Why I Turned Down an Interview with Google

Around the time I was graduating from Utah State University I went on a massive job hunt.  The aim of this massive job hunt was more to garner interviewing chops, as well as to experience as many different companies and their interview process as I could.  During that time I got offers from a bunch of great companies and got to visit many different corporate campuses all over the United States.


The obvious front runner for every computer science major is Google.  To many of us Google represents the pinnacle of computer science.  They pay really well, they have a great company culture, they’re illustrious, they’ve got great brand recognition for non-technical people, and the interview is well known as one of the most difficult. They also have the 20% rule (that doesn’t actually exist), which peaked my interest above all else.

My thought was, I’ll prepare for an interview with Google, and if I don’t manage to land an interview or get an offer, hopefully those skills will be transferable to other interviews at other companies.  As luck would have it, I did manage to interview at Google, and, as luck would have it, I also managed to not receive an offer.  However, I did receive offers from every other company that I interviewed with.


One of the most intriguing processes I went through was at Amazon.  In fact, I didn’t even have an on-site interview.  The interview process for college graduates at Amazon at the time involved an online pre-screen (nearly every other company also has this, including Google).  After this, you’re given a proctored online behavioral assessment, immediately followed by a coding assessment, which is also proctored.  At the time, I thought this proctored assessment was taking the place of a phone screen and would ultimately lead to an on-site interview.  I took it, and did relatively well.  I knew I did well because before the interview process I searched for what the assessment generally involved and found there were a certain number of coding questions.  I finished these and had time to spare, so I clicked complete, thinking “great, I’ll get called for an on-site”, instead yet another coding problem came up, this one more difficult that the previous ones.  I couldn’t quite get all of the tests to pass and eventually ran out of time.  After a few weeks I got an email from an Amazon recruiter saying something along the lines of “we’d like to move forward” and nothing else.  Again, I was thinking “great, I’ll get an on-site at Amazon”.  A few more weeks pass, and I’m directly sent an offer letter via email.

IBM Watson

Contrast this to how IBM handled the offer process.  I did a similar online coding assessment, which I had to do in a language I wasn’t terribly familiar with (the choices were Python and Java).  I then had a phone screen which went extremely well.  Rather than moving forward with an on-site or directly to an offer I was sent an invitation to some bizarre hiring event in Atlanta.  Mind you, I was still a student at USU and the event was scheduled near to midterms or finals (I don’t remember which).  I was also trying to prepare for interviews at this time, so I was spending all of my time on weekends and after work/school working through algorithm questions.  It felt like a waste of resources, especially considering after searching for what the hiring event entailed I found out that everyone would receive an offer from IBM regardless of how they performed at the event.  For these reasons I tried to get out of going, but was told that if I didn’t attend I wouldn’t be given an offer.

The event was very odd to me.  At one point during the event we were sent into a conference room and given some kind of propaganda type film (I will say, it was very well made) about how IBM has been around since the beginning of computing.  I also received a text from “Watson” during my flight back, informing me that I’d be receiving my formal offer soon.

It all seemed a bit unnecessary and wasteful.  One thing that really intrigued me about Amazon was there was no frills and no bullshit.  I met their hiring bar, and they sent me an offer, the end.

Why I Turned Down an Interview with Google

Fast forward 8 months.  I’ve been with Amazon as an SDE since graduating.  During this time I’ve been contacted by all manner of recruiters, CEOs, start ups, block chain enthusiasts, and competing companies trying to marshal skilled developers behind their cause.  Recently a Google recruiter has reached out to me about interviewing again at Google. I’ve elected to pass on the opportunity.  Here’s why.

The Hiring Bar

The hiring bar at these companies is a bit absurd if you ask me.  I’ve often heard the argument for this absurdity is “it’s the best indicator we have” or “how else will they assess candidates?” I don’t have the solution to this problem, but I do know I’m not going to validate it as an engineer.  I did previously in order to make up my mind for myself using actual experience and I know which side of the fence I sit.

There are a massive amount of things that go into being a good engineer, let alone being a good employee.  I would say coding maybe makes up 40% of this, and I would say algorithmic skill accounts for maybe 5% of this 40%.  I would also say that assessing for this 5% is largely random luck.  Yet for some reason, this 5% of the 40% is what’s most carefully assessed during the interview process.

My time is better spent on things like building businesses, teaching others, and investigating technology that I find interesting rather than preparing for irrelevant algorithm puzzles.  Don’t get me wrong, I’m glad I did it a year ago, but I don’t want to do that now.

The Culture

As I stated in the opening paragraph, the phrase “they have a good culture” is often heard in the tech industry when talking about Google.  However, I feel that’s a marketing ploy that’s worked out quite nicely for Google (see the non-existent 20% rule that lured me in).  With recent controversy like the James Damore lawsuit, or the $2.7 billion EU fine, to even just a few weeks ago this article written by a (now) ex-Google engineer.

What intrigued me the most about Amazon was there was no illusion.  This is business and you are an employee that will be leveraged in creating new businesses for Amazon.  For many this may be a bad thing, but for me, that’s just fine.  Google is no different.

My Interests

Since my days as a musician I’ve never made decisions strictly for money.  I took the job at Amazon because I wanted to see how a large scale tech company functions internally.  I wanted to learn how to write large scale software using industry best practices.  I wanted to grow as a leader, a coder and an engineer.  If I’m going to leave my position at Amazon it’s going to be for a position I feel passionate about, not more money.  I’m not convinced that Google is going to give me that.  Sure they’ll say “pick any team you’re interested in” (and that’s assuming I’m some tech rock star, which I’m not) or whatever other lip service is given to new hires.  But, one of the things I learned interviewing at so many different places is, you rarely get to pick anything and recruiters will tell you a lot of stuff in the initial phone call to get you excited about the company and the position.

My Current Position

I really like my current manager.  This is her first role as a manager.  This is my first role at a large tech company.  I feel like her and I are learning the ropes together.  Up to now she’s doing a great job, and she herself has a very good manager who I can tell is mentoring her very well.  Together they’ve created a culture of high quality work without sacrificing the work life balance of the engineers.

I also like my teammates.  To put it bluntly, there aren’t any assholes.  Everyone is ready and willing to step in and help when a helping hand is necessary.  For the most part no one is overly critical of one another and the senior engineers on the team are always happy to share wisdom.

