Kathleen Breitman is person of the hour. She is co-founder of a company called Dynamic Ledger Solutions, or DLS, which has developed Tezos, a new blockchain-based cryptocurrency. Tezos is making major waves right now with its ongoing fundraising, which others are calling an Initial Coin Offering, or ICO. (DLS says the term is imprecise.) The sale, which ends next week, is being managed by the Tezos Foundation in Switzerland, which DLS set up as a neutral party to distribute, improve, and manage the Tezos “tokens.” As of Friday, the offering has raised well over $200 million, the most ever for an ICO. Breitman and her husband Arthur Breitman, the CTO, co-founded DLS and stand to gain 8.5 percent of the proceeds of the offering as well as receive a substantial amount of tokens over time.
So I was intrigued to meet up with this articulate, composed and enthusiastic 27-year-old. She is at the center of a world that has emerged so fast that even many businesspeople who consider themselves well-versed in tech do not understand it. Cryptocurrencies pose the potential, according to Fred Wilson in his onstage interview at Techonomy NYC, to underpin an alternative network that might dislodge Facebook from its empyrean perch. They may contribute to a radical decentralization of decision-making and authority across numerous, restricted dominions of commerce and government. They could, to hear Breitman and other partisans tell it, help recreate the internet as it should have been all along, with power truly and decisively distributed among its users.
In our meeting at a mid-Manhattan park, I asked Breitman a lot of questions, both smart and stupid. First, what was this offering all about?
“Tezos tokens have three purposes. They’re a way to power smart contracts on the network. They’re a way to vote and participate in the governance mechanism. And they’re also a way to conduct transactions.”
“Tezos has a way to facilitate innovation on chain by creating bounties to people who submit improvements, and have them earmark proposals for improvement with what they consider an appropriate token value in exchange…The main concept behind Tezos is that blockchain as a commons is a good that is shared by everyone, but you need pecuniary incentives to maintain it.”
“My hope is that the Tezos experiment pushes blockchains a little further by incorporating this governance aspect into it.”
Excited as Breitman is about the progress of her company’s innovations, she is careful not to make excessive claims for its success thus far. “The fundraiser being a massive success for the foundation is a key piece of catalyzing this type of experimentation on the blockchain,” she says. It remains experimentation.
But what is someone actually buying when they buy Tezos tokens? Breitman’s answer: “It’s like AWS credits. Tezos tokens are only good on the Tezos network.” So you’re buying a right to participate in the success of the network long term. If the network doesn’t get used, a token might be worth nothing in the future.
But there is real potential that such a network, if it succeeded, could have a big impact on the world. I asked her, “Is what you’re trying to create a platform for the innovation of others?”
Kathleen Breitman: Our tagline is to be a decentralized digital commonwealth.
David Kirkpatrick: For what purpose?
Breitman: Because that’s a cool and interesting thing to do.
Kirkpatrick: Is it for facilitating innovation? Or to become a tradeable form of stored value?
Breitman: Some people will want to use it for self-organizing and literally starting communities on the blockchain and having their own little government, with maybe some economic activity. It’s very open-ended. We’re very non-prescriptive. There is some low-hanging fruit in online gaming…
Kirkpatrick: So is someone who buys what you’re selling joining a game?
Breitman: It’s joining an experiment. People can use it for cool stuff. The whole notion of programming value, however that’s construed, or programming transactions, is very powerful.
Kirkpatrick: Could it be used for anything Ethereum has been used for? [Ethereum is the most successful commercial competitor to the Bitcoin digital currency.]
Breitman: We’re both strong contract platforms, but Ethereum wants to be the world’s computer. We don’t agree with that, because a blockchain is a very slow and costly computer. Ethereum wants to be the app store and to have all the apps. We want to be a Swiss army knife. If there’s something really useful on the fringes or on the leaves of the blockchain, we want to fold them in as first-class citizens. It’s a multi-use token.
Kirkpatrick: Should we consider it a financial construct?
Breitman: Not explicitly financial, but you could use it for data storage or transactions with someone you don’t know in another country.
Listening to this, however confident and impressive it may be in some respects, it’s easy to see how mere mortals might be confused. The range of possibilities of what could change as a result of the success of blockchain-based cryptocurrencies is very large.
Meanwhile, Breitman’s company gets sold to the foundation this summer, and she will then take a role not unlike the kind of role Linus Torvalds plays for his creation Linux—cheerleader, explainer, and champion. “I’ll stay in the ecosystem because it’s like my baby at this point,” she says. “I’m not going to abandon my child.”
The funds raised in the offering will go into research and development for further improvements in design and security of Tezos, to marketing, and to other advocacy. The Breitmans are handing off their baby to the foundation because, as she says, “We need a way to disperse it.”
One big question that looms over this entire fast-morphing space is whether or not there will and should be hundreds or even thousands of blockchains, as is starting to be the case now, or whether eventually there should be just one. Clearly Breitman hopes that her Swiss army knife creation could be that one. “We know there’s only going to be one,” she says, “because the economics favors one chain with a lot of utility.”
But she concedes that in saying that, she is a contrarian. “Most people think the opposite, that there should be a new blockchain for, like, every fire station. I saw an ICO for Dentacoin. But who the hell uses a coin when they visit the dentist?”
Whether or not Tezos is “the one,” Breitman is clearly convinced that this kind of innovation is an inevitable part of our collective future. She says the near-term applications that she is interested in working on herself include using it to enable various forms of micro-insurance, applying it to help gamers, and potentially using it as an element in big data management and analysis. (This last one she says she is more uncertain about, but since DLS has been approached by big data companies to work with them, she is game to give it a try.)
I asked her: “What, then, has held back blockchain-based innovation thus far from having the impact that may be its destiny?”
Breitman: Right now the biggest inhibition to adoption of these systems is design. It’s partly because so far they have only attracted really nerdy people who don’t mind dealing with a command line interface. And it’s partly because we just don’t know how to deal with a digital bearer asset.
Kirkpatrick: What world could become possible as a result of these innovations long term?
Breitman: Oh man that’s a tough question. (She pauses.)…I think people could have more freedom to choose how they associate with other people. Whether it’s through commerce, whether it’s through activism, or their freedom of voice, I think of blockchain technology as a global exit.
Kirkpatrick: Exit from what?
Breitman: From convention.
Kirkpatrick: So that leads me to ask this: The two biggest issues that worry me are the growing repressiveness and intrusiveness of governments around the world, and the power of a small number of large global Internet companies. Do you think these two problems could be remedied by this sort of thing?
Breitman: I hope so. I’m a little bit of a Pollyanna. I got into this first and foremost because it’s a really cool piece of technology, and it’s a solution for something that people have been trying to mull over and engineer for quite some time. So at an engineering level it’s really cool. But it also tickles my rebellious side, and my “screw you” side, to people who kind of own interactions in the internet.
That’s the sort of talk that intrigues us here at Techonomy, where our mandate is trying to capture the biggest issues being transformed by tech in business and society. We, too, are sometimes Pollyannaish optimists with an intrinsic confidence in the potential of tech to help make a better world.
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