Lisk Founder On Why This Crypto Winter Is The Best In Bitcoin’s History
In March, NewsBTC sat down with Max Kordek, the founder of Lisk, to pick his brain about his project, the broader crypto and blockchain industry, and the future of Bitcoin.
The Latest On Lisk
NewsBTC: Thanks for sitting down with us. For those who don’t know Lisk, can you give us a 30 second to a one-minute explanation of your project in general?
NewsBTC: Cool. So why did Lisk decide to go with DPoS instead of PoW? Were there centralization risks?
Max: My journey in blockchain first began with the purchase of a Litecoin miner in 2012. Back then, I was living in this very small student apartment in Germany, which was only about 20 square meters. The small space made the miner run super hot, and after two months I had enough. Through this experience, I’ve started to develop a dislike against the kind of inefficiency and this waste of electricity that Proof of Work systems create. I then began to look into alternatives to mining. I stumbled across NXT, then Peercoin, the first viable Proof of Stake coin in existence, which I fell in love with. It was amazing to have a server, which cost $10 to $20 a month to maintain and run the network from. I got really active in that community. Eventually, Peercoin fell apart, mainly because they failed to establish an organization to actually push the technology forward.
After Peercoin, I found Crypti, which provided that central business pushing the protocol forward. It was also the first organization where I discovered the Delegated Proof of Stake (DPoS). However, Crypti also had its own issues with a very small team and even lower levels of funding. I decided to create something new with my partner Oliver Beddows. From the get-go, we knew it shouldn’t have anything to do with PoW. That’s how Lisk and Lightcurve came about. There are many benefits of our form of DPoS, but one of the main ones is that it is beneficial to what we specifically are building. If you want to create a blockchain platform where people can just spin up their own chains, DPoS is much easier to kickstart and safer to maintain than normal PoS. If you rely only on pure PoS, it may not be very secure, so it’s better to have delegates you can trust.
Delegates on the Lisk network know the codebase and the network through and through. Many of them build open source solutions and products, spot bugs on our Testnet, or migrate to critical releases in an extremely timely manner! It depends on what use case you want to implement, but having a secure network is what most of our stakeholders can agree on. As to centralization risks, there is a degree of fluidity to our network with some individuals entering and falling out of the delegated 101. We’ve also recently opened up the Lisk Improvement Proposals where both Lightcurve and community authors can submit their own proposals for how to make our consensus algorithm even better.
NewsBTC: With DPoS, EOS enlists 21 delegates and Ark, 51 delegates. So how did you come with the 101 delegate number?
Max: Dan Larimer runs EOS. Before EOS he ran Steemit and Bitshares, which utilized 101 delegates. We took the same number, which both he and Charles Hoskinson used back in the day, because it is a good balance between centralization and decentralization. 21 delegates are too few. Sure, the network is high-performance, but 21 entities controlling the network could be dangerous. 500 or 1,000, on the other hand, is too much, as such a number of delegates would cause too many inefficiencies in the network. So to put it simply, for us 101 delegates sits right in the sweet spot of the number of nodes necessary to move our blockchain forward, while the odd number gets rid of the ties by ensuring there’s always a majority on the network.
NewsBTC: What’s your vision for Lisk Academy? Do you guys want to spark adoption through education?
Max: Even after the bull market of 2017, only a few people on the street know what Bitcoin is, let alone the underlying technology of blockchain. We need to educate those who have the power to interact with blockchain, whether its building or investing. Right now, it’s not even about Lisk, but just blockchain as a technology. The next step is accessibility, meaning that we should ramp down the complexity of the blockchain ecosystem to aid the user experience. Once you educate people and they have access to the ecosystem, then you onboard them onto projects like Lisk and our SDK.
This is why we don’t attend as many conferences as Token2049 anymore. It sounds a bit bad, but we don’t want to constantly be in this kind of a crypto bubble. We need people from outside of the industry to enter. But they won’t enter without education. We just need to have a go-to place for people to learn about blockchain and Lisk. We also provide educational marketing content and documentation for developers wanting to take the next step and experiment with our technology.
