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What’s really being celebrated on Black Friday and is it the biggest shopping day in the world?

Featuring Tom Merritt.

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Episode transcript:

At the end of the civil war the US government was deeply in debt, both from the cost of fighting and reconstruction. When General Ulysses S. Grant was elected president 1868 it had grown to $2.8 billion. That would be around 103.8billion in 2023.
To help pay for the war the government had begun issuing “greenback” dollars. These were not backed by gold or silver but promised an unspecified future payment. They had the effect fo driving up the price of gold.
So Grant’s administration pursued a policy of selling gold to buy up wartime bonds and by May 1869 the debt had been reduced to $12 million and the price of gold was suppressed.
All that cheap gold gaveJay Gould an idea. He was friends with Abel Corbin, who just happened to be married to Jennie Grant, the president’s sister. If they could prevail not he president to stop selling gold, the price would start going up. Knowing this in advance they could start buying up gold drilling up the price faster. Done right, they could corner the gold market and get unreasonably rich.
Gould enlisted one of his fellow directors at the Erie railroad, James Fisk into the plant.
On September 1, 1869 they started buying up large amounts of gold under other people’s names and driving up the price. Corbin planted the idea with Grant that selling gold would hurt western farmers and the plan should be suspended. But they got greedy. And when Grant’s personal secretary turned down an offer to open a gold account, they did it anyway. When he told the president about it Grant figured out what was happening. And on Friday September 24, 1869, the government resumed selling gold. Gold prices plummeted. And hundreds of people who were riding the gold wave along with Gould and Fisk, lost everything.
Stock prices plummeted 20 percent between that Friday and October 1st. Brokerage firms went bankrupt. Farmers really did get hurt this time with wheat and corn prices dropping by half. The economic turmoil lasted for months. Anti was all traced back to that one Friday. That Black Friday, in September 1869.
And it was that day that would, somewhat ironically, lend its name to what would become the biggest shopping day in the US.
Let’s help you Know a Little More about Black Friday.

Thanksgiving day was established by the US first constitutional president, George Washington in 1789. On the recommendation of Congress, President Washington proclaimed Thursday, November 26, 1789 as a Day of Public Thanksgiving. Thanksgiving days were proclaimed by subsequent presidents on a regular basis but the dates varied. It wasn’t until 1863 in the midst of the Civil War, that President Abraham Lincoln proclaimed that Thanksgiving should be commemorated on the Last Thursday of November each year.
The regularity made it a nice signpost not he calendar. Retailers began promoting holiday shopping starting the day after Thanksgiving.
That lasted until another economic depression, the great one. In 1939, the economy was showing signs of recovery. But Thanksgiving that year would fall on the very last day of the month. That meant the shortest possible holiday shopping season, meaning the smallest boost to the economy So President Franklin D. Roosevelt issued a proclamation that Thanksgiving would take place on the second to last Thursday of November, adding a week to the shopping calendar.
16 states refused to move the date and for two years, a third of the country celebrated Thanksgiving a week after the rest of the country.
So in October 1941, Congress passed a resolution declaring the fourth Thursday in November to be Thanksgiving. This kept it as the last Thursday most years, unless November happened to have 5 Thursdays. That kept the holiday shopping from getting too small without pushing it so far up the calendar.
Once that pattern was set, the Friday after Thanksgiving started to take on a character of its own. Workers began to call in sick on Friday in order to have a four day weekend. In 1951, the journal Factory Management and Maintenance began to refer to this phenomenon as Black Friday, referencing the panic of 1869. Friday also became a huge shopping day of course, and police in Philadelphia and Rochester began referring it to Black Friday as well because of the crowd management.
But the reference did not become common. The New York Times first called the Friday after Thanksgiving “Black Friday” in tis November 29, 1975 issue referring to the traffic in Philadelphia. But even as late as 1985, the Philadelphia Inquirer reported that merchants Cincinnati and Los Angeles were unaware of the term.
Meanwhile merchants were trying to avoid the usages connotations of a panic and disasters. As early as November 28, 1981, the Philadelphia Inquirer picked up an explanation put out by merchants that it was being called Black Friday because it was when retailers got “in the black” – aka profitable.
But by the late 1980s the term had gained wide acceptance. Retailers across the US began advertising Black Friday sales. More companies began to just give in and give workers Friday off since they were going to call in sick anyway.
By the mid 2000s the day had inspired “Cyber Monday” when workers came into their offices with computers and high bandwidth and shopped for deals online. Giving Tuesday was a counter-celebration to encourage people to spend money on charities instead of products.
The lockdowns because of COVID caused a lot of people to shift to online shopping on all days and by 2021, the Black Friday sales were no longer limited to Friday.
The prevalence of US-based retailers have caused the promotion of Black Friday sales outside of the US, even though those countries do not have the November Thanksgiving holiday. Some countries even promote Black Week or Black Month sales.
The success of Black Friday sales may have inspired Alibaba to co-opt a dating holiday in China called Singles day – on November 11th – to be a big sales day which now has passed Black Friday as the largest shopping day in the world.
Steely Dan wrote a song called Black Friday, released in 1975 just as the New York Times was picking up on the phrase in its post-Thanksgiving context. Steely Dan was writing about the 1869 panic but its words could apply to both

When Black Friday comes
I’ll collect everything I’m owed
And before my friends find out
I’ll be on the road

I hope you appreciate the probably unintentional double meaning. And hope you know a little more about Black Friday.

CREDITS
Know A Little More is researched, written and hosted by me, Tom Merritt. Editing and production provided by Anthony Lemos and Dog and Pony Show Audio. The public key cryptography players were Sarah Lane as Alice, Shannon Morse as Eve and Andrew Heaton as Bob. It’s issued under a Creative Commons Share Attribution 4.0 International License.

Taiwan is at once one of the most vexing political situations on the globe and one of the most important to the world of technology.

But few people understand how it got to be either. And understanding that is essential to understanding what might happen next and how that matters a LOT for the technology industry.

Let’s help you Know a Little More about Taiwan.

Featuring Tom Merritt.

MP3

Please SUBSCRIBE HERE.

A special thanks to all our supporters–without you, none of this would be possible.

Thanks to Kevin MacLeod of Incompetech.com for the theme music.

Thanks to Garrett Weinzierl for the logo!

