Name: Balancing The Ledger: Kathleen Breitman Talks Tezos, New Project, and Goldman Sachs
Uploaded: 2018-09-06
Duration: 8 min 53 s
Description: Kathleen Breitman is co-founder of Tezos, a blockchain project which raised $232 million last summer - the biggest ICO ever at the time.

[ MUSIC ] Welcome to Balancing The Ledger where tech and finance intersect. I'm Jen Wieczner. And I'm Jeff Roberts. And this week we're joined by Kathleen Breitman, the co- founder of Tezos, a blockchain project that raised $ 232 million last summer Summer. Thank you so much for being here Kathleen. Thank you for having me. So tell us what exactly Tezos is and what it does. So Tezos is a smart contract. In many ways it can do theorium, but the core observation that led to Tezos' origination was in 2014 there was a lot of so called alt coins. Coming out. They were basically forms of Bitcoin. And the argument at the time was that this is actually a good thing for Bitcoin because after all, Bitcoin could always fold in the innovations that these alt coins were bringing to the market. So that prompted a question of like how? Bitcoin lacks a formal mechanism to upgrade itself. And so Tezos kind of hopes to solve this notion of how to upgrade a blockchain by creating a formal government in its process around figuring out which version of Tezos is the canonical one. But would it be right to say Tezos is sort of like Bitcoin and Etherium but with political science and game theory baked into the protocol? Yeah, I would say that's a fair characterization. I think that to be honest, there is a sort of governance mechanism in Bitcoin, in Ethereum that's just not as explicit as in Tezos. So drawing that out and forcing it to be in a Sort of town square instead of through more implicit means is what we're trying to do. Yeah, the town square means of governance is what makes Tezos so unique. So how exactly does that work and what's different about it then? The way BitCoin's governance works, for example. Yeah, so I think the tagline for Tezos on the website is the digital commonwealth, and I like that cuz it's a very [ LAUGH ] literal way of thinking about it. If you think of a blockchain as a shared resource among many different actors, a commonwealth is basically how do you maintain it. And so Tezos has a few interesting features but I think the most prominent one is it actually has a very meadow wave upgrading its governance process. And to experience with how to allocate these resources. And how to prune them and garden them, if you will. Shared resource like a park. You can get the consensus from the masses verus just having it be forcing the differences to come to a hard fall for example as we see with the claim. So yeah, I mean most blockchains come to consensus on what a valid transaction is, Tezos goes one step further by actually having a consensus on which upgrades are valid. I noticed some concern a few months back about centralization in the industry. There may be a couple of cabals that would have had an outsized power on the network. And I know this is a concern with all blockchains, but it sounds like you're sort of addressing that or overcoming it? Yeah, well, I think the distribution of I guess token holders and the network is remarkably evened out and I think the average contribution to the Tezos fundraiser was around $ 1000 to give you an idea. And so that automatically has an interesting contribution it's very similar to the genie coefficient in the United States if you think about it. But I think what we were mostly concerned with just We want to have to have this sort of decentralized digital commonwealth and to be able to imbue these principles. Having people participate in the validation process, so the people who were actually maintaining the ledger was a big concern. But thankfully and remarkably, I think the software that has been, Made available to the public to participate in this process has been remarkably accessible to the extent that there's been quite a few people setting up services to delegate and receive delegation. Around 400 to 440 people are validating the network at any given cycle. And you're working on a new project yourself that will run on Tezos? Yeah, so I mean my husband and I obviously are the co- founders of Tezos and so my husbands competency lies in contributing to the core protocol. I am going to use my voice in the network to focus more in the application layer, I think there is a lot of really interesting problems in the cryptocurrency space but I think user design And, interaction with sport contracts is one of the mean ones. And, I think online video games are actually really interesting hook to kind of use crypto currencies more fruitfully and so, I'm exploring attention with that in my next company but, that's all I have on paper now. Take us say, a year or two ahead I mean if Tesla's really kind of Gets going. What's it going to be killer apps on it? Yes. The reason I'm focusing on online video games is primarily because I think the users of these