TIBA AMA Recap #4 — Saito
This post was originally published on blog.thu-tiba.org
On the 18th of September, TIBA held the fourth event of its #AMA series. We are hosting regular ask me anything sessions with fascinating blockchain projects from China and around the world. We would like to give the international community direct access to these projects and a chance to ask whatever you are interested in.
Scan the QR code below and send “AMA” to get invited to the TIBA #AMA WeChat group!
This time’s guests were Richard Parris and David Lancashire from Saito. Richard and David could be described as alpha expats: They have been involved in the China tech scene for over a decade, and this gives them a deep understanding of the Chinese market and entrepreneurial scene. They both learned about blockchain around 2013 by getting involved with Bitcoin.
Saito has a perspective on blockchain unique among the plethora of tech-focused projects. ”The genius of Bitcoin was not consensus […] it was being the first network that could autonomously pay for its own survival,” says Richard. From this perspective, the incentives that are part of Bitcoin are not just clever additions but indispensable components of its design. Blockchain is not secured by Proof-of-Work — it is secured by money.
“The genius of Bitcoin was not consensus […] it was being the first network that could autonomously pay for its own survival”
Richard and David established their project in early 2018. The name of the project — Saito — comes from Christopher Nolan’s movie Inception. This signifies, as David explains, an approach to solving problems on a deeper level. Just like in the movie the characters have to go deeper and deeper to reach the source of a problem, Saito also aims to solve the issues of scalability and security on a more fundamental level.
So what does more fundamental mean when it comes to blockchain? Saito claims that the current economic model is unsustainable, as we are not incentivizing and valuing the right things. Many activities bring value to the system and ultimately its end users: Proof-of-Work, data storage, and bandwidth for transaction broadcast, just to mention a few. However, we only incentivize hashing using block rewards and transactions fees paid to the miners. The goal should be to pay everyone in the network for the value they provide proportionately.
In Richard’s view, one issue with Bitcoin is what many call a strength: its immutability. Once you put something on the Bitcoin blockchain, it is supposed to stay there forever. However, the transaction fee you provide only pays for this once. As users do not pay for storage directly, and storage costs have been increasing significantly, this is becoming an issue. For this reason, Saito has a transient chain: The idea is that the genesis constantly moves forward, and old entries are not stored unless they are rebroadcast with a new fee.
The other thing we do not pay for in Bitcoin is bandwidth, David adds. Propagating transactions to miners is vital to the network. As of now, however, this propagation is done voluntarily without any financial incentives to routing nodes. Saito is building a system where routing nodes are rewarded directly. This has the additional benefit that nodes have the incentive to improve the network infrastructure, as this way they can collect transactions (and thus fees) more effectively. David envisions a future where monolithic ISPs disappear and people compete to give you fast Internet access.
So what can a system like Saito by used for? Apart from the obvious candidates (fintech, logistics, ticketing, and collectibles), David suggests a high-performance blockchain with the right incentive mechanism could serve as a general public key infrastructure (PKI) network. This enables applications like decentralized, encrypted chat where users can communicate with each other without Man-in-the-Middle attacks and social networks where advertisers can give users tokens directly.
For now, though, Saito chose to focus on gaming through their Saito Arcade. The reason is simple: Games showcase what a blockchain platform can achieve (e.g. handle complex program logic), while they also allow people to interact with the blockchain — even without knowing it is all running on the blockchain.
So what is it like to run a blockchain project like Saito from Beijing? In their experience, it is harder to make the global community take your project seriously if you are based in China. However, this situation also has its advantages, as David shares: ”We have got a lot of leeway in terms of just being able to do stuff since no-one in China really cares about anything that is flying below the radar.” There are significant differences compared to other markets like the US. ”US is ‘land of ETH’ […] everything is a development problem waiting to be solved and blockchain will take over the world […] Asia and particularly China is very pragmatic,” says Richard.
”We have got a lot of leeway in terms of just being able to do stuff since no-one in China really cares about anything that is flying below the radar.”
To learn more about Saito, read their 5-page-long whitepaper, or visit their website for more resources. They also organize weekly meetups in Beijing where everyone is welcome to join: the Saito Social.
To learn more about our upcoming TIBA events and join the discussion, scan the QR code below!
This article was written and edited by Péter Garamvölgyi.