From cryptocoin mining to defining the future of work
Our CTO’s journey in crypto and Blockchain
It all started back in 2009. I was commuting between Switzerland and Germany -still doing so, for 10 years now- when I read some news about Bitcoin and its underlying theory which immediately got me hooked. Shortly after, my mining endeavor started on a couple of CPUs at home, even though cryptocoin profits did not cover my electricity bills. Actually never at the point of mining.
For me, a computer scientist and economist, proof-of-work as a concept is suboptimal and largely a waste of resources. Proof-of-stake as an alternative makes so much more sense, albeit obvious incentive issues exist.
Either way, buying Bitcoin back then was close to impossible. Many of the small exchanges disappeared as quickly as they opened, sometimes along with money and coins. Trust issues at unexpected places popped up suddenly and frequently.
Bitcoin.de went public a little after and resolved most of my issues, along with Poloniex.com. A little later I held around 40 coins and tokens in my portfolio, and had become an early expert on mining and, foremost, mining algorithms. Graphics cards/GPUs became mandatory at some point in order to keep up with the dramatic increase in computational power in the various Blockchain networks.
At that time I noticed Protoshares, Memcoin and the Lebowski coin, among others. You can check out mapofcoins.com for more. (Disclaimer: Bitshares got added due to my request; thanks for the Brownie coins, bytemaster). And the ideation around the delegate-proof-of-stake concept, which I still like a lot. Unmatched in efficiency and speed; not looking at permission-based Blockchains here.
The go-live of the Bitshares 1.0 chain, where I received my first airdrop as an angel investor, felt like a turning point, and since then my interest focused on Blockchain technology itself. Templated contracts (e.g., on Bitshares.org and NXTplatform.org) introduced a plurality of opportunities.
Then, later, Ethereum took the spotlight with fully customizable contracts, smart contracts. Still I believe too much flexibility is not necessarily a good feature for a Blockchain as it requires way more resources. And, generally speaking, a Blockchain that supports “unfriendly” contracts (aka viruses on-chain) cannot represent the best possible approach.
I myself, nevertheless, have to admit that the Ethereum blockchain depicts the best effort so far. Looking at the large and growing developer community and the strong network effects Ethereum has built, there is no better option out there in the wild.
This slowly takes us to the current date. As a CTO and co-founder of Covee, I am happy to be part of this journey and the revolution happening in the crypto space. We will make the best out of this! Oh, I forgot to mention my activities as a (small) market maker and in the privacy-centric space around Bytecoin and Monero… but this is a separate story.
Why we use Ethereum Blockchain
We get this question a lot and have thought about it many times as well.
The truth is that the Ethereum blockchain is a unique piece of software and the first blockchain of its kind, supporting almost arbitrary logic to be executed. Such logic can be deemed a smart contract but is not limited to the behavior of a common legal contract.
Smart contracts are as flexible as Java programs. Likewise they exhibit a Bytecode representation, and can be written in high-level programming languages like Solidity (compare Javascript). Nonetheless, contracts on blockchains have existed long before Ethereum came to life.
A good example is the Bitshares ecosystem and the extremely energy efficient delegate-proof-of-stake. Bitshares is a blockchain that supports specific types of templated contracts. Despite the fact that they initially failed to put Graphene under a BSD or Apache license (now they use MIT).
We are hence watching other Blockchains closely, for example EOS.io and Lisk.io, as the choice of license is crucial and contagious licenses like the GPLv3 can prevent community efforts.
What are templated contracts?
Predefined functions that are less flexible but allow certain activities like creating user-defined assets on the blockchain. The major advantage of templated contracts, among others, is the low (carbon) footprint in computational cost. A fast and lightweight execution, and full certainty about blockchain behavior.
In contrast, using Ethereum, new contracts, i.e., new functionality can be created at any point in time. Computational costs are rather high and analyzing complex Ethereum contracts is difficult.
Yet this flexibility is a necessity for Covee Network, as contracts and new market designs will evolve and emerge over time. Variations of contracts also give our users and project initiators more options. For example, the process of selecting team members for roles in a project can be carried out by an auction contract or by a simple matching contract.
Decentralization is the future
With the dawn of Blockchain technology, decentralized applications and even entities become reality. The reason is simple.
Blockchain technology can disrupt current business models by removing the need for middlemen and intermediaries. Thus providing a more efficient customer experience.
For example, now you can:
- Send money via Bitcoin across the globe without the necessity of a payment provider
- Proof the existence of a document via factom.com without requiring a notary service
- Manage your digital assets via melonport.com without a legacy back-office
- Store a file in a decentralized cloud, e.g., maidsafe.net without the need of a centrally controlled service like dropbox.com
From a personal point of view, added and provable trust in business processes is regarded the most disruptive aspect of the Blockchain based decentralization.
When a centralized service is decentralized and the business model is rewritten, e.g., put into a smart contract, control is transferred away from the central operator towards Blockchain technology.
This change in control and ownership is of particular interest when things of value are at stake, like reputation or financial assets (e.g., stakes or earnings), possibly in form of a cryptographic token.
At Covee we clearly see the added value for our users here. It motivates and drives us to extend and push forward. Using the state of art smart contract technology, our contracts will keep defining the cutting edge of decentralized teamwork. As such, the collection of our contracts is seen as an ever-growing workflow protocol for decentralized teamwork and project management.
How can decentralization reduce transaction fees
Switching the perspective to a business view, cost reduction is probably the most beneficial disruptive element of decentralization. Operating a global network with millions of users was and still is a highly expensive endeavor. Outsourcing this complexity to a Blockchain ecosystem reduces cost to a minimum and simultaneously grants access to all connected peers and users.
Admittedly, transaction fees for all major Blockchains have reached insane highs recently (as of Q1 2018). But there is light at the end of the tunnel. Side chains, for example, will soon help mitigating the problem by moving specific use cases to other/child chains, running side by side with the main chain. Possibly equipped with different proof-of-work concepts and lower transaction fees.
Another popular method of coping with high transaction fees is a divide-and-conquer approach. Outsourcing parts of the business logic to an off-chain system that only interacts occasionally with the Blockchain e.g., check out how lykke.com implemented this.
Covee is considering this option for voting, peer-to-peer reviews and other reputation related tasks to minimize fees. But also, in order not to stretch the Blockchain network with unnecessary computations too much, as every node of the network has to execute every piece of code.
Conclusion
At Covee Network we embrace Blockchain and smart contract technology. Decentralized collaboration requires the right coordination, incentive and trust mechanisms to mitigate free riding, non-cooperation, imbalanced skill sets, failing communication, missing motivation, etc. Blockchain technology is just the right tool that allows us to realize our vision and to scale it within our tailor-made token economy. Sign up now and step into the future of work!
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Stay tuned for our next post! We will provide a use case of data-driven knowledge work and team collaboration at Covee Network.
