First of all I would like to thanks David for his time and to accept this interview. We know that is very busy and work hard in many project turning around the blockchain.
If you want know more about BitBay here is some links:
- Website > http://bitbay.market/
- Slack > http://bitbay.market/wp-login.php?action=slack-invitation
- Bitcointalk > https://bitcointalk.org/index.php?topic=890531
Questions about you and BitBay
To start, can you tell us more about you, your career and give us the reasons why you created BitBay?
I’ve done many things over the years, when I was younger I was a professional chess player and set world records in puzzle composition. Then I moved to Los Angeles and became a realtor and actor. I was in « Pirates of the Caribbean 2 » and many national commercials and print. Then I moved into photography and commercial production. I did that all through my mid 20s I then moved to North Dakota to work in the oil rigs doing water transfer(100 hour work weeks, hard labor), then installing satellites and finally as a landsmen. I had written my first computer program using WinAutomation and Python in my landsmen job to automate my job finishing something that was supposed to take weeks in a day and then got fired for working too fast. You see they get more money the slower the job gets completed since they bill oil and fiber optic companies daily. I had known about Bitcoin since it started but only took interest in coding when I saw what it could do. I had the idea to make BitHalo with unbreakable contracts but was unable to find a coder. I was so determined to make double deposit a reality. So I had to teach myself coding and built the entire software from scratch in Python. I got hired on BitBay it was my first paid job. At the time I was only licensing Halo software. However the founders left the project forcing me to take over to protect investors. Now I’m building it out with decentralized pegging to end volatility once and for all.
In the crypto world cryptocurrencies, where there are more than 900 altcoins, what makes BitBay different from the rest? What are the differences between Bitbay, Syscoin and Openbazaar?
Well first of all BitBay has been around a lot longer. It started as BitHalo which was almost 4 years ago. The software is over 50,000 lines of completely original code. It was the worlds first decentralized markets one year before Openbazaar. Also the major difference is that the contracts are unbreakable. Syscoin and Openbazaar rely on escrow which is a broken design. Sheep Marketplace lost 220 million in escrow, Mt Gox almost a billion. The fact that anyone in Bitcoin relies on escrow agents is crazy. Nobody learns their lesson. Openbazaar and Syscoin for example uses 2 of 3 escrow and therefore escrow agent can collude as the buyer or seller and steal multiple escrows risk free. Double deposit is superior because you don’t need arbitration which is one of societies root problems. Arbitrators can’t tell who is lying, period. In double deposit escrow like BitBay and Halo have, both parties place a deposit. So in this way, theft is completely fruitless and impossible since a thief would gain nothing as the escrow would explode (it’s mutually assured destruction in a joint account). The only way out of these contracts is to work with your counter-party or both of you lose. You can’t have decentralized markets with centralized escrow, it’s a contradiction in terms. The smart contracts with double deposit escrow in Halo have been tested for 4 years. It is one of the most secure clients in the world. We have tons of little bonus features too like steganography, locktimes in the UI, translation to 92 languages, live Python debugger, a custom change system, price tracking, a full counter-offer system, templates. I’m not sure why anyone even compares these projects. I do respect their work, I know how hard it is to develop but it still stands that this software is much older and more developed. We hope they will also decide to implement 2 party escrow since it is better in every way. Also there is the decentralized pegging which I’m working on which will end volatility. It’s a very important feature which can revolutionize crypto and world finance.
Can you tell us a little bit about the turbulent start of the project with the departure of investors? Did they still have a capacity of harming the project, including the detention of BAY?
