Anna (00:00:05):
Welcome to Zero Knowledge. I'm your host Anna Rose. In this podcast, we will be exploring the latest in zero knowledge research and the decentralized web, as well as new paradigms that promise to change the way we interact and transact online. This week, I chat with Brian Fabian Crain, the co-founder of Chorus One, the POS validator and fellow podcaster over at Epicenter podcast. We chat about the early days of crypto in Berlin, the role that Epicenter played in his life and his thinking around the space, he shares the origin story of Cosmos and the validator ecosystem, as well as some backstory into Chorus One. The ZK Validator is now working with Chorus One on two of the networks we validate on: Cosmos and Osmosis. Cosmos has only announced after the recording, so we didn't actually mention it in the show, but I thought I'd mentioned it now.

Anna (00:01:00):
Now a few notes before we start in. Next week, I will be taking the week off from the podcast, so there'll be no episode, but in the meantime, keep an eye on zeroknowledge.fm, the website, because we will soon be launching an updated version. I'm hoping to do that during the break, and there'll be all sorts of cool stuff to explore there. And while you're at it, you may want to check out the latest Jobs Board. After the last ZK Jobs Fair, there's a whole new batch of jobs there. So if you're thinking to jump into the space, be sure to check it out. I also want to thank this week's sponsor, EY blockchain. Smart contracts with robust privacy technologies are the future of both business and finance. At EY they are investing in tools like their smart contract review services to assess consistency with standards and best practices. Users can run pre-defined automated tests and simulate smart contract execution by configuring selected functions through their user interface. To find out more about their technology and services, visit blockchain.ey.com. I've added the link in the show notes. So thank you again, EY blockchain. Now here is my interview with Brian.

Anna (00:02:12):
So today I'm here with Brian Fabian Crain, the co-founder and co-host of Epicenter and the co-founder of Chorus One. Welcome to the show, Brian.

Brian (00:02:22):
Thanks so much for having me; Anna. I've been a big fan of your podcast, so it's a great honor to be here.

Anna (00:02:28):
Well, I've been a big fan of your podcast as well, and actually that's where I want to start this conversation. One of the reasons I also wanted to have you on here was the Epicenter podcast for me, was very important, very formative. When I was first getting into the space, this is what I was listening to. And I don't know if you remember the first time that we met, I fan-girled. I heard your voice, you were sitting ahead of me on a bus or something in Mexico, at Devcon 3, I think. And I was like, "I know that voice!" And I went up and I was like, "You're Brian from the podcast!" I don't know if you remember this.

Brian (00:03:06):
Yeah, I do remember. It was this Polychain party in 2017, that Devcon in Cancun, which was during the last bubble, but yeah.

Anna (00:03:20):
During that crazy time. Kicking off this interview, I want to find out a little bit about where you started, Brian, what was the starting point for you in this entire ecosystem?

Brian (00:03:33):
As a child, I became, or as a teenager, I became quite interested in economics and I was reading Milton Friedman and some of these libertarian ideas. And this was very appealing to me. And then I went to the US and I studied economics in college, and then I was kind of lost. Cause that was like, "I don't know what to do". And for a little bit, I tried to, I did an internship as an investment banker. And I was like, "Okay, this is not it". And then I was also interested in start-ups and so dabbled a bit there, but there was also, it was just working on things that I fundamentally just did not care about. And then I discovered Bitcoin. So this was in 2013. And that was just for me, immediately, it just felt like everything came together, where there was this audacious, enormous vision of creating this new different world. And it also felt like there was just enormous sea of possibilities, of things that have to be done and things that could be explored. And so, yeah, pretty much immediately I fell down this rabbit hole. And at the time I was finishing a master's thesis, I was working on that. But then I had moved to Berlin and whenever I was cycling around, I was listening to Let's Go Bitcoin, and Let's Go Bitcoin had started like two months before, but they were pretty good, they were putting out two episodes a week. So I was listening to all of them and I was already quite sold on... I didn't know where to start, I didn't feel I had any useful skills at the time. There was very little money at the time in the space, in Europe, maybe there were 5 companies that had raised any kind of financing. And if someone raised half a million, this was like... Back then there was the Mastercoin token, they raised maybe less than a million, but that seemed like a lot. It seemed like very much of a success. So I didn't really know, where to go and what to do, but I did very much feel like the podcasting is just a super powerful tool and I felt with podcasting, I could learn about the space, I could speak with people about it, I could, produce something that's useful to others, get to know people, build a network. And so then yeah, then I basically started this podcast together with Sebastien Couture at the end of 2013. I also started the Bitcoin Meetup Berlin at the time. So Berlin had an early Bitcoin scene, there was Room 77, which was the first place where you could pay, go to a bar and pay with Bitcoin. They started in 2011.

Anna (00:06:32):
Buy a burger.

Brian (00:06:32):
Yeah. Buy a burger. And so there was a bit there, there were some very early adopters, but there was no meetup at the time that had presentations and content. So I also started that and ran that for many years. But the podcast was, I think, was what helped me the most in getting to know the industry. And now I think we're basically still running. So now it's like 400 episodes and 2013, so that's 7,5 years now.

Anna (00:07:07):
Okay.

Brian (00:07:07):
Yeah. So it's...

