Price and Value

hi everyone this is charles hoskinson broadcasting live from warm sunday colorado always warm always sunny sometimes colorado so from time to time i have these wonderful videos that i make on specific topics and this particular topic is a topic on price and value so what the hell are we talking about one of the worst things that can happen and the best things that can happen to a cryptocurrency project is price appreciation and notoriety the best days of my life were in 2015 and 2016 before cardano launched because we were a science and we were doing engineering and we were really enjoying and fired up about just getting to the business of business and thinking about protocol development and thinking about scientific advancement the minute cardano launched there was always this uncomfortable tension where all these new people showed up and the only thing they care about is whether ada goes up or down and their whole judge of whether a project is successful or not is the value of ada some of the most deeply uncomfortable emails and messages i've gotten in my career were usually from friends or companies congratulating me when ada reached some arbitrary price point a dollar or something like that and i'm sitting here thinking to myself we've written 102 papers we've written all this code we're actually deploying useful things we have metadata since december and it's being used for beef chain and supply chains there's like cows on our blockchain we have multi-asset in market there's more than 10 000 assets issued on cardano we're really toying with these deep computational models and so forth and the only thing you can find to say congratulations about is the fact that ada has reached some arbitrary price point but what really bothers me is that about and beyond that you see all these youtubers and you see all these people running around i predict it'll be three dollars or five dollars or ten dollars and that is the least interesting thing and the most destructive thing i think that can happen for the project i don't know why the markets behave why they behave i've been in bitcoin since it was a dollar and i watched it go way up and way down and way up and way down and the people who predict this stuff we call them hedge fund traders they're really rich they buy the new york mets i am not that guy i don't know why the price goes up i don't know why the price goes down and i don't want anything to do with base speculation about these particular things it's not my job as a technology company an engineer a scientist to go and make the price go up it's my job to wake up and worry about how do you run a nation on cardano what would be the actual technical requirement there how do we make it useful so when the anti-counterfeiting people come in and they say we want i don't pick an example we want rolexes to be authenticated how do you actually figure something out like that what if lamborghini came to me tomorrow and said we want to do nfts and authentication and do our merchandise and on your blockchain that's the kind of stuff that matters to me and i believe very firmly that we are as an ecosystem in the best position over the next five years to capture chunks of those types of marketplaces now you can make a decision of what does that mean for the ecosystem's overall value but that's always contextual to the macro it's always connect contextual to what's going on in society what if regulatory events happen and bitcoin gets hit really hard by the united states we can have 10 000 businesses and we can have all this great progress that we've done and it would still be a bear market everything will be in the toilet what if tomorrow the us government the federal reserve wakes up say we are going to take 10 of our assets on our balance sheet with bitcoin you could be the worst project in the world a not engineer song a copy of a copy of a copy and you're still probably worth a billion dollars because of this bizarro satoshi driven rising tides trading pair logic okay so these markets are unpredictable they're unstable there's still a lot of inside baseball that occurs because of of light regulation in the international markets and honestly it's a game that i don't know how to win and i don't play so never come to me or our company talk about price appreciation never ask me on for an interview to talk about the price of data or how do you think we're doing in the markets or our comparable position how we're going to be worth as much as polka dot or worth as much as this or when will cardano flip ethereum's market cap that's just not something i care about i'm interested in and i think is valuable to us as an ecosystem now i am keenly aware that there are some people who have purchased large sums of ada and they are vested in that respect and i'll remind those people that you have purchased into something that carries responsibilities you are now part of the story of how to maintain the world financial operating system we're building together you are now part of the story about governance there's catalyst at the moment right now over sixteen thousand people are participating we need more i'd like to have a hundred thousand people if we can and decisions are being made about the direction and focus and priorities of this system and in just two days time 100 of the blocks will be made by staple operators that you the community choose so yes you've picked a lot of data i can give you advice about what i think good governance is and give you advice about what i think a good stake pool operator is and of course we'll have an opinion about good projects for you to support so that they can get the funding that they need to grow the ecosystem build up the ecosystem and so forth but i can't give you any advice on whether that's a good investment or not it's not something that i'm interested in i understand and i'd be the last person in the world to ask i did not for a moment for example think that ethereum was going to be the success that it was as evidenced by the fact that i gave away all my ether i was entitled to 293 000 ether i gave it all to my secretary i received no compensation for my work in the founding of ethereum had i held on to that at the all-time high i think it's worth more than half a billion dollars i made nothing on that transaction i have an xbox that's