The Pomp Podcast - #253: Julie Maupin & David Sønstebø on Enabling the true Internet-of-Things through the Machine Economy

Episode Date: March 27, 2020

This is episode #7 in the Automation Series. You can learn more about the Automation Series here. You can learn more about IOTA on their website. David Sønstebø and Julie Maupin of the IOTA Foundation join Anthony Pompliano for this special episode of the Automation Series. David, the Co-Founder and Julie, the Director of Social Impact and Regulatory Affairs dive into the intersection of distributed ledger technology. In this conversation, Julie, David, and Anthony discuss the philanthropic mission of the IOTA Foundation, the challenges and benefits of running a non-profit, IOTA Tangle, and how distributed ledger technology will empower the full potential of automation.  =============================== ~If you enjoyed this episode and want to stay updated on everything Bitcoin, tech, and finance. Check out my newsletter by visiting pomp.substack.com and join 35,000+ other investors currently subscribed to my daily investor letter.

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. The following episode is part of the Off The Chain automation series sponsored by IOTA. The goal of this special series is to explore the intersection of distributed ledger technology and automation, specifically around digital currencies, digital wallets, and machine-to-machine transactions. My core belief is that every stock, bond, currency, and commodity will eventually be digitized and distributed ledger technology will empower the full potential of automation to be realized. IOTA is the sponsor of the automation series. Their mission is to support the research

and development of new distributed ledger technologies, including IOTA Tangle. The IOTA Foundation encourages the education and adoption of distributed ledger technologies through the creation of ecosystems and the standardization of these new protocols. You can find out more about the automation series and IOTA in the show notes. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression

of his opinion. This podcast is for informational purposes only. All right, guys, bang, bang. I've got both David and Julie here. I'm super excited to have them to close out the automation series. And I thought that this would be a really interesting conversation where we could talk through a whole bunch of things around the balance between kind of regulated nonprofit entities and then the centralization versus decentralization argument and how that plays out in real world applications and situations. So thank you so much to both of you for joining. Yeah, thanks for having us. Thanks. Good to be here.

Absolutely. Let's just go real quick, David. Maybe you start with you, two minutes on your background and kind of your role at IOTA. And then Julie, same for you. Sure. So yeah, I'm David. I'm located in Norway. I'm one of the original founders of the IOTA project and I've been in the blockchain space since early 2012. So I've kind of been through all the craziness. I'm currently co-chair of the IOTA Foundation. And yeah, this has been my life for the past six years, full time. Yeah, and I'm Julie Maupin. And I am working at IOTA as the Director of Social Impact and Regulatory Affairs. I've also been in the blockchain space since 2012, albeit at the time I was an academic teaching international law in the US and I'm now based

in Berlin where the IOTA Foundation is headquartered. Yeah, and my background is in both economics and law and I came to the crypto space early in its life cycle, but later in my career after having been through the dot-com boom and bust and worked in non-profits and worked in government and worked in the private sector. So this has been a great way for me to bring all of my different hats together and use them all together. And I also serve as the chair of the board of directors for INATBA, the International Association for Trusted Blockchain Applications, which IOTA helped to co-found last year together with the European Commission. Awesome. So Julie, maybe we could start with you and just help us understand the structure of IOTA

and kind of the idea behind this regulated nonprofit entity. And then we'll get into David maybe talking about some real-world applications and how that's played out. Sure, happy to do that. So, you know, one of the things that makes IOTA unique and unusual is that from the beginning, the co-founders had the idea, hey, you know, this is very much a community-driven, bottom-up grassroots project,

but we'd also really like to make sure that it's developed in a way that really serves society. And, um, it's difficult to know how to do, how to go about that. If you're just sort of hanging out with people in internet chat rooms, building something together, um, because you need to make sure that the things that you're doing, um, that they, that they actually are within the realm of what's legal, um, then what's, you know, not going to be regulated out of existence. And so the idea that they had was, hey, let's set up a nonprofit foundation to kind of be the voice of the community towards governments and governing bodies around the world, as well as, you know, serve as an interface point for institutions and corporates and everybody else. um and so we embarked on that um i got to know david and dominic in early 2017 and when they were in the process of trying to get the foundation set up and and got involved in that process you know thanks to my legal background um here in germany and it took a while to get that through because of you know when you have a bunch of donations that have been made by anonymous people

