Silvio Micali: Cryptocurrency, Blockchain, Algorand, Bitcoin & Ethereum | Lex Fridman Podcast #168

the following is a conversation with. sylvia mccauley a computer scientist at. mit. winner of the touring award and one of. the leading minds in the fields of. cryptography. information security game theory and. most recently. cryptocurrency and the theoretical. foundations. of a fully decentralized secure and. scalable blockchain and. algorand a company of cryptographers. engineers and mathematicians. that he founded in 2017. quick mention of our sponsors athletic.

greens nutrition drink. the information in-depth tech journalism. website. four sigmatic mushroom coffee and better. help. online therapy click the sponsor links. to get a discount and to support this. podcast. as a side note let me say that i will be. having many. conversations this year on the topic of. cryptocurrency. i'm reading and thinking a lot on this. topic. i just recently finished reading the. bitcoin standard. a book i highly recommend as always with.

this podcast i'm approaching it with an. open mind. with compassion with as little ego as. possible. and yes with love i hope you go along. with me on this journey. and don't judge me too harshly on any. likely missteps as usual i will play. devil's advocate. i will on purpose sometimes. ask simple even dumb questions all to. try and explore the space of ideas here. with as much grace as i can muster i.

have no financial interests here. i only have a simple curiosity and a. love for knowledge. especially about a set of technologies. that may very well. transform the fabric of human. civilization. if you enjoy this thing subscribe on. youtube review. an apple podcast follow on spotify. support. on patreon or connect with me on twitter. at lex friedman. and now here's my conversation with. silvio. mccauley let's start with the big.

and the basic question what is a. blockchain. and why is it interesting why is it. fascinating why is it powerful. all right so a blockchain think of it is. a. is really a common database distributed. think about is a ledger. in which everybody can write an entry in. a page. you can write i can write and everybody. can read. and you have a guarantee that everybody. has the same. copy of the ledger that is in front of.

you so if. whatever you see on page seven anyone. else is on page seven. so what is uh extraordinary about this. is this a common knowledge thing that i. think is a really. a first for humanity i mean if you look. at communication. like right now you can communicate very. quickly. images of thoughts or photos but do you. have a. certainty that whatever you have. received has been received by everybody.

else. and not really and so there's a. commonality of knowledge. and the certainty that everybody can. write nobody. has been prevented for having whatever. they want nobody can erase. nobody can tear a page of a ledger. nobody can swap. page nobody can change anything and uh. that is an immutable coma record is uh. extremely powerful and uh there's. something. fundamental that is decentralized about. it so at least in spirit. uh some degree against maybe a.

resistance to centralization. absolutely if it is not decentralized. how can it be common knowledge if only. one person or a few people are villager. the only way you don't have villager you. have to ask you know what is on page. seven. and how do you know that whatever they. tell you is on page seven. they tell the same thing to everybody. else and so. that is this commandant is like. extremely. powerful just uh um just to give you an.

example a sumo beta. you do an auction okay you have uh work. very hard you build a building and now. you want to auction off. make sense because uh you want to. auction. worldwide better yet you want to. tokenize the building and sell it you. know. in parcels now. everybody sees the bids and you know. that everybody sees the bids you and i. see the same and so does everybody. else. so you know that the fair price has.

reached and you know. who owns what and who has spent how much. and if you do it instead of advising on. a centralized system. i put a bid say oh congratulations alex. you won. and your prize is 12 570 dollars. how do you know so if instead there is a. common knowledge is a very powerful uh. tool for humanity so we'll return to it. from. a bunch of different perspectives. including like a technical perspective.

but. you often talk about blockchain. and some of these concepts of. decentralization. scalability security all those kinds of. things. but one of the most maybe impactful. exciting things that leverage. the blockchain this kind of ledger idea. of common knowledge is cryptocurrency. so the fight in the financial space so. is there. can you say in the same kind of basic.

way what is cryptocurrency in the. context of this common knowledge and. context of the blockchain. great cryptocurrency that is a currency. that is on such a ledger so imagine that. on vallejo right initially you know that. somehow. say you and i are the only owner each. one. let's give it our ourselves a billion uh. each or whatever this unit then i start. up. writing on the ledger i give a hundred.

of these units to my sister. you give i give this match to my end and. then. and then now because it's written on. belgium and everybody can see. my sister can give 57 of his units that. she received from me. to somebody else and so and and that is. money and that is money because. you can see that somebody who. tenders your payment has really the. money there right you don't have any. more of a doubt when you want to sell an. item. if i got your check is the check covered.

if. right or um do i have the money at the. moment of a transaction. you really see because the ledger is. always operated what you see. is what i see what the merchant sees you. know where the money so is. the most powerful money system there is. because it is totally transparent and so. you know that you have been paid. and and you know that the money is there. you have not to second guess anything. else. so the the common knowledge applied.

there is. you're basically mimicking the same kind. of thing you would get in the physical. space which is. uh if you give a hundred bucks or a. hundred of that thing whatever. of that cryptocurrency to your sister. the actual. transfer is as real as you giving like. a a a basket of apples to your sister. because that uh so in the case in the. physical space. the the common knowledge is in the. physics.

right of the atoms and then it's digital. space the common knowledge is in this. ledger. and so that transfer holds. um the same kind of power but now it's. operating in the digital space. correct again i apologize for a set of. ridiculous questions but. uh you mentioned cryptocurrencies of. money. what what is money why do we have money. do you think about this kind of from.

this high philosophical level. at times of this uh. tool this idea that we humans have all. kind of. came up with and seem to be using. effectively to do stuff. money is a social construct okay in. my opinion and this has been somehow. people always felt that somehow money. is a way to allow us to transact. even though we want to different things.

so i have. two sheep and then you have. one cow and i want the cow but uh you. are looking for blankets instead you. know. so to have money it's really simplifies. this but at the end of and that's why. a bit was invented and you started with. gold you started when the. corny edge when you started with czech. but at the end of the day. money is essentially a social construct. because. you know that what you receive you can.

actually spend with somebody else. and so there is a kind of a social pact. and social belief. that that you have at the end of the day. even a barter is of requires. um beliefs that other people are going. to accept. the quote-unquote currency you offer. them. because if i'm amazing and you asked me. to build a wall. in your field then i did and you.

in exchange you give me a thousand ship. what am i going to do eat them all. now i to feed them and if i don't feed. them they die and i. my value is zero so in receiving visa. livestock i must believe that somebody. else. will accept them in return for something. else. yeah so money is a social belief. social shared belief system that makes. people transact. that's fascinating i didn't even i. didn't even think about that that you. you're actually.

uh you have a deep like. network of beliefs about how society. operates. so the value is assigned even to sheep. based on that everyone will continue. operating how they were previously. operating yeah somebody will feed the. sheep. i didn't even i didn't even think about. that that's that's fascinating so. that directly transfers to uh. to the space of money and then to the. space of digital money cryptocurrency. okay. does it bother you sort of.

intellectually. when this money that is a social. construct is. not directly tied to physical goods like. uh. gold for example not at all because. after all gold has some. industrial value nobody delights it it's. a it's a metal. it doesn't oxidate he has some good. things about it. but uh does this industrial value really. represent. the value at which it now is trading no. so.

gold is another way to express our. belief i give you an ounce of gold. you treat her like oh somebody else will. want to miss. for doing uh something else so it is a. really. this notion of this money is a mental. construct. it's really uh and is a shared is a. social construct i really. believe and so some people feel that. it's physical so therefore gold. exists then as you know now. we countries more sophisticated.

countries right now they print their own. money. and you believe that they are not going. to exaggerate it with inflation. not everybody believes in what i'm. saying there is at least. not we are not going to exaggerate it. bludently. and uh and therefore you receive it. because you know that uh. somebody else will accept it will have. faith in the currency and so on so forth. but the weather is gold whether it is. livestock or whether whatever it is. money is really a shared belief so there.

is something. you know and i've been reading more and. more about different cryptocurrencies. there is a kind of uh belief that. the scarcity of a particular resource. like bitcoin has a. limited amount uh in its tied to. physical. you know uh to to proof of work so it's. tied to physical. reality in terms of how much you can. mine effectively. and so on that that's an important. feature of money.

do you think that's an important feature. to be a part of whatever the money is. that is certainly a very useful part so. um at some point in time you know assume. a veteran or. money something that all of a sudden we. say this is money i have a currency. then uh you know i offer you 10 days is. in payment of. whatever goods and services you want to. provide but but. at the end of the day if you know that. uh you can cultivate it and generate. them um. at will then perhaps you know you should.

not accept. my payment in uh here is a. a bouquet of basis so you need some kind. of a scarcity the inability to create a. sudden layout or nothing is uh is uh is. unimportant. and uh um it's not an. intrinsic necessity but it's much easier. to accept once you know that there is a. fixed number of units or whatever. currency there is and therefore you can.

