Featuring Andreas M. Antonopoulos and Ash Bennington
Published on: February 26th, 2021 • Duration: 62 minutes
Author, coder, and educator Andreas M. Antonopoulos (aantonop.com) joins Ash Bennington, Real Vision senior editor, to discuss Bitcoin, layer 2 solutions, and the Wild West of crypto. Andreas describes Bitcoin as enabling trust across vast distances without coordination—trust without a central authority. He explains that Bitcoin allows you to trust in the system, without needing to trust the other person you are transacting with and without needing to even know who they are. Antonopoulos touches on the difficulty of scaling blockchains, mentioning that its design requires everyone to check everyone else’s work in order to remain secure and decentralized. Layer 2 solutions, such as Lightning Network, have been built on top of Bitcoin to help it scale to magnitudes greater transactions per second while still retaining the security and decentralization characteristics. Antonopoulos explains that crypto has enabled innovation of financial services, no longer restricted by gatekeepers, and he observes that the fact that anyone is allowed to innovate without permission, without authorization, and without oversight has created a “Wild West” environment with many “snake oil salesmen.” In light of this, he infers that this is why there is significant defensive skepticism regarding Bitcoin vs. other new projects in the space. Filmed on February 18, 2021.
Key Learnings: Bitcoin engenders trust in its system as it does not require trust in a central authority to coordinate transactions, even across considerable distance. The problem it currently faces is scalability. In order to resolve that without compromise, Layer 2 solutions help blockchains scale while attempting to retain similar levels of decentralization and security as the base chain. The permissionless nature of open source blockchains creates an environment ripe for “snake oil salesmen,” and this is why many people who understand this have strong defensive skepticism of non-Bitcoin projects.
Watch the interview:
This was a mindblowing interview. First of all, it’s good to hear from a security expert who was skeptical about Bitcoin, who took a hammer to the source code and tried to hack it, to change his mind and become an advocate for it while still trying to figure out what the catch is.
Andreas Antonopoulos lays out a ton of issues and major questions that I didn’t know I had. First of all, what is blockchain, and why is it useful? It is a system that flattens the pyramid of trust into a level pancake, giving everyone an equal vote.
Then he talks about how Bitcoin has evolved very slowly with the network’s consensus. That actually scares me to be honest, since a lobbyist can try to move things their way, but it feels like the open source community is handling it well so far.
Then he talks about the Layer 2 solutions, which I love. Lightning network and streaming money. I can easily envision services that are charged by the second just like a phone call. A therapist or a sex worker getting paid peer-to-peer for as long as the videocall lasts. A taxi driver getting paid for as long as the fare lasts and nothing more, unable to tinker with the taxi meter and swindle you out of money. Or simply getting paid your normal salary by the minute or by the second. You clock in five minutes late, you don’t get paid for those five minutes, and it’s fair. It’s a whole new way of dealing with microtransactions (true microtransactions, not the online game kind.)
Also, he mentions the importance of DeFi, how NFTs will upend the world, how you might carry tokens that give you a vote and prove you’re a tenant in your building, that you have a child enrolled in that school, that you are a citizen of that country. It’s truly a sci-fi world that is opening up every day. It felt impossible a few years ago but with DeFi breaking down the walls of institutional Finance and restructuring everything into a fair system, it feels like a wide open road is ahead.
Then he discusses about Stablecoins, which I had dismissed, but he explains that DAI for example is overbacked by crypto close to 1:1,5. And that is a threat not to Bitcoin but to fiat money.
After that he blows our minds again with a little mention of cryptography and Zero-knowledge proofs, which will change privacy and tokenization as we know it. A side note that helped me regain trust in the system is where he mentions a thing we and I didn’t realise, that Bitcoin adoption has brought in a massive amount of research into cryptography. And the threat of quantum computing to Bitcoin will certainly be solved by upgrading into a quantum cryptographic technique. That will be bad news for miners, but good news in general.
I also like his ideology of not treating Bitcoin as a religion. It doesn’t need us to defend it, it’s there, it is science, it is math. We can take a look at other technologies and study them on their merits without betraying Bitcoin, because Bitcoin does not give a shit about what we think.
In short, an amazing interview, many things to research, lots of tangents to shoot off from, and I suggest you also read the books:
The Internet of Money by Andreas Antonopoulos (More philosophical on where Bitcoin and cryptocurrency is taking us as a society in general.)
Mastering Bitcoin: Programming the Open Blockchain by Andreas Antonopoulos (More technical but still laid out in simple terms, bitcoin explained by an expert who truly understands what he’s talking about).