What Is Ethereum by Naval Ravikant, Notes Taken From Front Row by LC

Let’s each of us keep a copy of that ledger and so we’ll just distribute copies with that ledger. So it is that we can all agree. So that when we each have a copy, we just keep those copies in sync and then we know who owns what money.
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Ethereum is the even crazier idea that we can’t agree upon which computation was run properly and you need to run computations to solve hard problems. You know the internet is full of code. Financial systems are full of code. When I trade a coin with you on some exchange that’s a piece of code that’s governing that transaction.

So, contracts.

Contracts. What is a contract?! A contract is an agreement between two parties to constrain their future behavior in exchange for getting something now. We enter into a mutual agreement to restrict our future behavior to a smaller set of options as specified in the contract. That’s what a contract is. It’s actually a piece of legal code so ethereum is this idea that… “Hey why can’t we move this legal code into a smart contract? Why can’t we write it in code and move it onto the blockchain where it’s enforced through math? Where each of us runs a copy of the adjudicating code of the judiciary on our computer. It’s that insane idea and it looks like they might actually pull it off. 

So what ethereum really enables at the end of the day that bitcoin does not is permissionless programmability. Anyone can come in and write codes, smart contract to run the ethereum blockchain and to resolve what would otherwise be financial disputes that would need judges and guard dogs and guns to resolve and so instead of needing all the courts and wall street we can use ethereum to rebuild all of wall street. Except this wall street that’s built on ethereum called d5. It’s open 24 7 365. It’s accessible around the globe to anybody you can put a penny into the system for a tiny smart contract where i get paid for a cool tweet all the way to I can move a billion dollars like a spanish galleon across the sea without permission to like trade pork futures or what have you. So everything you see on Wall Street times 10 scaled up and scaled down will eventually live on the ethereum blockchain and perform much much better and this I think it was Katie’s earlier point as soon as I know soon as earlier point instead of paying giant transaction fees to all the hedge fund traders sitting in in New York, we’re going to end up paying slivers to automatic code running on the blockchain the promise of bitcoin is digital gold and then eventually becoming the reserve currency of the world the promise of ethereum is replacing all the people in suits and ties and shirts in wall street and white shirts in wall street in london and shanghai and hong kong and replacing all those traders with automated code running very efficiently on the blockchain so that we can resolve our own contracts Tony Soprano had a great line where he said, “i’m a businessman who has to enforce my own contracts.” So you can see what happens when you don’t have contract enforcement. So what happens we create governments and governments enforce our contracts for us but a lot of times that’s just messy. 

It’s ugly. 

You got to get judges involved people have other plans how do you do cross-border stuff. You can’t do contracts for very small amounts. Ethereum enables you to build contracts of any size any scale anytime with any one and that’s just the beginning of it. Ethereum can do more than that but that’s enough to swallow for now.”

Naval Ravikant, mic drop

 Katie: “oh my god”