00:04:01 · Hugo Philion
I grew up in London, which is pretty much the world's financial center at the time when I was growing up. Very small startup community, very little technology community. The financial markets were the only choice and obviously a place where one could potentially make large amounts of money, is very interesting to think about when you're 17. I suppose that macro economic and that's always been a things I like to think about. So I studied risk and financial engineering, worked at a number of hedge funds in London. After about seven years, I decided that I was just trying to eke out financial returns in order to make essentially myself rich. So I left finance, went to study machine learning at UCL in London, and that's where I met my two co founders. And I knew I probably wanted to be a founder. And when looking at machine learning, it's heavily dominated and therefore gives you no opportunity really. If you look at OpenAI, he ran Y Combinator. I certainly didn't have anywhere near his network to do anything in machine learning. One of our founders had built inter vehicle communications based on a distributed network like Bitcoin. And I'd had some exposure to blockchain from people I knew in the financial community. Ultimately, was a very interesting idea to me that we could do everything, especially financial things, without having to care about the counterparty. And I think that was one of the fundamental reasons why blockchain at the time and still does promising technology. So we started Flare in 2018, and we had a very small office in the basement, someone's photography studio. But as we were a team of three, I think one and a half desks. At the time, they didn't enjoy the benefit on Ethereum of
00:05:44 · S0, S1, S2, S7
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00:06:44 · Hugo Philion
[00:06:44] S6: Smart contract. Essentially, the largest source of Bitcoin was known as wrapped Bitcoin, which is managed through a custodian, essentially antithetical to the concepts of Bitcoin, meaning you're relying on a middleman in order to use your Bitcoin on a smart contract platform. We started looking at, okay, well, how can we get the data around Bitcoin? We devised a protocol as to be able to get that data from Bitcoin to build a bridge that is over collateralized, meaning it has more value securing it than than the amount of Bitcoin that has been bridged using that bridge. And in order to do that, we needed price. So we ended up with these two data protocols. The first being a protocol that allows you to quickly and securely get data from another blockchain and also to be able to prove that a particular thing hasn't happened on that blockchain, and that's pretty key. So, originally, we designed the data protocol just to be able to build this bridge for Bitcoin. Ultimately, we very quickly realized that these those data protocols are much more interesting, that we could bring in data from any open system, pretty much any system in a decentralized way. That's the key point. It's decentralized and it has security. So this allows you to do everything you can do in DeFi today but with Flare. That's just the first step. What really interests me is then, okay, what can we build with that? This means that people can build the rules of an application they're building. Second aspect is then for us off chain compute. Far more data from other sources than can be used by the chain. So where are you gonna use that? You can prove very, very large amounts of data that you need to be able to use that off chain in order to build applications. So I think the blockchain today is at the limit, more or less of what can be built until you add in further compute. And that's when we can start building applications that people actually want to use. So for me, the first and most interesting thing to do is genuinely decentralized decentralize and make uncensorable social media or news platforms or video platforms. We see an increasing set of issues in the world where there is very high censorship, where people are struggling to express their opinion. Another set of applications around gaming.
00:08:56 · Hugo Philion
Ultimately, the experience that blockchain has offered to gaming has been so inferior to the web two or existing gaming product. It really hasn't taken a tool. But there are interesting things you can do when you essentially financialize components around gaming. If I can truly understand what has happened in each computational step of a game, then I can give people skins. I can give people assets based on exactly what they've done, and those assets can be real and tradable as opposed to simply in game. I do have a third thing there. I suppose the last area that really interests us as a team is probably machine learning or as most people call it, artificial intelligence. There are some very interesting things you can do with distribution of users. Again, there's a... There's not too much you wanna do actually on the blockchain. There's not too much you can do on the blockchain. Chain. I suppose the decentralized and economically secure substrate of a block chain provides a very interesting place for machine learning to be expanded and to be made safer through having multiple participants. Some people may believe that Bitcoin shouldn't have value, and I understand that mentality. You have to differentiate between the technology and the value. It has some logic to it. Bitcoin is only backed by hashing power. It's not by the ability to levy taxes nor is it backed by the ability to force other people to use your medium of exchange. Bitcoin doesn't have either of those two things, but perhaps it has one other thing. Rather than forcing people to use your medium of exchange, but to get them to voluntarily use it. And that's interesting, but you'll never convince people that don't want to be convinced, especially as an awful lot of people have a reason, a financial reason, not to be convinced about that thing. If you take away the it's a monetary asset side
00:10:44 · S0, S1, S2, S3
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00:11:44 · Hugo Philion
[00:11:44] S6: Of the equation is fairly nascent technology. I think being able to distribute and consensus will become more and more useful over time. Essentially, there is value in being able to come to consensus across some item of data across various different verticals. You know, our biggest space, the space we're most interested in researching, thinking about is around the outputs of machine learning models. Probably provides the answer to what is blockchain useful for. My exposure to finance was really post the large financial crisis. The ideas around what something is worth fall apart when currency is printed. People were making trades based expectation of government action rather than based on any fundamental strength in the economy. The sort of large excess of capital that was put into the markets post the GFC really led to a position where valuations were massively out of whack. And so when you spend your days thinking about the idea of taking the fundamental thing that values assets, it's a very interesting thing because it removes that ability of a group of people to pervert essentially the entire transmission mechanisms of all financial markets. And that's what has happened. The idea that could be a technology that removes that from the equation is very, very appealing. People started using Bitcoin in places like Venezuela to hedge out insane inflation that was collapsing their currents. Crypto broadly has solved the question of how can I move dollars across the world really quickly and easily without having to enter an I band? The DeFi that is built fundamentally around essentially a dollar based stablecoin system and native tokens because that's essentially what DeFi is and I think that could expand as people use crypto tokens more whether it be stablecoins or the native. So if we're lucky, Flare will be one of the key components in how people use data on blockchains. That's what we're building. That's essentially where we're going. We're not a smart contract project focused on Ripple. We have a much, much larger ambition, and that ambition revolves around data and off chain compute. So in five years' time, I'd like to see a nontrivial percentage of the data that is used in blockchain being sourced from Flare, regardless of whether it's being used on Flare as a chain, whether it's being used on Ethereum or any other new chain that comes up.