Unblocking Cryptocurrency

During his free period, in the back corner of the middle school computer lab, hunched over a desktop, John Saddington ’01 wrote his first lines of code. “It was a choose your own adventure game. You could choose to save the princess or kill the dragon, but I didn’t know how to make it so you could do both,” John remembers, placing himself back at ASIJ in the mid-90s, when BBS video games were still in fad, when he was trying to impress his new school friends and right after his family of five relocated to Tokyo.

John’s precocious interest in programming had caught the attention of the computer lab attendant at the time, Lynn Nichols (FF ’87–’08). “She was an older woman, and so inviting. She came over and said, ‘I see you playing a lot of BBS games, have you ever thought of building one?’ That’s where it started.” John coded his first game at the age of 11.

Using the now antiquated BASIC language, John would often use up an entire ream of dot matrix printer paper to check his lines of code by hand, depleting the lab of expensive ink and filling the room with a clunking cacophony as the printer kicked into gear. Ms Nichols’ response, “She always smiled and said, ‘Don’t worry honey. I’ll replace it.’”

Now 36 and two decades into a successful and diversified career in the tech arena, John traces it all back to the middle school computer lab and the support of Ms Nichols. “I was unfettered to be creative and explore this new thing in life and she gave me all the freedom to do it.”

Last year, John’s early mentorship came full circle, when he advised ASIJ students in Mark Burpee’s middle school programming class. More than a free period hobby, programming is now part of the curriculum at ASIJ. Reviewing student projects remotely and sending feedback via YouTube videos from his home office in San Francisco, John was giving the next generation of ASIJ coders their first push.

In the intervening 20-plus years, however, the technology landscape has been reimagined a few times over. No longer were students reviewing BASIC code on janky printer paper but developing mobile applications for iOS platforms. Computers have moved from desktops, onto our laps, into our pockets and then into the cloud. Let’s just say, in 2019, you can kill the dragon and save the princess, all the while live streaming your medieval conquests on Twitch.

As the technology curve continues its exponential climb, John has positioned himself within one of the industry’s most boundary-pushing businesses, cryptocurrency—a technology that is largely misunderstood, frequently scandalized and one John says is an inevitable part of our future. He founded the company YEN in 2016 with his twin brother Peter Saddington ’01 and the two began developing a cryptocurrency meta- exchange. In layman’s terms, YEN is a one-stop shop for someone looking to buy cryptocurrency. Whether you’re investing in Bitcoin, Litecoin, Ethereum or Ripple, John assures you can buy or sell any cryptocurrency on the platform in three clicks or less. If you’ve never heard any of those names, don’t worry, John is designing YEN for you, with hopes to appeal to the average consumer and not just the day trader knee deep in crypto research.

John’s brother Peter was an early investor in cryptocurrency and has managed to build a following amid cryptocurrency’s internet subculture, with over 83 thousand followers on Twitter and another 80 thousand subscribers on YouTube. Peter began studying computer science at Florida State University after leaving ASIJ and went on to earn three master’s degrees in counseling, education and theology from Luther Rice College & Seminary in Georgia. He was initially drawn to Bitcoin by two things: math and code. “After I read my first article on Bitcoin in October 2011, I spent the next month devouring every bit of information I could get my hands on,” Peter says. “I looked into the source code, saw what it was, the implications and the potential future. The code was immutable, unchangeable and fully open-source. It was both anti-fragile and flexible, building a new type of system that was decentralized,” he adds. “The math was simple and secured the system while the code was tamper- resistant, de-risking users and protecting investors. I was in! It seemed too good to be true!”

Peter’s early success investing in the cryptocurrency earned him the credential of being the first person to buy a Huracan Lamborghini using Bitcoin (valued at over US$200,000)—a splashy purchase that resulted in his photo being splashed across the webpages of CNBC, Business Insider and TechCrunch. “The #WorldFirst Lamborghini Huracan bought with Bitcoin was certainly a great way to get noticed in the world of crypto,” Peter says. “For me it served two purposes. One, that you can actually really use this 'internet-magic-money' to buy real assets and two, I wanted to celebrate a meme of not investing your ‘Bitcoin into lambos,’” he adds. “We take work seriously. Just not too seriously.”

The brothers have been successfully leveraging Peter’s online persona to promote the YEN platform, turning Peter into the face of the company while working together to grow the company. Peter notes that one of the benefits of partnering with your twin is that they are “able to be fully transparent, fully honest, fully real about everything. Zero pretense.” He adds, this creates a freeing and fun work environment where things get done. We're also fully bringing both our respective worlds and experience to bear on this project.”

