Builder: Nicholas Gregory
Language(s): C++, Rust
Contribute(s/ed) To: Ocean Sidechain, Mainstay, Mercury Pockets, Mercury Layer
Work(s/ed) At: CommerceBlock (previously)
Previous to Bitcoin, Nicholas was a software program developer working within the monetary system for banking corporations creating buying and selling and derivatives platforms. After the 2008 monetary disaster he started to think about options to the legacy monetary system within the fallout.
Like many from that point, he fully ignored the unique Slashdot article that includes the Bitcoin whitepaper because of the obvious deal with Home windows as an software platform (Nicholas was a UNIX/Linux developer). Fortunately somebody he knew launched him to Bitcoin afterward.
The factor that captured his curiosity about Bitcoin slightly than different options on the time was its particular structure as a distributed laptop community.
“The truth that it was like another approach. It was all based mostly round [a] type of […] community. And what I imply by that, constructing monetary programs, individuals at all times wished a system that was 24-7.
And the way do you cope with somebody interacting [with] it in several geographical components of the world with out it being centralized?
And I’d seen varied methods of individuals fixing that downside, nevertheless it by no means had been performed, you already know, in a type of […] scalable answer. And utilizing […] cryptography and proof of labor to unravel that concern was simply bizarre, to be sincere. It was completely bizarre for me.”
All the different programs he had designed, and a few that he constructed, have been programs distributed throughout a number of components of the world. In contrast to Bitcoin nonetheless, these programs have been permissioned and restricted who may replace the related database(s) regardless of that proven fact that copies of them have been redundantly distributed globally.
“The truth that in Bitcoin you had everybody type of doing this proof of labor recreation, which is what it’s. And whoever wins does the [database] write. That mess[ed] with my head. That was […] very distinctive.”
Starting To Construct
Nicholas’s path to constructing within the area was an natural one. On the time he was residing in New York Metropolis, and being a developer he in fact discovered the unique Bitdevs based in NYC. Again then meetups have been extremely small, generally even lower than a dozen individuals, so the setting was far more conducive to in-depth conversations than some bigger meetups today.
He first started constructing a “hobbyist” Over The Counter (OTC) buying and selling software program stack for some individuals (again then a really vital quantity of bitcoin was traded OTC for money or different fiat mediums). From right here Nicholas and Omar Shibli, whom he met at Bitdevs, labored collectively on Pay To Contract (BIP 175).
BIP 175 specifies a scheme the place a buyer buying a superb participates in producing the tackle the service provider gives. That is performed by the 2 first agreeing on a contract describing what’s being paid for, afterwards the service provider sends a grasp public key to the buyer, who makes use of the hash of that description of the merchandise or service to generate a person tackle utilizing the hash and grasp public key.
This permits the client to show what the service provider agreed to promote them, and that the cost for the nice or service has been made. Merely publishing the grasp public key and contract permits any third celebration to generate the tackle that was paid, and confirm that the suitable quantity of funds have been despatched there.
Ocean and Mainstay
Nicholas and Omar went on to discovered CommerceBlock, a Bitcoin infrastructure firm. Commerceblock took an analogous method to enterprise as Blockstream, constructing technological platforms to facilitate the usage of Bitcoin and blockchains basically in commerce and finance. Shortly afterwards Nicholas met Tom Trevethan who got here on board.
“I met Tom through, yeah, a mutual pal, comfortable to say who it’s. There’s a man referred to as, who, new individuals most likely don’t know who he’s, however OGs do, John Matonis. John Matonis was a superb pal of mine, [I’d] identified him for some time. He launched me to Tom, who was, you already know, type of extra on the cryptography aspect. And it type of went from there.”
The primary main undertaking they labored on was Ocean, a fork of the Parts sidechain platform developed by Blockstream that the Liquid sidechain was based mostly on. The businesses CoinShares and Blockchain in partnership with others launched an Ocean based mostly sidechain in 2019 to concern DGLD, a gold backed digital token.
“So we, you already know, we have been engaged on forks of Parts, doing bespoke sidechains. […] Tom had some concepts round cryptography. And I feel one in all our first concepts was about bolt on these forks of Parts onto […] the Bitcoin major chain. […] We thought the cleanest approach to try this was […] utilizing some kind of, I can’t keep in mind, nevertheless it was one thing [based on] single-use sealed units, which was an invention by Peter Todd. And I feel we carried out that pretty effectively with Mainstay.”
The principle distinction between Ocean and Liquid as a sidechain platform is Ocean’s use of a protocol designed at Commerceblock referred to as Mainstay. Mainstay is a timestamping protocol that, in contrast to Opentimestamps, strictly orders the merkle tree it builds as an alternative of randomly including objects in no matter order they’re submitted in. This permits every sidechain to timestamp its present blockheight into the Bitcoin blockchain everytime mainchain miners discover a block.
Whereas that is ineffective for any bitcoin pegged into the sidechain, for regulated actual world belongings (RWA), this gives a singular historical past of possession that even the federation working the sidechain can’t change. This removes ambiguity of possession throughout authorized disputes.
