Earlier this month I did a write-up on the fascinating new technology behind Streamr. Streamr will be a blockchain-based decentralized platform and marketplace to buy and sell live data. For a brief explanation of how it works, I highly recommend you watch Streamr Explained in 2 Minutes.
Streamr has also announced a groundbreaking cooperation with the incredibly popular and exciting Golem project, which aims to be a decentralized and blockchain-based cloud computing platform. Golem is currently trading with an ERC20 token with symbol GNT.
I asked the man behind Streamr, Henri Pihkala, if he would be so kind as to do an interview with us at Daily Cryptocurrency, and he graciously obliged us. Henri was also kind enough to share some of his thoughts on the Golem project and the team behind it. Henri also gives us some exclusive, first available information on the currency behind Streamr, DATAcoin, and how it will become available.
Before we get started I would just like to thank you, Henri, for putting aside some time to do this interview for us. I did a profile on Streamr not long ago, and since then I have been really amazed at the possibilities for what this technology could do in the near future. Could you tell us a bit about what inspired you to develop this technology? Where did the idea behind it originally come from?
Me and the founding team have a background in algorithmic trading: I’ve been working with real-time data, related infrastructure, and models for 10 years. In trading, it’s quite obvious how the newest data can present opportunities and value, and especially how that value can vanish over time – sometimes in milliseconds. You cannot trade on stale data: it’s like trying to drive a car by looking in the rear-view mirror. Instead, you need to react to things which you can perceive right now.
We originally developed this kind of data infrastructure and tools for ourselves to be used internally for trading. Fast forward a few years, and everyone starts talking about IoT and the massive explosion of real-time data originating from the millions and millions of sensors and smart devices deployed all over the world. We realized that usage patterns common in finance would emerge in other business verticals: real-time data would carry value and enable use cases like preventive maintenance, pay-by-use, prediction markets, better ad placement, machine-to-machine messaging, autonomous vehicles, and so on.
We started building scalable cloud infrastructure that could handle billions of data points per second, and visual programming-based tooling to go with it to enable users to easily build logic on top of raw data. Again, fast forward a few years, and blockchains started to lead the way towards decentralized architecture, peer-to-peer value transfers, and the tokenization of value. We saw the light: this is what the future must be like! The value in the newest data will become tokenized, and its delivery will become decentralized. This is where we want to take our technology and by doing so enable a broad range of decentralized real-time applications not possible otherwise.
Could you give us an estimate on how far along the project is towards completion and release? Are there any major technical or business hurdles that you still need to pass?
What sets us apart from most other projects in the space is that we already have a working product and existing customers ranging from startups to enterprises. Although our current infrastructure is centralized, we can offer the blockchain community tools that work from day one, such as the Ethereum integrations we’ve been building into our Engine, which enable users to seamlessly combine powerful off-chain analytics with on-chain smart contracts.
We’re currently working towards a token launch to fund the roadmap which will lead to the tokenized and decentralized real-time data vision we are pitching. This is an ambitious decentralized infrastructure project in uncharted territory, and will likely take 3-5 years to complete. Over this time the platform will iteratively improve and become decentralized layer by layer. So in one dimension, we are in square one, a startup with an idea looking for funding; and on another, we can already offer a product which supports real-life use cases.
Some projects are raising money for black boxes: millions go in, years pass, nothing comes out. We want to always have something that’s up and running and useful, even if it means a degree of centralization in the beginning.
This is just my opinion, but I suspect that in order a technology to take off, it needs to have a killer app. What do you think might be Streamr’s killer app?
I agree, and actually, for the whole decentralized/blockchain ecosystem it is crucial to get killer applications before too long. It’s hard to predict which exact end-user application will be a breakthrough. I think the best bet is to try and contribute to exponentiality instead of linearity: By creating tools, infrastructures, and middlewares which enable and accelerate the development of better and more capable applications, the probability of a killer application eventually emerging will become closer and closer to 1.
That said, I do think the data marketplace we are building will be a killer application in itself, even though it would most commonly be used to help create other applications. All the (widely useful) data streams in the world in one place! From finance and weather to social media and smart cities.
Killer apps aside, what potential function or ability do you personally find the most exciting, or perhaps with the biggest potential impact?
Personally, I’m most fascinated by the idea of machine-to-machine data refinement chains. For example, a sensor could produce measurements, and then an algorithm such as a neural network could ingest that data to generate predictions. If the algorithm is good at what it does, it can sell those predictions on the network at a premium. Another algorithm could buy those predictions and add value by, for example, combining the data with some other data, and so on. An economy of value-adding data processing chains can emerge.
In my article, I made a few suggestions for how Streamr might be used. For example, individuals could operate air quality monitors, families could sell the data collected by their smart fridge. I, of course, don’t work for Streamr, but do you think these kinds of ideas are within the scope of Streamr?
