Build your own blockchain

Transcript

hello everybody and welcome to a brand new episode of our weekly Hangouts about Bitcoin blockchain money and more my co-hosts are Patrick V Zin of Bitcoin called star.com and Tim Pastor co-founder of identity identify Our Guest today is Preston burn uh CEO of s Industries we'll talk about his open source blockchain tech company and his rare passion for a lovely creature the Marmet hi Preston um welcome hey good to be here thank thank you very much for inviting me yeah so first of all tell us a bit more about your passion for marmots before before we start talking about the more serious stuff afterwards Yeah so basically um we have marmots in in Connecticut where I grew up and they're a pest and they dig holes in

your lawn um and my parents attempted when I was much younger they're like well get rid of them do something about them and I really couldn't because they're just these cute fat stupid adorable Critters and um and so when we were trying to explain quantum mechanics and quantum physics Concepts with one of my co-founders uh when when back in the day before erys was actually a thing um we were he was rather communicating to me how you would get a cubit piece of information that's quantized from A to B and basically he's like okay so imagine you're trying to give a cookie to a Marmet and the cookie is the bit and you know you're sending the information and the Marmet is the recipient um that then spun wildly out of control uh just because it was hilarious I wrote an

article featuring marmots just because it's a good way to if you're was criticizing a particular project um and so I had a lot of Marmet in it because that kind of blunts it a bit and makes it funny and not quite as harsh um and then we just kind of ran with it and it became the company's logo because it was funny and it wasn't over serious and we didn't want to be overly serious as a crypto startup um so yeah it's you know our mascot is a fat squirrel there's not much more to it than that other than we really like fat squirrels so okay well I guess if you want to engage with um with the type of companies you want to work work with you do have to be overly serious sometimes or or are your clients all fine with the whole Marmet joking around all day uh

one One Bank actually gave me a marmed cuddly toy um a couple of weeks ago so not not necessarily a client but no one B gave me a Marmet cudly toy like oh we see you really like marmots on Twitter so we we got we got one for you and it was like that is like this is the best bank ever and occasionally you'll see actually quite often on the website uh one of the links it's like you know learn more about you know tech tech tech and the bottom button is learn more about cuddley Marmet and like invariably you will see the stuffiest banks in the world which have you know very serious reputations and the sort of visitor path will go ays Industries Main and then learn more about cuddley marmots click and then they'll go to mart. org which

is a Canadian charity that that works with a an endangered species of Marmet known as the Vancouver Island Marmet so um so you see Bankers are much sweeter than people give them credits for yeah I think I think people it's a very startup thing to do like to just have something silly like that and it makes it it makes it fun and keeps us uh it keeps us down to earth like you know we're not running around going you know you world changing this that it's you know we have technology and we like squirrels so what does your company ARS do and and shoot an average Bitcoin us a care I think well they certainly should um in the sense that um I think they should I think the average Bitcoin user should care um but not how to put it so there's been

a lot of discussion as as they say much digital ink has been spilled lately of this blockchain versus Bitcoin discussion um or blockchain without Bitcoin discussion and the fact is when when when we talk about the blockchain and when Banks talk about the blockchain and when a lot of people talk about the blockchain they're not necessarily talking about a cryptocurrency what they're talking about is a distributed database that has some of the qualities of Bitcoin um that they liked which then they think could be adapted to serve a commercial purpose or some other social purpose or whatever purpose um whatever purpose they needed to serve so what we did is a couple years ago we were we were designing applications on ethereum about a year and a bit ago so the three

of us and also are two first core Debs that's Ethan and Andreas and we realize that as you increase the level of complexity in your application um the amount of things that can go wrong also increases commensurately so how do you fix that and the answer is you kind of have to take this idea of the global decentralized blockchain and then kind of pair it in a little bit and say okay well your blockchain is now going to be a distributed database but you're going to have permissions so that you can control who's interacting with it you control the kind of attack vectors that there are and you can control what permissions people have um with the decentralized chains the reason that you have a cryptocurrency attached is because the how to put it the security considerations are game theoretic it's