While Peter came to crypto early, John, didn’t have his first substantial introduction to cryptocurrency until the summer of 2016. “Peter essentially clued me in that this was a big deal. I’m much more of a hardcore engineer so I dove into the deep level protocol and obsessed over it for the entire summer,” explains John. “Out of that haze or fog, I realized this is solving some fundamental mathematical problems, issues that most people thought were impossible to solve, and if what I’m reading is true, I have to do something about it.”

What John now describes as a “pot of gold,” is the application of blockchain technology to financial transactions, a concept often attributed to a 2008 “Bitcoin whitepaper” authored under the pseudonym Satoshi Nakamoto. To this day Nakamoto’s identity remains unconfirmed.

At its more fundamental level, blockchain is a novel method of digital record keeping. Each transaction in a blockchain network is stored on a public ledger, meaning each block on that ledger holds the key (ie digital username) of the users involved, a timestamp and the numerical specifics of the transaction. As more transactions take place in the network, it creates a chain of discrete data blocks. The users in the network are anonymous (faceless and untraceable) but the data is open to the public, meaning that while you may not know the who, where or why of a transaction, everyone can see what is happening in real time.

The Bitcoin whitepaper’s application of blockchain is innovative. Instead of trusting financial institutions to verify the integrity of monetary transactions, the use of a blockchain network in bitcoin allows users to verify the transactions of their peers. Other people in the network are tapped to confirm that each block in the open ledger is legitimate and, most importantly, ensure that a user is not repeatedly spending the same coins—a mathematical solution to the “double-spending” problem in digital currency, which had been loathed by programmers for years. The first user who verifies a block is incentivized and rewarded by the network for their labor with a small sum of Bitcoin. A small sum of bitcoin, however, could be considered a boatload of cash. One Bitcoin is currently valued at a little over US$3,800. In essence, the Bitcoin userbase is able to securely and successfully audit their own accounting books. While Bitcoin led the charge with this currency model, a host of other cryptocurrencies have since followed suit, with fresh exchange names popping up regularly.

It’s important to clarify that blockchain technology is not limited to cryptocurrency, nor should it be. “Cryptocurrency became too famous for people to fully understand blockchain,” admits Iku Mohamed, an ASIJ parent and Head of Japan at Diginex, a blockchain solutions consulting company. “Often in the public’s mind, cryptocurrency has overtaken the meaning of blockchain, to the point where blockchain equals cryptocurrency equals Bitcoin.” Untangling this web of terms and misinformed equations has presented a PR challenge for blockchain specialists like Mohamed and he believes a lot of education is required in order to fully realize the potential of the technology. The unique configuration of data in a blockchain network has the potential to be used by a host of industries, including insurance, food distribution and government documentation.

In Japan, Mohamed sees promise for blockchain solutions in the healthcare industry, since Japanese healthcare providers own patient data and often refuse to release that data to a new clinic or physician for patients to get a second medical opinion. “Using a blockchain network, if you have the right to your own health history data with a master key, you can allow doctors in other clinics to access that data by giving them a one-time key, instead of going through hospital staff.” The blockchain fix would reimagine healthcare data distribution throughout the country.

In the end, cryptocurrency is just one application of blockchain and few technologists are denying blockchain has potential far beyond Bitcoin. That said, cryptocurrency is undoubtedly the most evolved and impactful application of blockchain at this moment in time. “This is a revolutionary advancement in cryptography and math,” posits John, “and because it is now solved it can’t be unsolved—it’s like a genie in a bottle. The future of Bitcoin is assured.”

As an industry, cryptocurrency exchanges have managed to shake the foundations of some of our core financial institutions. By using a peer-to-peer network and operating in the digital domain, cryptocurrencies are circumventing banks, financial professionals and, at times, governmental monitoring bureaus in the daily transfer of money. It has taken the work of financial heavy hitters and distributed it between millions of users in a blockchain network across the world. That reimagining of financial transactions puts many on edge and many more consider it a shift in power, one that could erode existing financial institutions. In one word, John describes the promise of cryptocurrency, and the threat to these established businesses and the establishment, as decentralization.

“I’m not an anarcho-capitalist. I don’t think the world is heading towards complete decentralization, I think that would be utter chaos,” admits John, despite the fringe Bitcoin enthusiasts that may call him a heretic on Reddit for admitting as much. “I don’t think the future will be homogeneous, I think we’ll be heading towards a heterogeneous environment, the existing centralized systems and then also decentralized ones powering a number of systems and businesses that we know and trust today.” While the Saddington brothers may not be anarchists, they are strong proponents of the technology, and the promise of decentralization is built into the mission of YEN. Their “Why We Exist” statement reads, “We believe that decentralized protocols are technological and social innovations and that our collective future is decentralized.”

