Speaker 1: So quantum computer is what's known. They have certain algorithms
Speaker 1: that allow to break these cryptographic methods right, and people
Speaker 1: are word to your point. You know, would this chain
Speaker 1: be affected? Would this mechanism be affected.
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Speaker 2: link in the description. Welcome into the Thinking Crypto Podcast,
Speaker 2: your home for cryptocurrency news and interviews. I'm your host,
Speaker 2: Tony Edward and my guest today is Sergei Gorbanoff, who
Speaker 2: is the co founder of axlr Protocol and the CEO
Speaker 2: of interrop Labs. Sergey is also an associate professor at
Speaker 2: the University of Waterloo. Sergei, great to have you on.
Speaker 1: Hey, great to be here. Thanks for having me.
Speaker 2: Sergei, you have an extensive background with crypto and blockchains.
Speaker 2: You are on the founding team of Algoran and I
Speaker 2: have a lot of questions for you. I want to
Speaker 2: get your perspective on many of the things happening in
Speaker 2: the crypto market. But before we get there, tell us
Speaker 2: a bit about yourself, where you're from and what's your
Speaker 2: professional background.
Speaker 1: Yeah, my professional background is distributed systems and cryptography. The
Speaker 1: PGM T. Afterwards, spend a little bit of time at
Speaker 1: Universal Waterloo kind of doing a lot of research and
Speaker 1: pryptography at Blockchain, you know, distributed Systems, worked on the
Speaker 1: Outground project, as you mentioned, kind of helped to design
Speaker 1: that and take that to the market, and then afterwards
Speaker 1: been focusing on the interoperability problem in the in the
Speaker 1: blockchain space.
Speaker 2: And what was your first encounter with crypto or blockchain
Speaker 2: or what was your AHA moment?
Speaker 1: Yeah, my first and Congress were at the end of
Speaker 1: grad school, so I was doing work in kind of
Speaker 1: more advanced cryptography. I had my I set on sort
Speaker 1: of graduation and had everything up for the thesis, and
Speaker 1: you know, it's pretty much done with it, so it's
Speaker 1: looking around for new challenges, new problems too to solve.
Speaker 1: There was a small bitcoin club that Ron Rivest, you know,
Speaker 1: one of the founders of ours a protocol Brandt mit
Speaker 1: So I joined that were reading some white papers and
Speaker 1: the topic became very very interesting. Of course, kind of
Speaker 1: quickly realized some of the technical you know, limitations of
Speaker 1: bitcoin and ethereum like protocols, and so we started to
Speaker 1: think about how do we do how do we do
Speaker 1: better right, and how do we design something that could
Speaker 1: scale further along And that's where you know, some of
Speaker 1: the early ideas behind the out Ground protocol with you know,
Speaker 1: Sylvia mcali were originated and yeah, kind of took it
Speaker 1: from there.
Speaker 2: And how long were you at Algoran? Obviously that's one
Speaker 2: of the bigger projects in the crypto industry, and Sylvia
Speaker 2: I've heard him speak over the years and al Grand
Speaker 2: certainly is doing things differently. You know, how did you
Speaker 2: end up working there and what we were some of
Speaker 2: your contribute contributions.
Speaker 1: Yeah, I mean we did a lot of work there, so,
Speaker 1: like originally it was a sort of research type of
Speaker 1: a project, right, we wrote like very first white paper
Speaker 1: with Silvia. You know, it wasn't kind of a called
Speaker 1: out Grand at the time it was live twenty fourteen
Speaker 1: or twenty fifteen. You know, for a few years after that,
Speaker 1: the blockchain crypto space was still you know, not as developed, right,
Speaker 1: and people were still thinking what to do. I remember
Speaker 1: actually like some first emails from Metallic at the time
Speaker 1: when they read like our manuscript war Oh, it's great
Speaker 1: to see like you guys thinking about some of the
Speaker 1: similar ideas that was thinking, you know, at the theory,
Speaker 1: like they already realized that the theorem would have to
Speaker 1: migrate to proof of steak from proof of work and
Speaker 1: so you know, he's on us some kind of nice
Speaker 1: notes on like you know, highlighting similarities in the thought
Speaker 1: process and you know what needs to evolve for those
Speaker 1: proof of steake systems too, you know, to become reality. Right,
Speaker 1: the concept of proof of say, didn't exispect the right
Speaker 1: it was. It was all being being originated. But you know,
Speaker 1: so I think after I finished school, I think Silva
Speaker 1: tried to get kind of funding for the outground project.
Speaker 1: It took a little bit of time until the markets
Speaker 1: kind of picked up, until like twenty twenty seventeen is
Speaker 1: when I believe kind of the ico boom came again. Right,
Speaker 1: you had good funding that was that was available, So
Speaker 1: we'll get some funding for the out ground protocol. And
Speaker 1: like a few of us, you know, from MIT and
Speaker 1: Sylvia kind of came together in Boston and started to
Speaker 1: you know, continue to design, right, continue to figure out
Speaker 1: what it actually looks like as a product, the blockchain stack,
Speaker 1: whether smare contracts, look around it. Yeah, and then you know,
Speaker 1: I think beyond like the al ground itself, we've done
Speaker 1: some nice contributions to the broader ecosystem. So as an example,
Speaker 1: that led centriization of kind of a BLS signatures with
Speaker 1: a team that was you know, at our Grand and
Speaker 1: the few other places you know, like Dan Bone and
Speaker 1: Stanford and some of his students at the time. So
Speaker 1: and BLS signatures, if you know, is what ends up
Speaker 1: being used in the theory at the proof at a
Speaker 1: proof of state consensus and many other blockchain networks today.
