Hi everyone, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Today is November 16th, 2023, and I wanted to make another video to talk a little about some recent news that involves me indirectly. I'm referenced 69 times, so I figured I should address it since I’m going to get asked about this.
Let me go ahead and share my screen. Some of you may know this gentleman, Steven Nof. He had a tweet in late 2019 stating that Ethereum was in trouble. Vitalik asked Steve to do a full diagnostic assessment. Nof had a three-hour call with Vitalik in early 2015, which he apparently recorded. I don't know if that was with Vitalik's consent or not, but he put the recording of that call up as an NFT. Here is the transcript of it, and if you search my name, Charles, you'll see I'm referenced 69 times in the dialogue between Vitalik and Nof.
First off, I've known Steve for a long time. He came in through a friend of mine from way back in the day, John Mohan, who introduced me to Nof back in 2013. Steve was a significant lawyer in the New York cryptocurrency community, running a venture capital firm and another company called Cloud Park. Steve and I would talk off and on, and he provided a lot of assistance in the early days of structuring the Ethereum crowd sale, both while I was there and after I was pushed out of the organization. I continued to work with Steve on various things, particularly Cloud Park, which had a lot of patents—over 40 of them. The point of Cloud Park was to automate traffic citations, particularly parking tickets, among other things, as part of a municipal operating system. It was a pretty innovative company with a lot of good ideas.
Steve stayed on after I left Ethereum and provided a lot of advice about business strategy and how to structure Ethereum. The reason I'm making this video is that he made a big deal about an Ethereum rescue and restructure plan dated February 4th, 2015. The transcript reveals discussions about the situation at the time. Vitalik mentioned they had somewhere between 11,000 and 12,000 Bitcoin, which was roughly in the $2 to $3 million range. To give some context, the Ethereum crowd sale occurred in July 2014, and by February, the price of Bitcoin had been cut in half. They didn't hedge properly, and as a result, there wasn't a lot of gas left in the tank for the Ethereum Foundation, which faced numerous infrastructural problems documented in various books.
At that time, Vitalik was in the thick of things, and Steve was advising him to jettison a big chunk of the team, restructure, get some version 1.0 out, and then focus all efforts on a new version 2.0. He was trying hard to bring me back into the fold, but by then, I was already deep into starting Input Output, and there wasn't a strong desire to bring me back. I was on good terms with Anthony Di Iorio and a few of the other founders, but there were still some sour grapes between myself and Gavin. Vitalik and I hadn't spoken since June, and the next time I saw him was years later in Shanghai at the Bitcoin Winter School.
This transcript serves as an interesting historical artifact, revealing how much needle threading was done. The reality is that Ethereum almost didn't ship; they had very basic things, but the ecosystem didn't have much fuel left in the tank. There were a lot of interpersonal relationships that were strained, particularly between Ming and Joe, who didn't like each other very much. Gavin was doing his own thing and eventually went on to create Parity.
What's always interesting about my participation in the Ethereum ecosystem is that a history has been written where three great lies have been told. One, that I'm a hyper-sociopathic pathological liar who did absolutely nothing, tried to steal from everybody, manipulated everyone, and was immediately removed, leading to everyone hating me. Two, that I've never contributed anything in the history of the cryptocurrency space, and nobody likes me or wants to work with me. Three, that I constantly overstate my role in Ethereum and had nothing to do with the organization, manipulating everyone.
This narrative has been reinforced by some poor journalism and other sources. I've been in the space for ten years with no class action lawsuits or legal issues. We built Cardano, which has a $12 billion ecosystem with millions of users. There's a clear track record there. Input Output exists, and there's no real scandal. We've written almost 200 academic papers and developed a lot of code. You can disagree with the economic value of these things, but you can't deny that I've been here building.
You'll see that I'm a real person doing real things. I'm very passionate and work 100-hour weeks. There's a lot of information out there if people dig into my involvement in different projects or extensive conversations. The Ethereum project still has artifacts that surface from time to time, where I had a different vision or wanted to go in a particular direction. Recently, Vitalik has been talking about the merits of extended UTXO and Plasma, which sounds a bit like Hydra.
