Phil Daian is, in my opinion, one of the most interesting people in all of crypto right now. The son of Romanian emigres who came to New York after the fall of Ceausescu, Phil started coding and creating video games he’d give to friends on a floppy disc in fifth grade. Then piracy issues caught his attention and he ran hacker forums and went deep into the culture on HackThisSIte. That led to cryptography and IRC chats and a little game called Minecraft, where he was one of the first people to buy the game within an hour of it going on sale. He found a security flaw in the infamous Silk Road black market bazaar; they offered him a $400,000/year job to head security. Lucky for us he turned it down. Soon after he discovered Ethereum and helped expose some early flaws in the ill-fated DAO project of 2016. Most recently he’s helped create Flashbots, a group of like-minded coders and researchers who are trying to level the playing field for all users of the nascent blockchain ecosystem.

We spoke for over an hour in one of the most interesting crypto conversations I’ve had in recent memory. I decided to split the interview into two parts, and I hope you check back for the second installment in a day or so.

Matt Leising: Phil, thank you so much for being here. I know you are based in upstate New York, but can you tell me where you grew up?

Phil Daian: I grew up in the New York City area. My parents lived in Queens. I was born in Manhattan. My parents were Romanian immigrants. They left kind of right after communism ended in Romania to try to have a better life for their kids. And so yeah, I grew up kind of bouncing around the New York area. I was in Queens for a while then we were in Fort Lee, New Jersey, which is right across the George Washington bridge. Then I spent a lot of my early life in a suburb called Greatneck which is the first suburb outside of Queens on Long Island. Culturally I was raised Romanian. My parents taught me Romanian, not English because they didn't want to give me an accent. So I learned English in school.

ML: Was it Ceausescu and the Romania revolution? Was that what happened?

PD: Yeah.

ML: Did they live through that and then that's how they were able to leave for New York?

PD: Yeah, they did. My dad was actually there in the revolution in the square and everything. They were excited to not have communism, I guess, but also not certain about whether Romania really had a future given the kind of a power vacuum and things like that.

ML: Does he tell you any cool stories or, I mean, cool might be the wrong word, but any stories about that revolution and what it was like to go through?

PD: I've definitely heard a lot of stories. I think there's a surprising amount of normalcy of like, they were just young people in their mid-twenties living their lives and crazy shit was going on. One of their friends had a bunch of bullets fly through one of her buildings. Then I don't remember exactly whether they knew this person or not, but someone right in that building I think ended up having their daughter get hit by a stray bullet and she was killed. So it was also just a lot of randomness and the power struggle between the military, the police and the secret service.

ML: I remember a long time ago I was in Berlin, in Kreuzberg, and I was staying with somebody who lived through when the wall fell. One of the things that always stuck with him was that he said the first thing all the East Berliners did was go and buy bananas because they had not been able to get bananas for years in east Berlin. So it's this weird mix of the normal and the extraordinary going on in those kinds of situations.

“I would go to school, do my homework in school mostly and then just kind of play around on the computer and try to get up to no good in various ways.”

ML: Do you think their experience informed you as a kid and where you've found yourself later in your life?

PD: I think so. My mom is a doctor, she was a cardiologist in Romania, an emergency cardiologist. We moved here and she started working in the ER in Newark in the 90s which was super violent. There were riots going on, it was just a violent place to live and there were lots of shootings she had to deal with and drug ODs and people on all sorts of crazy shit. Basically she couldn't take it anymore and so she went into family medicine. She was very altruistic and always gives to the community and the people around her. That was definitely part of what informed my personality.

PD: My dad worked in IT. He was an electrical engineer by training. But he couldn't find a job doing power plant work here, which is what he wanted to do. So he worked at Sony for a while in manufacturing and robotics, but then he got sucked up into the dot com boom kind of very early on.

PD: Fun, random tidbit. My dad was one of the heads of the internet side of PR Newswire, which I'm sure you're familiar with.

PD: In the nineties he was basically the one maintaining, by himself, control over all that infrastructure that was then moving to the internet. And it was some really janky CGI script on the backend. I just liked the idea that my dad, this random IT guy, was controlling the news flow of the monetary infrastructure of the world.

ML: Oh yeah, those press releases can move markets in a heartbeat.

