>> Live, from Toronto, Canada,
it's theCUBE!
Covering Global Cloud and Blockchain Summit 2018,
brought to you by theCUBE.
>> So, welcome to the Global Cloud and Blockchain Summit.
I'm about to hand you over to John Furrier,
who is the Co-Founder and Co-CEO of SiliconANGLE Media
and Executive Editor at theCUBE,
he's about to do a
Fireside Chat with Al and Mathew,
I'll let him introduce you to them as well.
He's also involved in a major blockchain project himself,
so he's going to get into that with those guys as well.
So, and tomorrow we start at nine,
in the meantime, enjoy the evening, enjoy the food,
enjoy the chat, and I'll let you go.
>> Okay. Hello?
Thank you Ruth, appreciate it,
thanks everyone for being part of this panel, Fireside Chat,
want to make it loose,
but high impact for you guys,
I know, having some cocktails, having a good time.
If there's any questions during,
then at the end we'll pass the mic around, but.
We want to have a conversation,
kind of like we always do down in the lobby bar,
just talking about crypto and cloud,
and we ended up talking about
cloud computing and crypto a lot
because those are two areas that are kind of converging,
and the purpose of this event.
So we really wanted to share some thoughts around those
two massively growing markets,
one is already growing,
it's continuing to be great: the cloud,
and blockchain certainly is changing everything.
These two important topics, we want to flesh them out,
Al Burgio is the Serial Entrepreneur/Founder of DigitalBits,
he's founded companies both in cloud and blockchain,
so he brings a great perspective.
And Matt Roszak, leading crypto investor,
entrepreneur and advocate,
well known in the crypto space for goin' way back,
I think you gave a couple bitcoins
to some very famous people early on,
we'll get into that a little bit later.
So guys, thanks for being part of the panel and Fireside.
First question is: we know how big the money is,
I mean the money is crypto is
is flowin' around the world,
and cloud computing we've seen specifically,
and certainly in coverage now with Amazon's success,
Amazon Web Services, and Microsoft and others.
Trillions of dollars being disrupted in the traditional
kind of the enterprise, data center area,
and blockchain is doing that too,
so we want to get into that.
But first, before we get into it,
I want you guys to take a minute to explain for the folks,
just to set the context,
the kinds of projects you're working on.
Now Al, you have DigitalBits,
Matt you're investing and you're finding a lot of
interesting token dynamics.
So just take a minute.
Al, start.
>> (mic off) So--
Everybody hear me okay?
Alright, perfect.
Well thanks for that lovely intro.
Yes, my name is Al Burgio, I'm,
I've founded a few companies, as John mentioned.
Before the cloud there was internet, (light laugh)
and so it started for me in the late '90s
in the e-commerce era.
But more recently I pioneered
what's known as Interconnection 2.0,
and I did that with the company called Console,
for those that may know PCCW,
recently it was acquired by PCCW.
And with that we disrupted the way
networks at the core of the internet were connected together
More recently I've founded the DigitalBits project,
and now DigitalBits blockchain network, and with that,
you can kind of think of that as the
trading and transaction layer
for the points economy and other digital assets,
and you can do a lot of really interesting thing with that,
it's really about bringing blockchain to the masses.
>> Matt, what're you workin' on?
>> So, Matthew Roszak, Co-Founder and Chairman of Bloq.
Bloq is a enterprise software company, we do two things,
the premise is the tokenization of things,
so we think the money identity,
new layers of the internet are going to be tokenized.
And so, we go to market in two ways,
one is through Bloq Enterprise,
and these are all the software layers you need to
to connect to tokenized networks,
so think a wallet, a node, a router, etc.
And then Bloq Labs we build, and partner with,
some of the leading tokenize networks and applications,
so we build a connective tissue
and then we actually build these new networks.
I started this space as an investor over five/six years ago,
investing in some of the
best entrepreneurs and technologists in the space
build a great network.
But I love building companies,
and so my Co-Founder and I, Jeff Garzik,
built Bloq two and a half years ago.
