Joseph Lubin

ConsenSys – The Distributed Incubator which Jumpstarted the Ethereum Ecosystem

We’re joined by Joseph Lubin, Founder and CEO of ConsenSys. Joseph founded ConsenSys as an Ethereum development studio on the heels of the Ethereum crowd sale in 2014. The company has since grown to a distributed organization of over 1,000 people. Over 50 companies and projects have emerged from ConsenSys, including Metamask, uPort, Gnosis, and GitCoin, to name only a few. Today, the company continues to invest in growing the Ethereum ecosystem by funding projects, and through consulting services for companies and institutions.

Topics we discussed in this episode
  • Joseph’s background working as a technologist in the financial industry
  • How he discovered Bitcoin in 2011
  • What lead Joseph to meet Vitalik Buterin and the founding Ethereum team
  • How he founded ConsenSys and the company’s vision
  • The company’s impressive growth and output
  • The recent round of layoffs at ConsenSys
  • How he thinks blockchain can change the world for the better
  • His advice to companies feeling the pressure of the current bear market
  • Joseph visiton for the future of ConsenSys and Ethereum
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Transcript

Sebastien Couture:  Hi welcome to the Epicenter. My name is Sebastian Couture.

Brian Fabian Crain:  And my name is Brian Fabian Crain. This is a very special day today because it’s been more than five years now that we started Epicenter. And we’ve done this show every single week since then. Such a long time.  Five years of course is long even in the normal world but in the block chain world. It’s like an eternity.

Sebastien:  Yeah. So last week. So this is coming out the week of January 7th. On on January 4th we celebrated five years. January 4th 2014 was the day that we released our very first episode which was our predictions for 2014. I went through it actually I kind of listened to it a little bit and there are some pretty interesting things in there.

I think somethings we were also really just totally wrong about ended up being totally wrong about how the space evolved. But yeah I mean five years is like an incredibly long time. And I think one of the things that stands out the most to me is the fact that we’ve kept doing this consistently for five years. Like I’ve never done anything in my life I think this consistently for this long amount of time and had I considered it back then I don’t think I would’ve thought that five years from now it’d still be doing this.

Brian:  Yeah I think if you had told me okay every single week for the next you know five years you’ll have to put out an episode that would have been very daunting. But of course that speaks also to you know what has made it possible which is you know more people than just the two of us work on Epicenter right so obviously there’s the new host that came on as Meher in 2015. And then there was Sunny and now Friederike. Right. So they’ve been essential for us to produce an interview every week. And then of course we have also the team you know from audio with Vedran, Shinoj doing the covers, Ola who has been helping with social media to like and Anna doing some accounting and finance work to Peta who is helping with scheduling. So of course all of these people have been essential that we’ve been able to actually do this consistently .

Sebastien:  And so if you want to learn more about what we’ve been up to this last year and and discover the team we posted an article on our Medium on medium.com/ epicenterpodcast, you can find the article there there’s lots of great pictures and you know interesting stats about the podcasts these past years. I think another thing also that has kept us going is obviously the people who listen to the show. I think even in the moments where I’ve had a bit of a lull and I felt like maybe I don’t want to do this anymore or you know this does get kind of a bit repetitive after a while, I feel like I I have this commitment to people who listen to us to keep doing the podcast like that’s the reason why I want to keep doing it. Well one of the reasons I want to keep doing it is because I know that there are people who find it very valuable and who appreciate it and meeting those people all through the years has been just absolutely gratifying. Going to events and conferences having people come up to you and tell you how much they love the show how much they appreciate it and how much they have learned from this podcast has been I think one of the most gratifying things in most of my life.

Brian:  Yeah no I agree. Absolutely. And the other thing that stands out when you think of all of this long time and all of these interviews that you’ve done is just how vibrant the space is and how diverse and how much activity but when people outside of the blockchain space sometimes I would tell about this podcast and they are like but don’t you run out of things to talk about.

Sebastien:  People say that all the time.

Brian:  Yeah and of course not at all. Right there is far more topics and interesting projects that we could cover than we have a chance to write all the time you’re like you have so many potentials or people that want to be on the podcast and you have to choose just the ones so we think are best. And yes so that’s I think that’s also just an incredible testament to the space and and also what’s noteworthy here is the evolution it’s gone through. So when we started it was called Epicenter Bitcoin, so those have been around for a long time and they probably remember that and now even in the beginning we didn’t really think it was just Bitcoin. There was some other things I actually did here in white paper had just been written about when we started. So I think one of our first episodes was when we spoke about the term white paper. And so even in the beginning we were speaking about other things too but back then people still thought of it as the Bitcoin space right. And the term blockchain didn’t even exist or maybe it existed but nobody used it so I think this diversity of the space just keeps getting bigger and bigger and more you know kind of like a fractal going all direction is also an amazing thing.