Thanks to our mods, Kylde, Jack_Shid, KAPT_Kipper, and scottierowland on the subreddit

Send us email to [email protected]

Episode transcript:

Taiwan is at once one of the most vexing political situations on the globe and one of the most important to the world of technology.
But few people understand how it got to be either. And understanding that is essential to understanding what might happen next and how that matters a LOT for the technology industry.
Let’s help you Know a Little More about Taiwan.
This is not going to be a Dan Carlin-style dive into the history of Taiwan. If you know that history consider this a refresher. But for those of you who know little about the island, consider this an excellent starting point to understanding it. And for all of you, I don’t think understanding it is likely to get less important in the coming years. Because it’s one of the places on Earth where it’s conceivable to see a war involving China and the US. AND it’s one of the most important places in the world for building technology. Chips are in everything these days and the chips are made mostly by companies from Taiwan.
Let’s start with the where.
Taiwan is 168 islands including the Penghu islands but it is mostly one main island with the three main cities, Taipei, Tainan and Taichung. It’s about the size of Vermont. Or Albania.
It is located partway between the Philippines and South Korea, but very close to mainland China. It is 160 kilometers off the coast of southeastern China. About the distance from Dublin to Belfast. You could not fit Ireland between Taiwan and the mainland.
OK so why it’s important is both the tech industry, which we’ll get to later AND the dispute over it.
Let’s start with the dispute over what Taiwan thinks it is and what China thinks it is. Because Taiwan thinks it is China. This is one of the most common confusions I hear from people.
Taiwan’s government officially calls the country, the Republic of China. Well that’s odd, you might say. Isn’t there already a Republic of China? Yes. The People’s Republic of China. That’s the one most people think of as China. The one with its capital in Beijing. Both the People’s Republic of China and the Republic of China, which is on Taiwan, consider themselves the legitimate successor to the Republic founded in China on January 1, 1912 after the overthrow of the Qing dynasty. Where they differ is that Taiwan considers itself the true continuation of that republic and the People’s Republic of China says that republic ended in 1949 and was replaced by the People’s Republic.
So what Taiwan is, depends on who you ask? The People’s Republic of China – to oversimplify– says Taiwan is a breakaway province that is part of the People’s Republic. Eventually it needs to stop denying that fact, cooperate with the central government and unify with the mainland. Hence China’s strong objections to calling Taiwan a country, or having full diplomatic relations with it. The US wouldn’t want anyone having diplomatic relations with Texas, or Hawaii. The Uk doesn’t let Scotland go have separate diplomatic relations with other countries.
Meanwhile, the government of Taiwan still considers itself the rightful ruler of all of China. Hence its insistence on officially calling itself Republic of China.
And so you get weird situations like letting Taiwanese athletes compete separately at the Olympics, but only if they call themselves Chinese Taipei and use the Olympic flag.
There are other similar arrangements. For example England, Scotland, and Wales, all part of the UK, compete in World Cup competition as separate teams. The difference being that they are not all calling themselves the true UK.
I bring it up to illustrate the point the People’s Republic of China is making. If Taiwan is just a province of China, then it’s not odd to let it compete separately in things. So call it under a provincial name, and throw Chinese at the front just so people are clear. Taiwan goes along with this so its athletes can compete separately and they consider themselves China as well, so why not call them Chinese Taipei. It’s WAY more complicated than that but you get the gist and it kind of helps illustrate how seriously these countries take the “on paper” meanings of this dispute.
One thing the two countries agree on is that the Republic of China started in 1912.
Sun Yat-sen was the the founder and first provisional president. He is honored by both the People’s Republic of China and the Republic of China on Taiwan for ending the rule of China’s imperial dynasties. But it didn’t result in stability right away. China’s political history in the 1920s and 1930s is full of disputes between the Nationalist Party – aka the Kuomintang and the Communist Party. Sometimes those disputes became battles. The two parties teamed up in World War II to fight their common enemies, but never fully unified. The People’s Republic of China consider the Republican era to have ended on October 1, 1949 with the proclamation of the People’s Republic of China. The Republic of China in Taiwan, disagrees.
So that’s where the Republic of China and the People’s Republic of China come from.
Let’s talk a little about Taiwan and how it became part of China in the first place.
The smaller Penghu islands off the coast of the main China were often under mainland sway, the larger island though was somewhat independent. In 1622 the Europeans arrived, first the Dutch, then the Spanish. The Dutch called it Ilha Formosa or “the beautiful island” which was shortened to Formosa, which became the European name for the island. The Chinese didn’t like the idea of the Europeans getting too involved there. So it was finally annexed by China’s Qing Dynasty in 1683. There were attempted invasions over the next couple of centuries by Japan and the French, but Taiwan remained in Chinese control for a good two centuries. Then at the end of the war between China and Japan in 1895, Taiwan was ceded to the Japanese Empire, where it remained until the end of World War II.
So it was loosely affiliated with China until the late 1600s, then solidly part of China for a couple centuries, then occupied by the Japanese for 50 years. So it made sense in 1945 that it would go back to China.
In July 1945, The US, UK and China agreed to the Potsdam Declaration. Among its many provisions was that the islands of Taiwan would be restored to China.
On August 15, 1945 Japan’s Emperor accepted the terms of the Potsdam declaration and on October 25, 1945, Japan surrendered. After the surrender of Japan, Japan’s governor-general of Taiwan signed papers handing over administration of the island to General Chen Yi – a Nationalist– of the Republic of China.
One technicality, nowhere did Japan confirm in writing they were giving up their claim to Taiwan. There was no cause for concern on that in reality but it was a detail that needed to be taken care of. An i to be dotted. A t to be crossed. There were a lot of those. For example Japan technically remained at war, even after the surrender. Not something the matter in practice but you kind of wanted everyone to be clear on the point right? There were some official treaties in the works to nail down all those technical details.
Problem was while the paperwork was getting drawn up, China was having a civil war.
The Communists led by Mao Zedong an and the nationalists led by Chiang Kai-shek no longer united by an external foe, started battling for control of the country. And while the allies had been doing all the paper work with the Nationalist, the communists started winning the civil war. Mao felt confident enough to proclaim the People’s Republic of China as a replacement for the Republic on October 1, 1949 and by December 7, Chiang and the nationalists evacuated their army to Taiwan and set up a capital in Taipei. About 2 million Chinese people and soldiers made the move to Taiwan.
Meanwhile there were all those little things that hadn’t been taken care of regarding the end of the war with Japan, like compensation and rebuilding and oh actually declaring the war over.
So the Treaty of San Francisco was created to wrap up all those details and was signed by Japan on September 8, 1951. Among its many provisions, Japan formally renounced its claim to Taiwan.
Great. Except, China didn’t sign it. Because by that time there were two governments claiming to represent China, Mao’s on the mainland and Chiang’s in Taiwan. Chiang had held strong in Taiwan and with US support continued to claim to be the rightful government of China. There was some recent experience with supporting exile governments. An exile government of France had held out in England and recently been restored. So there was some feeling the same might happen in China.
Meanwhile the USSR wanted to support its communist comrades, and argued that Mao had won and so should be recognised as the legitimate government.
And meanwhile Japan just wanted China, any China, to sign something declaring the war over.
To solve that, on April 28, 1952, Japan and the Nationalist Republic of China government on Taiwan, signed the Treaty of Taipei, formally ending the war between Japan and the Republic of China in Taiwan. Not the mainland. But it was enough to satisfy Japan.
And there’s another little wrinkle to this. Back during the war in 1942– when everybody was on better terms, Soon Tse-vung, who’s sister was married to Sun Yat-sen- the man who founded the first Republic of China in 1912, signed a document along with Soviet diplomat Maxim Litvinov and US President Roosevelt and UK Prime Minister Churchill, which later became the basis of the United Nations Declaration. That document gave those four countries a special position in the formation of the UN. And so, the US, UK, Soviet Union and US were guaranteed to be on the UN’s permanent security council.
When the UN was founded in 1945, China got its seat. The civil war was just heating up and Mao hadn’t proclaimed the People’s Republic, so Chiang got the seat.
There was some talk about dual representation maybe but that ended in 1949 when the People’s Republic of China was founded and Chiang moved to Taiwan. So Chiang held on to it. And until 1971, Taiwan’s government held China’s seat at the UN.
It was a perilous situation though. Both countries strenuously called for there to be just One China. With the US and USSR facing off with nuclear weapons at the height of the cold war, it seemed unwise for a huge communist country like China to have no seat at the biggest diplomatic table in the world. It was counterproductive to world stability.
