Topic: Report from the Shanghai Blockchain Summit (Read 924 times)
Encouraging for sure! Thanks for the mindful share
Moderator: What are the key issues affecting the adoption of digital assets?
Other Participants: (Unintelligible on my recording)
Stan: Those trolls at BCT Altcoin subforum!
Other Participants: (Unintelligible on my recording)
Stan: Those trolls at BCT Altcoin subforum!
I don't know, sometimes you can be your own worst enemy
Moderator: What are the key issues affecting the adoption of digital assets?
Other Participants: (Unintelligible on my recording)
Stan: Those trolls at BCT Altcoin subforum!
Other Participants: (Unintelligible on my recording)
Stan: Those trolls at BCT Altcoin subforum!
I appreciate the reporting. It shows what DACs can be and can do.
Thanks for sharing. It is good to have first hand information about the discussion in the summit. Very interesting.
Oh damn! This is awesome, I am kinda jealous
I want to go to Shangai xD
Awesome! Thanks for sharing Stan.
And of course, there's nothing like an introduction to real Chinese food!
Here's a couple of pictures from the Day 2, Morning meeting on scalability. This was to the technical community and involved a half-dozen leaders sharing their views from their own perspectives. I talked for twenty minutes about how Proof of Work limits scalability and the benefits of DPOS. Then co-moderator Vitalik gave twenty minutes of further explanation of my points (for the benefit of newbies) without contradicting anything I had said. Of course, all the experts were there to explain how their approaches could be scaled as well, so no consensus was ever reached. Still, I expect a lot of those newbies to at least read up on DPOS and Graphene. If they do, some will become supporters.
And that's really all I could expect from such a venue.
And that's really all I could expect from such a venue.
Here's the view from my "co-moderator" seat in the commodities private session.
Since we had a good mix of people who ran traditional and crypto exchanges, I asked them what they thought about exchanges using a blockchain to share a common public order book. It started with me saying a paragraph and my co-moderator translating it for several rounds, then all of a sudden the room broke out into two hours of animated Chinese discussion with lots of good natured back-and-forth. I have no idea what was said.
Here's the synopsis, done to the tune of Dueling Banjos:
Stan (in English): Ta da da da da da da da dum,
Moderator (in Chinese): Ta da da da da da da da dum,
Stan (in English): Ta da da da da da da da dum,
Moderator (in Chinese): Ta da da da da da da da dum,
Stan (in English): Ta da da da dum,
Moderator (in Chinese): Ta da da da dum,
Stan (in English): Ta da da da dum,
Moderator (in Chinese): Ta da da da dum,
Rest of the room (in Chinese) Vigorous Banjo Music - Ta da da da da da da da dum, Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,...
You get the idea.
Since we had a good mix of people who ran traditional and crypto exchanges, I asked them what they thought about exchanges using a blockchain to share a common public order book. It started with me saying a paragraph and my co-moderator translating it for several rounds, then all of a sudden the room broke out into two hours of animated Chinese discussion with lots of good natured back-and-forth. I have no idea what was said.
Here's the synopsis, done to the tune of Dueling Banjos:
Stan (in English): Ta da da da da da da da dum,
Moderator (in Chinese): Ta da da da da da da da dum,
Stan (in English): Ta da da da da da da da dum,
Moderator (in Chinese): Ta da da da da da da da dum,
Stan (in English): Ta da da da dum,
Moderator (in Chinese): Ta da da da dum,
Stan (in English): Ta da da da dum,
Moderator (in Chinese): Ta da da da dum,
Rest of the room (in Chinese) Vigorous Banjo Music - Ta da da da da da da da dum, Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,Ta da da da da da da da dum,...
You get the idea.
This is a transcript of my remarks during the second of two panel discussions at the Shanghai Blockchain Summit on October 15, 2015. It is taken from a pocket recorder which unfortunately only picked up my own powerful orator quality voice. So the other panelists have not been transcribed and my recollection of the actual moderator questions is only approximate.
Nikolai Mushegian (Maker), Craig Sellers (Tether), Dominic Willliams (Definity), James Gong (ZAFED), Stan Larimer (CNX)
Moderator: Digital assets have grown in sophistication. Here we have some of the thought leaders in this area. Would you each please introduce yourselves and tell us a little bit about your role in the area of digital assets?
(Other panel members introduce themselves and summarize their digital asset products, then…)
Stan: I’m Stan Larimer, President of Cryptonomex, we build platforms on which you can deploy a number of things. As I mentioned before, our first platform was BitShares, its an exchange, but in two weeks we’ll launch our second light speed platform for the music industry called MUSE. Got a third one coming up called Identabit which is one for the Banking industry. So we have a number of different products. The most important one we’ll talk about here is the exchange, because an exchange is essentially a smart coin factory, a different way way of creating certain kinds of smart coins, you’ve heard about a few examples of them here, and particularly the kind that results in a coin produced by a deal between two different individuals - you need an exchange for that.
Moderator: What are the key issues affecting the adoption of digital assets
Other Participants: (Unintelligible on my recording)
Stan: Another thing I think we have is an embarrassment of riches in terms of the number of varieties of smart currencies we could possibly have. This creates its own barrier because the general public right now does not appreciate the difference between how various coins come into existence: “Oh, this one was mined, this one was issued by fiat decree with some exchange saying “I’m going to back it”, this one was issued by some sort of contract for difference between people on an exchange.” The average consumer doesn’t appreciate the pros and cons of those different things.
And so we need to take into account that coins need to go through a four stage life cycle before they can get deployed. Stage One is the prototype stage. That’s where somebody picks up Ethereum and says “I’ve got a great idea” and they prototype it up and they put it out there and it starts trading and nobody really knows, “Gee, Nikolai developed that thing, is Nikolai any good?” So at some point there’s going to have to be a certain branding, and that’s where I think there’s a good opportunity! Dogecoin could have Dogecoin-branded smart assets, where the assets are backed by the value of Dogecoin. You see a lot of communities out there operating and trading on their own good name an their reputation in order to get acceptance.
