[Messari AMA] Paul Schmitzer, Head of Communications at Particl

Messari hosted a public AMA with Particl's Head of Communications, Paul Schmitzer in the Messari community group. This is a transcript of the conversation.

Messari: Paul, thanks so much for joining this afternoon to field some questions about Particl. We have some great questions in the queue, so this should be fun. Thanks for your time.

Paul Schmitzer: Thanks for having me!

Messari: I want to start with a bit of background on the Particl team and jump into some introductory questions about the project.

“What is your mission and what is your vision?”

“Can you explain Particl to me like I’m 5?”

Schmitzer: Sure thing. I can start with Particl's mission and vision. At our core, our DNA is privacy. And in this space, as you know, that includes empowering the individual. For mission I'd say Particl is fueling the new crypto economy and pushing Bitcoin’s original vision further to other domains. Not stop with the banks, but remove other unnecessary trusted third parties. Offer those services to the unbanked/ unmarketed everywhere in the world. This is why we started with the marketplace.

Empowering the individual means a lot of things, but for us it is the Right to personal sovereignty, right to privacy, and personal security. Dodge the data mining and data hacks.

As you are aware, missions can change as things get built, but visions should stay the same throughout. for Particl, our vision is Building the new infrastructure for the privacy-focused decentralized economy.

Messari: We have a bunch of marketplace questions we'll get into in a minute. Can you give us an ELI5 of Particl?

Schmitzer: Can I say for our eli5 can I say you need to be 18 years old to use Particl? Just kidding.

We wrote this one out ahead of time. It's a bit long, but simplified. Hopefully it is good for somebody unfamiliar with Particl.

So far, commerce on the internet relies on intermediaries in order to provide the infrastructure where transactions and interactions are conducted. Think Amazon, Ebay, Alibaba.

The intermediary owns the infrastructure in which the transactions take place. This infrastructure results in maintenance fees, commission fees and data ownership in favor to the platform owner.

Users are left with no choice but to comply, pay to transact, and trust the intermediary with the data generated. This empower those entities because they get a massive amount of money from each transactions, and get to know all about its users, which in turn allows them to have an unfair advantage over its buyers and sellers.

Particl is leveraging the best current technologies to change that status quo.

The inbuilt marketplace protocol combined with a buyer/seller only escrow payment network allow users to list, buy and sell items and services to each other end-to-end. Accordingly, all transactions conducted are fully private and only concerns the two parties.

With Particl and its infinite markets, users can offer their listings to the general public on the Open Marketplace, or trade 1:1 as well as within specific communities if they wish using this time the private offers.

But Particl is not solely a marketplace. It is also a privacy coin, using the same encryption protocol as Monero: RingCT. Except that it is on a Bitcoin Codebase and a very efficient private store of value, since the economic of the marketplace result in very solid tokenecomics. The big difference with a normal privacy coin is that the Particl Coin is also the fuel of its native marketplace.

Particl goes just as a step further from other cryptocurrencies. The Particl team was wondering why stop with getting rid of the banks, when we can get rid also of other big corporations on our trades, as such as e-commerce giants? And why not also “market the unmarketed”?

It will probably be good for the summary Messari does for the AMA. Simply put, we're a privacy project building privacy focused dapps on the blockchain.

Messari: We have some good general questions on other protocols and services similar to Particl...

First: “What other protocols compete with Particl? What makes Particl different?”

And secondly, a bit of a historical question: “Did Particl from is ShadowCash?”

Schmitzer: Good questions. I'll hit the first one first. PART is the privacy coin running on the network, so similar privacy coins with peer-reviewed cryptography algos such as Monero, Zcash and Grin/Beam would be competitors to Particl’s native coin. With top-level privacy coins there are more similarities than differences, especially related to the linkability/traceability of the coins. Each of these (incl. PART) do this really well, with cryptographic standards that can be reviewed and verified. PART has a completely different codebase than XMR - Bitcoin and Cryptonote respectively. PART’s codebase upgrades daily with BTC’s codebase however, something Zcash/Grin/Beam and 99.9% of other Bitcoin codebase forks don’t.

That means we get to play with the latest tech coming out of the Bitcoin camp and developers looking to build Dapps on Particl will be building on the latest and greatest code + top-level privacy enhancements.

Ask any dev if they would rather build apps on iOS 9 versus iOS 13.

Particl is also releasing our 1st privacy-focused Dapp (Open Marketplace) August 12th. This is a decentralized marketplace, so similar projects would be OpenBazaar/Raven, BitMarkets, BlockMarket (SYS).