mentally. understand i'm getting you know this. much of this piece of a pie. and therefore i consider myself paid i. understand what i'm receiving. you describe the goals of a blockchain. you have a nice presentation on this. as scalability security and. decentralization. and you challenge the blockchain. trilemma. that claims you can only have two of the. three so. let's talk about each what is. scalability in the context.

of blockchain and cryptocurrency what. does scalability mean. so remember if we said that the. blockchain. is a ledger and each page receives that. gets transaction and everybody can write. in this. in these pages of a ledger nobody can be. stopped for writing and everybody can. read them. okay scalability means how fast can you. write just. imagine that you can write an entry in. this uh. special shared ledger once every hour. well you know what you're going to do if.

you ever know one transaction per hour. the world that doesn't go around so you. need to have scalability means here that. you can somehow write a lot of. transaction. and then you can read them and everybody. can validate them. and that is the speed and and this. and the number of transactions are per. second and the fact that they are shared. so you want to have this. this uh the speed not only in writing. but in in.

sharing and uh and uh an inspection for. validity. this is scalability the world is big. the world wants to interact with the. people want to interact with each other. and you better be prepared to have a. ledger in which you can write lots and. lots and lots of. transactions in this special way very. very very quickly. so maybe from a more mathematical. perspective or. can we say something about how much. scalability is needed. for a world that is big well it really. depends.

how many transactions so you want but. remember. veteran um i i think you know i'm right. now yet to go into. at least thousands of transactions are. per second even if you look at the norm. credit cards right you know we are going. to go from. an average of 1600 to peaks over 20 000. or. 40 000 something like this but. but remember it's not only a question of. the transaction per se but. the value is that the transaction.

is actually been shared and visible to. everybody and the certainty that that is. the case. i can print them on my own printer. way more transactions but nobody has the. time to see or. to inspect that doesn't count right so. you want. scalability at this common knowledge. level that is the challenge. i also meant from a perspective of like. uh like a complexity analysis. so does it you know when you get more.

and more people involved. doesn't need to scale in some kind of. way that uh. like do you do you like to see certain. kind of properties in order to say. something is scalable. oh absolutely i took a little bit. implicitly that. the people transacting are actually very. different. so if there is a two people who can do. uh. fast and satisfaction per second with. each other this is not so interesting. what do we really need is to save. billions of people and at any point in. time you know thousands and thousands of.

them. want to transact with each other and you. want to support. that so algorand uh. it solves so that's the the the company. the team. of cryptographers mathematicians. engineers so on that challenge the. blockchain trilemma. so let's break it down in terms of. achieving scalability. how do we achieve scalability in the. space of blockchain in the space of. cryptocurrency. okay so uh scalability security remember.

and the decentralization nice so. that's what they want what's the best. way to approach can we break it down. let's start with scalability. and think about how do we achieve it. well to achieve it. one at a time is perhaps elise even. security if nobody transacts. nobody loses money so beta is secure but. it's not scalable so let me tell you i'm. a cryptographer. so i try to fight the bad guys. and what what you want is that a vessel.

ledger that we discussed before. uh cannot be tampered with so you must. think of it avetta. is a special link that nobody can erase. okay then. it has to be everybody should be able. uh to read and not to. alter the pages or the content of the. pages. that's okay but you know what that is. actually. easy cryptographically easy. cryptographical means you can use.

tools invented 50 years ago which in. cryptographic time is prehistory okay we. are. cavemen working around and solve their. problem in cryptography land. but you know but there is really a. fundamental problem which is really. almost a social seems a political. problem is to say. who the hell chooses. or publishes the next page of villager. i mean that is really the challenge this. ledger. you can always add a page because more.

transactions to be. written on there and somebody has to. assemble with. this transaction put them on a page and. under the next page. who is the somebody who chooses the page. and adds it on who can be trusted to do. it. exactly assume it is me for what i'm. being not that i want to volunteer for a. job but. then i would have more power than any. absolute monarch in history. because i would have a tremendous power. to say these are the transactions that. the entire. world should see and whatever i don't.

write. this transaction will never see the. light of day. i mean no one had any such a power in. history. so it's very important to uh to do that. and that is the quintessential problem. in a blockchain. and uh people have thought about it to. say it's not me it's not you but. for instance in uh proof of work. what people say is to say okay it's not. me it's not you you know what it is. we make a very difficult we invent an.

a cryptographic puzzle very hard to. solve the first one to solve that. as the right to add one page to the. ledger. on behalf of everybody else and that's. now is. seems okay because you know sometimes i. solve a puzzle before you do sometimes. you solve. before i do or before somebody else. somebody else solves it. it's okay and presumably the effort you. put in. is somehow correlated with how much. trust. you should be given to add to the ledger.

yeah so somehow you want to make sure. that you know you need to. work because you want to prevent you. want to make sure. that you know you get a one solution. every 10 minutes. say like in particular example of. bitcoin. so that is very rare but two pages are. added at the same time. because if i solve the puzzle at the. same time you do. you could happen that if it happens once. or twice we can survive. it but if it happens you know every.

other page you know. is a double page of when uh which of the. two is the real page it becomes a. problem. so that's why in bitcoin it is important. that to have. substantial amount of work so that no. many how many people try. on earth to solve a puzzle you have. one solution out of how many people are. trying every 10 minutes. so that you have you distantiate this. pages. and you have the time to propagate for. the network resolution.

and the page attached to it and. therefore there is one page at a time. that is added. and they say well why don't we do that. we have a solution. well first of all a page every 10. minutes. is not fast enough it's a question of. scalability. and second of all to ensure that no. matter how many people. try you get a one page generator minutes. one solution to the riddle every 10. minutes this means. that the riddle becomes very very hard.

and to to have a chance to solve it. in within 10 minutes you must have such. an expensive. apparatus in terms of specialized. computers not. one not two but thousands and thousands. of them and they produce a tons of heat. okay these. they dissipate it like maniac and you. need to refrigerate them too. and so then now you have air. conditioning uh galore. to add to the thing it becomes so. expensive. that fewer and fewer and fewer people.

can actually. compete in order to add to the page and. the problem becomes a so some. crucial vietnam in in in bitcoin um. depending on which day of the week you. look at it you are going to have. two or three mining pools are really. the ones are uh capable of controlling. the chain. so you're saying that uh that's almost. like uh. at least a centralization right it.

started being. decentralized and uh but the expenses. become. higher and higher and higher when the. cost becomes higher and higher fewer and. fewer people can afford them. and then you know it becomes you know de. facto centralized right. yeah and uh in a different type of. approach. is instead for instance a delegated. proof of stake. which is also very easy to explain. essentially boils down to to say well.

look at these 21 people say okay. don't they look honest yes they do in. fact. i believe if they're going to remain. honest for the foreseeable future so. when do we do ourselves a favor. let's entrust them to add the page. on behalf of all of us to the ledger. okay. okay but now we are going to say is this. centralized or decentralized well. 21 is better than one what to say is.

very little. so if you look at uh when people. rebelled to centralized power i don't. know the french revolutions okay. there was a monarch and the nobles yes. were there 21 nobles. no there were thousands of them but. there were millions and millions of. disempowered citizens so one is. centralized. 21 is also centralized right so that's. delegated proof of stake. delegate kind of like a representative. democracy i guess. yes which is good working great right.

there's problems there are problems yeah. and. and so we were looking for a different. uh. um when thinking about algonquin for a. different approach. and so we have a man approaching retinol. is really really decentralized because. essentially um.

it works as follows so you have a bunch. of tokens right these are the tokens. and that have equal power and you have. to say 10 billions of tokens distributed. from um. to the entire world and the owners. each token has a chance to add value. equal probability driver everybody else. in fact actually if you want here is how. it works. so think about you know by some magic. cryptographic process.

which is not magic it's mathematics but. think about the magic. assume that you select a thousand tokens. and so sometimes a random okay and you. have a guarantee that were handled. selected. and then this the owners of this 1000. tokens. somehow agree on the next page they all. sign it. and that's the next page okay. so it is clear that you know nobody has. the power but you know.

once uh up in a while one of your tokens. is selected. and you are in charge of this committee. to select the next page but this goes. around. very quickly so and if you look at this. the question really is that is not. really centralized. and because of what for for agreeing on. the same page it is important that. the 1000 tokens that you're randomly. selected. are in honest ends the majority of them.

so which if the majority of the tokens. are in honest ends that is. essentially true because if the majority. of the tokens are in honest ends. if you select say 90 percent of the. people. are 90 percent of the tokens are in. honest hands. so can you randomly select a thousand in. this thousand you find the 501. tokens in bad ends very very improbable. so. basically uh when a large fraction of.

people are honest then you can use. randomness as a powerful tool to get. decentralization. so what does honesty mean and uh now. we're. into the social side of things which is. uh. how do we know that. like the fraction a large fraction of uh. people or participating parties are. honest. that is an excellent question so by the. way first of all we should. realize that the same thing is for every.

