Imagine you have $ 5 billion. Just like a mental experiment, imagine having 5 billion dollars at your disposal. What are the things you would buy? Would you leave your job? Do you go on vacation for a lifetime? Do you buy a new house? A plane? A yacht? A & # 39; automobile? Seriously, close your eyes and imagine for a few minutes, what would you do with US $ 5 billion. Because at the end of last year and the first months of this year, the co-founder of Consensys and Ethereum Joseph Lubin was worth a lot of money. And second ForbesLubin was the second richest person in the cryptosphere, based largely on reports that he (personally) owned between 5% and 10% of all the circulating ether, which at the time had a market value of US $ 100 billion and traded around US $ 1,389.
Today, Ethereum is worth less than a tenth of that amount and at the time of writing it was trading around $ 126 (based on CoinMarketCap data). And while it might be tempting to kick a man when he's down, Lubin has probably done more for Ethereum, criptovalute and blockchain than anyone else. Imagine that you have $ 5 billion, would you go all-in to finance a future vision of the world? Fortunately, Lubin was and, while the results of ConsenSys, the company he founded to promote Ethereum's blockchain, were not successful, he did not give up or go anywhere. And for this reason, the recent round of ConsenSys layoffs should be seen against the backdrop of Lubin and ConsenSys and the broader goal for Ethereum.
1. Where Lubin came from
While most of us (myself included) would be tempted to retire with a fortune of $ 5 billion, it is thanks to the work of idealists like Lubin that the world has a chance for a brighter future. Because of this, Lubin's unique life experiences can lay the foundation for his willingness to finance a greater good.
A self-appointed computer nerd whose mother was a real estate agent and whose father was a dentist, Lubin, a Canadian, attended Princeton in the mid-1980s where he played squash and was a roommate with the future billionaire hedge fund manager Mike Novogratz, who like Lubin went all-in on blockchain and cryptocurrencies. After graduating in electronic engineering and computer science in 1987, Lubin worked in the Princeton robotics lab, but was eventually drawn to the Wall Street siren call, where he ended up building software for Goldman Sachs and eventually managed the his success bottom. Lubin had what many of us would consider a successful life: a great career, a successful business and money. But it was on 11 September 2001 that he would leave an indelible mark on Lubin forever.
The Lubin office was not far from Ground Zero during the September 11 attacks at the World Trade Center in New York and the experience threw him into an existential crisis. In the following decade, he would become deeply depressed for the state of the world and when the Great Financial Crisis of 2008 hit Wall Street, he would further fuel his depression and loss of confidence in the institutional structures that had been the backbone of his distant existence. Speaking at the heterogeneous summit of ConsenSys in May 2017, Lubin said:
"It was folly to rely on all those structures that, implicitly, believed we had our best interests at heart, I felt that we lived in a global society and an economy that was figuratively, literally and morally bankrupt."
"I was confident that our economy and our society were in a slow and cascading collapse."
According to Lubin, central bankers would eventually weaken currencies to pay off rising debts, stifling growth for decades or some "non-linear" or black swan-like events would create great difficulties and send the world into the worst economic depression it had ever seen. And while it may be easy to liquidate the prophecy of Lubin's day as the product of depression, there are growing signs that its dark predictions are not far from the mark.
As the specter of a trade war looms between the two largest economies in the world, China and the United States, concerns are growing that China can no longer continue to sustain its economic growth. With gross overcapacity (we think of all the ghost towns) and disturbing signs that China is making production (of white elephants) in order to maintain its social compactness – limited freedom in exchange for economic assets – there is a China's growing effort to maintain the cycle – and its failure or inability to do so can lead to social instability and unrest. Already today, factories in China are postponing the workers to the countryside for their lunar new year break up to three months before (without paying, of course). The Chinese Communist Party is also increasing its involvement in private companies and the scale of its state-owned enterprises, which will only increase the increased opacity and propensity to overproduction.
The experience of Lubin led him to travel to Peru and Ecuador, looking for the land where he could escape when, at the beginning of 2011, he tripped over the Bitcoin whitepaper and had his moment "come to Jesus".
"Decentralization was a turning point."
2. The birth of Ethereum and consenSys
Reading everything he could about Bitcoin, Lubin was finally introduced by Anthony Di Iorio (another co-founder of Ethereum) at the time the creator of Ethereum, 19, Vitalik Buterin. After reading the Ethereum Buterin white paper in the winter of 2013, Lubin entered the ground floor of the Ethereum project and attended its foundation meeting in Miami at the start of 2014.
