myBTCnetwork | Emin Gün Sirer Reveals Fundamentals of a Perfect Blockchain. PoW Mining Is Not Included

Emin Gün Sirer Reveals Fundamentals of a Perfect Blockchain. PoW Mining Is Not Included

Posted on 06-16-2020.

Emin Gün Sirer Reveals Fundamentals of a Perfect Blockchain. PoW Mining Is Not IncludedEmin Gün Sirer, associate professor of computer science at Cornell University and an early proponent of Bitcoin, is known as the creator of several important scaling solutions, including Bitcoin-NG. Having spent almost two decades in the field of crypto research, today he is the CEO of AVA Labs, the venture-backed company behind an open-source platform for launching decentralized finance solutions. In recent years, Emin Gün Sirer has also been openly sympathetic to Bitcoin Cash, the altcoin project launched in August 2017 as a Bitcoin hard fork. Something that made him an obvious target for the hardcore Bitcoin maximalists. In an interview with ForkLog’s Andrew Asmakov, Emin Gün Sirer shares his vision on the future of the crypto industry and explains how the infamous Bitcoin block size wars eventually took him to AVA, the project he calls the future of blockchain. As of June 16, 2020, the AVA blockchain incentivized testnet has come to an end: https://twitter.com/avalabsofficial/status/1272935274713137152 ForkLog: Before AVA, you have been experimenting with different Bitcoin scaling solutions, including Bitcoin-NG and TeeChain. Where are these projects now? Have they actually spurred you to start working on what you are doing today? Emin Gün Sirer: Let me give you a bigger picture. I am a professor at Cornell, and I have been working on cryptocurrencies for about 19 years now, so my interest in the space predates Satoshi. In 2002, before Bitcoin came along, I had already worked on Proof-of-Work and that work on minting cryptocurrencies with PoW is very well cited among the academics. I didn’t pursue it because I was told by other professors that I would not be able to find funding for it, and they were right as the timing, right after 9/11, was not very good. Satoshi came after me and his timing was perfect. His vision was bigger than mine and he had the breakthrough, something that my system called Karma didn’t have. https://twitter.com/el33th4xor/status/992013079855730688 After that I have discovered a way to mine more profitably than Bitcoin itself, it’s called selfish mining. I also worked on coin security, I invented Bitcoin Vaults, and they have just been implemented on the Bitcoin chain, finding its way into production. And I did Bitcoin-NG, which is now used in at least five different chains, including Waves and Aeternity. After that, I worked on Teechan and Teechain, these are layer-two protocols for moving value very fast and more secure than Lightning Network. And while I think that layer-two solutions are interesting, they tend to be more limited in capacity. The Avalanche protocol represents the best of what I know, combining features from different projects and the lessons learned, pulling it all together in a new and very fresh approach to creating a value proposition. FL: What made the concept of selfish mining so necessary? Emin: Over time, I realized that having miners was a terrible idea. Miners represent a class of participants whose interests are not aligned with anyone else’s. In the Bitcoin block size wars, their role was very confusing and created a lot of stress and controversy. Mining is an inherently centralized game and is out of scope for many regular participants. If I act on my own, I can’t possibly start a competitive mining operation because it requires a capital investment beyond what most people can afford, it involves access to mining rigs and cheap electricity. So I decided that mining was not the right direction. FL: Apart from getting rid of PoW mining, what are other fundamentals of a successful blockchain project? Emin: Decentralization, this is a very important thing to me. I watched many other people trying to make trade-offs and giving up on decentralization, but there’s nothing interesting in achieving coin performance by centralizing it. Security is another thing that is paramount to this. It is essential that any new coin comes with a security proof. It’s not about someone just putting certain things together and saying “Oh, this is great!” The protocol security has to be proven in the correct way, and we at AVA have spent a lot of energy on ensuring that we have a secure and trusted foundation for other people to issue assets on. FL: For quite a long time you have been a vocal critic of certain Bitcoin scaling solutions, including SegWit, and it was specifically interesting to find one of your earlier statements where you call yourself ‘the grandfather’ of UASF (User-activated soft fork). Do you think it would be possible to avoid all that drama that the crypto space was engulfed in 2017 with things like UASF, SegWit, and SegWit2x on the table and making the waves at round tables and on social media?  