Andreas M. Antonopoulos : The Bitcoin Center Korea Interview
@ Deconomy on 4 April 2019
A few mates from the Bitcoin Center Korea (BCK) and I got to catch Andreas M. Antonopoulos live delivering the keynote of this year’s Deconomy (2019).
At the start of the week, we posted an article introducing an underlying theme of Andreas’ presentation, which was ‘need’ beyond speculation in the adoption of cryptocurrencies. Link to that here: https://medium.com/bitcoin-center-korea/andreas-m-antonopoulos-korea-doesnt-need-cryptocurrency-29dfcb8b3e26
From roughly the start of the year, BCK community members and I began reading through Andreas’ book entitled ‘Mastering Bitcoin’, and we managed to finish our study of the entire work one week before the conference! Moreover, BCK mentor Thibault Paulet and I were honoured that Andreas agreed to sit down with us for an interview following his presentation. As you can imagine, sitting down with the author, and our teacher, was really a moment of significance for the both of us.
Check out Thibault’s side of the interview and his reflections on our conversation with Andreas here: https://medium.com/bitcoin-center-korea/thoughts-on-the-future-of-programmable-money-30964007b6b6
And, without further hodl, what follows is the transcript from my side^^/
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#‘a different basis of trust’
Marissa: As [bitcoin and other cryptocurrencies] continue to evolve, based on what you talked about today — particularly with the surprising statement you made: Why does Korea need crypto? It doesn’t. You kind of pointed that out in comparison to other, let’s say, third world countries, and economies…
Andreas: Yes, I’ve been fairly consistent on that point. It’s the same thing that we have in the United States. The average American does not need crypto. The reason they don’t need crypto is because they’re part of the small percentage of the world that have economic inclusion, functioning institutions, and financial services. The problem is that represents 15% of the human population. 85% of the human population live in perpetual crisis with non-functioning democracies, non-functioning banking systems, massive percentage of economic exclusion, unbanked or underbanked, and they need crypto today.
So I think that’s the dichotomy. It’s very common for people to ask, ‘Why would anyone use crypto?’ And like, Yeah! You don’t need it. Just because you don’t need it doesn’t mean nobody needs it. You know, travel a bit. Meet some other people, because if your entire experience is how North America works or western Europe works or Korea and Japan works, great! Sure, that’s great. The problem is that’s not humanity, right?
…
Marissa: Given that, yes, there is a great disparity globally. Many of the economies in third world countries, they’re adopting what they see of centralised systems and of what works, and bringing it into their systems. Cryptocurrency, if it gets there first, can be very valuable to them and can challenge what we know in our society in the ‘first world’ — there are things broken in the first world, and there are many things that we don’t necessarily want to carry over. What can we make better here before it even gets to those societies or affects them in a way that’s negative for their evolution, particularly in adopting cryptocurrencies?
Andreas: Well, to me I see that as the same problem, which is you can’t just pick up a centralised system that is based on institutions that have hundreds of years of tradition and stability, and transplant it into a country where you don’t have the institutional infrastructure, you don’t have the history and tradition, and expect them to work. You know, that’s effectively neo-colonialism, and we keep doing it.
It’s like, great — you can’t just show up in Rwanda and say ‘Hey! How about we do a Jeffersonian democracy with a three branch government and constitutional protections for civil rights.’ That doesn’t work! And it doesn’t work because in order for that to work you had hundreds of years of institutions and maturity of those institutions. You can’t simply transplant a piece of paper and say ‘Hey! All your problems are solved. You now have a Jeffersonian democracy.’ It doesn’t work. It doesn’t work in Iraq. It doesn’t work in all of the places where we’ve tried to transplant that system.
So the question is: What systems do work and scale for those environments? And to me I think the issue of centralisation versus decentralisation is critical. I think in the absence of scalable institutions and trustworthy institutions, you have to have a different basis of trust. And the basis of trust that uses network consensus and empowers individuals is most likely to work at scale in more places than one in which you have to trust your local officials or committee or some kind of other group organisation.
Marissa: I guess the challenge — and I don’t have it well constructed in my mind yet, but simply based on what you said — with Korea’s recent ‘democratic miracle’, or however you wish to describe it, it has been this system that’s been adopted, and I wouldn’t necessarily say forced onto people here, but it’s something that was recently picked up. And a lot of people here are teemed — and perhaps this might be a way of explaining a rush on adopting cryptocurrency — changing a reality that they didn’t themselves construct. And for societies that are already well on their way comparatively given economic, financial structures, what of the cryptocurrency space and the technologies can change these societies for the better, and perhaps set an example for those that are also transitioning themselves? So, what can be done in such a case?
Andreas: I don’t know know yet. I mean I think that’s one of the exciting things about this space is that we don’t know. We don’t know how these things are going to evolve. We don’t know which applications are going to be adopted and which are not going to be adopted in different places.
