EB146 – Ryan X. Charles: Allowing Content Creators to Own and Monetize Content with Yours

Transcript

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cryptocurrency wallets hi welcome to epicenter Bitcoin the show which talks about the technology projects and people driving decentralization and the global blockchain Revolution my name is sesan kucho and I'm M Roy today we are joined by Ryan X Charles who's the co-founder and CEO of yours yours is innovating in the content monetization space with with Bitcoin so we'll be talking about the challenges of content creators and how yours can make a difference to their life so before we begin let's have a brief background from from Ryan Ryan something about your background and how you got involved in Bitcoin sure well first of all thank you for having me guys I'm really happy uh that that you would have me on your show um so yeah my

background is um so I was uh a physicist for a total of about eight years uh I was getting a PhD in physics at wasu in St Louis I discovered Bitcoin in 2011 and for some reason I I was just absolutely Blown Away with the technology of Bitcoin I thought uh you know this is this is unlike anything I've seen before I was a little bit clued into the financial system and uh I wasn't like an expert on economics at that time still not an expert I've studied a bit since then but um I thought well this is really interesting like this is just totally unlike anything else like decentralized money I didn't know that was possible so in early 2011 I spent about three weeks just studying Bitcoin um trying to you

know assess whether this was for real like is this actually possible or is this some type of scam um I think it's for real um and uh uh so after after I had like this sort of I don't know this this sort of moment where was just like I was just sort of obsessed with it for about three weeks um I then sort of went back and and kept being a physicist for a while uh but I Bitcoin was on my radar and I it was sort of a hobby I guess you could say I was sort of a Bitcoin Advocate at that time uh then 2013 came and Bitcoin became sort of sufficiently real sufficiently big there were a bunch of VCS that started investing in it all of a sudden um that I decided that you know this is this is for real I'm GNA

regret it if I don't get into Bitcoin so I decided to leave my PhD in physics and I I uh dove into the world of Bitcoin without knowing exactly what I was going to do um but uh I was an engineer because as a physicist I wrote lots of software I'm an experimental physicist I'm like well I don't know much about business but I know how to write software so maybe I can get a job as an engineer and so I uh interviewed with bitpay uh the the largest Bitcoin payment processor I ended up joining bitpay and I worked there for a year I wrote a lot of Open Source software I was I I I suppose it's fair to say that while I worked at bitpay I was the lead engineer on bitcore um I also played a really big role in in uh in creating

copay bit pay's originally multisig wallet now it's sort of a general wallet bid pay was uh so it was a really really great experience for me really uh informative I met lots of wonderful people I then had this very unusual opportunity to join uh Reddit and I'll let you guys ask questions if you're curious I'm going to give the light version just because it would it would take a long time to uh you know give you the full version so light version first I talked with uh basically a recruiter reached out to me um can't remember his name now but the recruiter reached out to me put me in touch with yesan Yan was the CEO of Reddit uh at that time and had a really good conversation with Yan and uh actually I was like okay well if I'm gonna meet the CEO of Reddit I just

sat back and thought about this strategically like well this is kind of an unusual opportunity to me the CEO of Reddit what am I going to tell him you know I should say something to him and and not and you know not waste this opportunity I thought the most important thing I could say to Yan was you guys have got to decentralize Reddit that's your number one you know that if I were to join Reddit I would work on that because that's a really cool like that would be that's the future is decentralization so I that's what I said to youan and so we had a really cool talk I mean they had already thought about doing stuff like this so had a really good conversation with Yan um I then you know basically kept interviewing I interviewed with some Engineers I talked with Yan again and

decided to leave bitpay and join Reddit and and figure out you know uh uh you know how to how to do something like this at Reddit the company so as far as I'm aware I'm I'm the only person whose official title was cryptocurrency engineer like ever I'm not aware of somebody else who had that title uh and I'm also as far as I'm aware the only person who worked on sort of cryptocurrency projects in a in a sort of full-time capacity at a mainstream social media company so um now what happened after I joined Reddit here's where I'm going to give you guys the light version and feel free to dive into the details if you want basically uh there was related uh drama going on at Reddit at the time and Yan decided to resign after I was there for a month and

a half and when Yan resigned I kept working on on the project um but it it sort of the the the board and the new Executives had their hands full with all sorts of other stuff so it basically just killed the project that I was doing uh and so I had to leave uh after a little while and uh then I decided to join uh a company called bitgo uh and I joined bitgo because it just sort of fit well with with everything I was doing from a Bitcoin and software point of view it's a Bitcoin security company since I had worked on copay at at bit pay I knew a lot about multisig and and you know JavaScript engineering and stuff since I'm an engineer so I worked there uh for a while and then last year in the summer of 2015 I wrote an article called Fix

Reddit with Bitcoin because after I left reddit reddit kept going through this sort of uh period of turbulence and uh uh this article I wrote was really popular it really caught on with the Bitcoin Community it really caught on with some some technology people outside of Bitcoin so uh I realized I had a this sort of a seed of an idea that I wanted to explore so I decided to leave bgo and pursue this full-time and that project would evolve into what is now called yours um which is a you could call it a it's just a social media uh uh app where we have integrated Bitcoin micro payments and we're trying to solve this problem of getting content creators pay because there all these people out there

that write content not just write but produce videos music audio whatever on Facebook on Reddit on Twitter on medium on Soundcloud on YouTube and they don't get paid anything or if they get paid something it's not very much and usually they don't get paid anything I mean especially on like Facebook um so we're trying to solve that problem uh and that's what I'm full-time on now so that that's the that's the my history in a nutshell that's a fascinating history and I guess we could can sort of see the progression from you know going from uh working as an engineer at uh at bit pay working on bitcore to then you know being at Reddit and and then building uh multis software at uh at bit code to sort of the logical progression now to

you know building a social network that uh pays content creators and curators for the value that they bring into the system before we get into the questions on on yours uh since you did work at Reddit and you were full-time on this idea of uh be building you know the decentralized Reddit you know they've sort of moved away from that idea what are your thoughts on Steam and what they're trying to build yeah so steam is definitely steam executed on this idea of what if you could build like a community on the basis of a new currency or a new blockchain and you sort of decide the economics of that community so steam invented new economics with their own new blockchain their own new

