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The Genesis Story of Ethereum with Camila Russo

How a 19-year-old genius and a ragtag group of hackers invented the new internet of money. Camila Russo, entrepreneur, journalist, and author, is our field guide through the Ethereum Genesis Story.

 My guest and chief storyteller today is none other than Camila Russo.

Camila is probably the most qualified person to tell this story on the planet right now. Camila is not only a journalist and entrepreneur but recently also became an author. The infinite machine - that's the title of her first book - chronicles in detail, the birth, and rise of the Ethereum blockchain. 

For the book, Camilla has recorded over 100 interviews with all of the original founders, countless community members, lawyers, and other key players that have shaped in some form the history of Ethereum. She has looked at the story from all angles and fact-checked everything with the journalistic rigor of a Bloomberg trained financial journalist. The outcome is a detailed account of Ethereum's past, present, and likely future that reads like a novel. I can recommend it to anyone interested in crypto. 

In our conversation. We also tap into the fascinating background of Camilla, a story that spans from Chile to the US, Argentina, Spain and back to New York. 

Learn more about Camila:

Buy Camila's Book: The Infinite Machine (Amazon)

Follow Camila Russo on Twitter

Subscribe to the Defiant Newsletter

Visit the Defiant.io


#5 The Genesis story of Ethereum with Camila Russo

Jonas: I don't know what happened.

Camila Russo: It's like  cut off is did the recording save? 

Jonas: I'm not sure. I mean, No, it seems good. It's it's uploading

Camila Russo: Oh, good. Good.

Jonas: imagine.

what you just witnessed were the agonizing moments right after we've been suddenly cut off about 30 minutes into our conversation. My guest was recording from her apartment in beautiful New York city.   And I was hosting from my quarantine workstation here at home in Zurich, Switzerland.  For a short moment, I was not sure if you would ever have to chance to listen to this foundational episode about Ethereum. 

Thankfully the entire conversation has been saved.  So let's start the show.

Hello and Welcome

Hello, and welcome to Unforkable. The podcast that brings you juicy stories from the world of crypto. My name is Jonas and today on the show, how a 19 year old genius and the ragtag group of hackers invented the new internet of money. The Genesis story of Ethereum.

 My guest and chief storyteller today is none other than Camila Russo.

Camila is probably the most qualified person to tell this story on the planet right now, because Camila is not only a journalist and entrepreneur, but recently also became an author. The infinite machine that's the title of her first book. it Chronicles in detail, the birth and rise of the Ethereum blockchain. 

For the book, Camilla has recorded over 100 interviews with all of the original founders, countless community members, lawyers, and other key players that have shaped in some form the history of Ethereum. She has looked at the story from all angles and fact checked everything with the journalistic rigor of the Bloomberg trained financial journalist she is. The outcome is a detailed account of Ethereum's past present and likely future that reads like a novel. I can really recommend it to anyone who's interested in crypto. 

In our conversation. We also tap into the fascinating background of Camilla, a story that spans from Chile to the US, Argentina Spain and all the way back to New York Start

So you, um, you dedicated this book, which is called The Infinite Machine - how an army of crypto hackers is building the next Internet with Ethereum, to your mom. So I was wondering, uh, how did you explain to your mom what Ethereum is?

Camila Russo: Um, yeah, that's a good one. Um, so I  the way that I explain Ethereum to my mom and  family, friends who, you know, most of them don't have anything to do with crypto, is that Ethereum is the infrastructure for new type of applications and a new financial system.

the infrastructure that Ethereum provides allows this system to be completely open and accessible to anyone anywhere in the world. And, you know, finances is one great use case for this, but the idea is that, um, any sort of application on the internet, will also be able to use these rails and have kind of value ingrained at the core

  Jonas: We are going to dive deep into the history of Ethereum a bit later in the episode. But first i wanted to get to know more about Camila's own background and history  

Starting to write and life story

 what were your first memories of writing? Cause it seems that you, that it's, it was a passion for a long time

Camila Russo: yeah. I've been writing for as long as I, I know how,  when I was a small kid,  like nine years old  I moved from Chile, my home country to the United States to Miami, and my grandmother gave me a diary, because she knew it was gonna be like a big change.

