From Cryptography to Token Economics - Anish Mohammed, Ontici

Transcript

[Music] hello and welcome to the blockchain and us we're pioneers and thought leaders talked about their journey in blockchain technology crypto assets enter token and I'm your host manuel staggers if you enjoyed this podcast please give the top rating and review on itunes and feel free to follow me on twitter at Manuel's dagger this episode has support from shift crypto security the maker of fit box a minimalist Hardware wallet for crypto currencies big box is rock-solid compact portable easy to use and designed and manufactured in Switzerland to learn more and get your wallet today

visit www.hsn.com cryptography since the year 2000 as a researcher and consultant he has worked for several financial institutions and is one of the founding members of the United Kingdom digital currency Association he is on several advisory boards including Hyperloop transport technologies privacy shell Collider X ripple labs and chain of things and his main work today concentrates on security scalability and consensus of block chains and smart contracts for the safety of artificial intelligence crypto economics and token engineering Aneesh is a regular speaker

and the co-founder of ethics net and he's also the co-founder and CTO of on Tiki and the head of research at the Information Sciences Institute at SRH Berlin and now to the interview hello Aneesh and thanks a lot for making time today thank you for including me Aneesh you've been working with cryptography for many years and then often out of the blue came the blockchain how has that changed your work well I have to in a caveat that so I kind of did active research probably ten years ago for a period of time and then I've been involved in in

research in in security and crypto in much lesser sense but what actually happened is I always had a lot of interest in privacy and security of payment systems so my first paid job was building my payment systems Ericsson out of Stockholm so you know I was interested in the characteristics that paper money had given and some of the characteristics that were missing in all the other payment systems and then you know the so-called says Bitcoin paper came out it's slowly inserted we change the world as it was and I started reaching out to people and you know around probably five years ago I got

interested started talking to people and I got an advisory with very few and I started working with them in addition to talk to a lot of other people about you know various cryptocurrency initiative's and things of that sort I spoke recently with with a professor at at ETH in Switzerland and and he said you know I mean none of this is new really you know it's a cryptography isn't new decentralization isn't new it's just at the way he put it together that's like a different person do you agree with that as well yeah I agree with like this in a broader sense in the sense of consensus mechanisms

that the proof of consistent mechanism was already available for a few years now but it's just a way that it's all the input together that has a brilliance as a sheer Bernays so you know we've actually had hash functions we had in a public key cryptography beer two key cryptography yeah dad ellipticals for a while you know all the key components in that sense we're round but you know putting it you know it's all is interesting to see you know things exists but really right then and things all come together and things really work that's when real innovations happen right that's when reality kicks in you know you could say

in an internal combustion engines existed propolis existed wings and kites existed you know 1903 even Wright brothers actually put all those things together made it happen we have heavier-than-air flight and from then on in the way we look at transport has seen significantly the same happened to you know when crypto systems emerged in the sense like Bitcoin for a call swap flesh and as a side effect blockchain was produced right so we actually had the challenge of offline that was spent that we wanted to have a solution that actually fix the problem fly mm-hmm preventing double spend is that yes it's that the only thing that blockchain technology enabled that

wasn't possible before no it was just the start of it right it's like the first piece that actually really happened was preventing all flight hours but all the characteristics that it actually allowed people to you know get as a you know fringe benefit was already there but the thing that improved a lot more was the introduction of small contracts so you know in a way if you think about innovations in the sense you know blockchain introduction of locks chain allowed a you know integrity at the ability to look at something across time so there's a logical timestamp and public prominence and things of that

sort what really allowed what was really an advice a smart contracts was his ability to actually attach for a policies to date so for example the if I were to say to you in the email imagine the scenario Facebook where Facebook actually gave some of the data to Cambridge analytical right so such a situation could have been in theory avoided if the data was a task to a small corner and the smart car track said this data that I've given to Facebook will only be available to Facebook for doing ABC and shall not be available for anybody else and other conditions right so that was the real real change in terms of you know the big what do I call the big innovations in

that sense so interaction of blockchain was a big innovation and what was even more bigger innovation given we have public authenticated data was the innovation of smart contract that really pushed envelope really further which projects or which of those specific areas that you just mentioned these innovations what have you been working on recently in that regard so for me I am you know loosely speaking somebody who's in the market theory I'm swamp team so swamp is the file system part of Victoria so there are a couple of people that's Victor who actually is a lead person then that's Erin and then people like me who occasionally show ahead and

have interest in some specific pieces so I do some bits in the etherion space more from economic perspective in a smart contract space I have some interest in verification so it's formal verification you imagine that you actually say something and you write it down it did the fact that you want to really verify what you said and what you wrote down yeah like I are the same generally we have ways of doing that imagine B to the same for smart contracts so that's more or less described as four formal methods just essentially what it does is like you you know structure your small contracts in such a way in your flies and mathematics to actually make sure that the kind of you know whatever you have written down

actually complies by a set of rules so it kind of gives a lot more Securities you imagine the challenge that Dow had crossed things like that you know reduce at least that that's what you know what I'm trying to do in this space hmm you also had I think it was a presentation or a lecture about the tokenization of transport yes I have to admit I've been thinking about it for a while I was actually asked by one of the newer entrance into France for space come it's almost like a year ago to help them you know tokenization or transport I have had spare time for that drones and I've

