On 13th March 2020, our CMO Sean had a Live AMA session with President of Tezos China, Sandy Peng and Board member of Tezos Foundation, Ryan Lackey on Crypto.com's Official Telegram Channel.
Sean:Welcome to the Tezos x Crypto.com Community AMA!
While we have all been watching the markets carefully. Let’s try to stay positive and look for the opportunities ahead. Our chat is muted for this AMA. We will open shortly for Live Q&A so please bear with us.
Sean: Today we are welcoming two guests from the Tezos Team. Sandy, President of Tezos China and Ryan, Board member of Tezos Foundation. We’ve got a lot of questions for you Sandy. But to start, can Sandy briefly introduce the Tezos project and your role in Tezos?
Sandy: Hi Everyone in the Crypto.com group! Thank for having us here. Ryan is currently in Barbados, and I’m speaking to you from Shenzhen.
Tezos has been around for a while, and I’m guessing for most of you, this is not the first time you’ve heard of it. It is a cryptocurrency developed by Arthur Breitman and Kathleen Breitman. It’s an blockchain that hosts dApps and smart contracts. Its native token, XTZ, is popularly-known as the Tezzie. In the Chinese community its been given the nickname Tuzi or “rabit” because of it sounds like Tezos in Chinese. The platform uses community input to improve upon its flaws and create a fast, secure, and efficient blockchain platform.
I am a Director at Tezos China. I’ve been an investor in the cryptocurrency space since 2013, and I’ve been following Tezos’ development on and off. I officially became a Director at the Tezos China foundation towards the end of last year. Part of our thesis was that in 2020/2021 we will see more consolidation in this space, and the protocols that will likely succeed are those with real use cases and a more institutional DNA. Another thought we had was that the crypto community is small enough as it is, and we were looking for a platform that can unite more users and absorb the latest technology rather than spinning out more tokens and ICOs. Hence I was interested in working more closely with Tezos.
Sean: Thanks for your introduction, Sandy. Tezos was one of the first projects I heard about when I started looking into Blockchain. Now let’s jump into the Q&A section! (Pre-collected questions) We will have 10 questions before we open for live questions.
Ryan Lackey is the Chief Security Officer (CSO) and Council Member of the Tezos Foundation. He can’t be with us right now because of his travel arrangements, but I can share some of his pre-prepared answers here.
Q1. What makes Tezos (XTZ) cryptocurrency unique in comparison to other blockchain projects?
Sandy: Tezos is unique in the way that technical upgrades can be folded into the chain, so there will not be a fork in the future. There is an on-chain governance process which ensures the interests of all the stakeholders can be sufficiently debated and reflected in a public forum. In addition, it has a vibrant and loyal global community of sophisticated crypto investors which is rare.
As Andrew Carnegie said, “teamwork is the fuel that allows common people to attain uncommon results”. Tezos consists of a large team of diverse people, each working to achieve a common goal of using Tezos to improve real businesses, improve efficiency and transparency. So I think it’s bound to go far.
Ryan: Tezos is a true digital commonwealth -- a community with various interests, entities, and behaviors, with a governance system to make decisions as a community, and with a lot of potential for the future. There are other blockchain projects with some of these (and with some, they have much larger businesses operating within them, or larger numbers of community participants), but the unique thing about Tezos is it has strong representation in each category, with a well defined governance procedure.
Tezos has some great characteristics which make it a very strong blockchain project, and it's the combination of these things which will ultimately make Tezos incredibly successful. We believe Proof of Stake (PoS) is a particularly good model (compared to Proof of Work (PoW)), and the market seems to agree -- people are migrating from PoW to PoS and not the other direction.
The initial Tezos fundraiser was a success as well -- both in the very important sense of bringing together a broad community of people with genuine interest in the long-term success of the project, and in providing resources to the Tezos Foundation to fund public goods for across the ecosystem, without putting the Tezos Foundation in a position of controlling the network.