about people competing competing with each other with an objective outside source of expenditure and then some kind of reward which is exchangeable but in your usual database or software development paradigms people don't use databases because you know because they're printing money for them or they don't use databases because they're not under someone's control they use databases because they're a tool which they can control they or a group of other people to accomplish a very specific objective so what our view of a blockchain is is we think it's a particularly interesting type of distri Ed database um which is very good at serving as a kind of distributed infrastructure um and once you take the view that a blockchain is amable to being controlled by someone or by some

group and so this doesn't mean like you know people say well private blockchains it means you know there's going to be a giant Bank chain or us gov chain and we don't think that's quite quite correct we think it's something like a couple of uh a couple of guys rather like us at erys Industries don't want to pay GitHub for a private repo so what we do is we write GitHub or we write git on a on a blockchain distribute that blockchain around and then we have that Global utility where we're all verifiably connected to one another in a very you know in a very reliable and fall tolerant way but we're not actually paying someone else to do it we're using the substantial amount of hard drive space that we all have and processing power that we all have that we're not using in order to administer this

application and not be reliant on some other third party to do it for us so much so's let's make this more tangible so on your website you have this very cool animated video about this fictional character called sumon y who works at the land registry office in Dhaka Bangladesh H so use this example please then to illustrate how areas would work in practice and also how it would compare to let's say if Bitcoin was used in this instance and especially cover things like proof of work tokens redundancy speed permissions just sort of make this example clear while using your technology well I think sorry I'm just readjusting in my seat here I think we should start with Bitcoin actually because Bitcoin was the first and it's the one that everyone understands the best so if we let's say we just clone

Bitcoin and we create Bitcoin 2 tomorrow and we just look at it for what it is it doesn't have a network effect so we know that um it Security will be low because of Mining and things like that but let's say we then distribute It Out Among 6,000 users and just totally arbitrary data and then we say users just start using the chain assume everyone is trustworthy so they're just using it as a data transfer mechanism what you have when you don't have a currency idea attached to it is you have a distributed database where you can take out any large chunks of the network at any given time and the network will continue running more or less uninterrupted without a central server or some leader which has been elected processing those transactions so the people who are working on mining on solving the blocks

they're sitting there and they're going okay we're just honestly processing transactions that we're getting from everybody else now if you look at it that way what you've actually got is a clearing and settlement system which you have now a established at almost nil cost and we say nil cost because what you've done is you've said this is the clearing and settlement architecture for this arbitrary unit Bitcoin 2 that we've just set up and if you talk to a cryptocurrency guy they're like well why would you want that and I think the answer is because you've just taken 2,000 personal computers and you've created a clearing and settlement architecture that would normally cost tens of millions of dollars to implement um so that kind of a data infrastructure if you can control it and if you can control whose access it and what they're

doing with it can actually be very useful to a group of people who are looking to set up data interconnectivity without a central server somewhere um where they all have transparent views of how that system is supposed to work so what we did is we started with the ethereum blockchain um as our starting point because of its smart contract capabilities and what we did is we kind of started to gut it uh in the sense that if you have a blockchain which is usually hard-coded to a client we said the blockchain should be self-defining with the smart contracts themselves so if you can imagine um if you can imagine putting a bunch of controls in your Genesis block a brake pedal a you know a gas pedal a steering wheel your indicators everything that you need to

run a blockchain you can express that as scripts smart contracts which are unlocked by a particular key with a particular user who has a right to access that permission and once you have those smart contracts in the Genesis block as long as you're you defining the blockchain why not Define all kinds of other permissions as well for example when someone adds a block you can check and see all right well in this blockchain we're only going to allow nodes one through 100 to add blocks so if then node 202 decides they're going to add a block when they attempt to propagate that transaction to the network the validating nodes who are being run by whoever you know is administering this chain will not accept that block and so consensus will say no these guys are the ones who are