been thinking about how you could actually commercialize drones and that led me to think about tokenize transform so the way you do path discovery just so for you know listeners to understand this better so imagine you have a country a city and you actually want to go find roots in a city the first set of people who actually find roots actually helps everybody also you need to actually incentivize them you mean fruit as in the air yeah yeah it routes it there yes and this could be on the ground or any places for that matter right for the drones in that sense it's personalized drones essentially and then I was thinking about you know how could you actually do this in a sense that it's pretty expensive to build things like that how do you make financing such

projects much more easier there's this thread of betting capex and OPEX capex being the capital expenditure affects being operational expenditure it affects lends itself very well to being tokenized so you could actually you know issue some tokens and forward sell it that you know the cost of actually or the overall value of the tickets for the next in many years and then you could actually offer each of the people who have actually bought this the right to actually go from point A to point B so it could be like instrum one getting uber you could actually use an application that says okay I want to go from the place where I am right now in London to LA and you know I press the

button and all the internal negotiations happen between all the transit providers so the uber would compete with lyft to actually give me the best rates from me to the airport and there are different ways by this model by which this mode of transport happen you could have ports that you know in the future so and I'm just alluding to people go out that exists in the space because iconic names so you know the port could actually a my doorstep I get into the port the port takes me to the airport but the pores get loads on to an aircraft and it actually goes all the way from here to the end point where oh I could switch airports in planes in that sense and get to the other end and then the port's get delivers to the end destination and for

all this I'll be charged in tokens and you know doing this is very doable even now it's just that you require a bunch of negotiations that would happen which is a set of transfer providers so the price discovery can happen and once that's happened you can actually have much more efficient you know mechanisms of transport and a place where these places it could actually help providing transport because effectively if you think about a project initializing a project is much more harder than actually anything now so you actually need to have money to do all the bureaucracy that's required to bootstrap a project and in this instance you know

a lot of a lot of countries and all sort of parts of the world those data mattered money doesn't exist and if you were to be able to organize this transport and able to waste money and use this to actually do some of these things it might be very well possible to do you know more and more areas transport at the same time you know have seamless transport and which is you know optimized in many ways not just path discovery but also for how could I say the price so you know the you the cost of transport per unit distance could probably come down and could be accessible a lot more people hmm and what I exactly do you need to tokenize

this whole ecosystem there because I mean you said before its price discovery it's negotiation it's also financing of the whole infrastructure yes but there are already ways to to organize all that right without tokens so why exactly would you need two tokens for justice so let me try explain this backwards so imagine you actually want to do a project right now they want right so the projects that are happening in different parts of the world generally the time it takes for you to actually from startup Edition like five years or something like that and you know generally speaking lot of the projects really struggle even to get the money required to do the initial study phase so that will be a real challenge venture capital to just just start it

right and then there's a question of the amount of money that's required to build infrastructure so it's like even if the government where the government or the the you know the financing body that actually under-eyes the cost of transport is willing to give you some some amount of money you know although operational cost is still be a very large sum that's pretty hard to raise right and then there's all the challenges of actually finding the right price and looking for inflation say for example in the UK how do you find the right price for the train tickets and there's a whole amount of debate that already happens those kind of challenges will be stall straight away if you'd open eyes but how how exact I so you know imagine that you actually we're to tokenize transport in in there out of

London for the tickets right so literally it's a question of supply bases demand it's very transparent so there is no arbitrary you know pushing of the prices the prices will be found out by a marketplace in that sense and they always change you they always change yes and it is assuming efficient markets it's very likely you will have far more cheaper transport or more efficient price discovering rather than regulatory ways of finding it where you know in a sense like customers don't have lobbying power but let's put it that way right if the people who have the power to push prices up or down most likely app cooperates in that sense and

the choices that are left to customers are kind of limited if it's dock nice it's a very open ecosystem there you have all the people who actually travel an opportunity to vote with their feet on the price of things so that will actually help discover mm-hmm and so basically just just so understand it a little bit better you said before there's also an integration of existing providers let's say you have less uber you have certain Airlines you have maybe other things as well valet service or you know whatever and and so there would be somebody who says you know what I can organize this much more efficiently than having to say I have to take a yellow cab and then I have to take United and fly here so I

can take the cheapest offerings at existing market and pay everything on a pre negotiate with a pre negotiated contract that is actually a smart contract that people pay for with the token is that correct yeah absolutely yeah absolutely let's say somebody let's say I had this idea or you and me together have this idea so we would then write this down write a white paper and and make an IC o---- to sell these tokens not necessarily we have to do one I see oh this is like the deficit for most thing that we need to do is essentially get an agreement for pricing with a larger set of people for the very least to get an idea where we are right and once that's there you know you could decide to actually have a token

the tge at a ventilation event raised enough money to do this I mean the thing I was also about to say was you could do this with so-called securitized tokens as well so because the thing you can understand is like you are going to have an infrastructure that's underneath it so if you really wanted to you could offer that as a token ice acid so there are multiple ways to actually raise money for this because now you've already got like a bunch of licenses at least first in place to allow people to transport human beings or cargo in particular set paths that by itself is a value that has to be you know kind of agreed to before you go ahead and buy

