Full Transcript: The Community Wants to Know (S2 Ep3)
Host: Good afternoon, Alex. GM Cardano. Today we have Alex, one of the OGs of crypto and Cardano. I have invited him here to understand how the space evolved from the past to the present and where we are today. I’ve seen a lot of OGs leave the space, but I feel that the legacy is sometimes being left behind. I invited him to understand crypto, blockchain, and Cardano and its surroundings. Welcome, Alex.
Alex: Thank you for the invite.
Host: Today I first wanted to know how long you have been in blockchain and Cardano—both crypto and Cardano.
Alex: I first got into crypto when I was in Japan. I had a Mount Gox (spelled “Gaus” in source) account, which was one of the original exchanges for doing Bitcoin trading. It was pretty early on. I made a little bit of money because I’m half Japanese American and the price of Bitcoin was different in Japan than in the US, and there weren’t all these ARB bots set up yet. Basically, I was running cycles buying Bitcoin in one country and selling it in the other. I think there was a premium in Japan at the time. I stopped for a bit, and then when I was in grad school as an architecture student, I was building workstations for my architecture friends. Unfortunately, they were all Nvidia CUDA based systems because that was what you use to do 3D GPU renders. We didn’t mine Bitcoin even though we had free electricity in the studio. We had 10 or 15 of these machines I had built for all my friends in the cohort because you could only mine 10 or hundreds of Bitcoin a month instead of thousands with an AMD GPU. We sat that out, and then when Bitcoin got to around $100, my friend and I decided to each put five grand in. We bought about 10 AMD R9 290 GPUs and started mining Litecoin to sell to Bitcoin. This was around 2012 or 2013. We built these water-cooled systems and were mining Litecoin to sell to Bitcoin. It was pretty regular that pools you were mining in would get “hacked” by Russians and then your rewards would go down. That was one of the things that appealed to me about Cardano initially: the pool auto-distribution nature.
I’ve been in crypto for a long time. I missed out on Ethereum because I got a job after grad school and got liquidated for $20,000 overnight on a margin call I left open. I decided I couldn’t be active in crypto and have my R&D career developing at the same time. One of the biggest mistakes I ever made was getting out of crypto and focusing on my career, although I’m happy I did that in the end because I developed some actual skills in the real world instead of just being a crypto bro. When I was in India, I was learning Haskell because I thought I would want to make a purely functional blockchain, and I was crushed to find out that Cardano existed at the time. But then I thought this was good because when I looked into it, it seemed like there was a much better group of people and more talent and more capital working on it. I could shift to “what do you do on a blockchain like this?” instead of “how do you make a blockchain like this?”
Host: It’s fine. If you have been here since 2012, we have seen how the space has evolved. In 2012, I was just a 13-year-old kid. For me, listening to someone from that time is legacy history that I don’t know about. A lot of people from that time were Bitcoin Maxis and they are the people who are today’s leaders pushing the industry forward.
Alex: I think all of us are surprised at how wildly successful the space has become. I don’t really like what it’s become. The main problem with crypto is that it almost grew too fast. When I used to complain about things, people would always tell me, “Alex, this is not just Cardano you’re talking about. This is humans in general.” They were right. By default, the more of a population you sample, the more average the group tends to be. What was really interesting about crypto early on was the freaks and geeks you had together with radical ideas about how to structure society. Over time, bag holding and putting in $50 to retire your bloodline became the main focus, and people forgot or never knew what it was really about in the first place, which was essentially to tear down existing institutions that had failed to serve their constituencies and provide an alternative system. I was never into integrating with the system; I wanted to replace it.
Host: The story changed after some time; people wanted to build something new outside the regular system because we feel it’s a broken system and was not really helping what it was supposed to do. When we see today, we as an industry are exactly going down that road. How do you feel about that?
Alex: All this clarity stuff is really bizarre to me. I think it was 2015 when demonetization happened in India.
Host: 15.
Alex: I was in Mumbai when that happened. Demonetization was when the Prime Minister of India announced at 11 p.m. that from midnight all the bills were no longer valid. This was an attempt to clean out “black money”—illicitly earned non-reported earnings in cash. It showed you that the only thing backing fiat paper money is the faith and will of the government. People had to return their bills at a bank and get new bills printed. If they didn’t have a good reason for why they had lakhs and crores (spelled “lacks and crows” in source), they were supposed to be caught. Indians figured out ways to launder all this money through their local villages. I think 99.8% of the money was recovered and they were hoping it would be much lower.
In India, there was an inherent distrust. In the West, we often think the government has my back, but when you live in a different kind of society, you expect the people with power are trying to screw you over. I always thought crypto was well-suited to India and China and these authoritarian regimes. In Mumbai, I would read stories about Indian guys caught at the airport smuggling gold back in their rectums. If you just got a YubiKey or a Ledger, your anus could remain intact and it’s a lot easier to move this. Gold is nice because you can store value, but in an economy where inflation is 8%, you’d be stupid to keep your money in a bank earning 6%. This made me realize this whole inflation, savings account, and mortgage rate cycle is always just plus or minus 2%. Locations like this have such a use for a store of value that is not easily confiscated by the government. The level of trust in the West is much higher than in developing countries. When money is run by the government, developing markets have a huge use for non-government-issued currency instruments.
