Year in Review 2019 - CoinDesk

“It is always wise to look ahead, but difficult to look further than you can see.” - Winston Churchill

Ethereum’s ‘Bazaar’ Development Model Will Pay Off in 2020


This post is part of CoinDesk’s 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world. Ben Edgington advises on Eth2 across ConsenSys. Prior to joining ConsenSys, he was Head of Engineering for Information Systems at Hitachi Europe.

My life would be much easier if I could give you an exact date when Ethereum 2.0 will go live, if I could show you a two-year committed road map or explain precisely how cross-shard transactions will preserve DeFi composability. I’m pretty sure failing to have answers on issues like these would have gotten me fired from my old, corporate job.

But I am completely confident of this: 2020 is Ethereum 2.0’s year of delivery. The signal event will be the genesis of the beacon chain in the early part of the year. With three or four production-ready clients and 500,000 ether staked, this new Proof-of-Stake chain will start completing the first and most challenging phase of Eth2’s delivery.

How can I be so sure of this yet relaxed about not having all the details nailed down? Well, that’s the magic of Ethereum’s development approach. It’s an approach I’ve learned to trust over the 18 months we have been building this. Amid all the market ups and downs and all the competitive uncertainties, this approach continues to deliver. I call it ethereum’s superpower.

Doing things the way they have always been done is not going to change the world. Ethereum’s ambition is to be world-changing. It has to be global, distributed, inclusive and empowering. Unless our development process is equally global, distributed, inclusive and empowering, then Conway’s law – that systems reflect the structures of the organizations that design them – says we’re going to fail.

So, as a developer community, we try to operate as openly as we can, encouraging participation through developer calls, GitHub issues, formal updates, informal updates and many other channels. All are welcome to participate, and many do. We nurture organic growth and are wary of any one party exerting too much control. To an extent, our approach resembles that of Linux, which has come to dominate much of the world’s computing. (Linux doesn’t have much of a roadmap either.)

This is the “bazaar” model of development described by Eric S Raymond in his classic work on open source software. But we’ve taken it further. We’re applying this approach to the development of the Eth2 protocol itself, its very design and the R&D behind it.

The idea is to inspire a broad community around a shared purpose and focus its collective energy on the task. Antoine de Saint-Exupéry put it like this, “If you want to build a ship, don’t drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea.”

This can look a bit messy. It can be a little chaotic and inefficient. The world can see our dirty laundry, which inevitably invites criticism. A report published in February recommended more “centralization of control” over development. A more recent article identified teams working “with different agendas and different timelines” as a risk area. In response I quote Scott’s Law: Never put order in a system before you understand the structure underneath its chaos.

Ethereum’s superpower is the engagement this approach inspires. By not insisting on being too tidy, we are able to engage a huge community. The sense of a shared endeavor draws in brilliant people who we might never otherwise have found. No fewer than eight independent client teams have delivered working Proof of Stake implementations. Do we need eight implementations? Perhaps not, but the engineering insight and expertise each brings serves to hone and improve the specification way beyond what any single team could achieve, across all areas from security to performance.

Another benefit of having an open, engaged community is getting fast feedback. Our initial scaling design called for 1,024 shard chains. People outside the core protocol team were able to review this and raise concerns about future developer experience that we were able to improve with a redesign. I am convinced that in a more traditional development environment this would have been addressed too late or not at all. We were able to pivot quickly, with very minor impact compared to the benefits gained.

Central to our approach is recognizing good ideas can come from anywhere. It’s fair to say that at the start of 2019, we didn’t have a clear view on how we would layer smart contract execution on top of the shard chains. The design space is large and there were many possible directions to explore. But, true to form, a proposal emerged on a community forum that was picked up by the Quilt team at ConsenSys that is now exploring and implementing the design.

Of course, our approach is not perfect. Some inefficiencies are real. But in our world it is a mistake to optimize for efficiency over engagement. In any case, our approach doesn’t seem to have slowed us down. We are very much on track with our expected development trajectory.

The real proof of our open, organic development approach will come in the first months of 2020. We are on track to go live with ethereum 2.0’s beacon chain, and the transition from Proof-of-Work to Proof-of-Stake will be officially underway – part of the vision of ethereum since its earliest days.

That’s the foundation on which we will continue to work towards massive scalability. I can’t offer you a detailed roadmap. But the brilliance and energy of our ever-growing community makes me confident that by early 2021 we will have a platform fit for one million devs. Why not come and join this extraordinary, future-changing community?

Blockchain Projects Are Just Entering the Netscape Phase


This post is part of CoinDesk’s 2019 Year in Review , a collection of 100 op-eds, interviews and takes on the state of blockchain and the world. David Nage is the Principal at Arca, a full service digital asset management firm.

“It is always wise to look ahead, but difficult to look further than you can see.” - Winston Churchill

Recently Jill Carlson wrote a piece for CoinDesk that inspired me to think through counterarguments to the points she shared. Much of the following is based on 100 in-depth interviews during the last year for Base Layer, my podcast. While I am a strong proponent of diversity in thought and opinion, and Jill is one of the most respected investors and thinkers in digital assets, I disagree with her piece for two reasons. One, I believe the time and scale of review doesn’t properly factor where in the maturation cycle things in digital assets are. And two, I believe it diminishes the work being done in the infrastructure of digital assets to propel adoption.

