Vested Capital
Vested Capital

Episode 26 · 1 month ago

(EP26): Joshua Scigala, Co-Founder TheStandard.io, DeFi Lending, And Vaultoro, Bitcoin And Gold Trading Platform

ABOUT THIS EPISODE

Joshua Scigala knows a lot about crypto (thus this is a LONG episode!).

He was there when Satoshi first released Bitcoin and he was unfortunately there as well when the first major exchange, Mt. Gox, collapsed.  

Today Joshua is leading a new Defi project called TheStandard, a decentralized lending platform run by a DAO that focuses on hard and soft assets as collateral.

The protocol will have the ability for users to issue multiple fiat pegged algorithmic stablecoins starting with "Standard Euro" then USD, YEN and more to be rolled out.  

Before this he co-founded Vaultoro, one of the first platforms where you can directly trade Bitcoin and gold, allowing you to hedge against each asset class.   

During this interview we went back in time to hear about Joshua's early career and businesses in Australia, where he grew up and how he became aware of the emerging cryptocurrency movement.  

We also dive deep into all things crypto and how Joshua setup his two cryptocurrency projects. 

Enjoy the conversation.  

Yaro

Podcast: https://www.yaro.blog/pod/

Blog: https://www.yaro.blog/

Hey Hey: this is Yaro and welcome tovested capital Episode Number Twenty Six featuring my guest Joshua Sigala,the Co founder of Vulturo and the standard, and also a leader in thecrypto currency. Space vested capital is a podcast about how people makemoney and put their capital to work. I interview start up founders AngelInvestors, venture capitalists, Crypto and Stock Traders, real estateinvestors and leaders in technology. So this is an episode that will be toughfor me to introduce to you because it's expensive. This is a topic that is verycurrent. Its cryptocurrency decentralized finance do all thecutting and stuff going on in that world at the moment, because Joshua myguest is leaving a new start up. I call it a star up. It's a Dow. It's adecentralized finance application, he's basically creating a so hard todescribe these things. You'll hear me ask some very poignant questionsthroughout this, because I was genuinely not understanding parts ofwhat he was describing. Maybe that's not entirely true. I was understandingit, but I wanted to simplify it. I wanted to understand the practicalapplications for an every day normal. I use normal and averted Commons personwho's. Not You know, need deep in technology, certainly hasn't spent somuch time exploring the conversations going on in crypto world. You know allthe deep conversations with the actual developers and the leaders in the space.You know they understand. What's going on, maybe, but for most of us you know,we don't really know even the basics. I feel comfortable with the basics. Iunderstand he centralized blockchains and currencies and Tokens and some ofthe ideas that are around different tokens that I've heard about on otherpodcasts and just learned about through my own studies defy itself is a verycomplex space but, as Joshua pointed out, Defi in terms of volume oftransactions now is so large. It's bigger than some of the largest wellknown fin tex like revile. If you might know or Revolute, depending how I liketo say, it's a massive European Tin Tech Company that allows you to buy andsell stocks and transfer money buying, sell cryptocurrency as well. So this issomething so huge that the mainstream public really doesn't understand andthat's part of the problem, but that's also why this interview is so importantbecause Joshua through his life story as an entrepreneur and just threw hisexplanations of various aspects of cryptocurrency and the technologybehind it and the philosophy behind it as well, will educate. You will open upyour eyes to what's really going on. I certainly feel clearer on a lot,especially what he's doing so, just a bit of a summary of what you're goingto learn in terms of Josh's story since, as always invested capital. We do goback in time to learn about our guests, and you know what they're known for itwas fun for me to do this part because Jos actually grew up in Australia,where I grew up as well, and he worked in design eventually for a number oftelevision stations that I know very well from Australia like channel sevenand channel nine. So we worked on TV, shows, graphic design or maybe reallymore video design like video graphics. He actually, as he explained in thisinterview, was the creator. One of the very first ever short films using acomputer, aided graphic design, which I think is very cool, unfortunately lostthat, but he's still looking for it, maybe one day, he'll find it and funnyenough. This connects with the cryptocurrency world in a strange way.So eventually, through his work in the Graphics World, he became entrepreneurand had lots of side gigs going on I'll. Let you listening to hear about allthose and one of the side. Gigs was a company called swap style, whichessentially was a fashion swapping service. I think his wife at the timewas a CO founder at least helped him start it and it sounds like it's. Afashion start up, and it certainly was, but because of the way it was beingused, it forced Joshua Josh to start looking for some kind of credit systemwithin the company, so people would come and list their clothes, they wantto trade and they look for other clothes they want to trade, for,unfortunately, it was very infrequent. You know to find a good trade match atthe right time between two people. So, inevitably, you need some kind ofinternal currency, of value that you could swap clothes for and then usethat currency later to buy from other people who are listing clothes. It's acommon challenge for market places like this so because of that need Josh divedinto the world of digital currency, which then led to the world ofblockchain and cryptocurrencies and all the Cypher Pun movement. So he dived inlearned what would be the best version of an online currency which clearly wascryptocurrency because of that he got exposure a bit calling back in thesuper early days, even Satoshi Nakamura the creator of a bit coin or perhapscreate hers. We don't know as the to she disappeared was active, then so hewas that early. In fact, he even had some early bit coin, but unfortunatelyhe lost a lot of his early crypt...

...occurrency. When the Mount Gok collapsehappened for those versed in the world of cryptocurrency history, you willknow that Mount Gox was possibly the first exchange that was very, verypopular. Unfortunately, it got hacked and a lot of the currency was stolen bythe hackers and because of that Josh experiencing losing his cryptocurrency.He wanted to come up with a more stable and reliable and verified back upexchange for cryptocurrency, which made him look towards gold as a good storeof value to kind of back up the value of the crypto currency, which then ledto the creation of Voltore. So we spent quite a bit of time talking aboutVoltar because it was, and is it's still very much a successful company ofa bit niche, a very new cutting edge idea. So he wanted to create a platformwhere you can take your bit coin. Your or your crypto currencies and exchangeit for gold, and it had to be real gold gold sitting in a vault somewhere. Sowe have to connect these different ecosystems, the gold system of buyinggold and holding gold, and you know verifying it and validating it andmaking sure it's there and remains there and is safe and secure, alongwith the very decentralized aspect of crypto currencies like bitcoin and thencreating an ability to exchange those whatever the market rates are greatstory to hear all that. How that was created, definitely recommend you. Youknow, pay attention to that part, and I asked some great questions because,frankly, I was naive how this all works on the back, and I was super interestedon. How do you get gold to talk to Crypto from a technical standpoint andmake that kind of exchange work, which, unfortunately also means you have touse the banks? That was a sad aspect of this. I think it given that we want todecentralize and move away from the banks and fee at currency, but it'svery much an entrenched part of our system and since gold is very old andintrenched in that kind of financial world, you do have to enter thetraditional backing system in order to exchange gold. You know I say that I'mgoing to come across like an advocate for Crypto, and you know the destructdestruction of the the old banking system, and I am in some way. I there'scertainly a part of me- that's frustrated with the current the bankingmodel, especially when it comes to simple things. Like transaction fees,currency exchange fees, just fees for holding my money. I think that'sterrible and all the intermediaries between banks, when you're sending fromone to the other or any kind of transaction you do with it all, takinglittle pieces of it and then recently I went through the experience of simplytransferring my crypto a small amount from Ukraine to me here in Canada, andit was just so straightforward. You know went from a wallet of a friend ofmine in Ukraine who had the cash. I had there and turned it into crypto andthen sent it to my wallet and it appeared and that's it, no banks takinga little piece of it. No need to go to a branch, it's just a wallet. I haveprivate cold, wit, storage and a wallet he has private, cold storage. Amazing,the future very simple example of the benefit of Crypto. The story continues,of course, with Josh. We, you, then moved on to the current project thestandard. Now this is challenging for me to describe. We spend a lot of timebreaking down a great example of what the standard is in a nut shell. It. Itallows you to borrow money against your assets without using any kind of thirdparty, no need to go to a bank or lender. You simply can enter what iscalled a decentralized financial dow and through what the standard iscreating baron mine. This is not actually out yet. We talked about aconcept for an MB that will be coming out soon soon could be six months or itcould be several years. We don't know exactly when, but that is what Tosh isworking on right now and the standard will it allow. You to you, know, put upyour gold bullion or put up your bit coin and then borrow against it. So youcan always have a float amount of money that you can actually use in the realworld while still holding on to your cryptocurrency or gold. So it's, Ithink, a very useful service. I actually would probably use it rightnow if it was available. I had a lot of questions around the security aroundthis. I tried to you know act like I was the general public. I guess I am totry and verify parts of what I would consider risky just in my basicunderstanding of technology. Like do, I trust the owners and creators like evendo I trust Josh and the team at the standard and the code they're writingkind of trust, the different platforms that are talking to each other, thecryptocurrency exchange, the Dow that offers this service. You know theinterface. How well can be protected from hackers. Is anyone skimming youknow some kind of fee somewhere or controlling the wallets? The addressesyou know anything I transfer there will just disappear all these fears, whichhe you know, attempts to answer, and there is no good answer yet in thesense, nothing is full proof, but like most new technologies, this is going tobe a case of over time, trust becoming more standardized, more general acrossthe population, as more people use it and it is, becomes, you know, moretested, more robust, more. The code has been refined over time. It's shown tobe impervious, that's the hope, of course, and then it becomes s astandard. So as it is named, the...

...standard, great story, that kind ofsums up, Josh's business story- that we explain thus far over the almost twentyyears of his life that we kind of covered in that maybe more twenty fiveyears of his life, so that whole story is this podcast but, as I said at thestart of this very long intro to go along with a long interview, this isnot just about Josh's story. This is about him explaining lots of keyconcepts and US using something simple examples to explain how these new formsof esential ized finance might be used in our everyday lives. So I think thatyou will find very, very helpful. Okay. So that's my intro, the interviewscoming up in a second, but of course I have to mention the sponsor for today'sepisode. I should also say I mentioned the sponsor for today's episode to JoshOff Air Afterwards, and he was very excited about this. I was. I was gladto hear that another founder who can see the benefit of outsourcing youremail to someone else. I do feel funny talking about such a modern technicaltopic of decentralized finance and crypto currencies. Now, I'm switchingto a very old in terms of internet years, technology, email, something westill use today, something that a lot of humans on this planet are spendinghours a day just sitting in there replying to messages, sorting messages,ignoring messages feeling stressed about missing out of what's going on inthat in box, or not replying fast enough and, of course, using your inboxlike it to do a list that kind of controls, your life, all things. Thatshould not be the case, so I recommend, if I describe you, you consider hiringa virtual executive assistant to manage your email for you and also all theassociated task, like calendar management scheduling, interacting withpeople in box management, for your social media in boxes replying tocomments and social media managing communities, data entry, all the basicthings that you're probably doing right now, controlling software recordmanagement for your customers, maybe invoicing all these basic things thatyou don't have to do. If you just hire one of our virtual executive assistanceat in box done com they're all fully vetted tested higher trained by USinternally, we have a ten step hiring process, including a course that we runall new hires through before they begin working with clients. We also assigntwo people to every client, so you get a backup. You always have two executiveassistant, virtual assistants, working with you, they're dedicated to you andyeah. It's a business been running for almost four and a half years now we'vegot clients across all kinds of amazing industries. I don't know if we have acryptocurrency client yet so maybe if Josh becomes a client, he might be ourfirst cryptocurrency founder, but we have clients like accountants,bookkeepers, car sales, restaurant owners, online coaches, venturecapitalists, doctors, dentists, all over the place. Everyone has email,everyone needs to break free. So if that's you head to in box, done com andbook a discovery, call to get some help with your email and we love to help youall right. Let's dive in now to this very extensive interview with JoshuaChikara Joshua. Thank you for joining me today. It's an absolute pleasure,your right yeah. So as we were talking about off air, we have well. I have alot of things. I am interested in you because your history, as working inAustralia, you're, obviously here because you are doing some things inCrypto, which is huge and very popular right now and I have had a lot ofguests top KRYPTOS. I love to sort of open up some of the mysteries aroundthat topic. I mean. I know you were around early bit coin Mount Cox.Obviously it's funny because I played magically gathering when I was ateenager and M Cox obviously started as a Matin, the Catherine website beforewe came a crypto exchange, so there's so much I want to talk about, butbefore we have any history, I really just like a good summary. So voltar isthe longer running company run now and then the stand. I feel like as a spinoff kind of project new business. You want to just introduce those two for us,yeah sure so voltore was the very first after mount. Gox collapsed. I reallywanted to focus on building an exchange where the exchange was ultimatelytransparent, like radically transparent, because at the time mal got fill. Thoselistens. That don't know was one of the Tira was the first exchange for bigcoin and at the time there was a whole lot of big kind, things that were justcrashing and going disappearing getting hacked, and I I thought this is justinsane. You know it wasn't just me that lost a lot of money. It was likewearing a movement where, in a movement to change money fundamentally and thesegreedy bastards are ruining it for the whole movement and so yeah that was thewhole idea, was to not only have an ultimately transparent exchange whichand ended. This thing called the Glass Book Protocol which we can do aboutlater, but also implement that we start trading against other rare assets likegold and Siver, rather than trading...

