Nearly a year ago, the Waves team raised $16 million over an ICO. Today, Alexander Ivanov, Waves Platform CEO, is a stakeholder of the blockchain community dedicating himself to both his project and popularization of blockchain technology as a whole.
In an exclusive interview with ForkLog, he spoke about establishing a decentralized exchange, bitcoin’s possible hard fork, and Proof-of-Stake. He also shared his ambitious plans for the future.
FL: Hello! What’s on the table for Waves now, and what’s the blueprint for the near future? As far as we know, you’re working on launching a decentralized exchange.
A.I.: Yes, we’re about to launch a decentralized exchange. There will be blockchainized fiat assets, though for now it’s only about Euro. There will be cryptocurrency tokens, namely Bitcoin and possibly Litecoin and Ethereum. Matching will be fast and localized, and, just like at other exchanges like Poliniex, assets are transferred across blockchain.
Money won’t enter the exchange, it only matches the orders. The money remains with the customers, so the trading may be as fast as at a regular exchange. We’ve opted for some middle ground between centralization and decentralization. The solution’s advantages are about combining blockchain’s safety and centralized services’ speed.
We also have slightly changed the consensus algorithm, which will be Bitcoin NG. Actually, nobody’s ever done that before neither for PoS nor for PoW even though the system is well-validated, and nobody spoke ill about it. It could be implemented as a soft fork, i.e. there won’t be any need for a hard fork. Such a system enables us to use mining resources more effectively: there’s another miner bentwee two major blocks, so you can effect any number of transactions. We could reach a thousand transactions per second.
The next big step is about various cryptographic stuff. Like, there won’t be any need to store balances for all assets. Also, most likely this autumn, there will be smart contracts, though different from those in Ethereum. This allows for closing more than 95% of all smart contract cases.
FL: So, you mean to absorb functionality of anonymous coins and smart contracts?
A.I.: It all can be done with a single sigma protocol, which is an idea by Sasha Chepurny. Any code you put in there will be executed in any case. There will be an authorization protocol. It’s all done on the level of low basic cryptography, so it’s quite realistic.
FL: How will you back fiat tokens?
A.I.: Fiat tokens will be backed under a Ripple-like system. It will be a payments gateway. There could be something like StableCoin, but for now we’re more about making some sort of a blockchain-based payments system. When it comes to traditional payments systems like QIWI, Yandex and PayPal, they essentially run balances across services. The same can be done on a blockchain with a token pegged to USD and having some backing.
FL: And no legal issues?
A.I.: Yup, it’s quite an interesting scheme. StableCoin is a great thing with low volatility, yet there are some issues worth considering.
FL: What will this exchange look like?
A.I.: In terms of design it will be like Poloniex. A person won’t have to realize he or she is trading on a decentralized exchange. In the first iteration, there might not be plots, which is a quite subtle thing, but there will be order books, we’re working on that. The second version will feature plots. In a perfect case, it will be a regular exchange like BTC-e or Poloniex where people could see a familiar interface, plots, and market depth. Our goal is to make everything clear for an average user.
FL: There’s issuance of complex tokens on BitShares like SatoshiPie. This token is pegged to an asset basket, it’s like an index. Will your project support issuance of such tokens?
A.I.: Actually, it’s a great idea. We should think about it. A token which is an index is quite interesting.
About ‘The Party of Growth”
FL: What about the initiative of ‘The Party of Growth’? How did it come to be?
A.I.: They’ve got a very active member, her name is Oxana. She visits all blockchain meetings. She came to us to talk. Boris Titov is quite a characterful person, a visionary, and he is very inspired by blockchain. I recall he once asked factory workers as a joke whether their machinery can mine bitcoin.
For now, their party has a basic solution, which is a Waves-based token. The Party will use it as a loyalty token for their members. The idea is that they interact with training centers and get tokens for their activity in order to have a discount for educational services. Generally, they’ve got pretty ambitious plans. However, it would be great to develop a voting system. Blockchain voting is a very promising area in my opinion.
Plans for the Future
FL: Are there any initiatives aside from Waves we haven’t talked about yet that you’re going to put to practice in near future?
