Eric Benz’s Interview with Peerchemist: An Honest Look at Crypto Reality
Or is it better to say Bert Benz’s interview with Peer-monster..? Today’s Crypto Talk with Changelly is not like the others. Despite the funny cover, Peerchemist, Peercoin project leader, has a pretty serious approach to the cryptocurrency issue and is not one of those to blow smoke when discussing the future of blockchain. Want to take a look at the crypto industry with a grain of salt? Discover more about the Peercoin project and its plans for the future? Or maybe find out the fairest BTC price prediction from a tech-savvy guy? Settle in and have a read.
Eric: Hello Peerchemist, so good to have you at “Crypto Talks with Changelly”! So, for starters, could you share your background with the Changelly community? And how did you end up in crypto?
Peerchamist: Computers were just a hobby for me back then as I was just getting into Python and toying with the Raspberry Pi to automate some random stuff. Cryptocurrencies simply came along as something new and amazing, and like any good “hacker” I had to learn what crypto was about, how it works, how it’s useful and so on. That’s how I fell into the rabbit hole five years ago. I felt that it was worth my attention, and I was not wrong. My involvement with Peercoin started with my tinkering with the Raspberry Pi single-board computer and getting the idea that it could be useful for a PoS-based blockchain project like Peercoin. My entry as a developer to the scene was a now-retired project called Peerbox, which provided a secure OS for running Peercoin nodes.
Eric: What problems of traditional financial institutions should blockchain and crypto industries resolve in the first place? Is that inflation, centralization, personal data sharing, or smth else?
Peerchemist: Crypto has resolved a lot already, at least on paper. It is clear from the design of Bitcoin that it was designed to offer a solution to the unfair, untransparent and corrupt global financial system. Bitcoin has delivered something which is fairly incorruptible and transparent. However, it has approached the question of inflation with quite a naive world view.
The problem that cryptocurrency should seek to fix is not inflation itself, but inflation that is excessive, centrally controlled, and open to manipulation. The solution is not zero inflation, but inflation that is limited and decentralized. If it’s not decentralized, inflation is just invisible taxation.
Eric: Can you name the top-5 principles that you’re standing for in terms of blockchain technologies?
Peerchemist: The blockchain philosophy school I have subscribed to is heavily focused on decentralization and absolute transparency. I make a good Bitcoin maximalist in debates, except that I don’t like Bitcoin.
If the coin is not decentralized, then it makes no sense. Not only decentralized as in decentralized consensus but also economically decentralized. If the coin has 40% premine, then it’s no good to anyone but to the creator(s).
When it comes to PoS blockchain, especially recent ones which are all dPoS, I think they are missing the point as each of them limits the number of block producers. Everyone who owns coins should be able to make a block eventually and not just special status nodes.
About scaling, just make sure that the blockchain remains decentralized and trustless while you try to scale. Unless it’s an application-specific blockchain, which is not meant to be used by the general masses, then you can do whatever you want.
Eric: Can you tell our users in detail about the components of the Peercoin ecosystem such as Peerassets, Peerbox, and Perpera?
PeerAssets is our in-house developed proof-of-concept blockchain token protocol. It offers quite a lot while staying very simple. It’s a good alternative if you want to deploy on tried and tested “1st generation” blockchains and you don’t require Turing complete smart contracts.
Peerbox was an almost plug’n’play set-top box which runs a Peercoin node and can be used for minting. Peerbox is now replaced by Stakebox, via our partnership with Pi Supply.
Perpera is our in-house developed data audit protocol. The primary purpose of this protocol is to record cryptographic hashes of successive revisions of single-file documents in a manner which enables thin clients to easily query and verify document histories. Such histories inherit useful properties from the underlying blockchain, namely immutability and massive replication, and can, therefore, serve as proofs of existence. In addition to cryptographic hashes, users may also record a collection of URIs for each document, facilitating retrieval of document contents from off-chain sources. The goal is to impose minimal requirements on the blockchain, in terms of both features and storage space.
Eric: If one asks you ‘why should I invest in Peercoin?’ what answer will you give?
Peerchemist: I am actually a crypto perma-bear, so I always ask people if they really want to get into this circus. I say circus as it’s not regulated enough to protect the unsuspecting novice crypto investor. People come around and end up buying illegal security tokens, blatant scams, pyramid schemes, PnD cycles, and empty promise whitepapers.
Of course, Peercoin is none of those. It’s well established, proven and quite stable. However, it’s “pegged” to the overall circus, price-wise. So I will try to explain how that works to someone when they ask me.
If someone has patience, and does not expect moon Lambo in a month and can be disciplined enough to avoid chasing the next cancer-curing, perpetual motion machine, AI blockchain which is fresh out of the candy factory, I say sure go ahead.
Peercoin will stay around and it’s quite a solid digital gold, so if that’s someone’s cup of tea – go ahead. Needless to say that it’s also undervalued by a couple of orders of magnitude, so it can be a good long speculative play.
Eric: How would you consider the current stage of Peercoin’s development? Can you share some insights on the project’s roadmap?
Peerchemist: The project was in pretty bad condition before 2016. Pull requests and issues were ignored on the main repository, so the community was forced to maintain their own client called Peerunity. Peercoin’s co-founder Sunny King would code in his private repository and only publish the code once it was release ready, which sucked for contributors and other interested parties. There was no formal organization. There was no infrastructure to support the project (libraries, integration, documentation, general infrastructure like block explorers, etc.). There was no formal way to propose protocol changes, as it came down to nagging Sunny King on the forum chat or via private messages. It was impossible to get the project moving in any direction.
Since the formation of the Peercoin Team in 2016, the mission was basically to properly organize the project, set the core repository, write documentation, implement a procedure for proposing protocol changes (RFC’s), create the base of its ecosystem, and reboot active development. All of these goals are now implemented and the results are obvious.