other system when you look at proof of. work. you realize that the majority of the. mining power. is in honest hands yes when you look at. a delegated proof of stake. you realize that the majority of these. 21 people are honest. what is the difference the difference is. veta. in these other systems you soon to say. the whole economy. is secure if the majority of this. small piece of economy are honest.

and that is a big question but instead. what. in our grand in our approach we say. the whole economy is secure if the. majority of economy. is honest in other words who can subvert. all grant is not a majority of a small. group. but is a majority of the token holders. had to conspire with each other in order. to think of a very economy for which. they own the majority of yes but i think. it is a bit. harder too like a self-destructive.

majority essentially. and you're also making me realize that. basically every system that we have in. the world today. assumes that the majority of. participants is honest. yes the only difference is the majority. of whom. and in in some cases the majority of a. club and in our case is the majority of. the old system. the whole the whole system okay so. that's that's fast so through that kind. of uh random.

sampling you can achieve. decentralization. you can achieve so the scalability. i understand and then the security that. you're. referring to basically the security. comes from the fact that. the sample selected would uh likely. include honest people. so it's very difficult to so by the way. the security as you. as you mentioned that you're referring. to is basically. security against dishonesty right or.

manipulation or whatever yes. yes so essentially when what you're. going to to do is to be following and. say say well. silvio i understood what you're saying. but somebody has to randomly selected. with tokens when i believe you so then. who does this random selection that's a. good point. and uh in uh in algorithm we do. something a little bit. unorthodox essentially is. the token choose themselves. at random and you say if you think about.

it that seems to be a terrible idea. because if you want to say choose. yourself at random and whoever chooses. himself is a fuss and people committee. you choose the page for for the rest of. us. and because if i'm a bad person i'm. going to select myself. over and over again because i want to be. part of the committee every single time. but not so fast so what do we do. in algon what does it mean that i select. myself that each one of us. in the privacy of our own computer. actually a laptop.

what you do is that you execute your own. individual lottery and. uh think about that you pull a lever of. a slot machine. you can only pull the lever once not. until you win. not enough times until you win and when. you pull the lever. case one either you win in such a case. you have a winning ticket. or you lose you don't get any winning. ticket so. if you don't have a winning ticket you. can say anything you want about the next.

page in village nobody pays attention. but. if you ever winning ticket people say oh. wow this is one of the 1000 winning. tickets we better pay attention to what. he or she says. and that's how it works and the lottery. is a cryptographic lottery which means. that even if i am. an entire nation extremely powerful with. incredible computing powers i don't have. the ability to improve even minimally my. probability.

of one talking winning the lottery and. that's how it happens so everybody pulls. the lever. the 1000 random winners say oh here is. my winning. ticket and here is my opinion up or down. above the block these are the ones that. count. and if you think about it while this is. distributed because there is. in the case of argon there is a 10. billion tokens and you select a. 1000 of them more distributed than this. you cannot get.

and then why is this you know scalable. because what you have to do okay yeah to. do the lottery. how long the lottery takes it takes. actually one microsecond. whether you have one token or two tokens. or a billion tokens is always one. microsecond of computation. which is very fast we don't hit the. planet with a microsecond of computation. and and finally why is this secure. because even if i were.

a very evil and very very powerful. individual. i'm so powerful that i can corrupt. anybody i want. instantaneously in the world. whomever i want to corrupt the people in. the committee. so that i can choose the page of the. legion but i do have a problem. i do not know whom i should corrupt. should i corrupt this lady in shanghai. the sovereign guy in paris. because i don't know i should the. winners are random so i don't know whom. i should corrupt.

but once the winner come forward and say. here is my winning ticket. and you propagate your winning ticket. across the network. together with your opinion about the. block now i know who they are. for sure i can corrupt all thousands of. them given to my. incredible powers but so what whatever. they said they already said and they're. winning tickets and their opinions. are virally propagated across the. network and i do not have the power.

no more than the us government or any. government has the power. to put back in the bottle a message. virally propagated by wikileaks. so everything you've just described is. kind of it's fascinating. a set of ideas and you know online i've. been reading quite a bit and people are. really excited about a set of ideas. nevertheless it is not the. dominating technology today so bitcoin. in terms of cryptocurrency is the.

most popular uh cryptocurrency and then. ethereum. and so on so it's useful to kind of. comment we already talked about proof of. work a little bit. but what in your sense does bitcoin get. right. and where is it lacking okay so the. first thing that bitcoin got right. is to understand that there was the need. of a cryptocurrency and that my opinion. of. trumps would deserve all the success. because they said the time is ripe from.

this idea yes because very often. is not enough to be right here to be. right at the right time yes. and uh somebody got it right there so. hot off to bitcoin. for that and um and so what they got to. write. is they make that is make if it is hard. to subvert and change value to to cancel. a. transaction it's not impossible that is. very hard. what they did not get right is. somehow is a great story of value.

currency wise. but money is not only a question that. you store it. and you put under the mattress money. wants to be transacted. and the transaction in bitcoins are very. little. so if you want to store value everybody. needs a store value might as well. use a bitcoin i mean it's the brand but. if you are don't look at that for a. moment. at least is a great store of value and. everybody needs a store.

of value but most of the time we want to. transact we want to interact we don't. put the money under the markets right. so we wanted to try and bet they didn't. get it right that is. too slow to transact to too few. transactions scalability basically the. issue. is it possible to build stuff on top of. bitcoin. that's uh sort of uh fixes the. scalability. i mean this is the thing you look at. there's a bunch of technologies that. kind of. hit the right need at the right time.

and they have flaws but we kind of build. infrastructures on top of them. over time to fix it as opposed to. getting it. right from the beginning or is is it. difficult to do. well that is difficult to do so you're. talking to somebody. that when i decided to throw my heart in. the arena. and i decided first of all i as i said. before i much admire. my predecessors i mean they got it right. a lot of things and i.

and i i really am admired for that but. you know. i had a choice to make either high patch. something with other holes all over the. place or i start from scratch. i decided to start from scratch because. sometimes it's a better way so what. about. ethereum which looks at proof of stake. and a lot of different. innovative ideas that kind of improve or. seek to improve on some of the flaws of. bitcoin. etio made another great idea so they. figured out if it was. that money and payments are important as.

they are. they are only the first level the first. stepping stone. the next level are smart contracts and. they were at the vision to say. the people will need smart contract. which allow me and you to somehow to to. transact securely without being shopped. around by a trusted third party by a. mediator. by the way because the mediators are. hard to find. and in fact maybe even impossible to. find if you live in thailand and i live.

in um. in new zealand maybe we don't have a. common person that we know. and trust and even if we find them. guess what they want to be paid so much. so right that uh. six percent of the world uh gdp is. uh goes into financial friction which is. essentially third party. so the headed right of the world needed. that. but again the scalability. is not there and the system.

is of smart contracts in the is slow. and expensive and and i believe. is not enough to satisfy the appetite. and the need. we have for smart contracts well what do. you make of just as a small sort of. a side in human history perhaps it's a. big one. is the nft the non-fungible tokens do. you find those interesting technically. or is it more interesting on the social. side of things. well both i think you know i think it's.

um. nfts are actually great right so you. have always um. you're an artist to create a a song or. you could be. um a piece of art. he has many unique representation right. over. of unique uh uh a piece whether he's an. artifact of uh. uh something dream napa by you and uh. and as unique representation but now you. can trade and allow. in the important part is that now you.

have a visa. not only the nfts themselves but the. ability. to trade them quickly fast securely. knowing that who owns which rights and. that gives a totally new opportunity for. content creators to be remunerated for. what they do. so but ultimately you still have to have. that scalability security. and decentralization to to make it you. know.

to make it work for bigger and bigger. applications. correct yeah yeah i still wonder what. kind of applications are yet to be. like enabled by it because so much the. interesting thing about. nft is you know if you look outside of. art. is uh just like money you can start. playing with different social. constructs is you can start. playing with ideas you can start playing. with um.

with uh even like investing somebody was. talking about almost creating an economy. out of uh. like uh creative people or influencers. like if you start a youtube channel or. something like that. you can invest in that person and you. can start trading their creations. and then almost like create a market out. of people's ideas out of people's. creations out of. the people themselves that. generate those creations and there's a.

lot of interesting possibilities of what. you can do with that i mean it seems. ridiculous but. you're basically creating a hierarchy of. value. maybe artificial in the digital world. and are trading that but in so doing are. inspiring people to. create so maybe uh. as a sort of our economy gets better and. better and better. where actual work in the physical space. uh becomes less and less in terms of its.

importance maybe we'll completely be. operating in a digital space where. where these kinds of economies have more. and more power. and then you have to have this kind of. blockchains. to uh the scalability security and. decentralization. and decentralization is of course the. tricky one. because uh people in power start to get. nervous. absolutely once in power you always. never. be supplanted by somebody else but this.

is your job. see you congratulations you don't have a. job the top job and now everybody wants. it. well what is your sense about our our. time. and the future hope about the. decentralization. of power do you think that's something. that we can actually achieve. uh given that power corrupts and. absolute power corrupts absolutely and. it's so wonderful to be. absolutely powerful well good question.

