>>president >>so called big data promised to usher in a new era of innovation where companies competed on the basis of insights and agile decision making. There's little question that social media giants, search leaders and e commerce companies benefited. They had the engineering shops and the execution capabilities to take troves of data and turned them into piles of money. But many organizations were not as successful. They invested heavily in data architecture is tooling and hyper specialized experts to build out their data pipelines. Yet they still struggle today to truly realize they're busy. Did data in their lakes is plentiful but actionable insights aren't so much chaos. Search is a cloud based startup that wants to change this dynamic with a new approach designed to simplify and accelerate time to insights and dramatically lower cost and with us to discuss his company and its vision for the future is cuba Lem Ed Walsh had great to see you. Thanks for coming back in the cube. >>I always love to be here. Thank you very much. It's always a warm welcome. Thank you. >>Alright, so give us the update. You guys have had some big funding rounds, You're making real progress on the tech, taking it to market what's new with chaos surgery. >>Sure. Actually even a lot of good exciting things happen. In fact just this month we need some, you know, obviously announced some pretty exciting things. So we unveiled what we consider the industry first multi model data late platform that we allow you to take your data in S three. In fact, if you want to show the image you can, but basically we allow you to put your data in S three and then what we do is we activate that data and what we do is a full index of the data and makes it available through open a P. I. S. And the key thing about that is it allows your end users to use the tools are using today. So simply put your data in your cloud option charge, think Amazon S three and glacier think of all the different data. Is that a natural act? And then we do the hard work. And the key thing is to get one unified delic but it's a multi mode model access so we expose api like the elastic search aPI So you can do things like search or using cabana do log analytics but you can also do things like sequel, use Tableau looker or bring relational concepts into cabana. Things like joins in the data back end. But it allows you also to machine learning which is early next year. But what you get is that with that because of a data lake philosophy, we're not making new transformations without all the data movement. People typically land data in S. Three and we're on the shoulders of giants with us three. Um There's not a better more cost effective platform. More resilient. There's not a better queuing system out there and it's gonna cost curve that you can't beat. But basically so people store a lot of data in S. Three. Um But what their um But basically what you have to do is you E. T. L. Out to other locations. What we do is allow you to literally keep it in place. We index in place. We write our hot index to rewrite index, allow you to go after that but published an open aPI S. But what we avoid is the GTL process. So what our index does is look at the data and does full scheme of discovery normalization, were able to give sample sets. And then the refinery allows you to advance transformations using code. Think about using sequel or using rejects to change that data pull the dead apartheid things but use role based access to give that to the end user. But it's in a format that their tools understand cabana will use the elasticsearch ap or using elasticsearch calls but also sequel and go directly after data by doing that. You get a data lake but you haven't had to take the three weeks to three months to transform your data. Everyone else makes you. And you talk about the failure. The idea that Alex was put your data there in a very scalable resilient environment. Don't do transformation. It was too hard to structure for databases and data. Where else is put it there? We'll show you how value out Largely un delivered. But we're that last mile. We do exactly that. Just put it in s. three and we activated and activate it with a piece that the tools of your analysts use today or what they want to use in the future. That is what's so powerful. So basically we're on the shoulders of giants with street, put it there and we light it up and that's really the last mile. But it's this multi model but it's also this lack of transformation. We can do all the transformation that's all to virtually and available immediately. You're not doing extended GTL projects with big teams moving around a lot of data in the enterprise. In fact, most time they land and that's three and they move it somewhere and they move it again. What we're saying is now just leave in place well index and make it available. >>So the reason that it was interesting, so the reason they want to move in the S three was the original object storage cloud. It was, it was a cheap bucket. Okay. But it's become much more than that when you talk to customers like, hey, I have all this data in this three. I want to do something with it. I want to apply machine intelligence. I want to search it. I want to do all these things, but you're right. I have to move it. Oftentimes to do that. So that's a huge value. Now can I, are you available in the AWS marketplace yet? >>You know, in fact that was the other announcement to talk about. So our solution is one person available AWS marketplace, which is great for clients because they've been burned down their credits with amazon. >>Yeah, that's that super great news there. Now let's talk a little bit more about data. Like you know, the old joke of the tongue in cheek was data lakes become data swamps. You sort of know, see no schema on, right. Oh great. I can put everything into the lake and then it's like, okay, what? Um, so maybe double click on that a little bit and provide a little bit more details to your, your vision there and your philosophy. >>So if you could put things that data can get after it with your own tools on elastic or search, of course you do that. If you don't have to go through that. But everyone thinks it's a status quo. Everyone is using, you know, everyone has to put it in some sort of schema in a database before they can get access to what everyone does. They move it some place to do it. Now. They're using 1970s and maybe 1980s technology. And they're saying, I'm gonna put it in this database, it works on the cloud and you can go after it. But you have to do all the same pain of transformation, which is what takes human. We use time, cost and complexity. It takes time to do that to do a transformation for an user. It takes a lot of time. But it also takes a teams time to do it with dBS and data scientists to do exactly that. And it's not one thing going on. So it takes three weeks to three months in enterprise. It's a cost complexity. But all these pipelines for every data request, you're trying to give them their own data set. It ends up being data puddles all over this. It might be in your data lake, but it's all separated. Hard to govern. Hard to manage. What we do is we stop that. What we do is we index in place. Your dad is already necessary. Typically retailing it out. You can continue doing that. We really are just one more use of the data. We do read only access. We do not change that data and you give us a place in. You're going to write our index. It's a full rewrite index. Once we did that that allows you with the refinery to make that we just we activate that data. It will immediately fully index was performant from cabana. So you no longer have to take your data and move it and do a pipeline into elasticsearch which becomes kind of brittle at scale. You have the scale of S. Three but use the exact same tools you do today. And what we find for like log analytics is it's a slightly different use case for large analytics or value prop than Be I or what we're doing with private companies but the logs were saving clients 50 to 80% on the hard dollars a day in the month. They're going from very limited data sets to unlimited data sets. Whatever they want to keep an S. Three and glacier. But also they're getting away from the brittle data layer which is the loosen environment which any of the data layers hold you back because it takes time to put it there. But more importantly It becomes brittle at scale where you don't have any of that scale issue when using S. three. Is your dad like. So what what >>are the big use cases Ed you mentioned log analytics? Maybe you can talk about that. And are there any others that are sort of forming in the marketplace? Any patterns that you see >>Because of the multi model we can do a lot of different use cases but we always work with clients on high R. O. I use cases why the Big Bang theory of Due dad like and put everything in it. It's just proven not to work right? So what we're focusing first use cases, log analytics, why as by way with everything had a tipping point, right? People were buying model, save money here, invested here. It went quickly to no, no we're going cloud native and we have to and then on top of it it was how do we efficiently innovate? So they got the tipping point happens, everyone's going cloud native. Once you go cloud native, the amount of machine generated data that you have that comes from the environment dramatically. It just explodes. You're not managing hundreds or thousands or maybe 10,000 endpoints, you're dealing with millions or billions and also you need this insight to get inside out. So logs become one of the things you can't keep up with it. I think I mentioned uh we went to a group of end users, it was only 60 enterprise clients but we asked him what's your capture rate on logs And they said what do you want it to be 80%, actually 78 said listen we want eight captured 80 200 of our logs. That would be the ideal not everything but we need most of it. And then the same group, what are you doing? Well 82 had less than 50%. They just can't keep up with it and every everything including elastic and Splunk. They work harder to the process to narrow and keep less and less data. Why? Because they can't handle the scale, we just say landed there don't transform will make it all available to you. So for log analytics, especially with cloud native, you need this type of technology and you need to stop, it's like uh it feels so good when you stop hitting your head against the wall. Right? This detail process that this type of scale just doesn't work. So that's exactly we're delivering the second use case uh and that's with using elastic KPI but also using sequel to go after the same data representation. And we come out with machine learning. You can also do anomaly detection on the same data representation. So for a log uh analytic use case series devops setups. It's a huge value problem now the same platform because it has sequel exposed. You can do just what we use the term is agile B. I people are using you think about look or tableau power bi I uh metabolic. I think of all these toolsets that people want to give and uh and use your business or coming back to the centralized team every single week asking for new datasets. And they have to be set up like a data set. They have to do an e tail process that give access to that data where because of the way just landed in the bucket. If you have access to that with role based access, I can literally get you access that with your tool set, let's say Tableau looker. You know um these different data sets literally in five minutes and now you're off and running and if you want a new dataset they give another virtual and you're off and running. But with full governance so we can use to be in B I either had self service or centralized. Self service is kind of out of control, but we can move fast and the centralized team is it takes me months but at least I'm in control. We allow you do both fully governed but self service. Right. I got to >>have lower. I gotta excel. All right. And it's like and that's the trade off on each of the pieces of the triangle. Right. >>And they make it easy, we'll just put in a data source and you're done. But the problem is you have to E T L the data source. And that's what takes the three weeks to three months in enterprise and we do it virtually in five minutes. So now the third is actually think about um it's kind of a combination of the two. Think about uh you love the beers and diaper stories. So you know, think about early days of terror data where they look at sales out data for business and they were able to look at all the sales out data, large relational environment, look at it, they crunch all these numbers and they figured out by different location of products and the start of they sell more sticker things and they came up with an analogy which everyone talked about beers and diapers. If you put it together, you sell more from why? Because afternoon for anyone that has kids, you picked up diapers and you might want to grab a beer of your home with the kids. But that analogy 30 years ago, it's now well we're what's the shelf space now for approximate company? You know it is the website, it's actually what's the data coming from there. It's actually the app logs and you're not capturing them because you can't in these environments or you're capturing the data. But everyone's telling, you know, you've got to do an E. T. L. Process to keep less data. You've got to select, you got to be very specific because it's going to kill your budget. You can't do that with elastic or Splunk, you gotta keep less data and you don't even know what the questions are gonna ask with us, Bring all the app logs just land in S. three or glacier which is the most it's really shoulders of giants right? There's not a better platform cost effectively security resilience or through but to think about what you can stream and the it's the best queuing platform I've ever seen in the industry just landed there. And it's also very cost effective. We also compress the data. So by doing that now you match that up with actually relatively small amount of relational data and now you have the vaccine being data. But instead it's like this users using that use case and our top users are always, they start with this one then they use that feature and that feature. Hey, we just did new pricing is affecting these clients and that clients by doing this. We get that. But you need that data and people aren't able to capture it with the current platforms. A data lake. As long as you can make it available. Hot is a way to do it. And that's what we're doing. But we're unique in that. Other people are making GTL IT and put it in a in 19 seventies and 19 eighties data format called a schema. And we avoided that because we basically make S three a hot and elected. >>So okay. So I gotta I want to, I want to land on that for a second because I think sometimes people get confused. I know I do sometimes without chaos or it's like sometimes don't know where to put you. I'm like okay observe ability that seems to be a hot space. You know of course log analytics as part of that B. I. Agile B. I. You called it but there's players like elastic search their star burst. There's data, dogs, data bricks. Dream EOS Snowflake. I mean where do you fit where what's the category and how do you differentiate from players like that? >>Yeah. So we went about it fundamentally different than everyone else. Six years ago. Um Tom hazel and his band of merry men and women came up and designed it from scratch. They may basically yesterday they purposely built make s free hot analytic environment with open A. P. I. S. By doing that. They kind of changed the game so we deliver upon the true promises. Just put it there and I'll give you access to it. No one else does that. Everyone else makes you move the data and put it in schema of some format to get to it. And they try to put so if you look at elasticsearch, why are we going after? Like it just happens to be an easy logs are overwhelming. You once you go to cloud native, you can't afford to put it in a loose seen the elk stack. L is for loosen its inverted index. Start small. Great. But once you now grow it's now not one server. Five servers, 15 servers, you lose a server, you're down for three days because you have to rebuild the whole thing. It becomes brittle at scale and expensive. So you trade off I'm going to keep less or keep less either from retention or data. So basically by doing that so elastic we're not we have no elastic on that covers but we allow you to well index the data in S. Tree and you can access it directly through a cabana interface or an open search interface. Api >>out it's just a P. >>It's open A P. I. S. It's And by doing that you've avoided a whole bunch of time cost, complexity, time of your team to do it. But also the time to results the delays of doing that cost. It's crazy. We're saving 50-80 hard dollars while giving you unlimited retention where you were dramatically limited before us. And as a managed service you have to manage that Kind of Clunky. Not when it starts small, when it starts small, it's great once at scale. That's a terrible environment to manage the scale. That's why you end up with not one elasticsearch cluster, dozens. I just talked to someone yesterday had 125 elasticsearch clusters because of the scale. So anyway, that's where elastic we're not a Mhm. If you're using elastic it scale and you're having problems with the retired off of cost time in the, in the scale, we become a natural fit and you don't change what your end users do. >>So the thing, you know, they had people here, this will go, wow, that sounds so simple. Why doesn't everybody do this? The reason is it's not easy. You said tom and his merry band. This is really hard core tech. Um and it's and it's it's not trivial what you've built. Let's talk about your secret sauce. >>Yeah. So it is a patented technology. So if you look at our, you know, component for architecture is basically a large part of the 90% of value add is actually S. Three, I gotta give S three full kudos. They built a platform that we're on shoulders of giants. Um But what we did is we purpose built to make an object storage a hot alec database. So we have an index, like a database. Um And we basically the data you bring a refinery to be able to do all the advanced type of transformation but all virtually done because we're not changing the source of record, we're changing the virtual views And then a fabric allows you to manage and be fully elastic. So if we have a big queries because we have multiple clients with multiple use cases, each multiple petabytes, we're spending up 1800 different nodes after a particular environment. But even with all that we're saving them 58%. But it's really the patented technology to do this, it took us six years by the way, that's what it takes to come up with this. I come upon it, I knew the founder, I've known tom tom a stable for a while and uh you know his first thing was he figured out the math and the math worked out. Its deep tech, it's hard tech. But the key thing about it is we've been in market now for two years, multiple use cases in production at scale. Um Now what you do is roadmap, we're adding a P. I. So now we have elasticsearch natural proofpoint. Now you're adding sequel allows you open up new markets. But the idea for the person dealing with, you know, so we believe we deliver on the true promise of Data Lakes and the promise of Data lakes was put it there, don't focus on transferring. It's just too hard. I'll get insights out and that's exactly what we do. But we're the only ones that do that everyone else makes you E. T. L. At places. And that's the innovation of the index in the refinery that allows the index in place and give virtual views in place at scale. Um And then the open api is to be honest, uh I think that's a game. Give me an open api let me go after it. I don't know what tool I'm gonna use next week every time we go into account they're not a looker shop or Tableau Sharp or quick site shop there, all of them and they're just trying to keep up with the businesses. Um and then the ability to have role based access where actually can give, hey, get them their own bucket, give them their own refinery. As long as they have access to the data, they can go to their own manipulation ends up being >>just, >>that's the true promise of data lakes. Once we come out with machine learning next year, now you're gonna rip through the same embassy and the way we structured the data matrices. It's a natural fit for things like tensorflow pytorch, but that's, that's gonna be next year just because it's a different persona. But the underlining architecture has been built, what we're doing is trying to use case that time. So we worked, our clients say it's not a big bang. Let's nail a use case that works well. Great R. O. I great business value for a particular business unit and let's move to the next. And that's how I think it's gonna be really. That's what if you think about gardener talks about, if you think about what really got successful in data, where else in the past? That's exactly it wasn't the big bang, it was, let's go and nail it for particular users. And that's what we're doing now because it's multi model, there's a bunch of different use cases, but even then we're focusing on these core things that are really hard to do with other relational only environments. Yeah, I >>can see why you're still because you know, you haven't been well, you and I have talked about the api economy for forever and then you've been in the storage world so long. You know what a nightmare is to move data. We gotta, we gotta jump. But I want to ask you, I want to be clear on this. So you are your cloud cloud Native talked to frank's Lukman maybe a year ago and I asked him about on prem and he's like, no, we're never doing the halfway house. We are cloud all the >>way. I think >>you're, I think you have a similar answer. What what's your plan on Hybrid? >>Okay. We get, there's nothing about technology, we can't go on, but we are 100 cloud native or only in the public cloud. We believe that's a trend line. Everyone agrees with us, we're sticking there. That's for the opportunity. And if you can run analytics, There's nothing better than getting to the public cloud like Amazon and he was actually, that were 100 cloud native. Uh, we love S three and what would be a better place to put this is put the next three and we just let you light it up and then I guess if I'm gonna add the commercial and buy it through amazon marketplace, which we love that business model with amazon. It's >>great. Ed thanks so much for coming back in the cube and participating in the startup showcase. Love having you and best of luck. Really exciting. >>Hey, thanks again, appreciate it. >>All right, thank you for watching everybody. This is Dave Volonte for the cube. Keep it right there.