currency with this integrated platform people can can create content right uh so it's it's a really really cool experiment I think I'm really like excited to see Steam there are a lot of uh we have this list of related projects that's pretty long there are a bunch of people that have had ideas that are really similar uh to to something involving like cryptocurrency and monetizing content and stuff and steam took this the really U I think almost most sort of uh extreme idea of like inventing their own you know blockchain so we sort of deliberately didn't go that route but I'll I'll avoid uh you know diving into that yet I think it's a really cool experiment I'm glad to see

that uh you know they've gotten a bunch of attention we've actually gotten a bunch of attention via steam just because people are like wow maybe there's something to this idea of cryptocurrency and you know social media so we've actually gotten more attention for our project just because we're like the the the next closest thing to doing you know doing something like this we haven't launched yet uh but you know there there are all the other projects are uh a little bit uh maybe further behind I would say we we'll see if if anybody else sort of rolls something out soon um but yeah so steam's really interesting you know what we're building isn't isn't quite the same we get compared uh to them a lot because of the way that I've describe the project uh in the past and you I I since I worked at

Reddit and everything and originally I announced our project was a decentralized Reddit which is actually really kind of what steam is they really actually did that we're what we're doing isn't quite a decentralized it but but in any case yeah I think it's a really interesting project and it's it's cool to see how that'll play out cool so let's get into what yours is so describe yours in your own words sure so first of all I think uh you know anybody who's clued into the space of social media you're you're probably aware of things like at least from a business point of view you know Facebook and Google earn a huge amount of money from advertising um they've now like you know they they're absolutely these sort of enormous sort of giants compared to

traditional media uh Google and Facebook these these fairly new companies as far as you know history goes has have done a better job leveraging the internet than New York Times or you know television companies NBC or whatever um but what's happening is there are all these people that create content uh for these platforms uh Facebook being the the biggest one probably YouTube's definitely way up there um you know Reddit is a big one as well Reddit is somewhere in the neighborhood of like 150 million active users uh I I don't know the latest numbers um but a lot of people create content for these platforms but they're actually being paid zero so the companies earn money and sometimes the companies are profitable in the case of Facebook and

Google in the case of Reddit uh the last I'm aware of I don't think they're profitable yet I think they're they're still uh you know spending more money than they're taking in so there's there's there are a couple things may be wrong with the advertising uh sort of business model one is that the content creators usually get paid zero so that seems a little bit unfair I mean like wouldn't that be cool if there were a way for these people that are creating content for for these social media platforms could actually earn money for the for all the value that they're creating and the other one is that maybe advertising isn't necessarily the best business model uh for every type of content I mean maybe it's a business model that works sometimes but maybe there are other things where maybe maybe there are better business models so

anyway we see this this opportunity here where all these people and I could give lots of examples of this but there are just communities of people that create content for free and I think the real reason why they do this is it wasn't really technically possible to monetize uh what they were doing until fairly recently I think Bitcoin creates the the the foundation and then some type of layer on top of Bitcoin like the light the lightning network uh really enables us to finally have actual peer-to-peer micro payments so that you can monetize uh internet content uh with in a way that's not based on Advertising so that's what we're trying to do we're creating a a social media destination with uh an integrated

Bitcoin wallet the users post content and what we're trying to do is uh find the right uh model or maybe a market of models where we just U Empower uh the users to earn money from this and then while also solving this complimentary problem of giving people a reason to pay for Content so anyway all that sounds pretty uh Eric uh uh but I could describe the product maybe in in detail but that's the big picture there all these people creating content on the internet not being paid anything whatsoever and we think if we can get those people paid that this is going to be a big deal that sounds like a like a like a really big problem to attack right like uh cuz uh being YouTube content creators we are we kind of see

this problem daily and uh I've kind of uh so so for this for this podcast maybe we could take a couple of different examples so um when we say content creators like just to personify content creator in the minds of our audience we could have a few different examples so example number one could be some some person who has a YouTube channel where where he or she says something and is very popular goes into the millions of views so I dug through one of the top people making money on YouTube is Jenna Marbles who um who the hell is Jenna Marbles who the hell is Jenna Marbles I I I know who she is

actually so she Jenna Marbles apparently makes around $2 million a year on YouTube wow because uh she has uh a total of three and a half billion views on all of her videos to date okay and so that's that's one kind of content creator like this kind of content creator is massive right like he a lot of lot of views probably very low produ cost and YouTube already kind of um has a way of monetizing her content and delivering her part of the things but uh the issue also here is in this in cases like this YouTube takes a 45% cut so whatever YouTube makes out of

advertising from her videos 45% goes to YouTube 55% goes to her that's one kind of content creator another kind of content creator is um somebody like us epicenter Bitcoin or let's say a talk show that talks about the latest Game of Thrones episode so they make reviews of new new equipment new technologies or new shows and and these people generally don't have the number of views in order to really make a living like Jenna Marbles right so that's another kind of content creator maybe a third kind of content creator is somebody who either blogs or puts up really great posts about things on Reddit let's say there

might be a guy who really makes really great posts about virtual reality and he reviews all of the products that are there and he posts them on Reddit and probably gets paid nothing for it so so we'll have like these three examples yeah like Jen Marble's huge the these the let's say the Game of Thrones reviewing Channel who doesn't get paid much and the third uh third person is somebody who blogs and posts on Reddit and who doesn't get paid anything at all and let's walk through how yours can impact all of them right would that be a good experiment yeah yeah that's a great experiment so that's a great way to frame it this is one way to look at it like you know sort of different you know different scales different levels of you

know uh uh whether you're full-time or not stuff like that you know so Jenna Marbles is I I've seen some of her videos so she's she's almost like I I hope I'm not being you know I hope I'm not misar characterizing her but she's a very normal person who makes these very normal videos uh and so think she she just latches on to people she's like one of these people that um she's uh very very good at capturing sort of an audience of other normal people so the audience is just absolutely enormous apparently I didn't know how much money she's earning that seems like a huge figure to me so she's like a power user she's a power content creator and YouTube is an interesting platform just because like it's one of the few platforms that actually provides a way for people to monetize so if you're

