Dr. Scott Stornetta, the globally renowned scientist who along with his colleague Dr. Stuart Haber invented blockchain back in 1991, met with Electroneum’s CEO and Founder Richard Ells and Head of Blockchain Chris Harrison over Skype recently.
The Yugen Partners Chief Scientist is modest when saying he doesn’t consider himself to be “of the highest calibre within the cryptographic and blockchain industry. “I simply like to position myself as one of the people who has spent longer thinking about blockchain than anyone else on the planet. I have a really long-term perspective of this technology.”
Stornetta explained that he and Haber came up with the idea for blockchain to create digital documents that could be guaranteed to be tamper-proof. So, blockchain was born as a form of digital timestamps on documents along a chain so that authenticity of it could be traced back to its origin.
Seventeen years later after he and Haber invented the blockchain, Satoshi Nakamoto thrust blockchain to prominence by using it as the underlying technology for Bitcoin. In fact, whoever Satoshi are, they quoted Stornetta in their whitepaper.
Also, on various occasions, Stornetta has been said to be Satoshi Nakamoto. That is because he is a cryptographer, a renowned scientist, the inventor of blockchain and, speaks and writes Japanese as if it were his native language.
His views on Electroneum
“I’m happy to recognise that you have grasped the breadth of the design space. Also, that you are flexible enough and open-minded enough to be still exploring how to get the balance of the mix. And that’s something that I’m able to encourage wholeheartedly.”
He went on to say that many cryptocurrency projects reject the notion of becoming regulatory compliant. Others, he said, are not seeking ways to add value as is Electroneum for the end-user. Many more, he said, also reject combining features of decentralisation and centralisation to make their cryptocurrencies more secure and eco-friendly.
When highlighting Electroneum’s exploration of new ways to improve cryptocurrency and the blockchain, he said Bitcoin, other cryptocurrency projects and “people in the space should not think we’ve already found some of the most optimal positions in that design space.”
What appeals to Stornetta about Electroneum
Dr. Stornetta explained what to him is so appealing about Electroneum: “I admire, in particular, companies that have a long-term goal that is more than profit-maximizing, but that is actual a collective better.”
“I also simultaneously admire companies that are flexible about their means of getting from here to there. That includes finding ways to co-exist with the regulatory environment rather than attempt to subvert it. Also, finding ways to, create real use cases for people that wouldn’t know a hash function from a hole in the ground.”
Firstly, he said, Electroneum has a “long-term ambition for doing good and doing well.
“Secondly, Electroneum has a pragmatic approach to embracing existing players, including government and regulatory players, to find a way to co-exist. And thirdly, you have a practical way to make this of immediate value to the end-user. These three things I think are the essence of successful explorations in the, what I want to call the broader blockchain space.”
Electroneum’s GigFair project
Richard Ells explained Electroneum’s GigFair project. This is similar to other online marketplaces for freelance services in many ways except for the GigFair platform will charge far lower fees in benefit of the end user in developing countries.
“GigFair will enable people in the developing world to access the global digital economy for the very first time, allowing them to earn a little more, or even a lot more,” Ells described.
“The project will launch in the coming months and allows people from around the developed world to buy low-cost digital services or ‘Gigs’ using their credit card – but the remittance is made to the gig supplier in ETN, the Electroneum cryptocurrency. Some digital skills are extremely easy to learn and can be completed and delivered using only a smartphone. Until now it has been impossible to pay small fees such as US$3 or US$5 to someone in the developing world with virtually zero transaction fee. Gig sellers can use their ETN to buy airtime, data and a growing list of other goods and services.“
Scott Stornetta said GigFair is a great way to add value for Electroneum’s end users.
“Electroneum is creating a lot of value for the end-user. So, to me, the fact that you have users that can in a very near term see the ability to realize some value. Moreover, the fact that your system foundationally is sustainable for the long term means your project is setting itself apart from so many others,” he said.
He highlighted that Electroneum is enabling people in developing countries to live better with cryptocurrency and said he shares this vision.
Stornetta compares Bitcoin and Electroneum
In explaining how he views Electroneum, Stornetta told Ells that, “I think Bitcoin was a brilliant piece of work, but it was sort of a solution looking for a problem.”
In contrast, Electroneum is “piggybacking an abstract unit of currency onto ETN directly and into something that has intrinsic value, which in combination with the idea of a GigFair ecosystem and which provides a question for which your cryptocurrency is the answer.” He reiterated that this is “opposed to Bitcoin, which really was born as a solution without a need.”
