Soulbound: On or off Chain? | Vitalik Buterin and Evin McMullen

A fascinating intellectual debate is emerging in the world of decentralized identity. Today, Vitalik represents Soulbound NFTs, while Disco’s Evin McMullen takes the side of VCs (verifiable credentials). From your credit history to your college degree, what is it that defines you? What does decentralized, trustless, digital identity look like? After listening to these two gigabrains hash it out, we’re convinced that the real winner of this debate… is humanity. ------ 📣 METAMASK | The Easiest Buy in Crypto https://bankless.cc/buy ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALED ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🏦 ROCKET POOL | DECENTRALIZED ETH STAKING https://bankless.cc/RocketPool 👻 AAVE V3 | LEND & BORROW CRYPTO https://bankless.cc/aave ⚡️ MAKER DAO | THE DAI STABLECOIN https://bankless.cc/MakerDAO 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave ------ Topics Covered: 0:00 Intro 4:30 Setting the Stage 7:50 Chains and Identities 11:46 Governance 15:14 The Data Backpack 21:22 Non-transferability 27:52 Token Externalities 34:32 Soulbound Privacy 41:30 Proving Negatives 46:20 Inclusion & Neutrality 50:19 The Disco Pill 56:05 All Directions at Once 1:02:36 A Case Study 1:07:49 Zooming Out 1:12:50 Closing ------ Resources: Evin on Twitter: https://twitter.com/provenauthority?s=20&t=Y6vQEWWHoUCqnF-wAm81qg https://twitter.com/provenauthority?s=20&t=Y6vQEWWHoUCqnF-wAm81qg Vitalik on Twitter: https://twitter.com/VitalikButerin?s=20&t=Y6vQEWWHoUCqnF-wAm81qg https://twitter.com/VitalikButerin?s=20&t=Y6vQEWWHoUCqnF-wAm81qg Disco: https://www.disco.xyz/ Soulbound https://vitalik.ca/general/2022/01/26/soulbound.html ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:07David Hoffman?

  Bankless Nation, I'm joined by two people who are paying attention to the world of credentials. We have Vitalik Buterin, founder of Bitcoin Magazine, Global Citizen, and record holder for the highest number of unmerged and ignored EIPs. Vitalik has recently been an advocate for soulbound NFTs, which are NFTs that cannot be transferred, which offer alternative use cases than the NFTs you're probably familiar with. Vitalik, welcome back to the show.

• 0:30Speaker 01

  Thank you very much for the lovely introduction, David. It's great to be here.

• 0:33David Hoffman?

  Cheers. And also, we have Evan McMullen, founder of Disco XYZ and core community member at the Boys Club. Evan is working on the world of verifiable credentials and decentralized identifiers. She's a devoted advocate of privacy and consent, and which she believes are the key ingredients to producing an off-chain decentralized identity system which preserves user sovereignty. Evan, welcome back to the show as well.

• 0:54Speaker 02

  Thank you so much for having me, David. Let's get this party started.

• 0:57David Hoffman?

  Yeah, let's do it. Okay, so a little context for the show. I met Evan during my crypto travels, and it became immediately obvious to me that she's an aficionado of data primitives, tokens, NFTs, on-chain and off-chain, and decentralized identifiers and VCs. Learning about these off-chain primitives, DIDs and VCs, felt like for me like learning about crypto for the first time, where like it was super complicated, like broke my brain. It was hard to wrap my head around. But as soon as I saw it, I was immediately pilled, which is something that we now call taking the disco pill. Which to me, the basic idea of the disco pill is to meme self-sovereign identity into existence, and that requires off-chain data like DIDs and VCs. VCs, not venture capitalists, but verifiable credentials. So because you, as a human, do not live on chain, you are not your Ethereum address.

• 1:41David Hoffman?

  You can't lose your soul like you can lose your private keys, and you also can't spin up new souls like you can spin up new private keys. So therefore, also, your soul cannot be tagged by external graffiti artists, like how your Ethereum address can be airdrop spam. So after talking to Evan, she's like burned it into my brain that on-chain tokens and on-chain data, or anything on-chain really, is not sufficient to fully express your human identity. Meanwhile, this human you might know, Vitalik Buterin, releases a blog post titled "Soulbound NFTs", which makes the case for NFT tokens. That cannot be transferred, which start to behave very much like the verifiable credentials that Evan is so obsessed with, except for one key difference. The data for a soulbound NFT is fixed to an open, public and permissionless ledger. And I'm not used to disagreeing with this metallic. I'm also not sure if I do disagree.

• 2:25David Hoffman?

  And so this is what we're here to do today is to get down to the bottom of this conversation. When should we be using off chain credentials? And when should we be using a soulbound NFT? What are the merits of each? And hopefully we can educate the listener enough to expand their minds about the possibilities that are unlocked, which we tackle some of these tough identity questions and then your world that can emerge from that. So guys, that is my opening rant. And so thank you for bearing with me on that. Arbitrum is an Ethereum layer two scaling solution that's going to completely change how we use DeFi and NFTs. Over 300 projects have already deployed to Arbitrum and the DeFi and NFT ecosystems are growing rapidly. Some of the coolest and newest NFT collections have chosen Arbitrum as their home. All the while, DeFi protocols continue to see increased usage and liquidity.

• 3:09David Hoffman?

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• 3:52David Hoffman?

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• 4:36David Hoffman?

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• 5:21David Hoffman?

  members are all robbing about at governance.aave.com. Vitalik, any comments or perspectives that you want to share before I get into my first questions on that?

• 5:30Speaker 01

  Sure, yeah, I mean, I think, first of all, I definitely don't consider myself an on-chain maximalist. I think the thing that I actually advocate is definitely a combination of on-chain and off-chain approaches, where we use the different things for the task that they're each best at. And like, I do actually think that, I think, the community is, including both, probably all three of us here, and even all of the other people that have been kind of blabbing about the subject on Twitter over the last couple of weeks, probably disagree with each other much less than it seems, just because these concepts don't really, to me, describe like fundamentally different categories of technology, as they do even like different starting points, and you can go from one and you can go from the other.

• 6:15Speaker 01

  And I do think in some cases, there are like these specific topics where it really is important to kind of really drill down and and figure out like which approach makes sense, but you know, in general, like, these aren't two incompatible islands that we're talking about, right? And so, looking forward to figuring this out.

• 6:31David Hoffman?

  Yeah, and I think, hopefully, as we go and talk about like, when off-chain, when on-chain, the listener also gets an idea of what the hell we're actually talking about, and what is unlocked when we talk about credentials in a decentralized fashion. Evan, same question to you, any comments or perspectives that you want to bring to the table before I jump into my first questions?

• 6:48Speaker 02

  For sure, I want to echo Vitalik's note, I think that it's a really exciting moment in our ecosystem, because we are looking at our own role in Web3 in a different way than we have before. And so we, as a community, have the opportunity to go meet people where they are in their own journeys, not at, you know, the first step of our user journey, which means that we can reach out to so many communities who haven't yet engaged with Web3 if we can tackle the endpoints that they're already using. So super stoked to, you know, get into the details today. And I definitely think that the more we consider the tools we have both on and off-chain, the more fun superpowers we're going to be able to create in Web3.

• 7:27David Hoffman?

