>>We work with and we cover some of the old guard, older companies like Dell EMC, HPE, Oracle, IBM, Microsoft. And they're doing really good work pivoting and trying to be ready for this new wave. It's not just not a blockchain. It's just how the world works. Cloud, you know, IOT, but decentralized cannot be ignored. Are they ready? Do you think they're ready? Do you think they even understand what's coming and >>No, no, they're not ready. And it's not, to me. It's not even about just blockchain. I mean, blockchain technology they can adopt. The bigger issue is digital disruption and digital disruption is all about the data at the core of the organization and, and business models that are built around data. And if you think about the history of companies, it's human expertise and data is bolted on, and we've seen this time and time again. But if you look at the top five market cap companies, Facebook, Amazon, Google, et cetera, they're data companies. Data is at the center and they take human expertise and wrap it around there. So the future is going to be about innovation with data, with artificial intelligence and cloud economics, and the old guard doesn't have those things. Blockchain fits in there. To me, blockchain is about building out a new distributed web and on top of the old web and rewarding those who are building it. So it's a new form of open source where the builders get paid.

>> Narrator: Live from Nassau in the Bahamas. It's The Cube. Covering Polycon 18, brought to you by Polymath. >> Welcome back, everyone, this is The Cube exclusive coverage at Polycon 18, put on by Grid Capital and Polymath, of course The Cube is independent publishing, digital TV and research. Of course we're covering all the action this year in the crypto-space blockchain, crypto-currency token economics. Big news here with Polymath is announcing a partnership. We've got Trevor Koverko is the CEO of Polymath Amir Kaltak, CEO at Lexit. You guys just came off stage and announced a partnership. Your ecosystem is growing, you guys are enabling platform. Talk about the relationship. >> You want to start? >> Please, I insist. >> Alright, fine. So awhile ago we just realized that what Trevor and his team are doing is just fitting right in what we do. We, the marketplace for M&A, helping to liquidize assets, and a security token, in its purest form, is an asset. So we want to help, we want to work together and create an ecosystem in the future between Polymath and Lexit, that is basically the thing that we want to figure out and how to do it. >> Yeah, no, we're big fans of the project, and more importantly the team behind the project. That's always what we look for when it comes to any investment, or purchase, or partnership. We're really excited. >> This is really a great sign for you guys. Congratulations, Polymath and Lexit, you guys are growing companies. This is the magic of platforms, right? You guys have collaboration, ecosystem partners really become instrumental for you guys, so it's a good sign. You get the leverage, the platform, you get some time to market faster, time to value, this is what it's all about, right? >> I believe that security tokens are going to be a big part of our future revenue on Lexit itself, and I can't miss out on that one, and I'm happy that we meet at that early stage, so to say, where everything happens. Where we set the path into the future. So let's see what happens. >> Amir I want to ask you, as someone who's partnered (inaudible), why Polymath? What was compelling for you? What was the reason? Obviously they have a secure token, so it's a platform, and it's a trend that's your friend right now. So why Polymath? >> There are multiple ones. Trend isn't that right, but the thing is, I'm old school, right? If somebody I know and trust tells me this is a great person I need to talk to, this is a great project, then I do it. So, Tim Frost of Taurus Solutions was the guy who connected us in New York on a brief meeting, and now more and more, and so this is how we started. And I go with my gut feeling. If I see a sincere man, I see a sincere man, and I would like to work with him. >> Great. Platform-wise, API's, how's it going to work? You guys, can you share any details? I missed the announcement because we were doing Cube interviews. What was announced on stage? >> For me, this is kind of what I've been echoing all week. It's all about building the components of this ecosystem. We're trying to, literally, re-imagine Wall Street, and to do that it requires new forms of structure formation of capital. So we have private equity, we have mergers and acquisitions, we have venture capital, and with Polymath we're just trying to be the base layer that other exciting projects like Lexit can build on top of. >> What are some of the most important things in the platform, Amir, that you like? Just get under the hood a little bit. What's, what about Polymath is going to be a good deal for you guys? What's the key? Is it saving time, is it the certain things on the platform? What specifically about these guys- >> Free t-shirts? >> Free t-shirts definitely. And after that, the free t-shirt contest. What contest? I'm kidding. No, to me it's like, look, you want to have a security token, right? And then there are multiple jurisdictions, and there's a lot of legal compliance. It's a mountain of work in front of you. Those guys figured out how to do this simple and reliable for all of us. >> Kind of like what you're doing on the M&A side, except they do it for the security token. >> Sort of. >> Always breaking down barriers, that's the name of the game. That's the definition of an entrepreneur. >> Removing the blockers in front of you is the key, and not to waste time on management cycles, on things that someone else's doing. That, to me, it good partnership. Sounds like that's what you guys are offering, right? >> Absolutely. >> Absolutely. >> Alright, guys, well thank you for sharing the news. A final word, >> John, thank you. >> What do you see as the outlook, partnerships, you guys going to make some money together, you've got to build the product out first? How's the sequence, the order of operations of the partnership? Share the quick overview, then we'll end the segment. >> So we have a lot of work ahead of us. And right now it's about getting Polymath, the demo is out, the alpha is out, it's live, you can use it. And my biggest party right now is getting the application layer to the market, and that simply means a user interface, drag and drop, point and click, and that is my life right now. So once we get that out the door, these guys are ready. >> The thing is we are launching globally, full developed, since two years away in develop, in June. And soon after that, we will hopefully be ready for their platform. But, speaking of that, it's public now, but we will work closely right away to figure out how to optimize everything in between our systems. So it's going to be an ongoing process where we to be careful with resources, of course, but it's going to happen during this year, I hope. >> Amen. >> Well congratulations on the building blocks of success, you've got to start with the core. This is The Cube bringing a live coverage from the Bahamas. Big news here on the partnerships of the two companies, Polymath and Lexit. Look for more coverage. We'll be right back with more coverage after this short break. (techno music)

>> Announcer: Live from Nassau. (electronic music) Live from Nassau in The Bahamas, it's The Cube, covering Polygon '18, brought to you by Polymath. >> Welcome back, everyone. It's The Cube's exclusive coverage live in The Bahamas for Polycon '18. This is where all the action is, cryptocurrency, Bitcoin, blockchain, you name it, token economics, a paradigm shift of epic proportions. This is a decentralized internet. It's impacting the world. Missions, technology, applications, and all sectors. Our next guest, Shawn Owen, CEO of SALT Lending, serial entrepreneur, killer idea, so simple, so stupid simple. No one's doing it, he's doing it, lending cash for Bitcoin and currency. Welcome to The Cube. >> Thank you, it's good to be here. >> You know, there's two things that I love, the crazy ideas that everyone says is the dumbest idea on the planet that becomes billion-dollar opportunities, then something that's so simple and obvious that no one does because either a bag at your dogma or other interests. You're in kind of both. You got the simple idea, lending. Take a minute to talk about SALT Lending and your innovation that you guys do on the business side. >> Yeah, you got it. Everybody here at these conferences, or hopefully, people that are watching, have some interest in cryptocurrencies or blockchain, and probably accumulate some value in that currency, or the asset class. Once you do, then you have options, that you can either continue to hold that, or you can sell it. We're opening up a new market for the ability to see that as property and borrow against it. In fact, the technology makes a perfect form of collateral. We have all this ability to program in smart contracts. You can write in the rules. You can make it highly secure, yet nobody is doing it, so it's one of these simple things that, as this market emerges, became kind of obvious as a pain point, which is, I go to the bank, and I show them my personal financial statement, and they look at Bitcoin, and scratch their head. Somebody's got to bridge that gap, so we're building technology that ultimately should be used by banks or financial institutions to bring this together to where you have that ability like you would with any other type of property. If you look at any other type of property, you can lend against it, somebody's figured out how to, whether it's minerals, whether it's land, whether it's cars. Really now, we're doing that for cryptocurrency. SALT Lending stands for secured automated lending technology, so it's very much a technology-driven company, yet it's foundational in lending. It's just very simple to understand because it's the oldest business known to man. >> We covered cloud computing from day one. It's interesting, automation wins the day. We're seeing a lot of things where automating M&A process, we talked to those guys at LEXIT. You're doing something here with lending. You're just so simple. Here's the question, if I have Bitcoin, and there's a lot of whales walking around here, people, billionaires, millionaires, a lot of people have made money over the past couple of years. Certainly, if you were in it 2011 after, you're a whale. They got value. I put it up, and I get cash? Is that how it works? >> That's right. Everybody has assets that they want to hold onto, that are precious to them, whether it be gold, heirlooms, art, Bitcoin. Then they have currencies that are things that they want to spend quickly and/or just don't even think twice about it, I'll pay for a cup of coffee, a bottle of water, whatever. As the world moves into the blockchain era, as all value can be recorded on distributed ledgers in blockchains, you have this new way of thinking about everything. You can imagine a wallet where you have all the things you really care about, and you can dynamically decide what your currency is based off where you're traveling, where you want to spend, what you think is happening with inflation, depending on what your interest is. Maybe it's video game points you want to spend in the future. However, having that scale, and saying, at any point in time, I want to hold onto this, and I want to spend more of that, there's a partnership, right? A really easy way to think about that is, how can I leverage what I have, which is portfolio lending, or any type of lending, into more of the currencies I need, whether it's, I need to go buy a house, I need to buy a car, I want to buy more investments? We see it as a very powerful tool, and almost a necessity, but then, on top of that, just extremely cool in how you could imagine the future of finance in this world. >> Yeah, it's a total game-changer. I love what you're doing. I think, getting the fiat conversion really gets immediate liquidity in a currency that people can spend. If someone says, "Hey, I don't want Bitcoin," great, I want to buy a boat, or start a business, I need to get some fiat, I pledge up my coin. >> That's right. >> Now, you go valuation issues, so I'm assuming you have math behind this that says, "Hmm, but if Bitcoin drops..." >> Yep, that's the thing. We really solve a couple fundamental pieces of the blockchain that, at its core, are difficult for people to do well. One is security, and the other is user interface. When you wrap that into a product, and you build out the user interface and the security, suddenly, it becomes a lot easier. When it comes to the risk mitigation, it's simply over-collatoralized. We're going to pitch you as a borrower, and say, "You're already probably storing all this "somewhere anyway, in a wallet. "Why not put it in a secure wallet, "drive the loan to value ratio way down "so you're only borrowing what you need "when you need it, you don't bring out "these giant loans for no good reason, "you just borrow what you need, "the interest rate becomes a lot lower, "and then you have extra collateral for the volatility?" Ideally, that's the scenario. If, in a world where it's very volatile, and you're at a higher loan value rate, then that's where we give you options. We say, "Hey, would you like to sell some of this, "or would you like to add more? "Would you like to prepay your loan if not?" There's always the option for somebody to correct the loan instrument, but that's the other really cool part about a smart contract, or a smart written language around the instrument itself, is that you can get a little more creative. Instead of just having legal paperwork, you can say, "Let's put this into the code." It becomes very dynamic in the ability for it to cure, the instrument itself, to stay course. >> Software money, I love this. Let's go down, talk about the token that you have, SALT Token, and that's for the borrower, or the lender? >> It's, right now, the borrower, although it will expand into all uses. It's effectively, as people say, it's powering the network, or it's the gasoline behind it. It's our internal currency. It acts as a store value in the regards of how you would think about a serial number. If I have Microsoft Office, and you buy a serial number, that's the key that lets you in, and it tells you how much of the product you have. If you have 20 or 30 of them, you can give them to your employees, or you could redeem it for some other value. We just think that tokens actually do a better job of that recording 'cause it's now put on a permanent ledger. You have the permanent auditability of it, than just a serial number in a private database. >> I think you got a great solution because the alternative to not having it is essentially, get a liquid on an exchange, which some people might not want to do. Then also, where do you do it, right? There's all kinds of dynamics on the exchange side. Here, I'm saying, I'm long on Bitcoin, but I need to get some working capital for whatever the project is, so you're there. Is there any competition? Is anyone else doing this? >> There's no competition yet. There's definitely some people that are out there saying that they are, and I would be careful. Some of them may be legitimate. We've seen a few that are scams, so always be protected, and be wary. >> John: Give an example of what a scam would look like for the people. >> A scam would be somebody who says, "Hey, we're doing an ICO," and you start looking at it, and it looks exactly like what we've built, except for they're, maybe, in Russia, and you can't actually contact the people, and they don't have any banks behind them, or any kind of regulatory framework. >> They're spoofing your brand. >> Yeah, we've seen a lot of that. We've had a lot of phishing attempts, and people trying to spoof the idea or the site, and that's a little worrisome, but there probably will be competitors. It's a big market. >> Yeah, that's going to happen more and more, more of those spear phishing attacks too. Great, and outlook for you guys. Where are you guys at with the company? Talk about what your needs are. You hiring? What's going on with the operation? >> Yeah, we're constantly hiring, looking for anybody who's got great financial background and wants to be in the blockchain space, and/or developers, constantly looking for blockchain-focused developers, people that either want to learn the space, or already know the space, either way is fine. We'd love to talk to you. We've issued $30 million in loans in the states we're approved. We're rapidly expanding that genre of where we can lend. We're working to partner with banks, so if you're a bank, or you're a financial institution, there's a lot of capital money at this conference, we'd love to talk to all you guys because there's an opportunity for us to give you an indirect exposure into the market. >> It's good for the big whales who have a lot of currency, a lot of value, to pay it forward in the mission, in the community. They could be lenders too, right? >> Very much so, yes. >> Wow, so what states aren't you in? 30 million, that's a good number. What's your top list? >> The next on the list that we're working towards, we're really close to Texas, we're really close to California, really close to New York, really close to Utah. Those are some big ones. Lots of interest in Puerto Rico, so we're heavily focused on getting there, and it's just a road map, a heat map. There's a lot of interest in Europe, so we're going over into Europe, lots in Canada. >> Shawn, thanks for coming on, sharing the project, your success. Love your idea, again. Disruption continues. The stampede is coming behind us at Polycon. That's their logo. Polymath is the company behind this event. Of course, we're The Cube, we're independent, we're bringing you all the action here at Polycon '18. More live coverage after this short break. (electronic music)

(upbeat electronic music) >> Narrator: Live from Nassau in the Bahamas, it's theCUBE! Covering Polygon '18, brought to you by Polyman. >> Welcome back everyone, we're live here at theCUBE in the Bahamas, this is the live coverage in the Bahamas for Polycon '18, I'm John Furrier, this is a wrap up of our day two. We're going to do show wrap up, brought in special analyst guest, Dave Vellante, they had to jump on a plane, head back to Boston, get out before the snow storm, to head to California. Al Burgio and I are going to wrap it up. Al, serial entrepreneur, founder of FuseChain, and CEO of FuseChain and DigitalBits, an open source project, had you on yesterday, we also were out scouring last night and getting all the data. You were the only Cube alumni at this event, now we add in another 20, good success, good to add more, thought leaders into the family, with Polycon, but big story here is the security token. I mean, I was talking to the founder of Polymath, and Genevieve with Grit Capital, and just my take is, looking at the ecosystem, it's been a sigh of relief on one hand, oh my god, finally, documents we understand accredited investors, no scams, a feel for a good, solid foundation to get funding, no rush to do a utility token, because although utility is super important, people were using utility tokens to get funding, using that money and running as fast as they can to build a product, sub-optimized kind of role there, so again, big news there. >> No, absolutely, it's been, it's the natural evolution and companies like Polymath and Secure Ties and others are helping with this natural progression and birth of the security token. There's clearly a lot of people here interested in that, lot of action, lot of new announcements at the event as well. >> John: What jumped out at you for news announcements? >> The news, I guess. >> John: Ecosystem news is big. >> If we go with the latest today, announcement with Barbados Stock Exchange, folks at Polymath, it's interesting. These emerging markets embracing new technology, it's the next wave and a lot of capital is going to be raised this way. >> What did you learn last night, I mean, first of all this event just for the folks watching, was a real interesting event, it was a 400 plus attendees, really an industry conference about, what the thought was, you had whales, billion dollars of whales here, called whales, which they have a net worth in billions and millions, hundreds of millions, then you have investors, variety of investor types and then entrepreneurs, all coming together. I heard a lot of different things last night, what did you hear? >> You know, it's interesting, I mean a lot of people were sharing their perspectives. Some are presenting different perspectives of the future, (laughing) >> Come on, spit it out! >> Others are, you know, really, in some cases, stating the obvious. But there's definitely a strong ecosystem that's coming together here, strong alignment on a number of things, irrespective of where everybody's sort of come from or the industry that they're in. A lot of people want to see this new ASA class, come and grow and be very successful. So, you had YouTuber influencers here, you had CEOs of well-established organizations, and up-and-coming CEOs of a lot of these blockchain emerging companies. There's definitely tremendous synergy amongst some of them as well, in terms of how they're sharing perspective, and how they're, in some cases, working together. >> Liquidity has been a big option, I heard people talk about liquidity. What's your take on that? What's your observation of how that's evolving? >> Well, I think there's a huge opportunity with areas where traditionally, they've lacked liquidity. Or there's been minimal liquidity, tremendous friction and challenges in terms of being able to leverage what one possesses. Blockchain really presents a huge opportunity to change the game there, as it relates to DigitalBits and what we're focused on, we see a huge opportunity in all things loyalty rewards. There's in a lot of cases, these centralized organizations, you can kind of think of them like a central bank, and people have had these difficulties in earning points, if it's a pair of golf clubs you want, you maybe have to earn points for maybe three years and you get tired after a year. >> That's your venture. >> Yeah. >> I mean FuseChain and DigitalBits specifically is solving a big problem. >> Big problem, there's tremendous lack of liquidity in all things loyalty rewards. >> What's your angle of attack there? Obviously disrupting the pre-existing and somewhat fragmented loyalty programs. I mean, I'm in so many, I don't even use the airlines things anymore. I get so many points, I never use them, I try to use the good ones that I use a lot, like Southwest or whatever, as an example, I use because my kids need to fly to an event or soccer or whatever. But other ones, I've lost all my points. I don't even know the number. I mean, where the hell is it? >> Well it's. >> What email address did I use? >> It's about perceived value, right, maybe you started off with some degree of enthusiasm and had a higher perceived value, but then towards the end it goes to nil. 