hi this is charles hoskinson broadcasting live from warm sunny colorado always warm always sunny sometimes colorado so today is august 7th 2021 and while most work that we do at io global about 50 or more is in the cardano sphere people tend to forget that we work on many different pieces of infrastructure products and services and one of the pieces of infrastructure that we work on is ethereum classic and we've actually worked on it twice uh so a history lesson back in the day and i'm getting sold in this space i can't remember it was 2016 or 2017 i think it was 2016. there was the dow hack and shortly thereafter people started making decisions whether they were neutral they supported the fork or were against the fork uh and so as one of the ethereum founders i waited a bit to see what all the other ethereum founders said and when it became clear that the majority of them were going to support the fork i felt it was problematic because the people who invested in ethereum who participated in the initial ico there wasn't a strong social contract there and some invested with a code is law mentality gavin wood created a term called illegality and there were dozens of other people that believed in this code that can't lie can't fail philosophy and stephen tuwall had done marketing and got the ethereum foundation to push this concept of the world computer and these seem to be the same until the dow hack occurred and then it actually turned out that they were different so the code is law group said wow that dao thing is quite unfortunate it's a shame some people lost their money we'll just have to move on oh well it's like mount gox it's an event uh nothing needs to be done and the world computer people said well the existential problem of having an event like this occur uh will damage the credibility of the platform to an extent that we may lose our ability to continue building the smart contract ecosystem so we should bail them out yeah and i'm paraphrasing both there's a lot more nuances in this case well because only one side got represented with all the capital i i thought it would be prudent to support the other side so that that side got some love and that at the very least the people who invested they'd have both options parent ready so i put my money where my mouth was i hired a whole team of scholar developers we wrote the very first scala version of an ethereum client it was a full node run the ethereum code and at one point connected the ethereum network and the ethereum classic network i we funded uh let's talk etc with uh christian sebarino uh and uh carlos fakari we funded some community management and we attended all the conferences and we were in the etc world for almost two years we also brought in gregory roshu at that time and we were the first firm to finance the formalization of the ethereum virtual machine with k the problem is that both vitalik and me are the first to admit as this gavin has as everybody else who works in ethereum in a technical capacity that the original design of ethereum is unstable it's too complicated for what it wants to do but not complicated enough to actually do what it needs to do so basically the the issue is that if it's left to its own devices the system basically becomes untenable with adoption and that's what you're seeing right now with f1 that's why f2 exists and that's why there's a very aggressive technological movement to migrate from f1 to f2 and if that migration is successful then they've moved much closer to that long-term dream of world computer and they're utilizing fundamentally different technology proof of stake and sharding and all kinds of weird layer 2 stuff like optimistic roll-ups and so forth and an attempt to accomplish that end the issue is that the philosophy of code is law first it's not explicit there was no thomas aquinas uh or saint augustine of of that church to write down the doctrine of that philosophy but of what is codified in the lore of etc it's difficult to establish how the road map of ethereum 2 is compatible with the vision that etc has now in that illegality that code is law world so at some point likely in the next 12 to 24 months the innovations and advancements of ethereum 2 will not be compatible or downstream or upstream of ethereum classic so they can't copy paste anymore so that means that etc is losing its innovation budget second etc is not like bitcoin where it can revel in its simplicity and stay the same way and do the same thing for 25 years 30 years and just absorb some niche for that the design of ethereum is not fit for purpose in the code is law sense so it's in an unstable place and it's losing its innovation funding source in both science and code to be able to continue getting better so what does this mean it means that unless a new innovation funding source comes in from volunteerism a patron or treasury system there's just simply not going to be the funding necessary to field the tens of millions of dollars required to systematically change etc so that it can be its own chain now we proposed years ago a treasury system and at the time the politics of etc were such that they preferred a bitcoin style volunteerism approach after six months of fighting i said you know it's an interesting experiment i have cardano we have other things we're working on so what we're going to do is retire the mantis project reassign the developers elsewhere in the company and let's see where etc goes so we left and we saw three years of no progress no major innovations no major changes not a lot of adoption and it got so bad last year that etc started becoming the victim of numerous 51 percent attacks so we said all right we're kind of emotionally connected to this we put millions of dollars into the ecosystem let's come back and promote propose some common sense things first off let's talk about how to solve the immediate problems of 51 attacks so we said let's talk about checkpointing we produce papers like advocate and the bft checkpointing