Konstantin Richter, CEO and founder of Blockdaemon, and Chris Sharp, Blockdaemon's CTO, discuss Blockdaemon's journey, the evolving belief in cryptocurrencies, the importance of decentralization in crypto security, and the diverse regulatory landscapes in the crypto industry. They also explore the difference between institutional and self custody wallets, the evolution of institutional involvement in crypto, Google's avoidance of cryptocurrency mining, and the importance of decentralization in the crypto community.
Blockdaemon aims to provide robust and reliable infrastructure for the evolving crypto market.
Blockdaemon recognizes the importance of regulations in the crypto industry and anticipates increased institutional inflow of assets as regulations mature.
Blockdaemon emphasizes the balance between decentralization and network functionality to ensure high network performance and minimize single points of failure.
Deep dives
Block Damon's Founding Story and Institutional Focus
Block Damon was founded in late 2017 with a focus on providing professional node infrastructure for crypto projects. The company aimed to solve the problem of running Ethereum nodes for ERC-20 token launches. From the start, Block Damon had an institutional focus, raising funds from investors like Comcast and Bolstard. The company aimed to be a B2B SaaS software provider. Block Damon experienced challenges during the market collapse of 2018, but remained committed to their long-term goal of providing infrastructure for institutions to connect with crypto networks.
Block Damon's Evolution and Product Suite
Over time, Block Damon's product suite evolved to include staking and an institutional MPC wallet architecture. They became one of the largest node operators in the world, running over 150,000 nodes across different data centers. They also developed a singular node stack to connect institutions to the crypto universe. Their vision included providing read and write capabilities to pull data from ledgers and submit transactions. They also focused on offering institutional MPC wallets and integrating them with customer wallets. Block Damon aimed to provide a seamless platform and infrastructure for institutions to access the crypto space.
Importance of Institutional Adoption of Crypto
Block Damon recognized the growing belief in the crypto asset class among financial institutions. They viewed it as an important asset that needed to be serviced by the industry. The increasing adoption of digital assets by institutions led to a shift in focus for companies like Block Damon. They aimed to provide infrastructure and services to institutions to enable them to offer crypto assets to their customers. The company saw a future where crypto would revolutionize the financial system and aimed to be a part of that change.
Challenges of Regulation and Market Cycles
Block Damon acknowledged the challenges posed by regulations in different territories, such as the US. They recognized the need for clarity in regulations to enable the growth of digital asset infrastructure and services. While certain regions like Asia and Europe had made progress in regulatory frameworks, the US faced its own set of challenges. The company anticipated an increase in institutional inflow of assets as regulations matured and clarity was established. They also expressed excitement for the upcoming crypto market cycles and the potential for increased stability and volume, which would benefit their business.
The Role of Block Damon in Network Decentralization
Block Damon discussed the concept of decentralization in blockchain networks. They emphasized the importance of minimizing single points of failure and achieving high network performance. While running a significant number of nodes in a network, they aimed to provide professional standards and expertise to ensure reliability and reduce the risk of failure. They believe in adding to the quality and robustness of networks through their institutional-grade infrastructure. Block Damon's approach seeks to strike a balance between decentralization and network functionality, acknowledging the trade-offs involved.
On this episode of FYI, we dive into the intricacies of crypto infrastructure with Konstantin Richter, the CEO and founder of Blockdaemon, and Chris Sharp, Blockdaemon's Chief Technology Officer (CTO). They cover Blockdaemon's journey, highlighting the challenges and opportunities in the early crypto market. Konstantin and Chris share insights into the evolving belief in cryptocurrencies like Bitcoin and Ethereum, reflecting on their growing acceptance in mainstream finance. They then discuss developing Blockdaemon's product suite, transitioning from basic node operations to sophisticated services like staking and Application Programming Interface (API) integrations. The conversation explores the importance of decentralization and multi-party computation in ensuring crypto security, emphasizing Blockdaemon's commitment to robust and reliable infrastructure. Finally, they touch on the diverse regulatory landscapes in Asia, Europe, and the U.S., exploring their impact on the crypto industry and the future possibilities in this rapidly evolving sector.
"Not a lot of people saw the benefit of like, ‘Hey, why do I want to pay someone to do something? I can just download some open-source software and run on the server myself’. Even if it's janky, the requirements in the network and expectation around crypto was low enough that people weren't like, ‘Hey, I need to make sure there's instant settlement that my transaction goes through.’” - Konstantin Richter
Key Points From This Episode:
Origin of Blockdaemon
Unique challenges in maintaining and operating crypto infrastructure
The importance of multi-party computation in crypto security
The evolving belief and adoption of Bitcoin and Ethereum
Decentralization and resistance to censorship in crypto
Blockdaemon's impact on crypto infrastructure
Acquiring a wallet company, Sepior, and its implications
Blockdaemon’s product evolution
The importance of reliability and distributed computing in crypto networks
Perspectives on the evolution of the crypto market
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