As we go through the second stage, its generalization. We just did that on BitShares, where instead of making every one of our Smart Coins just a function of the underlying BitShares asset, now you can make its collateral be anything on the network. To that’s generalization. Then there’s standardization, so they all work the same way to the consumer. If you call it something and I use it on the Ethereum platform, and I use it on the BitShares platform, is it the same thing? And then finally, interoperability, which is the ultimate goal where I can make a smart contract that will trade Doge against Bitcoin against BitShares. And that would be called right now with out limited technology “atomic cross chain trading”. But if they are all residing on the same platform you get that atomic trading between different assets. And that’s one of the key things that will make smart contracts take off when they can interoperate on more than just one thing.
Moderator: What about the trend toward centralization and alternative trust models?
Other Participants: (Unintelligible on my recording)
Stan: It’s not that I disagree with anything you [all] said, its just that, another factor, there’s almost a religious passionate disagreement about how much decentralization is necessary. Whether you want to have it spread out into the wild world where you don’t know who’s basically doing the notary function of signing the cryptographic blocks in the chain. We’ve gone in the other direction with something I call “distilled trust”. Where the people who are signing the blocks are the people who can get the most support from the owners of the currency. So there’s a built-in election function that says, “we only need a certain number of people to sign the blocks, enough to have redundancy and fault tolerance”, but if we can control who is doing that by having everybody that owns a coin have a say, then you have massive decentralization at the authority to sign level, but the actual signature function is just done by a fault tolerant computer designed by consensus. And its being run by people who are the most trusted people by everybody else.
So that’s a distilled trust model, that keeps you from having to take decentralization to extremes. And of course, if you are going to do a private block chain, you’re going to control that whole process yourself and you are going to appoint trusted nodes. Ideally you would like to have them in different legal jurisdictions around the country, around the world, so that if any one bad actor, we’ve got 200 countries around the planet, if any one of them started to coerce people inside their jurisdiction to violate the rules of the network, that particular node could be voted out and replace by somebody in a jurisdiction that the users trust. So there’s lots of models we could use.
Moderator: What about how this is viewed by banks and exchanges - how should they look at this?
Stan: We are having a very busy fall. In addition to the two light speed block chains, one for music and one for exchanges, we have a deliverable to a major North American Bank of a proof of concept demonstration that we are doing for them that will happen the first week in November. So we have an interesting chance to learn what banks are looking for.
The first instinct of every big organization is to control everything and that’s the way our statement of work reads. This is proprietary as can be, this is a competitive edge, and so on. And we’re certainly in business to serve our customers, and so we’re building it the way they want it to look, but we’re also advising them that this open idea is very important to get that kind of network effect and that kind of trust — the kind of trust that gets harmed any time you see a big institution playing with their own depositor’s money and using it in inappropriate ways.
You can think of the scandals that have happened in the world.the bail-in’s that have been happening in Cyprus and built into other laws, there’s a lot of things that undermine the trust in the big institutions.for people who are paying attention to that. But on the other hand, those big institutions are the ones that the general public does trust, much more than some little crypto currency.
So, if we can work on it to take the best of both where we can give some rebuilt trust to the banking system and put some guarantees in there against some of the abuses that have happened in the past, then it’s kind of like going at it from two different directions, whereas regulators want to make one kind of things trustworthy, we’d like to add from our side some kinds of abuse protection. And if we can do that we can restore confidence to the whole global financial system.
Moderator: What should be the impact of this technology on the industry as a whole?
Stan: Let me give you a little use case of something that shows you how profoundly things can be disrupted, keeping incumbents on their toes and creating opportunities for new startups, and so on. We have something called the OpenLedger network built on top of BitShares. It’s a network of exchanges. There’s probably going to be a new exchange joining that every month for the foreseeable future.
Now why would they do that? What they are essentially doing is taking their market order books and putting them on the BitShares ledger for everyone to see. Therefore you have proof of solvency and you have shared market depth. As each of the exchanges join, they are bringing their own customers, but they are able to offer those customers access to the order books of all the exchanges.
What does this do? Well, those eight little exchanges start looking attractive to people to use that network as if it was a medium sized exchange. So now another exchange can come along that’s a medium sized exchange that says “Wow, if I get on the network I can double the market depth I can have for me, because I get all those other eight and for them, because they get mine. And so now that exchange is an even bigger exchange, so another exchange rolls up onto it. And in this way, I predict that the biggest exchange out there, that says “I’m big because I’m big”, Right? That’s why people use me is because I’ve got a deep market, but now I can double my size by joining the network that’s grown to be as big as me.
And when that happens we have all those exchanges able to share their different products and services. When they start making various smart coins of different types, they are all interoperable. So this is one way of using a block chain as a way to network other real world things, I did the exchange example but your can imagine other things for banking, and there’s even people talking about doing it for various types on on-line gaming, where they all share together their network effect, and so on.
So, integrating various organizations and giving an opportunities for little guys to get started and immediately have access to the products and services of the big guys, and now they can start off bringing their own innovative things and we all benefit because we get the best of everything.
Moderator: What should be the regulator’s’ role - how should they look at this?
Stan: Well I would say there’s a couple of ways to look at it. I would represent it as the code that is existing on the blockchain is something that the regulators can get involved in approving and now it’s their representative, it’s there all the time, The regulators know it’s going to work in an approved way all the time. And so, I’m not sure whether that means they might be at risk of losing some regulator jobs or whether it just lets them do their jobs better. But I think that that is a strong way to present it to them. “Guys, you need to set up the rules and we’ll enforce them in code.”