paper and talked about the science of checkpointing and we wrote ecips during plastic improvement proposals although while doing that getting brutally attacked by some people who apparently have already left the etc ecosystem second we said there needs to be a different roadmap than the roadmap of ethereum because they're going to diverge ethereum's going to proof of stake etc needs to do its own thing it can't stay where it's at it's an unstable design we see that every day look at your gas fees look do you think that is a competitive platform when even bitcoin itself at some point will get smart contracting capabilities at a fraction of the cost and you're going to argue that our principles are stronger than bitcoins in that respect come on let's be real about this if you want to live in a fantasy land with no plan and no strategy you can try to stay with the status quo and then you're saying well we disagree with vitalik but we agree with vitalik the design of ethereum was perfect in the beginning but the vision of the founder was wrong it's just it's crazy inconsistent consistencies you need to really take a step back and say things have to change and you need an innovation budget to pay for that change anything can be done you know you can invent new network algorithms you can make useful proof of work you can shard proof of work you can really get deep in the formal verification of smart contracts we can make an explicit doctrine and find the thomas aquinas of the church of illegality and write that doctrine down all these things can be done but it takes time a team and the team can't work for free because of the complexity of the project volunteerism doesn't work well when a project is hyper complicated just imagine that you're building a skyscraper and you say we'll just do it as an open source volunteer skyscraper and then everybody's just going to show up and do their work would you trust that building you'll have variable quality all throughout it'll never get completed the more complicated a project the more specialized the team has to be working on it and those teams require resources volunteerism didn't work for years the definition of insanity is doing the same thing again and again and expecting different results so that's probably not going to get us there the patron model means that etc is owned and operated by one or a few entities the rich people and believe it or not if i wanted to control etc i'm in a financial position where i could be that guy say oh sure pay for everything and we'll just move in this particular direction but that is not not good for decentralization it hurts the entire ecosystem by having one or two rich guys basically pay for everything and decide where everything is going to go so i've always argued that the third option a treasury system makes sense and there's been so many lies told about this and so many misconceptions about basic economics let's be very clear about something when a blockchain mints money through inflation that money doesn't belong automatically to one group of people like miners that is a money made to pay for a service being provided to the blockchain the killer application of that was mining that's what bitcoin does but every person in etc pays that price inflation and right now the idea is that money is automatically owned by the miners this is the first lie that's being told in an anti-treasury campaign again and again and again it is money that belongs to the people of etc because they pay for it through inflation the etc i hold the etc other people hold is worth a little less because more has entered circulation and then there's a question of allocation what are we paying for and what are we getting there's been numerous 51 attacks so the mining class in etc has from time to time shown mercenary behavior so not exactly the best people in the world to to always pay blindly second all the other facilities of etc are uncompensated and living in the volunteerism that's why we don't see significant dap adoption that's why we don't see a lot of development progress on the infrastructure side that's why we don't see a lot of marketing that's why we see an overwhelmingly negative brand perception of etc a lot of people in space say it's a dead chain and it has no future no traction the argument of a treasury is take some of that inflation and put it into a decentralized account to pay for the things other than just security things about commercialization things about innovation things about engineering things about growth of the chain this works incredibly well with cardano and has enabled cardano to grow tremendously quickly catalyst started very small it's still in its infancy and now every six to eight weeks we see 50 or more companies ventures projects people funded there's 600 million dollars of value that's there and when people consider cardano as a chain to invest and build and do things and they take into account that that chain has made provisions to pay for its evolution its growth and the community is in charge of that so the idea of a treasury is you have to start before you run and zcash and others pioneered this model ensure that there are some core infrastructure companies because there was no ico with etc and enable those core infrastructure companies to be able to come up with a vision a roadmap in sustainable stable infrastructure that is distinctly different from eth2 ethereum two and allows us to preserve the principles that etc was founded on formalize those principles get them written down get a great road map for the next three to five years talk about where we can innovate and we've discussed this innovation before things like sharded proof of work there's a great protocol promote veswana throat in 2018 called prism that protocol is 10 000 times faster than normal proof of work but preserves the principles of nakamoto proof of work at its core there's been 12 years of thought since the launch of bitcoin about how to improve proof of work keep the