Q&A: How might blockchain 2.0 pan out?
Blockchain

Q&A: How might blockchain 2.0 pan out?

The blockchain has many limitations for businesses not least that it is expensive and can be difficult to scale. But what about alternatives?

IOTA – which claims to be a blockchain for the Internet of Things and uses Directed Acyclic Graph (DAG) technology instead of Distributed Ledger technology – received a lot of positive publicity towards the end of last year but then a pretty damning analysis from Multicoin Capital this January. This was, of course, a reflection of the company’s offering overall rather than just the technology.

Now new British startup, Fetch, claims to be working on something being in-between a blockchain and a DAG which captures the benefits of both. We learn more from CTO Toby Simpson in the lightly edited Q&A below.

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Can you describe what your company does?

We’re an AI and digital economics company. We’re applying novel approaches to digital intelligence with decentralized ledger technology, which we believe can transform the way we live and do business. Today, so much of life is an exercise in pushing square pegs through round holes: we want complex problems to solve themselves so that it feels like someone’s rolling a red carpet out in front of you wherever you go and whatever you do. We’re doing this because we’ve identified an opportunity to combine Distributed Ledger technology and AI to bring data and services to life.

 

What stage are you at with this venture?

We have built the initial technology and we’re testing it to make sure that it performs in the way that we imagine, and we’re having a lot of fun doing so: we’re building a new decentralized digital world and populating it with millions of autonomous digital entities, all of who are able to do business independently of human interaction. We’re bringing data and services to life so that solutions can be delivered to people.

 

IOTA has had a lot of attention over the last few months as a way of underpinning the Internet of Things and has been described by some as blockchain 2.0 – as it uses Directed Acyclic Graph (DAG) rather than a conventional blockchain. Yet a recent report from Multicoin Capital suggested flaws in IOTA’s particular approach. What are your views on DAG technology as a whole vs. blockchain?

Comparing the two is a touch like comparing a kettle with an oven: they both do different things and it’s hard to say which is preferable as it rather depends on whether you want a tea or a casserole. They are innovative approaches to creating decentralized ledgers: DAGs have huge potential for appending transactions at very high rates whereas the blockchain provides an effective “global truth” and absolute transaction order. Many new ideas are being explored to improve scalability, reliability and functionality of such systems and we have no doubt that there will continue to be exciting innovations in both spaces.

 

How does your approach offer something new in relation to the two technologies?

Our technology is a novel structure that combines concepts of blockchain with concepts from a DAG whilst adding some entirely new innovations into the mix. We do this because we’re doing something different that existing solutions can’t do: creating a decentralized world in which economic activity takes place and in which machine learning can construct increasingly accurate trust, reputation and market information as the data in the network grows.

 

What is the biggest benefit of this approach?

The most significant benefit of our network is how we link transactions directly to real and usable economic value. Our approach builds intelligence into the very core of a scalable ledger design. In our implementation, transactions are verified as a consequence of the network becoming more intelligent. In this way, the value of the Fetch token is inherently linked to real-world economic value that users can access and use. And the best thing is that the more transactions and data the users trade on the network, the more intelligent it becomes.

What are the pros and cons of machine learning and graph technology? How the two are now working together? Check out: The next wave of disruption: Graph-based machine learning

This is an extremely new space – and massively hyped – what other companies do you think are doing interesting work at the cutting edge of blockchain-type technologies?

It’s an incredibly active space -- the rate of innovation is extraordinary. In and amongst each of the steps that are taken are wonderful glimpses into applications that could never have been imagined. I’m pretty sure that the creators of Ethereum never considered applications like Cryptokitties when the network was first created! It really feels like the internet space in the mid-90s: an underlying feeling, which we at Fetch share, that decentralized ledger technology will form a fundamental part of our day to day lives in the very near future, even if it isn’t clear to everyone precisely how. Nobody in the early days of the internet predicted social networking and I expect we will continue to be surprised and delighted by the applications that are enhanced and created with decentralized ledger technologies. Distributed Ledgers mean that as individuals, there will be fewer layers between us and what we want and that gives us more control and more ability to have everything provided to us in a wonderfully tailored way.

 

Do you think ICOs will become as common as VC funding and if so, on what timescale?

ICOs are a new and valuable way of funding new technology businesses that, in our view, democratizes the investment process. As the industry matures, the way in which this happens will of course change: we’re already seeing a rapid shift towards a far, far more professional approach for doing such fund-raising that gives a clearer view to those taking part. We expect to see this whole area continue to grow in the coming years as it is highly inclusive and opens the opportunity to support such new ventures to a far, far broader audience of both professionals and those that have a strong interest in the field.

 

Is there anything else you’d like to share?

A decentralized world distributes the power to get things done away from centralized entities and to the individuals that live in that world. DAGs, blockchains and ideas not yet conceived are going to provide the foundations for a new economy where we have access to more information, better services and more joined up solutions than ever before.

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