Host: Trust in government in developing nations is a problem, but coming to India, it has improved a lot in some ways and is deteriorating in others. There’s a huge market in developing nations in Asia. But today the industry is looking at just one place of the world and that’s the place which is deciding everything about crypto or blockchain. Is that truly decentralized? The price should not be dictated by something happening in just one corner of the world; it should be on a global level.
Alex: That’s just a reflection of the market because most of the capital is from the US right now. If you actually want to focus on solutions, it probably makes sense not to be targeting that market because they already have neo-fintech banks like Revolut and Wise. India also has UPI.
Host: The UPI payment system is free to use, instantaneous, and everyone with a phone number can send and receive money to each other instantly for free.
Alex: When I started in crypto, international money transfers were very slow and painful. Now with Wise and Revolute, this is instantaneous because they have an internal ledger. That is probably what has killed crypto the most: it used to have a real advantage over the banking system, but the banking system has caught up. It really shifted away from using money to storing value—the store of value thesis of Bitcoin. Early on, Bitcoin was cheaper and faster to use than traditional fiat-based wiring systems.
Host: Let’s dive into Cardano. You have been one of the prominent voices raising questions. The industry is mainly controlled by people who have technical knowledge. When common people try to join this revolution, it’s very hard for them to understand what is happening on a technical level. Is it a blocker for people to really get attached to it?
Alex: It’s completely a blocker. A few years ago, I started to realize that a trusted entity was a superior solution for the vast majority of people because the vast majority of people are code illiterate. This “code on the blockchain” idea means you delegate trust to other people to tell you that it’s okay to use these systems. There is some kind of safeguard that there might be hundreds of people looking at the code, but on these smaller chains, it’s really just security through obscurity. Especially with Cardano, people always talk about it being more secure—that’s nonsense. You can code business logic in any Turing-complete language. That happened on Cardano with the JPG.store sale where NFTs were sold under the list price, or the Minswap thing where they essentially hacked themselves to preserve customer funds. People always mix up the UTXO stuff; you have local sharded state, but it can still be manipulated.
My main split with the Cardano community happened early on with the old multi-SPO versus single SPO situation. I was here for decentralization and thought we should restrain ourselves to running a single pool, but the protocol allows it. You cannot really run any blockchain system with this friendly mindset; you should expect an adversarial PvP environment. That’s why Bitcoin works: you expect everyone out there on the network is trying to screw you over and you try to prevent yourself from being screwed. This “good vibes only” mindset weakened the Cardano community’s mindset to be a little bit too friendly and a little bit too ineffective.
Host: I couldn’t agree more. Wherever I go, people say there is no incentive and we need to bring incentives to people to do good things. If that was the only way, why would the real world have punishments and rules? They know human nature is flawed. In Cardano specifically, we talk about governance, but they forget that there are no penalties for those doing the wrong things. People doing good things are bearing the cost of the wrong people.
Alex: The best example of this is setting a cap limit on how much stake a single pool can have. You handicap the people who are willing to limit themselves to one pool and play by the system, and you allow people who are willing to spin up multiple pools to go over that cap. The incentives are backwards. If the cap is 64 million ADA and you’re willing to run four pools, you have 256 million and you are doing something against the interests of decentralization. A popular single pool operator like Smaug is only able to have 64 million ADA because he’s willing to “paint within the lines.” It’s a dumb idea to punish people who are above board as opposed to those who exploit it. You have to think about the second and third-order effects of regulations.
Host: Is Cardano truly decentralized, or is it just a fetish that the people still holding it believe in? Can you give us perspective on that part from the technical to the social layer?
Alex: In some ways, Cardano is decentralized. It depends on what you say is Cardano. To me, the most interesting thing about Cardano is really just the group of people that have assembled. Even if the node and the network were deleted, there was a very high signal-to-noise ratio of motivated people who were here for the right reasons. That has dwindled over time. I blame NFTs because they went live before smart contracts did. You had all these idiotic projects promising metaverses and roadmaps; they were basically Discord mods or gamers making promises that they had no way to keep. I don’t even call them scammers; they were under-informed people trying to raise money, and empirically they end up in the same way.
Cardano could be the most technically adept network, but if we poorly allocated capital, we would still fail because the teams that we backed did not actually deliver on their promises. Allocating capital is actually a skill. I worked for the Godrej family (spelled “Gd” in source) when I lived in India, who are Parsis from Iran. They are Zoroastrians—one of the original monotheistic faiths. They are very philanthropic; they don’t even bury their dead because they believe they should give back to the environment, so they leave their dead bodies out on cliffs where vultures can eat them. I saw a lot of poor capital allocation decisions where they would continue to throw money into underperforming businesses. If you throw good money after bad, the market corrects you, but it doesn’t happen very fast because they have so much money.
