>> Narrator: Live from San Juan, Puerto Rico. It's "The Cube", covering Blockchain Unbound. Brought to you by Blockchain Industries. (Salsa style music) >> Hello everyone. Welcome back to "The Cube". This is our exclusive coverage in Puerto Rico for Blockchain Unbound. This is a conference where the local entrepreneurs, industry legends, financiers, funders, everyone's coming together from Blockchain cryptocurrency in the decentralized web. A lot of great use cases. We have the politicians as well here in Puerto Rico, kind of enticing the community to do more here. I'm John Furrier with "The Cube". I'm here with Luis Macias, who's is the CEO of Grain Chain, a start up out of Texas, doing very interesting things with Blockchain, and a really good example of really the value proposition of reducing steps it takes to get something done creating value, and then sharing that value. Luis, good to see you. Thanks for coming on. >> Thank you for inviting me. >> So we talked yesterday, here off camera, about what you're doing on, but I want you to take a minute to explain to the folks what you guys do, and why Blockchain? What's the difference? >> Sure. So, I would say about 5 years ago we got approached by a large scale farmer, and he asked us to find a solution to be able to modernize his business, you know. As we all know, the farming industry is not as technical as a lot of the other industries, so we went out and searched and we just couldn't find a solution. So we built the appropriate solution to take a seed from the ground and take it all the way to the commodities market in an instant, instead of 3 to 4 weeks. So basically what we do is we join the buyer or the buyers of the actual soft commodities, and we allow them to create smart contracts with individual farmers. This ensures not only the payment to the farmer, but it allows the farmer to get paid instantly. What does it do really for our overall industry? Our buyers gain instant custody of the actual grain the second it crosses the scale. That changes everybody's life dramatically. >> So the middle man gets kind of disrupted, but before we go in that, I want to kind of dig, >> Sure >> it's important because I'm from California. >> Okay >> It's a huge farming thing there, cultural thing going on there. What's your background? How did you get here? I mean, how long have you been doing it? >> Sure. >> And when did you jump on the Blockchain as an opportunity? >> So we've been developing software for the last 17 years. We've done it for the insurance industry and for state governments, and we are in Texas and we a have personal relationships with many farmers. We saw a problem and we needed to solve it. In the last year, we went ahead and started applying the Blockchain to the process. And the Blockchain is a perfect form. When you have two parties who really, really don't need to trust each other, and need to trust each other with a distributed ledger, you've got a perfect scenario. If we're about to write a contract and a thousand people be able to verify that contract, and we're able to transfer money from one person to another without the two parties being involved, we've got a perfect scenario. >> Yeah. That's awesome. >> And that's where Blockchain really, really effects the agricultural industry and our farmers. >> You know I said on "The Cube" this morning, we were talking about it last night with some folks, the killer app for Blockchain is money. >> Yes. >> The common thread in all this is money. Just like the first computer in the TCPIP revolution, it was email. There's a 20 year killer app. We hate email now, but the point is you're in the money transaction business, but there's a supply chain involved. This is where it gets interesting. This is where I think you're onto something really nice here, because you are essentially creating a better contractual environment between buyer and seller, but the product still needs to move to the market. >> Yes. >> This is where you're innovating. Can you talk up, specifically, about how you're disrupting that piece? >> Sure. So, basically what we're able to do, is not only allow farmers to involve themselves in the forward and future's market, also the spot market within the actual system. So, it integrates with the actual trading applications, but it also integrates with their future's market and forward's market contractors. So, we're taking a group of people who are not very technical and we're giving them that ability to do what the big brokers do >> Yeah. >> In the overall industry. >> Just give an example, a run of the mill example use case. >> Sure, sure. One of our farmers who's got 5 million pounds of corn does a forward market with a buyer, the second he processes the scale, it will settle that contract instantly, and then it will actually notify him and say it is in your best interest to go ahead and close the other 3 million pounds because the price just spiked. He hits one button. He makes more money than he's ever made on any contract he has done in the past. >> And that's because what happens? What was the old way? What was the old way? >> The old way is he pretty much put it in the silo, and sent the papers to an accounting office. Three or four weeks later, he figured out how much he had, then he gave it to a broker to be able to look at the actual inventory. They put it up on the market, and they make the actual commission. >> They make the spread. >> Yeah. >> They increase, they mark it up. >> Exactly. >> They take the spread down, and they still got to send paperwork back to the guy and say "This is what we sold". >> Exactly, and then eventually get paid. This pretty much turns that entire process into an instant action. >> This is a game changer. This is basically taking all those steps, and a lot of potential miscues could happen in that process. >> Absolutely. >> Time wasted, errors. >> And there's, you know, I don't want to put any bad actors, but it also eliminates the bad actors out of the scenario. Our governing system actually integrates directly into the scales, gets signatures from the scientific reading instruments, so we're removing bad actors and we're removing errors, and we're speeding the process. >> You know, I have a computer science degree, and software background, like yourself, but also got an NBA from Babson College, one of the words they use in the NBA class