NEAR Co-Founder: Bitcoin’s Level of Security Isn’t Necessary for Most Blockchain Use Cases


Now a world-class developer living in Silicon Valley, NEAR co-founder Alexander Skidanov went a long way from a young programming-inclined student from Izhevsk, Russia.

In an exclusive interview with ForkLog, Alexander explained why he moved to the U.S. and how he got to Silicon Valley, shared the story of getting funded by Andreesen Horowitz, and told about the ideas and people behind NEAR, one of the hot PoS blockchains out there.

Genesis: Move to the U.S. and the Inception of NEAR

ForkLog: Let’s start with the basics. Tell us about yourself and your way into the industry? I believe you currently live in the U.S. but were born in Russia. Why did you move to the States?

Alexander Skidanov: I was born in Izhevsk. After graduating from school I went to Izhevsk State Technical University. It’s no Moscow State Uni where you’d find the best students from all around the country, but I got there at a unique moment.

During my first year, there were two very clever guys there who participated in programming competitions and got to the ICPC World Finals right at that time. To me, what they’ve accomplished looked like some kind of magic.

Those guys stayed at the university to prepare the next team for the championship and I was one of the members. In 2008, we took third place. This allowed me to land a job at Microsoft and I left the country.

At Microsoft, I was working on Bing and got involved with machine learning. I didn’t stay there for too long, it was between 2009 and 2011. Things were too slow there and I left for Silicon Valley where I joined my friend’s startup company MemSQL.I was the first engineer there. We were living and working in a 2-room apartment together with a dog. If you’ve watched the Silicon Valley TV-series, you’d find it somewhat similar.

At MemSQL we were making fast sharded databases that could be deployed on a large cluster. Between 2011 and 2016, I was working on sharding in particular. Now, MemSQL is used by many Fortune 500 companies.

In 2016, I met Illia [Illia Polosukhin, NEAR co-founder]. He had previous experience with contests and I knew him indirectly thanks to our mutual acquaintance in Kharkiv. Back then, Illia worked on TensorFlow at Google

We got involved in machine learning together and wanted to create code that would write programs using formal specifications without human intervention.

In 2015, machine learning was growing very quickly. It seemed that the very next year we’d reach something along the lines of technological singularity. Yet by mid-2016, the trend fizzled out and our forecasts turned out to be wrong. Sure, there were some breakthroughs, but they were still slow.

These days, the code is written before formal specifications. We decided to do it in reverse, but after investigating the matter, we found out that it was impossible at the time.

We began to move away from this idea, but along the way, we’ve talked to many developers, some of which were involved in the blockchain industry. That’s when we’ve learned that half of the decentralized apps can’t be deployed because everything is slow, expensive, and complicated.

Solidity isn’t a trivial language. Sure, you can print “Hello world” by the end of day one, but creating stable code that won’t crash, can’t be fooled, and accounts for everything is hard. Therefore, the entry threshold is very high.

FL: People criticize Solidity as a language for smart contracts. The argument is that it is too complicated and something less pretentious would do the job. Do you agree with this opinion?

Alexander: It’s hard to say. There are multiple reasons to criticize Solidity but for me, the biggest problem is the high entry threshold for engineers.

Before 2017, I didn’t know a thing about blockchain, aside from the fact that it exists. On the surface, there were just scammy projects and useless whitepapers. But looking a bit harder you could find potentially interesting ideas. The main question was why nobody tried to implement these ideas. Initially, we thought that the problem is the speed just like everybody else did, but it was a weak argument.

Think about it. How many users do you need for 14 transactions per second to be insufficient? There’s a startup mantra: hack together a product, release it to the market, and see what happens. On Ethereum, it would be quite an easy thing to do if speed was the only problem. Developers would make slow solutions and then work on the speed. We haven’t seen any slow solutions.

I started talking to stakeholders and figured that there are two main problems. The first one is the high entry threshold for engineers. To learn Solidity you have to be sure that the return will be high. Objective-C is even worse, but you have to learn it if you want to develop for iOS and earn big. If you want people to come and kickstart a technology, the threshold has to be low.

