Dr. Pavel Kravchenko is a cryptographer and author and the co-founder and CEO of Distributed Labs, a digital platform developer with expertise in blockchain technology. He sat down with Right for Education to discuss his work, the blockchain space, and its future.
Blockchains are a form of distributed ledger technology that gathers data and publishes it in “blocks” of data, which are linked to one another like a chain. Systems that run on blockchains allow users to access a full, unmodifiable history of all transactions and interactions on the chain, the security of which is ensured by cryptographic protocols. The way blocks are created, the amount of data per block, and the protective protocols vary between chains.
Cryptography is a method of ensuring the security of online interactions against attacks from other agents. In blockchain technology, cryptography is used to ensure the validity of transactions in a trustless environment.
Trustless systems operate without users knowing each other’s identities. The ability to operate in such an environment requires cryptography.
CBDC stands for Centralised Bank Digital Currency – a virtual form of fiat (national) currency.
Decentralization refers to systems that are not administered or operated by a single entity. Decentralized systems run on code that can be amended when certain criteria are met by the community using that system. This may include voting and staking currency. The level of decentralization differs between projects in the crypto space.
R: Ed Could you please tell us about yourself and the work you do?
I am a cryptographer working on enterprise projects and mobile applications. As a company, we were established seven years ago and we mainly work in online financial systems on the internet. There are new technologies now to help these financial systems work more efficiently, including digital signatures and digital identities, many of which can be facilitated by blockchain as an information infrastructure and then protected by cryptography.
R: Ed Could you tell us a little bit more about the crypto and blockchain space? Are we living through an internet revolution?
I think it will be seen like that in the next 10 years, yes. We’re seeing a big change of process like we saw when email and instant payment systems first emerged. Blockchain technology and cryptography are changing the idea of digital property and identity. With decentralization, the virtual world will become a very different place. We can already see this with games and the metaverse, which are growing not just for fun but as places with their economies. To me, the type of change we are seeing has three categories: data, finance, and property. Cryptography allows for decentralised, trustless systems. Some people believe that the blockchain will remove all the intermediaries. I do not agree, but I agree that it will make many of our current systems obsolete. There will still be space for traditional finance, but these two systems will have to comprehend each other in the future.
Talking about “crypto” as one system is misleading because there are so many different projects and protocols under that heading, many of which are doing completely different things.
R: Ed Do you believe that the world will move to programmable money, whether that be a CBDC or the adoption of the stable coin?
I think they will compete with each other, but there will be no winner. We need fiat systems because money represents relationships within society. Which money to use is the question. So right now governments impose a currency to use, but as we can see with El Salvador, these systems can change and adapt.
R: Ed Out of the many blockchains out there, which do you think will survive in the long term?
A lot of companies will disappear, I think. Bitcoin is not a company and it’s being used as a store of value, so I think it will survive. I think Ethereum and Monero will also survive but many of the coins out there don’t have utility and are a Ponzi scheme or some other scam.
R: Ed What are the current obstacles to wider crypto adoption?
First of all, people don’t know what to do to start investing. The second is that they don’t know how to store their coins. Overall, for most people, it just feels too risky. It’s an investment decision they know too little about with a lot of hype and technological questions they cannot answer.
R: Ed What is meant by the term Web 3.0?
I think it’s about control. Now and most times in the past, you had accounts with a company. Web 3.0 is a very large term but the general movement is towards privately-held value. People in crypto are fond of saying “not your keys, not your crypto” and that tells you something about where we’re going. People will be able to take care of their assets instead of entrusting them to a central authority.
R: Ed Decentralisation is a significant reason for the adoption of many blockchains. For many in the crypto space, decentralization follows a philosophical, sociological, and economical preference to distance themselves from centralized financial systems and the fiat they run on. Outside of this core, do you think most people care about decentralization?
No. Most people just want products that work to make their lives easier. The people who care about it are very active and were early adopters but for most people, thinking about these types of questions is unimportant.
