Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Flavien Charlon, Gavin Wood, Richard Gendal Brown & Ron Gross: CoinSummit London – Panel: Decentralized Applications and Appcoins

Episode Date: August 21, 2014

This episode features a panel discussion called “Decentralized Applications and Appcoins.” Flavien Charlon, founder of Coinprism, Ron Gross of the Mastercoin Foundation and Gavin Wood of Ethereum discuss the fascinating things which are happening in the so-called Bitcoin 2.0 space. The panel starts with a short status update on each of the panellist’s respective projects. They also dig into some of the legal implications, lay out the security challenges and give their thoughts on how they feel the appcoin and DAC space will evolve in the coming years. Episode links: Coinprism Mastercoin Ethereum This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/034

Welcome to Epicenter Bitcoin, the show which talks about the technologies, projects, and startups driving decentralization and the global cryptocurrency revolution. My name is Sebastian Couture. And I'm Brian Fabian Crane. On July 10th and 11th, we were in London for the Coin Summit Conference. This two-day event gathered approximately 250 investors, entrepreneurs, and developers to discuss some of the most important issues facing the Bitcoin and cryptocurrency ecosystem. This episode features a panel discussion called decentralized applications and app coins. The Flavien Charlon, founder of CoinPrisom, Ron Gross of the MasterCoin Foundation, and Gavin Wood of Ethereum, who we had on earlier, discussed the fascinating things which are happening in the so-called Bitcoin 2.0 space. The panel starts with a short status update on each of the panelists' respective projects. They also dig into some of the legal implications,

lay out the security challenges, and give their thoughts on how they feel the appellists. Bitcoin and DAC space will evolve in the coming years. I really look forward to the next panel. We've seen a number of successful crowd sales. Very recently, Swarm, our sponsor, did a very successful crowd sale. We've seen MaidSafe do one a couple of weeks ago. Obviously, MasterCoin did one last summer. And just more generally, Appcoins and Bitcoin 2.0 is potentially an infinite source of

innovation in this industry. So really excited about our next panel. So Richard is going to be moderating it. So Richard is well known for his blog, which is gendell. WordPress.com, where he writes very, very detailed posts about various aspects of the Bitcoin industry and how the industry compares to the payments industry, for example. So Richard is a senior architect at IBM and someone who's been, I think, quite passionate about the space for quite some time.

Ron is the executive director of the MasterCoin Foundation. So Ron actually was on stage a year ago at what was called Bitcoin London at that time. And I think you must have pivoted at least three times since then in the various things you've been involved with. But MasterCoin has been really your main focus for the last year. And you've been one of the main drivers of MasterCoin. And Ron called me about 36 hours before the cutoff date for the MasterCoyne

fundraising, the initial genesis or whatever it was called, the... Let's say it again? The crowd sale, yeah, the crowd sale for MasterCoin. And I was actually just moving house at that time, and I forgot about it to my loss. So, that's Ron.

And then Flavion is the founder of CoinPRISM. He's a great developer. He's also... Are you full-time on CoinPRISM yet, or not quite yet? Not quite yet. Okay, so he's also a senior developer at Microsoft. And Gavin, last but not least, is one of the founders and lead developer of Ethereum. So welcome, guys.

So, hi, everyone. Thanks for coming back after lunch. Thank you for that introduction. So I guess, like many people, I started looking at this space two, two and a half years ago. And coming at it as an architect who focuses primarily on banking and financial markets at IBM, I spent a lot of time looking at Bitcoin and cryptocurrencies from a payment and currency perspective, which I guess has been the focus of most of this event so far. But then I started reading some various white papers that sort of turn the whole thing upside down

and said, actually, no, no, you shouldn't just look at this as a currency system. There's a fundamental breakthrough in computer science, which is all about distributed consensus, embedded consensus, and a new way of registering and tracking assets. So I'm delighted we've got these three projects representing. which I see is just covering the full spectrum. So the first place I want to go is to coin prism, which I see is representing, I guess, the simplest next step from Bitcoin,

which is to say, actually, these Bitcoin tokens can represent more than just a Bitcoin. They can represent anything and can be traded and transacted as if they are something else. So perhaps you could just explain that, elaborate on that, with a bit more be more articulate and I'm going to explain what you're doing with your project. So I'm Flavian Charlon, I'm the founder of CoinPrisom. And so basically, CoinPrisom is a wallet that can be used for issuing Codot Coins, receiving, sending Cronot coins. And so the concept of Codot Coins is, it's quite simple actually.