  Yeah. And so before we get into the differences between what happens when these bits of data are on-chain or on-chain, off-chain, I want to actually start exploring for the listeners who are used to, when they hear the word NFT, they think of like some JPEG. Or if they think of some like blob of data or like how people are using our data, they kind of think of Web2. I want to start to define what is the world that we're actually talking about here. So the question is like, what can these things actually do? Because both a soulbound NFT, which is on-chain, or an off-chain verifiable credential, they both attest to something. And so to get the right image in the listeners' heads, I want to talk about like, what are the utilities of these things? What use cases do these things unlock? And what can we really do with these things? And so Vitalik, I want to get your perspective on like, what is the use case that gets unlocked

• 8:12David Hoffman?

  with these attestations, whether it's on-chain or off-chain?

• 8:16Speaker 01

  So I think the direction that I've been coming at this is basically trying to take the use cases of blockchains beyond finance and also to try to use some of those ideas to fix some of the problems that we've noticed in blockchain applications. So blockchain governance is a big example that I've talked about, but also other applications as well, right? So like I've talked many times, you know, in all of my various places on this podcast, just for example, about how I really dislike coin voting governance and coin voting governments can easily turn into something, you know, very bureaucratic and non-representative.

• 8:56Speaker 01

  I've been faced with this problem of, well, if you don't like coin voting governance, then what else can you use as like the unit of determining like, you know, who can participate in governing and who can't, right? I talk a lot to optimism people, for example, and I've been a big fan of their of approach with having both a token house and a citizen house. But then if you want to have a citizen house, then, you know, you have to have some concept of, you know, representing who is a citizen, right? So, you know, you need to have some way of representing what properties does this person actually have? I mean, has he actually participated in the optimism ecosystem? Have they participated in the Ethereum ecosystem?

• 9:37Speaker 01

  You might want to try and see like, is there some evidence that this person has some knowledge that could be relevant to the governance process? How do we even know these things are five different people instead of five accounts that are owned by one person? And if you want to have applications that use that information, then you have to formally represent that information somehow, right? The Ethereum ecosystem already is starting to have more and more of these ways of like formally representing stuff, right? So there's the proof of humanity protocol, there is the pope protocol, you know, if anyone's gone to an Ethereum event, chances are you've seen Patricio Vortolter at least once, you know, giving you one of those lovely popes.

• 10:18Speaker 01

  You know, there is to me really a lot of good that can happen if you unlock the ability to do those kinds of things and but the challenge is like, how do we actually create a technology stack for doing that sort of thing that's actually sustainable? And I think there's a lot of use cases that have to do with like Ethereum DAOs and airdrops and things like that, but also eventually new applications as well.

• 10:45David Hoffman?

  So just to rephrase that to make sure me and the listeners are tracking, the current state of like DAO governance is governance by capital, right? Token vote. That has some amount of utility in terms of governance. There are some instances where like governance by capital is what you want, but is by and large probably the minority of the total expression of governance possibilities. And so what your folks Focused on with this attestations is there are alternative ways to identify who should have governance powers over a system that has not to do with the capital of the system and instead is other things. And like you said, the optimism's Citizen House is a portion of the governance over the optimism ecosystem that is explicitly not the capital, not the token, but is instead based off of the merits,

• 11:29David Hoffman?

  perhaps. Could you also illustrate just like if it's not capital, what else is it? Is it turned into a meritocracy? Or what are the other alternatives that are unlocked if we are not having a capital governance system?

• 11:40Speaker 01

  Yeah, I mean, first, I should also add that governance here is kind of just the first motivating app, right? I do think that there's a lot of other apps as well. And you know, the Soulbound paper with Puujan Glenn, you know, we talk about like loans, you know, potentially kind of clubs and memberships and like all of these use cases. But, you know, governance is just one where there's already this kind of big existing demand. So just a couple of fairly simple examples. I mean, one is just proof of humanity. So, you know, you could do some quadratic thing where if you have N tokens, then instead of N units of governance power, you have square root of N units of governance power. That still is a little bit token based. And so you get the benefit of being able to distinguish between someone who cares about optimism versus someone who doesn't care about optimism.

• 12:25Speaker 01

  But at the same time, you know, the square root function kind of drops off after a while. And so, you know, you don't have kind of full on foodocracy, right? That's just one simple example. Another example is that one of the things that I think we could do a lot more with is airdrops where the airdropping is done in a more intelligent way, right? So the airdrops that we have today, like a lot of them, they get VC farmed. Even if they don't get VC farmed, a lot of people claim them and then just sell them immediately. The thing that would be more interesting to see is like airdrops that try to actually filter for people who like actually care about a project, who actually really participated in it. And maybe even people who like learned more about the project

• 13:07Speaker 01

  or even kind of participated in that project in some micro way, right? Or if we wanted to be like any remotely easy for people to do that sort of thing, then like being able to formally represent, you know, this person did this thing, this person kind of used this up. This project for this amount of time participated in this event and that sort of thing would actually make it much easier to do that sort of stuff, right? That way, you know, we can have airdrops to like actually target both, you know, people who would actually hold the coin instead of just us selling it immediately and like actually continue to be productive contributors to that project's community.

• 13:43David Hoffman?

  Evan, feel free to build on what Vitalik was saying here, but we all know in the crypto world, the state of crypto is not yet what we want it to be in the future. So there's many, many things to unlock in order to get to that future. So attestations and credentials being one of those things. What can we unlock and what is left to unlock in DeFi, crypto and all of these systems that we're building when we have like a robust identity system that Vitalik is referencing?

• 14:07Speaker 02

  So right now, without a robust reputation system, a robust identity system, the only thing that I know about you and I know your Ethereum address is how much money you have and what kinds of financial transactions you've been participating in, what kinds of assets you've purchased or been gifted, stolen, been airdropped. And so we can't coordinate, as Vitalik was noting, very interesting coordination games. It's, you know, fairly plutocratic when we're based on token holdings alone. And so being able to describe the qualitative traits that we have as individuals, our non-financial contributions to our communities, things like our achievements, our capabilities, our friendships, relationships, our memberships in secret societies, all of these traits describe us as humans and deserve the ability to interact with our smart contracts as well

• 14:52Speaker 02

  as being prepared to interact with folks from any ecosystem, not just Ethereum. And so the externalities that we can start to enjoy if we take hold of off-chain data for these purposes, so that we can maintain our privacy, our autonomy, our integrity without having to experience data leakage around what happens when someone sends you a token. So the macro externality of sending a token on a blockchain from one party to another is, I mean, basically it's that Satoshi did at once and set forth the world we know as Web 3, which is how we got to now, which is a very exciting moment, you know, for us. As far as I understand from this conversation so far, Vitalik and I agree that identity is an essential primitive for Web 3. And our communities, we have discussed, is paying

• 15:36Speaker 02

  attention to identity in a way that they haven't before, whether through trauma or through faith. So we have an opportunity to answer the big questions, working together, you know, how do we direct our YOLO energy in a sustainable and regen way? How can we put consent above contracts and people over protocols to align on our common values and define our identity architecture for Web 3? You know, the public conversation that we're in right now has jumped into solutions, and it's the first time that a lot of crypto Twitter is talking about identity, which is super awesome, but we have this moment to amplify our shared energy into a very intentional direction. Vitalik provided a wonderful conjecture that can help us come together as a community to optimize for our shared experience as people.

