SFOX: Thank you again for joining us, Anthony.

What ignited your passion for blockchain technology: what got you here working in blockchain tech and on Ethereum Classic?

Anthony Lusardi: First off, thanks for having me.

What got me interested in blockchain in general was nothing out of the ordinary. I think I first heard about Bitcoin when it crashed in 2013, and I said, “Well, that seemed like a good idea, but it looks like it’s dead now.” Then, in 2014 or so, I noticed that everything was still around; so, I did some stupid trading, lost some money, and then eventually learned about the tech and what the bigger, broader implications are for cryptocurrencies in general. And then I got into Bitcoin and I saw Ethereum, and Ethereum seemed pretty cool because you can do new things with it.

When the hard fork happened and Ethereum decided to reverse the DAO attack, I started supporting and volunteering on ETC. Then eventually, in February of last year, I took a full-time position at ETC Cooperative to just support the ETC ecosystem like I have been except maybe make some money — make ends meet, rather than just volunteering my free time.

SFOX: What led you to support Ethereum Classic during the DAO hack and subsequent hard fork, and why you believe that its principles of “decentralization and immutability above all else” are valuable things for a cryptocurrency to enact?

Anthony Lusardi: Those beliefs were shared by quite a lot of people. I would say actually at the time of the fork it was pretty evenly split 50/50 on whether or not people wanted to go with it, if you were just gauging sentiment and people’s comments online.

Obviously, the pro-fork side had quite a substantial amount of financial resources, and in the first week or two, I thought that all of Ethereum was going to have to go the way of the fork. And then I found out that somebody was actually running Ethereum Classic. So I joined the Ethereum Classic Slack, and I found that there were quite a lot of people there who believed the same things that I did about cryptocurrencies in general: that cryptocurrencies need to function as they’re programmed to, according to the rules that were agreed to — and that those rules don’t change, like Ethereum wanted through the fork.

When you change the rules, you end up in a situation where the members of your bank can vote on your bank balance. Would you really want everybody within your particular bank to be able to say, “Oh, Aaron did something bad, and we just looked at it for five days and all agree that Aaron did something bad, so we’re gonna just take all of Aaron’s money away”? Maybe you did do something bad, maybe you didn’t, but we don’t believe that cryptocurrencies should function in that particular way; that’s why I, personally, have been supporting ETC.

You’ll see there are quite a lot of very good reasons to support things like immutability — things like censorship resistance, in particular — throughout the space, even in the largest cryptocurrency there is: in Bitcoin, you see that very, very strongly. Other cryptocurrencies are going to exist, and people are going to have different needs and wants for them, so it’s very important that we keep those principles in our other cryptocurrencies, from my point of view.

SFOX: Let’s dive into this idea of immutability a little further. One of the things that I struggle to understand as I think about these concepts and crypto is just how far they go and the extent to which we ought to adhere to them. On the one hand, “immutability” sounds like things should never be changed; on the other hand, as you just mentioned, the decision regarding the DAO fork was made in about five days. That leads me to wonder whether the idea behind Ethereum Classic is (1) things should never be changed or (2) things should just be changed very slowly and conservatively.

It’s interesting context for us at SFOX to be thinking about this because, at the same time that we enabled Ethereum Classic on SFOX, we also enabled Bitcoin SV, which as you probably know, is all about bringing Bitcoin back to what that camp believes is the original vision of it, as outlined in Satoshi’s white paper and his other early writings. And so that leads me to wonder: Is Ethereum Classic a kind of “Vitalik Vision,” in terms of just enacting the “original vision” of Ethereum and keeping it that way, or does it rather say, “Yes, we’re going to make changes over time, but they’re going to be very conservative and slow-moving changes”?

Anthony Lusardi: Yeah, so there’s a couple of things there.

One: You’ll see in the Bitcoin community, the ETC community, and other communities that there isn’t actually a leader or a centralized source of ideas, and that’s a really important property that we’re trying to maintain. When you look at things like Bitcoin Satoshi Vision, for example, they are very much appealing to authority: They’re very much wanting to go with whatever their readings of the gospel of Satoshi are. That’s not actually something that we share — there’s quite, quite a significant amount of differences there. But it is interesting.