 At first the move was, kind of tough.  I didn't know the language, I didn't have friends , I missed my dad, so there was all these things happening and  I remember picking up this diary  and just, you know,  tried it out, like dear diary today, this is what happened in school.  I just started doing that, every single day, almost and it became this really great tool to express my feelings and just writing out what had happened during the day, evolved into telling stories, writing poetry  and then writing is the reason why I got into journalism as well.

Camila Russo Bloomberg Journalist

Jonas: That's so cool that you found your passion or your talents so early on, that's very rare. Um,  I've seen that. You studied also journalism at Northwestern in Chicago, and then later , started as a journalist at Bloomberg. Can you describe what Bloomberg is and what kind of stories are interesting for Bloomberg?

Camila Russo: sure. okay, so Bloomberg news is one of the biggest financial information companies. It provides really a specific information on markets and the economy. you know, like aIl, all, alll of like big wall street firms use Bloomberg.

 So at Northwestern I took a business journalism class. And through this business journalism class, they took us to the Bloomberg office in Chicago.

 I was so impressed , you know, sitting in front of a Bloomberg terminal

 if you've seen kind of images of a  trading floor and you know, it is like those like big black screens with  the colorful  numbers and charts inside 

and the keyboard with,  the colorful keys, um, that's a Bloomberg terminal.

 All of the information it seemed was at your fingertips.

It was like a, I dunno, like the GDP for Singapore for the past 20 years. And you could pull that up or like, what are the latest news of what's happening for the oil market? And you could pull that up and it's just like a wealth of information right there.

Camila starting her career at Bloomberg

Jonas: Camila was hooked and she applied for the Bloomberg internship. She got accepted and later hired as a journalist her first job right out of college

Camila Russo: So, it was an incredible place to start my career.  because I mean the standards are super, super high at Bloomberg. Like you need to, be super accurate. If you make a mistake, you need to correct it right away and it's  all documented in your metrics. So it's  super scary to make a mistake and you have to have   impeccable sources. So yeah, it really kind of helped, um, form me as a journalist.

Buenos Dias - Reporting on the economy in Buenas Aires, Argentina

 Jonas: And the journalistic rigor she would later also apply to the book and her reporting on crypto. But I'm jumping ahead because first Bloomberg sent Camila to Argentina to cover the markets there.  That was around the time when Bitcoin made its first appearance in the mainstream media

The first time Camila heard about Bitcoin

Camila Russo: The first time I heard about Bitcoin was in Argentina in 2013. I was there with Bloomberg and I was covering the Argentine markets and the big thing then and now is the super high inflation and currency controls that Argentines had to deal with  and find ways to protect their savings from their devaluing currency.

Jonas: Yeah, can you like explain that to the listeners what currency control is ? Because, I'm coming from Switzerland and our problem is sometimes, that the currency is too strong. 

  Camila Russo: So I think this is a very hard concept to grasp for people who haven't lived it before. So what happens in a country like Argentina is that, the local currency is continuously devaluing because the government finances, its spending by printing more of the local currency. 

And because it's a populist government, they were spending a lot on subsidies and other stuff and like building infrastructure and stuff they couldn't pay for. Because you know, they want to keep people happy and like, um, ...   an interesting thing that was happening was that, I was living in like a super  good neighborhood, like Bloomberg salaries in Argentina allowed me to live, you know, really well . And I got, you know, my electricity bill, which came like every three months and in the electricity bill it said , you would usually have to pay this much, but thanks to the government subsidy, you now, have to pay like cents. It was like a, like a laughable amount, like it didn't make any sense.

 I was earning super well, you know, I had a Bloomberg salary and I was still getting subsidy then. So that was , kind of the level of, of like crazy spending. And that was causing super high inflation, a inflation of 25%, um, a year. Your purchasing power declined throughout the year.

So with the same amount of money that you could buy, some amount of stuff at the start of the year could get you a lot less by the end of the year. So of course people, what they did was as soon as they got their Pesos, they bought dollars to have a stable currency to put their savings in.

And those who could even took those dollars outside of the country and put them in international accounts. Because you learned in Argentina don't trust the banking system, because it's happened before that banks have shut down withdrawals and have, kept savings locked up. So there's deep mistrust in the banking system.