savage. so first of all i believe by the way. there is a. um it's a complex questions uh lex um. um uh and like uh all the rest of your. questions. i'm so very sorry it's okay i am. enjoying it. so but uh so there are two things first. of all. power has been um centralized for. various reasons. when you want to get it is easier for. somebody. even a single law person to grab power.

but there is also. some kind of a technology lack thereof. that justified having power because. in a way in a society in which even. communication never. mind blockchain which is common. knowledge but even simple. unilateral communication is hard it is. much easier to say. you do as i say because the alternative. but as so there is a little bit of a. technology barrier but i think of it.

and and now to get to this common. knowledge of it is a totally different. story. now we have finally the technology for. doing this so. that is one part but i really believe. that you know not. by having a distributed system not only. you don't have a. you have actually much more stable and. durable system. because not only for corruption but even. for things that go astray and you give. it a long enough time. by stranger version of murphy's law. whatever goes wrong goes wrong.

and so and if you the power is diffused. you actually are much more stable if you. look at uh. any any living uh. complex living being is distributed i. mean um. uh i don't know if somebody is a okay. tell silvia now it's time to eat uh. right so you have millions of cells in. your body you have billions of bacteria. exactly help me in the guts everything. you know we are in a soup of it somehow. it keeps us alive yes it is uh and.

so and strange enough however when we. design systems. we designed them centralized we. ourselves are distributed beings. and when we plan and say okay i want to. create. an architecture how about i i make a. pyramid. i put west on the top and. the power flows down and um and so again. it's a. little bit perhaps of a technology. problem but now the technology is there. so that is a big challenge to rethink.

how we want to organize power. um in very large system and uh. and and and distribute the system in my. opinion are much more resilient. let's put this way there was a mine of. my. [Music]. italian competitors right you know. machiavelli who. looked at the time there was a big there. was a bunch of a small state. democratic republic of florence of. venison and the other thing. and there was the ottoman empire that at. the time was an empire and.

assad and was very centralized and he. made a political observation. that goes roughly to say whenever you. have such a centralized thing it's very. hard. to overtake but that former government. is centralized. but if you get it it's so easy to keep. the population. one instead with other uh with other. things a much. more resilient time. when the power is distributed is much. more it's going to be. lasting for much longer time and.

ultimately maybe. the human spirit wants that kind of. resilience wants that kind of. distribution. it's just that we didn't have technology. throughout history machiavelli didn't. have. the computer the internet and uh. certainly part of a reason yes you've. written an interesting blog post if we. take a step. out of the realm of bits and into this. the realm of governance you wrote a blog. post about making algorand. governance decentralized now can you.

explain what that means the philosophy. behind that. you know how how do you decentralize. basically all aspects. of this kind of system well the. philosophy. and the how let's start with the. philosophy so i really believe. that uh nothing fixed. last very long and and so i really. believe. that life is about intelligent. adaptation things change and we have to.

be nimble and adjust to change and. when i when i see a lot of of a. crypto project actually very proud to. say it's fixed in stone. um right you know code is law law is. called a verify of the code that will. never change. you go wow when i'm saying this is a. recipe to me of disaster not immediately. soon just imagine you take an ocean. liner and you want to go. i don't know from lisbon.

to new york and you set the course. iceberg no iceberg tempest not tempest. and all. it doesn't matter you keep on going but. it's not the way you need. a teal you need to correct you need to. adjust. and um and so on um by the way we design. algorithm with the idea. that the code was evolving. as the needs and of course however is a. system.

in which and every time there is an. adjustment you must have essentially a. vote. that right now is orchestrated. at 90 percent of the stake they say okay. we are ready we agree on the next. version. and we pick up this version so we are. able to evolve without. losing too many components left and. right but i think without evolving. any system essentially become aesthetic. and that is going to shrivel. and die sooner or later and and so that. is. uh is needed and what you want to do.

under the blockchain you have a. perfect platform in which you can log. your wishes your votes your thing so. that you have a guarantee that. whatever vote you express is actually. seen by everybody else. so everybody sees really the outcome or. call it of a referendum. of a change and veto is uh in my opinion. a system that wants to live long as to. adapt. there is an interesting question about. leaders i've talked to vitalik buter and.

i'll probably talk to him again soon. he's the. one of the leaders maybe one of the. faces of the ethereum project. and it's interesting you have uh uh. satoshi nakamoto who's. the face of bitcoin i guess but he's. faceless. he she they. it does seem like in our whatever it is. maybe it's 20th century. maybe it's machiavellian thinking but.

we seek leaders leaders have value linus. torvald. the leader of uh of linux. um the open source development a lot i. mean there's no. it's not it's not that the leadership is. sort of dogmatic. but it's inspiring and it's also. powerful in that through leaders. we propagate the vision like the vision. of the project is more stable. maybe not the details but the vision and.

so do you think there's value. to because we're there's a tension. between decentralization and leadership. like in visionary yes what do you make. of that attention. okay so i really believe that if it's a. another good question i think of it you. know. um i really believe in the power of. emotions i think the. emotion i have a creative impulse of. everybody else and very. very far is very easy for a leader to be. a. a physical person a real being and uh.

that interprets our emotions and by the. way. this emotion has to resonate and what is. good is that. the more intimate our emotions are the. more universal they are. paradoxically more personal the more. everybody else yes somehow magically. agrees and feels a bit the same. and so and it's very important to have a. leader in the initial phase that. generates out or nothing something that. is important leadership.

but then the true tested leadership is. to disappear after you led. the community so in my opinion the. quintessential leader. in my. according to my vision is george. washington he served for one term. for another term and then all of a. sudden he retired and became a private. citizen. and 200 and change years later. we still are we send the facts but we. have done a lot of things right.

and we have been able to evolve that to. me is success in leadership. when instead you contrast our experiment. with a lot of experiments i've done. so much so well that i want another four. years. and why shouldn't i be only a four and i. have another eight. why should be another eight give me. sixteen and we'll fix all your problem. and now then is the type in my opinion. of failed dealership. leadership ought to be really lead. ignite. and disappear and if you don't disappear.

the system is going to die. with you and it's not a good idea for of. everybody else. is there so we've been talking a little. bit about cryptocurrency but. is there spaces where this kind of. blockchain ideas that you're describing. which i find fascinating uh do you think. they can revolutionize some other. aspects of our world. that's not just money a lot of things. are going to be. revolutionized is uh is uh independent. of finance. by the way i really believe that um.

finance is uh an incredible form of. freedom i mean. if i free to do anything i want to but i. don't even mean to do anything that's a. bad idea so i really think the financial. freedom. is very very important but you know but. you just i can say that you know. against you know censorship you write. something of a chain and now nobody can. take it out you can't. take it out that is a very important way. to. express you know um. our view and um and then the.

transparency that uh. that you give because everybody can see. what's happening on the blockchain. so transparency is not money but i. believe. the transparency actually is a very. important. ingredient also of finance let's put it. this way. as much as i'm enthusiastic about. blockchain and. decentralized finance um. and we have actually our expression. we're trying to be creating with the.

future five because. as much as we want to do we must agree. that. the first guarantee of financial growth. and prosperity are really the legal. system. the courts because we may not think. about them and say oh the courts are. kind of a bunch of boring lawyers but. without them. i'm saying there is no certainty there. is no um. notion of equality there is no notion. that you can resolve your disputes. thing that's what thrives the commerce.

and things and so what i really believe. that the blockchain. actually makes a lot of this trust. essentially automatic by making it. impossible to cheat in the way you don't. even need to go to court. if nobody can change a villager right. so essentially is a way of. you cannot solve and the legal system. reduces to a blockchain. but what i'm saying a big chunk of it. can actually be. guaranteed and there is no reason why.

technology should be antagonistic. to legal scholarship it could be. actually coexisting. and one should start to doing the. interesting things that the economy. alone cannot do. and then you go from there but but i. think that is uh. essentially is uh blockchain can affect. all kinds of our yes in some sense the. transparency the required transparency. ensures honesty.

prevents corruption so there's a lot of. system that could use that and the legal. system is one of them. there is a little bit of attention that. i wonder if you can speak to. where this kind of transparency there's. a tension with privacy. is it possible to achieve privacy. if wanted on uh on a blockchain. do you have do you have ideas about. different technologies that can do that. people have been playing with different. ideas. so absolutely the answer is that yes.

and um but by the way i'm a. cryptographer. right okay so i really believe in. privacy and i believe. in and never devoted an um. a big chunk of my life to guarantee. privacy even when it seems almost. impossible to have it. and and it is possible to everything. also in the blockchain too. and however i believe in timing. as well and i believe that the people. have. the right to understand.

their system we live in and right now. um people can understand the blockchain. to be. something that is not con cannot be. altered. and is uh transparent and that is good. enough and right now. any way to add and there is a pseudo. privacy for the fact that. who knows if this keys belong publicly. belongs to me or to you.