• 16:19Speaker 02

  You know, we have an opportunity to make these trade offs that we have to make between consent and availability with a shared allegiance to the human beings that we serve. As Chelsea Manning told me recently, data scientists are ethicists. And so we have this opportunity to depoliticize our data structures together, which is why I'm so excited that we're here today.

• 16:37David Hoffman?

  Vitalik, any comments on that before I go to my next question?

• 16:39Speaker 01

  Um, no, I mean, I think those are all very wonderful and amazing goals, and I support them.

• 16:44David Hoffman?

  Cool. Evan, I think you see a fork in the road with how we can do identity and like one ends up in a better world and one ends up in a worse world. There's a famous tweet that you and I talked about from our friend Cooper Turley, where he said, "NFTs are the truest form of our identity," or our personality, or something like that. Can you illustrate this fork in the road that you see with regards to like NFTs as identity or on-chain data as identity versus off-chain identity?

• 17:10Speaker 02

  For sure. To engage Coop's tweet, right? You know, Cooper's vibes have launched 1,000 communities and his Web 3 wallets, like his wardrobe, are a fairly thoughtful reflection of his taste and his preferences, his purchases. You know, NFTs are an authentic reflection of someone's interest and ability to obtain public digital items. So Cooper is not a music NFT, as much as he would like to be. He is obviously too tall for that. Cooper is not a pair of designer sneakers. Cooper's collection of objects, both digital and physical, reflect his taste, which is part of his identity, but is not the whole thing, right? Cooper's identity is also being an alum of the University of Denver, a resident of Los Angeles, a co-founder of Fire Eyes

• 17:51Speaker 02

  Dow, a Chad of Chad Team Six, an Alenium superfan, a decent Slack liner, a connoisseur of acai bowls, and fandom, employment, academic achievements, personal achievements are all really beautiful use cases for verifiable credentials. Cooper is also the life of the party for those who know him and a tornado of memories, emotions, laughter, bull markets, bear markets, late nights, old friends, and very intense eye contact. He is a human being, a soul.

• 18:17David Hoffman?

  You know a lot about Cooper.

• 18:18Speaker 02

  I know, right? You know, he's a human being, he's a soul and identity that can reflect so much more than what's inside of his wallet, you know, what his financial resources are. And he cannot be contained in a singular address. His community influence, you know, ripples through the metaverse beyond the Ethereum ecosystem. And that's why Coop needs a data backpack, a decentralized identifier with a rich set of verifiable credentials or off-chain private data that he can choose to share when he wants, so that he can carry his multifaceted identity in a form that can be understood by his friends who use email or Bitcoin, Solana, EVM, and even websites, because his squad contains multitudes. So, you know, if Coop is the sum of his experiences, ideas, and relationships, some are going

• 19:01Speaker 02

  to be more persistent than others over time, because he's a changing and evolving organic being. So he needs personal data that's going to be similarly flexible. But in some sense, Cooper is right. In Web 3, where we primarily express ourselves today, publicly and on-chain, NFTs do have the most personality of any readily available token. So I'm really excited to build upon these wallets full of financial data and give us all a new accessory. Privacy preserving, self-owned data backpacks so we can carry around the rest of our non-financial data that makes us us. And so Cooper can join the party anywhere, no matter what protocol sits underneath.

• 19:34David Hoffman?

  Right. So Evan was illuminating the world of what happens when you have parts of your identity that really can't be expressed by an on-chain NFT. But Vitalik, I want to turn the question to you is, what utility do we have by having some bit of data embedded into an NFT and also not being able to transfer that NFT? So what is the point of putting something on the blockchain if that thing cannot be transferred to another address? So like, what does that non-transferability unlock? And how does that help with this whole like Web3 credentialism?

• 20:03Speaker 01

  Sure. And so I think there's two ways to answer that question, right? One is, why could a on-chain, non-transferable thing be better than an on-chain, transferable thing? And the second is, why could an on-chain, non-transferable thing be better than an off-chain, non-transferable thing? To answer the first question, like, basically, if you have on-chain, transferable things, right, then on-chain, transferable things are going to like, basically just get transferred to the highest bidder, right? So the word "soulbound" that I used in my blog post and in that paper, right, it comes from World of Warcraft, where there was this type of item in the game called a soulbound item, where basically, once you pick it up, you can't transfer to another player, you can't trade it, you can't auction it, right? And I've always thought that that's a very

• 20:47Speaker 01

  good mechanism, because if that mechanism did not exist, then like, basically, everything would just be sold. And so if you wanted to like, get all of the best stuff, all you would just have to do is like, you know, go off into the forest and kill boars for like, six months in a row without ever going to sleep. And you just be able to get all of the same stuff anyone else has without actually doing anything challenging, right? I mean, imagine if like, you could contact the guy who is on Wikipedia as being the most successful mountain climber in the world and ask him like, hey, if I give you $100,000, can I just like, replace your name with mine and everyone will recognize me as that, right? Like, basically, once- Those kinds of things become possible. The whole concept just kind of starts to lose meaning.

• 21:31Speaker 01

  So that's why I think credentials have to be non-transferable if we want credentials to kind of actually represent properties of a person. And then also, I think there is this kind of anti-politocratic governance arguments, right, of like, you also want to prevent like one hedge fund from just, you know, gathering up thousands of these things and just, you know, making these really huge kind of votes with one click. You know, like the sort of stuff that even happens in social media today all the time. And this just reminds me, I think there was this one moment a few years ago where, I think it might have been Rick Falkinger or someone else, like he just made this tweet pointing out that like, hey, you know, Twitter is like actually totally vulnerable to basically commercial attacks. I mean, then a few minutes later, it got 5,000 likes.

• 22:16Speaker 01

  That was, you know, that sort of stuff happens, right? And like, we want to make it harder for that stuff to happen. That's the first question. The second question for why chains are useful. I think there is a couple of different places where chains are useful. So the first place where chains can be useful, I think, is account management, right? And the problem that I think you might call key revocation, you know, key recovery, like just generally like making cryptographic keys not count anymore in case you want to replace them or you're worried that one of them got lost or stolen. So the basic problem is that like, if you don't have something that can hold some kind of state, then if I have a key and I tell people, hey, you know, here's my public key. If I sign things with this key, then they come for me.

• 22:59Speaker 01

  Then I have no way to kind of repudiate that. Like I can't go and say, well, no, no, that's not me anymore. Because well, what happens if I do send a message to repudiate, but then five years later, someone manages to hack that key? And then they go out to the internet and they say, oh, no, no, no, that repudiation message, that was a hacker. I'm still the real Vitalik. So. What blockchains do is they do kind of keep track of time. And as I'm sure you remember many times, I've talked many times about social recovery wallets. And in the Solobed paper, you also talk about community recovery. And so having on-chain accounts that can actually have smart contracts, have the functionality for doing key changes, doing key recoveries and those kinds of things.

• 23:43Speaker 01

  Like you need some infrastructure to do that sort of thing to have a good identity layer, right? So that's the first point. And then the other really big one is negative reputation. So I think the simplest kind of tame use case for a negative reputation that I think is pretty compelling is if you want to take out loans, right? If you want to take out a loan, then one thing you might want to be able to do is prove that you haven't taken out any other loans or prove that you haven't taken out more than a certain number of other loans, right? Because if you don't have that and you just say, hey, look, I'm reputable enough to take out a hundred thousand dollars. And then you go and just do that with 20,000 lenders in parallel. Then you could just run off with 200 million dollars.

