Tag: bankless

Podcast notes: Balaji’s $1M bet on Bitcoin and the BitSignal (Bankless podcast) – “America is new Argentina”

Put up the BitSignal – pay $1M to 1000 contributors for memes and stories
Made public bet that BTC will be worth $1M USD in 90 days times

“This is the crisis Bitcoin was built for”

Sounding covid alarm in January 2020, covid hit (the US) in March

On covid
Mental chessboard in his head, if X happens, then Y, Z, etc will happen
Viruses are exponential
Background in genomics

Same frame of mind now – “we’re in the fiat crisis”
All the centralization and opacity of fiat – it’s all blowing up
Will have wrenching transition to crypto economy

RSA: “fiat fire alarm that you’re pulling”, “the all at once moment”

Exact state of world in 90 days will be very different
Not bet on Bitcoin price but on falling value of US dollar

Today USD is no longer too big to fail – there’s RMB, there’s bitcoin

Financial engineering led to house of cards, “the money is gone”
If today, all depositors withdrew money, banks can’t liquidate assets to give them enough dollars

Time bomb was growing, regulators were aware of it

“Uncle Sam Bankman Fried”

Reality: Fed Reserve gave guidance to banks to buy certain assets that then dropped in value (due to rate hikes)
Fed gets lagging data, changes single parameter, highly political process
“Fed bankrupted the banks”

“There are 333 banks where the money is gone”
Also foreign banks who bought US treasuries – global Central Banks using emergency USD swap lines
These banks’ insolvency intentionally hidden in a footnote

Now the can can’t be kicked
Holding a flaming bag of dog poop
Every crisis powers them up – failures mean they get bigger – “more failure more funding”

Do you have an alternative regulator? Don’t you want one that will tell you if your money is still there?

New era, final era – can’t hike rates anymore – printing tons of money to give to banks through BTFP, swap lines
Initially said $25B injection, now it’s up to $2T, it will effectively be infinite

All the small banks, tech banks, will get wrecked
Big banks w/ Fed help positioned as saviors – “both arsonists and firefighter”
At end, will only have 4 giant banks in US, govt rolls out CBDC – now “too big to fail banks” become “too big to escape banks” – government now has control

On other side of this – bitcoin is gold, ethereum is the financial system
Lot of people will be converted overnight into bitcoin maximalism, will be bitcoin jurisdictions

Bitcoin is ONLY thing that Fed does not directly or indirectly administer
Tradfi – Fed has root access – can stop or delist any financial product (except bitcoin / crypto)
One honest signal that they can’t fully fake is Bitcoin – which is an expression of peoples’ desire to exit the (existing financial) system
Thus Operation Chokepoint / fog of war – kill the crypto connected banks like Signature, Silvergate

Lot of fiat banks will go to zero, or become like fiat flytraps

2008 Financial crisis
Rest of world paid for it through inflation, food price spikes
Democrats effectively taxed Republicans, and foreign dollar holders, to pay for the bailout
“Cost was shunted to the invisible”

Foundational macro view is a little inflation is good, deflation is very bad
Bitcoin’s view is deflation is good if caused by Moore’s Law (technology making things cheaper), even a little inflation is bad
American Keynesianism is bad, just like Soviet economics, but it’s just less bad

David: “Bitcoin during times of war, Ethereum during times of peace”

Bitcoin will be protected by enough governments, bitcoin is well understood

“Final digital devaluation of the dollar is coming”

This is not the make money time – everyone will be a lot poorer soon
“America is new Argentina” is not a bad mental model
Dollar holder is bag holder

Many countries (like India) will become gold backed after this

David: Ray Dalio’s macro cycles, 4th turning, all lining up
There are only two banks – Fed Reserve, and Bitcoin

Bitcoin is Schelling point

Hyperbitcoinization is collapse of all fiat currencies against bitcoin
Speed of transition will be shocking, even to Bitcoin maximalists
Most empire transitions happen gradually – eg, Britain > America
Internet is next America