right and i can when i want to change my. money from one public key. i split it through other public keys go. on to figure out which one is silvio. all of them are sylvia or only one of. sylvia who knows so you get some vanilla. privacy no. no not the one i created and i think. it's good enough. because and it's important for now that. we absorb the best stage. because in the next stage we must. understand the privacy tool rather than. taking on faith. when the public starts saying i believe. in the scientist and whatever they say. i swear by them and therefore if they.

tell me private is private. and nobody understands it very well we. need a much more. educated about the tools we are using. and so i look forward to deploying. more and more privacy on the blockchain. but we are not i i i will not. rush to it until the people understand. and are behind whatever we have right. now. so you build privacy on top of the power. of the blockchain you have to first.

understand. the power of the blockchain yes so. algorand. is like one of the most exciting. technically at least. from my perspective technologies ideas. in this whole space. what's the future of algon look like uh. is it possible for it to dominate the. world. let's put the best way i certainly. working very hard with a great team. to give the best blockchain that. one can demand and enjoy.

and they said i really believe that. there is going to be. it's not a winner takes them all so it's. going to be a few blockchains. and each one is going to have its own. brand and it's going to be great at. something. and sometimes is a scalability sometimes. is uh. is your views or sometimes is uh thing. and and. it's important to have a dialogue. between these things and. i'm sure and i'm working very hard to. make sure the underground is one of them.

but i don't believe of it you know he's. even uh. desirable to have you know a winner. takes all because we need to express. different things but the important thing. is going to have enough interoperability. of our systems so that you can transfer. your assets. where you have the best tool to service. them whatever your needs are at the time. so there's a idea i don't know they call. themselves. bitcoin maximalists which is essentially.

the bet that. uh the philosophy that bitcoin will. eat the world so you're talking about. it's good to have variety. their claim is it's good to have the. best technology. dominate the the medium of exchange the. the medium of. store value the money the digi you know. the. the digital currency space what's your. sense. of the positives and the negatives of.

that. so i feel people are smart and it's. going to be very hard. for anybody and to end going a man. to win and because people want more and. more things. and there is an italian saying that goes. as. translates well i think uh it goes the. appetite. grows while eating okay i think you. don't understand. what do you mean yes so i say yeah i'm. not hungry okay food. let me try so we want more and more and.

more. and when you find something like a. bitcoin which are really. very good things to say but it does. something very well. but is a static i mean store value. yes i think it's a great like. you know it would be a sad world if the. world in which we are so anchoring down. some and defensive that we want to store. value and higher than the matters. i i long for a world in which is open. people want to transact and interact.

with. which way and therefore when you want to. store value. one perhaps one chain when you want to. have a transaction maybe. is another i'm not saying that you know. when chain cannot be stored of value of. everything but i really believe. i believe in the ingenuity of people in. in the. innovation that is intrinsic to the. human nature we want always different. things so how can it be something. invented whatever it is decades ago is.

going to fulfill the needs of our future. generations. i'm not going to fulfill my needs let. alone. one of my kids or their kids. we are going to have a different world. and uh. things will evolve so you believe yeah. so you believe that. life intelligent life is ultimately. about adaptability. and evolving so static is. static loses in the end yes.

let me ask the well first the ridiculous. question. do you have any clue who's who satoshi. nakamoto is. is that even a interesting question. well is it you your question by the way. are very interesting. so and i think so i would say first of. all. it's not me okay and i can prove it. because you know. if i was satoshi nakamoto i would have. not found that algorithm. takes totally different principle to to.

approach. to the system but the other thing who is. tadashi nakamoto you know what the right. answer is. it's not him or she hair or them. satoshi nakamura is bitcoin. because to me is such a coherent proof. of work but at the end. the creator and the creation identify. themselves. so he says okay i understand the. michelangelo okay he did the resistant. chapel fine he did the way some peter's. dome. fine he did uh the the most of the pieta.

started you're fine but besides this who. was. yeah that's very wrong question is his. own work vet. is michelangelo so i think that. when you look at the bitcoin is a piece. of work. that as it defects yes like anything. human but it was. captivated the imaginations of. millions of people as subverted the. status quo. and i'm saying you know whoever.

this person or people are he's living. in this piece of work yeah i mean it is. bitcoin that's better. with my idea the work is is bigger. we forget that sometimes it's something. about our biology once. likes to see a face and attach a face to. the idea. when really the idea is the thing we. love the ideas the thing that. impact ideas the thing that ultimately. we you know steve jobs or something like. that we associate. with the mac with the iphone with just.

everything he did at apple. apple actually the company is steve jobs. steve jobs the man is. uh is uh is appalls in comparison to the. creation. and the sense of aesthetics that has. brought to the daily lives. and very often uh aesthetic wins. in the long in veron in the long game. and these are. very elegant design product and when you. say oh elegance a very few people care. about it apparently. millions and millions and millions and.

millions of people do because we are. attacked by beauty. and these are beautifully designed. products. and uh and uh and you know. and they've uh in addition to the. technological. aspect of the other thing and i think. yes that is uh. yeah as dostoyevsky said beauty will. save the world so i'm i'm with you on. that one. right it uh currently seems like. cryptocurrency all these different. technologies.

are gathering a lot of excitement. not just in our discourse but in their. like. scale financial impact a lot of. companies are starting to invest in. bitcoin. do you think that the main method. of store value and exchange. of value basically money will soon or at. some point in the century will become. cryptocurrency. yes so mind you as i said that the.

notion of cryptocurrency. like any other fundamental human notion. has to evolve. but yes so i think of it uh. he has a lot of momentum behind it. and he's not only static as of his. programmable money as a i think smart. consciousness. it allows a peer-to-peer interaction. among people who don't even know each. other right uh.

and they don't even therefore cannot. even trust each other just because. they never saw each other so i think. it's so powerful. that uh is going to do this said. again a particular cryptocurrency. should develop and cryptocurrency they. will all develop. but the answer is yes we are going. towards a much more. uh unless we have a society a sudden. crisis. for different reasons which oh there's. nobody hopes there's always an asteroid.

there's always. something uh nuclear war and all the. existential crisis that we kind of think. about including artificial intelligence. uh okay it's funny you mentioned that um. michelangelo and steve jobs you know set. of ideas represents the person's work so. we talked about. algorithm which is a super interesting. set of technologies. but you know he did also win the. touring award you have a bunch of you.

have a bunch of. ideas that are you know. seminal ideas so can we talk about. cryptography for a little bit. what is the most beautiful idea in. cryptography or computer science or. mathematics in general asking somebody. who has. explored the depths of all. well a few contenders. [Laughter]. and either your work or uh or.

what other words let's leave my work. aside yes. and uh and uh so but one powerful. idea and is a both an old idea. in some sense and a very very modern one. and in my opinion is this idea of a. one-way function. so a function that easy. to evaluate so given x you can compute f. of x.

easily but given f of x. is very hard to go back to x okay. think like breaking a glass. easy reconstruct the glass hard. frying an egg easy for the side egg. to go back to your original leg hard. if you want to be extreme killing a. living being. unfortunately easy the other way around. very hard. and so the fact that the notion of a.

function which you have a recipe that is. in front of your eyes to transform an x. into. f of x and then from f of x even though. you see the recipe to transform it. you cannot go back to x that in my. opinion is one of the most. elegant and momentous. notions that there are and is a. computational notion because of the. difficulties in a computational sense. and it's a mathematical notion because. we were talking about function.

and is so fruitful because that is. actually the foundation of all the. cryptography. and let me tell you is an old notion. because very often in any mythology. that we think of the most powerful gods. or goddesses. are the ones of x and the opposite of x. the gods of love and death and when you. take. opposites they don't just you know. erase one another you create something.

way more powerful. and this one-way function is extremely. powerful because essentially becomes. something that is easy for the good guys. and bad. for the but hard for the bad guys. so for reason in pseudorandom number. generation. the easy part of the function. corresponds you want to generate bits. very quickly. and hard is predicting what the next bit. is. it says geo it doesn't look the same one.

is x f of x. going from x for x to x r let us do. predicting bits. by a magic of reductions in mathematical. apparatus this simple function. morphs itself into pseudogenomic. generation this is simple function. morphs in cells in digital signature. scheme. in which digitally signing should be. easy and forging should be hard. again a digital signature is not going. from x to f. x but the magic and the richness of this.

notion is meant that. it is so powerful it morphs. in all kinds of incredible constructs. and uh in both these two opposites. coexist. the easy and the hard and in my opinion. is a very very elegant notion so. that simple notion ties together. cryptography. like you said pseudo-random number. generation. you have work on pseudo-random functions.

what are those what. uh what's the difference in those and. the generators. should run random number generators okay. let's start how do they work. let's uh let's go back to pseudogana. number generation. yes first of all people think of the. surrogate moderation generates a random. number not true. because i don't believe that uh from. nothing you can get. you can you can get uh something. so nothing for nothing but the.