And then lastly, also serve of Chairman
of the Chamber of Digital Commerce, so,
so if you believe in these new tokenized
money layers, identity layers, etc,
regulation comes into play.
Certainly today from an institutional adoption level,
and so if you care about this space,
you need to spend time to kind of help that dialogue improve;
this technology moves way faster than
folks in DC and elsewhere, so.
>> And the project that we're workin' on at SiliconANGLE,
is we've tokenized our media platform,
and we're opening it up to a token model,
and have kind of changed the game.
So all three of us have projects,
want to put those in context,
we build everything on Amazon Web Services, so,
the view of the cloud, we also cover it.
The cloud computing market is booming,
we see that Amazon Web Services numbers
empower the earnings for Amazon's company,
obviously Apple's trillion dollar evaluation
those are clear case studies;
but blockchain could potentially disrupt it all,
and Al, I want to get your thoughts,
because even today in the news
at Microsoft Azure, which is their big cloud provider,
announced blockchain as a service.
And folks that are in either the data center business
or in cloud know the shift that's happening in the IT world,
but no ones really connected the dots on
where blockchain intersects,
and also, is it an opportunity for the cloud guys,
what's the landscape look like, so.
What's your thoughts on that,
how are they connected, what does it mean,
how does a cloud company maintain their relevance
and competitiveness with blockchain?
>> Well, just pointing on the fact that,
you know, today we had that new Microsoft, the Azure cloud,
their support and evangelism for blockchain.
You know, a company,
I think it's very important that this isn't an ICO,
two kids in a garage saying their doing something blockchain
this is a massive, multi-billion dollar company;
and making a decision like that is not trivial,
it's many, many departments, a lot of resources,
before such a thing's announced.
So, that's, not only is it validation,
but it's a leading indicator as to this trend,
that this is clearly something that's important.
And a lot of people, if you're not paying attention,
you need to be paying attention,
including if you're in the cloud industry,
'cause many companies obviously do compete with,
with Microsoft and AWS, so.
It may be still early, but it's not that early,
in light of the news that we saw today.
With that, I would say that,
a lot of the parallels I like to kind of,
if I was an infrastructure provider
I'd look at this from the standpoint of
the emergence of Linux when it first came on the scene.
What was important
for companies like Red Hat to be successful,
they had competition at the time,
and you had shortages of Linux, let's say engineers,
and what have you.
And so, a company like Red Hat built a business around that,
and they did that by
how they kind of surfaced and
validated themselves to the enterprise of that era,
was partnering with hardware companies, so,
it was Intel, IBM, and then Dell, HP, and they all followed,
and then all of a sudden,
which version of Linux do you want to use?
It's Red Hat, you're paying for that support,
you're paying Red Hat.
And, you know, then they had their hockey stick moment.
Today, you know, it's not about hardware companies per se,
it's about the cloud, right?
So cloud is the new hardware per se,
and many enterprises obviously
are looking at cloud computing companies
and cloud computing providers,
infrastructure providers,
as the company that they need to support them
with the infrastructure that they use,
or sorry the technologies that they use, right?
Because they're not necessarily supporting these things
and making sure that they're always on
within the basement of that enterprise,
they're depending, or outsourcing,
to depending on these managed IT providers.
This was very important
that whatever technologies they're using in the lab,
that ultimately their infrastructure partners
are able to support the implementation,
the integration, the ongoing support of these technologies.
So if you think of blockchain like an operating system
or a database technology, or whatever you want to call it,
it's important that you're able to
really identify these key trends,
and be able to support your customer
and what they're going to need,
and ultimately for them,
they can't have a clog in their digital supply chain, right?
So, it's clearly emerging.
Microsoft is validating that today,
you know, clearly they have the data,
that they're seeing for their existing enterprise customers,
and they don't want to lose them.
>> Yeah, but remember when cloud came out;
you and I have talked about this many times Al that
it wasn't easy to use,
I remember when Amazon Web Services came out,
it was just basically,
it was hard to command line,
basically you had to use it, so,
it became easier now, it's so easy and consumable.
