EB26 - At Bitcoin Decentral Toronto

Transcript

Hello and welcome to Epicenter Bitcoin, the show which talks about the technologies, projects, and startups driving decentralization and the global cryptocurrency revolution. My name is Sebastian Couture. And I'm Brian Fabian Crain. Today's June 29th of 2014 and thanks very much for joining us for episode 26. Today's a bit of a special episode because we don't have a guest as usual. Instead, we'll be showing and or playing a conversation I had in Toronto with the guys from Bitcoin Decentral. I've been kind of on a North America trip. I'm about to head back to Berlin, but I was also stopping by Toronto and talked extensively with the guys there.

Yeah, but before we get into that, there's a couple of things we want to talk about. So we we did a interview with Mike Hearn last week. Which was very exciting. Yeah, which was super exciting and the response that we got from that just kind of both, you know, took us by surprise. I was also traveling last week. Just got back today actually. It was in the south of France with some friends and Brian, you sent me a message you know, saying that things were kind of blowing up on Reddit and we also got covered on CoinDesk. So it's by far our most popular episode and I think that the discussion on Reddit is kind of a testimony to you know, the well, I mean to what Mike was saying is that

there's some problems right now in in the Bitcoin core development and it is kind of worrying. So I think people are taking it seriously. What do you think? Yeah, I mean I I guess you know, Mike said some things that were controversial and are controversial and they're very quotable. So the Reddit post was I think Mike said, you know, we are in a state of crisis. It's a crisis period for Bitcoin development and it's the development on the Bitcoin core essentially has completely stopped and of course because Mike is such a well-known and uh recognized person, uh people posted on Reddit and there was a huge discussion about that. I mean, people disagreed with him, some people

supported him. It was a very controversial. Um So So there's definitely people who don't view it the way he does, but uh it's it's an important topic and it's created a lot of conversation. I know on Reddit there was more than 200 comments uh kind of discussing this. These statements by Mike Hearn and you know, a lot of people weighed in from like Mike Hearn himself to Peter Todd and other guys. I I I had never really heard of this problem with the core development, right? So what's interesting about this is how it kind of just took me by surprise and maybe took others by surprise as well. I mean, we see everything uh you know, the infrastructure's being built on top of Bitcoin, but in the meanwhile uh

well, what Mike's point of view seems to be is that there there's underlying problems in the core development. So will that eventually catch up um to the all of the innovation that's happening on top and will you know, Bitcoin continue to be a good platform to develop on if there's no um development being done at the core? I guess it's kind of the question uh that we're asking ourselves. What I thought was also interesting is one thing Peter Todd said on Reddit. Uh and so his point was that the problem is not that people aren't working enough on Bitcoin or there's not enough resources on Bitcoin, but it's that we simply don't know a lot of like how to do

things because like the science isn't there. So you know, for example, one thing we talked about with Mike Hearn as well was uh transaction fees and I kind of I kind of think we both agreed and a lot of people agreed that there's something needs to change there. But how exactly that can be done is is kind of unclear. So there's a lot of there or another thing is the centralization of mining, you know, is obviously a problem. But, it's very unclear what the solution is. So, I think his point was that what was was actually missing is that the sort of science and like actually the knowledge of how to proceed. I saw in another conversation on Reddit that Gavin Andresen actually blamed Peter Todd for the lack of development because he keeps

uh I think he also criticizes developers a lot. So, it is it's not entirely clear what the problem is, but it's quite clear that if you look at the whole Bitcoin ecosystem, all that money flowing into companies, there's actually very little happening, or you know, very little of that money is going into Bitcoin development itself. Well, I guess that just goes to show that the you know, the internal conflicts which he talks about are actually there. Because if these guys are kind of going off on on Reddit. I mean I mean, even if you looked at antagonism against Mike Hearn on Reddit, it was very strong, too. There's people you know, some people were being very

negative about him. People are So, so this that's definitely there. There's no question. I yeah, I wasn't aware uh of what Mike Hearn said, which was that this was the reason why uh some of the Bitcoin developers, and in his view, like everyone except Gavin Andresen, aren't actually working on important things because even if even small things, but important things, create a huge controversy. So, yeah, it's a interesting worrying certainly.

And um yeah, well, hopefully this will perhaps his own project Lighthouse will be a solution to this. I don't know. Yeah, so if you haven't listened to it, check it out. It's on our SoundCloud page. You'll see it there. Episode 25 with Mike Hearn. Before we kind of move on, I want to briefly talk about documentary, which is called Bitcoin: The End of Money As We Know It. And they are running a Kickstarter campaign. And I I've talked with the guy who's doing the documentary. His name is Torsten Hoffmann.

And he's a German but living in Australia. And they're now running this Kickstarter campaign. It runs until July 12th. Now, the documentary is meant for sort of a general audience to introduce them to Bitcoin. He does a lot of interviews with kind of well-known Bitcoin people like, you know, Andreas Antonopoulos, Roger Ver, Nicolas Carey, and others. And, you know, after talking to him, I think it looks like a great project. What's also cool is that some of the interviews he did, at least two of them, are available in sort of the raw footage on YouTube. And the one I really liked was with Matt Miller. I'm sure many of you

know Matt Miller. He's that bald guy from Bloomberg who, you know, he lived on Bitcoin for a a week purely. And he's been covering Bitcoin for Bloomberg. And he's been doing a really great job. And so, he talks to him like, "How did that happen? How did he get into Bitcoin? Like, how has been his interaction with Bitcoin community?" It's a really great interview. Um so, yeah. I think, you know, check that out. I mean, it looks like a great project. If you want to support it, there's a few different options. You can basically get the basic reward.

