Recently we have seen protests from taxi unions and government action against the likes of Uber and Lyft around the world. This in turn was the catalyst for an idea by company La’Zooz to decentralize the same offerings by creating a peer-to-peer version of the same service and no-doubt some traction will be gained there over time.
Decentralisation has slowly become a mainstream buzzword. I had a conversation with Vikram Kumar, better known as former CEO of Kim Dotcom’s Mega. Kumar is currently focused on his new start-up called Swerl.io. Swerl is a value-add development house destined to create some of the first applications on the decentralised computing network called C-WEB (Computing Web) which would be open sourced.
This catchup covers Kumar's views about his startup Swerl, and how it relates to the technology behind bitcoin, a crypto currency on the rise around the world.
But first, a brief history of computing
In the beginning was the CPU
The computational work has traditionally been centralised. Ie your work on your spreadsheet is crunched by your computer’s CPU. Once upon a time not too long ago, computers which could barely calculate prime numbers were the size of a bus. Now, much more complex work is done by the personal computer.
Then came the cloud
Ten years ago the rise of ‘cloud computing’ came into being, the concept of spreading the ‘work’ across many computers. This transformed entire industries and work methods as its benefits were countless. Cloud-Computing notably represented the opportunity to access powerful processing power on demand thus not requiring millions to be poured into hardware for various computational requirements. This breakthrough resulted in popular products like DropBox, pretty much any SaaS offering (Software-as-a-Service eg - your online accounting package?) and to a large extent social networks like YouTube and Facebook heavily depend on servers spread around the globe - 'The Cloud'.
Rise of decentralised computing
Now is the beginning of the decentralised computing era. Decentralised computing is set to expand beyond cloud computing by decentralising computing power further.
Q: Your career began as a marine engineer with the Merchant Navy, when did you gain an interest in computing and technology?
A: I was Interested in the internet from the early days, I taught myself everything I wanted to know. I was particularly interested in how people in business uses technology vs more the hands-on coding role. Technology to me represents a whole opportunity for fundamental change. Both in NZ and in global context. Particularly how the internet transforms entire industries and but also individual companies.
Q: How was working with Kim Dotcom?
A: Very interesting. I had 2 roles, one was in MEGA and the other was in politics with the Internet party. [Kim.com] has a very good view of the global internet opportunity and great understanding of business models and ways of monetising internet services. I learned a lot within MEGA but a great deal more working for the internet party. I was especially fascinated how a political party would look like in the internet age.
Q: Would you say the internet age is still yet to reverberate out into politics?
A: Yes. This is an area that hasn’t really changed all that much and is ripe for change. Some of the work we did in the internet part was early indicators, for example an open source software called loomio was utilised inside the party. This came came out of the observations we made during the Occupy movement, which saw decision making happen in new ways, in an environment that was different to traditional political parties; bottom up tools for decision making. In a political party, with thousands of voices, decentralised tools like loomio help make decision without hierarchy.
Q: What initially brought bitcoin to your attention?
A: I’ve been tracking bitcoins for a long time. Introduced [to me] by word getting around.
What really interested me was about a year ago, I wrote a blog post about how the really interesting thing was not the currency but the protocol, and the distributed technology that’s possible with blockchain’s technology.
Looking at some of the common use cases that were coming up like distributed storage or online voting or new domain name systems were early examples and one of the things that really interested me was how the blockchain essentially allowed for the truth to be completely distributed and allowed for people that may not know or agree with each other the ability to come together like never before.
Vikram Kumar: After the next big thing post cloud computing (Pic owned by Vikram)
Q: Where do you see bitcoin’s potential?
A: More from the protocol blockchain level. The currency is interesting but whenever there is an interface between crypto and fiat (existing financial system), there is friction, and then banks, regulators come on board and it makes projects very hard with all the financial compliance considerations.
Q: Was MEGA into Bitcoin?
A: No but MEGA was essentially a crypto company. It didn’t use blockchain technology but it used encryption at end-to-end in the cloud storage. The biggest problem that I found with cryptography as a whole was key management. Bitcoins did it elegantly and similarly MEGA offered automatic, no-plugins for users and it “just works”.
