>>Hello, and welcome to the cube unstoppable Doneen showcase. I'm John furrier, host of the cube. We got a great discussion here called the influencers around what's going on in web three and also this new sea change cultural change around this next generation, internet web cloud, all happening, Jeremiah yang industry analyst, and founding part of the cleaner insights. Share my great to see you. Thanks for coming on. Appreciate it. Uh, registered vice-president of marketing at unstoppable domains in the middle of all the actions. Gentlemen, thanks for coming on on the cube for this showcase. >>My pleasure. So I think it was done >>At Jeremy. I want to start with you. You've seen many ways, but fallen all of your work for over a decade now. Um, you've seen the web 2.0 wave. Now the web three's here. Um, and it's not, I wouldn't say hyped up. It's really just ramping up and you're seeing real practical examples. Uh, you're in the middle of all the action. What is this web three? Can you frame for us that mean you've seen many waves? What is web three mean? What is it? What is it all about? >>Well, John, you and I worked in the web to space and essentially that enabled peer to peer media where people could, could upload their thoughts and ideas and videos, um, without having to rely on centralized media. And unfortunately that distributed and decentralized movement actually became centralized on the platforms or the big social networks and big tech companies. And this has caused an uproar because the people who are creating the content did not have control, could not control their identities and could not really monetize or make decisions. So web three is what is, which is a moniker of a lot of different trends, including crypto blockchain. And sometimes the metaverse is to undo the controlling that has become centralized. And the power is now shifting back into the hands of the participants again, and then this movement, they want to have more control over their identities, their governance, the content that they're creating, how they're actually building it and then how they're monetizing it. So in many ways, it's, it's changing the power and it's a new economic model. So that's web three without really even mentioning the technologies. Is that helpful? >>Yeah, that's great. And ran. We were talking about, on the cute many times and one notable stat, I don't think it's been reported, but it's been more kind of a rumor. I hear that 30% of the, um, Berkeley computer science students are dropping out and going into crypto or blockchain or decentralized startups, which means that this there's a big wave coming in of talent. You seeing startups, you're seeing a lot more formation. You're seeing a lot more, I would say, kind of ramping up of real people, not just, you know, people with a dream it's actual builders out here doing stuff. What's your take on the web three, moving with all this kind of change happening, uh, from people and also the new ideas being refactored. >>I think that the competition for talent is extremely real. And we start looking at the stats. We see that there is an draft of people that are moving into this space. People that are fascinated by technology and are embracing the ethos of web three. And at this stage, I think it's not only engineers and developers, but we have moved into a second phase where we see that a lot of supporting functions know marketing, being one of them, sales, business development, uh, are being built up quite rapidly. It's not without actually reminding me of the mid two thousands. You know, when I started, uh, working with Google at that point in time, the walled gardens rightly absorbing vast, vast cohorts of young graduates and more experienced professionals that are passionate and moving into the web environment. And I think we are seeing a movement right now, which is not entirely dissimilar, except >>Yeah, Jeremiah. You've seen the conversations over the cloud. I call the cloud kind of revolution. You had mobile in 2007, but then you got Amazon web services changed the application space on how people developed in the cloud. And again, that created a lot of value. Now you're seeing the role of data as a huge part of how people are scaling and the decentralized movement. So you've got cloud, which is kind of classic today. State-of-the-art, you know, enterprise and or app developers and you've got now decentralized wave coming. Okay. You're seeing apps being developed on that, that architecture data is central in all of this, right. So how do you view this? As, as someone who's watching the landscape, you know, these walled gardens are hoarding all the data. I mean, LinkedIn Facebook, they're not sharing that data with anyone they're using it for themselves. So as they can control back, comes to the forefront, how do you see this market with the applications and what comes out of that? >>So the thing that we've seen and out of the five things that I had mentioned that are decentralizing, the ones that have been easier to move across have been the ability to monetize and to build. But the data aspect has actually stayed pretty much central. Frankly. What has decentralized is that the contracts to block blockchain ledgers to those of decentralized. But the funny thing is often a big portion of these blockchain networks are on Amazon 63 to 70%, same thing with Stelara. So they're still using the web 2.0 architectures. However, we're also seeing other farms like IPFS, where the data could be to spread it across a wider range of folks. But right now we're still dependent on what we're to point out. So the vision and the problem with 3.0, when it comes to full de-centralization is not here by any means. I'd say we're at a web 2.2, five, >>Pre-web 3m, no actions there. What do you guys, how do you guys see the, um, the dangers? Cause there's a lot of negative press, but also is a lot of positive press. You seeing, you know, a lot of fraud, we've seen a lot of the crypto fraud over the past years. You've seen a lot of now positives, it's almost a self-governance thing and environment, the way the culture is, but what are the dangers? How do you guys educate people? What should people pay attention to? What should people look for to understand, you know, where to position themselves? >>Yes. So we've learned a lot from web one, we to the sharing economy and we are walking into two and three with eyes wide open. So people have rightfully put forth a number of challenges, the sustainability issues with excess using of computing and mining, the, um, the excessive amount of scams that are happening in part due to unknown identities. Um, also the architecture breaks down in certain periods and there's a lack of regulation. Um, this, this is something different though in the last, uh, uh, periods that we've gone through, we didn't really know what was gonna happen. And we walked in big, this is going to be great. The sharing economy, the gig economy, the social media is going to change the world. Hurrah is very different. Now people are a little bit jaded. So I think that's the big change. And so I think we're going to see that, uh, you know, soar it out and suss out just like we've seen with other prints. It's still very much in the early years, >>Right. I got to get your take on this whole, uh, should influencers and should people be anonymous or should they be doxed out there? You saw the board eight guys that did, that were kind of docs a little bit there and that went, went viral. Um, this is an issue, right? Because we, we just had a problem of fake news, uh, fake people, fake information, and now you have a much more secure environment. Immutability is a wonderful thing. It's, it's a feature, not a bug, right. So how is this all coming down? And I know you guys are in the middle of it with, uh, NFTs as, as authentication tickets. What's your take on this because this is a big issue. >>Look, I think first I am extremely optimistic about technology in general. Uh, so I'm super, super bullish about this. And yet, you know, I think that while crypto has so many upsides, it's important to be super conscious and aware of the downsides that come with it too. You know, if you think about every fortune 500 company, there is always training required by all employees on internet safety reporting of potential attacks. And so on in web three, we don't have that kind of standard reporting mechanisms yet, uh, for bad actors in that space. And so when you think about influencers in particular, they do have a responsibility to educate people about, uh, the potential, but also the dangers of the technology of web three, uh, of crypto basically, uh, whether you're talking about hacks online safety, the need for hardware impersonators on discord, uh, security, uh, storing your, your seed phrase. >>So every actor in France or ELs has got a role to play. I think that, uh, in that context, to your point, it's very hard to tell whether influencers should be, uh, anonymous, opposite inverse or footy dogs. The decentralized nature of web three will probably lead us to see a combination of those anonymity levels, um, so to speak, um, and the, uh, movements that we've seen around some influencers, identities becoming public are particularly interesting. I think there's probably a convergence of web two and web three at play here. You know, maybe a on the notion of 2.5 for, I think in way to all business founders and employees are known and they're held accountable for their public comments and actions. Um, if web three enables us to be anonymous, if dials have 14 control, you know, what happens if people make comments and there is no way to know who they are basically, uh, what if the dowel doesn't take appropriate action? I think eventually there will be an element of community self-regulation where influencers will be, uh, acting in the best interest of their reputation. And I believe that the communities will self regulate themselves and we'll create natural boundaries around what can be said or not. >>I think that's a really good point about, um, influencers and reputation because Jeremiah doesn't matter that you're anonymous. I have an icon that could be a NFT or a picture, but if I have an ongoing reputation, I have trust there's trust there. It's not like a, you know, just a bot that was created just to spam someone. It was just, you know what I'm saying? They getting into you getting into this new way. >>You're right. And that, that word you said, trust, that's what really, this is about. But we've seen that public docks people with their full identities have made mistakes. They have pulled the hood over people's faces in and really scammed them out of a lot of money. We've seen that in it that doesn't change anything in human behavior. So I think over time that we will see a new form of a reputation system emerged even for pseudonyms and perhaps for people that are just anonymous that only show their a potential, a wallet address, a series of numbers and letters. Um, that form might take a new form of a web 3.0 FICO score, and you can look at their behaviors. Did they transact? You know, how do they behave? Do they, were they involved in projects that were not healthy? And because all of that information is public on the chain and you can go back in time and see that we might see a new form of, of, of a scoring emerge. >>Of course, who controls that scoring that's a whole nother topic, gong on control and trust. So right now, John, we do see that there's a number of projects, new NFG projects, where the founders will claim and use this as a point of differentiation that they are fully docs. So you know who they are and their names. Secondly, we're seeing a number of, um, uh, products or platforms that require KYC, know your customer so that self-identification often with a government ID or a credit card in order to bridge out your, your coins and turn that into a Fiat. In some cases that's required in some of these marketplaces. So we're seeing a coalition here between, uh, full names and pseudonyms and being anonymous. >>That's awesome. And that, and I think this is the new, again, a whole new form of governance ran. You mentioned some comments about Dow. So I want to get your thoughts again, you know, Jeremiah, we become historians over the years. We're getting old, I'm a little bit older than you, but we've seen the movie war. You know, I remember breaking in the business when the computer standards bodies were built to be more organic, and then they became much more of a kind of an anti-innovation environment where people, the companies would get involved the standards organization just to slow things down and muck things up a little bit. Um, so you know, you look at Dallas like, Hmm, is a Dal, a good thing, or a bad thing that the answer is from people I talked to, is it depends. So I'd love to get your thoughts on getting momentum and becoming defacto with value, a value proposition. Vis-a-vis just adapt for the sake of having a doubt. This has been a conversation that's been kind of in the inside the baseball here, inside the ropes of the industry, but there's trade-offs, can you guys share your thoughts on when to do a Dow and when not to do a Dow and the benefits and trade-offs of that? >>Sure. Maybe I'll start off with a definition and then we'll go to rent. So a Dao, a decentralized autonomous organization, the best way to think about this. It's a digital cooperative and we've heard of worker cooperatives before the differences that they're using blockchain technologies in order to do the three things, identity governance, and rewards and mechanisms. They're relying on web 2.0 tools and technologies like discord and telegram and social networks to communicate. And there's a cooperative they're trying to come up with a common goal, um, Ren, but what's your take, that's the setup? >>So, you know, for me, when I started my journey into crypto and web tree, I had no idea about, you know, what that actually meant and, uh, an easy way for me to think of it and to grasp the nature of it was about the comparison between a dowel and perhaps a more traditional company structure. Um, you know, in a traditional company structure, you have a Yorkie, the company is led by a CEO and other executives, uh, that that was a flat structure. And it's very much led by a group of core contributors. So, uh, to Jeremiah's point, you know, you get that notion of a co-operative, uh, type of structure. The decision-making is very different. You know, we're talking about a hot, super high level of transparency proposals getting submitted and, and voting systems, using applications, as opposed to, you know, management, making decisions behind closed doors. >>I think that speaks to a totally new form of governance. And I think we have hardly, hardly scratched the surface. We have seen recently, uh, very interesting moments in web tree culture. And we have seen how that was suddenly have to make certain decisions and then come to moments of claiming responsibility, uh, in order to, uh, put his behavior, uh, of some of the members. I think that's important. I think it's going to redefine how we're thinking about that, particularly new governance models. And I think he's going to pave the way for a lot of super interesting structure in the near future. >>That's a great point, ran around the transparency for governance. So John, you posed the question, does this make things faster or slower? And right now most dowels are actually pretty slow because they're set up as a flat organization. So as a response to that, they're actually shifting to become representative democracies. Does that sound familiar where you can appoint a delegates and use tokens to vote for them? And they have a decision power, almost like a committee and they can function. And so we've seen actually there are some times our hierarchies, except the person at the top is voted by those that have the tokens. In some cases, the people at the top had the most tokens, but that's a whole nother topic. So we're seeing a wide variety of governance structures, >>You know, rent. I was talking with Matt G the founder of, and I was telling him about the domain name system. And one little trivia note that many people don't know about is that the U S government cause unit it was started by the U S the department of commerce kept that on tight leash because the international telecommunications union wanted to get their hands on it because of ccTLDs and other things. So at that time, because the innovation yet wasn't yet baked out. It was organically growing the governance, the rules of the road, keeping it very stable versus meddling with it. So there's certain technologies that require Jeremiah that let's keep an eye on as a community. Let's not formalize anything like the government did with the domain name system. Let's keep it tight. And then finally released it, I think multiple years after 2004, I think it went over to the, to the ITU, but this is a big point. I mean, if you get too structured, organic innovation, can't go, what you guys' reaction to that. >>So I think to take a stab at it, um, we have as a business, you know, thinking of unstoppable domains, a strong incentive to innovate, uh, and this is what is going to be determining longterm value growth for the organization for, uh, partners, for users, for customers. So, you know, that degree of formalization actually gives us a sense of purpose and a sense of action. And if you compare that to Dows, for instance, you can see how some of the upsides and downsides can pan out either way. It's not to say that there is a perfect solution. I think one of the advantages of the Dow is that you can let more people contribute. You can probably remove bias quite effectively, and you can have a high level of participation and involvement in decisions and all the upside in many ways. Um, you know, as a company, it's a slightly different setup. We have the opportunity to coordinate a very, uh, diverse and part-time workforce in a very, uh, you know, different way. Um, and we do not have to deal with the inefficiencies that might be, you never run to some form of extreme decentralization so that those are balanced from an organizational structure, uh, that comes, uh, either side >>Sharon. I want to get your thoughts on, on, on a trend that you've been involved in. We both been involved in, and you're seeing it now with the kind of social media world, the world of a role of an influencer it's kind of moved from what was open source and influencer was a connect to someone who shared graded content, um, enabled things to much more of a vanity that the photo on Instagram and having a large audience. Um, so is there a new influencer model with web three or is it, is it the, I control the audience I'm making money that way. Is there a shift in the influencer role or, or ideas that you see that should be in place for what is the role of an influencer? Because as web three comes, you're going to see that role become instrumental. We've seen it in open source projects, influences, you know, the people who write code or ship code. So what's your take on that because there's been a conversation with people who have been having the word influencer and redefining and reframing it. >>Sure. The influence model really hasn't changed that much, but the way that they're behaving has when it comes to at three, this market, I mean, there's a couple of things. Some of the influencers are in investors. And so when you see their name on a project or a new startup, that's an indicator, there's a higher level of success. You might want to pay more attention to it or not. Secondly, influencers themselves are launching their own NFC projects. Gary Vaynerchuk, a number of celebrities, Paris Hilton is involved and they are also doing this as well. Steve Aoki, a famous DJ launched his as well. So they're going head first and participating in building in this model. And there are communities are coming around them and they're building economies. Now the difference is it's not, I speak as an influencer to the fans. The difference is that the fans are now part of the community and they hold, they literally holding own some of the economic value, whether it's tokens or the NFTs. So it's a collaborative economy, if you will, where they're all benefiting together. And that's a, that's a big difference as well. Lastly, there's, there's one little tactic we're seeing where marketers are airdropping in FTS, branded NFTs influencers with wallet. So you can see it in there. So there's new tactics that are forming as well. Yes. >>Super exciting. Ren, what's your reaction to that? Because he just hit on a whole new way of, of how engagement's happening, how people are closed, looping their, their votes, their, their votes of confidence or votes with their wallet. Um, and some brands which are artists now, influencers. I mean, this is a whole game-changing instrumentation level. >>I think that's what we are seeing right now is super re invigorating as a marketeer who has been around for a few years, basically. Um, I think that the shift in the web brands are going to communicate and engage with our audiences is profound. It's probably as revolutionary and even more revolutionary than the movement for, uh, brands in getting into digital. And you have that sentiment of a gold rush right now with a lot of brands that are trying to understand NFTs and, and how to actually engage with those communities and those audiences, um, dominate levels in which brands and influencers are going to engage. There are many influencers that actually advanced the message and the mission because the explosion of content on web tree has been crazy. Part of that is due to the network effect nature of crypto, because as Jeremiah mentioned, people are incentivized to promote projects, holders of an NFTA, also incentivized to promote it. So you end up with a flywheel, which is pretty unique of people that are hyping the project, and that are educating other people about it and commenting on the ecosystem, uh, with IP rights, being given to NFT holders, you're going to see people pull a brand since then of the brands actually having to. And so the notion of brands, again, judging and delivering, you know, elements of the value to their fans is something that's super attractive, extremely interesting. And I think, again, we've hardly scratched the surface of all that is possible in that. >>It's interesting. You guys are bringing some great insight here, Jeremiah, the old days, the word authentic was a kind of a cliche and brands like tried to be authentic and they didn't really know what to do. They called it organic, right? And now you have the trust concept with aura authenticity and environment like web three, where you can actually measure it and monetize it and capture it if you're actually authentic and trustworthy. >>That's right. And because it's on blockchain, you can see how somebody is behave with their economic behavior. In the past, of course, big corporations. Aren't going to have that type of trail on blockchain just yet. But the individuals and executives who participate in this market might be, and we'll also see a new types of affinity. Do you executives, do they participate in these NFT communities? Do they purchase them? We're seeing numerous brands like Adidas to acquire, uh, you know, different MTV projects to participate. And of course the big brands are grabbing their domains. Of course, you can talk to rant about that because it's owning your own name as a part of this trust and being >>That's awesome. Great insight guys. Closing comments, takeaways for the audience here. Each of you take a minute to give, share your thoughts on what you think is happening now, where it goes. All right, where's it going to go, Jeremy, we'll start with you. >>Sure. Um, I think the vision of web three, where full decentralization happens, where the power is completely shifted to the edges. I don't think it's going to happen. I think we will reach web 2.5 and I've been through so many tech trends where we said that the power is going to shift completely to the end. It just doesn't, there's two reasons. One is the venture capital are the ones who tend to own the pro programs in the first place. And secondly, the, the startups themselves end up becoming the one percenters. We see Airbnb and Uber are one-percenters now. So that trend happens over and over and over. Now with that said, the world will be in a better place. We will have more transparency. We will see economic power shifted to the people, the participants. And so they will have more control over the internet that they are building. >>Right. And final, final comments, >>Um, fully aligned with Jeremiah on the notions of control, being returned to users, the notion of ownership and the notion of redistribution of the economic value that is created across all the different chains, uh, uh, that we are going to see. And, and all those ecosystems. I believe that we are going to witness to palliate movements of expansion, one that is going to be very lateral. When you think of crypto and web three, essentially you think of a few hundred tribes. Uh, and I think that more projects are going to appear more, uh, coalitions of individuals and entities, and those are going to exist around those projects. So you're going to see an increase in the number of tribes that one might join. And I also think that we're going to progress rapidly from the low hundred millions of people and an FTE holders into the billions perfectly. Uh, and that's going to be extremely interesting. I think that the next wave of crypto users and Ft fans are going to look very different from the early adopters that we had witnessed in the very early days. So it's not going to be your traditional model of technology, adoption curves. I think the demographics going to shift and the motivations are going to be different as well, which is going to be a wonderful time to educate and engage with new community members. >>All right, Ron, Jeremy, thank you both for that great insight, great segment, uh, breaking down web three or web 2.5 as Jeremiah says, but we're in a better place. This is a segment with the influencers as part of the cubes and the unstoppable domain showcase. Um, John for your hosts. Thanks for watching.