One of the biggest differences between Particl Open Marketplace and OpenBazaar or BlockMarket is the escrow mechanism. Our MP only needs 2 people to do business - buyer/seller. No middlemen, no extra fees, no headaches. OpenBazaar and others have 3rd party moderator systems that are used when escrow is needed. This is a privacy issue and a completely wrong way to do business in a decentralized manner. Moderators are built for centralized systems like Amazon/Ebay where there’s a person you can call and complain to. Bringing mods into a decentralized system messes transactions up for the only 2 important people that matter - buyer/seller. On all the current decentralized marketplaces with moderators there is no accountability for them. They could never come back online and the buyer/seller have no recourse because a middleman is blocking the transaction from completing… and charging a 25% fee!

I'd be happy to answer more questions about our competitors and how what we're building is different or similar after you open it up to the general public.

Regarding the SDC question: Yes and no. They are 2 different projects, 2 different chains. Shadowcash (SDC) was a hobby project for less than half the current Particl team. A lot of Particl’s vision came from work on that project, especially related to privacy and what a decentralized economy could look like.

Development on SDC ended in 2017 and the team pivoted from a privacy-currency only focus to a private decentralized economy vision. PART has a different chain, different codebase version, different privacy enhancements.

PART began via a token swap only available to SDC holders so they weren’t left behind. The period to swap SDC<>PART ended 2017.12.31 (8 month period).

Messari: I think that's a perfect segue into some marketplace questions, which touch on a couple other competitors. We'll start with these first two:

“How does Particl marketplace compare to other crypto stores like Open Bazaar?”

“Why would Particl have any adoption at all when more well-known marketplaces / bigger communities such as OpenBazaar and Syscoin have had little to none?”

Schmitzer: Yep, sure thing. While OpenBazaar is a decentralized marketplace using external cryptocurrencies as a form of payment, Particl is a decentralized marketplace with an inbuilt, native cryptocurrency designed from the ground up to fuel its ecosystem and provide an optimum, private and secure experience for trading goods and services on its chain. All listings, settlement, communication, currency exchange and escrow services are either already built (or being actively implemented) directly in the Particl Network.

Particl is entirely decentralized. OpenBazaar entirely relies on third-parties to safely conduct transactions through a moderated escrow system, which means paying escrow fees and giving away your data to that escrow third-party. Besides, some people have been using this centralized escrow system to game the system, as it is basically a 2-of-3 multi sig deal. Particl instead uses a double deposit escrow system based on the MAD game-theory.

Syscoin is pseudo-anonymous, which is undersirable for e-commerce, due to chain analytics.

Why do you NEED privacy for running a decentralized Marketplace on the blockchain?

Privacy of account balances and transactions is an essential enterprise-grade feature and prerequisite, for many real-world commercial deployments. You don't want your competitors data mining a public blockchain and reconstructing your supply chain, flow of goods, pricing, balances, and relationships.

There are many reasons. Firstly, Tokenomics: Being Proof of Stake, sellers are encouraged to hold PART because they earn interest while holding the coin. This interest rate is currently around 7% APR but can easily go into the double digits and has in the past. Sellers being encouraged to hold part and earning interest on the PART they earn hopefully will encourage them to keep pushing for success on the Marketplace.

This is an incredibly seller-friendly platform. Unlike other marketplaces in which sellers often don’t even have control of their own listings. At all times the sellers ‘own’ their personal listings. No other seller can hop-on and piggy back on a successful product or listing.

Sellers and buyers can operate with complete privacy. This underlying feature protects sellers (and buyers) from bad actors seeing to data-mine them - ie: to expose buying habits or discovering a seller has a successful product and illegally copy it or undersell them. This will encourage many new product developers to take risks trying to invent new products/use cases and give them a marketplace to test the validity of their ideas. They will not have their ideas stolen as easily or quickly. Outsides/bad actors will not know the success of an idea unless they invest in developing it itself.

No third party mediation, no charge backs. Two party escrow compels buyer and seller to complete the sale. And neither has the power to manipulate the other. This can produce large cost savings for sellers, while also giving buyers power they have never possessed before to ensure they get the products/services sold to them. I would argue that it is WORSE to impose a human-moderation system onto a decentralized market (OpenBazaar, BlockMarket, etc) than having it in a centralized system like Amazon. At least with Amazon we have a number we can call. Both charge too high of fees for their services, but a centralized entity at least has a real physical address.

Messari: Two more general marketplace questions:

“What is the target market for marketplace? Who will be the buyers and sellers?”

“How far out is market management?”

Schmitzer: In the beginning the target audience is crypto users. (Metrics suggest during price rises increasing users are buying goods/services as micro hedges. Crypto users are looking for ways to use their coins and all of us are consumers. Crypto users also are familiar enough with downloading wallet software to store their money. Navigating in a marketplace Dapp inside a crypto wallet will be easiest for crypto users.