Blockchain, similar growing pains, but,
we don't want to judge it too early
with the opportunity that it has,
it's going to get easier, what're your thoughts?
And it has to scale by the way, Amazon,
at a large scale.
>> Yeah, I mean-- >> So blockchain has to scale
and be easier, your thoughts?
>> Another kind of way to think of it is,
to not necessarily think of cloud computing,
but the evolution the internet went,
you know, in Internet 1.0,
you know, we went through this dial-up modem era,
things were very raw back then;
great visions we had of the future,
like, it's going to be amazing for video one day!
But, not during dial-up modem era,
and eventually, you know, it eventually happened.
And user interfaces improved,
and tool sets improved and so forth.
You know, fast forward to today,
we have all of that innovation to leverage,
so things will move a lot faster with blockchain,
it did start very raw, but it's,
it's moving much faster than anything we've seen
definitely in the '90s and in the last decade, so.
It's just, you know,
it's a matter of moments, not years.
>> And I think Al brings up a great point on leverage,
because Amazon leverages infrastructure
to a point where it's larger than
Google, Azure, and IBM's public cloud combined,
and so yeah, massive leverage there.
And so, when these big cloud providers
provide this blockchain as a service,
it is instrumented and built
on top of their existing infrastructure,
not necessarily on blockchain infrastructure.
So, it's an interesting dynamic where
they're putting it on top of existing
infrastructure that's there,
but what's being build right now is the
decentralized Amazon Web Services.
So you have every layer of Amazon being re-imagined, like,
and incentivized so you have distributed compute
and access and storage and database.
And so, what will be interesting to see is that,
given this massive opportunity,
will Amazon
and some of these other incumbent cloud providers
become the provisioning networks of the future?
Of all this new decentralized resources that get,
again, if you want storage,
you have to start having smarts to say:
if I'm going to go to Sia or Filecoin or
Genaro or Storj,
compute, etc;
you have to start being a provisioning
layer on top of that to kind of,
you know, make that blockchain essentially work.
So, it'll be interesting to see the transition 'cause today
the lightweight versions to say yeah,
I have a blockchain as a service strategy,
and that's like,
well done, and check the box.
Now, the question is
how far in this new world will they go down?
And, as it gets more decentralized,
as universities and governments, corporations,
plug their access utility into these networks,
and to see how that changes.
That is much bigger than the Amazon of today.
>> I think that's an interesting point,
I want to just drill down on that if you don't mind,
'cause I think that's a fundamental observation that
every layer's going to be decentralized.
The questions I think I'm asking and I'm seeing is:
How does it all work together?
And then what's the priorities?
And the old model was easy;
got to get the infrastructure,
got to get servers, (laughs lightly)
and you know, work your way up to the top of the stack.
What cloud brings also is that:
a software developer can whip up an application,
maybe a dApp on a test network and go viral,
and the next thing you know they have
a great opportunity, and then they got to build down.
So the question is:
What are you seeing in terms of priorities on stacks,
portions of the stack that are being
decentralized and tokenized,
do you see patterns, trends,
as an investor, is there a hotter (laughs) area than others,
how do you look at that?
>> Well, I think it's,
it's in motion right now it's,
like I said, every layer of AWS is getting
thought through in how to create these digital cooperatives,
I have excess storage,
I'm going to contribute it to this network,
and I'm going to get paid in tokens when a user
uses that storage network,
and pays for it in those native tokens and so
that, coupled with all the other layers, is happening.
From a user perspective,
we may not want to be going to
pick a database provider, a storage, a compute, etc,
we're likely going to say:
I want a provisioning layer,
and provision this and execute this,
much like if we,
you know, there'll be new provisioning layers for
moving money,
I don't care if routes through Lightning
or Litecoin or Doge or whatever,
as long as the value gets across the pond or
the app gets provisioned appropriately based on
you know, time, security, and cost,
and whatever other tendance are important,
that's all I care about, but;
given the depth and the market for all that,
I think it'll be interesting to see how these are
developed with the provisioning layers,
and I would think Amazon or Azure, the future of that is,
is more provisioning than actually going
and doing all that at the end of the day.