Bitcoin needs this UX (user experience)/UI (user interface) intuitive, quick “grandmother test” (can your grandmother use this technology) for its mainstream adoption.
Q: Where do you see the most exciting developments in bitcoin happening over the coming months?
A: I think the most important aspect is how government and banks start reacting to bitcoin. There are signs of some bankers with a quite an enlightened approach- who aren’t necessary focusing on bitcoin but cryptocurrencies in general - understanding the technology’s potential. I also see a bit of a plateauing off, of bitcoins. There hasn’t been much of a surge in the last 10 months so the question is how will the community continue to drive towards mainstream adoption.
Q: What about the steady increase in transaction volumes and new wallets generated?
A: I think it’s a stranded technology adoption life cycle. You have the early adopters, so when you exhaust the early adopters, the next growth is from starting to tap into the mainstream. I suspect a little bit more sorting out from banks and government is required for the clarity required for business to get on with business and therefore to realize mainstream adoption.
Q: Do you ever see bitcoin replacing a sovereign fiat currency?
A: I think we will have bitcoin increasingly used in the digital world and the fiat world continuing to dominate the physical transactions for the medium term. It’s possible however, particularly in weaker countries, or in countries where a central bank surprises people with drastic changes. Symptoms of absolute power by a central bank.
History has shown that if countries don’t look after their own currencies people will find whatever works as a replacement. Bitcoin under these circumstances is just one such option.
Q: Can you explain what the C-WEB can do which the internet cannot?
A: Right now the internet switches data packets. Its got routers that switch data packets – that’s the current internet.
What we want to do is build an application layer that switches transactions.
Here’s a second angle to get an understanding of the C-WEB. Right now when people code software they code it for a known computing device like a server, a computer or a phone. We want to adopt more the bitcoin approach where the computing can be done by anybody, any node and focus not on the software code for calculations but focus on the data. Code goes to the data and no longer the other way around.
To me that’s fundamentally different because you will then have actual computing happening right across the internet. People will code without knowing specifically which node will execute the code. This is fundamentally different. Moving from packet switching to transaction switching.
Q: I suppose we should further define the term 'transactions' in this case?
To define the term transactions under this viewpoint - essentially a transaction is a state of change in a smart contract. The world is run on agreements: interpersonal or machine to machine.
Q: Is Swerl as a company then comparable to the Google of C-WEB?
A: That’s the vision: We say our vision is at the highest level to explain what we do. But the problem is we need to build this first for people to understand, which is why we are open sourcing. Swerl will be focusing on services the C-WEB will initially require, such as trust in computing resources and trust in data. There’s also an identity layer required. Anybody can use open source, but to really make it into something usable, there will need to be some additional value-add service which is where Swerl will be focusing on.
Q: How is Swerl.io positioning itself to take advantage of bitcoin or the technology behind it?
A: The work we’re doing with Swerl is half blockchain and half distributed computing. We’re not tying ourselves to bitcoin as a crypto-currency. We’re tying ourselves to the blockchain technology. I also see that many of the people in bitcoin are quite silo’d with thinking in terms of financial products only. Like futures, derivatives etc. There is good advances on the financial side but what’s exciting for us is the blockchain for its general computing applications.
Q: What is Swerl doing with blockchain technology?
A: We got the C-WEB, which stands for Computing Web, but this is going to be open & free (open-sourced). Right now we have the WWW which is for documents and information. C-WEB is the equivalent for communications and transaction.
Q: Sounds like a white-paper is in order?
A: Yes the C-WEB is quite a different approach and hard to wrap mainstreams head around.
Q: Which is why we are publishing a whitepaper in time for the Bitcoin South Conference, where we will unveil the C-WEB project for the first time in public.
Q: If there’s 1 thing you would like people to appreciate about bitcoin, what would it be?
A: Whether its bitcoin or some alternative crypto currency down the track: this is going to happen. We’re no longer talking about an 'if'. What we should put our minds to now is ‘what are the implications’ and ‘what are the opportunities’.
Q: Thank you very much - we look forward to your talk at Bitcoin-South.
Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription, an Idealog t-shirt and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).