ERP022 - Blockchain Update w/ Alex Sterk

Welcome to Evolve Radio where we explore the evolution of business and technology. On the podcast today, we have a returning guest, Alex Stirk, who returns to give us an update on what's happening in the blockchain industry. It's been a busy year for the maturity of that entire industry with lots of news and changes surrounding both Bitcoin and Ethereum and a bunch of other segments of the blockchain industry. So we talk about the growth of the alt coins and some of the forking of the Bitcoin and Ethereum networks. And also Alex gives us an update on a project he's working on called Ubic, which runs on the Ethereum platform. Alex is pretty focused on the technical end of this space and uses a few terms that people may not be familiar with. I asked a couple of questions along the way to help clarify some things. One that I didn't clarify towards the end of the podcast is what he refers to as Segwit, which is the segregated witness. Segwit is a technology to help Bitcoin scale without increasing the blockchain size. Now let's take it over to Alex. Today's podcast, I'm joined by Alex Stirk, who is the co-founder of Ubic. And the host of Block Talk. Thanks for coming on, Alex. Hey, thanks for having me on again. It was a pleasure. So it's been a while since we've talked and before we started recording. You were saying that it's been six, seven months or so and that's basically six years. In the equivalent of the blockchain space, so if you want to give us maybe a quick update on what you see is is happening in the market. Both Ethereum and a little bit on Bitcoin. And how things are are shaping up in in the the whole blockchain space. Yeah, yeah, so like right now everyone's kind of talking about this decision time. For um Bitcoin, so there's really just like some new options on the market for it. Like different clients. Um the main one being from core, which is kind of like the really where a lot of the good devs are. They have a very big and well-established team, lots of expertise. And then there is Bitcoin unlimited, which um has I guess. They have some developers, they've put together a client and uh they have a lot of. I don't know, interesting ideas for where they think Bitcoin should go. Um but it definitely doesn't fit within I think the consensus, but um they have a lot of money. Uh which is kind of an interesting I guess attack factor here of uh um having a lot of Bitcoin. And then being able to control Bitcoin. And then also uh doing things like marketing. Uh like uh they definitely have a large marketing budget, like they're in control of bitcoin.com. So it's really just kind of like two sides and it's not that they don't disagree. With uh you know, what Bitcoin looks like in 10 or 15 years. It just they disagree on the order of steps that takes to get there. So um these all this talk of hard forks is kind of uh why we're seeing a little bit of a pullback in the market. But it's kind of just seasonally I think uh ready for Bitcoin. Yeah, and there was a big run up recently too. Um my my sort of thought on this was that there was a lot of influence from international markets. Uh the crisis in Venezuela and also India changed how they uh they allow what bank notes to be released. And a lot of a lot of people in some outside countries around the world really flocked to to Bitcoin. And uh there was um probably some speculation happening as well. But there was a pretty good run up over the last maybe three months or so. Yeah, like there's definitely a lot of factors. I'd say like India is probably one of the best ones to mention. Because uh they kind of basically they outlawed like uh certain denominations of bills. And they were not prepared for it. Like uh they kind of just made a rash decision and they had no infrastructure. For people to continue commerce, so like we got lineups at banks and stuff. So yeah, they had a a very large premium there. I think it was almost up to $200 or so. But then we just have like instability in the um in the political world. You know, we we have the the big guy in the White House now. And um uh like the old adage here for gold is like uh gold was backed by the broken promises of politicians. Well like when you you have a a master salesman like Trump in the office. Uh I think uh there's a lot of broken promises that are kind of coming to light right now, whether it's, you know, purely him. Or just kind of, you know, instability around the world. Yeah, and the Ethereum as well. I felt like there was a ton of hype and a lot of a lot of hope. The Dow kind of derailed. Some of that that hype. Um and it's been a little quieter on the Ethereum front. There's still lots of activity, lots of projects that are starting. But we don't tend to hear as much sort of fanfare from Ethereum. Can you maybe chat a