from the Hard Rock Hotel in Las Vegas it's the cube recovering no joke on 2018 brought to you by Osho okay welcome back everyone we're here live here at hosts show con in Las Vegas the first security conference for blockchain its inaugural event and we're here with Gabriel Shepherd VP of strategy at Global Strike for host show they're the hosts of the event although it's an industry conference for the entire community all coming together Gabriel thanks for coming on and spend the time yeah thanks for having me thanks for you know supporting the event and we appreciate your team coming out and covering what we're trying to build here well we think it's super important now so you guys are doing a great service for the industry and stepping up and put in the event together and so props to you guys thank you this is not a hosts show sales like conference you guys aren't selling anything you're doing the service for the community so props to you guys in the team great stuff and we know this is a kernel of all the smartest people and its really an industry event so it shows in the session so appreciate that yes we think it's important because you know we see a lot of trends the queue has a unique advantage in how we cover hundreds of events and yeah so we get to go we see a horizontal observation space from the industry and when you have formation like this with the community this is important you guys have up leveled the conversation focused the conversation around blockchain where security is the top-level conversation that's it no I feel pitches right so for the folks watch and this is really one of those events where it's not a huge number of people here like the thousands and thousands of other blockchain shows that make money off events this is about community and around getting the conversations and having substantive conversations so great job so for the folks watching the content agenda is super awesome host show con-com you go browse it but give us some color commentary on some of the types of speakers here the diversity yeah I think I think the first thing that we wanted to accomplish was with Hojo Khan was we we wanted to put front and center the conversations that were not taking place at other events there are plenty of platforms and opportunities for companies early-stage companies to go pitch there are other great conference organizers that do events and have their own wheelhouse but what we wanted to do was put together a conference that was focused around a type of conference that we ourselves would want to attend as a cybersecurity firm and you know after traveling the world I mean you know you you and artesia spoke many times and hosho has sponsored quite a few events around the world after attending by the end of 2018 will attended something like a hundred plus events in some capacity and so it was clear to us early on that companies weren't our conferences weren't going to focus on security or at least put them on the main stage where I believed that they should be at least with all the hacks happening so what we wanted to do was bring together thought leadership with respect to security technical leadership with respect to developers and security engineers and we wanted to bridge those two what I mean by that is we wanted thought leadership that could get executives to start the non-technical people so start thinking about security in the larger format and how it's applicable to their company but what we also wanted to do is we wanted to connect these non-technical people with the technical people in an intimate setting where they could learn think about the brain power that we have in this hotel for hosho Khan you've got the minds of Andre Assante innopolis Diego's LDR of RSK Michael berkland of shape-shift josub Kuan of hosho we've got Ron stone from c4 you've got an on Prakash a world-class white hat bug bounty hunter consider what he's top-5 bug bounty hunter for our top top bug bounty hunter for Facebook five years in a row the the level of the calibre of technical talent in this building has the potential to solve problems that Enterprise has been trying to solve individually for years but those conversations don't take place in earnest with the non-technical people and so the idea behind hoshikawa was to bridge those to provide education that's what we're doing things like workshops sure we have keynotes and panels but we also have the ability to teach non-technical people how to enable two-factor authentication how to set up PGP for your email how to set up your hardware wallet these things aren't these conversations are not the bridge is a clearly established we interview people from on the compliance side all the way down to custodial services which again the diversity is not a group think events just giving them more props here because I think you guys did a great job worthy of promotion because you not only bridge the communities together you're bringing people in cross functionally colonizing and the asset test for me is simple the groupthink event is when everyone's kind of rah rah each other I know this conditions we got Andre is saying hey if you put database substitute database for blockchain and it reads well it's not a real revolutionary thing and oh all you custodian services you're screwed I mean so you have perspectives on both side that's right and there's contentious conversation that's right and that to me proves it and as well as the sessions are highly attended or we don't want it we don't want a panel of everybody in agreeance because we know that's not reality i mean that you you bring up the issue of curse of custody a prime example is we had a great talk a four-person panel led by Joe Kelly who's the CEO of Unchained Capital he had a panel with traditional equities custodian Paul pooi from edge wallet Joseph Kwon is the CEO of hosho and there was clear differences of opinion with respect to custody and it got a little contentious but isn't that the point yeah it's to have these conversations in earnest and let's put them out in the public on what's right and what's wrong for the community and let the community to decide the best way forward that's the best is exactly what you want to do I gotta ask you what are the big surprises for you what have you learned what's the big reveal for you that you've super surprised you or are things you expected what were some of the things that went on here yeah I think the biggest surprise to me was the positive