A Blockchain For The Next Billion Users
A Blockchain For The Next Billion Users
Bringing crypto to the masses with Sui, marketplace lessons learned, storytelling for Product Managers, building tech for Netflix, jobs, events, and more
Welcome back to another issue of Startup Pirate! I’m Alex Alexakis, and this is the newsletter with tech trends, startup insights and tactics behind successful companies - along with all the latest updates, jobs, and resources from Greek startups and Greeks in tech. You can find me on Twitter and LinkedIn. Join 4,060 readers by subscribing here:
A Blockchain For The Next Billion Users
This is an interview I was looking forward to and wanted to do for a long time! Kostas Chalkias, also known as Kostas Kryptos online, is one of the most prolific cryptographers in the world and the co-founder & Chief Cryptographer of Mysten Labs, a company valued at over $2 billion. Kostas along with Evan Cheng, Sam Blackshear, Adeniyi Abiodun and George Danezis, left Meta and set on a journey to build the blockchain that will onboard the next billion users to crypto, Sui (water in Japanese). They’re backed by some of the biggest names in the space from a16z and FTX to Coinbase, Lightspeed and more. With Kostas we discussed:
working with one of the first Bitcoin developers and writing code that currently runs on billions of mobile phones as a Lead Cryptographer at Meta
building a blockchain to bring decentralization to the masses, the use cases it unlocks, and onboarding web2 developers to web3
what led Mysten Labs to build an engineering hub in Greece
how an area of cryptography, Zero Knowledge Proofs, promises to bring privacy with auditor support to blockchains
Let’s get to it!
Kosta, it’s good to talk to you! It’s an appropriate time and not just because you announced a $300 million funding round earlier this month - you’re building a team in Greece for one of the most highly anticipated projects in crypto. But before I get to that, I’d love to learn more about your journey and what brought you to Mysten Labs.
KC: Oh boy, the beginning. I studied at the University of Macedonia in Thessaloniki, where I also did my PhD. My initial passion was machine learning, not cryptography. And the reason was that I wanted to build software to forecast football outcomes. We had a whole team at the university working on such a project (talking early 2000s) and it was very successful. My transition to cryptography started because of a hack. One day we got maliciously attacked, which led me to dive deeper into security and cryptography, and build expertise at the intersection of computer science and mathematics.
Fast forward a few years later, something that truly influenced my career since then, was my close collaboration with one of the first developers of Bitcoin, a person who worked directly with Satoshi Nakamoto, Mike Hearn. To some extent, I think I can say I worked “indirectly” with Satoshi! In 2017, I moved to London to work for R3 and the Corda blockchain as the Lead Cryptographer, where some of the largest organisations globally had been collaborating to create a private blockchain. Then, during a conference where I was presenting my work on blockchains and quantum computing, I met one of my current co-founders, Sam Blackshear, who brought me to Meta (Facebook, back then).
I truly believe that the blockchain team Facebook had put together (called Novi) was world-class. I joined as a Lead Cryptographer and wrote code for several projects including WhatsApp. The story is quite well known - we were building Libra, a blockchain-based stablecoin payment system, we were very close to the public launch, but mostly due to regulatory concerns this never went live. Facebook pulled the plug on the project and the whole team was dismantled. Alongside a group of leading members of Novi, Evan Cheng, Sam Blackshear, Adeniyi Abiodun and George Danezis, we decided to start Mysten Labs.
In March you announced the creation of a new Layer 1 blockchain, named Sui. Just to get everyone up to speed, the term Layer 1 refers to the base level of blockchain architecture. Examples of L1 blockchains are Bitcoin, Ethereum, Solana, etc. What’s your vision with Sui? Why will someone choose Sui to build applications?
KC: At Mysten Labs we’re building Sui, a new Layer 1 blockchain. There’s another team that left Novi to build its own chain and decided to use, or in fact bring to life, Libra. But in our case, Sui has new, much-improved algorithms and I believe it is one of the best Layer 1s in the industry. If you ask me, we’re building a better Ethereum. Let me explain why:
A faster experience. Think of it as an infrastructure with award-winning algorithms that enables an extremely fast (compared to what’s already out there) way for all nodes in the network to reach an agreement about the present state of the network - what we call consensus. At the same time, there’s a way to bypass full consensus. There’s no need to order every transaction, which leads to the parallelisation of transactions. These might be from sending a message to a friend to posting a job opening, or from publishing a tweet to voting. As a result, we enable faster transactions per second, and with lower latency (how fast a transaction is realised).
A more secure experience. That’s because Sui uses a new, object-oriented programming language called Move, which is more secure and has more flexibility compared to languages such as Solidity (used in Ethereum). We started working on Move, while we were still at Facebook, and it was born to address some of Solidity’s problems. On a similar note, Sui has rich built-in cryptography primitives that will support a range of privacy-focused applications to be created on top of Sui.
