Too high Appreciation of Bitcoin? : Interview with Tadge Dryja from MIT DCI ②

Thaddeus Dryja (Tadge) is the creator and the co-author of the Lightning Network who is leading research on scaling and interoperability of cryptocurrencies and Smart contracts at DCI (Digital Currency Initiative) as an open-source developer and research scientist. Tadge is also working with students and other researchers at Massachusetts Institute of Technology (MIT). He studied computer engineering at Carnegie Mellon University and taught at Mie University in Japan before discovering Bitcoin and Blockchain technology, and working to improve the Bitcoin Network. Before co-founding Lightning Labs, he was CTO of a Bitcoin smart contract startup named Mirror based in San Francisco, where he led exploration of the limitations and possibilities of new decentralized financial systems.

Tadge Dryja

Interview Date :9th June 2020

Bitcoin Core Developers Political Standpoint

If you look on Twitter or Reddit and other such platforms, you get the impression that Bitcoin people have guns or they only eat meats, and that all are only libertarians. Maybe there are people like that, but I have not met them. The developers who I work with do not fit that description at all, and quite honestly, we don’t really talk about politics or ideologies. The IRC channels are all about the Bitcoin core development, and if you talk about politics and ideologies, they will just kick out from there.

Sometimes things get a little heated, and some developers get into arguments that lead to rethinking what the priorities are to make Bitcoin better. This can stir up some feelings about political ideologies. It gets interesting when we talk about the privacy part of it because most people would say we need to have very good privacy for the currency. Nevertheless, there always are those people who comment “with stronger privacy, we will end the federal reserve”. However, generally it is pretty business-like and most people agree that we want Bitcoin to be secure, and easy to use.

Too high Appreciation of Bitcoin?

In my opinion, the current monetary system sort of works. People complain about inflation, but inflation is not really that high. I don’t think that it is a huge problem at the moment. Other people say that it is not fair, and I can understand it because I experienced it first-hand. Before moving back from Japan to America, and I had saved quite an amount of money. However, sending money between countries is very hard and pretty expensive. So, I thought that I would do that as the last thing right before moving back to America. But in 2013, the head of the Bank of Japan wanted to change the exchange rate because there was a very high appreciation of the yen in 2012. For me the appreciation of the yen was good, I liked it everything was cheaper and my salary is worth more and I was happy, but I people didn’t like the high appreciation of Yen in Japan. So, the exchange rate went from 80 yen to 100 yen to 1 dollar, and it happened very fast. That was like the loss of thousands of dollars and that made me realize that only a couple of people get to decide how much our money is going to be worth. That did make me think about Bitcoin. We all know that Bitcoin has very high volatility and goes up and down way more than the fiat currencies in countries the USA or Japan, but at least it is not one guy who gets to decide that would be the argument here.

Will Cash or Bitcoin survive?

Especially working at the DCI, most of the people there are very nice people and they are trying to make the system work for people. I don’t think that Bitcoin is going to take over the world and destroy the cash system, but I do think that it is a cool thing to have for a backup and somewhat could be compromised. You are not sure if the monetary system will continue to work, but you don’t know if Bitcoin will work either. Maybe the bank will die so you should have some Bitcoin, or maybe Bitcoin will die so you should have some money in the bank. 

Cash is pretty cool if you think about that 100-dollar bill is worth something and has value, but I think many people who like Bitcoin tend to think that the FED is bad because there is all this inflation, or because they are printing money with nothing backing up its value. That is true and there is inflation, so you don’t want to hold a lot of cash as it can go down in value. However, it’s not like it’s hurting people and the inflation rate is a few percent a year.

If Bitcoin ends up working, the transactions are going to be much better, but will it be cheaper? The goal of Bitcoin is to make things more efficient. Bitcoin works well and maybe we can get rid of the dollar and just say “we don’t need the financial banks and their old technology”. We could use all this new technology and make things much more efficient and that will end up being cheaper one day. But we are not there yet and Bitcoin is still pretty hard to use compared to physical cash.

