Wallet and Abstraction Technologies: The Future of Cryptocurrency
Hey everyone, wherever you are. I hope you're having a wonderful week so far. We have the latest episode of The Inside Crypto Show, interviews and discussions with regular people just like yourselves. Today we are joined by Michael Elli, who's the c e of Ethers, Bott, and all-in-one e v m compatible framework and a very much needed game-changing innovation in cross chain as a transfer, as in web three user experience. That was a month for I'm so glad we have Michael on cuz we've scheduled this like pretty early, like maybe a month or six weeks ago it finally happened. Michael's been actively involved in the space since 2016 as an experienced campaigner within the FinTech industry, coupled with previous startup exposure.
He's got a lot of things that we're gonna be interested in hearing and love talking about today. Michael, thank you so much for making time in the afternoon, especially because it is a bit chilly over there. Tell us about yourself. Thank you. You said a mouthful. Experience multi chain crypto
web three. I surely that's just easy. Everyone understands that. My name is Michael Mak. I am CEO E of Pillar project and er sport. And. Before, I suppose I'll give you my background a little bit before I get into crypto. I used to work for financial institutions, investment banks,
and so forth in the city of London. Most of my career, I was working on providing market data and market risk areas and straddling the technology slash finance area, providing technical solutions where I have to understand the financial side as well as the technical side. And that's basically how my career was progressing. And around, I think 2011 ish, I decided to set up a startup in an emerging African market.
Then within this process, I was also an avid follower of the Bitcoin era and that sort of stuff, and. I actually managed to get my hands dirty in 2016 where I was involved in a hackathon. That led to us collaborating with a few other projects, and I ended up working with a bunch of guys on a project called Pillar Project, where we went through the I C O era and raise funds, and then somehow that gave birth to eat sport. I guess I have a bunch of questions. What is that thing that prompted you to get interested in Bitcoin? Because that's the thing I've been racking my brain to find out the first time I've heard about Bitcoin and I can't pinpoint it.
Okay. And, but I thought the whole idea of having a decentralized mechanism where, A third party does not decide whether I should have an account, whether I should be sanctioned, I being the bank, so to say, having the self sovereign independence. I think that is what sold it for me more than anything. The stability for me to be as an individual. Yes, you can take me out of your system for whatever reason. Because it can be hacking. It can be so many reasons, but I can still have my assets. I think that is fundamental importance for me, the decentralized nature
where no centralized entity is getting it. And I'm speaking for myself here, but maybe this relates to you, ? I mean me growing up in South Africa as well, especially right now, ? South Africa is going through a huge power crisis where my mom was telling me on the weekend some parts of South Africa, you don't have electricity for. Three days at a time, ? And again, this is a long story behind it, but can you imagine living in a place where you don't have access to your money for three days, but lots of African countries are like that, where you can go to an at m you can't use your bank. There's this corruption, there's issues with the government, as you mentioned, gating off your money.
I feel like a lot of cryptocurrencies is, it relates to people who grew up in the, quote unquote third world. I hate to use that term, but But I think like speaking to people in England or America or the Europe, right? I feel like they don't have the connection that people in Third World might have. And why do you think that is? I think that's a valid point when in certain countries where they have a better working rule of flow , there is no place where you would say it works perfectly, at least in my opinion, but a better working rule of flow. They have more chance of not experiencing the trials and tribulations where some corrupt official decided you've, for whatever reason your business R has paid them off and they've decided to freeze your account. I'm sure in the developing nations, this happens quite a lot. Whereas we've seen in the Western nation, say in the UK, where your bank account gets frozen while you are conducting a business and you ask the banks, no, we've frozen you for whatever. Now if you go and search it
on the internet, you'll find all those. So what if I own my own assets and you can't freeze me? To me, That is fundamental. Yes, there are alls of sorts of other things that come with it. What if I don't want to be my own bank? Because being your own bank entails that you have to take responsibility. And what if I make a mistake? How do I build myself out? At the moment, I phone up the bank and say, my account is, look, can you just fix it for me? That may not be possible when I have my own bank, but at least I have the choice. I have the choice to do that. And that opens up a lot of other choices. Think of other
things you can build on this infrastructure where I can own my own data as opposed to my data being given to whoever, whichever entity is giving me free access to their social media account or whatever free service they give me, but they own the data and I'm commoditized and I'm the product instead of. What the product that they're selling, say, if you look at the social media companies, they form my data and they sell it. So my behavior, what I look at, what I click on makes me the product. But even though I'm being the product who is in the Big Brother house, which every movie is being televised, okay, then maybe share some of the profits with me.