So it's a concept that's a very generic concept. I mean, MasterCoin uses it as well and, you know, Ethereum also can implement Codot Coins. There are also chains doing that. But the concept is, if I take the example of, let's say, a gold, billion bank, they would be an issuer of coins. So somebody would go and deposit some gold to that bank. And they would issue collard coins, which would be tokens representing that gold. So every coin could be an ounce of gold, let's say.

Then that can be traded on the blockchain. You know, you have it on your wallet and you can send it or receive it and so on. And anybody is able to go back to the bullion. with that token and exchange it for the physical gold. So you can both, so the issuer would both issue the coins and redeem them. So that's the general concept behind the Conod coins. And it can work with any assets. It's basically storing assets on a blockchain.

So you're taking, so you could represent any real-wale asset as a, you could turn it into a bearer asset tracked on the blockchain. So how do you, so what's the status of the project? Because for people who've been following this space, time. There's been talk of colored coins for as long as I can remember being part of the Bitcoin world. And we've seen various projects. We know the Cromwellic guys are here who presented yesterday. What's the current status of the CoinPRISM project and how does it relate to the other efforts? Is it a step beyond? Does it have a different philosophical outlook? How do people who,

I guess you've got 50% of the audience here is probably VCs? How do they distinguish between these projects and figure out what it is that you're doing that's unique? Yeah, so the concept of colored coins was coins, I think, in 2000. 2012, if I'm not mistaken, maybe a bit earlier. And from there, that was the first project, which was the ChromeWallet. It was called differently at the time. But it's the ChromeWallet, which is a downloadable wallet. And they presented yesterday.

And after that, more recently, starting last year, so we started working on CoinPRISM, which is web wallet, so different approach. and there are other projects also now popping up using collat coins so yeah there are different projects and some of them are not exactly interoperable together but that's also something that's going to converge with time so interoperability is something you're aiming towards thing is interoperability is something you're aiming towards yes yes it's uh it's definitely a goal yeah so and uh for for the about coin prism

uh so it just launched a month and a half ago uh May. So yeah and right now it lets you issue assets receive and send assets and the next steps would be to make a blockchain explorer for colloquines. Do you mind if I ask Babian? Yeah I do think so maybe you can you can explain a bit about the difference in the protocol between the different implementations. Yeah what's the different takes? Yeah so okay without going too much in the details maybe the original implementation the chroma wallet it's it

uses normal Bitcoin transactions, which look really like any Bitcoin transaction. And they use order-based coloring. So it's like they take inputs and outputs in order. CoinPrisom uses like a different method where we use the OPP return to encode metadata. And because OPP return is only standard, it only became standard in Bitcoin 0.9, which was very recent. This is something that couldn't be used before. But so this is one of the main differences between the two. mode.

And that's a pretty useful segue because I want to bring, bring Ron in now. So if I think of the colored coin projects as representing athletes and tagging, coloring, coloring bitcoins, I think when I first read the papers on MasterCoin, it was a revelation to me because what you seem to be doing was say, actually,

you know, forget currency, forget the Bitcoin's. What Bitcoin is actually giving is this consensus system, it's giving us a storage service, it's giving as a time stamping service. So it's almost like you're saying, actually forget half this entire project, we're just going to use it as a piece of infrastructure and then build something brand new on top.

