Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Tom Ding: Koinify – Decentralized Autonomous Organizations & Corporations

Episode Date: September 29, 2014

Tom Ding is the CEO and Founder of Koinify, a platform for funding decentralized applications. Think of Koinify as a sort of Angel List to bootstrap and fund a new decentralized economy, specifically decentralized applications. With his company, Tom hopes to help build the decentralized app which help push this technology to the mainstream. With his extensive knowledge of this space, we talked about the future of DACs and DAPPs and discussed some of the challenges these new models are facing, from profitability to the obvious legal aspects. This episode was recorded over a live Google Hangout. It was our first attempt at doing a live video show and unfortunately we didn’t get the recording right. Our apologies for the bad sound quality, we’ll get the next one right. Episode links: Koinify 2020: A Call for DApps and DAOs This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/042

Hello, welcome to Epistenter Paypoint. The show which talks about the technologies, projects, and startups driving decentralization and the global cryptocurrency revolution. My name is Sibbisankuju. And I'm Brian Parmen and Crane. Today, our guest is Tom Ding. He's the CEO of Coinify. Coinify is a funding platform for decentralized applications.

And previously, he was a senior manager at eBay. Before that, he worked at Alibaba and did his own startup as well. Hello, everyone. Welcome, Tom. Thanks. Hi, Tom. Thanks for being on. So for those of you listening to us right now and not watching, this is actually our first live Google Hangout.

We're recording live on Hangout now. We don't have any viewers. We have one viewer apparently in person watching. So this is something that we've been wanting to do for a little while and we're trying it up for the first time tonight with Tom. So we will most likely continue doing this. We're trying it out tonight, see how it works and so far so good. I think people can still hear us. Just a sort of a topic, I guess. Do you guys know how you can not make this video disappear when you look at other, is there some way to like overlay the video? What do you know?

It's fine, it's fine. I think it will take care of itself. The video of the person speaking is what shows up in priority. Yeah, so I'm really excited about today's episode and I contacted Tom after reading about his funding round and then we can come back to that later. But it's a topic that we've come to many times, sort of from a different angle. talked about decentralized applications many times you know whether it's a Ethereum we've had on several episodes on that and also crowdfunding we've had quite a few episodes on so we've had one with Mike Hearn we've had one with swarm I think we've

had some more no and we've also thought a lot about the legal implications of that so it's really interesting to get kind of talk about another project in the same area and it's what I was especially impressed was that you've raised money as well from kind of traditional venture capitalists and it seems such a controversial area as well that I thought that was quite interesting but perhaps to get started can you give us a bit of an overview of what KUNIFI is sure so QINIFI in like a very simple way to put it it would be an angel list or the fueling and funding platform to kind of bootstrap and fund the new decentralized economy

And decentralized economy, you know, including things like decentralized applications, essential autonomous corporations, some organization, et cetera. We're mostly focused on decentralized applications. But we're trying to be the platform and kind of the champion to kind of boostrap this new economy. But we're really excited about. So specifically, you're talking that people would develop their applications on your platform or they would take existing applications and use your platform as a way to raise more money for development?

Yeah, so I think we're trying to achieve two fundamental goals. One is trying to get people who are not in the decentralized world, kind of excited. There are a lot of great talent developers, however, not enough people get involved in the decentralized space yet. They haven't started spending enough time looking into what can be viewed in a decentralized way. I think we're kind of where we are at probably back in 2007 when iOS just gets started. everybody would excited but not enough developers actually you know look into it and you appreciate the potential of the kind of the mobile and the similar i would say for decent account today that's one of our main job get more decentralized apps high quality apps

and help them view a economy that actually makes sense the second part obviously is attracting the existing daps developers already working on it and get them to on our platform the main thing we're trying to help them today is when you look at most of the funding events i think you know since last year, 2013, when MasterCoin probably did one of the first crypto sale of tokens, is there being quite a bit of interesting project going on. But by and large, most of people do it on their own, and many of them do a lot of trials and errors. So there's a lot of mistakes that I think, you know, we could help them do a lot better

and much more streamlined away, most importantly. So they can focus on their projects rather than building a crypto funding platform for their own each time some project that. And we're also trying to apply some of the really good best practices that kind of to help me to admit that and we can talk more in the next part so just briefly and maybe this is jumping ahead a little bit but I know you've chosen a counterparty as a sort of few base layer to build on top of does that mean at projects that raise money through you guys also have to build on counterparty or could

you could they also do something different and just raise the money on that platform Sure. So, I mean, we as a platform are largely, you know, philosophically platform agnostic. We did start with counterparty platform because a couple of good reasons. I think one, first of all, you look for, when you look for a platform, you look for technology being advanced. I think counterparty is definitely one of the most implemented and, you know, well-developed platform so far today. Ethereum is a little bit far away. And sorry, counterparty has some, you know, wallets, betting, potentially, you know smart contract in the future etc and then plus there's also good reputation within the

community so when you look at the other platform that's in counterparty had one of the strongest reputations and also there's some liquidity there as well a number of exchanges are having counterparty as a potential token for exchange against bdc but these are some of the criteria that we look for and counterparty i really like a team as well i think they have a very very solid team and a very long-term view of this ecosystem your question? Yeah, absolutely. No, and so I guess in the future that means you would perhaps have a project on Ethereum

once you raise money, you would also offer you services on that platform, maybe in a similar way that today a company would build an Android app and an iOS app. Yeah, we'd be happy to look into other platforms, you know, once there's a demand built into it. The other thing, you know, when some actually some of the projects actually have their own, but blockchain. So the way we use, you know, for example, counter party is most likely going to be a proxy token when they act before they actually have an actual blockchain of their own. So in that sense, it really doesn't matter that much as in which platform we'll really use. Okay. Now, could you go into some of the core components of a quantify? Sure. So we have a couple of things. I look at the whole funding cycle. One obviously is the token sale platform, which actually basically a very nice UI.

