Parity’s Jutta Steiner: ‘Web 3.0 Will Evolve as Interoperability and Usability Improve’

Interviewer: So I was wondering if you could
start just by telling me about your background and what made you end up working with cryptocurrencies
and blockchain specifically? J: My name is Jutta Steiner, I’m the CEO of
Parity. I started this company three years ago, together
with Gavin Wood, who was one of the original co-founders of Ethereum, and I myself used
to work for the Ethereum Foundation, looking after security before the launch of the Ethereum
platform. Before that, I have a background in applied
math, so I spent quite some time at uni, worked a bit in consulting after my PhD, and then
got more and more interested basically at around the time of the Snowden revelations
— interested in, like, what’s actually happening online, what’s happening to our data? Like, how does this all work? And I ended up reading a lot, accidentally
came across Maidsafe, which was an early project in that space as well, and then saw people
discussing Ethereum in that context about four years ago, like, how to use it for access
management of data. And then, yeah, I met the Ethereum people
— this is how I got involved, basically. I: So, it all started with Ethereum for you,
then? J: Yeah. I mean, I had read about Bitcoin and it was,
like, interesting to me — like, from a math perspective. But I only realized the potential when I came
across these discussions of what can you actually do with Ethereum — I really liked this level
of abstraction. Yeah. I: So why don’t you next tell us a bit about
your relationship with Ethereum — both personal and business, of course. We want to hear about Vitalik! J: Back at the time I got interested in, like,
what can you actually do with it, like, this whole data perspective was interesting, but
then also around the same time I met Jessi Baker, who was just starting a company called
Provenance, where she looked at — sort of trying to create a Facebook for products,
like, bringing transparency to supply chains, that was sort of the idea. Like, what’s the history, what are the people,
processes behind products. And we started to speak about how could you
use blockchain and in particular Ethereum, and I ended up sort of doing this and working
for the foundation on security — so, working with external researchers, making sure that
certain attack scenarios are analyzed in a bit more detail before the launch of the platform. So that’s what I did, like, initially, but
then, basically, when working on problems, realizing that really the technology isn’t
there, yet — where it needs to be in order to become mainstream. And so out of that frustration, Parity came
out as a company where we wanted to further work on the fundamental technologies and push
that forward, which kind of nicely ties back to my math and science background. So, being able to push the technology on that
end is pretty good fun. I: And so what’s Parity’s doing now that’s
new? Because I was just doing googling before this,
I saw that you guys have the Polkadot blockchain platform now. J: Initially, we started with a clean-slate
implementation of Ethereum, and then we started Parity just to… like, basically, taking
all the learnings from the early days of Ethereum and coming up with a new implementation. And then over time, like, through different
projects that we did and the different discussions we had, we understand more and more what it
is that is needed to bring the technology to a state where it can actually be used. Initially, the ideas evolved a lot around
just pure interoperability. Like, a few years ago, the discussions about
private chains and public chains started, so it seemed sensible, and it also seemed
sensible as a way of optimizing scalability. Like, think of when you have parallel chains
where certain clusters of transactions are being processed, and then you have interoperability
between the chains — that’s one way of scaling a system, right? But then over time, things like governance
became also more of an issue and we really started thinking about what is the next level
of abstraction that we need to bring to this technology in order to make it much more genuine,
much more easy to adapt to solve all these issues. And that’s what Polkadot — or the technologies
around Polkadot — sit right now. So, Substrate is a technology that we just
released in a PoC state as a testnet, it’s a very general framework for spinning up your
own state machine — so if you think of… initially, you have Bitcoin with a platform,
where you could do payments basically, if you want to think of it in that way, then
with Ethereum you got this general platform for building [decentralized] applications. And then now with Substrate, you get a framework
for spinning up your own [decentralized] platform — so, spinning up your Ethereum, your own
Zcash, your own Bitcoin — and because they all use the same framework, by default, they
interoperate. And that’s the problem that we are trying
to solve at the moment, it’s like, very technical engineering, basically creating these frameworks,
like p2p technology, and networking and there are all sorts of elements. And it’s really not that easy to build them
all together so that they work, yeah? I: Okay, so this might be kind of a stupid
question — I mean, I understand everything you said, because I write about crypto a lot,