So is that the best way to think about it? Or maybe explain where you are with Mastercoin at the node? That's the biggest revelation around the Mastercoin is that, you know, we've of course been inspired by efforts such as quarter coins. I think we've been around maybe a year before, at least in an idea concept level. And again, we saw all the recent developments in the last few years of all these out-train,

out chains everybody taking the Bitcoin code forking it and adding this feature adding that feature and each and every one of these outcoins had to worry about security problems mining a lot of them were attacked by miners of competing chains we realized or JR basically realized that once you have Bitcoin as the really core central network that everybody uses then there's no reason to reinvent the wheel we can just use that as a base level get all the time stepping it get the security, get all the mining, and just use Bitcoin transactions to encode arbitrary data. So, you know, that's, we basically take any master coin operation, issuing a new currency,

issuing a crowd sale, sending mastercoins, doing other things like decentralized exchanges, each and every one of these operations, they use the same Bitcoin addresses, the same private keys. They just signed the custom messages that are encoded into the blockchain. So what will be a real-world example of someone who's using MasterCoin right now? Who's your flagship project, your flagship user that shows it in action? Premier has mentioned Madesafe. It was actually a few months ago, not a few weeks ago, but yeah, that was the focus for MasterCoyne in the last year has been around issuing or enabling users to issue currency or issue tokens on the protocol. So Madesafe is a very good example of this.

It's a Scottish company. They worked for eight years in their space. They were building a decentralized internet. And they were looking into different business models. They were thinking of charging maybe 1% of all fees or other things like that. So when did they realize the power of Bitcoin and decentralized networks or of blockchain technology, basically, then they decided to use the massive protocol or domestic coin protocol,

issue made safe coins and then use these to power their application. So they're used in peer-to-peer applications where one person can send these coins directly to another person in exchange for a service that that person provides. So this whole area of decentralized applications is one aspect of how people can use master coin. Another aspect is a lot more down-to-earth, and that's a lot more like the things color coins have been thinking about, talking about. The most recent example from a few days ago, as cited on the Wall Street Journal, is real coin. That's a coin that is backed by US dollars in a vault or in a bank account. You send, you wire US dollars to that account, you get in return real coins. And you can redeem that.

There's K.YC in that process. But after you complete it, you have tokens on the blockchain that you can transact freely, efficiently, quickly, securely. That's a really good point. So I want to come to issuance in a few minutes because I think there's some legal and I guess security economics questions that it raises that I don't think have been fully explored. So just before I do that, bring Gavin in for Ethereum. Maybe you just bring the group up to speed A, so two things.

One, what is the simplest description of it? Because I think people, even today, you speak to people, they say to them, right, you get Ethereum and they nod, and then you say, go and explain it to me. And usually they can't. You're not allowed to use Turing. And you can't say Turing complete. So the simplest description of the vision, and then just bring us up to speed on what's the current state,

either with the Ether Sale or where the project currently is. Sure. So Ethereum can be thought of in two separate ways. One is the sort of vision, and I'm going to stay away from that for the moment. And the other is the technology. So in a way, the technology provides a generalized computing mechanism for doing social contracts, for creating and for enforcing social contracts. So then the question becomes, what's a social contract? And I think Bitcoin really gave us the first true example of a decentralized social contract. It's the idea of a clearinghouse or a currency system was a really sort of poignant, but very simple example of a social contract. So the idea being that, of course, I recognize the fungibility and the value of your bitcoins, as long as you similarly recognize the fungibility and value of mine. And so Ethereum says, right, well, this can actually be represented as a relatively trivial computation. Basically, if I spend some of my bitcoins, I give them to you, then my bitcoins are reduced by a certain amount and yours are increased.

I mean, it actually implements in slightly different ways, but that's, can ignore that for the moment. And Ethereum says, right, well, let's just make that into a more generalized infrastructure, a completely generalized infrastructure, for doing our. arbitrary social contracts. What would be an example? Because you could say there's a contract that says somebody must do X, but there's then the question of, well, how do you compel them or how do you resolve the case if they don't? And what fascinates me most about Ethereum is of the three projects, it's the one that seems to be, and you mentioned social contract, is the one that seems to get closest to the real world.

