Hi, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Always warm, always sunny, sometimes Colorado. Recently, I’ve been traveling; I was in Brazil, Argentina, Uruguay, Guatemala, and then up to Vegas for Rare Evo. I was in Jackson Hole for the Salt event, went up to Alaska, and got to be at the base camp of Denali. I enjoyed a lovely time at Sheldon Chalet and was off-grid for a little bit. Thank you for missing me.
Then I went down to Barbados to finalize a transaction where we just acquired a company there with my good friend Gabe. It’s been a long journey, not just the recent travel but the last nine years. When I reflect back on where we started as an ecosystem, it was just an idea, a board that kind of looked like that. We’ve grown tremendously throughout the years. There have been ups and downs, and a lot of disappointments, but now we are here today, September 1st, 2024—a day where we declare independence. The entire ecosystem, the community, every holder of ADA stands shoulder to shoulder as equals, and they all have a say on the future of not just this protocol but what this protocol can do for everyone in the world.
The reason I joined the cryptocurrency industry, the reason why I’m here instead of in medicine, agriculture, engineering, or academia, is that this is the only industry that I saw that had a legitimate chance to have a front-row seat at changing the economic, political, and social systems of the world as a whole. I believe this just as firmly, if not more so, today in 2024 than when I first discovered Bitcoin right after 2010. It’s been a long journey, a long road, with a lot of movements back and forth. Back in the day, no one really cared about Bitcoin; it was yet another open-source project on the internet that a bunch of cypherpunks and nerds thought were pretty cool. We’d mine and trade on spreadsheets and complain about things on Bitcoin Talk. It was an innocent time, and yet it was a philosophical time. People were having deep philosophical conversations about the potential of email for money changing every nation-state because the most vital core of every nation-state is property rights and money.
If you can bring back the concept of sound money, if you can bring back the idea that we are in charge of our money system—something beyond an artificial construction like an agency or a bank, but a physical property like gold, which has a deflationary property where it gets more valuable over time—we all speculated that this was fun and exciting. I remember back then, there were people who mentioned the deflationary spiral in the 19th century in the United States and all the private banks that issued money, as well as the deflation shocks that occurred as a counterexample to us being successful.
People like Mike Caldwell, with the Cypherpunk project, wanted to bring in Ron Paul because we were both Ron Paul fans. I worked on his campaign in 2007, a big member of Campaign for Liberty, and we fought hard for him and to audit the Fed. Mike said, “Well, Ron Paul says only gold and silver is real money, so if I make a gold coin with a Bitcoin on it, then Ron has to come and join us.” It seemed pretty impossible that such a legendary and principled figure, who was not often changing his mind, would now become a regular member of the cryptocurrency industry and attend events and conferences. I’ve run into him at a few of them; I always still come up to him and say, “You’re the boss. You’re the only man I’ll ever work for,” good old Ron.
It’s touching to see that in the twilight of his years, he’s come to understand that the spiritual successor to the gold standard has been the cryptocurrency industry as a whole. There was a long road ahead for Bitcoin when Satoshi wrote the white paper; it was a social contract and, in many ways, a check he couldn’t cash. You can’t build a peer-to-peer money system strictly upon the nature of the Bitcoin protocol. What Bitcoin does is introduce the idea of the instantaneous movement of value with no counterparty risk, and it gives you an instrument of value, namely a Bitcoin, to move around. This is a titanic achievement, a colossal achievement because no one in human history has ever figured out how to do this in a trustless way.
But such a system, the minute we have it, begs for extra features: programmability, governance, interoperability, the ability to scale to millions and billions of people, and the ability to bridge with the legacy system. This is why future generations came and continued with the spirit of what Satoshi started to push forward. The hardest of these problems is governance because it remains the unsolved problem of humanity. We live in a world where wars happen; we live in a world where many people hate the institutions that govern us. We live in a world where we don’t feel represented.
This is no more true than when you look at the United States as an example. We have a very controversial election coming up, and depending on your political preferences, no matter what the outcome is, at least some people are going to be incredibly angry and disenfranchised and take to the streets to protest. It continues to get worse, not better, and this is because governance is hard. Once a system gets established, by design, it ought to be hard to change. The problem is the system was built for a certain group of people, a certain time, and a certain group of incentives and technology. The U.S. government was based upon a constitution written in the 18th century when torture was normal, kings were the standard, and the world operated at the speed of ships and horses.
Look at us now in the 21st century; it is an absolutely remarkable thing that our founding document, the Constitution, has been so durable in the face of so much social change—from the rise of totalitarianism to the rise of communism to the rise of the internet. Yet even that hollow document shows cracks in its foundation, which is why there’s so much strife. It also could not anticipate the rise of a monolithic party, a detente of Republicans and Democrats who have been able to basically take over the state and turn it against the many for the benefit of the few. This has happened across so many governments; in some cases, they just give up the charade and descend into one-party rule, as we’ve seen in Russia and China. In other cases, they just abstract away democracy to the point where you never really get to vote for the people who make decisions about your lives.
