Bitcoin pioneer says new coin to work on many blockchains
(Bloomberg) -- Jeff Garzik, one of a handful of key developers who helped build the underlying software for bitcoin that is known as blockchain, has seen its shortcomings firsthand. So he decided to create a better digital currency.
He’s calling it Metronome and says it will be the first that can jump between different blockchains. For example, coins that are used for applications on the Ethereum blockchain will be able to move to Ethereum Classic before jumping onto Qtum or Rootstock, which connects with the bitcoin blockchain, said Garzik.
The mobility means that if one blockchain dies out as the result of infighting among developers or slackened use, metronome owners can move their holdings elsewhere. That should help the coins retain value, and ensure their longevity, Garzik, co-founder of startup Bloq that created metronome, said in a phone interview. It will be unveiled Tuesday at the Money 20/20 conference in Las Vegas.
"Institutional investors should be very excited to see something like this," Matthew Roszak, the other co-founder of Bloq and chairman of industry advocate Chamber of Digital Commerce, said in a phone interview. "We’ve built a thousand-year cryptocurrency, something that’s built to last."
That’s a concern for many digital currencies. Infighting among developers and various supporters, and the slow pace of enhancements on the bitcoin blockchain have helped to limit use. Both bitcoin and its main rival, ethereum, have split into several versions.
More splits could be coming -- partly, thanks to Garzik, who is a proponent of and a developer for an upgrade to the bitcoin network called SegWit2x, which offers one way to speed up transactions. That split could happen in November.
New blockchains are also being launched every month, creating uncertainty for investors and leading to wild swings in many cryptocurrencies’ prices. While bitcoin’s price has increased nearly sixfold this year, a split-off version, bitcoin cash, is down 23 percent since its inception in July, according to CoinMarketCap.
While seeking to side-step some of these challenges, metronome will have some of its own. It’s starting out with zero users, compared with 35 million active bitcoin users a month. There are more than 1,100 tokens and currencies competing for users, according to CoinMarketCap. The token will first be issued on ethereum, and support for ethereum classic and other blockchains is expected within months.
Metronome’s coins will be produced and supported by autonomous distributed software that isn’t controlled by anyone, and can’t be changed. This software will auction off metronome, beginning in December, and keep and use the proceeds to boost the currency’s price. The rest of the project will be open sourced, so anyone will be able to build applications with metronome in mind.
Bloq will provide developer tools for corporate users. The company and others that helped create and promote the cryptocurrency will retain 2 million metronome coins, out of an initial trove of 10 million to be auctioned off in December. Every 24 hours, 2,880 new coins will be added to the supply.
Metronome sidesteps a problem that’s common for consumers that want to jump from one blockchain -- say, bitcoin -- to another. They have to go to an online exchange, and sell their bitcoins and buy another cryptocurrency. That includes exchange fees, plus the risk of losing out on any appreciation of the currency they dump. With metronome, they won’t have to do either.
Metronome owners will be able to receive a digital receipt for removing their coins from one blockchain. They can send the receipt to another blockchain, to add metronome there.
"If I had a clean slate of paper this is what I would design," Garzik said. It remains to be seen if others will agree.