ConsenSys CEO Joseph Lubin: “Ultimately, Ethereum Will Have Infinite Throughput”br>
Global blockchain specialist firm ConsenSys will host Ethereal San Francisco on October 27 in that city. The event will be held at Terra, a contemporary art gallery and event space. Billed as a South by Southwest-type event, Ethereal San Francisco will feature panels, discussions, art installations, live music, and practical workshops on blockchain.
Joseph Lubin, the founder of ConsenSys and a co-founder of ethereum, talked with Block Tribune about the event and the general state of the blockchain/cryptocurrency industries.
BLOCK TRIBUNE: What is the state of the ethereum community in San Francisco, and why did you choose this city for this next edition of your venture?
JOSEPH LUBIN: There’s certainly been a decent amount of ethereum-focused activity since the start of the Ethereum Project in January, 2014. Chris Peele and some others have been running an ethereum meet-up, which I think has grown perhaps to over a thousand people.
I think they get maybe a hundred or so people at different events. That said, the west coast became aware of bitcoin early on, and some projects were formed, and there’s a fair amount of inertia, I think, that developed with respect to bitcoin, and may have resulted in a situation where the Bay Area was a little bit more focused on bitcoin than ethereum, in ratio, compared to the rest of the world. Where in New York. you see tremendous focus on ethereum, Toronto, throughout Europe and. really, globally. So, ConsenSus is expanding really rapidly around the world at around 306 people in 20 different countries. And ethereum is obviously gaining tremendous attraction.
So, we figured some of our personnel are based in San Francisco and one individual wanted to move back after joining us for a year in New York. And he felt that it was just that time was opportune to drop an organized pod into San Francisco and essentially serve as a bit of a catalyst to help organize the developers, entrepreneurs, etc. who are starting to turn a little bit more of an interest to ethereum.
BLOCK TRIBUNE: What was your specific role in the development of ethereum?
JOSEPH LUBIN: So, as one of the co-founders of the project, I did some, I guess, architectural thinking work, though no coding on early ideas in the system. I helped drive the legal aspects of the token launch. So, I was the main interface to different lawyers in structuring the token launch. I was, perhaps, the main driver on the ethereum side for forming the Ethereum Foundation to ensure that we were going to run the token launch and that there was strong oversight from the canton so that the project would stay on mission and that any of the monies collected in the sale of the ether token would be properly overseen.
I did a fair amount of work on the sale site itself. I wasn’t directly responsible for coding it, but helped quite a bit in architecting it so that it worked properly. We actually had a snafu or two that was introduced late in the process. A small handful of us worked pretty furiously in the last few days to fix it, and we ended up not getting into any trouble on that front, fortunately. Throughout the token launch, I continued to provide support and general oversight of the project, along with my co-founders.
BLOCK TRIBUNE: How do you feel about some of the issues that have been raised lately about ethereum and its ability to scale? Valid or not really?
JOSEPH LUBIN: There are no new issues that have been raised recently. We’ve all been fully aware of it from before, from the start of the Ethereum Project, from the first days in which a whole lot of us spent together before we even announced the project. We mapped out different ways of scaling the system. The first goal was to get something that worked, even though we knew it wouldn’t be scalable. Not globally scalable, in the sense that it could serve as the economic, social and political infrastructure for a planet. That’s a long ways away. But scalable enough so that many different groups can build applications and get reasonable response from the system for a year, two years, or three years. It’s holding up quite well. There are already scalability mechanisms built into it in the form of the gas constraints, which, by voting of the miners, can grow. So, we already have scalable blocks, which is something bitcoin has struggled with for a long time.
The first major step towards powerful scalability is moving to proof of stake. This is going to happen fairly soon, probably buys us an order of magnitude in terms of transaction per second throughput. Maybe moving it up to … I don’t know, say 150, 200, maybe 250 transactions per second. Next step is sharding, and even in January, 2014, we were thinking about sharding mechanisms for the blockchain, which essentially takes one unified ethereum system and shards them to, probably in the first instance, 80 different shards, all of which are kept consistent through a couple different cryptographic techniques.
