Dominic Williams on building a decentralized internet with Dfinity

0:01I'm Ashton Addison from BlockQuake Capital for Investment Pitch Media. And today on the Crypto Coin Show, we have Dominic Williams, the founder and chief scientist of Dfinity and the Internet Computer. Dominic, welcome to the show and thank you for taking the time today. Thank you for having me, Ashton. You're very welcome. I've been following the Internet

0:19Computer for a few years now since the launch and I'm really excited. I think 2023 is going to be a huge year for the network and you know, the market's already turning around and the positive sentiment is coming back and I think that all of the hard work done throughout the last few years is going to pay off in terms of user adoption, real-world adoption, things like that.

0:40And I'm excited to learn more about what your team's been working on and how that's going to bleed into the real world outside of Web3. So, thank you so much for taking the time to come on the show. I would love to kick off our conversation by just hearing a little bit about, you know, a high-level of what is the Internet Computer and Dfinity for those who aren't familiar

0:57and then we'll dive into all the details. So, you know, the Internet Computer is a an evolution of blockchain. Arguably it's a third-generation blockchain. I you know, I was brought into the industry by Bitcoin. Started working full-time in crypto in By 2014 I was I was researching how to make blockchains faster using something called traditional Byzantine

1:24fault tolerant and consensus math. And devised a cryptocurrency design called Pebble. I mean, it was the first cryptocurrency design that was scalable and would run much faster. I didn't actually pursue pursue that project project and then was you know, I got involved with the early Ethereum community and I'd heard this idea of a world computer.

1:52And you know, back then, you know, in 2014 and early 2015. We were coming to terms with this idea that a blockchain, in addition to hosting, you know, tokens could could also host code and data, which would enable you to build arbitrary things. And so, you know, initially Dfinity was concerned with trying to develop science and techniques which

2:19might support an Ethereum 2.0 that could be a be a world computer, at least according to our vision of the world computer. In the end, it was realized that what we were trying to do was far too ambitious to be with the kind of timelines involved with Ethereum at the time, and it would need to be a separate project, and

2:46would probably involve many years of R&D and a very large team of cryptographers and computer science engineers and so on. So, eventually, that's what happened. Dfinity became a real thing, you know, I suppose beyond just research in 2016. Foundation was created and in 2016, October 2016 ran a public ICO February 2017, raised initial funds, not much, but it

3:15was primarily raised is the Bitcoin, and that went up, so we used that as a springboard, raised more money in 2018, and you know, slowly built up what became crypto's biggest R&D operation. I think we're employing more cryptographers than pretty much any organization any organization. And here in Switzerland, we're the biggest employer of

3:43ex-Google research people. Zurich's got the second biggest Google campus outside of Mountain View. And we know we delivered on what we set out to do, which is create a blockchain that's infinitely scalable, runs with efficiency comparable to traditional IT. So, that means if you actually build something with block blockchain code, smart

4:11often called smart contracts, runs with similar efficiency to code running on traditional tech. These smart contracts have you know, greatly improved capabilities. They can store and process vast amounts of data. They can process HTTP require- requests above web experiences directly and securely into the web

4:38browsers of the end users of web 3 services. And we've been advancing as well, you know, using the fact that we have the have the abilities to develop a novel cryptography, which is pretty unique. We've been sort of advancing other directions, too. One is you know, trustless multi-chain. So, blockchain code on the internet computer

5:04can create signed transactions that run on other blockchains without having a private key. It's a bit of a mind-bending one, right? Because the I because the brain itself is actually signing the transactions that run on other blockchains. And also you know, progressing in other areas, trying to realize this web 3 web 3 vision. You can

5:29You can have something like a social net- social network like a social network like Facebook and running in a centralized form without a company, you know, running under the control of a community down. That's actually a much bigger challenge that than you might think. I mean, the first thing you have to solve is enabling you know, a smart social network like

5:49Facebook to be built with smart contracts, right? So, I mean, I don't know how many of you are We've found there's a lot of misunderstandings, you know, in the blockchain community about what's actually happening in Web3, but sometimes we you know, use misleading language. So, you know, you'll hear people say Well, say Well, Web3 service is built on

