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 companies creating buying and selling and derivatives platforms. After the 2008 monetary disaster he started to think about alternate 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 as a result of obvious concentrate on Home windows as an software platform (Nicholas was a UNIX/Linux developer). Fortunately somebody he knew launched him to Bitcoin in a while.
The factor that captured his curiosity about Bitcoin quite than different alternate options on the time was its particular structure as a distributed laptop community.
“The truth that it was like another manner. It was all primarily based round [a] form of […] community. And what I imply by that, constructing monetary methods, folks at all times needed a system that was 24-7.
And the way do you cope with somebody interacting [with] it in several geographical elements of the world with out it being centralized?
And I’d seen numerous methods of individuals fixing that drawback, however it by no means had been executed, you realize, in a form of […] scalable answer. And utilizing […] cryptography and proof of labor to unravel that challenge was simply bizarre, to be sincere. It was completely bizarre for me.”
All the different methods he had designed, and a few that he constructed, have been methods distributed throughout a number of elements of the world. Not like Bitcoin nevertheless, these methods have been permissioned and restricted who might 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 form 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 house was an natural one. On the time he was dwelling in New York Metropolis, and being a developer he after all discovered the unique Bitdevs based in NYC. Again then meetups have been extremely small, generally even lower than a dozen folks, so the setting was way more conducive to in-depth conversations than some bigger meetups nowadays.
He first started constructing a “hobbyist” Over The Counter (OTC) buying and selling software program stack for some folks (again then a really important 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 handle the service provider gives. That is executed 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 handle 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 great or service has been made. Merely publishing the grasp public key and contract permits any third occasion to generate the handle 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 the same strategy to enterprise as Blockstream, constructing technological platforms to facilitate the usage of Bitcoin and blockchains usually in commerce and finance. Shortly afterwards Nicholas met Tom Trevethan who got here on board.
“I met Tom through, yeah, a mutual pal, pleased to say who it’s. There’s a man known as, who, new folks most likely don’t know who he’s, however OGs do, John Matonis. John Matonis was a superb pal of mine, [I’d] recognized him for some time. He launched me to Tom, who was, you realize, form of extra on the cryptography aspect. And it form of went from there.”
The primary main venture they labored on was Ocean, a fork of the Parts sidechain platform developed by Blockstream that the Liquid sidechain was primarily based on. The businesses CoinShares and Blockchain in partnership with others launched an Ocean primarily based sidechain in 2019 to challenge DGLD, a gold backed digital token.
“So we, you realize, we have been engaged on forks of Parts, doing bespoke sidechains. […] Tom had some concepts round cryptography. And I feel one in every of our first concepts was about methods to bolt on these forks of Parts onto […] the Bitcoin primary chain. […] We thought the cleanest manner to do this was […] utilizing some form of, I can’t bear in mind, however it was one thing [based on] single-use sealed units, which was an invention by Peter Todd. And I feel we applied that pretty properly with Mainstay.”
The primary distinction between Ocean and Liquid as a sidechain platform is Ocean’s use of a protocol designed at Commerceblock known 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 gadgets 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 property (RWA), this gives a singular historical past of possession that even the federation working the sidechain can not change. This removes ambiguity of possession throughout authorized disputes.
When requested in regards to the finally shuttering of the venture, Nicholas had this to say:
“I don’t know if we have been early, however we had a number of shoppers. Nevertheless it was, yeah, there wasn’t a lot adoption. I imply, Liquid wasn’t doing wonderful. And, you realize, being primarily based in London/Europe, at any time when we met shoppers to do POCs, we have been competing towards different well-funded initiatives.
It exhibits what number of years in the past they’d both obtained cash from folks like IBM or a number of the huge consultancies and have been selling Hyperledger. Or it was the times after we can be competing towards EOS and Tezos. So as a result of we have been like an organization that wanted cash to construct prototypes or construct sidechains, it form of made it very exhausting. 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 simple.
“[T]right here have been a number 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 consumer. However this rolled round Discreet Log Contracts. And one of many challenges of Discreet Log Contracts, they’re very capital inefficient. So we needed a technique to novate these contracts. And it simply so occurred that Ruben Sampson, you realize, wrote this type of white paper/Medium publish about statechains. And […] these two concepts, that form of solved probably that challenge round DLCs.”
Ultimately they didn’t wind up deploying a statechain answer for managing DLCs, however went in a special route.
Nicely, 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 form of need to do a number of rounds. So […] state chains felt good as a result of […] you mainly take a UTXO, you place it off the chain, after which you possibly can 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 instrument ecosystem, and Mercury Pockets was by no means in a position to efficiently take a chunk out of the market.
Somewhat than fully quit, 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 modifications have been made, he had this to say: “That may give us much more flexibility to do different issues in Bitcoin with L2s. You realize, the second you will have a blinded answer, we thought, properly, this might begin having interoperability with Lightning.”
Somewhat than constructing a consumer dealing with pockets this time, they constructed out a Software program Growth Equipment (SDK) that might be built-in with different wallets.
“{…] I assume with Mercury Layer, it was very a lot constructing a form of […] full-fledged Layer 2 that anybody might use. So we [built] it as an SDK. We did have a default pockets that individuals might run. However we have been hoping that different folks would combine it.”
The Finish of CommerceBlock
Ultimately, CommerceBlock shuttered its doorways after a few years of good engineering work. Nicholas and the remainder of the crew constructed quite a few methods and protocols that have been very properly 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 in the case of constructing methods for finish customers.
In case your work is just 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 properly from a regulatory perspective, performed into it. If I used to be dwelling in Dubai, possibly that might have been a special dialog. You realize, 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 house simply don’t have a lot consumer adoption.”
When requested why he thought folks 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 once you’re engaged on a venture that’s making an attempt to advertise Bitcoin within the international south, however everybody you meet within the international south desires stablecoins, you begin to marvel, properly, am I constructing the fitting instrument? Do folks even need to use this?”
On the finish of the day, probably 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 assume that’s a threat as a result of I feel if folks have been utilizing Bitcoin proper now and the mempool was costly, was jammed up and costs have been excessive, there’s sufficient vivid folks to construct good L2s. However they’re not being constructed as a result of there’s no demand. And, you realize, 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. We’ve a scarcity of customers and possibly down the road that’s an issue.”
“I feel there’s loads of good folks in Bitcoin that may construct attention-grabbing stuff, however I feel the main focus now needs to be customers.”