determining this the rest of us who are using this network follow their Lead You node 202 have attempted to at a block we don't recognize that instruction is valid because this rule book we put in the Genesis block determines everything that can happen afterwards so so let's go back to DCA Bangladesh then to to use this um this mechanism yep so if we go back to Dhaka Bangladesh um let's start with Bitcoin and work our way up with Bitcoin you've got a right permission that right permission is you can send a balance which is associated with your particular account to another key pair another address so your permission is I have a number and I can amend this database in favor of somebody somebody else by signing a transaction digital

signature and then it gets moved over to them so any unspent output I have I can assign to a new user that's just a write permission you can do the same thing and apply the same principle to something like a like button on Facebook if you wanted a you know let's say you had like you know like chain just for the sake of argument where people could like things so so in this case would be for example with Bitcoin it could be a colard coin that would represent a certain property in Bangladesh that could be transferred from address a to address B not quite I think what you have to sort of Bitcoin is a bit two-dimensional compared to Smart contracts smart contracts everything is a script so you can have multiple properties expressed in what

that script is so if you were dealing with something like a land plot what would you have you would have a a script which would represent the land plot it would show who owns the land plot I.E who is able to dispose of that piece of land to somebody else what conditions have to be satisfied before a disposal takes place for example a any leens which are associated with for example a mortgage or some other type of charge those have to be discharged first all taxes have to be paid um you know any disputes over the transfer can't be registered so you're expressing things in a much more complex way than simply just saying I'm moving a coin from A to B what you actually have is a script which contains multiple permissions for multiple different users and it lives in

a context which is the system in which it lives so so basically to to describe it how to put it it looks kind of it looks and feels like a web application and it's designed to act like a web application but what it does and what it means is in the context of the whole you know the whole context in which a system is designed to operate um so so how how to best solve it and with Bitcoin before we go to how erors would solve this so if we stick to bitcoin Bangladesh so uh what how would you um go about solving that particular problem in Bangladesh with Bitcoin I don't think I would um to be honest with you that say you're forced to do it so what would you do uh with Bitcoin what would I do it depends

on what problem you're trying to fix if you're simply dealing with something like I want to establish ownership to a piece of land then you met a protocol um and you have a token which represents the ownership alone so counterparty for example you would so a counterparty something like that or coin open assets and anything like that would do but if you want to do something like let's say I assigned someone a token I say here you go here's your token all right I've got this token but then I go and borrow against land so there's an interest in favor of a mortgage or um am I assigning him the token again you know give it to the mortgage or and then he has to give it back to me no what you want to do is I want to hold the token and I want to

say I'm the owner of this land I'm beneficially entitled to it but I can't actually transfer it until the mortgage or said or the mortgagee rather says I'm going to release the obligation of the landowner because he's paid off the mortgage so let's say you've got a land owner in a bank you have to have some way for there to be if this then that logic which relates to a particular plot of land Bitcoin can't necessarily do that um whereas a smart contract conceivably can really do anything that you can write in code um so you can write very complex applications one we did was called The People's Republic of Doug or rather one one of our core devs did last year and that was an entire state that was a central bank it was land plots um it had some you know

mining functionality built in it's all kinds of stuff and so from our perspective if you want to get those more complex relationships in you have to start moving back to a more traditional software architecture rather than something which is Bitcoin based and that almost invariably means that you have to use Smart contracts instead of tokens and so right and can then if we now focus on areas in this particular example um how would the the blockchain look like and who would have read access to the blockchain would it be like all people in Bangladesh or would it be transparent to the whole world how would you uh how would you design it it depends on what you're trying to do I mean blockchains are so what we've done with the blockchain is we've ensured that you can control right access the

problem is there's no real way to control read access so once you've got a copy of it you can see it um it's conceivable that you might have applications where you're just going to want a blockchain run on a VPN in the sense that you have disparate offices who need to be coordinating with one another but you don't necessarily want to use a main frame in order to get them to talk to each other or you don't have reliable enough access to go get to a cloud so what you'll do is you'll just hand someone a copy of a blockchain and it's best thought of as a rulebook and say this data driven process as expressed by this blockchain you're now signing on to it and they can then communicate with you and they know that when they're communicating with you that their Communications are getting through

