Dr Scott Stornetta: Co-Inventor of Blockchain on Crypto Clothesline
Speaking With Scott Stornetta Was Like Chatting With Your Uncle At a Party
He was accessible, funny, thoughtful, self-aware yet showed optimism and a keen mind for seeing the good in people and situations, maintaining a balanced outlook also in terms of spirituality and our role here on Earth to serve and help out other people.
You just wouldn’t think you were speaking to the co-inventor of blockchain! Together with Stuart Naber, right back in the late 80s, these men looked at how to inhibit the falsification of digital records.
“We were moving into a world of purely digital records and as anyone that has had any acquaintance with photoshop [would know], it’s easy to alter digital records.”
Scott is a chief scientist at Yugen partners, and currently a high school maths teacher in the States.
It was our mutual acquaintance, Derrick Graham, Chairman of First Digital Capital, who introduced Scott to the Blockchain community in Perth in 2018.
“So I started working on what we now call the blockchain in 1989, the spring of 1989, that’s fully 19 years before the Bitcoin paper was published.”
Blockchain was not born together with Satoshi’s Bitcoin white paper, it had been mooching around for almost 20 years before Satoshi started creating new layers on top of the original protocol, thereby creating Bitcoin…
“[People] had assumed that block chain only became a thing with the publication of the Bitcoin paper and, without wanting to take anything away from a real work of genius that Satoshi performed in giving birth to Bitcoin, there really was a foundation that goes much earlier.”
Was The Timing Out?
Our very own Johnny Swanepoel of Blockchain Perth and Blockchain Fremantle, sent us a question to pose to Scott about timing… Was it too early for Scott and Stuart to be able to see the potential for blockchain technology that Satoshi later uncovered, especially in regards to the cryptocurrency aspect?
“That’s like trying to climb a tree in order to get to the moon: you could see that you were moving in the right direction, but it’s just such an impossible stretch to go there.”
Scott agrees that timing played a huge role, but that for a series of reasons, it wasn’t the time for the crypto potential of the blockchain to be unleashed.
“I’m happy that each generation makes its own contributions.”
Are You Satoshi, Scott?
Chris Dorian of BuildSort asked the inevitable question of whether Scott Stornetta was in fact, the Satoshi Nakamoto?
Scott has a background in speaking Japanese, having worked as a missionary in that country for some years. He had a strong interest in cryptocurrencies many years prior to the Bitcoin paper… but he says he drifted out of that space and didn’t learn anymore about cryptocurrencies until he received some mail showing that 4 of the 8 citations in the Bitcoin white paper of 2008 were drawn from his and Stuart’s early blockchain work.
“I’m a fan of what he’s done, but I do want to say that when Stuart and I first talked about the Bitcoin paper, we felt like some of it was just a great idea, out-of-the-box thinking… And then other parts of it we looked at and said: Why did he make that mistake? Why did he do that?”
Perhaps being more uniquely qualified than most to critique the logic behind Satoshi’s Bitcoin blockchain’s moves, they found a number of discrepancies they didn’t agree with:
“He built on what we had done and took it in some very imaginative directions, but also some troubling ones.”
“I very much am a fan of the idea of decentralization of trust and the kind of democratisation of governance that the blockchain affords… this solution of interlinking records and then widely distributing [them] meant that local concentration of power or centralised control was no longer possible, and so I very much am responsive to what you might call the libertarian bent that many people have about the block chain space.
“I separate that from the decision that Satoshi made to create a large incentive of mining: the idea that one would enter into this competition to perform calculations in order to decide who won each succession block. I think it’s not well thought through in terms of how it almost defeats its original purpose, namely that it [leads] to concentrations of power amongst mining pools…
“You have two major competing mining pools each year engaging in non-economical business practices in an attempt to wrest control from the other about who’s going to come out on top.
“It’s almost like a mutually assured destruction arms race where people are incentivised to consume ever-more processing power to simply decide who creates the next block on the blockchain.”
What’s The Deal With ICOs And The Future Of Blockchain?
Leah Callon-Butler of intimate.io asks about Scott’s take on the current market and how the ICO craze has impacted on the future of blockchain use-cases.
“I’m taking advantage of the much richer information environment that we have because of the Internet, and the interconnectivity that we have because the Internet allows small-time players to invest in new start-ups…
“A kind of freedom of being able to back early-stage enterprises and hope to receive some benefit in exchange.
