Episode 175 - Luke Powell of the Decred Project

You're listening to the only place on the internet that offers the perfect blend of high-quality premium cigars and cryptocurrency news and commentary. Welcome to cigars and crypto. Now here's your host, Invest New York. Good evening, ladies and gentlemen. Welcome to this episode of cigars and crypto. You know who it is. You should point to our let me tell you. I'm so happy to have one of

the core developers for Decred with me today. Mr. Luke Powell, Luke, how are you, sir? Doing well. Thanks for having me on. I'm excited to be here talking with about Decred. Yeah, man. Let's get in popping, baby. So tell me about yourself. Luke, first, how did you get into crypto? States back to roughly 2016. I was out in San Francisco at the time. I was doing

state that loud values individuals. You know, youtube titles we've seen a transcending code and we've got 20 plus out of roughly 18. So, everybody at a community when it comes to, you know, every powerful nominee. So, exactly the kind of upgrading developers. That's beautiful. That's actually great segue into Decred. How did you get into Decred? What was it about Decred that? Really resonated with you and

made you say, you know what, I want to take this path. Yeah, so for one, it was, you know, one of the biggest things that I tracked in me was the quality of the team. So, the original team that launched Decred, they had previously built BTC suite, which is the GoLang Bitcoin implementation. So, in software, you have what are called protocols like Bitcoin is a protocol.

And when you have a protocol specification, it's just the, the, what the protocol should do written out and plain English. And then you go in and you implement that specification using a specific programming language. So, the original Bitcoin implementation was the in a programming language called C++. And that's still referred to as the Bitcoin core implementation. But as protocols grow in popularity, you typically want to

implement them in multiple different programming languages. Right. You can attract a wider developer base. If there are bugs in one implementation, they may not be in the other implementation. So, it kind of adds resiliency to the system. And so the Bitcoin, the original Decred developers built the, the second Bitcoin implementation. This implementation called BTC suite in a programming language called GoLang. So, they were one of

the, the few teams in the world at the time that actually had the experience building Bitcoin from scratch, like from zero to a working Bitcoin implementation. And so the quality of the team, I was newer to the industry at the time. I wanted to join a project where I could come up underneath the team that had that type of expertise. They were doing something that was

very differentiated from Bitcoin. You know, a lot of projects that at the time have made minor tweaks and variation to Bitcoin. You know, just one example is Litecoin, right. Litecoin is a fork of Bitcoin with just some minor parameter tweaks, whereas Decred, it, it was, it takes a lot from Bitcoin's original design, but it is its own totally separate thing. And it addresses points. It does

things. It makes design decisions that allow it to do things that Bitcoin can't do. And we can get into exactly what those are later, but that, that interested in me that it was actually this novel project that, that I could see going places and having a very differentiated use case. And then the third thing is the ability to actually just get paid, get a job in

the cryptocurrency industry at the time. This was still, you know, 2016, 2017. There really weren't a whole lot of developer jobs available. And especially for like somebody newer to the industry. And so one of the things about one of the, you know, things that differentiates Decred is the fact that it has this treasury where 10% of every block reward gets set off to the side into

this treasury. And that's how you pay the, the Decred developers. And so it has the ability to actually higher talent, higher developers, higher newer developers and bring them along in their, in their career pass. And so that, that all those three things that combination of those three things is really what drew me into the project and got me and she didn't. Excellent. Man, excellent. You know,

I have a lot of people who talk to me all the time. Um, various projects that they work on. Mm hmm. I, I am one of the few people who does not use the term shit coin loosely. Okay, because there are some shit coins out there. I don't think Decred is one and a lot of the Bitcoin Max ones that follow me a lot of Max

bullets that like me are going to be pissed off when I say this, but you know, fuck up. I'm okay. This is my shock to see what I want to say. Okay. One of the things that I had an opportunity to look into Decred and understand is, um, there is a security component to Decred. And there is a governance component to Decred and Decred is doing

a lot on the continent of Africa in terms of philanthropy and hiring developers and creating ecosystems where people can use it. Right. So you talked about. The goaling, um, the goaling implementation of Bitcoin core and how Decred borrowed some things from Bitcoin to create this new entity with its own use case. Right. You talked about how it impacted you when you first looked under the hood.

Um, and you decided that you wanted to travel this road. Right. So now I know who you are and where you are. So tell me about Decred. What is Decred and how is it different from everything else? Sure. So Decred and Bitcoin in my opinion are kind of two sides of the same coin. They both, uh, they're both proof of work based. So Decred is a

hybrid proof of work, proof of stake, but the underlying mechanism is proof of work. Rox, new blocks over war are created using proof of work. And then the proof of stake side validates it, which is very different than a pure proof of stake implementation. So they both rely on proof of work. They both take this, um, limited scripting language. Uh, you know, something like Bitcoin has

a very, the things you can do with it is very limited, but that's for security reasons. Right. The more you open up this scripting language, you know, something like Ethereum, where you have a turn complete programming language. When you open something like that up, it allows for more experimentation, but it also means a larger attack service. And that's why you continue to see these, you know,

hacks on Ethereum, these never ending hacks because of the fact that you just have this, uh, this turning complete programming language that let's develop. Network public, uh, you can see the moment you want to see how things will work. So we're gonna do it however they want, which also means that they can make a whole bunch of mistakes. So it takes this limited scripting language approach.