(Comments by other participants.)
Stan: Another thing that excites me is an opportunity for a new kind of freedom. The kind of freedom where you can choose your jurisdiction. Where you can have different block chains that have different rules. This is something that is very common and accepted by governments. My particular government is very intent of regulating everything but they still recognize that there is a difference between a qualified investor and the average public. If you can certify that you have resources so that you don’t need protection, then you’re allied to buy and sell certain kinds of stocks that are not available to the public because the public doesn’t have the same level of skill and ability to protect themselves. That’s exciting. If we can point to those examples… another example is that some governments allow gambling in certain cities and in most places it’s not allowed. They assume that if you can get to these cities then you’re responsible for what happens to you there. And if you’re not, then the government wants to protect you.
So we can start crafting different block chains that have their own different sets of rules. You go into these places, if we can get that accepted, you can go into the Wild West if that’s where you want to operate while the ordinary consumer has places they can go where they have extra protection. I think that is a whole new ball game that hasn’t been adequately explored.
But I’ll just say that two of our platforms, one is called BitShares, I’ve talked about it a lot, I haven’t mentioned Identabit which is a separate chain exactly for that reason. Identabit has taken the idea that we are going to have to have identity for every single account, positive identity, Its gonna be a regulator’s dream. Its going in the direction of how can I maximize producing something that will be completely, wonderfully trackable but also totally private so that your competitor and your ex spouse can’t see your private affairs.
It goes in one direction with one set of rules, and the other side, BitShares is more wide open. It still gives you the tools to say for this asset I have a whitelist, I have a blacklist, I can control who can trade and how it can trade but each asset can have a different thing, from total anonymity to total identity. There’s two very different philosophies, and I think you’ll see over time a nice little spectrum of different jurisdictions on the blockchain, that you can choose to adopt.
Moderator: State the one thing that you would like to accomplish above all else.
Stan: I would just like to get across just the idea that every single asset shouldn’t live on its own island. There’s a reason why cities are as big as Shanghai, because when you put a lot of businesses into a common infrastructure with a common set of laws, the economy blooms. The number of economic interactions that can happen, the economic friction is so much lower inside an economic environment that has been put together. If you insist that each coin is going to sit on its own blockchain, every asset has to have its own blockchain, then you have lots of overhead, like traveling between islands to do business.
I don’t advocate only one city. I like the idea of different cities with different rules, to do business in the one that suits where you want to be, but move your independent coins onto the best platform where you can do lots of economic interactions with them. That’s where we’re going to get the next generation of growth that we are stifled with now - to have to leave crypto and go to fiat every time you want to change islands.
Panel 2 - Digital Assets on the Blockchain
Nikolai Mushegian (Maker), Craig Sellers (Tether), Dominic Willliams (Definity), James Gong (ZAFED), Stan Larimer (CNX)
Moderator: Digital assets have grown in sophistication. Here we have some of the thought leaders in this area. Would you each please introduce yourselves and tell us a little bit about your role in the area of digital assets?
(Other panel members introduce themselves and summarize their digital asset products, then…)
Stan: I’m Stan Larimer, President of Cryptonomex, we build platforms on which you can deploy a number of things. As I mentioned before, our first platform was BitShares, its an exchange, but in two weeks we’ll launch our second light speed platform for the music industry called MUSE. Got a third one coming up called Identabit which is one for the Banking industry. So we have a number of different products. The most important one we’ll talk about here is the exchange, because an exchange is essentially a smart coin factory, a different way way of creating certain kinds of smart coins, you’ve heard about a few examples of them here, and particularly the kind that results in a coin produced by a deal between two different individuals - you need an exchange for that.
Moderator: What are the key issues affecting the adoption of digital assets
Other Participants: (Unintelligible on my recording)
Stan: Another thing I think we have is an embarrassment of riches in terms of the number of varieties of smart currencies we could possibly have. This creates its own barrier because the general public right now does not appreciate the difference between how various coins come into existence: “Oh, this one was mined, this one was issued by fiat decree with some exchange saying “I’m going to back it”, this one was issued by some sort of contract for difference between people on an exchange.” The average consumer doesn’t appreciate the pros and cons of those different things.
And so we need to take into account that coins need to go through a four stage life cycle before they can get deployed. Stage One is the prototype stage. That’s where somebody picks up Ethereum and says “I’ve got a great idea” and they prototype it up and they put it out there and it starts trading and nobody really knows, “Gee, Nikolai developed that thing, is Nikolai any good?” So at some point there’s going to have to be a certain branding, and that’s where I think there’s a good opportunity! Dogecoin could have Dogecoin-branded smart assets, where the assets are backed by the value of Dogecoin. You see a lot of communities out there operating and trading on their own good name an their reputation in order to get acceptance.
As we go through the second stage, its generalization. We just did that on BitShares, where instead of making every one of our Smart Coins just a function of the underlying BitShares asset, now you can make its collateral be anything on the network. To that’s generalization. Then there’s standardization, so they all work the same way to the consumer. If you call it something and I use it on the Ethereum platform, and I use it on the BitShares platform, is it the same thing? And then finally, interoperability, which is the ultimate goal where I can make a smart contract that will trade Doge against Bitcoin against BitShares. And that would be called right now with out limited technology “atomic cross chain trading”. But if they are all residing on the same platform you get that atomic trading between different assets. And that’s one of the key things that will make smart contracts take off when they can interoperate on more than just one thing.
Moderator: What about the trend toward centralization and alternative trust models?
