Joe Lubin Fireside: What Will Drive the Next Supercycle? | Joseph Lubin

but what does everyone think about ethereum thoughts yeah not sure well next we have on uh Joe Luben and we're going to have Crystal Kim she's a crypto reporter from axios and we have Joe luin who is the CEO of consensus and one of the co-founders of ethereum so what a delight to have them on this afternoon and I can't wait to hear what they're talking about it will be about what will drive the next Super Cycle I don't know let's find out hey Denver hello everyone I'm Crystal Kim I write a daily newsletter called axios crypto my ordinary mandate is smart brevity it basically means that I have to be sharp and brief um in bits basically I think we also have to be sharp and brief in this 20 minute session well yes but for the next 20 minutes I'm going to dig in because we have a pretty heady subject in front of us but before we get there I think I need to do some introductions though I don't think you need one this is Joe Luben um I'm I get consensus you all probably know him already because he's been here from the very start and his company consensus developed a lot of the products that y'all are probably using regularly I think you know this is my first eth Denver I'm a little bit of a noob but I can't help but feel that my winter glooms are slipping off I feel a little bit elated and I know we're not going to talk about number go up but I wanted to ask you do you feel you know a Vibe shift here oh there's a buzz in the air at at Denver uh it's pretty electric right now absolutely um I mean wonder why I mean well our panel subject I think we can maybe thank the SEC uh for for the buzz uh for thank you Gary for creating a uh an inflection point um for our e system okay now um without further Ado our panel subject is what is going to drive the next super cycle and I think you know set the scene for us Joe big picture what's going on so uh first what's a super cycle um so there's this idea and and I like to think of it in two different ways uh one there's a generational super cycle um there's work uh done on Generations Theory by Strauss and how uh really valuable uh to read some of that or or watch a podcast or something like that uh and it essentially posits that there's about 800 years uh four generations um and it repeats in in a sense and it Rhymes to some degree uh but the first generation is coming out of some sort of cataclysm like the Second World War um and there's a new a new insight a new way of doing things a new system of the world uh and really a new promise uh and this first generation starts to build it out second generation accelerates it uh everybody does really well because there's tremendous growth third generation continues to do really well but uh uh the shape of society has changed the old system doesn't serve uh the the current state of the world um um and uh edge cases appear uh cracks form and things start to go sideways and people start to take advantage of things um by the fourth generation um uh we're we're heading towards a brick wall essentially um the the wheels have have fallen off the cart and uh and systems are breaking all over the place and and I think uh you out there might agree that uh uh we are in this fourth generation this fourth turn um and we're ready for a new system of the world uh the other way of thinking about this is that it's a monetary super cycle uh where uh the monetary systems of the world uh reach an end of life essentially uh basically because of interest and there's too much debt in the system because um certain Generations uh broke the monetary system and other elements of the financial system in fact we're talking about about old things breaking and new things Rising um you know one of the other sort of side events I was at there was a an audience member a Q&A more of an observation but they were talking about how crypto was born into an era of free money and his question was sort of in between the lines now what and I guess that's the question for you Joe so crypto was born into an era of free money um so I think it was born of an era of constrained money controlled money uh top- down command and control essentially um we from Millennia have have been living in um a paradigm of centralized top- down trust um and it's authorities uh imbue intermediaries uh with certain powers and the intermediaries uh help Run the World they maintain these datab bases or ledgers uh that control who owns what and who has what rights uh and privileges um and then Along Came uh Satoshi who uh was really reacting uh to this controlled monetary system and and top- down command and control um Sosi invented decentralized trust as opposed to to centralized trust we'd never seen decentralized Trust on the planet before and essentially that enables to build databases um that are open for inspection uh open for usage uh we can add programs to those databases uh and we can all inspect uh them and see what happened uh and when it happened uh and and the beauty of building money into these systems uh decentralized money uh is that uh um there's incentivization uh for everybody to keep the system going and it makes it also enormously expensive to overturn the history of the system and so we have a new uh trust Foundation upon which we can take a look at every uh system of the world every uh different uh economic sector and we can uh rearchitecturing [Music] recent ones that you're excited about before we get there and I know we're at an ethereum conference but the Bitcoin Bitcoin aren't you yeah I know I know sorry I've been enjoying talking about Bitcoin recently okay but so I was at an ETF conference and it was all trafi that's sort of where I