Syscoin blockchain 3.0 protocol with Sebastian Schepis and Dan Wasyluk

0:00hey everybody we're live on the crypto coin show and blockchain interviews on this episode of blockchain interviews we have sebastian and dan from cisco and this project I know has been around for a long time I'm really excited to hear the story and what's coming up next so if you would Sebastian just start us off with how did Cisco in start when did it start and why did you

0:24guys start it absolutely so hi everybody my name is sebastian schepis and i'm the founder of this is going project for me this journey really began in 2011 when I saw an article on Wired about the rise and fall of Bitcoin and here was this article talking about this cryptocurrency this digital currency that had been around for a while but had gone up to something like 34 dollars in

0:51value and crashed out back down to two dollars and basically the article was talking about how this currency was essentially a failure and how it was essentially done for but as I started reading about the technology itself as I started finding out how how Bitcoin actually worked I became more and more excited about it I saw how how Satoshi had combined cryptography and really

1:19novel concepts like proof of work to be to create something that I think was what I thought was really amazing and it was really gonna go places so in early 2012 I made my first investment I think I bought something like five hundred dollars worth of Bitcoin at the time and I think I paid something like two dollars and 15 cents or for that first purchase and as as time went on I got

1:43really more and more excited about the potential for this technology it really became very clear to me that if Bitcoin was a distributed ledger of balances it was also essentially distributed ledger of data state and that meant that it was essentially a distributed state machine and I could use a decentralized network like this to do a whole lot more than

2:04just be just then just shuttle around a balance from one place to another so I started looking at various projects I got really interested in named coin because they were using the blockchain for a very novel way to essentially store domain name information and I kind of started extrapolating from there if a blockchain can store domain names then it can also

2:27store a whole lot more than that it can store your identity it could store products for sale it could store certificates where people could essentially ledger information about themselves or information that they own and he could also be used for things like messaging and escrow and I so I started really exploring the technology I think I spent about six months

2:52basically just tearing apart every codebase I could find so bitcoin and litecoin namecoin peercoin you name them I looked through them and so I spent about six months with a headache basically and overheated just because it was so intense to look at all this stuff and learn about it and I very quickly came to a place where I really got what I wanted to do Satoshi himself talked

3:15about actually having marketplaces built in directly to stew to Bitcoin so for me it was kind of a really natural progression I came to kind of a core set of services that I felt would be able to be leveraged in all kinds of situation with decentralized marketplaces and essentially those services were aliases so an alias is basically a way for you to create an identity on this disk coin

3:41blockchain not only can you ledger your identity on the blockchain but you can also get a address that makes a lot more sense for somebody else to remember so for example instead of having a long Bitcoin like address that there's no way you could possibly remember it you could for example send money to Sebastian dot Chiapas on the Cisco Network and so that

4:04was kind of the first service and sort of a linchpin of everything else and the next big one I think the one that we really consider a flagship service is what we call sis coin offers and Cisco and offers are a way for you to essentially list any item on the Cisco network for sale whether that item is a physical product whether it's a digital good or whether it's service you can use

4:26this coin offers to essentially ledger that to the blockchain and allow other people to be able to find it and and I paired that particular service with digital certificates so one of the things I wanted to do is to be able to essentially record things like licenses or certificates or even for the marketplace things like game codes for sale right and so we also linked

4:51certificates to offers and we also implemented us another service that was essentially a messaging service and so that was the start of Bitcoin we launched excuse me service this coin that we launched this point in August 2018 in one of the first i SEOs really though that happened out there way before Wall Street or Bay Street even you when an ICO was we we participated in one so we

5:18did that on August 28 2014 and we raised 1,500 Bitcoin in that initial ICO and we have been working on sis coin ever since this coin has gone through several iterations now of the of how the services are implemented but it's at their core the technology remains the same sis cone is a platform to conduct decentralized ecommerce that offers a

5:46set of services that can be combined and recombined in novel ways to be able to create all kinds of things everything from things like an up work like site where people are listing listing jobs that they might want to they might want to fill or something as as kind of simple and straightforward as an eBay or an Amazon like network can be built with Cisco Wow

