Join us as we gather around the hedge,
where we dig into technology,
business, and culture with the finest minds in
computer networking.
Good morning, Tom. How are you? Good morning,
Russ. I'm doing well. How about yourself? Fine.
One of two today.
Yes. Yes. It's gonna be a good day.
Yeah. Once we finish this podcast, we'll be
halfway done with all the work you have
to get done today.
I love Friday. Other other than turning the
plant
to make sure it doesn't grow crazy in
one direction. I don't know what to do
about that.
So today, we are joined by Austin Fedor
Fedorra?
Fedorra? How do you say it? Fedorra? I'm
not sure. Fedorra. Okay. Awesome. Great.
And where are you, Austin? Other than sitting
in front of the empty cat bed.
Yes. I am based in New York City.
Okay. Awesome. What part? Just curious.
I'm over in Brooklyn.
Okay. I used to, I used to work
at a small reseller,
EMC squared, and we did a lot of
work
in that area. And we actually did work
at the hot one of our clients was
the Haagen Dazs factory,
and I believe it's in Brooklyn. And there's
nothing like an ice cream bar directly off
the line before it's been blast freeze.
That's like, that's like crazy good ice cream
right there.
So,
yeah, it was really good. And then I
worked at the
United Engineering Center for a couple of years,
which is gone now, so whatever. It's called
across the street from the UN.
So that building is now gone. But at
any rate. So New York City, Brooklyn. Yep.
Very familiar with the area.
Alright. Awesome. So today, we are talking about
blockchain,
and Austin's gonna explain everything there is no.
Forget that.
Austin. Let's see what we can do. We
only have an hour. Yeah. So,
Austin's gonna talk about scaling. So I know
that, like, there's been stories about water and
power and all sorts of issues around data
center space. And, of course, we know that
blockchain relies on proof of work,
which others think is hilarious. I see these
news stories. We're gonna reduce the amount of
proof of work in blockchain. I'm like,
don't you, like,
do you not understand blockchain?
Yeah. You really,
it's kinda one of these funny things where
so back when blockchain originally started, right, if
we go back to sort of, like, the
Bitcoin days and the original versions of Ethereum,
proof of work was was the standard. It
was what everything was using.
And it basically runs on its security model.
People think about it as hash power, but
hash power is really just a proxy for
energy usage.
Right? The security of Bitcoin comes from the
fact that
you can't buy enough coal plants to attack
the network. The actual power demand that you
need to assemble to run the miners
to try and attack the network
is, like, you know, the entire production of
a mid sized
European country. It's just not Yeah. Viable for
someone to even obtain that much electricity.
The good news, though, is that, you know,
starting in sort of roughly 2019 and really
the transition, you know, continued into 2022 and
2023.
But at this point, Bitcoin and Doge are
really the only two prominent protocols in crypto
that are still on proof of work. Everything
else has switched over to proof of stake,
which basically is the same energy profile as
any typical web two application would.
Yeah. It's interesting because when I talked to
Radia Perlman many years ago
about Bitcoin and proof of work, she was
very insistent that she would never invest in
a proof of work system
because, because of what you just said, like
some country could dedicate
some large country. It wouldn't be a mid
sized country. That'd be a large company, China,
India, Russia, picked something, you know, something like
that, or some first world like US or
Australia or something
could actually dedicate enough energy resources
to control more than 50%
of the processing power thrown at Bitcoin.
And then they could just basically take the
chain over and there would be no undoing.
It would be just a done thing
because it's it's unidirectional.
So that's that's interesting that you talk about
proof of stake. So can you explain the
difference between proof of stake and proof of
proof of work?
Yeah. So proof of stake uses basically the
scarcity of an asset class as a security
mechanism. And so with Bitcoin, right, Bitcoin is
valuable for you have a thousand theses for
why it's valuable. But the reason it's secure
is because as we talked about, the energy
budget is so high to attack. Yeah.
With proof of stake, it's a little bit
different. So if you look at a network
like Solana, there's approximately, you know, 500,000,000
tokens out there. And there are some that
are programmatically created due to, like, inflation on
the protocol
to pull the same type of attack. Right?