The second problem is the unfriendly interface. A regular user simply can’t use blockchain apps. If I want to buy a cryptokitty, I have to install MetaMask, create a key, write down the seed, go to Coinbase, give them my passport, and then wait for five days until I can buy ETH. All that just to play a game. Nobody would go for that.

Just so you can understand the atmosphere of late 2017, the hottest scaling solutions were Spacemesh, Algorand, Thunder, Stellar, and to some extent Avalanche. Back then, Polkadot remained out of our sight.

We looked at those solutions: some could work in the wild, but none could scale up indefinitely. They were able to solve the problem in the short term.

Some projects, such as Hedera Hashgraph, used different tricks to overstate the number of transactions they can process. They counted 10,000 Tps without state root support. But if you have no state root, you have to trust the nodes. At the recent Devcon, Emin Gün [Sirer] said that Avalanche processes 3,000 Tps, but without state root. When they added the state root update, they got only 200 Tps.

FL: Is NEAR the first and only project of yours in the blockchain industry?

Alexander: Yes.

FL: You started in late 2017, correct?

Alexander: Yes, that’s correct. Back then, scammers started getting fewer as people started to understand that most whitepapers were made to take their money. After us, Libra and Flow were the only layer-one projects announced.

FL: By the way, researchers have found that whitepaper page count correlated with the amount of funding received over an ICO: projects with longer whitepapers were getting more money. Did you avoid a public token sale because the concept is discredited? 

Alexander: Not exactly. Rather because in the U.S. it is very difficult to do legally. We are an American company and an ICO can be qualified as a securities offering.

FL: Is your company for-profit?

Alexander: There’s a U.S. company NEAR Inc. Its goal is to create the protocol. We are nominally registered as a for-profit, but in fact, the company is unlikely to have revenue. There’s also NEAR Foundation [Zurich, Switzerland], a non-profit whose task is to promote the protocol.

The first money was raised by NEAR Inc. We offered investors SAFT contracts so they can receive tokens after the protocol launches. In the last round, funds were raised by NEAR Foundation, which has no obligation to work with NEAR Inc.

Telegram Open Network Lessons

FL: The litigation between the SEC and Pavel Durov shows that an entire investment scheme from SAFT sale to the secondary market launch can constitute an investment contract, not just SAFT. Are you worried about following the same path?

Alexander: I don’t get too deep into the legal matters but I know that our lawyers analyzed the TON case and studied the caveats. To me, it isn’t at all obvious why TON couldn’t launch. What can the SEC do against a decentralized protocol? I don’t understand why couldn’t they deploy a network with investors written in the genesis block. It goes over my head, but I think Durov knew what he was doing.

Let’s assume that the SEC comes to us and closes NEAR Inc. It isn’t that bad. The code is stored on GitHub and validators can deploy it. The SEC could force validators to cease, but then there’s definitely something we’ve done wrong.

FL: Do you agree with Durov that it isn’t entirely fair for the SEC to have extraterritorial jurisdiction? Investors outside the U.S., especially in Russia, were disgruntled with the fact. Why should an American regulator decide whether they are allowed to get tokens?

Alexander: I can agree with him, but I can’t do anything about it. I don’t agree with the decision not to launch, but he obviously had good reasons for that, probably personal responsibility.

For NEAR Inc., it is probably beneficial to have one competitor less. But we stick to the anarcho-maximalist views. It isn’t the victory of NEAR that’s important, it’s the victory of a good decentralized protocol in general.

My goal is to create an internet where all the apps are decentralized and governed by the community, where nobody is being surveilled. Blockchain is an important component of it, but not the most important. The most important thing is to have decentralization and appropriate values. I am largely upset that TON didn’t launch. I think Durov should have launched, although I don’t know the entire picture. He could’ve had no choice.

What Is Open Web, the Internet of the Future

FL: You’ve mentioned the internet of the future. That’s Web 3.0. What’s this concept about? When will we be able to say “yes, we’re there, this is Web 3.0 now,” in your opinion?

Alexander: We also call it Open Web, because Web 3.0 is largely associated with Polkadot, which is promoting its own protocol rather than the general idea.

