AIMEE_KNIGHT: Hey hey from Nashville. Very rainy in Nashville with Hurricane Ida coming through.
STEVE_EDWARDS: Oh yeah, you guys are getting a little rainy. Well, if you want to send that over here to the West Coast because we really, really need it.
STEVE_EDWARDS: And also AJ O'Neill.
AJ_O’NEAL: Yo, yo, yo, coming at you live from the top of the stack of mattresses from the Princess on the P.
STEVE_EDWARDS: And the P. Yeah. Can you feel the P under there or do you got to go look for it?
AJ_O’NEAL: I had a terrible sleep last night.
STEVE_EDWARDS: Did you? I know how that goes. I've actually slept well for the first time in a while. Happens when it gets cooler.
AJ_O’NEAL: Oh, yeah.
STEVE_EDWARDS: Yes. And today as our guest, a very special guest, we have Max Kordek. Hi, Max.
MAX_KORDEK: Hello, everyone. I'm tuning in from Berlin. It's also rainy, it's gray, it's getting colder, so I'm already missing the sun. Pleasure to be here, looking forward to our podcast.
I remember working my tail off to become a senior developer. I read every book I could get my hands on. I went to any conference I could and watched the videos about the things that I thought I needed to learn. And eventually I got that senior developer job. And then I realized that the rest of my career looked just like where I was now. I mean, where was the rush I got from learning? What was I supposed to do to keep growing? And then I found it. I got the chance to mentor some developers. I started a podcast and helped many more developers. I did screencasts and helped even more developers. I kind of became a dev hero. And now I want to help you become one too. And if you're looking forward to something more than doing the same thing at a different job three years from now, then join the Dev Heroes Accelerator. I'll walk you through the process of building and growing a following and finding people that you can uniquely help next stage of your career. You can learn more at devheroesaccelerator.com.
STEVE_EDWARDS: So today we are here to talk about Max's startup Lisk, L-I-S-K, and the blockchain. So for those of you who know anything about blockchain more than me, if you know anything, so we're going to dig into what blockchain is and how it's useful and what Lisk is doing to make it easier for people to use. So for starters, Max, why don't you give us a little background on yourself? How you got into programming, why you're famous, what you're working on, and we'll go into blockchain and Lisk from there.
STEVE_EDWARDS: Okay. So when I think blockchain, and I'm going to guess this is true for a lot of people, the first thing I think of is cryptocurrency, Bitcoin, that kind of stuff. So let's start with the basics. What is blockchain and what's its purpose with cryptocurrency? And obviously you're wanting to expand it into other purposes.
MAX_KORDEK: Yes. So...Whenever I say someone I'm working in blockchain, they don't know what it is. And that's a very common reaction. And then I say Bitcoin and they're all like, oh, yeah, that I heard of. And that's mainly because Bitcoin was basically the first application of blockchain technology. Blockchain itself is basically a decentralized database which stores transactions and transactions don't have to be monetary transactions. There could be any sort of data happening on that decentralized network. And this technology is all about removing the middleman. So when Satoshi Nakamoto, a pseudonym, developed Bitcoin in 2009, he wanted to remove the middleman behind the currency. So the central banks, the SEC, governments, and so on. And that's why Bitcoin is the most famous example today of, well, an application utilizing blockchain technology. And with Bitcoin, for example, the whole meaning behind it is that you can send a cryptocurrency, as mentioned, from A to B without any man in the middle being able to intercept or block it or stopping it. That means it's based on a decentralized network where everyone can participate in. And you have these cryptocurrencies or these coins on the network, which are being created every 10 minutes in the form of mining. What is probably already pretty known term by now. And by doing that, well, this coin or this cryptocurrency is being distributed to participants. And then there's an open market on exchanges where people buy and sell those coins. And due to this, the price is being calculated into US dollar or euro and so on. And that's why it's actually a real currency because it has a real monetary value. And that's what's being used for today. Got really famous back in the day because you were able to buy drugs with it on Silk Road. It was actually like the first use case for Bitcoin. But by now, you can use it on many different websites. However, like I said, that was only the first use case, a currency. And in the course of the years, new platforms and new blockchains actually were established, which said, OK, this technology can do so much more than just sending transactions from A to B to send money all over the world within minutes without anyone blocking it. We could expand it to many, many other use cases. And that's where, for example, Ethereum came into play, which is a smart contract platform. So now it's getting a bit more complicated already. But a smart contract is essentially just a small script. You can now upload to this blockchain and everyone on the blockchain can execute it. So instead of being able now to send only money from A to B, you're also able to execute a small script running decentralized on the network. And this small script could now essentially execute everything what was programmed in it. Like you could run a decentralized exchange, which allows you now on this one blockchain to exchange different tokens with each others. You could implement games or like casino games, gambling and so on. But also something where instead of a coin, you have a unique object. This is another buzzword lately, an NFT, which represents, let's say a digital art item or a digital collectible, which you can now also trade and exchange and send around.
AJ_O’NEAL: So you didn't, you didn't define NFT there. That's a new term that hardly anybody knows.
STEVE_EDWARDS: Okay, so I'm always big on going back to the basics. So let's go really basic and talk about the term blockchain. It's obviously sort of a concatenation of two words. Why is it called a blockchain and how does it work? I mean, getting as low level as you want to get, how does it work for keeping everything straight, for making non-fungible tokens for Bitcoin?
AJ_O’NEAL: Can I actually interject here to go a little bit earlier than that?
STEVE_EDWARDS: Okay, go for it.
AJ_O’NEAL: So the technology is called public-private key pair. That's the technology.
STEVE_EDWARDS: Like SSH?
AJ_O’NEAL: Yes, exactly.
