The blockchain and distributed ledger space rumbled again. This time, a new initiative pushing the UTXO model for blockchains and ledgers has launched.
The alliance which is open to all UTXO-based ledger systems got us thinking about what this means a few years from now.
From Bitcoin to other UTXO ledgers, the UTXO model offers several advantages over the account-based ledger variants.
We reached out to Chris Georgen, the Founder and Chief Architect of Topl for more details.
Here is what he told us.
Chris Georgen Founder and Chief Architect at Topl
Please, can you tell us more about the UTXO Alliance?
The UTXO Alliance is a coalition of leading blockchain companies that are committed to driving forward the vision of the UTxO model for blockchains.
What are the key values that drive the alliance?
The alliance is really centered around the ideas of collective ideation and collaborative development.
We firmly believe that the blockchain ecosystem is, and will continue to be, far larger than any single blockchain provider can hope to address alone.
Why was the alliance formed?
The alliance was formed to promote and drive development, adoption, and standard setting for UTxO blockchains.
Collectively, the alliance is aiming to make UTxO blockchains more scalable, secure, and interoperable.
Please, can you tell us what you mean by the UTxO standard?
UTxO stands for “unspent transaction output.”
Essentially, this is a model for how information can be stored and organized on a blockchain ledger.
In a UTxO blockchain, each transaction output (like a payment or a shipment of goods) is stored independently, which can provide greater privacy and scalability than blockchains that use what is called an “account-based” ledger.
What makes UTxO be the “gold standard” for distributed ledgers?
Compared to account-based blockchains, which represent the other ledger model available for blockchains, UTxO-based blockchains provide greater privacy, increased scalability, and can even be used to make the entire blockchain space more interoperable.
How has Topl fared in 2021?
2021 has been a very busy year for Topl.
Two areas that we’ve been focused on since our founding, sustainability and supply chain transparency, have received greater and greater interest over the past 18 months.
The Covid-19 pandemic has put almost unparalleled pressure, and therefore unparalleled attention, on global supply chains.
As improved transparency and coordination have been identified as promising areas of focus to strengthen supply chain stability, blockchain has increasingly been viewed as a solution.
At the same time, we are become increasingly aware of the growing climate crisis, and new sustainability-focused markets are growing and looking for solutions like Topl’s blockchain technology to provide them the necessary infrastructure to operate openly and dynamically.
Aren’t you afraid of competition?
For a technology that’s barely a decade old, the blockchain space is already quite large and still growing quickly. It’s a very diverse space that no single provider will be able to adequately address.
We firmly believe that different blockchains will power different industries based on everyone’s needs and constraints. We’re excited to see a thousand flowers bloom.
What measures will be taken within the UTXO alliance to address monopoly concerns?
In our view, groups like the UTXO alliance are powerful tools to fight centralizing or monopolizing trends that might emerge.
Through groups like the UTXO Alliance, independent blockchains are able to have the benefits of standard settings and interoperability that can help negate the benefits of any sort of winner-take-all system.
What would your answer be to critics who think this alliance is for “relevance” purposes?
The work of the alliance already goes back months before this announcement was made.
The alliance is almost exclusively composed of the technical leaders of our respective projects, and we’ve been exploring areas of joint research and technical development since we got started.
We obviously want to share our excitement and see our alliance grow, but the value comes really from the collaboration and the conversations happening to advance the technology more than anything else.
What are the benefits for those who want to join the UTXO alliance?
We look at the alliance as a safe space for ideation and development.
For anyone who wants to contribute to the development of this style of blockchain network, we would encourage you to reach out.
We think we have some ideas to share with you, and we’re sure you have some to share with us.
How will the UTXO Alliance help drive cryptocurrency and allied technology adoption?
Interoperability and scalability are absolutely two of the biggest priorities that the blockchain space shares at the moment.
We hope that the UTXO Alliance can help unlock new ways of solving these challenges, thereby facilitating increased user adoption.
What does this mean for those who want to create their distributed ledger projects?
For those interested in creating UTXO-based blockchains or distributed ledger projects, we hope that the alliance can be a place to come to learn about best practices and the state-of-the-art-research that our members are sharing with one another and the broader community.