you know do token generation limit because otherwise the challenge is like if you don't get those licenses it could be a huge huge challenge even after you have the money right so once you have that then you can go ahead and say okay you know what we actually got this you know our licenses in place agreements in place now we're going to do this and this is what we think we are gonna do this is how we're going to do this and then the betel leaves you could actually issue a first set of tokens to allow people to access some transport at least in a localized area that will be the test right and that then on you can actually continue to onboard more and more people and and III from what I gather there are a lot of people interested in this I

won't be surprised if uber or lyft is actually thinking about tokenization or transport because that actually helps them to do that and the thing we need to understand also is the fact that the way the direction you know technology is taking us so autonomous vehicles are coming in and this is part of the reason I've been thinking about it about drones and using personalized transport just an abstract thought experiment of myself for like five years ago but that's where I you know it's something about organizers or transport and I would I could say yes then autonomous transport kicks in a lot of the things that are currently existing would disappear and the new economy would very much be aligned with actually having a talk mass transport essentially

what that means is its assets are not owned by anybody and the copyrights or the entities that actually run it will be keen to actually have a you know monetization of you know tree value of transport in that sense so they take an had optimal value for every resource they have and get the best out of it and in that sense it also gives everybody transparency so if they get challenged for things they can actually prove to people you know how this happened and why they did something and how their pricing happens all the things that they might get challenged in the future they have much better answers to get an arbitrary you know what we decided that's the case kind of thing mm-hmm

fascinating there's I mean most of the public transport is controlled by governments currently right I mean you mentioned before lyft and uber teasers it's the absolute exception right that is even possible and it's only has only been possible for a few years but how do how does the public sector benefit from tokenizing transport so think of it this way I imagine you are in a country where the capital efficiencies are not that great so imagine you are in a developing country and the developing country actually has some amount of resources what doesn't have the amount of resources required to provide the kind of transfer system that required for the population of the country the thing then that would happen

is like you could probably initiate a project and it's very unlikely it'll get to a stage where you know product will be completed because lack of finances but if if the you know if the market leaves that there's a promise for that part of the world to actually evolve or if that part of the world actually dies up with other parts of the world which already has demonstrated that the documentation would work then racing of the capital for them will be pretty straightforward and pretty easy so you know in that sense that they will be an averaging in that sense that's happened right what literally one needs to understand is there's always a network effect so as more and more people and into any ecosystem the chances that you

find paths connect point A to point B increases so that also forces entities who actually run systems to actually open up their services into new areas right think of the you know easyJet kind of thing right my pc jet or other people who are like flying very cheap flights they only flew a very you know selected zones and slowly and suitably these they spread across because of the network effect of the economy so the same thing will not fly so it's like when you know somebody starts talking rising something and then they will you know recognize that there's this opportunity there where they could actually do this for a developing country and or a developed country where that the services are not

as brilliant as you know as you would expect and the the condition of transfer for most of the people living in all those regions would improve that that's my thesis been going by what i've discovered from the data that's from the key available on all the sea transport you know cheap transport mechanisms that are available i think a similar pattern will emerge that does my belief but again i am not a transport economist is i'm just looking at a data that's publicly available you mentioned before developing countries and and tokenizing transport there i mean makes perfect sense like you just said right to raise additional funding or have security for completion of projects

about what about developed developed countries already have a very different problem the problems misaligned incentives so service providers indifferent less they said for example the UK think about it Network Rail actually subsidizes the underlying ecosystem for everybody has to operate on top of it right so in an arbitrary thought experiment you could actually think about it take an arbitrary rail say Southwest or whatever just right if you were to tokenize that and offer the services we might find that it might be a super you know far more efficient than what is running right now so that is very possible because what effectively is happening in the UK is Network Rail is actually what I described as a company that is being

subsidized by the taxpayer so effectively done twice the infrastructure cost and actually what is happening is everybody else runs rails on top of it is providing a service and getting profits out of it so it's like that's a misaligned incentives if it was tokenized what can happen is whatever the the alignment of incentives will be fairly shared between the set of more people in that sense right so if you hold the tokens and you you know recognize that the price of transport has gone up then you also get some value out of it rather than just in a corporate that actually you know holds this particular service right so in that sense it could be useful for the

population in the country to actually do that and they also have the ability to decide you know what to do in that sense they could you know they could ensure that a voting with their feet in that sense and kind of make sure that the prices are in the right ballpark because it's a market economy in operation there are none of that actually works you know price doesn't seem to come down in the UK it's always been going up if you look at the prices between Berlin and by the UK price for a month of all zones in Berlin is I think 81 I 1881 83 euros right and if you want to have a zone one to six for a that's for a month okay it's for a week in London one to six is probably closer to a hundred pounds

can you imagine what is the reasoning behind that and where the money goes I don't know I really don't know wait the wage the salaries are much higher in the UK and no it's not actually true if you could actually look at the numbers and true that that's actually not true yeah the average wage opinions of drivers are very employing that TfL is not much higher than the average employee in working in well and I would say the difference the quality of life is not that different yeah I think so tell yeah so it's like there's something magical that's happening somewhere we are not understanding it and the providing transparency to that so that everybody understand what the hell is going on will be a very interesting exercise that makes yes I mean you mentioned you you

were very much focusing on crypto economics as well yeah and it's one of the things I'm interested in yes yes so and you you engineer tokens that yeah that take advantage of mechanisms of crypto economics so how exactly do you go about developing and engineering such tokens okay so I have to admit a friend that this is an emerging field and it's like a you know a lot of us have actually tried to this and then we collaborate so I collaborate quite a bit but friend trend ecology who actually is the CTU a big chain TV and he's now running the ocean protocol so I helped him a bit with ocean protocol so for me