6:11what that's definitely stuff involved in a decentralized marketplace I could see you know doing your IC o—- back in 2014 and here we are now 2018 and I'm sure there's still many more things to be developed and to to flesh out so what are some of the innovative developments that you guys have come up with so far on the Cisco and platform sure so I think the latest innovation that we've

6:37come up with this something called Z de and Z dag stands for zero confirmation directed as click graph and it's essentially a technology that we're using in our assets service so this coin 3.0 is going to include a new service called assets that will allow you to essentially create ERC 20 like tokens on the Cisco network the technology the Z direct technology is paired with assets to be

7:00able to allow a very high degree of certainty that your coins aren't being double spent within a block so it's zero confirmation and allows you to essentially transact a chain of assets ends in such a way such that even before the next block comes along you have a very high certainty that those coins aren't being double spaced so that's kind of our our latest innovation and

7:26obviously as I said the six point asset service is going to be live soon and that will allow people to create all kinds of different types of tokens so the asset service will allow you to create fungible tokens just like the kind of basic ERC 20 spec but you'll also have the ability to create non-flexible tokens ie tokens that can't be divided up using

7:47Cisco assets and you'll also be able to essentially record on what you'll essentially be able to mint type mint tokens that are linked to unique serial numbers so think of like being able to create a token that represents a gold bar right so you might want to create a hundred tokens that that that indicate partial ownership in that gold bar and with Cisco assets you'll be able to

8:15actually specify the actual serial number of that particular gold bar thus you'll be able to link unique asset minting to actual unique things out there in the world that's opening up all kinds of different use cases definitely I could see how verifiable digital assets and digital identities are going to become super important moving forward as more regulation and

8:41legislation comes in and wants to actually incorporate cryptocurrency in the blockchain industry into real world economies so I could see that's going to be existential so that's really awesome that you guys are working on that maybe for the non-technical users you could explain a little bit about we could go back to your zx0 confirmations and what what is the real-world benefit

9:07that user will see like say for instance there is a marketplace and you receive coins and then there's no confirmations are you able to send those quickly or what is what are the benefit to that you can turn around and send send them right away essentially the reason that we developed Z Doug is for point of sale we have a couple of partners that we've

9:30been talking to for a while that really needed technology that will allow blockchain to be used in point-of-sale and currently it's just really hard to do I mean if you're using a blockchain with a long confirmation time like Bitcoin no one's gonna wait for 10 minutes while they're there coffee transaction is it's being confirmed likewise even with things like like

9:50litecoin that have you know two and a half minute block times it's still not fast enough so what we really needed to do was was find a way to solve that problem in a way that wasn't going to necessarily have to make us change the the block time that we currently have we didn't feel that that was the right solution because reducing tough block time will just increase orphans and

10:13that's text speak or basically creating a bunch of stuff on the network that really isn't necessary or helpful to to the functioning of the network interesting so for our crypto viewers in a nutshell could you explain the difference in the block time the confirmation speed and the transaction cost on this coin compared to Bitcoin and aetherium and the major transaction

10:38networks absolutely so so a check the transaction speeds or try see confirmation times on something like Bitcoin are gonna take about 10 minutes for you to wait for another block to come in and also fees on the Bitcoin network are going to be are going to be variable whereas the way that we've set up fees on on asset transactions is fees there are static so you have you can

11:03really determine in in a very deterministic way what you're going to end up paying on the Cisco or if you're using assets which is something that's very difficult to do currently on Bitcoin and also on the etherium Network aetherium is fantastic don't get me wrong I think it's a phenomenal technology and it's something that I invested in very early in fact

11:24several of us here really love aetherium but there are some issues with it relative to things like scalability as well as as well as transaction fees interesting and another thing to note about this coin is I heard that you guys are using a proof of stake model or you're going to be using a proof of stake model and there's involved with that masternodes can you elaborate on

11:49what cisco is doing with that no we're actually not moving to proof of stake right now we have discussed it in the past but right now our proof of work model is working nicely we're proof of state comes in is that we have the ability to create asset classes that essentially pay out interest as you hold them and so I suppose that would be closest to proof of stake in that you

