Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks | Lex Fridman Podcast #181
the following is a conversation with sergey nazarov ceo of chain link which is a decentralized oracle network that provides data to smart contracts he and his team have done seminal research and engineering in the space of smart contracts check out the chain link 2.0 white paper that i found to be a great overview of their technology and vision it's 136 pages but very accessible quick mention of our sponsors wine access athletic greens magic spoon indeed and better help check them out in the description to support this podcast as a side note let me say that externally connected smart contracts that combine the ocean of data out there with the security of the blockchain are fascinating to me both technically and philosophically data is knowledge and knowledge is power i think the more reliable data sources we integrate into our decision making especially when those decisions are executed by programs the more efficient and productive our decisions become there are interactions between humans that should not be formalized digitally like love for example but for all the others there's no reason for smart contracts not to automate away the menial parts of life making more room for good conversation over brisket and maybe some vodka with old and new friends this is the lex friedman podcast and here is my conversation with sergey nazarov is that yorzuk there he so i gave away everything i own a few times in my life and he accidentally survived and i don't like stuffed animals what i really liked about i got him in a thrift store what i liked about him is because i'd never seen a stuffed animal that looks pissed off at life like they're usually smiling in a dumbest of ways and this guy was just pissed yeah i gotta tell you that's actually pretty funny i like this guy if you had to live only in the digital world or the physical world which would you choose so i i think this is actually a question more about what the fidelity of the digital world would be versus the physical world i i think this this type of question this whole simulation thing actually comes from papers about 20 30 years ago in in the philosophical world where people try to make this thought experiment of of would you be comfortable if if everything that was happening to you happened in a simulation what they were trying to do is they were intuitively trying to understand is is there some kind of intuitive um personal connection we have to something being the real world right and then the matrix movie actually came out of these papers and then these ideas made its way it made their way into the public consciousness um i personally think that if i had the choice to be in the digital world at the same fidelity as the real world with immortality i would absolutely go with the digital wait wait wait wait wait how'd you add the immortality part that's a won't get immortality if you think about how we would go into the digital world right our our our brain patterns would be mapped onto some kind of uh probably virtual machine right and that would mean a multi immortality right because the virtual machine has no limit to how long it can be don't you think there will be like a versioning system like uh there'll be this is a soft fork versus hard fork question whether sergey version 2.0 would be different from sergey version 1.0 there'll be an upgrade so that's immortality sergey 1.0 would die in the digital world and you should get you get like a software update and then that's it you know well yeah when people go into the star trek transporter are they killed or are they transported i i don't really know i haven't read any papers on this i haven't really thought about it too much there's no white paper on the transporter not not at this point so what what does fidelity mean exactly to you is it like strictly so the fidelity of the physics world the physical world is maybe now questions of physics quantum mechanics what is at the at the bottom of it all right or do you mean the fidelity of the actual experience it's just it's just perception it's just just the human but that's limited by human cognitive capabilities it is but i don't really have anything else right i think all of these papers that brought up these questions of a simulation they were like in epistemology and metaphysics right and what they were trying to do i think was they were trying to put people through a thought experiment where they would come out on the other end and say the reality of life is really worth something and i don't i don't you know ignorance isn't bliss which is that's the consistent statement in the matrix right ignorance is bliss is that that's what one of the guys says when he's like you know doing something wrong and trying to get back into the matrix and and the question is is ignorance bliss um and it's like a different version of that i i think from a perceptual point of view if my perceptions aren't in any way different so fidelity is very good it doesn't matter now i i don't know right so if i that it's if i don't know something it doesn't really exist and if it doesn't exist in in in my perception or my consciousness then it doesn't exist period for me at least and then whether it exists in some you know more metaphysical um version of things i i personally never really got into the metaphysics stuff because i i could never really um i couldn't understand what the point of it was right it it it's one of these things where i couldn't really get what um what the what the practical application of it was and this is this is from those realm of questions right like if there was something about the world but you didn't have a capacity to perceive it would it matter to you uh to me it wouldn't matter right to me to me by the way the simulation thing is a really interesting engineering question which is how difficult is it to engineer virtual reality a digital world that is sufficiently of high fidelity where you would want to live in it i think that's a really testable and a fascinating engineering question because my intuition says like it's not as difficult as we think it's not nearly as difficult as having to create a quantum mechanical simulation that's large enough to capture the full human experience like it might be just as simple as just a really nice quake game like with a nice engine with you know that just creating all the basic visual elements that tricked our cognitive our visual cortex into believing that we're actually in the physical environment and i think that if that's true then that's quite you know that a high fidelity digital world is actually achievable within you know a century and and that changes things yeah yeah maybe maybe in my in our lifetime i'm really hoping for that i'm hoping somebody can copy my brain waves onto a virtual machine yeah and uh you know allow those uh allow that consciousness to continue to exist whether that's that's death or not i don't i don't know but i i think it's actually um gonna require some serious leaps like even even the vr headsets right they um don't work if they go below 90 frame rates right people people start getting freaked out so you have to go from one gaming screen of you know 60 frames per second to two screens of 90 frames per second and so the people's hardware today can't even handle that and that's for these for these two little screens by your eyeballs what it's going to take to like you know completely trick my consciousness into not knowing the difference in terms of like you know all the sensory inputs um my i'm keeping my fingers crossed whoever whoever whoever does that and and is close to doing that they should contact me i i want to have my brain waves turned into a virtual machine would you in that context if morpheus came to you would you take the blue pill or the red pill meaning would you be happy just living in that world and not knowing that you're living inside that virtual world that's running a computer or would you want to know the truth of it well actually i think that's a very different question right there's a there's a there's a actually moral ethical question there about whether you should allow a bunch of people to get you know manipulated and killed and slaved because in the matrix they're all enslaved and in as as as as like you know a triple a battery to turn a human being into the battery right um so i i think the the moral and ethical question of that fascinating enough isn't actually different than the more unethical questions we face today in modern daily life but i probably have given the choice of just completely going along or going against it i would probably go against it if i had to make this kind of binary choice because going going along with it i think at that scale of scary you know stuff happening to people is is probably something really um really really difficult but for your individual life it's way more fun to go along with it so you're saying you value the opposing a system that includes the suffering of others versus just for yourself and enjoying the ride i mean what what's what's if there is such a binary choice why choose the opposite system i think it's the nature of um kind of the ethical dilemma that you face in that situation there's kind of some you know this is obviously not something that's happening now right we don't know this right at the end of the day at that scale of of something like that happening yeah that scale of of people being um you know manipulated and harmed then i think pretty much almost all people have an obligation to go to go against it uh probably that's what that that looks like in my opinion so you've talked about the concept of definitive truth what is it and in general what is the nature of truth in human civilization and just talking about the digital age uh the nature of truth in the digital age so the interesting thing about definitive truth is that it actually exists on um on this at least in my mind on this spectrum between objective truth and just you know somebody uh made something up and nobody else agrees so what i what i think definitive truth is is it's somewhere in the middle on that spectrum where if you and me define uh what truth is right like if you and me have an agreement of some kind and we say as long as the weather is sunny or the weather isn't there is no rain on that day then there will be an insurance policy that results and you and me both agree that as long as three sensors three monitoring weather monitoring stations all say that then the definitive truth for us and for that agreement is the result of of those systems coming to consensus about what happened out in the real world i i think the objective um truth definition from from kind of the philosophical world is really really stringent and very very hard to attain and that's not that's not what this is and that's actually not what commerce or the ability for people to interact about contracts needs what i think the world of commerce needs is an upgrade from someone can unilaterally decide what the truth is two there can be a pre-agreed set of conditions where we define what the truth is under those conditions and then you know you and me basically say if these 20 nodes or of these 30 data sources come to consensus within you know this method of consensus with this threshold of agreement then definitive truth has been achieved for you and me in in our relationship for this specific agreement and the specificity and and our shared agreement to that kind of truth or that definitive truth being acceptable to both both of us is is probably what's what's um kind of necessary and sufficient for everything to move forward in a better way in any case much better than you know i'm a bank or an insurance company i'm going to unilaterally decide what happens it's it's definitely an upgrade from that do you think it's possible to define formally in this way a definitive truth for many things in this world like you talked about whether basically defining that if three sensors of weather agree then that we're going to agree that that is a definitive useful truth for us to operate under so how many things in this world can be formalized in this way do you think uh a huge a huge amount so so there's there's actually um two two things going on here one thing is the amount of data that already exists right and the pieces of data coming off of you know markets iot shipment of goods any any number of other things like even even your youtube channel has a certain amount of likes or a certain amount of clicks or certain amount of views and even that's quantifiable right so even to a certain degree what we do here today you and me right now can be quantified as far as the amount of views the amount of clicks the amount of any number of others you the viewer have power of data in your hands by clicking like or dislike right now or the subscribe button or the unsubscribe button which i encourage you to do anyway okay so there's data flowing in into all interactions in this world there's data there's more and more data right like more data more and more data that data is more and more accessible to everybody and that accessibility and the fact that there's more of it means we can form more definitive truth proofs we can form more and more proofs and as we form those proofs well we can provide them to these blockchains and smart contract systems that consume them and then they're tamper proof right so they can't be manipulated and so now we've combined a system that can prove things with a system that guarantees us certain outcomes and we have a better system of contracts which is which is uh actually an unbelievably powerful tool that has never existed before can we talk about the world of commerce and finance decentralized finance what is it uh what's its promise from both the philosophical and uh technical perspective if we just zoom in on that particular space of the digital world sure so the the centralized finance is the instantiation of a specific type of smart contract right or what i call hybrid smart contracts which are these contracts that combine the on-chain code together with the off-chain proofs that something happened that's they're called a hybrid because they basically use both of these systems right the blockchain and the proofs about what happened and what defy is is one specific type of hybrid smart contract that is taking on the contractual agreements you traditionally find in the financial global financial system right and and that's basically the world of lending the the world of yield generation for people giving me or giving giving whoever their money and and somebody giving back them yield back to them which is what bonds do and what treasury's doing what a lot of the global financial markets do as well as the ability to gain exposure and protection from different types of events and risks that's a lot of what derivatives do right derivatives allow us to say hey something's going to happen and i'm either going to protect myself by getting paid if it happens or i'm going to benefit from it happening by basically saying it's going to happen putting money down on that and that prediction will get me a return now that's a lot a very large part of the global financial system excluding all the stuff for global trade and letters of credit and all the stuff that facilitates international trade so excluding excluding that at least for now so if we look at what decentralized finance does it takes all of those agreements about generating yield lending and all of these types of things you find in global finance and the world of derivatives and a few other types of financial products and it basically puts them into a different format right so the format you have for centralized financial agreements is that you go to a bank even if you're a hedge fund even if you're like the richest people you you go to a bank they make a product for you and you hope that they honor the product that they made for you or you do a deal with another hedge fund or or or whoever some counterparty and you hope that that deal is honored yep and then um a number of very freaky things start to take place one one of them is people don't have clarity about what the agreement is right so a lot of people don't know exactly what the agreement is between um between those parties because they can't actually see it sometimes agreements are kept very private or parts of them are kept private and that keeps you know other counterparties other people in the system from understanding what's going on this is actually partly what happened with the mortgage crisis the mortgage crisis in 2008 was basically there were a lot of agreements there were a lot of assets but because the centralized financial system worked in such an opaque way it was so unbelievably difficult to understand what was going on right and so that lack of understanding for the global financial system basically led to a big boom and then correspondingly very very big bust which amazingly enough had a huge impact on everybody even though they didn't participate in the boom part of the of the equation um in in any case what decentralized finance does is it takes these financial contracts that power the global financial system it puts them in this new blockchain based format that basically at this point provides three very powerful things the first thing that it provides is complete transparency over what's going on with your financial product so this means when you use a financial product in the d5 format you and you as a technical person actually can drill down very very very deeply and you can understand where the collateral is you can understand how much collateral there is you can understand what format it's in you can understand how it's changing you can understand this on a you know second to second or block to block basis right so you have complete transparency into what's going on in the financial protocol that you have your assets in which is because blockchains and the infrastructure all of these things are built on force that transparency right whereas the centralized financial system is very very good at hiding it it's very good at hiding it and packaging things in a glossy wrapper creating a boom then a bust decentralized finance is built on infrastructure that forces transparency such that everyone can understand what the financial product does from day one and in fact escaping that property is practically impossible or if someone tries to escape it it becomes immediately obvious and people don't use their financial product so so that's number one number two is control so if you look at what happened with robin hood everybody thought the system worked a certain way right everybody thought i have a brokerage account i can trade things under you know a certain set of market conditions and then the market conditions changed within the band of what people thought they could do and everybody was fascinated to find out that oh my god i thought my band of market conditions in which i can control my assets is x but it's actually y it's actually much much smaller band and the the reason it is a much much smaller group of market conditions is that the system doesn't work the way people think it works the system was wrapped up in a nice glossy wrapper and given to them to get them to participate in the system because their system requires and needs their participation but if you actually look at how the system works underneath you will see that it does not work the way people think they that it works and this is actually another reason that defy is so powerful because defy actually and and these blockchain contracts give people the version of the world they think they already have which is why they don't beg for it right so everybody thinks they're in a certain version of the world that works in this reliable way transparent way they're not they don't realize it and so they're confused when you tell them i'm going to make the world work this way because they think they're already in that world but then things like robin hood make it immediately painfully clear that that's not how the world works so that the second real property of defy is control which means that you control your assets not a bank not a broker not a third party you you control your bitcoins you control your tokens in the finance protocol if you don't like how something's going in that protocol you can remove it you can send it to another protocol or you can use a feature of the protocol to do something it's supposed to do and guess what nobody can just say oops you know that feature that isn't so good for my friends over here you know that feature is actually you know we're just going to pause that feature in the critical moment when you need it to to to execute your you know your strategy which is why you took all the risks to begin with and then the final reason um you know the final thing to know about d5 is that d5 is inherently global and actually right now