Vested Capital
Vested Capital

Episode 26 · 1 year 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 The Standard, 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 yarrow and welcome to vested capital, Episode Number Twenty six, featuring my guest Joshua Shigala, the cofounder of vulturocom and the standard and also a leader in the cryptocurrency space. Vested capital is a podcast about how people make money and put their capital to work. I interview start up founders, Angel investors, venture capitalist, Crypto and Stock Traders, real estate investors and leaders in technology. So this is an episode that will be tough for me to introduce to you because it's expensive. This is a topic that is very current. It's cryptocurrency, decentralized finance, Dow all the cutting and stuff going on in that world at the moment, because Joshua, and my guest, is leading a new startup. I call it a start up, it's a doubt. It's a decentralized finance application. He's basically creating a so hard to describe these things. You'll you'll hear me ask some very poignant questions throughout this because I was genuinely not understanding parts of what he was describing. Maybe it's not entirely true. I was understanding it, but I wanted to simplify it. I wanted to understand the practical applications for and every day normal, I use normal and inverted commas. Person WHO's not, you know, knee deep in technology certainly hasn't spent so much time exploring the conversations going on in crypto world. You know, all the the 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. I understand the centralized block chains and currencies and Tokens and some of the ideas that are around different tokens that I've heard about on other podcasts and just learned about through my own studies. Defy itself is a very complex space but, as Joshua pointed out, defy in terms of volume of transactions now is so large. It's bigger than some of the largest wellknown fintext like revulae, if you might know, or Revolute, depending how you like to say. It's a massive European Fintech company that allows you to buy and sell stocks and transfer money, buy and cell cryptocurrency as well. So this is something so huge that the mainstream public really doesn't understand, and that's part of the problem. But that's also why this interview is so important, because Joshua, through his life story as an entrepreneur and just through his explanations of various aspects of cryptocurrency, in the technology behind it and the philosophy behind it as well, will educate you, will open up your 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 going to learn in terms of Josh's story since, as always the best of the capital, we do go back in time to learn about our guests and you know what they're known for. It was fun for me to do this part because Josh actually grew up in Australia, where I grew up as well, and he worked in design eventually for a number of the televison stations that I know very well from Australia, like channel seven and channel nine. So we worked on TV shows, graphic design, or maybe really more video design, like video graphics. He actually, as you explained in this interview, was the Creator one of the very first ever short films using computer aided graphic design, which I think is very cool. Unfortunately lost that, but he's still looking for it. Maybe one day he'll find it and finally enough, this connects with the cryptocurrency world in a strange way. So eventually, through his work in the graphics world, he became entrepreneurial and had lots of side gigs going on. I'll let you listening to hear about all those. And one of the side gigs was a company called swap style, which essentially was a fashion swapping service. I think his wife at the time was a cofounder at least helped him start it, and it sounds like it's a fashion start up, and it certainly was, but because of the way it was being used, it forced Joshua Josh to start looking for some kind of credit system within the company. So people would come and list their clothes they want to trade and they look for other clothes they'd want to trade for. Unfortunately, it was very infrequent, you know, to find a good trade match at the right time between two people. So inevitably you need some kind of internal currency of value that you could swap clothes for and then use that currency later to buy from other people who were listing clothes. It's a common challenge for a marker places like this. So because of that need, Josh dived into the world of digital currents, see, which then led to the world of blockchain and cryptocurrencies and all the cipher punk movement. So he dived in learned what would be the best version of an online currency, which clearly was cryptocurrency. Because of that he got exposured a bitcoin. Back in the super early days. Even Setocian Neckamora, the creator of Bitcoin, or perhaps create hers, we don't know. Is ATOCI disappeared, was active then. So he was that early. In fact, even had some early bitcoin. Unfortunately, lost a lot of his early cryptocurrency when the Mount...

...gaws collapse happened. For those versed in the world of cryptocurrency history, you will know that Mount Goax was possibly the first exchange that was very, very popular. Unfortunately, got hacked and a lot of the currency was stolen by the hackers and because of that, Josh experiencing losing his cryptocurrency, he wanted to come up with a more stable and reliable and verified back up exchange for cryptocurrency, which made him look towards gold as a good store of value to kind of back up the value of the cryptocurrency, which then led to the creation of voltrocom. So we spend quite a bit of time talking about Voltro because it was and is, it's still very much a successful company, if a bit niche a very new, cutting edge idea. So he wanted to create a platform where you can take your Bitcoin, you or your cryptocurrencies and exchange it for gold, and it had to be real gold, gold sitting in a vault somewhere. So we have to connect these different ecosystems, the gold system of buying gold and holding gold and, you know, verifying it and validating it and making sure it's there and remains there and it's safe and secure, along with the very decentralized aspect of cryptocurrencies like Bitcoin, and then creating an ability to exchange those, whatever the market rates are. Great Story to hear all that how that was created. Definitely recommend you, you know, pay attention to that part and I asked some great questions because, frankly, I was naive how this all works on the back end. I was super interested on how do you get gold to talk to Crypto from a technical standpoint and make that kind of exchange work, which unfortunately also means you have to use the banks. That was a sad aspect of this, I think, given that we want to decentralize and move away from the banks and fee at currency, but it's very much an entrenched part of our system and since gold is very old and entrenched in that kind of financial world, you do have to enter the traditional banking system in order to exchange gold. You know, I say that, I'm going to come across like an advocate for crypto and, you know, the destruct destruction of the the old banking system, and I am in some way. I certainly a part of me that's frustrated with the current the banking model, especially when it comes to simple things like transaction fees, currency exchange fees, just fees for holding my money. I think that's terrible. And all the intermediaries between banks when you're sending from one to the other or any kind of transaction you do with it all taking little pieces of it. And then recently I went through the experience of simply transferring my Crypto, a small amount, from Ukraine to me here in Canada, and it was just so straightforward. You know, went from a wallet of a friend of mine in Ukraine who had the cash I had there and turned it into crypto and then send it to my wallet and it appeared and that's it. No banks taking a little piece of it, no need to go to a branch, it's just a wallet. I have private cold 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, the standard. Now this is challenging for me to describe. We spend a lot of time breaking down a great example of what the standard is. In a nutshell, it allows you to borrow money against your assets without using any kind of third party. No need to go to a bank or lender. You simply can enter what is called a decentralized financial taw and through what the standard is creating. Bear in mind this is not actually out yet. It is we talked about a concept for an MVP that will be coming out soon. Soon could be six months or could be several years. We don't know exactly when, but that is what Josh is working on right now, and the standard will then allow you to you know, put up your gold bullion or put up your bitcoin and then borrow against it, so you can always have a float amount of money that you can actually use in the real world while still holding on to your cryptocurrency or gold. So it's, I think, a very useful service. I actually would probably use it right now if it was available. I had a lot of questions around the security around this. I tried to, you know, act like I was the general public, I guess I am, to try and verify parts of what I would consider risky just in my basic understanding of technology. Like do I trust the owners and creators, like even do I trust Josh and the team at the standard in the code they're writing? Kind of trust the different platforms that are talking to each other, the cryptocurrency exchange, the Taal that offers this service? You know, the interface. How well can be protected from hackers? Is anyone skimming, you know, some kind of fee somewhere or controlling the wallets, the addresses? You know, anything I transfer there will just disappear? All these fears which he, you know, attempts to answer and there's no good answer yet, in the sense nothing is full proof. But like most new technologies. This is going to be a case of overtime trust becoming more standardized, more general across the population as more people use it and it is becomes, you know, more tested, more robust, more the code has been refined over time. It's shown to be impervious. That's the hope, of course, and then it becomes a standard, so as it is named the standard.

Great Story. That kind of sums up Josh's business story that we explain thus far over the WHO almost twenty years of his life that we kind of covered in that maybe more twenty five years of his life. So that whole story is this podcast. But, as I said at the start of this very long intro to go along with a long interview, this is not just about Josh's story. This is about him explaining lots of key concepts and US using some of the simple examples to explain how these new forms of decentralized finance might be used in our everyday lives. So I think that you will find very, very helpful. Okay, so that's my intro. The interview is coming up in a second, but of course I have to mention the sponsor for today's episode. I should also say I mentioned the sponsor for today's episode to Josh Off Air Afterwards and he was very excited about this, I was. I was glad to hear that another founder who can see the benefit of outsourcing your email to someone else. I do feel funny talking about such a modern technical topic of decentralized finance and cryptocurrencies and now I'm switching to a very old in terms of Internet years technology. Email, something we still use today, something that a lot of humans on this planet are spending hours a day just sitting in there, replying to messages, sorting messages, ignoring messages, feeling stressed about missing out of what's going on in that inbox or not replying fast enough and, of course, using your inbox like a to due list that kind of controls your life, all things that should not be the case. So I recommend, if I described you, you consider hiring a virtual executive assistant to manage your email for you, and also all the associated tasks like calendar management, scheduling, interacting with people, inbox management for your social media in boxes, replying to comments on social media, managing communities, data entry, all the basic things that you're probably doing right now. Controlling software, are record management for your customers, maybe invoicing, all these basic things that you don't have to do if you just hire one of our virtual executive assistants at Inbox Donecom. They're all fully vetted, tested, hired trained by US internally. We have a ten step hiring process, including a course that we run all new hires through before they begin working with clients. We also assigned to people to every client, so you get a backup. You always have two executive assistant virtual assistants working with you. They're dedicated to you. And Yeah, it's a business. has been running for almost four and a half years now. We've got clients across all kinds of amazing industries. I don't know if we have a cryptocurrency client yet, so maybe if Josh becomes a client, he might be our first cryptocurrency founder. But we have clients like accountants, bookkeepers, car sales, restaurant owners, online coaches, venture capitalists, doctors, dentists, all over the place. Everyone has email. Everyone needs to break free. So if that's you, head to INBOX DONECOM and book a discovery call to get some help with your email and we'd love to help you all right, let's dive in now to this very extensive interview with Joshua Shigala. Joshua, I thank you for joining me today. It's an absolute pleasure. All right. Yeah, so, as we're talking about off air, we have, well I have a lot of things. I am interested in you because your history as working in Australia. You're obviously here because you are doing some things in Crypto, which is Hugh Hudge and very popular right now, and I haven't had a lot of guests talk cryptos. I love to sort of open up some of the mysteries around that topic. I mean, I know you were around early bitcoin mount cocks. Obviously. It's funny because I played magically gathering when I was a teenager and Mount Cox obviously started, as imaged, the gathering website before we came a crypto exchange. So there's so much I want to talk about, but before we have in your history, I'd really just like a good summary. So vaultro is the longer running company run now, and then the standard. I feel like there's a spinoff kind of project, new business. You want to just introduce those two for us? Yeah, sure. So Volta was the very first after Mount Cox collapsed. I really wanted to focus on building and exchange, where the exchange was ultimately transparent, like radically transparent, because at the time Mount Gosfell, all those listens that don't know, was one of the first what was the first exchange for Bitcoin, and at the time there was a whole lot of bitcoin things that were just crashing and going, disappearing, getting hacked, and I thought this is just insane. You know, wasn't just me that lost a lot of money. It was like we're in a movement where in a movement to change money fundamentally, and these greedy bustards are ruining it for the whole movement. And so, yeah, that was the whole idea, was to not only have it ultimately transparent exchange, which I vended this thing called the glass books protocol, which we can go about later, but also implement that we start trading against other rare assets like gold and silver, rather than trading with fe art, which is the whole reason we're getting...

