Episode Transcript
[00:00:00] Speaker A: So my co host, who is not to be named, cannot join us for today's shitcoin Insider. He was on a covert operation all night long and needs his beauty sleep. But we do have the knowledgeable, the hilarious, the king of Eth trolls, Udi Vertheimer, to break down everything about the recent intentionally unintentional hard fork, those other hard forks, the coin lockup for 2.0, phase zero, and everything else about Ethereum. This is episode three of Shitcoin Insider. Move fast and break Ethereum.
Bitcoin maximalists trying to make sense of the sea of shitcoins. This is shitcoin Insider.
All right, well, this is shitcoin Insider. So, you know, this is kind of like, I try to be, like, really nice and, like, sweet to shitcoiners and altcoiners and all that stuff most of the time. So this is my guilty pleasure. This is where we just rip manure and have fun.
So welcome to the show.
It's a pleasure to have you, and it was awesome meeting you also at BitBlock. Boom.
[00:01:21] Speaker B: By the way, it was. It was. It's a pleasure to be here too.
[00:01:26] Speaker A: I find it. I. I had no idea that it was. I actually recognized you from your.
Your before it was deleted Twitter handle or your Twitter picture.
[00:01:37] Speaker B: Oh, did you?
[00:01:39] Speaker A: Yeah. Yeah, usually I can't tell. Well, you mean you had your sunglasses on and you were the only one there with sunglasses on because it was dark and so, like, that was that, like, really, like, stood out, right? And everybody else is a cartoon character, so.
[00:01:54] Speaker B: Yep. Yeah, it's easier to recognize, I guess, if. Yeah, with my sign this is on, it's easier to recognize.
[00:02:00] Speaker A: So you're a big pro Ethereum, dude, as I hear. And you know what's going on with all this mess? There's some Ethereum, too. And then I think there's, like, Ethereum 1.4 and, like, 1.5 that has just, like, broke off and they're doing. They're doing their thing. And I don't know. I don't know where we are right now in this space, but I want to get a. I want to get an overview of.
For anybody who's. Let's say. Let's assume somebody who's listening. This is just starting to dabble in Shitcoins. And, you know, they're just. They're just getting their hands dirty and. What the hell is Ethereum?
[00:02:42] Speaker B: Oh, wow, this is a tough question. This is a tough question. So there are two answers for this. There are the things that Ethereum People say that Ethereum is. And then there's what Ethereum actually is and it's not very similar. It's not really two different explanations.
[00:03:01] Speaker A: What's the marketing going to be? What are the Ethereum people going to say?
[00:03:05] Speaker B: Right. So I guess the, the hype for Ethereum would be one, there's the whole world computer thing that I don't know, like it seems like official Ethereum people don't like that meme anymore. But I think that everyone else still uses it.
Which means what does it mean to be a world computer? I guess they would say that it's, you know, it's a thing that runs programs and everyone can run the programs. I don't even know what that means exactly. Like, you know, people would say, well, Ethereum is an uncensorable computer. There are two problems with that. One is that it's not uncensorable because we know that things have been censored on Ethereum. The other is that like everything is a non censorable computer. Like if you're going to buy an iPhone and you put it in your pocket, then you can do whatever you want with your iPhone, so it's yours.
[00:04:02] Speaker A: Do you need a different, do you need somebody else's computer to do that?
[00:04:06] Speaker B: Yeah, what's going on? And your iPhone is like a billion times faster than Ethereum too, and it's cheaper. So what, like what's going on? So I don't find the world computer or uncensorable computer explanation to be very good.
I think so. The way I like to look at it, which is, let's say it's the less confrontational way to look at it, I think, is that Bitcoin is a digital asset first.
I think most of us see it as a form of hard earned money. And the blockchain for Bitcoin exists in order to allow Bitcoin to exist. It's an implementation detail. It's something that is necessary to make Bitcoin work. It's not the point though.
We actually don't even like it very much because it's slow and it's ineffective. But it is what it is.
That's the best way we found.
[00:05:05] Speaker A: It's not going to work exactly.
[00:05:09] Speaker B: Ethereum kind of flips the script. With Ethereum they have their token, which is Ether, but the token ether is only existing in order to allow the blockchain to exist. So they see the blockchain as this big promise that will enable big things. They're not exactly sure why yet what yet what Is it going to enable? It's only been five years. Maybe they'll figure it out.
But the ETH token, really the reason that it exists is to allow the blockchain to function. So it's kind of the other way around there.
And that's why if you're going to ask ETH people what the ETH supply is, they wouldn't know. And they don't care because ETH is an implementation detail for them. They don't care about the asset itself too much. It's there because it's needed in order for the blockchain to work. That's at least the narrative.
So I think that's the big difference between the two.
Now what can you actually do with it? It's like, you know, it seems like they keep their, you know, each year or so some experiment pops up and is her worlded as the next big thing and then abandoned the next year.
So that's basically what's. I don't know, that's what's going on right now. Right now you have the whole defi thing, which is also like a word that I don't even know how to explain what it is. What is defi? Everything seems to be defi. What's not defi? That's the question that I want to know.
[00:06:44] Speaker A: Yeah, that's what we did in our first episode. And it's funny, all the innovation on Ethereum, I swear I can't. Everything that I hear about and that somebody tells me is the next really, really big thing every time I look into it, it's just a new way to print a new token.
Yeah, it's just a different box with token printing in it. Like it seems like that every single time. Like I keep thinking like somebody's probably building something interesting on top of it. Like what is being built on it is basically should be agnostic to Ethereum in a general sense. Like something interesting should be built over there. But every time somebody tells me there's a game changer, it's just a, it's just painting. It's just painting some fresh ass token a different color or putting bananas on it or some shit and it just blows my mind.
[00:07:41] Speaker B: Yeah, it's true, it's true. And I think, you know, I think the smart traders or the smarter traders, they realize this, they know that they're not, you know, they're not, they're not buying their own shitty narratives. They're just, they just know that you need a new story every once in a while. And if that sells the Tokens, that's fine. And I actually have some respect for those people because, you know, they're not, you know, they know. They know. They know what works, what doesn't work. But there are so many people who just genuinely think that this is. That it just so happens this. This time is different. You know, it's.