provides better yield globally so if you go to a bank right now with the us dollar you get one percent or less if you go to d5 with the us dollar you get seven or eight percent so if if we think about that um in in a world where there's a lot of inflation coming down the road and we think about well you know a lot more systems might be failing soon and and and they might be highlighting these types of problems that were there for or as a result of the type of control that you see in in robinhood and people are more and more concerned about both transparency and control and they're looking for yield to combat inflation um i i think that's what defy is about in a practical sense it is this clarity about your risk it is control over your assets and amazingly at the same time as having those two unbelievably useful properties it is actually superior yield which which which which which just leads me to the very obvious conclusion that the only reason defy isn't more used is because more people don't know about it and by virtue of this long kind of you know explanation here and here and elsewhere more people will know about it and it's just such an obviously superior solution that i i haven't heard a single explanation as to why um no no don't earn eight percent and take less risk and have more transparency with your assets earn seven percent less take more risk and um give people the ability to change the rules on you at their discretion go do that who's going to do that and in general on the first two of transparency control first of all i do think maybe you can correct me but from my perspective they're they're like deeply tied together in the sense that transparency gives control transparency creates accountability and and there's this kind of game being played game game theoretic game where if i know if you know i'm going to discover your deviation you're not going to deviate yes this could be a whole other conversation but just as a small aside on the social network side of things which i've been thinking deeply about in the past year or so of how to do it right there how to fix our social media and i tend to believe that human beings if they're given clear transparency about which data is being stored how it's being used where it's being moved about just all a clear simple transparency of how their data is being used and them having the control at the very minimal level of being able to participate or to walk away and walk away means delete everything you've ever known about me that that will create a much much better world that currently there's a complete lack of transparency on social media how the data is being used for your own protection i mean there's a lot of parallels to the central bank situation and there's not a control element of being able to walk away like being able to delete all your data delete your account on facebook is very difficult it doesn't take a single click which i think is what it should take there should be a big red button that says delete everything you've ever known about me or like forget me so i think that couple together can create a very different kind of world and create a an incentivization that will uh lead to like progress and innovation and just like a much better social network and a really good business for the future social networks but so i tend to see like control as naturally uh being a sort of an outgrowth from the transparency it should all start the transparency which is why the smart contract formulation is fascinating because like you're you're formalizing in a simple clear way any agreements that you're participating in and as a side comment also what's really inspiring to me is that i think there's a greater i don't know if this is always the case but it seems like from having talked to people on the psychological element there's a hunger amongst people to for transparency and for control like transparency another word for that is authenticity if you look at the kind of stuff that people hunger for now they want to know the reality of who you are as an individual so that means you can create businesses you can create tools that are built on authenticity a transparency and then the same i'm inspired by the intelligence of people if you give them control if you give them power that they would make good choices that's really exciting of course not everybody but that means that decentralized power can create effective systems so couple that there's a hunger for transparency so we can move to a world where everyone's being just like real you know conveying their genuine human nature and people are sufficiently intelligent that if you're if they're given power in a distributed mass scale sense that we're going to build a better world to that as opposed to centralized supervised control where only a small percent of the population know what the hell they're doing everybody else is clueless sheep i'm i'm so those two coupled together is really to me inspiring just to really quickly comment on the stuff that you just said which i think is super super super fascinating um i i think that's all exactly right i think everything that you said is is right and i think it's actually going to be the same for social media and banking and every other type of contract is that all of those systems that house people's value for them and take control of of either their social media value or their financial value or whatever for them all of that is going to be made available to people in like this autonomous piece of code that does the same thing that the centralized entity used to do so they get all the features but the autonomous piece of code gives them the ability to have control while getting all the features right so so banks give you features social media sites give you features you know whatever other system that you use online gives you features and then it takes your data and it takes control of your assets from you in return for those features right i think the whole big difference here partly in line with you know the definition of smart contracts and its evolution is that there's this uh now this this autonomous piece of code that's giving you all those features without requiring the ownership and lock-in and control and unilateral kind of ownership of your data or your value or or whatever it is that that you're giving it right and i think what this will lead to fundamentally is just more of a free market dynamic among how people make i i think with the social media folks you should you should just make some kind of law or something where you can just export all your data from them everyone should be able to get their data exported by another application and then the network effect of all these social media sites will kind of crumble because people will just combine your twitter data with your facebook data with everything else into an application that you control and there will just be thousands of different interfaces competing for how to consume all the social media data because it isn't locked in in one centralized actors control and so this is this is just the recurring pattern of what i think all of this will do is it'll give peach it gives it gives people a better deal right it gives them features without ownership of data without ownership of value and and and that's really the difference so i think this is a good place to talk about smart contracts then can you tell me the history of smart contracts and the basic sort of definitions of what is it sure so i think smart contracts as a definition has actually gone through some through some kind of changes or small evolution initially i think it was actually a conception of a digital agreement that was tamper-proof and could know things about the world right so it could get proof and it could define that something happened and it could conclude an outcome and release payment or do something else that's actually the definition of smart contracts that i began working in this industry with seven or eight years ago when i started making smart contracts that is the conception that i had of a smart contract then what happened was that was really hard to do right building that type of tamper-proof digital agreement that could also know things about the real world and release payments back to people about those events that were codified in this tamper-proof format was actually a very tall order turns out it's consistent of three parts it's consisting of the contract the proof about what happened and you know the release of value the way things have evolved so far is that the definition has now come to mean on-chain code right so it's come to mean the codification of contractual agreement on a blockchain right so there's some code of somewhere on some blockchain that defines what the agreement is now that eliminates the part of the definition that's related to knowing things about the world and it partly eliminates the definition about payments and and stuff like that but basically it's it's on chain code right we in in our recent work on on the second white paper have actually put out a different definition that we call hybrid smart contracts that actually tries to go back to the initial definition that i started with seven or eight years ago which basically says that there's some proof somewhere that's proven to the contract and the contract can know that and the contract can gain proof then it can use that proof to settle um the agreement that's codified on a blockchain so you you both need a mechanism to provide proof you need a mechanism to codify the contract in a tamper proof way on something like a blockchain and then as with all contracts there's a presumption that there's some kind of release of value so i think a smart contract in our industry right now means on chain code which limits it to whatever can be done on chain only and then in in our internal definition for us and for us at chain link and for me um it's hybrid smart contracts which is actually the original definition it's the it's the idea that a contract can both know what happened and automatically resolve to to the proper outcome based on what happened so you're referring to the chain link 2.0 white paper which is uh paper that i recommend people look it's a very easy read and very well structured and very thorough so i really enjoyed it very recently released i guess can you dig in deeper what is a hybrid smart contract you mentioned sort of this idea of data or knowing about the world and on chain and off chain so what are the different roles in this so hybrid by the way refers to the fact that it's on chain and off chain contracts so maybe digging deeper of what the heck is it and what does it mean to know stuff about the world from like how do you actually achieve that yeah absolutely so the on-chain part is where the agreement itself is that's the smart contract itself and that's where you codify certain conditions such as the conditions under which an interest payment is made or the conditions under which the the contract pays out the full amount that it holds to someone based on a derivative outcome or something like that now what the on chain code is very good at is creating transparency about what the core conditions of the contract are it's very good at taking in money from other private keys that send it tokens and send it value to hold and then it's also very good at returning money or returning value back to other addresses or other private keys it can also be involved in governance it can be involved in a few other private key signature based operations but primarily the on-chain part of a hybrid smart contract from what i've seen so far defines the agreement takes in value and returns value uh based upon the conditions codified in the agreement on a blockchain the second and equally important off chain part is where the term oracle and oracle comes in or an oracle mechanism or a decentralized oracle network as we describe it in the paper and this is another decentralized computational system that has a different goal right so blockchains have the goal of packaging transactions into blocks and connecting them in a crypto cryptographically unique way to create security and assurance about that chain of transactions oracles and decentralized oracle networks achieve um consensus and they achieve decentralization about the topic of what happened right so blockchains structure transactions some of those transactions might be the state changes in different pieces of on-chain code and then those on-chain pieces of code require input i think the thing that people get kind of a little bit thrown by is despite being called smart contracts the on-chain code on a blockchain cannot actually speak to any other system so blockchains are valuable and useful as far as they're tamper-proof and secure and to be tamper-proof and secure they're made this kind of walled garden that is able to know and interact only with the highly reliable information that's within that system which is basically tokens and private key signatures all the other world's information is not available in a blockchain inherently and a smart contract or a piece of unchained code can't just say hey i'm going to go get some data from over here because the api they would get it from creates a whole bunch of security concerns for the blockchain itself and a whole bunch of consensus issues about how to agree on what that api said or what the truth of the world is right because it's not even agreeing on what one api said it's more so creating a reliable form of decentralized computation that can give you a definitive proof of what happened and not just what one api said so for example some of our most widely used networks have well over 30 nodes and well over 10 data sources that are all providing information about the same type of data and then there's consensus on that one piece of data which is then written in and essentially given back into the on-chain code to tell it what happened because you can't really make an agreement unless you know what happened right if you and me were to make an agreement and set some contractual conditions but our agreement could never know what happened it would be completely you know useless however if you and me made an agreement and there was another system called an oracle mechanism or decentralized oracle network that proved what happened definitively and you and me pre-agreed that whatever this mechanism says is what happened then we can achieve an entirely new level of automation right we can suddenly say there's this piece of unchained code that's highly reliable we can give it millions billions eventually trillions of dollars in value and it is controlled by this other system over here that's also highly reliable under this configurable set of definitive truth and decentralization conditions which we all agree are sufficiently stringent to control that much value and therefore the combination of this tamper-proof on-chain representation of a contract and this uh mutually agreed upon definition of a trigger or a proof system combined is a hybrid smart contract which as you can see um probably already does a lot more than just a contract on chain right can you talk about this consensus mechanism which by the way is just fascinating so there is the on-chain consensus mechanism of proof of work and proof of stake and then there is this oracle network consensus mechanism of what is true so how do you can you compare the two like how do you achieve that kind of consensus how do you achieve security in integrating data about the world in a way that's definitively true in a way that is usefully true such that we can rely on it in making major agreements that as you said involve billions of trillions of dollars right so this is the challenging this is the challenging question right this is the challenging um problem that oracle networks oracles we at chain link that that we work on in order to create this definitive truth to trigger and create hyper automation in this more advanced form more advanced form of hybrid smart contracts the the reality i think of this problem is that it is very specific to each use case and it and this is actually how we've architected our system is in a very flexible way so so for example um you need an ability for an oracle network to grow in the amount of nodes that it has relative to the value it secures right so if you have an oracle network that secures a hundred thousand dollars in like a beta of a financial product maybe it can be fined with owens only seven nodes and only two or three data sources right because the risk to that to that oracle network is relatively low based on the value it secures so the first question is actually how do you scale security relative to value secured by that oracle network because it wouldn't be very efficient to have a thousand nodes securing a hundred thousand dollars worth worth of value so one of the first questions is how do we properly scale and how do we compose ensembles of nodes in a decentralized way where we can know that okay we're going from seven nodes in a network to 15 to 31 to 57 to 105 to you know a thousand right so that's that's one dimension of the problem so you have to be scaling the number of nodes relative to the value that's that's derived from the truth integrated into those nodes well that's not the only problem right the the other side of this is that you're trying to create a deterministic result a deterministic output from a set of non-deterministic disparate systems data sources or places that prove things can you also just as a decide what is an oracle node what is the role of an oracle node sure so an an oracle node essentially exists in both places it exists in both worlds it exists as an on-chain contract that represents either an oracle network or an oracle node so there's an on-chain interface in the form of a contract that says i i exist to give you this list of inputs you can request weather data from me you can request price data from me you can ask me to send the payment somewhere like an api so it's a pointer to uh api that uh about that that provides truth about this world it's an interface so just like an api is an interface for web 2.0 engineers um oracle networks and the contracts that represent them or individual nodes are the interface of web 3.0 use of services and services includes all services data payment systems messaging systems whatever web 2.0 or any kind of computing service that you can conceptualize needs an interface on chain in the form of a contract that says here are the services i can provide for you here are the transactions you need to send me to get back this data or that computation or this result and then what you actually see is that the centralized oracle networks because they're uniquely capable of generating their own computations in a decentralized way around the data that they have access to you actually see the centralized oracle networks generating a lot of these services so for example we have a randomness service a verifiable randomness function service that basically provides randomness on chain and that randomness is then used in lotteries and various other contracts that need randomness but that randomness that's not a piece of data that comes from somewhere else we don't go to another data source and get it we generate it within an oracle node that then provides it over into oracle node or oracle nodes that provide it into the contracts themselves so why do you say oracle nodes are non-deterministic well they they are as far as they come to consensus but there's see there's there's there's this kind of different problem here right the blockchains are very focused on generating blocks of transactions within a smaller universe of transaction types a certain block size and a certain set of conditions and and then they have a economic system that says you i will perpetually generate blocks of this size with these transaction types in in this kind of limited set of transaction types whether those are utxo transactions or scripted solidity or whatever it is oracles and oracle networks they're um we don't have a blockchain for example there is no chain-link blockchain our our goal is not to generate a certain set of very clearly predetermined transaction types into a set of transactions that are put into blocks and will infinitely be you know done that way our goal is actually to create what we call a meta layer a decentralized made a layer between the non-deterministic highly um unreliable world and the highly hyper reliable world of blockchains so that the unreliable world can be passed through this decentralized meta layer and it can co-exist with the with the reliable chain uh unchained world exactly it can coexist and in some cases the meta layer might generate it so that the problem in in giving you this straight answer is that there's just such a wide array of services right right if you were to say well sergey how how do we generate randomness from a data source well we don't use a data