online to set up a nonprofit foundation, that's not the most traditional model of starting up a foundation. And we had to do a lot of explaining to the foundation supervisory authority here in Germany, as well as the financial supervisory authorities as to how that all worked and why we would still be able to be regulated by them, how we could nevertheless submit financial reports that they could audit and all that good stuff. So it was an adventure, wasn't it, David? Oh, yeah. And definitely the banks as well. The banks were very eager to help support. Yeah, that's a little bit of dark humor there, which David is famous for, of course. But yeah, I mean, even after we did manage to get the foundation set up, which took about a year and a half altogether from start to finish.

so it wasn't easy and it ended up being the first non-profit foundation anywhere in an EU state to be financed by a cryptocurrency but even after we managed to get the go-ahead from the authorities it took another I think two and a half months is that right David to get a bank account yeah yeah it took quite a while and a lot of effort and we were very proud that we were able to do it in that time because of course the blockchain space or the crypto space has evolved immensely since then. But we were definitely pioneers. That's never easy. Yeah. So we were really grateful that Deutsche Bank went out on a limb, which is a big name. And obviously, we didn't expect them to be the ones that would come through,

as opposed to some of the Swiss or Luxembourg banks that were starting to bank crypto clients. But they did. They threw their hat in the ring and said, yeah, we think this is the future, this technology and we'd like to be part of it. So from that point, we were off and running and could officially start hiring people and focusing on really building this as a community project. That's awesome. And David, maybe talk a little bit about kind of some of the recent events that have happened and how the idea of this regulated nonprofit entity, you know, kind of on the scale of centralization and decentralization has actually played out both in positive ways and negative ways for IOTA.

Yeah, for sure. So if we go back to some of the points that Julie mentioned, the reason we went this kind of hard way instead of the easy way was that we really knew that if a project is going to succeed on a global scale, if we're really going to develop a new protocol that will be kind of a foundational backbone of this autonomous era,

We really need to just head or go head on with the real problems, which will be regulatory, explaining the technology. You need to have the gravitas behind you to actually sell this into the governing environment as well as the corporate environment. So ever since the beginning, we chose to do things very differently than most projects. And the motivation for that was the fact that all of us had been in the early, early days of crypto where everything was just wild, wild west and scams left and right. And it was just crazy. And we wanted to get away from all of that and really get into a much more professional and sane environment, so to speak. and as a consequence we also chose an orthodox way of securing the network in its early days and this is now known as the infamous coordinator node in the iota network

this node is a special node that issues milestones which kind of gives the the transactions something to follow in this directed i cyclic acyclic graph that the tangle is we cannot like this coordinator node cannot change balances or do any kind of uh it doesn't really have that much power it's just there to keep the network going and of course in crypto especially back in the early days that was sacrilege it's like hey you guys are not 100 000 percent decentralized so certainly there has to be like this has to just be denounced completely so we faced a lot of resistance early on because of the coordinator. However, if you look at Bitcoin and Ethereum, they had checkpoints, which was centralized just to get network off and running. You need something,

and we chose the coordinator for two reasons. One was that it's the most efficient way in our particular architecture. And secondly, it was a safety mechanism. If something should go wrong as we're in this exploratory journey and this very alpha beta stage then we can actually shut down the coordinator which subsequently kind of freezes the network's value transfers and we just had a unfortunate incident back in February where a hacker got into Moonpay which is which is a company providing a service where you can buy crypto, which we had integrated into our Trinity wallet. Unfortunately, since their infrastructure got compromised,

there was a loophole or a vulnerability in the Trinity wallet where the hacker was able to get access to seeds, i.e. private keys. and as soon as we noticed this we immediately shut down the coordinator and we were able to prevent a lot of damage from the hacker and of course again this is a controversial topic in this space because it's kind of this holy thing to claim to be central decentralized completely i would of course contest that argument because i genuinely believe that the mining pools and staking pools is an oligopoly. So it's far from decentralized. But anyhow, that's the benefit of having this centralized milestone issuing node. And this goes back to the philosophy that we have.

