There are certain polarizing topics in the cryptocurrency community: which of Bitcoin forks is the true Bitcoin, what consensus algorithms are really viable, what coins will dominate the markets of the future.
Blockstream’s Chief Security Officer and a seasoned game developer Samson Mow shared his perspective on these and other hot questions in the crypto-industry in a recent interview for 48show. We’ve picked and transcribed the most important bits from the conversation.
First Steps in Crypto
Max Keidun: What were you doing before you joined the crypto community? What is your background?
Samson Mow: Before Bitcoin, I was in the game industry. I’m still in the game industry. I have a game company that’s been operational for 8 years now. Yeah, my background is doing real-time strategy games, AAA titles, and stuff like that. I just kind of fell into Bitcoin because I took an interest in it as it was very unique.
When building online games, you’re building economies, but those economies are still largely tied to the game company. You’re managing it a lot. The more advanced MMO games hire economists to help them manage the economy. So, when I first learned about Bitcoin it was very very interesting because there’s this digital currency that’s not tied to any entity. It kind of lives on its own.
Max Keidun: I’ve read your recent interview where you mention that gaming and crypto are similar industries. Can you elaborate on that? Where’s the similarity between those two?
Samson Mow: In online games, there are economies. There are as well economies with all the crypto assets out there now. I also think there is a strong tendency for gamers to be early adopters of technology and they’re very familiar with things like digital currencies and with just being able to own something and attribute value to something digital.
So, I think it lends itself really well to cryptocurrencies and Bitcoin. It’s a natural transition. I think there is a lot of synergy about a crypto-asset being used in a game, instead of a centralized database system.
We’re building a game called Infinite Fleet. It’s going to have a Liquid-based asset, a pure utility token. We’re hoping that it can replace in-game currency. Like the World of Warcraft gold. We hope to see interesting player behaviors emerge from that.
Now you can do cool things like setting up a guild with a multi-sig wallet that’s controlled by a few players. In other games like EVE Online, they’re centrally issued and managed. There are these cases where people will infiltrate a guild, play as part of that guild for a year, and then steal all their money. That’s just because they don’t have something as trivial as multi-sig.
Max Keidun: Why did you actually join the gaming industry was it like the passion that you preserved from the early years or something like that?
Samson Mow: I actually got into the game industry because I was one of the top Starcraft players in Vancouver at the time. The guy at the game company Relic, who probably knew me from reputation, brought me in to start working on game balance. It’s just because I play a lot of games and I’m very competitive.
Max Keidun: Do you remember the point where you decided to start researching Bitcoin and getting deeper into Bitcoin and crypto?
Samson Mow: I read about it and got interested, but I was really busy at the time. I think I was still at Ubisoft and I was also doing a lot of business in Asia, launching games, and all that. I didn’t have time to really dive into it.
In 2014, a friend of mine was making an exchange and I was just reading in the news about what he was doing. He was raising money to expand the exchange called BTC China. That’s when my interest started ramping up a bit more. I actually tried to mine on my laptop and I didn’t get anything. It’s hard when you have a full-time job and want to get involved in something.
Max Keidun: You mentioned that you will be able to issue some tokens on the Liquid network and embed those into your game, Infinite Fleet. Can you tell us a bit more about it?
Samson Mow: Sure. We’ve been building this game, Infinite Fleet. It’s an MMO RTS. As a player, you’re building a fleet of spaceships in a persistent procedurally generated universe, you level up, and you’re fighting in a massive war. But the main purpose of Infinite Fleet is to use a lot of the tech that we’re building at Blockstream.
Earlier, we announced the Liquid Securities, a securities platform that’s built on top of Liquid. Liquid itself is a blockchain platform and we don’t really monetize it at all. It’s meant to be a federation that’s managing and governing itself. What we will do is build these products on top of it. Liquid Securities is one of the first ones and this is just a way to issue security tokens. So, Infinite Fleet is using that as well, and our game development company Pixelmatic is using that to raise capital.
We’re following what we call a “dual token model” to the firewall between the capital raised using the security token and the utility token in the game. The utility token isn’t going to be sold to anybody, it’s going to be generated from in-game events and we think it will accumulate some value over time, just like any game currency would. It’s really just taking a lot of tech that Blockstream is building and leveraging it in the marketplace.
Nature of Cryptocurrency
Max Keidun: In your opinion, what is cryptocurrency?
Samson Mow: It’s important to have these definitions because right now it is messy. You have this big bucket of things called cryptocurrencies and there are all sorts of things in there like Ripple or ICO tokens. But Bitcoin is the first cryptocurrency, the first of its kind. I think a cryptocurrency needs to be very reminiscent of what Bitcoin is. It should be a Proof-of-Work coin because there’s energy being consumed and it’s not just printed out of thin air.