I can understand if you would be in Argentina where the currency is completely mismanaged. You may have experienced a huge loss of value in the currency of that country thinking that you strived and worked for years for money that is worth nothing. I can understand why people get really angry. However, that is not the case in for example Japan or America. It has not been that extreme.

Difference between Developers and Enthusiasts

Bitcoin is not perfect. I have Bitcoin, and I have seen exchange rates fluctuate. You have to think about “what if Bitcoin stops working?”. That is possible, and this is exactly the difference between many people who are enthusiastic about Bitcoin and the ones who are developing and working on it every day. For us who do this every day, we see how many problems there are with Bitcoin and think “how are we going to make sure that this works?!” If you are working on Bitcoin, it is because you enjoy it. You are working every day and your life is your work on Bitcoin. At the same time, there is a lot of issues and difficult problems with it as well. What if it breaks or something bad happens? It’s not 100% that and that is the reality of it. Cory Fields is someone I work with, and he did a talk a few months ago where he states that “Everything is broken! The compilers and the computers, and you cannot trust anything anymore” etc. So, how do we make Bitcoin secure is what we need to think about, improve, and work on and make it work.

No Industrial Change over the Years

The industry may have become a billion-dollar industry, but the industry in itself has not changed in that you don’t get to make a ton of money working on it. It still is an open-source project, and there are still people volunteering. Fortunately, there are several sources of funding for researchers who are working on Bitcoin core development. For example, Chain Code labs in New York funds several Bitcoin core developers. Blockstream, MIT DCI, Square Crypto who has most people working on the lightning networks, Digital garage in Tokyo, and so many other companies are contributing to engineering resources and funding. BITMEX has been great as well and there are many more. In 2011 I never thought that you can work for MIT Digital Currency Initiative and you will get a good salary for working on this open-source project. It is very rare to get a good job like this where you can work on open-source software as open source is generally hard to fund.

Developers Earnings

You might think that there are companies that fund developers but it’s not connected to billions of dollars. However, they are not making millions of dollars but rather they are making generally below market rates. For example, Michael Ford who is more famously known as “Fanquake” from Australia got a contract with BITMEX to develop and work on Bitcoin core development for 100 000 dollars a year, and that’s amazing. Nevertheless, just to be fair, Fanquake would probably make more if he would work at a tech company. If you work a little harder you can definitely make more.

 What did happen was the ICOs making millions and millions of dollars, but that is disconnected from core developers and their work. We were watching the ICO movement and where like “what is this?! what does that have anything to do with digital currency”

You look at it and for us developers, it does not look like it has much to do with Bitcoin.

What about the Altcoins?

It’s true that the new coins coming up in the market, are not standing out or have much potential but there are some that I think are interesting. For example, Zcash was one altcoin that was created after Bitcoin. Even if you don’t think Zcash is a good idea, they are funding research, writing papers, and they are advancing the art of cryptography. So, even if Zcash completely disappears or collapses, we still have the software and the papers they have researched and created along with the new mathematics they have discovered, and so it’s hard to complain about that. MimbleWimble coin or Monero are other examples that we don’t know about specifically and there is a lot of speculation around it, but there are new ideas. 

It’s great to see these new ideas working. I am not following them very closely but there is research happening in those areas. I think a lot of Bitcoin developers disagree with a lot of the choices Ethereum developers are doing, but I still pay attention to it. I still read and look at the problems Ethereum developers have with their system. So, it makes us think about “how can we avoid those kinds of problems”. It sometimes becomes a tribal rivalry dispute, but I don’t think it needs to become like that. It does make sense that we take a look at their issues and developments. Nevertheless, one has to be careful and check as there are plenty of coins out there where there is no research happening.

Interviewer , Editor : Lina Kamada



The Article published on this our Homepage are only for the purpose of providing information. This is not intended as a solicitation for cryptocurrency trading. Also, this article is the author’s personal opinions, and this does not represent opinion for the Company BTCBOX co.,Ltd.