More developers and use cases. Using an object-oriented programming language, such as Move for Sui, is going to be a killer feature here. You know how many good Ethereum developers exist out there? A few thousand. On the contrary, Java has millions of devs. Our goal is not only to bring web3 builders into our ecosystem, but also to onboard web2 developers. And not only that. Because of our object-oriented principles, we empower builders to think and create a vast range of applications on a blockchain that were previously unthought of. I will come back to that later.
I think these make it obvious as to why we decided to create a Layer 1 instead of a Layer 2. If we take a step back, there are two ways to address the scalability problem in blockchains and accommodate the increasing demand for users and transactions. First, you make the blockchain itself have a higher transaction capacity. Second, you change the way that you use the blockchain. The latter is what happens nowadays in Ethereum where multiple teams work towards performing the bulk of the network activity in a protocol on top of Ethereum (a Layer 2). Nevertheless, our vision is more aligned with building an extremely fast Layer 1 blockchain and still be compatible with all of the existing scalability techniques, including bridging support with other chains.
Are there specific use cases that you think will thrive on Sui?
KC: Gaming. Sui brings some significant benefits for gamers and game developers. First things first… A game that’s not built on a blockchain is inherently gated and limited. Blockchain gives ownership of in-game assets to the hands of users, rather than to the centralized platform. And this is the future. In-game assets - think swords, characters, skins, homes, etc - can be tradable for monetary value or transferred to other games, while developers can build experiences on top of existing games. The gaming ecosystem suddenly becomes more open. Now, due to scalability issues, media-rich games cannot be built on top of most of the current blockchains. Sui changes that and we have lots of exciting partners currently building games with us.
But we don’t stop at gaming, right? There are a lot more use cases that I believe Sui is going to attract because it’s scalable, fast and secure; DeFi (Decentralized Finance) and IoT (Internet-of-Things) data on-chain being ideal applications. If you think about it, a vast number of elements in both our physical and online worlds - a tweet, a like, a webpage, a soccer game score, a real estate contract - can be NFTs; unique cryptographic tokens with a clear owner that exist on a blockchain and cannot be replicated. And because with Sui-Move, you can create a vast range of objects that can be NFT’ed, I truly believe that Sui is going to be a key building block in the transition from web2 to web3. You should think about moving Startup Pirate to Sui one day; all of your newsletter articles could be encoded as NFTs!
Well, we discussed scalability and security quite extensively. How are you optimising for decentralization?
KC: Indeed, the more decentralized a network is, then, oftentimes, scalability becomes harder because more nodes have to communicate with each other until a transaction is accepted on the blockchain. In our case, we have a path for a large number of transactions to run in parallel and for validators to spin up more servers, while at the same time the communication complexity among them stays almost stable. We achieve that via a transaction agreement protocol called FastPay and compact cryptographic signatures. So in such cases, we optimize against the scalability trilemma (decentralization, scalability, security). This is a list of the types of transactions we currently support that can be parallelized (here). As you will realize by reading through that list, we even identified use cases where originally parallelization opportunities are not evident, but there are tricks to rewrite smart contracts with the aim to get advantage of our parallel execution scheme; typical examples include decentralized lotteries and DeFi Oracle price posting, where major parts of the smart contract flows can be executed on parallel.
When will people be able to use Sui?
KC: To give some further context here. Along the lifecycle of a blockchain, there are alternate environments that mimic the function of a production system and allow developers to build and experiment with projects without the higher stakes of a live system. We go from devnet to testnet and then mainnet (the production system). Right now, we are at devnet and we expect to move to testnet within the next few weeks. We’re going to gather more feedback from people and then proceed with mainnet within the upcoming months.
Switching gears for a second - you have a significant Greek component in the team with George Danezis and yourself in the founding team, and a few more very high-calibre people in engineering and cryptography. You recently announced the creation of a tech hub in the country, in Athens and Thessaloniki. Why did you decide to build a team here?
KC: Most people don’t know about this, but here’s the thing… At the Financial Cryptography conference next year - one of the most prominent conferences in the industry - there are 12 members in the program chair and committee of Greek origin. Most of them, now at Stanford, Yale, Visa, Chainlink, Mysten Labs and other prestigious universities and companies, graduated from a university in Greece. This is impressive and shows an extremely high density of amazing Greek talent in cryptography and the broader blockchain industry. I suppose the great STEM education in the country plays a role here. Perhaps, the recent economic crisis in Greece also led more people to understand the benefits of blockchain technology and decentralization. Thus, we decided to build hubs in Athens and Thessaloniki. We have already made 6 hires in Greece and are hiring for more positions. You can take a look at our open roles here. My belief is that our hub will attract not only local talent, but also from the broader region.