So what happens then is that people buy dollars. that makes the local currency depreciate even further. And they take their dollars out of the country, and that means that the country's dollar reserves are going down, that means, that the country has less money to buy exports and pay for debt. And it's just like this like really bad spiral.

Argentina establishes currency control

Jonas: A really bad spiral indeed. One that only can be broken if the Argentinian government could reestablish trust in the local currency. Christina Fernandez de Kirchner was the president of Argentina at that time and she proposed a very simple solution on how the crumbling Argentine Peso could be saved.

Camila Russo: One day Christina said people can't buy dollars anymore, to kind of stop this from happening. And what was very crazy to me is that, I was at the Bloomberg office reporting when this happened. Christina made this announcement, you can't buy dollars anymore. 

And you know, I had been doing this myself, like as soon as I got  to the Buenos Aires  office, my colleagues told me when you get your salary in Pesos, you need to convert it to dollars right away.  And that's what I had been doing. And it was really simple. I had my Dollar account in the bank and my Pesos account, and it was like an online thing that I just like traded from my pesos to my dollar  account.

So after reporting on the news, I went to my, you know, online banking site and sure enough, the option to do that just wasn't there anymore.  Um, and it was  instant, I had just finished reporting on the news and then I went to my bank and the option wasn't there anymore. So it really hit me. Like you're not really in control of your money, like one day You get a crazy President and they can just do whatever. You can't buy dollars anymore. You can't take your money out of the country , or they can tell banks to limit withdrawals and you're stuck. You have nothing to do. So, um,  when later on I read about Bitcoin it really struck me. Wow. Like  there's this system where nobody can tell you what to do with your money. Like you're, you are really in control.

Jonas: And did you, then when this happened, did you then start to use Bitcoin or crypto right away or  did you use another system to hedge against the, so to speak against the Argentine peso?

Camila Russo: So I'm pretty much, um, risk averse, but I did buy some Bitcoin. Um, but you know, in, in general I just kept buying dollars. Um, yeah, I think.

How to buy dollars on the black market

Jonas: But how did you buy the dollars? Can you explain how that works?

yeah. Yeah. So, Oh, it's really interesting. The black market for dollars in Argentina is super well-developed because it's been there forever.

they call it the blue market, not the black market. So they say the dollar blue is,  the exchange rate in the black market.

 when you walk down, like the main Avenues, you have people  standing at the corners of the sidewalk and they'll just be there. And being like dollar, dollar, dollar. Almost like a street vendor. It's like right out in the open and, and because they're standing  on the sidewalk, they call them Arbolitos, which means  little trees, you know, because they're like lining the streets. Um, so yeah, you're walking down the sidewalk and then you go up to one of the Arbolitos and be like, hey,  what's your exchange rate?

They'll tell you, you go, okay.  I want to buy a hundred dollars and then they'll take it to like a back, like, I dunno, like they'll have like a front a store, like say ,um, selling cell phones or whatever, and then at the back, they'll have like their dollar exchange operation.

Um, and you'll just like exchange  your pesos for, for the dollars at  the black market rates. Um, And that's it. And then, I mean, you can like go shopping around the street for like the best rates. 

They even had like dollar delivery systems, um, where you could call like a, like a, like a guy who came in a motorcycle delivering dollars. So yeah, you had, um, a lot of crazy stuff. Um,  another thing is that, for example, most apartments  the rent is paid in dollars.

So, you had to do like crazy stuff.  I had to exchange pesos  for dollars in the black market to be able to pay rent. So I was like walking around downtown Buenos Aires with like a thousand dollars in my purse, um, which was a lot, um, to be carrying around. I mean even worse was people were actually buying full properties in, in cash , in dollars. Like a lot of the property market moves like that. There's hardly any mortgages because of inflation.

So people who buy properties, they need to have,  the amount of, of dollars upfront.

 Um, so yeah, it's, it's a crazy, distorted market. This is the reason why there are so many Argentines involved in, in crypto because the use cases is very clear for them.

In the search of a story - how Camila discovered Ethereum

This background would give you the perfect reason to be a Bitcoin  maximalist or a gold bug or something like that.

But what, when, when do you remember the first time you heard the word Ethereum and it made click and you were like, huh, that's interesting?