It's been the same thing for five years straight to no fail. But this time is different. This. This is really going to take over the world. You know, people are saying, well, people in Wall street are. Are afraid because Defi is gonna put them out of their job. But come on, dude. Come on.
It's a game. It's the game. You.
You have names like sushi and Yam. Come on, dude, it's a game. It's fine. Games are fun and you can make.
[00:08:50] Speaker A: Money with stock market.
[00:08:52] Speaker B: Yeah.
Like, you can't. You can't be serious.
No, I don't think they're afraid, dude. I think. I think they're doing fine. Some of them are taking you.
[00:09:04] Speaker A: That's true. That is true. I bet there are a lot of them coming in here being like, this is like the easiest, least regulated penny stock environment I have ever been in. They literally are selling yams, they're selling digital points and calling them. And the price just went up 300. 300x. This is going to be the grade of my entire life.
[00:09:30] Speaker B: Yeah, yeah, yeah. And then, you know, the next week, the whole thing collapses, like, drops 98.
And it's like, yeah, it's fine. That's the.
That's fine.
[00:09:44] Speaker A: We always knew that's how it was gonna happen.
[00:09:46] Speaker B: It was always grand. It's okay.
[00:09:48] Speaker A: That's how, that's how the, you know, that's how gasoline takes over the steam engine. It goes. It goes really high and then collapses completely.
Yeah, that analogy.
[00:09:59] Speaker B: So I think, you know, you just need to take it in the right context. If it's, you know, if you're into Ponzi schemes and you want to play this game, then it's fine. It's totally fine. It's the best game in town, if that's what you're looking for.
But don't. Don't go into that expecting to be the next JP Morgan. That's probably not gonna happen.
[00:10:20] Speaker A: Well, you one could argue JP Morgan doesn't do a whole lot different these days.
[00:10:26] Speaker B: Well, true, true. That's usually, that's usually that's the thing.
You're going to get into this argument with a defi person, and eventually that's what they're going to say, because you're going to tell them, well, the whole thing is a Ponzi scheme. And they're going to say, well, isn't the banking, Isn't the banking system a Ponzi scheme? Well, okay, fine.
[00:10:44] Speaker A: So you got me cornered.
[00:10:48] Speaker B: So we. It seems like we were in agreement then.
[00:10:53] Speaker A: Son of a bitch. He's right.
So. So ETH has been making some waves recently.
The whole world computer thing fell apart. I guess that, that really kind of fell apart like a couple years ago when everybody realized that it cost 10 times as much to do like normal computation and you had to do everybody's computation just to do yours. Yeah. Which was just seems like really bad idea for a computer.
[00:11:22] Speaker B: You're in the 1% for realizing that. I think most people don't even, it doesn't even click.
[00:11:29] Speaker A: And so we've been hearing about when did Eth 2.0 start? You know, because like, you know, Eth 1 we know is not gonna work, but luckily they're, they're moving to eth2.
[00:11:42] Speaker B: Right. How so?
So this is actually, this is amazing. So if you remember, I think ETH topped in late 2017, depending if you're looking at the dollar price or the BTC price. If you're looking at the BTC price, it actually topped before.
But 2018, you know, didn't look great for, honestly for anyone in cryptocurrencies, but especially for if people, because it just, it just collapsed and all of the narratives collapsed and it was a pretty bad year.
And what they did is. So they. Every year they have the devcon conference, which is an official Ethereum foundation conference in, I don't know, wherever. And in the 2018, one vital Quantum Sage. And he announced Ethereum 2.0.
That was the keynote thing. And he described many ideas and you know, he didn't give a firm date, but, you know, he said they're pretty close, that it's the culmination of research that they've been doing for a long time since Ethereum started. Basically that's the, you know, the narrative is that since day one, they always said that they will need to do significant upgrades and changes to the way Ethereum works with things like proof of stake and sharding and whatever. And there was research going on really since day one. And they're saying, you know, we figured it out, we just, the whole, it's really just about coding it up now and we have some of that ready too. So it's, you know, it's going to be a Few months of effort.
I don't, I don't recall if Vitalik actually named, I don't think he named any, any date. But okay, but then all of the other Ethereum foundation developers who were there have a lot of media interviews in there. You can look them up in YouTube. It's pretty funny. You can see them talking about, yeah, probably by the end of 2018 we're going to have Ethereum 2.0 launch.
So that was, that was cute. And we're now at the end of 2020 and actually, so it's funny because it's really hard to say what does. So, okay, so Ethereum 2.0 is pretty complex and they realize that it's complete, so it's basically a complete restart of the whole thing. It's completely rebuilding the whole thing from scratch.
And they realize that this is pretty herculean task, so they have it done in stages and there are, I guess, three main stages and the first one they call Phase zero, which is basically nothing. So Phase zero is completely unusable. Like there's, there's literally nothing you can do with it. Nothing. And the idea is you're going to take your eth coins and you're going to lock them up in a special contract that will not let you take them out of the contract. So they're stuck there basically forever.
And you're going to start running a parallel network that takes those coins from the old contract and, and basically gives you staking rewards based on the number of coins you locked, but you can't move them. So you get somewhere, there's going to be a number that's increasing for you, but you can't move them for any reason. You can't send them to anyone, you can't use smart contracts, you can do anything.
[00:15:30] Speaker A: So it's kind of like a one way peg. Like they're basically doing a proof of burn sort of to a new network.
[00:15:37] Speaker B: Okay, yep, yep, that sounds risky.
[00:15:41] Speaker A: That's Ethereum's contract history.
Just.
[00:15:46] Speaker B: Well, I mean, I think the main risk is like the idea is that in the next steps that are probably going to take years, but in the next steps you're going to be allowed to move those coins eventually the new coins that you got. Okay, but the risk is like, yeah, yeah, but who said, who's, who's to say that it ever even happens? Because remember phase zero was supposed to happen in 2018 and we're in 2020 now, arguably. So some people might have heard that Ethereum 2.0 launched recently, but that's not accurate.