The attack vector for a proof of work
protocol
is you physically build enough miners,
basically, you know, compute units to attack the
network. With proof of stake, you have to
actually buy them and acquire them. So you
can do that through hacking,
as, you know, North Korea is prone to
do, or you can, you know, do that
through purchasing them. But, you know, because there's
not actually, like, enough supply on the market
at any given time to attack them, it's
not like someone could just go on and
buy 30%
of the supply of Solana. The market's not
that deep. And even if it was, you'd
send the price, you know, up to the
moon just from trying to acquire all of
those all of those shares. It's very similar
to what happens in a traditional company if
there's, like, a a takeover that someone's trying
to pull.
It it takes years usually to acquire enough
shares and that, you know, to actually be
able to get a board seat on a
company. The the even the activist hedge funds
have to be very, you know,
surreptitious
about how they're purchasing shares and those sorts
of things.
So it's just a different security,
model. And so because of that, they have
different energy profiles because
the energy isn't securing proof of stake in
the same way it is proof of work.
Right. So so we could say that Bitcoin
is basically
a proof of stake, but it's in power,
essentially,
is what it is. Right? How much power
can you bring to the game?
How much Although the difference is, and this
is kind of really important from,
like, a
a economic and dynamic perspective.
In Bitcoin, your rewards are
their contribution to the network.
So if I contribute 10%
of the of the hash power, which, you
know, will be 10% of the power budget
to the network, I will get 10% of
the rewards for a given period of time.
Now, obviously, because Bitcoin,
it's you have to average it out over
a period of time. But, you know, over
enough time, I will average out to 10%.
That's not the case in a proof of
stake
system. It's based on how many tokens you
have attached to to your node,
your earn rate. And so it's a it's
a pretty interesting dynamic where one of the
advantages of Bitcoin is it has an attribute
of fairness to it, where if you're
bringing x percent of the security budget, you
receive exactly x percent of the reward.
Proof of stake networks don't have that same
dynamic.
So if your validator is 10 times more
performant than mine,
but I have more tokens than you, I
will earn more rewards than you even if
you are technically helping the network more.
Yeah. So so this is closer to a
physical asset then. It's closer to
real estate, for instance, where you happen to
buy the piece of property that the highway
is going through,
and therefore, you get to sell to a
gas station instead of a farm,
and therefore you suddenly
are much wealthier. Or even in the gold
market where, you know, if somebody tries to
to corner the gold market, well, guess what?
They're helping you just as much as they're
helping themselves in the long run. Or gold
miners even. Right? People who go out and
physically mine gold.
The the most productive mine doesn't always win
the financial game.
It depends on marketing and the ability to
get the gold to market and stuff like
that.
So it's interesting that
so this is closer to me just thinking
about it economically
to something like that land, gold, something that's
physical.
So
the result of that seems to be that
it will be closer to
physical financial
results, like
more
random
in the real world,
but yet
less
consumption of resources to get there. Is that
kind of the point?
Like, I mean, random by I mean, random,
like, you bought the land that was next
to the right next to the
highway, and you didn't realize you were doing
that, you know, a hundred years ago or
whatever it is. The the the thing that
makes proof of stake network secure
is the fact that they are valuable.
Right? Which is sort of a tautology if
you think about it. But, like, the the
more valuable,
you know, Apple gets, the harder it is
to get a board to get them to
buy enough shares to get a board seat
on Apple. Right? It it it's that same
exact type of structure. Structure. The place that
proof of work and so in both of
them, obviously,
they break
up caring enough to run the infrastructure. Right?
And so if the price drops to a
low enough point that someone can just buy
it, you know, at all, well, there's an
attack factor there with Bitcoin. If people stop
caring enough about Bitcoin to secure it, it
gets easier to attack it.
So they both sort of have the same
failure case. But in success case, they have
very different dynamics,
that are are you know, one of them,
I would say, more closely mimics,
probably, like, existing financial products and instruments that
would be a proof of stake network.