Short answer is YES. Not just within scope, but possibly even at our very core. I could sell my location to advertisers. Enterprises could share or sell currently siloed data to their investors, partners, or even competitors (yes, it can make sense if the price is right!).
It should be noted that while the buying and selling of data streams is a prominent business case, a decentralized application developer might simply use Streamr for its technical features: to carry an application’s real-time state to a web UI, for example. No buying or selling of data there, but instead just using the infrastructure for data transport.
I have a few questions about the crypto currency associated with Streamr – DATAcoin. If everything goes exactly according to your long term plan, what do you personally envision a single DATAcoin being worth once the network is mature? Do you plan on it being an extremely abundant and cheap currency like Ripple (XRP), or more reserved supply and of moderately high value like Litecoin?
The price of a single whole token depends on how many there are in existence, and how the project is valued by the community (market cap). Ripple’s market cap is $6B vs. Litecoin at $2.4B.
There will be a maximum of 1 billion DATAcoin in existence. In terms of supply, this will place DATAcoin between the two tokens mentioned (Ripple 100B vs Litecoin 84M). In terms of market cap – who knows, you decide! What is the combined value of all the real-time data streams in the world? ?
For a data stream that may have thousands of data items in a day, how would the value of each individual item of the stream be determined? Is this set by the seller, or the network, or the Streamr group? What about a data source that only has one or two items per day but they are very significant or valuable?
The base scenario is that the seller will set the price for her data. I would expect most data streams to have time-based pricing (e.g. pay for a subscription by month/day/hour). This works equally well for high-volume streams and streams with only a few events per day or less.
Data licenses are smart contracts, so they can have quite flexible mechanics. As an alternative to fixed pricing set by the seller, various kinds of auction mechanics might emerge to automatically discover a suitable market price for the data.
How many DATAcoins will there be in total? Will the amount be limited, or unlimited? How will they be distributed at the beginning of operations?
Disclaimer: These are still working figures, but I think they will stick, so I might as well share them.
There will be a maximum of 1 billion DATA. They will be highly divisible (18 decimals) to support very small payments regardless of unit price. In the token launch:
- 65% will be available to supporters of the project
- 15% is retained by Streamr Network AG, the company responsible for executing the project
- 15% will be allocated to individuals in the team and locked down for at least a year
- 3% is reserved for ecosystem partners and advisors
- 2% will be used for developing the community (early adopter rewards, airdrop, etc.)
How will DATAcoins be made? I understand that Streamr doesn’t have mining in the same way that Bitcoin does, so by what process are they created?
They are all created in the token launch. The supply will circulate using a network usage fee/node reward mechanism. This is somewhat comparable to mining but doesn’t involve a superficial computational problem. Instead, it involves network bandwidth and correct and timely delivery of data.
Earlier I had asked you what are some ways that people can earn DATAcoin, and you had mentioned operating a network node that processes transactions could help earn the owner some DATAcoin. Would this be similar to how a master node works on a network like Dash? Is there any proof of stake involved? Would the operator of a node need to have a certain amount of DATAcoin in order to participate? What kind of hardware would be necessary to operate such a node?
Yes – in simplified terms, nodes contribute bandwidth (and storage) to the network and are rewarded in DATAcoin. The rewards come from those using the network’s services, namely the publishers and subscribers. To operate a node, a stable and reasonably fast network connection is expected, but nothing out of the ordinary (like ASICs to mine Bitcoin!) is required.
There is a node reputation system at play in the network. The data traffic in the network is partitioned (sharded) for scalability, and reputable nodes are assigned shared responsibility for a subset of all the traffic in the network. The purpose of the reputation system is to assign more responsibility to stable and well-functioning nodes and to prevent attackers from gaining control over subsets of the data flow.
How do you envision people using DATAcoin in the future? Do you want to steer people towards using it directly as a currency to buy things, or just as something you exchange for Bitcoin or another crypto asset? Do you think it will be difficult for a lay person to understand how to use DATAcoin?
Personally, I think the usage of various appcoins should become invisible to end users. Especially when applications start combining different network services (for example, a future application might use Ethereum, Golem, and Streamr, needing ETH, GNT, and DATA), managing sufficient balances for each token manually will become impossible.
It’s like, you go to a restaurant. To get a seat you need TableCoin and ChairCoin. Fancy restaurants also require TableClothCoin. To order, make sure you have MenuCoin and WaiterCoin. I recommend spending VegetarianCoin instead of MeatCoin. To eat, you need ForkCoin, KnifeCoin, SpoonCoin, or ChopstickCoin depending on what you order.
