Bitcoin was the world's dominant blockchain when Gavin Wood joined a group led by Vitalik Buterin in building what they envisioned would be a better one.
Buterin, Wood and six other co-founders saw Ethereum, which launched in 2014, as a more expansive ecosystem, with its own cryptocurrency, ether. Users could create and exchange services and products, including the smart contracts that led to NFTs. Wood described what they were trying to accomplish at the time as "one computer for the entire planet."
The initiative didn't sit well with the bitcoin faithful.
"There was a lot of bitcoin maximalism and there still is," Wood told Protocol. "It led to a very kind of toxic environment. We were trying to push cryptocurrency blockchain technology forward. We didn't have any ill will towards bitcoin. We were just technologists. But we got a lot of hate from the bitcoin world, a lot of unneeded, unreasonable skepticism and sometimes worse. It was almost like the crypto version of nationalism."
Ethereum eventually became the second most-used blockchain in the world after bitcoin. The ether coin used on it now has a market cap of more than $330 billion.
But in 2015, Wood left and started a blockchain software development company called Parity Technologies with Jutta Steiner, a mathematics Ph.D. and former chief of security at the Ethereum Foundation. Two years later, he co-founded the Web3 Foundation, which funds teams focused on decentralized web technologies.
Wood left partly because he didn't think Ethereum was doing enough to pursue the promise of blockchain technology: a truly decentralized ecosystem. It had become just another network competing for dominance in an increasingly crowded blockchain world.
It had also become susceptible to the "crypto maximalism" that Wood encountered when he helped launch Ethereum. "There are now ether maximalists," Wood said. "You realize, 'Oh, maybe this is just a part of human nature and there's no getting away from it.'"
But Wood wanted to get away from that blockchain turf mentality — or to at least "mitigate it by having the ability to have multiple chains."
That's the vision for Polkadot, which Wood and two co-founders, Robert Habermeier and Peter Czaban, launched in May 2020, with support from Parity and the Web3 Foundation. For Wood, it's an opportunity to start from scratch.
"We were just kind of thinking how we could maybe create the next version of Ethereum if we sort of had a greenfield to design upon," he said in a video.
Polkadot wants to create a new multi-chain ecosystem that would serve as a bridge to other blockchains, doing away with what Wood described as "a patchwork of independent and isolated legal systems of the internet."
Polkadot is just getting started, but propelled no doubt by Wood's reputation and standing as a blockchain pioneer, its dot token is now the 9th biggest in the world with a market cap of more than $25 billion.
In an interview with Protocol, Wood talked about his journey from Ethereum to Polkadot, his vision for the third iteration of the web and his belief that crypto and blockchain technology will prevail because "technology has changed human civilization over the ages and isn't going to stop now."
(This interview was edited for clarity and brevity.)
You've said that part of your goal is to veer away from "chain maximalism." Can you explain that, especially in the context of your past as co-founder and former chief technology officer of Ethereum?
When I started Ethereum in early 2014, there was a lot of bitcoin maximalism and there still is. It led to a very kind of toxic environment. At Ethereum, we were trying to push cryptocurrency blockchain technology forward. That was our key aim. We didn't have any ill will towards bitcoin. We were just technologists. At least, I speak for myself. I don't speak for anyone else necessarily. But we got a lot of hate from the bitcoin world, a lot of unneeded unreasonable skepticism and sometimes worse.
It was almost like the crypto version of nationalism. It's like, "Well, I'm behind this team, and therefore I cannot be behind any other team. Any other team must be an enemy. And if you used to be part of our team, but now you're on this other team, you must be a traitor." There's this kind of mentality.
One of the things I wanted to address with Polkadot was to try to bring us into a sort of slightly less kind of crypto nationalistic era, where we had many different chains operating under a sort of common system, and try to reduce this idea that if you're part of one you can't be a part of another, which seems to be really prevalent in the crypto ecosystem.
What we see now of course is obviously bitcoin maximalists. But there are now ether maximalists. You realize, "Oh, maybe this is just a part of human nature and there's no getting away from it." Polkadot wanted to try to ease this a little bit, to mitigate it by having the ability to have multiple chains.
Can we revisit the time you left Ethereum and parted ways with Vitalik Buterin, reportedly due to a disagreement on the blockchain's direction?
We still retain cooperation about the future. I went to one of Vitalik's Ethereum 2.0 seminars. Vitalik came to an early Polkadot retreat where we were sort of designing and coding. So it's not like we don't want to cooperate with each other. It's really just that Polkadot, for me, was the chance to explore something new.
Whereas [with] Ethereum, we need to support all the teams that are built on Ethereum 1.0 and we need to work with the ecosystem and the foundation in order to bring this forward. There are all sorts of legacy concerns. Someone needs to take responsibility for these legacy concerns, but it didn't need to be me.
With Polkadot, I had the opportunity to really explore the design space of blockchain. I wanted to look into an alternative, maybe more interesting, or potentially more significant innovations, like the ability to have chains of a completely different nature, existing under the same roof and then scaling out that way. Greenfields for me has always been for me a more interesting proposition, the ability to really design something new, and see how it works.
This reminds me of the early years of the web which was supposed to create a more connected but also more decentralized, democratized world. That hasn't happened. How do you see that happening with Polkadot?
I'm always a little nervous when I use the term democracy [which means] a lot of different things for a lot of different people. The word I prefer to use is trust-free or trustless, essentially, moving to the ... paradigm where, in order to make a decision, I don't need to trust somebody on what the outcome will be. I can understand how the world works well enough myself in order to make that decision. I don't need to hand my interests to someone else who will wield them for me and trust and have faith that they do it in a good way beneficial for me.
That's really the sort of underpinnings of Web 3. The motto of Web 3 is "less trust, more truth." It's about bringing the world closer to the person, and avoiding the necessity to go through intermediaries and institutions.
How do you view the role of governments as you build this blockchain of blockchains?
Technology defines the boundaries of politics. It always has been. It defines everything. It defines the boundaries of art as well. I think it would be foolish to assume that the political system isn't going to change when technology makes change necessary. That simply wouldn't make sense to me. Technology has changed human civilization over the ages and isn't going to stop now.
Whether or not politicians agree with what technology makes possible for me seems a fairly secondary factor in what change will happen. My fundamental belief is that technology controls, ultimately, politics — not the other way around.
Some politicians, I think, are super great and can completely understand that technology changes the landscape of humanity. Others have a different view and they think that maybe the political establishment can basically do anything they want.
In a way it's like the rise of the web, right? Governments had to adapt to this technology. Are there reactions that you hope will not be repeated given how the web has evolved over the past 30 years?
I think that story is still playing out and honestly I look at Web 3 as just the next chapter. In terms of politics in general, I would hope that we don't believe that through sheer force of will we can enact fundamental changes. I think fundamental changes come along when the environment changes. The Afghanistan story should serve as some sort of lesson. Sheer force of war really can't change the world.
I sometimes start my presentations with a quote from Buckminster Fuller: You can't change the world by struggle. The way to change the world is by basically creating a new paradigm that just renders the old way of doing things irrelevant.
When I first really understood how blockchain works, how bitcoin works, back in 2013, I started realizing that this is a new paradigm. It's a paradigm that's going to invalidate an awful lot of the way that we work, and have worked for the last few hundred years. That was what got me excited. That was what got me into it.
After being in this ecosystem industry — it is coming on eight years — it still is. I still find it an exciting proposition.
Investors and technologists view the rise of blockchain and crypto as a massive business opportunity. How would you explain the business model for Polkadot?
With blockchain and crypto, we've got another new paradigm. We've got the ability to interact, economically, with another individual, without having to go through an intermediary.
It used to be that we had this one-to-one thing where you go to a shop and it's you and it's the shopkeeper. And then we kind of got a one-to-many thing where we've got banks and banks deal with many different people. What blockchain facilitates is direct economic interaction. Everyone can be interacting with everyone else at the same time. We do this through decentralized exchanges. Lots of people on the same exchange, they're all interacting not with a specific exchange, but with each other. There isn't a middleman.
This kind of peer-to-peer economic mindset, this peer-to-peer economy, is going to rewire a lot of how the world works. It's difficult to predict just how much of the global economy can change to peer-to-peer. Ultimately, this technology is still growing. It seems to me that it's probably going to be on the level of, "Wow, we never predicted that" than "Oh, that was just a fad." It's gonna be hard to predict just how much it can change.
What do you think of the way the current big players in this new paradigm — Coinbase, Ripple, Ethereum — have evolved?
Coinbase is a Web2 entity. It's a gateway. It's a centralized exchange. It's very much a company behind it.
Obviously, Coinbase has had a lot of media attention. But it's not, for me, at the frontier. It's still providing an old-world service. That's fine. I wish them the best, but it's not quite Web3.
Then you've got Ripple. Again, Ripple in my mind is really just reworking consensus technology for the private sets of identities. It's like Ripple is really there to try to connect banks together, in my mind. I never really saw it as being anything that's offering anything to humanity as a whole or trying to reimagine human social, economic interaction.
Ethereum is great. This effort to decentralize, on that we are very much aligned. There are some other things that are not the decisions I would make.
I think it's great that Ethereum is cheerleading this decentralized Web3 paradigm. I think Polkadot has a lot more to add.
For the other two entities, I think it's great that they're there. But it's not quite the Web3 wholly centralized, no controlling access behind them, let's remove the intermediary, the middleman — I think both of them still largely act as middlemen for their products.