Some of the initial technical characteristics of the project (functional programming, OCaml, strong interest in formal verification, security, etc.) were themselves good for their own sake, but also good because they attracted a great community of developers. If a project is primarily marketing-led, it's less likely to have the kind of longevity through various adversity that a project with a technical focus will have. A great thing about a project with lots of great technical talent is that whenever there's a disagreement about the way forward, discussions tend to be based on evidence and facts, with various proposals evaluated on their merits, rather than as a cult of personality or based on hype or fear -- even when the decisions are about marketing or product and not core technology. Another unique and great thing about Tezos is our particularly strong French presence, with the top core development team based in Paris -- they bring a slightly different perspective to the project vs. a lot of other places with blockchain projects.
Sean: There is plenty of adversity to overcome. A great overview of the approach you all take.
Q2. I like the concept of On-Chain governance that Tezos has. Can you explain a little bit how it works, how the bakers participate and vote, and if you had already any occurrence of it?
Sandy: That’s a great question, thank you.
Ryan：On-chain governance is a way of explicitly allowing token holders to vote on protocol upgrades or other enhancements to the changes to the Tezos core protocol. All projects have some form of governance, but it's often not explicit, and rarely as broadly participatory as the Tezos model. Essentially, the Tezos model is "one token, one vote", with Tezos tokenholders delegating their token voting power to "bakers". These bakers can be run by anyone with moderate technical competence and at least 8000 XTZ as a security deposit, so it's an open and competitive marketplace; rather than running their own baker, many tokenholders choose to delegate their tokens to other bakers for a small fee (5-20% of the baking rewards earned seems to be the prevailing rate right now.)
Sandy：It’s quite a technical process which you can find a detailed analysis of on https://www.tezosagora.org/learn#voters--bakers This happens every time there is an upgrade. We communicate that well beforehand in the Tezos technical channels and well as the various community groups.
Q3. Tezos uses "baking or delegating" instead of POW or POS; Could you explain more about what this is about?
Ryan："Baker" is the Tezos term for "validator node".Tezos uses Proof of Stake (PoS), specifically "Liquid Proof of Stake (LPoS)", with the distinction being users can delegate their tokens to bakers and instantly withdraw and re-delegate those tokens. Delegation provides voting and validating power to the baker, but without giving the baker any control over the keys or token itself (so there is no risk to users that a baker can steal their funds).
The biggest risk a user takes in delegating tokens to a baker is that the baker will fail to return any rewards agreed as part of the agreement to delegate those tokens -- to date, most of the time those rewards are somewhere between 80-95% of the baking rewards earned based on those delegated tokens, but that's not necessarily the only way someone could structure a baking relationship -- all of this is an emergent behavior in the ecosystem.
A great thing about this system is it allows a lot of flexibility. The baker nodes are an open set, and anyone can become a baker, either based on technical skills and interest, or if the market starts to price baking services highly. We actively do want to have a geographically and technically diverse set of bakers, as this makes the network as reslient as possible, and the "baker community" is one of the biggest successes of Tezos to date.
Sean: Great to better understand that aspect. The next question relates to Tezos in the real world.
Q4. What are some real world use cases of the Tezos block chain that are in the pipeline?
Sandy：Tezos has been maintaining its focus on financial applications. STO being a main focus as some countries are coming up with regulatory regimes to oversee this area. There are teams working on stable coins, games, onchain group-invest type of applications, as well as using Tezos in data processing, data storage, payment tracking etc.
In the future, I think Tezos will consolidate its leading position as the protocol of choice for financial applications and then move on from there to tackle one area at a time.
Ryan: From betanet launch (2154 CET on 30 June 2018 in Paris...), Tezos has supported user to user value exchange and payments. This is itself a compelling application, and was the original and still largest use of blockchain technology in the world.