>>Live from Atlanta, Georgia. It's the cube covering Ansible Fest 2019 brought to you by red hat. >>Welcome back everyone. That's the cubes live coverage for two days here in Atlanta, Georgia for Ansible Fest. I'm John fire with my cohost, stupid man. Andrew has been, Oh Kratos who's here and senior principal product manager at Ansible. Welcome to the cube. Welcome back. Thank you. Good to see you. 2017 you were last on red hat summit. It's like, Oh it was a, it was basically the introduction to the Ansible network basically. So, so much has gone on. One of the things I'm really impressed by this event and why we're here is um, configuration management and super important part of the plumbing. We all know dev ops is infrastructure as code, but as the evolution of cloud and software is changing the game, you start to see visibility into where automation's coming in. This is the whole focus of the event automation for all. It's the theme w w and this is about the core infrastructure. >>So it's not like it's just a random thing. Six most popular in get hub project out of millions. This is real. It's real. It's quite real and especially on the network side. This is something that came out organically. The birth of Ansible network was because it was agent lists, honestly, you know, simple, powerful agent lists. The agent list piece was the piece that really made it really fly for Ansible. Configuration management. By the way, on net networking side when we talked about this before is the most important because that's where it's the most static has one of those where it's been most static. I mean we all know networking, right? But as networking becomes policy base and moves up the stack, we've seen some firms like Cisco trying to figure out their dev net. It's like you starting to see the networking mindset moving up the stack. >>This is super huge change. It's a huge change. But the nice thing is that it's easy to get into. So all the network operators and network engineers, they're still used to using command and config modules with their iOS devices, their iOS devices, Juniper, all those things, right? They don't have to throw away everything they've learned for the past 10 15 years in order to get with Ansible. And then when they go beyond that, then they can start seeing the real power of the platform, which we announced today. So going from command line to programmability is kind of what's happening. Yes, absolutely. And what's the big four, the big key factors right now that are driving this? So a lot of key factors are, I mean, you saw the keynote this morning with Microsoft, that's our, that was a huge, and it'd been doing this for about two years. >>So they started from, from nothing. He chose Ansible and they quickly saw that the power of automation for the networks, but they had to grow it at scale. So that was the big problem was how do we do this at scale while still using all the knowledge that we've learned? So day zero, day one, it's extremely important and obviously we know that, but as we were going down the journey with them from a engineering standpoint, day two became extremely important. And that's what we're, we're focused on now. You know, uh, it was really interesting. Microsoft really talked about that cultural shift. Uh, you know, we've heard in the networking space forever, it was like you're all going to need to become coders. You're going to need to be able to do this to tell us how Ansible is really impacting some of those cultural shifts in a, you know, how is that discussion changed today versus what it might've been a few years ago? >>It's truly half the battle is the culture I like to call it as everyone's talking about digital transformation in a network world, this is an analog transformation in all honesty. This isn't anything about the bits and bytes. You cannot automate anything today. There are lots of point tools to automate networks today, but how are you gonna actually move that into a world where culturally you can have people buy in from the bottom up organically as well as from the top down from the it managers. It's extremely important. So on the platform announcement, the key and as was the Ansible automation platform, where can you just help us understand the relationship between network automation and the automation platform? Because I'll see an you need to move things around the network, but there's a lot of other things being configured as well and automated. What's the relationship between the two? >>So before we had the platform actually ends well network was an actual product. It was a separate skew as a separate offering and we treated it as such as a platform. We were like the first Guinea pigs I like to think of, we were the ones that said let's treat Ansible as a platform and let's move it that way. So we actually went out and built roles. We built modules, we built a network engine, which is a parser, right? Similar like text, FSM, uh, you know, those kinds of things. We put those in galaxy 22,000 downloads later. We proved it. We know that everything that we're doing in galaxy today for Ansible network proves the fact that people are using it as a platform. And we were successful in that, doing that and then telling me yours was that just track record wise, what was it, how many years? >>Oh, that was a year. So to.seven was when we released network engine for parsing, parsing CLI commands, you know, and that moves into the next generation of what we call the day two operations for networking is typically we see network configuration has been a one way street. So you would pull a configuration data from a device, you would have to parse it, you put it in SCM, it's an an SCM and now you actually have to put into a template and then you push it. Right. This has been a one way street typically, and it's an Ansible has been very good at one way streets, but now we're moving towards an Ansible two. Dot nine coming soon is making that a two way street. So integrating the fat collection from module, so when you pull facts from iOS, EOS and XLS, et cetera, treating that data consistently across the board and using that for it. >>Networking is one of the tracks here at this show. What are, what are some of the more popular things? What, what, what? Where's the focus? The focus is, it's across the board. Again, you have people that are it managers that have been doing Ansible for years and now they're saying, Hey look, they're seeing network automation is extremely pervasive. How can we get that into our pipeline? We have ticketing systems. How can we integrate ancil network with our larger business processes? And then tops like top five use cases, the typical backing up systems, uh, from, uh, you know, backup, restore a, and then doing a lot of sorts of true things there too. So making sure that you have all of your, your network configuration data off the box, right? A lot of people are fetching configurations from thousands and thousands devices. That's pretty hard to do. So let's make that easier for them. >>What's been the customer interest and the growth path for network automation? Because I'll see, that makes sense. I see a different product, but now that the automation picture's getting wider and bigger, what's the interest from customers say? The key focus area though on that? Well, we've typically focused on to date and, and from the marketing slides is the number of platforms we've supported. We can always see up to the right, right. We support 10 platforms, 2030, we're up to 65 platform supported. I think we've pretty much proven the fact that I think we can pretty much work on anything. So it's going beyond that and making lives easier for the network operators, engineers holistically. And this event here, what's going on here for you guys here? What specific tracks are doing? Right? So we're actually conversations you having. Yeah, we're talking more about the actual resource modules that are coming in two dot nine I was talking about, which is bringing fact collection and the modules together as a two way street. >>So as people start moving into this day two operations, um, we have a lot of experts here and they're hitting stumbling blocks around. They're managing ginger temp like 500 lines into templates, like on a daily basis. Nobody wants to do that. So we're getting to a place where the people that are really relying on Ansible in it, in the expert field, making it much, much easier for them to look forward. We had Greg on earlier. And um, Robin, they talk about the glue layer that Ansible provides for the folks that are not using Ansible, what's the big message that you'd like to send them? What's the, what's the real, uh, attraction from the customers and why should people be using Ansible? Well, it, yeah, I mean it's, it, it's for everything. I mean, you don't have to, you really don't. I mean, it, it speaks for itself, but it breaks down the barriers. >>If you're a server person, a restorative person or a cloud person or a windows person or a network person, you all have the same language base in Ansible and you can get things done more quickly and more efficiently that way. So one of the other things we were talking to the community about is the, the feedback loops that you have with the community to tell us a little bit about what your teams hoping to get from the users attending and barges. Oh, absolutely. On the animal network side, everything is done transparently in the community. We have weekly, we have a community meetup. We've had this for a long time. Everything's out in the open. Everything's in get hub. Everything that we've done, we've had a contributor day. I don't know if you were here on Monday, it was focused on network. We're pitching this idea around resource modules in the, in the forward strategy of, of the platform as it relates to network, everyone including the contributors, developers, the partners, all of the people that you could see that half the off half the vendors here on the floor, our network partners. >>So they're invested as well. They want this to succeed. So we're extremely proud and happy that they're along for the ride as well. Alright. Maybe explain to our audience what an angry potato is. Uh, it's a, was it a tater, it's an angry tater. Uh, yeah, it's a, the mascot for AWX I believe. And um, yeah, they're fun. The stickers and little plushes. So we're going back to keep sticking appreciation. What's the coolest thing that you're, you've seen this year that you think people should know about? Oh, wow. Um, I think a lot of, a lot of focus around testing and development. So a lot of developers are now writing code. They're rebuilding the wheel themselves. So developers are writing the same stuff over and over and over again. So how can we scale that to say, Hey, why don't we all get together and write the same code and then about testing. >>So once you actually have the code, you have a lot of vendors here on CIC, D testing quality. So we at its Ansible, um, we can talk, and this was Greg, I don't know if you mentioned earlier, but Greg to go into Sprig said, you know, we're really good at making sure, um, playbooks and roles and modules are correct, but we want to make sure that the vendors and the developers like focused on the functionality. We can give them guidance around, um, syntax and correctness, but we want to make sure that the innovation really comes from them. Andrea, talk about this annual Fest this year, 2019 as we run into 2020 coming up towards the end of the year, fall here. Why is this year different? What's important about this year? Um, this seems to be, this almost seems to be an inflection point this year. Why? Why is it so important as what's what's going on right now that makes this event so popular? >>You're seeing convergence in a lot of different activities. The, the silos around you typically say, I'm a, I'm a, you know, I'm, I do Kubernetes or I do network or I do cloud. You're starting to see a lot of these people like, okay, well I have to do a cloud. I have to do a cloud VPN connection using containers and automate the network. So you're starting to see a lot of these different traditional people having to think outside of their traditional areas and have to start thinking about other areas to their, whatever that whatever their technology silo is in their head, they have to start learning or they're being forced to learn around a lot of different things. It's a systems architecture. Absolutely. System says consequences. You can't just dig in the silo. That's the issue. Absolutely. That seems to be the core issue. And also culturally it's collaborative. I mean, who would have thought configuration management be the next social network for enterprises at turning it out to be, yeah, absolutely. Not social network. Literally like Facebook, but you know, thanks to come on. Thank you so much for having said, we're bringing all the action down here at Asheville Fest where dev ops is being operationalized cultural change within organizations, but keep abilities much more of a systems view now. So the networking is a key part of it. I'm John for a stupid man back after this short break.

>> from Bahrain. It's the Q recovery AWS public sector Bahrain, brought to you by Amazon Web service is >> hello and welcome to the cube coverage here for a W s summit in by rain in the Middle East. I'm John for the host of the Cube, where here's our second year covering the evolution of cloud computing in the region. Changing the landscape of entrepreneurship Government society actually, data is the new oil so excited to have our next guest, Abdula Elmo, I kill who's the co founder and partner at rain hot. Start up with some seed funding, I think has cracked the code on the crypto money making aspect of crypto currency. Welcome to the Cube. Thank you. Thank you. So let's get started. You guys have a small team, get some seed funding. Interesting strategy on crypt. Everyone. When I see oh, kind of a fraudulent markets international, we all come and watch in the I c e o u s cramping down on it. Ah, lot of entrepreneurs love this market. A lot of innovation. You guys had a different approach and do some very innovative taking me explain what rain is doing because you've cracked the code on Crypto to Fiat. That's right, which has been the legit use case for making this all this >> Absolutely so all of the founders, the four founders? Yeah, Badawi, A. J. Nelson, Joseph Lago and I We've been in this industry for quite a while. We've been here 56 years, and we've seen all the hype cycles come and go about sometimes about Blockchain technology itself sometimes about the i c e o craze. Uh, and we've really just bought came down to what is the bit viable business model? We all were all entrepreneurs and we had looking for a new opportunity. Does with a lot of people coming into this industry with those with any innovation, lots of opportunities arise. And we've looked at the world and the world had many exchanges that were the most successful businesses in this industry. The exchanges facilitating the trade that was the most interest. That was the highest demand. That was the real use case. And we found that, um, there were exchanges popping up from around the world, but they weren't here any in the in the Middle East yet, And perhaps it was due to a regulatory, uncertain see or other difficulties of coming into this market. But Bahrain really opened up for us and we met with the Central Bank of Bahrain about three or four years ago and things really got started from there. >> And being a marketplace, you gotta have a lot of, you know, governance. It's all a lot of regulatory pressures from the folks that started. People who watch the Cube know that we've been very bullish on Krypton. We love Blockchain as an underlying technology. Yeah, that's, um, sustainability issues around Bitcoin and others. We recognize that, but in general this is a wave that cannot be denied. The moneys flow, right? So money's flowing in Kryptos, you scripted a crypto. You guys have the Fiat piece of it. So this brings on the first kind of liquidity opportunity in crypto thio. Real money? >> Yeah, absolutely. So that's our main goal is we're serving both retail and institutions and we believe there's going to be a lot of traffic from the traditional finance world, from institutions and individual investors into the crypt, a world and the opposite as well. A lot of people had challenges with taking the profits out of exchanges and withdrawing them to their bank in a regulatory compliant way. And that's really what we're solving here for the lowest fees in the region. >> But rain, once the blubbering, was to be modern society. They're going all in on cloud computing. They want to be a cloud country. They're open to new ideas. What attracted you, these guys? What made them different as it was that their vision was their posture on oversight? What was some of the things that make makes it work here? >> Well, at first it was the reception The behind central bank had a fintech unit already in in 2000 I think set a release 2017. So that was great. I think other central banks around the region and the world we're just starting. Then there was the behind fintech beh ah, dedicated working space for fintech companies here. So the ecosystem and the reception was really what attracted us at the beginning, other than knowing that Bahrain was a good financial hub for quite some time for the region. So we joined the Bahrain, um, Central banks regulatory sandbox which allowed us to experiment and test whether we can do this in a safe and secure way. And about a year and 1/2 later, uh, central bank drafted the regulations. Four crypto asset exchanges, brokerages s. So now that the regulation have got drafted and published, we graduated from the sandbox. Thankfully, and we were allowed to apply for the license shortly after we applied. We we earned the license. Thankfully. >> So what's next? What's goes on now? You do a lot of get a lot of work, A lot of coding. Gotta make sure the fintech compliance a lot of hurdles there. Yeah, I can understand that. What's now next? Got the regulation place? Yep. You'd expand. What's the plan? >> Well, we announced the license and Ah, a tte the same time, we also announced closing our seed round. So with that, we were able to grow our team the past month from, um, 8 to 9 people to 15 to 17 people now, and just more and more joining on board every day and are really our focus is growth. Now we're out of the sandbox. We don't have the limitations of the sandbox we had before, and we have banking relationships already made with different Banks s. So now we're just trying to reach out for the market. So we have grown our customer support team growing our engineering team hiring and comply a compliance officer, um, and other growth aspect. Just moving forward, >> getting up the basics of the business. That's right. What's your target audience gonna be? The inside solutions at first retail. What's the target audience? It's >> really both. It depends on what the market is providing. We've see institutional demand that has always relied on. When we spoke with institutions, they always relied on getting the license first because they don't want to operate with anyone unlike since, which makes it ah, you know, really interesting, because that means they haven't been able to get into the digital asset of crypto asset world the past few years while it's going up and down. So we we see ah, 50 50 divide most likely and what's going to be similar ratio than the rest of the world. But right now it's a lot of retail. Customers >> feel great to get your perspective here. It's even in the space. For a while, we saw the fire hype cycle go up, then the wet blanket Crypto Winter hit? Yeah, in the United States. Certainly it put a clamp down on most I CEOs. The SEC is right looking at a bunch of stars behavior, you know, Pretty Wild West is they call it, but an internationally still been pretty active even in the crypt A winter Go back, say 2018 Go back Last year on March it kind of stopped, got cold and then frosted over. Now it's been a block of ice. If you descript a winter, what's your take on it? What's the vibe? Internationally, I'll see Still money still flowing Bitcoins over 10,000 I think this morning, but still a lot of activity. Yes, some tokens have fallen away. Some are staying around. What's your assessment? >> So we've seen a lot of ah cycles. If you've been in this industry for 567 years, you'll see that we've had multiple of these winters, some of them lost, lasting longer than others on dhe. This late last one didn't didn't last as long as the one before. So what we really every time we see a ah boom, we have ah lot of media and a lot of people coming in brand new, trying to educate themselves about What is this? So we see just on everlasting cycle of just expansion on dhe. The price right now is not at the all time high, but it's still considered pretty significant at the beginning of the year was only about three or $4000. Right now it's about 10,000 and $100 for for a Bitcoin a cz with the eye CEOs. There have been a lot of concerns, rightfully so, because anyone can whip out a token and start selling it almost a security. But the central banker behind has a list of acceptable crypto assets that they will allow us to list. So right now we only have four crypto currencies are assets Bitcoin like coin ethereum and X R P. But nothing more than that at the time. And we hope to add more in the future. >> Ripples been taken some hits lately in the U. S. What about Eos and some of the other ones around the coin gets a corner, get some growth, you seeing some new things. How you guys gonna be evaluating some of these other new currencies? Is there a formula, you keep an eye on them. What's the consisted of concensus? What's that >> right? So we are agnostic to choosing the crypto asset that the color customers want to invest in it. If the central bank of behind accept this as secure liquid enough and, um, essentially time tested as well, For if it's been around for, let's say, 3 to 5 years with no network issues, then maybe retail customers can invest in it. But if it if it is just came up a brand new, we might come up. It's not time tested. Security wise, um, it hasn't gone through some certain pressures that are necessary for a network for payments are storing of value. >> So the central bank makes the decision on what they're gonna accept. What they >> listed in viable. That's right. But we we take customer input all the time. We started with just three, and then we had a lot of demand for exactly here in the region, and way listed it after getting improved. >> So we can't get Cube coin up there, can we? >> It defends the eyes that thinks he's coming. Okay, coming for two years in a row, knows >> what's coming. What's your final thoughts? The entrepreneurs out there because it's a lot of activity. This is one of those things where persistence really matters. No, your space Stay humble. Yeah, deal with these cycles because they are happening right? There is a There is a high velocity of cycles seasons, if you will, winter and summer. >> Well, I really think people should be should be more calculated to think long term with this technology. A lot of people are trying to make a quick buck or just make something, um, thinking that it's just a quick way to make money. But I really think people should educate themselves, both the entrepreneurs and the the retail investors that, uh, you know about the market about the technology so they can really see where the use cases might be of most need to the market. >> Talk about your, uh, your expansion plans. You have to to co founders in the US You're the co founders in Egypt. Is there gonna be a remote team? Is it going to be in by rain? What's the what's the hiring look like? Where's that where people will be located. >> So most of our if not all, of our customer support. Our client service agents are here in the in Bahrain. Um, we have the phone co founders now the to Joseph and a J from the Bay area there in behind as well here for the majority of the year there in the office. Now, um, the the engineering team, however, is a little scattered. Sometimes we we find we're security is a really high priority for us. It's the number one priority for us, as any Cryptocurrency exchange would be. So we re really scout talent and from the U. S. From Canada from other places around the world. Eso our engineering team is based in the Bay Area and other places in the U. S. Um, aside from Joseph, who leads it, who's the co founder here and behind. And the rest of the business and customer team is here behind. >> So really, the gating factor on hiring is making sure security's number one. So it's not so much. Get people filled in an office on the engineering front. >> No, it's definitely way. Look for high quality candidates, so that's our priority. We may be a small team, but they're all superstars. To be honest, >> what's been the biggest challenge that you guys have to overcome in this process because it's tough to get the license wasn't just being patient was. It's the diligence. What were some of the things that you overcame that were challenges? >> Well, it's it's definitely it definitely was a challenge to talk to. Ah, lot of regulators in the region. In general, Bahrain was by far the most cooperative. So right now the challenge is perhaps talking to other regulators when you talk expansion plans, we hoped we are serving the whole Middle East here from the from behind. But we'd idly, ideally want to also set up banking in Kuwait or youe or Saudi just so we can have better, quicker, on and off ramps for the customers. They're >> one of the big stories out. See Amazon Web service. It has a region here, um, pretty important. Pretty big deal. What's your take on what you think is gonna do for the region having a Amazon region multiple availability zones? What's that going to do for the entrepreneurship equation? >> I mean, it's fantastic. You see a lot of excitement here from entrepreneurs in the region and especially with regulation. How about having customer data stored here in the region? Um, it's really going to help. A lot of entrepreneurs also mitigate, You know, any downtime from hosting it in other places? >> New generation of entrepreneurship Hitting the scene here, isn't it? >> Yeah, it's really exciting. Lots of funding going around. Lots of ideas. Pretty really, really exciting for all entrepreneurs. >> Fail fast. As we always say, No one likes failure, but it takes Takes guts to start a company course. Of course. You know, thanks for coming. I appreciate it and say congratulations on your success. Thank you. Coverage Here we are in by rain for AWS summit. We're back with more after this short break.