We accept the fact that crypto won't take over the world overnight. This is not something that just happens. So just as we chose to set up the IOTA Foundation in Germany, which was a very arduous and long process. We also chose to accept the fact that the technology itself will not be mature enough within the first years. So there is no reason to risk the entire project by insisting on this stupid maximalist decentralized attitude before the network is even adopted or finalized. So these two things go hand in hand, and that is one of the things that really set IOTA apart. And based on the feedback that we have got from pretty much all of our partners and other collaborators, they agree with this approach because it's a safe approach and we have been able to prove the benefits of that approach. Of course, we are getting rid of the coordinator in the future, in the quite near future at this point.

But at the same time, it's just a very good incident to showcase why it's good to have some checks and balances in place, some breaking mechanism before the network is completely released. And as you know, you've been in this space for a long time. You remember the parity hack. You remember the DAO. You remember all of these big events that happened. And in those networks that proclaim to be completely decentralized, then you have to convince all the miners that, hey, we need to do a rollback or we need to do a fork, blah, blah, blah, blah, blah.

And because IOTA has this coordinator and everyone in the community and our partners and ecosystem is happy about it, we don't have to go through that political process. And instead, we have the ability to take the time to create a truly decentralized network through our research and development efforts that has been going on now for four years, nonstop. If I can just jump in there to piggyback on this, because I think, David, some of the points that you raised are really interesting, especially as we think about moving forward. because, you know, one of the things that the Trinity hack showed as the Dow hack and the parody bug and all of this that you mentioned, many others, is that, you know, a lot of everybody likes the idea of decentralization because it's more secure. And, you know, we sort of like the

theory of decentralization. On the other hand, when something bad happens, we want to have a way of coming together in collective action to do something about it. And of course, the difficult thing is to determine what does bad mean? I mean, I remember watching the Dow hack where you had somebody who was claiming to be the hacker posting in various chat forums. Oh, well, you said the Dow is law and the code is law and I found a bug in the code. So thank you everyone for the $50 million donation. So the idea of decentralization is great until something just doesn't work. And then people need someone to look to, to be able to figure out how do we get out of this mess. And that is really the quintessential dilemma of governance in all of these projects. IOTA

hasn't had to face it in such a severe way in the past because we've had this coordinator in place. But it's definitely something that we have to plan for for the future because it's to be expected, of course, that at some point on a fully decentralized version of IOTA, something unexpected will happen and we'll need a way to respond. So, you know, the good thing about experiences like this is that it forces people to kind of come together and say, okay, well, given that bugs happen, unexpected situations arise, et cetera, what kind of processes are we going to put in place to allow the users of the system to be empowered to react in a joint way in future? And that's something that the IOTA Foundation, together with the community, intends to put a lot more thought into between now and the stop point of the removal of the coordinator, because we definitely need to have procedures in place for community members to be able to come together and say, hey, let's do this in this situation. Got it. And so I think one of the things that, you know, is obviously a hotly debated topic throughout crypto, but also other decentralized type business models, et cetera, open source software and all kinds of things is this idea of do you start on day one fully decentralized or do you start out centralized or semi centralized and then kind of decentralized over time? Right. And you see this with plenty of companies. Right. So not the nonprofits or kind of protocols, but actually companies in crypto that talk about this. You see this in other applications as well. My understanding, and correct me if I'm wrong, is you guys are in kind of the latter camp of you start out semi centralized and then become decentralized over time. You know, one, is that accurate? And then two, you know, including all the recent events, etc. Like, what does that timeline look like? And has that changed at all, given those events? I think one thing, I'll hand over the timeline and everything to David, but I think one thing that's an important clarification, when you look at the various types of players in the space is that most of the actors that have started out centralized and said, we're going to decentralize over time, have done it with a for profit motive. And that makes it actually much more complicated to decentralize because often the profit model is tied to the centralization.