I’m sure this same scenario could easily play out at Google as well, but, why put myself through months of mind numbing algorithm puzzles, and set my side projects on hold, for a chance to roll the dice on a new team at a new company for slightly more money?




The Dfinity Consensus White Paper

Dfinity released their first of what they claim to be many white papers last week.  This particular white paper was centred around the consensus protocol.  If Dfinity is in fact planning to release many white papers it makes sense that they would release the consensus white paper first, as the consensus layer is the foundation for any other innovations that will come from the larger Dfinity tech stack.  The core of Dfinity’s biggest consensus innovation is the threshold relay, which uses BLS cryptography, and is encased in this consensus white paper.  This post is intended to be a very broad overview of the consensus white paper. However, I intend to do a follow up post detailing BLS cryptography and threshold signatures, the main drivers of innovation in this white paper.

Verifiable Random Function

Let’s begin with the Verifiable Random Function (VRF), as this is the smallest building block of the Dfinity protocol.  A VRF is very simply, a pseudo-random function that provides publicly verifiable proofs of its outputs’ correctness.  If we recall from my previous post “The Blockchain from a Git Perspective” I point out that from a git perspective, consensus is simply randomizing the selection of the maintainer of the “repo”, where the repo is the block chain.  I then make the claim that proof of work mining is simply a method for distributing the amount of time a node on the network is allowed to be the maintainer of the repo.  But this begs the question hundreds of engineers have asked since Bitcoin: what if, rather than competing to act as the maintainer of the repo by burning electricity to secure the block chain, there was some other method of randomly selecting the maintainer of the repo?  Enter the VRF.

What if there was a way to randomly select a maintainer of the repo without relying on a proof of work competition?  Lets say every block included in it the name of the maintainer of the next block, but no one could guess which name would be chosen, not even the current maintainer, until the block was created.  At a very basic level, this is what the VRF enables.  However, rather than the name of a maintainer randomly being selected, the VRF is used to randomly select a group which can then be used to randomly select the group after that, and so on.

A broad overview of the Dfinity block chain.  Here the VRFs are the little red rectangles “Rand i – 1”, “Rand i”, “Rand i + 1”, etc.  The outputs of the VRF aid in randomly selecting each group, “Group i”, “Group i + 1”, “Group i + 2”, etc.

If we can devise a method for a de-centrally agreed upon VRF, it should be relatively easy to randomly select a miner without the need for proof of work.  The VRF is triggered every block to produce a new output using BLS cryptography in the Dfinity protocol.  This per block VRF is dubbed the random beacon and has various use cases in the Dfinity block chain.

Threshold Relay

This hypothetical decentralized VRF is all well and good, but how is it achieved in practice?  Recall, it must be trustless the same way proof of work is.  This is where Dfinity has made a major breakthrough.  They’re using BLS rather than RSA or ECDSA, due to the fact that has a unique* threshold version as well as a distributed key generation for this unique threshold version.  This allows for a signature to be valid if a threshold of private keys signing the message is reached.

A brief example.  Let’s say 100 nodes are randomly selected to partake in the generation of the next random beacon value, and the threshold has been set to 51.  This means that after 51 of the 100 randomly selected nodes have signed the message, the system will generate the next random beacon value for the entire network.

A screen shot of selected nodes in the Dfinity network.  For our example, green nodes are the nodes selected by the previous random beacon to sign the current random beacon, and there are 100 of them.  The grey nodes are all nodes in the Dfinity network.  Of the 100 green nodes, 51 would have to sign the message to propagate the next random beacon value to the rest of the network.

What’s amazing about this process is, it doesn’t matter which 51 of the 100 nodes sign the message, it will always produce the same random output, and this random output can always be verified of correctness.  The random beacon output generated in our toy example is then used by the system to randomly select the next 100 nodes to generate the next random beacon value, ad infinitum.  This is called the Threshold Relay.

Now that we have a trustless agreed upon method for generating randomness in the block chain, it’s a simple matter of using this random value to do various things on the block chain, such as selecting block makers, or a random subset of nodes for the random beacon generation of the next round (the 100 randomly selected nodes in our example).

Hate to use this again, but, it illustrates exactly what the random beacon is/can used for.  It ties together both the block chain and the threshold relay chain, which is why I focused so heavily on it in this post.  However, a decentrally agreed upon source of verifiable randomness could be used for a whole host of things.

So what?

But why does this matter? So we have a different way of selecting a “maintainer” of our repo, who cares?  Well firstly, this is much more computationally, and therefore economically, efficient than proof of work.  We’ve all heard the stories of Bitcoin mining using more power than Ireland.  Message signing is a constant time operation, while proof of work is anything but constant.  There are also claims of empty blocks being mined in the Ethereum block chain in order for the miner to get the block out in time and receive the block reward.

The threshold relay also allows for faster block speeds, as block time is simply a system parameter to be tweaked, rather than dependent on peculiarities of the crypto economics of proof of work (see the BCH “emergency” difficulty adjustment).

Perhaps most importantly, however, Dfinity has devised a way to achieve near instant finality using what they call notarizations.  This is unheard of in block chain.  Even if Ethereum manages to roll out proof of stake, it will still be hampered by lengthy finality times due to the fact that an adversary could theoretically hide a mined longer chain (this is why you have to wait for X transactions to be confirmed before your balance shows up in exchanges by the way).  In Dfinity, this is not possible.


Note that this is an extremely simplistic view of the Dfinity protocol (I’ve left things like block notarization out).  But I didn’t want to inundate readers with complex explanations and math proofs.  I understand, however, that Dfinity must go through this pedantry in a white paper, particularly to defend the block speeds they’re claiming to achieve.

Given how important BLS and threshold signatures are to this protocol, I intend to add a second post teasing apart this cryptography in more detail, not only for my own benefit, but also my readers.  Until then!



*Dfinity defines uniqueness in the whitepaper as: A signature scheme is called unique if for every message and every public key there is only one signature that validates successfully. This property applies to single signature schemes and threshold signature schemes alike.