that allows you to kind of the end jewelist feel that gives you the overview of what the project is about, why is it worse backing, you know, the people behind, et cetera, et cetera. And then a very easy way to actually put your Bitcoin and potentially the amount of dollar in the future that you can directly pack the projects. So that's number one. The second part is, you know, once you buy the tokens, obviously you want a tool to manage all of your kind of portfolio of tokens and see how they are, you know, reaching their goals and et cetera. So we have a wallow component.

That's the second part. The third part is also we're trying to partner with our partners to have a number of exchanges that can have these tokens. So they have enough liquidity and market gaps. I think there will be three parts that's kind of the core component to that. Underlying that, we're also trying to view the kind of smart contract that allows the governance of these projects to happen. So when people back this project, they can have enough trust that the developers and the people being funded, are actually delivering what it promised. And that's the smart contract part of the company.

And so what are some of the tools that you'll be building in order to bring that, I mean, you mentioned a while ago, the kind of ease of use user experience aspect of all this that needs to be developed. So what are some of the tools you're bringing to the creators of these projects and people that are investing in these projects? Sure. On the, I think, I should mention two parts. One on the product side, I think we're pretty confident that we have probably one of

best most intuitive UIs, very simple, easy to use for people who are not even very well version of the crypto space. And also the format that would present them is also extremely kind of intuitive. The second part, I think, is a lot of the work that we're doing behind the scene that is not just on a product side and website, but also the way how we select really good high quality projects and also handheld them on what exactly how to view the DAF. Many developers, when they come to the scene, this is probably their first or second data they ever viewed. They did you see they might be really good in the technical side but they

may not design the app to adapt in a way that has an actual business model behind it or a very solid business model. You could have a wonderful project but still has a token economy that doesn't make sense which makes it less investable from a backer's perspective. So I think that's the other part we're trying to help them as well. So by in sort of structuring the whole economic underlying incentives to make sure that they align both from sort of an investor perspective, a founder's perspective, I guess your perspective as a platform and later it uses perspective, right? Totally. Exactly.

Of course, it's a very tricky thing to do, you know, especially because it's also something you have to get right once, right? You have to get right in the beginning because very likely you won't be able to change it later. Exactly. Exactly. And we have seen quite a bit, you know, screwlaps in this space. So we really want to help people in that area. We're not trying to be raising as much money as possible, but we're trying to establish a fair valuation of each token. Say, if this project reach X amounts of users, X amount of adoption, what is the fair value of this token?

What is a good distribution mechanism that will make it not like a scam? You know, analogy to that would be, you know, Facebook, for example, IPO. Facebook is a wonderful company in terms of revenue and profits, but the way they overpriced it at the IPO time, just make a bad investment. and actually, you know, have a really bitter feel to the investor who invests early in the Facebook IP. So I think that's how hard the thing that we're trying to help them figure out. Now, you mentioned, you just mentioned briefly some of those screwups that we've seen in this space. What are some of the things that you've learned from looking at other projects that you want to differentiate yourself from either from an ethical point of view or simply from a functional point of view?

Sure. happy to mention a few features that I think are fairly, you know, consider kind of a pioneering this place. One is the first thing that you notice is, you know, many of the projects, especially in kind of scam coins, they raise a lot of money and they're really not really delivering anything that is differentiated or based on a roadmap. So the first feature we're trying to deliver is multi-sig bitcoins. So when a Bitcoin come in, Quantify doesn't hold the Bitcoin.

Neither the developer holds a loan. So we actually want a, you know, two out of three at least. multi-sig wallet where quantify had the key, we'll sign it, developer had to cool sign it, and then potentially a third-party security company or a community representative actually called one of the keys. The developers are going to give us a promise a roadmap

that they promise the community and tell, hey, we have three different milestones. If we reach a proof of concept number one, then we would be able to get 20%. And that's all transparent and completely transparent up front to the backers. The backer would see that. Upon that point,

quantified and will sign, okay so you guys delivered what do you have promised delivered we're going to release the rest of the money the 20% of money and then the same for the next cycle that's the first thing we're trying to do the multi-sig kind of bitcoin relics so that's a you're going to get yourself in a you're putting yourself in a very contested position there i can imagine there a lot of controversies will arise around decisions like that sure absolutely i mean we definitely hear pushbacks from project developers and And I think we would rather be more selective and work with people who want to be kind of more trustworthy and in thinking more long term. Yeah, definitely.

But I think this is something that this community really, really needs is a trust and kind of a line incentive that we're trying to view on a radical transparency. The second part we're trying to do to view is the auditing. Like where does the money actually go, right? So in a traditional startup, you have board of director, you have all that to kind of monitor. monitor and third party auditors. We're also trying to bring some of the mechanics that makes sense to kind of help the developers and help the community understand where the money are they going to the right places. So that will bring a new layer of kind of transparency into it. Yeah.

