Humans of NEAR: Joshua Bouw ‘The Godfather of Proof of Stake’
Joshua Bouw is a member of the NEAR EVM Team. Known as the Godfather of Proof of Stake, Joshua possesses a unique and, at times, unbelievable, amount of experience inside the crypto space. This short excerpt below is a small snippet of a highly active and engaged life, within and beyond crypto. As a life hacker, software engineer, sound engineer, digital nomad, and master theoretician Joshua has accomplished a number of world-first discoveries: The architectural design of proof of stake consensus models from Version 1 to Version 3. The first on-chain smart contract. Launching a $1.1 million dollar Theatre, and living as a genuine crypto native before almost anyone had even heard of Bitcoin.
Hacking School: A Sign of Things To Come
Our story with Joshua starts at the age of 14. The native born Canadian was just starting high school. Unlike most other teens of his age, Joshua was an up-and coming life-hacker: Someone who could identify efficient pathways to end goals and objectives, outside of the conventional pathway through a system. His first life hack was school, during which Joshua worked full time, paid no taxes on his income, graduated with the rest of his class and got a scholarship to college.
The teenage Joshua wore long hair down to his hips and had a strong affinity for heavy metal. As a young adult, his passion was music and gaming, to the extent that Joshua even kept a journal with game designs and ideas in it. When he started high school at fourteen, the system was simply too slow and bureaucratic for him to work with. He looked at it and realized:
“I looked at how school should operate and figured out how to game school. I did the bare minimum to do everything I had to do by law — not do homework, not do most of my tests, not do a bunch of stuff. So if you don’t do homework they cannot give you a zero, as it can only affect your class participation. I never did my homework: I was a terrible, terrible, student. I also found out by law that I only had to know grade ten math even though I did grade 12 mathematics and advanced mathematics.”
By carefully scrutinizing Canadian education law, young Joshua came to realize that he could, in fact, make up most of his education credits through work experience without attending classes:
“I found out that I could make up most of my credits from work experience, doing a full time job from 14 to 18 and then saving up all of my money. I showed them what I needed to legally graduate high school but also get my credits and earn money that is tax free. At the same time I also try my darndest to get a scholarship…I was the person who was driving my teachers crazy in the sense that I looked at how school should operate and figured out how to game school.”
On graduation day, Joshua walked across the stage with all of his peers. He had a scholarship to college, eighty-thousand dollars of tax free income in his bank account, and hours upon hours working outside of the classroom. It was his first life hack — high school was the victim, and Joshua was the victor.
Shortly upon graduating, Joshua moved to Vancouver to study Sound Engineering. But soon after, he realised that a sound engineering degree would be a dead end for him. As Joshua explained it: “It is one of those industries that was shrinking and not expanding.” Over the course of doing multiple gigs for his friends and setting up a small theatre, Joshua came to realize that he enjoyed the technical planning and logistics side of sound design for events and performing arts. While still totally removed from the world of computing, this experience brought forward his affinity for technical / digital systems.
After college, Joshua started a record label company with a friend that sputtered through until it was bought out by Joshua’s partner. As he recalls it:
“We signed on 4 bands — I didn’t really know about them. I had them recommended to me. They were all good bands but as soon as we signed up all 4 of them — 2 of them disbanded within a month. We only did 2 releases and even after that my partner bought me out.”
And while it paid the bills and kept him engaged with the local music and band scene for a time, it was not a fulfilling day-to-day engagement. Joshua looked for something more. His long time friend, David Gold — a local musician who also won a Juno Award — always told Joshua to travel and teach english to clear his head space. It was only when he passed away a year later, did Joshua take his friend’s advice to heart:
“I thought, I am going to do what David said — and I got on a flight and six months later I was out.”
He packed his bags, sold his share in his record label and joined an organization called “Teach and Travel Vietnam” for the next six months.
A New World of Cryptocurrency: The Godfather of Proof of Stake
It was not long after Joshua got to Southeast Asia, that he realized that teaching English was not something he enjoyed doing. In fact, he hated it. But in spite of the insufferable day to day tasks, he found that he enjoyed the location: The area, the weather, the people, and the food. As he describes it:
“I liked everything about it and wanted to travel a bit before going home. I got as far as Cambodia next store and have been living here the last 8 or 9 years.”
At that time, Joshua was familiar with Bitcoin, but was not fully aware of what it signified. Back in 2010, he had downloaded the software and started to mine Bitcoin. Shortly after, his computer froze. As he described it: “I freaked out and thought it was a virus and shut it down.”