...with the art, which is the whole reason.We're getting away or getting into big coin was to get away from feart, and soit was sort of a shame to see everyone just trading against USD or or yen,instead of actually trading, as other rare, rare numbers versus rare metals,it's a great combe. So that's that's where that came from and then thestandard is a protocol deforou which is sort of an infrastructure protocol,because there's a lot of gold like ten trillion and five of that is inpersonal hands, just sitting involving facilities around the world, gathering,dusk and storing value. So we wanted to give that more value by allowing peopleto use that to collateral ize, smart contracts and issue themselves, a fearpegged stable coin, backed by God and Crypto kind of like make her. If anyoneknows that, but the next generation of that basically, okay, yeah deathly,want to dive into both of those two but I'd love to maybe cover them, and wehit them in your story. So yeah we were kind of discussing of fair for recordyour last name Cigala and the spelling, and you said it might be Polish. I saidat an Italian: We don't really know were you actually born and raised inEurope or what's the family history I was born in Berlin and the thing is. Iwas born stateless to my father, who was also stateless, and so he becausehe was bonsals because he didn't know his father. He could then travel backand forth across the burden wall, and so he had this special sort of passportwhere hey you're allowed in the east. You live in the east, your mother livesin the east, but you're also allowed to go because you're, actually not east,Berliner or Berlina at all. So you know being bored stateless. I guess I'm anatural born anarchist. I don't be Sensi a birth, that's amazing!Exactly! But then you know mother she's, Irish. So she got me a British passportand then I've being you know, got different passports and stuff now, andso that's all good, but yeah. It's a weird thing when you think about notbelonging to any state. When you start to think about what the role of thestate is in protecting the citizenry and its borders or its systems, it'salways a fascinating thing, and I maybe that had a part to play with myfascination in recoin yea. No doubt I mean how could you not sort of see thedots but connecting the dots there between stateless versus you know forcurrencies? I was attached to a state so interesting and is your dad like?Did he eventually get a passport or what happened to him? Yeah? Finally,like he's fool Berlina, and he would have to go to the Osland, a Bohea whichis like the immigration place, and he would stand in line helping all thesepeople that didn't know German to fill out their forms because he was a foolgentman, but but he had to be there to like. You know renew his things. Howyeah he finally got German citizen set. You grew up then in Germany was thatwhere you went to Scot now, no, I grew up in Australia, hence the wacky accent,but basically my mother moved and immigrated to Australia. When, when Iwas like five or six and from there I just sort of yeah, we stayed there andgrew up in South Australia down south, then yeah moved and lived in Sydney fora while. I worked worked there and got into special effects, basically asworking in special effects and three animation when it was still s Gis. Thissilicon, big silicon, graphics, machines there. For those that don'tknow the these boxes were like the size of fridges and like toy story, was madeon that the original toy story and when I first got to Sydney, I got asked towork on a project called the Matrix, and I was like yeah I'll do a littlebit on that. I didn't even know what it was. I just thought I a do this likehelping a friend out doing the sign waves on the sentinels and and thenafter and I didn't ask for more work on it, because I decide I'm looking foractually doing advertised. I want to do film or do more advertising and becausethe fast turn around then you're doing in something new every every month andit's more fun and film you like working for a year or something and anyway likea year or something later I go to the cinema and watch this film and I'm like.Why didn't I do more on that? That's yeah yeah! I remember watching theMatrix the first one and I was like that bridge is really familiar with therain. Oh Yeah. I know why, because right next to station in Sydney so yeah,it's is fun when you're in the the city, where something was filmed but wow youreally missed out on the chance of like I mean it's funny too, because theMatrix is so much about. You know illusions of structures and you knowreality not being real, so ill. These kind of indications towards what you'reworking on now yeah with your I don't know if it was a passion or like justan interest or you decide to go into digital design because it was a way tomake money. Was that you're? Like a be talking graduating from university, andthen you went into that career, is that or is it before that? No, I left schoolearlier because I had enough of it. It...

...just was too slow and annoying for meand I went into real life and I got into real life went man. This is shit.Sorry excuse, my friends that this is crap. I better go back to school and Iwent to the sort of adult reentry after a year of being out all of a suddenyou're, an adult and you're like okay- and I came across this little three danimation suite in the school which was on these really. What are they like,like pentium, something or other anyway? They had this program called threestudios before three studio Max. If anyone knows that it was like thepredecessor on Dos and you could like create a sphere and instantly shaded with a light- andI thought that's amazing, like I- just fell in love with the fact that youcould take a sphere and just instantly render it and then animate it with somekey frames and this and that and the other thing, and I just really felldown a deep rabbit hole with that absolutely loved then ended up makingAustralia's first animated short film on that with another guy, and then Icome, it was called under pressure. It was called under pressure, but youwon't find out. It was just our little thing and I've been actually trying tofind it and yeah. It's really kind want to release it again. You to haseverything yeah I mean it was his five minute thing, but it took a whole yearto make yeah. It really sort of launched me into into that sort ofspecial effects thing and there wasn't really any school you could go to backthen for this stuff I mean, I know they had three d studio at this Ado. Rendarscore, but it wasn't really anything accredited. It was just like hey. Wehappened to have this software and I just OK, you know, would stay there,but I dropped every other class would stay in this little lab for days on endyeah, that's cool! You sound like me when I was eighteen and I discoveredhtml and I was trying to design websites myself and you just sit theretry to move a pixel. You know one left all right and just like waste o time,but it's so much fun when you're doing it yeah yeah right absolutely. Now Ican tell your career based on. I know you're linked in here. You definitelylike you continued in animation and design for a long time, but youtransitions with to television. Is that what happen? Because I seen a awful lotof TV stations? I recognize growing up in Australia myself to chanoine endseven. So how did that happen? Yeah I mean I was I in post production for along time, and then TV pulled me in to be ahead of their special effects,departments and yeah. So it worked in television. Then doing their promos andspecial effects in certain shows and things that they were needed to be doneand yeah. In the meantime, though, I always had multiple startups going inthe background, because who wants to be bored so I had. I had the sloth of startups that werehappening in the background and when you're young, you can basically dealwith for our sleep wits on end so yeah. These start upsreally led me down a passion of alternative economies, especially swapstyle, because I really wanted to create a platform where people couldswap things rather than buying and selling, because I just felt likeespecially after nine eleven happened. I really deep over into you know notonly into like the hardcore conspiracy stuff, but also that kind of led tounderstanding banking and money and fundamentals of money, and you know, Ithink it's something that's definitely not taught in school. If, where doesmoney come from? What is money? Is it? Is it back by God? Where does gold getits value from what is it a D and these sort of fascinating questions, and thenthat led on to reading misers and all of the Austrian economists and andreally understanding boom and bus cycles and and all of this stuff isfound out really extraordinary, because it's stuff that you just don't gettaught a sort of hidden? I'm kind of curious about the connection, then,because a swap style which you just mentioned, is in the fashion spaceright, like its clothing swap and then I think before that you actually alsohad some another start up a fashion Batik, I'm not sure, I'm seeing inhistory here. So you clearly had an interest in fashion as well as notreally I mean my girlfriend at the time or wife. She was right into it and westarted swap style before the fashion be take, and but the thing was thatswep style was actually when we engineered it. It was to swap anythingfor anything, and this is a really interesting thing for anyone. That'sbuilding a start up is that when we did anything for anything we had all themechanics and all the categories and everything like that. No one took upthe story. They're like a WHO wants to swap some L. I don't get it. I mean yougot to think this is the start like very early Internet days, so peopledidn't quite get it and as soon as we just went and dropped everything elseand just made it women's clothes all of a sudden. Every Woman's magazine wantedto do articles about it and it was so fascinating. We I had. We had TV showsin Fox over in America and all the...

...women's mags just doing stories,because it was all of a sudden, their niche, and so it sometimes just likeAmazon started in books. Only sometimes it's really good as an early start upto really focus in on one thing and then get those niche publications totalk about you and how did it go and just to clarify to so swap style was aplace where, like a website, you go to Swepson, you would list your ownclothing for swamp and then other people would list tairs and you wouldjust communicate directly and say where you swap this for that and then yeahsending the mail. That was the basic idea, what he raitzina model with that was. Basically, let's see what happens.Actually what happened? It's that I realized very quickly that swapping isa really terrible way of doing anything in terms of a market place, becauselet's say I really love your shirt. Your like I'd be like. Let's swap- andyou say, Oh you know, I don't like anything of yours and the deal fallsthrough and be stuck with that, and that was it even though there's anentire market place, the de would fall through. Nothing else would move, andso I already started looking then at some sort of like credit system thatwasn't based on money. I was trying to figure out. How can we and that'sactually, when I started stumbling across some of the work that the cipherpunks were doing online to figure out de centralized money, and the writingswere very obvious that this is a problem that can't be solved, which wasthe double spend problem. You know when I send you a J peg, you don't know ifI've sent you the J peg and I've deleted it like it's. Just a digitalthings are abundant, and, and so this problem was unsolvable, every bit ofliterature that I read said it was unsolvable, but these crazy guys kepton working at it and I can eat to the train track so to speak, and that's Iguess, how I came across the toshes white paper so early on, okay,interesting, so you're, making me think of house swaps right now, because I'vebeen getting some ads on my social thrown at me about. I swap my house andI go live with someone else's house and for the same problem. You justmentioned like El. What, if I don't want to live in their house at the sametime they do or you know I want this person's house and was a third personinvolved. We might all want a Wa. So of course, naturally they have created acredit system where you can basically give your house to someone else. Youget credit wi in the system and you can spend those credits on other rental. SoI can imagine for clothing something similar, but if I was presented thatidea today, I would say well, of course you would tokenz that and you wouldn'tbe a credit to be a token you'd cat, because it just be the natural choicetoday, but going back in time with tie sort of January two thousand and onelike you said all the way up at the I don't know if you close it down or youor just you know, sold it or whatever twelve years later through that wholebusiness. Was it your main income stream during that time, and or did youwhat happened? No, I was, I was still doing three d work, free lancing anddoing some advertising and channel branding and stuff like that. So Icontinue working a little bit, but yeah eventually sold it to someone else whothen just let it die. Basically, unfortunately, but a bit Eyah yeah thatyou know it is what it is and it really opened the gates to understanding moneybecause one of the things you know the obvious idea is building a creditsystem into the centralized database. But first of all I knew that e God gottaken down by the government because the government doesn't like you makingfake money like it doesn't like people competing with their money. That'sreally what big coin broke is the fact that there's no one to go after andthis wi so totally left, because it was an extremely dangerous thing to do.You're taking on the central banking system of the world you're taking onthe Petro Dollar you're taking on you know, the US arguably went to majorwars to protect their oil settlement. In dollar monopoly around the world,there's stories of like a daffy wanting to do gold settlements. Saddam alsowanted to do the similar things, and you know where are they now? But sotose really solved this, and now I feel like people could do a centralizedcreditis. I mean you see that already with like stock photo sites and stuff,you buy credits, and then you spend those there peg to a dollar, but Ididn't want to create some was swap style, which was then emulating acentral who am I to like print new credits. Then every one has to trust methat I'm not just bringing credits and buying myself stuff on my own platform,or you know, kind of like tether might be doing. But this is the thing is thatI really wanted to build something else, and this is what led me down the pathof finding these crazy anaca type, people that were trying to buildsomething totally different, and it really resonated with me yeah yeah.It's such an important point because there's so many examples of a platformor a community that have their own...