Sebastien:  Yeah I think that’s probably one of the things also that has surprised me more about the space since starting this podcast is I never imagined, thinking back then, that. the space would become such a diverse set of communities and that keeps growing. I mean it started sort of as the Bitcoin community and an Ethereum came and then other projects came along and some have. Some have died others have flourished. But now we have a vibrant ecosystem where you know a lot of the big networks have their own communities their own conferences and the interactions between those communities is really great. And there’s also some some rivalries I guess as in any community. But but globally I think like things have turned out much more positively than I would have imagined back then I mean the growth has been just absolutely phenomenal.

Brian:  Yeah. So next week we want to do an episode to sort of commemorate that which will be all of us hosts, most of us hosts at least. And we’ll also be taking some questions from you. So if want to have anything that we answer or discuss in the show then let us know about that. Submit those questions to us and we will try to get to it so you can either tweet at us at our Twitter or then there’s also going to be a Reddit post.

Sebastien:  Yeah. So we will post a Reddit MA on our sub Reddit. That doesn’t have a lot of subscribers at the moment. It’s something we launched just recently. But the post will be there. So it’s Reddit.com/r/epicenter podcast. And the Reddit post we’ll be there so you can ask questions you can upvote on questions and also you can send us your questions on Twitter obviously and we will answer most of those questions in an episode coming up probably next week in the next couple weeks. Yeah. So look forward to that as well.

Brian:  Oh cool. Then let’s here’s to another great five years.

Sebastien:  Yeah. I mean who knows maybe we’ll be here again and in five years. I guess time will tell if that will continue to happen for next five years. I think if it does if it does happen then we’re here for the next five years. I think the show again will probably very different in five years than what it is now. Hopefully we’ll be with a much bigger audience.

Also I want to mention one thing we didn’t talk about before is just how much we appreciate our sponsors as well and those companies that have supported us throughout the years. They have also evolved into this. You know we had some sponsors in the beginning and now you know much different sponsors but nonetheless all the companies that have helped us over the past. We would like to thank you so much for your support.

So to this week’s episode. So this week we talked with Joe Lubin who is the CEO of ConsenSys and I did this episode with Friederike and we talked with Joe for a good hour about the history of ConsenSys, the vision and also the broader Ethereum ecosystem and got really insightful information about that you know sort of like got to pick his brains about but the ecosystem as a whole. So hope you like that episode. And just one disclaimer. Joe Lubin is on the board of Gnosis where of course Friederike is the COO. So just thought we would mention that before before the episode. So here’s our episode with Joe Lubin of ConsenSys.

Friederike Ernst:  We’re here with Joe Lupin. And Joe is the co-founder of Ethereum and the founder of ConsenSys. And we’re here to talk about the state of ConsenSys and the state of the ecosystem and where it’s going.

Joe, so you’ve switched gears in your professional life a number of times. Can you give us a short overview of what you did before you first heard about blockchain technology.

Joseph Lubin:  Hello. Thanks for having me. Short overview of my very long life. So I academically did computer science and electrical engineering. I was an athlete in college so I actually played for a very short while on the professional squash tour and spent time sort of driving around to different tournaments and ended up at my college and ran into a Professor of Operations Research Civil Engineering there and he essentially offered me a job doing some research. So that kicked off about 10 years of work that I did in robotics machine vision and in and neural nets basically different forms of life but mostly neural nets. And that led to some work in automated music composition using similar techniques. We built a composer that made some really good music and made some really bad music. I was in the context of a music studio company that got paid for creating music for different kinds of publications.

Got much more general after that. Just general software engineering. My last sort of big software engineering gig was a project at Goldman Sachs where I was on the I.T. side of private wealth management working with different groups across private wealth management and that essentially introduced me to the world of finance.

And after that I was in the right place right time a friend of mine brought me in to help build out back office functions. He was running a strategy, a money making strategy with a wealthy family and he wanted to start a hedge fund and he needed a partner and so that all evolved into a successful business and was essentially my introduction to the world of finance. So I ended up building different kinds of trading systems and learning how that world of finance, the world of geopolitics worked, where before I really hadn’t paid much attention to it I was mostly interested in the technology.

So with that background some technology actually a lot of technology and a decent amount of finance. I became aware of what I felt were concerns about how the global financial system was operating and different issues geopolitically and I think that background made the Satoshi a white paper immediately stick with me.