(dramatic music) >> Hey everyone, welcome to the special CUBEConversations here in Palo Alto, CA theCUBE Studios. I'm John Furrier, host of theCUBE, founder of SiliconANGLE Media. We are here for some exclusive news around security audits, blockchain smart contracts, and a hot new startup Amber Data we have the Chief Operating Officer Tongtong Gong who's here, Chief Operating Officer of Amber Data, great to see you! You guys, I've interviewed Shawn Douglass, the CEO, founder, before and he was really getting the technology going. Amazing progress, we have some exclusive discoveries here, welcome to theCUBE! >> Thank you, thank you, thanks for having me here. It's awesome, we've done so much in the past couple weeks, and really excited to announce that we have taken security audits, automated that to be able to provide automated at scale security audits for all the smart contracts, Ethereum, through our platform. >> This has been a huge problem, we've been covering it for the past year, with video but also in the blogs, Ethereum specifically has been the developer chain of choice, people are using Ethereum, programming on it, and that's where a lot of the DApps, decentralized apps, which we think there's going to be a tsunami of, we're a bit bullish on it, but the problem is that everyone went in and rushed with these ICO's, and they didn't think about, "Hey we better make sure our token generating event works" because they've got to do a smart contract on that, and then ultimately these marketplaces that will be emerging from these apps through the communities will be a lot of smart contracts, as the transaction of choice. This is what is the benefit of token economics. The problem is, security. The security audits have been a pain in the butt, they've been expensive, and there's been a time lag in getting it done. So you've got a time factor, too slow, too expensive, and it was last minute. >> Right. >> This has been a huge problem. Are you saying that you solved that problem? >> Yeah, kind of! So give you some stats. There are about 7.8 million to 8 million smart contracts on the chain today. On average, there's about 500-600 smart contracts get deployed every day into Mainnet Ethereum. What we've done, we talked to a lot of security teams that's in this space, and at the end of the day everybody use the same tools, set of tools, to preform security audits. What we have done, is we have programatically did that so we can run security audits on every smart contract on the chain. So we launched this feature last Friday, what we did is we picked the top 2000 smart contracts, based on transaction values-- >> On the Mainnet? >> On the Mainnet. And we preformed the audits on those, and last night, yeah three days later, we preformed all 8000 smart contracts that's been created and deployed in the past 90 days. So the top 2000 active ones, and the 8000 recently deployed ones, we preformed security audits on those. >> So this is pretty incredible, so I want to make sure I get this right. If this is the case, this is the first ever automation, or devOPS like approach to smart contract audits and security. So let me just kind of slow down if you don't mind. Today, most people will go in and manually look at code reviews or use some tooling to do that, and then they get a report. Businesses have been doing that, OSHO does that, many more do it, and they're bringing tools to the market, they are too, but I don't think anyone's actually automated at volume. So you're saying, you're automating, ingesting data from the chain-- >> Mhm. We analyze the bytecode as well as the source code to identify vulnerabilities and issues, things like integer overflow into the code, and we actually assign custom, we have our own scoring system to score basically the vulnerability exposure of the smart contract. >> Okay so I want to kind of push back on that because I'm skeptical. So, you do byte review-- >> Bytecode >> Bytecode and source code review, and then it's a black box and you type up a report, or you actually flag the code itself? Do you service it automatically? Does that happen automatically? Take me through what you do manually, and what happens with the computers. What is automated? >> Everything's automated. So we integrated the tools that every expert uses in this space today, to run the security audits on the smart contract and the bytecode and then we flag the particular source code and function calls that's flagged with the issue-- >> That's in the code itself? >> That's in the code itself, in that service, through our website, through our console, and you can actually see it. You can search on any smart contract and the console dashboard will show you the real time live streaming events of your smart contract function calls, as well as the vulnerability-- >> This is amazing. So this means that you can save a lot of time, love this feature, this is exciting. This is actually the first news I've ever hear of this, so I want to make sure I get it right. How many contracts can you do? How fast does it take? So you mentioned you've ingested last week, stuff off the chain, how many contracts was that? >> We did last week, 2000 and then up to last night, we finished 8000 smart contract scans. We're continuing to do that for every smart contract on the chain. >> How fast is this, because I remember back when I was learning how to code for the first time, back in the old days, you had to press a button, you'd have a compiler, and you'd get a bug in the line, syntax error, there it is. That's the normal kind of old school computer science. Syntax, compiler, interpreter, whatever you want to call it. It sounds like you're doing something similar, the same kind of speed. It's code review, analysis to the contracts, security through the tools... How fast is it? I mean, how long does it take to do a review of one smart contract, for instance? >> Actually, I don't know that. I would say minutes. >> Not days? >> Not days. No. Minutes. >> So it's not like it goes out, hourglass... Check your email it'll be there? It happens pretty much on the fly? >> It happens pretty much on the fly, real time. >> So how many contracts can you guys do in a day? >> We've done 8000 in three days, so... A lot! (both laughing) And we have ten machines running right now as we're speaking-- >> So you throw some clout at it, scale up-- >> Exactly, scale up. >> Scaling out is easy to do, you just go... >> Our goal is to basically make it very easy for developers to understand the state and health of their smart contract and then they can go find consultants, experts to fix those vulnerabilities and issues. >> Yeah, this is going to be a rising tide. I think, rising tide floats all boats when you have these emerging markets. You move to the next problem, and you do. Jeff Frick always says that in theCUBE and he's right! You take away security, you're now enabling this tool for these consultants to actually add more value. >> Exactly. >> Is that the focus? Do you guys even know who's going to use this tool yet? Obviously, this is a game changer. I mean, if I'm a data scientist I love this. Also I'm a trader, I might want the data, I'm a risk management, audit compliance person? I mean...you guys-- >> Yeah! At Amber Data our mission has always been providing, enabling infrastructure, enabling tool sets to allow developers, to allow operators, to allow the industry, to allow businesses to adopt blockchain, that's always been our mission and we have built the splunk, you know like search, a feature for blockchain, we have built APM, we have built dissimilar Mixpanel... It's all about providing access to data and to information, to allow everyone to have a better understanding, better transparency into the state and health of the blockchain, the state and health of their smart contracts. So that's you know, in line with-- >> So talk about the scoring thing, because okay, I love this automation I think that that's a game changer. So congratulations, this is the first I've heard of it, and I think this might be the first news in the industry out there. How does it work beyond that? What else do you guys do? Are you ingesting, are you adding overlays to it? What is the focus next? I mean, you're ingesting it, you're doing some security audits... Where does it go from there? >> So, we're actually working with the Web3 Data Foundation. So the Web3 Data Foundation is building a decentralized data marketplace to allow everyone in the ecosystem to list, subscribe, consume, distribute, monetize data assets that's generated by the blockchain and data that's on blockchain. >> So what's the URL for that? Web3... >> Web3data.org >> Three the number or three... >> Three the number, yeah. >> So web3 number data dot org? >> Yeah. >> Okay and is that an open community? Is it a foundation? >> Yes it's a nonprofit foundation, and I believe they're launching a token, Web3 Data token, and Amber Data's working with the Web3 Data foundation as a launch partner to utilize the data ingestion pipeline we have built and to serve up all the data for everyone to have access to it. >> Okay so what's your business model at Amber Data? Are you going to have your own token? Are you going to use the foundation as the token holding place? Can you just take us through the relationship of Amber Data with the foundation? I mean, I get the foundation but what you're doing here is essentially you're building IT operations into the blockchain and scaling things with automation, which certainly is only going to get better with more compute and A.I and other cool things, so I love that. How do you make money? Is it a token model? Is it just, classic, you get paid? What's the relationship? Is the foundation issuing tokens, do you have your own token? Take us through that. >> So the Web3 Data Foundation is the one issuing the token. We are the launch partner, so we are using the bulk diagnostic data ingestion pipeline that we can ingest all the data, and we're building together, building the data marketplace using smart contracts, to enable everyone to list, curate, consume, distribute, monetize the data. You think about it, right? Data on blockchain is just a fraction of the data out there. And as staff development, going on, as a trading application going on, there's a lot of data that's going to be generated by blockchain as well, and those datas aren't getting captured, analyzed, and utilized today. I think today, as a trader, investor, or as a developer, people don't have access to this data, to have data driven decisions, to help them continuously improve. Whether it's application or investment decisions. So the data marketplace will enable everyone to be able to have that access. >> And also it might enable more faster solution of decentralized applications-- >> Exactly. >> Which, Fred Kruger and I were talking on Twitter, I mean Facebook, about this, that we think that's the killer app, it's going to be the tsunami of apps coming. But all these chain problems are out there, so it's a little bit of a resetting going on in the industry. Obviously you see that with some of the pricing and funding and everything, but for the most part we see a big market coming. So I've got to ask you, the obvious question from there is, which chains are you supporting? You mentioned Mainnet which is great for Ethereum-- >> Yeah today we're supporting Ethereum Mainnet, and Rinkeby, the test net. We also support Aion's Mainnet and test net. We also support Stellar, we're working on EOS and TRON as well, so we have open sourced our data collector to allow community to contribute to that and we'll use Web3 Data Token to incentivize the community to contribute, to verify, to enrich the data. >> So I've got to ask you the security question, maybe this might be for more the nerds and the geeks, delving down in the product level, but maybe you can get it. Security is huge, so I'm skeptical. You're doing scoring, can you be hacked? What's the security answer to that? Like, whoa if she's controlling the score, I might want to spoof the code and take over and say it's okay, ya know? >> The code we get is actually on the chain, it's the code that you put on the chain, so good luck spoofing the data on the blockchain. >> That's the whole point of block chain, that's already answered. That's a dumb question, I got that. I always ask dumb questions. Alright, so what's next for you guys? How big are you guys, what's the story? I've been following you guys on Twitter and Telegram, you've been traveling a lot. What's the update on the company, what's the status? >> So we are, as a launch partner for Web3 Data Foundation, right now there's a token sale, we're in the middle of closing our presale. It's a soft offering, and we're building and expanding the team as we're speaking. >> How much are you raising on the staff, can you talk about that? >> No. >> No? Okay you don't have to say the number. Just be careful, it gets hard to raise too much. So the foundation, and you guys. Okay, I want to ask you a personal question, we love women in blockchain, I wear the "Satoshi is female" shirt as much as I can... How did you get into this? Because there's a lot of women coming into blockchain, more than people are advertising. I'm seeing a lot more women in tech, certainly a lot more women in crypto. Blockchain and crypto, you guys are doing almost a cloud devOPs serious venture here. How did you get into this, what's your story? >> I've always been a cloud girl. I started my career building Yatuzi computing, enterprise grid computing. I was 23 years old and working for Axiom in a data center in Arkansas, and I'm the only one that wears high heel6s in data center, and get stuck in a vent you know? That's my background, so it's not a far stretch to understand blockchain and the usefulness of it if you talk about distribute computing, distribute storage. So it's very natural for me, from a technology perspective, get into this space. On a personal note, I really believe in decentralization, and I believe the change it's going to make to our lives and to our offspring's lives in the future. >> It's real, you think? >> It's real. It's here to stay. >> So what's your vision of blockchain? What are people not getting? Obviously there's a lot of scams out there that have kind of tainted on the ICO side, but what are people missing? When you talk to people, you have kind of like, "Oh I get it" and people kind of of like "I don't really see that" ? What's the main thing that they're missing, what's missing? >> I think it's missing that killer Dapp to get people to realize "Oh it's actually easy to use". I don't have to think about the inner workings, and it just works. My mom still lives in Beijing, I talk to her on Skype all the time, she's not worrying about TCPIP, she's not worrying about, how is this phone call getting encrypted or not encrypted? What's my network bandwidth? She just use the phone and call me, like I'm right next to her. I think as we develop building the apps, people don't think about that they're using blockchain, they just use it. >> It's like explaining it to a parent or someone who's not technical.. "Hey how does the internet work? Can't I just "type a keyword in to the browser or a search engine?" Instead today, it's more like "Hey, you know how BGP works?" and "You know how packets move around?" It's so hard to explain, so it's got to be easier. >> Way easier, yeah. >> Totally agree, totally agree. Well Tongtong, thank you for coming on theCUBE, appreciate it, great update, exclusive news. Automation, bringing cloud computing and utility computing, real geeky stuff to the table here. This is theCUBE Conversation and I'm John Furrier. Amber Data COO, Tongtong Gong here, inside theCUBE. Thanks for watching. (dramatic music)

>> Live from Las Vegas, it's theCUBE. Covering VMworld 2018. Brought to you by VMware and its eco-system partners. >> Hello, everyone. We are here live in Las Vegas for theCUBE's exclusive coverage for three days, VMworld 2018. I'm John Furrier with my co-host Stu Miniman. Our next guest is Andy Bechtolsheim who's the founder and chief development officer and chairman of Arista Networks. More importantly, he's also the co-founder of Sun Microsystems. Invested in Larry and Sergey when they were in their PhD programs. Legend in the industry. Great to have you on. Super excited to have you join this conversation. >> A pleasure to be here today. >> So, first question is, besides all the luminary things you've done in your career, what's it like working with Jayshree at Arista? >> Well, I actually met Jayshree 30 years ago when she was at AMD selling us SDDR chips at Sun Microsystems, so I guess this dates both of us, but I worked with her, of all the years when I was at Cisco, obviously, and then we both start at Arista in 2008. So we have both been there now for 10 years together. In fact, our 10-year anniversary's coming up next month. >> Jayshree's a great Cube alumni. She's an amazing person. Great technologist, we miss her. Wish she was here, having more conversations with us on the Cube, but stepping back, over your career you've seen many ways of innovation. You were involved in all of them, big ones happening. Semi-conductor computers, and now with Arista going forward and now Cloud, did you know the rocket ship of Arista was going to be this big? I mean, when you designed it at the beginning, what was the itch you were scratching, and did you know it was going to be a rocket ship? >> Well, we had some very early, what led to the founding of Arista was, we had lunch with our best friends at Google, and Larry himself told me that the biggest problem they had was not service, but actually the networking, and scaling that to the future size of their data centers, and they were going go off to build their own network, products because there was no commercial product on the market that would meet that need, so we thought with the emergence of Immersion Silicon We could make a contribution there, and the focus of the company was actually on the cloud networking from the very beginning, even though that wasn't even fell in this industry as being a major opportunity. So when we shipped our first products in 2009, 2010 many of them besides we had some business on Wall Street on latency, but the majority of the opportunity was over the cloud. >> It's interesting you mention the Google and Larry and Sergey, Larry in particular about that time in history, you go back and look at what Google was doing at that particular time, and now what they talk about at Google Cloud. They were building their own large-scale system, and there was massive scale involved. >> Yeah they had about a hundred thousand servers in the early 2004 before they went public, now they have, who knows how many millions, right? And all of course the latest technology now. So the sheer size of the cloud, the momentum the cloud has, I think was hard to forecast. We did think there was going to be a shift, but the shift was in fact more rapid than we expected. >> Andy, you talked about cloud networking, but today we still see there's such a huge discrepancy between what networking is happening in the data center and the networking that's happening in the hyperscalers. At this show, we're starting to hear about some of the multi-cloud, you had some integrations between Arista and VMware that are starting to pull some of those together. Maybe you could give us a little bit about what you're seeing between, you know, the data center and the enterprise versus the hyperscalers, when it comes to networking. >> So the data enterprise has still largely what we would call a legacy approach networking, which dates back, you know, 10, 20, 30 years, and many of those networks are still in place and progressing very slowly. But there also are enterprise customers who want to take advantage of what the cloud has done in terms of cloud networking, including the much further scalability, the much further resiliency, the much greater automation, so all of these benefits do imply equally well to the enterprise. But it is a transition for customers, you know, to fully embrace that. So the work we are doing together with VMware on integrating our cloud vision, our physical swiches with the microsegrentation is one element of that. But the bigger topic is simply an enterprise that wants to move into the future really should look at how did the cloud people build their networks, how can they run a very large data center with, you know, 10 network admins instead of, you know, hundreds of people. And especially the automation that we've been able to provide to our customers, automating updating of software, being able to bring out new releases into a running network without bringing the network down. You know, nobody could even think about doing that 10 years ago. >> Yeah, you bring up a great point about automation. In the keynote this morning, Pat Gelsinger talked about, what was it, 39 years ago he did something in intel, said we're going to do AI. Didn't quite call it AI back then, but he said, and now, we're starting to see the fruits of what come out. In the networking world, we've been talking about for decades, automating the network more. You've lived through the one gig, 10 gig, 40 gig, 400 gig you're talking about. Are we ready for automation now? Is now that moment in networking? >> I think that we were ready for 30 years, but the weird thing is, there always was a control planted in network, you know, the routing protocols, but for management there was never really a true management plan, meaning the legacy way is you dial in with S and a P into each switch and configure, your access is manually more or less, and that's really a bad way of doing it because humans do make mistakes, you end up with inconsistencies and a lot of network outages virtually has been traced to literally human mistake. So our approach with what we call Cloud Vision, which is a central point that can manage the entire base of Arista switches in a data canter, its all automated. You want to update a thing, you push a button and it happens and there's no no more dialing into a S and a P, into individual switches. >> How would you advise people who were looking at the architecture of the cloud, who are re-platforming, large enterprises have been legacy all day long, you mentioned earlier just now in the CUBE, that how the cloud guys were laying out the network was fundamental how they grew. How should, and how do people lay out the networks for cloud today? How do you see that? >> So the three big things that happened was, immersion silicon has taken over because it's, quote frankly, much more scalable than traditional chips. And that's just the hardware, right? Then the leaf-spine architecture that really our customers pioneered but is the standard in the cloud. It is use ECP for load balancing, it works. It's the most resilient, maybe the one thing, the single most important thing of the cloud is, no outages, no down time, the network works. No excuses, right? [Laughter] And our customers tell us that with our products and the leaf-spine approach, they have a better experience in terms of resiliency than any other vendor. So that's a very strong endorsement and that's as relevant to an enterprise customer as to a cloud customer. And then the automation benefit. Now, to get the automation benefit, you have to standardize on the new way of doing it, that's true, but it's just such a reduction in complexity and simplification. You can actually look at this as an Opex saving opportunity, quite frankly, and in the cloud they wouldn't have it any other way, they couldn't afford it. They're very large data centers. And they only could offer these things in a fully automatic fashion. >> Andy, I want to get your reaction to what Pat Gelsinger said on stage this morning. He said, in the old days, I'm paraphrasing, the network would dictate what the applications could do, it would enable that, and we saw an enabling capability. Now with Cloud, the apps can program the network, I'm paraphrasing that. As networks become more programmable and no outages, he made a quote, he said, the old adage was the network is the computer, the new adage is, the application is a network. >> Okay so let me sort of translate this, so. >> What's your reaction to those things? >> Sounds like an old Sun slogan, doesn't it? >> Translate that for us. >> So, the virtual networking, the NSX environment which provides security at the application level, right, it's the natural way to do network security. Cuz, you really want to be as close to the application as you can physically be, or virtually be, which is right in the VM environment. So VMware clearly has the best position in the industry to provide that level of security, which is all software, softlevel networking, you do your, you know, security policies at that level. Where we come in is, with Cloud Vision now, we have announced a way to integrate with NSX Microsegmentation, such that we can learn the policies and map them back down to the access list of the physical network to further enhance that security. So we don't actually create a separate silo for yet another policy management, we truly offer it within their policy framework, which means you have the natural segmentation between the