The $20 reward is just to get the movie, you know, you get the streaming link and bonus material and things like that. What's kind of funny though is if you get higher reward, there's, for example, with the $85 reward, you can become a trillionaire. So, um what that means is they give you banknotes and they have like one from ex-Yugoslavia with Nikola Tesla on it, and then a Zimbabwean 10 trillion dollar banknote you can get. So, I guess it sort of um is a reference to the deflationary aspect of Bitcoin they have these banknotes of super inflationary currencies that you get as a reward if

you kind of give a bigger support for the project. That's really funny. It is It is pretty funny. Yeah, I I mean I the Tesla thing is cool, though, because Nikola Tesla himself was such a, you know, iconic figure. And of course they have a 10 trillion dollar banknote is kind of insane. Uh yeah, if you want to check that out, just Google Bitcoin End of Money and Kickstarter. Or alternatively, the link will be in our show notes. So, you can find it like that. It's going on till July 12th. And then the funding's mostly there. I think also the movie has been mostly shot. Uh so, there's this not one of those Kickstarters, at least I think it's not, where, you know, you sort of have to

worry whether it actually gets finished. So, I think this this will happen and it's going to come out pretty soon, I think at the end of the year. So, I just want to take a minute to talk about Coin Summit. As you guys know, we will be at Coin Summit it's coming up real quick, July 10th and 11th. We'll be doing some interviews there and listening to some talks and also producing content around the the conference. So, if you want to go to Coin Summit, you can request an invite at coinsum.it. Yeah, and also let us know if you're there, you know, we can meet up.

So, you can meet meet your favorite podcast hosts. As So, just very briefly before we get started with the main content, Bitcoin Decentral is one of quite a few Bitcoin centers in the world. I've seen a few now. I've seen you know the New York one and and some others. And I think Bitcoin Decentral or they actually changing is changing name to Decentral in Toronto is by you know the most impressive ambitious project that there is in the space. It's a big house four-floor house I think like 500 square meters or something in a prime area in Toronto. They have meet up there, co-working space, accelerator.

And so I I was visiting Toronto kind of on my way to a wedding in Chicago because I wanted to see Bitcoin Decentral. And I met I met up with the guys there and then and then interview with the guys or some of the guys there. And the guys that are in this conversation are Anthony Di Iorio. He's the founder of Bitcoin Decentral. He's also founder of Ethereum. He's a executive director of Bitcoin Alliance of Canada. And he's also founder of the Toronto Bitcoin meet up. The other guy is Arthur Cory. He's the managing director of Decentral Accelerate, which is their incubator or accelerator. Then there's Ethan Wilding. He was a former philosophy

professor and now he's sort of the resident philosopher there works in all kinds of things and also involved in Ethereum. And then there's Michael Perklin who's a Bitcoin consultant, a director of Bitcoin Alliance in Canada, and and the founder of a cryptocurrency certification consortium. Like all all those guys will you know talk in in the interview and will introduce themselves as well, talk more about the project. The main focus was sort of the accelerator. And their project or their goal to incubate and accelerate a lot of startups in Toronto especially, startups that focus on decentralized application and those kind of Bitcoin 2.0 protocols.

So, enjoy that. All right. So, I'm here in Toronto visiting Bitcoin Decentral. Very excited to be here. I've heard a lot about Bitcoin Decentral. And uh since I'm working on setting up something similar in Berlin, I was, you know, extremely excited to visit these guys. And I'm sitting here with uh Anthony Di Iorio, who uh started the center and uh with his whole team. So, perhaps uh to start this podcast, we can go around and have all you guys introduce yourselves. So, do you want to start off, Anthony?

Sure. I'm I'm Anthony Di Iorio and uh we opened this building on January 1st. And I do the Toronto Bitcoin meetup groups. Well, a bunch of us are working on it now. We do it every week. Uh I work with the Bitcoin Alliance of Canada. I work with Ethereum. Crypto Kit. Decentral. Yeah. And this is I'm Arthur Cory. I'm the managing director here at at Decentral. And uh I came to one of Anthony's meetups. And uh then I couldn't help but devote my life to this to this amazing emerging space. So, in the building where we're setting up an accelerator uh supported by a venture fund. And that's fueled by a a co-working um

uh ecosystem and all events and all all kind of community things we're working on. Uh my name is Michael Perklin. I am I'm I'm also here with uh I'm with the Decentral crew. Um I I wear a lot of hats in the Bitcoin space. I I work alongside Anthony with the Bitcoin Alliance of Canada. Um I also work alongside him with uh C4, the Cryptocurrency Certification Consortium. And um I have my own uh company that's based out of this building, Decentral. Uh Bitcoin Solutions. Uh we are a Bitcoin security uh consulting firm. Um all of these these hats are uh are are are fun to take on and off. I'm working here at