PD: Yeah, exactly. So maybe in some ways by being part of FlashBots sometime in the 2020s I'm following in his footsteps in that way of being that IT guy who maintains the pipes but is randomly very important.

ML: Absolutely. What did you like to do in school? What were your classes that didn't feel classes?

PD: Well, I liked all of school. I love learning. I really liked all subjects. I particularly liked math. It was more outside of school where I’d go home and code. My dad was also part of one of the first cable companies. We had cable before I was born in ’94 so I've always had high-speed internet, which I think for people who are of my generation is not that common. I kind of got a headstart and was also left alone with a computer a lot. I would go to school, do my homework in school mostly and then just kind of play around on the computer and try to get up to no good in various ways.

You can read more about FlashBots here

ML: When you say you would go home from school and code, what were you doing back then? What language were you writing in and what kind of things were you creating?

PD: I made a lot of websites. I made some really simple, stupid games. I would make floppies and give them to my friends, that kind of stuff. I'm really into games. And then I kind of naturally got into piracy from there. I ran a bunch of piracy sites starting when I was, I dunno, fifth or sixth grade.

ML: That's early, first of all. Wow. What attracted to you about the piracy angle?

PD: It's hard to say. I mean, I love the punk culture and I empathize a lot with the narrative of the small guy group versus the big corporation, which I think I still do. At the time, a lot of people were getting sued for piracy, the industry was gearing up to respond in a really overbearing and negative way. And we're responding in this kind of way and it looked like it was only going to escalate to where they could try to even shut down parts of the internet. Net neutrality was not even a given yet. So I was gravitating towards that struggle on ethical grounds. I think that was a big part of it.

PD: And I think also I was a young kid that back then and I wanted to be taken seriously. You know, if you brought a game or something to school, people would be like,’ oh my God, that's so cool you can do that.’ But that would kind of be it. And I wanted to do something more meaningful. A lot of those communities were very anonymity based. So I was able to participate on a deep level and no one knew that I was 12, no one knew that I was a kid.

ML: That's really interesting. Amber Baldet has a similar story when she was a teenager and she found online forums where nobody knew she was a 17 year old girl, you know, and she was taken seriously for the first time. And it had a big effect on her. Then if my timeline is right this is years before anything like Napster, right? Or any of the Bit Torrent stuff. Am I right about that?

Read more: The Digital Banking Executive Securing Your Money With Blockchain

PD: This was the early Bit Torrent days. It must've been the early to mid 2000s I'd say. At first I ran a bunch of forums and people would just share HTTP stuff.

PD: I was using Napster and Limewire and all that stuff but there wasn't really a way to contribute to those communities other than uploading content, which I was too scared of doing from a legal perspective.

ML: Were you learning about cryptography at this point too? If you're doing piracy stuff?

PD: Not at all. I started learning about cryptography in middle school and closer to seventh or eighth grade when I started getting more into IRC chatrooms with a bunch of random hackers. I kind of fell in this community through this friend I had in real life who was super into these things. I got started on HackThisSite (HackThisSite.org) and got addicted to breaking challenges that people made.

PD: That’s what really taught me cryptography. I remember being on that site and being in the IRC chat rooms and that's where I was first exposed to hacking.

PD: I also met a lot of weird degens and you know felt a little shell shocked.

ML: Is that where the weird degens entered your life and they've never left?

PD: It was that and also the gaming community. At some point down this path I got super burned out of hacking and piracy. I started getting really afraid of the legal risk and I guess my brain was maturing a little bit. When I was really young I literally gave zero fucks and I was like, what are they going to come after this 12 year old kid and put me in jail? That's obviously not going to happen, right? But then as I was getting older I was thinking more about the risks. And at some point I got really overwhelmed. I remember there was this one day, I must've been 13 or 14. I was taking a shower and I just started crying, thinking about going to jail and my parents, you know, all that stuff.

PD: My parents also vaguely knew what I was doing but not the extent of it. They would be like ‘make sure you don’t go to jail, ha ha,.’ So I kind of had a break down and deleted all evidence of everything, destroyed all my computers, starting fresh and I'm like, ‘now I'm going to do something wholesome.’ And that's when I got into video games and running video game communities and servers. I met a lot of degens through the video game world too eventually.

ML: What were some of the early video game communities you were participating in?

PD: I was really into Quake III Arena. I was actually one of the first 10 people in the world to buy Minecraft. I was very into the super early days of Minecraft. I also started the Minecraft subreddit many, many years ago.