security engineers which manages future policies and networking engineers that manage the physical network. >> Highly optimized for the environment >> Which actually works. >> Is that what you call Macrosegmentation then on the University side? >> Well we used to call it macro but it's part of their micro thing because we truly learn their policies. So if you update a policy, it gets reflected back down to cloud vision and your physical networks and it applies to physical switches, physical assets, physical servers, mainstream storage, whatnot, right? So it's a very smooth integration and we think it's a demo at this point but it will work and it's an open framework that allows us to work with VMware. >> Let me ask you a personal question. Looking at the industry, even look back in history as an illustration. TCPIP opened up remember the old OSI stack that everyone tried to do that. TCPIP opened up so much on networking, internetworking, is there a technology enabler in Cloud that you see that's going to have that kind of impact? Is it an NSX? How do customers going to deal with the multiple clouds? I mean, is there an interoperability framework coming, do you see a real disruptive technology enable that'll have that kind of impact that TCP spawned massive opportunity and wealth creation in start-ups and functionality? Is there a moment coming? >> So TCP of course was the proper layering of a network between the physical layer, layer one layer two, and the routing or the internet layer, which is layer three. And without that, this is back to the old intern argument, we wouldn't have what we have today on data. That was the only rational way to build an architecture that could actually, and I'm not sure people had a notion in 1979 when TCP was submitted that it would become that big, they probably would have picked a bigger adverse space, but it was not just the longevity but the impact it had was just phenomenal, right? Now, and that applied in terms of connectivity and how many things you have to sell with measure to talk from Point A to B. The NSX level of network management is a little different because it's much higher level. It's really a management plan, back to the point I made earlier about management plans, that allows you to integrate a cloud on your premise with what an Amazon or at IBM or the future Google and so on, in a way that you can have full visibility and you see you know exactly what's going on, all the security policies. Like, this has been a dream for people to deliver, but it requires to actually have a reasonable amount of code in each of these places. Both on your server, it's not just a protocol, it's an implementation of a co-ability, right? And, we are aware NSX is the best solution that's available today that I could see for that use-case, which is going to be very important to a large number of enterprises, many of which want to have a smooth connection between on-premise and off-premise, and in the future to add TelCo and other things to the bloody run of VMenvironment today. But that will allow them to be fully securely linked into social network. >> So you see that as a leading product in Connect. >> It's definitely a leading product. They have the most customers the most momentum the most market share, there isn't anything even close in terms of the, call it the software-defined networking layer, which is what NSX implements. And we are very proud to partner with them at the physical layer to interact with their policies. >> You think that's going to have an impact of accelerating the multi-cloud world? >> Yes because, the whole point about multi-cloud is it has to be sort of vendor-independent or, I don't know, vendor-neutral. You are going to see solutions from Amazon and Azzure to bring their own sort of public load into the premise. But that only works with their package, right? >> Yeah. >> So there will be other offerings there but in terms of true multi-cloud, I don't see any competition. >> Andy, we'd love to get your viewpoint on the future of ethernet. I hear so many people the last few years that it's like well, on the processor side Moor's Laws played out. We can't get smaller. On the ethernet side, there's not going to be the investment to be able to help get us to the next generation, there's limits in the technology, you've lived through so many of these architectural changes. Are we at the end of innovation for ethernet? >> Not at all. So, my history with ethernet dates back 40 years. So, I worked on the first three mega-ethernet 0x parts til. Then it was 10 mega-bit, hundred mega-bit, gigabit and forty hundred and now 400 coming out. So, ethernet speed transitions are really just substitutions of the previous layer to technology meaning, assuming they're more cost-effective, they do get adopted very quickly. Of course, you need the right optics, you need the right equipment, but it's a very predictable road map. I mean, I guess, it's not like adopting a new protocol, right? It's just faster. And more, and with cost efficient. So, we are on the verge of 400 gigabits becoming available in the market. It will really roll out at any kind of volume next calendar year and then it will pick up volume next year in 2000. But in the meanwhile, 100 meg ethernet- excuse me, 100 gigabit ethernet is still the fastest growing thing the industry's ever seen. Even from a million ports back in 2016, to call it five million ports last calendar year expected to what 10 million ports this year, expected 20 million ports next year. But this is a speed of adoption that's unheard of. And we are at Arista we are fortunate enough to be actually the market leader on gigabit adoption. We have shipped more hundred-gig ports than any vendor including Cisco for the last three years. So our ability to embrace new speeds and bring new technologies to market is, I would say, unparalleled. We have a very good track record there and we are working really hard, sort of burning the midnight oil to extend this to the 400-gig era, which is going to be another important upgrade, especially in the cloud. I should mention that the cloud is the early adopter of all the higher speeds. Those in the hundred gig will be more than 400-gig. I'm not sure too many enterprises need 400-gig but the cloud is ready to get going as soon as it's cost effective. >> Andy, for the folks that are looking at this 20 year wave coming that we're seeing kind of cloud has been talked about on stage and here on theCUBE. Oh, it's going to be a 20 year run, transforming the infrastructure. What's the in your minds eye, what do you see as the most disruptive thing that people aren't talking about in networking? What's going to be some things that might happen in the next 10 years in your mind that might happen that people aren't really aware of, that might not see it coming, any ovations on the horizon that you're excited about or people might not expect? >> Yeah well the cloud trend is fairly predictable. I would say, all the IDC, all the analysts have predicted like that are big numbers on adoption have been pretty spot on. And if you look at the annual growth rate for cloud adoption it's 40, 45, 50 and more percent. Now there's a good question of course how the big cloud winners in the end will compete against each other. You got Amazon, that's the biggest, Microsoft is actually growing purely faster than Amazon right now but they have some catching up to do. And Google working overtime to get bigger. They may differentiate in terms of their specific focus, for example, Google has a lot AI technology, internally, that they have used for their own business, and with this influence they're arguably ahead of others, and they may just bet the farm on AI and big data analytics and things like that, which are very compelling business opportunities for any enterprise customer. So the potential value that can be created deploying AI correctly is in the perhaps trillions of dollars the next 10 years, but it probably doesn't make sense for a company for most companies to build their own AI data center, that you need a huge capital expense a huge, what hardware to use, it's going to evolve very quickly. So that maybe one of the classical cases where, you won't actually start on the cloud, and the only reason ever moving on site is your well defined environment, right, so I would actually say it's the new applications that may start in the cloud, that haven't even rolled out in volume, like AI, that will may be the biggest change that people didn't expect. >> Final question, what's the future of Arista? >> We're just working really hard to, you know, be the best provider of products, making the best products for our customers, both for the cloud and for enterprise. One thing I was going to mention about Arista is that people think we're selling network boxes which is what is which we do. But the vast majority of our investment's actually software and not hardware. So we have over 90% of our R&D headcount is in software and so the right way to think about it is actually we are a software company not really a hardware company and the saying we have internally is that hardware is easy software is hard because it's actually true. Software is much much harder than building hardware these days and the EOS software sells well over 10 million slants of codes written by over thousands of man years of engineering. So it has been a tremendous journey we've been on, but we're still scratching the surface of what we can do. >> And the focus of the software obviously makes sense. Software defined is driving everything. What are the key focus areas on the software that you guys are looking at? What's the key priorities for Arista? >> We have talked about extending our business beyond the data center into the campus. We announced our very first acquisition recently which is actually a wifi company, but I can guarantee you it's going to be a very software-defined wifi network, not a legacy controller-based approach right, for enterprise, right? We're not that interested in the hardware we're interested in providing managed solutions to our customers. >> A lot of IOT action on Andy. Thanks for taking the time to come on theCUBE. Really appreciate it. Great to meet you and have you on theCUBE. Great conversation here, it's theCUBE. I'm John Furrier. Stu Miniman breaking down all the top coverage of VMworld 2018 getting the input and the commentary from industry legends and also key leaders in the innovation cloud networking. This is theCUBE. Stay with us for more after this short break. [Technical Music]

>> Hi from Toronto, Canada. It's the CUBE covering Blockchain Futurist Conference 2018 brought to you by the CUBE. >> Welcome back to the live coverage. Day Two of the CUBE here in Toronto, Ontario in Canada for the untraceable Blockchain Futurist Conference wall-to-wall coverage Day Two. A lot of action going on. Tons of great content, tons of great after-hour networking. Just overall great vibe. In light of the market crashing, bitcoin stabilizing, some old coins getting crushed. We got it all covered for here. I'm John Furrier, your host for the CUBE, and our next guest is Nithin Eapen, who's the chief investment officer of Arcadia Crypto Ventures. Arcadia Crypto Ventures, welcome to the CUBE, good to see you. >> Hey good to see you too John. Thank you for having me here. >> Keep alumni in the know. Okay. So first of all, you're an investor in crypto. Everyone's running for the hills. A dip is happening, a crash, or some will say. Your perspective, what's happening in the market? >> See, happening in the market. So typically just like in any asset class, there was a huge run-up that happened very quickly. It didn't go up slow, alright? And the geeks were in early, the libertarians came in after that, then there were speculators. And the retail market also came in, and they all came in together for let's say the December after the November Thanksgiving week and everybody learnt about cryptos, they came in. Alright, the next set of guys haven't come in. Alright? So there's nothing for them there. Nobody's holding them there. And there were expecting the institutional investors to come in and that hasn't happened due to custody problems, ETF problems and all that stuff. Alright, it started going down. The weak hands are falling. The weak hands are keeping on falling and as with any technology, any bubble of people have come in, now they feel that okay the world is coming to an end and they are selling all their stuff. All the ICOs that have raised money in Ether, selling the Ether. All this together is pushing it down, and everybody's waiting for that next set of investors, or the, every 10 X, I mean, an asset goes up, there's a new set of guys who are supposed to come in, and this time it hasn't come in and we're waiting for that. >> You're on the panel here at the event. A lot of different panels, but one panel I watched you were on, you talked about the token model, people were holding Ether. It's kind of a debate, you know, and Bradley Rotter, another investor was saying, hey, there are too many tokens out there. You had different perspective, but one of the things I wanted to get your reaction to is that people who held on to the Ether lost their runway and it creates a harder road to hold. So people were converting to Fiat. This is a big issue. How are we going to get by this? This whole lot of Ether, more people are going to come in. The dynamics of investing in this token model, has it changed? How are you looking at it, and I'd say, how do you help startups? >> So regarding a lot of tokens, first thing is there are a lot of tokens out there. See that is going to happen. It's just like in the 1999, okay, a lot of websites and a lot of Internet companies, pet.com, everybody's an Internet company. Same way, everybody is a token. 95 to 99 percent of them are going to go away and the good ones will rise from those ashes, okay. Now regarding runway, a lot of these projects have pretty much raised enough money for 50 years of runway. So it has crashed one-fifth, okay, they have 10 years worth of runway. Typically, in the olden days, a small company with an idea or a MVP was max going to raise one million to two or three million, alright? And all of them anyway have that even after Ether has crashed. I'm saying, just don't panic okay? You still have 10 years worth of runway. Utilize that, build upon it because the high period may be over where you can just raise money on a white paper. You've got the money, build yourself. You promised your real investors I'm going to build this great thing. So this is where we're going to see the great founders to the average and the bad ones where they've hit a wall, they don't know what to do, they'll fold their hands and walk away. Really good founders, they're resilient. They will, no matter how hard they're pushed to the wall, they're going to come up with the product, you see, and they're going to try to meet customer demands. They're going to get through the feedback loop, check what the customer wants and start delivering it. >> So basically what you're saying is there's so much money being raised, and I agree with you by the way. If you go the classic venture capital route, if you had a Powerpoint or prototype or even a working product with recurring revenue, your serious preferred stock financing will be anywhere from three to 15 million. >> Oh my god. And that's high end. >> That's a high end. >> 15 million will be on the high end. Some cases are raising 50 million, some cases 70 plus million, so even if you cut that in half, it's still a better outcome on the first round. I agree at that, so I think that's interesting. The other one that you mentioned is that things are dynamic, that we're seeing here at the show is in the hallways, everybody's talking about flight-to-quality. And I was talking yesterday on the wrap-up of Day One that you can tell the good deals from the bad deals by is the venture architecture working for the coin, or is the coin working for the venture architecture. And so this flight-to-quality combined with how people are optimizing their build up is critical. >> Yes. >> Talk about some things that you're seeing with this flight-to-quality. Is there anything in particular? Is it blockchain? Is it token economics? Where's the quality deals from your perspective? >> I feel quality lies in the founder of this. The founding team, because the idea, if you really ask me what is an idea here? An idea is just like mental masturbation. Guys who sit there can come up with so many ideas. That's what ideas are, okay? Now taking these ideas to fruition, like building it. There's a capital raising part, okay? Now a lot of people are good at capital raising. They're raising money and a lot of capital coming in. That's awesome because you need capital to attract talent to the space because a lot of talent who are maybe in astrophysics or in mechanical engineering, you want that talent to come here and come with ideas and build the stuff. Okay, the capital has come in. Now once the capital has come in, you really have to build the stuff. Even after you build the stuff, you have to go find the customer right? You have to go and acquire customers and all these three things coming together are so hard in reality. And that's why the venture capital always give a little bit of money to make sure that these guys are not wasting the whole thing away, right? >> Well, the other thing I want to get in touch, get on to you is here is that, in the old days, Silicon Valley, you got to move there, the VCs were there. Now, talking about the global phenomenon, the capital formation is both inside the United States and outside the United States. Certainly inside the United States, you're starting to see the formation around traditional structures, security token, which is more like, it feels like a security, a more preferred financing model. Equity's now involved. Outside United States, a booming utility token market. Your thoughts on how that's progressing, still open, still crazy? What's your thoughts? >> So the capital model, the beauty that has happened today is, earlier, you had to pitch to two hundred VCs or three hundred VCs to get one guy to put money into it. Most of the time, they'll be wasting your time, alright? So you had to go to them to get a million. And you didn't have any other option. You couldn't get it from a small enthusiast of your project to give you five hundred bucks or a thousand bucks. So now, you have that option, okay. Now that option is being cut by regulation, by the STC and people like that coming in saying, oh you can't do that, it has to be a security token. Alright, let's make it a security token. The moment you make it a security token, my question is, can you raise money from outside? Are you stopping that? Then again it doesn't really make sense. You're cutting the small investor, the chance for him to buy into a good, okay? It was only the VCs like Sequoia, or somebody like that, who could access a deal like Google. Now we have a chance for something like Google to come up with the common man whose putting five hundred, like Ethereum. There was no venture capitalist or Wall Street who got involved in Ethereum. The real money was made by very common people who supported a decentralized world computer. >> All CVCs get it now, market entries or whoever's getting involved, starting to see VCs dabble in there. Has that changed the investment dynamic at all? >> It has because the VCs, they have this feeling they've missed out, right? So now they're putting in five and 10 million dollars into a project, valuing a project to three hundred million. It changes the dynamics because now all these guys, like, there are so many projects that are raising like a hundred million because the VCs, all these private investors, are giving 10, 15, 20 million. Like recently for example, they've raised a 300 million dollar fund. They can't invest 10 thousand to 50 thousand to 100 thousand, right? They have to push 10 million to manage the money. That is skewing stuff, and I personally am not very interested in those kinds of projects, because it's without a community power at that time, so I don't know how the token economics is going to be fruitful for the second investor, the third investor. >> And Block Tower, we found out yesterday, is also investing in putting a fund together, a venture fund. It's interesting. We'll see how that shakes out. One thing that is going to change is the dynamics. You mentioned community, obviously, a big part of that. Big community here at the Futurist event, Toronto. So they've got a Canadian culture, a lot of Ethereum DNA in this area. What are you hearing at this event? What are some of the things that you're hearing in the hallways? You've obviously been on some panels at this event, and you're highly networked. What are you hearing? What's, with your ears to the ground, what's it telling you? >> You were talking about Block Tower, yes, they're doing a venture fund. It's great. He's a very very smart investor and they're going to do very well. On the ground, so most of the questions right now are coming, so we've reached the point that okay, we have built up the blockchains or the bit coins. We want it to be faster, alright? Everybody's looking for scalability. Who can bring scalability? The EOS guys are out there. They are saying they can do, you know what, five thousand or 10 thousand or 100 thousand transactions per second. So scalability is a very very big thing. I personally consider something like interoperability, bigger. Interoperability in the sense, alright, so now you have these multiple chains. It's just like multiple types of phones. Now imagine you had an AT&T phone and you couldn't call the Verizon phone customer, alright? We're at that point. We have all these chains, there's Ethereum, there's One Chain, there's EOS. Okay, I've built, let's say, a distributor app, let's say it's a poker app on Ethereum. But I can't play with the guy who's on EOS right? What if he also wants to play poker in this poker app? Is there somewhere we can make this integrate and interoperable? Now to make it interoperable, now we have, if we go into details, there are assets, there are tokens on both sides. How can we transfer tokens from one chain to the other chain making sure there's no double-spend happening? >> I mean there's two things. That was the consumability, making it easy to use, one. And two, I think you're right on. Interoperability's huge. You got to have that. >> Interface, as you said. Interface is big. To make it simple, it's still the geeks. In geeks, a lot of people are using command lang prompts. You can't expect the common man sitting at home. It's just like email. Email was there from 1978. It's only when all these tools like, beginning '94, and the browser came in, that people started using it. So those things have to come in. >> A lot of work's got to get done. So many on the blockchain side. Well, great to have you on. Good to see you. Congratulations on your panels and this afternoon, you're doing a good job. Thanks for coming on. I appreciate it. >> Thank you so much, John. >> Any predictions by the way? >> Predictions, I don't know, I'm not a predictions guy. I just go with the market. >> Price of bitcoin 20 thousand? >> Oh I never get into those predictions. I never want to get it. I think that it's possible that the bear market can continue for a longer time based on the fact that the newer money cannot come in. It has happened before. Bitcoin has fallen so many times at the 70, 80 percent range and then it stayed stagnant for a year before the next round up came. >> And certainly we got work (inaudible). Thanks for coming on. Keep coverage here live in Toronto, Ontario. Keep coverage here with the untraceable Blockchain Futurist Conference here of two days. Day Two, keep coverage. We're back after this short break. Thanks for watching. (electronic music)