• 24:25Speaker 01

  But if, on the other hand, taking out a loan gives you a negative reputation token. And, well, I shouldn't say negative, right? Just taking out a loan isn't bad, but it's like a reputation token that you can't hide even if you wanted to. Then that actually empowers you because it lets you prove the absence of those tokens or prove that you have less than a certain number of those tokens in order to show that you haven't actually taken out many loans yet. And so it's still okay to give you another one. So if we want to really unlock the full potential of these things for the economy, social media, better forms of communication, then there are going to be places where negative reputation has to apply. And there again, you have to prove a negative, right? And cryptography can't prove a negative. Blockchains can prove a negative.

• 25:10Speaker 01

  Blockchains are definitely not the only thing that can prove a negative, but they are one thing.

• 25:14David Hoffman?

  Evan, what about whatever Vitalik just said piqued your interest? Anything that came to mind there?

• 25:20Speaker 02

  Yeah, I think it's a very interesting thing for us to discuss these negative or unintended externalities that come from sending a token from one party to another. So Vitalik, you've mentioned some of the critical needs that we have in an identity system, the ability to rotate keys, the ability to issue non-transferable traits, the ability to have resolvable public key infrastructure so we can tell whose keys are who. And it's so wonderful that you've highlighted these things because these are things that decentralized identifiers and verifiable credentials can already do today. In talking about the externalities, if Vitalik sends a token to my wallet, he's saying something about me that is public to everyone on Earth and in space forever. If he sends me ETH, which I hope he does, he is making a financial statement.

• 26:02Speaker 02

  But if he sends me a soulbound token saying Evan's a total Chad, he's saying something much more directed and specific about me. So if this token has some data about me in clear text, then we have the externality that apps and people will be able to read it and access it easily forever. So everyone can see that Vitalik has made a statement about me if we assume that everyone knows whose keys are whose. So we know that the issuer, Vitalik, has said something about me, Evan, the subject. So now all of ETH knows that Vitalik and I are talking, so we've started some really fun rumors. But if that token has encrypted data, David can know that Vitalik has said something about me, but not exactly what he said. So the rumors that Evan and Vitalik are talking swirl faster and we're relying on encryption, which is not necessarily a bad thing, but it is a time-based privacy method.

• 26:45Speaker 02

  So it's only a matter of time until that data becomes public, whether in my lifetime or the next. Also, Vitalik did not secure permission, my consent, to send me a token, which is why someone was able to send him billions of dollars of she-wa token. And I'm sure that Vitalik would send me something really nice, but if it's a mean or unwanted token, normally I'd be able to burn it or send it away, although that's going to cost me some gas. But as I understand them, at this point, allowing for consent in the soulbound token paradigm is a norm proposed by teams like Sismo, but it's an unenforceable one from a technical perspective, requires an additional reputational system around it. There's nothing to stop anyone from not gaining consent before issuing you a soulbound token, as with any other kind of token, even if it's possible to secure consent first.

• 27:27Speaker 02

  So I think if gaining consent is seen as inconvenient, it's going to be routed around. So this token is only going to be accessible and relevant to users in the EVM verse. So it might require a bridge or cost some additional complexity. If I want to leverage my token from Vitalik in my adventures in Bitcoin or email or Solana. So if it were a verifiable credential, it would be immediately readable by more than 90 different sets of keys. So I wouldn't have to translate it just to provide a little bit of comparison for benefits and drawbacks in different use cases. So let's say instead of getting a token from Vitalik, I get a token from She-Fi, which is an educational initiative and community aimed at onboarding more women into the new financial economy. So then everyone knows that I likely identify as a woman.

• 28:09Speaker 02

  The assurance would increase significantly if I received a diploma, soulbound token from Smith or Wellesley College and a membership token from Boys Club, Chief 256, Metagama Delta. However, when we talk about loans, we've got all these cool tokens now, women are less likely to be approved for loans. And when they are, they are more likely to be offered costly rates. And I'm sure you guys know only, you know, 2.8% of VC funding goes to female entrepreneurs. So my chances of getting investment might take a hit based on revealing this facet of my identity, depending upon the context. Personally, I struggle to see how publicizing my gender is going to avoid negative consequences on chain that already happened today when people see me as a woman. But you know, what about other traits? So if I have a diploma token from, or a token at all from Bennett College, there's a high likelihood that I'm a black woman.

• 28:54Speaker 02

  So in real life, black women earn 63 cents on the dollar compared to white men. If I have a token representing my membership in a local religious organization such as my mosque, you might discern that I'm likely a Muslim. And in real life, Muslim women are 65% less likely to be hired for a job than Christian women. So you can imagine that even receiving a minimal token from a certain address can leak some information that unintentionally affects your experiences immediately. Public tokens from refugee agencies can signal you as a persecuted ethnic minority. Public tokens from adult content sites can signal you as an entertainer. Public tokens from law enforcement can signal your criminal record. So I think, you know, in this opportunity, in this moment, self-ownership and positive reputation systems can take us incredibly far first without these unintended consequences.

• 29:41Speaker 02

  And Helen Nissenbaum's work on contextual integrity highlights these ways that public data can be used out of context and lead to these kinds of unintended consequences. But the permanence of our public chains, where we send these tokens, or Vitalik has sent me this awesome token that we're talking about. We can unintentionally diminish freedom for disenfranchised communities by publicizing the very traits used to discriminate against them right now. So to avoid this very real, immediate, concrete consequence, we can explore solutions anchored first to a shared vision for human identity before we anchor it to a chain. You know, once something is public, there is little going back. So we've got to get it right the first time for all time. And I think this moment is perfect for us to slow down as a community before we write in pen, or perhaps even more permanently on chain.

• 30:27David Hoffman?

  So Evan, to articulate, I think, what you just said, there's this potential of like, you know, very easy to identify use case for like what Vitalik was talking about with like a loan token, right? Where you can tag this address and say, hey, this address has an outstanding loan, which is good information for other loan originators, because that is relevant information to them. And so in that one particular instance of a siloed use case, I think that we can all agree that that's probably pretty useful. But I think what you're saying is when we have many, many, many instances of many use cases, we start to have interactions on these soulbound NFTs, where if an Ethereum address has these four soulbound NFTs, we can start to infer things about that person that they did not willingly give up. Is that a good summary of what you were talking about?

• 31:10Speaker 02

  Definitely. Yeah, I think, you know, correlation is one of the risks with making data public. And so that's why one of the sort of seven laws of identity that were put forth in 2005 by Kim Cameron, one of those seven laws is minimal disclosure. So your data on a need to know basis is one of the pillars that help us build identity systems that minimize risk and harm to human beings.

• 31:31David Hoffman?

  And so Vitalik, is there a way where we can have soulbound NFTs and have privacy too? Can we have our authority over our own disclosures and also still have soulbound NFTs?

• 31:41Speaker 01

  Um, yeah, I mean, I think the encryption is definitely like a very important first place to start. And like, I would definitely totally not support a system that doesn't have like at least that available as an option. But I mean, I think you totally can go much further, right? So. Like, you know, with ZK snarks, for example, you could make a yes system where you're encrypting not just the content of the soulbound token, but also, you know, the sender and the recipient. Right? You know, imagine we're doing this all in a layer two and transaction fees are cheap. And the gases, you know, paid through tornado or through, you know, some relay or whatever. Then the stuff that goes on chain is just a record. Record is, you know, encrypted to the destination public key.