I think that most Open Web services will still be operated in a centralized manner since it’s cheaper. In the Open Web, everything has to be transparent. I shouldn’t get 20 megabytes of front-end sporting 200 trackers I can’t even detect without special tools.

Imagine creating a Google Document a day before Google decides to change the UI or kill the service entirely. In the Open Web, there has to be a clear separation between my data and the tools I use to create them. I shouldn’t lose this Google Document in any scenario.

Back in the time of ICQ, there was a single protocol and different clients: I used Miranda, others used QIP or ICQ. Now, there’s no such thing.

If I have a friend who uses Telegram and I use [Facebook] Messenger, I have to use both. If Messenger decides to have 200 functions and a particular input field, that’s the way I’m using it and there’s no other choice. If Messenger dies tomorrow, my messaging history is gone forever. Such things should not have a place in the Open Web.

The way it should be is that I have data, chats, conversations, documents, etc., they are all mine and I can’t lose access to them. The tools shouldn’t disappear as well. You can achieve it by making the back-end open and storing the state somewhere on a decentralized cloud. Not necessarily blockchain or NEAR. Such a solution wouldn’t require that high of a complexity level.

In the Open Web, if the service operator is gone, me or anyone else can take their place. We can launch separately. There can be 200 operators so I can choose whichever I like.

All in all, everything comes down to the following: users have to have access to their data, they have to know which data have been shared with third parties, and the third parties shouldn’t store these data in a centralized manner.

If the protocol is changed tomorrow, in the Open Web, we don’t have to take it. We have to have the choice, and we had it in the past. We aren’t inventing something new, but just rolling the internet back into the past.

FL: Just let the interface stay!

Alexander: Yes, let emoji stay.

FL: Going back to the beginning of the question, do you think that Polkadot monopolized the name “Web 3.0?”

Alexander: We are friends with Polkadot so I don’t want to criticize anybody. I think that the name of the project can’t be the name of the movement and they have the Web3 Foundation.

We don’t try to tie the Open Web to NEAR. We want the Open Web to be the movement for the free internet. It isn’t crucial whether NEAR is in there.

We make NEAR for the people, but if people decide that Polkadot, TON, or Ethereum 2.0 is a better fit, it’s their choice.

All-Star Team

FL: You said NEAR Inc won’t have revenue. You are working on the protocol every day, it’s your creation, but the final result is a decentralized network that lives on its own. You are the creator, but there’s no profit. Do you consider yourself an entrepreneur, or is it something different?

Alexander: Although NEAR can have no revenue, each employee, myself included, has a small number of tokens. Thus, we are all motivated to build a successful protocol. Both employees and investors receive tokens with years-long delays so everybody has an incentive to aim at long-term success.

FL: Did you decide how many tokens you should have?

Alexander: Yes, we were deciding how many tokens each employee gets. To build a protocol as complex you need a strong team. Projects like Algorand, NEAR, and Cosmos need very strong developers who know what they are doing. Such people are expensive. You can’t do it like anarchists.

Looking at Ethereum clients, you’d notice that many teams behind them are smaller and weaker than Algorand, Dfinity, or NEAR. They are noticeably slower.

FL: Dfinity is indeed in some kind of stealth mode. There’s not much at all to hear about them.

Alexander: It puzzles me as well. They have a very strong team, even legendary. They are very isolationist. Only once was I able to talk to their CTO and it was just for an hour. He said that they were writing everything in Haskell but then decided to switch. I don’t know what they are using right now. I guess it’s Rust or Go.

[On June 30th, Dfinity allowed third-party developers to access their decentralized Internet Computer.]

FL: Let’s get back to the entrepreneurship question. Assuming that the launch took place, tokens are traded somewhere, and you have a profit. Does it mean that you consider yourself an entrepreneur?

Alexander: Yes. Many protocols sold up to 80% of their tokens. We’ve picked a different approach. We wanted to sell as few as possible.

Together with Illia, we started from scratch. First employees were taking serious risks. Now, we have an incredibly strong team. Two guys on our team have each won the ICPC World Finals twice. You can’t compete in that event more than twice in a lifetime. To win it twice you have to not lose a single time. There are just 9 people who achieved that. One of them is Nikolai Durov. We got two: Mikhail Kever and Evgeny Kapun.