I have a you know a bunch of mechanisms that I apply so you know in general I try to isolate games that are happening in that ecosystem I simplify an ecosystem to the the simplest possible form it could exist on its own and then I would look at the set of all actors and understand the incentives and what they security module or their March yes and then see what could be the interaction between all the players in that game and see if I can optimize it and can I actually construct upon all that actually will give the best resource for the ecosystem as a whole and be stable that's small as what I try

to do simplistic sense and I traded my the whole multiple times and sometimes do simulations you know any tools that could be used our I normally use so that's how we do it which blockchains do you use for this Oh No the thing is like blockchains have nothing to do with this in that sense right so it's like in general tokens are yeah c20 ones but that's so my aetherium blockchain if you if I were to put it that way but it'll talk with the behavior of token so such that's nothing to do with the underlying Knox yeah except for the fact that I should probably put my hand up and say some caveats to it so there are costs for using you know logic on unboxing so if you were to do

any small contracts each of the small contacts would have instructions in each of the instructions would have a so called in a gas value that you need to give to actually have this instruction you know executed in this so this value for that and then there's also the time it takes for things to get propagate another block or confirmed on a block so both of them actually has some interesting I but I say impact or side effects so one of them being that if you actually want to have small values and you have very fast price discovery what can actually happen is that could be difficult on a blockchain that's not that's not doing really fast and not

really finding them the price discovery really positive okay how many people are working in this field I honestly don't know there are the you know going back I started in getting into this face like fab much last year okay so I said finding time my heart beam you show there was like blood and the rest of the guys from material who are talking about it and then very few people were actively doing anything then then me and trying to test are talking about it was in October so I met Rand in a well world AI summit and he was actually working on

the ocean protocol initial version and we talked about at that point in time I had already done more than probably ten protocols so I you know as usual offered my hand and trying to help him out and we spend a couple of hours doing a bit of the work and going through that missouria more balls and looking at I always come from you know the economics from a very crypto angle rather than an economics angle and I kind of knew some bits of game theory but mostly I'm very meaning in that sense what I mean by that like my oh my thinking is always about security margins and incentives in a crypto sense so essentially uh you know my look my my

view of the economics is is a colored glass that's colored by cryptography or cryptic cryptology in that sense so you know if somebody were to turn in and come in from the other side with an economics class that could be slightly different but it has to meet somewhere in the middle so a lot of the people I knew people from very much from a crypto space that's actually I know one person was in Berlin Olivier he actually is a economist and he's now a crypt economist and I actually work with him in my startup so he is the only PhD economist who's done game theory who is significantly into crypt economics that I know of so it's a very small subset of

people so a lot of them lot of people interested I haven't seen a large amount of work being done the lot of theories have being put forward some of the theories that are being put forward make some assumptions which are pretty I couldn't say illogical if you were to think about it in that sense so the reason I say that in most of the ecosystem there's a leakage where a token that's being issued it's actually being used as investment instrument and people hold onto it if you if they hold onto it then that actually it's you know takes away all the characteristics that you really want for that ecosystem to work properly in that sense so the reason also I asked how many people work

in the dystopian engineering spaces because I remember a conversation with you where you said that the crypto space has the problem that very few people understand the very specific problems yes what I was kind of describing is the situation of convergence that happens in blockchain so say for example imagine you actually wanted to do like me and I have a bunch of hobbies and you know as I was talking trend also I mean the reason why me and Trent get along really well is we share a lot of my top is one of my pet opposites that takes up a I I happen to be the co-founder of ethics net along with a classmate of mine from singularity University so we've been working in this space for a while so

imagine you actually wanted to organize yeah I to actually have the right kind of behavior so what that implies is like you need to have a fair understanding of AI ethics if a I then a fair understanding of laissez-faire understanding of game theory in that sense and you know a smart contracts and so on and so forth right so it's a product of probabilities right imagine you had to find somebody and the chance that they would know something is always a small fraction right so when you want multiple in the skills the product or abilities decreases when probabilities are normally multiply the property drop in your probabilities only go down or up right so it's becoming smaller and

smaller so if you want expertise in five or six areas the set of people that you actually have will be very tiny and that is kind of not very good so that's what I was referring to it what is what is the result of that the result of that is like in a diversity that you might actually want intellectual thought it's kind of constrained so mostly if you got to think about things you always have a similar kind of characteristic that you will see you know more male dominant the people who have actually done crypto and math and things like that and a lot of the things that you probably we know I put my hand up and say you know I probably don't have all the soft skills

