It’s a typical winter evening in the capital: cold and overcast. But IIT-Delhi’s Dogra Hall is full. Blockchain and tech enthusiasts are here to meet Joseph Lubin, who was part of Ethereum’s founding team along with Vitalik Buterin and is considered an influential figure in the cryptoverse and blockchain space globally.
Lubin and his team, armed with a $50 million fund, are in India to introduce ConsenSys to the Indian ecosystem and hunt for investible projects for ConsenSys Capital. Lubin, with plans to set up base in India for ConsenSys in the future, is on a three-city tour – Mumbai and Hyderabad is next – organised by Blockchained India.
After the hour-long IIT-Delhi talk, I sat down with Lubin to talk about his early days with the Ethereum project, blockchain industry, founding of ConsenSys, and what plans the team has for India. Edited excerpts:
Q: How did you get introduced to Ethereum and the blockchain space?
A: I’ve been a technologist all my life. I got a degree in electrical engineering and computer science and I did about 10 years of robotics, machine vision, AI, and neural networks. I did lots of software engineering transitioned to the world of finance. I was on the IT side of private wealth management at Goldman Sachs for a little while and then after that, I was asked by a friend to help him run a hedge fund. So we became partners, ran the hedge fund and started building trading systems.
Being in the world of tech and finance made it impossible for me to miss Bitcoin pretty early. I was living in Jamaica so I wasn’t really that excited to drop everything and build a business in the space because it was still a very immature space. But when I read the white paper written by Vitalik Buterin describing the Ethereum project or platform, I saw it as a scalable way to achieve all the promise that I saw in the Bitcoin white paper. It’s just a much more powerful system and I felt that it would enable millions of software developers to build many different kinds of decentralized applications on a decentralized blockchain-based platform beyond just the initial Bitcoin money application.
Vitalik’s from Toronto, I’m from Toronto and I met him on January 1st, 2014, about a month after he wrote the white paper. So we spoke for a while at a meet up that day, I read the paper that night and stayed close to the project. Later in the month, we all got a house together in Miami in advance of a North American Bitcoin Conference and Vitalik announced the project (Ethereum).
Q: How do the initial days with Ethereum compare with building in the cryptocurrency and blockchain space now?
A: It’s been growing exponentially from the start. It’s just that it’s a flatter curve as things get started, as things cook off. There were always lots of people coming into the space. People in companies and government, technologists and entrepreneurs who were interested in getting involved. The pace has kept picking up.
Now, over time, it got to the point where this exponential growth curve that we are on starts to intersect with our ability as human beings to process information and so it has gotten more and more overwhelming. We, at our company ConsenSys, have grown to 560 people in 27 countries to try to deal with that onslaught of interest and we know we have to prioritize things in different ways. We have to build infrastructure that can handle a lot more activity than we had to handle three years ago when we were two people.
Q: Are you still actively part of the Ethereum foundation and its projects?
A: I’m not officially part of the foundation at this point. We at ConsenSys have contributed software developers to some of those projects we’re going to continue to do that and ramp that up very significantly actually. We’ve been hiring protocol engineers as quickly as we can, PhDs in physics, math and distributed systems computer science et cetera. We’re building our own new client that will be really interesting. We expect it to connect to the public at Ethereum blockchain probably late March or April this year. It’ll do some other very interesting things which we’re excited about. So, not officially involved anymore but very collaborative.
Some blockchain ecosystems are not as warm and fuzzy and friendly as others. But the Ethereum community – unlike say Bitcoin that came out of the crypto-anarchist space, a trader space, some money space – came out of the space of makers, basically software developers… So, relevant to building a better and better platform for decentralised applications and it’s a community of people that is growing really fast. A lot of the people in the space know each other, like each other, see each other at different events around the world. And so it’s a pretty healthy collaborative community still and, hopefully, it’ll stay that way for a long time. And, philosophically, it’s about moving from a world of building siloed systems to collaborative systems.
When it does get to be commercial and more mature, basically a big chunk of the IT industry at some point in the future. Hopefully, we’ll maintain that collaborative ethos.