Although we have moved on (I’m not interested in looking backwards), I can recap one last time. The original founders were some of the worst people I’ve ever met. They not only set me and investors up, they also used fake profiles on the forums to attempt harm my reputation. The project was set up in such a way that they had planned that from the beginning. I was naive to think that out of all 4 of them (BTERs Lin Han; Steven Dai; Robert Duskes, a.k.a. Bobsurplus; Ryan Wright, a.k.a. Gekko) that at least one of them would help me build out the project. They instead did nothing and ran like cowards/thieves. Personally I think their goal was to harm my reputation perhaps they were working for someone else. I’ve got a pretty strong body of evidence to support this claim. They all got 200 btc 1/5th of what was raised except Bob who tricked everyone and got an extra 500 which he told the exchange was his own funds when it was actually from a list of private investors he compiled. Then he keeps that and claims he got « paid » to do « work »… really it’s just theft because who would pay him 700 BTC to FUD his own project? In fact I’m sure people would have paid him to just go away and leave us alone since he would occasionally come by the forums to brag about the money he stole. It’s sad to think people like this exist. Unfortunately, I was unaware of everything until the ICO ended and then I stayed silent for a couple weeks thinking of how to handle it. In the beginning, I wanted to make sure they didn’t use my name to raise funds however they did not honor that request. Then I eventually spoke out after I had enough information. They were counting on me to do that because then the paid propaganda started on the forums like fire. Lin and Steven had the lion share of BitBay almost all of which has been sold according to everyone on Slack who tracks their wallet. That’s why the price has started going up. Most critically really I’m the one who was most effected because I’ve had to work for two years without financing. Regardless, the whole purpose of decentralized pegging is the fact that nobody can harm the project since it can freeze and unfreeze its own supply to match demand. The bigger picture here is we are trying to destroy the advantage of « pump and dump » orchestrated schemes. And this way we can give all the advantages to the community who will effectively decide the price by voting. Reducing volatility with technology.
What are the targets for 2017?
I’m completely devoted to working 8 hour days to finishing the features in BitBay and Halo. I want to have everything finished by the end of the year including the pegging. Success is the sweetest revenge. This is why we didn’t make a new project. Because it will be so much more epic when it happens here in BitBay. With everything this software can do, it is many years ahead of the competition. This year we will have all the contract templates done, cold staking, decentralized pegging, python contracts etc.
What’s your plan to publicize your project and enable it to achieve objectives (investors, ICO, recruitment of developers, marketing,…)?
Currently, the core community has kept me going. These guys have invested money, time and countless hours in testing and helping me improve this software. Without them this would have been impossible. We wouldn’t mind investors, we want people to download the client and see for themselves how powerful it is. I’m not interested in another ICO right now. Maybe after everything is completed. The thing is, it really bothers me a lot that developers raise money without projects. In the world of cryptocurrencies, there is too much vaporware. I want people to see that this software is real, it works, its revolutionary and there is nothing in crypto even close to it. People need to know this so the core community has started marketing with voluntary funding. We have started PR as well. Adding more developers has been a fruitless. I’ve tried. So I realized again, I’ve got to code it alone. This is exactly how BitHalo got made. When you want something done right, do it yourself. This is why the best coders in the world are so expensive. They are worth it. When the project grows we can most likely review the projects requirements again.
For you, what is the most important factor in the success of a project like Bitbay?
Technology – decentralized pegging is all about controlling price and reducing volatility with technology. We don’t want or need speculators, BitBay can succeed without them because we are relying on technology and not trying to shake people for cash. Crypto is about moving BEYOND the dependency for money, third parties, middlemen and people who aren’t worthy of trust. The whole point is to reverse all of that. The only way to do it is with CODE. I’m not asking anyone to trust the project. Just watch what happens. See the technology and what it can do. And see how it benefits the world with unbreakable contracts and the rolling peg. You don’t need trust in a 2 party escrow… that’s the point. You don’t need trust in a rolling peg, the community decides the price that suits their needs the best. It’s perfect for small economies that need to grow. And like a plant, it will grow.
We often talk about the problems of governance and economic model in the cryptocurrencies. What is the governance and business model within the BitBay project currently? What is the future BitBay economic model for you?
