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 growing buying and selling and derivatives platforms. After the 2008 monetary disaster he started to contemplate alternate options to the legacy monetary system within the fallout.
Like many from that point, he utterly ignored the unique Slashdot article that includes the Bitcoin whitepaper as a result of obvious give attention to Home windows as an utility platform (Nicholas was a UNIX/Linux developer). Fortunately somebody he knew launched him to Bitcoin afterward.
The factor that captured his curiosity about Bitcoin somewhat than different alternate options on the time was its particular structure as a distributed pc community.
“The truth that it was like an alternate manner. It was all based mostly round [a] sort of […] community. And what I imply by that, constructing monetary programs, folks at all times wished 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, nevertheless it by no means had been carried out, you realize, in a sort of […] scalable resolution. And utilizing […] cryptography and proof of labor to unravel that subject 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 elements 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 incontrovertible fact that copies of them have been redundantly distributed globally.
“The fact that in Bitcoin you had everyone kind of doing this proof of work game, which is what it is. And whoever wins does the [database] write. That mess[ed] with my head. That was […] very unique.”
Starting To Construct
Nicholas’s path to constructing within the house was an natural one. On the time he was residing 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 surroundings 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 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 an excellent participates in producing the deal with the service provider offers. That is carried out 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 patron, who makes use of the hash of that description of the merchandise or service to generate a person deal with utilizing the hash and grasp public key.
This enables 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 get together to generate the deal with 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 strategy to enterprise as Blockstream, constructing technological platforms to facilitate using Bitcoin and blockchains generally in commerce and finance. Shortly afterwards Nicholas met Tom Trevethan who got here on board.
“I met Tom via, yeah, a mutual friend, happy to say who it is. There’s a guy called, who, new people probably don’t know who he is, but OGs do, John Matonis. John Matonis was a good friend of mine, [I’d] known him for a while. He introduced me to Tom, who was, you know, kind of more on the cryptography side. And it kind 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 based mostly on. The businesses CoinShares and Blockchain in partnership with others launched an Ocean based mostly sidechain in 2019 to subject DGLD, a gold backed digital token.
“So we, you know, we were working on forks of Elements, doing bespoke sidechains. […] Tom had some ideas around cryptography. And I think one of our first ideas was about how to bolt on these forks of Elements onto […] the Bitcoin main chain. […] We thought the cleanest way to do that was […] using some sort of, I can’t remember, but it was something [based on] single-use sealed sets, which was an invention by Peter Todd. And I think we implemented that fairly well 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 enables 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 offers 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 couple of purchasers. Nevertheless it was, yeah, there wasn’t a lot adoption. I imply, Liquid wasn’t doing wonderful. And, you realize, being based mostly in London/Europe, every time we met purchasers to do POCs, we have been competing towards different well-funded initiatives.
It reveals what number of years in the past they’d both obtained cash from folks like IBM or a few of the massive 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 sort of made it very laborious. 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]here were a few things happening at the same time that led to it. So the two things were we were involved in a [proof of concept], a very small […]POC for like a potential client. But this rolled around Discreet Log Contracts. And one of the challenges of Discreet Log Contracts, they’re very capital inefficient. So we wanted a way to novate those contracts. And it just so happened that Ruben Sampson, you know, wrote this kind of white paper/Medium post about statechains. And […] those two ideas, that kind of solved potentially that issue around DLCs.”
Ultimately they didn’t wind up deploying a statechain resolution for managing DLCs, however went in a unique course.
Effectively, there was one other factor taking place on the similar time, coinswaps. And, yeah, keep in mind, in these days, everybody fearful that by […] 2024/2025 […] community charges might be fairly excessive. And to do […] coin swaps, you sort of need to do a number of rounds. So […] state chains felt good as a result of […] you mainly take a UTXO, you set 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 software ecosystem, and Mercury Pockets was by no means capable of efficiently take a chew out of the market.
Fairly than utterly quit, they went again to the drafting board to construct a statechain variant utilizing Schnorr with the coordinator server blind signing, that means it couldn’t see what it was signing. When requested why these modifications have been made, he had this to say: “That would give us a lot more flexibility to do other things in Bitcoin with L2s. You know, the moment you have a blinded solution, we thought, well, this could start having interoperability with Lightning.”
Fairly than constructing a consumer going through pockets this time, they constructed out a Software program Improvement Equipment (SDK) that might be built-in with different wallets.
“{…] I guess with Mercury Layer, it was very much building a kind of […] full-fledged Layer 2 that anyone could use. So we [built] it as an SDK. We did have a default wallet that people could run. But we were hoping that other people would integrate it.”
The Finish of CommerceBlock
Ultimately, CommerceBlock shuttered its doorways after a few years of sensible engineering work. Nicholas and the remainder of the staff constructed quite a few programs 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 an excellent factor in relation to constructing programs 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 in the UK, which is not doing that well from a regulatory point of view, played into it. If I was living in Dubai, maybe that would have been a different conversation. You know, back when we made that decision…things weren’t great in the US. I think things have improved there. But also, I think…Bitcoin is in a good place financially. I think it’s clearly being used as a product. But I think the L2s in the space just don’t have much user adoption.”
When requested why he thought folks weren’t utilizing Layer 2s at scale, he had this to say: “…in my adventures of working on CivKit (a decentralized marketplace), one of the questions that was always posed to me is, when Tether, when stablecoins? So when you’re working on a project that’s trying to promote Bitcoin in the global south, but everyone you meet in the global south wants stablecoins, you start to wonder, well, am I building the right tool? Do people even want 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 has been a shift in the last four years for it to be a store of wealth. And I do think that’s a risk because I think if people were using Bitcoin right now and the mempool was expensive, was jammed up and fees were high, there’s enough bright people to build good L2s. But they’re not being built because there’s no demand. And, you know, no one wants to build software, whether that’s open source or commercially, when it’s just a bunch of hobbyists using it. And I think that’s one of the challenges of Bitcoin right now. We have a lack of users and maybe down the line that’s a problem.”
“I think there’s a lot of smart people in Bitcoin that can build interesting stuff, but I think the focus now has to be users.”