Emin: I really once called myself the grandfather of UASF meaning that regular users should be able to reject changes to the protocol proposed by miners, and that’s one of the nice properties of Bitcoin. I very much feel bad about everything that transpired during the block size debate. I did criticize things, but I always tried to side with science. For that reason, I felt that one of the sides was bending the truth and saying things that were not scientifically correct in order to affect a particular change to the protocol. They wanted to introduce that SegWit modification and certain economic subsidies and they weren’t honest with their users on that. Neither were they honest about the limitations of the Lightning Network, and it’s only now that people are starting to realize that Lightning Network is limited in capacity. These are the things that I have called out many years ago. This doesn’t mean that the LN’s approach is bad, it’s just about being honest. And, certainly, it’s not the case that Bitcoin is bad, Bitcoin is still Bitcoin and it’s impossible to read the white paper and not to fall in love with it. As for the whole block size debate, it took a lot of energy from the system and the entire cause of cryptocurrencies was stopped. If you ask me where we are today, I think that both Bitcoin and Bitcoin Cash are trying to do something that is really difficult. I mean the competition with sovereign fiat currencies. They are trying to outdo the dollar, the Euro, and the Ruble, but that’s not easy. I hope they succeed and get to where they want to get to, but there’s a bigger game in town. There’s much more value in other assets that are non-monetary assets, that are not sovereign fiat money. You can ink a much more useful system that has many use cases and doesn’t compete with the fiat use case. That’s one of the directions where AVA is heading. The other thing is that all these systems are limited by the consensus protocol they use, so they can never outdo fiat due to the lack of scale. AVA has the scale necessary to tackle the fiat use case but it’s not even trying to do that! Its actual goal is to tackle other assets issued on blockchain to facilitate the transfer of financial instruments across the globe in a censorship-free manner. FL: Back in 2018, I spoke to Erik Voorhees and he was quite sincere in trying to convince me that SegWit2x was not about the interests of large enterprises but rather the broader Bitcoin community. He hasn’t really convinced me to be honest, and I am still thinking a lot about different groups chasing their own interests and how all that split the space.  Emin: This is a very hard question and to find the answer we probably need more time to sit down with beers and discuss that. SegWit2x was a compromise solution that tried to incorporate block size ideas from both sides and change the protocol to add the SegWit complexity. To me, it represented a terrible technical approach. It was a very good thing to try to find the middle ground and to unify the community, but technically speaking, it was too complex and it was not the block size increase that would be big enough. I was confident that it wouldn’t succeed and I wasn’t surprised when it didn’t succeed. I wasn’t a SegWit2x proponent at any time. I like intellectually pure solutions and that’s why I like Bitcoin Cash. It has clearly defined what it wants to do. I like what Bitcoin is trying to do as well, but I was a little worried that the idea of SegWit was presented in a dishonest manner. The main problem was about the governance since developers were pushing for a change out of hand. I was not a big fan of their arguments because they were not based on proper science. FL: You have not only been heavily trolled by hardcore Bitcoin maximalists because of your views on SegWit, but you also claimed there was a Bitcoin Core troll factory. Is this all over now? Emin: Yes, I was trolled, but that’s alright. In the end, science is the way of validating the truth. So what we see today is that Lightning is limited in capacity and we also have some privacy issues associated with that, so it is playing out exactly the way I said it would. It’s an interesting space, and I expect everybody to have good motives. I want to believe that everyone in the industry is trying to do what they think is the proper way to advance crypto. What I judge people by is how they achieve their goals, what’s the process, whether they think that it’s ok to use methods that deceit people. I don’t like people who do that. I saw more of that from one side than from the other, but it’s all under the bridge now. Bitcoin has its own path, it is trying to compete with the dollar as the store of value, and it’s proponents don’t want it to be used for anything else. In fact, a while ago I had a meeting with Adam Back and Peter Wullie in Malta, and they told me: “Look, we could have made blocks a little bigger, but it wouldn’t take us anywhere. We will never be competing with Visa anyway.” And that was the moment when I realized they were absolutely right about that. Bitcoin can’t compete with Visa just by making the blocks bigger. And that also was one of the big things that gave rise to my efforts to bring AVA to the world, because we need a drastically better protocol to compete with Visa. FL: Speaking about AVA, what makes it different from other blockchains and how exactly do you plan to win the competition over other existing projects? Emin: There are three differentiators for AVA that all together sum up to one big value proposition. Number one is the consensus protocol. Deep at the heart of AVA, lies a