feedback that we received you know I understand that we know people maybe looked at how shock on year one and said hosho like they're a cybersecurity firm what are they doing running a conference right but my background is a you know I've produced conferences I have a former employee of South by Southwest I believe a big an experience and so when we started to put this together we thought we knew we would make mistakes and we certainly made mistakes with respect to programming and schedule and just things that we had didn't think about attention to detail but we had plans far in that the mistakes were mitigated that they weren't exposed to the public right there behind the scenes fires that kind like a wedding or a party but no one actually really notices sure we put them out behind the scenes nobody that the our guests don't notice and that was my biggest concern I'm pleasantly surprised at the positive feedback we've yet to get any negative feedback publicly on Twitter telegram anecdotally individually people now they made just being nice to my face but I feel good about what the response that we've got it's been good vibes here so I gotta ask you well sure the DJ's were great last night good experience yeah experience and knowledge and and networking has been a theme to correct I lost him the networking dynamics I saw a lot of people I had I had ran to some people I met for the first time we've had great outreach that with the queue was integrated in people very friendly talked about the networking and that's been going on here yeah I mean this panels are great I'd love to hear from from panels and solo presentations but a lot of work gets done in the hallways and we have a saying in the conference business hallway hustlers right the ones that are hustling in the hallways are those early stage entrepreneurs or trying to close deals trying to figure out how to get in front of the right person serendipitously are at the bar at the same time as somebody they want to meet that is to me conference 101 that is the stuff I grew up on and so we wanted to make sure that we were encouraging those interactions through traffic flow so you'll notice that they're strategically the content rooms are strategically placed so that when you're changing rooms people are forced to cross interact with each other because they're forced to bump into each other and if you look at the programming we purposefully to our demise to be honest year one put a lot of programming that was conflicted with each other we made people make a decision about what talk they wanted to go to because there were two really compelling people at the same time or 10 minutes off yeah and so you had to make a decision vote with your feet you got to vote with your feet and and and from a conference perspective we call that FOMO right we want our guests to FOMO not because we want them to miss a particular talk but because we want them to be so overwhelmed with content and opportunity with networking that they when they walk away they've had a good experience they're fulfilled but they they think I got to go back here too because that thing I missed I'm not gonna miss this yeah we will point out to you guys made a good call on film all the session everything so everything's gonna be online we'll help guys do that yep so the video is gonna be available for everyone to look on demand you also had some good broadcast here we had a couple shows the cubes been here your mobile mention the DJs yeah yeah so good stuff so okay hallway conversations our lobby con as we call it when people hang up a lot on it's always good hallway con so what Gabriel in your mind as you walked around what was some of the hallway culture that you overheard and and that you thought were interesting and what hall would cartridges were you personally involved in the personal conversations I was involved with is why isn't somebody not this station why someone not Gardens but I will tell you i from what I heard from from conference attendees the conversations that I heard taking place were and I hope Jonathan doesn't mind but Jonathan Nelson from hack fund spoke on our main stage and I hope he doesn't mind me speaking out of turn but he came to me said this is one of the best run blockchain conferences I've ever been to and to have somebody like Jonathan say that who has done hundreds of talks and thousands was really meaningful but but what was more important is to talk to him and him feel comfortable enough to sit down with me and just talk generally that's the vibe we want for every attendant we want you to feel comfortable meeting with people in the hallway who you've never met and be vulnerable from a security perspective you know Michael Turpin for example sitting down and talking proactively about being the AT&T hack great these are opportunities for people to really talk about what's happened and be vulnerable and have the opportunity to educate us all how to get better as an industry you know the other thing I want to get your thoughts on is obviously the program's been phenomenal in the content side thank you but community is really important to us we're of a community model to q you guys care about the community aspect of this and as a real event you want to have an ongoing year after year and hopefully it'll get bigger I think it will basically our results we're seeing talk about the community impact because what you're really talking about there is community that's right well I mean Vegas we talk about there's multiple communities right regionally post-show is a Vegas based company we're born here we close I think forty some employees all based here in Las Vegas which is our home so the first thing that we did with respect to community as we created a local local price if you're a Nevada resident we didn't want you to have to invest a significant amount of money to come to something in your own town the second thing we did is we've invited the local Vegas Bitcoin meet up in aetherium meet ups to come and partake and not only participate but contribute to the content and opening day in fact there was so much influx of people from those meetups it wasn't official it wasn't like a program where we had actually a VTEC set up I thought I was gonna be like a meet-up there were so many people that attended we had to on the fly provide AV because we were overwhelmed with the amount of people that showed up so that's a regional community but with respect to the community from