Speaker 1: So I think it was a very good project to
Speaker 1: try to align everybody to the new you know, to
Speaker 1: the new foundations of cryptography that it needed for those
Speaker 1: systems to be efficient. And so yeah, I kind of
Speaker 1: a bunch of other work along the way.
Speaker 2: Now, obviously you spend time at MIT and you were
Speaker 2: in that those circles. But were you by any chance
Speaker 2: there when current SEC chair Gary Genser who's going to
Speaker 2: be former SEC chair Gary Genser soon was was there
Speaker 2: I think teaching at some point, and I remember him
Speaker 2: making statements about Algoran over the years that you could
Speaker 2: put uber on Algoran. Were you around at the same time.
Speaker 1: Yeah, I was around at the same time. I believe
Speaker 1: I actually gave a couple of guest lectures of the
Speaker 1: Business School of Management that might see at the time.
Speaker 1: So they had a good group, right, you know, Christian
Speaker 1: Catalina was there. He ended up working at you know,
Speaker 1: Facebook Libra and now now they have a new project
Speaker 1: around bitcoin l two's. Yeah, there was quite a lot
Speaker 1: of talent at the time.
Speaker 2: Mm hmm. Now talk to us about Axelar and what
Speaker 2: was the goal behind starting this and what's the mission?
Speaker 1: Yeah, I mean the goal was really try to figure
Speaker 1: out how do you help innovation at the blockchain layer
Speaker 1: to continue while preserving kind of composibility across different blockchain layers, right,
Speaker 1: so as to be more concrete. You know, when we
Speaker 1: launched all Grand, it was very new stack right, new consensus,
Speaker 1: new way to approach more contracts, transactions, kind of security.
Speaker 1: As soon as we launched it, problem number one was
Speaker 1: how do we connected to everything else so we can
Speaker 1: bootstrap both developer activity and liquidity right, bring new assets
Speaker 1: to the ecosystem, allow developers to easier migrate their users
Speaker 1: or interact with applications that are built on our Grand. Ideally,
Speaker 1: from our view, we would have loved to see a
Speaker 1: protocol that we could just plug and play into the
Speaker 1: out ground right, to be connected to like ethereum, Bitcoin,
Speaker 1: you know, Ripple and like you know XRP laver and
Speaker 1: like other other chains, but we couldn't find anything right,
Speaker 1: there's nothing really available, and so we thought that you know, look,
Speaker 1: the blockchain ecosystem is still young. We're going to continue
Speaker 1: to see many other layer ones being developed and innovated
Speaker 1: on right in parallel, like Solana was being built, Avalanche
Speaker 1: was being built, near was being built, Polka Dot was
Speaker 1: being built. You know, we didn't even talk about layer twos.
Speaker 1: That all came later at the time, and so we thought,
Speaker 1: look like all of those innovations are going to continue
Speaker 1: to happen. People will keep on figuring out how do
Speaker 1: you optimize consensus, how do you optimize smart contract language,
Speaker 1: how do you maybe have your own unique kind of
Speaker 1: go to market or use case that you want to
Speaker 1: target and have your own you know, chain or application
Speaker 1: around it. And they will need connectivity. Otherwise we just
Speaker 1: continue to build siloed ecosystems right that don't talk to
Speaker 1: one another. And yeah, we thought this is going to
Speaker 1: be a very major problem for the ecosystem to solve.
Speaker 1: And you know, first year, we have to do a
Speaker 1: lot of education. In the first few years, we have
Speaker 1: to do a lot of education in the market around it.
Speaker 1: But you know, now it's a very well established, of course, problem,
Speaker 1: very well established domain, and I think we still keep
Speaker 1: on seeing introperability almost like one step behind innovation that
Speaker 1: happens at the layer once. Right, I think there's still
Speaker 1: so much work that needs to happen and the interoperability
Speaker 1: layer to keep unifying the ecosystem enable simple developer, simple
Speaker 1: user experiences and very exciting times.
Speaker 2: I had Yeah, absolutely, And I was looking at the
Speaker 2: Xlar network website and I noticed the different categories of
Speaker 2: folks that are working with you guys. Enterprise wise, you
Speaker 2: have Microsoft, Deutsche Bank, MasterCard, Wallet's Ledger, MetaMask and so forth, RWA,
Speaker 2: Circle Ondo. So you're trying to help enterprises, wallet services
Speaker 2: in different facts actions of the digital asset space be
Speaker 2: able to connect with each other obviously have interoperability. And
Speaker 2: would the interoperability be the movement of certain tokenized assets
Speaker 2: or NFT stable coins? Is it that? Or is there
Speaker 2: other use cases as well?
Speaker 1: Yeah, it's kind of the use cases span dependent on
Speaker 1: the application, but it's essentially unification of developer and user experiences. Right.
Speaker 1: So you brought up you know, token token, so as
Speaker 1: an example, as a token holder, if I have a
Speaker 1: stable coin like UCC. I want to and if I
Speaker 1: have it on multiple chains, I don't have to think.
Speaker 1: I don't want to have to think about it, right,
Speaker 1: I want to see it as one token. Sure, maybe
Speaker 1: it has a place on you know, different chains, incentiated
Speaker 1: depend on what applications I use on those chains, but
Speaker 1: I don't want to have to think about it. So
Speaker 1: from a wallet perspective, as a user, I want to
Speaker 1: see it all abstracted. I have my tokens, I have applications.
