CryptoBasic Podcast

Your source for all Cryptocurrency information, made for the novice investor. 

And remember, we're not financial advisors.

Karim:

Please do your own research. All investments have inherent risk do not afford.

Brent:

Do not speak correctly.

Karim:

Do not risk anything you can't afford to lose.

Brent:

Theo waigel.

Karim:

Oh, and welcome to the crypto basic podcast your tune into one of our one o one siri's episodes.

Brent:

So thanks for tuning in on our one on one siri's we break down certain coins or concepts from the ground up, you can go back and listen to any of these and any order.

Karim:

Hopefully they're still relevant today. We're talking about a theory. Um, classic ethereum classic, the often misunderstood close relationship to a theory. Um, maybe little brother, maybe cousin, maybe little sister. I'm here with kareem. Kareem is the expert on this particular topic. Karim, how are you doing today?

Brent:

Well, i definitely think that you're using the term expert very loosely. However i'm doing very well. How are you?

Karim:

Usually don't call you an idiot until the end of the but i like all the city it's.

Brent:

Easy for the party.

Karim:

Yeah, well, i'm not an expert.

Brent:

I just happened to be the person on duty to research this project.

Karim:

So compared to me, karim is going to be an expert on theory. Um, what i know about this project is it is what was left over when the syrian chain did a fork, so i'm sure we're going to talk about why that is what happened there with difference in philosophy, wass and where they're going forward. So let's, do it get to business? Yeah, and i'll say, brent, you are correct that this is any theory in fork and it's so similar to it a theory um, that ah, very large portion of this episode is going to be focused more on explaining how, if uranium classic came to be, and then maybe some of the small additions and differences that have developed inst for iq.

Brent:

But generally speaking, these projects are very, very, very similar in the same sense that for example, bytecoin cash and bitcoin are very, very similar with the exception of the block size, for example, there is one very key difference we'll get to that with the developers as faras somebody that's near dear to our heart.

Karim:

But let's start at the beginning. Karim let's start before the history let's start with the vision of the project, what are they trying to accomplish?

Brent:

Sure. So i'm going to separate the vision into two categories one the one that applies to both you theory ums which is ethereum any theory um classic are both trying to be blocking based distributed computing platforms with smart contract functionality distributed computing i mean this is basically well what we understand today now is platforms that ethereum really led the way in the development of this space so you know tohave ah decentralized during complete machine to be able to run smart contracts all of that stuff applies to ethereum classic just like ethereum and then i would say that the other additional point of emphasis when we're discussing ethereum classic is they are very interested in maintaining the attributes of immutable ity on the blockchain meaning that nothing can change the history of the boxing and the openness and decentralization off blocking so it's a very i don't want to say idealistic project in the sense that it's pie in the sky it's very idealistic in the sense that the team the community holds very dearly certain principles about what boxing should be and they let that guide their development okay that makes sense and to understand exactly what we're talking about is the why they care so much about the immune ability of the blockchain for instance i think it's time we take a long long road or drive the road of history because there's a lot of history down that road that's very smooth you sound like some kind of late night d j and now we're going to go and listen to an old classic trip down memory lane but yeah let's dive into the history this is going to be a significant section here because it's really gonna help us understand what happened so not surprising could research that so the history is going to take up the biggest portion of the podcast.

Karim:

All right, i got yeah, but in my defense also we've covered ethereum any theory um classic anything we're very similar but anyway, so ethereum first came out in july of twenty fifteen that's when the ethereum genesis block the originally theory of genesis block was meant it.

Brent:

So originally there was just one ethereum and in may of twenty sixteen so ethereum had already been operating for a year.

Karim:

There was a development in the theory room community which was a venture capital fund called the doubt you've probably heard of it and it was a crowdsource fundraising project that was going to create essentially the idea was to get a bunch of ether from the community and then be able to vote democratically on how that money is going to be invested and then whatever the profits from those investments were would be distributed amongst the people who are putting money and the dow proportionally so it was like a distributed investment fund came right it's it's a little bit different than what we think of when we think of it out today, which is a come but you know, like something like the dash treasury i'm sure we're getting into the specifics about why it's different but it is kind of you know that one of the first attempts i don't know if that's had a treasury by this point but it's definitely one of the first attempts of something like this you know, in your correct basically tao, as we've explained before stands for decentralized autonomous organization and many times when we've covered a dow such as dash, which was the first one we're talking about the governments of the blockchain itself so the dash tao is essentially governing the dash network here the dow for ethereum was a separate entity wasn't going to go over and the theory of network it was a collection of funds that were going to be used to invest in different ethereum based project in able to provide startup capital and ideally be able to benefit the community from you know, the profits that were raised from set projects and then as a voting to decide what happens with the dow that happens only with those that invested in the dow or it happens with those on the blockchain well, no, only those who invested in the dow so this is a separate entity altogether are now it is important to know.

Brent:

And it did play a role that the people who created.

Karim:

The tao were very closely intertwined with the core ethereum team so that is going to play a role in our story so it's not like just some random person that had nothing to do with your theory um that decided to create this right so now here's what ended up happening actually before the fundraising was completed before the dow was actually launched their was a research paper that was put out that essentially called into question the security of the doubt and it was called a call for a temporary moratorium on the dow and it had three authors the main one being a mean sarah who is you know a very well known professor like hacker and also vlad some fear who was part of the the theory of development team but essentially they found some attack vectors in the tao that they were concerned about so the community got a little bit worried but one of the founders of the dow came out now you know, a few days after and basically said that the dowel didn't have the vulnerabilities that it wasn't vulnerable in the way that this paper had presented so unfortunately it turns out that it wass and in june somewhere mid june approximately three point six million ethereum were taken from accounts in the dow which at the time was worth about fifty million dollars.