And the ones that more closely mirror commodities
in terms of, like, the properties of gold
or real estate or something along those lines,
even though real estate is not exactly a
commodity.
That that's kind of the proof of work
system.
So then so then what are the what
are the scaling challenges that you see?
Yeah. So, you know, it depends kind of
what you're looking at. So there's really only
Bitcoin is really the only protocol that has
no aspirations
to get faster. Right? One of the values
of Bitcoin is that it doesn't change. Right?
It doesn't need to get faster because
it as much as people talk about it
as a currency, you know, it really is
not no one's buying small things in Bitcoin
for the most part. Or if they do,
they're using it on top of some other
network like Lightning or Wrapped Bitcoin or something
along those lines. They're effectively using a derivative
of Bitcoin. They're not using Bitcoin. Yeah. For
those who don't know what lightning is, lightning
bunches up. It's like it's almost like a
bank, an intermediary bank, where they bunch up
15 or 20 or a 100 or a
thousand transactions
into a single transaction. So you have, like,
subtrees,
and you have, like, okay, I'm gonna take
this $10,000
in Bitcoin, and I'm gonna make that a
subtree, and people can do one and two
dollar transactions within that $10,000
scope.
And then the whole
transaction
as a bundle
gets pushed back to the blockchain.
So it's so it's,
so it allows you to do because a
lot of the problem with with Bitcoin in
this room is, like you said, it's it's
power based. Right?
Like, you don't wanna spend the power on
a 50¢ transaction. Like, that's crazy.
You're never gonna Yeah. There's there's not much
there's not much what's called sort of block
space, which is sort of how much data
you can fit in a block. There's not
much you can fit in a Bitcoin block,
plus the finality on them is very long.
You may depending on how much security confidence
you want, you may be waiting an hour
for your transaction to really settle, which, you
know, maybe for buying a house, that's fine.
But, like, it's not a day to day
payment. So Right. When we look out for
other types of networks, though, we we start
to see, like, smart contract networks, which was
sort of the thing Ethereum
pioneered back in the early days. And smart
contracts are really a fancy way of saying
there's a there's a runtime. Right? And the
minute there's a runtime, you can run programs
on it. And so,
the whole point of blockchains,
you know, have evolved from being this sort
of, like, cryptographically
secure asset type
to effectively what it is is it's it's
globally verifiable compute that has no
dependencies
that rely on trust in the process.
And that really is, like, what the whole
thing is is built for. So, for example,
when when I'm running code on a server
on AWS,
there's a lot of trust involved in that
assumption. I'm trusting that AWS is not inspecting
and monitoring the virtualized instance. I don't actually
know where that server is, you know, all
these sorts of things. And the way that
the program is constructed
is
minded because I assume I'm running in a
in a secure environment for the most part.
When a program runs on, blockchain, what's effectively
running it is is, you know, the
world's slowest virtualized instance of a computer.
And it's running, you know, like, most blockchains
do one thing at a time or they
have some amounts of parallelization, but not a
ton.
And that really is like a giant in
order operation computer, and that was the first
version. This was the Ethereum virtual machine. It
was kind of the first network you could
deploy programs onto. These programs were very compute
starved. They actually more closely remembered, resembled computer
programs from, like, the seventies and eighties where,
like, you can't really do like, it took
people a while to be able to do
floating point math on blockchains. Right? There just
wasn't a lot of capacity available for these
types of things.
And so that was kind of one of
the examples that that, you know, we look
at as, like, a scaling problem is how
do you get more compute available? How do
you get more block space available? There were
a bunch of those types of questions that
were sort of the original ideas of of
how do you scale a blockchain.
So why do you want more compute? Direction
we can go from there. Yeah. Why why
do you want more compute? I guess, is
the first question. It feels like it should
just be
a storage of past transactions. So, like, what
what does the compute get me?
So there's a whole bunch of, like if
you sort of think about it from the
perspective of, like, a database.
Right?
The most basic thing of a database, its
function is to write data into and store
Well, you also need to do things like
build an index. And what if you want
to run analysis on the data that's within
it? So the first version of blockchain was
exactly that. It was Bitcoin. Right? And all
Bitcoin cares about
is recording entries in a ledger and keeping
very good accounting.