Bitcoin is not Cryptocurrency

“4 Strategies for Investing in Bitcoin”

  1. Don’t

With the recent rise in Bitcoin prices, everyone has taken notice.  Even this guy:

My favorite part of the video I watched recently was when he said: “Ether, or Ethereum, Ethereum is the more scientific name for Ether”

Because of this, I’m getting a lot of questions about Bitcoin, but almost none about cryptocurrency.  People are having a hard enough time wrapping their heads around the technology of Bitcoin that they’re not even bothering to ask about the larger cryptocurrency ecosystem.  They’re also equating Bitcoin to cryptocurrency.  Bitcoin is a cryptocurrency, yes, but Bitcoin is not the cryptocurrency.  This may seem obvious, and indeed it is.  However, people are conflating the price and notoriety of Bitcoin with the tech of Bitcoin, thinking, “since Bitcoin has the highest market cap, surely it must have the best technology, and the most utility, therefore, whatever Jackson says about Bitcoin must hold at least somewhat for the entirety of the cryptocurrency market”, which is patently false.

An example.  Someone recently told me they asked their financial advisor about buying Bitcoin, and he told them it was a ponzi scheme and to steer clear. I think this financial advisor came to the right conclusion, but probably for the wrong reasons.  If you’d have asked him what he thinks about cryptocurrency in general he probably would’ve said the same thing, but that’s because his only frame of reference for cryptocurrency is Bitcoin.  Bitcoin may very will be a “ponzi scheme” (I don’t know if it is or isn’t, so don’t ask me) but that doesn’t say anything about cryptocurrency generally.

But, I’ve also had numerous discussions with engineers who view it the same way.  Many call Bitcoin digital gold, which is one step removed from real gold, of which the famous Warren Buffet has this to say:

The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever unproductive – will pay more for them in the future. Tulips, of all things, briefly became a favorite of such buyers in the 17th century.

This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.

The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.

What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis.

As “bandwagon” investors join any party, they create their own truth – for a while. Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: “What the wise man does in the beginning, the fool does in the end.”

Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.

A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.

Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.

I can’t blame Mr. Buffet for not investing in Bitcoin.  However, he’s recently said he was wrong about Google and Amazon.  Buffet isn’t a technologist, he’s a financier.  He also claims he only invests in things he understands.  I don’t blame him, or many other people for not understanding this tech and it’s nuance.

However, I tend to agree with Mr. Buffet, and the financial advisor with regard to Bitcoin.  Bitcoin may very well be a ponzi scheme in as much as gold is.  Bitcoin core is positioning itself as a digital gold, as such, if you don’t think gold is a solid investment, you probably shouldn’t invest in Bitcoin, using the logic given above by Buffet.  But this does not mean that all cryptocurrencies are positioning themselves as digital gold and that you shouldn’t invest in any cryptocurrencies.*

Also, while I’m at it, too many people who haven’t investigated the cryptocurrency ecosystem are substituting arguments against Bitcoin with arguments against cryptocurrency in general.  What may hold true for Bitcoin in an argument does not necessarily hold true for all cryptocurrencies.

Building Blocks

Speaking as a software engineer, we’re trained to crystallize logical concepts, and then use these crystallized logical structures to build more logical structures on top of the existing ones, and with the block chain, we’re doing just that.  Block chain engineers are extrapolating from Bitcoin’s block chain structure, building new things with it everyday.  One of the breakthroughs for me when learning about cryptocurrency was when I investigated Ethereum and saw the inferences made from Bitcoin’s original block chain.  Once this connection was made I started to realize the possibilities were vast, not just internal to the Ethereum block chain as many before me have already stated, but with the block chain concept as a whole.  We’re still trying to figure out which building blocks fit where, which are useless, and which will form the backbone of this new landscape.  But that’s technology.  There will be many more innovations to come, as this technology is very much still in it’s infancy.

Yes, we’re in a bubble

Yes, we’re in a cryptocurrency bubble, and everyone is trying to cash in on the craze.  But this doesn’t mean there isn’t still true innovation and disruption happening in computation in this space.  But also, what’s wrong with a bubble?  Look at the beautiful infrastructure and technology the last tech bubble gave us.  The cryptocurrency bubble is turning heads, just as the dot-com bubble did before it, and luring brilliant engineers into it’s fold due to these absurd valuations.  Yes, a lot of people are going to lose a lot of money, but a lot of people have, and will continue to, make a lot of money, just as they did during the dot-com bubble, and I don’t think there is anything wrong with that.



*note: this also doesn’t mean that Bitcoin’s only use is as a digital store of value, but for the sake of keeping this digestible for beginners, I won’t go there.  In fact, the only reason I bring this up is because I know advanced readers from the Bitcoin community are going to pitch a fit about this.  Yes, most of us understand you’re purchasing access to the btc network, but with all the price speculation it remains to be seen if access to this network is priced according to it’s value.

My First Crypto Paycheck

Here is a fifth post written in my series of articles for ETHLend, an Ethereum based lending start up.  Enjoy!


As some of my followers may know, I write for the Ethereum start up ETHLend. I started out blogging about cryptocurrency on the weekends because it is a fascinating subject and there is always something to write about. I felt the best way to learn about the subject was to try and explain it to non-technical readers. Often, the hardest people to convince of this tech are non-technical readers. The technical readers have either investigated the tech themselves and have made up their minds how they feel about it, or, if they haven’t, they aren’t going to come to my blog for their information, at least not initially. For this reason, a majority of my posts are geared toward non-technical readers (with a few exceptions 1, 2, 3, 4). This was mostly a weekend hobby, but when I heard ETHLend was looking for technical writers to write about the development they were doing I jumped at the chance to get paid for a weekend hobby. I quickly got in touch with Jordan, and we started the discussions with Stani on the ETHLend slack channel.

My “Job”

The majority of my duties involve explaining the breakneck development that the ETHLend dev team is doing in as simple terms as possible, as well as positing thought experiments with regard to where this tech could possibly lead and implementing these ideas in experimental code. This has been an absolutely blast, and has allowed me to approach the decentralized ecosystem from the perspective of a lending platform. It’s one thing to read about a Solidity library and follow someone else’s tutorial, it’s another to actually explore it through concrete use.


One of the most fascinating aspects of working with an Ethereum start up that was pre-ICO, was I got a bit of insight into the world of ICOs that I otherwise wouldn’t have. During my negotiation with Stani before I started writing for ETHLend, we agreed that payment would happen completely in LEND. Since these tokens were pre-ICO, they hadn’t hit any of the exchanges and had no valuation. To put this into perspective, 1K LEND is equal to $150 now, but at the time of negotiation, neither Stani nor I had any idea what these tokens would actually be worth. The ultimate skin in the game.