The thing is, BitBay has voting. So the community can vote on whatever they want. Features, forks, etc. The developer does usually drive the project, I understand that. This is the problem with Bitcoin that has hit a stalemate. Any form of governance is bad. History proves this. Bitcoin core is betraying everything Bitcoin stood to protect against. This is why the future is of course in altcoins! When people see this infallible truth, they will see how companies will have their own blockchains, small communities will have their own blockchains. And thanks to BitBay’s pegging, nobody will need to worry about violent price fluctuations that don’t suit the community ever again. There is probably a million ways to take advantage of BitBay economically. We have unbreakable contracts so all agreements can be made internationally between untrusted parties. No borders, no need to worry about theft, no need to worry about middlemen. You can replace insurance with self-assurance, you can barter, we already have peer to peer cash and people have successfully bought through our markets. LocalBitcoins is dangerous and constantly having honey traps. Of course BitBay doesn’t suffer from this problem so a person in Nigeria can buy BitBay from another person in Russia. They don’t need to trust each other and they don’t need to use an escrow agent because the contracts are secured by deposits. The software itself can be used to microtrade under double deposit. People can set up binary options. So when thinking of profit models, its almost limitless and I haven’t even really thought about it for the projects income. To be honest, I just want to finish what I’ve started.
BitBay may seem complicated to use for non computer experts, what is your solution to enable all citizens to simply use Bitbay?
We have done a lot of things over the years to make everything easy. The software comes with an installer, a wizard to help guide your through the setup of your account, lot’s of help boxes, training videos and tons of user friendly templates. So we think it is actually one of the friendliest cryptocurrency clients in the market. It translates to 92 languages and the software will figure out all the deposits for you so you don’t have to. This is thanks to the contract templates. For example, when you want to buy coins, the process is very simple. You fill out all the information for payment options and the amount you want in fiat/USD. For advanced users, the contract even tracks the market price of BitBay so you don’t have to. Similar templates exist for hiring people, bartering, and purchasing goods. BitBay might seem confusing to people because there is so many features and many people don’t know how double deposit works. But when they learn about it, they will find how extremely easy and fast the client really is. In BitBay, contracts take minutes due to the fast blockchain. Change doesn’t happen overnight, but things have been growing quickly as people begin to see the advantages of unbreakable contracts. So we hope people will download BitBay and see what a labor of love it has been for me 4 years and 50,000 lines of code later. I’m telling you blood, sweat and tears were shed to make that software a reality. When people realize what BitBay and BitHalo can do, they will stop using Localbitcoins, they will stop using Odesk and Freelancer, they will start bartering with it and doing decentralized exchange and not pay a dime in fees.
One of the innovations of the project allow some control of the BitBay value. Can you explain just what it is? What are the benefits for investors?
Actually it’s funny you ask. We were doing a PR campaign and the original article was all about pegging. We then realized this is our « ace » in the hole. It’s probably the best innovation in crypto right now. So we saved the whitepaper and article for later this year when we start testing. But basically, the problem with other pegs is they are centralized or they don’t allow price growth. Tether depends on backers, BitUSD depends on BitShares and trading, NuBits depends on custodial wallets and outrageous interest rates and burn with no advantage to investors and it’s centralized. BitBay is decentralized and allows price growth because the coins freeze themselves. The coins have memory too so they know when to unfreeze and freeze again. This means early investors have the benefit of being able to use their frozen funds when the volume increases and they become unfrozen making them available again. Their liquid funds are worth a lot more money because the supply is reduced. Exchanges can’t sell frozen funds because then withdraws would fail. So they are forced to honor the peg. This prevents dumps on the market… crypto’s biggest problem. We allow the sale of frozen funds in at least a one month time lock so users can speculate on frozen funds. And they would want to, because they serve as a bond and give them more chances to stake and also they serve as a future if the supply inflates. Also, the more frozen coins you hold the more likely you can vote with your stake. The community decides the price by voting so it’s completely fair. Price can go up and down, but it does so at the will of the community – the ones with the vested interest. So they will let an algorithm cast that vote which will always look for the best volume and price until it hits a sweet spot or they can vote manually. With this in place it is a perfect environment for merchants because the currency is stable yet holds growth potential as demand and adoption increase.
