Tagion is moving at full speed ahead and to get the latest news, we caught up with the CEO, Theis Simonsen, who was on his way home from another long day at the office. What started as a short update on the project ended with him giving a broader perspective on the global state of things. Enjoy the read, and if you have any questions for Theis, he will be happy to answer them in the forum.
By Tobias Ambs-Thomsen, CMO, Tagion
Hi Theis, thanks for taking the time. Can you give us an update on Tagion? What has happened during the last three months?
A lot! And there is also a lot going on right now. Firstly, we have released the first full test node on the network and proven that our technology works. That’s a massive milestone after two and a half years of development. When we release the alpha-node later, we will have a fully developed system that can run an internal network and bridge between the nodes. It is also an intercommunication system and a real public network with the public discovery of nodes; a fully running system, in other words. So, yeah, every day we are getting closer to completing the production of the system.
Obviously, this is only the first layer of the system – the database and the virtual machine. The next step will, of course, be to implement and fine-tune the governance concept. I might be getting a bit ahead of myself here, but we have just finished some really good discussions on the governance system.
Back in December, we presented our ideas on the governance model to our community.
We knew that our concept was not flawless, but it followed all of our guiding principles, which are genuine democracy and shared ownership. The following discussion was fruitful, especially the talks on our Telegram chat, which gave us a lot of input on how to improve what we had presented. This led to a new round of ideation and iteration over the concepts and ideas.
Fortunately, we onboarded a new member to the team, Carsten Keutmann, from another project called Digital Trust Protocol. He has undertaken a lot of research and development within the area of digital trust for open source projects. Digital Trust Protocol is a claim system that is built on trust among members. In the real world, two people interact and decide if they trust each other or not. The two of us might build up this trust, or you might trust me, but I distrust you – or it could be the other way around or we just totally distrust each other. But the question is, how is this translatable to the virtual world without any physical interaction?
In our new proposal, I can issue a trust claim saying that I trust you or I distrust you for that matter. That’s the public claim in a protocol and a data format that Carsten Keutmann has developed within the last three years.
We have had a great many discussions and carried out a lot of further research within the security mechanisms of the current protocols, looking at how to solve the issues we have encountered.
And just today, we have figured out a way to combine his research with our original ideas and turn it into a practical governance model that we call Proof of Community.
It works through a trust score system, or you could call it a trust graph with connections to external sources. So, the energy you put into the network affects your score as a part of the Proof of Community protocol.
Proof of Community works on a scoring mechanism that can help you to decide which node you trust and which network you will follow in the case of a graph fork or when you boot up and access the system. Then you can pick the nodes that you trust the most and connect with them and their connections.
Secondly, this model helps you to determine which nodes you should validate and move from the prospect-node pool to the status of an active node. For this to happen, you need a certain trust score. The higher the trust score, the higher the probability of it becoming an accent node. In this way, the title, Proof of Community, makes perfect sense as it will let the people who are using the tokens and care about the wellbeing of the network trust each other within this context. That’s the community.
I was going to ask you the next question. What is the most exciting thing about Tagion right now? But I guess you have already answered that…
That is not entirely true. What excites me the most are the people who are joining the project. We have been having an inspirational exchange of ideas with the people who follow us on social media channels and those in our team. I think it’s generally a fascinating process that word is spreading, and we are starting to see growth within our community.
That was a quick update on the status of Tagion. Let’s move onto the rest of the world. I know it’s a big question, but how do you see the financial situation following the COVID-19 crisis. Is this situation favourable or threatening for new monetary systems, such as Tagion?
(Laughing) There must be just as many opinions on this as people, and in reality, no-one knows for sure. But a good start would be to look back to the financial crisis of 2011 and see how the central bank and the financial system tried to cope with the basic lack of liquidity and assets at that time. They printed more money. That was the solution then, and will most likely be the solution now.