Brent:

Okay, now yeah no, this is a huge amount of money so first i want to explain what the attack vector that was used actually was it's called the re entrance see attack but essentially there was a flaw in the system which allowed you to make multiple withdrawal request before actually closing the transaction and having a verified with the initial balance so the best analogy that i encounter for this is imagine that you go to the bank and you have one hundred dollars in the bank you have one hundred dollars in your account but when you go to the teller you have a siri's of deposits off withdrawals and let's say that the teller caches you out each one by one by one but she doesn't actually square up with your account until you're done with all of your transactions so you could say i'm going to withdraw fifty dollars i'm going to draw another fifty and then you could just keep doing that you're doing that and as long as it was part of the same chain essentially the transaction wouldn't close so you could have unlimited lee would draw money before everything was wrapped up so this is the attack vector that was used now some of the members of the community this is you know one of the cool things that happened was there's something called the robin hood group that as soon as they realize that this attack was taking place ah bunch of developers got together and actually attacked two dow using the same attack but with the intention of securing the funds before the original attacker could finish so that they could re distribute them to the community so they were actually stealing from the tao as well but with the intention of saving the funds and they were actually able to secure seventy percent of the funds so even though the attacker was able to take three and a half a million ethereum the robin hood group was able to save seven point two million in theory so the majority but obviously fifty million dollars worth of ethereum was taken out and there was a short period of time because there's like a twenty eight day waiting period so the attacker couldn't immediately cash that money out and within that twenty eight day period there was a big question in the community what do we do and there were two main positions one position was there's nothing we can do watching is immutable this was an attack vector that was discussed the people who invested in the dow should have done their due diligence the people who created that thou should have been more careful about her code and we can't just manipulate what happens in the budging that's the whole point of the budget another argument was we can't let this happen the community is going to suffer the network is going to suffer ethereum as a whole is going to suffer and we're going to let it happen just on the idea that we shouldn't make changes right so this is where the community really split and there was a vote taken now traditionally basically what ended up happening is the majority of the community and this is the way it's normally presented the majority of the community ended up voting to reverse the hack so they did a hard fork that essentially reversed the funds to the dow one of things has not discussed so much though is that on ly four or five percent of the eligible steak actually voted so yeah it was a majority there was like an eighty percent vote but only like four or five percent of the notes voted so this reversal was done with let's say like three and a half percent of the total vote if that makes sense anyway so at that point there was a split and the hard fork i mean the idea was originally for everybody to just go with the reversal but eh a portion of the community essentially wanted to continue with the current change they wanted to maintain the immutable ity of it and the idea was well this is going to disappear over time because that's what usually happens to forks they fork off they try to have something and then there's no real value in them but ethereum classic which was that portion of the community which wanted to remain immutable and didn't want to go back on the transaction and edit that actually sustained a lot of developers and a lot of the community members who really believed in the core project decided to sustain and go with that for mind that for sustain that fork and now two years later ethereum classic has basically emerged as its own viable platform now overall most people in the community ended up winning because those who wanted to maintain the immune ability of the blockchain were able to do so with miriam classic those who had invested in the dow through ethereum had their tokens it was kind of a free roll for the community and overall it was probably an example of block chains evolving and forks evolving in my opinion in a successful way maybe some people would disagree but ultimately that's essentially how the split played out and i think one of things that i really should say is just kind of to make the case of the people who believed that the hack should be reversed the main argument of the theory um classic community was you know like i mentioned before it's the mutability of watching shouldn't go back there were some good arguments made on the ethereum side too which was hey listen this is about a community that should have the ability to make a decision collectively outside of the block shame saying you know the mutability of the boxing is a social construct that in the right instances should be like we should consider making changes for the well being of the community as a whole essentially the theory in people are were more saying we need to look at this beyond just a blockchain and take the most practical and beneficial approach to the community as a whole where is the serum classic people were really saying listen once you start playing this game that you can change things that the court development team when something goes wrong is expected to come here and make some changes and when the people who are making those decisions all have a personal stake in the system then you're essentially on doing a lot of the trust listeners that's created by the immutable it of the blocking right now see, we've seen what happened with miriam.

Karim:

It seems to work out, but it's so difficult to try and figure out where you draw that line, and that was part of the point of block came to begin with.

Brent:

You didn't need to draw that line in the sand you have, you functions the way it functions, and if somebody attacks that, they attack it, so i'm still not a hundred percent sure where i fall in this debate, but i think i'm probably closer to the ethereum classic side, despite seeing how it worked out and we're in working correctly, i will say that the community has, i guess, evolved in some way because we had a very similar situation just come up, which we've mentioned it on a couple of episodes in the past, but the company parody has a multi signature wallet function on the ethereum blockchain, where you would require multiple digital signatures to move anything from wallet there was supposed to be more secure, or you could even cone while it was somebody where you both have agreed to move funds so they had.

Karim:

A ton i didn't do the research on the number, but it's big, there was a ton of ethereum locked up, it wasn't stolen, although the person who caused this may have a triumph stealing somebody pushed an update for a command to the code that froze millions of dollars and funds of people's theory.

