Nov 28, 2018
| 4 min read

Podcast #37

Unpacking the Disruptive Power of Blockchain - by Mark Jeffrey

Mark Jeffrey is Co Founder and CEO of Guardian Circle, a blockchain-based startup focused on enabling people anywhere in the world to summon critical help from their smartphone. He’s an accomplished entrepreneur and CEO as well as a published author. Our conversation explores his path through technology, becoming one of the first podcasters to serialize fiction, the characteristics that make blockchain special and some of the key applications. 

We discuss the origins and goals of Guardian Circle, the ongoing regulatory challenges in the cryptoasset market, key distinctions between the NEO, EOS and Ethereum blockchains, and the obstacles to mainstream adoption of blockchain based applications. 

He also shares commentary on notables startups including Spotcoin, EOS Lynx and Neon Wallet.   

 

Recommendations 

Podcast: Cryptonomics with Mark Pesce  

Film: Trust Machine directed by Alex Winter and narrated by Rosario Dawson 

Bitcoin Explained Simply: An Easy Guide To The Basics That Anyone Can Understand by Mark Jeffrey  

The Case For Bitcoin: Why JP Morgan CEO Jamie Dimon Is Dead Wrong — And Why Bitcoin Is The Greatest ‘Store of Value’ Ever Invented In Human History! by Mark Jeffrey 

Amazon’s Mark Jeffrey Author Page 

 orange-line.png

 

We'll notify you weekly about new podcast episodes, upcoming guests, and news. You can subscribe to the podcast and if you'd like to be considered to appear on the podcast contact us.

 

View Transcript

Good day everyone this is Ed Maguire, Insights Partner at Momenta Partners, with another episode of our Edge podcast, and today our guest is Mark Jeffrey. Mark is Co-founder and CEO of Guardian, but also in my opinion one of the most articulate advocates for the power of decentralization. I’ve heard him on a number of panels, he’s incredibly insightful and quite deft with his ability to explain really complex topics in a very understandable way. I had not realized this, but he is also a published author with 8 books I believe to his credit, he’s a Random House author, so that explains a lot about why he’s such a fantastic communicator.  We’re going to talk about his background, we’re going to talk about his company, Guardian Circle, and get into a whole bunch of other topics as well.

Mark thanks so much for joining us.

Hey, Ed how you doing? Thank you for having me.

Awesome. It’s great to talk to you, and I always like to start off the discussion with a dive into your background, and really understand what it was in your background that ultimately led you to become a Co-founder and CEO of a blockchain company?

Well, I’ve been a Tech CEO and/or CTO for about 20-25 years or so. In my work life I grew up during the whole internet boom of the nineties, and I was into the internet before it was hip to be into the internet, it wasn’t a thing yet, so we’re talking ’93, ’94, something like that. I actually worked at a company called Delphi Internet back in 1994 through ’95, which was a very early online service, not even an ISP.

Long story short I guess, going to where the next cool big thing is, is something I try to do, and I’ve done it most of my career. Even with the books, you mentioned I’m an author, the way I got published was after I wrote my first novel in 2004, I decided to podcast it, so I was one of the very first people on Earth – one of the first three to podcast a serialized novel in that fashion. When I picked up podcasting, I suddenly had millions of listeners, apparently because I was just one of three people that had three books. So, as long as it wasn’t horrible you got an audience. When blockchain came along it grabbed my attention pretty quickly, and by quickly, I mean 2013, I did find out about it in 2011 and I discounted it because I didn’t understand it yet. Then in 2013 I took another look at it, and all of a sudden, the little click went off in my head, and it felt very much like the internet did in the early days when I first saw that, which a lot of people have said that. I’m attracted to these things, I’m one of these people, moth to the flame kind of thing, I guess! That’s how I got into it.

What are some of the parallels that you see between the blockchain industry, or the state of the technology as it were, and the internet at the time that you dove into it? We do hear a lot of parallels drawn but would love to get your insights on what you see that feels like history rhyming as it were.