source to generate the randomness that's the type of service that can be generated in an oracle network itself and so there will be certain computations that oracle networks themselves generate themselves to augment and improve blockchains and it is actually the goal of oracle's to consistently do that so if you were to think about the stack in a very generic high level you would see blockchains or databases they're basically the data structures that retain a lot of information in this transparent highly reliable form smart contract code is the application logic it is it is the logic under which all of this kind of activity occurs um you know storing data in the in the data structure in the in the blockchain as a database in in in a certain conceptualization of it and then oracles and oracle networks are all the services that are used by the application code so you know by analogy let's take uber uber initially some core code goes and gets the gps api from google maps about the user's location sends a message to the user through twilio pays the driver through stripe if those services weren't available to the people who made uber they wouldn't have made uber right because they would have written their core code on some database and then they would have had to make a geolocation company a telecom messaging company and the global payments company and they wouldn't have done that because it's too hard and that's the weird scenario that a lot of people in our industry are in and that's the problem that oracle's and oracle networks fix is they provide these decentralized services to take um this developer ecosystem the blockchain and smart contract developer ecosystem from hey i can have a database and write some application logic about tokenization and voting and private key signing all of which is super useful and is a critical foundation but now if you just lay around all the world's services whether that's market data weather data randomness suddenly people can build defy fraud proof gaming fraud proof global trade fraud proof ad networks and and that's why this world of decentralized services and decentralized oracle networks is particularly you know in my opinion important to our industry yeah it's funny and you you you talk about that the current sort of decentralized world d5 but decentralized services world is primarily just tokens and it's basically just financial transactions and the kind of thing the reason why it's super exciting the kind of thing you're doing with chain link and oracle networks is that you can basically open up the whole world of services to into this kind of uh decentralized smart contract world i mean you're talking about just orders of magnitude greater impact financially and just socially and philosophically are there interesting near-term and long-term applications that excite you yeah there's there's a lot that excites me and that is how i think about it that it's not just about we made a decentralized oracle network it's about we made a decentralized service or collection of services that's going from hundreds to thousands and then people are able to build the hybrid smart contracts which i think will redefine what our industry is about because for example for the people that only learned about blockchains through the lens of nfts they understand blockchains through nfts not through speculative tokens or bitcoins right and i think that that that will continue i i think the use cases that excite me they vary between the developed uh market that developed worlds economies and emerging markets i think in the developed world what you will see is that transparency creating a level a new level of information for how markets work and the risk that is in markets and kind of the dynamics that put the global financial system at systemic financial risk like 2008 and my hope is that all of this infrastructure will will soften the boom and bust cycles by making information immediately available to all market participants which is by the way what all market participants want except for the very very very small minority that are able to game the system and their benefit and benefit from booms but avoid busts because of their asymmetric access to information which really everybody should have and which this technically solves i think in the process of doing that and which is happening i think right about now you see a polishing of the technology such that it can be made available to emerging markets and on a personal level i feel that um the emerging markets will benefit much more from this technology just like the emerging markets benefit much more from the internet or from those you know 50 android phones that people can have because it's it's such a massive shift in how people's lives work right i have always had access to books and a library which has been fantastic and very important but there are places in the world where people don't have libraries but they now they have the internet and a 50 android phone and they can watch the same stanford lecture that i watch i mean that's kind of mind-blowing realistically right they they just went from zero to one in a very very dramatic way i think all of these smart contracts and in in my case i think the one that i seem to keep coming back to is crop insurance where partly because it doesn't have a tokenization component partly because it's actually much more important than than it might seem um what is crop insurance right so exactly so so this this this is the nature of why it's sometimes hard to see the full value of what our industry does because it solves all these kinds of back-end problems that we don't have right so crop insurance is if i own a farm and it doesn't rain i get an insurance payout so i don't need to close down my farm because if it didn't rain i don't have crops right so people in the developed world can get crop insurance and there's all kinds of systems that basically pay them out and then they can argue with the legal with the insurance company if they don't get paid out properly and whatever and this allows people to smooth out risk in fact a lot of the global options markets were about this right they were initially about people selling their produce or their crops ahead of time so that if there was a risk of drought they weren't impacted by it right and that's where a lot of options trading and all this kind of stuff came from even though it's now turned into this kind of global casino but in the emerging market there are there are literally people that if they don't have rain for two seasons they need to close down their farm and become a migrant worker of some kind and now they have a 50 android phone where they can read wikipedia but they're still decades away from an insurance company coming to their geography and offering them insurance because their local legal system simply doesn't allow that type of thing to exist no insurance companies going to go and create insurance entity and offer them insurance because you know the levels of fraud and the ability to resolve that fraud through courts would just not exist so now these people have to wait for decades to have this very basic form of financial protection or or something like a bank account even and with this technology they don't right so with this technology if i have a 50 android phone and the smart contract has data from satellites or weather stations about the weather conditions in the geography that my farm is in i can i can put value into the smart contract and the smart contract will automatically pay me out back pay me back out at my android phone and and guess what i just leapfrogged past my corrupt government not being able to to provide um a legal infrastructure to create insurance i just leap frog past dealing with insurance companies that'll probably price gouge me and and and and often not pay out and i leapfrogged into the world of hyper reliable kind of guaranteed smart contract outcomes that are as good or in many cases better than what farmers in all parts of other parts of the world have and this type of dynamic for the emerging markets of creating a way for people to control and manage risk in their economic life i think extends way past insurance it extends to them having bank accounts to combat local inflation it extends to them being able to sell their goods on the global free market of global trade without middlemen it extends to all these things that we don't really care about right because we're not farmers but are unbelievably impactful for people that don't have a bank account and their inflation rate in their country is double digits or their farm completely depends our reign or their livelihood completely depends on their ability to sell goods and they can't sell those goods because there's a middleman who essentially controls all the trust relationships but now now we have the internet and smart contracts and that might not have to be the case in in in the next five or ten years yeah so that definitely has a quality of life impact on the particular farmer's life but i suspect it has a huge like down the line ripple effect on the whole supply chain so if you think about farmers but any other people that produce things that are part of a large like logistics network like supply chain network that means when you increase reliability you sort of increase uh transparency and control but like where any one node in that supply chain network can formalize the way it operates in in its agreements with others then you could just have a very like at scale transformative effect on how people that down the line use the services that you provide the products that you create operate so like it's almost hard to imagine the the possible ways it might transform the world i i wonder how much friction there is in the system i guess currently that uh smart contracts might remove that's so that's a that's almost unknown you can sort of hypothesize and stuff but i wonder i've seen enough bureaucracy in my world in my life to know that smart contracts in many cases would remove bureaucracy and i wonder how the world will be once you remove much of the bureaucracy coming from the soviet union where i just have seen the life sucked out of the innovative spirit of human nature by bureaucracy i wonder you know the kind of amazing world that could be created once bureaucracy is removed yeah i i i think it's i think it's fascinating how the world can can evolve i i think this extends a lot further than people think into many many different parts of the global economy it might start with nfts for art or it might start with defy right or it might start with fraud proof ad networks next we we don't know what it's going to go to next but i think the implication of people being in a system of contracts that holds them accountable and guarantees contractual outcomes regardless of a local legal system is something that i think extends you know to the supply chain you can prove that goods were sourced in an ethical way and you can prove that in a way that can't be gamed that'll change buying power and supplier power and and how people produce goods that we all consume and then on the political level i personally think that in a number of decades we could literally be in a place where politicians can commit to a certain set of smart contract um kind of budget definitional kind of results for example you know we discovered oil i promise as a politician i'm going to take the oil and i'm going to redistribute it to all of you well that's wonderful that's a great idea sounds very nice when you when you're running for office why don't we codify that in a smart contract and why don't we put those conditions very solidly on a blockchain and then once once you you you've been elected we'll just turn that one on and it'll it'll it'll distribute the money just like you said and everything will be fine i i personally think that this new level of systems that allows trustworthy collaboration between everybody between supply chain partners ad network users the financial system insurance companies and farmers all of these are just interactions that require a trusted entity or in this case a trusted piece of code to orchestrate the interaction in the way that everyone agrees yeah one of the things that makes the united states fascinating is the founding documents and it's fascinating to think of us moving into the new in the 21st century to a a digital version of that so the constitution a smart constitution no offense to the uh paper constitution but and i would change that would have transformative effects on politicians and governments holding people accountable oh man i that's so that's so exciting to think that um we might enforce uh accountability through the smart contract process exactly why can't that happen anything that we could codify into a smart contract and anything that we all agree is the way the world should work and then anything that we can get proof about right anything that a system somewhere could tell us happened those are the pieces of the puzzle right we need a trusted piece of code we need to have agreement that that's how the world should work and we need a system that will tell that trusted piece of code what happened as as long as we have those three things we can theoretically codify any set of agreements about uh about about anything where those three properties uh take hold i wonder if you can apply that to like military conflict and so on uh recently uh the biden announced that we're going to pull off from afghanistan after 20 20 years in the war i wonder there's a lot of tobacco debacles around war in afghanistan and invasion of iraq all those kinds of things i wonder if that was instead formulated as a smart contract like uh that might have actually huge impact on the way we do conflict so you think of uh smart contract as a as a kind of win-win situation where you're doing like financial transactions or something like that but you could see that also about military conflict or like whenever two nations are attention with each other different scales of conflict that you can have conflict codified and that would potentially resolve conflict much faster because there's honesty transparency and control within that conflict because there's conflict in this world and i i again very very inspiring to think about the the kind of effects it might have on the on on the negative kinds of contracts and the tense painful kinds of contracts i i haven't thought about that as much it's actually kind of scary the stuff you're you're thinking through now with like the war contract or something you know that's not in the white paper we don't have anything about war contracts or anything again this is the the russian uh we're both russian but i'm a little more russian uh in the suffering side maybe i read way too much dostoyevsky and military kind of ideas but anyway holding politicians accountable in all forms i think is really powerful is there something you could say as a small side on how smart contracts actually work if you look at the code is there some nice way to say technically what is a smart contract what does it mean to codify these agreements the actual process for people who might not at all be familiar i i think you just write it into code that operates in this kind of decentralized infrastructure you you usually write code that runs in a central server somewhere now you write code that runs um across a lot of different machines in this decentralized way and then after you write it you need services and that's where oracle's come in they provide all the services so just like you would be writing code in web 2.0 land running it on a server somewhere and using an api here you'd be writing code putting it on a decentralized infrastructure like a blockchain or a smart contract platform like ethereum and then you would be using various services in the form of oracle so they'll just be called oracles or decentralized services instead of apis and you're you're basically composing the same type of architecture except it's hyper reliable at the moment it's a little bit less efficient because you know the state there's an early stage to to our industry but it provides this extreme level of reliability and transparency which for certain use cases is an absolute critical component and is completely reinventing how they work so i i think people should look at what are the use cases where that trust dynamic can be so heavily improved and that's probably the ones where this is maybe initially useful but i mean just to emphasize i don't think people realize when you say code that we're talking about non-obfuscated actual program like you can read it you can understand it yeah and it's there's something about uh maybe this is my computer science perspective of like software engineering perspective but there's something about the formalism of programming languages which enforces simplicity and clarity and transparency and because it's seen to everybody i mean simplicity is enforced there's no there's something about natural language like language as written in the constitution for example where there's so many interpretations with the the nice thing about programs there's no there's not going to be a huge number of books written about what was meant by this particular line because it's pretty clear like programming languages have a clarity to them that natural language does not and they don't have ambiguity which i think it's important to pause on because it's really powerful it's really difficult to think about i think we live in a world where all the philosophers and legal minds don't know how to program so i think not all most don't and so we don't often see the philosophical impact of this kind of idea that the agreements between humans can be written in a programming language that's a really transformative idea that i mean yeah it's it's uh it's an idea that's not just technical it's not just financial it's philosophical it's rethinking human nature from a digital perspective the like what is human civilization it's interaction between humans and rethinking that interaction as a digital interaction that is managed by programming languages by programs by code i mean that's that's fascinating that we'll look back at this time potentially as one where us little descendants of apes did not realize how how trans how important this moment in history is like human beings might be totally different a century from now because we codified the interaction between humans that might have more of an impact than anything else we do today you think about the impact of the internet one of the cool things is the digitization of data but we have not yet integrated the the tools the mechanisms fully that use that data and interact with humans yet and that's what smart contracts do i wonder if you think about the role of artificial intelligence in all of this because your smart contracts are kind of agreements maybe you disagree with this but at least the way i'm thinking about it is agreements between humans or groups of humans but it seems like because everything is operating in the digital space that you can integrate non-humans into this or ai systems that help out humans managed by humans like what do you think about a world of hybrid smart contracts codifying agreements between uh hybrid intelligent being networks of humans and ai systems yeah yeah i think that makes i think that makes perfect sense in in terms of ai um i'm not an expert right so it might be a bit simplistic or naive my my ideas in in this field i i think you know everyone saw the terminator movie right everybody kind of saw the terminator movie in the 90s and it was like this is really scary um i personally think ai is is is amazing it makes makes perfect sense i think it will evolve to a place where people have you know just to understand i work in the world of trust issues right i work in the world of how can technology solve trust and collaboration issues using encryption using cryptographically guaranteed systems using decentralized infrastructure right so that's the world that i've been inhabiting for um you know many many years now building smart contracts for seven or eight doing stuff before that it's it's it's kind of what i'm focused on so i view ai through that same lens and my brain naturally asks well what is the trust issue that people might have with ai and my natural kind of response is well let's say ai continues to be built and improve at some point i have no clue where we are on this now i've i've seen different ideas that were very far from this i've seen other ideas very close to this at a certain point we'd arrive at a place with ai where we would be a little bit worried about just how much it could do right we might be worried that ai could do things we don't want it to do but we still want to give ai a level of control over our lives right so in my world that's a trust issue and the way that that trust issue would be solved with blockchains is is actually very straightforward