Ethereum’s Vitalik Buterin Talks Cryptocurrency & Economics on Tyler Podcast

Ethereum Co-Founder Vitalik Buterin Explains Crypto-Economics on Conversations with Tyler Podcast

Ethereum co-founder Vitalik Buterin recently recorded a podcast with Tyler Cowen. Episode 45 of the “Conversations with Tyler” podcast was released earlier today featuring Buterin discussing crypto-economics.

Conversations with Tyler is described as a podcast engaging “today’s deepest thinkers in wide-ranging explorations of their work, the world, and everything in between.” New episodes are released every Wednesday.

Here’s how Tyler Cowen, the host of the podcast, described the latest episode with Buterin:

At the intersection of programming, economics, cryptography, distributed systems, information theory, and math, you will find Vitalik Buterin, who has managed to synthesize insights across those fields into successful, real-world applications like Ethereum, which aims to decentralize the Internet.

Previous episodes of the podcast have featured guests like Peter Thiel, Malcolm Gladwell, Garry Kasparov, and Andy Weir.

During the latest episode of the podcast, Tyler and Buterin discussed a wide range of topics, including what Buterin is currently working on, how a layperson can understand cryptoeconomics, and information about Buterin’s life and background.

Tyler asked Buterin about his knack for picking up languages, for example, as well as his favorite places to visit “in time and space.” We know Buterin speaks English, Russian, Cantonese, and Mandarin. In this latest interview, Cowen mentions that Buterin has also taught himself French and German.

You can download the interview with Buterin here (that page also features a transcript of the interview).

Below, we’ll talk about some of the interesting points of the interview.

Buterin Explains Where He Gets His Ideas

Podcast host Tyler Cowen asked Buterin how he gets ideas across cryptocurrency, blockchain, economics, and politics. Cowen referenced the papers posted on Buterin’s homepage, then asked where Buterin gets those ideas.

“I guess it involves a combination of things,” Buterin said during the interview. “Some of it is reading what various economists on the internet say. Some of it is reading papers. Sometimes, if I want to dig into some topic more deeply, I end up reading books, like I read one on urban transportation economics a while back.”

Buterin added that he also goes to conferences, including the recent Economics and Computation conference in New York last week.

Buterin Lists The Central Ideas Behind Cryptoeconomics

Buterin was asked about his thoughts on the central ideas relevant for cryptoeconomics – a term that Buterin himself coined.

“I would say that cryptoeconomics, first of all, is economics,” explained Buterin. “It’s not like we’re inventing some completely different parallel society with a different parallel economy and different rules, but it is economics specialized to a particular set of circumstances.”

Buterin explained one of the core tenants of cryptoeconomics was the idea of encoded rules:

“Whatever your rules are for rewarding, penalizing inside of the mechanism, they have to be specified as a piece of Solidity code, Viper code, whatever programming language you’re using in that set. That’s a much tighter constraint than policymakers writing laws have.”

Buterin mentioned that you can’t develop broad policy like a government develops broad policy. You can’t just say something like “bribing people is illegal” and expect that to be enforced in a decentralized economy because you need to define what a “bribe” is.

Another key concept of cryptoeconomics, explains Buterin, is that “all of the actors are anonymous”, and this leads to another layer of security you won’t find in centralized or traditional economic systems:

“Another one is, of course, that all of the actors are anonymous, and what that means in practice is that you cannot drag people’s utility down below zero. If I have 70 ether, and I put that 70 ether into a mechanism, the worst thing you can do to me is you can take away that 70 ether. You cannot throw me in jail. You cannot socially ostracize me so I can’t earn any money again because I can always just switch identities.

Buterin summed up his discussion on cryptoeconomics by mentioning that crypto requires synthesizing concepts from across multiple fields, and then developing protocols around those ideas:

“Cryptoeconomics is basically taking economics with those particular constraints and then adding together insights from fields that are fairly close by to the cryptocurrency space — particularly cryptography, information theory, math, and distributed systems, including all of the research around consensus algorithms, hash functions, signatures, zero-knowledge proofs, and what we know about all of those primitives.”

Buterin Would Explain Blockchain As A “World Computer” To A Layperson

One of the most challenging parts of cryptoeconomics is explaining the concept to someone with no knowledge of the field. How do you explain blockchain technology to someone who doesn’t even know what a cryptocurrency is?