Anna (00:07:10):
Wild. It's so interesting, Brian, what you're saying about entering into the space at the time, where if you're not a technologist, if you're not a dev yourself... I mean, I experienced something very similar when I joined. I had worked in start-ups, but the role that I had taken in the startup that I had done before, I couldn't quite replicate in, when you're talking about protocol level development, it was so far from the customer-facing side of things that I, for a long time, was also like, "Where can I contribute something to the space?" And it sounds like, I mean, you were there even earlier, what kind of roles were there even? Were there product roles or was it really, really just the deep tech devs researchers at the time?

Brian (00:07:55):
I mean, the thing that I felt I could do was like, "Okay, I can organize a meetup". And then in the beginning I gave a lot of talks myself too. There was the Ethereum whitepaper came out and I was like, "Okay, I'm going to need to talk about the Ethereum whitepaper and explain some of the ideas in there". So I did quite a lot of talks in the beginning, but there was pretty much immediately, there were like 30-40 people who came to the meetups regularly and it was very informal and just different people doing different talks. So that's the thing I felt I could do. And then there was the podcast, which again, was accessible. You just have to show up and ask decent questions. And then I think you can do something useful. We did do some attempts at creating some kind of co-working space, but that didn't really work out at the time. But yeah, that was what I felt I could do. At a later point Gavin came to Berlin, so Gavin Wood who was working on Ethereum, they came to Berlin in the summer of 2014. And so I've organized a meetup for, the first meetup where they would present Ethereum at the time, and try to help a little bit them to set foot in Germany. I did help also with... There was a German company where all these developers were hired, that was a service prior to the Ethereum Foundation. So I helped set that up. And I tried to see if I could help in Ethereum, which I could a little bit.

Anna (00:09:33):
That meetup, by the way, that meetup is so famous! I was not there, I know at least 6 people who were at that event and who will still to this day cite it as, that was one of their first maybe blockchain events, that's where they met very key people that influenced their lives, so it's a really interesting one.

Brian (00:09:55):
Totally. I think in the beginning, these meetups were really awesome. And at some point I stopped doing them, because it felt like they didn't have the same effect anymore. Also, it was just the reach of a meetup is so much smaller than of a podcast, so... But yeah, I think in the beginning it was great. And so I helped a little bit with Ethereum and then I joined this project called Eris Industries at the time. So that was my first more proper job. And...

Anna (00:10:23):
Is that a blockchain project or is that something else?

Brian (00:10:25):
So they renamed later to Monax, but I think Eris Industries/Monax was also an interesting company, interesting ideas. Two of the founders were lawyers and one was a lawyer-coder and they started working on Ethereum before the Ethereum launch and basically were like, "Okay, how can we make Ethereum version that's more in sync with legal contracts and legal structures?" And basically they wrote their own version of the EVM. Actually, one of the first engineers at that company was Ethan Buchman. So I worked with Ethan back there, he was, I think, maybe first engineering hire. And I joined soon after.

Anna (00:11:11):
He was very involved in Cosmos after this.

Brian (00:11:12):
Yeah, well, so the story of Eris is very much linked to the story of Cosmos.

Anna (00:11:18):
Interesting.

Brian (00:11:19):
Because Eris was looking to build basically on Ethereum, but they wanted to have a different kind of chain, fulfilling a bit of a different need. And they changed their EVM with different permissioning, but the other thing is they wanted to replace proof of work. And then they were like, "Okay, how are we going to do that?" And then they found Tendermint. And Tendermint at the time was Jae and the whitepaper and a bit of code.

Anna (00:11:50):
Like a research project still.

Brian (00:11:51):
Yeah, totally. But Eris had raised VC venture funding. So they had a bunch of money and there was maybe 7 people, whereas Jae was just Jae, there was nobody else, I think, working on Tendermint. And so Eris became the first user of Tendermint. And then Ethan was spending a lot of his time, getting paid by Eris, but trying to fix Tendermint and get it into some usable state. Then that didn't really go anywhere. I think the entire enterprise blockchain thesis, I would say, ended up being false. My thinking around it was that I felt that the user experience would be really hard and that it was just so far away to make end user applications that would be compelling that I felt in enterprise maybe you could first get some adoption and later would become... But I think the thing that you didn't realize at the time was ICO's and just the economics around tokens that allow you to bootstrap things so fast and to generate so much momentum before there's real usage. And then on the other side, you have all of these enterprise use cases, where it's basically before you launched the chain, you have to have these different parties come to some agreement about what if rules have to change. How does it work? And you have this sort of yurt situation, where generally there would be a particular industry and there's something about this industry that you want to do different, that's very inefficient and you want to use a blockchain to make it much more efficient, but then you have these competitors that somehow need to come together to collaborate, but they're also competing. And I don't think any of this stuff really went anywhere, because it was just way too slow and complex and political. And then you have the political issues in one organization multiply with the other organization.

Anna (00:14:07):
Totally. It's interesting. I've heard like companies try to use the blockchain element to just try to digitize a business. This is back in 2017, where they would use... Like "We have a blockchain", which everyone was really hype about. So it would get the attention of the higher ups, but really all they were trying to do was change the organization at all and try to bring in a digital thing. And that just tells you about where these orgs are at. They are not ready to truly embrace something as experimental as a blockchain. They maybe would chase the dream for a proof of concept, but they're not even digital businesses yet on so many other levels.

Brian (00:14:45):
Right. And Monax had traction with... There was quite a lot of proof of concept. There was some partnership with PwC and Deloitte and UPS and Deutsche Bank and Swiss Re, and there were many of these huge corporates, they built POCs on it. And some of it was maybe even cool, but I've been reading in the last days, there's this great article about Tesla on "Wait But Why", I don't know if you know that website. And it's interesting to read this, where really, it was predictable a long time ago that electric cars will be superior and they will take over, but all of these car companies, they were just so stuck in this mindset of "We have this normal gas car and we have to focus on making it 2% better for next year". And I think the ability to disrupt yourself, that's really hard to do. And then in this enterprise blockchain world, you generally would want that all of these companies somehow together disrupt themselves and it just doesn't really seem to work.

