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Interview With Bitfinex and Tether CTO Paolo Ardoino on Their New Innovative Products, Next Bitcoin ATH, & DEXes

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  • Paolo Ardoino has shared some exciting news and announcements related to Bitfinex and Tether with U.Today

Cover image via www.youtube.com

In the crypto world, 2019 has been a year full of big expectations, large announcements, heartbreaking disappointments, and new discoveries. We’ve been holding our breath, waiting for the regulators to make their first steps towards embracing cryptocurrencies. We’ve been following all the crazy price predictions, expecting a new Bitcoin price all-time high or at least a sign of a new outstanding technology. 

Despite the growing number of IEOs and decentralised exchanges, I guess this year has been rather calm and quiet for the community, but that doesn’t mean that nothing great happened in 2019. The technology is still growing, putting down its roots in financial institutions. 

Recently, I had a chance to speak with Paolo Ardoino, CTO of Bitfinex and Tether, who told me about their plans for 2020, new products, and achieved results.

U.Today: Hello Paolo, thank you for joining us! You have quite an impressive background in IT. What drew you to the world of blockchain technology? Is there a story behind it?

Paolo: I’ve been a developer my entire life. I started coding at the age of eight, when I got my first computer. I was extremely passionate about it. I consider myself a cyberpunk, someone that really has a deep philosophy for the Internet and a vision of how its protocols should be designed for resilience and peer freedom. I worked really hard to apply that vision with companies I work with, Bitfinex and Tether. I think that my knowledge in distributed computing and networks are well suited for running a business like Bitfinex. Also, my experience in computer and network security is a really good fit for both Bitfinex and Tether.

I started coding at the age of eight, when I got my first computer.

U.Today: Recently, the crypto store Bitrefill teamed up with Bitfinex to allow its clients to shop with Bitcoin (BTC) over the Lightning Network. What benefits does this give your users?

Paolo: Yes, this is one of the most exciting things that has happened recently. I have been a supporter of the Lightning Network since the beginning. Bitrefill’s integration with Bitfinex is a great way to demonstrate the power of the Lightning Network. So, I started discussing with the Bitrefill team. We were all excited about the Lightning Network, and jumped in by giving our support for using this technology in a legally compliant way. Bitrefill was the perfect partner when it came to the testing and experimenting phase. They have a beautiful use case, which is gift cards.

One of the most interesting things that you need to deal with when it comes to this kind of cooperation or partnership is finding a way to send money from one company to another. Let’s say a Bitfinex user buys a gift card from Bitrefill. How should we settle the funds between Bitfinex and Bitrefill? We agreed on using a dedicated Lightning Network channel of 1 BTC size between the two companies so that we could operate smoothly and reduce the risk for ourselves and for our users. While LN is such a new technology, we did not have any problems so far. A lot of people are already using it on a daily basis. So I'm really happy to see the results.

U.Today: How do you list your tokens? What are the criteria for listing tokens? Will you add more fiat currencies to the exchange?

Paolo: That is a good question. I always talk publicly about the fact that Bitfinex doesn't want to be paid to list tokens. This is a business model that some exchanges have, but I think that having a business model where you have to search and decide which tokens are best suited for the platform and its users had better suit us. So, we have implemented rules for listing tokens that include U.S. and other legal opinions to ensure that the tokens are appropriate for listing. These are good parameters for us to follow. We also perform our due diligence on the coin topic and the activity on GitHub, checking to see if the code is fully open-source. It's a really long and tedious process, but I think that the rules that we have implemented will pay off in the long run. We are also working to add new ways of posting deposits to Bitfinex. This new method will come soon, most likely next week*. Of course, we’ll also add new payment methods via traditional wires as well as with more currencies. For now, we only have four currencies available - US Dollar (USD), British Pound Sterling (GBP), Japanese Yen (JPY), and the Euro (EUR).

*Editor’s Note: Customers can now use their credit or debit cards to purchase cryptocurrencies.

U.Today: In the Spring, you launched a new project called the UNUS SED LEO token to refund lost money. Can you tell us more about this project?

Paolo: It’s public knowledge that Bitfinex had issues with Crypto Capital. A substantial amount of Crypto Capital’s funds appear to have been frozen. The reason the UNUS SED LEO token was created was to give us the opportunity to raise $1B to meet strategic and operational objectives, and to burn UNUS SED LEOs from the market every day at any price that the market would set. The great thing was that we were able to raise a billion dollars in 7 to 10 days. This was one of the greatest things that I had the privilege of being part of. That is amazing!

