Hi, my name is Nicolae Carabut. I'm a blockchain architect. I build a blockchain technology at Dispatch Labs. I'm also advising guys from The Den. And I'm a software engineer with lots of experience. >> Hi, my name is Chris Gaines, I'm a co-founder and the head of marketing and content creation at The Den. >> I am Elliot Friedman. And I am the director of blockchain program here at The Den. >> Cool. So let's hop right into it. So, the first question that I kind of wanted to cover with you guys is, we're all very familiar with Satoshi white paper. And you know how blockchain technology is really kind of coming to its own over the past few years or even earlier. So, I really want to let's talk about, why has this happened? Why is blockchain become such an interesting thing, and why are cryptocurrencies and all these new applications, why they just now exploding? What is making, what is it driving this, this to really become something that everyone's excited about? >> Yeah. >> Well, I think large industries, automotive, manufacturing, IOT companies, data companies, are starting to see the value in blockchain. So they're starting to see, there's actually real use cases for this. It's not just, an Internet currency, that just some kids use and it's just kind of on the fringes, it's now becoming a lot more mainstream and accepted. >> Cool. >> Yeah, the technology itself it's not new, meaning it was in the past kind of worked on, there was computer science behind it, and mathematics and algorithms and so on. Just, it kind of got traction right now for many reasons, one of them is that the mainstream adoption, and then gets into the buzzwords and then gets into people getting curious and start to talk about it and so on. So the cryptocurrency concept is also not new. It got propagated a lot further than before because of the the Satoshi white paper. Satoshi being she, he, a group of people. >> Them. >> [LAUGH] >> It. >> Yeah, so many people say it's a she, where you can even see like t-shirts and that's funny. Just, it can be anyone. >> And what do you think about I've always heard people talking about the fact that a The Bitcoin white paper came out very shortly after the economic crash around to like late 2000s. Right? >> Yeah >> Do you think that played into the whole situation? >> Of course and I think Satoshi whoever they were or single person, they strategically planned the release. So after we see, this whole financial system collapses because these mortgages that really are bad mortgages that are being sold and packaged up, they crash the economy. Now Satoshi comes out and says, we don't have to trust the central systems. We can just trust each other on this network. And so it was kind of like a big rebellion against the banks and against like the status quo. >> Yeah, yeah. So it sounds like, at least from what we can gather. This whole movement is kind of based on dealing with financial troubles, at least initially that people as a whole, were not able to solve for the longest amount of time. I think that makes sense. >> Well, there can be, at least by this point who can make many speculations you will never find out why. Yes, it has coincidence, like in time when it was the year, most probably because people got into it because of that problem. Not necessarily it was the reason being it just in case, So banks are in trouble, their financials are not looking good. So what is an alternative solution? This is where a fork was kind of shifted. Let's look into decentralized solutions than centralized, because in centralized you have a chain reaction if there is a bad or weak link then everything crushes, so probably this was one of the helping mechanisms to kind of properly state that these centralized solutions forward and Bitcoin kind of was on the spot. [LAUGH] >> Yeah, so I think also with all the inflation today that we see in fiat currencies, right? So, your dollars depreciate by 1 to 2% every year because more money is printed. With Bitcoins, more coins are mined every year, but there's a finite supply. So at a certain point, we reached the 21 million hard cap, and no more bitcoins will ever be mined. And so it's a scarcity built in, which means it's deflationary. So that over time the expected value goes up over time. >> Exactly, >> Yeah, so focus on innovation and solving problems that people have been dealing with for a long time. So what do you guys think the biggest challenge that blockchain is currently facing? What's holding it back, what is preventing it from really being as effective as it can be? >> So I think that, a big problem people have with blockchain and specifically crytocurrencies, is that if you're holding money, you have to hold these private keys securely. Right? And so if your systems gets hacked, and people somehow get your private keys. Your money is gone forever. So there's no good custody solutions for people with small amounts of money. And so I think that the average consumer right now is not ready to say okay, hey, I'm going to take 100% responsibility for my money and be 100% sure that my computer secure because it takes a lot of technical know how to do that. So I think that, when we have wallets that really work well for the average consumer and if they don't have to copy and paste addresses. So currently if you want to send money cryptocurrency, you have to get someone else's address to send the money to, and that's a long cumbersome string of letters and digits, and so it's easy to go miss a digit and you might even send to the wrong person and it will never be recovered. So, once we kind of solve the custody problem and the address problem, I think it will get a lot easier for the average person and it'll be more like PayPal, use it right? You just enter in their email, and you just send it right over to them. >> Well, this is another thing, gives the question of user experience. But, because on the under the light came other blockchain technologies and recently there are a lot of them and they all have problems and there's a ton of problems with them. User Experience is one of them. Yes you can solve this by using some kind of aliasing mechanism to enhance the user experience but there's a lot of technical problems, there's a lot of business problems. And there's a lot of questions about sustainability, and the integration of the authorities means playing by the rules. I'll not go into ICOs and the whole thing, so if we talk about technical problems, then it's about scalability, speed of transaction, and how to not have forks and all sorts of attacks. If we talk business by now, a lot of small to medium businesses already kind of figure it out how they can use the cryptocurrency to fund themselves and kind of make good income. But this ties into the next problem how to be legal and play by the rules, which is where the state comes in. >> Yeah. >> So there are very high level complex problems and then the deeper you go into technical side, how to satisfy the high level business requirements. Then you have scalability and technical issues, which that's why you have also different platforms. >> Yeah. >> Starting from Bitcoin and the blockchain behind and. But then you have a theory you are telling of everyone started dressing it the way they feel they should be for a specific solution. So that there is a whole range of problems from different angles. So far, because the industry is kind of new, is moving at very high speed. >> Yeah. >> Nobody has the right formula yet, but if I guess in next five years, there will be specialized solutions with blockchain at the