and i think in its simplicity quite powerful you could have an ai that has an ability to do and control key parts of your and our lives right but then you could limit it with private keys and blockchains and create certain guard rails and firm kind of walls and limits to what the ai could never go past assuming that encryption right that encryption continues to work right and assuming that if it's not that ai's specialization to break encryption that it wouldn't be able to do that right so if you have an ai that controls um something very important whatever it is shipping or something in defense or something in um you know the financial system whatever it is but you're sitting there and you're kind of worried hey you know this thing is unbelievable it's coming up with things i you know we wouldn't have thought of in 100 years but maybe it's a little too unbelievable um how do you limit it well if you bake in private keys and you bake in these kind of blockchain based limitations you can create the conditions beyond which an ai could never act and those could once again be codified in the very specific um unambiguous terms in which you described which once again in my trust issue focused world would solve the trust issue for users and make them comfortable with using the ai or seeding control to the ai which i think in more advanced versions of ai will continue to be a concern right this is fascinating so smart contracts actually provide a mechanism for human supervision of ai systems for the encryption very encryption heavy so it's not about like is it smarter than us it's about will the encryption hold up yep so we that's based on the assumption that the encryption holds up i think that's a safe assumption we can get into that whole discussion but from quantum computing but cracking encryption is very difficult that's a whole another discussion right i think we're safe on the safe ground for quite a long time assuming encryption holds i um there's a space that uh is at the cutting edge of general intelligence research in the ai community which is the space of program synthesis or ai generating programs that's different than what you're referring to is ai being able to generate smart contracts and that to me is kind of fascinating to think of especially two ai systems between each other generating contracts sort of almost creating a world where most of the contracts are between non-human beings i i think an ai system as i think about it and once again this is not my field this is something i might watch a youtube video on or just see something interesting about at some point um i think if i were to just reason through it even even now i think the highly deterministic and guaranteed nature of smart contracts would probably be preferable to an ai because i'm guessing an ai would have a lot of problems with dealing with the human element of how contracts work today right so an ai for example couldn't pick up the phone and call you know dave at a bank to do a derivative and kind of discuss with dave and have a call with him and kind of have a conversation and make him comfortable and tell him it's going to be fine and kind of smooth out all the weird you know social cues that have to do with making certain derivatives i'm assuming that that's a pretty complicated neural map ai kind of problem um yeah so if i think about it the deterministic guaranteed nature of smart contracts probably would and and if assuming they're accessible to ais could actually interestingly enough be the format that they prefer to codify their relationship with non-ai systems and very possibly other ai systems right because it is very um i mean it's pretty it's pretty guaranteed right all the other types of contracts that an ai could go out there and seek to do would require you know some language processing around the law and i think um uh i don't know if this is a term but probably not a smart ai or a good ai or whatever the term is for a high quality ai would probably realize some of the limitations and the risks yeah yeah ai definitely dislikes ambiguity and would prefer the the determinism the deterministic nature of smart contracts i i do wonder about this particular problem and maybe you can speak to it of how smart contracts can take over certain industries in a sense or how certain industries can convert their sets of agreements into smart contracts which is uh you mentioned sort of talking to dave from the bank you know many of our laws many of our agreements are currently through natural language through words and so there is a process of mapping that has to occur in order to convert the legal agreements legal contracts of today to smart contracts that by the way ai may be able to help with but as a by way of question how do you think would convert the legal contracts on which many industries currently function today or not even legal contracts but ambiguous kind of agreements maybe they're loose sometimes into more formal deterministic agreements that are represented by smart contracts so i i think there's two um maybe two sides to this um i think the first one is actually not a huge problem where you have things like the is the master agreement for derivatives or you have these agreements that basically already reference a system somewhere right like for example many legal agreements already accept e-signature and so they're saying hey i'm going to use this computing system over here around signatures and i'm going to consider and there's laws around that and there's clauses that say signatures good enough for this agreement i i actually don't think this is a big problem for the vast majority of legal agreements that use systems already right so what you'll do is you'll swap out one uh repository or one or one set of contr system of contract settlement and you'll just say hey this blockchain system over here is my new system of contract settlement whatever it says is the state of the agreement instead of you know the centralized system over there right and so there's actually a huge amount of agreements that are already um able to to do that and i think we'll we'll do that i think there's another side to your question which is the amount of agreements that are very ambiguous that can be turned into smart contracts and i think the limitation there is is twofold first of all like like you said earlier the highly reliable smart contract and the and the lack of opaqueness and the clarity of smart contracts is is is very um high and very powerful and very clear and it's in my opinion going to be much much easier to take a smart contract and turn it into a set of natural language explanations and just say hey um you know this is what this does right so i think that many contracts are and even now in decentralized finance and d5 and decentralized insurance they're basically being rebuilt in this format and and and that rebuilding will make them clearer like you said and then restating those in natural language and explaining to people well you know if the weather does this it'll i think it'll actually be a lot simpler to explain to people what the contract is about smart contracts it's a natural language i didn't even think about that so that's that's you're saying that's doable and natural and easy to do because there's so much clear right there's there's that forced clarity that you talked about i think the second um aspect of this problem is the nuance around what contracts can be made unambiguous and i think that comes down to often comes down to proving what happened which is where oracle networks and decentralized oracle networks and chain link would come in and our experience there is you know quite extensive over the many years that we've worked on many different contract types i think what it fundamentally comes down to is whether there is data so we're not going to be able to make a hybrid smart contract about whether somebody painted your house the right color blue we're just not going to be doing that because there's no data feed that tells us that your house was painted blue or that it was the right color of blue you know unless somebody sets up a drone with a color analysis tool and they generate that data which by the way could be possible right they could there could be if there's enough demand then the service would be created that has drones flying around that's telling you about the colors of you know all this kind of stuff so if there's actual demand that that would be created and because because there'd be value to connect that data feed to the smart contracts and so on i i think i think you have it unbelievably right because there there are already insurance companies that use drones to monitor construction sites from overhead and see how many people are wearing hard hats yeah and if the percentage of people wearing hard hats isn't sufficiently high then you know the policy is voided and so in that case there is a data source and that data source can be put into a hybrid smart contract so the limitation of hybrid smart contracts is is there a data source or a set of data sources to create definitive truth to settle the contract and eliminate ambiguity and then as you said i think as people realize that smart contracts are a format in which they can form agreement about things like that insurance product around you know how many people are wearing hard hats if i'm the construction site owner well you know i would really like a guarantee that your insurance policy is going to pay me out if everyone is wearing hard hats and in that case there is demand for the data and people will generate the data and i actually think the insurance industry is interestingly a precursor of this because they're so data driven you already see insurance companies paying iot companies to put data into their customers infrastructure at the cost of the insurance company to generate the data that the insurance company uses to make a policy for the customer so you basically already have people who really want to price data into their agreements when they're sufficiently high value paying for their own customers to get data sensors into their infrastructure and i think as smart contracts become more of a requested format or data-driven contracts become more of a format there will be a growing demand about proving what happened through data so it'll be motivating totally new data fees being created by the way the the insurance industry broadly the revolutions there will be huge i've worked quite a bit with autonomous vehicles semi-autonomous and just vehicles in general the insurance industry that by the way makes a huge amount of money but is using very crappy data fees uh revolutionizing how like not by crappy i mean very crude like literally the insurance is based on things like age gen like basic demographic information as opposed to really high resolution information about you as an individual which you may or may not want to provide so you can choose from an individual perspective to provide a data feed and there like the the um the power of insurance to the indiv to enable the individual to empower the individual could be huge because ultimately smart contracts motivate the use of data the creation of new data feeds but leveraging the the whatever service it provides in truth as opposed to some kind of very loose notion of who you are so that i'm not again not sure how that would change things but in terms of um the fundamental experience of life because i think we all rely on insurance not just in business but in life and grounding that insurance and more and more accurate representation of reality might just have transformative effects on society well just to mention one quick thing that you said where i noticed another trust issue you said the user might not want to share their data yes so what you could actually do and what we've already worked on is you can have a smart contract that holds the data and evaluates the data of the user without sharing it with the insurance companies and the insurance company knows that the smart contract will evaluate it according to the policy they don't need the data and the and and the user can provide the data knowing it'll never touch the insurance company because it's only provided to the smart contract and suddenly you've solved another trust issue because an autonomous piece of code can evaluate information separately from the interests of both of the counterparties and so this is the recurring theme i think you're seeing this recurring theme where there's a trust issue people can't use the system they can't collaborate they can't share information that would make a better agreement for both of them they can't you know solve a risk in their daily life they can't participate in a market they can't have a bank account because nobody will give it to them because you know they can't give it to them in that legal system and once you have an autonomous piece of code that can also know what's going on thanks to oracle networks and that combination of the code and the oracle network for the hybrid smart contract the same pattern just recurs it's it's really the same pattern and and this is why i keep saying trust issues it's because i basically almost every contractual trust issue that i see where there is a piece of data to prove and settle the trust issue in a way that works for both parties there is no reason not to use an autonomous highly reliable contract and piece of code and i have to tell you i've seen this in in a lot of different industries i've seen it insurance ad networks global finance global trade those are all multi-trillion dollar industries and then there are there are other smaller industries like even even one of the first smart contracts we worked on many years ago was for search engine optimization firms where they would tell you hey i'm going to raise your search engine ranking give me the money and people wouldn't want to give them the money because they they never knew if they were going to do it and then the search engine firm doesn't want to do any work thinking they'll never get any money so we just initially even came up with a system where you could put bitcoin into a smart contract and it would be released based on whether the search rank of a website got to a certain level on google for a certain keyword right and so the trust problem was solved but it's just the same story right it's kind of like trust issues around ai trust issues around financial products trust issues around insurance trust issues around social media whatever it is i i think that's what um people looking at this industry really need to understand and once they do understand they realize what this is all about this is about redefining how everyone collaborates with everyone about everything where we can prove something through data you've mentioned confidentiality and privacy that you don't the parties don't need to necessarily know private data in this interaction you talk about confidentiality in the in the white paper for chain link 2.0 can you talk more about how to achieve confidentiality in this process sure sure absolutely um so i think you once again need to think of the contract as existing in two parts right you have the on-chain code and then you have this off-chain system called the centralized oracle network so the question is really what portion of the contract should live in what part of these two systems right so if you want to create transparency you should put more information on chain because that's what blockchains are very good at they're public transparent but they don't necessarily have privacy well those you can see how those two things are a little bit kind of completely uh diametrically opposed right yes so i i do i do think and i do see blockchains working on on-chain encrypted smart contracts that's very inefficient it has a lot of um nuances around it that i think will appear at some point i think until it appears you have an option of taking a part of the computation and putting it into the centralized oracle network we actually did an entire paper about this that we presented at stanford in february of last year uh something called mixicles which basically talks about how you can take an oracle network and you can put a portion of the computation into the oracle network assuming that you're comfortable with that limited set of nodes knowing what the computation is and you can actually provide additional confidentiality through special hardware called trusted execution environments that you that all those nodes are forced to run so they won't even know what they're operating and so at the end of the day if you look at a hybrid smart contract as gaining functionality from its own chain code and gaining other functionality from its off-chain the centralized oracle network component you can place the part of the computation that you would like to be private in the decentralized oracle network because you can control the set of nodes you can control the committee of nodes and you can require that they run certain hardware to keep the information private right so you could basically make a derivative that um or a binary option is the example used in in the mix paper where the payout happened on chain but it was actually impossible to tell what the outcome of the contract was so the the outcome of the contract was computed in the centralized oracle network and then there was a switch that that triggered who received the payment but from who from from the point of view of analyzing the on-chain transactions and seeing um who received the payment or or what the outcome of the contract was you couldn't you you couldn't derive that you couldn't backward engineer what that was but the users of that hybrid smart contract still had on-chain code that guaranteed them that as long as the decentralized oracle network found a certain outcome right determined a certain outcome that the relevant user would get paid and there was still a place to put value right so there there is this kind of fundamental tension between confidentiality privacy which is very important for many contracts which is critical to many contracts and the public and transparent nature of blockchains which i think eventually will be solved through encrypted on-chain smart contracts that'll take some time i think that'll take years in my opinion and before we arrive there i think people will put the private portion into the centralized oracle network once again going back to what the decentralized oracle networks do they seek to provide these services right so the ability to do a privacy preserving computation is perhaps a service without which a certain type of contract might never come into existence in the form of an on-chain hybrid smart contract and so this is once again what we see the centralized oracle networks and decentralized services doing is providing people these tools and building blocks to compose you know like i'm i'm great at making these derivatives contracts but i can't make them until unless i can retain the privacy of them and our goal is to provide the infrastructure that gives you as a developer and as a creator of smart contracts that capability and what we've seen is that as we provide that capability people create more which is also really the story of the internet right the story of the internet is it was really tough to do e-commerce while everything was in http and credit cards were transmitted publicly and so e-commerce was kind of tough because how am i going to send my credit card over public unencrypted channels right but the second https appears e-commerce becomes a lot easier because i can put in my credit card number and it can be sent over an encrypted channel and you know it's not at risk and so i can participate in e-commerce as long as i have a credit card i i think those types and i'm sure that was unexpected right i'm sure at the time that was an unexpected outcome from from that technology and so i think this is why we sometimes have this focus on privacy because in our work with contracts and their transition into this hybrid smart contract form we see a substantial amount of need for privacy as an inherent property of of these contracts and it'll take a while before that's possible to create the kind of technology innovation required to do that on chain i know there's a few ideas that are being floating about but so the currently distributed oracle networks provide that feature the which is essential to many contracts what brings to mind in this whole space again it might be outside of your expertise but within the world which i'm passionate about which is machine learning and it seems like very naturally because current machine learning systems are very data hungry and much of the value mined by companies in the digital space or from data they often want their data to maintain privacy so you think about an autonomous vehicle space tesla's collecting huge amount of data waymo is collecting huge amount of data it seems like it would be very beneficial to form