Speaker 1: No matter where that locations are, I should be able
Speaker 1: to go and use them, right, and then interoperability under
Speaker 1: the hood is responsible for yeah, token transfer if there
Speaker 1: needs to be information transfer, if there needs to be right. So,
Speaker 1: as an example, you want to deposit you're token from
Speaker 1: one chain into an application on another chain, but you
Speaker 1: don't want to have to just like move the token,
Speaker 1: then switch a wallet, then deposit to the application and
Speaker 1: have like twenty clicks in the process. Right, you want
Speaker 1: to have seamless as one transaction, one click from the wallet,
Speaker 1: and so you know general message passing types of primitives
Speaker 1: that the interroperability allow you to do that kind of
Speaker 1: a streamlined the process of you interacting from the wallet
Speaker 1: to multiple applications across different chains in very unified experience
Speaker 1: as you were interact in on a single chain.
Speaker 2: Now, I want to make sure I break this down
Speaker 2: for those who are new to blockchains and crypto. So
Speaker 2: does axel R have its own blockchain? Does it serve
Speaker 2: as a layer two or layer three? And if axl
Speaker 2: are for whatever reason and not saying will goes down,
Speaker 2: does that break any of the bridges?
Speaker 1: Yeah, so great question. So first of all, actually itself,
Speaker 1: you can think of it as a it is a
Speaker 1: blockchain that connects out the blockchains, right, so you can
Speaker 1: think of it as like you know, the mega highway
Speaker 1: of highways, right, So it's a it's a transportation network.
Speaker 1: But it's designed is to route messages, route tokens from
Speaker 1: one chain to another in an efficient way. It is
Speaker 1: powered by blockchain technology, so everything that the protocol is
Speaker 1: fully decentralized, open, you know, permission less, so you can see,
Speaker 1: you can audit it, you can contribute to it and
Speaker 1: build connections and keep on extended this highway, right, and
Speaker 1: then you know to your point what happens if acceller
Speaker 1: you know, goes down. So first of all, I think
Speaker 1: decentralization in the blockchain systems is what we have seen
Speaker 1: to be the most robust way to make sure the
Speaker 1: systems don't go down, right, and actually is the only
Speaker 1: introperability product that has, like I said, fully proof of
Speaker 1: state based, open consensus, open decentralized network. So we've never
Speaker 1: actually had the protocol or the network itself kind of
Speaker 1: go down, you know, and it has one hundred percent
Speaker 1: up time. Maybe individual like transactions sometimes don't go through
Speaker 1: because there are gas issues, but the network itself has
Speaker 1: a full one hundred percent up time, and that's thanks
Speaker 1: to the just decentralization of the network itself, right, And yeah,
Speaker 1: if it starts, if something happens, you don't have enough notes,
Speaker 1: because again the protocol is open, you know, you can
Speaker 1: go and run your own notes and continue to operating
Speaker 1: the network.
Speaker 2: Right.
Speaker 1: The inclusion in the network and participation is just as
Speaker 1: open as like on bitcoin and the theoryum where anybody
Speaker 1: can help network make progress, and so same properties, very
Speaker 1: strong liveness properties are then inherited by the actual network.
Speaker 2: And I'm assuming the vision is as we get the
Speaker 2: next billion and people to come into crypto and making
Speaker 2: it as easy as possible for them to onboard. And
Speaker 2: you mentioned the interoperability. So if whether they're using JP
Speaker 2: Morgan or deutstr Bank or match the card, you're running
Speaker 2: behind the scenes and they don't necessarily even need to
Speaker 2: know about xceller network or what's happening behind, just that
Speaker 2: it works, right.
Speaker 1: Yeah, exactly, I think you know. To your point. So,
Speaker 1: first of all, a lot of these enterprises that you mentioned,
Speaker 1: they're all looking to launch assets either on you know,
Speaker 1: their own chains and then connect them to everything else outside, right,
Speaker 1: or they go and they partner with existing chains like
Speaker 1: you know, like x or p Ledger, like Stellar, like Suite.
Speaker 1: They'll launch the assets there and they still want to
Speaker 1: interoperate with either other bank chains right or enterprise chains
Speaker 1: or other public chains. So they all need interoperability. But
Speaker 1: to your point, for the end user, once you're beyond
Speaker 1: you know, technical analysis and developer analysis that developers need
Speaker 1: to validate security and robustness of all these building blocks
Speaker 1: that they're using, and user just wants to be able
Speaker 1: to use these new efficient rail systems right, be able
Speaker 1: to be the beneficiary of it, have global settlement, cheap transactions,
Speaker 1: you know, global reach, to be able to transact with
Speaker 1: anybody across the world. They don't necessarily care so much
Speaker 1: where the assets are, how they interact with one another,
Speaker 1: how you move from one chain to another. So those
Speaker 1: things are abstracted away. And I think, you know, the
Speaker 1: analogies that you can make are similar to the intranet
Speaker 1: right right now we have in this you know zoom call.
Speaker 1: The information travels across probably over a dozen different networks
Speaker 1: to allow us to do this podcast live in a
Speaker 1: very seamless way, right And so it's the magnitude of
Speaker 1: the of all of these networks and interconnection between all
Speaker 1: of them that enables these experiences. And I think when
Speaker 1: it comes to blockchain and financial assets, it's inevitable that
Speaker 1: we're going to be in a very very multi chain
Speaker 1: world too, and that scale is needed to support all
Speaker 1: the new primitives and assets that are that are entering
Speaker 1: the space. But for average user, the experience needs to
Speaker 1: be a lot simpler. It's again all the way from
Speaker 1: your wallet or application to the apps and the underlying
Speaker 1: infrastructure rails uh you know, need to be hidden.