You mentioned immutability and what that means in terms of upgrades: whether it should be slow or fast, and what it should be. First and foremost: When we say “immutability” — or, okay, when I say “immutability,” because I can’t speak for everybody — I mean immutability of state. Proof of work is a kind of probabilistic guarantee that state isn’t going to be changed, and the longer a particular block is on the network, the more likely it is to never be changed. I think that that’s the type of property that ETC, and ETH, and every other cryptocurrency out there should actually have. And it’s kind of interesting because that property, in particular, was violated when the hard fork happened: they didn’t go and start mining at a pre-DAO block in order to advance the chain and get ahead of it to the point where it didn’t exist on the chain anymore. That just kind of superseded all of the assumptions of proof of work and undid something in an unacceptable way.

When you say “immutability,” sometimes people think that that means the blockchain is never going to upgrade, or it’s going to get stale, or it’s going to get old. It doesn’t mean any of that. It simply means that if Aaron’s account balance says that Aaron owns 10 ETC, then nobody is allowed to change that on the blockchain except for Aaron, who owns his private keys. And in that way, you’re the only one who’s able to change the blockchain to change your account balance. When you allow other people to vote on it, that’s the thing that we take issue with; we think that immutability needs to be preserved there.

SFOX: I noticed, Anthony, that you were very careful to say that that’s immutability as you see it; similarly, in your writing about issues like decentralization and immutability, you emphasize that the communities of blockchains such as Ethereum Classic ought to be decentralized and that, therefore, you can’t speak for anyone other than yourself.

I wonder whether a blockchain with truly decentralized leadership — as, it seems, you envision ETC — can really develop with the kind of cohesion that a blockchain, or really any kind of project with more centralized leadership, can. I found even in my own research trying to learn about ETC that it was much harder to dive into it and understand the collective ecosystem than it is to learn about a more centralized blockchain, because there are just so many different projects and so many people in the mix when it comes to ETC. Could speak to that notion you have of decentralized leadership and decentralized communities, and why you believe that it’s a good and productive thing for blockchains like ETC?

Anthony Lusardi: I think that’s a really good point.

Obviously, any small, centralized project is going to be able to move faster and implement whatever particular vision or goal they want — but there are a lot of weaknesses that are inherent there. There’s a lot of unfairness, a lack of equity, between members participating in it, because when you run a centralized program, you end up beholden to whatever the developers decide to change or do with it.

Obviously, it’s a double-edged sword. There are some benefits to centralization in that you can clearly present the “one true kind of direction,” or you can you can take a position very easily on what the proper path forward is. With something like ETC or Bitcoin, you don’t get that convenience, but what you do get is a substantial amount of strength in the lack of dictators and the lack of having a central, core party that can control every part of it. And I think that’s really interesting and important.

I’m not talking about any blockchain in particular, but I do think that, in general, the more decentralization and distribution you can get in your community, the more you can give people recourse in the event of a bad action — even just a “disagreeable” action — taken by one party, the better off it all is.

SFOX: Let me push on that idea a little bit.

Looking around in the crypto world, one of the things that is really interesting and challenging to me is exactly what you alluded to: the de facto “dictators” of the community, especially when we live in an age where so much crypto discourse is borne out through media like Reddit or Twitter, where there are giant figures who wield so much influence. But then I wonder about other models of governance — not even within crypto or blockchain, but something like the U.S.’s democratic government. Imagine some sort of government structure where it does seem that there are defined and somewhat centralized authorities, whether that’s the President, or the House, or the Judicial Branch. When it’s working well, the notion of democracy is that there is this firm structure in place that represents the interests of everyone in a reasonably fair way, right?

With that model in mind, do you imagine that there could eventually be that kind of “middle ground,” let’s call it, in a blockchain community, where there is a kind of defined and centralized government that does a good job of representing everyone’s interests — or, do you really believe that in order for blockchains to fulfill the underlying vision of the technology, their governmental structures and communities have to be truly decentralized?