But ultimately, going back to the Bitcoin, We've mentioned that is the beginning of this change in paradigm, in the way we see and utilize the internet. That's true. Do you think we'll ever get adoption up in Western countries? Like the states like Europe, like other parts of the world? Our is Africa and the developing world gonna be leading it? I suppose we have to separate the payment from the infrastructure, the data side and et cetera. Cause when you think of the crypto payment, it could be a niche, but you would think to yourself, which central bank and which banking conglomerates would be happy for people to use. Payment infrastructure that's not controlled by them. Let's assume for arguments sake, this thing works so fast and you can settle payments just quickly and everything and it's cheap. But the stakeholders that are the dominant forces right now, it is not in their interest to do that. Cuz if I'm a central bank, why would I wanna give you the control where I
do not set the fiscal policies through? Controls that are within me in terms of adjusting the interest rate and allowing which sector gets loans and all sorts of things. At least logically it may not happen even in the smaller nations. But you can see though, it brings another alternative. It brings another alternative in terms of. Maybe you can hedge some of the things you do.
Say if you are a developing nation where you are hard up for foreign currency and you have to export certain amounts of, say, coffee or gold or whatever natural resource you have, and you can only bring in X amount and you have a lot of imports, what if you allow some of your creatives in your nation to get paid in Bitcoin? You are effectively. And what if then that Bitcoin is being used to buy things from other nations? It means you are little bit hedging your foreign currency reserves requirements in this case, but I'm not an economist there. That's an amazing example. I've never heard of anybody talk about that.
And we do know Sri Lanka is a good example of, OR nation that's struggling with foreign currency reserves. Egypt, Ghana is another example as well. Lorded them. Yeah. Wow. I've digressed, but I think this also connects to something related to Eithers Spot, at least down on the questions for today. But we are here to talk about Ethers Spot. I've of course done the research as I usually do before the podcast, but for our audience, for our listeners, do you wanna tell us a little bit about what you're doing with Ethers Spot? Yes. Its Sports is a company that makes it easy for anyone to use Web three You might say, what the heck is web three? You just used web three, and yes, we do know the internet as web one, web two, web three, but if you really break it down, the first version of the internet, it was read only.
You can read things. You can do things. Oh, I can read the news. I can buy things, E-commerce and et cetera. Then the second generation, Became, ah, I can actually crowdsource my data.
I can have an opinion. I can upload my TikTok, I can upload my YouTube, I can upload my Facebook, my tweets. I started interacting with it, influencing, and the third iteration would me. I can do all those, but with me controlling my own data, I touched upon it at the beginning.
When I'm tweeting, when I'm YouTubing, when I'm Facebooking, and all sorts of other crowdsourcing data, I'm contributing. What if that data stays controlled by me and those that want to use advertising and run algorithms on those, they share some of the revenue with me if I choose to share it with them. That's where Web three becomes. At the moment, wave three the well-known aspects of wave three are defi and NFTs and those transactions involving sending.
But this is the next generation. This is what is going on. So EcoSport in the defi world and over the NFT world, what we do is we try to abstract with the complexities. Of doing these things, cuz at the moment if you want to do something using the wave three or the crypto space, you have to have quite a lot of things you have to do. You have to know about, oh, I'm using a wallet, I'm using this gas, I'm using this specific network. Then when I send it, I have to approve it and I have to sign this. I have to sign that the average person doesn't care. My argument is if I'm a pit side delivery driver, I've
got a long day and today I was particularly lucky. I made $40 in tips and I thought, okay, my $40, I've heard about this defi thing, and I heard they make multiples. Let me go and invest my $40. So they call staking. Then they say to me, oh, you have a wallet. Oh, do you gas me this? You convert this to this token, convert that without token, by the time I'm done, it's bedtime and I'm nowhere near to doing it.