>> 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.

from the Hard Rock Hotel in Las Vegas it's the cube covering no joke on 2018 brought to you by osho everyone welcome back to our live coverage here in Las Vegas for Osho Khan's first industry security conference dedicated to security in the blockchain it's presented by ho show and also the industry it's an industry conference it's not necessarily a host show cause I'm John Ford's the cue for our coverage our next guest is Kenzie Crone and vice president of business development prime trust welcome to the cube thanks for joining us thanks for having me here so crowdsourcing and crowdfunding all this has been a big part of it I mean terrorists are funding through Bitcoin you've got all kinds of things going on in entrepreneurial spaces so it's clearly the money's flowing with with with crypto what do you guys do if we're getting into some of the things that we want to talk about what is prime trust to take a minute to explain your business business model value proposition absolutely so prime trust is a trust company so it's a regulated financial institution that holds funds between transactions between businesses you could also use prime trust to created a trust account for an individual as well so what our value is in this industry is that we hold crypto assets which very few qualified custodians like us exist to do that so that's a really important part of bringing in institutional funding because institutions are looking for qualified custodians as a regulated place to keep funds and they want to get into crypto so it's a it's a very important part of the puzzle so custody and custodial service has been a big topic here at O joke on controversial on the keynotes as well because you know the purists will say hey like Andreas why don't we need custody if it's working it's just it's the same old guard with new faces new business cards it's not really revolutionary and that's on one answer on the other inspection is there's so much growth in activity we've got a trusted partners to actually help us manage the risk and do these things so you have again two spectrums what's the story what should people understand about these two dynamics well what I think yeah what I think the key note you're talking about the the idea is we are just trading one type of banker for another type of banker right that's happening anyway so you are you're trading one type of financial system for another type of financial system the question is what does that look like and how can we be secure and safe in that space right personally I'm a big fan of anything that requires some kind of a license right and it's not because I think it's really fun to go through the bureaucratic process of getting a license or filling out paperwork but it's really because that once you have a license that license can be taken away from you if you misbehave right and that's really important so if you're following the laws that are set forth that are designed to protect people and then you break those laws then you're not you're not allowed to do that anymore right so that's what you get out of having regulation involved in this space is its protection and it's making sure that they're really by the way the regulation is happening anyway so that's another the regulation is happening anyway and that's why these very smart people who are managing billions of dollars are looking for that they're not saying oh cool you have a website that with technology that I don't understand you're telling me that you can safely hold something but there's no other protection there there's no liability you could just mount GOx me right and so there's got to be a way to get some sort of some sort of regulation in there and I know there's a lot of opinions in the space and obviously I'm very much on the side of regulation yeah and it also made some balance within the day those are polarized positions but I think the industry recognizes growth by recognizing the domicile problem of companies and governments so the question is you know really than a licenses legitimacy is people want legitimacy trust and growth yes at the same time but the other side says is hey you know who are those people making the laws so who's taking what away so again this is the ecosystem will solve these problems in my opinion and I believe that you know as much as I love the purist view and I think this architectural technical things that make that happen the end of the day is the self-governance of the community really is is what me happen here and so that's where the growth comes in because if real money is coming in to the sector you got to have parties that are trusted it's my opinion all right so what do you think about the conference here what's your take away so far I'll see its kind of diverse background you got you know people walking around with colorful costumes too you know buttoned up bankers and FBI agents and NSA agency folks yes we're in a really funny time in this space I think because you still have yet the Bitcoin garb and the like you know the flashing glasses and and then you've got people who spent 20 years on Wall Street and now they're in the space so I've seen that actually a lot lately in the last year at these conferences and it's very interesting I love when both sides can come in with an open mind to the other because you think there's something to be learned on both sides absolutely it's so for the people who have been in the traditional regulated space they are getting all this inspiration and the possibility of doing things differently the system that the financial system that we have now is one it's essentially you know a very old house that's just been added on to and built and there's corridors going into stairways that you know don't go anywhere right and that's that's something that needs to be fixed and and it is being fixed well Security's a driver in all this and I think one of the things I've observed you'd love to get your reaction to is you have the crypto world that's certainly changing a lot of in dynamics on the global scale you have a cyber security and then you have fin tech so you guys this is where everything I think is a melting pot which is interesting you have all these things happening but at the center of all this is security absolutely it's almost like we're all swimming out to the to the raft and whoever gets there first and wins a security model wins at all well I thought I think well I think this the conversations all threads through security so the cyber conversations we've had are like okay Cyrus security for individuals and nation-states crypto currency for protection and freedom and and you know in immutability Ledger's almost great supply-chain aspects and then you get the FinTech which is like hey people want to do business so you have the entire changeover on the financial services side all kind of happening yeah yeah I think that they're all gonna be contributing to a solution it's it's each one is going to learn we're really open-minded at prime trust we want to build and grow we know that this we're in the most embryonic stage of this and so we don't know exactly what's gonna come next or what's going to be down the road and we want to be informed by everybody that's around us at a place that makes sense do you have to work with with the industries so take me through I want to ask you a question about your job so we'll take me through the day in the life of what's going on in prime chess what are some of the things that you guys do customers and what are they asking for what's like what's the some of the issues you guys are solving what did some of the dynamics can you share some color around that sure so our main services are so we are a trust company so we do escrow services and we do compliance on all of the escrow that comes through our ICS and stos that come through so that's a ml and kyc that's really important what distinguishes us I think is a real a real game changer for our customers is that we're really a technology company and we have API stocks that allow for companies to build their businesses on top of integration so that they have customers coming in and making accounts on their their their website their dashboard their platform and that's all feeding directly and they're actually making an account so you're building your you're targeting folks saying hey we'll take care of the heavy lifting on kyc ma ml and all the stuff that needs to happens that's heavy lifting that's around DoDEA services custodial service all comes through you yes so it comes in we can hold it we can review it you're not having asset managers also holding funds which is a problem so you're not needing to touch the funds at all you can just you can just do you at you're trying to do in this space and we'll take care of that aspect that's entrepreneurial side that's the stos and the IC knows what's the alternative for the your customer build their own go with unknown shop of their other so what so if I if it's a great service sounds like a great service and takes a lot of pressure off the build out of a opportunity what's the alternative if someone doesn't go with you well there's a few I mean it's to hold your own funds right figure that out on your own in the case of many different types of funds and businesses their boards are not okay with that because it's it's too much risk and liability so in many cases the alternative is don't do it yet just keep watching and waiting and wanting to be in crypto but you can't yet so and when we're seeing that a lot that there's like a sigh of relief when we finally have this conversation and it turns out it's extremely easy to make an account with us and suddenly that major roadblock is just gone so that's what that's the career opportunity takes the risk off the table little bit and accelerates the opportunity when the sec bomb decrypt yesterday was reporting that the sec in the united states is actually going into IC OS and having them return their money because of of course they are like well of course they are that makes sense that's they were always going to do that just because they make a statement and slowly decide how to act because look last july is when they said we're going to do this and most of the crypto community said you can't because we really don't want you to and we are gonna tell ourselves all these excuses for why it's not possible for the US government to actually pursue this and why they won't really do it because they're dinosaurs and that's just not how the government works so the way the government does work is that they everything takes a long time and it's all thought through and there are a million different approval processes within the system and they don't tell you anything until they're really ready to stand by whatever same and they make so they leave you in the dark for eight months a year whatever well you guys have a good opportunity so I had to ask the question what's the business model how does someone engage with you guys sounds likely to go in and create an account is there a fee involved what's the fee can you share the engagement that somewhere would would engage with you young sure so they can visit our website which is prime trust com they can email me at Kinsey at prime trust pretty easy and we have different pricing for escort services versus custodial services and we actually pay interest on any Fiat that we held in custody and we charge a monthly basis point fee based on how much is in in custody with us and where's you guys located was the company located headquarters this here in Nevada in Las Vegas I'm based out of Los Angeles we've got some team members in San Francisco in New York as well that's awesome so it's a question how did you get into the space what's your story I got into the space I started out an equity crowdfunding so I was working with companies that were raising capital under A+ reg D and reg CF and I was in the trenches with them figuring out from like the very earliest days how what the laws were gonna look like you know launching companies the day the regulations came out barking into effect and then sort of working through that so it's been an adventure on that side and then my first experience in crypto was at an at a meet up in Santa Monica where companies were talking about raising 40 million dollars in ten seconds and that and they were also pitching in methods like I knew were not legal so it was it's kind of just dropping to me well one was how did you manage to get that many people to want to invest in you so quickly because it's a struggle for for many companies and then so that's amazing I want to learn more about that and then also did you know that there's a more legal way to do this and that you're putting yourself at a lot of risk so that made me really want to jump in and figure this out so you got totally intoxicated by the Wild West yeah there's a problem they gotta be solved in there it's kind of fun at the same time because you know all those those days are over thankfully so because you know it should be it should be more legitimize and it is getting there I think security tokens are a good sign that people are moving border security tokens at least in the u.s. the legal firms the service providers are starting to get hold up on some of the new things and that's good still expensive to run the run the process it's like own public almost as a start-up it's almost ridiculous and I kinda had the same view we're the gaps in your opinion so you now look at the crowdfunding which has been great you see all that stuff happening as essentially as a decentralized you know efficiency around disrupting venture capital and other fundraising which is great where are the gaps in your mind from a service provider standpoint from an ecosystem where's the to-do items what needs to get done faster where are the gaps I think everybody's building out their technology to make everything easier currently there's a lot that's done manually or just to manually and needs to be more automated and then I think there's also a lot of education on both sides that needs to be done that's that's I think a huge gap there's a tendency to create echo chambers and so you end up talking with people who just won't even consider the other side of it with the possibility for change in whichever area they're in and that is I think we are gonna see that come together but that tends to hold people back because you thanks for coming on and sharing your insights great to have you on the cube and good luck with prime trust thank you okay this is a cube live coverage here at hosts show con I'm John furrow your stay with us more live coverage after the short break

(Upbeat music) >> From the Hard Rock hotel in Las Vegas, its theCUBE! Covering the Hosho Con 2018, brought to you by Hosho. >> Okay, welcome back every one, this is theCUBE's exclusive coverage here live in Las Vegas for Hosho Con, the first inaugural event where security and block chain conferences is happening, it's the first of its kind where practitioners and experts get together to talk about the future, and solve some of the problems in massive growth coming they got a lot of them. Its good new and bad news but I guess the most important thing is security again, the first time ever security conference has been dedicated to all the top shelf conversations that need to be had and the news here are covering. Our next guest Greg Pinn who's the head of strategy and products for iComply Investor Services. Great to have you thanks for joining us. >> Very nice to be here >> So, we were just talking before we came on camera about you know all the kind of new things that are emerging with compliance and all these kind of in between your toes details and nuances and trip wires that have been solved in the traditional commercial world, that have gotten quite boring if you will, boring's good, boring means it works. It's a system. But the new model with Block Chain and Token Economics is, whole new models. >> Yeah I think what's so exciting about this is that in the Fiat world, from the traditional financial market, everyone is so entrenched in what they've been doing for 20, 30, 40 years. And the costs are enormous. And Block Chain, Crypto coming in now is like we don't have to do it that way. We have to do compliance. Compliance matters, it's important and it's your legal obligation. But you don't have to do it in the same sort of very expensive, very human way that people have been doing it in the past. >> And Cloud Computing, DevOps model of software proved that automations a wonderful thing >> Right >> So now you have automation and you have potentially AI opportunities to automate things. >> And what we've seen is huge increases in technology, in around machine learning and clustering of data, to eliminate a lot of the human process of doing AML, KYC verification, and that's driving down costs significantly. We can take advantage of that in the Crypto Space because we don't have thousands of people and millions of millions of dollars of infrastructure that we've built up, we're starting fresh, we can learn from the past and throw away all the stuff that doesn't work, or isn't needed anymore. >> Alright let's talk about the emerging state of regulation in the Block Chain community and industry. Where are we? What's the current state of the union? If you had to describe the progress bar you know with zero meaning negative to ten being it's working, where are we? What is the state of >> I think if you'd asked me a year ago I think negative would've been the answer. A year ago there was still a big fight in Crypto about do we even want to be part of Compliance, we don't want to have any involvement in that. Because it was still that sort of, Crypto goes beyond global borders, it goes beyond any of that. What's happened now is people have realized, it doesn't matter if you're dealing in Crypto Currency or traditional currency, or donkeys or mules or computers or whatever, if you're trading goods for value, that falls under Regulatory Landscape and that's what we're hearing from the SCC, from FinCEN, from all the regulators. It's not the form it's the function. So if you've got a security token, that's a security, whether you want it to be or not. You can call it whatever you want, but you're still going to be regulated just like a security. >> And I think most entrepreneurs welcome clarity. People want clarity, they don't want to have to be zigging when they should be zagging. And this is where we see domicile problem. Today it's Malta, tomorrow it's Bermuda. Where is it? I mean no one knows it's a moving train, the big countries have to get this right. >> A hundred percent. And beyond that what we're seeing, what's very, very frustrating for a market as global as this is it's not just country-level jurisdiction, the US you've got State-level jurisdiction as well. Makes it very, very hard when you're running a global business if you're an exchange, if you're any sort of global, with a global client reach. Managing that regulation is very, very difficult. >> You know I interviewed Grant Fondo who's with Goodwin Law Firm, Goodwin Proctor they call it Goodwin now, he's a regulatory guy, and they've been very on the right side of this whole SCC thing in the US. But it points to the issue at hand which is there's a set of people in the communities, that are there to be service providers. Law Firms, Tax, Accounting, Compliance. Then you got technology regulation. Not just financial you have GDPR, it's a nightmare! So okay, do we even need GDPR with Block Chain? So again you have this framework of this growth of internet society, now overlaid to a technical shift. That's going to impact not only technology standards and regulations but the business side of it where you have these needed service providers. Which is automated? Which isn't automated? What's your take on all of this? >> I agree with you a hundred percent, and I think what's helpful is to take a step back and realize while compliance is expensive and a pain and a distraction for a lot of businesses. The end of the day it saves people's lives. And this is what, just like if someone was shooting a gun as you were running down the street, in your house, you're going to call the police, that is what financial institutions are doing to save these industries and individuals that are impacted by this. A lot of it from a Crypto Currency perspective, we have a responsibility because so much of what the average person perception is, is Ross Ulbricht and Silk Road. And we have to dig our way out of that sort of mentality of Crypto being used for negative things. And so that makes it even more important that we are ultra, ultra compliant and what's great about this is there's a lot great opportunities for new vendors to come into the space and harness what existed whether that's harnessing data, different data channels, different IDDent verification channels and creating integrated solutions that enable businesses to just pull this in as a service. It shouldn't be your business, if you're in exchange, compliance is something you have to do. It should not become your business. >> Yeah I totally agree, and it becomes table stakes not a differentiator. >> Exactly >> That's the big thing I learned this week it's people saying security's a differentiator, compliance is a, nah, nah, I have standards. Alright so I got to ask you about the, you know I always had been on the biased side of entrepreneurship which is when you hear regulations and you go whoa, that's going to really stunt the growth of organic innovation. >> Right. But in this case the regulatory peace has been a driver for innovation. Can you share some opinions and commentary on that because I think there's a big disconnect. And I used to be the one saying regulation sucks, let the entrepreneurs do their thing. But now more than ever there's a dynamic, can you just share your thoughts on this? >> Yeah, I mean regulators are not here to drive innovation. That's not what their job is. What's been so interesting about this is that because of regulations coming to Crypto along with these other things, it's allowing businesses to solve the problem of compliance in very exciting, interesting ways. And it's driving a lot of technologies around machine learning, what people like IBM Watson are doing around machine learning is becoming very, very powerful in compliance to reduce that cost. The cost is enormous. An average financial institution is spending 15 percent. Upwards of 15 percent of their revenue per year on compliance. So anything they can do to reduce that is huge. >> Huge numbers >> And we don't want Crypto to get to that point. >> Yeah and I would also love to get the percentage of how much fraud is being eaten into the equation too. I'm sure there's a big number there. Okay so on the compliance side, what are the hard problems that the industry is solving, trying to solve? Could you stack rank the >> I think number one: complexity. Complexity is the biggest. Because you're talking about verifying against sanctions, verifying against politically exposed persons, law enforcement lists, different geographical distributions, doing address verification, Block Chain forensics. The list just stacks and stacks and stacks on the complexity >> It's a huge list. >> It's a huge list >> And it's not easy either. These are hard problems. >> Right, these are very, very difficult problems and there's no one expert for all of these things. And so it's a matter of bringing those things together, and figuring out how can you combine the different levels of expertise into a single platform? And that's where we're going. We're going to that point where it's a single shop, you want to release an ICO? You're an exchange and you need to do compliance? All of that should be able to be handled as a single interface where it takes it off of your hands. The liability is still with the issuer. It's still with the exchange, they can't step away from their regulatory liability, but there's a lot that they can do to ease that burden. And to also just ignore and down-risk people that just don't matter. So many people are in Crypto, not the people here, but there's so many people in Crypto, you buy one tenth of a Bitcoin, you buy a couple of Ether, and you're like okay that was fine. Do we really need to focus our time on those people? Probably not. And a lot of the >> There's a lot big money moving from big players acting in concert. >> And that's where we need to be focused. Is the big money, we need to be focused on where terrorists are acting within Block Chain. That's not to say that Block Chain and Crypto is a terrorist vehicle. But we can't ignore the reality. >> And I think the other thing too is also the adversary side of it is interesting because if you look at what's happening with all these hacks, you're talking about billions of dollars in the hands now