And the third part is what I just mentioned about is the economic evaluation. Like one thing kind of really surprises me, astonish me, is in this community, whenever people do crowdsail, no one ever talks about. What is the crowd sale or the token actually worse? No one evaluate. People just think about, hey, I need a $10 million. You know, why don't we just raise $50 million? Let's see where he goes, right? Instead of talking about, is that a fair evaluation?

Obviously, evaluating an adaptive part. You know, I don't think it's any easier than the value startup, which is hard too. But at least we want to provide a number of scenarios. Okay, scenario number one, if this project hits one million user and get X amount of transaction per day, then this token probably is worse somewhere between $1 and $2,000, right? And we can provide a number of these scenarios and help that out. We might be one of these guys doing the analysis. We might invest, kind of invites more independence, due diligence,

or economists to be developed as well. So that I think will definitely help provide more guidance for the people who want to back each problem. Yeah, no, I totally agree with that. I mean, one project that I've been sort of following along very closely is swarm, because, you know, they gave a talk here. We've had one on the podcast, you know, I know those guys. And I think they've done a great job in some ways. But one thing that I find kind of striking is that it was never very clear like how exactly is like how many coins would be created, what that distribution.

It was just like we want to raise that money now. And then later they came around and it's like, oh, you know, actually works like that. And there was, there's really a complete lack of understanding, I think, of what people were doing. It's sort of like in a South Park, you know, one of the episodes, right? It's crowd sale, step number one, step three profits, right? No one talks about imagery. So I saw somewhere I was mentioned. I'm not sure where I got that quote, but I saw you mentioning somewhere,

kind of the contrast between, you know, traditional sort of funding versus this type of funding. And that, you know, one advantage is removing the truck. I guess that's kind of what you alluded to as well, if the possibility audit to release fund gradually. Do you think we will see kind of broadly move startup funding in that direction? So first of all, I think what we're trying to do, we're not doing equity funding, right? We're trying to fund decentralized applications. Now, the interesting thing is decentralized application kind of blur the line between an application and a startup or a corporation.

in general. Some of the applications are so powerful by themselves, when they combine with a peer-to-peer user model, or you can consider them hiring these employees, like in minors at the Bitcoin cents, they essentially replace a traditional large corporation like Bitcoin replacing Visa to some extent. So I think there's some blurred line there. So I wouldn't necessarily think that funding, you know, B-Sense application will replace all startups.

In my view, I think there will be two general directions. One is you would see a number of corporations, especially the commoditized, slow innovation ones, are going to be replaced or obsolete by the essential applications. On the other hand, you will continue to see a lot of very exciting, you know, robotics, really printed. These kind of start will continue to innovate, and that will primarily be a human-driven organization. It will not be replaced by lines or coal. I don't think any soon. But these companies could definitely benefit from a lot of the improvement in smart contract technology.

such that when they structure a company, they could, you know, much more easier to fundraise, and they could have a more distributed team. And the smart country will help them to govern that team. That's kind of where I see the two different direction. And we obviously have more focused on the first, you know, camp, but I definitely see the technology benefit on the second camp. So then what are some of those types of companies that you mentioned that will become obsolete through the development of decentralized applications and decentralized autonomous corporations?

and so what are some of the obvious new applications that can benefit from that? Sure. Great question. So right now, obviously, we're trying to look at a case-by-case basis. But the pattern that we kind of observed a little bit is a few things. Number one is commoditization. So when you look at companies, there are all companies who have a very high innovation rate. They keep evolving their business model.

They keep updating the product. And there are the other companies who are like 100 years old or not quite innovating. And you have a very complicated management structure. So I think these companies, a couple of examples like insurance, retail banking, you know, all these kind of companies are not really doing tons of business innovations. And the thing that happened with these companies is that you end up, you know, I had quite a bit of experience working with corporate. So my general observation is sometimes people justify their job like creating something to do. So you will always find something to do for the CEO, for the CFO, for CXO.

But the manager overhead doesn't really create a ton of value. These kind of company, I think, are perfect targets for being disrupted. That's one, I think, they managed to look at it. So we're talking about insurance, we're talking about banking, we're talking about remittance, we're talking about a whole slew of sectors that can be completely disrupted. Absolutely. Or just easier. Any industry that is more than 50 years old, 100 years old.

These companies, you know, limited innovation, incremental innovations, and we can very easily be replaced by employees in effect. Number two criteria is verifiable. So I think it's important that right now, the crypto technology is still largely limited to things that can easily cryptographically verifiable. You know, mining is a perfect example. It's the most verifiable thing. You can easily evaluate, is that a good job, is that a bad job? Obviously, you can introduce some of the third-party evaluators, like an insurance example. we most likely will have to introduce some humans to evaluate whether some in that accident really happening or that acclaimed.

But the more complexity in the evaluation parts, the harder, I think, to decentralize them. So I think that's one of the limitations or the criteria that you look for. That's why I think when people all started a decentralized application with the computing resources, storage, computing power, network, bandwidth, all of them are very easily quantifiable and verifiable. So I think the other, the second criteria would look through. The third criteria, and by the way, in that these two criteria, I think one interesting, big category, broad category of things that can be centralized, is information commodity. Anything that is related to information commodity middlemen like Craigs, no forums, all of these websites primarily just being an intermediate layer between buyer and seller or between multiple parties are fairly easy and simple business model. And most many of that I would say have a good chance of being decentralized.