Camila Russo: Yeah, I think, I don't think there was a moment where I was like, wow, like Ethereum is the answer. Um, and I don't really think that either. So, you know, I always wanted to write a book and I knew that I wanted it to be a nonfiction book that read like a novel. And nobody had really told the story of Ethereum, you know, the second biggest cryptocurrency, that had helped fuel all the craziness of 2017 with ICOs and with this very charismatic leader behind it, and this  ragtag group of developers and, you know, it was like a really exciting story to tell. That's what initially drove me to Ethereum ,and then, you know, once researching it, I kind of started to understand  the real value behind it, kind of beyond what Bitcoin can offer.

Fundamental difference between Ethereum and Bitcoin 

 Jonas: So what is it, that Ethereum can offer that Bitcoin cannot. Let's hear it directly from someone who must know. 

Vitalik Buterin: Bitcoin is very good is very good for transferring money, but it was not designed as a foundational layer, for any kind of protocols to be built on top. So Ethereum is therefore its own blockchain. And here's the fundamental part, it has its own built in programming language.

You know, back in the 1930s,  Alan Turing came up with this, this concept of turing complete programming languages, where instead specializing for each individual application, you come up with a programming language and then that programming language is so powerful that you can build any application on top that can conceivably be built.

This is the reason why computers are so powerful today. This is the reason why web browsers are so powerful today. After we came out with JavaScript around 2000, the internet just blew up. The inventors of JavaScripts never intended for somebody to write Gmail on top of JavaScript, or for somebody to write Facebook on top of JavaScript or for somebody to write Bitcoin wallets on top of JavaScript. But JavaScript, this programming language of the internet browser, was the foundation for innovation.

And that's why 13 years later, we are still innovating today. And that's what I hope to bring to the world of cryptocurrency. Who is Vitalik Buterin?Jonas:  The voice you just heard of course, belongs to Vitalik Buterin, the founder of Ethereum himself.

This recording stems from the Bitcoin conference, 2014 in Miami. Where we tell it presented Ethereum for the first time to the public. 

 Vitalik envisioned that if Ethereum one day would be this global, open source platform for decentralized applications. Sending money back and forth would be just one of the many use cases. 

 Camilla has interviewed Vitalik many times so naturally I was wondering how he was like

Camila Russo: He's a very special character. I mean, physically he's super tall, super thin , he has this like very clear blue eyes and you look at him and he's , always like far away.  It's easy for him to just like, go far away and look to the distance and you can see him, like, what is he thinking about? You know, just like go off and, and, um, he'll even start kind of muttering to himself because he's like deep in thought. Uh, so he's yeah. He's like a very particular character. 

 He thought of this project when he was only 19 years old. His family is from Russia and he was born in Russia and in a city near Moscow, but he moved with his family to Toronto at a very early age. And he studied computer science, but then dropped out  to work on Ethereum.

Jonas:  But before Ethereum, there was Bitcoin. Vitalik fell in love with Bitcoin, but it was not exactly a love at first sight. Just like so many of us, Vitalik first struggled to understand the concept of Bitcoin.

 Why Bitcoin has valueOne thing that stood out to me when I read the book is, that when he learned about Bitcoin, his first thing was: "But this doesn't have any real world backing. How can it have any value?" And I think it's so interesting, because that's literally what everybody says, if you tell them about cryptocurrencies, Bitcoin, Ethereum...

Camila Russo: yeah.

Jonas:  How did you think about this in the beginning and how did it evolve?

Camila Russo: Yeah, I think it's, I think it's in the beginning, it's hard to kind of get this concept of money being issued by a network that's not controlled by anyone. But I think like once you realize there's real energy being spent to participate in this network and confirm transactions and, you know, solve this, like weird puzzle, which, you know, if you're the first to solve, then Bitcoin gets created and you need to spend a crazy amount of energy to solve this puzzle. Then you realize it's not like anyone can just mint Bitcoin out of thin air. And it is a lot like gold mining or like mining a commodity from the ground. Like it takes work to do.

Jonas: Vitalik must have come to a similar conclusion, because his skepticism towards the cryptocurrency quickly turned into a fascination and he invested more and more of his time researching and writing about bitcoin.