blockchain community what we wanted to do is make sure we brought people of all ethnicities all countries we have 26 countries represented in the first blockchain security conference and you had some big-name celebrities here yeah Neil Kittleson Max Keiser you go mama Anan Prakash Yakov Prensky a layer from your side pop popcorn kochenko has some big names yeah I'll see andreas yes here keynoting yeah I'm Michel parkland andreas Diego Zaldivar I mean these lena katina Viren OVA I mean these are big names yeah these big names okay what so so what's your takeaway of you as you know my takeaway is that there's a there's a yearning for this type of event my takeaway is that we're doing something right we have the luxury as hosho and that we're not an events company people think that might be a disadvantage to run a confident you're not a cotton vent company I think it's an advantage yeah because it holds my feet to the fire yeah much closer than an event organiser who doesn't have a company reputation and brand to protect hosho as you know has a good brand in the cybersecurity world with respect to blockchain we don't have the luxury of throwing a poor event giving you a bad experience because that would tarnish house of but also your in the community so you're gonna have direct feedback that's right the other thing too I will say I'm gonna go to a lot of events and there are people who are in the business of doing events and they have a profit motive that's right so they'll know lanyards are all monetize everything is monetized yeah and that sometimes takes away from the community aspect correct and I think you guys did a good job of you know not being profligate on the events you want to yeah a little bit of cash but you didn't / yeah / focus on money-making finding people right for the cash you really needed about the content yeah and the experience for and with the community and I think that's a formula that people want yeah I would like to see the model I would like to see the model changed over time if I'm being honest a majority of crypto conferences today are paid to play so a lot of the content you're getting this sponsored so I'm okay with that but I think it should be delineated between con disclose your disclosure you don't want water down the country but but the conference circuit and crypto is not ready for that it hasn't rest in my opinion hasn't reached that level of maturation yet like I told you I I'm a former South by Southwest guy that like my belief is you create the content and the sponsors will come I don't I don't begrudge conference organizers for for for sponsoring out events because they're really really expensive a cost per attend to manage demand to this hype out there yeah hundreds of dollars per attendee I get it I understand why they do it but what I would like to see is the model change over time whereas as we get more sophisticated as a technology space we should also grow as a vent and conference circuit as well what I mean by that is let's change the model that eventually someday it's free for all attendees to come and those conferences and the costs associated with them are subsidized by companies that want access to the people that are tending them it sounds like an upstream open source project sure how open source became so popular you don't screw with the upstream yep but you have downstream opportunities so if you create a nice upstream model yep that's the cube philosophy as well we totally agree with you and I think you guys are onto something pioneering with the event I think you're motivated to do it the community needs it yeah I think that's ultimately the self governing aspect of it I think you're off to something really good co-creation yeah I'll see we believe in that and the results speak for themselves congratulations thank you so much I appreciate you guys coming here and investing your time and I hope that all our staff has been accommodated and the hard rock is treated you well you guys been great very friendly but I think again you know outside of you guys is a great company and great brand and you guys and speaks for itself and the results this is an important event I agreed because of the timing because of this focus its crypto its crypto revolution its cybersecurity and FinTech all kind of coming together through huge global demand I mean we haven't gotten into IOT and supply chain yeah all the hacks going on with China and these things being reported this is serious business is a lot on the line a lot and you guys having a clear focus on that is really a service business Thank You staff doing it alright our cube coverage here in Las Vegas for host Joe Kahn this is the first conference of its kind where security is front and center it is the conference for security and blockchain bringing the worlds together building the bridges and building the community bridges as well we love that that's our belief as well as the cube coverage here in Vegas tigress more after this short break

>> From the Hard Rock Hotel in Las Vegas, it's theCUBE, covering HoshoCon 2018. Brought to you by Hosho. >> Okay, welcome back everyone, we're here live with theCUBE in Las Vegas, for the first security conference. It's an inaugural event. It's called HoshoCon. This is where security experts are gathering to discuss the future. I'm John Furrier, host of theCUBE. With Joe Kelly, he's the co-founder and CEO of Unchained Capital. We were just talking about the old days, and big day, yeah? Joe good to see you, thanks for coming on theCUBE. >> Good to see you too John, thanks for being here. >> So, take a minute to explain what Unchained Capital is. We heard some people talking this morning, earlier, about your business model, love it. Take a minute to explain what your business model is, what you're doing that's different. >> Sure, so, Unchained Capital, we're really a financial services company, I'd say. Kind of in this new era where we have this challenge of users have crypto currency, they want custody of their assets themselves, they want to maintain some of the grave sovereignty over and control over their money. Not just give it, relinquish it wholly to a bank or someone else. So it's an interesting time to start a business like ours. Our first product is loans. We give out dollar loans, in U.S. dollars, to individuals or businesses who provide crypto currency as collateral. So right now, we accept Bitcoin, or Ethereum as that collateral. And we do accept it in a fully