I'm not going to come in from work and study how your system works. I'm an investor, so that's the whole point. That's why we are trying to use this account abstraction, we call it, to abstract the way, the mechanism you connect to a specific wallet sort of thing, so that then you own your own data, you control it, but we make it easy, almost similar to the existing web. Which is web two style.
So would the web two style, ? Does that mean it's like when I'm logging into Google, right? It's email password, maybe one time password sent to my phone. Are we talking that level of web two or what's the equivalent? All of the above and more. Oh, nice. It depends on your choice. You can choose to say no. I want to use a specific wallet and I want to use this wallet to connect. And you might say, no, I can't be asked. I've
got a Facebook id. Can you, can I use my Facebook or my Twitter id? You can use those as well. Nice. You can use those and login. Obviously what matters is see, as a user, if I'm transacting, say if I'm going to a betting site and betting $10, $5, I have no problem using. My social login, and by the
way, $10, $5 because I live in the uk, I can live with that, potentially someone living in one of those developing nations where the per capita income is $900. They may care a lot more about the $10 by the way, but at least from my perspective, if I'm doing $10 $5, I have no problem using the social login. However, if I was transacting a hundred thousand dollars or more than that, I care. I. Hence, I may not use my social login because my social login is as good as the Facebook server being compromised. And they say to us, there've been a hack on the Facebook server and 5 million passwords were compromised. I don't want to risk my hundred K on that, but there is the two FA
and the pasky, which is pasky is a new thing that phones have embedded within them. There is a spectrum. Of where, how I want to log in, depending on the security I require for that specific engagement. Yeah, all of the above and more. People who are, have made it up to the podcast up to this point, ? There might be developers, there might be people getting into crypto, ? Let's talk about developers, ? So they're like, okay, this is interesting. I'm working on a project at
the moment. I need some wallet integration. What's their first step? Do they go to the Ethos Park website? Do they heat up your sales team? How do they get started? Many ways to do, you can go to Ether support io and. Then you have a section within there that says, register your interest and ourselves, team will get back to you. If you feel like it, you can just go to our documentations and just pick it up and get on with it. The
whole point is we have created a few ways for developers to engage with us. Number one, we've created an SDK in this sdk. You can just look at the documentation and integrate the software development kit into your DAP or services. The next one is, the easier thing we've created is a widget. A widget that facilitates cross chain communication,
and I'll come back to cross chain and demystified a little bit later on. Cross chain communication where you can seamlessly abstract away. The complexities in going from one chain to another chain, from one token to another token without the user being exposed to do it. Just like as I live in London and if I was to come to Hong Kong and use Uber service right now. Uber doesn't say to me, oh, because the driver in Hong Kong is getting paid in Hong Kong dollars. Decide the list of exchange. Please swap your British parents
to Hong Kong dollars. Except, guess what? Uber app doesn't say that to me. Uber App handles that in the background. Just magically the driver gets paid. That is what effectively it sport is doing. When you're going from one chain to another, when they, there are different tokens involved, the user shouldn't be bothered with that. The user has X token. We will handle it in the background, the conversions, and settle it on the other side for you.
So that's what the widget gives you. The third one is we have this tool set called Transaction Kit. It is a React library, the first of its kind where if you have a DAP developed using React, then this kit would just generate account abstraction code for you, for your ui, your React ui. So even Web two guys can benefit from this converting their website into web three. So we have three ways of engaging. Think of it this way, again, I'm just giving you real easier example for those of you who understand a little bit about computing. Imagine when you use Twitter, when you load up a picture,
it says, oh, to load up a picture at Twitter, it connects to our Oracle database. When you retweet, let's say for arguments sake, it uses SQL Server database in the background, and Twitter said, oh, don't worry. When you retweet, we use the SQL server. And when you do another action, we do MySQL. Can you imagine then Twitter saying that to you? And on the menu when you're just about to, rewet says, please select the database you want to use. That's where the wave three is at the moment. In that when you connect there are in an excess of 90 e even e VM chains. E V M means Ethereum virtual machine. And one of the popular development
was developer friendly and active developer communities around the Ethereum. Blockchain and the Ethereum virtual machine has been used by other. Chains, we call them layer one chains around 90. All of them use this because it's a vibrant ecosystem. But what that entails is though a community that is a specific tab that is deployed on no chain is just a silo. It's just like it's on Oracle on this one, and the other one is on Polygon. It's a silo.