NO! The future cannot be like this. I believe smart wallets and ShapeShift-like ideas will solve this problem as soon as it becomes a problem (or a bit after…), and the end user doesn’t need to worry about it. They just use the app, and the wallet takes care of the rest.
The Golem project recently released an update video in which we can see you meeting with them. The Golem project has attracted a ton of attention and excitement lately, but they have had a lot of trouble meeting release targets. Of course without sharing any confidential information, what is your opinion of the Golem team and of the status of their project? Do you think we will see Golem Brass this year?
Most projects in the space are creating cutting-edge technology by working deep in uncharted territory, meaning that any given timelines are wild guesses at best. Somewhat of a new normal is to go with “it’s ready when it’s ready,” which is always true but unfortunately carries little information.
The Golem folks are some of the smartest, most hard-working and responsible people I’ve met in this space. I don’t think anyone could have done a better job really.
I’m very excited about their progress and I don’t care at all when exactly Brass will be out. Like any serious project, they (and Streamr) are here for the long term.
We’re collaborating with them to research common problem space and find synergies in each other’s technologies. The common goals are set a few years into the future. I believe the cooperation of projects is key in creating an ecosystem in which those highly awaited killer applications can emerge.
Before this interview, and before I did my research on Streamr, you and I had a brief chat in the official Streamr Slack channel. One of the questions I asked you was about the need for a person operating a node to supply Ether (ETH) in order to facilitate transactions. I wrote in my article that I was concerned that the requirement for Ether may dissuade potentially interested people from joining Streamr. What does your team plan to do in order to encourage or help new people join the network in spite of this requirement? What if a complete lay person wanted to join the network, would they just be out of luck if they can’t figure out how to buy and move Ether around?
Well, it’s important to understand that not everyone needs to run a Streamr node, just like you don’t need to mine Bitcoin to use Bitcoin. Enough people will go through the trouble of setting up a node if they can earn by doing so.
The amount of traffic on the network correlates with available rewards, balancing the number of nodes: If there are few nodes but a lot of traffic, higher rewards per node are available, and more nodes are bound to appear. If there are too many nodes or low traffic, rewards will be less, and some nodes will quit.
Here’s another thought on the bigger picture: for Ethereum or any other blockchain ecosystem to attract lay people, exchanging and transferring value should be trivial. As I outlined above in the “token restaurant” example, the development of wallets and exchange services may help. The technology should become effortless and invisible in the long run.
Hypothetical question, let’s say that the entire Ethereum network goes bust, or it becomes so prohibitively expensive to use that Streamr participants are losing money operating nodes – what would Streamr do in order to keep operating? Would you perhaps try to run your own completely independent block chain, or would you switch to another DApp service like Lisk?
Sure! Decentralization cannot happen unless running a node is beneficial to its operator. We’re using Ethereum because it’s available today, familiar to us, and there’s a lot of promise for the future. Streamr is blockchain agnostic, which means we can run alongside other platforms as well. Perhaps the same Streamr Network will run simultaneously over heterogeneous blockchains, enabling Dapps on different platforms to receive and produce real-time data.
Last question, do you think that the world will be ready for Streamr when you launch? I like to think of myself as a technologically literate person, and even I had a hard time wrapping my head around what it was exactly that your service is supposed to do. How will you convince individuals and organizations to join up into something that is almost entirely unheard of in the tech world?
Real-time data and analytics are established markets in the centralized world, while decentralization and tokenization of real-time data are unheard of. We’ll need to build the bridges that make most business sense.
Even conservative organizations understand cost savings: Hey, instead of building complicated real-time APIs yourself and worrying about uptime, scalability, and DDoS attacks, why not just publish on the Streamr network?
Even conservative organizations understand new business opportunities: Hey, instead of keeping your data to yourself and using it for nothing, why not find out if it has value to someone else?
We don’t plan to build tech in a cave for years and then do a big bang launch and see if the world is ready or not. We’ll decentralize our technology iteratively and partner with data producers and device manufacturers as we go, adding content and new integrations over time. We might also license popular data such as financial, weather, and social media data and resell it on our own platform. (There’s actually a perfectly valid business model right there. Our aim is not to just sit on a stash of tokens hoping for their value to surge. Instead, we want to be proactive and work on integrations which will contribute to the growth of the ecosystem and offer real value to our users.)
Amazon started with books and now they’re selling everything and 3rd parties sell on their platform as well. Streamr will do the same and aim to be the go-to ecosystem for trustable real-time data, tools, and data monetization opportunities. Decentralization and blockchains are under-the-hood technologies which make Streamr “just work.” Amazon does not work without Amazon, but thanks to these technologies the Streamr Network will work even without us! ?
I’d like to once again say thank you to Henri Pihkala of Streamr for sharing his insights on his exciting new project, and we look forward to hearing more from him, his team, and the Golem project in the near future.