#22: Texture, PhD - cofounding Ethereum, NFT mania, and web5

Could you guys, like, did you guys see NFTs coming, like, at all?

No, hell no, no, definitely not. We didn't see any of this stupid shit coming.

All right, welcome to another episode of Cyber Patterns. Today we have one of the co-founders of Ethereum on Anthony Donofrio. He goes by Texture PhD on Twitter. Had a lot of fun on this conversation. He was eating gummy bears the whole time. I was laughing my ass off. It was a great time. Just want to reiterate, this is separate from my work with The Defiant, and, uh, I hope you enjoy.

What's up?

No, uh, chilling, man. I'm glad we connected. Um, we were connecting over Web5. Um, yeah, and it sounds like I read through the white paper, looked through the slide deck, definitely, uh, definitely was a little confused and, uh, would love to hear your thoughts.

Yeah, so I didn't really understand what was going on with Web5 at first either, and I did not read the white paper. I skimmed some of the stuff they wrote, uh, they read. I did talk to the guy who's in charge of the decentralized identity and got a little bit of more understanding of where he's coming from. And then I watched, uh, Laura Shin's interview of Mike— that I think is the name— the lead guy. And, you know, I, I think that a lot of their criticisms have, have a point, but I don't think they grasp the value, um, proposition of crypto. Really, or Ethereum specifically, because they seem to be very pro-Bitcoin. But I think they have this kind of thing. And I've talked to a Bitcoin maximalist once in my life. A friend set up a meeting between us, and he didn't tell the guy who I was. He just said, "Oh, I have an Ethereum guy. I think you should meet." So he just thought I was somebody interested in Ethereum. And I didn't know he was a Bitcoin maximalist before I met. He just said, "Oh, I have somebody who's really smart you should meet." So I met with him and he was like, "So what do you know about Ethereum or whatever?" And I was like, "Well, I mean, I was one of the co-founders of Ethereum. Sorry, I'm eating gummy bears. I haven't had lunch yet. No worries. So then he was like, oh shit. So I think he was prepared to listen to me a little bit more just because of the context. And so he just kind of asked me questions and it I came to realize during that conversation, it was almost like a, like a political ideology or religious thing where they just get in their head that it's bullshit. And so they literally don't ever think about it. So it's kind of like, I was really liberal growing up. And so like, it's almost like you feel like if you even try to understand what a conservative thinks, that it's like bad, right? So you just never even let your mind go into a place where You try to understand them. It's probably like, again, with religion or something like that. You're Christian, you don't want to know about Buddhism. It's just you don't have any idea what it is. You have this generalized idea that what you're doing is good and what they're doing is maybe bad, and you don't want to know. I just sat him down and I said, I have this really simple model that I've used to explain what Ethereum is to people since the very early days, because I mean, in the beginning, nobody knew what it was, and you had to have a way to kind of explain it in a world that nobody even understood what Bitcoin was really. And so I would say, well, first I got to explain Bitcoin. Bitcoin's like a— like, you know what an arcade token is? So you go to the arcade and you put a dollar in the machine, then it gives you a token, and that token is representative of money, but it isn't money in the sense that it's a dollar. Right? And so Bitcoin was like the first fully digital arcade token, but no arcade. All you can do is exchange your dollar for the token. You can hand the token to someone else, they can hand the token back, they can send the token to somebody else, but you can't do anything with it. And so, you know, at the time that, that the we were talking about Ethereum, there were other projects that kind of expanded on Bitcoin and they tried to build in financial instruments and all the use cases into the protocol. They were ultimately unsuccessful, but what we did with Ethereum was we just thought, well, what if instead of trying to build an arcade— and so we're gonna, instead of us building the games that people put the tokens in, What we do is we just leave all the tools around for people to build whatever game they want, and then people can take that token and they can put it in the machine, whatever people build. And if people build a cool machine, then more people will use it, or a cool game, or whatever you want to conceptualize it as. And so that generally is something that if you walk people through, they immediately get like, oh, oh, okay. You can use it natively. You can put it in machines. You can't put Bitcoin in a machine. It's just not possible. And so you can build whatever you want. And he just went like, oh, shit. You could just see that moment of, oh, Bitcoin and Ethereum aren't the same thing. The value proposition is different because I think a lot of people that get into Bitcoin do it for ideological reasons or— If you talk to them, most of the time they're very concerned with money and gold, and they're really obsessed with the one thing that they can understand, which is something that is in limited supply has value and something that's not in limited supply has less value. So the notion that there's 21 million Bitcoin ever, they grasp Immediately, oh my God, like, it's digital thing, it's— but it's limited. Like, uh, cool, I can see how the value is only going to go up over, over a long enough timeline, so I want to get in on it. But that's it, right? That's it. That's the only thing they're interested in. They're interested in the value mechanism. They're interested in the, the, the one specific use case that is what they're interested in. So for me, I've never been interested in money. I've always thought Bitcoin was dumb. From the first moment I heard about it, I just thought it was ridiculous. Oh yeah, we invented— I mean, I called it internet nerd money distributed by lottery. Who cares? What can you do with it? You'd send it here or there, PayPal exists. We already have this problem solved. I just didn't care. Eventually, when somebody got me to finally pay attention to Bitcoin enough, and I thought it through, and I understood the mechanisms behind it, I was like, "Oh, this is still dumb, but it doesn't have to be dumb." It could be really cool if you could do more with it. And that's technically possible. It's technically possible to bootstrap a new system where you can allow people to programmatically interface with the money and build things. And so when you understand that the value proposition isn't there's a limited supply and the value, price go up, and you're not obsessed with whatever they're obsessed with, like, oh, the government's going to collapse, or hyperinflation is going to occur and we need a hedge or whatever. It's like, I mean, first of all, if there's hyperinflation and the economy collapses, like, Bitcoin ain't gonna fucking save that. I mean, I'm sorry. And we're seeing, you know, I think the first test of that now in terms of the, the rapid inflation. And like, Bitcoin's performing like shit. Like, what do you mean? Why would it not perform like shit? Like, money is valuable because you can exchange it for stuff, and Bitcoin is just like a speculative investment in an environment that is risk-off. So it's just performing like shit. It's not a— I mean, initially it was supposed to be a digital cash. It doesn't scale as that, so then they changed to a store of value. It's, it's not a store of value. It's like very volatile. It's not a hedge against inflation because inflation is occurring and the price is going to shit. I don't know. I just don't think they fundamentally grasp the value mechanism behind Ethereum, and they don't understand technically why it works. The things that they do get right is every peer-to-peer application doesn't have a place on the blockchain. It just doesn't make sense. And it is right to criticize crypto people for kind of not seeming aware of that. Like, I made a post the other day, and I think people probably think it's a joke, but it's not. I think that the foundation of peer-to-peer, peer-to-peer software should have been like Napster or like LimeWire. Something that is a distribution mechanism for peer-to-peer applications. So you have the fundamental layer that can distribute other peer-to-peer applications that you can basically use at the app store to then have instances of other peer-to-peer protocols that run on it. And Bitcoin can be one of those protocols, Ethereum can be one of those protocols, whatever different kind of things. So you can have file sharing protocols, Like, it just makes more sense that you would distribute applications that run at an application layer like that. Like, there's no reason that stuff should exist necessarily with a blockchain or within the context of a blockchain, right? It's just not necessary. Uh, and so I think that's one of their criticisms. Everything doesn't need to be on the blockchain. And yeah, cool, like the greater crypto community needs to accept that there's a greater, like, use cases that we're just totally fucking missing. Um, and then there's a ton of scams, and so everything is a scam to them and everybody's a scammer. There are a ton of scams, that's a fact, and it's an issue and it's annoying and it makes the industry shittier. But everybody's not a scammer. That's just not a fact. And the decentralized identity thing is something that's extremely important as well. And I did talk to their developer. Let me see, let me look at his name. Hopefully not too many people have messaged me and I can find it really quickly. Um, I'm on the wrong thing. So anyways, I talked to him about, you know, basically like decentralized identity is a really important thing. And to be able to have an identity that— his name is Daniel, um, @CSUWildcat on Twitter. Um, but being able to have decentralized identities allows you to have a lot of extra mechanisms on top of the blockchain. So you could have one main identity. And again, it depends on how it's implemented. So I did talk to him. He has been working on this for a long time. He worked on it with Microsoft, someone else. So he has a good understanding. They're using some form of ZK proofs so that you will be able to, let's say, have an identity and then you'll be able to get an attestation from a centralized, service, right? So you could basically, like, the DMV or something could say, like, you have a driver's license, and then you could use that attestation to, to basically utilize this zkProof system to prove I have a driver's license without exposing any other information about yourself. So, so these, these utilities are really useful because we have a bunch of, like, pseudo-anonymous and anonymous people in the industry, but reputation and trust, even in systems that we've tried to design to be trustless, is still valuable. And so these people come into the space and then they build a reputation and then they just destroy that reputation in one fell swoop because the monetary rewards are so great. It would be good if we had this kind of self-owned repository of being able to build trust and to prove that trust in a way that doesn't create second and third-order effects that are like dystopian Chinese human credit rating systems. Right? Yeah. And so that's the thing is I think everything that they're doing has value in the Ethereum ecosystem and in the crypto ecosystem. I just don't think that they grasp why what we're doing is important, right?