that's required to think about things the way it should be thought about so I probably think that Bobby Troup on all of my friends who are involved in token engineering so you know that could be a problem in the long run you recognize this and behind said I go all the guys who are involved in doing this didn't understand us yes so we actually need to have more broader engineering consensus where we could actually discuss things that are in a much more broader sense in fact there was you know Sherman who she's based on a Berlin she runs I think she actually has a position academic position in University of Vienna in good economics and we people had in your at least two sets of

meetings with her where we were you know talking about this and you all recognize this challenge the challenge that you know set of people that are currently involved probably don't have the right skill set properly or maybe could be just queued right so that's the challenge is the smaller the sample the representation goes down significantly and if you are going to you know make policies for open up policies like you know tokenization for things that have a trawler impact on large estates of humanity I think it will be fair to actually have you know more and more people who are similar to people who are going to be affected by this right but

the issue there is that they won't understand what's what said what the problems are at hand yeah yeah yes that's a problem yes so it's like it's like the governance process that's happening right now in the sense like you know an average person on the street doesn't have the ability to influence governmental decision-making in that sense but at the same time you know at least there is this threat of being watered out on this once in an many years but even that doesn't exist in this hell of a protocol sense when Sephora call this kind of engineered and let out this stage that you were just describing Bitcoin and the challenge of Bitcoin it's more or less there forever until it dies out never dies out it never dies out so you know the design of

that if it was done by one person or ten people the ten people they understanding the world could be very different from your average person on the street and that becomes a reality so I don't know let's take a quick break for a message from our sponsors shift crypto security is the maker of big bucks a minimalist Hardware wallet for crypto currencies storing your digital assets safely should be a priority but software and phone wallets can't protect your assets from hackers and malware the big bucks camp developed by a team of experts who combined with pioneering spirit with a strong commitment to crypto security performance that is second to none the bit box is rock-solid compact portable

easy to use and designed and manufactured in Switzerland to learn more and get your wallet today with the WWF crypto ch we talked before a little bit about I mean you had just come back from from New York from the consensus conference and you said you've you've noted some some changes there in you know in comparison to previous years also you think it's more askew maybe towards projects that have heavy marketing yeah that's one of the things that's that's been becoming more prominent in that sense you could actually see you know people trying to

get airtime for projects that probably have like you know some amount of how could I say innovation to other projects but again a lot more visibility because they spend all of my money on marketing marketing is emerging as like a very very important tool in helping projects how could I say get visibility mm-hmm it's that bad I don't know the honest answer depends on the decisions that's being made so if marketing is a being economic with truth and saying things that actually it doesn't exist then it could be pretty much be bad right it's actually you know

fooling people in that sense right but if marketing is telling the truth and making it understandable by people so you know things are accessible to people could be good so you have more and more people who understand this so I don't know what marketing really does in the sense it's like if marketing is like you know being economic with truth and having you know colored views of things and you know making biased opinions probably it's bad but if it's actually doing the right thing which is essentially making things accessible to people helping people to understand what's going on helping people to make decisions based on information and data and remove the nuances of emotions and human decision

biases I said very very good to do thing to do but unfortunately there are very few of those happening you think more an education angle maybe yes right and let's driving product and driving action absolutely and it's how did you get into working in technology Oh technology that's kind of a long story I'll summarize some where he summarized the story so I went to med school my first degrees in medicine I was born in some place called Kerala in India so my parents actually wanted me to go to med school so I said very crazy well-behaved child let me put it that way my parents

might question that one but you know I agreed to go to school but I was always interested in technology and math crypto so when I was in med school I used to teach people in Indian school a crypto security some food it's a computer science and interestinger policy so then I was out doing differences the people it was like you know helping them with crypto libraries and things of that sort and one point in time and I finished my residency which is a residency that you have to do there was this piece of work that I was doing for somebody and I said to him look you need to actually start paying me so I can do this full-time and that's how I got so called quasi paid

job but my real paid job in the sense also search labs was Ericsson to do build a payment system so with a degree in medicine I ended up far at being part of the security for Excel building a microphone system in Soho what what fascinated you about cryptography oh it is it's a funny story my dad used to subscribe to an Indian magazine called science today so this is like you know a magazine that my dad is read and I used to read after him so you know there was one one article this is going back probably thirty thirty plus years ago there was this article about cryptography and this

Martin Gardner had this challenge for RSA 139 I read this challenge and I meant you know what it can't be that hard I need one to say yeah so yes that's the stupidity that got me into this thing so I looked at the RSA one day later and said yeah it's factoring from how can I look at how hard can that be it factor there's and I started reading all the things and then you know you get you have a very interesting puzzle that a lot of people interested in solving and then I got you know in you know more and more involved in it and in 96 around 96 there was like Bruce Schneier actually published his you know up like cryptography book so I managed to actually get all of a copy so

as I was saying there was somebody who was actually asking me to help him with writing his crypto library so I offered him this incentive you get me a photocopy of this book because getting all of a copy of a book was pretty hard so he gave me a copy of the book are happy with writing some primitives so there you go that's how I got into this whole mess and the rest is history like every time technology comes along I have to admit I'm always curious about technologies it's thermally probably the third of the fourth in a kind of revolution or whatever you call in technology so when the cloud thing came along in 2007 I got involved I got involved in writing the early thought