contracts where one could use the data from the other in some kind of privacy preserving way but also where all the uses of data are codified and you can exchange value cleanly you know basically contracts over data over um machine learning systems use of different data i don't know do you um do you talk to machine learning folks that you use ideas of smart contracts or is that from outside your interest because it seems like exceptionally applicable set of when we talk about different services that might be created and revolutionized by smart especially hybrid smart contracts i think machine learning systems comes to mind to me in all industries i i don't know if you've gotten a chance to interact with those folks with those services i i think i think what you're talking about is more data marketplaces in in the data marketplace side of things um well this is actually once again very applicable because there's a trust issue at the end of the day let's say i'm trying to sell you some data you don't know the quality of the data so you don't know what you want to pay for it and i can't give you the data for you to determine the quality because i've given you the data right guess what we need an autonomous impartial agent we need an apart impartial uh computational kind of agent an on-chain smart contract with an oracle network to assess my data to write to to basically take random cross-section samples of the data assess it for quality assess it for signal from the algorithm you have which you don't want to share with me because you don't want to know the algorithm you're working on right you don't want me to know what you want the data for so now the autonomous agent takes your algorithm keeping it private from me and takes my data keeping it private from you assesses it on a random cross-section sampling for quality of data returns the scoring back to you allows you to determine a price and now you and now both you and me know that we've arrived at a fair price for the quality of my data for what you want to do with it and that's once again from what i've seen in the in the data marketplaces which are full of people who want that data for these learning models often for financial markets often for for for for other reasons this is their fundamental problem which amazingly enough there's a trust issue that is is is getting solved and i think you can see even on the face of it once that trust issue is solved uh those markets can work a lot better right i don't need to know your algorithm you don't need to know my data we both know that the autonomous agent is not under either of our control and gave us a fair assessment than a fair price and uh and that's it and we're all very comfortable with um with that we i could even make conditions that your algorithm isn't analyzing the data for something i don't want you to analyze it for or you could make conditions that the data has to have you know any number of properties and and once again you haven't leaked any signal to me and i haven't leaked any any data to you which is once again just another type of trust issue that did all of this solve so it's it's the same pattern if you work in this industry long enough or if you really look at these use cases long enough you'll simply come to the question and this is the useful question um what is the trust issue this is solving and then if you can get an answer to that question on a case-by-case basis that's when you'll understand why blockchains are relevant and then once you do that with enough use cases it becomes you know it becomes a little bit mind-blowing you've mentioned trust quite a bit uh you also mentioned trust minimization in the chain link white paper can we dig into trust a little bit more what is the nature of trust that you think about any smart contracts what is trust minimization how do we accomplish achieve trust minimization sure sure i i think it's important maybe to have a conception of of what the alternative is right what is highly reliable trust minimized off chain and on-chain computation and alternative to so this is this is just kind of how i how i see the world in these two in these two camps one camp is the traditional what i call brand based or paper guarantee camp and this is the world as as pretty much most or all people know it today this is the world where there's a bank logo or an insurance company logo or some kind of logo there's a very big building with marble arches and and columns you know it's the biggest building in the town it's bigger than the church and everybody feels very good everybody's got such a nice logo it's such a big building why don't i give them my my money why don't i i interact with them on the basis of any kind of agreement and that's good and that that is definitely better than that not being there and that is definitely a huge improvement for how people you know conduct commerce you know letters of credit from from branded um entities are very important for global trade to take place in in the early stages of global trade so that's good but it is fundamentally just a paper agreement with a legal framework behind it and if the paper agreement you have would say robinhood or somebody else suddenly has to change well it changes and you can't really do anything about it you won't be able to change anything about what happened there there's some long term service there's some other agreements around all this stuff at the end of the day um that's the brand based and paper guarantee world where it's all very vague and opaque and you're kind of hoping for the best because there's a nice logo it's been around a hundred years there's a lot of marble but a lot of marbles big buildings lots of marbles this is this is why banks have such nice buildings right it's not because they want to spend money on buildings it's to create confidence in in them as an entity in order for people to transact through them right this is why all these kind of go to cities that had gold rushes go to cities that needed banking as as a service in certain time periods they're the most beautiful buildings at least in the united states so this is the brand based paper guarantee model for which up until now there has never been an alternative right so up until now if you had a bad experience with a bank or insurance company or some some logo somewhere you would only have one option your option would be to go across the road and down the block to another building with another color of marble and another set of agreements that are fundamentally still paper brand agreements right now for the first time you have mathematical agreements you have mathematically guaranteed encryption um secured decentralized infrastructure powered agreements right this is um really the shift this is really the comparison and the alternative through which people should view all of this in my opinion because there's once again this conception that everything is fine everything works very well well it does it works fine and very well as long as nothing goes wrong and then in the cases when things go wrong which they pretty much invariably at some point do then you find out that well you know turns out they don't have to pay me or it turns out i can't trade or turns out the atms can be locked up and only give me 66 euros per day whether i'm a business or an individual like what happened in greece a few years ago right and the the reality is that once that becomes a strong enough uh kind of realization for people i think they will all just migrate to mathematically guaranteed contracts because why why wouldn't you so in in the world of mathematically guaranteed contracts kind of how do we and cryptographically secured and decentralized infrastructure powered how do we how do we evolve into that world well at the end of the day um it comes down to consensus right it comes down to an in a collection of independent nodes a collection of provably independent computing systems arriving at the same conclusion impartially that conclusion might be the transaction is valid between address a and address b address a has one bitcoin wants to send it to address b now just b has one bitcoin right so that's one degree of validation it has certain cryptographic primitives that are used certain levels of cryptography encryption and other and other methods that basically provide um clarity and and those guarantees but fundamentally it's this level of consensus that multiple independent computing systems came to the same conclusion verified that conclusion and created a sense of finality created a final state that is globally considered to be the state of a transaction and that is how it's achieved right so it's achieved by users looking at these mathematical contract systems and saying you know if i have money in a bank there's one single person who controls that money that's the bank they could choose to give me my money or choose not to give me my money and that's great but maybe there's a percentage of what i own that i want to put into another system where there's thousands of independent computing systems that are promising me you know with the help of cryptographic primitives that i will be able to always have access to this whatever this is whatever this um you know token is i will at least oh at the very least i will always have unfettered complete control and access to it so you know that's one example another example is hey we have a hybrid smart contract for something like crop insurance i as the user evaluate where this smart contract runs oh wow the smart contract runs on ethereum great thousands of nodes lots of computational uh security hash power so on and so on then i look at oh well what triggers the contract oh there's this oracle network okay it's composed of 25 nodes or 15 nodes gets data from five different weather stations you know i'm comfortable with that i have a certain level of comfort with that hybrid smart contract and its ability to provide me consensus about the transaction once the contract knows what's happened and i'm comfortable with the consensus around the event that controls the contract right because once again that event is what determines what happens with the contract and if the contract is super well written it doesn't matter if the event isn't reliable right so now i've made this determination i've gotten all this clear clear transparent information about this system that combines the contract code with a decentralized oracle network and i've made my decision to participate in this decentralized insurance kind of crop insurance policy i've sent the bitcoin or the stablecoin or whatever i have on my on my android phone and then time goes by and let's say it doesn't rain low and behold the smart contract uh returns the the relevant amount from the policy back to me i continue my life as as as a farmer and by the way the fact that that happened contributes reputation and contributes proof back to both the contract as something that can prove to other people that it has settled and the oracle network as something that can prove that it has properly assessed reality or properly triggered a contract and this is where there's you know one of many network effects where the more that smart contracts and oracle networks are used they they themselves generate this immutable unchained data that proves their value and reliability and improving more and more of that in more and more kind of use cases and more and more variants of the same contract they arrive at a greater body of proof that they like i am the decentralized crop the decentralized insurance contract for crop insurance used by a million users and my failure rate is non-existent or really low and here's my oracle network and by the way it's also settled a million of these and so it's not the logo right it's not hey what nice what a nice logo you have um on top of a building above above a train terminal or something it's much more hey there's a million people there's a million separate contracts that got settled correctly i have all the proof that i could ever need about that and it's it's not something that's very easy to gain right because real value was at stake real value was was moved around and so i i think once again the transparency aspect comes in where you're able to prove that the cryptographically enforced contracts are better that said you can still integrate the traditional banks as long as you create a data feed on the amount of marble that's in it that's included so if that's valuable to you in terms of reputation you could still integrate the marble the amount of marble that uh and the uh the size of the logo we could still keep the banks around like i think we will i think what will happen with the banks and all the insurance companies by the way is not that they'll just die or something i think it'll be just like the internet there'll be some of them that adopt this yeah and some of them that don't and some of them to do it faster some of them to do it slower and and that's an economic decision that they'll make i think their whole question is is this a foregone conclusion i mean i think you know my answer my answer is yes this is definitely going to be happening i think they still have a question of you know is this gonna change my uh industry uh but i'm seeing a definite shift in in people's understanding and i think that shift is gonna accelerate rapidly as one or two of them their competitors throw their hat in the smart contract ring and say well i have i have smart contracts i guarantee my outcomes to you what do they do for you you know it's risky just use mine and the second some of them start losing business because of that they're gonna they're gonna move very quickly because that's what all of their compensation structures and their all their goal planning structures are based around they're based around what is losing us business or getting us business yeah it's fascinating organizationally though to think about banks they're very old school and their ability to move quickly is questionable to me i just look at basic uh online banking like how good banks are creating a frictionless online experience and not and i think they're not very good and so that speaks to the kind of people who are in leadership positions at banks the kind of people they hire the kind of culture there is so i do wonder if banks will from inside revolutionize themselves to include smart contracts or whether totally new competitors will have to emerge that basically create uh new kinds of banks whether what is the uh company square i think that's a it comes up out of nowhere really with cash app and they have bitcoin on cash app whether they will start incorporating smart contracts and they will revolutionize uh the the whole banking industry or whether bank of america will revolutionize themselves from within i'm skeptical on bank of america but uh you never know it's in general i'm fascinated by how big organizations whether it's google and microsoft or bank of america pivot hard in a world that's quickly changing i think that takes bold leadership and a lot of firing and a lot of pain and a lot of meetings where the one brings up the from first principles idea that you know what the ways we've been doing stuff in the past required you know we need to throw that out and do stuff totally differently i i i know a lot of those in in in a lot of these different industries um first of all i think they're getting listened to more and second of all i think all of these places as as i look at it more and more i think they have a fundamental line of business that they try to protect and then everybody's compensation and everybody's metrics and goals is focused around that line of business so the second that things begin to impact that then everybody will be in a senior meeting and and that will be quite listened to because he will have the only thoughtful explanation as to why this is happening how how things will evolve from there i actually don't know because i you know that hasn't been the case yet but my my thinking is that there will be people who don't want to cannibalize certain parts of their business or don't want to change certain parts of their business and then there will be people who say look i think this is how the world's going to work we're going to make a very very heavy um kind of set of commitments to to put resources towards this um i already see that with with a few banks working working on various blockchain based systems but granted they've been working on those for years so i i i think all of this comes down to these these kind of quarterly earnings calls where somebody asks them hey you know i saw that bank over there launched a blockchain bond or or a smart contract derivative platform and i also saw that they made you know 10 billion dollars in revenues or or 10 billion dollars in volume or whatever it is from from that what's your plan right on the earnings call and i i promise you by the next earnings call there's a plan and then the question on the next one is well when's the plan gonna happen and then by the next earnings call it's uh plan is happening and and that's that's that's what these people are sensitive to that's what these organizations are structured around it's not completely economically like disconnected right they have this core business they want to protect it um i understand that that idea but um i think the the problem with that is sometimes it requires it requires this myopic focus right and and that's what all the innovation stuff is about every time somebody at a corporate entity is about innovation they're trying to sidestep this but but once again the incentives to maintain whatever the core business is is so strong that the innovation people even even though they they are there um you know they get i think they get a phone call and go like what are we doing for this and and and the ones that actually did good work and got ready to do something for this have have done their you know their employer and their organization a very positive service whereas the ones that aren't ready i mean you know they'll make up something and you know maybe they're really smart and they'll get it together i don't i don't know can we talk about tokens a little bit generally speaking there's been a meteoric rise of a bunch of different tokens we could just talk about bitcoin and ethereum as examples bitcoin i think cost 60 000 in value what are your thoughts in general on this rise what's the future of bitcoin what's the future of ethereum uh there's there's the uh total value locked metric that i think generalizes the different kind of value of these uh of these tokens what does the future value and impact of cryptocurrency look like if we look through the lens of these tokens i think valuing all these tokens and determining that isn't something i'm particularly great at i haven't spent a lot of time on that i've spent the majority vast majority of my time on building these systems and architecting them and getting them to fruition and getting them to a place where they operate properly on both the technical and the crypto economic and in every other and in every other sense i i think with bitcoin there is um a certain conception of non-governmental fiat money that bitcoin is really the first creator of right so there's this very powerful idea called fiat money it's basically um more or less a kind of 40-year experiment i think on august 15th of this year is maybe i think even the 40th anniversary you know government can say hey i have a currency and it's worth something and and here it is in terms of the way that governments have stopped that in the past is if anyone tries to make another fiat currency in their country they immediately shut it down right they immediately say hey this is really bad you've done something really bad it's time for you to stop don't do it anymore and it stops right that's been the history of non-governmental fiat currency bitcoin is really due to its decentralized nature the first um and possibly in some cases in many people's minds is still the only true non-governmental fiat currency now how powerful is non-governmental fiat currency i have no idea right this is why so it's really as powerful as the ideas that people ascribe to it are right so let's say people start saying like right now people are saying hey it's internet money it's the money of the internet okay great what's that worth i don't know it's probably worth a lot i have no idea what it's worth but it's as an idea as a concept to underpin the fiat money the let there be aspect of of of a fiat and of bitcoin you basically look at it and you say yeah internet money okay that could be worth whatever you know sixty thousand six hundred thousand great question right there are other versions of the world right where people say you know um there are countries that don't have a good fiat currency and i see a lot of people using bitcoin so bitcoin isn't internet money it's um countries without a good currency money so all