Sebastien:  You think that having a background in finance and technology is sort of like the sweet spot for someone entering the blockchain space in circa 2013/2014. Is there not a better combination of skill sets to be successful in this space.

Joseph:  I think it’s pretty common in terms of people that I know who have similar backgrounds who because of those backgrounds resonated with the ideas. But moving forward just a little bit as it becomes more apparent what these decentralized protocols can evolve into and can support for society I think it’s pretty much everything. So it’s currently drawing people of all interests.

Friederike:  So when did you first hear about Bitcoin.

Joseph:  So very early 2011. So there were I’m not sure if it was late 2010 I know there were one or two Slashdot appearances that I paid slight attention to but they didn’t drive me to to read the white paper sometime early in 2011. I finally said I should read this.

Friederike:  And that’s when you realized that this was going to be a game changer.

Joseph:  Yeah. The white paper itself hit me pretty hard. So yes I thought essentially, I know I’ve said this publicly before but I was concerned, depressed about the state of the world I felt like we were in a cascading collapse. I feel like we are still in a cascading collapse. I feel like we’re possibly even in worse shape right now. And back then central banks still had some dry powder. Right now central banks have less dry powder. So my feeling was that we were essentially at the end of life of a different monetary systems and there was so much debt in the system that could not be repaid and the interest would keep accumulating. And essentially there would be two likely outcomes one would be a slow cascading collapse where growth globally would be quite slow for a couple of decades maybe or some sort of non-linear event some sort of contagion where everything is pretty awful for a while.

At that point a lot of people were waking up to that fact will live in our little bubble so is aware of lots of people waking up to that fact and reading about that stuff confirming my bias. So we say. But there were people trying to occupy everything to get the word out that something is amiss. And when I read Satoshi’s paper I realized that it may not be so hopeless that we might instead of occupying everything and exiting society we might be able to build alternative systems and create better foundations for better systems built on top of them. My hope was sort of flipped from being unhappy that central banks had with quantitative easing caused so much devaluation of currencies around the world in a sort of spiral to zero. My feeling was hey maybe they should keep doing that for a while and hopefully they can kick the can down the road for 10 years or so and give us some breathing room to start building alternative systems and back then I and many others were so naive we thought Bitcoin was kind of all we need it was can be the foundation of everything. You could build everything on top of that. And now Bitcoin is an awesome system and it’s going to keep developing but it’s not really easy to build versatile software on top of it.

Sebastien:  So when you first came into this in 2011 and so like we’ll get to Ethereum in a second, but what were you doing between 2011 to basically since like when you met Vitalik was. Were you working on any projects. Or were you still working at Goldman Sachs?

Joseph:  No that was way after Goldman Sachs. So I was doing trading at built trading systems. And I was from pretty much all of that time I was living in Jamaica. So I was spending time there kind of playing around in the music industry. A friend of mine wanted to build out a music career.

Sebastien:  And tell us about what led you to meet Vitalik. I mean you guys are both from Toronto. How did that occur?

Joseph:  So December 2013 I went back over Christmas to visit my family as I often did and there was I think this thing called the Global Bitcoin Alliance. There was the Bitcoin Foundation which I wasn’t too impressed with. And I think many people were not so impressed with it. But this guy Anthony D’Oreo was trying to take a different approach as sort of grassroots bottom up approach to bringing people who cared about Bitcoin together. I think there was a Canadian version of it and I think he was trying to put together a global version of it and seemed like a much healthier approach to do it bottom up than to declare that you’re the head of Bitcoin and with that foundation. And so I just hadn’t really, since 2011, I’d read pretty much everything about Bitcoin and the blockchain ecosystem master plan etc, but I wasn’t really very active I was mostly living in Jamaica so I wasn’t really very active in the community and I reached out to Anthony and said hi and he said that there was a meetup happening January 1st 2014, with Vitalik Buterin, who I’d read a lot of articles from through Bitcoin Magazine was he owned at the time and I was yeah I think I knew that he was very young before I spoke to Anthony but I was astonished when I found out how young he was because he such a clear writer. So he said Vitalik has this new white paper, a bunch of us are going to get together you know to talk about it, come by the meet up. So I did and spent a little time with Vitalki, he sent me the the paper that night ,read it that night and a lot of people were excited about it. So I like many of those people stayed close to the project.