really successful on YouTube you can be very successful like Jenna Marbles is but jna marbles is uh sort of an exception uh most users are not anywhere near Jenna Marble scales there's a there's a you know a long tale here where there's some small number of creators that are earning a lot and then a long tale of people that aren't earning very much of anything so sort of on the opposite side of the spectrum would be the smalltime content creators and let's just think I mean let's assume we're focusing on people that are actually putting some care into what they're doing and actually doing a good job because there are definitely content creators that are you know if you just post some random comment isn't necessarily good yeah uh so some of them are some of them aren't but let's focus on people that are actually trying to

create something good that like it would actually be nice if they could you know monetize this somehow um so you know most of those people aren't being paid anything so I don't know where you guys you're somewhere in the middle on the Spectrum you're not as famous or popular as no we're way down way way down on the Spectrum we're close we're pretty close to that guy making videos about uh you know virtual reality or whatever so you know so you guys have an audience though so you're you know you you do have an audience you you're you're you're probably earning something but probably not millions of dollars per year like like jener Marvel say um and then there are the people that aren't earning anything and have have a very small audience um also there are different types of content to consider

uh so you know like you're saying mayor uh you know uh articles you know people that write articles I write articles for free on medium um we're definitely not targeting the superstars on day one because I think we have very little to offer them you know if Jenna Marbles wanted to use your platform I mean she has a lot more to give like if she used our platform that would be amazing because it would draw attention to us but I don't think she's GNA earn very much money on yours on day one like she's already earning enough from you from uh YouTube that you know if she earns $10 from yours it doesn't really make any difference to her but if someone who isn't earning anything earns $10 on yours that makes a huge difference to them especially uh there are a lot of people in world where $10

actually makes a meaningful difference in their life so those are the people we're targeting we we're targeting targeting the longtail all these other people that aren't being serviced whatsoever by YouTube or these other monetization platforms and then also just consider the fact that you know there are people that are really you know professional content creators creating on content on platforms that aren't social media you know on the New York Times or whatever you might be a writer for the New York Times we're not targeting those people either because they already have a job they don't really have the problem we're talking about we're talking about people that are either not earning anything or not earning enough you know they're people where it would make a huge difference to them to earn even just a little bit of money those are the people that that we're that we're uh trying to create a

platform for let's take a short break to talk about bitfinity the Miami blockchain Conference to be held this year from October 30th until November 2nd blockchain technology has been exiting the world of nerds and hackers and entering the mainstream we're at the begin beginning of a big revolution that's going to fundamentally change how the world works at the bitfinity conference we're going to have the heavyweight speakers such as Don Tapscott who wrote the book The blockchain Revolution or Joe Luben of the startup consensus but we're also going to have the industry panels that focus on real world use cases and bring together both the tech expert really

understand blockchain and the kind of key decision makers that will help blockchain become a real Commercial Success now you may just want to pack your bags and buy a ticket to Miami and that's certainly a good idea but if you're involved in a project or startup there's something even better bitfinity will feature dozens of presentations by starting startups so you can apply for the presenter package get an exhibitor stand and speak on the main stage to an audience of 500 to 1,000 highlevel people including many VCS and top decision makers and of course all that while sipping in Martini in a luxury hotel in Miami Beach where Frank sinra once staying on stage to learn more how you can join startups like factum consensus everledger and Stellar visit them at bitfinity epicenter and find out

how you can get 10% off the company presenter package or your $200 discount code to attend we'd like to thank bitfinity for their support of epicenter slightly unclear to me at this point is is yours a uh simply a technological platform on Which social networks could be built or is it actually a social network uh is it the equivalent of I don't want to you know it's got a vulgar description of what I mean but like is it a CMS or is it the social network on which you build the great great question so we we are trying to build the actual social network not just a platform for other social networks but an actual destination so

you'll go to yours. network and log in the same way you would with Reddit or some other social media site we won't have a mobile app on day one but I think it's really important that we get on mobile so maybe the way most people get it is by just going to the App Store and downloading yours so it'll be an actual app that faces uh end users but you're asking a good question because um I think once you start considering the possibilities of what if you just had micro payments integrated into content there's a giant space of possible products and here's where I start being being really generic and vague when I talk about this we can narrow it down but it's because it's really like there really are a lot of possibilities and so we're trying to First build the simplest

product that we think will work but we do think that there's actually a big space of possibilities here and our role model here is Reddit uh Reddit has created a community that is actually a bunch of sub communities um if you're a big Reddit power user you're probably on a small handful of subreddits and you don't care about any of the other subreddits you care about the subreddits that are important to you for instance R Fitness is a big one if you're you're a fitness buff you might like R Fitness uh there there are a whole bunch of these that are just there's R Bitcoin of course for Bitcoin users which is you know basically everyone in the Bitcoin Community is is on R Bitcoin and there are all these communities for other uh you know various interests so I think

that there's power for us to create a platform of platforms so we are a destination but at the same time we empower the users to tweak the rules of the economics so that they can create something that's appropriate for their community so I would describe us as as a destination it's not just a protocol but we we we are also like sort of I guess you could say it's Market minded like we like the idea of empowering the users to to Define what the product means for their Community okay so when when I think about this and we were discussing this earlier on the show before the show with mayor is when you look at the history of social networks that have become successful because there's been you know for every successful social

network there have been maybe like a hundred that have failed um all of the successful social networks whether it be Facebook Instagram Twitter Snapchat some of the other ones like Periscope or whatever all have a unique um a unique position and value proposition in terms of functionality so you know they every every one of those networks has brought on a new functionality uh that is very specific and and very targeted so take Instagram for instance posting photos with um with filters and it has stayed true to that and that's what has made it so powerful and so successful um the monetization often and for many still doesn't exist but is often an afterthought I guess my

question is what is the the unique feature aside from monetization uh which I don't particularly think would lure people in in itself what type of features uh would yours uh propose to its users in order to um you know Reach This objective this this this goal of of of being massively used by you know thousands and hundreds of thousands if not millions of people yeah so well first of all I I actually think monetization may be it I mean I think I think monetization by my by itself can go a really long way I think that'll be the strongest reason for people to use this app if we actually succeed in in getting our users paid real money we actually Empower them to