AJ_O’NEAL: The technology is public-private key pair. And the early implementation of this was PGP key rings. So there is a PGP server that is mirrored. I think the most common one is the MIT key ring server. And the original idea was kind of like a driver's license, but that's peer verified. So there were signing parties back in the 90s and the 2000s where you'd go to a meetup, a Linux meetup, or maybe a programming meetup and you would sign each other's keys once a year or something. And then you would publish the signature of those keys. So basically you're saying, I know who you are. And you might sign it with some other information. Like I actually looked at this person's driver's license, or you might just sign it from the effect of, I know who this person is in real life. And you'd publish that to the key ring server and that information would store and it would expire after say 10 years or so you could put an expiration on it. And then a very similar technology developed using hashes called a Merkle tree. And that is what Git is based out of. And the way that Git works is a tree where you hash something and each next hash builds on the prior hash. So there's a tree because the hashes can go in different directions. You can take a file A and file B and you can add file A to the previous group. Say your master branch and you can add file B to a different group, say your feature branch, and then you get a hash of the new master and you get a hash of the new feature branch and they start to develop a chain, but that chain can branch out in any direction so there's no limit on the speed or the efficiency of that. If you want to make it purposefully slow, which is necessary for the game theory because Blockchain is built on top of a game kind of like Conway's Game of Life, or at least Bitcoin is. So the idea was how do we take these two technologies, the key signing technology and the chain signature technology and then bring them together, but restrict it so that instead of being fast and efficient and letting anybody participate at any level, you restrict it to you have to have a very powerful set of computers working against each other. And this, I won't go into the full nature of the game, but it's essentially a game computers play against each other in Bitcoin. And the reason they say that it's quote unquote secure is that it's developed around just this particular game application where no matter how many computers join the network, as long as computers join the network in a linear fashion, then the number of computers that are playing by the rules of the game will always outweigh the number of computers that are trying to manipulate the rules of the game. Now that only works for a certain amount of time. And we've seen in Bitcoin, they have the price manipulation, you've seen the theft and all that other stuff. So it works in the game theory aspect and then it breaks down when it gets to the real world. But that's, that's the kind of the three technologies. It was key signing and then it was hash trees. And then it was signed hashes in a linear chain where you decrease the efficiency by forcing one thing to go after the other so that you limit the number of interactions and increase competition among computers that are trying to add to the chain.
MAX_KORDEK: Yes, and the third part is called proof of work.
AJ_O’NEAL: Yeah, that's for a proof of work chain. There's also proof of stake, which is more oligarchy. And then proof of storage which I don't think that that one has taken hold very well because of the disc thrashing that it causes. I know there's a couple of companies that have tried to create products around that. Is IPFS still on that type of model?
MAX_KORDEK: So they're not really into like proof of storage. They're rather about, well, a decentralized file storage system. They've launched their own coin, Filecoin. I think it's still based on Ethereum, not sure, but the whole model is rather about storing files in a decentralized way instead of what you were more referring to like Burst, which tried to just proof of storage consensus algorithm, where essentially the number or the amount of storage you provide to the to the network defines how many blocks you can create and with that how many rewards you can get from the network back. Because for every block you're creating, you're getting a block reward. And for example, in Bitcoin, it's the more hash power you provide to the network, the more on average you can earn back. And in this case with Burst, it would be the more storage you provide, the more you earn back. But that was not really successful, I would say. And all these projects are rather dead right now.
AJ_O’NEAL: Okay. So you want to take it from that point to the other applications of blockchain or
MAX_KORDEK: Yes. Yeah.
AJ_O’NEAL: So the blockchain technology, once it arrived at that point.
MAX_KORDEK: Yeah. So thanks for this very detailed and concrete explanation of the different technologies at play. It's really just a combination of many like cryptographic game theoretical aspects and various technologies developed in the last 50, 60 years. And while essentially this private public key infrastructure we're talking about are so-called, let's call it an address system in Bitcoin, which enables everyone to sign their own transactions, put them into a block, and then through this proof of work mechanism, people can combine all the transactions currently circulating on the network and put them into a block. And then through this Merkle trees, you were referring to each block assigned with the help of the previous block. So a chain is being built. And this is, well, the first implementation of that is Bitcoin with, well, done or developed by Satoshi Nakamoto back in the day. But it actually was also heavily influenced by different cryptocurrencies or e-money or digital currencies or however you want to call them, developed before. Process or progress over the many years and this all led to then for example, Ethereum which expanded the whole horizon from just being a currency towards building decentralized applications with this technology. Yes
AJ_O’NEAL: One other thing I forgot to mention from the 90s was hashcash Which is kind of where the three things come together to make Bitcoin at least.
MAX_KORDEK: Yes exactly But I think in this case instead of like putting the work on an entire block. It was put on a single transaction but it's actually referred to in the Bitcoin white paper. So yeah, definitely a monumental piece to make Bitcoin happen. And as far as I know, the author, correct me if I'm wrong, was Adam Beck, who is still in Bitcoin now. He's like one of these OGs, CEO of Blockstream as far as I know. So he's still like participating and actually contributing a lot to the space. I think he was one of the first ones putting a Bitcoin full node into a satellite so that you could actually send your transaction with a satellite up into space. And there it was being forwarded into the Bitcoin network. So that was pretty interesting.
STEVE_EDWARDS: So we've mentioned that the blockchain is a decentralized sort of ledger, for lack of a better term, I guess, of different transactions. So that means is, to me, when I think of decentralized stuff, I think of like, you know, BitTorrent stuff, LimeWire, the ways we used to get music and movies illegally back in the 90s. In other words, in a decentralized network, just for purpose of explanation, everybody has the... they get all the pieces on their own local machine and that is all piece. So everybody basically has the same chain of transactions. Is that correct?
MAX_KORDEK: Exactly. So let's stay with Bitcoin, it was a much easier example. In the case of Bitcoin, everyone can set up a full node which is essentially a server running the Bitcoin client and has the complete replication of the blockchain, the decentralized database. And because everyone can participate in that, like I think several 10,000 or full nodes exist like this. And this means like one node or one server on the network cannot manipulate the blockchain state because it's being replicated on many, many other computers as well, so they would detect that and would block that one malicious server out of the network, making it manipulation free.
AJ_O’NEAL: Basically, it's the number of the amount of CPU cycles of computers that play by the rules of the game against the number of computers that do not play by the rules of the game. And as the network grows, at least in Bitcoin, it becomes less and less and less efficient because you have more influence, especially with it becoming kind of like a stock market unto itself. You have more interested parties, therefore you have more computing power, therefore you have more maligned interest, therefore it requires more processing power to protect against maligned interest.