And the whole point of it is to
make sure you can't do something called double
spend.
And double spend is exactly what it sounds
like. It's I do a transaction,
with each of you at the same time.
Only one of those transaction can go through
because I only have a certain amount of
of tokens. I can't spend it in two
places at the same time.
And, you know, the double spend problem in
the traditional world is solved by one or
two ways. Either we have cash. Right? Right,
and there's only x amount of bills. And
so if I have a $10 bill, I
can only spend it once.
Or we have a bunch of systems of
chargebacks
and authorizations
and preauthorizations
that don't actually prevent double spend. They just,
add some checks and balances in the process,
and then we sort of solve it through
a bunch of, like, credit card fees and
other types of things. So, like, I can
theoretically get a credit card that allows me
to spend more money than I have, and
that is a double spend problem in a
sort. We've just got a complicated court system
behind it. So to get to the question
of, like, why do we want compute on
chain,
we basically won't compute on chain for the
same reason
we everything else. The minute you can add
compute to a system, you add programmability,
and programmability
adds flexibility.
So it's kind of the same argument of,
like, oh, like, why do we need computers
inside of, like, most of our electrical grid
infrastructure? It's like, well, for management.
And on blockchain management field can be a
very different type of thing. So there's this
concept of, like, programmable
money, and it's both a technical concept and
a real concept. But the minute you have
something that is an asset where
you can program qualities into it,
the entire dynamic of how we relate to
an asset changes. So I can give you
a bunch of examples, but, like, one of
the simplest ones was actually Andrew Yang had
this whole idea for
rebuilding
food assistance in New York City
onto a crypto based network that would be
run by the city. And the reason for
this is you can do a bunch of
things with compute that you can't do in
the traditional system. So
a great example of this is
they could give you money that, for example,
increases or decreases based on a time interval.
Right? So you could have a system where,
let's say,
you know, we go into COVID two. There's
another stimulus check that goes out. What's the
point of a stimulus check? The point of
a stimulus check is for people to spend
it to keep the economy going. If you
take the stimulus check and you put it
in your bank account, that actually doesn't do
any good. That's not like what the people
at the Fed want. They want you to
go
to stay open. So you could write, for
example, a programmable money contract
that says
every
week, we decree we we basically delete 5%
of the money we sent you if you
haven't spent it.
And so suddenly, you have an incentive to
spend that money as opposed to save that
money. And that's something that, like, in theory,
you could, I guess, do in a traditional
stimulus check. But it's something that, like, the
entire infrastructure of how we manage this stuff
is not set up at all to allow
that type of computation.
With blockchain, like, rebalancing
and auto compounding and these sorts of things,
they're just baked in because the systems are
built from the ground up, like, to be
accounting and tracking ledgers. And that means making
programmatic modifications to them is like quite trivial.
So is it sounds
it isn't there though some security in the
fact that the money supply like, if if
we just look at traditional economy, not Bitcoin,
isn't there some security in the fact that
the money supply itself can't do anything?
That it has that someone else has to
use it for like, an intelligent agent has
to use it for a purpose? I mean,
it doesn't it represent a a security risk?
I would say, maybe it's just a philosophical
thing, but, like,
that that the money itself can't do anything.
In this in this sense, it seems that
the the, you know, the the money is
is is intelligent. Doesn't that represent a risk
to the system?
It sort of represents a risk the same
way that, like, smart traffic lights represent a
risk. Right? And, like, gas pipelines represent a
risk. Right?
All of these types of things have some
anytime you add a computer onto something, like,
you have created in some abstract sense a
security vulnerability into that system.
Right. So it's really just a question of,
like, are the trade offs that you get
from this
worth it? Right? The the safest, most efficient
system in the world is one where we
all pay in a heavy, hard to move
physical asset.
Right? Right.
And there's a lot of downsides to that.
Like, you're not gonna, like,
have a bunch of gold physically in your
house. Like, that's that's a security risk in
its own, right, for different reasons.