All countries wanted a better solution to this. I’m way oversimplifying her of course but that’s the general situation that led to US president Nixon secretly sending National Security Adviser Henry Kissinger to China’s Premier (under Mao) Zhou Enlai. He was often seen as the successor to Mao, and his ally Deng Xiaoping went on to govern China in the 1980s. In a talk between Zhou and Kissinger on July 9, 1971, Kissinger made clear that “we are not advocating a `two Chinas’ solution or a `one China, one Taiwan’ solution.” Zhou said “the prospect for a solution and the establishment of diplomatic relations between our two countries is hopeful”
That was good progress. Way to go Hank.
And on July 15, 1971 President Nixon announced he would visit the People’s Republic of China the following year. Remember that Nixon’s US has been fighting a proxy war against China in Vietnam. This is a huge shocking announcement.
Then, on October 25, 1971 a coalition of Soviet bloc and non-aligned countries, along with the UK and France, voted to give the People’s Republic of China the UN seat in place of Taiwan. The vote was initiated by Albania – you know Albania, the one about as big as Taiwan–
The US acted upset. But Nixon already said he would go to China. And he did. February 21st, 1972, US President Nixon began a 7 day visit to three cities in China, including a meeting with Chairman Mao Zedong. Mao told Nixon, “I believe our old friend Chiang Kai-shek would not approve of this”.
US TV audiences get a new look at China and we got the phrase “Only Nixon could go to China.”
The visit changed things for Taiwan too and got us closer to the odd situation we’re in now. The meetings resulted in the Shanghai Communique. The US acknowledged that “all Chinese on either side of the Taiwan Strait maintain there is but one China” but for now to set aside the “crucial question obstructing the normalization of relations.” Clever little diplomatic sidestep that let them be friends or at least friendlier, with both Chinas.
In fact, the US maintained formal relations with the Republic of China in Taiwan until 1979.
Because in 1978 China’s Communist Party really sweetened the deal. It declared that China was in a united front with the US, Japan and Western Europe against the Soviet Union. It supported US operations in communist Afghanistan against the USSR-supported regime there, and China conducted a military expedition against the US’s old nemesis Vietnam. China did all that.
So what are you going to do? On January 1st, 1979, US President Jimmy Carter and Zhou’s old friend Chairman Deng Xiaopeng issued the Joint Communiqué on the Establishment of Diplomatic Relations. This ended US recognition of the Republic of China in Taiwan and established formal relations with the People’s Republic of China. It also ended the Mutual Defense Treaty with the government on Taiwan.
So the US just up and abandoned Taiwan? No.
Not everybody was pleased with the President just ending the defense pact with Taiwan.
You see, the Mutual Defense Treaty with Taiwan had been passed by the Senate in 1954, and the Senate, particularly Senator Barry Goldwater, figured they were the only ones who could undo that. So Senator Goldwater brought a case to the Supreme Court as Goldwater v. Carter. But the court basically said our name’s Paul this is between y’all.
It issued a dismissal based on the fact that the case was a political matter not a judicial one and would not rule on it. The legislative and executive branches need to work this out amongst themselves. In fact, Justice Powell wrote in a concurrence that if the Senate had issued a resolution objecting to the dissolution then it would become a matter for the courts. The Senate had drafted a resolution but did not vote on it.
So that’s what the US Congress did. It went to work on making some laws. And on April 10, 1979, the US enacted the Taiwan Relations Act.
It defined how the US sees Taiwan separately from the People’s Republic of China and has shakily guided international relations around the two countries for decades.
The act refers to the “governing authorities of Taiwan” avoiding the whole issue of who gets called Republic of China. It did not restore diplomatic relations with Taiwan nor did it recognise its government. Doing either of those would have undone the last decade of warming relations instantly.
So no, we will not recognise Taiwan’s government. Instead the Act said Taiwan would be treated under U.S. laws the same as “foreign countries, nations, states, governments, or similar entities”. And the American Institute in Taiwan will not at all be an embassy but it can do anything embassies do. And all agreements made with Taiwan’s Republic of China before 1979 stay in effect with the governing authorities of Taiwan. Except the mutual defense pact.
Which you’re probably thinking was Senator Goldwater’s whole sticking point right? Yes. So here’s what the Act did do. It said “the United States will make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability”, and “shall maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or social or economic system, of the people on Taiwan”
In other words, don’t call it a country, but treat it like a country, don’t call it an embassy but use it like an embassy and don’t call it a defense pact, but make sure Taiwan is defended.
And crucially through all of this, never once has the US recognized the People’s Republic of China’s sovereignty over Taiwan.
This approach has been called Strategic Ambiguity.
And it worked. Sort of. It still pissed off China. China’s official position is that the Taiwan Relations Act is “an unwarranted intrusion by the United States into the internal affairs of China.” Deng Xiaopeng viewed the US as insincere. A feeling carried on and amplified by subsequent leaders. And over the years, the PRC drifted away from being united with the US against the USSR to aligning with developing nations.
But the US has not backed off of the strategic ambiguity of the TRA.
It reaffirmed the TRA with a nonbonding-resolution in the 1990s, a Congressional Research Service Report in 2007, and a concurrent resolution in May 2016.
And for its part Taiwan has pursued its own strategic ambiguity. You’d think it would have declared itself an independent country but it hasn’t. never declared its independence. In its early days this made sense. You don’t declare independence from something that doesn’t exist. In Chiang Kai-shek’s view, his was the legitimate government of China. There was nothing to declare independence from,
However since the US recognition of the People’s Republic of China, Taiwan’s insistence on this point–the one china policy– has lessened. If it ever abandoned that policy, theoretically Taiwan could just declare itself Taiwan, not China, and seek recognition from world governments.
China would not be OK with that.
Worried about the rising possibility of Taiwan admitting reality, China passed a law on March 14, 2005, restating that there is only one China, Taiwan is part of it, it’s illegal for Taiwan to secede from China, all means to peaceful reunification should be pursued, that under unification, Taiwan would get a lot of autonomy, BUT if Taiwan declares itself independent, or is taken over by another country, OR if all possibility of peaceful unification is lost, China will take non-peaceful actions. The law also states if it does go “non-peaceful” it must do so while protecting Taiwanese civilians and foreigners as much as possible, as well as Taiwanese interests in the PRC. Pay attention to that last. Because that includes Foxconn and TSMC plants.
Yeah about that. Why are so many Taiwanese companies operating in China.
Relations between Taiwan and China cooled off quite a bit in the 1990s and the two decided to ignore their diplomatic differences and focus on economic ties. By 2002, China was Taiwan’s largest market for export.
China hosts around 4,200 Taiwanese enterprises and more than 240,000 Taiwanese work in China. This dependence on China’s economy has been described as a blessing and a curse. On the one hand it has made Taiwan dependent on China, which gives the People’s Republic leverage over it. On the other hand, close economic ties make military intervention more costly.
Taiwan’s economic success is largely down to tech. The Taiwan Semiconductor Manufacturing Co. or TSMC founded in 1987 has a market cap equal to 90% of Taiwan’s GDP. It is in the top 10 largest companies in the world by Market Cap and a bigger semiconductor manufacturer than Intel or Samsung.
TSMC’s customers include Apple, Qualcomm, Nvidia, Broadcomm, AMD, Ampere, Microsoft, MediaTek and Sony. It makes about 60% of the world’s semiconductors.
Other major tech companies headquartered in Taiwan include Acer and Asus which make devices like Phones, laptops, PCs and more. And Foxconn- which also lists on the stock market as Hon Hai, and is famous for assembling Apple products in its mainland China-based factories, but also makes products for Microsoft, Amazon, Google and Huawei with factories located in Brazil, India, Vietnam and all over Southeast Asia.
Taiwan makes the most important part of arguably the most important devices for the world’s economy.
OK that’s not even a very deep look at Taiwan but it’s still a lot, so let’s summarize.
Taiwan’s current government originated on mainland China as one side of a civil war. Taiwan operates under the fading narrative that it is the true government of China. Only 12 countries, mostly in Micronesia and the Caribbean, have full diplomatic relations with Taiwan.
However it’s de facto treated like a country by the US and others but not fully recognised, as a way to placate mainland China which asserts that Taiwan is just a breakaway province that needs to be reunified.
Since the 1990s, economic interests have superseded diplomatic disagreements to the benefit of pretty much everybody. China got Taiwanese investments. The US got a cheap place to buy parts and assemble electronics. And Taiwan became dominant in the chip industry.
Not to oversimplify the country’s economy but Taiwan is the engine that drives chipmaking. If Taiwan’s companies suddenly disappeared, it would be a LOT harder to make electronics ANYWHERE in the world.
And the US has been able to pull off a magic trick keeping mainland China happy while sheltering Taiwan.
BUT the “strategic ambiguity” is beginning to wear thin. A stricter regime in China is pressing the issue more and is less placated by economic benefits.
From here, you need experts in international relations to explain things to you. But hopefully you have a good grip on the basics with which to understand what’s going on.
In other words, I hope you Know a Little More about Taiwan.
CREDITS
Know A Little More is researched, written and hosted by me, Tom Merritt. Editing and production provided by Anthony Lemos in conjunction with Will Sattelberg and Dog and Pony Show Audio. It’s issued under a Creative Commons Share Attribution 4.0 International License.