if they see it getting integrated into a block and you know let's say on the opposite side of the country that when they're communicating with you as long as you've got that transaction which has been signed by their private key it came from them so it's kind of a really lowcost way to consistant record the history of interactions between a very wide range of people um where we going with that where were we going with that sort of Eris Eris is a template right so what about um Honduras I think fum which is using Bitcoin is going to help Honduras with their land registry um but earlier you said you would not use Bitcoin um to to do something like that so what do you what do you think of that

approach than taking in by Honduras well it depends on what they're trying to do I mean if if factum is trying to just record that doc if they're just trying to record documents and say right we've got this hash of a document and then a hash of a hash goes into Bitcoin and we've checkpointed it and you've got this proof of existence thing that's fine you know if that's what you want to do if you're trying to do sort of event logic and you're trying to control access for a lot of users and say well this database reflects the current state of ownership um I I don't see how that particular system it might be able to verify that documents are going in and that's a useful service verif and then you have all of the access controls and all of the transfer of title being done

at the land registry itself so so your solution is basically smarter because there's more more possible is what you're saying well I wouldn't want to talk down factum but I mean I think it's Eris is a Eris is a blank template right the the blockchain design we have is blank it is you know when you create a blockchain and you bring it into the world it sits there it looks up at you and it goes what the am I here for what am I supposed to do I know swearing in the show pardon me pardon me what what am I what am I supposed to do what is my purpose in life and you go well little blockchain you can be whatever you want and the blockchain goes okay well program me and then you program it and you tell it what to do so it's on

the one hand it's a database on the other hand it's an application and so it is an application which has its own history recorded in itself where what has happened determines what can happen in this view Bitcoin is an application it is a money transfer application for Bitcoins that is what it is a land registry application would be a land registry application where you program in all of the relevant requirements that you need to run a land registry similarly for any other type of application you start with this blank template and then you just say blockchain you're going to be my infrastructure once I'm done programming you and telling you exactly what I need you to do um and the benefit of having it in smart contracts is that you can change all of that over time which you can't do when you've got all of your

blockchain logic hardcoded in so for us this is something which is designed to be reproduced many millions of times um there's no cryptocurrency involved uh it will never cost money to use it um and it never should um and it's it's free and open source so it's just this idea that the blockchain is itself a useful tool um to distribute application logic and get people working together consistently Patrick I believe you had a few questions um you're still mute by the way so oh no I'm yes here again well yeah Preston I am asking what kind of applications are best fitted for

Iris it really depends it really depends on who you're talking to um I mean someone will say well what's the best application for a bank um you know HSBC will be very different from Commonwealth Bank of Australia um they will both have very different profiles and very different or you know very different considerations in how their organizations need to improve and which what is inefficient within their organizations and where you might want to start putting a blockchain in I think generally um things like Securities clearing and settlement uh people could potentially build applications which run that kind of logic on it we for the moment have been focusing primarily on non-financial applications one of our first ones was a

distributed YouTube that we built we call it two gather so um anyone familiar with Alexandria uh two gather and Alexandria came out roughly about the same time and so two gather runs on an rsdb uh which is the backend application logic and rsdb holds both the permissions to access to gather but also it holds pointers to ipfs the distributed file storage Network so what you can do is you can set up a distributed YouTube type application we've also I think got a um the blockchain info API also part of the application so you can tip people in Bitcoin for videos that you like and then you can upload videos onto a distributed Network and control who sees what simply because and it's all run on

a blockchain rather than being run on you know run out of a server somewhere and so for us this is really to demonstrate anything that you can do on the web you can now do on a blockchain the critical difference is once you're doing it on a blockchain You're simply taking it out of the public internet taking it off of a server moving it onto a network potentially that you don't want other people to see or that you don't want other people to know about or that you just need a secure permissions layer where you need to know that the people who are interacting with that Network are only the people who are authorized to interact with that Network on the terms on which they've been so authorized so I mean Financial applications really any anything is fair game um really any kind of communications infrastructure where