MAX_KORDEK: So if we're looking back on the lecture, then the work was already done, and that's where just the replication on many different nodes is enough, because they have a copy of the state and could always verify that. If we're talking about going to the future, that means creating new blocks and including new transactions. Yes, that's where the work matters. And that's where actually, by now, big corporations, big companies and big players, well, established empires of mining facilities where a huge amount of energy is being wasted just to provide that work in order to generate a Bitcoin block and getting that block reward out of that. So I think right now we are at 6.25 Bitcoin per block, if I'm not mistaken, or 6.125 Bitcoin per block. And that's obviously at today's market price, quite a bit of money. So there was a huge arms race towards building up these mining facilities in order to create or be able to create more blocks in order to get that reward. A huge financial incentive for this operators of those. And nowadays, that's why Bitcoin is being seen as very inefficient because it requires so much electricity to just perform. And that's where these other consensus algorithms like proof of stake, delegated proof of stake, and so on came into play, because they promised that you don't need to put up so much processing capabilities and waste so much electricity just to secure a decentralized ledger. You could call them oligarchies or other terms, but I think they brought in significant innovation because they really removed the need for that much electricity while still keeping the chain secure. In these cases, instead of providing processing power to the network in order to create this block faster than anyone else and pushing it to the network, that's how it's decided to, well, can create the next block, the one who's first, and that's on average the one with the most processing capabilities. And proof of stake, it's depending on how much stake you have in the network. That means how many coins do you have in your account, let's say. And this determines how high your probability is to create the next block. And of course, those with a higher stake have a high incentive to keep also the network secure. And that's why it all makes sense, because then these also have a higher probability of creating the next blocks. And they of course want that everything is running properly and secure. And that's like an innovation. Ethereum, for example, is still based on proof of work. They're working relentlessly towards Ethereum 2.0, which implements proof of stake. My own currency is based on delegated proof of stake, where you have an alteration of the system, where you have a fixed amount of validators. We call them delegates who are just able to provide that stake and no one else's. Makes it a bit more efficient and allows the network to process more transactions. There's a lot of innovation going on to remove this hungriness for electricity in Bitcoin. If we are looking exclusively to Bitcoin, it will never change. Proof of work will stay forever with it. I think it will just grow and grow and grow forever until the whole system isn't interesting anymore for the world.
AJ_O’NEAL: It kind of becomes a singularity because it becomes the opposite of what it started as because as the requirement for power grows. For example, you as an individual, you cannot participate in Bitcoin. It is not feasible. It is not realistic for you to participate in Bitcoin. You cannot amass enough resources for you to do anything meaningful in the network. So as far as you being a peer and it being peer to peer or decentralized, from the perspective of an individual, it no longer is because as it collects further and further and further, it becomes a black hole where the density the gravity of the power that's necessary becomes so great that only the most megalithic, I don't know if that's the right word, players can join in and everybody else has to drop out because all they can do is lose money. And so as it continues to grow, it'll reach a point where there's what, yeah, it'll become worthless because the only people that can play will be the people that already made all the money.
MAX_KORDEK: Yeah, yeah, definitely. But I think the race never ends. And someone will always make money. So I, I'm more of a positive person. I think you can always join somehow, but you by now, of course, need huge resources to be able to compete with the others. But I guess a clever businessman always finds a place with cheaper electricity and enough venture capital to do that. However, I think it's just the wrong way to do blockchain tech, you know?
AJ_O’NEAL: Well, it's not, if you want to be a businessman about it, I've got, I've got a link I'm going to put in the, the picks for this, but blockchain backer is who you should check into if you want to be a businessman about it. If you want to talk about the tech, that's a completely different story. If you want to bet on people's emotions and how they'll react and how bots are programmed to buy and sell, if you want to know those secrets, you can guaranteed make money off of all this stuff because there are models that hold the same as they did in in the gold rushes. They hold the the models hold the same for Bitcoin. So if you want to make money, It's easy to make money off of it if you're willing to put in the effort and the diligence to study the models and track them and compare the forecasts and move your money dispassionately at the times that the models match. You can guarantee success. You can guarantee that you can make money off of it if you have the patience for it and you can be dispassionate about it.
AJ_O’NEAL: So this has probably already come across, but I am a very much a blockchain skeptic because I've never seen a use case for it that made any sense. Every single white paper I've read. And the reason I have a background on this and a particular fervor is I had a company, my business partner would not let go of all these blockchain ideas and ended up squandering a bunch of money going down paths that were not what our backers and investors were expecting. And ultimately the company crumbled and I lost everything that I had saved up in my life at that point, cause I'd made some very stupid choices about how I had allocated my money and my power and position in the company and whatnot. So, so that's my disclosure on why I've got a very bad and bitter taste in my mouth about this but I've read a lot of white papers and I've done a lot of things and I kind of, I kind of tend to want to give people the wake up call and protect them from the dangers of where this stuff can go and what it leads to from my experience from my perspective. I wanna put that out there so that everybody knows my bias and can take my opinions and what I say in accordance with that. But I've like very very strong opinions on this, researched this, met with top people in the community, at least locally, as well as some internationally in terms of discussing what the use cases are and stuff. And what I've, what I've come to and what I would, I can be open to that there is a use case, but I agree with the, there's a quote, which I'm not going to find real quick, but it's essentially, there is no use case for a blockchain for which an existing technology is not both more efficient, more effective and more safe. Or I guess that's three things, but. So what is it that you're doing that allows people to do something that's more efficient, more effective or more safe? Or are you just on the business side where it's like, it doesn't matter what the technology is, it matters what people believe. And if we can get into a niche where we give people access to something that they want, regardless of whether or not it's better or worse, it's something that they want, therefore it's a market opportunity. Like what, where does your take on it and where, where do you think that this thing finds a real world practical application?