First of all, they're talking about the phase dealer thing, which is completely non functional. But even that didn't actually launch because they have this, they have this threshold. It has to reach a number of coins that's, that's burnt in order for the thing to actually start. And I think they're at about 10% of the threshold right now.
So yeah, it's nowhere near.
[00:16:50] Speaker A: Wait, what happens if they don't, if they don't get to 100%, what happens to those other coins?
[00:16:55] Speaker B: So that's a good, that's a good question. I'm not sure, like what happens if you, let's say you one of those 10% and you deposited those coins or locked those coins in this contract and the contract is designed to not let the coins out? And what happens if they never reach the, they never reach the 100%? I don't know. It's a good question. Are you locked out of your coins forever? I don't know. I guess what they could do is, I mean the plan is that eventually when, when the phase one thing occurs or the phase two thing occurs, they're going to fork Ethereum 1 to allow coins to come back. That would require a fork. So I guess what they could do is just do a fork to cancel Ethereum 2.0 if it gets to that, if no one shows any interest. I don't think that's actually likely because, you know, worst case scenario, just Vitaly can deposit it himself. I'm sure he has.
[00:17:55] Speaker A: Flying around, fill in the gap. Don't want to lose, don't lose my 10%. So I'll just, I'll just do the rest of them.
So. Okay, so Ethereum right now is basically proof of work GPU heavy proof of work network, not a whole lot unlike Bitcoin with just a much, much larger scripting system. Right. Like that's essentially what we're, what we're at right now, kind of.
[00:18:25] Speaker B: I'm not sure about the GPU part.
I honestly don't know, but I'm not sure. It's.
I think there may be some asics involved. I don't know.
[00:18:35] Speaker A: Okay, I'm sure somebody's made an ASIC by now. I haven't really kept up with it, but. So what is in Eth 2.0 that really changes how Ethereum works? Like what's the supposed magic sauce that's supposed to fix everything?
[00:18:53] Speaker B: Okay, so first of all, everything is subject to change, but because it literally doesn't exist yet.
But the the idea is so the, I guess the two big changes are probably proof of stake and sharding. So proof of stake means.
Well it's not a full transition at this point. There's still the proof of work going on but there's also proof of stake which means that everyone can run the staking node and they have this whole system for generating blocks and they have this whole.
It's a complex thing of how it works but it's not the proof of. It's not your grandfather tool for stake. It's not what we used to talk about a few years ago. They really made it complex like Ethereum people do. But you stake some coins, you validate some blocks and if you don't cheat you're going to get some coins. So that's extra inflation. So actually what's going on right now is that inflation is going to increase because right now, because the mining rewards are not going down, they're staying the same but then there's always going. They're also going to be staking inflation added on top.
[00:20:12] Speaker A: So okay, so yeah, short term they're actually just adding additional inflation. So they're leaving the mining rewards and adding the staking rewards. Because everybody I ever debated with kept telling me about how the issuance was going to go down but this is only if they complete all the way to phase whatever and full on go east. Tim. Right.
[00:20:35] Speaker B: Yeah. I mean I guess you could argue that if they don't complete the thing then the staking rewards never actually come into effect. You could argue that.
[00:20:47] Speaker A: That's right. That's right.
[00:20:49] Speaker B: But assuming that eventually does launch then you're gonna have for this period of time it's probably gonna be like two, three years at least that you're going to have mining rewards and stacking rewards at the same time. And for this period of time the inflation is bigger than it was basically a month ago. Yeah.
[00:21:17] Speaker A: So it just hard forked like a couple of days ago and maybe a week ago now. And this was not a. Well no, maybe it was on purpose.
See I don't even know anymore. I don't, I don't know if this was part of the plan or what.
Break down, break down. What the hell just happened like four days ago, five days ago whenever it was with the random eat split and is it still split? Is it still like.
[00:21:53] Speaker B: No, I would say the situation is resolved at this point but the.
So okay, so again amazingly it really depends on who you ask because there's a lot of newspeak going on.
I Was.
I guess I'll try to describe first what happened before I gave my. I give my commentary on it.
They kind of.
So Ethereum has multiple implementations, right? There's one, probably the most popular one is called Geeth or Geth, which stands for Go Ethereum because it's built in Go and it's kind of the official one. As far as official thing go.
It's basically developed by the Ethereum foundation and I think it was the first one, at least the first one that was live.
And you also have a bunch of other ones. There used to be Parity and Parity was kind of dead because they stopped funding.
Wasn't Ethereum foundation was someone else. And then someone else picked it up. They changed the name I think to open Ethereum or whatever. So anyways, there are like, I don't know, there are probably like four or five different implement in Ethereum, unlike Bitcoin. Yeah.
[00:23:27] Speaker A: Did they hard fork to get all the. Wasn't. Was. Wasn't a parody bug separate from the Dow. Did they actually hard fork to get all those coins out of parody?
[00:23:38] Speaker B: They did not.
The parody coins are still stuck.
[00:23:43] Speaker A: That's probably why that died.
[00:23:47] Speaker B: Oh well, yes. I mean, depends again on who you asked, but if you ask me, then yes.
[00:23:54] Speaker A: Yeah.
[00:23:55] Speaker B: So there is a lot of animosity there and I'm sure it's related.
[00:23:58] Speaker A: I can't imagine.
[00:24:04] Speaker B: Yes, but it's okay. It's just $100 million. You know, the funny thing is that all, you know, they did this ICO for Polkadot or whatever it was, and it was, you know, I think it was nine figures. And then the majority, it wasn't 100 million. It was close to 100 million then. So the majority of it gets locked up forever and they like they do, they make this announcement, you know, it's a bummer. We hope we, we hope we can call this back somehow. But if not, it's fine. We have, you know, we have the funding we need. Polkadot is not in danger. You just, you know, we just, we just raised four times more than what we needed. It's all good. Don't worry about it.
[00:24:48] Speaker A: So the project is. Okay, everybody, I know this is your top concern.