So we can agree that I have a certain number of bitcoins or I don't, so that they're worth something or they're not. But it's within a relatively closed world. But when you look at some of the things that I'm told that Ethereum, can do. The implication is the Ethereum system will be telling a human to do something or the human will do something because Ethereum tells them. And there's nothing that will make that happen. So what's an example of something that goes beyond currency that it could do that these other two platforms couldn't? So I think it's important to remember that once you have currency, you effectively have an incentivization strategy for getting people to do things. For instance, I might offer a reward

for somebody who walks my dog. And then we may have some cunning technological solution so that, for instance, GPS tagging on the dog or whatever it'll be, so that somebody, some may be one of a number of trusted dog walkers can take my dog, take them for a walk, and show a little QR ID to a little device on a dog's lapel. And we'll have a way of setting the contract so that that person then instantly gets paid, purely, literally for the physical act of walking the dog. And you can avoid the necessary middleman sort of fees for, working out, you know, who walked the dog when they walked it, whether they actually did walk

at them at the rest of it. Sure. Okay, so good example. Walking the dog is probably not the top of the... The must fix human problems facing humanity, but it motivates the point. I get it. Okay, so it's a very quick comment on what is the current state of the project. When should people expect to see something alive, something to be available to buy?

What should we expect? We're hoping for to commence the ether sale in the coming, if not days, then a week or two. It's been like this for a while, but we really are getting things sorted now. We've made a few structural changes. We've got the legal sorted, so we're basically happy to kick off. In terms of the development, we'll be shortly releasing our fifth proof of concept piece of software, so client, basically. With this, you can actually write contracts, test them, go on the test net, interact with other people.

We have a number of quite large projects using the Ethereum as their backbone. for their projects now. So we have one that's Project Doug. Although I'm not familiar with the nitty-gritty, I help the developers that they're active in the channels and we're given to understand that they're actually sort of using Ethereum to produce a functioning decentralized state. So is this the Preston-Burn initiative that entered the competition for the 100,000? That's right. Replace the foundation. Yes, very interesting.

So yeah, we're at a point where we really can implement quite complex decentralized applications on top of even just now with the proof of concept. And we're hoping within, let's say, six months, we'll have a contender for the final release and ready for the Genesis block to go. Okay, thanks. So which is the complex scenarios. Let's just go back to the simplest one, this idea of issuance. So I guess this is mainly a question for the colored coins and Mastercoin world.

Even if you take the simplest example of issuing an asset onto a blockchain or onto a blockchain or onto something like MasterCoin, it immediately raises all kinds of legal questions. So if the thing looks like a bond or it looks like an equity, then there are rules in most countries about who's allowed to issue them, what is needed from the perspective of a prospectus, and who's allowed to trade them. And even if that were not a case, there's a question then of, well, in a truly, in the trust-free Bitcoin world, you don't need to know who anybody is. But in the world where people are issuing things, you are completely reliant on that issue

of being who they say they are and being good for their words. Is there anything in either platform that either solace or. that trust and identity issue so you know who these issues are and you can be sure they are who they say they are and avoid the project on any work on the legal side of things so that people issuing things on your platform at least have guidance as to what isn't isn't allowed in a particular jurisdiction so maybe flavie and you go first yeah so product coin is like a technical solution but you may issue equity or bonds on the blockchain but it doesn't free you from your legal obligations so if you issue equity you still have to make sure that you can do that in your country if it's legal or not.

Like in the US, I don't think it is legal to do that. And the way you can enforce regulation if you need to is when you go in and out of the blockchain, for example. So in the case of Real Coin, I think the AMLKYC procedures are done when you either deposit money there or withdraw the money. And so they know who gets money into the system and gets money out,

but they don't know the chain in the middle, But in that case, I don't think it's actually required. So, yeah, you cannot enforce what happens within the system, but you can control the gates like in an hour. So just on that one, before we widen it back up. So who is or what is your target market? Because you look around here, you've got Northern Trust over there, somewhere you have a big custodian, you've got City GTS,

and you've got big custody banks. Is it your vision that they would be issuing or they would be representing securities under their custody on your platform? or is your target market actually start-ups or should we not be thinking of the securities industry? Actually, it's different types of assets you're planning to carry. Yeah, I think there are many applications to collect coins, right? But I think what's popular nowadays is basically what people are doing today is basically what people are doing with MasterCoin, which is crowd sales mostly. And perhaps like currency on the blockchain, which would be different, like fiat currency, for example.

that's the easiest use case to tackle. But equity is definitely, it has many legal questions. So it's definitely something that's going to take more time to figure out. Do you see it as your problem, as you're looking for investors, as you're looking to grow the organization, are you seeing that there's a problem you have to solve and that you need an answer for in order to be viable? Or are you focused entirely on the technology

and expecting others to come along either with legal rappers and other companies who've solved that. Where do you see your opportunity and your focus? Yeah, for now, we mostly focus on the technology. We let issuers figure out their own problems. If they're business models, if they're an issuer, they have to figure out what they can and cannot do. And we provide the tools to them,

but then they have to use it correctly. So, Brian, I guess a similar question. Is there anything that you're doing on the legal side? I guess anything that you learned from the Maitsafe work and also just address that identity question. How do we know who these issues are? Yeah, so definitely we've spent a lot of time in the last year, looking at this, talking to lawyers, investigating this.