Stornetta and Electroneum
“There are two things that to me seems significant: One is the notion of putting it in parallel a gig economy with a payment system for it; and two, the idea of by putting it on a mobile device for which people already have to pay, and the fact that you can trade airtime. Airtime is sort of, as I have said, a self-embedded currency that doesn’t have to be converted into anything else in order to be useful for trading and sharing and exchanging.”
Stornetta said he could only think of one thing analogue to Electroneum: energy.
“In other words, your ETN unit is currency. Energy is also a currency in terms of kilowatt-hours,” he explained. “People need energy, and they could produce energy conceivably. And so they could trade something that already has intrinsic value, and so by trading airtime, you’re already trading something with intrinsic value.”
Speaking of network security
Scott Stornetta set the record straight regarding hash power and network security agreeing with both Richard Ells and Electroneum Head of Blockchain Chris Harrison.
Many experts in the crypto and blockchain space boldly say the more hash power, the more secure a blockchain network is. Crypto and blockchain influencer Anthony Pompliano on 9 August 2019 tweeted out that, “Bitcoin’s hashrate hit a new all-time high today.” He added that “the most secure computer network in the world just got more secure.”
“I think the notion is fundamentally an incorrect one that the more hash power makes the underlying records more secure,” Stornetta said. “Only in a very narrow sense is that true, but as a fundamental thesis and driver, this leads to a very inefficient conclusion.”
Harrison and Ells explained Electroneum’s proprietary Moderated Blockchain, which is powered by their Proof of Responsibility (PoR) protocol. They told Stornetta that this has made ETN insusceptible to 51% attacks as it ensures that miners are not aligned.
This makes Electroneum the most secure cryptocurrency in existence. It also enables Electroneum to handpick internationally recognised non-governmental organisations (NGOs) as trusted miners who are helping to break the cycle of poverty in developing countries.
“I think it’s really important and so I want to underscore my agreement with something that you said. That is what it proves that the integrity of the record is the number of non-aligned entities mining the blocks.”
He also said “that’s really fundamental because trusting the record is ultimately not a technical problem, but a social engineering problem. The more disparate unaligned parties that hold a copy of the record, the more the trustworthiness of the record at a social and cryptographic scale.” He concluded: “So I just think that’s a very, very valuable insight.”
Permissioned versus permissionless
Being the father of blockchain, a technology built on the concept of decentralisation, Stornetta surprised Ells and Harrison. He agreed with Electroneum’s move to a moderated centralisation to ensure absolute security and regulatory certainty. He praised the fact that Electroneum is the first cryptocurrency in the world to have become fully KYC/AML compliant.
“We (Yugen Partners) feel that the ultimate solutions are somewhat hybrid between permissioned and permissionless,” which is exactly what Electroneum’s Moderated Blockchain is.
“But equally importantly, as a strategic move, we think that people that are coming in on the permissioned side will have a better path towards getting to that optimal hybrid balance than people coming in here on the permissionless side,” he said.
And once again he highlighted that “Electroneum’s regulatory compliance and the hope that ultimately those regulatory concerns can be relaxed is a perfect illustration of our sense that starting out permissioned with a goal to move to what amounts to a hybrid between permissioned and permissionless. This is simply a better tactical starting point.”
Electroneum, in Stornetta’s words, is one of the very few cryptocurrency adding value to the end-user and proving to be sustainable. He said there are many projects out there that have failed in one and even both of these objectives.
His words come as Electroneum has gone from proving on the ground in South Africa that there is a real utility for cryptocurrency to Brazil, where mobile phone top-ups have been made possible to thousands of Electroneum users. And this is only the start of many more developments to be announced in the coming months that will undoubtedly help all cryptocurrencies move towards mainstream adoption.
Having attracted nearly 3.1 million users in just under two years, Electroneum is making tremendous strides towards its vision of mass adoption in developing regions. It is the world’s first truly mobile cryptocurrency, offering a “mobile cloud miner” that enables users to earn up to US$3 in ETN every month. It is also the world’s first fully KYC/AML compliant cryptocurrency, and one of few blockchains that is insusceptible to 51% attack. It is the greenest cryptocurrency in existence and the only one to have launched its very own affordable US$50 smartphone designed for the needs of people in developing regions. Over the coming months, you’ll see Electroneum being accepted in many new countries and outlets across the world.