The pace of development is at an all time high. We have issued three major releases since late 2017: v0.6, v0.7 and v0.8, two of which were hard forks while v0.6 was a soft fork. Our v0.8 hard fork in particular, which recently occurred on Oct 1st, included changes for over half a million lines of code, making it the biggest code change in the history of Peercoin. There are twelve proposed RFCs currently and some carry very good ideas like dynamic PoS rewards and cold minting. We have also adopted a new release philosophy, going with more frequent releases in order to ensure quality and allow for good ideas to be adopted as soon as possible.
Looking to the future we will continue the marathon with ever greater pace as now there is a Foundation which can hire and pay developers. As we approach v1.0, we hope to deliver all the currently debated RFC’s while adopting the latest desirable code from upstream Bitcoin and other related projects.
Eric: Now let’s talk about the community and the foundation. When was the Peercoin Foundation established? Which role does it play regarding project development to date? Also, what is the core mission behind the Peercoin foundation?
Peerchemist: Having a Foundation was a topic even before my time with Peercoin (pre-2014), but many resented this idea mostly due to the negative aspects of having a centralized organization. The Bitcoin Foundation, for example, ended up as a dumpster fire.
There was no need for a Peercoin Foundation before 2016, to be honest, though it would have been great to have one on the ice, on standby. The need for the Foundation only became apparent in 2016/2017 with the commercialization of the blockchain scene when startups were popping up left and right under the guise of “ICOs”. Then it became apparent that a legal face was required if we were to remain in “the game”, and able to secure new exchange listings, partnerships and other things which require a legal contract. Basically, due to an amazing amount of scams floating around, everyone and their aunt started requiring a legal contract so they could deny any legal responsibility.
I was the one that finally pushed for the Foundation in late 2016. I felt it was time to do it, so we went forth. The process was slower than one would anticipate as we took extra precautions not to give power to the wrong people. As Peercoin is a decentralized, open-source project that none of us own, it was important to form a Foundation which respects that. Thus, prominent and active members of the community were invited to join the Foundation board. The board is fully democratic and the absolute majority of votes is required for every decision.
Funding for the Foundation came from us who initially proposed it, as there was no time to wait for donations. We covered all the legal expenses out of our own pockets to set it up. After it was established in 2018, the project could finally be financially supported by community donations.
The role of the Foundation is to receive donations from the community and distribute them where the funding is needed, like paying for core developers, support staff and Peercoin related projects like our website, forum hosting, organizing promotional activities and others.
The core mission of the Foundation is to serve as the legal face of the project and support the development of Peercoin and related projects.
Eric: How to become a part of the Peercoin Foundation to affect the decisions made along the way of blockchain further upgrades?
Peerchemist: Actually, the Peercoin Foundation does not decide on the future of the Peercoin protocol. The Peercoin community decides on that. The governance concept is a simple meritocracy. If you have a good idea and you can elaborate it properly and write up an official RFC, the community will then judge it and decide if it gets incorporated into the future protocol. Of course, the cycle ends with all the stakeholders adopting the fresh code and minting their coins against it.
It’s open, and anyone can join and collaborate.
Eric: Recently we’ve issued an article about top cryptos for getting passive income. Many blockchain projects based on the PoS algorithm use the reward model to fuel the community and gain people’s interest in their project. What is your attitude towards such maintaining and increasing the number of token hodlers?
Peerchemist: Seeing PoS as a source of passive income is quite a naive view of the concept. But I understand most people observe it as such. Staking as passive income is surely hot recently, but I think many people don’t understand that the reward comes from the inflation of the overall system. I don’t think 10-20% yearly inflation is healthy or sustainable, but many are going for it recently.
Eric: Which one of the existing token offering models will dominate in the future and why? ICO (initial coin offering), IEO (initial exchange offering), STO (security token offering), or IFO (initial futures offering)?
Peerchemist: Back in the summer of 2018, I predicted that in the future ICOs would be done directly through exchanges. In Q3 of 2019, we saw the first IEOs. If you observe these IEOs more closely, you can see that startups are selling 5-10% of tokens at the IEO while the rest has already been sold to private backers, equity investors and other forms of a presale. I believe that in the future new tokens will be completely sold out pre-listing and list at popular exchanges only to create a speculative market. Why? Because it’s easier, less legal problems and more control over the market.
Eric: Do you believe there will be another wave of crypto hype like the one that took place in 2017-2018?
Peerchemist: Maybe, I don’t know. It’s too early to tell. “Normies” are still paying back the loans they’ve burned to buy bubbly crypto tokens. I think “normal” people need some time to forget the trauma and recoup.
Eric: Most of the crypto enthusiasts consider Bitcoin as a source of investment. What qualities must cryptocurrency involve to be the perfect asset for everyday use (online purchases, transfers, etc.)
Peerchemist: I believe that for crypto to be used by the masses, it must be scalable and have fairly low fees. However scalable blockchains are usually not decentralized, so in a way, it’s a step back. This is why I think that the second layer approach to scaling is likely the best way to go forward, as you retain the decentralized blockchain as a settlement layer and gain a scalable second layer to use for everyday payments. Ease of use is another aspect of it. But that will come naturally, I believe.
Eric: Ok, now it’s time to our traditional questions at the end of every crypto talk:) If you once met Satoshi what you would ask him about?
Peerchemist: “You could not imagine what will become of this, huh”?
With a healthy dose of cynicism in my voice, of course.
Eric: Another typical yet intriguing question: what BTC price will be in a couple of years?
Peerchemist: I am not bullish on Bitcoin, but knowing the market I would say it will bounce between $3,000 and $20,000 until the stars align again.