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In the 10th episode of Block Stars, David Schwartz continues his conversation with Coil CEO Stefan Thomas as they delve deeper into the Interledger Protocol and Coil.

As with my previous posts in this series, here are the summary and thoughts I have for the episode!

Episode Summary

In the days before the Internet, there were different systems for varying services. For example, broadcast and radio services were one system, while television media was another, and phone and telegraph systems were yet another. The Internet unified all these communication platforms into an accessible whole.

One can then ask the question of what this would look like for payments. Payments today are similarly fragmentized. Different types of companies or institutions fund or pre-fund their different services in mostly their own ways. Those ways actually tie up a lot of money, so that there's a lot of capital that isn't liquid. For Stefan Thomas, this is the way that Interledger Protocol (ILP) is going, to provide a unified infrastructure for payments for everyone.

For example, as Thomas frames it, “You can't build Skype until the Internet exists.” The ability to video chat with someone or even multiple people required that everyone has decently robust Internet access. So Coil was designed after ILP in this same manner. After building out and solving some initial problems with ILP, Coil was launched as a project built on top of it.

While at first reaching out to anyone and everyone who showed interest in working with Interledger, Thomas' team eventually settled on only using two commercial wallets. This was because having a multitude of companies competing on the small space of Interledger would not really bring the profit needed for them to survive. They are, of course, “laying the groundwork” for other people to use Interledger as well. However, it seems like the approach that the Coil team has had on Interledger (i.e. web monetization) is paying off.

At times, it may feel like the progress is slow. But as Thomas points out, the adoption of crypto and blockchain in the fin-tech and payments space over the past decade has exponentially increased. While the early days mostly saw speculative investors who were interested in the mining and inflationary value of Bitcoin, problem solving with crypto in payments became Thomas' focus through the years. This was perhaps due to his prior experience mentioned in the first part of this episode, where banking payment systems were so atrocious in comparison to the burgeoning Internet that Stefan felt he had to help change it.

Here, Stefan Thomas makes and argument for decentralization versus centralization. In the United States, where banking is very centralized, the banking system has had a positive impact on people in the sense that very few people in the US have difficulty transferring money, since they rarely transfer money around the world. However, a centralized system cares mostly about a majority, people who have a voice in their system. And so, in this way, a decentralized system would be of benefit for the minority, where a centralized authority won't really care to cater towards or go after. In a decentralized system, people can be rewarded for serving niches that can't be catered to by the majority.

Thomas, of course, works as both an ILP developer and community member as well as the CEO of Coil. While he wants his emphasis to be on serving the Coil community (as well as employees, of course), given that the way of payments is perhaps inevitably going towards some form of interconnected ledgers, he also wants to make sure that this direction is the most beneficial for as many people as possible. In regards to Coil, he states that the emphasis they believe in is the funding of media platforms that will probably benefit from the technology. And so, whether the actual blogging or video platform of Coil performs well, their roots in other companies will provide a lift for the whole, rather than relying on a single platform.

Both Schwartz and Thomas then share a couple stories. In Thomas' story, he talked about the beginnings of Ripple, when it was called OpenCoin, and didn't have its own office spaces. He reminisces how great it was to work with Ripple as a start-up, and opines gratefully for the opportunity to work at the company. Then, after some tongue-and-cheek ribbing, Schwartz shared that, as Thomas passed the Ripple CTO position to him, he told Schwartz that, as CTO, “You can say no”. In other words, the company has the option to do many things. But the key to success is focusing on a few things, or even just one thing.

My Thoughts

This was a much shorter episode than usual. But, wow, there's a lot that I actually want say about it, and not all of it is really positive. But let's start with the things that I liked most.

ILP and the Internet

Ripple is probably the most well-known for pushing this idea of the Internet of value—the idea that, just as global communication was revolutionized by the immediacy and universality of the Internet, so payments can as well. It was quite difficult for me to wrap my mind around this idea, until I was able to send XRP from one of my wallets to another. When that transaction was almost instantaneous, it was suddenly very obvious why this kind of system could take the world by storm.

There are very real and tangible applications for this kind of thing even now. Today, as in previous years, Wikipedia is asking for donations. Many non-profit, publicly supported, and very donation-dependent services and sites do the same thing year after year. For a site as big as Wikipedia, they state that just receiving $2 from every person that views their site would support them for years to come.

Now, Wikipedia does have Brave Rewards hooked to their site, which means they do receive some tips and contributions. But the way Brave works still requires a little bit more manual input from users than they are often willing to put in (as far as I know, most people want to save the BAT they earn from the browser, rather than auto-contribute it to any sites).

However, a platform like Coil, where payments are always streamed automatically from user to the site, would be a massive boon to Wikipedia and other similar sites. Not only would they receive consistent payments, but they would be constantly receiving them, and not dependent on a company or group like Brave. I don't have anything against Brave, of course (in fact, I recently reviewed their newly proposed advertising system). But streaming real-time payments in cases like this are clearly better than what Brave can currently offer.

Beyond that, what if a large part of the Internet ran on streaming payments? Suppose Coil was able to be integrated with services similar to Amazon Web Services and other server providers. These services could be paid, partially if not wholly, by the very users that visit the sites hosted on the servers. This would heavily discount the services required, allowing the creation of several new companies and businesses on both sides of the equation (i.e. site creators as well as web host companies). Such a change in the way things work, rather than purely relying on centralized advertising or subscription models, has the potential to bring a paradigm shift to the way we think and do payments globally.

The idea of the Internet of Value moving around in real time, powered by something like Coil, is a revolution waiting to be taken advantage of. And I'm excited to see where this will all go next.

Coil's Focus...or Lack Thereof?

But here is where I will need to be slightly critical of what was revealed in the interview. As an obvious disclaimer, I'm certainly not one who leads any kind of large business, or a developer that has been in the crypto since the beginning. So I can't claim to have any authority on this kind of stuff. I'm a simple blogger, using the very platform that Thomas and the Coil team have kindly created and given, and for that I am grateful.

With that caveat, let's get into the meat of it.

Stefan Thomas said a thing that both resolved a small conundrum I had about Coil, as well as made me feel extremely critical of the entire project. From his own words (14:13 on the podcast):

As far as Coil is concerned, I really want Coil to be successful, but we also try not to be too dogmatic about how. Like, for example, we invest in companies that are media companies where we think that they will do well if web monetization takes off because they will make more money. And so even if Coil itself doesn't become a very popular web monetization provider, we'll still have these stakes in other companies that are doing well in that system. So we don't have to be as ruthless competing for marketshare as a web monetization provider, hopefully. And I think that's more in line with these other goals that we have as well.

In previous blog posts, I've written about how I think the Coil blogging platform could improve. These were based on an assumption that I had that the service, being in Beta, was going to be improved upon until its official release. But having been blogging on here for about a year, I honestly haven't seen any improvements or even any real changes at all. Instead, outside of some interface changes, things have basically been the same. Now, I know why.

And I honestly feel slightly betrayed.

Perhaps I had false expectations. But as a creator, one of the things that entices me to use a specific platform is the promise that the people behind the service will actively try to improve it, based on the feedback it gets from its users. In this relationship, the creators and the developers of the service can have a push-pull relationship that can make the actual service better. That was what I was expecting as I began to blog and write on this platform.

One of the things that Coil offers (as well as Cinnamon) is something called the Coil Boosting Pilot, which offers to pay Coil creators a bit more incentive to continue to create on the platform by giving them an additional monthly payment on top of what they get from streamed payments. Full Disclosure: I am in this program.However, in full knowledge that I may be biting the hand that feeds me, I don't actually think of the boost program as something sustainable in the long run for me as a blogger. Instead, I think of it as a temporary boost to help keep me going until the platform gets a bigger audience, so that the streaming payments from that larger audience helps supplement income. And so, over the past year, I've looked at what I've earned outside of the Coil Boost program to see if that is, indeed, what is happening.

It isn't. I actually don't earn that much more now than I did when I first started blogging. Of course, there may be a number of reasons for this. My blog may be unappealing, my writing style too formal (I've been told this plenty of times), etc. And so, in leu of that, I continue to write and try to improve.

But now, hearing the CEO of the platform say that they aren't actually focused on the platform (the majority of the interview wasn't on Coil at all, but mostly ILP), and having not seen any improvements on the site nor my income, I've come to a point where I must seriously ask myself: is this what I want to continue doing??

I'm not really saying that Coil should or has to improve according to my own standards written in my various blogs and posts. And, certainly, I don't know what other Coil bloggers' incomes are like outside of the Boost program. But really, a lack of any improvement or change, and now the lack of intentional focus to make the product better as implied by both Thomas' comments and what I've experienced this past year, really irritates and grates me.

It makes me question whether this company is being run very well at all. After all, when I get into a product or service, my expectation is that it will represent the company that built it. If I were to take a look at what I've experienced so far, I can't really say I've been using a very solid service. I've only hoped that this will all turn out well. But, in my perspective, and from what I've heard from this interview, it doesn't look like things will improve any time soon.

At this point, I've noticed that this is just mostly a rant, with no way for me to end it. So I'll just end it here.