But we also do kind of have these
programmability
wrappers for US dollars.
It's the Federal Reserve Bank. Right? It's the
ACH system, the automatic clearing house that's run
by the Fed. It's all of these other
types of systems we've built on top of
it that are are just as critical for
money to flow and operate.
But the difference is is that they're separate
onto a different layer. And so one of
the key points of blockchain is it's actually
the most perfect system of accounting humans have
ever
can verify
that the ledger is indeed correct, and they
can see in real time if anyone has
tried to modify it.
Right? So, like, if Bank of America goes
down you guys I'm I'm guessing maybe you've
seen the show mister robot? Yeah. Mhmm. Yeah.
So that's, like, a perfect example. Right? They
they delete a bunch of bank system records,
and suddenly,
all the records of everyone's
both debt and
wealth has been deleted because the only place
they existed was on the bank's ledger.
The thing about Bitcoin
and crypto
is I can like, you can independently verify
how much money I have in my account,
and I can verify how much money I
have in my account. And so because of
that, we're not none of us is ever
trusting some intermediary like Bank of America
to say, like, here's how much money is
in Austin's account. It's just verifiable by anyone
out there. And there there's downsides of that
too. But one of the main upsides is
it it reduces the
hierarchical
relationship we have to money.
Interesting. So I remember there used to be
there was a Michael Crichton or a
Tom Clancy novel or something
where the entire stock market computer system was
taken over by an attacker,
and they caused the market to crash. And
the solution was just to roll back to
midnight the night before
because it's all computers.
Right? So I can scroll back to any
point I want to in the past. What
was the last fair trade we know about?
Was it midnight? Let's pick something arbitrary. Let's
go do it. So that was that was
the solution they eventually offered to the problem.
Now, when you talk about programmatic money, the
other thing I think about are like,
in the high speed trading market,
one of the ways that people make their
high speed trades faster is they actually program
their trades into the forwarding engine on the
hardware.
Yes. They do. So in this case, you
could program the trade
into the smart money contract, perhaps,
and say,
oh, when the price gets to x, sell.
So this actually already happens on chain.
Not only do you have on chain limit
orders and these sorts of things like you
have in the traditional space, but, you know,
some of the first versions of on chain
trading markets were what's called automatic market maker
systems. And they basically run on,
a mathematical function that tries to balance both
sides of the asset pool pretty much in
real time.
And so what these do is they they
they take much less compute than, like, a
central limit order book. They take a lot
less updating than central limit order book. There's
no cancels. Like, a lot of the complexities
of running a modern order book are don't
exist for an AMM. There's downsides of that
too. And now crypto is largely moving over
to central limit order books.
But it's exactly this. Right? You actually even
on some protocols today, you can have pre
hooks and mid hooks and post hooks. And
so you can sort of program, here's the
trade I wanna do. If the market responds
in this way,
go do this secondary trade coming off of
it.
And so it really is, like,
it's really powerful in terms of what you
can actually program into a system if you
are a professional trader.
And one of the cool things about blockchain
is this is kind of all on a
level playing field. Right? If if I wanna
go trade on the New York Stock Exchange
and I wanna actually be competitive,
it's millions of dollars a year just to
get in the door.
Right? I I need to have a server
collocated
at NYSE in Secaucus with the same length
cables everyone else has and access to the
fast data feeds, which are all done through
multicast. And, you know, there's a whole big
process, and it's expensive for a reason. Right?
All that infrastructure is not free.
But all of that is a system that
creates, you know, sys
in the top tier paying. But for everyone
else downstream,
there's no way, like, you can be competitive.
Whereas on on crypto,
if you just are the world's smartest quant,
you can go on chain and you can
trade. And, you know, you do have to
get, like, a dedicated RPC server and stuff.
But for orders of magnitude lower access,
you actually can start trading and compete with
anyone else trading on chain on a much
more level playing field.
Interesting. Okay. So let's return back to our
original topic because we've gone down a pretty
good rabbit hole here,
which is how does all this relate to
energy consumption? I think we've already kind of
answered this,
but scaling properties. Right? So for my audience,
of course, it's network engineering and, like, what
does this do for network? Seems like to
me,
there would be more traffic on the network
because of this rather than less.