• 32:22Speaker 01

  And if you wants to do a proof of that you have some particular bit of reputation, then you can just do a zero knowledge proof that says, hey, you know, here is the decryption of one thing and that one thing is sitting on a chain. If you want to have a proof that says, I have never received something of this type, then you can make a ZK stark that just walks over the entire set of records. And then, you know, basically show that if you decrypt everything in that set, then like none of those are going to be a yeah record of this type. Right? And, you know, possibly you can make a kind of privacy efficiency trade off somewhere, kind of split it into a hundred buckets if you only wants to decrypt 1% of everything.

• 33:03Speaker 01

  But, you know, you can like really reduce a lot of information there. Now, once you have that, then basically, you know, what you're left is just as just a bunch of records containing encrypted data. And the thing that is leaked is the fact that someone said something about someone at some particular time. And so, you know, definitely you'll be able to do analysis and figure out like, you know, how many North American and Latin American people are using it versus how many Asian people. And, you know, to a mathematician, that's a pretty significant data leak, but it does get pretty low already. I do think that the point about encryption having a risk of eventually breaking,

• 33:46Speaker 01

  I think it is something that's fair. Though, on the other hand, I would also say that like this gets to the point where like, you know, if you don't make some information available, then like, you know, that starts really going against some of the positive use cases as well. Right? Like at some point, you know, you have to kind of pass some bar of capability. And if you don't pass that bar of capability, people will just create centralized providers that do. Right? So. Like, I do think that it is possible to kind of reduce the privacy issues a lot. Especially once like broken encryption comes into your model, like, you know, you definitely can't do it to 100%. Though, you know, 10-year-old information getting revealed is less bad than 0-year-old information getting revealed and still

• 34:27Speaker 01

  only happens occasionally and so forth. And like, there's definitely a kind of like a place to trade off on the boundary. And so I, like, I do think that there is a case that if there is some NFT where like the contents are sensitive, then, you know, you might even want to like put a hash of it on chain. And like, the thing, well, actually, no, here's what you do. You put the recipient on chain and you would just send the contents of the NFT to the recipient and then you put the hash on chain, right? So the recipient holds the data off-chain, but then if the recipient wants to kind of walk over the entire data and prove it, then like they can still, you know, make a proof using the information that they have personally. And then if they want to prove that a record isn't there, they just show that like, look, I mean, you know, the ID in this particular position is different, right?

• 35:12Speaker 01

  So there are lots of technical tricks that you can do, but, you know, I do sympathize with the idea that like you can't like bring the issues down to exactly zero. And I think like, you know, there is some trade-off at the end. Though, at the same time, I mean, as I'm sure Justin told you, never underestimate the, the power of cryptography to do quite a lot. So, I mean, I guess at some point it does, you know, again, it's kind of just being application-specific.

• 35:36David Hoffman?

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• 37:56David Hoffman?

  between Ethereum, Optimism, Arbitrum, or Boba Networks. I want to ask a question, and this is a little bit beyond my technical expertise to really understand. But if we have this world of Soulbound NFTs, and that's leaking all of this data that we don't want leaked, but we have the solutions to stop those leaks from being leaked with a combination of encryption and ZK proofs, if we plug up all the holes of the leaking of the data with ZK proofs and encryption, do we actually ultimately just work back down to the same properties of off-chain credentials in the first place?

• 38:27Speaker 01

  I mean, the key property that we keep, right, is this, I think, one, this ability to prove negatives, and which I do think is important. I think, just to kind of expand on why I think proving negatives is important, like, I think... It is definitely true that there are like things that people have where if they get revealed, then those properties can get used against them. And I do think that like there is a really big and important role for privacy to play in kind of fighting against that. And I think even, you know, the crypto space itself is like a really good example of that, right? And like, you know, lately, we've been having more and more of these, you know, Anons on Twitter, and they can just get kind of, you know, respected for who they are as Anons. And, you know, we don't even necessarily need to know what their

• 39:12Speaker 01

  faces look like unless and until they show them, right? And I think that's, you know, like, people having the option to do that is beautiful. But at the same time, I think kind of the two caveats I would give there is, one, that there is a way in which like proving negatives can be kind of even more egalitarian and empowering than having to prove positives in some cases. And like one particular example of this, right, is in the real world, like in the non-crypto world, there are applications where like one's side needs to know that the other side is at least reasonably trustworthy. And one thing that they might do is like prove that the other side doesn't have a criminal

• 39:52Speaker 01

  record, right? And that's nice, because it's like a very simple test that someone is like at least not in, you know, the bottom kind of few percent of trustworthiness, kind of probably. And it's something that like most people have by default, right? Now, if we did not have the ability to prove the absence of a criminal record, then the thing that people would probably be forced to do instead is they would be forced to like look, like basically say, you have to provide positive evidence of good character. And once you have to find positive evidence of good character, then like that's going to be something that's harder for people to find, right? Like, some person who had just has some stall on the street where, you know, she's been selling bananas for

• 40:34Speaker 01

  a dollar for 25 years, like, you know, never did anything wrong, trustworthy, but just because, you know, she's not part of the system, she might not even have that evidence of a good character, right? So I think like, that's one important sense in which kind of like a lack of negatives can be a more egalitarian thing than a presence of positives. And also, presence of, like, there are a lot of cases even today where a presence of positives is something that can be used to exclude, right? Even a simple one is like just a applicant, like requiring proof of citizenships, right? Like, you know, a developed country passport, something that 86% of people in the world don't have. And, you know, I think crypto really tries and cares about being global.

• 41:15Speaker 01

  And that's, even if you create a system that just allows checking that, then you're already allowing for the possibility of excluding people on that basis, right? So I think my general kind of view on this is that I don't think you really can kind of like finally, you know, target properties just by, you know, making it possible to prove positives and not possible to approve negatives. Like, to what extent a system is going to have the good outcomes and not going to have the bad outcomes is going to be based on these kind of much more kind of finely grained and detailed economic properties. And I think, you know, in probably both kinds of systems, there's like a utopia way to do it and a dystopia way to do it.

• 41:59David Hoffman?

  Evan, no question, but what thoughts have come to mind?

• 42:02Speaker 02

  Well, Vitalik, I'm really glad that you brought up inclusion, because, you know, as much as we would like for it to be the case, right? Ethereum does not provide the only API of data about people on the planet. And so if we want to be able to make utterances that are relevant to people who use websites and email addresses and Solana and Bitcoin, we are going to need tools that allow us to communicate with the keys that they already have, as opposed to requiring the exclusionary need for them to hold the keys that we prefer to interact with our chosen system. That said, I also think that, you know, there's a prioritization opportunity for us here. Which problems are most urgent for us to pursue, right? Which need the most love right now?

• 42:42Speaker 02

  And so I think that there is a robust set of these opportunities where we might explore positive reputation in terms of enabling better governance, as you were suggesting, right? For every community of well-meaning members, there's one Brantley. And so I think to the extent that we might think about, you know, how reputation positively can impact the systems that we have today to unblock us immediately, I think that's a really great place for us to start focusing our effort while we studiously and collaboratively define, you know, what is the identity system that's going to work for everybody? So I mentioned earlier, you know, Kim Cameron's Laws of Identity that set forth this sort of industry standard framework for Identity systems that minimize risk and harm to people.

