hey everybody this is charles hoskinson broadcasting not so live pre-recorded video from warm sunny colorado uh you know recently we've had some issues with ethereum classic and i guess it's time to revisit etc and talk about it for a bit so where did ethereum classic come from ethereum classic uh came from the fact that when ethereum was started there were two social contracts and it was never made explicitly clear which one was the dominant one so social contract uh number one was the code is law belief and then the other one was the world computer now when it first started these things seemed to be interoperable with each other okay everybody got along and they were all happy because it was an untested system really no major event had occurred to split the community in a particular way so coda's law gavin wood and others created these terms like legality and so forth code that can't care and there was a lot of great marketing there and remember ethereum did an ico so some of the money that ethereum took went towards that camp came from that camp i should say and some went from that camp and so when the dow hack happened it wasn't actually clear who was in which bucket and what naturally happened is that some people they went to that side and a lot more people they went to this side including the ethereum foundation now i was on the outside by the time this occurred but i felt because the ico took funds from both social contracts that the theorem foundation had a moral responsibility to support both chains obviously they did not agree with me they don't really agree with me on a great many of things that's okay that said there was a bit of a conundrum and what ended up happening is i put my support behind etc because i felt that if the ethereum foundation wasn't doing anything someone who founded ethereum should to show that both social contracts are being honored and uh basically a lot of people came together barry silbert and lots of developers and so forth and ethereum classic decided to create its own community and as a ecosystem it's been running reasonably well and i wrote a lot of blog posts in 2017 sorry i don't know why my wacom tablet's acting up there we go i ran a lot of blog posts around the future of etc in particular i felt that the only viable way forward was to have innovation within that ethereum model second we needed decentralized funding similar to how zcash has decentralized funding similar to how tasos does cardano does pivx does and all of these other guys do why because then there's always going to be money to build on the platform and sustain it and the other thing is that innovation really does require funding there's going to be some people contributing but you have a tragedy of a commons issue and in fact if you look at the history of gpg and the developer behind gpg i even referenced this in those blog posts that i wrote years ago one guy and actually very small teams of people for most cryptographic infrastructure like openssl and so forth highly heavily underfunded projects of passion we all use their technology but for some reason no one wants to open their wallet and fund to develop their technology and that's just simply not sustainable so i said okay if that's not sustainable then we really need to do something different by having dedicated funding is the way out of that and zcash has really proven that they're doing great work there and we even consume some of their work now unfortunately when i wrote that proposal as an ethereum classic improvement proposal we kind of had a straw man proposal we said hey here's a treasury system it was met with a bit of hostility and i recall even a certain member of the community writing blog posts about how cardano is an mlm ponzi scheme and the dominant development force at that time was etc dev and for some reason we couldn't really figure out why they just didn't have a good relationship with us and they said some very harsh things and even gave a nice little thumbs up to the cardanos and mlm ponzi scheme belief by the way etc dev i believe ran out of money and broke off and the ecosystem's grown on and moved on and we decided to retire the mantis client which was the software that we wrote for etc and we moved on ourselves now i thought okay well they seem to have reached peace with the ethereum foundation it's its own thing people are doing their thing there's the cooperative and so forth i'm happy that it got stabilized and the million and a half dollars i spent was well spent to keep that social contract alive and you know we wish him well unfortunately lately there's been a lot of 51 percent attacks and it's not clear where the ethereum classic ecosystem is going to go yeah and at this point we're they're in kind of a crisis where they have to resolve the short term which is the 51 of tax but then they also have this issue of funding for innovation so many of people don't know this but we do a lot of proof of work research at io global and uh within our network we know people who have built enhancements to ethereum that are between 10 to 100 times faster for running the system and validating transactions and so forth on proof of work depending on the smart contracts that they're dealing with okay this is tech that does exist and the reality is that we also have tech that can resolve through a hybrid consensus protocol which could be made available before the end of the year if we really wanted to push it that can completely get rid of these proof of work 51 attacks by creating a hybrid proof-of-work proof of stake protocol now i have a code base the mantis codebase that's written in scala it need to be updated to cover the recent hard forks but that's not super hard to do and we have a whole bunch