The founders of Constellation Labs were initially looking to build a decentralized content platform. But after witnessing the limits of the Ethereum network, they decided to focus on a protocol that would support high-volume content systems. The company raised $14 million in a private token sale earlier this year. More recently, it joined 13 other companies in the Hyperledger blockchain initiative.
Constellation Labs CEO Ben Jorgensen said in written responses to questions from ThirtyK that the company was unbowed by the recent downturn in cryptocurrency prices. “While crypto still matters, we’ve taken a proactive approach towards setting a foundation for success regardless of market conditions,” Jorgensen said.
ThirtyK: What are the origins of Constellation?
Jorgensen: The team was initially formed in 2017 to build Rakugo, a decentralized content platform launched on Ethereum. After realizing the inherent limitations of the Ethereum Network, we pivoted to create Constellation, a Directed Acyclic Graph protocol that would be able to support projects like Rakugo down the line. We realized that there was a much bigger problem and opportunity – for an evolved architecture and a new consensus model, on blockchain-like technology, that would enable app support for big data initiatives.
“Many organizations have overpromised the state of blockchain infrastructure, which created misaligned expectations. Enterprise organizations and developers building consumer applications are sitting on the sidelines waiting for the infrastructure to catch up to the various use cases.”
ThirtyK: How does Constellation differ from blockchain, and what prompted the team to take this alternative path?
Jorgensen: Constellation uses an architecture used in big data initiatives called a DAG (directed acyclic graph). Companies like Twitter, Facebook and Uber use this architecture to organize data for machine learning and artificial intelligence more efficiently. Existing blockchain infrastructure isn’t architected to handle big data, and thus you see low application support and low throughput. Constellation is a DAG protocol, which differs from a blockchain by eliminating many of the issues currently surrounding existing blockchain infrastructure such as scalability, centralization concerns and flawed consensus models.
We are also using a reputation scoring model to help us select data validators on our distributed network, called proof of reputable observation (PRO). This consensus model provides a more secure way to send data over the network. PRO essentially codifies the familiar notion of reputation or trust (as seen in credit scoring) into digital form, which has yet to be done in the space. In addition, our PRO model will allow for machine learning to take place closer to the edge (where data is sourced, created and collected), while enabling a truly democratic network governance model, unlike in PoS [proof of stake] in Ethereum and EOS.
ThirtyK: What is the status of development? What are the upcoming milestones?
Jorgensen: Over the past year, our engineering team has continued to meet our engineering roadmap milestones by first deploying our test net in [the second quarter of] 2018, and slowly releasing developments around debugging on the protocol. Around a month ago, our testnet officially stabilized, with over 120 million test transactions sent across remote servers. In the words of our CTO Wyatt [Meldman-Floch], “This first test gives us the baseline for the lowest level ‘rank’ in our network. It only goes up from here.”
This past week, our engineering team successfully partitioned our network, the first step towards achieving dynamic partitioning which will allow any consumer or business to create and control their own networks with Constellation. The next upcoming milestone will be for our network to begin supporting generic applications and seeding the network with trusted node validators.
ThirtyK: How much money have you raised and where are you allocating the capital?
Jorgensen: The Constellation private sale was open to accredited investors, funds and institutional investors in January 2018. We raised predominantly in crypto, ether (ETH) and bitcoin (BTC), north of $14 million. We are allocating capital in the following ways:
ThirtyK: What keeps you up at night about this project? Do you believe these challenges are unique to the project or endemic of blockchain?
Jorgensen: One of the big problems in the space is that the technology is not commercialized. More specifically, there isn’t adequate application development, and simultaneously there isn’t enough application support even if there was application adoption. These challenges are not unique to our project but are unique to the entire space. Many organizations have overpromised the state of blockchain infrastructure, which created misaligned expectations. Enterprise organizations and developers building consumer applications are sitting on the sidelines waiting for the infrastructure to catch up to the various use cases.
ThirtyK: What was the company’s thinking regarding its token sale in light of the recent price falloff?
Jorgensen: The markets have been bearish for nearly a year at this point, and almost every altcoin has felt the wrath of this downturn. Instead of worrying about our token price ad nauseum, we’ve been executing: We’ve secured strategic partnerships with the MOBI and HyperLedger consortiums, launched our ambassador program and certificate course, spoken at conferences including TechCrunch Disrupt and the Honda Blockchain Summit, and are busy working on some exciting proof of concepts behind the scenes. While crypto still matters, we’ve taken a proactive approach towards setting a foundation for success regardless of market conditions. As with any early stage business, it takes time to build and establish traction. No amount of money can speed up adoption.
ThirtyK: Has anything about recent conditions changed your strategy?
Jorgensen: Not at all. We’ve been focused on delivering regardless of market conditions, and building out enterprise partnerships that yield scalable use cases. We have poured our energy into building out our tech, establishing meaningful partnerships, and fleshing out proof of concepts with established partners. The crypto side will catch up to all of the actionable steps we’ve taken to ensure we continue to grow as a company, hit our milestones, and deliver real-world value in 2019 and beyond.
ThirtyK: What is the Ambassador program?
Jorgensen: The Ambassador Network is a global network of blockchain and industry leaders that can help us effectively discuss Constellation’s values, mission and its technology. We have created a program which will instill brand integrity through a certification course hosted by Blockchain U. Our goal is to build a crowdsourced team that open sources our business efforts to professionals dedicated to mainstream adoption of blockchain technology. Its creation was due to a disconnect we noticed between real-world use cases and a clear understanding of the tech. With this program, we’ll be able to extend our reach into core industries (such as IoT and Mobility) and capture the minds of those looking to assimilate our solution into workflows.
ThirtyK: What prompted the creation of an industry news item to your blog?
Jorgensen: The industry news item had been something we’ve been circulating internally throughout our company to stay abreast of relevant industry developments. We thought that it made perfect sense to extend this offering to our larger community, as it’s proven to be an invaluable way to stay on top of industry trends while managing our busy schedules. We feature stories culled from the sectors of enterprise software, enterprise adoption, crypto markets, and exploratory use cases that will provide information to industry leaders, investors and enthusiasts.