Brent:

So there was a proposal, the proposal wass lets unlock those funds, let's change the codes that they could move that and give them their money back.

Karim:

And this time it was very i don't know what the participation rate was, but i know it was all over read it and seemed that the community was actually involved in the care and the vote was shut down.

Brent:

It was a theory of improvement protocol, some eleven something or whatever, and they decided no, we're not changing it really on the money where it is, so they've kind of drawn a little bit of line, i guess part of the line is the dow was necessary for the development of the chain, and parody has nothing to do with that, so i'm not sure, but they didn't let that that's.

Karim:

A great point brandon and it is an example of how the different situations play out but then it begs the question and that's why earlier in the episode i mentioned that the relationship between the people who actually ran the dow and the people in for example the ethereum foundation was pivotal because okay yes it the dow was supposed to be an independent entity so if youand i create a project on the syrian based project that race is a bunch of money and then we get hacked should we as well expect that that hack should be reversed by the development team and that the theory um community should hard fork in order to return our funds so the answer is obviously probably know the answer is no right if you make those mistakes you make those mistakes so i think that a lot of people felt if it wasn't for their relationship to the court development team to their relationship with the ethereum foundation if it wasn't for who they were they would have had to suffer this hack now but the other side of that argument also makes a lot of sense which is yeah but this is just going to hurt everybody all the people who trusted that thou all the millions of dollars you know at this point we're talking about a significant percentage of the totally theory um in circulation more than ten percent so it's not a tiny part of the network.

Brent:

So you can see why this was contentious.

Karim:

You can see why people had such differing opinions.

Brent:

But i think that the important part to note here as far as display it is that it is completely unjustified to compare ethereum classic to aa lot of the forks that exists out there. Because one of the dynamics that we have come to see in the space is that forks are often money grabs. Forks are often opportunities for people to without doing the work of creating the code necessary for a good block chain. Just trying to capitalize of an existing network. Try to siphon off some of that value, often with like a pre mind. This was nothing like that at all.

Karim:

At all and if anything, the reason it's called the theory um classic is because in almost every way it is the original ethernet, right?

Brent:

The ethereum is the hard fork, but it was the majority of the network, and this is how the network works. I mean, those are the rules of the game. There's a reason why we criticize people like roger ver for trying to pretend bitcoin cash is bitcoin. No, it's not the majority of the network is bitcoin, and your fork is a minority forking therefore it's, big queen cash, the serum classic communities, obviously not trying to play those underhanded tactics or anything like that, but it is just important to know, because if you're scrolling down coin market cap and you're just seeing something and all of a sudden you see ethereum classic, you might think to yourself, oh, wow, okay, somebody trying to capitalize of ethereum that is not the history at all and, if anything, it's the opposite. These guys were trying to maintain the original vision and the original principles of the project that's not to say that the people who decided to fork ethereum had any negative intentions, and they also had the best interest of the network at play, and they just happen to disagree on how that what exactly, that would be so in the end, the democratic system kind of worked there.

Karim:

I mean, even though a small percentage of people voted, you have the ability to vote with your mining, in which change you're going to continue to work on. So even though i'm having unturned, battle is to whether i agree with the choice to give him the mulligan. And i always have. And i still not one hundred percent sure where i fall in, that i would have voted against it, but would have been okay if it past. I think so, it's. Interesting, so.

Brent:

I don't want to get too far into the weeds here and this is not a theory and bashing because as you know, i believe you theory um to be one of the best projects in cryptocurrency and oh, we should've mentioned i don't own any theory in classic we usually discuss that at the beginning i do only theory um i don't only theory um classic as of right now and my personal bias going into this episode was positive because i have a lot of respect for io h k which i will get into later is one of the development teams that is working on a theory in classic however, since you are really tourney, i feel like i have one extra piece of information that might tip you in a particular way normally when you have a heart for the majority of the network has to choose to vote yes, let's go in that direction and anybody who doesn't vote is considered almost a no vote because you just need the majority of the network to go in a particular direction. This vote was actually to determine whether the default setting on update was going to go towards the heart for it or not. So really out of the five percent of the people that voted let's say eighty percent of those people so four percent of the network voted to make an update that made it a default upgrade for all of the notes in the system.

Karim:

So you could argue that this is one of the few times that there was a hard fork that maintained the original network without the majority of the network voting to go in that direction.

Brent:

If that makes sense, like they were really voting, whether or not to make it, opt in or opt out as a default, because, as you know, whatever the default days is what ends up staying, because most people don't vote it's a little bit, little bit, little bit underhanded, that, yes, but if your goal is to say, look, we're going to save the blockchain, here's, what, we're gonna do it.