leadership so I called that the cloud biased decision guide the Cloud Security Alliance guide version 2.1 DCI moving to the cloud then when I was an accident I helped them create the cloud strategy school and for a while was responsive for cloud secure in accent yeah and then I'll die as a committee that will start one and then when the drones came along I got involved with the air vent drones I was on the other copter devilís was a moderator there and I ended up becoming friends with Chris Anderson who now runs 3d robotics he was the editor in chief of Wired magazine then when yeah I became very you know we get prominent in the Big Data space I got involved as well and you know I have this project in ethics of AI that I've been working on

and you know last year we have you had a submission to the XPrize for AI and also got a prize from the Dutch society for the best and science project Wow and for the last five years as I described I've been involved knock saying there you go that's a I generally dabble in things and many intersections happen you know everything lands upon my plate and I go wow I'm gonna try have people a bit you're in London currently right yeah how important is its location I honestly don't know because like in the last year and a half since I left my day job are we mostly on a plane and I'm travelling around quite a bit so you know I am lucky enough to be at the places where I

need to be so say for example as I was saying last two weeks I've been Berlin Paris Berlin Slovenia London New York I don't know so this is like wherever I need to be I could be so when you know then there is like a Tyrian conference or a crypto conference that I need to be say for example there is supposed to be two conference day after tomorrow I can't make it in Toronto but I'm supposed to talk about the intersection of a and block seeing an ACM conference because I still don't have a visa to get there so I won't be able to make it so that's that's my challenge it's like my

challenge is essentially more like if I need to go somewhere I better get a decent time I can't make it but a lot of people don't have that challenge and for them that's not a big deal but I think you know in any ecosystem where is is starting out one of the key challenges you have is the fact that you know the people that are there are people that know to you and you know relationships really matter so you might be quite useful to see people in person so that that's my theory but I don't know me know I am just one person you know making observations on things that are happening so so it's it's very important for you to meet face to face instead of just being on a slack channel

or something yeah at least the initial conversation has to be face to face so most of the key projects I know the people you know face to face and I've talked to them spend a good few hours talking to them because one of the things that that we need to understand is like the nuances of human communication is not really represented in a text channel right so emotions that actually being micro expression is that being expressed from the feet it's not really expressed in text but at all extra syntax let alone in telephonic conversation or audio conversation like we are having right now so it's it's a pretty hard thing to Jade's gauge some things because what you're trying to do is build trust if you want to work with

somebody on a long period on a particular project what do you want is the question essentially as can I trust this person because the investment that you're going to make is your time right time my expertise so you're going to invest your time and your expertise in a product and you're trusting a person to do the right thing so you want to make a judgment call based on what you know so yeah how do you evaluate the projects or the people that you work with I have very very simple models evaluation firstly I really don't work with people I don't know unless they come referred to me by somebody I trust so you know generally speaking almost all the products I work with are brought to me

by my friends so I don't you know I don't actually do any kind of marketing with any sense way or shape or form so if the projects wants my help you know somebody I know who I trust over with the past points them at me and then says you know I know this person for X number of years he's a very good guy or ago and he has the right he or she has the right incentive and and I meet them face-to-face if he can sit down with them and then I talk to them and I asked him lots of stupid questions and I give them a lot of feedback and I see how they respond to feedback I want to be you know she was sure that they're a willing to take very blunt feedback I wouldn't call diplomacy tip of my course girl so if I think

something is not working I tell them it's not working and some people find it difficult to work with so you know we'll we don't have much time my Seco system is growing at a rate where there's no time to sit around or fluff around and you know tell small lies to convince other people not to get upset I believe that the time is so short you actually need to take reality as it is and be filling and you know capable of accepting those things and making the changes so we can actually do the end result deliver the end result so I really value people who have integrity and have actually shown that they have you know they wouldn't be swayed by any changes in economy or other things because that's like to me super important because what generally happens

and throughout the process of the project people who are working with you will actually become very very very rich so say for example if you think about people our advice say the ripple laps right so I've known them like five years well to the prize five years the number of zeros that could be added to the value could have be more than five and there you go that should tell you something so my relationship with most of them hasn't changed at all so you know that's what I'm looking for I really don't care about what you value in terms of number of zeros behind us but as a person have you behave what your value system so you know you drive to change the world in a

positive direction that really matters for me so currently you're you're also working on a start-up right yes I'm working on a start-up so the startup is essentially looking at it as securitized token that uses proofs there are laws rules so that's what it is so imagine if you want to monetize you know business processes that that are you know dependent on data this will be the easiest and the more secure way to do that so that's that's what trying to do what is one of the you know maybe um needs in the market that your startup could fill who the this simply put quite a few in that census as I was

describing the question of secondary markets right so you know if you actually had a secondary market and you wanted to have liquidity you know kind of liquidity in the current scenario it's kind of limited say you think about bonds how do you have a second to liquidity for bonds or I said we're describing the other one which was like if you are on late stage venture and you want to raise some money how do you actually do that so that's another one and then another thing that I was kind of about to say was the current set of inner tokens not being efficient in doing what you should be able to do to issued securities so if you want to do security issuance you have like multiple coins that you need to us right so you