hail from there was so much money in that room but also for the first time I counted the word digital assets on eight booths that's up from just just one last year and the theme of the conference was Business Development one thing I can tell you they weren't talking about is you know the crumbling of the Old Guard guess why that might be they are the Old Guard I guess my question for you is you know is that a good thing is spot Bitcoin ETF and the promise of possibly an eth ETF good for the community um so it's there are a lot of different issues uh in there um in the near term um I would say it's a great thing um the the electricity in the air is significant significantly because we're on the other side of an inflection point where up until um the launching of the the Bitcoin ETFs um we have been struggling um and doing better and better over the years but but really uh swimming Upstream to try to um insinuate decentralization uh into the real world um and uh the J judicial system in the US uh essentially forced the hand of the SEC um and that enabled these giant bridges of value to open up um and connect to Giant pools of assets um and there's uh the floodgates are open and there's an enormous amount of value now piling into the crypto ecosystem so there are the good thing about that is that it's going to be hard for regulators and politicians to to stomp on people's portfolios um and we're going to see more and more uh funding come into our ecosystem uh it's been growing by the day into the ETFs and it's really just started um it's not even on uh various different uh platforms I think uh um Merl Lynch um Wells Fargo that they've now included on the platform so it's going to accelerate um and they're so there's this idea that there might be an ethereum ETF as well um I'm a little so I I thought the Bitcoin ETF was going to happen I know the ethereum ETF is going to happen I do feel like the SEC is going to do what they can to drag their feet on this um because um Bitcoin in centralized financial instruments um is good because it raises the value of the token which raises all boats in our ecosystem um it's not so good because it's now in a centralized instrument um there's uh thing things called The Plunge Protection Team or or um I forget working group on financial markets and uh uh their ways of of putting pressure on centralized companies to to act in certain ways to move asset prices up or down as as the government might want um so I think Bitcoin will be fine uh but it is a lever uh for them to play um I I think a lot of ether will move into the ether ETFs uh when they are approved um maybe this year maybe in 2025 um but it's it's really quite beautiful that um if you have ether uh you can stake The Ether in the protocol and that gives you the right to essentially perform labor for the protocol to to validate transactions and ensure that the system is working um and with staking with liquid staking with liquid reaking most of the ether I believe will be drawn into these decentralized constructs rather than into a a centralized Financial instrument like an ETF gotcha so ultimately I don't have to worry about like a massive supply of eth just being stuck in an ETF yeah ether test test e ether is in the hands of some very passionate organizations and protocols and people uh and so it will it will be very hard to um to attract a large percentage of ether into these centralized financial institutions they will um have to raise the price quite significantly uh in order to to get the amount of ether that they need in those instruments um and uh that's probably going to be good for the ecosystem I think uh um it's we're going to have Whiplash after Whiplash o over the next few years as as our ecosystem accelerates all right okay now we can talk about the industry landscape what are some recent developments that you think have legs into the 2024 and Beyond um so so you're asking um for examples of cool projects miss that yeah yeah I I I've heard you um talk about Celestia bit Ian da sure so um in Broad Strokes uh we're at our our Broadband moment uh where we've been working on usability and security um and we are are about to hit scale scalability uh and so we're going to be able ble to have uh lots of different kinds of applications that can cross the chasm into mainstream usage uh these are going to be decentralized physical infrastructure um dii obviously is going to be huge nfts will be huge uh for dpin or def physical infrastructure um there are uh projects in the uh Automotive telematic space uh demo uh one of our favorites um there's WiFi um there's uh uh regenerative agriculture my personal favorite is fifth world uh and so we're going to see um basically people looking at um the use cases in the world and figuring out how to decentralize them and uh uh deliver them through communities rather than a corporation which is in generally in an adversarial relationship with their consumers um gaming is going to be giant um a huge amount of money has been invested in gaming projects uh uh blockchainbased gaming projects um and takes a while uh takes years in many cases to build a good game and some of those are are coming live soon immutable network is a a tremendous project that uh is is essentially bringing uh game chains uh to layer three uh connected into uh an immutable polygon chain at Layer Two um social networking is going to transform um so I believe that we're on the precipice of seeing um maybe the flipping isn't very near uh but we're going to start establishing our own social graphs um so uh on metamask we have a snaps plug-in system and there are some snaps that enable you to establish your decentralized identity and then use