Ethsimple: Ethereum Tools with Brian Soule
Feb 15, 2019
Show notes
Ethereum allows developers to run decentralized applications. But the tooling for building and managing those decentralized applications is immature. Experienced software engineers have difficulty getting started with writing Ethereum applications because the stack of tools is so unfamiliar and different than traditional software tools.
Whether or not Ethereum itself succeeds, developers in the future will probably be building some decentralized apps. We will be treating money as a first-class citizen and architecting software that transfers financial value as easily as we transmit JavaScript today. “Web3” will be a world in which many more software applications will be possible.
As we move towards Web3, many new tools will be built. Web2 was the result of Ruby on Rails, Amazon Web Services, the iPhone, and other software tools that made it easier to deploy web servers and consume Internet services. In the world of Web2, we saw the birth of Airbnb, Uber, and Netflix. In the world of Web3, we will see new types of gig economy apps, sharing economy platforms, and social networks. These new applications will arrive gradually as the tooling improves, and makes it easier for developers to hack together businesses and side projects built on cryptocurrencies.
Brian Soule is the founder or Ethsimple, a company that makes tools for Ethereum developers. Brian joins the show to talk about the state of cryptocurrencies, the tooling that developers have access to, and his company Ethsimple.
We cover high-level ideas, such as Bitcoin maximalism and also talk about some more technical areas of the Ethereum ecosystem, such as the Ethereum Name Service.
Bitcoin Payment Channels with Alex Bosworth
Dec 05, 2018
Show notes
The Bitcoin main chain is a large distributed ledger of transactions. Bitcoin is useful for maintaining a trusted record of payments, but is not practical for small day-to-day payments.
Bitcoin payment channels allow users to issue small payments to each other without paying the high transaction cost and latency of going through the main chain. When payment channels are connected to each other, a “lightning network” is formed. Lightning network is often referred to as a “second layer” scalability solution.
Alex Bosworth is a lightning infrastructure lead at Lightning Labs, a company that builds infrastructure for scaling blockchains. In today’s show, Alex explains how Bitcoin payment channels work, and provides some context on how developed the modern infrastructure is in terms of practical use cases for Bitcoin.
Parity: Blockchain Infrastructure with Gavin Wood
Nov 26, 2018
Show notes
Parity is a company that builds blockchain infrastructure. Parity has built several open source projects and works with enterprises to put blockchain technology in production. Gavin Wood is the founder of Parity, and he joins the show to talk about the state of blockchain technology and what his company is currently focused on. Four years ago, Gavin helped start the Ethereum project, so he has lots of context on decentralized technology.
Gavin envisions a world with many different blockchains for many different use cases. These blockchains will interact with each other to enable trusted relationships between parties. One project that Parity has created is Substrate, a technology that allows developers to quickly stand up a blockchain with the right privacy level. Another project is Polkadot, which allows blockchains to connect and interoperate with each other.
Gavin and I discussed why the world needs a variety of blockchains–and whether all of these different blockchains should need their own cryptocurrency. Gavin described the use case of blockchains for mediating supply chain trust. We also talked about the technologies used to build these projects, including WebAssembly and Rust.
Blockchain Distribution Network with Aleksandar Kuzmanovic
Oct 26, 2018
Show notes
Cryptocurrencies are not very usable today. The main use cases for cryptocurrencies today are store of value (somewhat like gold) and speculation. One reason that the use cases are so narrow is the problem of scalability. Cryptocurrencies have several scalability bottlenecks.
Think about the Internet in 1994. The consumer sitting at home with a dial-up modem was bottlenecked on bandwidth between their home and the broader network. The physical network connections between our homes and Internet company servers were much lower bandwidth than we have today. The servers at companies such as AOL were slow and expensive.
The Internet scalability problems were incrementally solved, one by one. Different solutions to different scalability problems emerged in an iterative, frothy process. Then, all of a sudden, you are sitting on an airplane watching YouTube videos on a smartphone.
Watching YouTube videos on a smartphone would have sounded unbelievable to someone in 1994, much like sending someone a penny across the Internet is unbelievable today. If you want to send a penny across the world today, you will probably have to pay several dollars worth of transaction costs.