Other Participants: (Unintelligible on my recording)
Stan: It’s not that I disagree with anything you [all] said, its just that, another factor, there’s almost a religious passionate disagreement about how much decentralization is necessary. Whether you want to have it spread out into the wild world where you don’t know who’s basically doing the notary function of signing the cryptographic blocks in the chain. We’ve gone in the other direction with something I call “distilled trust”. Where the people who are signing the blocks are the people who can get the most support from the owners of the currency. So there’s a built-in election function that says, “we only need a certain number of people to sign the blocks, enough to have redundancy and fault tolerance”, but if we can control who is doing that by having everybody that owns a coin have a say, then you have massive decentralization at the authority to sign level, but the actual signature function is just done by a fault tolerant computer designed by consensus. And its being run by people who are the most trusted people by everybody else.
So that’s a distilled trust model, that keeps you from having to take decentralization to extremes. And of course, if you are going to do a private block chain, you’re going to control that whole process yourself and you are going to appoint trusted nodes. Ideally you would like to have them in different legal jurisdictions around the country, around the world, so that if any one bad actor, we’ve got 200 countries around the planet, if any one of them started to coerce people inside their jurisdiction to violate the rules of the network, that particular node could be voted out and replace by somebody in a jurisdiction that the users trust. So there’s lots of models we could use.
Moderator: What about how this is viewed by banks and exchanges - how should they look at this?
Stan: We are having a very busy fall. In addition to the two light speed block chains, one for music and one for exchanges, we have a deliverable to a major North American Bank of a proof of concept demonstration that we are doing for them that will happen the first week in November. So we have an interesting chance to learn what banks are looking for.
The first instinct of every big organization is to control everything and that’s the way our statement of work reads. This is proprietary as can be, this is a competitive edge, and so on. And we’re certainly in business to serve our customers, and so we’re building it the way they want it to look, but we’re also advising them that this open idea is very important to get that kind of network effect and that kind of trust — the kind of trust that gets harmed any time you see a big institution playing with their own depositor’s money and using it in inappropriate ways.
You can think of the scandals that have happened in the world.the bail-in’s that have been happening in Cyprus and built into other laws, there’s a lot of things that undermine the trust in the big institutions.for people who are paying attention to that. But on the other hand, those big institutions are the ones that the general public does trust, much more than some little crypto currency.
So, if we can work on it to take the best of both where we can give some rebuilt trust to the banking system and put some guarantees in there against some of the abuses that have happened in the past, then it’s kind of like going at it from two different directions, whereas regulators want to make one kind of things trustworthy, we’d like to add from our side some kinds of abuse protection. And if we can do that we can restore confidence to the whole global financial system.
Moderator: What should be the impact of this technology on the industry as a whole?
Stan: Let me give you a little use case of something that shows you how profoundly things can be disrupted, keeping incumbents on their toes and creating opportunities for new startups, and so on. We have something called the OpenLedger network built on top of BitShares. It’s a network of exchanges. There’s probably going to be a new exchange joining that every month for the foreseeable future.
Now why would they do that? What they are essentially doing is taking their market order books and putting them on the BitShares ledger for everyone to see. Therefore you have proof of solvency and you have shared market depth. As each of the exchanges join, they are bringing their own customers, but they are able to offer those customers access to the order books of all the exchanges.
What does this do? Well, those eight little exchanges start looking attractive to people to use that network as if it was a medium sized exchange. So now another exchange can come along that’s a medium sized exchange that says “Wow, if I get on the network I can double the market depth I can have for me, because I get all those other eight and for them, because they get mine. And so now that exchange is an even bigger exchange, so another exchange rolls up onto it. And in this way, I predict that the biggest exchange out there, that says “I’m big because I’m big”, Right? That’s why people use me is because I’ve got a deep market, but now I can double my size by joining the network that’s grown to be as big as me.
And when that happens we have all those exchanges able to share their different products and services. When they start making various smart coins of different types, they are all interoperable. So this is one way of using a block chain as a way to network other real world things, I did the exchange example but your can imagine other things for banking, and there’s even people talking about doing it for various types on on-line gaming, where they all share together their network effect, and so on.
So, integrating various organizations and giving an opportunities for little guys to get started and immediately have access to the products and services of the big guys, and now they can start off bringing their own innovative things and we all benefit because we get the best of everything.
Moderator: What should be the regulator’s’ role - how should they look at this?
Stan: Well I would say there’s a couple of ways to look at it. I would represent it as the code that is existing on the blockchain is something that the regulators can get involved in approving and now it’s their representative, it’s there all the time, The regulators know it’s going to work in an approved way all the time. And so, I’m not sure whether that means they might be at risk of losing some regulator jobs or whether it just lets them do their jobs better. But I think that that is a strong way to present it to them. “Guys, you need to set up the rules and we’ll enforce them in code.”
(Comments by other participants.)
Stan: Another thing that excites me is an opportunity for a new kind of freedom. The kind of freedom where you can choose your jurisdiction. Where you can have different block chains that have different rules. This is something that is very common and accepted by governments. My particular government is very intent of regulating everything but they still recognize that there is a difference between a qualified investor and the average public. If you can certify that you have resources so that you don’t need protection, then you’re allied to buy and sell certain kinds of stocks that are not available to the public because the public doesn’t have the same level of skill and ability to protect themselves. That’s exciting. If we can point to those examples… another example is that some governments allow gambling in certain cities and in most places it’s not allowed. They assume that if you can get to these cities then you’re responsible for what happens to you there. And if you’re not, then the government wants to protect you.
So we can start crafting different block chains that have their own different sets of rules. You go into these places, if we can get that accepted, you can go into the Wild West if that’s where you want to operate while the ordinary consumer has places they can go where they have extra protection. I think that is a whole new ball game that hasn’t been adequately explored.
But I’ll just say that two of our platforms, one is called BitShares, I’ve talked about it a lot, I haven’t mentioned Identabit which is a separate chain exactly for that reason. Identabit has taken the idea that we are going to have to have identity for every single account, positive identity, Its gonna be a regulator’s dream. Its going in the direction of how can I maximize producing something that will be completely, wonderfully trackable but also totally private so that your competitor and your ex spouse can’t see your private affairs.