...away or getting into bitcoin was to get away from FIA art, and so it 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 Combo. So that's that's where that came from. And then the standard is a protocol, a defi protocol, which is sort of an infrastructure protocol, because there's a lot of gold, like ten trillion, and five of that is in personal hands, just sitting involving facilities around the world gathering dusk and storing value. So we wanted to give that more value by allowing people to use that to collateralize smart contracts and issue themselves a feat pegg stable coin backed by gold and Crypto, kind of like make a if anyone knows that, but the next generation of that, basically. Okay, yeah, definitely to dive into both of those two but I'd love to maybe cover them and we hit them in your story. So yeah, we were kind of discussing off are for we hit record your last name, Shikala, and the spelling and you said it might be Polish. I said, as an Italian, we don't really know. Will you actually born and raised in Europe or what's the family history? I was born in Berlin and the thing is I was born stateless to my father who was also stateless, and so he, because he was born stateless, because he didn't know his father, he could then travel or back and forth across the Berlin Wall, and so he had this special sort of passport where, hey, you're allowed in the east, you live in the east, your mother lives in the east, but you're also allowed to go because you're actually not east berliner or Berlin or at all. So, you know, being bored stateless, I guess I'm a natural born anarchist. I don't you're decentralize the birth that's amazing. Yeah, exactly. But then you know mother. She's Irish, so she got me a British passport and they're not being you know, got different passports and stuff now and so that's all good. But yeah, it's a weird thing when you think about not belonging to any state, when you start to think about what the role of a state is in protecting the citizenry and it's borders or its systems, it's always a fascinating thing and I maybe that had a part to play with my fascination in requin. Yeah, no doubt. I mean how could you not sort of see the diets? But connecting the darts there between stateless versus fear currencies. I was attached to a state. So, yeah, Inter think. And is your dad like did he eventually get a passport or what happened to him? Yeah, finally, like he's full berliner and he would have to go to the all slander but herder, which is like the immigration place, and he would stand in line helping all these people that didn't know German to fill out their forms, because he was a full German. But but he had to be there to like, you know, renew his things. Oh, yeah, he finally got German citizens you grew up then, in Germany? was that where you went to sky? No, no, I grew up in Australia. Hence the wacky accent, but basically my mother moved and immigrated to Australia when when I was like five or six, and from there I just sort of yeah, we stayed there and grew up in South Australia, down south. Then, yeah, moved and lived in Sydney for a while, worked work there and got into special effects. Basically, I was working in special effects and three the animation when it was still SGI's, the silicon big silicon graphics machines there. For those that don't know those, these boxes were like the size of fridges and I like toy story was made on that, the original toy story. And when I first got to Sydney I got asked to work on a project called the Matrix and I was like, uh, yeah, I'll do a little bit on that. I didn't even know what it was. I just I'll do this, like helping a friend out doing the sign waves on the sentinels and and then after and I didn't ask for more work on it because I just say I'm looking for actually doing advatared. I wanted to film. I do my advertising it because the fast turnaround. Then you're doing in something new every every month and it's more fun and film like working for a year on something. And Anyway, like a 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 just I'm yeah, yeah, I remember watching the Matrix the first time and I was like that bridge is really familiar with the rain. Oh, I know, I guess next to the station in Sydney. So yeah, it's it's fun when you're in the city where something was filmed. But Wow, you really missed out on the chance of like I mean it's funny too, because the Matrix is so much about, you know, illusions of structures and, you know, reality not being real. So they all these kind of indications towards what you're working on now. Yeah, with your I don't know it was a passion or like just an interest, or you decide to go into digital design because it was a way to make money. Was that? You're like all we talking graduating from university and then you went into that career. Is that? Or is it before that? No, I I left school earlier because I'd had enough of a it just was too slow and annoying...

...for me and I went into the real life and I got into real life went man, this is shit. Sorry, excuse my French that, this is a crap. Better go back to school and I went to the sort of adult re entry. After a year of being out, all of a sudden you're an adult and in like okay, and I've came across this little d animation suite in the school which was on these really one of the like like penttium something or other. Anyway, they had this program called D studios, before D Studo Max, if anyone knows that, it was like the predecessor on doss and you could like create a sphere and instantly shade it with a light and I thought that's amazing, like I just fell in love with the fact that you could take a sphere and just instantly render and then animated it with some key frames and this and that and the other thing and and just really sell down a deep rabbit hole with that. Absolutely love to. Then ended up making Australia's first animated short film on that with another guy and then calm. It was called under pressure. It was called under pressure, but you won't find out. It was just a little thing and I've been actually trying to find it and yeah, it's really it's gone. I want to release it again, but Youtube has everything. Yeah, I mean it was just five minute thing but it took a whole year to make. Yeah, it really sort of launched me into into that set of special effects thing and there wasn't really any school you could go to back then for this stuff. I mean I know it had d studio at this Autut r entry school, but it wasn't really anything accredited. It was just like hey, we happen to have this software and I just, you know, stay there. I dropped every other class, would stay in this little lab for days on end. Yeah, that's cool. You sound like me when I was eighteen and I discover an html and I was trying to design websites myself and you just sit there trying to move a pixel, you know, one left or right, and it's like waste the time, but it's so much fun you're doing it. Yeah, yeah, right, absolutely. Now I can tell your career based on I know your linkedin here. You definitely like you continued in animation in design for a long time, but you transition to it to television. Is that I would happen, because I seen awful lot of TV stations I recognize growing up in Australia myself to turn a night on a seven. So how did that happen? Yeah, I mean I was in post production for a long time and then TV pulled me to be head of their special effects departments. And Yeah, so working television then doing their promos and special effects in certain shows and things that were needed to be done. And Yeah, in the meantime, though, I always had multiple startups going in the background, because it who wants to be bored? So I had had this sloop of startups that were happening in the background and when you're young you can basically deal with for our sleep, so weeks on end. So, yeah, these startups really led me down a passion of alternative economies, especially swap style, because I really wanted to create a platform where people could swap things rather than buying and selling, because I just felt like, especially after eleven happened, I really deeped, dove into you know, not only into like the hardcore conspiracy staff, but also that kind of led to understanding banking and money and fundamentals of money and you know, I think it's something that's definitely not taught in school. If where does money come from? What is money? Is it is it back by gold? Where does gold get its value from? What is and and the sort of fascinating questions. And then that led on to reading Mesas and all of the Austrian economists and and really understanding boom and bus cycles and and all of this stuff. has found it really extraordinary because it's stuff that you just don't get taught sort of hidden. I'm kind of curious about the connection then, because swap style, which you just mentioned, is in the fashion space really like it's clothing swap. And then I think before that you actually also had some another start up, a fashion boutique. I'm not sure I'm seeing in history here. So you clearly had an interest in fashion as well as not really, I mean my girlfriend at the time or wife, she was right into it and we started swap style before the Fashion Boutique. And but the thing was that swap style was actually, when we engineered it, it was to swap anything for anything. And this is a really interesting thing for anyone that's building a startup is that when we did anything for anything, we had all the mechanics and all the categories and everything like that, no one took up the story. They're like a WHO wants to swap some well, I didn't get it. I mean you got to think this is the start, like very early Internet days. So people didn't quite get it. And as soon as we just went and dropped everything else and just made it women's clothes, all of a sudden every woman's magazine wanted to do articles about it and it was so fascinating. We had we had TV shows in Fox over in America and all the women's mags...

...just doing stories because it was all of a sudden there niche. And so sometimes, just like Amazon started in books, only, sometimes it's really good as an early start up to really focus in on one thing and then get those niche publications to talk about you. And how did it go? And just to clarify to so, swap style well, was a place where, like a website, you go to swap sidecom, you would list your own clothing for swamp and then other people would list theirs and you would just communicate directly and say we swap this for that, and then yes and in the mail. That was the basic idea. Well, wanetization model with that was basically let's see what happens. Actually, what happened is that I realized very quickly that swapping is it a really terrible way of doing anything in terms of a marketplace. Because let's say I really love your shirt, yarrow like, I'd be like, let's swop and you say, you know, I don't like anything of yours and the deal falls through and be stuck with that. And that was it. Even though there's an entire marketplace, the deal would fall through, nothing else would move, and so I already started looking then at some sort of like credit system that wasn't based on money. I was trying to figure out, how can we and that's actually when I started stumbling across some of the work that the cipher punks will doing online to figure out decentralized money, and the writings were very obvious that this is a problem that can't be solved, which was the double spend problem. You know, when I send you a Jpeg, you don't know if I've sent you the JPEG and I've deleted it, like it's just a digital things are abundant and and so this problem was unsolvable. Every bit of literature that I read said it was unsolvable, but these crazy guys kept on working at it and I kept an near to the train track, so to speak, and that's, I guess, how I came across the toy she's white paper so early on. Okay, interesting. So you're making me think of house swaps right now because I've been getting some ads on my social thrown at me about I swap my house and I go live in someone else's house and for the same problem you just mentioned, like hell, what if I don't want to live in their house the same time they do? Or, you know, I want this person's house and there was a third person involved, we might all want to swap. So of course, nationally they've created a credit system where you can basically give your house to someone else, you get credits to in the system and then you can spend those credits on other rentals. So I can imagine for clothing something similar. But if I was presented that idea today, I would say, well, of course you would token eye at and you wouldn't be a credit, it'd be a token. You'd can't because it just be the natural choice today. But going back in time with the sort of January two thousand and one, like you said, all the way up at the I don't know if you close it down or you or just, you know, sold it or whatever. Twelve years later to that whole business. Was it your main income stream during that time and or did you what happened? No, I was I was still doing d work, freelancing and and doing some advertising and channel branding and stuff like that. So I'd continue working a little bit but yeah, eventually sold it to someone else who then just let it die. Basically, okay, unfortunately, but tab but yeah, yeah, but you know, it is what it is and it really opened the gates to understanding money, because one of the things where, you know, the obvious idea is building a credit system into the centralized database. But first of all, I knew that egold got taken down by the government because the government doesn't like you making fake money, like it doesn't like people competing with their money. That's really what bitcoin broke, is the fact that there's no one to go after, and this why said Toci left, because it was an extremely dangerous thing to do. You're taking on the central banking system of the world, you're taking on the petrow dollar, you're taking on you know, the US arguably went to major wars to protect their oil settlement in dollar monopoly. Around the world there's stories of like a daffy wanting to do gold settlements side. I'm also wanted to do the similar things and you know, where are they now? But so to she really solve this and now I feel like people could do a centralized creditism, and you see that already with like stock photo sites and stuff. You buy credits and then you spend those their peg to a dollar. But I didn't want to create something with swap style, which was then emulating a central who am I to like print new credits? Then everyone has to trust me that I'm not just printing credits and buying myself stuff on my own platform or, you know, kind of like to ever might be doing. But this is the thing, is that I really wanted to build something else and this is what led me down the path of finding these crazy anarcho type people that were trying and to build something totally different, and it really resonated with me. Yeah, yeah, it's such an important point because there's so many examples of a platform or a community that...