ML: Oh my God. Wait until I tell my kids about this, they're going to freak out.

Is there any greater feeling of limitlessness than starting a new Minecraft world?

PD: Basically the way it was. I had the swine flu. I was procrastinating about some finals. I was going back to school and they gave me a month because I had swine flu during finals.

PD: And I found this Java app that this Swedish guy had in this IRC channel. I was like, fuck it, I’ll draw up a server. I think I was one of the first probably 20 Minecraft servers ever.

PD: I was a Redditer and I knew people from Reddit and I posted it on there. We gathered a bunch of people and some guy was like, ‘do you want to start a subreddit?’ I was like, ‘yo, you should do it.’ And so we all started it together. I moderated that for three, four years. At some point there was a coup to kick me off that subReddit by some of the lower ranked moderation. If someone's inactive, you can get them removed, even if they're higher rank than you. So they waited until I didn't log in for a month and then were like, ‘this guy's inactive.’ So anyway, that was my story with Minecraft. I ran a really large Minecraft community for a long time.

ML: How do you know that you were one of the first 10 people in the world to download Minecraft?

PD: To buy it. There used to be I think account numbers or something like that back in the day. I bought it as soon as it came out, it was within an hour of the release and there weren’t even any features at the time. It was buy this beta and you get a custom skin. So almost no one bought it. But then I ended up upgrading it and upgrading it to kind of what Minecraft is today.

ML: One of the things my younger son does is he just blurts out randomly, ‘dad, I can't wait for the next underwater Minecraft update.’ And he just starts going off. It's such an amazing game and has had such an impact on the world, I think. It's crazy.

PD: I was also one of the early Minecraft modders, throwing up a lot of different mods.

“ Ideologically I was very against what was going on in finance”

ML: It's interesting, do you think there is a parallel there with the sort of absolute freedom in Minecraft to do whatever you want with Ethereum -- we're getting ahead of ourselves a little bit, but to what Ethereum allowed people to do?

PD: That was part of it. Just seeing how creative people were with the tools you gave them. And that's part of the stuff I really enjoyed, writing the tools to let people do crazy shit and expanding the range of what was possible. Also for me, I loved the game as soon as I prayed it, which was in a very early buggy state. It barely ran on my computer, it would heat up, the map was tiny, there were four blocks. But I really loved how collaborative it was because as soon as I threw the server up, there were 20 or 30 people who joined from Reddit. They were trying the game. They're like, oh, this is really cool. We started building roads together, we built a whole city and started chatting and just kind of became friends. And a lot of my previous gaming experiences were all competitive or about violence or some mix of both. And this was much more collaborative and constructive. So that also really drew me to it.

ML: So was it Bitcoin that got you into crypto or were you even further back with e-cash or anything that Adam Back was doing?

PD: No, it was Bitcoin. I think there was a confluence of two things, or three things really. One of them was OWS (Occupy Wall Street). So before I left for college I was part of the occupy movement and really unhappy with, specifically, the Wall Street bailouts, printing money to basically underwrite banks or give banks zero interest loans. Those are both things that kind of bothered me. I was very involved in that movement and did a bunch of tech stuff for them. Ideologically I was very against what was going on in finance, but also by the end of it very resigned that there was nothing I could do because in many ways that movement failed and it didn't become organized and they didn't achieve the goals that people wanted.

PD: So that was A, B was I had a stint of black hat hacking right before my senior year of high school. I was in Romania for the summer and I had a fresh laptop and I felt a little bit emboldened to steal some wifi and do some black hat hacking without being worried about getting caught. So I did a bunch of TOR-related hacking, specifically hidden services, trying to make it so that the government wouldn't be able to locate them.

PD: I was also trying to build some distributed systems. I was getting into how can we build more distributed versions of things the government can't take down, for example a newspaper they can't censor. So those three things kind of came together and I read the Bitcoin white paper in the summer of 2011. It kind of blew my mind. Immediately I decided that someday I wanted to work on this.

PD: Later on, I was digging around my tour of black hat hacking,

PD: I found a vulnerability in the way the Silk Road was set up. I emailed the admin and I was like,’ yo, you're going to go to jail. You fucked up, shut your thing down. The FBI probably already knows who you are.’

Read more: The Untold Story of Silk Road

ML: Did you hear back from the admin?