It was in 2013, one year after his restaurant conversation in Cambodia, that he realized the full potential and purpose of Bitcoin:
“Wikileaks had their credit card payment processing declined, they had their PayPal cancelled — they had no way of getting money. Someone suggested that they could use BTC to solve the issue of Wikileaks. I remember reading this article and thinking about how cool this was.”
At this point Joshua started to look into Bitcoin much more seriously. While he frequented the Bitcoin forum and engaged in active dialogue with other enthusiasts, he couldn’t help but form his own opinions:
“One thing I realized about Bitcoin is that Proof of Work mining never made sense to me. A lot of people go into the Keynesian philosophy but I didn’t see Bitcoin like that at all. That actually led me to some online discussions about Proof of Stake. These were really early discussions I think before Peer Coin. There was this guy and this one post on the topic that was well received by the Bitcoin core guys. Gregory Maxwell wrote up a nice thing about it, referencing that it would make sense to develop at some point.”
Thus began a process of discovery and innovation that has since landed Joshua with the title, “The Godfather of Proof of Stake.” He closely followed the early days of Peer Coin — the first hybrid proof of work and proof of stake project. He was one of the first advocates for 100% proof of stake models. As he explains:
“I was really interested in this whole idea of proof of stake — because to me it made sense — if you can agree on the state of the ledger why wouldn’t you take the balances to secure the network. A couple of months later, I came across this discussion that talked about 100% proof of stake models and I was really, really interested.”
Blackcoin was the world’s first 100% proof of stake cryptocurrency. Originally introduced by Phil Slobodian, Joshua worked with the founding developer of Blackcoin in providing ideas, architecture design, feedback, and constructive criticism from its very origins until its launch. As he described the process:
“I was really active in the community, dropping ideas of how to improve it. I took the role in helping come up with the architecture to generate these ideas which eventually led us to Proof of Stake 2.0 and Proof of Stake 3.0 This is called an entropy pool. One of the biggest concerns about PoS is that you have to have a good Randomness pool — otherwise someone can compromise the network. We came up with a new entropy pool model and also basically took Black coin and nurtured it and developed it.”
During these early days of Proof of Stake, Joshua and other early crypto-pioneers did a number of world first’s for the crypto industry. As Joshua explains in reference to Blackcoin in particular:
“We had some really big accomplishments in the black coin community that we were all a part of beyond the 100% PoS component. We attracted a lot of people who were really talented and a lot of people bringing fresh ideas. One of them was the multi-pool. We had a lot of people used to mining and having all of this mining equipment. We came up with the concept of the multi-pool, which is now so staple, you could mine blackcoin from different projects and choose to get different coins from that compute power. We did the first multicoin-pool.”
Once the Blackcoin multipool took off, the clock started to tick for proof of work coins. The Blackcoin pool quickly became known as the Blackhole or as the Chinese coined it The Machine Gun Pool. Crypto would be changed forever.
A second accomplishment that was picked up by CoinDesk at the time was the world’s first on-chain smart contract. Joshua convinced David Zimbeck from Bithalo to move down to Cambodia. For three months full-time, Joshua and David worked on coding the contract before symbolically releasing it on July 4th of 2014. It was:
“The first technically on chain smart contract. We did it over email and not actually on chain because we liked the idea of running compatible software between two people where they can achieve consensus themselves and not directly on chain.”
It had been two years since Joshua made the leap into the world of software programming. In only two short years, he had established himself in the Bitcoin community, designed the first iterations of Proof of Stake consensus models, pioneered the notion of a multi-pool, and created the world’s first on-chain smart contract. For Joshua, these were the early days of a movement that promised to change the world.
The culture of the crypto space at this time was particularly remarkable. In these early days, crypto was pervaded by a genuine authenticity and humor that has not been possible to replicate since:
“We never took anything serious at all, if you watch our first livestream that we did, we were chain smoking and drinking and one of us was just smoking pot. We did all of this stuff on purpose. We were doing a really serious thing and talking about serious topics. Everyone was like holy f**k I think I just got cancer watching this.”