>> Announcer: From New York, it's theCUBE, covering Blockchain Week, now here's John Furrier. (upbeat music) >> Hello and welcome back, this is theCUBE's coverage here in New York City in Manhattan at the Hilton Midtown for Consensus 2018 part of Blockchain Week New York. Our next guest here is Greg Landegger who's with Smith Parsons and Whittemore also known for Bit Digest, investor in this space since the beginning, welcome to theCUBE. >> Thank you for having me John. >> So I've got to ask you, you've been an investor in a lot of coins and equity deals the space is now busting out, I mean first of all are you amazed by the amount of people here? >> I'm more than amazed, it's surreal. >> And you now have an interesting culture of new investors in the space coming in. What's it like for you working with the new investors? >> So we are a single family office that started originally in 2014 and the way I describe it is for the past few years I was the loser at the lunchroom, everyone was making fun of me and then last year all the cool jocks wanted me to sit at their table. (John laughing) A lot of our bankers, all the traditional firms, started calling up saying, "What are you doing? What is this bitcoin thing that you've been spending your time on?" >> So you had a nice little cover story there for a while but can't ignore the returns, at the end of the day. >> That's exactly right, last year was too good a year. >> Alright, so talk about some of the dynamics that you're seeing here at Blockchain Week. What are you seeing? What's the top story, what's the big news that you think is most important? >> I think the news right now is that there's real development going on, I mean we're all waiting, the holy grail to me is coming up with an institutional custodial project. Ledger Wallets announced something today so we're very excited about that and there's more and more effort being done in that area. And that's really what'll bring in more people into the market. >> Big controversy yesterday in the panel about you know Blockchain washing or you know seeing blockchain, pretty heated argument there, your thoughts? I mean obviously, it's early, embryonic, it's growing really fast, I've heard the same arguments when the web came along, too slow, you know it's not fully functional, but it was still early. Same here? What's your take on all this? >> As an investor we'd like it to be must faster, but realistically everything's surpassing any expectations. I mean nobody, if you talked to people early last year we would laugh about people predicting bitcoin at 2,500. >> So with the coins, talk about the investment you're making in coins. >> So we invest it. >> 'Cause that's different than the equity. >> It is, but we had a learning experience where one of our companies ICOed, we chose not to participate in it and it was the wrong decision, it really told us we need to be on the equity side as well the coin side. >> When was that? Early on or? >> Last year. >> Last year. >> The middle of last year. >> Okay, so what kind of coin deals are you doing? What's that profile? >> So we do a little bit of everything, I mean we've come up with a term rebel coins which are the top six coins, it's Ripple, Etherium, Bitcoin, Bitcoin Cash, EOS, and Lightcoin, we like those. Then we invest in a total of about 20 coins. >> And the blockchain doesn't bother you in the performance and all that good stuff? >> No because we're making a bet on the future of different things >> Long game. >> It's a long game for us. >> What's your criteria for investment? You obviously get the, you're kind of a rebel in yourself, but your returns are there, I've seen this movie before in the web, but everything happened in the web and the returns were made you know really before the dot com bubble popped around 2001 timeframe. But there's still great returns, but the decisions were interesting then. How do you make your choices? How do you know what a good deal is? >> It's, I'd say 80% the team. Do they have the experience? Do they have an understanding of what they're doing? I mean I have a lot of great ideas on things I know nothing about and know I'll never succeed in 'em. So if we find a team that is experienced in an area, understands it, has a real go to market story, >> Interesting enough. >> that's exciting us. >> Okay so it's the classic criteria with a twist. How about running hard? You say really you got to run hard in this game it's a fast-moving, unlike the dot com bubble, this thing is highly accelerated, you got to, you can't be sittin' on you butt on this one. >> No agreed, you've got to be very aggressive in the area, but I think with the ICOs there's more money up front than people typically had and that's really what's changed the market a lot for us, is it's not a deal where the venture capitalists go out and give a million dollars to five companies, wait to see what happens, now those five companies are able to raise a lot more money, but it doesn't guarantee they'll succeed. >> Greg you've become kind of a great known investor, certainly the Bit Digest is well-known for great following there. I got to ask you the double coin question, pun intended. There's the good and the bad, name something that's really good about this industry right now, that people should know about that might not be familiar. And what are some of the things that you're concerned with? That you want to see kind of stopped, or bad behavior eradicated? Share your perspective on the double coin side of the life if you're in the crypto world. >> So let's, starting with the bad, I think it's education, people don't understand what's going on. We keep on hearing about Mt Gox, Silk Road, that's in the past, bitcoin, and I use bitcoin as a general term at times, but you know it is not a, I mean it's a transparent currency, it's safer than a lot of other things out there, people don't understand that and I blame the media a lot for just repeating the story, maybe it sells papers, but just people aren't explaining what's really going on in the market. >> That's the Ed model for you, if it leads, if it bleeds, it leads, and that's a story. No but I think people see the ICO things too happening right? They go, "Okay, there's been some scams on the ICO-side, so I've heard that story, you know I'm worried about that." >> I mean I've spent some time in the microcap space I dealt with a lot more questionable people in microcaps than I deal in crypto. >> You mean in the traditional market? >> Traditional, pink sheets area. >> So I think what's different now, I'd love to get your perspective on that I see at least, observation wise, is you have an open source ethos kind of community model where there's a lot of self-governing going on. Are you seeing the same thing? Is there people talking, it's a tight knit community, still small, growing, is there like a special self-governance thing going on in the finance world? I mean you know there's been talk on people kind of organizing, syndicating, pooling deals together, which is natural. But how about the self-governing aspect of it? >> You know I think, I mean people, the funds or the actual token offerings themselves, that's still something that needs to be addressed, people haven't done it in the same way a typical equity raise would be done and a lot of the different fund managers, let me back up by saying this is the most open market I've ever seen where everybody is willing to talk to each other to try and share ideas and make this grow and a lot of the fund managers are now looking at it saying, "We need some more governance." There're things going on today, such as in the ICO market, if you invested in equity, you never thought that a ICO offering may occur originally and is it a liquidity event and what happens? So we're trying to come up with some governance that hasn't existed but probably needs to be, but to be fair the companies that we've been lucky enough to invest with are supporting the ideas. >> Yeah so there's liquidity going on. It's a new kind of liquidity. What is that liquidity? Where is the liquidity? It's not just a Kickstarter campaign, there's actually liquidity going on. >> There is liquidity going on and I think we're trying to figure out how to now take equity that is established in the traditional sense, we talked about security tokens, but the companies that are actually have issued ICOs are trying to determine how to give a dividend or some form of liquidity to the shareholders and that's a new market. >> Greg does the domicile matter to you? Where they are located? I mean I've heard things like special purpose vehicles have always been kind of an analogy. >> I mean traditionally I will say no, our attorneys would say yes, but if it's a Cayman, we've invested in some Cayman companies, Europe, Asian companies, so that really doesn't bother us that much, again it's the team >> It's not a deal killer. >> It's definitely not a deal killer. >> But you'd prefer, obviously, security token, in the US. >> Delaware-based would make us the happiest. But if they have a real team behind it, if they have real attorneys, real auditors, we'll look past that. >> And global reach, that's a big factor. >> Absolutely. >> How much is global impacting this world? I mean, we're in the US, we're kind of turning into it. >> It's incredibly, but I think the one area where we need to do a better job is in expanding it, I mean there are a lot of foreigners at this market today, at this event, but it's, we know the US market really well, we don't know what's going on in Asia, we read the trade magazines and that's how we know what's going on there's efforts now, I'm even, Consensus announced today they're having an event next year, or this year, in Singapore. We need to have greater reach to share what's going on around the world versus what a few people are telling us. >> John: You see that as a big issue? >> I do, we don't see what's going on in China today, we don't see what's going on in Singapore, the Philippines, and that's where a lot of the effort is going on. >> Well I think you're right, I think one of the things and that's where fake news on Facebook, you know with the whole election here in the US and now outside influence, whether it's terrorist groups or propaganda-based systems, quality of the data >> That's exactly right. >> is a really important with real time. >> And the data's limited today, I mean it's not. >> I agree, I mean we totally agree with the same thing. Okay final thought, walk away this week from big data, not big data, Blockchain Week NYC, your big walk away here this week. What's your takeaway? What do you take home? >> We went in the right direction, I mean that this is still developing, we're not there yet, there's still a lot of work to be done, but long-term whether you believe in digital currencies or not today, this is something that central governments are looking at in supporting, enterprise is getting into it, and this is the future. So we made the right choice. >> And is it only going to get better you think? >> Absolutely. >> Yeah I think stability-wise, technically, and the business models are starting to shake out. Just quickly before, I know you got to go, thank you for your time, quickly token economics, big part of the business model side of it your thoughts and reaction to how that's going and how people should start thinking about that if they could meet their criteria for some sort of de-centralized business opportunity. >> So I think, it's looking at network usage, I mean that's really the way we look at it today, the fundamental model doesn't work, or we haven't been able to determine how to do that, but adoption, it's growth, and that's how we've focused things and see where it is. >> Well congratulations for all the work and all the work you're doing and that continue to do. Thanks for coming on theCUBE, appreciate it. >> Thank you very much. >> Great to have a big-time investor on theCUBE here. Big-time investors, we had entrepreneurs, we had folks from Europe, Lithuania, all over the world here on theCUBE, we're out in the open. This is theCUBE covering Blockchain Week New York City Consensus 2018, I'm John Furrier, thanks for watching. Stay with us for more, after this break. (upbeat music)

>> Announcer: Live from San Juan, Puerto Rico, it's The Cube covering Blockchain Unbound, brought to you by Blockchain Industries. (rhythmic salsa music) >> Hello, everyone, welcome back to our exclusive coverage here in Puerto Rico, Blockchain Unbound Global Conference where the leaders in the industry from entrepreneurs to investors and everything in between, from San Francisco to New York, Miami, South Africa, Russia, all over the world are here in Puerto Rico, The Cube's coverage. Our next guest is Naomi Brockwell who is hosting the event here on stage. She's emceeing it all. You go to her YouTube channels /naomibrockwell, check out her videos, hosts events all over the industry, Blockchain, celebrity, thought leader, futurist. What else are you? >> You're very, very kind. It's all not true, but I have been in the space for awhile and I love Blockchain text, so it's exciting to be here. >> I'm really impressed by your stamina and passion on stage. What a line up today, so give us the quick highlights What happened today, we were here filming. What happened inside the venue? We saw some great talks come through there. >> Yeah, we saw some great ones. A probably a highlight for me was seeing Alena. She was the former CEO of SatoshiLabs, which created Trezor, one of mt favorite hard wallets, by the way, and it was just great listening to her talk about security because that is something that is so important and people do not take seriously enough. I have people telling me, "Oh, Naomi, I started up this wallet, and I stood my public in the..." I was like, "So did you write down your private key and all that, it's in a safe place?" He's like "Yup, it's in my DropBox." I'm like, "No, what are you doing, this is not good!" Hearing her basically say anything that has touched the internet ever, any device that has been on the internet ever is not secure. Do not trust it, you need to use offline things. >> There's a lot of wallet grabbing going on digitally. >> Absolutely. >> That's come up. I saw some stuff on Telegram, people that we know, be like, "Hey, beware, a lot of hacking out there. "Got to watch your coins." >> And also, I mean there's just huge gains to be made, right, so it makes sense, especially we expect the price of Bitcoin to go up. You have hackers just targeting at specific wallets, and specific vulnerabilities, and they just keep going until they get through, so you've got to be vigilant and you got to take every precaution possible. Got to take it seriously. >> Is there a best practice that you observed? >> Absolutely. Don't store anything online. And another thing, people are telling me, "Yeah, you know, I have my private key written down." I'm like, "Great, you wrote it down twice?" They're like, "Yeah, I just printed that out twice." I'm like, "No, your printer stores an image "of everything you've ever printed out "and it's connected to wifi at all times. "That is going to be hacked. "Do not print out your private key, "your paper wallet, anything. "You've got to write this down." Paper and pen is the best practice you can use and-- >> Going old school analog, big time. >> Absolutely. And isn't that funny? You have this amazing new tech that's fantastic, cutting edge, and what are we doing to keep it safe? Pen and paper. >> Yeah, turn off all wifi, put on some vinyl records, eight-track recorder, going old school. Okay, I got to get-- >> But holding your own coins, holding your own money, having control of your own money, no one said that's the easiest practice. They just said it was the most secure and is going to give you the most power over your funds, and so if you want to do that, there's a price to pay and that is being vigilant about your security. >> One of the things about that I'm interested in talking to you about is being someone who's present at creation of a big movement like this. You've seen the evolution. What's the growing pains in the industry 'cause we're seeing a lot of people who are the pioneers, now that people, I won't call them tourists because they're still young and emerging, but you have a lot of get-rich-quick schemes. Those are obviously being filtered out pretty quickly by the community, but you're seeing new entrants come in. You have financing, got big numbers coming in, big money. How has it evolved, I mean, what's your observation? How is it maturing? What's some of the vibe? You've got some factions over here, you've got some factions over there. People are still getting along. What's the overall sentiment? >> I've been in this space for about five years, so in this industry, it's like being an absolute veteran, and what you've seen is it started out as this very libertarian space. People were interested in taking their money out of the control of government and having more autonomy over their finds, having more control over their funds. Blockchain was invented as a tool for giving people more freedom, and what you're seeing now is a bunch of people who entered the space who don't necessarily share that ethos, but what I love about Blockchain is that they're taking this technology that is inherently taking people towards a more decentralized free society, and they're applying it to all different industries. So my point of view, it doesn't bother me at all that the new entrants don't necessarily share this passion for freedom that the people who've been here since the beginning have, but the fact that they are taking this and making the world a more free place regardless is really exciting to me. >> And that's the real opportunity 'cause inherently the ethos is Blockchain, so it's not so much a political orientation or this or that. It's how you apply it. >> Exactly, and so Blockchain, being a decentralized ledger is great because when you decentralize any power structure, no matter what industry it is, I mean, you're really making people more free, you're giving them more responsibility, and I like seeing things become decentralized. >> Certainly we're a media company, we're kind of a new car, we don't believe in a central gatekeeper, so I got to ask you the question. As a YouTuber who has a big fan base and in the community, it's really disheartening for me to see John Oliver take down Brock Pierce, although it was a hilarious video up until the point where he maliciously went after Brock in a very vicious way. How does one person have that power. I mean, it shouldn't be that way, or the New York Times or a certain publication that, they're the gatekeeper still. That was an example I looked at and said, "That's where Blockchain can disrupt the media." I mean, it's great comedy, but it kind of went over the top. >> For me, I mean-- >> He got fired by the Eagles project. They wiped his name off everything. I mean, that's just, I just see that as a problem. You, what's your thoughts? >> When you say how do these people get there, John Oliver is a funny guy. I see how he got there, he's very talented, he has a great team, great writing, but that section, I thought it was pretty spot on for most of the Bitcoin segment. It got to that section, I was like, "Oh, this is kind of sloppy research." so that was disappointing. I saw that Brendan Bloomer had a nice response that he posted. He's the head of EOS. >> What did he say? >> He was just very funny and playful with John, so that was nice to see. He set him straight in terms of saying like, "What does this technology enable?" He was basically arguing Blockchain doesn't go far enough. It doesn't fulfill the needs that I see in society so I created this other thing which does XYZ. He was authoritative in stating that, "no, you just don't understand the tech." He basically clarified the Brock situation and said, "No, actually having him involved was really great." He's not involved for various reasons. Yeah, it was an interesting segment that the-- >> It was so funny after that one point. I'm like, "Oh, boy." >> I was enjoying it up til then. I was like, "Okay, this makes sense, you know. >> It's funny. >> And then it gets up to that and I'm like, "Okay, this just became an at home and I'm going to tag. This is a cheap throw, and people do that with Bitcoin. Since it's inception, you've seen people in media and mainstream media in particular target Bitcoin and they're just adopting the government narrative saying, "Oh, everyone in this industry is corrupt," or "Everyone in this industry is an ICO scammer," or "Everyone in this industry is a drug runner "and they're all selling drugs on the dark web." It's like, you know what, you can do some research and do a bit better than that, so to see John Oliver perpetuating those at-home and I'm going to attack was disappointing, but at the same time, we are seeing that narrative shift, and you're seeing more news outlets become more positive about Bitcoin. >> Also the data is the self-government and the community has the data. The truth is going to get out there. That's the purpose of Bitcoin, Blockchain, and Crypto. You've got consensus, you've got algorithms, you've got machine learning. Okay, cool. What are you up to? You've got an exciting couple things going on. You've got a lot going on, so take a quick minute to explain your big project. You've got some exciting, cool things, share it. >> Got some fun things going on at the moment. While I'm not emceeing 20 to 40 Blockchain conferences a year, which is exciting, but takes up a lot of my time, I am a television producer. I have my own show. It's Bitcoin, Blockchain-tech based. Then on top of that, I'm a film producer, television producer. We're working on a really exciting series right now. It's called The HardFork Series. It's this dystopian future, it's a sci-fi thriller. $18 million, or it's a large budget, and we have one of the guys from Ozark, on Netflix originally. If you haven't seen it, you should see it. It's a great show. Christopher James Baker is our lead and the community support we have garnered for this project is great because we have not only Hollywood types, our director is a Sundance alumni. We've also got people in the Crypto Space who have a huge amount of credibility. We've got Bruce Fenton, Jason King on our Board of Advisors. People who understand the space, so the community is excited about for the first time having a mainstream production that is being created with a large budget where people in the industry have control of the narrative. We haven't had control of the narrative yet. >> That's true. >> The government's still controlling it, mainstream media's still controlling it, and so to create a series that could potentially expose people to this technology for the first time and to have control of that narrative is exciting. >> Is it going to be inspirational, it going to be a comedy? >> It's going to be gritty, it's a sci-fi thriller. We call it a crypto-thriller noir. Is that not the best genre you've ever heard? It's pretty cool. It's this idea that in the future the government has their own Blockchain and there's Crypto Coins that they have. It's all centralized and they control the populous with this augmented reality where everything is gamified. Basically the idea is the government's trying to distract people from important issues, like gamifying everything. You have this group of renegades who comes in. They're like, "No, we're going to decentralize this." They come and work their magic. >> It's Mr. Robot meets Black Mirror. >> Oh, yeah, no, it's pretty great. >> Kind of thing goin' on? It basically is a tale about the power of decentralization and how it can disrupt all authoritarian role, which I think is just a great topic for right now. >> What's your background? Where are you, out of LA, New York? >> I'm based in New York. My background actually. >> How'd you get here? >> I was an opera singer. That's how I got here. I moved to New York as an opera singer and then pivoted into movie production, and from there went on to television production. I got into the Crypto Space because I'm really interested in Australian economics and love the philosophy that Bitcoin was created on. It's been an interesting journey. >> You got addicted. >> Yeah, now I kind of-- >> You went to the light. >> Yeah, I'm bringing everything together now with my Bitcoin, economics-based, Crypto-thriller noir, so it's pretty exciting. >> I'm super impressed. Congratulations on all your continued success. Great job emceeing the Blockchain Unbound. >> Thank you. >> Great energy, great mind, great to have you on The Cube. Thanks for sharing >> It's wonderful to be here. >> your story. Thanks for everything. It's The Cube, I'm John Furrier here. Breaking down, we've got all the action in Puerto Rico. Thought leaders, entrepreneurs, investors, people in the industry sharing their story. Sharing the data with you, that's our mission. Thanks for watching. Day two tomorrow, we'll see you then. (engaging tones)