It was mostly meet ups and Skype discussions at that point and towards the end of that month January Anthony got a house in Miami in advance of the North American Bitcoin Conference, I think he may have invited like nine or 10 people, and I was one of those people and I stayed very close to the project over that time and so I was very interested in doing whatever I could to make Ethereum happen. And so we we kind of constructed the first phase of or maybe it’s the second phase of the core group that that brought that project to life in the several days before the North American Bitcoin Conference at which Vitalik essentially delivered his white paper.

Friederike:  So the Ethereum founders group is quite an eclectic bunch right. I mean there’s so many people who have very different skills and very strong skill sets. So what was what was it that you brought to the table that you contributed to the project?

Joseph:  So I was a software engineer for a long time but at that point I hadn’t been a software engineer for ten or so years. I dabbled a little bit in mathematics and other things, MT4 building trading systems but obviously have a fairly strong background in computer science. So we did a lot of conceptual work back then thinking about what Ether was thinking about what gas was, should we burn gas. What should be the the issuance model. So I was involved in a bunch of that early on and I guess because I probably had more experience in business than others ended up driving a lot of the discussions with lawyers around the token launch.

So we essentially took that opportunity to tell the world what Ethereum was and what ether was and what gas was because it was just computer science really at that point and in order to help the world understand what we thought it could be, ways that these constructs could be interpreted we worked with a prestigious law firm in New York and essentially got an opinion about what our token launch was and essentially had to define all those things, had to define what ether was had to define what gas was and essentially convinced the lawyers and convinced ourselves that according to the Howie test we were not selling a security an unregistered security potentially to Americans but we were selling this consumer utility token that people could use to run programs on a world computer store data on a world computer and that their fates would significantly be independent of the fates of the Ethereum foundation and the Ethereum founders.

Sebastien:  What were lawyers’ reactions when you were first bringing up this idea of Ethereum and and then even even more I guess perhaps crazy in our minds like raising money on this platform. What were their reactions like?

Joseph:  Lawyers are generally pretty happy to take your money for exploring different and hopefully complex things. But these people that we worked with at Pryor Cashman were already pretty savvy. So they were already significantly aware of the Bitcoin space and really great smart guys. It was a pleasure to work with them and they were really excited about the project I think. I think they’ve said it explicitly but I’m pretty sure they enjoyed that project quite a lot more than your average project.

Friederike:  Did you have any doubt at the time, so basically if now four years on you know where Ethereum is and you could have told that to your former self. Would you have been relieved or would you have been disappointed?

Joseph:  Not relieved, delighted obviously. If I have doubts I have sort of judged something and choose not to do it I’m not a very doubt ridden person. If I see that something can be done I’m usually pretty clear that there are an infinite number of pathways that we could take to get it done. And essentially I and I hope the people around me just put our heads down and get it done so that I mean there wasn’t much doubt in my mind that these technologies were so profound that they would have extreme transformational effect on human life going forward unless something really weird happened like some sort of asteroid set us back too much. But these are great ideas. They were out of the bag. Nobody is going to be able to stuff them back into the bag and so I was quite confident that it was almost an engineering problem. At that point a lot of us could see it. A lot of us could sketch the the early possibilities. Dropbox. Creating tokens in a few lines of code and it’s easy to imagine building societal infrastructure over time in layers upon that sort of foundation.

Friederike:  Have you talked to the lawyer since. So I mean you said that…

Joseph:  Two dinners, a couple dinners in a small number of places.

Friederike:  So basically you guys tried to construct the Ethereum such that it wouldn’t be a security and the SEC has since…

Joseph:  We did construct it so that it would not be secure.

Friederike:  Yeah I mean basically if you read the SEC memos it seems that they’re saying that Ether used to be a security and now it’s not anymore.

Joseph:  No they didn’t say that. They said that without opining about whether it was ever a security or not, we do not consider it a security.

Friederike:  Now. Ok so I think that there are different ways to read that. But I mean it all ended well. Okay so the next stage was after Ethereum had launched and the token sale had commenced you founded ConsenSys right in October 2014?

Joseph:  Yeah. Really kicked off in earnest in early 2015. But yeah.

Friederike:  So what was the ConsenSys vision back then?

Joseph:  It wasn’t too dissimilar from what we were thinking about on the Ethereum project and with the Ethereum Foundation we had notions that that group of people would build for profit projects and companies. And once we finished say version one of the platform and released it into the world. Gifted it into the world and put it under a foundation for future shepherding, didn’t work out that way. It became clear eventually that we should just focus on the open source non-profit situation the open source platform and that was definitely Vitalik’s preference although early on he early on we were all open to the notion that it would be a hybrid nonprofit for profit thing but it was too complicated to make that work. And essentially we all agreed that because we had these shared overarching goals even if we might have some difficulties as any project team might we would keep it together and achieve the goals in front of us and we got that done and the different people have in some cases gone in different directions and for many of us are still significantly involved in the Ethereum ecosystem.

