Crypto Podcast Highlights Featuring ICP Jessie & Diego Prats
For those wanting a recommendation on a top crypto podcast, I’d forward you to the Neurotic Podcast held by ICP Jessie. However, because podcasts are long, I think it’s necessary to have a ‘Top Highlights’ compilation for those short on time. Therefore, I’ve gone ahead and compiled the most important parts of a recent podcast featuring Jessie and an R&D specialist from the DFINITY Foundation team, Diego Prats.
So below you can find the top 10 highlights and insights from the podcast. I’ll also attach a link to the full episode. Enjoy!
1 Introducing Diego & What Got Him Interested In Crypto
What drew you into crypto as an interest and then as a professional direction for you?
I really got into Ethereum I would say more than Bitcoin. Bitcoin is something that I was interested in, but I didn’t really understand it. I was much more interested in Ethereum because it’s programmable and I can write smart contracts for it — so I can hack around with it.
So being able to play with Ethereum made it a lot easier for me to understand it. It’s hard to play with Bitcoin other than creating a wallet or sending Bitcoin back and forth.
So once I was able to play with Ethereum, I really liked the idea of code that could bootstrap trust.
So a little bit of backstory — I’m going to weave my own backstory into this question. I’m from Tijuana, Mexico, which is not exactly a tech hotspot, like San Francisco, Zurich, London, or Shanghai.
One of the things I’ve always thought about is that if you wanted to start a bank or something, a FinTech company or a fund, there is some geographical advantage even where you are. However, smart contracts open up the possibility for — let’s say, if I’m a developer in Tijuana if I write a smart contract to clone UniSwap, just to keep it simple — and then I deploy it, it doesn’t really matter where I came from.
People can look at the code, they know it’s immutable, doesn’t really matter what the laws of Tijuana are, or of Mexico, you kind of get automatic bootstrap trust, which opens up the possibility for people that may not be living in areas that either have the legal background, or the branding or the tech scene to be like, “oh well I trust this company with my money because they have a lot of money and they’re based in New York, whatever.”
I really like the idea of technology that allows me to bootstrap all that trust so that people can say, “now you can trust me even though you don’t know who I am. You don’t even know what country I’m in, doesn’t matter.” This feature of smart contracts opens up the possibility for a lot of entrepreneurship in Latin America, which is something that I care about.
2 Differentiating The Internet Computer’s Approach To Crypto
Can you differentiate the Internet Computer’s approach to crypto from some of the other current approaches to crypto and what makes your crypto skepticism work with the ICP approach to crypto?
With regards to solving the problems with crypto and smart contracts, the Dfinity mentality is very much a long-term, “let’s fix the things that inhibit innovation.”
I would say what separates that from other projects is the Internet Computer protocol is different than other blockchains. So maybe it makes more sense to talk about the protocols and their differences because then you can see the mentality and the design intent that went into them. The design intent is in the protocol itself.
In a lot of ways, the ICP inverts the relationship between where smart contracts live and where the crypto functionality lives in individual projects that are built on the platform.
With Ethereum, for example, everything begins and ends with the Ethereum smart contracts, which are at the core — and then you have to outsource to AWS or Google Cloud for all sorts of other functionality in order to make it a fully functioning web app.
Whereas ICP sort of starts from the place of we’re building the whole widget and it takes a lot of that crypto functionality, instead of that being the whole thing, it becomes a feature checklist. It demotes it from the tip of the spear to being like “here you can build a whole array of web apps and dApps and distributed apps, but you can build in the crypto feature, you can kind of pick and choose from the buffet what crypto features you want to integrate into that application.
3 What’s The ICP All About?
Give me the full picture of the ICP elephant (metaphorically speaking).
We wrote it in the wiki. So if you’ve heard of the wiki, there’s a tab for Internet Computer Overview. It gives you an overview of the Internet Computer as well as the vision.
But at the end of the day, I would say there’s basically a list of what are the inhibitors of smart contracts.
Just to give you a sample — smart contracts (back in 2017 and 2018) are too expensive. That’s an inhibitor, so let’s fix that. They’re too slow, let’s fix that too. They can’t store enough data, let’s fix that too. It’s annoying for people/consumers to have to pay to use apps, let’s fix that. It’s too environmentally unfriendly, let’s fix that.