Someday, you will be able to use cryptocurrency to send 1 penny to someone in another continent halfway around the world. The transaction fee you pay will be a fraction of a penny. This removal of financial friction due to transaction costs will change global economics.
What stands between modern cryptocurrencies and that beautiful future world of micropayments? A large set of scalability problems, similar to the scalability problems of the consumer Internet in 1994. In today’s show, we focus on one particular issue of scalability: block propagation time.
Cryptocurrency transactions are verified by miners. On the Bitcoin blockchain, a set of transactions gets verified roughly every 10 minutes. These transactions represent a “block” on the blockchain. The miner who solves the cryptographic puzzle associated with the transactions in that block receives payment in the form of a block reward and the transaction fees that are associated with those transactions.
When you issue a transaction to the Bitcoin network, your transaction sits in the mempool, a list of pending transactions that have not been confirmed by the mining process yet. Miners around the world are simultaneously competing with each other to find a solution to a pending set of transactions sitting in this mempool. When a miner includes your transaction in a block, and the miner discovers a solution to that block, your transaction will probably be accepted into the blockchain.
The reason that your transaction is not guaranteed to be accepted is due to a time period known as “block propagation time”. Block propagation time is the time it takes for a confirmed block of transactions to make its way through a blockchain network. If two blocks are solved at nearly the same time by different miners, the winner of the current block reward will be the miner whose block manages to propagate through the network the fastest.
BloxRoute Labs is a company that is developing a blockchain distribution network (BDN). Much like a CDN pushes media files out to the edges of the web to make them faster to access, a BDN pushes out information to miners in the network. Of course, this means that the BDN could potentially be centralized infrastructure. In order to make the BDN effectively decentralized and trustworthy, BloxRoute claims to have a provably trustable network protocol, to go with its token-based incentive system that keeps its goals aligned with that of the larger blockchain world.
Aleksander Kuzmanovic is the founder of BloxRoute Labs, as well as a professor of computer science at Northwestern University. His co-founders of BloxRoute include former guests of the show Emin Gun Sirer and Soumya Basu. The BloxRoute founders have a strong theoretical background and a great reputation in the cryptocurrency community, unlike the vast majority of founders who have issued a token.
As we have heard in previous episodes, most of the founders of companies that issue tokens cannot give a good explanation for why their protocol needs a token. Tokens are a great idea that have mostly been applied as a mechanism to get rich quickly. However, BloxRoute has a credible explanation for their token, and I asked some very pointed questions to Aleksander in today’s episode to try to vet the project for legitimacy, and his reasoning made sense.
Casa: Crypto Wallet Security with Jameson Lopp
Aug 15, 2018
Show notes
Cryptocurrency security is a concern to anyone who has a significant amount of money in the form of Bitcoin, Ethereum, or other crypto assets. Most Bitcoin is held in either a Bitcoin wallet or a Bitcoin bank.
Your Bitcoin holdings are recorded on a public ledger. You access these holdings by authenticating with your private key. A Bitcoin wallet could be described more accurately as a Bitcoin keyring. Securing your Bitcoin wallet is about securing that private key. Just as there are many different ways to secure any individual piece of text, there are many ways to secure a Bitcoin private key.
A Bitcoin “bank” is a term that can be used to describe institutions such as Coinbase. Coinbase takes the technology of the Bitcoin wallet and wraps it in additional layers of security, identity, and failover that we associate with banks and large technology companies.
By using a Bitcoin bank, you sacrifice the autonomy of managing your own private key. On the bright side, you don’t have to manage your own private key. If you lose your Coinbase password, there are plenty of ways to recover it. A Bitcoin bank gives you the downsides and the upsides of working with a centralized service provider.
Jameson Lopp is a cypherpunk and cryptocurrency engineer at Casa. Casa is a company that is building long-term cryptocurrency storage and secure key infrastructure. In this episode, we explore how Bitcoin wallets work, how to secure them, the common threats, scams and hacking attempts of Bitcoin, and what he is working on at Casa.
Transcript
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Token Types with Felipe Pereira
Aug 02, 2018
Show notes
A token is a unit of virtual currency. Most tokens are built on a blockchain-based cryptocurrency platform, such as Ethereum. Building on top of a platform like Ethereum allows these tokens to form their own financial ecosystem while leveraging the scale of an existing currency.
