Bluzelle CEO on Solving Crypto

My background is in business strategy and management. I began my career in media and entertainment, working with companies like Disney and Warner Bros. About five years ago, I transitioned into crypto after becoming fascinated with Bitcoin and blockchain technology. It perfectly merged my interests in technology, finance, political theory, economics, and innovation.

We were initially working on projects for banks and insurers, investing in smart contracts and blockchain solutions built on Ethereum. However, we still needed a database to store client data, which would have been prohibitively expensive to host directly on Ethereum. Since Microsoft is a partner, we utilized Azure as the backend, but the integration required significant engineering to connect with Ethereum. Through this process, we realized that Web 3's evolution needed to be fully decentralized, starting with the database layer.

Our team is distributed across Vancouver (Canada) and Singapore. Being founded in Canada, it was natural to tap into the rich talent pool there. We also identified Singapore as a burgeoning hub for fintech and made the strategic decision to establish a presence there.

We've reached several significant milestones. We successfully executed a blockchain project for a consortium of major banks, including HSBC, OCBC, and MUFG, supported by the Singaporean government. Additionally, we delivered a smart insurance project in collaboration with MSIG and KPMG. Being named a Technology Pioneer by the World Economic Forum was a great honor. Most recently, in April, we launched our incentivized testnet featuring staking, which has garnered considerable attention within the community.

Although dApps stands for "decentralized applications," many are not truly decentralized. A large part of their tech stack, particularly file and data storage, remains centralized. This creates critical points of failure and undermines the core benefit of decentralization. A decentralized database like Bluzelle offers superior security, is censorship-resistant, and scales effectively. This is achieved by leveraging a distributed network of validator nodes to store and verify all data, eliminating the risk of network downtime or manipulation—major drawbacks of traditional databases.

Comparatively, IPFS is a file storage system, much like Dropbox, whereas we are a database, similar to MongoDB. Furthermore, IPFS is maintained by voluntary nodes with no economic incentive to ensure data persistence or availability. Data on IPFS can also be 'unpinned' and lost at any time. Bluzelle's model, however, uses staking and economic incentives to ensure our validators act honestly and maintain data integrity.

We are currently concluding our incentivized testnet, known as the Game of Stakes. The next immediate step is to roll out staking rewards, followed by the official mainnet launch, allowing production-ready dApps to store their data on our network. Additionally, we are developing unique ways for Bluzelle to integrate with and benefit the DeFi ecosystem.

Designing the core architecture was challenging as it required navigating the blockchain trilemma: you can't simultaneously maximize speed, security, and scalability. By prioritizing decentralization, we had to make some trade-offs on speed, believing that security ( Byzantine Fault Tolerance) and scalability were more critical for a database infrastructure. To achieve true decentralization, a BFT system is essential. Initially, no existing solution fit our needs, so we started building our own, which was a monumental task. The advent of Cosmos/Tendermint was a breakthrough that allowed us to save significant development effort.

Given the market crash following the COVID-19 pandemic, I am more bullish on Bitcoin's long-term potential than ever before. Governments will continue printing money, leading to currency devaluation in emerging markets and high inflation. This environment benefits Bitcoin adoption, which in turn introduces more people to the broader crypto ecosystem. I'm also excited about Cosmos/Tendermint because it solves interoperability between chains better than other solutions, which is why we adopted it for our backend. As more blockchains build on Cosmos, Bluzelle will be readily available for projects across the entire ecosystem.

After all these years, it seems the first and still the best use case for blockchain is Finance. With global money printing by governments, it's the most needed application and will continue to grow. As inflation rises and currencies devalue, people will turn to crypto and the benefits of DeFi. The current DeFi ecosystem is just laying the groundwork as its security and usability are being tested. But it's getting stronger, and three years from now, it will be a formidable financial system. By the time my kids are adults, they will find it easier to save money and earn yield through DeFi than traditional banking.

Projects unrelated to finance or privacy will likely slow down considerably. COVID-19 has forced companies to focus on survivability. A logistics company is worried about its supply chain and revenue, not on saving a small amount of money with blockchain. The real areas of growth for blockchain will be in addressing the pain points of losing money, saving it, and maintaining privacy in a post-COVID world. I predict the second half of 2020 will see a significant influx of new users into crypto, the largest since 2017.

I call it the 'gateway problem.' It's still too difficult for the average person to get through the door. We have an incredible industry with amazing technology and opportunities, but our venue isn't full because the entrance is too complicated. Once we can onboard users with a familiar and seamless user experience, we will see massive growth.

Without a bull market, every crypto project, including Bluzelle, will face a tough time. Our industry is influenced by the cycles of crypto. Rising asset prices attract more users, which in turn drives more application development. If that organic growth isn't there, it will be challenging for any blockchain company. The early adopters of the technology are those already familiar with crypto.

I believe blockchain games are the most over-hyped sector in this industry. I come from the video game space and am in touch with top-tier game developers. None of them are interested in blockchain. The gaming industry is not broken; it's hitting record revenues year after year, and COVID-19 has only accelerated this. There is no need for companies like Electronic Arts to adopt blockchain and create an open ecosystem; they prefer their closed, walled gardens. The only people who want blockchain games are those who play trading card games like Magic: The Gathering and also own ETH. That's a very small niche.