As crazy as it may sound to some, this is one of, if not the largest, motivators for me to accept the position. I felt I was following the footsteps of many in the crypto community who came before me, like Vitalik Buterin and Andreas Antonopoulos. The legend of being paid in crypto appealed to me.

I also find it fascinating that a protocol can create their own currency which it can use to pay it’s members and sustain itself. This is one of the most important disruptive aspects of cryptocurrency.  Cryptocurrency will be around for a long time because of the fact that an entire digital economy can be built from software.  This gives software engineers an avenue to monetize open source projects.  Which incentivizes more developers to go the open source route, driving the creation of more digital micro-economies.

It’s also ruthlessly free market. If the market decides this token (and therefore the protocol, or software backing it) is useless, then the project dies. This is why my excitement at being paid completely in crypto may seem foreign to some, as there is obviously a large amount of risk involved. An agreement to be paid 100 LEND per word can just as easily be worth $100 as it can $.01 after the ICO.

Thank You

I’ve recently received my first payment of LEND tokens for my writings, and for that, I am extremely grateful to the ETHLend team for all of the hard work they’ve put behind the project and give the tokens value to the decentralized community. I’m grateful at the opportunity to join the ranks of writers to be paid fully in cryptocurrency. I’m also grateful to be a part of this new version of the decentralized economy. Finally, I’m grateful to everyone who’s read any of my material, argued with me, debated me, and most importantly asked questions. Here’s to another year of cryptocurrency!


Buying the Dip, or, using ETHLend as a P2P Margin Trading Instrument

Here is a fourth post written in my series of articles for ETHLend, an Ethereum based lending start up.  Enjoy!


When I first joined ETHLend I brought it up with my coworkers over lunch that I was joining an Ethereum start up as a writer. Being engineers they were intrigued and wanted to know more about the project, the Ethereum block chain, and what problems ETHLend was aiming to solve. I had just finished this article comparing ETHLend with Prosper. So I explained the use cases of ETHLend from that context. We all thought it was an interesting idea and moved on to other conversation. However, recently with the large influx of new crypto investors, and the bloodbath in crypto today, it got me thinking. Perhaps the most interesting use case for ETHLend is the ability to get quick leverage when the market dips, rather than as a decentralized replacement for micro loans.

Good Luck Buying the Dip

I’ve been in cryptocurrency since Bitcoin was $500, so I know, like many of us do, that this extreme market correction isn’t abnormal. With this correction in prices, I’m interested in buying the dip. I knew the dip was coming eventually, so I pre-emptively initiated a transfer from my bank last week. The funds won’t be available in my exchange until December 28th. Good luck buying the dip. Good luck making any sort of agile investments when this is the case.

Indeed, with the influx of new investors, this seems to be the worst news when I break it to them that they probably won’t be able to buy any cryptocurrency for at least another week, and that’s if they’re lucky. I’ve seen people have to sign up to numerous exchanges due to the different KYC laws each exchange abides by in hopes of getting added to even one. Add to the mix, the unique bugs on each exchange’s on-boarding pipelines and the whole thing is a bit of a nightmare for a new cryptocurrency investor, particularly when a dip like yesterday happens.

The Two Week Fiat-Crypto Border

While sitting in the airport yesterday, watching the market correct, and wishing my transfer was complete I started thinking about ETHLend. Maybe ETHLend’s use case isn’t an Ethereum version of Prosper, but rather some kind of internal block chain leverage instrument. With this massive delay of getting funds into an exchange account, it’s almost like there is a two week wide border separating traditional assets and crypto assets. It may be that ETHLend’s primary use case is as an investment leverage instrument for the crypto side of this fiat-crypto border, moreso than transparent lending. Don’t get me wrong, that’s one obvious advantage, but sometimes big breakthroughs are more nuanced than the primary goal of a start up.

An example. The market corrected. Because of this, I’m interested in buying more crypto assets. Tokens have gone on sale. I tell my bank to send funds to an exchange in preparation for my discount holiday shopping spree. Two weeks later my funds arrive…and the stores are all closed.

What if, instead of requesting funds from my bank, which moves at a snails pace (this is why we’re all so excited about this technology in the first place, isn’t it?). I simply place a loan against my current token holdings. Maybe I’m certain Dash will recover within the next month and I’m holding 500 BAT. I request a loan to get .2 ETH, or even better, 125 Tether (ETH seems to be a part of the correction, sadly), which I can then use to purchase the Dash I so badly covet. Let’s say the loan lasts for 1 month. If, as I expect it will, the Dash price recovers, I pay the agreed upon interested on the loan, the lender is happy, and I’m happy because I got my Dash at the holiday discount. If instead, I’m wrong, and after a month the price continues to drop, the lender keeps my 500 BAT as collateral. In either case, I still get my Dash.


Maybe ETHLend really shines as a peer to peer “bank”, with which quick crypto leverage is achieved. It can still have it’s more obvious use case as a decentralized Prosper, but speaking as an investor, it sure would’ve been nice to have been able to buy this dip. I’ve yet to use my LEND tokens on the ETHLend platform, but I know the next time the market corrects, I won’t be heading to my lethargic bank, but rather to ETHLend.

External Price Feeds in ETHLend using Oraclize

Here is a third post written in my series of articles for ETHLend, an Ethereum based lending start up.  Enjoy!

ETHLend is an Ethereum based lending platform that aims to unbank lending and offer blockchain liquidity backed by crypto assets. In short, ETHLend does this by allowing borrowers to put different types of tokens up as collateral for pseudonymous and transparent borrowing and liquidity. While the the idea is simple, in practice, the engineering necessary to provide a rich set of features to the user is non trivial since the ethereum infrastructure is still in it’s infancy. Today we’ll investigate one of the challenges.

Price Feeds

When a user provides a token as collateral to the ETHLend smart contract, the question is: what is this collateral really worth, and who gets to decide this? Is it the lender, or the borrower? or someone else completely?

As an example, perhaps I would like a loan of 10 ETH for my Sunday Lambo shopping. I’m willing to give you 10 DOGE as collateral for this loan. Obviously this is an extreme example, and I would hope no lenders would be willing to take such a laughable loan, however, what about a loan of 1 ETH for 45 OMG?

It becomes clear that we need a way of accessing data outside the ethereum network in order to have an agreed upon standard for fiat, ether, and token values. Rather than letting any one person decide the value, we can allow the market to decide. But how are we going to get this data? It isn’t readily available to the Ethereum blockchain.