FL: And all of them are from the CIS? 

Alexander: Moreover, almost all are from Saint Petersburg. Two came out of Saint Petersburg State University, four out of Saint Petersburg ITMO University, and the last three are from Moscow State University.

FL: You said that specialists like that cost a lot. How much a year?

Alexander: I won’t disclose the actual salaries at NEAR but I can describe typical cases for Silicon Valley. Here, a good engineer from Google or Facebook can’t have less than $300,000 with bonuses and shares. At least I can’t imagine it. So it is north of $300,000 and there’s no upper limit.

For a startup, the typical pay would be between $120,000 and $250,000. Of course, outside the Valley the prices are different.

We have 40 people on our team so money burns fast. Another big part of the costs is compliance and everything that has to do with the legal side of things. Marketing is less expensive.

Life and Investment In Silicon Valley

FL: Do you think that the price of living in the Valley is justified? Many people leave the place because of the pandemic. Do you think about leaving?

Alexander: I’m potentially going to leave, it’s been almost 10 years since I moved here. We only live once, so there should be some diversity.

I think the Valley didn’t make much sense before the pandemic. Now, even less so. The exodus is very noticeable. Our employees have all moved somewhere else and are working remotely. Some are in Seattle, some in the central U.S., some left the country entirely.

I stayed because everybody [in the IT community] is here. Life is unreasonably expensive here, even given that in our family both me and my spouse work.

When we started NEAR, we’ve assembled a team of nine and everybody was here in the Valley. You can’t find specialists at this level in one place anywhere else. The same goes for investment. In our first round, some of our investors were within walking distance, while others were about 30 minutes of driving away.

FL: Is it objectively easier to raise money in the Valley if you are physically located there?

Alexander: Of course it is, and by far. Those who want to attract venture capital come here for two weeks and have each day full of meetings. Then they leave if they aren’t based here.

FL: Mark Andreessen isn’t just waiting for startups to come to him, he also looks for “diamonds in the rough,” to offer his money. And when he does, he helps projects with everything he can. Is it true that they assist portfolio projects in all aspects? How does it feel to get funding from the living legend?

Alexander: Finding a fund in the Valley is easy. Their task is to spot the next unicorn. They will never decline a meeting if there’s the slightest chance that you succeed. With Andreesen Horowitz, the entry threshold is higher but we never had a problem reaching out to any investor. I believe it’s the same for everybody else. If there’s something showing that your company is reliable, they will go for the meeting. In our case, my and Illia’s expertise played a crucial role. For them, it’s merely an hour that can potentially bring a lot of money.

It is true that Andreesen Horowitz is different in that they really try to win you over. When they have decided to invest in you, and even if they haven’t yet but are already thinking about the next step, they organize a meeting for 20 people who help the projects with everything. In our case, the meeting lasted for over two hours and each of them was telling us how they will help with examples and presentations. That was very nice.

FL: So it’s not just money but also the help?

Alexander: Yes. I’d say that 80% of the investors who promised you help won’t actually help [laughs], but the other 20% will. And then there’s also 5% who will do everything they can for you. Andreesen Horowitz is just like that, as well as Electric Capital and Amplify, which we worked with before blockchain.

Yet it wasn’t easy to win Andreesen Horowitz. They are demanding. They have a strong team that analyzes you. I was very glad when we finally won them.

Before that, we passed through Y Combinator, which was also an achievement.

FL: How did you win them over? Was it by describing how you would defeat the competing protocols like Polkadot and Cosmos?

Alexander: No, that wasn’t our approach. And they are smart enough to cut off nonsense like that immediately. I don’t think that NEAR will necessarily win. Polkadot is a very strong product and I think they will keep the dominant role in the long run.

We were proving that the blockchain space is much bigger than is seen today if made accessible to people. Big enough for everyone. NEAR can coexist in this space with several other protocols.