• 43:23Speaker 02

  And I think there are a few of these things that I want to pull out that I think are relevant for us to discuss here today. I think, you know, user control and consent, as I mentioned earlier, is a core pillar, right? Just like how World of Warcraft loot screens, you know, allow players to consent to put something in their inventory, even if it's non-transferable afterwards. In these systems that are intended to minimize risk and harm to people, users should consent to those data interactions. And that may mean also consenting to participate in a system that involves negative reputation, right? We participate in the society, therefore we are subject to certain facets of our state. Pluralism of operators and technologies is, you know, sort of a sort of agreed upon element of a strong foundation for a global identity system that does not bring harm. So we avoid a monolithic solution.

• 44:07Speaker 02

  And, you know, minimal disclosure, as we talked about before, so you can share data with a minimum number of parties required. It's on a need to know basis. And this is kind of at odds with the 24/7 data availability that we've come to get used to in Web 2, where apps have 24/7 access to our information. And so I think that, you know, this is a really wonderful opportunity, as I mentioned, for us to explore, like, what are the relative merits of these tools based on the needs that we have as humans? And how do we find that spectrum of use cases? Vitalik, as you suggested earlier, where some are more optimal than others. And we have a pretty good understanding of what we think those first externalities are going to be.

• 44:42Speaker 01

  Vitalik, any thoughts? First of all, you know, I do, I mean, I definitely totally sympathize with the goal of technology neutrality. Like, I think, you know, if someone hates or just does not wants to use Ethereum, or then, you know, they should not be forced to use it in order to be part of, you know, the, you know, identity web of the future. I think, you know, they should totally be able to, you know, use Solana. And, you know, if you're David Gerard, then you should totally be free to kind of not bother with a blockchain at all and just, you know, have your open ID and let Google or Facebook run your identity. You know, I think if someone wants to do that, that's fine, too. I do think that it is possible to create standards that cover that. Like, I know that, like, for example, Huon from Filecoin, right?

• 45:27Speaker 01

  Like, he is, I mean, in IPFS, like, there's been, there's a lot of work that's been done. And, you know, being able to kind of support multiple types of hash functions and like support multiple algorithms for pretty much everything. And creating kind of these data standards that can actually do that. And I think. It should totally be possible. I mean, I don't, you know, I'm not deep enough in the verifiable credential to the community to know, maybe this already has been done, but, you know, to make it so that like, you know, you can have an Ethereum account that interfaces with the system or a Solana account or a Google.

• 46:01Speaker 02

  Yes, Vitalik, you can. We can. Okay. We can. Sorry to jump in. We can do that. We can do that. We can use a verifiable credential to bidirectionally bind together our Ethereum address with our Bitcoin address, with our Solana address. I can send a credential signed by my Ethereum address to someone else's address that is a Bitcoin address or a Solana address, and we can be on the same page already. So I would love to explore this more with you.

• 46:22Speaker 01

  Okay, actually, like, so one kind of detailed question there. Let's say like, I want my, I mean, okay, let's, I'll jump to another team just for fun. Let's say I'm a Solana maxi and I want my Solana address to be my root, right? So, I mean, does the system give the possibility for me to say the Solana address is my root and the Solana address like is the thing that has the right to kind of reset my Ethereum address and my Bitcoin address and the address and the public key that I use to send all the other addressations?

• 46:51Speaker 02

  So we are currently working on that approach, starting with Ethereum keys at Disco, but our friends over at Encore in the Solana ecosystem are thinking about what that means for their world. So we'll keep you posted on what those discoveries look like, but we think, you know, it's an exciting opportunity to become your first personal, you are your own multi-sig, you are your personal API. And so that means incorporating multiple facets of your personhood.

• 47:15David Hoffman?

  Yep. So I was trying to keep up with that. And so I think what you guys were talking about with the root conversation is that with these off-chain verifiable credentials, off-chain decentralized identifiers, and like, I just spun up my Disco data loop bag yesterday, but does that mean that Evan, like Disco is like opinionated as in like Disco's home is Ethereum, even though it can link to other Ethereum addresses? Is that the conversation that you guys are having?

• 47:37Speaker 02

  So we are starting in the Ethereum ecosystem because that is where we have the most experience and, you know, we see the most exciting opportunities, of course. And so as we explore the relationships that people have between different keys, we're going to figure out what does it look like? Is it hierarchical? Right now, based on the decentralized identifier spec, not especially, but, you know, identity is an emergent thing. And so I think based on the way that people start to interact. Deliberately engaging multiple chains at once, or their physical space with their on-chain activities, or even Web2 app activities, we'll start to see more of this structure emerge. So at Disco, the very first thing that we're doing is enabling everybody to create decentralized identifiers out of their existing Ethereum addresses,

• 48:21Speaker 02

  so they can get some, uh, so they can use their existing meta mask keys to sign off-chain data in the form of verifiable credentials that they can write about themselves, they can send to their friends, they can receive from the DAOs in which they are members, like Boys Club or Shifi, Dowsen Syndicate and Seed Club as well in the future. And so we are starting off with the Ethereum ecosystem because, as Vitalik noted earlier, we are hitting a ceiling of fun that we can have together when we're limited to on-chain data.

• 48:45David Hoffman?

  And so Vitalik, can you illustrate or illuminate the importance of trying to have an agnostic technology that like, if somebody wants to have, what I think you guys called the root, the root not be Ethereum if Ethereum isn't your main chain of choice? Why is that an important choice for users?

• 49:01Speaker 01

  Um, you know, I think, you know, it is looking like we're going to be in a world where different users are kind of primarily homed on one particular chain. And I think, you know, that's totally fine. And as in some cases, the chains that people use might even end up changing. So I'd say, yeah, you know, in general, like, if you have a, like, a standard of this type that ends up kind of enshrining one particular chain, then like that both, um, I mean, obviously it entrenches that standard further in that chain's ecosystem, but it does also kind of limit the social scalability of it, which, um, you know, I think is, from that point of view, something that's totally fair.

• 49:39David Hoffman?

  Evan, is this technology that you're building at Disco, is this like agnostic from even like necessarily the cryptocurrency world? I know it will always use cryptography, but like, is this something that like the Web2 world can leverage?

• 49:51Speaker 02

  Absolutely, yes. So in the same way that we can create a decentralized identifier out of our Ethereum address, we could also create one out of a PGP key, an email address, a website. And so our ability to show up with the various facets that make us us and connect them together is one thing, right? Which names are we using for ourselves? Where do they come from? But our ability to collect metadata around all those different names, off-chain, non-financial metadata in the form of credentials describing any of those addresses, this natively has very little to do with financial interactions. The security of data in this particular form is secured by cryptography, as you note. And so Though off-chain credentials can support the integrity and transparency and complexity

• 50:36Speaker 02

  of financial interactions, there is nothing inherently financial about them. So when I send a verifiable credential to you, I don't pay any fees or anything, but because it's a piece of data, it's got to be stored somewhere. So we're sort of changing the process of where cost falls in that communication.

• 50:52David Hoffman?

  So I have two last questions before I run out of them. And so if there's any last subjects floating around in your respective brains, do bring them up. But my last question is about like a superset versus a subset of these different like form factors. And what I mean by that is, Vitalik, correct me if I'm wrong, but like this isn't like soulbound NFTs versus off-chain identifiers. My understanding for this is that like a soulbound NFT is like a smaller subset of just like verifiable credentials and decentralized identifiers at large, right? Where you have a verifiable credential, and then if you imbue that into an NFT on a blockchain and make that NFT non-transferable, then you get a soulbound NFT. Vitalik, would you agree with that description?