Lubin saw the potential of Ethereum and, as a computer scientist, recognized the potential of a decentralized complete blocking protocol for Turing. A complete system of Turing indicates a system in which it is possible to write a program that will find an answer (even if there are no guarantees regarding the execution time or the requested memory). In theory, a complete blocking protocol of Turing should be able to allow programs able to solve any computational problem. Most modern programming languages, including Python, C ++, C # and Java are all examples of complete Turing languages. In comparison, Bitcoin scripts are not considered complete by Turing, in favor of greater security. Being complete Turing has security trade-offs, which go beyond the scope of this piece to examine in more detail. Nonetheless, Lubin went all-in on Ethereum and its $ 18 million initial money supply (ICO) is said to have been one of the biggest buyers, at prices below US $ 1 for Ether.
But as with any good background, the founders of Ethereum argued – decentralization is disordered – and divided ways. Buterin has continued and continues to focus on Ethereum technology, while Lubin has created a business ecosystem to support Ethereum's blockchain and is probably the synergy of the two paths that have led to Ethereum's success. Why what use is a programming language or a blockchain protocol if no one builds something on it? Imagine a smartphone without an app: it's as good as a brick.
3. ConsenSys Live decentralization
When Lubin started creating ConsenSys, he did not just want to create companies that would eventually support the Ethereum protocol, he wanted to live decentralized ethos. When it came to the organizational structure, there was not. Dividing it as a "holocracy", ConsenSys has neither eaten nor signaling structure. The decision-making process has been decentralized and the employees have chosen their title.
A decentralized future means personal responsibility. During the industrial revolution, a pact was made that did not say that the owner of the factory would offer workers salaries in exchange for their work. In return, workers would receive less than created capital and economic rewards for their work by delegating decision-making power and responsibility to owners and controllers of capital – those taking the risk. But during the computer revolution, which we are currently underway, the old structures for the compact one, a unionized labor force, a lifetime employment and other social welfare structures have been weakened. Technology and automation broke the pact and the workers were discovering that more and more often they had to defend themselves and become personally responsible for their actions and decisions. Yet despite this change, the share of the economy's work has steadily declined over the past three decades, thanks to inflation and the disproportionately larger rewards that owners and equity inspectors have received. Here then, Lubin was revolutionizing the traditional industrial work environment. Make employees personally responsible for their actions.
But such a revolutionary style of management, which is unprecedented, will take time to achieve results. People by nature do not like to be responsible, especially for themselves. Just think of the number of people you know to have high levels of personal responsibility – they are likely to have the most success.
Yet, somehow, Lubin managed to make it work (for the most part). The first ConsenSys projects, or spokes (as defined), included Balanc3 accounting software for cryptocurrency transactions and a blockchain-based digital rights platform for musicians. It is said that Balanc3 has 25 customers paying at least US $ 25,000 a year and Kaleido, which helps companies implement blockchain technology, has 1,900 users for whom it has recently started to pay. Amazon Web Services recently announced that its massive cloud computing services are compatible with Kaleido blockchain offerings. The Bounties network, which received $ 250 million from Lubin to start in 2017, generated over $ 50,000 in revenue.
The ConsenSys consortium, which essentially helps companies become blockchain literate, has helped create Komgo, a consortium of 15 major banks, including Citibank, the French banking giant BNP Paribas and the Dutch banking giant ABN AMRO, which wants to use technology blockchain to bring efficiency to the financing of goods shipped around the world, such as oil. Thus, instead of bulky letters of credit and intermediary banks, the blockchain could facilitate cross-border trade with so far unimaginable efficiency. And in the Philippines, where remittances to foreign countries make up 10% of GDP, ConsenSys consultants are working with UnionBank to accelerate money transfers.
It's not bad for a company that probably has no hierarchy or organizational structure. But not all ConsenSys projects have had the same success and comprehensibility. Because not everyone has the same high level of personal responsibility. However, given that the next period is likely to be a serious economic uncertainty, personal responsibility is exactly what is needed. The old concepts of industrial work against industrial management are no longer relevant. The increase in automation, artificial intelligence and quantum computing mean that in the end, all he will have to discern how they can create value, instead of simply doing a job in exchange for a salary. To this end, ConsenSys could be ahead of its time.