It goes in one direction with one set of rules, and the other side, BitShares is more wide open. It still gives you the tools to say for this asset I have a whitelist, I have a blacklist, I can control who can trade and how it can trade but each asset can have a different thing, from total anonymity to total identity. There’s two very different philosophies, and I think you’ll see over time a nice little spectrum of different jurisdictions on the blockchain, that you can choose to adopt.
Moderator: State the one thing that you would like to accomplish above all else.
Stan: I would just like to get across just the idea that every single asset shouldn’t live on its own island. There’s a reason why cities are as big as Shanghai, because when you put a lot of businesses into a common infrastructure with a common set of laws, the economy blooms. The number of economic interactions that can happen, the economic friction is so much lower inside an economic environment that has been put together. If you insist that each coin is going to sit on its own blockchain, every asset has to have its own blockchain, then you have lots of overhead, like traveling between islands to do business.
I don’t advocate only one city. I like the idea of different cities with different rules, to do business in the one that suits where you want to be, but move your independent coins onto the best platform where you can do lots of economic interactions with them. That’s where we’re going to get the next generation of growth that we are stifled with now - to have to leave crypto and go to fiat every time you want to change islands.
This is a transcript of my remarks during the first of two panel discussions at the Shanghai Blockchain Summit on October 15, 2015. It is taken from a pocket recorder which unfortunately only picked up my own powerful orator quality voice. So the other panelists have not been transcribed and my recollection of the actual moderator questions is only approximate.
We were told what the questions would be during shortly before we went on stage, so my answers were mostly just making stuff up on the fly. It's what I do.
Tom Ding, Stan Larimer, Dominic Williams, Jack Lu, Vlad Zamfir, Hongfei Da
Moderator: Please introduce yourselves.
Stan: My name is Stan Larimer, I’m substituting here for Dan Larimer the founder of BitShares who couldn’t be here because he was changing platforms and upgrading BitShares to our new Graphene operating system, so I’m going to pinch hit for him today.
Moderator: Tell us a bit about what you have been doing.
Other Participants: (Unintelligible on my recording)
Stan: When a year ago we launched BitShares it was a new application that ran on top of a separate blockchain. But just like Bitcoin is a currency application running on its own platform, we created a platform that would be an exchange on its own platform. We have since formed a company called Cryptonomex to generalize that one step further into being a platform on which you can host multiple ledgers. The idea is that, just like early computer programs didn’t have an operating system, they just took over the whole computer but the trend was to move toward a separate operating system and today we have Windows, MacOS, Linux and a number of others that people build their applications on top of and reap benefits from sharing common resources and not having to reinvent all that. What we are doing now is providing one such operating system, I won’t say whether we’re “MacOS” or “Windows” but I consider Ethereum to be another example in that genre and that going forward I expect a lot of different [existing] applications to migrate to one of these platforms over time. And platforms will be seeking and competing to provide better and better common services so that you don’t get 600 different coins all running on their separate operating systems, instead they can interact better.. and that’s what we’re aiming to produce.
Moderator follow-up: Ok, so BitShares is basically a crypto exchange?
Stan: Yes! The application that we did was to take an exchange and put it onto what amounts to a coin, and so people started thinking that “well, this is another coin that does more.” We view it as a different use of a blockchain, that’s what it has in common with coins, but in this case it produces an exchange where you don’t have any counterparty risk.
Moderator: There seem to be several different kinds of block chains, what trends to you see in these choices?
Other Participants: (Unintelligible on my recording)
Stan: The big trend that I foresee and am trying to bring about is the idea that it is ok to separate your brand and your community from the platform on which you are operating. Just to pick one at random, one of the top ten, Dogecoin. It’s not popular because of its technology and the platform its running on, its popular because of its community and its whole ethos and how it works - it’s a brand. An what we are going to see in the future is the thing that’s making these individual currencies popular is that they are a brand and as a brand are responsible for staying cutting edge. And that means you are going to see more “platform surfing”, where people will move from wherever they are, the platform they were born on, and say, “Hey, I can leap in performance to more flexibility and have smart contracts and stuff if I move to Ethereum, or I can leap to a place where I’m a lot faster in operation if I run on the platform we’re producing — Graphene from Cryptonomex. So I think that in the future well see that. While I was flying over the north pole [to get here] BitShares was upgrading to Graphene becoming the first one to move onto that platform. A number of other [applications] have announced their intention to join us and hopefully that will start a trend where [applications] are co-resident on a single ledger where smart contracts can have trading products back and forth between all the different brands that are out there and we get a lot less friction economically from being able to all [interact] on a common public ledger.
Moderator: Tell us what trends you see.
Other Participants: (Unintelligible on my recording)
Stan: Well, I guess I’ve already jumped the gun and said that I thought the trend would be moving toward general purpose operating systems that multiple applications can run on. Since I’ve got an Ethereum guy up here [Nikolai Mushegian] I’ll use Ethereum as a compare and contrast. Ethereum is an operating system, as we’ve already heard, designed to be flexible and allow a wonderful environment for developers to be able to [try] things very quickly. So it is emphasizing the idea of speeding up the development cycle. Graphene, our product that BitShares just jumped onto, is aiming for a different goal — a different axis — optimizing along a different axis. This axis is for speed. Industrial grade speed. Blockchains that are only limited by the speed of light and the size of the planet. Scalable up to the point where, instead of a 10 minute block time, we are talking about a one second block time. A blockchain that can produce a new block every time a card is dealt, every time a tumbler on a slot machine is [stopped], one that has enough throughput to host every transaction for all 600-plus currencies on coinmarketcap right now. So we’re going for scale, for one environment where they could all interact without ever exiting to fiat or incur the counterparty risk of trading [on a traditional exchange].
