"Ethereum as the Cyberspace Jurisdiction" by Arnaud Schenk // ECC#2 - Buenos Aires 2025

[applause] Good afternoon. Um, it's great to be back in Bonazarus. It's great to be here. Um, actually my first congress. Um, but um, despite despite what was introduced as me shilling you our tools, I'm actually not going to talk about Aztec and and Noir.

So hopefully uh hopefully it's a little bit more entertaining. Um I'm I'm actually wanting to speak about Ethereum and what Ethereum is, what Ethereum could be, the ways in which Ethereum maybe doesn't quite have um everything that it needs in order to fully succeed. And I'm not holding the right ticker, I don't think. That's the one. Um so who I am?

Who am I? Um my name is Arno. I'm one of the co-founders of Aztec. Uh we make blockchains useful by making them private. That's the long and short of it.

If you want to learn more about it, uh you can just go check out the website. Again, I won't bore you uh with with all the details. Um I want to talk about what Ethereum is, what it is 10 years on, and also what I hope it can be, um what I hope it it can become. And I want to start um maybe a little bit by uh telling you things that you probably already know. From my perspective, we started building in 2017, I started paying attention to Ethereum around the time of the ICO.

Um, from my perspective, Ethereum of 2025 is a project which lacks ambition. It's a project that has lost its ambition. We used to be ambitious. Uh, we used to actually uh believe that what we were doing could have a meaningful impact on the world. Early Ethereum, it gathered cabals of friends, cabals of people um who built companies, they built Dows, they built tried to build institutions uh where they actually believed, they actually hoped that it would change the world.

We wanted to build new judicial systems in the form of Claros. We wanted to build digital native organizations. Uh we wanted to build to to actually reform finance, make it global, make it frictionless, uh make it permissionless. And we wanted to even detach money from states. uh if you believe it.

To me, the potential at the time felt incredibly clear. The potential of Ethereum, the potential of um blockchain, the potential of of crypto as a whole felt incredibly clear. It represented something net new, something uh big. It was unique and it pointed to some extent to a future that if you grew up on the internet like I did, you felt like you already were a little bit a part of. It felt like maybe a a realization of that future path to it.

But unfortunately, I think along the way, we got a little bit scared. We got a little bit frightened. We got a little bit scared of our own shadow. Um, and my partial explanation of this uh for those of you who have who were around during the 2017 2018 uh boom and bust, uh I assigned quite a lot of blame to that period. Uh from my perspective, in 2017, optimism was sky-high.

we had a sense of purpose as a as a community. Um, and then uh by us not policing the space maybe as much as we could we should have been also because the promise and the vision that we were putting out into the world was actually resonant actually interesting um we were co-opted right uh grifters and opportunists um and people who wanted to take a bite out of uh the potential the the promise without actually delivering h came and went. So um we kind of lost faith in our ability to tell our own story. I think this is the big shame the the actual big downside of having gone through this early bubble and early collapse is that we used to be people that had uh a story that we wanted to tell that resonated with all of us. Um and the end result was we became ashamed a little bit afraid to be confused for these scammers who are using the same words as us.

they were they were telling the same story or a similar story and we thought that if they were saying it we couldn't say it anymore. This is not a new dynamic, right? This is something that happens all the time. When there is a story that is resonance, when there's a vision for the future um that feels somewhat fundamentally true, um you have uh always people that come come along and see the potential uh in in short-term ways uh but don't actually buy into what we're trying to achieve. My favorite example of this is 18th and 19th century America.

Uh where uh for uh those two centuries, it was very clear when you look at migration patterns, when you look at capital patterns, it was very clear that the story of those two centuries was America is the future. America is the land of abundance, America is the land of potential. America is where I I go to do my life's work. And of course that attracted people who saw that with dollar signs in their eyes. We we have this great book that I highly recommend about the the the birth and the growth of the west called Nature's Metropolis.

And the key story is Yeah. Yeah. of course like there there are these people that came and saw the growth of the West in the US um or what became the US and they saw a way to scam people. They saw a way to grift and they saw a way to expand their their own influence. uh these things like paper towns, the Mississippi land bubble, the Alabama um land fever, all these all these incredibly disruptive things came and went because the promise of America felt resonant, felt true in some fundamental sense.

Um but obviously uh the scams were were scams. People lost money. And all I can take from 18th and 19th century America is thank [ __ ] gods they didn't quit. Thank god they didn't see uh the scammers and the grifters and the people that were abusing the story and the vision that animated so many people to move to America. And thank God they didn't stop because there were scammers and grifters and abusers.