First of all, I'll start from the end, the dice is still out, right? It's not clear what it's going to happen. Regulators are just now starting to slowly understand Bitcoin. I think they're very far away from understanding this type of advanced mechanisms. But, you know, there are looking at the space that we know. Now, of course, we advise all parties to that issue on these platforms to really check, do their homework, do their legal homework, consult with lawyers, understand what's going on. What we are, we're compiling our internal databases or knowledge bases that we share with everybody who's interested. Just capture the bits of knowledge that we know.

and we're working with an organization called Koda that sort of bridges the industry I think Ethereum are members that some product parties are also members in that because the issues are really cross-cutting it's not just Ethereum, just MasterCoints, it's the same issue for a lot of these so some bit of practical advice that I can give

we you said that shares or equity or issuing equity on the blockchain isn't legal in the US where we haven't found any place where it is legal. All right. So we're just telling everybody, don't, you know, don't issue equity, don't issue shares, construct your business otherwise. In the case of Madesafe, you know, they're in Scotland, they have Scottish regulation or UK regulation, but it was never a share, right? It's never a promise of future dividends or promise. It's a token that is used to power an application. That's a very easy thing to do. Like you go on Kickstarter, you will purchase an Uya or whatever, whatever it's a token. a game you want to or hardware you want to purchase in advance. So here you can purchase an access key to application before it's developed. That's one way to do it.

Another thing is you can issue an asset that is backed by something real. And in this case, you know, you have the asset. You can be audited. You can be controlled. I don't know anybody who's actually, you know, doing equity issuance. You know, some people are using similar terms, but, you know, B-Chairs, others. I'm, we're staying clear of these terms. It's interesting, it does strike me that if you're looking for opportunities or other

projects looking at this way, the one that cracks that legal side, the one that can wrap, can it's part of their company say, and also we've got a legal opinion or we have some legal agreement that says these are the things one can and can't do. And actually there are certain types of assets you can issue under this jurisdiction. It sounds like that would give them an advantage. It's the sense I'm getting from that. I think a better move on. because the next thing I wanted to talk about was,

and it was motivated by, I think it was the 51% panel earlier. I think it was Jeff Garzik who commented, he said, let's just be clear, the only coin that's secure or has the chance of being secure is Bitcoin was his argument. So I really want to cover two areas. The first one is, what's the Ethereum security model? What's the underlying assumption or belief about the future

that means people who build things on it can believe it will be secure? Do you need a huge pool of miners? Is it economic insight? What makes people believe it will be secure, given it not secured by the Bitcoin mining network? The fundamental philosophy of security is unchanged from Bitcoin. So the idea is that you have a proof of work, you have people who solve the proof of work,

and they are rewarded for that. So then the question becomes, are we fixing anything? or any perceived problems from Bitcoin. And I think to some degree, yes, we are. We're still 100% dedicated to finding a truly ASIC-resistant proof-of-work algorithm. I think the notion of massive investment leading to superlinear returns in terms of one's ability to provide that proof of work.

which is what we see when we see, what is it, three or four of the major mining consortiums taking up what's the percentage of total box mined? It's quite a lot. It's certainly well above 50. And this is a major issue, in my opinion, regarding security. With Ethereum, we are trying to reduce the reliance on A6 to zero, and therefore effectively bring the bar much lower in terms of a realistic return for computation powerputin.