Camila Russo: Yeah, I mean, he went from being a bitcoin skeptic to being a full on Bitcoiner. He understood the value and then he wanted to participate in the Bitcoin economy. But he didn't want to just buy Bitcoin, he wanted to earn it. So he started writing for different Bitcoin blogs online in exchange for Bitcoin.

So that was his way of participating in the Bitcoin economy and earning Bitcoin. Um, and that's right, he started this system of writing, just releasing the first few lines of an article and then he would release the full article if people sent enough Bitcoin. So yeah.

Vitalik Buterin writes the Ethereum Whitepaper

Jonas: Once Vitalik immersed himself fully in the world of Bitcoin, he started to dream up all kinds of other applications that could be built on a blockchain. Initially, he wanted to build them on top of Bitcoin, but it quickly became clear that: 1. the Bitcoin community was not very open to Vitaliks experimentation and 2. that Bitcoin was not designed to be built on. 

Vitalik became convinced that he needed to start a new blockchain. One that was designed with programmability at its core. The idea for Ethereum was born. Vitalik wrote down his idea in an official whitepaper, which he released online. To his surprise his idea received a lot of positive feedback from other crypto enthusiasts around the globe and a small community of believers, who shared Vitaliks vision of the world computer, started to form around him .

Introducing the the co-founders of Ethereum

 uh, imagine one day maybe your book will be a movie, right?

Camila Russo: I hope so.

Jonas: So, which characters would show up and how would they get introduced in the movie?

Camila Russo: Oh, okay. Um, Oh, that's a tough one. Well, I guess like first thing is, there were eight initial co-founders, but in reality there were so many more people involved. And Vitalik was very much of the idea of just including anyone who wanted to participate in the project. And there was a hub in Berlin, there was a hub in Amsterdam, one in Toronto. So it was like, Uh, this like growing community of Ethereans, contributing to the project, in the beginning really for free.

So in my book , I start introducing characters  in  a chronological order.

So I don't know if that's the right way to make the movie. I started with Vitalik and then, how he met Mihai Alisie, who was a Poker player in Romania and they founded Bitcoin Magazin together. So that was the very start of the story. And then , next were Anthony Di Orio, who he met at a Bitcoin meetup in Toronto.

Um, then you know, he met Amir Chetrit at a conference in Amsterdam. Um, then Anthony Di Orio ,um, brought Charles Hoskinson in, um, and then at the end Miami house is when they all met. Or almost all of them, except for, um,  Mihai, who, who couldn't get a visa for the U S so he couldn't travel. And he was in Romania and Jeffrey Wilcke, who was an important developer in Ethereum in the early days.

And he was, um, in Amsterdam because he was kind of working undercover for Ethereum cause he was working at like this other blockchain project at the time. Um, but anyways, I think Miami is like a key moment, because. All of the founders were, or most of the founders were there plus other people in the community.

And so what happened in Miami is that Anthony Di Orio organized for everyone to come stay at this Mansion by the water, um, where they would prepare to announce Ethereum to the world for the first time at this conference, the North America Bitcoin conference. So they spent the whole week there and everyone remembers this very fondly as like a time where, you know, everyone was like sleeping on the couch and on the floor and like writing on like a whiteboard in the house, like designing what Ethereum would look like and also how, the funds that they raised would be distributed.

Um, and everyone had this like big dreams for, for the project and how they were creating that the next Bitcoin. And you know, this was 2013 and Bitcoin had just gone through like a big bull run. So everyone was like super excited. So I think this would be kind of the initial scene in the movie which would set the tone for, for the rest of it.

Jonas: And Joseph Lubin would be there too, right?

Camila Russo: Right. Yeah. Yeah. That's that's when Joe came in.

Jonas: and he, and Anthony would, is, is that right? They would come they're a little bit adults in the team and they would also fund the whole thing they had, they had money from their background somehow.