the countries without a good currency not now use uh bitcoin and you know let there be bitcoin as this right as this conception of bitcoin what's the value of that i don't know that's a great question probably probably a huge amount of value um then there's then there's a further conception of bitcoin has some you know digital gold there's a scarcity dynamic there's there's all these other kinds of dynamics what is a portable version of digital gold with some kind of built-in um built-in scarcity worth you know kind of artificially created scarcity um what's that worth i don't know that's that's a great question i haven't done the analysis on that is the point might be worth a lot what is it all worth if all three of these things you know flow into the same fiat um kind of let there be bitcoin as these three things conception of bitcoin i don't know what that's worth i also don't know what that's worth but could be worth a huge amount so i i think it's it's not i don't think it's i personally don't think it's super important what i think it's worth or what many other people think it's worth i don't think that's that's really that important i think what's probably important is understanding what the societal conception of bitcoin is and how does that societal conception evolve over time and that interestingly enough doesn't just depend on um you know you or me or the people who made bitcoin or anything else it actually depends on current events so for example if people suddenly say i i'm more and more worried about fiat currency i'm more and more worried that governmental fiat even if it's the most reliable version of that is not as good as i thought it was maybe i should go on the paypal app and maybe i should get some bitcoin just in case what's the world where bitcoin is a certain percentage of everyone's ownership as a hedge against governmental fiat money not being so good haven't done the analysis but another example right here's this conception that's that's the conception so when i look at bitcoin what i see is a lot of these fascinating conceptions of of what the fiat let there be value of bitcoin is by the way all of them could be true um maybe some of them are true maybe some of them aren't true and and the fascinating thing is is that i've seen this conception change right so when i started in the bitcoin space the conception was micro payments the the the cost of bitcoin is low we'll have micro payments micro payments are wonderful for uh machine to machine uh transactions micro payments are wonderful in the emerging market and that's fine right and and that was one conception of bitcoin as let there be bitcoin as micro payments platform right but then the value rose and things changed there was enough expansion in certain ways and and now the conception has evolved into this other conception but but at the end of the day um i think governments have a very clear set of steps for directing the public's conception of their fiat right they say our fiat is worth this for these these reasons bitcoin doesn't have that bitcoin doesn't have an official bitcoin spokesperson that goes out and says the non-governmental money called bitcoin the non-governmental fiat money called bitcoin has value on the basis of this this this and this here's our fiscal budget here's our future plans you know our money will continue to be safe and secure and reliable and so it's what what that hole creates is a is a hole that we all fill right we all basically come to some vague kind of group understanding that you know bitcoin is worth is worth this because it is tied let is it is tied to um you know let's say all non-governmental fiat money comes into question everybody doubts it uh possibly due to inflation and everybody says you know this is nice but i'd like to keep 10 20 of my of my wealth in non-governmental fiat just in case um you know what what are those numbers i mean if that happens you know i'm guessing you can add a few zeros i like how you say i haven't done the analysis as if i'm sure a lot of people have done quote-unquote analysis but it's not it's still speculation nobody can predict the future especially when so much of it has to do with a large number of people holding an idea in their mind as to the importance of a particular technology like bitcoin there's a lot of excitement by its possibilities but the number of zeros you add is uh is an open question and nobody can do a perfect analysis except whoever created this simulation let me ask you this question who is satoshi nakamoto there's quite a few people who suggest that person is you so is it you no who do you think it could be i don't know who it is i i think if i had to guess it's probably a group of people some of which might not even be around anymore um you know obviously i'm very grateful to if this is a singular or a group of people for kicking off this entire industry and making this amazing change in the world that you know i have the the privilege and luxury of of being part of in in some small way in the work that i do um i think also this kind of focus on who is satoshi or who is in satoshi shouldn't in my opinion matter so much because regardless of who it is that in my opinion should have no substantial significant effect or bearing on the functioning or the value or the use or the or the security of of of the bitcoin system right so i think whoever it is they're probably better off not not not making that public and i think beyond that um whoever it turned out to be shouldn't matter because it has nothing to do with how the system is made useful or secure or anything else and so i think that's the um you know that's the point of view that i have now if you were satoshi nakamoto would you tell me because you said they shouldn't whoever satoshi is you should keep that private so would you tell it to me or no we're in some kind of weird like thought experiment here if if i was this guy um let me think about this which i'm not by the way i am not this person but if you were would you say it um i think uh probably not i don't see the i i i think that they would cause a lot of distraction and a lot of weird stuff and so realistically i don't think it would help anybody or even the person who discloses it but just to be clear i am not and whoever it is i think they haven't said anything because they don't want the attention and they don't want the distraction and they don't want all the problems from this and that's that makes sense to me conceptually it's fascinating to think if they're still out there and part of the the bitcoin the cryptocurrency community and um it is inspiring to think that if they're out there that they're not revealing their identity because it would be a distraction that's kind of inspiring that people are like that just like george washington relinquishing power is inspiring because it's ultimately about the progress of the community not some kind of ego driven attention scheme again very inspiring the humans at their best are inspiring what do you think about the certainty that people in the bitcoin maximalist community have about this particular piece of technology bitcoin is there something interesting they you think that you might want to say about this community or is it just is what it is i think at the end of the day results speak for themselves and bitcoin has had an amazing impact on our industry and had has had an amazing impact on the world and i think you know the result is still that bitcoin is very widely adopted and driving um the adoption of our industry in many ways so i think it's very difficult for people to say that you know bitcoin maximalists don't have something that they can latch on to and say hey there's something very real here i i think there's been decisions made by the bitcoin community and the people who made the bitcoin protocol to focus it on bitcoin and to focus in on the kind of storing of the ledger of bitcoin and the information about bitcoin and the transaction of bitcoin and to focus on securing that and i and you know i understand why that decision was made to a certain degree right it was about focus it is it was about getting something worthwhile right without adding additional features and additional risk and you know that decision is is a decision that was made and has kind of the benefits of focus and the benefits of um a certain amount of security and a certain amount of guarantees around uh bitcoin and and what that is and and the the value of that and then it has certain um limitations you know as a consequence of of of of doing less or having the system hold data that isn't related to bitcoin or not having the system hold contracts uh contractual outcomes or smart contract code so i i think it's just kind of a decision right and and i i understand why they're excited and i'm very excited i started in this industry going to bitcoin meetups and i met a lot of fantastic people libertarian people that wanted to see the world work differently and shared a lot of my beliefs and a lot of my points of view and so you know anyone who's been in the industry as long as i have um has had to come from the bitcoin ecosystem by virtue of kind of starting out that early so i have an unbelievable amount of respect and um admiration and gratitude for for bitcoin and that it exists and everything that it's done and that it birthed this industry there's absolutely no doubt about that you know at the same time whatever design decisions people make are the design decisions they make right and so they if you've made a design decision that this ledger and this thing will be about bitcoin it won't be about colored coins it won't be about op return at 80 bytes it won't be about these other kind of nuances that you don't want this to be about then that's fine that's that's fine and that's that's that's a logical decision that's that's called focus and focus has a lot of value um and a lot of great um technology products have focused on something and and done that and then there's a lot of smart people around bitcoin building um kind of additional systems that anchor their security within bitcoin and i think that's an interesting approach that could that could bear fruit i think it'll eventually require an interaction with the bitcoin protocol in more advanced ways and then there will be another question of you know what is the design decision for bitcoin is it that bitcoin will be just about the bitcoin ledger or does bitcoin want to evolve into um you know an anchor for all these other other systems and and maybe create additional data you know kind of more data on chain on the bitcoin blockchain related to that so i i'm excited to see how that evolves but until then kind of results speak for themselves and the results that bitcoin has achieved for our industry and for itself as you know kind of the dominant cryptocurrency and and the conception of our industry that people interact with first is obviously very important and something that um i think really everybody in our industry is grateful for right because without bitcoin where where where would our industry be and that's obviously something that we we can't forget what are your thoughts about ethereum in this in the chain link distributed oracle network world is it competition is it collaboration is it complementary technology what do you think about ethereum how much do you think about ethereum what role does it have yeah i think about a lot i think it's complete we're completely complimentary so there's no competitive dynamics in my opinion we are completely collaborative and complementary with ethereum and all other blockchains and all other layer twos that operate a contract right so we do not seek to operate a smart contract we seek to augment and enable smart contracts to go further in what they're able to do in fact oracle networks have some value but they don't have nearly as much value in what they do if there isn't a mission critical system like a smart contract that needs their data right so we've made our own explicit design decisions in our own and created our own focus around guaranteeing that smart contracts can go further we've already done that right decentralized finance the the rate at which we put data is to a degree the rate at which certain decentralized financial markets grow and as we put more data we see more financial products go live gaming we provide vrf so we have this kind of focus and it's a very useful useful and valuable kind of valuable for our industry focus at at the end of the day i think that smart contract platforms like ethereum made a different set of design decisions from bitcoin and others and they focused on creating the smart contract capability and and and they kind of wanted that functionality to exist and i think since then there's been a number of people that try to improve on that or try to you know make variance of that from our point of view we want to support smart contracts in all of their variations and in all of their use cases so one of the things that i i personally like about chain link is their ability uh or chain links ability and the chain link network's ability to be useful to many different chains and across many different use cases i'm personally you know a fan of ethereum ethereum's done a huge amount for our industry as well ethereum took us from a world where it literally took months to make a new smart contract by being forced to code it into a protocol you had to go to the protocol developers and you had to say hey i need a dex or i need some kind of smart contract put it in the protocol itself put it in the actual blockchain mining and kind of block generation transaction generation protocol that would take months or sometimes even over a year that was a horrible experience and and obviously very few people wanted to participate in that and so very few people made smart contracts which i was not a fan of right and then ethereum came along and um really did a lot of innovative things and introduced this approach to scriptable smart contracts where you could script all of these different conditions and i i i found that fascinating before ethereum i found that fascinating once ethereum arrived i found it fascinating after ethereum launched and i still find it fascinating and i'm i'm also very grateful to vitalik and the ethereum community and all the core developers there for taking our industry a step further so i think they absolutely deserve a huge amount of credit for taking our industry from it takes months to make a really small smart contract to it takes you know weeks to make a relatively secure relatively advanced piece of on-chain code that anybody can script and people can do audits on and you know that's that's an unbelievable leap forward for our industry and i'm i'm genuinely grateful to them for that i think the next step um in line with our body of work is how does that scriptable on-chain code become more advanced in its interaction with all of the systems and events in the real world which is in my opinion the final missing piece of the puzzle right so my body of work the body of work that i'm involved in would not be where it is right now without bitcoin by any measure it wouldn't even be where it is now without ethereum and the growth in smart contract development that they've created and now what what i think is going to happen next is there will be a lot of different smart contract platforms a lot of different layer twos some of them will be private for enterprise some of them are the republic there will be some public winners in certain geographies for maybe regulation reasons maybe other reasons there will be other public winners um you know the larger internet and and there will be a number of different people building smart contracts in different languages we are excited and you know i am excited and the chain-link community is excited and and basically there's a lot of um i mean for lack of a better word excitement in seeing our industry graduate to providing more um use cases more usable hybrid smart contracts right because once again it's absolutely amazing that bitcoin created non-governmental fiat money it's an unbelievable innovation and an invented decentralized infrastructure and and and birthed our industry it's an unbelievably um great achievement an amazing achievement that we now have scriptable smart contracts through something like ethereum once again monumental achievement in my opinion once again we still need to look to the future we need to look to how do we take the decentralized infrastructure concepts that bitcoin initially put forward that ethereum then improved upon and created into these scriptable smart contract formats and how do we expand that into the world of real world outcomes to change the global financial industry the global trade industry the global data marketplace industry you know the and and many other global industries you mentioned results speak for themselves and how design decisions have consequences you've the chain-link community have come up with a lot of brilliant designs so how do you think through the design choices that you're facing where you can't predict the future but you're trying to create a better future is there something low-level introspective advice that you can give or describe as to how you think through those decisions or high-level how you think about those decisions sure absolutely um i think i think that's a great question and i think that actually gets to the core of what the chain link network is uh supposed to achieve we are supposed to achieve a maximally flexible system so once again this is the big difference between chain link and oracle networks in general and blockchains in my opinion blockchains do not seek to be maximally flexible right they say here's my block size here's the transaction types you can you you can put in those blocks here's the contract language i have here's here's kind of my blockchain system right here's the here's the fee structure for those blocks they're going to keep getting you know kind of composed transactions are going to get put into blocks blocks they'll get connected and it'll continue right and that's a very focused type of system and that's great and that makes sense because it's focused on creating security for that category of on-chain activity which is once again a critical critical part of building a highly transparent system and something that chain link enables and you know doesn't compete with and just enables to do more oracle networks conversely have to interact with all the world's data and provide all the services that blockchains don't provide right so there's kind of a spectrum on one end of the spectrum you have blockchains that are highly secure highly reliable highly tamper proof highly transparent but are not very feature-rich for example they cannot talk to an api many of them can't generate randomness they cannot do some kind of privacy preserving computation so they're very secure and they're these kind of data structures and smart contract platforms to hold unchained code that can define conditions receive value pay value back out under conditions and create transparency around all that which makes perfect sense and then there's oracles and oracle networks that is all the world's data right we're talking about taking all the world's data and making it consumable for all the world's use cases that have trust issues so the amount of variability there is absolutely massive right it's like the the decentralized oracle network and the conditions that that decentralized oracle network needs to meet is going to vary very widely from an insurance contract to a lending contract to an ad network contract to the data sales contract that that we discussed to any number of other smart contracts so really the ability of a decentralized oracle network to flexibly address all of those requirements is what's necessary so flexibility is the goal whereas with uh on chain like bitcoin flexibility is the enemy in the sense that uh you want security the you want the focus there and in that kind of world design decisions have huge consequences and then if you look at the distributed oracle network side you want to remove the restrictions of design choices you want to provide maximal flexibility then so it's a completely separate kind of uh design framework it's a slightly different problem right because i we're not trying to define transaction types fitting into blocks on a certain timeline of those blocks being generated we're trying to say hey there's this world of services or this world of data that's not very deterministic but it's unbelievably useful to these smart contracts over here and actually they need it to even exist and we really want them to exist because once they exist it's going to completely redefine what our whole industry is known for right and define nfts are not even the tip of the iceberg they're like like the snow coming off the top of the iceberg and so our goal is to create a framework and an infrastructure