I don't know Steve's end goals or aims; obviously, he has an agenda and will pursue that. The Ripple community is understandably upset with Ethereum for the whole free pass situation. I wish him well, but I don't want to comment further. Whenever my name is mentioned 69 times in a transcript, it’s a good point to make a video and say, “Hey, it’s here, and it’s there.” I wouldn't be surprised if there are more conversations about this.
The fact is, I left Ethereum in June 2014 and never looked back. They've gone on to create a significant ecosystem with millions of users doing all kinds of interesting things. They have a particular view on how things should work, and I have my own. Sometimes there's overlap, and sometimes there isn't, but we all build in one big ecosystem. I hope for interoperability so we can all work together. It's a shame that things have been so profoundly personal for so long.
I wish I could have done things differently over the years. It's been a war for ten years, and every aspect of me has been attacked—my character, integrity, credentials, work ethic, and contributions. This has a psychological impact; it can make you brittle and frustrated. At times, it can lead to strong dislike for certain people. However, those feelings are ephemeral. If we get a phone call from Gavin, Anthony, or anyone else, we can still engage. Just the other day, the Wyoming Stable Coin Commission saw Joe Lubin on a subcommittee, and he was talking to my chief of staff, JJ.
We run into these people. I saw Joe at a party at the Milken Institute earlier this year and said hello. That's how business and relationships work. You can't let the fiction of day-to-day drama get in the way. There is history, but it's a small window into a very fragile time. At one point, Apple was very fragile, just 180 days from bankruptcy, and now look how strong they are. Ethereum is very strong now, but that wasn't always the case. The transcript reveals an uncomfortable truth about how close they came to not finishing what they started.
They did deliver a lot, and I try to look forward instead of back. The reality is that crypto is still very small relative to larger markets, and we have a long road ahead. No one has won or lost. Taking a snapshot of the winners and losers of the internet in 2000 wouldn't help us understand how the internet runs in 2023. The only constant in technology and protocols is that most will change in ten years. Ethereum must evolve, and the ecosystem must evolve with the right mindset. Cardano has to do the same, which is why we have a partner change strategy and a big push for on-chain governance to activate millions of people in the Cardano ecosystem.
We need to provide wisdom and insight collectively. This gives us an army far larger than anything Ethereum or Bitcoin has. Every year, we reassess and reevaluate. Some things get canceled, some turn out to be bad ideas, and others are good ideas that we double down on. You have to do that to survive in technology; you can't hold grudges or relive the past. Unfortunately, our industry seems to be in love with reliving the past and stirring up old rivalries, which is detrimental.
We're going to wake up tomorrow, and when you look at Cardano as a whole, the input endorsers on the horizon will make Cardano one of the fastest blockchains ever conceived. It will take a while, but it will happen. Hydra is the best way to handle layer two solutions. Mithril is already in its second generation with Alba, and it will be integrated into the core node. We have a great wallet ecosystem and excellent on-chain governance coming.
Community projects like TX Pipe and Aiken are thriving, and the TVL keeps going up. With the Cardano service layer, the idea of hybrid dApps is going to be pushed, where something lives on Cardano but interacts with Midnight or another partner chain. Four or five chains can work together to create one unified user experience, and we’re bringing that to market. We're showing how interoperability works and are one of the first ecosystems to do it well.
Not the only ones, but I'm glad to collaborate with others, whether it's the Ergo community, Concordium community, Singular community, World Mobile people, or the ALR people. We’re really glad to work with them when it makes sense. Not too long ago, it surprised many to find out that the largest purchaser of Apple hardware was Microsoft. They bought a bunch of PowerPC computers to test for the Xbox 360 and still have a huge amount of Apple hardware. They release many products on iPhone and Mac OS first before Windows because of a cultural change.
