Quai Network wants to back currency with energy instead of fiat

0:01I'm Ashton Addison from the cryptocoin show and today on blockchain interviews with Alan orwick co-founder of Quai Network Alan welcome to the show and thank you for taking the time yeah thank you for having me on Ashton excited to talk about Quai and what we've been up to definitely I'm very interested in uh proof of work chains that are are focused on growing the economy in a

0:22sustainable way uh the energy dollar as as you explained it earlier as well excited to dive into all of that I would love to start off our conversation with a high level on what you and your team have been building at kawhai and why you're building it and then we can dive into all the details yeah so fundamentally at Qui Network we're building a scalable and programmable

0:42proof for work blockchain so something that can achieve Visa like level throughput so that people can actually use blockchain technology day in day out and we want people to facilitate onchain transactions be brought in to this decentralized Finance world and not succumb to offchain or solutions that tend towards centralization so we believe in that original Bitcoin ethos

1:05the cyppher punk narratives and Trends and we really see a future in which blockchain blockchain technology will continue to absorb and eat the share of the value in the world and it it's only going to continue to go that way as a trend for qu Network in particular it is a newly archet archetype architectured it's a new architecture and it is a way of Designing a blockchain that has both

1:29horizontal and vertical iCal scaling so increasing the throughput of the actual blockchain technology in a truly decentralized way with a Crypton native energy dollar that has its price reflective to the cost of electricity through proof of work mining on the blockchain so this is something that is kind of first of its kind in terms of experimenting with the means of proof of

1:52work as a useful tool for stability and we're excited to bring that in the market as we head into main net that's very cool and I would love to dive into all those intricacies it's I feel like Bitcoin is a great not direct comparison but like comparison to so to say that it's a proof of work chain uh it has been around uh the longest and obviously it has a strong Network um and it has

2:15its own purpose kaai does not serve that exact same purpose you're not trying to take over Bitcoin there's other Solutions there but and there are problems to note with Bitcoin in the fact that uh it's not you know it's not really cheap it doesn't have very high throughput um although it's a great chain if you're looking for everyday use and getting other people involved uh in

2:35a decentralized way there are solutions to be had which I'm guessing kaai is more suitable for everyday kind of transactions yeah so our goal is definitely to Target the payments infrastructure space we see stable coins as an emerging use case and really almost the Achilles heel of crypto because they bring centralized solutions back onto these decentralized

2:56blockchains and stable coins right now are amassing $200 billion doll in market cap they're taking over at least 10% of the total crypto market cap and they're replicating what is essentially traditional Finance on decentralized finance and on decentralized Rails Bitcoin is a close comparison it is proof of work there are many Pros to bitcoin that with qu we're not able to

3:18quite get to yet it is the most wellestablished cryptocurrency it is the largest in terms of institutional adoption and it has been around for decades so right now qu in its empy relative to bitcoin and it almost feels a little dirty you know coming on the show and having co-founder of cly Network whenever we're aiming to have these decentralized systems that exist

3:38without individual figureheads so I definitely look forward to a future in which I can go more hands off and take part in the ecosystem and get to a point that Qui operates on its own we see some of that in test net today so we are in active test net and there have been times where it's difficult to coordinate miners across a test net and it's hard to bring in all the people to get Buy in

3:58on upgrades or different things that were testing so for that to sort of play out in real time is cool to see as someone that's been working on the project but again still a long road ahead and a long journey and I think you're absolutely right in terms of Bitcoin being a close comparison but I think too the cryptocurrency space has evolved so much and we're seeing

4:16competitors like ethereum salana Avalanche Ripple cardono and so many others and in the layer one space is difficult to differentiate between so what we're attempting to do again with that energy dollar is something that does set us apart and also from a fundamental architecture in terms of how we accomplish scalability while maintaining that decentralization

4:35through a wide network of miners yeah no it it's definitely worth noting that when you have a a blockchain in more of its infancy it's hard to go purely decentralized and and have a you know one person one vote uh and and it's hard to agree on the future of the vision of where a blockchain should go without some kind of uh help at the beginning um but I'm sure that that kind

5:00of governance gets put in place and then and builds as the vision comes to an agreement between the community members um and with that the the nodes you mentioned and actually the governance and the decentralization of the network decentralization is important important to have a truly decentralized Network can you talk a little bit about how that works and you mentioned that it's proof

5:22of work obviously Bitcoin is also proof of work uh is there similarities there and what's different yeah so fundamentally our team proof of work is the only way of accomplishing decentralization at scale and the unique perspective of separating token holders and the actual network operations is something that Satoshi was very keen on and and something that gives Bitcoin an

