Emin Gün Sirer is an Associate Professor at Cornell University, where he is Co-Director of the Initiative for Cryptocurrencies and Contracts (IC3). His research spans operating systems, networking, and distributed systems. In 2002, he started Karma, an early cryptocurrency that was the first to utilize a proof-of-work concept. He also acts as the Blockchain Advisor for the WeTrust project.

Hi Gün, thanks for chatting with us. How did you get involved with WeTrust?

George reached out to me about the project, and it immediately reminded me of something familiar I encountered growing up in Istanbul. There is a tradition there known as Gold Day, where one of the older ladies in the neighborhood throws a potluck every week, and everyone brings a gold coin. The person throwing the potluck collects the gold coins — it was this very interesting, social saving mechanism, with a self-policing system built into it. And WeTrust seemed to be doing a modern version of it, trying to help raise money and do something socially good.

As I discussed further with George, Ron and Patrick, I learned about other innovative things that WeTrust wants to do, involving building smart contracts that capture certain social dynamics, insurance, and money flows — all rooted in promises to pay. It sounds very exciting — until now, we’ve been limited by the simplicity of our financial instruments, and often times our best option is to write a check. But with smart contracts, there are better ways for managing money flows. I like that the WeTrust team is beginning to explore this area without being divorced from reality, mainly because they understand that all financial transactions are social in nature.

What are your thoughts on how Blockchain and Smart Contracts will evolve going forward?

Blockchain and Smart Contracts are at an amazingly exciting point in time. There’s a wave of excitement with Ethereum, that’s in some ways far ahead of reality and a bit naive. One project in particular I’m thinking of is The DAO. They tried to do something so far out there, and ended up overstretching what we knew how to do right now. The DAO was hacked, but even if it had not been hacked, it would have faced all sorts of other problems. Post-DAO, we’re seeing a more measured, grounded approach, where people are no longer asking for $220 million and saying “my code will manage it.” We’re seeing more modest efforts, people are much more careful, and much more cognizant that their projects must interface and be grounded in the real world. That’s what we see with WeTrust and some of the other players. Going forward, people will worry about Blockchain projects being connected to the real word, to real world legal entities. You could call it an identity layer, but it’s broader than identity — it’s a way to insure Smart Contracts have some actual basis in existing structures that have been built over millennia. This idea that code will subsume existing laws is too naive; instead, we’ll keep existing social structures and certainly laws, but code will supplant law and build on it.

It seems like your outlook for Blockchain is very positive, do you think these technologies may face a “trough of disillusionment”, or other roadblocks going forward?

First, I don’t believe in the “trough of disillusionment” — it’s not some sort of natural law. For example, I first laid eyes on the Internet in 1987, and I immediately knew it was big. And it got better and more exciting every day, without any trough of disillusionment. With Blockchain, the potential is so big, and the excitement is so large that we will see many cool applications and exciting use cases one after the other. Now, there will be disasters along the way — but we’re still dealing with problems with bridges and dams, and we’ve been building those for millennia. It’s the same with software. Code can be hacked, and unintended and unexpected things may happen — but that’s partly the excitement of it all. We work hard to avoid these things, but they will happen, and, in the end, we end up in a better place. Five to ten years from now, when we look back now at the current state of Dapps, the difference will be night and day.

How do you feel about the token crowdsale model for building Blockchain projects?

Deep down, as a scientist, I’m an empiricist. It doesn’t matter what I think: if something works, then it works, and it’s not fair for me to judge. And clearly, the token crowdsale model is working for a certain class of project.

There are worries with this model that any reasonable person should have. One concern is that it’s not a good model for projects that don’t appeal to preconceptions of the masses. The fancy projects get cash, while humbler projects aren’t served by this model.

As an engineer, I’m not interested in how fancy the project is, and just like to see things that are built well. I’d rather see stable foundations built solid, before we move on to fancy DAO-like things. That’s one concern I have with this model.

The other concern is that it’s easy to play into preconceived notions — to generate a lot of hype over vaporware and ideas that are not sound. Projects like these essentially prey on people who are not in a position to judge the soundness of these projects. I think we’ll unfortunately continue to see things like this unfold until trustworthy thought leaders emerge to parse the code and the teams behind them to identify the more worthy projects.

What are the pain points that you foresee for WeTrust going forward? And what excites you the most about the project?

As far as pain points, there are some inherent to the Trusted Lending Circle / ROSCA instrument itself. It comes down to whether people will continue to pay in the ROSCA as promised, which, in turn, comes down to the social makeup of the participants and the ability of the foreman to ensure compliance. The risk is that somebody who gets paid will never show up again, so it really behooves the foreman to avoid this scenario. As often is the case, humans are the weakest point.

The most interesting, exciting thing about this project is that for so long, the theory behind Smart Contracts vehicles has indicated that they can create a socially good outcome. The real question is why more projects haven’t targeted these kinds of social outcomes. We know that we can build blackjack on the Blockchain, and that what we build will be provably fair and that it will pay out to a gambler according to proven odds. But that’s not necessarily providing significant social good. ROSCA’s are not the end all be all of socially good financial instruments, but they are a first step in a direction where people will use really exciting smart contracts to incentivize people to do good things. I can already see a large space to be explored in this area, and the WeTrust ROSCA is one of the first credible, interesting forays into this space. If I go to sleep at night knowing that a provably fair blackjack game on the Blockchain works, that’s a pretty good outcome. But if I know that a ROSCA on the Blockchain works, that is a fantastic outcome.

Thanks for the vote of confidence and for chatting with us, Gün!

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