you're coordinating between large groups of people uh medical records particularly in transferring medical records identity in terms of expressing identity and then being able to Port identity so if you have a format for one type if you let's say you have a world citizenship project with something Chris Ellis has been working on for some time and let's say you have an identity record which you start generating in a refugee camp um with multiple uh with multiple data points biometric or otherwise for someone who's living in South Sudan and then they have medical records which are associated with that ID which are you know held by the UN they then managed to make their way up to Europe you know come in as a refugee you now have a framework where you can actually check and Port all of that information in a consistent way and

verify that that person is who they said they were um in a very inexpensive way that doesn't involve running a whole lot of Hardware so for us that's it's Cheapo infrastructure for things that need Cheapo infrastructure where you're not going to have a corporate or some other entity going in and saying you know oh we need a you know we're going to go pay for a server Mainframe to run this we think that you know there are different kinds of applications where blockchains will be appropriate and that'll generally be in getting data into and out of places where you don't have servers of reliable internet connections yeah and clear um especially the applications or um you mentioned um if you look at uh the the type of database

actually you mentioned it's more kind of database uh database you put normally in your uh company structure and security uh blockchain is splitted decentral U there's an uh how do you say that balance in between in what kind of uh situation you uh or state you're in with ir how do you mean well the security for your own company or servers uh you have uh in your own control y the distributed database is in control of the community and how does Iris databases

work so so when you can permission something um you can have so there's a whole range of appreciation on the one hand we can have the thing that we're all familiar with you can do an ethereum or a tender or a Bitcoin clone which is completely open U mining rewards decentralization you know proof of work proof of stake whatever if you can write code that's what you're going to get so that's the one extreme if that's what you want um but we already have networks that are used for that and those networks have large Network effects they have their large communities and the rest of it at the Other Extreme you have one user one instantiation with all of the permissions for a single chain so the only reason I can really think of

that you would want that is if you need a database that's resistant to a SQL injection attack that's a good use case for that particular instance but then then you have this whole range in between between the totally decentralized and the completely lock down centralized one computer and there I think if we read um was Nick zabo's essay from back in December uh the dawn of trustworthy Computing and basically he said what if you have these blockchain networks with 12 people with a thousand people with 10,000 people who use them to address very specific purposes it may be that those 12 people or 100 people or 10,000 people um are all part of an organization in which case the organization might manage the chain and the way that they would do

that is again through these tiered permissions um so you can with permissions with arys there are four fundamental permissions one of them is called the Dugger or or basically the admin so Doug is what we call it's Doug is the name of the Marmet which is our mascot um but it's also a name that we picked out of thin air for the smart contract which runs an entire era system so a Doug contract goes or can go if you choose to put it there into the Genesis block of a ssdb once it goes into the Genesis block what you can do is you can say right well we're going to appoint a Dugger who has permissions that Dugger can then basically according to that smart contract authorize if he wants any transaction change any term of the

database amend anything at any time and this doesn't necessarily mean that he's so let's say your blockchain's rolling down that he's going and plucking data out it means that if he adds an appen transaction to the end of the database that what happens is the rest of the network acknowledges that as the most current state so if you say I've got a block time of 30 seconds and then your Dugger goes actually that's a little too quick we need to make it a minute and he sends a command saying now update you're you're not going to have a block time of one minute the rest of the network will acknowledge that as a valid transaction because when he sends an API call to the Doug contract signed with his private key that transaction is added to the end of the chain and the rest of the network

acknowledges the instruction next you have committers and these are the guys who add block so you can say in this hypothetical network of 100 people um you know I only want 10 of my friends adding blocks and then they can have 10 of their friends joining on as well so these are 10 people I know I know where to find them they're processing the transactions which because it's not a competitive process this is done at very low cost but they have the certainty that everyone who's operating on that system is going to play by those rules granted you have to supervise them and you have to make sure they're not cheating but because you know who they are there's a very strong incentive unlik with Bitcoin or something else where you don't know and you have Anonymous validators that you can't find um there's a very strong incentive to

