Is the year 2011. Another day at PC & Mac Wizard Service ( a Computer repair & IT support company I owned, for 10 years and sold in 2015). I’m approached by a customer who was picking up his computer. “Hey, Joel do you think you could build me a few custom computers with powerful video cards?” I answered, “Sure, I can.” then I asked “Are you going to use them for gaming?” the customer said “No, I’m going to use them to mine Litecoin” I had never heard of Litecoin, so I paused my work to listen.
This was the first time I had ever heard of crypto. I was quite disappointed at myself for not knowing about it sooner. I was always in constant research. I had dealt with company databases, cryptography, p2p, and app development, but I had never seen them being combined with financials, via p2p in this particular way. For some reason, this crypto stuff had passed me by. Soon enough I was building the rigs for my customer and he was so excited to take them to mine. At the same time, I was also excited and I dove deep into a frenzy of cryptocurrency research, among them the top one Bitcoin.
My journey began by purchasing Bitcoin miners from a company (Butterfly Labs). It was not a straight forward buy. Unfortunately, there was a waiting period after placing the deposit. At the time many were complaining about long periods of wait time before receiving their rigs, so I just dove into Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi’s whitepaper, and waited. Right after receiving the miners, I was able to set them up and began solo mining for my first .00012 of a bitcoin. I was up and running fairly quickly. I had paid around $4k for my rigs, but when I saw how much time it would take to possibly mine a full bitcoin, it quickly became clear that I would need a hell of a lot more money. I also found myself wanting to end my day’s work, to get to more bitcoin research. Seeing how expensive it was to get involved in bitcoin mining, I began to get a bit concerned that it was going to be difficult for many others to be involved too. Although I had seen USB miners, they were just not powerful enough. Quickly, the amount of electricity that I began to pull from my miners, was raising my electricity costs and since the difficulty kept increasing, I then learned about mining pools to increase my chances of ever seeing a full Bitcoin. Setting up miners and pointing them to mining pools was not so foreign to me, it was a breeze and things were looking up.
As time when on, more exchanges started to pop up. New cryptocurrencies were coming out everywhere, allowing miners to switch from mining Bitcoin to mine other coins with the same or similar miners. One similar to what the customer had told me about was Dogecoin. Intrigued, I began searching in Coinwarz, (a site that would give updates on the most profitable coins to mine).
During that period, crypto coins were just nice names without much to offer but to be able to mine them. These were great, especially for the miners that could not keep up with buying more powerful rigs and were simply looking for profit. But for many of these coins, the developers were anon and would usually disappear at the dawn of release. Leaving miners a drift, dumping their stash never to come back. The journey was quickly turning into a spider web of lies, cheat hacks and deceit. Exchanges getting hacked, bitcoins being stuck on exchanges that went under and so on, but the underlying tech had much promise.
This was the Blockchain and I quickly understood the power of it. Having dealt with databases and data centers, it was pretty amazing to me how it all worked. But I could not get my head around the fact that to secure Bitcoin (aside from the profit aspect) it would require the use of so much power. This might have been a good design structure for Bitcoin, but was it going to be the same for others. In my view, the more feasible it would be for people to get going the more decentralized things would be. So for me, already heavy into research the challenge was going to be “how would people from underdeveloped countries have a chance to be involved in crypto”. To store the blockchain was also going to require a substantial amount of hard disk space but these were just some of my initial thoughts, among other more technical ones. After going back and forth from paper to paper, reading Bitgold 2005 by Knick Zsabo, Derek Hatton (IOC Core Dev) among many sites in CMS Online Cluster 2009 CMS Run Control System, I figured there would be a need for other blockchains doing different things and the block size, confirmation times, was also something that I had doubts on for the long term, but at the time it was not something to be overly concerned about for Bitcoin itself.
What was more concerning were the scams from devs and or exchanges who ran with peoples money. Anon devs were copy/pasting code every couple days, make a coin, release, some with hidden pre-mines. Allocating coins to themselves before launching. And the only way for anyone to find out was to review the code, but even before the research was done, people would see big dumps of the coins and disappearance from the devs.
Right around these times, around 2013–2014 was the first time, I started to hear the term “Shitcoin”. At times coins made by anon devs, that had no meaningful reason to exist but only to be a quick cash grab to earn more Bitcoin. One of these coins was the infamous “PandaCoin”. This was one promoted by the mystical Wolong. A character who would orchestrate massive pumps and dumps.
So as the story goes and backroom deals were made to launch shitcoins to make quick Bitcoin profits, some of us were trying to understand what it all meant in the Wild Wild West. It seemed as if there were only 2 roads ahead. Scam or be Scammed.