custodial manner today. When you get a loan from us you are sending us your Bitcoin, you're trusting us to keep it safe, and we do. But we also have some more multi-signature models that we'll be releasing soon, that we work with, for instance, Hosho here on getting our smart contract, and Ethereum honored it for doing such a thing with Ethereum. But we're really trying to find ways to bridge that gap of user don't have to quite give up everything , we don't have to have full control, we can still as a lender, safely extend money and know that we can. >> So you've got a lot of couple things going on. >> Yeah. >> You've been topical here at this conference, been hearing in the hallway, there's been sessions on it around custody, >> Yeah. >> So that's one big issue that everyone's talking about, but it's also now your lending. So, this collateral, that's services, financial services, so it's a little bit fin-tech meets cyber security needs. >> Yeah. >> You're in the middle of two cross-hairs. >> Yeah. (John laughs) >> How are you guys doing this? >> I mean, I think, as far we were talking about earlier, my co-founder and I kind of cut our teeth in the big data technology space, and learned a lot through that. And learned a lot especially about how easy it is to get caught up in either a hype, or a market cycle, where you don't pay as close attention as you should to customers, and what they need. We went through a pivot in that business, which was good, the right thing to do, but we wanted to start this company consciously in a way that we didn't have to pivot. So there always has been this kind of focus on the customer, the end user, and what they want. >> Hey, building a sustainable business. >> Building a sustainable business. >> With paying customers, what a great idea. >> Yeah, who would've thought. (both laughing) >> Well turns out it was a good call because with the whole bubble burst thing, you know in February really, I think February to me was the month where you saw the decline, the security token, Rightfully so is the discussion for all the utility all the stuff regulating now, so a little bit of a dark time for us, but, the winners coming out of this will be the durable real builders. >> I think so, yeah. You know we didn't, we chose not to do token sale last year, to our, maybe in the long run it could be a bad idea but we still feel pretty good about it. >> It's a good cause. >> Yeah. >> SCC reported today, I saw it today, SCC is actually having some ICO's give money back on violations. >> As they should, yeah. >> So, you would have been properly optimizing your time on other non-company building activities? >> Yeah. >> Yeah, running around Asia managing token prices >> Now, it's a shame, its like these small teams run out like 12 or 20 people almost running public companies, in terms of the demand and opinions and-- >> Yeah, and they're young, they got keep their eye on the ball, which is the value proposition evolution and also security. >> Yeah. >> Alright, so talk about how, what you're doing here? Why're you here at HOSHOCon, I see they're a supplier, a partner with you guys. >> Yeah. >> But what's, what's the story here for you guys? >> So we got to know Hosho earlier this year, we spent about six months developing a theorem smart contract. So a theorem, it doesn't have a native multi-signature mechanism, there's no way that within the protocol you can speak to the protocol in a way that says, you need multiple signatures to make this transaction valid. Unlike BitCoin that has that multi-signature spelled out. So, and we, with the way we store the currency, we store it all cold storage, we store it with multiple hardware devices, and in so, we believe the only way to do that, or the only way to store cryptocurrency is with that, and with multi-signature enabled. So, to try to-- >> To minimize the risk on the custody side. >> To minimize the risk of, yeah, on the custody side. Also, you minimize risk of theft, you also create some resiliency in the sense of maybe a key is lost, like you got some back up keys to it. So, really important to get to that multisig status but as you maybe saw last year, with hacks like there's a parody multisig wall that was hacked to the tune of some hundreds of millions of dollars. There's several of these multisig contracts people developed that were really sophisticated pieces of software allowed ownership to be transferred or things to change, within the contract that, in our opinions kind of, didn't need to be there, and put the contract at risk. And so we worked on this very simple, bare bones, smart contract that does multisig as closely as, it's already spelled out in Bitcoin. And worked with Hosho on at that, it's been since honored it twice. Both times, passed with flying colors. No issues, not a single discrepancy. >> You did the work up front? >> Did the work up front, yeah. >> That's critical. >> Really smart team of folks that put that together and so yeah we're very security conscious company. We like being present, contributing to conversations like those that are here. >> It's funny, we were talking earlier in some interviews it's like, security is a differentiated of some of these exchanges. (Joe laughs) >> We got better security >> Cheap table steaks. I mean, differentiate? That's like standard. Alright, so talk about how someone uses your service because I think this is fascinating. A lot people are holding crypto, they may or may not want to sell it. There's also fluctuation risks. >> Yeah. >> So how does this system work? I give you my crypto and you lend me money? >> Yup. >> Is it that simple? >> Yeah, so you first sign up to our website. We lend mostly in the U.S., a few international jurisdictions, but as long as you're in a jurisdiction we can lend, you finish out your profile with us. We do do a KYC email check on all folks and then you put in a loan application. And within that loan application, we can either lend you at a 35% loan to value or a 50% loan to value. You have a slightly better interest rate on the lower LTV. What that means is, if you'd like a $100,000 loan, say, you need to provide maybe $200,000 of that collateral up front, in the form of Bitcoin or Ethereum. We can fund loans and you can go from basically a new account and application to a funded loan, in like four hours even. You have that time from the client signing up to us, wiring the money and so that, that, can be a pretty fast process. Which is really