“Trusted third parties are security holes.”
– Nick Szabo
Nick Szabo (@NickSzabo4) is a polymath. The breadth and depth of his interests and knowledge are truly astounding.
He’s a computer scientist, legal scholar, and cryptographer best known for his pioneering research in digital contracts and cryptocurrency.
The phrase and concept of “smart contracts” were developed by Nick with the goal of bringing what he calls the “highly evolved” practices of contract law and practice for the design of electronic commerce protocols between strangers on the Internet. Nick also designed Bit Gold, which many consider the precursor to Bitcoin.
This wide-ranging conversation is co-hosted by Naval Ravikant, a mutual friend and one of the most successful investors in Silicon Valley, who also happens to be one of Nick’s biggest admirers.
We cover a lot, including:
- What is Bitcoin, what are cryptocurrencies, and what problem do they solve?
- What is “social scalability?”
- What is Ethereum and what makes it unique? Strengths and weaknesses?
- How will smart contracts actually get adopted or go mainstream?
- What are ICOs (Initial Coin Offerings)?
- Blockchain governance — is there any existential risk?
- “Wet” versus “dry” code
- Pascal’s scams
- Quantum thought
- What fields will you be working on in the future?
- Listen to it on iTunes.
- Stream by clicking here.
- Download as an MP3 by right-clicking here and choosing “save as.”
Want to hear another podcast featuring Naval Ravikant? — Listen to this prior conversation. In this episode, we discuss the habits and behaviors of highly successful and happy people (stream below or right-click here to download):
This podcast is brought to you by FreshBooks. FreshBooks is the #1 cloud bookkeeping software, which is used by a ton of the start-ups I advise and many of the contractors I work with. It is the easiest way to send invoices, get paid, track your time, and track your clients.
FreshBooks tells you when your clients have viewed your invoices, helps you customize your invoices, track your hours, automatically organize your receipts, have late payment reminders sent automatically and much more.
Right now you can get a free month of complete and unrestricted use. You do not need a credit card for the trial. To claim your free month and see how the brand new Freshbooks can change your business, go to FreshBooks.com/Tim and enter “Tim” in the “how did you hear about us” section.
All you need to do to get your free 30-day Audible trial is visit Audible.com/Tim. Choose one of the above books, or choose any of the endless options they offer. That could be a book, a newspaper, a magazine, or even a class. It’s that easy. Go to†Audible.com/Tim and get started today. Enjoy.
QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.
Scroll below for links and show notes…
Selected Links from the Episode
- Connect with Nick Szabo:
- Connect with Naval Ravikant:
- Fat Protocols by Joel Monégro, Union Square Ventures
- Money, Blockchains, and Social Scalability by Nick Szabo, Unenumerated
- Galt’s Gulch
- Atlas Shrugged by Ayn Rand
- The Imitation Game
- The Dawn of Trustworthy Computing by Nick Szabo, Unenumerated
- Shell money
- Market Crashes: The Tulip and Bulb Craze by Andrew Beattie, Investopedia
- Fiat Currency: What It Is and Why It’s Better Than a Gold Standard by Jason Hall, The Motley Fool
- What is a hardware wallet?
- Bitcoin — The Internet of Money by Naval Ravikant, Startup Boy
- Smart Contracts, Tying, and Product Liability by Nick Szabo, Unenumerated
- Wet Code and Dry by Nick Szabo, Unenumerated
- Ten Signs You Might Be a Libertarian by Stephen J. Dubner, Freakonimics
- From Vending Machines to Smart Contracts by Nick Szabo, Unenumerated
- What are multi-signature transactions?
- The Fifth Protocol by Naval Ravikant, Startup Boy
- The Bitcoin Model for Crowdfunding by Naval Ravikant, Startup Boy
- Why Startups Are Trading IPOs for ICOs by Erin Griffith, Fortune
- What Drives the Value of Crypto Currencies? by Joshua Seims, MetaStable
- “Best way to destroy your investment in Bitcoin…”
- Bitcoin: The Magic of Mining, The Economist
- What is hashcash?