and a software that allows people to compose decentralized oracle networks right so initially you can compose a decentralized oracle network of seven nodes that goes to three data sources to trigger your contract worth a million dollars and that's where you could start and then let's say your smart contract your d5 smart contract goes to a billion dollars well then you need to make some changes right you need to go from seven nodes to 15 or maybe 31 nodes and you need to go from three data sources to five or seven and you maybe need to create some some kind of what we call circuit breakers and and some other checks and you need to make sure that the centralized oracle network comes to consensus around those checks because now the decentralized oracle network isn't controlling a million dollars it's controlling a billion dollars and we have decentralized oracle networks that control well over a billion dollars multiple billions of dollars and we see them growing and getting more advanced data sources and more advanced features and then if somebody else comes and says well you know i don't really want to make a d5 product i want to make crop insurance and i have a completely different set of conditions i want this method of consensus and i want data to be aggregated in this way but not the way that you do for decentralized financial products i mean what are we supposed to tell them we're supposed to tell them no you know our decentralized oracle network can't let you do that and yours you know you can go and and wait another five years until until somebody builds it for you that's not what we want to do right what we want to do is be able to say absolutely here's an example of how somebody else made a decentralized oracle network for for weather weather insurance right um here's a template change that template evolve it to meet your needs and then someone else comes and says hey i have some some other use case in gaming right i want to make nfts related to real world sports events or i want to do whatever i want to do with with some kind of sports related data wonderful here's the framework here are your risk dynamics here's a collection of node operators here's a set of pre pre-integrated data sources here's a reputation system to assess the quality of your ensemble of nodes here's a way to scale that up as the as the value in your contract scales here's all the tools that you need to build this contract and and what we actually see now as we as there are multiple types of computations and data data sources that are provided by different decentralized oracle networks of which there are now hundreds we now see that a single hybrid smart contract might use multiple decentralized oracle networks so there might be a hybrid smart contract that uses a price data decentralized oracle network a proof of reserve oracle network a random historical network and i think we're going to continue to see this dynamic that more and more advanced contracts compose various decentralized oracle networks into more advanced use cases and this is this is the dynamic that um you know we're focused on enabling and i think it's actually a very virtuous cycle for everybody because the more of these hybrid smart contracts we enable on ethereum and other blockchains the more our industry provides real world outcomes to the larger world which is at the end of the day what i think everybody in our industry wants everybody in our industry wants hybrid smart contracts to become the way that global finance works global trade works global insurance products work because they will inherently need both a blockchain on which on which the contract itself lives and an oracle network that powers all of the other interactions right as a developer how would you recommend somebody listening to this but also me to get started with smart contracts and to get started with hybrid smart contracts well well for hybrid smart contracts i'm going to have to do some kind of shameless promotion please where let me twist your arm thank you um i i think you can go to our youtube we we have a lot a number of developer tutorials chain link youtube yeah chain link you i think you could just search shane link on youtube you should you should find it um beyond that we recently had a hackathon we where we had a huge amount of very very kind of advanced hybrid smart contracts getting built to elaborate on that you had a hackathon is that something that people can follow along like a video or there's web page traces of what happened or is there future actual hackathons that people could literally participate in there's plenty of more hackathons coming up we want to enable as many developers in web 3 and web 2 to build hybrid smart contracts as a way to redefine our industry and and kind of make all of these smart contracts come to life there are definitely going to be more hackathons so people should go and pre-register register on a list to get involved in that that's a great resource where we have a lot of speakers and a lot of educational tools they happen over a course of weeks not days so there's a long time for people to work on these things at the speed that they that they find comfortable two questions one is there kind of a hello world entry point for uh hybrid smart contracts and two on the hackathon side like what kind of stuff do you see people building at first just kind of getting their feet wet like why in terms of the kind of applications that could be enabled i mean there's there's unbelievable things that that that we see people building i i think how to get your feed with i think the hello world is probably define because it's pretty straightforward and there's a large amount of data sources that we already have putting data on chain on testnet which is the test environment in which people would build so i think d5 is probably to a certain degree the most exciting for certain people and pretty pretty expansive in terms of the tutorials and the amount of contracts to see how people have already built it i think beyond that we see people building amazing things at these hackathons in the previous hackathon we saw somebody build a smart contract that allows the rental out someone to rent out their tesla right so it allows the tesla api to give someone else access and rent out someone's tesla on the basis of a smart contract kind of coordinating payment which was you know which was kind of amazing the the more recent hackathon we saw something called d-bridge which uh is a cross-chain solution that uses oracle networks to confirm data on different chains so i think the things that people build will will just become expansive and varied in ways that i can't can't even imagine um but i i think this recent hackathon saw a huge huge list of different um different kind of winners in different categories and there's so many different categories we even have a gov tech category and a whole a whole bunch of things if people want to see what's possible they can go look at the winners i think that's that's probably a good idea at yeah that's that'll be on the side of the hackathon there's a blog related to that and we're going to have more of these and once again our our explicit goal is to take our industry into this world of hybrid smart contracts which which just benefits everybody it makes more on chain activity it it helps provide real world value to the average person from all of this infrastructure period and at the end of the day i think that it just redefines what our industry is about through use cases right because if you only learn through our industry from the point of view of a single use case like the nft use case or some other use case that's what our industry is about and the more of these use cases that people can make available to the average person or to the fintech world or to the insurance world or wherever the faster our industry will not just be about bitcoins or tokens it will be about changing global finance changing global insurance changing global trade and and that's the change in the world that i and a lot of other people in this industry i think got into this for now it's funny you've mentioned about you've had a lot of kind words to say about bitcoin and um ethereum as important technology that paved the way for the future and you somehow did not mention one of the most profound pieces of technology which is dogecoin what are your thoughts about this particular uh uh revolutionary technology and what are your thoughts about deutsche coin going to the moon to mars and outside of the solar system i think dogecoin is um is a very interesting kind of uh probably closer to a social experiment than than anything else isn't everything a social experiment yeah i i guess that's fair to to a degree yeah um i think it's fascinating how that's evolved um i think the people that made it made it with certain you know goals in mind and then it's kind of taken on a life of its own i don't fully understand exactly why it's taking on a life of of its own at this point um i once again i don't spend too much time thinking about you know different tokens and and and how they're evolving i'm much more focused on on the launching and um the technology around trust and all those kinds of ideas but you know i think one of the fascinating things about doshcoin is how technology that is that leverages social dynamics that technology's ability to utilize fun and memes to spread i think it's really interesting i i don't think it should be discounted as a as if i think i tweeted today something about like the fundamental force field of fun uh that fun has an effect on the space time so general relativity describes how mass and energy can curve space time and i was just giving an example that when life is fun it seems short when life is not fun it seems very long so fun has a very similar effect on space time like in current space time in that same sense there there is a power to the meme and i think dogecoin illustrates that i think elon is an example of somebody that uses dogecoin i don't know his philosophy but in particular in this aspect but he does use it effectively to excite the world in a fun way about the possibilities of future technologies like cryptocurrency i think the bitcoin world is very serious right now and we've spoken to about bitcoin maximalists there is very little space for fun and joking in the bitcoin world but there's still a little bit of fun and uh humor left in the dochcoin world in that sense i think it's exceptionally powerful to inspire to excite to uh to be able to talk about stuff without um without the seriousness of financial impact that uh now certain cryptocurrencies have like bitcoin so i i keep an eye on i i've previously mentioned that dogecoin i think is a fascinating piece of technology because i do think cryptocurrency is much bigger than uh the the technology like that you focus on there is also social element that you also spoke to that's uh i think not quite yet understood and it's fascinating to watch especially as it covals with the different tools on the internet different social networks social network mechanisms on the internet so i'm a huge supporter of dogecoin because i'm a huge supporter of fun i'm fascinated to see how it'll work out you think i'll go to the moon you think it'll be the first cryptocurrency to land on the moon i i couldn't say i i haven't i haven't done the analysis as i've said before i haven't done the analysis well yeah no matter what i do hope we uh we'll get humans back on the moon and uh hopefully get humans on mars soon coin bitcoin or not let me ask you about books and movies what books and movies in your life long ago when you were a baby sergey or today had an impact on you maybe you would recommend to others and and maybe what ideas um you took away from those books movies coloring books children's books blogs whatever yeah yeah sure um so i think one of the things that had a very big impact on me were plato's dialogues and particularly protagoras and gorgeous as as as some of the two initial ones i i think what plato's dialogues do very well is they give people a clear picture of what dialogue looks like and what the assessment of information um probably should look like right and how the dissection and analysis of an idea is very important and how it can actually be taken in either direction but at the end of the day that the process of eliminating um kind of this fuzzy thinking and arriving at whether it's an external dialogue or an internal dialogue about an accurate picture of reality is actually very important and so i think i'm very lucky to have read the dialogues when i was uh in my early teenage years and it had a very large impact on me because it kind of showed me that you know nobody knows what they're talking about i would i would play out dialogues in my mind and i would engage in certain dialogues with with um with different people and what you know the platonic dialogue showed me was kind of how to tell when someone has no clue and a lot of people are very good at um kind of say they have a clue right saying like here is how the world works here's what you should do with your life here's what you should do with your time here's what you should do with your money here's what you should do with your attention here's what you should do with all these things and i think the ability to evaluate information generally is something that is surprisingly under taught i i don't actually understand why there isn't a course in like high schools or universities that's just like here is how you evaluate information here's how you engage in external dialogue and internal dialogue to arrive at an accurate picture of reality rather than the picture of reality that other people want you to have for their benefit most often right and at the end of the day i think that put me down a path to really try and understand beyond that um i think biographies have had a very large impact on me um you know plutarch's greek and roman lives after i read plato i started reading a bunch of stuff greek stuff i was just like these greek guys they really know how it is you know they did this 2000 years ago and they still got it right there's something here it's kind of this like theory of time around um the value of intellectual ideas right if an intellectual idea has survived the test of time it's much more valuable than the intellectual idea that i just came up with 10 minutes ago haven't told anybody and hasn't gone up against you know the all of the kind of rebuttals so so what's your favorite what would you say would be a most impactful biography that you've come across i don't think it was those greek roman biographies because they were very uh far away i think that um probably one of the most impactful ones that i can remember recently is around uh vanderbilt and so vanderbilt was these uh was this guy who basically without that much of an education he would invent or work with people to make these steamboats and then he had a lot of acumen around creating certain monopolies regardless of you know what was um right or wasn't right and then fascinatingly enough it all hinged on like a supreme court case that decided if monopolies were acceptable um in in the form of state created monopolies or not and if they were you know if it was deemed that the greater monopolies were acceptable he would have had a huge problem this guy but it was deemed that state created monopolies through these um licenses for steamboat uh routes was not acceptable and that did two interesting things that unseated um some kind of old-time landed gentry in the americas in like the 1830s and 40s and it um you know basically made him right and he saw it before other people so i i think this i think vanderbilt was a very interesting um personality first of all of all the of all the biographies that i read is um is somebody who really took um took the situation in hand and kind of took action to achieve an outcome which i i think was uh was an amazing uh amazing um result the fascinating thing by the way is or amazing way of looking at things the fascinating thing by the way is that the ferries now in new york harbor are all um run as a public good so the fascinating thing is that the guy he he focused on an industry and he worked on something that was so important that it ended up becoming a public good and i i think that that that's an interesting conception of of how to look at this industry um i think there's um a lot of economics dynamics around this industry but i think i might have sent this i might have said this somewhere else before but really the success of someone in this industry is whether they're able to make a linux or http or an https like system that lives on for a very long time and is essentially a kind of public good it's a success of an idea even if that idea is originally sort of a capitalist idea about that's grounded in financial benefit success of it is if it becomes a public good it is so universal it is it is so fundamental to the quality of life that it's a public good it's deemed to be so valuable that it should be a public good yeah i think so i think that's a pretty uh a pretty good definition of success that you you work on a body of work and that body of work isn't just some commercial enterprise it's um it's a body of work that whatever commercial aspects or economic incentive aspects it might have it eventually is so important that it becomes um critical to how society functions uh i'm personally quite um you know lucky and grateful to be in my opinion working on something like that with an amazing team and an amazing community that uh seems to really very much care about this hybrid smart contract transparent uh world that uh you know a lot of people on our industry realistically i think this is why a lot of them signed up you know this is why i came into our industry it wasn't because bitcoin it was it was because bitcoin was a picture of how the world could work in so many other ways and that picture of how the world could work in so many other ways um attracted me a very long time ago and i think that all of this stuff will eventually become a public good i think it'll become so critical to how societies function internally and internationally that just like there are systems you know like the federal reserve like global payment systems like all these types of things i think eventually all of the all of this technology will be baked into these society societally critical systems and if i in our community and the people i work with in the body of work that we're working on can make some kind of contribution to that shift um towards a fair economically fair transparent society from my point of view it's a very very worthwhile body of work in in terms of the show you you also mentioned the show you know one of the shows that i really um seem to like more and more for some reason is uh star trek not the old star trek i don't really get the old star trek the special effects aren't good enough star trek like the next generation and voyager yes and um deep space nine and all those i i think whenever i happen to watch a star trek show again i have a very simple conception in my mind that i really didn't have whenever i saw it way back when it's that this is what the world looks like if technology takes us towards a utopia right so i think there's this fascinating thing where technology can take us towards the utopia or towards the dystopia and in my mind those kind of three star trek shows are a picture of what human civilization looks like if everybody's technological ambitions successfully take us towards a utopia right because in the star trek universe you're not seeking money or you're not seeking safety or you're not seeking you're not really seeking anything for yourself everybody you know within maslow's hierarchy of needs has has gotten so many things for themselves that their that their goal is learning and discovering and or helping and i i think there is this conception of human life once the baser needs are satisfied and at the at the end of the day i think that's what technology generally can elevate um all of human civilization to right it can elevate us to star trek world where if people want to invent they can do that all day and nothing else if people want to explore the stars they can explore the stars and and they don't have to worry about economic scarcity or any number of these other conceptions so i i don't know what the most impactful on me shows have been but for some reason recently star trek um in this in the newer variant um not the most new new star trek shows those shows are a little strange the the kind of middle star trek universe where where everybody is doing something with like a very uh important purpose and and nobody's thinking about like where's my paycheck or where's my you know where's my whatever they're all kind of like we have to discover the formula to this to save the planet over there and literally every episode you're discovering a formula to