So the IC is more of like, “let’s make a list of everything we do not like, but that we want to fix about crypto, and then re-architect and redesign blockchain to fit those needs.”
For example, we don’t like that the token holders have no say in the protocol. Okay, “let’s make the protocol be a Dao so that people can have a say with a protocol.” So we have on-chain deployments.
These are all features that are rolled up from “the things we do not like, and then just kind of categorically go through them to unlock the power of smart contracts.”
So it’s definitely a combination of seeing what could be there, and then just kind of like, “well, let’s just address the thing.”
I think that smart contracts could allow more people in the developing world to build dApps — what are the features missing to get them there? So let’s just go through them — and some of them are the ones I mentioned — cheapness, storage, usability, being able to host real web apps, etc.
So I think sometimes it’s much easier to go from the point of view of like, “give me a list of all the things that are inhibiting smart contracts,” and then say, “let’s see how the IC can fix those.”
4 Crypto Investing Cycles & Building Through Tough Times
…how important utility is in a crypto project, and then we never mentioned utility again after that. We just talked about market psychology and boom and bust cycles and bull runs and etc. So what is the importance of utility then?
His answer was, “when the bear market comes, utility and usefulness and functionality are what provide that base level foundation that makes you not crash to the floor.” As you’re sort of riding these waves of the markets up, the markets down, the ability to have actual usefulness and have substance underneath it is what provides that safety net in the market for creating a future for this product that people are actually using — and it’s not just a boom and bust investment cycle.
I think a lot of the DNA of crypto thinking is born naturally out of Bitcoin, and how people think about Bitcoin. I think we’ve seen the markets kind of evolve past Bitcoin-style thinking. But I’m just observing as you’re just, there are just wild markets and you just have to be navigating the boat.
5 Introducing Concepts — Blockchain
Explain it like I’m five challenge — what is a blockchain?
A blockchain is a way to solve a problem. The problem is — how do a bunch of computers come together to agree on something? So for example, let’s say you have a computer, I have a computer, etc, and we ask all 10 of them — “hey, what’s 2+2?” Maybe 7/10 say 2+2=4, and maybe 3 say something completely crazy. A blockchain allows seven out of the 10 to agree on something and to memorialize it and write it down on the blockchain — “we will record what we agreed to.” So it’s a way for computers to agree on something by a simple majority, basically, most of the time — agree on something and then record it so if we ever need to go back we can see what the computer said, we can know that the computers said 2+2=4 on August 3rd. That’s what it is.
Why is this helpful? Why is that important? If you have lots of computers talking together, you can say, “I’m going to have a million tokens in the system, and I sent Jesse a token, we all voted, we all agree that’s the case, and because we all agreed, it’s recorded and no one computer, no two computers, it would take a majority to undo it.
So a blockchain is essentially what’s called in computer science a consensus protocol. It’s a way for a computer to come to an agreement on something and then record it, which is harder than the looks because a lot of times, computers do not have a good protocol. There are many protocols, but you want computers that are owned by many different people with many different agendas to come to an agreement on something. That’s a problem. If you can make a protocol or a way for computers owned by many people to agree on something, now you have the basis of decentralization. Now you have the basis of things you can rely on, you can trust that nobody can change other than the majority.
6 Introducing Concepts — Cryptocurrency
What is cryptocurrency?
A cryptocurrency is essentially a ledger or token or number that exists on top of a blockchain. So once you have all the computers agreeing on something, and they can record what they agreed, you can check back to the grid, now you have the basis of an asset that is digital, which means it can be sold across the wire, but cannot be duplicated. Once you have something that can be sent across the wire, it cannot be duplicated, and it cannot be removed from accounts, that’s basically the bare minimum of what people think of like, “now I have an asset of the internet.” So cryptocurrency is essentially something that cannot be duplicated and cannot be removed from you — and you can rely on this network to help you move this token or coin around even though you do not know the underlying computers and the underlying computers don’t know each other. That’s a big thing, the fact that the computers do not know each other and have different agendas, but the system still works — that’s the beauty of blockchain.
