Full text: Credo Blockchain speech transcript
10 years ago last week, Satoshi Nakamoto published the Bitcoin white paper. That 9 page paper and the accompanying code was our century’s equivalent of Martin Luther’s Ninety-five Theses that began the Protestant Reformation. However, the target of this reformation is not an organized religion but the existing financial system.
It is fitting that Bitcoin was published in 2008, a time marking the most significant shortcomings of the financial status quo. Out of the depths of the great recession, Satoshi’s invention emerged as the seed of a better financial future.
That financial future gives people direct ownership of money through private keys rather than bank accounts, a money supply defined by software rather than government officials, and a way to transact without a trusted and potentially-censoring third-party. Innovations since Bitcoin, such as blockchain-based smart contracts, have further demonstrated the potential of these technologies to re-shape our financial system by changing the nature of how we transact, contract, and coordinate.
The seed that Satoshi planted has sprouted and flourished in the last decade. Bitcoin has become a major currency and a plethora of other blockchain and cryptocurrency technologies have emerged.
However, despite the significant advances, industry progress has been slower than many would have hoped for. We are still stuck with excessive centralization, fundamental performance problems, and have not yet hit true mass adoption.
It is therefore up to all of us to finish what Satoshi started and fulfill crypto’s potential.
Gaps in potential
Our team takes pride in consistently doing what we say we’ll do, so now I’ll share the gaps in industry potential that we’re aiming to close, starting with those that are blockchain-specific:
Blockchains currently suffer from fundamental performance problems. For example, major blockchains such as Ethereum can only support roughly 30 transactions per second. We’ve architected and implemented the Credo Blockchain to have an efficient Proof of Stake system with fast inter-miner communication using websocket and data streaming protocols along with a mechanism for counting votes as soon as a threshold is reached. We expect to considerably increase the TPS that our blockchain can support.
Mining on major blockchains is overly centralized with a small number of major mining pools and companies. In some cases, the mining power is even sufficient to conduct a 51% attack, undermining the fundamental security that a blockchain offers. Our Proof of Stake system decentralizes mining by broadly distributing mining power among token holders. We are additionally working on a progressive dampening function to reduce the chance of excessive centralization by large stake holders.
Mining currently has a very high barrier to entry since you need to purchase expensive and short-lived ASICs to participate. We are re-democratizing mining with the Credo Blockchain since you’ll be able to profitably mine with just a laptop and a relatively small security deposit.
Many cryptocurrencies still have inflationary properties due to new currency issuance in mining. Credo has a zero-issuance mining model in which miners are paid the accumulation of transaction fees in blocks.
Due to the high cost of transaction on other blockchains, a substantial portion of transactions are driven off-chain. This off-the-books blockchain economy reduces transparency in transaction activity. With our higher throughput, we expect to perform all our transactions on-chain.
Performing transactions on many chains is too expensive right now. It can cost in the several cents to over a dollar range on blockchains such as Ethereum. With lower mining costs via our PoS system, we expect to bring transaction costs down by an order of magnitude.
Existing mining systems waste tremendous amounts of energy. Our blockchain will operate with a tiny fraction of the energy waste through its software rather than hardware focused consensus algorithm.
Beyond those blockchain-specific gaps, the Credo Blockchain is one part of a comprehensive solution – with the BitBounce email paywall, BitBounce Ads advertising service, and CredoEx currency exchange – designed to more broadly fulfill crypto’s potential.
With this comprehensive solution, we are making crypto solve real world problems by eliminating email spam, having a tangible impact on everyday people through providing additional passive income from paid emails, and addressing some of humanity’s most pressing needs by partially alleviating poverty via boosting the income of our users in the developing world; beyond income, we expect our solution to have broad-based wealth creating effects through the mass dissemination and appreciation of credos. This solution is already making a global impact by piggybacking on the existing email network, which is currently adopted by nearly 4 billion people. In doing so, we’re also providing a way for dApps to gain far greater adoption by using BitBounce Ads as a distribution channel.
We’re doing this in a way that delivers real utility, beyond speculation, for consumers and businesses; consumers have the utility of defending themselves against spam while getting paid, and businesses can reach target customers in a way that can build greater brand loyalty than traditional advertising. This is all packaged in simple, beautiful, and easy-to-use interfaces.
Currencies are valuable because people are willing to exchange them for other things of value, and we’re making sure credos are actually exchangeable, initially by establishing and growing our currency pairs on CredoEx; we plan on eventually providing a path to acceptance of credo as tender for any legally purchasable good or service.
With those effects, we’ve established and are continuing to grow an actual token economy involving transactions between advertisers, paywall users, miners and traders; in this token economy, we’re now seeing token economic principles come to bear rather than just chaotic fluctuations from the shifting sentiments of market speculators.
Since holding our first token sale, our team has massively over-delivered on the promises we made in the original whitepaper. We’ve continued to update our whitepaper as our solution has evolved from additional customer input and innovations. We are about to publish our 5th version, and aim to be a model for improved financing of technology development via ICOs using a multi-offering, execute-raise-execute-raise process.
To sum it up, we believe that crypto has the potential to dramatically improve the world and eat traditional finance, and our goal is to bring that complete potential to fruition via our comprehensive and evolving solution.
Now that I’ve informed you about the gaps in potential that we’re filling, let me share more about the specific blockchain we’ve developed:
The Credo Blockchain is built on an efficient p2p communication layer with a websocket and data streaming transport protocol. This means that a socket is maintained between peer nodes and block bodies are streamed in chunks rather than sent all at once.
