Going West: PEC brings TigerTalks on the Road to California
Photo by StillNation Photography
Going West: PEC brings TigerTalks on the Road to California

The Princeton Entrepreneurship Council’s highly successful TigerTalks in the City series has expanded westward. The panel discussion program bringing Princeton faculty and alumni together around an entrepreneurial topic was held for the first time in the San Francisco Bay Area on March 21st, co-hosted by the Princeton Club of Northern California and Princeton Alumni Angels, at Facebook headquarters.  


“TigerTalks on the Road: Blockchain, Cryptocurrencies and ICOs” featured Ed Felten, Princeton Professor of Computer Science and Public Affairs, and director of the Princeton Center for Information Technology Policy; Dan Morehead ’87, Founder and CEO of Pantera Capital, an investment firm focusing on Bitcoin, other digital currencies, and blockchain applications; Diane deCordova ’83, Founder and COO of Parsec Media, the platform leader in time-based advertisement pricing, and Bo Lasater ’91, Vice President of Product at Mido Play, trendsettingcompany in the Lottery as a Service global market.



Felten on blockchain: 


Fundamentally, the basis for blockchain and cryptocurrency technology is around the idea of a transaction ledger. A transaction ledger is a list of transactions that have occurred in the system, one after the other. With the currency you start out with, a certain number of coins belong to each person, and person A can make a payment to person B. That’s a transaction. Those transactions get recorded in a ledger. If you follow along with the ledger, you know who has how many coins. That ledger will grow over time through the addition of new transactions, as new transactions happen. In a blockchain system, this ledger is separated into a series of blocks, each block having some transactions in it, and those are chained together to record the order in which they occurred. Hence the name “blockchain”.


Summarizing digital currency systems: 


What we really want is to have a worldwide distributed system where you can have all kinds of parties all over the world participating in a single transaction ledger. That means having a distributed ledger: a series of computers – imagine tens or hundreds of millions all around the world – that want to participate in this ledger system, and each one has a replica or a copy of the ledger. 


So if anybody wants to know what’s going on, they can look at their copy of the ledger. And as long as these copies of the ledger stay in sync and new transactions are able to be put into it, everybody will be able to keep up, and a worldwide, decentralized currency system can exist. 


But reaching consensus on the contents of the ledger is a hard technical problem:


It was not really solved until the invention of Bitcoin. “Nakamoto consensus” is the main breakthrough of Bitcoin, a way for a distributed ledger to reach consensus even bearing in mind that different people have different incentives: it works kind of like voting, except in order to get a ballot to cast in favor of a certain version of the ledger, you have to solve some hard computing problem. 


The advantage of that, is that you can’t fake how much computing power you have. You can pretend to be 10,000 people and cast 10,000 votes, but you can’t pretend to have 10,000 times more computing power than you actually.


The big technical challenge is the high cost of consensus:


For Bitcoin, it currently costs about $10,000 per minute to maintain consensus, and currently appears to use approximately 0.1% of all of the world’s energy consumption. That’s a lot! The system is worth a lot and there is a lot of investment in it. It sure would be nice if we could make that cheaper. Is there a consensus algorithm that costs much less and is still stable? We don’t know. But people are working on it. 


 


Morehead ‘87 on the difference between the beginning of the internet and Bitcoin today:


The internet is just a bunch of interlocking protocols to move data around. Even in the 90’s, Milton Friedman said the only thing missing from the internet was a reliable e-cash system. That’s basically what Bitcoin is. It’s a way to move money around the internet just like you move video and all kinds of other data. Here’s the tricky thing: these protocols – you can’t buy a chunk of them. All these very valuable protocols are essentially free. There’s no way to own a piece of it. 


So in the early 90’s if you were prescient enough to think, “This internet thing is going to be big, I need to buy a chunk of the internet,” you couldn’t buy a chunk of the internet. Here [with Bitcoin] you can actually buy a chunk of it – there’s 21 million shares of Bitcoin.


deCordova ‘83 on blockchain solving challenges in advertising:


There are a lot of issues with buyers of media actually knowing about where their ads go. Blockchain can potentially provide an audit trail and provide the details on the fees in that supply chain. [On] data privacy, blockchain can potentially give consumers the ability to actually control their data and potentially even benefit financially from it.


Where should blockchain be used? In databases that handle transactions (more than disseminating information), where parties don’t trust each other, where middlemen charge for trust, and where there can be trusted metrics to trigger transactions.


Lasater ’91 on the blockchain and the lottery:


We [at Mido Play] got into blockchain when we started dealing with the major players in the lottery space. Our customers would ask “How do I know when I buy a lottery ticket on your app that you actually executed it?” The answer is blockchain receipts.


With blockchain, we get provably fair and random results and we get transparency in the ledger and flows of money. But what we also like about blockchain – this is a little more subtle – it gives you shared infrastructure. We’re using all those computers around the world, using that 0.1% of world’s energy – we get to use those, we don’t have to build our own. We also can handle lots of currencies.



Watch the entire panel discussion and Q&A session in the archived Facebook Live stream:



View photos from the event on our Facebook page.


We thank our panelists for allowing us to share their presentation slides from this TigerTalks on the Road event


The website for the Bitcoin and Cryptocurrency Technologies textbook by Arvind Narayanan and Ed Felten of the Princeton Computer Science faculty, et al, referenced by Professor Felten during his remarks also includes additional resources, explainer videos, and a link for purchase on Amazon.


For more on blockchain and Bitcoin, view “TigerTalks in the City: Bitcoin, Blockchain, Cryptocurrencies, ICOs and More”.


PEC thanks the panelists for their time and insights; Michelle Moon and Michelle Gannon from the Princeton Club of Northern California and Princeton Alumni Angels for their help in bringing TigerTalks to California, and PEC Alumni Advisory Board member and University Trustee John Diekman ’65 for providing opening remarks.


— Wright Seneres
MORE NEWS
tooltip image
GORON RITTER 78
Director or the plutonium refinement in Yonkers.