Proof-of-Stake Founder Sunny King on Tackling Bitcoin’s ‘Energy Problem’
Sunny
King, CMC’s next Crypto Titan, is the inventor of the proof-of-stake
consensus mechanism, as well as the creator behind three blockchain
projects: Peercoin, Primecoin and most currently, V SYSTEMS. While
King prefers his privacy (like CMC founder Brandon Chez, they both took the
stage at CMC’s The Capital conference in masks), that didn’t prevent him from
sharing his crypto origin story when he set out to “improve” on
Bitcoin way back in 2011. What got you started in crypto? I
started in 2011 with studying the intricacies of Bitcoin design and
trying to improve upon it. Peercoin was my first design to tackle the
energy issue of Bitcoin. Peercoin eliminated energy
consumption for consensus by introducing proof-of-stake
consensus. My second design was Primecoin, which tackled the
energy problem from a different angle. Primecoin is proof-of-work
consensus, but uses more intelligent prime proof-of-work instead of
hashcash. How has a failure in crypto set you up for better
decision-making? Do you have a favorite failure? I try to learn from
others. Designing and implementing new technology is one thing, making a
successful venture is quite another. There are many aspects to it. It doesn’t
have to be failures, I think I can appreciate the experiences of Jobs, Musk and
maybe General Magic’s AMD, for example In the last year or so, has your
philosophy or belief about crypto changed? My philosophy about
crypto is that it brings about a new class of private
property I call “strong private property.” Even though they
are virtual assets rather than real assets, it is more and more accepted
that the line between the virtual and the real has blurred. I still
believe strong private property embodied in crypto will bring about
revolutionary changes to our civilizations. It is most definitely an era to look
forward to. What advice would you give to someone who’s looking to enter the
world of crypto? My recommendation to anyone new to the crypto
world is to experience it first hand. Don’t just store your coins in exchanges
like with stock brokers. Use the non-custodial wallets, properly keep the
passphrases and learn the principles of brain wallets. And begin to take some
cryptos for jobs or favors! This is truly the new experience with the money of
the virtual worlds, with freedom and privacy. Learn risk
management, practice self-responsibility and self-accountability. Given how the
industry has evolved, do you think the industry at large should
embrace regulation or champion freedom and deregulation? This is
probably a hotly contested topic. The industry has evolved into
two distinct branches of development, one as decentralized financial
infrastructure, and the other as a general technology infrastructure for
diverse applications. Cryptocurrencies have a culture for freedom and
deregulation. However, blockchain in general would likely have wider use in
society as a technology platform — but the two branches are still closely
connected. As a disruptive technology with the capability of changing our
civilization, of course there will be some compatibility issues with the current
society. I think the industry as a whole has always been pretty open to discuss
the various matters with establishment. On the other hand, the lawmakers
probably also need to be more open-minded and consider the benefits of the new
technology, making necessary adjustments. What is your vision of the future of
the crypto industry? We have cryptocurrencies and strong private
properties in the virtual worlds. The virtual worlds have more freedom
and self governance. The real world, however, despite the progress of science
and technology, could still be subject to war, poverty, violence and resource
shortages. Of course, I mean there will be cultural differences between the two
worlds, yet they are still connected. Which world do you prefer? It’s probably
still too early to judge the relative merits of each world. Debunk a common myth
in crypto. Regarding monetary value, a common misconception is that
energy consumption gives it “intrinsic value.” This is
demonstrably false by proof-of-stake consensus. Proof-of-stake consensus does
not require energy consumption, yet proof-of-stake coins have taken a
significant market share. This proves that monetary value does not derive
from energy consumption. Monetary value could derive from monetary
utility alone. The more people acknowledge and use it as money, the higher
monetary base value it achieves. This is an important insight the cryptocurrency
experiment contributes to monetary economics. This interview has been edited.
Enjoyed reading our Crypto Titan series? Catch our previous interview with Emin
Gün Sirer, designer of the first proof-of-work cryptocurrency. Or check out the
full list here.