Kordek’s Thoughts On The Crypto Industry
NewsBTC: So do you think that education is the one thing holding back crypto adoption right now?
Max: I think many things are holding it back currently. One is definitely education. If we just don’t know or understand what it is, we won’t adopt it. Right now we need builders, who harness this technology to come up with viable use cases. And they, of course, need to know how this technology works. My mother doesn’t need to know about blockchain. But my developer colleagues who actually have the power to build need to know the ins and outs of not only blockchain technology, but also blockchain building and everything else needed to get them coding. Another problem is use cases. People still ask, ‘what can we really achieve with this technology?’ People have no clue yet. Building on Ethereum is tough right now, but it’s the best experience in the industry by far. It isn’t optimal, so we need much better tooling and use case inspiration for developers. That, in my opinion, is why adoption has been pretty much slow.
NewsBTC: What is your end vision for this ecosystem? Do you see a world where everything is based on these technologies?
Max: I don’t think that everything will be based on blockchain. Yesterday I was on a panel discussion covering a very interesting topic — Web 3.0. It was said that blockchain is one technological level above texting (Web 3.0 v.s. 2.0). The Internet as a whole still has Web 1.0 applications, including simple internet pages and so on. Those don’t go away. And why should they? We have Web 2.0 pages, like Facebook, Twitter, etc. They will not disappear because of blockchain. So not everything will be run on blockchain, but there are quite a few processes that can be optimized with this technology. I’m a strong advocate for sure, but I just don’t see it as the golden technology that will disrupt absolutely everything. Right now, we don’t even have one use case that has reached 100,000 daily active users. Facebook, on the other hand, has one billion active users. So in the end, I see a world where blockchain really helps people in very specific industries and solutions.
NewsBTC: So you’re saying that I guess there have been there’s been very little adoption right now, but what’s one application for one use case that you think has a lot of potential?
Max: Right now, we’re still heavy in the R&D regarding which use case will be most suitable for our technology. One industry we want to start off with is definitely gaming. That’s an obvious use case right there, given opportunities for tokenization and so forth. Governmental work like notarization or traveling documentation is a pain right now that could easily be improved by blockchain. These processes can be optimized with a digital identity system that automatically checks you and is stored on the blockchain for secure and cross-border access. There are many use cases out there. In the end, we are creating technology that is customizable and scalable enough to allow many of these to be explored.
NewsBTC: How has this bear market been compared to ones seen previously?
Max: The previous ones were much worse. Bitcoin went from like $1,000 to $150, and people were saying that you should pack your bags and say your goodbyes. At that time, there was no development happening. There weren’t these global conference chains with thousands of attendees. It was really dark on Reddit. And now, we’re potentially just coming out of another crypto winter, but there are 20 to 30 meetups happening in Hong Kong this week, even more across the world. If you go on our GitHub, subscribe to Crypto Twitter, or check out big crypto publications, you can see there’s a wide range of activity going on amongst the projects that survived this crash.
There’s so much that is happening. There’s seriously much more development than any other point in blockchain’s history. So for me, the ones before were much worse economics-wise, activity-wise, and sentiment-wise. The thing is, we are patient because we see a big future ahead of this technology. This is just part of normal market cycles. The companies are getting more serious, and the first iterations of products are beginning to pop up. For example, we’re about to release our Alpha SDK, the first version of our blockchain-building toolkit that will allow developers to create proof-of-concept applications aligned with our codebase.
NewsBTC: Do you think that the crypto market is oversaturated at the moment?