5:44edge people think proof of work isn't sex anymore I tend to disagree Bitcoin is still 60 plus perc of the market and proof of work is still being represented as crypto RIT large so we're seeing that it's something that provides tangible benefits to a blockchain chain and in terms of governance it's a way that you can again separate those token holders

6:05from the people that actually run the code and operate the network and in terms of operating that Network when we talk about miners where qu separates from Bitcoin is that Bitcoin it has a Asic hash function so sha 256 has Asic machines for it and that gives Bitcoin a lock in in terms of its hardware and we've seen the mining Farms all amass this type of hardware for it everything

6:29produced by bitmain and others but with Qui Network we are a GPU mind algorithm so closer to original ethereum we've actually implemented a Prague pal algorithm that gives better efficiency to anything that looks like a GPU or has the memory available for GPU operations so that actually pairs nicely from our perspective in terms of the compute economy or what we deem as things that

6:51are aligned around sort of that flux ability to process different types of jobs and and run different types of applications so we have several Partners in space such as ion vast AI Chlor Ai and these are more of these decentralized GPU clusters that can have this on and off peak interchange with mining Qui Network or running Ai and doing other types of applications

7:14whenever developers request that type of job so we see that playing more nicely there's also other benefits in terms of decentralization for gpus such as the ability to sort of see it during import and exports like whenever China banned Bitcoin there was a ton of sort of uh outflows of Bitcoin hardware and people were able to sort of see that that was

7:34for Bitcoin because it was a shot 56 Asic and either destroy it or repurpose it for different parts with gpus that's a little harder so it gives a better resiliency to the actual network but it also has a sort of less of a moe compared to everyone having as6 in the market so definitely lots of trade-offs we see the barrier to entry is also lower with gpus so the fact that I can

7:54go buy Nvidia 3070 or 490 for you know $5 to $700 that's a better entry to the market than a $110,000 Asic for Bitcoin or some that even go up to $30,000 yeah it's an interesting discussion on how decentralized the Bitcoin network is but the barriers to entry to start mining it are quite High the competitiveness and the price point of the you know competing with giant

8:19wareh giant warehouses of of yeah well they have razor in margins so you know Bitcoin mining is a very very difficult business and anything Bitcoin miners have gotten to the point in which they're more so energy sourcers and energy providers and now that they're having to make deals and they're looking at things like AI compute and other types of GPU warehousing well it's

8:40difficult if you just have a bunch of a or bunch of shot 256 A6 and a bunch of Bitcoin A6 because you have all this sort of sunk Capital directly into Bitcoin and you've kind of made your bed in that regard so it's going to be interesting to see how Bitcoin miners perform I still think the ones that will continually pivot into Ai and then use that energy that they're sourcing in

8:58different ways is going to be keeping them competitive we see a lot of that in Texas we're based out of Austin so we see a lot of the different miners out of Dallas or or Midland in Odessa that are traditionally on oil wells and and tap into the flared gas mitigation that are sort of looking at different ways to to monetize their energy production and and Bitcoin I think is uh

9:19becoming a smaller portion of that compared to all these other options available definitely and I want to jump back into the currency itself and the payments uh and and getting that value of being able to actually make payments quickly cheaply in a decentralized way um the you mentioned about stable the stable coin and how that currency is of utmost importance when you're making

9:42payments can you talk about how exactly that works on Kai Network yeah so I think payments is still one of the largest areas for disruption in crypto as a whole and the fees we see on traditional traditional credit card payments and processors you know 2.5% interchange fees is ridiculous and that needs to get disrupted in many forms and Bitcoin again talking about that has failed from

10:07a lightning perspective block times on bitcoin are too slow at 10 minutes on average and we've still seen newer competitors in this space like salana that have very very fast block times but they still again are trending to mostly using the stable coins like usdt and usdc which is great for places that want to dollarize because you have a place like Venezuela or turkey Argentina they

10:31can say all right I can get USD usdc and I can go to a bodega and I can buy my lunch for the day and they'll they'll take that or can Halo cab and they'll take that we actually see a lot of that activity occurring on Tron so in terms of the stable coin adoption and where payments are heading I still think that's a trillion dollar opportunity for for people that want to do traditional

10:51staple coins in that market as well we see an area that says well if we were to take away Fiat and we were to take away all the different things that Fiat does to a blockchain in terms of centralized control having the ability to influence this externally to the blockchain and then also sort of creating this um you know diverse incentive and scheme in

11:11which Fiat is almost polluting these blockchains then what do we actually care about from a stability standpoint and we've seen in many other cases that energy is actually a relatively good source of stability and in proofer work systems we have that reference already available to us through the difficulty and through the overall hash rate in the system and so by oriz that hash rate