Sebastien:  So you mentioned you founded ConsenSys, things started happening in early 2015. Can you describe what things were like back then. I mean the Ethereum ecosystem was very nascent. There weren’t that many projects. What what was it like sort of starting ConsenSys in that context.

Joseph:  Yeah. So I’ve described it as let’s start a company, build software applications on a platform that isn’t yet released with no developer tools in an ecosystem that doesn’t yet really exist. And so that’s roughly what it was like. So we started out building things like a little accounting tool and app store and the people who were building stuff realized that we needed some tools to build better. And so Tim Couture built a whole bunch of scripts when he was developing DAP store and turn those scripts over quite a bit of time with lots of help and effort on his own part into the truffle suite of developer tools.

One of the individuals who is working on our accounting system Balanc3 ended up having strong ideas about identity and built up quite a large team around that to build out uPort and now Three Box and Aaron Davi was working on Metamask and was in a situation where it sort of made sense for him to leave that and the ConsenSys was very excited and happy to support that project. Ethereum is a project that essentially started as a consolidation of internal ConsenSys efforts at building a bunch of different test nets for our different projects and some amazing engineers put some organization to that and a few months later decided that we should make it available to the Ethereum ecosystem and it has been available at essentially no expense to the ecosystem for a long time. And so don’t really know what it’s going to take to bootstrap technology ecosystem that’s different from what’s been built before and so organically we kind of just built what we needed and even token launches sort of came out of that. One of the earliest token launches was a project called Gnosis, an absolutely brilliant project and it turned singular and a few others started to get a lot of people thinking about essentially the first killer application on Ethereum.

Friederike:  Do you have a sense of how many projects in total were started within ConsenSys?

Joseph:  So we have around 50 projects running right now. We’ve invested in over 40. And there are a bunch of projects that have been discontinued for various reasons so I could look at a list of probably over significantly over 100 projects have been started at ConsenSys and many of those continue.

Sebastien:  So when you started the ConsenSys and I mean obviously the team grew to now being one of the largest if not the largest team. I mean I guess you know if you’re counting all of the projects in ConsenSys, the largest team in the ecosystem did you foresee that you would grow this company to you know over 1000 people in just over four years or something like that?

Joseph:  So it wasn’t intentional it was a responsive or reactive. As I indicated before organically we built what we needed to build and we developed the ability to look at different projects and if the projects were cool or potentially valuable then we would greenlight lots of those projects. It was a phase in our ecosystem, a period in our ecosystem where it was about exploration and demonstration. It was as I’ve written now somewhat publicly, it was okay to just show up and do something cool and make a splash because we were trying to explain to the world what this technology is how it works and why it might be really interesting for building systems going forward. And I think we’ve been very successful in that and extremely proud of the projects that we shut down but learned a ton from. The projects that are still going and have a life of their own some of which have externalized out of ConsenSys. And I think for that phase we were exactly what we should have been.

And as we recognized that we now have an ecosystem, a real thriving business ecosystem similar to previous ecosystems like database ecosystems and browser ecosystems and mobile phone game console ecosystems. We now have to be a more competitive more rigorously structured and functioning company and essentially other entities are streaming into our ecosystem validating what our hypotheses were and now we have to compete with them and we’re pretty excited about that phase.

Sebastien:  This kind of brings us to the next topic which is the round of layoffs at ConsenSys now I believe a 13 or 14 percent something around that has already left the company. The spokes for the most part are being spun off into entities of their own and the company is downsizing correct.

Joseph:  Journalists tend to write things to get a readership to get listeners. And often they don’t really concern themselves too much with the facts. So there was a great sense of sensationalism and exaggeration. We did look at different groups in solutions in HR and community in some other spaces within ConsenSys and we streamlined. We essentially removed a bunch of job functions that didn’t make sense for ConsenSys 2.0 and maybe we’ll rebuild some of that going forward but we need to be a leaner company and spokes spun out of ConsenSys since the start that’s essentially been the plan.

We have essentially a pipeline where many spokes can stay within consensus. If they’re doing great work for quite a long time and be well supported. Other spokes prefer to go it on their own and you know choose to leave ConsenSys. We are going to move from what I would consider to be an opportunistic model to something that’s much more structured and this is something that has been in design for close to a year now.

Sebastien:  How much of this is linked to the the state of the market right now. I mean other companies also are laying off people. Surely there must be some component in that.