>> That's great.
I want to get your thoughts guys on innovation.
My good friend Andy Kessler
wrote an op-ed in today's Wall Street Journal around,
an article around the government,
the US government getting involved.
You know, there's Twitter, Facebook, the big platforms,
in terms of how they're handling their media,
but it brings up a good point that with more regulation,
there's less innovation.
You mentioned some things outside the United States,
it's a global cloud,
cloud's operating globally with regions,
it's a global fabric.
Startups are really hot in this area so;
how do you view the ecosystems of startups,
in terms of being innovative,
things happening that you think that're good,
and things that aren't good,
obviously I'm not a big of the government getting involved,
and managing startups, the ecosystems but,
blockchain has a lot of alpha entrepreneurs jumping in,
you've looked at all the top ventures, the legit ventures,
they're all alpha entrepreneurs,
multi-time serial entrepreneurs,
they see the opportunity and they go for it.
Is the startup environment good,
is there enough innovation opportunities,
what're you thoughts on the opportunity to be innovative?
>> Yeah, Al and I were just talking about this
before the panel here,
and were talking about our travels in Asia,
and when we go there it is 10, 100 X of energy
and get-it factor, and capital,
and the markets are just wildly more vibrant than
you know, going to some typical markets here in San Fran
and New York in North America, and,
so it's interesting to see that
when you heat map the world,
what's really happening.
And you know, people are always saying:
oh well this, this FinTech, or InsurTech, or whatever tech,
is going to make a dent in
Silicon Valley or Wall Street.
This technology, this new frontier,
is definitely going to do that.
I think some of that will get
put into more focus based on regulation,
and there's two things that will happen;
there's obviously a lot of whippersnapper
countries that are promoting
a safe place to innovate with crypto,
I think Malta, Gibraltar, Barbados, etc, and there were--
>> Even Bermuda's getting in on the mix now.
>> Yeah! I mean so there's no shortage of that, and so,
and obviously this ecosystem outpaces the pace of regulation
and then we'll see like the US doing something, or you know,
other fast followers to try and catch up, and say hey,
we're going to do the cryptocurrency act of 2022,
miners get free power, tax-free, you know crypto trading,
you know just try and play catch up.
'Cause it's kind of hard in the last
year or 18 months we've seen this
ecosystem go from this groundswell
to this now institutional discussion;
and how do you back end the
the banking, the custody,
all these form factors that are still relatively absent.
And so, you know, we're right in the middle of it.
>> It's a whole new way, you got to follow the money, right?
Al, you and I talked about this; capital markets,
you know entrepreneurs need to raise money
and that's a good thing,
you need to get capital to do stuff.
>> Yeah, this is a new phenomenon
that the world has never experienced before,
it's awesomeness when it comes to capital formation;
you know, without capital formation there is no innovation.
And so the fact that more capital can be raised,
it's the ultimate crowd sourcing
in such an efficient period of time,
capital being able,
the ability to track capital from
various different corners of the world,
and deploy that capital to try to fuel innovation.
Of course, you know,
not all startups or what have you succeed,
but that was true yesterday, right?
You know, 90% of startups fail,
but they all will give it
some meaningful amounts of checks,
people were employed and innovation was tried;
and every once in a while something emerges that's amazing.
If you can do that faster, right,
when you have the opportunity to produce
more and more innovation.
And, of course with something so new as cryptocurrency,
things like ICOs and what have you,
people may kind of refer to it as the wild wild West,
it's not, it's an evolution.
And you have--
>> It's still the wild west though, you got to admit. (laughs)
>> Well, it is but, we're getting better at it, right?
As a world, this isn't the Silicon Valley community
getting better at venture capital or
some other part of the United States or Canada
getting better at venture capital;
this is the world as a whole getting better at
capital formation.
