StarZero All shows Try the podcast clipper →

Oct 23, 2017 · 17m · top-founders

821: Crypto: $17m Raised to Speed Up Mining Blocks Using New "Validators"

Jay Kwon · 8m spoken Nathan Latka · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview, Tendermint and Cosmos creator Jay Kwon explains how proof-of-stake validators solve Bitcoin's proof-of-work energy inefficiencies to power the 'internet of blockchains.' He also discusses raising $17 million in 29 minutes while maintaining a lean 19-person team and spending under $3 million.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 47.4% of the talking time here. How this is scored →

Nathan as informed peer 2.4 Guest teaching 4.4 Guest disagreement 1.6 Nathan pushing back 2.6
05100:0010:001:36–3:36 · Nathan as informed peer 1/10 Jay Kwon's Background and Explaining Tendermint Nathan begins by humorously conceding he needs Tendermint explained as if he were a toddler. Jay obliges using the analogy of a Nokia phone/small computer state machine engine.3:36–5:47 · Nathan as informed peer 2/10 Early Origins, Open Source Roots, and Real-World Applications Nathan asks for real-world enterprise examples and clarifies terms like Bitcoin Core. Jay explains the open source roots of altcoins and his motivation to eliminate proof of work.5:47–8:52 · Nathan as informed peer 3/10 Proof of Work Limitations and Transition to Proof of Stake Validators Nathan admits he does not understand proof of work or how Tendermint fits into mining. Jay educates him on lottery-style block rewards versus proof-of-stake validators using two-phase commit consensus.8:52–14:34 · Nathan as informed peer 5/10 Introducing Cosmos: The Internet of Blockchains Nathan pushes hard on financial details, questioning whether 'fundraiser' is merely a PR term for an ICO and referencing Civic's liquidation strategies to press Jay on exact cash numbers.14:34–17:15 · Nathan as informed peer 1/10 Mid-Interview Sponsor Break: Acuity Scheduling The episode wraps with an Acuity Scheduling ad read followed by the standard Famous Five rapid-fire questions in a friendly, conversational manner.1:36–3:36 · Guest teaching 4/10 Jay Kwon's Background and Explaining Tendermint Nathan begins by humorously conceding he needs Tendermint explained as if he were a toddler. Jay obliges using the analogy of a Nokia phone/small computer state machine engine.3:36–5:47 · Guest teaching 5/10 Early Origins, Open Source Roots, and Real-World Applications Nathan asks for real-world enterprise examples and clarifies terms like Bitcoin Core. Jay explains the open source roots of altcoins and his motivation to eliminate proof of work.5:47–8:52 · Guest teaching 7/10 Proof of Work Limitations and Transition to Proof of Stake Validators Nathan admits he does not understand proof of work or how Tendermint fits into mining. Jay educates him on lottery-style block rewards versus proof-of-stake validators using two-phase commit consensus.8:52–14:34 · Guest teaching 5/10 Introducing Cosmos: The Internet of Blockchains Nathan pushes hard on financial details, questioning whether 'fundraiser' is merely a PR term for an ICO and referencing Civic's liquidation strategies to press Jay on exact cash numbers.14:34–17:15 · Guest teaching 1/10 Mid-Interview Sponsor Break: Acuity Scheduling The episode wraps with an Acuity Scheduling ad read followed by the standard Famous Five rapid-fire questions in a friendly, conversational manner.1:36–3:36 · Guest disagreement 1/10 Jay Kwon's Background and Explaining Tendermint Nathan begins by humorously conceding he needs Tendermint explained as if he were a toddler. Jay obliges using the analogy of a Nokia phone/small computer state machine engine.3:36–5:47 · Guest disagreement 2/10 Early Origins, Open Source Roots, and Real-World Applications Nathan asks for real-world enterprise examples and clarifies terms like Bitcoin Core. Jay explains the open source roots of altcoins and his motivation to eliminate proof of work.5:47–8:52 · Guest disagreement 2/10 Proof of Work Limitations and Transition to Proof of Stake Validators Nathan admits he does not understand proof of work or how Tendermint fits into mining. Jay educates him on lottery-style block rewards versus proof-of-stake validators using two-phase commit consensus.8:52–14:34 · Guest disagreement 3/10 Introducing Cosmos: The Internet of Blockchains Nathan pushes hard on financial details, questioning whether 'fundraiser' is merely a PR term for an ICO and referencing Civic's liquidation strategies to press Jay on exact cash numbers.14:34–17:15 · Guest disagreement 0/10 Mid-Interview Sponsor Break: Acuity Scheduling The episode wraps with an Acuity Scheduling ad read followed by the standard Famous Five rapid-fire questions in a friendly, conversational manner.1:36–3:36 · Nathan pushing back 1/10 Jay Kwon's Background and Explaining Tendermint Nathan begins by humorously conceding he needs Tendermint explained as if he were a toddler. Jay obliges using the analogy of a Nokia phone/small computer state machine engine.3:36–5:47 · Nathan pushing back 2/10 Early Origins, Open Source Roots, and Real-World Applications Nathan asks for real-world enterprise examples and clarifies terms like Bitcoin Core. Jay explains the open source roots of altcoins and his motivation to eliminate proof of work.5:47–8:52 · Nathan pushing back 3/10 Proof of Work Limitations and Transition to Proof of Stake Validators Nathan admits he does not understand proof of work or how Tendermint fits into mining. Jay educates him on lottery-style block rewards versus proof-of-stake validators using two-phase commit consensus.8:52–14:34 · Nathan pushing back 6/10 Introducing Cosmos: The Internet of Blockchains Nathan pushes hard on financial details, questioning whether 'fundraiser' is merely a PR term for an ICO and referencing Civic's liquidation strategies to press Jay on exact cash numbers.14:34–17:15 · Nathan pushing back 1/10 Mid-Interview Sponsor Break: Acuity Scheduling The episode wraps with an Acuity Scheduling ad read followed by the standard Famous Five rapid-fire questions in a friendly, conversational manner.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 83.6% · guest 16.4%0:00 · Nathan 83.6% · guest 16.4%3:00 · Nathan 23% · guest 77%3:00 · Nathan 23% · guest 77%6:00 · Nathan 24.9% · guest 75.1%6:00 · Nathan 24.9% · guest 75.1%9:00 · Nathan 28.8% · guest 71.2%9:00 · Nathan 28.8% · guest 71.2%12:00 · Nathan 53.4% · guest 46.6%12:00 · Nathan 53.4% · guest 46.6%15:00 · Nathan 71.4% · guest 28.6%15:00 · Nathan 71.4% · guest 28.6%
Sharpest disagreement ▶ 12:25 Jay rejects the framing of selling tokens

