By Ronny Lavie, Managing Editor for The Fintech Times.
We spoke to Chia’s President and Co-Founder, Ryan Singer, about the company’s ambitious goals and the way in which Bitcoin is set to change the world.
How did your journey in finance begin?
I was doing research with the Stanford Peace Innovation Lab, back in 2010, working on a project called Peace Markets, which was attempting to build a commodities market in peaceful human behaviours across conflict boundaries. That got me interested in how market dynamics can change social institutions and social behaviour. It was around the time that Bitcoin started getting noticed, and I got really interested in it.
I met Jered Kenna, the entrepreneur who started the first American Bitcoin exchange, at a conference – he had just bought a 40 bedroom hotel in San Francisco and was renovating it and filling it up with entrepreneurs, engineers and artists. I moved in and ended up helping him run the place. We decided we enjoyed working together, so, in 2012, we founded TradeHill – the first institutional Bitcoin exchange, and I’ve been working in cryptocurrencies ever since.
You’re now working with Bram Cohen on Chia. How did you two meet?
Everyone in the tech world in San Francisco is only one or two connections away from each other, so we were involved in the same circles and became friendly that way. In 2013, while I was running TradeHill, Bram sent me a Facebook message asking me if I could bring my CTO in to explain to him how Bitcoin works technically, because one of his friends had persuaded him that there is something there. We spent three hours with Bram and the engineers at BitTorrent, explaining every aspect of how Bitcoin worked. That started four years of research for him, so that he could see how he might use what’s there to build something better. Last spring, he reached out to a mutual friend and said that he was ready to leave BitTorrent and start a cryptocurrency company, and she suggested that he works with me.
You and Bram have different backgrounds and experience, how do you think that affects Chia’s work?
Both Bram and I are experienced Silicon Valley entrepreneurs, but Bram is much more of a technical guy – he’s an inventor. I’m more business oriented – my expertise is in business operations, negotiations and policy. And so I think we work together really well. He manages a team of six engineers, all working full time, building our company’s products, and I manage a Director of Operations, a CFO and a general council. I’m working on taking the company public and making sure the engineers have everything they need to do their work.
How do you choose which brands to work with?
For the most part, we work with academics and institutions which are developing better ways to apply cryptography to cryptocurrency in general, and Bitcoin in particular. The people we are most interested in working with are people who work on Bitcoin core and Lightning, and those doing academic research into the application of cryptography to solve existing problems.
Do you see Chia as a disruptor or collaborator?
The goal for cryptocurrencies in general, and especially Chia, is to end the role of commercial banking in payments.
We aim to work with every multinational family and multinational corporation to reduce their need to use commercial banking for global payments and treasury. So we’re very much a collaborator in that way. As for finance companies, we would love to collaborate, but it’s not our primary mission.
Do you think the banks are going to adapt or fight?
Both. Goldman Sachs recently opened a cryptocurrency trading desk, and most banks have made strategic investments at this point. But they’ll also attempt to protect their privileged status, using their relationship with regulators and politics.
What are your thoughts about the current landscape in blockchain and cryptocurrencies?
The word blockchain gets used very broadly – it’s almost the same as the word database. We don’t think that’s useful. To us, blockchain means the ability to come to a consensus around a secure transaction history. We’re not really interested in blockchain for things other than currency businesses, or in private blockchain applications – all of these people are just using blockchain to mean database, and we don’t see that as an interesting technical contribution to building useful global cryptocurrencies.
Do you agree that there is a lot of noise in the crypto market?
Yes. One of the main goals of Chia as a company is to legitimise cryptocurrency as a global currency, and to be able to use it for global financial transaction in the same way that companies and individuals make transactions with regular currency.
So for us, when we look at the existing crypto landscape, what we see is Bitcoin, which is truly innovative and incredibly powerful, but still has some deep flaws. When we see projects like Summa, which was founded by James Prestwich, that are taking the tools that were invented for Bitcoin and using them to add a lot more functionality, those are the products that we’re most interested in learning from.
Most of the rest of the ecosystem we do just see as noise. We want to take inspiration from the current market to build something better. So, from a technical side, we have two main drives – one is to improve consensus – to make it more geographically distributed and decentralised, but also less wasteful; and the other is improving the scripting language for the better.
We’re taking the company public in America, which involves making a deep commitment to transparency and integrity, because we will have to make regular disclosures about our finances, management team and activity, and keep it all updated. So the goal here is to run a respectable public institution building a more decentralised global cryptocurrency, with the aim of building a better currency than the dollar or the euro for multinational corporations and families – anyone who does payments across borders.
Are you planning on going into other markets?
Our cryptocurrency will be useful on any internet connected computer – anyone can join our network and participate in the activities. For our stock, we’re very interested in finding ways to be listed in other countries in the future.
Which markets are most appealing to you?
All of them. Someday we hope to have our stock trading in every country where cryptocurrency does. We want people to be able to choose between buying the cryptocurrency, because they intend to use it or custody it themselves, or buying the stock, because they want institutional exposure to the assets of the company in a way that is more transparent and regulated.
Is the negative press around Bitcoin and cryptocurrencies a hindrance? Does it affect you?
There is always positive and negative press about anything that is done in technology or finance – generally the press is a trailing indicator, not a leading indicator, so we don’t see anything about the future in it.
You’ve done a lot of work around the implications of tech in conflict resolution. From your experience, how can tech in general, and Bitcoin/crypto in particular, help promote global peace?
From my perspective, politics isn’t about policy, it’s about group status. But the nice thing about technology, and especially networks, is that it’s just about communications and collaboration. For the most part, any time you build better communication between people, you reduce the role of politics between them and increase the role of commerce – offer them an opportunity to interact directly, instead of going through institutions.
How about financial inclusion? Do you believe crypto and Bitcoin can help there too?
In the US, there are only about 400 self-clearing financial institutions. In Canada, there are only four and in the UK only four or five. This means that financial inclusion is something that traditionally every society on earth has been very bad at, because in all societies access to the core financial institutions is governed by a very small group that is directly chartered and managed by the government, and so, by definition, only the politically powerful have ever had financial inclusion.
Cryptocurrency changes that. Every crypto wallet is in itself a self clearing financial institution, able to receive settlement from another crypto wallet without anybody’s permission or help, and the same with sending it along. We’re heading towards a world where global payments simply don’t involve financial institutions – where the digital use of money is more comparable to its physical use.
How far away in the future is the real world application of crypto and bitcoin?
I think it’s a scenario much like email replacing first class mail at the postal service, where people will ask that question over and over again, until it is clear in hindsight that the world has changed.