When requested in regards to the finally shuttering of the undertaking, Nicholas had this to say:
“I don’t know if we have been early, however we had a couple of shoppers. However it was, yeah, there wasn’t a lot adoption. I imply, Liquid wasn’t doing wonderful. And, you already know, being based mostly in London/Europe, every time we met shoppers to do POCs, we have been competing in opposition to different well-funded tasks.
It reveals what number of years in the past they’d both obtained cash from individuals like IBM or among the huge consultancies and have been selling Hyperledger. Or it was the times after we can be competing in opposition to EOS and Tezos. So as a result of we have been like an organization that wanted cash to construct prototypes or construct sidechains, it type of made it very onerous. And again then there wasn’t a lot adoption.”
Mercury Pockets and Mercury Layer
After shutting down Ocean, Nicholas and Tom finally started engaged on a statechain implementation, although the trail to this was not easy.
“[T]right here have been a couple of issues taking place on the identical time that led to it. So the 2 issues have been we have been concerned in a [proof of concept], a really small […]POC for like a possible shopper. However this rolled round Discreet Log Contracts. And one of many challenges of Discreet Log Contracts, they’re very capital inefficient. So we wished a solution to novate these contracts. And it simply so occurred that Ruben Sampson, you already know, wrote this sort of white paper/Medium put up about statechains. And […] these two concepts, that type of solved doubtlessly that concern round DLCs.”
In the long run they didn’t wind up deploying a statechain answer for managing DLCs, however went in a unique course.
Properly, there was one other factor taking place on the identical time, coinswaps. And, yeah, keep in mind, in these days, everybody frightened that by […] 2024/2025 […] community charges might be fairly excessive. And to do […] coin swaps, you type of wish to do a number of rounds. So […] state chains felt excellent as a result of […] you principally take a UTXO, you set it off the chain, after which you’ll be able to swap it as a lot as you need.”
Mercury Pockets was totally constructed out and purposeful, however sadly by no means gained any consumer adoption. Samourai Pockets and Wasabi Pockets on the time dominated the privateness software ecosystem, and Mercury Pockets was by no means capable of efficiently take a chew out of the market.
Moderately than fully hand over, they went again to the drafting board to construct a statechain variant utilizing Schnorr with the coordinator server blind signing, which means it couldn’t see what it was signing. When requested why these adjustments have been made, he had this to say: “That may give us much more flexibility to do different issues in Bitcoin with L2s. You understand, the second you will have a blinded answer, we thought, effectively, this might begin having interoperability with Lightning.”
Moderately than constructing a consumer dealing with pockets this time, they constructed out a Software program Improvement Package (SDK) that might be built-in with different wallets.
“{…] I suppose with Mercury Layer, it was very a lot constructing a type of […] full-fledged Layer 2 that anybody may use. So we [built] it as an SDK. We did have a default pockets that individuals may run. However we have been hoping that different individuals would combine it.”
The Finish of CommerceBlock
In the long run, CommerceBlock shuttered its doorways after a few years of good engineering work. Nicholas and the remainder of the crew constructed quite a few programs and protocols that have been very effectively engineered, however on the finish of the day they appeared to at all times be one step forward of the curve. That’s not essentially a superb factor on the subject of constructing programs for finish customers.
In case your work is simply too far forward of the demand from customers, then in the long run that isn’t a sustainable technique.
“…being within the UK, which isn’t doing that effectively from a regulatory perspective, performed into it. If I used to be residing in Dubai, possibly that might have been a unique dialog. You understand, again after we made that call…issues weren’t nice within the US. I feel issues have improved there. But additionally, I feel…Bitcoin is in a superb place financially. I feel it’s clearly getting used as a product. However I feel the L2s within the area simply don’t have a lot consumer adoption.”
When requested why he thought individuals weren’t utilizing Layer 2s at scale, he had this to say: “…in my adventures of engaged on CivKit (a decentralized market), one of many questions that was at all times posed to me is, when Tether, when stablecoins? So while you’re engaged on a undertaking that’s making an attempt to advertise Bitcoin within the world south, however everybody you meet within the world south desires stablecoins, you begin to marvel, effectively, am I constructing the best software? Do individuals even wish to use this?”
On the finish of the day, essentially the most helpful and sound engineering work nonetheless must be adopted and used, in any other case what’s the worth of it within the first place?
“…there was a shift within the final 4 years for it to be a retailer of wealth. And I do suppose that’s a danger as a result of I feel if individuals have been utilizing Bitcoin proper now and the mempool was costly, was jammed up and charges have been excessive, there’s sufficient vivid individuals to construct good L2s. However they’re not being constructed as a result of there’s no demand. And, you already know, nobody desires to construct software program, whether or not that’s open supply or commercially, when it’s only a bunch of hobbyists utilizing it. And I feel that’s one of many challenges of Bitcoin proper now. Now we have an absence of customers and possibly down the road that’s an issue.”
“I feel there’s quite a lot of sensible individuals in Bitcoin that may construct fascinating stuff, however I feel the main focus now must be customers.”