Yeah. This is, you know, it it's funny
because, like, you talk to network engineers and
we actually we've we, you know, double zero
is at its core a OSI layer one,
two, and three networking protocol for distributed systems.
And so we have many network engineers who
work for us who were not in crypto
at all until they they sort of got
into this. And, you know, there's a little
bit of, like, wait. This is seriously how
it works that, like, a lot of network
engineers get because
one of the properties of these systems is
they are
decentralized
and distributed.
And so what does that mean? Let's take
Solana, for example. Solana is one of the
fastest blocks
spent the last four years of my career
before leaving the cofound double zero.
But Solana, the blocks are
about four hundred milliseconds.
And when a block is produced,
it then has to be broadcasted out as
quickly as possible
to the other 2,000 validators
all over the world
to be voted on. Because just because I
built a block doesn't mean that all the
transactions I put in are valid. Everyone else
has to verify that the work I did
is correct, and then they have to send
back basically a vote that says, I sign
it with my private key.
I agree that this is a valid block.
And that's kind of how block production happens,
where we have to get you know, it's
not a ton of data, but we have
to get it around to 2,000 nodes in
the world as quickly as possible so they
can vote on it. And one of the
interesting properties of Solana is it has no
pauses between blocks.
So it's not like four hundred milliseconds. We
wait for everyone to agree.
Another four hundred millisecond block happens. It's producing
blocks basically in a stream. And that leader
the the the person producing the block
rotates every one point two seconds.
So it might be being built in New
York, and then it goes to, you know,
Chicago, and then it's over in Singapore, and
then it's back in New York, and then
it's over in Frankfurt.
And so you kind of have this crazy
problem where there's a ton of data streaming
out in real time. It has to get
to everywhere else, basically, in the world where
people are running these nodes.
And then
the leader's moving. So you then have to
get data blasted out from there to everywhere
in the world, and then the leader moves
again. And so you have this, like, crazy
system.
At the same time, people are trying to
send transactions.
And the people who are trying to send
transactions
are trying to rush their data to that
leader
for possible inclusion in the block, but the
leader moves around. Right? So sometimes it's like,
oh, I'm just gonna send my transaction now,
but I know the leader is gonna rotate
in three hundred milliseconds, and it's gonna probably
take me two hundred and fifty milliseconds to
get to the current leader anyway. So I'm
just gonna wait and send it to the
next leader.
And so it's a kind of a crazy
world of and this is all done on
the public Internet. Right? So we're doing these
things, like, call basically building giant Merkle trees
for state distribution. This is called Turbine. That's
the the software package that does this on
Solana.
And, you know, it's sort of crazy if
you if you think about it because any
network engineer would be like, this sounds like
a great application for multicast.
That's what I was just thinking. A 100%.
But you
do it because you can't run multicast across
the public Internet.
Yeah.
But you could run any cast. And I
would think this is also that any cast
is another possible solution. I always send my
block to this IP address.
Although, you know and then that IP address
can change, or there are DNS solutions for
this that are the location of the of
that IP address can change.
Of course, that only works as a suite
of routing.
Yes. But the problem is all those solutions
require trusting an external third party dependency. Right?
So DNS is not, like,
strictly speaking, secure or decentralized. Right? It it
is it is it is still a centralized
operation. And there there have been many cases
before where a government tells a DNS provider,
hey. Block these records. And they do.
Right? And so with crypto, because it kind
of has these libertarian origins and these sort
of, like, verify everything, trust nothing kind of
ethos to it,
those aren't really acceptable
solutions for it.
So the so on Solana and most other
networks, they they basically have a protocol that
has some sort of gossip,
which is where every every validator is basically
posting updates to say, like, hey. I'm I'm
moving IP addresses or, you know, still online.
You know, those sorts of things. And so,
it's much more similar from a networking standpoint
to something like BitTorrent,
except we're trying to run BitTorrent at four
hundred millisecond blocks at 10,000 transactions per second.