games have the right profile for adopting new paradigms. So, I'm going to try to lock in there and try to understand the user experience a bit more and create hopefully create more tools that are are more accessible using smart contracts, for example. But ultimately I think that these things are good for making transactions with people you don't necessarily know. And so financial use cases obviously come to mind. I think one application that I'd love to see in Ethereum or Tezos or whatever would be something like weather insurance, peer to peer weather insurance because you can use an outside oracle but by and large you can kind of muddle out the Information and you can imbue that into small contract really easily. A lot of the hype over the past few months has centered around whether Wall Street institutions are actually going to tade cryptocurrencies and there were some news that really hurt the market this week with Goldman Sachs saying that they are not going to be opening a BitCoin trading desk afterall. What do you make of that news? Without just like the latest news in a series of kind of the Bitcoin ETF for example, was rejected on the few weeks ago as well. So, it's really been a bad series of events. Yeah, and frankly I was more surprised that Goldman was considering doing a Bitcoin trading desk and I'm feeling not surprised it didn't go through As far as I know, there's still a paucity of sophisticated actors who understand Bitcoin really well in these Wall Street firms. And so I'm not surprised that lacking any good custody solution, for example, there would be trading desk. So there's a lot of baby steps bringing these institutions to really Organize themselves and take the operational consideration seriously to have these digital bearer assets floating around the bank, so it's more of what I expected. The early days of [ UNKNOWN ] was dominated by these weird headlines of this sort of death match. Between you and your husband and this evil foundation had. Yeah. That wa summarized in that cover story at wired. Part of the controversy, you've raised hundreds of million of dollars but people would questions around wether was actually going to launch, now that it's launched, it sounds like you still have enormous resources to play with. What can you do with those? So, most of the money is still in Bitcoin, but it's still a substancial amount of money that can be pledged to business projects. I think to date the TEZOS foundation has put around 30 million dollars in grants outside of the foundation towards things like academic research, but more importantly and more dear to my heart Is community organizations around the world, so I spent several days in Korea a few weeks ago. And I was really charmed at how enthusiastic and how passionate the Korean community was, even though I never actually been to Korea before. So it's very humbling and it's very endearing to see this type of grass roots organic fanfare for Tezos sort of take root and receive funding from an organization that was meant to endow this sort of thing. Mm- hm. I think that's to the sort of credit of Tezos that you guys did kind of put your head down and finish this cuz there's a lot of skeptics including me once upon a time. However, more broadly in the larger crypto world, I think what Jen might be getting at is a lot of people who suddenly have not just millions but tens of millions or hundreds of millions of money, of dollars and isn't it tempting sometimes to go and rent Lambos and just goof around for a few years? People sort of critique the crypto world for that, the lack of any sort of [ INAUDIBLE ] overseeing them. No one is completing anything, so do you think that's a fair critique and how did you go a different way? I mean I still fly economy class, so clearly I'm doing something wrong but [ LAUGH ]. I think there is a lot of people who want to show off. And obviously, the squeaky wheel gets the grease. If you're gonna rent a Lambo and park it outside of Consensus, you're gonna get a photo with a Lambo at Consensus I think that there is a certain degree of people who don't have a lot of shame, going out and doing very ostentatious things that I would find in poor taste. I think that just in general, that's kind of always been the case with early banker systems. You always get these sort of bad boys and people who people want to hold up as what's wrong with an industry, and if I think having ostentatious people who sort of do fly by night types of things profiled is the easiest way to do that if you're looking at the space and trying to find a good bad guy. Thank you so much Kathleen for joining us. Well thank you for having me. I'm Jen Viechner. And I'm Jeff Roberts for more Balancing the Ledger please go to fortune. com. We'll see you next time. [ MUSIC ]

Balancing The Ledger: Kathleen Breitman Talks Tezos, New Project, and Goldman Sachs

Finance

Kathleen Breitman is co-founder of Tezos, a blockchain project which raised $232 million last summer - the biggest ICO ever at the time.