really earn money um I think that will be a reason for them to use our platform uh at least in addition to if not as a replacement for for other platforms um uh with respect to like again I'm G be really vague here let me try and give you some concrete examples okay let me let me give you a concrete product idea um that has never you know been done or rather I should say that the way we would do it would be different than anything that's been done before it's an idea we we've run through recently now I'm not promising we're going to launch this idea but this will give you an idea of what I mean so uh there's a there's a website called shutter stock where you can buy stock imagery uh where you know imagine you're making a website you just

need like a background photo of some people with a laptop or something you can go there and get stuff like that you can you can buy you know content I think I think there's a monthly fee or something like that is how they is how they monetize it so you have to go there and pay a monthly fee to get stock imagery well what if on yours you know you could create a community for stock imagery and the idea is you know you can see all the images at low resolution for free but in order to see the image at high resolution which is what you're going to want to print it out or to put it on your website or something you have to pay one cent so you have to click a button um you know to to make a payment but it's that easy right it's it's not

like you know you don't have to sign up for a recurring payment which you don't necessarily need you just want this one payment it's worth one cent to you which is really small could be bigger than that but it could also be that small um well that would draw people in that would draw in that community of people that would draw in people that want to produce stock imagery and have a platform where they can share it and also the people that want to buy just one image you just want to buy one stock image I don't need a monthly subscription to a to a website I just need this one image so that would be an example of a little Community I think that could work and again I'm not promising we're going to do that specific one um but there are a lot of

ideas like this if you just run through the space of possibilities of what if I could pay for things on the internet um it's really there are a bunch of product ideas involving who pays for what and when and how much they pay for and why are they paying are they paying to buy it are they paying to invest in it and you B you you just have to have the technology there first and foremost you got to actually make these micr payments possible first then building these little products are relatively easy so we can we can build we can experiment with adding these features telling our users look we've added this cool new feature what you can now do is you can display a photo for free and then the users have to pay one cent to view view the full uh you know resolution version

of this image and let the users uh design their Community uh you know to use that feature so I think the the way the way I now see it playing out would be we will empower the users to create these uh communities with with unique features uh and it'll the the community that becomes the most popular one first will probably be not hopefully not be something that we can conceive of because the whole idea is that they'll be better at figuring this out than than we will so I don't know what product will take off first or what community will take off first but it'll be something unique with uh where uh uh you know uh content creators are being paid

and it's servicing some type of Niche audience that most people don't care about but that Niche audience really cares about and to them it solves that problem that they have um and then once people start you know coming to our platform you know you can create other communities that that service other uh uh niches and other other communities with other you know product ideas and stuff so hopefully that answers your question in a nutshell I would I would uh my basic answer is I I would argue that the monetization part actually is a really really good selling point that if we can nail that correctly that actually will draw people to our platform more than more than anything else so personally I believe the the monetization is is is sufficient to to draw users and um to give you a feel for

um some examples I see in my in my daily life um like I love the show Game of Thrones and they are these small channels that are they they take episodes from the series and they make you know commentary on the episodes and I love seeing them because uh these people that create these videos think in ways I don't so I I find that really valuable and the these people get like 50 or 60,000 views a day and I walk through their financials and uh what I what I kind of realized is these guys can only do this for a hobby with 50,000 or 60,000 uh views per episode and like four episodes a month but many of these

people actually want to do this full-time and they want to Branch out to new shows and do it more but they really can't because there's no way of uh monetizing what it is they do so I'm I'm guessing that if there was a really good monetization mechanism for them they would go full-time they would be able to invest in equipment and then they would they would they would get users yeah so uh I personally I'm I completely buy into the premise that there is a big long tail of people that are creative and if you could give them the right uh monetization model they would go come out in full force and maybe over over a decade it develops a new kind of media industry all together just like YouTube

has created a new media industry given that like uh I think the the uh the interesting questions to me are um how does your start a like what kind of communities does it start with and then come come the technical questions which is uh like if you wanted to build a platform of platforms then basically you need something like a financial logic and then something that stores content and then you there's something that kind of gives a user interace interace and how do all of these things connect right so there are two components here we maybe we address the technical one later I'll let you guys maybe ask that again uh but then there's the you asked a good question though which is again I I sort of I'm sort of vague about this now but

who are our core users okay like what is community number one here and the reason why I'm vague is because we actually haven't identified this yet so I think it's really important so we have you know you guys have have heard of our project uh many people in the Bitcoin space have heard of our project okay we have at this rate uh some like 3,000 people on our mailing list I'm quite sure almost all those people are Bitcoin users I haven't pulled them but I bet most of them are um and uh so we've got attention in the Bitcoin Community we we could make a platform that was for Bitcoin users first I mean this would be like a really straightforward like what if we just made you know Reddit but with Bitcoin I bet Bitcoin users would use it um however I don't think it's in

anybody's interest that we do this first Bitcoin users were probably most benefit from it if we created something mainstream they would actually probably rather we service a mainstream audience because everybody in the Bitcoin space wins if we start servicing people outside the Bitcoin Community also from our business point of view you know I'm a I'm a Bitcoin user I've been in the Bitcoin space since 2011 um if I if we create a platform that Services Bitcoin users well okay I mean I'd be happy with it and my friends would be happy with it but we would have no idea whether we are solving a real world problem or whether we're just solving something for Bitcoin users so I think it's really important that we identify one Community to be our core audience that are not already Bitcoin users because if we can get some group of people that actually like are

you know getting value from this product and actually use it actually really love what we're building for them then we can know we've solve that problem of like making a mainstream product that we're not just making something that's so technically sophisticated that you can only understand if you're a Bitcoin user we'll we'll know that if we've got normal PE nor okay just non-bitcoin people they probably won't be normal actually whatever it is it'll probably be some Niche audience that that isn't normal but it'll it'll be something that's outside of Bitcoin where we can know that you know we're we're solving something for uh people that aren't already really clued into Bitcoin um so let me give you an example uh recently I've been I've been learning about manga in Japan if you guys know about this I'm not a big like manga fan but there are a

lot of reasons why we think that audience might be good for us that they're really uh sort of young sophisticated people that create create manga which are Japanese comics and there's there are huge communities of these people and they have the same problem as these these other people they you know they're creating content they're not really able to monetize this anyway but if they had a way to monetize it they would love to do this full-time like they would quit their job in a heartbeat and start making internet content if they could only earn money doing this um so that's an example of an audience we we could maybe start with manga and the way this would work would be you know we basically talk with our manga users um tell them you know what our value proposition is that you can start