- Dunbar’s number
- Ethereum Project
- Rootstock — Smart Contracts on the Bitcoin Blockchain by CryptoIQ, Medium
- Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto
- Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform
- Papers by Aviv Zohar on GHOST (Greedy Heaviest Observed Sub-Tree) and Bitcoin security
- Bitcoin Hard Fork — If You Want Peace, Prepare for War by Piotr Piasecki, Brave New Coin
- Where Bitcoin and Banking Collide by Noelle Acheson, Coindesk
- Singapore’s Central Bank Completes Blockchain Payments Pilot, Nods at Digital Currency by Samburaj Das, Cryptocoins News
- Smart Contracts Reduce Mental Transaction Costs by Nick Szabo, Unenumerated
- Ninth Amendment to the United States Constitution
- Song of Myself by Walt Whitman
- More Short Takes by Nick Szabo, Unenumerated (where Nick talks about quantum thought)
- The Origin of Species by Charles Darwin
- Utilize the “Steel Man” Tactic to Argue More Effectively by Eric Ravenscraft, Lifehacker
- Pascal’s Scams I and II by Nick Szabo, Unenumerated
- The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb
- The Singularity Is Near: When Humans Transcend Biology by Ray Kurzweil
- “The Singularity” by Nick Szabo, Unenumerated
- Regulators Start To See Bitcoin As “Prosecution Futures” by JP Buntinx, The Merkle
- The Father of Online Anonymity Has a Plan to End the Crypto War by Julian Berman, Wired
- Monero vs. Zcash
- Blockstack — The New Decentralized Internet
- Surely You’re Joking, Mr. Feynman! (Adventures of a Curious Character) by Richard P. Feynman and Ralph Leighton
- Moore’s Law
- Are We Living in a Computer Simulation? by Clara Moskowitz, Scientific American
- The Illusion of Free Will by Sam Harris
- The Top 20 Artificial Intelligence Films — in Pictures by Michael Hogan and Greg Whitmore, The Guardian
- Collecting Metal: The Inner and Outer Worlds of Jewelry, Coins, Bullion Bits, and Odd Shiny Things by Nick Szabo, Unenumerated
- New Evidence: Easter Island Civilization Was Not Destroyed by War by Annalee Newitz, Ars Technica
- The Selfish Gene by Richard Dawkins
- Books by Matt Ridley
- Cambridge Digital Library’s entry on Dead Reckoning
- Introductions and the story of how Nick and Naval met. [08:05]
- What is cryptocurrency? [10:47]
- Where did Nick’s interest in cryptocurrencies begin? [11:48]
- What is cryptography? [12:56]
- What are the benefits of cryptocurrency? [15:44]
- Why is cryptocurrency important to Nick? [17:13]
- What is a blockchain? [17:43]
- A brief history of currency. [18:51]
- What makes money — including cryptocurrency — valuable? [23:59]
- “Bitcoin is almost to computers what quantum mechanics is to physics — it throws a lot of people in the field off.” [26:53]
- What is a smart contract? [30:45]
- “Wet” versus “dry” code. [31:44]
- The vending machine as the primordial smart contract. [33:36]
- A situation where someone might want to use a multi-signature (multisig) transaction. [35:57]
- What are ICOs (Initial Coin Offerings)? [41:56]
- On the inevitable bubbles that show up in any prediction market. [43:00]
- Most common cryptocurrency misconceptions. [45:40]
- What makes Bitcoin unique? [49:50]
- What was the innovation of BitGold? [51:20]
- What is proof of work, and how is it used in Bitcoin mining? [53:42]
- Computational inefficiency and social scalability. [1:00:04]
- Would it be possible for a government to regulate cryptocurrencies out of existence? [1:05:02]
- What is the incentive for a financial center like New York to be supportive (or cast a blind eye) to cryptocurrency development? [1:08:28]
- Is Bitcoin inversely correlated to any particular asset classes? [1:10:13]
- How do people accidentally lose their Bitcoins? [1:10:35]
- What is Ethereum, and what are the pros and cons compared to Bitcoin? [1:12:53]
- A cultural disconnect between the traditional financial world and the cryptocurrency community. [1:17:28]
- What are the most valuable components of the traditional finance world? [1:19:05]
- What reliable sources might someone from the traditional finance world consult if they wanted to learn more about cryptocurrencies? [1:20:40]
- What will it take for the more widespread use of Bitcoin (or other cryptocurrencies) among everyday consumers? [1:23:05]
- What are the common characteristics of charlatans who scam the system? [1:28:54]
- How is “fork” used in the context of cryptocurrencies? [1:31:13]
- What problems do users of cryptocurrency most commonly encounter when dealing with the traditional banking infrastructure? [1:37:00]
- How does “unenumerated” tie into the Ninth Amendment of the United States Constitution? [1:46:23]
- What is quantum thought? [1:49:24]
- How has Nick trained himself to practice quantum thought? [1:50:52]
- What are Pascal’s scams and how do they relate to Nassim Taleb’s Black Swan? [1:54:54]
- For which emergencies or possible future events (e.g. “The Singularity”) should we be prepared? [1:58:06]
- Does Nick worry about anything in particular that most people seem to ignore? [2:00:55]
- How current technologies are trying to overcome the potential for privacy leaks in transactions. [2:03:29]
- What makes certain cryptocurrencies appreciate in value over others? [2:04:50]
- Why Singularity and Simulation hypotheses are mutually exclusive. [2:12:31]
- How does Naval minimize his mental surface activity in order to better focus on current endeavors? [2:14:40]
- Why future generations will probably handle social media better than we do today. [2:17:08]
- Favorite books? [2:20:42]
- What high school class would Nick teach? [2:22:41]
- What does Nick plan on writing about in the near future? [2:24:42]
- What would Nick’s billboard say? [2:26:47]
- Parting thoughts. [2:27:15]
- Naval Ravikant
- Jamie Foxx
- Charlie Munger
- Ralph Merkle
- Tim May
- Eric Hughes
- John Gilmore
- Alan Turing
- Charles Darwin
- Donald Trump
- Adam Back
- Satoshi Nakamoto
- Hal Finney
- Bram Cohen
- Steve Wozniak
- Vitalik Buterin
- Aviv Zohar
- Dan Carlin
- Alfred North Whitehead
- Friedrich Hayek
- Walt Whitman
- Sam Harris
- Neil Strauss
- Blaise Pascal
- Nassim Taleb
- Elon Musk
- Lance Armstrong
- David Chaum
- Kim Kardashian
- Richard Feynman
- Jiddu Krishnamurti
- Marc Andreessen
- Alfred W. Crosby
- Jared Diamond
- Richard Dawkins
- Matt Ridley
- Christopher Columbus
- Ferdinand Magellan
The Tim Ferriss Show is one of the most popular podcasts in the world with over 400 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.