This is why, in a nutshell, the cryptocurrency industry exists and reached a multi-trillion dollar valuation. If there isn’t a problem, you’re not going to grow from a bunch of us nerds on Bitcoin Talk arguing about sound money to a global movement with hundreds of millions of people. It only grows because there’s a problem, and this is the antidote to it. But how and why does the cryptocurrency industry evolve and change in this way? Well, succinctly, it is the machine of trust. Blockchain technologies—the entire point of them—is to create social, economic, and political systems where people don’t have to trust each other but can act as if they do.
Let us not undervalue that; it is perhaps the single biggest advancement in governance in human history to have that capability. Because at the end of the day, our incentives are all different, our stories are all different, our cultures are different, our languages are different, our backgrounds are different. Regardless of how much we try to align with each other, there will come a time when our incentives differ, and thus we behave in opposite ways and sometimes counterproductive ways. This is no more true than when you see the core entities of Cardano. Sometimes we coordinate—Amergo, the CF, and Input Output—and other times we don’t. Good governance gives you the ability to move beyond that, broaden the picture, widen the aperture, and have tools that, despite the fact that we have different incentives and disagreements, we find a way for the greater good and for our own interest to move forward.
Voltaire is the single biggest experiment in governance in the history of our industry. We’ve taken a cryptocurrency worth more than $10 billion and millions of people who are deeply passionate, deeply different, and from more than a hundred countries, and we’ve turned it over to all of them—not just some voting mechanism, but a constitution, a representative democracy, and liquid democracy, in addition to the most sophisticated capabilities for new voting systems and new incentive systems. This, in a sense, is a self-evolving governance machine. The point of it is to start with minimum viable governance and, on a year-by-year basis, improve things at the speed of the internet, at the speed of entrepreneurship, instead of at the speed of wars and social change, which is often decades to centuries. Usually, you have to wait for the old empires to die or weaken before you get a new one. Rome lasted a thousand years.
Instead, we’re now at the speed at which the iPhone evolves. It’s never been the case in human history, which means what we’ve embarked upon here today, and for this industry and for the world as a whole, is a governance experiment that, if successful, will be as meaningful, in my view, as the American Revolution was to the world in the 18th century. It seems preposterous, but what we are doing is taking back our money, our voice, our identity, our data, and we are building the tools of democracy. We are building the tools of accountability in real time, in public—no kings, no leaders, no beneficent dictators, all as equals.
It’s a very challenging thing, and it’s a scary thing because when you lose a father, when you lose a leader, when you lose a king or a pope—someone in a position of authority whom you look up to or despise—you lose a degree of comfort. You go from reacting to and having an opinion about decisions being made on your behalf to having to make the decisions. Suddenly, you have to take the time to get informed; you have to take the time to actually make good decisions. Most importantly, you have to accept the accountability that every time you make a decision, there’s a distinct possibility that that decision will be wrong.
Over the last ten years, many of you have seen many of the decisions I’ve made, the foundation’s made, Amergo’s made, and other people in positions of power. You’ve agreed with them; you’ve disagreed with them. You’ve said, “Well, we should have done X, Y, and Z; perhaps we should have invested more in this or that. We need more marketing; we need this; that was the wrong choice; this was the right choice, but we should have done that.” These are all fair opinions to have, but now the community is 100% in the driver’s seat, and together as an ecosystem, we’re going to have to figure out the future.
I have strong opinions in many cases about the things I’d like to see, but my hands have been cuffed by structural reality and momentum. For example, my original intent with the Haskell node was to run it until 2020. I figured about five years, using a strong purely functional language and connecting it to a dependently typed language like Agda would give us the ability to understand more deeply the research we’ve done, and then we could make a decision to build a much more flexible architecture. But we got buried in many different things, and the need for new features overwhelmed the need for a new architecture or a polyglot approach, allowing a blending of many different languages. So we hybridized and did the best that we could as a coalition, and many engineers across more than 15 companies worked tirelessly to make it work.
But it’s clear to me that the path forward requires a new architecture for the future. There are a lot of great examples and a lot of great lessons to be blended with the rigor that we have. We don’t have to surrender our formal methods for this; we don’t have to surrender the lessons we’ve learned. But it would be naive of us to believe that the mission is accomplished and what we’ve written is done forever. That’s the thinking of a Bitcoin maximalist, not a person who wants to change the world. But then who decides that, and how do we go about making such a decision that benefits everybody?