7 Introducing Concepts — Internet Computer
What is the Internet Computer?
The Internet Computer is a type of blockchain — a global computer that removes the limitations of all the things that inhibit smart contracts. It does this by using very advanced cryptography and other protocols.
What are examples of traditional limitations of smart contracts? We’re referring to things like smart contracts making them faster than traditional blockchains, making them cheaper, making them more environmentally friendly, allowing them to be run by DAOs, allowing them to be much more consumer-friendly, etc. So there’s quite a bit — but the Internet Computer is a blockchain that is controlled by a DAO that tries to remove all the limitations of traditional blockchain, including things like traditional blockchain smart contracts not being able to host a traditional web app. So Uber and Airbnb are impossible on an Ethereum smart contract, but very doable on the IC.
8 Introducing Concepts — Network Nervous System (NNS)
What is the NNS?
The NNS stands for Network Nervous System. It’s basically the mechanism that controls the Internet Computer. So to use random numbers, these are not real numbers — to go from Internet Computer version 1.2 to 1.3 — in traditional crypto, usually, a lot of miners get together and they have to agree like, “here’s a new version of the code so let’s all go and deploy it.”
With the NNS, anybody can submit a new version of the code, and people (stakers) who have ICP tokens can vote to decide the future of the IC. They can vote on what version of the code, they can vote on how many nodes to add, and exchange rates, and they can pretty much control anything on the IC — and it’s controlled by the token holders. So the NNS is a mechanism for the community, the largest DAO, to lock up tokens to control the IC.
9 Introducing Concepts — Decentralization
What does it mean to be decentralized?
Decentralization has a few features — one is that it allows you to trust in the underlying platform because the more decentralized it is, the fewer points of failure it has. So for example, imagine you have a Bitcoin-like protocol, let’s just say like a Jessie coin, and Jessie’s coin ran entirely on Jesse’s computer at his house. In this case, Jesse could just turn off the laptop and there goes Jessie coin.
Jessie coin would never do that to the community, I just want to come out and say that out front.
So to answer your question, decentralization is about having a system in which the majority can make progress with very few single points of failure, and the single points of failure are actually under-appreciated. The most common one people see is the number of nodes, but there are actually in my mind multiple levels.
Decentralization is also the number of provider owners. What’s the point of having 1,000 computers for Jesse coin if they’re all owned by Jesse? I would argue that’s not very decentralized, you need to have more providers.
You also run a risk if Jesse coins all lives in California because now you’re subject only to the laws of California. It might be more decentralized to have Jessie coin computers in California, Tahiti, Argentina, Mexico, Egypt, and Switzerland, that’s more decentralized because you have geographic distribution as well. So geographic distribution, and node provider distribution, are all things that help you grow in confidence that the system has fewer and fewer single points of failure where a few rogue people can attack it or bring it down.
10 Differentiating Internet Computer-Bitcoin Integration With Bridges
What is the difference between the Internet Computer’s Bitcoin integration using Chain Key Cryptography and a bridge? Maybe we should explain what a bridge is, and then explain how the Internet Computer’s implementation is significantly different.
It’s very common for other blockchains, for many blockchains, to want to be able to write smart contracts that can move around Bitcoin because Bitcoin has a lot of usages. The traditional way to do this integration with these blockchains is to create bridges or wrapped coins.
Bridges are very sensitive to hacking and one of the reasons they’re very sensitive to hacking is that they usually have one central point of failure — at some point, they have one person who you need to trust, which is their hands. Bridges at some point usually have one company, user, or person that they have to trust to wrap them.
The ICP-Bitcoin integration follows the principles of crypto which is that there is never one trusted source that handles the Bitcoin or the wrapped Bitcoin or anything like that — there’s no such thing. But rather, there are many people that kind of come to an agreement and consensus. So it’s a truly decentralized way for smart contracts to hold, buy, sell, or move Bitcoin on the IC. So that makes the (quite simply) Bitcoin that has moved through IC smart contracts to be much more secure and safer than Bitcoin that is owned and moved by the blockchains.