FL: The goal of any VC is clear: exit at a price higher than the entry. Let’s assume that a project X sold Andreesen Horowitz a SAFT contract for a certain number of tokens. VC’s task is to have the protocol launched, wait until the tokens hit the exchanges, and sell them, at least that’s what would seem logical. This is where our project X faces problems with the SEC since such motivation for investors confirms that SAFT and the subsequent operations constitute securities in the U.S. What do you think about it?

Alexander: This is exactly the reason we spend a lot of money on compliance, just like Andreesen Horowitz does. The goal is not to find a loophole but to do everything legally to the letter. I can’t say how our contracts are different from TON’s.

I can just say that our contracts grant rights not only to the tokens but also to a share in NEAR Inc, as far as the first round. I can’t say anything about the second round [the one with Andreesen Horowitz].

FL: If NEAR Inc. isn’t profitable, what’s the value in the shares?

Alexander: At the initial stages, investors aren’t sure if you manage to launch the protocol, given the failures of others. But NEAR Inc. has a strong team that, in case of a failure, can switch to some other project and then go for an IPO. For investors, this is insurance.

Sexism and Racism In the Corporate Sector

FL: The Bitcoin industry is often criticized for having high entry barriers for women. In your opinion, is this critique appropriate? 

Alexander: It is true that the IT industry isn’t very diverse, it has fewer women, fewer Afro-Americans. On NEAR’s engineering team there are just 2 women out of 20 employees.

In fact, I think the situation with blockchain development is actually better than with other development communities.

FL: But is it natural or there is some kind of an artificial barrier and they aren’t allowed to get in?

Alexander: I definitely don’t think that women are being deliberately excluded. I believe that most companies won’t write a candidate off just because of gender. There is an interview and you either pass it or you don’t.

On the other hand, I can easily see how some people can have subconscious barriers that make them inadvertently downplay people’s skills based on their gender. First and foremost, the problem lies in the cultural background that’s instilled from a young age. It is especially apparent in Russia but can be observed across the entire world.

It creates biases that pertain not only to interviewers but to women themselves who doubt if they can handle a technical profession because their culture forces other goals upon them. It is also very hard to eradicate.

FL: In 2020 racial/gender balance plays a crucial role in forming a board of directors or hiring employees. This approach may hinder picking the best person for the job every time. In your opinion, is it normal to follow such trends or picking people by professional merit is better?

Alexander: This is solving the symptom, not the cause of the problem. Culture dictated this skewed distribution and they offered to solve it artificially. Nobody is better off this way, especially your own company.

I oppose such an approach. Firstly, it wouldn’t be pleasant for a person to learn that they’ve been hired just because of some quotas. Secondly, it’s unfair to all the people who didn’t land a job despite being a better fit for the role. Ultimately, it’s unfair to the company that didn’t get the best employees.

If 5% of people in the labor market are women and 95% are men, you will unsurprisingly see the same distribution in your workforce. Everyone in NEAR got their job because they were the best in their trade.

FL: Did the BLM protests affect operations of your U.S. team? Do you think such a reaction from society is adequate?

Alexander: It didn’t have much impact on our work directly. Although, for many people on our team it is important. They were taking short vacations to attend the protests. They are involved and I do watch the events closely as well.

I don’t think this is a reaction to a single incident. The incident was a catalyst. That many people wouldn’t go to the streets if there was no problem.

Protocol 0

FL: Bitcoin maximalists believe that Ethereum and other protocols are useless, to put it mildly. They are confident that Bitcoin should be the TCP/IP of the blockchain industry, the single base protocol. In your opinion, is it a form of chauvinism? 

Alexander: It is a multi-faceted question. Surely, Bitcoin is very different from NEAR. If NEAR loses two-thirds of the stake, the protocol will stall. Bitcoin will work for as long as there is at least one guy with a Raspberry Pi.

I think that for Bitcoin, 7 Tps is an advantage and not the other way around. It allows anyone without much capacity to go and check the entire ledger. To check the entire ledger in NEAR you would need enormous resources. If you have 100 shards processing 200 Tps each, you would have to check 20,000 transactions for each second from the launch to this day to check the validity of the current state.

The properties and use cases are very different. If you need to send $1 billion, you should do it with Bitcoin and wait for two weeks until it is confirmed.

