Pushkin from Pushkin Industries. This is Deep Background, the show where we explore the stories behind the stories in the news. I'm Noah Feldman. Today we have a remarkable guest and a remarkable conversation to share with you here on Deep Background. I was fortunate enough to have a wide ranging conversation with Vitalik Bhuteran. Vitalic is the co founder of Ethereum, which you may have heard of as the other extraordinarily popular cryptocurrency and a broader blockchain that is a complex distributed computer network on which it is possible to build all sorts of different applications. Vitalik has contributed centrally to creating an enormous infrastructure and a tremendous amount of wealth, and unsurprisingly that's made him into a kind of folk hero of the crypto world. Oh and I may have forgotten to mention this Vitalk is all of twenty seven years old. Vitalik is a kind of public intellectual of the cryptocurrency and blockchain space. He has a blog where his posts are more like fully crafted, well thought out essays. This blog, which you can find at vitalic dot Ca, turns out to be one of the most extraordinary resources you can imagine for anyone who, like me, is trying to make sense of this new and complex set of developments in the world around blockchain. What inspired me to ask Metallic to come on the show was a particular post or essay on his blog about the nature of legitimacy. Legitimacy is a central concept in government, a central concept in constitutions, a central concept in property law. And I was stunned and amazed to see how central Vitalic himself made it to the whole structure of the blockchain and of cryptocurrency. I really wanted to delve deeper into his idea and to how it relates to the entire system of crypto and Vitalik graciously agreed to come and talk about exactly that topic. Vitalic, thank you so much for being here. I really appreciate your work because I see who as somebody who is simultaneously a creator, an inventor of things, and also a public intellectual of those same things. And I was extremely struck by one of the many fascinating posts that you put on your blog, and they're really I mean, most people would publish them as essays and magazines you put them up on your blog, so that makes them easily accessible about legitimacy, and in particular about the idea that legitimacy is a scarce resource and something that we need to think very seriously about. In the text of the blockchain. It grabbed my attention because my day job as being a constitutional law professor, and so what I do is I think about legitimacy twenty four seven three to six five, And I was fascinated to see the ways that you were engaging with the topic. So I wonder if we could start, maybe with your working definition of legitimacy, and then from there I want you to talk to us about your leading and really fascinating example that you given the essay, which is the great powable of Steam and Hive. So maybe the start by what you mean by legitimacy. Sure, So the thing that I use the word legitimacy to refer to is this idea that there are these collective patterns of behavior where people all act in a particular way, so they play a part in enacting and participating in some particular outcome. Basically because there exists this kind of collective idea in everyone's heads, that this outcome is like it or not. It is a thing that's happening, and everyone is okay with going along with it. Right. So basically it's this sort of self referential concept that you know, there's a lot of different situations in the world where the thing that is in everyone's interests is to just sort of play along with the same game that everyone else is playing. Right, So, like, if everyone else is driving on the left side of the road, it makes a lot of sense for you to drive on the right side of the road. If everyone else is driving on the left side of the road, it makes sense for you to drive on the left side of the road. Even if there aren't any police around enforcing the rules, it would still mostly work. And you know, even if like you personally have some slight preference for one direction or the other, it's still in your interest to just sort of go along with the strategy that everyone else is going along with. And I think that this is something that goes beyond very simple examples like that. I think it's an extremely important concept in just social relations in general. Right, And I gave a few examples of this kind of both on the blockchain and off So just starting with a couple of off the blockchain examples. Like language is one good example, right, Like, you know we argue whether or not a dolphin is a fish, right, you know, a version of English where a dolphin is a fish would work totally fine. A version of English where a dolphin isn't a fish would also work totally fine. But you know, even more important than getting the right answer is just effects that we agree on an answer. National borders are also another example of legitimacy, right, Like if aliens came in tomorrow and they, yeah, kind of edited all our brains and they to make us all think that, say the border between the US and Canada is five kilometers north of where it is today, Well, you know, the world will just keep on going. But the border between the US and Canada actually would be five kilometers north of where it is today. So governments have legitimacy. Systems of property rights have legitimacy, and systems of rules inside of watchains can have legitimacy as well. One pushback question before we get to the big parable. In my world, when we talk about legitimacy, we usually build into it a specific component that's in some of your examples, but maybe not in all of them, and you did allude to it, and that is not only that this is the game that's happening right now and it's in my interest to play in this game, but also the component that I think to use your words were, and I'm okay with that, right. So in other words, that's the part of legitimacy that is sometimes called not just descriptive but normative, you know, the m I okay with that part of it. And as you mentioned, it's a bit of a self referential concept because we can ask whether a system has legitimacy by asking do the people in that system feel okay with the way things that are working. The reason I bring this up, even though it's a teeny bit abstract, is that in your examples of pure coordination games like everyone drive on the right side of the road or everyone drive on the left side of the