And, you know, that's something that's unique about us because that's not the case for IOTA. It's a nonprofit foundation. Everything is done sort of for public benefit, open source, and we don't make a profit on the use of our network, mining of our network or whatever. So that sets up a different set of motives in the beginning. And it allows us to have different decision making processes to move toward true decentralization because we're not bound by a revenue model that only works in a centralized setup. Exactly. And just to elucidate a little bit more on that, if you look at these projects that proclaim to be completely decentralized from Go, that's not really the case. I mean, with Bitcoin, with Ethereum, you have checkpointing. But beyond that, you also immediately have miners. And in the very early beginning, when every person with the laptop can fire up a node and be a miner, that is fine. Then you can call it decentralized. But then eventually as the hash rate, this race goes on, you end up with these mining pools and it just automatically centralizes. So then you are suddenly stuck in an even worse place because, first of all, you no longer have this utopian decentralization. but furthermore you have two different camps in your own network you have the users and then you

have the miners slash stakers which are essentially their their incentives are diametrically opposed because as a user you just want your transaction to go through with the lowest fee possible but of course as a miner you want the fees to be as high as possible so again this is something you bypass with the strategy that we chose. So we're definitely in the latter camp, as you alluded to. And in terms of our roadmap and timeline, we already have a testnet right now with Cordiside. We are introducing all of the different modules of Cordiside over time, testing them out, letting the community test it and vet it. And we have a lot of academics that are involved in this process, of course. So I would say that we are probably looking at Q1 2021, where we really

genuinely believe and hope. Of course, deadlines are always scary in software development, especially in DLT. But we truly believe right now at the stage we're in that by Q1 2021, one, IOTA will have gotten rid of the coordinator. And that will also mean that not only is IOTA decentralized as these other projects proclaim to be, it will be much more decentralized because we don't have the miners, we don't have the stakers, every single participant is equal in network. So that will be true decentralization. And from an ideological point of view, if you're a very strong proponent of decentralization, I don't think it's a hard ask to wait a few years to get everything right and then have it semi-decentralized in that interim period when the reward is complete decentralization.

And just one final point on that. I would say that all projects in the crypto space is still in the beta phase. So I just don't understand the insistence on launching with complete decentralization at all. It's just crazy for me. Yeah. And I guess part of decentralization, one of the things that I talk about all the time is if you have, quote unquote, decentralization, but you don't have the time to allow network effects to take place, it's much harder to start out decentralized just because you've got to kind of build that network effect. And what I mean by that is like, take a Bitcoin, for example, if Bitcoin launched today, when everyone was paying attention to a space, I actually think it would be very, very hard to launch as quote unquote, decentralized, right? Because you would just have so much attention on it. Some people, you know, trying to do nefarious things, etc. Part of the beauty of something like that starting, you know, 11 years ago, is that no one was really paying attention, right? And it had time for, you know, three, four or five years before it really started to get attention. I think your point is if you want the security, if you want the stability, if you want certain aspects of something that people can kind of gain trust, whether it's a company, it's a protocol, it's one of these regulated nonprofits, the idea now when everyone's paying attention is starting out centralized and then trying to decentralize over time. And we even see things like Twitter saying, hey, they may start trying to do this at the protocol level, et cetera, I think is becoming a fairly well-accepted kind of approach to building a decentralized network, even though I agree with you that there's a lot of people who may not agree with it or think that it kind of goes against certain ethos, et cetera.

Exactly. I think you hit the nail right on the head there, because at the end of the day, what are we trying to do here in DLT or crypto like what what's the end goal it's of course to build this and get the protocol adopted worldwide otherwise the impact is just theoretical it's not practical it's not realized in the real world and then the question becomes should we do it in accordance with best software practices should we do it and have patience or should we just rush it like in my personal opinion no paradigm shift ever happens overnight you just have to be patient you have to work at it you have to do the right thing and in my opinion the right thing is to

start out of course you have to have like a component of decentralization because otherwise you're just asking people to trust you like your theory should definitely be able to be tested right away but it shouldn't be this this holy grail that decentralization has to be there in the beginning otherwise the project can be just ignored or denounced because that's that's just ludicrous it's religious in my opinion it doesn't have any basis in reason it doesn't have any basis in best practices of development it's just it's it's just a random stance people take so yeah if we are serious about bringing this to the real world, let's take our time. Let's do it according to the best practices. Got it. That makes sense. Julie, maybe talk to us a little bit