worth millions of dollars because i bought it on an exchange called bitnet it was kind of an open bazaar for bitcoin and i bought it for lots of bitcoin because bitcoin was only worth a few bucks at the time i will never throw away that xbox 360. so i'm personally the least qualified person to speculate on price and there's nothing we announce or do as a company that is in any way shape or form tied to that those types of cycles there are cases where we know certain announcements for example the announcement of coinbase the community's so excited about and they're very fired up about because they've been asking me in my amas for over two years about that so i'd say hey we're excited about it they're a great partner to work with what excited me more about coinbase than anything else was that they were one of the very few exchanges that actually had a strong opinion on the right way to list the cryptocurrency in custody a cryptocurrency we spent years as a development company practicing psionics trying to be mind readers we would try to talk to these exchange partners and say what do you guys want the first exchange that really took us seriously and had an opinion and wanted to work with us with the rosetta spec was coinbase so i was so excited to say we finally have a partner in our ecosystem that actually helps us tremendously with custody staking and all these other deep detail questions and they got great engineers that we love working with now ethiopia is coming we very strongly believe that there's one hurdle left and that deal's announced and i even bought a damn african bird right here how about that so this is one of the national birds of ethiopia and it sits on my desk every day as a reminder of what we've accomplished we walked into a nation state and we spent years in that nation state we had to train people we had i o global personnel live for months in ethiopia to teach 23 gals and john o'connor's primary residence is ethiopia so you're damn right i'm going to get really excited when we get imminently close to closing a deal there with millions of people because my mission as a company is to give economic identity to those who don't have it and to have cascading disruption in markets these are buzzwords if you can't enter the marketplaces that are meaningful and i i will tell you from day to day that the birds are coming because we work for it we earned it and it's honoring the people that had invested so many years of their life into this john o'connor is not some random guy that worked for it for a while he's a friend i love him a brother and i've seen him at his best and his worst i've seen him in incredibly stressful situations he was once arrested traveling from ethiopia to london at the airport because he had too much of the local currency in his bag in ethiopia oftentimes you have to use paper money there's no credit card processing and the money's not worth a lot so to do anything you have to have a lot of it on you and it turns out because of capital controls if you happen to leave the country with it you can be arrested and he was and he had to endure several days of uncertainty before he got a pardon over something so minor can you imagine having 500 in your pocket flying from jfk to let's say london and the police at jfk search your bag and they find the 500 and they throw you in jail and try to get you to sign a confession that's a real story okay so that person and those around him have invested years of their life into building things their relationships there and the fact that we're so close now to a beachhead that will enable us to hire dozens of locals and do projects at the scale of millions of people is game-changing for our company for our industry and for the types of products we seek to build and also for the concept of economic identity because that's a foundation we can build credit reputation insurance payments all kinds of things on not today but over a multi-year period so am i excited about that yeah [ __ ] yeah do i think that's going to magically change the price of ada and somehow it makes us now worth 10 or 15 no and that was never the point and if people think that they're in the wrong place i think the biggest problem with cryptocurrencies is that people are obsessed with this idea of getting rich fabulously fast they love the concept that they can put a dollar in and somehow that magically through no work of their own turns into a hundred dollars and i got news for you and every single industry where that occurs only a very small group of people get fabulously lucky and everybody else loses their money so if that's your goal that's what you seek to do where you want to go with all of this nine times out of ten you're probably going to end up broke just the gold prospectors in the 1840s and 1850s traveling to colorado traveling to california seeking silver and gold it's absolutely true a few of them did find it the vast majority of them did not and they ended up suffering because of it so if avarice is your goal i'm sorry cardano is probably the worst of all ecosystems to bet on because we look at things in long time horizons years to decades and we look at things that perhaps are not going to be beneficial to my company but to the people who come after because we know that if we get it right by 2050 2100 we can be a dominant financial operating system a protocol like tcpip that is ubiquitous and the majority of identity value and governance of the world is run in that particular respect and it's so unhealthy when people have such myopia and a short-term view on these types of things and unfortunately it's predominant throughout the entire ecosystem there are so many people in the bitcoin ecosystem who think that bitcoin is successful because it reached a trillion dollar market cap and i will give them credit that having a market cap up the scale of nation states like australia is a pretty impressive achievement but when you take stock of what does bitcoin provide to the world in terms of use and utility i cannot embed identity into transactions easily it's quite hard to do that without trusting a centralized overlay service i can't issue a token it doesn't really have good smart contracting capabilities i can't do complex financial contracts i can't do pull payments it takes a long time for transactions to settle and transaction