road, it literally doesn't matter which side we choose. Right in the UK and in Japan they drive on the left. In other countries they drive on the right. And you do it because everyone else is doing it, but you also do it because if you don't, you're going to smash into another car. So you're okay with it, but you're only okay with it in the sense that you had to pick one, and it's arbitrary as to which one you pick. In contrast, if you think about examples like borders, governments, property rights, saying you're okay with it means something a little more than that. It doesn't just mean, you know, like in a government of absolute arbitrary power, well, I'm going to go along with what the government says because I'm going to be killed. Otherwise, such a government might be legitimate if everyone starts saying and I'm okay with that, But the government might be illegitimate even if people are following the rules if people say to themselves, I'm not okay with this, but what am I going to do? I have no choice, And then if I knew that no one were watching, I would break the rules. So I just I guess before we dive into the concrete example, I wonder how important is it to you to give a definition of legitimacy that could be satisfied without our focusing on how okay with it people are. No, It's definitely a very good question and a very important points right, because people, I think do use the word sort of equivocating between the positive way of looking at things and the normative way of looking at things. So like the way that I defined legitimacy in the post, and you know, the government of North Korea is the legitimate government of North Korea, right, because exactly like you know, even if lots of people are really unhappy with it, North Koreans all act like it's the government of North Korea. I know, America act so like it's the government of North Korea. South Korea act so like it's the government of North Korea. Right. But then at the same time, I also later on in my post, I bring up these different theories of legitimacy, basically ways in which or reasons by which some outcome could be perceived as sell legitimate, and number one in the way I put brute force, right, But aside from number one, I had all of these others and the other theories of legitimacy having to do with things like fairness and participation and continuity and like, these are things that we would be much more morally okay with. And I think if I had any point on that question, I would say that like descriptive legitimacy and a kind of moral acceptability. Like they're both real contexts, and I do think that they have some kid action even in the real world, right, Like something being morally acceptable to the people in that context as definitely is something that really contributes to that thing being legitimate in a descriptive sense, but it's also not the only thing. Let's turn now to this what I'm calling a parable And like a lot of great essays, your essay is built around a central example, and I wonder if you would describe to us the parable of Steam and Hive. Sure. So, there was a sub blockchain called Steam, right, it was a trying to be a decentralized social media thing, like you could have some system for built in tipping. There's incentives, there's like decentralized content curation of sometime. You know, it was a very interesting experiment, right, But there is also this kind of political intrium inside of the Steam ecosystem that happens where basically at the beginning there is Steam the blockchain, and then there is Steam the company, and Steam the company that it happens everywhere exactly like you know, there's a the Ethereum Foundation, there's the z cash Foundation, there's all these foundations, but the big difference between a blockchain and a traditional centralized service is that in the centralized context, the like Twitter the company based has the technical ability to do whatever they want to Twitter the service, right. But Steam the company versus Steam the blockchain, there's actually a bit more of a difference. And most of the time in crypto land, I don't really think about this, right, But what happened here was that the owner of a Steam the company decided to sell Steam the company. Now it's not actually possible to sell Steam the blockchain, right because Steam the blockchain is a thing that only exists because you have these thousands of independent, coordinating participants and they, you know, ultimately have the right to run whatever code they want. But you know, ultimately, like what code gets run is constrained by the facts that people have to agree to all run the same code. And if you run different code from everyone else, then you know, even if your code is better, you're just kind of off in your own little universe and you're not talking to anyone else. Right. The blockchain's kind of forked, and you know, if you're on the minority for it, that's a lonely place to be. So Steam the company got sold and the new buyer, the new owner or Steam the company as this a character named Justin's son. And Justin's son is this crypto entrepreneur who's you know, a very controversial and is widely known for doing a lot of things that I personally against it are unethical, like you know, like his white paper, plagiarized ipfs, and there's other examples. So there's reasons for the community to be a kind of very suspicious of him. So overnight, basically this a sale was announced and I don't think the community was really consulted about it and the company to clarified by the way, because I think it's useful for people who are like me, who are come from other worlds. The things that he's done that you consider unethical are unethical within the ethical framework shared by other people who operate in and live in the blockchain. They're not illegal in some sense of the term. Or do you think maybe they were illegal in some cases it's possible that he did illegal stuff. It's possible he didn't. I don't. I don't know, but like plagiarism, that's one example, right, Like I don't that's not illegal, but that is considered unethical in a context much broader than the blockchain space. And like his white paper, did you know a copy a bunch of pages of I think it was the IPFS white paper pretty directly. Okay, thanks so close, Parenthices, go back to your story. Okay, So basically overnight, right, the Steam community woke up and they realized that Steam the Company, this thing that was supposed to be a steward of Steam the blockchain, and