...virtual currency or credit, I mean youcan take massive multiple on line player Games where they have aninternal credit system and they can bind swelp their items and so on andthat functions okay. You were making me think of remembering specifically whatit was, but I listened to a podcast about wee chat and at some time earlyon in we chat life. An internal credit system was built in the Chinesegovernment had to say no. You can't do that, because people are using this nowmore than our actual currency, so they have to shut it down. But it isinteresting that this is what led to your exposure to crypto currency in thecipher movement, so connect the dots. Here you were in digital design,yourself, you're, a running swap style as a side project, possibly with yourthen wife. You discover this world of Crypton block chamber. It's still superearly. I feel like two thousand and twelve quite from wrong was sort of themount cocks or even later than that. Right we collapsed what happened likebecause you you were in Malos too, so how did you finally get yourselfinvolved in that land yeah? So I started in late two thousand and tenreally deep, diving big coin and the only thing you could really do was buyour pack or socks from some guy in. I think it was somewhere in Europe andthere was Mount Gok, so crowdid just sort of started as well. It was likewow. This is nuts amazing. You know if suddenly, the deep web had a function-and you know if you look at it from a philosophical rather than some sort ofmoral scope. It really was an interesting time, because not only areyou disrupting government sort of ability to control money and inflation,but you also had the ability for people to voluntarily trade things thatgovernments might not like whether you like or dislike that it's a reallyinteresting lens to start looking at how society, if you take that as firstprinciples and project that out what would happen, and one of the thingsthat we really saw happen was the fact that drug market places startedbecoming really safe because all of a sudden, the consumer could givefeedback negative feedback to a drug dealers like when was the last time hehe met some drug dealer down the back alley and it started shouting andeveryone walking past this guy's selling crap cut with whatever you knowyou just get a bullet. So this was the first time people and you know anyonethat was able to use big coin at the time. You know it was very technical.It was a very, very rudimentary system, so you had to be very technical andnerdy. So a lot of the people using silkroad were like university studentsthat had access to all this testing equipment, so they had like by producton these dark webs and then test it at the universities and then writefeedback like well. There's this much agent of that and became really pureand people could lay. But it was a fascinating sort of just to watch thisplay out going wow. Suddenly, this trade is becoming a lot safer becausepeople are getting better product plus you have to sell good stuff to justlike Ebay to be able to sell more expensive, because you've got a goodreputation and anyone coming in you, you would have to like basically haveno profit because they have a new account. So there was this reallyinteresting dynamic that was playing out and, of course, with that comesreally negative, constant news and headlines and arguments against thissort of weird thing: that's just for drug dealers or it's just a tulipbubble, or it's just a there. was you know all these typical arguments thatyou got back there, but it was an absolutely fascinating time to seeingthis new wacky technology full of people thatwere idea logs and nowadays, there's a lot of everyone in their doggers hasgot a little bit of an investment in this, but back then it was reallypeople that were fascinated in either the technology and cryptography, eitherin ideology of like a Naic ideology or even libertarian wasn't an ArchiasLibertarian, and so you would have these extraordinary conversationsonline about philosophy, and you know what other community does that happenin really and so really really interesting stuff sort of played out.So I went a little bit of way no well. The only thing I don't know here is:What was your role in like? Were you participating at this point or just youhaving conversations? What was your your job that was yeah? Like I mean Ihad an account, of course, in between talk and stuff to she was still around,but you know I didn't really. I just sort of was doing my own thing. I wasahead of you know the three D channel nine at the time and I has had a lot ofarm, but I was definitely already working on it, so we implemented thembig coin, Inter swap style, pretty quickly. Oh Wow, but t the thing was:no one knew what they had got this...

...emails like. What's this big kind thingand I'm like? Oh, I have like a page explaining and I was way too geekybecause you didn't have seed phrasers, so backing up was really hard. I didn'thave hardware while it's the original qt. While it was just like this, whichwas the reference Wallet of Big Coin, that was the only on that you couldhave. It was a complete nightmare. People kept on losing money, and youknow mede full on take care to use it, but it was fun, throwing it in there.Okay, so I feel like there's a couple of yearsbetween this and you starting Altaro. So is it a case of you're just livingyour life you're working, a channel nine someone had bought swap style, sothat was no longer on your plate. You're exploring that underground world,you know in your nights and weekends and then I'm guessing. If crept me. IfI wrong your source of Crypto the time being Malco, then it imploded andthat's what then triggered you to get into. It is up kind of the chronologyof your journey yeah. I loved building little things and little weirdapplications like price checkers or you know just stuff, that's kind ofrudimentary and but yeah. It was really after seeing multiple things collapselike there was a service called Insta Wallet, dot or think I was and doganyway. It allowed you to like as soon as you open that website it wouldgenerate a wallet address and the URL would be your wallet. So you book markthat and you didn't need a pass, but nothing you just sort of instantly haveone and when you go back to your bookmark there it is, if you lose yourbook markets gone and people were just using it. Of course that wascentralized seris all of a sudden they got hacked. I say that because theyprobably just ran off with all the funds and you know back, then peoplewere throwing around hundreds of thousands of these tokens becausethey're really sort of just funny play things and it was so cheap right likethat's. The point too, like could be billions of dollars now, but back thenit was hundreds of thousand of dollars yeah exactly exactly, and so it wasreally that I had enough of all these people running away with people's money,and I wanted to build something that was truly transparent. So yeah I'dactually moved back to Germany at this stage to spend some time with my father,because you know I've never really spent much time with him and- and hewas here- and so I wanted to you- know- get to get to know him better and youspeak. German is assume yeah yeah, it's big job. I mean I didn't at the timeand now I speak very well because I've been here for like nine years ten years,almost okay, but really what I wanted to do was build something that wasultimately transparent and also removed. The banks from the equation and had abank independent exchange that could tray between Bitcoin on physicalbullion that was held in high security, voting facilities, top to yourfacilities that were fully insured and fully Ardite, and this was somethingthat banks can't do. Banks can't get fully ensured or even fully audited,because these institutions run on fraction or reserve. You really don'tknow how liquid they are, and this is the beautiful thing about God. It'sjust a bar of metal sitting in a vault like fully really really primitivemoney. You know, and the great thing is in order to comes in and counter looksat the serial numbers, there's a chain of custody. So you know that it wentfrom the mind of the smelter and has never seen the sun straight into thevault, and these are l, be a May good delivery bars they called and that thatit just sort of means that you can absolutely be assured that S. ninetynine point, nine nine percent and that you could easily it's very liquid. Youknow the gold markets, the second most liquid market in the world under theeffects market. So it's if, if it's like never seen the sun, because thenit's you, don't need to check it again. It just sort of flips and floats aroundso right. So this was the idea behind voltore. After the Mount Cox Hack wasreally to allow people to hey. I just got paid in big coin I'll hedge it inGod, because I ran a TV shop. Let's say I sold a TV for big coin and I'll holdit in gold and then when I need a restock I'll, sell the gold back to bigkind, and hopefully my supplier takes bitcoin as well, but it was a way toreally hedge out the volatility of Bekin in another rare asset. So theseyou know rare numbers versus rare metals. It's it was kind of a marriagemade in heaven in my eyes, funnily enough, big coiners couldn't stand, Godand gold people couldn't stand big on and I never understood it. I was likewhat are you guys fighting about? There's the enemy right there, it'scalled general banking. I was actually thinking so many times. I've heardpodcast where yeah there's a gold believer in a bit clin believer andthey both you know the store of value argument. That's what bitcoin might eyou the best case use case for it. So it's replacing gold, therefore, butyou're right. It doesn't have to it's just another store of value, and youare the first person I've actually here or at least create a company thatspecifically about the cross exchange between those two commodities. SoThat's interesting but yeah by the way you describe that initial idea. For itit was well and truly fora already...

...converted bit Clin users right likethey were receiving the bit coin. Then, coming to Voltore and saying I want tobasically back this up with gold and then yeah bace versa. You could takeout bit coin, you know and the gold goes back. So can you tell me you're inBerlin, I'm assuming you have this idea yeah? Well, what Soden? When you havethe idea, I won't even know how to begin doing what you just thought of asan idea like. Do you go find a gold supplier and then an engineer whocan then make a exchange that works with this goal tofly like what's the engineer of this process? Yeah I mean this is the thingright is that's why I love the Steve Jobs quote of you know: Stay Hungry,stay foolish because he's sort of foolishly think I got an idea. Let's doit and ye and then it's really the heart of hardthings is building a startup around stuff. But basically I was lucky enoughthat my half brother over here is an absolute LE, brilliant engineer and hesingle handedly coded the exchange and then also way down the track later on.We were the very first exchange in the world to implement the lightningnetwork, for the same reason that I could say, hey fillip, you know: canyou chump on this problem for a while and Okar? It is so that was reallyhandy but also being in Berlin, and it's just a jump skipping, a hop awayfrom Munich, which has got a lot of the gold industry in Germany and thenanother hop skip and jump away from Switzerland, which is obviously hollyrenowned for its gold industry and also in London. So it's really that wholearea between the London bullion markets, Switzerland, Munich, Berlin, it kind ofjust sort of fit. So we had a meeting with one of the largest gods suppliersin Europe called Pooram and they really loved the idea. We went in there firstbecause we didn't want to give them an idea say we want to build an exchangebetween there like a okay, okay and then we're like we're going to do itwith big kind, because you got to remember for things like back, then bigcoin was only for drug dealers just like the Internet. Actually, for theyou know the very first people on the Internet. It was only for pornographersyeah and it had a really terrible mad like it. What are you into pornography?Why do you want the Internet? Like not like what there's really gooduniversity like it's, but the narrative, whatever in believed,was that it's just for drug dealers and stuff, and so there was a lot to sortof get around and but yeah. So we took a year to basically build the exchangeand tested and the thing with big kind. You can't move fast and break things.YEA, like you cannon silicon ballots. If youbreak things, you lose everyone's money, so you can't really build an MP. Youhave to really build a quite a hefty infrastructure around it, and so I didtake a while back then plus we're really inventing stuff as well. So itwasn't. You couldn't just take a library, Java, Crook Library and plugit in and Hey Presto, you have a wallet really. You would have to build yourown wallet and own back up solutions on multi SIG solutions for security. Itreally. You know we really deeped oven. You know, we've been around in twothousand and fifteen and we've never had a hack or any anything like that.So touch. Would we've been a security obsesses that, since the beginning andsuccessful because of that? Okay, so I fig me if I get to super basic here,but this will help me and and listeners do not understand too, and I'm going toask this for when you first rolled out the first version of the business, butI feel like it might not be that dissimilar from what happens today. Ihave a bit kind in my own Wallet Right now. I want to use Voltar service. Sodo I transfer my bit coming from my wallet to a Wallet on Voltore and thenhow is that hedged against the actual gold, like this Altoro talk to a Swiss,vault and say this gold has now been you bought this big coin like how doesthe interaction happen? A yeah pretty much so? Basically, a user we're acustodian of the big coin. So people do they generate a wallet address with usand then people send their crypton there and then a little number goesbump a bomb to reflect that state change. So now your big coin are storedby us now for the very very hard cord. I definitely think- and I keep alwayssay it- don't use exchanges as well. It everyone does, especially if you knewin this game, but you shouldn't we've never been hacked or had anythinghappen, but it's just better that the whole ethos of big kind is to be yourown bank and to take that few days to really learn about security of privatekeys. How do you secure digital assets but yeah? So people people have thatdatabase century and then what we do is we buy good delivery, bars big. Youknow, either kilo bars or half a kilo bars, and I then we sell those off tomultiple people so, but it's allocated.