A.I.: There will be ICO’s related to mainstream businesses. One of them is about pegging tokens to metals like zirconium. Participants will have guarantees concerning profitability and transparency. Another interesting ICO is about a network of co-working spaces. Token owners may use the tokens as vouchers to have a lifelong right to use participating co-working spaces and business hubs. Owners of said tokens will even have a discount.
Additionally, we’re preparing a partially decentralized platform for issuance of various tokens, including blockchain-based security tokens pegged to corporate assets. It will be a platform that brings together open tokens and tokens pegged to securities, which are semi-closed. Their owners will have to disclose relevant information. We’re also going to establish a global platform with CAT’s, tokens pegged to assets, crowdfunding tokens, etc.
Also I consider creating a fund to invest in tokens and corporate assets that issue Waves-based tokens. Now we’re trying to ensure compliance of said schemes, but it’s not that easy.
It all might be going towards mainstream. There are lots of people interested in those technologies. It’s high time to develop, lobby and adapt to prevailing legislation. I even heard there was an initiative of trading tokens at the Moscow Stock Exchange. It looks like madness for now, but there are serious attempts to lobby it. If it happens, everything will change, and this ICO thing will become something bigger.
Such options are already available for bonds as there are fewer legal restrictions than in shares. As far as I know, bonds market could be blockchainized in Russia.
Quite possibly, there will be some laws passed due to this increased interest, like a cryptocurrency bill currently being developed by Elina Sidorenko. If it happens many things will change, and big businesses will enter the area. There are many Russian entrepreneurs asking what to do with it. They realize it’s not something specific, they see it can be integrated in a mainstream business fast.
About Proof-of-Stake and Bitcoin Hard Fork
FL: You know that 100% Proof-of-Stake is being widely discussed now. Some say that PoS is okay and has been tested by lots of existing projects that successfully use it. Other say that 100% PoS is unsafe and may result in centralization. Waves uses PoS. What’s your opinion on this issue?
A.I.: Experience has shown that PoW is no safer than PoS. We know that if several mining pools combine their efforts to get over 50% of hash power, centralization will follow. Therefore, it’s some sort of social consensus, not technology, that dominates in PoW. I don’t believe that PoS is worse than PoW at present stage. They’re quite equivalent yet PoS has obvious advantages. At least you don’t have to burn enormous amounts of resources.
At the same time, I don’t think Ethereum will go PoS, at least in the foreseeable future. So far they’ve been only talking about this. The transition will require a complex and expensive transformation. It won’t happen within a year. However, PoS is cool, and what Vitalik does is also cool. I like that he talks about economic finality, i.e. such kind of PoS that would ensure consensus even the network is conquered by some ‘evil whales’ controlling 70 or even 80 per cent of all coins. We also think about the ways of integrating such a system in order to enhance the system’s security at least theoretically.
FL: There’s another interesting issue concerning PoS, which is bitcoin’s hard fork. Bitcoin Unlimited regularly undertakes technological and media attacks on the network. There are lots of discussions in this regard. Do you think it’s realistic that bitcoin could be hard forked this year?
A.I.: Everything’s possible. Some people kill a golden goose. Generally speaking, bitcoin is just too big to fail. But everything happens, and I can’t exclude there might be some sort of a ‘Chinese bitcoin’ that doesn’t give a damn on the ??American bitcoin.’ For now, there aren’t too much players involved in the ‘new bitcoin.’ When others join, there could be a scenario similar to Ethereum Classic. You have to carefully watch the market to know when to dump.
About Other Projects
FL: Speaking of the recent projects, which ones do you consider noteworthy, interesting and useful for the infrastructure?
A.I.: Frankly, I don’t know. It might be Golem, there are guys from Ethereum working there. Though generally, I don’t really believe in distributed computation systems. There were lots of similar projects before blockchain, and there were lots of technical issues. None of them worked. There’s a logical question: is distributed computation more economically sound than Amazon? I’ve no idea as to how it all will go.
Steemit is also an interesting thing. They’ve got a bit weird economic model, yet the very system of Content Distribution is quite vivid. There has to be some testing for solutions in this area. Blockchain could be useful here, that’s for sure. ZCash is also interesting as it is about the first ever implementation of cryptographic solutions that Bitcoin lacks.
Sasha Ivanov was interview by Toly Kaplan