Speaker 2: Yeah. Absolutely, Does Axeler have a token and what's the
Speaker 2: protocol that it's based on? You know, you mentioned proof
Speaker 2: of stake earlier. What is it used with typic mechanism.
Speaker 1: Yeah, so actually has a utility governance token, right that
Speaker 1: powers taken on the Excel network. It powers governance on
Speaker 1: the Excel network. And yeah, the actual protocol has been
Speaker 1: designed originally from the Cosmos and Tenderment consensus and then
Speaker 1: we had to like customize it and modify everything from
Speaker 1: the incentives you know how validators propagate information to facilitate
Speaker 1: this introperability use case. And so it's been quite a
Speaker 1: lot of work to design the stack to make sure
Speaker 1: it is robust in the way that is. But you know,
Speaker 1: kind of a COSMOS framework is actually pretty flexible. That
Speaker 1: allowed us to do a lot of those changes.
Speaker 2: I mean, you guys have some amazing partnerships and just
Speaker 2: once again looking at the website and maybe you can
Speaker 2: tell us a bit about, you know, your roadmap for
Speaker 2: twenty twenty five and can we expect to see more
Speaker 2: enterprises of the caliber of JP Morgan, Deutsche Bank and
Speaker 2: so forth coming on board.
Speaker 1: Yeah, So we recently launched a very new framework, it's
Speaker 1: called the Amplifier framework that effectively changes i would say
Speaker 1: interoperability landscape and takes it to the new level. And
Speaker 1: what that means is that introoperability now with it becomes
Speaker 1: completely permissionless, meaning that you don't necessarily have to you know,
Speaker 1: talk to us as a as the builder or anybody
Speaker 1: else to get connectivity of your chain to all the
Speaker 1: other chains. It's fully permission less framework. It's full of
Speaker 1: permission less model. And so we have an array of
Speaker 1: very big partners that are building around this framework to
Speaker 1: connect their stacks, right, everything from enterprises to you know,
Speaker 1: some of the big public chains like Xo, b Ledger,
Speaker 1: Solona Suite. There's a connection to Bitcoin being made, there's
Speaker 1: a connection to stacks ecosystem being made. So I'm super
Speaker 1: excited for all of those connections to go live, you know,
Speaker 1: through this Amplifier framework. And I think it would essentially
Speaker 1: interconnect everything everything that matters in the in the crypto space.
Speaker 1: And yeah, to your point, there's there's quite a lot
Speaker 1: of ongoing work with enterprises initiatives, a lot of them
Speaker 1: around to organization verticals, right, So we essentially want to
Speaker 1: make sure that tokenization becomes as chain agnostic as possible, right,
Speaker 1: And towards that end, we have just recently a couple
Speaker 1: of months ago launched a product called Interchain Token Service
Speaker 1: that allows you to you know, launch it token on
Speaker 1: many chains at the click at one transaction. And so
Speaker 1: I think that's going to be the default mode of
Speaker 1: operation where people go and launch it token on all
Speaker 1: the chains without having to you know, launch it at
Speaker 1: one and then bringe it back and forth, which is
Speaker 1: a very very old process of doing things.
Speaker 2: Oh, for sure, I love it. This is certainly the
Speaker 2: infrastructure for the future of blockchain and a multichain world,
Speaker 2: no question for you. Let's say, for whatever reason, a
Speaker 2: blockchain goes away. We know not every chain will stick
Speaker 2: around for the next ten to fifteen twenty years. Let's
Speaker 2: say one goes away, what are the mechanisms in place
Speaker 2: to then have those maybe tokenize assets then be either
Speaker 2: burned or pulled out from that system and moved to
Speaker 2: other blockchains.
Speaker 1: So that's a great question. So you could actually use
Speaker 1: products like the Interchaine Token Service that I mentioned to
Speaker 1: do that, right. So it allows you to you know,
Speaker 1: map either an existing token that you have and you know,
Speaker 1: replicate or clone into all the other chains, right, or
Speaker 1: you can mirror it across across multiple chains, or you
Speaker 1: can simply you know, relaunch it with the same with
Speaker 1: the same state. So yeah, once you have this interconnectivity
Speaker 1: kind of a fabric, do you do you point this
Speaker 1: sort of token migration, right or token clone, it becomes
Speaker 1: you know, a function on top of this infrastructure, which
Speaker 1: projects like interchange token service support.
Speaker 2: Mm hmm, okay, god, so that mechanisms in place. Yeah,
Speaker 2: that's just a question I thought of because you know,
Speaker 2: I know, not every like I said, every blockchain is
Speaker 2: going to exist. There's probably going to be a handful
Speaker 2: of winners, you know, right now, there's so many, and
Speaker 2: it's a yeah, I.