I recently got more interested in Zero Knowledge Proofs - an area of cryptography whose general ideas were developed as early as the 1980s, but interest exploded recently driven in part by emergent applications in the blockchain space. So before we wrap up I have to ask you: how do you explain ZKPs to a five-year-old?
KC: Yes, I saw your ZKP reading list online. Welcome to the rabbit hole! The most simple way to think about this is the following: When you go to the supermarket and want to buy alcohol or anything else that you need to be above 18 years old to purchase, you have to take out your ID and give it to the cashier. Why on earth should you disclose to them your full name, address, the exact date you were born, etc? They just need to find out if you’re above 18 or not. Zero Knowledge Proofs solves this. You just share the proof that you’re above 18 without any other information about yourself. Just a True/False statement about the exact condition that’s required. So ZKP is a cryptography technique, where you answer a question by proving that it’s true or false without disclosing any further information.
As a side note, even though ZKP became popular recently in the blockchain industry, most applications use it for its scalability, not privacy necessarily. But I’ll leave this for our next conversation!
In what way is Sui using Zero Knowledge Proofs and what are the use cases it enables?
KC: I’m now building a Zero Knowledge Proofs team at Sui - this is both for privacy and scalability. Essentially, developers will be able to create apps that support private transactions between users and not be fully viewed by everyone as happens in most of the popular chains right now. Sui will offer them the primitives or the building blocks to do so. We won’t offer private transactions on our blockchain, but will empower others to support them on top of Sui. For example, someone might build a Know Your Customer application, which will prove that a customer is not sanctioned, without anyone else knowing this person’s past transactions. Or an e-voting application, where others won’t be able to see what you voted for until the final result is out. Obviously, we strongly recommend creating applications that are fully aligned with any regulatory guidelines and we’ll provide example contracts on how to achieve that.
If we zoom out and take a 10,000 ft. view, how do you see privacy evolving in blockchains?
KC: The thing is that, by design, transactions in most blockchains are public, meaning that everyone can see the transactions between users. Where I see things going is that most blockchains will end up supporting private transactions, but regulators or auditors will have the ability to view parts of a transaction if required by a court order or law. You saw what happened with Tornado Cash, right? In order for private transactions to become mainstream, which is much needed to some extent, you need to have regulators on board. And this is not going to happen unless there’s a way for a transaction to become transparent to auditors if necessary.
Thank you so much for taking the time Kosta, it was great to talk to you! We should do a round 2 soon.
KC: Thanks for having me.
Startup Jobs
Looking for your next career move? Check out 990 job openings from Greek startups hiring in Greece, abroad, and remotely.
News
Google will set up its first cloud region in Greece. More details are here.
Timberhub raised a €5.8m Seed round by HV Capital, Creandum and Speedinvest to reshape the timber industry and decarbonise construction. You can learn more about the team in the previous issue of Startup Pirate.
Prometheus Technologies, a startup that helps fintech companies offer institutional grade investing to their customers, raised a funding round by Genesis Ventures.
easyBoat raised €500k for its price comparison platform for yacht rentals.
Swollet, a gamified educational platform, received grant support from NEAR foundation.
AI content creation, Charlie, launched on Product Hunt and ranked #1 product of the day.
Neurofit VR, a patient-centred virtual rehabilitation startup, is part of Techstars accelerator.
Startup Profiles
Intelligencia, Terra, VALK, Zenus
Interesting Reads & Podcasts
Interview with the co-founder & CEO of Skroutz, George Hadjigeorgiou, discussing company culture, his journey with Skroutz, and more.
Marketplace lessons learned with Manolis Manassakis, COO of Qogita, here.
How to migrate legacy code efficiently by Eleni Papanikolopoulou, iOS Engineer at Skroutz, here.
Building technology to support the needs of Netflix’s media encoding platform by Kostas Christidis, Senior Software Engineer at Netflix, here.
Breaking into AI Product Management with Marily Nika, AI Product Lead at Meta, here.
A post by Iosif Alvertis, SVP Product at Orfium, on the power of storytelling for Product Managers.
The tools of a designer with Thanos Papavasileiou, Product Design Lead at Transifex, and Yiannis Konstantakopoulos, UI & UX Designer, here.
Events
“Startup financing and gov-backed loans” by Tech Finance Network on Oct 4
“Scale-up Greece meetup: ORFIUM” by Scale-up Greece Meetup on Oct 5
“How to build an ecosystem starting from your core product” by Product Community Greece on Oct 6
“Greek Fintech Hub Conference” by Greek Fintech Hub on Oct 21
If you find this newsletter interesting, consider sharing it with friends, or subscribing if you haven’t already.
Thanks for reading and see you in two weeks,
Alex