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Laura Shin, a freelance journalist known for breaking an important history of "blockchain" in Toronto, recently spoke to her former Forbes colleague, Jeff Kauflin, on a podcast called to discuss layoffs and problems with corporate structure at ConsenSys, one of the largest spin-off companies of Ethereum.
According to the general consensus, Joe Lubin is the main financier of ConsenSys and is one of the largest private holders of Ether, the native currency of the Ethereum blockchain, a project that Lubin created with 5 others in 2015.
In the podcast, Kauflin researched ConsenSys from August to December of this year for a Forbes article published with Sara Hansen on Wednesday, entitled "Cryptopia In Crisis: Joe Lubin's Ethereum Experiment is a disaster. will you propose it along? "
Shin began by reiterating the feeling that "ConsenSys is a bit of a mess …" and Kauflin has agreed:
"When we started talking with them in August, I was not really sure about the angle the plot would take … as we progressed more and more into the reports and we did some things about the status of the projects and the status of adoption in the Ethereum ecosystem, organizational problems … we have begun to become more skeptical about the fact that business is as sustainable as it is at present … and today we have seen other news about layoffs … "
As a point of reference, Shin compared ConsenSys with Coinbase, the most successful criptovalute exchange in America.
Coinbase has 500-600 employees versus 1200 at ConsenSys, said Shin. Coinbase has about 25 million customers and has raised about half a billion from private investors.
"In the meantime," Shin said, "ConsenSys has billions of Joe Lubin … and 1,200 employees, but it's not like a real hit, hardly any user, no real entry.
Kauflin said he was right:
"Among the people we talked to, the biggest successes were the development tools … like Infura and Metamask … those were the biggest hits." It was some accounting software … encrypted transactions … but … in terms of when you look through all the beams … many of them are not as clear as they will be self-sufficient … they are spread thin and are pressing hard on the gas at a time when they do not c & "It was a lot of adoption, so I think it was quite difficult for them".
So far, Infura and Metamask are both free and do not bring revenue
"Infura will start loading customers for access, but not yet," Kauflin said.
Shin asked why ConsenSys had not corrected the route before.
Kauflin hypothesized that "… the dynamics of the market are unusual":
"Being funded exclusively by Joe Lubin is a factor … traditional startups have all these controls and market obstacles they need to skip, but with ConsenSys, it was Joe alone who financed them based on what was interesting for him …"
Shin asked if the problem had essentially come from the top. "Coinbase has the duty of investors, but Joe was already a billionaire," he said.
"I think I do not have investors and do not have to be accountable to anyone …" was a factor, Kauflin said, adding that Lubin is, "… trying to build an entire ecosystem … (without) much adoption again … (making the perspective) very risky. "
But Kauflin has stopped calling the company a deception:
"I think Joe intends well and he really believes that these technologies can destroy economies and eliminate intermediaries …"
Shin asked Kauflin to identify particularly poorly designed projects within ConsenSys, which are internally called "spokes".
Kauflin called "Fathom", a project intent on upsetting the unjust systems of college accreditation:
"Building a cryptographic platform where people can stake out the tokens to vote if someone actually has the skills they claim."
Several projects carried out on Ethereum and released during the boom of last year, such as CryptoKitties, have gained a certain share of market attention last year, but in the current bear market they have turned out to be rather boutiques.
Kauflin says that getting enough people to be interested in a project like Fathom implies "… the complexity of creating a system that is its small economy … (which) seems really difficult".
Shin pointed out that another controversial decision by Lubin appears to have been his purchase of an "asteroid mining company" in October. "I'm not sure what it has to do with blockchain or Ethereum," he said.
Kauflin said that Lubin told him that he bought the project to see how the blockchain could "branch" into space, explaining that he believes there will probably be many processes in space that require automation.
A letter released by Lubin in ConsenSys last Friday posted for the possibility of layoffs, and this week Coindesk reported that ConsenSys will in effect fire 13% of its employees.
Kauflin said that when he spoke to Lubin about possible layoffs last Tuesday, Lubin said he did not have any layoffs in mind, but that others in the company did.
He suggested that there may be redundancies in ConsenSys' Solutions Group, a "relative" relationship that has worked with governments and others on "blockchain solutions".
Kauflin said that the assumptions in the ConsenSys Solutions Group have gone from 30 to 250 last year.
Shin asked how much attention paid to ConsenSys was the result of recent recessions in the market of cryptographers.
Kauflin said that Lubin will not respond directly to this and that he was not able to get a clear view of the holdings of (Lubin), "… but I think it's a factor," he said
Kauflin added that both journalists know that "… something thorny and difficult (cryptography can be) to report for tons of reasons …"
Shin asked to what extent the fortunes of Ethereum, an open source blockchain project that aspires to become a "computer of the world" controlled by anyone.
Kauflin said that ConsenSys is important but not in the center.
He ended up saying:
"I do not think that the fate of Ethereum is strongly linked to the fate of ConsenSys … I think it goes in the other direction, although … (scaling and adoption problems) injure ConsenSys …"
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