Many in blockchain are already familiar with the phenomenal Oraclize service. For those not familiar, a brief explanation from Oraclize themselves:

“Oraclize is a service offering a set of tools and APIs aiming to enhance the power of smart contracts. By providing access to both on-chain and off-chain data, Oraclize allows to find an answer to any query your contract may have.”

Essentially, what Oraclize does, is it empowers smart contracts to access information outside of the blockchain in a trustless way. Want to pay a user ether every time they tweet your hashtag? Oraclize makes this possible. Want to attach a bounty to your stack overflow question? Oraclize makes this possible. The possibilities with the brilliant Oraclize service are endless.

Tying Them Together

ETHLend has developed an Oraclized based smart contract that allows for loans to be requested in USD but transacted on the Ethereum blockchain using the Kraken API for the exchange rate. Internally, ETHLend’s contract keeps the USD/ETH price updated every minute through the EthTicker method. It then exposes this publically to dApp developers through a call to the smart contract’s “ethPriceInUsd” variable. Any time a user would like to create a loan in USD, or even get the exchange rate, this can be readily retrieved and accessible to all ETHLend participants as the agreed upon value. Obviously this contract can easily be extended to any fiat currencies currently trading against ETH, as well as any number of ERC20 tokens as well.

Edge Cases

There are, and will continue to be, a number of different edges cases that may arise in the lending cycle, and ETHLend is continually closing the gap on these. Let’s take a few short toy examples to illustrate how this external price feed comes in handy.

How do we know if the borrower has enough value in the tokens they’ve offered as collateral for a loan? Easy, have the smart contract check the exchange rate for the collateral and the requested loan amount to ensure the borrower and lender are copacetic on the value proposition.

What about when the loan has been filled and the collateral drops or rises in value before the loan is repaid? Crypto is highly volatile after all. With the current ETHLend smart contract, since the loan was presumably created in USD, the volatility of the underlying cryptocurrency is irrelevent. A loan for 500 USD today may involve .625 ETH, and at the time of repayment, 50 ETH, however, as long as the two parties are comfortable treating USD as the pegged currency, they are happy with the outcome. With this new smart contract, they now have the ability to do so, should they choose.


As I said, even a simple concept such as lending on the blockchain is actually fraught with different edge cases. Because of this, ETHLend is always looking out for talented blockchain engineers to contribute!

As we saw, having a way to value currencies in a loan market is of utmost importance for decentralized lending. With Oraclize, ETHLend has this power, and is able to give a much more rich set of functionality to users than it can without Oraclize, making the loan process even more transparent in the process.

How to buy and claim EOS tokens

In a similar vein to my iota purchasing tutorial, today we’ll be walking through a purchase of EOS.

EOS is being touted as the Ethereum killer.  It aims to solve a number of Ethereum’s scalability problems, as well as a number of other oddities associated with Ethereum that we won’t go into in this post.  One of the members of EOS is Dan Larimer, creator of Bitshares and Steemit, which boast two of, arguably, the fastest block chains.  The crowd sale opened in June of this year, and I knew about it but I didn’t invest.  This is because block.one (the company building the EOS network) is very clear that when you’re purchasing EOS tokens you’re effectively receiving nothing.  Yeah, you read that right, nothing.


The way the crowd sale is structured, you’re investing in block.one the company, and they’re building the EOS network, but you have no guarantee of return on investment, or utility of the tokens on the network.  Effectively, block.one can take all of this crowd sale money and go to the Cayman Islands with it and there’s nothing legally anyone can do about it.  It may seem odd that I’m investing in something like this, and as I said, it’s taken me 5 months to talk myself into it.  But, as Dan put it in an interview, he’s already independently wealthy via steemit and bitshares, and doesn’t really need the money.  I also believe block.one is covering their asses for the Howey Test that the SEC uses to decide whether an asset is a security or not.  I believe a lot of the language they’re using is an attempt to circumvent the Howey Test.  Also, they recently released their test net, so they’re building something, which is more than you can say for a lot of ICOs right now.  Finally, I made an alright profit from the recent Bitcoin price rise.  I figure, I can gamble a bit with money that is the market’s and not mine.

I ended up using the crowd sale smart contract to make the purchase, but if I had to do it over again I would probably just buy the tokens on an exchange and register my EOS public key via the smart contract.  There’s already enough complexity going on here, and I think the crowd sale smart contract adds to this complexity for beginners unnecessarily. However, I wasn’t sure how block.one was tracking the Ethereum EOS tokens, or whether exchange tokens would be treated differently.  Anyway, here’s a quick overview of what we’ll be doing and why.

Oh, also, this was the first time I’ve actually been effected by the cryptokitties



We’ll be taking ether from your wallet, and sending it to the EOS smart contract, which has a payout every day, based on the amount of ether that’s been paid into the contract on that day (part 1 of this tutorial).  Once the period is up, you can retrieve your tokens from the smart contract (part 2 of this tutorial).  Finally, before the entire crowd sale ends on June 1, 2018, you must generate your EOS public and private key pairing and map your Ethereum wallet address to this EOS public address (part 3 of this tutorial).

What’s essentially happening here is, EOS wants your capital, but they don’t have a network yet with which to receive said capital, so the most effective way of them getting that capital is through the Ethereum network (Ethereum did a similar raise on the Bitcoin network when they started).  However, they still need a way to map your investment to you so they can pay you your EOS tokens on the EOS network when the crowd sale ends.

1. Buy Ethereum based EOS tokens

First send ether from your wallet to the EOS smart contract.


  1. Go to the EOS website eos.io.
  2. Scroll down and click GET EOS.  Note that US residents will have to use a VPN as the crowd sale blocks US IP addresses (see the Cayman Island and using an exchange comments in the introduction).
  3. Review the conditions, check all the boxes if you agree and click Continue.
  4. Copy the crowd sale smart contract address for the token distribution.
  5. Go to MyEtherWallet and click Send Ether & Tokens from the main menu. After unlocking your wallet put the copied crowd sale address from step 4 in the “To Address” field and a desired amount you’re investing in the “Amount to Send” field.  Press Generate Transaction and submit.

NOTE: one thing I’ve found from readers of this step is that there is a minimum of ETH that must be sent to the smart contract otherwise the transaction will fail.  That minimum is .01 ETH.