I think the biggest thing is, the internet democratized publishing, video, and radio if you will. Basically, anyone could now publish their views online, and today you might argue that’s actually become a problem, but it worked. It did provide a microphone for everyone to the entire planet, and this is another force of democratization, except this time, and I’ve said this before, the internet itself… Marc Andreessenlikes to say the software is eating the world. The internet ate telecommunications, media, retail, and a few other things, but that’s kind of it. Whereas, blockchain built both democratize and eat world money, world finance and banking, world law, world legal systems, and when you look at that, all the money in the world when you add it all up is about $80 trillion, so that meal is orders of magnitudes larger than what the internet is. This is a democratizing force that is also reshaping institutions and governments this time, and banks. I believe it will be orders of magnitude more important, and also the opportunity is orders of magnitude larger in terms of dollars, for those who get it right. So, I’d say that’s the biggest way in which it rhymes.

What in your view are some of the characteristics of blockchain, or distributed ledger technologies that do create this disruptive breakthrough?

Well, the biggest one is that you can have scarce objects, scarce digital objects in a decentralized manner for the very first time. So, to explain that as clearly as I can, in the old world before blockchain if you wanted to have decentralized objects, whether they be magic swords in the World of Warcraft, or digital dollars, you had to have a centralized computer that kept a ledger of who owned what; that guy over there has got three magic swords, this guy over there has got 20 Mickey dollars. You always had to have a computer at the center, so you had to trust somebody, you had to trust that person controlling that computer wasn’t going to cheat and give their friends a lot of magic swords, and you none, or take your sword away from you.

A lot of people were bothered by this because they wanted to have digital objects, but they didn’t want it to have centralized control. So, what the blockchain, which is the engine underneath their coin, provided for the first time was a decentralized kind of Napster-like scare digital object universe. The first obvious application of that is money, because there’s only so many dollars in the world, there’s only so much gold in the world. So, it made sense that replacing money in this decentralized fashion is the first place you can go, but there’s a lot of other places; title deeds to houses and boats and cars, those are scarce digital objects, baseball cards are scarce digital objects, Pokémon and Magic: The Gathering cards are scarce digital objects. So there really are a giant number of things you can do with this.

Almost as a side-effect there are two other characteristics of blockchain that also make this incredibly disruptive, one is immutability, a lot of people talk about that, and that basically means that the record of what happened is preserved in the blockchain; in the case of money, who transferred how many dollars to whom is unchangeable. Even though this record is distributed, and everyone’s got a copy, nobody can go and change it, there is absolutely no way to do that, which is amazing. We’ve never invented anything like this as a race, this is the first time we’ve had something where truth is provable, and everyone can agree on a version of events, because its mathematically provable that its true, that’s a very new thing. You can have evidence for example that’s presentable in court where nobody can argue about whether it happened or not, because it’s on the blockchain, it definitely happened.

Another side effect of this would be, you could create perfect voting, so no more arguments about whether the votes were tampered with in those Diebold machines, we would know, there would be no argument about those things anymore. So, that combined, those characteristics are something very new on the face of planet earth, we have never had this before. So, it is insanely disruptive in these ways.

What in your views are some of the more viable used cases, at least in the near term? You’ve already mentioned crypto-currencies, as in many respects it’s theproduction app on blockchains, and it’s also instructive that the need for scarcity in massive multiplayer online gaming is an area where Brock Pierce who is one of the big thought leaders and evangelist to the space built quite some extensive businesses. But as you look at the applications of the technology, what do you see as areas of… paths of least resistance, at least in the near-term?

Well I do think in the near-term that digital money, but different from what you’re thinking, is the first batch of applications that we see, let me explain what I mean. If you create a form of digital currency for use within a specific ecosystem, the early participants in that ecosystem if they are paid in this token, and hold onto it, and the ecosystem then expands, then those tokens go up in value commensurate with the expansion of the entire ecosystem. The early participants in that ecosystem can reap outsized rewards, so the quality of money is different. People compare it to stock, it is notstock, but it acts like stock in that it can appreciate. There are other things that are not stock that appreciate also like houses, cars, property, digital objects inside a World of Warcraft, that sort of thing, so, it is that class of thing, it’s an asset. A very good example of this would be Uber is nothing without its drivers, Airbnb is nothing without its host, Airbnb knows this, and Airbnb very recently asked the SEC the Securities & Exchange Commission for a way to give their hosts stock, equity, because they realized that really those are the people doing 90 percent of the work that provides 90 percent of the value for Airbnb, and yet because they’re not employees and there’s no structure to award them stock, they cannot appreciate in the wild appreciation of the ecosystem.