in the kind of regulated world, especially in the regulated nonprofit entity side. How do you see this kind of unfolding as more and more companies or protocols and entities go into what I'll just called the crypto world. And really what I mean there is kind of a digital global decentralized world. Do we have to change rules and regulations? Can we use the ones that currently exist and just operate within them? How do you see that playing out? Yeah. I mean, I think it's some of both for sure. And we've already seen that in the developments that we've seen so far in how policymakers and regulators have adjusted to new technologies being built in the crypto and DLT space. It's a bit of a, you can't have one strategy or the other either. I mean, you have

to have both. In some instances, existing rules can just be applied and extended to the new developments that are happening in the blockchain space. In other cases, you really do have to change the rules and or think of different or more creative ways to apply them. So, you know, to give an example from the recent hack that we experienced of the Trinity wallet, you know, via this MoonPay integration, you know, one of the things that happened was we had to figure out what are our GDPR reporting obligations here. So, you know, we've figured out within a certain number of, I can't remember exactly what the timeline was, but within a day or two, we figured out what the problem was, how the hacker had gained access, etc. We had a fairly good understanding

of what data the hacker had been able to access. But, you know, we have this wallet that people sign up to use without providing any personal information at all to the IOTA Foundation. We designed it that way by choice, right? We didn't want to be custodians of people's personal data. Um, and, and then the question is, well, how do we inform them under our GDPR obligations that, that their passwords, their seeds, uh, may have been hacked? Um, you know, because we actually don't, didn't even know who all the affected wallet users were. We knew that it was limited to people who had opened the Trinity wallet between two

certain dates when, from when the bug was introduced to when it was fixed, um, and had use the version that had this integration with MoonPay in it. But we didn't know who those people were. And we can't send them an email, we don't have their emails. So how are we supposed to satisfy our obligation to inform people, you know, under GDPR, that their data may have been may have been compromised. And the data wasn't really personal data anyway, because we didn't have their names, we didn't have their email addresses, we didn't have any identifying information about them um so you know the best that you can do is to sort of second best approximate it by making lots of public announcements and posting stuff on twitter

and writing posts on this and blog putting posts on discord for our community and writing blog posts um going on podcasts and doing articles for crypto news outlets and mainstream news outlets etc to kind of try and get the word out um hey there was this incident this hacking incident and you need to migrate your wallet if you happen to use this version of Trinity between this and this date. So, you know, that's an example of a regulation that is written for the world as it used to be, where there was always a centralized data processor, controller, etc. And in this case, data was being processed, but it wasn't being processed by us. So we'd actually don't have a way to inform the users. And we need to figure out new ways to adapt those very good

policies that are behind GDPR, letting people know when they've been compromised. All of us want to be informed if something that matters to us has been compromised. And surely something that has financial value, like a crypto token, is something that we would like to know about if we've been compromised there, even if we haven't provided our personal name and email address and and our registered address and date of birth and all of this stuff. So we need to figure out how that can be done. And, you know, governments and data protection authorities and all of these entities are just at the beginning

of trying to wrap their minds around that. And we're trying to work with them to explain what's possible via the technology and what we need to find workarounds for. Got it. That makes a lot of sense. David, anything to add on that? Yeah, so no, I think Julie explained it perfectly. Like we are in the middle of this paradigm shift and it won't happen overnight. And so we really need to speak directly with the authorities. We need to speak with the regulators and we need to find common ground. And that is the whole philosophy behind how we set up the IOTA project from day one and the IOTA Foundation from day one. And we are very proud of that because at the end of the day, if you're really going to make changes in this world with new technology, you can't just impose it on people. You have to really tackle the real challenges and do it in iterations.

And that's what we are doing. That's why we also, as Julie mentioned, co-founded Inatpa, because we really need these entities on board. They need to be up to date. These regulations cannot be written by people that have never touched a smartphone. And so where do you guys go from here? As you look out for IOTA and this whole idea of providing digital assets and connectivity for machine-to-machine transactions and automation, etc., where do you guys go from here? Yeah. So IOTA is a very thriving community and project.