behave because if you do cheat everyone's going to be able to see that you have um beneath that we have a a tier of permissions which we call contractors or creators and those are people who have permissions to author to uh upload scripts onto the chain and then you have your fourth set of permissions those are transactors and that's what you might expect in Bitcoin someone with a Bitcoin balance so these are guys who are interacting with smart contracts which hold account balances and the rest of it so you can get as closed or as open as you like with any of those tiers so you can say well you know I'm a I'm a bank I'm G to have you know three super user admins um and if they want to exercise their permission it's a two of three multi signature I'm then going to have a 100 transaction

validators and we're going to spread those out around the world to make the network resilient um and make processing resilient we're then going to have 10 creators who are people who are uploading new cont racts to this chain uploading new functions to this chain and then we're going to have 100,000 users who are using it as a settlement system a real a real-time grow settlement system effectively and what you've just done there is you've created this infrastructure for a settlement system like Bitcoin which is controlled and which works very reliably over great distances with almost no infrastructure at all so what You' usually this requires a building a great deal of expertise and and and a great deal of Labor to administer and electricity and security and the rest of it um with a blockchain all of a sudden you can cut

down on those costs and you can have the system more or less run itself on its own so our thesis is that that kind of approach when you build it on a blockchain which can be controlled is going to have a lot of commercial applications in data management not necessarily just Finance um but also in government accountability and other things okay yeah so you have uh different communities to uh create a total security yeah clear yeah I mean it yeah that's pretty much it and just and then your your security calculus changes so it's really as good as the people who are holding the keys um at that point or whatever other architecture you put in place which is very much in line with

you know normal enterprise system design so question um you don't have a centralized server but you do have centralized administrators so you do have a certain group of people who uh controll the network to some sense Y how do you prevent for example a replication from an earlier block oh so what an administrator turns around and says we're just going to revoke from this block back here yeah like what you said you pluck out a block somewhere from the blockchain and he instructs the network to uh take it out and suddenly somebody doesn't own his house or a block of land anymore that's I don't how do you

prevent that from happening uh you'd have to hardcode that particular restriction in and you would have to limit the administrator's permission to being in a pend only um which I think is how we've written it I don't I don't think you can take a block out I don't think that's an instruction we've come up with yet but you you'd basically limit his permission to do something yeah because with the with the blockchain the Bitcoin blockchain that is uh to clarify um it's it's practically impossible because of the work correct because of the work exactly because everybody keeps looking at the longest chain yeah and if somebody plugs one out and it doesn't make sense to the rest of the network then they will simply refuse to work with that one yeah so so how does uh how does your

blockchain secure such a such a feature you secure it through supervision just like anything else I mean it's how do how do we secure databases at Banks today and make sure that they don't erase all our data and erase our bank accounts they have backups they have supervision they have compliance so that isn't going to go away the reason you use a blockchain is not to create this you know objective truth of the world what you're actually using it for in this context is to automate business process so it's it's a very different security calculus um you're using it for a very different purpose um and you're using it in a very different way so it's you're leveraging certain other aspects chiefly the Automation and the verifiability but you're not necessarily going for the censorship resistance um

you have to you know of these different qualities something has to give in order to get the other qualties so so if you have the administrator you're trusting the administrator but let's say it's a public you know it's a public chain being run by the government you know for some particular purpose presumably people are going to be able to see that so the benefit you're getting is the transparency of looking and seeing what's happening on this chain and so every you know everyone will notice they say well hold on a second you just took out that block where did it go um blockchains are very good transparency machines so we think that that particular quality is going to mitigate that risk okay fair enough yeah so Preston Bitcoin was meant to be this this trustless protocol that could potentially include the whole world not