There’s a lot of fear uncertainty and doubt being spread about OpenAI. So let’s help you straighten out what it is and what it isn’t.

Featuring Tom Merritt.

MP3

Please SUBSCRIBE HERE.

A special thanks to all our supporters–without you, none of this would be possible.

Thanks to Kevin MacLeod of Incompetech.com for the theme music.

Thanks to Garrett Weinzierl for the logo!

Thanks to our mods, Kylde, Jack_Shid, KAPT_Kipper, and scottierowland on the subreddit

Send us email to [email protected]

Episode transcript:

OpenAI is BIG in the news these days what with ChatGPT, GPT-4, its partnership with Microsoft and mounting criticisms from multiple corners.
You may have heard it’s a non-profit. Or that it used to be and now it’s not. Or that it was supposed to open source things and now it’s not.
There’s a lot of fear uncertainty and doubt being spread about Open AI. So let’s help you straighten out what it is and what it isn’t.
Let’s help you Know a Little More about OpenAI.

OpenAI was founded Dec. 10, 2015 with funding donated by Sam Altman, Greg Brockman, Reid Hoffman, Jessica Livingston, Peter Thiel, Elon Musk, Amazon Web Services (AWS), Infosys, and YC Research.
It’s other founding members were scientists and engineers, research director Ilya Sutskever, as well as Trevor Blackwell, Vicki Cheung, Andrej Karpathy, Durk Kingma, John Schulman, Pamela Vagata, and Wojciech Zaremba.
Its advisors were Pieter Abbeel, Yoshua Bengio, Alan Kay, Sergey Levine, and Vishal Sikka.
And its co-chairs were Sam Altman and Elon Musk.
OK. That’s a lot of names. I can summarize by saying they mostly make up AI researchers from academia and places like Google and Facebook, or in some cases went on to work at Google and Facebook. Some are still there, some are not and some don’t seem to list their time at OpenAI.
The point being OpenAI made an effort to find to people in the field from all parts of the industry, that were really good at this. And the two driving visionaries of them were the last two names I mentioned. Sam Altman and Elon Musk. We could spend a lot of time talking about Reid Hoffman and Peter Thiel and their ties to Musk being former PayPal folks. And Greg Brockman is an interesting guy from North Dakota and joined Stripe as a founding engineer in 2010 and became CTO there in 2013. He was the first CTO at OpenAI and is now its President.
But I want to focus on Musk and Altman.
Elon Musk you probably know. Born in South Africa, founder of the first federally-insured online bank X.com which in 2000, merged with Confinity, makers of PayPal. Oh right. You might know him more for companies he invested in and bought like Tesla and Twitter. Or companies he founded later like SpaceX.
You might know less about Altman. Born in St. Louis. Went high school at Burroghs out in Ladue. Founded the social networking app Loopt in 2005 and sold it for $43.4 million in 2012. He was then president of Y Combinator in 2014. And he was the CEO of Reddit for 8 days in 2014 between Yishan Wong and the return of Steve Huffman.
Why these two? Well Altman is CEO of OpenAI. And Musk? He is the magnet and Altman’s the steel. [Brief Walter Egan music?]]
Let me explain, While CEO of Y Combinator, Altman began having conversations with Musk, sometimes recorded for the public, about AI. They both shared a concern that it was expanding too rapidly and companies in charge of it weren’t paying enough attention to the risks and to responsible development. They both believed AI could be one of the greatest benefits to humanity but also one of its greatest threats.
They weren’t the only ones thinking along these lines so they gathered together some like-minded folks I mentioned earlier. People concerned with ethics and responsibility. And from the beginning it leaned toward idealism.
OpenAI Incorporated was founded as, and still is, a 501(c)(3) nonprofit. From its beginning it reflected the concerns of Musk and Altman, writing on its website “It’s hard to fathom how much human-level AI could benefit society, and it’s equally hard to imagine how much it could damage society if built or used incorrectly.” OpenAI said it wanted to “to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.” It took $1 billion in investment and said it expected to only need to spend a small amount of that over the next few years.
But it had to spend more than it anticipated. AI researchers are paid a lot. OpenAI persuaded talent on its mission, its ethics and responsibility, paying better than nonprofits usually did, but less than Facebook or Google. Founding engineer Zaremba told Wired he turned down offers two three times his market value to work at Open AI.
So the people weren’t cheap. Also the cloud computing wasn’t cheap. Reuters reported that OpenAI spent $7.9 million about 25% of its budget on cloud computing in 2017.
If they wanted to make more progress they needed money to attract top talent and to be able to run more complex experiments.
So you can imagine that after the first few years, OpenAI is starting to wonder about that non-profit status. It’s got to make some hard decisions about all that openness too. I mean they’ve done some impressive things training video game bots with OpenAI Gym and Universal, but is that going to move the needle. They’re the ones doing this responsibly, but what does that matter if the big companies stay so far out in front. If they really want to advance AI, if they really want to be the ones protecting humanity and pushing for responsible development, they’d need more, right? So how do you do that and stay true to your core principles?
This was clearly important for Musk. Not long before the founding of OpenAI, he had told students at MIT that AI was humanity’s biggest threat.
So what happened next was surprising if not shocking. So why did it get downplayed?
On February 20, 2018 Elon Musk announced he was leaving the board of Open AI. In a blog post announcing new donors to the non-profit, Open AI wrote, “Additionally, Elon Musk will depart the OpenAI Board but will continue to donate and advise the organization. As Tesla continues to become more focused on AI, this will eliminate a potential future conflict for Elon.”
Well OK. He still believes in the mission, but he’s got his own AI at Tesla to develop so he probably shouldn’t be a director at a competitor, even if it is a nonprofit one. I mean it’s no hard feelings right? Musk even spoke to OpenAI employees to explain that conflict of interest before he left.