bit about the the Ethereum space as well? Yeah, I'm not sure where uh you're listening. Cuz I always hear about Ethereum. Um like Ethereum today is worth what Bitcoin was worth in 2015. I think and even more now. Um I'd have to check the current price. But uh um yeah, like we kind of saw the the Dow. Which was like their attempt at starting this, you know, crazy idea of a company with no goals or anything. For the company and just to kind of prove a concept. They didn't cap it, so it ended up having about $150 million. In ether in it and uh someone found an exploit. Um and they were able to start draining the fund and they basically had like about a month. To kind of figure out what they were going to do before the hacker could actually like send the funds away from a contract. To something like an exchange. So they were working on a bunch of different uh ways to kind of uh stop it, like soft forks and whatnot. And uh they eventually decided uh the only option was a hard fork. To basically undo the contract and allow everyone to get fully refunded. But it was rather contentious. Like it was seen almost like a bailout. And uh as a result, we saw Ethereum split into two networks. The second the original one being Ethereum classic that still has the Dow hacker. Uh event um taking place. So it's kind of like a, you know, a split universe of some sort. And uh yeah, now we've kind of settled down a little bit, like Ethereum classic is still a fairly sizable coin. Like and like I'm not saying it's not useful. They now have like uh two different development teams that have taken upon themselves to continue development while the uh official Ethereum team. Is still supporting uh the new chain that forked off. And um yeah, the that's kind of where it's at right now. Um and I guess now they're they're they're this year they've kind of tried to start saving face a bit. Um because that whole endeavor is looking almost kind of like Silk Road was for Bitcoin. It's just kind of like a little bit of a scar on the Ethereum brand. So now we're seeing um a big marketing push to kind of get enterprises uh excited again. Uh with the Ethereum Enterprise Alliance. Which I think is basically like uh very similar to R3. Just a lot of guys are kind of buying into it to learn more about how they can build out. And uh yeah, that's uh that's essentially where they stand right now. Like uh that's I think where a lot of the run up in price is coming from. So there's a a common theme here between both Ethereum and Bitcoin that there's the hard forks happening. And there's you mentioned there's a bit more of a resurgence of the alt coins now. Uh do you see see that as instability in the market? Or that they're, you know, the market is competing with itself in some way or do you see this as as a more natural evolution of how things should go and why? Well, I'll say overall cryptocurrency as a whole, uh like taking into account to a lot of the major projects. It's not shrinking. Um I checked it a couple weeks ago, it was uh I think 200 when you compare it against the S&P 500. So worth about as much as Kellogg's. So your morning breakfast uh is worth more than I guess a decentralized governance platform for with finance. Um but yeah, I think um overall the the market is is definitely hot. It's kind of that time of year, you know, people get their tax returns and they want to invest. So money's not leaving the space right now. And people want to hedge against Bitcoin. And they they they see that Ethereum is doing lots of cool new projects. And I hear about a really big crowd fund that's coming up next month. That I think is going to be primarily funded in ether, so I think that's part of the run up too. And last time we spoke, we we uh talked a bit about storage IO. And that they were uh a storage platform built on Bitcoin, they've recently announced that they're moving to Ethereum. Any thoughts on that? Yeah, like I think a lot of uh people who wanted to build a a blockchain token. A token that exists on a blockchain, they thought uh counterparty was kind of a really easy option. You know, you're leveraging the security of Bitcoin and uh you're you're able to, you know. Not really worry about double spends or anything, but then as transactions became more expensive. Um your colored coins had the same issues that regular Bitcoin has and the same fees. And uh like the exchange operators I talked to were actually eating a lot of the extra fees. Cuz it was more expensive to send a counterparty token. So um storage was working on some solutions to actually like uh create like payment channels of some sort. Like uh allow for micro transactions in Bitcoin with their colored storage coins. Um but I think overall they just saw the support and the uh the capability and uh I don't know. Just a general sense of community that