>> Yeah, that's a great point.
>> In the new way of capital formation.
>> And I wanted to just get an observation on that.
I moved to Silicon Valley 20 years ago, and I love it there,
for venture capital and new startups,
it's the best place in the world.
And I've seen people try to replicate Silicon Valley,
we're the Silicon Valley of Canada,
we're the Silicon Valley of the East or Europe,
and it's always been hard to replicate,
because it was a venture model,
and you needed venture capitalists and you need money,
you need a community,
the culture, the failure, the starting over,
and just, you know, gettin' back on the horse kind of thing.
Crypto is the first time that I've seen
the replica of that Silicon Valley dynamic, in a new way,
because the money's flowing, (laughs)
and there's community involved in crypto,
crypto has a big community aspect to it.
Do you guys see that as well?
I mean I'm seeing, outside the United States,
a lot of activity.
Is that something that you're seeing?
>> So, the first time we saw,
well, last time we saw
everybody trying to replicate Silicon Valley was
first internet, you know,
there was Silicon Swamp, there was Silicon Alley,
there was silicon this-- >> Prairie.
>> Every city was >> Silicon Beach.
>> A silicon version of something,
and then the capital evaporated, right?
We had a mass correction happen.
What wasn't being disrupted was value exchange, right,
and so this is being created now,
it is now possible for this to happen, and it's happening,
we're seeing amazing things,
Matt said, you know, in Asia.
It's a truly awesome force,
if anybody has an opportunity to go, they should go,
it's unbelievable to experience it,
and it really opens your eyes.
>> And you've lived through a lot of investments
during those .com days and through history now,
you've seen a lot of different things.
Your observations with the current state of the
capital formation, startup landscapes,
the global ecosystem around crypto
and how it's different from say venture or
classic rolling up companies and those kinds of things?
>> Yeah, you hear a lot of this,
you know, we're in a bubble, it's speculative, etc.
And I think that when you look back at history of
infrastructure, whether it's railroads,
telephony, internet, and now crypto and blockchain,
it's interesting, like,
if you said:
it would take this amount of money to innovate
and come out the other end of internet
with this kind of infrastructure,
these kinds of applications,
with these kinds of lessons learned,
nobody would sign up for that number, right?
It needs this fear, and greed,
and all the other effervescence of markets
to kind of come out the other end and have innovation.
I think we're going through a very similar dynamic here
with crypto and blockchain where
you know, everything's getting tokenized,
everything's getting decentralized.
We're talking about fundamental things like money, you know,
it's not like we're talking about pet food
and women's shoes and airline tickets,
we are talking about money, identity,
things that will enable like other curves
to really come into focus like in and out of things
and the kind of compounding of intersections
when some of these things get right is pretty extraordinary.
And so, but I like what Al said in terms of
capital formation and that friction to get from,
you know, idea to capital to building, is getting compressed
Yes, there will be edge cases
of people taking advantage of that,
but at the other end of this flow
will be some amazing innovation.
>> What do you guys think about the,
if you had to answer the question with one answer,
of what is the high order bit of
why blockchain's so important?
For me, I see it, from my standpoint, I'll just start,
I see it making inefficient things more efficient
for any use case, and that's being re-imagined,
which is everything from IOT or whatever.
Efficiency is a big thing, at least I see that.
What do you guys see as a high order bit in terms of
you know, the one thing that you'd say blockchain really
impacts the world in terms of
you know, impact, financial, etc?
>> Well, I think with decentralization
and all these things that we're seeing
it's kind of evened the playing field.
It's allowing for participation
where parts of the world were unable to participate.
And it's doing a whole lot of things in that area.
And that's truly awesome,
to really grow the economy, grow the global market,
and the number of participants in that market in all areas.
That's the ultimate trend at what's happening here.
>> And your information?
