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it's interesting because when usually people talk about consensus-
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they start with distributed systems and then they go into blockchain. but-
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... starting with the blockchain part of it and then realizing that this field of consensus research has been there for over 20, 30, 40 years.
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so a lot of cynthia dwork's work. and this was a very, very profound beginning of consensus in stronger adversarial models.
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... nodes would just go offline and online.
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so how did this field progress? and how did this capture people's interests over so many decades?
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... really impactful way has brought out technologies like zero-knowledge-
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... proofs. has brought research that people would do in probability-
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... or distributed systems back into the mainstream as something that's really-
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... really important. i think people back then researched it because it was definitely an interesting topic of study-
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but i definitely think blockchains have had a huge impact in reinvigorating this kind of research.
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the way i got into research was into consensus was through blockchains-
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so i started looking at different proof-of-work and proof-of-stake based blockchain protocols.
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so a lot of people might have heard of definity, of tendermint-
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... ethereum's new protocols, bitcoin. i would say the focus for mechanism labs has so far been on proof-of-stake. or proof-of-stake, proof-of-work-
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started out with proof-of-work. and one thing we saw as a huge problem was this huge energy and efficiency-
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i personally don't know if mining is long-term sustainable. and when you, in general, think of building a technology that is scalable across generations, across people, across countries-
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what are other externalities of such a technology?
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i think that mining, in and of itself-
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... is not necessarily any more efficient than today's economic systems or financial systems-
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... anything, it's probably going to make all the systems that we've built and optimized over the years more inefficient.
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i think we need to be building something that brings out long-term sustainability and probably is way more efficient than what we have today.
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... proof-of-stake. and i think proof-of-stake was put forward as one of the very earlier models that-
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... were long-term energy efficient. recently-
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these are all newer ideas and newer concepts. so that's why mechanism labs chose to focus on proof-of-stake.
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yeah. so i guess one way of thinking about any of these consensus mechanisms is when you really say consensus-
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... which is how do you prevent people from creating multiple identities?
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and the second part is, how do you actually come to agreement, but wean the people who have been chosen to come to agreement-
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... and when you say proof-of-stake or proof-of-work or proof of elapsed time or any of these other things-
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... you're essentially trying to have some sort of civil control mechanism. with proof-of-work that is by burning energy. with proof-of-stake-
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and i think each of these is just you're putting down a different resource to then select different people who would be part of the group that comes to-
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yeah. yeah. the actual part where people come to agreement is still-
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you have no concept of probabilistic finality.
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... goal is for all honest nodes to come to agreement on the same view of the network, versus in blockchains-
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... you have this concept of all the nodes may, with a high probability, come to a common agreement of what the network looks like.
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yeah. so these are the traditional ways of coming to consensus. what bitcoin uses-
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... and each of these, the reason i call them probabilistic consensus is because of china and-
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... is secretly mining the longest proof-of-work chain-
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the moment that they come out with the longest chain-
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... or that gets discarded, versus in traditional consensus-
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yeah. and i think the other interesting part, though-
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it obviously depends on what sort of pairing any blockchain consensus uses. like it-
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... depends on what rule they use to come to agreement. but-
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... with bitcoin, you have this ability for anyone in the world to be part of the bitcoin mining community to join and suddenly join the-
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and this idea of permission-less is something that blockchains have enabled and-
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and in order to have these additional properties, you have to trade off some things-
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but there's also got to be some inefficiency that's introduced by having node churn by [inaudible 00:09:31] who is constantly dynamic and-
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... decentralized systems are way less efficient than centralized systems.
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... every block, you have a new committee. churn definitely has its disadvantages.
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but one huge advantage that i see a blockchain as a technology is that it's there. it-
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so you don't necessarily need a blockchain to be the most efficient application.
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and in a sense, having the ability to manage a huge number of people who want to join and leave-
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i think is really impactful because it provides a large number of people to keep the system up.
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yeah, i definitely think even in building out the dream of block-
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blockchains, we can build a more optimized-
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exactly, and also, i don't know if bitcoin would be long term sustainable and would be a certain fallback.
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especially if mining itself is not something which everyone can do and is-
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proof of stake seems like a really interesting concept.
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so could you define proof of stake and differentiate it to proof of work?
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to be part of the consensus of that network.
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you're incentivized to act in an honest manner in order to have the value of your coins appreciate or-
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if you act dishonestly, the value of your coins go down. versus in proof of work-
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[inaudible 00:01:17] or at least that was satoshi's idea, but-
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yeah, i guess the broad categorization that a lot of people use is chain based or bft based.
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pbft stands for practical byzantine fault tolerance.
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it's almost like a curiosity that had these kind of very niche.
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applications where it might have been extremely valuable and it's only just now that they've suddenly found this highly financialized purpose that achieved all of this renown.
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i would definitely say that was quite the case.
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just like if you look at other cryptography or other research that was going on, zero knowledge proof-
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if i'm not mistaken, and it's only very recently that the applications of it are coming to light.
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was the different types of proof of stake protocols.
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yeah.that from memory, i think that was the first proof of stake consensus protocol.
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yeah, so we definitely did not include them in our analysis.
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it seemed a lot more primitive and there definitely was a larger possibility of attacks on those early protocols. like the idea of stake grinding attacks where a minor could-
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basically go back in time and try different possibilities of what block would give him the chance to be the block creator for the next round.
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seemed to be a huge attack vector on these early protocols.
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and that was a huge problem with these early protocols.
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and so this is what was happening in 2014 then.
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that's one of the reasons we didn't choose to include them in the analysis.
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and they gave rise to different protocols that we see today.
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like affinity, and tendermint, and thunderella, and all these really cool projects-
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but there were these really obvious and blaring attacks that definitely didn't seem any more sustainable than bitcoin. if-
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casper, like ethereums, caspers, thunderella, and these are definitely some examples of the newer generation of protocols.
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it's really cool. they use threshold relay and they use this decentralized way of creating randomness.
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and then you have like tendermint, which basically doesn't use randomness at all.
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[inaudible 00:03:37] all these use some really clever like randomist generation to prevent stake grinding attacks.
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[inaudible 00:03:44] cannot cause finality to break in the protocol, but-
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for example, in tendermint you can have at most a third being malicious.
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if you have less than a third of the stakeholders or a third of the voting power malicious.
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or malicious, then even those 10%.
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if you threaten people saying that i have 10% of-
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mining power, i will not mine on top of your chain.
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that in and of itself is incentive enough to prevent someone from mining on top of a chain that includes arthur's block. so no one will want to include arthur's-
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it's a kind of pothole to break your ankle as you go down this road-
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definitely. and i think what makes it harder is the fact that you have layers upon layers of complexity. you have-
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bringing in this blockchain component, which requires civil control mechanisms, in order to have this trend component. and when you compose all of these different things together, it-
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it's not just the security of individual components, which is important.
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i definitely see proof of stake as a way of both combining this reward distribution mechanism and the incentives around that.
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that's kind of separated out where the coin itself is different.
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that's been quite challenging because, one, it's hard to get this combination of both economic security along with cryptographic and distributed system security.
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