Zach LeBeau, CEO of SingularDTV
2017 was a time of epic growth in the cryptosphere. For SingularDTV (soon to go through a rebranding in Q1 of 2019), it was a time of great expansion. Most of our team came aboard during this expansion and many were brand new to blockchain and the cryptosphere. I sometimes take it for granted that everyone is aware of SingularDTV’s colorful history and the seemingly “world ending” market cycles we’ve experienced before.
For the uninitiated this roller coaster ride can be a scary thing, but it’s important to understand the cycles of the cryptosphere are just that — cycles — a never ending expansion and contraction, expansion and contraction, over and over again. SingularDTV has been through a few contractions and we’ve faced the possibilities of our mission ending before it began on more than once occasion.
Bitcoin’s Nuclear Winter, 2014–2016
When co-founder Kim Jackson and I opened our eyes to the power of decentralization in 2013, the cryptosphere was about to boom. To better understand where our inspiration came from, take a read of “An Ethereum Journey to Decentralize All Things: From the DAO to the CODE”.
From August to December of 2013, we watched bitcoin soar from under $100 to over $1,100. There were countless questionable and unregulated portals popping up to take your fiat in exchange for crypto. Mt. Gox was by far the industry leader and helped spread bitcoin across the globe, seemingly single-handedly fueling the boom of 2013. At one point they handled 70% of all bitcoin transactions. No one knew Mt. Gox was essentially some French guy — Mark Karpeles — sitting in a small office in Shibuya, Japan receiving hundreds of millions of dollars into his personal bank account while he dolled out bitcoin. What could go wrong? Needless to say, Mt. Gox failed spectacularly. It was reported that upwards of 750,000 bitcoin were lost, worth then around $475m (worth today about $3.8b). The disaster took the entire cryptosphere and bitcoin crashing with it.
A nuclear winter for bitcoin set in at the beginning of 2014 and lasted through 2016. For Kim and I, our goal to use blockchain to embed intellectual property into data vessels — now called tokens — was just beginning. Back in the spring of 2014 it was an extremely hostile time to embark on such a mission. Because of Mt. Gox, everyone was certain bitcoin was the scam they thought it to be. No one was talking about “blockchain” in mainstream media back then. The only ones talking blockchain were the core explorers of decentralization.
To make matters even more unstable, US authorities were sending people to prison in highly publicized trials — The Silk Road and Ross Ulbrecht, Charlie Shrem and BitInstant to name a few. I witnessed these events first hand in the court rooms of New York City, just a few blocks away from where I lived at the time.
It was clear to the outside world, that the crytposphere was a scam, a Ponzi scheme, a free-for-all for bad actors. Looking back on those times, if I were a bitcoin maximalist, surviving the bitcoin winter would have been extremely daunting. But for us, for our fledgling little SingularDTV enterprise, we never wavered from our belief that blockchain was the only solution for us.
I was introduced to Vitalik Buterin when he started circulating his ideas for Ethereum in late 2013. After unsuccessfully toiling to embed IP into data vessels on bitcoin and various other cloned or augmented protocols in 2014, it was apparent Ethereum was our only hope. After all, it was envisioned to apply the promises of blockchain to almost anything, not just digital currency. Had it not been for Ethereum the bitcoin nuclear winter would have been unbearable.
2014 was the year Kim and I met Joe Lubin. He was a one-man show working out of a shared office space in Times Square back then. Ethereum had just completed its crowdsale and raised $15m in bitcoin. As soon as Kim and I sat down with Joe, it was evident he was coming from a higher place. The way he spoke, the words he used, he exuded an enlightened and elaborate understanding of decentralization. His eyes had been opened long before mine, and I knew I had a lot to learn. We pitched him our idea and he said, “Let’s do it”. I left that meeting bewildered. After a year of constant negativity and hostility, we had finally found a collaborator, a partner.
The base Ethereum protocol was released about one year later in 2015. When ETH launched it was just pennies. Six months later in Q2 of 2016, it passed $20.
The DAO Disaster
At the start of 2016 a visionary and bold experiment launched called the DAO. The rising price of ETH was in great part due to the fervor created by the DAO. For those that don’t know your blockchain history, have a google session with the DAO and read all about it. Fascinating.