Since launch, people have been free to build applications and use cases on top of Tezos. We've seen a lot of experimentation, ranging from core user infrastructure (wallets, block explorers, indexers, various programming languages, smart contracts.) This experimentation both reveals real-world use cases (we see strong demand for mobile wallets with great UX and support of rich Tezos functionality) and enables real-world use cases (you need block explorers and wallets for these applications).
Right now the strongest application traction we've seen has been in a few clear areas.
a. Digital assets: this includes Security Token Offerings (STOs), but also a much broader world of taking real-world assets of various forms (real estate being particularly appealing), creating a digital token representation, and enabling ownership and trading of those tokens. There are multiple initial projects in this space around the world (with each hopefully being a first asset among many to launch) -- the Elevated Returns project in Thailand, BTG Pactual in Brazil, Alliance Capital in the UK, Fundament Group in Germany, among others.
b. Payments: if you look at the daily volume of XTZ transactions, it's reasonably large and growing. In order to really drive this forward as a key use, the community is developing stablecoins (such as USDtz and ex.rs), point of sale solutions, and better payment-optimized wallets. The recently-finalized FA1.2 and FA2 token standards have been instrumental in letting people bring these solutions to market.
c. Gaming and digital collectibles: This is an exciting use case for Tezos, and there's a very exciting community project, Coase, which is building a digital collectible card game (and platform) on top of Tezos.
d. DeFi: there are some innovative uses of the Tezos blockchain to create new financial assets directly in the Tezos ecosystem. In addition to the stablecoin projects above, there is a "wrapped BTC '' project, TZBTC; StakerDAO, which will use the baking model of Tezos to create a new type of asset, and other forms of financial experimentation and innovation.
Sean: Great to hear more about your focus on STOs but wow, so much more! The next question delves into your focus area -financial applications.
Q5. I see that Tezos have a great successful for blockchain adoption, so many crypto projects use Tezos Smart Contracts. But in the future time what idea do you want to bring to crypto? Doyou want to make a partnership with Banking to make the system more transparent?
Sandy: Thank you, that is also a great question!
In a recent interview is Warren Buffet, he said that a bank can “mail you a cheque” whereas cryptocurrencies cannot. He is right in describing a very fundamental customer experience that the traditional financial systems have nurtured and is perhaps very hard to break. However there’s a lot of room to improve the efficiency of all the work that goes on behind mailing a cheque; such as ledger tracking, lending, borrowing, interbank transfer, client’s fund custody etc, these administrative functions can all be improved and costs reduced using blockchain technology such as the one provided by Tezos. And that’s something I think even Warren would like to see from his portfolio banks. So to answer the question, I think a few companies in the Tezos ecosystem are working on various aspects to help banks improve their operational efficiency.
In terms of new ideas for crypto, I think the STO tokenisation aspects Tezos will inspire more exotic assets which previously haven't been priced or traded to be tokenized. That would hopefully unleash more creativity/ productivity, and enrich some people who were perhaps previously disenfranchised.
Ryan: The long-term vision of Tezos is to the best blockchain it can be, and to help people who need a blockchain to build amazing things to build those things. Tezos is basically the technology on which lots of innovation can happen.Tezos is certainly open to existing institutions (governments, banks), and Tezos Foundation and others actively reach out to these institutions and support them in using Tezos, as we feel it will be good for the long-term adoption of the Tezos protocol and growth of the network.
Personally I think there's going to be adoption of Tezos (and blockchain technology generally) by some innovative incumbent organizations within their own domains, but a lot of the innovation, use, and rewards are going to come via new organizations or non-traditional entities. Perhaps that's a general technology company using Tezos to enable an application which it couldn't otherwise have built, or a small team, or maybe some novel structure like a DAO. The great thing about Tezos is all of these entities are equal and can do as they please.