Yeah, that's definitely what I find. I also like— it's weird, but it comes to mind, but hasn't Jack just like not used a laptop in years or something? He only like uses his iPhone for work, and it just makes me think like— I've heard that, but I don't know. I, I don't think— I think you're right. When I talk to people who don't like understand Ethereum, it's because they haven't like used it. They haven't like spent the time to like understand it and understand what it's like to play either a blockchain game or buy an NFT or do something where ENS domains, like that's to me, like the coolest thing ever. I just type in my friend's name.eth and I could send them money without needing to like some app or I don't really need like Venmo or a centralized party. So I think, yeah, it's just people like afraid to give it a try and go for it.

Then one of the things is, if you follow my Twitter, I'm really hard on a guy named Steve Lee, who's on Twitter. His Twitter handle is @moneyball, like the movie Moneyball. I met him in San Francisco at a secret underground crypto thing that I was invited to, and I didn't know who he was at the time. And like, you know, if you just meet me casually, I seem like a fucking idiot. You know what I mean? Like I have built a personality. Like I grew up in a small town in Arkansas and I, you know, at some point you get tired of normal people staring at you like you're an alien. So it's like, I've just built a persona of being like a casual, easy to talk to dude. Like I don't, I mean, I just shoot the shit. So I don't know if he just hated me or whatever, or thought I was a moron or what happened, but we talked for a while and he followed me on Twitter. And so when I guess Square was the name at the time, Jack announced that Square was launching their crypto product, I saw who was running it and it was Steve. And I was like, "Oh, he follows me. Cool. I can message him." So I sent him a DM. I said, "Hey man, I'm really interested." I would love to help in any way I can. Just let me know. He messaged me and he said, actually, we met at this event in San Francisco and we're Bitcoin only. I was like, why? He's like, because everything else is stupid, basically. I was like, no, man, let me just chat with you guys. I'm not asking for a paycheck. I'm just interested in advancing crypto and trying to help where I can. He was just basically like, "No, no, Bitcoin only." My sense is that Jack somehow was red-pilled into Bitcoin through this guy Steve Lee, and Steve Lee is Bitcoin maximalist to his core. He does not care. About anything that isn't Bitcoin. He has passed that sentiment on to Jack, which is why when Jack talks about Bitcoin, he sounds like a Bitcoiner from 2013. He sounds like Ethereum has never happened. He sounds like none of these things. He's totally oblivious that they're actually happening. I think that's because he was indoctrinated into this notion of Bitcoin, and just has no clue what's been going on, or that we're not all scammers and that we're not all full of shit, and that we have been trying to solve the same problems. And what they don't understand is, if you go to try to solve these problems, like the way that Vitalik came to Ethereum was he was trying to advance Bitcoin's capability, and the people who were in charge of the Bitcoin protocol said, go fuck yourself. And so he said, okay, well, I mean, I guess we'll just like make another chain. Like, he wanted Bitcoin to be better. So if Jack and company think that they're going to come in and they're going to solve all these same problems, because if you read their manifestos, all they're doing is saying we're going to do what Ethereum does except for on Bitcoin. And they even say stuff like, well, those chains are owned and centralized and blah, blah, blah. So what? Jack is like a holy savior, and because he's the one that's investing in it and they're the ones doing it, now it's holy and good, and we are just the bad guys. If you're trying to solve the same problems, you're going to fucking come to similar conclusions. You're exploring the same problem space. The solution space is fundamentally dictated by the problem space. You can't just make up whatever solutions you want. If you could do that, we would've done that a long time ago, but it takes a ton of research. It takes a lot of understanding of the complexity of these systems. When people like Elon Musk or the guy from Robinhood get into Bitcoin and they're like, "All we have to do is increase the block size," you're like, "Dude, oh my God. You are really late, really late to this party because we already had these discussions and Bitcoin forked into 17 different versions of Bitcoin over this." You don't even have to argue whether or not that's true because some Some persons created bigger blocks and some did other things. And so these experiments have already been run and it's just like they come in, they survey the party and they're like, "I know how to fix it," without any sense that thousands of people have come before them, had the same level of confidence, and then just ended up in the same situation, eventually being humbled by the problems. So the same shit's going to happen to them. Sorry.