up until then they kind of trusted without really thinking about it, is suddenly controlled by a potentially hostile actor. And you know, they were obviously very scared by this, right, and so they and they before there was this sort of informal gentlemen's agreement that the funds that are that are controlled by Steam the Company. So Steam the Company had twenty percent of all the Steam tokens would be like are sort of held in trust, right, and they're intended for the ongoing development of the Steam ecosystem, and they're not just like, you know, the personal play money of the founder. But then when Justin Sun comes in, they did not have the trust that this agreement would be honored, and so they had decided to make a move on the Steam blockchain, so using the voting mechanism of the allegated proof of stakes mechanism that's built into Steam in order to just add a rule that says that that accounts cannot be used to vote, because like, if that accounts could be used to vote, right, that's one accountable twenty percent of all the Steam tokens, and that would just give Justin Son essentially like you and a later all rule setting power. So just pause for clarification purposes, the people who the other holders of the tokens exercise their voting power to disenfranchise whoever would be the owner of it. In this case, it was a particular person, the owner of twenty percent of the tokens that were out there. So as it were eighty percent, I mean it made it probably wasn't all of them, but a majority of the of all the voters voted to disenfranchise the person who held twenty percent, right, Okay, go on. That's fascinating in its own right because of the way that's parable as headache. It is. Yeah, So Justin Son struck back, right, and what he did was that he made another proposal. The eventual result of them was to basically like kick out the delegates, the kind of elected participants that participated in the original move against him, and basically kind of secure majority control over the blockchain to the point where he could not be diswatched anymore. And he did this using not just funds that he had directly, but he also talked to exchanges, right, because there's a lot of users that just have like their Steam tokens held by exchanges and exchanges like they have the private key, so they theoretically have the ability to vote. And so he wants to a bunch of these big exchanges and convinced them to make this kind of big move to basically make a counter vote reverse those results and just secure power for himself. Now again clarification question, when you say secure power for himself, if you asked him, if we had him on the show, wouldn't he say, what do you mean? Secure power for myself? They just disenfranchised me, and so all I was trying to do was get back my voting power. I mean, leaving aside whether that would be sure or not. Is that what he would say? I think so? And what do you make of it? I mean, well, there's multiple levels to this, right, because this is one of those situations where there's like, like there was this sort of informal agreement that the coins owned by the companies should like should not be used to vote in before the handover, were not being used to vote. But then of course that agreements have ended up never being put into stone. So you can blame the community for not being careful as well. You know, you can blame the ritual owners of Steam for not being transparent and not consulting with the community about the handover. I think ultimately, like the thing that caused the community to do this is just that like they you know, did not want to participate in a blockchain where one participant had this amount of power Like that just sort of goes against what even the purpose of a blockchain is trying to be. So then what happened when he got back the power that he had been taken haven't been teamed from him. So when he got that power back, at that point, he had power secured in the sense that he had all of these delegates, he had a lot of coins, and so the only move that the community had available was to do this sort of extra protocol appeal, right, they announced that they would make a hard work. They would just release a new version of the software, and that new version of the software would basically remove the right to vote from and I think even burned the coins of anyone who participated on justin sun side during the votes, right, so they made this protocol keeping while keeping the value of their own coins, I guess, transposing it precisely. So they decided this is totally fascinating, and it's it's where your story starts to look really different from what could have happened in a country. Let's say they said, we're going to go and make our own new ecosystem copied from the old ecosystem, excluding the wealth and the power of the people whom we now see as the bad guys, replicating our own wealth and power, but in theory in precise proportion to how it's allocated among us right now, minus the parts that we burned, exactly. And they did this right, and for trademark reasons, they had to rename it, so instead of being Steam, it was called Hive, and a huge part of the ecosystem actually did migrate, right. So I think since then the market caps over the two have actually been sort of pretty neck and neck against each other. So what is your takeaway from this whole parable? Right? I mean, you know, many influential people in history, religious leaders amongst them, like to speak in parables. It's a good way to reach people, but it's sometimes helpful to explain what the parable means. So what does this parable mean to you? Right? So the conclusion that I made in the post, right, is that this was proof that like Justin Sun never actually owns the coins. Like when we talk about ownership, there's you know, this concept of like usas fructus and abusis I think is the Latin phrase like you can use the property, you can enjoy it, or you can abuse it. Like those are the rights of ownership. Right, If you own something, you can you know, basically do whatever you want with it, with the exception of regulations that apply regardless of what property you're using to do things. But clearly, in this sense, like Justin used the coins that were in his possession, but he ended up not being able to use them successfully, right, because you know, the ecosystem forked off and he was not able to sort of fully implement the thing that he was entitled to emplements. According to the formal rules of the