>> Narrator: Live from San Juan, Puerto Rico. It's the CUBE, covering Blockchain Unbound. Brought to you by Blockchain Industries. (upbeat Spanish-style music) >> Hey, welcome back everyone. We're here in Puerto Rico for exclusive CUBE coverage, I'm John Furry, you're host. Here, with Blockchain Unbound, this is a global event. From everyone from Silicon Valley, New York, Miami, Russia, Eastern Europe, all over the world, and Puerto Rico coming together, talk about the future of the economy, Blockchain decentralized apps, and more. Our next guest is CUBE alumni, and part of our inaugural crypto currency coverage, from Polycon 18, back to give a command performance, Nithin Eapen Chief Investment Officer at Arcadia Crypto Ventures, good to see you. >> Good to see you too John. >> So, you had a great showing at our first crypto event, PolyCon, great to see you back in the trenches, you're out, hard-working, pounding the pavement, doing deals. What's your analysis here, I mean, you're here networking, you checked out the sessions. What's your take? >> We've met some really good founders, really good projects, so that's the key thing that we are looking for. The main idea as our tagline says, "We back Blockchain's best." We are looking for the best founders. We are looking for the teams, then for the idea. Anything that's decentralized, we are backing them. >> So, network effect has been a big part of the conference I've been having. We talked about security tokens, utility tokens. A lot of interesting things going on here, but there's a backdrop. You've got multiple events going on. You've have Blockchain Unbound, run by Blockchain Industries, great team, which put this event together in five weeks. So, shout out to those guys. >> (laughs) You have Coin Agenda, >> That's coming! going on, another event going next door, which is after this event. And then you have a lot of series of little events, meet-ups, the local community had a great crypto mixer, Puerto Rico, a lot of action. >> Too much action, and it's like at the same time, look at it, TokenFest in San Francisco, another 2,000 people over there, here people are on the waiting list, so much action. >> And that's going on this week, as well. You have anyone going to that event? >> I know, I've got a lot of friends going over there. For me, it made sense, this is closer. I thought I would meet a lot of them. Puerto Rico is better I found, you know? >> A lot of big money here, a lot of smart money. >> A lot of smart money, a lot of big money. >> John: Global? >> Global, and the greatest part of Puerto Rico is, it's bringing this concept like, they have reduced taxes for US people to zero percent for individuals, for the next, until 2036. Now that's a big difference. If you want to change your domicile to Puerto Rico, for your business it's 4% corporate taxes, and individual it's 0% now, that's... >> John: But you got to move here. >> You got to move here, okay. But you don't have to give up your US citizenship. Now, I think what's going to happen right now is they're going to be other states maybe going to compete for this, or other countries are going to compete for the capital to flow, where does capitol flow to? Capital will flow to cheaper places, or lesser taxes. >> So, I got to ask you, I was talking to you earlier this morning, here on the CUBE I said, "There's two killer apps, one of them is money." Money is the killer app. >> No doubt! >> Your reaction to that? >> It is, okay all of our lives, let's say for your son, or my kid, or for me, what my parents, when we went to school, why did they make us go to school or learn, they tell us, "Okay you got to go to college!" Why, they want us to have a better life, they want to have a better car. How do you get them, you want money for them. But in none of those years did somebody teach you, how does money originate? What is money, is it something you should buy the Garmin? So in everything that we go for, unless we're the Buddha or Jesus himself, we do it for money. >> Well you bring up a good point. I mean I have a immigrant background from my family, my wife's family as well. >> Where did you come from? >> Well I'm actually Native American, I mean American. >> Okay But two, three generations back they, Ireland, >> Ireland, okay! French Canadian, a little bit of Armenian in me but that's okay, all kind of blended. I'm in the melting pot, I'm not 1st generation but, in Boston where my parents were from, very much an immigrant town, and they didn't have any money. So if you look at now, what's gone through the financial dot-com bubble, which had some impact, but the financial crisis is 2018, if you look at what's happened since then, the generation of millennials there in more debt. They're not realizing college, it might not be the thing. So we went to school so that we can have a better life than our parents did. Now it's like everyone's realizing that, shit we're screwed. So watching as a path, of freedom. >> It is! A new way to create wealth, capture the value, but in a new way. >> Yes, because you have a chance to be a part of an economy without, a permission of a centralized organization. So, earlier if you wanted to work somewhere, you needed an organization to work. This is making it much easier to be a part of the economy. to contribute, to help people to get help, all this is happening and you don't have to go to school. Maybe school is overrated, our colleges overrated. It is too expensive, you spend 200 thousand dollars on college. What is your ROI, when is your ROI? Maybe some disciplines have it. But this is your chance to.. >> Well, you you know that we love media and our disruptive media at the CUBE is to do things differently, but lets talk about some current events that's been happening. So this week, John Oliver created a video trashing crypto currency, it was actually funny. But it got to the Brock Pierce part, and he really had it out for Brock Pierce. He absolutely destroyed him. >> He did! And since then, he lost his place EOS. They wiped away all his DNA of evidence with the company. This is a comedian, at John Oliver, you're a freaking comedian. What gives him the right to I have that kind of influence on someone's job when he's just telling a joke. There's no actually substance of any facts of any kind at what he's doing, So that's a central authority figure that took an editorial comedic routine, and put it out there, but people think that's news. >> See, >> That's not The power of media, that the power of all the old traditional media, is that they had a bigger reach. I think it's going to change, it is going to be the YouTube's. And it's going to become a decentralized YouTube equivalent, or a decentralized media equivalents. Like, a lot of people have made memes and you know, fun videos that go viral and they'll take things down. The same, John Oliver obviously, he has us laugh. >> He's funny as hell though. He is funny as hell! >> You got to admit, >> He's pretty funny! The bit was really good, >> But end of the day, but he really went after Brock Pierce. Something was going on there, he took him down. >> See the traditional industries or traditional media they want to take down everybody that they don't consider, the birds of a same feather, this is somebody weird, like Trump, they try to take down Trump. They will try to take down anything which doesn't fit their globalist, elitist agenda. End of the day, like Brock Pierce sitting on a billion, and John over with his comedy, who has the bigger laugh? I don't know, if you ask me. >> When you have F U money like Brock Pierce does, I'm sure it rolls off his shoulders. But it does impact the ecosystem a bit. Basically EOS has erased his name in any capacity. So, obviously this impacts to public opinion. So these comedians and news rep, they have an obligation to share the data. Editorializing, I mean I do it all the time, don't get me wrong. >> (laughs) But, there's a point, consensus is part of the algorithm now in these Blockchain and Crypto communities where you have Blockchain as a store, against him. >> Okay! But consensus and transparency is a huge deal. >> Nithin: Yes! >> This is part of the formula. >> I know but see, the whole thing... When John Oliver does something, it's not about consensus. He can do it, okay, it's going to change! It's like this, when Bitcoin came in 2009, the traditionalists were coming up at the story that, "it is fake money, it's not going to go anywhere." Then it became one dollar, they were just laughing at it. Then became 10 dollars, they said it's going to go down. Then it became hundred dollars, they did the same thing. And it's only after long time they will realize, "Oh my God, it's changed." The rock has been pulled under my leg. It's like when Amazon came, all the traditional retail guys said, "Nobody's going to go and buy a book without touching it." Now we have Toys "R" Us that just went bankrupt. There's no more Toys" R" Us, you know, you have to buy your toys pretty much from Amazon at this point. >> Well everything in the model of future will be all contexual so, videos, comedian, news articles, reports, editorial, all will roll into one thing. That's going to be a great thing. >> Yes! >> And media is going to take a lot of, natural language processing, it's going to get transcript link. I think you're already doing it right, you're going to take a transcript of what I speak, you're going to attach the words, you're going to attach it to brands, you can sell that, and that is going to be the future. >> Well lets get some of that intellectual property out of your head and into the camera, and for the audience. What are you hearing in the hallways here, obviously this is a great networking event here. Lot's of agendas, phenomenal, as well as we had over sold almost by double. There's people out in the hallways, it's sold out, so there's a lot of Lobby Con going on. There's a conference within the conference going on. >> Nithin: It is! We call it Lobby Con! >> (laughs) What are you hearing in the hallways, what is some of the cool things that's new to you, that you're discovering? >> So lot of people are now telling me they are very excited about security tokens. They're telling me they're buying security tokens. I asked them, which security tokens? It's not there yet, okay. See, that's where I tend to differ. If security tokens are going to be the big thing, I'm going to be buying it because we are informed. >> John: Buy everything that moves. >> We buy it as it moves, but, security token, my question is, so you're trying to make something that is a utility, now you're going to make it security? So that is equity markets, there is a CC for that. And you're going to fit this in over there, I'm like, I don't know, what are people trying achieve? This is a free market and they're trying to bring it into regulation. >> What's a red flag for you as a, security token implies directly that you're securing something. What are they, >> You're pretty much What are people securing, equity, future cash flows, dividends, what are some of the vehicles you've seen? >> At that time they are pretty much secure, or securing future cash flows as dividends. They're going to give dividends, they're saying if you're a token holder, you're going to get dividends. My question at that time is, then why do you want a token, why can't it be in equity? Oh, you think you can come with their argument that it's more liquid, but equity's a liquid. I don't think it isn't a liquid. But it is a great way to go around and secularize a lot of things. You can have a small business, think of it, you and me we have a small business, let's say we have a partnership We have a small... >> We have a small business, We have a small business, we have a partnership. It's very hard to exit out of a small business. If we can fractionalize the ownership of a business thru tokens, and there might be people are willing to buy, put thousand dollars in, and maybe I can exit at some point. Otherwise there's no exit for me. It's very hard to exit out of a small business. Now then, what's the difference between that and equity? I don't know you know, those lines are blurred but, I'm happy for the fact that something like that will give liquidity to a lot of small business owners. America is a country of small business owners. Across the globe it supports small business owners. If it brings liquidity, okay I'm happy with that. But it's really beating the purpose that we don't want a centralized power controlling us. Because now that you have Google and Facebook that banned crypto-currency ads. Why, Women's Day, all our data, they give us a free access but they hold a lot of our personal data. I'm thinking, the guy who brings in the, a decentralized search or a decentralized social media, I'm going to invest in them. I don't care if their a success or if the success will come later. There are going to be multiple libertarian investors like me that's going to invest in them. >> What I learned was that money is a killer app, and I'll stand by that. I think marketplaces are also the killer app. You ever think, >> Perfectly true! that this conference, that kind of validates where I was thinking was, the people who nailed a business model, that's the critical, critical pacing item. If you screw the business model up, you go sideways. The technology risk isn't as bad as the business model decision risk. So I'm seeing the successful ICOs, or plays, have a lock in on the structural value proposition and to be directionally correct, with an understanding of what the hedge is on the technology. >> Yep! >> So they can manage it. So it's like programmable plumbing. They're recognizing that dynamic. The other thing that I'm learning is that the money flow from other countries is massive. If you want a money launderer from Colombia, it's coming in from Metadine Narcos. It's coming in from Japan, and China. Bitcoin and Blockchain is a money transfer opportunity so, I'm seeing a massive amount of money, flowing in >> Capital is flowing, in massive waves. >> it's flowing in. >> And it's good, and even if these projects fail, it's a good thing because, you had all this money that was stuck somewhere, that flowed in, and as I said, many of those projects are going to fail. Let them fail, because this money has flowed in, you will have a lot of people come and work on these projects, and eventually the correct solution will emerge. >> And new structural dynamics are at play. And new investors are coming in. >> New investors, so many new investors. You know the funny thing John, after we met at Polycon, I think that 99% of the people I meet here are totally new. All the guys we met at Polycon in Bahamas, totally different. I only know very few people that I met over there. So that means a whole set of investors, or common people, who just want to learn about it, totally new. That's really good! And who wins here, the average citizen entrepreneur, the average citizen player that wants to start something whether it's a banking, a service provider of some sort, a entrepreneur, or a new financial instrument or firm, all have greenfield opportunity here. >> Because, see earlier when you wanted to raise money, I was talking to a founder the other day, I asked him, how hard it was for you to raise your first raise, like 10 years ago? He was telling me that he walked the doors across multiple VCs, to kind of scrap in one and a half million dollars. And then he did his second loan after eight years. >> He'd have to crawl on his knees to get that. >> And that too, you won't get the attention, you need to know reference, now you have a chance to go to the world, and monies were, so easy money coming in is a bad thing in a way that most entrepreneurs will feel the investors will lose their money. but that's different, but it at least you have access and you can try to think that you had any in mind earlier. You had no option, they would take a big stake. Now there's no dilution, this is pretty much cloud funding on steroids. You have a chance to go to market, you get the go to market money and see if it works. And if it doesn't work, let's fix it after that. >> Nithin, I got to get your thoughts on building a company, 'cause obviously, you're also not only in this as an investor, you're also doing strategic advisory work for people building the venture architecture and then the actual build up plans for their venture. So you've talked about this in the past, you have a relationship with some protocol guys, you can check with them, there's some good network there. But there's also a dynamic with this industry where the business development aspect of it is really important. People are partnering, >> Very very important. And there's a way to partner and a way not a partner. There's a way to do token economics and there's a way not to do token economics. What is your advice, to companies that have a good thing going on, they have a tail wind at their back, they got wind in their sails, but have to make some hot partnering decisions. Looking for fellows, fellowship in that ecosystem. How do you advise folks in this partnerships and then talk about token economics after? >> So the first thing I would tell founders is to reach out. This community is very very supportive. Like you can reach out to me, you can reach out to other guys, LinkedIn, Facebook, or come to these events, and in the hallways. Say your idea and you need help, because you will need help, you cannot run this alone. You are running a company, you are running your team. Have a good team, that's a first thing. Have a great team, great founders, vision, execution, you need that. The next key thing is, you have to think about marketing and how do you market, you need to get some big names on your board who can reach out to their network and tell them about your idea. And they reach out of the rest for you. >> So networks are super important. >> Super super important, like... >> So advisor, that their advisor selection should be based on their network that they bring to the table. >> Right, so the first advisor selection is the guy who will help you flush out your idea properly as tokens. The next advisor set is a marketing advisor or a technical advisor. The marketing advisers also very important because you need to market the product, get the money in, because end of the day, you need money to build it. You need to pay your employees, whether it's in Bitcoins or in fear, It doesn't matter, one of these is required. So you have these three things, then you need to build strategic partnerships in your business. Say, let's see your a loyalty points guy, like Al is doing, You know Al right? >> Al Burgio, >> From FuZe Chain now doing DigitalBits. Hot deal, hot deal! >> Hot deal, hot deal. >> Look at what Al did, he went out, he got his strategic partnerships with the loyalty guys, now he's got the brand, the strategic partnerships, he's built a product already. The money he needs is only for go to market so that he can push it to multiple companies and get them on the chain. Brilliant idea so, strategic partnerships, advisors, founding team, and then, show the idea to the people. Go out there, let them know that this is what you're doing, why this idea is great, how big is the market, there was a problem that you're solving, what is your solution. Explain yourself frankly and honestly, and I think the community will reward you, to go and find your dream. >> Great point, be honest, ask for help. Again, I can't reiterate my experience of, I'll share, is during the computer revolution, Internet revolution, Web.1.o, and now partnering in the early days when it's forming, can make or break a company. Make or break a company. >> Very True! So, note to that, okay now, token economics. >> Nithin: Sure! >> Sounds easy, but you really got to make sure that you have a good economic framework that matches the value proposition. Talk about what you advise there. >> So last day of the one founder restart to me, ICO is going on for our seventh day into the ICO. He's raised less than 300 thousand dollars. I meet him, and he needs help. After what, seven days into the ICO, all I could tell him is, shut off your ICO, it's not going to raise money. He's like, "Why," and I'm like, he said, "read this paper." I'm like, "There's nothing in this paper "I can put money into." And he's like, "Why is that?" So I asked him, so how many companies has he put his money into, how many points has he bought? Four years, he has not bought a single coin. And he's flustered something by himself. So he's never bought a coin, and he's expecting people to buy coins at his price. So I tell people, either you should notice, you should be an investor yourself. So there are different kinds of investors, there are institutional investors that are funds, family offices, and then are retail investors. If you're not any one of these, or any one of in this group, how do you know what these guys are buying it for? So reach out to them! >> That's where the advisory comes in, Know your customer! >> Know your customer! And not the KYC in a different way, but know 'em from a marketing standpoint. Know how the retail, >> Exactly! purchase is made. >> Because if... >> If you yourself are a buyer, at least you have some idea. If you've never bought a token, and if you're, I had another founder tell me that, my tokens are worth hundred million. I'm like, you don't have a user, you just have a product. You're tokens are worth shite, if you ask me. It's worth zero, I can tell my house is worth hundred million dollars. It's only worth as much as the top buyer. How much is he willing to pay for me? So I told the founder, I'll pay so much for this price because I think, if it's about that, there's a huge risk as the main investor coming in. He doesn't agree! >> So lets talk about some, how rounds are being done now. So one trend that I'm seeing, not, I shouldn't say trend, a few deals I've seen done, but it seems like a trend, I'm trying to get validation on this, Where people are avoiding the public ICO altogether, doing all privates. >> Yes! Basically over subscribed round. Trend, dynamic, real deal, what's your thoughts on reaction to that? >> It's just that the founders are adapting. Because if you go to the public, the moment you're going to the public, what's happening is, there's the SEZ component. Whether it's a utility and they can come after you, so they have made it private. And then they went after, and even further, a lot of the founders that I know, they just stopped accepting money from US entities or US individuals. Well it's a bad deal for a small investor. See the big investors are wealthy investors. They all have an external entity where they can invest into it. What about the small investor who was investing thousand dollars or 5,000 dollars? Now you have pretty much shut out his chance of getting into a great ICO. So the founder is going to raise his money from maybe Korea, Japan, China, and Singapore. He's going to form a company or a foundation in Cayman, or Lichtenstein, or Gibraltar. The small investor is a loser. The large institutional investor has no loss in this process, so, that is the founder adapting because he does not want, >> They want to manage, >> They don't want it to become lawsuits, basically. >> Compliance, audits, SEZ problems, they don't end fencing problems. >> So now let's compare, in contrast, different kind of companies. US based company, wants to raise money in the US, they do accredited. But they want to go outside, say Asia, or an Asia company wants to raise money in the US, what's that dynamic like, what are the issues? >> I think what's going to happen is they going to, some of them are going to register themselves as a security token, some of them are going to do just a reg D for very high net worth individuals. And the common, the the public round, they going to raise it from the China, the Korea, Japan, or is lobbying them. And that's what I think, multiple small countries are going to come into the space, which they know now, they can get the capital flowing into their company, and they going to allow their rules to be lax. They going to let capitol flow through. And then US will have to change, or maybe UK will have to change, whoever is against this will have to change. Capital means money, belt capital, and resource capital, like humans, we tend to move to places that are freer. Why did I move from India to US, or why did your parents or the earlier generation move to US? >> John: For a better life. >> It's a better life, the real better life is, you have the freedom over your property, the fruits of your labor. If the fruits of your labor are taxed at 50% or thirty, the more it goes up, you just don't want to work anymore, or you're going to to search for that place that will tax you less. >> Like Puerto Rico! >> Nithan: Puerto Rico! >> Are you bullish on Puerto Rico? >> I am bullish on Puerto Rico because, these, if they can sustain this, and have the rule of law, means they can protect people's wealth, like from crime and all those things, crime or being kidnapped. These two things happen, I'm telling you, most people will move or some of state will have to change their laws. >> They got to get >> the security up. Nithan, thanks so much for coming on the CUBE. Really appreciate your insight. Thanks for sharing! >> Thank you very much. This is the CUBEs exclusive coverage from Puerto Rico where we're getting on the ground here. Getting all the data from the Blockchain Unbound Conference. Part of restart week. I'm John Furry here, we've got more coverage after this break, thanks for watching! (upbeat electronic music)