of these groups that are highly funded, highly coordinated, funded basically underbelly companies. They get their hands on a quantum computer, I was just talking to another guy earlier today he's like if you don't have a sixteen character password, you're toast. And now it's twenty four so, at what point do they have the resources as the fly wheel of profit rolls in on the hacks. >> You know, one of the interesting things we talk about a lot is we have to rely on the larger community. We can't, I can't, you can't solve all of the problems. Quantum computing's a great example. That's where we look for things like two-factor authentication and other technologies that are coming out to solve those problems. And we need to, as a community, acknowledge That these are real problems and we've identified potential solutions. Whether that's in academia, whether it's in something like a foundation like the Ethereum Foundation, or in the private sector. And it's a combination of those things that are really driving a lot of it's innovation. >> Alright so what's the agenda for the industry if you had to have a list this long, how do you see this playing out tactically over the next twelve months or so as people start to get clarity. Certainly SCC is really being proactive not trying to step on everybody at the same time put some guard rails down and bumpers to let people kind of bounce around within some frame work. >> I think the SCC has taken a very cautious approach. We've seen cease and desist letters, we've seen notifications we haven't seen enormous finds like we see in Fiat. Look at HSBC, look at Deutsche Bank, billions of dollars in fines from the SCC. We're not seeing that I think the SCC understands that we're all sort of moving together. At the same time their responsibility is to protect the investor. And to make sure that people aren't being >> Duped. >> Duped. I was trying to find an appropriate term. >> Suckered >> Suckered, duped. And we've seen that a lot in ICOs but we're not seeing it, the headlines are so often wrong. You see this is an ICO scam. Often it's not a scam, it's just the project failed. Like lots of businesses fail. That doesn't mean it's a scam, it means it was a business fail. >> Well if institutional investors have the maturity to handle they can deal with failures, but not the average individual investor. >> Right, which is why in the US we have the credit investor, where you have to be wealthy enough to be able to sustain the loss. They don't have that anywhere else. So globally the SCC care and the other financial intelligence units globally are monitoring this so we make that we're protecting the investor. To get back to your question, where do I see this going? I think we're going to need to fast track our way towards a more compliant regime. And this I see as being a step-wise approach. Starting with sanctions making sure everyone is screened against the sanction list. Then we're going to start getting more into politically exposed persons, more adverse media, more enhanced due diligence. Where we really have that suite of products and identify the risk based on the type of business and the type of relationship. And that's where we need to get fast. And I don't think the SCC is going to say yeah be there by 2024, it's going to be be there by next year. I was talking to Hartej, he was one of the co founders of Hosho and we were talking on TheCUBE about self-regulation and some self-policing. I think this was self-governed, certainly in the short term. And we were talking about the hallway conversations and this is one of the things that he's been hearing. So the question for you Greg is: What hallway conversations have you overheard, that you kind of wanted to jump into or you found interesting. And what hallway conversations that you've been involved in here. >> I think the most interesting, I mentioned this on a panel and got into a great conversation afterwards, about the importance of the Crypto community reaching out to the traditional financial services community. Because it's almost like looking across the aisle, and saying look we're trying to solve real business problems, we're trying to create great innovative things, you don't have to be scared. And I was speaking at a traditional financial conference last week and there it was all people like this Crypto is scary and it's I don't understand it. >> You see Warren Buffett and Bill Gates poopooing it and freak out. >> But we have an obligation then, we can't wait for them to realize what needs to be done. We need to go to them and say, look we're not scary, look let's sit down. If you can get a seat at a table with a head of compliance at a top tier bank, sit down with them and say let me explain what my Crypto ATM is doing and why it's not a vehicle for money laundering, and how it can be used safely. Those sorts of things are so critical and as a community for us to reach across the aisle, and bring those people over. >> Yeah bridge the cultures. >> Exactly. Because it's night and day cultures but I think there's a lot more in common. >> And both need each other. >> Exactly. >> Alright so great job, thanks for coming on and sharing your insights. >> Thank you so much. >> If you have a quick plug on what you're working on, give the plug for the company. >> Sure, so iComply Investor Services is here to help people who want to issue ICOs, do that in a very compliant way. Because you shouldn't have to worry about all of your compliance and KYC and Block Chain Forensics and all that, you should be worried about raising money for your company and building a product. >> Alright final question since I got you here 'cause this is on my mind. Security token, has got traction, people like it 'cause no problem being security. What are they putting against that these days, what trend are you seeing in the security token? Are they doing equity? I'm hearing from hedge funds and other investors they'll want a little bit of equity preferred and or common, plus the token. Or should the token be equity conversion? What is some of the strings you're seeing? >> You know I think it' really just a matter of do you want paper or do you want a token? Just like a stock certificate is worth nothing without the legal framework behind it. A security token is the same way. So we're seeing where some people are wanting to do equity, where some of their investors want the traditional certificate. And some are fine with the token. We're seeing people do hybrid tokens where it morphs from security to utility or back. Where they're doing very creative things. It's what's so great about the Ethereum Network and the Smart Contracts, is there are all of these great options. The hard part then is, how do you fit those options into regular framework. >> And defending that against being a security, and this is interesting because if it converts to a utility, isn't that what security is? >> So that's the question. >> Then an IPO is an, again this is new territory. >> Right, and very exciting territory. It's an exciting time to be involved in this industry. >> In fact I just had an AE3B Election on tokens, first time ever. >> Yeah it's an amazing state that we're in. Where serious investors are saying yeah token's great for me. Give me the RC20 I'll stick it in my MetaMask Wallet, it's unbelievable where we are. And only more exciting things to come. >> Greg Pinn, thanks for coming on and sharing your insights. TheCUBE covers live here in Las Vegas, Hoshocon, the first security conference in the industry of its kind where everyone's getting together talking about security. Not a big ICO thing, in fact it's all technical, all business all people shaping the industry, it's a community it's TheCUBE coverage here in Las Vegas. Stay with us for more after this short break. (Upbeat 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)

(techy music) >> Live from Toronto, Canada, it's theCUBE covering Blockchain Futurist Conference 2018, brought to you by theCUBE. (techy music) >> Well, welcome back to theCUBE, we're live here in Toronto for the Untraceable Blockchain Futurist Conference for two days of wall-to-wall coverage. I'm John Furrier, my co-host Dave Vellante, who had to take a step away and our next guest is David Johnston, who's the chairman of the board at Factom, industry legend, he's done a lot of great work from startups, he funds it in early days, really was involved in the original decentralized application framework and part of that community. Great to have you on theCUBE, thanks for spending the time with us. >> It's good to be here. >> So, first of all we are believers, theCUBE, our team, we're pretty biased. We think that decentralized applications is going to be the next really renaissance in software and startups because it's not your grandfather's venture capital or app SAS model, there's a real change going on. Capital formation, entrepreneurial activity-- >> Yep. >> So, congratulations for putting that together. What's going on, what's the status of this? I mean, obviously put all the price crashes on the side, there's real building going on. >> Well, it's really actually an exciting time. A lot of of good projects have started the last few years and I think what we're going to see is those projects come to fruition later this year, early next. I think about what's happening with groups like PolyMath and what they're doing on tokenizing securities. It really started that wave last year, and now we've got Bank to the Future, and what's going on in Malta with the legislation. A lot of jurisdictions are looking to basically embrace that model of okay, if you have a company, now we can turn that equity into a record on the blockchain and really give people global ledger where we can then trade it on multiple exchanges. It gets you global access, global liquidity, and all of these advantages, so I see a stampede of projects headed towards that model, but thinking about decentralized applications, what I want to preserve is still the permission-less nature of this ecosystem. I mean, I wasn't a rich investor when I got into bitcoin in 2012, all right. I was lucky to be an economics nerd and already wanted to get rid of my Fiat and opt into non-government currency, and so, you know, the timing was great for me but there weren't any barriers. I could download a node-- >> Yeah. >> I could access the ecosystem, I could jump right in and get involved, and so as we see the ecosystem mature what I hope we see is preserving that permission-less nature and recently I proposed Smartdrops as a means of distributing tokens and utilities or currencies-- >> Yeah. >> As a way of bootstrapping the network. So, that's what I really see coming next. >> Love the Smartdrop concept because you know, with Smart contracts and Airdrops kind of being wishy-washy, you know what goes on there, I think one of the things I want to get your thoughts on, because we were at the cloud blockchain event yesterday. Cloud computing and cloud-native chain, SAS applications, you start to see operators now be involved in cloud as that matures, what decentralized applications bring kind of changes the game a bit. How do you see software development changing, because what cloud did was create devops culture, it certainly leverages opensource. >> Right. >> And there's a big community around that. Now with decentralized application you've got community as an active part of it, so is opensource, how is it going to change the software development frameworks? >> Well, I think you can cut out a lot of the middle steps and go directly to developers that you want to work with. I mean, I think Ethereum really still set the gold standard when they set aside a chunk of ether for developers that contributed code to their GitHub before launch, and people will forget now it was a heavy lift to get Ethereum launched. It took a good year and a half, two years, to go from a whitepaper to production net deployments and in that time they needed to align people, the smartest people in the world to try to build that platform, and so I think people can still draw from that lesson and say, "Okay, I'm going to enroll developers directly, "I'm going to reward the people that download "the alpha, download the beta," right. Bootstrap this community to my first 1,000, first 10,000 users. I think PolyMath did that really well recently with their Airdrop where they got 50,000 people into a telegram channel and fill out a survey and do the KYC because they didn't make it a rounding error, they made it a meaningful Airdrop of hundreds of dollars worth of Poly at the time, and that really motivated people to get involved, so-- >> Yeah, and I like the slogan, "Let the stampede begin." (laughs) Actually, we covered PolyMath at their PolyCon event-- >> Sure. >> That Tracy and Untraceable did, and this is, again, the new dynamic. So, I want to get your thoughts on economics, right. So, you've got crypto, which is token economics, which is a business concept when you think about a new way. Blockchain's certainly becoming an infrastructure. >> Right. >> Token economics is changing the business landscape, so you saw it as an economics nerd and now people are realizing, "Holy shit, "I can actually do things with it differently. "I can change the equation"-- >> Right. >> "And still get the outcomes I want "faster, cheaper, smarter, of something "that's not efficient," this is a new dynamic. How do you see the token economics evolving, you know, aside all the liquidity nonsense we're seeing in the market, certainly fluctuations are happening. >> Sure. >> But from a build-out standpoint, from a business model innovation, where is the action on token economics? >> Well, I loved when the Vitala coined the term token economics, and you know, crypto-economics, and basically what he was describing is we're using math to screw the past and we're aligning people's economic incentives to secure the future. So, that idea that we can rely on encryption to give us a stable, immutable, transparent ledger is really powerful because it takes away, in a cloud context, the need to create a bunch of infrastructure. Right, before the cloud people had their own servers. >> Yeah, provision them. >> Dot com days, right, they spent millions of dollars provisioning their own hardware-- >> Before they could roll out their app. >> Right, and so we take it for granted today. >> Yeah. >> You can jump on AWS or Rockspace-- >> Yeah. >> And get going in a few minutes. So, I think blockchain is going to do something similar for all the features of Smart contracts, financial integrations around transfer of money, all of these things are now a toolkit that as soon as I hook into Ethereum or Bitcoin Cash or one of these protocols I have this large, established infrastructure, thousands of people running nodes that I don't have to pay for-- >> Yeah. >> As a user, and that's amazing for innovation because it just lowers the barrier-- >> Yeah. >> For the average guy to get involved. >> And accelerates time to value big time. >> Yeah. >> All right, so what was your talk here at the show, what were you speaking about, you had a discussion, what was the speech about? >> Really focused on this idea of Smartdrops because I think, you know, this can be a primer-- >> Explain Smartdrops real quick. >> Sure, sure, so most people are probably familiar with Airdrops. >> Yep. >> Been around for years, hey, you want to give 100,000 users of bitcoin some of your new token. We're going to send it out to all their addresses. It's sort of like a spray and pray strategy, very broad, right? >> Yeah. >> And so what I think we need to move to now that we have 50 million people with cryptowallets is we can much more intelligently target who we're dropping to, hence Smartdrop. Right, really focus in on the people that the app needs. If you're at the development stage you want to develop, you want to Airdrop to 1,000 Ethereum developers-- >> Yeah. >> To test out your app, if you're going into your alpha you need those early adopters to try it out, give you feedback. So, it's a thing that I think we could leverage but people have treated it as sort of an afterthought. Right, oh, I'll take one percent of my tokens and do one of these Airdrops. I think we could actually be distributing 20%, 40%, 60% of tokens via Smartdrops if you're properly targeting them and traunching it out based on the maturity of the projects. >> Yeah, and I think Smart contracts, Smartdrops really add value because it brings intelligence-- >> Right. >> To and targeting and more value you can distribute. It's like policy-based distribution. >> Right. >> All right, final question for you, state of the union, obviously people seeing these fluctuations, Ethereum lost its one-year value, it's back down to where it was a year ago. Largest developer community, people get nervous when you have these short term fluctuations that really aren't based on anything from a build-out standpoint. >> Sure. >> It's really more of market dynamics, Asia, wherever, whatever-- >> Right. >> But this real build is in the developer community going on that are building long term, trying to build long term ventures. >> Right. >> What do you say to that community at Ethereum and others, stay the course, don't waver, don't check the price, head down, grind it, what do you say? >> What I say is think long term. We've been through this like four times already. I remember when bitcoin went from almost nothing to $30 and crashed to $2, right, and it took almost a year-- >> Yeah. >> To recover, 2012, get back to 10 bucks, and then it made it's big run 2013 to $250, and proceeded to crash to $50. >> Yeah. >> Right, and then make a big run thereafter to the thousands-- >> Yeah. >> And crash to $200, and here we've made enormous runs and $19,000, you know, on the bitcoin price and it's crashed to $6,000 or $5,000, whatever it is today, and so you got to keep in mind the long term perspective. We have come so far. >> (laughs) Yeah. >> Like when I got into bitcoin in 2012 it was $10 a bitcoin, there were 10 million bitcoins in circulation, meaning $100 million was the entire digital currency universe, and now today there are hundreds of billions of dollars-- >> Yeah. >> Of assets in this space, and it's only been five or six years. Like it's orders of magnitude, so I keep my eye on usage, on real utility. You look at Ethereum, I mean, they're doing seven, eight, 900,000 transactions a day. People are using-- >> Yeah. >> The platform and I think at this point they've got more usage than all of their blockchains combined. >> Yeah. >> And so, you know, that's really exciting and I think keep your head down, keep building, these are the times when sort of like the fluff falls away-- >> Yep. >> And the projects that didn't make sense, all that gets flushed out of the ecosystem and the real projects come to the forefront. >> Well, David you're having a great career so far. Congratulations on getting in early when it was 10 bucks, and we had our first website developer was so good but he wanted to be paid in bitcoin in 2011, it was 22 cents-- >> Wow. >> At the time, I remember buying it, it was like, "What's bitcoin, what is this craziness?" (laughs) We started covering it then, just started doing videos, so we're going to do more interviews. We'll hopefully get you on again. Real quick, final plug for you, what are you working on right now? Share with the community some of the projects and your interests right now and what's going on. >> Well, Factom is a big focus for me because this solves data on the blockchain and lets you do recordkeeping, documentation, all that sort of stuff, and so that's really hit a chord with enterprise, so we need to get the mainstream into the ecosystem and that's really what Factom is focused on. >> Yeah. >> So, really excited, they've delivered their third version of their software, which is now fully decentralized recently. >> Yeah. >> It's a huge milestone for them. >> So, harden it, make it reliable, stable, and make it easy to consume and use. >> That's right, that's the key. >> That's the goal. >> And let people put millions, billions, or trillions of records on, and what Factom does with Merkle trees, basically you only need one transaction every 10 minutes to anchor all of that data. So, what we've created is scalability, and that's what we need for this to go mainstream. >> All right, David Johnston, chairman of the board at Factom here on theCUBE, industry insider, pioneer, also leader, inspiration. theCUBE bringing you all the live action, all the data here not yet on the blockchain, soon to be. I'm John Furrier, live coverage here in Untraceable's event Futurist event here in Toronto, be back with more. Stay with us, be right back with more content after this short break. (techy music)

>> Live, from Toronto, Canada, it's theCUBE! Covering Global Cloud and Blockchain Summit 2018, brought to you by theCUBE. >> So, welcome to the Global Cloud and Blockchain Summit. I'm about to hand you over to John Furrier, who is the Co-Founder and Co-CEO of SiliconANGLE Media and Executive Editor at theCUBE, he's about to do a Fireside Chat with Al and Mathew, I'll let him introduce you to them as well. He's also involved in a major blockchain project himself, so he's going to get into that with those guys as well. So, and tomorrow we start at nine, in the meantime, enjoy the evening, enjoy the food, enjoy the chat, and I'll let you go. >> Okay. Hello? Thank you Ruth, appreciate it, thanks everyone for being part of this panel, Fireside Chat, want to make it loose, but high impact for you guys, I know, having some cocktails, having a good time. If there's any questions during, then at the end we'll pass the mic around, but. We want to have a conversation, kind of like we always do down in the lobby bar, just talking about crypto and cloud, and we ended up talking about cloud computing and crypto a lot because those are two areas that are kind of converging, and the purpose of this event. So we really wanted to share some thoughts around those two massively growing markets, one is already growing, it's continuing to be great: the cloud, and blockchain certainly is changing everything. These two important topics, we want to flesh them out, Al Burgio is the Serial Entrepreneur/Founder of DigitalBits, he's founded companies both in cloud and blockchain, so he brings a great perspective. And Matt Roszak, leading crypto investor, entrepreneur and advocate, well known in the crypto space for goin' way back, I think you gave a couple bitcoins to some very famous people early on, we'll get into that a little bit later. So guys, thanks for being part of the panel and Fireside. First question is: we know how big the money is, I mean the money is crypto is is flowin' around the world, and cloud computing we've seen specifically, and certainly in coverage now with Amazon's success, Amazon Web Services, and Microsoft and others. Trillions of dollars being disrupted in the traditional kind of the enterprise, data center area, and blockchain is doing that too, so we want to get into that. But first, before we get into it, I want you guys to take a minute to explain for the folks, just to set the context, the kinds of projects you're working on. Now Al, you have DigitalBits, Matt you're investing and you're finding a lot of interesting token dynamics. So just take a minute. Al, start. >> (mic off) So-- Everybody hear me okay? Alright, perfect. Well thanks for that lovely intro. Yes, my name is Al Burgio, I'm, I've founded a few companies, as John mentioned. Before the cloud there was internet, (light laugh) and so it started for me in the late '90s in the e-commerce era. But more recently I pioneered what's known as Interconnection 2.0, and I did that with the company called Console, for those that may know PCCW, recently it was acquired by PCCW. And with that we disrupted the way networks at the core of the internet were connected together More recently I've founded the DigitalBits project, and now DigitalBits blockchain network, and with that, you can kind of think of that as the trading and transaction layer for the points economy and other digital assets, and you can do a lot of really interesting thing with that, it's really about bringing blockchain to the masses. >> Matt, what're you workin' on? >> So, Matthew Roszak, Co-Founder and Chairman of Bloq. Bloq is a enterprise software company, we do two things, the premise is the tokenization of things, so we think the money identity, new layers of the internet are going to be tokenized. And so, we go to market in two ways, one is through Bloq Enterprise, and these are all the software layers you need to to connect to tokenized networks, so think a wallet, a node, a router, etc. And then Bloq Labs we build, and partner with, some of the leading tokenize networks and applications, so we build a connective tissue and then we actually build these new networks. I started this space as an