Joseph:  Yeah definitely accelerated by the drop in price in our ecosystem by the contraction in our ecosystem. But again it’s about us getting much more structured about how we form spokes how we invest in spokes and how we move them through what we’re thinking of as a pipeline where they essentially get involved with other VCs towards the end of that pipeline.

Friederike:  When you think back at ConsenSys 1.0 now are there things that you would have done differently could you do it all over again?

Joseph:  I don’t really think that way. I think if there are any mistakes that we’ve made and I’m sure there were many many mistakes. Those are just things to learn from. There’s no way to in my opinion plot a perfect path through a complex domain. You have to bump into stuff and learn and get better. So I just things don’t pop to mind about you know what big thing we did wrong that we should have done differently. It’s gone remarkably well so far in my opinion.

Sebastien:  Are there any mistakes that you you think you can think of that perhaps in hindsight now you can you can you can in fact learn from it in this time.

Joseph:  So nothing is coming to mind right now. And you know we could have taken different pathways in our ecosystem we could have moved faster at the protocol level. Perhaps the biggest mistake that wasn’t really a mistake was that ConsenSys didn’t spend a lot more time building a team focusing on Ethereum protocol level activities. We sort of expected that the ecosystem would develop Ethereum 2.0 more quickly and layer two technologies more quickly and we were focusing perhaps too much at the application layer. And we have, starting maybe 18 months ago we started to correct that. We have essentially built something called Pegasus protocol engineering and systems team. And I think we’re around 60 people that are building out the Pantheon client and doing work on Quorum and doing work on different site chain mechanisms and layer two mechanisms and lots of RND on Ethereum 2.0 stuff and Ethereum 1.x work and our Enfour team has actually been driving some of that stuff as well.

Friederike:  Are these things that you would have hoped the Ethereum Foundation was going to tackle?

Joseph:  What a mean question. Yes. So the foundation is good at shepherding research at setting up grants. Now they employ some important people in our ecosystem and Vitalik is doing an absolutely astounding job on the technical side of driving the most capable platform forward. And it’s a complicated endeavor. It’s really complicated to try to stay neutral. Which I think makes a lot of sense for the foundation and yet still drive the technology well and quickly. I think Vitalik has chosen a good balance and I think in the context of so many mean and clueless people on the internet who attack a brilliant young man, he’s made some great choices. He has done what he can to try to decentralize the process more.

It’s already quite a decentralized process it always has been I’ve been very comfortable with that. And you know what, he leads by doing. He leads by example. He never tells anybody what to do. So I’m happy with the with the foundation and the foundation itself is evolving. So it’s opening up much more in that. So it’s great to see that the foundation and the ECF are putting bounties out on Bitcoin and trying to further decentralize development and Consensys and Pegasus are really happy to be one of the many teams that are building their clients. I think there are like 10 or so teams at this point and so collaboration was quite good early on but I haven’t seen this much warm friendly excited collaboration where lots of people are meeting in different parts of the world every few months and getting on calls every week. And really it’s moving really fast right now. So exciting to see. I do think the timelines for Ethereum 2.0 are contracting right now. People are building Ethereum 2.0 as we speak.

Friederike:  As a follow on from this, ConsenSys during the last four years has changed considerably from ConsenSys 1 to ConsenSys 2. So you said that the vision has kind of stayed the same.

Joseph:  We are at 1.2 right now.

Friederike:  OK. So yeah. So it basically it’s a process right. Where do you see ConsenSys going. Do you think ConsenSys is going to be a thing in 20 years time?

Joseph:  So as you are significantly aware and people that you work with are quite aware ConsenSys has really been many companies it’s gone through many iterations since it was essentially birthed in New York City in 2014. So we started as a venture production studio. We thought we would build some MVPs and wrap companies around them and bring in venture investment to grow them and started getting calls from different companies and governments and central banks even to explain this Ethereum thing and involved a consulting practice from there and we’d seen synergies between the consulting practice and the venture production studio and we built an academy and we started doing different capital markets activities so we’ve really evolved through several stages already. ConsenSys 2.0 is going to be a lot like ConsenSys 1.0. We’ll still embrace experimentation but there will be much more rigour in how we move spokes through the company and we’re already starting to we’re seeing pretty great traction on the solutions, the consulting side of things and we’ll see many solutions projects use many of our components and components from the Ethereum ecosystem, things like Maker DAI, Paragon as we’re starting to see essentially convergence in the many things that we ConsenSys are doing in the many things that people in the ecosystem are doing where we can all start to use each other’s stuff to build more complex solutions to bigger problems. So it’s kind of streamlined and better version of what we’re doing, less about doing something fun and cool and more about doing things that are genuinely valuable to people out in the world.

