ETHDenver 2021 Opening Ceremonies: Vitalik Buterin, Ethereum Foundation

all right moving into our closing speakers we have a couple of big ones for you we really appreciate everybody sticking around so uh to kick it off all right so yeah this is like a really interesting time i think that the timing of the of east denver this year is is really nice uh just giving like you know it feels like uh we sort of hit this inflection point where suddenly you know crypto in general and even like you know ethereum and d5 and all these things have suddenly hit this kind of like uh this point where mainstream early mainstreamers are coming in and it's like it almost feels like maybe to somebody who hasn't observed the ecosystem too closely a bit of a overnight success of course anybody that's been in this for a while will tell you it certainly wasn't that way it's taken a while and i i think one of the reasons is the no compromises approach with respect to decentralization you know it's easy to build something scalable uh that for the for the masses if you sacrifice some of that uh some of those decentralized properties but then you wind up again with the big blue machine and that's what we're trying to get away from so uh next up we have italic and vitalik i think his singular vision from the from the get-go was to uh to avoid that at all costs um one of the fun things if you have time is look at some of the old writings of italics back in the day 2014 2015 and it's it's uh you kind of see the the vision even back then and with specific things like dexes and stable coins and decentralized lending you know uh people kind of like we're hoping this would happen building on it back in the day and here we are in 2021 and it's it's really a thriving thing so it's been fun to see that grow and evolve and just to make sure everybody knows this vitalik is so dedicated to this that he's literally up at one almost two o'clock in the morning to do this for our community so vitalik good to see you you actually look much brighter than i thought you would no thank you good to see you too john okay great um i'm going to um share things i've let's see if this ends up actually working um um and then do you still got it yes you okay yeah does it is it a full screen now yes concepts of membership and crypto excellent great um so today you wanted to kind of deep dive um into one particular topic that i think so a lot of us in the ethereum space have been thinking about recently um and that's just become more and more relevant um in both as you know some of the concepts that we've been thinking about to kind of start making the way out into you know the broader and quote real world more and more than before but um also as the crypto space itself becomes uh more interested in the decentralized organizations and you know daos and multisigs and like all of these various kinds of contraptions um and like basically the more that we get into trying to build the daos and those kinds of concepts the more we need to think about this concept of membership right so this is something that's uh somewhat connected to the idea of identity but it's also not exactly the same thing as identity um and i'll get into and of exactly what this concept is what some of our existing ways of capturing it are how some of these ways fail and you know are there enough better ways that we could look into in trying to move forward uh so what i mean by membership here is just generally formalisms representing the idea that some person or could be an entity is a member or kind of is an active participant in a company an organization a dao country some kind of internet tribe you know any other kind of entity right and these uh formalisms they could be purely symbolic uh they could confer rights of a personal value uh they could also confer uh rights to participate in large-scale decision making and there's definitely kind of a fuzzy boundary between the last two of those and just because uh you know participating in uh very large scale decision making you could argue that your own per the effect of your own participation is very tiny but then there's medium scale decisions and there's small-scale decisions and there's definitely cases where you can have like significant um impacts on things that matter to you personally but um but where am i it's not just about um what um a decision that you're making for yourself uh so some examples of membership um one is that countries have had concepts of membership since forever there's a citizenship there's permanent residency temporary residency uh visas short-term stay views as long-term stay visas digital and nomad visas have been the cool new thing that's been starting to uh come out of kovit is in just in case people wants to tr um wants to travel then you know why not do it once every f six months instead of um instead of every two weeks or whatever and whatever the nomads were doing before uh so there's um a lot of examples of the countries uh companies um have a lot of examples uh so uh in companies um have the concept of employee status and there's different kinds of employees uh shares so you could be a shareholder of a company um things like ratings and reward points um so you might have like special privileges within the context of some application if your reading is like you know above like four point x stars from the people you interact with or whatever um if you accumulate enough reward points uh daos uh coins the more dao coins you have the greater in extents to which you're a member in the dao participation in a trusted multisig so there's some dios that just say here's you know some list of like five or seven or 13 members and the majority of them can vote on some protocol parameters and if you're one of those then that's a very high and a very trusted tier of membership so there's a lot of these different concepts right and there's generally these um ideas that you know the more committed you are to some uh kind of organization or entity then the more and of privileges um you can get as a result and the more ability to participate in the decision making you can get as a result and the more we get into kind of having online communities the more this becomes important to think about um i'd also say there's uh this kind of broad trend in more in kind of moving away from thinking about membership as being binary so you're either a member with a high level of commitment um or you're not a member and zero commitment um toward more kind of gradations and recognizing medium levels of membership and so various forms of part-time employment um you know even like some of the gig economy applications are kind of the apotheosis of that to some extent uh countries offering part-time stavies as we mentioned um coin holdings in cryptocurrencies cryptocurrencies are the old one of the ultimate kind of things where there's just such a natural gradation of a membership and uh as much as maximalists said don't you don't want you to think in in this way it's very