earning money by creating and discovering good manga um and make make the product suitable for them first so that you can easily post you know graphic imagery you know if they're creating in the form of like a you know PNG or whatever or whether it's a PDF or how make it really easy for them to post that make it easy for them to maybe you have to maybe you can see the black and white version for free and you have to pay to see the color version for instance we'll just talk with them and figure it out out most of the actual software engineering effort has to go into these micro payments and these little product tweaks that we have to make to service the manga Community are fairly easy at a technical level um so all we have to do is talk with them and

make sure we're you know sort of actually uh you know making it uh you know tuned for their use and I think I think you know a group I don't want to say that manga necessarily would be the first user but but something like that it's a niche Community um it's outside of Bitcoin not Everyone likes mang but the people that do like it really like it it's it's a really important part of their lives and there are these content creators that gosh if only they could earn some money from this they totally would do it um so that's that's how it'll really be and so we don't actually know that core Community yet that's something we have to figure out in the next six months or so because we're still at a very technical phase we're going to launch this in phases um we we will Target uh you know

uh uh basically just people close to us first but within the next six months we'll have to figure out who this core audience es and and actually make sure that that what we're building works for those people so I like this idea of of uh going after an audience uh and really figuring out what their needs are before you know building building sort of a huge product that so I'm very product focused myself so this is sort of a a construct that I identify with um one of the challenges I'm I'm sure you've thought of is uh you know and has been probably the challenge of a lot of startups uh in the in the in the Bitcoin Community specifically uh with anything that has to do with payments is getting people on board into Bitcoin right so

getting people to have Bitcoin in their in their in their pocket or in their cell phone uh to be able to engage in these types of systems so how do you foresee uh engaging say you take the the absolutely the the anime Community uh or Manga Community uh how do you foresee uh uh them acquiring Bitcoin in order to participate in this uh in this system yeah totally so the the onboard this is a this is something that sort of plagued the Bitcoin Community the whole time right like we're we're you know we're like we think this technology is so wonderful that solves so many problems but there's there really is still like there's there's this onboarding problem where it's it's still kind of difficult to get it it's wallets

are wallets have improved a lot over the years but they're still kind of technically sophisticated um you know if a normal user has to back up their private key you've just lost like a huge fraction of the world population who who doesn't understand what you're talking about as soon as you say you need to back up you know your private key or whatever so there is an onboarding problem um uh I I'll just I'll sort of explain how how I think to solve this um I I think we just need to make it really really easy to get in and out with theat currency so you know other platforms that involve payments have uh have have an onboarding problem okay in order to get into PayPal you've got to like put money into PayPal somehow um the way PayPal actually to solve this originally

was they raised $100 million they gave $50 million I don't know if I'm remembering the numbers exactly but they gave something like $50 million to their early users and basically said you know if you just sign up um uh we will just give you $10 or $50 or something like that that is not out of the question for us you know if we raised a bunch of money we could do that like we could maybe raise money with the explicit purpose of giving it away I don't think we necessarily have to do that though uh the users that create content do not have to have Bitcoin to be paid so you can start using the app and earning money without necessarily having any Bitcoin at all on day one but if you're going to make make payments to someone like if you're investing in a piece of

content you're curating content or whatever it is um you do have to have Bitcoin well uh we just make it as easy as possible fortunately uh in the US anyway coinbase now has this uh uh uh you can integrate like a coinbase sort of widget where you can easily buy Bitcoin with a credit card we haven't tried using this yet but that's the right idea if we could just integrate like you it's just as easy as typing in your credit card which isn't that easy I think if you already had Bitcoin it would be easier to send it from another wallet but for those people who don't typing in their credit card information is no harder than buying something on any website um so if we can make it that easy then at least getting the Bitcoin is is as easy as using payments you know

anywhere else um so I think that that and then the other thing would be how do you use the Bitcoin uh for that we would we would just uh integrate with other services I like Services I like purse.io wouldn't it be cool if you could if we could just have like a buy buy this with purse.io button on our app so that when you've got money you can just basically click a button right away and buy something with it I think that would be really cool so you just have to make it fluid for the users to get on and off and then again I'll emphasize that not everyone even has to have Bitcoin to use the app if you're a content creator you do not have to have Bitcoin to start being paid Bitcoin so the onboarding problem for them is you just have to

make something that's good quality content and and you can earn money for it so today's magic word is social s o c i a l head over to Let's stock bitcoin.com to sign in enter the magic word and claim your part of the listener [Music] reward one like identifying feature about the yours project is it's um kind of you're kind of betting on on bitcoin all in right like you're not like steamate creating your own currency and you have had like blog post saying you're also not going to go in the ethereum direction because uh because you think Bitcoin is the biggest

ecosystem it's going to uh has the biggest community and that matters a lot yeah on the other side on the flip side of this argument that I can think of is U and I'm trying to be the devil's advocate here um you you have said previously on the show that uh you don't know what community you're is going to be first what community you're going to focus on right and my perception is uh different kinds of content creators need different kinds of financial instruments so let's let's let's let's take a few examples for instance if you're kind of creating video and creating video needs some kind of instrumentation around it then you

might need a financial instrument which is like okay I want to issue shares in the video and if this med video makes advertising Revenue then the shareholders that invested in in the shares of that video get paid right yeah that this is like a Proto da it's it's a dow really right but we we can't call it a DA because it's centralized across this content creator but it's essentially the financial logic of a DA yeah um something like Reddit or steam it um has a different kind of financial logic in which which there's the initial content creator and then there are sets of curators that are up voting and down voting things and you want the initial content creator and the curators to be

paid so that's a different kind of financial logic right maybe there's a third kind of financial logic in which um some content creator needs to buy specific equipment in order to do his stuff and this guy needs loans so can you crowdsource loans to this content creator yeah now now you come into this space where you realize different content creators have different financial needs and what seems to me the case is because they have different financial needs ethereum might be a better platform for it because using the smart contract architecture all of these financial needs could be met whereas bitcoin's restriction of scripting

language would not allow for many kinds of financial instruments to be expressed well so why did you go for with Bitcoin rather than ethereum yeah so that that's a really good question I mean I I'll give you the reason here so we've been you know I I guess part of it is the basic answer is very simple you know Bitcoin has the biggest economy it is the most useful it's the most liquid you can easily get in and out of Bitcoin relatively easily compared to the other cryptocurrencies a lot of the other cryptocurrencies in order to get in and out of it you got to go through Bitcoin you know you got to trade your Steam for Bitcoin before you can get dollars um that I don't know if that's that's not true for all of them but it's true for some of them um you can do things with