unlike any other loan products. Even if you get a unsecured loan on a website, like an Earnest.com or some of these, it can take you many days, a week or more sometimes to close the loan. >> So you're taking a big risk with this, you guys do? >> Well you could say that. I mean, I mentioned that-- >> It all depends on the fluctuation, right? >> 50% on LTV. We do do margin calls, so if there's a 25% price drop, we'll issue a margin call. It means, with the client is required to post more collateral or else we can declare the loan in default. Luckily we've had no defaults, we've never had to force a liquidation over anybody-- >> So explain a margin call real slowly, so okay, it drops below a certain point percent. Let's say 25? You do a margin call, they don't come up with more collateral, to refuel essentially the collateral. You can default, which means you take ownership of the crypto? >> Yup, in that case we would take ownership of the crypto currency. We would sell what portion of it, was need to pay off the principal of interest, and then they get the remainder. But ya, thankfully nobodies ever fully bailed on us in that way. >> Ya, not yet, not yet. Well so for me this is a great service. So, great for people who get some hands on some, some fiat, some cash. Now, on the backhand, I'm only imagining just my brain spins around, you got a lot of hedging going on, you got have math, a lot of math behind it. Maybe, it's big data. How are you managing the back end, because now in your risk profile, so you the margin call, you got some mechanisms, which is great. What's going on in the background? You crunching on some cloud computing, Amazon computing, going OK, where are we with our positions? There must be some math involved. What's going on behind the curtain? Can you tell us a little bit? >> I think you'd be surprised, I think that, we've been able to manage pretty well, with just more puristic and common sense around a lot of this stuff. I think what we did up front before we even, gave our first loan, did a lot of research on historical volatility with Bitcoin. Looking at, ok, what are the most significant drops within a day, or a week long period and, based on that analysis that's where we did come up with this sort of 50% LTV ceiling for us. That says, really? You know, 9.9999 or 99.99% of the time, you will never see anything that big within a day. Maybe a week, there's been a couple of weeks where Bitcoin will go down 50%, in that period but that's, that evolves on like a human reactionalary kind of time scale. Not something that you're-- >> Well today the stock market dropped 800 points today and Bitcoin didn't move. So that's good that there's no corelation. >> Yeah. >> But the point is, you're measuring it. So, is there, the question next question I have for you, as I'm thinking about myself if I was a customer. If I was a customer, do you provide like some sort of total cost of ownership calculative, that I would have to know, okay, 'cause I want to plan, I don't want to be defaulted. Right, so I should have a good understanding of how to manage it so I give you guys some crypto, for the loan. >> Yeah. >> I got to have some reserves. You guys see a formula for that, is there benchmarks or is it more of ad hoc general. >> Yeah, it's definitely, I mean it's a case by case basis but with every client. We recommend not of course leverage all your crypto currency, you want to leave some in reserve for margin call and it just depends on personal situation and how much-- >> And the margin call too, if they give the money back, that's fine too right? So either pay back the loan-- >> Yeah, exactly. Or pay down the principal, which you can do partial payment, we have no prepayment penalty. So pay down some principal, or yeah, post more collateral. Just some way to get that ratio back. >> Got it, cool, how's business going? >> Good, yeah. We think it's been a great year for us, the first half was pretty bananas honestly, just with the kind of bull run and taxis and stuff like that. Summers been a little slower, but we're still full of-- >> Tax season, yeah roll your eyes. Hey, welcome to the tax bill. >> Yeah! >> Trading all that crypto. >> Yeah. >> People had a wake up call. >> Well, it's arguably what killed all the volumes. It's finally when people realized, oh my gosh, you know, I can't 1031 moving forward, I have to pay taxes every time I trade all client for another all client. I think that really dampened volume this year. >> Alright, so I got to ask you, what's going on here, in this event thats folks that didn't make it, what is some of the conversations, a lot of diverse, smart people here. Kind of core kernel industry security, but it's not just security nerds, it's total laid out players on the security side to business we had Andre on talking about custody. You've got you're business here, financial services chain. What's some of the hallway conversations that you're over hearing and that you're been involved in? >> Let's see. I mean, almost just been in, you characterized it pretty fairly I think, there's real engineers here. People that kind of get into base with over the pros and cons of the different programming language, or implementation for smart contracts. So, it's kind of, a definitely more nerdy conference. I haven't heard of one, like ICO I should buy into or anything like that. >> Thank God! >> Pretty nice. >> That's refreshing. >> Yeah. >> I mean an ICO converse, a little bit over, a little long on the tooth there, don't you think? >> It's a converse we deserve. (John chuckles) That's just a tagline. >> Yeah. >> Alright, so what are you seeing as the major trend that's going to bring back, not bring back, but establish more of a mainstream culture with crypto, because you're actually getting into the level of services that certainly for the early adopters and insiders that are been there from the beginning, or involved now making money and having crypto, to Joe Sixpack, out there, who's really, he's interested in, it's really the younger generation love this/ You can't pull a 16 year old away from. >> Right. >> Learning how to mine, getting involved and pretty much anyone under 30, pretty much, is on the crypto band wagon. >> Yeah. >> It's a revolutionary, kind of cultural shift. >> Especially in our customer base, very well over represented there. >> So, how does it get more mainstream? >> I mean I think speaking somewhat biasedly, you know, part of our view is that, we're a