Created on: Aug 31 2017 | Last change: Aug 31 2017

On Accelerating Blockchain Evolution using Different Funding and Team Models


I originally started this article as a comment on Fred Ehrsam’s similarly themed post. The comment just got too big because I was sipping my way through a large coffee, so I broke it out into its own article. Enjoy!

Many people in the blockchain industry want to see faster progress in R&D with respect to blockchain performance, capacity (scaling), privacy, governance and secure “stable value” tokens. Naturally the question arises as to what funding and team models would best achieve this goal.

Clearly the problem is not limited to funding. The Ethereum Foundation holds ~$200M in its endowment, and Tezos and EOS have collected even greater funds from public investors in recent ICOs. That is a huge amount of financial ammo that the leaders of these projects can throw at engineering and research work. The interesting question is how such resources can best be directed towards developing blockchain protocols as fast as possible.

Fred makes the case that R&D work should be thrown open to the market, with substantial bounties offered to teams that can add functionality such as sharding that would allow blockchain networks to scale-out their capacity (sharding increases capacity by partitioning responsibilities for computation and storage across the network). Tezos plans a similar approach, and explicitly states that it will foster the formation of decentralized teams that compete for chunks of its funds dispersed as bounties. The idea is that competition amongst teams, and having a larger pool of brains working on the core problems and code, will drive faster progress. There must at least be some merit to this thinking.

However in my view there are two major reasons why this approach is not entirely practical: (1) the creation of novel decentralized protocols and cryptography often involves years of thinking and skills that are rare and thus these technologies cannot just be conjured on demand by those wishing to earn bounties, or indeed those who have just run ICOs (2) even though such pieces of fundamental science can often be described in isolation, their introduction into a decentralized network stack often involves far reaching technical changes, making it very difficult for teams to work independently and for critical pieces to be built out incrementally. For example, the implementation of sharding also involves the adoption of a new smart contract programming model (in which contracts communicate using asynchronous message passing) and this involves yet more complex science and engineering.

For such reasons, my claim is that a far better approach is to create a “Google style” team to develop the stack. The problem here is that if you really want to build a team of similar quality to the one Google had in the early days, you need to start with extremely strong authentic original science or you will not be able to attract the initial core team of superstar talent — they would easily see through white papers that are really ICO marketing documents, and of course beautiful technical designs where what the initial Google operation was built around, not marketing. Once you have meaningful novel science supported by such a team of superstars, you then need to add further layers of superstars to the team, in the form of an onion, where the quality of each new layer will determine the quality of later layers because superstars strongly prefer to join other superstars. This is a very, very difficult thing to do — especially in a rush — and in the blockchain industry would demand a combination of technical and entrepreneurial experience that is in short supply.

The quantities of funds being raised helps to hide the problem from the masses. Tezos may have raised $350M in ICO funding after the rise in crypto prices but in their last update they have only just made their very first hire — a business development executive in San Francisco (when Tezos ran their ICO, their team page displayed software developers working at an OCaml company in France that had agreed to do some contractual work for them rather than their own full time employees). There are many questions yet to be answered: Is their initial technical work weighty enough to build a superstar core around? And, if it is — or alternatively they can somehow attract and enthuse talent using monumental salaries— will they be able to build out the team layer-by-layer and create the kind of culture they need to win the technology race?

Only time will tell whether they can, but it is certainly true that their path does not reflect the much more organic way incredible technical organizations such as Google have arisen and developed their systems in the past. While I genuinely wish the Tezos and EOS teams the very best of luck, I think they will have their work cut out making their ICO funds work for them whether they pursue Google or decentralized team models.
But again, the proof will be in the pudding — and of course I’m biased because I am strongly invested in the modus operandi of DFINITY where we put stellar team and science first, and mostly neglect chasing ICO money and press coverage. Our philosophy and claim is that we can win simply by launching a world-changing network in the form of a performant blockchain computer that has unbounded capacity upon which it is very easy to develop new applications and systems. Anyone interested in what we do should start by looking at our team page. If you are suitably impressed, you will also be interested to know we have many more HUGE hires in the pipeline that will rock the tech world. Superstars are now joining us in droves because of our authentic novel science and the team we already have. This is what real momentum looks like and what I think is truly necessary to accelerate the development of blockchain networks.

For me personally my experience switching to the Google search engine back in the early 2000’s was defining. I remember being an “AltaVista head” until somebody told me to try out Google and I duly typed in I did a search and immediately saw how much better the results were and how much more quickly they were produced. Being an AltaVista head I nonetheless went back to AltaVista feeling faintly offended that my religion had been challenged. However I still became a full-time Google user within 2 days. DFINITY plans to win in a similar way and is obsessed about product/market fit, game changing technology, superstar science and engineering and culture. Given what our team is cooking, I expect the forthcoming release of the DFINITY network will ring major changes in the pace of blockchain advancement.