But as the example I gave you, when I use Twitter for all intensives and purposes, they might have different databases, but as a user I can't care less. And as an entity, they don't subject me through that experience either. They mask it. So why shouldn't the same thing apply for the blockchain ecosystem? Why do I need US user have to know, oh, this is this blockchain. That's what cross chain means. Say if I have a stable coin called U S D C on polygon, and if I have, as I said,
$10 worth, and if I want to use that say on Nosis, I have to cross it over to NOSIS to get a version of U S D C on. Because these are separate realms. So cross chain entails that. So what we do is the user shouldn't be. Exposed to the details. Let's mask it away. Yes, you have to move it from one side to the other side, but at least let's abstract it away. So that is what cross chain entails. And multi chain existence means, the current trended, popular adapts.
They have to deploy on every chain. So it's just like saying, oh, this is the Twitter version for Oracle. This is the Twitter version for SQL Server. Come on, gimme a break. That's just so nineties so that's what multi chain means. . Thanks for that explanation, Michael. I'm sure you get asked this a lot, but I was asked
this before as usual audience questions. They were like, okay, Michael, you're not the first person to talk about cross chain. What about the security? And I think that's what a lot of people are still worried about. We know this week atomic Wallet was hacked for 35 million. One guy I lost 8 million alone. Again, not necessarily related to cross chain, but that impact of hacks and security issues is still something that sort of clings to crypto's reputation. Yes. There have been a lot of security leaks and when I was saying to you about being my
own bank and there are some issues with that, I can give you further problems with it. What if I lose my keys? Who will bail me out. And we've heard of people who throw away a hard drive that contained millions dollars worth of Bitcoin right now.
So yes, being self-sovereign and owning your own assets comes with the price. And in that, that prices, you are left on your own. That's why, again, with this account abstraction. Move. We are trying to address that. What if I have the ability to do multiple recovery in that if I lose my phone, I can recover through my machine, or I can recover through a nominated person that.
I can use, what if I can actually have a two FA and recovery through the email various spectrums that we are dealing with on the one part and on the security side. Then as you've said, hacks, let's come to the Bridges. The bridges, again. The current state of bridges effectively. The analogy I draw with bridges. Imagine give me a name of a bridge that you've crossed recently. , Oh God. They're all in Chinese we'll call the DA Home Bridge,
the Daton Bridge. Yes. Okay. Imagine you, you wanted to cross the data on bridge and as soon as you go, you get to the beginning of the bridge. There's a security guard and that says to you, oh, you want to cross? He yeah. He said, okay. Then Tass you and you are unconscious and puts your body in the freezer and phones up. To the other security clone. This guy and your clone goes out, runs around on the
other side of town, just having a happy time. Then the clone thinks he's new, does whatever he wants, and he wants to come back and goes to the other side and says that, oh, I wanna go back. Oh, you wanna go back? Then it phones up, get him out of the freezer and it takes him out. And this time the clone is not even going to be frozen. It's just going to be taken out.
