One of the hardest things an engineer can do is throw away months of work, but in the six years that Dan Hughes spent building a new alternative to blockchain in self-imposed isolation, he did it at least twice.
Partly he’s a perfectionist, partly his goal is unfathomably grand. Hughes has built a new version of the underlying ledger powering bitcoin, the cryptocurrency created by the mysterious programmer Satoshi Nakamoto. His goal is a complete transformation of data-sharing and transactions worldwide—and possibly, new plumbing for our future internet. Hughes’s vantage point is the sleepy city of Stoke, England, a two-hour train ride north of London. Few tech startups base themselves in this former mining haunt, with the biggest corporate inhabitants Vodafone and Bet365, an online gambling firm. Next door to Hughes’s gray office block on a quiet main road is the Newcastle Bridge Club. But the silence here is what’s important. It gave Hughes, 39, the space to think up highly complex computations with minimal distraction.
Engineers can be an isolated bunch, so it’s no surprise that some of the most successful technology services have stealth beginnings. The founders of WhatsApp refused to consort with other tech founders or attend conferences before they were suddenly bought by Facebook for $19 billion, and Skype had similarly isolated beginnings in Estonia. Hughes, who previously helped build the software behind NFC mobile payments, is only just starting to come out of his shell. He’s attracted $1 million in investment from a leading European venture capitalist, more than 19,000 people follow his work on the messaging app Telegram, a popular platform for blockchain enthusiasts, and eight engineers have recently flown in to Stoke from Argentina, Australia and elsewhere to work with him, along with ten more staff in London. Their hope is for Radix, when it launches in late 2019, to realize the as-yet-unfulfilled dream of blockchain which, along with bitcoin, would probably become obsolete in the process.
Hughes worked in his dining room every day, writing code virtually non-stop until around 4am the next morning.
Blockchain was the technology buzzword of 2017 but has since lost its sheen, with executives mentioning the term less and less on earnings calls, and a recent report from McKinsey finding that most corporate projects are stuckin pioneering mode. The technology’s big problem is that it doesn’t scale. Millions of people use credit cards everyday, but the original blockchain that underpinned bitcoin could only handle a few hundred credit card transactions at a time. That meant it could never go mainstream. Ethereum, a computing platform built on its own blockchain network, has had similar problems. When more than 100,000 people flocked to its most popular game in late 2017, for instance, the entire network seized up.
Hughes believes the answer lies in sharding, or the process of cutting up a distributed ledger into 18 quintillion pieces. His startup Radix is a sharded, decentralized ledger that’s an alternative to blockchain in somewhat the same way Firefox and Chrome have become alternatives to Microsoft’s Internet Explorer. The difference is that, theoretically, it can handle hundreds of millions of transactions at once. This means that if Radix is successful, it could become the platform on which entire nations of people can finally access blockchain-style services.
Saul Klein, who runs London venture capital firm LocalGlobe, believes in Radix enough to have invested $1 million in the company last year. The internet will eventually be “completely rearchitected” on crypto networks, he says. Klein picked Radix because of Hughes. “The last time I had an experience like that was when I met the guys in Estonia when they developed Skype,” says Klein. “To have that level of conviction and focus is incredibly hard to do inside an echo chamber.”
Hughes was inspired by the original code behind bitcoin, but he built Radix and its underlying protocol, Tempo, from scratch. “There’s not a single line of bitcoin in there,” he says from the snack room that sits adjacent to Radix’s small, open-plan office.
The one conventional part of Hughes’ technology journey was getting into Y Combinator, a prestigious Silicon Valley program for startup founders, in 2017. It introduced him to a storied network of venture capital firms and startup founders, but Hughes dismisses that part of his story as a fluke. The real work came from hours spent behind a bank of monitors, writing code, throwing it away and writing it all over again.
“The greatest minds work in isolation,” says Hughes, who’s of slim build and speaks with a northern-English accent. He first heard about Bitcoin in 2011 and a year later finally got around to downloading the 15-page document that became known to blockchain followers as the Satoshi White Paper. In it Nakamoto, a pseudonym for bitcoin’s creator, whose true identity is unknown, laid out the technology’s underlying architecture in a complex array of numbers and tree diagrams. It took the worlds of technology and cryptography by storm.
Hughes played around with the code, trying to modify its architecture in a process known as forking. He probed at the pitfalls and realized that the more people used bitcoin for transactions, the slower the system would become. It was like the fable of grains of rice on a chess board, Hughes says, in which doubling the grains for every square led to a mountain of exponential growth. So Hughes decided to build his own version of Nakamoto’s formula. He moved out of his small home office and took over the dining room of his house in 2012, removing the dining table and replacing it with stacks of servers, filing cabinets, white boards, six screens and a mass of cables. “Much to the anguish of my wife,” Hughes says between sips of tea.
Over the next six years, Hughes worked in his dining room every day, waking up to write code virtually nonstop until around 4 a.m. the next morning. He lived off his savings and some investment returns he’d made from some bets in mobile technology. There were moments of severe depression, he says, where he thought blockchain’s scaling problem was insurmountable. He knew it when the system would start hitting that same, exponential curve, the ever multiplying grains of rice. “Whenever that started to happen, it was game over.” A particular low was when, after 18 months of work on one iteration, he realized he needed to start from scratch again. “Open a new file. Learn new lessons. Start again,” he says. When money started to become tight, Hughes and his wife sold their four-bedroom house and downsized to a smaller, two-bedroom home.
“It’s noise and egos and people fighting over things that don’t really matter.”
Hughes was used to ensconcing himself in his own creative world. Though his childhood in Stoke was punctuated by weekends in working men’s clubs, where card-carrying union men would play darts and bingo with lashings of lager, and most other boys were playing soccer, Hughes found an instant attraction to computer programming. “No one throughout my entire school life was interested in coding,” he remembers. His dad, a bus driver, had brought home a Zx81 computer when Hughes was about five, laying the tracks for Hughes to eventually become a successful mobile developer. But it’s with Radix that Hughes could make his greatest mark, if the technology takes off and early adopters decide that it works.
What finally emerged in early 2017 was the simplest alternative to blockchain Hughes could come up with. To add more complexity to Nakamoto’s creation would have been to “kick the can down the road,” he says. Tempo, the fourth iteration of what Hughes started working on in 2012 contains only about 10% of any of the code he wrote over the last six years. After moving into the new office in 2017, it took about half a year to readjust from regular night-owling.
Today the Radix network is being road tested by developers and a few early adopters: Metalyfe, an encrypted Web browser, has tried running on Radix’s technology, while Pillar, a cryptocurrency wallet that has raised $30 million, is planning to build apps on Radix, according to Piers Ridyard, Radix’s energetic CEO. Ridyard can speak at length about the future potential of decentralized technology and serves as Hughes’ public evangelizer.
“I’m not well known in the space,” Hughes admits. “It’s noise and egos and people fighting over things that don’t really matter. It was an energy sap.” He’s also wary of the skepticism around blockchain, and the scams deployed around initial coin offerings. “My opinion is just ignore it all, and the tech will speak for itself.”
This article originally appeared on Forbes