but to our “YouTube audience” sort of people, could you explain everything you just said
in, like, one simple sentence? You know, like, what does Parity do? What does Polkadot do? J: So, what we’re doing at Parity is coming
up with a fundamentally new way of building online services. So, the way how the web has evolved and applications
on the web is… Everything we do, every service we use, we
always have to rely on centralized servers, where all our data is hosted, where there’s,
like, an authority that decides on how does the service work, what happens if there’s
contention — it’s always, like, push to them, or like, they are in charge, they have
the authority to decide. And what we’re trying to build is basically
a system where there’s much more agency on the user side, where there’s less of the divide
between service provider and the people that use the services. So that it really becomes a much more open,
much more peer-to-peer way of interacting with each other, where we don’t have to go
through Facebook, through Google but instead have, like, seamless interacting with our
friends or whoever we want to interact with. I: So that’s like web 3.0? J: That’s what we call web 3.0, yeah. The next level of the web. I: So how long do you think it would take
before we actually would enter the web 3.0 era? Because it took us a while to get to web 2.0,
so do you have like a timeframe for that? J: So, with Polkadot specifically, we are
aiming to release Polkadot at the end of next year. Now that doesn’t mean we’ll already see applications,
I think that’s going to be a gradual process. I mean, there are things you can use already
to make your applications more [decentralized], more peer-to-peer. There are some solutions for having interoperability,
like cross-chain transactions. I hope that, over the next few years, we’re
going to see the first implementations, applications that fundamentally use this. A lot of what we have to solve revolves around
usability and user experience, and this will probably still take a bit. Also there is, sometimes, an advantage from
having systems a little bit centralized, because you can have a massive efficiency gain in
certain cases, and we still haven’t found out, like, where we have to make these trade-offs,
like, how [centralized], how [decentralized] should things be. Because, if a system is completely [decentralized],
that also means, as a user, I have a lot of responsibility, and what are the right ways
of putting in redundancy, so that when I lose a private key, which is the access to my wallet,
I still can move the cash or the money I have in the wallet. I: So what would you say to someone that says:
“You know, I don’t know what you’re talking about with this web 3.0, I like using Facebook,
it’s comfortable, its familiar. I don’t care if they take my data, I have
nothing to hide…”? You know, what’s your argument to people that
would say that? J: It’s hard if people don’t see. like, what the underlying mechanisms are that
make systems like Facebook really not the perfect systems to interact with, but I guess
the recent revelations around Cambridge Analytica have shown — and in particular have shown
the government — how powerful these platforms have become, which the hearings have shown. There is a lot of spotlight now on all the
services to come up with answers, and, like, because governments fear the interference
that comes through these services, and I believe we’re gonna see regulation that will play
in favor of decentralization to a certain extent, and we’ve seen that in Europe already
with GDPR, so there’s a directive on data protection — although there are some questions
around, like how this interacts exactly with blockchain — I believe, on the political
side, there is a lot of will of making sure we don’t give power to qualified governments
that are completely unregulated. I: Bringing up the data privacy bill, I know
some blockchain companies have expressed some problems with it because of the whole “right
to be forgotten” and the whole point of a blockchain is that nothing is ever forgotten. So how do you see that contradiction playing
out? J: So I think we… I mean I hope that we see clarification from
regulators and from lawmakers over the next couple of years. Like, in principle, I see that the people
that believe in blockchain technology and the people that were behind the GDPR have
a huge set of common goals, basically giving power back to the users, and it’s basically
unfortunate that the drafting of the GDPR came just before blockchain became a thing,
and so became way too specific in the way it was drafted. I mean, politics can be slower, but I would
hope that people will recognize the potential of the technology, and, therefore — I don’t
know — create sandboxes, or, like, actually find a way of just leading to more clarification. I: So what do you think is maybe an example
of a country or regulatory framework that they’re doing everything right? Does that exist yet? J: I mean, Switzerland was interesting because,
like, small countries have it easy, right? Or, like, easier because they’ve always struggled
with retaining, maintaining relevance and so they had to be more agile and adapt to
changes in the environment much more quickly. So, I think we’re gonna see a lot of regulatory
innovation, or, like, regulatory competition between countries — which helps entrepreneurs