6:12blockchain XYZ. And they don't mean And so, people get the impression this is completely normal. But it But it's not, you know, I mean, today when outside of the Internet Computer blockchain ecosystem, when you hear someone saying they built this Web3 service on block blockchain XYZ, they don't really mean they built it on blockchain XYZ. What

6:33they mean is they built it on, you know, Amazon Web Services, Google Cloud, something like that. And that's where, you know, the user experience is being served from. That's where all the data lives. That's where all the data processing thing happens. And the service is just, you know, really keeping some tokens and like NFTs and tiny clips of data on the blockchain.

6:55And you know, that there's lots of reasons for that, you know, the only blockchain that where smart contracts can actually, you know, serve web experiences is the Internet Computer. Other you know, can't do that. So, you have to introduce some kind of centralized cloud or some other centralized tech in order to serve the user experience minimally. In

7:17addition to that, you know, just the cost of storing data and processing it is so high. It's just It's just not practical to build Web3 services services on chain. And the challenge that presents is that you know, if you can't build your Web3 service on chain, you can't place it under the control of a community DAO. Right? Because a DAO can can only

7:40update blockchain code, smart contracts, whatever you want to call it, that are running on chain, right? A DAO, you know, can't reach into Amazon Web Services and configure software systems there. And even if it could, you know, even if it were possible, it wouldn't really make any sense because, you know, if you run If you run stuff in the cloud, like,

8:01you know, there's somebody who's put their credit card into the Amazon Web Services web server. And they could switch it all off if they wish and make all that data disappear, make the system, the service disappear. They could even arbitrarily modify the data and do things like that. So, you know, the I think the first achievement of the Internet Computer

8:20computer project in its in its this world computer vision is was creating a blockchain that ran with, you know, efficiency that's tens that's tens of thousands of times better actually than the best proof-of-stake chain in existence. It's like a proof-of-useful-work. The Internet Computer runs on a dedicated sovereign network of hardware and these things called node

8:44machines node machines. And you know, it scales limitlessly, runs with incredible efficiency, smart contracts can serve you know, process HTTP requests and serve these experiences directly into directly into web browsers. And a bunch of and a bunch of things. And now sort of, you know, so I think, you know, we really have already delivered

9:11the world computer vision in the sense that we created, you know, a an advanced blockchain that can for most applications, you know, take the place of the traditional centralized IT stack, which is a really big deal. Mhm. And you know, we believe in the single blockchain singularity where eventually all systems and services run on world computer blockchain.

9:39Mhm. Right? We have proof and unstoppable and can be tokenized and things like that. But the missing piece There are some missing pieces for us. One has been multi-chain. That we feel that code running on, you know, blockchain code running on a world computer should be multi-chain and should be able to trustlessly interoperate without bridges

10:01without bridges without ends. And so that's just coming online now. That took us a long time. And in addition to that you know, right now today people are already building mass market web3 services that run 100% on the blockchain. Mhm. There are quite a large number large number of them. There's even people doing things like video streaming

10:20from the blockchain. However, today those web3 services do not run under the full control of a community DAO. And the reason for that is it's it's actually pretty complicated a pretty complicated thing to do. You know, a lot of the things we call call DAO today are, you know, just far too simple and not up to the task, right? You know, you can go on to

10:44like ApeCoin or something like that and it's just like people post a text file. It's more of a It's more of a social construct, right? People post a text file with a proposal and then people vote on it, right? And you know, the idea is that everyone agrees everyone agrees that the DAO's going to wait and implement the instruction or something. But

11:05we want to, you know, you know, run these services these web3 services in a fully decentralized best way in which the DAOs have full over them and all updates to the, you know, smart contracts, you know, the block blockchain code behind these services and all configurations and so on actually pass through the community DAO.