Camila Russo: yep. Yeah. Anthony. So Anthony Di Orio, um, he was a founder of a Bitcoin Decentral in Toronto and his, his family was somewhat wealthy. Um, and Joe Lubin had this background as a former hedge fund manager who had, eh, you know, dropped that, and, and got to manage his friends, musical career in Jamaica. Um, so, but for that, he was like at Goldman Sachs, so he was definitely kind of the adult in the room as well. And, and, and Joe and Anthony were the ones who helped finance Ethereum in the early days. They lend the money to the team. Um, but it's crazy because you have this like very strange mix of people, right? You have these like Goldman Sachs, hedge fund manager with this, you know, kind of entrepreneur like wealthy entrepreneur from Toronto mixed with this like 19 year old kid, uh, like, like Russian Canadian hacker.

Um, and like this, like Poker player from Romania, like a bunch of other  interesting characters.

Moving to Zug for the Ether Crowdsale

Jonas: After the successful announcement of Ethereum in Miami. Vitalik and his team were looking for a more permanent base where they could prepare for the ether crowd sale - a massive kind of crowdfunding that would fund the  development of the new blockchain. At that time, it was still unclear if Ethereum and would become a company or some sort of nonprofit organization. 

But either way, the town of Zug in Switzerland seem to be a good choice due to welcoming regulations. And this was crucial because the Ethereum ICO would bring up all kinds of legal questions.

 The most important one, if the ether crowd sale would fall under the securities law or not. 

Camila Russo: Um, so I, I spoke with, uh, Steven Nario, who was very much involved in, in the, in the conversations with the lawyers leading up to the ICO in the US and, um, you know, he, he remembers having this like lightbulb moment of, Oh, wow like ethereum isn't a security, because you, you actually use it as gas, as like actual like gasoline or like a stamp on a letter, like just something that you need, um, to for the network to work. And so since, since it has this utility, it's not a speculative security. Um, and so that's the case he made and actually, you know, convinced the lawyers  to agree with them. this was kind of how this term of utility token started gaining steam.

ETH is money, or is it gas really?

Jonas:  that narrative of Ether as gas, as something you use to use a network as a utility, this has really, um, yeah been the narrative for a while and now it seems they want to switch it back to Eth is money. Uh, some people at least  in the community want to do this.

Camila Russo: so Eth as, um, gas to pay for, for transactions on Ethereum was always there. And I think, you know, that was kind of one of the, like really clever designs of the project. Um, because the thing with Ethereum is that it's a turing complete platform, and this means that the platform can process any computation that you throw at it.

And so that makes it really complex and it makes it open to attacks, um, which, you know, an attacker could write up a computation that goes into  an infinite loop that never ends, um, and break the network and, you know, make it unusable because it will never finish kind of computing that, um,  transaction.

So the way that Vitalik fixed this is by saying, whenever you transact on Ethereum. You need to pay gas and gas is paid with Ethereum's native cryptocurrency ether. So that was like always a very key part of why Ethereum can work. Um, why it's feasible for it to be this like world computer right? Um, so it was definitely there, but the team working with the lawyers in the US definitely, you know, took this,  this, um, feature of the platform to make it more suitable for a sale. 

Charles Hoskin and the Red Wedding

  Jonas: and to prepare for the big Ethereum sale. Vitalik and his team of co-founders hunkered down in a small house in Zug. They called this house, the spaceship and just like astronauts on a mission. The core team was working, living and sleeping in the space ship for months. Unsurprisingly, the harmony could not last and especially the unresolved question of whether Ethereum should become a nonprofit or a company started to tear the group apart.  

 Um, again, a little bit thinking from the movie . How would that be portrayed? Would you say in the Ethereum story, who would be the villain in the story and why?

Camila Russo: Oh, no, I don't want to, I didn't want to pick a villain, but I think there's, there was definitely kind of like two sides to this. So there was like the nonprofit foundation side, which was led mostly by Vitalik and Mihai who were kind of the more like idealistic, um, you know, part of the group. And then there was kind of the more business side who wanted to build a for profit company, which would build applications on top of this open protocol.

And, um, the people leading that side were Charles Hoskinson and Anthony DI Orio, um, Amir Chetrit as well was also for, for the, for profit company.

Jonas: Lubin. Where did he stand?

Camila Russo:  you know, from my interviews, it was never quite clear that he was very strongly for one side or the other. Um, so both him and Gavin Wood were a little bit kind of, yeah. we're ambiguous on their position.

