Emin Gün Sirer, co-founder and CEO of AVA Labs, participated in a livestream with Haipo Yang on August 5, 2020. Haipo Yang is the founder and CEO of the cryptocurrency exchange CoinEx and the mining pool ViaBTC.
Cindy Wang, co-founder of Satoshi’s Angels, moderated the event and served as translator between Emin, Haipo, and the audience.
In July, CoinEx announced plans to support AVAX trading after the Avalanche mainnet launches.
The following recap provides an overview of the livestream discussion (not direct quotes):
Cindy: Thank you for the joining the Bihu livestream.
Emin: Thank you for having me.
Cindy: Hello Professor Emin, would you like to introduce yourself to the audience?
Emin: Professor at Cornell for 20 years. Area of expertise is distributed systems. In 2002, invented a system called Karma. First cryptocurrency where minting was done with proof-of-work. Far before Bitcoin, but too ahead of its time.
Discovered selfish mining in Bitcoin [a technique where a group of miners can obtain revenues in excess of their fair share].
Worked on making sure funds that were stolen could be recovered with Bitcoin Vaults and Bitcoin Covenants.
Worked on Ethereum – noticed The DAO was about to be hacked.
Most recently focusing on Avalanche.
Haipo (via Cindy): It is said Bitcoin Cash (BCH) is too decentralized to add any technical features and doesn’t have a very good governance mechanism. What is your attitude about a fork and do you think it is a good time to fork Bitcoin Cash.
Emin: Big fan of Bitcoin Cash (BCH). It follows in footsteps of Satoshi’s white paper. BTC doing something different, trying second layer scaling, not grounded in Satoshi’s white paper.
Want Bitcoin Cash to succeed. No issue too small for Bitcoin Cash to fracture around. Always something that causes it to fracture. There were a number of proposals that did not receive unanimous support. Issues are more social than technical. Would love to see a governance layer, but the rifts are social not technical. We need leadership to emerge, so decisions can be made. Instead we have deep rifts, deep divides.
Cindy: How did Avalanche get its name?
Emin: From the mechanism of action of the protocol, which creates an unstable equilibrium like being balanced on top of a mountain. Slowly a decision begins to form. Decision starts falling towards one side of the mountain or the other: Alice paid Bob, or Alice paid Charlie. Nodes on one side of the decision gain momentum, growing bigger and bigger. Like an avalanche it becomes unstoppable (finality point).
I’m told its not the best connotation in Chinese, but in English, an avalanche is a powerful event, an awe-inspiring event. Not so much destructive, as awe-inspiring.
Cindy: I know that you are a big blocker and are supportive of Bitcoin Cash. Have you considered implementing Avalanche on Bitcoin Cash? Why create another chain?
Emin: Of course I did, but proof-of-work and Nakamoto Consensus have shortcomings. Nakamoto Consensus is wonderful, and a landmark in distributed systems. An amazing invention. But it has slow finality, lack of scalability, and leaks value from store of value to miners.
Avalanche is the third big breakthrough in distributed systems. Biggest thing to happen since the Nakamoto white paper.
Avalanche is highly scalable, highly flexible. Had to build a new network to show how fast and flexible networks could be.
I’d like to build Bitcoin Cash on Avalanche to show how fast it could be, with quick finality, and make zero-conf transactions much more secure.
Cindy: There are some advantages of proof-of-stake such as low threshold of mining and better transactions per second. We know Ethereum is switching to proof-of-stake [Ethereum 2.0]. Do you think Ethereum will continue to lead the bull market?
Emin: Absolutely, but Ethereum 2.0 is not appearing any time soon. Activity is centered around the Beacon Chain, essentially a meaningless chain that creates randomness, not processing transactions. Ethereum 2.0 constantly delayed, appearing in 2021, nobody suggesting it will be here this year.
When it comes to market, not sure Ethereum 2.0 will deal with core problems. It’s based on sharding, a split into parallel groups. Suspect everybody wants to be on the same shard as MakerDAO. Grave doubts about Ethereum 2.0 roadmap. Do not think sharding is the way to go. Not sure it will improve transactions per second immensely.
We’re looking at how Avalanche can support the Ethereum virtual machine. Avalanche is capable of thousands of transactions per second, finalizing transactions in a second.
Sharding is on order of five or six seconds. Avalanche is superior to Ethereum 2.0. Will it succeed? Don’t know, wish it the best, want it to succeed.
The fastest, best platform is going to be Avalanche, which supports the Ethereum Virtual Machine: byte by byte compatible with the Ethereum VM.
Cindy: I’m giving Bitcoin Cash away to our audience, please countdown to our audience.
Emin: [Counting down for giveaway] Three, two, one, go!