investor over five/six years ago, investing in some of the best entrepreneurs and technologists in the space build a great network. But I love building companies, and so my Co-Founder and I, Jeff Garzik, built Bloq two and a half years ago. And then lastly, also serve of Chairman of the Chamber of Digital Commerce, so, so if you believe in these new tokenized money layers, identity layers, etc, regulation comes into play. Certainly today from an institutional adoption level, and so if you care about this space, you need to spend time to kind of help that dialogue improve; this technology moves way faster than folks in DC and elsewhere, so. >> And the project that we're workin' on at SiliconANGLE, is we've tokenized our media platform, and we're opening it up to a token model, and have kind of changed the game. So all three of us have projects, want to put those in context, we build everything on Amazon Web Services, so, the view of the cloud, we also cover it. The cloud computing market is booming, we see that Amazon Web Services numbers empower the earnings for Amazon's company, obviously Apple's trillion dollar evaluation those are clear case studies; but blockchain could potentially disrupt it all, and Al, I want to get your thoughts, because even today in the news at Microsoft Azure, which is their big cloud provider, announced blockchain as a service. And folks that are in either the data center business or in cloud know the shift that's happening in the IT world, but no ones really connected the dots on where blockchain intersects, and also, is it an opportunity for the cloud guys, what's the landscape look like, so. What's your thoughts on that, how are they connected, what does it mean, how does a cloud company maintain their relevance and competitiveness with blockchain? >> Well, just pointing on the fact that, you know, today we had that new Microsoft, the Azure cloud, their support and evangelism for blockchain. You know, a company, I think it's very important that this isn't an ICO, two kids in a garage saying their doing something blockchain this is a massive, multi-billion dollar company; and making a decision like that is not trivial, it's many, many departments, a lot of resources, before such a thing's announced. So, that's, not only is it validation, but it's a leading indicator as to this trend, that this is clearly something that's important. And a lot of people, if you're not paying attention, you need to be paying attention, including if you're in the cloud industry, 'cause many companies obviously do compete with, with Microsoft and AWS, so. It may be still early, but it's not that early, in light of the news that we saw today. With that, I would say that, a lot of the parallels I like to kind of, if I was an infrastructure provider I'd look at this from the standpoint of the emergence of Linux when it first came on the scene. What was important for companies like Red Hat to be successful, they had competition at the time, and you had shortages of Linux, let's say engineers, and what have you. And so, a company like Red Hat built a business around that, and they did that by how they kind of surfaced and validated themselves to the enterprise of that era, was partnering with hardware companies, so, it was Intel, IBM, and then Dell, HP, and they all followed, and then all of a sudden, which version of Linux do you want to use? It's Red Hat, you're paying for that support, you're paying Red Hat. And, you know, then they had their hockey stick moment. Today, you know, it's not about hardware companies per se, it's about the cloud, right? So cloud is the new hardware per se, and many enterprises obviously are looking at cloud computing companies and cloud computing providers, infrastructure providers, as the company that they need to support them with the infrastructure that they use, or sorry the technologies that they use, right? Because they're not necessarily supporting these things and making sure that they're always on within the basement of that enterprise, they're depending, or outsourcing, to depending on these managed IT providers. This was very important that whatever technologies they're using in the lab, that ultimately their infrastructure partners are able to support the implementation, the integration, the ongoing support of these technologies. So if you think of blockchain like an operating system or a database technology, or whatever you want to call it, it's important that you're able to really identify these key trends, and be able to support your customer and what they're going to need, and ultimately for them, they can't have a clog in their digital supply chain, right? So, it's clearly emerging. Microsoft is validating that today, you know, clearly they have the data, that they're seeing for their existing enterprise customers, and they don't want to lose them. >> Yeah, but remember when cloud came out; you and I have talked about this many times Al that it wasn't easy to use, I remember when Amazon Web Services came out, it was just basically, it was hard to command line, basically you had to use it, so, it became easier now, it's so easy and consumable. Blockchain, similar growing pains, but, we don't want to judge it too early with the opportunity that it has, it's going to get easier, what're your thoughts? And it has to scale by the way, Amazon, at a large scale. >> Yeah, I mean-- >> So blockchain has to scale and be easier, your thoughts? >> Another kind of way to think of it is, to not necessarily think of cloud computing, but the evolution the internet went, you know, in Internet 1.0, you know, we went through this dial-up modem era, things were very raw back then; great visions we had of the future, like, it's going to be amazing for video one day! But, not during dial-up modem era, and eventually, you know, it eventually happened. And user interfaces improved, and tool sets improved and so forth. You know, fast forward to today, we have all of that innovation to leverage, so things will move a lot faster with blockchain, it did start very raw, but it's, it's moving much faster than anything we've seen definitely in the '90s and in the last decade, so. It's just, you know, it's a matter of moments, not years. >> And I think Al brings up a great point on leverage, because Amazon leverages infrastructure to a point where it's larger than Google, Azure, and IBM's public cloud combined, and so yeah, massive leverage there. And so, when these big cloud providers provide this blockchain as a service, it is instrumented and built on top of their existing infrastructure, not necessarily on blockchain infrastructure. So, it's an interesting dynamic where they're putting it on top of existing infrastructure that's there, but what's being build right now is the decentralized Amazon Web Services. So you have every layer of Amazon being re-imagined, like, and incentivized so you have distributed compute and access and storage and database. And so, what will be interesting to see is that, given this massive opportunity, will Amazon and some of these other incumbent cloud providers become the provisioning networks of the future? Of all this new decentralized resources that get, again, if you want storage, you have to start having smarts to say: if I'm going to go to Sia or Filecoin or Genaro or Storj, compute, etc; you have to start being a provisioning layer on top of that to kind of, you know, make that blockchain essentially work. So, it'll be interesting to see the transition 'cause today the lightweight versions to say yeah, I have a blockchain as a service strategy, and that's like, well done, and check the box. Now, the question is how far in this new world will they go down? And, as it gets more decentralized, as universities and governments, corporations, plug their access utility into these networks, and to see how that changes. That is much bigger than the Amazon of today. >> I think that's an interesting point, I want to just drill down on that if you don't mind, 'cause I think that's a fundamental observation that every layer's going to be decentralized. The questions I think I'm asking and I'm seeing is: How does it all work together? And then what's the priorities? And the old model was easy; got to get the infrastructure, got to get servers, (laughs lightly) and you know, work your way up to the top of the stack. What cloud brings also is that: a software developer can whip up an application, maybe a dApp on a test network and go viral, and the next thing you know they have a great opportunity, and then they got to build down. So the question is: What are you seeing in terms of priorities on stacks, portions of the stack that are being decentralized and tokenized, do you see patterns, trends, as an investor, is there a hotter (laughs) area than others, how do you look at that? >> Well, I think it's, it's in motion right now it's, like I said, every layer of AWS is getting thought through in how to create these digital cooperatives, I have excess storage, I'm going to contribute it to this network, and I'm going to get paid in tokens when a user uses that storage network, and pays for it in those native tokens and so that, coupled with all the other layers, is happening. From a user perspective, we may not want to be going to pick a database provider, a storage, a compute, etc, we're likely going to say: I want a provisioning layer, and provision this and execute this, much like if we, you know, there'll be new provisioning layers for moving money, I don't care if routes through Lightning or Litecoin or Doge or whatever, as long as the value gets across the pond or the app gets provisioned appropriately based on you know, time, security, and cost, and whatever other tendance are important, that's all I care about, but; given the depth and the market for all that, I think it'll be interesting to see how these are developed with the provisioning layers, and I would think Amazon or Azure, the future of that is, is more provisioning than actually going and doing all that at the end of the day. >> That's great. I want to get your thoughts guys on innovation. My good friend Andy Kessler wrote an op-ed in today's Wall Street Journal around, an article around the government, the US government getting involved. You know, there's Twitter, Facebook, the big platforms, in terms of how they're handling their media, but it brings up a good point that with more regulation, there's less innovation. You mentioned some things outside the United States, it's a global cloud, cloud's operating globally with regions, it's a global fabric. Startups are really hot in this area so; how do you view the ecosystems of startups, in terms of being innovative, things happening that you think that're good, and things that aren't good, obviously I'm not a big of the government getting involved, and managing startups, the ecosystems but, blockchain has a lot of alpha entrepreneurs jumping in, you've looked at all the top ventures, the legit ventures, they're all alpha entrepreneurs, multi-time serial entrepreneurs, they see the opportunity and they go for it. Is the startup environment good, is there enough innovation opportunities, what're you thoughts on the opportunity to be innovative? >> Yeah, Al and I were just talking about this before the panel here, and were talking about our travels in Asia, and when we go there it is 10, 100 X of energy and get-it factor, and capital, and the markets are just wildly more vibrant than you know, going to some typical markets here in San Fran and New York in North America, and, so it's interesting to see that when you heat map the world, what's really happening. And you know, people are always saying: oh well this, this FinTech, or InsurTech, or whatever tech, is going to make a dent in Silicon Valley or Wall Street. This technology, this new frontier, is definitely going to do that. I think some of that will get put into more focus based on regulation, and there's two things that will happen; there's obviously a lot of whippersnapper countries that are promoting a safe place to innovate with crypto, I think Malta, Gibraltar, Barbados, etc, and there were-- >> Even Bermuda's getting in on the mix now. >> Yeah! I mean so there's no shortage of that, and so, and obviously this ecosystem outpaces the pace of regulation and then we'll see like the US doing something, or you know, other fast followers to try and catch up, and say hey, we're going to do the cryptocurrency act of 2022, miners get free power, tax-free, you know crypto trading, you know just try and play catch up. 'Cause it's kind of hard in the last year or 18 months we've seen this ecosystem go from this groundswell to this now institutional discussion; and how do you back end the the banking, the custody, all these form factors that are still relatively absent. And so, you know, we're right in the middle of it. >> It's a whole new way, you got to follow the money, right? Al, you and I talked about this; capital markets, you know entrepreneurs need to raise money and that's a good thing, you need to get capital to do stuff. >> Yeah, this is a new phenomenon that the world has never experienced before, it's awesomeness when it comes to capital formation; you know, without capital formation there is no innovation. And so the fact that more capital can be raised, it's the ultimate crowd sourcing in such an efficient period of time, capital being able, the ability to track capital from various different corners of the world, and deploy that capital to try to fuel innovation. Of course, you know, not all startups or what have you succeed, but that was true yesterday, right? You know, 90% of startups fail, but they all will give it some meaningful amounts of checks, people were employed and innovation was tried; and every once in a while something emerges that's amazing. If you can do that faster, right, when you have the opportunity to produce more and more innovation. And, of course with something so new as cryptocurrency, things like ICOs and what have you, people may kind of refer to it as the wild wild West, it's not, it's an evolution. And you have-- >> It's still the wild west though, you got to admit. (laughs) >> Well, it is but, we're getting better at it, right? As a world, this isn't the Silicon Valley community getting better at venture capital or some other part of the United States or Canada getting better at venture capital; this is the world as a whole getting better at capital formation. >> Yeah, that's a great point. >> In the new way of capital formation. >> And I wanted to just get an observation on that. I moved to Silicon Valley 20 years ago, and I love it there, for venture capital and new startups, it's the best place in the world. And I've seen people try to replicate Silicon Valley, we're the Silicon Valley of Canada, we're the Silicon Valley of the East or Europe, and it's always been hard to replicate, because it was a venture model, and you needed venture capitalists and you need money, you need a community, the culture, the failure, the starting over, and just, you know, gettin' back on the horse kind of thing. Crypto is the first time that I've seen the replica of that Silicon Valley dynamic, in a new way, because the money's flowing, (laughs) and there's community involved in crypto, crypto has a big community aspect to it. Do you guys see that as well? I mean I'm seeing, outside the United States, a lot of activity. Is that something that you're seeing? >> So, the first time we saw, well, last time we saw everybody trying to replicate Silicon Valley was first internet, you know, there was Silicon Swamp, there was Silicon Alley, there was silicon this-- >> Prairie. >> Every city was >> Silicon Beach. >> A silicon version of something, and then the capital evaporated, right? We had a mass correction happen. What wasn't being disrupted was value exchange, right, and so this is being created now, it is now possible for this to happen, and it's happening, we're seeing amazing things, Matt said, you know, in Asia. It's a truly awesome force, if anybody has an opportunity to go, they should go, it's unbelievable to experience it, and it really opens your eyes. >> And you've lived through a lot of investments during those .com days and through history now, you've seen a lot of different things. Your observations with the current state of the capital formation, startup landscapes, the global ecosystem around crypto and how it's different from say venture or classic rolling up companies and those kinds of things? >> Yeah, you hear a lot of this, you know, we're in a bubble, it's speculative, etc. And I think that when you look back at history of infrastructure, whether it's railroads, telephony, internet, and now crypto and blockchain, it's interesting, like, if you said: it would take this amount of money to innovate and come out the other end of internet with this kind of infrastructure, these kinds of applications, with these kinds of lessons learned, nobody would sign up for that number, right? It needs this fear, and greed, and all the other effervescence of markets to kind of come out the other end and have innovation. I think we're going through a very similar dynamic here with crypto and blockchain where you know, everything's getting tokenized, everything's getting decentralized. We're talking about fundamental things like money, you know, it's not like we're talking about pet food and women's shoes and airline tickets, we are talking about money, identity, things that will enable like other curves to really come into focus like in and out of things and the kind of compounding of intersections when some of these things get right is pretty extraordinary. And so, but I like what Al said in terms of capital formation and that friction to get from, you know, idea to capital to building, is getting compressed Yes, there will be edge cases of people taking advantage of that, but at the other end of this flow will be some amazing innovation. >> What do you guys think about the, if you had to answer the question with one answer, of what is the high order bit of why blockchain's so important? For me, I see it, from my standpoint, I'll just start, I see it making inefficient things more efficient for any use case, and that's being re-imagined, which is everything from IOT or whatever. Efficiency is a big thing, at least I see that. What do you guys see as a high order bit in terms of you know, the one thing that you'd say blockchain really impacts the world in terms of you know, impact, financial, etc? >> Well, I think with decentralization and all these things that we're seeing it's kind of evened the playing field. It's allowing for participation where parts of the world were unable to participate. And it's doing a whole lot of things in that area. And that's truly awesome, to really grow the economy, grow the global market, and the number of participants in that market in all areas. That's the ultimate trend at what's happening here. >> And your information? >> Absolutely, and I think there's two things, there's this blockchain dialogue, and then there's this crypto decentralization, tokenization dialogue, and on the blockchain side you have lots of companies engaging in blockchain and trying to figure out how it applies to their business, and you hear everything from McKinsey and Goldman saying financial services will save 100 billion dollars in operating expenses by applying blockchain technology, and that's great. That is probably low in terms of what they'll save, it's, to me, is just not the point of the technology, I think that when you kind of distill that down to say hey, for a group of folks to use this technology as a shared services thing to lower opex a trading settlement and decrease that, that's great, that is a step stone to creating these tokenized economies, these digital cooperatives. Meaning you contribute something and then you get something back, and it's measured in the value that this token is, like a barometric kind of value of how healthy that ecosystem is. And so, regulated public enterprises, and EC consortiums around insurance and financial services and banking, that is all fantastic, and that gets them in the pool, gets them exercising on what blockchain is, what it isn't, how they apply it, but it's, at the end of the day for them it's cost reduction The minute there's growth or IP, or disruption on the table, they're all going back to their boardrooms to say: hey let's do this, this, or that, but, if there's a way, my favorite class in college was industrial organization, and it sounds weird but, it was, it kind of told ya like how to dissect an industry, you know, what makes them competitive, who the market leaders are, and then, if you overlay like blockchain networks with tokens, with incentives, interesting things could happen, right? And so that future is going to be real interesting to see how market leaders think about how to tokenize their network, how to be, how to say: no I don't want to own this whole industrial network, I have to engage with some other participants and make sure everybody is incentivized to climb on board. So that I think is going to be more of the interesting part than just blockchain-ifying a workflow. >> Well let's just quickly drill down on that, token economics, what you're getting to. So let's assume blockchain just happens, as evolution of technology, let's just assume for a second that it's going to happen in a big way, it's private, public, hybrid chains, with all that good stuff happening, but the token economics is where the business value starts to be extracted, so the question for you is: How do you describe that to someone to look for, what are the key elements of token economics? When does it matter, when is it in play, and how should they be thinking about it? >> Yeah, I mean token economic design and getting a flywheel going to create a network and network effects is really important. You could have great technology, but Al could be a better marketer, and he gets tokens adopted better, and his network will do better because, you know, he was better able to get people to adopt and market a particular, you know, layer application. And so, it's really important to think about how you get that flywheel going, and how you get that kindling going on a particularly new ecosystem, and get users adoption and growth. That is really hard to do these days because some people don't even know what Bitcoin is, let alone to say I'm going to tokenize this layer, and every time you contribute, every time you take an action, you're going to get rewarded for it, and you're share the value of this network. >> Can you give me a good example of what's happening today that you can point to and say: that's a great example of token economics? >> Well, you see, I mean the most basic one is shared file storage, right? You know, it's like the Filecoin, Sia, Genaro model where, you know, you contribute you know, the unused storage in your laptop or your university data center or a corporate data center, and you say I'm going to contribute this, and when it's used I get these tokens and, you know at the end of the day or week or year you see what these tokens are worth, and was that worth your contribution? And so as these markets develop, and as utility develops, we'll see what that holds. >> Al, you got an example you could share? DigitalBits is a good use case obviously. >> Actually, I'm not going to use DigitalBits (John laughs) just to be neutral. This is one that Matt will know very well, definitely better than I, but one that I've-- the simpler something is, the easier it is for people to understand, and its like oh that makes sense, you know. You know, Binance is one that's very simple, you know it's a payment token, if you pay with some other currency, you pay, you know, Pricex, if you pay in the next few years with their token, you'll get the service at a discount. And in addition to that, they're using a percentage of profits, I think it's every quarter, to buy back up to, ultimately up to, 50% of tokens that are in circulation. So, you know, it's driving value, and driving return, in essence, if I can use that word. So for a user it's simple to understand, for someone that likes to speculate it's easy for someone to understand in terms of how the whole model works, so it's not some insanely complicated mathematical equation, that we can yes we can trust the math. And so in some cases, some adoption is going to just be, you know, attract participants based on simplicity. In other cases the math is important, and people will care about that, so, you know not all things are necessarily equal, and not necessarily one method is right, but there are some simple examples out there that that have proven to be successful. >> That's awesome, one last question, before we open it up if anyone has any questions. If anyone has any questions, if they want to come up, grab the microphone, and ask the three of us if