Rijk Plasman has the floor:
How I look back at the past 4 years as founder of Gulden
In 2013, I started development of Gulden with a developer. Gulden started out with the Litecoin codebase as its base. We chose Litecoin because it was faster in daily use than Bitcoin at that time. We launched Gulden on April 4th 2014 and the first few blocks were mined. On April 8th 2014 the first couple of Gulden were traded at 0.0003 EUR. That value was determined by traders on an exchange, so it wasn’t a pre-determined value. It was true supply & demand.
Gulden is a cryptocurrency with its own blockchain, opposed to a lot of coins/ tokens that use Ethereum. In 2014 the crypto market looked very differently, there were a lot of projects, but it was a lot harder to launch your own cryptocurrency. Tokens didn’t exist yet. Oddly enough, there were a lot more checks on code, there were more demands and there was a lot more technical involvement. Being decentralized was an absolute necessity, something we definitely agreed with. We always experienced these demands as guidelines, but we did draw up our own plan. We didn’t want to be just another Bitcoin clone. In the months after we fixed a lot of bugs and a lot of work went into the code of Gulden. The amount of users and miners increased. Several merchants popped up as well.
What was so interesting about that phase was the increasing interest in cryptocurrency, but at the same time it was very hard to buy and use. This was a chance for Gulden and usability is one of our strong suits. With my background as UX designer I’m continuously working on usability, it’s almost an obsession. That was also the reason I started Gulden. I always found the tech of Bitcoin fascinating, but usability was a miss. That is what I wanted to solve with Gulden.
Together with Nocks we created the possibility to purchase Gulden from the website using iDeal. You could now easily exchange your EUR for Gulden. The other way around was also available quite soon after. That was a comforting thought for beginners. We implemented this functionality into our applications quite fast. That was unique at the time, that you could send money to your bank account from the Gulden apps. Behind the scenes it would be converted back to EUR. Usability. We were, and still are for the most part, one of the few coins with such a complete range of apps. We have an app for every large platform, that you can even connect to one another. Your iPhone wallet can be linked to your desktop app for example.
At the end of 2015 our team welcomed South African developer Malcolm. This was a game changer, because of his talent and skills. We were able to take development to a higher level. We didn’t have the knowledge to improve the blockchain itself, to really innovate. Thanks to Malcolm, we did. First, the Litecoin base was switched to Bitcoin. This gave us the possibility to implement the last Bitcoin updates into our blockchain. Our view on the system has always been realistic, we knew what was necessary to make it applicable to daily life.
One of those elements is the speed of the system. Sending and receiving a Gulden was always direct, but afterwards a transaction needs to be confirmed. Bitcoin requires 6 confirmations that can take up to an hour. After 6 confirmations a transaction can be considered secure and complete. A payment method that requires an hour isn’t a realistic figure for daily use, to pay for a cup of coffee. There were third parties that took the risk of these confirmations and marked a transaction as complete at 0 confirmations. But you can’t keep this up in the long-term when the system gets bigger and more interesting for attackers. Transactions should be secure without the help of third parties. This made it to the top of our to-do list. Make sure that transactions are instantly secure.
It was a huge challenge for Malcolm and in 2016 he came up with a new way to confirm transactions, code name Prime. It was still just an idea at the time and in between development a white paper was written. A document that describes the idea from a technical standpoint and mostly how and why it works. Gulden was still completely mined, miners verify the transactions and receive Gulden from the blockchain. Just like with Bitcoin. Prime would become a combination of miners and users.
Meanwhile the cryptocurrency market grew, so did Gulden. The amount of users increased and more was being developed revolving around Gulden. The company Nocks, that made buying and selling of Gulden possible since 2015, became a full-fledged company with its own platform for applications and services. At Gulden we’ve always had a realistic view on the system, but also on its use. Bitcoin has seen a lot of negative news coverage, the anonymous characteristics made it interesting for criminals. And with it, it became uninteresting for the average user and large parties such as banks. We wanted to do things differently, and so did Nocks. Nocks was quick to implement an extensive KYC (Know Your Customer) policy. They implemented this far before any other cryptocurrency companies. This made Gulden very unattractive for criminals or black markets. This also made sure that Nocks was able to build up their own user base and could start the development of their own exchange. A EUR/NLG exchange. Unique.