[00:24:54] Speaker B: We just lost like, you know, $50 million. It's fine. It's fine.
Moving on. Okay, so. But that, no, but that's not related at all to the recent bug. So there are multiple implementations. And Ethereum, unlike Bitcoin, also has a spec specifications for how it's supposed to work. I guess there's this document, I think they're referring to the yellow paper when they talk about the spec. I'm not sure.
[00:25:23] Speaker A: Yellow paper.
[00:25:28] Speaker B: Yeah. So when Ethereum started, when Ethereum was still a little ICO and didn't launch yet, they had the white paper, which was. The white paper was for ordinary people, quote, ordinary people who could. Who. Which didn't have a ton of technical information, but actually it was fairly unreadable on its own. But like it was way more complex than the Bitcoin white paper. But then the yellow paper was like sort of a formal specification for it, I think it was. It was dozens of pages, I believe. If I remember correctly, I couldn't get past the first paragraph of it. It was completely Chinese to me.
But so I think, yeah, I'm not sure if they're referring to that as the spec or if there's something more modern these days, I don't know. But anyways, there's something. And.
And the limitations, I guess, are supposed to stick to the spec. Now, Bitcoin people will say, especially developers, especially protocol developers will say that this is insane because, well, the thinking goes around Bitcoin, there's famously no spec in Bitcoin. And the thinking goes that, let's say you have an implementation and you have the specific. So then the Bitcoin implementation is found to have a bug, then, well, is the spec wrong or is the implementation wrong? Because the implementation is what people actually run and this is what actually shows you your balance and whatever. So are you actually going to change if it's just, you know, if it's just a stupid bug, if it's nothing, you know, are you going to change the spec? Are you going to change the bug for everyone and roll it back just because the spec says so? That seems, that seems like a silly ordeal indeed. In Bitcoin there are many of those bugs.
There are technical bugs related to multisig and a bunch of stuff that are like, they don't matter, you work around them. But if you had a spec, then you would just. All transactions passed from the past will become invalid because you just changed the implementation to fit the specific. Yeah, anyways, so it turns out that, you know, the Go Ethereum implementation was out of sync with the spec in some way. There was some bug that existed in that implementation, but only in the other ones, and that bug could have it.
Basically, if some specifically constructed transaction would trigger the bug, then it might have. Might cause a split with the ones who actually process it correctly based on the spec.
But the thing is that Go. Ethereum is the most popular implementation. There are other ones, but hardly anyone uses them. There's one that is used by maybe a small percentage of people and the rest are almost not used by anyone. So you could. So like the stance of the Ethereum foundation is our implementation was not in sync with the spec, so we changed it to be in sync with the spec and there's nothing to say about it. Basically we just changed it and that's it. And you should have updated.
It's your job to just update it. And they didn't say they changed it back to be correct, but they didn't tell anyone for months.
[00:29:14] Speaker A: Completely incompatible if somebody took advantage of that difference, essentially.
[00:29:20] Speaker B: Yeah, so, so, yeah, so what they're, what they were actually doing is because they, they call it fix in the box. So they, they, they call what they've done fixing it. But, but the thing is, because they didn't tell anyone, and most people, or at least I don't want to say most people, but a lot of the important people, a lot of the important entities did not update. So that would be Infiora, which, which runs the infrastructure for tons of Ethereum apps and tons of exchanges too. And a lot of other people chose not to update their nodes just because in the past updates had bugs.
So they were just, you know, because there was no critical updates announced, there was no critical bugs that they knew of, they said, okay, we're going to stick with the old version until maybe next year, we'll upgrade, there's no hurry.
And they did. So it was a calculated decision, they weren't slacking off, it was a risk management thing. But then what that means is because the older versions still have that bug, then they can be split off the network. And anyone who knows about the bug fix, which the Ethereum foundation knew about but didn't tell anyone, so anyone who knows can use that knowledge in order to fork the network to split the network. Because now they know, they know who has the old versions, they know everything they need to do to really wreak havoc. Like really, it could, could end really badly because, you know, it took a while, I think, for, it took a few blocks for people to realize what's going on and kind of stop deposits and whatever. But you could, you know, you could use that to deposit funds on one split fake chain and not deposit them on the real chain and then just run off with some money. You could do that. You could do a bunch of stuff.
[00:31:21] Speaker A: So they just. So what was the reasoning for not telling anybody what was the reasoning for just leaving this. Like, it seems like, like setting up a trap for yourself and not letting anybody, like just waiting for somebody to walk into it. And I just.
[00:31:41] Speaker B: Yeah, it's the, really, the amazing thing about it is that the way that the bug effectually eventually was triggered was that there was. At least that's the claim. There's this team that is building a layer 2 solution for Ethereum called Optimism and they claimed that they found the bug independently and they wanted to test it. So they tested it on production to see what will happen.
[00:32:07] Speaker A: Oh my God.
[00:32:10] Speaker B: That's literally what their explanation says is we didn't know how it was going to act so we wanted to try. And they do admit that it wasn't a good idea. But I mean, it's shocking. It's shocking that it's like what, you found that bug so you wanted to test it in production.
What? What are you talking about? This is insane. And those are people, those are like very trusted developers in the Ethereum community. So it's kind of shocking.
[00:32:42] Speaker A: It sounds a whole lot like the parody bug when he was like, oops, I think I killed it.
[00:32:47] Speaker B: Yeah, yeah. So it sounds exactly the same. But in the parody bug, you know, it was this anonymous thing. It was this nobody who knows who it really was. Yeah, yeah, but it seemed to have been this anonymous person. But here they like, they're the most respected team, I think, in the layer 2 or one of the most respected ones in the layer 2 scene in Ethereum they're like very, they used to be at least very respected and I just don't get it. I really don't get it. So it almost seems like there's know, parts of the story that we don't know because I find it hard to believe that people are so dumb on both sides, both on, you know, the, the side of triggered it and the way that the Ethereum foundation handled this for months, it's just really, I, I don't know what to tell you. It's just ridiculous.