...have their own virtual currency or credit, and you can take massive, multiple online player Games where they have an internal credit system and they can bind swap their items and so on and that functions. Okay, you were making me think of can't remembering specifically what it was, but I listened to a podcast about we chat and it's sometime early on in we chats life. An internal credit system was built in the Chinese government had to say no, you can't do that because people are using this now more than our actual currency, so they had to shut it down. But it is interesting that this is what led to your exposure to cryptocurrency and in the cipher movement. So connect the dots. Here. You were in digital design yourself. You're a running swap style as a side project, possibly with your then wife. You discover this world of Cryptome blockchain, but it's still super early, like I feel like two thousand and twelve. Correct me if I'm wrong. was sort of the Mount Cox, or even later than that, right any collapsed. What happened? Like, because you you were in Mountcox to. So how did you finally get yourself involved in that land? Yeah, so I started in late two thousand and ten really deep diving Bitcoin, and the only thing you could really do was buy alt pack of socks from some guy and think it was somewhere in Europe and there was Mount Cox Socre road to just sort of started as well. It was like wow, 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 of moral scope, it really was an interesting time because not only are you disrupting government sort of ability to control money and inflation, but you also had the ability for people to voluntarily trade things that government's might not like. Whether you like or dislike that, it's a really interesting lens to start looking at how society if you take that as first principles and project that out, what would happen? And one of the things that we really saw happen was the fact that drug market places started becoming really safe because all of a sudden the consumer could give feedback, negative feedback, to drug deals, like when was the last time he met some drug dealer down the back alliance that started shouting at everyone walking past this guy's selling crap cut with whatever. You know, you would just get a bullet. So this was the first time people, and you know anyone that was able to use bitcoin at the time. You know it was very technical. It was a very, very rudimentary system, so you had to be very technical and nerdy. So a lot of the people using Silk Road world like university students that had access to all this testing equipment. So they'd like buy a product on these dark webs and then test it at the universities and then right feedback like well, there's this much agent of that and became really pure and people could lay. But it was a fascinating sort of just to watch this play out, going wow, suddenly this trade is becoming a lot safer because getting better product. Plus you have to sell good stuff to just like Ebay, to be able to sell more expensive because you've got a good reputation and anyone coming in new would have to like basically have no profit because they have a new account. So there was really interesting dynamic that was playing out. And of course with that comes really negative, constant news and headlines and arguments against this sort of weird thing that's just for drug dealers or it's just a tulip bubble or it's just a there was, you know, all these typical arguments that you got back there, but it was a absolutely fascinating time to seeing this new, wacky technology full of people that were ideologs, and nowadays there's a lot of everyone in their dogs has got a little bit of an investment in this, but back then it was really people that were fascinated in either the technology and Cryptography, either in ideology of like anarchic ideology, or even libertarian. Wasn't an arch. It was libertarian, and so you would have these extraordinary conversations online about philosophy and, you know what, the community does. That happen in really and so really, really interesting stuff sort of played out. Sorry, I went a little bit away. No more. Well, the only thing I don't know here is what was your role in like, were you participating at this point or just you having conversations? What was your your job? I would yeah, like, I mean I had an account, of course, in between talk and stuff, social was still around, but you know, I didn't really I just sort of was doing my own thing. I was ahead of, you know, D Channel Nine at the time and I just had a lot on but I was definitely already working on it. So we implemented them Bitcoin into swap style pretty quickly. Oh Wow. But the thing was no one knew what I...

...had. Could these emails like what's this bitcoin thing, and I'm like Oh, and I have like a page explaining and I was way too Geeky, because you didn't have seed phrases, so backing up was really hard. It didn't have hardware. While it's the original Qt, while it was just like this, which was the reference wallet of Bitcoin, that was the only wallet you could have. It was a complete nightmare. People kept on losing money and you know, you made before one take head to use it, but it was fun throwing it in there. Okay, so I feel like there's a couple of years between this and you starting Moll Toro. So is it a case of you're just living your life, you're working a channel nine. Someone had bought swap style, so that 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 kept, if I'm wrong, your source of Crypto the time being Mount Cock's. Then it imploded and that's what then triggered you to get into it. Is Up kind of the chronology of your journey. Yeah, I loved building little things and little weird applications like price checkers or, you know, just stuff that's kind of rudimentary and but yeah, it was really after seeing multiple things collapse. Like there was a service called INSTA Wallet Dot Org, I think it was, and dog. Anyway, it allowed you to like, as soon as you open that website, it would generate a wallet address and the URL would be your wallet. So you bookmark that and you didn't need a password nothing. You just sort of instantly have one and when you go back to you bookmark, there it is. If you lose your bookmarkets gone and people would just using of course, that was centralized service. All of a sudden they got hacked. Say That because they probably just ran off with all the funds. And you know, back then people were throwing around hundreds of thousands of these tokens because they're really sort of just funny playthings and it was so cheap, right, like that's the point to like could be billions of dollars now, but back then it was hundreds or a thousands of dollars. Yeah, exactly, exactly. And so it was really 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'd actually moved back to Germany at this stage to spend some time with my father because, you know, I'd never really spent much time with him and and he was here and so I wanted to, you know, it to get to know him better. And you speak German less him. Yeah, yeah, I speak job. I mean I didn't at the time, and now I speak very well. been here for like nine years, ten years almost, okay, but really what I wanted to do was build something that was ultimately transparent and also remove the banks from the equation and had a bank independent exchange that could trade between big kind of physical bullying that was held in high security volting facilities top to your facilities that were fully ensured and fully audited. And this was something that 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't know how liquid they are. And this is the beautiful thing about gold. It's just a bar of metal sitting in a vault like fully really really primitive money, you know. And the great thing is in order to comes in and counter it, looks at the serial numbers. There's a chain of custody, so you know that it went from the mind of the smelter to and it's never seen the sun, straight in to the vault. And these are Lbm, a good delivery bars they called, and that that it's just sort of means that you can absolutely be assured that's ninety nine point, ninety nine percent, and that you could ease. It's very liquid. The gold markets the second most liquid market in the world under the effects market. So it's if if it's like never seen the sun, because then it's you don't need to check it again. It just sort of flips and floats around. So right, so this was the idea behind volturo after the Mount Gux Hack, was really to allow people to hey, I just got paid in Bitcoin, I'll hedge it in gold because I run a TV shop. Let's say I sold a TV for Bitcoin and I'll hold it in gold and then when I need a restock, I'll sell the gold back to Bitcoin and hopefully my supplier takes bitcoin as well. But it was a way to really hedge out the volatility of Bitcoin in another rare asset. So these, you know, rare numbers versus rare metals. It's it was kind of a marriage made in heaven in my eyes. funnily enough, Bitcoin as couldn't stand gold and gold people couldn't stand bitcoin and I've never understood it. I was like, what are you guys fighting about? There's the enemy right there. It's called central banking. I was actually thinking so many times I've heard podcast where yeah, there's a gold believer and a bitcoin believer and they both you know, the store of value argument. That's what bitcoin might be the best case use case for it. So it's replacing gold, therefore, but you're right, it doesn't have to. It's just another store of value, and you are the first person I've actually hear, or at least create a company that's specifically about the cross exchange between those two commodities. So That's interesting. But yeah, by the way you describe that initial idea for it, it was well and truly for already converted bitcoin users right like they were receiving the bitcoin...

...then coming to volt Toro and saying, I want to basically back this up with gold and then vice versa. You could take out Bitcoin, you know, and the gold goes back. So can you tell me? You're in Berlin? I'm assuming you have this idea. Yeah, well, what's certain? When you have the idea, I won't even know how to begin doing what you just thought of as an idea. Like do you go find a gold supplier and then an engineer who can then make a exchange? Now works with this goal supply, like what's the engineer out of this process? Yeah, I mean this is the thing right 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 do it. And and then it's really the heart of hard things is building a start up around stuff. But basically I was lucky enough that my half brother over here is an absolutely brilliant engineer and he singlehandedly coded the exchange and then also way down the track later on, we were the very first exchange in the world to implement the lightning network, for the same reason that I could say hey, Philip, you know, can you chomp on this problem for a while? And okay, here it is. So that was really handy. But also being in Berlin and it's just a jump, skipping a hop away from Munich, which is got a lot of the gold industry in Germany, and then another hop skipping jump away from Switzerland, which is obviously hilly renowned for its gold industry, and also in London. So it's really that whole area between the London bullying markets, Switzerland, Munich Berlin. It kind of just sort of fit. So we had a meding with one of the largest gold suppliers in Europe, called Proorum, and they really loved the idea. We went in there first because we didn't want to give them an idea of saying, well, we want to build an exchange between their like okay, okay, and then we're like we're going to do it with Bitcoin, because you got to remember, folks like back then Bitcoin was only for drug dealers, just like the Internet actually for the you know, the very first people on the Internet, it was only for pornographers. Yeah, and and it had a really terrible name like it. What are you into, pornography? Why do you want the Internet? Like, no, like what? There's really good university, like it's but the narrative, whatever I'm believed, was that it's just for drug dealers and stuff, and so there was a lot to sort of get around. And but yeah, so we took a year to basically build the exchange and tested and the thing with bitcoin you can't move fast and break things, yeah, like you can in silicon valid, because if you break things you lose everyone's money. So you can't really build an MVP. You have to really build a quite a hefty infrastructure around it, and so I did take a while back then. Plus wheel really inventing stuff as well. So it wasn't you couldn't just take a library, javascript library, and plug it in and hey, press to you have a wallet. Really, you would have to build your own wallet and own Backup Solutions, own multi SIG solutions for security. It really are. You know, we're really deeped over and now we've been around since two thousand and fifteen and we've never had a hack or any yeah, anything like that. So touch would we've been security obsessed. It's since the beginning and successful because of the okay, so few me if I get to super basic here, but this will help me and the listeners. No, not understand too and I'm going to ask this for when you first rolled out the first version of the business. But I feel like it might not be that dissimilar from what happens today. I have a bitcoin in my own wallet right now. I want to use vulturos service. So do I transfer my bitcoin from my wallet to a Wallet on Voultro? And then how is that hedged against the actual gold? Like douse wiltro talk to a Swiss vault and say this gold is now been you bought this bitcoin like. How does the interaction happen? Yeah, pretty much. So basically, a user where a custodian of the Bitcoin. So people do? They generate a wallet address with US and then people send their crypto on there and then a little number goes bomb to reflect that state change. So now your bitcoin are stored by us. Now for the very, very hard core, I definitely think, and I keep always say it, don't use exchanges as wallets. Everyone does, especially if you do in this game, but you shouldn't. We've never been hacked or had anything happen. But it's just better that the whole ethos of Bitcoin is to be your own bank and to take that few days to really learn about security of private keys. How do you secure digital assets? But yeah, so people, people have that database entry. And then what we do is we buy good delivery bars, big, you know, either kilo bars or half a kilo bars, and then we sell those off to multiple people. So, but it's allocated. So what...