AJ_O’NEAL: And are you talking about the use case there? Are you talking about the use case of there's a lot of regulation. If I want to send money to somebody in Russia, where PayPal does not allow someone to extort, or maybe they do now, but they didn't 10 years ago. There's lots of platforms, they do not allow you to send money from one country to another. It is legally not permissible due to trade embargoes or whatever, who knows why but it's legally not permissible for a person in country A to exchange money with person in country B. And if you use a blockchain for a period of 10 minutes and that's it, you just put money in, get money out and you never touch it again, you have a very low risk and you're able to solve that problem in a more safe way than say for example, Western Union where anybody can walk up with a six digit code, take the money and run away. Is that-
MAX_KORDEK: Yeah, theoretically-
AJ_O’NEAL: Or is there something else?
MAX_KORDEK: Yeah, theoretically of course you can do that. But I think the real innovation comes rather from when you stay within these new industries which are being developed. So I think every link back to the old finance system, there might be some advantages for people all over the world to send some Bitcoin to their friends or acquaintances or so. But I think the real innovation will happen rather when you stay within that new finance system blockchain brings. So you could now, of course, say, okay, why should I be able to exchange different tokens of coins, all based on blockchain technology, with each other? Why should I be able to lend a stable coin, which is a cryptocurrency, which always stays stable at, say, $1 or so, in order to purchase more of other coins? Why should I all do that?
AJ_O’NEAL: Hold on, hold on. You're mixing apples and tyrannosaurs. Because there's…There's a difference between a digital currency. For example, PayPal and Venmo are digital currencies that link to fiat currencies. But in essence, it is a digital currency. Apple Pay, in essence, is a digital currency, right? These are platforms that are specific. You have to have technical integration. You cannot use them anywhere. You can only use them where there's a technical integration. It is a digital currency. They have key pair signing measures in place, etc. And then there's a difference between that and then a blockchain. Cause a lot of times what I hear people do, which sounds like what you, you just didn't correct me if I'm wrong, cause I could totally be wrong about this, but you just took a couple of different types of digital currency and then mixed in the blockchain as if the blockchain is helping with this. But in reality, that's those, those digital currencies are not the same as a cryptocurrency in the sense of they don't follow the rules of decentralization and blah, blah, blah. You're breaking one of the, because the preaching is it's decentralized, it's stable, it's an investment. I mean, like basically these things that are all contradictory to one another. And then people cherry pick and they say, oh, well, your argument is X. Well, I'm gonna go pick this stable coin, which defeats argument X. But then a stable coin isn't decentralized, it's probably not on the blockchain or a blockchain or whatever, right? And then, And then you talk about another coin that solves another problem, but you're, you're taking different technologies that are unrelated and then throwing them together around one common edge, I guess. And when I say you, I don't mean you specifically, I'm not. But so, so clarify that for me, because I may be completely misrepresenting you, but I just want to make sure that, that we're talking about the same category of things and not the belief that we have a magic pill.
MAX_KORDEK: No, yeah, you're understanding me wrong here. So I was referring to the old finance system of euros, US dollars, which, well, in some systems are digital currencies in the form of Apple pay, whatever you're referring to there. I was not referring to that at all. I was referring to cryptocurrencies, to tokens, to stable coins, which are built on blockchains, which are running on decentralized networks.
AJ_O’NEAL: How can a stable coin be decentralized and on a blockchain and retain concurrent value with a fiat currency?
MAX_KORDEK: Because the coin itself, of course, it can be from a technological aspect, be on the blockchain, be running on a decentralized network and all of that. But maybe a company behind that holds all the assets equivalent in fiat or in stocks or in gold or whatever. But the coin itself is decentralized. But it's...
AJ_O’NEAL: I'll let that one go, but that'll be up to the listeners to decide how to interpret it.
MAX_KORDEK: From a technological aspect, not from a governance standpoint.
AJ_O’NEAL: Okay, all right. Okay, I'm with you, I'm with you. And I do apologize for being so disagreeable, especially since you're our guest on the show. Just like I said, I've got some trauma here. So I wanna make sure that we're clear, and that we, call me out on any BS that I lay out if I misrepresent something, there's no, I take no offense to it.
MAX_KORDEK: All good. Don't worry about that. You lost money. And I hate that people lost money in this whole industry because actually I think it can bring some good things. It's not all about money. And we as a company, we never talk about our token, about our valuation, whatever. We really want to push this technology forward. We're not about speculators. We're not even allowed to talk about all of that on our social media channels as the regulators in Switzerland would slam our fingers. I understand your negativity towards it all, but I really hope that maybe not today, but maybe in a few years, once more industries emerge out of this, you see some advantages. What I was referring to was, I think all these use cases which are linking blockchain to the old world, to some old use cases, old industries, they're not so valid anymore. I don't see that and we're not focusing on them at all. Everywhere where entirely new industries are being formed, like the DeFi industry I was just referring to, or the game industry where you have these NFTs we were talking about before, which represents, let's say, whatever everyone had back in the day, Pokemon cards, but now digitally. And you actually hold them in a digital format and no one else holds this one unique object on the blockchain. It's all very difficult to understand, but it is a new world. So,
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AJ_O’NEAL: With the NFT, I want to give one example that I think people will be able to relate to. And Steve and Amy, please feel free to jump in and ask questions and argue as well here. But so the if you remember the PopTart Kitty, that I think is is that to date the highest grossing NFT. Someone sold the digital rights. Basically, they use their private key to sign the GIF. So they delivered the GIF and they put the GIF as a file on a block chain and it is signed by the author, the original author of the gift. So anybody can copy the gift. There's no DRM on it. Anybody can get a copy of that NFT because it's public. It's on the blockchain, but it has been signed by one private key over to another person's public key, which means that from a spiritual sense or a moral sense, that person who owns the public key of the PopTart Kitty GIF is now the true owner of the Pop-Tart Kitty GIF. And the person who created it has made a public statement that they will not sign with their private key, any other images of the Pop-Tart Kitty GIF. And so anybody can still have it, but the, I don't know what to call it. The,
MAX_KORDEK: the ownership,
AJ_O’NEAL: but it's, it's not even ownership because ownership is more tangible, like I have this thing on my desk, it's here only I can have it. Anybody can have it, but it's been signed over to one particular person who can say, I have received it, but I mean, they, they own it in a spiritual sense, not in a spiritual is not even like a metaphorical sense, not in a actual sense. They, they, the copyright is not relinquished from, or not really is not taken from everyone else on the internet who's used it. The copyright hasn't changed. The legality has not changed other than that. The author has made a public oath. I will never sign this image with my private key again and submit it to this blockchain.