core, because blockchain by now is more of a buzzword than actually defining the functionality for a chain, >> Yeah >> Or for a technology based on the distributed ledger or distributed systems or decentralized systems were they to talk to each other and agree on things, which is called consensus. So, there will be more and more as the enterprise is going to, joins the movement. There will be mass adoption. >> Yeah. And there will be specialized versions for different type of problematics that you can have. >> Yeah, and enterprise is one of the driving factors towards mass adoption of blockchain. >> Yeah. Because right now this is what the all the money is. >> Exactly. >> In terms of technical innovation and they have the funding. Yes you have startups but they function differently. And. They can bring a very disruptive innovative idea. But in order to be used at state level, country level or in between countries, it has to become something big. So by then it's not a startup anymore. So, part or one of the problems that comes into play especially when you are talking about decentralization and especially in a public blockchain setting like Etherium is the innocentivation of the different players in that system. So one of the other things that and one of the sister things or forms of thought that people are constantly working on in blockchain is, cryptoeconomics, right? So what do you guys, when you're describing cryptoeconomics versus traditional economics, how do you bring that up to someone? What are the differences? >> Well I think the cryptoeconomics and economics are essentially the same thing. Right, because you have supply and demand, you have people who want to make transactions, there are people who use the network, and then you have miners who secure the network. And it's a really beautiful system because the miners, they're not going to go dedicate computing power for free to the network. So we say okay, well transactions have a certain cost, a certain fee associated with them. And so you pay a fee and you send a transaction, the miner confirms your transaction and he takes your fee, and so everyone's essentially happy. >> So especially with tokens, I think that's when things really start to get interesting. >> Yeah, well, so probably this question can be split into two parts or like to some questions, because really quickly, this you can moderate this by the classical economical systems like micro economy. You have cryptoeconomics, which is defining national, wider or whatever, basically different economies in different crypto systems. What you also can have is token economics, which is going to be different than the cryptocurrency itself. And this token economics was kind of introduce the concept by the Ethereum where you can build around tokens and it will be easier to explain them as utility tokens than securities because that's getting caught up. >> Regulations. >> A hybrid type of currency. Where you play in both holes, you get regulated at the same time. You have to be big, but you can't. So, if you talk about token economics. Depends how you use them and it's up to you kind of define the model, the economical model behind it. In order therefore, the company who builds this to be profitable and at the same time adoption by the user so they can keep being interested to sell, buy the currency, the token, and so. A good word for it and often it's being used is called give me find the token, kind of have some mechanics. So, but this token economy can be applied in warfare the cryptocurrency level because when you build a company or you start the cryptocurrency. We need to know how much do we give out to investors, how much do put out for the people to buy, what will be the pricing, how to balance everything out in order to not someone take over for example, might be someone buying too much, and therefore the control and they define the rules. And then kills your minors and basically you lost the game. The same goes for the other tokens, so it's a very interesting and can be a very long discussion because the moment you will bring regulation safety, we need a couple of days just for that. But that's the concept of it, how we define the economy. This is the beautiful part of it and why it became so quickly so popular. Because people basically are able to modulate their own economies without actually being a country having their own- >> Printing their own currency. >> Yes. So this puts a lot of power and a lot of creativity and potential to create jobs, potential to create a completely new ecosystem that you would not be able to create based on the fear of money. Because they are very conservative and the speed of moving is very low. It's very slow. So by that the dynamics are very slow moving. >> So, the disruptive comes that it's digital. And you are the person or the companies that behind who is the behind the the currency is in charge to define how it's going to function. So then people believe in it, start buying it and then sell it to the exchanges. Then you have other startups buying that using it to fund themselves and build, so it's a fascinating world where you get mix of computer science, economics, mathematics,[LAUGHS] and the just pure disruptive innovation. >> I think one of the most interesting things is seeing token use cases. So you have cryptoeconomics. But then there's also economics of cryptocurrency, not cryptocurrencies, but tokens which are essentially, Assets that are built on top of the blockchain. And so You see like very clear good use cases right like Binance Coin for example. So if you hold a Binance Coin, that entitles you to some sort of fee discount or you hold a certain amount. >> Yeah. >> You get a fee discount. But there are some other things that don't really make that much sense right because. >> Plenty of things that don't make sense. >> Exactly, because it's such a new space. Everyone just says, we're doing new crypto on economic system and no one really stops and questions whether it actually makes sense, right. Because if people are just using your token as a means of exchange, and they're not incentivized the whole or to, or they don't really get anything extra out of it. It's just a new gateway that they have to use to get to some product. Then those things- >> They also can go into, what can come out of the, how you define the token itself. Is it let's say immutable hence like packet tokens, you have one and [CROSSTALK] what it is just one yeah. So the value for that token go so you know, it's being being differently being wired. So, depends if you have like normal token we're it what it matters how many of them have, or we have one token which is unique and depends, we just have one and the value for it goes up. >> Yes. >> The second one the value. So that model can have a very small building block. But the definition of the cryptocurrency itself also affects how the economics of that token is getting modeled at a higher level. So it's a lot of knobs to tweak to define kind of your game. >> Yeah. Yeah. >> You're creating, you're essentially able to create a new economy out of your mind, out of your thought process out of your specific use case and the customers and people that you're going to be interacting with. So. Yeah, that's what the biggest values of cryptoeconomics and applying things to blockchain, that people are still trying to figure out. And what is probably so many exciting new ideas. Some that are failing, some that might actually have a great chance to succeed and really positively impact a lot of people in the future. So. >> Yep. [SOUND]