Karim:

Most people would have no idea that this is even going on. And even today, it's something like this happened. Most people are gonna know about it, so i think the last thing i'll add on this brand two is i want to emphasize that they were really pressed for time because the clock was ticking and if they took too long the attacker was going to be able to withdraw those ones so they were really acting as best they could now i don't know all the complexity she's of value and interest and and who voted exactly and how they could benefit but based on everything i've read it seems like everybody was acting in the best interest of the network with different ideas of what exactly that would be anyway the hole tinfoil hat i wonder if the people who pointed out the original attack vector they're like look you guys are vulnerable here's what's going on you should not go forward with this and i know i know we're fine i wonder if they were just like wave took it totally makes sense tow have that position but based on the reputation of the people that wrote that paper i highly doubt it they are very reputable people in the space nothing that makes it impossible but there's a lot of people that know a lot about coding that could have exploited this is well you know yeah especially they released it out there like this you know they published it the way trying to stop it i think victor let me see if they're right tha s exactly so anyway to wrap up the history some of the things that have happened since that split on october twenty fifth there was an update to the theory um classic network that basically um a change some internal prices it reduced the incentive for spammers to run ddos attacks on the pc network and then in two thousand seventeen they're wass diffusion of what is called the the bomb complex here the difficulty bomb basically when when ethereum was originally made it was designed for the difficulty to explode at one point making it almost infeasible tto be able to use proof of work and therefore forcing the network to transition to print of state so seeing as though the history had changed and there were now much smaller network that just didn't make sense so the ethereum classic basically had to get rid of that bomb in order to allow ethereum classic to remain as a proof of work network at least for the time being when that's coming soon that's why they're working on kaspar that's coming soon on ethereum i behave but that bomb was defused forty theory um classic all right i'm going to caution you a little bit i would say probably don't use the word bomb anymore i don't want any buddy listening into this podcast that wasn't before thank you karim you've got you used my name to remind people that take in that joke fantastic very good anyway that wraps it up for the history career but you're done talking about bombs i would like to move on to the other thing which is the rapid fire section so i'm going to ask him the questions that he would normally ask me is the theory of classic a coin token or platform platform all right is the syrian classic decentralized?

Brent:

Yes, very much so is it easy to move her out?

Karim:

Yes, this is easy can it be mined?

Brent:

It could be mined it cannot be state there's no plan for proof of steak in the immediate future and their main those live so get that one does it sound cool?

Karim:

Wow okay, so that that's probably the interesting question here look, i think ethereum classic is an effective name in that it denotes thie it really explains what the project is.

Brent:

There is no better explanation.

Karim:

It is ethereum it really is.

Brent:

And it's the classic version of the theory in before the fork i think ethereum is a good name the only thing i lad and i was going to get to this in the pros and cons but i do think that the name is a double edged sword.

Karim:

On the one hand, the ethereum name is a very powerful tool and on the other hand the syrian name is going to overshadow them by the second biggest crypto currency in the world, which is a theory i would have said, no, i know we like to weigh in on this cool sounding name.

Brent:

I do not think, even though it does succinctly describes exactly what the coin is, i don't think it does many favors to be being called with aaron classic, especially because almost every other fork is a pile of dog shit, especially when we're talking about bytecoin i mean, when you hear big point, private bytecoin time and big, quite gold like you just it's a cooked it's already and negative connotation in your brain because of how money grabbing that is.

Karim:

So the only argument i would make is when you consider that on the day after this was created, they were literally exactly theory.

Brent:

Um, it's a pretty tough pill to swallow tohave to change that name completely.

Karim:

Yeah, but they're moving forward.

Brent:

I feel like at this time next year if we're doing an update on this, we're not gonna be calling in a fire in plastic.

Karim:

I would make a bet that they change that name.

Brent:

No on a second.

Karim:

Put it on the board.

Brent:

Is this going to be one of the first crypto basic bets that we put on there, what's that i would take the other side of that bet i believe that the theory in classic will remaining theory um classic and i think that they will be able to afford to name for themselves and i don't think that there's going to be a rebranding so definitely a dog in this bet because kareem he seems to have done something in this research that makes it obvious that they're not going to change that no no no no not at all i didn't stumble up on anything that they never talk about the branding it was never even addressed that's why so my cards are on the table?

Karim:

I just didn't stumble on anything that insinuated that they were re branding that was just kind of like a speculative thing that you threw out so i was just letting you know i don't take that bet yeah, i would still be willing to make said that this is being released on may thirtieth, okay, so may thirtieth of next year one of our listeners will have to remind us of this because we're forgetful is how are we going right down with pen on paper but lose it because you know i'll make sure i put it on the disk or something do we bet anything in particular just some kind of humiliation, but we'll let the fans tell way we could do some sort of humiliation but alright may thirtieth ttc rebrand our right let's move on.

Brent:

We have the first official crypto basic that put it on the board.

Karim:

We need to have aboard.

Brent:

But we can't.

Karim:

We can't steal.

Brent:

Put up work that's from the fancy football, but all right, all right, so let's come up with a slogan and then put it on the way to put it on the black kane recorded let's, put a smart contract on it.

Karim:

All right, so anyway, so that's it.

Brent:

That was it for the right fires.

Karim:

Action.

Brent:

We got a little crazy.

Karim:

We're talking about what does it sound?

Brent:

Well, again, i just think, i think if they change the name, they would be very benefited.

Karim:

Teo, even if they kept the room, if they wanted to call like a theory blue, i know.

Brent:

But as we evolved past, doing things differently, the material i think they should have different and that's it.

Karim:

So let's talk about the things that they do that may be different from the area.

Brent:

More things that land to do is go to the teacher's instruction.

Karim:

Yeah.

Brent:

So a lot of this stuff is the same right that distributed computing the smart contracts that you work for the time being all that stuff they have gas which is used as an internal transaction pricing mechanism toe you know almost all of that is very similar so let's focus on some of the differences all right?