Thibault: People got to be fully aware all the time.
Andreas: Yes, and you know, measuring the progress of a society based on economic metrics alone — you could look at Korea and consider it a miracle of westernisation, but it’s not. It’s a society full of its own contradictions, it’s own inequalities, and it’s all structural problems, right? It’s not a society where the success has been equally enjoyed, let’s put it that way, and it’s not my place to criticise because it’s not my culture. But every society has its inequalities and problems and structural problems.
#decentralised + education = deducation^^/
John, the Bitcoin Center Korea CEO, had some questions about education:
‘For someone as passionate about education, do you plan or would you be interested in having a small educational program about bitcoin, crypto, blockchain based on your open source content in Korea; this could be in an offline, online, collaborative setting?’
Marissa: The material of Mastering Bitcoin is open source…
Andreas: Yes, all of my material is open source and the goal of that is so that people can localise it and mash it up and create educational content that is appropriate for each location.
So my books have been translated into Korean: Mastering Bitcoin second edition already; Mastering Ethereum was planned for release this month. They missed the conference. I think they’re going to be finished in a couple of weeks, unfortunately, but the Korean edition of Mastering Ethereum…
My videos, about 10% of my videos have translated subtitles in Korean. I would love to see all of them have translated subtitles. It’s a volunteer program. Anybody who wants can do it. So it’s definitely my goal to produce materials and license materials in such a way that others can take them and build whatever. And part of the licenses that I use, importantly, allow commercial use, meaning people can make money repurposing my materials to help teach others. They have to also release the results as open source.
So yeah, I’d be delighted to see more of that. It’s happening in a bunch of countries. It’s not something that I control. It’s very grassroots. It’s very autonomous.
[The Korean version of ‘Mastering Ethereum’ has since the time of this interview been released in Korean bookstores :)]
#it’s difficult to be a wallet
Marissa: [Banking relationships…] are definitely a major part of larger exchanges. They go after banking as per their business requirements or needs…
Andreas: Yes, regulation infects every part of the business.
Marissa: We had the CEO of Edge wallet come and talk about wallets being the new exchanges, particularly the technology that allows you to go between different [cryptocurrencies], with potentially less KYC requirements compared to exchanges. How successful can wallets be in not just simply giving the keys back to the user — which is in part superior, I think, to exchanges? What else can they do if they are themselves now trying to become the means by which we convert between[cryptocurrencies], and [even facilitate] speculation?
Andreas: I don’t know really. I mean I think what’s interesting is that one of the big challenges with wallets is finding a way to monetise the wallet itself. Almost all of the wallets in our space are free to use, and most of them don’t even have some kind of premium support model, etc. So making money with wallets is very, very difficult, and if you’re not making money with wallets, then maintaining the wallets and keeping up with the rapid pace of change in the technology that the wallets need to support is very, very difficult.
So I find myself every six months changing my primary mobile wallet because the one I was using before stagnates and stops advancing, and they can’t keep up. And the reason they can’t keep up is primarily a business model problem. They haven’t figured out how to monetise the wallet in a way to sustain development in the long term.
So if incorporating features of exchanges — and decentralised exchanges in this case — gives them a better business model, so that they can actually support and keep up with the technology, that’s great. The danger is losing focus. It’s already difficult enough to write a wallet. Now you’re trying to write a wallet and a decentralised exchange and maintain both of those. And usually a lot of these companies what they end up doing is they keep adding tokens and chains and currencies. And the more they add, the more they need to maintain, and the more the pace of change increases, which then ends up destroying their model.
So, it’s a double edged sword; you have to be very careful not to overextend yourself. Very few companies have figured out how to do one thing and do it well, and deliver easy to use wallet functions long term. It is an area of our industry that has not yet found success. It reminds me of search engines in the early 90’s. There were many of them and they all sucked. And every few months you changed which search engine you used because none of them seemed to figure out how to make it work and monetise it and make it effective and efficient and grow. Until Google. And I remember the before Google time and how difficult it was to do basic search.
So, I think the first company that solves the problem of how to build a business model around a wallet that they can sustain is going to become a billion dollar company. Maybe it’s not a company, maybe it’s an open source project, maybe it’s a DAO, maybe it’s a DAPP, who knows…
#⚡
Marissa: Maybe then not speculating on how things could change, but on how things are changing: Have you used either of BlueWallet or Casa Node on Lightning?
Andreas: Yes, I’ve used both of those.
Marissa: So, BlueWallet gets criticised a lot for being a custodial wallet. I’m not exactly clear on the access that the company has. It’s their private keys, basically. You’re just using them as a service. From my understanding, in the discussion of the lightning network’s evolution and employing that into wallets, they don’t seem to be getting away from the custodial aspect of allowing people to participate in order to get people on board.