Speaker 1: Mean, I think there's like two lines of thought, right, like,
Speaker 1: which is a you consolidate to a few you know,
Speaker 1: big chains and like that's that's more than sufficient. And
Speaker 1: then there's everything is like an app chain, right, kind
Speaker 1: of l two type of type of stuff. And I
Speaker 1: think the reality is that we're going to be probably
Speaker 1: in a hybrid, right where we're going to have big, monolithic,
Speaker 1: efficient stacks that have the best kind of composibility and
Speaker 1: the best equidity that you can go and launch, you know,
Speaker 1: and and leverage very efficient you know, new new iterations
Speaker 1: of chains like swite, you know, like stellar like, uh,
Speaker 1: you know x RPL support thousands of transactions you know,
Speaker 1: per second and things like that. But there is a
Speaker 1: world where we're see more and more applications that do
Speaker 1: have a product market fit launching their own chains so
Speaker 1: they can customize the entire stat right, So we've seen
Speaker 1: this from dy d X, We're now seeing it from
Speaker 1: Uni swap. You know, we've been seeing it from you
Speaker 1: know previously before that kind of a couple of years
Speaker 1: ago Compound, right. Uh so so so yeah, I think
Speaker 1: applications that do have a product market fit that you
Speaker 1: want to customize more of the you know, rewards mechanism,
Speaker 1: security mechanisms, maybe you know, liquidity mechanisms of the underlying
Speaker 1: validation layer will go and launch app chains that will
Speaker 1: still be interconnected to you know, these bigger, bigger chains
Speaker 1: and bigger, more monolithic designs. So I'm pretty confident that
Speaker 1: we're going to be in a hybrid world between those,
Speaker 1: and you know, I think that we're ready seeing that
Speaker 1: trend where applications that have found the product market fit
Speaker 1: then migrate from these monolithic chains into their own like
Speaker 1: app chains and then customize more logic around those.
Speaker 2: Hm. Yeah, that absolutely makes sense. So, Serge, I want
Speaker 2: to get your perspective and thoughts on quantum computing. This
Speaker 2: has been a big topic lately and it's impact on
Speaker 2: Bigcoe and other blockchains. Given your expertise in cryptography, kind
Speaker 2: of give us the lay of the land, you know,
Speaker 2: do you feel there's going to be a threat here
Speaker 2: too many blockchains from quantum computing?
Speaker 1: Yeah, so I think quantum is still very early, right.
Speaker 1: I think if you look at some of the news
Speaker 1: from the last a few months from from Google of
Speaker 1: the world and some of the folks like, there are
Speaker 1: definitely problems and there are definitely in the right direction,
Speaker 1: but thereby no by no means kind of close to
Speaker 1: being able to break cryptographer, right, that's used in the blockchain. So,
Speaker 1: and for those that are not aware, one of the
Speaker 1: reasons people talk so much about quantum is that all
Speaker 1: the blockchain systems rely on cryptography. Right. Cryptography is what's
Speaker 1: you know, used to generate your accounts on the blockchain,
Speaker 1: used to sign transactions so that nobody else can can uh,
Speaker 1: you know, maliciously sign on your behalf right or fake transactions.
Speaker 1: So cryptography is fundamental. It's used by the validation of
Speaker 1: all the of all the activity that happens. So quantum computers,
Speaker 1: what's known. They have certain algorithms that allow to break
Speaker 1: these cryptographic methods, right, and people are worried right to
Speaker 1: you to your point, you know, would this chain be
Speaker 1: affected with this mechanism be affected? And the reality is,
Speaker 1: like I said, you know, we're still quite far from
Speaker 1: those attacks being practical. At the same time, there by,
Speaker 1: cryptographers and researchers have been ongoing efforts to design cryptography
Speaker 1: that's resilient to quantum algorithms. Actually, a lot of cryptography
Speaker 1: that I worked on in my graduate school is resilient
Speaker 1: against quantum cryptography. There is now a NIST, which is
Speaker 1: a National Institute of Standardization Technology effort to standardize primitives
Speaker 1: that are used that will be used in this post
Speaker 1: quantum you know, signature and encryption algorithms. So those efforts
Speaker 1: are well underway. I think we know quite well what
Speaker 1: we're doing and what those algorithms are. And I would
Speaker 1: see essentially a migration over the next ten years by
Speaker 1: the blockchain, and not only blockchain systems, like all the
Speaker 1: financial systems would be affected when the quantum computers come
Speaker 1: to reality. So I do think those threats you know,
Speaker 1: need to be everybody needs to be mindful of them.
Speaker 1: There's no reason to panic or do anything, you know, overnight,
Speaker 1: but you should think about, you know, how would my algorth,
Speaker 1: how would my system blockchain or traditional financial system migrate
Speaker 1: to those algorithms, and what the effects of them would
Speaker 1: be on my overall security, and you know, have a
Speaker 1: plan in place to over the next I would say
Speaker 1: a decade migrate. I don't know where it's going to be,
Speaker 1: you know, a little bit less or more on the timeframe,
Speaker 1: but you know, it's it's it's a multi year project
Speaker 1: and we're definitely make at least you know, I would
Speaker 1: say ten years. This is a guess right now. I
Speaker 1: think it's a little big guess on everyone's part. But
Speaker 1: there's quite a lot of stuff that has to happen
Speaker 1: for those two to actually affect you know, blockchain systems
Speaker 1: that we use today.
Speaker 2: Oh for sure. And and I'm assuming the logical step
Speaker 2: for many of these folks with nodes or whene it's
Speaker 2: mining equipment that they would upgrade with the same technology.
Speaker 2: Right maybe there's a bit of a lag, but if
Speaker 2: you have this respective chip from the video or whoever,
Speaker 2: I'm going to build mining equipment around there, or I'm
Speaker 2: going to build computers that can run proper nodes with
Speaker 2: that with that chip, right.
