Cryptonomex Rears Its Head!

in bitshares •  2 years ago

Origin of BitShares - Part 13 - (and the Spawning of Steemit)

Cryptonomex BitShares Steemit Graphene

Cryptonomex (CNX), the "Godfather" of BitShares and SteemIt, was founded in Spring 2015 to give the BitShares development team a chance to get financial credit for some of their own sweat equity. It was born at the Virginia Tech Corporate Research Center in Blacksburg, Virginia.

Cryptonomex Virginia Tech

During 2015, every hour contributed by the extended team of core developers and volunteer supporters earned a share of Cryptonomex stock. People who contributed funding also earned proportional shares. By hook or by crook, this funded enough labor to allow Cryptonomex to deploy Graphene technology and upgrade to BitShares 2.0 in August 2015. The software has been humming along smoothly ever since.

At last! We had the world's most trustworthy, powerful,
real-time, industrial strength, light-speed financial services platform
with smart contracts, multi-signature accounts and a built-in referral system
ready to attract tasty, fast moving customer's to BitShares by the millions!

Cryptonomex BitShares Birdseed

Or not. BitShares 2.0 debuted to rave reviews, but that didn't translate into sustained growth in share value and thus life sustaining funding. We reluctantly admitted that technical excellence is not enough. If you build it they may not come. We would have to find other ways to take BitShares to the moon - and that was going to take a lot more money than we had.

By now you may be noticing that Cryptonomex is a lot like our hero Wile E. Coyote. We were, all modesty aside, geniuses at coming up with innovative ideas, but somehow never managed to eat well. You might even abandon all hope for us except for one more redeeming wily characteristic:

We. Never. Give. Up!

Cryptonomex Wile E. Coyote

Dan and his developers went back to the drawing board and the rest of us went on the road looking for investors. Dan looked at blockchain applications ranging across secure websites, mutual aid societies, and social media. Our Business Development team reached out to Toronto, Shanghai, Dublin, Frankfurt, Hong Kong, Cairo, Italy, Amsterdam, London, New York, Sydney, Manilla, and everything from the Himalayas to the Great Smokey Mountains. (Watch for these names in future history.)

enter image description here

In the process we learned several more things:

  • Venture Capitalists will give you exactly seven minutes to wow them. Nothing we had ever done could be explained in seven minutes and there were a LOT of things we were able to do!
  • No venture capitalist we could find was interested in a business model based on licensing software one sale at a time. To gain viral adoption, software really needs to be free and open source. But, that "free" part was a problem.
  • Every single one of our potential businesses had its own regulatory hurdles and a single company aiming to disrupt all industries worldwide was subject to, egad, The Sum of All Regulations.
  • And worst of all, we might just have to break down and hire some real executive, financial and marketing talent.

E Unum Pluribus

"Out of One, Many". Facing these realities, we decided to break Cryptonomex into several independent companies, each with its own competent, well-motivated executives, a simple 7-minute pitch for them to explain, and regulatory footprint the size of a gnat. Each would pursue its own style of investors, business model, and marketing plan. And each would reap its own rewards if it succeeded. Cryptonomex shareholders would get proportional shares in each of the independent spinoffs.

Cryptonomex BitShares Steem

Each of the people in this picture is a serial (even parallel) entrepreneur in their own right. You'll find most of them involved in many of these enterprises in one way or another and many are already working on spinoffs of spinoffs. But this chart highlights their primary leadership roles in our first generation diaspora.

Since we have new readers in this forum who may know none of these names, here's a quick who's who:

Daniel Larimer, @dantheman, is the philosophical leader and technical visionary for an entire branch of the blockchain industry. This branch has many technoscary names, so we'll just call it the Dan Larimer School of Thought. This school encourages other entrepreneurs to build independent projects on the ideas Dan has pioneered. This has led to an entire zoo of blockchains including BitShares, ProtoShares, Muse, DACPlay, Steemit and Peerplays. There are many companies building on top of these.

Ned Scott, @ned is the first of a new breed of leadership we have recruited with the business savvy and personality necessary to take Dan's technical ideas and build a strong and profitable business around it. Ned now serves as the completely independent CEO of Steemit, Inc. He first entered the BitShares ecosystem providing Stan with business development assistance - which directly led to our recruiting him for Steemit.

Annemeike Dirkes plays a similar role as CEO of Cryptonomex, International (CNI). She has a long history of managing technology companies and a knack for getting to the bottom of any issue. Business development is one of her many skills and she is currently busy making contacts throughout the FinTech industry.

Ronald Kramer is responsible for forming CNI and recruiting Annemeike to run it. He is also Chief Financial Officer and already working to structure a number of subsidiary companies aiming to bring new liquidity, products, and services to the BitShares ecosystem. You'll hear about them separately.