is "value chain". >> Yeah. >> The "value chain". You know, the activities as part of creating value. Kind of a document thing, but the word Blockchain, value chain, really this is the perfect example of the kinds of use cases that we see in Blockchain. >> Absolutely. >> Moving a product to the market, reducing the steps it takes to do something, saving time, and being more efficient. >> And having a complete trust system. You know, when you have a farmer who's paying a 1% premium to be able to ensure to get paid, a 90% and there's still litigation in everything involved, this completely eliminates that scenario. >> Yeah. The other thing we talked about on "The Cube" this morning and yesterday, I was saying was that killer app's money, which is great, money has to move around. That's what we see activity on, and some bad actors there for sure, but marketplaces is also the other killer app. Do you agree? I mean, because you're essentially creating a marketplace. You need a marketplace. >> Absolutely. I actually just got approached about 10 minutes ago from a local Puerto Rican gentlemen who's restarting a farm after the weather event that happened here. He's trying to figure out how to get honey into the U.S. market, but is scared to sell it to just anyone. He asked me if it's possible to be able to set up smart contracts with all the random buyers that want to buy his honey. >> Yeah. >> This is an exact scenario where we are helping a community who has to start over and figure out who to sell their product to. >> You know Luis, this is a great example of, kind of, categorically what I'm seeing across the disruptions schemes out there, which is, in the cloud computing era, Amazon Web Services created a catalog of services that allowed you to use resources without having to build stuff up from scratch, provisioning servers. This is kind of happening here, where you're starting to see a sense of services or players, a catalog of services, >> Absolutely. >> happening in business. So essentially you're going to the next level. This seems to be a consistent pattern. What's your take? >> Yeah. Absolutely. It's allowing the smallest guys in the industry to the biggest guys in the industry to take advantage. When you have people using Amazon Web Services, you're having massive corporations and the one business man owner. What we're doing here is, we're giving the same opportunities for both classes of people to be able to scale, and put their product on the market without having to do a massive investment, >> Yeah. >> Or be scared that they're going to get robbed. >> It's a great value proposition. I'm sure you've got a lot of investors knocking on your door. Take us through what you're doing right now. You're doing an ICO? Are you raising money? And, what are you expansion plans? Because I know you're in Texas. Are you in California yet? I mean, a lot of agricultural activity there. >> So. >> What's your growth plan? >> So what we're doing is, we're doing a Token So Event, and we're doing a private placement sell to accredited investors. We're trying to respect all the SEC regulations out there. We're launching that at the end of this month. We are currently based in Texas and we also got approached by the Mexican Government to apply the technology to the state run silos in Mexico, so what we're looking for is really finding people who want to help us scale this product world-wide and being able to participate in our sale. If you're able to go onto our website, grainchain.io, and sign up to our white list, that'll allow you to get some information on how to participate. >> Grainchain.io >> That is correct. >> Like as in the grain of a seed. >> Absolutely. >> Okay, I'm going to ask you about Puerto Rico. >> Yes. >> You've been here a couple days. What's the vibe here? Why is this such an important event? A lot of people who are watching this aren't here. What's happening in Puerto Rico? What are you hearing in the hallways? What is some of your conversations? And, what are your observations? >> I mean, I think that the reality is that Puerto Rico is trying to embrace technology, and trying to embrace an industry that can support the people here. We've seen a lot of the devastation as we're driving around, but Puerto Rico is back up and running. So, the reality is that I feel very, very strongly about, not only supporting the local economy, but the fact that they're supporting real technology and providing and trying to get real solutions into this country to restart. >> And the young people are really engaged on Blockchain crypto. >> Absolutely. And you know, you'll have a lot of young very very aggressive developers. I've met a lot of people here, who've come here. A lot of locals who are looking for work in Blockchain and developers. So we're very excited to really really see that everything is kind of kicking back up here in Puerto Rico. >> Well, my final question for you, Luis, is as an industry participant and developer and player, what is this wave about? You know, you put your industry hat on and expert hat on, what is happening? I mean, what is really happening with Blockchain Crypto and decentralized applications? Because there is so much action, people want to get on this wave and surf this puppy. What's happening? In your personal opinion, what is this wave all about? >> I mean, I think that this is, again, not comparing to the dot com era, but it's giving the average person the ability to get into real industry. It's allowing everyone to be a participant, an investor, a developer, an overall embraceor of the technology that you haven't seen in a long time. Usually the software development and putting out products takes a lot of technical skill, and this is really kind of encouraged everyone to embrace it, look at it, and allows everyone to participate. >> And so basically the democratization of society. >> Absolutely, but it's also the democratization of a world economy, not a local economy. >> And the locals can play and customize it for their own personal needs. >> Absolutely. >> Well Puerto Rico's got a great opportunity on the loose. Thank you so much for coming on. CEO of grainchain.io, I'm John Furrier at the Blockchain Unbound Conference. Day 1 of 2 days of coverage. We're talking to all the experts, entrepreneurs, thought leaders, investors. More live coverage after this short break. (logo music)