you've got anything on your mind. And while you're thinking about that I'll get the final question for these guys is: A lot of people ask me hey, I want to be on the right side of history, what side of the street should I be on when the reality comes down that decentralization, blockchain, token economics, decentralized applications, becomes the norm, and that re-imagining actually happens? I don't want to be on the wrong side of history. What should I be doing, how should I be thinking differently, who should I be following, what should I be paying attention to? How do you answer that question? >> I think, at the basic level, you know, turn off your phone, lock your door, and study this technology for a day, it's the best advice I could give. Two: buy some crypto. Once you kind of have crypto on your phone, in your wallet, something changes in your brain, I think you just feel like you-- >> You check the prices every day. (all laugh) >> You lose a lot of sleep. And then after that, you know, I think you start engaging in this space in a very different way. So I think starting small, starting basic, is an important tenet. And then, what's amazing about this space is that it attracts the best and brightest out of industry, and law, and government, and technology, and you name it, and I'm always fascinated the people that show up and they're like yeah, I'm in a 20 year, you know, veteran in this space and I want to get into blockchain, it just attracts some of the best and brightest. And, I think we're going to see a lot of experience coming into the space, you know, this has been a, what I'd say a bottoms up groundswell of crypto and blockchain and the evolution of the space. And I think we're starting to see more some more mature folks come in the space to to add some history and perspective and helpin' the build out of this, and to build a lot of these networks. I think that the kind of intersection of both is going to be very healthy for the space. >> Al, your thoughts? >> Definitely agree with Matt. Definitely to lock yourself up and just try to absorb information, everyone has access to the internet, there's plenty of information. If you don't like to read go watch a few YouTube videos, just people explaining the stuff, it's really fascinating, the various different use cases and so forth. You definitely have to buy some, and, you know, whether it's five dollars worth, just go through the whole experience of being able to trade something of value that a few years ago didn't exist, and be able to trade it for something else of value is a pretty phenomenal experience. Then trying to go buy something with it, it's even more of a fascinating experience, I just bought something that used, again, something that didn't exist a few years ago. But, what I would add to that as well, you really have to get out there; if you keep surrounding yourself with people saying aw, this is, eh, whatever, >> It's never going to work. >> It's crazy, it's for criminals, and all that fun stuff. You're going to be last place. So coming to conferences, obviously future's conference you're going to meet a lot of interesting, great people, and that consistent experience, you'll learn something every time. You know, at the end of the day, I remember, I'm sure all three of us remember, with the birth of the internet there was many people that said you know the internet thing, it's crap, it's for kids, you know. And we had first movers, we had willing followers, and then the unwilling followed, you don't want to end up being-- >> The unwilling followers. >> Yeah, the unwilling. >> Alright. Does anyone have any questions they'd like to ask? Come on up. Yeah. We're recording, so we want to get it on film. >> So I have two questions. The first one is for you, Al: Two years ago I interviewed with IIX before it was Console, and I want to know why you didn't hire me? (Sparse laughs) No I'm kidding! That was a joke. Actually, I thought each of you brought up some good points, minus you Al. (chuckles) I'm just kidding. But what I really wanted to ask you guys is: so you talk a lot about this, the tokenized economy and kind of the roadmap and the things to get there, you talk about sediment layer, right, Fiat to crypto, sediment layer, your identity protocols, your dApps, X, Y, Z, right? The whole web 3.0 stack, I want each of you, or I want at least input from both of you or all of you, what are the hurdles to getting to a full adoption of web 3.0 stack, and make a bold prediction on the timing before we have a full web 3.0 stack that we use every day. >> That is a awesome question actually, timelines. You could be, being in technology, being in venture, you could be right, and you could be off by three, five, seven, 10 years, and be so wrong, right? And then at your retirement dinner you could say: I was right, but Tommy wasn't right. So, this is really hard technology, in terms of building systems that are distributed, creating the economic models, the incentive models, it takes a lot to go right in the intersection of all this. But it's not a question like is this happening? No, this is happening, this is like, it's in motion. The timelines are going to be a little elusive, I'm way more pragmatic, I was one of the early guys in the early internet, and you know everything was going to be .com and awesome and fantastic. But the timelines were a little elusive then, right? You know, it's like when was, people are thinking of today's Amazon was going to be the 2005 Amazon, you know, it's like, that took about another decade to get there, right? And people could easily just buy stuff and a drone or a UPS guy would just deliver it, and so, similar things apply today. And you know at the same time we all have a super computer in our pocket, and so it's a lot different. At the same time we're dealing with trusted mediums right? The medium of money, the medium of identity, all these different things they're, they're things that you know if I say download Instagram, and let's share cat pictures or whatever, it's not a big deal, our trust is really low for that, let's do it. For money, it's a different mental state, it's a different dynamic, especially if you're an individual, a government, or an enterprise, you go through a whole different adoption curve on that, so, you know, it is at grand scale five to 10 years, right? In any meaningful way. And so we still have a lot of work to do. >> My answer to that question, it's a good one, your question was a good one, my answer's a little bit weird because it's multi-generational. The first generation pivot was when the internet was born was because of standards, right? The government had investment. The OSI model, open system interconnect, actually never happened, the seven layers didn't get standardized, only a few key ones did; that created a lot of great things. And then when the we came out, that was very interesting protocol development there, the TCP/IP stuff, I mean HTP stuff. I don't see the standardization happening, because cloud flipped the stack model upside down because Amazon and these guys let the software developers drive the value. It used to be infrastructure drove the value of what software could do, then software became so proliferated that that drove the value of the infrastructure, so the whole cloud computing equation is making the infrastructure programmable for the first time, not the other way around, so. The cloud phenomenon's all about software driving the value, and that's happening, so. It's interesting because with blockchain you can almost do levels of services in a cloud-like way with crypto, I mean with blockchain and token economics, and have a partial stack. So think that this whole web 3.0 might be something that no one's every seen before. So, that's kind of my answer, I don't really know if that's going to be right or not, but just looking at the future, connecting the dots, it's probably not going to look like what we've seen before, and if the cloud's an indicator it's probably going to be some weird looking stack where certain sections are working, and then evolution might fill in the other ones, so. I mean, that's my take, I mean, but standards will play a role, the communities will have to get involved around certain things, and I think that's a timeless concept. >> Timing. >> Oh, timing. I think it's going to be pretty quick, I think if you look at the years it took for internet, and then the web, everything's being compressed down, but I think it's going to be much shorter. If it was a 20 year cycle in the past, that gets shortened down to 15 with the internet, and this could be five years. So five to 10 years, that could be the impact in my mind. The question I always ask is: what year will banks no longer be involved in anything? Is that 20 years or 10 years? (laughs) Exactly, so, yeah, follow the money. >> So I would say that in terms of trying to keep your finger on the pulse with things and how you kind of things, see things evolve; things are definitely moving a lot faster, you know in the past you would probably say seven to 10, I'm not sure if I would say five, sorry five to 10, it definitely feels to me that it's five max til we could start to see some of these key things fall into place, so. >> So could you answer the first question? >> What was the first question? >> Why didn't you hire me? (audience cringes) >> We've met before? Sorry. (all laugh) >> I have a question, this is Dave Vellante, Co-Host of theCUBE. And I want to pick up on something John you just said, and Matt you were talking about Goldman Sachs and Morgan Stanley, it's not about them saving hundreds of millions of dollars, it's really about them transforming business, so. And John, you just asked the question about banks, I want to actually get your answer to this: Will traditional banks, in your opinion, lose control of payment systems? Not withstanding your bias. (laughter) >> Yeah, I am definitely biased on this. But, I mean, I've been in front of the C-suite of banks, credit card companies, etc, and I said, you know, in about a decade, the center of what you do and how you make money is going to be zero. And, 'cause there'll be networks, and ways to transmit money that'll be by far cheaper, or will be subsidized by other networks, meaning, and those networks are Apple, Amazon, Alibaba, you know, Tencent, whatever networks that're out there, that're engaging in collaboration and commerce and everything else, they will give away payments as just a courtesy, like people give away messaging or email or something, as a courtesy to that network, and will harden that network, and it'll be built and based on blockchain technology and cryptocurrencies, so they don't necessarily have to worry about, you know, kind of subtle payments. But these new networks will start to encroach on banks, the banks are not worried about other banks today, the banks should be worried about these new networks that're being developed. >> How many people still have a home phone line? >> That was elegant, I like that. >> You know, I mean there's a generation of people that still like going to banks, they'll keep them in business for a while. But I think that comes to an end. >> I mean, when we covered a lot of the big data market when it started, the argument was mobile will kill the banks outlets, and now with ATMs there's more bank, more baking branches than ever before, so I think the services piece is interesting. >> And also, if you look at even the cloud basis, the software as a service, SaaS space, a decade, decade and a half ago, you would ask SAP, Oracle, what have you, what's your cloud strategy? And they'd be like cloud? That's just more efficient delivery model, not interested. 90 some billion dollars of M and A later, SAP, Oracle, etc, are cloud companies, right? And so, if banks kind of get into that same mode to say well, yeah, we need to play catch up and buy digital currency exchanges and multi-currency wallets, and this infrastructure and plumbing to be relevant in the next world, that would be interesting. But I think technology companies have as much an advantage to do that as as financial services companies, so it'll be interesting to see who kind of goes into that, goes into the crypto ecosystem to make that their own. >> It's interesting. We were talking before we came on and the OSS market, operational support systems is booming, and that's traditionally been these big operational outsource companies would manage big projects, but, if you look at in the first half of 2018, there's been a greater than 20 billion dollar commercial exits of companies through private equity merchants, IPOs, around OSS, and that's where we see operational things happening, CoreOS, Alfresco, MuleSoft, Pivotal went public, Magneto, GitHub, Treasure Data, Fastly, Elastic, DataStax, they're all in the pipeline. These are all companies that aren't cloud, they're like running stuff in cloud, so, this could be a tell sign that potentially the the blockchain operating market is going to be potentially a big one. >> Yeah, and then even look at BitMate, the world's largest miner in crypto. So, they did about a billion dollars in profit last year, did about a billion dollars in profit just in the first quarter going public, just raised a billion dollars last month, at a reportedly 50 to 70 billion dollar evaluation in Hong Kong in the next month, and the amount of money they'll raise will eclipse what Facebook raised. And so I think the institutional, the hardware, the cloud computing, the whole ecosystem starts to like resonate and think about this space a lot differently, and we need these milestones, we need these, whether they're room huddles or data points to kind of like think about how this is going to affect your business and what you do tomorrow morning. >> Any more questions from the crowd? Audience? Okay, great, well thanks for attending, appreciate you guys watching and listening, and guys thanks for the conversation; cloud and blockchain convergence. Collision course, or is it going to happen nicely, Al? >> Yeah, I think it's going to be a convergence, I don't see it necessarily as a collision course. >> And a lot of money to be made on this opportunity these days, and cloud convergence with blockchain. >> I concur with Al, I think there's going to be convergence, I think us most smarter players will engage and figure out their models in this new crypto and tokenized era. >> Thanks so much guys, appreciate it, give these guys a round of applause. (audience applause) Thank you very much. (bubbly music)

>> Announcer: From New York, it's theCUBE. Covering Blockchain Week. Now, here's John Furrier. >> Hello everyone and welcome back to theCUBE coverage here exclusively at the block party, at the Crypto-House's part of Blockchain Week in New York City, Blockchain New York. Also, Consensus 2018 is having a variety of other events. I'm here with Allan Rothstein, the co-founder of Strategic Coin, also managing partner at Decentralized Ventures. Hey welcome to this Cube conversation. Nights, night party here, exclusive event here in the East Village, thanks for joining me. >> Thank you, thank you for having me. >> So, co-founder of Strategic Coins doing some great work in the maturization of this sector. Still in the first in the half inning, bottom of the first, some would say but also Decentralized Ventures, which I love the name because what does it mean? I mean, it means crypto, token economics, block chain, brand new field. >> Exactly. >> Emerging very very fast. >> And it's global, so it's decentralized. Right now we're in Malta, but we're going all over the world, Estonia, other countries because that's where this market is going. >> So for the folks that don't really grock all that, how would you describe it to your friend that says Hey Allan, what is this all about? What is this decentralized tokens, ICOs, blockchain, bottom line me, what's going on? >> Blockchain is probably the first really global business model that is not controlled by anybody, by any single government, by any single company, by any single industry. It dis-intermediates all of these industries that are filled with middle-men and which prevent end users and peers from interacting with each other. >> I was told by some guy I was interviewing in Puerto Rico, you know the United States is the place where all the money went into because that's where the entrepreneurial energy was. And Europe was the entity that was slow, antiquated, all these rules, hard to make money, hard to be a capitalist. He goes: "now, the United States is turning into Europe." We are the new Europe in the US and all the money is going outside the US, into massively growing middle-class economies outside the United States. And the perfect storm is the crypto token economic model, where money is just running hard. Your thoughts on that comment and reaction. >> I think it's exactly right, and more importantly the road blocks being set up by the US government are not only sending the economics to other places in the world, they're actually sending the technologies to other places in the world. So I've lived in New York all of my life, I've been on Wall Street; the reason I'm setting up in Malta is exactly for that reason. Because it is very difficult to work in Blockchain and crypto here. We don't know what the definition is. The IRS says that cryptos are property. SEC says that they're securities. SFTC says they're commodities. The FED says they're currencies. So you have four different agencies claiming jurisdiction and you don't know who to report to. You don't know what the rules are. >> And all the service providers like law firms, and advisories, accountings, they all come to a screeching halt because they don't know what to say. They don't want to get sued. Entrepreneurs give up, that stifles innovation. >> It stifles innovation, but it, more importantly, it's really sending potentially the most important technology overseas. And you have other jurisdictions that are grabbing at it. You've got Bermuda, I work with the government in Malta, and they are setting up what they call Blockchain Island. They are setting up a crypto-friendly regime. This will be the first EU country with a full set of regulations. It's not that the regulations are easy but you know what the rules are. And at the moment, that's the only EU country that you know all the rules. >> As all these regulations, I mean GDPR is happening this month, I still think that's a shit show, in my opinion, but we'll see what happens there. This is, all these regulations, I get it, but I think that as the economy starts to go global, it's a competitive opportunity for our country and nation to be a digital nation and do it right. And also, people need advisory. What the hell is the playbook? You can't just go to the manual, there's no manual for this. There's no playbook. Strategic Coin, Decentralized Ventures, other leaders in the community on the finance side are pushing the envelope to try and lead by example. Because, as you just said, things are pretty much sideways from a regulatory standpoint. >> Yeah, that's exactly what we do. So at Strategic Coin, we help with jurisdiction. We help with the regulations, we try and direct companies to understand what they're dealing with. We do deep research for companies, we help them work on the corporate side, we really help them navigate some very difficult and choppy waters. >> What's the biggest challenge that companies have right now? Is it domicile, is it token economics? >> The biggest challenge is, there are two. One is regulation, knowing what the rules are. Second one is banking. Without regulation, bank will not allow companies who are getting funding from crypto to open accounts and accept funds. Once regulation is in place, the banks understand that they're no longer at risk of violating laws because they know what the laws are. So banking, in particular is a real issue around the world. >> What's the overseas outlook, obviously age is booming, there's been some, you know here sound here and there, shut it down, build it out, other countries are saying we're going to be the first global Wall Street, clearing out crypto, the Fiat, moving it around. This is all up in the air. Who's leading and who's not leading? >> Right now, obviously Malta's leading because of the first EU country with a full set of regulations that they've proposed. Singapore is looking to do this. South Korea is starting to now turn. They were looking to shut down exchanges and they're actually now starting to realize that they're just sending business and technology overseas. >> What's your story these days, what are you working on? What did you do last week? Did you fly to South Korea, I mean you traveling a lot? What kind of, what are you working on? What kind of things? Give me a little taste of how your life goes every day? What are some of the challenges, opportunities you're working on? >> Well, one of the challenges is trying to filter all of the business that is actually coming to us with Strategic Coin and with Decentralized Ventures. We can handle the business because we have a lot of the answers that people are looking for. >> So you need to hire people? >> We are continuing to hire people. What's important with Strategic Coin is that we're hiring Wall Street people. We're hiring veterans in the industry. Many of these companies out there now are 25 year old kids, mom and pops, who really don't even understand what they're looking at. >> You know, baseball, the old expression about a five tool player, what's the equivalent, crypto young gun that you look for? What are the attributes that you look for in a candidate that really can handle the pressure. I mean it's not pressure, it's really just more of the pace. You need smarts, you got to have energy, got to have integrity but also you got to push the envelope. >> They have to work about 35 hours a day. They have to have the capacity to really continue to learn very very quickly to understand, to take direction. And to really understand what this business looks like and where it's going. >> And good money making opportunities as well. >> There are tremendous money making opportunities as there are in any new industry, in any new technology. >> Before we came on camera, we were talking about your background, some of the things you've done entrepreneurially and also growth. What's your assessment of the current wave we're in? Compared, you seen many waves, of all the waves, compare and contrast order of magnitude, this wave versus other waves. >> What's interesting about this wave is there have been paradigm changes in industry, technology, and they've taken generations. So, an understanding of how that change happens, generally is from text books, you had the industrial revolution and first software revolution in these generations for people my age, or people in their 40's. You've seen the software revolution then you've seen the internet revolution and now you're seeing this, so you actually have experience in seeing how these play out. And that's part of the reason that this technology is moving so quickly. I know how it's going to go, I've seen how it's going because I was involved in the internet. >> Software economics, you've seen software economics before, you know what it looks like. >> I've seen software and I've seen internet. And with blockchain, we know blockchain is here, and we don't know what use it's going to be, we know a lot of these companies are going to fall by the wayside. We know a lot of these companies set up a mom and pop will disappear and we know a lot of these ICOs will be acquired by bigger ICOs who have more experience. >> Well you know, just to add two things to that list of awesome commentary is add in open source software and cloud computing and you got the perfect storm. On top of what you just said, that is the magic. Alright, so I got to ask you for the young people out there, what's your advise, or if you could talk to your 22 year old self right now, what would you say to yourself, walking into this new landscape that's exploding with opportunity, change in all theaters? >> That's a really good question. I would say to try and find mentors, learn from industry veterans, as opposed to setting up your own shop, setting up your own ICO, thinking you're going to raise 50 million dollars and you're going to conquer the world by the time you're 25. >> Allan, thanks for coming on to share. I know you had a big party, we're having a great time here. Thanks for taking a minute out of the networking and schmoozing and to come in and speak with us on theCUBE here in New York City. >> Thank you. >> Alright, I'm John Furrier, we're here at Blockchain Week, New York, of course theCUBE's continuing coverage. Go to siliconangle.com, thecube.net for all the videos. We'll be at Consensus 2018 all week. More coverage on Silicon Angle and thecube.net. I'm John Furrier, thanks for watching.