We need to get there as an industry and recognize what makes us strong while understanding our core principles. There’s integrity in Cardano and the ecosystem we've built together. At the same time, we must ask ourselves what makes others awesome and where we can learn from them. Ethereum made the most mistakes of any layer one project because they took the biggest risks and invited the most people into the ecosystem.
When you have such a broad tent, you accept that some percentage will explode in your face and cause damage. It's a miracle they found a way to survive and persevere. This has led to a culture of arrogance and myopia, believing they've won while everyone else has lost. This attitude is detrimental to them and beneficial for others in the space pushing their technology.
Much like Microsoft thought they were invincible with their Windows monopoly, they lost the next generation and are now trying to catch up in many dimensions. Some cases, they just can't catch up; they've lost the war forever. Every entrepreneur in this industry should study this mix and be careful with what they read. There will be stuff coming out over the next 20 to 30 years, just as there are still revelations about the founding of Microsoft, Apple, and Google.
Don't believe that just because someone wrote a book or released a transcript, you now know everything. Some people have strong axes to grind and are angry. They will engage in that anger, which somehow vindicates them. My advice to those people is to learn the same lessons I had to learn the hard way. I was very angry after being pushed out of Ethereum. I felt there wasn't much humanity in what was done, which turned me into an unpleasant person at times. In hindsight, I could have handled things differently, but that set relationships in a certain way where some doors are forever closed.
People have made up their opinions about me, and it is what it is. No matter what I do in my career, whether it's an anti-aging clinic or a synthetic biology company, cryptocurrency Reddit will still think I'm a horrible human being. There’s no road to redemption there, and that's the nature of some things on the internet. There is no forgiveness anymore.
This is a broader problem we have with Gen Z and the internet in general. People can't be forgiven, and things can't be forgotten. Once a person has been labeled a certain way in certain circles, they’re done forever. That's why we need decentralization, diversity, and a change of leadership. There will come a time when many people love Cardano and hate me; it's already occurring in many circles, and that's a good thing for our ecosystem because we’re no longer capable of letting things go and moving on.
Decentralization is the only way to move forward. I believe with C1694 and the direction we're going, we will move faster than anyone, including Bitcoin, in that dimension and achieve the facelessness required for the protocol to move away from a particular straw man. You can't let it bother you, and not everyone subscribes to a Draconian view of no mercy. Some people understand that people are people, and you can work with them.
Yesterday's enemy can be today's friend, and that's how you find a way to partner and build relationships. Gavin Wood was one of the people who pushed for me to be removed from Ethereum, but now we’re working with Polkadot. There’s a great ecosystem and community there, and I have no problem with Gavin. He has no problem with me. We can work together because we were different people back in 2014, and we've both grown tremendously since then.
He’s built a great ecosystem, and we've built a great ecosystem together. I see no reason why we can't find common ground where it makes sense for these ecosystems to collaborate. That's a level of maturity that the internet lacks, but I think we have it. It's the same story with the Algorand ecosystem and others. There were certainly some distasteful moments, and certain people got poached, but that's okay. They’re happy where they are and doing great work.
I still have the utmost respect for Sylvia McCauley and many people in the Algorand ecosystem. Recently, we collaborated with some of them, like Leo Raisen, who worked with Algorand on the compact certificates idea and then helped us design and develop Alba for Mithril. That’s an example of a mature process, and that’s where I tend to focus my time and effort these days.
We’re making a lot of progress in that dimension, spending less time considering the rivalries and fights of the past. Many people want to keep those alive, but sometimes it’s good to just turn the page and let it go. I wish all those people well, including Steve, in his quest for truth, whatever that means to him. If anyone ever asks about these things, you can always refer to this video. The transcript is an interesting read. I wasn't aware of that particular conversation; I knew it existed but didn't know the scope of it and what was said.
Eight years later, it’s interesting to read a transcript that mentions my name 69 times and discusses where Ethereum could have been. All things considered, the space is where it’s at, and we have a lot of work to do. We just have to move forward. Until next time, everyone, good talk. Cheers!
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