In this interview I am speaking with Fisher Yu, the co-founder and CTO of Babylon. We will discuss combining Bitcoin's security features with Proof-of-Stake networks, the challenges faced during the development of Babylon, and the exciting possibilities in this groundbreaking synergy.
Please tell us your name and what you do
My name is Fisher Yu. I am the co-founder and CTO of Babylon, a project aiming to scale Bitcoin and secure the decentralized world.
Can you provide an overview of your background and experience in blockchain security and cryptography? What projects or research have you been involved in?
I did my Ph.D. at Australian National University, focusing on network information theory. In my last year of Ph.D., I invented a decentralized media delivery platform and sold it to Dolby Laboratories.
I then joined the University of Southern California as a Postdoc to study the security of decentralized systems systematically. During my Postdoc, I invented Polyshard and Coded Merkle Tree with my colleagues, among the most cited works in the blockchain scalability and data availability areas.
I then joined Dolby Laboratories to lead the production of decentralized multimedia delivery networks. In the meantime, I have been collaborating with Professor David Tse on academic research and industry consulting. I have helped a few high-profile blockchain projects upgrade existing chains and launch new ones.
A recent research paper from me, Professor Tse, and our co-authors, which was recently accepted by the world's most respected security conference, the 2023 IEEE Symposium on Security and Privacy Summit, entitled "Bitcoin-Enhanced Proof-of-Stake Security: Possibilities and Impossibilities," forms the foundation of Babylon.
Why did you find Babylon?
I've witnessed firsthand how information infrastructure is often concentrated in the hands of a select few entities. This concentration raises concerns about centralization and the potential for censorship and manipulation in our digital world. Our current systems are not as transparent, fair, or democratic as they should be.
I recognized the potential of blockchain technology and saw an opportunity to disrupt this status quo. Blockchains can bring about decentralization, creating new social structures that prioritize transparency, fairness, and democracy. They can empower individuals and foster innovation, crucial for building a more equitable and inclusive digital landscape.
Babylon, in particular, is my response to the challenge of scaling Bitcoin to ensure a more secure and decentralized world. It's a way to leverage the power of Bitcoin's security while expanding its utility in a broader ecosystem.
By doing so, I hope to contribute to the ongoing transformation of our digital world into one that better aligns with the values of transparency, fairness, democracy, and individual empowerment.
How exactly does Babylon work?
It operates through a suite of Bitcoin security-sharing protocols, each leveraging distinct security features inherent to Bitcoin. These features encompass Bitcoin's Proof-of-Work (PoW) power, the Bitcoin asset itself, and its reputation as one of the most censorship-resistant global blockchains.
Our current primary focus is on the Bitcoin Staking protocol. This protocol is designed to leverage unused Bitcoins to improve the economic security of Proof-of-Stake (PoS) systems.
What makes it particularly noteworthy is its ability to allow Bitcoin holders to stake their bitcoins directly on the Bitcoin network in a trustless manner, eliminating the need for third-party custody, bridging, or wrapping services.
Interestingly, the staked bitcoins can be effectively utilized as a staking asset within PoS systems. This functionality has various essential properties, including generating yields and being slashable, delegatable, and easily unstaked.
Achieving this is made possible through advanced cryptographic technologies and by fully using Bitcoin's existing scripting language, all without requiring any modifications or forks to the Bitcoin network itself.
What problem did you aim to solve with Babylon?
The primary problem we set out to tackle is the security challenges that PoS blockchains face. While PoS systems have emerged as a promising alternative to address the energy consumption concerns associated with Bitcoin's PoW mechanism, they come with their issues.
One of the most critical issues is the vulnerability to non-slashable long-range safety attacks. These attacks pose a large risk to the integrity and security of PoS chains, and addressing them is a complex problem.
Another challenge is the limited staking capital available for security, especially for smaller PoS chains, which can hinder their ability to withstand attacks and provide a high level of security.
Additionally, PoS systems can struggle with low liveness resilience, meaning they may face challenges in maintaining consistent and reliable network operations.
However, we firmly believe that integrating Bitcoin can effectively resolve these problems. By leveraging the security features and robustness of the Bitcoin network, we aim to create security-sharing protocols that bring together the strengths of PoS systems and Bitcoin, essentially achieving the best of both worlds.
In doing so, we hope to enhance the security and resilience of PoS blockchains while addressing their limitations, ultimately contributing to a more secure and sustainable blockchain ecosystem.
What were your biggest challenges when building Babylon?
One of the most significant challenges we encountered was navigating the limitations of Bitcoin's scripting language. Bitcoin's scripting language is intentionally limited in its expressiveness, making it quite basic and restrictive compared to more sophisticated smart contract languages used on other blockchain platforms.
This limitation means it's exceedingly challenging to program complex functions or have the Bitcoin network understand off-chain events, which is crucial for our security-sharing protocols.
In contrast to languages like Solidity, which enables developers to program a wide range of functions in smart contracts, working with Bitcoin's scripting language requires a different level of creativity and problem-solving.
It demands a deep understanding of multiple disciplines, including cryptography and economics, and the ability to provide rigorous scientific proofs to ensure the security and effectiveness of our protocols. All these elements must seamlessly come together to design protocols to extract Bitcoin's security and share it with other decentralized systems.
Overcoming the limitations of Bitcoin's scripting language has been a multifaceted challenge that has required a unique blend of skills, innovative thinking, and a commitment to the principles of security and decentralization.
It's a testament to the complexity and intricacy of the blockchain space and the dedication required to address its unique challenges.
What are the main advantages of utilizing Bitcoin's security model for proof-of-stake chains compared to traditional proof-of-work mechanisms?
One of the main advantages of utilizing Bitcoin's security model for proof-of-stake chains compared to traditional proof-of-work mechanisms is the efficiency factor. PoS has already been demonstrated to be a more energy-efficient consensus mechanism than PoW.
We're in an era where the environmental impact of cryptocurrencies is a pressing concern, and PoS has a significant edge in this regard. The reduced energy consumption associated with PoS makes it more sustainable and contributes to lower transaction processing times, another clear benefit.
However, it's important to acknowledge that PoS has its own security challenges that must be addressed. These issues can't always be solved internally within the PoS system itself.
This is where Bitcoin, the largest and most secure blockchain globally, comes into play. Bitcoin has a proven track record of robust security and attack resistance, making it a valuable resource for PoS chains needing external support.
Combining the strengths of PoS and Bitcoin's security model can lead to a more secure and decentralized blockchain ecosystem. It's a natural progression in the evolution of blockchain technology.
By leveraging Bitcoin's security, PoS chains can enhance their overall security posture and gain the trust of users and investors. This symbiotic relationship between PoS and Bitcoin can potentially contribute greatly to creating a better-decentralized world where security and efficiency coexist harmoniously.
What potential risks or challenges can arise when implementing Bitcoin's security in a proof-of-stake environment, and how can they be mitigated?
There are some potential risks and challenges when implementing Bitcoin's security in a proof-of-stake environment.
One of the primary challenges is achieving and maintaining synchronicity between the PoS chains and the Bitcoin network. Both systems must work seamlessly together to ensure the security and integrity of transactions. Any discrepancies in timing or data between the two could lead to vulnerabilities.
Another significant concern is the risk of double-spending in a PoS environment, where participants have a stake in the network. Unlike PoW, where miners invest computational power, PoS relies on participants' ownership of tokens.
If there's a flaw in the integration that allows for double-spending, it could undermine the entire system's trustworthiness.
Additionally, managing stake withdrawal delays can be a challenge. In PoS, participants often need to lock up their tokens as collateral, and there can be time delays before they can withdraw their stake. This introduces a potential friction point for users wanting to exit the system quickly.
To mitigate these challenges, it's crucial to implement robust cryptographic measures and mechanisms for secure communication and data transfer between the PoS chains and the Bitcoin network. Time-locking and advanced Bitcoin timestamping can also be valuable tools to ensure that transactions and data are properly synchronized and secure.
Furthermore, continuous monitoring and auditing of the integration are essential steps to identify and address potential vulnerabilities promptly. Regular security assessments and stress tests can help uncover weaknesses and ensure the implementation remains resilient against attacks.
Are any specific technical considerations or modifications needed to make Bitcoin's security compatible with proof-of-stake chains?
When it comes to making Bitcoin's security compatible with PoS chains, it's interesting to note that no modifications are required for the Bitcoin network. The innovation here lies in developing a Bitcoin staking protocol, which transforms Bitcoin into a staking asset that can be slashed, withdrawn, and delegated for use on PoS chains.
The key lies in the PoS chains themselves, which need to incorporate specific logic to accept Bitcoin staking. This can typically be achieved by implementing smart contracts, a feature most PoS chains support. Using smart contracts ensures that the integration process is relatively non-intrusive, allowing PoS chains to harness Bitcoin's security while maintaining their functionality and rules.
So, in essence, the technical considerations and modifications primarily revolve around the PoS chains, which must be designed to accept and interact with Bitcoin as a staking asset. This approach minimizes the need for changes to the Bitcoin network, ensuring compatibility with a range of PoS chains efficiently and streamlined.
What is your long-term vision for Babylon?
In the long term, my vision is to foster coexistence between Bitcoin and PoS chains in the decentralized landscape. The ultimate goal is to bridge these two blockchain technologies by using Bitcoin as a security backbone for PoS networks.
The main idea behind this vision is to create an integrated, secure, and decentralized economy. We believe that by achieving this, we can not only retain the value of Bitcoin but also provide opportunities for Bitcoin holders to earn meaningful yields. This, in turn, could promote broader adoption of Bitcoin and PoS chains, leading to a more interconnected financial system.
In this future scenario, the focus lies on enabling trust and interoperability between these blockchain ecosystems. The aim is to contribute to the evolution of the cryptocurrency landscape, gradually disrupting traditional finance and other sectors with more equitable and inclusive systems.
The commitment here is to continue developing innovative solutions that support the overarching vision, strongly emphasizing security, scalability, and sustainability. The main goal is to empower individuals and institutions to actively participate in this evolving decentralized economy, unlocking new possibilities and reshaping the financial landscape.
The long-term vision centers around realizing a more secure, efficient, and accessible global financial ecosystem driven by the synergy between Bitcoin and PoS chains.
What are the most critical factors determining the success and adoption of Bitcoin to secure proof-of-stake chains in the blockchain industry?
Several critical factors come to mind when determining the success and adoption of using Bitcoin to secure proof-of-stake (PoS) chains in the blockchain industry.
First and foremost, it's the establishment and widespread adoption of Bitcoin security sharing protocols, particularly the Bitcoin Staking protocol.
These protocols create a marketplace where Bitcoin holders become security suppliers while PoS chains and other decentralized infrastructures become consumers. The effectiveness of these protocols in facilitating this exchange of security plays a pivotal role in the success of this integration.
However, one significant challenge is that the Bitcoin and PoS ecosystems are somewhat foreign to each other. This highlights the importance of market education.
To bring these two worlds together successfully, there needs to be a joint effort to educate both Bitcoin holders and PoS enthusiasts about the benefits and intricacies of this security-sharing model.
This education is critical to building trust and fostering cooperation between the two communities.
Moreover, a solid economic model is essential for this shared security market's long-term sustainability and prosperity. Ensuring that the incentives are well-aligned for Bitcoin holders and PoS chains is crucial. This means establishing clear and fair compensation mechanisms that encourage participation in securing PoS chains while providing appropriate rewards to Bitcoin holders.
Additionally, a strong and engaged community is vital. Communities play a significant role in blockchain, and their support can make or break a project. In the context of Bitcoin securing PoS chains, having an active and enthusiastic community that believes in the value of this integration can help drive adoption and ensure its continued success.
What are the most exciting possibilities and innovations that can emerge from the synergy between Bitcoin and proof-of-stake chains in the coming years?
One of the most intriguing prospects is unlocking the 21 million Bitcoins for the PoS economy. This could have a transformative effect, activating a massive pool of capital and creating a strong alignment between Bitcoin and the PoS world. Thinking about how this capital injection could fuel new developments and opportunities is exciting.
One area where we can anticipate significant innovation is in security infrastructure. Bitcoin's robust security track record can provide a solid foundation for PoS chains, enhancing their overall security posture. This, in turn, could pave the way for more confidence in blockchain technology and potentially attract new participants and investors to the ecosystem.
DeFi is another realm where the synergy between Bitcoin and PoS chains can lead to exciting innovations. DeFi has been a major driving force in the blockchain space. With the added security and stability that Bitcoin can provide, we might see even more sophisticated and secure DeFi applications emerge. This could lead to improved financial services, better lending and borrowing options, and increased accessibility for users worldwide.
Furthermore, the liquidity market is poised for innovation. With Bitcoin's participation in PoS security, we could witness the creation of more efficient and liquid markets. This could make it easier for users to move assets between chains and ecosystems, fostering greater interoperability and reducing friction in the blockchain space.
Lastly, the synergy between Bitcoin and PoS chains might also catalyze the launch of more application-specific blockchains and infrastructure.
Powered by Bitcoin's security, these chains could be tailored to specific industries or use cases, enabling more specialized and optimized solutions. This diversification could open up new possibilities across many sectors, from supply chain management to healthcare.