We have a lot of partners in the corporate realm, a lot of partners in the academic realm, etc., etc. And right now, we are working on a project called Chrysalis, which is kind of IOTA 1.5, which is this step towards Cordicide before Cordicide, which will already improve the transaction output and improve the user experience a lot. That's the next big software update we are currently developing and deploying soon. And of course, after that comes cordicide. And after that comes sharding and slicing, which is this much higher level, or I shouldn't say higher level, I should say, more theoretical approaches of reaching hundreds and millions of transactions per second. all of this is of course going to take time and we have a lot of academics working on this right now in terms of the project overall we continue to do real projects like for instance we just did a project with trademark east africa in the supply chain because of course the supply chain sector is very old school very much paper-based and the distributed letters can play a significant

enrolled there we continue to work with oems in the automobile sector for payments for data assurance when it comes to over the air updates etc so yeah there's a lot of things going on in iota right now and we are very at least personally as as someone who's been in this project since day one i've never been more excited about the project than right now because for the first time, and I mean this very genuinely, for the first time, I start to see the finish line, not the whole finish line, like 30 years down the road when the entire world is completely autonomous, but in terms of delivering the protocol and having a clear path towards standardization and already a lot of companies and projects lined up that is very much eager to

adopt it, that is right around the corner. And that is extremely exciting for everyone that has been part of the IOTA project or is interested in DLT in general, in my opinion, at least. I think that right alongside with all of those developments, one of the key things that we're focusing on right now and will continue to focus on is figuring out how to get the governance of the code right. Because there's so many projects in this space that have lots of different approaches to how they do updates to their code, who manages it, who can do GitHub pull requests, and who approves them. And the Ethereum community has these big developer calls where people can propose stuff and discuss it, and then it can get sort of through a winnowing

process. Different projects have different ways of going about code governance. And this is really important because when you're talking about developing a base level protocol that's meant to serve as sort of the backbone of the internet of things, on top of which many other things can be built by companies, by governments, by nonprofit organizations, et cetera, all of them need to be able to reliably depend upon the maintenance of the base code in a sound and best practices way. And it's not like there aren't models out there for it, where there are lots of open source software examples that are some better and some less well governed. But in the crypto space, it's really been all over the map. and the pace of innovation and the development of the code in our space

is so fast that it's been really very much the exception and not the rule to adhere to industry best practices in terms of open source software development and we're trying to figure out how to make the transition to really get there fully so that those who are building on IOTA and wanting to do things with it can rely on it and can use it without fearing

that there's going to be some breaking change tomorrow after they build their new application on top of IOTA that makes the work that they've just put in completely useless or that sets them back for a couple of weeks or months or whatever. So those kinds of things are things that we're working together with our partners at the Eclipse Foundation and OMG and having dialogues with other foundations as well in the open source software management space

to really wrap our minds around how to do this well. What do you think is the biggest obstacle kind of as we move towards that world for you guys? So actually, it's very hard to identify one singular obstacle for me, at least from my perspective. It's really all about just proving what you're building, prove that it actually works, prove that you're solving a problem,

not that you're building a solution and looking for a problem and that's what we are constantly evaluating as we are partnering up with companies etc we want to develop solutions like that's what all good software should be about and as julie just mentioned especially in open source software of course there's a lot of interesting exploration and experiments and things that are created just for fun but we are very focused on developing things that serve a purpose improves something like if if you could have just used an sql database then we we are not going to go for that uh market at all so for us it's it's more about having this constant dialogue with the different industry verticals and seeing where are

the problems what could be solved by just modernizing it and getting more digital and what requires the DLT. And that is something that is, it's a matter of education, but it's also a matter of exploring together. Because if we are doing a project with someone, and we realize that just a regular database infrastructure would give them the improvements they're looking for, then there's no reason for us to be involved beyond just maybe securing the data via the tangle, which would be a very small feat. So it's really about pinpointing where are the big problems right now, where are the bottlenecks that DLT can truly solve. And that's what we are focusing on. And just as an example, with smart contracts, for instance, of course,