'Cause it's really. >> John: But I can't get (mumbles) with my points. This is the problem I want to ask you. >> Traditionally, what you see now, a few weeks ago we saw announcement by Singapore Airlines, announcing by August their existing loyalty programs and we place them into a blockchain. We're seeing examples of this almost every week now, companies are embracing blockchain technology and what this allows for now is a more frictionless transfer of points. So, for those companies that are embracing blockchain technology, if you have points, and yeah you could potentially, after you have X number of points, go and redeem them for something you like, but in the meantime, you get discouraged, maybe you love Southwest, but maybe some of these other programs, you could trade them and hand them over to someone that actually could take advantage of it and get an alternative asset that you have a higher perceived value for. >> Digital currencies and gaming has been around for a while. We've seen the young guns get that, that's like a fish to water. Obviously loyalty has different assets than old school techniques, old stacks, technology, if that. So anyway, I ask you the question, how is blockchain disrupting the loyalty program that is the massive billions of dollars being spent and earned in that market? >> A third of points never get redeemed. There's a huge problem with many corporations, they have, as they're issuing points, it's a liability on their balance sheet. More points get issued, it's a hemorrhaging issue. It could potentially create solvency issues for companies. There's actually been professors from some reputable organizations that have really done a tremendous research in this area, it really evolves nicely into what blockchain can do. >> Like, give me an example, I mean what is the disruptive nature of it? Is it storing of the value? Is it trading on that value? Is it, I mean what is the real one thing that blockchain does to the loyalty program? >> The fact that it allows for a more frictionless transfer of points, so for the programs that are tokenizing their points on a block chain, it empowers the user to be able to directly transfer those points. >> So you guys of FuseChain and DigitalBits, you're tokenizing loyalty. >> We're supporting organizations, our big mission is to support organizations that have either existing loyalty programs or wishing to create new loyalty programs to be able to tokenize those on chain, and the ability to then allow the consumers, the users of these points programs, to, in addition to the traditional uses, redeeming them perhaps in a rewards store or what have you, the ability to transfer them for other assets that they like. >> John: So if I understand this correctly. >> Other points that they like. >> The trend that you like, or would like to see continue or happen, is retailers or loyalty programs would tokenize themselves. So, there'd be, literally, thousands and thousands of loyalty tokens and you would be the platform to support that? >> That's correct, absolutely. So, I've used the sort of red hat analogy, we have FuseChain as well that's really focused on helping support enterprises that maybe are struggling to spell blockchain. But they see all the value. >> That's everybody. >> Well from a technology perspective. Similar to Linux being born, enterprises needed to go to companies like a red hat, to support them with the integration, maintenance, so on and so forth of such technology. We're focused on having an evolving ecosystem of other organizations that can support enterprises that have loyalty programs, consume blockchain technology. >> You're a tech entrepreneur, I'm a tech entrepreneur. I have a media business, you're building another business, you sold your last business, you're very successful. You and I always talk about this, but I want to ask you here live on theCUBE, as a tech entreprenur, what is the opportunity that this ecosystem of tokenizing your business, using blockchain, how do you look at it and how would a solid tech entrepreneur look at this opportunity to integrate it, a new enabling technology, what's the orientation, what's your view on how tech entrepreneurs should look at it, and how do you look at it? >> Well, so, if we just, as it relates to the liquidity issue, this is a very powerful thing. Right now, perceived value for many points programs is very low. So, if the perceived value, you solve the liquidity issue or you create technology that can help solve the liquidity issue, the opportunity for the perceived value to be perceived in a more optimal light, everybody kind of wins. The merchant, the business that is issuing these points, they now have a more desirable asset that they're issuing, and as a result of that, consumers have an ever-growing desire to want to be part of these programs and earn points. So this is, it's fascinating when you start to think of it, in terms of. >> Technology is applying, 'cause it's the application of societal impact, whether it's a retailer or a non-profit, tokenization is happening. >> Absolutely, and it's happening obviously, not just in loyalty rewards, we've seen it happen, starting to happen now in other spaces, and with different. >> John: Your big takeaway, obviously. >> ASA classes. >> You've done a lot of work, and I know you can't talk about it 'cause you're in start-up mode and you're doing some financing right now, but just generally speaking, and I'm totally, the landscape of this ecosystem, health-wise, feels like the security token has been a good thing, utility token is still evolving, under observation, obviously SEC and other regulatory challenges, good, bad, ugly, I mean still scams out there? We're hearing the community loud and clear, we're going to stamp out the scams and flush that through the system, as fast as possible. Your take on this ecosystem? >> I think those that are taking their time to build great technology and doing it at the right pace will build great products and ideally do it at such a rate and in such an order that they'll stay out of trouble. (laughs) We're seeing a lot of great entrepreneurs come together, surround themselves with their own ecosystems and building great platforms. I think where we see others that are moving a little too quickly, they might trip on their shoelaces. >> Yeah and people don't, I mean the general consensus is "You're going to move fast, but you don't want to be in jail." Literally, I heard that quote here on theCUBE. (laughs) Investors we've been meeting, we've had on theCUBE but also we've chatted, I know I've seen you chatting, sidebars, I've had a lot of sidebars, Dave has as well, conversation among investors, not necessarily with you, I know you can't talk about it, 'cause that's, it's a hot deal, but I mean, in general, generally speaking, what's the conversations in the investor landscape that you're seeing and hearing here? >> Its interesting, everyone is trying to find their own point of view or speculating in terms of what's going to happen next. I've heard comments in terms of arbitrage as a result of income tax, people realizing that transferring between alt coins is actually likely taxable, and accountants making new investors in the space aware of these things, and having to potentially sell to be able to pay that bill. Then there's others where a lot of us are seeing this as an emerging technology, the actual use of certain, let's say, utility coins, it has not yet been demonstrated. That doesn't necessarily suggest that a particular project is bad, things do take time, I mean, we saw in the 90's with the internet, I mean, remember starting in that space, I call it the dial-up modem era, (laughs) You know, but we had these big visions of video, and theCUBE could not be possible at that time. But the vision of a Cube could be, you know, a wonderful thing, people could've bought into that. You kind of ride the trend, evolve your technology, and then you disrupt and you help change the game. >> Final question, obviously your business is, you're doing some things here, how did the show go for you here? You feel good about it? >> Absolutely. Obviously this is not like an Amazon, some of the other events we've been at but. >> It's more intimate. >> But. >> John: But there's money here, there's billionaires here. >> Absolutely, and look at any of those type of events, I mean they start with thousands, and tens of thousands, and the next year it's twenty thousand, we're going to see that kind of growth in this space as well. It's great to be involved in it early, but there's definitely quality, high-profiled individuals here, high net worth individuals, and they're investing their money in this space and they're going to help drive it forward. >> I remember the first show we did with Amazon and meeting Andy Jassy for the first time, first of all, really like him a lot, sports fan like me, but he's also really smart, a great operator, he made a comment that some of the best companies are ones that are misunderstood in the beginning, obviously we run a different kind of media business, people don't really understand us, cryptocurrency and blockchain is funny because everyone understands it, but doesn't understand it. (laughing) They understand how big it's going to be, and there's money involved, so that's the key learning that I had this week, was, yeah, we see the big opportunity, we can see money being made, but people still don't truly understand what it is. If you talk to all the smartest people, whether it's Jeremy, that came on at 26 years old, to Bill Tie, they say, "We're learning, everyday." The women in tech, the CryptoChicks came on and said, "This is learning environment, "this is still not understood." >> Absolutely. >> "And this is the big opportunity." >> It is a huge opportunity. In the early 90's, people didn't understand the internet, and there's a classic program episode of The Today Show, and I think it was Bryant Gumbel trying to understand what is the internet, you know, and so forth. Fast forward, here we are. Fascinating things, there's smart individuals that can see and embrace the vision right away, others were scratching their head but eventually, we'll all get there. (laughs) >> Al, great to see you and great to see a Cube alumni here too, I'm glad you were here, 'cause I get to know at least one person that I know intimately of Cube alumni. We added 20 more new Cube alumnis, the sun is setting here in theCUBE, day two of wall-to-wall coverage, I'm John Furrier, really excited to have been part of this event, it begins, kicks off our 2018 cryptocurrency tokenizing the world, blockchain, top events, theCUBE will be there, theCUBE is there, it's relevant, we're going to be tracking all the signal, and extracting it from the noise and sharing it with you. It's a wrap up of the cryptocurrency token economics decentralized internet at Polycon 18, here in the Bahamas, thanks for watching. I want to thank all the crew here, great job, and you guys watching. More to come! Stay tuned, check out siliconangle.com, thecube.net, and wikibon.com, of course, CubeCoin coming soon, stay tuned for what we're doing love to tokenize that business, everyone's doing it, it's really relevant and thanks for watching. (upbeat electronic music)

(Electronic ambient music) >> Announcer: Live from Nassau in the Bahamas, it's The Cube! Covering Polycon 18, brought to you by PolyMath. >> We are live here with The Cube's exclusive coverage at Polycon 18. It's a securitized token conference, but really, it's about cryptography, cryptocurrency, blockchain, token economics. The whole community's here, investors, entrepreneurs, and startups. We have two great guests here from CryptoChicks, Nataliya Hearn and Natalia Ameline. Pioneers in the industry doing something really compelling, the first ever blockchain hackathon coming up in April. It's historic, it's the first. Welcome to the Cube, thanks for joining me. >> Thank you for having us. >> Thank you for having us. >> So I love the t-shirts, CryptoChicks, I want one, a few. Can I buy them on the website? Can I get them made? >> Yeah, you can, absolutely >> I want my daughters to have those immediately, so. People in our community know that the Cube's really been... we love women in tech because there are so many smart women out there and it's awesome to showcase. But beyond that, it's this real technology being innovated. Talk about what you guys are doing. You have a really important mission, had great success, with CryptoChicks. This is like a movement inside this community, but it's also happening all around the world. You guys have big plans. Take a minute to explain the group, how you guys are operating, how it's going, and talk about this big event. >> We started this group because we realized that women are underrepresented in the space, and you don't need to go far; look at what's going on at this conference, right? Even though we are pleased towards the increase in turnaround of women, in events like this, but we still have ways to improve. So we started this group CryptoChicks with the sole mission to increase, improve gender balance, and increase participation of women in the community. And we're doing it in a variety of ways, but largely what we try to do is we try to create an environment where women feels safe to learn. It's small classes. Where women come in, they can ask questions, they can feel at ease, and I think it's very important because not every woman feels comfortable getting up in a big crowd and asking questions. And I think what we do is really helpful for a lot of women this way. >> It's very inspiring. Also you guys as co-founders Nataliya we were talking about you were a professor, and education's a big part of it, but also human nature right? So talk about the dynamic and how you guys approached that because there's different styles, both men and women and we got to kind of get it going together, I mean, you guys have got to get critical mass. Now the good news is, people are talking about it, and it's happening, and... >> Absolutely, I think, kind of knowledge. People hear stuff. You know I had kind of interesting... I was talking to a woman who was in tech but her English wasn't great, and all this kind of stuff. So she called it BigCoin, which I love it. (laughs) Because it is kind of a BigCoin you know? Out of all the coins it's the biggest coin. So stuff like this. If you go to meet ups you would have in a room of a hundred, maybe one or two women. And then they'll go, well what's a wallet? What is all this about? Just even the basic, baby-stepping, through the system. And then I think well we're focusing on only one part of it. The other part of it is that we're creating a really new level of democracy. And that element, I think, that's why we need the education. An education probably, while women is great, but we've got to start a little earlier. The interests should come at least in high school level, where you go well, What is debt? What is value? How do you define currency? Actually all the stuff we're doing at the conference here, in terms of securities. Is it a security? Or is it not a security? How do you define? So all of that starts early on. >> I've been having conversations at many levels about this, at Sundance Film Festival we talk about the role of technology. So it used to be, you know, the Boys Club. That's now changing, which is great, but also there's a trend of multidisciplinary things. You mentioned economics and all these things. So the world now is becoming integrated. So math for instance, there's a lot of math geeks out there, male and female. You don't have to be a coder per say, right? There's certainly more coding opportunities, for women, but it's not just one thing. You can do anything. Fifty percent of the population is women. If this is going to change the world, which it is. Fifty percent of it is going to be impacted too. So they have to have a role in what's going on in the community. So it's natural it should happen, I mean... >> Absolutely. And actually one of the reasons the Hackathon, the reason it's first all women Hackathon in Blockchain, and we actually have two streams. And one stream is for hackers, who are into the nitty-gritty of, sort of, the coding part, and we actually have support for them as well, in terms of learning. And then we also have the business track, where if you have an idea, and you think that Blockchain would be a really good avenue to take that idea, so you could pitch your idea during the Hackathon as well. >> And just to clarify, this is the up and coming Hackathon that you guys are doing. All women. What's the date? Share the details. Share the details. >> So it's going to be actually a conference and Hackathon, we're going to run it parallel. Conference will start on the 6th of April and going through the 8th of April, and the Hackathon will happen at the same time. >> And where is the conference going to be attended? >> So the conference is taking place in Toronto, we're partnering with our venue partner MaRS Discovery District. So it's an absolutely amazing venue in Toronto. And also our partner MaRS has a history of, you know, promoting the women in technology. So it's a good partnership for us. And it's going to be, the Hackathon is going to run about thirty hours and hopefully it's going to be a lot of good connections coming out of it. I think one of the things that we want to accomplish in this Hackathon for women is to make it easy for them to get opportunities. So most importantly we want to connect them with employers. And that's a great venue for that, because when we travel, we have a lot of the times owners of the companies will approach us and say you know, we're really looking to diversify our team. Can you help us? Because women just don't apply. I think that's another way we're trying to really infuse more women into the community. >> Open up channels of opportunity, it's not just having it be like a job interview. >> Exactly. >> So networking, demonstrating skills, style. Are you guys seeing the formula that works with people, with women? Because we see different conversations around this, you know. Take a certain approach, posture this way, be different. Eventually, I interview a lot of women that are saying, I'm going to be hardcore and some say, I just want to wear high heels and I'm a fashion person, that's who I am and why would I want to change that just because I'm a woman? So there's different views on this. Is there any pattern, or formula that you would suggest or observe? >> You know I think we live in a really fortunate part of the globe where we can actually do what we want to do. There aren't too many places like that in the world. And I think that we've got to be really thankful for that, and then it really is, you know, we are empowered to create opportunities. And in this space, it's a really young space. I mean it's really fundamental. Some people say well we've been in it for ten years. Really, most of the people have been in it for, you know, couple years. So don't think, women shouldn't think that well, there's all these guy and they know what they're doing. They also don't know what they're doing, everything's changing. Every wallet and every structure that is being created today is going to be a little different tomorrow, it's a process. >> If you say you're an expert about something here, then you're really a pretender because everyone's always learning. And the real pros are humble about that. So that's one observation. But the other one is, and I want to get your reaction on this because I go to a lot of events. Especially in tech. Where a lot of male-dominated, you know, enterprise here and there. This community's very mission oriented and I don't see any signs of lack of inclusion. So I think the door is open at least my perspective, and certainly we've been covering a lot in the space, Bitcoins in 2010 and crypto and everything else. But being here I see open doors. I can say the other verticals, not so much. Here, it seems open. Do you guys agree with that? What's good about that if you do agree, how do people walk through those doors? And if it's not, what needs to happen? What's your observation? >> I think it depends on the personalities a lot. I find that some personalities, the door is open, and will just walk in. Some personalities are, you know, I want someone to bring me and introduce me, I think it's like this everywhere. I think in this space I mostly see that it's friendly space, pretty happy with it, but I also think there could be some improvements, because quite frankly sometimes the culture is not necessarily that welcoming. For example, you go to the chatrooms on Facebook as an example. A woman makes a comment and after that you'll see lines of guys responding, what are you doing here? And why did you say that? >> Really? >> Yeah it's very common >> It's IRC culture, really. >> Yeah, so it's you know, some women are perfectly fine with it, right? And for me, it's like okay, you know, everybody's entitled to opinions. But some next time would not comment, right? And I don't know, maybe guys have a little bit thicker skin, and they take some ridicule better, I don't know, but I think there's still ways to make the culture a little bit more open and I guess comforted. >> Nataliya, do you agree with that? What's your take on that? >> I think it really starts with upbringing, again, and how we raise our children. I have 3 sons, so I raise them in the way I'd want to be treated, in an environment. I'm an engineer, so I've worked with men all my life, and this is not unusual for me. I've gone to conferences all my life, thousands of people, twenty women. >> Yeah you've got a thick skin, you guys have thick skin. >> And you know, in a way yeah, it takes guts, like you said before, to wear high heels and a skirt and really stand out when you're already standing out. So you've got to put your head up you know? And you walk into that room. >> Be yourself! Right? But don't be afraid. I guess what you're saying is, you could have whatever posture you want to have, just be proud, keep your chin up, as they say. Alright, so let's talk about, you mentioned, you guys are moms. So like, I have four kids too. Two daughters, David Vellante has four as well, the same. These kids that are born now are growing with digital natives, some are kind of pre, post Facebook, pre Instagram, Snapchat, it ranges in the spectrum. Certainly gaming has been a big part of the culture of the youth. So people who are digital natives, and or have come on with the connected social world that is, they are doing things differently. So I wanted to get your thoughts as parents, I get asked the question a lot: should I let him game? Should I let him code? What should I do? What's good? What's bad? There's no data other than kind of anecdotal or vision. I personally believe in gaming as a good future of work scenario, as long as you don't OD on it, and overdose on too much gaming. I think coding is the same. So I think this is going to be the tooling of the future, what do you guys think as parents about the exposure of technology? How do you do it? Is there a diet? Is there a recipe? I mean, what do you guys think? >> I think personally it's great. I think the younger kids get exposed to technology, the more comfortable they feel with it, and the more likely they are to become the next, you know, Steve Jobs and Bill Gates etcetera. And I think our society, whether some people like it or not, it's moving in a direction where we're becoming more and more technology addicted and dependent on it. Technology is everywhere, we don't even realize, that it's there. You know, you wake up in the morning and you look at the internet. You may like it or not, but that's the lifestyle these days. So I think for me, with kids, we need to give them freedom, and we need to observe. Because at the end of the day, I think kids are intuitive, they know what they're interested in, and we need to help them nurture their interests, so that they grow up, and they don't need to go to a job that they hate. Instead they do what they love. And that's how we're becoming a more productive society. >> And the learning online too is an opportunity to go nonlinear. Learn things at the scale you don't have to wait for the next class or semester. Your thoughts on this, Nataliya? >> Absolutely, I think every child has a gift, and I think it's parents responsibility to discover that gift. Instead of shoving your ideas, or things you didn't achieve in life into your children. >> That's called snowplow parent or helicopter parenting. >> So absolutely, and we are a technology-driven society, and you know, I'm an engineer so I'm a techie, so I've introduced my sons to a lot of things, but you know what? They've introduced me, and actually they kept me in this sector. >> I think the observational thing is really important. Freedom with observation. That's not monitoring, and surveillance, or helicoptering. It's really like, let him play, let him explore, let them have a good time. Understand it, but be mindful of what you're observing. And that's key. >> And yeah, too much of anything is not good. You know, you have to balance your sleep patterns, and all this kind of stuff, all of that has to come into a child's life. >> Yeah, intervention is required at some point, you know, when you see that the kid is shaking. (laughing) >> I always say to women in tech who are moms like, man, you have it so easy now, because you know how hard it is to raise children. Being a parent is super hard, and a lot of people look at that, need to understand that's how hard it is. It's really a wonderful thing. So thanks for sharing. Looking forward to following the CryptoChicks and covering the Hackathon, so let us know how it goes. Are there going to be any live feeds, or twitter handles, or hashtag, what's going on? >> There will be, and we'll let you know. Thank you for the opportunity >> Thank you very much >> Thank you very much for sharing, CryptoChicks here on The Cube, I'm John Furrier. Live coverage continuing, day two, of SiliconANGLE Media's Cube exclusive coverage at Polycon 18. We'll be right back. (Electronic music).