the at this space with all these bright individuals. Uh my name's Ethan Wilding. I used to teach philosophy at Wilfrid Laurier University and University of Waterloo. And I became obsessed with Bitcoin and realized that I wanted to just immerse myself in the space and now I work here at Bitcoin Decentral. So perhaps we can get started off by talking about you know the project you guys are all involved in and you just speak on Decentral. So how did you guys get started? Uh so from doing the meetups for a couple of years in Toronto, uh having a space of our own was always something that I had my eye on because doing the doing meetups at a bars or doing them at a louder places is always

the it's not the ideal setting to have presentations. So to get a dedicated space in Toronto is is very difficult. Uh but I had to have my eye on a location where we could do the meetups, where we could do a co-working space and eventually an accelerator program. Just a place where people in the space can get together and ideas can flow and uh I realized I was hanging out at coffee shops previously with with you know four or five people in the Bitcoin space. It was really exciting and I figured a whole building where we can get people just immersed in this amazing technology that's Bitcoin, decentralized applications and um blockchain technology and have a building where we all of us can come together something that that I had wanted to do for a while and then it finally came and I was able to do it

earlier this year. And uh when did you get started with the meetup? So you said a couple of years? Yeah 2012. Uh near the end of 2000 Actually no, just in the fall 2012. Okay yeah. Yeah, and we we do every week now, every Wednesday Bitcoin Wednesdays in Toronto. I think consistency is really important. So people know without even having to visit the meetup groups or anything, they know that every Wednesday they can come down here at 7:00 and you know be with other people that are involved in the space and we're doing a lot more or the plan is to do a lot more presentations. We're doing Skype calls now for people in the space.

Uh we had Tatiana Moroz on yesterday talking about Tatiana coin. Um and we get we usually get really good turnout every week. So, I encourage people to do meetups and try to be really consistent with them and try to do them as frequently as possible. Even if you're getting five 10 people out to them. Um Yeah, so that that's how where the space came about was from the meetups and then wanting to have a whole building uh dedicated to Bitcoin and and decentralization and blockchain technology. Did you have the accelerator in mind at the very beginning when you started the space?

Uh yeah. We wanted to have It wasn't just to be a co-working space. The plan was to have an accelerator program. I didn't know much about them. I mean, I knew about I knew about um uh incubator spaces, but accelerators, which are, you know, fast-paced shorter-term periods uh um sets of deliverables that then graduate from after say a 3-month period. So, uh this is where Arthur came to one of the meetups and he had run the first uh Michelle He talked a little bit more about what you've done in the space.

Sure. I came from the West Coast. I came from Vancouver, uh British Columbia. And that is a short plane trip from San Francisco. So, Vancouver had a really interesting ecosystem that was a little bit ahead of Toronto even though it was smaller. And so, I had a taste of that and then when I came to Toronto, um I realized that there just wasn't happening here yet. Of the You talking about the accelerator ecosystems? Yeah, startup ecosystems and how startups connect with uh investors to find financing to grow their companies. And that's really what an accelerator does. So, I started the first here in town and uh because of its success and the model that I created around that, which was actually um

supported by government money. After about 2 years, uh I found that it was a successful business on its own, but it wasn't really scalable as was. And I wanted to go on and do something bigger. Luckily, I I I saw Anthony's vision and was able to plug in to that at the right time because the decentralized sector, the decentralized app sector is now seeing more investment than any other particular tech sector. And the interest around it is global and phenomenal. So, we're we're getting in touch and you know, being contacted by some of the thought leaders around the world. Our network is just fascinating and we're talking to amazing people every day and

we're seeing we're seeing real invention happen. You you said it's more investment in the decentralized application than any other not actually investment happening as of yet, but I would say interest. Interest. The buzz around it is definitely And the big day of coins and and Yeah, is more than anything else that you that you're seeing. The some of the newest funds popping up in the valley are related to Bitcoin. It's It's interesting too that you guys are focusing on the decentralized application side of it because I I've also talked with for example the Plug and Play people and that's not their focus, right? Their focus is I mean also more like the wallets, this

kind of infrastructure side. The the vision that we had was to not make it anything to do actually with Bitcoin, to focus on decentralized applications, but I think we're also going to look at you know, the things in the Bitcoin space that do stand out, but for us it's about decentrali- decentralization. In fact, we're changing the name and we've already changed the name to Decentral. It's not going to be Bitcoin Decentral anymore. The space will be Decentral. That's a brand that we're going to go with. But it'll still have close ties to Bitcoin as well. But I think just being in focusing on decentralized applications, You know, it it it it it's a little more appealing to investors, I think, to to give them the vision of not just the Bitcoin space, but saying, "Hey, there's

this technology, this blockchain technology, uh this consensus open transparent system, and you can say, you know, it's like what what Bitcoin has done, but it's going to be so much more than that." So, when as soon as you start talking a lot about Bitcoin to some people, they don't They're like They already They can dismiss it, but I think it's the technology, the underlying technology, which is what can get people's attention. And that's what we think is exciting, that's what we think there will be um there will be so much more than the Bitcoin space. Um and can you tell me about the progress with the fund? Like when are you getting started or I know the first batch is not here yet, but you told me you've already found companies.