of improvements we've done to that base and there's still an active team of over 15 people 15 plus people working on that code base for various things it is within the realm of possibility to reassign those people to update mantis put in a proof of work with a checkpointing system we invented this with a recent paper and i'll show you guys if you google proof of work oopsie checkpoints eprint you have to remember carrying proof of work ledgers by a checkpoint we recently wrote this paper we could easily implement a system like that to run with the mantis code base and have it up well before the end of the year and get that code ready to go and then we could pursue innovation and actually get a protocol that is 10 to 100 times faster that is also resistant against these types of proof-of-work attacks and we can add a whole bunch of other innovations we've come up with along the way now it makes no sense to continue throwing money at a project that i don't feel is going to succeed unless it has decentralized funding the reality is why would somebody want to build a dap on ethereum classic i'm sorry coda's law is really not a good excuse the development experience with bitcoin cash and bitcoin and these other things is getting better and if i'm a developer i so care about immutability i'm gonna go with the chain that's worth a hundred times more that has never wavered once on immutability i'm not going to go with a chain that has no road map and doesn't have a funding stream to actually get it where it needs to go this is not an attack for the current custodians of ethereum classic it's just a reality and it's reality you see with numbers by the amount of daps and new projects and other things that are deployed on ethereum classic furthermore they're completely at the mercy of the ethereum foundation for the roadmap they look at what those guys are doing and they pick and choose what they like but there's not enough money in the budget for real innovation there outside of small highly focused teams so there can be but there needs to be a treasury mechanism so i'm going to reopen the discussion to the ethereum classic community directly are you guys willing to put in a treasury system to start with probably something like what zcash is doing where guaranteed funding goes to a few organizations to get everything bootstrapped and then we have a beautiful governance as a service platform we're building for cardano called voltaire and voltaire can be used with many other cryptocurrencies if you watch my litecoin uh video on interoperability and rap litecoin you technically could use this to vote for litecoin or for bitcoin or any asset that's supported well similarly we can install that voting system and on-chain governance system into ethereum classic as well and the upside is then there's guaranteed funding for people to maintain the infrastructure there's funding that people can go and pursue for apps and projects and other things in the ethereum classic ecosystem but again it's only worth the time of people to take it seriously if there is a treasury system that's it it's that simple so i'm at an impasse here that team is already working on something else and that something else is quite important to me i can put it on hold for a few months to get everything where it needs to go and basically hard fork and get the ecosystem work and go and by the way with the hard four combinator we no longer need to do hard forks we just have hfc events so there's no more forks you have one long unbroken chain where you can validate the old history and the new history so that preserves that code as law mentality we put that into cardano we can find a way to put something like that into ethereum classic uh and we can get past this i uh i love the people there you know i had a lot of fun working that community there's some people that i didn't get along with so well and i'm not sure why but it is what it is i guess i have an abrasive personality or maybe they just want to go in a different direction who cares but uh i spent a lot of money and time on mantis and that team has a lot of passion and it's really a shame we never got to see that client surge and reach fruition and it's not worth my company's time or our strategies to pivot for a grant or a one-off payment to go and bail this out if there's a treasury system it means that i can be in the business of building open source innovations in open source software and bringing these things to market uh and be paid to do that patent-free and open source this is why i think treasury model is one of the greatest things ever to happen for open innovation and it's something that all the chains who've decided to adopt it have as a competitive advantage of the chains that do not which is one of the reasons why i feel bitcoin's dominance will not last forever they just don't have that layer of funding available so if the theorem classic community is willing to entertain a treasury system then i would be willing to create the proof-of-work checkpointing system to end these 51 attacks and be willing to put the accelerator on getting an update to the twins coins protocol that is secure and very performant and we already have lab data to show that that's 10 to 100 times faster than the existing ethereum system and we can build all this and get it into market very quickly and then there will be dedicated funding for at least three independent teams independent clients the mantis and the other two that are currently in the ecosystem to get funding to build ethereum classic and then with a project like voltaire which will be turned on next year we can reuse that infrastructure and ethereum classic and use that all this amazing voting innovation to decide where to