[Messari AMA] Muneeb Ali, CEO of Blockstack, Patrick Stanley, Head of Growth, and Brittany Laughlin, Investor Relations Lead
Messari hosted a public AMA with Blockstack’s CEO Muneeb Ali, Head of Growth, Patrick Stanley, and Investor Relations Lead, Brittany Laughlin in the Messari community group. This is a transcript of the conversation.
Messari: Muneeb, Patrick, and Brittany—a big thanks to each of you for joining this morning to field some questions about Blockstack. We have a pretty full queue, and I’m excited to work through it.
Thanks for being here.
Blockstack (Brittany): We're excited to be here! And given that it's a regulated offering, we'll kick things off with a disclaimer! You can read in full here.
Important disclaimer
The Securities and Exchange Commission (SEC) has qualified the offering statement that we have filed with the SEC. The information in that offering statement is more complete than the information we are providing now, and could differ in important ways. You must read the documents filed with the SEC before investing. The offering is being made only by means of its offering statement. This document shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
An indication of interest involves no obligation or commitment of any kind. Any person interested in investing in any offering of Stacks Tokens should review our disclosures and the publicly filed offering statement and the final offering circular that is part of that offering statement here. Blockstack is not registered, licensed or supervised as a broker dealer or investment adviser by the SEC, the Financial Industry Regulatory Authority (FINRA) or any other financial regulatory authority or licensed to provide any financial advice or services.
Forward-looking statements
This communication contains forward-looking statements that are based on our beliefs and assumptions and on information currently available to us. In some cases, you can identify forward-looking statements by the following words: “will,” “expect,” “would,” “intend,” “believe,” or other comparable terminology. Forward-looking statements in this document include, but are not limited to, statements about our plans for developing the platform and future utility for the Stacks Token, our Reg A+ offering and launch of our network, and collaborations and partnerships. These statements involve risks, uncertainties, assumptions and other factors that may cause actual results or performance to be materially different. More information on the factors, risks and uncertainties that could cause or contribute to such differences is included in our filings with the SEC, including in the “Risk Factors” and “Management’s Discussion & Analysis” sections of our offering statement on Form 1-A. We cannot assure you that the forward-looking statements will prove to be accurate. These forward-looking statements speak only as of the date hereof. We disclaim any obligation to update these forward-looking statements.
Messari: Thank you! The questions we have generally fall into a few groups:
Dapps
Competition
Regulations
Technical
Retrospective
…but I want to start with a couple general questions first, the first (pretty easy one) being:
“How do I get my grandma to use and understand Blockstack?”
And second, we have a question about the state and distribution of Blockstack developers and contributors:
“Where are most of the developers building on Blockstack from? How active are Blockstack developers and users?”
Also, as we begin, feel free to offer a bit of background on Blockstack and the offering, although I assume most of our audience is generally familiar.
Blockstack (Brittany): Great! We now have over 170 applications built on top of Blockstack! The majority of those have been in the past few months. These are independent developer teams.
Blockstack (Patrick): These teams are spread around the globe. Every continent is represented except Antarctica
Blockstack (Brittany): We have ~7,500 members of our Blockstack Meetup community in 21 countries. You can view the distribution of our meetups and events publicly here. This does not include our full community, but it does give a sense of the geographic diversity and growth. We have some upcoming meetups this week from Portland to China to Vietnam. In October, we'll bring together our community at the Blockstack Summit in SF - we'd love to have you join.
Blockstack (Patrick): These are some of the known apps. Most have been created in the past few months.
Blockstack (Brittany): A little about Blockstack, it's a decentralized computing network and app ecosystem. We want to make it easy for any developer to build applications that protect your digital rights. We've built the stacks blockschain to fuel growth of diverse applications over the long term.
The current apps on app.co are from developers all over the globe. We've seen the geographies pretty dispersed, North America, Europe, and Asia. We've seen growth in Africa as well. It's pretty evenly distributed. Our developer community is 7,500 members, and you can see on the map some of the geographies of the community here.
Messari: Can you give a quick "ELI5" explanation of Blockstack?
Blockstack (Brittany): Blockstack creates tools for developers to create applications that don't steal users data. We use the blockchain to secure the tools but you do not need to be a blockchain developer to be able to build.
Messari: This is a great segue into some of the dapp-related questions we received starting with this one:
“With stacks v2 apps will have the possibility to do auth, storage, global state (smart contracts) and content discovery (radiks) in a decentralized way. What about communication? Which app components will be decentralized next with Blockstack?”
And two more about mainstream use and the apparent difficulties in widespread adoption:
“Can dapps really compete with existing centralized applications? Dapp adoption has been pretty slow so far. How does Blockstack plan to get mainstream use?”
“Since dapp growth is pretty slow overall in crypto, does Blockstack have KPIs for dapp development and use? What are your expectations over the next 5 years?”
Can you speak to dapp adoption a bit, specifically regarding Blockstack apps?
Blockstack (Brittany): Great question! We're excited to launch smart contracts after the next hard fork. We've recently launched our Clarity language that will help. Smart contracts will enable a broad anything that you'd put on a server in a SaaS offering would go in a smart contract. Or even more specifically - things that cannot go anywhere - ie: can't put those things on the client - can go into smart contracts.
In terms of communication, you can already do web RTC which is point to point, so communication is already decentralized.
Blockstack (Patrick): Regarding Dapp adoption, apps need to be as good or BETTER than their centralized counterparts. We’re focusing on making the developer experience not just good but great. Dapps can compete with centralized apps, it’s a matter of pulling in great founders to use Blockstack tools at this point for the breakout app. We are seeing signs of that happening.
Messari: One more dapps question about regarding mining rewards:
“The app mining rewards seem pretty low. Graphite, one of the most popular apps, has only received $100k. Is that just one way for app creators to monetize?”
Blockstack (Patrick): We have a major announcement about upping app mining rewards by an order of magnitude next week and transitioning to payouts in stacks. Super happy with how far we’ve gotten with this pilot. Grew from roughly 30 apps in October to 170 today. Without commissioning any dev studios...these are organic developer teams from all over the world joining this movement.
Blockstack (Brittany): I'd also encourage everyone in chat here to check out app.co to see the latest apps. DMail has recently risen in app mining - it's like a decentralized email client - so without using email infrastructure but the same experience. Keeping data safe but the ease of a familiar format. There are new apps being built at a rapid pace now, so if you want a service that doesn't compromise your data, there is probably one for you! From password managers to photo storage, private messaging to ways to support creators with crypto!
Graphite has received all of the App Mining payouts with no strings attached or equity given up - it's about the value they bring to the network. I think it's a great alternative to startup funding even from accelerators, which require at least 5-10% equity in the company for similar amounts.
Blockstack (Muneeb):: RE geographic distribution, we were recently in Asia, made an investment in an independent entity in Hong Kong, and are starting community events in various Asian regions. So it’s possible that there is more participation from these regions in the future. Obviously disclaimer about forward looking statements.
Messari: I want to shift gears a bit and discuss Blockstack’s competition. The first question is about big tech:
“I loved the Can’t Be Evil billboard in Mountain View that you posted to Twitter. Has Blockstack had hostile reactions from Google or other bit tech companies?”
Blockstack (Patrick): No hostile reactions people really love the messaging. We put up more billboards too! This one is on 3rd and market in SF
Messari: The next two questions ask specifically about Blockstack competitors.
“Does Libra compete with Blockstack?”
“Do you see projects focused on data ownership and monetization such as Storecoin and MaidSafecoin as direct competitors? Or rather smart contract platforms? Both?”
How does Blockstack think about these (and possibly other) projects?
Blockstack (Brittany): No, Libra does not compete with Blockstack. This question came up yesterday too. We're cautiously optimistic about Libra.
Blockstack (Muneeb): See the summary here about how Blockstack’s approach is different broadly.
Blockstack (Patrick): We’ll use the Cant Be Evil messaging for some time. But ultimately we want people to understand that they don’t have to live as sort of digital feudal serfs...we can take back our data and have a better relationship between developers and users where the architecture “can’t be evil” to users (hacks leaks selling data etc) by default
Blockstack (Muneeb): Most blockchain approaches are “heavy blockchains” and we have full-stack approach with minimal logic on-chain, apps can scale to millions of users today. Architecturally Blockstack is extremely different from most blockchain projects, most of which fall into the “world computer” design approach which we consider flawed and limiting for scalability.
Blockstack (Brittany): Facebook is breaking new ground for the crypto industry with Libra. It's going to be led by a different team so they may be able to build something people are excited to adopt, even after Facebook's growing distrust from users. If Libra is successful, it will be a net benefit to Blockstack to bring more developers into build decentralized applications and since you can use any Blockchain technology with Blockstack today. All you need is the appropriate javascript client: blockstack.js. That makes it really easy to build. Blockstack with other technology.
We're focused on the blue ocean of web developers. That puts traditional developer tools as our competitors. Since our technology can be used in combination with many of the other blockchain projects out there, we think there will be more room for developers to use our tools in tandem with othe successful platforms. We provide developers different tools they need to make it easy to build great apps, even if you are new to decentralized tech.
Messari: We have a few regulatory questions I want to discuss. The first is pretty straight forward:
“After the long process to get Reg A filings approved, are you worried about the U.S. losing crypto to the rest of the world or more optimistic?”
Also, can you speak to the Reg A limit and mining rewards given this question:
“You mentioned the potential that mining rewards could count towards a RegA limit. Can you explain that in more detail?”
And thirdly, does GDPR affect Blockstack?
“Does GDPR affect Blockstack development at all? If so, how?”
Blockstack (Brittany): Perhaps the Reg A is not the perfect model, but no regulation is also bad. So either full on crack downs = no crypto, or things lead to really bad outcomes for participants and investors. Perhaps there is a model that is more tailored, so that in the long run it will emerge. In the meantime, accessing the US markets and allowing for full disclosures of all information and investor protections, we think that’s a good thing.
Too much regulation is a problem. Not enough regulation is also a problem. When projects aren't being truthful or there aren't disclosures, that's a problem. Has the US gone too far or not, time will only tell, but it's not the only jurisdiction that has had more restrictions and regulations around this industry.
This was a long and expensive process, but we hope that us having done it, will allow for an easier path. Reg A was not built for a crypto project, so there are things that aren’t so relevant to these requriements that we had go to through. We considered other options and found this the best way to proceed. It would be great to see more evolution of regulation to fit crypto in the future.
What's great for developers who are building apps, is that Blockstack technology makes it easy to be GDPR compliant out of the box. If you are a developer building an application that does not monetize user data - which is most applications - then you don't need to store that data. Data storage remains with the user, so compliance on storing user data won't apply.
Blockstack (Patrick): We’ve carved out a portion of the Reg A to count toward app mining rewards. Even though those are being earned and not bought by app developers, under the regulations what we are giving away is considered that we are receiving “consideration” in the amount of the value of the tokens that are provided to app developers, and therefore will count toward the 1-year limit for a Reg A raise.
Messari: I realize we’re running close to our time limit, but we have a few technical questions I want to address briefly. The first couple focused on Bitcoin’s blockchain.
“Will Blockstack only temporarily leverage Bitcoin’s blockchain? Or is that indefinite? And how did you make that determination?”
“When will Blockstack switch to its own blockchain?”
And one about interoperability:
“Are there plans for interoperability between Blockstack and other blockchains?”
We also have a question about token supply:
“In Messari, it is reported that 1.32 billion tokens were created in November 2017. Has there been any other minted tokens beside 1.32 bn? And is 1.32 bn or whatever the current number is going to be fixed in future?”
Blockstack (Brittany): Great question. All of this is outlined in our offering circular, you can find that here -- it's a lot of information, so let me see if this can address the supply as well. Since we have a Mint/Burn mechanism in our token supply, the supply will be impacted by use of the network.
We expect the supply of 1.32 billion Stacks tokens created in the genesis block to decline over time due to burning, especially since mining is not turned on yet.
We hope to introduce mining in or around 2020, which may increase the token supply through the creation of tokens as mining rewards. We anticipate that the number of tokens added will be governed by a principle that we call adaptive mint and burn, which provides that a minimum number of new Stacks tokens will be created as the mining reward for each block added to the blockchain, and a number of additional tokens may also be included in the mining reward to replace tokens that have been recently burned and thereby removed from the token supply, which additional tokens we refer to as replacement tokens. The number of tokens recently burned would be calculated using a measurement algorithm that remains to be determined.
Unless the number of tokens burned exceeds the maximum number of additional tokens that can be created, or the measurement algorithm fails to accurately measure the rate at which tokens are being burned, adaptive mint and burn will result in a net number of tokens being added to the token supply each year equal to the minimum number of tokens created — which would be equal to approximately 26,298,000 tokens each year for the first five years, 21,038,400 tokens each year over the next five years, and then 15,778,800 tokens each year after that. If the token-burning activity on the network consistently exceeds the cap on token creation, however, more tokens may be burned than are replaced by the replacement tokens, and this could result in less net tokens being added to the network over time than anticipated.
In addition, the blockchain would further add to the token supply by creating 12 million new Stacks tokens a year for App Mining, and 25 million tokens and 15 million tokens the first and second year after the introduction of mining, respectively, for user incentive programs. We are considering whether these caps on the number of additional tokens should be removed at some time in the future.
For more details, please see Description of the Stacks Tokens—Creation of new Stacks Tokens
If you want to know the supply in 2050 (a common benchmark for crypto projects) - we anticipate that approximately 2,048,036,800 Stacks tokens will be in circulation in the year 2050 based on the assumption that mining is introduced in 2020, and fewer tokens than this estimate may be in circulation. There is no pre-set limit on the number of Stacks tokens that will be released over time.
Blockstack (Muneeb): RE switching blockchain. The Stacks blockchain v1 went live in Nov 2018. The v1 Stacks blockchain logically builds "on top" of Bitcoin. The Stacks blockchain v2 is under development (Github here) which is a separate blockchain and a new implementation in the Rust language. The v2 Stacks blockchain is expected to go live in late Q4 2019 or Q1 2020
Blockstack (Brittany): Interoperabilty already exists with Blockstack. You can use any Blockchain technology with Blockstack today. We've seen some developers use Blockstack Auth and Storage with ETH smart contracts. All you need is the appropriate javascript client then you can use blockstack.js. with any other web library today.
If you mean interoperability with Cosmos or Polkadot, in terms of cross chain, that’s hard to do today but could be done with stacks V2. We've been following these projects to see ways that it could add to the dapp developer experience down the road.
Messari: I want to wrap up with two quick retrospective questions on Blockstack’s progress to date and advice your team would share with other projects building in this space.
“Would you build Blockstack in the US again if you started over?”
“What’s one thing you’d do differently about building and deploying Blockstack? What advice do you have for other projects?”
Blockstack (Brittany): Good questions! There are a bunch of different dimensions to it. We feel really good about our strategy and the approach. We want to access the US fully and compliantly, regardless of where we built the project from - it wouldn’t change the need to comply with US law to access the wealth of talent in the US. We've learned a lot along the way. We've filed publicly and want to continue to share the path we took to get to this place today as a way to move the whole industry forward and make it easier for other projects to take a similar path.
Blockstack (Muneeb): For Blockstack specifically, we could've decided to build our own Stacks blockchain sooner vs. first trying to build on top of Namecoin and then Bitcoin. Advice for other projects in general is to try and focus on real scalable infrastructure first (something that we did), and only then work on building apps. If the underlying infrastructure can't scale or will become a bottleneck then all apps on top suffer.
Messari: That’s all we have for today! Thanks again Muneeb, Patrick, and Brittany – really appreciate your time and thoughts.
Blockstack (Brittany): Thank you for all of these great questions! Thanks Messari for having us! Especially to Zack Voell for MC'ing the AMA.
Blockstack (Patrick): Our pleasure thank you
Blockstack (Muneeb): Thanks, everyone! These were some good questions. Enjoyed chatting
Messari: Thanks all!