things you like but make it faster better cheaper more throughput that's just one of dozens of innovation examples and if there was a treasury system the infrastructure companies can start constructing all those things then layering on top of that a mechanism for dapps and third parties who agree with the philosophy of etc this code is law the irreversibility of transactions where there are very few vendors in the space where that is the res on detroit of the chain's existence give them an opportunity to finance their applications so that means you have a robust resilient ecosystem growing and as that ecosystem gets use utility and adoption the perceptions of the ecosystem change within the space and even if it stays a small ecosystem it's one that has a right to exist and maybe it grows that's the fun part about crypto but one thing that's not one thing that's blatantly clear to me is you can't just stay static it has no reason to exist right now there is no innovation budget anymore it's going away the technology is not sustainable there's no adoption there's not going to be this magic moment where ethereum goes to ethereum two and somehow all of the dapps that disagree with proof of stake are going to simply just migrate over to ethereum classic as as if that's a big thing maybe you'll get one or two but guys if they were already so in love with the idea that code is law and living on ethereum why wouldn't they migrate over to ethereum classic during the last five years why didn't they they had every opportunity to do so the technology is mirrored the transaction fees are significantly lower they're suddenly going to have a philosophical problem now when they've had every opportunity to migrate as for the miners migrating they'll migrate to whichever chain offers them the greatest roi not whichever chain agrees with their philosophy they're a service provider they perform a necessary service nothing against minors but don't believe for a moment that businesses are going to act against their economic best interest they're always going to move where it makes sense when it makes sense and they'll do the calculation and see which chain is the case maybe some days of the week it'll be etc maybe some days it'll be something else but we can't count on that so this is a crossroads and the mantis team is back in full swing we have great partners like lunatec working with it dedicated product project management on it we're chirping away we're making progress it's been difficult at times but the code quality is definitely maturing we've written ecips about checkpointing about treasury and so forth i've joined the cooperatives board and i've made my opinion very clear about what i think needs to happen and in the coming months the fight will occur and hopefully if the treasury proposal gets accepted it will require a hard fork as will many other things in the uh in the roadmap and if that gets through there's now an innovation budget and there's now a path forward and at least three companies independent companies will have infrastructure budgets engineering teams and those companies can work together and create a compromised roadmap for the path forward for etc if the treasury proposal doesn't pass will etc die no but it will linger on and on and on as an artifact of the past like feather coin and dozens of these other projects that had some promise and potential at one point if only they could find a way to get to the next level i've seen a lot of them like nxt and so forth and it's sad because at one time they could have been great so setting the drama aside and uh certain people in the ecosystems tendency to just lie again and again and again you know i i've been here since the beginning i've invested millions of dollars of my own money into this we have yet to see a single dollar of return no one gave me any atc we have any we had to buy it take a position just like everybody else and we put a lot of hard work and effort in and i've taken enormous criticism for supporting ethereum classic from my own community in the cardano world to the broader ecosystem that even people accuse me of being the dow hacker because of my continued support of ethereum classic yeah i'm still here because i care and i honestly believe that philosophies like coda's law should be explored to their logical extreme through certain projects it may not be a mainstream philosophy but it has every right to exist in the menu of ideas but given that ethereum classic is losing its innovation budget it's losing its innovation target ethereum is no longer going to be compatible with this and there's going to be limited code transfer we need a source of funding to ensure this continues unless there's an expectation that people are just going to continue dumping millions of dollars of their own money on the same economic terms that a speculator gets and less economic terms than a minor gets and for what reason and then you have to take a step back and look at the dapp developers and ask them honestly why would they want to build on a platform using second generation technology that's dug its heels into the ground and made a decision that it will never get better and has no money to get better and as the complexity increases the probability of a catastrophic flaw bug security issue especially going unfixed increases so we'll never get adoption no adoption means a slow heat death of the cryptocurrency until it becomes a calcified lumbering dead god floating in the astral plane that's what we're looking at over the next 5 10 15 years however long it takes and the patrons will eventually abandon the ecosystem if there's no vision for it i think it's a very balanced pragmatic reasonable proposal to say have three infrastructure companies which are independent have the funds that they need to create a road map and build the technology over the coming months and years and then write the philosophy down and clearly differentiate ethereum classic from bitcoin from ethereum 2 from