Circle Chief Evangelist Anders Brownworth, who previously taught blockchain technology at MIT, gave a presentation on day two of the 2017 MIT Bitcoin Expo in which he mainly focused on what Circle has been working on for the past few months.
Circle is a mobile payments application that aims to make sending money to anyone in the world as easy as sending them a message via their mobile phone.
During his talk, Brownworth noted that although Circle dropped the ability to buy and sell bitcoin in their mobile application late last year, the company still uses Bitcoin in the background of their current operations. Brownworth also explained Circle’s need for state channels and why the company is now building a new platform on top of Ethereum.
Circle Still Uses Bitcoin
During the opening portion of his presentation, Brownworth made it clear that Circle has by no means stopped using Bitcoin completely. In fact, Bitcoin still plays a key role in the background of the company’s operations.
“Bitcoin very fundamentally informs the way Circle works behind the scenes, and it continues to do so,” stated Brownworth. “We continue to use it.”
In addition to various background operations, Brownworth also noted that Circle has helped fund MIT’s Digital Currency Initiative (DCI), which funds Bitcoin Core contributor Cory Fields, Bitcoin Core maintainer Wladimir van der Laan and lightning network developer Tadge Dryja. In the past, former Bitcoin Core lead maintainer Gavin Andresen was also a part of the MIT DCI.
Circle also operates a trading desk for bitcoin and other digital currencies. “We actually operate a trading desk for all virtual currencies — a very active trading desk,” noted Brownworth.
The Need for State Channels
According to Brownworth, one of the main things Circle is working on right now is Spark. It’s unclear if this is an attempt by Circle to create the main payment platform of the future to replace the likes of Bitcoin and Ethereum as Circle CEO Jeremy Allaire said was needed late last year.
Brownworth described Spark as “smart contract driven,” and the Circle chief evangelist explained the payments company’s need for state channels on any system they build. “We’ll use state channels to keep the cost of transactions low — keep the fees low — and also to add privacy,” he said. “For us, state channels are very, very important. We need them either formally supported or we need the contract primitives to be available, so we can make time-locked contracts (HTLCs).”
An example of state channels is payment channels in Bitcoin where many payments can be made between two parties before eventually being settled on the blockchain. The lightning network is an attempt to create a generalized layer of payment channels where users can send payments to a wide number of other parties via this mechanism.
According to Brownworth, Circle will eventually open-source the Spark platform, and they have no plans to try to compete with other solutions at the platform level. Instead, Circle will focus on building apps on top of the Spark platform.
While Brownworth noted that there were many options for building the Spark platform, Circle’s initial implementation uses Ethereum. Brownworth also described the process of learning what it’s like to build on top of these sorts of smart contracting platforms.
“What became obvious very quickly, very early on is it’s really, really hard to make a smart contract system maintainable,” he said. “If you do the sort of Solidity 1.0 basic example and set up your own currency, that’s great and all until tomorrow when you want to add a new feature and you have to delete everybody’s accounts. Or you have to build in a path for all of that information to make its way into the new contract.”
Brownworth added that their current line of thinking is to create a core, permissioning contract that will tell other contracts when there is a new version of that contract available. He also added that this system will be for IOUs rather than digital bearer assets.
Why Build on Ethereum?
During the Q&A portion of his talk, an audience member asked Brownworth to further clarify why Circle was using Ethereum for Spark.
“We could have done this a lot of different ways,” responded Brownworth. “We looked at many different options for technologies to implement this in. Essentially, what it comes down to is, believe it or not, maturity at this point versus all of the others.”
Brownworth added that Hyperledger and Corda are also interesting, but the maturity of the code available for those platforms does not meet Circle’s needs right now. “We actually built this in a number of different platforms, and we ended up coming to the realization that the practical way to implement this right now is Ethereum,” he said.
While Spark is being built using Ethereum right now, Brownworth added that Spark is made to be interoperable with other blockchains and platforms via state channels as well.
This article was originally published on: Bitcoin Magazine