is around Ethereum and uh decided that they were going to port over. Cool. Uh so you've got a a interesting project that you've co-founded Ubic. Uh do you want to tell us what Ubic is and what your vision is for the platform? Yeah, like we've kind of been a community that started uh uh way back when. Like uh you know, Bitcoin kind of started as a an email list. That Satoshi kind of dispersed out with. Ubic started as a a chat room called uh Coin Markets. It was really like the place everyone hung out back in 2014, 2013 to discuss. Yeah, not only Bitcoin, but like what other cool and innovative projects were out there. Like try try and understand this market as a whole. So um the original creator of uh of our original chain was um Julian. And he basically launched one of the fairest coins I think uh uh out there. He he kind of gave people two weeks heads up. Like, you know, we're going to launch on this date. Uh the first couple blocks that were mined actually had little to no reward. So people could kind of get their miners up and make sure the difficulty was proper. And the network was already like operating at capacity before it was even paying out. And then we mined uh proof of work for five days and then it switched to proof of stake. And after that, you know, the community still like kind of was there. Like we eventually got listed on a market a couple months later. And uh kind of the mindset of it was it wasn't just another thing to be traded. Like this is kind of, you know, a community coin. Um really organic and we kind of brought that ahead. And really the only thing we were able to build with this kind of like Bitcoin code base with a couple, you know, new novel features was a tip bot. Everything else we tried to build was rather difficult. So we made the decision after a couple of conference calls I organized in the spring. To look at other currencies and see what we could upgrade the network to. And we kind of settled on Ethereum code base being one of the more interesting ones in terms of functionality. So we started a test net in the summer. And uh by January, we were confident that we were able to switch the network over. Uh so we did a snapshot of everyone's balances and transferred to the new network. And uh so now uh we are the only altcoin that has switched from um a Bitcoin code base. To uh an Ethereum code base and we're back to proof of work. So yeah, a nice kind of like we got the economics of like Bitcoin. Combined with the functionality of Ethereum. Can you uh explain that a bit more in detail? Like what actually comes over from Bitcoin or is it or you're just suggesting that the. You know, you the platform has um has tested capabilities on both sides of that fence. Well, we're the only um I guess Ethereum code base in the top 100 currencies that has a monetary policy. Like uh a lot of them um or and without a a pre-mine as well. Um so like we have fairly created all of our coins, you know, our development team. No one has had an unfair advantage. The development team is actually just a company we formed this year to kind of officially say. We're supporting the chain and building products for it. And uh yeah, the the general idea of it is it's a fair launch, no ICO and uh no pre-mine. Okay. Um cool. And the the ICO, what does ICO mean for for the layman? Uh initial coin offering, so it's kind of a play on IPO. Like uh so people who want to do a crowd fund. They they ask for money, they can give a coin in return. So uh like Ethereum, for example, was an ICO around the same time. We launched the original network. And then uh when they they launched their network uh was almost two years ago now. Um uh they also included a pre-mine in the launch. So they have a lot of coins that weren't created with proof of work. And uh now they have a very high interest rate. And honestly, if you if you look at it more like a a tech company, like in terms of their their general goal. You know, decentralize all the things. They have so many different um uh projects and whatnot they want to seed. And uh be able to kind of fund um and and really just kind of have this like uh. I don't know, like a high burn rate of of trying to like build all these really cool things. We're taking the the slower, more stable approach. Like we only have about a 7% uh inflation rate right now in our first year. And that's going to decrease down to less than 1% over eight years. So that's why I say we're kind of similar to Bitcoin where we have a similar inflation rate to them right now. Um so you can look at Ubic much more as a currency and like Ethereum is. Maybe a little bit closer to what you consider a stock. Right, okay. The for people that are not deeply in into the the blockchain space, maybe they've they've they have a couple of Bitcoins. Or uh they've they've sort of spent some