Cowen asked Buterin how he would explain blockchain “to a very smart person from 40 years ago, who knew computers but had no idea of crypto.” Here’s how Buterin would explain it:

“One of the analogies I keep going back to is this idea of a “world computer.” The idea, basically, is that a blockchain, as a whole, functions like a computer. It has a hard drive, and on that hard drive, it stores what all the accounts are.”

“It stores what the code of all the smart contracts is, what the memory of all these smart contracts is. It accepts incoming instructions — and these incoming instructions are signed transactions sent by a bunch of different users — and processes them according to a set of rules.”

Vitalik added that you can build on that computer. You can add layers of trust or security to that computer. You can enforce rules on that computer.

Buterin Is Asked If He Sees Himself As A “Non-Evil Rasputin”

Cowen brings up an interesting idea regarding Buterin’s Russian heritage. Cowen asked if people trust Ether and Ethereum because they, in part, trust Buterin.

“In a sense, there’s this Russian tradition of holy men who come along,” explains Cowen. “Dostoyevsky’s Alyosha, Prince Myshkin — like a non-evil Rasputin. The person is innocent and has some very wise message, and people flock to that person.”

Cowen asked Buterin if he sees himself as one of these figures. Here’s how Buterin responded to being called a non-evil Rasputin:

“I know people have different theories about the kind of influence that I myself have. I think part of it is that, at least I feel like, the innovation in the crypto space isn’t just technological innovation or political innovation.”

“It’s also to a large degree cultural innovation, and even I, with my own behavior, I end up talking to people at different conferences, just reply to random people’s Reddit messages.”

Buterin added that he tries to maximize accessibility to himself in different ways. Buterin is active across social media – including Twitter and Reddit. Overall, Buterin avoided referencing his Russian heritage as a reason why people trust Ethereum. It was an unusual question from Cowen, overall.

Buterin Explains What He Looks For When Hiring Someone

Cowen asked a question about what qualities Buterin looks for when hiring someone.

“If you’re looking to hire someone – either for Ethereum or to collaborate with – what quality or qualities do you look for that maybe other people underrate?” asked Cowen.

Buterin avoided directly answering that question. Instead, he took issue with the fact that Ethereum isn’t a company – like Google – that hires people to work on the Ethereum blockchain.

“…there are different circles in the Ethereum community, some overlapping, some not, and there’s different ideas of what it means to be Ethereum.”

“For example, you could be a full-time employee of the organization based in Switzerland called the Ethereum Foundation, or its outpost in Singapore called Ethereum Asia Pacific Limited.”

“You could be someone who has received a grant from the Ethereum Foundation. You could also be a groupie, someone who has intellectual ideas, likes hanging out with us, and just happens to fly around everywhere to the same cities that we’re in.”

Buterin Explains His Knack For Learning Languages

Cowen asked Buterin about his talent for picking up languages. As mentioned above, we know that Buterin speaks Chinese, English, and Russian. Cowen references the fact that Buterin has also learned French and German – despite never having lived in these countries. What’s Buterin’s secret for learning new languages?

Buterin emphasizes that he didn’t learn Chinese in three months on a mobile app. It took years of practice and half a year (cumulatively) of visiting China.

Buterin was motivated to learn Chinese when he saw the bitcoin community growing rapidly in China. To learn Chinese, he went through a number of podcasts and flash card apps. Then, he started participating in conversions in China in person or via WeChat.

Buterin Explains What’s Next For Ethereum

Finally, Cowen asked what’s next for Ethereum. What does the future hold for the world’s second largest decentralized blockchain platform? What’s the next big breakthrough in the crypto space?

Buterin, as you may have guessed, emphasized scalability in his answer.

“I think scalability is a huge one. Ethereum blockchain’s capacity right now is about 15 transactions a second. If you even consider something like putting all of the Uber rides on the blockchain, that’s 12 transactions per second already.”

Buterin emphasized base-layer scalability upgrades to the system – similar to how Bitcoin Cash improved scalability. He also mentioned layer two technologies like state channel and plasma – similar to the bitcoin (BTC) Lightning Network.

Other opportunities in the future include a better user experience and better wallet development, both of which will open up crypto to non-tech expert users.

Ultimately, Cowen spends about an hour speaking with Ethereum co-founder Vitalik Buterin during the podcast. You can check out the full interview and podcast here on

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