At Gulden the Prime project became more realistic. A white paper was released and its name was chosen: PoW². Bitcoin and Gulden used PoW (Proof of Work), the evidence can be found in the work of the miners, hence the name Proof of Work. With PoW² the work is being done by both miners and users. Miners still receive Guldens, but users can now also receive Gulden through interest. The interest is generated by locking Gulden for a certain amount of time. These locked Gulden verify transactions, like the miners. The interesting part is that earning Gulden is accessible for everyone and not just miners with expensive equipment. Besides that, receiving interest is something we all know.
And what is even more interesting is what this means for the security of the system. With PoW 51% of the miners control the network, so if you have that 51% you can determine which transactions are real and which ones aren’t. This is a weakness. In reality this isn’t as doable, unless 51% of the miners have aligned interests. And those interests can be perpendicular to the users. Thanks to PoW² you need at least 70% of the mining along with 70% of the total available supply. That’s impossible to achieve, because the combination of both is so valuable it always costs more than it could earn. It also protects the interests of both the miners and the users. The ultimate decentralization. That security ensures that transactions are safe after 1 confirmation. With Bitcoin 6. A pretty significant development.
Development of PoW² took 2 years, not full time, because in the meantime we had to keep the already running Gulden system up-to-date and keep developing it.
The team was expanded with an iOS developer (Rits) and an extra core developer (Willem). Both very good developers, which is an absolute must when developing a currency system. Security always comes first and it requires knowledge, knowledge of blockchain, of what it can do and most of all what it can’t (yet).
Meanwhile the crypto market changed. From needing some knowledge of blockchain to start your own cryptocurrency, to launching a token within a day on Ethereum. Your own coin and one that you could issue on your own. This became very popular. Numerous tokens flushed the market, combined with anonymous exchanges and the increasing interest in crypto it was a disaster waiting to happen. A beginner won’t know the difference between a token and a real cryptocurrency and thought everything was blockchain. People that had great marketing smarts played into this, even though they didn’t know anything about blockchain. They quickly found out that through a token you could setup a sort of crowdfunding. You put your idea on paper (white paper) or let someone write one (you can buy white papers for 5 dollars…) and created a nice website. Now people could buy your token for a value you gave it. Besides that your token would become tradable. The idea didn’t have to be realistic and the most extreme and unrealistic ideas flew by. That it was unrealistic was something beginners didn’t know, everything sounded great. And it certainly sounded a lot better than Gulden.
I didn’t see this change in the market coming. Of course I expected that some smooth talking guys would find their way into crypto to make money and abuse it. But I didn’t take into account one important aspect, not enough. That was the accessibility. At Gulden we always develop with security and decentralization in the back of our heads, as a user you are the boss over your own wallet. There is no third party that manages your money. So our apps are standalone, your Gulden really are on your app. And we make those apps as user friendly as possible, that requires a lot of time and development. Our apps have always been good and we improve them rapidly, for iOS for example, there aren’t a lot of better applications within the entire crypto market (and it’s a huge market…).
I always viewed the apps as the gateway to cryptocurrency. To use a cryptocurrency you need an app and that’s an indicator for beginners. If you put time into the app, the rest has to be really good as well.
With the tokens, this was totally different. It was usually just an idea, so how did a beginner get access to a token? Through web-wallets. A wallet that is managed by a third party, so in reality, there is no app. Your money/ token is stored with someone else. You probably won’t notice it in daily use, whether you open up your wallet by logging in on a website or in an app. You can see your money either way. But in reality, there is a huge difference, in terms of security alone. These third parties were getting hacked continuously. Almost every week, another party was ‘hacked’ and money was gone. In most cases it wasn’t even a hack, but because the web-wallets used and the exchanges were anonymous, they could easily disappear. And the beginner usually didn’t know they were dealing with a web- wallet and that crypto shouldn’t work like that. They thought “I’m buying a very good coin, look at what they’re going to do and what they’re promising.”
There was no filter, no way to determine if a project was good or bad based on real development. Lies flooded the market and a realistic view washed away with it. The beginners loved it. The wilder the idea, the bigger the lie, the higher the price flew.
So called “partnerships” were announced, alongside market manipulation and as a beginner you thought: “see, this is a good project” and people started sharing with their friends. Everyone became an expert.
Gulden wasn’t left behind, we also experienced the growth, but we gained a different type of users. People that couldn’t see the difference and thought that Gulden also was such a project, one with false promises and fast price increases. There were expectations, people started to compare with other projects. And we would always lose such a comparison, you can’t beat an unrealistic idea with realistic development.
