October 29th, 2018
This analysis is part of our coverage of blockchain week (October 28th 2018) in Prague, CZ, where thousands from the global Ethereum developer community flew in in for the fourth annual summit, aka DevCon IV.
Blockchain technology continues to garner strong backing from corporate and venture investors. However, the recent sharp drop in the value of Bitcoin and Ethereum has put a freeze on the massive ICO (initial coin offering) funding rounds witnessed through 2017 and into 2018. This has put pressure on early blockchain startups aiming to score big quick rounds via token sale. Traditional VC funding takes longer with more vetting and paperwork involved. Likewise, those that had raised via ICO are now strapped, as the fiat value of their token assets has declined. Organizing bodies like the Ethereum Foundation and ConsenSys will emphasize community and long-run mission, in order to keep developers engaged. The following account looks at the state of the Ethereum developer community as of published date.
Welcome to Prague
Coming out of the Václav Havel International Airport and you will get hit with a wall-sized poster ad of a futuristic tween proclaiming that “it’s our turn to change the world.” Below, in plain white letters reads blockchains.com.
No one here has yet heard of Blockchains LLC, but everyone saw the poster and is casually curious about the launch party this Thursday - just one of many going on this week. The program was pushed out as “the most talked about event in Prague” the marketing is full of hype foreshadowing “something big”.
The CEO is Jeffery Berns, a former lawyer out of Los Angeles and current president of Digital Money Corp. The group also runs ETHNews, “an emerging provider of Ethereum and blockchain ecoystem news”.
Blockchains.com has left much to the imagination as to its mission, both on the website and of the launch event. Here is the dramatic trailer:
While not yet official, rumor has it that the group will announce some sort of decentralized testing ground on a 67,000 acre sandbox in the middle of the Nevada desert. The launch event will reveal more specs. The land has been acquired in the Tahoe / Reno Industrial Center - also home to Tesla’s Gigafactory, Google, and Switch. We have questions and some concerns.
Two weeks of blockchain
DevCon is a four-day immersion of tech talks, concept proposals, hackathon demos, and sponsor parties all built around the Ethereum development community. It’s already awesome, and it hasn’t even started yet. The week prior was full of pre-events and boozy evenings perfectly timed with the 100-year jubilee celebrating the birth of the Czechoslovak republic, the breakup of the Austro-Hungarian Empire, and the end to a dreadful World War (I).
Jump back to 2018, and Prague is a modern mecca of old meets new, with layer upon artsy layer of post-renaissance, soviet, and post-modern vibe and architecture. The perfect setting for a mindfully sophisticated technology conference.
Judging from the pre-events and socially-charged subject matter, this year’s DevCon will be different from your typical tech conference. Woven into the technical sessions on blockchain proof of stake, on-chain vs. off-chain, cross-shard transactions, ETH gas, and blockchain governance are the socioeconomic tracks that have become common with the blockchain movement.
There is the business case for decentralization i.e. removing costly intermediaries such as the banks and in the case of tourism, the online travel agencies. There is also the cryptoeconomic case which subscribes to a yet-to-be-fully understood notion that society and human behavior should and will somehow inevitably merge with technology. We now all know the argument. Distrusted third parties have to go (or change) and the technology layer should be decentralized and governed by the collective rather than appointed companies and individuals.
Perhaps the start of some digitally-enabled form of socialism? Perhaps. Anonymous coder Jon told me that views among the Ethereum development community vary widely. “You have people that are fully-blown communists and others that are staunch capitalist libertarians.” Others have voiced concerns about the tendency for open-source platforms to get hijacked by corporates. Ethereum developer Vlad Zamfir took the stage at Web3 Summit earlier this month saying “expect every layer to be captured. Defend every layer.” - as reported in a recent Coindesk article.
These are still early days. Digital platforms have clearly become integral to our lives. For the western markets, companies like Amazon, Facebook, Google, and Microsoft are now institutions and cornerstones to how we run our relationships and businesses. Many argue that these companies have amassed too much influence to the detrimental effect on society. Increasingly, common grievances voiced by the media include tax avoidance, data privacy, electoral manipulation, and income inequality.
Ethereum’s open-source ethos
There is the tech side and then there is the community. Ethereum is an open-source, public, blockchain-based distributed computing platform. In very simple terms, open-source software is made publicly available so that developers can pick up where others had left off. This open model has been known to speed up innovation, since developers needn’t reinvent the wheel. It also makes it easier for teams to share code and work across globally distributed networks. It breeds a collaborative work culture and flat organizational structures.
The popularity of GitHub, a repository of open source software (recently acquired by Microsoft), is testament to what is possible with open source. Wordpress CMS is built on open source. Google, in the early days of AndroidOS, pinned Apple against the wall with open source on mobile applications.
“Unwritten is Good”
Hierarchical corporate and social structures are alien concepts to the open-source community, especially for those that are building on top of the Ethereum platform.
The ETH community is well-funded and highly intelligent with a purpose-driven, but unwritten mission and code aimed at building a new, more ethical layer of tech that respects personal privacy, wealth distribution, and a yet-to-be determined digital synchronicity powered by cryptoeconomic rules and principles.
What makes blockchain different from other technological movements is the built-in economic model that forms the foundation of its operations. Smart contracts run ETH or micro-payments transacted to complete functions.
This web 3.0 - as opposed to the current Web 2.0 that relies on user data and tracking - would be decentralized with “a fixed ideological position” to help guide its evolution on a track toward more ethical governance.
“Unwritten is good” explained Anonymous B, while waiting in line with me at a pre-event food truck serving rich, albeit high-quality sandwiches. Recall George Orwell’s Animal Farm and what happens when rules get written down.
