Vitalik Buterin is the co-founder of Ethereum. Please support this podcast by checking out our sponsors:
- Athletic Greens: https://athleticgreens.com/lex and use code LEX to get 1 month of fish oil
- Magic Spoon: https://magicspoon.com/lex and use code LEX to get $5 off
- Indeed: https://indeed.com/lex to get $75 credit
- Four Sigmatic: https://foursigmatic.com/lex and use code LexPod to get up to 60% off
- BetterHelp: https://betterhelp.com/lex to get 10% off

EPISODE LINKS:
Vitalik's Twitter: https://twitter.com/VitalikButerin
Vitalik's Blog: https://vitalik.ca/

PODCAST INFO:
Podcast website: https://lexfridman.com/podcast
Apple Podcasts: https://apple.co/2lwqZIr
Spotify: https://spoti.fi/2nEwCF8
RSS: https://lexfridman.com/feed/podcast/
Full episodes playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOdP_8GztsuKi9nrraNbKKp4
Clips playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOeciFP3CBCIEElOJeitOr41

OUTLINE:
0:00 - Introduction
1:19 - Shiba Inu story
18:35 - Regulation
22:48 - Crime
27:54 - Proof of stake vs proof of work
40:44 - Miner extractable value
46:20 - Scaling
47:43 - Bitcoin blocksize wars
53:51 - Hard fork vs soft fork
57:34 - Craig Wright
1:04:18 - Scaling: Sharding
1:11:07 - Scaling: Rollups
1:19:30 - Polygon and other Layer 2 technologies
1:27:11 - Merging PoS and PoW chains
1:36:49 - Lessons learned from Ethereum 2.0 failure incidents
1:45:35 - Bitcoin vs Ethereum
1:51:30 - Dogecoin
1:57:38 - Elon Musk
2:00:15 - Chainlink
2:03:35 - Charles Hoskinson and Cardano
2:11:09 - AI safety
2:16:08 - NFTs
2:18:58 - Scams
2:28:34 - Longevity
2:37:55 - Does death give meaning to life?
2:43:38 - Lex and Vitalik speak Russian
2:47:29 - Meaning of life
2:52:48 - Dan Carlin's Hardcore History and WWII

SOCIAL:
- Twitter: https://twitter.com/lexfridman
- LinkedIn: https://www.linkedin.com/in/lexfridman
- Facebook: https://www.facebook.com/lexfridman
- Instagram: https://www.instagram.com/lexfridman
- Medium: https://medium.com/@lexfridman
- Reddit: https://reddit.com/r/lexfridman
- Support on Patreon: https://www.patreon.com/lexfridman

is a conversation with Vitalik Buterin, his second time on the podcast.

Vitalik is the co-founder of Ethereum and 1 of the most influential people in cryptocurrency and technology broadly defined.

Quick mention of our sponsors, Athletic Greens, Magic Spoon, Indeed, 4 Sigmatic, and BetterHelp.

Check them out in the description to support this podcast.

As a side note, let me say that Ethereum, Bitcoin, and many other cryptocurrencies have been taking a wild ride of prices going up and down in the past few months.

To me, the prices were never as important as the ideas, both technical and philosophical.

Cryptocurrency has the potential to empower billions of people to participate in the global economy in a way that resists the manipulation by centralized power.

Also with smart contracts, layer 2 technologies, data pools, NFTs, and of course, integration of artificial intelligence into the whole thing, We have the opportunity to build tools and worlds that transform physical and digital life as we know it, hopefully minimizing the suffering in the world and maximizing the fun.

This is the Lex Friedman Podcast, And here is my conversation with Vitalik Buterin.

Let's first talk about Shiba Inu, if we can.

For context, Shiba Inu was created in August 2020, modeled off of Dogecoin by the anonymous founder known as Ryoshi.

On May 10th this year it had a market capitalization of over 13 billion and maybe you can explain this but in a crazy move you were given half of SHIB's total supply.

donated 10% that's worth 1.2 billion at the time to an India COVID-19 relief fund saying you don't want to be the locus of this much power.

Why and how were you able to walk away from this much money and this much power?

So I should probably start by giving some of the backstory around these coins and this concept of giving me coins.

So first of all, Shiba Inu, as you said, is this knockoff of Dogecoin.