A soft pivot over time to advanced and hungry eCommerce sellers will happen with each new feature we put out. Sellers that are always looking for new markets and understand the technology and the size of these ecosystems. They focus on platforms the customers are at, but also are seeking to be more in control. A big shift in the target audience will happen when a mobile version of the marketplace is in the wild. A huge shift to mobile shopping is occurring right now.

Market management is the process of managing multiple private decentralized marketplaces, a future feature FYI. This is something being planned out right now.

The marekplace will launch with a default marketplace. We're actually holding a community competition for the marketplace key creation at the moment. One of those keys will be picked and merged into the code and that will be the default marketplace everyone will use. In the future, near future, users will want to shop on other markets and we need to have an interface to load other markets. I think at the moment we have over 40 marketplace keys submitted. Then, we'll have users who want multiple markets but only want to invite clients to them. That will be the final step for market management.

I can't give a timeline, but it will likely be the first feature added after August 12 release. We just need to let the process organically grow based on user need.

Messari: Next up, we have a couple solid dapp-focused questions related to adoption and developer activity.

“How many developers are building dapps on the platform today?”

“What is Particl’s strategy for accelerating dapp adoption since a lot of projects have struggled to achieve mainstream dapp adoption?”

Schmitzer: We haven’t released a proper SDK+documentation package yet. See other AMA question. The only developers currently building dapps on Particl are the project developers, either for the project or on the side.

Strategy: This is one of the first Dapps built on the blockchain that targets fees/costs/difficulty in selling online. upwards of a $100,000,000 a day are spent on sellers fees every day in just the United States alone. Particl is offering relief from these fees for both buyers and sellers. It won’t be a matter of Particl not being needed, it will be a matter of getting enough awareness. It starts with a great SDK+documentation which is an in-progress roadmap item and one of our top 3 strategic items over the next 12-18 months - along with a mobile version of Open Marketplace and accepting BTC as a payment option.

Privacy is also a hot-topic currently (Facebook/Libra) and has been over the past 3 years or more. By building privacy into the DNA of Particl rather than an afterthought or last minute add-in, we hope to give established open-source privacy projects like Tor and others more options for decentralized development.

There are some interesting revenue-generating scenarios with Particl’s PoS consensus mechanism and the PART privacy coin. I could see this being an incentive for developers to build on Particl over other platforms with different tokenomics. Can add some bulletpoints for good measure:

- Strong Product Market fit/ Original value proposition

- Privacy is hot at the moment.

- Particl allows you to buy and sell stuff on the internet for the very first time like you do in real life using cash. 1 to 1, zero cuts.

- Buying and selling stuff for crypto without resorting to any centralized services→ pushes the crypto spirit forward

- No more need to exit the crypto-economy

- No more fees to exit the crypto-economy

- Cryptoagnosticism so most cryptocurrencies are accepted

- Focus on the bigger communities at first (BTC, ETH, LTC) and then the others

- Give their coin a direct usability

- Network effect

- Token Economics

- Capitalizing on the fact that the offering and success of certain products are going to invite people to join the market.

Good question. Dapp development uber important for network growth.

Messari: I'm also curious more generally to know your take on why dapp adoption (from users and developers) in the crypto ecosystem generally has been relatively slow to date.

Schmitzer: I see a ton of gaming apps being created in the space. It's like a go to based on crypto users typically being gamblers by some. But for real world-changing (or world-challenging) apps, they require business plans, etc. and to be honest, i'm sure you agree, the blockchain doesn't solve everything.

There's a lot of devs moving into the crypto space, I see the need from legitimate companies needing devs to build dapps for certain use cases coming soon. Maybe ETH and TRON are just not the right platforms (not particularly a fan of either). By focusing on privacy, building that in first we are challenging devs to really solve some problems if they build on Particl. Privacy is like 100x harder than other stuff. IP leaks even for image hosting on IPFS, examples like that. Grabbing up-to-date price pegging without leaking location. How do you solve that? Privacy-focused apps excite us and we hope others reading news and using data mining apps.

Messari: We have two quick protocol-oriented, semi-technical questions up next.

“Why have Particl coin if you have atomic swaps?”

“What does it mean that Particl is built with Bitcoin’s code but uses Proof of Stake? Could Bitcoin ever switch to Proof of Stake?”

Schmitzer: First one is easy. It takes 2 to tango. Seriously though, the definition of atomic swaps is having 2 coins, you know, swap in a permissionless manner cross-chain... cool stuff! Atomic swapping between tokens that do not have the functions needed to run our marketplace/economy would not help us to achieve our goals. Atomic Swaps actually tremendously boost our use case with Particl as in the future we hope to use this technology to help our decentralized/privacy/economy to become crypto agnostic.