...allocated means is that if we go brokers and exchange, we're not doing our business properly. It doesn't matter. Liquidators can't touch our clients assets because it's not on our books. This is really important because if a bank goes broke, many people don't know there's but banks actually own your money. When you put money into a bank, it's not your money anymore, it's legally their money and they pay you some interest for that privilege and they can go speculate and do all sorts of stuff with it, and that's why you can have bailins and stuff where they just don't pay you back. You know, it's happen in Cypris, right, right. Yeah. So, so that was the point, was to build this legal framework around allocated bullion. And then, so what happens is we have this golden once that gold is sold off to a bunch of people over time, we of course buy a new one just before the last bit is sold out and, depending on the volume, will have lots more happening and it's constantly going and being sold back. Or so we sell to the wider bullying markets. Once people start selling off, let's say, bitcoins right up the top and people will start buying a lot of gold and then bitcoin crashes, people start selling the gold to buy back, buying the dip. That's when we'll buy it back off the client and sell it onto the item, pull their markets, and so there's there's a lot of cogs moving in the background, but we are still the cheapest way to buy and sell gold. Of course it's allocate. It's not gold. I mean 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 stuff hits 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 gold. You can do whatever you want with it. But it's that's where it gets expensive, because there's all sorts of insurance. As soon as silver leaves the vault, it attracts taxes and VAT and all this stuff. So okay, yeah, it's designed for equick in and out and that's kind of it. Okay. So just to clarify a couple things. If not that, it's going to happen, but if you guys went completely out of business disappeared. Yeah, any BITCOIN, I've transferred to your custodianship and actually just have the gold in wherever the vaults were. That's associated with or no. So when you put bitcoin on the site. You then have to buy gold with that, so you need to place a buy order. So we have two mechanisms. One is a Fort Order Book Exchange, where you have an order book. This is basically a line of people that want to buy and a line of people that want to sell it, and the people that want to buy exchange. Okay, yeah, Standard Exchange. It gets more expensive as people want to move down the line. It gets cheaper on that way, and at where it meets that you have the spread and we've just recently launched like an easy buy and sell where the counter ast counterparty every time, because a lot of people just wanted to quickly buy gold and then sell it again. But we are implementing right now. We had it for a long time, but we rebuilt this exchange from the ground up a couple of years ago and we haven't implemented this feature yet, which is like an auto trading Bot almost, where people would take a few boxes and it would as soon as the bitcoin would arrive, our system would keep an eye on that address and as soon as it arrived it would go and buy gold and then, you know, now we're making that a little bit more advanced and back then in the day. People wouldn't mind directly to Voltro and it would basically mine real gold with a little gold. Its kind of interesting, kind of cool. Yeah, what a connection. So you could almost have I could set up my mining facility. I'm in Montreal, as a lot of water energy. I could set it next to a hydro plant. It will generate bitcoin into my wallet at Vaultro, which is then and turned, turning it into goal. I could turn into gold to my water could be turned into gold basically with yeah, yeah, yeah, absolutely. Okay, so that makes sense to me. So really the main feature here was it's the exchange. If I want to play with both a cryptocurrency and gold, knowing that I actually own the gold, when I have the gold on your platform. Where does though, the one part a little lost with. Obviously with Mount Cox. It gets hacked. All the wallets addresses are taken by the hackers, so they get all the crypto that was there. So then in disappear four hundred and sixty nine million or whatever it was. How is your your system? Obviously, besides the better layers a protection we now have with exchanges, but, like you said, you know, coin basis still an exchange, it still has your crypto rather than you have it unless you pull it into your own wallet. Right. So where's the extra layer that? Is it only because if I turned it into gold it would be protected? Or is there anything else that I know it's so start on. Yeah, so one of the things that I really put my mind on it initially when the Mount got hack happened, I wanted to build a decentralized exchange, and they exist nowadays, but back then there was only bitcoin. There wasn't a Theorem, there wasn't these two incomplete smart contracts that could write complex you could execute complex code on a blockchain, but...

...bitcoin didn't have the what's called operator and because basically the programming language of Bitcoin wasn't sophisticated enough to allow for the centralized exchanges. So, rather than that, I sat down and really figured I want to focus on transparency, because, hey, what's the blockchain? It's this amazing transparent mechanism where you could follow the money and and see how much is somewhere. So what we focused on, rather than a decentralized exchange, which we couldn't build at the time, we focused on utilizing transparency. So we took the blockchain as an inspiration. So what we did was create this thing called the glass books protocol, and how it works is that we would give everyone an anonymous ID. So we would give you an anonymous ID, so only you and US would know what that is, because we issued it to you and then you could log out, so we don't know that you're checking. And we would publish every ID code and how much bitcoin the idea has and how much gold that idea has, so anybody at any time could check their idea and check I it. There's that much should be on my account and we can't fiddle with those numbers 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 is right. Otherwise someone will be screaming and shouting on the Internet somewhere because we have a lot of clients and they can check at any time. And then we publish the cold wallet addresses, and we had at the time this concept of a warm wallet. Won't boy your listeners with that, but basically the cold wallot addresses, people could check. The sum of everybody's holdings was less or equal to the amount of crypto in the cold wallets. And so this all of a sudden allowed people to audit us in real time all the time. But not only that. We had the voting facility statements, we have the insurance paperwork and the auditors people work in real time, so we could see how much gold bullian everyone has, how much gold everyone's got, and make sure that also equals out. And so this was a real game changer in trust of centralized authorities. Of course you still had to trust that we're doing what we're doing. But if, for instance, Mount Gox had this, because the hack happened over a fairly long time. With Mount Cox, they lost a little bit of money, they sort of hid it from everyone. Turn into a Ponzi scheme where they're trying to like get new clients in to pay for anyone that's withdrawing, and and that then just spiraled out of control as they got into more and more legal problems and had to pay this in that and just ran their business terribly. But if there was this glass books protocol in place, I think even the owner, Mark Up Ellis, at the time would have been happy, because even he didn't know that he'd gone into a Ponzi, that he'd gone into a downward spiral because it was just all too complex. So having this sort of grandma friendly transparency allows for the community to give you a little tap on the show that say hey, there's something not right, there's like a kilo missing. You know what? Yeah, what's going on or whatever. So yet this is how it's done. Okay, interesting as we've grown, though, we have a lot of people constantly generating warm while it's a hot wallets, and so there's there's a little bit of technical issues. They're now with having ultimate transparency, because we obviously we can't publish a billion different addresses and have people check. But yeah, we're working on different solutions for that as well. Okay, and yeah, I mean the short answer is there's not such thing as a secure centralized exchange right. That's the end of the day. It's impossible to until of it it is decentralized. So easy them even then, because even decentralized exchanges you have to trust the code. So with centralized exchanges you have to trust the code, you have to trust the banks that they're using and you have to trust the business. That's the exchange. So there's three trust things that you have to trust. With decentralized exchanges you only have to trust the code, because even if you're a code are, you still have to trust the code. Like a lot of smart contract orditing firms, their business model is basically praying because because they can read the code, they can look through it, but they don't know everything. You know, this is what hackers do. They find the bit that you can't see any ability right, they figure it out and and so this is a tricky thing with complex smart contracts and we're seeing it over and over again. I mean we saw a few epic hacks in the defy space because of this problem, right. Yeah, well, I was, unfortunately in Einstein Exchange and Vancouver, one of the last a bit of money there, and that was like I just had the money still on on my both in a wallt and just in their account with the USD and I was like wow, I didn't realize how vulnerable I actually was. It just the owner disappeared and much like you said, with a Ponzi scheme, I think that's what was kind of going on by the scenes. It was moving money from one to the other based on...

...whatever. There was a call for money, but eventually, obviously there's no more money to do that with and you're out, which forced me, as you kind of alluded to before it, to really learn how to put my crypto and cold storage for the first time. Go. Okay, now, I know, I feel now for safety. Said now I feel like I could lose the you know, the key in the and the anyway, it's safe for than any it could have been. I would like to maybe switch to the entrepreneur hat you're wearing. Has the founder of Volt Oro? Yeah, well, I mean that one, but you know, you came up, and I think was your half brother for Voltarro, and obviously cool idea even as a basic idea. You just allowed a person to have gold and Bitcoin and just trade them as they're going up and down and try and profit on the spread. Right. So that's that's a simple idea in many ways. So you and your have brother figure it out. You get the either word that Switzerland or Germany, the UK, the gold supply, the communication between your centralized platform and the supply, and then you go and tell the world you exist, right, and you get your first bitcoin deposit into your wallet and the first trade with gold. How did it go? Like how did you grow this startup? Oh, that was amazing. Like when we hit the go button, you know, we pulled an all nighter to really because you have this deadline of like launching and like things aren't quite ready, and isn't that? And we go and, you know, refreshing the back end to see like accounts coming in and people starting to Chit Chat on these forums because, you know, really it was still early days, you know, two thousand and fifteen, and it was just really exciting to see something that you've spent so long being built being talked about. But of course the first thing that comes out is like really, really strange, because they they would all of a sudden say, Oh, it's some centralizing. Why would I buy gold? WHY WOULD I? And some people really got it. And this is the interesting thing about Voltro is. Of course it doesn't have the millions of customers that like coin base has or CZ with with finance, but it has this core customer base that really understands economics. And so what was fascinating is that these booms and bust that we see there would be huge sort of signals in full toy markets showing that we're heading towards a peak, that certain little bubbles going to pop, because the people using us were very deeply in a deep understanding of economic theory, but boom and bust cycles and all the rest of it, whereas a lot of other exchanges there were just full of sort of moon boys that were just throwing money in anything and and would sort of live off the the troll box and chatting to each other. But so this is an indicator that liken like Tony and dropper. What's what do you mean? Indicator like buying my gold? He just volume. Yeah, like as soon as we started seeing massive gold volumes, it was the top and sure enough, after I like a spike in our volume, boom would drop down and then you could also see, as gold was being sold back off, that were like heading towards the bottom. You mean in the bitcoin price, in the cryptop price, or do you mean again the broader market, in the broadom and no, like versus Scripto, yeah, became versus gold. So I'll gold in the price of so they actually had a what we'd call a tradition, like gold really was a headge against scryptile in that case. Yeah, yeah, yeah, absolutely absolutely, and we had some amazing traders who made a lot of money. Like in two thousand and seventeen, would just put everything in the gold. It would drop Downer and they would buy it back a year later and it was extraordin and the other thing is in a lot of country, or in Germany specifically, there's like if you held gold for more than a year or Bitcoin for more than a year, it's capital gains free, and there's different countries that do similar thing. So people played it very, very smart with gold, and so our customers, they're very astute customer and so yeah, it's definitely been an interesting ride. Of course, in that hole, like starting a crypto business in two thousand and fifteen even now is extraordinarily hard because we have employees, we have marketing, we have all the rest of its servers to pay and gold suppliers to pay with with Fiart, you know. So it's really, really difficult dealing with the legacy banking system who absolutely hates you, doesn't understand you, thinks that everything is money laundering and drug dealing and everything else, when it absolutely isn't. Like it's literally people that understand. I don't trust the banks because they in fractional reserve. I do trust a chunk of metal that's sitting in a high security voting facility in Switzerland. So that's why I'm using it. And so it's really a difficult, difficult thing to start a start up in the crypto space because of this, and I think this is the reason why we're seeing such a boom in the defy space, is that hey, we're not going to deal at all with banks, we're just going to...