MAX_KORDEK: Yeah. So for me, it's very similar to just real art, you know, like, let's say you have a digital image, the owner, the creator signs it with his private key. And with that, maybe auction set off to someone else and sends it over to that person who won the auction. In the real world, the painter paints the picture, signs it, and sells it on auction and hands it over as well. And of course, that artist could just create an exact replication of that painting, maybe not exact, but like a pretty close replication of it. In fact, many painters and artists in China are just replicating from the old masters and sell them for cheap online. But the interesting fact now is, you, maybe even also me still, we think this is all BS because it's just digital. It's not real, it's not physical. But then 18 year old kids nowadays, they think it's real. It's a mentality shift. It's a paradigm shift.
AJ_O’NEAL: But do they think it's real? Because I don't...
MAX_KORDEK: Yes, of course, it is. I mean, it is real.
AJ_O’NEAL: I don't understand. So a real piece of art is physically real scientifically, you can look at it, you can, it's well, I mean, that's kind of a loaded because there's forged art that uses techniques to appear to be hundreds of years old and use similar to pass the spectrum analysis and all that. But, but there is a real tangible physical thing in the real world that is the original painting and you can get a print, but usually, you know that it's a print and someone doesn't forge the print online. We could still have forgery. But it doesn't matter because the cost of replication is zero, right? If I have a copy of the Nyan Cat GIF, my copy isn't a degraded copy. It's not someone looked at the original Nyan Cat and then recreated it and they got a couple of pixels wrong. It is a pixel per pixel exact replica of Nyan Cat, right? Whereas if I get a copy of the Mona Lisa, I am getting a copy that is probably in better shape than the original because it's probably been touched up a little bit and maybe it has some texture to it because maybe it's been printed on one of the machines that adds texture to it. But I know that it's not the real Mona Lisa and there is one real Mona Lisa.
MAX_KORDEK: Yeah, for me it's a paradigm shift. You know, people like young people nowadays, they don't differentiate between digital art and physical art. And of course now you're like bringing an example where I have to kind of agree with you, it's kind of stupid, you know, to pay so much for just some weird image. But now if we are replicating that, for example, to fashion, let's say Gucci or Prada creates digital fashion and sells them off to people, but they don't want to just have everyone owning it. They want to create unique pieces being signed off on a blockchain. I think that's opening up a whole new way of thinking about digital products.
AJ_O’NEAL: But if it's on a blockchain, anyone can get it. There's no limit to the access unless it's again, doesn't abide by the theory of a blockchain. If you say, well, it is a blockchain and it's decentralized, but all of the computers are owned by one company and no other computers have access to it. So it's completely private. Okay, then sure. They could put it on a blockchain in a company room that no one else has access to and it wouldn't function as a blockchain. It would just technically be a blockchain. Right. But if they put it on a blockchain, it's public. Anybody can get an exact replica of it. That is 100% the same as the original. So if, if they were to release 3d printing files for something that, you know, that was the 3d printing craze was kind of cool. It would have been neat if it had panned out and you know, we could have 3d printed clothes that would still be cool if that panned out. It's, it's an interesting idea. Right. But let's say Gucci comes out, you can 3d print a purse and you have to pay for something. And then I guess the only way it would work is if there was DRM on it, in which case the blockchain would not be what be what's providing the security or the asset management. It would actually be the DRM that it's encoded with. And you'd just be publicly putting something that's got DRM on it in the blockchain. And then you'd send someone an email with their serial key, and then they'd open it and they'd be able to 3d print it or something like that. But you can't, you can't limit the distribution of something on a blockchain because it is by definition a public chain that if it is employed in the metaphorical sense of a blockchain that anybody has access to and that anybody could contribute to or replicate.
MAX_KORDEK: Yeah, for me, it's just not about like 3D printing that cloth and showing it in the real world. You're showing it in the digital world to your friends. You can prove that you're the person who purchased it, that you hold the original because you can sign on the blockchain, you know. So it's like really a paradigm shift. Like hearing us talking about it just proves how far away from mass adoption we still are. And I think it takes the whole generation to accept that digital art is in no way different to physical art. It's just that you cannot touch it, but it's still there. It still exists. Like I said, it's a paradigm shift and some people will really take a long time to accept it and some people will never accept it. But the younger generation, they feel it. They know it inherently. And they just accept that fact, you know? So it just shows like technology is moving forward and we sometimes can't accept it, but other people can. And that's where the innovation is coming from, from people just accepting it.
AJ_O’NEAL: I mean, that's, I mean, again, we're getting off into the metaphorical or whatever, because this is not, I don't feel like this is about technology. This is just human vanity, right? Like since the dawn of time, since the era of Babylon and the Egyptians and onto the middle ages and so on and so forth, people have always been vain and always wanted to be able to say, look at the greatness that I have acquired. And I don't mean to actually put that in too negative of a light, because there's a lot of people that do great things and those great things that do boost their ego and they contribute a lot to society. And maybe why shouldn't they have a big ego for contributing a lot to society? And if someone is able to amass wealth by distributing value and they increase the betterment of other people's lives through the value they create and that's how they gain their wealth. You know, it's not through trickery or or some, you know, terrible means, but it's a morally good means. And if they decide that they want to purchase the Mona Lisa or they want to purchase the Nyan Cat to be able to say that they are the true owner of it, then why should they not be able to trade what other people gave them as value for what they find to be valuable to to bolster their chi? I don't know. I mean, I think vanity is the most generic word for this concept in human nature, but there's no technological advantage to owning a Nyan Cat image or whatever else it is. It doesn't matter whatever else it is. There's no technological advantage to being signed over to this. I could just as easily take something that's not digital at all. I could just as easily say, here's a digital contract that says I'm selling the rights to the Mona Lisa the Mona Lisa gets destroyed, but I'm still the person who ended up owning the rights to it or whatever. But this is not, I don't see this as providing a technological advantage as much as it's just a shift in we can be vain about physical things. We can be vain about digital things. Vanity can take many different forms and it's a new avenue for us to express our self-indulgence.