And then it also takes this approach of protecting the base layer, right. Scaling is gonna be done on higher layer solutions like the lightning Network of things like that. Decor actually has a lightning network network implementation. That it pulls from the Bitcoin implementation, um, and they're actually, uh, compatible with one another. So the way they take these very the same approach when it comes to. To

long-term goal, store of value, security, uh, reliance on proof of work is the underlying consensus mechanism. But it adds in this proof of state component. Like I said, a hybrid proof of work proof of state. And the reason it does that is for the governance benefits. So Bitcoin was designed to have this informal governance. It doesn't have the ability to adapt and evolve necessarily over time,

right. It was designed to be very hard to change. And that is, uh, you know, that that is seen by many in the Bitcoin community as a good thing. Now, Decor takes the opposite approach. It takes this approach of, okay, well, what if we still rely, you know, take a lot of the same assumptions as Bitcoin, but we add this governance layer so that the protocol

can adapt and change over time. What I mean by that is that, uh, in proof of stake, right. So blocks are mine via proof of work. They're validated via proof of stake. That allows for the stakeholders. People own Decor and are locking it up and staking it to basically use that as governance rights for the protocol. So anytime a hard for change is proposed, it has

to be voted on and approved by 75% of the Decred stakeholders, the actual coin holders. And the reason is because the philosophy is Decred is, you know, change is not bad. We want to be able to adapt and evolve over time, but you still have to do it in a decentralized way. And the way you do that is you allow the coin holders. The people with

skin in the game, you know, you can't do that. The game to make all the decisions, right. It's not the developers. It's not the miners. It's not the economic nodes, exchanges and things like that. It is the actual people who hold the cryptocurrency. And they ultimately have all the control in Decred. So like I said before, Decred has a treasury 10% of every block work gets

set off to the side into a treasury. And the Decred stakeholders actually control that treasury too. So they decide how those funds get allocated. They decide, you know, what teams to fund, which road maps to fund, they decide, you know, what improvements should be made to Decred over time. And so when I say like Decred and Bitcoin are kind of two sides to the same coin,

what I mean by that is they both have the same goal. They both make a lot of the same security trade offs, but Bitcoin was designed to be hard to change. And Decred was designed to be able to adapt and change over time. And I think that, you know, initially they started off pretty similar, but the more time goes on, the more time goes on. They're

not the more they diverge, right? They're trying to do two very different things. I don't necessarily think that they're even competing with one another. You know, they're they're just two very different things that are on their own past. And I, yes, that's kind of a just broad overview. You know, I think it's important to say that a lot of people have this winner take all mentality,

right? And I don't believe in diametric composites, right? For example, I think the most important thing is to have a lot of people in the past that are not the most important, right? For better or for worse, I don't believe in diametric composites. People say, you know, the dominant global currency is a US dollar. And then I remind them that people still transact and silver and

gold. People still in touch, you know, they still transact in oil. People still barter or if you're from the northeastern north northeastern United States, they dicker. We're it's trading him bartering for things. Okay. So the idea that Decred wants to differentiate itself from everything else. Sounds good to me because I think there is enough space in this environment for some things to exist. And I really

do like the value proposition that Decred offers to its users. So I want to circle back a little bit to some things because most of the users, most of the people who listen to me are not really like blockchain savvy people. And so you talked about a concept. Turing complete. And I asked people when they talked to me to always explain things to me like a

five year old. And this is my five year old explanation for what Turing complete is read, write, move, stop. Right. Those are the four basic components of a Turing complete blockchain. And you're saying that Bitcoin is not Turing complete. And that's a security feature as opposed to security flaw is Decred Turing complete. No, Decred takes the same approach as Bitcoin. It actually it's so it's called

a scripting language. You can think of it as a programming language, right. The scripting language that it uses is derived from Bitcoin, but with some additional things added to it. Some some things changed about it. But it is very much related to bitcoins. Cool. Cool. So we know who you are. We know how you got into the space. We have a 50,000 foot overview of what

Decred is, right. Tell me about the Decred community. Who is using Decred and what are the predominant use cases that you find people tell you they use Decred for. So right now is very much still a speculative asset, right. So the Lightning Network will really some very similar Bitcoin, the Lightning Network will really be what allows Decred and Bitcoin to be used. So it's more as

a payment technology. But right now is still a speculative store of value. So what's interesting about Decred is this the the treasury allows the Decred so when you work for Decred. Okay. So I'm considered a Decred contractor Decred itself like there is no legal entity anywhere, right. So there you don't work as an employee of Decred. Right. I get paid in Decred all of my income

is in Decred. So it comes out of that treasury, right. But it's the the Decred stakeholders are deciding how those funds are allocated by voting on proposals of teams to fund road maps, things like that. But basically like we have this. Contents this global contractor network and the ability to fund development out of this treasury, right. Means that we can fund people anywhere in the world.