But the employees didn’t really seem to buy it. And the line announcing it, was buried at the end of a long first paragraph in a three paragraph post about other funders. Seems like a bigger deal than that no?
Well, maybe it was.
You see, everybody had a solution for that problem OpenAI had of falling behind. Musk’s solution was himself. Put me in charge! Let Musk run the show and he’d catch up. Just look at what he did to the auto industry right?
You may have heard that Musk can be a little — enthusiastic. Maybe rubs people the wrong way sometimes. That seems to have been the case with Open AI’s other founders. Maybe they were also annoyed that Tesla had taken one of those founding engineers- Karpathy. The kind of engineer they were having a hard time convincing to leave higher paying jobs to get. So it’s not too surprising in retrospect that rather than putting Musk in charge, the board moved Altman into the role of President.
And Musk leaving had another effect. According to Semafor, he was supposed to keep contributing money to OpenAI, but he didn’t. That was about $1 billion that the company was expecting to get that it no longer had. At a time when it was scraping to make the funding meet its ambitions.
And right then Google Brain released its “transformer” model. The T in GPT by the way. It was a huge leap forward for AI models, but required a lot more data to train, meaning a lot more computer power, meaning a lot more cost. A cost Google, which ran its own cloud services, could afford to pay. OpenAI, which paid Google for cloud services, could not. If it didn’t want to see Google seriously outdistance it, OpenAI needed to do something.
It started by releasing a new charter in April 2018. It still “committed to avoid enabling uses of AI or AGI that harm humanity or unduly concentrate power,” and said that its “primary fiduciary duty is to humanity.” But now it also said, “We anticipate needing to marshal substantial resources to fulfill our mission, but will always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit.”
A more public hint that things were changing was the announcement of GPT-2 on February 14, 2019. OpenAI’s Valentine’s Day gift was to not open source this release as it had for its previous releases. GPT-2 could take prompts and complete them. So give it a headline it could write the rest of the article. OpenAI justified the less open release by citing the risk that the tool could be used maliciously. Though a public interface was released. And eventually the full code was released in November.
But then it took a Serious step. On March 11, 2019 OpenAI pulled a move from Mozilla’s playbook. Mozilla had operated for decades as a non-profit that fully owned a for-profit subsidiary. This allowed it to make money on Firefox and attract talent and pay for development.
OpenAI was going to do a similar thing. OpenAI Incorporated, the non-profit, would form OpenAI Limited Partnership, a for-profit company, wholly controlled by OpenAI Inc. But OpenAI LP would be profit capped. Investors would receive up to 100 times their investment, and excess profits would go to the nonprofit OpenAI Inc. To assuage concerns about the move, Altman, the CEO of the new for profit company, took no equity in it.
So they had their solution. Sell non-controlling shares in the for profit company. Except nobody was buying. It was profit capped and the CEO didn’t even want a single share? Not for me.
Well, unless you’re Satya Nadella. In September 2019 OpenAI got its first big investment bite. Microsoft agreed to invest $1 billion, a nice replacement for the lost Musk donations. Not only would it invest but it had even better cloud resources than Google, so it would make its vast Azure infrastructure available. Money to pay talent AND bargain cloud computing. And Microsoft gets to become a bigger player in AI.
Microsoft and OpenAI built a supercomputer to handle the massive amount of data needed to train Large Language Models.
OpenAI was back in the race.
In January 2021, OpenAI released DALL-E a multimodal model that could create images based on a text description.
In August 2021 it launched Codex, which translates natural language to code, and powers Microsoft’s GitHub CoPilot feature.
And in November 2022 DALL-E 2 captured imaginations with much better performance and spawned multiple imitators like Craiyon and Midjourney.
But of the course the big leap also came with the launch of ChatGPT that same month. For OpenAI it was just the latest public demonstration of what its Large Language Model could do. Nobody got that excited when it launched DialoGPT in 2019. Why would this time be any different? Well. It was. But for whatever reason it captured the public imagination. Suddenly OpenAI wasn’t just staying in the race. It was leading it.
Google issued a code red. Microsoft and Google got into an AI announcement competition.
Altman was triumphant.
Musk was — not.
In December 2022, Twitter- now owned by Musk, pulled OpenAI’s access to Twitter data. Musk began tweeting criticisms of OpenAI.
On February 15, 2023, he sang his old 2015-era tune again to attendees at the World Government Summit in Dubai, United Arab Emirates, “One of the biggest risks to the future of civilization is AI.”
On February 27, 2023, The Information wrote that Musk was recruiting engineers and scientists to form a lab to compete with OpenAI.
And on Wednesday March 29 signed an open letter put out by a think tank he funded calling for all companies to pause their research into the next version of AI for 6 months in order to create a safety scheme.
Oh and the week before that, Shivon Zillis, the mother of Musk’s twins, resigned from the OpenAI board.
Altman on the other hand, talking on Lex Friedman’s podcast on March 25, 2023 described Musk as one of his heroes and said, “I believe he is, understandably so, really stressed about AGI safety.” [[find podcast sound for this?]]
So there you have it. OpenAI is a nonprofit AND a for profit company. It was co-founded by Elon Musk, but that’s not nearly the whole story. And whether it has remained true to the values from its founding or whether it engenders the fears it was formed to address. I’ll leave that up to you.
I just hope you Know a Little More about OpenAI.