company that's here to make crypto currency more valuable in the long run, to it's holders. Not necessarily, doesn't have to be in dollar terms be more pricier, but the idea that before us, before other people doing these kind of loan business, there's really nothing else you could really do with your Bitcoin. You could buy it, you could hold it. And then go sell it later, or you can give it to someone else, kind of trade it for fact or feeling here and there. You could trade it for other off coin. >> Convoluted process though. >> Yeah, all these things. And there, don't have much to do with your daily life. Except for, if you buy a car maybe, and that person will accept Bitcoin, and things like that. But, our clients are buying homes, they're investing in real estate, they're investing in businesses, and paying off credit card debt. Things like this, so. >> What are some of the sample loan sizes? What's the average coming in? >> Well average is $120,000. >> What's the largest? >> Largest is over a million. Yeah. >> Where you guys getting the cash from? >> We have some investors, including some small credit funds, and institutions, high net worth individuals that have pledged to back loans from us. >> So financial pros would get the collateral gain? >> Yeah, totally, you really got to be comfortable with Bitcoin as an asset to then be comfortable with the kind of rates we're talking about here. 'Cause many traditional lenders, they want 20%, 30%, I don't care, it's the riskiest asset there is. Like, they just don't get it. >> So you're building a company, you're a company builder, pragmatic, which is good, but also you got to manage the waves that you're on. Which is high growth and potentially, so you're managing growth. Funding, vision, what's, how is the execution plan, what's the tactical execution plan for you guys? >> I mean, it's interesting. I think, we're talking about getting back to the big data conversation, we really started that, it's a joke that, but smartest thing we do was start that company at the time we did. That, no matter what kind of happened or steps that missed execution, we were on kind of that wave. So, in some ways that formed our philosophy here. But, so you start a business at the right time, and a good space, don't let valuable long term business and let's focus on clients. For us that meant, grow the value of, and the utility of crypto currency is that people are already holding. So, make crypto currency really into the most useful assets in the world. As they should be. They're software, we know they can do more things then what they have done for us necessarily in the last 10 years. So, going forward, I mentioned the loan products we have, we have some storage in custodial technologies we've got, that we will be releasing soon. Things that help you keep crypto currency safe, while consuming products like a loan from us, so. >> And you're based in Austin? >> Yeah, based in Austin. >> How many people on the team? >> 16. >> So a small team. >> Yeah, growing. >> Great, congratulations. >> Thanks John. >> And if I need a loan, I'll come knocking on the door. >> Give us a call >> Regrowning capital. Cube's growing like crazy, going international. >> I like it. >> Going crypto. Joe Kelly, co-founder and CEO of Unchained Capital, check him out. This is theCUBE, bringing you live coverage here at HOSHOCON in Las Vegas. The first security watching conference in the world. We'll be back with more after this short break. (digital music)

>> From the Hard Rock Hotel in Las Vegas, it's theCUBE covering HOSHO CON 2018. Brought to you by HOSHO. >> Hello everyone, welcome back to theCUBE special live coverage here in Las Vegas for the first ever, Blockchain Security Conference. Really discussing security as an industry, it's called HOSHO CON, put on by HOSHO. We're here with the Co-Founder and CEO of HOSHO and main supporters of sponsoring this project or event HOSHO CON. We have Yo Sub Kwon, who is the CEO and Co-Founder. Good to see you. >> Good to see you, good to be here. Hey thanks for putting this on. I've interviewed Hartej, your Co-founder, in Toronto the Futures conference. We've had many great conversations on theCUBE. But when we talked about HOSHO CON, this conference, he really wanted to do it as an industry conference. Not as just a HOSHO event. >> (Yo agrees) >> This is really key to you guys culture here at HOSHO your company. >> Yeah. >> Take a minute and explain the event. Why this event? Why the format? And that it is open? >> I mean basically, you know, like we've been to just so many events over the, like I think we've done like 80 events this year, and the topic of conversation is, you know, around investing, it's around ICO's, it's around all these things and security touches all of those and I just feel like, and we all felt it and like the other security companies felt it too, that it just wasn't a topic that was discussed in great enough depth especially given the increasing amounts of hacks and theft and all these problems that relate directly to security. And I just feel like it's really important for us as an industry to discuss, you know, what security practices are good? What should be done? How you should do them? What resources are available to companies to learn more about security? And what resources don't exist and need to be developed? And that needs to be done in a collaborative way. Well congratulations and props to you guys for really sponsoring this and taking the leadership role in the industry but again you guys are humble and it's a good way to do it. Is to have these conversations. So thank you for doing that, appreciate it and thanks for having theCUBE here. We really appreciate it. The question I want to ask you is: I've noticed a trend here, first of all a lot of smart people here, so it's like, it's not a massive, no IPO, ICO pitch competitions, this is really down and dirty security. >> Yeah. >> Okay, black hat, white hat but it's kind of a intercultural vibe it's the community. >> Yeah. >> Coming together. But also two kind of tracks are developing there's the crypto security and then there's cyber security threats coming up. Because you said it's touching on all these points. And you're hearing, even hearing a little bit of IOT and hardware, we had Rivetz on earlier the CEO Steven Sprague so a lot of different solutions and a lot of different opportunities, a lot of different vulnerabilities. Can you explain the landscape of how