Although there seem to be no end in sight and at some point losing the only Bitcoins I had mined via learning curves. I stumbled across a couple of coins that were at least offering some cool things. Namecoin and Peercoin.
Namecoin was to be using DNS like features and Peercoin a hybrid POW/POS coin that could be supported via POS. This is when I started to put things together that new coins could be launched, with real meaning to do things that Bitcoin was no capable to adopt. Also to merge ceratin upgrades devs had to propose for BIPs. Tests would have to be conducted off main live chain/forks discussed and accepted by the miners and core to make it into the master branch.
Some of these ended up as brand new coins who were essentially testnet beds. Real devs wanting to explorer what could be possible to do on the Bitcoin blockchain. Some others were simply just wanting to be their separate blockchains. In the end or at some point it was all to prove that certain features would work without bringing those risks to the Bitcoin main net. Therefor some of these projects at least deserved some community backing, as they were proposing some interesting features and had valid roadmaps. Soon enough other coins emerged from the crop of many, like BlackCoin. A fork of Peercoin wanting to expand on the POS research by touching upon the possibility to secure a blockchain without having to use mining rigs and simply using laptops or less powered computing devices.
A. The Coin was launched via Anon devs, pre-mine or ICO to be abandoned without no purpose to exist.
B. Coin was launched via known devs, offering blockchain upgrades, no ICO or pre-mine (Fair Launch).
The A kinds were very prominent and the B kinds were very scarce. And therefore having a clear understanding of the 2 options. Having a 20-year computer IT background and after doing 2 years of pure research, the passion for blockchain took over and in 2014, I ventured along with other devs into launching IOC via POW-X11 to ensure Fair Launch.
As in Bitcoin, some alts (real cryptocurrencies) have had a calling to help advance Blockchain research, others just wanted to improve on the Bitcoin mining algorithm or simply wanted to add features like privacy as in (XMR-Monero). Other coins like Vertcoin, an interesting coin that simply wanted to try new mining algorithms and make faster transactions among other features. We can also add to this list Siacoin for decentralized cloud storage. These projects were clearly being developed and supported by the masses, even Dogecoin who was originally launched as a spoof. All in all, they attracted people to support them for the right reasons. Digibyte another one with a very strong community.
A strong pack of coin communities continued to grow. More people were intrigued and wanted to participate, they continued buying Bitcoin’s and mining to sustain this alt chains, to maintain their respective research work. I could continue to name more coins but I think you all get my point. The important thing here is that some of these projects like IOC, have made positive contributions to Blockchain research. They have shown the resilient side of what true nonsecurity, decentralized crypto’s look like. And have also proven certain algorithms that looked like pitfalls as in (POS), but have passed the mustard, after years of uptime, and now are making their way on too many mainstream projects like Ethereum and Tezos.
In my case and learning from all the shortcomings and scams that others tried to pull, it all served to fuel my desire to making things better for the crypto community. Pushing the limits of blockchain without hurting or being a negative force in Bitcoin. Instead of turning into a fudster of Bitcoin main code, I put my money where my mouth was, to try and do real blockchain research. But it was also to prove a point, that not all blockchains or distributed ledgers needed grotesque amounts of energy to be secured.
On June 24th, 2014, alongside 5 other devs, as we launched IOC, it was all panic and excitement. We had no clue how our idea would turn out to be. Having a few goals in mind. The most important one of them all testing a new algorithm in Proof of Stake. We had slated for a 2 week x11 mining period to complete fair distribution and switch over to POS. Another one was to turn the long hex addresses into pseudo names, to make things easier for users to be able to send and receive coins. The team wanted to do away with the QT wallet and build a secure JS wallet from scratch, that could also serve as a full staking node. So for me, this is how it all began in my journey to help research things outside of Bitcoin.
Proof of stake to secure a blockchain intrigued me. I knew people in many parts of the world, have challenges access electricity and money for big mining rigs, that should not be a deterrent for people that may serve to participate in a public blockchain. This would bring even more independent nodes in, as anyone could stake on a raspberry pi. Furthermore in 2020 via entropy-based graph molecular ledger (chameleon) it will be even more accessible. As users don't have to carry the entire ledger, this will enable mobile users to participate. Also enabling interoperability with other blockchains further expanding more use cases.
So today looking back. I see how many of us, having good intentions and not knowing what the future would look like, certainly underestimated the impact that came with ICO’s. This since back in the days, people were constantly getting scammed from ICO’s or pre-mines, at the time the community was against these types of offerings, but along the way similar scams started to pop up. This time they were way more sophisticated and much more easy to deploy. Soon after the launch of ETH and as smart contracts came to life, it made things much easier to deploy tokens.