...be crypto to crypto only. And and it's yeah, the barrier of entry is a lot easier in terms of this sort of regulatory capture that the banks have done. And the regulatory capture thing is a very fascinating part of the whole story, because banks have built so much regulation around the cells. And it's funny because he a lot of people, especially on the left, are like we need to regulate the banks more, and it's like, have you seen the regulations that around banks? It's nuts, like the amount of rules that 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 these regulations to basically protect themselves to build a mode so that no one knows startup can compete because they just can't deal with that regulatory overhead. So the thing is they had this for years and news. That's why I like the term. FINTECH is a very new term. It really there was no true innovation in financial technology until so Tosh, you released the White Paper. Of course you had paypal. That was kind of it. You know, paypal was kind of the only thing, which was pretty revolutionary, I guess, but it wasn't massive and this really exploded a boom and the idea of fintech afterwards. But yeah, it's a very, very difficult game to play building a start up in this space, and there's a lot of regulatory arbitrage you have to play. Like if there's a certain country that does something better or were, you need to then move there, and you're always trying to stay on your toes. And all of a sudden the regulator goes man, not don't like it anymore, and or bank just goes shut down. You're like why, and they like, we're not obliged to tell you, and you're okay. So it's a struggle and this is actually one of the other reasons why a lot of centralized feard exchanges run off with people's money because banks, a lot of the time this happens. A lot freeze and entire exchanges money and the exchange might have a secondary bank or might not, and they're like in the background keeping it or silent, and they go again hoping that not everyone will come wanting their money. So they're like trying to like make stuff happen and they maybe open a secondary account, but that first account has frozen the money until they can prove whatever they want, because there and banks really made a business model out of doing this to crypto exchanges because they could keep hold of large amounts of funds and basically you have to jump through a whole bunch of hoops as the exchange owner to release those funds and in the meantime they're like speculating with it all, they're doing all the fun stuff the banks do with with credit as funds, and so yeah, a lot of time exchanges suffer from that and you don't even know that suffering from that. So, but it's getting a lot easier now that regulations of sort of made banks be a little bit more on board with that. Because there's been reports for years, for years, really strong reports, that most bigcoin activity, like most of it, a highly substantial amount, is totally legit that the tiniest amount is dark web stuff, buying drugs. But the narrative on the news is, of course you don't want to write about the person buying bedsheets, you want to write about this cool story, about this dark web, you know, like I was talking in the beginning of fascinating. It's just say it's the same as like the energy side of mining. It seems like, though. It's big coin text as much as a small country to mine and and you realize how much energy in another industry is using and another industry. We don't talk about that because it's not as cool. But run just to fill one gap, because you're talking about the banking system here, even with Voltro, what is your interaction with the banking system like? Do you have to exchange the CRYPTO, interfere to then buy the gold with fear you can't directly. There's no gold exchange or with that. Will Take Crypto as a direct payment? No, there's there's a whole lot of things that we need to move around. So will trade it in other exchanges, on multiple exchange we find the best price and there's a lot happening in the back end for avoid bank. Basically, no, I mean there's a bank there on us, there's multiple banks. They're on our side because we have to as a business. But use as funds aren't in a bank because they're either in Bitcoin or they're in gold, in the gold right. I think I'm between those two things. You need to go through the banking system. Still on something exactly. Yeah, because the gold industry, you know, people talk about the banking industry being antiquated, but the the gold industry is next level, like they're still walking around with pages on their belt and we're facing each other. Yeah, people like it's just weird. You know, they really in the when we first launched Volta, one of the where we were we first started talking to the gold suppliers that were like, Oh yeah, just fax us through the order and we'll look at it, and we're like this facting thing is isn't going to work. We're going to have to help your...

...tech team because we're looking at high frequency trades between the very volatile asset and a second not so volatile asset in comparison. Yeah, okay, and so, yeah, trying to deal with that when crossing that bridge was also fun. Okay, yeah, well, I can only imagine it, but I mean we're now, we're talking in two thousand and twenty one. So I realize you've been through quite the evolution over the last sort of seven years. One thing I don't know in all of this is your monetization model. Like you guys, as the founders, like, what was the plan at the beginning in how you would be able to help pay all these staff? And you have to have so much compliance, no doubt, lawyers, accountants, everything is adventure. Back to is. That was the only other question. Yeah, yeah, so we're running for a year and then we thought we better raise some money. So we got into Textis, which is like a venture capitaler, sort of Cellarina launch pad thing, an amazing system where they take people that have great ideas and teach them how to be entrepreneurs, teach them how to raise money and all this. So we got into the program here in Berlin and that really opened our eyes and our doors and from then we raised again another round. The MODEL, of course, is like any exchange. There's a spread between the buy and the cell on the market order, on the order book. We were taking fees, trading fees, but it was a struggle as well because the people are used to paying really, really tiny fees because in feat exchanges it was fairly simple, like we have to jump through multiple things trade it. On other exchanges we should also add fees and and then add. So we had to take a bigger chunk, so the trades were a little bit more expensive. But for that, for the people that understood what they're getting, it was well worth it because we will still way cheaper than going to a shop and buying gold because the spreads they're us, they're insane. So will still way cheaper. But for the crypto trader that was just sort of in and out. They were like, HMM, yeah, this is this is too much for me and and that's why we have like a core of really strong users that understand the value proposition that we're giving and it's really helped a lot of people. But yeah, it's definitely a niche product and this is why we wanted to now look at building out the standard which leverages the idea of holding physical bullying and go from there. Yeah, I'd love to switch to talk about how the standard interacts here, but just what couple more around vulture, because obviously shot more years there in time. Is it fair to say it grew? Even though you said it's a small kind of niche user base, I understand why. But did it grow primarily through word of mouth? Because obviously crypto and gold, especially starting in January to fourteen to fifteen, it would have been like on the news anything that was new, and well, we're on the news, but on the underground, on the forums, on the reddits, on the discords and so on. Right. So is that how you grew it? You actually have to hire PR and do a paperwork campaign and all that sort of stuff. You know, we tried all that stuff, of course. But yeah, it was primarily word of mouth. Primarily people would say, Hey, you know what, bitcoins going to a massive bubble and their friends would say you should maybe buy some gold. But I also would always be on different podcasts and different TV shows. is a Max Kuis has show and because a lot of these early people they you know, they love what we're doing. So and I had because I was in critic so early, I knew a lot of the people that had influence in terms of shows and things. So I you know, they were they would invite me on and that would then drive more traffic. And Yeah, definitely word of mouth and me being around, and I think definitely at at like events as well, like I was always doing talks, that people would always want me to talk at different events and stuff, so that that really helped as well. Yeah, okay, cool. Yeah, let's switch to the standard then. So just obviously we've been talking for a while, people may have totally forgot what you test mentioned in the standard at the beginning of what it actually is. So you want to give us another overview of what the standard is and how did it come about, because I feel like it is connected to Aultro in many ways? Yeah, yeah, yeah, it is. So obviously I watch a lot of CRYPTO projects and one of my favorite projects at all is the thing that spawned Defi, you know, decentralized finance. Of course bitcoin would arguably spawned defy, but in terms of the more next generation decentralized finance, the maker down protocol was really what opened up the world of DFI, because you have these centralized stable coins like tether man USDC's who have got apparently billion sitting in bank accounts and you have to trust that they are. And there's a whole bunch of risks with those. You have the fact that the banks could just decide to freeze the accounts and all of a sudden USDC you couldn't get it out, or tether would like what's going on or and you also...

...it's totally in transparent. You don't know are they have they got it? Are they liquid or they you know how many banks, the government's could shut them down and say hey, a tether was used for buying something in illicit so shut everything down. Do you mind, Josh? You just just for the absolute name in explain what tether and USTC like. What is a stable coin, just so people understand? Yeah, so tether came. It was the first sort of fear pegged stable cryptocurrency. So what they did, as I said, we're going to create a digital token. It's like Bitcoin, but it has no real value and we're going to say, when you come to us, will buy it from you every time for one dollar and will sell it to you for one dollar as well. In actual fact, it's ninety nine cents and a dollar and one set and that's their business model. But it'll stay always be around that, because if someone selling that more for like a dollar ten because they're on sorry, or for ninety cents, let's say, that's pretty easier. They're like desperate to get a rid of that. They'll I'll give it to you for ninety cents. Someone will buy it and bring it back to the tether corporation and sell it for a dollar and make that money. So the arbitrage, the arbor tours will always go around the way of trying to find where it's misaligned to the guaranteed price of one dollar, and that's what pegs are now. This was an amazing idea because what happened and such a simple idea. But what happened was exactly what I was talking about before, where banks were just shut down crypto exchanges accounts and would not allow them all they'd go into a massive regulatory overhead. So instead of doing that, they would say no, we're cryptore only we've got this thing called tether. It's not money, it's a cryptocurrency, so we're Crypto, crypto, so we're unregulated, and that's how they then grew. So it was a really great way for a crypto exchange to deal with fee art without dealing with banks and without all the regulatory overhead, and that's where it's sort of came from. But the fact of the matter is we don't know. Have they got the money? And the scariest thing about tether is that they can just print tether's out of nowhere, which are infinite, and go and buy these rare numbers called bitcoins or Theorem or whatever, these really special numbers, which there's only twenty one million of these things. So they must be laughing going home. We can just create these and go and buy these rare and someone's willing to swap this really rare thing for my like thing that I made out nowhere. So not saying that that that's what they're doing. I just say legal assumed the right like if if that got found out, yeah, it would. 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 that it's equaled or dollar, you're not. You're saying you always buy one. So so that's how they get around that. But it's a very scary thing to have this massive and just to let your listeners know, like jp Morgan Chase recently came out with a with a report stating that tether now is one of the largest investment funds, or the largest funds in the world, up there with Black Rock, just and Black Rock, like yeah, these are like the largest in the world, like crazy lot now it just want to clarify one thing is for the beginner listener. By Bye. I take my one thousand US dollars of FIA and I exchange that for one thousand tether tokens. Yeah, the tether exchange is keeping my one thousand us. Supposedly they're a supposed to have it available as a liquid asset to back up the tether token. But the kind of allegations going around here is they've taken my thousand dollars amongst all the other money. They're taken from people and they can do whatever they might want to do with it, like you said, by a Bitcoin or buy a property in China or all kinds of things like that could be happening. Yeah, and then absolutely a call for that money, then there's no liquid assets to back it up. It collapses. That's right, and actually it's a funny analogy, because this is kind of where fear paper money comes from. Fear paper money originally was a tether to gold M and all these people would have this heavy it was, you know, the people would have silver. They kings and Queens would have gold, but the people would have silver, heavy silver, and so they would take this to their like let's say the rough child's voting facility in Germany, and and they would give the silver over and the volting facility would ride a receipt. Okay, you one piece of silver, where you go and here's the receipt. And eventually people would just trade the receipts rather than I've got to go to the markets. I'm going to first go to the vault, get my silver out and go then to like they were. Just say no, I was just trade my receipt and then paper money. And the thing is that these facilities got so incredibly wealthy, so wealthy that people would walk...