verifiable claims and credentials to to link things and people up into social graphs and make attestations uh again uh building your social graph and so we're moving into a world uh where um either through metamask or other tools you'll be able to uh establish and grow one or more social graphs for different purposes these are going to be essentially Social Capital uh in a real uh Capital sense of the word where you're going to be able to monetize your own social graph you might be be able to lease it out lend it out join it to other social graphs for for different purposes um and we're not going to be our identities aren't going to be owned uh by the Facebooks of the world but we're going to own our online presence and and applications will be coming to us to our social graphs to to become resident on those social graphs so that we'll be able to share um applications functionality content all of that sounds very much in line with what we're talking about at large the super cycle and new technological developments driving that seems like a a new a new way of doing things a new system of the World perhaps very possibly and and I was just thinking about what we heard on stage just before us with um Eric fores he painted quite a picture um the dystopian future sounded a bit Bleak didn't it yeah I'm scared um how do we get away from that um do you have ideas so so first we should be vigilant uh and make sure that uh uh centralized AI isn't turned uh by well-resourced nefarious actors into the most powerful tool for centralizing control on the planet that that is a a legit concern um but I'm an idealist and a decentralization and uh uh I'm pretty confident that uh uh with project projects that are always popular already popping up in the space um and uh just what I think will be a more effective approach um uh essentially we have uh ways of doing decentralized compute uh decentralized storage uh for different kinds of storage um decentralized bandwidth um so there's a dpin project for that um decentralized and and perhap or decentralized sharing of training information so I can I can share a lot of what I do as I'm walking through my day I can do that in zero knowledge perhaps and so uh we can uh enable um the sourcing of data accessing of data uh from these giant data pools for for different AI projects cleaning up of data um and a lot of this stuff will benefit from the zero knowledge techniques that that we have in our ecosystem where where you can um do training and put something out in the world and uh and enable people to use it without so losing giving up your intellectual property perhaps and uh and still keep an open uh decentralized system uh so I believe that we're going to need AI as the world gets increasingly complex um none of us have read a full terms and conditions uh that we click through every day on the internet um and it's going to be difficult to understand these decentralized protocols it's going to be difficult to understand how to participate effectively uh in Dows in in governance um and so it will be very nice and it's coming soon uh for us to have um AI uh allies um AI agents built into our phones our laptops our wallets may maybe into our our uh our brains chips chips somewhere near our brains potentially um but uh it it will be really valuable for us to um have a bunch of different intelligences uh that we can access um and that we can delegate some responsibilities to um we'll have to trust these things of course and so they're going to have to be uh decentralized uh and so I I do think that there's going to be just uh an explosion of activity in in the AI plus crypto space uh because uh it is absolutely necessary to marry Ai and decentralization um it'll serve us better um and the alternative is is pretty disturbing all right well we only have a few more seconds left on stage but I'm not going to let you leave until two more questions I swear but they're important first is elections the second one is about jobs elections because we have a Kennedy coming to talk at Denver it like I'm pretty excited about that huge Paradigm Shift right I guess my question is can crypto thrive in the US under the Biden Administration H um well I may avoid the uh the the politics of that question to some degree um I think uh the me the momentum is picking up uh and it's it's Unstoppable um the SC C has done some things under the Biden Administration has done done some things that are real head scratchers that uh um are there's a bit an element of gaslighting an element of unreasonableness in some of the um um the actions uh they've brought um and the judicial branch uh has been wonderful in uh seeing things clearly and making sure that the laws of the United States of America and and the Constitution are followed and protected um I do think that uh there are elements in the Biden Administration that are starting to see uh crypto and decentralization uh a little more clearly uh in Treasury and doj they they have explicitly recognized the value uh in terms of um money transmission and fighting crime um and that that said uh um I look forward to a a more decentralized uh um approach to to governance in the United States I think that's actually where we need to end because we need we're getting pulled off stage um but on the jobs front I guess I wanted to say is I've been hearing a lot of positive developments um just someone I spoke to today said they were looking to hire 20 people 20 people and I know for a fact that you've also said that you see expansion coming per the super cycle so can we give our very optimistic Joe Luben idealist Joe Luben a big round of applause for the big [Applause] picture that was so good okay wow was that incredible