Jonas: Yeah. I would say a tense moment was when then, um, they, they got together and kind of, I think it was very well explained. They were there almost a year and just so much kind of tension building up and then. And Charles Hoskin  I also wanted to ask you this, how did he end up as a CEO of Ethereum in the first place?

Camila Russo: Charles always wanted to be the CEO, in his previous company, he wanted to be the CEO, um, with Ethereum when he came on they had this  early Skype conversations, uh, when the project was forming and, um, it was agreed that he would become CEO of the project.

And this was before they were clear on whether they would be a foundation or a company. So, um, that's how kind of this role of CEO came about in the early days. Um, so Charles was there in Switzerland, in the house with like the developers and designers, um,

and People started losing trust in him because, you know, Charles was very much of the idea of making a for profit company

 Um, he was, you know, talking to VCs and different big corporations to make partnerships with Ethereum. And people were very skeptical of this. And, um, they also kind of saw him, you know, going off on like meetings with lawyers and just like working by himself on the basement of the house and, and I don't know. Just like this distrust with Charles kept growing. Uh, people also mentioned these very long sessions where he'd stand in front of a whiteboard and just draw out, really complicated math formulas, just, for what it seemed  showing off. So it was just  little things that kept building and building in the house and, you know, imagine that they were a bunch of guys living, working, sleeping in the same rooms, um, eating together. They had  not much social life. Uh, so I think all these things with Charles really started to  blow up and  so that, you know,  by the end  nobody could stand him when they didn't want to work with him anymore.

They were complaining to Vitalik and Gavin, and everyone was just like tired of, of this tension. So, um, when this time came , in Zug, um, where, all the founders were, were called to, to come. This moment that, you know, people have called the red wedding. Um, and that's where like all of these tensions exploded.

 Jonas: Okay. And then Vitalik was, uh, had to make a tough decision.

Camila Russo: Yeah. I can only imagine how hard it was for him to make that decision. So after all of the guys in the house started criticizing Charles, the founders went off to meet on their own and they told Vitalik it's your project you decide what to do right now. And so, um, Vitalik made the decision that Charles and Amir wouldn't be part of, the  management group for Ethereum, even though they, they keep their titles as co-founders. Um, and yeah, instead promoted  two other team members to be part of the management group.

ICO Success and near deaths

Jonas: The ether crowd sale took place in 2014 from July to August and it was a huge success. Over 18 million us dollars were raised in Bitcoin from thousands of speculators and crypto enthusiasts.

At the time the Bitcoin price was about $500 and early investors would receive up to 2000 ETH per Bitcoin. Needless to say that the ones lucky enough to scoop up Ether for 25 cents a piece would become insanely rich in the coming years. If they had the stamina to hold on to their Ether, that is.

 Because it was definitely not smooth sailing going forward. Actually, there were many times in the short history of Ethereum, when the project almost died.

Camila Russo:  First up was what we talked about kind of is this debate between the founders of what it should become. Many startups don't survive a huge kind of conflict within the founders.

The 2014 - 2015 Bear Market

Then came this really bad bear market, between 2014, 2015. And Ethereum was really struggling. It was almost  running out of money , because  they had raised money in Bitcoin and they had their Ether and like prices have crashed. So they lost like half of what they had raised because of how Bitcoin had declined. It was a really tough moment for Ethereum in 2015, like people who were around back then had serious doubts about whether their project would be able to survive like it was in really bad financial, um, health. And then 2016 came and they had recovered their finances.

The DAO Hack

They were on much better footing. But then the DAO hack came. So that was a huge deal. 

Jonas: DAO stands for decentralized autonomous organization and the idea was that the DAO would be this kind of investor owned venture fund. It was one of the first and certainly the biggest smart contracts on Ethereum at the time. About 14% of all ether at the time was locked in the DAO smart contract. That was a huge honeypot waiting to be exploited.  

Camila Russo: Oh, like $150 million, which was by far the biggest crowd sale on Ethereum at the time They raised even more than what Ethereum had raised itself. So they had this huge stash of money locked in a smart contract and it was hacked. And you know, this led to the decision to fork the network.

So that means there was a new software created, which excluded the DAO hack. And this was like really, really tough for the blockchain and Ethereum community, because one of the big values of blockchain is immutability.

