Getting Started in Crypto and Incentive Design

Historically, progress in the field of cryptography has had major consequences. It has changed the course of major wars, made it possible to do business on the internet, and enabled private communication between both law-abiding citizens and dangerous criminals. Could it have similarly significant consequences in future?

Today's guest — Vitalik Buterin — is world-famous as the lead developer of Ethereum, a successor to the cryptographic-currency Bitcoin, which added the capacity for smart contracts and decentralised organisations. Buterin first proposed Ethereum at the age of 20, and by the age of 23 its success had likely made him a billionaire.

At the same time, far from indulging hype about these so-called 'blockchain' technologies, he has been candid about the limited good accomplished by Bitcoin and other currencies developed using cryptographic tools — and the breakthroughs that will be needed before they can have a meaningful social impact. In his own words, *"blockchains as they currently exist are in many ways a joke, right?"*

But Buterin is not just a realist. He's also an idealist, who has been helping to advance big ideas for new social institutions that might help people better coordinate to pursue their shared goals.

Links to learn more, summary and full transcript.

By combining theories in economics and mechanism design with advances in cryptography, he has been pioneering the new interdiscriplinary field of 'cryptoeconomics'. Economist Tyler Cowen hasobserved that, "at 25, Vitalik appears to repeatedly rediscover important economics results from famous papers, without knowing about the papers at all."

Along with previous guest Glen Weyl, Buterin has helped develop a model for so-called 'quadratic funding', which in principle could transform the provision of 'public goods'. That is, goods that people benefit from whether they help pay for them or not.

Examples of goods that are fully or partially 'public goods' include sound decision-making in government, international peace, scientific advances, disease control, the existence of smart journalism, preventing climate change, deflecting asteroids headed to Earth, and the elimination of suffering. Their underprovision in part reflects the difficulty of getting people to pay for anything when they can instead free-ride on the efforts of others. Anything that could reduce this failure of coordination might transform the world.

But these and other related proposals face major hurdles. They're vulnerable to collusion, might be used to fund scams, and remain untested at a small scale — not to mention that anything with a square root sign in it is going to struggle to achieve societal legitimacy. Is the prize large enough to justify efforts to overcome these challenges?

In today's extensive three-hour interview, Buterin and I cover:

• What the blockchain has accomplished so far, and what it might achieve in the next decade;
• Why many social problems can be viewed as a coordination failure to provide a public good;
• Whether any of the ideas for decentralised social systems emerging from the blockchain community could really work;
• His view of 'effective altruism' and 'long-termism';
• Why he is optimistic about 'quadratic funding', but pessimistic about replacing existing voting with 'quadratic voting';
• Why humanity might have to abandon living in cities;
• And much more.

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The 80,000 Hours Podcast is produced by Keiran Harris.