Control - Issue #6
I've recently heard from many who are confused by the recent cryptotoken excitement as it relates to Bitcoin. This is understandable and I wanted to quickly share my thoughts.
My belief is that Bitcoin adoption will continue like it always has. What's changed is that practical innovation is now happening much more quickly on other blockchains because of the risk averse nature of the Bitcoin devs. Bitcoin is a digital asset with a market value of $10B that millions of people around the world rely on. The core devs are prudent in their risk aversion.
The risk aversion means that innovation in Bitcoin is now mostly academic (see projects like Mimblewimble) while innovation on other blockchains is mostly practical (see Ethereum, Zcash, and Steem). Practical innovation is crucial for progress, though it's riskier (as we've seen with failures like The DAO).
So with that, here's a Q&A with the founder of one of the most interesting projects to launch this year...
A discussion with Julian Zawistowski, founder of the Golem Project
The Golem Project, which aims to build a p2p network for computing power (think a decentralized Airbnb for computing power), recently published the first draft of its whitepaper and solicited public feedback. I was intrigued by their transparent approach and the fact that they already have an alpha version running, so I sat down with Founder/CEO Julian Zawistowski to learn more about him and the plans for the project.
Here's our discussion:
What is your background and what inspired you to launch Golem?
I am an economist and entrepreneur. I have been fascinated by the potential of decentralized computing for a very long time. Back in the late nineties I was running a SETI@home on my Pentium 90 all the time. Years later, when I moved into the professional software industry, I realized that a lot of the problems I was looking at could be successfully dealt with via the use of a decent peer-to-peer computing platform.
When we found out about the Ethereum blockchain in early 2014, we realized that you could use it as a transaction layer to create a full-on market for computing power.
What are the core technical problems that you are solving for developers?
First, what we’re creating is a platform to buy and sell computing power. If you look at the last 10-20 years’ of progress in virtualization, it’s obvious that setting up any kind of environment in a datacenter or on an individual computer has become much easier. But when it comes to actually renting the hardware, it still tends still to be painful: comparing the offerings of different providers is complicated, and it takes quite a bit of time and expertise to figure out the best solution for a given task. Then of course, deploying the task also needs some technical proficiency. This is likely due to the huge asymmetry of information in what is effectively an oligopolistic market.
And it’s not only the biggest cloud service providers who take advantage of that – if you think about rendering farms using AWS as a backend, what they are doing is in fact a kind of arbitrage facilitated by a more friendly user experience.
Golem also aims to combine this market for computing power with a market for software, allowing every developer to integrate with it and set up his or her own reward scheme.That makes Golem a channel to monetize software both for established software companies and independent developers. We believe that this will be key to the long-term success, because any computer is only as useful as the software you can run on it.
Did you consider traditional venture funding? Why did you choose to do a public crowdsale rather than a venture raise?
The shortest answer is that it is substantially beneficial to us to crowdfund rather than raise traditional equity. To have a “crowd” who is rooting for you really increases the reach of what you are trying to do. Yet this is only a part of the story.
The truth is that we had some early discussions with investors, but we have realized that crowdfunding would be an option even if we have an investor, and for sure our valuation will increase if we are already successfully financed this way. What’s more, the project has to be open source. After all, what we are doing is not exactly Airbnb for computers, but rather technology which makes Airbnb for computers possible - and crowdfunding is the best way to make that open-source model viable.
Why did you set $10M as the cap for the raise?
When you realize that it is very difficult (if even possible, at all) to do the second round of financing in crowdfunding setup, it seems reasonable to raise enough to last for many years. If it was indeed possible to do a crowdfund in rounds, then most likely we would raise less, define the project with a timeline of a year (not four years), and push the first milestone only. Still, we want the first release version to be delivered much sooner than in four years – the ETA for the release of Brass Golem (focused on CGI rendering) is 6 months out.
Ethereum is described as a “worldwide computer” that developers can run decentralized apps on and Golem similarly describes itself as a “worldwide computer” that developers can run decentralized apps on. To the lay person, it may seem like Ethereum and Golem are competing. Are Golem and Ethereum competitors or complements?
Golem definitely complements Ethereum (or Ethereum complements Golem, depends on the perspective). What Golem does is exactly the opposite of Ethereum.
In the Ethereum network, every node does (with some simplification) exactly the same computation. The larger the Ethereum network is, the more secure it becomes, but the size of the network does not translate directly into greater capabilities. In the Golem network, every node does something different. And the more nodes you have, the more you can do with Golem.
Yet we must give credit where it is due: Golem is possible thanks to Ethereum. A decentralized system needs a decentralized layer for transactions, reputation, and identity – and this is what we are going to use Ethereum for.
The first use case that is running on testnet is CGI rendering. Why would one want to use Golem for CGI rendering rather than using existing CGI rendering solutions?
The main driver will be price, and the ability to act as both a “requestor” and a “provider”, depending on the current needs. For CGI rendering, using Golem might be both efficient and cost-effective, compared to traditional solutions.
We have actually researched this,and our results are very promising, you can see it here. It should also go without saying that ease of use should be a factor.
What are some long-term use cases of Golem that you're excited about?
We’re really excited about advancing Golem to the point where it is not just for compute-intensive tasks. We want to see it become a major computing element of a more decentralized internet, creating a valid alternative to the kinds of services presently offered by cloud providers.
This will of course require big leap from where we are now, but it is definitely within the reach of the technology we are going to build. Keep an eye out for our blog posts about Microservices on Golem, coming soon.
Required reading for the week
Barack Obama: Now Is the Greatest Time to Be Alive — www.wired.com
No mention of bitcoin/blockchain, but easy to see it fits perfectly into 2 of the major challenges mentioned (economic inequality and cybersecurity).
The Coen Brothers Are Writing a Movie About the Deep Web — exclaim.ca
The filmmakers behind hits like No Country For Old Men and Big Lebowski are making a movie about Silk Road, which is likely to shine some mainstream attention on digital currencies (for better or for worse).
Bitcoin’s Lightning Network Takes a Big Step Toward Interoperability
The Lightning Network seems to be (slowly) moving forward.
The future: where borrowing is the norm and ownership is luxury | The Guardian
Sharing economy 3.0 is turning any idle asset into a productive piece of capital, and blockchain projects like Golem are at the forefront.