Karim:

One difference is that in twenty seventeen they changed the monetary policy so as you know we theory um has a relatively unlimited inflation rate which is decreasing right because it's constant but it continues so ethereum classic actually switched over to a new monetary policy that sets a limit for the total issuance the block reward in total was reduced by twenty percent this was on the block number five million and then it's going to be reduced again in another five million blocks by twenty percent bottom line is the total supply is expected to be somewhere around two hundred and ten million ethereum classic but it will never exceed two hundred thirty million e t c so that's one of the changes e tc is now less inflationary it's more modeled after something like bytecoin and then let's talk about some of the extra little features these air audition so number one they developed something called the sputnik virtual machine which is an implementation of the theory in virtual machine that aims to be plug herbal into different ethereum based block chains so that would be theory.

Brent:

Um, ethereum classic and anything that's built around that same system, which i'm going to give you an example.

Karim:

One this could be private changes well, private change that are built, modeled after these arian blocks and are built to interact with the fear and blocking so it's also a standalone virtual machine that can be integrated doesn't have to be on the block and itself, it can be integrated on ah web app, it could be interviewing a computer right now it can go on low power devices, but specifically they want to have sputnik operate for io ti devices, so they wanted to have it be able to run on ultra low power devices.

Brent:

So that's, kind of like the long term.

Karim:

So sputnik is an implementation of the theory in virtual machine, and specifically it focuses on speed and efficiency.

Brent:

Another development that they're working on is something called keys, really, which is inspired by btc, really, which i feel like we've never really covered on the show, so i'm gonna take the opportunity to explain, but have you heard of btc?

Karim:

Really?

Brent:

I don't know what we do see you later, i didn't really know about it either at all.

Karim:

So i stumble upon this.

Brent:

While i was researching the theory in classic, basically, btc relay is any theory, um, contract for something called the spv, which is the simple payment verification.

Karim:

Now, this isn't something new.

Brent:

It was actually on the original satoshi white paper, but spv is essentially, it allows a lightweight.

Karim:

Note or client to verify the transaction is included in the bitcoin blockchain without having the entire blocking because it's just using the block headers so you can take the block header to build a mini version of the bitcoin blockchain and then you can use the merkel root within the header to verify if the transaction was included or confirmed in the watching so a lot of the things that interact with bytecoin and can tell you of your transaction was confirmed and you don't have the entire blocking your probably using an spv so they're essentially creating the same thing with peace relay but in order to create inter paella bitterly interoperability with ethereum so the idea is once peace relays active you're going to be able to send ethereum classic tokens to ethereum or ethereum tokens to the theory um classic blocking and one of the points to differentiate their number one unlike the bitcoin relay is that this is to waste the big coin relays only for ethereum ah the btc really normally is just for on ethereum you can verify a bitcoin transaction but peace really is going to be two way so that you can either do it on the ethereum classic chain or the theory um chain and the way what essentially work is it uses something called the locking contract so let's say that you want to send me theory um or i want to have it on my theory and classic change so you could send me theory um and then daddy theory um gets locked up in the ethereum chain in a smart contract and then in the theory um classic watching tokens are created that represent that ethereum and then they can be moved around within the chain and at any time if i want to send them back to ethereum the tokens are essentially burnt and that burning process unlocks tum on the theory um change that's more or less like what's happening technically underneath the hood but ultimately the functionality means that you're going to be able to send ethereum to ethereum classic and you're going toe e t h t c and e t c t e th which is going to allow a lot of pross functionality mohr interoperability that sounds like the concept of the wrapped ethereum that we use on something like radar relaying, which, i guess that's where they got their name and that's.

Brent:

Interesting.

Karim:

So the creation and burn happens on the ethereum classic chain.

Brent:

The lockup and release happens on the ethereum chain, and then i guess that would depend on how often that happens, as it happens on both, just to clarify, like whatever chain is originating, the transaction is locking up those tokens.

Karim:

So if i'm sending ten ethereum to ethereum classic, then the tenney theory, um, on the theory of black man are going to be locked up.

Brent:

And now when the transaction is received by e tc, ten tokens that represent to ether are created so you can think of them as like e r twenty tokens almost where they are created.

Karim:

At that moment, i can moved them around internally in that block chain as if it was on the r c twenty token, and then when i'm like, okay, i want to i want to get this back on the theory.

Brent:

Um, they're just going to be burnt so that they no longer exist on e tc, and then they get on lot on the syrian boxing school it is very cool and it's going to allow e tc to participate in exchanges that on ly trey drc twenty tokens so that's a nice little bonus and then you know this isn't exactly on the block chain but i think this really goes hand in hand with ethereum classic they are releasing side chain independent boxing that's called calista so it was developed by the theory um commonwealth it's going to be a side change for a tc as i mentioned and it's going to have its own cryptocurrency called cielo it's going to be a proof of work blocking where seventy percent of the reward of the block reward goes to the miners and thirty percent goes to a treasure and the reason why this treasury if he is a little higher than most is because the purpose of callisto is actually pretty interest what ends up happening right now the problem that callisto is trying to solve is that smart contracts on ethereum have a pretty shaky history of not being the best quality and the reason for that is because unlike a web app you can't correct it as you grow once you put him out there they're immutable and unchangeable so to redo it you have to start from scratch so i stumble upon this great analogy made perfect sense imagine if facebook had to do an update and in order to do that update they just sent you a message saying, hey we had to change some things on facebook so here's our new website create a new profile and re upload all your picture.