Q: What makes Ethereum a good platform to develop blockchain applications on?
A: Well, it’s the most expressive platform and most powerful programmatically. It can process lot more transactions than other platforms much less expensively. The code is part of the system, so you’re not just doing consensus at the data layer but you’re also doing consensus at the program layer. For Fabric and other systems, say built on Bitcoin, you’re only doing consensus at the data layer. So, say, a telecom company did all of its processing on a blockchain. It could keep its code on a server somewhere centralised and it could change the code at will and nobody would know that it really changed the code. You’re still coming to consensus on all the data but they may have just increased the price by 10% maybe temporarily, maybe inappropriately and there isn’t really a way to know that. If somebody changes a program on Ethereum, you’re going to know that sort of thing.
So, Ethereum’s just an incredibly agile project as well it’s got some of the best and the brightest. It’s been able to incorporate technologies not invented in the Ethereum space like ring-signatures, zkSNARKs. It’s an agile group of people that just wants to build the best systems and they’re not so concerned about where the best ideas come from.
Q: Where and what industries do you see blockchain-based systems being adopted at the earliest?
A: Any industry that has IT systems, any industry where the actors and the companies in that industry can benefit from interoperating with either people in their sector or industry or in their value chain. So, anywhere you can move from siloed systems to shared infrastructure. We saw early adoption in the banking industry and we’ve done some supply chain projects already, we’ve built a very core supply chain product called Viant and we’re going to see it in insurance.
We’re already seeing it in many different industries: insurance, banking, the energy industry… Essentially, the energy industry, electricity generation, transmission, and storage is physically decentralising as a result of cheaper photovoltaics and storage and the realisation that centralised generation is brittle, vulnerable, inefficient and wasteful if you do long distance transmission is there.
It’s already decentralising, but there’s no way for Alice on one side of the street to get paid for sending electrons to Bob on the other side of the street until now or very soon. So, we’ve built infrastructure, we’ve built smart batteries that can put out bids on a network and buy kilowatt hours, top themselves up, and eventually put out offers on the network to sell kilowatt hours so you can time-shift energy that way… you’re smoothing out how energy is used in your region.
Q: Among private blockchain and public blockchain solutions, which do you see getting early adoption?
A: In the early stages, I would say there are many people building out what they can on the public blockchain. We’re going to see many interesting innovations. For bitcoin, we’re seeing ‘gold 2.0’, the store-of-value use case coming into its own. On Ethereum, we’re seeing things like the naming service. Token launches are an early killer application and that early killer application essentially brings a lot of value in the form of money and people into the ecosystem. Many different projects can be built from that early application.
This year, we’re going to see a lot of asset-backed tokens that are priced stable like tokens that are based on gold, tokens that are based on money in bank accounts… It’s like building layers and layers of fundamental infrastructure. If you get to the point where you have a price stable token, something that represents the U.S. dollar or something like that, it’ll make it much easier for us to offer music on our UJO music platform and stuff like that. So, it’s going to again grow exponentially at the application layer. We’re going to see a takeoff at some point soon where there are just all these really useful pieces that people can piece together into sophisticated applications.
At the same time, we’ve got lots of companies and lots of governments that want to build out real production use cases and whether it’s transactional throughput or just privacy and security… We’re going to see lots of those things. And, this year, we’re going to see Interledger or Interledger protocols that glue those things to the public blockchain.
Q: In the case of India, what are some of the use cases of blockchain that you see?
A: We have done a lot of work in Dubai. We built a land registry system there. There are many different operations, very slow time-consuming operations when you transfer ownership. Do you know to get building permits there 12 different stamps for certain operations in that jurisdiction? We have streamlined all of that into a single coherent system. Really squeezed a lot of the labour out of that. We’re tokenising real estate on top of that sort of thing. So, we have a project that enables an owner of a piece of real estate to issue a token representing a claim of ownership on 100% or some per cent of the property. By tokenising real estate, we liquefy that asset; we enable that to be much more rapidly traded. There’s so much frozen capital in the world in the form of land and buildings. If we can thaw some of that capital and perhaps India’s an interesting place to implement some of that… it could be interesting.