Andreas: That’s cause it’s still very early days, but from my perspective I don’t use custodial lightning. I use non-custodial lightning. I run my own node. I configure my own node. I run my own keys.
Marissa: We just set up a node at the Bitcoin Center… and you can connect your — and I haven’t done it yet — your BlueWallet to your own full node.
Andreas: Yes, which is what I’ve done in the past. And there are other wallets for lightning that are better and more effective and that provide non-custodial access.
Marissa: But it really does seem like most people are saying we’re going to have to sacrifice…
Andreas: I don’t think that’s the case, no. And I haven’t heard most people say that. There is absolutely no reason why you can’t run non-custodial wallet solutions.
Marissa: Ok, well, Casa is an example of giving people a node and [wallet] rolled into one…
Andreas: Yes, and there’s new technology that makes it easier to run a lightweight node on a mobile device called Neutrino, which is a new SPV-like model so that you could run a lightning wallet without running a full bitcoin node.
Marissa: SPV — and they have something called Gollum [sic] filters, which I think are an evolution of Bloom filters — is that correct?
Andreas: Yes, yeah, it uses Golomb coded sets, GCS, and that’s the basis for Neutrino. And it’s a more efficient way of doing a light-weight node that doesn’t have to trust or lose privacy to full nodes — I think that’s one of the evolutions that’s gonna allow us to do more non-custodial lightning.
#principles as competitive differentiation
Marissa: You’re right, not ‘most’. It’s only those [projects, teams] that I’ve been exposed to that have been pushing towards or giving up the idea that they can do something without creating something that’s a custodian-based system…
What can startups do? What can — people, individuals, companies that are entering this space and trying to make a difference. Often we see companies compromising on the principles or the primitives of what is bitcoin. They’re building on bitcoin; they’re trying to change it in a way to leave out some of those necessary elements that make it trustless and decentralised and open, moving in the direction towards being centralised. What can startups do to not compromise on those principles ? It’s hard, but…
Andreas:
Recognise that the principles themselves are a very important competitive differentiator.
And that if you try to compete by shedding principles, there are always companies that are less scrupulous and willing to shed principles faster than you. Ultimately, you lose that game. There’s big companies out there that not only have the capital but no principles. Facebook. If you want to compete by dropping principles, Facebook will drop principles faster than you. And they’ll put a billion dollars behind their no-principled approach in order to dominate the market, so you will lose that competition.
If you keep your principles, however, that’s a competitive differentiator that many of the companies out there cannot compete with. If your principle is protecting user privacy and they’re violating user privacy, they can’t suddenly change their business model and start protecting user privacy because that destroys their profit. So you can use that as a competitive differentiator.
The principles that underpin open blockchains are great competitive differentiators because the existing traditional competitors cannot copy them. The banks cannot build open systems. The banks cannot build private systems. The banks cannot build systems without KYC, surveillance, and all of the other things, because the existing environment they’re in prevents them from moving in that direction. Which means if you build those systems they can’t follow you and compete with you in that space.
I think people need to look at principles not as some vague ideological commitment that only idealists have, but instead look at them as competitive differentiation, as barriers that stop others from following you because you’re going down a path of principle where those without principles can’t follow. So, to me that’s really…
Marissa: Sticking to your guns.
Andreas: Sticking to your guns, yeah, because if you go and compete on the zero principle game, there’s always a less principled competitor out there. I think people don’t realise the depth of cynicism that exists [chuckles] in the corporate world, and how quickly people are willing to drop any principle.
As soon as a company becomes large enough to hire its first MBA into management, all the principles go out the window. There are no principles. Corporations are fundamentally amoral organisations. They have no morals. It’s not that they’re immoral, they’re just simply amoral. Morality doesn’t play a role.
Is morality profitable? No. Forget it! Done! Out the window it goes — and that happens in any company as soon as it gets beyond a certain size. So, actually maintaining your principles prevents you from being inundated by these people.
Marissa: The resources being out there, at least technological resources, that are open and accessible and can be adopted and used to build whatever you want to build — but it takes a lot to get people on board with something. For startups, startup founders have to go crazy in order to push their ideas to make others think it can work, make others believers to a certain extent.
Andreas:
Yeah, and one of the ways you can help promote that is by example. Demonstrate your willingness to stick to the principles and show others how it can be done.
It took me a while to figure out how to build a successful model for completely free education that I give away to everybody. And then I had to persuade my publishers to follow along with that crazy idea, but now more and more people in the space follow that example because they see that I can do it successfully.
Of course I have my own definition of success. I’m not a billionaire. I didn’t care to do that. I’ve built an educational legacy. And that’s more important to me than becoming super rich on the back of these cryptocurrencies. That’s my set of principles. Other people can follow, and at least they have one example of someone who is still employed in this space.
#끝~
#thank you, Andreas!
Thank you, reader!
Shout outs to Jake and John for suggesting we reach out to Andreas~