Is there a future where interoperability of ledgers is a problem of the past? How do you envision this will occur?
Today’s user problems are tomorrow’s engineering concerns.
I think interoperability will always be something that blockchain developers have to address, but given the progress that’s been made already in the past few years, I think we’re quickly approaching a time when these considerations are entirely opaque to users.
How will the UTXO Alliance interact with World Governments?
With as young as the blockchain space is, education continues to be a major item on the list of almost all of our industry organizations.
I don’t expect us to get into pitching particular solutions for projects, but instead to work with governments and others to understand their needs and help them understand the diverse offerings available to them.
What impact does the alliance hope to achieve with interactions with governments and regulators?
For any governments or regulators that might be interested in our work, we hope that we can provide them with the tools they need to understand the unique benefits of different blockchain solutions for projects or to gain an appreciation for the nuances that may result in different blockchain architectures requiring different forms of regulation.
Please, can you tell us about your journey into the distributed ledger and allied token space? What propelled you to make history?
My blockchain journey started back in 2012 when I was still at university and some friends introduced me to Bitcoin.
I spent the next few years playing around with mining and some (very) light smart contract development in the early days of Ethereum.
I think if you look back in the Github records, you can still probably find my launch day hotfix for getting Ethereum to run on the particular flavor of Linux I was running on my computer.
In 2015, I was involved with my first blockchain startup.
We worked to build out a payment network and loyalty program atop the Ethereum blockchain for food trucks, cafes, and local retailers and restaurants.
It was at this same time, however, that I started becoming interested in the quickly proliferating industry groups that were springing up to help standardize different aspects of blockchain interoperability or token structure.
In 2017, I helped found Topl, and from the beginning we’ve been closely aligned with the research direction taken by the other organizations we’re now associated with in this new alliance.
With Cardano and IOHK in particular we’ve been discussing topics like these on an informal basis for years, so when we were asked about helping form this alliance, it really was just an obvious next step.
Please, can you tell us more about Topl? What makes Topl stand out?
In my view, Topl stands out for our focus on inclusivity.
Every design decision we make is intended to make Topl as inclusive in as possible focus and function.
The applications and use cases supported by Topl are intended to make supply chains and financial markets more inclusive and equitable, and our blockchain itself is designed to be lightweight enough to run on hardware that’s affordable to almost anyone around the world.
Where do you think the space is going with all that’s happening at the moment? Can you give us a feel of the “beat” of the web3 space?
In my experience, most things in the blockchain space happen in waves.
You’ll have a small wave come first, followed months or years later by a much larger one. In 2016 and 2017 we had our first taste of DeFi (decentralized finance) and NFTs (non-fungible tokens).
In this first wave, Maker and CryptoKitties really defined each of these areas respectively.
Then, last year, 2020 was considered by many to be the “DeFi summer” with a massive influx of new users and projects into this area of blockchain.
More recently, NFTs have burst into the mainstream with household brand names and major sports leagues launching their own NFT marketplaces or projects.
Looking at this past, my best guess is that over the coming months we’re going to see a growing interest in what are called DAOs or “decentralized autonomous organizations.”
DAOs are what will allow blockchains to disrupt the idea of governance.
Some blockchain projects themselves are already experimenting with DAOs for their own governance, and I think we should watch to see this spread to other types of organizations.
Do you have any secrets you want to tell us? Care to spill the beans?
Right now, we’re really ramping up our focus on sustainability and exploring with partners how our technology can be used to help fight climate change.
I’m not allowed to discuss anything now, but definitely expect some Topl-related announcements to be dropping around the same time as COP26 in Glasgow.
Are there any other projects you are interested in?
It’s hard to be in this space as long as I have and not have a list of at least a few dozen other projects that you’re excited about.
Wolfram Research, the group behind Wolfram Alpha and Mathematica, is doing some very exciting work with oracles and analytics for the blockchain space.
In a different part of the space, I’m also very interested in Layer 2 scaling solutions that we’re seeing emerge and gain adoption.
Blockchain interoperability is a fascinating topic, so it’s quite exciting to see that being addressed now vertically as well as horizontally.