Florincoin – the 2014 Altcoin You Don’t Remember

One of the most recognizable names in the crypto space (and perhaps even outside of it) is using one of the least recognizable blockchains.

Overstock.com subsidiaries Medici Ventures and tZERO have been utilizing the FLO blockchain for some time in work aimed at re-organizing property rights. At one time, a video of the tZERO homepage even showed the little-known blockchain at work.

Still, if you haven’t heard of FLO before, you won’t be alone. Maybe Florincoin, the blockchain’s moniker when it first launched in 2013, shortly before the 2014 altcoin boom – will ring a bell, at least those who were in New York at the time.

Joey Fiscella was a staple in the growing New York City crypto community during that area. A young, extroverted programmer, he had the ability to schmooze with the best of the business types. While the rest of the scene was focused on bitcoin, to a certain extent litecoin and for the lolz dogecoin, Fiscella was instead always talking Florincoin – a coin that’s visage bears a golden fleur-de-lis.

He was a regular at the New York Bitcoin Center and was always handing out thin strips of paper with Florincoin private keys (I used to have one, but as is the nature of small scraps of paper, it has been lost).

The idea was simple: Florincoin was bitcoin but with additional room for transaction comments, 140 characters at that time. And those characters would allow a decentralized social media (what else had a 140-character limit back then? Twitter), one that couldn’t be censored or stopped.

It’s a dream that’s still being toyed with today – from Steemit to Peepeth to Minds – but since then Florincoin, now FLO, has moved on.

Today, most of the developers and businesses involved in FLO are interested in it as an indexing tool, something that could provide the backbone of a blockchain-based Google.

Not only has Medici Land Governance begun adding property records on the FLO blockchain (and partnered with the state of Wyoming, the city of Tulum in Mexico and a government official in Zambia), but T-zero is adding digital locate receipts, which locate the ownership of a stock, into FLO to mitigate naked short selling.

On top of that, FLO is being utilized by the Open Index Protocol (OIP), a database for decentralized publishing of all kinds, and an app on top of OIP called Alexandria, which allows users to search and browse info in that database.

The list of users goes on too.

The California Institute of Technology, also called Caltech, uses FLO to store more than 17,000 records of information gathered with microscopes, and just recently announced the creation of another repository of microscope data.

So how, a crypto enthusiast might ask, did FLO become a blockchain with actual users (and seemingly without gloating in the hopes of sparking a price pump)?

According to Chris Chrysostom, a senior software developer at Medici Ventures, “As a developer I’m always open to looking at other solutions; people mention bitcoin a lot because right now it’s a good starting point for communicating concepts.”

But, he continued:

“One thing that FLO provides that bitcoin doesn’t is, right now, it has the ability to accept 1,040 bytes of metadata. FLO is able and willing to take on the blockchain bloat that many people are critical of in bitcoin.”

The bytes and the bloat

To understand how one of the most-anticipated and regulated token projects in the space came to use a blockchain that most people don’t even know about, you have to start with its first real business case.

Utilized by husband and wife team, Devon and Amy Reed, Florincoin became the underlying technology of the Decentralized Library of Alexandria (DLOA).

A blatant nod to the ancient world library that was burned down (while it’s become a modern-day symbol for the loss of cultural knowledge, the crypto project used it as a way to illustrate the problems inherent to centralization), the project was initially touted as a decentralized library. According to Amy, the co-founder of the project, in an earlier interview, all types of content, including books, blogs, video, audio and art could be added to the blockchain and secured from censorship.

DLOA was the forefather of today’s decentralized content platforms, hoping to untangle the messy distribution models that currently exist for content creators and viewers online.

The project chugged along for a couple of years quietly, until Tim Berners-Lee, the creator of the World Wide Web and the founder of the W3C, a standards organization for the web, was given a demo of the app.

According to Amy, Berners-Lee loved it, but said: “change the name.”