12:11can in that you can essentially create an asset class that has a maximum amount of tokens that will ever be minted and then from there if you issue those tokens to people as they hold they'll be able to actually redeem an interest rate in essence so this is good if you want to distribute some initial amount of tokens and then encourage folks to hold

12:33those tokens in order to earn interest very interesting so as a regular user I would be able to earn interest by doing some kind of master node tote with with this coin not even all you have to do is fold those tokens in you in your wallet and every once in a while you can redeem your interest using theirs there's a command on this disk or network that will

12:57essentially allow you to redeem whatever collected interest has is there for you to grab right so the interest isn't issued automatically on every block but it is issued when you ask for it now to talk a little bit about masternodes yes this coin 3.0 is definitely going to include master notes right so in a way one once we do that on the Cisco network

13:20there'll be two ways for you to be able to to earn new cysts you can either mine right which is out of the reach for most people unless they have Bitcoin Bitcoin mining farms now because this coin is merge mined with bitcoins so anyone that is mining Bitcoin can essentially earn this coin along the way now masternodes kind of introduced a proof of stake model in that if you

13:46stand up a master node you'll have to bond it with a certain amount of cysts currently that bond is a hundred thousand six but as you run that master node and provide services to the Cisco network you will be paid out every block with a reward so essentially the way that that works is that miners generate the blocks however they share the rewards with exists with running master

14:12notes so as you run your master node over time you'll start to see your balance increase there because you'll be receiving sis so it's kind of a nice model in that in that we use proof of work to secure our network in and consequently have really high hat cache power or something like a quarter or the or a fifth of bitcoins current hash power and so any kind of any kind of

14:36attacks on the system or network are going to be really difficult to perform if you're trying to come at us with a hash power to do it but on the other hand you'll also have you also have a way to earn by staking your cysteine by standing up a master node so as I said right now to to bond a master node will cost you a hundred thousand six however when we launched this coin 3.0 there

15:01will be some services that will launch along with that to allow you to essentially become a partial participant in a master node so if you only got a few thousand sis but you still want to stake that sis on a master node you'll be able to use one of these services to yourself wow that's super exciting because I know a lot of people me included when I was looking back at when

15:23– was doing some kind of master node thing I wanted to stake it and have a master node but I just couldn't have enough of the coins themselves and to know that you're getting rewards with Cisco even if you don't have masternode is very exciting so I'm really glad to hear that if I could throw a question at Dan's way where do you guys see the industry going in this

15:48year and where does this coin fit into that and what do you see in terms of the adoption in the short term here I think the real challenge is that the industry has this year is getting over some of the speed and scalability issues that we're currently focused on internally not only in this next iteration of sus cuentas point 3 but also in a future iteration that we're trying to release

16:12later this year what we're finding is storing all this data on the blockchain directly is just not something that is that is feasible long term we know that the theoria ms trying a sharding approach long term if if things go the current way that we're talking about we think that we have some better solutions planned and we're looking forward to sharing those later this year in the

16:37short term we think that what we have with Z dag is going to really help with the the speed problem and so once we release this going through really moving on to focusing on the scalability problem awesome and at what time roughly are we to expect this Cisco in three so right now we're targeting at this point three for April 30th of this year so just about two weeks less than two weeks

17:02now very very exciting and for the viewers if how can they get further involved in Syst coin use the applications I believe it's called block market and get involved with the community so there are a few ways right now I think the best way is probably through our slack channel which is Cisco at slack org in the very near term we're looking on setting up a a better way for

17:29the community to start participating with the Cisco end protocol and contributing to it in a way that hasn't really been enabled over the past four years and so we're really trying to grow the ecosystem through enabling more developers with the protocol in in the short term now I think that slack is probably one of the ways and then also our reddit channel is

17:51also very active so read reddit calm slash are slash assist going and that's where also they'll find out more information around those new vehicles we're working on to enable further contribution great great so I'm looking forward to following up with both of you guys when Cisco point three is released and we'll see how that goes so we'll look for that in the coming weeks and thank

18:18you guys for both being here Sebastian and Dan from the Cisco team and I'll catch you guys in a few weeks thank you very much thanks for having that our pleasure thanks again