MAX_KORDEK: So when we started with Lisp back in the day, we built everything from scratch. We were forking off an existing project in which my partner and I were working in before, but we basically had to rewrite everything. And this took us many, many years of hard work and well, this is not the way to go for new teams, new developers joining this industry and trying to innovate and bring use cases to it that they spent millions of euros in funding and hundreds or thousands of hours in coding time just to begin with a use case. That's where the SDK comes into play. It delivers essentially all requirements you have or it gives you all the features you need to build a blockchain application. That means it comes with a vanilla blockchain, which you can spin up in one hour and then add either on-chain logic or off-chain logic to it. On-chain logic in the form of custom modules, which adds functionalities to your vanilla blockchain. Let's say new transaction types, allowing you to create an NFT, to trade an NFT, allowing you to make a prediction onto the future, allowing you to gamble, allowing you to play a game, whatever you build inside that custom module, or off-chain logic through a plug-in system we developed where you can, for example, create new API calls in order to retrieve data from your blockchain or let things automatically happen after some time or triggered by certain blockchain actions. So we essentially bring everything to the table so that a developer can easily and rapidly build a blockchain application which runs secure, which was security audited at least from the code we essentially anyone who is not a PhD in cryptography or so to jump onto this train and just experiment with this technology so that we can have maybe another podcast where we discuss use cases, which actually make a lot of sense. And that's what we're all about, you know, simplifying blockchain technology and the development of it and making it much more accessible to anyone in the world. Because we just saw it's pretty damn complicated to do that.
STEVE_EDWARDS: Right. So yeah, I'm still trying to get my head around these possible use cases. You know, I was reading a blog post or an interview with you from a number of years ago, I think it was 2017, and you were mentioning how it could be used for ensuring, I think you said like food security, I think, or knowing where certain things come from. And I think, oh, here we go. I'll just read a quick quote here. Blockchain technology has the ability to transform our daily lives across multiple verticals.
Technology applications that we have become accustomed to using such as social networks, gaming platforms and financial applications can all be improved on using blockchain. Oh, here we go. With blockchain, we will become more educated on the goods and services we purchase and how we engage with our surroundings. For example, we will know exactly where the food we buy comes from. So can you give an example, I guess, of what you're thinking of in terms of food purchases?
MAX_KORDEK: Yeah. So that's what I was referring to before. That's...Essentially, what we learned, this is a lot of BS. We cannot bring blockchain to existing industries and try to revolutionize them or try to disrupt them. The supply chain management system, I think what AJ was saying is entirely true. It can all be built with centralized system without a blockchain. I think that's what I learned after six years now. That's not where blockchain will play a role. It rather will play a role where entirely new industries are being formed decentralized finance or game file, game finance, how it's called. And I guess in the coming years, there will be new industries formed again, besides these two. And that's where blockchain plays a role. So in Intel, new industries, it's a paradigm shift. It's something new. I think it doesn't work anymore to bring it into the real old world. That's where there are too many players with different interests at play and where a decentralized system might even be too inefficient to play a role.
STEVE_EDWARDS: So the industries mentioned, you mentioned DeFi and the gaming, those are all where everything is digital, everything is based in the classic term cyberspace. Is there, so do you see any new industries being built or created that interact with the real physical world in terms of managing things outside of cyberspace in the real physical world?
MAX_KORDEK: Yeah. So I think many startups. It's sunk a lot of money into collaborations, partnerships and so on with existing startups to create use cases or proof of concepts, let's say in the supply chain system, in the automotive system and other industries. Nothing really came out of that. Yes, there were interesting use cases. It was visible that blockchain could improve certain parts or things. But to be honest, you don't need a blockchain in order to...Let's say pay for a taxi per minute. And then if you're changing the lane, which is maybe fast, you pay more per minute or something, you don't need a blockchain for that. And that's why I agree with AJ entirely. I think like the first real use case besides just a cryptocurrency was this DeFi and that's where with all these currencies, which then existed, well, different actions were then possible, like exchanging them in a decentralized way, lending them away in a decentralized way staking them and multiplying them in a decentralized way. That was the first one. And then just recently, like, I mean, with CryptoKitties and so on, it came up like a few years ago already, but just recently it exploded. It's this whole game fire thing of NFTs, collectibles, decentralized trading card games, where we don't have the physical Pokemon cards anymore. We have it all on the blockchain. And then the game on top of it is actually centralized. And it's like an app on your phone or so that doesn't matter, but you actually hold the assets. So it's the finance aspect of the game. So you don't trade the Pokemon cards physically with your friends or sell them off on eBay or so. You actually can do it all within the system. And that's just, I think what's coming more and more, you know, like different finance aspects of industries are being disrupted there.
AJ_O’NEAL: So this is the question I always come back to with the kind of example that you just gave, like their trading card example. I don't see why a blockchain would ever be necessary for something like that, as opposed to a block tree using, if you took the same technology, public private key pair signing and applied it to something like Git, where you could have many different trees of assets and they could, each asset could have its own branch or whatever. You have perfect efficiency. There's no need to make it inefficient by forcing it into a single monotonic. I don't know if that's the right word, monotonic whatever, just a step ladder chain, right? Why not just use plain old private public key pair technology to sign ownership over to something and then you still get the benefit of it's public, public key is signed by private key, public key is published on both sides, everybody can know what it is. Why a blockchain for something like that rather than just the technology that we were using for the 20, 30 years before?
MAX_KORDEK: So you explained in the very beginning of that podcast, what the blockchain actually is based on. And there you were referring to prime public key infrastructure, Merkle trees, proof of work and so on. And I think instead of just signing it and putting it into a tree and with that being able to prove yes, you have that trading card, you also want that it's actually stored somewhere. So a database. So now you're asking me why decentralized one, why not just centralized?