The following week after Airbnb asked for this from the SEC, Uber asked for the exact same thing, and as we’ve seen, the world of the SEC, especially the United States, this will probably never happen, I have zero faith in that happening. So, I think that token-based ecosystems where you have a situation where the end-users are in some sense also co-owners, like with Uber drivers, and Airbnb hosts, you’ll see new ecosystems rise where those worker participants are now using tokens, and reaping outside rewards. So, again, the quality of the money is different, it’s not like a normal dollar, the fact that it’s not stable is in fact a feature, not a bug.

It’s been quite remarkable in the last 18-months when we saw the explosion of all of these tokens, no matter how they’re defined, whether securities or utilities is becoming this tradable or speculative asset in the market. We saw quite a lot of creativity, a lot of scams, a lot of irrational exuberance of course that’s correcting, but what do you think we’ve learned so far going back to 2017 when we had this explosion of assets? Is there a formula that will work for these assets, or do you think we’re still in a period of continual experimentation until we are able to hit on a few things that work?

We absolutely just had a period of a rational exuberance, which happens in every market, it happened in the early internet when we saw that in the nineties with the .com bubble. The .com bubble was about $7 trillion that was then wiped out. By comparison we’ve only seen the crypto market go up to about $600 billion, so it’s a fraction of what the .com bubble was. We also saw a lot of bad companies, or projects, or whatever you want to call them, outright scams come out of nowhere and basically take a lot of people’s money. That was obviously not good, that’s bad, nobody wants to see that. However, I think a lot of people got burned by that, and I think the people who are investing in tokens have now learned a lesson and they’re smarter this time. They are not rushing just to invest in anything right now, and its good, they’ve all learned a lesson, some people learn that lesson with houses and real estate, some people learn it with gambling, so it’s not the only class of thing that people can learn this hard lesson with.

The other thing that’s happening is that a lot of the activity in this space has moved out of the United States, and is now centering itself overseas, it’s like inverse Silicone Valley where the core of the activity is everywhere but Silicone Valley, and not just Silicone Valley, outside the United States. I think an unfortunate side-effect is the rest of the world is learning about this and iterating, and being more creative faster than we are, and that’s going to put the United States at a significant disadvantage in the coming years. Because this thing is global, worldwide, and there’s so much enthusiasm for it from people all over the world, it’s not going to go away, so the question is how to embrace it. There is a middle ground where we have enough regulation where the scammers and the outright horrible people are caught early, and prevented from doing their dirty work, and yet there’s a fertile ground for new ideas and experimentation to occur within, as well, as outsize rewards for average, non-accredited investors. That piece of the puzzle needs to be preserved somehow, that’s part of the attraction of this world. We’re also seeing as I’ve said before Uber and Airbnb, there’s a need to give unaccredited investors a shot at owning a small piece of these expanding ecosystems. Right now there is no viable way for them to do that, but the token world will provide it.

By the way, I don’t believe very strongly in the security token, a lot of people are talking about security tokens right now, there are zero security token exchanges, there are zero security tokens listed on Coin Market Cap, so at this moment in history they are phantoms, they are theoretical. There are people who have created security tokens and own them, but there’s no liquidity, and we don’t know yet whether they’ll, ‘Work as advertised’. That said there is one security token, the next token for the next NEO-based digital exchange that just went live for trading on the Aphelion. Anyone anywhere on earth, that’s another decentralized exchange that competes with max, so the next security token is freely available on the Aphelion decentralized exchange, which means anyone on earth accredited or not, not KYC, can go by a security token right now on a decentralized exchange. So, if security tokens work, I think they’ll end up sort of being like utility tokens in that they’ll be uncontrollable. At least that where it seems like it’s going right now.

Yes, it’s clearly a challenge for regulators, and I know the US at least at this point has taken a very slow but ultimately a non-constructive approach for the industry here in the US at least. Obviously, we don’t know how all this is going to pan-out, but it sounds to me like the center of gravity has really shifted outside of the US, which at this point is a shame.

Yes, that is absolutely a mistake, no question about it. I will say that the SEC has really done no harm, they have in many ways been very reasonable, I should probably say that also they could have brought the hammer down on this whole thing, which would have been the worst response possible. They didn’t, they’ve had a very prudent and sober approach to it, so they’ve done no harm, but they’ve also done no good. They’ve also been sort of spooky to legitimate entrepreneurs and legitimate projects, and they have not provided clarity. So, they kind of get a C-average in my book at this point.