We have. Yeah, we have a full cohort chosen uh because of the legal aspects, you know, we're being very careful in in structuring the fund, and we're going to some very senior and experienced advisors. We're talking to people from around the world on on what the best way to approach this would be. We'll be accepting a mix of fiat money and Bitcoin from investors originally in the fund. That's the plan. That's the plan, but it's it's really interesting. You have to sometimes get the chicken and the egg syndrome where you have Well, this is how we want to do the plan, but do the investors want the plan set up like that? So, sometimes you want to reach out to the investors, but you don't know who's actually committed, and you want to tailor your plan over to the way the investors are. Depending if

you're going after institutional investors or going after high net worth individuals. That's right. So, both of us not even being involved in the finance sector or or not even managing or having a fund before, because Arthur uh his accelerator program was not a fund-based, it was just direct investing. That's right. We our intention was to make it fund-based, but with the Canadian landscape, we were given government money that we couldn't It was just a fantastic gift is what in built a portfolio of 18 companies and but uh this what we're doing here is really kind of it's the model that came out of the states. It's that venture capital, you know, private entrepreneurial model.

And uh are your investors mostly Canadian or from overseas? We are probably not looking at at just doing it in Canada. But it's still on the table. There's a lot of a lot of decisions to be made, a lot of to deal with what the investors want uh with regulations in different areas, with cost once you start doing a global fund and you start saying we want a European investor, American investors. Setting up, you know, limited partnerships in those countries and compliance. It gets really expensive. So, um we're still we're still investigating it. But what I think we we have decided is that we'll be working with a finance team um to fit to plug some holes that that our partner and I don't have in that sector

that are going to help us to um investigate the funding, get the term sheets developed. So, it looks like we'll be forming a partnership with some other individuals um which are going to help us at at that end. You can imagine the complexity working in in this space where um you know, there's an association whether or not we take any companies in that do actually have what would be defined as cryptocurrencies. We are working in a decentralized asset space. So, we want to make sure that our investors are protected no matter what happens to the regulatory environment around the fund.

Yeah. And uh you you mentioned you're taking fiat and Bitcoin. Is is one of the reasons that some investors are only allowed to put in fiat? Do you have any kind of that challenge? ideally we'd like to have both accepted, but it really is going to come down to the investors and the and the individuals that we decide to work with. We could come down to foreign institutional investors that might not have Bitcoin. They might only have fiat and may not want to deal with fiat. So, it's we're not exactly sure, but I think we would like to be in the space where we are accepting Bitcoin as well, but who knows how it will turn out.

And then perhaps what about the startup side? So, we were talking about on the master side. Are the startups going to be primarily from Canada or are you also trying to attract American, maybe European startups even to relocate here? Yeah, so we would like to be global and we've done I'm not sure how many interviews we've done yet, but we've had about 40 or so applications and we've interviewed 15. Yeah, and they're surprisingly spaced out. Yeah, we've had guys exchanges for starting up in Mexico. We've had Oh, yeah, all all over the world people have applied and what we do is we form a panel and we have, you know, as many people as possible we can on this panel giving advice to the teams and seeing if they're at the proper stage to come into the program and we definitely

have some teams selected that we would like to take part. It's a matter of now structuring the fund, getting the investors and you know, we're we are hopeful within a month, month and a half that we can have some the first cohort teams working as the space is ready for them to be here. Basically, our goal is to really just be launching decentralized app startups out of this space like like from nine to possibly more at a time. Yeah. So, you can imagine the effect that's going to have on on the city and and the world if there are that many of these type of disruptive companies being being created.

Yeah, absolutely. Is it I don't know how it's in Canada, but is it easy to get companies, maybe get visas for people who want to relocate here and We've looked into it. We've seen that most of the accelerator programs are interested they kind of focus on the country that they're that they're in, but we've done some research. We have an in-house legal counsel who's done some research and we've seen that, you know, it's not We don't think it's going to be an issue to get the visas for three-months programs. I think one of the main things is they need to have a company already established in their country. Yeah. And there are some things to do, but we've looked at it and we think that we're confident that we can open it up to global market. And then, you know, we also have plans to franchise the model

that we're doing in the future, as well. Um and we we have a a mentorship base right now already over 100 people, which we would want to continuously uh increase. So, right now, we have a lot of the thought and the top thought leaders in the Bitcoin space, as well. A lot of people that aren't in the Bitcoin space that offer, you know, different aspects um of their profession that they can contribute to the teams that are coming in. And we, you know, I've got a a thousand mentors in my mind that I'd like to have to support five or more franchise locations around the world. Yeah, and I think that would be uh very exciting. I think I'm sure Like, for example, I've I've been looking, you know, I often talk with you about this uh looking if there's something possible I can do in Europe. And uh I know this

that so far, I guess all the funds are in the US. I guess you you guys will be the first one. Well, there's actually one in Australia that's just started up. Yeah, there's actually a large one that started up in Australia. Um and there's been tons of interest. I I probably had 10 to 15 different countries, and even multiples in different countries that have approached me to say, "Hey, once you get this off the ground, I'd love to do a a similar setup." Because I believe the space for Decentral here is it's a um it's it was a carefully planned model of meetups, getting people together, getting them excited, getting them in the co-working space, fun getting teams formed, reaching out to entrepreneur communities, reaching out to developer communities, getting them excited about the space. Hopefully, get them all together to start forming companies, putting them up in the accelerator

program, pushing them out, hopefully, to put them in front of investors, giving them the mentorship that they need. So, it's a whole, you know, process with Decentral here, and I hope that people can say, "Hey, here's a turnkey package that I can use uh in my uh city." Are you guys agnostic regarding the protocol? Cuz, you know, people are building on all kinds of different, you know, Counterparty or Ethereum or Nxt. I know I know you are involved in Ethereum as well. Yeah, both Ethan and I are. You are as well, okay. Yeah, I work agnostic here in in Decentral.