These are techniques that are already well understood by us. So, we’re really far down the road to proof of stake and sharding is already being built in demonstration. So, its been in design for a long time and its really getting coded up at this point. There are elements of scalability that apply to bitcoin as well as ethereum, but they’re so much easier to get done on ethereum and we already have some applications taking advantage of that.
(The ConsenSys) poker platform makes use of it, and the Brainba team have released a platform around it, and that is state channels. State channels are a generic form of payment channels, and they can be used for micro payments, payments, long term payments, and a wide variety of applications including gaming.
Let me just top that off by saying that ultimately, ethereum will have infinite throughput. Blocking systems currently require every node to hold all the data and to process every single transaction and so, when you add new computational resources to that sort of network, you actually slightly decrease the transactional throughput, just because of the overhead cost of communication. But when you start sharding systems, you can add a new set of computational nodes and that new set of nodes, if it constitutes a new shard, will add somewhat linearly to the transactional throughput of the entire system. And since over time you could potentially add infinite resources, you get to a point where you have infinite transaction per second throughput. I think we’re looking at a system that will demonstrate sub-second transactions. Or sub-second block time at some point in the not too distant future, perhaps eight years from now.
BLOCK TRIBUNE: Will there be any effect from the Securities and Exchange Commission’s decision of a week ago on initial coin offerings and their need to be regulated?
JOSEPH LUBIN: There have been a lot of people in our space that have done the requisite legal work to understand what’s appropriate for token launches. I drove a lot of that work for ethereum and that took us eight months to come to comfort that we were releasing a token that would be considered a protocol token that would not be considered an unregistered security by the SEC. So, we’ve applied that learning and a tremendous amount of learning since then. We’ve got a large and strong legal team at ConsenSus and the SEC’s analysis was virtually exactly what we expected. We were very happy to see that they were treating that situation as, according to the specific details of that situation, that they would continue to look at the specifics of every situation in the future and not make sweeping generalization about the space. There are lots of different uses for tokens. They can be used for voting, they can be used for advanced tickets, they could be used for representing land titles. That does not make all these things securities. So, really good news.
The major implications of the SEC’s release is for exchanges. So, there may be some exchanges around the world that may need to look at the portfolio of tokens that they’ve agreed to list. They may have to scrutinize them little bit better and going forward they may have to scrutinize them a little bit better.
BLOCK TRIBUNE: What’s your position on the bitcoin split?
JOSEPH LUBIN: I’m not scared of forks. Ethereum had a fork and I think it strengthened our ecosystem quite significantly and taught us quite a lot. Bitcoin has emerged with some clarity. After this particular fork, there’s certainly more uncertainty in the air and more events to come. But we’re basically in the very, very early stages of this technology and the unfolding of the ecosystem, and different groups need to explore different approaches. It’s a vast solution space and I think we should all be encouraged to try out different things. The freedom to fork a project is, I think, fundamental, and it shouldn’t be feared. We at ethereum have been somewhat fearless in our ability to evolve the platform, to incorporate new technologies, to not risk breaking things really, but to evolve the platform while remaining pertinent about how the changes are applied. This is essential because there’s a long way to go in the space.
BLOCK TRIBUNE: Circling back here your conference for my last question. You’re describing it as the South by Southwest of cryptocurrency or blockchain. One of the big attractions for the real SXWS is Austin itself, with its live music scene. What are you going to do to bring San Francisco home to the people who attend?
JOSEPH LUBIN: I think Ethereal was conceived because we felt in the blockchain space there were enough banking industry, insurance industry, and developer conferences, so that you could go to one of these things every weekend or two around the world. But there really wasn’t anything really focusing on the artists, musicians, philosophers, politicians, entrepreneurs. The real people side of blockchain. The people that will be profoundly affected by the technology. And so San Francisco represents an eclectic mix of technologists and entrepreneurs, business professionals, artists, philosophers. I think it’s an ideal location for a pretty broadly ambient blockchain-focused event. There will be live music and art, so it should be really fun.