Powell has turned America into Argentina
People will learn you can’t trust the state

Important to understand severity of situation, take calm conscious steps to insure yourself against it
Americans are running old scripts – Powell is doing 80s formula of Volcker hiking rates

Lot of countries that trusted Fed – holding a lot of Treasuries, US dollars – the money is gone

(US citizens) paid for all the regulation but got none of the protection

Hiding bank insolvency in a footnote – it’s a corrupt regime, it’s a betrayal

Russia and China will be unleashed
Taiwan could be captured without a shot

Podcast notes – Punk 6529 on Bankless: “NFTs are generic carriers for intangible assets…intangibles are $70 TRILLION”

Why pseudonymous identity
Very intrigued by NFTs in late 2020s
Initially thought it was cute games for kids
Saw Gmoney, Punk4156 – inspired by idea

Idea behind bitcoin – provable ownership

“If you’re not sure, you should just try it”
With tech, you can’t just read about it, you gotta use it

Now he checks in and out of 2 different ecosystems – Facebook is his pre-existing / real identity life
Twitter is his NFT and crypto community – noticed it’s as easy, if not easier, to cooperate and collaborate here, didn’t expect this at first

Fact that NFTs are always visible in wallets – security flaw, but solvable (especially expensive ones, eg, Fidenza)

On bulletin boards 20 years ago — didn’t know ID of those people, just had pseudonymous handles
“It’s not weird at all — you’re all gonna do it”
People present differently online, on LinkedIn v IG v Facebook

The NFT makes the pseudonymous ID provable

RSA: “Don’t trust anyone in crypto who hasn’t used Uniswap”

“No constitutional rights without freedom to transact”

There’s a progressive erosion of freedom

One is tech intermediated —
NYC yellow cabs, pay cash, no one can stop you from using them – decentralized physical activity
Now, Uber can stop you any time for any reason

Two is post 911 AML/KYC
Cash now viewed with suspicion
Impossible to launch “cash” as a product today

End state of all this is a few large databases that intermediate everything — it’s a chokepoint, a honeypot
No thinking about second order effects
Some very ambitious politicians will take control, shut down and control large numbers of people, including their opponents
All of this runs outside of due process
Starts with good intentions, but grows and grows
Network effects which become chokepoints

Crypto’s own permissionless architecture becomes an important counterweight – Bitcoin has no CEO

RSA: there will be 2 types of money — controlled money and free money

NFTs are our best shot at achieving decentralization — that’s why he started 6529

Most of his friends are completely clueless — lots of them think he’s lost his mind about NFTs and crypto
Caught in a MLM scheme or Ponzi

What’s funnier — lots of BTC people can’t get into ETH or vice-versa, or NFTs and DeFi — “have you looked at yourself in the mirror?”

“Hardened veteran of being yelled at”

A lot of super technical crypto lovers shit on NFTs, “kid stuff”

Because crypto was too obsessed with the technology, it was clear it was pre-product market fit
NFTs changed that

You don’t buy a CryptoPunk because it’s on Ethereum

When you talk about applications instead of the tech, you’re at the beginning of consumerization
eg, Dolce Gabbana at an NFT conference!

NFTs = generic carriers for intangible assets

Many things you can do with NFTs that you can’t do with crypto, eg, personal IDs
Big companies are using NFTs, but not bitcoin / ethereum

NFTs are infinitely expressive

Metaverse is just the internet, it’s not gonna be one website
Right now you’re 2 inches tall on my laptop, but in the future you’ll be full size – visualization will improve
You’ll need persistent digital objects — NFTs!