>> Announcer: From New York, it's theCUBE! Covering Blockchain Week. Now, here's John Furrier. Hello everyone this is theCUBE's exclusive coverage here in New York at Blockchain Week New York, #BlockchainNY this is theCUBE, I'm John Furrier your host. Our next guest is Madhu Kutty, who's a partner at Arcadia Crypto Ventures, thanks for joining me here in New York City. We're at the Block Party, a private event here, thanks for joining us during Blockchain Week. >> Yep. >> So you guys do a lot of deals, we had Richard on, who's the managing partner of the firm, early in the space, super early, so you're in the front wave, get all the best deals, now it's competitive, you got to read the white papers, you got to get down and dirty. Still got the pretenders, figure out what's the bad deals, the good deals, and then when you get a good deal make sure it's tailor fit, both the tech matches the economics. (laughing) which I find to be interesting, because, you can have a brilliant entrepreneur come in but their token model's off. Do you see this every day? >> Yeah, we see this a lot. Especially the last year things were much more easier, because most of the people who are coming were generally at least trying to do something good, but this year we see a lot of people who just want to make use of the bail that's happening, just get on the hype and get some quick buck, even on traditional firms that've failed are coming and trying to capture the blockchain hype. >> Yeah, so throw the hail Mary basically, let's do an ICO, and they're going, we're going under throw the hail Mary! >> Yes, that's what we see a lot happening, and then there was a lot of tech projects back in the past so it was a little more easy to evaluate, so, but this year you're seeing more real business applications coming onboard. >> I was talking with Richard about some of the growth things around crypto, and I want to get your take on it because, the internet infrastructure is changing. We see the web 1.0, I mean we hear in these, all the events I go to, similar kind of conversation, TCBIP created inter-networking and inter-operability, HTTP created a whole new way to do things: web 1.0. Now we're hearing token economics and blockchain as a new way, but yet, inter-operating with the old systems, so you have a whole seat change, and there's a real tech-enablement. What's your view on this, because some people get it wrong, they understand what the business logic means, but they want to know what the tech-enablement is. What's the tech that's driving all this new infrastructure? >> So the internet, you could think of it as a way to share information with a worldwide audience, so blockchain, for the first time ever, enables on blockchain, or the inter-crypto infrastructure, first time enables humans to transfer value over the wire. So you could represent one as one over the wire, rather than creating like a duplication of one. So you could have your own Bitcoin stored on the network, and you can access it yourself, and you can send that value across. This was never possible in the history of the human race, so that's what a blockchain enables, it's the solution to basically this general problem, and we always thought that it was not possible but for the first time ever we have a means to achieve that. >> I've also been saying at some of these cube events, that every company needs a chief economic officer, you used to have a CGO, now you need a chief economic officer. So I got to ask you, when you see a technology, you got to kind of make sure it marries the right model. So in the token world, putting security tokens aside, which I like by the way. They're very easy to deal with, utility tokens are different you have two types of utility tokens a work-like token, and a burn-mint equilibrium approach. What's your take on the two strategies there, when should some appoint a burn-mint--or a BME strategy versus say a work token which is much more of a utility classic. >> So a burn token is what has been the work, at least in the past, for building actual platforms, so that solution itself is not fully solved. So once we solve that completely, that's when we see much more utility tokens coming on board, but as this point we see more of the remittance problem that's being solved so that, we have a lot of exchanges, and transferring of currency that's being worked on. So you can think of it like the email in the internet era, though we had all these different .coms, only email worked well. So right now the transfer of value, the remittance on the exchange is the only thing that's working, but as we go forward we'll see much more business models coming out. >> So it's really going to evolve. >> Yep. I think this could be the year that's going to be-- Ethereum was moment when, there was the Ethereum moment when you really could start the next generation of the cryptocurrency movement, so I think this year we could see more business. >> And I've heard some of the conversations here at the consensus event around, a lot of people trying to force blockchain and decentralize, specifically with a centralized business model, so a lot of people are poopooing that. Which is, we just call that blockchain washing, white washing, trying to save themselves. So I got to ask you, I mean first of all, I remember having conversations back when the web started, oh my God, AOL and this 14.4 dial up is so slow, so much slower than a mini computer, technically right, mini computer was much faster than dial up modems to web, but web wasn't replacing the mini computers, replacing direct mail, direct response, analog things. So the question I want to ask you is: what is the analog displacement, what apples-to-apples comparison should we be making when people throw out these idiotic comments like, oh my God blockchain's so slow, because it is kind of slow, the web was slow too, but it replaced something old. Is it right, is blockchain replacing something old, and what is the right comparison? >> So the right comparison is that it is, it has solved, theoretically, the problems, the theoretical solution for these problems we are going to solve the decentralization and decentralizing business, theoretically we have solved it, and we have proved it practically, it's possible, but it is not really there for that-- the mass option for real business to onboard, it has not reached that scale yet. As we all know, if Netflix was in business in 1999, it could never succeed. But then a lot of infrastructure was built up on top of it, and Netflix worked, so the same thing is going to happen here. >> So you're not worried about the complains when people say it's slow? >> No, because there's more in IC, each time I go to these conferences, as you have seen, more and more smart people are jumping in, more and more money is flowing in-- >> The web grew too, more people were using the web, so growth was the key. >> Yeah, growth is the key, and more smart people coming, and they're going to figure it out. >> When you look under the hood of a company they come in and say hey I want to get funding, or I have this great business model, or I take an existing business and tokenize it. What are the things you look for in a good ICO candidate, or just someone who's tryna do token economics, with a technology trying to transition, not pivot, transform into token economics? >> So a lot of it, something people call it is conviction-based investing, so that's a lot, they have a lot in this cryptocurrency space. So we look at the technology, underlying technology, how we can solve some of the issues. We look at the broader aspect of the space, how big the space is so it can solve that, and we also look at the team, and if these three things are in good combination we believe in it can be a rival business. And also the partners, or the founders, have to be a little less greedy, like look for smaller raises that's good enough for the next two years, roughly. >> Well I think entrepreneurs can get liquid faster off token economics, I think it's actually better for the entrepreneur, in my opinion. I want to take change gears a second talk about you personally how did you get here, did you just wake up one day and say I'm going to work for Arcadia Crypto Ventures, were you scratching an itch, did you come from finance, what's your background? >> My background has been in technology and finance, worked with a bunch of Wall Street banks, then private equity firms, then I was running a technology firm when I met Richard, who's very early in the space. So we talked about it and he had a lot of interesting questions about the space so myself and one of my partners we went back and researched on it. So we came back with these answers, he had a little more insight, back in the day, more access to the detail during that time, so we worked with him, and loosely, we worked as some kind of analyst for him and we started working together and then it formalized in a bigger way, now we are working. >> When did you have that moment saying damn this is going to be good? >> I think, so it was once we totally understood the Santoshi Paper, at that point we knew that this is going to change the world. But even I didn't expect that this would be this fast. So what we are seeing today, at that time I thought maybe we'll see that in 2020, 2021, but the space exploded. Ethereum hitting a thousand, which it hit sometime this year I was thinking might happen sometime 2021 or 2022, by then. >> What sector surprised you the most, was it the trading side, the entrepreneur side, what area of the market has surprised you the most? >> What's surprising is the world wide ERD option, and how especially the new generation has kind of lost a bit of interest, not even like they are disillusioned with this other investment model, they are jumping in a big way. And I think this is even ruggedly, everyone has to look for that, these people have come in, so let's get it right for these folks so that they have a belief in the system and they can go forward. >> Madhu I want to get your thoughts on something I think is important for folks to understand, and that is there's a lot of liquidity, Richard mentioned that liquidity is an important part. >> Absolutely. >> So there's a lot of new dynamics and art and science that goes into the trading side of it, much accelerated than a classic IPO or say a hedge-fund kind of deal, where there's always kind of some stuff going on, but here you can get much earlier in on the process. Talk about, for the folks who like now know what a wallet is and might have an account on Coinbase, to the extent that that's their knowledge base. You're so much deeper on some of the trading side, what are the dynamics, how would you break down the trading situation on crypto, give us the crypto trading 101. >> So the idea is that, first of all, there are some huge exchanges, so every cryptocurrency out there wants to be on these exchanges, so these exchanges have much more trading volume, have much more liquidity, that's where you want to be. If you are doing some investment and you want to protect it, you want to be in these highly liquidized ones. And so I would stick to top 10-20 coins for the majority of the portfolio if you want to protect your investment, so that has a lot more liquidity. And then, around I would say 10-20% you would do in sectors that you are interested in, where you really have some kind of idea, that's what I call a conviction-based investment. >> So if I want to convert my crypto to Fiat currency, you're saying stay with the top trading forms, or stay with the sector, what's the advice? >> If you're a regular investor, who's not following the market 24/7 I would say, at least, put like 80% on the top 20 coins where there is much more liquidity and which, you know won't go bust tomorrow. Then you would focus maybe 10-20% of your-- this is, I'm just talking with a crypto portfolio, on something you are going to have some kind of conviction, if you, let's say you are in an automobile space, that's what you understand a lot so any crypto on that, which you think is interesting, you could put your money there. And I'm a tech person, so I would put more money on technology platforms. >> What's your favorite tech coins right now, what're the investments you're putting money into? >> Oh, we've always been long on Bitcoin, Ethereum, so there are a lot of new, exciting stuff coming, like EOS, like we are big on Tezos, it's a very community-driven project, we are very excited about that, what Bloq is bringing, Metronome, I think that's going to be huge. These are very unique in their own ways, you're also offering something as a challenger to Ethereum, Tezos, also in some form, where they're very community-focused. And Metronome, for the first time, offers the ability to do cross-platform transactions. >> Madhu, this space is attracting a lot of young kids, I say kids, coming out of business school, or from a firm like Goldman Sachs, one of these classic firms, kind of bored. They want to do something new. What's your advice to the next generation coming in, jump on the wave, fall down, learn it, get off my wave, get off my beach, I mean what's your advice for the young people? >> If I was in that spot right now, I would just jump in and go with the flow, and you'll figure out what you need to do. At least rather than stick with the traditional companies, this is something new and exciting, and at least the next two-three years, spend on-- >> Get's your hands dirty, don't lose a lot of money. Try not to lose a lot of money. (both laughing) Madhu, thanks for coming on-- >> Thank you! >> Appreciate the commentary. We're here, exclusive coverage, we're at the Block Party, here at the Blockchain Week New York, exclusive continued coverage with theCUBE, we're here in New York City to breakdown all the action inside the ropes of the industry, I'm John Furrier, thanks for watching. (bubbly music)

>> Narrator: Live from Las Vegas, it's The Cube, covering IBM Think 2018. Brought to you by IBM. >> Hello everyone, welcome to the third day of live coverage here at IBM Think in Las Vegas. This is The Cube, our flagship program, we go out to the events, and extract a civil noise of the leader in live technology coverage. I'm John Furrier, with my co-host Dave Vellante. Our seventh, eighth year covering a bunch of IBM shows. With all now six of them rolled into one IBM Think, this is their big tent event, day three, keynotes just finished, it's blockchain day here at IBM, and as we said, on the opening, on Tuesday, this is like, the innovation sandwich. In the middle is the meat, is data, and then the bread is blockchain and AI. And really that is the architecture of IBM's future strategy, foundationally set up by cloud computing and a variety of other applications and whatnot, but really the future is about data, with blockchain and AI surrounding it. Today's blockchain day, your thoughts on the keynote? Keynote speeches? >> Mm-hm. >> IBM, blockchain, certainly we've seen a lot of advertising on TV. Your thoughts and reaction to the keynote. >> Yeah, and I like your innovation sandwich, I just want to add, that the substrate of all this is cloud. It's critical, if you're going to get network effects, you've got to have the cloud. Today, yeah, was blockchain day, we heard from Marie Wieck, who's the general manager of IBM blockchain. IBM has a tendency, as you know, John, to identify a hot trend, especially some in Open Source, they did this with Linux, they did this with Spark, and they kind of, elbow their way in, you know, maybe that's a pejorative, but they do that, and they say, "Here's some code, here's some resources." They spend money on it, and they give credibility to that Open Source effort. The Hyperledger project is the one they targeted here. It's the fastest growing project in the history of the Linux Foundation. IBM contributed lines of code, people, they've got 15 hundred blockchain experts on this, and they're going all in on blockchain. Which I think, John, is really positive for the blockchain, and even the crypto community, because it brings the credibility of a, you know, a Fortune 100 company to that world. They've announced the blockchain starter kit. All this stuff is available on the IBM cloud. They announced today PWC as an audit partner, which again, brings credibility to the table. Although, I think as you and I know, and we're going to have some guests on later today, there's some other tech emerging, that is going to maybe complement that. >> Yeah. >> And we heard from David Katz, who is the CEO of Plastic Bank, this is the company that's essentially creating currency out of plastic. Allowing disadvantaged people to turn collecting plastic into money. And, at the same time, help save the planet. >> I mean, this is a great example of blockchain as an enabling technology. New ways to do business. As you know, we've been hot on blockchain for the audience watching, you know, we've been covering big data, and AI, that's in our wheelhouse, do all those shows and events, cover that territory with our journalism, and TV and research. But blockchain is an adjacency to storage and infrastructure, and also decentralized applications. The fundamental thing that we're seeing, and we talked to Brian-- Brian Behlendorf, who's with the Hyperledger project, at the Open Source Summit, the Apache Foundation, which IBM is a big sponsor of, IBM needs to do well here. Because they're, again, innovations is essentially betting on blockchain. But it's not just the developers at Open Source, the business users are the ones that are going to create the value, and what I mean by that is, if you look at the blockchain world, and crypto currency and decentralized applications, that's essentially the three components to this market. The blockchain is the infrastructure, ledger, storage of data, et cetera, you know over simplified, but the cryptocurrency runs protocols and infrastructure that power that, and then the application's going to sit on top. We've reported and observed that the secret of success in this new world, is nailing the business logic, and the business model, efficiencies that take advantage of the underlying technology. And that the risk factors in making that success happen, is that business model, not the technology. Although the technology is super important, the technology can be switched out a reduced risk. So the real risk in blockchain and cryptocurrency, and decentralized applications is nailing the business model disruption. This is different than the old way of tech, which was the risk was technology selection. This is a big deal, IBM needs to up their game on that piece of it. I've heard a lot of tech, I've got some nice use cases, but on the outreach basis, they got to go to the business users, and say, "This is an opportunity to leverage the data, "leverage the software and AI with watts and other things." And then leverage the underlying technology, software defined storage, software systems that move to the blockchain, in a decentralized and distributed way. Distributed and decentralized is the future of infrastructure, this is the secret of success, this is where the winners are establishing the clear line of sight. >> Well, one of the things that you're hearing at this conference, Ginny set this up yesterday, was incumbent disrupters, and we were just, kind of, having fun at the open yesterday, but I think it's really smart for IBM. You know me, John, I'm a big fan of saying most of your business is going to come from your existing customers, and if you're chasing all this new business, and start ups, and developers, you're not going to be as productive as if you go to your core. And I think that you're seeing this. IBM back to the core, and they're bringing blockchain to that core as a way to disrupt existing business models, defend against disrupters. So you're absolutely right, companies need to look for inefficiencies where there's a third party taking a toll, and then attack it hard with blockchain. I actually think-- well no, so IBM is really talking business. How do we bring blockchain to the business? They're not really talking about what we talk about a lot, this crypto economy and this whole other mission driven initiative. >> Well, but I mean, if they want to talk business, they got to talk token economics. That's where the business model efficiencies will be rendered on the app side, and the money side. The killer wrap in blockchain and crypto is money. Okay, and marketplaces. IBM got to great marketplace, but it's not just about the developers, that's an organic one stakeholder. The stakeholders that matter is the business guys and the developers coming together. That is absolutely fundamental. If they don't understand that, that's going to be hard to be successful. You can't just throw money at developer programs and say, "Oh, when we win the developers, we win the day." Cloud was, kind of, that playbook, but this world is so fast, and accelerating in it's value creation, that the business users are fundamental in actually grokking what the capabilities are, and putting that into motion quickly, and the proof points is pilots converting to production. That's going to come from the business units. That's where the intellectual property is, is looking at the technology innovations that are possible on the business logic. Business logic is the new IP, this is where the action is, and I haven't heard IBM talk at all about token economics, they kind of talk about it, but that really is the business impact. >> Well, I mean, you sort of heard that today from Plastic Bank, although they didn't talk about a token, they didn't talk about coins, they did talk about monetizing plastic, but in using blockchain to do that, I assume there's tokens behind that, but maybe not. Maybe it's just Fiat currency. It's unclear to me, but I think you're right, the killer app is money. >> Look at it, this is simple. The equation in crypto, and not blockchain, is value creators create value, and they can capture the value. Capturing the value is where the money is, the creating the value is where the technology can happen. So you got to nail both of those as areas. And money is the killer app, so that's going to come from the business side, so the real benefit of decentralization is offering the value capture equation to look different and be different. That's token economics. That's where the action's going to be. So, it really is, it's not mutually exclusive, they're both things. >> Well I think that what you're hearing, so value comes from two places in the simplest form, increased revenue, cut costs. I'm hearing a lot from IBM of cut costs, now again, the Plastic Bank this morning was a really interesting example, I'm glad IBM uses it, but the vast majority of things you're hearing from IBM, like the IBM Maersk relationship, et cetera, are about cutting costs, taking out inefficiencies. >> Well, I mean, the bank thing is easy to look at in your mind, but it's any supply chain. The ICO market that's at a massive bubble right now, is because the supply chain of funding start ups and growth, used to come from private equity and venture capital, that is being disrupted because it certainly hyped up, but that's a supply chain. Any supply chain activities, set of activities, that make up a supply chain, can and will be disrupted by blockchain, crypto, and token economics. >> Yeah, so let's talk about that. Because again, you're not hearing a lot of that from IBM. But I think we have a perspective there. You know, the 1.0 was the wild west, a bunch of developers, blockchain developers, theory developers, doing stuff, building up protocols, making a lot of money. And disintermediating the VCs, right? The new form of raising capital. The VCs are now all in, right? We saw this in Bahamas, you saw this in Puerto Rico, at the two conferences, at four conferences that we covered. So explain that? >> Well, that's just one application, the VCs and these guys are inefficient in some way, but what's happening with crypto currency about access to capital. Now there's a lot of capital being thrown out there. That's mainly because of the hype and the bubble aspect of it, but the real disruption is access to capital, that value chain, value activities are being disrupted and being more efficient. That's a global phenomenon, and that's happening in financing of start ups. Anything with a supply chain, whether it's moving food from point A to point B, is what IBM also highlights as well, anything that's structural incumbent is at risk. And so, this is where, I mean IBM has a ton of supply chain business. They've been doing this for generations in the computer industry. They connect systems together, and create value with using technology. So this is not going to be-- this is a great opportunity for IBM. Again, if they can convert that business value into the blockchain with the value capture, the create capture model, they can run the table. >> But I want to come back to innovation equation. And part of that innovation equation is being able to raise capital. And last I checked, which was last month, about 6.5 billion had been raised in crypto investments. >> And 60% of the projects failed. >> For sure, okay. But failure-- Silicon Valley, fail fest, it's probably up to 10 billion now, much more is being raised through crypto in startups in blockchain than there is in VC. The VCs realized this, and they want a piece of the action, but we're seeing private equity, we're seeing hedge funds, we're seeing crypto billionaires. >> The path of least resistance for the entrepreneur is where the action is. They go right to the new money opportunity. Because they can raise more money. >> So, here's the question. You take Fiocoin, for example, smart guys, trying to go after S3 with peer to peer storage, they raised 250 million dollars in 30 minutes, okay? Is it too much too fast? >> Yes, I think so, but it's what the market's giving. I mean, Fiocoin doesn't even have a product. They're on a roadmap. That's essentially a series A financing. >> Dave: That's a series C. >> Well, no, in terms of the evolution of the startup, it's a seed financing as a series C or D or F financing. >> Yeah, 250 million. >> I mean, it's insane. >> David Scott told us that he needed 85 to start Three Par. I mean that's a storage company 10 years ago, 20 years ago. >> Yeah. >> What a change. At 250 million. >> Look, it's a bubble. But the reality is that it's a bubble that's not going to pop and destroy the sector, it's just a proof point that the efficiency of funding is going to be disrupted. It is being disrupted. >> No, we'll see if it's going to destroy this sector or not. This could, you know-- Warren Buffet says it's going to end badly, others are believers. >> I'm long on blockchain, obviously you know that. I'm pretty biased, but anywhere there's inefficiencies, there's an opportunity for entrepreneurs and business leaders to put new business logic in place to capture that value. That's where the action will be. That's the innovation. And if IBM's innovation sandwich could work, you got a blockchain AI, data in the middle, everyone's going to be full and hungry and eat up everyone's lunch. So, Dave, that's the blockchain day. I'm John Furrier, with Dave Vellante, day three wall to wall coverage here at IBM Think in Las Vegas. More live coverage after this short break. (futuristic music)

