Before the days of Bitcoin and cryptocurrency, there were individuals pioneering what would one day become the blockchain. These scientists were simply trying to best-secure data and the internet as a whole and created a better means in doing so with their work. These pioneers have set the groundwork for what has now evolved into what we know of as blockchain. No individual has arguably had a bigger impact on this evolution than Dr. Scott Stornetta. Stornetta recently stepped into the public eye to speak about his comparison of Bitcoin (BTC) and Electroneum (ETN).
When Satoshi Nakamoto wrote the Bitcoin whitepaper in light of the 2008 economic crisis, no other individual’s work was referenced in the notorious document as much as Dr. Scott Stornetta’s. Since Stornetta’s perspective held such great weight in the eyes of the founder of Bitcoin, many in the crypto community listen closely to his opinions. This globally renowned scientist and thought leader has said he “has spent longer thinking about blockchain than anyone else on the planet. I have a really long-term perspective on this technology.”
Stornetta sat down recently with the founder and CEO of Electroneum (ETN), Richard Ells. The CEO was surprised when he was met with many compliments on his project by the blockchain sage. Stornetta said he understood what Electroneum was aiming to achieve with their underlying technology and said “I’m happy to recognize that you have grasped the breadth of the design space. Also, that you are flexible enough to be still exploring how to get the balance of the mix. And that’s something that I’m able to encourage wholeheartedly.”
Dr. Scott spent a lot of time going into his praise for Electroneum and the foundation’s nimble approach. He drew attention to the fact that many cryptocurrency projects have historically rejected the notion of working towards regulatory compliance, adding value and usability for their users, and balancing the creation of combining features of decentralization and centralization to make their cryptocurrencies more secure and eco-friendly, but Electronium is doing just the opposite to accommodate these market needs. Further, Stornetta mentioned that “Electroneum has a long-term ambition for doing good and doing well… has a pragmatic approach to embracing existing players, including government and regulatory players, to find a way to co-exist and… have a practical way to make this of immediate value to the end-user. These three things…mare the essence of successful exploration in the… broader blockchain space.”
Richard Ells went into discussing Electroneum’s project called “GigFair,” which is similar to the popular freelance app Fiverr with the exception that GigFair unlocks the global digital economy without a bank involved by paying providers of goods and services in Electroneum (ETN) with very low fees. Stornetta praised the nobility of this value-added service for their end-users (many in developing countries) and said “the fact that you have users that can, in a very near term, see the ability to realise some value, makes your project stand out from the rest. Moreover, the fact that your system foundationally is sustainable for the long term also means your project is setting itself apart from so many others.”
In speaking about a comparison between Bitcoin and Electroneum, Dr. Scott said “I think Bitcoin was a brilliant piece of work, but it was sort of a solution looking for a problem.” Electroneum is “piggy-backing an abstract unit of currency onto ETN directly and into something that has intrinsic value, which in combination with the idea of a GigFair ecosystem and which provides a question for which your cryptocurrency is the answer.” Further, Stornetta said “there are two things that to me seems significant: One is the notion of putting it in parallel a gig economy with a payment system for it; and two, the idea of by putting it on a mobile device for which people already have to pay, and the fact that you can trade airtime. Airtime is sort of, as I have said, a self-embedded currency that doesn’t have [to] be converted into anything else in order to be useful for trading and sharing and exchanging.”
Photo by Fancycrave.com
Stornetta had a lot to say about Electroneum. He could only think of one thing relating to Electroneum and that was energy. “In other words, your ETN unit is currency. Energy is also a currency in terms of kilowatt-hours,” he explained. “People need energy, and they could produce energy conceivably. And so they could trade something that already has intrinsic value, and so by trading airtime, you’re already trading something with intrinsic value.”
In regards to the politics behind hash power and network security, Scott Stornetta agreed with the Electroneum team on their stance. “I think the notion is fundamentally an incorrect one that the more hash power makes the underlying records more secure,” Stornetta said. “Only in a very narrow sense is that true, but as a fundamental thesis and driver, this leads to a very inefficient conclusion.” Ells and his Head of Blockchain, Chris Harrison, went into detail on Electroneum’s proprietary Moderated Blockchain, which is enabled by their Proof of Responsibility (PoR) protocol which they told Stornetta has made Electroneum (ETN) insusceptible to 51% attacks; making the crypto the most secure in existence and enables them to cherry pick internationally recognized non-governmental organizations (NGOs) as trusted miners who are helping to break cycles of poverty in the developing world.
Photo by Kevin Ku
Stornetta’s response to Electroneum’s novel approach: “I think it’s really important and so I want to underscore my agreement with something that you said. That is what it proves that the integrity of the record is the number of non-aligned entities mining the blocks [and] that’s really fundamental because trusting the record is ultimately not a technical problem, but a social engineering problem. The more disparate unaligned parties that hold a copy of the record, the more the trustworthiness of the record at a social and cryptographic scale…so I just think that’s a very, very valuable insight.”
As a thought-leader and founder of blockchain; a technology with its foundation built around the notion of decentralization, Ells and his team were surprised when Stornetta agreed wholeheartedly with Electroneum’s move to moderate centralization to ensure solid security and regulatory certainty. He further applauded the fact that they were the first crypto ever to become fully KYC/AML compliant. Stornetta’s Yugen Partners feels that “the ultimate solutions are somewhat hybrid between permissioned and permissionless,” which is exactly what Electroneum’s Moderated Blockchain is. But equally importantly, as a strategic move, we think that people that are coming in on the permissioned side will have a better path towards getting to that optimal hybrid balance than people coming in here on the permissionless side [and] Electroneum’s regulatory compliance and the hope that ultimately those regulatory concerns can be relaxed is a perfect illustration of our sense that starting out permissioned with a goal to move to what amounts to a hybrid between permissioned and permissionless. This is simply a better tactical starting point.”
The takeaway from Stornetta was that he felt Electroneum is one of the few cryptocurrencies adding value to the users and providing sustainability. Further, there are many projects that have failed trying to achieve one or both of these critical objectives. These words come in light of Electroneum’s proof of concept in South Africa, to testing their mobile phone top-ups in Brazil for thousands of ETN users. Electroneum has stated this is only the start of many more developments to be announced in the coming months that will help all cryptocurrencies move towards the ultimate goal of mainstream adoption. What do you think about Stornetta’s take? Please share with me on twitter @MarcusHenryHODL.
Marcus Henry is an American Journalist with over 11 years working in the tech industry. He has been actively involved in the crypto community for the past three years and currently works out of Austin, Texas. He covers breaking news, writes perspective pieces and reflections, and conducts interviews with industry professionals and community members. Follow Marcus Henry on Twitter- @MarcusHenryHODL
Disclaimer: The information above does not constitute investment, financial, trading or any other sort of advice and you should not treat any of my content as such. I do not recommend the purchase, sale, or holding of any cryptocurrency or other product and nothing I write about should be deemed as an offer to purchase, sell, or hold a cryptocurrency or other product or service. Please do your own research and consult a certified financial professional before making any investment decision.