Speaker 1: Yeah, yeah, exactly right. And you know, to your point,
Speaker 1: I think the security threads of these quantum computers really
Speaker 1: come in like two folds. You have to analyze the
Speaker 1: consensus itself and you know, ask yourself, am I vulnerable
Speaker 1: or does anything have to change with it? So, as
Speaker 1: an example, Bitcoin uses you know, of course proof of
Speaker 1: work consensus, but it's mostly using hash functions, and these
Speaker 1: hash functions are not vulnerable to quantum attacks to the
Speaker 1: same extent as signature schemes. Okay, so you will need
Speaker 1: to adjust parameters of bitcoin to make sure it keeps
Speaker 1: on minding efficiently, you know, and nobody can can kind
Speaker 1: of create forks at a fraction of a cost, but
Speaker 1: that's a privator change at the consensus algorithm. Nothing changes
Speaker 1: to the Bitcoin consensus algorithm itself. And then there are
Speaker 1: signatures used by the bitcoin community right to sign transaction
Speaker 1: that actually sends the funds from you know, from you
Speaker 1: to me, right, and those things will be vulnerable to
Speaker 1: those quantum attacks. And then the bitcoin community and the
Speaker 1: communities will have to migrate to a new type of
Speaker 1: you know, cryptography used to make sure that those individual
Speaker 1: transactions are then not affected to the same extent. Right now,
Speaker 1: for other blockchains, you might be vulnerable at both with
Speaker 1: the consensus and individual transaction player and so then yes,
Speaker 1: you would have to migrate to the right algorithms you know,
Speaker 1: along the way. But some of them already protected right
Speaker 1: at the consensus, like Bitcoin, and you know they will
Speaker 1: only need to address in the digital transactions.
Speaker 2: Mm hmm, Okay, that that definitely makes sense. I appreciate
Speaker 2: that perspective because to your point, there's just you know
Speaker 2: a lot of headlines, Oh, no, quantitum computing is going
Speaker 2: to take down Bitcoin and this blockchain, but you know
Speaker 2: they we're not close to that yet, and folks will
Speaker 2: evolve and iterate and make them dates.
Speaker 1: Yeah, And like the last point that I'll make on that,
Speaker 1: I actually think blockchains are best suited right now to
Speaker 1: embrace the upgrades as transparently as possible compared to sorry,
Speaker 1: like I said, traditional systems, right, most blockchains do they
Speaker 1: have upgrade mechanisms, right, you know, we have seen upgrades
Speaker 1: on Bitcoin, we have seen upgrades and ethereum and many
Speaker 1: many chains have those kind of on chain governance based,
Speaker 1: consensus driven upgrades where the whole ecosystem switches to a
Speaker 1: new mode of operation. Traditional financial systems don't have those, right,
Speaker 1: It's a lot of bespoke systems and pieces of information
Speaker 1: and APIs that are sort of stitched and glued together
Speaker 1: communicating her bespoke way. It would be much harder to
Speaker 1: upgrade those than it would be to upgrade any blockchain
Speaker 1: system in my view.
Speaker 2: Yeah, because many of those systems are so antiquated in try. Yeah,
Speaker 2: just the old systems, and we're trying to get them
Speaker 2: to move to blockchains and right now. So that's a
Speaker 2: great point.
Speaker 1: Maybe that would be the you know, a way to
Speaker 1: push them into blockchain system that's your way to be
Speaker 1: quantum secure.
Speaker 2: Right. I didn't want to get your thoughts on AI
Speaker 2: and crypto. We're seeing kind of a symbiotic relationship where
Speaker 2: AI is being used to enhance blockchain attributes and then
Speaker 2: blockchain is being used to police AI from a deep
Speaker 2: fake perspective. You know, how do you see this relationship
Speaker 2: and this intersection growing as we head into the future.
Speaker 1: Yeah, I think the way that I like to summarize
Speaker 1: is that AI creates AI makes the cost of generation
Speaker 1: to be almost zero, but it requires verification to be useful. Right, So,
Speaker 1: anything you know that's AI generated today people asking questions
Speaker 1: that how do you differentiated from real Right? How do
Speaker 1: you differentiate what's AI generated, what's not AI generated? How
Speaker 1: do you differentiate what's generated by malicious AI versus versus
Speaker 1: you know, non malicious AI. Right, And so blockchains systems
Speaker 1: are very good at given the ground truth of information,
Speaker 1: and I think that relationship today is very you know,
Speaker 1: it's very early. I think there's a lot of you know, buzz,
Speaker 1: and there's a lot of hype. You know, it needs
Speaker 1: to be developed more. I think it needs to be
Speaker 1: explored more. But I do think it's there are real intersections,
Speaker 1: there are real use cases because of these very two
Speaker 1: conflicting properties. Right. One is let me generate things as
Speaker 1: fast as possible, as much as possible, and that information,
Speaker 1: you know, ends up being very hard to validate, to verify,
Speaker 1: to communicate, to authenticate. And then we have blockchains that
Speaker 1: are very good at you know, validating, distributing, rewarding, you know,
Speaker 1: verifying all of that. And I think for the AI
Speaker 1: to go to the level that it needs to be at.
Speaker 1: It will need to be combined with a sort of
Speaker 1: verification layer in some sense, and I think blockchain is
Speaker 1: very good at doing that in addition to have and
Speaker 1: of course, you know financial rails embedded in the in
Speaker 1: the AI systems, which I think are necessary as well.
