We had the opportunity to interview Sam Cassatt at TechCrunch Disrupt SF. Sam is the Chief Strategy Officer of ConsenSys and has a great deal of involvement throughout the organization. Sam has an interesting background in the fact that he worked on the biocomputation in the field of Cognitive Science at John Hopkins and then he has been consulting the subject for years.
He continued to work at ConsenSys a few months after its foundation and has been working there ever since.
Editor's Note: This interview has been modified for clarity. The complete video interview is found below.
CCN: How are you? We're here with Sam Cassat, ConsenSys' chief strategy officer. How are you today?
Sam Cassat: I'm doing great. Get out at the TechCrunch and a super cool conference.
CCN: Yes, it's nice to have you. So talk a bit about the general strategy of ConsenSys in 2018.
Sam Cassat: So ConsenSys has gone through several iterations in the last few years. We have been around since the end of 2014, at the beginning of 2015 and we started doing it when no one knew the word Blockchain. People thought we were a little crazy when we entered the boards and we said, "We're going to revolutionize your technology infrastructure, your tax infrastructure, revolutionizing the economy." Nobody really understood what we were talking about. Fast forward a few years. Obviously, Blockchain is a word of order. Everyone realizes that there is some application of this in their world.
But when we started we really had to do everything. It was a bit like 1991 and we knew the internet or we knew that the web would be something interesting just as we knew that Blockchain would be something interesting, but it was not infrastructure. In 1991 there was no browser or there was no web server, there was certainly no DevOps infrastructure. So we decided to build an entire ecosystem at once and this required the construction of our business model as a venture study.
When we saw how to build an entire ecosystem, how to build everything at once. You can not simply create a company that produces everything. Because for one, I do not know any successful example of this. It is a source of distraction. It is not the right level of abstraction to think about it. We thought it was too early to create a risk fund because everyone would have to repeat the job one of the other. Right? If I had sown 20 different companies, all those companies would have to build Truffle. They should have built MetaMask. They should have built Infura. They should have built all these components of the shared infrastructure between all the ConsenSys projects that everyone was building on Ethereum and so on. So, we decided to create a company that was at the level of abstraction above a company. It is a company that builds companies. I think we did it fairly successfully trying to build things like prediction markets, like Gnosis, things like supply chain platforms, games, etc. That motivated all the infrastructure we needed to build. So we ended up with probably around 50 portfolio companies that were in that studio, in the part of the company that builds companies. This went pretty well.
On the other hand, as we progressed, as the market progressed, governments, Fortune 500 companies, the entities of Central Banks of the kind. When you go to Google Blockchain, go to Google Ethereum, you find us very quickly and there is a lot of demand for us to help entities like that to implement Blockchain technology in their existing infrastructure. So we have a part of our company called ConsenSys Solutions that is taking all the infrastructure we have built for our needs for our applications and helping other companies and institutions build their own applications that use Blockchain technology. So that one looks a little like, you know, like maybe an Oracle. In the early days, you could not simply buy a database from a shelf and connect it. It is not possible to purchase an IBM mainframe from a shelf and connect it. A solution designed around it is needed.
So ConsenSys Solutions takes the Ethereum Blockchain technology, designs a solution based on it and implements it. Therefore, we think that a combination of creating a whole group of companies that are really good manifestations of the Blockchain technology that we build and support, as well as helping all the incumbents in the world to realize the cases of use of Blockchain at the same time. This really is the kind of gold pair there. And then around that, we have a lot of other things going on. We have a risk fund, we have a social impact arm, we have an educational institution. In fact, today we announced that ConsenSys Academy is launching its first non-developer course on Coursera. It will be available to everyone in the world through that platform. So we have a lot of things going on. Our general strategy is to develop the entire ecosystem of Ethereum, put it in the hands of as many companies and as many governments as possible and get the whole world and achieve what they can do.
CCN: So one of the interesting things about the venture development study model is a key concern about what I call the Amazon effect, which is Amazon enters health care and there is a 10% drop in every single health certificate. ConsenSys in Blockchain is comparable to Amazon on the public sphere .