11:34through that Global set of miners we can emit a token proportionally to the hash rate that we call Chi or Qi and this Chi token acts as a stable Quin alternative it's not perfectly stable and that's by Design because if you were to create this realm of stable coins then there's no way of tying them to say a dollar because the dollar doesn't exist in

11:55terms of what this blockchain is viewing so that that that's by Design because we want that to be maximally decentralized and the more you influence these reference points in terms of what one1 US dollar is or what one euro is it pollutes that and we see over the long term that this concept of stability from a energy perspective pairs well in many different cases the first being rwas so

12:19rwas introduce ways of trading things like Commodities gold copper oil silver on chain and if you were to pair them against something tied to energy well that opens up unique Forex markets and people would potentially prefer to settle contracts in an energy denomination than something like a dollar especially if their longer term contracts the second being payments so

12:42again highlighting this case in which consumers over time want a more relatively stable form of purchasing power and if you were to say well what's an alternative to the dollar alternative to the Euros Euro or or different types of currencies well energy as a whole is is a useful basket and and that's something that over time if Supply chains kind of move and flow and have

13:04different means of sourcing energy then my purchasing power will maintain relatively stable compared to energy and then the third being AI agents in this area in terms of compute and sourcing that when I talked about some of the partners we have before well AI also doesn't really have a sort of perception or an understanding of Fiat because again it lives in this digitally native

13:24world and so if you were to tell it that its currency is tied to energy well it can understand how many watts it's consuming how long it's running it's computationally sort of intensive tasks that have a better basis and a better unit of account as it relates to that AI agent so we see sort of that intersection of those three categories really unique for

13:44this concept of an energy dollar and of course that's not to say all the other things that qu does from a just monetary system perspective with uh qu as an asset but but that's kind of the area that we're exploring it's very cool because I've seen many different stable coins try to have different algorithms and different backings over the years and uh I really

14:07haven't seen one that is more energy focused and I feel like this should have been more common sense that they should have come up with this earlier especially because the energy is so important in in Bitcoin um having you know that the the mining of it and and energy and sort of the misconception as well that people think that you know it's taking up all this energy when

14:27actually there can be a surplus of energy you can't provide energy to the world um but having the coin back in bitcoin's defense right many people have considered Bitcoin already carbon negative because the way in which it uses and consumes different types of electricity so you know we're not looking to go and completely de through on bitcoin we want to exist and we see

14:47that all the different types of Solutions in blockchain are potentially useful to explore but yeah I mean to bitcoin's defense right it has hasn't destroyed the planet yet many people were chanting chanting for its death you know 2017 2018 and and they said it's going to burn the world down and if anything it's just reinforced a lot of our energy infrastructure and has made

15:05it more reliable for people to go and tap into this network so do you think that having the a stable coin backed by energy will be uh more stable than a Fiat backed or just more practical or you know what are what are the benefits over something traditional like usdc usdt yeah I mean so it depends on your reference point right and if you're reference point is a

15:30dollar then obviously it will never match a dollar because your price parody to a dollar will always be$ one that's issued and one of the things that really inspired us too is just again that concept of decentralization because we were looking at a time in the market whenever usdc deeg whenever svb collapsed and then ultimately the FED had to come in and we sort of socialized

15:48all the losses that were attributed to many different banks failing during a sort of crypto catastrophe and that inspired us to rethink what coins really are and how they are transacting on chain so to come in and say this is going to be perfectly stable well that's not correct we want to create something that is truly decentralized has a relatively good

16:11basis for stability and is a better Foundation long term yeah I think it's important to note and even with the stable coins that are popular that are they're Fiat backed are they really stable when there's inflation and you know $1 is equaling one f a dollar but that's not really worth what it was years ago yeah and and obviously we're very fortunate for the

16:32people that transact in things like the US dollar because it is the sort of global hedge money and it will remain that way for for a very long time and we see currencies come and go and we don't know the sort of time frame of the US dollar But ultimately we do see a lot of the geopolitical influence in the US with our Rising debt and then all of the

16:52different problems that we kind of have we've extended our Supremacy rather far and wide and when you look at cracks are beginning to form from a US dollar perspective well there's sort of pause and and and there's reason for concern which is why I think they're starting to bring in all these different cases like we got to back the dollar with Bitcoin

17:09we got to create a strategic Reserve we have to explore these different options because there is you know fear in which bricks goes and says well we don't want to use the US dollars so then we have to put tariffs on them and and do all these different means to ensure that they maintain power for the US dollar and again that's just sort of the the way in

17:27which control is ex exerted through a currency and as long as there's a centralized group of people that can influence a currency and exert that control then people will suffer at that sort of the beets of those consequences so for us to explore something that's not tied to Fiat is a means of stability is actually more of a underlying current in the economy and is