Yeah. No, that's a great way to put it. Curious, what was it like in the early days of Ethereum when you guys were trying to focus on not fixing Bitcoin, but making a better version and making it its own thing as well?

It was a shit show. I felt like it legitimately was— and I've been in startups for like a decade before that, and all startups, huge shit shows. It's just like unqualified people trying to do things way beyond their scope, you know, just because they're like in their 20s and they believe they can do anything. You know, you're like 23 and you know how to code, and like you and your bros get and you like have this world-changing idea. Dude, running a business is not easy. Running an organization is not easy. Getting people to focus on a vision is not easy. Fundraising, not easy. None of this stuff is easy. That being said, all the startups that I was with before failed because they were shit shows. They didn't make it. When I was involved with Ethereum, Huge shit show, just unbelievable, just the craziest backbiting political— So I designed the proto logo to the current Ethereum logo, and I did it while watching Game of Thrones, which I thought was really funny and really fitting because then Ethereum felt like Game of Thrones. And I feel like I only survived politically because I had a kid on the way. And I'm a very outspoken, very combative person when I think things aren't going correctly. And this is the first time in my life where I was like, ah, maybe I'll just sit on the sidelines and not get involved in the political infighting. And try to, you know, just like survive as long as possible, right? Like, because I have a kid coming and I need to make sure that I make money and survive this. So I actually ended up being in a position where everybody liked me and I didn't have any like conflicts with anyone. And so like when the red went, Except for maybe Charles, but I don't think at that time Charles knew because I thought he was like— the moment I met him, I just like, we shook hands and I was like, oh, I think this guy's a sociopath. Like, he's just not right. And so when he was ousted and the Red Wedding happened, like, everybody came to talk to me because I was the person that they felt like they could trust. So I got the perspectives of everyone on the team, and, you know, everyone basically just like, like, had the same opinion, which is like, Charles is just the dude who created a ton of chaos. And like, there's the, um, the public narrative, you know, you can read about it or whatever, like, in the books, but like, realistically, like, Charles just did some weird stuff that was unnecessary and almost threatened the existence of Ethereum. And then you have people like Anthony Di Iorio, who was an early investor, who is the type of business person, from what I've seen, who always feels like he needs to get over on someone. And so I was working 3 jobs and sleeping on my sister's, not even couch, I was sleeping on her loveseat in her one-bedroom apartment. And DiIorio told me, like, he was my point person for a long time, and he told me no one was getting paid. And I was like, okay, cool, whatever. Well, I come to find out later, like, other people weren't getting paid. He just told them Teksture didn't need to be getting paid. So, like, I had a call with him one day where he called me, and I don't remember what the call was about, but he called me and he said, "Hey Teksture, like, I need your support on something, blah, blah, blah, blah, blah," you know? And I said, "Okay, man, I don't have a problem with that." But I just found out that everyone else was, like, getting paid. And that you told people that I didn't need to get paid. And like, I'm in a tough spot right now, man, and I'm negotiating, um, I'm negotiating my salary. This is after the, the fundraise and when it had been structured as a formal organization. I said, I'm negotiating my, um, salary and my position, and I was wondering if you would, you would vouch for me and get me back pay. And he just said, oh no, absolutely not. Like, he asked me for a favor, a much bigger favor than what I would have asked him in return. And, uh, he was like, oh no, definitely not, why would I do that? And I just fucking lit him up. I was like, you're a piece of shit, fuck you, don't ever call me, you know what I mean? Like, I just like It just was a very weird time, man. That being said, that was the bad stuff. The good stuff was there was this amazing energy, this amazing sense that we were doing something important. When we first all met at the Miami house to announce Ethereum, it just felt so special. It felt like a really a moment in time, a moment in history that was really, really important. Um, and it was very cool. Um, that was the first time I met Vitalik, and he was like a 19-year-old kid at that time, and I'm like almost 30, you know. But we had all come together, and he just— I didn't see him for like hours after I first got there, and then I ran into him in the kitchen, and he's just like so quiet, like staring at his phone while like grabbing some food or something. And I'm like, Vitalik, dude, what's up? We're here. You know, I'm like excited that we're all meeting for the first time after being on a Skype group for like ever. And he's like, oh, hi. And I was like, what have you been doing? He's like, studying Chinese. And I'm like, "Cool, man. Are you excited?" He's like, "Yeah." And I'm like, "Okay. Clearly we're not going to be having any extensive conversations." But he just studied Chinese the whole time on his phone, didn't talk about anything. And then we went to the conference and then he got on stage and announced it. But yeah, it was a weird time. A lot of really exciting— exciting moments and a lot of weird political infighting and chaos.