system. And what that shows to me is that this is proof that justin sun Never and even the Steam company never actually owns those coins. Right, the coins in some sense actually were sort of owned not just by the holder of a cryptographic key, but they were also owned directly by a community conception of legitimacy. Right, they were directly owned sort of by this metaphysical object that consists of this set of principles that existed and we're maybe unstated and we're maybe informal and vague up until that point in the Steam community's heads, and like, that's a really powerful thing. It's tremendously powerful. So now if I may, let me just say a quick word and ask your dreer reaction about how these same issues are thought about in the context of property law and constitutional law, which you think of themselves. You know, constitution law thinks it's the law of the blockchain, and property law thinks it's the law of the tokens, at least in this particularity. So in that world, we would say everything that you described could happen in a real existing community or government. It's usually called a revolution. Right, you have some backgrounds set of principles that people think of as the allocation of power. Who's in charge, who are the courts, who do you have to listen to? Who are the police? And then that system uses some set of rules to decide who owns what property law governs the stuff you own, voting rights law, which used to be thought of many many years ago as a species of property law, because they're closely connected. Governs how you get to participate in decision making. But if someone exercises, or some group of people or size a lot of power in a way that makes other people in this system, usually a majority of them, but it doesn't have to be a majority angry enough to break the system. You can get a revolution, and in that revolution, people break the existing structures of power. They take away people's property rights. They can take away physical objects that people have, or they can take away their abstract rights, like you know, the abstract idea that they own a piece of land, or you know the shares that they In theory wouldn't that kind of value can be destroyed, And because we know that that can happen, we tend to think their property law and a whole constitutional order are contingent and their contingent on their not being a revolution. And when we're looking for a word to describe the world where there's no revolution, sometimes we use the exact same word that you used. We say this system has a property of legitimacy, meaning that right now, no one is starting a revolution who has enough support to make it into a very successful revolution. And we think that all the time we're operating against that backdrop. So in my world, your story makes perfect sense, and we also always assume that it's true, even though we might not always talk about it, except when there's revolution in the air. As you were saying early in peacetime, you don't have to think about these things. So I guess the first question I want to ask is, when you hear me say what I just said, do you think duh, you know that's obvious? And if so, why does it why did it seem or why does it seem surprising in the context of the blockchain for similar dynamics to be in play. Again, I'm definitely not surprised that constitutional law has similar vocabulary for these kinds of things. The thing that just surprised me and fascinated me about this happening in block channel land. Is that the way that a lot of us think about the world, or at least philosophers think kind of legal philosopher's take about the world, right, is that you have the laws of physics and the laws of physics or layers right, and the laws of physics. You know, you have guns and bombs and soldiers, and like that's what ends up kind of ultimately in the extreme of extremes deciding things. Then you have layer one, and layer one is like basically legal norms that are run by countries. And then sometimes that layer one collapses, but most of the time that layer one doesn't collapse, But then everything above that layer one is some layer two. And the way that layer two works though, is that most of the time it runs fine, but the portion of the time when it does not run fine, what you have is you actually have some kind of appeal like a descents to layer one, right, Like if a business transaction goes badly one if this party sues the other party, you know, layer one, the government legal system ultimately ends up kind of deciding who's right. If say you have a dispute where the employees of Twitter decide that they're going to take over Twitter servers because they have different opinions about which accounts should be banned. They might be able to kind of achieve some victories for a few hours, but you know, eventually they the police get called in and then the courts get called in, and like this layer one that presents this abstraction of just always giving you some kind of concrete final resolution that has you know, universal agreements, is what ends up being the final designer, right. But in the blockchain space, what we have is like we in this particular context, we don't have that, right, Like there's no sort of recourse to at least the nation state layer one legal system. Instead, we have something that feels more similar to this kind of layer one's that is the blockchain community. And then that ends up descending to something that feels like a different layer zero, which is basically not quite laws of physics, but at least kind of the laws of computing, and like the practical rules of well, you know, who actually is running the software, who actually is running the blockchain, how quickly is it possible to convince people to update software. So things that feel like there are sort of aspects of nature as opposed to things that are aspects of a kind of a human main construction. We'll be right back. Let's bring now your big claim about legitimacy to bear on the big picture of the blockchain. Sure, to those on the outside who were eagerly like me, eagerly learning about the ideology of the blockchain and its functionalities and its goals and its trans and are really interested in the question of its transformative capacities, A crucial question is, you know, why will lots and lots and lots of people in the future engage on the blockchain, right? Why will they prefer it to other more centralized options. How much of the answer for you is connected to this legitimacy question. How