Money is pumped into the financial system and yet, the system still cannot sustain itself. The original market economy has ceased to exist. But obviously, those that control the current financial system will try to protect themselves for as long as possible. I foresee tighter regulations with cryptos and even transactions with inflated fiat currencies.
I am not saying it will happen tomorrow, but at some point, the system will not be able to fight this disease anymore and implode. There are several signs of this, with zero interest being one of them.
Even though COVID-19 has now removed the focus, the US has been running with an enormous budget deficit. There is no way this can be sustained year after year. To me, it is looking like a derailed train that is impossible to stop.
I also see issues in the Eurozone. The countries in the North have massive surpluses on their balance, whereas the countries in the South are fighting with huge deficits. So, the North keeps lending money to the South at increasing interest rates and with growing demands. So they become weaker and more miserable every year. The North feels they are supporting the poor economies in the South and the Southern countries think the greedy North is exploiting them.
This imbalance does have its short-term benefits. The financially weak countries get an export advantage as their products are cheaper. This also helps the other EU countries in the international market as the euro loses its stamina due to the weaker economies.
But as the EU is not a republic, the imbalance is not settled and keeps growing. At some point, economies, such as Italy or Spain, might decide they have had enough and break out of the euro. They might install the lira again – devaluate it heavily – and pay back the loans in that currency. What will that mean to the lending countries? It is the same trick that was used by Germany in the Weimar Republic…
This is all speculation and who knows for sure what will happen, but in my opinion, the current system cannot be sustained due to the simple fact that more and more money is flushed into the system and there is nothing to back it up. At some point, it will undergo significant changes.
Wow, that is a wild scenario you are painting there. How would a new monetary system such as Tagion be able to help the situation in, let’s say, Europe?
If you install a system, such as Tagion, as the backbone currency for a new financial system, you will enable the development of more healthy economic microsystems.
Something like this is already happening in Argentina. After the bankruptcy of the state, local markets started to form. To participate, you needed to offer something: a chicken or a service, such as a hairdresser, and so forth.
There is no currency, but the free market decides how many haircuts you can get for a chicken. These markets have now grown in size, and it will soon get to the point where a chicken gives you three haircuts, and so you need a way to ‘store’ the surplus haircuts.
I mean they could also use coloured stones for that. The value is in the trust that the hairdresser will come back next month and cut the chicken owner’s hair again. Because that is what money is –
trust. Do I trust that whatever object you give me, whether it be dollars, euros, Tagions, or coloured stones, can be traded for a piece of bread tomorrow? There is no other backing anymore.
With Tagion, the market could create its sub-dart or local currency, with no inflation or government interference – and with a smoother transfer of tokens rather than coloured stones. In this way, the local communities could govern it themselves. The group could control their demand and maintain a more or less steady flow of money.
And in the world village, we live in; this does not need to have geographical borders. A gamer community can have their own coin – a loyalty club – a football league…
If more markets connect, then we could have a situation where a new monetary system is put in place. But this time the value would come from goods and services, rather than money printed from thin air.
Is that actually going back to the roots of money? Where a King would basically write a note or make a coin, and this token would only have value because it was backed by the King’s power. But instead of the King, we’re now trusting each other and the community. Is that a good example?
Yeah, it is a bit. The community approves the algorithm that issues money or the governance methods. So, the money belongs to the community. It’s common to them, so it’s their money.
That was a long answer to your short question… and the latest developments in places like Ukraine seem to prove you right. Here, the government has just issued new monitoring laws for sums of cash above 170 euros. What implications do you think this law will have on the growth of cryptos?
It will make people use cash even more and move from there into cryptos. We have a close connection to Ukraine, and we know they are already using cash for most transactions and are generally very fond of cryptos as their trust in the banking system is already at a minimum. With regulations like this, people are being pushed towards alternatives if they want to keep their freedom and privacy.
We will see how it all plays out. Thanks a lot for your time and we will talk again soon.