At least, ConsenSys insiders reported feeling empowered, in particular, the opportunity to move sideways between projects.
Yet there is a method for the apparent madness of Lubin. According to Lubin, the broader goal is to transform its Ethereum ecosystem into what is called a "network" whose strength derives from the interconnectivity of the various beams (companies) within the ConsenSys ecosystem. By creating an ecosystem of complementary companies within ConsenSys, Lubin is in many ways creating a value proposition alongside the Ethereum blockchain, which could be worth much more than today.
4. Build the tools of the Ethereum blockchain
But perhaps, and probably, even more importantly, ConsenSys has created the tools that allow the next generation of decentralized developers to build the next generation of decentralized applications or dApps and have done it for free.
Its MetaMask product, which allows users to access Ethereum from a web browser, has over a million downloads. Truffle, another ConsenSys product, helps developers manage and test parts of their code for creating Ethereum applications – it has also been downloaded more than a million times. Think of ConsenSys as Atlassian for the Ethereum blockchain.
And although it is almost impossible to load the ConsenSys Ethenum tools, which are available, it will greatly contribute to the creation of the dApps Ethereum ecosystem. Because the blockchain is built on a decentralized and open-source ethos, ConsenSys is undoubtedly and understandably forced to pay for one of these tools – which greatly benefits the Ethereum blockchain, which Lubin himself admits,
"The intention is not to create companies and send them and make money." The intention is to create an ecosystem that is very familiar ".
Spoken as a true blockchain entrepreneur, but also the same ethos that allowed platforms like GitHub to thrive. Collaboration is all about software because you can not know what you do not know. The code is like this. You can not see the flaws and weaknesses you've left in your code, which is why developers go to GitHub where volunteers (without compensation) help improve your code. The idea that a better code for someone means better code for everyone. Likewise, a more vibrant Ethereum ecosystem means a better Ethereum ecosystem for everyone. And in the end, ConsenSys will collect its reward. Like Napoleon Hill, the famous motivational speaker and writer once wrote
"We do not profess to know what are the plans of Nature, but we strongly suspect that before man can enjoy the blessings that are here and available to him, he must overcome the spirit of greed, the tendency to get without giving and go back to the habit of working bees for the "hive!"
To this end, Lubin is working for the "hive" of Ethereum and we are richer.
4. How long can it last?
It is almost impossible to say whether Lubin has exchanged most or all of his Ethereum to finance ConsenSys. For now, electricity and rent, as well as wages, are paid in dollars and with the value of Ethereum where it is today, Lubin has admitted to selling some of its Ether to finance operations. But his situation is perhaps not different from that of the hundreds of CIOs who have fallen on the roadside today.
For ICOs that have traded to cash in the early days, they will probably have enough buffers to last long to build their own EthSapp based apps or other applications. The numbers of dApp users remain painfully low, which is completely normal. Ethereum is only 5 years old and most ICOs are under 2 years old. Hardly what could be called a long time for the development of arguably complicated projects based on the Ethereum blockchain.
But if, and this is a "if" very large, even a fraction of these projects of Ethereum reaches self-sufficient speed, will have a great impact on Ethereum as a whole. Think of it as when the Apple App Store started attracting more and more developers to create apps for the App Store. Since the App Store had multiple apps, it attracted more iPhone users, who attracted more developers, into a self-sustaining cycle. To this end, this is where the true potential of Ethereum resides.
Yes, there were tons of fraudulent and failed ICOs. There were also many scams. Investors have collectively lost billions of dollars. But despite the bad press, there are still companies out there that are continuing to build their products based on the Ethereum blockchain. Not all Icos were scams, many of the technologists and futurists who raised funds in the ICO last year have not yet given up and, since there were so many, a small part of them to succeed will be all that is needed to reinvigorate the Ethereum blockchain. And key developers in the heart of Ethereum have not even thrown in the towel, not by a long shot. The relative silence of Buterin on Twitter and in other public spaces is presumably due to his non-stop work on improvements to the Ethereum protocol planned for early next year.
So, while ConsenSys has shaved the work and it is right that it is so, this does not necessarily mean that it is a curtain for ConsenSys, or for what concerns Ethreum. Talking about Forbes from the ConsenSys office in San Francisco, Lubin summarizes it better when discussing his Ethereum ecosystem,
I do not have an exit plan and I've never had an exit strategy for something I've done.
Which is good news for the Ethereum blockchain.