[00:33:38] Speaker A: So basically.
Oh, sorry, sorry.
[00:33:41] Speaker B: They have the, the, they have the postmortem that they posted on GitHub and Greg Maxwell, who's a very early bitcoin core contributor, he replied to that essentially because they compared their reaction to things that people did on bitcoin in the past and he was kind of saying, no, that's not at all what we were doing at bitcoin.
And he was saying there are definitely bugs in the past that affected bitcoin core and were fixed without making an announcement. Because the idea was that if you're going to make the announcement, you might put people in risk and you want to wait until people upgrade. But they did a lot of things to mitigate that. So one thing they did is they would announce a fix for another smaller bug that they felt safe talking about. And they urged everyone to upgrade because of the smaller bug, knowing that this is going to push the fix to the bigger bug.
And the people are going to upgrade because they know there's something going on, even without revealing the exact real serious bug. So that's one thing that they always do when they use that tactic. The other thing is that they try to first protect, you know, first protect people who do not upgrade too.
And the way to do that is usually to make sure that miners don't even include transactions that can trigger the bug. So you essentially make transactions that can trigger the bug. You make them out of consensus, basically.
So that way if enough miners upgrade, that's gonna protect people who don't upgrade. So those are two tactics that they use in Bitcoin and in Ethereum. They just didn't.
And it's really funny, it looks like they just didn't think of the things that could happen.
That's what they say, at least. And they present, the postmortem says that what's the wording that they use?
That it was the right call, that they believe they made the right call, which really, I mean, come on, you did not make. It's pretty clear that you didn't make the right call here.
It's maybe the right call to fix the bug without announcing it at first, maybe. But then you have to, you know, you have to take some precautions if you're going to do that, because that's a risky thing to do. And they just didn't take any precautions whatsoever. And it's been like, I don't know, four months, six months. I don't even remember the exact. But it's been a few months since they did did that. And what, like when were you planning on telling people? Like 20, 25, Wednesday, when Ethereum 3.0 launches. When were you planning on telling people?
[00:36:44] Speaker A: Oh man, I don't know, it seems so crazy.
Like it's so, it's so polar opposite. Like the thinking in Bitcoin is that like that no matter what, like protect the, like you said, protect the old clients, protect everybody. Make sure that this can't split the network, that this can't cause huge infrastructure level problems. Because we want, we want to stay in Consensus, we want to keep the same fundamental rules of Bitcoin. We don't want to be risking the money. And again, you know, maybe this goes back to the very initial perspective. Difference of eth is just there to make the blockchain work versus the, the blockchain is there to make Bitcoin work. Like just that difference in perspective is that we want to secure reliable, immutable money. And they're like, whatever the money is, just throw some points out there so that we can have this really low, big hulking database.
[00:37:47] Speaker B: Yeah, this is a few databases.
Yeah. You know, I think, I think, yeah, I think one difference that is a bit hard to spot is that with Bitcoin, you know, if something really goes wrong, like, you know, let's, there's, let's say there was an inflation bug and people were actually using, actually using the inflated coins before people caught it. And then, you know, it becomes a mess because what are you going to do? So some people are going to be out of money. If you're going to fix that, and then you might end up, or maybe it's something even more complex than that and you're going to end up with a few proposals for fixing it and then you're going to have two competing proposals for the fix and that becomes a political nightmare.
So I think they really want to avoid that. They really want to avoid a situation where, you know, where someone has to make like this political leadership decision because there really isn't anyone who can take it. And then, so then if something happens that requires this leadership position, then we're going to have a big problem on our hands and probably a few maybe, you know, few hard months in front of us. And on Ethereum, though, you know, if there's a problem, if there's a bug, if there's whatever, if extra inflation, if there's really anything, then there is leadership that can take the decision. So it's not such a big deal. They just, you know, they're gonna just decide what the fix is. Like they did in this particular instance. They decided what the fixes they didn't even see.
Yeah, you don't even need to know. We decided for you and we decided you don't need to know and that's it. And so you really don't need, you don't need that.
So you don't need to be afraid of those big breaking bugs in Ethereum because it's pretty centralized and there's going to be a fix and Vitalik is going to tell you what to do and it's going to be fine.
[00:40:03] Speaker A: In Vitalik we trust.
[00:40:05] Speaker B: Yeah.
And to his defense, he's really trying to take a step back. I don't think he said a single word about this thing. I didn't see anything. Anyways, he was really trying to stick, to take a step back. But again if, you know, if really shit hits the fan and things really get bad, then I have no doubt that he will pick up the gauntlet and just go with a solution that he likes because that's gonna fix the problem. So.
So I guess, you know, I don't know if it's an adventure advantage or a disadvantage, but it is what it is.
[00:40:41] Speaker A: So it's basically everybody like the, the solution or the this is what you got to do answer was just everybody to upgrade. Upgrade to the exact same client, like to the same version of the same client.
[00:40:54] Speaker B: Yeah, well, I mean if you were on the other implementations, you're fine because they didn't even have the bug in the first place.
[00:41:02] Speaker A: Okay.
[00:41:04] Speaker B: But yeah, if you're on the.
One of the people, one of the, everyone that is using the Ethereum client, then yeah, you should upgrade to the latest one. And you know, it was.
People caught the split early, relatively early. I don't think that, I think there are, there's a bunch of money loss especially because Infura was down. Some people were using Infura based apps and they, you know, there was the Oracle stuff going on. There was a lot of like adjacent non, you know, not transactional use cases that were affected.
So people lost. I saw, I think I remember seeing like someone talking about a few dozen thousand dollars that were lost by some people on some project and maybe some others. But it's, you know, for Ethereum that's nothing. You lose use seven to eight figures every day.
[00:42:07] Speaker A: We're talking about tens, hundreds of dollars. Guys, give me. Get out of here with this peanuts. Get out of here.
[00:42:16] Speaker B: Yeah, yeah.
[00:42:18] Speaker A: Good lord.
[00:42:19] Speaker B: That's just Ethereum. Yeah, I think people are okay with it.