Anna (00:16:01):
But in that Tesla example, what happened instead was a competitor came along that just leapfrogged so far ahead that all of those companies have stepped up since then and have totally changed their internal paradigms. But I think what you're saying, you couldn't just count on those orgs getting together and making those changes as a coalition, you needed that star that surpassed them that they could aim for almost.

Brian (00:16:28):
Yeah. And I think there is something just fundamentally better about public blockchains, where you have this permissionless innovation and people can build something and then you can say, "Okay, I want to join in on this" versus you're up from getting together and making this grand plan of how the system's gonna work. So, yeah, I think, in the end to me, it feels like public blockchains are just fundamentally superior to private blockchains and these permissioned blockchains, and the pace of innovation has just been probably 100 times as high in this world. So I guess we'll see what comes out of all that. I have not followed it too much in the last years, but I'm not so...

Anna (00:17:15):
You're not bullish on that. I want to go back to what you were saying about this origin story of Cosmos, because you were really close to that. So you were in the thick of it, it sounds like, you were there when Jae and Ethan were getting together.

Brian (00:17:33):
Right. So when I joined Eris, then I knew they were building on Tendermint and I was running the Bitcoin meetup at the time. So I was like, "Okay, let me give a talk at the meetup about Tendermint". So I gave this talk and I think we live streamed it and Jae was watching it. And he was like, "Oh, great talk!" Cause he was like, "Oh, this guy is giving a talk about Tendermint, this is cool!" Actually at the time Tendermint was also trying to do some enterprise blockchain use case.

Anna (00:18:06):
Really?

Brian (00:18:06):
Yeah.

Anna (00:18:06):
Weird. Okay.

Brian (00:18:08):
So they were trying to raise VC money and they were targeting more corporates, because they had the similar idea that they felt like this is where you're going to be able to get some traction first. It was not the thing for them. And then they didn't really succeed with that. But then this Cosmos whitepaper came out, I think summer '16. And then I felt Monax was not going anywhere. So I left that and I was like, "Okay, what do I do next?" And at the time Ethan had already left Monax and had joined Jae to work on Tendermint. And so I was also exploring, "Okay, what do I do next?" And of course I knew about Cosmos. And I thought this was a very cool idea and cool technology and also something where I could help, because it was like 4 developers at the time. And there was, when I joined it, there was not even a weekly meeting, it was just chatting on slack.

Anna (00:19:14):
Yeah, just a group of people getting together. This is interesting. I mean, I want to revisit Cosmos, but this for me, it's the first time I actually heard about an origin story of cosmos, first of all. And it's the first time I understand your connection to it, because I've always associated some of the work you do with that ecosystem, but I wasn't exactly sure as to why. But I want to come back to Cosmos, because I want to jump more into Epicenter. While all of this was happening, while you were running these meetups, you had started this podcast. I'm really curious, as a fellow podcaster, what were those early episodes like? What was it like for you to do this? Were you doing it weekly right away, were you just doing it for fun? Where did you start?

Brian (00:19:59):
I mean, at first, it was even like Sebastien and others speaking about the news. In the beginning, we didn't have guests in the first few episodes, but then pretty soon we started having guests and started doing, studying podcasts. I mean, we pretty much immediately were interested in all things crypto, beyond Bitcoin as well. We started the podcast in December of 2013 and that was just at the same time the Ethereum whitepaper came out. So I think also one of the first 10 episodes or something is about Ethereum. And we did episodes on Counterparty at a time and Colored Coins and whatever there was.

Anna (00:20:43):
Was it hard to find guests back then? Was it hard to fill a podcast about these projects?

Brian (00:20:49):
No. Even at that time there was enough going on that you could have an episode every week. So no, it was not. I mean, at the time it was still... There was a Bitcoin Reddit, which was the main home of the crypto community. And it was still a time, when if there was a newspaper that mentioned Bitcoin, then someone would go and take a picture of it and post it on Reddit and be like, "Hey, look! Someone mentions Bitcoin! This is awesome!" So it was definitely very fringe still, and I wanted to buy Bitcoin at the time. There was no real change in Europe. So I was using local Bitcoins and meeting up with people in person doing this cash transaction. So it was early, but there was already community and it was already growing fast. At least it felt like that to me. And then of course I joined the Bitcoin community and I remember, in Berlin, there was this Bitcoin Exchange Berlin, which was organized by this guy Aaron Koenig. And he wanted to have a place where people would get together physically to trade Bitcoin and meet each other. So some mix between social thing... And I went there, I think the first one of these, and bought some Bitcoins from the local Bitcoins founder. He was there. And this was, I remember, Bitcoin was at 70 Euros or something like that. And this was after the crash, in early 2013 there was a crash and then it started rising. And so I got into it after that crash.

Anna (00:22:31):
What had been the peak at that point? What was right before then?