NEAR solves an entirely different problem. The level of security should be adequately proportional to the use case. Bitcoin’s level of security isn’t necessary for most blockchain use cases. If I want to buy a cryptokitty for ten cents, I don’t need Bitcoin’s level of security. If I want to exchange 100,000 DAI for 500 ETH, I wouldn’t need such security either, because validators aren’t interested in reverting the chain because of $100,000.

I think Bitcoin will remain in the first place for quite a while and Ethereum will remain in the second. NEAR doesn’t have a goal of dethroning them. I think Polkadot and other projects aren’t aiming there as well. Different protocols have different goals.

On the other hand, Bitcoin maximalists overstate the security of the first crypto, as well as its decentralization. In the end, there are just three mining pools. They can just go and roll the network back. Of course, users could take back their capacities but it takes time and the pools would be able to roll back 10 blocks. In Bitcoin and Ethereum, decentralization and security are questionable.

What’s a single day of secure operations for Ethereum? It’s 2 ETH per 15 seconds, which is very cheap. In certain conditions, rolling back one day’s worth of Bitcoin transactions is much cheaper than doing the same in a BFT chain like Cosmos or NEAR. Not in absolute values, though, as Bitcoin is quite expensive.

FL: So there’s no need for a base protocol like TCP/IP?

Alexander: I think it would be great to have a global first layer that would provide core security for all networks. Yet I don’t think that Bitcoin, Ethereum, or any other protocol available fits this description.

This protocol should be incredibly simple so anyone can go and check how it works. Today, only Bitcoin boasts such a property.

FL: What about the Inter-Blockchain Communication (IBC) protocol by Cosmos?

Alexander: IBC has another problem that, in my opinion, won’t let it become the base protocol. Protocols that communicate via the [Cosmos] Hub have to follow a certain criterion like implementing Tendermint.

The base protocol shouldn’t be associated with a centralized enterprise and shouldn’t be supported by venture capitalists. It should be along the lines of something made by two [cypher]punks. This protocol should make building bridges easy.

Ethereum won’t do because it is too complicated. We are making a bridge to Ethereum, through which it will be communicating with NEAR. There are no adequate specifications, you have to go to Geth sources, the protocol is catastrophically complicated. You’d need a week to figure out how to make a confirmation. It shouldn’t be like that. Moreover, the security of Ethereum is proven only by the fact that it’s five years old. You assume that in five years someone would find something. This is the only guarantee you have.

FL: Is that bridge located on a separate shard?

Alexander: No, it’s a simple smart contract. We are also making a Bitcoin bridge. It’s like tBTC but much simpler. I don’t like complexity, I think that the Bitcoin bridge should be simple. Complexity breeds bugs.

NEAR and Real-World Use Cases

FL: Tell us about NEAR token distribution. Do you agree that staking leads to centralization where a few large players vote to decide what’s next?

Alexander: The team has less than 5%, including us and future employees. Investors, I believe, have a bit more than 15%.

FL: The rest will come as airdrops?

Alexander: We are discussing a lot of ideas. Some tokens will be held by Near Foundation, but it won’t be able to stake them. They will need funds for further protocol development. We are considering airdrops and public sales as well. It is less decentralized than I would like but much more decentralized compared to other PoS protocols.

Speaking of centralization in PoS, In NEAR, you can probably theoretically acquire a stake of 10%. There are 40 people on the team, but we are all friends to the outside world, so we all count as a single stake. That’s not exactly how we achieve security.

There are three pools in Bitcoin. NEAR has a potential number of people who can do something bad. Yet if it’s less than a third, they won’t be able to do anything. In the worst-case scenario, if a third minus one person act maliciously and two other participants are offline, you can’t make a block. If a third acts maliciously, there’s a theoretical opportunity to make a fork but it’s still very hard to do in practice.

FL: Regular users buy tokens and stake them without voting. It is hard to get them involved in the development of the network. How are you going to approach it?

Alexander: We aren’t making on-chain governance yet. Users will be delegating their tokens. Meanwhile, if the person you’ve delegated tokens to acted maliciously, your tokens aren’t going to burn.