much and not a binary thing you know it's uh much more nuanced than you're either part of a cryptocurrency or you're not uh you know you can have you can participate in one a little bit you could participate in one and another one a lot more and you and on the internet i kind of moving away i think everywhere but on the internet especially moving away from binary membership is a great thing but we could do better so membership membership does end up mattering a lot in crypto um when we start talking about decision making uh so here on the right i have a couple of charts um these are the coin votes so that uh non-binding coin votes that the ethereum community made one is in response to other whether or not to do a dow fork back in 2016 the other is uh whether or not to decrease the issuances was i believe the first time when issuance was being decreased from five to three uh so there's this question of like basically well who is a real community member and who is an outsider right and like when making governance decisions this does become important right because that different communities values differ and you know people love imposing their own communities views on other people's communities like uh you know people from some uh cryptocurrency community is just a wi-fi kind of going into other cryptocurrency communities forums and uh like trying to push their own perspectives on next immutability for example and like the fact that membership is not a binary thing is like is also important because like there's definitely also just a a degree of that that's kind of very healthy and especially in just discussion is definitely something that should um should be kind of global and should not be siloed um but when you're starting to talk about well whose voice like really counts when there's matters of governance of something controversial then well it starts becoming more useful to try to tell well which of these voices yelling things um actually yeah are like people who are deeply invested in this community and which ones are not but uh cryptocurrency isn't if inherently a world which um you know values uh pseudonymia and anonymity values are kind of just weaker ties um and kind of much broader of levels of ability to participate and so kind of measuring who is a member and who is not easily becomes harder we have kind of a few different paradigms for uh trying to think about this concept of membership right so one of them is coin holdings uh so i mentioned the non-binding coin votes that we've had uh there's also a dpos coin voting i mean just explicit coin voting governance uh so eos polka dot tezos and so on and so forth um there's uh chat rooms like i know there's uh a bunch of these on wechat wechat i'm sure they exist in other platforms too where in order to join the chat room you have to have at least end coins of some cryptocurrency which is like kind of uh you know strange to me but no hey it's a it's a concept of membership and you know i'm sure there's uh people who value having discussions with uh i don't know fellow committed whales or something something um so benefits of coin holdings i'm easy to implement easy to administer um entirely automatable there's no subjective components but um using coin holdings to determine a membership also has problems right so uh like i've talked about this a lot i've written many blog posts on this but basically problem one a degree of membership scales linearly with wealth and so decision making power gets concentrated in the hands of very few people and those people uh tends to all know all of the other wealthy people and because there's fewer very wealthy people they're already kind of better at coordinating so this creates this kind of power concentration dynamic coin holdings is a very imperfect measure of any intuitive conception of membership so particularly coin holdings track money invested into a community they do not do a good job of tracking time invested into a community and it's also easy to buy votes and i've written multiple articles talking about why vote buying is bad i mean in fact uh financial instruments kind of do vote basically can be used to buy votes automatically right and this is one of those things that's uh the various dao protocols just um have to keep finding ways to fight against but there's just very deep fundamental reasons why it's hard um approach number two one per person um whoever signs up uh so what this does is it does kind of impose one de facto filter which is just a minimum required level of human effort required to kind of set up a wallet go through a five to twenty minute process um you know sign up for whatever the um identity verification on git coin grants or sign up for a bright id or you know whatever thing it is that you're signing up for um and but if you go through that effort then you know everyone gets the same level of participation yay um examples in the wild um giklin grants uh identity verification uh bright id i mentioned uh well gecko grants now is using bright id as kind of one of its uh identity oracle sources upvotes and down votes on github that often becomes a kind of de facto governance mechanism in a lot of cryptocurrency contexts so benefits right it's a a very wide conception of membership it's easy to become a member and it's egalitarian and it's also simple to understand i mean the problems are like one is that it doesn't capture the difference between a kind of low commitment and high commitment it doesn't capture any degree beyond do they care enough to install this thing and it's very possible that in the long run um you know hostile outsiders might be willing to just go through the process to sign up for these things and start screwing with the community right like if signing up becomes too easy then there's just uh no longer really a distinction between people who are part of the community and people who are not and also one per person is potentially vulnerable to fraud like people might try signing up for fake accounts on mass and it requires kind of fairly active vigilance so it's so far to uh catch attackers uh and then approach number three is kind of duocracy is this some lovely phrase i get heard from uh as a kind of positive description of what this is and basically the idea is like did you make a substantial work contribution if so you're in uh so the ethereum all-core devs call is kind of um a democracy like there's um kind of a norm that um you know every client's team is expected to have of a voice i mean so if you pass the threshold of developing an ethereum client and being a client team then you know you're part of the duocracy um eth2 is also a uh well ethereus ethereum but um and uh eth2 okay these are horrible names and i know uh danny ryan's uh totally gonna um wanna yeah severely reprimands me for even accidentally saying this but all aspects of ethereum including the evm and the up and coming proof of stake chain are um like do what kind of duocracy is in this um you know you have a voice if