(upbeat music) >> Live from Nassau in the Bahamas, it's theCUBE Covering Polycon '18. Brought to you by Polymath >> Okay, welcome back everyone. This is theCUBE's exclusive live coverage here in the Bahamas for Polycon '18, put on by Polymath and Grit Capital. I'm here with the CEO of both of those companies, who have been gracious enough to let us come in and tap into the bandwidth, tap into the guests, and host us here at theCUBE's two days of exclusive coverage. We have great guests, Trevor Koverko, CEO of Polymath, really changing the game. Security tokens are really kind of driving great, fast, accelerated innovation. And we have Genevieve Roch-Decter who's a CEO of Grit Capital, funding it, being part of it. You guys created a great community. Welcome to theCUBE! >> Great, thanks for having us. >> Thank you. >> So, live coverage, thank you very much. We really appreciate the collaboration with you guys, great guests. But there's something magical going on here. You've got a big even, couple hundred, 400 people. But it feels like the early days of, when I was in my 20s, the computer revolution, PC, and then the internet came. People are doing deals. This is a very intimate conference, you've got whales, billionaires, you've got entrepreneurs, you've got folks from investment banking companies coming into the sector, young guns, all dudes and gals. I mean, This is a melting pot! >> We have professional athletes, too, yeah, no we've really brought together a cluster of different zones, if you will. I come from the world of the Canadian equivalent of Wall Street, Bay Street, and so we've got institutional investors here who don't have wallets don't have coins, and are learning about it from the top Crypto minds in the world, so it's quite magical. I don't think Trevor and I have slept in 60 days. We literally came up with this idea, it's supposed to be a very intimate setting of 20 or 30 people and it's ballooned into 600, mostly because Trevor has so many friends and is partnering up with a lot of them on his projects, so yeah it's been a great time so far. >> And Trevor you, by the way, you're not sleeping 'cause everyone's staying out til two in the morning. It's been a great intimate gathering, people are mingling. But they're players, they're not pretenders here. This is a really interesting group, people who are investing their time, it's mission-driven here. We talk about societal change, but there's money-making going on, too, you're powering that, I mean you've got to be exhausted, how do you feel? >> I call it the eye of the hurricane, this was like if you weren't here this week, in crypto, you're just not relevant, this is where you wanted to be. And it's all about the attendees, the caliber of the people that came just blew me away, very humbled by the quality of people that we had here, it's no surprise, we have a beautiful venue like here in the Bahamas, and at Baha Mar, and amazing people. Good things are going to happen. >> Community is a very important formula for success in this world, we've seen this movie before, in open-source software It started out as a tier-2 citizen, now it runs softwares tier-1 class capabilities, cloud computing has been amazing growth, crypto, same model, you know, it's emerged as the money, the value store, technology-enablement. What are you guys seeing as the pattern, 'cause honestly, people recognize that certainly in the in industry. If you don't you're going to miss the boat on this one. Most people who don't get it will probably miss the boat. But a lot of people are getting in, what is the pattern that's happening, why is this moving so fast? Is it the wealth creation, is it the money-making? Is it the technology enablement, what's you guys' reaction to the why? What's the why, here? >> I think it's a convergence of a lot of mega-trends going on right now, both of the technology and on the regulatory side. If you look at, you know, the exciting sexiness of having this liquid tokens that kind of feel like stocks, but are also utilities in the sense that you can use them to do certain things with, that's a big component of it. But I think another reason is just, there's a lot of strangling going on in the capital markets, where you have a lot less companies going public, you have a lot more barriers to raise capital, in a lot of ways. And this is kind of like, light peeking through the hole. Where you have new ways re-imagined ways to raise capital. So we're seeing just a convergence of a lot of mega-trends, I think. >> And a lot of pros are coming in, and they're either young pros that are learning and growing with this trend, the young guns, I call them, and then you've got pros coming in from other industries, whether it's banking, and other sectors, this is interesting. So the question I have for you, is the security token. This has been a big deal, a lot of companies have seen the ICOs on the utility side, certainly the SEC in the US has been really sending signals pretty radically, like hey, don't pump and dump, I don't want to see any, watch that advisor stuff, and oh by the way, show me the utility, how we test et cetera, et cetera. That the startups who have to build the future are trying to rush a utility token out, now have a safe harbor in the security token, and existing companies can raise money with the security token that are tokenizing a real business, this is a pretty important point. Can you guys share some color commentary on that? Do you agree with it, and then, if you do, share some color around this whole trend. >> Yeah, I mean, right now if you look today, there's two major categories of tokens as you alluded to, you have utilities on the one hand, and securities on the other hand. And the distribution right now is extremely one-sided. Security tokens are dominated by utilities. Utilities like Bitcoin, Ether, Ripple, they make up 99% of the total market cap of alt coins, so, where does that leave us? Well it depends, today it means all the action is in utilities, there's more upside, they're faster, they're simpler, I'm very bullish on utilities. But what's even more exciting to me, is the mega-trend the tsunami of real-world financial assets migrating to the blockchain. And that's what I see as the next sort of part two, second-wave of crypto, is real-world, tangible assets tokenizing and migrating to the blockchain. >> And you know what I think, you know the SEC kind of gets a bad rap in all this, but the rules are there for a certain reason: to protect investors, and I think that this industry is in the beginning it's a nascent, and you know, with Trevor's company Polymath introducing the securities token. Literally, I think you coined the word. It's growing up, it's an industry that has to, you know, it's going to have some red tape, too, right, and I think working with the regulators, and Trevor's company has done that, you know, befriend them, and be open-source about it, and communal. And, you know there's certain aspects about the regulations that are not good, and we don't want communication and the communities that have formed, Telegram's a great example of this, so there's a lot of these chat rooms that I'm in and literally people are sharing information about companies and teaching each other, and learning and that's great. But there is an assymetry of information sharing, that at some point, you know, we have to rein that in. But we don't want to lose the positive aspects. >> You could choke the innovation, if you put too much regulatory on it, the innovation won't grow, so you have to have a balance, I mean, that's what you're saying, right? You got to get through it, but redefine a new era. And the SEC in the US has not been too bad, I think they're just sending a signal, and I think they're not, And they can be hardcore. They could be harder core, I think, than they are. But thank God they're not, you want to let these startups figure out what to do. Alright so I got to talk about liquidity and funding. So, Grit Capital, you guys are involved in investments also, you're enabling partnerships at Polymath. A lot of people you're connecting into your system, we had one on earlier. The funding environment, certainly a lot of investors are here I talked to probably at least a dozen actively investing, different profile make-ups some go hardcore protocol under the hood, some are more business we're going to decentralize apps. Make-up, Persona, trends, can you share? >> Yeah! >> You know that world. Eight months ago, so, I'm from Toronto, I'm from Canada. Eight months ago, there was literally no publicly-traded blockchain company in Canada. And now there's probably, I think, 70, you know, new one every day, name change. But yeah, there's been a lot of equity raised. There's two companies about to go public actually, in Canada Hut 8 Mining, who's our sponsor here at the conference, and Galaxy Digital Michael Novogratz's company, and I think between the two of them, they've raised almost half a billion dollars in capital. Or, like market capitalization when they go public. Probably about 250 million in actual capital. But that's huge, those checks were written not by just by high net worth people, but actual institutions. And those people that are here today, they're good with writing equity checks, ICO checks and that is going to come. And I think the securities token aspect of it will give them a lot of comfort that they can write checks in those kinds of-- >> And how does Grit Capital, talk about Grit Capital. >> Yeah so very simply, we introduce companies to capital holders, investors. So I was a portfolio manager for nine years, and I like to say I was in the no game for nine years, 'cause when you're portfolio managing-- >> Now you're in the yes game! >> Yeah, your goal-tending, you're like trying not to let bad deals in, and that wasn't really conducive to my personality and now I'm in the yes game, I'm you know, I like this company, I'm going to invest in it, but I'm going to introduce them to these other capital holders. And it's a positive experience. >> How much is community involved in what you do? 'cause we're seeing obviously the pattern of kind of paying it forward, which is great culture, but also people are, you know help scratch my back, I'll scratch your back on deal flow, and also on participation, it seems to be a big part of the current rules of engagement, or implied protocol. Is that going on? >> Yeah, you know, look I think this is a very collaborative ecosystem, and It's has to be because by definition, open-source communities are powered by the people that make it up, and it's all about volunteering, about helping, about giving back, and it's one of the reasons I'm so passionate about this space. >> I think you should probably talk about your fund that you just announced that you're launching. And it probably plays into, so Trevor's network is global, it's extensive he has deal-flow coming at him all the time. >> Alright, so what's in the news? >> Yeah what are going to do with that deal flow? You holding news back? >> Yeah, I've got a bit of a brain freeze, I have so many announcements out there, uh, yeah we're doing a lot of exciting initiatives right now, and part of what I'm excited about, and also slightly intimidated by, is that there's just so much opportunity, there's so many key components of this new infrastructure that need to get build, that aren't in existence yet, that is easy to get, you know, carried away. But for me it's about prioritizing and finding out the real kind of high-leverage initiatives that are going to help us achieve our goals. >> And so you're putting a fund together to invest in the ecosystem, or is this for financial investment, is it a crypto fund, or what are you, what's going on? >> One of those initiatives is a securities token focused venture fund, this will be the first one that I know of that exists, and it would be to help our ecosystem get financed, and that's a big component of this marketplace is capital, is investors, is demand. And we just want to channel all of that to the best deals. So Polymath capital-- >> Ecosystem is important to you guys, Polymath your ecosystem is strategic, right? >> Yes. >> How do you see that playing out, what's your vision? What do you hope to unfold in your ecosystem? Obviously, people connect in the variety of things that you can help people with, and vice versa. How do you see your ecosystem rolling out? >> Well, part of it is I want an arms length organization that has its own kind of mandate, its own charter. And the way I look at it is, if you look at Ethereum, which I am very familiar with being from Toronto and knowing those guys kind of since day one. They opted not to do a venture fund, but if they had, it would have been literally the most, >> John: high performance fund ever in history? >> Of all time, yeah, just mathematically-speaking, so we don't want to lose out on an opportunity like that. And in the process of building another potentially profitable entity we want to also seed the ecosystem and help projects that we're excited about. Get the first check. >> Who are you looking for in your ecosystem? Is it developers, 'cause obviously Ethereum, we're Ethereum developed we're a ERC20 token, we love it. It's easy to work with, smart contracts are easy to work with, so it's clearly a developer market on that side, are you guys looking for the same? Is it a different kind of partner, what is some of the partner makeup that you hope to attract, in case they're watching now, why should they work with you, who are they? Describe the persona of your ideal ecosystem partners, or partner. >> For better or worse we have a lot of verticals that we have to build communities within, so those are the business community, we want leaders, we want action-takers we want people that can structure deals, we want legal professionals, that's a big component of the security token landscape, is the regulation is the exemptions, and the offerings, and the memorandums, and all the legal stuff, so we need a legal community. And then finally, most importantly, we need a developer for community, we need the best technical minds just like any other decentralized project, so that's what my full-time job is, when people ask me, is building communities with our broader community. >> Well I can totally give you props, one, because I know you're super busy, and you're drinking from the fire hose at all levels, and certainly the event's been great. I think a breath of fresh air, a sigh of relief from the world when see entrepreneurs, at least from the perspective of the entrepreneurs and the markets is that security tokens, finally someone just made a decision let's just use this security token as a way to get the funding and get set up, and not foreclose the option for, say, a utility token. Why rush and force a utility, needs to be built out. And lot of these utilities have really missed out because they had to run so fast to write code funded by a utility, that has a test. So I think you guys are doing a great service, I want to give you props for that. >> Thank you, yeah I would whole-heartedly agree, I think a lot of these so-called utility coins are actually securities masquerading as utilities, and you know, >> I think that's the game everyone kind of is realizing like, okay great, now you have the platform, so what's the update on the platform, the company? Take a quick minute to explain to the folks about Polymath. >> We are inundated and overwhelmed with demand right now. And we have thousands, tens of thousands of sign-ups on both the investor and issuer side. And kind of my goal right now on a day-to-day basis is to scale our on-boarding process so we can take all these issuers and give them a secure and robust token that they can fundraise on top of. And we are in the process of unveiling our application layer that's going to make that kind of self-serve process exciting and scalable. >> Well congratulations, and Grit Capital, genevieve, thanks for connecting, great to connect with you. Shout out to Bill Tai who made it happen. If it wasn't for Bill Tai and Genevieve, theCUBE would not be here, and of course Polymath supporting us as well. It's been great, so thank you very much! >> Thank you! >> Great event, and we'll keep on following you guys and thanks for coming on, sharing success. Final question: The craziest thing that's happened here this week, one, two, three, things that might have won? Craziest thing that's happened, could be good, bad, or ugly. Did someone fall in the pool? Was someone found on the beach? Share a funny story or two. >> We found a mermaid. >> there was a mermaid, yeah. >> A real, live mermaid, we actually found a mermaid. And we put her in the pool for the cocktail event. >> And we almost put Trevor in the pool as a merman. Just to balance it out. >> Merman, We're a mermaid-neutral company we have mermen as well, oh geez, what else? We had uh, a friend of our decided to get the jacuzzi suite at the top floor and uh, I don't know if you've ever seen the movie Scarface? But there was a lot of uh, opulence going on, which was a little more than I bargained for. And then Genevieve being the celebrity that she is. Umm, what do you think? >> Umm, I mean there's been so much, like, we've had literally 13 side-events within the conference. So drinking from a fire hose is an understatement, I would say, there's still more to do, we're going to Cabana pool party now so maybe, I think there's going to be a bull there, a stampede security bull there? >> Trevor: Oh geez, is there? >> And maybe the SEC, no! (laughs) >> Well, hey congratulations, you guys are doing a great service in the industry and I love how you brought together the inner-circle major players, really the community really admires that so appreciate your help. Okay this is theCUBE, live coverage in the Bahamas. More interviews after this short break, stay with us. (upbeat music)

(bubbly electronic music) >> Narrator: Live from Nassau in the Bahamas, it's theCUBE, covering Polycon 18. Brought to you by Polymath. >> Okay, welcome back everyone. We're live here in the Bahamas. This is theCUBE's exclusive coverage of the token economics world cryptocurrency blockchain, the new innovation that's changing the world. And of course, word on the ground floor, day two of coverage our next guest Amir Kaltak, CEO and founder of L-exit, L-exit, Lexit, called legalized exit, legit exit. He's automating the M&A process in a decentralized way. This is exactly the kind of value we see with cloud computing, and when you see automation and efficiencies, that's disruptive. Amir, congratulations on your awesome venture. Love your model. Let's get into details, because I think-- >> Thank you. >> You're demonstrating, in my opinion, where value is being created and then ultimately captured faster, more efficiently, because you're automating the M&A process. For people to get exit in a highly volatile, value creation, value capture world. Take a minute to explain your company. This is fantastic. Thank you for this kind intro. Hello, world. Lexit, in a nutshell, is M&A on blockchain, and I hope you guys will love it. What we do is we give you access to the world of M&A, which is currently a big boys club, and we want you guys to be all participating in it, from the small entrepreneur who just started out, who crashed his startup but created a great tac. He can sell it on it. The whole world's going to see it. Or to the seasoned entrepreneur, to the big entity, to the big enterprise, you can sell it on there too. You will be seen by all acquirers in the world, and at a penny of the cost, at multitudes of speed, you will be able to liquidize and asset your business. >> So we, Dave and I, predict that there's going to be a lot of liquidity going on at many levels, obviously. Token economics drives that, but in the startup world, you either make it or you sell it, or you put it out of business. In this world, as people start developing technology, the difference between a company and a feature might not be the same. So I might build the best app for social entrepreneurship, for solving world hunger or tracking the water supply through blockchain. And someone says, "Damn, I love that. I'm going to buy that." Now I got to go to a banker, I got to get legal fees. My choices are-- >> Yes, limited. >> Limited, hassle, costs cash. >> As a guy who just crashed a startup, let's take this example, because the majority does fail: over 90%, as matter of fact 96%. Now, you just failed, but you have this great technology you created, right? What are you going to do? You check your address book. Who might buy it? But it's limited too, because you just started out. You don't know nobody, so what you do is you go to a consultancy: M&A consultancy, the lawyers who are connected to this sphere. >> John: The gatekeepers. >> Yes, the gatekeepers. Big boys. >> John: And they take a big cut of it. >> They will tell you, it's an amazing technology. We'll help you sell it, but you make a down payment of $10,000 right now, and we'll look into it. But you don't have $10,000 right now, for instance. So what are you going to do? And even if you pay them, the likeability of them getting back to you is not that high, so what you do is on Lexit is, you get to Lexit, you open up your account, get KYC'd. We're very strict on that. It's fully legit platform, and you list it. You get assessed by our professional M&A network, given a value to it. It's not the value it will be sold for, but it's a value the professional assessor thinks you're worth, and why. He's going to say these reasons. Now, the buyers are going to see it, make the bids, and there you are. Access. >> So you guys automate that entire end-to-end process. >> Absolutely. So, Lexit is, from the listing, down to the final due diligence and drafting of agreements. Everything is in it. The final signature and the transfer of ownership. It's a full solution. >> Yes. The future of work, obviously, is about automation. I mentioned cloud computing, because we look at that market heavily. On the tech side, automation drives it, but managing processes, automating processes away is threatening to a lot of people. You're basically putting people out of business, potentially. >> Yes, I keep doing that. >> If you're successful, a cadre of ecosystem partners, service providers, traditionally go out of business, so I like that. >> Potentially. >> Well, they're going to have to adapt or change. I see this in global service integrators, like Accenture. These guys are getting eaten up by machine learning automated coding, because they can do it faster and better. >> You know my business better than I do! (both laugh) >> What we do at theCUBE, we know our stuff. So, this is disruptive, and at the end of the day, the other thing I want to get your reaction to is open-source. A lot of people in the ethos of the mission based open-source world is, I wrote coding as an open-source. If my company fails, and my VC's make it proprietary, it's like an owned asset in bankruptcy, or whatever, dying, you can't put it back, but with open-source code, there's always going to be value there, to some level. It might not be great. So, I might say "Hey, you had a failed venture, I'll buy your code." >> Exactly. >> Transfer your GitHub over. Done. >> That's how it works. >> So this is kind of like the dynamic that... Do you see that? >> This is the direction that we're heading to. We want to connect the dots, because we started Lexit out of a community approach. We figured out two years ago, when we started it... So we're two years into that right now, that this is direly needed. We don't have access, but if I got this problem right now as a startupper, so do many. And out of this thinking, we claim ourselves to be the startups for startups and empower the community. I believe that in terms of leadership, for instance, you're only a good leader if you empower everyone around you to become a good leader, based on respect and mutual purpose. >> So I got to ask you a question. >> Please. >> Cause everyone's going to ask this question of all startups. You got to know where you are. Are you a startup? Are you a growing company? Where's the product? How far along are you? When is it going to be released? Talk about the momentum of the offering that you have. Is it available in Beta? What's the status of the product itself? Because I'm sure it'll be used a lot. >> As I said, we started two years ago. The first year we didn't even write a single line of code. It was just like how do you put this huge M&A process into a usable yet powerful but simple to use platform. How do you do that? Just scalable from the small, small asset you want to sell, a line of code, an algorithm up to a large enterprise. The first year was finding out a process. What is necessary? How do we cover all aspects on different jurisdictions, and all this stuff, right? How to make it work on the legal side too. And we figured it out, and then we started doing it. And right now I can tell you guys we are scheduling the launch of Lexit, this year, in June. So we'll not just-- >> The product will be ready for production, shipping product. >> Absolutely. Available worldwide, completely worldwide ready to operate. Ready to make your deals, to put your listings, to make your bids, to get the best technology out there, but not just technology. Letters M&A, it means any kind of of business from a pizza chain, to a high tech company, to a biotech company, to food, supplies you can sell. >> Usually when I do legal documents, you see an exhibits in there, and say oh, exhibit A is all the IP, or whatever the seller's selling and the buyer's buying. When you deal with decentralized asset creation and capture, use that blockchain involved, how much is the tech involved in your process? Obviously, the legal stuff, I can really see automating away. That's like check one. But when you start dealing with assets that are either code or something durable, like property, that's maybe stored in blockchain, how do you guys look at that? Is that part of the automation? Is that a factor? Where does that impact? Is that an exhibit? Do I just say "Here's my key"? How do you deal with that? >> Alright, let's put it this way. We do want to connect existing M&A space to Lexit. The exits, they're huge structures. We do want to disrupt them, that's true, but to do that you can't just create entirely everything new. You have to kind of find a way for the big boys old club, the big banks, and all those folks around there to participate, right? To give them a familiar way to work. What we did is the token model economics in a way that people get rewarded, people pay for stuff inside of it, and such, right? Everything is triggered with smart contracts, obviously, to know did you do the down payment, did the signature happen. The smart contracts are automating the whole thing down to the final transaction. When the final transaction happens we get our commissions paid out from the Astro we have. The Lexit Crypto Astro. Everything is transferred and secure. Everybody involved into a deal knows exactly what's happening. >> John: And they have a shared incentive too. >> Absolutely >> They're tokenizing the process so there's a reward element. Right? >> Yes. >> Am I getting this right? >> Yes, the access. There are three parties in Lexit. Buyer, seller, obviously and the assessors. Professional M&A guys. They get rewarded in tokens, and that greatly. Pretty much in the magnitude of what they do in billables at the Big Four, PWC and so on. There's a high incentive there to do this in this assessment, and they get rewarded from the community pool which gets feed with all those listing fees, unlocking futures and everything that's happening within Lexit itself. The kicker is that we at Lexit believe that much in token that the commission you have to pay us is between 8 and 2%. 2% of about 35 million dollars in volume, and it gets a bit higher down to the lower ones. We take this commission only in our own token. I don't want dollars, not even Bitcoin. >> So you have your own token? >> Yes. >> Utility token or security token? >> It's a utility token strictly, and it's called LXT. >> LXT. Great. And is it available now, or are you going to launch it in June? >> Right now we are in the private pre-sale. I'll put through, and it looks like we'll keep it in the presale. It looks like the page was selling out LXT right now to the private backers. It's that high that we think in two weeks from now on, speaking mid-March, it's sold out >> What's the numbers? Hard cap, soft cap? Do you have the numbers? >> I told my team "Listen, everybody tells me: 'you're doing M&A on blockchain, you can raise hundreds of millions,'" and everybody will say "That's okay." I said "We don't need that money." I just want to raise what we do need to finalize the last mile of the dev and launch it this year. The hard cap is 10,000 ETH. 10K ETH only, roughly $9 million right now, and that's it. >> And you're going to reserve the other tokens for the community to do the work and be part of this new future of work equation? >> 50% of the total supply, which is 18 million, it's zero, goes to sale, to the market. Just 10% to us founders. You don't need more. >> So you're not greedy? >> No. >> You guys are playing it right to create-- >> I want the community to be empowered, this whole-- >> You need the community. You need the community. >> I need the community. >> So that is a different dynamic... Well, not different. That is the dynamic that everyone is agreeing on in the community in the ecosystem here, is that if you have bogarting or hoarding coins, or people taking down allocations, you miss the dynamic of the human capital, which is what the future of work is doing. You are an example-- >> Free promotion, you know what I mean? >> You're engaging. The future of work requires human capital. So if one institutional buyer buys the token out, there's no people. >> I interrupted you. You said "We are an example for what"? >> The future of work. >> I love that. >> You are executing, potentially, disruptive M&A, but you're not going after the banks directly. They can play, too. >> Right. >> So you guys are a service. You're like an Amazon.com website cloud service for... >> You could say that. >> M&A. Well, not like, but automated. Automating away things is the way to go. Do you see other examples that are like you guys, that are emerging in use cases? Obviously you're taking a known process, M&A, automating it away, making it tokenized. What other things do you see out there that's ripe for disruption? >> I do think that if somebody out there... Lexit, what we do, let's put it aside for a moment. I think supply, the supply chains of the world are ripe for disruption. I think they're inefficient. I think even food production, down to the basic needs of a human being, this is ripe for disruption. >> When I got my MBA back in the 90s, after I got my Computer Science degree in the 80s, I remember the word that always stick in my head from the books that they teach you is the "Value Chain." >> Value Chain. >> The Value Chain is a concept of anything, of value creation. This notion of chaining, blockchain, you see it... Anything that has value creation process. >> Let's take food production for a moment. Rice, okay? Rice. So now there is this farmer, somewhere in Asia, or in elsewhere, and he's producing, and he's selling it to somebody, who's picking it up, and he sells to the next distributor. He sells to an international distributor. He sold it for probably... I don't know, maybe 20 cents a pound tops? Probably just five. I don't know the prices. What happens if we could chain that supply chain, that we have a decentralized nature of how all these people can directly feed into the system and just jump those middlemen entirely. So this is what I'm speaking about. It's going to disrupt everything. Somebody's going to figure out that one. >> So you guys have a good formula, just to recap. You're automating the M&A process, you're creating a huge supply of tokens available to the community, that will help you change the game on M&A, which is also part of the process of your value chain, now tokenized, and you're taking a small cut that's a tiered commission, if you will, on the M&A transaction. >> It's like six times cheaper. >> Higher for the lower numbers and as you go higher, which you want more deals, you take a smaller cut, so it's not greedy, you're not taking a grotesque-- >> Nope. We go even beyond. Around Lexit we created a partner program. This partner program is fueling directly deals onto Lexit, and we give them 50% off the commission. People tell me "You're crazy." No I'm not. You need to incentify. So if you get thousands of these partners one day... Think of that. 50% is still a lot. I believe in sharing everything except my girlfriend. Everything is fine, so we share. You can have my beer, that's fine. (both laugh) Speaking of that, I believe in this-- >> Well, the Network Effect, too. Sharing is an ethos of distribution, so distribution is sharing. Sharing is also a social thing, but social gamification really is about distribution. You're essentially creating a network effect, and this is the fundamental pattern in token economics, is the networks. >> Totally true. >> You see that? >> That's how it happens. >> What's your situation now? You've got a deal going on. Are you with Polymath? >> That's amazing, I-- >> Talk about that. You're announcing it on stage in about an hour. >> It's true, yeah. The stage is about to come. Trevor and his team do a great job. Boarding startups with the tokens to become a security token. I believe there is a huge business for them in the future. And now we want to work with them together, so we partner up, and what we do is... One of the models is that we will help their clients to liquidize these tokens, then, over Lexit. So this is one of the thoughts we have. We're just figuring out a few things, but we're very excited. >> John: And it's all API-based, I'm assuming, right? >> All API-based. It's been highly automated, of course. Automation. It's all about automation. You have to lower the cost to make it efficient, to make it cheap for everybody involved, so you have to automate everything you can, and smart contracts are, per se, an automation tool. >> Well, Amir, good luck with your venture, Lexit. I love the idea, I love what you're doing. I think this is what we look for in theCUBE, this kind of innovation. We think it's awesome. Good luck on your team. Product's almost pre-launch. >> And the pre-sale is almost through, so if you guys want in before ETH (mumbles), let me just drop that one in two weeks. It's closing and we distro in between four to six weeks, we're going to distro the token. So it's everything happening right now, and soon after that the exchanges are waiting, and you'll be surprised. They're going to be the good ones. >> This is innovations theCUBE are covering: the blockchain, the cryptocurrency. We're at Polycon 18. Polymath is the folks putting on the event with Grit Capital, a Canadian contingency, but they know their cryptography. If you know Canada, you know what the deal is there. It's theCUBE covering it live. We'll be back with more live coverage after this short break. >> Thank you. (reverb-heavy electronic music) (moody ambient electronic) (moody ambient electronic) >> Hi, I'm John Furrier, the co-founder of SiliconANGLE Media and co-host of theCUBE. I've been in the tech business since I was 19, first programming on minicomputers in a large enterprise, and then worked at IBM and Hewlett Packard, a total of nine years in the enterprise. Various jobs from programming, training, consulting and, ultimately as an executive salesperson, and then started my first company, it was in 1997, and moved to Silicon Valley in 1999. I've been here ever since. I've always loved technology, and I love covering emerging technology. I was trained as a software developer, and loved business. I loved the impact of software technology to business. To me, creating technology that starts a company and creates value and jobs is probably one of the most rewarding things I've ever been involved in. And I bring that energy to theCUBE because theCUBE is where all the ideas are and where the experts are, where the people are and I think what's most exciting about theCUBE is that we get to talk to people who are making things happen. Entrepreneurs, CEO of companies, Venture Capitalists. People who are really, on a day in and day out basis, building great companies. In the technology business, there's just not a lot of real-time live TV coverage, and theCUBE is a non-linear TV operation. We do everything that the TV guys on cable don't do. We do longer interviews. We ask tougher questions. We ask sometimes some light questions. We talk about the person and what they feel about. It's not prompted and scripted. It's a conversation. It's authentic. And for shows that have theCUBE coverage, it makes the show buzz, it creates excitement, and more importantly, it creates great content, great digital assets that can be shared instantaneously to the world. Over 31 million people have viewed theCUBE and that is the result of great content, great conversations, and I'm so proud to be part of theCUBE, a great team. Hi, I'm John Furrier. Thanks for watching theCUBE. (emotive electronic music) >> Narrator: Robert Herjavec!