Max Keidun: Not Proof-of-Stake?
Samson Mow: Not Proof-of-Stake. I’m not a fan of Proof-of-Stake, because there are a lot of issues with it that are so complex most people don’t understand them.
There are things like stake grinding, withholding your vote to manipulate the flow of token generation, there’s a problem of snowballing where people holding large chunks of tokens get more and more over time, and then there’s the whole issue of security as a whole, which Proof-of-Stake is not able to counter.
They like to say “well because everyone has a coin they’re incentivized to protect the network.” But what if someone else creates a Proof-of-Stake coin? They’re incentivized to use their capital to destroy your network, right?
And then there’s a whole issue of just perpetual energy or perpetual motion. People think that you can take away energy and not waste that energy. But the energy is what gives you security. If you really dig down and think about what Proof-of-Stake is, it doesn’t really function at the core level. It’s just an interesting concept with a lot of problems.
I think that a cryptocurrency should be a Proof-of-Stake coin, it should have a fair distribution, and it should be reasonably decentralized so that no one party can dictate exactly what happens with it. If that is your definition, a lot of coins just fall out of that. They’re just shit coins.
Max Keidun: So, what is Bitcoin for Samson Mow?
Samson Mow: If people ask me what Bitcoin is, I like to explain it as digital gold. It’s a simple enough explanation that people can easily understand because they know what gold is. It’s an asset, it’s mined, and there are direct analogies to Bitcoin there. I think Satoshi himself used a lot of analogies with precious metals when talking about Bitcoin in the early days.
That’s an easy mechanism for me to teach people about what Bitcoin is. But for me, personally, Bitcoin is a way to prevent an Orwellian future. It’s a way to stop surveillance capitalism and tightening restrictions on people’s personal freedom, privacy, and just well-being in general.
So, it does a lot. I think Bitcoin really does fix a lot of things. It’s apolitical money that no one nation-state or country or company can control. That’s very transformative.
Max Keidun: Will there be many coins coexisting in the future or will there be the only Bitcoin? Where are we heading?
Samson Mow: It’s hard to say. I think we will see a few coins coexisting at least for a hundred years into the future. Past that, it could just be all Bitcoin in the future. But that depends on how Bitcoin evolves and it’s hard to make changes in Bitcoin. It’s a design feature. It’s not supposed to be easy to change Bitcoin.
We don’t know the future and that’s why I think it’s okay to have other coins that are focused on a specific feature set. Bitcoin may absorb that feature set down the road or it may not.
Max Keidun: What is your opinion on Bitcoin forks like Bitcoin Gold and Bitcoin Cash, as well as forks in general?
Samson Mow: It’s important that people can do that. What I really dislike is fraudulent advertising around that and misleading people. If you want a fork because you don’t like the Bitcoin client or something else, you should go for it and make your own currency. The market can decide.
That’s the kind of the ethos behind Bitcoin: opt-in and opt-out if you don’t like it. The forks are fine and there’s nothing wrong with Bitcoin Cash, it’s just how it’s marketed to people. It’s just a coin, it’s a chain, and it’s a Proof-of-Work chain, so there’s nothing really bad about it inherently. It’s just that they’re lying to people and tricking people by saying “this is the real Bitcoin.”
Max Keidun: Speaking about Bitcoin Cash, there’s a video of you sitting next to Roger Ver on a panel or something like that. He’s saying something and you look like you don’t like it at all. What was the panel about?
Samson Mow: It was supposed to be a panel with a few people, but apparently that was just a trick to get me to agree to go. They’d always wanted to have a debate between me and Roger. I don’t even remember the context of the panel, it was probably about Bitcoin and scaling. The market had decided and Bitcoin Cash was less than 10% of Bitcoin, but Roger’s statement was something about dying babies and that was not fun sitting next to him for 30 minutes.
Max Keidun: What’s your opinion on Roger Ver?
Samson Mow: I think some people have this perception that he was a good guy early on and that he was doing a lot of things for Bitcoin. I actually think he was just a guy pumping his bag so all the time. And he just pumps different bags at different times, so when there was only Bitcoin, he pumped Bitcoin.
He bought ads and tried to get adoption, but was that for Bitcoin itself or was it for his own financial gain? I think it’s for his own financial gain.
Cryptocurrencies in China
Max Keidun: You mentioned working at an exchange. What particular exchange did you work for?
Samson Mow: BTCC or BTC China.