randomness you cannot create out on. nothing but what you can do. is that you click it can be expanded so. in other words. if you give me somehow 300 random bits. truly random bits. then i can give you 300 300 million 300. trillions 300 quadrillions as. many as you want random beats soviet. even though i tell you the recipe by. which i produce these beats. but i don't tell you the initial 300. random numbers i keep them secret.

and you see all the bits i produce so. far. if i if you were to bet given all the. bits produced so far. what is the next bit in my sequence. better than 50 50. of course 50 50 anybody can guess right. but to be. inferring something you have to be a bit. better then. the effort to to do this extra bit. is so enormous that is the fact of. random. so that is a sort of random generator. are these expanders.

of secret randomness which goes. extremely. fast okay let's say what's the standards. of secret randomness. beautifully put okay so every time every. time somebody who if you're a programmer. is using a function. that's not called pseudorandom it's. called random usually you know these. programming languages and it's. generating different. uh that's essentially expanding the. secret. randomness but they should and in the. past actually most of the library they.

used. something pre-modern cryptography. unfortunately they'll be better served. to take. 300 uh real seed random number. and uh and then expand them properly as. we know now. uh but met has been a very. old idea in fact one of the um best. philosophers have debated. the wave of the world was deterministic. or probabilistic.

very big questions right does god play. dice. exactly einstein says it does it doesn't. but in fact now we have a language that. even. at the alberta time was not around but. it was this complexity of a modern. complexity-based cryptography and now we. know that. in the universe has 300 random beats. whether there is random or probabilistic. or. deterministic it doesn't matter because. you can expand. this initial seed of randomness forever.

in which. all the experiments you could do all the. inferences you could do all the things. you could do. there you would not be able to. distinguish them from truly random. so if you are not able to distinguish. truly random. from this super duper pseudo randomness. are the really different things that's. what i say so many. to become really philosophical so for. things to be different but i don't have. in my lifetime in my lifetime of the. universe any method.

to set them aside well i should be. intellectually honest to say well. pseudorandom investment satisfaction is. as good as random. do you think true randomness is. possible and what does that mean. so i practically speaking exactly as you. said if you're being honest. the the the pseudo randomness approaches. through randomness pretty quickly. but is it is it uh maybe is this a.

philosophical question is there such a. thing as true randomness. well the answer is actually maybe but if. there. exists most probably is. expensive to get and uh. and uh and in any case if i give you one. of mine. um you'll never tell them apart. yeah but not any other shape no matter. how much you work on it so in some sense. if it exists or not it really is a quote.

philosophical sense in the. um colloquial way to say that we cannot. uh. somehow pin it down do you ever again. just. stay on philosophical for a bit for a. brief moment. do you ever think about free will and. uh whether that exists because. ultimately. free will sort of is this experience. that we have like we're making choices. even though it appears that.

you know the world is deterministic at. the core i mean. it's against the debate but if it is in. fact deterministic at the lowest. possible level. uh at the at the physics level. uh how do you make if if it is. deterministic how do you make uh. how do you make sense of the difference. between the experience of us. feeling like we're making a choice and. the whole thing being deterministic. so first of all let me give you a gut. reaction yeah to my question. and a gut reaction is that.

it is important that we believe that. there exists free will and second of all. almost uh by weird logic. if we believe it exists then it does. exist okay. yeah so it's very important for our. social. apparatus for our sense sensibility of. ourselves. that it exists and the moment in which. you know we. we so want to be almost we conjure it up. in existence. but again i really feel that if you look.

at some point. and the space of free will seems to. shrink. we realize how more and more how much of. our. say genetic apparatus dictates who we. are why we prefer. certain things than others right and why. we react to noises of music. we prefer poetry of everything else we. may explain even always. but uh but at the end of the day whether. it.

exists in a philosophical sense or not. it's like randomness if you can. pseudorandom is as good as random. vis-a-vis. lifetime of the universe our experience. when does it really matter. yeah so you know we're talking about. randomness i wonder if i can weave in. quantum mechanics. for a brief moment there's a. you know a lot of advancements on the. quantum computing side. so leveraging quantum mechanics to.

perform a new kind of computation. and there's concern of that being a. threat. to a lot of the basic assumptions that. underlie cryptography. what do you think do you think quantum. computing will challenge. a lot of cryptography will cryptography. be able to defend. all those kinds of things okay great so. first of all. foreign because i think it matters but. it's important. that there are people who continue to.

contend. that quantum mechanics exist but has. nothing to do with computing is not. going to accelerate it. and at least you know. very basic and um are the computation. that is a belief that you cannot uh take. it out. i'm a little bit uh more agnostic about. it but i really believe. going back to whatever i said about the. the one-way function. so one way function what is it what is a.

cryptography. so does quantum computing challenge the. one. function essentially you can boil it. down to does one computing find one way. function what is one way function. easy in one direction other than the. other. okay but if quantum computing exists. when you define what it is easy. it's not by easy by a classical computer. and art by a classical computer but is. it for for a quantum computer that's a. bad idea. but once easy means it should be easy. for a quantum.

and hard for also quantum then you can. see that. you are yes is a challenge but you have. hope because you can absorb. if one computing really realizes and. becomes available. and according to the promises then you. can use them also for the easy part. and once you use it from the easy part. the. choices that you have a one-way function. they multiply so okay. so the particular candidates of one-way. function.

may not be one way anymore. but quantum one-way function may. continue to exist. and so i really believe that. for uh life to be meaningful. with one way function had to exist. because. just imagine that anything that is. becomes easy to to do i mean what kind. of life is it. i mean so you need that and if something.

is hard but it's so hard to generate. you'll never find something which is. hard for you you want but there is. abundance if it is easy to produce. heart problem what's in my opinion is. why life is interesting. because art form pop up another really. relatable speed so in some sense i. almost think that. i do hope they exist if they don't exist. somehow life is. way less interesting than uh it actually. is yeah it does.

that's funny it does seem like the. one-way function is fundamental to all. of life which is the the emergence of. the complexity that we see around us. seem to require the one-way function. i don't know if you uh play with. cellular automata. that's just another formulation of i. know but yeah it's a. very simple it's almost a very simple. illustration of. starting out with simple rules and. one way being able to generate.

incredible. amounts of complexity but then you ask. the question can i reverse that. then it's just it's just a surprising. how difficult it is to reverse that. it's surprising even in constrained. situations it's. very difficult to prove anything uh that. it almost i mean the sad thing about it. well i don't know if it's sad but it. seems like we don't even have the. mathematical tools.

to reverse engineer stuff i don't know. if they exist or not. but in the space of cellular automata. where you start with something simple. and you create something incredibly. complex. can you take something a small picture. of that complex. and reverse engineer that's kind of what. we're doing as scientists. here you're seeing the result of the. complexity and you're trying to come up. with some. universal law that generate all of this. what is the. you know the theory of everything what. are the basic physics laws that. generated this whole thing.

and there's a hope that you should be. able to do that but. it gets it's difficult yeah but there is. also some portrait of the fact that it's. difficult. right because he it gives us a mystery. to life. which yeah without the wheelchair i mean. uh it's not so fun uh. all right life will be less fun can we. talk about interactive proofs a little. bit and. zero knowledge proofs what are those. okay how do they work. so interactive proof actually. is um is.

is a modern realization and uh. conceptualization of something. that we knew was true but you know that. is easy to go to lecture. in fact that's my motivation we invented. the schools to go to lecture right we. don't say oh i have a minister of. education i publish this book you read. it. yeah invest this book for this year this. book for version. we spend a lot of our treasury in. educating our kids. and in person educating go to class.

interact with a teacher on the. blackboard and chalk on my time. now we can have you know whiteboard and. presumably you're going to have actually. this. uh magic pens and the display instead. but the the the idea is that. interactively you can convey truth much. more efficiently and we knew this. psychologically. it's better to hear the explanation than. just to be labor or some paper right. same thing so interactive proofs is a.

way to. to do a following rather than doing in. some complicated very long. papers and possibly infinitely long. proofs exponentially long proofs. you say the following if this theorem is. true. there is a game that is associated to. the theorem. and if the theorem is true this game. i have a winning strategy that i can win. half of it. all the time no matter what you do. okay so then you say well is the theorem. true you believe me why should i believe. you so okay let's play.

so and if i prove that i have a strategy. that. and i win the first time and i win the. second time then i lose a third time but. i win. every say more than half of a time or i. win. say all the time if the serum is true. and at least. at the most half of a time if the. theorem is false you statistically. get convinced you can verify this. quickly. and and therefore is a much when the. game. in the game typically is extremely fast.

so you generate a miniature game in. which the theorem is true. i win all the time in the theorem is. false i can win at most. half of a time and if i win win win win. win win win you can deduce either the. firm is true. which most probably is the case of this. week. or i've been very very unlucky because. it's like if i had a hundred coin tosses. and i got a hundred heads. very improbable right so that is a way.