Bitcoin you can buy things there are many more Merchants that accept Bitcoin um you know more people know what Bitcoin is the audience is just bigger like if you you know the as small as the audience for Bitcoin is relative to say Facebook or something it's way way way way bigger than any of the other ones um so it really just has the largest economy so that's purely at like a sort of social economic level it's just it's very fluid so it's true that Bitcoin doesn't have the technical features that ethereum has but it's not like it's impossible to do those things with Bitcoin it's just harder uh and my sort of stance is my prediction is that all the things you can do with ethereum will eventually happen with Bitcoin just later just when it when it when you need it right now we just need money you know

all these financial instruments are really sort of valuable and they're valuable for the right uh you know right people so you know let's let's run through this how this would work on our platform so wouldn't it be cool if there was a way for someone to like loan money to another person that if you are buying audio equipment so there are two ways you could imagine funding this one would be debt where you know someone just gives you the money but then you have to pay it back with interest okay uh that would be cool if you could do that on this platform uh that would that's totally a way to get uh you know to to you know use this this funding mechanism or financial instrument uh to you know uh sort of solve this problem for someone another uh thing would be Equity

uh where rather than give them like a loan you are uh actually investing in them and now you own 10% of you know of ownership in that either that piece of content or their company or whatever it is and you get paid out you know if there's a dividend payout you get 10% of the dividend payout something like that so Equity is another another kind um there are all sorts of other things you can do as well like where when and and and how you know when you pay for things who gets what fraction of the money and stuff like that so you can play with these variables and really come up with you know unique solutions to problems that some people would have but we can do all that with with Bitcoin uh we not everything necessarily has to be done on a decentralized blockchain some of these

things are just normal contracts um you know if if it's the case that you can just loan someone money then you can just loan the money it doesn't necessarily have to be something that's on a blockchain if we decide it needs to be then we would have to solve that problem for Bitcoin I think in we would some cases you do want it to be on a blockchain so we would have to solve that problem which is non-trivial uh there is you know root stock is trying to do exactly that the side chains people are trying to do stuff like that um there are other way not everything requires necessarily A blockchain or a separate chain or something like that you can do a lot of things with just normal smart contracts on bitcoin they are limited compared to ethereum it's not turn complete but our microp

payments technology is all based on uh Bitcoin smart contracts so there are probably other things you can do with just Bitcoin scripts so the the simple answer is you know Bitcoin is just the biggest and we're starting with payments first we we I do think if we're successful we're going to want to really play with all these other financial instruments but that'll be a ways down the line when we have the resources to solve it on top of Bitcoin so there's the benefit of Bitcoin is that it's a little bit easier to do it now but it will be a little bit harder to do those more sophisticated things later um so that's true um I do think you know there is room for experiment here I mean like you know if imagine you know we we would change our minds if if ethereum displaced Bitcoin now I don't think

that's going to happen I think Bitcoin will probably stay the largest I think there's huge value in being the go the internet which is effectively what Bitcoin is it doesn't have to have all the features that the other ones have because the fact that it's the largest and the most stable and there's a finite supply of it actually are the most important features um and it's the most secure you know the most proof of work all these features are actually really really important and actually I think give it the most value but uh you know if if if this argument stopped working in the future because ethereum became bigger we would find a way either to switch or to accept ethereum if that happened I mean it would you know like as if that actually were the case you know we want to do the the thing that's

the best for our users so it could be that ethereum would end up being better I don't see it playing out that way I mean I think for now we basically had to pick um we can't do both now uh we're limited with resources I think a the Bitcoin being the biggest is a really strong argument to do it and then I'll just add one other thing which is that by using Bitcoin we're really able to offload a lot of really hard work onto other people so we didn't invent the lightning Network we're we're implementing it we're writing software but we didn't have to figure out how to do it because other people figured that out huge to us that other people were able to make that giant intellectual contribution uh to create the lightning Network same thing with all sorts of advances that are happening right now in

Bitcoin core segregated witness was just like merged uh it's not it's not live yet on mainnet but it will be that's a huge Advance that's going to be really really useful to everyone in the space that we didn't do other people in the space did it and Bitcoin has the largest sort of you know it's the largest economy not just of businesses and stuff but all the developers and everybody in the space working to help solve these problems so it's I I think I think this will be the right move but it's it's you know it's hard to predict the future with accuracy but any case the fact that it's the biggest is is H is the reason let's take a short break to talk about Jax Jax is a multicoin wallet created by the people at the central now in the past if he had a whole bunch of

cryptocurrencies it was a pain to handle them you either had to leave them on an exchange which was insecure or you had to have all these different wallets which was a hassle fortunately now with Jacks those medieval days of darkness misery and suffering are over Jack supports multiple cryptocurrencies and new ones are being added but it's not just storing cryptocurrencies you can do with Jacks but you can also exchange them directly from with inside the wallet thanks to their shape shift integration and since there's only one seed JX makes it super easy to back up and sync to the other devices Jax works with Windows Mac OS Linux Android iOS and has browser extensions for Firefox

and chrome so go to ja.io that's jx. to download the wallet and get started today we'd like to thank Jax for the support of epicenter so you mentioned the lightning Network so then let's uh I guess let's get into the technical components of uh of yours so can you tell us um broadly what are the technical components of yours how what is the stack the technology stack look like and how does it leverage uh lightning Network in order to make micro payments so that I'll just give you the the text tack we're writing everything in JavaScript it's no JS um the reason for this is this is the the best way for us to reach consumers because at the end of the day we're making a consumer app

and we don't want to write we don't want to have to implement things twice so using JavaScript means we write the code one time and it runs everywhere so the stuff that needs to run on a server runs on a server the stuff that needs a r run in a web browser runs in a web browser the stuff that needs to run on mobile runs on mobile we implement it one time it's the most sort of you know coste efficient way to to to you know make it a consumer facing app um the the besides that we're using Bitcoin uh we are so here's how it works right now you have a integrated Bitcoin wallet like a normal Bitcoin wallet in the web app okay so when you open up yours and you have like an account um you've got the private Keys stored in your web browser in a in