brand new style of consensus protocol which is as much of a breakthrough as Satoshi Nakamoto’s whitepaper was. It allows AVA to be much faster and to achieve finality in one second. It supports more transactions per second than Visa without compromising decentralization. The amazing thing is that the network itself is more decentralized than Bitcoin. It doesn’t involve Lightning and is still more efficient, anyone can participate and collect rewards. This is what makes AVA unique, and while a lot of people make similar noises, if you look behind the covers you see that they all use old technologies. AVA innovated substantially in this space. The big step forward and the thing that allows it to be so fast is this new consensus protocol which is a substantial scientific improvement. The second differentiator is the network model. All other coins have copied their network model from Satoshi. They have one coin network with one virtual machine (VM), while we are building a platform for other people to issue digital assets on. There’s going to be the AVA coin underneath and there will be many other coins on top of it. Each of these coins can introduce its own VM, and people can also define who gets to be inside the network. This a hybrid model that allows one to send the network from fully permissionless to fully permissioned. This is great for large corporations and enterprises as it allows them to do legally compliant coin offers. You can create a coin and control its behavior inside the network as well as the behavior of all the participants. The third and final differentiator is the governance model where the participants determine key parameters of the network. They can’t change certain characteristics, for example, the number of coins issued, since each coin has a hard cap, but they can change the way of approaching the hard cap. They can reduce the minting rate if the issuance rate is too high, or to increase the minting rate if they want to incentivize people. All of this is in the hands of the stakeholders. In essence, what you build is a central bank with the participants running the network around it. FL: Is this correct to say that AVA also falls into the category of DeFi projects? Emin: Yes, AVA is very much designed to facilitate DeFi in multiple ways. Number one is the support of smart contracts programming language. AVA supports the Ethereum Virtual Machine, but we also plan to support WebAssembly which would make us the only platform to support both. This will allow people to create smart contracts in any language they like. The second thing is that we allow people to issue top-class assets on top of AVA and the system is aware of them. The big problem with Ethereum is that assets might have a value that exceeds that of the network and the participants can’t extract that value. In contrast, in AVA all the participants know the assets they support and have a way of extracting transaction fees from these assets. In simple terms, I can create a new asset, for example, a real estate token, I can define who gets to validate it, and those validators can demand fees that will be reasonable for the real estate sector, even hundreds of dollars. This is what only AVA offers. In Ethereum, miners can’t extract fees that are in line with the assets. FL: If there was no Bitcoin Cash hard fork in August 2017, everyone is in total agreement, and Bitcoin gets a block size increase, where would we be today?  Emin: I don’t think it would be very different even if the community had remained united. Bitcoin would still be limited in its capacity, it wouldn’t be able to compete with fiat for payments, it’s just not possible with its protocol. Ethereum with its ICO’s would have still taken off and its problem would have remained the same, so we would be exactly where we are today. The technology we had was not sufficient to meet the people’s demand. And what happens when the technology is limited and can’t scale is that you get different groups. People want to get a better design and go in different directions, and if they can’t agree on the direction they splinter. That’s a natural thing. But when you come into the space with something that is three orders of magnitude faster, then it changes the whole game. FL: What will the crypto industry look like in 5–10 years? Emin: If we speak about this timeframe, I expect the vast majority of financial assets to be traded on digital decentralized platforms. This influences fiat currencies and all other assets that we are familiar with: stocks, bonds, and more complex financial instruments. I expect this to be happening on secure trustworthy exchanges. The exchanges that we have today are neither secure nor trustworthy. We will see the blockchain technology, the byzantine tolerant protocols substantially disrupting and transforming the finance space. Everything that we know today, things like titles, credentials, or diplomas, they all will be in blockchain form, and what we are doing is laying the foundation for such a system. A foundation that can support all these kinds of digital assets in a unified fashion. That’s our vision and our goal. Emin Gün Sirer was interviewed by Andrew Asmakov Follow us on Twitter and Facebook and join our Telegram channel to know what’s up with crypto and why it’s important.

Source: ForkLog