And yeah, I mean, like, yeah, no, it seems wild. I mean, I know my, my boss at The Defiant wrote a book about it, and then, uh, the movie's getting made. But yeah, man, Charles seems to really love the spotlight of, uh, of what he's built, uh, with Cardano. Just like really relish in that shit. It was kind of strange. Um, but yeah, and then as for Vitalik, that, that's exactly how I'd imagine him. You know, I've never met him, probably never will, but that's hilarious. Like, I can't imagine he went to— was around many people a lot of the time. So like, he was probably on his laptop a lot of his younger years. So yeah, being around that many people was probably, probably tough.

Um, yeah, well, watching him grow has been amazing, and watching him really come to become what he is now. He's a lot more social. He's really continued working very hard. I think if he had a different personality, he wouldn't have been able to do what he's done. I don't personally have the emotional capacity to be personally responsible for driving a multi-billion-dollar protocol. Like I'm not built for that or the attention, right? Um, so it definitely takes a special type of person to be able to handle that. Um, and I think he's done, you know, as well as he can. Um, and, and I, I think he's a great person. Um, he's— I think that's the really good thing about him is he's, he's really a good person at his core and he's always tried to do what's right. I've never seen him do anything other than try to figure out what the right thing is to do. He kept his word on things that the average person necessarily wouldn't have. When people like Charles and other people had been promised allotments of Ether in the beginning, and then they were detrimental, everybody got what they were promised and nobody was screwed. And he always did what he, I think what he thought was right. And he never played the political games. He was definitely not comfortable in that. And it was mostly the people around him fighting and vying to get near him and to try to leverage it for power. So, and I mean, I think I know, I think he's a, he's a great person.

Yeah, yeah, I could definitely see that all going down. Um, curious what it's like, like, you know, 7, 8 years later, uh, probably. So you got an allotment of Ether, you're chilling now, or still designing and still, still making projects, or you help out Ethereum, or what are you up to?