If I were a developer and had to pick between those two, do you know what I would do? I’d pick both! Both is a good answer! Microsoft Office runs on Windows, but it also runs on MacOS X. Why did they do that? Well, a developer who picked one to develop on doesn’t want to leave that other operating system to have a competitor show up on it. So any developer, once they get something working — probably on Ethereum first because its a nice way to prototype — is going to say, well, regardless of whether Ethereum has 60% or 40% of the market share, I want to get my application on the other platform as well. And so I think you’re going to see over a period of time exactly the same thing that happened in the operating system world happen with the blockchain ledger world. And so that’s my megatrend for the day.
Moderator follow up: So we’ve got Android and IOS?
Stan: Yeah, same exact thing. And in fact that’s really good because [Apple] likes to sort of vet and control who gets on it. For financial networks, we kind of like that. Ethereum wants it to be wide open more like Android. So I think there’s a place for both and people will naturally look at that and we’ll have competition to see who can make the best platforms and that benefits everybody — it’s like a rising tide lifting all boats — so that everybody that has a new application doesn’t have to worry about the low level operating system of the block chain. They can focus on their new application.
Moderator: Tell us the issues you see about scalability.
Participant 1: (Stan's summary) The crucial design distinction is between “scale up” (faster computers, bigger block sizes) but also “scale out” (exploit massive parallelism).
Participant 2: (Stan's summary) There’s also “scale off”, which is looking at whether a function should be on chain or off chain.
Stan: This is great! I totally agree. I’m not contradicting anybody. We can scale up, we can scale out, we can scale off or at some point we can quit scaling and change platforms.
I’m reminded of the story of Og, the Cave Man. He discovered that you could ride a horse and because of that his brontosaurus pizza’s could be delivered to the nearby villages by horse. And so he scaled up by getting faster horses and he scaled out by getting more horses and he scaled off by loading some of the pizza into a wagon pulled by bigger horses and he built his business up and up until his descendants, when they finally got a truck didn’t scale any more — they jumped platforms. And now that increased his reach for his pizzas by an order of magnitude because it was a new kind of platform better suited for reaching out. And then he started the scaling process all over again - faster trucks, more trucks, bigger trucks until the airplane came along and the same process repeated — and someday his pizza company is going to be delivering pizzas interplanetary on a new platform - a starship. The difference in scale [interruption from the audience something about cost of a starship, ignored temporarily as I was about to make my key point] the difference in speed between a horse and a starship is eight orders of magnitude. The difference in cost effectiveness between Satoshi’s original blockchain and the one we just upgraded to is also eight orders of magnitude scalability.
That right there dramatizes it, I’d be happy to explain the technical details if I had Dan here, but if I could just get you to envision the difference between the speed of a horse and the speed of light, that’s how much cost effectiveness can change by switching and upgrading platforms.
Moderator followup: Question about how that was calculated.
Stan: Well, as you’ve mentioned, Bitcoin’s numbers right now are about 7 with a block time of 10 minutes. We’ve demonstrated, when we don’t have to deal with the size of the planet or the speed of light, in the laboratory, the ability to scale to 1 second and 100,000 transactions per second. Now, what are we doing for BitShares in the upgrade, well, we didn’t bite that all off at once. So if Bitcoin can run at seven, well we just jumped to 100 to get started and so we have three second transaction times that we can dial down to one and by just applying the parallelism that you talked about, the cloud technology…
Moderator: Today BitShares can do 100 transactions per second, right?
Stan: That’s what we set it for to start, yes.
Moderator: (Mentions that some others have demonstrated 5000, etc.)
Stan: Well yes, and I’ll just finish up very quickly, the only reason we’re not running at that speed is because you’ve gotta have faster hardware and you’ve got to pay for that hardware and until the load on the network grows to where its worth paying for that, right now we can get by cheap on little simple processors and do a hundred, and when the time comes we can upgrade.
Other participants/audience: (It’s probably simpler to just scale out into the cloud...)
Stan: The limits to scaling out into a cloud are of course based on the assumption of parallelizability, and in the case of a lot of types of transactions, specifically the types of exchanges you find in BitShares you can’t make a transaction in parallel without knowing the other things [in other threads]. That led us into “lets get the piece of the processing that’s not parallelizable optimized to run as fast as possible and then fan out what feeds it with all the rest of the processing". But there’s always that bottleneck of ordering transactions that are interdependent, and the cost of figuring out what’s not dependent is a huge challenge. And so, that’s why we chose the opposite approach.
Both are valid.
Please release your products on both platforms!
Note: I realize I should have said "200" TPS is our current number, but somehow I dropped a bit somewhere.
We were told what the questions would be during shortly before we went on stage, so my answers were mostly just making stuff up on the fly. It's what I do.
Panel 1 - The Trend of Blockchain Technology and Scalability
Tom Ding, Stan Larimer, Dominic Williams, Jack Lu, Vlad Zamfir, Hongfei Da
Moderator: Please introduce yourselves.
Stan: My name is Stan Larimer, I’m substituting here for Dan Larimer the founder of BitShares who couldn’t be here because he was changing platforms and upgrading BitShares to our new Graphene operating system, so I’m going to pinch hit for him today.
Moderator: Tell us a bit about what you have been doing.
Other Participants: (Unintelligible on my recording)
Stan: When a year ago we launched BitShares it was a new application that ran on top of a separate blockchain. But just like Bitcoin is a currency application running on its own platform, we created a platform that would be an exchange on its own platform. We have since formed a company called Cryptonomex to generalize that one step further into being a platform on which you can host multiple ledgers. The idea is that, just like early computer programs didn’t have an operating system, they just took over the whole computer but the trend was to move toward a separate operating system and today we have Windows, MacOS, Linux and a number of others that people build their applications on top of and reap benefits from sharing common resources and not having to reinvent all that. What we are doing now is providing one such operating system, I won’t say whether we’re “MacOS” or “Windows” but I consider Ethereum to be another example in that genre and that going forward I expect a lot of different [existing] applications to migrate to one of these platforms over time. And platforms will be seeking and competing to provide better and better common services so that you don’t get 600 different coins all running on their separate operating systems, instead they can interact better.. and that’s what we’re aiming to produce.