fees are quite high so then you have to ask yourself if you are a nation state looking to run a governance as a service and parts of its economy why in god's name would you choose a platform like that and the argument is well it's real secure because we got proof of work we did the work as an ecosystem building a better engine we went from the steam engine that is proof of work decimating the forests of europe to nuclear power we built something different with proof of stake and we did the work 102 papers worth of work peer review at major venues to show that that engine is safe effective and real the response the bitcoin space has is it's not trust us we have this paper this andrew guy wrote and therefore you're wrong nothing on the merits nothing on the science that's like saying i see your nuclear reactor but i don't understand nuclear physics so i'm quite comfortable with my steam engine and that's a scam and i show them the energy output and they say that's not real energy ours is the real energy keep cutting down the trees why is bitcoin taken seriously even though it's the least advanced of all ecosystems it's because it's the most valuable so unfortunately token price tends to confer a level of legitimacy that it should not i i look at ergo i look at el grand i look at avalanche i look at a lot of these projects that are not in the top ten and i say they bring so much more to the table than some who are because the vision the team the capabilities and capacities of these systems are extraordinary and frankly speaking i think these systems over a long arc if they can stay alive and get adoption will be far more useful than the things that are currently in the top ten okay and so that's always been my opinion on the matter and i just think it's important because we have so many new people flooding into the cardano ecosystem because of our recent popularity and notoriety and the podcaster of the week making bold proclamations about getting rich quick that we make a video kind of talking about the difference between price and value as i see it now it's a decentralized ecosystem there are over 2 000 stake pool operators running at the moment making us more decentralized in my view than any other cryptocurrency there are over 16 000 people who are voting working day by day and catalyst getting those training wheels because very soon catalyst will consume the entire governance stack including system parameters and they're developing strong opinions on everything from k to a0 to minimum transaction fees resource consumption and these types of things okay so not only is it decentralized in terms of block production and network and resilience in terms of full node distribution and so forth but it's definitely decentralized and there's actual decision tools built into the system itself for the community to decide where to go and we as custodians what we've done tirelessly over the years has been very aggressively pushing to try to make those tools better if not in house then through partnerships the european union horizons 2020 grant that we got with ibm and guard time or partnerships with governance alive or other things we're bringing in accelerators and incubators and so forth and trying to bring people up it's a very different ecosystem that was even just a year ago when the stake pool pioneers were doing their job and that trend will continue but nowhere in that is there a mandate from my company or the foundation or someone else to find a way to get eta to two dollars or three dollars or four dollars or five dollars now being a decentralized ecosystem somebody may wake up and that's their goal okay and i'm saying right here right now i have no desire to work with that person i'm not going to talk to that person it's not my prerogative it's not something i think about or do and i don't participate in those conversations now i've gotten those emails usually from shady marketing firms that say oh well give us some money we'll create a telegram group and we'll do this and pump this up and i usually reply with something that came from my italian ancestors vaphanculo basically translates to go [ __ ] yourself but it's a very concise way of saying it in a very direct way of saying it and that's the end of the conversation now if you email me about an nft marketplace you email me about an oracle a dex stablecoin now we're talking that's real stuff that's really infrastructure and we'll actually have a business model meeting recently we had a meeting for example with the art tonno people the first meeting i said here's a class from coursera on business model canvases come back after you've taken it and they did a week later they came back and showed me a business model canvas i said that's a good start but there's a long way to go more to discuss come back in a bit we'll talk about it more offline and i'll talk to the other five people who've applied for catalyst funds for nft marketplaces because i think that's so fascinating and interesting and that's how i want to spend my time now whether it is a cent or it is a dollar or ten dollars let me be clear this is my life's work i'm gonna keep chipping away at it i'm gonna keep working at it we're here technically contractually we estimated five years it's 2021. five years was 20 20. i'm still here my dev teams cost me millions of dollars every single month to keep writing code and keep building for this ecosystem and we're going to keep doing it until we feel that we're at a position where the community can decide on the roadmap for 2025. right now we all kind of agree it's probably a good idea to get full peer-to-peer probably a good idea to get full smart contracts probably a good idea to have a sensible side chain model it's probably a good idea to have the community vote on all the system parameters and hard forks and be in control of the update system and so forth and that's all happening and likely will all get done this year and until it gets done that's my bill to bear and my burden to bear and i don't complain about it i'm happy about it but moving beyond that there's a very real conversation about what happens next where do we want to be in five years now i have a view about that but it's not my decision it's your decision the point of a great ecosystem the point of a great community the point of having all this investment