and so this transformation. from the state formal statement of a. proof. into a game that can be quickly. played and you can draw statistics how. many times you win and you. is a is one of a. big conquest of a modern complex theory. and in fact actually as a highlighted. the notion of uh of a proof has really. give us a new insight to what to be true. means and. what what the truth is and what proofs.

are so these are generally proofs. so what kind of. mysteries can it allow us to unlock. and prove he said truth. uh so uh what does it allow us. what kind of truth does that allow us to. arrive at. so it enlarges the real mobot is. provable because. in some sense the classical way of. proving things. was extremely inefficient.

from the very fire point of view yes. right so. and and so therefore there is so much. proof that you can take and. but in this way you can actually very. quickly minutes. verify something that is. the correctness of an assertion that. otherwise would have taken our lifetime. to belabor and check all the. the passages of a very very very long. proof and you better check. all of them because if you don't check.

one line. an error can be in that line and so you. have to go linearly through all the. stuff rather than. bypass this so you enlarge tremendous. amount. whatever proof is and in addition. once you have the idea that essentially. a proof system is something that. allows me to convince you of a true. statement. but does not allow me to convince you of. a false statement.

and better at the ancestor proof proof. can be beautiful should be. should be elegant but advances is true. or false so she wants to be able to. differentiate. it is possible to prove the truth and it. should be impossible or statistically. extremely hard. to prove something false and if you do. this you can prove way way. more once you understand this and on top. of it. we got some insight i can visit zero. knowledge proofs. that is in something which you took for.

granted were. the same knowledge and verification. are actually separate concepts so you. can verify. that an assertion is correct without. having. any idea why this is so and so. people fail to say if you want to verify. something you have to. to have a proof once you have a proof. you know why it's true you have. the proof itself and so somehow you can. totally differentiate knowledge.

and and uh and verification validity so. totally you can. decide if something is true and still. have no idea is there a good example. in your mind oh actually. you know at the beginning we labor to. find. the first knowledge zero knowledge proof. then we find a second then we've had the. third. and then a few years later actually we. proved a theorem. which essentially says every theorem no. matter what about. can be explained in a zero-knowledge way.

okay so it's not a class of fear but. all theorems and is a very powerful. thing so if we were really. for thousands of years. bought this identity between knowledge. and verification. to be hand-in-hand together and uh for. no reason at all. i mean we had to develop a weaver. technology as you know i'm very big on. technology because. it makes us more human and and make us.

understand. more things than before and uh and i. think of it is a. that is a that's a good thing. so this interactive proof process. there's power in games yeah and you've. recently. gotten into uh recently i'm not sure you. can correct me. uh mechanism design yeah uh. so it's i mean first of all maybe you. can explain what mechanism design is. and the the fascinating space of playing. with games.

and designing games mechanism design is. that. you want to you want a certain behavior. to arise right if you want to organize. you know. a societal structure or something you. want to have some orderly. uh behavior to our eyes right because uh. it is important for. your goals but. but you know that people they don't care. what my goals are. makers about uh maximizing their utility. so put the grassley making money the.

more money. the better so to speak right i'm. exaggerating my self-interest. in what self-interest in whatever way. them so what you want to do. is ideally what you want to do is to. design a game so that while people. played so to maximize their. self-interest. they achieve the social goal and. behavior that i want. that is really the best type of thing.

and it is a very. hard science and art to design. with games and it challenges us. to. actually come up with solution concepts. for way to analyzing the games. that need to be broader and i think the. number. game theory has a developing a bunch of. very compelling.

way to analyze the game that if the game. has a best property. well you can have a pretty good. guarantee that is going to be played in. a given way. but as it turns out and not surprisingly. these tools have a range of action like. anything else all these. so-called the technical resolution. concept the way to analyze the game. like dominant strategy equilibrium when. something comes to mind to be. very meaningful but as a limited power. in some sense the games that they can be.

i'll admit such a way to be analysis. there's a very specific kind of games. and the. the rules are set the constraints are. set the utilities are all set. yes so if you want to reason if there is. always say. that you can analyze a restricted class. of games this way. but most games you know don't fall into. the rest of the class. then what do i do when you need to. enlarge a way what a rational player can.

do. so for instance uh in my opinion at. least in some of my. i played with this for a few years and i. i was doing some exotic things i'm sure. in in the space that was not exactly. mainstream. and then i changed my interest and our. blockchain. but what i'm saying for a while i was. doing. so for instance to me is a way in which. i design the game.

and you don't have the best move for you. the best move is the move that is best. for you no matter what the other players. are doing. sometimes a game doesn't have that okay. it's too much to ask. but i can design the game such of it. given the option in front of you say oh. these are really stupid for me. take them aside but these these are not. stupid. so if you design them the game solve it. in any combination. or non stupid things that the player can. do. i achieve what i want i'm done i don't.

care. to find the very unique equilibrium. i i don't give a damn i want to say well. as long as you don't do stupid things. and nobody else does stupid things. good social things outcome guys i should. be equally happy. and so i really believe that um. this type of analysis you know is uh as. possible and. uh as a bigger. radius so it reaches some more games.

more classes of games. and uh and after that we have to enlarge. it again and uh. and it's going to be we're going to have. fun because uh. human behavior can be conceptualized. again in many ways and uh. it's it's a long game jim it's a long. game do you have uh favorite games that. you're looking at now i mean i suppose. your work with blockchain and algorithm. is the kind of game that you're. you you basically just mechanism design. design the game such that it's. scalable secure and decentralized right.

yes yes and very often you have to say. and verify and. you must also design so that the. incentives are uh. in terms of whatever little i learned. from my venture in uh mechanism design. is that incentives are very hard to. design. because people are very complex. creatures and so. and so somehow the way we design. algorithm is a.

totally different way essentially with. no incentives essentially. and and but but technically speaking. there is a notion. that uh uh is actually believable right. so that to say um people want to. maximize their utility. yes up to a point let me let me tell you. assume. that if you are honest. you make 100 bucks but if you are. dishonest no matter how dishonest you.

are you can only make 100 bucks. and one cent what are you going to be. i'm saying you know what. technically speaking even that one's. nobody bothers and say. how much am i going to make by honest. 100 if i'm devious and if i'm a criminal. 100 bucks in one cent you know i might. as well be honest okay. so that essentially is called you know. epsilon utility equilibrium but uh i. think it's it's good. and and and uh and that's what we design.

essentially means of it you know. the reason uh having no incentives. is actually a good thing because to. prevent people from reasoning how else i. encounter game the system. but why can we achieve an argon to have. known incentives. and in bitcoin instead yet to pay the. miners because they do tremendous amount. of work because. if you have to do a lot of work. then you demand to be paid accordingly. because you right. but if i'm going to say here to add two.

and two equal to four how much you want. to me pay for vessel if you don't give. me advice. i don't add the two and two i would say. you can add 22. in your sleep you don't need to be paid. to other 2. so. the idea is that if we make the system. so efficient. so that generating the next block is. so damn simple it doesn't hit the. universe let alone my computer. let alone take some microsecond or. computation i might as well. not being received incentives for doing. that. and try to incentivize some other part.

of the system but not. the main consensus which is a mechanism. for generating an adding block to the. chain. since you're italian sicilian. i also heard rumors that you are a. connoisseur of food. uh what you know if i said today is the. last day. you get to be alive i'm rushing you. shouldn't have trusted me. you never know the russian whether. you're gonna make it out or not well if. you. had one last meal you can travel.

somewhere in the world either you make. it or somebody else makes it. uh what's that going to look like all. right. this is one last meal i must say hey. you know in this ira kovid. i've not been able to see my mom and. uh and that was my mama was a fantastic. chef okay. and ahead of this very traditional food. as you know the very traditional food. are great for a reason.

because they survived hundreds of years. of culinary innovation. yeah so and there is one very laborious. thing. which is uh and you heard the name which. is this. uh parmigiana. but to do it it's a piece of art. requires so many hours. but only my mama could do it if we have. one last meal i want to parmesan. okay what is uh what's what's the. laborious processes. the ingredients is it the the actual.

process is it the the atmosphere and the. humans involved. and the latter a the ingredient. like in any other in italian cuisine. believes in very few ingredients. if you take say quintessential. italian recipe everybody knows spaghetti. paste okay. pesto is olive oil very good extra. virgin oil. um basil.

pine nuts pepper a clove of garlic not. too much otherwise used. yeah you know the flour everything and. then you have to. do either two schools of food parmesan. or pecorino or a mixed number two. yeah i mentioned six ingredients yes. that is typical italian. that is i understand that there are. cuisines for instance a french cuisine. which is. extremely sophisticated and extremely. combinatorial. or some chinese cuisine which has a lot.

of. many more ingredients than this and yet. the artist to put them together. a lot of things in italy is really. striving for simplicity. yet to find few ingredients but the. right ingredients to create. something so in parmigiana the. ingredients are eggplants they are. tomatoes. we are basil but but how to put them. together. in the process he's a he's an actor. of love okay labor and love is that uh.