2. Claim the tokens you’ve paid for

Using eosscan.io you can see the current rate of ETH/EOS for this crowd sale round.  You can also see when the current crowd sale period ends.  At which point you’ll be able to claim your EOS Ethereum tokens.


  1. Go to MyEtherWallet and click Contracts from the top menu.
  2. Select EOS - Contribution from Select Existing Contract drop down. The address you’ve previously sent ETH to will appear. Click Access.
  3. Select claimAll from the Select a function drop down at the bottom.
  4. Unlock your wallet and press Write.*
  5. In the modal, leave the amount at 0 and set the appropriate gas limit.

*I had problems with the claimAll function running out of gas (DAMN YOU CRYPTOKITTIES!).  You can also select claim and enter the day you purchased in the smart contract (in my case it was 172).  From here it’s the same steps.

To see if your claimed tokens are in your wallet, add the EOS custom token:

  1. Go to MyEtherWallet and click Send Ether & Tokens from the main menu (you won’t send anything this time).
  2. Look for Token Balances on the right-hand side of the page.
  3. Click Add Custom Token. For the field named Token address, enter 0x86fa049857e0209aa7d9e616f7eb3b3b78ecfdb0. For Token Symbol enter EOS and for Decimals enter 18. Click Save.
  4. After your claim is processed, you will see your EOS token balance by choosing View Wallet Info from the main menu.

3. Register to claim native EOS tokens after the sale ends

The steps here are the same as for claiming the Ethereum tokens except before going to MyEtherWallet you need to generate the keys that will be used on the future EOS platform.

Make sure you claim the native tokens before June 1, 2018 at 22:59:59 UTC.

“Within 48 hours after the end of the final period on June 1, 2018 at 22:59:59 UTC, all EOS Tokens will become fixed (ie. frozen) and will be non-transferrable on the Ethereum blockchain.”


  1. First, you’ll need an EOS key generator. The good news is that @nadejde has one.
  2. Go to MyEtherWallet and click Contracts from the top menu.
  3. Select EOS - Contribution from Select Existing Contract drop down as before.
  4. Select register from the Select a function drop down at the bottom rather than claimAll.
  5. Put your PUBLIC EOS key to the key field.
  6. Unlock your wallet and press Write button.
  7. In the modal, leave the amount at 0 and set the appropriate gas limit.

You can ensure that the mapping from your Ethereum public address to the EOS public address is correct by following these steps:

  1. Go to MyEtherWallet and click Contracts from the top menu.
  2. Select EOS - Contribution from Select Existing Contract drop down. The EOS smart contract address will appear. Click Access.
  3. Select keys from the Select a function drop down at the bottom.
  4. Put your Ethereum address in the address field.
  5. Click Read.
  6. In the string field, you should see the EOS public key you input above, if not, something went wrong.


Again, DO NOT FORGET TO REGISTER YOUR EOS PUBLIC KEY TO YOUR ETHEREUM WALLET ADDRESS! The Ethereum address will be useless in the EOS ecosystem when the crowd sale ends, and the only way block.one will know where to send the EOS tokens is because they’ve been registered in the EOS crowd sale smart contract.

As usual, if anyone has any questions, don’t hesitate to get in touch!

twitter:@sjkelleyjr instagram:@sjkelleyjr email: jackson@sjkelleyjr.com

I may have some good news coming up pretty soon, so stay tuned! Until next time.

The Internet vs Itself

My writing with ETHLend often has me diving in uncharted technology.  Often I’m doing things that have never been done before on the planet, such as connecting ETHLend to uPort for example.  This gives me a unique perspective into the daily lives of decentralized developers.  At the same time I work for a very large and customer centric tech company.  The mesh of these two perspectives has led me to ponder the following question: Is the first to market advantage of centralized user experience too powerful for decentralized tech to overcome?


Ethereum is often touted as “web3.0”.  It’s true that what decentralized technologies are trying to accomplish are magnificent and gargantuan tasks.  It’s also true that using ethereum and other decentralized software feels like using the internet in the early days of the web.  Back then you often had to do what seemed like mysterious incantations, without much idea as to what they were actually doing.  Obviously most cryptocurrency feels very much the same way, with things like the iota wallet showing no balance (1,2,3,4,5,6) and the DAO hack.  This makes for an easy comparison to the early web, however, I argue that the comparison is a bit too easy.

User experience on the centralized web is miles ahead of where it was originally, which makes it miles ahead of its decentralized counterparts.  I don’t see regular users leaving the comforts of their Mercedes to jump back on the horse and buggy of decentralized user experience.  And, more importantly, I believe that this analogue will always be valid.

This is not to say that evangelists and technocrats won’t fully embrace this tech in much the same way as the early internet was embraced.  This is because most of us understand what’s happening behind the mask of UI and are much more willing to forgive technical mistakes or ineptitudes than the average user.  My concern is not that the tech won’t be adopted, but that the adoption will never grow above a certain percentage of the population.

The Internet vs Itself

As stated above, it’s easy to look to the technological growth of the internet as an example for decentralized tech to emulate. The problem with this perspective is, the internet didn’t have to compete with itself.  The internet competed with print, and I would argue, until the user experience felt effortless, it fought an uphill battle in much the same say decentralized tech is fighting now.  The problem is, the current state of user experience on the internet is so far ahead of its decentralized counterparts, and will continue to outpace the growth of its decentralized counterparts.

Does UX matter?

One could argue that user experience isn’t everything.  The needs decentralized technologies are attempting to fill are not necessarily motivated by user experience (although, I would argue the motivations of a technology should always be driven by user experience, but that’s a different discussion for a different day).  However, in order to achieve mass adoption, a superior, or at least equal, decentralized user experience must be achieved.

Put yourself in a layman’s shoes.  They don’t understand what the decentralized tech is trying to achieve, they just know it is or isn’t working as well as the centralized version, and will therefore go back to the centralized alternative in the case when it isn’t.  Take the case of steemit.  They’re paying people to use the platform, but the UX is lagging so far behind that of reddit that it doesn’t matter.  People still continue to stay on reddit, and, even after trying steemit will return to reddit.