you me if you built a client uh kind of sense um and there's a benefits to this uh so if done well um it filters for deep technical understanding and filters for a high amount of effort it filters for deep commitment but there is also a challenge which is basically that like this style of approach only and potentially empowers a relatively small of which basically people who do things big enough that the entire community notices them um you know building a client is one example right like we can list who all the clients are but it's harder to think about well how do you scale that so that this kind of approach empowers you know hundreds or thousands of people who have uh you know put their lives into contributing to the ethereum ecosystem so like what could we do now right so one way to think about this is to just try to think about kind of these three polls and try to think about the the balance between these three polls right so like ethereum governance for example has is um has aspects of all three right like there's a the kind of one vote one-person approach through you know git coin grants github votes um you know the social media conversation and um some of these other mechanisms um there are coin holder influence um that exists uh in the in the form of uh some of these uh informal coin votes that we've had i mean i guess like one other thing that's not in this triangle was minor voting i saw a proof of work minors uh but i would say out of all these categories it's probably the most similar to coin holders um though and it's als it is also kind of a very unique thing as well i mean and then influence the work contributors so like uh the kind of technical protocol discussions that tends to uh go more in this direction and like going too far in each of these directions has different failure modes so i've already talked about some of these so if you go entirely one vote one person then it becomes like the you get a lot a lot of participation for people who are not well motivated to have a kind of hot theory and of high quality if they um effort into their thinking um you might be vulnerable to attacks from outside communities if you go to a far toward the coin holders you get enough plutocracies and financial attacks um if you just focus on work contributions then it might i become this kind of small technocratic tweak um and then if you try mixing two of the three then others there's benefits and then there's uh um also some kind of risks that are common to two of the three sides and then there's this possibility of well maybe you can get something reasonable if you kind of do a decent job of balancing all three and i do feel like at least right now the ethereum community is trying to balance all three to some extent which is interesting so can we do even better right so uh can we have come up with other kind of membership formalisms um and so here's just a few ideas so one is proof of medium levels of participation uh so like conference attendance or including online events and i know the pope protocol has been doing a great job of trying to formalize this maybe um another possible example of proof of media participation is passing some kind of examination a kind of proving some level of technical knowledge another interesting one is a quadratic a coin membership so votes being the square root of your balance instead of being linearly proportional to your balance so this is a little bit well significantly more egalitarian um so i mean it would bring my own votes down from uh like was 300 000 all the way down to like 500 so much more egalitarian than uh fully yeah kind of linearly relying on coin balance and get going grants already does kind of do this i'm right and actually like we've been seeing bitcoin grants used kind of as governance signaling on a couple of occasions right so the big round of donations to um eip 1559 that we saw i think about half a year back i thought that was like an interesting sort of online quadratic protest in some sense and you know people just you know lots of people put in significant amounts of iron of capital and you know there is both for this kind of democratic aspect of lots of people hear about this and the aspect of you know measuring that people actually care really strongly about this issue um indirectly verified proof of contribution and you know can you potentially kind of allow some kind of indirection or delegation and basically make duocracy more more scalable and kind of help communities better identify who and of larger sets of their contributors are are there more um membership concepts from crypto to beyond um so a lot of these concepts that we're thinking about within the crypto space could potentially be applied going beyond the crypto space and this applies to a lot of crypto uh incubated concepts right so the concept of provable token holdings is potentially a really powerful primitive that's uh not really something that the wider world has at all uh proof of participation uh so kind of pope like things um also uh really interesting and uh you know there's uh projects that are trying to do kind of blockchain based attested proof of uh you know participation like i know i yeah bring up open certs a lot for this and there's uh some other examples as well um unique identity systems are kind of the unique human uh verification uh so bright id type of things like that if we like do a good job of incubating that that could also end up be applied to a lot of these um other concepts or a lot of other places as well and you know we should work on these like this is a one of those uh kind of concepts that you know we're grappling with and there's clearly a need to for to kind of measure membership us potentially yeah and it could also just be something that kind of gets flagged and you know just like various kinds of public conversations so there's a definitely value that can come of uh just being able to better understand um you know who really are the kind of core kid like important kind of contributors or just who um put a deep amount of effort into participating in in some community um and you know if we come up with kind of good ideas here then there's some a lot of other places where we could use them so there we go but oh there we go thank you um yeah thanks for uh the presentation metallic and for positioning an entirely new type of trilemma it seems like these wonderful trilemmas pop up a lot in the space and uh i've always found it to be helpful to frame it that way in terms of the different the different inevitable trade-offs and i i'm aware of a few projects uh that are implementing some of this stuff in these early stages yeah proof of contribution is actually something we're working on actively at opolis so um it's it's really cool to see the the kind of convergence and the thinking and sort of how we're evolving in the space so thanks again metallica go get some rest we will talk to you later and we'll uh we'll see around the rest of the event later on thank you again