And then it strikes me with the coloured coins projects, and I think probably MasterCoin to the same extent, the interesting thing I find there is it's the potential impact your projects have on the analysis of Bitcoin security. So if you take just the simplest interpretation of the simplest implementation of coloured coins, you could imagine a world where there's like say 5,000 Satoshi's or whatever the dust limit is representing a billion dollars in IBM stock and that's great I could send that output to

somebody and I'm moving IBM stock all around the world until somebody said somebody then notices and says well hang on a sec there there's a 5,000 Satoshi's there that if I can double spend I can steal a billion dollars now at the mining level that's just 5,000 Satoshi's and there's a question of well you know how interested would anybody be if it did happen maybe they'd be very interested because a double spend is a double spend. But from the mining perspective, the economics of spending, the amount of money you'd have to double spend, to double spend 5,000 so it's not very much. But from the colored coins perspective, it's a billion dollars. So there's this mismatch because what's going on in the colored coins and the master coin world

is opaque to the Bitcoin system. Is that something that worries you? Is that something you have any thoughts on? Is that something fees can fix? Is it an issue or am I over exaggerating? Yeah, it's definitely an issue at the moment from what we know today. But yeah, way to potentially fix that would be to have fees and so the miners would be aware of some of the most valuable assets on the blockchain and they would they would accept transactions with a fee proportional to the value transacted so if I'm sending a million shares of IBM the fee would have to be pretty high that case even though that's only 500 Satoshes but also this attack is kind of mitigated in

some way because if somebody it does a double span and breaks the whole ledger for one specific asset, what the issuer can do, he can always reissue new tokens that represent the asset and invalidate the previous ones. And he can do that according to time like a few minutes before the attack. So that kind of negates a little bit or mitigates this attack potentially. Is it a similar analysis for MasterCoyne? Basically the analysis is very similar for both protocols.

but I actually, I don't agree that, I think that this kind of attacks on, you know, whether it's 5,000 Stoshis or whatever it's representing the value, I think it's identical to Bitcoin. I mean, it's small pieces of data that represents an arbitrary financial value. And it's not easier to attack 5,000 Satoshes than it is to attack 1,000 Bitcoin. It's still the same 51% attack that's required for both. and the underlying assumptions and other all these protocols is that that is very very very expensive and hard to do now if there as the bitcoin economy grows and i'm including in that all these upper layers right if there's value added in their except just as in certain tokens as the value of this economy grows that the

mining industry has to grow to accommodate that right otherwise there's a gap in the security understood okay i'm going to before i wrap up with a few questions at the end in In the last 10 minutes, I'm going to open up two questions from the audience. So you get ready with the mics. Any questions for the panel? One down here at the front. This is a question for Gavin. So in the debate between having A6 coming out for proof of work

compared to just a general purpose computer, sometimes you'll see the counter argument online often is, oh, well, if it's just general purpose computing, then instead of having an ASIC mining consortium, you're just going to have groups of botnets and people running malware controlling a large part of the Ethereum mining. What would be your response to that argument? I would hope that we improve OS security to some degree.

I think that if a sufficient reward is offered, there'll be a sufficient number of people. who have secured machines that mine legitimately to outweigh the bots effectively running on insecure and often underpowered machines. But we'll do some modelling, we'll see. Do some modelling. Any more questions for the panel?

Okay, well, while the audience thinks, the thing that I often struggle with is, what's the end game for this project? So I deliberately came at this panel from a technical perspective. So here are things you could do with Bitcoin tokens. Here are protocols you could layer over the top. Here are the things that Ethereum could do. Where I often struggle, certainly when I'm explaining this internally in the company or to clients,

is to say, well, there are all these things you could do. But actually, what would people want to do and what is the world-changing outcome of building it? So, for Bitcoin, it's clear. I can send value from A to B with no third party near instantly. Not for free, but near instantly. there's a compelling value proposition. What's the dream, I'll ask this to each of you starting with you,

what is the dream that motivates you, that motivates you, you're full time on this project. What is it you trying to build? What's the vision? Oh, you heard, I think it was Joel yesterday from Swarm who was asking the VC panel,

like what kind of added value you can give me when I can raise all this money without you, right? So just look at all the financial industry that's developed, you know, in London and all these other capitals. There's so much, like, Bitcoin is just the first step. Bitcoin is money. There is so much more activity, financial activity, economic activity, entrepreneurship activity. And we want to provide people with tools

to do that directly peer-to-peer in a transparent way without relying on some central party that enforces these draconian laws and all these convoluted concepts, basically. It's the logical next step. There's so much activity going on in that space that is just waiting for a way to get to that money. Made safe, again, the perfect example. They're a Scottish company, the VC environment, the financial capitalist environment in there, isn't that complicated.