The Darker Side of Crypto, and The Million Dollar Theatre
Joshua’s immersion in crypto took him around Southeast Asia and China at a time when first-generation crypto projects were only getting off the ground. With the official role of ‘International Head of PR’ for Blackcoin Joshua was able to meet an exclusive and often secretive network of cryptocurrency enthusiasts. As Joshua describes it:
“I dropped everything in the beginning of 2014 and went full time crypto. I was in a unique position where I didn’t have a girlfriend or wife or anyone dependent on me. I could earn as little as 500 bucks, eat noodles and get by with 200 dollar rent, while accumulating crypto and doing work on projects I actually believed in. I was definitely full time.”
One trip in particular stood out to Joshua: When he went to China for the first year anniversary of Huobi Exchange, with his Blackcoin teammates. To date, he still is not sure if he was invited because the event organizers confused Blackcoin with Darkcoin. Regardless, Joshua and the Blackcoin team had built up a massive Chinese following by remaining active in Chinese crypto chat rooms, and were warmly welcomed to the conference. It was not long after the conference began, however, that Joshua realized that most of the audience members didn’t really seem too interested in crypto at all. As he explained:
“This became a huge event with like 2,000 people there, who had no clue about cryptocurrencies. Nobody was walking around on the floor at all: Everyone was just sitting inside. And there were even a couple of really high profile Chinese Bitcoiners there.”
Making sense of this, Joshua realized just how far competition among crypto-exchanges went in China: Huobi was competing with OkCoin, who also had decided to host a one-year anniversary event at around the same time. Despite all appearances to the contrary, it seemed like much of the audience had been paid to attend, simply to boost numbers in a display of popularity.
Beyond the large population of un-interested attendees, Joshua used the opportunity to meet a number of prominent Bitcoin and Ethereum enthusiasts: Angel investors behind Huobi and OkCoin, as well as Li Xiao Lai, described as ‘a Bitcoin God’ in China who had played a large role in promoting Bitcoin since its early days. Not only was Li the largest investor in most Chinese crypto exchanges, but he was also interested in discussing the prospects of entering the ICO (Initial Coin Offering) space with Joshua and some of his friends. It was in Li’s office in Beijing that Joshua recollects the beginning of the ‘darker part’ of his time in crypto. Some background context may be helpful:
While crypto was developing rapidly, and a deep excitement and optimism pervaded the space, there was also a darker side that oftentimes announced itself under the guise of scams, questionable investment practices, and back door deals. Joshua ended up taking a full year and a half off from the industry, precisely because of these problems. The tipping point happened after returning from his trip to China, in the fall of 2015.
While Joshua decided to not involve himself with any ICO proposal discussed abroad on his trip to China, his close friend, David Zimbeck, continued to engage in the prospect of launching an ICO for a new product they had all been working on. Joshua sat on the sidelines and saw first hand how a solid investment plan showcased to the public could turn out to be a scandalous effort to plunder money from others. When David decided to publicly denounce the practice and effectively went public with the scam, trouble ensued: A Scottish man found David at a restaurant one day and told him: “I know where you live, work and eat, and I’ve been hired to monitor you.” His friend quickly left the country, leaving Joshua shaken and with a new perspective on the world of crypto, “After this I was like holy s**t this industry is dark.” It was time for a break.
At this point one might expect a young Joshua to have gone into more traditional programming — after all, the money is reliable, the projects can be exciting and remote work is always a possibility. Few could have imagined that Joshua would rediscover sound engineering by chance, become the highest paid sound engineer in Cambodia, and help launch a $1.1 million dollar theatre in the course of a year and a half. As crazy as it might sound, that is the truth, and reveals another major life hack of Joshua Bouw. Here is how it started:
After taking a break from Crypto, Joshua found himself with a lot of time on his hands. He describes his thinking back towards sound engineering:
“I went from studying and being told once I graduated that I would never get an opportunity in this field — and that the only thing you can do is start your own studio. Of course, I brought a bunch of my gear to Cambodia and I just thought well I don’t know what to do because nothing is going on in crypto and I gotta do something with sound engineering.”
With no clear plan, Joshua stumbled upon an opportunity by happenstance, at the opening party of a new venue called Oscars. On opening night, musicians, sponsors, and a crowd of private individuals packed the venue for the band’s introductory performance. However, they quickly ran into significant problems:
“They were having feedback issues and the band was getting mad. It sounded awful and just like trash. I was more of a studio musician but I had done some live things before and went to the owner of the bar in this crazy packed bar and restaurant — and told him that I could fix the sound system. After the first set I told the band to do a quick sound check. and everything was fine with the horrible system he had. He paid me in Jack Daniels and Coca Cola. I felt terrible because this guy was having this opening night which was supposed to be the best night that he would ever have and it was just falling apart.”