11:30Mhm. And there's just no point of centralized control and there's no no one either that identified as a controller. You know, there's no Wizard of Oz behind behind the curtain. And that is another thing that has been a long path, but that's just beginning to come online now. Mhm. Wow, great intro Dominic and I think you really laid out, you know,

11:50sort of the foundation to start. Obviously, there's a lot of issues with mainstream adoption of decentralized applications when the infrastructure is really on web two or using Amazon web services and it, you know, it's a blockchain project, but they're not really actually running a decentralized network. And then once that's actually set up to actually have the governance and the

12:13growth of the platform in a decentralized way, I feel like we're really in the infancy of DAOs and, you know, rebuilding companies to become actual internet organizations and decentralized autonomous organizations. And you're right, we've seen, you know, DAOs that became popular in the last couple years, they weren't really fully decentralized at all.

12:35And I feel like that's something that's a huge gap that needs to be filled. So, I'm I'm looking forward to seeing more actual dapps and like, for example, I was looking through the Dfinity sort of the some of the dapps that have been launched and it looks like there's quite a variety of different industries and use cases of things that are already

12:55launched on internet computer with like social media and different things like that. Which I think are great, you know, things outside of DeFi, but also inside of DeFi to revolutionize these different industries. But to actually run them in a way that is decentralized and using a DAO format, I feel like there's some trial and error that needs to be done

13:14there. Maybe you can talk a little bit about, you know, the actual application launching now that it is on a actual internet computer, world computer in a decentralized way, making it easy for people to actually create or start and incubate decentralized applications then launch them into the network and then sort of grow from there. How is the internet computer sort of

13:38making it easy to lower the barriers to entry for the development of these great innovations? You know, Ash, I think that's a really really good question and addresses something that's very close which is really about the purpose of blockchain. Like what is the purpose of blockchain? And my answer is that, you know, beyond just the general idea of like

14:04just certain you know better decentralized computer infrastructure that's you know champion unstoppable and all that kind of stuff. And we do believe in the end everything will be built on blockchain. But with respect to web web 3 and even DeFi, I think our really core purpose is to make people more industrious, right? And a blockchain is a kind of

14:27economy in code. We've got very specific ideas on how that should should happen. As is typical with us, they tend to be quite technical and take a long time to deliver, but we do get there in the end. And you know, look, I'm a serial entrepreneur. I'm what you call an what you call an engine entrepreneur. So, I'm very technical and, you know,

14:53first started coding cryptography in 1998-1999. Created like a text-based certificate system on Zim Ziff E Hellman and Blowfish of all things. Yeah. And it was, you know, this thing crypto++ library where this guy called Wei Dai, he wrote the b-money paper which is one of the inputs into Bitcoin and so on. So, I've sort of

15:22you know, seen, you know, and I've seen a lot of things as a lot of things as as as a lot of Now, you know, as you know, I relocated to Zurich in June '21. And before that, I was in Silicon Valley for more than 10 years. I'm living in a place called Palo Alto. I just it's a stone's throw from all the big VCs on Sand Hill Road Road. It was

15:43next to Stanford University. The Obviously, you know, Facebook and Google and all those kind of big players. And you know, I moved you know, I moved over there because I had a computer game, like a massively multiplayer online MMO computer game. Like it had about 3 3 million users. And I got funding in the States. But, I couldn't really get funding

16:09in the UK very easily. And that's why I ended up moving to Silicon Valley as an And now, and you know, I mean, London is a far better place to raise money than many places in Europe. But, Europe's a far better place to raise money than raise money than other places in the world, right? So, I know how hard it can be. You know, I've been an entrepreneur for many years.

16:32And so, you know, I really believe in crowdfunding, and I really believe that we need to demo- democratize access to the tech economy. Not for developers and entrepreneurs, but also for users. And you know, I think Web3 should be about making everyone more industrious. So, you know, this thing called there's a thing called

17:02the Service Nervous System, which is like an advanced form of DAO. Uses the same technology as a thing called the Network Nervous System, which is this DAO that actually fully controls the Internet Computer blockchain. So, you know, this is well-tested technology. You know, the traditional blockchain, you know, there's a there's a sort of sort of cabal side is either working a

17:23foundation or more commonly now a company and you know, they coordinate the people running, you know, mining software or proof-of-stake validators and upgrading the protocol in a sort of process process of hard and soft forks and we thought that was too centralized and it's also very cumbersome. We wanted to also push the instant to help you know, push the instant computer