• 51:34Speaker 01

  Yeah, I mean, I think it's like importance to distinguish between like verifiable credentials, the brand's name, kind of, and the kind of specific community that's been working around that brand name for a half a decade versus, I mean, the general concept of credentials that are verifiable. So, you know, soulbound NFTs are credentials that are verifiable, but soulbound NFT is also a brand name, right? Because soulbound NFT is, by some definitions, are not even tokens. So like, I think once you kind of, you know, go beyond the specific kind of categories that exist in people's heads and like start thinking about properties, like, you know, you can totally unlock that entire space in the middle, right? And like, I think, you know, just even to save gas, it does totally make sense in a

• 52:15Speaker 01

  lot of cases to, you know, make popes be off-chain in a lot of contexts, for example, right? Like, you know, if you have a pope issuer, then like they can save gas by just issuing an entire tree of popes and just sticking the root on chain and then giving every individual participant the merkle branch, right? And, you know, if you trust the pope issuer to issue a legitimate pope, then, you know, you're going to trust the pope issuer for data availability anyway, so that's fine, right? So that already kind of is an opportunity to save a whole bunch of gas and

• 52:48Speaker 01

  So you know, you do still kind of retain some properties of a blockchain like I know you've like just for example, you retain this kind of hard proof that says that like, you know, if your Merkel branch has a length 10, then you can prove that a maximum of 1,024 of them have been issued, right? And you can only do that sort of thing if you actually have Merkel branches going into a particular route and you have like that particular route committed on chain. So there's definitely is this kind of a long spectrum of, you know, how much chaining are you doing and how many more of these extra guarantees that you're getting? And I do think that different use cases are going to want to different things along that spectrum, which I think is totally fine. I think another thing that's probably worth stressing is that I think

• 53:31Speaker 01

  one of the differences between cryptography and social systems is that a social system does not survive first contact with reality, right? Like, the only way to make social systems that are sane is just is going to have to involve like some degree of being iterative and like kind of setting it out there, seeing how people interact with it, and then kind of using those experiences as feedback into the next version, right? Like, I think we saw a lot of that with Gitcoin, for example, and the Gitcoin grants rounds and how they have kind of matured from the, you know, very kind of early versions that we saw during like rounds one to three into the, you know, very mature community that we see today. And so I think, you know, ultimately,

• 54:14Speaker 01

  like the people that probably both can and will kind of make the biggest difference here probably are not even just going to be people kind of passively thinking about this. It actually will be, you know, people who wants to issue specific pokes for a particular purpose, or people who wants to issue, you know, soulbound airdrops and have particular needs for what kinds of properties that they're trying to filter for, or people who want to, you know, let's say, make some social media platform that has like some built-in form of a ZK negative reputation and like trying to get privacy and accountability at the same time. So I think, you know, the use cases themselves are going to matter a lot. And so in some ways, I even think that kind of the missing fourth person in this chat

• 54:58Speaker 01

  might, you know, even be someone from kind of one of these like applications that's actually been using, I mean, their credentials or pokes or proof of humanity. But, you know, I'm very hopeful that I think, you know, those people are aware of the discussion. They're part of the discussion and I think we're going to have lots of opportunities to talk and figure it out.

• 55:16David Hoffman?

  Yeah, on the weekly rollout that Ryan and I recorded yesterday, it came out today. For the people that are listening to this, this coming Wednesday, it was last Friday. There was a question from the nation that we answered, which is like, what is the big next thing that is coming to the world of crypto? And Ryan and I both independently came up with the same answer, which is more or less the conversation that we're having right now, which is identity. And how can we get more expressive identity as a utility inside of the crypto ecosystem? And so I think this conversation, Vitalik, is going to be very much ongoing as it progresses in pure crypto fashion, which is in all directions at once. Evan, any comments or topics you want to bring up before I ask my last question?

• 55:53Speaker 02

  David, to the point of all directions at once, I think, you know, we have this very unique opportunity to bring a ton of camps together that haven't yet been before. We have a way to use our Ethereum addresses to communicate globally off-chain private trustless reputation. And today, five-year-old students are accruing verifiable credentials around their decentralized identifiers as they learn with the Lego Foundation, as well as students at Harvard, which co-founded the Digital Credentials Consortium, which makes it easy for universities to issue verifiable credentials for academic achievements. So from, you know, five-year-olds to cryptography PhDs at Harvard, we have an incredible community of folks who we can reach out to with this conversation, who we can bring into the fold, who we can onboard to their first MetaMask addresses, and we can invite

• 56:38Speaker 02

  them to the table as we continue this.

• 56:39David Hoffman?

  So to put this just in really just concrete language, and I know like whether or not a credential should be off-chain and have the data off-chain, or if it should be a soulbound on-chain NFT, it's definitely going to depend on the facts and circumstances of the actual context of whatever we're talking about. But I'll bring up, which is like one very simple one, which is like my college degree. So the question is, what is the best like form factor for like a university higher education degree? And so what a degree is, it's a piece of paper that is basically a credential of being proficient in a specific domain of knowledge. So like when Harvard enters the metaverse, what's like the most logical form factor for them to issue credentials? Evan, I'll throw that one to you.

• 57:19Speaker 02

  So I feel like I kind of blew up the lead a little bit there because I realized I just mentioned Harvard to work with verifiable credentials. But if we were to take a step back, pretend that we don't know that, you know, I think soulbound tokens are not as flexible and well-suited as verifiable credentials, specifically for college degrees. So, you know, in addition to adhering to some of those principles, we talked around the laws of identity, user control and consent, awesome with verifiable credentials, same with, you know, pluralism of technologies that can interact with it and minimal disclosure. But verifiable credentials, in addition to enabling this privacy and self-custody, also allow us to reconcile rich semantic mapping work among, you know, all these kinds of different people in the educational space. So we can establish equivalence from one learning

• 58:00Speaker 02

  outcome, like one class, to another, because I can choose how to share my diploma. Additional information, like we talked about earlier in the conversation, you know, isn't going to get leaked, such as when it was issued, which might indicate my age. But more importantly, the same vehicle, these verifiable credentials can be used for formal claims. So, you know, sensitive formal claims like a transcript, what grades did you get, or less sensitive things like a diploma, and finer-grained claims that can be composed into a richer view with all of these together, kind of in a, in a presentation, things like your grades on a homework assignment, as well as informal claims, like being the best speller in the class. And I think this is really important in the educational space when it comes to reducing gatekeeping and improving opportunities for all kinds of students, because

• 58:42Speaker 02

  we still have basic problems, like, you know, you don't get any credit for college education until you finish everything. So verifiable credentials can enable scenarios like reverse transfers, for example, where you can get tangible credit in the form of an associate's degree for courses that you've already completed, which can lead to some real opportunities. And, you know, as I mentioned a little bit ago, students as young as five years old are already earning verifiable credentials in the Super Skills app from Lego. And just this week, on Monday, there's an interoperability hackathon from the World Wide Web Consortium with 25 different wallets participating, which is part of why I think, you know, there's so much enthusiasm in the higher education space. But, you know, as long as the world is larger than Ethereum, then credentials will exist outside and inside Ethereum.