Like you don't have to have a bank account to become a Decred contractor, right. Because it's all cryptocurrency based. Decred is a very global organization. A lot of the original team was based out of the US. But now the non US parts of the team far outweigh the US parts. And even just on on my team, the team that I run, I'm the only person really

in the US. We have people in South America. We have people in the least we have people in Asia. And then I know there are other teams like the mobile app team is very heavily draws very heavily from developers in various parts of Africa. So there's a lot of different parts of the project. And each part is kind of like run as its own little entity.

So each code base, each code repository has a team lead. And that team lead is essentially like its own little company with their team. And they can run things how they choose. They have their own culture. They may draw for like a different part of the world and other teams. But as a whole Decred is a very diverse contractor base. And right now that is, I

would say one of the primary use cases. is building out the developers, the contractors that are building the infrastructure and building the project out to allow it to be used in everyday use cases like payments and things like that. But as of right now it's still very much a speculative store value very similar to what Bitcoin was in its early days. Decred is almost what five

years old right now. So it's following a very similar trajectory. Tell me what's the future for Decred? Where, where do you? Decred hotlers Decred developers see Decred in the next three to five years. So Decred is going to be able to fill in the gaps and do the things that Bitcoin can't do. So let me, let me give an example of that. So on chain privacy,

right. Very few people in the Bitcoin like I don't think anybody in the Bitcoin ecosystem will tell you like privacy is a bad thing. Everybody wants privacy. So I think that's a very important thing. But unfortunately it just wasn't added to Bitcoin early enough that it was able to gain really widespread adoption. Like there are privacy techniques in Bitcoin, you know, coin joins and coin mixing.

But the adoption is just not that great. And it's, I think it's largely because it's hard to incentivize that behavior. It's, it wasn't a part of necessarily the early culture because Bitcoin was already doing so many new things. It just didn't have the ability to implement privacy. So it's not really a part of the early on. Whereas with Decred, we were actually able to implement on

chain privacy using the same exact techniques, using coin joins. But we are able to integrate it with the staking process. So when you own Decred and you want to stake your Decred, right. You lock it up. And then you lock it up for a random period of time of up to four months. And then when it gets selected to validate a block, then you vote on

the validity of the block and you get a little reward for that. So you can't just switch privacy mixing to that process. So over 50% I think it was closer to 60% right now. All Decred and circulation is being state continually, which means like if you're, you're continually locking it up, it gets selected. You validate a block. You get a reward. Then you lock it up

again. So every time that you're locking it up, but you have the ability to mix your coins in a coin join. And so the prack, the end result of that is that Decred has a very, very high mix rate for the end result. Hmm. My prrags make that really beGOD. Our part is going to fix this instruction interval in those components. Just like when we were

doing today, continuing the tests you have before. Your first punch of this complexity and actually obfuscates potentially bugs that could be causing problems or could be causing a hidden inflation. Whereas if you keep everything transparent, right, you know beyond a shadow of doubt that there's no bugs. There's no hidden inflation. But there was really it was very difficult to get people to participate in this privacy

and mixing in Bitcoin. But in D.C.R.A.R. We mix somewhere around 300,000 D.C.R.A.R.D. So if you look at the Bitcoin numbers, it is multiple orders of magnitude lower. You're talking maybe a couple thousand Bitcoin a day are mixed. Whereas in D.C.R.A.R. it's 300,000. They both have the same total supply 21 million so that you can directly compare them a one-to-one comparison. And so that's just an example

of D.C.R.A.R.D. was able to do something Bitcoin wasn't able to do, you know, just because of Bitcoin. Design decisions, this ability to make it very hard to make changes. This Bitcoin is on this kind of like set path and you can't really move it from that set path. Whereas D.C.R.A.R.D. is much smaller, more nimble and can make some of these changes that just Bitcoin won't be

able to even though it would be beneficial. Like not many people will argue that if Bitcoin had more mixing it would be a bad thing. That's just not really an argument you'd hear very often. But you're going to see many more of those examples as time goes on. You know, the ability to make hard fork changes means that we can tweak things like for example, even

with higher layer implementations like the Lightning Network. As we discover, you know, user experience pain points or issues with the Lightning Network, we can tweak our base layer if we need to in order to make those higher layer implementations have a better user experience. And so that's just a little bit more. So that's the direction that you're going to see D.C.R.A.R.D. head in over the next

three to five years. It's just doing these things that Bitcoin just necessarily can't because of the design and decisions that it made. Right. One last question before I let you go. I'm an old school Bitcoin minor 2014. Can I point my old ant minor S1 at the D.C.R.D. Network and mine D.C.R.D. So D.C.R.D. is Blake 256 not shot to 56. All right. Unfortunately, no. All right.

Cool. So Luke, I want to take a moment to thank you so much for joining me today. I really do appreciate it. Tell folks what we can find you in the D.C.R.D. C.R.D. project online. So you can find me at Luke BP on Twitter and then the D.C.R.D. project is at D.C.R.D. project. And yeah, check us out. Thanks for having me on. I really appreciate it.

I'm going to go ahead and do a little bit more. No problem. Ladies and gentlemen, Luke, pal, thank you, sir. Have a great week. Okay.