Uh, yeah, I mean, I do, like, I accidentally launched this NFT project TexturePunks Nice. I like started as a joke to make fun of the Punks because I thought they were ugly and I thought paying $100 grand for them was stupid. So I just made like a pretty one, I thought. Like, like I grew up on the— the reason that I got into computers is because I thought the movie Hackers was cool and I thought like you can be cool and on computers, which is not true. It's not true. There's— that movie just really set me up for disappointment because like 95% of people couldn't find cool on a map if it was labeled clearly. That being said, I just kind of imagined like what if, you know, it was like the movie Hackers or something and I just designed one and then somebody asked me for one and then 20 other people asked for them. And so I just was making them in Photoshop and coming up with different attributes, and they were not an NFT. And then it got out of hand and I was wasting way too much of my time building free pictures that weren't NFTs and sending them to people. So I just thought, I'll make a— I'll hire a dev to— but at first I was going to do it myself, and I just realized I don't have the I mean, like, I just don't have the drive to sit and code anymore. And I thought it would be like just some of my followers, like a couple hundred maybe. And then we launched the Discord and 4,000 people came the first day and 8,000 people showed up the first week. And so the scope of the project kind of got out of hand. It went from being this like side project kind of thing I was doing to be nice to people to taking up a lot of my time. Aside from that, I've stayed on Twitter and I've tried to reach out to projects and help them and be a connector. I'm a vocal critic as well of things and people that I don't think are necessarily good for the space. Sometimes people agree with me and sometimes people don't agree with me. But I generally try to be a voice for good and be an authentic voice that calls out bullshit and tries to say true things and tries to be supportive of people that I think are positive in the space. So that's pretty much what I do, just kind of like shitpost on Twitter and then DM people and then Just try to be helpful generally.

Fucking goals, man. Are you, are you in New York for the convention?

Uh, not, not currently. Um, like NFT NYC? Yeah, yeah, I may or may not be there.

All right, word. I, I am in New York right now and I got press passes for the, for the, uh, conference. Kind of hype. So gonna—

oh, hell yeah, you got an extra one? Yeah, I just need to see, I just need to see what they look like. I'll just Photoshop my own, make my own credentials.

Not even, I don't, I don't think I'd get like a, maybe I'd get a real one. I just, oh really, Eventbrite, man.

But oh, that's funny. Um, yeah, I mean, I try to keep my location pretty locked down, you know what I mean?

So yeah, is there like, is there like, I, I've, I've thought, I always thought like cool movie would be like somebody like, uh, you know, chasing down some Ether millionaire, Bitcoin millionaire. Like, have you been worried about that shit?

Uh, I mean, I've had some issues, but they were resolved.

Got you.

You know what I mean? You just, you want to make sure that you, from a security perspective, are good. And you also want to make sure like you, you know, you take all the precautions that you can. I mean, a lot of people don't. But there's a lot of people who are very public figures in the crypto space who live very public lives in places. I know of some of the people that throw parties at their mansions and just let anybody show up, and they haven't really had any issues. But me personally, it's just you got to let people know. That you are not somebody to target. And that even if you were targeted, like, what are they gonna get? Like, you know what the fuck you're doing. Like, it's not like you're just sitting around waiting for someone to come take your shit. And also like hit the gym and post pictures of your rippling muscles on Twitter. So people know that they're gonna have to really brawl with you. That's fair.

That's fair. I guess one more question. Could you guys, like, did you guys see NFTs coming, like, at all?