much does it connect to the idea that, well, the blockchain can offer forms of legitimacy for the kinds of things that it does well or that enables people to do well that are different from and maybe more attractive than the kinds of legitimacy that we're accustomed to seeing in more centralized deployment. I think that's a good question, and it depends quite a lot on no legitimacy, and I think that's true on multiple levels. So there's sort of two different levels that I can talk about. So the first level is that I think the decentralized architecture of blockchains is something that directly can give users a feeling of a safety and a feeling of safety that the functionality that the blockchain provides is not going to just change on them in unexpected and unacceptable ways. And like, one very practical example of this, right is, like if you look at things like Twitter and Facebook, they at the very beginning had very open APIs, and there are lots of startups that built themselves relying on the assumption that the APIs would continue to exist as they have existed. But then what happens in a lot of cases is that Twitter and Facebook basically pulled the rug on them right, like they just made the APIs no longer work. Regardless of what the reasons were. The result was that people like Yahd entrepreneurs have just spent years building these projects. But the result is that like Twitter just makes a decision with a few clicks and boom, their entire business model is gone. With a blockchain like that, you can't really do that, right because even if you don't want to talk to a blockchain directly and you're making a service, and it's like working through some APIs like from ether scan or some one of these kind of service providers. Like if either scan decides to change its serves of service, the blockchain is open, right, and there's other alternatives. You can just like go over to ether chain and they'll start doing the same thing. And then if someone suggests that the rules of the blockchain themselves change, then that can only happen through this long, open process, and even you can just potentially go in and raise your objections to it, and like it's much much harder and much less likely for the thing that you were doing to just suddenly, you know, become impossible on you. Right, for example, is even just a twenty one million women in bitcoin? Right? Like I think bitcoin is sometimes like they overstate this a bit and they say that, you know, the twenty one million limit is backed by mass, like obviously it's not right, Like, obviously, if everyone agrees that tomorrow we're gonna run a new version of the Clients, and that Clients now says that there's thirty one million bitcoins, then like for all practical intents and purposes, there's thirty one million bitoins now, but in practice, like, there are these very strong forces of a legitimacy that go against that. Right, there's this entire community that basically says, you know, twenty one million is the zone data of bitcoin or like, without that property, this sting is not bitcoin. And there's enough people who just really fervently believe in this that you know, in practice, breaking the twenty one million limit is just going to be like extremely harder impossible. So that's money answer, right, Okay, good, let's talk about that answer, and then I'm sure you have more to say about it. But this answer is really fascinating an incredibly generative. So I want to say a couple of different things about it in question. So the first is, let's start with this question of is the argument basically, look, distributed power democracy would be the analogy in ordinary constitutional design has some real advantages over concentrated power like autocracy or certain forms of monarchy, and so in the long run, many people will prefer the blockchain model to the more centralized model. First, sort of like the reasons that people prefer democracies to autocracies, which includes the possibility or includes the probability that for a democracy to make changes, you need a lot of people to agree, and so you need this a certain amount of decentralization there, whereas in a pure autocracy, you know, the emperor decides tomorrow or Hijinping decides tomorrow, the things are going to be different and then they are going to be different. So my first question is is there a kind of loose analogy there such that when people are making the argument for the appeal of the blockchain and its advantages, it has a kind of family resemblance to the argument about the advantages over decentralized governance, namely democracy over centralized government, namely autocracy. I think that's definitely a good analogy. So if it is, and that's for me, that's very clarifying. And I apologize for translating your world into my world, but for lease some listeners, your world is certainly newer than mine. If that's true, then what about the counter concern, which is that you know, there are a lot of people who prefer big centralized systems of governance, and what partly the reason for that is that big decentralized groups of people are susceptible to their own weird changes over time. Right, they can collectively decide that they're going to go out and do something completely different, and we call that a revolution, a revolution that establishes and achieves legitimacy, And it doesn't necessarily do a better job of protecting settled expectations than do the older systems like monarchies and autocracies. Yeah, so I think two answers there. One is that I do think that blockchains have more of aya do nothing biased than like sort of built in inherently to this lay or zero that we talked about them, than systems of governance do. Right, Like, if the social layer goes to hell in a country, then you know, often a strong man does get in power and do whatever they want, Whereas if the social layer goes to hell in something like biquin and ethereum, then like often just nothing happens. Right So that now, of course you can you know, disagree, and there might still be the possibility that the social layer goes to hell in such a way that makes it easy for crazy things to happen in a blockchain. But like it feels like there are these a sort of layer zero. Pressure is just because of this coordination problem of getting people to update their notes at the same time that make it less likely. So I think the distinction here is that, like, blockchains are only the bottom layer of an application, right, and blockchains