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The present and future of cryptocurrency payment networks

Inteview with Nicolas Dorier, co-founder of METACO SA
Renowned developer and METACO co-founder, Nicolas Dorier, shares his views about the present and future of cryptocurrency payment networks.

Hi Nicolas, could you give a glimpse of the current payment network (blockchain based) landscape?

It is crowded. New chains and tokens appear frequently — each claiming its own merits — and making proper due diligence on all of them is time consuming and not necessarily worthwhile. Moreover, many altcoins are forks of Bitcoin and have very similar features.

Among new networks, however, Liquid by Blockstream — a consortium public chain — did caught my attention. Its native token is called L-BTC (or Liquid BTC) and any node [device with IP address] can verify that for each ‘Liquid’ BTC there is an equivalent amount pegged [frozen] on the Bitcoin chain. This prevents the consortium from inflating the token. Also, Liquid does not rely on a fully trustless model like Bitcoin but on the assumption that the majority of corporations in the consortium (15 companies as of today) are honest. This allows to improve the user experience by lowering the block confirmation time, enabling the generation of new native assets (anybody can issue their own token on this network), guaranteeing the confidentiality of transactions (actors can hide the traded amounts) and users (actors do not need to disclose they use Liquid Bitcoin or any other token). Moreover, anybody can join or trade on this chain without permission.

You decided to join the Bitcoin community way before its outburst in 2017. Why?

I discovered Bitcoin following MT Gox crash in 2014. $470 million had been lost and still the Bitcoin network was up and running. I wanted to find out what made Bitcoin so resilient. I researched and questioned not only the technical aspects but the reason for its creation, which brought me to Austrian economics and libertarian literature. It was easy: Bitcoin’s vision, promise and approach were very valid.

Moreover, I had experienced for myself the struggles to find financing and banking support in previous entrepreneurial projects. I understood the Bitcoin system would have prevented that strain and it didn’t take long for me to become a financial sovereignty advocate. Since then, I am coding to make this vision happen.

During these years, you became a prolific bitcoin developer. If we ask you about how Bitcoin compares to other networks, would you try to convince us it is the best network?

There are many networks, with different purposes and technical specifications, which are currently in development and are valid. Everyone needs to do its due diligence to understand the purpose, value, technical ins and outs as well as the values of those behind it. Only by deep-diving one gets to differentiate the really valuable projects.

For me, Bitcoin is the sole network which can achieve the financial sovereignty I strive for. Both, due to its design and the community working around it. Hence I don’t spend time judging and comparing against other networks.

Bitcoin relies on Proof-of-Work (PoW) consensus protocol. However, many consider it ‘wasteful’ and believe Proof-of-Stake (PoS) will widespread. Do you agree?

Before tackling on the ‘wasteful’ qualifier, it would be important to understand that the concept and objectives of PoS and PoW are radically different. PoS is a consensus protocol which inherently drives centralization. That, on its own, conflicts with the very core of Bitcoin’s ‘decentralized’ principles. PoW is simplicity and does not require deep research to prove it can’t be centralized. Still, the two protocols are well thought out and a combination of both could be envisionable for other networks, which is why there is on-going research, notably within the Ethereum community.

Bitcoin owes its admirable tamper-proof to PoW and qualifying it as energy-wasteful is untrue and biased. Yes, PoW requires energy but 30% is already sourced from renewables and I am confident Bitcoin will not only be a booster for these alternative technologies but reshape the entire energy industry. Additionally, mining makes use of power produced which would otherwise be unexploited (following the non-storage principle); mining is location independent, therefore, facilities may be strategically located to optimize the production and transport costs of electricity. The future is powered by electricity and my expectation is that new, more sustainable and efficient ways to generate electricity will make power more accessible and cheaper, making the ‘wasteful’ claim prove wrong.

Where do you see Bitcoin in 10 years? Which advice would you give to the developers and investors of today?

Beyond my trust on it, Bitcoin seems to have the right ingredients to widespread and enjoy a strong Lindy effect. I am sure it will be here in 10 years and be part of the definition of ‘normal’ for the children and teens of today. Regulations will evolve. Price volatility too. The blockchain technologies, too; as well as the geographical distribution of mining. However, its essence will remain and drive a stronger economic system.

Advice to developers? 2 of them! ‘Don’t be a Blockchain developer, be a Bitcoin developer’ and ‘Don’t spend your whole time researching, start using and coding’. Advice to investors? ‘Speculation is lot’s of fun. Just don’t buy more US dollar than you can afford to lose’