spend treasury funds for dapps and projects and other things in the ethereum classics ecosystem and you know what will happen is when ethereum goes from f1 to f2 then they're going to lose a lot of miners they're firing all their miners and you know what all those f1 miners can go into the proof-of-work side of ethereum classic and it can help ethereum along so they're actually working with each other ethereum classic and ethereum once again so that's a thought uh it's the last time i'm going to bring up or talk about this topic but i am curious about what the etc community wants to do and if the leadership of the etc community lets me know that a treasury is viable i'll roll the dice and take a risk but i have to be assured that that's the case that there's support for that amongst the community and i'm not going to go play politics and go into the swamps again and fight the good fight we tried that and for some reason there wasn't a strong appetite for it so i have the team we have the technology we know how to solve these problems because we've been thinking about these problems for a long time and i would love to innovate with hybrid proof-of-work proof-of-stake protocols that would make a lot of fun that would be a lot of fun it'd be very interesting it'd be great stuff to do but i i can't innovate uh unless there is ample economic sense for it no one should have to work for free forever we did the time we put a million and a half dollars as a donation to the movement we never made a single dollar from etc and actually as i personally didn't hold any ether at the time of the hard fork i never actually held any etc we did take a strategic investment and bought a little etc on the open market but then we divested that at a slight profit so i don't really have any vesting or benefit one way or the other in all of this and we never recovered the money that we spent on that ecosystem i'd do it again even knowing what i know today because again i feel that social contracts matter and because i was there in the beginning and both of these social contracts were being honored i feel it's important that both options existed for people or else the people who participated in the ico were defrauded and because both of them existed and they had the requisite support then i felt that both sides got what they wanted and people voted with their wallets they either held or sold their etc based on where they set on the spectrum and you know once the ecosystem had reached a certain scale it no longer needed iohk to be around and because we couldn't really do any innovation and there was no funding available for innovation we decided to retire and leave and we're very proud of the work we did do that said it is a crisis now and if they do nothing to reassure confidence in the ecosystem more exchange to listings will happen and eventually more people will leave and then it'll end up not dying but it'll end up stalling out and etc will just really not get anywhere that's my personal belief i could be wrong i believe though that if the community is willing to embrace a treasury and we can get strong leadership in place to kind of get us out of this situation then we can easily put a checkpoint thing to ameliorate all 51 attack concerns and use that as a stop gap until a new consensus protocol can be installed alongside a lot of other innovations and those innovations will make etc significantly stronger more competitive and in a really good place to absorb all those miners who are currently maintaining ethereum one as ethereum two starts turning on and all those miners are terminated they have to go somewhere so it's a thought and as i mentioned i'm not going to play politics on it i'm not going to sit down and write a bunch of ecips and go and lobby and fight for those ecips the community has to rally behind and we have the papers we have the code people have seen these things and they know the work that we've done and who we are as actors and if they truly are open to the idea of a treasury system maybe they can hold some form of a vote create a smart contract for it whatever it may be uh then we'll come back and we'll do the work and get it done otherwise uh we wish him well and i'm glad we did spend the time we did and we certainly learned a lot about how ethereum worked you know i left the ethereum project too early to gain a deep appreciation for how the ethereum code worked but because we constructed mantis and ma and ethereum classic and ethereum are so close to each other we actually were able to get mantis to work with both ethereum and ethereum classic so at one time ironically technically ioh k was also a core developer of the ethereum project because we had an ethereum full node written from scratch and scala and you could actually run mantis on the ethereum network and validate all the smart contracts and submit them and we even did that for a little while and they to the ethereum foundation's credit they invited us to the developer meetings so we actually had built a multi-client for etc and for eth so anyway it was a great lesson we learned a lot about the evm and ultimately that made cardano a much better product and i will also remind people that the people who worked on mantis were totally independent of the people who worked on cardano a different product management different project management different developer group and completely different language and technology they wrote the whole thing in scala in a very public way every week going on the ihk youtube channel if you're a fan of history the videos with alan mcsherry and alan verbner are still actually on the iohk youtube channel so if you go to our youtube channel you can see the weekly updates for the growth indeed team