in 2015, 16, 17, smart contracts and colored coins were all the hype. It was like, oh yeah, this is going to solve the world and everything will be automated from now on. And the code, this law etc but then you suddenly realize that no that's not actually how it works and of course julie can speak to this better than me because she's an actual lawyer but even if you write the code even if you write a smart contract which compiles and it executes as it's intended that doesn't mean that it's an actual legally enforceable contract and that's that's exactly where we go back into having to have dialogue with the right people to figure out what is it that the software actually needs to solve and how do we accommodate it in the real world so when we

are developing iota smart contracts right now we are using web assembly or web assembly will become kind of the framework around future iota smart contracts and colored coins and that's because that's what the industry is is going towards is kind of consolidating around web assembly as the future so okay let's do that but then the big questions become what does it really enable like from a from a if you're a company if you're a whatever what does it really enable and i will let julie if if she has some thoughts on this in terms of like smart contracting software versus how it's actually working in the real world that that is what we really need to continue to explore together with the actual like legislation bodies yeah that's a good point and you know i

would say not just the the legislators uh and regulars but but also just at the end of the day the users because you know having web assembly put together some code is all well and good but at the end of the day, it has to mean something in the human world for those who are subject to this set of instructions that's being carried out. And, you know, even in fully analog, regular old boring paper contracts, there are all kinds of problems that arise all the time with execution of contracts, because lots of unexpected things happen, or people are unclear about what they agreed on or whatever. And you're often having to find solutions in law to roll certain things back or to plug in, fill holes that were left or gaps in the contract or correct misinterpretations or

misunderstandings, or what do you do when the fulfillment of the contract becomes impossible for some reason? You know, all these kinds of things. Those questions are not going to go away. they have to be somehow digitally accommodated. And there will always have to be a give and take between the digital version and the fallback legal version of a contract. But, you know, when you ask the question about what do you see as the biggest challenge, I think this example of smart contracts is a good segue into what came to mind for me, which really is very much user experience. The user experience is still not great in our space. And IOTA has made great strides in the last couple of years in terms of cleaning up its libraries and bringing out much

more user-friendly software development kits for the devs, consolidating where you can find tools and documentation about iota etc and then of course bringing and bringing out the trinity wallet which is much more user-friendly um and intuitive than anything that ever came before it um but but yeah you know when you want people to start using the protocol and building stuff on top of it and creating things whether it's smart contracts or colored coins or simple you know atomic atomic transactions you know energy for tokens um you know in some of the smart charging use cases and things like that, it needs to be seamless. And it needs to be seamless in the way that the internet is to people who know nothing about how it works. And we're really far from

that overall in the space. And an iota as well is something that we're putting a lot of effort and emphasis on. But I think really working together with partners, both public and private sector to help everyone understand that this requires developing with the users and just iterate, iterate, iterate, iterate, see what real people do with it when you put it into their hands and then adjust on the basis of that. Because, you know, sometimes we see stuff come out of the community of users where we're like, wow, that's really cool. We never thought of that. We wouldn't have built that ourselves. That's the beauty of a distributed permissionless innovation ecosystem. But other times, you know, you see users do things where you just think, you just shake your head and you think, what?

I mean, why in the world would you do that? That's the dumbest thing I've ever heard of. And, you know, they lose tokens as a result of it or, you know, something bad happens to them because they use the technology in a way that we never would have anticipated. So I think that, you know, really the usability and user testing is a big challenge in my view. I remember in, I think it was late 2013, Timothy Swanson, he was interviewing everyone in the blockchain space. And I think he wrote one of the first books on blockchain, which was published, I think, early 2014. And he asked me the same question. And that was exactly my answer that if my grandmother can't use it, then it won't become some global phenomenon. It has to reach

that level that you just mentioned it has to be seamless it should be completely something you just use without even knowing any intricate details about DLT at all that's that's when we've reached actual adoption yeah it it's super interesting too how I think you guys think through this mentally before I let you guys go though one last question for you what else are you guys excited um kind of in the uh crypto blockchain space uh outside of iota moving forward are the other things that you guys are watching where you say hey look this is pretty cool we're keeping an eye on it yeah so at least in in the theoretical realm verifiable uh delay functions are very interesting as an option to proof of work or proof of stake this is something we are researching