in a web browser database is called index to DB which is built into all mod in web browsers now it's a real database um your your private keys are stored there uh we have a normal Bitcoin wallet working what we're now working on are the microp payments here's how that works we're basing everything off of the lightning Network we write all their papers um they are not however done and so we decided Well what are we how are we you know we basically need micro payments or our product doesn't make any sense um we think micro payments going to be huge asset and really make the difference between you know like I mean basically a lot of this content we think is only worth one cent um so like if you had to pay a dollar for it you're definitely not going to buy it but if

it's one cent maybe you will um so micr payments make a huge difference um for a lot of reasons we think it's really important that the users control their private keys so we are sticking very closely to this decentralized peer-to-peer you know Financial system where the users possess their digital cash and they're sending it directly to another user now we're basing everything on the lightning network uh it's it's uh so the way this works says in order to send a payment to another user you can open up a payment Channel with them but in most cases you're not going to want to open a payment Channel with another user you need a payment Channel open with someone who has a payment Channel open with them and it's so long as there's a route get to that person you

can make payments across these routes and the way this works is uh you basically make a payment to an htlc hash the other person generates this hash only they have the secret you make a payment you know to like if Alice is is paying Carol via Bob Alice makes a payment to Bob Bob makes a payment to Carol uh uh Carol shares this secret with with uh with Bob to prove that Bob made a payment to Carol then Bob shares that secret with Alice to make sure that Bob to prove that you know uh that that he made the payment and then Alice uh sort of now that Alice has the secret they're able to uh they're able to spend the money with with the secret so it's just like lightning Network it's it's really the exact the only differences are things like um

uh the actual details of like the message structures and things like that I'm not sure the scripts are exactly the same fact I think the lighting people stopped using htlc hashes last I heard they're doing something different so they've diverged they're not the same but it's theoretically based on the lightning network uh and then the other trick will be like a matter of you know we don't really want to make an incompatible protocol with them so maybe there's a way we can reconcile later uh but for now we're we're just making our own implementation of of the light and so I'm not exactly sure at what stage of uh in in the road map how how how close the lightning network is to being compatible and deployed you know on the on the main net can you give us an idea of how long it will take

until the lightning network is uh is live and available yeah so let me I'll give you some more background there so what what we're doing is not quite as sophisticated as as the real lightning Network they're making something that is decentralized in every way we're not making something decentralized in every way we're making it decentralized the ways we think are the most important while also balancing launching sooner so we will probably be able to launch well I don't want to say this for sure because I don't know what their timeline is but I'll I'll give you our timeline uh we have the logic of pay of our Network working uh sort of proof of concept stage we haven't tested it on bitcoin testnet yet we're going to test it on bitcoin testnet next that will be fairly soon I would say I'll just say a

month I mean it'll probably be earlier than a month we're pretty close um what we're then going to do is we have to integrate it into our product because we have the product working so we have to integrate the micr payments that's not trivial to integrate it into the product but you know it's it's easier than making the micr payments work so then we integrate into the product then we start launching our product to a really select audience of people to get feedback on the product itself and making sure the technology works and doesn't lose money um because of course you know you could be hacked or you know there could be just just bugs that cause people to lose money um so then we launch in phases so we're going to launch phases over the next six or so months so we start with a

really limited audience and we think just realistically it's going to take months to build up towards test it with more and more people uh test it under harsher and harsher conditions eventually migrate from Bitcoin test net to bitcoin main net and then eventually launch to a real General audience uh and that would be I'll say early 2017 is when we want to launch to a real General audience um so that's our product thing thing some things we're doing differently than lightning are are we have a messaging system that goes through our servers the messages are encrypted so we can't read your messages but the lighting Network requires that you send messages so to from user to user so we don't have a decentralized

messaging system the real lightning Network guys are from what I understand making a real decentralized messaging system of some form um so there is is goes a little bit further than we do so yeah so there are some minor differences but it's basically you know ours is I would say it's a step towards lightning network is How to think about it and we'll we'll sort of uh iterate towards full lighning network over time okay now just coming back to the technical architecture you mentioned that it was written in JavaScript and uh in OJs uh just from from a user P perspective uh let's take the example of this U manga Community you mentioned earlier you know let's say you you on board uh people from the manga community and they start using the uh the the app uh what does it look like is it something that you

install is it in a browser that like a web address uh do you have to install like a sort of you know like client in order to access the network yeah there's nothing you have to install you visit yours. Network that's all you have to do other than that it it's it's going to look and feel similar to any other web app and uh uh we will have a mobile app uh but we're not building the mobile app now we're we're not going to build the mobile app until we're done with the web app and we know that we've built the right product then we go to mobile in in that case the that there's a there's a I assume there's a server somewhere right uh it's uh it's it's not fully decentralized there's a server uh you're you're not touching the payment uh uh you know and the transactions that

happen because they happen on the browser side but there is a there's a server somewhere managing the content so we okay so the content storage is also centralized sorry to disappoint people the cont when you save the content uh it is being saved on a server uh and also we're using a blockchain API on a server so the way that you query the blockchain is not by running a Bitcoin full node in your web browser you are querying uh a blockchain API that we're running on a server so there are two ways in which it's centralized I think you know basically we're doing it this way because it's just the fastest way to Market it'd be cool to do it totally decentralized but we don't think that most of the people that are going to use it are really going to care if it's literally fully decentralized in every

way the one thing that we think is really important that we decentralize our ownership of the digital cash that's the thing we're being really that you possess your digital cash and you're sending money peer-to-peer the other things we're we're frankly cutting corners on on it and we're it it's it's centralized because it's just easier to do it uh so the content storage is stored on a server uh and we are using a blockchain API which is also run sounds really cool sounds like a really good plan to have parts of it centralized and just have the payments and monetary section decentralized um so one of the things that that comes to my mind uh listening to you is uh in this case what is