[00:42:25] Speaker A: Seems to be, it seems to be. I mean you, that was one of the things that you said in your pro Ethereum thread or whatever that thought was kind of funny is that this is all priced in.
Everybody knows this is how Ethereum works and this has been going on for years.
Every single time they have some huge problem like this, it's kind of reinforced that this is sort of the treatment or that things are going to get rolled back by the central group that controls it. Everybody's just going to do what they're told by the people in charge. You know, this is a highly centralized project and everybody kind of knows it. And so when things like this happen, the price isn't going to dump because they're already expecting all of this. This is an eventuality, you know, like this is just going to happen at some point, which is hilarious in some respects, but, but then just kind of fascinating in another way.
[00:43:28] Speaker B: Yeah, it is interesting. Again, it's the very different perception that people have on the Ethereum side.
They don't expect it to be Bitcoin.
I think it's pretty obvious at this point that Bitcoin, Ethereum aren't competitors. Really what does happen is that marketing people often try to position Ethereum as a Bitcoin competitor just because Bitcoin has all of this mainstream interest that Ethereum doesn't. So they try to position it as a competitor, but it's really not, it's really not doing the same thing. It's really not trying to do the same thing. It's completely different.
But funnily enough, what Ethereum people will usually tell you, well, yeah, Ethereum, it's not the same as Bitcoin, it's completely different. But you can build Bitcoin on top of Ethereum, so we don't need Bitcoin.
One day someone's just going to migrate Bitcoin onto Ethereum. That's it.
[00:44:27] Speaker A: Of them not understanding how Bitcoin works.
[00:44:31] Speaker B: I think it's more likely that someone is going to migrate Bitcoin to Google Sheets than to Ethereum.
[00:44:38] Speaker A: But I'm just going to put Bitcoin on top of the bank and it will be the same Bitcoin.
[00:44:46] Speaker B: Well, it will be cheaper and faster than Ethereum, so I don't see why not. But.
[00:44:53] Speaker A: That'S what wins.
[00:44:53] Speaker B: But yeah, if we're gonna migrate away, then I don't think we're gonna choose Ethereum. But fine, you could pick anything, but you're gonna go with Ethereum. I don't think so.
[00:45:07] Speaker A: Are we gonna, how many stages of. How many stages of Ethereum? 2 Are we gonna get? And this is gonna keep happening. Like, is this, like, is this just gonna be like a regular occurrence during all of this?
[00:45:24] Speaker B: What you mean like those bug things?
[00:45:26] Speaker A: Yeah, I'm just forks and just, I just can't imagine that these phases just don't have headache on top of headache on top of headache here.
[00:45:39] Speaker B: It's, well, it's. Again, it's part of the marketing machine. The phases have to be very big and disruptive. That's kind of the point.
That's again, that's a very different thing from bitcoin but they kind of, they want it to be this main event that everyone's gonna talk about. It's gonna affect you and disrupt you. And so it's kind of designed to be that way.
It's kind of unbelievable because you know, the point, what I find interesting in bitcoin is as you know, as a money is that I know what it's going to be like in 20 years from now. I know what to expect. You can just lay it out, you.
[00:46:19] Speaker A: Know exactly what's coming. Yeah.
[00:46:21] Speaker B: And that's what I, that's like if we didn't have that, I wouldn't be interested. That's the thing.
Because you know, I can buy stocks, I can buy bonds. I don't need a blockchain based penny stock. I have other penny stock. I don't need that.
I get that it's cool, but I don't like, it's not particularly attractive. The thing that makes bitcoin different than all of the other assets that existed before it is that you know, you know what's going to happen in 20 years and they just threw that out of the window. Like you don't even know what's going to happen next month. You, I mean, you seriously don't know. No one can tell you in the universe. Nobody can tell you what's the ethereum inflation going to be in a month because they don't know if this 2.0 thing is going to activate tomorrow or in three months. No one knows. So it's impossible to tell you. It's not even, it's bigger than the supply gate thing now because that was like more of a technical thing of how do you count? But now they literally don't know what the inflation rate is going to be in a month.
So like what's the point of the thing?
[00:47:27] Speaker A: Lowest viable something. Don't you, oh yeah.
[00:47:32] Speaker B: The minimum viable inflation.
[00:47:33] Speaker A: That's a minimum, minimum viable inflation. Which is a great way of saying nothing specific. I don't know, figure it out when we get there.
[00:47:44] Speaker B: I mean isn't, doesn't the dollar have minimal viable inflation?
That's the, that's the, that's the point of everything.
[00:47:51] Speaker A: Yeah. And that right now it just happens to be six or seven trillion dollars a year.
[00:47:58] Speaker B: That's the minimum viable one. That's the, you know, we looked into it. There was a research, we have charts. That's the minimum viable one right now.
[00:48:08] Speaker A: Unfortunately the world is going to go to hell if we don't do this right here.
[00:48:14] Speaker B: Yeah.
[00:48:18] Speaker A: When is phase one? Or is that even? Is that even?
[00:48:22] Speaker B: No, there's no date.
[00:48:24] Speaker A: There's no date. Okay.
[00:48:26] Speaker B: Yeah, I would assume, and I'm not, I'm not being, I'm not being adversarial now, I would assume two to three years at the minimum. I wouldn't expect any earlier than that.
[00:48:38] Speaker A: Is that any, is that when, like, major code changes happen? Like, to see that seems crazy, that phase zero. These people are just like, signing themselves up for this.
[00:48:48] Speaker B: Like, well, as you can see, not a lot of people are signing up for that. It's actually very unattractive.
[00:48:54] Speaker A: That's very good.
[00:48:54] Speaker B: It's not a very good deal.
But yeah, I, I, it's gonna be this thing where people are gonna, there's gonna be a lot of marketing involved. There already is. Like, if you're looking at Ethereum influencers, then they're pushing this stupid narrative that you should be validating your Ethereum 2.0 node or whatever and get your coins. And you need to buy 32 ETH, because the minimum to stake is 32 ETH, and you need to do it now before it reaches like $5,000 per coin. You can't afford it anymore.