There was no C++ knowledge required, but just basic JS knowledge to launch a smart contract “Token”. Lead teams, although lacking any formal code work, were making things look all corporate. Marketing teams were assembled. With nice graphs, promises, advisors and elaborate infographics, it was just the right combo to get going. Even major blockchain players would be part of these launches. Some making representations as if the tokens were actual cryptocurrencies with their own permission-less blockchains. Issuers were also making claims of new services, products coming to improve things for Blockchain, but the reality was that it was simply impossible. Just scam tokens being dressed as real cryptos, but in reality, just smart contracts, living on top of a self-sustained Blockchain. Sadly many fell for these scams, thinking real things would come about, but only a few of these had something real planned for the future. These would require to leave the smart contract platform of their choice, to launch their own main-net blockchain. Not many made it to this important step, as blockchain development is not as simple as launching a contract, let alone as easy as copy /paste. This interim change the space forever bringing on regulators as the money being collected for ICO’s was breaking all-time records. And almost all of them were failing the Howey test, as other offerings were being backed by assets, therefor acting as unregulated securities.
So as this was happening self-sustained fair launched projects, that had no ICO, No Pre-mine and no Funding were being drowned out. And although many were making some incredible accomplishments, the space as a whole was simply not interested. Participants / Traders were looking for a quick return. It didn’t matter as long as they saw some key players they would buy-in. The money for traders and quick profits exploded. Bitcoin, Litecoin, Ethereum and other alts in general, went on the most epic runs of all times, creating incredible amounts of wealth for some who had timed it to the T and some of the token issuers were able to cash out, leave the space, to never come back.
This entire play was enabled by the most prominent exchanges. Some were getting greased and had many incentives to add these tokens. It was also less work-intensive since it was all smart contract-based. And to this day the story continues. Smart contracts continue to be deployed even failing the most basic security checks. The story is the same for many other smart contracts enabled blockchains. These are great features for a blockchain but as in every software layer, they must be thoroughly vetted. There are many issues with contract handling leaving bugs out in the open and vulnerabilities making them a hackers dream. Too many of us who have reviewed these contracts, and it was clear to us, that the issuers had no real interest in anything, but for a quick P&D for cash grabs.
Exchanges double dipped, they enabled these markets giving them green light without doing any proper due diligence, forks were also added enabling double spends as long as the incentives were right. These incentives in the form of bitcoin and or tokens were allocated out of thin air. There were also liquidity providers making it all look like there was a real demand. The space was once again turning into a place of the wild wild west of un-registered securities being traded for quick profits. Most of these profits would be for the exchanges, issuers and liquidity providers, leaving the rest with a bad taste in their mouths and useless tokens. This then created a chain reaction pushing most of the really hard-working cryptocurrencies to the back burner.
At that point, many coins that were started in a fair way, had no real way to survive. Many were being delisted and pushed out and others were barely making it alive in the exchanges. Even Coindesk and Cointelegraph would be quick to write about the latest and greatest ICO’s. Also, constant write-ups for corporate-backed tokens were getting almost 24/7 coverage just big marketing machines, to delivered sustained news on handpicked projects to cater to the corporate world. To us, this was a constant attack to drown out the fair launched cryptos.
Now Don’t get me wrong, these projects, like them or not, have pushed the boundaries and have brought many eyes to the space, but some have come in on the backs of these other clean nonsecurity projects. Luckily some fair launched ones like Litecoin, XRM and a bunch more, have made it through just fine, but not all.
The truth is, that despite all these attacks, real cryptocurrencies (no premine, no ico, fair launch, public & fully decentralized), that I speak about, are still being worked on by hard-working communities of devs. Many have already delivered and are delivering staggering blockchain features and upgrades. Some others that the masses have yet to be exposed to and are currently solving many unknowns are also exposing past misconceptions that were being spread. The most notorious one of them all (POS not being a secure algorithm). If this was the case ETH would have never made any efforts to go POS. Why after all these years is Ethereum forking to Proof of Stake? or ETC having a POS like sidechain, Tezos now with their delegated POS.
Well, first we have to thank other cryptos that proved that POS was a viable option, furthermore less likely to be 51% attacked. Of course, coins would have to be fairly distributed and no one can control and stake 51% of all coins as this would be nearly improbable and expensive. Not all will ever be 100% bullet proof in the Tech World. But hard-working folks are getting dam close to it, most importantly being pragmatic about things, to keep pushing the blockchain boundaries. This by thinking of new ways to re-invent the wheel or simply rooting out bugs.