FL: Do you use DPoS?

Alexander: Yes, but at the smart contract level. At the protocol level, there’s no DPoS. This gives us more flexibility but there’s no difference to the end-user.

If I’m a staker like Bison Trails, I can deploy a smart contract with my account and people will be able to delegate tokens via this contract, which will automatically stake the money. The contract can state that I am responsible for any malicious activity and only my 20%+ of the stake will burn, while the rest of the tokens will be returned to their owners.

If the consensus won’t work, NEAR’s value will rapidly decline and validators will lose lots of money. They are economically motivated not to create a fork.

FL: Is the number of validators limited?

Alexander: Any number can go for it, but in reality, there are 100 validators in each epoch, that’s with the largest delegation.

FL: As far as I understand, NEAR, Polkadot, and other new-generation protocols are aimed at DApp deployment. What real-world use cases can be implemented in DApps? Cryptokitties doesn’t count. The majority points at DeFi. Are there use cases apart from DeFi?

Alexander: I think in the nearest future, a year or two, it’s just games and DeFi. Maybe digital assets as well, but they often boil down to games, such as putting me in control of my Counter-Strike items and not Valve. Or books in iBooks.

We’ve analyzed about a hundred use cases that involved cutting out the middleman, such as a decentralized Spotify that would allow musicians to get rewards directly from the audience. There are similar solutions for visual art.

Digital identification should also move to blockchain because now it’s Facebook and Google, which is a terrible status quo. Aside from that, blockchain should become the final arbiter of everything that goes on in the Open Web.

For blockchain-based apps to be usable the entry threshold should be lowered. Applications on NEAR will be used via a browser, users will be able to restore keys in usual ways, we’ve accounted for convenient centralized gateways.

A centralized gateway is used only to enter the ecosystem and is implemented in such a way that at any given moment you can generate a new key pair locally and terminate gateway’s access.

As long as you have a kitten for 20 cents, you don’t care if it’s controlled by a centralized service. It is important that you can go and take your kitten at any time leaving the service with no control.


FL: Let’s move on to the last series of questions. Your answers should be yes or no. The first question: is privacy a basic human right?

Alexander: Yes.

FL: On-chain analysis tools like Chainalysis were made for deanonymization, Does it mean they violate the basic human right?

Alexander: No.

[Over the course of the discussion, we’ve concluded that Chainalysis has the right to create such a product and a user has the right to ensure their privacy. Moreover, the creators of the protocol and the community should do whatever they can to inform end-users about this opportunity.]

FL: Adam Back compared Ethereum to the controversial startup Theranos and Buterin to its founder. Back claims that Ethereum didn’t deliver on the promise made at the early stages of the project. Do you agree with this comparison?

Alexander: No.

FL: Recently, Buterin told ForkLog that decentralization is an experiment and Ethereum succeeds in it. It was the answer to the question about the emergency hardforks and manual control by the developers. He said that the developers can’t force their will upon the community. Do you agree that they succeed with this experiment?

Alexander: No.


FL: In your opinion, is Ethereum 2.0 at its final stage?

Alexander: I think the developers know very well what they want to do. But going back to the question about their decision-making process, I can say that it’s quite bad.

They spent a year on the ProgPow solution, which the end-user doesn’t care about. The move to ETH 2.0 requires the current chain to respect tokens minted on Beacon Chain. This decision will take a lot of time to make.

But I don’t think they have some principal issues left unsolved in terms of development. It’s just very slow. It’s being made by different teams, some of which have something like five people. New specifications emerge and sometimes they have to roll back.

Beacon Chain took them a year to make. That’s the easy part. In NEAR, we’ve done something similar probably in a month. They still have shard chains and runtime environment to go, that’s where the hard part lies. Therefore, I think we won’t see ETH 2.0 in a year unless the teams become stronger or something changes drastically.

I think they will launch Beacon Chain without shard chains to test staking.

FL: You said that the industry has enough room for several PoS protocols. What if you are mistaken?

Alexander: I think it is advantageous to solve emerging problems together and share expertise. If it turns out that there’s not enough space, we will fight and may the strongest win.

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