So what allocated means is that if wego brokers in exchange, we're not doing our business properly, it doesn'tmatter. Liquidators can't touch our clients assets because it's not on ourbooks is really important, because if a bankgoes broke, many people don't know this, but banks actually own your money. Whenyou put money into a bank, it's not your money anymore. It's legally theirmoney and they pay you some interest for that privilege and they can gospeculate and do all sorts of stuff with it, and that's why you can havebail ins and stuff where they just don't pay you back. You know it'shappening, cypros right, right, yeah, so it s. So that was the point. It wasto build this legal framework around allocated bullion and then so whathappens? Is We have this God and once that God is sold off to a bunch ofpeople over time? We of course buy a new one just before the last bit issold out and depending on the volume on we'll have what's more happening andit's constantly going and being sold back or so we sell to the wider bullionmarkets. Once people start selling off, let's say bit: Coins ride up the topand people start buying a lot of God and then becoming crashes. People StartSelling the God to buy back buying the dip. That's when we'll buy it back offthe client and sell it on to the white and pole markets, and so there'sthere's a lot of cogs. Moving in the background, but we are still thecheapest way to buy and sell God. Of course it's Alicante, it's not God Imean you can take it home to cuddle if you want, but we weren't built for that.We were built for a large scale in and out easy movement plus. If the stuffhits the fan, you can go and get it and collect it or get it sent out to you.We do have that option because it is your goal and you can do whatever youwant with it. But it's that's where it gets expensive, because there's allsorts of insurance as soon as silver leaves the vault. It attracts taxes andVAT and all this stuff. So okay yeah it's designed for it, quick in and out,and that's kind of ID yeah, okay, so just to clarify a couple things: if nowthat it's going to happen, but if you guys went completely out of business,disappeared yeah any bit con I've transferred to your custodian ship. I'dactually just have the gold in wherever the vaults were that's associated withor no. So when you put big kind on the site, you then have to buy God withthat. So you need to play a by order. So we have two mechanisms. One is afort water book exchange where you have an order book. This is basically a lineof people that want to buy and a line of people that want to sell kind of andthe people that want to buy exchange. Okay, yeah standard exchange. It getsmore expensive, as people want to move down the line it gets cheaper on thatway and and where it meets the have the spread. Yea and we've just recentlylaunched like an easy by and cell, where the counter ass counterpartyevery time, because a lot of people just wanted to quickly by God and thensell it again, but we are implementing right now. We had it for a long time,but we rebuild this exchange in the ground up a couple of years ago and wehaven't implemented this feature yet, which is like an auto trading, butalmost where people would take a few boxes and it would as soon as the bigcoin would arrive. Our system would keep an eye on that address and as soonas it arrived, it would go and by gold, and then you know now we're making thata little bit more advanced and back then, in the day, people would in myend directly to Voltar, and it would basically mind real God with awouldhave go to is kind of interesting kind, cool yeah. What a connection soyou could almost have. I could set up my mining facility. I'm in Montrealhe's a lot of water energy. I could sit in next to a hydro plant. It willgenerate bitcoin into my wallet at Voltore, which is then in turn turningit into goal. I could turn it to go to. My water could be turned into gold,basically, but yeah yeah, absolutely absolutely okay, so that makes sense tobe so really. The main feature here was it's the exchange. If I want to playwith both a cryptocurrency and gold, knowing that I actually on the gold,when I have the gold on your platform, where does, though the one part I'm alittle lost with, obviously with Mount Cox, it gets hacked. All the walletsaddresses are taken by the hackers, so they get all of a crypto that was thereso then in Disyer, four hundred yeah, sixty nine million or whatever it was.How is your system? Obviously, besides the better layers of protection we nowhave with exchanges, but, like you said you know, coin base is still exchange.It still has your crypto rather than you have it. Unless you pull it intoyour own wallet right, so where's, the extra layer. That is it only because ifI turned it into gold it would be protected or is there anything elsethat I no so that on yeah? So one of the things that I really put my mind onentally when the Mount got heck happened, I wanted to build adecentralized exchange and they exist nowadays. But back then there was onlybig coin. There wasn't a theory, and there wasn't. These two are in completesmart contracts that could write complex. You could execute complex codeon a Blockchain, but big coin didn't...

...have the what's called opera turn,because basically the programming language of big coin wasn'tsophisticated enough to allow for the centralized exchanges. So, rather thanthat, I sat down and really figured. I want to focus ontransparency because hey what's the blockchain, it's this amazing,transparent mechanism where you could follow the money and and see how muchis somewhere, so what we focus on, rather than a decentralized exchangewhich we couldn't build at the time we focused on utilizing transparency, sowe took the blockchain as an inspiration. So what we did was createthis thing called the glass books protocol and how it works is that wewould give everyone anon Onymus ID. So we would give you an anonymous ID, soonly you and US would know what that is, because we isould it to u and then youcould log out. So we don't know that you're checking and we would publishevery ID Code and how much big coin that IDA has and how much gold thatidea has. So anybody at any time could check their idea and check. I E itthere's that much should be on my account and we can't fiddle with thosenumbers, because if we do, the sum of everybody's holdings would be out right.So the first step is okay. My thing is right, so I can assume everybody's isright. Otherwise someone will be screaming and shouting on the Internetsomewhere, because we have a lot of clients and they can check at any timeand then we publish the cold wallet addresses and we had at the time thisconcept of a warm waller won't boy, your listeners with that, but basicallythe cadwaller addresses people could check the some of everybody's holdingswas less or equal to the amount of cript in the cold wallets, and so thisall of a sudden allowed people to audit us in real time all the time, but notonly that we had the voting facility statements. We have the insurancepaperwork and the auditors paperwork in real time. So we could see how muchgold bullion everyone has, how much gold everyone's got an make. Sure thatalso equals out- and so this was a real game, changer in trust of centralizedauthorities. Of course, you still had to trust that we're doing what we'redoing, but if, for instance, Matt Gock had this, because the hack happenedover a fairly long time with Mount Gox, they lost a little bit of money. Theysort of hid it from everyone turn into a Ponzi scheme where they're trying tolike get new clients in to pay for anyone, that's withdrawing and, andthat then just spiraled out of control as they got into more and more legalproblems and had to pay this and that and just ran their business terribly.But if there was this glass box protocol in place, I think even theowner mark up Pellas at the time would have been happy because even he didn'tknow that he'd gone into a Punze that he'd gone into a downward spiralbecause it was just all to complex so having this sort of grandma friendlytransparency allows for the community to give you a little tap on the shot. Isay: Hey, there's someone not right! There's like a kilo missing. You knowwhat yeah what's going on or whatever so yeah. This is how it's done. Okay,interesting as we've grown, though we have a lot of people constantlygenerating warm while it's a hot wallets and so there's there's a littlebit of technical issues there now with having ultimate transparancy, becausewe obviously we can't publish a billion different addresses and have peoplecheck, but yeah we're working on different solutions for that as well.Okay and yeah, I mean the short answer: Is there's no such thing as a secure,centralized exchange right? That's the end of the day it's impossible to until,but it is decentralized. so as even then, because even decentralizedexchanges, you have to trust the code. So with centralized exchanges, you haveto trust the code. You have to trust the banks that they're using and youhave to trust the business enseech nge. So there's three trust things that youhave to trust with decentralize exchanges. You only have to trust thecode because, even if you're a code, you still have to trust the code like alot of smart contract ordering firms, their business model is basicallypraying because, because they can read the code, they can look through it, butthey don't know everything. You know this is what hackers do they find thebit that you can't see and Reilig they figure it out, and and so this is atricky thing with complex mark contracts and we're seeing it over andover again I mean we saw a few epic hacks in the deface space because ofthis problem right yeah. Well, I was unfortunately in Einstein Exchange inVancouver one of the I lost a bit of money there and that was like. I justhad the money still on on my both in a wall and just in their account with theUSD and I was like wow. I didn't realize how vulnerable I actually wasit just the owner disappeared and much like you said, with a punses scheme. Ithink that's what was kind of going on by the SCENESI. It was moving moneyfrom one to the other, based on...