in time and why ada is really worth as much as it is is the fact that there are actual people who aren't me who are qualified to make that decision the best thing satoshi ever did was get out of the picture for bitcoin and the best thing we can do is make sure that the vision for cardona 2025 is a community project and the collective intelligence converges to something far better than any one company can do so it's my job to make sure that the social dynamics the infrastructure and tools the level of participation the meaning of participation the quality of conversations are at a state where that actually happens otherwise you just have [ __ ] posting on reddit bitcoin cash versus bitcoin the big block debate and we'll see a cardano classic or cardonal cash and my life's work is for nothing and we'll stick around and make sure that that gets done and they ask well what happens after that where does charles go i'm still here and what'll happen is we'll likely be doing more work in 2023 and 2024 and 2025 than we're doing today but the totality of all the work being done is an order of magnitude or greater than what's being done today which means relative to the rest of the actors we actually have a smaller role and that's the point microsoft is a gargantuan company google is a gargantuan company the same for apple but even if you add all three of them together microsoft apple and google these three companies cannot speak for the internet they have a role they build web browsers they have collectively billions of users and certainly can have some influence over the way that you experience the internet but they certainly can't go and say tcp is done let's replace it with something else even if they wanted to they could spend 10 years trying as google has done was quick and they can make very little progress or what google is done with dart and make very little progress all things considered and that is the point of true decentralization and where we're trying to get this protocol in what is going to be maximally useful and only then after we've achieved that will we see nation states trust this protocol to a point where they're willing to entrust it with their voting system how long did it take for your local governments your cities your state government your federal government to get online did it happen in the 1980s did it happen in the 1990s it took some cases until the 2000s because they needed to know that there was enough stability proper governance and decentralization that this wasn't just the united states show this wasn't just microsoft show or netscape show or something like that this was something truly a public utility and good so our definition of success is that the ecosystem evolves and grows to that particular level now price is important in one dimension with proof of stake it is a plutocratic system and the higher the price the more secure the system so an unintended but beneficial side effect of the fact that we are in the top five is the fact that it does cost more than 17 billion dollars to attack cardano at the moment that's a beautiful armchair little way of analyzing things realizing that if a malicious adversary starts at zero and they need to accumulate a resource in the system to attack it in the proof of work world you measure that how much does that hash power cost to replicate in the proof of stake world just look at the token price so it is a nice armchair explicit metric for security and that's a beautiful way of looking at it and that's how i look at it now we can argue whether it's 50 percent or perhaps less and there are some beautiful pieces of theory that say perhaps it's smaller but you get the point it's some ratio of that capitalization and it makes some assumptions about economic incentives of the holders and so forth but then again they're like how much does the exchange hold and can they vote with it and can they stick with it and ra-ra-ra these are things for the game theorists and the protocol designers to think about and that's definitely part of the 2025 agenda is diversifying the security base to include merit above and beyond a plutocratic decision mechanism so that's kind of the proof of stake 2.

0 concept but you need to start somewhere and we feel that this is the best place and the most ecologically sound place in age of global warming in an age where you have systems that consume more electricity than switzerland it is nice to have a system that consumes 1.6 million times less power it just makes sense it's a better engine and it's more ecologically friendly engine but it comes with its own flaws and you have to think carefully about them and that's what we did throughout all the years so that's how i think about it to all you newcomers to the old comers there's nothing i've said here that's new to you you'll know that that's the way it is and to all those who try to boost the price i don't care about you the other thing is i've recently done a big surge of podcasts where i'm trying desperately to get out what we're trying to accomplish the dcf what smart contracts are really about what is a third generation cryptocurrency the goals of catalyst how people can productively contribute to the system that said i am going to become significantly more selective in podcasts moving forward so if your podcast predominantly talks about trading and price appreciation moving forward i'm going to turn down those interviews i just think it's the right thing to do if your podcast talks about use and utility adoption growth the actual use of the system solve real problems i'll continue to accept those podcasts i know that this means certain people that i and i enjoy having cocktails with and hanging out with i probably won't be on their show anymore but again yeah i think it at this stage in junction given where we're at as an ecosystem and the enormous amount of speculation that we've seen is probably not the right message and i had to think along and hard about this you'll notice when i appeared on those types of podcasts i never talked about the price i talked about use and utility but still the same it's important to separate messages and we've reached that point now that said it's an open ecosystem cardano's a big ecosystem and i think it is important that there be a diversity of thought and opinion and other leaders will materialize