No. Hell no. No, definitely not. We didn't see any of this stupid shit coming. When you sit around, and I mean, I feel like I've made this metaphor on like every podcast I've been on, but like, it's like if you're the person that invents a knife and you're like, Dude, I invented this knife. You can use it to like cut your food. And then you hand it to somebody and they're like, ah, and you're like, no, not like that. And then they like pull it out and they like stab somebody next to them. And you're like, oh Jesus, like what has happened? You know, it's like, you sit around and you think of like, we were very, very visionary. And I think a problem with smart people is that smart people think everyone's smart. They think, when you project out into the world, you just imagine everybody's going to think about things the way that you think about them, and they're going to use them the way that you were thinking about them. We imagine things like, oh, you could have stocks on Ethereum. You could have IPOs on Ethereum, things we didn't think. Oh, people are going to create something called ICOs, which are a way to skirt IPO regulations and it's going to be a stupider version. Like, no, I assumed we would work the regulatory stuff out calmly. And then, but no, they just were like, let's just throw $2 billion at random fucking websites that like, that was wild to me in like 2017. Like the average person didn't know how easy making a website was. And so if you got a pretty website that made promises, like you could, You could raise fucking $10 million on an ICO and then just dip. Um, and I was a huge critic of that, and I was an extra huge critic of the ones who were raising $150 million, or like EOS raised a billion dollars or whatever, laundered a billion dollars with the money or whatever the hell they did, I don't know. Um, and then no, NFTs, no, we were like you'll be able to own objects and encode them on the blockchain. So your house can be registered on the blockchain, your car can be registered on the blockchain. But we didn't think people were going to make pictures of cats and monkeys and sell them to each other for lots of money. No, we didn't see that because it's too stupid. Now I think NFTs are cooler than like DeFi personally, and cooler than— and DeFi, that like the yield farming stuff, I thought that was a stupid— like when people explained that to me, I was like, all right, explain to me what it is. And they're like, all right, so what you do is you like deposit a token, right? And then you get like a yield on it, right? And I'm like, of what? And they're like of their token. And I'm like, why? And they're like, liquidity, man. And I'm like, okay, so explain it to me again. Okay, so you put it in for the thing and they give you tokens. And I'm like, but why? Because it's like circular reasoning, right? Like, you do the thing for the thing, and then you put the thing in the thing, and then you get more of the thing, and then it makes— and it's like, but what are you doing it for? Like, Because if I go to the bank to get a loan, like when you're not using some form of circular, like you go, I go to the loan, I go get a loan at the bank so I can buy a car. I go to the bank to get a loan so I can buy a house. I don't go to the bank and give them money so they give me a bank token that I can then use to put into a different protocol that gives me a different token that I can use to put in a— you know what I mean? It's like, that's not— my brain is very rooted in cause and effect and like what's happening. So I just, it didn't register for me. And I thought ICOs were stupid. I didn't really grasp DeFi. I think we've made some progress in terms of like creating things that are less ridiculous. And a little bit more manageable. But I think the best thing about NFTs is that it makes something tangible that your average person can kind of grasp. Like, even if it's kind of ridiculous and stupid on some level, and even if it, you know, some of them become part of like a speculative mania, at the end of the day, it's something that normal people can grasp and incentivizes them to kind of learn about the space and something visual they can see. And so I think it's, it's cool, I guess. I mean, I don't, I don't sit around and buy NFTs, you know, um, but if people think it's cool and they want to, I'm fine with that. And I'm fine to make an NFT if they like it, you know. You know, I don't have a problem with that. Uh, but no, we did not see that coming. Like, even when I learned about— I mean, I— even when I first learned about NFTs, like OpenSea, I— it was, it was like the PFP thing hadn't hit, and all the artists, um, sucked. They just weren't making good art. So I still didn't grasp it then. I was like, but these are like the Like if I had opened Photoshop the first day when I learned to design, when I was like 13 years, no, maybe even younger, like 12 years, 11 years old. And I made my first piece of art. And then I was like, oh man, I am just so thrilled with myself. Look at this. You know, like, look at what I've done. I'm going to put this on the internet and I'm going to sell it to somebody. Like, that's just what it seemed like. And I was like, this is ridiculous. These people suck. This art's not even good, which continues to this day. That's how I feel about most of them. But again, I think a lot of this is just we're early, and it's groundwork, and it's going to be rolled into things that eventually you will own your house, and there will be a digital representation of it. It makes more sense. It doesn't make sense that there's— paper records everywhere, and that you have to call someone and get proof of ownership of things and hold on to a little piece of paper that says you own your car, or have a Social Security card that I lost 20 years ago, and I don't even know how to get a new one. So I think eventually, the stable functional use cases will emerge, but people just have to expand their time horizons because we have to get through all the stupid shit.

And then yeah, yeah, yeah. I posted an essay today on my newsletter and it's just called like Boring First. And it's like, we gotta— before we jump into DeFi games and AR and all that shit, let's go back to not getting hacked and all that kind of stuff, just keep it simple.