What is the total number of BAY in circulation currently and why was it chosen?
The ICO set BitBay at 1 billion coins. Currently there are a little over 1 billon coins in circulation after you account for 2 years of POS mining. I was not the one who decided the amount of coins for the ICO. That was Steven’s choice as he was the one who started negotiation with me and was the one who started BitBay with his partners. He had asked me for ideas and I explained pegging and he liked it so that was added. I did it with the idea to protect investors if the founders turned out to be unreliable. I’m glad I did that. They knew I was working on decentralized markets which is why they chose to do the project based on decentralized markets… because they wanted me for the project. It was so convenient for me because I was already working on decentralized markets. So the billion coins supply is a good choice actually… I would have done the same. The pegging will change the active supply daily by freezing and unfreezing supply. I’m sure eventually we can even increase the interest rates if the community thinks more coins are needed. Again, that’s the beauty of including a decentralized voting system built into the Client UI. But for now, the interest is simply 1%.
General questions about blockchain technology
What do you think of governance issues in the crypto currencies? From an outside vision and only for monetary projects, community projects brings the confidence necessary for the adoption by early adopters, but this raises difficulties in terms of governance, agility, and innovation. What is your point of view, knowing that you’re also a developer for the Blackcoin project?
The biggest problem society has is too much governance. Government has long been the unfortunate enemy of freedom. Humans have lost so many of their fundamental human rights that they have completely lost touch with nature. It should be known that law and morality are not one and the same. And I’m sure many people would agree with me here that the legal system is fundamentally broken. Crypto can change and fix many of these problems. Such as in the case of double deposit escrow, we no longer need to rely on biased judges and arbiters who can’t possibly know the truth. Many times in court, the judge and jury simply guess based on the information presented. It has landed many innocent lives in jail. However, we all want more widespread adoption so hopefully it stays unregulated. It would be contradictory for me to preach regulation when my software is famous for removing middlemen. In great benefit to society, this technology has the chance to reduce legal bloat and frivolous lawsuits and to give hope to smaller communities wishing to trade and to impoverished countries without trust in banking. I am also one of the developers for Blackcoin. That was because when I first developed BitHalo, I needed to implement the technology into a faster currency. I did not want to make my own coin at the time since I was not trying to get money out of anyone. So it was natural to choose Blackcoin which at the time was the only full proof of stake coin.
Laws are constantly changing in the world. Do you think that anonymity, as developed in many projects including Blackcoin, will still exist in 10 years? What is your opinion on the future of the crypto anonymous currencies?
Anonymity is going to be dependent on technology. First off within the blockchain technologies such as « zero knowledge proof » and the ability to trade from one blockchain to another, makes coins mathematically impossible to trace. Also, there is no legal framework to prosecute anyone because there is plausable deniability since there is no name on any Bitcoin account. The only circumstantial evidence to the owner of an account is an IP address. But an IP address cannot be used as the primary method of discovery because those can be spoofed by malicious parties. Still, nobody will be completely anonymous until the IP addresses can be either encrypted or eliminated completely. Thus, the rise in mesh networking and 3d printing using routers and phones might be a potential solution to that. Also, when ordering projects and giving out your mailing address you cease to be anonymous. I believe that people will fight for their privacy as they should. It is a matter of checks and balances. The government spends all its time fighting for power over everyone and spying on everyones personal affairs. Enough is enough and people see that and they seek safety in technology. People want free trade, without middlemen. There are those who will seek to destroy that freedom for their own benefit and then there are those who will defend it at all costs. I’m simply working on technology to solve problems. I cannot know if anyone will use the technology but at least people will know that the options are here when they need them.
What are the projects you like the most in the crypto currencies? and why?