The story of RSS is simple and yet combative. In fact RSS’s success may hinge on one man’s idealistic dedication to his principles. Tom takes you through the history of RSS.

Featuring Tom Merritt.

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You probably use an RSS feed. In fact if you got this episode as a podcast you definitely used an RSS feed. Most people these days don’t even know they’re there. The story of RSS is simple and yet combative. In fact RSS’s success may hinge on one man’s idealistic dedication to his principles. If you’ve ever thought “why are people making this so complicated?” If you’ve ever wondered what it would be like to be a person who just shut everyone up with an action that for right or wrong would stand the test of time. Get ready to Know a Little More about RSS.

People say RSS stands for Really Simple Syndication though it really doesn’t. That’s one of the charms of the story of RSS. Throughout its formative years nobody could agree on much and the name is still a matter of debate to this day.
If you’ve heard of RSS at all, it was most likely in connection with Podcasts. Podcasts are delivered through RSS feeds to the apps and platforms where you can listen to them. Behind every Apple Podcast, Google Podcast, Audible Podcast and even most Spotify podcasts, there’s a simple RSS feed. You may also use RSS as a feed for headlines. If you use Feedly, NewsBlur or Inoreader or something like that you’re using RSS.
But where did RSS come from? Oh my friends. Be prepared for a tale of idealism, abandonment, betrayal and perseverance. It is the tale of RSS.
In the earliest days if you wanted to know if a website had been updated you had to visit it. As websites became more common this became a chore. So people experimented with ways to let you know when a website had been updated, without you having to go there. One of the earliest attempts at this was the Meta Content Framework or MCF, developed in 1995 in Apple’s Advanced Technology Group.
Ramanathan V. Guha was part of that group and a few years later, he moved over to browser-maker Netscape, where he and Dan Libby kept working on these sorts ideas. Guha particularly liked developing Resource Description Frameworks, or RDFs, similar to the old MCF he worked on at Apple. They were complex ways to show all kinds of things about web pages without having to visit them.
But Netscape’s team was of Guha, Libby and friends was not alone. And early on they weren’t he most likely to succeed. The Information and Content Exchange standard, or ICE, was proposed in January 1998, by Firefly Networks — an early web community company– and Vignette- a web publishing tool maker. They got some big names to back ICE too. Microsoft, Adobe, Sun, CNET, National Semiconductor, Tribune Media Services, Ziff Davis and Reuters, were among the ICE authoring group. But it wasn’t open source. In those days respectable tech companies like those I just named, still cast a skeptical eye on open source code. How were you supposed to make money on it? Who would keep working on it if they weren’t paid? So the members of the ICE authoring group paid people to develop it. And in the end that meant it developed slower than competing standards.
Interestingly, ICE’s failure caused Microsoft to get a little more open, a little earlier than you might expect. In 1997 Microsoft and Pointcast created the Channel Definition Format, or CDF. They released it on March 8, 1997 and in order not to fall under the death by slow development that ICE seemed to, they submitted it as as standard to the W3C the next day.
It was adopted quickly and in fact its success planted the seed of its successor. Dave Winer had founded a software company in 1988 called UserLand. UserLand added support for CDF on April 14, 1997 one month after its release. Winer also began publishing his weblog, Scripting News in CDF. But CDF, like ICE, was more complicated than a smaller site needed. So on December 27, 1997, Winer began to publish Scripting News in his own scriptingNews feed format as well. He just simplified CDF for his own needs and made that available for anyone who wanted to use it to subscribe.
Meanwhile Libby had been working away at his own version of a feed platform and Netscape was about to make a big launch that would cause his project to surpass them all. On July 28, 1998, Netscape launched My Netscape Portal, This was one of the earliest Web Portals. A place that aggregated links from sites around the Web. You could add sites you wanted to follow, like CNET or ZDNet and then see their latest posts all in one place.
Netscape kept the links updated with a set of tools developed by Libby. He had taken a part of an RDF parsing system that his friend Guha had developed for the Netscape 5 browser, and turned it into a feed parsing system for My Netscape. He called it Open-SPF at the time, for Site Preview Format.
Open-SPF let anyone format content that could then be added to My Netscape. It was rich like CDF, open like CDF but had one advantage over CDF. It worked on My Netscape, which suddenly everyone wanted to be on.
Netscape provided it for free because that meant the company didn’t have to spend time reaching deals for content. You want your content on My Netscape, use Open-SPF, it can be there. That meant there was more content available for My Netscape than was usual on curated pages. The content was free for both the users and Netscape. More content meant more users and more users meant Netscape could serve more ads. And content providers were willing to create the Open-SPF feeds, because they weren’t burdensome to create and the sites got more visitors who saw their content on My Netscape and clicked on links to come to their sites.
Sound familiar? This arrangement is the one Google still tries to rely on for Google News. Except the news publishers have changed tunes. Back then they were all about bringing visitors to their websites and happy that Netscape sent folks their way for free.. But as the years have passed and revenue has shrunk, now they’re more about getting Google to pay them for linking to their news.
Anyway back to the rise of Netscape.
1999 is not only the end of the millennium. It’s not only when everyone actually got to party the way Prince had been asking them to pretend to party. 1999 was a huge year for RSS. It was about to reach its modern form and become something users of RSS today would recognise. By name.
On Feb. 1, 1999 Open-SPF was released as an Engineering Vision Statement for folks to comment on and help improve.
Dave Winer commented that he would love to add Scripting News to My Netscape but he didn’t have time to learn Netscape’s Open-SPF. However because he had his own self-made feed format using XML he’d “be happy to support Netscape and others in writing syndicators of that content flow. No royalty necessary. It would be easy to have a search engine feed off this flow of links and comments. There are starting to be a bunch of weblogs, wouldn’t it be interesting if we could agree on an XML format between us?”
However by Feb. 22, Scripting News was publishing in Open-SPF and available at My Netscape. Feeling like it was a success, Libby changed the name of Open-SPF to refer to the fact that it used RDF, calling it the RDF-SPF format and released specs for RDF-SPF 0.9 on March 1. Shortly after release he changed the unwieldy name to RDF Site Summary, or RSS for short. Thus begins the first in a parade of meanings for RSS
And the new name took off. Carmen’s Headline Viewer came out on April 25th as the first RSS desktop aggregator and Winer’s my.UserLand.com followed on June 10th as a web-based aggregator.
Folks liked the idea obviously, but a lot of RSS enthusiasts thought the RDF was too complex, Dave Winer among them. Libby hadn’t ignored Winer’s earlier offer either. In fact, Libby thought they weren’t really using RDF for any useful purpose. So he simplified the format adding some elements from Winer’s scriptingNews, and removing RDF so it would validate as XML. This was released on July 10, 1999 as RSS 0.91.
Some folks write that the name changed to Rich Site Summary at that point but Winer wrote at the time “There is no consensus on what RSS stands for, so it’s not an acronym, it’s a name. Later versions of this spec may say it’s an acronym, and hopefully this won’t break too many applications.”