Q: What’s your advice to Indian developers and companies working in the blockchain space?
A: It’s a great moment in time… in history to be alive. First of all, because we have all these technologies that are causing I think explosive growth. I think it’s going to be a booming economy for quite a while and we’re going to make our way out of a less efficient, less healthily structured set of economy and monetary systems. Whether it’s AI or big data or VR, AR or blockchain, it’s a great place to be.
Looking at the intersection of technologies or disciplines is often a really powerful place to be. It’s going to be really hard not to do well and to be happy while you’re doing well if you’re in those spaces. Blockchain, in my opinion, is foundational to a lot of that. So just walk around the rabbit hole, read a bunch of articles, watch some YouTube videos, slip into the rabbit hole and you will probably obsess on the technology like the rest of us and that’s gonna go well go very well for you.
Q: What has been your focus on India so far?
A: So we’ve had people come here before just sort of to offer information. We (ConsenSys) have not tried to establish a business presence here up to this point. I don’t have a really good understanding of the ecosystem. We’re in 27 different countries… soon 28, because we’re going to set up in Saudi also.
India is a very big country with a ton of technologists and in order to do something significant here, we really have to have a lot of attention on it. And I think we’re going to do that very soon. A lot of our businesses are based on the Ethereum platform. Take education. We have got ConsenSys Academy that has graduated 120 blockchain developers recently. We’ve run a continuing legal education course so lawyers get credit for that. We’re running an MBA course and contest… 38 different MBA teams are running through that right now. We’ve got content being targeted to accounting and insurance professionals. So bringing the educational content here and doing a community focus where we run meetups regularly. I think that will enable us to establish a foothold start to understand the community in different cities and start hiring people and put them on projects from around the world. Then, we can have a core delivery capacity and start hiring business people and seeing if we can help add value to some projects around here.
Q: What is the idea behind founding ConsenSys?
A: About a year into the project, we were getting close to releasing the platform and there weren’t a lot of people working at the application layer. So I gathered a bunch of people who were starting to experiment with building applications for Ethereum. It was very slow early on. We tried to build an accounting system and an app store and that went reasonably well. But, we didn’t have good tools so we started building a developer tool suite. That went very well. It went very well for the 250,000 downloads that it’s seen up to this point.
And early on when developers released an application they could release it in the form of a URL but users couldn’t just type that URL. They had to go and download an Ethereum client and download the whole blockchain. That was an untenable situation for an application platform. So, we built infrastructure that enabled you to essentially have a web browser or be a node on the blockchain. So you wouldn’t have to have the whole client on your machine so you could release code as a URL and as a user just consume that application as a URL.
We also built other infrastructure called INFURA that enabled software developers to just offload their entire infrastructure needs and write their applications to a restful user interface. That has been proven incredibly valuable for the ecosystem because it’s enabled the ecosystem to scale both developers to have an easier time but also enable the handling of many, many more events in the ecosystem. So we see 1.2 million transactions in some days in Ethereum but we see up to 4.5 billion other different kinds of events and the bulk of that is handled by our INFURA system.
Q: What are the different parts of ConsenSys?
A: It’s product, it’s consulting, it’s education, and different capital market activities. Product is developer tools, infrastructure at the application layer… you’ve got core components like identity and other elements. And, above that, we’ve got rebuilding lots of products usually in the form of open platforms so things for reference data and health incentivisation, network system supply chain and a handful more of those things.
We also do enterprise and government consulting. We’ve done work in energy, banking, insurance, supply chain, healthcare, education, land title et cetera. We’ve done a lot of work on the Smart Dubai smart city project, we’ve worked with the Monetary Authority of Singapore on a real-time gross settlement system, we’ve installed our identity system at Zug in Switzerland enabling citizens to access government services.
Then, there is ConsenSys Academy and on the capital market side, the fourth prong of activity. We got the venture arm with a $50 million worldwide fund.
Finally, our token foundry is comprehensive token launch services — from security audit to legal structuring of the token, either as a tokenised security or as a utility token or modelling the execution of the token, marketing et cetera.
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Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.