Then you're back. Literally, that's how the analogy is, the bridging works. Lock it on this side, mint it on the other side or do something on this side. Send a message to the other side. So you would have something issued, but effectively it's your C clone
running around on the other side. So as things, then we do have this issue. Where hacks happen, either when you are about to send a genetic code, someone gets that and sends the wrong one, or someone faints that you've got a legitimate person crossing, but when no one else is crossing, then they will get another clone issued for free. But it's under communication quite a lot of the times. And as things go, there have been. Innovations in addressing these issues. Whether it would be some sort of consensus on the other side or having a liquidity, but in time they are being addressed. But this is a sore issue. It's an issue of having this different, real
existing, where I can't just be myself in the other real, because there are two different realms. So we do have that issue, which is being addressed then. And relatively young industry and as a side of the transparency, cuz when I used to work in the banks and when I went into the crypto space and I was looking down at the people and saying, amateur, they get hacked every other day. Then I started thinking, hang on a minute, how many of the codes are
written when I was in the banks exposed to the whole world to go line by line and find weakness in it and attack it? Zero because any code I've written is behind a demilitarized zone, then behind a proper mechanism to protect it and all sorts of things. So there was no chance in hell of my code being seen as aside. So when you think about it, even the behavior and writing codes and the transparency, the exposure that you have. It is an evolution on its own. So yes, there are security risks, there have been mitigated, and hopefully they will improve more and we would have better solutions out of this as well. Nice. I think that's a good answer. There's a lot of, as you mentioned there's a lot of good
things when it comes to transparency. If you're a person who's a big fan of open source, ? Open source has, its huge positives and also negatives as well because like you said, it is transparent. You can't see there. There are things like that, but you look at. Password managers, right? Like our last pass
was a big issue, ? They were a closed system, ? And then, they were hacked, their information was stolen. They're probably gonna shut down. And there was Bit Water, which is an open source solution, which does well. Anyway, we're getting in too much into the geeky side. Michael let's zoom out a bit. This is the hot issue in the last two days, and I think we'd be remiss, especially for the views and the downloads, if we didn't talk about it, the s e c has said they're gonna do finance, and everybody in crypto from like west to east just be like, oh my God. What are we gonna do? What's happening? The Prime Minister in the UK has been like, actually I think crypto's a good idea. So are you worried at all, when it comes to SPO on the pillar project regards
to legislation? Again, an interesting thing I will draw to you. I have, in my crypto life cycle, I have seen quite a few. Cycles come and go. And if I say the one of the bigger ones were 20 17, 20 18, crypto went up and went down. Then stayed down for a couple of years, the crypto winter skull, then it went up the defi summer, et cetera. Then NFTs came, it went up, then it went down again. Now with this, one thing you would see is with the current downturn.
It was led by centralized entities in the crypto space. FTX threes, just you name them, the list of companies that went down. They are all centralized entities in the crypto space, so effectively their banks and exchange effectively working like those in the crypto space. Not being treated like banks and exchange in terms of
the regulatory framework. It isn't a decentralized protocol going down just if what I'm saying is a bit too jargony. What I mean by a decentralized protocol is, In this space, you have computer programs, which we call them smart contracts that are deployed on machines, virtual machines that no single person can control. And once you deploy them, you cannot change them. And when
I say deploy them, you can deploy a whole market, a whole exchange. One go. So this exchange works in an automated way. They call them amms automated market makers. Now, with this, there is no human being or an entity involved. When I'm buying and selling the counterparty, the offers come in an automated way. Now the code rules on
this. If the code says I have X amount of exposure, if I don't add more deposit. My existing deposit will be dispersed or I'll be penalized, and that's that I can't phone anyone. I can't brown know someone. I can't call my mate who do something for me. It doesn't work like that. So in this cycle of the crypto winter, we have not seen any of these automated defi protocols going down. They have handled themselves in such a way where whoever. Needed to lose their loss to
ever was over collateralized , they were penalized for it, but the centralized entities, then they tell us, oh, with ftx they had a backroom with Almeda, and Almeda was their hedge fund. Then of course they would. So these are centralized players really taking advantage of, oh, this is crypto, this is new. Let's do whatever we want. Hacky things. In reality, that's what happened. So I'm not
surprised the regulators are going nuts about it. And now it's up to the regulators to understand and decipher the nuances in this. And recently, I did see three months ago, something I think from the Bank of England. Where I was surprised with the level of understanding that they had when they wanted to do a regulation on automated market makers, and they said, we can treat it like repo is basically repurchase every evening banks borrow from other banks for a certain percentage, then they pay back. Pretty much at the end of the night kind of thing, so we can treat it as such. So when I go and stake something on a defi protocol, they said, ah, we can treat it as such. But
one option they said, but we can either do that or the second option is that we don't treat this crypto as a financial instrument, we can just treat it as crypto, but with the same rules. And the third one said, but hang on a minute, just because I'm staking something and I get the staked value back, it doesn't necessarily mean I'm going to withdraw that. I'm just holding it to put it in the other one. So should that be a taxable event or should I
just treat the outcome then when I withdraw it? For the tax application kind of thing. So all that showed me there are some of them at least understand the nuances so that they're not stifling this innovation, not just in technology innovation in the way we practice because the banking world has been existing since the 16 something. When the Bank of England was set up when the king wanted to finance his walls and that kind of stuff. Do we need to just stick to that or should we evolve it so we, we are at a point of time where we see some evolution being made to this. So acknowledging this is healthy, nice. Michael very impressive so far.