So the application – a Google-like search for the data, became just Alexandria and the protocol, which allows content creators to decide how their content is categorized before adding it to the FLO blockchain, became known as the Open Index Protocol (OIP).

And as that change happened, the number of bytes that could be stored in a transaction was increased as well – from 140 to 528 and then to 1,040, the limit today. But what’s perhaps the most fascinating about OIP is that in a mess of new competition, the project has stuck with FLO.

From Storj to Filecoin or even more broadly ethereum or EOS, there’s a slew of blockchain projects looking to tackle a similar use case – decentralized file storage – and these new players tout advanced architecture that makes their platforms faster, stronger, overall better.

But Devon remains unphased by the shiny new toys.

“When we started the project, our goal was to build a shared data layer that is censorship-proof, persistent and as interoperable as possible,” he told CoinDesk. “This required certain technical choices, which FLO fit perfectly – and even though other things have been launched since which do a variety of things, they don’t meet those needs better than FLO does.”

For that index that OIP is, Devon contends, the project needs full global state replication (to make censorship attempts transparent), proof-of-work consensus (to make censorship attempts expensive and defensible) and the ability to directly benefit from bitcoin’s developer community (a fork of bitcoin).

According to Devon Reed, sure, OIP could instead store its index on ethereum, and with that gain a different developer community and plenty of hype.

But, he said, the project would lose in other ways. For instance, after sharding is implemented, the project wouldn’t any longer get full global state replication; and after Casper – ethereum’s switch to a proof-of-stake consensus algorithm – the project wouldn’t have the security of proof-of-work.

On top of that, the publishing fees would no longer be decided by the OIP working group, and would instead, entirely be a function of the gas costs – priced by the ethereum core developers – of certain operations.

For many intents and purposes, FLO has become a kind of single purpose blockchain specifically for OIP. And that wasn’t a bad thing for FLO. While other institutions are starting to use FLO now, for many years Devon and Amy were the only ones really focused on FLO and they brought in a significant number of the developers that work on the blockchain to this day.

The original angel

Take Sky Young, a senior full stack developer at Alexandria.io, who started working on the FLO protocol because of her role with Alexandria in August 2015.

Or Jeremiah Buddenhage, also known as bitspill, who began developing on the FLO blockchain after he completed and claimed a bounty posted by the Alexandria team to update the protocol. After that, Buddenhage told CoinDesk, Alexandria offered him contract work until hiring him as a full stack developer in the summer of 2017.

Both developers get paid to work on OIP, which many times involves the development of FLO, keeping the blockchain up-to-date, probably more so than it would be were there not a company so tied into its success.

Before OIP and Alexandria, there was only FLO’s (then Florincoin’s), creator, a pseudonymous developer going by the moniker SkyAngel. It’s pretty similar to bitcoin’s Satoshi Nakamoto, although SkyAngel remains around here and there, said Fiscella.

SkyAngel did not return requests for comment.

In June 2013, Fiscella was trolling crypto forums looking for altcoins to mine and stumbled on FLO – hours after the software was released, he began mining the cryptocurrency and after noticing a couple of bugs (nothing consensus-related) in the code, he contacted SkyAngel within a week of its release. He’s been volunteering his time towards development ever since.

And while Fiscella got his fair share of shit for messing around with FLO – this was back in the day when people thought all altcoins were useless or worse, scams – there’s a sense of pride now.

“FLO is one of the oldest altcoins that is still actively traded and developed,” he told CoinDesk.

And it’s done so, he continued, without a pre-mine for developers, without raising huge amounts of money in an initial coin offering (ICO), without even a million dollars from a venture capitalist. Although, the FLO developers have raised $50,000 from the community over the past six years and the OIP and Alexandria team have raised a few $100,000 here and there, which they used to continue FLO development.

As such, many of the developers working on FLO right now are also pretty happy with the way it’s all turned out.

For instance, Young describes FLO as “hidden” and “undervalued.” And although Buddenhage was initially only attracted to FLO as a way to make money from small programming gigs, his “appreciation and understanding” has grown significantly over the years.