When I talk to my former peers in the family office world, I often discuss parallels between digital assets and past periods of technological innovations. The digital asset ecosystem needs to evaluate its progress (or lack thereof) against the historical diffusion of innovation. Below I discuss some key project updates with releases this year, showing maturation of the technology ecosystem.

A quick incidental point first. Jill’s article is titled “cryptocurrency is most useful for breaking laws,” which is apt. As Jérôme Blanchart describes in his book “Crimes of the Future,” criminals have always been early adopters of new technology. For example, the Bonnot Gang, a French criminal anarchist group that was active in the 1910s, were among the first to make use of a getaway car after their armed robberies. The police would pursue them were on bicycles or horseback.

Perspective is Key

In the early to mid-90s, I remember getting my family getting a first home PC, connecting a modem and hearing that horrible dial-up sound when signing onto AOL. It didn’t always connect and, many times when it did, it was painfully slow. I remember ugly hyperlinked websites and thinking “no way am I putting a credit card into this and buying something.” Then in ‘97-’98, when I got to college, second generation websites started popping up with better UI/UX. There was vastly better developer tooling, improved infrastructure, encryption and regulatory clarity. I think a lot of people who question crypto and blockchain now forget, or didn’t experience, these early days.

Jill writes about how we are collectively evaluating digital assets and makes a determination that: “I think perhaps we have been judging cryptocurrencies’ success (or lack thereof) according to a false metric. We would not judge a fish by its ability to climb a tree.”

Our judgement is marred by our collective time scales and expectations. We have become a society of “now.” Venturing outdoors to rent a movie, buy food or other household supplies has been replaced by a click of Netflix, Postmates and Amazon Prime. We expect to plug in a device or download an app and for it to work perfectly. In the early days, we just hoped we didn’t blow up our computer.


This shift in mindset to “on-demand” has altered our idea of how quickly things should happen, and in my opinion, has negatively affected our perspective on digital assets and blockchains. Most blockchain technology appearing now started as academic theory 20 or 30 years ago. For example, zero-knowledge proofs were first conceived in 1989 by Shafi Goldwasser, Silvio Micali, and Charles Rackoff in their paper "The Knowledge Complexity of Interactive Proof-Systems.”

In 1968, Douglas Engelbart gave what is known as “The Mother of All Demos”: a live demonstration featuring the introduction of a complete computer hardware and software system called NLS. The 90-minute presentation demonstrated almost all the fundamental elements of modern personal computing: windows, hypertext, graphics, efficient navigation and command input, video conferencing, the computer mouse and word processing. It wasn’t until the late-1990s that home computers with all of these capabilities entered our homes and workforces.

Jill says digital assets don’t provide “marginal improvements" on legacy financial services and systems and that "often blockchain-based systems will fail when compared to more conventional, centralized solutions.” However, in my opinion, there are companies and projects in the works that address problems in the financial system. To paraphrase Marc Andreessen, I believe we just entering the Netscape phase of digital assets.

Promising projects

Wyre, a company that predominantly uses the bitcoin blockchain, cuts the time and expense of cross border payments. While banks take up to three days and charge between 4-6% for international money transfers, Wyre completes transactions in less than six hours, charging less than 1%.

One of the more important developments in 2019 was the mainnet launch of Cosmos, an interoperable blockchain protocol that began work five years ago. It facilitates the transfer of data between existing chains creating an internet-of-blockchains. Prior to 2019, we have had disparate, distributed and decentralized systems being built to handle file storage, query, search and more – components necessary to build robust applications comparable to Web 1.0-2.0. Those components need to talk to each other and, without protocols like Cosmos, that becomes fairly impossible.

In a similar vein, 0x is a protocol that facilitates the peer-to-peer exchange of Ethereum-based assets. It released Version 3 to it protocol this year, an upgrade that will deepen liquidity for the DeFi ecosystem and improve the developer experience of building on 0x.

Meanwhile, projects are improving how they handle governance: the ability to get distributed groups of network facilitators to work together. Aragon is one of the most important projects in the space and after two years of design, development, and testing, the Aragon Client went live on mainnet for the first time near the end of 2018. By September 2019, Aragon One shipped Aragon 0.8 featuring a vastly improved on-boarding and user experience.

This year Parity led the way with a major advance in Substrate, Parity Technologies’ blockchain framework. Substrate’s modular architecture abstracts away as much blockchain development as possible, freeing teams to focus on crafting their project’s unique business logic. It could have a similar impact as Wix, which launched in 2006, making website development simple and easy for anyone.

Argent shipped a “radically better crypto wallet,” targeting one of the major pain points in crypto (seed phrases). It has shown that you can be self-custodial/decentralized. Argent uses a system called Guardians, where you can pick any ethereum address to help recover your wallet. Guardians can also lock it and approve transfers over your daily limit. Now, if you lose your phone, you can recover your wallet in a couple of taps.

People who claim “nothing has happened yet,” or that digital assets and blockchains only have limited use cases such as breaking laws or social contracts, only see patches of the quilt. Because of our on-demand mentality, we have lost patience. We expect things to work immediately. But this build-out is a tectonic shift, not only for those building and participating in these new applications and platforms, but for the people who will eventually use them. It takes time.