There are a few ways the YEN platform hopes to actualize the future of decentralization. Though the site is currently in beta, they plan to go public later this year, with the promise of facilitating the purchase of cryptocurrency and giving consumers choice in where they invest digitally. Falling back on his go-to meta-exchange demonstration, John pulls out a wallet from his pocket. “People don’t have just one credit card,” says John, as he fans out a colorful array of plastic cards. “Most of us have a dozen credit cards and debit cards. Even though I may choose to use Mastercard 99 percent of the time, I demand choice and I love having choice. It’s what normal humans want.” With the number of emerging currencies in the cryptocurrency space, and the somewhat high-risk nature of the ones that already exist, YEN is banking that crypto consumers want the same amount of choice in their digital wallets as their analog ones. That is why they’re building a platform where all cryptocurrencies can live on a single interface.

Beyond convenience, the Saddington brothers are looking to capitalize on the social aspect of cryptocurrency, rather than relying on a userbase passionate about hard tech. YEN’s user interface comes in a familiar social media packaging, one John likens to a Twitter feed. Rather than quippy hot-takes, however, YEN’s feed is filled with real time cryptocurrency transactions. A user’s profile becomes a space to debate investments, share cryptocurrency news and interface with their friends. “You can buy and trade crypto, but you can also like it, replay it and talk about it,” says John. “Buying and selling any consumer product, it’s unlikely you’ll buy based on research. When it comes to cryptocurrency, the average consumer isn’t going to do a deep dive into technical specs. You’re going to go ask your friends or look around the office. We buy based on social conditions and social networks.” YEN is simply offering a place to build those networks and have those conversations.

In explaining the premise of the company, John is also quick to mention ASIJ, the middle school computer lab and the influence Japan has had on him and his brother. “When we were thinking about building this company, my twin brother and I thought back to where we learned to write software. Let’s call it YEN, the actual national currency. It was an obvious tie in to what we do now.” The namecheck also references the massive hand Japanese innovators have played in shaping the cryptocurrency landscape.

The 2008 Bitcoin whitepaper, which is considered a manifesto of sorts for cryptocurrency programmers, was written under the alias Satoshi Nakamoto. While the identity of the author is one of crypto’s biggest mysteries, many still look to Japan as the origin of Bitcoin. From there, Japan led the charge for nearly a decade, both in terms of cryptocurrency adoption and formulating some of the first government exchange licenses and regulations in the world. In 2017, the Japanese yen accounted for approximately half of Bitcoin trading volume worldwide, according to Mark Bivens ’89, a Tokyo- based investor and Board Partner at Truffle Venture Capital, who has written extensively on Bitcoin and cryptocurrency in Japan. As new financial centers in Asia rose to prominence, Tokyo held promise as the breeding ground for decentralized financial enterprises. “Cryptocurrency could potentially represent an opportunity to regain relevance,” said Bivens. However, the ecosystem in Japan has changed abruptly due to a series of scandals, including embezzlement and hacking cases at major exchanges, most notably Mt. Gox in 2014 and Coincheck in 2018. In total, these cases have represented a loss of over one billion US dollars. The Japanese government responded in kind by passing broad regulatory legislation. “It effectively closed off Japan as a source of funding for ICO projects, despite the appetite,” explains Bivens, who says the regulatory landscape for cryptocurrency in Japan remains in flux.

While Japan’s future in the field is uncertain, John maintains he wants to pay homage to its past and cryptocurrency foundations in the country. The name YEN gives credit to Japan for its success and failures. “They were the first ones that had to stress test the technology and the politics, so the entire world is learning every day from Japan,” John says.

“Most countries are open to cryptocurrency because the Japanese government and community has paved the way.”

Cryptocurrency’s future, in Japan and internationally, is hotly debated, but most agree it is a nascent technology. “We’re still very much in the dial-up stage, so the answer is no one knows what the future holds. So as a business we have to think in decades not years.” Rather than cementing YEN’s revenue models at this stage in the operation, he admits, “the name of the game is survival. If you can survive the ups and down, the seasonality, the crypto-winters and the crypto-summers, you’re going to have a successful company. The ones from the net days that didn’t quit that are still here are billion-dollar companies.”

More than unicorn aspirations, John says he has jumped into the volatile cryptocurrency industry, first and foremost, because it is the most intellectually stimulating work he has done in his career. “This is keeping me really young. There is no technology more exciting in the world right now than this, cause it’s changing everything.” For those of a certain age who remain skeptical of the technology, given the headlines, the scandals, and the volatility, John believes that even those who are holding out now “will most likely be using a decentralized service in their lifetime and they won’t even know it.” With hopes that cryptocurrency continues its climb to mass adoption, John is one ASIJ alum that has created a business that could potentially ride out the industry’s ascent. No doubt, cryptocurrency is a firebrand technology and with YEN, John is adding kindling to the flame.