>> Absolutely, and I think there's two things,
there's this blockchain dialogue,
and then there's this crypto
decentralization, tokenization dialogue,
and on the blockchain side
you have lots of companies engaging in blockchain
and trying to figure out how it applies to their business,
and you hear everything from McKinsey and Goldman saying
financial services will save 100 billion dollars
in operating expenses by applying blockchain technology,
and that's great.
That is probably low in terms of what they'll save,
it's, to me, is just not the point of the technology,
I think that when you kind of distill that down to say hey,
for a group of folks to
use this technology as a shared services thing to lower opex
a trading settlement and decrease that, that's great,
that is a step stone to creating these tokenized economies,
these digital cooperatives.
Meaning you contribute something
and then you get something back,
and it's measured in the value that this token is,
like a barometric kind of value of
how healthy that ecosystem is.
And so, regulated public enterprises,
and EC consortiums around insurance
and financial services and banking,
that is all fantastic,
and that gets them in the pool,
gets them exercising on
what blockchain is, what it isn't, how they apply it,
but it's, at the end of the day for them it's cost reduction
The minute there's growth
or IP, or disruption on the table,
they're all going back to their boardrooms to say:
hey let's do this, this, or that, but,
if there's a way,
my favorite class in college was industrial organization,
and it sounds weird but, it was,
it kind of told ya like how to dissect an industry,
you know, what makes them competitive,
who the market leaders are,
and then, if you overlay like blockchain networks
with tokens, with incentives,
interesting things could happen, right?
And so that future is going to be real interesting
to see how market leaders think about
how to tokenize their network, how to be,
how to say: no I don't want to own
this whole industrial network,
I have to engage with some other participants
and make sure everybody is incentivized to climb on board.
So that I think is going to be
more of the interesting part than just
blockchain-ifying a workflow.
>> Well let's just quickly drill down on that,
token economics, what you're getting to.
So let's assume blockchain just happens,
as evolution of technology,
let's just assume for a second
that it's going to happen in a big way,
it's private, public, hybrid chains,
with all that good stuff happening,
but the token economics
is where the business value starts to be extracted,
so the question for you is:
How do you describe that to someone to look for,
what are the key elements of token economics?
When does it matter, when is it in play,
and how should they be thinking about it?
>> Yeah, I mean token economic design
and getting a flywheel going to create
a network and network effects is really important.
You could have great technology,
but Al could be a better marketer,
and he gets tokens adopted better,
and his network will do better because, you know,
he was better able to get people to adopt and market
a particular, you know, layer application.
And so, it's really important to think about
how you get that flywheel going,
and how you get that kindling going
on a particularly new ecosystem,
and get users adoption and growth.
That is really hard to do these days because
some people don't even know what Bitcoin is,
let alone to say I'm going to tokenize this layer,
and every time you contribute,
every time you take an action,
you're going to get rewarded for it,
and you're share the value of this network.
>> Can you give me a good example
of what's happening today that you can point to and say:
that's a great example of token economics?
>> Well, you see, I mean the most basic one is
shared file storage, right?
You know, it's like the Filecoin, Sia, Genaro model where,
you know, you contribute you know,
the unused storage in your laptop
or your university data center
or a corporate data center,
and you say I'm going to contribute this,
and when it's used I get these tokens and,
you know at the end of the day or week or year
you see what these tokens are worth,
and was that worth your contribution?
And so as these markets develop, and as utility develops,
we'll see what that holds.
>> Al, you got an example you could share?
DigitalBits is a good use case obviously.
>> Actually, I'm not going to use DigitalBits (John laughs)
just to be neutral.
This is one that Matt will know very well,
definitely better than I,
but one that I've--
the simpler something is,
the easier it is for people to understand,
and its like oh that makes sense, you know.
You know, Binance is one that's very simple,
you know it's a payment token,
if you pay with some other currency,
you pay, you know, Pricex,
if you pay in the next few years with their token,
you'll get the service at a discount.
And in addition to that,
they're using a percentage of profits,
I think it's every quarter,
to buy back up to, ultimately up to,
50% of tokens that are in circulation.