Sam Cassat: Thank you.
CCN: If you know something about Blockchain, you probably know ConsenSys and definitely know Ethereum even if you are investing in Bitcoin. So is there any concern to discourage competition because you have so many rays on that center?
Sam Cassat: This is an interesting question. I do not think so. I think right in the beginning, definitely not because there was nothing. And we wanted to make it move faster. So I think there is always competition in every market. I do not think the market would have developed so quickly if we had not invented things like Infura and Truffle and MetaMask that everyone uses. I'm not sure I necessarily have to believe that we scare anyone who does not enter the market. I hope not. But even if that happens, there are a lot of companies that would not exist if it were not for those tools and the construction of the ecosystem we did. So I think the positive net has a good effect on the market.
I hope we do not scare anyone and entrepreneurship, I've heard people describe it as jumping off a cliff and building the airplane on the way down and people like that, I do not think it's scared by people in general . So I hope not.
CCN: Yes, this is an interesting answer. And speaking of this, what are some interesting companies you've seen coming out of the Ethereum ecosystem but not necessarily related to ConsenSys? Or maybe you just made an investment?
Sam Cassat: This is an interesting question. I think Loom Network is a really interesting project. So Loom is a way to basically take DPoS which is the technology used in some Blockchain that Ethereum has rejected because it does not have the right security features for us and what we think is a level one solution. They took the Ethereum base and added delegate evidence of the stake on it in a framework to add other ConsenSys mechanisms on it which then settle into the base, what is thought of as the normal Ethereum.
So these higher-level protocols can go faster, right? If I want thousands of transactions per second because I'm running a game or I'm running a social network or something, I probably do not want to run every single, like, or click on my social network through the basic level of Ethereum because it's expensive and too slow. So what I might want to do is build another level and then if there's a problem in that fast level, I can solve the problem on the basic Ethereum level. Does this make sense? Loom Network is doing it by providing a framework to do it. I think they are a really fantastic company. I also think that many stake channels work right now. Companies like FunFair Tech, for example, are doing a lot of really interesting work in this and are really moving forward with the ecosystem. So I think we want to support companies like the one that are working to promote the whole ecosystem. And I think they are some really great examples.
CCN: Just like Loom, there is a scaling supplier out of the chain right there. That something you see will be necessary 10 or 15 years or will you see it going back on the chain while you guys have implemented the pole and sharding test?
Sam Cassat: I think both of them. I think it's necessary right now. The proof of the pile and the fragment I think will take us in order of magnitude or two more than now. You know, if we're doing dozens of transactions per second, it could take us hundreds or thousands of transactions per second, which I think is good enough for some applications. It's certainly good enough for a layer one, especially a bunch of financial applications.
It is not fast enough to start Facebook. You will need something else with different security features. At the same time, the sending of a billion dollars has needs of trust and protocol requirements very different from those of Facebook. So I think it's a waste and it's too slow to use the Ethereum base layer for a liking. So I think they are – only architecturally, it makes sense to make another layer or more layers, such as in plasma, which can be much faster and cheaper and more appropriate for application. I think it's happening right now and we need it now.
CCN: So let's analyze it a little bit. Have you ever seen something like this on Facebook as an appropriate use case for Ethereum on the chain?
Sam Cassat: it depends on what you mean by chain. On a chain data structure of some sort, perhaps. Probably not on the level one of Ethereum, though.
CCN: Understanding. So it would be something more for a direct acyclical chart that also writes.
Sam Cassat: as a side chain or a DPoS or some other decentralized database that is next to the base chain and perhaps the root of the application. And the smart contract that is the finance of that social network probably needs to be in a chain, on a chain of the first level, but probably it is so, it is not so important. It does not need billions of dollars of security. It may be someone else who needs less security, I think.
CCN: So this is another interesting point. As for distributed database systems, how do you see that it will progress in the next few years? Because so how it is now Ethereum is not really good for a database and is not meant to be one.
