podcasts

Connected Blockchains, with Ethan Buchman of Cosmos

podcasts

Connected Blockchains, with Ethan Buchman of Cosmos

Ethan Buchman, the Co-Founder of Cosmos, takes listeners through a philosophical ride on politics, economics, the hyperlocal, and cooperatives. Learn about the problems that corporations afflict on society and how blockchains and a multi-scale infrastructure that bridges the hyperlocal and global could make our society a better place to live in.

Posted by Connected Blockchains, with Ethan Buchman of Cosmos - December 2021

Background

Connected Blockchains, with Ethan Buchman of Cosmos Outlier Ventures

  • Co-Founder of Cosmos
  • CEO of Informal Systems
  • President of the Interchain Foundation
  • Has a background in biophysics, machine learning, neuroscience, statistical inference and complexity
  • Always thought that he would become a professor. Decided otherwise after he learned how corrupt academia is
  • Stumbled onto Bitcoin and the open source community and saw how all these disparate fields are coming together

Cosmos

Connected Blockchains, with Ethan Buchman of Cosmos Outlier Ventures

  • Internet of blockchains project founded in 2017
  • Grew out of the Tendermint project
  • In 2016, Jae Kwon and himself, the two Co-Founders of Tendermint and Cosmos, envisioned a world with millions of blockchains
  • They saw the need for the different blockchains to be interoperable with one another — this was the crux of the Cosmos project
  • The Inter-Blockchain Communication (IBC) protocol went live this year and they hit a milestone of a million IBC transactions last month

So the idea of there being a proliferation of blockchains, you know, thousand, or millions of blockchains was still kind of heretical, and everyone was trying to build the one true chain, it was gonna be Bitcoin or Ethereum or something else. And we saw a world where there would be many blockchains.

– Ethan Buchman

The Interchain Foundation

Connected Blockchains, with Ethan Buchman of Cosmos Outlier Ventures

  • A non-profit foundation set up in Switzerland in 2017
  • After they had written the Cosmos whitepaper, they set up a foundation to raise money to fund the development of Cosmos
  • Goal is to steward the creation of this interoperable, sustainable, community-owned ecosystem
  • It’s still operating today and employs a number of core developers and funds dozens of other projects in the ecosystem

Informal Systems

Connected Blockchains, with Ethan Buchman of Cosmos Outlier Ventures

  • A company that spun out of Interchain Foundation at the beginning of 2020
  • He’s the CEO of Informal Systems
  • Informal Systems is a core contributor within the Cosmos ecosystem. They do fundamental R&D on Cosmos protocols and is one of the lead developers of the IBC protocol
  • They have built Hermes, which is an IBC relayer that connects blockchains together
  • They build tools to enable software developers to get higher guarantees out of their software
  • Started doing security audits this year
  • They also run a proof-of-stake validator
  • They are structured as a workers cooperative

Why Are Cooperatives Important?

  • Historically, a lot of the institutions that are built around modern civilization were kind of accidental
  • The corporation as we know it today came together in the 19th century through a series of laws that made it possible for anyone to get incorporated and limited liability

We kind of bumbled their way into them, you know, they happen here, a law showed up here or there, some economist had an idea and lobbied the government for something, and then we ended up with some institutional structure.

– Ethan Buchman

  • We rapidly ended up structuring our civilization on top of corporations
  • The problem with corporations is that it insufficiently represents the stakeholders in society
  • Even the legal system is biased to favour shareholders and to return profits to them
  • Have observed the destruction wrought by unaccountable multinational corporations
  • Cooperatives do it better by embedding other groups of stakeholders in the governance structure
  • Have a model in mind where we have more cooperatives in society

On Cybernetics

  • Reads cybernetic literature
  • Was heavily influenced by Buckminster Fuller, Marshall McLuhan, and George Lakoff

His Twitter Bio

  • Has put “Internet Biophysicist. Sustainability Existentialist. Monetary Localist.” in his Twitter bio. Made all these things up so as to prevent people from putting him in boxes
  • In his 20s, he was trying to derive physics from politics. In the 19th century, a lot of people were doing this and they came up with Social Darwinism
  • The Sustainability Existentialist disposition comprises of the following concepts:
    • The emergent systems in the universe seem to contravene the second law of Thermodynamics. Entropy is always increasing. Hence, corporations have ended up becoming so dominant
    • We also have organisms and ecosystems that seem, at first glance, to contravene the second law of Thermodynamics. However, when we study them further, they don’t actually contravene the second law. These organisms/ecosystems are able to produce sort of more dissipation overall than if they didn’t exist

And so that sort of idea that a sustainable system is one that effectively represents its environment inside its internal structure in order to store up energy and respond effectively to changes in its driving signals. That’s sort of the crux of my philosophy.