Tokens became highly popular in early 2018, with the boom in ICOs–initial coin offerings. Many of these coins offer a value proposition of a “utility token.” The idea of a utility token is that the token is necessary to transact in a particular ecosystem. If Amazon were to require you to convert US dollars to Amazon coins in order to buy items on Amazon, the Amazon coin would be a “utility token.” There are many different kinds of utility token schemes, and time will tell if this model makes sense for the cryptocurrency investment landscape.
Another type of token is the “security token,” in which a token represents a share in an organization. This token type is more like a stock, or bond, or certificate of ownership of a financial instrument. These types of tokens also have their share of criticism. If I start a company, most of my assets are not represented on a blockchain–the assets are things like hiring contracts, intellectual property, real estate, etc. The legal ownership of these assets is settled by a complicated legal system which has no notion of a blockchain. It’s unclear how the claims of a security token today would be enforced–or why a security token is presently a better option for raising capital than traditional equity or debt instruments.
Felipe Pereira is the author of “On the immaturity of tokenized value capture mechanisms,” a Medium article in which he documents different types of token systems, including several flavors of utility tokens and security tokens. He’s also the co-founder at a company called Paratii. He joins the show to discuss the present viability of token-based systems–and what blockchains have actually proven to be useful for today.
Transcript
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“Bots” are becoming increasingly relevant to our everyday interactions with technology. A bot sometimes mediates the interactions of two people. Examples of bots include automated reply systems, intelligent chat bots, classification systems, and prediction machines. These systems are often powered by machine learning systems that are black boxes to the user.
Today’s guest Rob May argues that these systems should be auditable and accountable, and that using a blockchain-based identity system for bots is a viable solution to the machine learning auditability problem.
Rob is the CEO of Talla, a knowledge base provider for business teams. The Botchain project was spun out of Talla as a solution to the problem of bot identity.
In this episode, we talk about Botchain and the application of blockchain to bot identity, the current state of ICOs, and the viability of utility token ecosystems. Botchain has its own cryptotoken called “Botcoin.”
Transcript
Transcript provided by We Edit Podcasts. Software Engineering Daily listeners can go to weeditpodcasts.com/sed to get 20% off the first two months of audio editing and transcription services. Thanks to We Edit Podcasts for partnering with SE Daily. Please click here to view this show’s transcript.
Bitcoin Lightning Network with Jameson Lopp
Jun 11, 2018
Show notes
Big blocks or small blocks: this is the fundamental question of Bitcoin scalability.
The argument for big blocks is also known as “on-chain scalability.” Under this strategy, each block in the append-only chain of Bitcoin transaction blocks would grow in size to be able to support lower transaction fees and higher on-chain throughput. A set of Bitcoin users who supported this idea forked Bitcoin to create Bitcoin Cash, a version of Bitcoin that has a larger block size.
The argument for small blocks asserts that scaling Bitcoin does not require a larger block size. Under this model, the scaling demands of the Bitcoin blockchain would be handled by a lightning network. A lightning network is a network of person-to-person payment channels that only reconcile with the Bitcoin blockchain to checkpoint batches of transactions. These payment channels can be connected together to form the “lightning network.”
Lightning network is hard to implement. Implementing a lightning network requires solving real-world distributed systems problems that are unprecedented. It’s much more complicated than deploying a blockchain with larger block size.
In addition, opponents of lightning networks suggest that this will lead to a centralized banking system being constructed on top of Bitcoin.
Opponents of lightning networks fear that instead of a decentralized payments network, the world with lightning network will be a lower cost version of the present financial system, in which JP Morgan and Blockstream partner up to battle Coinbase in a centralized war for control of the unbanked.
These big blockers argue that the new banks on the lightning network will be just like the old banks–censorious of transactions and held in the domineering palms of the global financial kleptocracy.
So why bother with the lightning network approach? Why are we building this inelegant, kludgey system of off-chain, potentially centralized banking 2.0 complexity? Why not just increase the block size indefinitely and keep things simple? And even if we increased the block size today, couldn’t we still deploy lightning network in the future while appeasing the transaction volume of today?
One major reason is that growing the block size does have a cost. The bigger the block size, the more demands it places on any node that wants to maintain a record of those blocks. And if you grow the block size today, you forego the experiment of seeing whether a small block size plus lightning network could in itself handle the transaction volume of a global financial system.