Anthony Lusardi: Well, I guess it depends.

Funny enough, I was in Singapore in September, and even though I found it to be more of a Vegas-y atmosphere, I thought it was really nice that everything was so well-kept and neat. And from a general standpoint, beyond just the aesthetics, you could say, “Singapore is great.”

Singapore has a benevolent dictator, and benevolent dictators sometimes work out really, really well — you know, for short periods of time. And then the benevolent dictator gets corrupted, or the benevolent dictator’s son or grandson gets corrupted; all of the sudden, things change, and having a dictator isn’t so great anymore.

So in general, I think that, yes, centralization does make certain things easier — there’s no arguing that. It makes both good and bad things easier, though. And what I would say is, in general, when you look at projects throughout the cryptocurrency space, you will find that the overwhelming majority of them are centralized: the overwhelming majority of them have a very small group that can just steer the entire direction without much recourse to anybody else. And if you’re looking for the opposite of that — if you’re looking for a cryptocurrency that says, “No, this isn’t the way that it should be governed, this isn’t the way that this should happen” — they are few and far between.

I think that the market space or the market opportunity — or maybe not market, but the mindshare opportunity — for decentralized cryptocurrencies, for ones where there is no one true owner, is actually very substantial. There’s a lot of potential there, and that’s really what we want to try to do: We want to push to get people to better understand that centralization isn’t the only option. And in something like a cryptocurrency — where, if we’re ever successful, we will have an immense amount of people using it — it’s vitally important that we avoid the type of centralized structure where one government can have an undue influence over the monetary policy.

We already see that “undue influence” with USD, for example: If the U.S. doesn’t like you they don’t even need to pass laws against you, they don’t need to go to war with you — they just need to cut you off from their banking.

SFOX: With that in mind, let’s pivot more specifically to the decentralized community of ETC. Like I mentioned, as I was trying to learn about ETC, I encountered the difficulty of holding all of the different pieces of its community in my mind and seeing how they fit together. What are the major organizations involved in ETC right now, and how are they interrelated?

Anthony Lusardi: Sure. So, in general, I would call it a distributed community. It can’t really be decentralized; we just try to maximally distribute it so nobody has control over all the communications channels.

There’s us at the ETC Cooperative, and we do a lot of ecosystem support for ETC. We write a lot of guides and try to talk to developers and raise interest in ETC in general, in all the ways we can. We provide certain third-party services — such as block explorers, or RPC nodes, or even just regular nodes — so that people have an easier time using ETC when they need to.

There is ETC Labs Core: the majority of their employees are former ETCDEV employees — unfortunately, that organization closed — and they do a lot of the core development for the network. So, the coming opcode upgrades are going to be largely implemented and done by that team. They’re also working on a lot of really neat tools. They just published an article yesterday where they’re going to speed up the EVM; they’re working on some IDE stuff; they’re working on something called LLVM… We don’t need to really go into the technicals there, but there’s a lot of interesting stuff coming out of them.

Then we have IOHK, and they do a lot of research for ETC. They — again, this is highly technical and even way beyond me, so everybody reading is in the same ballpark here — but they’ve formalized the EVM in K, and they’ve done a lot of other very interesting research. They wrote the Mantis client, too, which they’ll be upgrading for the various opcode upgrades that are going to happen on ETC probably sometime in the next 3 or so months.

There are other teams that have come and gone, and there are tons of independent developers that do various different things. It’s a really big ecosystem. And if you wanted to learn more about some of the different projects and different teams working on ETC, then I would just say you can start at ethereumclassic.org and then just go from there. Check out our subreddit; check out our discord; check out our telegram group. There’s a lot of stuff there.

SFOX: You mentioned that there are teams that have come and gone — in particular, as you said, ETCDEV unfortunately had to shut down on December 3rd. And then just yesterday, ETC Labs announced that they’re launching this new initiative, ETC Labs Core. Is it just part of the distributed nature of ETC that we should expect these kinds of institutional turnovers over time? Or, do you see that as a symptom of something else, and, in the long run, will there be a number of distributed but established and longstanding ETC organizations?