you can spend uh the entire day when i'm. exaggerating by the entire morning for. sure. to do it uh properly yes the japanese. cuisine too. there's a mastery to the simplicity with. the sushi i don't know if you've seen. george of sushi but there's a mastery to. that that's. propagated through the generations it's. fascinating that's fascinating. you know people love it uh when i ask. about books. i don't know if uh books whether fiction. non-fiction. technical or completely non-technical.

had an impact in your life. throughout if there's anything you would. recommend or even just mention as. something they give you. an insight or moved you in some way. so okay so i don't know if i recommend. because in some sense you almost had to. be italian or to be such a scholar but. being. italian one thing that really. impressed me tremendously is the divine. comedy. it is a medieval poem a very long poem.

divided in three parts hell purgatory in. paradise okay. and the vet is the non-trivial story. of a middleman man. gets into a crisis personal crisis. and then out of this crisis. he purifies mesa catastrophes he. purifies himself more and more and more. until. he's become capable of actually meeting.

god. okay and that is actually a complex. story. so you have to get some very. sophisticated. language maybe latino at that point that. we were talking about 1200s um. uh italy right in in florence. and this guy instead he chose his own. dialect. not spoken outside his own immediate. circle right. um a florentine dollar actually he dante. really made italian. italian he was it's like how can you.

express such a sophisticated things and. so this. and then the point is that these words. that uh nobody actually knew because. they were essentially dialect. and plus a bunch of very intricate. rhymes in which they had to rhyme with. things. and turns out that by getting meaning. from the things with the rhyme. you essentially guess what the world. means. and you invent italian and you. communicate.

by almost osmosis what you want is a. miracle of communication. in a dialect a very poor language very. unsophisticated to express a very. sophisticated. situation i love it. people who love it and italians are not. italian but but what i got of it is that. you know. very often limitations. are our strength because if you limit. yourself at a very poor language. somehow you get out of it and you.

achieve even better form of. communication that are using a. hyper-sophisticated and literary. language with lots of resonance from the. prior books so that you can actually. instantaneously quote he couldn't quote. anything because nothing was written in. italian before him. so i really felt that limitations are. our strength. and i think that rather than complaining. about eliminations. we should embrace them because. if you embrace our limitation limited as.

we are we find. very creative solutions that people with. less limitation we have we would not. even think about it oh this. limitation is a kind of superpower if. you choose to see it that way. uh is there since you speak both. languages is there something that's. lost in translation to you is there. something you can express in italian. that you can't in english. and vice versa maybe is there something. you could say to the musicality of the. language. i mean i from i've been to italy a few.

times and uh. i'm not sure if it's the actual words. but it's. the people are certainly very um. there's body language too there's just. the whole being is language. so i don't know if uh you miss some of. that. when you're speaking english in this. country yes in fact. actually i certainly i i'm uh. i miss it and uh somehow it was a. sacrifice. that i made consciously by the time when.

um. i arrived i knew that this i was not. going to express myself. i'm a better level and uh and. it was also sacrificed because uh given. to you ever also. your mother tongue is russian so you. know that. you can be very expressive in your. mother tongue and not very expressive. there's a neutron a new language and. then. what people think of you in the new. language because when the precise of. expression of things. it generates you know it shows a normal.

elegance. or it shows you know knowledge or he. shows us a census or he shows us a caste. or an education whatever it is. so all of a sudden i found myself on the. border. [Laughter]. so i had to fight all my way up back up. and but. but i'm not saying i go back to fasting. their limitations are actually our. strength in fact is a trick. to limit yourself to exceed right and. you know. there are examples in history if you.

think about you know. right he goes to invade mexico he has. what. a few hundred people with him and uh. he has a hundred thousand people in arms. on the other side. first thing he does he limits himself. he sinks his own ship there is no return. okay and at that point he actually. managed. that's really good i i actually. first of all that's inspiring to me i.

feel like i have quite a few limitations. but more practically. on the russian side i'm going to try to. do a couple of really. big and really tough interviews in. russian. uh once coveted lifts a little bit i'm. traveling to russia. and i'll keep your advice in mind. that the limitations is a kind of. superpower we should use it to our. advantage. because you do feel less. like you're not able to convey your. wisdom.

in in the russian language because i i. moved here when i was 13. so you don't you know the parts of life. you live. under a certain language are the parts. of life you're able to communicate. you know i became i became a thoughtful. deeply thoughtful human in english. yes but the the the pain from world war. ii. this the the music of the people that. was instilled with me. in russian so i can carry both of those. and there's limitations in both.

i can't say philosophically profound. stuff in russian. but i can't in english express like that. melancholy feeling. of like the people and so combining. those two also. beautifully said thanks for sharing this. is great yes i. totally understand you yes you've. accomplished some. incredible things in this space of. science. in the space of technology. space of theory and engineering do you.

have advice. for somebody young an undergraduate. student somebody in high school. or anyone who just feels young uh about. life. or about career about making their way. in this world. so i was telling before but i believe in. emotion and. my thing is to be true to your. own emotion and that i think that if you. do that. you're doing well because it's a life. well spent. and you are going never tire because you.

want to solve all these emotional notes. that have. always intrigued you from the beginning. and i really believe that you know. to to live live meaningfully. creatively and yet to live your. emotional life. so i really believe that whether you're. a scientist or an. artist even more but a scientist i think. of them as artists as well if you are a. human being. so you are really to live fully your. emotions. and to the extent possible sometimes.

emotions cannot be overbearing. and my devices try to express them. more and more confident sometimes is. hard but that you are going to be. much more fulfilled than by suppressing. them. what about love one of the big ones what. role does that play um it's. a bit uh a bigger part of emotions but. it's a. it's a scary thing right it's a there's. a lot of. vulnerability that comes with a love.

but there is uh also so much you know. energy. and power and uh and um and love in all. senses and in the traditional sense. but also in in the sense of uh. a broader sense for uh for humanity. feeling this you know. compassion of it you know makes us one. with you know other people and be. suffering or other people. i mean all of this is uh is a very scary. stuff. but he's really very very.

the sad thing is it really hurts to lose. it. yes that's why you have all the ability. that comes with it yes that's the thing. about emotion is. it's up and down and uh the down seems. to come always. with up so but the up only comes with a. down so. yeah uh let me ask you about the. the ultimate down which is uh. unfortunately.

we humans are mortal or appear to be. for the most part uh do you think about. your own mortality. do you do you fear death. i hope so and i because. i mean without death there is no life so. at least there is no meaningful life. a death is actually in some sense our. ultimate motivator. to live a beautiful a meaningful life i. myself. felt as a young man a vetter unless i. i gotten something that i wanted to do i.

don't know why i go to this idea i said. something to say if i'm not able to say. i would suicide so. maybe it was a way to motivate myself. but you don't need to motivate it. because. in some sense unfortunately death is. there so. you better get up and do your thing. and uh because that is. the best motivation to to live fully. what do you think what do you hope your. legacy is.

you know you mentioned you have two kids. yes and so i really feel that you know. there is uh on one side. is my biological uh legacy and that. is uh my two kids right and uh. and their kids hopefully and that is one. fine. and the other thing is uh this a. common enterprise which is a.

society and i really feel that my legacy. would be. better by providing security and privacy. actually for me are metaphorical to say. i want to give you the ability to. interact more and take. more risks and and reach out tomorrow. for more people as difficult and. dangerous as amazing. but my old scientific work is about to. to guarantee privacy and and give you.

the security of interaction. and not only in that transaction like it. would be a blockchain transaction but. that is really one of the hardcore of my. emotional problems and i think of it you. know. these are the problems i want to tackle. yeah and ultimately. privacy and security is freedom yes. freedom is at the core of this uh it's. uh dangerous just it's like the emotion. yeah but ultimately that's how we create.

all the beautiful things around us do. you think there's meaning to it all. uh this life except the urgency that. death provides. and us anxious beings create cool stuff. along the way. is there a deeper meaning and if it is. what is it. well meaning your life actually there. are three meanings of life. great that's great one too sick. two too sick and three too sick.

to seek what you know or is there no. answer there. is no answer to that i really think that. the journey is more. more important than uh the destination. whatever to be. and i think uh that is uh a journey and. uh. is uh in my opinion at the end of the. day. i must admit meaningful in itself and uh. we must admit that maybe whatever your. destination. might be i'd hang it you know.

we may never get there but uh hell was a. great ride. well i don't think there's a better way. to end it silvio thank you for joining. thank you for wasting your extremely. valuable time with me today. joining on this journey uh of seeking. uh something together we found nothing. but it was. it was very fun i really enjoyed it. thank you so much. thank you alex those have been really. special for me to be interviewed by you.

thank you for listening to this. conversation with sylvia mccauley and. thank you to our sponsors. athletic greens nutrition drink the. information. in-depth tech journalism website for. sigmatic mushroom coffee. and better help online therapy click the. sponsor links to get a discount and to. support this podcast. and now let me leave you with some words. from henry david thoreau. wealth is the ability to fully. experience life. thank you for listening and hope to see.

you next time. you.