>> Announcer: Live from San Juan, Puerto Rico. It's theCUBE, covering Block Chain Unbound, Brought to you by Blockchain Industries. >> Hello, everyone, welcome back to theCUBE's exclusive coverage in Puerto Rico for Block Chain Unbound. It's a global event, people from all around the world, from South Africa, Miami, Russia, San Francisco, New York, all around the world, talking about Blockchain cryptocurrency, the decentralized internet, and the future of Money, that's the killer app in Blockchain and cryptocurrency. I'm John Furrier, your host, my next guest is Scott Picken, who's the founder and CEO of Wealth Migrate Platform. Scott, thanks for coming on. >> Yeah, awesome John, thanks for having me. It's quite an exciting group of people here. >> We met last night, had a great conversation, I really liked some of the things that we were talking about, I wanted to bring you on because being in South Africa, where you're living and working, you have a unique perspective because you see the global landscape. So, I'm from Silicon Valley, we're here in Puerto Rico, America's got their view, the UK just announced a deal with Coinbase for essentially a license to convert funds into separate bank accounts through faster payment mechanisms, basically taking crypto and turning it into Fiat. Kind of a game changer. >> The one thing with the UK is they've been at the head of all of the different innovations over the last five to 10 years. They were right at the head in terms of crowdfunding and they're doing exactly the same in terms of now with the whole cryptospace. And it's actually quite interesting because when you take into account Brexit, they actually really need to do it because they want funds coming into the country, they want to be seen as the future of the banking market, et cetera, so it's actually really exciting. When you look around the world it's fascinating that I said this to you last night, that America really grew because Europe used to have all the controls. And so the capital basically left Europe and were in America and now it's happening 300 years later as America has all the controls and the capital's starting to go elsewhere. >> So America's turning into Europe. And so the potential is to bring, you don't have to say it, I'm an American and we're concerned about it. Americans are concerned that we don't want to be that old guard, like Europe was to America in the America days. So a new liberation's happening. UK's putting a stake in the ground, saying, "We want to get our mojo back," my words. >> Scott: sitting here in Puerto Rico. >> Yeah, they're in Puerto Rico. They're going to put a stake in the ground saying, "We're going to give you tax breaks 'til 2036." This is a money flow game right now. So you've been doing some pioneering work, what's your perspective, talk a little bit about some of the world dynamics that you see because, let's face it, this is the transfer of money, with crypto, it's happening at a massive scale, not just some underbelly boutique underground activities. This is front and center, mainstream, real money, real commerce. Your thoughts? >> I would take it a step back, actually. I think there's eight major macro trends that are all culminating at the same time. So the first one is in the education space, and the whole of education is changing, and it's really becoming gamification, and it's becoming learning while doing. So you don't learn and then go do something, you actually learn while you're doing it. The second one, for me, is the whole Blockchain. And what that's enabling people is getting democratization to wealth and access to assets, whether they're in their country or global assets, basically. The third thing that's really important is you've got the rise of the middle class. You know, a lot of people talk about the unbanked three billion, but what they don't realize is that 1.2 billion people joined the middle class. And they are primarily in the emerging world, they're in Africa, India, China. And what they want is, they want health, they want education, and they want access to wealth. Then you take into account what's happening in terms of collaborative investing. In the old days it was I do it on my own, you do it on your own, we sort of trust the financial industry. Now we're coming together, it's the power of the crowd. I could go on and on, that's just four of them, there's another four. They're all coming together and because this is happening is why we're seeing this metamorphosis and cryptocurrency is the catalyst on top of Blockchain that's allowing this to take place. >> Talk about some of the things that you've been advocating for, I know you were sharing a private story, maybe this may or may not be the right time to talk about it, but you put forth some pretty forthright concepts in memos and letters to folks, and no one will publish it. What are those views, because we've got the cameras rolling right now, share your vision. >> Again, I fundamentally believe that technology can solve grand challenges. And when you take our platform and what we're doing, we're effectively helping the 99% invest in commercial real estate like the top 1%. So what we were talking about last night was, I come from a country, South Africa, I was previously from Zimbabwe, and unfortunately for us is that in South Africa, they're talking now about taking away land without compensation. So land redistribution without compensation. Now, Einstein says that if you want to solve a problem, you can't solve it with the same reality that created the problem. And so I wrote a letter to the President, an open letter two weeks ago, and I said, listen. Why don't we do it differently? You're giving a person a piece of land in the middle of nowhere when they've never been a farmer will not help them get wealthy, I guarantee it. And if I'm wrong, let's go look at Zimbabwe. Which is a economic disaster. What about if we give them access to ownership of a good quality commercial asset that's earning a passive income? That is how you'll grow your wealth. And then add to that, Cape Town nearly became the first city, and it still could be the first city, that literally runs out of water. So why don't you go build a decent ionization plant in Cape Town with government money, allow people that you would give land to actually access to that asset and allow them to have the ownership? And that's sort of the concept, where you just think about it completely different. And you allow technology to actually give people what they want, which is wealth and prosperity for their family, and not just a farm in the middle of nowhere. >> And you're really addressing, I think, the incentive system combined with structural change. You talk about gamification earlier, this is kind of the dynamic. How important from an education standpoint, meaning educating stakeholders, old guard or existing governments, because you have this organic groundswell coming up of young people, people with vision that are older and more experienced like us, what's the formula, how do you get this ball rolling? >> So it's quite interesting, I get asked this question all the time and for us, in the first world, a lot of what we're talking about is it nice to have? It's sort of a bit of a game and if I can participate, but where I come from in the emerging world, it's a necessity. There are no other solutions. So if you live in South Africa or China or India and you want to get your money into a first world country like England, Australia, or America, it's very very difficult and virtually no one can do it. But it's a major problem, because you want world preservation, you want your Plan B, you want your children to be able to go to a first world university, et cetera, et cetera, et cetera. And so to answer your question, I think the way it will get solved is in communities where it's not a nice to have, it's a necessity. In terms of educating the old guard, I believe that what happens is you get groundswell, like literally when people really need a solution solved, they persuade governments and regulators to change and it's interesting, coming back to how we started the conversation, that's why smaller countries are often the ones to adopt the regulated new change and, more importantly, countries in emerging markets, whereas first world countries are trying to protect what they have and, unfortunately, the new world is about capital. And its capital flows. >> It's a choice between playing offense or defense, really in my mind it's a sports metaphor, whatever sport you like you know. We love the sports analogies. But this is what UK's doing, they're playing offense. And I think you're seeing other countries wanting to restructure themselves as digital nations because that's what the young people are expecting. So with that in mind, you have a global fabric here at this event, and it's just a microcosm of what we're seeing, which is outside the US, call it the little US bubble that we're living in, Silicon Valley, that's one case I'm wary of, but the growth outside the United States and even in Asia and south of the border, if you will, south of the equator, there's a ton of global action. What is, in your opinion, the few global things that are going on, that people should know about when it comes to how money's flowing and what they can do to take advantage of the trend rather than trying to hold it back. What do we do, is it get into the current? Ride the wave? What should people understand about the new global dynamic? >> So the first thing I would say is, I always laugh at this, but people don't understand how much innovation's going on in China. Like, go and understand WeChat to start off with. It is phenomenal, what is happening. The second thing for me is the global capital flows. When you consider how much capital is moving from the emerging world into the first world, primarily in real estate at the moment. And that's just the top 1% of the top 1%, you know, that's the people with 10, a hundred million dollars. But I've already said to you, there's 1.2 billion people coming into the emerging markets. In the middle class, they're going to want the same things. And so those capital flows are going to be going cross border. I also believe, with time, capital flows will be going from the first world into the emerging world in a safe way but wanting higher returns. >> So then the emerging world, the US has a shrinking middle class, but yet the emerging world has a growing middle class. That's going to attract new entrants. >> Exactly. >> Okay. >> Well, take into account China. Has China had a big impact on the global economy in the last 20 years? Yes or no? >> Yes. >> How many people are in the middle class in China? Plus or minus? >> Don't know. >> I've heard different reports from 200 million to 400 million, but whether it's 200 or 400-- >> It's more than it was 10 years ago. >> I know, but think about the impact that's had on the global economy. I'm not saying that this is 1.2 billion in the next 10 years, it's either a factor of five to eight, depending on which way you want to look at it. >> How much money, in your guesstimation, if you had to throw a dart at the board, order of magnitude, is flowing out of China with crypto into other assets? >> In the crypto space that's fascinating, because a lot of it is hard to tell, actually. In real estate last year alone, it was just short of 30 billion dollars went into commercial real estate from China. Now what's interesting is that a lot of that money is sort of gray, like no one actually knows where it's coming from, which is why China tightened it up so much. It's also why they tightened up the crypto side of things. Because a lot of people want to get their money out of the country and into first world economies, and that's why, in the emerging world, cryptocurrencies have been embraced more, actually, than in the first world. >> John: It's a faster way to move that money. >> Coming back to necessity. So in South Africa, in Zimbabwe, in China you pay more for Bitcoin than you do in America or Europe. I don't know if you know that. >> John: No, I don't know that. >> And by quite a lot. Like in Zimbabwe you pay nearly double. So a lot of people are making money by overcharging coins. They buy them in Europe, they sell them in South Africa, they sell them in Zimbabwe, they sell them in Nigeria. >> So the demand to move the money out of country is very high. >> Well, because they've got capital controls. So they have currency controls. So you're only allowed to move a certain amount of capital out of the country legally. So what happens now, you buy cryptocurrency and you can effectively invest in assets around the world. And you literally started off this conversation, right in the beginning, there's a democratization in terms of capital flows and what's happening, and people are going to put their capital where they want to. And governments, I believe, are not going to be able to control it by putting up controls, they're going to have to make their countries attractive so that the capital's flowing into the country, not out of the country. >> So what's your take on big multinational corporations that have capital structures, have equity positions, and it could be also growing venture-backed or private equity-based companies, they have capital structures, they have equity investors, in some case public, and privates, and unicorn valleys or whatnot, now moving to look at utility tokens as a way to get to a global gamification. So you have multiple securities, a utility, and in some cases a security token a real security. That seems to be a dynamic, are you seeing that on a global scale, are you seeing any activity there, we're seeing a little bit of movement around big companies trying to figure out how to play in crypto. >> From my experience, not a huge amount. I think that most people, they have a board, it's all around reputation, they got to meet the lawyers, the lawyers tell them, you're going to get crucified. And so from my experience, not a huge amount, it tends to be the small to medium enterprises that are prepared to go out and look at it. However, I will say from our personal business perspective, we built our entire company on a community. We've got shareholders all over the world and so for me, when it came to the crypto and the ICO market, that was just doing that more aggressively, effectively, and community-based companies are the future. So whether you're a Fortune 500 company or a start up, it's all about building the community, and I believe that whether it's utility token or security or a combination of the two, it provides an incredible vehicle to ultimately be the catalyst to a community. And if you're the catalyst to a community adding value, then you're going to build a company of value. >> And capture that value. So, Scott, I got to ask you about Wealth Migrate. Talk about your platform. First of all, thank you for sharing your perspective here on theCUBE. It's been fantastic to get that data out. What's your company about? Take a minute to explain what you guys are doing, your value proposition, state of the company, are you doing an ICO, have you had an ICO, what's the status of the company? >> So from Wealth Migrate's perspective, the platform went live in October, 2013, so we're a little over four years in now. We've effectively got members from 111 countries around the world and we've raised just short of 70 million dollars. All though the platform, all on Blockchain. We've facilitated real estate deals of over 485 million dollars and what I'm proudest of, actually, is that we've got a higher than 70% reinvestment rate. What we're doing is we're allowing the 99% to invest like the 1%, our minimum investment at the moment is $1,000, we're beta testing $100, and my dream is to get it to $1. You asked a little bit about the ICO. We built our platform on Blockchain not because of an ICO. Our number one challenge was trust. And ultimately Blockchain enabled us to solve the trust problem. The second thing for us is that my dream is to get it to $1 per person per investment. I want to solve the wealth gap. And I truly believe we can do it when we can allow anyone anywhere to invest in good quality assets. I can't do it with the current system, there's too many friction costs. With crypto and volume I can. >> Whether it's semantics, or education and/or hurdle rate on dollars, it's an interesting concept. You want to make the 99% invest like the 1%. Explain what that means, take a minute to explain that concept. I mean, some people are like, "Okay, I know what "the 1% is, there was a movement about that." So now you're talking about something pretty radical and interesting. What does that actually mean? I mean, empowering people to make more money? Unpack that concept. >> So let me ask you a question. Do you personally own a medical building? >> Do I own what? >> A medical building. >> No. >> Like a hospital, medical building. >> No. >> So it's 2009, I'm in Bondi Beach, Sydney and I meet two US dollar billionaires. I had helped about two and a half thousand people buy houses and apartments in England, Australia, America, and South Africa. And I sat with them and I said, "What are you investing in?" And they said, "Medical buildings." I said, "Why medical buildings?" And they said, "Well think about it. "No matter what happens in the global economy, "people need doctors." I was like, that makes sense. Secondly, they said, "Doctors never move." I was like, that makes sense. Thirdly, doctors are very good at being doctors, but they're not accountants. And so they sign long term, good, favorable leases. Now from a property perspective, real estate perspective, that's a no brainer. And I said to them, "How do I participate?" And they said it's really simple. It's for friends and family, there's eight people only, it's five million Australian dollars each. I was like, now there's the problem. That company today is over 700 million dollars, it's on the Australian Stock Exchange, and it's what I call financial exclusion. You and me don't own medical buildings. Since October 2013, we've enabled people to invest in medical buildings from $1,000. So the top 1% get wealthy by investing in better assets than the 99%. >> John: Because they have access. >> Because they've got access. >> John: And the cash. >> And the cash. But we've dropped the barriers to entry. Because you and I can participate now from $1,000 and I will get it to $1. >> So it's a combination of leveraging the asset based securitization with that opportunity by using a crowdsourcing kind of model, is that what you're thinking? >> So, effectively, and I'd suggest-- >> John: I'm oversimplifying it. >> No, no, 100%, I'd suggest everyone goes and looks up the term collaborative investing which is ultimately, it's a thing that's been going on for decades by very wealthy people on how to successfully invest. We've taken that but we've added a smart component. And why that's important is because in the past you needed 10, 50 million dollars to do collaborative investing, now you can do collaborative investing with $1,000. >> Yeah and what's beautiful is that you understand potentially whose reputation you're working with, you can move in herds, network effect kicks in, that's awesome. >> What gives me the greatest pleasure, I mean, children, my son is six years old, he's already investing. You know, most kids are playing Monopoly, he's playing real Monopoly, and so are adults. And what gives me the most pleasure and pride ever, and what I'm grateful for, is that we're changing people's lives. >> People talk about how to solve the welfare system, all kinds of things, you make people own something, or try to own something or trade, whether they make money or lose money, you learn from it, you're better for it. Here, you're providing a great service by opening the door, lowering the barriers to entry, to potentially wealth creation. >> Dude, I call it freedom. At the end of the day, if you're where you want to live, where you want to send your kids to school, how you want to retire, whether you want to donate to the church or whatever, I don't really care what you want, but I want you to have the freedom to be able to do it. And wealthy people get that freedom by investing in quality assets. And we're just allowing them to do that now. >> And the democratization is multiful, in this case you're creating a new economy model so the whole freedom, democracy aspect is in play. >> Well, I mean if you think about it, when you get into $1 per person, $1 will not change your life. But if you change your habits, you'll change your financial destiny. And so my philosophy is get it to $1, so that every single person can participate. And once you start to learn good habits around money and wealth, the rest just, it's a formula. >> It's a flywheel. Kickstand. Scott Picken, who's the founder and CEO of Wealth Migrate Platform from South Africa, formerly of Zimbabwe we learned today, great sharing the global perspective. Thanks for coming on theCUBE. Exclusive coverage from Puerto Rico, this is theCUBE, I'm John Furrier getting the signal here out of all the noise in the market, this is what we do, this is theCUBE's mission, to bring you the best content, best story from the best people, more coverage here in Puerto Rico. Day one of two days of coverage. After this short break, thanks for watching.