Brian (00:22:34):
I think it was like $230 or something and then it crashed, so something like that. And then I got into it and it started rising very quickly. And it was interesting, because I had this perception pretty quickly that people are going to basically look at this and they're going to say, "Well, there's some probability that the world is going to adopt this and understand this. And if that happens, obviously the value of Bitcoin could be enormous, much, much bigger". And so if you look at this and you say, "Okay, there's like a non-zero probability, even a 1% probability". I mean, I thought it was much higher, but let's say somebody felt even like... Even then it would make sense to say "I'm going to put some money in that". So I felt it was a self-fulfilling prophecy that would basically get to mass adoption so quickly. And then we had, of course in 2013 bull market that brought a lot of people into the space and I felt that we were on track to mass adoption very quickly. And yeah, that didn't turn out to be that way.

Anna (00:23:44):
It was still a few years off, I guess. I don't even know if we are there yet. It's crazy though. Wild times. I wonder, given where you were positioned and the fact that you were interviewing all these people and you had seen the earliest Ethereum stuff, I entered the space so much later and I entered in Berlin, which is very Ethereum-focused in general. So a lot of my understanding of the space starts at Ethereim and then it goes out from that. But you were there before Ethereum and then after. I've always recognized a bit of a schism between those two ecosystems. How have you navigated that? You were also very Bitcoin, were you skeptical of Ethereum at the beginning? Or were you like "I'm into it"?

Brian (00:24:29):
I was unsure if it will work. But it was always clear to me that this is a very cool idea that has potential and I never had these, I would say, more tribal tendencies. And Epicenter used to be called Epicenter Bitcoin. And the meetup I started was the Bitcoin Start-ups Berlin Meetup. And at a later point, I renamed it to the Blockchain Meetup Berlin. And there was definitely some people who were absolutely not happy about this. I would say we were fairly involved in the whole block size debate as well.

Anna (00:25:09):
Where did you land on that debate? What did you want?

Brian (00:25:12):
I mean, I was very much in favor of increasing the block size, the arguments against it just did not make any sense to me. And I felt they were intellectually incoherent. And I remember we did a podcast with Mike Hearn. He was a Google engineer and he discovered Bitcoin maybe 2010 and he wrote the Bitcoin Java implementation. It was maybe the first other Bitcoin client. And he was communicating a lot with Satoshi as well. So he was very, very early. And then we did the podcast with him and he was much like "Bitcoin development is ground to a halt". And he was basically making a lot of very negative predictions about what would happen when the blocks get full. And he was like, "It's imperative we increase the block size now". And then I remember when we had that podcast, that was then on Reddit, you had 1000 comments and it was very...

Anna (00:26:17):
Controversial it sounds like.

Brian (00:26:19):
It was very controversial. And especially, it was, I guess there were a lot of these disagreements between different Bitcoin developers. There was Mike Hearn and Gavin Andresen, [they] were the main ones that were in favor of increasing the block size. And then you had on the other side Greg Maxwell and some of the other, especially, that would later aggregate in Blockstream, that were against it, but it was not so apparent that there was these divisions and, it came up and...

Anna (00:26:57):
You stepped into it, maybe by accident a little bit there.

Brian (00:27:01):
Yeah. So we did also some podcasts with Adam Back and Greg Maxwell too. Emin Gün Sirer was pretty involved in that debate too, cause he was very much on... He was definitely on the increasing block side. I did become a bit disillusioned with Bitcoin then, because I just didn't feel the arguments against increasing the block size were intellectually honest. Now in retrospect, I think maybe it was a good thing that it wasn't increased, I'm not sure. I think the only argument really against it having been increased or for leaving it the same is that, if it is this immutable thing and you cannot affect the rules and this barrier is super high, it also makes it much harder for governments, regulators, etc., to go in and...

Anna (00:28:00):
Demand a change.

Brian (00:28:00):
Demand a change, exactly. So I don't know, if the block size had been increased, maybe it would have shown this path of like, "Okay, here's how you change some of the core rules". And so in retrospect, maybe it wasn't a bad thing, I don't know. But the arguments were around decentralization and those just didn't make sense. And I was hearing there was this debate last week I watched, where there was also Elon Musk and Jack Dorsey and stuff. And Elon Musk was also like "Why is he bringing on the same thing again?" He was like "This doesn't make any sense!". But, I mean, this was written in 2008. And if you think of how much the internet speed have increased, that the block size is still the same, there's no technical justification for that.

Anna (00:28:51):
But one of the things I wanted to actually ask you is what other episodes really stand out to you? It must be so hard, cause you have 400 episodes. I know maybe you're not on all of them, but you have a lot to choose from. But is there any other big highlight episodes, where you were like, "This was a thing"?

Brian (00:29:09):
Yeah. I remember we did an episode with Juan about IPFS. Maybe that was episode 100 or something like that, but that was pretty amazing one, where I think... I mean, he's just such an incredibly eloquent visionary. So we had some, we did a bunch of episodes with Vitalik that were great. I mean, I very much enjoyed the Bitcoin episodes with Mike Hearn and Gavin Andresen. Another one that I guess I remember was, we did an episode with Emin Gün Sirer and Vlad Zamfir about The DAO, cause they published this paper of like, "Oh, these are some of the issues with the DAO". And then we did this episode with them and we were talking about it and talking about also these creators and decentralization and control there. And then they had... The hack happened a few weeks afterwards. And then afterwards you had the SEC report and they were quoting our podcast as evidence against that the DAO was a security. So that was pretty funny.

Anna (00:30:18):
Were you interviewing a lot of people during that time, around this topic? All the different factions and different proposals, were you following that?

Brian (00:30:26):
I'm not sure if we were doing that. I think we did a few episodes on it. I dont know how, I don't remember exactly how closely we were, but I definitely remember that one, where we talked about some of these posts about issues in the DAO.