Or at least it would have some strong competitors in the decentralized world competing with them. I agree, but I think that one of the components within that, so you mentioned information. So say we have a model where we can decentralize forms, for instance, I think one of the sort of components that perhaps we haven't figured out yet, and maybe it's just yet to be developed, is what is the platform? So now we have the internet that's reliant on centralized servers and such. Does that platform move into some sort of a protocol that has an app which pulls that information and displace it? There's still that user interface, I guess, component and delivery method that really hasn't quite been, I think, explored very much yet.

So you were talking about a limitation of having to have a desktop client in order to be complete? Yes, because we talk about decentralized applications, but still the internet and websites, for instance, still rely on centralized servers. So where does that delivery mechanism come from? Sure, sure. That's a great question. My personal view is obviously, I think, you know, since like Mane Safe and Ethereum and trying to decentralize the whole internet, that will make the whole decently a lot easier. But when you look at a challenge, I mean, decentralized internet with 25 years of infrastructure and that's a big challenge. That's a big challenge. That's a very challenge. That's a very centralize internet with 25 years of infrastructure. Sure. That's a big challenge. Sure. I think that decentralization is really a long spectrum. You know, from the current model of like mostly highly centralized all the way to completely peer-to-peer, node-based decentralization, I think there's quite a bit of area in between. You know, you could start with something, for example, counterparty itself is run on a, you know,

a number of federated notes, right? So I don't know necessarily that we have to go all the other extreme to claim victory. I think, you know, something in between could be good enough for now. You could have multiple people who are hosting their own web servers running a different copy of, you know, whatever thing that can be decentralized. So that's kind of my view. But obviously, the ultimate's kind of whole real is to completely decentralize. Decentralize all the things. Yeah.

But I don't necessarily, by the way, my other thoughts, you know, thinking from a different perspective is I don't necessarily think that these, everything kind of makes economic sense or efficiently. sense to the essential driver. I think there's a large category of that, and we're just a tiny fraction of that yet, but it doesn't necessarily mean everything still need to be decentralized. Okay. So there's one issue I've been thinking about quite a lot, quite a few times when talking about these topics over the past months, six months or so. And I know, I think it's something you've also mentioned in a blog post you've written.

And that's the whole question of like where do the profits go in this model? Because it seems today as startups that are successful, they tend to be, they tend to try to build monopolies, right? So if we look at Google or Apple or Facebook or LinkedIn or Airbnb, they all try to build like a strong monopoly strong lock-in effect, a strong brand so that they can charge a premium. Now, it seems there is, I don't, where is the place for that in a decentralized world? Yeah, I think it's a super important for a DAC.

Well, there are, I think, a different category of DACs. There are some DACs that you can potentially treat them as a public utility, like a gas company, a water company, you know. These kind of a company doesn't necessarily have to get huge profits. All you need is essentially the base capital to compensate the people who initially develop it. And over time, it may or may not need tons of money. maintenance or development costs. Then you have the category of the essential application

which actually does require a fairly significant continuous maintenance. With these projects, I think like the BitShears model, personally I think that's maybe a good example. You actually take a transaction fee out of every transaction you made. We burn them, which is essentially equivalent to pay in dividends to all the kind of those shareholders or coin holders. I think there's some good example out there. So can you explain why does it,

adapt, decentralized application model, why do you need to have recurring profits in that case? Yeah, so it depends, right? What's the kind of public utility thing? Sure. I mean, there are also other decks that may not even decided not to take any profits, because, you know, someone could have maybe coded the apps on their free time and they're happy not to take into profits. You don't need a huge team for ongoing maintenance development. I think that's totally fun if you want to make it.

make a profit-free. So basically, essentially become the public utility in a broad sense, in a software sense. Then you had a type of project that does need, like Ethereum, it's a really good example, right? It's a very ambitious project. It needs many years of multi-developments, basic developments. So I think kind of makes sense that you would need to build into some mechanism to either raise fund such that these tokens actually had economic value, or you build into the fuel system, such that every transaction when executed takes a certain percent of profits and then that will benefit back to the people are holding the type ones but I think it really depends on the cases and do you think in the case

of Ethereum I guess one issue that comes up a lot but I think it's it's a applicable very general in these cases is you know you could just fork the projects cut out the money supply and and you know in that case if it's an open source project this there's really nothing they can do it seems the only protection against that is the sort of network effects right because they're the first ones, the biggest ones, and maybe that protects them. Do you think that is the general dynamic of how it's going to play out so that basically the only thing protecting those decentralized applications are going to be network effects? And I guess in cases where those don't exist, you won't be able to run these kind of models.

I think it will primarily be a combination of network effects you mentioned, plus the team itself, right? Because people ultimately look at this project and see how likely Ethereum is going to be. going to deliver what they promise or how exciting will be in the next two or three years. Consider that whether it works while investment either into this ecosystem, if I'm doing an application on top of Ethereum, or if I'm investing into the Ethereum techons, I think of a combination of these two factors. And I don't see that fundamentally being different from the startup world,

especially, you know, I think ultimately, you know, competing for capital. Like Ethereum guys raised, you know, $50 million. That's a good first trap. You can't, you know, have another project easily raised that amount. amount of capital to dedicate to that development, right? It's hard to replicate that kind of capital. So. Sure.

