57 - Ultra Sound Money | Justin Drake
Bankless
Bankless
4.7 • 1.2K Ratings
🗓️ 22 March 2021
⏱️ 148 minutes
🧾️ Download transcript
Summary
Justin Drake is a researcher at the Ethereum Foundation and is leading the charge of applied cryptography to the Ethereum network. Last time he was on the podcast, we discussed cryptography as the foundation for what we called ‘Moon Math.’
This week, Justin returns to the show to discuss Ethereum’s economic engine and how its design decisions (EIP-1559, Proof-Of-Stake, Issuance, etc.) emerges as an incredibly bullish evolution of sound money: Ultra Sound Money.
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🎙️ 57 - Ultra Sound Money | Justin Drake
Last time Justin was on the Bankless podcast, we went in-depth about cryptocurrency's primitive tools: cryptographic hashes and signatures. He described these as the fire and wheel of cryptography technology. This time, we dive into the specific economic design of the Ethereum network and how it is positioned to expand upon the 'stone-age' cryptography of Proof of Work.
Given Ethereum's expressive capabilities, its future has infinite possibilities in terms of both innovation and development. To explore Ethereum's value proposition as Ultra Sound Money, we use the model of the Ethereum Economic Engine. In this metaphor, the basic energy harnessed is monetary value, stored in the 'engine' battery via tokens. The engine itself is structured by the network's consensus mechanism, Proof of Stake. The engine's efficiency is maximized through the issuance structures proposed in EIP-1559.
All of these components (explored in great detail throughout the conversation) contribute to the concept of ETH as 'Ultra Sound Money.' Soundness describes the degree of efficiency and security in the storage and exchange of monetary value. Economic security, anti-fragility, optimized issuance, efficiency, and scarcity combine to create a robust, maximally effective network. This could be the best episode we've ever recorded. ETH is Ultra Sound Money. Pass it on.
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Topics Covered:
0:00 Intro
5:08 The Economic Side of ETH
11:40 Ethereum's Economic Engine
24:00 Integration, The Meme, and Monetary Premiums
35:23 Sound Money & Economic Security
42:58 Cryptoeconomic Horsepower
47:57 Load-to-Power (Towing Capability)
55:59 Competing at the Base Layer
1:02:17 Repairing the Engine (Defense)
1:20:18 POS Plutocracy? Trust?
1:24:43 Engine Fuel
1:33:13 Engine Resilience
1:38:33 Redundance & Security
1:49:10 Stealth & Insurance
1:59:01 Economic Efficiency
2:09:11 Ultra Sound Money
2:18:00 ETH is Money
2:24:12 Hard Money
2:33:13 Closing & Disclaimers
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RESOURCES
The Bull Case for Cryptography
https://shows.banklesshq.com/p/-moon-math-the-bull-case-for-cryptography
ETH is Ultra Sound Money
https://newsletter.banklesshq.com/p/eth-is-ultra-sound-money-market-monday
Justin’s Research
https://ethresear.ch/u/justindrake/summary
Justin on Twitter
https://twitter.com/drakefjustin?s=20
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THIS WEEK ON BANKLESS:
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⚫ Token Thursday - Ren (3/18): https://newsletter.banklesshq.com/p/rens-trillion-dollar-opportunity
✏️ Ultra Sound Money (3/15): https://newsletter.banklesshq.com/p/eth-is-ultra-sound-money-market-monday
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Transcript
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| 0:00.0 | Welcome to Bankless, where we explore the frontier of internet money and internet finance. |
| 0:19.5 | This is how to get started, how to get better, and how to front run the opportunity. |
| 0:23.8 | I'm Ryan Sean Adams, I'm here with David Hoffman, and we're here to help you become |
| 0:28.4 | more bankless. |
| 0:30.2 | David, that's got to be the most bullish episode on ether we've ever had. |
| 0:36.8 | And that's saying a lot. |
| 0:38.2 | That is saying a lot. |
| 0:39.2 | Ultrasound money with Justin Drake. |
| 0:42.2 | Justin Drake is a researcher at the Ethereum Foundation. |
| 0:45.5 | He also was the guy that led the charge behind one of our previous most beloved episodes |
| 0:50.7 | ever, which is Moon Math, the bull case for cryptography, where in that episode, Justin |
| 0:56.2 | Drake took us through the innovations behind cryptography and made the claim that the |
| 1:00.6 | current state of crypto-economic systems design, basically Bitcoin and Ethereum, are |
| 1:04.6 | just in the very primitive ages of the deployment of cryptography. |
| 1:08.7 | This is a very similar episode, but instead of talking about cryptography, we're talking |
| 1:13.8 | about economics, specifically crypto-economics, and Justin again makes the claim that we |
| 1:18.5 | are just in the very beginnings of economic innovation when it comes to crypto-economics. |
| 1:24.2 | And he takes us through his vision of the future, his vision for the future of Ethereum, |
| 1:30.1 | and the future of ether, the asset. |
| 1:32.4 | And what can it really do when we apply all of the research and development that we've |
| 1:36.8 | done ever since 2009 when Bitcoin got started? |
| 1:40.4 | You know, I think historically, David, there's been a little bit of a taboo in Ethereum culture |
... |
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