They certainly are trying to walk a line and balance the need to be a bit clearer with guidance, as well as trying to stay out of the way of innovation, it’s certainly a tough balance to achieve. I guess. The way they’ve approached it is to be a lot slower than most people would like for specific guardrails.

I’d like to turn to your company and understand a bit of the drivers, the opportunity, the business problem that led you to find Guardian Circle.

Guardian Circle is the name of the company and the app, and the symbol is GUARD, the token is called Guardium. So, together that creates something we call global decentralized emergency response, so, Global 911 basically. The problem is that for 6 billion people on earth, emergency response services are either non-existent, corrupt or inefficient, so for most people on earth there’s no magic number you can call when bad things happen. For the rest of us there’s a billion of us who do have a 911 system, here in the States its antiquated, it basically has not been updated since 1968, so if you call 911 from your mobile device, they have no idea where you are, none. So, if you don’t know where you are, and you can’t tell them, you can’t get help which is just crazy! It’s just insane that Uber can find me more easily than 911.

Our thought on this is, we should just start from scratch, if you’re building 911 today what would you build? Our answer is, the way the world should work is no matter where you are on earth, whenever you are in trouble all you should have to do is press a button, the button sends an alert up to the cloud, the cloud looks down and sees what people and resources are already near you, then activates and coordinates and pushes that all that help to you as quickly as possible. Our goal is to get 10 people to you within three minutes, anywhere on the globe. So, who are these people? Well it starts with your friend’s family and neighbors, they’re on your emergency alert grid, but it also looks for nearby EMTs, nearby people who are good Samaritans, nearby people who have equipment depending on what the situation is. If you’re in a situation like a hurricane in Texas you want someone with the boat like the Cajun Navy provided during the Texas hurricanes, about a year to a year and a half ago. So, this new mobile location of where emergency grid is, is what we’ve built and we actually have apps up and running right now, and like a lot of projects actually have apps in the Appstore, and iWatch, Android and Amazon Alexa, so we have a voice version, we also have an API that allows any device provider to plug their alert device into our grid, and where the coin comes in, Gaurdium is there’s basically seven ways in which its used, I’m only going to talk about two or three because the rest would take a while.

The obvious and biggest way is that responders whenever you have an alert, after your alert is over, we give you a list of everyone who responded to your alerts, and that could be your friends family and neighbors, hopefully they’ve responded because they love you, but also the nearby EMTs, the nearby good Samaritans, they’re also listed, and you basically decide how much Guardium you want to give each one of them, depending on how much they participated, or benefitted you in your response. You hit a button, it’s basically like a tip and you send it out to them, and this is how people can earn Guardium by responding to an alert. Now in America that probably doesn’t sound like a lot, but if you’re in most of the world, that is everything, it’s crazy that they’ve never had this before. So, in some sense Guardium now becomes safety, the more GUARD you are able to offer for your alerts, the bigger reward cloud you have, the more help you’re able to attract. That’s the first way in which Guardium is used.

The other big way is, if you are a device provider, so let’s say you’re Philips with the iPhone, let’s say you’ve got a car play device in your car and you have craft detection, there’s a ton of different devices I could bring up, those manufacturers can plug their devices in the Guardian Circle by buying Guardium and staking it in a wallet. By staking, it just means locking it up in a wallet, so for each GUARD that you hold, you can add one device, or one GUARD equals one device. So, if you have a million GUARD you can add a million devices to our grid. Normally when you use an API it’s a per seat per month fee, we don’t do that, we just say buy and hold GUARD, you can then use our API for free forever, so long as you have that GUARD. And at some point, in the future you may decide to sell that GUARD, and if we all do our jobs and the ecosystem grows, hopefully that GUARD will be worth a lot more than it was when you bought it. So, you might actually make a profit by using our API. That’s the basic design of the ecosystem.

Are you focusing on adoption or building networks in areas where there traditionally have not been first responders, or 911 systems?