save a planet right of some kind or a universe or ecosystem or whatever and it's and you're looking at you're like you know this this this is this is like this is a pretty good place to end up this is where we might want to end up so it gives you hope i mean it's funny that we don't generating we don't often think about the i think it's very useful to think about positive visions of the future when we're trying to design technology there's a lot of sort of in public discourse a lot of people are thinking about kind of how everything goes wrong it's important to think about that sometimes but in moderation i think because you there's not enough in my little corner of artificial intelligence world people are very kind of fear monger centered there's a lot of discussions about how everything goes wrong important to do but it's also really important to talk about how things can go right because we ultimately want to guide the design of the systems we create to make things right and i think with hope and optimism not naiveness but optimism you can actually create a better world like you have to think about a positive a better world as you create because then you can actually create it um yeah i'm i'm one of the people who thinks that having an optimistic view of the world is better for design and creativity than having a pessimistic one it's hard to design when you're in fear uh do you have advice for young people speaking of being excited about and hopeful about the future world do you have uh advice for young people today in uh computer science world and software engineering world and crypto world but maybe in any world whatsoever for life how to pick a career or how to live life in general i think the thing that that young people should do is is not any one specific thing for any any one specific young person i think what they should do is what they won't be able to do in the later stages of their life yeah and the way in my opinion from a framework point of view to think about that is that the amount of obligations and the amount of time that a person has seems to just diminish over time right so the amount of free time they have right so you start your job you get a bunch of responsibilities some something with your partner's spouse more responsibilities kids probably even more responsibilities and soon enough the time that you have to educate yourself to travel to you know experience the world however create whatever creative endeavor you're interested in um slowly but surely disappears i think this is something that you know young people don't fully realize they they assume that the world as it is now and the amount of free time that they have to travel to educate themselves to make new friends to do all these things will somehow maybe diminish by ten percent it won't diminish by ten percent it'll diminish by 90 yeah and the 10 that you have you'll be resting to get back to work and get things done so yeah what i think young people should do and this is why it's very different for each of them right i can't tell young people hey you should study philosophy travel and start um your own enterprise to achieve something worthwhile in the world right that might be something that's good for me with my values and my um kind of worldview but for other people might be something else i i think the way that they should conceptualize it is imagine if over the next um 10 12 years the amount of choice that you had about what you could do was cut down by 90 percent what would you and this is you know copying from this kind of just jeff bezos regret minimization framework in that framework it's like what would i regret not doing at 80. and that's kind of meant to create this long-term view and make these decisions now that'll get you to a long-term future that you can look back on and be proud of your life right what i think young people should do is they is they they should say to themselves look if i never get the chance to travel for as long as i live assuming that after 25 after 27 after 29 that's the case how will i feel about that if i never get to start a company after 25 after i get married after i have kids how will i feel about that and whatever they feel the worst about is what they should do whatever they feel like when they say to themselves you know if i don't travel now i will never travel and they feel horrible about that they just have an overwhelming fear and disgust at themselves in that type of state at 25 27 29 that's what they should do and they shouldn't listen to anybody else um i i i let me put it through this way if you're really smart you're gonna make it anyway there's a lot of people putting a lot of pressure on you because they're afraid whether you're going to make it if you're really smart you're going to make it anyway if you're not really smart you're screwed anyway so either way just relax with it and use your time well to do the the the things you would most regret not doing that's really fascinating i i wouldn't i wouldn't say relax i would say very much cherish the free time yeah the discretionary time that you have from the age of 18 to maybe 25. yeah because at 25 everyone's going to start looking at each other and asking what have what have i achieved like my friends have achieved i haven't achieved and then by the time you get to 30 you're going to look at each other again and go well my friends have a family or a company or a phd or whatever what do i have and the pressure will just increase and it'll increase so much that even if you want to go and do the fun thing it will not be fun because the pressure yeah of comparing yourself to your friends at 25 or your peers at 30 will be so great that you will no longer it will no longer be normal for you to be in a hostel at 30 you know kind of like living it up right if if and and this is why i also can't tell you specifically what it is for me it was getting an education in philosophy that was rigorous and in depth it was traveling and it was starting an enterprise that i thought were that was worthwhile that i directed that i could make into something great that's what it was for me for other people it might be something with a band it might be something with painting it might be an education you you by the way should also should not assume that your ability to get an education will um improve all of those responsibilities will take away your ability to get an education so if you value having an education if you value being a deeply educated well-rounded person with a wide array of knowledge on a wide array of topics capitalism will force you to specialize that's what it's good at it's going to take you it's going to fashion you into a very specific tool for a very most people into a very specific set of tasks if you want to have an education in something get it now if you want to travel somewhere travel there now if you want to you know do some kind of creative endeavor that you doubt whether you'll have time for in the future do it now you won't have time for it in the future you won't have time to read philosophy books all day unfortunately you won't have time to fly to you know italy and kind of hang out with people if you're serious about your life you're going to get more responsibilities you're going to get more stuff to do and so my advice to you is do not piss away this rare unique discretionary time and if your friends are get new friends get smarter friends get people who are using the limited time they have better yeah um that's my advice so it's just a quickly comment it's brilliant you know to reframe high school and undergraduate college education sometimes people want to quickly get it over with but one thing i remember thinking and it's very true about high school it's one of the only times in in your life you'll get a chance to truly get a broad education you don't often think of it that way but it's a chance to really enjoy learning things that are outside of the specialty that you'll eventually end up with and that's how college education is and a more fun side i played music i i did martial arts and we offline mentioned played video games i find it fascinating and brilliant what you said which is the world will will not give you a chance to truly enjoy many of these things and truly get value from many of those things uh once you get older i find it exceptionally difficult to enjoy video games now there's so much stuff to do so responsibility and i at the time when i played elder scrolls and baldr's gate and diablo ii and at the time i thought maybe that was a waste of time but now looking back i realize because i always thought you know let me get the career first and then i'll have a chance to play video games that's the way i was thinking you know it was a waste of time because i should really progress on the career and then i'll have time to play video games no the reality is that was really fulfilling those are some of the happiest travel experiences of my life as me traveling to those virtual worlds and spending time in them and it was really fulfilling and they stayed with me for the rest of my life and i get to experience echoes of that when i play video games these days for an hour here an hour there like one hour a month or something like that but even those experiences as silly as they are they seem like a waste of time at the time enjoying them fully unapologetically and you know in a framework exactly as you said would i regret being the kind of person who've never played those video games and i can for myself honestly say that yes uh look when i'm on my deathbed i'm i'm glad at boulder's gate yeah we built ballers gate 2 and and all those uh arena daggerfall morrowind and all the elder scrolls games and um yeah the things that don't necessarily fit into this kind of storyline of what a career is supposed to be travel and all those experiences that you might i think i just like to say one one one final quick thing on on this um i i think this extends to really hard things as well it extends to the things you want to do but one of the best pieces of advice one of my mentors um gave me early on in in my career at around this time is that it will actually become harder to start a company as you get older yes once again because you have more responsibilities you're responsible to your partner for some kind of income to create a life together once you have kids you're responsible for an even greater income to create a life for kids and startups do not generate income right they take many many years before anything happens people are getting evicted people are eating ramen noodles that is a thing that happens that that that will happen so i'm not saying that you should do the fun things or the enjoyable things i'm saying the things that you would regret not doing that you can uniquely do in the time span from 18 to 25 which one of which is if you plan to have a family and start a family when you're 25 you should start a company now you should not wait until a bunch of people depend on you for income to eat to start a company the amount of pressure that will be on you at that point will be monumental you should start a company when nobody depends on you and you can sleep on the floor eating ramen noodles and still have a great time and show up with a lot of enthusiasm and be excited so um i i just mean whatever you want to really devote yourself to and and and really do don't put it off don't go to consulting or banking or any other industry and say i'm going to do this for three years and i'll get experience the only way you get experience is by doing something you go you do it you fail you do it again and again and again and again and again and then you have experience and then you can do it right that's the only way experience happens there is no other way short of mentorship if you're lucky to get mentorship 99 of people don't get mentorship and even though we're talking about young people i feel like you're speaking to me as somebody who's who spent the last two weeks sleeping on the floor because there's no mattress and somebody who is single and somebody who's thinking about it doing a startup i felt like you were speaking to me as a yeah as a fellow young person let me ask you about this whole life of ours to zoom out on the big philosophical question the ridiculous question what do you think is the meaning of it all do you think about this kind of stuff as you're creating all the technology uh as you're thinking about this future you ever zoom out and think like why why why are you sergey striving why are we the human species striving for the stars so i think it comes down to um you know whether people want to live in society so if if people decide to be part of society they have a certain um set of conditions that they decide to take part in right so i i think what this what this comes down to is a lot of really involved conversations but if we assume people have free will and choice we just kind of make that blanket assumption then the question starts to become well what choices do we make and how do we live with those choices and i think probably the most fundamental choice is whether we exist in a society or we choose to leave society and there are people that do this there are people who live in the woods there are people that immigrate to other societies and they make a choice right and as they enter those other societies or they choose to leave leave society and go live in the woods they um adopt a certain set of values right they adopt values that the society prescribes they compromise their own values they define their own values and they create a set of values for themselves right i think um at the end of the day if you're going to choose to live in society in addition to all the minimums of you know not throwing garbage on the floor and you know doing doing nice things for people that need help and and and doing any number of things to just be a normal human being within society you you have to ask yourself what am i doing as part of society right you can always say hey i'm gonna leave society i'm gonna live in the woods i did that right i went and i lived in the woods and i gave it a shot realizes a ton of stuff huge amount of clarity from that but when you decide to live in society you you take on first of all certain minimal agreements you you mold your values a little bit to that society that's another choice that people inherently make and then there's uh a question of well what am i doing here right what am i doing in society right so when people say the meaning of life i don't know what the meaning of life is the meaning of life in society right what what's the meaning of life for the choice that you've made within society right because that's maybe the first fundamental choice you made you made a choice and you continue to make a choice to be part of society and a specific society right so you've made this choice you're part of a society and now you kind of have a life and you have people around you and then the question is in my in my opinion the question is what is the body of work that you want to make right i think personally that life is kind of so short and the ability to get enough resources for yourself in at least the developed markets where we're like lucky to be in is so relatively abundant that we you and me have the luxury you know by your pursuit of a phd you you know you've had this luxury i've had this luxury um through the work that i've been doing to pursue something that makes society better so this is kind of the um question i would say the question is am i going to live in society yes or no yes okay most people choose yes i understand why to a degree i understand why some people choose now and then um what is the but i'm going to be in society i'm going to if you choose to be in society you're just choosing to abide by the rules you're choosing to just do the minimum right that's what being part of society means people that choose to be part of society but don't want to do this it's very confusing they should just leave they should just go look i don't like this deal i'm going to go somewhere else i'm going to live in tibet i'm going to live in the woods i'm going to live wherever where the rules are to my liking right um you you've chosen to be in society next question kind of final question is what is the body of work that i'm going to be involved in because in in looking at that jeff bezos kind of regret minimization framework thing i think that's what a lot of it really comes down to is you kind of the framework is at eight years old you look back over your life what would you regret not doing what would you regret not not pursuing i think there there are a number of things on a personal level each person has but i think at least for me and and probably for many of the other people i know there's a question of what is the body of work that i was involved in what did i do what what happened right what was i involved in and in my opinion you you should have a good answer to that and you mentioned the body work in relation to whether it helped make a better world and the fundamental question there is what does better mean so it's our striving to understand what is better what kind of world would we love to exist after we're gone and i think that's another thing almost unanswerable question but it's one we can strive towards is what is what is a better world right i i think that's all that's that's once again a very that's a very personal question i'm not sure if there's an objective moral truth that's going to suddenly give us all an answer i think it's actually quite fascinating to me when people feel they have this objective moral truth they're so sure in their opinions you know this is what we do we should go you know hurt them or help them or kill them or or or rescue them or whatever right there's this there's all these kind of very situational specific kind of like this is the right thing to do the objective moral truth told me that this is it but maybe there's a definitive truth that we can uh arrive towards uh sort of a consensus of what that is within the little local pocket of society that you're in yeah that's the point that that's what happens people just then mislabel it and they go like objective moral truth yeah this is this is not my this is not our idea yeah you know this is coming up from on high here this is this is the this is the the objective moral truth that you know i i think exists in some metaphysical form somewhere and then you build a building with marble and it's big and usually what happens and then you convince yourself that that building represents i think those people actually under the people who build those buildings under probably understand that there is no musical object they're just like we're all just coming to consensus i'm going to build the biggest building and you're like me and that's what we're going to do right like they just they just look at it that way probably i i i think i think what ends up happening with with all these values is yeah people should determine that for themselves i i agree that there's a second order question here of what is the best the the best body of work to work on um personally i think that's probably a mix of what could you realistically achieve you know is that going to have an impact on society that you feel good about yeah right so these these are probably the two aspects of this question and is this going to have a good impact on society that you feel good about obviously very subjective right some people save animals some people say forests um we and and i are creating this uh system of economic fairness and transparency i feel that i'm in a good position to enable that i feel that i have a good chance of succeeding at that and i think that the impact will be quite um quite meaningful for a large number of people and so i'm completely happy to look back once i made ian see a body of work that achieved that and be very proud of that right because i think that's what i'll be doing when i'm looking back so well i agree with you the the scale of impact as about smart hybrid smart contracts this whole idea that you're working on has the potential to transform the world for the better at a scale that that i can't even imagine so speaking of which means even more that you would waste so many hours of that exciting life with me thank you so much for talking today sergey this is a really fascinating conversation a really fascinating space and i can't wait to learn more so thank you so much for talking today thank you for having me it's been an absolute pleasure thanks for listening to this conversation with sergey nazarov and thank you to wine access athletic greens magic spoon indeed and better help check them out in the description to support this podcast and now let me leave you with some words from copernicus to know that we know what we know and to know that we do not know what we do not know that is true knowledge thank you for listening and hope to see you next time you