>> Announcer: Live from Nassau, in the Bahamas, it's The Cube. Covering Polycon '18. Brought to you by PolyMath. >> Hey, welcome back, everyone. This is The Cube's live coverage in the Bahamas of Polycon '18, put on by PolyMath and Grit Capital. And a special guest who just did a walk-by, fly-by, The Cube wanted to bring him in, Jeremy Gardner. We've chatted with him all week, influencer, entrepreneur, venture capitalist now, been involved in crypto, dropped out of college, luminary in the industry, young gun, great to have you on The Cube. Thanks for coming on. >> That is the most honorific title I've ever received. >> We like to shoot the shit around here on The Cube. Seriously, though, you have a big following in the community, well respected, I mean, a lot of cool things going on. A lot of young people working on projects, you're one of them. A lot of old people coming in, that have skills, whether it's cryptography or the other ecosystems, interesting blend. You've also worked on the Augur project, which has been highly successful. It's been a great case, and I hear people point to it all the time, say, "Love that concept", but a lot of cool tech. And you're at Ausum Ventures right now, that you're running. What's your take right now? I want to get into some specifics on some tech questions, but, you know, you're out there, you've done some things, you're in the middle of it, you get a fresh perspective. What's going on? What's your view and how do you see it playing out in this business? >> What we see occurring in 2018 is an incredible maturation of the industry. We've gone from Bitcoin to cryptocurrencies to blockchain technology, to this concept of smart contracts and de-centralized applications, to this ICO fad, to now what we're seeing here at this conference, which is the emergence of security tokens. And this evolution represents the broadening of the blockchain economy as a whole. From something that once was this niche little kind of ideological technology to something that is totally global, and perhaps as big as the internet, if not bigger. And that maturation is really important, because as the market matures, a lot of the scams that we've seen in years past will begin to fade away. That being said, I think we're going to need to see a real shake-out in the industry, a bloodbath in the markets where a lot of these poorly formulated tokens, crypto assets, disappear before we see a really blossoming crypto economy. >> It's like you got to clear the digestive tract of all the bad food you ate. I mean, you got to kind of get it out. >> Exactly, it's a purge. There's so much toxic crap in this industry today, it has to disappear before we can really evolve into something that rivals Wall Street. >> Yeah, and it's early on, too. I got to say, we've seen many waves in our day, Cube, we cover it. What I like about what's happening now is you've got an ecosystem forming, you've got people like yourself who are putting out statements like that, which is, quite frankly, a signal. And people need to speak up right now, because we've got to identify the bad stuff. So the ecosystem's forming. >> Well, it can be hard to do that when you're making a lot of money on crap. I mean, I've missed out on a lot of money-making opportunities 'cause I've been ideologically pure. I've only invested in projects that I truly believe will change the world. That can be limiting. And I don't blame people that kind of set aside ethics or quality projects for a greater profit mode, I'm a big believer in capitalism, but fundamentally, that mentality has to go in order for us to take this technology to the next stage. >> Okay, money making's going to happen, there's going to be some high flyers, and some are going to be legitimately good intentions that may turn out to be crap, and then there's going to be total crap, which starts out to be a scam, anyway. >> Right. >> How do you look at those signals? I mean, obviously you want to look for trajectory and community and tokens. How do you look at it? Is it underpinnings of the tech? Is there a business model? What's your view on how to look for those potential trajectories? >> In my view, it's just like venture capital. It starts with the team every single time. Team, team, team, then concept, then market, then tech. I mean, the tech changes, the code's constantly being updated. I'm not a coder; it's something that can evolve, it's something that, once you raise capital, you can have better technologists building out your tech stack. That doesn't really concern me. It's, is this team going to execute, are they going to be able to iterate in a fast-moving business environment in which the tides are always turning, regulators are always doing different things? Are you going to be able to adapt and evolve, and are you going to work together as a team? I take teams out to dinner, I see how they interact with one another. Do they have symbiosis, or are they kind of antagonistic? If they have an antagonistic relationship, it doesn't matter how good the concept is, how great the tech is, because the team won't stay together. And I don't want to have to make those sorts of bets on who's going to be the winning player. I'll stay in touch with the team, but I'll rarely make that investment. >> Yeah, they got to be ready for battle together. They've got to get down and dirty. >> So I hold teams paramount in early-stage investing, which is all I do. >> Awesome. So what are you excited about today, right now? What are you looking at, what's floating your boat, what's getting you excited, what's the specific-- >> So, Augur's about to go on the mainnet, so it's going to be the first truly de-centralized, consumer facing, de-centralized application. Very exciting. I think it could change the world of finance forever, and the way we predict the future. So it's mainnet going live, and then three months after that, hopefully the actual platform going fully live. It's still the most exciting project in the crypto-space, in my view. Even though I've been involved for a couple of years. I am an advisor to Basecoin, which is wrapping up its presale right now. Basecoin is an algorithmic stable coin that today maintains parity with the dollar, and it, I think, is going to be one of the most necessary components. It, or another stable coin, will be one of the most necessary components of creating a true crypto-economy. 'Cause if you look at most of the blockchain applications today, most of them are using these volatile crypto-assets as forms of payments and transactions, and that doesn't work for your average consumer, or even for large enterprises. People do not like volatility. It's a compounding risk factor for almost any sort of transaction. And so for us to have a real robust crypto-economy, we need a stable coin. My bets are on Basecoin, but I'm rooting for all the teams. Because whoever does this, and it may be multiple teams, will have unlocked one of the biggest problems that effects crypto-assets today, which is volatility. >> And liquidity is also a concern, people want to get liquid. That's also a dynamic of why token economics works, is you don't have the process of going public. You can do a little bit of funding and liquidity. Talk about the liquidity impact. >> Yeah, I mean, look. ICOs and token sales are this fabulous way to democratize finance and raise capital, especially for de-centralized applications and new protocols. They really can't take a traditional fundraising mechanism. That being said, if you are trying to create any sort of payment token, which I would never encourage anyone to do, but if you are, like a lot of these utility tokens, their point is for the purpose of payments. And that's idiotic to me, 'cause you're going to do what? Raise $30 million, maybe $100 million? Let's say $200 million. What's the volatility on that going to be daily, or annualized? It's insane, it will never be adopted by consumers. And furthermore, anyone that tries to create a payment token for their specific application, what they're not recognizing is someone's going to have to go to Coinbase, buy Bitcoin, send it to Poloniex, buy their token, send it to the application, just to make a payment? No way! >> Yeah, too complex. Credit cards are always going to beat that out, or Bitcoin and ether. >> Alright, so I've heard on The Cube here, and I've also heard in the hallway, a consistent theme I want to get your reaction to. This marketplace of having de-centralized apps, and blockchain, and cryptocurrency kind of dynamic really disrupts areas that have a lot of slack, or lag, or unused resource. It could be a physical asset, could be computers in the data center doing P2P stuff, and that this market busts down those inefficiencies, creates efficiency, that's the arbitrage. >> It can. >> Your reaction to that. >> It can, but like I say, how do you get access to those tokens? So the rise in security exchanges, security token exchanges, and more robust crypto-asset exchanges, will potentially enable that right now. But unless you have an easy way to buy and store those tokens that are freeing up illiquid assets in a dynamic manner, tokenizing assets isn't very useful. You know, with Blockchain Capital, my last venture fund, we created the first liquid venture fund. It was actually the first security token ever. And the problem that we ran into was everyone was excited, we created this liquid, limited-partner interest in a venture fund, but the problem was there was no place to trade it or sell it. And so, despite the nav of the fund going up, the price of the token remained the same, 'cause there was no liquid exchange. So you need a liquid place for the exchange of value in order for the liquidization of these assets to occur. Furthermore, I think more important than that point is that blockchains are fundamentally the largest technological disintermediator that has ever existed in human history. Even, since the beginning of time, pretty much, we have always relied on middlemen, whether they're banks or governments or tribal councilmen, to mitigate any sort of transaction. With blockchains, we can now have truly trustless transactions, and disintermediate trillions of dollars' worth of middlemen and trolls under the bridge. And that's the most revolutionary component of this technology. >> That's awesome. I want to get one quick question in, we're tagged for time. This rise of the security token has been a great innovation. We've seen great traction because of the security token, we're seeing PolyMath doing a lot of people looking at this as a stabilization. What does it do to the utility token? Does it change the nature of the utility token? Will utility token have a life that's not a monetizable thing? Will it still trade? What's your view and vision on the role of the utility token now that the security token has been established as a viable mechanism? >> So look, when we were building Augur, we did not want to issue a token. ICOs were really scary back then, but we realized, in order to have a truly de-centralized prediction market platform, we had to have a second token. One that wasn't used for payments, but that created a de-centralized consensus in our network. And so we created the first utility token ever. And back then, I was like, oh, this is novel, this is cool. We tried selling it to people; No one really got it. But then, it seems like we went and opened up Pandora's Box. All of a sudden, utility tokens flourished in the past two years, as this means to raise capital. The problem was, nobody was thinking beyond that capital raise. And so most of those utility tokens would have been much better as security tokens. They didn't actually provide much utility. And so I think those tokens, that 99%, 98% of utility tokens that have come out in the past two years, that didn't actually have true utility, those will go, you know. >> Yeah, I think it's some interesting conversation. I want to follow that up when we get back to the Bay Area. This is super important, I really love the idea that you're kind of teasing out. I see utility tokens having an instrumental role in governance consensus, other community dynamics, which might have its own value. I don't know yet what it looks like, but we'll certainly follow up. >> Absolutely, and security tokens will be the largest crypto-asset in the next two to three years. >> Jeremy Gardner, great conversation. Love the young guns, man. They're so smart, great to have you on, us old guys, we're just trying to keep up with these young guns. Back with more live coverage after this short break. Good job, man. >> My pleasure, man. >> You're awesome, dude. Alright. Hey, when we get back, I really want to get, I think the utility, I think the dual-token model is the way to go. Security, and >> I didn't think it would, but right now, the problem is most utility tokens-- (electronic music)

(upbeat music) >> Narrator: Live from Nassau, in the Bahamas it's theCUBE. Covering POLYCON18. >> Hello welcome back everyone this is theCUBE's exclusive coverage from the Bahamas, we are here at POLYCON18 Put on by Polymath and Grit Capital This is an amazing event, it's really the cryptocurrency, blockchain, token economics, the decentralized future-internet is happening now. The industry if forming, CUBE is starting its 2018 run. We'll cover all the top events this year, in the cryptos. As you know, we know cloud, big data, we do all those other events, we'll start covering in a big way because the ecosystem is formed, you're seeing people making money. The early whales, the big guys, now you've got institutional investors coming in, a real ecosystem dynamic. This is what industries look like when they're formed. Our next guest is Carlos Domingo, founder of and managing partner at SPiCE VC, and the founder and chairman at Securitize. One of the tell-signs of a maturing ecosystem that's growing very fast is companies that are adding value. You're one of them, Carlos. >> Thank you. >> Welcome to theCUBE. >> Thank you, thank you guys for having me here. >> So, you know Dave Vellante who just had to jump on a plane 'cause the snowstorm in Boston would comment, he would say, 'cause we talk about this all the time, "You know you look "for the big waves, and you see what's happening. "But How do you know when there's a tipping point "in a new industry?" And that when there's stuff being created, value being captured, industry being formed with an ecosystem, and a community, this is absolutely happening. >> Correct. >> You're bringing a very valuable service to market. You guys self-funded this operation, Securitize. You're automating other value chains that were old guard businesses in a new way. >> Correct. >> Take a minute to explain Securitize, why the idea, what you guys have built, what you've got going on, and, What's the disruption of that product? >> Good, so the idea came originally 'cause last year me and my partners, we wanted to tokenize a VC fund. And basically show a security token that contains the economic rights of the fund as a way to provide liquidity to the investors because liquidity on the VC space is one of the biggest problems, right, you invest money and it takes like seven to 10 years and then you can actually get your money back. So we had that idea, at that time Blockchain Capital had done one security token, was the first security token, for a 10 million dollar offering, and we wanted to kind of build on that, so we went out and looked for people that could actually do the issuance of the security token in a regulated way, so the KYC, the AML, the accreditation process per country, not just for the US. And basically ran the ICO in a secure way with secure wallets for different cryptocurrencies, and then also have the smart contract issuing the token, but also smart contract managing what happens with the token on the secondary market, which is very important, right? 'Cause see, in the secondary market the tokens can actually move from a wallet to a wallet, and suddenly you're outside the regulatory framework that you protected at the beginning Right, so we went out and talked to Polymath and many, the few companies that were doing that and no one was actually ready with a platform last year, so, we are all tech entrepreneurs and product people, so we did what we know how to do, we hire a CTO, hire engineers and went and built our own platform for SPiCE VC, for tokenizing the fund. And then when we announced the project around September, October last year, I posted a Medium about the investment process, and the screenshots of the path and how it works, all the features that it has, we also integrated Bancorp as the central exchange to provide liquidity. And then started of getting flooded with people saying, wow, this is very cool yeah, we wanted to do security tokens, think this is the future, and no one actually is ready with the platform and you guys seem to have one, so who has built it? And I told people, we built it, this is our platform. And then we took the decision last year to basically separate the platform from the fund. And the fund becoming the first customer, and we created Securitize. Which is basically an end-to-end issuance platform for security tokens. >> And so this is really filling a void for people who want to either raise money for a startup-like venture, And then also maybe want to raise cryptocurrency in capital for growing a business that they're tokenizing. That's a big trend, so you've got the startup, hey I've got a great idea with a whitepaper, we're going to revolutionize the world, People are interested, some people call it the dumbest idea they've ever seen, which turns into a billion-dollar idea, because that's the way it works. (laughs) So got to raise some cash. And then there's the businesses that are growing saying, you know, I can grow with working capital in a tokenized environment, 'cause the business model shifts for that. >> Correct, I think that what people don't realize is that you know, getting actual liquidity in a market, like doing an IPO is either very difficult, or very expensive, or both things. >> John: Yeah, and the hurdle's very high. >> Yeah, the hurdle is very high, the cost could be like 10 to 12% of the money you raise you know paying the underwriters and paying everyone to get it done, so I think that what tokenizing real assets, like asset-backed tokens or security tokens, this basically allows for two things. One is the network of investors you can actually reach is anyone with an internet connection that within the regulation in their country are allowed to invest. So suddenly you've multiplied by 100 the reach you have of potentially finding investors. And second, is it's cheaper to do it. There's less friction. Third, is managing all of these thousands of investors would not be possible in the traditional financial system, right? Because you have investors from many countries, with different currencies, different bank accounts, different banks, and with the smart contract and tokens you can automate the entire process, >> And from your accent you're obviously not in the US, not an american but you're from? >> I'm from Barcelona. >> Barcelona, so you're really laid back, you're chill about this, but you're hardcore techie, right? >> (laughs) Yes. >> Okay, so let me just go through the process here, so what's interesting to me is, first of all, I love cloud computing and I think what DevOps has done in software with open-source that's clearly, in line with crypto market scene, mission. Automation is a really big deal, when you can automate something down to efficient process, you're doing it, you guys are doing this different, it's well not different it's automated, great, but the investment piece is accredited investors, right? Am I getting it right? >> It depends on the jurisdiction. So, most countries have security laws, so what our platform does, is we'll actually identify through the KYC on the name of the investor, and depending on the jurisdiction where you're from, we will apply a different rule, because in the US it is accredited investors only but in other countries you can take the small portion of retail. Also the meaning of accredited investor is different, how you actually comply with that, the documentation you need to collect or not collect for validating that someone's an accredited investor is not the same in the US and in other jurisdictions. >> Alright so, here's the problem that I see you solving, correct me if I'm wrong, if I'm a company XYZ Corporation, we're growing like crazy and we can tokenize our business, and we say hey, we could raise a token, 'cause we actually have a product and security token is a great vehicle, and so they go their lawyer well you're in the US, you can only use accredited investors, if you want to go outside the US you got to go to the Cayman Islands or somewhere else, set up a new company and do all that stuff, 'cause they have to manage the process, and they got to go find investors, that's hard! >> That's hard. >> Okay, do you solve that problem for them? >> We streamline the problem, so basically, first the fact that you setup a company in Cayman doesn't actually prevent you from, you know, the regulations in each country because the regulators care about where the investor sits, not where the company is. So what we solve the problem, is basically allow them to provide a liquidity event through fundraising and provide liquidity for the investors on the secondary market, so we basically will save them the trouble of having to figure out how to do all these processes country-by-country. >> So it's a liquidity value, too, so it's also getting the process done, streamlined, and then managing some liquidity challenges that the company would have to put cycles into managing it. >> Exactly. >> Okay so here's a question, so this is like a consulting hour for the people watching. I'm a company, XYZ Corporation I want to tokenize my business, now, we've been up and running for a few years and say hey, Securitize is really interesting, these guys are amazing, the same ethos as us, they're cloud guys, they're automating. Let's just go through them. We sign up, we apply to yo. What we do, do we have to set up a new company, is there risk issues, what's your advice on the playbook? >> So the fact, because you're using a security you don't actually have to go through all the jurisdictions, right? You can just do it from wherever you are, because you're issuing a security that assigns some economic interest on you your business, right? Now in terms of us, we're trying to become kind of like a quality security token ICO place, so we create a lot and decide which ones we bring on board or not, first, because we have so many, we have hundreds of leads coming to us all the time. And secondly, because we want to make sure that people who we're securitizing, that those are quality companies that we've vetted, and our lawyers have checked that the company's interesting, that the company is going to do well not only and the fundraising, but later down the road, so, >> What about the legal and regulatory challenges? So again, most people do a new code because they want to protect their corporate shield, there's a corporate shield to protect themselves, you know investors are always are gun-shy or trigger-happy when it comes to suing people. Especially in this economy. How does an entrepreneur or business manager protect against that, do you guys handle some of that, or is it just a buyer beware kind of thing? >> No, so we work with our attorneys, Colten in New York they specialize in securities, and we basically will advise the customer that actually uses our attorneys because they are very experienced in doing this, and in terms of protection, in a security token you're not just getting the token, you're actually signing a subscription agreement which is a legal binding document that explains exactly what the token is going to do, and there's and information memorandum which is basically describing what the business is going to do. So there's a legal framework, off-chain if you want alongside the on-chain token and the smart contract side. >> So all that stuff's happened, so awesome. Alright so we're going to change gears here, Carlos. Talk about, talk about you, why, why do this? What drove you here, are you scratching an itch or are you serial entrepreneur, how did you get here, what's the story? >> So the story is I've been, this is like the third phase of my career. My first 10 years of career, I was at the middle of the dot-com boom, I took company public in Inashik, Japan. And then went through years of corporate companies and then everything crashed so I lived both the up and the down. The second part of my career started in 2006 and then lasted another 10 years, which is during Telefonica, one of the largest telcos in the world, and I lived through all the mobile boom with the iPhone coming out in 2007 and 2008 and all the excitement happening in the industry but to me it was the opposite, I was looking for what is the next thing I do, because all these industries are now not as exciting anymore. So I came across blockchain and crypto, two things. One is I was doing a project in small cities and Dubai, where I live, where we started looking at blockchain and ran some pilots and then one of my colleagues, and friend, Brendan Eich who is the founder of Mozilla and he actually did an ICO for a company called Brave in March last year, when I saw that-- >> Brave browser? >> Yeah, yeah. >> Very familiar, great, great offering. >> He's a great entrepreneur, the guy's invented JavaScript and when I saw he did that, I met him actually a year ago and I met him this week as well in Barcelona at Mobile World Congress and when I say what he did I was like wow this is very revolutionary, right, so this is a completely different way of raising money and it's also a great way for investors because you get liquidity so why not get there and find a project. So, I started with one and then-- >> Serial entrepreneur, great story, lot of experience coming into cryptos, you got some young guns who are inventing, and making some cash, and doing well, also starting funds. You've got developers and business entrepreneurs who are successful and they're becoming investors and then you got the pros coming in, alpha geeks, serial entrepreneurs, pros on the banking side, all think differently, and they see the vision, so I got to ask you, what is your vision of the decentralized internet? You've seen how telcos work and you know their challenge is over the top content, centralized organization, you see what Brave's doing, you've lived the dot-com up and down, what's your vision of decentralized internet, how would you describe how big the wave is, and what's the opportunity? >> So I think that if you think of why people were excited in 1994 1995 over the internet, it was precisely because the internet promised decentralization back then, right? So there were all these protocols that allow you to move voice, move data, move webpages that we're going to disintermediate people. And what happened is that a lot of traditional players got disintermediated but then the weight shifted into players which are now high concentrated and centralized, right, everything on Facebook or Google. So I think that the excitement around crypto's about making a reality, the decentralized internet that didn't happen the first time. And I think that because the protocols have a way to monetize, and there's an economic incentive to be part of the network, this time will be different. >> Cloud computing has also helped a little bit, too. Because with open source and cloud computing you have a great creative environment on technology's side. >> Correct, this is like open-source money if you want to think about like crypto. So I think yes, the fact that the maturity of some adjacent technologies is helping this move faster. >> And open-source has been a proven formula, one, second tier citizen when I was growing up in the open-source community, I remember people were poo-pooing Linux back in the day, and all of the sudden now it's tier one powering the world, and now you have community modeling around how that worked, how would you compare and contrast? And you have other things coming into this, too. You've got cryptography systems you've got gamers and cryptocurrency and you got cloud, how would you tease out the industry and describe the cryptocurrency and the blockchain communities, I mean it's kind of a confluence of a lot of-- >> I think it's a very interesting industry and it has forced myself also to have to learn about adjacent topics, right, because you've got to understand about technology, but you've got to understand about software, cryptography, you've got to understand about finance and economy to understand what a monetary policy is and how you're going to define that into your token. You've got to understand about finance if you do security tokens, you know securities laws, so it is fascinating because of this confluence of different things. >> We were having a joke on one of our broadcasts, I said to my co-host, these startups will soon have a CTO, a CEO, and a Chief Economic Officer, I mean this is kind of token economics! >> Makes all the sense. >> I mean you're going to have to say, hey do we increase the coin rate, do we drop this down? >> A legal counselor. >> I mean it's a big human dynamic there. >> I think this is for me why I am so excited about it. 