Sam Cassat: sure. Ethereum is not designed to conserve large amounts of data. It is designed to store things that require a lot of trust. It had to be, Sam had a million dollars and now John has a million dollars. That kind of thing we need – normally we need lawyers and judicial and police systems to perform in our society and in our economy. This is the thing that the base layer of Ethereum makes it cheaper, better and faster. It does not store the entire DVD library in my bedroom or other. That is a waste of that resource of high trust. I would not take a lawyer and I have a notary who authenticates the data from my DVD collection or something. Right? This is a waste of that high trust infrastructure. So, we have other infrastructures like IPFS, for example. There are messaging protocols like Swarm that are coming out.
There are a lot of complementary technologies, many of which are designed to store large amounts of binary data such as video data or images or large amounts of text or what you have. I think there will be a plethora of those. We use IPFS for a lot of work we do in that domain. And I also think that there are other decentralized databases, the incoming database technologies that will be useful in many ways.
CCN: So you can talk about what is IPFS?
Sam Cassat: the interplanetary file system. This is a fundamentally binary decentralized storage mechanism that is addressable from the content. So what it means is, let's say I want a movie. I can take the whole movie. I can do what is called hash, which is one of the main features underlying IPFS. I do it so I can turn the whole movie into a small string.
Sam Cassat: Maybe it's so long on the screen and this is the name of the movie on the net. And it's also the way I find that movie on the net, right? So if I wanted to find a film released recently, I do not know, Jurassic Park. I want to find Jurassic Park. I would look for a list somewhere, the hash of Jurassic Park. I will send it to the network of decentralized protocols. He would find a lot of copies that are stored around the world of that particular track, that particular data blob. And they would find it and give it to me. At this time, volunteers around the world or people who want to store data for the rest of the network are doing it. So, if I have a company and my business depends on my ability to host the data, just like if I had a website and my website depended on the fact that I hosted the data, I would have a server and store it on IPFS.
It's a different way to find that data. So someone could host it. A lot of people will copy that data. So you end up with a decentralized set of copies of that data all over the world instead of a server hosting the movie or website data, a thousand servers could host them. In the end, there will be a layer on top of that coin called file, which actually encourages people to store all those data around the world. So it's a little bit like digging up hosting that data, they get a little bit of it. reward of the coins of the files and what you end up is essentially like a decentralized data center that stores all this data using the hard disks of people all over the world instead of using centralized servers. So the non-incentivized version is called IPFS, the incentivized version is called a file coin. And both are really interesting technologies that we use in some of our architectures.
CCN: And I imagine the other interesting thing you could do there, both you and I download the Ethereum white paper on our laptops. We've uploaded to Google Drive and are storing two copies, right? So if you built a retail-based application, you and I were storing or referencing the same item.
Sam Cassat: Yes, yes, exactly. Addressable content is a very interesting property of it.
CCN: And how are the database searches there? Right? Because we're talking about potentially hundreds of thousands of files.
Sam Cassat: It's been a while since I deepened the …
CCN: Oh yes, yes. No problem.
Sam Cassat: … the integrity of IPFS is engineering, but essentially it is a search through the network. I mean, you know, all these nodes, store all this data. There is a decentralized register where everything is and a message is sent as a beacon to search for data. In the end, the data is postponed after the beacon has been sent essentially.
CCN: So this really is a really interesting point. ConsenSys has 50 projects?
Sam Cassat: Fifty, a little less than 50 portfolio companies in our venture study. In total, we have many projects. But yes, around 50 things in various states of development in our venture study.
CCN: So you have the counseling arm, a dozen other things. How are you a manager of this company, do you keep up with this and how, as the manager of the strategy of a decentralized company of this kind, do you drive the ship?
Sam Cassat: ConsenSys is a really unusual organization, right? We are decentralized. This means, it is different in different contexts. But in a sense when I make a decision or if I think something is a good idea, it does not necessarily mean I can tell someone to do it. We are more about the wisdom of the crowd. We are talking about crowdsourcing. We are more to reach consensus, which is part of our moniker. So we really have a lot of really brilliant people working for us.