20 from now, nobody has a shot at making predictions about 20 years from now unless they’re really macro predictions. So if it’s a macro prediction then hopefully the world moves towards a more decentralized protocols rather than centralized siloed systems. Politically unfortunately it doesn’t seem like we’re moving in that direction right now but hopefully clearer heads will prevail and protocol based open platforms are incredibly valuable for enabling more people to access more value very inexpensively. So if you set up a platform for the music industry for instance and enabling content creators to directly access their consumers with the little intermediation or right sized intermediation then think you have a context in that industry and many other industries where more people have greater agency and more ability to make a living. So hopefully intermediation around the world gets right sized in the banking industry and the insurance industry and the ridesharing industry etc intermediaries are great, but they often extract too much value from transaction flows in these kinds of systems I believe will enable us to have very thin intermediation layers.

Friederike:  So you have said many times before that you think blockchain is going to make the world better and you just said that disintermediation is going to be a good thing. Do you think if you had to specify a metric which you use by which to showcase the word with blockchain is actually better than a word without blockchain, would it be the disintermediation or would it be something else?

Joseph:  Probably moving towards decentralization, disintermediation is part of that. So decentralization can imply that I’m in control of my identity that I’m in control of my personal information that I’m not being treated as a product that I’m not being exploited that people aren’t keeping information from me that might be valuable for me to make my own best decisions. I think smarter people than I will have to put metrics to all of that. But certainly those two elements disintermediation and decentralization go hand-in-hand I believe.

And I think there will be divisions within the science of crypto economics that explore those things.

Sebastien:  In the current state of the ecosystem there is an entire spectrum of technologies and I guess more accurately implementations of this technologies, so on one end of the spectrum we have something like Ethereum which is actually quite decentralized. But you know the polka dots the cosmos the bitcoin etc in the same category, and on the other side of that well we have permissioned networks, so consortium networks that are mounted by banks, insurance companies you know companies in the supply chain space etc and others which we don’t really know about but some of them we do because most of them are sort of kept behind closed doors and serve a specific purpose. And then there’s perhaps some solutions in between moving forward and sort of in the next year or two years and perhaps even further to 10 and 20 years, what do you see the ecosystem looking like. Do you think that things will go either one way or another or do you see a more of a multitude of solutions working together. What’s your take on that?

Joseph:  Sure. So for a lot of people blockchain technology, decentralizing technology has become a religion has become tribal and my perspective is I think more pragmatic. We are running a company set of companies that are trying to figure out valuable solutions either for consumers or for corporate entities or other kinds of organizations and essentially I believe one should use technology that is appropriate for the use case. So in a context where you have a consortium it might make sense to build a private permission block chain solution so that they can all trust one another more. One advantage of that is that once they see the value of decentralizing technology they might move further and further down that pathway as it gets more proven and in common.

The decentralized protocols are not sufficiently scalable at this point they don’t have sufficient privacy and confidentiality at this point or that so those activities or technologies are nascent. And so I can absolutely imagine an Ethereum or similar platform being public and permission less at its base while different systems built on top of that are are private and permissioned. So just like companies moved from their own internal data centers to the cloud as they got more and more comfortable with that technology I think we’re going to see the same thing because I think we can build a better fairer systems on decentralized technologies with decentralized compute and storage and in bandwidth.

Sebastien:  I think the cloud is a really great analogy and I think similarly we might look at something like all of the companies that were running corporate intranets in the 90s and how progressively they moved on to the public Internet and now using cloud services and Salesforce or whatever. So if you look at those examples of the past right on like about how how companies went from experimenting with new technology and and moving to something that was more robust more cost efficient was better off for everyone. What are the steps that one can take in the blockchain space to say get a company like a bank or consortium of banks to start moving towards that more decentralized model?