'cause I was kind of bored of being in an industry for 10 years, you feel that you already know more or less everything, and yet there's new things coming, but are kind of like incremental improvements. This feels like an exponential improvement, something is going to really change things, and as you said it forces you to understand more disciplines than just software technology. >> I mean to use a California example, to end the segment, you know you see the waves coming and the surfers grabbing their boards, and they're on the wave hangin' 10. And that's what's going on, you see the best people attracted to this space because there's problems or opportunities, there's challenges and there's a social impact, mission-driven impact. And I think people are seeing that, and it's attracting new entrants into the space, from banking, all sectors now coming in, they're seeing the ecosystem develop, how would you see that going, because, you do agree that the ecosystem is forming pretty quickly. >> It is forming very, very quickly, surprisingly quickly. And I think that one of the things you mentioned is the fact that, people like me or other people that come from you know long-standing backgrounds in tech are moving into this industry who are also making the industry kind of grow faster, because the industry is a bit immature if you want, in terms of everything technology. This is why there's so many hacks, the usability of the products is still not there, so as more people from a traditional tech industry move here, and start building good products, this will actually change very quickly. >> Great leadership, Carlos, on your end, congratulations. You're seeing an opportunity and you're making a difference. You're putting out a great product service I think people are going to use a lot of, and looking forward to chatting more about it and of course you got to VC fund, and you're doing some investments, you put some skin in the game as well, with your companies, congratulations. This is theCUBE live coverage we'll be back with more, here in the Bahamas, and our friend from Barcelona here. Great entrepreneur, looking forward to chatting more about the decentralized economics, the technology, how the value will be captured, the technology that's going to enable that and the impact to society. It's theCUBE, more live coverage after this short break. (upbeat music)

>> Announcer: Live from Nassau in the Bahamas, it's the Cube. Covering Polycon '18. Brought to you by Polymath. >> Welcome back, everyone. This is the Cube's exclusive coverage. We're live in the Bahamas, here for day two of our wall to wall coverage of Polycon '18. It's a security token conference, securitizing, you know, token economics, cryptography, cryptocurrency. All this is in play. Token economics powering the world. New investors are here. I'm John Furrier, Dave Vellante. Our next guest is Nithin Eapen Who's the Chief Investment Officer for Arcadia Crypto Ventures. Welcome to the Cube. >> Thank you very much gentlemen. >> Thanks for joining us. >> Thanks for coming out. >> Excited to have you on for a couple reasons. One, we've been talking since day one, lot of hallway conversations. Small, intimate conference, so we've had a chance to talk. Folks haven't heard that yet, so let's kind of get some of the key things we discussed. You are very bullish and long on cryptocurrency and Blockchain. You guys are doing a variety of deals. You're also advising companies and you guys are rolling your sleeves up. So kind of interesting dynamics. So take a minute to explain what you guys are doing, your model. >> Okay. >> And we're going to try to get some of your partners on later. You have a great team. >> Yep. >> Experienced pros in investing. And you got wales, you got pros. So you got a nice balance. >> Yes we do. >> So take a minute to explain Arcadia, your approach and philosophy. >> Okay. Okay. So Arcadia Crypto Ventures primarily we are a private fund. We invest other money. We believe in the whole crypto space. We believe this market is expanding and it is growing and it's going to be the biggest thing that ever happened. It's going to be this fusion of internet and PC and mobile. And everything is going to go batshit, okay. We believe in the whole tokenization world. Everything is going to be tokenized. So as a whole, we believe this space is going to go very big. Okay, so that's one piece and because of that, we invest in the space, the whole space. Not one bitcoin or Ethereum, but everything in the space that makes sense. People who have a use case. Now the second piece of it is we advised great founders. We want to get founders to come out and build these new things because this is the new internet of the new era and people have to come out and build these things. And so many of them are traditional businesses and we have to explain to them why this matters, why you should come to this space and be decentralized and reach the whole world. Because initially, the internet came. The idea of the internet was everybody gets information. Now information did get everywhere. You don't have to worry that the mailman is there to deliver your email anymore. Even if it's a Sunday, your mail will get delivered. So that part was good. But now you have these few companies that's holding all your data. It's okay for most people, but they do censor a lot of people. So that is one point. That censorship. We want a censorship-resistant world where everybody's ideas get out. So that way, we believe that's how this whole internet space itself is going to change because of that. See this is if I explained in one word, this is the greatest sociopolitical economic experimental revolution ever that has happened in humankind. >> In the history of the world. I mean this is important. I'd said that on my opening today. >> Uh-huh. >> Dave and I were riffing and Dave and I have always been studying. We've been entre-- We are entrepreneurs. We live in Silken Valleys in Boston and so you seeing structural change going on. So it's not just make money. >> Nope. >> There's mission-based, younger demographics. So you starting to see really great stuff. So I want to ask you specifically, 'cause you guys are unique in the sense that you're investing in a lot of things. But startups, pure-playing startups? >> Which had only one path before, or two paths. >> Right, yeah. >> Cashflow financing and venture capital. >> Okay. >> So that's a startup model. The growing companies that are transform their growth business with token economics, those would have long odds. Those are the best deals. >> Okay. Then there's like the third deal. Well we're out of business, throw the Hail Mary, repivot. (laughs) Right, so categorically, you're starting to see the shape of the kinds of swim lanes of deals. >> Okay. >> Okay, pivoting, that Hail Mary. Okay, you can evaluate that pretty much straight up on that. Startups need nurturing, right? >> Yeah. >> So the VC1 al-oc-chew works really well for startups because of the product market fits going to be developed. You got cloud computing so you can go faster. So you guys are nurturing startups. At the same time, you're also doing growth deals. >> We do. >> Explain the dynamic between those kinds of deals, how you guys approach them. What's the dynamic? What are the key things that you're bringing? Is it just packaging? Is it tech? So on, so forth. >> So with a lot of people, when they are on the advisory side. Primarily we look at the founder and the tech. What are they trying to solve? That is key. If it's a turd, you can't package it. No matter how you package it, that's not going to work. >> You can't package dog you-know-what. >> Yeah, exactly, okay. >> So that's one thing that we look at. The founders and their idea. Now their idea, can it be decentralized? Some models are meant to be centralized maybe so it doesn't work, okay. Like, see it all boils down to-- Let me break it down. We look at it. Okay, do you have an asset? Behind the scenes, is there an asset? Is that asset being transferred among parties? If you have an asset and it's being transferred, is there some central mechanism in between? Because if there is a central mechanism in between, that means you're going to be paying rent to that. Okay, all right. You have these things. Okay, great. Now you have your asset. Do you have that in between party? But in some of them, let's say you have money in your pocket. You walk, it falls down. Somebody else pick ups the money. It's his. It's a bearer asset, okay? So that's where bitcoin solved a very big problem. It was bearer asset. >> Unless they hack your wallet, then they take your money. >> Right. That happens in real life too, right? Somebody can take money from your wallet. So it can happen in bitcoin. They can hack your wallet. All right. So bitcoin was solving that problem. Now the second piece is a registered asset. And I mean by registered asset is take your car. You buy your car, you go to the DMV, stand in line, register. There's a record of data at the DMV in their central database. If somebody steals your car, the car is still not his. It's only if they can change the record over there in DMV. Then it becomes his. Now there maybe you do want the DMV to be there. Or maybe we can-- But the DMV being there, now you have a problem. They're going to charge you rent and they can decide, oh you know what? John, I'm not going to give him a license or a car in the state of California. They can decide, right? So that is where now you decide do you want to go the centralized route or the decentralized route? So we break it down to the asset. >> So there could be a fit for decentralized. I get that. >> Yeah. >> Let me ask you a tactical question, because I know a lot of entrepreneurs out there. They're watching and they'll hear this. A big strategic decision up front is, obviously, token selection. >> So it's pretty clear that security token works really well for funding and whatnot. Then there's a role for security tokens. I mean utility tokens. >> Yes. >> So do people, should they start from a risk management standpoint, a new company. So let's just say we had an existing business. Entrepreneur says, "Hey, you know what? We're doing well. We're doing 10 million dollars in revenue and I want to do tokenize 'cause we're a decentralized business. That's a perfect fit." Do they start a new company or do they just use the security token with their existing stable company? >> I would suggest, usually at that time, that's more of a legal question at that time. I don't know if I'm a lawyer to answer that. I tell them, you have a business. The business model is going well. If you're happy with it, let that be there. Make a new company. If your business model was not doing good, you might as well start from there because you figure out it's not working. But again, at that time, we tried to come up with this question. Are you trying to put the old wine in a new bottle kind of thing? If the wine is old, it ain't going to work. You have to get to that realization. So, here. >> People are being sued. So mainly the legal question is do I want to risk being. >> All right, let me hop in here. I wanted to ask, go back to something you said about censorship. I had this conversation with my kid the other day. I was explaining Google essentially censors your search results based on what they think you're going to click on. >> They do that. >> He's like no and then he thought about it and he's like okay, yeah they kind of do that. Okay, so that's an underpinning of we're going to take back the internet, right? >> Yeah. >> Okay, I just wanted to sort of clarify that. From an investment philosophy standpoint, you're technical, yet you don't exclusively vet or invest in infrastructure protocols and dig deep into what-- You read the white papers, but there are some folks out there hedge funds, et cetera. All they do is just invest in utility tokens. They're trying to invest in stuff that's going to be infrastructure for the next internet. Your philosophy is different. You're saying, we talked about this, we don't really know what's going to win, but we make prudent investments in areas that we think will win. We like to spread it around a little bit. Why that philosophy? May reduce your return, but it also reduces your risk. Maybe you could describe that a little bit. >> Sure. See, in general, picking winners in the long run has been-- It's a proved fact that nobody could pick winners. Like if you take active hedge fund managers. Active hedge fund managers, in the long run, if you take 10 to 20 years, they lag the S and P. So if you had money, if you give it to an active hedge fund manager, and so that you just had to buy the S and P, you will have beaten 93%. >> That's Buffet's advice. Buy an S and P 500. >> Buffet made a bet for a billion dollars or something where, you know. So take Warren Buffet for that matter, his fund is lagging too. In reality, all his stock investments are down. He put it in IBM at $200 after eight years, it's at the 143 or something, right? So realistically,-- There's a lot of luck element, okay. You can do all of the analysis and you could still end up buying Enron, Lehman, and Bear Stearns, right? >> Right, yeah. >> And at that time, see they were using some models that they knew 'til then. Most people, investment comes from, you have this background that you know, okay this is what I look at. Cash flow, discounted cash flow. Great. If that is there, price to earnings, I'm going to buy. But then an Amazon came, most of the traditional investors never invested in Amazon. They were like, it's a loss- making company. They never going to survive. But they forgot the fact that companies like that there's this network effect and once the people are there, at any point, Jeff Bezos can just turn off the switch and take off the discount. You're not going to change your shopping from Amazon at that point because this month I lost my 15%. We're so used to it so people missed that. Nowadays they see that, but when it came to Blockchain they're like, oh, no, no, this is a fad. That's what most people said. >> So we talked about discounted cashflow as a classic valuation method. I see guys trying to do DCF on these investments. I mean, we were joking about that. (laughs) How do you-- What's your reaction to that? >> If anybody's saying that if they come to me and I'm like you-- I don't know what Kool-Aid do you drink at that point because what cashflow are they discounting? There's no cashflow. It's not like you're going to get dividends from these tokens. There's no dividends. It's like can you find out how many people are going to use it. What is the network effect? And again, for that, a lot of people are coming with a lot of these matrices or matrix right now. But I think even that, they're trying to retrofit into it. They're like, oh I can use this matrix. But, really we don't know. >> So people tend to want metrics. Dave and I talk about this all the time. When people part with their money, they need to know what they're betting on. So the question is when you look at investments, when you spend cash, when you write checks, what is your valuation technique? Do you look for the l-- How do you play that long game? What's the criteria? Besides like the normal stuff like founders, disruptive, like you got to write the check, let's say. Okay, buying a token. It's got to be worth something in the future, obviously. >> So we look at that space, where invariably they are trying to disrupt. Is there a big market? And even if it's a niche market, okay? So we're doing an error chain token. It's a very niche market. It's just the pilot, the maintenance folks, and the charter people, or the plain charter guys. It's a very small market, but that's good enough. It's very niche. They can have an ecosystem between themselves rather than being incentivized to long game miles and stuff like that, right? It doesn't have to be a very big market. We just look at it, okay. Founder is good, he has an idea, it is a space that can be decentralized and people can come in and they feel that they're part of the ecosystem. See the whole thing with the token economy and a traditional economy like let's say I'm spending money to buy a stock. So I buy stock. As an investor, what do I want? I want maximum returns. The employee, he wants to get maximum pay. And the consumer who's buying the product, he wants to get it at the cheapest price. So there's a-- It start aligned, okay? The moment you give 'em the cheapest price, my profits go down. If I increase the employees' salary, my profits go down. So we are all three of us are totally misaligned. >> If I for an important point, do you favor certain asset classes, you know, token, security tokens, or utility tokens, or you looking for equity? I mean, maybe just ... >> Right now, we've moved away from the whole equity bonds, or any of those things. We are totally concentrated on the utility or security tokens. We don't mind if it's a security token or utility token. >> And if it's a security token, are you looking for dividends, are you looking for >> At that point it's some kind of dividend. >> So you're not expecting equity as part of that security token? >> No, I like to expect equity, but if they are saying okay my token, if people buy and if they pay me $10, and out of that you're going to get $1 back, okay that's fine. We don't mind that as long as it's legal and all those things we're fine because it just makes the process easier. Earlier you invest and you didn't know when you could get out of your investment. At this point, it's become so liquid, at any point of time within two or three months, the token is less to people are either buying and selling. We know, otherwise, earlier when we used to do Ren Chain investments, we would get into our product, have it it's time seven to 10 years to get out. And in the meanwhile, they say great stories. Oh we're doing great. Who do I check with that we are doing great? I'm not getting any dividends. Nobody's buying this from me. How do I know? Where am I? I really don't know. I can make these values up and on my Excel sheet and say okay we valuing this company at a billion. >> So your technique is to say okay look at the equity plays the long game. You need an exit on liquidity, either M and A or IPO. >> Yes. >> Now you have a new liquidity market, so you play the game differently. I won't say spray and pray, but you have multiple bets going on so you can monitor liquidity opportunity. So that's a new calculation. >> And it's a great calculation, also. Because see we're in the market and now we know at any point of time, we don't have things on our books that are like we don't know what the value is. We know what that price is because the market is there, the exchange is there. What other people are willing to pay for us doesn't surprise. It's like saying my house is worth a million dollars. Actually it might be worth to me. It depends on what people are willing to pay me. >> Right exactly. >> If I have to synthesize this, you're taking high frequency trading techniques with classic venture investing, handling token from those two perspectives. >> Yes. >> High frequency trading meaning I'm looking at volatility and then option to abandon and get rid of whatever or whatever. >> The only thing is, we're not exiting our positions. We are in the long game. We believe the score market is supposed to at least reach eight trillion. When we started this whole investing, at that time, the whole market was at six billion and we said okay this market, based on our thesis, is supposed to reach eight trillion. Until then, we keep buying, okay? >> But to your HFT, you're not really arbitraging. >> No, no, we're not doing any of those. Because see >> They're applying real time techniques to token evaluations so they're game is try to get into a winner. >> Yes. >> With some tokens. >> A lot of the funds, they're doing this arbitrage more. They're trying to do arbitrage. But the problem is they're missing the big picture that way. So, arbitrage works in a very tight market. So S and P, let's say, somebody's doing 5% return on S and P. The guy with a arbitrage is coming and saying I made five point three, 5.5% or 6%. That's great in the equity world. Now, I want returns last year are 10 x or 30 x or 50 x. And somebody comes and tells me I made an extra 0.2%, doesn't really matter to me. I'm like instead of wasting that time doing arbitrage and paying taxes, I might just hold it. >> You believe in the fundamentals. >> You guys are in New York. Obviously, Arcadia Crypto Ventures, that's how they get ahold of you guys. Final question for you to end the segment. As new real pros come in, and let's take New York as a since you're in New York. The New York crowd comes in or the Silken Valley comes crowd existing market players other markets come in here. How important is optics packaging and compatibility with the sector, meaning I just can't throw my weight around on the hedge fund scene. We do it this way, I got money. Because people here have money. So what's the dynamic of pros coming in, we're seeing institutional folks come in, we're seeing real pros come in. They've never been to Burning Man. So, you know, they get that Burning Man culture exists, but this is not a Burning Man industry. >> Right, right. >> Business doesn't run like Burning Man. Maybe it should, that's a debate we'll have. Your take. >> So the new funds that are coming in, so they have a fear that they have missed out. They are missing the picture that this is just the beginning. So they've seen that this industry has gone from six billion to 500 billion in a year or year and a half. They're like, oh my god, I missed it. >> It's got to be over. >> So I have to write these big checks to get this. We don't write big checks. We write much smaller checks because we believe that if a founder is raising money, he has to raise it through small checks from everybody. That means all those people are really interested in this. And they're all of them really want the token to go up. Whether it's the investor, the user, and the employee who is working there because all of them they're interests are aligned. The moment you give a big check, so let's say you could raise 10 million from 10,000 people or you could raise it from one person. So when the big check is there, let's say I go to raise my money. There's this fund who's missed it and he says here's 10 million dollars. Okay, now I've got me and the fund and my tokens. Nobody else knows about my tokens. My tokens are as good as valueless. Now the funders looking okay, I need to exit. Nobody knows about my tokens. The fund is the only guy who has my tokens, he's trying to exit. Obviously the market is going to crash. There's no market. And he's like why did I get into this. So he missed that point that you need people around you. It's not just you alone. See, earlier days when ... >> This is your point about understanding how token economics works. >> Yes. >> So having more people in actually creates a game mechanic for trading. >> Because then you know that you're not the only guy interested in this. And earlier venture capital space there were these bunch of few venture capitals who wanted to capture that whole thing and tried to sell it to the next guy. Here, I'm what I'm saying is, we all have to come in together. We all can be together at the same price, which is good because the small person has, the common man has a chance to be a VC right now. Earlier you could never be a VC. I could only see Google, after IPO. I could never get it at what KPCB or Sequoia got it at. I had to wait 'til they got through CDA, CDB, which they bought at five cents. I would get at about $40 maybe. In this case, the big fund has a lot more money than me, but I can have my small 5,000 or 10,000. I can invest in the ICO. >> If you picked the right spot and you were there at the right place, the right time. 