time. Listening to some some information, reading up on this. Where would you suggest is the best place for people to start, like should they look at some of the alt coins as as a sort of an easier place to get into this? Like Ubic or uh should they be looking. Just keep it simple, stick with Bitcoin, what would be your suggestion for for people just looking to to get a little deeper into this. Into this area. Well, I guess it depends what you're after. Like if you're, you know, a speculative investor, you know, you don't really even need to know the story of some of these. They can just you can play the chart. I know guys who are very successful at just kind of buying charts. Uh very technical analysis, um looking at candles all day. But uh if you're interested more in like fundamental analysis. Uh you you have to start like going to these chat rooms and really understanding like uh and reading forums. Like you can read a Bitcoin talk post on an altcoin. And really get a good idea of uh what is the the core. You know, like what are the specs of the network, you know, what's the block time? Like how what's the reward? Do they have an inflation plan, are they planning a pre-mine? And you can even look for unmoderated threads and people will report back. Like, hey, this guy actually has a hidden pre-mine. Or um like Bitcoin talk is a wealth of knowledge. And I'm right now I'm trying to find someone who can build me a Wiki, so we can do like a Wikipedia page of all these projects. And people and how they link together. So that's something I hope to kind of have as a an extra tool for Block Talk. Um just kind of I guess uh have more of a a yeah, a resource or database. But uh yeah, if if you're looking for a community that really cares about the actual code base development. Like we don't really talk about price too much. Um um you can join the Ubic slack and uh you can ask about any coin, you'll probably get a decent history on it. And uh some pretty unbiased answers. Awesome. So you mentioned uh the Ubic slack and obviously you're the the host of Block Talk. Where you can get uh tons and tons of great info direct from from the development communities on these projects. Any other places that you'd like to send people and feel free to throw out some some URLs for Block Talk and for Ubic as well. Uh yeah, so the Ubic slack. Uh I believe is uh so you go to slack.ubicsmart.com. And if you just go to ubicsmart.com, you can find any relevant info on it. Um youtube.com/blocktalk is uh my YouTube channel. Uh so I try and have on cool projects at least once a week. Um and if you have any like projects you want to find out more about, maybe get the developer on. You can uh, you know, send them my way, shoot me a message. I'm on Twitter at block_talk. Um yeah, like there's a lot of resources. I think it just comes down to like reputable and trust. Like uh I really like the World Crypto Network guys. I mean, there's a lot of maximalist there. But they still appreciate what the alt coins are doing, like they understand innovation needs to come from somewhere. Um even if eventually all this stuff could potentially be on Bitcoin, um it's just going to take a hell of a lot longer. Awesome. Uh I guess finally in closing, uh what do you see what do you predict happening? Over say the next six months if we if we chat again in six months, what do you think is probably going to transpire? In the in the blockchain space. Um well I think Bitcoin's kind of hit a floor here. So we're going to, you know, maybe consolidate in price. Um maybe even dip a little lower. We really need to see like a bump in uh Segwit support. Like I think Segwit is going to win overall or um it's going to be uh the actual event. Um that that kind of takes Bitcoin to the next price range. Um and that's going to unlock a crap load of functionality. Like uh cuz we can build a second layer and it makes payments uh on the Bitcoin network cheap again. Cuz uh if you've been in the space long enough, you remember when a transaction cost less than a penny. Now it's up to like 30 cents. So for, you know, remittance, it kind of makes sense. For tipping someone, not so much. Like we stopped buying beer with a Bitcoin beer machine at the our hacker space in Vancouver, uh decontrol. And uh we we had to turn off uh the Bitcoin functionality because it just wasn't viable anymore. For for such a small purchase. All right. Well, uh appreciate you uh spending some time. I know you've had a a busy week. Um hitting the the the conferences, so appreciate the making the time to come on. And uh we'll we'll definitely reach out to you again in in six months. And see things how how things are are changing in the space. So uh thanks for your time, Alex, and have a good one. Yeah, I appreciate having you on having me on again. I look forward to doing again soon.