...past these estates and say that must be a banker, because no king or queen could afford this. Is is just far too grand. And because they figured out that not everyone is going to come and collect their gold at the same time, so let's just write receipts and charge interest for riding a receipt out of thin air. And this is, you know, that the start of fraction or reserve banking. Mini you have a fraction of reserve on the outstanding credits that are out there. But yeah, Taylor could do the same thing. They just write receipts, they just create tether out of nowhere and say that it's tether. But they did one thing out of a report, apparently in the last tip after two thousand and seventeen, where it went right down and they bought a lot of bitcoin fairly much at the bottom. And so my feeling is that they're way over capitalized, like by far. But my feeling is that the USDC, which is similar to tether, but USDC is a regulated stablecoin, regulated by the US government. They have to have everything in full, checks and balances and they have to have all that liquidity. Now they are going to have problems as soon as the US goes into negative interest rates because when they go into negative interest rates that business model breaks. You cannot pay the interest fee by holding this stuff in the banks for billions of dollars. The whole business model breaks. So they'll have to go into a fractional reserve, a legal one. They'll get a banking license and all the rest of it to do that. But you've gone then. USDC stands for circle, and you literally have gone full circle. You've gone from Hey, let's go decentralized to like, Holy Moley, let's just have another system that's fractionary reserved. and well then, anyway. So, so what the maker doubt did to get around all of this craziness with the banking system and with tether's and you don't know if they're fully backed or not, if they're going to get shut down or if negative interest rates are going to hit. And what make it doubt did was say, here's a smart contract and we're going to allow you to put the theorium in. Let's say there's tenzero dollars worth of etherium. We're going to let you borrow five a like generate five thousand dollars of a stable cryptocurrency peg to the dollar. So you've got more value. provably. Everyone can check. There's more value locked in this smart contract then there is that you've generated out there in this currency called Die Dai. And how we peg it to the dollar is we say, okay, if you do this, you borrow from yourself, so you put a theorem and you don't have to sell it. So let's say this is good for multiple reasons. I bought a car, I'll be like, I don't want to sell my etherium, so I put it in a smart contract and I borrow enough for the car. And first of all, capital gains tax isn't there because I haven't sold. I've just got a loan and be inflation is paying off my loan. Plus I haven't had to sell and it's gone up and up and up. It's not good if the crypto crashes, but this is why you have an overcollateralization, because if Krypto goes down, the smart contract doesn't liquidate the assets in there. I'm sorry, guys, I hope you're still with me. Where I'm sure we last ninety five percent. I'm strugging a little bit with this one, maybe because for a lot of people don't even know what a doll actually is like. Obviously that's the starting point for in decentralized finance, but in a simple terms it's just we're creating decentralized and don't use the word institution because that sounds centralized, but that's kind of what they're trying to replace, the institutions that rhinal aspects of finance with a decentralized version of it. Maybe you can explain it a bit more through what the standard actually is just how that connects. Yeah, so we took this idea and really that was launched dike a few years ago and we've seen a whole bunch of issues with it. We kind of the like the next generation of this idea where you can collateralize smart contract racks with crypto assets but also with gold and silver and precious metals, and I'll talk about that in a minute and why. But the main thing was that just to make it super simple for people, if a pawn shop pawn if you went in them, to spell that up, this is basically you take your bike in, if you need money, you get it to them, they give you half the value and they get to keep the bike. If you don't come back in a week and buy it back for a little bit more than they lend it to you with interest, or you go back and your buy back and you have your bike. But this system is rather than trusting a shop to do that in a centralized mechanism. It's a decentralized mechanism where it's just a bunch of code where you send money in and it generates things and you have the private keys. You're the only one that has keys. And it's code. It's hardcoded. 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, you know what it'll do and it won't change. So this is what it does. And so the standard is all about allowing people that have got gold. There's five trillion dollars worth of personal wealth sitting involving facilities around the world. So we want to allow them to take that token eyes it into a smart contract. If they holding maybe a few thousand in gold. They don't want to sell the gold, but the washing machine broke. They want some liquidity. They can put that into a smart contract borrow against themselves in a stable cryptocurrency that's in their local currency. So we're starting with euros so to be standard euro, and then we'll be broading out the standard dollar, standard yend standard, ruble, standard, checkel standard, Australian dollar. And let me ask you this, and as an example, I have a million dollars in gold bullion locked up in a Swiss safe. I want to buy a property in Berlin. I come to in theory. I know you guys are sort of still starting it up, but it's up and running. So I bring it in, I collateralize my gold, so I somehow am bringing it to the Dow. That is the standard right. It's then turning. Is it the full million dollars worth of billion, or is it eighty percent or ninety percent? Gets turned into a euro stable coin, and then I could take the eurostable coin. I assume I could exchange it on exchange for actual euro. Fear if, yeah, if the House Sella would not take my euro stable coin. It would take my eurodollars and buy the property. But then what happens? Like do I have to pay interest to keep that loangoing? Is there a time stamp were have to pay it back? How does it all play out exactly? 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 s euro. Let's call them standard Euro. And what gives that value? What pegs that value to the euro? Well, it's this interest rate and well, we call it a stability fee. Just let make it does, but it's what happens is that if the value drops of s euro to the euro, let's say it's ninety cents to the actual euro, what the Dow will do? The Doo is like a the whole community that governed the system. They'll say, okay, lift interest rates a little bit on everybody. So everyone that's got loans out there will go, oh, that's too much for me, I don't you know the not everyone, but some people say I don't want to pay that in Shitter. So they'll go into secondary market start buying back s euro and that demand does what it creases, lifts the price back to you. Now, if overshoots, so maybe a euro ten cents, then the system might say, okay, drop the stability feel the interest rate and and people go wow, look how cheap it is to borrow money from the standard and they will then collateralized smart contracts and borrow from themselves, pump that into the market and that will of course cause too much supply, 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 the lever of interest rates, just like central banks do, but instead of a few old men in closed doors deciding to like lift the interest rates, it's like thousands of people all around the world, in a transparent manner, saying, okay, let's lift or lower the interest rates for the that's good. That's a good example. Understand. So my million called to the enter into the Ural stable coin. I have a fluctuating interest rates and might be a two percent which I have to pay off, I assume, using whatever means I have to make money. So it might be my job or other assets I'm I'm actually putting back in euros into is it your Dow and putting it back into a we're just buying, like, how is that? You send it back to the smart contract that you've got collateral in, that you borrowed from. So it's not us, we don't have anything to do with we're just coding this thing. So the contract is just like an address and it'll say and you go to a website and anyone can build an interface that will interact with this decentralized application, but will build the very first interface. So you'll go to the standard io and it'll see, you'll see on there. Okay, you've got this much collateral and you've borrowed this much and you don't have any time limit. The interest that you're occurring is basically just moving your collateralization, but to the cutoff time. So you always have to be over collateralized. The whole system has to have more value locked up than there is floating around. This this is very different than the current system, where we have zero collateral locked up anywhere and governments can just print more. So this is the the fundamental difference that we're doing here, that you can probably know that there's more collateral locked up. So and what happens if it does cross that collateralization? There's a whole bunch of people that have put seuro into a smart contract that's ready to buy up liquidated assets and they buy them fifteen percent under spot. So they get like a really good...

...deal for closing someone whatever. Right. Yeah, yeah, gold and CRYPTO. So there's it's contracts are collateralized with crypto like eth as well as bullying from participating voting facilities that have plug themselves into the standard. Right. So, for example, your vault Toro would be if I'm holding a billion dollars with a Golden Volt Toro, I couldn't say this and I need to get out half a million of that your asset purchase. I then go to the standard. I connect my vaultro account it. It pulls in half of my vault gold into the standard Dow. It then shows up as collateral and as drawable asset under the European stable coin in this case. Let's pull out the money. I go by my house or whatever, and then it shows me that I have to keep making this minimum while once it starts reaching the point if I get if I'm worried, I got to keep paying down that interest or paying down the principle there right, and I'm assuming that will be connected like it looks like a almost like a wallet with like an interface on the Internet, and I would just possibly need to move FIA into an exchange, turn it into the stable coin for the euro, move it the stable coin, into the standard protocol, do Owt, and then I could put exactly interest. Yeah, okay, exactly when you pay yourself back and the great thing is that over time, the inflation pays off your loan. You know, if you've got a loan for ten years and you bought with half a million, bought a house and then in ten years time, that same half a million buys a cotton of milk, then if I kind of paid off your house with a card and milk, sort of value, you know. So this is the thing that and a lot of people don't realize this. This is really financial education. One I one is harder the wealthy keep their wealth during inflationary periods, and every single time it's because what you do is you go short the thing that's losing value, meaning you borrow the thing that's losing value, sell it and buy back. So, for the listeners that don't know what shorting is, is everyone knows on the stock market, I'll buy some Tesla stock because I think it's going to go up, and everyone, I can comprehend that. You can think, okay, yeah, I get that. That's how you make money in the stock market. You also have a very important mechanism in the stock is change called going short, and that's betting on the price going down. How that works is, let's say someone has tesla stock and I believe Tesla's going to go down in price. What I would do is borrow that Tesla stock off that person with interest, so he'd lend it to me with interest and then I'd sell it straight away. It would go down in price, I'd buy it back, paid them back and keep the difference. And this is the idea of shorting. So the same thing when, let's say you're living in Venezuela. For you five years ago, what you would do is you would effectively borrow a whole bunch of Venezuelan Boulevard and buy physical, real assets with it and then, ten years later, buy back the WH are, which is like now worth nothing, pay the person that you borrowed it from back, with interest, of course, and and deal with that and it. So let me just maybe Mo less extreme example. And then Venezuela. Let's say I, and this is very realistic, I've got bitcoin at Fiftyzero a coin. Again, I've got a five hundred thousand worth of bitcoins. I've about ten coins. I bring it into the standard protocol. I want to use the collateral to buy a property. I buy a property worth, say four hundred thousand US dollars. So I've still got a hundred thousand kind of buffer and in the collateral there, which I can use to keep paying back the interest and keep me safe, whatever the case. Maybe, but while I'm doing this, the actual price a bitcoin doubles. Two hundred thousand. How does that impact the situation I'm in? Basically, you can go back onto the site and borrow more against that because the end of the day it's calculated in the currency that I'm real talking so yeah, and real time. So now you know if it's the standard euro that you've borrowed, then it would be equivalent to the euro price of your collateral. So my hundred thousand dollars would be two hundred thou dollars. Like a left over there. Yeah, okay, exact money I pulled out, because I'll be even pulled out, but the money I've left is fluctuating with the whatever the current rate is. Okay, yeah, exactly, got it, all right. So it's kind of a way to liquidize very illiquid assets still benefit from price increases and, like you said, you could hedge against ups and downs, if you know short and depend on where you like. Obviously you'd want to not spend it all like. That's also the risk here is you collaterize a hundred percent of it and then you're basically locked into because you spent it at that rate. Yeah, absolutely, you don't want to be liquidated like there's that penalty fee of fifteen percent. The reason for that is because you want to market for people ready to buy those liquidated assets, because when it look gets liquidated, what you want to...