Unbeknownst to Joshua at the time, a member of the band was intending to open up a music school, host events, and grow the sound scene across Cambodia. That was the perfect, albeit unexpected, opportunity for Joshua:
“Afterwards me and the band were talking and one of the guys told me that he was opening up a music school and music store and events place. He asked me if I wanted to join him on this adventure. I said yeah sure why not. A lot of people had heard about what happened that night and a lot of people were there — owners of other bars and other venues. And suddenly everyone wanted to know who I was and everyone wanted to work with me. There were no foreign sound engineers whatsoever. So when we got started, we got contract after contract. In a short span of months we did weddings and then we were doing very large events. We even did a Disney actor turned musician — Demi Lovato. It was a crazy time.”
This was only the tip of the iceberg. After a couple of months of witnessing steady growth at the new music school and event center, Joshua was told about a new performance theatre in Cambodia — today called the Black Box Theatre in Phnom Penh. It was a project being planned, with $1.1 million dollars backing it. Joshua was asked to join the project team and handle the sound system design and implementation, including all of the equipment that was needed as well as its setup and management timeline. He didn’t hesitate. Joshua joined the team, and beyond successfully designing, implementing and launching the Theatre in 2015, he also ended up becoming the highest paid sound engineer in the country of Cambodia. Looking back on the period as a whole, Joshua said the following:
“It’s a funny thing going from helping this bar out to putting together this massive theatre. It was a fun little 1.5 year period. I accomplished everything that I wanted to do as a sound engineer and was more than ecstatic.”
A Return to Crypto: Discovering NEAR
Since Joshua’s time off from crypto in 2015, early first-generation projects continued to mature and evolve. One of them known as Ethereum launched during this time, and ultimately Joshua was attracted back into the space before the 2017 bull market:
“It made sense that everything was going to explode. It made sense that it was a new internet. It made sense what Ethereum was doing, but it didn’t make sense of putting it all on a linear chain per se.”
As per Joshua’s style, he approached Ethereum in the same way he approached Bitcoin: He applauded its efforts but quickly identified its drawbacks or vulnerabilities. This specifically centered upon scalability, and is even more prominent today:
“It kind of shows it today with transaction fees going over hundreds of dollars, that it is so congested right now. I have always been a critique of ETH 1.0 but the ETH 2.0 model always made sense to me. It also always made sense that this was something that would never come to ETH anytime soon and that is just the nature of the project and how difficult executing such an upgrade would be. The problem is that there are a lot of infrastructure changes with those upgrades, beyond time and development hours. You are essentially asking everyone that has integrated ETH 1.0 to make that jump with you and that number is so astronomical it is clear why they are trying to delay it to get the movement onto that direction.”
In the context of Ethereum 1.0 and its slow and perhaps drawn-out move to Ethereum 2.0, Joshua spent time working on other crypto-related projects as well, most notably one focused on Solar Mining. As he explained it:
“We worked very hard to get miners into people’s houses and utilize very cheap electricity sources to mine bitcoin and make it very simple for the person or average user to mine. So for example we conceptualized this block-box so to speak, it was a nice looking miner. We found there were a lot of people in the US that had access to really cheap electricity sources due to circumstances. Most of them were generating their own power and a lot of them were forced to sell their power back to the power company next to nothing. They basically said you don’t have to sell to the power company, anymore, you can turn it into a digital reward as it was called.”
Joshua worked on solar mining from the middle of 2017 to the end of 2020. While the project ended up bottlenecked in a lawsuit at a later point, Joshua still loved the idea and believed in the concept. During this period he also had smaller roles on a number of other projects notably including Eric Shciermeyer - the founder of Farmville and Zinga - on a venture known as Galla.
It was only in the middle of 2020, that Joshua discovered NEAR through his personal network. He found NEAR to be on an exciting trajectory for better developing distributed-ledger technology in a more sustainable and enduring manner. As he explains:
“NEAR was introduced to me not too long ago. It all made sense to me. I know a lot of mutual friends that are on the project and they all said hey we all just jumped on this project called NEAR and you should join us.”