Yeah, we don't I I don't want to tie ourselves down to any one particular platform. I think there's certain platforms that do suit certain needs. Like, for example, we had Tatiana uh discussing yesterday why she selected Counterparty instead of using Mastercoin for her coin she put out. So, there's going to be ones that work. Um some that offer certain features that that other ones don't. So, I think it's important to be agnostic in this space and go with whatever works at the time. And are you interested mainly in developing on the applications that are being developed on top of those or also perhaps in the development of such protocols themselves?

Well, I think I think both, but I think our focus will be on the applications on top of the platforms. What's great about this space um uh Decentral is that uh really any startups or any companies can uh can work here out of the space and you have instant access to people who are doing uh exciting things in this space, whether it's uh employees of Ethereum who are working out of here or employees of um really anything. I mean, uh uh my company, Bitcoin Embassy, um when we got started out of this space, uh it was great to have a desk available. It was great to have um these resources available and it really helped launch uh launch my company and uh the fact that uh as Anthony mentioned, it's completely

agnostic what what regardless of what decentralized technology you're working on um or working with, as long as you have uh a place to to get that work done and to tap into the to the minds who are making great waves in this uh in this industry, it it's uh it's excellent to have. And when you're passionate about this, you're attracting other people depending on the whatever field they're working in. And then they all seem to come in and get excited about, you know, Central and the Vegas. And the Bitcoin ATM brings in a lot of interesting interesting people there. Yeah, and that's been successful.

It's been good. We have the first Bitcoin ATM in Toronto. The first one made by the Ottawa company BitAccess. Yeah. So, made in Canada? Made in Canada. That's right. And yeah, it's been it's been good. And I trust people in as well and then they're learning about Bitcoin. We One of our great tools is Why Bitcoin Magazine as well, which is amazing place for people to learn about Bitcoin. So, we're handing those out a lot. Getting people their first wallets, giving them the magazine to learn a lot about Bitcoin. Can you Can you talk at all about companies that are going to be part of the first cohort? Is that um We can't uh say specifics as yet cuz we haven't officially officially uh invested in them. But um I can say that they're

We've got our We've got our eyes on a few of them. Some are working or they're targeting the Ethereum platform. Others are are um We we We have some Yeah, what else can we say about them? But it's about us getting the fund structured and being able to offer them something and and hopefully they're around still by the time we're ready to do that. So, we definitely have our eyes on some but I mean the best ones are going to be The thing that surprised me most is that they're really creating things that are real world related. They're actually um like one of them has a hardware component that will be uh you know, it's going to be out there and it's a real world. This not This is not just an online business. It's related to the

blockchain, which is very cool. Yeah, that is cool, yeah. Yeah. And can you talk about the fund size? Or like how are you Yeah, we've got two options. Either we're going to go big and that's going to be So, our our initial plan was to have a fund and have an accelerator program that does two things. It actually invests in companies and invests in the currencies and the token systems associated with the decentralized application companies coming through our our our program. So, we thought that that was a great hybrid model. Um it's something that's never been seen before. So you have a traditional investment like Techstars or where they'll take a percentage of the company and invest in the companies. But then we're also seeing the model like um the Bit Angels fund

Yeah. which is David Johnson and Turpin and and I think Brock Pierce is part where they're they're investing in the token systems. They're not really actually focused on the companies, they're investing in the token systems. So we thought it'd be an excellent kind of put the two things together. But now we're realizing that there are other issues to to deal with when you have investors investing in currencies as well as the companies and it adds another layer of complexity. So if if the ideal situation for us would be a fund um somewhere around the $50 million mark where we could also invest in token systems and in the companies and then franchise and use a global fund to fund the franchises and use the mentor network to mentor the global the franchises. However, uh if we decide to just focus on Toronto

and get it off the ground, we're probably looking at maybe a $5 million fund and just focusing on the the cohorts and the teams out here. Can you talk a bit about those complexities if you invest in both the company and the currency? Yeah. Well, some investors won't necessarily want to invest in the token system but they'll invest in the companies involved with the several applications. So it might be a matter of us splitting the fund in two and having a separate fund for the Because some investors have preferences. Yeah, and then it comes down to tax comes down to their tax situations. It's really it's not as easy as it as we thought. And you'll have you might have four different investors that have different needs and have would have want you to structure the fund in certain ways to to

to so it's better on their on their their taxes. It's it's it's quite complex. So the easiest path for us might might be for right now to come up with a traditional model, one that's proven, get it structured, and go with that and then maybe introduce a second fund for the token system cuz I believe we are in the position here that we have the knowledge of the space. We have the knowledge of what seems to be coming out in in the next generation decentralized application space where we could probably make pretty good decisions on the currencies and the token systems that people want to get into it, but they don't know where to put it and we could offer the guidance.