...do is you want to take the euros off of the market because you get to keep the seuro stable coin that you've borrowed. Let's say you've disappeared, but the system always wants more collateral than as you are flirting around. So these people that buy these assets are basically taking standard euro off the market, buying the asset back, and when that happens, they get burnt. Those suros get burnt or destroyed and the people get the underlying asset right, right. Okay, I'm every last week questions. I know you've been here for a long time, Josh. I appreciate the time. We've died deep into your history and and also, I mean my last few questions are all around the standard protocol. So let's first I know we haven't mentioned it yet, but we'll put in the show notes and we'll mention it again. But it's the standard dot io if you want to check the current progress of this, and just so we know for other people listening earlier to vault Toros or vault or volt or vault, our ocom Vault Oro. Yeah, and just a few questions are around the stand because this is so new. Like all of this, defy is new. It's trying to replace very trusted institutions in our society. So a big part of this is just a lap untrusted, which, well, yeah, both right, like we trust them and like mainstream society will always trust the bank until they don't write. But I am curious even just thinking examples we were giving with a house or whatever, and there's so many layers, like the pricing of the Crypto, the stability of the Crypto, if you're using something like tether, what they're doing with, you know, the stable coin. Do I trust the DOO that you're talking about with your standard protocol, the interface? This Ho many different I feel like I don't call them breakable, but parts I don't yet trust and not even though it's technology breakable. Yeah, this code is yeah, it's a you know, this is one of the things why I think we've had such success raising the initial first round in this project is because we've had since two thousand and fifteen, never had a hack. We're obsessed with security and we do things slowly but properly, and this is, I think, I think, what people appreciated. Yeah, but yeah, sorry to interrupt you there. Well, now my questions are like, how comfortable should I be moving like if it's I have a million dollars net worth and I do want to keep it safe, but I also want to be smart with it and leverage it in best ways I can. And I just don't know whether I trust anything in Doo yet I'm having I can barely trust bitcoin because I can buy it oncoin base or, you know, some kind of reasonably. Now it's flowed on the stock market. It seems like I have a regular later it's safe, it's not Mount Cox. Basically, you know, I've reached that point where we're Robbin her traders so on, but we're not like there's no doubt I know of that mainstream society feels like, you know, they don't have the apple on their phone and they're using it too. For example, I can imagine the amazing the standard APPs on my phone. I just go I need some cash and pull it out of my collateral anyway. You go right, I could. I could run my entire life on just that one account potentially, and it's going all against my I'm keeping in in bitcoins. I'm not. I'm getting the benefits of that. So how do we get to the point like, I guess that's my question here, given all these things that we don't trust and we don't know yet, how do we get to the point where this swaps out the pond store, the bank and that's PA wn again and the banks and the traditional lending and all the systems that we have in place now for, you know, hundreds of years, if not thousands of years, for a few currency? So how do we get to that point? One are the steps? There's so many scams in this space. So you have to trust that the code is right, that it's not a scam. There's a whole lot of bunch and people like yourself that have got great podcasts that educate the mainstream. Is One big pillar in this story. But the second thing is really having a solid grandma friendly user interface and that it's all about user interface, because when bitcoin first started, it's this ugly interface that was absolutely written by Satoshi himself and it's just awful. Right, it was made by technicians for technicians. But as you move further down the line, like when the Internet first arrived on the scene, to write an email, you had to do it with command line and you would have said, well, how's anyone ever going to use this? And now you've got grandpa sitting in his nursing home on his Ip had swiping all day long. And this is really what it comes down to, is that things like the ipad focused on user experience and on intuitiveness and having no real manual for it. It's so intuitive that you don't need a user manual, and this is what it comes down to. But without a user man you kind of need that education, and this is one of the beautiful thing I love about...

Crypto is that it's brought the conversation back to what is money around the dinner table. This is a conversation that, when they were going off the gold standard, people actually had around the dinner table be like well, what do you think? Should we or shouldn't we go off there? And people say yes, but they would be this big debate and for the last forty, fifty, sixty years l like we just don't talk about that stuff. This it's not really mentioned. So it's had this renaissance of Education just within the family and because people are making so much money in Crypto, it's like I have to learn about this. So naturally a lot of people are going out there learning what is this, what is that? What is defy what is and so that, coupled with good interface, coupled with great education and resources like yourself, will allow that to happen. But yeah, I mean the main focus for us is to build. What we have to do is build an amazing user experience also partner with other systems. So we're already talking to ATM operators to allow the interface on an ATM to like draw out, because I think I saw what was it was like seventy three percent. I'm not quite sure that I'm it was something like that. Seventy three or seventy eight percent of all Americans, and I'm pretty sure it's something similar in Europe, are living paycheck to paycheck and this cycle is extremely hard to break because they just don't get a chance to save. So I feel like these sorts of technologies that we're building, but other people are to allow people to save but borrow from themselves to have liquidity to pay for life. So you can do a bit of both. Of course it's you know, you do need a little bit of extra, but building mechanisms for people to save on a regular basis with their paycheck and then borrow instantly liquidity from themselves so they can live but still save. This brain makes these sort of cycles, and so I think there's certain things about de fire that is allowing people to want to learn about it, which is really, really interesting. It's one of those great things about cryptocurrency that people really want to learn, and it's also having a knock on effect with banks like coin base, for instance, wanted dad to want to offer four percent interest on people holding fee art and the SEC was like no, you can't do that, that must be a scam. But really what they're doing in the back end is using all the defy and systems and in fact, for the folks that don't know, the decentralized finance space now does more volume per day than the entire fintext sector put together, and that includes these unicorns like Venmo. So the amount of volume is extraordinary. So if coin base was to do that, and how it's doing that, because that se was like, well, how you doing that? It must be a scam. Will know what you're doing is in traditional banks, you put your money in the banks and about fifteen people and layers all take a cut until they give it to some clever market maker who basically buys and sells with your liquidity and defy you cut out all those people and just stick the money into an automated market making yourself and and you gain those profits straight away. So you can gain like quite a lot of money just by allowing liquidity. So this is what coin base is doing and the SEC knows that if coin base does this, that it will be a black hole. People will move their money out of every single bank and say why would I store it with you, Deutsche Bank, if I can just bring it across to coin base and earn for the said map white like it's a no brainer. It's a no brain, especially when coin base gets a banking license or whatever else. You know, cracking is just got a banking license. So I was acting to ask you, because this sounds like the final hurdle here in the biggest one. That exact point you just made. The banking system, the government, if we distabilized or traditional way. I say we, but I don't know who he is. But you know, if if people start moving their money out of that and into even something as simple as coin base because they understand it, they're really comfortable with it, for percent interest, sounds great. It cost of the biggest problem with the banks. It takes away their liquidity and that feels like everything collapses in terms of the traditional sense will when that happens. So obviously the government steps in and says No. How do we get past this government hurdle? Is it possible? We have to go through chaos to get to a solution? Look, the thing is that the government can't stop this. It's just a matter of time. If coin base isn't going to offer do you think that sec can really stop someone going and buying to other collateralizing some contract over curve with a yield farming three percent, putting that over in to an n FFT, collateralizing so like the space is so crazy it's unregulatable. It really is, and so we just have...