...whatever there was a call for money,but eventually, obviously here's no more money to that with an you're outwhich forced me, as you kind of Lude, to before, to really learn how to putmy crypto and cold storage for the first time and go okay. Now I know feelI for safe. He said now I feel like I could lose the you know. The key and,and anyway it's safer than it could havebeen. I would like to maybe switch to the entrepreneur hat you're wearing hasthe founder of voltar yeah. Well I mean that one, but you know you came up andI think was your half brother for Waltari and obviously cool idea, evenas a basic idea. You just allowed a person to have gold and bit coin andjust trade them as they're going up and down and try and profit on the spreadright. So that's that's a simple idea in many ways, so you and your halfbrother figure it out. You get either whether Switzerland or Germany, the UK,the gold supply the communication between your centralized platform andthe supply, and then you go and tell the world. You exist right and you getyour first bit coin deposit into your wallet and the first trade with gold,and how did it go like? How did you grow this start up? Oh that was amazinglike when we hit the go button. You know we pulled an Arnide to really youbecause you have this deadline of like launching and, like things, aren'tquite ready and this and that and we go- and you know refreshing the back end tosee like a counts coming in and people starting to Chit Chat on these forms,because you know really, it was still early days. You know two thousand andfifteen, and it was just really exciting to see something that you'vespent so long being built being talked about. But of course the first thingthat comes out is like really really strange because they would all of asudden say it's some centralizing. Why would I buy God? Why would I, and somepeople really got it, and this is the interesting thing about voltore is, ofcourse it doesn't have the millions of customers that, like coin base, has orCZ with with finance, but he has this core customer base that reallyunderstands economics, and so what was fascinating is that these booms andbusts that we see there would be huge sort of signals in folto marketsshowing that we're heading towards a peak that a certain little bubble isgoing to pop, because the people using us were very deeply in a deepunderstanding of economic theory, B boom and bus cycles and all the rest ofit. Where is a lot of other exchanges that were just full of sort of moonboys that were just throwing money, anything and and would sort of live offthe troll box and chatting to each other, but so it was an indicator that,like any like sorry in drop. What's what do you mean man indicator like buyMichael? He just volume yeah like as soon as we started, seeing massive goldvolumes. It was the top and sure enough after, like a spike in our volume boom,it would drop down, and then you could also see as gold was being sold backoff. That were like heading towards the bottom. You mean in the bitcoin pricein the CRYPTO price. What do you mean a yeah, the broader market in the broadand not like versus scripto yeah becon versus God, so a God in the price of sothey actually had a. What we'd call a tradition like gold really was a hedgeagainst crypto. In that case, yeah, yeah yeah, absolutely absolutely, andwe had some amazing traders who made a lot of money like in two thousand, andseventeen would just put everything into God. It would drop down a and theywould buy it back a year later and it was six door and the other thing is ina lot of country. Well in Germany, specifically, there's like if you heldgold for more than a year or a big coin for more than a year, its capital gainsfree and there's different countries that do a similar thing. So peopleplayed it very, very smart with God, and so our customers they're veryastute customer and so yeah. It's definitely been an interesting ride. Ofcourse, I in that whole like starting a crypto business in two thousand andfifteen even now, is extraordinarily hard because we have employees, we havemarketing. We have all the rest of that serves to pay and gold supplies to paywith with feat you know, so it's really really difficult dealing with thelegacy banking system, who absolutely hates you doesn't understand. You thinkthat everything is money laundering and drug dealing and everything else whenit absolutely isn't like it's literally people that understand, I don't trustthe banks, because they're in fractional reserve. I do trust a chunkof metal, that's sitting in a high security voting facility in Switzerland. So that's why I'm using it, and so it'sreally a difficult, difficult thing to start a start up in the CRYPTO base.Because of this- and I think this is the reason why we're seeing such a boomin the defi space- is that hey we're...

...not going to deal at all with bankswere just going to be crypto to crypto only and and it's yeah. The barrier ofentry is a lot easier in terms of this sort of regulatory capture that thebanks have done, and the regulatory capture thing is a very fascinatingpart of the whole story, because banks have built so much regulation aroundthemselves and it's funny because he a lot of people, especially on the left,are like where you need to regulate the banks more and it's like. Have you seenthe regulations that are round banks? It's nuts, like the amount of rulesthat they need and people work up to hear every like it's insane and hey,guess: Who's! Writing these regulations? Well the banks and they write theseregulations to basically protect themselves to build a mode so that noone no startup can compete because they just can't deal with that regulatoryoverhead. So the thing is they had this for yours and years. That's why, likethe term fin tack, is a very new term and really there was no true innovationin financial technology until so to you release the white paper. Of course youhad papal that was kind of get. You know, pay power was kind of the onlything which was pretty revolutionary. I guess, but it wasn't massive and thisreally exploded a boom and the idea of FINTAC afterwards but yeah, it's a very,very difficult game to play. Building a start up in the space and there's a lotof regulatory arbitrages. You have to play like if there's a certain countrythat does something better or where you need to then move there and you'realways trying to stow your toes and all of a sudden. The regulator goes, maynot don't like it any more and or a bank just goes shut down. He like whyand like we're, not obliged to tell you and you I okay. So it's a struggle, andthis is actually one of the other reasons why a lot of centralized fedexchanges run off with people's money, because banks a lot of the time. Thishappens, a lot freeze and entire exchanges, money and the exchange mighthave a secondary bank or might not and they're like in the background, keepingit all silent and they go again hoping that not everyone will come wantingtheir money. So they're like trying to like make stuff happen and they may beopen a secondary count, but that first account has frozen the money until theycan prove whatever they want. Because this and banks really made a businessmodel out of doing this to Cryptocaria. They could keep hold of large amountsof funds, and basically you have to jump through a whole bunch of hoops asthe exchange owner to release those funds and, in the meantime, they'relike speculating with it all they're doing all the fun stuff that banks dowith with credit as funds and so yeah. A lot of time. Exchanges suffer fromthat and you don't even know the suffering from that. So but it'sgetting a lot easier. Now that regulations have sort of made banks bea little bit more on board with that, because there's been reports for yearsfor years, really strong reports that most big con activity like most of it,a highly substantial amount, is totally legit that the tiniest o mouth is darkweb stuff buying drugs, but the narrative on the news is, of course youdon't want to write about the person buying bedsheets. You want to writeabout this cool story about this dark web er. You know like I was talking inthe beginning of a fascinating as in say it's the same as like the energyside of mining. It seems like the it's big context as much as a small countryto mine and, and you realize, how much energy another industry is using inanother industry. We don't talk about that, because it's not as cool, but Igo just to fill one gap because you're talking about the bank system here,even with voltore. What is your interaction with the banking system?Like? Do you have to exchange the CRYPTO interfere to then buy the goldwith fear? You can't directly there's no gold exchange or without will takecrypto as a direct payment. No, the there's a whole lot of things that weneed to move around, so we'll trade it in other exchanges on multiple exchange.We find the best price and there's a lot happening in the back in O boy.Think, basically, no I mean there's a bank there on out there's Modil banksthere on our side because we have to as a business, but our users funds aren'tin a bank because they're either in big coin or they're in gold, the God. I Ithink I I between those two things you need to go through the banking system,still on some exactly yeah, because the gold industry, you know people talkabout the banking industry being antiquated, but t e. The gold industryis next level, like they're, still walking around with pages on their belland refecting each other yeah people like it's just weird, you know,and they really in the when we first launched voltore one of the where, whenwe first started talking to the gold suppliers, they were like. Oh Yeah,just fax us through the order and we'll look at it, and we're like this facingthing, isn't going to work, we're going...

...to have to help your tech team, becausewe're looking at high frequency trades between a very volatile asset and asecond not so, of volatile asset in comparison, yeah, okay and so yeah.Trying to deal with that and crossing that bridge was also fun. Okay, yeah!Well, I can only imagine, but I mean we're we're talking, O thousand andtwenty one, so I realize you've been through quite the evolution over thelast sort of seven years. One thing I don't know in all of this is yourmonetization model, like you guys as the founders like what was the plan ofthe beginning in how you would be able to help pay all these staff, and youhave to have so much compliance. No doubt, lawyers, accountants. Everythingis adventure back to that. He on my other question, yeah yeah, so we'rerunning for a year and then we thought we better raise some money, so we gotinto techs, which is like a ventail Er sort of Salerano launch pad thing, anamazing system where they take people that have great ideas and teach themhow to be. Entrepreneurs, teach them how to raise money and all this. So wegot into the program here in Berlin and that really opened our eyes and ourdoors and from then we raised again another round. The MODEL, of course, islike any exchange. There's a spread between the by and the cell on themarket order and the order book were taking fees, trading fees, but it was astruggle as well, because the people are used to paying really really tinyfees because in feat, exchanges it was fairly simple, like we have to jumpthrough multiple things: trade it on other exchanges. We should also addfees and, and then so we had to take a bigger chunk. So the trades were alittle bit more expensive. But for that, for the people that understood whatthey're getting it was well worth it because we were still way cheaper thangoing to a shop and buying God, because the spreads there, as they're insane sowere still way cheaper, but for the crypto trader that was just sort of inand out, they were like hmm yeah. This is this is too much for me and andthat's why we have like a core of really strong uses that understand thevalue proposition that we're giving and it's really helped a lot of people butyeah. It's definitely a niche product, and this is why we wanted to now lookat building out the standard which leverages the idea of holding physicalbullying and go from there. Yeah I'd love to switch to talk about how thestandard interacts here, but just a couple more around meltor, becauseoposite more years there in time is a fair to say it grew, even though yousaid it's a small kind of Nice user base. I can understand why, but did itgrow primarily through word of mouth, because obviously crypto and gold,especially starting in January two? Fourteen to fifteen, it would have beenlike on the news anything that was new and well even on the news, but on theunderground on the forms on the reddits, on the no discourage and so on. Right,so is that how you grew it did you actually have to hire pr and do a papertic campaign and all that sort of stuff? You know we tried all that stuff, ofcourse, but yeah it was primarily word of mouth. Primarily people would say:Hey you know what the coins going to a massive bubble and their friends wouldsay you should maybe buy some God, but I also would always be on differentpodcasts and different TV shows as a Max kaisers show, and because a lot ofthese early people they you know they love what we're doing so, and I hadbecause I was in critico early. I knew a lot of the people that had influencein terms of shows and things. So you know they were, they would invite me on,and that would then drive more traffic and yeah definitely word of mouth andme being around, and I then definitely had like events as well like I wasalways doing talks that people would always want me to talk at differentevents and stuff, so that really helped as well. Yeah, okay, cool yeah, let'sswitch to the standard then so, just obviously we've been talking for awhile people may have totally forgot what you just mentioned in the standardright, the beginning of what it actually is. So you want to give usanother overview of what the standard is and how did it come out because Ifeel like he was connected to El Toro and in many ways yeah yeah yeah. It isso obviously I watch a lot of CRYPTO projects and one of my favoriteprojects at all is the thing that's spawned defy. You know, decentralizedfinance. Of course, big CEN would arguably spawned defy, but in terms ofthe more next generation decentralized finance the maker do protocol wasreally what opened up the world of Defi, because you have these centralizedstable coins like tether, my Neuss, who have got apparently billions sitting inbank accounts, and you have to trust that they are and there's a whole bunchof risks with those you have the fact that the banks could just decide tofreeze the accounts and all of a sudden...

...t, Ust C couldn't get it out or tellher with like. What's going on on and you also it's totally transparent, youdon't know, are they have they got it? Are they liquid or they? You know howmany banks, the governments, could shut them down and say: Hey a tether wasused for buying something in licit, so shut everything down. Do you mindGoshus Tis for the Absolute Lam, an explain what tether? And? U S, t c likewhat is a stable coin? Just so people understand yeah, so telecom. It was thefirst sort of feat: peg, stable, crypto currency, so what they did. As I said,we're going to create a digital token, it's like big coin, but it has no realvalue and we're going to say when you come to us, we'll buy it from you everytime for one dollar and we'll sell it to you for one dollar as well. Inactual fact, it's ninety nine cents and a dollar and one cent and that's theirbusiness model. But it'll always be around that, because if someone sellingthat more for like a dollar ten because they're on so or for ninety cents,let's say that's probablies er they're like desperate to get a rid of that theI'll give it to you for ninety cents. Someone will buy it and bring it backto the tether corporation and sell it for a dollar and make that money. Sothe Arbor trage, the abates, will always go around the way of trying tofind where it's misallied to the guaranteed price of one dollar andthat's what pegs are now. This was an amazing idea because what happened andsuch a simple idea, but what happened was exactly what I was talking aboutbefore, where banks were just shut down, crypto exchanges accounts and would notallow them or they go into a massive regulatory overhead. So, instead ofdoing that, they would say no, we crypto only we've got this thing calledtether: it's not money, it's a crypto currency, so we crodocile so wereunregulated and that's how they then grew. So it was a really great way fora Cryptocaria to deal with feart without dealing with banks and withoutall the regulatory overhead and that's where it sort of came from. But thefact of the matter is we don't know how they got the money and the scariestthing about tether is that they can just print tethers out of nowhere whichare infinite and going by these rare numbers called big coins or Theorem, orwhatever these really special numbers, which there's only twenty one millionof these things, so they must be laughing going home. We can just createthese and go and buy these red someone's willing to swap this reallyrare thing. For my like thing that I made, I know it so not saying that thatthat's what they're doing I just would be legal assuming the right like ifthey're got found out, yeah yeah, but there's also counterfeiting money is highly illegal.So it's also a very gray area right if I'm creating tether and saying thatit's equal or dollar you're, not you're, saying you always by one. So so that'show they get around that. But it's a very scary thing to have this massiveand just to let your listeners know like jp Morgan Chase recently came outwith a with a report stating that tether now is one of the largestinvestment funds or the largest funds in the world up there with black rock just and black rock, like it yeah.These are like the largest in what like crazy lot now, just want to clarify onething: just for the beginner listener I buy. I take my one thousand: U Sdollars of feat, and I exchanged that for one thousand tether tokens. Yeah,the tether exchange is keeping my one sand US supposedly they're at supposedto have it available as a liquid asset to back up the tether token. But thekind of allegations going around here is they've taken my thousand dollarsamongst all the other money to taken from people, and they can do whateverthey might want to do with it, like you said, by a big coin or by a property inChina or all kinds of things like that, could be happening yeah and thenabsolutely get a call for that money. Then there's no liquid assets to backit up. It collapses. That's right, and actually it's a funny analogy, becausethis is kind of where fee paper money comes from fear paper. Money originallywas a tether to God, and all these people would have these heavy. It wasyou know the people would have silver, they know. Kings and Queens would haveGod, but the people would have silver heavy silver, and so they would takethis to their like. Let's say the rough child's bolding facility in Germany andand they would give the silver over and the folding facility would write areceipt. Okay, you one piece of silver here: Go and here's the receipt, andeventually people would just trade. The receipts rather than I've got to go tothe market. I'm going to first go to the vault, get my silver out and gothen to like they were just say. No. I was just trade, my receipt and thenpaper money and the the thing is that these facilitiess got so incrediblywealthy and so wealthy that people...

