The Lion and the Shark: Divergent Evolution in Cryptocurrency

Good evening, everyone. This is actually
my first time at an Ethereum meetup. I've been interested and involved in
Ethereum since the very beginning. Actually, since two weeks before the beginning,
because Vitalik sent me the whitepaper. He asked me for comments, so I promptly called
him and told him exactly why it wouldn't work. [Laughter] Then he explained to me why I was wrong. As is usually the case with Vitalik, he has
this very annoying tendency of being right.

So I [became] really excited about Ethereum
and I have been involved since then. Before we start, this is my new book,
'The Internet of Money.' It was published ten days ago. My first book is 'Mastering Bitcoin,' about how
Bitcoin works and how blockchains work in general. This book is a collection of my talks
about why this technology matters. Most of the ideas apply to any open, public,
decentralized, borderless, permissionless blockchain. Whether that is Bitcoin, Ethereum, or some [others]
within the several hundred systems that exist out there.

If you are interested, I have a few copies [of the book]
with me. I will be selling and signing after the event. All right, let's get started. The title of
this talk is, "The Lion and the Shark." Some people have called me a "Bitcoin maximalist."
I am not a Bitcoin maximalist. I am interested in the possibilities of open, public,
borderless, decentralized, permissionless blockchains… in disrupting everything. I think there is plenty of space for many different
approaches to many different problems. The first questions [are]: What is Ethereum?
What is Bitcoin? How do the two compare? Let's see what Google has to say [about that]. I type into Google "Ethereum is…" and Google suggests
as the first search: "Ethereum is… dead." [Laughter] The good news is, Ethereum is not alone in that. If you type "Bitcoin is..,"
Google suggests "Bitcoin is… dead." Already, we see these two systems share one thing
in common: they are consistently underestimated. I call them 'zombie currencies.' Even after the double-tap, as you walk out of the
supermarket you just looted during the apocalypse, you hear "Grr!" behind you, because
as always the zombie refuses to die.

If you actually do the search "Ethereum is…"
you get the definition on the Ethereum website. "Ethereum is a decentralized platform for
applications that run exactly as programmed, without any chance of fraud, censorship,
or third-party interference." If you type in "Bitcoin is…" you get
Satoshi Nakamoto's whitepaper that says, "Bitcoin is a system of peer-to-peer electronic cash." Now we [must] ask, are these what they say they are? Is Ethereum, in fact, what it says it is on the website?
Is Bitcoin what it says it is in the whitepaper? By asking that question, we [come
to an] inescapable conclusion: what the founder [or creator] wants something
to be, is not always what that thing is.

That shouldn't be surprising.
That applies to every technology. The more disruptive it is, the less a founder or
inventor is able to predict what it will end up being, how it will evolve, what fitness
it will find for what applications. "The internet is…" a military network designed
to allow the continuity of data routing… in the case of a targeted, strategic,
nuclear attack against the United States.

Or, the world's largest single repository of cat videos. [Laughter] DARPA did not set out to create the world's
largest single repository of cat videos. Tim Berners-Lee designed the Web to be a
mechanism for physicists to exchange knowledge. Papers, data, and images between research institutions. Not to post photos of what they just ate, or the just-right
pouty duckface look to impress everyone in the world. Unintended consequences are part of technology.
Technology is a tool; it doesn't exist in a vacuum. It is dropped into a society and society decides how
[that tool will be used] in a very [distributed] manner. As you use the tool, you change the tool.
Your interaction with technology changes its nature. It molds to become what you want it to be. That is true of centralized technologies;
it is ten times as true of decentralized, open systems, where innovation does not require permission,
where the development is guided by consensus. It is naïve to assume that because the founder
thinks "this is what it will be," that is what it will be.

It turns out that Ethereum is not a system
of applications that run exactly as written, without third-party interference or censorship, etc. Bitcoin is not simply a system
of peer-to-peer digital cash. They evolve. The tricky thing about evolution
— even when it is directed — when you make a choice… on any feature, is that you are
constrained by two things: 1) You have no idea what the marketplace or society
will do with that choice, what path it will send you down. 2) When you make that choice,
you are always making a trade-off. If you choose one path, you close
the possibility of pursuing other paths. If you are a shark with gills, you can breathe
in salt water; you cannot breathe in open air. If you are a lion with claws, you will not
have the dexterity of primate fingers.