Anthony Lusardi: So actually, at ETC Cooperative, we are talking to other groups and trying to get them to do some coding and some development for ETC. Obviously, we want to have as many groups working on as many things for ETC as possible. And, yeah, the turnover, it’s natural, and it happens sometimes. You know, like I said, ETCDEV folded, but all their devs were skilled in developing stuff for ETC, and they largely went to ETC Labs Core.

Turnover isn’t great: it sucks if people lose their jobs, and it sucks if there are, you know, issues that come from that. But the good thing is that there is no centralized team that can go and say, “I’m going to use ETC to bail myself out,” and you do see that happen in other cryptocurrencies, where the core team ends up in a situation where they were either financially irresponsible, or they had some other issue, or they became highly centralized and lost a lot of their support — and they can’t just turn around and cash out on the equity in their blockchain. They have to, you know, survive like any other business when in the natural world. If you have a startup and that fails, you can’t go to the bank and try to change your account balance or do other fishy stuff in order to bail yourself out.

And we do see those sorts of bailouts in other blockchains. For example, there was one — I’m not going to name them, but they essentially tried to develop their own cryptocurrency miners for their network and found that there was a lot of competition around this: two other groups had developed cryptocurrency miners for their network as well. Because the core team had made one of the miners, even though they weren’t able to keep up — even though they weren’t able to complete their orders and were unable to meet the deadlines that they had set for themselves — they just decided that they were going to make it so that only their cryptocurrency miner works on their network, effectively removing the rest and working in a way that gives them a very unfair advantage and is very bad for the network in general, because those unfair advantages tend to lead towards centralization.

SFOX: So it sounds like, to pivot back to what we were talking about earlier, one of the virtues of the distributed community of ETC is that it helps to support the “free market” idea of only allowing the successful businesses to stay around in the long run. Is that right?

Anthony Lusardi: Yeah. And you know, that’s just a fact of life. And it’s somewhat about free market, and, you know, the successful businesses being able to support themselves, but it’s more about the fact that there is an even playing field for everybody.

It’s a true, free market in that anybody who wants to participate in ETC gets the same exact playing field as everybody else, and there’s nobody there who’s going to be able to do things for themselves that other people will not be able to. There’s no Chancellor on the brink of bank bailouts in 2008, where banks, even though they did some bad things and should have failed, were not even allowed to fail by the financial system. And if anybody missed that reference, it goes back to the first Bitcoin block, which actually has that message encoded from Satoshi because that was, probably, the most original purpose of cryptocurrency: that everybody gets an even and fair playing field.

SFOX: When the ETC Cooperative talks about how it was founded, it says that Grayscale agreed to contribute a third of the Ethereum Classic Investment Trust’s management fee to the Coop for three years from April 2017 onward. And so that makes me wonder, as we’re talking about the transience and turnover of organizations: Is the ETC Cooperative just intended to be a temporary organization for three years or so? And if that’s not the case, how does it plan to fund its operations after that initial appropriation ends?

Anthony Lusardi: No, we intend to operate for much longer than that. The three years is kind of some somewhat-guaranteed starting money that can really help to bootstrap the ETC Cooperative, but we are also now a 501(c)(3) non-profit organization. So we’re going to be essentially looking for donations and other forms of funding to keep us going, and we have no intention of stopping any time soon.

SFOX: That is an interesting model in this cryptocurrency world that seems to be, in so many cases, for-profit: you’re actually looking for donations, on the other side of it.

Anthony Lusardi: Yeah, and without selling a token. …That was a mean dig.

SFOX: *Laughter* Fair enough.

In terms of fiduciary responsibility: is the ETC Cooperative bound by any actual legal responsibilities to make prudent investments, or is that more of just a principle that you’re trying to uphold?

Anthony Lusardi: We’re only supporting the ETC ecosystem. We don’t give financial advice to anybody; I even personally don’t give out financial advice in general. We’re not we’re not selling ETC, we don’t hold any substantial amounts of ETC, and we’re not trying to encourage people to do anything with ETC financially: whatever they do is up to them. We just want to support the ecosystem, help it develop and mature, and keep these core principles of the ecosystem alive.