In short, a few intrepid technologists — Stephan Tual, Simon and Christoph Jentzsch — launched the first Decentralized Autonomous Organization (DAO), a first of its kind entity powered by the Ethereum blockchain. It’s mission was to raise ETH by selling DAO tokens and use that ETH to invest in projects that would help the Ethereum ecosystem grow. In return, buyers would benefit from the rise of value of the DAO token but also participate in a new type of governance system. DAO tokens allowed holders to vote on what projects to invest in. In theory, this new type of collective, hive mind corporate structure would give token holders a voice in deciding the DAO’s future. It was a fascinating use case that ended up shaping the course of Ethereum and blockchain.
The operators of the DAO figured they’d only raise a few million dollars of ETH. They had no idea or expectation they’d become an international sensation and bring in 11.5m ETH, 16% of the total ETH supply at that time, worth upwards of $150m. It wasn’t long after that technologists at ConsenSys and elsewhere begin to raise alarm bells as they discovered vulnerabilities in the DAO’s smart contract code and architecture.
After the previous failures of the cryptosphere up to that point, a failure of the DAO could lead to the end of Ethereum before it had a chance to begin. A failure could mean swift action from US regulators to finally put a stop to the wild-wild-west of the cryptosphere and all of its unregulated experimentation.
Up to this point in time of blockchain and the cryptopshere, there was never a “big win” in the eyes of the media and the world. It was all FUD, it was all scams. Everyone we knew in the entertainment industry thought we were crazy.
I remember the day at the ConsenSys office when the plan was hatched to write a paper warning the cryptosphere of the DAO’s vulnerabilities in hopes to rally the developers and community into action. The paper, “A Call For A Temporary Moratorium on the DAO”, was written by crypto entrepreneur Dino Mark, researcher with the Ethereum Foundation Vlad Zamfir and professor at Cornell Emin Gun Sirer. The paper was published and then…
It was a few weeks later when the DAO was finally hacked. Presumably the hacker used the published paper mentioned above as their blue-print for attack. I woke up that morning to the alarm bells of emails, text and calls. The hacker(s) were siphoning scores of millions of dollars of ETH from the DAO contracts. All hell broke loose. The ETH price and cryptosphere crashed. Chaos ensued. You should have seen the DAO slack. PTSD for all the community managers there.
Throughout this time, we — SingularDTV — were developing our smart contract system to power what was to become our SNGLS tokenized ecosystem. We had targeted June of 2016 as our launch date, but with the DAO debacle our launch plans faded. It felt like the end of SingularDTV before it ever begun. It was a frustrating time.
Time heals all wounds? The cryptosphere needed time to process the DAO disaster. We needed some distance from that event and concentrated on spreading our message of artist empowerment throughout the cryptosphere. What ensued was a necessary and laborious process to make sure our SNGLS smart contract system was impenetrable. We had the 3 best solidity developers on the planet at the time building them — Milad Mostavi, Joseph Chow and Stefan George. We went through internal audits, third party audits, exhaustive testnet procedures and several bug bounties. SingularDTV was the largest launch since the DAO and we needed to do it right. We couldn’t fail.
Breaking the Promise of Immutability
My entry level explanation of blockchain is simply, “A transparent, immutable, decentralized ledger. It’s transparent because everyone around the world has access to the same transaction history. It’s immutable because you can’t go back in time and change that transaction history. It’s decentralized because everyone in the world is invited to participate.”
The decentralized aspect is what most excited me. The fact that everyone in the world could take part, could benefit from these groundbreaking tenants, and in doing so level the playing field, find some way to “change what stops you”. Transparency was a concept completely foreign to the entertainment industry. It’s very utterance rattled the entire industry. We knew transparent accounting would shake things up. But the promise of immutability was about to be broken.
What the DAO debacle put into question was the immutability of the blockchain. You could role back Ethereum to before the DAO hack and essentially trigger the stolen funds to be returned to their source. But for that to happen the blockchain’s promise of immutability had to be broken.
A unique debate ensued, two sides formed, the purists and the practicalists. The practicalists were the majority, 95% by my estimation, and they won out, deciding to role back the chain and send the stolen funds back to their source. This gave birth to ETC, but that is another story. This decision saved Ethereum and perhaps blockchain as a whole, showing the power of the technology and the community to regulate itself in a way faster and better than the legacy system could. To know more, take a read of “Why The DAO Debacle Solidified My Faith in Ethereum”.