Very interesting. So
it sounds to me like this would be
better able to run over
a
stick over a network. That's not stochastic. That
is
more time division multiplexing, like RDMA
or something like that. But you're running it
over the global Internet, which, of course, is
stochastic. Like, you can't you you have no
guarantees in the global Internet.
Yeah. It's actually it's it's very funny because
Anatoly was one of the cofounders of of
Solana. He worked at Qualcomm for something like
a decade before
founding Solana. And his original vision for the
thing was, like, how do we bring CDMA,
basically to blockchain? And this is this is
sort of the idea of proof of history,
which is like a
a a system that
has, like, time stamping on data as it
moves through the system.
And it's kind of it's this very interesting
idea where there's a lot of stuff that,
like, from, like, the early Internet and early
compute days that actually is really applicable to
blockchain.
And, you know, it's it's funny because you
mentioned, like, oh, wouldn't this be faster if
this would run over some other type of
system? Well,
this is sort of what we've been working
on at double zero for the last year
or so. Right? And it's the idea of,
like, could we build
a high performance private
WAN that is run by multiple parties
and has verified
characteristics of networking built into it? Could we
basically build
a high frequency trading firm grade fiber network,
but have it be run by 10 or
15 or 20 independent parties
resistance, and it has these type of guarantees
that you'd expect from the public Internet.
Yeah. Interesting. Which which the answer to that,
by the way, would be yes. But it's
gonna you have to be really clever to
do it. There's a there's there are ways
of
now another thing that I'm always curious about.
So when we go back to resourcing and
we think about what how we're trying to
solve some of the resourcing problems, so the
first thing is we're doing proof of stake
rather than proof of of work.
Now this increases the amount of network traffic,
but it decreases
the water and power and all those physical
resources, server resources.
So that's basically the target
in some way is to reduce those things.
Like, there's this story about some company going
to a small town and building a data
center. And now all their bathtubs look horrible
because all the water is now hard and,
like, they can't get good water anymore because
the data center just consumes
so much water that they're always at the
dregs of all their tanks. Like, it's all
the rusted water that's been sitting out there
for years and years and years that they're
using. So that's that's an interesting,
perspective of this, but, again, with higher networking
requirements. Right? Is that kind of the trade
off
that we're getting into?
Yeah. You know, the
for for a while, there was a very
legitimate critique
of crypto that it was using a ton
of power to, you know,
just generate financial value. It wasn't doing anything
else.
And at this point, you know, the the
carbon footprint and the energy load of modern
blockchain systems
is at par or less than your typical
web two system out there, which is not
to say it's nothing. Right? Obviously, we we
you know, Spotify and
Zoom and stuff still
require a ton of electricity and a ton
of water to use just simply because,
no, you know, electricity
is
largely still not nuclear today or renewables.
But the one of the nice things about
this is it brings, like, the crypto energy
problem into the same bucket of problems as
any other computer system. It's it's not sort
of out there on its own anymore except
in the case of Bitcoin.
And so the nice thing is is that
you see the same characteristics
that you see everywhere else, which is that
people like their money, and they wanna send
less of it on bills, like server bills.
And so you see people voluntarily
moving to areas where data centers have lower
cost of power
or, you know, for any other number of
reasons, the the cost to actually run the
data center is less. And so, you know,
at some point, this is a problem that
sort of capitalism does a pretty okay job
at solving
marginal cost. And so,
you know, the most expensive single quantity
of cost in a data center is the
power and cooling bill.
Right? It's it's the water bill and it's
the electric bill. And so
everyone is working to reduce those things,
not just because they care about the planet,
but because they care about their bottom line.
Interesting. Yeah. Yeah.
Okay. So I guess another question couple of
courses I have are more on the crypto
side, perhaps, which are things like Sure.
How do you prevent Byzantine attacks
against this kind of a system? Because that
would seem to me to be a major
problem,
unless it's just that it's a shared pool.
It's like No. No. Exactly. So so
Byzantine fault tolerance is one of, like, the
core characteristics
of of block And so there's a ton
of work on what's basically called consensus mechanism
design.
