Livestream Date:
December 15th, 2020
Guests:
John Nieri (General Protocols)
Jonathan Silverblood (General Protocols)
Lightning (Column Writer)
It’s been a month after the fork, what’s the BCH community been up to? Can BCH’s smart contract build defi products and compete with ETH? Why was AnyHedge and Detoken launch delayed？ Let's find out.
Self-Introduction
Q. Cindy Wang(Cindy): Please introduce yourself.
Jonathan Silverblood(Jonathan): I started in 2013, mined my own Bitcoin and got some merchants to accept it in my hometown. In 2018 I decided to work full-time with Bitcoin Cash and built CashID, CashAccounts, Cashual Wallet and AnyHedge.
John Nieri(John): I first read the Bitcoin whitepaper in 2014. And I understand that the real P2P internet money is possible. But at that time, I was mostly an investor in the space. Later I participated in the blocksize debate and realized Bitcoin Cash is our way to keep the P2P currency alive. So I fully support Bitcoin Cash and decided to run businesses in the BCH ecosystem full time.
Lightning: I am a crypto column writer. I think the concept of decentralization is a good supplementary to the real world. I’m familiar with the scripting engine of Bitcoin. And recently I’ve been paying special attention to BCH as developers are building smart contract on it.
General Protocols
Q. Cindy: What’s the story behind General Protocols (GP)? Tell us what the team looks like.
John: GP was created one year ago. We all believed that there is so much we can do with smart contract on BCH. So we paid everything for ourselves to build infrastructures and tools. After we proved that we are building a real thing, we found investors.
Now we have six people. Our team is amazing and we definitely started GP together. I just convinced everyone that we could be successful. We have me as a president, Jonathan Silverblood and Rosco Kalis as developers, Marcel Chuo and Eric Teng doing business development, and Ian Descôteaux and Say-Tar Goh as advisors. You can read more about our team at generalprotocols.com.
Q. Cindy: The Chinese community has growing interest in AnyHedge and Detoken. Tell us what these two products can do with BCH?
John: Technically speaking, AnyHedge is an open source protocol with open source tools so that anyone can use it. However, the more important point is that AnyHedge is the first step that will open up the whole future of defi on Bitcoin Cash. We invested to create the base infrastructure, standards and tools. Now some parts of existing DeFi are possible on BCH with lower cost, higher speed, more privacy and more reliability.
Jonathan: AnyHedge is a contract to trade volatility risks. What it essentially allows is if someone wants to have a stable value to sell the volatility risks to someone who believes the price will be going up or wants to have more leverage and stronger exposure to the volatility.
Detoken will act as the liquidity provider and user interface to make access to AnyHedge contract easier.
Lightning: AnyHedge is a financial protocol. It defines where the price comes, who the counterparties are, what short is, what long is, what leverage is. According to its whitepaper, its main participants are users, market makers and an oracle.
AnyHedge also allows market makers to synthesize other assets, like Tesla stocks.
Detoken is a specific product that uses AnyHedge. With Detoken, users can have more leverage to long or short BCH, bet BCH futures.
Q. Cindy: We have many Chinese complain that GP is so lazy and often delays the launch. Have GP encountered any trouble?
John: We are definitely not lazy. We work very hard. Because we are the first to work on real defi on Bitcoin, as mentioned above, we had many fundamental infrastructure to build. That took longer than expected. However now we have a complete example of the open source protocol and tools for AnyHedge. We also have the first open source tools for a Bitcoin Cash oracle. We also have electrum-cash, an open source tool that will enable everyone to build defi and other non-custodial applications on Bitcoin Cash. Those definitely caused delays but they also created new value for all Bitcoin Cash. Now we are ready and looking forward to the Detoken launch when Detoken is ready.
【Editor’s Note: Readers can check Jonathan’s article about building smart contract to learn his story with GP https://read.cash/@JonathanSilverblood/the-road-to-anyhedge-368345a4】
Q. Cindy: Why not issue a platform token to incentivize liquidity providers?
Jonathan: We incentivize liquidity providers by having a premium, so effectively we use BCH directly as incentive. We also stay in the BCH ecosystem so the value provided makes BCH more valuable, which incentivizes everyone to hold and use BCH.
John: AnyHedge uses BCH to provide the incentives. For example, AnyHedge uses BCH for premiums. The important point is that success of any BCH defi pumps BCH directly instead of individual tokens.
Some Defi tokens provide governance for decision making. However BCH defi is basically more decentralized and the decision making for any contract is made p2p between the two people who create a contract. This reduces the centralization and hacking pressure that exists for large shared contracts in many existing defi protocols.
Lightning: What’s the business model of Detoken since you choose not to have a new token?
John: There are mainly three business models.
For GP, we make all smart contracts very easy to use. We manage redemption of each contract for people. We watch the blockchain, the price, and the oracle. And we do all the redemption activities. We make it easy for our partners. So we make money from every contract they do.
Second, Detoken could take fees for each contract, each transaction and other services users make.
Third, Detoken makes money by being a market maker.
In the bigger picture, it is all open source and p2p so anyone can work with anyone. For example Bitcoin.com wallet could use detoken liquidity. Or they could set up their own service. They could use GP redemption services. Or they could do redemption themself.