You can survive without Twitter, but not really without email
Politicians can’t ban email — it’s a protocol
Architecture of web 1 was open, inter-operable, came out of academia (eg, email, websites)
Architecture of web 2 came out of Silicon Valley, should have been protocols but was captured by large companies

Metaverse will be your all encompassing ambient digital environment

We have moment in time, next 2-3 years – while others think this tech is a joke – we have opportunity to win a technology shift
Twitter was thought as a joke, a curiosity – 11 years later, huge debate about how POTUS uses it

BTC won’t displace state money – state has tremendously powerful tools
ETH won’t be global computing platform – it’s AWS

You can make NFTs as first amendment protected speech – there will be a Supreme Court case on first amendment grounds

NFTs are
—first mainstream crypto consumer app
—possible to get large companies using and integrating
—less threatening to the state

Intangibles on corporate balance sheets are $70T dollars – far more than gold – and many more intangibles that aren’t on balance sheets at all

NFTs can carry any arbitrary intangible on the internet

“Yes We Can” and “Make America Great” are examples of intangibles that bind humans – memes – intersubjective realities and myths

It’s the underlying fabric of society – and now we can make it composable on the internet

Podcast notes – Solana with founder Anatoly Yakovenko – Bankless: $20M valuation for Solana at seed round “was ludicrous”

Guest: Anatoly Yakovenko, Solana founder
Hosts: Ryan Sean Adams and David Hoffman

2017 – was following crypto, wanted to build a faster crypto miner
Family left Soviet Union, saw the devastation of a bad currency and economy

Ethereum demonstrated an application platform

Qualcomm, Perl engineer who helped build platform for all those original mobile games

Mining crypto while building deep learning hardware
Had a eureka moment – encode passage of time as a data structure
At that time, it existed as a “verifiable delay function”
Quit job, met Raj Gokal
Raised $3M in seed, network price at that time was $20M – “thought it was ludicrous” – included Multicoin
5 cofounders, colleagues from Qualcomm
Built single node – was doing 100K+ TPS – prove potential of network
Raised $14M Series A in the “last vapors” of the 2017-2018 market
Competitors during that time were raising $100M+ (eg, Hashgraph)

Censorship resistance is like a communication channel – it guarantees delivery

Wireless protocols create a schedule – from X time to Y time, A gets to talk, then B gets to talk, etc
Very ordered and structured, gets you 100% utilization

Tendermint – 100 validators – each has 1 vote, there’s a known block producer who proposes a block, 2/3 vote on a block

Hired a lot of coworkers from Qualcomm who he worked with for 10 years

Solana thesis – smart contracts are good for finance, and finance depends on info propagating as fast as possible around the world
Solana data can move as fast as a piece of news travels

Currently ETH validators have same bandwidth requirements
With sharding the requirements will be reduced

Trustlessness comes from full nodes that can validate

Bitcoin and Ethereum see themselves as money – what about Solana?
Store of Value is a social construct, a meme, and important not to be tied to a sovereign (a nation)
The function of a token is to prevent spam

In PoS, once all full nodes have finalized, you can’t go back – you can only fork – which is a socially messy process

Store of Value that is awesome can be built on Solana, that can surpass bitcoin

How to bootstrap an ecosystem without piggybacking off Ethereum – was a huge unknown when Solana started

2020 – had 9-10 months of cash left, market crashed, thought they might be done

It was Solana’s second hackathon (Break Point) where he really believed they had something
Quality of builders went up, attendees went up

Solana was worth ~$100M at network launch

Thinks VC branding is dumb – most of the “crypto VCs” in last cycle were simply Ethereum ICO investors

Alameda’s balance sheet leak was first time Anatoly learned about the troubles

Sam had supported Solana a lot – especially saying they’d build Serum on Solana drove a lot of defi and builder interest

Bear market is a purge

Bitcoin supporters said Ethereum was full of mercenaries in early days — same criticism that Ethereum supporters had of Solana

“Getting through this phase sucks for sure”

NFT community is very thriving — second to Ethereum – very proud of it

Exhausted by negative news — want to see wins, see people building cool shit

David: Solana is one of only blockchains after Ethereum that has a second client (Firedancer + Jump)
Anatoly: you’re trading liveness for safety; Ethereum’s goal is 4 clients (can maintain liveness if 1 client goes down)