Karim:

Yeah, well, yeah, you could be like no, right, but that's essentially what's happening right now to smart contract.

Brent:

So if you want to deploy a really good, smart contract, what you need is excellent auditors that are going to look at all the in and outs and all the possible exploits and all the possible i lost.

Karim:

The problem with that is that that's super expensive, especially if you're a small project?

Brent:

Sure, you know, big, big big time projects can get away with it, but if you're a start up in i c e o, if you're a small team trying to create something new, think it's pretty expensive, so the result is subpar smart contracts that get released into the blocking.

Karim:

Is that a problem?

Brent:

Well, it was a subpar smart contract that allowed the dow hack.

Karim:

So yes, this is a big deal.

Brent:

Yep, that's a parity smart contract is what locked up those tokens is.

Karim:

Exactly, exactly break.

Brent:

So what callisto is going to do is with the treasury fund, they're going to hire a full time team of smart contract auditors. They get paid out of the treasury from callisto in cielo, and then any developer can submit smart contracts and have him audited for free. So and then, in order to promote the cielo token as a store of value there also creating something called cold staking which essentially rather than have a ton of cielo betrayed around and speculated, you put it in a cold, staking wallet and it's earning interest as if it was a bank account, and it works kind of like a cd where you just have to keep it locked up for a minimum amount of time. So maybe it's six months a year, i didn't see any of those details. I don't know if they've released them, but your interest is also going to be paid out out of the treasury funds, so the cielo blockchain is essentially going toe function as an incentive mechanism and is an opportunity for smart contract auditing and it's going to open it up for developers also are developing for a theory and, by the way, so it's a really cool side concept, which exist independently, but he's also a knock zilly ery platform for your theory of many syrian classic that's cool, you know they're specifically allowing that to be both i wonder if they have if you could do it if you're not on the theory of yours that if you're on one of the other platforms that like cardano for instance i would imagine you could do it is as well if it's being developed by io h hey they probably are there no yeah it's it's a good point i didn't see the specifics but it would make sense to me at the end of the day i like the idea of having a mechanism where you could just i mean this is great for everybody because small teams get toe have good auditors, auditors get toe have stable income and the community gets tohave better quality smart contracts which is ultimately what we want that's going to protect our funds that's goingto give us more functionality so overall i really like callisto hasn't launched yet they already did an airdrop with e t c they took that snapshot but we'll keep an eye on that and see how that develops and then lastly, as faras the upcoming roadmap in twenty eighteen they want to finish their app is called emerald wallet they want to get that on mobile that should happen this year they wantto get the side chains out now they're calling their wallet the general wallet yes or it's just like a development no emerald wallet is what it's called actually have it downloaded here because i wanted to test it out.

Karim:

It's called dip emerald well, a theory um, classic team, maybe you should consider rebranding toe emerald that might be really cool.

Brent:

You should do that individual is going well, but could you always trying to angle tto win batsman?

Karim:

I can't trust you that's, a cool sounding yeah.

Brent:

So anyway they're going to keep optimizing, implement aside chains, get that on mobile and then in twenty nineteen, the goal is to work on scalability implements, charting so that they can get to over a thousand transactions per second.

Karim:

They want to focus on interoperability so that they can work with multiple block chains, and i believe they're going to implement some zero knowledge proves into their virtual machine.

Brent:

I'm sure that's going to create a lot of functionality, but that's, more or less a look at what's coming up, so they're looking for build some sort of privacy aspect into but the classic yeah.

Karim:

So it'll be interesting to see how they implement that, but i did specifically see on their road map that they were looking to implement zero knowledge proof cryptography under virtual machine in twenty nineteen now based on what we've seen from projects like pivx ix we know that's your knowledge proves can be used for privacy i don't know if they're just looking for privacy in transactions, privacy and smart contracts or if there's some other applications that maybe you and i are not so familiar with but that is in the development plan okay, that sounds awesome so that is a very great overview their features of structures which kind of how they're different from ethereum and how they're many ways to say and it looks like an over working thing with all of their features trying to put in is they want the stuff that work both ways so they want the theory of man ethereum plastic just still kind of work together in function together so that's kind of that's kind of interesting.

Brent:

All right, so i think it's time to go to our next section the last time you and i did one of these episodes, we didn't call us the pros and cons section and you are insistent so would you like a frozen come now?

Karim:

It wasn't a one on one it wasn't a one on one it was a one on one updates okay, so it's okay to call frozen guns when we're on one.

Brent:

No one's gonna want updates, kareem's got to get a little bit little bit more specific with this wording, so let's, talk about the pros and cons.

Karim:

All right, i'm going to start out with the cons.

Brent:

The first one, which you already mentioned, is the fact that their name and their history, unfortunately, there are so many negative connotations around hard forks, and money grabs that it has tainted public perception.

Karim:

So before ethereum classic gets analyzed on the surface, i believe that many people, investors, community members and maybe even developers, probably not the ones that are heavily involved.

Brent:

But, you know, people who are just learning about blockchain, they might look at the theory in classic, negatively or not, give them the second look that they deserve.

Karim:

So, unfortunately, has to be a cop.