So perhaps moving on to the types of projects that, as you see developing on Quineify, are there any projects that are under development already today on your platform? Yes. So we're talking obviously to a number of gaps. We can't talk too much about it yet right now, but you should see that pretty soon. And we're definitely looking for more interesting kind of gaps in this space.

We're also trying to do a lot of evangelization work. We help more developers to get into this space, including potential running our own kind of a DAC university program, that actually is starting to have a courses of kind of educating talent developers, how can you decentralize the projects. We're thinking from a different perspective. You know, one challenge I think with the DAC is it's not like just learn a new language objective C or Swift and you start a program the next day.

I think educating DAC really required a shift in thinking that what? Can I not, you know, you have to stop thinking about viewing that application as a company, you know, as a profit center, but instead, you know, moving towards a very consensualist model, which might be required in token economy. So you guys aren't life-ed, right? We're not. So, but we will be pretty soon, hopefully, we would offer us projects. Do you know the launch rate already or what's your timeline? It's about roughly, I would say, a month from now.

Okay. Okay, great. Yes. And so perhaps we could touch on the legality of this, because it has been brought up a few times on this show and off air as well. The legality of issuing equity in the form of decentralized tokens. What's your strategy regarding the legality of these crowds? Sure. So, you know, we have always been trying to be extremely transparent and very professional in the way that we do that. So we spent tons of time, you know, working with top law firm in the space. Actually, you know, a significant part of our cost, you know, on the legal cost. I think my personal view on this is I think we try to focus on these applications. We don't want to touch anything that it to do with equity, however you want to call it. I think, you know, we would rather see, you know,

jobs act and these coming. And some, and Angeles and the traditional companies, I think are better at doing that. I think the power of Bitcoin blotching would it really enable is the DAC. I think that's much more excited. So I'm not too worried about the legality of that in that sense.

But where do you think? But where do you think this is going to go? Because, I mean, this year we've seen quite a few regulatory bodies in North America and in Europe start addressing the topic of Bitcoin regulation from the monetary side, from the currency side. Right.

And I think we can all expect that within the next year or so, those same regulatory bodies and governments are going to start tackling crypto equity and the sale of securities. Do you fear that your model may be subject to the type of harsh regulation that we've seen proposed, and for instance, the BIT license proposal in New York and others that we've in that traffic poses for? Yeah, I mean, the current most of the discussion on a regulatory side is primarily about, you know, money transmission.

And I don't think that's primarily an issue for us, given we're primarily talking about a token. And then my view, have on the token, the nature of the token has always been, it's first and foremost, it's a software token. It's a software license that you're selling. However, what you haven't deal with before, I think the greater comes with the fact that

if you look at Kickstarter, Tons of project on Kickstarter, no one had a real question about Kickstarter. Primarily because Kickstarter's products on Kickstarter is a depreciated assets. Now you're talking about a software token that may potentially appreciate value or depreciate value, but I think that's a large of gray area. But in terms of this nature, we still believe it's primary software token. And this is something that our law firm are pretty comfortable with as well. So I'm not too worried about that.

So I guess is this kind of a similar? position to the one that Ethereum took in the product. Yes. I mean, I think it's great that this worked out with Ethereum that way. I'm just really curious in how many countries and how many places they would have been able to get this through. You know, because I think it's at least sort of open transportation, is it either really a product or is it more like a security? Now, of course, it has characteristics of both. And in terms of tax regulation perspective, of course, for Ethereum, it's much better if it's a product,

because then they can do a lot of things. But I personally have quite some doubts that this will really be replicable in many instances. And I could very much see that especially once these tokens become traded on exchanges, that then perhaps in the future people will say, well, perhaps this is more like a security. Do you see that nature too or did you? I see a little bit differently. I mean, the fact that you can trade them easily

just mean that you have a more liquid market. The fact that you can trade any electronics gadgets on Craigs doesn't make them any more like security. So I don't see, or you can trade your licensed copy. of Windows or Mac, you know, on Craiglas doesn't really make them the security. You know, I think the fact that security is primarily tied to the ownership in a corporation, and they're not even a corporation per se in the decentralized application world. Yeah.

So I just don't see that being as far as Sean. So something that when I was kind of reading about Coignified beforehand, it struck me, you know, for what was quite interesting. So you co-founder was the CEO of Blue Seat before, correct? Correct. Yep. Yep. So blue seats for those who don't know, and then you can correct me if I'm wrong, but the project is basically to put a ship, or sort of a ship island in front of Silicon Valley where people could live on, build startups on, and that would be an international border, so not subject to US jurisdiction. So I guess from a regulatory perspective, you could do a lot more things, and also you wouldn't have to get US visa.