will have to use you know you will have a bit of gas because if you're going to do anything littering you need gas you could have a in a cave icy coin you could have a liquidity go in a custody coin and so many of those things so in general what you're kind of saying is that investors should be exposed to like you know ii like coins and liquidity for just buying investment and a security token so that is kind of being you know taking care of by our startup how far along are you I mean how far or when when can there be a solution in the market that you are creating yeah I mean we are pretty very confident that by you know q1 q2 next year we should have a

product in the market in that sense at least you know we the way I would describe it is like when you want to do ordination okay so as a nation of unknown essentially if you look at the overall constant well I mean just to describe the whole process so that I can go back and describe why I say this way so there's a there's a legal cost as arranger and that this rating agencies and this auditing and SPV a social purpose it goes and if you add all the cost of all those things and each of them has a cost so that's one to two million set of fifteen to twenty bps for raising funds right so if you put it all together that's like you know if you are raising money less than if I had to Mel doesn't

make it any efficient so what you're trying to do is help people do that so we need to actually have partners who would be involved in issuing this kind of you know financial instruments and bringing in all the efficiencies and providing the proof so people to actually validate that's what we're hoping to do it okay cool is that your first startup punish in theory yes so I've helped a lot of people or not to startups but on my own yes okay do you find it very different from the work you've done before or what are your main you know observations there and in this in your own venture the main observation is the fact that because this is not an ICU and Joe is finding it

harder to actually raise the capital so you know if this was an ICO and if there was talk about being issued probably we wouldn't have the difficulty in having the amount of money compared to what is being wasted to generate very small and given the quality of team we actually have people who've actually done this thing before it's like through on people and as I said we also have backups FRMS so almost all the people on the team my co-founder actually has worked and as a navvy people explore us and all startup so everybody has in a proven expertise in doing what they need to do and even after that we are finding it a challenge to actually raise capital right so that

is kind of a bit of an oxymoron for me in that sense like you know I everybody is willing to pay me to do things I you know if I a granade my time just my time alone for you know at least a year plus the money I need to pace for my startup is less than that it's like I'm wondering you know if I me plus six other people are going to join a start-up and you are putting in this small amount of money it should be pretty much you know burn no brainer to actually put the money but you know it could be that the market is very different the money there when he defeat me doing things probably am higher short-term return on investment and the

thing I also would describe is like if we were to have a market for data what are the protocols that will really allow market for data would be the protocol that we are working on essentially we would allow price discovery of data without actually revealing the data set so that's like a super interesting construct and you can actually have real data exchange is working mm-hmm yeah cool interesting I'm wondering I mean you have you have your own project and I mean of course you're making sure that you can deliver something that's off of value but if if we look back a little bit to 2017 I mean there was this huge spotlight on the whole cryptocurrency

and blockchain technology ecosystem and it has since cooled off a little bit also because many people say well you know will these companies ever deliver what they promised how do you think companies in this whole on blockchain ecosystem can make sure that they can actually build the things they promised that's a pretty hard one you know the first and foremost thing I generally describe and when I give talks about you know generally cut economics and startups to people I describe the challenge right the first thing I say is like you have this normal curve the curve that starts off with in a friends-and-family then sweep around CDs

a CDS b c d c c d e and f f is the f in that sense right so IC o---- is just allow people to go from seed stage to CDF right so the filtering that actually happens in each the stages disappears right so one needs to understand that even with the best intentions you know the filtering mechanism so imagine as each of the filtering mechanisms there's one out of ten going through right so c1 series a two series B you know you do that and so it gives you the filtering like if it's four stages you know ten to the power 4 10 to minus four right one

10,000 in that sense so try by the investor right really x-ray the whole team everything clearly and that is totally missing so unless the the so called what I call the team is going to be that do diligent and be so meticulous and be very very you know meticulous in making sure they make the right decision is in stick to it like like anything before it is pretty hard to do that you know your own human decision biases it's pretty hard to fix you know it's easier to fool yourself than anybody else so I think it's pretty hard and if firstly what I would say is like if you pick on

problems that are real that actually have really utility and people will really go and use them and you are able to deliver that in a way that people can consume it and I think there is a much higher chance that you could actually go and deliver a successful project because otherwise what will happen is you might end up delivering a project there will be no adoption even if the they were the best technology in the world if there's no adoption then the you know what do you have done might not be much value right in your own startup how do you approach this I mean how how do you make sure that you're on course with with your mission so the first thing is like as I was describing we have external

partners in that sense so for the protocol to really work the actors in the current ecosystem had to be part of this you know process so if we don't tell you did they have risk and they will just you know ask us to go do something else climb trees maybe so so you know that's a very simple statement we actually have four people who are in the core system say learn less based it went to capitalist you know other SAS companies that are interested in raising funds one of the people who really have use of this protocol and actually think there's benefit for this working with us you know that's a very simple one they

will just go you know what we don't think that you're actually going to do what we speed you know we want from you right now so go away there that will be their summary statement me they said I I don't think but it's missing with most I see us yeah it's pretty hard to you know build that in right it's like it's pretty hard so what do you think will happen to most of these parts I think one or two percent of the project would actually have anything that's actually bonding in probably 24 to 36 months I would save in 24 months so there was some data that's was published that actually said 46% of all YCO projects at raise funds didn't actually deliver anything