Yes, that will probably be our first target, we actually made a final decision on that. I can tell you this, we will have new versions of our app that are significantly enhanced from the ones that are out now, those will be available in January of 2019. We will release them worldwide in several languages for both Huawei and Android, however we will focus our marketing efforts, our boots on the ground efforts in one specific geography, probably a city. We have a couple of candidates for that, but we haven’t announced which one we’re going to pick just yet. Some of the cities we’re considering are New Delhi, India, Mexico City, Puerto Rico – even though it’s part of the United States, it’s been sort of neglected with respect to emergency services. There are a few other places we’re looking at as well, as well as we have two very large partners that we’re talking with about API deals, if we land one of them before our launch date, we may decide to roll out more strongly with them. So, it’s a bit up in the air right now, but we should know soon.

That’s very exciting, and I know you’ve been very vocal about the need and the lack of ability to connect people globally to services around emergencies, so it’s an exciting project. I know you’ve also spoken about working on NEO, and there’s been a lot of discussion in the industry about the Ethereum blockchain which has essentially pioneered the concept, or the vision around Smart Contracts, but a lot of the criticism has been the through-put, the scalability to be able to stand applications up on the main-net, and have a large volume be processed. You work with NEO, and I know you’re pretty familiar with EOS, could you talk about some of the innovations that you see in the market, that are most significant to advance mainstream adoption of applications such as yours, that are being built on blockchains?

It is the age-old Ethereum, versus EOS, versus NEO question, that is a very big question and there’s a lot of opinions on that. I can tell you where I stand is here, I don’t believe Ethereum will ever scale, I think Ethereum is Myspace, it was an absolutely brilliant first wave proof of concepts, never been done before thing, but then it is a victim of its own success, and I believe at the moment there are too many engineers with too many differing ideas about how to scale it, squabbling, and there’s no iron fist dictator-like ruler, ethalic is not going to do it, which unfortunately I think it needs in order to move forward at this point in its history. So, I don’t think we’re going to see it scale.

In the meantime, there are two blockchains which are proven to scale today, one of them is EOS, EOS can do 6,000 transactions per second, it has sub-second transaction speed, which is blazinglyfast, its like a Google search, we’ve never seen a blockchain do this. There is also an article that came over the weekend however, pointing out that EOS achieves this by essentially cheating, which is true, that is my understanding of how it works. It essentially keeps two sets of books, so you have the blockchain where transactions are eventually written to, about 106 seconds after they’re initiated. In the interim they’re kept in distributed Mongo database that all the block producers keep in sync and up-to-date with each other. So, really when you’re interacting with EOS, you’re not interacting with the blockchain at all, you’re interacting with this distributed Mongo, which makes it super-fast. Is that a cheat, does that mean its not a blockchain? Is it a blockchain with a cashing layer? Or, is it effectively a database with a blockchain as its logging afterthought? It depends on how you want to frame that. So, I don’t know, I can tell you it works though.

There’s a lot of Ethereum projects, the mean trend I’m seeing right now is a defection from Ethereum over to EOS because of this blinding speed. In the NEO universe, NEO has long been a very scalable and fast blockchain, its average transaction time is between 5 and 15 seconds, however it is a real blockchain, there’s no argument about that, and the transactions are final after 15 seconds, for sure, whenever the block is completed. It can do about 1,000 transactions per second, we’ve seen that, and they say they’re going to be able to do 10,000 transactions per second very soon, and the architecture allows for it to do millions of transactions per second, eventually. Which I also believe it’s probably true, it’s true of both EOS and EON with their present architectures.

However, NEO has stumbled a little bit in recent months, it came to light that there’s a Vicentine for tolerance issue, and some stability issues with nodes. However, NEO appears to be attacking that problem vigorously, they’re hiring engineers like crazy, there’s about 40 engineers to my knowledge working on NEO vs about 4 working on EOS. So, NEO definitely has the advantage there. The other thing NEO has is a very rich set of tools for developers to connect their applications to the NEO blockchain.  

So, getting back to your original question, I’m sorry it took that long for me to get back to it, for Guardian Circle, we can build a very integrated crypto-currency experience into Guardian Circle. We could have a Guardium wallet in the app, we can have all kinds of Guardium related operations, buried very deeply in the normal operations of Guardian Circle, only because we’re on a NEO platform. If we were on the EOS platform we would have to use an exterior wallet like Lynx, and you asked what I thought was very exciting in the EOS universe, right now its EOS Lynx, it is EOS Lynx that sort of makes up for a lot of the deficiencies of EOS in terms of developer tools, by allowing people who make daps to plug their dap directly into the Lynx wallet; you don’t have to write your own wallet, and frankly it’s very hard to write your own wallet in the EOS universe because the primitives and the raw tools just don’t exist yet, like they do in the NEO universe.