On top of this, we have a various mechanisms for managing miners participating in the Proof of Stake consensus process. Any node in the network can become a miner through issuing a security deposit of credos that will be held for a minimum period of time. Once the security deposit is validated and a given number of blocks have passed, that node can begin voting on new blocks and proposing blocks when it is selected to do so. If a mining node goes offline, other mining nodes will quickly discontinue including it in the set of miners that could be chosen to propose a block through decreasing its participation rate; that participation rate will quickly recover when the node comes back online and start voting again. If a mining nodes changes to a new IP address, it can submit an ip update transaction signed by the private key associated with its security deposit address in order to prove to and inform the other miners that it should be communicated with at the new IP address. If a withdrawal is attempted before the security deposits timelock has expired, the transaction is not processed. Miners can also be removed if they are penalized for voting on multiple blocks at the same time, which can happen through another miner submitting a transaction containing a proof that the miner signed votes for multiple blocks for a given block number and voting round. These mechanisms allow for the addition and removal of miners, as well as updating their state so that they can be communicated with and included appropriately.
We then have another set of mechanisms for proposing and voting on blocks.
In order to determine the next block in the blockchain, one miner who has contributed a security deposit is selected pseudo-randomly to propose the next block. This selection is deposit-weighted so that miners with a higher stake will get to propose more blocks, participation-rate-weighted to avoid calling on offline nodes, and deterministic so that all nodes will reach the same conclusion about which miner should propose the next block. If a miner does not propose a block before a specified timeout, another miner will be selected to propose it through updating the pseudo-random selection to be seeded by a retry count. When a miner successfully proposes a block, it is compensated with the sum of transaction fees for all transactions in the proposed block through a special transaction.
Once other nodes receive the pending block, they cast and broadcast votes to other miners. When a sufficient number of votes has been received, miners count the votes and check whether a block has received a supermajority of votes weighted by stake size. If a block has a supermajority of votes, miners will broadcast it to all nodes as the confirmed block; if no block has a supermajority of votes, miners will vote again.
These mechanisms allow for blocks to be proposed and voted on to achieve network consensus on the valid chain.
Our blockchain will also support a finality threshold after which a node will not accept a new block that has a chain excluding blocks before the finality threshold. New nodes will also receive a hash of the valid chain from seed nodes when bootstrapping to ensure they sync with the correct chain.
This is our blockchain for the first phase of development and testnet launch. Future phases will add third-party token support, Turing Complete smart contract functionality, sharding, and other innovations.
If you’d like to learn more about the implementation, we’ll open source the project between now and the mainnet launch. Once the source code is available, I hope some of you will become contributors.
That brings me to how you can participate in the ecosystem we’re forming.
There are several roles you can adopt:
- Credo miners run our Credo Core node software, produce and vote on new blocks, and mine Credo in the process. To become a miner, you’ll need to download and run our node software and buy enough Credo to make a security deposit.
- Credo developers build applications and tokens on top of the blockchain, or contribute to the core node project. To become a developer, you just need to access the repo for our source code and start contributing. We’ve written a wiki and will publish additional articles to make it easier to start developing.
- Email paywall users trade their attention for credos via BitBounce. You can do this just by signing up for BitBounce and adding one of your email accounts.
- Advertisers run marketing campaigns to paywall users. You can get started with sending campaigns by signing up for BitBounce Ads. You can pay with a credit or debit card via BitBounce Ads, in which case your payments will be converted to credo via market buy orders on CredoEx.
- Traders buy and sell credo on our exchange and others. To trade, just open an account on CredoEx and deposit some funds to begin trading.
All that brings me to the final major announcement I’ll make this evening. We have accomplished a tremendous amount with the proceeds of our first token sale. We’ve grown our team from just me and my wife to a world-class team of 14 with truly outstanding industry leaders on our board of advisors such as Tim Draper and Patrick Chung, massively grown our adoption for BitBounce and completely revamped the product, created our own exchange with CredoEx, invented and developed BitBounce Ads so that users would be paid more, and now we’ve made our own blockchain.
That said, as I’ve touched on already, we have much larger plans for the crypto industry. In order to most effectively execute on these plans, a larger team and more resources will be required. That’s why we’ve decided to hold a second offering for credo using the company’s reserve tokens. We’ll hold this offering in Q1 of 2019 and our target is to raise $100 million dollars.
The second main reason for doing this sale is to substantially broaden the set of miners participating in our Proof of Stake system. Given that goal, we’ll be looking to get as many individual buyers as possible to participate in the offering.
In the run up to this sale, we’ll publish a new whitepaper, deck, various articles, and make additional material disclosures including the Credo Blockchain’s source code. While many token sales were conducted with merely a white paper, I believe our second offering will be for one of the most mature and advanced projects that the market has seen yet. I’m excited to conduct a successful offering, continue to execute on our mission and vision, and also set an example that other projects can follow.
Call to action
I want each and every one of you to become a part of the new Credo economy and ecosystem we are forming. We have put together a survey at [link removed] where you can specify the roles you’re interested in adopting, and we will send out detailed instructions for how to do so in the coming months.
Our goal is to accelerate the realization of the full potential of this new financial system, and you can play an important part in that happening. Please be proactive, get involved, and take up this rare opportunity we have to bring about a better world.