Anna (00:30:43):
I think this is something that's inspired... Fredrik and I, when we started this, was the idea of not making a podcast that just follows news. It's much more about exploring a topic. I feel like Epicenter is definitely in that camp. You guys seem to explore your own curiosity a lot, you look for ideas that you're into, not necessarily just reporting the latest thing.

Brian (00:31:08):
Yeah, definitely. I think that was always our approach to it.

Anna (00:31:13):
Cool. Where we last left off in your story is the Cosmos world had just started, but I also want to for sure get to in this show, Chorus One, and that project, so where were you at and what led you to actually start a validator on the side of having this podcast that was getting more and more successful?

Brian (00:31:33):
Yeah, so I was working at Tendermint and I joined Tendermint, where I think it was 4 people. There was Ethan, Jae, Peng and then me and Ethan Fray, I think, joined at the same time. So it was a small team. I mean, I joined in January and then in April or something like that, there was the fundraiser. And in that year, the team grew from... ICF was established and the team grew from 5 people to 40 people. And Tendermint was very much of a mess as an organization. And it was just very difficult to work effectively in that environment. And I also helped with Full Node, just initiate that in Berlin, but then I felt like a bunch of stuff I worked on had come to some reasonable closure and just wasn't that effective in this. And then it again was clear to me that proof of stake is the future of how blockchains are secured. I mean, this is not, I would say, an original insight at all. Ethereum had already written in the whitepaper in 2013 about switching to proof of stake. And Tendermint was also around the same time, of the whitepaper. And so it was clear to me that... Tezos was also working on it then. And I felt we were going to have all these proof of stake networks, but in the Cosmos whitepaper you had this role of a validator, but I'm like, "Oh, who's going to be this validator? Nobody is working on this". And it just felt like somebody should work on this and focus on that. And so we started Chorus One. So it was actually in Mexico, in Cancun, that we decided, Meher and I, that was actually after the Devcon, there was a Cosmos retweet, which was the core team and a bunch of other people. And Meher was there as well, my co-founder at Chorus, and we decided, "Okay, let's, we'll start this company". And so then I left Tendermint and we started working on this validator. At the time it was like, how do you run a proof of stake validator? We had no idea. And we were also not, we did not have any knowledge about infrastructure and neither of us is really a software developer. So it ended up taking us basically over a year, almost a year and a half, to get to the point where we could run the Comos validator reliably.

Anna (00:34:17):
Cool. What was the challenge? Was it finding people? Because also at that time, Cosmos, it was still on testnet, I guess, during that period.

Brian (00:34:26):
Yeah. So the testnet and there were testsnets and... There were several challenges, definitely finding and building a team was not easy. So I think we also made some hires that didn't work out. And then we lost a lot of time that way. And the other thing was also, we did not really know where to focus. So the first engineer we hired had this idea that you have to have automated failover. So we were like, "uptime's very important", we have to have multiple validators running in different data centers. And then if one goes down, the other one automatically takes over. So we were like, "Okay, that's what people are going to expect". And so we've got built that. Now that's not easy to build. And so we've spent a lot of effort in that. We've spent a lot of effort in the dev app[?], it's a tool for key generation and key transmission, that you can split the backup. And that thing I think was probably a good investment and right thing to do. But for example, the automated failover was definitely the wrong thing to do, in retrospect. And it was a bad reward for how much effort it was, it just didn't make any sense.

Anna (00:35:38):
This is before these networks had launched, maybe Tezos, one of the early ones may have been there, but how were you funding this at the time, actually?

Brian (00:35:47):
No, there was not anything yet. I mean, Tezos had not launched. So there was no proof of stake network that was live at the time. Meher and I, we have both made some money from Ethereum and Bitcoin. And so we put in some money and then it was a small thing. We didn't pay ourselves and it was 5 people in.... So we had 3 people to pay in the first year, but yeah, we were basically funding it. We did also try to raise venture capital money in 2018 and that didn't work out. And then we switched a little bit, where we also started thinking like, "Okay, let's focus more on earning revenues, instead of trying to concoct some story that would appeal to VCs". And that was also, I think, a big turning point for us, because it just allowed us to focus much more on actually building the company and improving things, whereas before so much of my energy went into this fundraising thing and I was pretty bad at it. So, yeah

Anna (00:36:57):
Having had a start-up and having had the investor pitch experience myself, it is a time suck that you can't even imagine. And I completely can imagine that the minute you decided to drop it, your focus returned and you were able to actually build so much faster.

Brian (00:37:13):
Yeah, Anna, it made a very big difference. And then Cosmos... A big concern at the time was exchanges and custodians are totally going to dominate this validator game. And also there was this idea that it will be this commodity business and the competition is fully going to be on price and commissions are going to go to zero and then there's not going to be a business there. And I think that was a big question mark. Also internally we had a lot of discussions about that. We were always wondering, is this true? Is it not? Investors, it was very much that perspective. They just did not see the traditional network effects and flywheel that you have maybe more traditional start-up...

Anna (00:37:58):
Start-up companies. But this is crazy. I'm just trying to picture like you're building out this company and testing out validation strategies before there was a live network, and there was all these ideas, it sounds like, these conversations happening around what would happen, what could happen, trying to almost game theorize what will happen down the line. And you're trying to build a company, running while these pegs are probably changing. Where did you land with Chorus One? What strategy did you end up deciding basically upon launch of these networks?