the players are here, where are they coming from? >> Okay, yeah. >> What's their backgrounds? >> Absolutely I mean there are definitely, a lot of brilliant minds here and that was one of the goals of HOSHO CON is to bring people that are of all different, you know, parts of the industry whether they're, they're layers or they're information security experts or they're, you now, regulators or they're it just, developers bring them all into the same room and to kind of discuss these problems that you know, plague all of us and you know a developer's going to have a much different perspective and solution than a lawyer and but those thing can work together and the problems might still be the same. And so we've been in the industry for just like, even though HOSHO's a young company, the people that are on our team, myself, I've been in, I got into Bitcoin eight years ago, like we just have this network of people that are in the industry, have seen the kind of like cyclic nature of, you know, like a gigantic influx of people come in, these problems arise where, you know, entrepreneurs are like really focused on like growing, getting traction and then they focus less on their security, it goes to the wayside and then these big hacks happen and then the industry kind of smartens up and everything you know starts getting a little bit closer to what seems you know maybe safe or like approachable for a growth trajectory and then another gigantic influx happens and then the same thing. And so what we really need to do is like when that next big influx happens is to have standards in place to have things that an entrepreneur can just turn to and be like: "Okay, this is what I need to do "if I want to be considered credible in this industry "and I want to protect my users and my investors." >> Can you talk about some of the top conversations that are going on here, because I think that's a great point? People want you know legitimacy, they want solutions that work, that are credible and then maintain kind of, I won't say enterprise grade, but commercial grade reliable so that people can focus on building up their companies and or preparing for the growth. What is some of the top conversations? >> A lot of it's just learning about what other people do, like even with like Rivetz, we're putting, they're using the trust executions based on like what's already on billions of devices and you know basically letting people know that that space exists on this hardware and that they can be used for all these different purposes to validate you know data going in. And, you know, there's been conversations around custody. I was on a panel earlier today about custody and basically the way I felt like it left off and the conclusion was that there is a long way to go on custody but it is incredibly crucial. Big institutional players that want to enter the markets and want to put their money into a regulated custodian they're, it's difficult to do so even with registered custodian's existing because the limitations that they have in understanding the technology and being able to provide support for all the different digital assets that exist. >> So we're reporting this morning the SEC herein the US has tightened the noose on the ICO-funded startups. I think the story originated out of Decrypt Media but essentially the SEC, Securities and Exchange Commission, is cracking down and they're going back and saying: "You got to refund some of that money." >> Yeah. >> Because of violations. That's one regulatory thing but there's also, there's software that writes these smart contracts. You guys are in that business. The software is software money, security is critical. How stable is this becoming in your mind? What's the to do items? How should a company who want's to either use the ICO process or and or use token economics to fuel their business model they got to be secure on the business front? >> Yeah. So basically smart contracts were so new when we first got in to it that people just didn't know how to develop securely in them and so there were just critical mistakes being made all over the place. We've seen over the last year a lot of improvement on that front, more libraries are being developed and people are writing consistently more secure contracts. But now what we're seeing is contracts are getting increasingly complex and with additional complexity, because it's software there's room for, you know more problems and I think that it's going to, it's going to be an interesting challenge going forward, there's thing like formal verification I think that has a huge place in the future regarding smart contracts but it's there's a lot of tools that need to be developed that's one of the things that we worked on and we're really excited about is Meadow Suite because that's software that let's you develop smart contracts. We built it intentionally with security analysis in mind and then we made it more full featured to become a development tool for writing smart contracts and developing a protocols. And so I think the more of those type of things that you see come out that bring it more to feature parity to what software developers are used to if they're say building a web application it makes it a lot easier to adhere to good practices and write secure code. >> And also kind a not have to do manual audits? >> Yeah. >> I mean at the end of the day you want to get to some sort of automation. >> Absolutely. >> Framework. >> I mean we've already automated a lot of the things that we do. But and there's still a lot left to do but we know that there is a lot left that can be automated and we hope that eventually the tools are just put into developers hands were they can do most of that work themselves. >> Yo Sub take your CEO hat off from HOSHO for a minute put your industry hat on. >> Okay. >> What are some of the names here that, and conversations, topics that you find interesting personally? >> Okay, I mean. >> (John laughs) >> A lot of people that we brought here are like our friends, we know them right? And so like I was talking to. >> Your kind of celebrities. >> I was talking with like TokenMarket earlier and like, you know, we're partners with them and they really, they're really great guys and like some of the stuff that they are trying to do and you know just listening to what other companies are trying to do with like security tokens that seem to be the thing that really moving forward. And I'm kind of fascinated like, we try