Sunny
King, CMC’s next Crypto Titan, is the inventor of the proof-of-stake
consensus mechanism, as well as the creator behind three blockchain
projects: Peercoin, Primecoin and most currently, V SYSTEMS. While
King prefers his privacy (like CMC founder Brandon Chez, they both took the
stage at CMC’s The Capital conference in masks), that didn’t prevent him from
sharing his crypto origin story when he set out to “improve” on
Bitcoin way back in 2011. What got you started in crypto? I
started in 2011 with studying the intricacies of Bitcoin design and
trying to improve upon it. Peercoin was my first design to tackle the
energy issue of Bitcoin. Peercoin eliminated energy
consumption for consensus by introducing proof-of-stake
consensus. My second design was Primecoin, which tackled the
energy problem from a different angle. Primecoin is proof-of-work
consensus, but uses more intelligent prime proof-of-work instead of
hashcash. How has a failure in crypto set you up for better
decision-making? Do you have a favorite failure? I try to learn from
others. Designing and implementing new technology is one thing, making a
successful venture is quite another. There are many aspects to it. It doesn’t
have to be failures, I think I can appreciate the experiences of Jobs, Musk and
maybe General Magic’s AMD, for example In the last year or so, has your
philosophy or belief about crypto changed? My philosophy about
crypto is that it brings about a new class of private
property I call “strong private property.” Even though they
are virtual assets rather than real assets, it is more and more accepted
that the line between the virtual and the real has blurred. I still
believe strong private property embodied in crypto will bring about
revolutionary changes to our civilizations. It is most definitely an era to look
forward to. What advice would you give to someone who’s looking to enter the
world of crypto? My recommendation to anyone new to the crypto
world is to experience it first hand. Don’t just store your coins in exchanges
like with stock brokers. Use the non-custodial wallets, properly keep the
passphrases and learn the principles of brain wallets. And begin to take some
cryptos for jobs or favors! This is truly the new experience with the money of
the virtual worlds, with freedom and privacy. Learn risk
management, practice self-responsibility and self-accountability. Given how the
industry has evolved, do you think the industry at large should
embrace regulation or champion freedom and deregulation? This is
probably a hotly contested topic. The industry has evolved into
two distinct branches of development, one as decentralized financial
infrastructure, and the other as a general technology infrastructure for
diverse applications. Cryptocurrencies have a culture for freedom and
deregulation. However, blockchain in general would likely have wider use in
society as a technology platform — but the two branches are still closely
connected. As a disruptive technology with the capability of changing our
civilization, of course there will be some compatibility issues with the current
society. I think the industry as a whole has always been pretty open to discuss
the various matters with establishment. On the other hand, the lawmakers
probably also need to be more open-minded and consider the benefits of the new
technology, making necessary adjustments. What is your vision of the future of
the crypto industry? We have cryptocurrencies and strong private
properties in the virtual worlds. The virtual worlds have more freedom
and self governance. The real world, however, despite the progress of science
and technology, could still be subject to war, poverty, violence and resource
shortages. Of course, I mean there will be cultural differences between the two
worlds, yet they are still connected. Which world do you prefer? It’s probably
still too early to judge the relative merits of each world. Debunk a common myth
in crypto. Regarding monetary value, a common misconception is that
energy consumption gives it “intrinsic value.” This is
demonstrably false by proof-of-stake consensus. Proof-of-stake consensus does
not require energy consumption, yet proof-of-stake coins have taken a
significant market share. This proves that monetary value does not derive
from energy consumption. Monetary value could derive from monetary
utility alone. The more people acknowledge and use it as money, the higher
monetary base value it achieves. This is an important insight the cryptocurrency
experiment contributes to monetary economics. This interview has been edited.
Enjoyed reading our Crypto Titan series? Catch our previous interview with Emin
Gün Sirer, designer of the first proof-of-work cryptocurrency. Or check out the
full list here.