(Personally I think a large area of potential innovation which hasn't been as thoroughly explored is existing organizations with great talent and skills in the relevant areas, but without a lot of the historical products in, say, the financial industry, using a system like Tezos to innovate across domains. Maybe something like a game company using Tezos to make some real-world task as fun and easy as something which is done in-game, or maybe a consumer application developer using Tezos to enable collaboration across geographies. Not everything is as simple as "bank implements Tezos-based assets to sell to their existing customers" or "entirely new startup is created to build a new product.")
Sean: Great stuff. Next up, a question about Tezos network upgrades.
Q6. Can you please explain to us how Carthage upgrades will improve Tezos network? What are these improvements done in more detail? And a second follow up, there will be more upgrades done to the network? Considering that this is the 3rd time that Tezos has evolved since it was introduced in 2018. Thank you!
Sandy: Carthage is a minor upgrade, debugging some of the features launched before. There will be many more upgrades in the future as new technology features are being developed and introduced to Tezos. What is worth noting is how smoothly these regular upgrade happened in such a decentralised global community. It goes to show how Tezos as a group has evolved and matured overtime to strive towards a common goal. Ryan will be able to add more colour from a technical perspective.
Ryan: Tezos undergoes multiple forms of upgrades.
One, there's a continuous process of upgrading (new features, bug fixes, new external tools) and development of new tools in the overall ecosystem. Some of this is the "shell" (part of the Tezos node software), some of it is external/third-party software built on top of the rest of the Tezos system (such as wallets, indexers, and block explorers), and some is essentially external software which uses Tezos through well-defined external interfaces through those tools. This stuff is updated through Gitlab and Github repositories, by large numbers of developers in various teams (some working together, some competing), and is pretty similar to traditional software, although in the Tezos world, almost all of this is open source for a variety of reasons.
Two, there's a subset of the Tezos system which needs to be shared by all participants to keep the economic and security model consistent -- the "protocol". This is the part of Tezos affected by "protocol upgrades", which are the unique-to-Tezos on-chain governance actions. So far, we have had three of these (Athens, Babylon, and now Carthage). We anticipate these changes happening with a roughly every 3-6 month cadence, becoming less frequent over time as the system evolves toward a long-term stable state.
The specific changes involved in Carthage were primarily bug fixes for various aspects of the baking model. We have been doing an "even/odd" upgrade cycle so far, with Athens and Carthage being relatively minor bug fixes, with Babylon containing some more substantial changes to how Tezos addresses work. The next protocol upgrade (which will start with the letter D, although the specific city is still up for selection) will probably include more functionality.
(There are some great blog posts about the specific upgrades themselves, and I'd suggest referring to those for details -- the core dev teams have also done AMAs of their own to discuss these.)
Q7. Can you explain about Tezos Foundation and Ecosystem Grants?
Ryan:Tezos Foundation is a Swiss (Zug canton) foundation with the purpose of advancing the Tezos protocol and fostering adoption throughout the ecosystem. In the Tezos fundraiser back in 2017, contributors donated funds (BTC and ETH) to the Tezos Foundation for this purpose. Tezos Foundation is governed by an elected Council of 7 members (I'm one), and we interpret this mission as using the Tezos fundraiser funds and other resources to do a few core things:
a) Funding the creation of public goods which make the Tezos ecosystem better.
b) Funding organizations which create public goods within the Tezos ecosystem
c) Maintaining various assets for the good of the Tezos ecosystem (certain domain names and other difficult to decentralize things), including fundraiser proceeds
d) Fostering adoption of Tezos in some specific use cases which will advance the overall ecosystem (particularly where there's a chicken and egg problem, i.e. where someone won't build a service until there are users, and where users won't use the service until there it is developed to a pretty high degree)
Tezos Foundation publishes a report of our activities every 6 months (the next one will be released very soon, it's in final review).