However, EOS does a lot of really cool things. It’s very Grandma end-user easy to use, they said that they’re releasing a decentralized exchange built directly into the wallet, and a dap store built directly into the wallet. So, the EOS Lynx wallet will be the hub of everything you do in the EOS universe. Which is a very different way of looking at it, NEO I don’t think will ever operate that way, but I do like that vision, it’s just very different from how NEO does it. Frankly my audience for Guardian Circle are Grandma, and people in the developing world who or may not know about crypto, I need to make sure that I don’t require them to know about crypto. They may think of Guardium and GUARD as just points within the system, and that’s just fine, and if they know that they’re looking at crypto currency, and are like, ‘Oh, wow, I want to export this to an exchange’, they can do it, we have a fully featured wallet in the app. But if they don’t know there’s crypto, they should never have to figure that out if they don’t want to.

The whole concept of the wallet and the UI is super-important. When I interviewed Fred Kruger for the podcast, it was a couple of weeks before the EOS Lynx launched in August, you were there, and I was there as well. And as we speak, I think they’ve just passed 16,000 users, so it’s pretty exciting to see the accelerating adoption there of users.

I’d like to broaden the topic a bit, just to address some of the usability issues around crypto, and Fred had highlighted the wallet and security, but I’d like to get your take as well around what are some innovations that you believe are necessary in the ecosystem, so that we can start to see the approximately 70 million people globally that now hold some or other form of crypto, increase to potentially billions.

Well, all of these coins like Ethereum, EOS, and NEO, they’re only as valuable as the apps that are built on top of them, they’re like operating systems in that respect. You can have Microsoft Windows but without Microsoft Office, Word and Excel, Windows is kind of worthless without those things, so in the same way we need to see legitimate apps rise. We are starting to see them rise in the EOS universe, they’re just all gambling apps, so right now 90 percent of what’s happening in EOS is gambling, and the reason why it’s so effective is because it’s so fast, you can keep pulling the lever real quickly one after the other, keep rolling the dice. There’s nothing wrong with that, the internet started the same way, it started with porn and gambling, that was the two killer apps on the internet in the early days. It’s okay, I don’t think that’s a horrible thing.

But I think in order for there to be the Amazon and Google-like app equivalents in the blockchain space, there needs to be really easy to use on and off, off rams to tokens. For example, in my universe in Guardian Circle I need a really easy way inside my app for my users to purchase more Guardium, just swipe a credit card, more Guardium appears. That should just be a really simple, easy thing, anyone can do. Right now, that’s very difficult because of the legal and regulatory environments surrounding Crypto in the United States, and frankly elsewhere as well, it’s not just the United States problem. And frankly, once people own Guardium inside of Guardian Circle, they need a way to convert it back into dollars very easily, so there’s no technical reason why that can’t be done today, like super-easily. It’s strictly a legal banking and regulatory issue. So that needs to get cleared up, and I don’t know how that happens quickly, I do know that there are some attempts in the NEO universe to provide that. There’s a company called spot coin which has promised to have a Theo to NEO token, NEO token to Theo service up and running by December of this year, so we’re just a month or two away from seeing that. They’ve not talked yet about providing an API for people like me, but I think it’s going to be contained inside of the wallet somehow. So, Fred I think is approaching this problem through a stablecoin intermediary.

Yes, I was going to ask you about your views, stablecoins are getting an enormous amount of attention these days, and I’d love to get your thought on potentially utility, and some of the promises and misperceptions around the potential for stablecoins.

Well I do share the enthusiasm for stablecoins, I think the excitement is legitimate, and we should be excited about them. They do provide an on and off ramp for Theo currency in the digital universe. There are banks now that will actually white label the production of a stablecoin to you, so if you want to create your own stablecoin you can, the bank with take care of the Theo on and off ramps for you, and then once you have that stablecoin that stablecoin can then be converted into your token very easily. So, that is one possible away around this whole mess, is just have stablecoins in the middle, and obfuscate that from the end-user as much as possible, so they don’t have to think about it. So, that is absolutely one way to go.

Tether has long been the go-to stablecoin of the crypto universe, but there have been a lot of questions about whether Tether actually holds the number of dollars they say they do, to back-up the Tether tokens that are out there. So, that seems to be failing at the moment, that has opened the gateways for a number of other competing stablecoins. I think like anything there’ll be 100 of these stablecoins, and then there’ll be like three!