The framing of “big blockers versus small blockers” is a conveniently polarized reduction of a much more granular reality. To believe that there is no subtlety between the two sides of this debate is to underestimate the number of dimensions to this argument. It’s an unfortunate side effect of rigidly programmed Twitter bots, and a political atmosphere in which your lines in the sand are demarcated by which subreddit you choose to affiliate with.
That said–my impression is that the more experienced engineers are overwhelmingly on the side of small blocks plus lightning network as the most promising approach to scaling Bitcoin. Take whatever side of the debate you want. A single line of Bitcoin core code speaks much louder than an avalanche of tweets.
In today’s episode, Jameson Lopp joins the show to explain why lightning network is an appealing engineering construct. We play the devil’s advocate and contrast lightning network with a big block approach, as well as a big block plus lightning network approach. Jameson also describes his experience working within the Ethereum ecosystem and gives a sober explanation of some of the issues that Ethereum scalers may themselves encounter.
Errata: a previous version of this post used an incorrect definition of “sidechain.” Sidechains are not directly related to lightning network.
Transcript
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Scaling Ethereum with Raul Jordan and Preston Van Loon
Jun 01, 2018
Show notes
Cryptocurrency infrastructure is a new form of software. Thousands of developers are submitting transactions to Bitcoin and Ethereum, and this transaction volume tests the scalability of current blockchain implementations. The bottlenecks in scalability lead to slow transaction times and high fees.
Over the last twenty years, engineers have learned how to scale databases. We’ve learned how to scale Internet applications like e-commerce stores and online games. It’s easy to forget, but there was a time when those systems didn’t perform well either.
Scaling a blockchain is different than scaling a relational database or a microservices infrastructure. Blockchains are peer-to-peer databases with an append only ledger shared by thousands of nodes. With different scalability solutions, there are tradeoffs between decentralization, scalability, and security. As an example, in Bitcoin, the core developers are working towards the deployment and adoption of the lightning networks. Some would argue that this approach favors scalability over decentralization.
Today’s show is about scaling Ethereum. Raul Jordan and Preston Van Loon are developers who are part of Prysmatic Labs, a team building a sharding implementation for the Go Ethereum client. In this episode, we discuss Ethereum’s approaches to scaling, including sharding and Plasma.
Transcript
Transcript provided by We Edit Podcasts. Software Engineering Daily listeners can go to weeditpodcasts.com/sed to get 20% off the first two months of audio editing and transcription services. Thanks to We Edit Podcasts for partnering with SE Daily. Please click here to view this show’s transcript.
Epicenter Cryptocurrencies with Brian Fabian Crain
Apr 30, 2018
Show notes
Podcasting about cryptocurrencies is a strange occupation. You get emails all the time from companies doing a token sale that you would never want to be affiliated with. You get angry tweets from anonymous Twitter accounts that are on one side of the Bitcoin scaling debate. You get to interview extreme personalities, and the technical discussions can be highly educational.
Brian Fabian Crain started the Epicenter podcast four years ago. Podcasting about cryptocurrencies allows a podcaster to report on a wide range of areas: economics, software, philosophy–and the stories within the blockchain world itself. Epicenter is one of my favorite podcasts about cryptocurrencies because Brian is always prepared enough to ask sophisticated questions.
In this episode, we talked about ICOs–when does an ICO make sense? It seems that many token economies could function just as well without a token involved. We discussed the scaling approaches of Bitcoin and Ethereum–why are these two blockchains taking very different approaches to their scaling plans? And we talked about Chorus, the company that Brian founded to build infrastructure for proof-of-stake cryptocurrencies.
I enjoyed talking to Brian about all these different subjects, and look forward to having him on again in the future.
Transcript
Transcript provided by We Edit Podcasts. Software Engineering Daily listeners can go to weeditpodcasts.com/sed to get 20% off the first two months of audio editing and transcription services. Thanks to We Edit Podcasts for partnering with SE Daily. Please click here to view this show’s transcript.
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Cryptocurrency infrastructure is a new form of software. Thousands of developers are submitting transactions to Bitcoin and Ethereum, and this transaction volume tests the scalability of current blockchain implementations. The bottlenecks in scalability lead to slow transaction times and high fees. 