Anyway by 1999, like Toy Story, RSS is on a roll. Libby is bringing in feedback from the community and creating a workable usable standard that is reaching heights of popularity beyond just the confines of My Netscape.
Like some kind of VH1 Behind the Music story, as it reach that’s height, everything fell apart.
Netscape would never release a new version of RSS again.
In the absence of Netscape’s influence, two competing camps arose.
Rael Dornfest wanted to add new features, possibly as modules. That would mean adding more complex XML and possibly bringing back RDF.
Dave Winer preached simplicity. You could learn HTML at the time by just viewing the source code of a web page. Winer wanted the same for RSS.
On August 14, 2000, the RSS 1.0 mailing list became the battleground for the war of words between the two camps.
Dornfest’s group started the RSS-DEV Working Group. It included RDF expert Guha as well as future Reddit co-founder Aaron Swartz. They added back support for RDF as well as including XML Namespaces. On December 6, 2000 they released RSS-1.0. and renamed RSS back to RDF Site Summary.
Not to be left behind, two weeks later On December 25, 2000, Winer’s camp released RSS 0.92.
Folks, grab your steaks knives. We have a fork.
In earlier days, Libby, or someone at Netscape, would have stepped in. In But AOL had bought Netscape in 1998 and had been de-empahasizing My Netscape. They wanted people on AOL.com. And if they didn’t care about Netscape, they cared even less about RSS. In fact they actively did things that could have ended RSS. In April 2001, AOL closed My Netscape and disbanded the RSS team, going so far as to pull the RSS 0.91 document offline. That document was used by every RSS parser to validate the feeds. Suddenly all RSS feeds stopped validating. Apparently this had little effect on visitors to AOL.com or people dialing in to their internet connection, so AOL just let them stay broken. With the RSS team gone and AOL doing nothing, RSS feeds were looking dead in the water.
But the RSS 0.91 document was just a document after all. And there were copies. Anybody theoretically could host it as long as everyone else changed their feeds to validate to the new address. Dave Winer stepped up.
Winer’s UserLand stepped in and published a copy of the document on Scripting.com so that feed readers could validate. That right there won Winer a lot of good will.
An uneasy truce followed. Whether you were using Netscape’s old RSS 0.91, Winer’s new RSS 0.92 or the RDF Development Group’s RSS 1.0 they would all validate.
By the summer of 2002, things are going OK and tempers have cooled. Nelly has a hit song advising folks what to do if things get hot in here. Maybe we can solve this? Let’s try to merge all three versions into one new version we can all agree on and call it RSS 2.0. right?
Except they couldn’t agree. Winer still wanted simplicity. RDF folks still wanted RDF and the fun features it would bring. They would agree to a simplified version of RDF but they still wanted it. To make matters more confusing, Winer was discussing what should happen by blog, with everyone pointing to their own blogs. The RDF folks were talking about it on the rss-dev mailing list.
Communication, oddly in a discussion about a communication platform, was the problem. Since neither side was seeing each other’s arguments they never came to an agreement. So Winer’s group decided not to wait. On September 16, 2002, UserLand released their own spec and just went and called it RSS 2.0. AND Winer declared RSS 2.0 frozen. No more changes.
Discussions continued on the RSS-dev list but Winer’s camp got another victory when in November 2002, the New York Times adopted RSS 2.0. That caused a lot of other publications to follow suit. Further consolidating the position.
The next year in another move fending off the debate, on July 15, 2003, Winer and UserLand assigned ownership of RSS 2.0 copyright to Harvard’s Berkman Center for the Internet & Society. A three-person RSS Advisory board was founded to maintain the spec in cooperation with the Berkman Center which continued the policy of considering RSS frozen. Mic. Dropped.
There was still a resistance. IBM developer Sam Ruby set up a wiki for some of the old RDF folks, and others, to discuss a new syndication format to address shortcomings in RSS and possibly replace Blogger and LiveJournal’s protocols. The Atom syndication format was born of this process and was proposed as an internet official protocol standard in December 2005. Atom has a few more capabilities and is more standard compliant, being an official IETF Internet standard, which RSS is not. But in practice they’re pretty similar. Atom’s last update was October 2007 but it is still widely supported alongside RSS.
And RSS 2.0 kept going. In 2004 its abilities to do enclosures, basically point to a file that could be delivered along with text, led to the rise of Podcasts. Basically RSS feeds that pointed to MP3 files.
In 2005, Safari, Internet Explorer, and Firefox all began incorporating RSS into their browser’s functions. Mozilla’s Stephen Hollander had created the Web Feed icon, the little orange block with a symbol like the WiFi symbol at an angle. It was used in Firefox’s implementation of RSS support, and eventually Microsoft and Opera used it too. It was also used for Atom feeds. Stephen Hollander did what most could not. Get people interested in providing automated Web feeds to agree on something.
And in 2006, with Dave Winer’s participation, RSS Advisory Board chairman Rogers Cadenhead relaunched the body, adding 8 new members to the group in order to continue development of RSS.
Peace in the form of an orange square was achieved.
OK. So RSS has a colorful history. What the heck does it do?
That part is pretty simple. It’s a standard for writing out a description of stuff so that it’s easy for software to read and display it.
Basically you have the channel (or Feed in Atom) and Items (or entries in Atom).
RSS 2.0 requires the channel to have three elements, the rest are optional. So to have a proper feed you need a title for your channel, a description of what it is and a link to the source of the channel’s items.
Like Daily Tech News Show – A show about tech news. And a link to dailytechnewsshow.com
Optional elements of RSS are things like an image, publication date, copyright notice, and even more instructions like how long to go between checking for new content and days and times to skip checking.
The items are the stuff in the feed. There are no required elements of an item, except that it can’t be empty. It has to have at least one thing in it. So an item could just have a title or just have a link. However most of the time an item has a title, a link and a description. The description can be a summary or the whole post. Other elements of the item include author, category, comments, publication date and of course enclosure.
So for our Daily Tech News Show example title might be Episode 5634 – AI Wins, the description might be “Tom and Sarah talk about how AI just won and took over everything.” And the link to the post for that episode.
The enclosure element lets the item point to a file to be loaded. The most common use for the enclosure tag is to include an audio or video file to be delivered as a podcast.
For Daily Tech News Show that would be a link to the MP3 file.
In the end an RSS reader or a podcast player looks at an RSS feed the way your browser looks at a web page. It sees all the titles, links descriptions and possible enclosures, and then loads them up and displays them for you.
After a rather stormy opening decade, RSS has settled down into a reliable and with apologies to team RDF, simple way of syndicating info. Really Simple Syndication indeed.
Like podcasting which it provides the underpinnings to, RSS has been declared dead several times. But it just keeps on enduring. I hope you have a little appreciation for that tiny file that delivers you headlines and shows now. In other words, I hope you know a little more about RSS.

Tom clears up the confusion in Ethereum’s new method of verifying its blockchain and explains the different approaches blockchains utilize.

Featuring Tom Merritt.

Episodes mentioned:

About Blockchain

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Episode transcript:

I heard one of those big crypto outfits merged something to proof of stake

Does this mean only rich people control cryptocurrency?

Or does it somehow involve beef?

Confused? Dont’ be!