Jay firmly reframes Nathan's question about selling tokens by correcting that they were not selling anything, but accepting donations in exchange for atoms.

 Hardest push from Nathan ▶ 10:48 Nathan presses on the ICO euphemism

Nathan refuses Jay's terminology, directly confronting him on whether 'fundraiser' is merely a politically correct euphemism for an ICO.

 Biggest teaching moment ▶ 5:50 Jay breaks down proof of work economics

When Nathan admits he is lost, Jay explains the proof of work mechanism as an automated lottery ticket system with self-adjusting difficulty.

 Nathan holds their own ▶ 13:33 Nathan leverages industry case study to demand numbers

Nathan cites the Civic token sale benchmark and liquidation rates to press Jay on exactly how much raised cryptocurrency was converted into fiat.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Jay Kwon's Background and Explaining Tendermint 1411 Nathan begins by humorously conceding he needs Tendermint explained as if he were a toddler. Jay obliges using the analogy of a Nokia phone/small computer state machine engine.
Early Origins, Open Source Roots, and Real-World Applications 2522 Nathan asks for real-world enterprise examples and clarifies terms like Bitcoin Core. Jay explains the open source roots of altcoins and his motivation to eliminate proof of work.
Proof of Work Limitations and Transition to Proof of Stake Validators 3723 Nathan admits he does not understand proof of work or how Tendermint fits into mining. Jay educates him on lottery-style block rewards versus proof-of-stake validators using two-phase commit consensus.
Introducing Cosmos: The Internet of Blockchains 5536 Nathan pushes hard on financial details, questioning whether 'fundraiser' is merely a PR term for an ICO and referencing Civic's liquidation strategies to press Jay on exact cash numbers.
Mid-Interview Sponsor Break: Acuity Scheduling 1101 The episode wraps with an Acuity Scheduling ad read followed by the standard Famous Five rapid-fire questions in a friendly, conversational manner.

Statements from this episode (8)

Insight
Kwon: Blockchains derive security from being lightweight enough for users to audit locally
“Everyone gets security from the fact that they know that they can download the blockchain around themselves. They can audit it themselves. It's accessible. So, it's good that a blockchain is a small machine, but replicated all around the world so that it's not…”
Jay Kwon Oct 23, 2017 ▶ 2:49
Assertion Supported
Kwon: Tendermint functions as an engine for secure state machine replication
“Tendermint is the engine Or it is one of the many engines that enable the creation of blockchains which is synonymous to replicating state machines in a secure way.”
Jay Kwon Oct 23, 2017 ▶ 3:22
Assertion Supported
Kwon: Bitcoin Miners Burn Energy Because Block Rewards Dwarf Transaction Fees
“You see that the block reward is a hefty, like, hundreds of millions of dollars a year, if not a billion at this point, of rewards. And the transaction fees, In comparison, are much smaller. That's why Bitcoin miners don't care about the transaction fee right …”
Jay Kwon Oct 23, 2017 ▶ 6:35
Assertion Supported
Kwon: Tendermint Secures Distributed Ledgers Without Energy-Intensive Mining
“Tendermint, Tendermint is a replacement. It's an alternative to proof of work. It's a way to have a secure distributed ledger without having to Burn energy to try to win a lottery ticket.”
Jay Kwon Oct 23, 2017 ▶ 8:05
Disclosure
Kwon: Cosmos is building an interoperable network of blockchains
“We use this to create a network of blockchains that can talk to each other and interoperate, and that's called Cosmos. That's the project we're building.”
Jay Kwon Oct 23, 2017 ▶ 9:40
Disclosure
Kwon: Cosmos avoids the term 'ICO' to sidestep securities classification
“You know, we avoid the term ICO precisely because we don't want to associate it with a security offering.”
Jay Kwon Oct 23, 2017 ▶ 10:57
Disclosure
Kwon: Cosmos contributors will receive Atom staking and governance tokens at Genesis
“And on Genesis Day, all the contributors are going to get, on that Genesis block Atom tokens. They are staking tokens. They're tokens that allow you to vote on the blockchain, participate in consensus, you know, make governance governance decisions about where…”
Jay Kwon Oct 23, 2017 ▶ 11:21
Assertion Supported
Kwon: Cosmos reached its $17 million fundraising cap in 29 minutes
“We raised we had a cap of seventeen million. At USD? USD. So we filled that cap in 29 minutes, so we had to stop accepting funds.”
Jay Kwon Oct 23, 2017 ▶ 12:08
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more