VCs tend to invest locally. They don't like foreign investments. But here they have a really good idea. They work for eight years. They publish their white papers and they get $8 million, right? Suddenly, over two days. That's where we're trying to facilitate. So that's why you get it.

wise why you work on it. So I guess coin prism is a much, much narrower proposition as I understand it. What's the driving vision? Because coming into this panel, I thought you said, you know, the world, all future financial transactions or financial assets will be represented on the platform. And the northern rock building will be closed, the northern trust building will be closed down. And custodian banks won't need to exist. And then you didn't engage with that, is if that wasn't the vision.

So what is this driving coin prism? What is your market? What are you going for? So I think, yeah, there are many use cases to be to like colloquine and assets on blockchain. But I think, you know, people always talk about very complex use cases and so on. I think some of most, a lot of them actually may not be that, you know, may not compete with what the world today does. But some of them are very compelling, like maybe the ability to send currencies, any currency, through Bitcoin, through the Bitcoin network. But then why wouldn't you use, say, Ripple for that?

Okay, well, Ripple is also an implementation of Kodotcoins, right? So I'm just talking generally. Yeah, you could use Ripple, but I think it's a very compelling value proposition because today what you can do, you can do it through Bitcoin, but some people don't want exposure to Bitcoin or, you know, you may want to just transfer a specific currency to somebody to your home country. So this is something that is made possible with Kornot-coin. And that's one use case.

And I guess the crowdfunding also, I think MasterCoin has showed that it's something that people want to do and that's working. So, yeah, I think this is another thing that can work very well. I mean, we're just at the start of the trend, right? MasterCoin, Maitsev were the first sort of birds in that game. But, you know, now we're seeing like 10 different issuances on this platform, 10 issues on that. one platform and we expect hundreds of issuances until the end of the year. We're showing the capability and every new entrepreneur that sees what the 10 entrepreneurs before him suddenly wants in on the game.

Yes. And then when I think of a theory, I mean, I still remember the first time I read the first white paper by Vitalik, so I'd spent a bit of time reviewing some of the colored coins documents and I've seen his name and sort of fingerprints all over them. And then now to nowhere comes this. Well, I wasn't expecting here comes this white paper where he has a critique and then paints this vision. and the first four or five pages are really quite compelling vision of the future,

and then there's 20 pages of detail at the back that I didn't understand. And presumably you were a reader of that which motivated you to join. So what was the driving ambition that made you think this is what I'm going to spend all the time on? Because I guess you're a founder, but also there's a vision coming from Vitalik as well, I guess. Yeah, I think many people are drawn to Ethereum for a number of different reasons. for me originally it was the wanting to implement the technology to see if it could work and learn a bit more about the blockchain

but I think the one sort of overriding vision and basic idea is to bring a notion of fairness, honesty and transparency to throughout society, throughout the world so in the same way that Bitcoin kind of touches on that in terms of finance, where we can start to understand how society spends its money, how money flows through society. With Ethereum, it's in a more general sense, how people interact, how people agree what arrangements are made between people, how society

interacts with itself. And we want to take the fairness and the honesty and the transparency that Bitcoin brings to currency and just put that to the entirety of the dealings within society. fairness, honesty, transparency. I'll write that one down. That's a vision to back. Vision to back. It's going to something that I've seen this common to all three and I bring Ron in because I know you, you're sitting on your blog a few days ago, is the sense I get is it's taken all the projects in this decentralized application space longer to get to where they're going than they expected at first. So you look at the colored coin's papers, it's taken a long time to find a way to send Bitcoins through the network that retain

their colour. And similarly with the various iterations of Ethereum, but we're getting there. Sounds like, obviously, a MasterCoin is up and running, but even there, you've gone down several lines, you've started, you've stopped again. And then now it seems that there's a spin-out project, or there's the wallet I saw on your blog earlier this week. So what, tell me a bit about that, what you've announced there. Yeah. So on which one that you've addressed? So primarily on the wallet, because it sounds like you almost ended up with something that wasn't part of the original vision, so you've now spun out. But I didn't quite understand whether that was part of the plan to start with or what. So maybe explain to people what it is you've announced, and then the word came from.

