Arthur Breitman on the Biggest Problems in Blockchain Design

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:17)

So Tracy, we are here at the Milken Institute Conference in Beverly Hills.

Tracy Alloway (0:23)

I know, it's very fancy.

Joe Weisenthal (0:25)

It's very, how's it been going for you so far?

Tracy Alloway (0:27)

It's been fun. I talked a lot about credit. I watched your panel about crypto, and I have to say, there were definitely more people at the crypto panel than there were at the credit panel.

Joe Weisenthal (0:38)

And also, every panel that I've seen that's not about crypto.

Tracy Alloway (0:43)

Someone asks a question.

Joe Weisenthal (0:44)

Yeah, they're like, oh, what's your opinion about crypto?

Tracy Alloway (0:46)

Yeah.

Joe Weisenthal (0:46)

Like everyone, no matter what, people just like want to know about it.

Tracy Alloway (0:49)

Someone from the audience submitted a question about how crypto would impact inflows into investment grade. And you know, interesting thought.

Joe Weisenthal (0:58)

Well, crypto is one of those things too, where I, regardless of, everyone gets an opinion on it, regardless, so everyone wants to know everyone's take, even if it's not their specialty.

Tracy Alloway (1:07)

This is very true.

Joe Weisenthal (1:08)

But I'm very excited because today, we're going to be speaking to someone who knows a lot about crypto, now just a tourist. And I think a topic that we haven't really talked about that much is blockchain architecture and design. And you know, all of these panels, like everyone's talking to, it's like, they're super like fanciful. It's like, oh, it's going to create this world of like openness and transparency. And it's going to cut out all the fees and it's going to be so great, which is really weird because when I think of blockchains, I think of high fees in low settlement or long settlement times. And basically like all kinds of interesting trade offs and many things that are worse than the existing financial system.

So I feel like people are jumping over some like basic architectural points in this whole conversation.

Tracy Alloway (1:54)

Right. The other thing that gets me, especially at conferences like this, is everyone wants to talk about crypto. Everyone seems to have an opinion about it, but I have my doubts about whether people actually understand the underlying technology and whether or not they're differentiating between different blockchains and things like that. I think people might understand the basics, like proof of stake versus proof of work, layer two versus layer one or whatever. But like within those technology buckets, I don't think people are really thinking about the nuance.

Joe Weisenthal (2:24)

No, it's a lot of like, it's all just gonna be really good and it's gonna be really great for financial inclusion and democracy and all that stuff. So anyway, let's have a real conversation about how these chains work and what you can do with them.

Tracy Alloway (2:37)

Let's do it.

Joe Weisenthal (2:38)

All right, I'm really excited.

Our guest knows a lot about this stuff. We're gonna be speaking with Arthur Breitman.

He is the founder and creator of the Tezos blockchain project, one of the sort of original projects that thought about smart contracting and malleability in a way that, you know, much more advanced than or seemingly more advanced than what you can do on, say, Bitcoin. So we're gonna talk about what you can do with the chain. So Arthur, thank you so much for coming on Odd Lots.

Arthur Breitman (3:06)

And thank you for having me.

Joe Weisenthal (3:07)

You know, we've been interacting on Twitter for years and years, so I'm excited. I'm excited that you're here.

Arthur Breitman (3:13)

Yeah, me too.

Joe Weisenthal (3:14)

So, Erna, you know, like, what do you think? When you hear all these people at these conferences and you're here too, and they're like, oh, it's gonna, like, be really cheap. It's gonna lower the fees for everything. It's gonna be super fast.

Transparency, financial inclusion, it's gonna save democracy, it's gonna save the planet, et cetera. Like, what goes through your mind?

Arthur Breitman (3:36)

I mean, I think some of it is true and some of it is false. In terms of reducing the fees compared to traditional financial infrastructure, I actually think, you know, this is one of the real ones that we can actually do this. Yes, we can lower the entry costs for creating financial products or financial systems, make it a little more innovative and develop these things much faster than they have in the past. I do believe that you can remove a lot of intermediaries and a lot of the friction in the financial system comes from the fact that you need to rely on trusted intermediaries.