Currency and Development of Blockchain Pt. 3 crowd sourcing | Blockchain: Out of the Labs

If there's no human capital or human people to work on it.

I absolutely agree with that point. I've been talking to a lot of college students recently, different finance clubs, etc., and the thing I tell them is, if you want to get into finance, if you want to get into consulting, if you want to get into startups, this is the best opportunity that you can get in because there's such a shortage of talent, which means that there's an entire ocean of opportunities.

Exactly, and the courses and whatever is available on internet, it's everyone's— everyone talks about theory, what blockchain is. But it's high time now, like as Draper said, like we are 4 or 5 years down the line. It's high time that, you know, we should stop talking about theory, what blockchain is, but we should do investment exactly what is inside the blockchain. So yeah, it's high time now. We all should invest not only in cryptocurrency but in education of blockchain.

Absolutely agree. So there was a really interesting point that we were kind of touching on, and that is if the protocol is sufficient or things need to be added to it in order to make the network operate more efficiently, One example is that it's Bitcoin versus Ethereum. Bitcoin in and of itself is very rigid, it's very difficult to work with, and it doesn't do too many different things. So people are building layers on top. Ethereum is a bit more robust. Smart contracts are actually coded into the blockchain, which then creates outcomes based on input from it. So that was its competitive advantage for a little while now, is that smart contracts run directly from the chain. But now we're seeing Rootstock.

Rootstock.

come out, and they're going to be the smart contract enabling tool for Bitcoin. So do you think that— and I'm going to open this up to whoever wants to take it— do you think that we need a patchwork of innovation for these things to work, or do you think that we're going to find a blockchain that kind of solves everything we need to with the ability to scale?

Since I have the mic, I can answer it quickly. So yes, definitely that's the way to go, because maybe I'm not answering your question directly, but what I'm going to answer is, see, इन कमिंग डेज़ देवोंडी वन ब्लॉकचेन लेज़र, डिफरेंट पार्ट्स ऑफ़ द वर्ल्ड इस गोइंग टू डाउन डिफरेंट लेज़र। सो व्हाट वी रियली नीड इज़ वन सेंट्रल प्रोटोकॉल और वन प्रोटोकॉल जस्ट लाइक इंटरनेट प्रोटोकॉल, HTTP और www, सम प्रोटोकॉल लाइक दैट विच कैन कनेक्ट ऑल द लेज़र्स अराउंड Luckily, Lightning can enable what are called cross-chain atomic swaps.

So you can have different assets on different blockchains and in a decentralized fashion without a central intermediary, you can swap these currencies. And we're actually going to have some demos out sooner on that. But to answer your question, how many people here have heard of the DAO? D-A-O. So yeah, so sometimes I give talks at universities. I used to teach at universities. And it's a really interesting example of a scenario where there was a smart contract that was built in Ethereum last year. $170 million was raised for what was supposed to be a crowd-voting kind of venture fund where the community could vote on proposals and then invest the funds in the DAO. So a friend of mine actually asked me after they raised $170 million, it was the largest crowdfunding project in history, he says, Elizabeth, what do you think is going to happen to the DAO? And I said to him, like, did you know this was several days before it happened? I said, I think it's going to get hacked. Well, lo and behold, 48 hours later, an attacker attacked the DAO and $70 million of that was compromised. Luckily there were what were called time locks so that they couldn't withdraw it. And then the community decided to do what's called a hard fork, which is an incompatible fork where everyone has to upgrade. Ethereum ended up splitting into Ethereum and Ethereum Classic and there was all sorts of fun crypto drama. But that's all to say that Given sufficiently complex code, there is going to be bugs. And it can be very dangerous if you're going to put, say, $170 million worth of value in code that could have substantial bugs. So different protocols are designed differently. Bitcoin is intentionally supposed to be fairly limited at the low-level protocol. Think about like TCP/IP. Then layer 2 can be more complex. And then, for example, layer 3 is something that we're interested in, building more complex smart contracts that can then go down. Ethereum has gone a different route where they put a lot of complexity at the low-level protocol. I think it's really interesting, there's a lot of research that can be done there, but complexity can be the enemy of security. So I get worried when we see things like $170 million in a smart contract that is going to have bugs.

Can I just ask, just want to make one point on this DAO thing, sorry I can't help asking this thing. So see, whatever happens with DAO, So not that I'm taking any side of Ethereum, either Ethereum people are giving me any money, but it wasn't an issue of Ethereum as a base. So take it this way, if a bank which is running on internet gets hacked, it's not a problem of internet, but it's the problem who wrote the software of the bank. So in this case also, I don't think so there was any problem with the Ethereum-based protocol itself, but it was problem of Solidity, the people who designed the software of Solidity.

Quick clarification, agree, but unfortunately if you enable very complex smart contracts, then whoever designed the language, you know, you can have a lot of bugs.

So there is, really quickly, so the DAO, as they talked about, was this decentralized organization that was created. The reason that this bug existed was that the protocol was created in an open source way from the crowd. So there was about 1,000 lines of code when there only needed to be about 100. And there was a couple redundancies that people were able to, like a loophole, where they were able to put their money in and come back out. So the kind of question I want to ask is, Do you think that this open-source crowdfunding— not crowdfunding, but crowdsourcing, creating these contracts and these different opportunities— is the best way forward? Or do you think it needs to be a centralized team working on a solution, pushing it out to the general public to operate with?

I don't think there's really any advantage or disadvantage to crowdsourcing development. You want it happening in the open so that people can read the code, they can go in. You want thousands of pairs of eyes looking for bugs. before the code is released. The problem with things like the DAO and other prominent Ethereum contracts that have had issues, like ENS, is that the code wasn't sufficiently well-reviewed before being deployed.

Who said that?

In a traditional environment, you get the chance to patch out bugs after the fact. But in Ethereum, you can never do that. And, you know, I'm going to provide kind of a counterpoint to what Elizabeth was saying, is that I think of Ethereum versus Bitcoin in terms of platform complexity. If you're developing on Ethereum, it provides a simple, familiar programming interface. Solidity feels similar to JavaScript or to other C-style interfaces. And that makes it very attractive to developers. When you're building on top of Bitcoin, you try— you spend 80% of your time fighting Bitcoin Script. You have to learn a Forth-style, stack-based, reverse Polish notation language.

Yeah.

And build state machines across dozens of transactions that have dozens of possible outcomes. It's a very different experience than working with Ethereum. And even though Bitcoin is less complex at the protocol layer and more secure, and it's easier to tell exactly what things are going to do, developers are flocking to Ethereum because it provides a familiar interface. What we should be doing isn't trying to route developers into something that you need a master's and computer science to work with, we should be trying to develop standards of code review for this platform.

Well, and, you know, one interesting facet of Ethereum is it's very much a build things fast and break things mindset. So they'll build things, they'll hard fork, they will They're planning to change the entire concept of how the system is secured from proof of work to proof of stake.

Right.

And so when you're thinking about usability and creating proof of concepts, this is basically the platform that's the easiest to do this on. But you also have to take into consideration the risks of this break— breaking things and moving fast. Which is essentially, you know, if you're using Ethereum or Ether as a payment protocol or as a currency, there's a lot more risk involved because you don't know necessarily when they're going to need to do a hard fork to change the protocol, or you know that they are going to change the protocol from proof of work to proof of stake, but you're not really sure exactly how it's going to affect you. So when you're looking at smart contracts and building these proof of concepts out and doing it fast, Ethereum is the way to go. If you're looking at like a sort of live system that's holding money, lots of it, it's important to go with the more secure system as it is now. That's not to say that Ethereum won't surpass it in the future though.

Awesome.