I’m a fan of the idea behind Gridcoin since it tries to use the massive amounts of mining power for a more positive reason. To donate the mining power to scientific research. Bitcoin is a humongous waste of computing power, probably the worst waste of computing power in history… all to generate hashes to get some coins. It is fruitless and we can put the worlds biggest supercomputer to better use. Ethereum is interesting since they expand on the scripting language. However, they seem to bloat the blockchain by storing too much data on it. Also they have proven the be very greedy and irresponsible with peoples funds. To this day they still do not have a good looking user interface and almost no demo contracts in their client to show people what it is capable of. After raising as much money as they have it seems like they have completely misappropriated funds and then there was the DAO problem. So I hope to see more optimistic projects that expand on Ethereums concept without bloating the blockchain. I’m a fan of Factom! I’ve met Paul Snow and he is a smart and cool guy. I believe that Notary is a great use of the blockchain, one of the best ways to use it. There is a few others that I find interesting but the projects are too young to know for sure. I actually believe that the huge revolution in crypto will happen when companies start entering the blockchain. So for example, when a construction company enters into it to build houses and share profits from rental and sales to investors. They will not need to know about blockchain, just simply do the accounting on the chain and pay dividends out based on what people hold. They could require time locks so the money is bonded and supply reduced. There is almost infinite potential when companies get involved. I realize there may be regulations in some countries and not all and that is the huge advantage. For example a person in China could invest into a real estate firm in Brazil. This is the true potential of crypto and nobody has touched it yet.
What is your feeling about the future of bitcoin and ethereum?
Their future is bright. However, I think both of them need to get their act together. Especially Bitcoin. It seems that there are self-appointed devs to the Bitcoin Github who stonewall any serious changes in the protocol. These guys did not code Bitcoin and they should not coincidentally or deliberately sabotage future developement. Then there are large mining pools who aparrently have almost centralized control over the fate of the coin. When coding I add hundreds of lines within a few days. Bitcoin can’t even seem to agree on a single line regarding block size. So perhaps the future is in altcoins. The reality is, these projects have been media darlings but they are technologically inferior to other projects, especially Bitcoin. This is only proof of the power of marketing and branding which can overshadow technology. As I stated previously, Ethereum has spent too much time marketing and fundraising and not enough time coding. They do expand on the scripting system so that can lead to some extremely creative accounting, however this is not without it’s risks and I think they should try solving the issues with bloat before getting too far in over their heads or they may end up centralizing. The lightning network is also this way. Unless very rich Bitcoin holders are the ones to route payments, the payments will have to be IOUs since to perform lightning you need to have many joint accounts between users. However if IOUs are issued then that creates a security problem since a hacker needs only to collude in his 2 of 2 account to double spend negating what was owed. So it must be done with live funds and the solution is still pretty messy. It is nonetheless, the best solution so far for reducing bloat so I think they should work on getting it released.
POW, POS, POW/POS, what is your opinion on security issues in the projects blockchain?
There is currently no perfect consensus. However, the one that is the best is, one that uses the lowest amount of energy and keeps nodes connected. So proof of stake is the obvious choice here. The proof of work system has quickly centralized and it discourages smaller nodes to participate since they would need to join mining pools and burn tons of electricity. Proof of work was a nice way to kickstart things but now it is nonsense. There are also many proof of stake derivatives such as « proof of activity » that I find interesting. And actually even though this may sound counter-intuitive, I think centralized blockchains have their place in society. Basically a blockchain with witnesses where it is hosted on a server. This makes for almost immediate payments, much larger bandwidth and bloat reduction, and ease of deployment and use. It does create a liability and security problem though since witnesses may not be able to prevent fowl play or sabotage. So the design of something like that is critical and I’m intersted in seeing what people come up with. Then again, this is why I’ve designed my platform in this way. BitBay has very little bloat, the contracts and markets are peer to peer, and it will eventually have a solution to volatility. So the future is very bright for cryptocurrency.
Stay tuned and follow BitBay :
- Website > http://bitbay.market/
- Slack > http://bitbay.market/wp-login.php?action=slack-invitation
- Bitcointalk > https://bitcointalk.org/index.php?topic=890531