Fabian Schuh, @xeroc, is perhaps the most famous technical person in the ecosystem after Dan. He is involved in everything while serving as Chief Technology Officer for both CNI and CNF and as a significant Steemit contributor. As part of the Cryptonomex Foundation, and with the knowledge about advanced blockchain technologies that we gained after years of studies, his greatest passion is: Education. He strongly believes that once people understand the strengths of the technology, we will be able to achieve what is thought to be impossible."

Michael Taggart, @michaelx, is Chief Marketing Officer for CNF and CNX and the leading business developer for the entire industry in terms of total value of opportunities he has in the pipeline. He is a master of Internet marketing technology and a leading innovator in that area.

Stan Larimer, @stan, is the Wile. E. Coyote of Cryptonomex. He is currently thinking bigger.

Cryptonomex Stan Larimer

Steemit - The First Cryptonomex Spinoff.

We launched the Steemit team in January 2016 and it became its own separate company a couple of months later. It's history is unfolding in this forum before your very eyes, and their story is theirs to tell from here on.

Cryptonomex Steemit BitShares Dan Larimer Ned Scott

As for CNX, CNI and CNF? Well, those are tales to be told another time... when we go back to the future!


Stan Larimer, President
The Godfather of BitShares and Steemit

Coming up Next: Part 14 - The Jump to LightSpeed

Previous in the Series:
The Origin of BitShares Rides Again (Parts 1-10)
Part 11 - It Is Very Cold in Space
Part 12 - Never Let Them See You Sweat

About the Author -- Stan Larimer

Follow Me On Steemit - The Social Media Platform That Pays
Please Connect To Me On Linkedin!

Greatest Hits
Bitcoin and the Three Laws of Robotics
Engineering Trust with Charles Hoskinson
The Origin of BitShares
Why I will never give up Christianity

BitShares Cryptonomex Stan Larimer

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I feel privileged to have found pts when I did. As a founder of an isp in 1993, I can totally related to the roller coaster ride and the feeling of accomplishment when things finally click. Thanks for this continued chronology. It's so important to reflect on history for all parties.


I still have my PTS - probably not the best move but I was travelling so much at the time I didn't pay attention to the changes til it was too late. Oh well, it got me vests in all sorts of cool stuff :)


Thanks @stan ! Great insights on the Cryptonomex tree, history and snippets with key members. Having been involved with tech startups for 8+ years reflecting on the journey is pretty awesome and important because like you stated being resistant is a great deal what it's all about. Innovate and kick-ass. Forget about the naysayers. It will never be a straight line to success.


Just got that one a few minutes ago, this is so good I'll have to share it with many students and friends of mine. Thank you! Namaste :)


1000% ACCURATE!!!!


Yep! It's exactly like that.


but we have checkpoints :)

This is a great bit of information. I am currently learning as much as I can about Steem and your post helps a lot (Cryptonomex, Graphene, names etc..)


Actually @stan what do you think about Steemit users, I hope the community will not give legs to the 3rd type descirbed here

I think users recognising and ignoring the 3rd type will automatically (in part) help to keep this place great for most of the community


Given how fast my own erudite, edifying, and profoundly humble posts drop off the charts, I hope we won't we have to worry too much about that third category. :o)


we just need a bigger pool of users with different interests here. It will happen and you will rise. I especially like that you identify yourself as profoundly humble :)

@stan =


I love this song.
My blue jeans are like that too.

Michael Taggart, @michaelx, is Chief Marketing Officer for CNF and CNX and the leading business developer for the entire industry in terms of total value of opportunities he has in the pipeline. He is a master of Internet marketing technology and a leading innovator in that area.

A master? His newest business is just another "get rich quick!!!111" shit that internet is already full of. No real marketer would lower himself to do stuff like that.

He has also been a part of despicable scam called Banx.

As I have communicated with him lately, he has also revealed to be very rude person.

If he has been responsible for Bitshares marketing, I'm not surprised why it has been complete failure. That guy is toxic. If Cryptonomex wants to be successful, you really need to kick him out.


He's been with us for over two years.
I think I know him a lot better than you.



I think I know him a lot better than you.

I doesn't seem so. So far you have shown zero evidence that Michael has done anything good for Bitshares.

By keeping up the association between Michael and Cryptonomex you indicate that Cryptonomex is scam organization that shouldn't be trusted. It's really hard to understand what motivates you to do that.


Maybe being controversial is Stan's conception of marketing? If you apply to the letter the saying that "there is no such thing as bad publicity", then Bitshares has received a lot of such "publicity" and Stan obviously appears to be thrilled about it. What's next? Is Cryptonomex in touch with Josh Garza, Mark Karpeles, Bruce Wagner, CoinHunter/RealSolid and ButterflyLabs folks? Imagine the buzz to have them around as trusted Steem ambassadors!