That's just ridiculous. Really, there's no, like, it's, by the way, this is, I think, an important thing to know if someone actually, because, look, I don't hold any grudge if someone is actually interested in Ethereum and just because here's the thing, okay? This is an important thing to know in Ethereum Ethereum holders, really. If someone is an Ethereum holder today, you can assume that they're not very smart, okay? Because you should have sold in 2017, which is what a lot of smart bitcoiners did. They invest in Ethereum early on and they sold around the top in 2017. So if you're still bag holding for years, then you just, you made a wrong turn, man.
So what that means is now it's still worth a lot of money. So if someone bought, you know, if someone bought ETH in 2015, it's still worth a lot of money now.
Just not as much as it could have. Like about, I don't know, 30 times less than it could have. I don't know, I don't know the exact numbers, but I'm probably, probably more like 10 times less.
But.
So it could have been worth more.
So you made a mistake there. So what we have is we have a lot of rich people and they're not very smart and they keep gambling their money. So if you know what you're doing, there are a lot of opportunities there for you to go in and take their money. Basically, they keep creating those opportunities for you. So I have no grudge for people who find interest in looking at those opportunities and trying to take money away from ethplebs. I think it's a very virtuous thing to do.
And so if you're someone who's looking at Ethereum 2.0 and you're thinking, well, is there an opportunity there?
Then I would just point out to you that the whole 32eth meme is just a meme. You don't need 32eth in order to stake.
You can buy as many eth as you want and then you can just pool them. So there are a bunch of ways to pull them. You can pull them at an exchange or some staking provider, or they're probably going to be like some smart contracts to do that as well. So there are multiple ways you can pull your eth with other people's eth and just stake. That way you don't actually have to own 32 of them if that's more than you can afford or whatever.
So just keep that in mind. Most of the memes around staking are just memes.
[00:52:07] Speaker A: And if you want to. If you want to play the shitcoin casino and, you know, I kind of feel the same way. Like, I don't really.
Like, I just hate it when people are delusional or lie about why they're over there or, like, I don't really care. Like, I've. I've had. I have a history of, you know, buying shitcoins that I thought might go up for the next five days and then dumping them. Like, I play a little bit of casino slots every once in a while.
And so, like, I don't have really anything against people personally, but I just think it's a terribly stupid thing to do. And I don't. I hate it when somebody goes in there delusional thinking like, this thing's going to change the world. And I don't have one good piece of. And I really tried. I, like, I really have not just totally passed this off as like, all of these are shit coins or whatever. I really tried for a really long time. One of my original ideas of the show was I was going to go through, like, the crypto economy before it became bitcoin. Audible was I was going to go through and I was going to, like, have audio for, like 100 white papers for the, you know, top coins or whatever, and really dig in to see if any of these things had something useful. I was really interested in namecoin at the beginning. It seemed like, yeah, it would be great to have a decent.
Yeah. And. But it just kept getting. It just seemed the longer. Longer and longer that things went on, it seems so obvious that all the. The mindset of all of these things were totally backwards.
And I don't know, I just don't. I just hate to see people get butt raped in these projects, just have their money just stolen from them while they're squealing at me about how this is gonna change the world. And I'm like, dude, there's not even that.
So sad. It's so sad. I feel so bad for a lot of the people, but then they call me stupid and I'm like, man, I'm trying to.
I'm trying to help you.
[00:54:12] Speaker B: God, we'll have to learn on their. I, you know, I think some of us have had it easy in a way, because we especially, you know, if we. If we joined the space before it really became, like, super commercialized in 2017.
[00:54:32] Speaker A: Yeah.
[00:54:32] Speaker B: Then we had the chance to see, you know, to have a view that people today don't have. And, yeah, I definitely benefited. It was.
Yeah. It used to be easier to look at bitcoin and say, okay, bitcoin is obviously like the thing. And the rest of them are, you know, it's more. Most. I'm interested. I'm going to look, I'm going to. I'm going to be cautiously optimistic. That used to be easier. Now, like, you're not even. You're probably not going to even hear of bitcoin first. Not while I'm exaggerating, but. But it's. It's very possible that some marketer is going to get to you with some other coin before you really had the opportunity to learn about bitcoin at all.
[00:55:14] Speaker A: And then they'll teach you about bitcoin and it'll be about how low and expensive steam engine technology that it is.
[00:55:23] Speaker B: Yes. The MySpace of crypto.
[00:55:26] Speaker A: The pain. Pain is so real.
Dear God.
[00:55:31] Speaker B: So it's. It's. I. I can, you know, I can understand the.
And then, you know, we show up and we say, well, it's. It doesn't work. It doesn't this and doesn't that. And they, you know, they. They don't have the tools to even understand what we're saying. So they're like, okay, this guy is just, he's a hater. He's an idiot or whatever.
[00:55:50] Speaker A: And they used MetaMask. It worked. They said, yes, I got my new tech.
[00:55:57] Speaker B: Well, MetaMask stopped working when the whole split thing happened because.
[00:56:01] Speaker A: Oh no.
[00:56:03] Speaker B: Yeah, it just stopped working completely because the, because MetaMask uses Infura and Infura was down. Now there are ways to use MetaMask with other providers, but, you know, no one knows MetaMask works.
So just, you know, suddenly all of the apps stopped working. You know, decentralized apps, old stopped working.
[00:56:31] Speaker A: It's amazing how many things are like, I don't know of anything. I mean, I'm sure, I'm sure there are plenty of things, but I just know that the vast majority of it is so reliant on a couple of like main pieces of software. And then those few main pieces of software are all talking to Infura. Like it's, it's amazing how much can go down and how quickly with just a few pins pulled out of the, out of the gears of the system and.
[00:57:02] Speaker B: Yeah, oof.
[00:57:04] Speaker A: Oof. It's just really, really lots of single points of failure from.
[00:57:11] Speaker B: Yeah, each of them is the single point of failure. Like, it's like, it's like reverse multi sig. You know, with multi sig, you have the benefit of if a few of them go wrong, then you're still fine.