PART is also the fuel to the marketplace. PART is the native cryptocurrency designed to be the heart of the Particl privacy-focused ecosystem. It is a privacy coin, a voting coin, a moderation coin, an earning coin.

For the next question I'd like it put on the record. Particl loves Bitcoin--big fans, big hodlers.

PoS to PoW would be a protocol change that would require a hardfork. This is an unlikely scenario based on the worldwide footprint Bitcoin has with users and services. Particl stays in step with Bitcoin development. We do this so we're a compliment to Bitcoin, not a competitor. We have no desire to take over Bitcoin. That doesn't even make sense based on our roots. We stay in step by nearly daily merging BTC development into Particl. Hard to find another team doing that. And when I say team I mean our lead core dev and cryptographer extrodinare, tecnovert. Guy is a machine and has a passion for all the research Poelstra, Maxwell, etc. are doing for privacy on blockchain.

So like I said earlier, lots of reasons to stay in step, security is a big one. We add privacy enhancements that are researched, peer reviewed and code reviewed to Bitcoin's current, stable codebase. That's Particl: private by design.

Messari: That's really interesting—and impressive. I'm curious: why did Particl pick Bitcoin's source code to build with instead of another arguably more dapp-friendly codebase?

Schmitzer: Greg Hogskinson (sp) asked same thing when we started. He suggested Ethereum. Bitcoin has its problems, but it also has really smart scripts that aren't Turing complete robust, but get the job done simply and unhackably. We use those scripts in our 2-party trustless escrow (MAD) and in our Cold Staking setup that is pretty cool with offline hardware wallets.

You can build dapps on Bitcoin, they won't be complex contracts (erc20), but it's code and verifiable, open source and actually quite nice. We also wanted our own chain for the privacy side of things. We couldn't do that on ETH. CryptoKitties crashed it, imagine like 5 apps on there. Scary

BTC will be our first coin accepted as payment in marketplace too after PART. PART still needed for private escrow and such, but swapping BTC to PART will allow a whole thriving ecosystem join in the private marektplace. We're all consumers. We want to buy and sell shit for crypto. We never built this for only PART users.

Messari: I have to ask: Lightning payments too?

Schmitzer: Blind Lightning did you say? Hehe

Tecnovert and kewde are dabbling in lightning channels. Half the team already running them, but looking at possibilties. LN will be great for private shopping and online commerce/services.

Messari: I want to wrap up with this sort of forward-looking question: “What are the current features and roadmaps for future features?” But I’ll expand it to ask more generally: what does the rest of Q3 and Q4 2019 look like for Particl?

Schmitzer: Okay, sure. We have 3 strategic items we have identified as being most important regarding the Open Marketplace specifically but Particl (dapps) indirectly.

1. SDK + documentation

2. BTC payment option (others to follow)

3. Mobile marketplace

Those are probably 12-18 month items, especially the mobile one. The tech to host chain data on mobile just isn't there. We could do the route LN is doing with pairing mobile with at-home node, but more likely will try to do the whole thing. Don't know yet, might be versions and POCs specific to mobile marketplace.

A big roadmap item is the Open Marketplace which is going live on mainnet Aug.12th. Within the marketplace release are a couple sub-roadmap items like listing governance and the RingCT/bulletproofs hardfork.

Currently, the marketplace is pretty basic compared to decentralized and centralized marketplaces. Features coming in the future are (1) inventory management (2) quantity control (3) BTC payments (4) market management.

#1 and 2 are both far along and waiting for mainnet launch for more work to be completed and made live. #3 is a major strategic roadmap item and is key for widespread buyer/seller adoption. #4 is being mapped out as we speak. Market management might be the first new feature brought on.

Most of our Q3/Q4 items will be feature releases for the marketplace. We have some hobby projects going like MW sidechain, atomic swaps, Blind LN, and others, but specific to roadmap (check off at the end of the day) this is a good summary.

Messari: That's awesome — we're excited for the launch. Thanks so much for your time, Paul. Where can we keep up with Particl and continue conversations about some of the questions discussed today?

Schmitzer: Our discord or telegram channels are good places to join convo. Should I add links?

Messari: Yes, feel free

Schmitzer: We use a bot to connect all our chat rooms, so it's user preference with instant messenger apps. Telegram, Discord, our website is particl.io, and you can find us on Messari of course. And our GitHub, the most happening place in Particl, is here:

Messari: This is great, thanks so much, Paul!

Schmitzer: Very fun! Thank you so much too

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