to a certain extent, but then only so much, as this is all global, this is technology
that we’re building for the entire web, so even if you’re complying in one country that
doesn’t help you necessarily. Still, it gives you a lot of assurance, yeah. I’m not sure whether I’ve seen anybody who
does everything right, but it’s quite good that the fact that people are mobile these
days and they just move around wherever they can build their business, has that to add
to regulatory competition. I: So, this next question is changing the
subject a bit, but I saw you retweeted the other day kind of a meme about women in crypto,
where the media is shouting “Where’re the women in crypto?” and there’s a woman in crypto
shouting back, like, “I’m right here!” And they’re not listening. So, I’m sure… like, my question is, how
many times do you get asked about what’s it like being a woman in crypto? J: I get asked frequently, like, my perspective
on this and what needs to be done. And then, I guess, my frustration with that
topic comes a lot from… often those discussions are very nuanced, but then, in the end, all
that gets printed, is like just a complaint — like, there aren’t that many, or like
the main topic of the article is [that] there are only Lambos, and I don’t think it’s helpful. I believe it’s more helpful to just talk about
the work that people do, and, like, see that as… I don’t find it inspiring if I see people
just driving their Lambos either, it wouldn’t have been the reason why I would have come
and work in crypto, but instead seeing people that just work in the space and becoming,
like, interested in the topics. That’s why, what I believe should be talked
about. I: My next question is about the Ethereum
and the frozen wallets that happened — well, a while ago — but it became a news topic
again in April because there was the Ethereum proposal to reverse the hack, and it ended
up being — or not the hack, to reverse the freeze — and it ended up being voted down. And I was wondering if that’s something that
you guys at Parity are still thinking about, how to get the Ethereum out of that frozen
library, or if it’s kind of like, “It happened, it’s done, we’re just moving forward”? J: So we’re still… I mean there are a lot of efforts within Ethereum
to come up with answers, like, how to fix the issue of governance — just in general
— and the reason why governance is an important thing is because, if you have an answer to
this, it’s easier to come up with ways where you decide on contentious issues, like whether
you want to have a fork or whatever, to unfreeze the funds. And I believe this is a fundamentally needed
debate, because we haven’t figured this out yet — like, how do we actually want to govern
decentralized systems. And that’s what we are trying to work out
with the community. I do believe if you want to encourage innovation
in space, you need to make sure you don’t discourage experimentation, like the optimization
that led to the freeze was a very sensible optimization back at the time. It became clear it will be an issue — like,
transactions throughput, the cost of transactions — and we made an optimization that would
lead to less cost, if you deployed a wallet. And the truth is like the tools that we need
in order to write smart contracts — safe smart contracts — aren’t there yet. And so, not finding an answer to… and the
wallet freeze wasn’t the only issue that happened where people lost access to their funds, there
were other issues, and I still hope that we find a solution where bugs in infrastructure
that led to people losing access will be fixed in an adequate way. I: Today, during the TechCrunch fireside chat
with Vitalik Buterin, he mentioned something about recovering frozen Ethereum funds by
doing a “soft spoon,” and I was wondering if you could explain what that phrase is,
if I even got it correct? J: So, “soft spooning” isn’t exactly a way
of recovering — what you do with a soft spoon is you basically use whatever the current
state is of a chain — say, Ethereum, like, who owns how much ether, what is the state
of the contracts and whatnot — and use this as a starting point for a completely new chain. And then, obviously, you have all freedom
to also propose changes to that state. In that case, what you could do is you decide
to fix the buggy library contract, and so, all of a sudden, that would become accessible
again. So basically, in a new chain — maybe like
in an Ethereum 2, that’s proof-of-state based — you would start with a clean state where
all known bugs are fixed, and that’s what falls under or solutions like this is what’s
called a “spoon.” Like, you just take sort of the state as inspiration
for the state of the new chain. I: So you’re like scooping it up, like a spoon? J: Yeah. I: Okay, got it. I: What does a normal day in your life look
like? J: Oh, what’s a normal life? I mean, it’s a mix of all sorts of tasks,
like meeting the team, there’s a lot of travel, going to conferences, speaking, meeting with
partners. I mean, I guess there’s no typical day, but… Yeah, I mean the company also has changed
over time — we have been all around 50 people, and so we need to find answers, like how we
scale our company internally as well, and, yeah, that’s the topics that are on the plate.

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