17:52an underlying input and output to what people do every day that's kind of where we get to the point of energy we're actually not the first people to explore this you know there's actually a lot of other sort of thinkers great thinkers of our time like Thomas Edison Buckminster Fuller Henry Ford and and people that have thought about creating a currency

18:07around energy and and ultimately they didn't really have the tools to do it because how do you just go and issue this currency there has to be before blockchain like every there had to be a manual person issuing currency but now with blockchain technology we can create these forms of of currency that aren't issued by people and issued by machines and in terms of creating this energy

18:26Dollar on Quin Network through the the cheat asset well this is the first time we've exported with tying that to energy yeah no it's amazing what what blockchain can do in enabling uh not having a centralized point of somebody has to print this from some building um so it's very exciting and now with the practicality of making a you know a coin that it it great it's set up in an

18:53energy efficient way it's an energy dollar it's not backed by Fiat but the actual usability of it you know the user experience um there's you know there's a lack of crypto payments right now not just because of uh Bitcoin having a few dollars of cost you know it's hard to buy your coffee but because of the the wallets or the the practicality of it how can Quai sort

19:20of solve some of those problems making it easy to send remittances or to pay for a coffee and people to actually use it yeah yeah so I think first off we've definitely been sort of in a Chokehold from a crypto usability standpoint we we have metamask is like our our main thing that everyone uses and now like really we've tried to put as much as we can

19:43into that system and and web wallets or or sort of what everyone's familiar with we see a mobile first approach as being one of the ways we can lead in this area so we actually have several applications that we are launching that can get people directly using this energy dollar on their phone and on a mobile wallet that is pretty seamless and pretty easy

20:03to use we want this to look like Beno in terms of being able to get an account send money and and have it transact with a way that you have a contact and I have a trusted name and association with that address and ultimately too you know extending that making it it even easier than venmo because venmo still has friction in terms of getting deplatformed and limits and ways in

20:25which that is controlled by that single entity so we pushed in many cases a way of of getting more developers to create Solutions so being open source and the ability for people to take what we've built and try different solutions and and find different types of user experiences that benefit them and then also localizing that so having many different languages that are available

20:47and having that seamless and easy to use from a mobile perspective and then beyond that I think just the way in which that crypto today is just kind of uh normalized and making sure that people are are familiar with how crypto actually operates the concept of seed phrases the concept of private Keys what those mean abstracting those of course is important but we still want people to

21:10realize that they are having the Sovereign approach to how they store their funds and how they store their assets because if they don't then bad things happen if you kind of put people in a situation where they're not really sure of what's going on or they don't really know where things are then it's difficult and again that's kind of the cost of this type of asset and this type

21:28of of Industry but we want to ease that as much as possible that's good I'm looking forward to seeing uh some more adoption in in crypto payments uh so wishing the best for you guys on that and now where you guys are at with it right now you mentioned that there's a test net uh what exactly can people do to get involved with that and what's the current state of this yeah great

21:52questions so we've been in test net for some time and we are in our final test net that is going to end January 8th and and right now you can spin up a Qui node so you can run a participant a node that that joins Qui Network and then helps validate the blockchain you can mine with this given we are proof of work so if you have gpus that are laying around

22:12feel free to contribute that hash rate to Qui we've seen close to 42,000 gpus come in Mind by Network during this test net and we've seen 2200 nodes so different participants that have joined and taken part we've seen 34,000 addresses so pretty active in terms of user engagement a lot of these are actually occurring on mobile and we've seen great success in different

22:34types of applications that have been built from a developer perspective telegram games nft collections tokens that have been launched decentralized dexes uh decentralized exchanges and different types of just ways that people are developing on qu so we're definitely excited about the ecosystem that's emerging we want people tapped in to this type of economy in terms of

22:55centering it around thermoeconomics centering it around this concept of energy dollar building out a truly decentralized monetary system that can go and compete with the likes of Bitcoin and also compete with other systems that you know quite frankly have aifi over time and are still falling behind from what the users expect and what they demand so we we see again you know well

23:15uh for us it's a matter of getting to main net finishing out this test net strong and getting more people aware of Quai and and having them see that this is a viable opportunity for the future it's very cool Alan I'm excited to see more on the growth of the energy dollar and uh proper blockchain payments that people actually use and they prefer over

23:35uh the dirty uh credit card fees or other Fe at money um so I'm wishing you and your team the best on it I'm going to check out the the test net um before January 8th I'm going to leave a link to it in the show notes below as well for people to check it out I'm wishing all the best with uh the move towards the main net launch and and theqii token and

23:55I would love to follow up in the near future yeah let's do it Ashton thank you for having me on man excited to keep in touch and thank you for the time today