Still focused on monolithic chain with no sharding

Innovation in next 12-18 mos will probably be more than everything that’s come before in crypto

“Pretty sure” Solana can do more TPS than all ETH L2s combined

Podcast notes – Overpriced JPEGs – guest Tim Ferriss: “Assume there’s always a market for quality in any medium — and just get fucking great”

Guest: Tim Ferriss
Host: Carly Reilly (w/ Bankless)

“The way you do anything is how you do everything”

Experimented with NFTs for last 2 years

Describes himself as writer or podcaster to unfamiliar people

Very competitive person – wants to suffer a little

Cockpunch – origin story
-Started w/ desire to be less precious about creative projects, looking for joy and fun and laughter
–Likes playing with new technology sandboxes
-Was drawing characters with gauntlets – the name Cockpunch popped into his mind
-Lets him play with 3d modeling, rigging, voice acting, music – lets him acquire skills that can be transferred to other places – vehicle for learning

AI art competition
-entrants had to show their work
-based on Cockpunch characters
-teaching himself – and then teach others

Chose fiction to let himself focus less on metrics, a “quantitative prison”

“Most people who want feedback…want positive reinforcement”

In any new space, tries to find someone with 10K foot view across many projects to get advice

Lots of folks get lost in weeds with NFTs / web3

Decided on 5555 mints – wanted to make sure it sells out

“There are a lot of whiny bitches in web3”

Likes advice of Scott Adams (Dilbert creator)
Thinks in terms of 6 month projects and 2 week experiments
Snowball of relationships and skills from project to project

Created term “Emergent Long Fiction”
Fiction lets him learn from new people
Set a few conditions upfront – a few characters, realms, drivers
There’s competitive games
But where it goes from here – he doesn’t necessarily know (hence “emergent”)

Set constraints and explore how creative you can be

Most people don’t know what they want

Hard to get clear signal when you ask a large audience what they want

Bullish on tokenized assets and digital scarcity

Been thru many cycles of tech
Always some new tool / platform that people say you have to use (eg, Vine)
“Assume there’s always a market for quality in any medium — and just get fucking great”

Web3 isn’t going away
But NFTs – he doesn’t know – it’s one of the meanest most aggressive communities

In this bear market, he’s down 70% net worth – but it doesn’t entitle him to behave like an asshole

Public perception of NFTs (in his audience) has soured tremendously – like a dirty word
But he likes to cull his audience from time to time if they don’t have patience or understanding

Cockpunch as an unlock has exceeded all his expectations – relationships, what he’s learning

Fiction doesn’t always mean a novel – it means story telling
Didn’t plan to do a Discord – it self-organized
In Discord – use your Cockpunch NFTs, with attributes – uses ChatGPT to write a match summary (blow by blow) of a cock fight
Others added music, voice commentary

// stopped taking notes after ~1 hour

Bankless podcast notes – Vitalik Buterin on Ethereum in 2023:

Discussion based on this article: https://vitalik.ca/general/2022/12/05/excited.html

2022 accomplishments:
PoW>PoS reduced energy consumption by 99%
faster, more consistent block confirmation times – every 12secs
ZkEvms – multiple implementations with mainnet launch in 2023
Sign-in with Ethereum adoption (Farcaster, Lens)
Russia invasion of Ukraine – crypto proven to be useful
Continuing adoption in LatAm (eg, Argentina)
Crypto as international payment system for philanthropy

Post-peak price is often when major innovations launch (eg, Ethereum itself, Uniswap, PoS transition)

MtGox was, in a way, FTX of first cycle – but Mark Karpeles has proven himself a responsible actor in aftermath unlike Su Zhu and Kyle
But back then, MtGox implosion felt like existential crisis for bitcoin, for legitimacy

2023 will be year of rollups, Ethereum in its “scalable era”

Crypto no longer in 0.1—>10% stage
Now it’s about 10%—>70%, requires new strategies – eg, can’t keep losing $5B in hacks