There were numerous attractive features for users, such as TPS (transactions per second). That became a thing you could talk about as a beginner. Visa could do a certain amount of TPS and your favorite token/crypto needed to be able to beat that. And they did… on paper. In reality a comparison to Visa is a little odd, because transactions aren’t processed in real-time. With crypto they are being processed in real-time. The transaction is complete when it is marked as secure, after 6 confirmations (or after 1 with Gulden…). Despite this the TPS went up for many projects, because what the smooth talkers knew really well was that those transaction volumes would never be reached, there was no real test. They could say whatever they wanted, even if it wasn’t what the system could handle in reality. And because the market was flooded with beginners, they could say whatever they wanted, nobody was able to verify any of it. Nobody jumped into the code and verified if it was all true. Most of the time there wasn’t even any code…
At Gulden development has always been realistic, I’ve also been very aware of the effect of my announcements or promises. If I say something it could influence the market, that’s why I don’t do that. And I refuse to lie. We couldn’t compete with the TPS claims or “partnerships” that didn’t exist. I’ve never understood those partnerships, it’s never been the idea behind crypto. A cryptocurrency is a decentralized platform that anyone can use to build with or on. You don’t need any partnerships. There is no CEO, no organization that is in control, that you need to ask for permission or one you need to partner up with. For beginners, however, it’s interesting, they thought; “if this large company works with it, it has to be something.” Usually it would come out that there was no partnership at all, but even that didn’t matter at all, because the price had already gone up. I could’ve bought a hamburger at popular fastfood restaurant, made a selfie and we would have a ‘partnership’.
To some degree, I understand why this happened and I’ve got it easy. I can ask one of our developers if something is realistic or not. Something beginners can’t, they don’t have that luxury. They trust their environment and their own view of what a cryptocurrency is. And that view is developed by smart marketing.
Meanwhile I was at peace with the fact that we couldn’t compete with these false claims, because I knew that sooner or later only real development would remain when something would actually be used. It was a difficult period nonetheless. Beginners bought into whatever they could get their hands on, with high expectations, mostly about price. It had to go up fast and when it went down, everyone panicked. There was also a lot of misconceptions, because why were we so quiet in terms of marketing, why didn’t we have any ‘partnerships’, no TPS claims, why weren’t we so innovative, why was Gulden not on those large anonymous exchanges? Understandable reproaches from a beginner that can not have a realistic view on things, especially when that marketing goes hand in hand with large price increases. If something goes up in value, then that has to be something, even if that project is filled with hot air.
Because all of that marketing came out of the founders, the price increases and decreases were directly linked to the founders of coins. They could make it go up or down. And perhaps that was the case with those projects, if you can say anything you want whether or not it’s the truth or not. I’ve never done this and therefore never had an effect on the market. But a beginner doesn’t know this. A beginner does have those expectations, so a beginner pairs the price to development. Oh the price goes down, then there’s probably no development.
During the large price drops in the entire crypto market, Gulden went down in price with it. Which makes sense, if nobody could tell the difference. And at those moments the beginners looked at us, because that’s what they were used to, because of all those other projects. We needed to fix the price drop with claims and ‘marketing’. We didn’t do this, of course, which caused a lot of frustration. A lot of beginners didn’t know what Gulden was, they thought it was new, didn’t do their research, but were blinded by the large price swings and the crypto hype. Those people panicked instantly when the price went down, there was no grip on the situation. They thought cryptocurrency was nothing more than a casino. Which in most cases, it probably was. But not Gulden.
We’re building something real, the PoW² development continued with a lot of ups and downs. It’s an incredibly complicated project, with a lot of testing. We haven’t ever done something so big and so significant, a lot could have gone wrong. Luckily I’ve always known that in the good capable hands of Malcolm everything would fall into place. Thursday June 28th 2018 we launched the first version, after almost 2 years of development. Gulden 2.0.0. And a lot of newer versions will pop up and within just a few months locking your Gulden will feel natural. Like it was there since the beginning. It will feel so natural and I’m immensely proud of that, because what feels natural, works perfectly.
We’ve also started the development of our next projects, that make everything even better. Projects that will distinguish us from the rest even further, at least in the real world. If developers and people with real knowledge of blockchain get involved with cryptocurrency, then I know where that leaves us. And that’s how I see the future for this crypto world.
Blockchain can improve processes and solve problems, there’s always a demand for solutions. And the things that blockchain can solve are significant. They can replace the old fashioned costly systems behind the scenes, so users notice the difference in their daily lives. But the change will go silently and without any user actually noticing the tech behind it all. And a user won’t have to notice, won’t have to research the tech, as long as it works. Naturally. Because what works and feels natural, works perfectly.