Engineers Are Users Too

This leads me to my final point.  Engineers are users too.  Building good, clean, maintainable software, such as reddit, is a difficult enough job as it is.  Software developers don’t need to make their difficult jobs any more difficult than they already are.  This is exactly what they’d be doing by opting for decentralized tooling.  The current state of affairs with respect to infrastructure surrounding the modern web makes software development a pleasant experience.  The same cannot be said for the decentralized tool kit.  I hope this changes in the future, but I fear that much like user experience, the tooling of the modern web is also so far ahead, and will continue to outpace its decentralized counterparts, that this will never happen.

This is in large part due to the Pareto Law nature of technology.  The decentralized web must compete with the centralized web.  The centralized web is an internet of billions of dollars in capital, allowing it to hire hundreds of millions of software engineers to work on even the most minute detail of its infrastructure.  While the decentralized alternatives have a hundred thousand at most scattered about the globe working for less, and often for free.  Don’t get me wrong, I commend their efforts, and count myself as one, considering I spend my weekends writing about this tech.


With cryptocurrency, however, more and more funding is being poured into the decentralized alternatives, which is why it’s even possible to argue against centralization right now.  This is actually my main motivation for investing in cryptocurrency.  I invest not because I’m interested in buying a lambo, but because I know the only way to spearhead this technology is to put capital into it and see where that takes us.  It remains to be seen if this funding can ever eclipse the centralized counterparts, however.

We’ve all seen these little infographics showing how cryptocurrency actually stacks up against companies like Apple and Amazon.  Granted, this one is dated, but, even with the unprecedented surge in bitcoin price, all of cryptocurrency still doesn’t match Amazon’s market cap.


This is why I won’t be quitting my day job any time soon to join the decentralized army full time.   As an engineer I firmly believe that decentralized technology is a more robust design than the centralized alternatives, but the cat is out of the bag.  Users have grown too accustomed to having their data now.  Don’t get me wrong, the engineering involved in bringing centralized software to fruition is absolutely brilliant, and has taken decades to perfect.  I believe decentralized tech will get there one day.  But when that day comes, the bar for user experience will be moved still higher by centralized technology.







ETHLend & uPort, A Match Made in Heaven

Here is a second post written in my series of articles for ETHLend, an Ethereum based lending start up.  Enjoy!

In my previous write up I mentioned that we would dive deeper into what a possible block chain credit score would look like. Well, in order to have a credit score, you must first have an identity with which to attach that credit score. It therefore seems the most logical place to start in our investigation of credit scoring is identity. Today, we’ll be using uPort to create a loan on ETHLend using our uPort identity. For the sake of brevity, I’m going to assume you’ve followed the steps in the uPort devPortal and have an identity. I’m also going to assume you’re familiar with how ETHLend works.


To start, we’re going to create a quick and dirty node.js cli for illustrative purposes which we’ll use to connect our uPort identity to:

const uport_lib = require('uport-connect');   
const qrcode = require('qrcode-terminal');      
const SimpleSigner = uport_lib.SimpleSigner;   
const Connect = uport_lib.Connect;      
const uport = new Connect('ETHLend Integration', {       
  clientId: 'UPORT_APP_ADDRESS',       
  network: 'rinkeby',      
  signer: SimpleSigner('SIGNING_KEY'),              
  uriHandler = uri => qrcode.generate(uri,{small:true})  
  .then(userProfile => {  console.log(userProfile);  })    
  .catch(err => {  console.log(err)  })

You’ll obviously need to npm install uport-connect as well as qrcode-terminal.

Put the above code into a file (may I suggest ETHLendRocks.js?) and run:

node ETHLendRocks.js

You should see a QR code generated on your terminal. Scan it, and grant your uPort mobile app access to your uPort identity credentials. You should see your uPort profile data logged to the terminal. Now that we have an identity, we can store different attributes about this identity using IPFS and the uPort-registry package.


In order integrate uport-registry we need to do a bit of extra set up to our existing application:

const uport_lib = require('uport-connect');
const MNID = require('mnid'); 
const qrcode = require('qrcode-terminal');
const registryArtifact = require('uport-registry'); 
const Contract = require('truffle-contract'); 
const Registry = Contract(registryArtifact);  
const NUMBER_OF_LOANS = 10; //random number of loans of illustration
var registryInstance;  
const SimpleSigner = uport_lib.SimpleSigner;   
const Connect = uport_lib.Connect;      
const uport = new Connect('ETHLend Integration', {       
  clientId: 'UPORT_APP_ADDRESS',       
  network: 'rinkeby',       
  signer: SimpleSigner('SIGNING_KEY'),
  uriHandler = uri => qrcode.generate(uri,{small:true})  
const web3 = uport.getWeb3();
  .then(reg => {  
    //set the global registryInstance variable to access anywhere in the app
    registryInstance = reg;
  .then(userProfile => {  
    //decode the users address based on which network they're on   
    let addressPayload = MNID.decode(userProfile.address);     
    return registryInstance.set('Open Loans',addressPayload.address,NUMBER_OF_LOANS,{from:addressPayload.address});    
  .catch(err => {    console.log(err)  })

Using the registryInstance.set parameters we can put any sort of financial data we want to store about a uPort identity. We can then retrieve it using the registryInstance.get() method:

  .then(userProfile => {     
    let addressPayload = MNID.decode(userProfile.address);     
    return instance.set('Open Loans',addressPayload.address,NUMBER_OF_LOANS, {from: addressPayload.address});   
  .then(tx => {     
    const subject = tx.logs[0].args.subject;
    instance.get('Open Loans', subject, subject)
      .then(value => {      
  .catch(err => {     
function hexToString (hex) {     
  var string = '';     
  for (var i = 0; i < hex.length; i += 2) {       
    string += String.fromCharCode(parseInt(hex.substr(i, 2), 16));    
  return string; 

Obviously, this can be used to store information about a uPort identity any time they do anything in an ETHLend dApp. How many times they’ve defaulted, how many loans are currently open, and what value they’re for, are a few examples.


To integrate this uPort identity into the ETHLend ecosystem we simply need to create a contract object with whatever contract we’re interested in interacting with:

const web3 = uport.getWeb3();
const CreateLedgerContractObj = () => {      
  let LedgerContractABI = web3.eth.contract(LEDGER_CONTRACT_ABI);
  let LedgerContractObj = LendingContractABI.at(LEDGER_CONTRACT_ADDRESS);      
  return LedgerContractObj;  
const LedgerContract = CreateLedgerContractObj();

In this case I’ve chosen to use ETHLend’s Ledger contract. So you’d fill in the LEDGER_CONTRACT_ABI and LEDGER_CONTRACT_ADDRESS with whichever smart contract you’re interested in interacting with.