(Latin music) >> Narrator: Live, from San Juan, Puerto Rico, it's theCUBE! Covering Blockchain Unbound. Brought to by Blockchain Industries. (Latin music) >> Welcome back to our exclusive Puerto Rico coverage, here, this is theCUBE for Blockchain Unbound, the future of blockchain cryptocurrency, the decentralized web, the future of society, the world, of work, et cetera, play, it's all happening right here, I'm reporting it, the global internet's coming together, my next guest is Fred Krueger, a founder and CEO of a new innovative approach called WorkCoin, the future of work, he's tackling. Fred, great to see you! >> Thank you very much, John. >> So we saw each other in Palo Alto at the D10e at the Four Seasons, caught up, we're Facebook friends, we're LinkedIn friends, just a quick shout out to you, I saw you livestreaming Brock Pierce's keynote today, which I thought was phenomenal. >> Yeah, it was a great keynote. >> Great work. >> And it's Pi Day. >> It's Pi Day? >> And I'm a mathematician, so, it's my day! (Fred laughs) >> It's geek day. >> It's geek day. >> All those nerds are celebrating. So, Fred, before we get into WorkCoin, I just want to get your thoughts on the Brock Pierce keynote, I took a video of it, with my shaky camera, but I thought the content was great. You have it up on Facebook on your feed, I just shared it, what was your takeaway of his message? I thought it was unedited, obviously, no New York Times spin here, no-- >> Well first of all, it's very authentic, I've known Brock 10 years, and, I think those of us who have known Brock a long time know that he's changed. He became very rich, and he's giving away, and he really means the best. It's completely from the heart, and, it's 100% real. >> Being in the media business, kind of by accident, and I'm not a media journalist by training, we're all about the data, we open our datas, everyone knows we share the free content. I saw the New York Times article about him, and I just saw it twisted, okay? The social justice warriors out there just aren't getting the kind of social justice that he's actually trying to do. So, you've known him for 10 years, I see as clear as day, when it's unfiltered, you say, here's a guy, who's eccentric, smart, rich now, paying it forward? >> Yep. >> I don't see anything wrong with that. >> Look, I think that the-- >> What is everyone missing? >> There's a little jealously, let's be honest, people resent a little bit, and I think part of it's the cryptocurrency world's fault. When your symbol of success is the Lamborghini, it's sort of like, this is the most garish, success-driven, money-oriented crowd, and it reminds me a little bit of the domain name kind of people. But Brock's ironically not at all that, so, he's got a-- >> If you look at the ad tech world, and the domain name world, 'cause they're all kind of tied together, I won't say underbelly, but fast and loose would be kind of the way I would describe it. >> Initially, yes, ad tech, right? So if you look at ad tech back in say, I don't know, 2003, 2004, it was like gunslingers, right? You wanted to by some impressions, you'd go to a guy, the guy'd be like, "I got some choice impressions, bro." >> I'll say a watch too while I'm at it. >> Yeah, exactly. (John laughs) That was the ad tech world, right? And that world was basically replaced by Google and Facebook, who now control 80% of the inventory, and it's pretty much, you go to a screen, it's all service and that's it. I don't know if that's going to be the case in cryptocurrencies, but right now, initially, you sort of have this, they're a Wild West phenomenon. >> Any time you got alpha geeks, and major infrastructure application developer shift happening, which is happening, you kind of look at these key inflection points, you need to kind of have a strong community self-policing policy, if you look at the original DNS days, 'cause you remember, I was there too, Jon Postel, rest in peace, godspeed, we all know what he did, Vint Cerf with TCP/IP, the core dudes, and gals, back then, they were tight! So any kind of new entrants that came in had to prove their worth. I won't say they were the most welcoming, 'cause they were nervous of people to infect the early formation, mostly they're guys, they're nerds. >> Right, so I think if you look back at domain names, back in the day, a lot of people don't know this, but Jon Postel actually kept the list of domain names in a text file, right? You had basically wanted a domain name, you called Jon up, and you said, "I'd like my name added to the DNS," and he could be like, "Okay, let me add it "to the text file." Again, these things all start in a very sort of anarchic way, and now-- >> But they get commercial. >> It gets commercial, and it gets-- >> SAIC, Network Solutions, in various time, we all know the history, ICANN, controlled by the Department of Commerce up until a certain point in time-- >> Uh, 'til about four years ago, really. >> So, this is moving so fast. You're a student of the industry, you're also doing a startup called WorkCoin, what is the formula for success, what is your strategy, what are you guys doing at WorkCoin, take a minute to explain what you guys are doing, your team, your approach-- >> So let's start with the problem, right? If you look at freelancing, right now, everybody knows that a lot of people freelance, and I don't think people understand how many people freelance. There are 57 million people in America who freelance. It's close to 50%, of us, don't actually have jobs, other than freelancing. And so, this is a slow moving train, but it's basically moving in the direction of more freelancers, and we're going to cross the 50% mark-- >> And that's only going to get bigger, because of virtual work, the global workforce, no boundaries-- >> Right, and so it's global phenomena, right? Freelancing is just going up, and up, and up. Now, you would think in this world, there would be something like Google where you could sit there, and go type patent attorney, and you could get 20 patent attorneys that would be competing for your business, and each one would have their price, and, you could just click, and hire a patent attorney, right? Is that the case? >> No. >> No, okay. >> I need a patent attorney. >> So, what if you have to hire a telegram manager for your telegram channel? Can you find those just by googling telegram manager, no. So basically-- >> The user expectation is different than the infrastructure can deliver it, that's what you're basically saying. >> No, what I'm saying is it should be that way, it is not that way, and the reason it's not that way is that basically, there's no economics to do that with credit cards, so, if you're building a marketplace where it's kind of these people are find each other, you need the economics to make sense. And when you're being charged 3.5% each way, plus you have to worry about chargebacks, buyer fraud, and everything else, you can't built a marketplace that's open and transparent. It's just not possible. And I realized six months ago, that with crypto, you actually could. Not that it's going to be necessarily easy, but, technically, it is possible. There's zero marginal cost, once I'm taking in crypto, I'm paying out crypto, in a sort of open marketplace where I can actually see the person, so I could hire John Furrier, not John F., right? >> But why don't you go to LinkedIn, this is what someone might say. >> Well, if you go to LinkedIn, first of all, the person there might not be in the market, probably is not in the market for a specific service, right? You can go there, then you need to message them. And you just say, "Hey, your profile looks great, "I noticed you're a patent attorney, "you want to file this patent for me?" And then you have to negotiate, it's not a transactional mechanism, right? >> It's a lot of steps. >> It's not transactional, right? So it's not click, buy, fund, engage, it just doesn't work that way. It's just such a big elephant in the room problem, that everybody has these problems, nobody can find these good freelancers. What do you end up doing? You end up going to Facebook, and you go, "Hey, does anybody know any good patent attorneys?" That's what you do. >> That's a bounty. >> Well, it's kind of, yeah. >> It's kind of a social bounty. "Hey hive, hey friends, does anyone know anything?" >> It's social proof, right? Which is another thing that's very important, because, if John, if you were-- >> Hold on, take a minute to explain what social proof is for the folks. >> Social proof is just the simple concept that it's a recommendation coming from somebody that you know, and trust. So, for example, I may not be interested in your video services, John, but I know you, and I am in the business of a graphic designer, and you're like, "Fred, I know this amazing graphic designer, "and she's relatively cheap." Okay, well that's probably good enough for me to at least start looking at her work, and going the next step. On the other hand, if I'm just looking at 100 graphic designers, I do not know. >> It's customized contextual data, around a specific transaction from a trusted source. So you socially, are connected to, or related. >> It, sort of, think about this, it doesn't even have to be a source that you know, it could be just a source that you know of, right? So, to use the Brock example again, Brock's probably not going to be selling his services on my platform, but what if he recommends somebody, people like giving the gift of recommendation. So Brock knows a lot of people, may not be doing as well as him, right? And he's like, "Well, this guy could be a fantastic guy "to hire as social media manager," for example. Helping out a guy that needs a little bit of work. >> And endorsement's a major thing. >> It is giving something, right? You're giving your own brand, by saying, "I stand behind this person." >> Alright, so tell me about where you are with WorkCoin, honestly, people might not know your background, if you check him out on LinkedIn, Fred Krueger, mathematician, Stanford PhD, well-educated, from a centralized organization, like Stanford, has a good reputation, you're a math guy, is there math involved? Obviously, Blockchain's math related, you got crypto, how are you guys building this out, share a little bit of, if you can, show a little leg on the tech-- >> The tech is sort of simple. So basically the way it is, is right now it's built in Google Cloud, but we have an interface where you can fund the thing, and so it's built, first of all, that's the first thing. We built it on web and mobile. And you can basically buy WorkCoins from the platform itself, using Ethereum, and also, we've integrated with Sensei, a different token. So, we can integrate with different tokens, so you're using these tokens to fund the coin, to fund your account, right? And then, once you have the tokens in your account, you can then buy services with them, right? And then the service provider, the minute they finish delivery of the service, to your expectation, they get the coin in their account, and then they can transfer that coin back into Ethereum, or Bitcoin, or whatever, to cash out. >> Okay, so wait, now that product's built, has the coins been issued? Are you guys doing an ICO? Are you raising money? >> So we're in the middle of an ICO-- >> Private? >> Private, only for now. So we've raised just under $4,000,000-- >> Great, congratulations. >> I have no idea if that's good or not-- >> Well, it's better than a zero (laughs). >> It's better than zero, right? It is better than zero, right? >> So there's interest obviously. >> Yeah, so look, we've got a lot of interest in our product, and I think part of the interest is it's very simple. A lot of people can go, "I think this thing makes sense." Now, does that mean we're going to be completely successful in taking over the world, I don't know. >> Well, I mean, you got some tailwinds at your back. One, the infrastructure in e-commerce, and the things that you're going after, are 20-year-old stacks. Number two, the business model, and expectation of the users, is shifting radically, and expectations are different, and there's no actual product that does it (laughs), so. >> So a lot of these ICOs, I think they're going to have technical problems actually building into the specification. 'Cause it's difficult, when you're dealing with the Blockchain, first of all, you're building on some movable platform, right? I met some people just today who are building on Hash-Craft, now, that's great, but Hash-Craft is like one day old, you know? So you're building on something that is one day old, and they've just announced their coin five minutes ago, you know. Again, that's great, but normally as a developer myself, I'm used to building on things that are years old, I mean, even something that's three years old is new. >> This momentum going on, that someone might want to tout Hash-Craft for is, 'cause it's got momentum-- >> It's got total momentum. >> They're betting on an ecosystem. But that brings up the other thing I want to get your thoughts on, because we've observed this at Polycon, we've been watching the industry landscape now, onto our 10th year, there's almost an ecosystem stake in the ground. The good news is, ecosystem's developing. You got entrepreneurs, you got projects, you got funding coming in, but as it's going to be a fight for the ecosystem, because you can't have zillion ecosystems, eventually they have to be-- >> Well, you know-- >> Or can you? >> Here's the problem, that everybody's focused on the plumbing right now, right, the infrastructure? But, what they should be focusing it on is the app. And I've a question for you, and I've asked this question to my advisors and investors, which are DNA Fund, and I say-- >> Let's see if I get it right, it's a test here on the spot, I love this, go. >> Okay, so here's the question, how many, in your wallet right now, on your mobile phone, show me how many Blockchain apps you have right now. >> Uh, zero, on my phone? >> Okay, zero. >> Well I have a burner phone for my other one, so (laughs). >> But on any phone, on any phone that you possess, how many Blockchain apps do you have on your phone? >> Wallet or apps? >> An app that you-- >> Zero. >> An app, other than a wallet, zero, right? Every single person I've asked in this conference has the same number, zero. Now, think about this, if you'd-- >> Actually, I have one. >> Uh, which one? >> It's called Cube Coin. >> Okay, there you go, Cube Coin. But, here's the problem, if you went to a normal-- >> Can I get WorkCoin right now? >> Yeah, well not right now, but I have it on my wallet. So for example, it's in test flight, but my point is I have a fully functional thing I can go buy services, use the coin, everything, in an app. I think this is one of the things-- >> So, hypothetically, if I had an application that was fully functional, with Blockchain, with cryptocurrency, with ERC 2 smart contracts, I would be ahead of the game? >> You would be ahead of the game. I mean, I think-- >> Great news, guys! >> And I think you absolutely are thinking the right thinking, because, everybody's just looking at the plumbing, and, look, I love EOS, but, it's sort of a new operating system, same as Hash-Craft, but you need apps to run on your thing-- >> First of all, I love chatting with you, you're super smart, folks out there, Fred is someone you should check out, you got great advisor potential. You're right on this, I want to test something out with you, I've been thinking about this for a while. If you think about the OSI model, OSI stack, for the younger kids, that was a key movement that generated the key standards in the stack for inner networking, and physical devices. So, it was started from the bottom up. The top of the stack actually never standardized, it became the presentation session layer, they differentiated, then eventually became front end. If you look at what's happening now, the top of the stack is really the ones that's standardizing, or standardizing with business logic, the bottom of the stack has many different versions of say, Blockchain, so the question is is that, it might be the world that will never have a TCP/IP moment, it might be that the business app logic will dictate to some sort of abstraction layer, down to programmable plumbing. You see this with cloud with DevOps. So the question is, do see it that way? I'm thinking out loud here, but when I'm seeing the trend here, it's just that, people who make the business logic decisions first, and nail those, that they're far more successful swapping out and hedging on the plumbing. >> Look, I think you mentioned the word alpha geek, and I think you've just defined yourself as an alpha geek. Let's just go in Denzel Washington's set in the movie Philadelphia, talk to me like I'm a five year old, okay? What is the problem you're solving? >> The app, you said it, it's the app! >> My point is like, everybody is walking around with apps, if the thing doesn't fit on an app, it's not solving any problem, that's the bottom line. I don't care whether you're-- >> You're validating the concept that all that matters is the app, the plumbing will sort itself out. >> I think so. >> Is that a dependency, or is it an interdependency? >> What do you need in a plumbing? Here's how I think you should think. Do I need 4,000 transactions per second? I would say, rarely, most people are not sitting there going, "I need to do 4,000 transactions per second." >> If you need that, you've already crossed the finish line, you probably want a proprietary solution. >> Just to put things in perspective, Bitcoin does 300,000 transactions per day. >> Well, why does Ripple work? Ripple works because they nailed the business model. >> I'll tell you what I think of Ripple-- >> What's your take? >> Why ripple works, I think all, and I'm not the first person to say this, but I think that, the thing that works right now, the core application of all this stuff, is money, right? That's the core thing. Now, if you're talking about documents on the Blockchain, is that going to be useful, perhaps. In a realist's say in the Blockchain, perhaps. Poetry on the Blockchain, maybe. Love on the Blockchain? Why ban it, you know? >> Hey, there's crypto-kiddies on the Blockchain, love is coming next. >> Love is coming next. But, the core killer app, the killer app, is money. It's paying people. That is the killer app of the Blockchain right now, okay? So, every single one of the things that's really successful is about paying people. So what is Bitcoin? Bitcoin is super great, for taking money, and moving it out of China, and into the United States. Or out of Nigeria, and into Switzerland, right? You want to take $100,000 out of Nigeria, and move it to Switzerland? Bitcoin is your answer. Now, you want to move money from bank A to bank B, Ripple is your answer, right? (John laughs) If you want to move money from Medellin, Colombia, that you use in narcos, Moneiro is probably your crypto of choice, you know? (John laughs) Business truly anonymous. And I think it's really about payment, right? And so, I look at WorkCoin as, what is the killer thing you're doing here, you're paying people. You're paying people for work, so, it's designed for that. That's so simple. >> The killer app is money, Miko Matsumura would say, open source money, that's his narrative, love that vision. Okay, if money's the killer app, the rest is all kind of window dressing around trying to race to-- >> I think it's the killer, it's the initial killer app. I think we need to get to the point where we all, not all of us, but where enough of us start transacting, with money, with digital money, and then after digital money, there will be other killer apps, right? It's sort of like, if you look at the internet, and again, I'm repeating somebody else's argument-- >> It's Fred Krueger's hierarchy of needs, money-- >> Money starts, right? >> Money is the baseline. >> The initial thing, what was the first thing of internet? I was on the internet before it was the internet. It was called the ARPANET, at Stanford, right? I don't know if you remember those days-- >> I do remember, yeah, I was in college. >> But the ARPANET, it was email, right? We had the first versions of email. And that was back in 1986. >> Email was the killer app for 15, 20 years. >> It was the killer app, right? And I think-- >> For 15 or 20 years. >> Absolutely, well before websites, you know? So I think, we got to solve money first. And I bless everybody who has got some other model, and maybe they're right, maybe notarization of documents on the internet is a-- >> There's going to be use cases for Blockchain, some obvious low-hanging fruit, but, that's not revolutionary, that's not game-changing, what is game-changing is the promise of a new decentralized infrastructure. >> Here's the great thing that's absolutely killer about what this whole world is, and this is why I'm very bullish, it's, if you look at the internet of transmitting value, from one node to another node, credit cards just do not do a very good job of that, right? So, you can't put a credit card inside a machine, very well, at all, right? It doesn't work! And very simple reason, why? Because you get those Amex fraud alerts. (John laughs) Now the machine, if he's paying another machine, the second machine doesn't know how to interpret the first machine's Amex fraud alerts. So, the machine has to pay in, the machine's something that's immutable. I'm paying you a little bit of token. The classic example is the self-driving car that pays the gas pump, 'cause it's a gas self-driving car, it pays it to fill up, and the gas pump may have to pay its landlord in rent, and all of this is done with tokens, right? With credit cards, that does not work. So it has to be tokens. >> Well, what credit cards did for other transactions a little bit simplifies your things, there's a whole 'nother wave coming, that just makes it easier and reduces the steps. >> It reduces the friction, and that's why I think, actually, the killer app's going to be marketplaces, because, if you look at a marketplace, whether it's a marketplace like ours, for freelancers, or your marketplace for virtual goods, and like wax, or whatever it is, right? I think marketplaces, where there's no friction, where once you've paid, it's in. There's no like, I want my money back. That is a killer app, it's an absolute killer app. I think we're going to see real massive consumer adoption with that, and that's ultimately, I think, that's what we need, because if it's all just business models, and people touting their 4,000 transactions a second, that's not going to fly. >> Well Fred, you have a great social graph, that's socially proved, you got a great credentials, in mathematics, PhD from Stanford, you reinvent nine, how many exits? >> Nine exits. >> Nine exits. You're reinventing freelancing on the Blockchain, you're an alpha geek, but you can also explain things to a five year old, great to have you on-- >> Thank you very much John. >> Talk about the WorkCoin, final word, get the plugin for WorkCoin, can people use it now, when is it going to be available-- >> Look, you can go check out our platform, as Miko said, Miko's an advisor, and Miko said, "Fred, think of it as a museum, "you can come visit the museum, "you're not going to see a zillion, "but you can do searches there, you can find people." The museum is not fully operational, right? You can come and check it out, you can take a look at the trains at the museum, the trains will finally operate once we're finished with our ICO, we can really turn the thing on, and everything will work, and what I'd like you to do, actually, you can follow our ICO, if you're not American, you can invest in our ICO-- >> WorkCoin dot-- >> Net. >> Workcoin.net >> Workcoin.net, and, really, at the end, if you have some skill that you can sell on the internet, you're a knowledge worker, you can do anything. List your skill for sale, right? And then, that's the first thing. If you're a student at home, maybe you can do research reports. I used to be a starving student at Stanford. I was mainly spending my time in the statistics department, if somebody said, "Fred, instead of grading "undergrad papers, we'll pay you money "to do statistical work for a company," I would be like, "That would be amazing!" Of course, nobody said that. >> And anyways, you could also have the ability to collaborate with some quickly, and do a smart contract, you could do some commerce, and get paid. >> And get paid for it! >> Hey, hey! >> How 'about that, so I just see-- >> Move from the TA's grading papers payroll, which is like peanuts-- >> And maybe make a little bit more doing something that's more relevant to my PhD. All I know is there's so many times where I've said, my math skills are getting rusty, and I was like, I'd really wish I could talk to somebody who knew something about this distribution, or, could help me-- >> And instantly, magically have them-- And I can't even find them! Like, I have no idea, I have no idea how I would go and find people at Stanford Institute, I would have no idea. So if I could type Stanford, statistics, and find 20 people there, or USC Statistics, imagine that, right? That could change the world-- >> That lowers the barriers, friction barriers, to-- >> Everybody could be hiring graduate students. >> Well it's not just hiring, collaborating too. >> Collaborating, yeah. >> Everything. >> And any question that you have, you know? >> Doctor doing cancer research, might want to find someone in China, or abroad, or in-- >> It's a worldwide thing, right? We have to get this platform so it's open, and so everybody kind of goes there, and it's like your identity on there, there's no real boundary to how we can get. Once we get started, I'm sure this'll snowball. >> Fred, I really appreciate you taking the time-- >> Thanks a lot for your time. >> And I love your mission, and, we support you, whatever you need, WorkCoin, we got to find people out there to collaborate with, otherwise you're going to get pushed fake news and fake data, best way to find it is through someone's profile on WorkCoin-- >> Thanks. >> Was looking forward to seeing the product, I'm John Furrier, here in Puerto Rico for Blockchain Unbound, Restart Week, a lot of great things happening, Brock Pierce on the keynote this morning really talking about his new venture fund, Restart, which is going to be committed 100% to Puerto Rico, this is where the action will be, we will be following this exclusive story, continuing, we'll be back with more, thanks for watching. (soothing electronic music)