“A kind of freedom previously only enjoyed by very wealthy individuals and large organizations now is democratised, if you will.
So that, you know, people that have $5 or $10 or 100, can play that same game. I think that’s the spirit of the ICO.”
Scott doesn’t discount the scams, rip-offs and sheer dishonesty of certain players in the crypto field who have painted the industry with a negative image.
“…but the notion that we can work kind of peer-to-peer or one middle-class person to another middle-class person helping to fund a creative efforts and then hopefully benefit if they’re successful, that we can bring that down to the level of just ordinary citizens, ordinary people is very liberating.”
“There’s been some concerns about the need to provide at least some regulatory oversight so that the worst of the scams are prevented.
“I applaud the enthusiasm and the wellspring of innovation that comes from this democratised grassroots efforts to bring ownership down to the masses.”
Where Do You See The Future Of Enterprise Blockchain?
Devina Dutta sent in this question: Where do you see the future of enterprise blockchain?
“So the enterprise blockchain for those that are not familiar with it, tends to be associated with the idea that not just anyone can sign into the blockchain, but only a kind of a member….
“A version of the blockchain records are still distributed, it’s still peer-to-peer, but only amongst those that have been admitted into the club.
“I actually think that the permissions versus permissionless distinction will in fact fade in the coming years to being open, namely the ability to involve a wider audience and I think permission is simply going to get qualified in a way that, um, membership becomes more automatic.”
Prediction Is Difficult, Especially The Future
Dwayne Mithoe sent in this question: Where you think everything is all heading in the coming 10 years or so?
“Prediction is difficult, especially the future.” (Accredited to mathematician Niels Bohr)
- we need to understand that one of the simplest benefits of the blockchain is that we can improve transparency and integrity in existing corporations.
- we will see all sorts of situations that now required hideous amounts of time and effort to reconcile different accountings and different records and to reduce settlement down to zero
“Suppose I need to rent a car. I call up some rental car service and say I’m going to be in such an obsession, distant city two weeks from now and I make an arrangement to rent a car and they gave me a confirmation number.
“We don’t have any record of that and there’s really no recourse there. In other words, it’s a big company and their records against me as an individual and my little confirmation number, they hold all the cards and that’s, that can example of the problem of settlements for reconciliation between the records.
“Whereas if that confirmation number where blockchain based, it doesn’t matter if the rental car company is a million times larger than me, um, we both point to the same record and either the confirmation numbers there or it isn’t, it’s no, there’s no your word versus my word or my records are better than your records and therefore.”
3. cryptocurrencies are here to stay and if people think that the current problems are going to be permanent problems, they’re simply wrong
“Is bitcoin going to be the ultimate cryptocurrency? Maybe, but it needs to up its game.”
4. finally: the ability for participants in an ecosystem to (if they’re creating value for that system) to receive value in return
“LinkedIn was sold to Microsoft a couple of years ago for more than $26,000,000,000 in cash and I would hope that at the time of that sale that there were some LinkedIn contributors that looked around at each other and said: Wait a minute, we’re the ones that created all the value for LinkedIn. That is that $26 million dollars, where’s our share of that?”
Is Humanity on the Highway to Hell?
When asked about his relationship to spirit and the question of where humanity and the planet are headed, Scott happily assures us his outlook is always optimistic (glad about that), and nothing happens by chance. We need to engineer the outcome we are seeking, we need to be the goodwill creators of our future:
“To the extent that we can follow the golden rule – thinking about what’s in the best interest of our neighbours and how we can actually get there, we can build a better future on top of the blockchain. On the other hand, if we simply see the blockchain as yet another tool to gain an advantage over someone else or to somehow win at the expense of others, then it’s not going to help.”
“Cynics don’t contribute. Skeptics don’t build.”
JP Parker mentioned it in her speech: she is involved with social impact projects and she mentioned the word apocaloptimist (someone who knows it’s all going to s**t, but still thinks it will turn out ok.)
We as humanity really need to shake our tail feathers to save ourselves and the planet, and it’s not just going to happen by itself. We need to be thought and action-engineers every one of us to effect a saner and safer planetary future for ourselves and our children.
It’s was a varied and fascinating conversation with Scott: everything from the gargantuan world of crypto and blockchain, right through to spiritual questions about how we can help each other and serve each other as human beings on the planet.
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