yeah it's interesting I mean it certainly doesn't do to space a service it'd be good that all of that happened yeah what do you think were currently may be overestimating about what crypto assets and blockchain technology can do oh that's a very very difficult thing overestimating I honestly don't know I mean the thing is like the we don't general observation I would say is like a lot of the use cases we actually have really do need boxing so that's kind of a challenge right so if you were to think about any project and you go you know how would this project work and you

know what does it really require it is possible that you might figure out that you really don't need the possibility of having a blockchain so in that sense that could be the thing that we are not beyond should be thinking about if that's not true right and we end up with all these things it is very possible that there's an inflated expectation for people next to next to that you know to maybe a shakeout or you said before 98% potentially of projects failing what else do you think is on the horizon in the in the next few years so firstly in the you know the if you were to think

about it from a very token perspective and a blockchain perspective and a whole ecosystem perspective in a token perspective pretty much all of those tokens that are currently there are you to and non-utility that there will be more and more maturation that's happening a lot of the tokens that are yeah I'm not delivering all died out at the same time they will be introduction of you know securitized tokens that's there you can already see the harbours the polymaths and people like that that are trying to do that so I think that will have a lot more momentum and going into the sixth twelve months time we will have a lot more of that and going beyond that at the same time the blockchain ecosystem

will have significant improvement in throughput significant improvement efficiencies and as I was saying all the people that I saw the other day the guys from plasma the guys from etherium you know and everybody else and cosmos guys all of them working together will actually have like better improvement of current current current cohort of blockchains with high performance of blocks you have also some of the challenges we are possibly having right now so it could be a different different cohort of markets that are existing in two years from now it's similarly different cohort of protocols that are existing two years from now similarly you know token wise the characteristics of the token that we

actually have might be very different as well do you think blockchain technology will still be around in 2025 I am pretty sure it will be there but this think about it this way right electricity as a technology we don't consider that as a technology right now right it's like it takes this for granted similarly if you know innovation happens and you know things could really really well it'll be something that we take for granted so cloud right now a lot of people don't really consider cloud is slow because you have iclone and you clone and exclude what you know what I mean so in 2007 if you said Club everybody would ask what the hell's a cloud right there you know 10 years time things might change in life you know

people what think of things differently yeah I thought it was really important to also ask about how you got into this because it's also a lot about learning and sure me III for me it was not jumping in per se it was a slow slide into calamity that says so you know our being involved in doing gaming systems I've been involved in doing research in crypto so my involvement in payment systems goes back 19 years like building back different systems and I payments aside so you know I was very aware of the developments for a long time then I then did some research and for proper

character in research labs and masters and things like that so and then I got back into the normal day jobs world and then I was doing a day job and then again you know I always used to keep track of developments and crypto world in school or crypt and the cryptography mailing list and then you know that sort happened and they looked over of emailing this it got me started and you know at first I was involved in helping couple of people I don't know if you know I'm talkie so a couple of people I came in a workshop on mining in hacker space and last unlike doggy's years ago and then I was very much interested in finding a proper job in the blocks in

ecosystem so I tried to reach out to the repo guys and they already had found a CTO step and so he was like me so he asked me to my advisor that's how I ended up being an advisor in full at that point in time and then I came back to UK I decided we should set up a teacher currency association in the UK so I'm one of the parties in a person UK each other currency Association and then when it helium happened I got fined a couple of my friends you already mentioned binary I know when a previous two T similarly victor previous tutorial so they all got dragged in and then you know that implied that I talked to them and you know it did this general situation where your friends are working on trusting projects you get interest

curious about it and you start working on them and you know over time after you got and drawn more and more into it and at some point in last year I left my day job and I've been doing full time all those things and in somewhere in between the last 20 years I've been really interested in this concept called zero nostrils I had this handle for zero knots for more than 20 years because I really liked the concept of ceremony because there are three characteristics which are so unique I really like if the real world were according to that worked according to that the world would have been a very different place first thing is a very simple one imagine I wanted to prove to you something imagine I said to you that I had the magical ability to get out of a room

with one dough so I am the person who is actually trying to prove and you are the verifier I ask you to stand on the dough the door with one also the room with one dough I walk in through the dough you close the door behind me and then you see me outside and you know that I have the ability to get out of the room without using water and we could do that as many times as you want but you would never find out how I do it that's zero notes before and after the test has been done you have gained no more knowledge that you know you before right that's one the second thing is like I can only as a proof but in the proven and the very excite I can only prove to you that you know I can do if I were

telling the truth right I can only convince a verifier if the prover is actually telling the truth and the other part of the story is that this is the more powerful part of the story yes as long as I am telling the truth you will be convinced and you may a gene in the real world if these three qualities were true at least the last two you would have very very few bites because if you were tell that were you are telling the truth you know as long as you tell it to the other party knows that you're talking about they will be convinced if you can only convince them and you tell the truth such a beautiful lie to you sounds like magic yes I really enjoyed this conversation and I really appreciate your taking so much time for me today Joe thanks a lot for

this conversation thank you very much thanks so much for joining us today info on our guests than our sponsors is in the show notes of this episode and on the podcast website the blockchain and ask.com to help people find this podcast it's important that you download subscribe and give it a top rating and review on iTunes or on the podcast platform of your choice I'm Manuel stackers and I thank you very much for listening [Music]