You know, this idea  that you have this network that just runs forever without human intervention. But here were Ethereum developers and team members deciding to create a different version of Ethereum because of this one project. So it was very controversial.

Many people thought Ethereum wouldn't survive this. Um  even more so when after the fork, the old Ethereum chain started running again and became Ethereum classic.  Disgruntled Ethereans, like people who didn't believe in the fork and also some Bitcoiners started supporting the old Ethereum chain. So it was a really like tough, tough moment. So I think those were kind of the biggest hurdles Ethereum had to overcome. Then like the ICO boom and bust, like the price crash, all of that. So it's been through a lot.

 Feelings during the 2018 Bear Market ? 

Jonas:  How did you feel in 2018 when everything was crashing and you were involved in this project and... Did you have sometimes doubts that maybe, Hey now everyhing is crashing and Ethereum will not survive, or how did that feel? Cause it was a brutal year, 2018, 2019 until just recently, actually.

Camila Russo: Exactly, um, yeah, it's a great question. I think  I didn't feel doubts about Ethereum and I think the reason was that, while the price was crashing, I was focused on following the Ethereum community around. And so I was going to the hackathons, I was going to the conferences and I was seeing the number of developers working on Ethereum just kept growing.

And I saw that they just kept building more and more interesting stuff. And just like delivering actual working products. And I just saw like just growing excitement, um, and it just, was in very stark contrast to the price. And when you went to these hackathons, like nobody was talking about the price or like ICOs, or like shilling tokens. They were talking about hacking and building and like creating stuff. So that was like really, really exciting, being a part of this community for the research of my book. And so there's is this anecdote, in early 2019 I went to Bloomberg to quit my job there and so I went to say hi to my team and they were all like very crypto skeptic. And so one of them was like, Hey, like how's  the book writing going? Good. It's going great. And then he pulls up the Ethereum chart on the Bloomberg terminal and goes like, Oh my God don't you ever write about me. Because you're writing about ETH and look, what's happening to the price. So, uh, but it was like, I knew that the price wasn't reflecting, what was actually going on in Ethereum. So I think  watching these  developers building, is what made me kind of not doubt the project.

Jonas: And also that he had actually on the Bloomberg terminal, the Ether price. I mean, that's also says something right.

Camila Russo: Yeah, yeah. I mean, it was during the 2017 boom and all the terminal users were just  begging for more crypto prices. That was like what was left from, from those days.

Bright Future for Ethereum

Jonas: So, now we just crossed five years mark of Ethereum. What are your hopes for the future? What, where do you see it go 

Camila Russo: Yeah. what's been the most exciting  in the past year  has been seeing this whole ecosystem of financial applications being born on Ethereum. It's like watching a completely new financial system being created from scratch  I cover it on the Defiant, the content platform that I created last year.

So I believe that Defi you know - how this ecosystem of financial applications are called - Defi will continue dominating the Ethereum landscape and it will continue growing and providing more value, attracting more people to it.

The Defiant

Jonas: Okay, that sounds amazing and very exciting. And you are, as you mentioned before, Defiant is your content platform, I think, is it a newsletter you can sign up for?

Camila Russo: Yeah, it's a newsletter, a podcast and now YouTube channel but you can, yeah, you can sign up at thedefiant.substack.com and it's an almost daily newsletter where I cover everything that's going on in Defi.

Jonas: Thank you so much Camila too to come on and go through the...

Camila Russo: of course.

Jonas: story with me. It's very amazing. I love the book. I think you really accomplished what you went out to do and tell an enticing story for everybody to read. I can only recommend it.

Camila Russo: It was my pleasure. I really enjoyed the conversation.

Jonas: Even though I'm a crypto-rookie, this podcast is very entertaining and it gives me nerdy insights and really funny stories. Looking forward to the next episode. That was my last review. Thank you very much kind, stranger, if you have listened until now until the end of the episode. Maybe you find couple of seconds to also write a review, uh, love to read them. Um, it helps that other people will find this show. And it's a sign of support. Also, um, you can go on unforkable.cc and signup in the mailing list. Currently, I'm not sending out any emails yet. It's from each as a signal that, Hey, somebody has listened to this episode and always happy to hear that as I was nice to get feedback and hopefully hear from you soon. Bye bye.    


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