So it's kind of a very libertarian project. It got a lot of stir. I don't know if it's going anywhere or not. But I think it's quite interesting also from the perspective of Coinify, you know, because it seems to me, and perhaps you're right, and this is not going to be the case, but it seems to be likely that many of these innovations will be pushed abroad and people will have to perhaps go to places like that

to do controversial projects in this decentralized space. So, I thought it was an interesting connection and, you know, I guess, I'm glad you picked up this connection because I think the fact that Darryo and I were very philosophically connected a line is the fact that we're really using different technologies to solve really the same similar problems. You know, Dario was, Lucy was all about building a ship

that enabled innovation more freely, a permissionless innovation. I think what HONIFI trying to do is building using crypto technology instead of physical, the atom technology, to view something that allow people to more freely innovate, a place where you know more freely competing. So yeah, I think it's very similar line bills, less opportunity. And of course it may actually be that in the end you will need both to make it happen, knowing that you actually need to put the physical offices to those places like that to Hopefully we won't get through that space.

I hope the regulators won't build that extreme. But yeah, I think an interesting connection there. I think as the saying goes, we should just go to the moon. Yeah. We've been saying it all along. We just need to go to the moon and nobody will bother us up there. So where's that project? Is that project still being developed or is it going to have fallen through?

You mean quantifying of the platform? No, Blue Seed. Blue Seed. Oh, the Blue Seed, okay. Yeah, so I think the Blue Seed was having some funding challenges. It was a wonderful, very exciting project, but I think it had some major funding challenges. The initial amount of funding is pretty significant. Yeah.

Yeah, it's an expensive ship to build. Yes. Absolutely. That's something, you know, the easier. about software, so much easier. But you don't need that kind of a large community. You can do like a minimum viable product for a ship unfortunately.

The minimum is, you know, $30-40 million. Yeah. So talking about fundraising, can you talk a bit about through your experiences, you know, as an entrepreneur, raising money for a project like that, that I think is very much sort of at, I guess at the edge of what people are doing in this space? Sure.

Absolutely. I mean, this is just like our second round of funding, one million dollar, you know, from IDGZ Park, you know, Brocks and his end of the syndicates and another Chinese fund. So I think the majority kind of my takeaway is people are really excited. And that's something I'm really happy about. But I did spend a lot of time actually educating, you know, these investors about what is that, you know, why is exciting? Why do people need this kind of platform and what kind of innovation does it bring? And I am really glad that these investors are super supportive. Brock obviously has been an early investor in a number of that projects already. So I think that definitely helps.

And the IDG has also been an early investor in Coinbase. They definitely have this knowledge base of what this whole kind of crypto ecosystem is about. The other kind of validation that I'm kind of excited about is, currently when you look at most of the project at the big crowd sale, They're primarily about selling to crypto enthusiasts who had a belief in this system. But I think over time, we will see a shift or balance towards a combination of individual kind of backers who like the projects and kind of the hobbyists, but also these kind of more institutional or traditional venture investors in these crypto assets.

And I think that's a really important development that kind of enlarged the ecosystem. In a Bitcoin overall, it's only about $7 or $8 billion ecosystem. And when you talk about active capital, it's probably more $2 billion. And, you know, Ethereum by itself already attracted a $50 million. I don't know how many more active that capital can have the interest appetite for these in-year projects. So it's important that we kind of get more deep, connecting, bridging the older world, the legacy world, and the football system. What you just mentioned there is interesting because these technologies really enable for that type of crypto investor profile to emerge. investing in companies so far has been, you know, quite, it's not as easy.

Who do you think this crypto, you know, who's your typical crypto investor? Is it somebody who's invested in tech or could it be like just about anybody? I think that we're kind of opening the doors to a whole bunch of investment from people have nothing to do with with with, with, with, with cryptocurrency companies or tech companies. where just about anybody could just walk in and start investing in any time in business. So what are your thoughts on that? Sure. I think, yeah, so I think it would be a fairly different scene or profile mix of the investor group.

Traditionally, startup, you know, you have different stage of funds. We have seed investor, ABC rounds, you know, based on their fund size. Now I think you will see probably a mixture, and hopefully a mixture, a healthy mixture, those individual kind of backers who are either excited about a project, technology himself or it could be people who you know potentially looking for some kind of return or want that project to happen and then you also have a people who are playing kind of the lead investor role as an institution who is either doing it as a chic investment or you know looking forward for certain returns so i think you will probably see healthy balance of those

and that's what we're trying to bring as well as i've got it we added yeah we've touched on this topic uh too before we have a few people uh I know with Pomey, Galambi and also with Bostion, I touched on that. And that's the sort of limitations, I think, that venture capitalists have in general. Correct me if I'm wrong, but from my understanding, most venture capitalists wouldn't actually be allowed to buy some kind of crypto share assets or something like that. So do you think we will see funds? in the near future, I guess raising and perhaps new funds with different terms, if they're limited partners that would actually allow them to do this kind of activity?

Yeah, sure. So yeah, so we definitely know, you know, notice that certain funds, actually most of the, I think traditional venture funds has a limited partner agreements that, you know, doesn't allow them to invest in non-acquity assets. And I think in this stage, you know, DAPS would definitely not be considered as equity. So yes, and that's one of the problem that we're actually working. There are a couple, I think, one or two funds, at least. These in DAPS fund itself by David Johnson, I think they are actually a fund that dedicated to capital assets.