and they are the ones who built mantis and actually um i believe growth in deke's code was the most concise ethereum client ever built uh it's only 12 13 000 lines of code or something like that it's very proud of that work it was some of our best work we ever did as a company okay so that's the pitch we can get you 100 to 10 to 100 times faster do a hybrid proof of work proof estate protocol a whole bunch of other pr innovations can be brought through but we need assurances that there's actually support for a treasury system if the leadership of etc rallies and says yeah we definitely want to do this stage one would be a z cash style thing for one to two years you know some percentage every month of mining rewards go to a collection of companies just like zcash does and then this funding can be used to help bootstrap things we'll make a commitment to stick around and get all these innovations through and then the next phase will be under voltaire cardano's voting system which is multi-chain and it can act as a governance layer and anyone who holds ether classic can vote on long-term funding short-term funding dapps and so forth uh and it'll be a very attractive platform to compete with ethereum because it'll be just as secure as it gets all of ethereum's miners perhaps more so because it's actually a hybrid protocol so it takes the best of both worlds in that respect and it will also have dedicated funding every month available for people who want to build on the system so people who couldn't quite get the funding to do something on the ethereum side or eos or somewhere else maybe they can go over to the ethereum classic side and be able to share that innovation there and it broadens the tent and make things better and it will not compromise the immutability argument to be clear about immutability and code is law it's saying regardless of the consequences of the transactions or the smart contracts to particular people you don't change history the dow hack changed history uh you know it moved in one direction and the koda's law people said that's unfortunate but just like mount gox or these other things we have to accept it move on for the integrity of the system when you start getting the point where you edit things and change history that's a moral hazard because there's always a temptation to go and do that whether it be from a government or someone else the whole point of cryptocurrencies is that they don't do things like that but coda's law doesn't mean you can't change things like you can't change the consensus protocol or it can't change the way the network stack works or the ledger rules that's just iteration of technology and that is history moving forward so you never edit your chain of what you did in the past but you just do new things in the future and that was the whole point of the hard four combinator idea that we that we created for cardano hfc was all about saying you can validate the old rules and the new rules with the same system if you download a cardone client today it syncs first the byron chain under the old byron rules and then it syncs the shelley chain under the new shelly rules but both of them are present and both sets of rules are there and the system can dynamically switch between them so you're not changing history and you're not changing anything outside of improvements and optimizations and new things so that's the nuance of coda's law the world computer idea though is just saying like our goal is to have this giant world computer with unstoppable applications who cares if we have to make a few compromises along the way in the move fast and break things mentality in the effort to become the dominant platform and get lots of lots of users they're different philosophies they're different ways of looking at the same problem and uh both sides were there in the beginning with ethereum but they split some took the bitcoin ethos some did not the ones that did not were the dominant party which is why uh it was about 90 10 in terms of percentage but if you take money from people and you don't define your social contract you damn well better take care of all the different viewpoints that people have or else you're being dishonest or not unethical so it all sorted itself out and worked its way out and i guess now the ethereum classic community has some difficult decisions to make and it has to decide where it wants to go and who it wants to be um anyway offer is good for a week because i i have to make some funding decisions for various people and things and some end of year decisions for things and i can't just sit in this mode forever uh and if the community really wants to to embrace a treasury system then i can pivot the team and have them go back to mantis and i have the ability to do some directed research to commercialize and productize uh what we had started with twins coins hunching had started with twins coins and we can bring that to market otherwise we do wish them well and we hope that they get out of this whole situation we really do um it's always sad when you have unfinished business and mantis to me does feel like unfinished business it's something that we definitely could have done better with and it's in my view some of the best code on market and it was one of the most complete products that we ever shipped as a company and i was really sad for that team that they didn't get to see mass adoption of mantis and we didn't have a chance to really take it to the next level and push innovation hard and it would be nice if they had that opportunity okay brief video just wanted to make it real quick let you guys know what's going on my recent comments for etc and all their speculation there and i hope everything works out for everybody cheers