Max Keidun: It’s a Chinese exchange, as far as I understand, and at some point Chinese authorities banned Bitcoin. Some platforms closed. What was the reason behind that? Did Bitcoin become a threat to Chinese authorities or they just wanted to prepare the ground for their own digital currency?
Samson Mow: There’s a misconception that China banned Bitcoin. They didn’t actually
ban Bitcoin. The ownership of Bitcoin is still fine. They just prevented banks from dealing with exchanges. They didn’t want there to be crypto to Fiat exchanges anymore. So, the exchanges had to wind down operations and a lot of them have since moved overseas.
As for the rationale, I think it could be many things. One is that it’s a way to bypass capital controls. But ownership of Bitcoin is not banned. I can’t really say why, but my guess is that it’s to do with capital controls.
Max Keidun: You mentioned specifically that you want to talk about Lightning Network. Why?
Samson Mow: I think Lightning is a very important piece of scaling technology that will allow us to get Bitcoin into the hands of billions of people. If everything is done on-chain, you’re limited even with things like a side chain. There is still some limit because everything is being broadcast to the network and every transaction has to take up space in a block, whereas with lightning you’re offloading a lot of that because you’re only talking to who you’re transacting with.
I think we had a benchmarking test done by Dr. Christian Decker. He found that a single Lightning channel has a theoretical capacity of 500 transactions a second. All these other blockchain projects are out there advertising 10 thousand transactions per second, while none of that really matters because Bitcoin is a settlement network.
If you want a retail network, this transaction per second metric really does matter. Still, Lightning will dwarf any metric you can reach on a blockchain because it’s channel-based. I think right now with the number of channels we have on the network, if you just take 250 transactions per second per channel as a baseline, you can have about 18 million theoretical transactions a second. What that means is you’ve actually outpaced even centralized systems like Visa, AliPay, or WeChat Pay, which I think top out at 70 or 80 thousand transactions a second.
What you have now is this paradigm shift where decentralized systems like Bitcoin with Lightning have exceeded all centralized database systems in existence and that is pretty big.
Having Bitcoin transacted over Lightning jump-starts the “circular economy.” It means that people can now earn Bitcoin and spend it in a cycle. Instead of getting paid at the end of the month or after two weeks, you can get paid at the end of the day. You then go and buy dinner or watch a movie and go back to work to earn more money and spend it. Lightning enables that. That’s one of the keys to mass adoption and it’s gotta be frictionless and easy.
Max Keidun: People say that Lightning will take profits from miners. Do you agree with that?
Samson Mow: Not really, but it’s a valid concern. I know a lot of miners and a lot of them do think this is going to take away their revenue, as people are going to transact off-chain instead of on-chain.
I tell them it’s more about growing the pie. What Lightning does is it makes Bitcoin have more utility and Lightning actually needs on-chain transactions. You cannot have a Lightning network with no on-chain transactions. The way to think about it is that Lightning is aggregating transactions, but it’s also aggregating the fees. So, the way I would describe it is Lightning users are the VIP customers of the miners. They’re incentivized to pay more because they want to make sure that they won’t time out before they get a confirmation.
Revealing Satoshi and Bitcoin Price Predictions
Max Keidun: Just a few final questions left. So, who is Satoshi Nakamoto?
Samson Mow: I think it doesn’t matter and I don’t think Satoshi is anybody that we know of in this space. Some people say Adam Back is Satoshi, some people say Nick Szabo is Satoshi, or Hal Finney is. I don’t think Satoshi is a person that’s been around or is around today. It’s probably someone else and they’re very smart. It’s not somebody that you can pick up and put in a chair and interview.
Max Keidun: Definitely, but if you would have an opportunity to figure out who they are, would you do it?
Samson Mow: No, because I don’t see any benefit in it. It would be bad for them, bad for their OPSEC, and it would cause a lot more problems. People may assume that they still have access to their keys and target them. There are many bad situations that can happen if Satoshi actually surfaced today. Although, Satoshi is definitely not Craig Wright!
Max Keidun: We are all Satoshi except for Craig Wright. Now, as a final question, I ask everyone to make a Bitcoin price prediction. Just pick the date in the future, name the price, and support your statement.
Samson Mow: Okay, let’s see. I used to make price predictions and I was pretty accurate up until the big bull run. I thought we would recover and go up to $30 thousand. I made that mistake and I generally try to predict further out now. I correctly predicted $3 thousand and I predicted $7 thousand in the past, which was lucky for me I guess. I think in 5 years we’ll definitely be at $100 thousand and within 10 years we’ll be somewhere around $500 thousand, if not more.