Part of how we at Tezos Foundation accomplish the above is through grants. Our grant process has undergone a few evolutions, and we're working on making it as streamlined as possible for people to apply -- essentially, making it very easy to get relatively small initial grants to do a proof of concept, then future and larger grants based on success with those initial grants. There are larger grants as well, generally to established entities who will add Tezos functionality to their products or services, or organizations with a track record of delivery. Some Tezos Foundation grants are to academic and research institutions (both for research and for some core infrastructure like enhancements of OCaml and libraries used by Tezos), but many are to commercial companies, small teams, or individuals. In the most recent call for proposals we received approximately 120 submissions and we're working our way through them.
Sandy: at Tezos China we don’t deal directly with grant applications, but we do work with local teams to explore areas where they would be better positioned to receive grants from the Foundation in Switzerland. I think that’s also the case for a lot of regional Tezos communities.
Help them better understand Tezos core objectives and find ways to help them contribute to the ecosystem.
Sean: Thanks for that background and insights into the Foundation. Inter-operability is a key topic. The next question speaks to this:
Q8. If Tezos wants to launch DEFI, how to cross-chain to support other assets?
Sandy: I know cross-chain interoperability has been a big theme in the industry, so far Tezos hasn’t been at the forefront of that discussion, but I think that might be about to change. Tezos is a rich ecosystem with many parties and many differing opinions, and there’s nothing stopping anyone to develop DeFi or any other features that has appeared first in other protocols. I hope they do it so that Tezos can encompass all the great ideas that the wider crypto industry has brought to existence.
Ryan:Tezos has a few ways to do cross-chain DeFi. One is wrapping off-chain assets (e.g. TZBTC, which is a wrapped BTC product on the Tezos blockchain). Another would be to use oracles to link chains somehow. This is an area of constant innovation, and I'm excited to see what evolves in this space.
I think a lot of people realize a lot of DeFi activity has taken place on Ethereum to date, but I think there are a lot of inherent advantages to conducting that activity on Tezos, so I'd like to see a DeFi ecosystem develop on Tezos as well. I believe this is a broadly held belief within the Tezos community.
Q9. How is the Roadmap looking for Tezos Strategy & Mission 2020 - 2025 and which short-&-middle term Key-Milestones will be reached?
Ryan:Tezos is unique in that it's decentralized. Individual entities (core protocol teams, a wallet developer, etc.) may have their own roadmap for the next 5 years, and as part of grant funding I've seen a lot of 1-2 year plans from various ecosystem entities, but there's no "Tezos Master Plan".
Tezos Foundation itself has some goals for itself for the next couple years, communicated in recent blog posts. Specifically, we're redesigning our internal structure to have a more governance-and-strategy focused Council and then operational and day to day matters conducted by full-time professional management. As part of that we're trying to become more efficient on various things like turn-around time for grants, even more robust financial reporting in line with Swiss regulations (which have become more stringent as our assets have increased, due to crossing certain asset thresholds), and improving our global representation.
Periodically, various ecosystem participants get together to talk about their individual and collective visions for the future. We recently had such a session in NYC (and I'm flying back on a plane from it right now), and it was great to see a diversity of viewpoints, although with a lot of common goals.
If you want to know what things I am personally most excited about seeing in Tezos over the next 5 years, I'm happy to share that.
a. I want to see Tezos become widely used for really significant use cases (where they are use cases with great benefit to the individual users, and at least moderately large numbers of users; I personally weight lots of impact to a small but growing community above a smaller impact to a large or static community in new technology development, as truly happy users are the key to building "missionary" users who spread the protocol to others)
b. I want Tezos to have truly world class testing, deployment, security, and infrastructure tools so it genuinely can be trusted with applications of extreme scale and importance. Tezos is great for current-scale up to maybe 10x current scale, but whenever a system grows, it exposes areas of weakness. One thing we've seen a big need for is testing of network and systems at scale when changes are made. Another area of constant concern for cryptocurrency and blockchain projects is security, and I'd like to see enhanced use of secure computing hardware (with baking taking place on the Ledger Nano platform, we're already by far a world leader, but it's not enough).