cardano and other ecosystems and give that a chance for people to take that seriously when their values agree with that and give them the tools that they need to build cool stuff i think it'd be fun to look at all the things we could do all the innovations we could do and we know how to do that we have a proven track record for that and that's what's going to be decided over the coming months in any event it is what it is and that's the that's the nature of this space we can disagree without being disagreeable we can have different philosophies without the people who have different philosophies from you being evil but i'm getting pretty goddamn tired of the people that disagree with me immediately saying i'm corrupt dishonest a sociopath i have bad intentions even if a treasury proposal was the past we probably will not make significant money from our participation in ethereum classic unless the ethereum classic becomes overwhelmingly successful and enters the top five to top three which is a very unlikely event given all the competition in the cryptocurrency space and all the new things coming so this is not something about money this is about ensuring that what we leave behind what we construct is sustainable that's the point that's the point of getting to a point where people realize that when you pay a tax the taxes paid by the ether token holders they should get value for the tax that they pay or else why do we have inflation and because we have the audacity to say that that doesn't belong to the miners automatically even before they've done any work at all and by the way it's an inconsistent argument because the miners don't care if they get eight tokens or ten tokens what they care about is what is the us dollar value of those tokens do a thought experiment would you rather mine chain a where you get eight tokens at a hundred dollars or chain b where you get ten tokens at fifty dollars which is better for you if you're going to sell them as soon as you get them because you're a business and would you rather be in a chain that is stable sustainable with a road map and growth then maybe the miners actually hold the tokens instead of immediately divesting them in which case they're actually invested in the value appreciation growth of that ecosystem and exhibit less mercenary behavior but apparently these basic concepts are completely lost by certain people in the ethereum classic ecosystem that continue to lie do interviews and other such things so i'm getting tired of it i really am you know if this is the kind of toxicity you give to people trying to help who spend their own money why again would anybody want to come and build in your ecosystem why what's the point it's a very small very negative very toxic club and it gets smaller and smaller and smaller because the people in the room turn on each other because there's always someone who's not holy enough there's always someone who is the next target we're just here to help we've learned a lot along the way building a full ethereum client was always something i wanted to do and we did it and you know we did it because it's the only scholar one around there was no code to borrow 100 handwritten it was a great exercise and we learned an enormous amount about how ethereum works under the hood the things that work well the things that don't work well there are no other clients in the etc ecosystem that are 100 written from the ground up specifically for etc this took years of effort it was the slow way but it was the right way because it gave us a very clear path forward to build on without relying on geth or other things from other ecosystems and uh that experience alone was worth the price of admission i'd like to continue on this journey with you people in the etc ecosystem i really would and i think there's a lot of great things we can do from formal verification to sharding and so forth but that will cost money and it can't be done unilaterally needs to be done with independent development companies working together debating each other and coming to compromise through the ecip process we certainly can contribute but others need to step up as well and we need to have independent 100 new code bases that ensure that those code bases are for our ecosystem and they're high quality so anyway this is the last time i'm going to make a video about etc up until when the treasury proposals going through we'll see what happens we'll see if the fork goes one way or the other and i hope that greater reason prevails if it doesn't well it was a good experiment in my view and i met a lot of good people along the way from barry silbert to others uh and we certainly had a lot of fun together and we certainly learned a lot from mantis we're going to use mantis technology probably in cardano for the pawn strategy as a side chain uh and it's been great going around and thinking about how to build this stuff and you know people move on and i wish everybody well but that's where we're at and i've been nothing but honest about that i you know a lot of people don't like lean perhaps because i'm too blunt direct and i don't have as much diplomacy as i need to be i'm not going to give anybody honey words i just tell you how i see it because i don't have time to lie i don't have time to be two-faced in this respect you know if i see a problem i let you know a problem and the problem is again what we have right now doesn't work and we're losing the ability to upgrade that to something that does so we need to find a source of funding and teams capable of taking it somewhere else within the values that the community has decided over the last few years that's the way i see it i could be wrong could have different values than you okay let's debate it but please don't call me a corrupt sociopath other negative horrible words or question my morality our intentions you know i've been nothing but straight about this the entire way through so let's see what happens at the end of the year thank you guys so much