What it did for me, was show that perhaps there were no such thing as “absolutes” in blockchain. Over the years, I have watched ways in which the benefits of blockchain can be nullified, how its transparency and decentralized nature can be stripped away or obfuscated, for the sake of speed and “optimization”.
SingularDTV’s Launch and Another Setback
Finally though, we saw an opportunity to launch our SNGLS tokenized ecosystem. On Oct. 2, 2016, we launched and reached our goal in 15 minutes.
Soon after came another “world-ending” scenario. The market crashed again. ETH tanked, just as bad as when the DAO catastrophe happened. Again, faced with failure before we began.
Many at that time thought a nuclear winter was going to set in for Ethereum, similar to what happened with bitcoin for the past two years. It was thought the DAO broke all confidence in blockchain, and it wasn’t going to return. I was convinced otherwise. We believed in the tech, and thanks to Joe Lubin, Andrew Keys and many of the folks at ConsenSys, the right entities and people around the world took notice of Ethereum and became convinced as well. We knew it was just a matter of time before ETH — and the cryptosphere — were going to soar to new heights.
Five months later, at the end of February 2017, the rise started.
The Crypto Fortunes Have Already Been Made, It’s Over
I write this for all the newcomers who discovered blockchain and the cryptosphere during the 2017 run-up. Hopefully, this article can provide some context to the newcomers and give them the understanding that the crash in price occurring now is just a natural, normal cycle of blockchain, a natural cycle of creation actually. Expansion, contraction, expansion, contraction, over and over again. My overall point is that we’ve been here before, several times. We’ve encountered much more dangerous territory, facing what could have been the end of blockchain before it began.
The money has already been made. The 1000x fortunes have happened already. We’re not going to see that again. Now, it’s all about the technology.
The most recent “crypto-crash” is not something to fear, it is something to embrace. It is evident now more than ever that blockchain is here to stay. For SingularDTV (soon to go through a rebranding in Q1 of 2019), each and every one of these contractions has led to making us stronger, more focused, more specific about how to deliver our mission of decentralizing the entertainment industry.
When I visit the various reddit threads and other social media portals of the cryptosphere now, it reminds me of how things felt in 2016. More discussion about the tech. Less of a presence from the rabid speculators that hi-jacked the narrative for the last year and a half.
Now is the perfect time to re-establish the narrative of decentralization. It’s the perfect time to rally the believers of Ethereum to all the exciting things coming in 2019. We — SingularDTV — have several great things coming in 2019 and we look forward to sharing them with the world. For us, during these times of “uncertainty”, we are certain, and keep on doing what we’ve always done, drown out the hype, and work on delivering our platform.
ETHEREUM, Now More Than Ever
It’s no secret I’m an Ethereum maximalist. I am because of my history with blockchain and the context in which I’ve participated in it. Blockchain is for the people, and the pursuit of a public blockchain is the only noble goal.
The ethos of private chains is centralist in nature. I’m calling all protocols that sacrifice decentralization for optimization and speed as private chains. These short term optimizations are just that, short term, and will become obsolete in the years to come as the work on scaling evolves.
It is this type of research and development on scaling that is the rung in the tech ladder that will take human beings into the next great era of “technological revolution”. Any other work other than scaling and the satellites that orbit its gravity is secondary. This is why many of the private chains are accused of being more hype and cult of personality, they rely on delivering the short term gratification of what blockchain can provide now, but in doing so they lead to a different dev ladder that will result in the same potential vertical misuse of power that exists with megastructures now. ConsenSys did an interesting analysis on centralized blockchain constructs and published the following paper, “EOS: An Architectural, Performance, and Economic Analysis”.
Private chains lead only to a blockchain dev ladder for the company and conglomerate. Protocols can be dressed up and called blockchain, and then be manipulated with centralized back-end architecture where the power still remains in the hands of the very few.
Hey, I get it, centralization makes those at the top, running the show, building something, feel a bit more safe and secure. I feel the same way at times being a CEO of a company. But we are all products of our environment, and our environment up to this point has been that of centralization. That is changing.
Bitcoin has given people a store of value that is the instigator for the cryotosphere. The first, the most battle tested, it has given people an excuse to get into blockchain for investment purposes, for the FOMO of making money, but Ethereum gives people something to believe in, a future of decentralization, a world that is not controlled by the few over the many, a world of unity and inclusion.
Zach LeBeau, CEO of SingularDTV