Yeah, there's a huge amount of groundwork that we've just neglected. You should be able to just— wrench attacks shouldn't be an issue. Securing crypto shouldn't be that difficult. We're just not focused on the parts that don't make a bunch of money. And it's unfortunate because that groundwork needs to be laid. And I'm a huge proponent of when you do experiments, you should do little experiments. Not big experiments. So that's a huge criticism with like DeFi. Like, we have this new protocol and we have a billion dollars TVL, and it's like, why? Why would you want to be responsible for a billion dollars in code you wrote? I've been programming my whole life, like things that I personally would not feel comfortable with would be writing code that other people put hundreds of millions of dollars in, that when there's a fucking bug in my shitty code, which there is a bug in your shitty code, 100%, there is a bug in your shitty code, that it gets locked, that it gets stolen, that something horrible happens. Like, why can't you just have a protocol with like $10 million of like $500 of each person, and then like if that works, scale up slowly over time, and like As those primitives in the code are proved to be hardened, and as they get drained of small amounts, and as you fix the bugs, then you can create more complex interrelated parts. And that's generally how you would want a system to evolve. But just because it's a global thing, we build these massive things, and then they collapse. And then we build a massive thing and then it collapses. And it's just so traumatic. And it's just like, okay, we have macro conditions that are screwing everybody in the market, but now we also have Celsius falling apart and we have Do Kwon, his bullshit falling apart all at the same time because too many people put too much money in systems with single points of failure that just collapsed. And now we have to have this cascade of pain that everyone suffers and that reflects negatively on the technology because the market just responds like shit to it. It's like, it's just, I don't know, but you can scream into the abyss, no one's going to listen.

No, and it's been the same way with When they were first figuring out gold coins and stuff, everybody was faking gold coins. And then the banks opening up in America, bank runs and bank robberies. We don't have bank robberies anymore, but we have protocol hacks. There's always issues.

[Speaker:JASON_LEVIN] And that's the thing. Anytime something like that emerges, it's like Wolf of Wall Street is like, how do you hack penny stocks? And then eventually, the regulatory frameworks emerge and the intelligence or whatever comes out and people stabilize those things. I think it's unfair for people to criticize cryptos specifically because any sort of emerging thing that has to do with money is going to be exploited. It's not necessarily an indication that the system or the technology itself is inherently flawed. But people just show up and exploit systems whenever they haven't been battle-tested. It's just, it's just a fact.

Yeah, it is unfortunate fact, but so it goes. Uh, dude, what are the chances that ENS was run by like the CIA?

ENS?

Yeah, yeah, like they're having everybody dox themselves. Seems, seems a little weird.

Uh, I don't think Nick is with the CIA. I don't even think he's American. All right, all right.

I just figured I'd ask because it's like I've got some crypto conspiracy theories in my head.

So if you want to— I mean, I think maybe Satoshi Nakamoto was the CIA, if you want to go down that rabbit hole.

Yeah, you think so?

I don't know, why not? Where is he at? I mean, that's fair. I don't know, that's, that's as fun as anyone. Um, you know, the CIA, whatever, where they put out an announcement that said that like But I don't, I mean, I don't care, you know, I don't mind. Like, what, CIA is going to do a bad job? I mean, they're going to do a, a worse job at like screwing us than we are doing ourselves through these massive protocols and stuff, you know. It's like, um, yeah, I don't know, I just think it was just a thing where like Nick or whoever and Yeah, I mean, I know the people who did it, so no, I don't think so.

Could Vitalik be Satoshi at age 14? I just imagine him playing games, coming up with some name, writing a research paper. Nobody would take him seriously because he's a 14-year-old.

That would be fun. No, definitely not. His dad got him into Bitcoin. His dad's cool as shit. Yeah. He was in the World of Warcraft and his dad was like, "Hey," I think, I mean, this is my memory, but his dad was like, "Hey, I heard of this Bitcoin thing. Maybe you'd be interested in it." And then he was. So it's hard to say who Satoshi was, but I don't think the idea that a state actor is out of the question. There's arguments to be made for— it's not like the government— let's say they had some idea for something like a CBDC or whatever the fuck. It's not like you can just bring that out of the blue. You got to do some kind of experimental thing. But I don't know. It's possible that it was just some dude who did a thing and then he dead, you know what I mean? Like something happened to him. And either way, Bitcoin exists, and because of it we've created this entire ecosystem of a place, you know, where we can experiment with new forms of value and coding and coordination, and hopefully for the better, you know. Hopefully it's the unintended consequences in the long term are lesser than the, uh, the benefits, you know. Just hopefully it's something that makes the world a better place and that empowers people and that, um, allows people to make the world, uh, just, just better. I don't know, hopefully. We'll see.

Yeah, facts. Yo, man, it's been a pleasure. I'm gonna take the dog for a walk, get some food going, but appreciate it, man.

Yeah, man. Cheers. Thanks.

All right, later.