Paolo Ardoino
Image by Bitfinex

Of course, we know that our users are really interested in understanding whether Bitfinex will be able to recover the frozen assets. We are working on it. We have different legal teams in different jurisdictions, and a good understanding as to the location of these funds. We are confident that we can make our case in various courts in order to recover these funds. We know that it is going to be a long battle, and we are ready to fight it and will do so.

U.Today: When do you think we should expect the next All-Time-High for BTC? What do you think about John McAfee’s famous BTC price prediction by the end of 2020 (which is $1 million dollars for 1 Bitcoin)?

Paolo: The halving is expected to occur next year, and I think it’s reasonable to expect an increase in the price of Bitcoin. I won’t do any price predictions myself and this is not financial or other advice from me or from Bitfinex or Tether, but I don't see any reason for Bitcoin not hitting $100,000 within the next few years. That would already be an amazing goal for such technology. I personally believe that Bitcoin is the best cryptocurrency and the best general method for storing financials, as well as sending and receiving micro-payments via the Lightning Network. 

U.Today: Do you have any major plans for upgrading your projects? Can you tell us about them?

Paolo: Yeah, we are currently working on several different products. One is called Prediction Markets, which is interesting because it will list certain markets with a proprietary system, allowing Bitfinex customers to bet on uncertain political events and sporting events. We are planning to deliver this new product by the end of Q1 2020. We are also working on adding additional derivatives products to our platform through iFinex Financial Technologies Limited. These new products will be more suited for institutional investors and traditional financial traders. Options markets will be likely delivered between Q1 2020 and Q2 2020. This is our main focus for the start of the new year, and we’re excited to experiment with new things.

I won’t do any price predictions myself and this is not financial or other advice from me or from Bitfinex or Tether, but I don't see any reason for Bitcoin not hitting $100,000 within the next few years.

One interesting project that we're working on is called Dazaar. It's not yet another blockchain first of all, and that’s something I’m really proud of. It is a super scalable, data stream network that gives people the option of creating data streams. This new technology allows people to send real-time data streams in an expedited manner faster than anything available currently, while optionally supporting agnostic micropayments, which can be in any form of cryptocurrency. We will release it fully open-source. Everyone will be able to have it, expanding the support for additional cryptocurrencies or other means of payment.

We wanted to give back to our community by creating a product that will help the industry grow. 

U.Today: Thank you for sharing, that sounds really interesting! 

In a recent interview with TRON’s CEO, Justin Sun predicts that at least 50% of the USDT will migrate to the TRON network because of Omni’s high fees and slow speeds for USDT transactions. Do you think this prediction is correct?

Paolo: Well, I think that he's really pushing hard to make that happen. Tether received some complaints from the Ethereum community as soon as Bitfinex, Binance, and other exchanges started to halt Tether Ethereum. At one point, Tether accounted for more than 25% of the total Ethereum chain activity, so since we want to ensure that if there is a problem with the blockchain (clogging, ...) or if there is any other issue, Tether would continue to function between the exchanges and businesses using other blockchains. 

We wanted to give back to our community by creating a product that will help the industry grow.

I think that TRON is using this opportunity to draw a lot of interest to its blockchain when it comes to the adoption of Tether. Of course, every blockchain has its uses. For example, Omni is known for having Bitcoin security, while TRON, Ethereum or EOS are much faster. However, they also offer a different security model. Therefore, we do our own due diligence. We think that every blockchain that issues Tether needs to be 100% secure and needs to maintain standards of development continuity, code reviews, etc. We just want to serve the digital token community. We want to serve use cases. Another good example is Liquid from Blockstream, which is a Bitcoin sidechain that uses Bitcoin security and a federation of nodes to allow faster transactions with 1-minute blocktime. In addition, Bitfinex and Tether are funding some experimental projects that aim to bring digital assets (like Tether) to Lightning Network. So, to summarize, whatever our customers like, we will try to provide it. I really like Bitcoin, but I cannot be biased towards a single blockchain when it comes to the companies I work for, hence I involve myself and my team in researching and experimenting with many blockchains to learn and understand better our customers want.

U.Today: What are your thoughts on decentralized exchanges (DEX)?

Paolo: That is a really good question. This was one of the most discussed topics in 2018 and at the beginning of 2019. Lots of entities started delivering potential DEXes. Most of these platforms are in reality non-custodial exchanges rather than pure decentralized exchanges. The fact that a single entity controls the exchange code, the sidechain the matching engine runs on, etc… makes harder to claim that most of these projects can be considered true DEXes. Even the ones that are doing a better job usually have another common issue: a single entity (or community) gets the majority of reward from such DEX.