...to come to peace with the fact that first the legacy system is breaking apart anyway. It's a complete, fundamentally corrupt system, and I'm not saying corruptors, in there's a corrupt person. It's just a corrupt system, meaning you can't have more credit than there is interest. It's like a huge game of musical chairs with way too little chairs and there's a lot of people that have to sit down when that music stops and it's not gonna be enough space for all of them. So this system is already showing the cracks. So they're blaming covid but it has nothing to do with it was already cracking massively and to protect the value of the dollar. Once you get into Crypto, you start to see why the US was constantly in wars, constantly trying to protect the use cases of the US dollar, because the more you know, every time bitcoin gets another use case, like yeah, paper now accepts Bitcoin, and it's like this big Yeh. Why? Because we as a community realize the more use cases you have, especially large use cases, the more value it has. So if the US loses the oil settlement layer of the US dollar, it's a huge use case that gets destroyed, further lowering the need to buy dollars on the markets. And so the whole system is slowly falling apart for multiple reasons, and this system just happens to be there for people to jump into. So, whether you are a technocrat and you just love the technology, you're going to get into crypto. If that's not the reason, then hey, you're some sort of like libertarian. If that's not the reason, 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 this weird nft thing that's going on and you can like what I can actually keep track of what I'm selling it. And if that's not the reason, you need to get money to India and don't have a bank account. Like, whatever reason you have, you're gonna fall into the system that is building around and thankfully and hopefully, it stays decentralized. And this is why bitcoin really, really really fought for having smaller blocks. There's a whole big thing here and I we won't go into it, because enough time. I mean they fought about it for four years and years, but the fundamental thing is you really need to stay decentralized, really, really, really important, because it's super easy to like Binat smart chain, for instance. It's just a clone of etherium. It's amazing because it's way cheaper, amazing, but actually it's super centralized. So what you've done is you've sacrificed decentralization for efficiency and speed. But what if we got then we've got a system that can be controlled if need be, and there's a whole lot of stuff at risk from the legacy system who still got a lot of firing power to try and control this thing. And and if we remember Napster in the music industry right there's a lot of fipping and throwing and suing and trying to stop things happening coming our way. As actual going to point out China and wonder about your input there, because obviously they have the leavers within their society where they can say we're going to make you disappear if you stop doing this. So it's I feel like they can take it in a very analog way. They can make the server farm go away that runs and stand. I know decentralization obviously, by its nature means it's spread around across the planet, all these different servers maintain it or individual computers. But I guess what I'm saying is I feel like I'm gonna Answer my own question here. I feel like, because it is so distributed, no one government can shut down the entire system. Yes, they could stop their citizens perhaps interfacing with it with the threat of their life. Basically, by the end of the 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 we have silicon and computers, then these protocols in these platforms and the blockchain continues to exist and it'll just be used. Spot on, I mean the profit driver. Profit driver is such a innately and powerful driver that we've seen proof of work that's behind the bitcoin consensus mechanism, like you said, take up more energy than some countries put together just by adding some profit into participating. Now what we're seeing in China right now is, yeah, they've banned proof of proof of works fairly simple to band because, hey, it's pretty easy to see the mega killer. What's just getting sucked into one area or you know, band it. But what's happening is we're seeing like proof of steak, which is just a wallow. It's just got 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 proof of for steake wallet that is basically taking part in securing a network, and the Chinese citizen that knows what they're doing doesn't even have to have it in China. They can just log into it somewhere else and run from there. So this it's a very difficult thing to stop. You can stop physical hardware, but network, software networks are extremely agile and hard to shoot bullets at. It's really like shooting bullets at a swarm of bees. It just a dumb so yeah, and your spot on, like you can threaten someone with force, but there's a saying, you know, that my Chinese friends would say, and that's the 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 like exporting money out of China. There's all these like controls, but the whole districts in China that deal with just that problem. It's let's see, let's see. Okay, Joshua, I move almost two hours here, so I do again really appreciate your time and such a great doorway. I think it too many topics for the listener, whether it's defy even just proof mistake versus proof of work like you just talked about. We're not going to go into that right now. You can research at yourselves, listeners. I just wanted to wrap up just with your own evolution here. You said you raised funding for the standard protocol. So where are you at with this project? Yeah, so we did a little presale just to allow us to hire more developers and do some rd and some really technical stuff, because the theorems very expensive at the moment. So we're going to natively doing on a layer to for those that know what that means, it basically means that we can do it at micro sense, like less than a cent transactions rather than for but nevertheless it's gotten us to a point where we can do this. The next thing will have is a private sale, and actually it's private because it's just anyone that signs up with us, signs up to the newsletter and joins the community and interacts with us and, you know, builds this thing, because we're still a small project, we're still pretty under the radar, and so it's people coming into our telegram, chatting with us, figuring out, you know, giving us feedback, and for those then we'll be a private sale available and that will help us raise enough money to build the MVP and really have liquidity, enough to put liquidity into markets and and allow us to kick start this amazing project. So, you know, we really see the standard as fundamental groundwork infrastructure for the centralized two D fight two, and so that's where we're at right now. So I definitely recommend people jump on to the standard IO and check it out, read about it and join the telegram and asks anything. Okay, cool. And just to clarify, when you say you're going to be doing a private rays, you're selling the tst token eventually and you use the collateral from that to higher engineers to keep building and move on. But the original rays you've done so far was that are so selling tst or you actually get angry. Okay, so you've not. There's no traditional VC, angel, anything normal funding here. This is all within the noisation. That's right. We have some angel investors and we had some vcs, but we really don't want huge whales and we have a few vcs that have bought, but they're tokens of vesting over time. Since your shows all about investing, it's important that one of the big traps that a lot of people are falling into in this whole space is they're buying into tokens that the community of called at the rug pools, where basically large players will fund the very early parts of the project. They'll see a doubling in the price of the token, and the team is excellent. That building their kicking goals. They'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 or right, the price is dump and they find it really, really hard to get that back up because people lose confidence. So yeah, we've tried everything we can to like the large players need to be vesting over a twenty four month period to forty eight month period and depending on how large this dake is, but yeah, TST is kind of the government's token of the whole system. So we talked a little bit about dows. We touched on it is a decentralized, autonomous organization and and it's kind of like companies to point o for the listeners. It's it's a way that people all around the world can govern the rule set of a system and be rewarded, and this taste tokens are kind of keys to that door and these people set the interest rates and they get rewarded for all these sort of things. But there's a whole part that we didn't touch on. My prediction, markets, that we're looking at using as a governance model, because voting on things is kind of a, I find, a silly way of making decisions and you know, everyone...

...has their everyone thing's voting is fantastic and if we didn't have it, we'd have dictatorships. But I think there's other mechanisms we can use rather than voting, and so maybe that's for another show, but yeah, that's pretty it's markets are very interesting side of this whole thing that we're building. So that's where we're last question, Joshua, what exactly is your day job right now? What are you doing? Like? Are you you CEO of basically like you've seen to be doing now, going on on podcasts and talking about the standard and helping to spread the word. And but you must do something during the day as well that to get this down. Yeah, I'm definitely working a lot. I mean so I step down a CEO from Volta and my half brother, who built my cofounder, took over a CEO. We were always sort of co CEOS anyway. He was just more in the background, but he's fulltime ce on that and I've really stepped down to become chief innovation officer, we've called it at lot or, and this is why we focus on the standard, to bring really another use case to gold rather than it just sitting there. We can allow people do all this good stuff and and so on a day job, yeah, basically organizing, building the team, finding great developers and cryptographers to join, reaching out to all my network around the world that have been in Crypto and know what they're doing to join us. So yeah, everything can Biz Deev to dealing with all the normal hr stuff of running a business. Yeah, and now with a decentralized one, it's a really fun, interesting thing, because you're dealing with people all around the world and communicating over telegram and discords and slacks and things like that. So that's what I do day to day is try to organize the team and yeah, okay, market in timeline. What do you when do you think this will be like? I will actually put it, download some kind of APP and collaterize microp. Yeah, well, my gold. I don't like to give timelines because it's something that's really hard build and we don't want to release something if it's unsecure. You know, really want to make sure that it's secure. But if I had to say a vague thing, we're looking at about about six months for the MVP. Okay, yeah, there's a lot of R and D that we're doing already and they have already been done. We've already started coding. I think we'll get it done earlier, but that's sort of a goal that we're heading towards. I mean we've seen projects like Cardano. It's been what four years, fore and a half years, I still don't have a product running. So it's like it's a hard thing that they're building, that we're building. They're trying to do properly we're trying to do properly. So it's just one of these things. Fair enough. How Kay Joshua Shigala. Thank you for almost two hours. What a journey from being born state list to growing up in Australia as a sort of designer, to then couple of startups with in fashion, with sort of leads you to exciteher punk movement, to then Crypto, to being early in Boitcoin, to losing what you had in the Mount Cox, to then starting Voltro and getting involved in gold and bitcoin exchange to their now the standard. It's that's awesome. What A and still then early making money stateless. Yeah, making one up. That's obviously massive. So any other websites besides the standard, dot Io and Voltrocom you want to share with us? Or I mean you can follow me on twitter at J Shegala. That's J SCIGALLA muscle rant about all sorts of stuff on there and whether you you know, you can engage with me with a agree with me or not. It sounds good. Thank you. Appreciate the time. Hey, I really really appreciate your time as well. It's been a fantastic interview, one of the best. Yeah, that was fun. Congratulations. You made it all the way to the end of that very indepth interview with Joshua Shigala. I hope you were rivetted throughout that and learning a lot. I was even just being there as the interviewer. I was learning a lot and I really appreciate the chance to ask Joshua for basic examples to run us through how both his standard, like his own company or platform that he's building right now, and just other examples of where decentralized anything will play out or could play out in our world. Obviously, with finance, I think is one of the most obvious and, to be honest, I think it it needs to become a standard. I'm not saying that in jest with the name of Joshua's company. I say that as a standard across all kinds of different aspects of finance. I don't think it's going to be quick. We're going to take years, maybe decades, to really get to the point where these forms of decentralized platforms are considered a norm for doing anything like lending or trading. Could be trading all kinds of assets, you know, imagine buying property, you know, with your cryptocurrency and then using that property as an asset on a platform like the standard to hedge against it, as it increats to. Sorry, not hedge against it all, it is hedging against it, but actually borrow and using that property as collateral to extract more funds without ever having to go to a bank for refinancing,...

...for reevaluation. It's all just done decentralized. The software does the math. It just releases those funds and you can decide how to use them, when to use them and even then, as I said, hedge against the value of your property by perhaps taking some of the value, turning it into another asset class. That might be confusing to you. Don't worry if that is the case. Just get your head around the basics. I think that's the most important thing you can do. Just understand what cryptocurrency is. Just bitcoin is a great starting point, and also what the blockchain is and how that is. What is that compared to Bitcoin? The bitcoin runs on blockchain. Learn what that means, how it works, and then you can dive in as deep as you like and maybe you'll go all the way to the point that Joshua is and consider doing a start up in this space or at the very least, start using some of the defy tools to potentially earn some amazing gains just on the acid appreciation, the potential for returns and interest. You could stake your crypto as a way to earn as well. There's so many ways to generate cash flow and appreciate asset value. Of course, not just the disclaimer, but just the hard truth about this. It is so speculative of 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 time frame. So obviously be careful and just watch everything before you dive in with any amount of money. Certainly do not put your entire net worth into this ecosystem because it is so fresh and you all right. So I'm going to wrap it up because it has been a super huge episode. I hope you did love it. If you did love it and you think this would help other another person, maybe anyone who's new to Crypto, this would be a great place to send them to start getting a feel for it and see two real examples of companies that operate in Crypto and what they're doing and why they exist. And you know what is the purpose behind them compared to traditional institutions that do this similar things, or just to hear a great startup story in a cutting up space, or I should say an entrepreneurs story entering the world of Cryptocurrency, very, very current. Send them to vested capital, Episode Number Twenty Six. You can also find us on all the APPS. Just look for episode Twenty Six. There on Apple, it tunes, you can go to Google, of course, with their podcast player. There's the audible ebook player does podcast as well. There's Amazon's version of this. There's spotify, which is growing in popularity. So definitely find 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 latest episodes. Have a lot more coming down the pipe and of course you can dive into some of the previous episodes as well. In fact, two episodes before this one with Joshua, I was interviewing Gabrielle who founded coin rule, which is another crypto start up. So a different methodology or different purpose behind what coin rule does, but another great story about cryptocurrency. That's all on the vested capital podcast with me, your host Arrow so I'm going to wrap it up. Thank you for listening again today. I look forward to talking to you again on a very, very near future episode. Bye. Bye.

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