Let’s help you know a little more about Proof of Stake.

In our episode on how a blockchain worked we talked about one of the big advantages of the blockchain is that it’s really hard to fake a record or manipulate how transactions get recorded. It is very difficult to alter the ledger.
See that episode for more details, but one way to preserve this aspect of decentralization is to make it hard to be the one who adds and validates new blocks to the chain. You want to make it hard and hard to predict who will get to do the block validations. In that episode we talk mostly about proof of work. This is the system that requires a node to be the the first to calculate a very hard problem in order to have the right to add the block to the chain. In Bitcoin’s blockchain it’s called “mining” because you’re also rewarded with a bitcoin. The calculation is such that just having the most power won’t assure you do it first, but you will need a lot of computer power, so not just anyone can attempt it. And the downside is, it uses a lot of energy.
But we briefly mentioned another method called Proof of Stake. Instead of requiring work to be done, Proof of stake uses a random factor to distribute who gets to add the block. This still prevents actors from dominating the block validation, but without the energy use caused by proof of work. One proof of stake method is coin age. The actor that has the coin they have held on to the longest without spending OR being used to prove their stake, gets to calculate the next block. The example we give is you have kept a coin for 90 days another actor has kept a coin for 75 days and everybody else has kept their coins for 60 days or less. You get to calculate the next block, but then your coin age is reset to 0. The next block would go to the actor who had a coin for 75 days. In practice other factors are also used to prevent participants with large collections of coins from being able to dominate the network.
Ethereum switched from proof-of work to proof of stake. It wasn’t the first blockchain to implement proof of stake but it certainly is the biggest.
Ethereum uses a system of at least 16,384 validator nodes– it has more than 400,000. To become a validator, a node must “stake” 32 ETH. That’s 32 ETH per node. The stake cannot be spent. Validators are chosen at random to propose validating a block, using Ethereum’s own “good enough” RANDAO system. A committee of 128 validator nodes then attests to the block.
Each validator node on the committee adds its verification to a block of “shards.” When 128 shards have been attested that shard block is done. When 2/3 of the validators on a committee agree that the transaction is valid, it is finalized and closed and replicated throughout the blockchain. Validators receive transaction fees as a reward for both proposing a block and attesting to it.
One side note about the shard aspect of this. Sharding lets multiple blocks be processed at once. So instead of validating a block. Adding it to the chain and validating the next block. Ethereum will run 64 shard chains at once. As each shard block is finished its added but it doesn’t have to wait for all the other shard blocks to finish. It can just be added when it’s done. This means the Proof of Stake Ethereum chain can process transactions at least 64 times as fast as the proof of work chain could.
You could do sharding on a Proof of work system, but because computer power would be lower on each shard chain, it would be less secure. Since Proof of stake doesn’t use computer power as an element of choosing the validator, it is not susceptible to that weakness.
As we mentioned Proof-of-work uses energy. It requires computations be difficult so that it’s hard to win the right to make a block. Proof-of-stake doesn’t use nearly as much energy since there is no intense computation required to win the right to record a block. Before it switched to proof-of-stake on September 15th, Etehreum estimated energy consumption on the Ethereum blockchain would drop by around 99.95%.
In a proof of work system the limiting factor on someone validating blocks is equipment and energy. In a proof of stake system, it’s the amount of tokens they can buy or already own and then just random luck.
Proof of stake doesn’t reward the actor with the most expensive equipment. When balanced properly it’s expensive enough to buy in as a validator that there is a barrier to bad actors from entering, but it is not so high a barrier that a wealthy actor can dominate the system. Random assigning of validators means if the pool of validators is diverse and balanced, then it would be extremely difficult to manipulate the system.
One safeguard is the requirement to use tokens as a stake in order to validate and they can lose that stake. Misbehavior can see a participant lose some or all of their stake. At the very base if they qualify as a validator and then fail to participate they lose their stake. The penalties are small enough on each instance, that getting knocked offline won’t wipe out a stake. Consensys.net estimates that “if a validator is participating correctly more than half the time then her rewards will be net positive.” This is meant to keep bad actors from teaming up to sabotage the network by not validating new blocks.
On the Ethereum chain there are two dishonest behaviors that can result in an actor losing their entire stake. One would be proposing multiple blocks at once, also called equivocating. Another would be proposing contradictory attestations. In other words saying the block is valid but also saying it’s invalid. The more validators that attempt this at once, the higher the penalty. One validator acting alone would lose 1% of their stake, but the more that attempt it the higher the percentage up to possibly losing the whole stake. A violator can also be ejected from the network.
Other kinds of attacks on the blockchain can also be attempted. Ethereum argues that since validators do not need to do energy-intensive work to conduct validation, they have more flexibility in fighting off attacks. For instance, if a bad actor attempted to fork the chain to their advantage the good actors could promote a minority fork of the blockchain without the bad actor as the valid one and cut out the bad actors stake.
Most proof of stake systems have other security features that they intentionally do not advertise in order to reduce attempts to circumvent them.
Proof-of-stake is more complicated. On Ethereum, users have to run three pieces of software to participate. Proof-of-work systems generally only need one.
But in the end Proof-of-stake is more accessible and quite a bit more energy efficient. Its proponents argue that it should also be more efficient. Expect more blockchains to copy Ethereum’s successes, and learn from their mistakes. In other words, I hope you know a little more about Proof of Stake.

The Indian telco Jio Platforms launches the low-cost 4G JioBook laptop, Chinese chip imports and output falls by double digits in September, and the RNC sues Google over campaign emails going to spam.

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Show Notes
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Why did Twitter grant 4,000 plus employees elevated access privileges to user accounts and how does that compare to a competent IT security policy? Sensor Tower reports revenue from Apple’s App Store dipped 5% on the year in September and Google Play revenue fell 8% on the year. Is this simply due to inflation and COL issues and what does it mean for those services moving forward? The European Council approved the Digital Services Act and USB-C for charging phone, laptop and other devices.

Starring Tom Merritt, Sarah Lane, Rod Simmons, Roger Chang, Joe, Amos

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Show Notes
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Sony gives journalists some hands-on time with their upcoming next-gen VR headset the PSVR2. A study reveals people are more willing to lie to others when using a laptop vs a smartphone. On September 15th at around 1 AM Eastern time, the Ethereum blockchain will experience “The Merge” where it will switch from proof of work to proof of stake. Why does it matter and will holders of Ethereum notice?

Starring Tom Merritt, Sarah Lane, Scott Johnson, Roger Chang, Joe, Amos

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Multiple versions (ogg, video etc.) from Archive.org

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Subscribe through Apple Podcasts.

A special thanks to all our supporters–without you, none of this would be possible.

If you are willing to support the show or to give as little as 10 cents a day on Patreon, Thank you!

Become a Patron!

Big thanks to Dan Lueders for the headlines music and Martin Bell for the opening theme!

Big thanks to Mustafa A. from thepolarcat.com for the logo!

Thanks to our mods Jack_Shid and KAPT_Kipper on the subreddit

Send to email to [email protected]

Show Notes
To read the show notes in a separate page click here!