Once we have the smart contract object, we can call methods on it inside the .then() block of the requestCredentials call:

  .then(userProfile => {     
    let addressPayload = MNID.decode(userProfile.address);     
    const usersEthereumAddress = addressPayload.address;     
		makeLoanRequest(usersEthereumAddress, 100);    
  .catch(err => {     
const makeLoanRequest = (address, loanAmount) => {   
    from: creator,
    value: loanAmount,     
    gas: 2000000    
  }, (err,txhash) => {     
    if(err) throw err;           
    waitForMined(txhash, {blockNumber: null},          
    pendingCB() => {              
      console.log('waiting for loan request to be mined...');         
    successCB() => {       
      console.log('your loan\'s transaction hash is:',txhash);       
      incrementIPFSOpenLoanAmount(address, loanAmount);       
      //any other financial data you'd like to track can be get and set here...     
const incrementIPFSLoanCount = (subject) => {   
  instance.get('Open Loans', subject, subject)
    .then(value => {     
      instance.set('Open Loans', subject, value + 1, {from: subject})    
const incrementIPFSOpenLoanAmount = (subject, openedLoanAmount) => {   
  instance.get('Open Loan Value', subject, subject)
  .then(value => {     
    instance.set('Open Loans', subject, value + openedLoanAmount, {from: subject})    

Here I’ve illustrated how one would store the number and amount of open loans made by a uPort identity at the time of loan creation, but any number of metrics can be used and any point in a loaning and borrowing process.


This brings me to my final point. If we’re going to use IPFS as an open, transparent data store, then the ETHLend smart contract is going to need to update the data associated with the uPort identity via IPFS as well, depending on various conditions known only to the ETHLend smart contract. Currently this is not implemented.

If you’re a developer and you’re interested in developing smart contract code, this is a perfect opportunity to make your mark! Check out the ETHLend repo, and see if you can get your pull request merged into the master branch, or, feel free to get in touch with ETHLend via the many social media channels:





uPort is always interested in hearing from developers as well and in fact were instrumental in making this article happen.




The Future of Lending is Blockchain


I’ve recently been hired by ETHLend to write about their decentralized lending ecosystem.  I plan on posting all pieces done for them on my blog as well, in order to keep a record of my work.  Below is the first post! Enjoy!



I invest in everything.  I hold stocks, bonds, mutual funds, and cryptocurrency.  I copy trade.  I hold microloans, real estate, cryptocurrency miners, cash, fiat currency, gold, silver, you name it, I hold it.  The variety of my holdings goes beyond diversification.  I’m interested in testing every form of investment, if nothing more than for pure curiosity of the financial instrument.  It’s one thing to read a book about the subject, it’s entirely different to have some skin in the game.  It’s often that you don’t get a full picture of where you want you finances until you’ve tested the waters in a concrete way.

In a sense, many of these holdings are different forms of lending.  In the case of cryptocurrency you’re often supplying value to a decentralized ecosystem in exchange for some kind of utility, or return, in the case of proof of stake.  In the case of bonds, you’re supplying capital to an entity at some agreed upon interest rate.  However, in all my dealings with traditional financial instruments, there is one thing that separates them from blockchain based financial instruments: their opacity.


Let’s take as a comparison a centralized lending platform, and it’s decentralized counterpart.

As previously stated, I hold microloans on the prosper platform.  I initially invested because it seemed to me a novel idea.  I remember when I was younger googling “how to start your own bank”.  I graduated high school during the 2008 financial crisis, and it seemed to me, the banks had it made.  They give you money, do nothing, and profit.  If you don’t pay them back, they take your collateral.  Nearly no risk, and a guaranteed return.  Obviously things aren’t that simple, but this desire to be a moneylender stayed with me.  This desire led to me invest some bitcoin profits into prosper microloans.

The prosper system offers a number of metrics to a would be lender.  Among these are the borrowers state, their FICO score range, their income, and their Debt/Income ratio.  Another metric is the proprietary “Prosper rating”.


You’d think that all of these metrics would make it easy to choose a borrower that won’t default, and yields a nice return.  However, the world is a complex place, and even the most risk averse borrower can have their spell of bad luck.


With prosper all I get are these metrics, which granted, are great metrics.  However, I have nothing but these metrics.  No past purchases, and certainly no detailed tracking with regard to how the money I’ve let is being spent.  Once the money is lent, it’s a black box that either returns, or doesn’t return interest.

And therein lies the difference between the two platforms.  With ETHLend, I don’t need third parties to background check borrowers.  I don’t need to rely on a “proprietary rating” to inform my decision on whether to lend or not.  And even if I did decide to defer to a blockchain based rating, the rating will be fully open and audit-able.  I can follow every step of the process, in much the same way we can audit the bitcoin code, yet have no idea how our Facebook feed is generated for us.  I can trace every transaction made up to the point of requesting a loan from me, and if anything unsavoury surfaces, or a transaction is made that I’m uncomfortable with, I can refuse the loan.  In the case of a centralized lending service, I have no idea who the borrower is, how they spent their money in the past, or how they’re spending the money I’ve lent to them currently.  Sure, the metrics afford me an broad overview, but with the blockchain I can drill down into every minute detail of an address’s history at my discretion.

Let’s say I lend to an IoT vending machine which uses my currency to order goods to sell, and with it’s profits pays my interest, all via ETHLend.  Currently a credit score on the blockchain doesn’t exist, so let’s assume I know nothing about this vending machine.  Let’s say this device is vending to addresses I’m not comfortable with, or receiving goods from addresses I’m uncomfortable with.  I can immediately blacklist this device as soon as these transactions appear on the blockchain.  And, thanks to the blockchain, if the device has made any transaction in the past that I’m not comfortable with, prior to requesting a loan, I don’t even need to go through the hassle of loaning to it first, and blacklisting it afterwards, I can blacklist it as soon as this unsavoury transaction is made.

The implications for this are obvious.  Since all transactions are open and auditable, every address can have assigned to it a credit score, almost trivially.  In the next post, we’ll discuss the details of what this credit score might look like.  We’ll also take a look at how ETHLend handles collateral, and how the ENS domain names function in this context.  Until then!