Thank god they kept going. And I say this because obviously stated and perceived ambition of a space of a technology of an idea matters a lot. It matters a lot because ultimately the future needs to be built and most likely to be built the future needs to attract the best and the brightest, the most ambitious um the most talented. My worry about Ethereum, I suppose, is that the world's most talented and ambitious, they must see Ethereum as the best place for them to build their life's work. And I don't think that's quite true at the moment.

And that's not quite true because Ethereum's uh stated and perceived ambition is low. Uh in many ways our predictions about the future have started coming true. I think we have been more directionally correct than not. Um h our vision for what is to come I suspect still has a lot of potential. It it's worth paying attention to.

And yet again the world's most ambitious people are not paying attention to us with that much of their time. And the the the most shameful thing I think from my perspective is we kind of have resigned ourselves to be passengers instead of drivers. Uh passengers of these mimemetic uh markets instead of instead of drivers of them. This must change. We have to uh we will never build the future that we want to build if we cannot tell the story in a way that is compelling uh to the right people.

So that brings me to the question well if we need to tell a story about what Ethereum is, what is Ethereum? And there's two memes that I'm sure everyone here has heard. Um, there's the meme of the infinite garden and there's the meme of the world computer. Now, no shame or no shade to the people that have been coining these memes. Um, but the infinite garden, I can't tell you what it means beyond just well, anything can happen here.

And the world computer doesn't evoke anything at all to me. That's not why I got interested in Ethereum in the first place. That's not what animated me to pay attention to it. Um instead to me Ethereum was a frontier. Ethereum was a reignite reigniting of cyerspace.

Ethereum was a place for and by the culture that I grew up in. Ethereum promised me a new jurisdiction, a jurisdiction of cyerspace. It promised to make the internet real in a way that I hadn't been able to be uh so far. It was meant to give us control and was meant to give us sovereignty. It was meant to be the home and to be allow to birth new institutions, a counterbalance to the molasses of traditional jurisdictions.

I yearn for that level of ambition. I don't see it very often and I yearn for it. It's critical from my perspective that we find and project that level of ambition again. that we get over the shamefulness that we seem to have acquired over the past decade about telling our story about telling why what we're doing is worthwhile. If we don't if we're not able to if we're not able to tell it in a compelling enough way, we will lose the future to people uh who find other stories to tell.

Stories that I suspect the people in this room don't find nearly as compelling. And maybe to close it out, um I'm going to give you my litmus test. My understanding of uh when Ethereum when I will be able to say Ethereum has succeeded. And my litmus test is not some grand vision. It's not some reform of the world government.

My litmus test is this digital neighborhood banks. Um I grew up on the internet. all of my friend groups, my high trust groups, everyone who I want to spend my time with, they're online first and foremost. Um, and what's shocking compared to uh the the world of uh of 19th 20th century um is that the infrastructure that my networks have access to is shockingly [ __ ] If I want my digital neighborhoods to have access to credit, to have access to funding, even if it's internal to that network, there's basically no way to facilitate that. What are digital neighborhood banks?

Neighborhood banks, well, they used to be small financial institutions that give access to credit um to embedded within a particular network, right? Embedded within a particular high trust network. Um these disappeared in the physical world and they've never reappeared in the digital one. for my friends friend groups for my uh circle of of my digital neighborhoods to be honest the only funding mechanisms that they have access to that we have access to are basically traditional credit who don't understand us and most of my friend groups are cross jurisdictional anyways they're international so the idea of getting a loan uh for a group project that is happening between Switzerland the US the UK that is incredibly difficult to do um or we can start a startup but that is an incredibly constraining uh thing, right? We we simply cannot put everything in the shape of startups or if we're lucky, we can get a grant, a grant for a particular kind of uh of ambition or particular vision.

That to me is insufficient. Um I want to be able to uh put money in a pot uh that is not going to be dispersed across the whole of the internet that is specifically going to be applied to the vision of the future that my digital um neighborhood has. And I want people within this digital neighborhood to have access to that money using traditional uh methods of credit. And if cyerspace were real, if the internet was a real place, a real jurisdiction, it should be possible to build such an institution. It should be possible for an entrepreneur, for someone who wants to change how things work to build this kind of institution.

And that to me is the litmus test of whether Ethereum is succeeding. If we're seeing these kinds of institutions pop up, we're in a good track, but I don't see them at all so far. So, we need privacy. Obviously, to do this, you don't want to lend money uh in the complete open. We need ways to resolve disputes.

We need ways to establish relative trust. Um and we also need an ability or willingness to take some regulatory risk. These are all things that um except for privacy we used to have uh in the early days of Ethereum we at least used to have the ambition um to to to do these kinds of things. I want to get back to that level of ambition. I yearn for it and I hope that you all and that this event connect as a whole this year allows us to get back to it.

Thank you very much. [applause]

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