And it's as Bitcoin was these of course these these tokens will be you know very high return investment that would it's different than startup equity which is startup equity is normally a safe investment now with the with accelerators. You'll see good accelerators creating return of about 10 times in 5 years. And the token systems offer another another way to to you know offer value to the investors. It's an expert it's a it's it's a fund that needs expert management.

Yeah. So I guess with the if you if you are focused on investing in the companies so then does that limit for example can they still do open source software or will then the risk be too big that somebody just That's a good question. blows it and That's a very it's a very good question and something I'm struggling with um uh with my with my one of my companies CryptoKit is there's people coming out and working on in collaborations on open source software projects which is great and it's going to help the community, but there are also possibly ways to monetize certain technology too. So I think it's a we probably bring in companies that do

offer either team that is a phenomenal team and has some type of competitive edge or some type of uh technology proprietary technology. But I mean how do we invest in in open source companies? It's a tricky thing. It's it's it's really difficult. And part of what we're supporting it at the earliest stages with the co-working space and the environment and then also opening up, you know, our opening up our mentor community slightly to to select companies that we want to help out before they even come into the accelerator and uh just making connections with uh investors as mentors.

So. It because there's the the stage before everything else where the protocols you mentioned, you know, and investing in protocols who supports the the growth of the of the protocols before even um apps are built on on top of of platforms. Right? So, it's it's a whole all these stages somehow need to need to have support and right now the very earliest grassroots stages are pretty much uh volunteer right? Yeah, and we are supporting it by what we're doing. Yeah. I mean, just the community event that that we're all involved in.

Um supporting the the space, but I mean, we're in this to make money, too. There's no doubt about that. Um yeah, it's it's very interesting. I was talking to you know, Mykhailo earlier and and I guess he's thinking of some of these same issues like how do you monetize open source? And I guess that with his that crowdfunding platform that is exactly what he's trying to uh tackle that challenge. I don't know if this is necessarily a model that is profitable. It's more like a model that maybe has funded the things that a lot of people want to get done, but it's there's just no way to monetize them.

But I think what's really fascinating with something like let's say Ethereum is how you can um make open source software and open source protocols and maybe still monetize them if you have, you know, its own currency. All right. So, um I guess we'll see how that works out. No. That's an opportunity that, you know, we're trying to we're trying to figure out how to capitalize on bets that other accelerators don't and and and funds early don't don't have yet as yet. And it you didn't have this kind of uh this opportunity that you take maybe what it's like a public good or something like that and you turn it into something you can actually invest in.

And then that's I think that is amazing. What's unique about it is that uh traditionally when when people would invest in uh in in open source uh they would they they would offer services that go alongside uh open source. So I thought uh Red Hat follows that model and and there's examples uh that um the Mozilla Foundation follows that model as well where uh they open source the product but they charge for the services and uh helping people integrate in their systems. With Ethereum it uh there's the open source platform but there's also the token system which fuels the platform. So it's it doesn't fit into the same um I guess traditional open source model that uh that that came before it. It is still open source but it's uh a completely

different spin uh and it'll be interesting to watch to see how it uh how it develops over time. I mean it's much more direct, you know. I guess if you look at even Red Hat and Linux, even if Red Hat's like a big successful company, if you look at how popular Linux is then Red Hat is not that big, you know, if you compare it to like Google or Apple or Microsoft. Mhm. So I think there's uh there's a lot more potential with something like that Ethereum. Absolutely. You can still monetize on the decentralized applications as well. You don't have to make those open source per se.

Um Yeah, but then it's who's a lot of times you know that. I mean it's a struggle that we've had with Ethereum. Um is the for-profit non-profit I mean and it's we've gone back and forth with different approaches and and you know, do we want to be the ones that are that are that are deciding and and char- charging for the applications? Do we Do we want to be the one developing? Are we going to focus on the platform? And it looks like we're going to just going to focus on the platform. Yeah, it looks like we are not going to um have an arm that's going to be actually doing any for-profit work.

Um but that's still still being worked out right now. But it is a debate within our team. Um but it looks like our focus will be on getting this product out and getting this open-source platform out and let other people um you know, be developing the DApps products that are built on top of it. And then if you model will be the current scenario, Ether the expectation that that will gain value as people build applications, you know. Um the value proposition, you know, we're we're putting out the fuel that runs it. Uh it needs to You need Ether in order to run the system.

Um I'm not sure where the value proposition on Ether will actually go. Like that's not something that we are focusing on. It's about This is what's needed to run the platform. Um we're selling a product of Ether we're selling for for Bitcoin, which is what which is what our plan is. Um so we're trying to distinguish this between a token system and make it clear that this actually is a product. It's not a currency. It's not an investment vehicle. Ether is a product. It's not a currency. Yeah, we consider it fuel. We consider it something that runs our network.