And I think you'll definitely see an emergence of more of these kind of funds happening. On the other end, there may also be a way to bridge the two world, you know, where you can potentially view certain kind of a bridge layer, bridging the traditional fund structure into this new ecosystem. That's interesting, right? So I guess you could have potentially venture capital firms investing into the equity of a startup that then buys some of those assets. Perhaps that would be a sort of circumvent way of achieving that. Yep, potentially.

I mean, if you look at ripple, I would say, you know, that part of the value of Andrewson Harvest investment in ripple is probably for the ripple of currency, right? I mean, Ripple holds a large amount of XRP. So you're absolutely right on that. Perhaps you could take these last few minutes of the show to just kind of, you know, think about the future. I like to think about this kind of singularity stuff. And you wrote this blog post on the Cornerfly blog, 2020, a call for DAPS and DAOs. Could you just briefly summarize the article and then maybe after we could kind of start thinking kind of pie in the sky stuff and where this is kind of all going in the future?

Sure, absolutely. I mean, this article is partially inspired by Wycom and A. There's recent article a request for startups, right? So they listed a number of exciting spaces that they would like to see to apply to YC, you know, anywhere from energy, financial services, re-acconstruction, etc. I think that's the kind of thing, you know, in crypto space, I don't think we have a lack of technology. That's a part of thing people work very hard on.

But we have a really a lack of good use cases. And that's something we're trying to help out with community and also seeking feedback from the community. What are the legitimate use cases that we would like to see? So the 2020 kind of thought experiment is, you know, five years from now, not too far away, is, you know, if you have a peek into the future, what kind of decentralized the application that you think will become part of our life, but you don't have it today? So let's start from there. So the first part, I was trying to list out a number criteria. I'll recover some of them. What is the guideline? What are the guiding principles, the thing that actually makes sense

to be decentralized such that there will be more economically efficient, such that there will be less, you know, monopoly, etc. So there's a couple of things, commoditization, you know, low profit, et cetera. The second part actually started with a list of things that we have observed or people we have talked to that kind of give us feedback, a couple of areas, anywhere from financial systems to kind of storage of private data, you know, for example, your smartphone contact and these kind of stuff. And then you have these information commodity to marketplaces. So a number of area that we are trying to fund legitimate use cases for it. So what's the one you're most excited about? To be very honest with you, I think all of these are one are pretty exciting. But I haven't found really the kind of killer use cases that people would call it yet.

So I'd love to hear feedback from this audience or anyone who's interested to talk more. And we're very excited to help you fund that in a design that right gap for it. It seems like one of those use cases that has gotten a lot of projects in the areas to sort of decentralized file storage. Yeah, exactly. Why do you think that is? Well, I think the fact that I think it met one of the two or three criteria that I mentioned about. It's commoditized to some extent. I mean, hard drive space is super commoditized.

Number two, you have, it's super verifiable. Every, you know, gigabytes of space, you know, you can verify very easily whether someone retrieve that, provide the space, and able to retrieve a file from it. And also, it also potentially, you know, approaches, I think, kind of the Airbnb model. When you actually look at interestingly, so when you look at economically, the economics of a B-Sangler space

may or may not, be actually more expensive than a centralized server farm, right? But when you buy, you have a large economy scale. But the good thing about that, the other way to think about that, you know, it's an Airbnb model, that you're actually, you know, reusing, utilizing the existing spaces that are wasted anyway. So I think there are a number of criteria that it hits and kind of excited about people. But and along that line, you could have storage, you have computing power, which you could do a number of things within it, like Swedish rendering or super computing, or like big data, you know, Hadoop jobs, a number of things that you could do a lot of that.

And these are the things that are expect to see very, very, very, soon within this year or next year, it kind of gets started. And then you move on to things that are kind of less photographically verifiable, you know, potentially like transportation, Uvers and these kind of stuff that are less verifiable or insurances and more complicated too. But it will take a while, I think. Yeah, absolutely. I think we're sort of at the very beginning of a very long journey.

Yeah, absolutely. One actually, I would probably name one, my favorite, I'm on this list at least. I think it's a decentralized health insurance. I mean, which day we already have betting system, simple betting system on counterparty. And insurance is essentially a probability game as well. It's a much more complicated, obviously. You have risk profiling kind of things. But I think it's kind of thing that gets really good disrupt the current insurance system, especially in the U.S.,

the medical health care bills are just enormous and just doesn't limit a lot of sense. for someone who's not doing tons of good job to take a huge profit out of the insurance insurance. All the insurance company doing is pulling money in and then redistributing these money back to you. And they take a huge cutout out of it. I just don't think that kind of thing is necessary in a long time. So perhaps a very brief thing, can you explain how do you think a decentralized health insurance would do a better job at that? It seems like I have a difficulty's picturing that, to be honest. Sure.

It's just what it would look like. Sure. I haven't been very deep thought into it, but frequently, you know, you could basically, the first thing you started with adaptive, look at what are the roles? And when you look at insurance, it's primarily people who are providing the capital, or also the same one being actually insured. So you have the payout process, which says, you know, there are number of events. that we're going to pay you out.

And then you have the people who are actually doing the kind of evaluation of what is their risk profile at this certain use case, of this certain events, an earthquake insurance, for example, or a healthcare insurance, which says, based on your health care profile health history, what is the probability of that? And then when you connect that, for example, to something like 23 and me, a DNA database, which says, indicates what's your probability of having that disease, and therefore your insurance It's bringing in X, right? So now you start having a pool of funds.