I think at the last count somebody had counted up about 73 different projects. I know there’s some interesting ones, there’s algorithmically defined stablecoins, there are asset-backed stablecoins, I heard a presentation by Reserve last week in the city, it was kind of interesting, they put together this hybrid of a Fiat and Crypto basket-backed stablecoin. It was interesting to see a pretty savvy New York audience just not really get it. So, we’ll see, I think it’s great to see all this experimentation.

Yes, it is. I think you’re right, there are different ways of creating a stablecoin are pretty interesting. There’s another group, I don’t want to out them, I don’t know if this is confidential or not, but there is a well-known group proposing to do an African stablecoin based on phone minutes. So, the phone minutes are what back the stablecoin. Pretty interesting.

Well, I guess if you think about certain countries in East Africa… I heard a statistic that about 50 percent of commerce in Kenya gets conducted over Impacea which is pretty unbelievable!

Yes, phone minutes are now currency, it’s just phone minutes, never mind the stablecoin, the phone minutes directly. So, because that is something of value, that’s an asset-backed stablecoin now.

It’s really fascinating. As you’ve dealt with the regulatory environment in the US and globally, are there any regions or countries that you believe have a particularly constructive view? I know we’re starting to see a number of small locations; Malta is dubbing itself as blockchain, and you’ve got in Puerto Rico the Puertopia initiative to try to attract investment there, and Mauritius, Gibraltar and a number of others. Does anything jump out at you as particularly promising, or potentially viable for companies to incorporate, and be attractive to institutional investors.

Yes, like you probably I’m hearing an awful lot about Malta. Malta seems to have grabbed the crown, there’s a consensus building that Malta is the place you want to be. I haven’t been there myself, so I can’t speak for that directly, I have been to Gibraltar and I was pretty impressed with what I saw there, it was very clear that the Government of Gibraltar really, really wanted to be at the center of the blockchain revolution. So, because the United States are fumbling the ball, these other countries have basically seen that they can become the next Silicon Valley if they basically pick that fumble ball up, before the United States realize how bad of a fumble it was!

So, these places are scrambling to be the leader of the pack. Cayman Islands is another one obviously, sometimes I hear a lot about Switzerland, I’ve heard less about that recently. Puerto Rico, the problem there is its part of the United States, so it is just by default subject to the wrong laws. Wyoming is also very promising in the United States, but again it’s in the United States, however if I was going to do something in the United States I would do it in Wyoming, because the State of Wyoming is dead set against on seeing utility tokens thrive and survive and do well. So, the State of Wyoming is going to fight this battle with you, if the SEC decides to do something really crazy. I don’t know, I do think its not going to happen in the US. Singapore is another place I hear a lot about as well.

It’s funny how much at least ICO pitches and fundraising have moved to South Korea at this point. I heard a statistic that about 40 percent of the population of South Korea owns crypto, and the dynamics being so funny that you actually have printed magazines for all the Grandmothers that hold crypto! and don’t even spend a lot of time on the internet.

I’ll tell you a story that I heard about South Korea, you’re right, 40 percent of the population holds crypto which is amazing. The reason why is because South Korea play video games, they understand digital assets, it’s not a weird new thing, it’s just, ‘Oh yeah, of course’. So, their version of the SEC, their head guy initially stood up and said, ‘You know what? We’re gonna ban this crypto currency thing, it’s bad’, and people started writhing outside of his house, and he got so stressed out that he died. I’ve heard this story from a couple of other people. So, the new guy that came in basically said, ‘Okay, we’re going to allow crypto, we’re not going to squash it’. So, yeah, South Korea is very serious about crypto.

Absolutely. I just want to look forward and prognosticate a bit, I think what’s so interesting about the rise of these blockchain enabled companies and organizations, potentially de-centralized organizations, is that there’s this theme that many people talk about as really internet 3.0, and the rise of a new generation, 15-20 years from now we may have the Amazons or Googles of the next generation that are being developed in some garage right now. As you look forward, I’d like to get a sense of what are you most optimistic about, in terms of the real impact, social impact and economic impact, and what keeps you up at night?