being censored by Central parties like Banks and governments and that to me you as a as a monetary activist has always been his biggest charm you seem to be focusing more on the old permissioned world using some of bitcoin's components do you understand this sort of Might upset some of the devoted purest Bitcoin users and how do you deal deal with that kind of feedback uh we know it upsets them because they let us know about it very loudly but I don't think I want to be politically correct so it's a it's a complex subject right it's not it's not so simple um Bitcoin uh we can touch on bitcoin itself in a minute but let's say you have a Communications protocol where you're using the protocol as just that protocol and then you have different

databases being controlled or blockchains which are mutually intelligible being run by different communities in different places to address a very specific thing such as peer-to-peer payments um or or something like that this allows people to build their own infrastructure and then agree Open Standards with other communities with whom they want to communicate and agree on states of data which they share so it's not necessarily that when you go back to permissions yes the structure of an individual blockchain changes but you can now have a hundred million of them so when you every time you create one of these blockchains what you're doing is you're getting a group of people off some of the stacks you're getting them out of web servers you're getting them running their own data infrastructure

which is designed to serve their purpose which does not give their data away to anybody because they're using their own their own hard drive space and their own processing power to run the interaction so I I get the criticism because yes people go oh God you know corporates and governments are going to use these blockchains yes they will like Yeah so basically you're saying Bitcoin Bitcoin is be your own bank and and Aris is be your own blockchain Eros is be your own server yeah Eros is be your own server build your own blockchain be your own data management you're also a fellow at the libertarian Think Tank Adam Smith Institute in London so what is your just setting your commercial interest aside what is your personal ideal Society everyone is kyc and tracked by large

Central parties or something more much more distributed decentralized um I can see how to put it I don't really think about that too much to be honest with you the reason we designed ARS the way we did is because I looked at regulatory law I I used to be a a Securities lawyer andal philosophy right you're part of Li but like AML kyc is just like the dullest thing in the universe so I found it very you think it's a good thing or not do you think that people should be kway for every uh every sent they spend no I think it's a human right to be anonymous um and I think there should be facilities for people to be anonymous and I think that people should have control over their data um that's one re you're going to leave England you guys

uh you're based well you're based in several locations but your legal entity is incorp operated in the UK right you've been tweeting that you're going to move your um headquarters based on some recent um regulation in we're negotiating a lease in the United States now um and uh and I'm actually talking to you from New York we I got up and left from England um yeah England it's but before we get on to that I think more to the point um a blockchain which is controlled by 15 people 100 people a thousand people um is giving them the ability to talk to each other without for free more or less because they're using their own equipment to do it um without having to rely on somebody else and you know they say when you get

given a service for free you are the product um in the case of a Google and a Facebook and anything like that that's absolutely correct in the case of a blockchain that's not the case I mean the blockchain is just a way of organizing data so we kind of look at it as as like the blueprints to a new kind of tool like the blueprints to a hammer that just put up on the Village Square once you know how to do something in blockchain world you can repeat it a bill you know a billion times once someone figures out a really good messaging protocol um that's peer-to-peer and involves blockchains for particular types of financial transactions or Bank in a box for example you've suddenly lowered the barriers to entry to banking because you know what the coding you know what the

coded parameters are that you need to set and then when you push a button you have a bank so we think that the proliferation of this kind of a database as a as Industrial Automation Tool uh is actually going to be really useful and is going to give people a lot of their privacy back um but that you know the power to do so is does not rest in our hands you know we sit there we design the open source database it's going to be people who design applications which serve their needs which are distributed which don't need servers which are very predictable um and that's what we think these databases are really good at if that makes sense right and then to to get back to the final point before we wrap up about um moving to the states at the same time we see sapo moving to