Brent:

I'm going to say this when i've talked to people about the theory of classic and people of, you know, mentioned it's me what they oftentimes when i were here, and i mean for baited this from multiple people overthere in classic is just sitting here like they don't do their research, they don't know, you know, what's going on here, they don't realize the difference is, and to a non zeroex tent there kind of right, but it's very similar, but worth significantly less so is going to be fighting this uphill battle of trying to break out of the shadow of a theory omise long's it's called a theory in classic and isn't looked at some other way.

Karim:

I mean, if dash was called, you know, bitcoin dow or something like that, it would have a much more difficult fight, and it was it was originally a big coin for but nobody thinks of it that way or so, as faras cons go, this is gonna be the biggest thing that they that they have going against them, yeah.

Brent:

I agree with you and the only thing i'll say is it's important to remember that a projects valuation doesn't say anything about the underlying technology and additionally this is just an opinion this is not a fact but some of us believe that in the long run the technology will win out because even though when it comes to buying a coin we're really just dependent on public perception so the investors opinion is going to matter but when it actually comes to developing the decentralized applications to make sure programs work when it comes to the people who are creating the product then i think slowly maybe but eventually the better technology and the solid teams were went out so that's not to say that i think ethereum classic is going to be more successful than the theory um it's just to say that i think you fear him classic is a high quality project overall and should really not be characterized as quote unquote shitty theory um you know because it's just not a shitty project it just has a small value you a shin ok what else goes hand in hand another con is basically the same thing but it's always going to be overshadowed by ethereum i think your analysis even if people don't think negatively of it it will always be overshadowed anytime somebody googles the word ethereum or whatever i mean just the theatre is going to come up more and it'll be interesting how that relationship goes that could also be a pro.

Karim:

However, if they continued to develop and interact more and more and they become more more interoperable.

Brent:

That could actually be a huge benefit for ethereum classic, because there's going to be a very large ecosystem that can now jump in and out of the ethereum classic.

Karim:

In the end, we do talk about the psychology being the biggest driving force and the thing that mattered the most because the best technologies in theory will eventually get the moon users and be the most highly transacted in the most highly developed in that kind of thing. So it's got a great technology but keeps losing the comparison. If i'm deciding if i want to buy sio on the theory of plastic or ethereum, i go with the syrian, put my d upon their the interoperability will end up mattering and maybe it's, not so much a strict con that it's, uh, talking about hearing manny, right?

Brent:

And then the the last con that i will mention and i do think that this is a real con because of the history we have to remember that the way the theory um project is developed and basically guided through its development is through the theory um foundation till there's a lot of different options right? Some projects have ceos some projects have treasuries and some projects have foundations well ethereum classic after the split was left with none of those because they don't have a treasury they weren't in i c e o so they don't have a bunch of money laying around and the theory and foundation went with the theory in so the effect that that has had is that they have been very short on funds and this has slow development and they have had to be very careful and very targeted with how they use money and this also means that a lot of developers who might be interested in developing on e tc will forgo it to goto ethereum because there's just more money there and at the end of the day everybody's human and they have to put food on the table you know and these projects often time are very intensive and this means that it's it's an uphill battle now there's some additional things like there's something called the yeah ethereum classic lapse was just launched with a fifty million dollars fund which to help projects incubate i think that that's going to make a huge difference. But up until this point, there is no question that the lack of resource is has significantly stunted the growth rate for ethan classic that's enough negativity, man yeah, down, yeah, let's, move over to some positivity, sunshine, rain, bows and karim.

Karim:

What probate.

Brent:

Alright, the pros.

Karim:

Number one.

Brent:

Ethereum classic is very decentralized and aiming to remain decentralized. And just to give you an idea of how much they liked the idea of decentralization. Not only do they have multiple development teams, like totally separate teams that are development, like iowa h k, but also the ethereum network that launched callisto, the commonwealth. But on top of that, even social media, they're subreddit their forms there discord and their telegrams are all owned and managed by different entities so that no one group has control over the messaging.

Karim:

I think that the fact that they're trying to adopt a strategy of interoperability as opposed to a lot of projects right now, we're trying to go for dominance.

Brent:

So a lot of people are putting resource is into trying to say, i'm going to be the biggest project and invest in me ethereum classic is investing all of their resource is in being highly functional and interoperable, and i think that in the long run, that's gonna pay off big time. Another pro is that when it comes to announcements and hype, these guys are the opposite of tron. Instead of announcing the possibility of an announcement and announcement in something that's coming up and, you know, throwing partnerships left and right, they're kind of the opposite. They don't make a lot of noise, and by the time you hear about something it's launched, like the sputnik virtual machine there, explaining all it can do this there's thiss and it's going to be available now, it's available go check it out it's low and much extremely high quality team i know that that is a funny comment for us to make because we're not developers so how do we have the knowledge to make that assessment but based on the reputation and history of the people involved when you look at companies like io h k like charles hoskins aion when you see the eat those behind this team this is a high quality project and even something like the emerald wallet which i downloaded just to try it out because i don't have e t c but i wanted to see how long it took to install how easy was to use the user interface it is beautiful it is clean their websites beautiful and clean these air good teams i mean this is a high quality team it's available basically everywhere which is another problem and they have really strong guiding principles one of the things that we all often worry about is not just money grabs in centralization but just the idea of incentives being aligned as i mentioned at the beginning of this episode this is a highly idealistic community that is really guided by the principles of decentralization in mutability and openness and i think that you know for people like us that's something that we're going to like a lot and then lastly i mean i mentioned that as a con and also approached the fact that they're going to be so interoperable with the theory um that ecosystem i think in the long term, my benefit them and we'll see.

Karim:

Maybe after they do brents rebranding, they're just gonna pull skyrocket.

Brent:

I think we should just be calling it, you know, one of the couple things, the emerald sure brent coin would be great crypto basic coin.

Karim:

Also, if they wanna use our name, they're welcome to e. I got to tell you, i like the ethereum classic.

Brent:

It just rolls off the tongue a little better than crypto basic coin.

Karim:

All right, so this is the part of the show where we normally tell you were by it like you said, it's basically available everywhere. I also want to point out that not it's available like even in the circle invest app, which is the one that was kind of released by the team that heard the company took over polonia axe. They only have seven available coins. They're going to hear a big cash litecoin monero zcash theory classic, so it's even available in places where basically nothing else is. So it is all over the place, yeah.

Brent:

And they're actually one of the only coins that's also i don't remember who manages it but they're actually have like an institutional investment fund ah fund that offers an investment in just ethereum classic and they only offer like five coins it's like big pointy theory um i think ripple anything room classic is one of them so these guys were literally everywhere including the legacy financial system all right, so now that that's out of the way this is always a little bit of a weird subjective kind of one that we throw out there what do we consider their competitors look, they're trying to be a platform so i'm going to say the big guy's ethereum obviously and clearly also cardano neo icon the major platt forms are in direct competition with ethereum classic which you know that's mighty mighty mighty competition i would simply like to emphasize though how much they're not focused on necessarily being the biggest one of these as much as being able to work with all of these all right?

Karim:

So if they're trying to work with everybody and they're trying to create peace and harmony and everything soothing like that tell us what you see in their future check out the crystal ball was you see the personal future outlook section, huh?

Brent:

Wow, i didn't say it exactly like i was supposed to increase it like you mean the personal future out all right i just want to emphasize the fact that this is opinion and were no longer covering effects, you know?

Karim:

And that i don't you know how i feel about predicting the future it's hard anyway, you just made a bet with me about predicted the future.

Brent:

Stop it, it's, not our fair enough.

Karim:

Good point.

Brent:

All right, so i believe your theory um classic is going to be very successful.

Karim:

I think that their technology will continue to solidify them in this space.

Brent:

I don't expect them to ever overtake ethereum, nor don't necessarily think that they do, but who knows? You know, like hey, caspar hasn't been implemented difficulty bomb coming down the road, it will be interesting to see how it plays out. The reality is i don't necessarily see ethereum classic like becoming a top bytecoin nor do i think that that's relevant or necessary. I do, however, view this is a project that, based on high quality, good principles and decentralization, will continue to consistently grow will continue to be a player in this space and will continued to provide good functionality and good applications that are over all going to be beneficial for the space. So my personal future outlook for ethereum classic is that it's going to be good for blockchain as a whole all right, you know, you always liked teo yell at us for not putting ourselves out there.

Karim:

But you said a very specific, cool prediction of the future in your future prediction. Is there any time when they re brand no now, never not even all right?

Brent:

I mean, within the next two or three years, obviously, and after that, who knows?

Karim:

Like i said, we don't even know if we're war three already started by then, so you might have to re brand, yeah, that's, a good point.

Brent:

Okay, well, that pretty much brings us to the end of our ethereum classic, one o one siri's episode.

Karim:

If this is the first one of these you've listened to, and you enjoyed it, thank you for enjoying it, and also you could go. Is it all our other episodes? You just listen to him, you can take the time to download them. That would be great all that.

Brent:

All the one on ones tackle points with this basic formula, and we, like tio, really get into the nitty gritty.

Karim:

You could see the length on these episodes. I remember we started this podcast. We said things will be like twenty thirty minute episodes. Max. Yeah, it didn't happen, it's. So here we are, releasing three hour long episodes a week, and finally, here is going to be a really cool extra thing that we didn't even discuss and all us up. So we should take this up a lot more. In the end, we're coming at you with the crypto combo. Tomorrow, we're going to be talking with anthony lusardi. He is the if you director.

Brent:

Only thinking of the ethereum classic cooperative so he is ridiculously important with the ethereum classic and we have develops and great questions for him kareem is going to speak with him because he is the most well spoken of all of us way want to put our best foot forward so kareem's gonna be speaking with him and you can look forward to that episode being released as an extra episode tomorrow thursday thirty first if you want to have any input on our future you want to have a vote in what goes on with quite the basic joined the discord is the primary way that we communicate when the community and you could join a big red button on every one of our show votes on our website grip the basic podcast dot com we're also going toe pull we are considering forking the podcast to remove brent and we're going to be called crypto basic classic let us know what you think i just can't wait can get rid of brent if brand leaves the podcast falls apart so we're going to have to keep this team united you guys don't get that mulligan there's you fucked up you fucked up joining me way being involved in this like you are you mean that was a story too late it's too late all right so for karim birthday michael aki and now myself brand philbin we're out of here thank you for tuning in and remember, we are not financial advisors.

Karim:

We're idiots.

Brent:

Please do your own research.

Karim:

All investments have inherent risks.

Brent:

Do not risk anything you can afford

The members of the CryptoBasic podcast are not financial advisors, and this information is provided for entertainment purposes. Please do your own research, and don't listen to these idiots.

The CryptoBasic Podcast is owned and operated by Cipher Consulting Group LLC.