Joseph:  We’ll build something for or with them that they appreciate. So a consortium or a supply chain can be somewhat closed for a while. But when you’re putting real financial assets on block chains you simply can’t have those financial assets on private permission block chain so that they’re not gonna be able to serve the world very well. They may serve a very limited context. So when you’re putting crypto currencies or other kinds of crypto assets like bonds and equities and derivatives on a block chain system that has to be a radically decentralized system. Otherwise you’re going to have collusion or censorship or government control essentially, or improper government control. It is necessary to build financial infrastructure on that radically decentralized platform. So if you’re say trying to build a Commodities Trade Finance Network as we’re actually doing in the form of Congo you start by building a handful of use cases so KYC document exchange. You might put letters of credit on that next. At some point you’re probably going to want to interact with a network that has “real money” and magic internet money is rapidly becoming real money. So you may want to enable payments in Bitcoin or Ether you may want to enable payments in many of the price stable currencies that I think there are about 10 of them 10 projects or so on Ethereum right now with price stable currencies Maker DAI is one of the strongest at this point. And so either building bridges between one of those networks so that they can interact with a public blockchain or migrating one of those networks to public Ethereum is one possible path forward. And one of the beauties of Ethereum unlike any other platform is that there is the public network that is seeing so much activity built on it. But there are also many private permissioned implementations and in different situations and those things are really quite trivial to migrate to the public blockchain when it is sufficiently scalable and when business interests are comfortable with that.

Friederike:  So they use cases all over this very broad spectrum of decentralization. Do you think there’s a chance that the entire technology so blockchain as a technology would just vanish, that it will go away and in 20 years time no one will know what this thing was.

Joseph:  Well I think people will remember at minimum. But so I think people are interested in having better systems better economic and social political systems by which we conduct our lives. If a general A.I. was developed perhaps and we could do proofs that would constrain that general A.I’s behavior to only act in the best interests of human beings, it might be omnipotent in a sensor omniscient and craft great lives of challenge and wonder for all of us. And you know maybe that wouldn’t be such a bad situation and maybe we wouldn’t need blockchain but until that sort of thing happens if it ever happens which probably won’t we need to be able to interact with one another in fair contexts sun on flat playing fields. We need to be able to transact with one another in ways that can’t be cheated. Even if we don’t know one another even if we’re competing with one another and these decentralized protocols are currently the best implementation of that. So it may not be a blockchain system, I feel like it’s probably going to have very significant elements a blockchain and you’ll have a minimally sufficient decentralization for different transactions and we’ll have to get quite scientific about what that means.

But I don’t know any other way to ensure that people will be fair with one another other than by having other entities verify the fairness of their interactions.

Friederike:  So blockchain like systems are here to stay you think, but what would you see as a failure of Ethereum. So in ten years time what kind of set of events would make you say oh gosh that really shouldn’t have happened that way.

Joseph:  A failure of Ethereum would be if it squanders what I consider to be an order of magnitude or two orders of magnitude lead in terms of technology development and ecosystem development. We’re still attracting many of the best and the brightest and there other great projects out there that are attracting great people and exploring the solution space. Building up the technology it really does look like a lot of the next generation platforms are converging on similar solutions. UASM and Beacon Chains etc. And it seems very likely that Ethereum is going to get there first or very close to first. And in the meantime there’s just so much being built on Ethereum at the base layer and layer 2 with different kinds of technologies. How does Ethereum fail from there. I guess by giving up, it’s the momentum is pretty strong. So I guess it’s hard to see if Ethereum becoming inconsequential 10 years from now the technology will evolve quite rapidly. I believe there will be something called Ethereum 10/20 years from now. Won’t look a lot like version 1.0 of Ethereum and I’m sure there will be many other decentralized protocol platforms including ones that do things similar to what Ethereum does but Ethereum is unlikely to go away anytime soon.

Sebastien:  So we’ve talked about this before but the bear market is is really you know putting a huge toll on the ecosystem as a whole. Like what advice would you give the companies that are kind of in life support mode and what do you think if this current situation lasts a long time you know what do you think people will accomplish in this time of adversity?

Joseph:  Well I think I think we’ve turned the corner. I’m aware of so many things that are going to be happening that are news that’s going to be released in 2019 that I’m extremely optimistic about this year. I think it’s going to be another massive growth year for our ecosystem. That said it’s a really good idea to think lean. At ConsenSys one of the things that we want to return to is to having more constrained budgets so that we have to think through things more and build better solutions with less.

Sebastien:  And what’s your wish for 2019. What do you what would you most love to see happen in its ecosystem?

Joseph:  I think an epic result for 2019 would be a fully decentralized thing consisting of a decentralized autonomous organization that supports some sort of useful application like an exchange something that is profoundly decentralized in virtually all of its aspects.

Sebastien:  That would be a really great thing to have. Yeah. Like a true Dow that you know works and doesn’t crash and fail miserably.

Joseph:  Yeah that would be an epic demonstration.

Sebastien:  Awesome. Well Joe thanks so much for coming on the show today was a great pleasure to talk to you and looking forward to having you on again in the future. And best of luck for 2019.

Joseph:  Great. Thank you both.

Friederike:  Are the best.