Speaker 2: Yeah, and do you think this is something I've been
Speaker 2: noodling on that social platforms where many of us get
Speaker 2: our information from, right, we see what our friends, family
Speaker 2: are doing. That when we upload an image or a video,
Speaker 2: there's going to have to be some sort of blockchain
Speaker 2: encryption tag to it, so that if someone comes with
Speaker 2: a different version that's AI manipulated, we can say, no,
Speaker 2: that's that's that was not from Surgey or not from Tony.
Speaker 1: I think we need to get there right Otherwise, again,
Speaker 1: like we live in the world of you know, made
Speaker 1: up facts and made up information, right, Like, I really
Speaker 1: hope we can get to the world where information is validated,
Speaker 1: can be authenticated with full providence. If it's been modified
Speaker 1: along the way, we know what the modifications are and
Speaker 1: you can like you know, go down the roots because
Speaker 1: because yeah, again I think the cost of information is
Speaker 1: going to be negligible unless it's verifiable information going forward.
Speaker 2: Mm hmm. And do you foresee that in the future
Speaker 2: we may have I don't know if this makes sense
Speaker 2: AI to police a the world of AI, right, you
Speaker 2: have these AI agents from the government or law enforcement
Speaker 2: or from companies that are just monitoring what's happening overall,
Speaker 2: what people are doing and what rogue AI agents may
Speaker 2: be doing. Do you see something like that?
Speaker 1: Definitely? I mean like a new AIS like no other.
Speaker 1: There's no different as like other software system right, Like, yes,
Speaker 1: we have software today that you know, does certain things
Speaker 1: used by you know, good actors, bad actors, educational institutions,
Speaker 1: medical institutions, and of course we have a lot of
Speaker 1: software that you know polices today software right monitor and
Speaker 1: for vulnerabilities, for attacks and everything else. So if you're
Speaker 1: in the AI world and if that's a better way
Speaker 1: to build software and systems and propagate information, of course
Speaker 1: you're going to need to you know, uh, the the
Speaker 1: A itself to to police one another. Right, then the
Speaker 1: software systems will need to leverage it to to kind
Speaker 1: of keep up right with the with threats, with attacks,
Speaker 1: with the you know, information explosion that that happens in
Speaker 1: other AI systems. So yeah, I mean I view it
Speaker 1: as the as the better, more efficient way to both
Speaker 1: build systems, to search systems, to analyze information across the world.
Speaker 1: And you know, I think blockchain it plays a critical
Speaker 1: role by providing some of the properties need it, you know,
Speaker 1: around authenticity of the data.
Speaker 2: Mm hmm. This is a very far out question, but
Speaker 2: I'm just thinking about what the future may look like.
Speaker 2: What if we have an AI it creates its own blockchain,
Speaker 2: its own token, and no human can control it. What
Speaker 2: do you think that that may be possible in like
Speaker 2: forty years or something.
Speaker 1: I don't see why you need to do it, you know,
Speaker 1: forty years. I'm sure you can. You're doing employ the
Speaker 1: days right for a g I. So yeah, I mean,
Speaker 1: like you know, you've seen projects of a kind of
Speaker 1: a launch in tokens right, generated some keys these days,
Speaker 1: and like applications, there's no there's no reason why it
Speaker 1: cannot launch. You know, the blockchain system decide how the
Speaker 1: validation logic is have and you know, under the hood.
Speaker 1: So yeah, I mean, like I think, what it is
Speaker 1: not forty years?
Speaker 2: Yeah, and maybe that's like you know what we saw
Speaker 2: in the movies with sky Neet right, and it's doing
Speaker 2: its own thing you can't control anymore. But hopefully there's
Speaker 2: no I don't know what.
Speaker 1: Not being able to control like that sort of a
Speaker 1: you know, too far out there. I think all systems
Speaker 1: can be controlled, you know, like, hey, I systems are
Speaker 1: systems that you can isolate them. You can you know,
Speaker 1: restrict their scope of run time and things like that.
Speaker 1: So yeah, I'm not I'm not afraid of you know,
Speaker 1: uncontrollable sky Night takeover of things. I'm more afraid of
Speaker 1: just abundance of these systems and the result of abundance
Speaker 1: of these systems, you know, lots of errors coming up,
Speaker 1: lots of misinformation, lots of you know, bad you know,
Speaker 1: just bad decisions being made potentially by other system is right,
Speaker 1: And you know, if you want to call the sky
Speaker 1: net type of drama, maybe it will lead to that.
Speaker 1: But you know, I think we're pretty pretty far from that.
Speaker 1: But but there are real, I think challenges that we're
Speaker 1: going to have to address, right with just the just
Speaker 1: the abundance of information the AI systems, and they have
Speaker 1: bundands of actions these AI systems can take.
Speaker 2: Yeah, absolutely, It's it's a brave new world, exciting but also,
Speaker 2: like you said, some things we got to be cautious about.
Speaker 2: I did want to get your thoughts on the maturity
Speaker 2: of the crypto market. Obviously you've been in this space
Speaker 2: for a while. What are your thoughts on how the
Speaker 2: industry has grown, the change of the environment for crypto
Speaker 2: starting this year with the new president of New Congress
Speaker 2: and TRADFI is here looking to build tokenizing and much more.
Speaker 1: I definitely think it's become more and more mature and
Speaker 1: more and more ready for war, you know, a kind
Speaker 1: of a mass adoption, right and like real, real distribution.