'Cause you are seeing guys come in and try to buy up all the tokens early on. >> They're trying to do that. They don't get it, but they will understand. So it is a learning (mumbles). Even they will evolve. They're like okay this is not how it works. And you have to make mistakes. >> Sorry, got to ask you one final, final since you brought it up. More people the better. So we're hearing rumors inside the hallways here that big wales are buying full allocations and then sharing them with all their friends. >> Possible, it is possible. >> We see some of that behavior. Dave calls it steel on steel, you know. Groups, you know. I'm going to take this whole deal down. We see that in venture capital. Used to be syndicates. Now you seeing Andreessen Horowitz doing the whole deals. That kind of creates some alienation, my opinion, but what's your take on that? I'm a big wale. I'm taking down the whole allocation. >> It's okay. Some of those things are going to happen, okay. It is fine. The only problem is usually when that happens the big wale who takes it he will realize very quickly. >> He's got to get more people. >> He needs more people otherwise he might be able to exit to his five buddies who were always taking it from him. Now those guys, they also have to exit at some point. Nobody knows about the product. Might as well just take a small piece, even the founders in this case typically in a token model. Founders who've taken 20% or 10% have done better than founders who took 60% of the whole tokens. >> Right. Nithin, great to have you on. Love your business model. Arcadia Crypto Ventures. They got real pros, they got a wale, they got people who know what they're doing, and they're active. They understand the ethos. I think you guys are well-aligned and you're not trying to come in and saying this is how we did it in New York before. You get the culture. You're aligned and you're making investments. Great perspective. Thanks for sharing. >> Thank you so much. >> This is the Cube, bringing the investor perspective live here in the Bahamas. More exclusive Cube coverage. Token economics, huge opportunity for entrepreneurs and investors to create value and capture it. That's Blockchain, that's crypto, that's token economics. I'm John with Dave Vallante. We'll be back with more coverage after this short break. (futuristic digital music)

>> Announcer: Live From Nassau in the Bahamas, it's theCUBE covering Polycon 18. Brought to you by Polymath. >> Hello and welcome back to our live coverage of Polycon 18. We are in the Bahamas. It's theCUBE's coverage of the cryptocurrency, ICO's, blockchain, the entire industry on token economics. This is sponsored by Polymath, they're the host, hosting us here. They make a securitized token platform to help people tokenize their business. I'm here with Dave Vellante, and we're here with Al Burgio, Cube alumni, one of the only Cube alumni here. Now we're adding more, good to see you. >> Thank you for having me, guys. >> Thanks for coming on, Al, you're the CEO/founder of a blockchain venture, Fusechain, and open-source project, DigitalBits. >> Correct. >> DigitalBits.io, we talked about this on studio in Palo Alto, around the project, how's it going? Are you doing an ICO, what's happening, what's the momentum, talk about what's going on. >> Well the momentum is great, um, as we can see by an event like this. I mean, the attendance in phenomenal, the discussions are great, and there's definitely an ongoing movement towards blockchain, cryptocurrencies and so forth. And we're obviously very excited to be a part of it, and equally so been experiencing phenomenal success while we've been in stealth mode, and we're excited to be sharing that in the coming weeks to the public. >> I always try to get data out of you, but you're like an iron trap, man. You like, will not reveal it. I saw you in the hallways this morning, and even last night at dinner, I mean, surrounded by investors you're getting, and people throwing their cards at you. That's a good sign, I mean, but it's still early. This is an emerging ecosystem, and you're a senior entrepreneur, so you're attracting that kind of interest in the venture solid. What's the story, what's the story of these investors? What are they interested in, why are they approaching you, why the appetite for your project? And how are you approaching as a seasoned ICO, most people want to promote the hell out of their opportunities. You're not, you're taking a different approach. >> Well we definitely, obviously we'll turn on the marketing engine with a full tank of gas. And you'll see that in the coming weeks, but we've been able to definitely have, you know, a significant number of conversations while in the stealth mode phase. Really I think what's attracting a lot of the interest is that we've identified a massive market opportunity. And really where blockchain technology can help, among other things, bring a liquidity to a space that does lack liquidity, and that for us, is the loyalty rewards market. It's a multi-billion dollar market, and we feel that what we've built with the DigitalBits protocol and the DigitalBits network is really going to solve a big problem out there for businesses, enterprises, as well as consumers. And you know, we're excited to be bringing that to life, and with phenomenal support from ecosystem partners, among others. >> Let's talk about the show. We're going to bring you back tomorrow when we wrap up, cause I know you got a lot of meetings and scheduling, you got to check out the sessions, so I want to get your take on the show after the fact. But going into the show, you have some early conversations, some early data's coming in from these hallway conversations and interviews. What are you seeing, I mean, what's the bottom line? Is it ICOs are hot, the SEC is coming down and putting out subpoenas, a wave of subpoenas recently. The advisor role, you got venture capitalists, it's unregulated, they're selling, they're pumping, they're dumping. You know I know of a couple people that are in some coin deals that are, you know, venture funds, but they're also marketing. >> Yeah. >> The same thing, so they're getting their hand slapped. What's the state of the industry? >> I think, you know, there's high energy in the space. It's moving really fast, and some organizations are getting overly anxious, moving perhaps a little too fast without getting their ducks in a row, and maybe perhaps that's resulting in some wrist slapping. But overall, you know, this is a big evolution that's happening. And what we're seeing obviously is a new asset class, but it can take the shape of perhaps the security, or utility, and you know, the law applies to these things differently. And so, you know, people need to do their homework. >> So you were at the VideoCoin event last night. That had been very successful. We're going to have Halsey Minor come on shortly for an interview, seasoned entrepreneur, he's back at the game. I mean, this market's attracting pros. We had the Goldman Sachs guys now run BlockTower, institutional investors, you got pro entrepreneurs coming on, and you got the young guns coming up. I mean this is really kind of a really robust, fertile environment. >> I think it's only the beginning. We're going to see a tremendous amount of ongoing pedigree enter this space. Every day we're seeing evidence of ongoing validation, and you know, it's by no coincidence that we're already seeing some phenomenal pedigree, and I think you know, like I said, it's just going to continue. >> What's the one observation that you would share to people that are watching about this event? Obviously lot of Canadians here, you're Canada living in the U.S., but it's not just Canadians, it's a global economy, what's your observation? >> Sorry? >> What's your observation of the show? >> There's definitely, if I look at the attendee list here, it's this convergence that's happening. So you have Wall Street or the Canadian equivalent, which is Bay Street, you know traditional investment banking, brokerage-type institutions that are here, very curious in terms of how blockchain will impact the securities markets. And then you have the innovators that are on the forefront of this really driving the technology that's going to support and help even that industry evolve. So there's a lot of talk here, in particularly as it relates to that category of things. >> Lot of whales, a lot of influencers, a lot of advisors, a lot of money here, lot of action. >> Lot of action. >> All right, Al Burgio is the founder and CEO of Fusechain, and the sponsors of DigitalBits.io, it's a great open-source project, check it out. I'm going to still try to get some information out of you, cause you're still in stealth mode, but you're good. >> Thanks for having me, guys. >> Thanks for coming on. >> Cube alumni here in Bahamas for theCUBE coverage. I'm John Furrier with Dave Vellante. More coverage after this short break.

>> Announcer: Live from Nassau in the Bahamas, it's theCUBE, covering Polygon 18, brought to you by Polyman. >> Welcome back everyone, we're here live with theCUBE's exclusive coverage of Polycon '18. We're in the Bahamas, I'm John Furrier with Dave Vellante, co-founders and co-hosts of theCUBE. We're here with special guest Halsey Minor, entrepreneur, serious serial entrepreneur here on theCUBE. Halsey, great to have you. You're the founder and CEO of VideoCoin, a successful ICO. You had an event last night, kind of an investor thank you event out in the Bahamas Country Club, there, you're here. Man, you're a pro, you're back in the game with this crypto. This is the wave, I mean, I want to get your perspective 'cause you see waves. You've seen CNET, you started that from scratch before online news was anything, you were the pioneer in that. First investor, first operator in salesforce.com, a variety of other successful entrepreneurial adventures. You've got a nose for the waves. So just put it in perspective, what is this wave? >> Yeah, so I actually have an interesting story because I've actually started around 2012, and I launched my first business in 2013. So, the first problem that I saw was, how do you get your money from your bank account and buy Bitcoin? Still a problem, hasn't been fixed, right? So I tried to fix that. Oh well, I did to a certain extent, I did fix the problem. So what I did was created effectively a coin-based converter, and I started out and was going to make it very easy for you to take your bank account, connect it up, seemed logical, and then buy, you know, the currency. The company was called Bit Reserve at the time. So, no bank would touch anybody named Bit in their name. And it was even worse than that, all of us who put our company name into our bank account, we had our bank accounts basically shut down, right? So, I started getting an idea how difficult this was going to be, you know, Coinbase getting a Silicon Valley bank account early on to become a conduit, was very fortuitous. It ultimately took two and a half years and buying a big chunk of New Jersey Bank before we were able to allow you to connect your US bank and your European bank into Uphold to buy currency. So it's really Uphold, Coinbase, maybe like Gitbit, very, very few who've been able to crack that problem. We literally had to buy part of a bank to do it. So that's where I started. So I really looked at it very much as money, as a new monetary system. And I still see unlimited opportunities in that area. It wasn't until really a couple years later that I saw the block chain as the new architecture for the computer, and what I mean by that, is what Bitcoin proved was that if you gave people software and they ran it on their computer and they got paid in some funny kind of digital money, they would convert that money back into fee hock, you know, dollars, and they go buy more computers. And nobody asks anybody to be a Bitcoin miner, they just come and showed up the more, the bigger it got, the bigger the opportunity. And what's most interesting is when you make money or lose money, depends on your cost of power. So for most of these Bitcoin miners, they're near hydroelectric dams. So what I realized, and VideoCoin is in the area of video. It's a direct competitor with Amazon web services, everything they do in video. So there's, it's called encoding which is compress it, there's storage and there's streaming, three basic pieces. So what I realized was, two things: first of all, 20% of servers and data centers are not used at all. They're called zombies, right? So all of these people, the Airbnb, Uber model, they can all of a sudden start earning on assets that are doing nothing. But even if you look out into the future, if video mining, which is what we call it, ends up being like bitcoin mining, then what happens is that the whole thing works on the cost of power. It's not good for Amazon, if they have to be competitive solely based on the cost of power. >> Dave, so he's got an ICO going on, we looked Filecoin, right? So Filecoin was storage and that's infrastructure. You go to VideoCoin, we're streaming right now, we've got video. This is kind of like an interesting digital media infrastructure ... >> Well ... >> What's your take compared to Filecoin? >> What's interesting to me is that I'd love to get Halsey's input on, because you've got the full spectrum here. You started in publishing and now-- >> With five TV shows. >> Dave: Okay. >> Yeah, CNET had five TV shows. >> So right, and so very digital from the beginning and relatively ripe for disruption and then now into banking, which really hasn't been disrupted, but we all think it's coming. So that's an interesting spectrum. It's not Negroponte, I don't think, bits versus atoms, because you've seen, you know tax season get disrupted. That's atoms. So what are the factors that make an industry ripe for disruption? >> Well, I mean the obvious thing is really disruptive technologies, right? And so for the Internet, for me, it was, I started the company in '93 to be on commercial online services like AOL and I saw, I guess, the first browser in '93 and, actually at Sun, and it made me believe the Internet was going to be this incredible thing. And it was really seeing information coming in, and, you know, the Internet wasn't that big back then but I watched a gif of a storm, you know, from one of the weather centers, and so I realized that this information thing was incredibly interesting. And so what all of us did, the way I thought about it and seen it, is we're cracking open databases and we're just letting people have the information. And it was silly things like the ability for me to live in San Francisco but know what the weather was in New York and pack appropriately. This was the magic, I mean, we take all of this for granted. This was magic, right, at the time. You had to go out and buy a USA Today-- >> Check the stock price. >> Yeah, exactly. >> Call your friends in New York. >> Yeah, that was magic. So at a very high level, it was just access to information. At a very high level, what this is is combining information and money into a packet. Right? So now what we can do is, I can gather information from servers about what they're really doing and I can also be paying them at the same time. So you know, it would have actually solved a lot of problems around the Internet, because on the Internet getting paid was hard. And there were so many times we'd go into a meeting and we'd agree on the partnership but we didn't know who was paying who. You know? (laughing) Am I paying you for traffic or are you paying me for content or you know, how is that going? So this kind of comes with a built-in payment system, which I think is what makes it so incredible as a system. >> So we're-- >> And more stable, I am inferring, long-term anyway. Because that whole system that you just described on the Internet all blew up when the funding dried up. >> It blew up and I think, you know, I think there are certainly a lot of risks. The number one thing I would tell everybody in this area is, you know, be very cautious about what in you invest in. There were a lot of companies that, uh-- so my whole description was sort of the Internet bubble was that people say that, well, you know, nine trillion dollars was lost in investing. >> With everything that happened though. >> And when I-- >> The plus.com happened, everything happened. >> And what I said to the people is that it would be great if people had just invested in the survivors, but who knew what they were? The only reason the United States emerged, with, you know, with Salesforce and Ebay and Amazon, etc., the only reason that we emerged dominating the world was 'cause we invested in them all. Right? And so-- >> Even all those things that were called silly ideas actually happened. >> And they ended up happening. It was all a matter of timing, yeah. So you know, what's happening now is very much the same thing. You know, a lot of people are going to invest in a lot of bad ideas, right? But this is all necessary for the good ideas to get funding and for something big to come out of this. >> So I want to get your take on with the VideoCoin and in comparison, you mentioned Amazon, right? So our observation, obviously we're recording all these shows, Amazon web service, among others, the big guys are sucking all the oxygen out of the room. Look at the big whales, Google, Facebook, Amazon, I mean, we can't even run any ads on our site. We actually prefer to just push the content all over the world because it's hard to build a destination site. I mean, people going out of business in the media business. Video, your choices are Ustream now owned by IBM, Twitch TV became Amazon which was Ustream before that. Build your own custom player, set up a CDN, which is actually hard and expensive. Okay, so do I do Facebook live, again controlled by Facebook? So there's an opportunity that you're pursuing. Did you have that in mind? I mean, we see it every day and we know this, but luckily we have a good deal with Ustream, but the point is that is going to be up too. What's the alternative producers, content producers who have streaming, whether it's a pro set like this or someone who's going to have unlimited access to video streaming? >> So the real issues are cost and innovation, okay? And so Hanno Basse, who's the CTO of 20th Century Fox and one of our advisors, right? And all these media companies have the same problem. Nobody is watching broadcast anymore that'll cost them nothing and everybody's now streaming in, which is one-to-one and has a cost associated with it. So that's why, and even worse, videos going to 4k, 8k, VR, data that's going up like this-- >> Data isn't growing as fast either. >> So all these companies are confronted with all these costs and they can't monetize them. Google can monetize it, Amazon can monetize it. >> Tel cos ... >> Netflix, yeah. >> Ouch. >> But they can't monetize it, so it's all cost effectively and no revenue. So the one thing that we offered to VideoCoin by using all this research is we cut the cost 60 to 80%, so that's huge. The other thing is, in the early days, everybody bought Salesforce because it was cheaper. It was 1/10th of the cost. And I used to say to people, in the long run, it's going to be way more innovation, right? Because they're constantly, every quarter, rolling out a new version, right? And they're going to have the ability to connect, an API effectively, and the ability to connect, and the whole ecosystem can arise around that. And that's why their conference has 140,000 people, Dreamforce, because there's a whole ecosystem. >> It's sticky as hell too. >> That's right. >> Hard to get out. >> That's right. So while we are 60 to 80% lower cost, we're also effectively open source at the same time. So the ability to have a community arise and develop software. And so right now, you've seen this huge consolidation because it's actually kind of hard to build new kinds of apps on top of Amazon web services, right? But if you have this open system, and you have all these people are contributing code to it, all of a sudden, there are apps, video apps, that they'll be literally a whole new-- >> So you're going to have an open source contribution piece to your ... ? >> Yeah, I mean basically, everything we build is open source, right, so you know, all the way through to the network. So it creates a palate for people to start innovating in video. Because really what's happening is a lot of innovation is getting hurt by the fact these big guys totally dominate it, right? They don't want to see any innovation outside of the funds they bring you, right? >> Right, so you've heard my rap on this. I'd love to get Halsey's thoughts. So the big guys, you're right, have won. It's like centralization and victory. People here are saying, "No, we want to take it back." The premise that I hear a lot is there's been no innovation in protocols in, you know ... Google built gmail on SMPT, HTTP, DNS, it's all government-funded or academia. >> Yeah. >> And it's just a lack of innovation. >> That's right. >> And now, this is why I counter Warren Buffet and Charlie Monger, is no, we're building out a new set of infrastructure. >> That's right. >> Okay, so where do you guys fit into that? What are your thoughts, first of all, on that premise? And where do you guys fit? >> Yeah, I mean, look, you've got these huge companies that are totally dominant and even though they are, in fact, you know, innovative Silicon Valley companies by label, okay, they have all the same issues-- like I say to people, nobody today believes that anybody can put Amazon web services at risk. If I went to somebody and said, "You know Amazon web services which are worth 3/4 "of the value of the company, or 5/6, "depending on who you talk to, "there's going to be something after that." It would literally be a new concept because everybody's convinced this is Amazon's-- >> John: The winner. >> Yeah, this is their big, this is the way they make all their money-- >> Alright it's over-- >> Right, and if you say to somebody there is going to be a next thing, they would look at you like, you know, like you're foolish. But the reality is when you start changing some basic, underlying infrastructure in the Internet and you start doing things, decentralization, this is the word we're going to be using, you know, we're going to see it in solar power. And solar power is, you know, on a cost to benefit like this so, you know, it isn't going to be long before we're going to have power in our house legitimately, not like, you know, some science-fiction thing, we'll be legitimately powering most of our needs with solar that we connect because the cost is coming down so much. So we're going to see all of this decentralization happening. And in the world of computing, decentralization means that this is going to be the most efficient that computing can ever be. Because just compare using the Uber and Airbnb model of saying anything that's excess, let's turn into value. And I've heard that for every Uber driver, 15 cars go away, right? So the decentralization is going to have a profound effect on the economy and it's going to have a profound effect on these big guys. >> Oh, even those guys are going to get disrupted. >> They're going to get disrupted. And they're 20 years old, it's time for them to get disrupted, I mean, you know ... >> E-commerce is a 20, 30-year-old stack, some say 20, 20-year-old stack on e-commerce, all these things are ready, even what we would consider modern, you know, the miracle of saying oh the weather in New York. I mean that magic is here now in a new way. So I got to ask you the question-- >> Taken for granted. >> I got to ask you a question because you brought up that point. In your history of your career as an entrepreneur because you're doing stuff that's always new and cool, and probably before anyone else sees it, can you talk about some of the ideas that you've seen, not necessarily your ideas, as well others, where the investor said, "That's the dumbest idea "I ever heard"? What billion dollar opportunities have you seen emerge that investors have said, "That's the dumbest idea "I've ever heard"? >> Well, actually, the