very intensively in uh cordicide so that's just from a theoretical point of view and from my perspective when it comes to uh the broader more high level uh perspective i would say that the feedback that we have and we've spoken with literally hundreds and hundreds of companies a lot of governments a lot of uh yeah different uh impactful entities is the fact that this technology and the decentralization is actually very much in demand i won't mention names but i will just say that some of the biggest permission uh ledgers in the space or people that have collaborated with some of the biggest uh permissioned ledgers in this space have actually come to us and said yeah it was a nice experiment but we don't want to commit to anything that isn't

a truly open permissionless decentralized ledger and that is something that truly excites me because it shows that we've come so far in the past three to five years that suddenly even the decision makers at these big companies some of them very old school have accepted at least part of the vision behind DLT. And that excites me to no end. Yeah, I mean, I would echo that I think just from the government side. And one of the things that has been extremely exciting to me for the past couple of years already, but really is just accelerating even more, especially in the current environment, thanks to, you know, COVID-19 crisis worldwide, is that governments are really finding ways to reach across borders and work together much more proactively than in the past.

They have grasped that these technologies don't stop at the border. They're global technologies. They're by nature cross borders, and you can't confine them to particular jurisdictions. And therefore, they need to cooperate. And they're actually excited about cooperating. At first, in the beginning, they were very scared. Oh, no, we can't control this within our own country. But now they see the positive benefits of being able to really reach out and do that on a global scale and the efficiency gains that they can make by being able to work together rather than, you know, everybody having to invent their own independent regulatory regime that simply just doesn't work because the technology and the data and the tokens and everything, the cross borders. And you don't even know where people are sitting who are involved in running the networks, using the networks, etc. So it's really forcing governments and intergovernmental organizations to rethink how government works. And how do you do digital citizen services? How do you create value for society as governmental bodies? And I've never seen more innovation happening from governments as, you know, just in the last few months. And I think it's going to accelerate tremendously.

It already is, you know, thanks to the global pandemic that we're currently all facing. So I think that's really exciting and extremely promising. Absolutely. So where can people go find out more as we kind of close out this automation series? Where would you point them to go learn more about IOTA and the work you guys are doing? so definitely iota.org is the main hub it's the mothership um and for me just type my name in google david sunstaba i won't bother to spell it out because it's it's just yeah a norwegian name hard to spell it out but that's how it used to give a hard time to all of us if if we didn't

put the correct o when we were writing on slack or back in the day even before slack but yeah he's gotten over it now so yeah i have those special o's which you actually pronounce as uh so yeah and julie uh your twitter yeah i'm easy to find as well i'm just at julie maupin on twitter uh you can find me under julie maupin on linkedin as well um yeah it's it's not hard to find either of us if you're looking to reach out. And I want to also mention just for the developer community or people who are interested in learning more about specific use cases that you can spin up on IOTA pretty quickly, the docs.iota.org website has a lot of great information and blueprints for using IOTA for supply chain, how does IOTA work in identity, various different use cases. I think

there's a mobility one on there, a peer-to-peer energy grid blueprint. So that's a good source of information as well. Awesome. I appreciate you guys taking the time to record this and kind of talk through what I think are a lot of hotly debated and nuanced aspects of the space around these regulated, you know, nonprofit entities and kind of that spectrum from centralized to decentralized. I think the contribution to the conversation is really important. And then obviously you guys are um you know one of the teams that are um kind of living this out day to day um so i just appreciate the time and doing this yeah and the same uh we very much appreciate this series and the work you've put in so yeah very excited to have had this opportunity yeah

thanks for the opportunity to chat today hey everyone pop here if you like this episode of off the chain and want to help us take crypto to the top of the apple spotify and other podcast charts please do us a favor and rate review and subscribe to review simply go to the off the chain homepage scroll down until you see the five blank stars taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts i appreciate you listening and see you next time on off the chain