SFOX: Moving the matter of ETC vs. Ethereum: these two chains have had an interesting history and relationship since they forked, and I know that in recent times you’ve talked about how the ETC community has put a lot of work into finding ways for those communities to work together. As it stands right now and looking ahead, how would you say that ETC and Ethereum differ in their approaches to security, immutability, and the other core principles that define a blockchain?

Anthony Lusardi: The major way we differ right now is that Ethereum is going to proof of stake and ETC is going to go proof of work, and those are two completely different kinds of consensus mechanisms and security mechanisms. And I would say that’s the major way we disagree.

But also, to your point, I consider quite a good deal of people in “the Ethereum community” to be friends at this point. So, yeah, there’s definitely been a lot of healing between the two communities since the fork. We disagree quite a lot on ideology in some cases, but I think one of the interesting things is that when somebody is my friend, I have a much easier time convincing them of my point of view than I do if they’re my enemy — so I’m looking to hopefully see that all continue.

SFOX: Sure. And when Twitter, bad conversations, and negative energy are so prevalent in the crypto community, I think that positive attitude that you’ve just evinced is so important in moving the overall industry forward. So, respect to you for that.

Anthony Lusardi: Thank you. I don’t deserve it all the time, though — there are definitely times where I’m not positive on Twitter!

SFOX: Well with so much negativity out there, sometimes you just have to give in, right? But — understood.

Something that’s also interesting to me is the notion of metrics in crypto and how we all can be responsible in both measuring and reporting those metrics. The ETC Cooperative says that it’s going to monitor and periodically evaluate its success in meeting its different objectives. So I’m wondering how the Coop knows that it’s going to be successful or that it has been successful, when so many metrics are dangerously gameable — metrics like market cap or the social communities that can be, as you know, bought or sold to create a perception of success or failure that doesn’t align with reality.

How do you deal with metrics, and which ones do you think are the most important or reliable for a cryptocurrency like ETC and a coop like the ETC Coop?

Anthony Lusardi: In general for the ETC Cooperative, we don’t look at metrics like market cap, or really anything that’s market-based, for some measure of success. What we do is we look at, you know, how many developers we reached. We look at how many projects we helped out. We look at whatever our major accomplishments were for the previous six months or so, and that’s how we measure how well we’re doing, where we can improve, and where we can do better. So, for example, if you go on etccooperative.org, you’ll find our review published mid-year last year, and we need to publish another end-of-year review very soon — and that would give you further insight on how we measure our success.

How does ETC measure success? I think it’s going to vary by person, by group, and by project. Obviously, there are lots of people who are going to measure success in dollar terms. There are people who are going to measure success in total number of users. There are people who are going to measure success in adoption and usage by companies. You know, there are a lot of different ways to measure success. But yeah, in general, I just don’t like doing it by market cap or by other easily gameable metrics like that.

SFOX: A while back, some people said that different coins are monopolies and so, eventually, everyone would move to Ethereum and ETC would die. We’ve seen, clearly, that that is not the case, because ETC is still here and growing. What do you think has helped ETC to continue to grow, and how do you think ETC will find the way forward to continue to grow and compete from here on out?

Anthony Lusardi: You know, ETC has a very strong contingent of passionate supporters, and they’ve definitely helped us grow. In general, I think just sticking to your guns and delivering on what you said you were going to deliver on is vitally important and helps you grow and succeed in this industry.

As far as cryptocurrencies surviving and dying off, I mean, I don’t know. I think there’s quite a great deal of cryptocurrencies that will die off, even if they’re good ideas, as a consequence of the market kind of condensing on things. But, yeah, in general, I think that ETC has been successful because it sticks to its guns, does exactly what it says on the tin, and doesn’t deviate from that path.

SFOX: Before we wrap up, I have to ask you about the recent attack that ETC had on its network. What lessons do you think the community can take from it? How do you think the community — with the caveat that you can only really speak for yourself — intends to approach the risk of future such attacks?