With Ethereum, they keep adding on single points of failure. If any one of them goes down, then everything goes down. That's like, why are you doing this?
This is just bad.
[00:57:35] Speaker A: Like it's like a 50 multi sig and everybody and then they're distributed everywhere.
[00:57:49] Speaker B: It's like safer to use any centralized service. It's literally safer because then only one person can fuck you. Now in most of your apps, you actually have like multiple parties who can screw you over each independently. Why would you, why would you want that? That's.
But it is what it is.
[00:58:10] Speaker A: Well, maybe. Well, at least optimism may have like a bright, at least bright vision for the future.
Whether or not they break it for everybody else.
[00:58:21] Speaker B: They're gonna break everything until there's nothing left to break. And then Ethereum will be resilient. That's the plan.
[00:58:26] Speaker A: We optimistically smash the entire Ethereum network.
[00:58:31] Speaker B: So.
[00:58:32] Speaker A: Sorry.
[00:58:35] Speaker B: They're really smart. They're like, really a lot of like the smartest people in Ethereum are there, in my opinion. I don't understand. I really don't get how that happened. I don't get it.
I don't Know.
[00:58:49] Speaker A: What an interesting thing you think we'll actually get? Ethereum 2.0.
What's your. What's your answer? If you had to bet. If you had to bet on it.
[00:58:58] Speaker B: Yes, but maybe not in the way people think. The thing about Ethereum stuff is that you can always change what the words mean. So if the current Plan for Ethereum 2.0 doesn't work out, we can just call something else Ethereum 2.0. That's not a problem. You know, defi. If you ask. If you looked At DeFi just six months ago, it was something completely different than what it is now. Completely different. It has absolutely nothing in common with what it is now.
But it didn't work out and people didn't really use it, so now something else is defy. That's fine. There's no problem. You just. You just change what the words mean.
[00:59:40] Speaker A: Just get those. Get those real good, solid buzzwords, and then we'll put whatever code happens to work behind it. Yeah, I still can't get over that. They called a yellow paper. That's so. It just seems like it's like. It's like Bitcoin white paper, except we peed on it.
Just. It's a horrible color choice. Like, why would you do that?
[01:00:02] Speaker B: I think it's a technical term. I don't. I don't know.
[01:00:05] Speaker A: Oh, man, that's just a bad idea. That would at least make me feel better that they didn't come up with it. There. That would. I would feel that was the case.
[01:00:14] Speaker B: No, I mean, I think. I think they didn't come up with it. I think it's. I'm not sure. I think, like, maybe I'm wrong. I think that's what means, like, the yellow paper is more.
[01:00:24] Speaker A: We'll give them the. I don't know. We'll get them the benefit of the doubt, you know, it's five years ago.
[01:00:29] Speaker B: Six years ago, whatever it was.
[01:00:33] Speaker A: All right, ma'am. Well, yeah, I think. I think we've pretty much covered. I think we've pretty much.
[01:00:39] Speaker B: We now know what Ethereum is.
[01:00:41] Speaker A: You now know what Ethereum is, is a world computer run by some dudes who will break it and won't tell you and tell you.
[01:00:50] Speaker B: But it's fine.
[01:00:52] Speaker A: It's okay. They'll fix it then, and they made the right decision. Just download whatever they send, whatever files they send you, and install it and you'll be good. You'll be.
[01:01:07] Speaker B: Yep. Yep, man.
[01:01:09] Speaker A: Well, dude, I appreciate you coming on the show. This has been. This has been A blast. What you got to show. I'm sure you got some good stuff for the. The shitcoin Insider audience here.
[01:01:21] Speaker B: Well, now that I'm no longer Twitter, I deleted my Twitter account.
[01:01:26] Speaker A: Monster. You monster.
[01:01:28] Speaker B: Yes. So now that I'm no longer Twitter, I.
I recommend everyone and anyone to keep following my escapades on have Fun staying poor dot com. This is where I am right now. Sign up and you can see all my crap.
That's it.
[01:01:47] Speaker A: Do I get. Do I get most of that in the Pro Ethereum channel or do I need to go to have fun staying poor?
[01:01:53] Speaker B: No, it's a completely different Pro Ethereum is for. We have Ethereum whales there.
The top Ethereum investors are subscribed to Pro Ethereum alerts and they get all of the data.
So that's for. That's for people who are Pro Ethereum. If you're not really into Ethereum, then have fun staying poor dot com. That's the place for you.
[01:02:17] Speaker A: All right, I got it. I just joined. I can't believe I didn't know about this one.
I feel like I was out of the loop. I'm so glad. I'm so glad I had you on just so I could fix this.
[01:02:29] Speaker B: Amazing.
[01:02:30] Speaker A: All right, dude. Well, I'm going to give some hell to my co host for apparently maybe not waking up or just totally forgetting that it was today.
And I'll bitch at him and tell him about what a wonderful time we had and maybe we can do it again in like three or four years when eth 2.0 phase 1 eth phase 0.3 starts. Start.
[01:02:58] Speaker B: Decided to, if, you know, go straight.
[01:03:00] Speaker A: To x ef x. I like that. I like that. It'd be like the Xbox.
[01:03:09] Speaker B: Yep.
Yep. Cool. Okay. This was fun. Yeah, dude, thanks a lot.
[01:03:14] Speaker A: I appreciate it, dude.
[01:03:15] Speaker B: And next time later.
[01:03:21] Speaker A: All right, I hope you guys enjoyed that one. I had an absolute blast. A huge thank you to Udi for coming on the show.
Do not forget to check out havefunstayingpoor.com. follow his pro Ethereum channel on Telegram, and of course, do not follow him on social media because he is no longer there. But most importantly, don't forget to follow and subscribe to ShitCoin Insider. We have got a lot of great episodes on the horizon and my Covert co host will be returning. It's going to be amazing and you don't want to miss it. I can already smell it. I am Guy Swan and I'll catch you all on the next episode of Shitcoin Insider.
[01:04:13] Speaker B: This podcast is part of the C Suite Radio Network, Turning the volume up on business.