Like you probably, I do believe that the next Amazons and Googles, the great companies of the future are in their infancy of being founded right now, and they are definitely blockchain-based, and they’re very likely not inside the United States. What I worry about is, unlike the original Amazon and Google and those companies, it’s almost like we’ve all got snipers shooting at us whilst we’re trying to do this, snipers in the form of banks and governments, to varying degrees. We have very powerful interests that do not want to see this new world succeed. However this is a zeitgeist and sort of a movement if you will that is coming from the people from every country on earth, so it probably can’t be resisted ultimately, but I think its going to be a little bloodier than the original internet boom-wise, because I think we’ll see some governments, some regulations and some banks just crush some of these people and projects out of existence along the way. They will ultimately triumph, but I think it will take a little bit longer maybe than it should, there’s this headwind blowing into it that wasn’t there for the original internet.

Yes, you definitely didn’t have to fight the entrenched banks and regulatory protected financial systems when you were selling pet food online, or books on line as it were where your competition is bricks and mortar stories. It is a very different dynamic, and of course one can never underestimate the power of inertia and the intent of entrenched interest to protect the frictions that allow them to extract value out of the economy, that can be allocated in potentially a much more transparent way over time. That’s going to take a lot of work.

You see a lot of interesting companies and pitches, what are some of the projects or companies that stand out to you that you’re most excited about?

Definitely with what Fred Kruger’s doing with EOS Lynx, we talked about that, but I am continually blown away by how fast and how far he’s advanced that whole wallet/decks/pretty much everything to do with coin. He’s basically creating a new browser, so I think in some sense he’s the new Netscape, and I applaud him for everything that he’s doing. On the NEO side of the fence, sort of his opposite number in the NEO universe is the NEON wallet, and there’s the new version which comes out today. It’s been in the works, there’s been about 40 developers working on it for about a year. We’ve seen screenshots of it, but we don’t know all the features, it looks like it will probably be the equivalent of what Fred has built in EOS Lynx, just on the NEO side of the fence, we’ll see. Supposedly it’s going to be up and released today, so right now those are the two things that really are exciting me.

The other gaffs that are succeeding right now are gambling things, and crypto-kiddies type things to a certain extent, not much else has succeeded yet. So, I’m very hopeful that it will, but obviously I think what we’re doing is simple enough that it’s got a shot at succeeding, but it will be difficult for us to get adoption, nonetheless, it always is. We’ve got a good couple of years ahead of us before we start getting exponential growth, if we’re able to get it going.

No doubt. This has been really fascinating to hear your views on the landscape, and a lot of the work that you’re focused on. I always like to conclude our podcast with a recommendation of a book or resource, and of course we will absolutely put links to your books as well. I don’t know if there’s any one of your books that you feel particularly strong about but would love to get your thoughts on what might be a good recommendation for our listeners.

Yes, I’ve got a couple of things. There’s a podcast called Cryptonomics by a guy named Mark Pesce, by the way he’s one of the guys who invented Vermal, sort of a new language back in the early internet. He’s now covering crypto, he’s a really, really great podcaster, so I highly recommend his series of podcasts. There’s a new movie coming out, at least premiering here in LA in about two weeks, called Trust Machine, and that’s done by a guy named Alex Winter, if you’ve seen Bill & Ted’s Excellent Adventure, he’s Bill, he’s now a director. He’s done several really great documentaries, he got Roserio Dawson to narrate it, so it’s big stuff. It’s all about blockchain, we’re in the movie along with about eight other folks who are doing various things in the blockchain space, but I’ve seen enough of it, I haven’t seen the whole thing, but I’ve seen enough of it, it’s really good, so I highly recommend that.

My books, there’s two of them in blockchain, one is called, ‘Bitcoin Explained Simply’, I wrote it in 2013, so it’s a little bit dated, still correct but realize it’s a little bit old at this point. Then another one in 2015 called, ‘The Case for Bitcoin’, which is a prognostication look to the future, here’s what’s going to happen kind of book, some of it’s already happened and so far, it’s correct. So, thank God it’s holding on!

It’s always nice when you look back, and you have that validation that you were on the right track!

Yes. So far, so good. Of course, I hope you download Guardian Circle, and the apps for that are on IOS android and Alexa.

Absolutely, and we’ll put a link to that as well. Well Mark it’s been a pleasure talking with you, you’re fascinating as always to listen to your insights, and I just want to thank you again for taking the time to do the podcast.

Thanks for having me Ed.

[End]