>> Narrator: Live from Nassau in the Bahamas. It's The Cube! Covering PolyCon 18. Brought to you by PolyMath. >> Welcome back everyone, we're live here in the Bahamas with The Cube's exclusive coverage of PolyCon 18, I'm John Furrier with my co-host Dave Vellante, both co-founders of SiliconANGLE. We start our coverage of the crypto-currency ICO, blockchain, decentralized world internet that it is becoming. It's the beginning of our tour, 2018. Our next guest is Hartej Sawhney who's the advisor at Pink Sky Capital, but also the co-founder of Hosho.io. Welcome to The Cube. >> Thank you so much. >> Hey thanks for coming on. Thanks for coming on. >> Thanks guys. >> We had a great chat last night, and you do some real good work. You're one of the smartest guys in the business. Got a great reputation. A lot of good stuff going on. So, take a minute to talk about who you are, what you're working on, what you're doing, and the projects you're involved in. >> So first of all, thank you so much for having me, it's really exciting to see the progress of high-quality content being created in the space. So my name is Hartej Sawhney. We have a team based in Las Vegas. I've been based in Las Vegas for about five years. But I was born and raised in central New Jersey, in Princeton. And my co-founder is Yo Sup Quan. We started this company about seven months ago and my co-founder's background was he's the co-founder of Coin Sighter in Exchange out of New York, which exited to Kraken. After that he started Launch Key which exited to Iovation. And prior to this company, my previous company was Zuldi, Z-U-L-D-I .com where we had a mobile point of sale system specifically for high volume food and beverage companies and businesses. So we were focused on Fintech and mobile point of sale and payment processing. So both of us have a unique background in both Fintech and cyber-security and my co-founder Yo, he's a managing partner of a crypto hedge fund named Pink Sky Capital. And he was doing diligence for Pink Sky, and he realized that the quality of the smart contracts he was seeing for deals that he wanted to participate as an investor in, and I'm an advisor in that hedge fund, we both realized that essentially the quality of these smart contracts is extremely low. And that there was nobody in this space that we saw laser focused on just blockchain security. And all the solutions that would be entailed in there. And so we began focusing on just auditing smart contracts, doing a line-by-line code review of each smart contract that's written, conducting a GAS analysis, and conducting a static analysis, making sure that the smart contract does what the white paper says, and then putting a seal of approval on that smart contract to mitigate risk. So that the code has not been changed once we've done an analysis of it, that there's no security vulnerabilities in this code, and that we can mitigate the risks for exchanges and for investors that someone has done a thorough code analysis of this. That there's no chance that this is going to be hacked, that money won't be stolen, money won't be lost, and that there's no chance of a security vulnerability on this. And we put our company's name and reputation on this. >> And what was the problem that is the alternative to that? Was there just poorly written code? Was it updated code? Was it gas was too expensive? They were doing off-chain transactions. I mean what are some of the dynamics that lead you guys down this path? I mean this makes sense. You're kind of underwriting the code, or you're ensuring it or I don't know what you call it, but essentially verifying it. What was the problem? And what were some of the use cases of problems? >> I would say that the underlying problem today in this whole industry, of the blockchain space, is that the most commonly found blockchain is Ethereum. The language behind Ethereum is called Solidity. Solidity is a brand new software language that very few people in the world are sufficient programmers in Solidity. On top of that, Solidity is updated, as a language on a weekly basis. So there are a very limited number of engineers in the world who are full-stack engineers, that have studied and understand Solidity, that have a security background, and have a QA mindset. Everything that I just said does exist on this Earth today and if it does, there's a chance that that person has made too much money to want to get out of bed. Because Ethereum's price has gone up. So the quality of smart contracts that we're seeing being written by even development shops, the developers building them are actually not full-stack engineers, they're web developers who have learned the language Solidity and so thus we believe that the quality of the code has been significantly low. We're finding lots of critical vulnerabilities. In fact, 100% of the time that Hosho has audited code for a smart contract, we have found at least a couple of vulnerabilities. Even as a second or the third auditor after other companies conduct an audit, we always find a vulnerability. >> And is it correct that Solidity is much more easy to work with than say, Bitcoin scripting language, so you can do a lot more with it, so you're getting a lot more, I don't want to say rogue code, but maybe that's what it is. Is that right? Is that the nature of the theory? >> Compared to Bitcoin script, yes. But compared to JavaScript, no. Because Fortune 500 companies have rooms full of Java engineers, Java developers. And now the newer blockchains are being written, are being written on in block JavaScript, right? So you have IBM's Hyperledger program, you have EOS, you have ICX, Cardano, Stellar, Waves, Neo, there's so many new projects that are coming, that all of them are flexing about the same thing. Including Rootstock, RSK. RSK is a project where they're allowing smart contracts to be tied to the Bitcoin blockchain for the first time ever. Right, so Fortune 500 companies may take advantage of the fact that they have Java developers to take advantage of already, that already work for them, who could easily write to a new blockchain, and possibly these new blockchains are more enterprise grade and able to take more institutional capital. But only time will tell. And us as the auditor, we want to see more code from these newer blockchains, and we want to see more developers actually put in commits. Because it's what matters the most, is where are the developers putting in commits and right now maximum developers are on the Ethereum blockchain. >> Is that, the numbers I mean. Just take a step there. So the theory of blockchain. Percentage of developers vis-a-vis other platforms percentages-- >> By far the most is on developed on Ethereum. >> And in terms of code, obviously the efficiencies that are not yet realized, 'cause there's not enough cycles of coding going on, it's evolution, right? >> Yes. >> Seems to be the problem, wouldn't you say? So a combination of full-stack developer requirements, >> Yes. >> To people who aren't proficient in all levels of the stack. >> Yes. >> Just are inefficient in the coding. It's not a ding on the developers, it's just they're writing code and they miss something, right? Or maybe they're not sufficient in the language-- >> It's a new language. The functions are being updated on a weekly basis, so sometimes you copied and pasted a part of another contract, that came from a very sophisticated project, so they'll say to us, well we copied and pasted this portion from EOS, so it should be great. But what that's leading to is either A, they're using a function that's now outdated, or B, by copying and pasting someone else's code from their smart contract, this smart contract is no longer doing what you intended it to do. >> So now Hartej, how much of your capability is human versus machine? >> Yeah I was going to ask that. >> ML, AI type stuff? >> So we're increasingly becoming automated, but because of the over, there's so much demand in the space. And we've had so much demand to consistently conduct audits, it's tough to pull my engineers away from conducting an audit to work on the tooling to automate the audit, right? And so we are building a lot of proprietary tooling to speed up the process, to automate conducting a GAS analysis, where we make sure you're not clogging up the blockchain by using too much GAS. Static analysis, we're trying to automate that as fast as possible. But what's a bit more difficult to automate, at least right now, is when we have a qualified full-stack engineer read the white paper or the source of truth and make sure the smart contract actually does it, that is, it's a bit longer tail where you're leveraging machine learning and AI to make that fully automated. (talking over each other) >> But maybe is that, I'm sorry John. Is that the long term model or do you think you can actually, I mean there's people that say augmented intelligence is going to be a combination of humans and machines, what do you think? >> I think it's going to be a combination for a long time. Every single day that we audit code, our process gets faster and faster and faster because once we find a vulnerability, finding that same vulnerability next time will be faster and easier and faster and easier. And so as time goes on, we see it as, since the bundle of our work today is ICOs, token generation events, there are ERC 20 tokens on the Ethereum blockchain. And we don't know how long this party will last. Like maybe in a couple years or a couple months, we have a big twist in the ICO space that the numbers will drastically go down. The long tail of Hosho's business for us, is to keep track of people writing smart contracts, period. But we think they are going to become more functional smart contracts where the entire business is on a smart contract and they've cut out sophisticated middle men. Right and it may be less ICOs, and in those cases I mean, if you're a publicly traded company, and you're going from R&D phase where you wrote a smart contract and now actually going to deploy it, I think the publicly traded company's going to do three to five audits. They're going to do multiple audits and take security as a very major concern. And in the space today, security is not being discussed nearly as much as it should. We have the best hedge funds cutting checks into companies, before the smart contract is even written, let alone audited. And so we're trying to partner with all the biggest hedge funds and tell the hedge funds to mandate that if you cut a check into a company that is going to do a token generation event, that they need to guarantee that they're going to at least value security, both in-house for the company and for the smart contract that's going to be written. >> How much do you charge for this? I mean just ballpark. Is it a range of purchase price, sales price? What's the average engagement go for, is it on a scope of work? Statement of work? Or is it license? I mean how does it work? >> So first it depends is it a penetration test of the website or the exchange? Penetration testing of exchanges are far more complex than just a website. Or if it's a smart contract audit, is it an ICO or is it a functional smart contract? In either case for the smart contract audit, we have to build a long set of custom tooling to attack each and every smart contract. So it's definitely very case-by-case. But a ballpark that we could maybe give is somewhere around the lines of 10 to 15 thousand dollars per 100 lines of functional code. And we ask for about three weeks of lead time for both a smart contract audit and a penetration test. And surprisingly in this space, some of the highest caliber companies and high caliber projects with the best teams, are coming to us far too late to get a security audit and a penetration test. So after months of fundraising and a private pre-sale and another pre-sale, and going and throwing parties and events and conferences to increase the excitement for participating in their token sale, what we think is the most important part, the security audit for a smart contract is left to the last week before your ICO. And a ridiculous number of companies are coming to us within seven days of the token sale, >> John: Scrambling. >> Scrambling, and we're saying but we've seen you at seven conferences, I think that we need to delay your ICO by two or three weeks. We can assure you that all of your investors will say thank you for valuing security, because this is irreversible. Once this goes live and the smart contract is deployed. >> Horse is out of the barn. >> It's irreversible. >> Right right. >> And once we seal the code, no one should touch it. >> It's always the case with security, it's bolted on at the last minute. >> It's like back road recovery too, oh we'll just back it up. It's an architectural decision we should have made that months ago. So question for you, the smart contract, because again I'm just getting my wires crossed, 'cause there's levels of smart contracts. So if we, hypothetical ICO or we're doing smart contracts for our audience that's going to come out soon. But see that's more transactional. There's security token sales, >> Yes. >> That are essentially, can be ERC 20 tokens, and that's not huge numbers. It could be big, but not massive. Not a lot transaction costs. That's a contract, right? That's a smart contract? >> People are writing smart contracts to conduct a token generational event, most commonly for an ERC 20 token, that's correct. >> Okay so that's the big, I call that the big enchilada. That's the big-- >> Right now that is the most important, the most common. >> Okay so as you go in the future, I can envision a day where in our community, people going to be doing smart contracts peer-to-peer. >> Sure. >> How does that work? Is that a boiler plate? Is is audited, then it's going to be audited every time? Do the smart contracts get smaller? I mean what's your vision on that? Because we are envisioning a day where people in our audience will say hey Hartej, let's do a white paper together, let's write it together, have a handshake, do a smart contract click, click. Lock it in. And charge a dollar a download, get a million downloads, we split it. >> I envision a day where you can have a more drag and drop smart contract and not need a technical developer to be a full-stack engineer to have to write your smart contract. Yes I totally envision that day. >> John: But that's not today. >> We are very far from that today. >> Dave, kill that project. >> We're so far, we're very far from that. We're light years far from that. >> Okay well look. If we can't eliminate the full-stack engineers, I'm okay with that. Can we eliminate the lawyers? At least minimize them. >> We can minimize them possibly, but we have five stacks of lawyers for our company, I don't see them going anywhere. We need lawyers all the time. >> I see that in the press sometimes, yeah it's going to get disrupted. I don't see it happening. Okay we were having a great conversation off-camera about what makes a good ICO. You see, you have a huge observation space. And you were very opinionated. A lot of companies are out there just floating a token because they're trying to raise money. And they could do the same thing with Ethereum or Bitcoin. >> That's correct. >> Your thoughts? >> My thoughts are that it's very important for companies who are sophisticated, I think, to start by giving away a little bit of equity in the business. And that if you want to be in the blockchain space, and you really firmly believe you have a model to have a token within a decentralized application, I would still start by finding quality investors in the space, in the world. They might be still in Silicon Valley. Silicon Valley didn't just disappear overnight now that the blockchain is out. I am all for the fact that Silicon Valley no longer has as much of a grip on tech because of their blockchain world. And they're not seeing as much deal flow, and there's not as much reliance on venture capitalists, that's exciting to me. But let's not forget the value, that top-tier VCs like Andreessen Horowitz and Vinod Khosla. and Fintech VCs like Commerce Ventures and Nyca Partners in New York, Propel VC, these are good Fintech VC arms that continue to time and time again add immense value to companies. >> And they have networks. They add value. >> They have strong-valued networks, but they're just not going to disappear. And those VCs, if they've invested into a company, took a board seat, fostered their growth, taught them what it means to actually be a real business that's growing at 7-15% week over week, maybe two years down the line, after they've given away a board seat to someone like Nyca Partners, I would be interested in understanding what your token economics look like. Now that you have a revenue generating business, how you've placed a token model into this already running business that makes 25 to 50 grand a month and you have a team of 10, self-sustaining themselves off of revenue. Much more intriguing of a conversation. What's happening today in the space is, hey my buddy Jim and Steve and I came up with an idea for this business. There's going to be a token, and we're starting a private pre-sale tomorrow. I'm going to give you 300% bonus and will you be my advisor? And they're going to start raising capital because of an idea. You know what we used to say in the Silicon Valley startup world, you can raise on just a PowerPoint. I think in the blockchain world, you could raise on just an idea? And then maybe a white paper? And the white paper is one page? And so you've raised a bunch of capital, you have a white paper. >> Now you got to build it. >> Now you got to build, you got to write a smart contract, you got to build it, you got to do it, and then everyone loses excitement and it goes back to our previous conversation the development talent. So, another thing not being discussed in the space is company employee retention, right? So if you have a growing number of ICOs, that have very large budgets because investors have found a way to sink millions of dollars into a company early, you've got $5 million in the hands of a company to start, well this company can afford to pay someone a very ridiculous salary to come join them to write the smart contract now. So they could offer an engineer 500 Eth a month to come join them for three months. So you have good engineers just bouncing from one ICO to the next and as soon as the ICO goes live, they quit. This is a problem to companies who are-- >> It's migration, out migration. >> How do you retain, even capital? >> Companies like Hosho, ShapeShift, companies that are selling picks and shovels of the industry, that want to be household names in the space, we have to really think about how we're going to retain our employees in the space. >> So the recruitment and bringing on the new generation, we were also talking off camera about Bill Tye and the younger generation and kind of riffing on the notion that, because there is a new set of mission-driven developers and builders, on the business side as well. Your thoughts and reaction to what you see and what you see that's good and what you see that we need more of? >> So the most powerful thing in the blockchain space that I think is so exciting is that you have a lot of people between the age of 25 and 35 that don't come from money, that didn't go to Stanford, didn't go to Y Combinator, they're probably not white, from-- >> John: Ivy League schools. >> Ivy League schools. I'm not trying to make it about race, but if you're a white male and went to Stanford and went to Y Combinator, chances of you raising VC money on sand hill are a lot higher, right? And you have a guy looking like me who didn't go to Stanford, doesn't come from money, running up and down sand hill, I have personally faced that battle and it wasn't easy. And we were based in Vegas and so being based in Vegas, I'd also have to deal with so why do you live in Vegas? When are you going to move to Silicon Valley? And if we invest in you, you're going to open an office in sand hill right? And now in the blockchain world, what's exciting is you have so many heavy-hitters running as founders, some of the most successful companies in the space, who don't come from money and a big prestigious background, but they're honest, they're hard-working, they're putting in 12 to 15 hours of work every single day, seven days a week. And to space, six weeks is like six years. And we all have a level of trust that goes back to times when we were all running struggling startups. And so our bond is, to me, even more significant than what must have been between Keith Rabois and Peter Thiel in the PayPal Mafia. We have our own mafias being formed of much stronger bonds of younger people who will be able to share much more significant deal flow so if the PayPal Mafia was able to join forces to punch out companies like eBay and Square, wait 'til companies in this space, we have young, heavy-hitters right now who are non-reliant on some of the more traditional older folks. Wait 'til you see what happens in the next couple years. >> Hartej, great conversation. And I want to get one more question in. We've seen Keiretsu Forum, mafias, teams more than ever as community becomes an integral part of vetting and by the way trust, you have unwritten rules. I mean baseball, Dave and I used to do sports analogies. >> Self-governance. >> Reggie Jackson talked about unwritten rules and it works. If you beam the batter, the other guy, your best star, your side's going to get beamed. That's an unwritten rule. These are what keeps things going, balanced through the course of a season. What are the unwritten rules in the Ethos right now? >> Honesty, transparency, and that's the key. We need self-governance. This is a very unregulated market. There's rules being broken by people who are ignorant to the rules. The most common rule I've seen being broken is by people who are not broker dealers, running around fundraising capital, they don't even know what an institutional advisor license is. They don't know what a Series 7 and a Series 63 is. I asked a guy just last night, he said I'm pooling capital, I'm syndicating, let me know if you want in on the deal. And I said when did you take your Series 7? He goes what's that? Get away from me. You're an American, you need to look up what US securities laws are and make sure that you're playing by the rules and if someone who doesn't know the rules has entered our inner circle of investors, of advisors, of people sharing deal flow, we have a good network of people that are closing the loop for companies, whether it's lawyers, investors, exchanges, security auditors, people who write smart contracts, dev shops, people who write white papers, PR marketing, people who do the road show, there's a full circle-- >> So people are actually doing work to put into the community, to know your neighbor if you will, know the deals that are going down, to identify potential trip wires that are being established by either bad actors or-- >> KYC, AML, this is a new space that's also attracting people that have a criminal background. Right? And that's just a harsh reality of the space. That in the United States if you have a felony on your record, maybe getting a job has become really difficult and you figured let's do an ICO, no one's going to check my record. That is a reality of the space. Another reality is the money that was invested into this entire ICO clean. Right, that's a massive issue for the US government right now. It's been less than 15 hours since the SEC has issued actually subpoenas to people on this exact topic, today. >> This is a great topic, we'd like to do more on. >> Dozens of them. >> We'd like to continue to keep in touch with you on The Cube. Obviously you're welcome anytime, loved your insight. Certainly we'd love to have you be an advisor on our mission, you're welcome anytime. >> For sure, let's talk about it. Come out to Las Vegas. Hosho's always happy to host you. >> John And Dave: We're there all the time. >> The Cube lives at the sands. >> It's our second home. >> Come by Hosho's office and let us know. Vegas is our home. We are hosting a conference in Vegas after DEFCON. So DEFCON is the biggest security conference in the world. You have the best black hats and white hats show up as security experts in Vegas and right on the tail end of it, Hosho's going to host a very exclusive invite-only conference. >> What's it called? Just Hosho Conference? >> Just Blockchain. It'll be called the just, it'll be by the Just Blockchain Group and Hosho's the main backer behind it. >> Well we appreciate your integrity and your sharing here on The Cube, and again you're paying it forward in the community, that's great. Ethos we love that. That's our mission here, paying it forward content. Here in the Bahamas. Live coverage here at PolyCon 18. We're talking about securitized token, a decentralized future for awesome things happening. I'm Jeff Furrier, Dave Vellante. We'll be back with more after this short break. (upbeat music)