one that is Salesforce. No VC would put money in. It was really kind of backed by Larry Ellison and me early on. And what's so-- >> John: Google was a dumb idea. We want portals, not search. >> Yeah, so the bet that nobody would take in 2000 was that companies would take their sales information and they would put it in the cloud. Nobody would believe that. Not anyone. And so I used to joke, I used to say the only way it's going to happen is if the sales guy's been waiting two years to get his sales management system in place actually runs over the head of security in the parking lot. That's what it's going to take because it's outsourcing and, you know, the security guys say, "Oh, no, no, no, "we're going to lose all of our data", right? It didn't matter that Salesforce had way more security guys, you know, than these guys had and better, you know, working internally. Nobody believed in it. Literally nobody believed in it. >> This is your point about the decentralization, no one's going to believe, "Wait a minute, "that could never happen." So, in a way, the investor thesis should be, "I want to invest in the dumbest ideas," because that might be the best idea. >> It is. I mean the big, obvious ones that attract billions and billions of dollars, I mean, how many of those end up actually not turning into anything? Right? A lot of them, right? So CDAT was profitable on nine million dollars. I believe that Yahoo was profitable on three million dollars. I think Google was somewhere around 12 to 15 million dollars, right? So there are a lot of these business-- Amazon's obviously the outlier. >> John: It's still not profitable. >> Yeah, it's the outlier. But you know, a lot of these businesses were started by people who used a relatively small amount of money and were very creative. You know, you're going to hear this over and over again. Microsoft never needed any money. They accepted five million dollars from-- >> John: (mumbles) >> Yeah, so this happens a lot. And in fact, I think it's very dangerous when in year five, you're losing three hundred million dollars, right? I mean, five hundred, or whatever it is. There are a lot of things that can go wrong. >> What's the role of community? Because we heard the guy from Locktower Capital say something I thought was really profound, "I don't need VC because, if you're a startup, "you don't have to waste your energy on board meetings "and other things, you can build your business "and use the community as your benchmark." So this plays to your whole picking up the slack kind of thing in efficiency. So entrepreneurs can be more efficient in these communities. This is where the cryptocurrency Blockchain is thriving. What's your thoughts to that and how do you see that community interaction progressing? >> In my career, there's been a sea change in sort of the culture of technology and really everything, right? You know, when I started out, everything was very hierarchical. You know, it's like how far up the chain you got that measured how successful you were. Now it's how big is your network, right? And you know, I was talking to somebody the other day who said VCs are going in and they're measuring these companies' success by how many Instagram and Twitter accounts they have and there's massive fraud going on because people are buying these accounts to pump up their numbers, right? So people are starting to value by the breadth of your network. >> John: Reputable network. >> Reputable, yeah. >> John: Not fake network. >> Yeah, but what I heard is there's actually a Twitter application which I haven't seen that'll go in and tell how many of 'em are real and how many of 'em are not now. So really the community becomes almost the measuring stick for your value. You know, before I'd seen it, I had users. Today, everybody has community members. And so, it becomes sort of, kind of like everything I guess. >> And our media model is all community-based which is, we just naturally go there because that's where the data is. >> That's right. >> That's where the feedback is. >> That's right. >> I mean, I can't get feedback from Facebook and Google, they own the data, right? There's no letters to the editor on Facebook. There's only hate comments. >> But you know before Microsoft and all these came, you know, IBM dominated the world. Nobody ever thought they would go away. AT&T dominated the world and nobody ever thought that they would go away, you know. >> Alright, personal question for you, I got to wrap because I know you got to go. Appreciate your time, by the way. Great story, we could go on for another hour. Personal note, what is the most compelling thing that's moved you, as an entrepreneur, in the crypto market? Like, something that, it could be an anecdote, it could be a situation. When you look at this opportunity, as the world's going to eventually be re-instrumented with data, with new open source and community, what's something that's surprised you or moves you as an entrepreneur saying, "This is freakin' awesome"? >> So this hasn't been done yet but it will be done. So this is what actually motivated me to start Uphold was the ability to turn your phone into your bank and to be able to exchange money and primarily really solving the ability for the poor to be able to move money around without having 10 to 20 to 30% of it taken away. Everybody's talked about this, remittance, and so far, nobody has actually solved that problem. That problem is going to get solved. I mean it's inevitable that the phone becomes the bank. There are so many regulations that are designed to stop that and it's extraordinary. Once you get into it and you see all the ways that have been set up-- >> Byzantine system. >> this problem should have been solved long ago, right? And every phone should be a bank. I mean, it can be connected to a bank, but every phone should have my money in it. I should be able to send it to you instantaneously. >> It shouldn't be like getting into Fort Knox. >> Yeah. I mean, computers, banks have computers, they could make this happen today. They just don't want to. So I think the most profound thing for me is the problem is still not solved, that the problem I set out to solve, which is really creating a more equitable financial system. And we live in a country where the banks make about 37 billion dollars a year in bounced check fees. Think about that. Thirty-seven billion dollars in bounced check fees. So if you just take that out, you just take out, 'cause it all affects people in the lower socioeconomic scale, you create a revolution. Just getting rid of the bank fees that you'll pay for bouncing checks. >> Well, I mean the narratives, like the narrative of taking down gatekeepers or central authorities, is the premise of this ecosystem and you could take that example and apply it to thousands of use cases. >> And banks are rapacious, flat out. American banks are the most rapacious 'cause no other country would allow 37 billion dollars to be taken away in bounced check fees. >> Halsey, congratulations on your success again and great to see you on theCUBE. You're now a Cube alumni, so ... >> Congratulations. >> We hope you'll come back again. >> Yeah, thank you guys. >> We're going to get you in our telegram group, now you'll be 42 members, we just turned on last night. (everyone laughs) We appreciate it and congratulations. >> Thank you very much. >> Thanks for your insight and experience and commentary. Halsey Minor, experienced entrepreneur, pro, here in the trenches, establishing a great new venture. We'll be back with more live coverage after this short break. (electronic music)

(energetic electronic music) >> Narrator: Live, from Nassau, in the Bahamas it's theCUBE covering POLYCON18. Brought to you by, Polymath. (attendees chatting indistinctly) >> Crew Member: So, go, we're live. >> Okay, we're live, welcome back! This is day two of our exclusive CUBE coverage of the Bahamas' POLYCON18 It's a security token conference. It's where the world of cryptocurrency, Blockchain, Bitcoin and everything comes together around powering a new value economy. A new kind of decentralized internet. This is the biggest wave that I've seen in my lifetime. It's really bigger than all the other waves, combined. I'm here with Dave Vellante. We have two days of wall-to-wall coverage. And the bottom line is, Dave, we are seeing historic, massive, wealth creation. We're seeing crypto-billionaires here. I mean, people are new money, they're old money and a massive new landscape is emerging. And the tell-sign of this is, institutional money is coming in, real professionals are coming in. It's moving from a culture of Burning Man and cult of the personalities to real industry formation. You see that with companies coming out with real commercial opportunities. You're seeing ecosystems developing, and you're starting to see biz dev. And it's been probably at least a couple decades since I've gone to a conference where this kind of computer-industry movement is happening where the players are doing deals in the hallways. You're hearing people having substantive conversations around how they can work together to create tons of value. This is a dynamic that is absolutely happening. And we're seeing a lot of wealth involved, from people who have made tons of money, billions of dollars in Bitcoin, to kind of, new migration coming into the sector from Wall Street, from other global markets. We're seeing a sea change of democratizing, with an open-source ethos. To me, this is something that we've never seen before. It has all the elements of the modernization, business model modernizations, technology modernizations, real, disruptive, enabling, technology at the heart of it. And some people ask questions like, "How do we make money?" Bottom line is, there is money being made. How and with who, is the real question. So Dave, day one's over. We were out 'til one in the morning last night, working the hallways, having great conversations. I probably talked to at least six whales as they're called, billionaires in the business, and the vibe is the same. We're here to play the long game, we love this market. There's a culture of ethos, of partnership, and openness, and unwritten rules, and tons of activity. Sure there's bad actors! But there's a lot of great players here, and they are starting to crack down on behavior that's not right, because this is a funding dynamic. It's a funding growth companies dynamic. It's a liquidity dynamic. All these things, classic, business model modernization, happening with a massive wave, your take. >> So, let's share with our audience. Well, first of all, this is an investor conference. It's the first conference built around the topic of security tokens. And we can, maybe, explain that in a moment. But, I have, John, I have never seen at an investor conference, which I guess this is, but it's more than that, Blockchain, technology, etc. But, I've never seen such diversity. Like you said, there's new money, there's old money. There's tons of millennials. 100% of the people here are doing deals. >> Yeah. >> And the conversations in the hall, it's all about ICO's, security tokens, utility tokens, protocols, white papers, business models. So, a lot of diversity. Some super smart millennials. Developers that really understand this stuff, and a lot of money. >> And, more women in tech here than I had thought. >> Yeah, I think it's slightly higher proportion. But, you're also seeing, just really interesting, you're seeing VC's who aren't going to sit back and wait and get disintermediated. You're seeing developers who have made a ton of dough, that are now sprinkling the wealth. You're seeing private equity, you're seeing hedge funds. You're seeing, like I say, traditional VC's, new types of VC's. And, very importantly, you're seeing a major diversity in cultural impact, nationalities. And this is a heavily Canadian show, because the organizers of POLYCON, the folks who started Ethereum. But, a lot of diversity in terms of where people are coming from. It's not just U.S. based, you know, MBA's-- >> Silicon Valley. >> Yeah. >> I mean, the game's changing. The other thing I observed is, we're seeing validation of my premise, a couple weeks ago when I was in Washington D.C. with Theresa Carlson, the most powerful woman in D.C. She's also the chief, and head of, Amazon Web Services' global public sector. Is that the global national stage, the nation building, the digital nation transformation, is part of it. Two, the validation that societal change and entrepreneurship, that was used to be involved in non-profits that never went anywhere, you know, these philanthropy projects. Social entrepreneurship, or societal entrepreneurship, as I call it, is absolutely real. And, in this culture, you're seeing people with Bitcoin, and crypto-currencies funding mission based activities. Now, the younger demographics, I think, lean towards that. That's pretty clear in our reporting and our data. That the younger generation wants to work for companies and communities that have an ethos of mission base. But, mission base is not about changing the world, it's about saving the world. And, this is real, you're looking at Blockchain ventures that track water supply. You're looking at Blockchain ventures that track, you know, food supply. You're looking at solving world hunger kind of challenges. And I think the tell here is, Blockchain is used to identify markets and incumbents, or opportunities where there's idle resource. So, whether that's using compute in a P2P way or solving the world hunger problem, anywhere there's an opportunity to be efficient, Blockchain is being used to solve those problems. And, the creative talent is the technology providers. This is a completely new dynamic. One that Silicon Valley pays lip service to. 'Cause they don't actually do societal change. They say they do, but, they build apps and platforms. So, I think this is a nuanced, but an important game changer for the industry, and the global economy and global entrepreneurship, because you can do things now that can be global impact based investing, and technology investing, in one shot. So, you get a double down effect for change. This is not just cloud computing, have more power, faster, better apps, more monetization. Sure, but now you have over the top, impact to users. The community dynamic, and the societal change is very, very real. That's a big driver of this ecosystem in terms of market selection, human capital, technology, leverage, and now financial. So, it is pretty intoxicating here. People are geared up, they're energized, and it's just pretty phenomenal. >> So, many people in our audience are still probably saying, I just don't get it. So, let's go back to 2008 when Satoshi, whoever that person was, writes this, I think it was an eight page white paper. And, remember what 2008 was like, banks were blowing up, too big to fail, the economic system was melting down, and guess who paid for it? The taxpayers. So, some libertarian minded people said, screw that, we're going to change the world. We're going to create a virtual currency and we're going to take back what the government is taking from us. Essentially, okay. So, that started people like, what, I don't really get it. That has formed a whole new, and people often say, it's not about Bitcoin, it's about Blockchain. Blockchain is building out this whole new internet. And we've talked about that all week. But, what you're seeing now is this concept of a value store a virtual value store, and people leveraging that in so many different ways to build out this new internet. And, they're building protocols, they're building apps, they're building new capabilities that we haven't seen before. That brings state to the internet, a state of communications. Now, let's talk about the investor profiles that we see here. I want to start with developers. So, developers built the internet, and most of them didn't really get paid huge money. Here, many of the developers are like multi, multi-millionaires flying in on private jets. Okay, so why? Because they've developed a new token that they, basically, invested in with their sweat and their money, and the price has gone through the roof. Bitcoin, Ethereum, etc., VC's. VC's, you know, they elbowed out, well they're elbowing their way back in. Private equity, hedge funds, big money. And there's two paths there, one is, guys that read white papers, real hard core technical guys who say, I'm going to invest in just this infrastructure token, utility token. Other guys who say, You know what, I've got big money, I don't really understand the technology, but, I'm going to sprinkle my money around and try to get a big hit. You got angels, you got entrepreneurs, you got superstars that have become billionaires, that are mission based. All these, and here's the thing John, and I want you to sort of explain this to the audience. You have these investor ecosystems forming. It's like the PayPal Mafia, and they're basically buying up all the tokens early, elbowing other people out. You know, one investor told us, We're fighting steel with steel. Steel beats steel, you have to form, it's like Survivor Baha Mar, right? And they're forming groups, and they're eyeing each other, attacking opportunities, elbowing each out, and it's really interesting. >> I mean, it's happening, big time. And, this is healthy, I think, in my mind. Emerging ecosystems have this behavior. The early days of Silicon Valley was very much the same. And it became very much war, now in Silicon Valley. See, people don't syndicate deals as much as they used to. Some are and some aren't, but the notion of teamwork has always been part of Silicon Valley. The old saying is, venture capital is a team sport. That is very much what's going on here. Now, they team up because they have to, but, steel on steel implies art of war. You know, we're going to take more allocations down. That's because the new pro persona of the investor, Dave, is the billionaire developer who captured value from the technology that they built, not someone else, not some central organization, they're the players. Developers, and or the actors who were making money in the early days of Bitcoin, cryptocurrency and Blockchain actually are also starting funds themselves. So, that is a new dynamic. We've never seen that before, where you see a wealthy developer become rich and then also start investing at the same time. You have a smarter investor there, but they're doing it in packs and herds. You have a tribe mentality and people are starting to recognize that, okay, this group here loves Burning Man, this group here is more commercial oriented, this group here, like Polychain is much more technical, and BlockTower's much more Goldman Sachs like. So, you're starting to see the formation of categorical roles in the ecosystem. This is very healthy. Now, in the short term there's some jockeying, right? So, you're starting to see people syndicate together. You buy my coin, I'll buy your coin. So, there's a healthy, robust equilibrium going on where the market of insiders is very much the story. The insiders of this industry are the players. They are the ones, not just building the technology, they're funding technology, they're also recruiting, the talent issue, human capital role, mission based. These are all new dynamics. This is going to be a hard nut to crack if you're an incumbent, venture capitalist, or hedge fund, trying to walk into this ecosystem, throw your weight around and compete on a frontal basis, money for money, steel on steel, if you don't play by the rules of engagement that's emerging. Such as, open source communities, unwritten rules, certain kinds of syndications, eliminating bad behavior. This is a dynamic that's real, and you'll either win or lose if you're an investor, win or lose if you're an entrepreneur if you don't recognize that, kind of, big picture. So, you get down and dirty, you got to pull back and say, okay, what's going on, how do I engage? This is where the true money making is going on. >> That's great analysis, John. You mentioned the word dynamics several times. The other underpinning dynamic is, we are going to take control of our own destinies. I've heard things all week like, I might move out of the U.S. Ya know. (laughs) Do you have a bank account overseas? (laughs) >> Estonia's looking good right now. >> Right, because I'm going to move to a place that's more friendly to this kind of concept. And the U.S. is anti-competitive. And this is the ethos of this community, We are going to control our own destiny. And we're going to go live in places and work in places that are friendly. >> This, to me, is perfect capitalism at work. You know, some would criticize Barack Obama or other folks that might have more of a socialistic bent around having government do redistribution of wealth. This is actually an example where I see redistribution of wealth going on in a capitalistic way. Where the enabling technology, Blockchain, and or new business models with cryptocurrency, which is money, basically open sourced money, as Miko Matsumura would say, and that is the dynamic. That is actually creating real value and redistribution of wealth. And the premise of Blockchain and cryptocurrency, although Bill Tighe pointed out, investor, and leader in the area, money's a concept, right? A dollar's a dollar, it has money value because it's a concept. But, if you look at things like what we learned in business school, the value chain of a organization, value chain, Blockchain, cryptocurrency money, is that this redistribution of wealth is going on in context to redefining business, redefining how people work. And again, I said earlier, the human capital component is very much a real dynamic, it's not just machines taking over the world. Some poopoo AI, some poopoo all this technology, but, human capital, a big force in this market. And, it is a big issue, and you got to learn protocols. We're all developers. So, again, zoom out, opportunity is right there. I think I'm long on this sector. I'm long on this game because the actors are going to self organize, Steel on steel turns into handshakes, or, steel on steel in the right areas, eliminating bad actors. FCC makes some regulations, that's only in the U.S. What about the opportunities for digital nations to say, hey, we're going to be the Wall Street of crypto. There are country opportunities right now where whoever builds that system, taking in crypto, converting it to fiat, will win everything. It's like, I'm surprised no one's done that yet. >> Yeah >> This is coming. >> I can't tell you what the price of Bitcoin is in August, but I agree with you, longterm, there's no question in my mind that this is going to be a key contributor to the digital economy. The build out of the next internet. Remember the fundamentals, you got Bitcoin, it's essentially, you know, a virtual Fort Knox. You got Ethereum, which is a horizontal infrastructure that's much more easily programmed by developers. And then you've got a zillion other protocols and tokens. I want to talk about risk factors. Like what could blow this up, what have we heard? Tax exposure, all these people, all these Bitcoin millionaires and billionaires that think, I don't have to pay taxes, well, guess what? (laughs) You do have to pay taxes. And so, one theory is that's why the price has moderated lately, 'cause people are saying, Wow, it's like I exercised the option, but I don't have cash to pay my taxes. 'Cause we saw a pullback recently. Regulation's the other one we heard. Too much regulation could put some brakes on the momentum here, your thoughts. >> Talent, talent. >> Yep, skill sets, and developer talent, right? >> Yeah, well, the top talent, in the protocol area is going to be at a premium. This is a global issue, so, you know, the old days when cloud, old days, when cloud computing came around, full stack developers were all the rage. Now protocol developers are all the rage. So, if you're a full stack developer and a protocol developer, you can have a lot of leverage. So, the danger, in my opinion is the job hopping nature of some of these ICO's. Hey, I made a bunch of dough on this ICO, they paid me in Ether and or Bitcoin whatever, I'm off to the next one and make a couple million bucks there, and move on to the next one. And so the job hopping factor for top talent is an issue. We heard that loud and clear. The tax thing, I'm bullish on Bitcoin, post April 16th. I think, buy Bitcoin right now and look for it to pop in April. Because I think people are going to realize, Oh shit, I should have sold some and had a tax carry over. >> Well, be careful, be careful. They might have to sell more to meet their tax bill. They might be holding on for a little bit, but I don't know. >> File the extension. (laughs) But anyway, I love the opportun-- >> No, you owe your taxes on the date. Extension doesn't remove you from paying the taxes. >> Yeah, but the issue Dave, is, that what's a scam and what's not a scam? So, you know, if you ask Joe Six Pack on the street, throw crypto and Bitcoin, it's a scam. There's a lot of stuff going on. This industry is absolutely, acutely aware of that dynamic. The risk on the wealth creation opportunity. They know it, so they're creating mechanisms to kind of weed that out. You're seeing PR firms having internal, called, in baseball and in sports it's like, clubhouse issues. There's a clubhouse issue going on in this industry. And they're going to take it amongst themselves. And I think that is going to be the tell sign if this ecosystem succeeds or not. >> Do you think there's more scams, or less scams going on there? >> There'll be less scams because, obviously there's too much money to be made right now. >> Right, and in terms of the percentage of the activity that's going on, in my opinion, the smallest percentages is the scams. The challenge is, anyone could be a scam so you have to sort that out, you got to do-- >> Due diligence. >> As always, you got to do homework. >> Alright, well, day two Dave, we're going to drill into. We got a great line up of guests. We'll be talking to investors, entrepreneurs, some whales coming on, we're going to get their opinion on the future of this market. What's the liquidity, how do you get paid? Who's making the money? How is the value that's being created ultimately captured? And, who's going to get that value? It's theCUBE coverage, from the Bahamas, exclusive coverage of the cryptocurrency, tokenization, here at POLYCON18. We'll be right back. (electronic music)