AJ_O’NEAL: Well, it could be decentralized. For example, with Git. Technically, people don't use it this way, but technically you could take any branch that you're interested in. So say you're interested in Pokemon Charizard number 587. You could just download just that branch and just track the history of things you're interested in rather than tracking the history of anything that is ever. So the root company, Wizards of the Coast, could sign every digital card. Hypothetical scenario. Wizards of the Coast could sign every digital card and whoever purchases a pack, they could give them a branch essentially that contains that pack of cards. And when someone trades that card, they could then create a branch for the trading of that card. So if you wanted to follow a particular card, you could just look at the list of heads, which would be every card that's produced. So you just have a very small file that is every card that's produced. And then from the list of heads, track the branch to prove authenticity.
MAX_KORDEK: Yeah. But I think like if you now want to have an expanded feature set, like being able to trade it, being able to auction it off, being able to send it somewhere, you need more logic than that. So you're expanding and adding to your stack of tools and technologies you're using and then just using a blockchain is just one step more. However, I think like what you were referring to is also something being actively worked on currently in the blockchain industry, it's called sharding where, for example, in this case, one smart contract is actually running on its own thread or its own chart. And someone who's just interested in that one smart contract, let's say this share results or from this trading card company, all the cards, then that person only needs to worry about this one chart. And that's where the scalability comes in because also the security aspects and so on, the security guarantees can focus on that chart only. So there's a lot of innovation where this overhead of having this monolithic, huge, inefficient blockchain, yeah, where that is just not needed anymore going forward, you know? And the technology is still very young.
AJ_O’NEAL: I can get on board with that because then we're just saying, well, it's just plain old cryptography. You're just taking good practices in cryptography and you're just applying them. And that I can totally get on board with. I'm totally on board with using public private key pairs, elliptic curves, and signatures, publishing signatures to a database that people can selectively pull from to get the signatures that they're interested in. And I guess the one downside of that is that if not everyone who plays the game, so to speak, has the full 160 gigabyte copy of the record of everyone who's ever played the game, and every single move they've ever made, then not every single person in the game can verify every other single disinterested action in the game. But in the real world, we don't ever do that. There's no case where that is ever done that I can think of in the real world. The real world is the use case you just described where you are an interested party. You, you gather the things that you're interested in and people that are interested in something, have enough information between them that the proof is solid.
MAX_KORDEK: And that's what I was talking about earlier. Like game you wouldn't develop entirely on the blockchain. Like for example, the trading card game you would the game itself would be centralized in an app and that's it running on centralized service. But the actual assets which you own could be on a blockchain, which refers then to all these ownership and being able to trade it, being able to auction, being able to prove that you hold it, and so on aspects. So it's not that everything has to be on the blockchain, but certain parts. And so far we see every part where value, where it's about value. Either with a fungible or non fungible token. That's what should live on the blockchain and everything else, of course, doesn't have to be on the blockchain itself.
AJ_O’NEAL: Well, if you're, if you're using the blockchain generically now to mean sharded blockchains, which would not be blockchains, but would be more an evolution of the Merkle tree, then I'm on board. If you're saying that it, it should actually be an actual blockchain, like the Bitcoin blockchain. Then, then I, you know, I've already said why I disagree, but if you're, so if you are using that terminology as talking about trees, not talking about a singular chain. I'm totally on board.
STEVE_EDWARDS: Okay. So we're hitting up against time here. So I'm going to let Max have the last word here as the guest, and then we're going to move into picks. So Max, any last words here?
STEVE_EDWARDS: Yeah, I agree. You know, I experienced being in software for a couple of decades is, as shown, especially in the open source world, that I think when you just allow people to scratch their own itch, you know, and given the tools to do that, people will come up with things that nobody's ever imagined that find out, hey, I have this need and other ones, someone else is like, Oh, yeah, that's cool. I have the same need. Pretty soon something starts growing. So, so from that perspective, yeah, I like the idea of just creating a kit, throwing it out there and say, here, play with this and see what you can build.
MAX_KORDEK: Yes. But even if not, at least we tried, you know,
STEVE_EDWARDS: yes. Yes.
Hey folks, it's Charles Maxwood. And I just wanted to jump on real quick and let you know that I am putting together a podcasting course. I get asked all the time. I've been coaching people for the last six months. How do you start a podcast? How do you put it together? What do I need in order to get it going, et cetera, et cetera, et cetera. I've put together the curriculum and I did it through coaching a whole bunch of people and now I wanna share it with you. You can go check out the course. It's actually gonna be a masterclass. It's gonna be a four week masterclass where I actually walk you through the entire process of launching a terrific sounding podcast and putting together content that people wanna listen to. And you can find it at podcastbootcamp.io.
STEVE_EDWARDS: So let's move into picks. Picks are things that we find interesting on a personal level. Could be tech related, could be non-tech related, anything you want. So we'll start with AJ.