Brian (00:38:36):
So one thing was we were running these validators and then Cosmos launched. And then, I guess, Loom was the first network we launched on and then Cosmos and then there came some others. And this wasn't making much money, so we were also wondering, is there really a business there? So then the other thing we did was we started saying, "Okay, let's do more work, where we are getting paid for contributing to protocols". And we had worked on this failover solution for Cosmos. And then we were like, "Maybe we can do something like that for another network". We had met the Solana team, they were just starting out. And they were very helpful in giving us interest to all kinds of VCs, even though I hadn't even met them at the time. And so when we went to San Francisco, we'd work from their offices and Meher and I spent quite a bit of time with them. And then we were like, "Okay, we can do something like that for Solana". And so we started also working on Solana and we had some grant from them and we were working on... Again, in retrospect, it was a terrible project to choose, but it meant we were very early on engaged in Solana and also contributing to finding issues and...

Anna (00:40:01):
Building tools, it sounds like. I mean, you started to become more than just an entity that runs infrastructure into maybe an entity that's building infrastructure. If not, maybe you're not deciding on the spec of the client or whatever, but you're actually building the tools.

Brian (00:40:19):
Yeah. We were doing that. And then we were also exploring different ideas. We had a bunch of different business ideas, especially Meher is very creative. He had some very visionary ideas that we'd spend a lot of time exploring and we were like, "Should we do this? Should we not do this?" In the end, often the decision came down to, "Well, we can't keep running the validators and do this other thing, because we're just too small to handle that". And then we were like, "We don't want to quite abandon the validator work". And so we ended up not pursuing most of these ideas. But interoperability, I would say, is one area, where that came up over time where we felt like this was just going to be important, and it's something we wanted to work on. Partially, it was because some of these ideas for protocols that we explored, they relied on there being interoperability and something like IBC existing. And at the time this seemed quite far away. So we were like, "Maybe we should try to accelerate that these bridges and interoperability exist, so that then later we could do some of these other ideas". We started working on interoperability. We had also a bunch of different projects. We did some work on Substrate to Cosmos IBC bridge, and then upgradability of IBC. We are working on a Cosmos and Celo bridge. Now we've also done some work around interoperability around Solana.

Anna (00:42:02):
How big is Chorus One today?

Brian (00:42:03):
So now we are 20 people.

Anna (00:42:05):
It sounds like such an organic growth too. It's like you started maybe very much from this validating space, but getting these contracts along the way, you were able to build up this project. How many devs do you have?

Brian (00:42:17):
Yeah. Maybe around 15, let's say, it's something like that. Probably around half is more infrastructure and validators. And then the other is working on some of these protocols. I guess, one more thing we've also been quite involved in is liquid staking. So we also understood that that would be a superior product in many ways, but we were quite Cosmos-focused. So we were looking at it a lot through the lens of how could this exist on Cosmos? And we received a grant from the ICF at the time, and then we wrote this research report. So there's 800 page document that, I think, especially Felix did a huge amount of work on. But also on one of the Cosmos hackathons, we actually built liquid staking for Cosmos. So we built probably the first version of a liquid staking protocol. So we did that at the time. Now, Cosmos, there was a bunch of challenges in making this happen for Cosmos. But then later there is, especially around the PTP[?] team, we started working on Lido, which basically is same idea, but for Ethereum. And then we became quite involved in Lido and contributed to that, we wanted to finish their validators, and have now also been building Lido for Solana. This is also one of the things that we have a team working on.

Anna (00:43:53):
What exactly is liquid staking?

Brian (00:43:54):
Yeah. So basically when you're staking, then what happens is that your token gets put into some kind of escrow, at least it's true for most proof of stake protocols, because their protocol needs to have access to these tokens to be able to slash them. And because it says, "Okay, it has to be locked up also, so that you're liable for your actions", but there are some serious downsides to this for users. I think the two biggest downsides are that if you now want to sell this staking assets, you have to first unstake it or unbound it and you have to wait and then you can sell it. So in Cosmos, this is 3 weeks, other networks vary, some of them are months, some of them are shorter. Some of them may be 2,5 days.

Anna (00:44:42):
In the Ethereum it's like forever for now.

Brian (00:44:46):
Yeah. So that's one thing. And then the other big one is that if you're staking your tokens, you can't use your tokens also for other things at the same time. And, in particular, a simple example is Maker. You can put ETH into Maker and then you can get a DAI loan out. But if you're putting ETH into Maker, then you're not earning the staking rewards. And, let's say, there's now 5% or something that you could be earning, in essence, it's an interest you are foregoing by doing that. So it would be really nice if you were able to put ETH into Maker, but also stake it at the same time, so that you can earn your staking rewards on the collateral. And that's pretty huge. I think it's a very big economic effect. And so the idea of liquid staking is basically that you still have the original staking token being put into this escrow, but then you have another token that gets issued, that basically represents a claim on that token. And now that other token, of course I can transfer to somebody else, so I could use some collateral for other things, without really affecting the underlying protocol. And then you're basically addressing both of those issues, so that you're allowing people to circumvent the unbounding period, they can sell immediately. And you also allow people to reuse their staking assets in your DeFi and in other applications.

Anna (00:46:21):
I actually remember when I first heard about it, it was Zcon 1, and somebody had the idea also for ATOMs, the idea that you could use some claim on it. But I'm curious when you first heard about that? Or who you heard it from?