In this ecosystem, we were pretty poor at allocating capital. I don’t understand why governance isn’t more compartmentalized. Setting a course is different than executing and sailing that course; these are distinct skill sets. Much of the actual work of Cardano is already done by external contractors like Tweag (spelled “Tweige” in source). There’s this false dichotomy that you need IOG to do things. There was a famous Rust versus Haskell node knockout where whichever team finished first was going to win. Competition generally leads to better outcomes. You keep giving money to the same people who told you things were going to be great when they have proven not to have turned out that way. The whole point of democracy is a peaceful transfer of power. If you’re not going to transfer power, just have a monarchy and be much more efficient instead of having this “decentralization theater.”
Host: I’ve heard funding entities tell the community that we don’t have people who can execute on a big level. It means they don’t know the community or the competitors were pushed out by them so that they alone can decide what happens on chain. We discussed Alex’s background, the evolution of crypto from outside the system to being entrenched, and the blockers for non-technical people. We came to the decentralization of Cardano being “theatrics.” Is there still a 1% chance for Cardano to turn things around?
Alex: My knee-jerk answer is no, but there must be a slim chance. The people who are here are intelligent and driven. If they just took the leeches off of their body, they might have a chance of doing something interesting. But I don’t think anything can happen in Cardano when you have this literal tax being captured from everyone and driving deficit spending into these entities which have demonstrated for 9 years where they have taken Cardano. The Cardano node is like two transactions per second. Don’t hit me with the “transactions within transactions” nonsense; those take up more space and push other transactions out of a block. The tech is beyond irrelevant at this point, but the community spirit has more value now because crypto has hollowed out. You can see that with the way Midnight is leaching off of Cardano. Nobody is launching a new blockchain in 2026; it’s idiotic to think you can start a new network. IOG had to shift the community over because there was no way to bootstrap a new community in 2026. The tech is dead and everyone in Cardano knows it. Midnight threw out the Haskell sidechain SDK to rebuild with the Polkadot Substrate one. What does that tell you about the Cardano stack if even the internal IOG engineers were like, “I do not want to work with it, it’s garbage”? The disconnect between what internal IOG engineering was saying and what was being broadcast to the public is the heart of my disagreement. You cannot lie to people or deceive people intentionally with the state of an engineering project, especially when you have a financial interest in it. That is unforgivable.
Host: Last year we paid almost 96 million ADA to IOG to maintain and develop stuff, and this year they ask for even more. Is Cardano completed? Charles himself said Cardano was completed in 2020. If it is completed, why are we paying so much?
Alex: It’s a renting monopoly. IOG is asking for the money because they think they can get it. In politics, you have the “bully pulpit” where the president has the ability to whip people regardless of his actual constitutional power. You’re never really going to beat Charles; it’s his chain. Anyone with brains left the ecosystem realizing that it just wasn’t going to move in a different direction due to the cult of personality. Cardano for me now is just entertaining human social drama. I think of it like four cats—watching how the cats relate to each other and seeing who is the villain and who is the hero. I’m just watching to see who is going to break today, who is going to stand up and try to grow a spine and then get their face kicked in by the mob. It’s a bingo game of who will stand up for truth and call out abuses. People ask why I’m still here. It takes nothing to scroll Twitter for 20 minutes. I asked if people regret getting into Cardano, and the answer for most is probably yes because they are down 98%. That is a crushing loss. I made a lot of money on Cardano because I created a product that people liked. I feel a sense of responsibility to people who gave me the freedom to work on my own personal projects. It’s not moral if you’re in a burning building to leave without warning other people that the building is on fire. If you walk into a room and see your father screwing your sister, there is only one moral action: you take your father out. I don’t understand people who are okay with someone in a position of power screwing over people they care about. Whale “bitched out”—he knew what was going down and where things were headed, but he just deleted his account. He could have made a principled stand. I’ve lost the ability to look at some people with warm feelings because of how they choose to conduct themselves publicly. I just don’t dance.
Host: Is the future of Cardano enterprise adoption or retail?
Alex: It’s not going to be enterprise. I worked in R&D and saw so many blockchain POCs for supply chain tracking. Institutional finance with RWAs might happen, but how many New Balance shoes or wine demos do we need before we understand that businesses don’t care? The only real lane I see is privacy enthusiasts who want autonomy over their money. I don’t think that involves becoming personally wealthy due to being early.
Host: Okay. So that’s thank you for joining the space today and I know Mintton you wanted to speak something but the space that I run is where only the host and the guest are allowed to speak where because I am not here to start fights or debate between people right so I will invite you on a space next time so that we can have a free talk you can share your opinions and stuff and I also promised Alex that I will I won’t allow anyone to you know be speaker here respecting his time because I told him it won’t be more than an hour of time. So today, thank you for joining us and minding note, I do this not to attack but to protect the integrity of Cardano to the delegators, the developers and the daily users. You are the heartbeat of the chain. Your voice is your power and the facts are your fuel. You are going bigger, better, and braver to ensure that every voice from the largest whale to the smallest builder is heard. The hot seat is just getting started. I’m your host. See you at the next episode of the Community Wants to Know.
Alex: Vidosto (spelled “Vadosto” in source). Talk to you later. Bye.
Host: Bye.