You have a probability database, and then all your people do in it in a very simplistic way is people putting in Bitcoin. And therefore, when you build a large enough, you may have a critical mass, a pool, such that your risk is significantly diversified. Once you reach that point, you know, your deck probably could tend to start running. And once certain events happens, there could be a evaluator, a claim agents, but actually, you know, independence, a combination of claim agents in the network would evaluate, is that a real event, what exactly happens, what should be the payout beat, and then redistribute the refunds. Cool.

But it's an interesting thought experience. Yeah, absolutely. I'm sure it's the sort of thing that is really interesting and really, really hard to do. And of course, it gets into another area where you'll be battling with an insane amount of regulatory yeah oh yeah oh yeah definitely but that's why it's citing but if you want if you want to maximize your uh you sort of uh confrontational encounters with the regulators then and this is the area to go because you won't oh you won't only have like money transmission and yes some license of security but also health insurance we're going to fight you five

regulation bodies at the same time. Yeah. Speaking of it, are you incorporating only in the US or you have offices elsewhere? So far we're only in the US, but we are looking into offshore. Okay. Cool. Is there something else you want to cover before we end the show? I think that's a really good conversation.

You know, we are super excited about kind of bringing this new layer of radical transparency and kind of the kind of some of the professionalism into the space and trust, I guess, mostly. I think this, you know, crypto space is a very exciting space. But unfortunately the last few years, I think we have significant amount of trust debt, I would say, that kind of accumulated for a while. It seems a lot of things, good thing they're just not being done in a very professional, transparent layer.

So we're trying to view that transparency. And we're trying to have a really good user experience, fantastic user experience. And also bringing in the liquidity and capital. capital for a little bit from the legacy world into the system. So we're hopefully really trying to kind of ignite this new economy of centralized patients. And if people want to exactly learn about quantified. So I'm sorry, everybody may add, you know, one more thing.

Sure. I think one of the really exciting future where we're kind of really passionate about is imagine, you know, 20, 30 years from now, or even shorter time, 15 years from now, that people will no longer treat a full-time job as something that you are supposed to be. you are supposed to be doing. Today, almost everyone expected to have some kind of full-time job. But in the future, you could be just freely associated with a number of decks. You know, in the morning, you might be working, driving a few hours for a decentralized group. You know, in the afternoon, you could be coding for a while contributing to an Aetherian project.

And you get paid based on smart contracts. You could, you know, all of us, I think, as humans are usually gifted with a number of ways. And we have number of interests. And having a full-time job and not necessarily the best manifestation of that kind of talent and interest. And DAC, I think, as by its nature, is free association. You enter into the system as a minor, you can freely leave any time. You compete based on your skill sets and your outputs. I think that's kind of thing that I felt like DAC.

A lot of people would say, hey, does DAC kill a lot of jobs? I don't think so. I think DAC kills the inefficiency in the system and move people and track people towards a more efficient and exciting jobs. And the thing that they're really passionate about. I think that's kind of the things that make me excited about that. It's not a zero-sum game. Well said. Indeed, yes.

It is crazy to think about this kind of world, right? Where you just sort of freely work a bit here and get paid by some sort of non-identifiable, like non-located entity in the net that this gives you work, distributes the work output. It's fascinating. Yep. But yeah, so if people want to learn more about it, so first of all, important to point out,

Coinify is written with a K, because there's another coinify written with a C. Yeah. Yeah. That's K-O-I-N-I-F-Y.com. So you can sign up for the newsletter there. Perhaps that's the best way to, you know, kind of be in touch when when you actually go live and people can try it out.

Also, also on Twitter, you're at Coinify the same thing at Coinify. Yep. You know, feel free to shoot us an email at hello at Pointify.com. If you have any DAPS ideas or anything that you want to discuss about DAPS and DAPS. Cool. Well, thanks so much for joining us today. It was really great talking with you and I'm super excited to see what's going to come out of qualifying.

Sure. Thank you for having me. Great conversation with you. So thanks so much for listening. If you want to support a show, then you can do so by giving us a tip. We very much appreciate that. And you can do that at eBesenderbikkiy.com slash tips. You can also leave us an iTunes review that helps people find the show. And you know, you can let us know what we're doing well, but we can still improve.

And finally, we also send out a newsletter every Friday. and that's at Epstein Bitcoin.com slash newsletter. And I just want to say thank you to our one viewer. Our one live year. We have one live viewer right now. I'm not going to say his name, but he's in Los Angeles. So if you're listening, thank you. Thank you, yes.

Did he stay on the whole time? Well, I don't know. There was one viewer pretty much throughout the whole show. You know who you are. Yeah, so but... Yeah, this was exciting. I really like this format. And I think we should do it again sometime.

I mean, we should probably start doing it regularly. Yeah, absolutely. So if you're listening to this in a usual way, then you probably weren't aware that we're actually now doing it in video, et cetera, for the first time. So I guess keep this sort of look out on Twitter. And when we do it the next time, we'll announce beforehand that,

you know will be alive on video episode yeah and i think we also have some uh interesting content coming out soon from uh sean chones she did some produce some content for us at crypto valley conference in uh in the isle of man and also at inside bitcoin's in london so you can look forward to that so uh well thanks so much and we look forward to being back next week Bye. Bye. Bye.