Switzerland from the states uh there seems to be a hub in Switzerland and in the Netherlands there's a lot of activity going on too so what why the states and not Switzerland or the Netherlands or so where we're taking well firstly Casey and I are both Americans so it was pretty convenient to just say right okay in in this instance um you know the states is is a good destination for us but just by way of further background for for the viewers the ukuk has uh said they will introduce a new B bill which is called the investigatory Powers bill um eventually the investigatory Powers Act and what that does is is two things uh the first we believe um on the basis of press reports is that they're going to attempt to mandate State back doors into cryptography um being a blockchain firm

that uses various other cryptographic protocols uh as part of our work um this is obviously completely unacceptable and we can't do business in the UK if that happens the second one is that they're going to mandate that all telecommunications service providers uh retain all user data for all of their users for a minimum of 12 months after the user has transmitted that information so you're looking at something like every WhatsApp message you send every Facebook message you send every email you send every text message you send um every you know service you use every Snapchat you know everything you can possibly imagine um has to be stored retained and then the government on request has to be able to access that so they will have more or less a

complete picture of everything that has happened on on the internet in the United Kingdom uh minute by minute Blow by blow over the course of the previous year from any point in time um our worry about that is that a blockchain is itself a telecommunication system and arguably every single user is a provider of that telecommunication system if not an admin then certainly you know you know certainly the individual users could be viewed a full node could be viewed as a um as a operator of that system because you can reproduce the whole system from one copy so our view is that if we're going to be a blockchain as a service provider uh the regulatory cost of compliance is going to be extremely high we one web service provider a web hosting provider said

that compliance will cost them 30 million pounds uh upfront before the law you know even comes into effect just to get ready for it so how much funding do you guys have as as a company not nearly 30 million I'll tell you that much um I wish we had 30 million but um but yeah I mean that's those are the kinds of sums that are involved A and B I don't want to live in a country where where everything that everyone does at all times and yeah arguably the US does it too but in the US you still need to get a warrant if you want to access it and you want to bring someone before court in Britain that's no longer the case Council officials can get this data so you know for any reason they they choose so so yeah I don't want to live like

that I don't want to live in a country that's like that nobody else should either um and you know we haven't seen you know Britain's by a margin of 20 to1 uh polls have indicated that they don't think the government needs this power 50% of the population has said that they would use the internet less if this particular piece of legislation came into Force um and the government just simply hasn't listened to what its people are saying and in typical British fashion they're muddling through um there's no there's no Ren pull to phillybuster or to fight it in the they need what you know what they need they need 10 MPS 10 Tory MPS and this is supposed to be the party of Freedom mind you um you know the libertarian Think Tank the Adam Smith Institute invented thatcherism um back in the day that so

if you think about it that way um you need 10 MPS to defect 10 people to stand up and say no and if they do that then this bill dies and um and so we yeah we stood up uh and we said we're not going to you know we're not going to live like this uh a couple of other firms have stood up and said we don't want this um and we know at least one Tory MP opposes it which means we've got nine to go and then the other opposition parties need to get their stuff together and um and and object but if you can do that nine people is all it will really take to stop this bill from becoming law and I hope that happens desperately because um because it's a really very Draconian and uh and illiberal piece of legislation okay interesting well good

luck with that um Tim you have more questions before you wrap up or Patrick no my last question was just been asked by you so good and Patrick uh no no for questions no thank you maybe pet you can um you're I can see you right now just see your avator but U yeah strch too bad yeah um so tell me a little bit Patrick you're from Bitcoin um cold storage.com right can maybe like in one minute can you explain what you what you guys do yeah uh at first of course explain what Bitcoin and Block Chain is what it can do for um money transfer and also the

security of it and uh we help companies to um uh obtain security within their own business processes um and also for new product product development yeah okay well it's that it's that secure that you you're not even visible so yeah I'll try to put my camera on and off but it does not uh gain on no okay well um thanks uh Preston so much for for joining um stick around for after the show and um I would like to uh ask the viewers to like this video and to subscribe that's the only thing you

have to do of course you can donate too but it's it's really more about just trying to grow the channel so thanks so much Preston and also thanks Tim and Patrick for being on the show and thank you very much for the invitation oh yeah one where can people find you Preston maybe just so um just find us at ARS industries.com um and yeah and then basically Reddit that's our erors Industries IRC free node it's erors Industries it's ER impossible it's almost impossible not to find you Bas yeah I know it's I know it's really hard to remember but just type in erors Industries and you'll be able to get a hold of us one way or well thanks so much and let's talk again in the future right