[Messari AMA] Chris McCoy, Founder of Storecoin

Messari hosted a public AMA with Storecoin's ($STORE) Founder, Chris McCoy in the Messari community group. This is a transcript of the conversation.

Messari: Chris and Rag, thanks so much for joining to field questions about Storecoin and data tokenization. We have a lot of good questions in the queue, so this should be fun. Thanks for being here.

Chris McCoy: Great to be here, thanks for inviting us in Messari team.

Messari: Before we dive into specific submitted questions, can you give a quick summary of your backgrounds, why you built Storecoin, and an ELI5 explanation of it?

McCoy: Chris McCoy has been building payment, social, and data system since was 19 (36 now!). Started building with Bitcoin as a native payments solution in a social networking system in 2013. By 2014, realized that data could be represented by a private key and that realization could change computing. Tried to build it with Bitcoin but failed due to costs, time, and issues with Bitcoin scripting. Left the p2p space but came back in 2017 with a vision for zero-fee, programmable, p2p payments inside the application layer. This is how STORE was born.

Rag -- Storecoin's CTO and chief architect -- has been working with Chris for 8+ years. He's a distributed systems engineer by trade who has helped scale systems at Apple and Cisco. He's also helped architect machine learning and finance platforms.

ELI5 on STORE

Storecoin is zero-fee payments and p2p cloud computing blockchain that will transform data into money (into datacoins).

There are four types of commodities today:

- Metals

- Energy

- Livestock and Meat

- Agriculture

Data will be the fifth. STORE will incentivize and secure this datacoin economy. By default, all data will be encrypted and anonymized.

Messari: I've broken down the submitted by general topics, but I want to start with a few general questions. First, something you answered in part just above:

“What is the idea behind tokenizing data? How is it different than any other type of token?”

Second:

“Your name implies a commercial-goods application, however you are aiming to be a data marketplace. Consider changing your name to something more data-centric?”

Third:

“Why isn’t there a white paper?”

And fourth:

“Bitcoin is to gold as Storecoin is to ____?”

I realize this is rapid fire right from the start, so take your time and I won’t ask four at once again. Haha

McCoy: Let's start with the whitepaper question. We've taken a research and validate approach to designing the Storecoin p2p economic network. Throughout time, we've released various *papers* communicating the latest state of our research (green, orange, pomelo, and now the Litepaper).

We'll release a formal technical whitepaper once we're through research, validation, and build. As part of this journey, we'll be opening up our research for peer review. You can see the beginning of this with governance here. You can also download and read our just released Litepaper. Please email us with feedback -- [email protected]. We're also beginning to open up our research around our BlockfinBFT consensus algorithm here. We'll be opening up A LOT of research in Q3 and beyond. There's a lot of cool stuff planned here.

Re: Why the name Storecoin? Store your data. Spend it and build with it like a coin. STORE is the unit of account for this datacoin economy. The zero-fee nature of STORE enables the trading of data to be down to nano-transactions. 1MB of data might equal $0.00001 and that's a frictionless transaction on Storecoin.

Datacoins are backed by data, a valuable asset. The base layer STORE token incentivizes and secures this datacoin economy. Tokenized data allows tokens to be backed by data, instead of just speculation as in ERC20 tokens. If data is the new oil, tokenizing it allows to represent its value in tokens. We call these datacoins.

Bitcoin is to gold as Storecoin is to data. We believe that as data becomes more classified, labeled, and structured, it grows in value. A dirty secret of machine learning is that 80% of the work is cleaning, labeling, and structuring the data for the algorithm. STORE is incentivizing developers to structure data in a way that is immidietely valuable for machine learning, AI, and IoT device-based developers (and companies).

A second order effect for data structure at scale is discoverability. Imagine trying to find that unique product on eBay without all of its associated metadata which helps filter search results. We believe the same for data (in fact, we think STORE is incentivizing an "eBay for data and streaming APIs" to exist).

Finally, our core thesis for why a developer will build on a tokenized (open) cloud over a public (centralized) cloud like AWS is simple: If data in an open, tokenized, and programmable state (STORE) is more valuable than data centrally siloed in a developers cloud (AWS), then developers will build on a decentralized cloud. How we get there is a) being competitive with AWS on storage, compute costs and b) enabling the discoverablity, trading, and streaming of data. We get there by enabling data to become a tradable (and programmable) commodity.

Messari: A lot of data is circulated and consumed for free now though, which makes this question interesting:

“What incentives do data consumers have to start paying for data via a tokenization protocol like Storecoin when the status quo gives it for free?”

McCoy: It is more of consumers "taking control" over their data, which is nearly impossible now. When data is tokenized, every access to the data is transparent. So, if data created by consumers is valuable, they can demand to get paid because of the transparency that is made possible with datacoins. One last thing on our belief that open and tokenized data will be the foundation for the next platform shift in computing (h/t to Placeholder for the graphic, that we revised).

Messari: We have a couple questions about Storecoin’s stance on initial coin offerings. First:

“If regulations were different, would you do an ICO?”

And second:

“What does it mean that you’re committed to an “anti-ICO” approach?

Can you answer these questions but also speak to your thoughts on this issue more generally?

McCoy: No. ICOs aren't compatible with building for the long-term in a transparent way that also helps you build a global community along the way. We've believed from the genesis of the project that the *only way* we would credibly build in the p2p space is to do it where our team's incentives are a) spread out over the very long term (Rag and I vest for 8 years for example) and b) we'd commit to Milestone Token Offerings (MTOs). An MTO puts a tremendous amount of pressure on our team to execute, 24/7. If the community supports our work, they'll fund us for the next set of milestones. If they don't, then they won't.