c. I want Tezos to enable individual liberty and empowerment globally, and specifically financial inclusion and financial privacy. To do this, Tezos needs to be widely adopted with large numbers of users, which means it needs to be efficient, low-cost, and have very simple and streamlined UX. At the same time, I want it to remain as decentralized as possible, without gatekeepers, and I want technology implemented (such as zk-SNARKs and other privacy enhancing cryptographic primitives) to enable fungibility and privacy of digital assets.
d. I want Tezos to support applications with large financial values on the system, as this is the best way to ensure it is financially self-sustaining and can attract the best talent globally. If Tezos is used to power a global real estate market, that can easily be tens of trillions of dollars protected by the system. Entities using such a system will be able to make investments to keep themselves safe, and at the same time, those investments will create technology and infrastructure which will keep smaller startups, inherently uneconomic activities (voting, NGOs), etc. secure as well.
Sandy: I will only speak to the Tezos China strategy and mission. Our Mission has always been to further engage with local communities, educate and promote Tezos technology, and develop institutional use cases to service the local community. We are hoping to do more online AMAs, receive and review more grant applications, connect deeper with industry partners in the region, all the while managing our communication with Chinese community members. In the coming years you will see us engaging with larger organisations, and delivering more ambitious projects in arguably the largest crypto market in the world.
Sean: With development, governmental relations are quite important for any project, company, and industry. The final pre-submitted question discusses this.
Q10. Tezos aims to "drive social, political and economical innovation on a global scale". Taking into account for example how Authorities have been so much skeptical and reluctant to accept Bitcoin as a real thing, and being Tezos as disruptive as it seems, how does it fit in the current system? Wouldn't governments and public entities feel threatened? I wonder whether they will see Tezos as a tool or as a threat.
Sandy: Thanks, that’s a great question also. Compared with some of the other chains and protocols, I think the Tezos DNA has been a bit more institutional leaning. All the Foundation Board members have had years of traditional corporate experience or academic experience. I have met more PhDs, and highly educated folks in Tezos than I have done at any other blockchain projects. So I think overall, it is easier for Tezos to connect with traditional institutions that value perhaps a more old school way of communicating. And that can be glimpsed from Tezos being the first protocol to be a technology provider to the French Army, and accepted by a group of major Automotive Manufacturers in Germany as the blockchain to process autonomous driving data. These are stamps of approval for the Tezos technology, and also a testament to the Tezos Ethos of working and assisting traditional corporations to make incremental improvements to their operation using blockchain.
Ryan: Tezos is a unique system compared to bitcoin in that Tezos has much more flexibility in how it is used. Hypothetically, Tezos could be used by a government to implement something like a distributed identity system to facilitate educational credentialing, licensing, voting, and other forms of civic participation, things those governments explicitly seek to promote. So, certainly it's possible that Tezos could be viewed for specific applications as basically an unalloyed good and pro-government thing. It's also possible for someone to use Tezos to build something a government might not like -- perhaps cross-border capital flows which encourage local investors to make investments in foreign assets instead of domestic assets, even without the existence of formal capital controls, which might make a government policymaker unhappy (but equally, it could enable foreign direct investment, which would likely make the same policymaker happy). Ultimately, I don't think governments tend to care about technologies themselves, like blockchains or databases or radio communications, or even about specific instances of those (like Tezos or MySQL or 5w VHF walkie-talkies) -- they care about end user applications. We've seen exactly the same thinking with respect to the Internet over the past 40 years.
I'd certainly hope applications are built on Tezos which are broadly supported by people globally, including people in governments and institutions. Tezos is definitely a tool, and I think it can be a great tool for good.
Sean: Great stuff. Thank you for your insightful responses Sandy and Ryan. Also for the great questions from our community. Now it’s the Live Q&A Session! Get your questions ready! Sandy and Ryan will choose 10 in total and will address it accordingly.