And Dogecoin was this initial fun coin that was created back, I think, around 2014 or so.

And it was just created by Jackson Palmer and I put it out as a joke for a couple of hours and a community formed around it.

And at the beginning, people didn't take it very seriously.

I actually remember putting about $25, 000 into Doge sometime around

And I just remember thinking to myself, like, okay, how am I going to explain to my mom that I just invested $25, 000 into dog coins?

The only interesting thing about this coin is that there's a logo of a dog somewhere.

But of course, that ended up being 1 of the best investments I've ever made.

And then at the end of 2020, Elon Musk, of course, started talking about Dogecoin And the market cap just shot up to about $50 billion.

Actually it shot up multiple times, right?

Like the first time it went up from about 0.8 cents to about like 7 cents.

And I remember This was when I was still in Singapore in the middle of COVID and I saw that the price just went up by a thousand percent and I was like, oh my God, my doge is worth a lot.

And so I immediately called up some of my friends and told them to drop everything and scramble, and I sold half the doge.

million, donated the proceeds to GiveDirectly, and a few hours after I did this, the price dropped back down from about $0.07 to $0.04.

I managed to sell the Doge at the top and I remember just feeling like I was such an amazing trader.

But then, of course, the price went up from 4 cents, then to 7 and then 50.

And just like Doge becoming this big phenomenon where there's even a lot of people that have heard of Doge that have not heard of Ethereum.

It's just like something even I wasn't predicting.

And so after that, of course, we have Doge and then people are thinking, well, if the leading Doge token is worth $50 billion, then surely the second largest Doge token deserves at least $7 or $8 billion.

I feel like that's kind of what the mindset of these Shiba people is.

So then, of course, they did this other gimmick, right, where they gave me half the Shiba token supply.

They were actually not the first projects to do this.

So around the end of 2020, there was this weird project called Teller.

I think they're a Chainlink competitor or something like this.

But I remember they just dumped $50, 000 worth of their token into my wallet.

And then they had their Twitter RB just like basically run around saying, look, look at Vitalik's wallet.

And as soon as I discovered this, I just like publicly sold the Telver tokens on Uniswap.

And this created a bit of a Twitter splat.

The Shiba people, instead of dumping to that wallet, they dumped to my cold wallet.

So in a cryptocurrency, right, there's this concept of like cold wallets and hot wallets.

Basically, like the thing that actually owns your money is like this 80 digit number called a private key, right?

And a hot wallet is when that private key is just stored in memory on your computer, on your phone, really easy to access.

Cold wallet means it's either written down on a piece of paper or it's on a computer that's just never accessed the Internet.

So cold is very inconvenient, but cold is also much more secure, because even if that computer has some viruses on it, it's air-gapped.

It's not actually going to be able to upload it.

So this cold wallet and like all the money is out of the cold wallet.

So it's safe for me to talk about my setup now.

But it was a laptop that was sitting in Canada.

And I also had 2 pieces of paper where I wrote down 2 numbers on those 2 pieces of paper.

And if you add those 2 numbers together, you get the private key.

So because of COVID travel restrictions, and you know, this is, you know, this cold wallets in Canada, like it's very difficult for me to actually access it.

And I'm not sure if they knew this, maybe they just got lucky, but basically they sent a lot of these dog tokens into this wallet where it was very difficult for me to access it.

But then I saw these dog tokens, I saw more and more people talking about them.

And then at some point I realized that, hey, these things are worth billions of dollars.

And there's lots of really good things that you could do with that amount of money.

And it would actually be a waste to just see it go.

So I made the decision that I would actually power through and figure out how to safely basically get my private key.

I actually had to call up my family, tell them to read out their number off of their piece of paper.

I entered that into a fresh laptop that I bought from Target.

Then I put in my other number on my piece of paper, added the 2 numbers together on the computer.

And at the same time, just scrambled for 2 days, setting up a new wallet where I can move my ETH through safely, getting people to be multi-sig partners, just doing all sorts of stuff that 10 years ago you would expect to just be part of a cyberpunk science fiction novel, but now it's all real.

Right, and I needed my family to actually go and read the number on their piece of paper.

And then in my new multi-sig wallet, there's other people that are signatories.

But I'm obviously not going to reveal any details beyond that.