AJ_O’NEAL: Okay. So I'm going to pick something. Well, all of my picks are going to be blockchain related today, which is unusual for me to pick everything on topic. But the first thing that I'm going to pick is the boom that has happened because of the interest in the blockchain in making cryptographic good cryptographic libraries ubiquitously available. Any programming language that you pick now has a suite of cryptographic libraries that probably would not have been there if it were not for the Bitcoin slash blockchain boom. And for that, I am very, very grateful because there are lots of things that are very practical, very solid, very well thought out that have very concrete existing use cases. that have been enabled because of the exploration and the forays into the blockchain space that otherwise would not exist or, or would maybe even would exist in some places, but would, would still be developing. We would still be having many more hurdles. For example, let's encrypt. It probably started around the time that blockchain started getting popular and let's encrypt was probably not as strong of a driving force to get cryptography across every programming language as the the blockchain stuff was, but the some of the let's encrypt libraries are built on cryptographic libraries that were built with, with blockchain compatibility in mind. Cause they also brought the older forms of encryption and stuff along with them a lot of times. So I've got that just as an overarching thing that I'm very grateful for in all of this. Another is blockchain backer. If you're interested in just forget the technology, you just want to figure out how do you work people's intentions and emotions in a crowd, meaning how do you work a market to your favor? The blockchain backer talks about this one universal rule that has applied across every asset since we've been tracking assets that is called the Fibonacci retracement. And that is probably the most important thing that you could learn. This is essentially what every algorithm, every bot that buys and sells is buying off of this. And this somehow, I don't know how it works into human psychology, but essentially people will naturally buy and sell along this particular model called a Fibonacci retracement. And if you build a bot that buys and sells along a pattern that models a Fibonacci retracement, you are guaranteed to make money. Or if you are that bot, if you wake up every morning and you track some sort of asset, whether it's the stock market or whether it' cryptocurrency or whatever it is, if you track some asset that and watch for where it fits these Fibonacci retracements, you will make money. It's just that, you know, you got to be really diligent about it. But if you study it for 10 years and the blockchain backer has a course that explains how to do this, a buddy of mine got into it and it totally opened my eyes to get past some of the, I don't like the technology to understand just like, Hey, if you want to make money, it doesn't matter what the technology is. People are going to behave the way that people have always behaved throughout the centuries. And this guy gives you the science to figure out how to track that in charts and be able to make accurate predictions that are going to, I mean, obviously you can't guarantee that somebody will make money, but that the charts speak for themselves. You can also hash cash. We talked about that. That was a, I was wrong. It wasn't the nineties. It was Oh two. It looks like when it was published, well, that's officially published. It may have been circulating earlier and but anyway, hashcash is an interesting technology. I believe that it's, uh, I could be wrong. I believe it's what cloud flare uses to check your browser, why it takes it five seconds while it's spinning. I think that it's a technology similar to hash cash or has been in the past at least, although it, that the downside of that is it operates differently on say a mobile versus a desktop or whatever. There's an article cryptocurrency is an abject disaster, which came out by, gosh, I don't have it up to say the person's name, but by somebody who's, I guess, relatively influential, Drew Devault. That's what it is, which talks about specifically not blockchain problems, but cryptocurrency problems, which again, they're different things. You can separate them out. But I think that that's, it's a good read. Whether which side you're on, I think you can find some things you agree in there. The Nyan Cat NFT. I got the article for that. We talked about the biggest partnership in the supply chain space, I think, is the Walmart-IBM partnership for, I think they call it Food Trust. So I'm linking an article to that. However, in order to understand that, you have to understand what a blockchain oracle is. So I linked to that as well. And the quick summary of a blockchain oracle is that it's a person who presses a button on a scanner to confirm that the QR code of the item was scanned in. That's overly simplistic, but that's essentially what it is. So that makes it a lot easier to understand because they kind of try to make it sound like magic. So you don't realize, wait, a human could make a mistake. A human could hit the wrong button or intentionally hit the wrong button. But anyway, so those are the picks for the day. And I'll throw in also just my links to Beyond Code if you want to follow for live streams and programming tips and such.
STEVE_EDWARDS: All right. Well, I will go next. And Max, if you're not familiar with the podcast, I pointed every podcast of my dad jokes or my puns, so I always have a few little jokes to share, just because I'm usually too late to have other picks. So I got three of them today. So a while ago in an earlier life, I actually moved into an igloo, but the problem was my friends threw me a surprise housewarming party, and so I was homeless after that. I didn't know they were gonna throw me a housewarming party.
AJ_O’NEAL: Okay, that was a little forced, but I did find it funny.
STEVE_EDWARDS: Well, if you try to work it into real life, it usually sounds better. And here's a simple one. So why did the toilet paper roll down the hill? to get to the bottom. Thank you, thank you. And then the other day, so out of my backyard, I have a deck and sometimes we'll get these wasps nests under the railing of the deck or under the ease of the house and you always got to get rid of them. So I went to our local store to get something and found some wasp killer. And I went to the lady that worked at the store there in the aisle and I said, is this good for wasps? And she says, no, it kills them. So I was like, okay, thank you. That was exactly what I wanted. Yeah. Is it good for Wasp? No, it kills him. AJ's got the confused look. So anyway, those are my picks for the day. Max, do you have any picks for us?
MAX_KORDEK: Bit surprised by that. I didn't expect AJ to come now with like eight picks and you come in with the jokes. Well, I'm a guy always looking at the cutting edge of technology. And that's why I'm in blockchain. I'm super interested in AI, but quickly want to like point towards space tech like currencies, formerly they were a thing for governments, space, the NASA, space exploration and so on. But recently this became a thing of private corporations, a thing of, I would say, the people because these corporations are led by just regular people, not by governments. And we see a lot of these private rocket companies innovating dramatically in the recent years, like SpaceX, Blue Origin,
platform. I think that's super interesting. Of course it comes with other problems. For example, in the case of Blue Ridge and the employees or some of the employees are leaving the company because they were like this corporation behind it, were searing NASA because they didn't get a deal. And here we see then a lot of competition going on and then of course also the human aspects coming into play where the employees leave. But I think this fierce competition is really, really good for us as humanity, because this will hopefully lead to us being a space exploring species at one point. I think SpaceX is now trying to build a rocket which catches an object in space and brings it back safely to Earth. It probably will fail many, many times, but at one point it might be able to do that. Maybe opening us up for space space or asteroid mining and other operations in outer space. So I think if I understand this whole topic of choosing a pig or so, I would definitely pick this topic as a general point of interest because I think that's also where a lot of innovation still can happen and where we need many brilliant minds contributing to it still. So yes, space tech is my My pick of the day, super interesting topic. I'm super fascinated by it.
AJ_O’NEAL: I also think that'll be really interesting to see how that plays out with the space mining, because there's a lot of rare and valuable minerals out there or minerals, elements, materials, materials. Yeah.
STEVE_EDWARDS: All right, Max. Well, thank you for coming today. We went a little longer than normal, but that's because there was quite a lot to talk about, and I'm sure the two of you could have kept talking for another hour or so. Thank you. If people want to get hold of you, Max to ask you questions or to talk with you, what is the best place for them to do that?
AJ_O’NEAL: Indeed. Adios.
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