don't even necessarily have to innovate much for applications to be able to innovate much on top. And so going back to your point of what if people like centralization, one of the big reasons why people like centralization is just performance and the ability to kind of rapidly pivot and make changes. But applications on a decentralized system can do this, right, Like, there's plenty of applications on ethereum where those applications have internal governance, and that internal governance has the ability to, like say, completely switch over the rules with a sixty to eight time delay or sometimes completely switch over the rules with a zero day time delay, right, Like, you can build rules and you can make things a kind of all long the spectrum from the centrals a full centralization on top of a decentralized system. Now, what you can't do is you can't build a decentralized application on top of Twitter, right, So that's kind of the intuitive case for wanting or you can only in so far as Twitter will let you exactly right. So that's kind of the intuitive case for wanting things that are closer to being base layers to be more decentralized, but wanting things that are closer to the application layer to be more centralized. Although you know, in the case of the modern state, you know, the post sixteen forty eight state, the state actually has exactly that hybrid character that you just describe. The state is Twitter, right, it maintains control, albeit it has a governance mechanism behind it, although so does Twitter. Technically it has the laws of corporations behind it. But then by enabling a free market, the state is in a sense allowing people to build all kinds of applications on the centralized platform. And so the state has really hugely benefited in the modern era from this domination. So it is possible and similarly, presumably if you were, you know, a major platform, you might want it might be the smartest move to allow the building of all kinds of you know, decentralized things on top of your platform, because it actually encourages everybody to be to be invested in that platform. That might be the winning strategy from a certain standpoint. That's very possible, but there are also limits to the extent to which a centralized state can commit to a trustfulness. Like one very practical example, right as if we look at say centralized US tech companies, like back about ten or fifteen years ago, they were fairly fairly trusted internationally, right, and there was this kind of legal order where people could sort of put their heads in the sand. It kind of pretends that these Silicon Valley companies were basically living inside of an anarchy, and they would just like be able to you know, keep on and do keep on doing whatever was in their business interests. But then what happened, and what's happened over the last ten years, is that a lot of countries, like both governments and people in countries and especially countries that are not very friendly to the US, started being much more suspicious of US tech companies. Now, some of that I think is, of course, is because they just they want to promote local alternatives so they can have control themselves. But some of that is also because like they are actually afraid that if the US and this other country comes into conflicts, then the US government is actually going to ruck hold them. Whereas you know, the Ethereum blockchain, for example, is less capable of doing that if say, an application was built by someone from the Bitcoin community and at ran on the ethereum blockchain. So now you're turning to the last topic I want to talk about, and it's very rich and fascinating to me. And that is what you might call the issue of pre commitment. Right, how well suited are different kinds of institutions to promising in advance that they won't mess things up relative to your settled expectations. And you already mentioned that in the context of the people who say, well, you know, bitcoin's foundational definition is it's limited to twenty one million, and a lot follows from that. Right, Therefore they say it's a fixed supply. Therefore they say it's analogous to gold, which is also a fixed supply. Although we may not have found all of that fixed supply, the fixed supply in principle exists. So what I'm interested in there're two aspects of this. I'm interested in one. Why would we believe that one kind of institution is more impervious to pre commitment than another if all precommitments are just based on self interest? Right, So if the people who were holding the bitcoin voting power chose to expand the number, and it was in their interest to do so, they would do so much in the same way that when a government decides that it's in its interests to expand its monetary supply, it has a governance mechanism or multiple complex governance mechanisms, and then it does so. And yet when he hears from people in the bitcoin world things like, well, that can ever happened here? We can't trust states to be pre committed, but of course we can trust our institutions to be pre committed. So is there anything to that? I mean, I have trouble seeing why we would be more trusting of one than the other. Sure, so I think like the important thing is that bitcoin doesn't have a concept of voting power, right, like it has miners. But at the same time, like if a minor creates a block that violates the current roles, like even if ninety percent of all the miners are going along with them, the nodes that are run by users are still going to reject them. Right Although although your whole, your whole parable shows that they could just hive fork off and replicate, they could exactly so that's why such genius. Right, Yeah, that's very true. But at the same time, like that action does have a cost, right, Like if it was a an actual voting system, then like you know, once the vote happened and fifty one percent approved the motion and change the source code, well you're kind of screwed, right, yeah, well, or or at the very least, like the shoe is on the other foot. And like the burden of overcoming the coordination problem, which is a really really high burden like basically falls on the side of the dissenters. But in the case of bitcoin, the burden of overcoming the coordination burden for anything controversial falls on the side of the people that are trying to make the change. Right. That's true in a revolution as well, Right, the burden is on the people who want to make the revolution typically right, but