as there already are to discuss things that are of that nature but it's not my place and it's never been my place in that respect so i hope this provides some clarity to everybody i hope this provides some insight to everybody and i honestly do believe our best days are ahead of us in just a few short months plutus turns on four years of effort went into that we invented a new accounting model we wrote new programming languages we thought fundamentally how to be different and do things differently and now we get to share that labor of love with thousands of people and watch what they build i cannot wait it is honestly like christmas came early for me to see so many of those people go out there and go do some crazy amazing things wasn't too long ago that you had to download a third-party cell phone app to turn your cell phone camera into a flashlight and then the people at apple looked at that and said that's a really good idea we should probably build that into the operating system no one in apple had really thought about that capability prior to that application and that's the point of collective innovation and the fact that so many thousands of people are coming to build and bring new things new experiences it's going to be so much fun the other thing is that i'm in a unique position because i have such a large subscriber base and a large twitter feed to give a platform to all of these projects so instead of going on podcasts moving forward i am going to become the podcast moving forward so if you're building interesting projects on cardano and you're going through the catalyst process and we're going to open up incubators and accelerators to help you get where you need to go a lot of you my people will reach out to you and ask you to come on my show and i'll be able to interview you just i do people of iog and other things and give you an audience so that you can share your passion and love in a way that those broadcasters gave me an audience to share my passion and love so in the coming months the programming will change in that particular direction and i think that's going to be very healthy for all of us and help the ecosystem grow for all of us so i love the birds more coming as always i think you'll be quite happy and i think you'll be happy with the ecosystem as it matures and grows and remember holding it as a responsibility there's a lot to do you have a voice with that token unlike holding a bitcoin and you really get a chance to have an opinion on how the financial operating system of the world should evolve and grow and where should it go and if all you think about is it's a speculative investment or whatever maybe you really should consider going somewhere else because i'm probably not going to be able to give you something make you happy there are other people the trons of the world and so forth so that's what they do that's how they live that's how they view things i can't tell you the sweet little things you'd like to hear to make you sleep well at night but i can tell you that the road ahead is rough there's a lot of challenges there's going to be setbacks always are and there's going to be things that we never anticipated that we have to deal with and there are things that require a lot of really deep thought and sometimes that deep thought takes time we feel confident in the things we've said and projected but remember there's so much more to do and so many more places to go for example the ocean strategy with yellow just getting llvm support is the beginning not the end we have to figure out how to get the standard libraries of all these languages that work properly we have to figure out semantics-based compilation we have to write k-semantics for these languages there's so much there so over time it gets done but maybe that's five years maybe that's ten years for yella and that's okay that's the point of cardano and if that's not something appealing to you in your time horizon do understand that we're playing a different game in that respect than most cryptocurrencies i'm 33 years old despite the fact that i got a thick beard and white hair coming in i'm actually a young guy and one of these days i'll get in good shape and you guys will stop calling me a soy boy and what that means this means i'll live a long time and probably in my 50s and 60s and 70s and 80s i'll still be talking about this stuff and doing this stuff one of my personal heroes is ron paul it's why i became a cryptocurrency entrepreneur in part because of things i learned from him the lessons i learned from him one of the reasons i love ron paul so much despite the fact that he's in his 80s the things he said are exactly the same from the things he said in his 30s and i'm still going to be talking about economic identity in my 80s even though i started talking about it in my 20s that's what i signed up for that's the point in arc and meaning of my life and it's something that gives me excitement every single day i hope i've built an ecosystem compelling enough for you to find your same passion maybe it's not the same as mine maybe it's something else maybe you really care about gender equality or climate change or saving environments or getting clean water to people whatever that is almost all of the things that are worth fighting for in life involve money in the transfer of value they involve an economic problem you could care about global warming to solve it is in the trillions of dollars you could care about lean water somebody has to pay for the infrastructure to create it so while the acquisition of money is not the primary goal it's a tool that enables you to solve the passions that you care about even basic research basic sciences there's a reason the national science foundation excess there's a reason darpa exists these great organizations exist they exist to subsidize the research and pay for the time and effort of the brains to go and write the papers and if i've done my job right my belief is that cardano can be an engine for dreams it can be an engine for people to live out their passions the things that excite them fire them up and give them a foundation where they can get the resources that they need to get it done for their community for their passion and they can share the same life goals and that they can be doing the same things at 80 that they were doing at 20.