Actually, when you have been in this arena as long as I have you learn that everything is controversial. So you get good at ignoring folks who mean well but just don't have all the facts.

As a wise mentor once told me:
"Play the game for where things will end up when the dust settles."


@stan Glad to have you aboard! Welcome to steemit!
Ok, ok, just kidding. I know you've been here since before forever. But you are super quiet. It's been neat to watch steemit and your other endeavors grow, and this is coming from one of your former naysayers.

We could do with a lot more insider info like this.

If I have your attention for just a moment, I'd like to take a moment and ask if you could please get rid of the 30 days max payout thing?

I had a large group of authors who were preparing to come over and introduce themselves. They were excited to create compelling content specifically for steemit.

The "hook" for them was the chance to self publish and receive a perpetual royalty via any upvotes that may come in, pretty much forever.

The hardfork change limiting profitability on content to 30 days killed their desire since it can take time to build up a following, and a well written book might take years to gain any sort of traction, especially if you're publishing it a chapter at a time.

The net result of limiting content payout to 30 days is that it strongly incentivizes "trendy" content and a whole lot of "me too" postings, to try and catch a wave while it's hot, praying a whale drops by with money fairy in tow.

Even if you left payouts to once every 30 days, that would be cool. But by limiting it to only a single 30 day period you actively discourage people from making a large time commitment to what they are authoring.

In otherwords many people I know want Future clicks, but those future clicks were rendered worthless, for no reason that any of us can fathom.

Unfortunately, it's also encouraging people to try and use "shock and awe" techniques to hurry up and get as many clicks as they can upfront. Hence the march of the "me too", and "steemit is a scam" type posts. They are gaming the system to acquire "right now clicks", because those are now infinitely more valuable than future clicks.

It's a net negative to the platform when they do this.

Under the current setup, trendy and shocking content is far more likely to be chosen by any rational player than something thoughtful, compelling and time consuming.

Ask yourself honestly as an author which would you choose?
A quick post that will make some money now, or something that could make a lifetime of income? Now what if I told you there is no way to get a lifetime of income, but maybe if you get some traction in 30 days, you might get a little something.

If I'm spending 6 weeks agonizing over the next chapter of my magnum opus it makes no sense for me to publish it here. Publishing it here limits my opportunity to earn from my hard work, to a single 24hr period and perhaps a little trickle over the next 30 days. Then nothing.

Yet if I spend an hour or so coming up with something trendy, I have a chance at $1,000s of dollars and all I have to do is make it shocking enough to earn some clicks.

Personally I would rather build up a large fan base organically and publish content that takes me time and thought to produce and receive my income in the future from the efforts I spend building my fan base.

Yet the best the current system offers me if I think that way, is to announce it here as an advertising medium, but actually point my users at a different platform to get the content.

5 years from now, do you really want the blockchain filled with a ton of content that was relevant 5 years ago? Primarily ads for folks dropping by and pointing away to somewhere else?

Or would we rather look back to see that our blockchain contains the very first books by the next J.K. Rowling, Stephen King, or even the next Stephen Hawking? Books we can still read for free. A place where we still support our favorite authors with nothing more than an upvote?

Do that and you won't need VC's for anything, but they'll be pissing themselves in excitement trying to get in anyways.

One simple change to the code, and you completely change the dynamic here and you have something those VCs will understand right off the bat.
You won't need 7 minutes, you'll need 30 seconds because all you'll need to say is this...

We revolutionized the world, by allowing anyone, anywhere to earn and profit from their content for life! We don't need to advertise, because our user base is already comprised of the best and brightest content producers on the planet.

Give it some thought, upvote if you agree.


I tend to agree. I'd like to build up a body of posts that would serve as long term resources for people to reference and link to. This Origin of BitShares series is a perfect example.

I understand that some content is transient and quickly becomes outdated, but that should be determined by what content continues to get up votes, not some arbitrary cutoff.

That said, telling me this stuff won't do you much good. I never interact with the Steemit team on how they are running their company or its products.


Well you have a lot more weight than I do. If it's just me hollering in the wilderness then I look like a lone crazy guy.
If you agree with me, then ill open up an issue on GitHub tonight. Would be really helpful if you and anyone else who agrees, stopped by and voiced support.
Will post a link tonight.


Ok I opened the issue up on github
If anyone wants this to happen, the only way it is likely to happen is if you go there and comment. The developers can't read your mind, but they do want to build a product we all want to use. So make your voice heard.


I totally support this. Some content is educational and somewhat timeless.