Selected questions will share a pool of 50 XTZ and 2500 CRO and the prize will be distributed through the Crypto.com App.
Live Q1. What are the benefits of tezos cooperating with crypto com. Can you explain it briefly?
Sandy: I have been an early user of the Crypto.com app and Visa card. And I understand the value of its vibrant community. Any project that has brought utility to so many crypto users we would love to work with. This AMA is just the beginning, we are hoping to launch more exciting collaborations in the future.
Live Q2. Is it true that the Tezos Foundation plans to develop a new Tezos node to write in the Rust programming language? Why is this knot important for the future of Tezos? What advantages does the Rust language offer for programming?
Ryan: Yes! Tezos Foundation has funded a grant for someone to re-implement the "shell" of the Tezos node in Rust. Rust is great for a few reasons -- it's a larger developer community than OCaml, and it's got a lot of interest from security-minded network developers. Another huge advantage is that by having multiple implementations of the node in different languages, we're likely to both find bugs during testing AND have resilience against problems on one of the platforms. For now it's just part of the node, but it can also be used as a firewall/filter in front of the existing OCaml node.
Live Q3. One thing that frustrated me when dealing with XTZ is that the long turnaround requires a lot of confirmation. Why doesn't Tezos have immediate finance like Algorand and Cosmos? Is financing immediately something possible and planned for Tezos?
Ryan: Fast finality is absolutely something we're interested in, particularly for payments. Right now it's a trade-off -- by having a large, open validator set, we're censorship resistant, but it means you need to wait for consensus. There is an active effort with Cryptium Labs and some other people to find better/faster consensus solutions for a future protocol upgrade, but we need to do it in a way which is also resistant to some of the potential problems with something like Cosmos/Tendermint -- if they lose enough of their nodes all at once, it's impossible to restart. That's an easy enough thing to fix in a small validator set (you can manually get everyone back online), but with a large, open validator set it is impossible. We have some great solutions to that, though.
Live Q4. Hi there I am fascinated to learn how the focus of tezos development might differ in China to elsewhere?
Sandy: Tezos is truly decentralised in the sense that each regional community comes up with their own goals and objectives. In China, we try to listen to the requests and needs of our community, and think of how to deliver that while being aligned with the Swiss Foundation and all the other organisations in the greater global community.
Live Q5. The Indian Supreme Court has lifted the Reserve Bank of India's banking ban on cryptocurrencies. What impact does this have on the development of tezos in India? any plans to build indian community?
Ryan: I was surprised but also very happy to see the Indian market open up. There are a huge number of amazing entrepreneurs and developers in India, and to date they've been kept out of crypto, or had to go overseas to work in the field -- plus it is a market where the benefits of crypto can be amazing, with lots of users, less developed financial infrastructure, and a huge economy. We have Tezos India (a community group) in India, and we also have several grant recipients doing development on various projects there.
Live Q6. Could you give me the key points to convince the community members to invest in $XTZ in the long-term?
Sandy: No matter what happens in the market today or next week, I think Tezos will be around and thrive for a long time. It has a stable team of excellent technical and marketing members who will work to engage institutions, and help these institutions better protect themselves by improving their operational efficiency. I think recent market turmoil has only added to the urgency of Tezos development and that’s a great reason to join Tezos community for the long run.
Live Q7. The crypto world is becoming overcrowded with blockchain projects. What are you doing to make the TEZOS project truly unique?
Sandy: The crypto world is indeed becoming quite crowded. But only projects with strong execution will have the staying power. Tezos has been very active in some many communities and helping so many startups and large traditional organisations I think it is hard to ignore. In the next year or so it will become even more evident as more of our collaborations and investment yield results.
Live Q8. I understand part of your team is in China. How does the recent COVID-19 affect harmony, especially technically? What precautionary measures do you have to secure your team?