And I actually managed to get the private key, make the first transaction that would just move all my Ether to the multi-sig wallet so it's safe.

And then second transaction, I put the private key on my main computer, then started going in and just selling some

then just giving them to these different charities.

Now, at the time I actually did not even have any idea of how much you would be able to get, right?

Because on paper, the dog tokens are $7 billion, but in reality, it's a very liquid market.

Are you going to crash it after you sell 1 million worth?

You're going to crash it after 10 million?

Or might you actually be able to get like an entire 200 million?

So I definitely was just of the mindset like, okay, I mean, I'll sell a bit, maybe I get some ETH and then donated some ETH to give well, donated some to other groups and then, okay, have some dog tokens.

I don't have an easy ability to sell more myself, but then I'll just give them to these groups and hopefully they'll do good things with them.

So the COVID India group got 1 batch and then there's another group that got another batch.

I don't want to say who they are because I think they want to announce themselves at some point.

But you can see the fact that these transactions were made on the blockchain.

But it was just very interesting and unexpected and just an insanely crazy situation.

First of all, thank you for helping me hang up some curtains.

This is a first for the podcast and shows that you're truly a special person to be willing to help.

But now, a couple of weeks later, do you regret any aspect of that decision?

I'm sure there are some things that I probably could have done better.

I was actually talking to some of these charities and I was impressed by just how much money they managed to get out of selling some of these coins.

So I probably could have done better by just talking more with the traders and actually ensuring that they can do a better job of maximizing the value of all of them.

But it was a very stressful time and I did have to act quickly.

I did manage to make a lot of the donations a few days before the great crypto crash happened.

Obviously, there's parallel universes in which I did better, but at the same time, there's also lots of parallel universes where, because I hesitated more and tried to spend more time thinking I missed the opportunity.

So, you know, on that it's like a luck of the draw and I'm just, you know, happy that everything was able to turn out as well as it did.

But psychologically, you mentioned stress.

I think, well, 1 of the really stressful parts was just the fact that I had to basically move all of my funds, you know, including the 325, 000 Ether from 1 cold wallet into another hot wallet or sorry, into another multi-sig wallet.

And maybe the multi-sig wallet had a bug in it.

Maybe there's like some mistake I'll make in the middle that causes the funds to get lost.

And I was definitely stressing out for 2 days.

I mean, triple checking the new wallet, I even did a bit of an audit of the code myself.

I wrote my own JavaScript to DAP to make confirmations because GnosisSafe didn't work with the status wallet well.

So that whole thing was definitely a bit of a marathon.

I was also kind of definitely a bit worried about or uncertain, I guess, how the public and, you know, including the coin communities would perceive the whole thing.

Like for every poster that was saying like, no, you know, why did Vitalik rug pull on us?

His wallet was supposed to be a burn address.

There's like 10 people that were like, oh, I thought I was just in this because it's a fun pyramid gambling thing, but instead I ended up being part of this great public good thing for humanity, and that's like even more amazing.

So the amount of that that I got was very impressive.

So, all in all, I think the Doc People did great.

LRW2 Is there something you can extend to the bigger picture of it in the principles you apply to making this decision?

Is there some principles, philosophies that you apply also to the decisions you make around Ethereum?

I think a big 1 for me is just this idea that crypto, you know, isn't just an opportunity to give people slightly better ways to save value in all of these things.

It's also an opportunity to basically create these new digital institutions that could serve the public good in new ways.

And that's something that I've been interested in for a long time.

I actually even have this article in Bitcoin magazine back in 2014 where I basically suggested this idea that you would have coins that represent causes and people would just buy and accept those coins because they support those causes.

So, I think it's called markets, institutions, and currencies, a new form of social incentivization or something like that.

And I'm sure you can find it and throw it in the links.

So that was interesting to kind of see becoming real.

In general, I think public goods are very important.

On the internet, public goods are even more important.

Every single Spriedman podcast is just on YouTube and anyone can go and see it.

Like there's no way for you to like sell it and so that some people can see it but then other people can't see it.

Like you could do that but then you'd obviously be reducing your impact.

So thank you for making the amazing Lex Friedman podcast so freely available.

Well that's actually a tense thing is how do you do it in a way that's not controlled in a centralized fashion?