Brian (00:46:34):
This is something that came up for us in the process of also trying to fundraise, because a big concern that investors had was that exchanges would be too powerful in this. And they would have this insurmountable advantage, because they can already do this, to some extent, because an exchange could say, "Okay, we're collectively staking all the ATOMs", but if you want to go from ATOM to something else, you don't necessarily have to go through an on-chain unbounding transaction, but an exchange can, on their database, change ownership immediately. And then of course you also have a fact that an exchange can say, "Okay, you can be on the exchange and you can stake your tokens through the exchange". But I mean, why not allowing people to use that to fulfill some margin requirement or use it in another way? So it was very obvious that an exchange could circumvent these issues quite easily. It was obvious to ask the question, how could you do this on-chain and basically through tokenizing the staked assets.

Anna (00:47:49):
You mentioned you're doing Ethereum with Lido and some sort of Lido for Solana, but do you imagine this existing for all of the chains eventually?

Brian (00:47:57):
Yeah, I think so. There are different, often technical, challenges in making it happen. For example, on Cosmos today, there's no smart contracts on the chain. So how do you do it? Maybe you could do it with IBC. I mean, this is happening, people are also developing liquid staking for Cosmos. And also you could use IBC or maybe CosmWasm, but it's not necessarily easier. We are also seeing that now with building this for Solana. It's just a lot of work and it's a lot of complexity, but in the end, the advantages are just very large. So I think you will see this for pretty much all the chains. And it's an interesting question actually, to what extent individual validators will even survive. Or if it's all going to be in some kind of liquid staking solution, I think that's very possible.

Anna (00:48:56):
The validation world is fast moving. I also want to mention on the show, since I have you here, we just, I think a month ago, when this is aired, we launched our first partnership with you guys. So the Zero Knowledge Validator is now working with Chorus One on some of the networks that we're working on. And the first one was Osmosis. And I'm glad that I'm having you on with that live, that I can share that. I just mentioned Osmosis and I want to revisit... Since you've seen Cosmos through this entire time, where do you feel Cosmos is at today? It still seems like it's a bit of a center, like you guys are still very active on the Zones and chains that are built on the Zones, but what does Cosmos look like to you, from where you're sitting today? And maybe we should also work in the fact that you're also involved in the ICF and stuff like that.

Brian (00:49:49):
Yeah, exactly. So basically the Interchain is a foundation, like the Ethereum foundation for Ethereum, the Interchain Foundation [is] for the Cosmos ecosystem. And I ended up joining the board of that about a year ago, and I've been on that and contributing to the Cosmos ecosystem through that. But yeah, if you look at Cosmos... I mean, in Cosmos you had a few core technologies. You had Tendermint, you had Cosmos SDK, you had IBC, maybe you can say it's Cosmos Hub. And overall it's pretty amazing, the amount of success that Cosmos has seen. Like Tendermint... When the testnet still for Cosmos, there was sometimes downtimes, but it has worked extremely well. And it's also something where... We run validators on around 25 networks now and maybe 10 of them are built on Tendermint and on the Cosmos SDK. And it's even something, where if we are onboarding a new Cosmos SDK network, in some cases it takes us 2 hours to do it. Whereas you can have some totally different network and it can be months of work to understand how this thing works. So I think Tendermint and Cosmos SDK have been hugely successful in dramatically lowering the cost of launching a new chain, really lowering the cost for validators to support it. It just works very well. And I think there's also some other things that have not received that much attention, but that are working really well, which I think for example, governance is... And if you see a lot of these Ethereum DAOs, they may have some governance token, but you have 1% or 2% of the token supply is actually voting on things. So you could easily have some big whales turn things to vote another way. And so I think these governance systems don't really work very well, but the Cosmos governance system really has worked well, because in Cosmos, for those who are not aware, basically what you have is that if you are staking and if you don't vote in the governance, your vote gets voted the same way as the validators. So there's this expectation as a reason that validators should pay attention to governance and participate and, of course, they're running infrastructure and they often have professional team, so they understand what's going on. And so you have this very high participation in that, often you have 50% of stake or more, that's voting on each governance vote. And at the same time, you also have the feature that, as an individual, you can vote directly. And in the beginning, I was also wondering, are people actually going to do that? But it's pretty cool now to see how much participation is there in Cosmos, where you often have now close to 2000, I think, token holders who are exercising those rights. The idea of Cosmos SDK was that you have this modular framework for building blockchain. So you can write different components as these modules and then combine different modules to make a new blockchain. So you have a staking module and you can just take that or you have governance module and can take that, or some other module. And I think that's working well and you have a whole variety of blockchains, but based on the Cosmos SDK, from Cosmos Hub, Osmosis, Regen, Terra, and many others. And then I guess the final thing is IBC. We've been working quite a bit on IBC, but internally it was all filled by questions on is it going to work or is it too complex? That was a big concern, but I feel like the Osmosis launch, and I think you mentioned you had a podcast on this, but Osmosis is really, to me, I think the user experience that you see there with IBC is just really nice.

Anna (00:54:11):
And IBC is that glue that basically creates the story... The Cosmos story always existed, but it was really these independent planets or Zones, as you want to call it, and it was really only until IBC launched that you could actually see Cosmos in its fullest form. It's been really cool to see that.

Brian (00:54:29):
Yeah, absolutely. And I think also maybe somewhat the special thing about Cosmos was... I think many blockchains, they focus a lot on raising money and working with investors. And so there was a big focus on how is there going to be value captured by some token. And Jae and Bucky [Ethan Buchman?], but I think especially Jae, had just a huge aversion to any kind of VC and investor, and he did not want to speak with any of them. And he was just not motivated by making money at all. And so I think that's also, especially about Cosmos, where the ATOM, as a token, doesn't even have any privileged role in the Cosmos ecosystem.