• 59:24Speaker 02

  And because, as far as I understand, soulbound tokens do not have a defined spec yet, we can't commit to what soulbound tokens look like on all chains at this time. Whereas verifiable credentials are already interoperable with more than 90 different kinds of keys, including Ethereum, so we can use our Ethereum keys and lightly enable other existing issuers to deploy some minimally invasive tools and unlock, I think, a majority of use cases, including the educational one here.

• 59:47Speaker 01

  No, the college degree use case is interesting. There is actually, already is a company based out of Singapore called Open Certs that has been doing kind of blockchain-based certificates on Ethereum for a couple of years now. Their approach is this kind of interesting hybrid approach, right? Where a degree by itself is basically just a signed message. So it's a, you know, verifiable credential, though it doesn't, you know, follow the verifiable credentials TM spec probably. But like if they have to revoke it, or if they have to make a correction, or if they have to do a kind of any one of those kind of proven negative type things, then it's a blockchain message.

• 1:00:22Speaker 02

  I would say, you know, I am aware they work. I think it's, you know, it's interesting, it's valid. It definitely does not align as strongly with the verifiable credentials for education working group from the World Wide Web Consortium. It's been around for quite a few years and is working with dozens, I think, probably at this point, hundreds of educational institutions. So we have abilities to put these things on and off-chain. But if we look to where the energy in the market is in terms of realistic adoption, I think, you know, verifiable credentials are doing a really great job of bringing value to these campus communities.

• 1:00:51David Hoffman?

  So Vitalik, if you were Harvard, how would you issue a degree?

• 1:00:55Speaker 01

  I mean, I think, you know, just use any of these things. Like, I think it's, I mean, in some ways, like, the differences aren't even that large, right? Because like, if you make one thing, you can just import a cryptographic proof of it into another medium anyway. Like, possibly even just do both, right? Like,

• 1:01:14Speaker 01

  What you know, it's like, why not do both and to kind of encourage people to build applications that can like work with both formats.

• 1:01:23David Hoffman?

  So zooming out here, guys, for the last and final question, say, we go into the world of the late 20s of crypto and we've solved all of these like problems with getting identity expressed in ways that are have strong assurances and it's just more expressive about who we are as people that go into the world of web three. What about that world where we have successfully leveraged identity in non dystopian ways in the world of crypto? How does that make the world better? How does that make you optimistic? Vitalik, I'll start with you.

• 1:01:51Speaker 01

  Yeah, and I think one of the big things that we can do is start really making a big dent in kind of some of the plutocracy issues and kind of misalignments just within the cryptocurrency space itself, right? Like, it'll be amazing to see, you know, DAOs that aren't just controlled by five wealthy people and, you know, ideally have a mechanism that does a good job of like both, you know, not being financially elitist, but also like actually selecting for like competence and selecting for people who are kind of passionate to actually care about that that particular topic. And I think that's something that a, you know, well-designed use of identity and reputation primitives, you know, you could even do it

• 1:02:34Speaker 01

  with just proof of humanity and popes and could also add something else on top should be able to do quite well. And in general, I think, you know, making a crypto space that does things like, for example, you know, if someone new joins it, then, you know, they should be able to get some quantity of tokens for free, like, you know, a crypto UBI, like, it's even just an excellent onboarding tool. You know, there's a reason why PayPal got so successful doing the whole, I mean, every user gets $5 when they sign up thing. And then going even beyond the crypto space, I think, you know, there's just so much harm that comes in the world from like badly designed ways of trying to kind of filter between trustworthy

• 1:03:18Speaker 01

  people and less trustworthy people. And so I think, you know, if we can offer any kind of better alternatives. For any of those problems, then you know, there's just lots of ways that that can make the world a more inclusive place. And, and you know, a place where anyone who has the right skills and the right passion to contribute to a particular place. Actually is welcome. I'm sure that can be true, you know, across genders, that can be true, you know, across nationalities. You know, across the different kinds of experiences, like different levels of wealth. And if, you know, we can actually start creating these kind of more fine-grained ways for people to try to formalize. The experiences and of traits, you know, histories that people have.

• 1:04:04Speaker 01

  And, you know, do it in a way that kind of both respects privacy and actually like gives them a, you know, this kind of very fine-grained way of showing, you know, what they've been part of and also in some cases, what they haven't been part of. Then I think, you know, it just opens up this much bigger space that allows us to just to do a lot of great things.

• 1:04:25David Hoffman?

  Evan, same question to you. What about the world of credentials in Web three makes you optimistic?

• 1:04:30Speaker 02

  Oh, we can finally have some more fun of different flavors, right? In Web three, we can only express our financial beings. And so if we can show up as our whole selves and we can coordinate non-financial activities together, we can start earning privileges and opportunities, unlocking doors with our own behavior. So for example, I'm a huge fan of Boys Noise, who's a DJ. If I listen to a ton of his music at home and I'm able to prove that I'm in the top 1% of listeners when I show up to his concert, then what if I'm able to receive a free drink? What if I can go dance on the stage? What if my continuous attendance at all of his shows in New York for the last 10 years gets me some kind of additional privilege or opportunity to be able to listen to his music early

• 1:05:12Speaker 02

  or weigh in on the next collection of rave pig NFTs that he drops? So I think our ability to interact with one another, not necessarily in a financial manner upon its face, but rather unlocking privileges with our behavior captured in the shape of tokens in a way that is privacy preserving to us, but can interact with the smart contracts that we know and love. I think that gives me a lot of hope because when you sign up for your first set of keys, you don't actually have to fill that wallet up with money to get started. You can play with all kinds of interactions using a key pair. And of course, many and on-chain are incredible and have led to the world that we have now. But if we start playing with the ones that do not require us to have funded wallets to

• 1:05:54Speaker 02

  start, we can welcome so many different kinds of communities into our fold together.

• 1:05:58David Hoffman?

  Well, Evan Vitalik, this was a fantastic journey down the world of attestations, credentials, and what happens when we unlock non-financial use cases in the world of Web 3. So, thank you so much for exploring this conversation with me. And hopefully, I'm pretty sure the listeners did learn a bunch about how much left there is to unlock in the world of not cryptocurrency, but cryptography, which is ultimately the reason why we're all here in the first place. So Evan Vitalik, thank you for joining me today. Thank you too.

• 1:06:26Speaker 02

  Party on!

• 1:06:27David Hoffman?

  All right, action items, Bankless Nation, here's what I want you to do. We talked about things like loans and Harvard degrees, but then Evan finished off with things like listening to your favorite band or engaging in art. And so I want you to think about what are the things that make you you and how that could be leveraged in the Web 3 world in the future, in the creator economy, in the NFT world, and all the beautiful art and cultural expression that could come out of these things when our DAOs, our organizations, our creators can have more verifiable and trustless data about who we are. That is your action item is to use your imagination. Of course, risk and disclaimers, we didn't really talk about cryptocurrency. And in fact, this episode was specifically not about cryptocurrency.

• 1:07:12David Hoffman?

  So while that is true, ETH is still risky, crypto is still risky, DeFi is still risky, but also leaking data is also risky. So be careful about the credentials that you touch in the world of Web 3. You can lose what you put in, but we are headed west, we're on the frontier. It's not for everyone, but we are glad you are with us on the Bankless journey. Thanks a lot.