Because actually YouTube feels free and open, but it nevertheless is 1 company making centralized decisions.

the first time I realized YouTube was not forever is when a lot of the Joe Rogan experience library was pulled from YouTube as part of the Spotify deal.

And it made me realize we need to, it's like the realization that fiat money is centralized.

Is realizing that, you know, this is not forever and you might want to come up with schemes to distribute it, to decentralize the control of it in the way that audio for podcasts is, with just an RSS feed.

And I think 1 of the kind of philosophical things that I hope to achieve is kind of decouple the concept of public goods, which are incredibly important and are the lifeblood of modern civilization, from the idea that there is or can be 1 central organization that represents the public and perfectly understands and can impose their idea of what is the good.

When people talk about public goods, it just often comes with this baggage of either centralization or conformism.

Often the most important public goods are the ones that are created by the crazy individualists that disagree with everyone else.

So trying to make this kind of synthesis where you combine the values of decentralization and the values of open source, but you're not naive about it.

And you realize that for these things to be produced, there needs to be a way for it to be sustainable, there needs to be some way of supporting people who are working on these projects.

But at the same time, you want to avoid that turning into a vector of centralization, like trying to get all of the good things without the bad things.

To me, that's a big part of what my grand experiment in crypto is about.

We are doing different kinds of things for this.

There's the Gitcoin grants, quadratic funding in the Ethereum ecosystem.

There's obviously these dog coins that just happens, I guess, accidentally.

There's other projects that, like, for example, you know, Uniswap has their Uniswap DAO that just has a huge amount of funding.

And like we haven't seen yet how that's going to be deployed, but you know, it could be potentially deployed to do lots of really good and amazing things.

Do you see Ethereum as essentially a mechanism to fight for social causes?

I definitely see Ethereum as being a mechanism to fight for definitely some specific things that are social causes, like just the fact of creating an open financial system that anyone can participate in no matter where they are in the world.

Just giving people the ability to organize and create projects, even if it's 5 people in 5 different countries.

I think that kind of inclusiveness, I think that's a social cause and it's a core crypto value.

But then at the same time, the other important and if part of the magic of Ethereum that you have to balance that against is that it is also this open platform where ultimately the things that are on Ethereum is just the things that the community makes of it.

Well, you kind of briefly opened the door, so let's go there.

crypto, What's the best case scenario, what's the worst case scenario?

In terms of, you know, as you've kind of mentioned, Ethereum challenges the power centers of the world.

And how do you see the interplay between governments and this new technology that resists centralized power?

The best case is that, you know, blockchains continue to prosper and we figure out scalability so that people can actually start doing things on block.

Like, you know, all of the amazing use cases that people have been talking about instead of today where a lot of the great stuff gets priced out because, you know, transaction fees are at 5 to 10 dollars.

And then we see a lot of different amazing applications happening on blockchains.

It could be like DAOs creating new ways for people to interact and organize with each other, new ways for artists to get funded, and just all sorts of these amazing things.

And there's just enough public support and just enough people that see that LookCrypto is truly doing a lot of good things.

And there are definitely areas where there's tensions, but in those areas where there's tensions, there could be some kind of creative and interesting approaches that get figured out.

The concept of corporate taxes, for example, that would disappear as a revenue stream if theoretically corporations just all get replaced by DAOs.

But maybe there's some other creative way by which DAOs themselves can have some kind of encoded governance that ensures that they have at least some kind of bias towards serving the global public good.

And maybe it does enough of – DAOs can do enough of that that people are happy with it.

And there are going to be things that people are unhappy about.

There's always going to be the people that wants to surveil everyone.

But if the effect of crypto from just empowering people is greater than that and greater than that in a way that people can just easily see, then that would be a good scenario, right?

And we'll just become incorporated and accepted the same way as happened with the Internet.

But the worst case scenario would of course be just like people suddenly flipping and going into moral panic mode and just, you know, oh my God, like this technology is used by like, you know, insert bad group of the day.

And then I don't think governments have the ability to ban crypto to the extent of just preventing blockchains from existing, but they definitely have the ability to really marginalize it, right?

If you just ban all exchanges, and ban all links from the FIAT ecosystem to crypto.