This, in my opinion, will force these projects to introduce proper KYC/AML policies following regulatory requirements that will be adopted by centralized exchanges. 

Paolo Ardoino
Image by Bitfinex

While developing eosfinex we learned a lot about these requirements and engaged with regulators to ensure a bright future to our fully-on-chain EOS based exchange.

The only truly unstoppable solution can only be built on top of P2P technology (such as Lightning Network) with every node operator running their own small micro-exchange.

Bitcoin has been built to stay and change our financial institutions.

U.Today: In your opinion, do you believe that a mass adoption will occur anytime soon? 

Paolo: I think that mass adoption is still a few years away and to make that happen today it's important to improve the user experience, improve the knowledge base, and ensure that there is enough education for the average person to understand the technology. I believe that we still have a lot of work to do in order to make mass adoption possible. At the same time, I think that we are seeing more and more blockchain related projects, mobile wallets, as well as more and more competition. This is the exact recipe we need to make a mass adoption to occur. I don't have any doubt that it will happen, but I'm not sure that it will happen in the next year or two, we might need to wait a bit longer. Bitcoin has been built to stay and change our financial institutions.

U.Today: Okay, thank you, Paulo. This was really interesting.

Paolo: Thank you for your time. I hope I answered your questions.

We’re eager to see what new technologies and developments will bring us during 2020. It seems that the crypto community is growing stronger day by day, but will we have enough patience to overcome the resistance of the old world, accept the new one and educate our friends and families to make mainstream adoption real?

About the author

Rimma has already worked in crypto media for 5 years. She’s an Editor at U.Today. She also worked as a Head of Social Media at Cointelegraph before. Her greatest interest is focused on the influence of opinion leaders on the crypto community, the latest blockchain developments, crypto adoption, and how all of this affects our daily lives.

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  • Charles Hoskinson shared with U.Today how he sees the crypto market in the long term and what we can expect from Cardano next

Cover image via U.Today

Charles Hoskinson, founder of Cardano and CEO of IOHK (Input Output Hong Kong), is one of the most famous and notable people in the blockchain space. Last week I spoke with Charles about the current situation with the market, the biggest news regarding Cardano, and which projects he finds the most interesting. We also discussed who Satoshi Nakamoto might be, if it's possible to find out with complete certainty and how significantly our world will change in the next 50 years. The discussion was so fascinating and dynamic that I decided to publish this interview in 3 parts. This is going to be the first one, where we are talking about the situation with the crypto market during the Coronavirus pandemic and the long-expected Byron reboot release which will be deployed on March 31. Let’s dive into it!

U.Today: So, the market is bleeding. Some analysts say it’s time to buy more crypto, while some say people should only trust cash. There are different opinions, we've all seen them. I’m wondering what your personal thoughts are on the situation. What move should we expect from the Bitcoin price? What about Cardano and the market in general?

Charles Hoskinson: Well, if I was capable of predicting the markets, I'd be a trader instead of an engineer. So, I tend to stay away from price speculation other than talking about broad trends. So, long term I feel that crypto is a significant asset class. First, because it's preferred by the young. If you look at people under the age of 30, they're significantly more likely to hold cryptocurrency than a stock or bond. Second, because it's a hedge to the way the global banking system works. If you have fears about a global recession, if you have fears that banks will become unstable or central bank monetary policies are bad in your country, or a broader sense, then buying Bitcoin or crypto is a hedge against that. So, given those two factors, it seems that we will always see a capital inflow into cryptocurrencies, meaning they're always going to have value. The problem is that cryptocurrency markets are not stable. They're very thin, they're traded on exchanges that have a reputation in some cases of faking volume, and also there's a lot of Black Swan events in these projects and these projects are more motivated by events than they are by macroeconomics, like the oil or the coal industry. 

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A week ago, the Dow Jones was collapsing after the president announced a state of emergency and then crypto collapsed and Bitcoin lost more than 50% of its value. This week the US stock markets are still falling, yet Bitcoin has gone up 30%. So, you know, the same circumstances with coronavirus - in the case of the equity markets, it's collapsing them, and rightfully so, because the fundamentals are no longer sound. And in the case of crypto, they've moved in both directions on the same news event. So it's super hard to predict these things in the short term. But in the long term, I think our industry is quite solid. Most of the top 15 - top 20 cryptocurrencies are extremely well-capitalized. The workforce isn't going anywhere. We see more adoption every year. We see better infrastructure every year, and better protocols every year. We also see greater global demand move away from cash. So, that means paper money is going to die in the next 20 years.

