In Episode 57 of Hidden Forces, Demetri Kofinas speaks with Joseph Lubin about the progress being made at Consensys and precisely how Joe believes that Ethereum will overcome the scalability challenges that have plagued its network since the earliest days of its founding.
For the last few years, many blockchain enthusiasts have been eagerly anticipating the release of what many have referred to as “the Netflix moment.” In other words, blockchain enthusiasts expect to see a killer application running atop Ethereum, or some other distributed ledger, that will be adopted by the mass consumer. One of the criticisms of this view is that comparisons between the mid-to-late 1990’s and the current era in blockchain technology are overblown. It took twenty years of Internet protocol development and tweaking before Tim Berners-Lee gave us the World Wide Web in 1989. It wasn’t until 1998 that Netflix released its online, DVD rental store. When asked about the comparison between 90’s Internet and today's blockchain technology, Joseph Lubin makes the point that there isn’t going to be one moment when the scalability problems are “solved.” According to Joe, the process of scaling a complex, permissionless database is "always ongoing." To his point, ConsenSys alone employs close to 40 engineers who are working just on the Ethereum base layer protocols, clients, and enterprise scaling solutions. The company is closely aligned with a variety of efforts currently being undertaken to scale the ethereum network, including sharding, proof-of-stake, Casper CBC, Casper FFG, and a number of layer two solutions including state channels and plasma. Demetri has already devoted an entire episode to exploring some of these layer one solutions in great detail with Vitalik Buterin and Vlad Zamfir. That said, Joseph Lubin offers an additionally interesting perspective on some of the layer two protocols, which he thinks can solve many of ethereum’s throughput limitations without requiring applications to reconcile directly on the main chain for every transaction. Demetri and Joe spend a good deal of time exploring the challenges of building layer two solutions in more depth, including the counterparty risk problem created from the use of state channels.
Additional topics include SEC regulations, artificial intelligence, and questions about specific applications in the areas of news, music, and team organization. Demetri asks Joseph Lubin about Ujo Music, Civil, OpenLaw, as well as something called TMNT or “Traditional Management Nullification Tools,” which enables a different organizational approach to team and systems management that more closely resembles an organism than a corporation.
Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
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In Episode 56 of Hidden Forces, Demetri Kofinas speaks with Hedera Hashgraph President Tom Trowbridge about the latest news from the company that made its splash on the Hidden Forces podcast less than one year ago.
In the Fall of 2008, equity markets were in free fall. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite were all on their way towards making lows not seen since the mid-1990’s. Stock valuations would collapse by more than fifty percent, prominent investment banks filed for bankruptcy while others fled into the rapacious arms of their competitors or under the safe umbrella of Congress and the Federal Reserve.
At the same time as Schumpeter’s ghost was rattling his chains on Wall Street, Satoshi’s white paper was making the rounds on a cryptography mailing list in some obscure corner of the Internet. “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party,” he wrote, directing the several hundred recipients to his paper, "Bitcoin: A Peer-to-Peer Electronic Cash System.” “Merchants must be wary of their customers,” he writes, “a certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.” This last bit was only partly true. It was Satoshi’s paper, after all, that made it untrue. Though few realized it at the time, the Bitcoin whitepaper marked the beginning of the Internet’s second act. In the ten years since its publication, we have seen an explosion of interest, development, and investment in protocols built from Satoshi’s underlying blockchain technology, designed to execute commands across a distributed, trustless network of computers. Ethereum led the way with its pioneering Virtual Machine, able to execute smart contracts across a permissionless network, and since, several competing ledgers have cropped up, each claiming some advancement over prior versions.
But what if, in their bid to create a faster horse, developers and investors alike have missed a crucial turning point in the evolution of the Internet. Satoshi’s white paper, brilliant as it was, never claimed to be the blueprint for a world computer. As the bitcoin network has grown, so too have the costs of its transactions, and this is because adding blocks takes time. Deciding what chain to build on requires the network to agree on which chain is the longest, and when chains are growing too fast, it’s hard to tell the difference. In the last several years we’ve seen an explosion of brainpower devoted towards creating workarounds to the scalability problem, but we’ve also seen a quiet, committed effort at building alternatives that aren’t saddled with blockchain’s limitations.
Perhaps the most interesting of these alternatives is hashgraph, built as a directed acyclic graph, it’s fundamental innovation is not in its architecture, but in its consensus. Even to those who see promise in hashgraph, the technology can often seem like magic. One might describe its consensus protocol as nothing more than a compression algorithm for the casting of votes. What would have once taken an impossible amount of time, can now be accomplished in a matter of seconds. A voting algorithm for a global network. It was Claude Shannon, the father of information theory, who stated it most clearly: “The fundamental problem of communication is that of reproducing at one point either exactly or approximately a message selected at another.”
In its first iteration, the Internet solved the problem of communication across a network without the need for a trusted third party, but making definitive statements about that communication has always required an intermediary. In order to harness the full power of the Internet, we need to do for data processing, computation, and storage what the existing suite of Internet protocols have already done for communication. A revolution for a new generation. The Internet’s second act.
Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod
In Episode 55 of Hidden Forces, Demetri Kofinas speaks with Ryan Selkis about how his company, Messari, is bringing a new level of data gathering and analysis to the crypto space by building what are known as token-curated registries.
Information has become, quite literally, the currency of the digital age. Yet, even before the advent of cryptocurrencies, investors have always understood information to be a valuable asset. “The most valuable commodity I know of is information,” said the iconic Wall Street villain Gordon Gekko. However, information is a commodity, only in so far as it derives its value from the computational efforts of those who seek to process it. In a world of informational abundance, the quality of our computations, not their quantity, determine the scale of our harvest.
Ryan Selkis believes that harvesting, processing, and storing data about the crypto economy can be done better. His team at Messari is building an open data library, as well as a set of curation tools that will help researchers, investors, and regulators make sense of the industry.
Ryan has stated outright that the “Bloomberg of crypto will be a network, not a centralized company.” This is where his work on token-curated registries factors in.
“Token-curated registries are decentrally-curated lists with intrinsic economic incentives for token holders to curate the list's contents judiciously,” wrote Mike Goldin, in a 2017 article titled “Token-Curated Registries 1.0.” You could say that if Wikipedia and Bitcoin had a baby, the child would be a TCR. Such databases could theoretically replace all commercially curated, owned, and operated, libraries on earth, by offering a new set of economic incentives that harness the networks and expertise of the planet’s seven-and-a-half billion people.
In this week’s episode of Hidden Forces, Ryan Selkis joins Demetri Kofinas for a conversation about information, cryptocurrency, and how Messari is working to build the database for a new financial system.
Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod