Why PISA Research?

Patrick McCorry
anydot
Published in
6 min readMay 19, 2019

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tl;dr want to support us? check the end of this article.

I recently announced that I will be leaving the university setting to pursue building an open-source financial system via PISA Research.

Back in 2013, I was one of the first academics in the UK to take Bitcoin, the internet of money, as a serious research topic. While other academics rubbed it off, I fell in love. But overtime, plenty of reasons emerged that has led me to leave, both morally and rationally. Someday I’ll write about the good, bad and ugly of academia. But for this post, the motivation to leave is simple, I’m really an engineer at heart.

In general, my research has focused on cryptocurrencies from a system security and implementation perspective. I implemented one of the first cryptographic protocols as a smart contract (anonymous voting) and pushed forward an empirical evaluation of state channels as a scaling solution via the battleship case-study. To help contribute towards the engineering efforts in cryptocurrencies, it feels like the right time for me to become a cog in this ever growing movement.

My Priority and Vision for PISA Research

For a long time I was frustrated that cryptocurrencies lost significant traction for e-commerce and peer-to-peer payments. When I started my journey, I truly believed the primary purpose of cryptocurrencies was to become a global payment system. On hindsight, I was a bit naive.

We should look historically at how cryptocurrencies have been used over the past 10 years. While someday cryptocurrencies may become a global payment vehicle, the real potential for cryptocurrencies is so much more exciting than just e-commerce. They are increasingly becoming an open-source, global and non-custodial financial system.

There is clear evidence today that more than half of all transactions on Ethereum interact with ERC20 token contracts and most people interact with cryptocurrencies using off-chain custodial exchanges.

To put it simply, pseudonymous users are trading assets with real-world value on a global scale, without the assistance of trusted authorities.

While the real value for 90% of tokens are questionable, it is incredibly exciting that cryptocurrencies can actually facilitate peer-to-peer token swaps in real-time. In the future, it is foreseeable that tokens will represent real-world assets and securities with intrinsic value. Most importantly, there will be a native currency, the sound and censorship-resistant money, as the unit of account.

For a long time, I’ve rubbed this off as the get rich quick crowd, but there is an easy to understand reason why high-frequency trading is one of the biggest use-cases for cryptocurrencies. They provide the first real platform that lets anyone, regardless of geographical location, nationality, gender, etc to participate in a free market.

Thus the priority for PISA Research is to research and build the missing core components for this open-source system — to increase access and participation in global exchange markets — to swap currencies, assets, securities, tokens representing real-world value, etc.

To achieve the above, it is crucial the cornerstone for all services provided by PISA Research relies upon transparency and accountability. While traditional companies can only promise “don’t do evil“ or that “their word is their bond”…

PISA Research will strive for self-enforcing accountability such that that we cannot do evil without suffering significant financial penalties.

We believe the path for achieving self-enforcing accountability requires us to build non-custodial protocols with dispute-free transcripts. If there is any opportunity for us to cheat customers in whatever manner, there should always be cryptographic and indisputable evidence of us cheating — which can be used to directly financially penalise us.

To our delight, recent comments by FinCEN actually encourages the non-custodial approach of minimising control of services by a central authority!

What is the short term focus for PISA Research?

In the short term, it is very clear to us, that off-chain protocols are the cornerstone for any future open-source financial system.

Off-chain protocols are exciting as parties can transact amongst themselves without interacting with the global network. They can bypass all block latency and network fees in a non-custodial (and lightning-fast) manner.

Evolution for Off-chain Networks

There are three components for an off-chain ecosystem:

  • Channel-based networks: A peer-to-peer routing network to facilitate lightning-fast transfers amongst hubs.
  • Non-custodial operators: Any service can run their own non-custodial hub to facilitate transfers amongst their customers.
  • Settlement System: Basis for the non-custodial property for all off-chain protocols

We envision the lightning network (and its derivatives) will facilitate rapid bi-directional transfers amongst non-custodial operated hubs.

Unlike payment channel hubs, the invention of commitchains (like Plasma and NOCUST) are truly permissionless. There is no requirement for the operator to lock up coins to facilitate payments — thus there is no financial barrier to operate a non-custodial hub. Instead — anyone can simply run their service — wait for customer deposits — and then co-ordinate off-chain transfers on their behalf.

Thousands (if not millions) of commitchains and routing nodes, run by strange and pseudonymous identities, will eventually emerge, for whatever service they are offering.

However there is a fourth component that underlies the security for all off-chain protocols:

  • Watching network: Accountable third parties who watch and protect off-chain protocols for parties who wish to go offline.

One significant assumption that underpins the security for all off-chain networks is that parties need to remain online and synchronised with the network. If they go offline for an extended period of time, their coins can easily be stolen.

Thus our short-term goal is to help contribute towards the success of off-chain protocols by building PISA, an accountable third party watching service, for Bitcoin and Ethereum.

The accountability guarantee for PISA ensures that if we fail to protect and refund the customer within a reasonable time period, then they have indisputable evidence of our misbehaviour and thus can inflict significant financial penalties upon us — in essence they can hold us financially accountable.

While PISA is arguably an unsexy protocol to build, it is also one of the most critical infrastructure components for off-chain, with a known solution that we are building right now.

What about the long-term focus for PISA Research? We have already discussed the future we foresee for cryptocurrencies — a global, non-custodial and open source financial system.

We actively advise other projects who share our vision, whether they are building off-chain networks or new blockchain protocols, in terms of protocol design.

Why do we help advise? One of our core strengths is that we have a track-record for solving outstanding research challenges. The most interesting challenge right now is how to build a non-custodial operator who can co-ordinate the execution of smart contracts on behalf of others — which we are taking a stab at.

But the biggest commitment we wish to make as a long-term focus is to help build the cryptocurrency technical community. I have volunteered a significant portion of my time throughout the past two years to teach free developer workshops and to organise large-scale developer events (master workshops). We hope to continue this community outreach in London and abroad to help bring new developers quickly up to speed.

Want to help PISA Research?

We are still a small, lean and jedi-like team. But that doesn’t make us invincible, we are one cog as part of a larger movement to push forward this open-source financial system.

Fund-raising. We have sufficient funding for the immediate short-term thanks to the Ethereum Foundation, Ethereum Community Fund and Research Institute taking a punt on us.

But we we will need to seek a significant fund raise to provide run way for us to contribute towards this open source financial system. If you are interested in financially and strategically supporting our vision, then please contact me at patrick@pisa.watch.

Supporting us should not be viewed as “a bet that off-chain works and thus accountable watchers will work” — it is just a single project to kick-start PISA Research. Instead, if you are supporting us — it should be seen as betting that our team will earnestly focus on building tools and contributing towards a new open-source financial system.

Thank you. Over the years, I have benefited incredibly by in-kind support and PISA Research wouldn’t exist without it. It has been a long journey from high-school, IBM, university, PhD advisors, post-doc advisors, community mentors, etc. I won’t name them, but they know who they are. I simply hope to contribute the knowledge I’ve obtained back to the community in whatever manner I can.

To the moon and beyond 🚀🚀🚀🚀🚀🚀

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Patrick McCorry
anydot

In-house Professor @ Infura. Sometimes called stonecoldpat ☘️