All of this boils down to establishing a set of rules or governance aimed at protecting the network from a takeover.
Not overtly preachy
For the most part, the cryptoeconomic elements are not overtly preachy. On the contrary, the theoretical discussions and articles around cryptography resonate and complement the exponential rate of change now taking place with blockchain. The level of computing power used to power these systems is astonishing. And with great power comes great responsibility.
The blockchain movement exploded with the launch of bitcoin post the global financial crisis and subsequent loss of faith in global financial institutions. The finger pointing and rhetoric of a trustless new world order simmered down somewhat during the ICO boom through 2017 and into the summer of 2018.
Everyone’s attention diverted to writing white papers and MVPs amid skyrocketing valuations and wildly successful initial coin offerings. Ethereum competitor EOS ICOed over the course of a year, generating a record $4.1 billion. The mainstream conversation has focused on the technology and on building Dapps (decentralized apps), coding smart contracts, the future of Web 3.0. It’s still early.
Community development will likely play a bigger role in feeding the base and keeping developers motivated to contribute to the source code. This is a tight-knit group. Everyone seems to know everyone. Especially now as the ICO boom has chilled. People need reason to stick around and new entrants clearly need to see the revenue potential.
Satoshi Nakamoto was the Jesus-like figure of blockchain that came and went, launched Bitcoin left his mark and disappeared anonymously (no pun intended). Some of this sentiment came out at one of the DevCon pre-events hosted by Status.im.
The salon-style discussion on the future ethics of technology was a well-coordinated and considerate discourse on everything from personal emotional states to individual motivations for staying in the community. “There is a desire for some in the community to get in and get out.”
In the early years, many flocked to Ethereum with dreams of striking it rich on a new technology and initial coin offering. There are clearly those that see the long-run potential of the technology. Now that the ICO boom has cooled, the community will need to turn deeper into the tech and monetizing on utility. That means building Dapps and B2B applications that actually work.
One emerging challenge for open-source entrepreneurs is that market-ready projects can get copied and tweaked. “Forking” basically allows new developer groups to grab existing code, repackage, re-brand and push out to market. One founder of a very cool, token-driven events apps said that his code has already been “forked” over 30 times since launch a year ago. “Open source makes it harder to monetize”.
A big part of running a successful open source ecosystem is hacker-friendliness so that projects can get out the door quickly. So far, the feedback has been that Ethereum is still very hard to build with. There is a core team of developers focused on improving the overall Ethereum architecture.
The lead is Vitalik Buterin, a brilliant 24 year-old Russian-born hacker and founder of Ethereum. The rest of the estimated 100K Ethereum community is focused on writing smart contracts - a fundamental building block of the Ethereum protocol - and mostly just want a faster, more stable and secure infrastructure on top of which they can build token-enabled applications.
As we learned, Ethereum roadmap discussions can get quite heated with developers expressing concerns, frustrations, and recommendations on what needs fixing. Vitalik made an appearance at the Status.im pre DevCon 48-hour hackathon where roughly 120 hackers participated intently with updates from the architecture team.
The uniquely styled “fish bowl” format of the stage talk solicited participants from the audience to come up and talk and scrutinize questions about next steps and Ethereum. There were a couple of bigger security breaches over the lifetime of the platform which caused “forks” or splits between different versions of the platform. “No one knows what the fuck is going on”, explained Anonymous B”. And yet, despite the chaos and uncertainty, there is a palpable degree of optimism that this is actually something.
There is yet no name for this decentralized Zion in the desert. The land deal outside of Reno, in the Tahoe / Reno Industrial Center is also home to Tesla, Google, and Switch, a data center company. The $175 million cash purchase was finalized in January of this year.
We assume Blockchains will become a sort of outpost where various technologies, not just blockchains will be tested. Renewable energy, autonomous vehicles, artificial intelligence, robotics, drones, the gamut of emerging technologies.
From the website:
“We believe blockchain technology should be used to benefit all of humankind, not just large corporations with superior resources, so we’re dedicating our resources to catalyze tremendous economic and social change. We're out to show that blockchain technology can, should and will change the world. But it’s not about us. It’s about everyone else. We are a collaborative effort making the vast potential of the blockchain a reality.”
This is set to be a project built on the Ethereum blockchain. We have no knowledge of total funding or future partners but fail to see how something like this, whatever it is and as ambitious as it sounds, will succeed without big corporate names behind it.
Google has also taken recent interest in planning public spaces. It’s Sidewalk Labs project in Toronto is a neighborhood redevelopment project set to integrate the full scope of new tech in the urban setting. Blockchains could become a partner project within the Sidewalk Labs vein.
FedEx Supply Chain is also out at the industrial center. The company is a proponent of blockchain it runs a lab out of the University of Memphis, where the company is headquartered. Wal-Mart is there, jet.com, and others.
Us vs. Them
A project of this scale and hype is sure to draw out criticism from the spectrum of attitudes within the crypto space about the role of “big tech” and decentralization. Rumblings on Twitter suggested that blockchains LLC could be a backdoor for the likes of Google and large corporates to influence the fate of open source and the Ethereum network and community.
The acquisition of GitHub by Microsoft and the very recent acquisition of Red Hat by IBM points to invigorated interest of big tech with open-source platforms. The open-source coders that we spoke to feel apprehensive about the sale.
One of the core Ethereum Foundation developers told me that “we need projects like this to test applications and to build use cases.” We agree. The ecosystem should welcome support from all avenues during these
The big question will fall on governance and protecting the various layers against special interests.
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