Moderator follow-up: Ok, so BitShares is basically a crypto exchange?
Stan: Yes! The application that we did was to take an exchange and put it onto what amounts to a coin, and so people started thinking that “well, this is another coin that does more.” We view it as a different use of a blockchain, that’s what it has in common with coins, but in this case it produces an exchange where you don’t have any counterparty risk.
Moderator: There seem to be several different kinds of block chains, what trends to you see in these choices?
Other Participants: (Unintelligible on my recording)
Stan: The big trend that I foresee and am trying to bring about is the idea that it is ok to separate your brand and your community from the platform on which you are operating. Just to pick one at random, one of the top ten, Dogecoin. It’s not popular because of its technology and the platform its running on, its popular because of its community and its whole ethos and how it works - it’s a brand. An what we are going to see in the future is the thing that’s making these individual currencies popular is that they are a brand and as a brand are responsible for staying cutting edge. And that means you are going to see more “platform surfing”, where people will move from wherever they are, the platform they were born on, and say, “Hey, I can leap in performance to more flexibility and have smart contracts and stuff if I move to Ethereum, or I can leap to a place where I’m a lot faster in operation if I run on the platform we’re producing — Graphene from Cryptonomex. So I think that in the future well see that. While I was flying over the north pole [to get here] BitShares was upgrading to Graphene becoming the first one to move onto that platform. A number of other [applications] have announced their intention to join us and hopefully that will start a trend where [applications] are co-resident on a single ledger where smart contracts can have trading products back and forth between all the different brands that are out there and we get a lot less friction economically from being able to all [interact] on a common public ledger.
Moderator: Tell us what trends you see.
Other Participants: (Unintelligible on my recording)
Stan: Well, I guess I’ve already jumped the gun and said that I thought the trend would be moving toward general purpose operating systems that multiple applications can run on. Since I’ve got an Ethereum guy up here [Nikolai Mushegian] I’ll use Ethereum as a compare and contrast. Ethereum is an operating system, as we’ve already heard, designed to be flexible and allow a wonderful environment for developers to be able to [try] things very quickly. So it is emphasizing the idea of speeding up the development cycle. Graphene, our product that BitShares just jumped onto, is aiming for a different goal — a different axis — optimizing along a different axis. This axis is for speed. Industrial grade speed. Blockchains that are only limited by the speed of light and the size of the planet. Scalable up to the point where, instead of a 10 minute block time, we are talking about a one second block time. A blockchain that can produce a new block every time a card is dealt, every time a tumbler on a slot machine is [stopped], one that has enough throughput to host every transaction for all 600-plus currencies on coinmarketcap right now. So we’re going for scale, for one environment where they could all interact without ever exiting to fiat or incur the counterparty risk of trading [on a traditional exchange].
If I were a developer and had to pick between those two, do you know what I would do? I’d pick both! Both is a good answer! Microsoft Office runs on Windows, but it also runs on MacOS X. Why did they do that? Well, a developer who picked one to develop on doesn’t want to leave that other operating system to have a competitor show up on it. So any developer, once they get something working — probably on Ethereum first because its a nice way to prototype — is going to say, well, regardless of whether Ethereum has 60% or 40% of the market share, I want to get my application on the other platform as well. And so I think you’re going to see over a period of time exactly the same thing that happened in the operating system world happen with the blockchain ledger world. And so that’s my megatrend for the day.
Moderator follow up: So we’ve got Android and IOS?
Stan: Yeah, same exact thing. And in fact that’s really good because [Apple] likes to sort of vet and control who gets on it. For financial networks, we kind of like that. Ethereum wants it to be wide open more like Android. So I think there’s a place for both and people will naturally look at that and we’ll have competition to see who can make the best platforms and that benefits everybody — it’s like a rising tide lifting all boats — so that everybody that has a new application doesn’t have to worry about the low level operating system of the block chain. They can focus on their new application.
Moderator: Tell us the issues you see about scalability.
Participant 1: (Stan's summary) The crucial design distinction is between “scale up” (faster computers, bigger block sizes) but also “scale out” (exploit massive parallelism).
Participant 2: (Stan's summary) There’s also “scale off”, which is looking at whether a function should be on chain or off chain.
Stan: This is great! I totally agree. I’m not contradicting anybody. We can scale up, we can scale out, we can scale off or at some point we can quit scaling and change platforms.
I’m reminded of the story of Og, the Cave Man. He discovered that you could ride a horse and because of that his brontosaurus pizza’s could be delivered to the nearby villages by horse. And so he scaled up by getting faster horses and he scaled out by getting more horses and he scaled off by loading some of the pizza into a wagon pulled by bigger horses and he built his business up and up until his descendants, when they finally got a truck didn’t scale any more — they jumped platforms. And now that increased his reach for his pizzas by an order of magnitude because it was a new kind of platform better suited for reaching out. And then he started the scaling process all over again - faster trucks, more trucks, bigger trucks until the airplane came along and the same process repeated — and someday his pizza company is going to be delivering pizzas interplanetary on a new platform - a starship. The difference in scale [interruption from the audience something about cost of a starship, ignored temporarily as I was about to make my key point] the difference in speed between a horse and a starship is eight orders of magnitude. The difference in cost effectiveness between Satoshi’s original blockchain and the one we just upgraded to is also eight orders of magnitude scalability.