– Ethan Buchman

  • Creating local organizational forms could help to reduce complexity in society
  • Blockchain enables a revolution in coordination that is built on top of a communication layer. It is able to address many of these systemic problems in society

How Does A Blockchain Of Blockchains Resolve The Tension Between Free Market Fundamentalism And Collectivism?

  • Thinks that dichotomy is a bit misguided
  • Markets have a really important place in the world. The problem is a completely market-oriented society because that would corrupt the values of land and labour
  • Blockchains help to restructure the conversation and to make people think about what money is
  • The concept of money suffers from the same problem as land and labour. People think of them as commodities

I think the key idea is that markets have their place, but they need to be used for actual commodities for things that can be meaningfully subject to the laws of supply and demand. Labor, land, and money aren’t actual commodities, they’re so called fictitious commodities. When we try to subject them to the whims of the market, we misrepresent their actual value.

– Ethan Buchman

  • Need to have the correct institutional forms which should be bottom-up, local, and governed by cooperatives
  • This is embedded within Cosmos’ philosophy — sovereignty and interoperability. Communities have sovereignty over their own infrastructure and applications that they use and still remain interoperable with other chains
  • In the early days, they pitched Cosmos as an application specific blockchain. This is held in contrast to Ethereum where users are not sovereign:
    • It’s run by Ethereum miners
    • It’s subjected to the Ethereum Virtual Machine
    • It’s subjected to the whims of Ethereum governance and upgrades
  • Users of apps on Ethereum are not sovereign over that particular app. They are subjected to the larger political economics of the Ethereum network

Just like there are a lot of benefits to being ruled over by the empire of Alexander the Great, he takes care of your security and a lot of things and will protect you, but you have to pay taxes, and you may get drafted into the army and things like this, right. And so the idea with Cosmos was to enable each application to really be its own sovereign blockchain in its own right.

– Ethan Buchman

  • With Cosmos, each blockchain determines its own parameters without being subjected to the whims of other networks

What Industries/Verticals/Use Cases Is He Seeing That Benefits From This Kind Of Network Configuration?

  • Plenty of Cosmos-based blockchains are specializing in certain aspects of DeFi and payments
  • Terra and Crypto.com, which are Cosmos-based chains, have very active, widely adopted retail scale payments infrastructure
  • Is interested in sustainability. Some Cosmos-based chains such as Regen Network and IXO Blockchain are tackling this issue
  • Althea network is running real world, mesh net infrastructure in rural communities

The Cosmos technology sort of applies equally well to both, whether your community is at the level of a small rural town that just wants to provide its own internet, or it’s at the level of the entire globe trying to heal the planet. The coordination technology is useful at all scales.

– Ethan Buchman

How Do People Differentiate Whether They Need A Blockchain Or A DAO On A Blockchain?

  • Depends on the needs of a particular community as to whether a smart contract suffices or if it needs their own blockchain
  • Annoyed with the whole DAO discourse. There’s so much tooling that’s missing to make DAOs work. They will be addressing some of these issues with Cosmos technology
  • Sees the end game as some sort of sovereign interoperable city states, with each city running its own blockchain

DAOs And Blockchains

  • Each blockchain is, in some sense, a DAO
  • Each blockchain will be more representative of its users and be owned by its users
  • Many DAOs are being formed, but they don’t have anything to govern
  • Thinks that there should be more DAOs that focus and support real world economic activity and infrastructure
  • Need to have a multi-scale infrastructure, with the right infrastructure at each scale to bridge the gap between the hyperlocal and the global

Thoughts On The Metaverse

  • Does not think of the Metaverse as an economic Metaverse because it ends up hiding all the politics that make it work
  • It’s not just hyperlocal, it needs amalgamations of localities to properly represent the global as some kind of cooperative
  • Bitcoin tries to be purely economic, but has heavy political elements to it as well

Books Recommendations

  • The Great Transformation by Kyle Polanyi — How capitalism emerged, what are its roots, and the concept of fictitious commodities
  • The idea of land not actually being a commodity and the rules of private property should not apply to it

Connected Blockchains, with Ethan Buchman of Cosmos Outlier Ventures

This podcast summary was prepared by The Reading Ape in collaboration with Outlier Ventures. The Reading Ape is a humble servant of the written word.

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