He told CoinDesk, “The big idea that made me want to keep working on this project is the idea of building a public space – allowing users to determine the worth of their own work and for the consumers to determine if it’s appropriate (rather than being held to the mercy of rates decided by a private company or a vague definition of ‘advertiser friendly’).”

In describing my story, meeting Fiscella years later at a crypto meetup and thinking, ‘Holy shit, Florincoin still exists,’ Buddenhage, who’s been in the space since 2013, laughed, saying:

“It’s great to see people react when they re-discover that FLO/Alexandria have not joined the ranks of shitcoin yet nor is it merely idling on but has actually grown in the shadows.”

Enter tZERO

It was Chris Chrysostom, a developer that was looking to build a simple application called a bill of sale on a blockchain, that found FLO and eventually brought it into the Medici ranks.

While he began the project hoping to utilize bitcoin’s OP_RETURN feature, Chrysostom quickly became frustrated with that because cumbersome to use and doesn’t hold enough data to create anything substantial. So he started looking around, reading through some content about Factom and the Storj white papers, both of which mention FLO (again Florincoin at that time).

That led Chrysostom to Alexandria, where he worked alongside Devon and Amy, building out the project’s payment capabilities.

Then in July 2017, he was picked up by Medici Ventures.

Now a senior software developer at the venture capital subsidiary of Overstock.com, Chrysostom brought to the job his interest in FLO. Chrysostom was assigned to a project within Medici Ventures focused on property rights – the idea being a global property rights registry – and FLO and the work being done by the Open Index Protocol seemed like a natural fit there, he told CoinDesk.

“We use it specifically for projects, proofs-of-concept and research for this property rights project,” he said.

While Patrick Byrne, the founder and CEO of Overstock, announced a partnership in late 2017 with Peruvian economist Hernando de Soto with a similar intent, Chrysostom said his work using FLO at Medici Ventures was different, yet could easily support the De Soto project if necessary.

According to Chrysostom, he was looking for a proof-of-work blockchain with similarities to bitcoin, so many similarities that the development work on bitcoin’s core team could then be applied to the other blockchain as well. For instance, security measures and scaling technologies like Segregated Witness.

“FLO was really appealing – bitcoin wants its use case to be focused on value transfer (and that’s fine); FLO has taken it upon itself to have a lot of similarities to bitcoin but with the added feature of application data,” Chrysostom said. “Which is more suited for the property rights use case.”

And sure enough, Chrysostom has similar things to say about the project’s ethos and morals.

“It’s really appealing that FLO hasn’t gone down the path of turning itself into an ICO; it didn’t try to segregate coins in a certain way, like the staking mechanisms; it’s quite admirable that it has remained an open-source project,” he said, adding:

“Four to five years have gone by, and it’s still about what its founding was all about – an open blockchain with a little extra use case. I just find it admirable that it’s stuck to that.”

And as for OIP and Alexandria, those teams get Chrysostom’s praise too since, according to him, they focused on building out the software instead of hyping the coin.

Chrysostom said:

“FLO has been quite the stealth coin in my opinion.”

While Chrysostom would, of course, love to see the developers and projects building on FLO get rewarded for their work, he understands that with investment comes responsibilities that might divert the focus away from the open index goal.

For Medici Ventures part, it does not provide investment to FLO developers, Chrysostom explained, although he continued, “If the day comes that someone wants to make a pitch to Medici Ventures … I think they’d listen. They listen to all kinds of things.”

Keeping it afloat

Still, that’s not to say everything has run smoothly in the FLO community.

For instance, toward the end of 2015, customers of Cryptsy, the only digital currency exchange that listed FLO, began having withdrawal issues, and shortly after the exchange claimed it was insolvent after a July 2014 hack.