Speaker 1: So you know, as an example, when we're even working
Speaker 1: at out ground, we had a lot of conversations but
Speaker 1: you know, some of the same institutions as we're you know,
Speaker 1: talking to today, and in many cases a lot of
Speaker 1: the conversations were around doing pilots in the you know,
Speaker 1: R and D departments in some sense, right, and that's
Speaker 1: where the conversations remained. And that's where the conversations were left.
Speaker 1: Today we'll find it outselves in conversations with product teams
Speaker 1: right at these institutions, So product teams that are looking
Speaker 1: at tokenization, product teams that understand that you know, blockchain
Speaker 1: systems can provide more efficient settlement of their transactions, more
Speaker 1: efficient accounting of their transactions. Right, if you're operating costs
Speaker 1: and those product teams are figuring out what the products are,
Speaker 1: how do you launch behind them? Right? So, I think
Speaker 1: we're definitely in a new aram for adoption amongst the
Speaker 1: you know, institutions and enterprises. I think the technology is there,
Speaker 1: technology is already. We know how to build good experiences.
Speaker 1: We know how to build you know, chain abstracted interfaces
Speaker 1: and tokens. We know how to scale underlying consensus as well.
Speaker 1: So all I think, you know, a lot of the
Speaker 1: infrastructure problems that we've been working on over the last decade,
Speaker 1: I think are solved, and you know, we need to
Speaker 1: enter the world of usability, you know, clear value proposition
Speaker 1: for around the use cases. And yeah, I think these
Speaker 1: conversations are very very exciting, very very real, and I'm
Speaker 1: kind of looking forward to what's going to happen over
Speaker 1: the next few years with you know, new new administration
Speaker 1: on board as well as the technology being at the
Speaker 1: phase that it's at.
Speaker 2: Yeah, for sure. And one of the things I've been
Speaker 2: thinking about, and this is a conversation out of people
Speaker 2: are been having as well. Is getting the wallet right
Speaker 2: so that my mom and dad, the average Joe and
Speaker 2: Jane walking down the street can just they have the
Speaker 2: Web two feel to it right, the interface, but it's
Speaker 2: powered by blockchains. It's powered by Web three. And while
Speaker 2: they may know, okay, this is a crypto blockchain related app,
Speaker 2: it doesn't feel like it doesn't. I don't have to
Speaker 2: worry about a twenty four phrase password and all that.
Speaker 2: Are there any wallets that call out to you or
Speaker 2: that you think might be leaning to charge here?
Speaker 1: So there're actually kind of a quite a few wallets
Speaker 1: that are embracing kind of a traditional sign on mechanism
Speaker 1: to generate cryptographic keys. So as an example, you know,
Speaker 1: we're working with Slee Blockchain quite a lot, and they
Speaker 1: have this project called gk log Game, which I'm really
Speaker 1: which I really love. The basic ideas to be able
Speaker 1: to generate all the cryptographic materials that you need using
Speaker 1: your standards credentials from more additional like online platforms that
Speaker 1: you use. Right, so you can like go to Google,
Speaker 1: authenticate to your email from Google, and that would serve
Speaker 1: as a credential to generate U you know, a cryptographic
Speaker 1: key on a blockchain, right, You'll never have to think
Speaker 1: about this cryptographic key. You'll never have to think about
Speaker 1: recovery beyond recovering your you know, Google credential, but it
Speaker 1: is going to be sufficient to establish your identity in
Speaker 1: the blockchain system and then use that for all the transactions.
Speaker 1: So I'm a big fan of these new projects that
Speaker 1: leverage you know, zke type of technology to establish traditional
Speaker 1: credentials that a lot of people are familiar with and
Speaker 1: then take those for them into the blockchain, establish an
Speaker 1: identity for the user and use that then throughout the blockchain.
Speaker 2: M hm, yeah, And I love that idea as well,
Speaker 2: where it just makes it simple. There's not necessarily anything
Speaker 2: new to the end user per se, but on the
Speaker 2: back end the cryptography, all the respective items are there.
Speaker 2: Do you think it also needs the buy in from
Speaker 2: the Googles and the facebooks that they may need to
Speaker 2: agree their infrastructure with using blockchain to help make sure
Speaker 2: this is all sealed tight?
Speaker 1: I mean, the beauty of actually these cryptographic methods is
Speaker 1: know that they do not need any buy in from Google, right,
Speaker 1: they do not need anybody from traditional vendor. You applying
Speaker 1: kind of cryptography on top of these authentication methods and
Speaker 1: they won't have to change at all.
Speaker 2: Mm hmm. That's good to know. Okay, Serge, great information man,
Speaker 2: very insightful. I got some wrap up questions here for you. First,
Speaker 2: if you could create your own metaverse, would the theme be?
Speaker 1: What would the theme be? That's a good question. Clarity
Speaker 1: of thought hmm.
Speaker 2: Rapid fire questions, favorite food, fish, favorite musician or band Metallica,
Speaker 2: favorite movie.
Speaker 1: Uh Matrix, favorite book, thinking fast and slow?
Speaker 2: And when you're not working at Axelar, what are you
Speaker 2: doing for fun?
Speaker 1: I try to exercise as much as I can, you know,
Speaker 1: spending time with family, but exercises, uh one of my
Speaker 1: ways to you know, relax myself in the brain.
Speaker 2: SERGEI absolute pleasure chatting with you. Appreciate your knowledge and
Speaker 2: your experience. Thank you so much for joining me.
Speaker 1: Thanks for having me. This is awesome.
Speaker 2: M