...would walk past these estates and saythat must be a banker because no king or queen could afford. This is, is justfar too grand and because they figured out that not everyone is going to comeand collect their gold at the same time. So let's just write receipts and chargeinterest for writing a receipt at of thin air, and this is you know that thestart of fraction or reserve banking? Many you have a fraction of reserve onthe outstanding credits that are out there, but yeah tether could do thesame thing. They just write receipts. They just create tether out of nowhereand say that it's tee, but they did one thing out of a report, apparently inthe last step after two thousand and seventeen were, it went right down andthey bought a lot of big coin fairly much at the bottom, and so my feeling is that they're wayover capitalized like by far. But my feeling is that the US DC, which issimilar to to the but US TC, is a regulated, stable coin regulated by theUS government. They have to have everything in full checks and balances,and they have to have all that liquidity. Now they are going to haveproblems as soon as the US goes into negative interest rates, because whenthey go into negative interest rates that business model breaks, you cannotpay the interest fee by holding this stuff in the banks for billions ofdollars, the whole business model break, so they will have to go into afractional reserve, a legal one. They will get a banking license and all therest of it to do that, but you've gone. Then US DC stands for circle and youliterally have gone full circle. You've gone from Hey, let's go decentralizedto like holy moly. Let's just have another system, that's fractionallydeserved and El Anyway. So so what the naked Dow did to get around all of thiscraziness with the banking system and with tethers- and you don't know ifthey're fully backed or not if they're going to get shut down or of negativeinterest rates are going to hit and what make O did was say he is a smartcontract and we're going to allow you to put a theorem in, let's say, there'sten thousand dollars worth of etherium we're going to let you borrow five likegenerate five thousand dollars of a stable, crypto currency peg to thedollar, so you've got more value provably. Everyone can check this morevalue locked in this smart contract. Then there is that you've generated outthere in this currently called Die Dai and how we peg it to the dollar. Is Wesay? Okay, if you do this, you borrow from yourself, so you put a theory, anyou: Don't have to sell it. So let's say this is good for a multiple reasons,so I bought a car I'll be like. I don't want to sell my Theorem, so I put it ina smart contract and I borrow enough for the car and first of all, a coupleof gains tax. Isn't there because I haven't sold I've just got alone and beinflation is paying off. My loan plus I haven't, had to sell and it's gone upand I've en up. It's not good if the crypto crash it, but this is why you have an overCollateralis, because if crypto goes down, the small contract doesn'tliquidate the assets in there. I'm sorry guys, I hope, you're still withme. We I'm sure we lost ninety five percent. I'm straining a little bitwith this one, maybe because for a lot of people, don't even know what a dolactually is, like. Obviously, that's the starting point for indecentlyfinance, but in a simple terms, it's just we're creating decentralized onuse the word institution, because that sounds centralized, but that's kind ofwhat they're trying to replace the institutions that run all aspects offinance with a decentlie version of it. Maybe you can explain it a bit morethrough what the standard actually is is how that connects yeah. So we tookthis idea and really that was launched like a few years ago and we've seen awhole bunch of issues with it kind of the like the next generation of thisidea, where you can collateralis smart contracts with crypto assets, but alsowith gold and silver and precious metals, and I'll talk about that in aminute. And why? But the main thing was that just to make it super simple forpeople if a pawn shop pawn if you went in there the to spell that out. This isbasically you take your bike in. If you need money, you give it to them, theygive you half the value and they get to keep the bike. If you don't come backin a week and buy it back for a little bit more than they lent it to you withinterest or you go back and he by back and Neuha your bike, but this system israther than trusting a shop to do that in a centralized mechanism. It's adecentralized mechanism where it's just a bunch of code where you send money inand it generates things and you have the private keys you're, the only onethat has keys and it's code and it's...

...hard coded. No one can change it.There's no dodgy man standing there. You know it's going to rip you off.It's just two plus two is always equaling for so you know the code, youknow what it'll do and it won't change. So this is what it does, and so thestandard is all about allowing people that have got God. There's fivetrillion dollars worth of personal wealth sitting involving facilitiesaround the world. So we want to allow them to take that Tokenz it into asmart contract. If they holding maybe a few thousand in God, they don't want tosell the gold, but the washing machine broke. They want some liquidity. Theycan put that into a smart contract, borrow against themselves in a stable,cryptic currency. That's in their local currency, so we're starting with eurosso to be standard euro and then we'll be branching out the standard dollarstandard, Ye and standard ruble state, chackle, standard, Australian dollar-and let me ask you this then: As an example, I have a million dollars ingold bullion locked up in a Swiss safe. I want to buy a property in Burland. Icome to in theory. I know you guys are sort of still starting it up and it'sup and running so I bring it in. I collateralis my goal, so I somehow ambringing it to the do. That is the standard right.It's an turning. Is it the full million dollars worth a billion or is it?Eighty percent of ninety percent gets turned into a euro stable coin, andthen I could take the Eros table coin. I assume I could exchange it onexchange for actual ural fear. If Yeah, if the House Salad would not take myhero, stable coin, it would take my euro dollars and buy the property, butthen what happens like do? I have to pay interest to keep that loan going?Is there a time stamp where I have to pay it back? How does it all play outexactly there's an interest rate, and this is what really pegs it to the euro,so there's a whole bunch of people that are borrowed Sur, let's call themstandard euro and what gives that val? What pegs that value to the euro? Well,it's this interest rate and what we call it. A stability feed just likemake it us, but it's what happens is that if the value drops of Suo to theeuro, let's say it's ninety cents to the actual euro, what the Dow will dothe Dow is like the whole community that governed the system. They'll say:okay, lift interest rates a little bit on everybody, so everyone that's gotloans out. There will go! Ah, that's too much for me. I don't you know theeveryone, but some people say I don't want to pay that on Chidren, so they'llgo into secondary market start buying back Suo and that demand does what itcreate lives, the price back to you now, if it overshoots to maybe a euro tencents, then the system might say: Okay drop the stability field, the interestwriting and people go wow wow. Look how cheap it is to borrow money from thestandard, and they will then collateral, ize smart contracts and borrow fromthemselves pump that into the market, and that will of course, cause too muchsupply which might drop it back down it. And this is why it's called a soft peg,because it doesn't purely sit on one to one it kind of dances around and is theleaver of interest rates, just like central banks do, but instead of a fewold men in closed doors deciding to like lift the in cross rates, it's likethousands of people all around the world in a transparent manner, saying:okay, let's lift all lower the interest rates for the that's good. That's agood example understand. So my million cold to enter into the euro stable coin-I have a a fluctuating interest rate, so might be a two percent which I haveto pay off. I assume using whatever means I have to make money, so it mightbe my job or other assets, so I'm I'm actually putting back in euros into. Isit your Dow I'm putting it back into him? I just buying like how is that Yesend it back to the small contract that you've got collateral in that youborrowed Tom. So it's not us. We don't have anything to do with we're justcoding this thing, so the contract is just like an address and it'll say, andyou go to a website and anyone can build an interface that will interactwith this desandrouin but will build the very first interface so you'll goto the standard, Tao and it'll, see you'll, see on the okay. You've gotthis much collateral and you've borrowed this much and you don't haveany time limit the interest that you're occurring is basically just moving yourcollateral ization put to the cute time, so you always have to be overcollateral ized. The whole system has to have more value locked up than thereis floating around that. This is very different than the current system,where we have a zero collateral locked up anywhere and governments can justprint more. So this is the the fundamental difference that we're doinghere that you can probably know that, there's more collateral locked up soand what happens if it does cross that collateralis there's a whole bunch ofpeople that have put so into a smart contract. That's ready to buy upliquidated assets and they buy them...

...fifteen percent under spot. So they getlike a really good deal for closing someone or whatever right, yeah, yeah,gold and Crypto. So there's this contract to Collateralis, with cryptolike eth, as well as bullion from participating voting facilities thathave plug themselves into the standard right. So, for example, your voltorewould be if I'm holding a million dollars with a gold en voltore. Icouldn't say this and I need to get out half a million of that your an assetpurchase. I then go to the standard I connect my Baltoro account it apples inhalf of my vault gold into a standard Dow. It then shows up as collateral andas drawb asset under the Europeans. Stable going in this case spell out themoney I go by my house or whatever, and then it shows me that I have to keepmaking this minimum well once it starts reaching the point. If I get, if I'mworried, I got to keep paying down that interest or paying down the principlethere right and I'm assuming that would be connected like it looks like aalmost like a wallet with with like an interface e h on the Internet, and Iwould just possibly need to move far into an exchange turn it into thestable coin. For the euro move it the table coin into the standard protocoldo and then I could put it at interest. Yeah, okay, exactly and you payyourself back, and the great thing is like over time the inflation peas offyour loan. You know if you've got a lone for ten years and you bought withhalf a minute. He bought a house and then, in ten years time that same halfa million buys a cut and of milk. Then you've kind of paid off your house witha cut in of mill sort of value. You know, so this is the thing that he anda lot of people don't realize this. This is really financial education. OneO one is how do the wealthy keep their wealth during inflationary periods andevery single time? It's because what you do is you go short, the thingthat's losing value, meaning you borrow the thing: That's losing value sellerand by back so for the listeners that don't know what shorting is. IsEveryone knows on the stock market I'll buy some test less stock, because Ithink it's going to go up and everyone. I can comprehend that you can thinkokay yeah, I get that that's how you make money in the stock market. Youalso have a very important mechanism in the Stock Exchange, cut going short andthat's betting on the price going down how that works is, let's say someonehas tastless stock and I believe Tessa's going to go down and price.What I would do is borrow that Tesla stock off that person with interest, sohe landed to me with interest and then I'd sell it straight away. It would godown in price, I'd, buy it back, pay them back and keep the difference, andthis is the idea of shorting so the same thing when, let's say you'reliving in Venezuela for you five years ago, what you do is, you wouldeffectively borrow a whole bunch of Venezuela and Boulevar and by physical,real assets with it and then, ten years later, by back the Boyar, which is likenow worth nothing pay the person that you borrowed it from back with interestof course and and deal with that on it. So let me just to maybe Molestiaexample than Mazwell. Let's say I- and this is very realistic: I've got a bitcoin at fifty thousand a coin again. I've got a five hundred thousand worthof bit coins. I've got ten coins, I bring it into the standard protocol. Iwant to use the collateral to buy property. I buy a property worth say:Four hundred thousand: U S dollars, so I've still got a hundred thousand kindof buffer in the collateral there, which I can use to keep paying back theinterest and keep me safe whenever the case may be. But while I'm doing this,the actual price of bitcoin doubles two hundred thousand. How does that impactthe situation? I'm in? Basically, you can go back on to the site and borrowmore against that, because, at the end of the day, it's calculated in thecurrency that real ting, so yeah in real time. So now you know, if it's thestandard euro that you've borrowed, then it would be equivalent to the europrice of your collateral. So my hundred thousand dollars would be two hundredthousand dollars like the leftover there, yeah yeah a money I pulled outbecause I'll be been pulled out, but the money I've left is fluctuating withthe whatever the current rate is: okay, yeah, exactly cut it all right, so it'skind of a way to liquidized very illiquidity, still benefit from priceincreases and, like you said you could, hedge against ups and downs. You know short and depending on whereyou like, obviously you'd want to not spend at all. Like that's also the riskhere. Is You calantas a hundred percent of it and then you're, basically lockedin because you spent it at that rate yeah? Absolutely you don't want to beliquidated like there's that penalty for your fifty percent. The reason forthat is because you want a market for people ready to buy those liquidatedassets, because when it like gets...