While a class action was mounted at Cryptsy in the aftermath, the parties that brought the class action against the exchange didn’t list FLO as one of the coins you could redeem. According to Fiscella, there are 11.5 million FLO coins in one Cryptsy wallet that haven’t moved since February 2014, so he suspects not that the exchange’s founders ran away with the coins (because then they probably would have sold them off at some point) but that these coins could not be recovered by any party, the exchange or even law enforcement.

“It wasn’t worth anything at the time,” Fiscella said. “But FLO was once around 40 cents.”

At that price, the coins lost in Cryptsy would have been worth more than $4 million.

Since then Bittrex and Poloniex have also listed FLO (actually on the same day in March 2015), although Poloniex removed it shortly after the exchange was acquired by Circle. Poloniex didn’t give a reason for the delisting of FLO, though the coin was taken off the site with a handful of other altcoins.

While some thought the reason was low volume, Fiscella argues that other coins that were not delisted had lower volume than FLO, so really he speculates the delisting was about FLO’s low hashrate, which meant that FLO could be relatively easily 51% attacked.

This was right around the same time that Crypto 51, a website calculating the cost of 51% attacking (and then double spending) cryptocurrencies, appeared. Once that website was up, a number of cryptocurrencies, including bitcoin gold and vertcoin, began dealing with attacks.

And FLO, which was on the Crypto51 list with an attack price of only $300, was exploited on Bittrex in September 2018 and 25 bitcoins were stolen. The attack works like this: an anonymous account deposited hundreds of thousands of FLO coins into Bittrex, traded that FLO for the 25 bitcoins, withdrew the 25 bitcoins and then rewrote about 480 FLO blocks. In this way, the FLO deposit was reversed and the hacker was able to reclaim the hundreds of thousands of FLO they had initially deposited and was also out with the bitcoin as well. The wallet at the exchange then didn’t have the FLO to deposit into the accounts that had bought the altcoin.

When Bittrex’s system detected this, it shut down FLO trading for about a month, until the developers fixed the issue.

“And by fixed it, I mean we paid 700,000 FLO to Bittrex,” Fiscella said, adding:

“And by we, I mean me.”

Bittrex did not respond to requests for inquiry.

Joey used the FLO he had been mining since the beginning to pay back the exchange and other FLO developers set up a “Big Mac Fund” for Joey, where community members have donated about half of the 700,000 to Joey for his ongoing work on the protocol.

Before the attack happened, Fiscella had been discussing the issue with Alexandria’s Devon Reed, saying they needed to increase the hash rate before something like this happened. But it was too little, too late.

After the attack, the developers working on the protocol decided that FLO needed to add some additional security measures to the scrypt-based mining algorithm (an alternative to bitcoin’s SHA-256 algorithm) since scrypt-based mining made it easier for an attack to take place.

The developers decided to add an extra rule to the consensus algorithm, a so-called max reorg depth limit feature. This feature requires large reorganizations of the blockchain be rejected, and it’s a similar feature to that used by bitcoin cash and ravencoin.

If that sounds like something that could kill a cryptocurrency, make people so skeptical of its security and value that they sell off their bags and leave it to die, it’s definitely happened before.

But FLO has endured and actually, it’s developers learned from its mistakes and evolved.

“The people who have joined have not asked to be paid, they’re just activists or investors,” Fiscella told CoinDesk, adding: “Everyone joined organically and they’re using their skills and network to grow the community. I think that’s really important.”

Today, there are about 10 active mining pools and another 10 that sometimes mine FLO, which increases the robustness of the coin. Also in early 2018, FLO’s code was updated to Segregated Witness, a protocol change that adjusts the way data is stored, making blockchains more scalable.

Echoing Fiscella’s comments about FLO being successful because of its determined developer community, Buddenhage concluded:

“They all appear to know what they’re doing and why they’re here putting in the effort whenever/wherever life/work allows the opportunity being that it’s a side project and volunteerism keeping it going, perhaps slowly at times but always moving forward with dedication and purpose.”

FLO coins featured image via gunkworks.no; images in the article via Joey Fiscella

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