I believe there is a righteous place for these projects that are being pushed out by the mainstream but developed with love by many fair launched communities. Especially the ones that continue to push privacy, new upgrades, and features while keeping their uptimes intact.
Due to the constant big tech snooping, hacks and censorship, privacy will be a must-have for cryptos. Data hoarding companies like Facebook, Google, Twitter, Amazon continue to invade peoples privacy without any regard. Payment platforms not only censor for political reasons but also good people get thrown in the mix, disrupting businesses. The constant tracking of what people do, to then share and sell the data over to marketing companies, is out of control. People being unbanked for unknown reasons is just unacceptable.
Privacy should no be looked at as aiding the bad guys, but a human right for everyone. Anyone holding cryptos could also be the target of unknown bad actors snooping for holdings to attack innocent holders. The entire purpose of having decentralized blockchains is to facilitate people to transact, but now more than ever, it is necessary to have a layer of privacy, to safeguard and level the playing field for righteous humans against bad actors.
For our team/community in IOC, we have continued to work very hard on user-friendliness and all privacy angles. To this day we have completed all our original goals but also expanded to push a newly updated whitepaper. For IOC DIONS was one of them, which enabled (Decentralized Input Output Name Servers) This included, decentralized, encrypted Identity storage (aliases — private, public) to encrypted documents up to a 1MB piece of data which could be paired and transferable between identities. Also deploying AES256 “on-chain” encrypted messaging, followed by Stealth addresses on 4MB blocks with up to 16-Second confirmation via secure I/O POS Cypher.
I/O Coin is now 5 years old and next up, it will be our biggest upgrade to date. We are coding, our very own offline sig, private balances and I/O Ring signatures, code name “Nighthawk” Protocol. For this, we are deploying our own “Zero Knowledge” techniques inspired on years of research. Rivest one of them.
Most of these cryptocurrencies including IOC, regardless of what the corporate takeovers of the space do, will continue to exist. Decentralized exchanges will become more popular, with on, off-ramps and more people will eventually be exposed to these projects. Although today there seems to be a preference for everything corporate-backed, we will see in the next few years, more people choosing public self-sustained blockchains. We will go back to the roots of it all. The thirst for serious crypto projects will be here to stay specifically because of their true decentralized characteristics. Corporations will either continue on the masquerade, suppressing side or join a pure revolution of doers, who’s inspiring work will be the savior of truly decentralized crypto, over any other centralized takeovers. With the latest Facebook masking centralized, unregulated security as a cryptocurrency, this is Libracoin.
Just recently Cloudflare ran into an issue and almost 70% of crypto, and some other important sites, exchanges, explorers went out, specifically for using this centralized feature. This event proved once again that centralized strucutres are not sustainable. Regardless of the drowning out attempt by centralized projects, there is and will be, a need for such decentralized public projects. But maybe since solid advances are being made, this scares off the corporate-crypto lords and governments, who continue to push complex regulations, getting lawyers into the fray to get their cut of the pie, to help governments get their tax and devour all fiat possible. Maybe shortly soon the story will repeat itself, to have the big exchanges fail and be mysteriously hacked. Leaving people broke without ever getting their coins back and never finding out of the real working projects of crypto. The later here was a grim outlook, but I will be way more positive than that, and say things will work themselves out :-)
Soon enough, exchanges will want to add good non security projects and real OG projects. For-sure the ones that have proven themselves. These will be given a chance to be in the spotlight. If not, just like Bitcoin was obscure in the beginnings, the flip-penning will come and an obscure to many privacy coins will take the space by storm. The need for real cryptos will be at an all-time high and the strong ones will survive.
The importance of supporting real cryptocurrencies is to ensure a diverse field of ideas, which help sustain a strong backbone in a healthy decentralized ecosystem. Exchanges who obstruct the viability of real cryptos are not contributing to the overall health of the space. By being selective to the tokens they have a stake in, is to further centralize things and deny people to freely transact in their preferred crypto. It also hampers on the importance of continued public scientific blockchain research.
Regardless of what any of these entities do, the continued support for corporate backed centralized data ledgers will continue, but some smart companies will see the light, and contribute to support public blockchains.
In the end, sooner rather than later, complex centralized company structures will be left in the dust by decentralized public structures, blockchains, entropy based graph ledgers and permissionless exchanges.
ps. My views are only mine and do not reflect the sentiment of the entire community that I participate in, or any other company that I’ve been part of.