That right there dramatizes it, I’d be happy to explain the technical details if I had Dan here, but if I could just get you to envision the difference between the speed of a horse and the speed of light, that’s how much cost effectiveness can change by switching and upgrading platforms.
Moderator followup: Question about how that was calculated.
Stan: Well, as you’ve mentioned, Bitcoin’s numbers right now are about 7 with a block time of 10 minutes. We’ve demonstrated, when we don’t have to deal with the size of the planet or the speed of light, in the laboratory, the ability to scale to 1 second and 100,000 transactions per second. Now, what are we doing for BitShares in the upgrade, well, we didn’t bite that all off at once. So if Bitcoin can run at seven, well we just jumped to 100 to get started and so we have three second transaction times that we can dial down to one and by just applying the parallelism that you talked about, the cloud technology…
Moderator: Today BitShares can do 100 transactions per second, right?
Stan: That’s what we set it for to start, yes.
Moderator: (Mentions that some others have demonstrated 5000, etc.)
Stan: Well yes, and I’ll just finish up very quickly, the only reason we’re not running at that speed is because you’ve gotta have faster hardware and you’ve got to pay for that hardware and until the load on the network grows to where its worth paying for that, right now we can get by cheap on little simple processors and do a hundred, and when the time comes we can upgrade.
Other participants/audience: (It’s probably simpler to just scale out into the cloud...)
Stan: The limits to scaling out into a cloud are of course based on the assumption of parallelizability, and in the case of a lot of types of transactions, specifically the types of exchanges you find in BitShares you can’t make a transaction in parallel without knowing the other things [in other threads]. That led us into “lets get the piece of the processing that’s not parallelizable optimized to run as fast as possible and then fan out what feeds it with all the rest of the processing". But there’s always that bottleneck of ordering transactions that are interdependent, and the cost of figuring out what’s not dependent is a huge challenge. And so, that’s why we chose the opposite approach.
Both are valid.
Please release your products on both platforms!
Note: I realize I should have said "200" TPS is our current number, but somehow I dropped a bit somewhere.
I just made it back from the Blockchain Summit in Shanghai to Half Mile High Meadows in the Blue Ridge Mountains of Virginia last night.
First off, the part of Shanghai I saw, from the airport to the Hyatt on the Bund, is spectacular. It reminded me of New York only more colorful and friendlier.
I also concluded, based on an exhaustive scientific sample, that China has more smart people than we have people.
I would like to name all the folks who made my visit there so pleasant, but I'm afraid I might leave someone out! Nevertheless, special thanks to the DACPLAY team and "David Lee" for escorting me everywhere and making me feel like a visiting dignitary.
I also much appreciate the efforts of Bo Shen to give me opportunities to raise the visibility of BitShares and Cryptonomex with, egad, four opportunities to speak:
Day 1, AM: A panel discussion on Scalability in front of an ocean of attendees in the main auditorium.
Day 1, PM: A panel discussion on Digital Assets in front on that same beach.
Day 2, AM: A invitation only technical session on scalability co-moderated by Vitalik.
Day 2, PM: A invitation only session with commodity brokers co-moderated by, um, me.
I couldn't have even hoped for more exposure.
My unifying theme for all four sessions was that industry growth would be greatly enhanced if we started moving onto common blockchains rather than continuing the "altcoin" mentality of a separate stovepipe blockchain for every asset. Community Brands should be free to upgrade to shared Platforms that serve like "operating systems" for digital assets. This would allow them to interact on a common ledger with all the infrastructure services provided for the same reasons that Windows/MacOS/Linux operating systems exist. I used Ethereum and Graphene as examples of two such OS platforms - one focusing on rapid prototyping flexibility and the other on industrial strength performance.
In the next two posts, I'll provide a transcript of my remarks during during two panel discussions on October 15, 2015. These are taken from a pocket recorder I sneaked onto the stage which unfortunately only picked up my own powerful, orator quality voice. So the other panelists have not been transcribed and my recollection of the actual moderator questions is only approximate.
Enjoy.
First off, the part of Shanghai I saw, from the airport to the Hyatt on the Bund, is spectacular. It reminded me of New York only more colorful and friendlier.
I also concluded, based on an exhaustive scientific sample, that China has more smart people than we have people.
I would like to name all the folks who made my visit there so pleasant, but I'm afraid I might leave someone out! Nevertheless, special thanks to the DACPLAY team and "David Lee" for escorting me everywhere and making me feel like a visiting dignitary.
I also much appreciate the efforts of Bo Shen to give me opportunities to raise the visibility of BitShares and Cryptonomex with, egad, four opportunities to speak:
Day 1, AM: A panel discussion on Scalability in front of an ocean of attendees in the main auditorium.
Day 1, PM: A panel discussion on Digital Assets in front on that same beach.
Day 2, AM: A invitation only technical session on scalability co-moderated by Vitalik.
Day 2, PM: A invitation only session with commodity brokers co-moderated by, um, me.
I couldn't have even hoped for more exposure.
My unifying theme for all four sessions was that industry growth would be greatly enhanced if we started moving onto common blockchains rather than continuing the "altcoin" mentality of a separate stovepipe blockchain for every asset. Community Brands should be free to upgrade to shared Platforms that serve like "operating systems" for digital assets. This would allow them to interact on a common ledger with all the infrastructure services provided for the same reasons that Windows/MacOS/Linux operating systems exist. I used Ethereum and Graphene as examples of two such OS platforms - one focusing on rapid prototyping flexibility and the other on industrial strength performance.
In the next two posts, I'll provide a transcript of my remarks during during two panel discussions on October 15, 2015. These are taken from a pocket recorder I sneaked onto the stage which unfortunately only picked up my own powerful, orator quality voice. So the other panelists have not been transcribed and my recollection of the actual moderator questions is only approximate.
Enjoy.
Jump to: