Recap of AMA Co-hosted by LBank and Horizen

Date: 26/04/2021
Time: 10:45 UTC+8
Venue: LBank YouTube Channel Live Stream
Guest: Rob Viglione(Co-founder & Team Lead of Horizen; CEO of Horizen Labs)
Host: Eric He| CEO of LBank

Part 1: Q/LBank & A/Horizen


Can you please introduce this project to users of LBank?


I would love to first of all, my name is Robert Viglione and I’m the co founder of Horizen and the CEO of Horizen labs, the software company, building on top of the network. So Horizen itself started in 2017, really as a a fork of the ZenCash tech. The idea was to extend privacy into more of a data structure type of data privacy into massive scalability.

So to combine some really important technologies that we felt were really critical to getting blocked into skill into doing more than just currency, but to actually get this technology into you, know business applications. So where we are today is we’re very much a side chain technology platform kind of like Polkadot or Cosmos, but mixing that with like zero-knowledge cryptography, these zero-knowledge proofs, ZKS in particulars really for data privacy and getting this out to different business applications.


I have been concerned with a lot of projects that have used that zero amount of proof such as ZenCash. Actually, we listed ZenCash in 2017 which also uses zero-knowledge proof. And want to ask you what is the difference between ZenCash and our product in terms of that technology being used?


Yeah, so we take the SNARKS technology into doing a few different things with it. So one is side-chain security. We use SNARKS for side-chain security, how these side chains can communicate with securely with the mean horizon blockchain. We use snacks for data privacy, so we can have different privacy centered applications that preserve Information for their users you can think of things like digital invoicing. We could potentially have even some gaming privacy applications. We can have health care types of things where people certainly would not want their Information declared to the public if you post it onto a public ledger.

And then we also use snarks in an interesting way like there’s a project called MINA. And Mina is all about a succinct database for their blockchain, so basically what we do is integrate a recursive snark technique that has the chain state itself called recursive layer. That sounds a little strange here, but what it does is keeps the blockchain size constant, so that over time, as these side chains get a lot of usage, their size does not increase. As an example, I can’t even run a big coin blockchain, the full node on my computer right now. It’s just too big. And we don’t want this to happen with our technology. So this is how we use snarks and snarks are known for privacy applications are really the first and most important application of snarks to us is on security. Then the status privacy and then it’s actually just cutting edge technology to keep to scale blockchain as it gets more usage.


Okay, very great. Actually capitalists i heard several things that I like particular, for example, Mina, which as we all know, is a star program. And as itself listed in and raised a lot of funding coinlist, it’s a light protocol. It facilitates and solves many problems, which is a little similar to what I think of a Horizen. Speaking of a side chain, there is another product project called polkadot. And I want to ask you what are the competitors and just do you think Horizen has compared with a Polkadot or similar public chains?


Yeah, so that’s a great question and it is exactly how we view ourselves right now in this competitive landscape so we differ from Polkadot in that we are much lower cost and more permissionless and decentralized and more secure. These are strong statements to make, but let me explain so lower cost in it for poking up to run a para of chain, which is their version of a side chain. You have to competitively bid to be a validator to actually participate in the system. They have a limited number of slots for validators and a limited number of chains that can actually exist in parachains. In our case, we have a permissionless system where is we replace validators with cryptographic circuits, these zero-knowledge cryptographic circuits. We have a software developer kit so that any developer or business or person can grab the SDK and launch their own blockchain in our ecosystem. You don’t have to ask permission. You don’t have to bid for a special slot to you win the right to do that. You don’t have to bid as a validator. You just grab the technology and you deploy I the costs are significantly lower.

Now I say more security is because we have a six-part security system. The most important element of this is we have a cryptographic circuit that processes transactions that happen on sidechains make sure that they actually conform to the cryptographic circuit. Then we have a certificate sent back to the main blockchain, the main horizen block cha. Now anyone in the world can verify that what happened on all the sidechains is actually conformed to consensus.

So what I mean by more security here is that rather than having to rely on honest, majority of validators as in our system, you actually rely on cryptography directly, so we remove the humans from the loop and remove the security implications of having humans in the loop that could be co-opted or could be malicious. And then actually maybe, the final piece of this that I should mention is the capacity in our network is much more significant. And then in the first version of our sidechain technology, you can run up to about a thousand blockchains in parallel on our network.

Whereas Polkadot, for example, has a target capacity of 100 blockchains that could be run on parallel.


Wow. This is fascinating statistics that you just provided, as we all know,the pot cut that the pot cut bit I it’s not going very smoothly and as we know that the mainnet bit for the slots are will be corresponding to the season three and there may be sure the problems. So we can see that Horizen has made break. My next question is that the privacy blockchain has been very heatedly discussed and implemented a product. Then we have many similar products, which do you think would be your most competitor and compared with the competitors, what advantages do you think you have?


Yeah, so I actually don’t look at our competition in the privacy space, which sounds a little strange because we are experts in zero-knowledge cryptography and that’s typically associated with coin eliminating right? And certainly, you could do that with our technology but really where I view our competition to be as in the sidechain category so competitors like Polkadot like Cosmos, and then our side chains themselves are actually using the same technology are, very similar technology to Cardano. We use a peer-reviewed proof of state protocol that actually the same are in the research and development team that builds her.

Also works with us they are called IOHK input-output. IOHK is run by Charles Hoskinson and we have a very important cryptographic team from IOHK it has helped us actually modify or bar sprouts to be our side chain protocol, we’ve modified it in a few important ways.

One is probably the most important one to talk about I because we’ve included recursive snarks, just like Mina has we can keep the blockchain itself a very low footprint and not actually have that scale with usage. Like we talked about previously but really so if we think about competitors here it’s like Horizen I a mix of like Polkadot mix Cardano mix Mina. Then we just have a different variance of zero-knowledge proof technology is very similar to Zencash, but we’re not competing against as Zencash as an example, as like a privacy coin that’s just not the space that and we’re more in the scaling blockchain into real use as a platform. So you need a platform. The platform must be massively scalable. Costs must not scale with usage if it’s going to be mainstream and it has to be highly secure. So that’s what we built here.


Here are my several personal thoughts. I think there are two main aspects that the public chains are competing with each other. First of all, technology, but as you said, they all use similar technologies. And the second aspect is the ecosystem and as we all know that Ethereum is probably the best public chain and a lot of the projects claimed and purported to be Ethereum killer. But the current situation is that we say that there is one superpower and other strongholds. The superpower is Ethereum, other strongholds such as Polkadot, Mina and Solana. These are all public chains. And they all want to build their own ecosystems to compete with Ethereum or maybe to kill Ethereum. And so I want to ask you do you have any plans like um, any programs that will help you build a large ecosystem to support developments, to support technologies that are on your public chain?


Yes, absolutely. And I also agree with that view of the world. It’s just the reality that we see right now. The one caveat that I will say is that MySpace used to have the largest social networking ecosystem as well and they were overtaken. That said, we’re not so confident that we’re going to just overnight overtake the most, the dominant ecosystem. I have a lot of respect for Ethereum, in particular, the community of developers and entrepreneurs that are building applications in Ethereum network. I view them as different than us. And our strategy is actually to partner with large businesses and just large ecosystems outside of the crypto and blockchain world, to get that distribution.

So I look at what we’re doing with two, from two perspectives. One perspective is the cryptocurrency guy who’s been in blockchain for a decade and I understand that. I get it. On the other hand, as an entrepreneur building a software business where I think about distribution. We have the technology, we have products, the products solve real use cases out there. And then I think about distribution by partnering with very large software and other enterprises to actually be their blockchain solution to get out there to a very large market. They just leapfrog when we’ve done.

So yes, Ethereum dominates the crypto world right now, and you have a large clustering and just a large ecosystem around Ethereum doing crypto things. And they’re doing that fantastically and not perfect because there are still some problems in the Ethereum ecosystem. In our world, we’re looking to leapfrog that completely, not to compete with them directly, but to go a different direction and to actually have a massive distribution by finding the right partners outside of the crypto industry so that we can solve problems for them more securely, more cheaply in a way that actually fits better with their business models because they want more control. They don’t want to just rely on other core developers on another ecosystem, so there are a variety of reasons why other people are choosing us as partners. And more of these types of news will be announced in the coming weeks and months.


OK. Thank you so much. There is a word I like very much which is metaverse. I think blockchain, the world of blockchain, is just like the parallel world to our real world. As we all know that in the universe there are a wide variety of planets. The Earth is one planet that can be viewed as a public chain in the world of blockchain. Mars can be viewed as another public chain or even Moon can also be viewed as a public chain. We people living in the blockchain, the world of blockchain, will choose the suitable planet to live on. And in the next 5 to 10 years there will be many different platforms with different styles and the public chains will grow, will be thriving. Just out of curiosity, what is our ultimate goal? What kind of planet do we want to become, the horizen planet?


Yeah, that’s a very interesting way of looking at this industry as a sort of multiverse and in the sort of like, like I said previously about how we’re approaching our strategy and going to market by building products that we know that customers like very large enterprises want. This will give us a lot of attraction. Now I don’t think that we’re going to solve all of the world’s problems with just our chain. The future that I envision for this industry really focus, has two major forces that are inducing change. One force is really the one that people most often think about, are the economies of scale, right? So the bigger you are, the bigger your network is, like Ethereum, the more it makes people want to join the network, right? So you have this kind of cascade effect of people joining your network because you’re a large network and you have a lot of activity on the network.

The other big force is innovation and innovation is rapid iterations, rapid trial and error, to solve different problems. There are thousands of problems in the business world, the world of governments, you know, just civil society for which this technology will play a role, maybe in some cases a leading role, in other cases, a supporting role.

So for each of these elements of where this technology can play a role, you’re gonna have many people, many different chains that are trying to solve some of these problems. Some of them, some of these protocols try to solve every problem and they try to claim that they’re going to be the one chain that does everything like in the early days until quite recently, you have these bitcoin maximalists to just figure there can only exist bitcoin.

Anything else is just a scam, they call it a shit coin. It didn’t matter what level of innovation was going on. But the reality is innovation matters. Now of course the economy of scale also matters. And I view these as two sort of opposing forces. Now where horizon comes in this evolution, I think it will be more clear over the coming years. So what we’ve done strategically is we’ve built out a technology that is unique just in the way that we’ve done, it scales significantly. It keeps costs low, which we know is important for many people for many different applications. And security is the most important thing to this protocol. So we position ourselves to solve many problems, not all problems. We’re not going to overtake Ethereum on everything that they’re doing over there. We’re not going to overtake Avalanche and everything they’re doing or Aragon and everything they’re do. I think that this ecosystem will be like a multiverse and where we sit will probably be on the high security, massive scalability and low-cost set of dimensions.


Fantastic! I am totally agree with you. Still, I’m going to ask something. I think there are two opposing forces or maybe like 2 types of ecosystem that you want to be comprehensive, you want to be inclusive at least that’s where you intended to do, Like Ethereum, it satisfies most people’s needs. But there’s other ecosystems that are not so big and inclusive but attracts some people too, like the currently fashionable NFTs. Will this be the future direction of development for Zen?


I agree with your view of the world. I think it’s very consistent with what I said as well. I called them two different types of forces.

If we view this as on the one hand, you have these very large networks that are solving many problems and they are very large. And then on the other hand, you are very specific ones, solving very specific problems. That’s completely consistent with how I do the world. I think it is too early to tell which networks will fall into which category. I think this is something that might be not as obvious to like many people in the industry. We’re used to the projects that are big right now, Bitcoin, Ethereum and Carnado, right? But some of these projects weren’t big 5 years ago. In 5 years from now, we’ll probably have a different perspective on which projects have actually exceed, grown significantly, on which projects have really hold on in particular use cases.

It’s still too early to tell and the reason why I say this is because we’ve probably had something like less than 1% of the world actually jumping into the crypto environment so far, right? You can’t really extrapolate trends when you have only data from 1% of your sample, so we still need to wait some years to see how the industry matures, but I think we’re all learning a lot every day that we’re in this industry.


Thank you very much. The next question is still out of a curiosity, but this is a little practical question. I know that Horizon has just launched a staking activity that a lot of LBank users are really interested in. Could you please give us some details about this staking activity?


Yeah, we actually have a very large staking program that I highly encourage LBank to participate in and I think it would be great for your users. I have to throw that out there. What it is that we subsidize our infrastructure, so 20% of the block reward, every block, its mines, 20% of the the economic reward in that block, goes to people that run full nodes on our system and register those full nodes.

So basically, there’s a process for how you can register to be a node operator and you get paid to do that. So it’s like a master node program. We do have another element of this as well that we recently launched, which is a wrapped version of Zen that does that, but it’s on the Ethereum network. So we actually struggle both networks. We have our large infrastructure node program, which I think would be fantastic. If the LBank participated in and we recently had an extension of this, which is a wrapped Zen on the Ethereum network.


Well, I still have a detailed question that I’ve known ZEN may have some news about the future plan of the project and will be announced in two weeks in the community. Is that possible to disclose some of the plans to the LBank users?


Our lawyers would be unhappy with me if I released Information before we made it public. But what I can say is we are within weeks of completing developments on this very large platform that we’ve taken the last 3 years to build. So this is an extremely important moment for the Horizen ecosystem and this is reflected in some way in the recent growth, and you know the value of the ecosystem, right? This is probably the most significant bit of news that we have; now simultaneously to this and what a lot of people don’t realize we’ve had a data version of this product on the market since last July, not this recent this last July, but actually the July of 2019, we’ve had a data version of the side chain system.

We’ve been working with very high-profile partners like Celsius Network as an example and is a partner of horizons where we’re building a side chain that does decentralized and using zero-knowledge proofs , up the celsius networks. That’s a really important product that we’re building. And we already have phase one of that project done. Another one is we’re partner with the IOTA network, the internet of things, blockchain or really dapps. We’re now partners as a layer two on IOTA so that they have the device data coming onto their tangle. Now we can take some of that data as is required for some applications and actually package this data on a layer-2 horizon side chain and provide privacy services for the network doing that.

So this is just one class of problems that we're solving the industry is the horizon itself. The side chains could be layered two for other blockchains. So it’s actually we’re getting an explosion of demand for our service by being layer two to other blockchains.

Now there’s a whole other category that we’re solving on the business side. We have some really big attractions on these cases with some very large companies, that are famous companies globally that we can’t really announce right now, but this is what I mean by it significantly expanding our network and maybe being able to leapfrog other public blockchain out there by getting the right business partners that already have hundreds of millions of users around the world and being their blocked partner.

You can consider Horizon a sort of infrastructure in the background, providing network services to other businesses or the blocking industry itself. So there’s a lot going on. There are a lot of partnerships. We just recently announces LBank partnership, this is a really important one for us especially entering this market and getting more attraction and just working with high-quality exchanges out there is another really important growth of our ecosystem.


Wow, it’s fascinating. By my understanding, the most important thing right now for the horizen, probably is the corporation between us; the next big thing for the next month, the news that you were broadcast will be probably very important for the industry. That’s my understanding and I think this is great.


That’s exactly right. I wish I could disclose some of that now, but it would be inappropriate before we actually announced it publicly.

Thank you so much. It’s pretty late now. LBank users are listening till now and do you have any questions about LBank that you want to ask?

Part 2: Q/Horizen & A/LBank


Yeah, one thing that I would like to ask is what would be the ideal like watching partner for LBank?


This is a big question. When we choose the partners, I think that’s the most important thing that we can see is whether this project will be beneficial to the whole industry and would it be incremental for the industry. There are many people are joining the blockchain because it is a hot topic because they see that many people have become rich because they’re in the blockchain. They actually bring big traffic into our ecosystem of our industry,but not all of them are beneficial.

In my point, when I’m thinking about my partner,I’m also thinking about this whole ecosystem,this whole industry,whether my partner can help this industry and help the ecosystem move forward. Just like horizen, you mentioned what you have done that you can help other public chains, help implement the layer-2 projects and also you work with other partners to advance, not just the technology but also are many other things about blockchain. So whether a project or partner can help this whole industry is the most important factor I consider.


That’s fantastic. Can I ask one more question? So what are you seeing matters most to the Korean community right now?


This is a very interesting question. I’m not sure my translator can translate one word probably. We say that in Chinese ”泡菜溢价”. Probably it is equivalent to say the preserved vegetable premium because the preserved vegetable is a kind of dish that appears in every household Korean so that there is this premium. What is it? What we see is the price of bitcoin which has always be like around 5% to 10% higher than the global price.

To most of Korean participants, they just see the richness or the fact of the blockchain creating rich people, but the whole Korean community, blockchain community hasn’t done much for blockchain technology, or at least they are not at the top. But we have to admit that the enthusiasm of participating in the blockchain,it’s probably the top in the world. We have to say the Korean market is one of the most important markets in the world. They have many potentialities, they need you to work harder to prove themselves probably like in terms of technology or many other aspects, that’s why I don’t know if I have answered the question.

Part 3: Ending part

Eric: One of my colleagues just send me a question that if you want me to ask you. And we all know that LBank is going to list ZEN and everybody is now very, very much interested in or they are focused on the oscillations and the prohibitions of the market. Because we know that just like several days ago, the price of bitcoin and ETH just dropped in the 2 minutes. But now the price is kind of increase a bit back. What is your personal perspective of the future of these two big for Top currencies on the listed exchanges?

Rob: That’s a great question because my Ph.D. is in finance. So I typically realize that I know nothing about the future of asset prices. It’s made me humble actually. What I see is you can have two different types of cryptocurrency assets in this market and maybe this is too simple, but one is the store of value use case like Bitcoin and there won’t be many store values cases that will be very limit.

Big queen dominates and then you have the utilities and with the utilities, the coin itself matters not just because of a speculative vehicle, but because you’re providing services on the network. And those network services require that token to operate, right? So these are almost two different things. And one is the speculative side like the store of value side. The things that matter there are interest rates, risk aversion across populations, and really the things that you get in a normal asset class. On the utility side, what really matters is the growth of the network and what kinds of things are really being done on the network. And you need the token to do that. So Zen is more on the utility side. We started as a currency, now with this platform are migrating very sharply into the utility side. I’m not sure where the markets are going, but what I look at personally and this is not investment advice at all. Its interest rates are so low all over the world. Every central bank is printing as much currency as it possibly can. Debts are going escalating in out of control I would say. So this is an environment where I want to hold cryptocurrency. That’s all. I can’t make predictions but I do think that we’re in the right industry at the right time.

Eric: I think you are very much humble. What you just said is rather professional actually. The bitcoin deflation caused the currency attribute. In the previous years, in the early years of blockchain, we only talk about stories we broadcast our story. But now we actually using blockchain to do things to really do business. And that’s when we found utility tokens,regardless of how perturbations happened and fluctuations happened as long as we use the utility tokens, I think the values of the utility token are unlimited.

Now because of the limited time, I think our broadcasts may end there. Thank you very much.

Rob: Thank you guys!

— — END of AMA — —

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