to stay agnostic you know like when we're like looking at all these different technologies. But then like someone explains something to you and you're awe man that's really cool. >> Yeah. (both laughs) >> And there's some good minds here. What's the coolest thing you've seen so far? >> Well I've been locked in, I've been locked behind doors in a lot of meetings so far but the, let's see, I think what Unchained Capital is working on is really sweet. They basically, I mean like I think their business model makes a lot of sense. Like basically they hold your crypto's so you maintain exposure to it and then they'll issue you a loan. They can like turn around a loan like in 24 hous, you just hand then a bunch of Bitcoin and then they'll just give you cash and then you can you know you have that cash and then you still maintain exposure through crypto if you pay it all back you get your crypto back. (laughs) >> So it's collateralized crypto? >> Exactly I mean like that makes perfect sense to me. Like you know it's just like as long as you can liquidate that crypto and Bitcoin or Ethereum like those are big enough markets now where you can easily liquidate. Well that's awesome. Thanks for putting on this event and I want to get back to HOSHO. How's business going? You're the CEO, Commander in Chief, what's going on with the company? How's things going? >> Yeah. >> Quick update. >> Well everything's crazy right, like we're moving quickly and the next steps are Asia. We really want to basically penetrate those markets. Only, we don't have as much coverage there as we would like but having spent some time there earlier this year doing some reconnaissance it's a crazy, crazy space over there. There's a lot of action happening, there's a lot of adoption. People are really enthusiastic about it but security almost seems like six months to a year behind North America and Europe as far as what exchanges are requiring, what investors are demanding of their portfolio companies. And so I think that now that they've had such major hacks happen over the last six months they're starting to realize. >> Major hacks talking about 60 Million. I mean I heard numbers up to 300 plus million. >> Yeah. >> I mean these are it's not like five dollars out of your wallet. >> Yeah. >> This is massive. >> Like over a billion dollars has been stolen in some capacity and like it's been pretty crazy yeah, so. >> Where's the big vulnerability? Exchanges, is it the DApps, where's the holes? >> They're all over the place but the biggest numbers definitely come from exchanges. Exchanges just need to be far more responsible and just, I feel like a lot of it is just negligence. They're growing so quickly that they don't pay attention to, you know, putting resources into educating their staff on really simple security practices. You know things like phishing and social engineering, like things that were good security practices still are good security practices. And a lot of those attacks are not even anything like some new exploit of a new technology it's the same kind of thing of like phishing, social engineering, sims swapping, you know, poor user access control, bad passwords. >> I mean the basics. >> Yeah. >> But this is what growth does to you you've point earlier. As more people start feeling growth there's more exposure service area wise. >> Yeah. >> New dynamics are kicking in. >> Well I'm starting to see new exchanges that are popping up that are you know taking security very seriously and the way they're treating it is that is their differentiator but in my mind like security shouldn't be a differentiator. Everybody should. >> (John laughs) >> If you're an exchange and you're holding massive amounts of other people's assets you should take security very seriously. That should just be a default, a standard. >> You have to be differentiating strategy with security it's not, it doesn't make sense. >> Marketing 101 you shouldn't be different, it should be standard. (both laughs) >> I mean if that's the state of the art, this is the problem. This highlights the problem. >> It does yeah. >> Alright so what's, what's the future for this event? How do you guys see this unfolding? Obviously this is the first inaugural event here HOSHO CON, How do you see it evolving? >> I think a lot of conversations should hopefully spur from this and we want to make this a yearly event. So we're definitely going to take a lot of the feedback from people that attended and see what they want, what they really enjoyed, what they really want to talk about. And even I think, a lot, since we're recoding all of the talks we'll be putting them up online at some point and I think it'd be really good to see like what the transition is like next year from like, where we were in some of these problems and addressing those problems you know a year from now. Like I think that will be really exciting. >> You guys are expanding in Europe, HOSHO good job with that. Who's the kind of clientele that you guys have? Is it ICO's? Is it companies? It is enterprise? Who are your target customers? >> So we have a lot of companies that are ICO's for sure. We have more exchanges and protocols joining those ranks. And then we are trying to move into enterprise as well. We made a partnership with Telefónica and developed a partnership with them to be able to sell to more enterprise clients and what they need. >> And what's your value proposition that you guys are offering? >> We are, well, we do smart contract audits, we do penetration testing. Those are things that a lot of companies in this space need. And then also we've been helping with security architecture and cryptocurrency assessments. >> And tooling, tools for development. >> And tooling, yeah we're trying to do our part. I mean we can't and won't do it alone but we try to develop things that, if we develop anything that's useful from a security perspective, we try and make it available for everyone. >> Yo Sub thanks for coming on theCUBE, appreciate your time and congratulations, it's a great event. >> Thank you. >> HOSHO CON sponsored by HOSHO and other's in the industry, it's an industry event, it's not just their company, it's their friends all coming together to solve the major problems with security, making it standard, making it safe and supporting the growth with the community. It's theCUBE covering live here in Vegas. I'm John Furrier stay with us for more CUBE coverage after this short break. (upbeat electronic music)