there are also ways to rapidly change policy in a state that don't require revolution. May I just say about that often people who study states. I had Francis fo Kiama on the show the other day, and this is something that he writes about extensively, think that the capacity to make changes legally is actually a crucial part of the anti fragility of states. In other words, it's thought to be one of the best ways to avoid the decay of a political order, to ensure the possibility of negotiating change within the framework of law. And when you can't do it anymore, you get rigid, and when you get rigid, you tend towards decay. So that seems like a good feature rather of the very possible. It's also like states and blockchains also do very different things, right, Like blockchains are like software constructions that relatively are interacting with a simpler world. You know, States have to deal with just all sorts of problems and they have to act strategically in the face of external threats. So it's possible that the kind of like the correct balance between agility and ability to just kind of credibly stick in one place is just different between the two contexts. And that's fine. I mean, the question that I want to close with then, is one that I really fascinates me, and I see it again and again and again as I talk to sophisticated people in your blockchain universe or in crypto land, and that is there seems to be this impulse towards what I would call almost like a conservative preservationism, a worry that the reason we can't trust, say, governments, is that they do stuff too frequently, you know, too riskly that facilitates the interests of vote majorities, and that we need to draw a line against that. We need to have principles and rules. And in that sense, it sounds in libertarianism, the idea that you know, we have some basic fundamental rights and we ought to stick to those and we don't want to live in a world where the government can just wish away our rights. And that makes sense to me. And here's the punchline. But if your account of legitimacy is true, and I believe you convince me that it is, then I don't see how decentralization in the blockchain fulfills those libertarian aspirations, because it just pushes them up one level to the level of the voting members, the people who structure the governance, and they don't literally have to vote, they just have to have the capacity to do what you said in the steam Hive story of just forking off and replicating. And so if that's the case, then this world it's no worse than but it not obviously better than a world of centralized platforms when it comes to including governments, when it comes to these kinds of pre commitment to certain core principles, I think the main part of my answer to that is that I'm a marginalist and not an absolutist. Like I think, even if you can't get a one hundred percent of the way towards satisfying some principle or or idea or systems of values, you could still make a huge gain by getting thirty percent or fifty percent of the way there. And like I do think that what I call the laws of physics that exist in the in watchannel onto and the way that a kind of the coordination problems tilt against someone making wanting to make radical changes, even though radical changes are still possible if they can overcome those coordination problems. Just the facts that users run notes just means that you have to consult users at all. Like I do think that those things are improvements. I definitely don't claim that watchings are or can be one hundred percent immutable systems, no matter how hard someone tries to be. I think, just going back a bit to your earlier analogy, it's with like tech companies and how a tech company is, like they do end up changing a lot. I think my answer there is just that like there are if we look at the tech universe, like there are already things that are more immutable than tech companies, right, and that is programming languages, right like Python. You know, it took decades to move from Python to to Python three C plus plus. I think it's still backwards compatible with what was there like tens of years ago. So there are also things that are decentralized in that sense, right, and like programming languages are a good example. So the way that I kind of I guess view the way things should be is that intuitively, things that are more general purpose and that are more abstract, it's less likely that they are going to need to change rapidly because the goal of them is to be general purpose, right, Like with a programming language like Python, like you can build anything in response to it, Like Python did not even have to change in a response to say, the emergence of the blockchain world. But things that are closer to the application layer, they do need to adapt. There's more need for centralization. There is potentially need for kind of bounded centralization where you include some decentralized components, but they're more to keep the centralized party honestly than to kind of shackle than one. So things that are closer to the user can be more centralized, and that's fine Ethereum. I guess I view it as being a little bit more like a programming language than or taking the role of something like a programming language, than taking a role of something like Twitter. But at the same time, like blockchains are their own category, right, Like I think, you know, blockchains, like they take some of the properties of a languages, some of the properties of companies, you could say, some of the properties of states, but they also like they are not each any of those things individually, right, Like they are I think this new construction that's only really possible now that we have this second all of these advancements in technology and cryptography, and like there's a lot of opportunity to build interesting things on top of them, and like the legitimacy that blockchains provide by being what I call this kind of credibly neutral environment. Like I think there's a lot of potential for people to build even centralized services that talk to each other, that sit on the same blockchain. There's value that I think can come out of those things. But at the same time, like, I'm definitely not a proponent of the idea that sort of blockchain like designs are something that's intended to take over every sector of how the world operates either, Like I think they're just a new thing that we've invented in like, we'll see how they interact with everything