Digital currencies are here to stay. I think these factors give us a long term prognosis of being very bullish. But in the short term, it's just so volatile and unpredictable. It's hard to know where the price is going to move, at least from my perspective.

U.Today: You recently said the Byron reboot release will take place this month* (*at press time, the date of the reboot has been announced - March 31). The release will make connecting to the network much easier, reduce sync times and enable faster restoration. Once the Byron reboot is out, the release of the Haskell Shelley testnet will be announced. Can you tell us more about that?

Charles Hoskinson: Right. So, internally we're on a two-week release cycle and so we have sprints. Each sprint has a series of things that we need to do. And if we get everything done, we ship at sprint eight or nine or something like that. If we miss a few things, it has to be rolled over to the next sprint. So what we're waiting for is to see how diligent we are getting everything done in each of those sprints. 

Charles Hoskinson

Charles Hoskinson. Image via forum.cardano.org

So, there are two major events. One is the shipping of the Byron reboot, which shares about 80% of the code with Shelly's, meaning that once we hit that milestone, we're more than 80% of the way to Shelly. The second is the shipping of the Haskell Shelly testnet which means that state pool operators can actually start rotating their infrastructure from the incentivized testnet to the Shelley Haskell testnet, and that'll be basically very close to what we're going to launch the mainnet with. So, that infrastructure will work one-to-one. 

With a strong degree of certainty, we're going to ship the end of this month the Byron reboot. If it’s not the end of this month, it'll be maybe in a week or two, but it's a very strong certainty that at the end of this month we'll get that milestone. As for the Shelley Haskell testnet, at the end of this month, we'll have a significantly better idea of what sprint that's going to arrive at. Once we've done those two things, then we can look at our estimation, we can look at our velocity with the backlog and we will know with an absolute degree of certainty the release date for Shelly, because I have it on paper. I actually know when we think Shelly's going to launch, but that's an internal estimate and we've been a little bit bad historically with those things. We're being a bit more cautious with our release days. 

We have seen a massive increase in our development delivery time this year in particular. And most of the things that we thought were true have happened roughly when we thought they were going to happen.

It's important to understand how enormous this release is. We've been working on it for 18 months, and it contains tens of thousands of lines of new code. Every single line of code has been rewritten using very rigorous processes.

We also are writing specialized libraries for exchange listing. We remodularized the software, we rewrote a new Explorer. You know, we've done an enormous amount of work in a very short period of time, relatively speaking. 

So we've completely rebuilt the product. Hopefully, now that that's done, it'll be very quick for us to add things like smart contracts and governments and so forth, as opposed to going through what we went through rewriting Byron, which was just a miserable two-year process. The reboot is almost certainly coming out in the next two or three weeks. Then, shortly thereafter, the Shelley Haskell test will come out. I hope for April, but in the worst case, it'll probably be May. It's hard to know. So we'll announce that date when we announce the Byron reboot.

Cardano Community

Cardano community. Image via @Cardano

U.Today: That’s great news! Do you maybe have a surprise announcement regarding a new big partnership? 

Charles Hoskinson: We've worked with a lot of entities, but I don't have any particularly large entity at this time that I'm going to announce.

I mean, we have a great relationship, for example, with New Balance. We have a great relationship with PWC. We have a great relationship with a lot of Fortune 500 firms, at least in that our people talk to their blockchain people. We're the largest scientific research lab in the world for cryptocurrency.

So, every single industrial research group that does cryptocurrency research and development cites our papers. In fact, our GKL model has been cited almost 800 times by every one of our competitors and by all the Fortune 500 research labs. So, through those channels, we certainly have great relationships. In terms of commercial relationships, the challenge with big partners is that you can't really fully integrate with them. 

They'll usually run a pilot on your system, but more often they want to control the IP and they want to control the implementation so they deploy it themselves. So we tend to focus a lot of our commercial efforts on the SME side, the small to medium-size enterprises, where when you create a partnership, it's a true partnership, meaning that we deploy and get them onto our infrastructure and there are consumers of that infrastructure, just like a small firm would be of Amazon web services or something like that. Those are much more meaningful relationships, they bring a lot of value into the ecosystem and there are barriers to exit because they don't have the ability to build their own infrastructure. 

To be continued...

About the author

Rimma has already worked in crypto media for 5 years. She’s an Editor at U.Today. She also worked as a Head of Social Media at Cointelegraph before. Her greatest interest is focused on the influence of opinion leaders on the crypto community, the latest blockchain developments, crypto adoption, and how all of this affects our daily lives.

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