17:49forward faster. And so one of the big innovations of instant computer is that it the whole network runs under the control of this sort of super advanced Dow called the network nervous system. It's integrated with the protocols that create the blockchain. And this Dow does many things. I mean, this probably like 10 plus different kinds of proposal

18:11and when these proposals are adopted by this Dow, they're automatically executed. And in fact, it's already you know, executed hundreds of proposals. Major major is like configuring the network internally. It has these subnet blockchains which enable it to scale out. You know, creates and updates those and also of course when someone pushes in an update to the protocol, it actually

18:37installs installs the software on the node machines that run the network. So it's not a proof-of-stake network. Now I guess they call proof-of-useful work and it runs on these dedicated devices called node machines. And that's been actually huge success. You know, it's enabled the instant computer to be updated regularly and evolve so we call it an adaptive blockchain. So

19:01we decided that you know, we take this proven technology and look, if it can securely run and an update an entire blockchain, it can do the same for a service, you know, a fully decentralized service running service running on the and adapt it. So, the idea is that you know, if you're a bunch of developers and you've created something

19:26like a chat service. I shouldn't always mention open chat, but I helped bring the team together, that's why I always do this. There's actually a service called open chat that runs on the computer. And it's very cool. Every chat message is a transaction, right? Like a Bitcoin transaction. That's the crazy thing. And it's stored on the blockchain. Even little video

19:48messages and images, those are transactions and they're stored on the blockchain. And that's of course why you know, the internet computer has so many transactions going on every day. It's half half a billion transactions a day at the moment, but before Christmas when people were busier, it got up to like almost like 750 you know, billion.

20:14so, and the reason of course the reason of course is these are being created by these kind of social media and web3 services. Okay, so you take something like open chat, which is a very complicated service. And it's Not only is it a complex which is one challenge. Open chat also makes chat profiles crypto wallets. Mhm. Right? So, at the moment you can send ICP with chat

20:43messages. But in the future, because of this thing called chain key which I mentioned coming online, you'll be able to send any crypto asset with messages. So, there's a security dimension to it. Like you know, if these developers, there's a small team of developers behind it. Like if they got hacked, they might all turn evil. They won't,

21:02they're very nice guys, theoretically, right? People do turn evil. You know, they could push some code that make it possible to steal. You know, that's how people are catching their chat chat profiles, right? So, the idea is that they put a proposal into the network nervous system, which runs the internet computer network, which is this permissionless sort of

21:26super doubt, if you like, if you like. And they say, "Hey, look, you know, we're we're the developer of OpenChat, and we would like it to be fully decentralized. Mhm. These are the parameters that we propose." Mhm. And if the network nervous system adopts that proposal, it essentially will create a service nervous system, again, another kind of advanced doubt.

21:49And it will then go to the OpenChat service, the smart contracts that create the OpenChat service, and select the master smart contract, right, which runs all the other ones, and change the controller ID to the service system, which allows this allows the service to update it. And through that, the other smart contracts. Mhm.

22:16And then, according to the parameters suggested by the developers, it will run a decentralization sale sale. So, will give the developers some of the service nervous system doubt governance tokens, allocate some for users of the service, and then make some available for sale. And currently, you know, they'll be for sale for ICP.

22:41Mhm. But futurely, it could be for sale for Bitcoin, ether, whatever, because of this chunky functionality. Mhm. And obviously, the buy the buy governance tokens, and the proceeds from the sale get held by by the service nervous system. So, it's not like an ICO. Mhm. Obviously, those are, you know, kind of impossible to do anymore. So, the funds

23:00don't go to the to the founders, the developers. The funds actually held within the DAO by the by the community straight swap. Yeah. By the there's some other kind of crypto for governance tokens. Okay, so at this point you know, and the founders governance tokens get handicaps, so they have very little voting power, but people will typically configure their

23:21what we call voting neurons, right? To follow this right because those people don't want to be dealing with a lot of the technical stuff today. All be you have community members who you know, review code changes and so forth. So, the thing's then fully decentralized. That's step one. You've got, you know, you'll have your social your web 3 social media