Joshua currently works on the NEAR EVM Team with Arto Bendiken and Frank Braun. He is also an active member of the NEAR Cypherpunk Guild, and friend to many who sit on its council. On the topic of NEAR specifically, Joshua believes that the future of crypto is moving in and beyond the direction that NEAR is going. As he explains in detail:
“It doesn’t make sense for all of us to hold this data. Following up on ETH 1.0 and NEAR, we are running every single smart contract to validate it all. If you think about it, that is a lot of computational power being validated. With NEAR, with the sharded databases, that does alleviate a lot of it. But I don’t think it is quite the end state so to speak. I know a lot of projects are kind of experimenting with that and ETH 2.0 and ETH 2.0-like projects are interesting because you don’t need everything anymore.”
Joshua goes so far to say that the future of blockchain is to develop the blockchains themselves into a more efficient and flexible structure:
“I think that the number one thing — which is blasphemy, but if you understood the blockchain you would agree with it — is that I see the blockchain as a sewer pipe. It’s the best mechanism we have right now to get to the current state. It is something you should not have at all cause it is past history. We need to develop a better system where we do not have all of this wasteful data, and have a system where we can all agree on the current state, and the next current state, and agree on the past.”
In short, Joshua believes that blockchains are the first iteration of a technology that will eventually evolve to be handled by a collection of nodes, abstracted from a single chain. At a certain point, there will no longer be a ‘blockchain’:
“I love the idea of individuals running their own nodes and their own software by participating without having other people do it for them. NEAR definitely does keep that in its technical design.”
Crypto Today. The World Today.
It’s now March of 2021. Joshua still lives in Cambodia, married and with a child. He soon plans to move back to Canada. With more than seven years of experience under his belt, a plethora of connections and memories delving into the nooks and crannies of the crypto industry, Joshua is perhaps one of the most suited individuals to comment on the state of crypto today as it undergoes a fourth major evolution.
From the authentic and secluded early days of Blackcoin, to darker days later on, to the more popular and commercialized marketplaces of 2017, certain keys lessons have stood out to Joshua:
“It is rare to find a genuine person in the industry. There are very few builders and those are the people who you should look up to that will make the whole experience worth it. A lot of people come and go, a lot of people make a bunch of money and lose it all. As long as you stay consistent and be the builder instead of profiting on top of it, you’ll be fine. Profits come later.”
Beyond the importance of building and focusing on production as opposed to profits, Joshua is also keen to emphasize the need to look beyond pure technology characteristics to the big-picture value proposition and fundamentals of the technology:
“A lot of people say they understand the tech. No — understand the fundamentals. Why does it exist? That is really huge. A lot of people used to tell me — I don’t understand Bitcoin and everything else. I learn to describe it with the fundamentals and how it may have been an answer to a serious need and concern that remains relevant to this day.”
This belief in approaching crypto through its fundamentals has been largely informed by his experience of the enormous changes that the industry has gone through in the past eight years:
“The industry today is totally different than what it was in 2014, and 2015. In 2014 I was 22 years old when I got into this industry. And a lot of people were telling me that I don’t get it. They told me I never lived through a financial crisis or lost my home, and everyone there was mad about 2008. Almost everybody was in crypto for that. Not a lot of people were there because they had fallen out with the system. They just didn’t like it and they realized that the Fiat system was a scam. This was a better system and they really knew that from personal experience. A lot of people did not believe that I would understand that because I hadn’t gone through the experiences that they had.”
Once more, Joshua’s deep belief is that overcoming the underlying need to have a blockchain in the first place, is the next level of development for the technology:
“It is not that it is wasteful it is just pointless. The task is to figure out how to have an alternative means of verifying the current state of the network that we can all agree on. That is huge. Because the history is totally redundant and un-needed. You don’t need to have the history: You shouldn’t have to have the blockchain. We should seek alternative means to get to the current state of the network — without using the blockchain.”
The ‘Godfather of Proof of Stake’ has been consistent from his early days with Blackcoin, his original critique of Ethereum, and his understanding of the value proposition of NEAR. As he says in his own words, “Let’s bring back the ability to run nodes on a raspberry pi.” While one may believe his outlook on the future of blockchain to be invalid or far-fetched, it would be hasty to jump to conclusions. After all, if Joshua’s story has demonstrated anything — from his (short) time in high school, to launching the world’s first on-chain smart contract, to developing the sound system of the $1.1 million dollar Black Box Theatre — it is that a critical and engaged mindset can unveil many hidden and often undiscovered caveats of value. As the industry as a whole continues to mature and distributed ledgers as a general purpose technology continue to iterate and develop, we will do well to keep Joshua Bouw’s many insights in mind.