Every choice opens one path and closes billions
of other possibilities that could have been pursued. Even if you knew exactly where you were going,
choices have consequences. They limit things, they are inherently trade-offs. The reason I'm using the lion and the shark
as an example, is because I think that is… one way to look at these blockchain systems,
Ethereum and Bitcoin, when comparing them. If Ethereum is a shark, it is the apex
predator within its own environment. It is a fast swimmer that can breathe underwater
and eat anything that bothers it. If Bitcoin is a lion, it rules the land
but it doesn't swim very well. You can never really put these two apex predators
in a fighting ring and say, "Let the best one win!" The outcome is decided entirely by
whether you fill that ring with water or not. Fitness for purpose is something that is decided
through this evolutionary process, in a marketplace. There is no such thing as "best." In evolutionary terms, fitness does not mean
"the strongest," it means the one that has… the best adaptation for its environment.

Then the question becomes:
what is the environment for Ethereum? What is the environment for Bitcoin? What applications are the ones that are most
suited to be solved with something like Ethereum? Which applications are most suited to be [implemented]
with Bitcoin, or any other system out there? Necessarily, some choices have consequences. I'm not a maximalist because I think maximalism
is both counter-productive and hubris. It assumes that you have control over outcomes,
and the ability to foresee outcomes in the future.

I can't make predictions about what will happen in this
space three months out, because it changes too fast. What is Ethereum best suited for? Ethereum has made some very specific trade-offs;
these were not accidental, they were very deliberate. It [uses] a Turing-complete language,
which offers enormous flexibility in programming… and brings Ethereum applications
very close to the actual platform. Bitcoin is not Turing-complete. That is not an accident.
It is not Turing-complete for a very specific purpose. It is designed to be extremely limited in its flexibility,
in order to deliver very robust security. Simplicity is a fundamental security practice. If you choose to do things in a very simple
way and make them very robustly secure, you necessarily close the door on billions
of applications we've never thought of, [because you won't] have the flexibility to do [them]. If you choose to create [a more flexible design
for] those applications, you are signing up for…

A much more complex and rapid pace of development. That means many more bugs, unexpected conditions,
unpredictable and unintended consequences. One necessitates the other. Ethereum maximalists will say, "Ethereum can do everything that Bitcoin does,
except for robust security and sound money." That is okay To make that choice to do robust security
and sound money, you necessarily make it.. [more] difficult to build [complex] applications. Ethereum and Bitcoin have launched themselves
on different paths; those paths do not cross. Bitcoin cannot do things that Ethereum does.
Ethereum cannot do many things that Bitcoin does. But they can both do something miraculous: they can re-order society around network-centric
systems of organisation, instead of institutions. They can create opportunities for innovation
without permission, constructing applications… where the minimum required market
audience size is two, and that is it. If I have an app and somebody else
wants to run that app [too], we have a network. On Ethereum or Bitcoin, we can run an application.
We don't have to ask for anybody's permission. That is a magical thing. It is an amazing thing. In both cases, it is creating this exponential
explosion of innovation we have never seen.

It will affect societal structures that have remained
unchanged since the Industrial Revolution. That is the unique promise. I am not a Bitcoin maximalist,
I am not an Ethereum maximalist. I am a maximalist for open, borderless,
decentralized, permissionless systems… that help us solve problems in society with technology,
[systems] that are open for everyone. I think that is a magical recipe. It doesn't matter whether you try
to solve them in Ethereum or in Bitcoin. It doesn't matter what you think
Ethereum is or what you think Bitcion is. You don't [ultimately] decide [that alone],
Even Vitalik doesn't decide.

The market decides. If you want a system where the founder
decides, we already have those. They are called hierarchical institutions;
our society is run by them. If you want a system where there is no possibility
for evolution into uncharted territory, no possibility for change or unintended consequences,
then you appoint a dictator to make all the choices. Things are much more simple. The outcomes are predictable: economic exclusion,
human misery, poverty, and the loss of freedom. But they are predictable outcomes, however.
Some will benefit tremendously from these systems. By engaging in this particular system, signing up
to play in the sandbox of Bitcoin or Ethereum, you are saying, "I don't know what will happen." Even better, nobody else knows what will
happen, because no one is in charge. These systems have been
unleashed into a sea of creativity, where the market will decide what
applications are best [for them]. Maybe it will work, maybe it won't, but these
[systems] will fall into niche where they fit perfectly, for a very special set of applications.

We [barely] have [any] idea what these will be. Celebrate the lion, celebrate the shark.
They are both kings of their own environmental niche. Thank you. [Applause].

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