Anthony Lusardi: Yeah, I mean, for myself, we intend to approach it by essentially following the same rules that ETC always has. We are going to definitely step up monitoring of the ETC blockchain — maybe not ETC Cooperative, but many people in the community — and then on top of that, we’re looking at ways to defensively mine or ways to mitigate 51% attacks.

One of the very interesting things about a 51% attack is that when you look at exchanges in general, the amount of confirmations — the amounts of blocks they wait before considering a transaction final — varies quite a lot. So on Bitcoin, for example, you’ll wait two confirmations, and, if you had the hash power, you could undo two Bitcoin transactions with about $80,000 USD worth of bitcoin. Or you could spend, you know, another $120,000 USD and kind of guarantee that your blockchain gets ahead and removes the old transactions, allowing you to double-spend an exchange. $120,000 USD isn’t that much when the payout is substantially higher — in the tens to even hundreds of millions.

But when you look at ETC, for example, you know, people wait about 75 or so confirmations. That amounts to $1,500 USD to $2,000 USD worth of mining, which is a substantial decrease in the total security of your deposits. So what we’ve really been encouraging people to do is to actually increase confirmations for ETC: make sure that deposits take longer, because the longer the deposit takes, the more it costs to undo it. And if it costs more to undo the deposit than the attacker is going to get back, then it’s just not worth it.

We really just want to see exchanges at least use the same amount of security for ETC that BTC has, for example. So, for ETC, we’ve been suggesting that people wait 2,500 to 5,000 or so confirmations, especially depending on the value of the transaction. You know, if it’s a low-value transaction then you can wait less; if it’s a high-value transaction, then you can wait more. And I think educating people on that particular property of proof of work is very important, too, because I think a lot of people don’t realize that confirmations can sometimes be undone rather trivially if you don’t get enough of them.

SFOX: So it sounds like the future security of ETC — and other cryptocurrencies, I imagine — depends on the entire ecosystem working together: miners, but also exchanges, in terms of how long they decide to wait, how many confirmations, and things like that. Is that right?

Anthony Lusardi: Yeah, exactly. And that’s not to say that Bitcoin or any other proof-of-work cryptocurrency is “weak.” It’s just that the risks and security of these cryptocurrency networks need to be well understood and I think, right now, there’s a lot of people who are actually secretly — or, in some cases, outwardly — very happy that various proof-of-work networks are under these 51% attacks.

I want to just communicate to anybody reading this interview that proof of work is the only way you get a decentralized cryptocurrency, and if you want that, then you need to properly understand the risk of them. And I think that right now, there’s a lot of people who are kind of gleefully ignoring a potential risk further down the line for the short-term bad press that some other cryptocurrencies can get if they’re 51% attacked. Really, the 51% attack is never on the network: The network will settle out and will probabilistically advance towards an immutable consensus.

But this is really just hard to explain in simple language — it’s a really complicated issue.

SFOX: Yeah. But the interesting point in there, I think — or one of them — is a sentiment about which Charlie Lee tweeted a week ago: “Look, if a cryptocurrency is not susceptible to a 51-percent attack, then it’s not decentralized.” It sounds like you agree with that statement, right?

Anthony Lusardi: Yeah, exactly. So, yes, ETC, for example, got 51% attacked, but centralized cryptocurrencies can get 1% attacked: they could get attacked by an even smaller group of people with even less money. So, decentralized is always better.

SFOX: What do you think ETC’s biggest hurdle in 2019 will be? And, on the other hand, what are you most excited about for ETC’s continued development in the coming year?

Anthony Lusardi: I honestly think the biggest hurdle is properly informing exchanges and other people transacting on proof-of-work cryptocurrencies as to what the threat model is, so that people understand how to properly use them.

The things I’m looking forward to, really, are a lot of tools and a lot of development around ETC that should make development a lot easier — should be much more attractive, should maybe get the EVM executing a lot faster so that smart contracts are more efficient and the node-syncing is better. Yeah, there’s quite a lot of technical-level advancement that I’m really hoping to see an ETC this year.