Ethereum Foundation on Bitcoin, Bitcoin Cash, Ethereum Classic, Stellar, and TRON

Siamak Masnavi

On Friday (April 12), day two of the EDCON (Community Ethereum Development Conference) 2019 event in Sydney, Australia, Vitalik Buterin and four other members of the Ethereum Foundation—Hsiao-Wei Wang, Virgil Griffith, Danny Ryan, and Justin Drake—had some interesting things to say about Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Stellar (XLM), and TRON (TRX). Here are some of their most interesting comments from the interview.

Q: How much has the Ethereum roadmap changed?

Vitalik:

  • "It's changed a huge amount. The first version of proof-of-stake (PoS) I came up with that I published in January 2014, it actually technically was not even secure."
  • "Since then, we've just done a huge amount of research, rethinking, figuring out that proof-of-stake actually is possible."
  • "We spent years trying to make Casper FFG work... We've spent a long time trying to make sharding work on top of the existing Ethereum chain."

Q: Why should people bring their attention back to Ethereum?

Vitalik:

  • "There's definitely been a reduction of interest in all blockchain projects, especially people who are just following cryptocurrencies for the price like stopped following them because the price stopped moving in a happy direction for a while."
  • "Right now, there's more things to build with and build on top of than there ever has been before, and I expect there to be even more over the next few months. So, for a developer, the experience is becoming more and more interesting very quickly."

Q: Is there a move toward more frequent hard forks with the 1.0 chain?

Danny:

  • "There's definitely a movement on the 1.0 chain to more frequent small hard forks; they're just going to get into a rythm. There are a number of just smaller technical challenges they want to tackle."
  • "With respect to the Beacon chain and Eth 2.0, the approach right now is to move quickly and to, before we get to phase two, which is when all user activity comes in, move pretty rapidly and build up the core architecture. When you do have the user level activity... there's a ton more maintenance on the system that you have to have and there's just more political maneuvering to get changes."

Q: What do you think about Justin Sun's recent comment about working with Ethereum developers?

Virgil:

  • "So, it's news to us."
  • "The man is an incredible marketer. He's incredible!... I would love to have him as Chief Marketing Officer for Ethereum... I wouldn't make him CEO of my company, but CMO? Hell's yeah!"

Q: Do you find it worrying that some projects are migrating to EOS, Stellar, and TRON?

Virgil:

  • "I mean we don't need to eat like everything."
  • "I actually advised someone a few months ago to actually go [to] Stellar instead of Ethereum. So, Ethereum sort of errs on the side of maximum flexibility. If you only want to send tokens around... just fungible tokens...I mean, we are kind of overkill. Yeah, so, if you just want to send tokens around really, really fast, you probably don't need us, and that's not offensive."

Q: Thoughts on IEOs?

Vitalik:

"Basically... they seem just like ICOs, but more centralized."

Q: What is your relationship with the Ethereum Classic team?

Virgil:

  • "They have a bit more purist sensibilities, but they are not incompetent."
  • "When they publish software, you maybe bow... 'Hey, that's kind of handy! I'm really glad that's compatible with us. Thanks, guys!'"
  • "So, I guess their incompatibility is nice, and they occasionally make nice things."
  • "I do think Ethereum Classic would probably have a little more trouble as they get larger. In general, the larger you get, you have to get a little more pragmatic just because the real world impinges upon you more, and so, I'll probably say they have a little bit more freedom to be ideologues because of their size."

Q: What do you think about the value proposition of Bitcoin over the long term?

Danny:

  • "The meme value of Bitcoin is very high... the store of value meme, the king of crypto meme... the gold thing."

Vitalik:

  • "Things I am watching -- one of them is Bitcoin Cash. I mean, price-wise, it seems to have recovered a lot from its slump recently, but also technology-wise, it seems like they are beating Bitcoin to integrating Schnorr signatures, which was just super out-of-the-blue surprising."
  • "It's like maybe two years ago you might have thought it's just like jokers, but there seems to be real technical talent there."

JPMorgan Chase’s Shifting Attitude Towards Cryptocurrency

Siamak Masnavi

In this case, we look at how JPMorgan Chase's stance on cryptocurrency has softened in the past couple of years.

JPMorgan Chase & Co. (aka "JP Morgan") is the largest bank in the U.S., the sixth largest bank in the world by total assets of around US$2.687 trillion, and the world's most valuable bank by market capitalization.

Jamie Dimon, JP Morgan's Chairman and CEO, has long been a fan of blockchain technology but not cryptocurrencies. In fact, he called Bitcoin a "fraud" as early as September 2017. 

According to a report by Bloomberg, on 13 September 2017, after calling Bitcoin "a fraud", Dimon went on to say that Bitcoin was “worse than tulip bulbs." And if a JPMorgan trader began trading in Bitcoin, the J.P. Morgan CEO said that he would "fire them in a second."

He went on to say that:

If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars. So there may be a market for that, but it’d be a limited market.

On January 2018, in an interview with FOX Business's Maria Bartiromo, Dimon said that he regretted his previous comments about Bitcoin, and expressed his faith in blockchain technology: "The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO's you have to look at individually. The bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I'm not interested that much in the subject at all.”

In an interview with the Harvard Business Review (July–August 2018 Issue), here is what Dimon had to say about crypto: "I probably shouldn’t say any more about cryptocurrency. But it’s not the same as gold or fiat currencies. Those are supported by law, police, courts. They’re not replicable, and there are strictures on them. Blockchain, on the other hand, is real. We’re testing it and will use it for a whole lot of things."

Then, on 14 February 2019, CNBC reported that JP Morgan had created its own stablecoin -- JPM Coin -- "a digital token that will be used to instantly settle transactions between clients of its wholesale payments business."

And last Friday (February 21), Bloomberg reported that the bank's Global Research team had released its annual "J.P. Morgan Perspectives" report; this year's report was titled "Blockchain, digital currency and cryptocurrency: Moving into the mainstream?". 

Here are a few interesting highlights from what the report's Executive Summary had to say about distributed ledger and blockchain technologies:

  • "While blockchain technology has not yet emerged into the mainstream, it has moved beyond experimentation and use in payments, with stock exchanges embracing the efficiency around settlement/clearing and collateral management."
  • "Trade Finance and Payments blockchain solutions offer the most incremental efficiencies in the banking sector relative to other use cases, but widespread implementation is at least three to five years away."
  • "We see the long-term potential for Distributed Ledger Technology (DLT) to transform banks’ business models by providing efficient and resilient information transfer and storage once scale has been achieved…"
  • "The crypto market continues to mature with the increased participation by financial institutions and the introduction of new contracts on regulated exchanges."

However, for our purposes, the most interetsing part of the report was the section titled "Cryptocurrencies for portfolio diversification: Struggling to prove uniqueness". Here, the report makes some interesting acknowledgements:

  • "Despite their extraordinary standalone volatility, crypto assets still raise the efficiency of a multi-asset Equity and FICC portfolio (the Sharpe ratio, or return per unit of risk) due to high historical returns and low cross-asset correlations."
  • "While crypto might serve some retail investors with a small asset base as one of several hedge instruments, it could not serve all retail investors nor institutional ones and corporates due to a liquidity constraint tough to circumvent without legal currency status to convey scale."

So, it seems that we have gone from the bank's CEO calling Bitcoin "a fraud" in September 2017 to the bank launching its own digital currency in February 2019 to the bank admitting in February 2020 that cryptocurrencies (such as Bitcoin) can "raise the efficiency" of some investment portfolios and that they could be useful to some investors as hedging instruments.