Cindy: You mentioned Avalanche is a real breakthrough. What makes it a real breakthrough? Specific aspects?
Emin: The way it approaches consensus is different than every other protocol. 6,500 transactions per second. Three times faster than Visa. Finality in about a second. Transaction submitted, then it’s as good as six Bitcoin Cash confirmations in about a second.
Avalanche is inclusive. Allows people to participate. Difficult to participate in Bitcoin Cash because you need a mining rig and electricity. With Avalanche, can participate with smaller node requirements.
Avalanche has a different network model. There are different virtual machines. Different subnetworks.
New coins compliant in each jurisdiction. There will be coins for the American market, and coins for the European market subject to European laws. First true multi-jurisdiction network.
Flexibility and speed allow Avalanche to do something nobody else is trying to do. Not trying to compete with the dollar or yuan. Not trying to compete with Ethereum as a world computer.
Avalanche is an asset issuance platform. None of the other systems are good for issuing assets. Assets have been issued on Ethereum and Bitcoin Cash, but that’s all incidental. Avalanche is built from the ground up to issue financial instruments.
Cindy: Haipo agreed the market for tokenization is very big. Question for both of you is how you rank the importance of community, development, and governance for public chains.
Emin: All important, like legs of a table. Table cannot stand without good foundation on all fronts.
Community is absolutely essential for blockchains.
Governance is important. Formal mechanisms for figuring out what community wants and every voice has a chance to be heard. Without governance even good communities can be ruled by loudest voice, mob rule.
Development absolutely crucial but has to happen from multiple fronts. Avalanche has community distributed around the world. Good community of small developers, and also have large companies building on Avalanche.
When a platform has small communities and big companies, it’s in a strong position, and that’s what we’ve been trying to do on Avalanche.
Cindy: Professor Emin, Haipo said he believes technology is not the most important factor. So many say they have great tech but offer a bad user experience. How should infrastructure be built to improve user experience?
Emin: Haipo has great insight. In this space, not that many differentiated user experiences. Haipo is right, user experience comes first and foremost, not tech, not transactions per second.
Until now, a large number of projects were repackaging the same technology. Satoshi’s invention and different flavors on top, but in the end very similar. Copied each other, not that many innovations in blockchains themselves.
Avalanche represents a completely different technological foundation. When you make a chain so fast, it’s a completely different user experience. Click and finalized. Cannot do this on Ethereum or Ethereum 2.o. In Avalanche, it’s almost instant. Completely changes the user experience.
Avalanche has a different network model. Many tokens on top. Asset issuance platform. Will be thousands of assets issued on top. Already multiple virtual machines. There will be different subnetworks.
These systems have to be so easy to use that people interact with them woutout realizing they’re talking to a blockchain. Haipo is right, user experience is what matters. Good tech is what gives you a better user experience.
Cindy: I will tell Haipo how you think highly of him 🙂
Cindy: Paper of Avalanche was first uploaded to IPFS, which is one of the most popular coins this year. What is your attitude toward IPFS?
Emin: Fantastic project. We need decentralized storage solutions to support blockchain projects. Fantastic coupling for any other blockchain project to use IPFS for storing information.
Cindy: What do you think of DeFi? Do you think DeFi will take us to another round of a bull market?
Emin: It will absolutely will, not just in crypto but also in finance. Everything starting in crypto will be innovation you see in Wall Street. Wall Street stagnated. Little innovation in the banking and finance side other than esoteric derivative instruments. Crypto brings a breath of fresh air into the space. Believe it’s going to be transformative. Avalanche supports DeFi needs: compliance, expressivity.
It will not be the case that Wall Street just adopts DeFi. DeFi will grow and grow and grow and become its own thing that is just on the side of the finance world. And as older people grow out of finance, DeFi will replace them.
Cindy: How is Avalanche going to combine with DeFi?
Emin: Avalanche already supports the Ethereal Virtual Machine (EVM). Everything that works on the EVM works on the Contract Chain on Avalanche. We’re talking to Compound, Uniswap, MakerDAO. Spoken to them about migrating functionality to Avalanche.
Talking to large enterprises that want to issue new assets tied to real world goods. Avalanche takes DeFi to the next level.
Finally, working on decentralized exchanges (DEXs). Because of flexibility, Avalanche supports highly performant DEXs. Existing DEXs are slow and behind the market. On Avalanche, can build a real-time DEX. Completely changes approach. After mainnet, plan to build new solutions and show the world how fast DEXs can be. How much better DeFi solutions can be on top of Avalanche.
Cindy: Thank you Professor Emin Gün Sirer, thats all for tonight. Thank you for sharing insights for the audience.
Emin: Thank you so much for having me, for insightful questions, and to the audience.
Cindy: Bye bye, Goodnight!