How does the network
establish enough confidence to agree that it's it's
gotten to the point where it can move
on to doing the next thing? And so
there's many different algorithms, and there's many different
protocols out there for how consensus actually works.
And they're optimized
for different types of things. So some of
them, they're optimized for assuming,
like, if most people are good actors, how
fast can we run the system? Right? That
that's sort of an optimistic system that says,
we still do all these checks and balances
and these sorts of things. But if we
assume that at any given point, very few
people are intentionally misbehaving, we can just run
the system a lot quicker. There's also systems
that say, you know, above all else, we
wanna make sure is that we have a
100% certainty
before we move on to anything else. And
those systems usually run more slowly.
So Solana, for example, is a good is
a good example of this. Right now, there's
something called confirmation versus finality.
And finality is, like, full Byzantine fault tolerance.
This will never like, there is a 0%
chance this thing can ever get rewound
unless, of course, everyone agrees to undo it,
which is, like, you know,
a problem you can't solve with code.
But the confirmation times are, you know, four
hundred milliseconds or less.
But it takes a while to get basically
all enough votes in that the thing is
considered fully settled. So Solana right now is
going through an
consensus
mall,
on something called AlpenGlow.
And AlpinGlow is gonna bring that time to
finality down from twelve seconds to anywhere between
one and a half seconds and a hundred
and fifty milliseconds.
So this is kind of like as we
look at the the problems of scaling blockchain
for
pretty much the first ten years of blockchain,
it was all software problems. It was that
the software code wasn't good enough. People hadn't
come up with smart enough consensus algorithms.
It wasn't that it was limited by the
power of the hardware because there's a lot
of money crypto now. Right? You you can
buy just as powerful servers to run stuff
as you can in any industry.
It was the software was not, like,
fast enough and built in a way that
it could be performance enough. And now that
it's no longer a software problem, like, that's
that's where we come in at double zero.
Awesome. Cool.
Alright. Well, I can't think of much else
to cover on this topic, so I'll
let you is there anything in Austin that
you'd like to talk about before we wrap
up?
I would say that there's, like for anyone
who's interested in this space,
there's kind of greenfield opportunity here.
You know, networking has not historically been a
particularly big part of blockchain. It has sort
of always operated in this kind of, like,
magical magical thinking land
of, like, oh, there's infinite bandwidth. Latency doesn't
matter. Like, there's infinite compute because it's a
bunch of software people building stuff. It's not
hardware people or networking people building stuff.
But
things are really, like, starting to change, I
would say. Like, you know, what I would
you know, of our engineering team, 90% of
them are network engineers.
Like, only, you know, a small percentage of
them actually, like, come from crypto originally.
And we're seeing this across more and more
protocols,
is that the the folks who are
able to make some of the most impacts
now, they're not cryptographers. They're not people who
are writing smart contracts or or programming languages.
They're actually on the networking stack And people
who can think smartly about data flow and
how it moves through both the hardware and
software system,
those are the folks that nowadays are making
some of the largest contributions
to to crypto.
Cool. So, Tom, any other questions? Any other
thoughts before we wrap up?
No. No. It's been great.
So, Tom, where can people get in touch
with you if they want to?
They can find me on LinkedIn. He actually
said a whole sentence and not just a
single word. Yeah. I'm I'm amazed.
So, Austin, I assume you blog or you
have regular stuff that you do?
Working people We do. Yeah.
Double 0 dot xyz.
You can see all of our our our
blogs and write ups and kind of read
our our white paper there and follow along.
There's a link to our GitHub as well,
and we're pretty active on Twitter as well.
Cool. Alright. I'm Russ White. You can always
find me here at the hedge at rule
eleven dot tech.
X slash Twitter, whatever. I'm really easy to
find. Just look for me. I'm around some
place or another.
So
we know that we live in an attention
driven economy
and that your time and your attention are
valuable resources, and we're happy you spent this
time with us talking about blockchain and blockchain
scaling and the new ways that we're looking
at blockchain.
Thank you for listening all the way to
the bitter end, and we will
catch
you next