Q&A With Halsey Minor, The Man Behind CNET, Salesforce, and Now VideoCoin
We spoke to Halsey minor about a novel concept in video encoding and decoding using a new type of blockchain.
It’s not every day that we see a big player in the Web 1.0 and 2.0 space make a token-based blockchain network, and it’s even rarer to see anyone start one that caters to business-to-business services. However, Halsey Minor—a man who either founded or led ventures like CNET, Salesforce, Google Voice, Uphold, Voxelus, and OpenDNS—is the type of person who built his reputation by filling gaps in the markets he enters.
His latest project, known as VideoCoin, is an attempt to use blockchain technology and cryptocurrency to address a pervasive problem in the video streaming and encoding industry in the internet, incentivizing data centers with unused computing power to commit some of their resources in exchange for a reward through a complex combination between proof-of-work and proof-of-stake models.
Cryptovest had the pleasure and honor of speaking with him before his trip to the World Blockchain Forum in London and asking him about this new technology.
The story of VideoCoin
The idea behind VideoCoin came as a result of Minor’s work with LivePlanet, a company that makes cameras that can stream VR video and offers cloud media services revolving around stereoscopic VR.
“At LivePlanet, we have this very deep video expertise. We take 4K video and ingest it from a VR camera and then we send it to all major platforms, which is very much like Fox does with their video as they have to send it to like 9 different platforms, different devices, different services, at different bandwidths,” Minor said.
With such services, not only are bandwidth requirements much higher than with 2D video but there’s also a need for more storage and processing power to stream the video to consumers. On top of that, we can pile on the fact that it gets more complicated when delivering video at different resolutions.
“My guess is that Netflix has a version [of its videos] for every streaming rate, for every device. It’s called encoding and you have to do it for every single device if you want to optimize it. So, a big cost has now become this process of video as you encode it for all these different devices. You look at a totally different video on your iPhone as you do on your iPad, or your Galaxy Gear. They’re all processed differently.
Every device and every chip has a video encoder and decoder so that the video encoder takes HD video that’s 50 megabits and they reduce it down to 5,” he said.
Problem & solution
Halsey Minor approached blockchain technology with a stark level of skepticism while he was launching Uphold, making him doubtful about whether there were any proper use cases for it outside of the cryptocurrency and fintech world.
After seeing Ethereum’s blockchain, however, he caught a glimpse of something that sparked an idea.
“When I was launching Uphold, at the time, I was very cynical about blockchain applications. It wasn’t until Ethereum started taking off that I really started thinking deeply about whether my early perceptions have been wrong about whether there were real blockchain applications,” Minor told us.
The inspiration for VideoCoin came from how Ethereum uses the computing power of individuals all over the world to run its vast transaction network. Considering that data centers have a lot of unused resources at their disposal, it was only a matter of adapting the Ethereum model to the world of processing video streams using these resources.
“So, we realized that because 20% of data center capacity is effectively unused—because you’ve got this $20 billion of infrastructure that’s simply not used for anything… Every one of those machines has an encoder. So, they’re all sitting there. They’re all capable of ‘mining’ video. And video’s 80% of the internet. It’s growing at 25% annually, compound, per year, and video itself is an inflection point where we see 4K, 8K, VR, videos becoming reality, and it’s a very exciting time to do video anyway just because of everything that’s going on.
For the first time, crypto absolutely allows for the Uber/Airbnb shared resource model to exist [in video streaming] because it provides a payment mechanism… These machines have chips in them that allow them to do encoding, the coin provides a payment system that works universally, [...] and the software itself and various proofs can prove people’s computers can do something and can prove computers did do something,” he said.
The blockchain would work by providing incentives to data centers to commit their unexploited processing power and other resources to stream video to end users. Halsey Minor told us that this makes VideoCoin—at least from the outset—a B2B venture, effectively putting it in a position where it’s competing with Amazon Web Services and other virtual cloud computing providers.
“We’re very data-center-focused. We’re not really aiming at consumer use cases. We’re pretty much going after massive amounts of data center capacity at the start. But we think that over the long term, the same basic economics that drive mining [will be available], where miners with the lowest cost of power make money mining, and when they make money, they buy more hardware. That’s kind of where the model, I would say, is going to with cloud-based computing,” he said.
Proof of… what?
Though the proof-of-work model has reigned supreme in the cryptocurrency world for several years, it quickly saw itself challenged by other approaches to consensus on the blockchain. This is nothing new.
However, VideoCoin’s model was specifically tailor-made for the video streaming industry. Although we probably won’t see its consensus and mining model used by many of the top coins, it doesn’t need to be popular.
It just needs to work.
VideoCoin’s blockchain aims to be one that separates consensus entirely from mining in its equation. The eccentricity of its inner workings have been made specifically so that data centers have a reason to use it while at the same time providing a clear benefit to both end users and content platform providers.
“Some [cryptocurrencies] like Bitcoin create arbitrary proofs to solve. That’s not useful work. What our miners do is useful work… We have proof of storage, proof of encoding, proof of streaming, and we have one thing that I don’t think anyone else has done—and that’s because we have a lot of data center experience. We have relay miners, which can connect with Amazon or Google so you can bring all of your video infrastructure into our networks. You don’t have to give up what you have; you can just extend it,” Minor said.
The easiest way, perhaps, to explain to oneself how this coin would be mined involves imagining proof-of-storage, proof-of-work, and proof-of-bandwidth models all into one single package. The result of this mining—aside from the block reward—is everything needed for a full-scale decentralized broadcasting service spread across multiple large data centers.
Not only is this algorithm ASIC-resistant—because of the unique way it executes mining—but it doesn’t even need that resistance. VideoCoin’s chain operates on a “the more, the merrier” paradigm in which finding more efficient ways to mine would actually help it reach its goals that much quicker.
We’ve spoken about the process of encoding, storing, and broadcasting video in exchange for tokens, but what about the very process used to add and validate blocks into the network?
Halsey Minor explained that staking will be used for the sake of speed.
“In order to run at the speeds that we need, [so that] when you click on a video, it runs instantaneously, the staking part of our network is really the most important part because every data center will be staked so that we can guarantee that the resource is online and ready for activity… I think it’s much easier to build a staking model for a specific application than it’s going to be for Ethereum to build it for everybody,” he said.
A new approach to ICOs
The one thing that probably sets VideoCoin apart more than its peculiar transaction model is the fact that it stands out as one of the few coin offerings that revolve around a business-centric product. Once this project gets up and running—sometime in the middle of next year, perhaps—it will provide a service that is invisible to the end user but provides those who volunteer their excess computing resources with a decent bounty.
The combination between speedy service, a hybrid mining-and-staking solution, and the answer to a real-world problem could see this particular project make a use case for blockchain technology that will not be met with disappointment.
We hope to follow up with Halsey Minor when VideoCoin’s beta network launches.