#13 Kirk Dameron + ConsenSys: Fireside Chat at Denver Startup Week

This fireside chat started a four-part 90 minute blockchain presentation at Denver Startup Week. I’ve posted the video with Erik Voorhees here. The videos with Raine Revere and Nathan Schneider are coming soon. Hope you enjoy them!

In this chat with Kirk Dameron from ConsenSys, we dive into ConsenSys’ many initiatives, how decentralized companies operate, and give a high-level overview of how ethereum plans to scale. Check out the loosely edited transcript below! (Sorry about the background noise! We fixed the sound after this interview.)

Can you give an overview of ConsenSys?

• ConsenSys formed in 2014. Had 60 people by the middle of 2016. 100 when I joined in November, 10 months ago. We have over 320 now and are growing very fast. (Here are their open positions.)
• Started with the emphasis of Joseph Lubin, our founder, to build applications on top of the Ethereum protocol layer. Ethereum will allow you to do anything today without trusted intermediaries. To Uber without Uber. Banking without banks. AirBnB without AirBnB.
• We’ve also spent a ton of time on infrastructure, like INFURA. The network had previously peaked at 1 billion transactions per day, now it’s averaging 1 billion transactions per day.
• On the application layer, we’ve built uPort (The uPort Project) for identity. MetaMask is a Chrome extension that you can put on your browser today to interact with Ethereum without all the cryptoeconomic things Rhys was talking about.
• We’re a venture production studio, so we’re incubating 25–30 startups at a given time. Some have spun out into companies. The biggest are Gnosis, SingularDTV, and BlockApps.

I like to think of the spectrum of engagement with the community. From meetups, to ConsenSys Academy, and then spinning up spokes. How do you think about the progression from learning about Ethereum to actually building things on the platform?

• I used to say we did three things: infrastructure, the venture-production studio with spokes, and enterprise consulting with things like Ethereum Enterprise Alliance. Now I’d say we have five.
• #4: Now we also have ConsenSys Academy. We’ll have free course content, paid course content. Not just for developers, we have an MBA competition too. We’re just finishing up our first developer class from June. 1300 applied from around the world—80 countries. We wanted to accept 50 people but accepted 130. We’re paying for their education. Paying for people who don’t have those opportunities. Flying out everyone out for a week in Dubai.
• #5: We also have ConsenSys Capital. $50 Venture Capital fund and what we call “Token Services”. Professional services to stay on the right side of the law.

How does ConsenSys run as a decentralized company?

• Joe remains committed to build a company with decentralization aspects. Having said that, we live in a very legacy world that might not be ready for this much decentralization. We run a very flat organization. I don’t manage anyone and no one manages me. You have a lot of freedom for how you manage your time.
• We run a hub-and-spoke model. The hub has circles that service the spokes. The smaller ones have one person, the larger ones have 15 people. Here’s the important incentive model. All of the spokes own equity in the spokes. The hub owns equity in all of the spokes. This means that if I’m working on Spoke Q, I am incentivized to help Spoke B. Spoke B could happen to be the next Google in the space, which would make the value of my ConsenSys hub equity increase.
• So we think we have an incentive-compatible model. Joe is committed to the idea of things being decentralized, but that is very hard. We all have roles but can choose our own titles. If I walk into another office, they want a title not some abstract role.

Let’s chat a bit more technically now. Where do you see protocol scaling?

• What the protocol does is amazing. But it’s slow. Visa can run 6,000 transactions per sec. Bitcoin and Ethereum can run a small fraction of that.
• The good news is that this space has attracted a ton of really smart developers. We estimate there are 25,000 to 35,000 developers in the Ethereum blockchain space. 500 to 1,000 are working on various scaling implementations.
• At a high-level, here’s what we mean by scaling—How do a bunch of peer-to-peer nodes come to consensus? In Bitcoin this happens every 10 minutes, with Ethereum it’s 14 seconds. Use an incredible amount of electric power for computers to solve hard cryptographic problems to keep consensus.
• Ethereum is moving from a proof-of-work algorithm. The Ethereum Foundation has a multi-year, multi-step plan to scale the protocol.
• One way to think of this is as “running things on top of the protocol”. The San Francisco Ethereum meetup just did a big event on this (link). You use the Ethereum network as a base protocol that works everywhere. But, you run many of your transactions on a 2nd-layer network. Buy $3 coffee on the 2nd level network, then, if there’s any issue over ownership, it gets brought down to the Ethereum network for conflict resolution.

Thanks to Keith Klundt, John Desmond, Colin Wielga, Harry Lindmark, Joe Urgo, John Lindmark, Daniel Segal, Jacob Zax, Katie Powell, Jonathan Isaac, Ryan X Charles, Chris Edmonds, Ramsay Devereux, Ned Mills, Kenji Williams, Scott Levi, Brady McKenna, Peter Rodgers, Kenzie Jacobs, Jon Frechin, Nathan Schneider, and Kash Dhanda for supporting me on Patreon!

About Me: My name is Rhys Lindmark and I’m a social entrepreneur. I’m creating a humanist blockchain future at the intersection of Effective Altruism and Blockchain. I lead the Colorado chapter for Effective Altruism. I’m an alumnus of Techstars Boulder 2015 (Edify). I have a podcast (here)and I coach/consult at a process-level around Lean/agile/OrgDev, especially blockchain companies. Please reach out if you’d like to connect or have feedback! I’m curious about what you’re working on. You can support me on Patreon, follow me on Twitter, or connect on LinkedIn.

Disclaimer: I own less than $100 of any given cryptocurrency, so my monetary incentive is not directly aligned with Bitcoin, Ethereum, etc.