And you know, you ban all kind of mainstream employers from accepting or paying in cryptocurrency, then like you can successfully like turn it into a, like, you know, a fairly kind of niche counterculture thing that has much less impact than otherwise would.

So it's somewhere between the good scenario and the bad scenario.

Well, that's interesting also the tension between governments and companies.

Like if you have a bunch of billionaires or a bunch of companies like Tesla investing in Bitcoin and then governments resisting that, it's interesting who wins out in that worst case scenario.

And almost when companies and rich, quote unquote respectable people, embrace cryptocurrencies, Bitcoin, Ethereum, so on, even the dog coins, it almost sends a signal to everybody

this is a revolution that's here to stay.

On this 1 little tangent that you brought up, this is almost an outdated idea, but it's still with us, which is cryptocurrencies are used for illegal activity, for drugs, for crime, and so on.

Is there some sense that worries you that if cryptocurrency, if Ethereum runs the world, then crime, making money from crime will be easier?

There's always that possibility, but like at the same time, I think if you look at, you know, the world as a whole and like the way all the other technological trends are going, like, you know, in-person surveillance is just going up every year, right?

Like if you commit a crime in, you know, meat space, it's getting harder and harder to get away with it.

So, if he wants to do something – and this is something that's just happening as a result of just better technology and information transparency.

A lot of it's hard to prevent even if you really tried.

So the world where like things go dark to such an extent, you know, as the 1 the police hawks sometimes like to say, to such an extent that like, you know, oh my God, the criminals are committing crimes with impunity and we can't see anything like that just seems unlikely.

But on the other hand, like the world where there just is no privacy, for example, or the world where there just is no ability to act outside of the confines of mainstream institutions.

That's something that's more realistic and that seems like something that could lead to a lot of scary things.

Even from a government's point of view, governments over the last few years, A lot of them, they're very worried about sovereignty.

They're worried about if their country's economy is in social environments, they're just completely dependent on basically foreign tech companies controlled by foreign governments.

It's like the Indian government is on team India, the Russian government is on team Russia and so forth, right?

So like, you know, they don't want the US to be able to like have this big backdoor into everything.

So I mean, I do think that a balance is needed, but at the same time, I do think, I guess I definitely worry more about the possibility that just without things like crypto, acting outside of institutions becomes too impossible.

And I don't even necessarily mean outside of governments, even just outside of corporations like becomes too impossible and there's just like terrible things that come as a result.

I mean, if things going in the other direction, like it obviously is a risk, but at the same time, I think in the longterm, like a crypto can potentially even like offer defenses as much as attacks against that sort of thing?

Yeah, throughout history, many of the most destructive things came from centralized institutions versus sort of from the people operating in the shadows.

And I've been talking to a bunch of psychedelics folks, the people doing research, like Greg Doblin, in Johns Hopkins, there's a lot of exciting research on psychedelics, and 1 thing you could say about operating at the edge of legality, it could actually accelerate the adoption of particular things, like whether it's marijuana or psychedelics, they can help people out, it almost accelerates the policy.

It forces the policy to catch up to where the people stand.

there's a positive way of doing things that are in the gray area of legality and creating a market that allows people to, in a safe way, be able to participate in this gray area of legality.

The other thing to keep in mind, of course, is that the set of the kinds of things that just like payment processors as companies try to restrict people you from is much larger than the set of things that's illegal, right?

Like part of that is because they want to be super conservative and like the more layers you have, the more they're like kids conservative because they're scared of what the layer below them will do to them.

Sometimes they have their own moral opinions of various kinds.

They make life really hard for sex workers, for example, psychedelics, as you mentioned.

There's a lot of activity, even including stuff that is totally legal.

That just, you know, there's this like, you know, shadow like PayPal, credit card, government, or whatever you want to call it.

And that makes it just hard to participate in this stuff.

So I think reducing the number of intermediaries is definitely normally a good thing.

All right, let's talk about 1 of the most exciting technologies, like technically, philosophically, like socially, financially, in every way, which is Ethereum 2.0.

There's a million things to talk about, but at the step 1, it's probably a good thing to do, which is, Can you briefly summarize your vision, how Ethereum 2.0 will make Ethereum more scalable, secure and sustainable?

See all Lex Fridman transcripts on Youtube

Vitalik Buterin: Ethereum 2.0 | Lex Fridman Podcast #188