PD: Yeah, he offered me a job. He offered me $400,000 a year, I think, and all the drugs I could do to do their security. And I ended up interviewing for it because I was in Romania at the time and again, I was kind of doing things with impunity and I'm just kind of for the lulz. I never had any intention of helping the Silk Road. Because I mean, I do believe in individual freedom, but also at the time my risk calculus was not to work for the Silk Road. But I went through their interview process just to say I did it and see if I could. I got access to their admin forum and poked around a little bit and then destroyed my laptop. So yeah, that was early me in crypto.

ML: How long after you destroyed that laptop did Silk Road get taken down?

PD: It must've been a year.

ML: Are we up to about 2014 here or so?

PD: This must have been 2012. Up through 2014 it was pretty quiet for me. I tried to live on Bitcoin for a while. Tried to not use bank accounts as much as possible. Tried to just use anyone who would come up and accept Bitcoin, any merchant. I would just use it even if I didn't want their stuff, it would be a small batch coffee roaster, but I didn't care about that. I have all sorts of random knickknacks from those days.

ML: Do you have regrets? The Bitcoin pizza guy paid 10,000 Bitcoin for a couple of pizzas.

“The reason I first bought Bitcoin and held it was out of spite when Roger Ver first got obscenely rich with like a hundred million dollars”

PD: Oh man, I have so many Bitcoin wallets with thousands of Bitcoin transactions that I've spent on so many inane and insignificant things. But no, no regrets.

PD: Honestly I didn't hold any Bitcoin for the first year or two I was involved because I thought Bitcoin could just be forked, there was no way this will have value. People who are buying it are silly. What I would do is I would spend all my money in Bitcoin but at the end of the month I would take any money that I didn't think I needed immediately and donate it. I was like, these will be worthless next month.

PD: Yeah, I didn't think it would have value. And so the reason I first bought Bitcoin and held it was out of spite when Roger Ver first got obscenely rich with like a hundred million dollars, I don't remember exactly when that was but Bitcoin was like $100 at that point and Roger Vera was the new oligarch and I didn't really vibe with his libertarian ideology. I thought it was a too extreme.

PD: And so I was like, ‘I don't want this guy to get rich and impose his view on the world and this technology, I want to also have some say in this world.’ So I basically bought in out of spite to hedge against libertarians taking over the world.

ML: At the same time, did you feel while Bitcoin was a technological breakthrough, it did have its limits. And do you remember thinking this could be bigger? There could be more here?

PD: There was a lot of frustration early on, because I was part of the Bitcoin political campaigning of like, “add more script types, enable smart contracts, add big blocks,’ all these other features people wanted. So there was a lot of that feeling of being held back for sure. And you know, that's part of why I bought into the Ethereum vision.

ML: When did you run across Ethereum? Did you see Vitalik’s white paper?

PD: I ran across it when it was first circulating in the Bitcoin community and read the white paper. Honestly, full disclosure, and feel free to print this, I barely put any money into the Ethereum pre-sale. I wanted to but Bitcoin was doing well for me at the time and honestly, I love the division and I love the idea of the tech but I didn't think the Ethereum team could pull it off. I thought they were too disorganized. I thought Vitalik was just dropping out of college, he was at a similar age as me and I didn't think he had the experience or capabilities to pull off the grandiose vision. So as much as I love the vision, I didn't really think the project would deliver.

ML: That was one of the more interesting things I discovered in reporting my book was that it was almost in spite of the Ethereum co-founders that it got off the ground.

PD: It’s almost such a good idea that it has to. Even if it didn't work for their vision yet they were just attracted enough by that vision so that the rest of it just figured itself out.

ML: A lot of people at that time wanted a bit more, they knew that there was something more and I think Vitalik unlocked that for a lot of people.

ML: Now we're getting into 2016. I'm a little ahead of myself. The white paper was 2013. It goes, you didn't buy into the pre-sale in 2015.

PD: No, I did. I just bought with a very small amount of pocket change. I don't want people to think I'm a billionaire. I did show my support because I wanted to at least play with the tech and be part of the community.

ML: The Ethereum network goes live in 2015 and then obviously one of the first big projects was the Dao that started gaining steam and early 2016.

PD: I was excited about the DAO. I bought in.

Check back tomorrow for part 2 of my interview with Phil