When we want something to happen, it usually results in question. If I think something is a good idea or I think something usually has to happen, usually, the way we make this event involves a lot of interested parties and stakeholders, who are probably smart enough people and have a discussion about it and reach a consensus on what to do and then that kind of filters throughout the organization. It's a very large organization. We have a lot of corporate meetings, we have many communications. We have Slack with a huge amount of information. We have a couple of meetings that are for the whole company every two weeks and every three weeks. So if you want, you can let them know everything that's going on. We have an event probably almost every day all over the world. So, only with a very high touch, a great deal of communication. And the really open dialogue is, I think, the best way to bring out the wisdom of the really intelligent crowd that is inside ConsenSys. So it's a bit different from a normal company, but I also think it allows us to get more information. And it allows us to really move in the kind of spirit of what we are doing, which is building a revolutionary technology that changes the world. And if we did not try to do something different, we'd be charlatans, I think. We are trying to walk and do all our company and experiment. So far it has been a great success, I think.
CCN: So, just out of curiosity, I'm trying to figure out how the company works and how it works. Let's say your advisory arm has a giant customer who wants to use the coins in the files. And at this point, the token is decentralized and you have to make a major architectural change there. This means that it is necessary to have the consent of the community, the miners and all these different stakeholders. How do you communicate this by collaborating with developers and all the different stakeholders to reach consensus and move forward at a pace that an enterprise-like customer would be used to like an Oracle?
Sam Cassat: There are two different things going on. C & # 39; is the public network of Ethereum. Which would have a coin file running on it and be a completely decentralized architecture. And then there are private implementations of Ethereum and Private Blockchain or semi-private investment groups for perhaps several companies sharing those projects and that infrastructure. If it's something private, and maybe there are ten banks that share it, or there are ten oil and gas companies sharing it or something, it's easy enough for us to edit whatever you want and just push that project forward and do what we want. I do not think the market is still there where these big companies and governments, at least for the most part, are putting their projects on Ethereum's public infrastructure.
I think we'll get there. I think we will get to a point just like we are now with the normal technology market where the market will require certain features of the Ethereum Blockchain ecosystem.
Players will use it. Participants in the technology available on the market to build what they want. These things will meet, but right now I would not say: we would not try to enter something in the market, but it was not ready. But in private implementations, we can do whatever we want.
CCN: So, as far as distributed ledger technology is concerned, what do you think is the most convincing case of use at the moment? If you guys are working on something or not?
Sam Cassat: Uh, the most gripping case of use? Well, I think the obvious use case, the obvious killer app that has already been the killer app is tokenization. We have already destroyed the venture capital industry. We already have, we have already changed the way startups grow, funding and capitalizing themselves. So this is a nice killer app. I think the tokenisation of security, like Meridio, this shirt I'm wearing is a great application. I think we have yet to see the beginning of how much innovation will come in the financial sphere from the fact that a software object with programmable properties can also be a financial product and a security and the legal framework around which will support that behavior. I think we are a step back in this long road and then there is a huge innovation there.
I think that providing access to asset classes and financing in general for emerging markets is a tremendously powerful use case. I think that interrupting journalism in such a civilized way is a mature area for decentralization. Right now we are witnessing the battle between the centralized forces of our government and Facebook and Google and Twitter. And yesterday we had Jack and Cheryl in Congress to testify if and how their companies should censor and change the news or false or other news. Our society is at a time when decentralization could make more sense than centralization on these fronts. And we are comparing right now. I think it's a very mature area. There are many.
CCN: And ConsenSys is definitely working to address them all. So I'd really like to thank you for coming and it was great talking to you.
Sam Cassat: Thank you. Really nice to be here. Thank you.
Note: This interview is part of the CCN Podcast. The podcast and this interview are also available on iTunes, TuneIn, Stitcher, Google Play Music, Spotify, SoundCloud, YouTube or wherever you have your podcast. Be sure to vote and sign up!
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