23:39service. It's already running completely on the blockchain, no cloud. And now, you know, it's fully controlled controlled DAO, service nervous system DAO. And you know, you've got hundreds, thousands, or even more perhaps one day in millions people, you know, participating in controlling this thing. Now, at this stage there's you know, we've already made some great

24:02progress, right? Some some money poured into this DAO, so they can use that money to hire developers as contractors, right? By putting out feature and bug bounties and things like that. Mhm. So, the crowdfunding has enabled the team to level up if you like. And this could be done from any from anywhere. I was seeing for example a lot of teams building in China, which is

24:25incredibly exciting cuz they're very very talented and very very hard working and I'll come back up to a particular team I want to mention in a moment. Now, there's another thing you can do once you've adopted this architecture, right? And that is you can fully tokenize your web 3 service to it did not otherwise do. And I think I mentioned that, you know, in this chat

24:48service called OpenChat, you can find if anyone's interested oc.app. Mhm. We'll we'll we'll load it. You'll get a user experience that's served by the smart contracts. It's incredible. Like all the messages are processed by smart contracts and stored by stored by them. But it is it is you know, making your your user profile a wallet, right? So you're able to send

25:09crypto with chat messages. And in the future, it's not just going to be ICP, it's going to be you know, Bitcoin, ETH, maybe other tokens like Avalanche and so on and so on. And these and clearly now you know, that would be a very dangerous thing to do if the developers controlled the code. Now, don't get me wrong, the guys behind OpenChat are fantastic.

25:33Mhm. Straight-up Gs, they're brilliant, right? But you know, you can't have that's not a good architecture, right? But for Web3 where people are in their crypto and their social accounts or game accounts or metaverse accounts or whatever. And then the developer has control of the code. So if they control of the code, they can they can steal it. So

25:52now that, you know, once once OpenChat has been assigned to a service node system, then the then the community control and you know, code is being is being through a review process, now you can really do this kind of tokenization in a much more secure way. Mhm. Right? So that's And there's something else you can do as well. You're now running as a blockchain.

26:15You're not running as a centralized service. And bear in mind that, you know, if you're the SEC and various other agencies, too, if you see a Web3 service that is 99% running off the cloud of Amazon Web Services, Mhm. right? You know, the user experience is coming from Amazon Web Services and that's where all the data and data, you know, processing and storage is storage

26:38is. You know, the Web3 service is just keeping a few NFTs and tiny clips of data on the blockchain. That's the prevailing model outside of the Internet Computer ecosystem. You know, if you're a regulator and you're looking at that from you know, you're going to say it's centralized, right? And all kinds of regulations come to that. Mhm. One fully decentralized

26:57You know, service and run it in the mode of protocol. It's like a blockchain. You can do more interesting things. So, on the one hand, it's more secure. You know, now service like OpenChat can more freely process crypto like ICP, Bitcoin, Ethereum, and so on. ERC-20 tokens and NFTs and all that. And on the other hand, it can aggressively tokenize other

27:23axes. So, for example, I think OpenChat will probably give half the governance tokens away to users. And this is where it gets exciting because, you know, if you can give governance tokens away to the first five million million active users, right? Right? Help by referring other users, helping with constant moderation and things like that. You basically built

27:47Yourself a huge team at low cost. You've made your users founders. Right? And that's the secret ingredient. That's you know, Web 3 is going to beat Web 2 through these kind of network effects and by co-opting users as founders who then go out and advocate and help with things like content moderation. So, you really made everybody industrious, right? A blockchain is an

28:10economy in code and you've made everyone industrious. Now all of a sudden, teams of developers can, you know, really have a shot at building something huge anywhere in the world. You've democratized access to the tech economy. Doesn't matter where those talented developers are. If they can create, you know, a sort of prototype service on the internet computer blockchain,

28:33They've got a good shot at job at, you know, getting a proposal through to fully decentralize it and having it assigned to a service nervous system DAO, whereupon now yet again, finally again, you know, will be to raise funds from the decentralized community which are kept in the DAO, not given to the founders like founders like in a DAO, but that DAO can