We have the base or the primary wallet to use for Mastercoin is Omni Wallet. We'll build that as a web wallet from the ground up to really support Bitcoin, Mastercoin transaction, CrowdServe, all this cool functionality. but since we're designing the wallet from day one thinking there's going to be tens or hundreds of currencies issued on that now we want to take it to the next level and really be home to all different currencies out there not just master-con currencies. There's literally hundreds of outcoins these days.

There are other protocols, counterparty, Ethereum, counter-party ripple all of these coins. And we feel it's a bit redundant or even silly. that users, consumers have to use 5, 10, 20 different wallets to store their coins. So we want to take Omni Wallet to branch out and not just be about MasterCoin, but to build it as a for-profit company. We're actually looking for the CEO to lead that company right now and solidify. We have the technical team.

We're focusing on the Master Protocol, or the MasterCoin. We just want somebody to come and bring that and take it to the next level. And that's intended to be a consumer wallet, so an average person would use this? Yeah, it's like the blockchain or the info or the coin base of outcoins and app coins. All right. Okay. I've got one last question, but in the last three minutes, anybody with a burning question, I've got two.

So let's go to you and then we'll go to the going yellow at the end. So when you talk about being in exchange or a place where people could buy old coins and other assets, you also spoke about being independent of third parties. How can those two things happen? Independent of third parties? Yes, you were talking about it. So you were talking about the fact that you would be able to buy it. You'd be able with alt coins or colored coins or master coins represent other assets.

But those assets, they have to represent real assets, right? So they have to be issued by somebody, somebody who has an identity and is an individual. Exactly. So there has to be a third party that has to be established and to work with, right? So maybe I can take that. So we're saying, it's an evolutionary process, right? We're seeing the first steps in terms of real coin backing, you know, with US dollars or other companies issuing coins back by gold, by land. This is the first evolution of that. But the grander vision has all. always been to also allow completely trustless mechanisms to do that. And we have, we have ideas on that for a long time. We're just, you know, developing them sequentially. But the idea is

basically to take two parties. You know, I want to buy some Google shares. You want to sell or to short some Google shares. And we can enter into a financial contract without any, any one of us actually owning the shares. And the protocol ensures that, you know, if the shares move, then you're liquidated or I'm liquidated accordingly. So it's definitely on the roadmap. Okay, thanks. I suppose we'll probably spend another 10 minutes on that one. And really quickly there's a question in yellow at the end in the last two minutes.

Hi, I'm Emmanuel from Pianova. I have a question regarding the app coin. So there's a lot of assumptions being made on infrastructure. I draw the same similarities to what we have in video streaming in America, where people now want to start charging for types of traffic. So what do you guys have in mind in terms of working with, miners or other companies in the future to ensure that that infrastructure is not pulled from under your feed? Yeah, so Peter Torg has actually done a lot of work on that.

You know, it's something that's, it's already on our minds. It's not a burning issue right now, but I know that some miners, you know, there's political issues. Some miners don't like these different types of transactions, some slow them down, some flat out just banned them. The whole point here is to really take the protocol and evolve it in a way that's obfuscating everything that's going on. So you would essentially have to run a full master coin node in order to know that these are master coin transactions. So this is more research, long-term work that's being done. But you are dependent on the miners accepting your transactions and not, so either being neutral or not charging you unnecessarily high fees.

Maybe you just get a plus word to flow. Yeah, so, you know, Bitcoin is kind of sold as a, decentralized system that's fair and you know very open and transparent but doing something like rejecting some transactions the miners rejecting some transactions is it's a bit like censorship so ideally that transaction should be equal and every transaction as long as they pay enough fees should be able to be included in the blockchain that that's my opinion by I know some core developers on the query with that but but it is a risk that you just have to deal with I guess

Yes. Okay, right. It's time. So it's freedom, honesty, transparency. I'll remember that one. Thank you, everyone. Thank you to the panel. Thanks so much for listening to our coverage of Coin Summit.

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