...liquidated what you want to do, if youwant to take the euros off of the market, because you get to keep the Sura stable coin that you've borrowed, let's say: You've disappeared, but thesystem always wants more collateral than as you are floating around. Sothese people that buy these assets are basically taking standard euro off themarket, buying the asset back and when that happens they get burnt those sosget burned or destroyed, and the people get the underlaying asset, all rightright. Okay, maybe the last few question I know we've been here for along time Josh. I appreciate the time we've ta deep into your history and andalso I mean my last few- questions are all around the standard protocol. So,let's first we know we have a mentioned it yet, but we'll put in the show, nota I mention it again, but it's the standard dot io. If you want to checkthe current progress of this- and just so, we know for other people listeningearlier to vault Toro, so vault or Val Tor, Baltor, Oom, Baltoro, yea, andjust a few questions around the stand, because this is so new. Like all ofthis D, Fi is new. It's trying to replace very trusted institutions inour society. So a big part of this is just the last on Trossach. Well, yeah.Both right, like we trust them and like mainstream society, will always trustthe bank until they don't right. But I am curious even just thinking theexamples we were giving with a house or whatever and there's so many layerslike the pricing of the Crypto, the stability of the Crypto, if you'reusing something like tether, what they're doing with you know the stablecoin. Do I trust the do that you're talking about it with your standardprotocol? The interface is so many different, I feel like. I don't want tocall them breakable, but parts. I don't yet trust enough. Even that'stechnology, breakable yeah! This code is yeah. It's a you know. This is oneof the things why I think we've had such success. Raising the initial firstround in this project is because we've had since two thousand and fifteennever had a hag were obsessed for security, and we do things slowly butproperly, and this is, I think, I think what people appreciated yeah but yeahsorry to interrupt you there well now my questions are like how comfortableshould I be moving like if it's a have a million dollars net worth and I dowant to keep it safe, but I also want to be smart with it and leverage it andbest ways. I can- and I just don't know whether I trust anything in do yet. I'mhappy. I can barely trust bitcoin because I can buy it on coin base oryou know some kind of reasonably now it's floated on the stock market. Itseems like I have a regulated safe, it's not Mount Gox. Basically, you knowI've reached that point where we're Robin Hood traders so on, but we're notlike there's. No doubt I know of that mainstream society feels, like you know,they'll have the apple on their phone and they're using it to, for example. Icould imagine it be amazing. The Standard Opts on my phone, I just go. Ineed some cash, I pull it out of my collateral. Anyway, you go all right. Icould. I could run my entire life on just that one account potentially, andit's going all against my I'm keeping it in bit coins I'm not I'm getting thebenefits of that. So how do we get to the point like- I guess that's myquestion here. Given all these things, that we don't trust and we don't knowyet how do we get to the point where this swaps out the pawn store the bankand that's PA W N again and the banks and the traditional lending and all thesystems that we have in place now, for you know hundreds of years, if notthousands of years for fear currency? So how do we get to that point? Whatare the steps there's so many scams in this space? So you have to trust thatthe code is right, that it's not a scam, there's a whole lot of bunch and peoplelike yourself that have got great podcasts. That educate the mainstreamis one big pillar in this story. But the second thing is really having asolid grandma friendly user interface and that it's all about user in face,because when big con first started it's thisugly interface that was absolutely written by Satoshi himself and it'sjust awful right. It was made by technicians for technicians, but as youmove further down the line like when the Internet first arrived on the sceneto write an email, you had to do it with command line and you would havesaid well. How has anyone ever going to use this and now you've got grandpasitting in his nursing home on his IFEA swiping all day long, and this isreally what it comes down to. Is that things like the ipad focused on userexperience and on intuitiveness and having no real manual for it? It's sointuitive that you don't need a user manual, and this is what it comes downto. But without a user manyou kind of...

...need that education- and this is one ofthe beautiful things I love about Crypto- is that it's brought theconversation back to what is money around the dinner table. This is aconversation that, when they were going off, the gold standard people actuallyhad around the dinner table be like well. What do you think? Should we orshouldn't we go off there? And people say yes, but that would be this bigdebate and for the last four fifty sixty years, wot like we just don'ttalk about that stuff, it's just not really mentioned. So it's had thisrenaissance of Education just within the family and because people aremaking so much money in Crypto. It's like. I have to learn about this, sonaturally, a lot of people are going out there learning. What is this? Whatis that? What is de fire, what is, and so that, coupled with good interfacecovered with great education and resources like yourself, will allowthat to happen, but yeah I mean the main focus for us is to build. What wehave to do is build an amazing user experience, also partner with othersystem, so we're already talking to ATM operators to allow the interface on anATM to like draw out, because I think I saw what was it. It was like seventythree percent, I'm not quite sure that I was something like that: Seventythree or seventy eight percent of all Americans and I'm pretty sure it'ssomething similar in Europe- a living pay check to pay check and this cycleis extremely hard to break because they just don't get a chance to save. So Ifeel like these sorts of technologies that we're building, but other peopleare too allow people to save, but borrow from themselves to haveliquidity to pay for life. So you can do a bit of both. Of courseit's you know. You do need a little bit of extra, but building mechanisms forpeople to save on a regular basis with their paycheck and then borrowinstantly liquidity from themselves. So they can live, but still say thisbreaks these sort of cycles, and so I think, there's certain things about dfire that is allowing people to want to learn about it, which is really reallyinteresting. It's one of those great things about cryptocurrency that peoplereally want to learn im and it's also having a knock on effect with banks.Like coin base, resents wanted dead to want to offer four percent interest onpeople holding feat and the SEC was like. No, you can't do that. That mustbe a scam, but really what they're doing in the back end is using all thedefy the systems and in fact, for the folks that don't know thatdecentralized finance space now does more volume per day than the entireFintech sector put together, and that includes these unicorns like Ven Mo. Sothe amount of volume is extraordinary. So if CIME base was to do that and howit's doing that, because C was like well how you doing that. It must be ascandal. Not what you're doing is in traditional banks. You put your moneyin the banks and about fifteen people and layers all take a cut until theygive it to some clever market maker, who basically buys themselves with yourliquidity and defy you cut out all those people and just stick the moneyinto a automated Marcomani yourself and, and you gain those profits straightaway. So you can gain like quite a lot of money just by allowing thequiditative. This is what coin base is doing, and the SEC knows that if CIMEbase does this that it will be a black hole, people will move their money outof every single bank and say why would I store it with you dodger bank, if Ican just bring it across to coin base and earn four percent a y? It like it'sa no brainer, it's a no brain, especially when cineas gets a bankinglicense or whatever else you know, cracking has just got a banking life.Well, I was got gonna. Ask you because this sounds like the final hurdle hereand the biggest one that exact point. You just made the banking system, thegovernment, if we distabit or a traditional way. I say we, but I don'tknow who he is, but you know if people start moving their money out of thatand into even something as simple as coin base, because they understand thatthey're really comfortable with it for percent interest sounds great. It Castothe biggest problem with the banks. It takes away their liquidity and thatfeels like everything collapses in terms of the traditional sense. Whenthat happens, so obviously the government steps in and says no, how dowe get past this government hurdle as it possible? We have to go throughchaos to get to a solution. The thing is that the government can't stop this.It's just a matter of time. If cimes isn't going to offer, do you think thatthe SEC can really stop someone going and buying to ether collateralis somecontract over curve where they yield farming, three percent, putting thatover into an FT collateral izing? So, like the space Isso crazy, it's UNregulate, it really is, and so we just...

...have to come to peace with the factthat first, the legacy system is breaking a part. Anyway, it's acomplete, fundamentally corrupt system and I'm not saying corrupt, as inthere's a corrupt person, it's just a corrupt system, meaning you can't havemore credit than there is interest. It's like a huge game of musical chairswith way too little chairs and there's a lot of people that have to sit downwhen that music stops and it's not gonna be enough space for all of them.So this system is already showing the crack o they're blaming coved, but ithas nothing to do with it was already cracking massively and to protect thevalue of the dollar. Once you get into Crypto, you start to see why the US wasconstantly in wars constantly trying to protect the use cases of the US dollar,because the more you know every time big cone gets another use case likeyeah. Hey pound now accepts bit. Can it's like this big year? Why? Becausewe as a community realize the more use cases you have especially large usecases the more value at heart. So if the US loses the oil settlement layerof the US dollar, it's a huge use case that gets destroyed further, loweringthe need to buy dollars on the market, and so the whole system is slowlyfalling. Apart for multiple reasons, and this system just happens to bethere for people to jump into so whether you are a technocrat and youjust love the technology you're going to get into crypto. If that's not thereason, then hey you're, some sort of like libertarian, if that's not thereason, you're like just an investor and you're, seeing the massive profits.If that's not the reason, then you're an artist- and you just loving thisweird ft thing that's going on and you can like what I can actually keep trackof what I'm selling and and if that's not the reason you need to get money toIndia and don't have a bank account like whatever reason you have you'regoing to fall into the system that is building around and thankfully- andhopefully it stays decentralized, and this is why big coin really reallyreally fought for having smaller blocks. There's a whole big thing here and I wewon't go into it cars n enough time I mean they fought about it for years andyears, but the fundamental thing is you really need to stay decentralized,really really really important, because it's super easy to like byno smartchain, for instance, it's just a clone of a theorem. It's amazing because it'sway cheaper amazing, but actually it's super centralized. So what you've doneis you've sacrificed decentralization for efficiency in speed, but what if wegot, then we've got a system that can be controlled if need be and there's awhole lot of stuff. At risk from the legacy system, who've still got a lotof firing power to try and control this thing and and if we remember Napster inthe music industry right, there's a lot of peeping and throwing and sewing andtrying to stop things happening coming out way as actually going to point outChina and wonder about your input there, because, obviously they have the leverswithin their society where they can say we're going to make you disappear. Ifyou stop doing this so that it's I feel like they can take it in a very analogway, they can make the server farm go away. That runs, yeah and- and I knowdecentralization obviously by its nature- means it's spread aroundacross the planet. All these different servers, maintaining or individualcomputers. But I guess what I'm saying is. I feel, like I'm an answer, my ownquestion here I feel like because it is so distributed. No one government canshut down the entire system. Yes, they could stop their citizens, perhapsinterfacing with it, with the threat of their life. Basically, but the end ofthe day. The system will always be there because, somewhere in the world,these computers are up and running. So as long as you have electricity and wehave silicon and computers, then these protocols and these platforms and theblockchain continues to exist and it'll just be used spot on I mean the profitdriver profit driver is such a innately and powerful driver that we've seenproof of work. That's behind the big coin. Consensus mechanism, like you,said, take up more energy than some countries put together just by adding some profit intoparticipating. Now what we're seeing in China right now is yet they've bannedproof of the Provotian, the band, because hey it's pretty easy to see the mega killer.What's just getting sucked into one area, you know bannet, but what'shappening is we're seeing like proof of steak, which t is just a wallets justgot data coming in and out. If it's...