28:54you know contract the founders, you know, and it can also contract anyone else anywhere in the world, you know, through through feature bounties and bug bounties and things like that. So, we've made you know, we've made these developers into entrepreneurs who created this service as industrious. We've democratized access to the tech economy. We've allowed people to do that

29:16from anywhere. But we've also made the users industrious, right? Because we've made the users founders, right? And we've given them governance tokens. And we've allowed them to participate in advocating for the service, bringing in new users with critical critical tasks such as moderation or maybe creating content. And in addition to that, you know, we've

29:37made them real owners and given them a real say in the services that they spend their time on, right? So, we haven't just democratized access access to tell me if you like and democratized access to access to tech developers and entrepreneurs. We do that for users, too. We now have you know, real ownership. And you know, they become owners and part of the team.

30:00And so, there are wins and I think experiences will become online experiences will become much richer. That I think you know, is it really at the heart of what Web3 and world computers are all about. Amazing. Incredible, Dominic. And thank you for, you know, working for years to build the right infrastructure, do it the right way so that from start

30:23to finish creating the network that hosts the applications and creating the applications that allow people to actually be a part of something and actually own their own data and own the applications that they're using is sort of the true essence of decentralization. I really do appreciate the efforts that your team has done. Now, we don't have a lot of time left,

30:45but I would love to find out how people can get involved with these applications, how they can learn more, and get involved with the communities. Well, the right place to start is internetcomputer.org. Which is a website that contains a lot of resources. Some some of them are technical. There's a Discord a Definity Discord server server. That's

31:11pretty good. A lot of interesting interesting happen there. And you know, just listen to the chatter on social media such as Crypto Twitter. And you know, find out about a lot of these Yeah, and just just you know, you know, there's a thing called identity. Get get yourself an internet identity. Yeah, I think get yourself an account on some of

31:35these incredible like new fully on-chain Web 3 system. Play around. You know, keep keep your ears your ears close to the ground because I think a lot of them a lot of them are going to be decentralized soon and run these decentralization sales. One last tip, you know, DeFi, a lot of the functionality that was required was required by internet

31:55computers really only just coming into production now. And how how however, that doesn't mean there's but that doesn't mean there's no huge amount of DeFi under development. It just works differently. If you're interested to see the future, go to this thing IC Dex.io. IC Dex.io. I think I got that right. All right, otherwise you can find

32:17it. It's in Coin Coin Lighthouse. And they've produced a continuous double auction exchange. You know, the same kind of kind of exchange as Coinbase or Poloniex or dare I say FTX. And they've created using in tracks. And if you go to that URL, it'll redirect to some strange-looking address. That's actually the smart contract's address. And this

32:43exchange This exchange actually been put by smart contract, even the user experience that's served into your into your browser. And it's very new. It's it's currently in beta. But you know, there's already some activity on it. And what you what you're going to see in a minute is you know, that every sort of crypto asset you can imagine isn't it's going to be into a

33:09trading pair, right? Because of this chain key crypto capability that the internet computer computer has which allows smart contracts on the internet computer to create, sign transactions on other blockchains and trades. And you know, you know, what this I think demonstrates the power of what's coming because you're going to have something that works very much like a traditional

33:33additional exchange running 100% on chain. Even eventually out of the DAO. So, the updates to his code are completely transparent. Which will mean there's just no chance of anyone hiding in the shadows waiting to steal your crypto toes. So, you know, we talked a lot about web 3, but I think it's worth checking out the DeFi, too. Mhm. Amazing. And I will leave those

33:58dapp links in the description box below as well as the internet computer platform and the social medias that you mentioned there for the communities. So, I'll leave that all with down below. Thank you so much, Dominic, for taking the time. So much so You're very welcome. There's so much that we didn't get to cover. I'm excited to touch back in with you guys in a

34:16little bit in 2023 to see what else is in stock cuz I know that your team has a lot of initiatives on the go. But I really do appreciate the insights today. And let's follow up in the near future. Definitely. Mhm.