For all the roadblocks Jutta Steiner has faced in her time as Parity’s CEO, she’s a notable optimist.
Despite overseeing the development of a billion-dollar project in Polkadot, the Berlin-native seems unintimidated about her responsibility to cement the firm’s place in building the next internet and taking blockchain to ‘the next level.’
Even her recount of Parity’s darkest moment, a series of multi-million dollar hacks in 2017, features a dose of Germanic resilience.
“My son was five weeks old when that happened,” she says, recalling cutting short her parental leave. “I remember I was in a café close to the office and reading news that didn't seem good…The team starts getting together with everybody else in the community. There's sort of a war room...just trying to collectively figure out what the issue is.”
Remarkably, she adds, no one left the firm in the aftermath. In fact it grew, now employing around 50 core developers around the world including a concentrated presence in Europe.
Meanwhile, Steiner’s conviction to the promise of decentralising data storage remains untainted. It's also more than just a business model for her – it’s a personal goal, having grown up alongside Germany’s “privacy community" and “the Snowden revelations” serving as her wake-up call.
“That was really a moment where this felt really tangible how screwed up the current situation really is,” the former consultant says. “From a developer’s perspective, you do this because you're convinced that this is relevant work and there is a future.”
Seeking to right the wrongs of the internet is also what drew her to Parity’s co-founder and one of Ethereum’s early innovators, Gavin Wood. She says Wood's own commitment to privacy is ultimately what differentiated him (and arguably divided him) from his peers.
“When Ethereum was started by Vitalik, that was sort of a project to make money programmable, like financial contracts on blockchains. But then what Gav [Wood] really brought to the space was that notion of decentralized applications.”
But for all the joys of blockchain's privacy promises, has Parity's leadership reflected on the security trade-off feared by crypto regulators?
Sure, Steiner says, but it’s not as simple an equation as we’re led to believe, arguing that poor privacy ultimately has not resulted in perfect security.
“People who want to do bad are finding ways to secretly move money around in the current system. It's going to happen and law enforcement adapts, it learns new ways to actually get through.” She even notes how some FBI investigators are apparently finding utility in being able to track transactions on public ledgers.
Rebuilding the internet
Since Wood and Steiner started Parity, their commitment to user ownership-agency has morphed into building the decentralised web, with blockchain serving as a key layer. As part of that, Gav founded the non-profit Web3Foundation (W3F) a year-and-a-half ago. Steiner explains W3F is “the initial owner, the curator of the popular network, with the idea that it's better to have [the web] be curated by a sort of more neutral entity than a private company.”
Still, critics have raised eyebrows about the cross-over in leadership between W3F and Parity, and the fact that Web3 subsequently commissioned Parity to build its first project, Polkadot, whose dot sale saw the protocol valued at $1 billion. It certainly hasn't won them any friends, though Steiner defends the set-up.
“It's more - I mean, not from a legal perspective - but [W3F] is more like a spinoff from what we did and then set up as a separate entity… Very similar to what happened in the Ethereum Foundation [and ZCash].”
Steiner adds she has no control over W3F and that Wood is one of four board members who each vote independently about the foundation's future. He also reportedly does not sit in on council meetings where Parity is discussed.
Still, for all the underlying politics, its estimated timeline looks promising, with W3F recently announcing that the Polkadot protocol will launch in “about a year.” [For an in-depth look at what Polkadot is and how it’s funded, click here.]
The new business model
Regardless of W3F’s structure, Parity is still very much for-profit. In an industry committed to open-source development, there is a tension between money-making and sharing the vision. But Steiner says blockchain firms are following new business models to find a solution, introducing profits later in the growth timeline.
“We're seeing young companies that have found business models on top of open source. They recognize it makes sense to collaborate on the foundational layers that are more infrastructure. And then find your competitive edge on a higher level," she said. She also seemed to hint at profiting from an on-chain founder's reward model similar to that of ZCash. “[If] you have a protocol that has some payment value mechanism built into it, it should be possible...to build some reward mechanism so that the open source protocol doesn't suffer.”
Indeed, part of the reason Parity is HQ’ed in Berlin rather than Silicon Valley is because of the city’s more “collaborative” outlook, says Steiner.
“A lot of teams which could be seen, long-term, as competitors would collaborate,” she says. "There are still so many problems to solve, right? Like crypto libraries. We do need to collaborate on that, there's no benefit in everybody inventing their own networking protocol.”
Indeed, Parity shares all its core infrastructure, including the Substrate protocol, allowing users to quickly build their own blockchain. However, according to Steiner, Parity is setting itself apart and monetizing “through excellent engineering” and “delivering on a constant basis” - despite the "painful", time-consuming experience of managing its accounting.
She’s also sure the company’s work on Polkadot will pay off. “From a company's perspective, we do bet on Polkadot being successful and the token being worth more in the future,” noting W3F continues to manage a “good portion” of the dots but is under mandate to sell them.
“It's just cool to see that now really, step by step, I feel that things are coming together," she added.
Note: This article was updated to clarify W3F currently owns a "good portion" of dots but will not in future.