Okay, it's not something that you're going to be using to buy and sell goods with. Yeah, I understand that. Like gas. Yeah. Right? And you need gas in order to run your car. You need fuel You need Ether in order to run the platform in order for the decentralized applications. Any computation will need Ether in order to run. So that's where I see the value of Ether is it is required just like Bitcoin is required to run to run the platform. Yeah, exactly. Yeah. No, no, that makes uh total sense. And one allegory I guess is that uh with Bitcoin, the value of Bitcoin or the I guess the perceived value of Bitcoin goes up the more you're able to use that token for goods and services. Whereas with Ether, uh the more decentralized applications that

uh that are written and and that exist for for people to to run on their own, now the more valuable that fuel is cuz you can do so much more with it. Exactly. The more demand there will be for the fuel, so on and so on. Well, perhaps we could talk about the Bitcoin Alliance of Canada as well a bit. Um I know this is it's a bit like a foundation as far as I understand it, but what's interesting what I've heard of it uh but perhaps you guys can go into detail is that you're trying to be this very decentralized and uh sort of quote unquote democratic. I don't know if that's the right term.

That's right. The um the Bitcoin Alliance of Canada is a nonprofit organization uh dedicated to promoting and educating uh the Canadian public about Bitcoin in Canada. Um it was formed with a a a very uh um I guess uh interesting take on on um on on choosing the first set of uh directors. Um Ethan, maybe you want to uh talk about that. Uh unlike what other people uh or what other organizations are doing where they just sort of appointed themselves when they were born, the Alliance uh took a different approach. So, the I I very closely studied when the foundation was formed and what I realized by listening to the community was that there were a lot of international people that were not really happy with the way

the foundation was formed. Um it was basically a group that decided who they were and announced themselves. They announced their sponsorship. They announced the people. And it really didn't have the involvement of the rest of the Bitcoin community. Yet, they were intending to represent the international Bitcoin community. And a lot of people really saw them as a group of Americans um deciding what's best for Bitcoin. When you don't have the um support of the large majority of the community, you're you're in trouble from the beginning. That's what I saw with the foundation and when I looked at starting something in Canada, I learned from what the foundation did and my whole thing was to get the mass support of the community. You want to

get 90%. That's the number that I used. You want to get 90% of people believing in what you're doing. And in order to do that, we made press releases and put them out nationally to let people know, "Hey, this is the idea that we're coming up with, a Canadian organization that can represent Bitcoin in the media, that can represent Bitcoin and get merchants accepting it, get can represent Bitcoin and regulators and banks and just get people informed about Bitcoin." So, we put multiple press releases out to let the community know that this is our intention and that anybody that wanted to participate was able to participate in the formation of the initial board of directors. And we had two groups. We had a voting group and we had an elected the actual people applying to be on the

board, the candidates. The candidates. And you couldn't be both. It was one or the other. So, we we ended up with with You couldn't be both? No. If you were voting on who it was going to be a board of director, you could not be applying for the board position as well. So, that was to prevent that you vote for yourself or Exactly. And and and I myself applied for a position just like everybody else did on the director and we ended up with 15 people that formed the voting committee and we ended up with about 12 or so people that wanted to be on the board. The election team selected the eight board eight board members. Initially, there was eight, yes.

Initially, the eight board members. The voting committee then disbanded and the the board members took over. So, this basically was an inclusive way of doing things where there were multiple national press releases put out that gave people months to say, "Hey, this is what's happening. If you want participation, uh contact us, let us know you're interested in in in one of the pursuits like either being on the board or or being involved." I spoke with hundreds of people from these press releases. And and and then we selected a team that was representative of the community where afterwards no one can can come back and say, "Hey, you know, I didn't know about this or you know, how did you select yourself?" Well, this is the process that we use. It's open. It was transparent. We believe it was fair.

And now this group of of eight was selected to continue forward and represent the community. Um we've got legal counsel. We have accountants, a couple accountants that work for us. We just put on the Bitcoin Expo in Toronto earlier this year. Um it's a volunteer effort. Nobody makes money on this. None of the directors make any money. Uh the Expo was a complete non-profit event. 100% proceeds were put back to the community. Uh nobody was paid. It was a complete volunteer effort. Um so we're doing this because we believe in this is a community side of what we do, what Michael and I do and the other board and the other members of the alliance do.

Um and it's you know, it's I think I think we're respected for the way that we've done things. And I just wish we had more time to to do more efforts uh in the in the national Bitcoin space. Uh I think that's that sounds great. I mean, you know, there's been and you know, Jeremy is also in the foundation side etc. and I think mostly people have gone at the other way also because it's easier, right? And uh Well, there's a few reasons why you do cuz it's easier and also because there's just not the community out there yet.

And it needs to have people spearhead a program. But one way might be better than the other, um but it's good that people can see there are different models and they can choose which best works for them when they're setting something up. Yeah, I remember the first time that I heard about the alliance it was one of the one of the meetups here in Toronto before Decentral existed. Um and Anthony you you you approached me and told me about it. And I remember the first thing that I thought was, "Oh, of course someone is making another group to to combat the foundation." Uh how many groups are there going to be all jockeying to do the same thing? Um, but in in that in that bar over over that that one beer when we were talking about it,

the vision was completely different and it it really resonated with me. On the one hand, the foundation there they've put themselves in charge of the code of the protocol and of of the Bitcoin technology that everyone uses worldwide. Um, but the Bitcoin lines of Canada the vision that that Anthony shared with me when he first told me about it was it's it's an educating group. It's a it's a networking group that that helps any Canadian learn about Bitcoin and find different people who are doing different things in the Bitcoin space. Oh, are you a merchant looking to accept Bitcoin? Hey, talk to that that member of the alliance. Oh, are you developer?