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

>> Announcer: Live from Nassau in the Bahamas. It's the Cube! Covering Polycon 18. Brought to you by Polymath. >> Hello everyone. Welcome to a special exclusive cube conversation here in the Bahamas for Polycon 18. It's a cryptography, cryptocurrency I should say, show with blockchain. It's a great event. It's brought securities tokens and token economics, the value economy that's changing the world is certainly in play. It's the beginning of a massive wave that's coming. We've reported on the Cube and SiliconANGLE before. We're here with the co-founder of Ethereum and the CEO of Decentral and also maker of Jaxx. Great to see you. Thanks for coming on. >> Thanks for having me. >> So we've been covering a lot of emerging waves and I got to say that I've seen some waves in my days but this one's a tsunami. You can see the water pulling out and you see the exposed clams and crabs out there. A complete shift of value, data, users, decentralized impacts of business models to industries. I mean it's just mind-blowing and it's intoxicating. But a new community is evolving. I mean it reminds me of the early days of the personal computer combined with all the inter-networking and the internet kind of rolled up into one massive shift. How do you see it from your perspective being on the inner core of this community? What's your take? >> Definitely the biggest thing of those things that you mentioned is yeah the tsunami. We started with information, when the internet was started, ways to be able to move information globally. Disrupting everything to do with publishing companies, with postal service, anything to do with information transfer. And I've been around since the BBS days, way back there before the internet even came about. So when the internet came about it was my first instinct and I'm like, "Wow. This is going to just change the way information moves." And then when I got into this in 2012 into the crypto-space, into bitcoin at the time, I'm like, "Wow this is beyond the internet. This is value transfer now without needing intermediaries and the disruption that's going to happen is going to just completely change finance, the way that currencies are handled." It's going to touch every single sector. So this is much bigger and it's bigger because the everyday person can get involved with it. >> You know one of the things that we were just commenting this show, Polycon 18 put on by Polymath which makes a securities token model for companies to use, sets up kind of a growth and funding model. We're going to talk more about that in our live feed. But I noticed a lot of Canadians are here. Besides having ice hockey, one of my favorite sports being from the east coast in the U.S., I remember in the 80s a lot of PKI stuff being done in Canada. A lot of really important cryptography work was done in Canada. There's a lot of amazing computer science programs in Canada. There's a lot of progressive things going on in Canada. Can you share your thoughts on that? >> Sure. >> Because I think you're starting to see that wave coming down. I won't call it a cold spell, I'll call it like innovation spell coming from the north and into the U.S. and then all around the world. >> Yeah it's a real disproportionate amount of Canadians in this whole scene which is really interesting. I was at an event called the Satoshi Roundtable about a month ago in Cancun. And it was about 20% were actually from Canada and this was a global event. And what I think it is is a community basis. In 2012 I showed the Toronto Bitcoin Meetup Group. And that was like what are we like six years ago. And the amount of people that have come through Decentral and come through the meetup group that we started, started just sparking so many different things. That's where Ethereum came from. Polymath from Toronto here. Trevor and I go back, way back to 2012. So I think it's a matter of the community being built that really early on in Toronto and Canada that have led to the spark of what's going on. And now with things like the public markets and the way Canada is is kind of being a good fertile ground for companies actually going live on different-- the TSX in Canada. And that's helping to facilitate things. So ton of talent, ton of amazing things that I think hopefully Canada can prove itself to be the global headquarters. However, there's also regulatory things. Since you have a lot of Canadian companies that are saying we're going to set up offshore because we don't know how Canada is treating things. That's also a counterbalance. But in general there's tons of good things coming out from Canada and from Toronto. >> You know we were early on the cloud wave going back to 2000, you know late 2000s. And now you're starting to see with cloud computing some visibility. I'll see Amazon web services kicking ass and they're just blowing away their numbers. But you're seeing kind of a clear visibility between infrastructure as a service and sass. And just to kind of use a metaphor for kind of what's going on here is the whole platform as a service never happened. So you got infrastructure and you got application. So this community is emerging. It's still small, it's growing, it's dynamic, it's robust. Very intimate. But there's some things going on at the infrastructure level that are super important. And there's certainly a tsunami of new kinds of software developers coming in. So comment on those two things because you know it's kind of moving train is happening in parallel at the same time. >> Definitely. >> Can you share some color on the dynamics between the infrastructure progress and innovation and speed scale, tech, and then the tsunami of these decentralized application developers which are coming in from 13-year-olds to 65 and older. I mean across the gamut. >> We're building infrastructure. That's what it's about. I've always had a very long-term thing with everything whether I invest in things or-- I'm super long-term in the whole space. So 2012 everything was bitcoin for me. 2013, started developing wallets. I realized that the wallets is the browser for value transfer. You got the internet browser, that's what moves information. Now we're in the age of value and then the wallets is what enables people to manage and move digital assets. So I started building wallets for bitcoin. When we started Ethereum I'm like, "Okay there's beyond bitcoin now." Started Ethereum. Did that for about a year and then went back to building the interface, the actual platform for all these technologies to be able to utilize to manage and move digital assets. So that's what I focus on is the infrastructure play of connecting to all these blockchains and providing the user experience to be able that the masses like my dad to be able to actually have the browser moment. Like, "Oh, now I know what I can do with this." And that's what's been missing and that's what I've been focusing on. And then in there is where you have the apps start getting built on to stuff. So that's always been my play is to build the single interface for every blockchain, support the entire ecosystem, not focus on one technology because who know what's going to actually live now for a long time. And that's what I'm doing is building that single interface that my dad can use to understand how to move and manage his digital assets, and then partner with companies projects. The Polymaths, the Eons, all these companies from the space that are offering value in different areas and we want to be that single interface that brings it all together. So definitely infrastructure play, but also applications that can be built on top of that infrastructure. >> Yeah I mean infrastructure needs to be enable and you think about the browser, right? I mean the browser created the internet to be usable. And the web was born because of it. And of course HTP protocol. But interesting on the infrastructure side. I fought the wars back in the days you know SNA, Decknet, TCPIP was emerging into the OSI models. I remember you know TCPIP was one those moments-- and people use that as an example. I hear it all the time and you know I even use it here and there. But that created a galvanizing moment where hey we can inter-operate together with the standard stack and not fill all seven layers. But you know it made things happen. The question that people are asking is it's kind of a TCPIP moment in this industry but is there 40 versions of it? Is that an issue? Is that reality? >> I think it's actually-- I always equate it to there being websites. And what I'm doing is I'm building the browser so that actually the websites can actually interact with the technology. So they're focusing on different sectors and they're making different plays in all these different areas that are going to touch with value transfers. And value transfer is amazing. That's what's going to disrupt things beyond information. And then with smart contracts and this thing we did with Ethereum it's like okay this all coming together to touch law, insurance, gaming, all the different sectors are going to be actually changed. I don't want to say disrupted, I don't like that word. But changed and evolved into great amazing things. But these protocols that are being developed are choice and the ones that actually are the ones that are going to create the most amount of value and great user experience were the ones that actually we're going to carry on. So it's amazing to see the amount of competition, the amount of new projects. And the ones that are creating the value is what's going to actually survive. >> And that dog will hunt, basically. >> Yeah. >> Okay the wallet question. Love this simplicity model. What's your vision on the wallet because you could say okay there's multiple wallets, there's a diversity of wallets. I could have a brown wallet, black wallet, leather wallet, all kinds of different wallets. Are you looking at it as a technology enabler that you're doing or is it an actual wallet? Because again what we learned in open source is why build something when someone else already has it? So that's the ethos of most developers. So are you looking at the wallet as saying I'm going to provide a wallet capability end to end or is it base code? >> It's interface. The wallet's the engine. The wallet is what's needed in order to connect with all the different block chains. That's what we've been building over the last two years is actually the infrastructure to connect to all the different blockchains. It's the interface that we built on eight platforms. So you can have a single interface on all the platforms that ties yourself in a with a 12 word key that enables you to derive keys for all the blockchains. So the key system that we offer, the interface to all the connections which is the browser, and then the back end AWS almost like structures to all the different blockchains is our value add to all of our partners. And we're all about driving partner interaction. >> So simplicity's a big part of it. >> Super-- yeah definitely. >> And ease of use. Ease of integration. >> Yeah we need the interface. You can't be using 10 different wallets for all the different things you're trying to manage. So we're trying to create that single interface across all the things it supports and drives the whole community forward. >> Dave Alanta who you just met and I always talk about this all the time. You know it's like you built-- if people want to sell a certain technology a certain way but it reminds me of the gaming industry. There became a market for game engines but that only because someone built a successful game and someone said, "Hey I want a game engine!" You have an engine and I don't want to have to build an engine I'll just use a game engine because someone did it and that became an industry. You can't sell a game engine if there's no gaming. So you have to have an application that might have some core technology. Is that what's happening in the wallet world right now? Are you kind of doing that? >> So for us that's exactly the same way. We build the infrastructure and now we have partners that create apps and tap into our back end. So they don't have to worry about all that stuff. An example is Coinbase. So Coinbase and us came to an agreement last year where we'll start helping them to-- they have a service where you can use your credit card to buy litecoin, bitcoin, and Ethereum. Well inside of Jaxx you'll be able to add that integration, connect them to all the chains. So their users can actually still buy that, but we can flip it using another partner and give them Polymath. That's the thing. It's about creating value with the different apps and we want to be the store that connects all these different apps to the blockchain so they don't have to worry about that. Bitpay is another example. They enable you to pay invoices in bitcoin. But they only want to deal with bitcoin. Well in Jaxx you can pay with any currency. We flip the bitcoin with one of our partners, send them bitcoin, they don't have to worry about all the back end. >> So you're creating inter-operability of money and value. >> And value. Yeah definitely. >> Or-- buy yeah money. Well bit-- you know. Crypto money. >> And the experience that my dad's going to use to understand this whole space. >> They don't have to write code to integrate. The user can just use it. Alright talk about the developer community. What's your advise to developers that are onboard and looking for guidance in navigating through. And people are learning really fast. You're seeing people come into the industry literally with some background that might not be related to tech but have natural math skills, natural coding skills. They're coming in and actually making a difference joining communities. What's your advice to these developers who want to build decentralized applications? >> So there's two separate kind of devs. There's ones that can be really good devs that can be onboarded into the space. They're not working on protocol level stuff. And then there's the devs that actually are working on the protocol stuff. And they're hard to find. They're hard to secure because you need the experience of number of years in order to do that. For us we actually look for good devs that we can bring in and onboard into what we do which not necessarily solving major problems. It's working with protocols that are solving it and integrating those protocols in. So the protocol level is very difficult to find developers right now. So I would suggest as much experience on that is going to be what you can do to get ahead. But in general if you're a good dev don't be scared of the space. And if you're going to align yourself with a company that can help teach you how to get in, that's what we want. We don't actually target blockchain devs. We target good devs, and we let them know-- we don't even advertise blockchain. Because sometimes they go, "Blockchain? I don't have that." But if you get good devs, we can actually teach them on our end. So it's actually-- we did a job fair about a week ago. We had 100 devs come out, pre-qualified devs, that we spent about a month trying to pre-qualify them. They came in, already had the experience. And we had 100 of them come in because they're interested in the space and we marketed as you don't need to know blockchain. Good devs, we'll get you into it. >> You know we was talking last night, we were having some cocktails with some crypto guys and gals and it was funny we talked about two things. And I want to get your thoughts and reaction to both of them. One was latency kills and the other one was women in the ecosystem. This event here has a lot of women on the agenda and so you're seeing a lot of great diversity going on. So what's your reaction? Latency kills and the roll of latency is something to watch and design against. And then the diversity angle. >> Can you first clarify what you mean about latency kills? I'm not sure what you mean by that. >> Yeah in terms of networking. So like for round-trip times, where you have a decentralized network. You're writing to the blockchain. >> Oh you just mean the slowness with decentralized network and how that's been impacting? >> Yeah decentralized networks and people throwing-- >> That's definitely a major issue with just scalability. There's a major issue which will be solved. And that will be solved. I don't really think too much about it except the problem solvers are dealing with that and they will get past to the point where we can use it and scale these technologies globally. And because of the competition with the systems-- >> You're not worried about it. You see it as just a problem space. >> No I try not to worry about anything. This will happen. It's coming. The second thing, I like to look at individuals. So I don't really look at the gender thing with it. It's more about individuals. I don't want to say I'm going to start now focus on encouraging women in the space. It's hopefully they will start taking initiative just like everybody else does. So I tend not to look at the two types of the things. >> Well I bring it up because The New York Times wrote a really negative story about women not being in the space. And I was just pilot lighting that this event, Polycon, that Polymath-- >> But it's just the way it is. And why even think about it. It's just it is what it is. >> I hope we won't have to have these conversations anymore. >> We want the best of the best people and I've got a number of girls that work for me and they're fantastic. But I don't necessarily head a job and say, "Well we got to bring in more women to do this." That doesn't make any sense. >> And that conversation should be just assumed. Alright so I want to get your thoughts on what you're working on. What are you working on right now? You got your company, you've done some great things. We know the Ethereum story and that's continued to evolve in a great way. Attractive to developers. And I saw Charlie up on a panel in with Bill Tye in Dubai and really commenting on he's long on Ethereum. He thinks he said it's going to be more valuable than bitcoin. Little haymaker for the young gun there on stage. Really important for developers. And you're pioneering with the wallet. What's the key things that you're working on both on the technical product side and on the business front for Decentral. >> So the technical side has been for the last year and a half building the back end infrastructure to be able to support 10 million, 50 million users. We haven't been advertising. We haven't been marketing what we've been doing because we think it's the wrong approach to actually go and try to just look for user growth when your infrastructure's not ready to grow. So our focus has been fully on being able to support 15, 20 million users. We're at about one million right now. All organic without advertising. So if you can't support that why do you want to be advertising? So we've been focusing the last year and a half to ensure that we are scalable and that we can grow when we hit the go button. So this year is all about hitting that go button. It's infrastructure's now in place. We are set to support 10 million users. And now it's the announcement which we did just recently about Jaxx Liberty, which is our new platform Jaxx 2.0. Which is everything you need for the blockchain space. It's your explorer, it's your charts, your graphs, your portfolio, your news directed on what your portfolio is. It's the one browser. You won't be using 10 different browsers to go to different websites. We've always had the goal to create the engine which is the wallet, and then the interface which is the single thing that the masses can use to understand the technology. So our focus is on partnerships into the app store of our products that connects to all the back ends. And basically supporting every company, creating wins for everybody, helping to push every product that actually has value, incentivizing people to create better valuable projects because then you'll get more support from us, and creating wins for everybody. I'm not about Ethereum, I'm not about bitcoin, I'm about the whole ecosystem. >> Yeah. You're about the growth. Rising tide floats all boats. But what's the value proposition that you're offering to partners on the integration? Is it speed to deployment, speed to value, all those things? >> So getting your token inside of Jaxx now gets you on eight platforms. And you don't want to worry about having a wallet for your separate platform. It doesn't make any sense. So what we do is we charge for integrations to come inside of our product, and then we have separate things. That's integration partners, or token partners. Then we have service partners. That's the Bitpays, the Coinbase, the-- all those guys that have apps or have integrations inside where we can expose our users to their services and they pay us. So our proposition to them is more users and more service on a single interface so that we can direct their users. And we don't charge users any more. We get paid through our integration. So think about us being paid for every website visit. >> Yeah. That's good value Okay so now you're going to give a keynote on stage here at the Polymath event called "Polycon 18." What are you going to be talking about? What's the vibe? What's the script? Are you going to wing it? Do you have an agenda? You're laid back, you're cool. Is there a talk format? What are you going to do? >> I never plan anything before I walk up on stage. Literally I like to look at the audience. Any preparation stuff for me doesn't make any sense. So I literally go up on stage and I always wing it from there. So it could be a little bit about just people working together. There's a lot of this versus that mentality. There's the whole thing of if you're not this then you're that. >> It's the if you're not Trump then you're-- I don't like that. I think there's a lot of in between. There's a lot of things that-- it's about working together. It's creating great synergies. Creating things that help the whole thing grow. And we've seen that. Especially a lot of companies in Toronto. There's so many synergistic relationships of gaps being filled in from companies just in Toronto that add value. So Polymath, securities tokens. It was needed. It was something I talked with Trevor about a year ago and he's taken it and flown with it. We support Polymath. But I also invest in other securities platforms as well. tZERO is something that I'm looking to get in. I've got about 45 different projects right now. It's spreading the love. It's saying let's all work together. As long as there's no scamming going on, I'm good. Let's work together, let's all come together. >> You know Anthony I did some checking around on you before the interview and I got to say, you know community. You know open source. You've been around and you've seen the formulas that work. I mean you talk about an open source ethos that's now going totally mainstream. It's not a second (mumbles) by a long shot. That's an old story. This cryptocurrency and blockchain and this new decentralized community has a mission. I've noticed a pattern, right. And you're seeing folks like yourself doing amazing work and pioneering and also the hard work. You're putting the work in. There's a mission. Take a minute to explain what the mission is. Because there are a lot of people that are aligning with this mission globally. Not just on the technical front. You mentioned this diversity and that's a good thing. What is the mission that really brings everyone together? Because that seems to be the magic that's going on here. >> Well I can't speak for other people but for me the mission is to improve life, reduce suffering, create value, create wealth in both knowledge and other things that can enable you to carry out those things. So my end game is improving life. Haven't fully baked out what that's going to be but my step now is to create wealth of value, wealth of knowledge, wealth of resources to be able to then tackle that afterwards. So it's all about-- I don't accept money. I don't take people's money. It's all self-funded. We're about creating value. The fact that I don't have any partners, I can move really quickly and I don't like to take people's money or hold people's money. I want to empower people with a tool. Or at least give them the tools so they can decide whether they want to be empowered or not. And I want to be able to just create stuff that's just going to create amazing value, user experiences, mind-blowing experiences, and just help improve things and drive technology forward. >> You know we align with that. We love that culture. We believe it's a pay it forward world. We've made our business at the Cube on paying it forward. Really appreciate you taking the time to pay it forward with us and share your content here. And I want to say congratulations for all the amazing work you've done. You've worked hard. You've made a great dent in the universe. And it's just getting started so congratulations. >> One of the best interviews I've ever done. Thank you so much. >> Thanks. Appreciate it. Take care. >> Appreciate it.