Status of BCH
Q. Cindy: Do you think it’s too often to upgrade twice a year?
Jonathan: Upgrades should be done when there are no controversies. Changes should only be implemented when they are tested, when they are proven to be valuable. Moving forward, I see more collaboration in the BCH community. I don’t think we should wait for a specific day to upgrade. Instead, we should focus on adding features that are needed by users, and will bring more value to us.
John: I think miners, mining pools, businesses and developers should all get involved to discuss what users want instead of getting involved at the last minute. We need to engage more in discussions about what users need.
GP also has some upgrades we need that are very important to us. But instead of doing it as fast as possible, I think we should wait to get more support and make sure the process is good.
Lightning: Twice per year is not the real problem. The real problem is that we added features that are not important every time. It’s too ridiculous that we ask exchanges and wallets to suspend services twice a year for BCH in order to add features that nobody even cares about.
Q. Cindy: Tell us more about your proposal to have a new pricing unit for BCH.
Jonathan: I proposed to agree on alternative units in addition to BCH, not change the current unit. I wish to create some unity and application value by having a pricing unit that is compatible with accounting and sales systems.
I had some very bad experiences paying BCH. One experience was that when the merchant entered a number, he started entering 0.0000..and when he tried to out the number, systems just didn’t accept that number because it’s signed by two decimals. The world uses two decimals or none decimals at all.
The other thing is that accounting and sales software often uses ISO-4217 currency codes. But BTC and BCH don’t have such codes, which makes it difficult to integrate with the systems. I suggest we create a documentation to formalize a name for both the satoshi unit and bit/cash unit, which is 100 satoshis.
Q. Cindy: Why so many early crypto adopters hate BCH while big institutes all acknowledge that BCH is one of most established cryptocurrencies?
John: It’s a long story. It started from the scaling debate. I think people have no reasons to hate BCH. ETH and BCH have better fundamentals than any other projects.
Lightning: I don’t agree with John. People hate BCH because it makes people suffer losses. Users don’t care about infrastructure. All they care about is if they can speculate the coin at exchanges.
Large institutes like PayPal and Grayscale support BCH because it’s one of the top five coins in market cap. All they care about is liquidity and market depth. They don’t care what the coin is. Even if it’s shit, as long as it has large liquidity, Wall Street will buy that.
【Editor’s Note: John believes that liquidity is part of fundamentals as well.】
Q. Cindy: I hate to ask this, but why has BCH price been performing so badly?
John: In the global scale, the crypto market is still very small. Prices in crypto are still very speculative and marketing based. Though ETH and BCH have much better fundamentals than any other networks, ETH also has good marketing while BCH does not. BCH ecosystem highly values decentralization but decentralized marketing is hard.
I lived through the dotcom crisis. When the internet was still new, the valuation of dotcom was crazy. There were so many companies that had insane valuations. But they all died because they had no fundamentals.
At GP, we are doing both. We want the price to go up, but we only work on chains that we believe have the real fundamentals, that will survive the speculative phase. We want the long term and short term value.
Flipstarter
Q. Cindy: Recently I realized that there are people out of the BCH community using Flipstarter to raise funds. What’s your development plan with Flipstarter? Will I be able to create tokens to reward my donors?
John: We did not expect people to use it after the first campaigns. We have been surprised and happy that many people have been able to use Flipstarter even from outside the BCH ecosystem. When we made Flipstarter, we only had 2 months to design, implement, market and release it. It was a crazy speed and we had to make hard decisions about what it can do and what it cannot do.
Regarding plans, we have created a set of upgrades that anyone can work on. Especially we want a better user-interface, easier setup, and everyone wants tokens. Flipstarter still has a budget to fund work on the project, so any developer can come and make a proposal and we will probably fund it. There is much to be improved. We need people to join us. All open source developers, please come to gitlab.com/flipstarter and check it out.
Jonathan: I didn’t include this feature because there was not enough time. I would like someone to build a platform that uses Flipstarter and supports tokens.
Lightning: Flipstarter is a great voluntary fundraising tool. But it’s still too complicated for many people to use. I did some research and found that charity organizations in western countries would take away a large portion of the donations. As crypto lovers who believe in decentralization and zero tax on donation, they find Flipstarter truly amazing. I think Flipstarter could become even more successful if it could be integrated with wallets like bitcoin.com.
AMA
Q. Audience: What’s the competitiveness of BCH against ETH?
Jonathan: One advantage is the UXTO model in comparison to the single contract model. With the UTXO model, every contract is its own entity. It has better privacy and security. For example, if you look at many smart contract solutions on Ethereum, all the money staked in the system are publicly known and visible at a single location. It increases risks for hackers to attack the system as they could calculate how much value they could get.
But with BCH’s UTXO model, every contract is unique. And since they are hidden behind a Pay-to-Script Hash, you can’t know what contract is what. You don’t know where the money is, you don’t know the size of it.
The other strength is BCH’s scripting engine. With it, the computational cost of each contract is much much more constrained. And by being more basic,it is easier to write robust contracts with.
Q. Audience: What is the most valuable thing to do now for BCH?
John: The most valuable thing is not protocols and not development. It’s entrepreneurs. It’s business people to find use cases and do marketing.
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