I think you, you've talked a lot and we've gotten a lot broad. We've talked about Ethos Spot a bit. I didn't want to take too much of your time today. So before we end off today's show, I just wanted to give the floor to you anything that we haven't talked about Ethos Spot or the Polar Project. Any anything else? Pretty much. As much time as you want, as I told you I'm pretty free. Anything you'd like to mention? Plug as usual. Anyone who's listened right will know your ethos bot Show notes, your personal socials will be in the show notes of the podcast and the YouTube video as well. Click on those there, follow Michael there.
But yeah, Flores, yours, anything else you'd like to mention today? Thank you. In terms of the pillar bullet, we have one of the. Earlier wallets that use smart contract technologies, it has been around since 2017 and EcoSport was born out of this experience where once we moved the Pillar wallet to Smart Wallet Technologies and we realized, We can actually make this available to everyone else in the ecosystem. Then we separated the smart contract technologies and packaged it as EcoSport and made it available to everyone to consume. Now, this isn't just something we created today. We've had the background in doing this for the last. From 2017 onwards. So this is a battle tested system that we have where not only you can use for the account abstraction angle where you can make the journey of your users much smoother.
You can also do a whole hell of a lot more than. Meets the eye. For instance, a certain project is using its sport as a means of tipping discord. Communities tip each other without paying gas. Nice. And EcoSport gives you hell of a lot more than this account abstraction. But account abstraction is key to the mass adaption we all keep on talking about to get the next billion users, you cannot do it the current way we do where if I have to stake.
200 US DC I have on No into a project that is on Polygon where I have to sign nine times and I have to understand all the details. And I mentioned about the pizza delivery earlier on, I suggest, but really that is how unusable the system is right now. So you would benefit a hell of a lot from solutions like IT, sport. And please check us as in ether Sport io. Thank you. Thank you Michael. And I highly encourage people, as all people know that,
I might be a geek. I like to build computers and play games as well, but I know most people don't like to do that. And I love crypto as well, and it has not changed. I definitely did not start as early as you UI probably started in about 2018 or so, and. I feel like the usability is still not there. I still get questions from people who would
like, Hey how do I do this? How do I sign a transaction? So I'm totally on board with wallet abstraction, with abstraction as a principle as well. And I hope more people will take advantage of technologies that either Spott is developing, things like the Polar Project and the Polar Wallet. And thank you again, Michael, for making time today and hopefully we can catch up soon, maybe in a few months or so and see what's going on. Yeah. Can I add one more thing? You just remind, of course me. Because you are a gamer and
when you mention games, a lot of games are experimenting with web three. I understand a lot of the game players do not like wave three games are here. Game companies are looking into it. And from my understanding, games in Southeast Asia are incorporating wave three quite a lot. And if you are a gamer a game builder, Please, I implore you to check its spot out. It would make a huge difference to your users. Your users don't need to know and be bothered about
this is wave three, this is gas. We've got this integration where the user doesn't need to know and care about gas. Check us out if you've got games. Thank you. That's another good point as well. there is a web three game that I play, I don't have a huge amount of time, but I do play it every day. I'm not gonna mention it, but the transaction
cost, like that actually just takes out your immersion. And I'm hoping, as you mentioned, going back to the abstraction idea, going back to the no gas idea, that would be wonderful if I could just play this game. All this stuff , happens in the background and I just, Enjoy the game for it being a game and not have to be reminded, oh yes, I'm playing a crypto game.
Oh yes, I'm spending money every time I sync on the blockchain. So yeah, no, thanks for mentioning that, Michael. Yes, you're welcome. No problem everyone. Thank you very much. Hope you enjoyed today's podcast. Stay tuned for another guest next week as usual, ? We'll have someone very interesting. Michael was an awesome guest to have today. A lot of cool explanations. Check out his shorts on our YouTube channel on the TikTok channel as well. You may actually see him
on our Facebook channel as well for our shorts there. You guys are loving those on there as well. And then as I said before, we'll catch up with Michael probably in about six months or so. Awesome. I'll be more than happy to come back and report back to you guys. Thank you, Michael. Take care.
2023-06-19 08:56