You you want more resources to learn how to do it? Um, you know, talk to this guy and this sort of this sort of alliance of uh of Bitcoin contacts across Canada. It it strengthens Bitcoin in Canada and and it acts as an outreach and that's a a much different goal than what the foundation had. So, very quickly my initial hesitation of starting yet another group was was quickly washed away once I understood there was two completely separate goals. Are you guys also focused on lobbying work and regulation here?

Um, yes and no. We don't actively go out to lobby. However, we we have been engaged in conversations with members of provincial parliament, with the Ontario Securities Commission and now the British Columbia Securities Commission. Because we are a network networking group of Bitcoin professionals across Canada, we are I guess a a natural magnet for for people who are looking for more information. So, there have been members of parliament reaching out to us, there have been regulatory bodies reaching out to us just to learn more about it and It's a lot like I I we'll will some disagreement within our board, but I'd like to see it as not as a lobbying group as an

information providing group. When people are looking for information whether they're providing it they're not ready for it, that's fine. Um, well I'm not here personally to push anything on anybody, just provide information. I think the merits of Bitcoin and this technology uh sell itself. I think that's absolutely required and especially with the technology so new as Bitcoin uh where the media says, "Oh, you know, it's being used to buy drugs and it's and hackers are using it and stealing money." Uh whereas the actual technology itself has nothing to do with, you know, drugs or theft. It has uh it's an easy way of sending payments over the internet. Um, so to have this this information resource available to to regulators to to learn what Bitcoin truly is and to separate

the media hype from the reality uh I think is absolutely essential. But it's interesting that you guys have taken kind of also the way you phrased it and and that, you know, a network uh and you focus on the the community and the connection cuz I I think uh you know, that's definitely other places and that's interesting. I guess that also kind of represents It represents a name alliance, which is interesting to us. Very key in the name as well. That's why you know, alliance was chosen and that's why the Global Bitcoin Alliance is which is an an organization now that's um Yeah that's It's a group of national organizations that have gathered together to share resources and best practices to help grow Bitcoin communities worldwide. And

that's, you know, the the name is really important as well. And it's just a friendship that doesn't need contracts. It doesn't need just let's help everybody grow their Bitcoin communities and provide them with the tools that they need and information resources and just um instead of, you know, be open and transparent. We do monthly meetings now with the Global Bitcoin Alliance and you know, I've met some great people that represent the Israeli Bitcoin Foundation, represent uh represent Australia represent in Netherlands that are that are built up these these communities and don't need to have chapters really or it's just groups that let the national and local uh levels take care of the task.

But we just kind of are there to share what what what has worked for us so that we can help grow the communities. Yeah, I think I don't know to what extent that's also a reflection of you guys' views on regulation cuz I know some people feel like this is something that should be actively approached, you know, should one should try to help make Bitcoin friendly laws as others think like it's much more important that we just built Bitcoin and companies and infrastructure and I guess afterwards hopefully, you know, it will be at such a point that when regulation comes, it has to be Bitcoin friendly because it's so far progressed.

Every group has its own you know, view on regulation and rules and that's why with the Global Bitcoin Alliance at least we just want to share resources. That's it. We're not taking a position as a whole entity of this is what we want to do with regular No, we're just here to let the local national groups do as they please. We support it and we share what's worked for us but really we don't take positions on action of any hard position on anything like The Bitcoin Alliance of Canada is much the same. I I I've received emails from our members across Canada who are when when they heard that we were talking to the OSC, they were very mad and they they say you know, Bitcoin should should not be regulated, shouldn't be shouldn't be touched, the alliance shouldn't be doing this and I've received other

emails That's the Ontario Securities Exchange. or commission, yeah. Yes, I've received other emails where where people were were very happy that we were spearheading this effort and really we didn't do anything other than simply exist. They reached out to us not for information. So I think it's it's great that that that the alliance is engaged in these uh discussions, but the alliance itself doesn't have a for or an against position when it comes to regulation. We're just a resource um for for anybody who needs to to learn more about Bitcoin.

Um perhaps Ethan let me ask you You came as a philosopher into Bitcoin. How did that happen? Well, there are a lot of philosophical issues, right? With decentralized technologies, we've had ideas about how to reorganize governments and economies, but it hasn't been feasible until ultimately until Bitcoin. There have been a lot of previous attempts, though. And yeah, I think the idea of being able to build um I mean more modern stuff with decentralized autonomous organizations, but ultimately, how do you take uh make a viable economy that doesn't rely upon central authority like to control it, to print money, to ultimately to

take your take you into war and use your money um for such purposes. It ultimately gives control back to individuals. Um It allows them to have bank accounts without um getting approval from a central authority. Uh I mean, the list goes on.