There are forces right now so frustrated with the fragmentation, with the monolithic nature of the node, they’re willing to embrace full fragmentation and just simply build competing clients. That’s perfectly reasonable since people feel like they didn’t have a say or voice. Well, now they do, and there is an option for people to come together as one group in one community and figure it out, whether it be through Intersect or some other governing body. That’s for the governance of Cardano to decide. For redundancy’s sake, maybe it does make sense to have completely independent systems. We do this in the aerospace industry, but we have to accept then that it’s more expensive, it takes more time, and more effort. Furthermore, there’s a high probability that the coordination overhead means that friction will occur between the actors building things, which slows us down even further.
More broadly, we have a budget process that is now beginning. There’s already a budget committee at Intersect, and many people are discussing it. Those conversations will continue to get louder and broader, and with D’s turning on in 90 days, those D’s are going to work with the Constitutional Committee and the Budget Committee. Ultimately, they have to get to a point of a yes/no vote: should we spend X to do Y, and who gets it, and what holds those people accountable?
What I just mentioned about a new architecture, a polyglot ecosystem—the set of core developers is just one wedge in the pie. We have to have adult conversations about our brand, our reputation, and marketing. We have to have adult conversations about the ecosystem as a whole. Yes, the consequences of political elections in the United States matter. If one candidate wins, there’s a high probability that we will be entering next year into a significant bull market. If the other candidate wins, there’s a high probability we will see a bear market. One election could dramatically change the macroeconomics of the industry as a whole because of how radically different the policies are. I’m not here to judge it, but that’s a reality we have to have an adult conversation about and make decisions about as an ecosystem.
It also opens up the discussion of the de-Americanization of much of Cardano. I am an American citizen; I love my country, I love what we stand for, and I love our history and our legacy. George Washington is one of my personal heroes because of his ability to give up power. This is best exemplified by a beautiful painting that’s in the capital of the United States. But I’m the first to acknowledge that there’s a big difference between America the ideal and America that we’ve become. In many cases, it’s like Superman to Homelander, and unfortunately, that doesn’t seem like it’s going to abate in the coming future.
So I fully appreciate and understand that many people in the world want to go it alone, and they’re no longer with the United States completely. This is reflected in business more than anything else. People are starting to talk about dollarization; people are starting to talk about blacklisting all U.S. customers and not participating with the United States as a whole. The decentralization of Cardano and the de-Americanization of Cardano, the growth of the D’s in the Constitutional Committee, is a reflection of this. It now means that Cardano, like Bitcoin and many other cryptocurrencies that have achieved grand decentralization—I argue ours is the best—has the ability to make decisions about what geographies ought to be the priority.
So whether we win or lose an election, it just changes the geographies. I can imagine seeing strong growth in the cryptocurrency community in Argentina regardless of the outcome of the U.S. election, continued growth in Southeast Asia, growth in Africa, growth in Europe, growth in Asia—even places that aren’t good friends with the United States. The existence of Voltaire as an ecosystem not only gives us the freedom to pursue these ends but also voices from those places. This is no better exemplified than with the Constitutional workshops, which will elect delegates and hold the Constitutional Convention in Argentina. Workshops are being held on six continents in 50 countries, and every single person elected is equal to stand shoulder to shoulder with each other in Argentina to propose a draft constitution to be approved and ratified by an on-chain process.
It means every person in Cardano not only had a voice but was given the means to express that voice as equals. That’s a truly remarkable thing, and it’s the first time in human history anyone has done this. So as we look to that, we can leverage these lessons, these cooperations, and lifelong friendships to be able to move forward. Regardless of the outcome of elections, regardless of the macro and micro politics or economics to come, we can come together and build a budget that reflects our beliefs as an ecosystem of how we continue to grow.
We grow because we want Cardano to be in every home, to be on every phone, to be everyone’s wallet. Because Cardano, at the end of the day, in my view—and your views as well as reflected by the millions of people here who stayed here through the hard times and the good times—is an instrument of liberty. The ability to be your own bank, to have sound money, which we are because we have a deflationary monetary policy, and the ability for you to own your own identity, your own data, and to be able to program your financial future and take that at any scale—from your club to your government—is something that everybody in the 21st century should have.
We shouldn’t live in a time where we question if tomorrow is going to be a worse day than today. We should live in a time where we’re hopeful and optimistic, and we are not passive participants, as demonstrated here by the liberty that we now have through this protocol. We can take it to every single level, and the people listening—there are thousands of future leaders—and you now have the ability to participate in the budget process, to work and build things on this protocol.
There are a lot of people in this industry who like to tell you that the winners and losers have already been decided and that the flavor of the week is going to be here for a hundred years. There’s one thing that’s true about technology: the kings today are seldom the kings tomorrow. The people who have durability are the ones that have the right principles and also the right growth model. It’s not sustainable to watch something go from nothing to billions of dollars overnight and believe that that will just continue when there’s nothing there to hold it up. There are no principles; there are no utilities. Unfortunately, too much of
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