happening is people are creating content and they're posting it to a central server and then you will have some kind of financial logic by which they get paid and the users make these payments right now the success of failure of the system rests on solving the problem of attribution that I I created this particular Manga comic and and only I should be paid for it somebody else can't just post this Manga comic like take this comic from me post it post his public key and get paid instead of instead of me so there has to be some way by which the attribution problem needs to be solved and if you look at

the total web today this is a very big unsolved problem like if if if I do Google image search I see lots of great images in none of the cases do I know who really created it um so what's do you have a particular plan for solving the attribution problem or what's your approach yeah so the attribution problem is it's it's really important to us because you know we're trying to get original content creators paid we also think you should be able to be paid for discovering content but let's not confuse discovering with creating you know just because you found a gif on the internet doesn't mean that you made it so this is a really important problem to us there are there are a lot of techniques that we're going to employee

to address the issue um I think that you know it's it's really hard to thoroughly solve the problem I'm not sure that anyone has ever thoroughly solved this like in a complete way uh because it's really difficult like if you have a piece of information how do you know who the author is like you can always just copy an image and you know like you don't necessarily know so let me give you the ways that we're going to address this issue um first of all I think this is the most important one we need to create a culture of original content creation we need to make sure that we're not you know encouraging people to copy other people that's wrong that's immoral if you're if you're claiming credit for the work that someone else created you know that is it's against our terms of service first of all now having a moral

stance there doesn't do very much because I think people that don't care are just going to do it anyway so we have to have some technical means uh to to to solve this so the way we do this is severalfold just like any other media website one is you know when it comes to just complying with the law we actually we have to follow uh dmca which is where like if a if a copyright holder uh in you know sends us a uh dmca takedown we have to comply uh we have to have a process in place to take down the content so if somebody posts a Hollywood movie we have to take it down and we have to have that process so we'll have a a way that they can communicate with us to take down the content we'll have to take it down um uh

but I think there are better ways I don't necessarily think that that dmca really solves the problem either so other ways to do this are imagine your linking to some other piece of content on the internet there are technical ways we can at least make it harder to copy content if you have to embed your public key in a piece of content uh on the internet so imagine you're linking to a YouTube video your public key has to be in the video if it's not in the like in the description if it's not then you know you know it could be that you're copying someone else's video so if you're really the author you can go into the description and add your public key to it so that we know it's yours right at least you you're linking to something that it's it's a video that you create

on YouTube now of course you could have still uh copied the content uploaded a video separately and the only way I know how to address that is twofold one is users need to be able to flag content as violating copyright so that there's a bit of a human-powered uh solution uh to like you're just flagging it the other answer is we have to uh do data analysis and this is something that the big social media companies do like YouTube they scan the content if you're uploading a song that is you know whatever it's some famous artist um they scan it and they can tell hey this is the exact same song that somebody else created and it's it's known you know it's a you know whatever it is it's owned by somebody else so they then they delete it so it's human

powered plus something automated and then we also have to in complying with the law we'll have you know like we have to comply with dmca but then the most important of all these I really think building a culture of people creating original content uh we need to make sure that you are rewarded for doing original content and you're banned or you know your punished uh for for copying in content and making it look like you you know created something that you didn't create yeah so I mean the copyright problem is is is is a problem that you're going to have on a digital uh medium right because it's so easy to copy data uh I mean some some people are are looking at ways that we can solve that uh you know like scribe for instance uh is is tackling that problem from the

different uh from a different point of view but um so in the in just before we wrap up here uh and it has been a very fascinating conversation uh can you tell us about your business model what is the business model for yours yeah so the business model is really simple um we're going to take a portion of the money so if you're making a payment uh we'll take a percentage so you know for for you know hosting the app uh creating creating the app and everything we take a percent we haven't decided what that percent is yet but it will be lower than say YouTube you guys mentioned you know Jenna Marbles you know she pays 45% or something like that to Youtube it'll be less than 45% so it'll be low compared

to you know normal standards um so I don't want to give a number but it's not going to be extremely low we're not going to promise super super low we're going to take something that makes sense for for our business um and so it will be sort of you know a result of computing it sort of you know rationally what percent makes sense so we'll figure that out later but I think that's the simplest thing there are other ways we could monetize this um there are ways we maybe could reduce you know the fees to to zero like the fees of the company if we could monetize the data or add ads or something like that I'd really rather not add ads I think there are so many ways you know to uh uh you know if people have money on the app uh why not

just take a percentage like we don't need to add ads ads are annoying to people I'd rather not have any ads um and then uh you know maybe monetizing data but again I'd really I'd really rather explore these sort of financial techniques that are empowered by our technology uh which haven't been possible I think the reason why most people use ads like Facebook and Google is because uh it wasn't possible to monetize peer-to-peer payments but now it is so we can just you know earn money directly because people are just paying us stuff so that's it it's taking a percentage of payments cool so before we wrap up where can people find you you know if there is anything that you'd like people to do uh this is the time to tell them to do it sure yeah so our website is yours.

network uh you know can sign up to get a get an early preview uh if you want add your email address uh you can find us on Twitter it's your network um you can find me personally on Twitter it's Ryan X Charles uh and uh I'm also on medium uh ryanx Charles times.com is where I uh write articles and stuff um so yeah so your. Network and uh you know we hopefully some people would be interested in this and want to sign up for our mailing list well I I certainly signed up so I'm looking forward to uh seeing uh seeing the the the initial uh versions as it comes out so you can try it out and give it a try uh well thanks a lot Ryan for coming on the show it was a really fascinating

discussion about a topic that uh I I always find is kind of I mean personally interesting since we are content creators and uh monetization is um is something that uh well we do but we don't um get to live off of so uh it's it's nice to see there's initiatives out there uh trying to to solve the issue of monetization with cryptocurrency thanks for coming on yeah thanks thanks for having me it's been awesome and thanks to our listeners for tuning in we are part of the let's talk Bitcoin Network you can find lots of great shows on let's talk bitcoin.com uh you can find us at enter Bitcoin bcom as well as on uh YouTube at youtube.com/ orbitcoin and of course you can always find us on your favorite podcast app or

SoundCloud uh and if you're interested in uh leaving us a review to get one of these fancy t-shirts you can do so uh by leaving us an iTunes review and just sending us an email at show EP bitcoin.com below us know you've done so so thanks so much and we look forward to being back next week [Music] [Music]