else. So we've created in the world the telch You don't need me to thank you for the tremendous value that your creativity has created lots of spaces, But what I do want to thank you for is writing and talking about the things that you do in the worlds that you're creating in such an accessible way. I've learned an enormous amount from reading your blog, post, your work, and also just for engaging in this sort of open minded, engaged, analogical way. I think it's tremendously valuable for those of us who are not crypto natives. And sometime sometime in the future we can talk about language. I mean, I think linguistics as a backdrop here is fascinating because sort of what you were just saying at the end there the relationship between language and governance you know, we do all of our governance through language, right, but language itself is gradically decentralized. There are efforts to centralize that they never go very well. You know, there's definitional, there's something very rich there. Yeah, no, some do. Yeah, you know, language is definitely fascinating. Like I think in some ways that might even be one of the kind of closest things to a blotcha in a historical context, right like absolutely, yeah, yeah, open source, but with fixed units, with some connection, depending on if you're a Chomsky and or not, some connection to some underlying biological principles and rules. Deep divide within the field about whether these are primary, like there's a language unit in the brain, whether they are alternatively socially constructed. I mean, you know, it's totally rich for everything that we were talking about, and you should write about it, and we should talk about it some other time. I mean I would love to talk absolutely, I would too. I learned a huge amount from this conversation, so I really want to thank you for that. No, thank you very much. I'll learn a lot too. We're in our third season of Deep Background, and according to my producer Molaboard, we've interviewed more than a hundred people on the show. I have to say that although it would be a terrible idea to play favorites among them, I was about as excited by my conversation with Vitalic as I have been at any time in all of the interviews that I've done. What excited me was to see the talk's mind at work, to see its speed and its creativity, and to have the opportunity to play a little bit with him in banging around ideas that have been the focus of much of my own work and that I developed in a context completely unrelated to crypto and the blockchain, and to see that in some potential way, these ideas of legitimacy may in fact be central to the way that this new world is developing. I was deeply struck by Vitalis parable of Steam and Hive and his core takeaway, namely that on the blockchain and in the crypto space, everything depends on the acquiescence of the participants in the collective undertaking, and if they get up and decide to change it, eliminate it, or imitate it and recreate it, they can do that. This parable opens up some deep and fundamental questions about what crypto and blockchain are good for and what they might or might not be able to contribute to the broader world. I myself am only beginning to develop my thoughts on this topic, but listening to Vitalic made me suspect that the benefits that people are described as the benefits of the blockchain have a lot to do with the benefits of decentralized governance that we associate with democracy, as opposed to the historically significant benefits of autocracy or monarchy, which are more closely associated in the blockchain world with the dominance of central powerful platforms controlled by a single corporation and often headed by a single powerful founder CEO. If this analogy turns out to be valuable and useful, and Vitallic seem to think that perhaps it could be, it will help us to see that some of the advantages of the distributed blockchain might be real and significant, because there are some kinds of decision making and some kinds of development of businesses and opportunities that might work better in decentralized ways. Yet simultaneously, there may also be circumstances where centralized governance is preferable even to the users than decentralized governance. And what's more, there could be hybrid models, much like modern governments, where there is a central national government, but that government then enables people to create all kinds of different sorts of applications, like private companies, against the backdrop of the state's ordinary centralized operations. Most fundamentally, however, if it's the case, as Vitali says, that legitimacy is the key concept on the blockchain, then we always have to keep our eye on what happens when legitimacy erodes, is recreated and is reshaped. Events that occur in governments, both through gradual changes sometimes and also through revolutionary changes. Those revolutions may be rare, but when they happen, they move around a lot of wealth, they unsettle a lot of settled expectations, and they can lead to tremendous improvement as well as tremendous disorder. It's far too soon to draw conclusions about any of these subjects, partly because in the world of governments, where people have been talking about concepts like legitimacy for at least twenty five hundred years, we still don't have definitive answers but the idea that there may be some points of contact between the worlds that we have known and understand and the new worlds that are being created by people like the talk is to me hopeful, interesting, and potentially of tremendous value to trying to figure out the world around us. I hope you had as much fun in this conversation as I did. Until the next time I speak to you, be well, think deep thoughts like Fatalic does, and have a little fun. Deep background is brought to you by Pushkin Industries. Our producer is Mola Board, our engineer is Ben Talliday, and our showrunner is Sophie Crane mckibbon. Editorial support from noahm Osband. Theme music by Luis Gara at Pushkin. Thanks to Mia Lobell, Julia Barton, Lydia Jean Cott, Heather Fain, Carli Migliori, Maggie Taylor, Eric Sandler, and Jacob Weissberg. You can find me on Twitter at Noah R. Feldman. I also write a column from Bloomberg Opinion, which you can find at Bloomberg dot com slash Feldman. To discover Bloomberg's original slate of podcasts, go to bloomberg dot com, slash podcasts, and if you liked what you heard today, please write a review or tell a friend. This is deep background