Ryan: This is actually a global issue now, and something I've been following closely. I think China is probably one of the safer places in the world for covid19 now, given the government's actions and efforts of the entire country. Sandy could speak for Tezos China, but they seem to be handling it very well, just with much less international inbound visitors or travel and more remote work.
In the rest of Asia, our South Korea, Japan, and Singapore teams have been handling things very well. Mostly through mask use and sanitizer, more work-from-home, and much more remote meetings, even with companies located in the same cities.
I'm much more concerned about the Tezos community in Europe and the US (and elsewhere), where government responses have generally not been as strong. In Switzerland we have multiple cases very close to Tezos Foundation, and I bought masks/sanitizer/etc. and we implemented a "work from home primarily" policy. We've postponed events and event-related travel.
I personally am planning to stay in my home (in San Juan, PR) for the next month or two. It will hurt productivity and collaboration somewhat by reducing travel, but it will also help by letting people be heads-down and focus on a lot of engineering work. This is a much bigger issue than just the Tezos community or crypto overall, it's truly global and affects everyone, and I hope we can all pull together and deal with it as well as possible.
Sandy: You are correct in saying China was the first country to be severely affected by Cov19. We have asked our team members to work from home since mid-January. And during this time, our bilingual team has joined a wider cryptocurrency group as volunteers to raise raise money and awareness for the virus. To date over 1 million units of medical equipments have been purchased and shipped to hospitals in Wuhan directly. It is due to our resilience as a team we are able to respond so swiftly. I hope everyone stays safe during this troubling time. Get plenty of sleep, stay hydrated, and avoid touching your face!
Exactly, like Ryan said, good time to buckle down and build!
Live Q9. The governments of some countries consider Blockchain as "the development of a country"! So, since Tezos is a blockchain of modern technology. Do you think that governments will take the services of Tezos for the development of their country?
Ryan: We're working on several projects with governments. One is Central Bank Digital Currencies (CBDC), where we're investigating ways to use a Tezos-based solution (a hybrid of a private tezos deployment and public tezos deployment) to let a central bank issue their own digital currency through their commercial banks. Another are identity projects, where governments use Tezos to do digital identity and credentialing. In general governments are great partners for blockchain projects -- they're a little slow to move, but when they do, it's easy to get large numbers of users.
Also - Tezos Foundation is very well capitalized and has had explicit plans to deal with a global crisis like this. We have a $100mm USD "crypto winter fund" in reserve for just such a scenario, so we'll be able to continue developing no matter what.
Live Q10. Tezos Blockchain uses PoS (Proof of Stake) consensus algorithms! But can you explain what are the advantages of the PoS Blockchain instead of another consensus such as PoW, PoA, etc.?
Ryan: There are a lot of great crypto projects out there (and I count Tezos as one of them). In general, PoA is used in private blockchains, where you have a very small set of validators who all trust one another. That works for certain things, but a criticism of such systems is "why not just use a centralized database?"
Proof of work systems, initially Bitcoin, are amazing as a solution to the consensus problem without trust. The problem is they use truly massive amounts of energy at scale, and the security of the system depends critically on that expenditure -- smaller chains with less resources invested in their PoW mining are subject to 51% attacks. The problem for a lot of use cases is the actual economic value of a system can be huge -- e.g. an STO system built on top of a blockchain, protecting trillions of dollars worth of assets -- while the token itself might have a low market cap and hashrate. As a result, an attacker could spend very small amounts of money to temporarily rent (or hack) PoW hashrate on that chain and attack applications built on top of it.
Proof of Stake seems to be where the overall industry is going. Tezos was lucky to have been one of the first big PoS chains, and was PoS from the beginning. There's a lot of great stuff about Ethereum, but one of their biggest challenges right now is moving from PoW to PoS ("Eth 2.0"). It was really nice for us to start from where they're try to move to.
Sean: Thanks for all the questions! Much appreciation for your insightful responses, Sandy and Ryan.
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