>> Announcer: Live from San Juan, Puerto Rico, it's theCube! Covering Blockchain Unbound. Brought to you by Blockchain Industries. (lively music) >> Welcome back to theCube's live special coverage here in Puerto Rico for Blockchain Unbounded which is the global event where people from around the world are coming from Silicon Valley, New York, Miami, all over the globe, Moscow, all over the world here to talk about blockchain decentralized internet, and of course, cryptocurrency. Your next guest is Olga Petrunina with Adara.IO. Welcome to theCube. >> Hi, happy to be here. >> Thanks for coming on. So you're from Moscow which it's cold there right now. What's it like? >> It's minus 15. (laughs) It's much better here in Puerto Rico. I'm happy. >> It's so exciting to have you. Thanks for coming on. So the global conference, this is really a global phenomenon. Take a minute to explain what you're working on, what the product is, what it will become, is it launched yet, what's the company about. Take one minute to explain. >> Okay. We are building intelligent blockchain ecosystem which consists of exchange and crypto wallet with artificial intelligence mechanism inside. We are providing access to the crypto for Main Street investors who have no idea about crypto, want to invest, just put their money in our wallet, pick up the strategy, and just get money. (chuckles) >> So you're targeting mainstream investors, not like the insiders? >> No, no, of course we have professional players on our platform because we're going to educate our investment mechanics with strategy of professional groups of traders. >> So are you going to have an exchange and software behind it? Explain the architecture of the solution. >> All right, we are based NEM. It's our core partner. We are early adapter surveying their protocol, Catapult. We integrated it in our exchange because they have really good new features like aggregated transactions when you can send a pool of different currencies in one transaction. That's a really great idea. Also, they implemented the centralized exchange in their protocol. So our exchange right now is centralized. We're going to build the decentralized part of our exchange based on Catapult. >> Are you worried about the centralized portion because of recent hacks? How are you thinking about doing that? >> Yeah, in case we are using a NEM protocol, they have like four layers of security. As for me, it's the most secure and most scalable protocol. Of course, we are using the cold wallets connected to our platform so we are not storing anything on hot wallets. It's like 95% storing on the cold wallets. >> What's your biggest fear? >> Oh, (laughs) spiders. (laughs) No, I just-- >> Is that a cryptocurrency I don't know about yet? (laughs) >> As for me, the biggest problem for crypto is regulation. Now, we have to... Like they're building the structure for obtaining different licenses in different countries. So we have bought update for licenses in Dubai, in Estonia, and also we are going to apply in Switzerland. So it's really hard to negotiate, everyday the new news regarding regulations. >> So talk about where the exchange will be. You mentioned Dubai. Are you having one in one nation or you having multiple countries participating? How does it work? Does everyone have to participate? >> In case of that in Dubai, there is no legal structure, for example, bank licenses in crypto, so we're going to have to invent licenses in crypto in Switzerland. In Dubai, we obtained for license trading crypto into commodities because Dubai, they're focused on commodities base. In Estonia, we received a payment system license and brokerage license. >> So one of the big news this week is Coinbase, one of the most popular exchanges, had done a deal with the UK government. I don't know if you saw that, the Financial Conduct Authority, the FCA, just now gave them a license for their fast-payment service for Fiat. So a new government move, really interesting. Are the governments that you're talking to thinking the same way? >> Yeah, we talked to Central Bank of Dubai. They're also going to legalize all the crypto and involve their blockchain and cryptocurrency with companies to set up in their legal structure in Dubai, the same with Estonia also. Everybody want to be like the "crypto alien." (chuckles_ >> The crypto Wall Street. >> Yeah, the crypto Wall Street. >> And every country wants to do it, Puerto Rico, Armenia, Bahrain wants to get in on the action. >> Yeah, the same with Russia. We are members of Russian Blockchain Association. We are working on laws for Russian government regarding crypto. It's going to be pretty good regulation. We'll publish in this summer, like July. So I hope that the-- >> Olga, talk about the entrepreneurial landscape in Russia right now. How vibrant is it? We know they have technology savvy. >> About me? >> And Russia in general. >> And Russia in general. >> In Russia, in Moscow. >> Yeah, a lot of good blockchain developers. >> And the young kids. >> Vitalik is Russian. (laughs) >> I interviewed his mom, by the way. >> Our developers based in Moscow, that's why I'm also based in Moscow. Everybody like crazy about crypto in Moscow because I think we have a lot of good tech background in Russia so why not use it for blockchain expansion. >> Great Russian expertise. I know a lot of Russian developers are good, but also in Estonia, there's some great developers, too, all over the world. >> Right, but Russia has >> It's a global revolution. >> In blockchain. Vitalik Buterin is Russian, so it makes a lot of sense. (laughs) >> When we get him on theCube, we'll grill him. What do you hope to do in the next? What's next for you? >> We're going to be public in June. Now we already developed our exchanges for (mumbles) and security check. After that, we're going to build our artificial judges of investment mechanisms, so we need like one year and a half for educated. Our next step, we are thinking about taking utilization real assets also because we already have all these elements which is necessary for the organization in our core partners technology, NEM. So I think we will move in this year also. >> What is the main thing that you're going to use in your exchange that's going to make you different? >> What's different about your exchange? >> We have a lot of expertise from different traders around the world. All of them are claiming about their unstable APIs of exchange, and we are focused on high scalability and like best technologies in API building of exchange because we need a lot of traders on the platform. We have development that APIs for follow trade. So it's like our best feature, I guess. >> What kind of partnerships are you looking to do with other people? >> We're looking for traders, of course, because we need them to bring our platform, to bring forth great entity to our platform. We are looking for companies which going to list on our exchange. Looking for investors, also. >> Olga, what do you think about this conference here? >> Oh, it's pretty amazing. Our first time in Puerto Rico. I was really surprised. It's amazing country, amazing island, and a lot of good connections. So, I'm happy to be here. >> It's a global landscape right now. >> Yeah right, it's global, peer-to-peer economy. (laughs) >> Well, Olga, thank you for coming on and sharing, theCube. We learned something today. You don't like spiders. >> (laughs) Right. (laughs) Thank you for inviting me. >> You're afraid of spiders. >> Thank you very much. >> Thank you. >> All right, more of Cube coverage here in Puerto Rico. I'm John Furrier, the host of theCube. Extracting the signal from the noise here in Puerto Rico. It's theCube's continuing coverage of the blockchain, cryptocurrency, and the decentralized application revolution. We'll be right back after this short break. (lively music)

>> Narrator: Live from San Juan, Puerto Rico It's theCUBE. Covering Blockchain Unbound. Brought to you by Blockchain Industries. (latin music) >> Hello and welcome back to theCUBE exclusive coverage in Puerto Rico for Blockchain Unbound I'm John Furrier, your host, here covering all the action in Puerto Rico as the global society and industry come together. Our next guest is Marhall Taplits he's the Chief Strategy Officer and Co Founder of Nynja.biz, check out their site, Nynja.biz. Marshall, thanks for joining me. >> Thank you. >> So tell about what you guys do. You guys are doing some disruptive stuff, tell us about what you guys do, then it will jam into a conversation. >> Sure, so are you familiar with WeChat in China, for example? >> Yeah. >> Okay great. So I've personally been living in China 15 years, so we've watched kind of the birth of the Chinese internet, which as we know, is a little different than the regular internet. >> A lot of mobile users. >> A lot of mobile users, 800 million China mobile subscribers alone. WeChat, basically, is a platform that started off as just a messenger but basically what it's done is it's integrated into every facet of Chinese society. To give you an example, you go to a restaurant, you scan the QR code, the menu comes up, you pick the food, you pay for the food, it comes, you walk out. Everything like that is in China. Everything like that is in Wuzhen China. So what we've done is we've kind of taken this concept, and we're working on a global version of it, that's cryptocurrency based, and we are working specifically with Chinese companies in order to help them go global as part of the China One Belt One Road program and working with companies like Alibaba, what have you, in order to help Chinese companies go overseas and take what they've built in China but operate globally with cryptocurrency. >> Are you guys in China? Cause it's been hard for companies to start companies in China. So you're living in China or you're working in China? >> Yeah so because we live in Shenzhen, right next to it is Hong Kong. Hong Kong is where our company is based. Hong Kong, as you know, previous British colony, the legal system, and the financial system-- >> And you domicile in Hong Kong, that's where you're based? >> Me personally in Shenzhen, but the company is in Hong Kong. So we also have a Wyoming corporation in the US. >> That's where all the action is. >> That's right >> That's where WeChat is >> That's right >> Alibaba's got Alipay and then there's more business to business with their app. So I get that WeChat's been highly successful. In fact we have a huge following on WeChat, Sou Kanai, Niki Bond, free content. But that brings up the question of Chinese kind of showing the way with mobile expansion, so their users are heavily mobile savy. >> Marshall: That's right. >> This is pretty obvious when you think about it, but in America and around the world, that's going to translate to the new user experience. So in your opinion, how would you describe the expectations that users have? Because you're living on the front end of the wave of what mobile's doing, I mean there's a lot of gamification going on, some if it's kind of creepy, but what is your view of the expectations that users have and what's different about what's currently available in the webstac, and the 20 year old e-commerce stacks, that are out there? >> Sure, I think the most important thing is reducing friction, all right. You don't want to be using platforms where you can not do it wherever you are whenever you are, you don't want to have to go through payment processes, you don't want to have to re-authenticate yourself across whatever platforms you use. And interestingly, when I first went to China, it was all about copying what was in the west over to there, but actually it's kind of the opposite now, right, so we basically want to take this concept of the frictionless digital life, and make it a global opportunity. And especially with BlockChain and cryptocurrency you have that really as an opportunity, because if you look at all the apps that are out there, and the platforms that are out there, the only ones that have gone past a billion users, WhatsApp, Instagram, whatever are the free ones. But as soon as you layer in payment, it becomes very locked. And as big as WeChat is, and as big as LINE is, but ultimately it's locked into the Rem and B system or Reo in Korea, what have you, so the cryptocurrency is really the first opportunity that the world's had to create platforms that can get up to a billion, two billion, three billion users that are able to pay. And we just think that's a once in a lifetime opportunity and we want to be part of it. >> So I got to ask you about the impact that cloud computing has had on this, obviously we've seen cloud computing destroy the data center model, allow people to get time to value faster, mobile on top, big data analytics using data, all this stuff's awesome stuff. So the question is, is that, that's kind of a horizontally disruptive view, so these stacks that are built old way where I got to own the stack end to end, yeah there's some standardization on the lower end of the stack. But now you're thinking about more of a horizontal, I got jurisdictions, I got regions, I got countries, I got sovereignty, all these things are in the melting pot of the cryptocurrency BlockChain, de-centralized applications, are major impacts to all those things. How do you see that playing out because, that's kind of what developers worry about, oh shit will this work on that chain? I got Neo I got this I got that, so the plumbing is totally a moving train right now. >> Marshall: That's right. >> But the business models are pretty obvious. So there's like a business ops thing going on. What Dev opts did for Cloud, you got this new abstraction thing going on with this world. What's your view on that, do you agree? Or what's your take? >> Yeah well you pretty much nailed it. I mean basically what's happening is over the last 10 or 15 years people have finally accepted that having your own server is kind of silly, you know, and most people now will just spin up whatever they need in terms of resources on TheCloud. But over the last couple years, you're really going more toward Edge Cloud, where the way the clouds work, is that basically it's pushing to get the least amount of latency and store the data as close to the user as possible. And then there's also regulatory in some countries now in terms of, if your users are from this country, you have to legally store the data in this area. So this is all kind of evolving. And if you look at the BlockChain technology, I think it's the payment version of that. So for example, everyone's always concerned about getting in and out of Fiat Currency, and how am I going to get back to dollars, and this and that, but I think what's going to wind up happening, is this is going to get pushed towards the edges and there will be opportunities and ways with exchanges and what have you to get in and out. But more importantly, it's going to be like, just other currencies, so for example, I live in China but I come to the US a few times a year, I also travel to Europe, I have some dollars, I have some Euros, I have some Rem and B, when I leave China, I don't immediately sell all of my Rem and B, I just keep it because at some point I'm going to need it. And I think what's going to happen in the cryptocurrency space is, especially on the larger BlockChains, like Ethereum and Neo and what have you, is people are just going to get used to keeping some of it and they're going to stop worrying about what the exact exchange rate is and how am I going to get in and out, and this and that, and they're just going to start treating it as part of their currency stack that they keep. >> Yeah as long as there's some level of stability. It's just like, I remember when I was growing up, there was no Euro, every country had their own currency. You had the French Franc, the Swiss Francs, the Deutsche Mark, Lira, etc, etc. But you're seeing that the viability of the money aspect, cause at the end of the day there's two things that we've identified in analysis, and I was talking about it last night, talked about it this morning on theCUBE, is the killer apps for BlockChain cryptocurrency, these sorts of apps is two things, money and marketplaces. >> Marshall: That's right. >> Everything else is just kind of circling around those two. >> Well there's more but certainly that's the main part of it >> Money, moving around. So the UK just announced with coin based, the Financial Conduct Authority, reading the news yesterday, has essentially said we're going to allow for the fast payment system to convert to Fiat. This is a government, the UK is a nation. This is the beginning, to your point, that if they don't get up to speed, the edge of the network will democratize them and kind of circle the wagons, if you will, so it's already happening. >> Yeah and I think what governments are starting to realize is hey guys this is just a technology and not only do you don't really have jurisdiction to control it, but also that you don't even have the technical means. So Wyoming is a good example of regulation coming into play, that just kind of accepts the presence that this now exists, right. And they're not going to try to make it something and fit it into the old way. So, and in terms of the stability of these coins, I think it is important because people want stability, but in other ways, if you don't look at the exchange rate, it's actually way more stable than the current system, and I'll give an example. In the last month or two, the prices of cryptocurrency have dropped almost 40%. Now if the stock markets and the global affects markets drop 40%, you'd have blood in the streets. But the crypto market is asset based instead of debt based and because it's so structurally sound it's able to handle these wild swings without actually collapsing the system, so in may ways, it's way more stable, and then as the market gaps and the buy in of these currencies get bigger and bigger, of course it's going to be more stable over time. >> Well I mean its stable from a fail standpoint, but a lot of emotional instability. People losing money for the first time. >> But that's just because they're-- >> That's a lot of speculation, right? >> There's a lot of speculating and then if they're down they feel like they lost but, that's life. >> People that are into the game, like you, were long on this. So what would you explain to someone, cause I have two, a lot of friends that have two schools of thought, that's a total scam, don't associate with that, to oh my god, that's the next biggest wave, lets get our surfboards out there and lets get on this, there's a multiple set coming in, it's the biggest thing we've seen, and everything in between. How do you explain it to people for the first time? >> It's just your traditional curve, there's early adopters and what have you, and if you were one of the guys buying up domaine names in the early 90s, you know some people would say I can't believe you're spending $100,000 buying up domaine names, but some of them now are worth, you know, tens of millions of dollars. But again, this is the speculatory piece of it. And there's no shortage of opportunities for speculation and I encourage everybody to speculate a little bit because what it does is it gets you a taste of the technology. And usually, when you have some money on the line, you pay more attention, so if speculation is what gets people interested, and it gets them watching it and understanding the technology and using it, then I'm all for it, but people shouldn't be speculating with money they don't have. Anything could happen in the short term. Nobody knows what's going to happen with any specific currency. But in terms of the technology itself, this is a revolution way bigger than the internet itself. This is where you're getting, not only, communications like the internet, but financing governance and all as one. Programmable money, programmable contracts, that wipes out finance, it wipes out legal, it whites out governance in many ways. So this is a huge evolution in human society, and we've termed this Open Unity actually. And so we believe that society has to reach a state of open unity in order to go into the singularity as we would envision it wanting to be, as something that's under our control. >> Yeah and I think one of the things, first of all that's a great statement, well said. I'll just kind of put some reality on that, connect the dots, is that if you look at the trajectory of cloud computing, Amazon Web Services was laughed at years ago. S3 came out, compute storage building, basic building blocks and a slew more services. What Cloud did for software developers, and what they've disrupted from a business standpoint, dev ops, it's proven. What open source has done, even going back to the old red-hat days and linux, is that now a tier one global citizen in software, you look at those two trends, you can connect that dots to what you just said. And what made Cloud great was they made application developers have access to programmable infrastructure. >> Marshall: Exactly. >> You're talking about a whole nother level of software programmability, money, marketplace, society, >> Yeah you hit it on the head. >> We're there right? >> That's exactly right, so when a programmer wants to start a business, instead of going to create an LLC, and getting their EIN Tax ID or whatever, and when they want to go into Europe, and dealing with that and then trying to open a bank account, which is almost impossible, internationally now, instead of that, you just have your SDKs and your APIs or whatever and you've got access to money, program adding, you can take money, you can move money around, globally, frictionless, permissionless, with governancy, smart contracts-- >> They might not not need an SDK dashboard, its a console, click, click, click, smart contracts, governance, turn key. >> And one of the things we're working on with Nynja in particular, is this kind of on-demand marketplace and putting together a de-centralized teams for work. And this is all driven by smart contracts. So one of the issues with the economy is the huge booms and busts that people have in the economy. And if you look at the root cause of that, my personal opinion, is that it's because of payment terms. So for example, if I do work for you, and then there's an invoice, but it's not due for 30 days, now your business may be structurally sound, but the truth is your cashflow is all over the place. With BlockChain technology, we can actually do real time payments. You could be paid minute by minute, hour by hour. Real time, program, contract. So we're going to create very flat even money flows through the entire economy globally, and we're going to just completely remove these booms and busts that are really nothing more than just cashflow issues that are compounded and compounded at a global level. >> I mean I lived through the dot com bubble, I was actually part of it on the front end, on the euphoria side, as well as on the crash. Part of the whole search paradigm, google right there. Key words, all that stuff happening, growth, massive growth. So I saw that, the scammers in there, or the bubble people, that's what we called them. But the reality is, everything happened. It was pet foods online, you could get shopping delivered to your house. So again, to your point, it's a little euphoric right now, but what's different is, is you have now, community data. See what I see happening is, it's not a major bubble crash, because self government, self governing, self governance, is a community dynamic. So I think there's going to be a lot of self healing, inside the networks themselves. You're already seeing it here, a lot of people, bad act is being identified, investors flight to quality, looking at quality deals. Interesting times, your thoughts? >> Well I mean you know, we've been through many evolutions of society, we've had surf-dom, we've had monarchies, we've had representative democracies, we have all these things, and I just think the next evolution is decentralized governance. And we don't even know what that means yet, because it's just starting, but I think we can all, if we can close our eyes and really think about it. I think it's pretty obvious what the issues are with our current system and not just the US, but globally, and I think we have an opportunity here to build in organic program governance. And what's really special about BoxChain technology is if I program it to do X, it's going to do X. So we don't need to, I don't need to know who you are to trust you. I don't need to worry about where we're going to sue each other, or we're going to have arbitration if things go wrong. We're just going to make an agreement, and we're going to program it that way, and that's it. And now the next phase is, I could build on top of that trusting that that's just going to happen. So you can create these chains of trust, and that can happen anywhere in the world. So I think this is a whole nother-- >> Sounds like a bunch of web services. >> Well in many ways, in terms of the architecture, sure you could absolutely think of it like that. >> The reusability, the leverage is amazing. All right, so I want to just end the segment Marshall, take a minute to end the segment, to talk about what you're working on, Nynja coin, Nynja, N-Y-N-J-A .biz, you guys have a product, you got a BlockChain enabled platform, you got a coin, take a minute to explain what you're working on. >> Basically we want to provide the tools and services to help people live in this new reality. So in order to basically function in the world that we're entering into, we're going to need tools that far surpass what's currently available in terms of the messengers, the web sites, all these things. We need to be operating at a level that takes communication completely frictionless, payment completely frictionless, and governance completely frictionless. And we have to put this all together, and that's what we're doing with Nynja. We're staring with a global communicator, which is basically, if you want to take WeChat, telegram, whatever, but we have about 50 additional features that really take communications to the next level. And then on top of it, creating the baseline with cryptocurrency payment, and also smart contract wizards and helping people kind of get these teams going and get paid and organize their financial life in a de-centralized way. So we're just basically going to be the next generation of these messenger type platforms with BlockChain integrated. And what you're going to see is that over the next couple years you're going to get to the first companies that are achieving not just a billion or two billion or three billion users, but paying users, and we're going to be one of the probably three to five platforms that are offering tools at the global level like this. >> And have you got an IC already or not? >> We've just started our private ICO about two weeks ago. We're getting tremendous support in Asia. Quite frankly, the US is not seeing it as much-- >> Is it a utility token or security? >> Utility Token, and I think it's really telling, interesting, coming here. It's the first time I've been doing the presenting. We spoke yesterday at the d10e and we also spoke at d10e in Korea a week or two ago, and the response is incredible. And I think the reason is because-- >> The Asian market gets it. >> Well they're already living in this world within their own confines in terms of the messenger with their payment and governance built in, so when I tell them that we're going to do this globally with crypto, immediately they get it. I'm having trouble here, especially in these five minute pitches which is ridiculous, it's like a chop shop, I don't know how to communicate the idea within this short time frame, so, what I'm looking for while we're here this week is just to find people who really want to take an hour or two or even people like yourself who want to do interviews and just kind of really talk to people and really explain-- >> Well platform is complex, a lot of pieces to it. It's a system, but the value you offer is essentially offering developers, who are building products, for tools that you've built so they can scale faster. That sounds like your value. >> That's right and although I can't say specifically, we're also working on a deal that's going to get us started with about 15 million active users on day one, so that's very exciting and we're really really excited about that. >> And the coins will be utility of measures, what? >> Sorry? >> Well your utility coins going to be measuring what, what's the main token economics that drives the-- >> For the ICO economics? >> Your Nynja Coin. >> So basically we're releasing 5 billion tokens, 45% of them will be sold. There's five cents a token, so the hard cap, by definition is about 112 million, actually we're planning to do the public sale in April, but we may cancel it or postpone it just because the private sale is going really well, but we'll see how that goes. But in terms of once it's live, this will basically be the utility token of the entire eco-system, so anybody, not just within our Nynja App or platform, but even people, I don't know if you know XMPP federation, like back in the day-- >> Yeah you know about real messaging >> If you could think of us as the next version of XMPP federation, but using cryptocurrency in order to avoid bad actors by making it very expensive to do bad things, and very cheap to do good things and globally. >> So it's like Twitter you can create a bot instantly, but if there's coins involved, you'd have to spend to get it. >> That's right and also people could spin up nodes that are basically their own Twitters and decide if those Twitters of their own, their Nynja boxes of their own, are either just internally, or you could specify specifically context or group of context-- >> We agree, that's a great way to get bad actors out because it costs them money. And it's de-centralized, there's no single spot. >> That's right, if email came out today, when cryptocurrency existed, there would be no spam. Because it would be expensive as hell to send more than a few a second, but it would still be free and for everybody generally, and you wouldn't even have spam. So we think we can do that for messaging globally. >> Great. Marshall, thanks so much for coming on theCUBE, really appreciate it, check out Nynja. Marshall Taplits is the Chief Strategy Officer and co-founder of Nynja.biz, check them out online. Check out the website, it's in Asia, bringing that culture of mobile and fast moving, real time apps, to the rest of the developers. This is theCUBE coverage in Puerto Rico for BlockChain Unbound exclusive two days of coverage. We'll be right back with more, after this short break, thanks for watching.