We're committed to building for the long-term in a transparent way that allows us to build a global community around our research as it unfolds. We want this to be wired into the cultural fabric of whatever Storecoin becomes in 100 years. It has to start with us, the framers of the p2p economic network.

Messari: One more regulatory question unrelated to ICOs: “How do you propose to ensure compliance in the EU with the new ePrivacy policy that is in the pipeline alongside GDPR?”

McCoy: We'll be using a "shared responsibility" model where Storecoin and the app developers are jointly responsible to ensure compliance. This is in line with standard practice with cloud providers. For example, Amazon's model.

Specifically: Storecoin by default enables the encryption and anonymization service for sensitive information. This is a very good start because most of the GDPR compliance issues are about data safety and user privacy. At least one Storecoin Cloud Market will have an EU presence for data storage and other requirements.

Messari: We have a couple governance related questions too:

“Why isn’t the judicial role non-profit too?”

And:

“Any updates on the governance proposal peer review?”

McCoy: It’s a very good question and something we will explore in a more public forum shortly. I personally can make two arguments for it but this is an area that would be exceptional for public discourse and discussion.

We’re gearing up to open source all governance research (while establishing a D.C.-based research office, hiring a head of governance research, establishing a governance research presence in the EU, etc).

EXCLUSIVE: Here’s our not-yet-released news release on open sourcing our governance for global public peer review (and discussion). We're launching Phase Two of open source governance today. Check it out at and please join us here.

Messari: I want to switch to a few protocol- and application-specific questions. First:

“How is it determined who can be a node if the number of those who want to exceeds the max number allowed by Storecoin?”

And second:

“Block size – in light of the testing results I saw, are you going for the optimal variable range of 100-500 bytes? In order to keep TPS optimal, etc.?”

McCoy: The settlement transactions will be in this range. The settlement transactions include both payment transactions and handoff transactions from the platform to the settlement layer. An example of the latter type is when an app instance executes to produce some data. The data is stored by the Messagenodes, who generate a proof-of-storage, which is enveloped in a settlement transaction for the storage proof to be written to the blockchain.

The story of "decentralization" must start with a decentralized way to select who the nodes are. Towards this goal, we are proposing a process called, "Know Your Voter" (KYV) where all participants, who don't know or trust each other, will build that trust in a series of trust-building steps. This is the process by which participants verify each other's identities. Among the identity-verified participants, an auction will elect the number of nodes allows in a given phase. Note that Storecoin or any centralized/decentralized identify verification entities are NOT involved in the KYV process. This is complex, but we believe this is the right approach. We'll be releasing the "Achieving decentralized trust in a p2p economic network" research paper and technical spec shortly.

It's the foundation for a governance of one entity, one vote -- or a p2p democracy. In STORE governance, it's the miners (messagenodes and validators) who are the voters. They vote in the bicamel Decentralized Branch ("dBranch") similar to Congress.

Messari: A couple higher-level comparative questions:

“Who are your competitors and how do you compare with them? What is your edge?”

And regarding apps on Storecoin:

“What is a tokenized app on Storecoin, and is there a difference between “tapps” and “dapps”?”

McCoy: Here are two graphics providing a high-level of how STORE compares. For more granular data looking at our settlement layer vs other major protocols, check this out.

A "tokenized app" is any data-rich app that opens up its data on the Storecoin p2p cloud. A tApp can be a complex, webapp. This is in contrast to a dApp which is mostly a smart-contract based app.

Messari: One more technical question:

“Is there provision for privacy and anonymity for transacting parties within the data marketplace? If so, what tools are deployed for this?”

McCoy: Our workflow is that the app instances running on Storecoin identify and categorize any sensitive information, such as personally identifiable information (PII) or a trade secret. Identified sensitive information is encrypted at rest as discussed above, again depending on how the apps are provisioned and their relationship with their users. It is possible that certain sensitive information is never discovered in the marketplace by data buyers. Others, based on the data categorization, will go through the anonymization engine before the data is allowed access to. The anonymization scheme is context-sensitive, so the same sensitive information can be anonymized differently based on who is allowed access to and the type of the access. For example, a company can share the billing information of a user with a partner, where the billing address is not anonymized, but if the same user information is shared with an advertiser, all sensitive information is anonymized.

Messari: To wrap up, I have a couple forward-looking questions about Storecoin growth. First:

“Are any projects currently building on Storecoin? Any partnerships?”

And second:

“What will Storecoin do in the rest of 2019?”

McCoy: The short answer is we'll release the zero-fee Storecoin settlement layer first. Our miners who will secure the protocol and attempt to ratify our proposed governance are our first "projects building on STORE". As the p2p cloud unfolds, we believe early adopter developers will make decisions on the axis of economics and governance for what decentralized infrastructure to build on. Mainstream developers will decide on an axis of economics, usability, and speed. Storecoin can win on economics and usability (zero-fee primitive) while competing on speed/performance.

On the partnership front, we're in conversation with several of the larger enterprise companies about building on STORE and also mining the future of the open internet. The same with PoW miners around the world. There is tremendous excitement to mine datacoins.

In Q4, we'll begin an effort to formally bring on Fortune 500s and even governments as potential miners on Storecoin.

Roadmap:

1) Open source and build a global community around governance research.

2) Prepare for testnet launch for the settlement layer.

One more thing: By default, all data tokenized on the STORE cloud is anonymized and encrypted. This will be enforced by governance. Philosophically, we believe this is table stakes for the future of the open internet.

Messari: Thanks so much for your time, Chris. This has been super informative and enjoyable for me and everyone else here. Thanks for your time!

McCoy: Thanks for the opportunity, Messari. Our entire team and community at STORE really appreciates it (plus it finally forced me to install the desktop version of Telegram). Join our growing community on Telegram.

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