Max: Well, I made my own altcoin, so it’s very hard to comment on that one. What I think is that the market overall regulates itself, especially when it feels oversaturated. You see crypto assets that are dropping lower and lower on CMC, as they have no activity, no trading volume, and that’s totally fine by me. That’s a sign that it’s oversaturated. And I assume that is why projects are dying as the market stabilizes and matures. There’s still potential for thousands and thousands more crypto assets and projects around them. I just want to see projects with an actual use case and a true focus on development. In our case, Lisk will be used for registering a sidechain. In Ethereum’s case, it can be used for smart contract execution. But why do all these other apps need a token? Status, for example, a messenger project, doesn’t really need a token. I have not looked into it in-depth, but that raises a question mark. So yeah, I think it’s saturated, but it’s regulating itself in time and legitimate technology with a good business backing stays afloat.
NewsBTC: How has the Lisk team been doing in this market cycle?
Max: Lisk is always progressing at a sustainable pace. The technology is going forward as I mentioned before with the upcoming release of our Alpha SDK. Things on the business side are playing support to the constant development – we were lucky enough to have a professionalized financial team to help us diversify our holdings. This gave us a healthy balance of fiat and crypto, which resulted in extra stability throughout this bear market. We’re also continuing to grow our business and fostering a global developer community. Our community members actually started physical developer spaces across the globe, including the Netherlands, Japan, and China. There’s a lot of activity happening on GitHub and real life!
The Future Of Bitcoin
NewsBTC: How do you expect for the crypto market to play out over 2019?
Max: I really have no idea. It could go up or down. But right now, it seems to be stabilizing very slowly. Eventually, though, there could be another, let’s call it, wick lower. I assume personally that it will continue to go up towards the end of next year. In 1.5 years is the Bitcoin halving, so the market could go up because of that. But I don’t care really. It’s not only about the money.
NewsBTC: What do you see Bitcoin as? Is it an SoV, MoE, or anything else?
Max: I think of it mainly as a store of value with complete independence of any other market. That means you can just fill up your portfolio with 1% to 2% with it, and it can act as a secure investment next to gold. I also tend to see it as a means of exchange, I bought some stuff online with BTC recently. Yesterday, I went to the Lotus Bar in Hong Kong, which accepts Bitcoin. It’s a nice thing, but I’m not going to go there every time just to use BTC. So in end, it’s more of a store of value. It’s important to add that I also see it as a stepping stone for blockchain technology overall. It may not be the most scalable, but it’s inspiring. It may not be a world currency, but it should become a means of exchange in one way or another.
NewsBTC: What do you think of the whole JP Morgan Coin or FBCoin? Do you like what they bring to the table?
Max: I know many many people who hate Mark Zuckerberg in the industry, but it’s important to remember Facebook is a tech company at the end of the day. When your company grows as large as Facebook did, it’s hard to stay true to your original ethos. Many things can go wrong. And maybe Facebook had many things go wrong this year, but it isn’t the fault of Mark Zuckerberg alone. I still think Zuckerberg has the best things in mind. I see FBCoin as an interesting concept. I’m not too sure how scalable it will be, as WhatsApp or Facebook itself has billions of users. But why not? I think it will be pretty cool, no matter if it’s decentralized, centralized, etc. As long as it uses blockchain technology, that is exactly what we want and need. JP Morgan Coin, on the other hand, is something I hate. First, they say Bitcoin is a scam, then they were revealed to have participated in the Bitcoin market, and then they suddenly come up with their own coin. At the end of the day, JP Morgan isn’t a technology company, so they shouldn’t do that. This project is just for their monetary gain. They should stick with the old economy and do their crap there. They don’t really belong here.
NewsBTC: It’s my final question. Can crypto succeed without institutional involvement, like investments from those on Wall Street?
Max: Yeah definitely. I think people are more powerful than institutions. With blockchain and Bitcoin, we’re going towards true peer-to-peer transactions and exchanges. On a global scale, this will be much more powerful than any institution in the world. Still, financial institutions are great leverage, as they can give people the power to make this whole movement. We can utilize those institutions, but we don’t need them in the end.
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