one hell of an essay. Cheers.
1:07:35
26:05
26:19