Anna (00:55:19):
I wonder what your take is on Binance chain? Also built on Tendermint. You're not validating on it. I just wonder, we're talking about that ecosystem. Would Binance ever use IBC? Could they click into all of this?

Brian (00:55:36):
Yeah. I would guess they will use IBC. So actually you asked earlier about podcast episodes. I think maybe the episode that has influenced me most was actually, we did an episode with CZ in 2018. And this is an episode that I maybe relistened 3 or 4 times. I have a lot of respect for CZ and also for Binance, to some extent. I think they did... It's of course a double-edged sword in many ways. And I think it's clear today Binance Chain is not decentralized at all, they have maybe 5 validators and they all seem to be run either by Binance or some sort of...

Anna (00:56:18):
Friend of Binance...

Brian (00:56:21):
...associates there. And I do think that Binance Chain is probably going to struggle to be decentralized enough to withstand regulatory pressure. So I'm not too bullish on it, but also not very informed about it, so...

Anna (00:56:39):
That's very diplomatic of you. It sounds like you're giving a lot of credit to how effectively they've navigated in this space. It is kind of amazing that they've been able to maneuver and move and shift what they are so often, so quickly.

Brian (00:56:57):
Yeah, absolutely. This is insane, right? I think Binance today, I was told recently, it's 4,000 employees now, and this was, they started...

Anna (00:57:10):
2017 maybe?

Brian (00:57:12):
When was it...?

Anna (00:57:13):
That's when I first heard about them.

Brian (00:57:15):
Yeah, it was 2017, it was the summer of 2017. And it was also when we did the podcast with CZ. Now, I had worked on the Cosmos fundraise and been involved in that. And in Cosmos we had, from Cosmos whitepaper to fundraiser was maybe a bit less than a year, 9 months or something. And there was a lot of work with lawyers and foundation and setting up and worrying about which kind of jurisdiction and how do you do it. And there's a lot of work that went into this. And this was also typical of what you saw in other projects, I felt like. And then when we were speaking with CZ, it was just okay. He had basically heard about ICO and was like, "Okay, I think we're going to do that the same day". And then within 2 weeks they had their whitepaper published, fundraiser completed and raised 50 million. And of course they ignored any kind of regulatory concerns. And they were very risk-taking, but just the speed at which Binance operates and has scaled is unbelievable. I don't think there's any other company that has reached such a scale so fast in human history. So when we did the podcast with CZ, Binance was 9 months old and they had quarterly profits of 200 million in that quarter, more than Deutsche Bank. I think it's a pretty amazing story. Now, I don't know how the story is going to continue, because I think they are very vulnerable to regulatory crackdown. And I think the backlash to crypto is going to increase and they will bear the weight of a lot of that.

Anna (00:59:10):
At some point in this journey that we described, you left Berlin, you abandoned the place of Room 77. What are you up to now?

Brian (00:59:20):
Yeah, so in January my wife and I, we moved to Portugal, so now living in Lisbon or near Lisbon and it's beautiful place. Actually, there's quite a lot of refugees from Berlin. I mean, my wife had wanted to live somewhere warmer and more Mediterranean for a long time and then we decided to come here and I think it's a nice place.

Anna (00:59:57):
The timing is great though, because it does seem like it's now emerging on, at least the European stage, as a hub.

Brian (01:00:04):
It is emerging as a hub, in a sense of you have a lot of crypto people moving here. In some other places... With Chorus One we are incorporated in Switzerland, Zurich. And I think there there is an understanding of crypto and the appreciation of its potential and a support of it. And even in Zurich we can pay our corporate taxes in Bitcoin or Ether. It is pretty amazing. I don't think Portugal is like that. I think in Portugal it's something where I don't think there's an understanding of crypto. I think it's, to some extent, it seems a little bit of an accident that they have this very crypto-friendly taxation rules and it's just a nice place to live. And a bunch of things that came together for people to come here. But I do think this is going to be one of the big themes in the next decade, it's going to be this clash and conflict between nation states and crypto. And I think it's the whole moving to a different place with your company or personally, I think that's going to be a key lever, that crypto also has to be able to maintain some of the flexibility and ability to create beyond the confines of regulation. If you look at technology, then I would say, how the internet has developed, we have built very powerful tools of surveillance and control. And if you look at China today, at their social credit score and some of the things they're doing there, they're really developing tools to basically completely subjugate a billion people. And that's very menacing and very concerning. And I think crypto is the only response that I can think of, but of course that's going to be enormously threatening for the nation states. So I think we're going to have some... There's going to be a lot of conflicts.

Anna (01:02:18):
Some wild times in the future? Well, Brian, I want to say thank you so much for coming on the show and sharing your story through. Also, like in the past, very wild times. And I want to say, obviously, good luck and I'm so excited that we get to work together going forward, as validator partners. It's always good to catch up with you.

Brian (01:02:43):
Yeah, absolutely. It's a huge pleasure for us, of course, to work with you and ZK Validator. And I think the whole idea of having validators is almost like an advocate for privacy tech and has more of a philosophy and value-based approach to it. It's super cool. I'm really excited that we can support that and work together with you on that. And thanks so much for having me. It's been a big pleasure.

Anna (01:03:09):
Thanks again, Brian. I want to say thank you to Andrey, the podcast producer, Henrik, the podcast editor. And to our listeners, thanks for listening.