That is a great explanation of the current BitShares Family. I am looking forward to welcoming more and more startups to join the different platforms and to start build their business on top of BitShares. It is an amazing technology and we still have a lot of roads to build. We at BitShares Munich are just getting started with BlockPay and Echo....

Trying to wrap my head around the 'big picture' keeps getting harder. It seems the more information I gather the less I understand. That makes a post like this one important for several reasons; It humanizes the information - the gods of the blockchain seem to have problems in common with we mortals; It makes it okay to be overwhelmed, but, still take small daily actions to curate - in the knowledge that each small action is a step in a growth direction; The future is a big, dark, and scary place - until someone lights a distant fire - and the path forward, though shadowed, has edges and definition enough that we may grope forward - in hope.


Can't wait for the next relevation section.
Many blocks are falling into the chain for me with this especially after having read the four horsemen piece by Aitken - exciting times ahead ;-)


I'm glad to hear someone saw that!


Hehe - seen a bit more than this.
"We have been intentionally silent in respect to Identabit as we work on commercial aspects and partnerships." is the most recent statement I have found from John Underwood. Any more updates from the active thinkers that are cool to share with the public?
I agree on his privacy vs. anonymity conundrum statements.



I got my tricks as well ;-)


18 views before me - let's see who pays attention ;-)

This is great to have such a concise version of your introductions as a "family" as there is sooooo much more to you all. Thank you for the posting, good job, namaste :)

Go Coyote :D

Hey stan this amazing history that every every Steemo should read to understand the history and the path to where we presently. Oftentimes, most people take what the see or hear for granted...kudos to all that made where we are with Steemit possible.


It does help to explain why things are the way they are. :)

Thank you for an interesting story.
I used your story to tell the russian-speaking community about Cryptonomex, BitShares and Steemit.
I told in the third person and gave a link to this post.

Cryptonomex (CNX) - тот кто вдохнул жизнь в BitShares и SteemIt

Great article @stan Thank you for information.

Dans the brain and Ned is the PR guy

Nice to see the structure behind it...

It had been long run...and still moving. I've follow bitsharers in the forum and nearly all the beyond bitcoin mumble session. I initially buy-in through dan's vision and it's point of view.

thanks for the post @stan nice one! 8]


This pic just weirds me out in so many ways...

This is nice stuff. So many great ideas :) Ned and Dan did a realy great job on Steemit. Ewery thing is developed all the time.

Steemit have already make fire in the grass. Soon it become a major social media platform.
Within a month we could reach 100 000 users. Maby a billion beafore new year.

This project need peaple who are burning for a open source. And Steemit has make it possible to use a Social media in privacy and free speak.

I wondering, when this could beat Twitter etc in user amount. This is a great opotunity for peaple to get rid off the peaple who are doing it only for them self. When the comunity reach medias etc it coul explode.

So keep upp the recruit and tell as much peaple as possible to join. It is also a great opotunity for greenhorns to join crypto currency.

-Kind Regards N66

@stan great article. Nice to understand a bit more about the team. Rather than relentlessly trying 7 min pitches to VC firms how about taping into the community for seed capital?


That's what we did with over the first two years of our history. It got the ecosystem to where it is today. To take it to the next level we have a few new tricks up our sleeves...

amazing post, nice to see all faces of people i talk to online :)

Thanks for sharing this "backstage" info.

Would you tell us how many developers are now working actively on Steem? And who is doing what? I mean who works on the back-end and who on the front-end?

Also, I remember @dan mentioning recruiting new developers a while ago. How did it go?


That's a great question to pose to @dan or @ned.
Steemit is now completely independent from Cryptonomex.


I thought you might know... I'm sure you do.

To be honest, I'm a bit worried that there are so few people behind such a big project. I guess potential investors also would like to know what your plans are regarding human resources.

I know those questions are for @dan or @ned, not you. But you happen to have better access to them than any of us. Sharing more details will boost confidence.


i get your arguments here, well, if you right with your fear that a few people are getting such a "big project" started - just imagine what happens if these "a few" are getting help from more devs entering this game :)

Anyway i can say - this small group of really experienced and talented devs are pulling this out of the ground in less time - then other mutli-million dollar dev teams are not able to get out of ground within years.. just watch the game here and i will notice :)

Did i mention before - i really don't like the expression "human resources"

You guys are doing great. Keep up the good work.

Thank you Stan it is nice to know the people behind the brand. I truly believe a brand should showcase the amazing talent that provides the skills.

good .I finally figured it out, although there was no stock map.

"If you build it they will come. " The lazy marketing mantra of every crypto startup up to and including Ethereum. I'm happy someone finally got realistic about the hard business of acquiring critical mass and liquidity.