Esperanto is failure case
A constructed language in 19th c – easier to learn because simpler spelling, more regular grammar
Hope for path to world peace, everyone can speak same language
Didn’t succeed – just enthusiasts, niche community
Beautiful technical properties – but adoption went nowhere

Linux is middle case – kind of succeeded, kind of hasn’t
Linux desktop is mostly a failure – very usable but low adoption
But lots of backend adoption – eg, Android and many servers run on Linux

Internet is big success case

Will Ethereum / crypto end up as Esperanto, Linux, or the Internet?
Probably not Esperanto but possible that it’s between Linux<->Internet
Possible that adoption bifurcates between developing and developed countries

If good people are passive, the things that win will be drama queens of the world – we need to drown out the drama queens

Vitalik intentionally using the word “crypto” less and “Ethereum” more
Crypto is ungovernable commons with no barriers to entry – but just because you’re “crypto” doesn’t mean Ethereum is your partner or ally

IOTA, XRP – still completely centralized, but they’re still on Coinmarketcap
XRP wrote documents to US government accusing BTC and ETH of being China controlled

Cosmos ecosystem – deeply respect it
One of few genuinely trying something different, modularity, different design space, have a technical vision, have not been pump-and-dumpy
DH: even though Terra / Luna was built on Cosmos, no one blames Cosmos for its failure

Others Vitalik respects: Zcash, Bitcoin (decentralization ethos)

2022 lessons learned:
-crypto at its most honorable when it takes core principles seriously (decentralization, self custody, transparency)
-some apps that grew quickly tried too hard to integrate w/ mainstream, and compromised their values
-what’s succeeded: Uniswap (DEX); Rai (stablecoin); ENS
-privacy tech hit a speed bump

5 use cases that excite Vitalik:

1 – Money – charitable donations; investing in startups; crypto as frictionless international money
Even if CBDC is adopted, likely hard to use / transmit across borders
In developing world, crypto is easiest way to send money home to families, to store value
Developed world activism or industries at risk of de-platforming (eg, adult content)
Make a wallet that 1B people use

2 – Defi – most important are the most simple use cases eg, stablecoins, DEX, prediction markets (stuff that’s been around for longer)
Newer stuff is very complicated, yield farming, high APR/APY, short-term focused
4 years ago even the ponzis were more honorable; now there’s a lot more obfuscation going on
Make a stablecoin that can survive USD hyperinflation

3 – Identity – authentication; attestations; domain names; ENS; proof of personhood
Don’t think identity focused blockchains will work
RSA: Identity is emergent, a byproduct of what you’re building (eg, Facebook is useful and ID emerged, same with Google / Gmail)
ETH wallets vs PGP keys – PGP used to be strongest cypherpunk meme, now ETH wallet just works and is being adopted and is public/private key pair – possible bc big username
Standards emerge over time – eg, POAP as attestation protocol
Crypto is not just product, but also a community

4 – DAOs – set to replace things other than corporations (which are big and need the infrastructure);
Where DAO makes sense
-Quickly spin up multi-sig of 7 people
-Setup a truly decentralized org that is resistant to attacks
Less bullish on DAO as VC fund
How to setup non financial governance? How to resist 51% attack from token holders?
eg, Maker has 7B in capital (TVL), but governance token is only worth 500M mcap – could buy up token and get access to capital

5 – Hybrid apps – partially onchain; more centralized services
eg, Centralized exchanges with proof of reserve attestations, or games / social media that post occasionally to chain
DH: similar to L2s post data to L1 that forces them to play by set of rules
DH: Blockchain is a check on human folly

How do we achieve this?
-continue interacting with regulators
-give grants to enable builders working on important problems (eg, self custody wallets)

What is Vitalik’s role in 2023
Helping projects, explore app space, ETH protocol stuff, push EVM in good trajectory, connect with various ETH communities around world, helping ETH ecosystem be stable and self-supporting
Rumor that he wants to turn “gas” into “mana” – he even proposed splitting gas into several types of gas, and naming one of them mana