...encrypted, it's just a bunch of data,they can't discern it. If you're technical enough, you can have a provistake wallet that is basically taking part and securing a network and theChinese citizen. That knows what they're doing doesn't even have to haveit in China. They can just log into a somewhere else and run from there, andso this it's a very difficult thing to stop. You can stop physical hardware,but network software networks are extremely agile and hard to shootbullets at it's really like shooting bullets at a swarm with bees. It justis dumb, so yeah and you spot out like you, can threaten someone with force,but there's a saying. You know that my Chinese friends would say and that'sthe land is vast and the emperor is far away and that's kind of the mentality.A lot of Chinese people have is like yeah, it's illegal and you'll, read it,but there's a whole district. Actually that just does it and it's like, likeokay, exporting money out of China, there's all these like controls, butthere's whole districts in China that deal with just that problem. Let's see, let's see: Okay Josh mealmost two hours here, so I do again really appreciate your time and such agreat doorway. I think it to many topics for the listener, whether it'sdefy even just proof a stake versus proof of work. Like you just talkedabout we're not going to go into that right now. You can research thatyourselves listeners. I just wanted to wrap up just with your own evolutionhere. You said you raised funding for the standard protocol, so where are youat with this project yeah? So we did a little presale just to allow us to hiremore developers and do some ird and some really technical stuff, becausethe theorems very expensive at the moment, so we're going to nativelydoing on a layer to for those that know what that means. It basically meansthat we can do it a microsec like less than a cent transactions rather thanfor, but nevertheless it's gotten us to a point where we can do this. The nextthing we'll have is a private sale and actually it's private, because it'sjust anyone that signs up with US signs up to the newsletter and joins thecommunity and interacts with US- and you know, builds this thing becausewe're still a small project, we're still pretty under the radar, and soit's people coming in to a telegram chatting with US figuring out. You knowgiving us feedback and for those, then will be a private sale available andthat will help us raise enough money to build the MV and really have liquidityenough to put liquidity into markets and and allow us to kick start thisamazing project. So you know we really see the standard as fundamental groundwork infrastructure for thecentralized two point: Dfoon, Oh and so that's where we're at right now. So Idefinitely recommend people jump on to the standard. I O and check it out,read about it and join the telegram and ask us anything cool and just theclarify when you say you're going to be doing a private, raise you're sellingthe tst token eventually- and you use the collateral from that to hireengineers to keep building and move on. But the original raise you've done sofar. Was that also filling tst? Or are you actually get in great okay? So notthere's? No traditional vc angel anything normal funding here. This isall within the rations right. We have some angel investors and we had somevcs, but we really don't want huge whales and we have a few vcs that havebought, but their tokens are vesting over time. Since your shows all aboutbesting, it's important that one of the big traps that a lot of people arefalling into in this whole space is they're, buying the tokens that thecommunity of called it rug pools where, basically, large players will fund thevery early part of the project. They'll see a doubling in the price of thetoken and the team is excellent. They're building the kicking goalsthey're moving forward, yet the initial investors then dump all their coins onto a market get out at two x and it basically destroys the project because,even though they're doing everything technical right, the price is dumpedand they find it really really hard to get that back up. Because people loseconfidence. So yeah we can tried everything we can to like. The largeplayers need to be vesting over a twenty four month period to forty eightmonth period and depending on how large this deak is. But Yeah Tst is kind ofthe governance token of the whole system. So we talked a little bit aboutDaws we touched on. It is a decentralized autonomous organizationand- and it's kind of like companies to point o for the listeners. It's it's away that people all around the world can govern the rule set of a system andbe rewarded, and this TC tokens are kind of keys to that door, and thesepeople set the interest raids and they get rewarded for all these sort ofthings. But there's a whole part that we didn't touch on. My predictionmarkets that we're looking at using as a government's model because voting onthings is kind of a A. I find a silly...

...way of making decisions. You knoweveryone has their everyone thinks voting is fantastic and if you didn'thave it, we'd have dictatorships, but I think there's other mechanisms we canuse for the than voting, and so maybe that's for another show but yeah thatpretty market, though a very interesting side of this whole thingthat we're building. So that's where we're at last question to ask aboutwhat exactly is your day job right now? What are you doing like? Are you you,CEO, basically like you, seem to be doing now, going on on podcast andtalking about the standard and helping to spread the word? And but you must dosomething during the day as well that to get this down yeah, I'm definitely working a lot I mean so. I stepped downa CEO from voltore and my half brother, who built my co founder, took over aCEO. We were always sort of cosy. Yes, anyway, he was just more in thebackground, but he's full time s on that, and I've really stepped down tobecome chief innovation officer. We've called it at Lotor, and this is why wefocus on the standard to bring really another use case to God, rather than ajust sitting there. We can allow people to do all this good stuff and and so on,a day job yeah, basically organizing building the team, finding greatdevelopers and cryptographers to join, reaching out to all my network aroundthe world that have been in Crypto and know what they're doing to join us. Soyeah everything is deaf to dealing with all the normal hath stuff of running abusiness, yeah and and now with a decentralized one. It's a really funinteresting thing, because you're dealing with people all around theworld and communicating over telegram and discords and slacks, and thingslike that. So that's what I do day today is try to organize the team andyeah okay market in time line. What do you when do you think this will be? AGuy will actually put a download some kind of APP and collater micro yeah. Ohmy gold. I don't like to give timelines because it's something that really hardto build and we don't want to release something. If it's unsecure, you knowreally want to make sure that it's secure, but if I had to say a vaguething, we're looking at about about six months for the NB, okay, yeah, there'sa lot of irony that we're doing already, and they have already been done andwe've already started coding. I think we'll get it done earlier, but that'ssort of a goal that we're heading towards. I mean we've seen projectslike a dono. It's been what four years for and a half years, I still don'thave a product punningly, it's a hard thing that they're building that we'rebuilding they're, trying to probably were trying to properly. So it's justone of these things. Far Enough. Okay, Joshua Shigaraki you for almost twohours. What a journey from in born state list to growing up in Australiaas a sort of designer to then a couple of startups with in fashion, would sortof lead you to like Cypherin movement to then Crypto to being early in bigcoin, to losing what you had in the Mount Cox to then starting voltore andgetting involved in cold and be cin exchange to then now the standard,that's awesome! What A and still in early making money sit yeah O K, I N S,that's obviously massive, so any other websites. Besides the standard O io andVoltore, you want to share with us, or I mean you can follow me on twitter atJ Shigella, that's J S C I gala myself, randall sorts of stuff on there andwhether you you know you can engage with me whether you agree with me ornot sounds good. Thank you appreciate the time Hey. Ireally really appreciate your time as well as been a fantastic interview, oneof the best yeah. That was fun. Congratulations. You made it all theway to the end of that very in depth, interview with Joshua Chagall. I helpyou were riveted throughout that and learning a lot. I was even just beingthere as the interviewer. I was learning a lot and I really appreciatethe chance to ask Joshua for basic examples to run us through how both hisstandard, like his own company or platform, that he's building right nowand just other examples of where decentralized anything will play out orcould play out in our world. Obviously with finance, I think, is one of themost obvious and, to be honest, I think it it needs to become a standard. I'mnot saying that in jest with the name of Shoshi Company, I say that as astandard across all kinds of different aspects of finance. I don't think it'sgoing to be quick, we're going to take beers, maybe decades to really get tothe point where these forms of decentralized platforms are consideredthe norm for doing anything like lending or trading, could be tradingall kinds of assets. You know, imagine buying property, you know with yourcrypto currency and then using that property as an acid on a platform likethe standard to hedge against it as it decretes to sorry, not hedge against it,though it is hedging against it, but to actually borrow and using that propertyas collaterals to extract more funds...

...without ever having to go to a bank forrefinancing for reevaluation. It's all just done decentralized. The softwaredoes the math, it distress those funds and you can decide how to use the windto use them and even then, as I said, hedge against the value of yourproperty by perhaps taking some of the value turning it into another assetclass that might be confusing to you. Don't worry if that is the case, justget your head around the basics. I think that's the most important thingyou can do just understand what cryptocurrency is just bitcoin is agreat starting point and also what the blockchain is and how that is. What isthat compared to Bitcoin, the Bitcoin runs on block chain, learn what thatmeans, how it works, and then you can dive in as deep as you like, and maybeyou'll go all the way to the point that Joshua is and consider doing a start upin this space or at the berries start using some of the defi tools topotentially earn some amazing gains. Just on the passed appreciation, thepotential for returns in interest, you could stake your crypto as a way toearn as well there's so many ways to generate cash flow and appreciate asive value, of course, not just the disclaimer, but just the hard truthabout this. It is so spectives out there right now it is a wild wild west.So you can lose a lot. You can gain a lot. It can happen in very short timeframe, so obviously be careful and just watch everything before you. Dive inwith any amount of money certainly do not put your entire net worth into thisPicos em, because it is so fresh and you all right, so I'm going to wrap itout because it has been a super huge episode. I hope you did love it. If youdid love it and you think this would help other another person, maybe anyonewho's new to crypto. This would be a great place to send them to startgetting a feel for it and see two real examples of companies that operate inCrypto and what they're doing and why they exist. And you know what is thepurpose behind them compared to traditional institutions that do thesimilar things or just to hear a great start up story in a cutting up space,or I should say an entrepreneurs story entering the world of crypto currencyvery, very current, send them to vested Capital Episode Number Twenty Six. Youcan also find us on all the APPS. Just look for episode. Twenty six there onApple, I tunes you can go to Google, of course, with their podcast player.There's the audible e book player does podcast as well. There's amazonsversion of this there's spotify, which is growing in popularity, so definitelyfind vested capital on spotify and then subscribe, or follow or plus sign.Whatever the button is to stay in touch with this podcast get all the latestepisodes. I have a lot more coming down the pipe and, of course you can diveinto some of the previous episodes as well. In fact, episodes before this onewith Joshua, I was interviewing Gabrielle who founded coin rule, whichis another crypto star up, so a different methodology or a differentpurpose. Behind what coin rule does but another great story aboutcryptocurrency, that's all on the vest of capital podcast with me, your hostAros, I'm going to wrap it up. Thank you for listening again today. I lookforward to talking to you again on a very very near future episode by Bye.

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