So, you know, it's driving value,
and driving return, in essence, if I can use that word.
So for a user it's simple to understand,
for someone that likes to speculate
it's easy for someone to understand
in terms of how the whole model works,
so it's not some insanely complicated mathematical equation,
that we can yes we can trust the math.
And so in some cases,
some adoption is going to just be,
you know, attract participants based on simplicity.
In other cases the math is important,
and people will care about that, so,
you know not all things are necessarily equal,
and not necessarily one method is right,
but there are some simple examples out there that
that have proven to be successful.
>> That's awesome, one last question,
before we open it up if anyone has any questions.
If anyone has any questions,
if they want to come up, grab the microphone,
and ask the three of us if you've got anything on your mind.
And while you're thinking about that
I'll get the final question for these guys is:
A lot of people ask me hey,
I want to be on the right side of history,
what side of the street should I be on
when the reality comes down that
decentralization, blockchain, token economics,
decentralized applications, becomes the norm,
and that re-imagining actually happens?
I don't want to be on the wrong side of history.
What should I be doing,
how should I be thinking differently,
who should I be following,
what should I be paying attention to?
How do you answer that question?
>> I think, at the basic level, you know,
turn off your phone, lock your door,
and study this technology for a day,
it's the best advice I could give.
Two: buy some crypto.
Once you kind of have crypto on your phone, in your wallet,
something changes in your brain,
I think you just feel like you--
>> You check the prices every day. (all laugh)
>> You lose a lot of sleep.
And then after that, you know,
I think you start engaging in this space
in a very different way.
So I think starting small, starting basic,
is an important tenet.
And then, what's amazing about this space is that
it attracts the best and brightest out of
industry, and law, and government,
and technology, and you name it,
and I'm always fascinated the people that show up and
they're like yeah, I'm in a 20 year,
you know, veteran in this space
and I want to get into blockchain,
it just attracts some of the best and brightest.
And, I think we're going to see a lot of
experience coming into the space,
you know, this has been a,
what I'd say a bottoms up groundswell
of crypto and blockchain and the evolution of the space.
And I think we're starting to see more
some more mature folks come in the space to
to add some history and perspective
and helpin' the build out of this,
and to build a lot of these networks.
I think that the kind of intersection of both
is going to be very healthy for the space.
>> Al, your thoughts?
>> Definitely agree with Matt.
Definitely to lock yourself up
and just try to absorb information,
everyone has access to the internet,
there's plenty of information.
If you don't like to read go watch a few YouTube videos,
just people explaining the stuff, it's really fascinating,
the various different use cases and so forth.
You definitely have to buy some,
and, you know, whether it's five dollars worth,
just go through the whole experience
of being able to trade something of value
that a few years ago didn't exist,
and be able to trade it for something else of value
is a pretty phenomenal experience.
Then trying to go buy something with it,
it's even more of a fascinating experience,
I just bought something that used, again,
something that didn't exist a few years ago.
But, what I would add to that as well,
you really have to get out there;
if you keep surrounding yourself with people
saying aw, this is, eh, whatever,
>> It's never going to work.
>> It's crazy, it's for criminals, and all that fun stuff.
You're going to be last place.
So coming to conferences,
obviously future's conference
you're going to meet a lot of interesting, great people,
and that consistent experience,
you'll learn something every time.
You know, at the end of the day, I remember,
I'm sure all three of us remember,
with the birth of the internet
there was many people that said
you know the internet thing,
it's crap, it's for kids, you know.
And we had first movers, we had willing followers,
and then the unwilling followed,
you don't want to end up being--
>> The unwilling followers.
>> Yeah, the unwilling.
>> Alright.
Does anyone have any questions they'd like to ask?
Come on up.
Yeah.
We're recording, so we want to get it on film.
>> So I have two questions.
The first one is for you, Al:
Two years ago I interviewed with IIX before it was Console,
and I want to know why you didn't hire me?
(Sparse laughs)
No I'm kidding! That was a joke.
Actually, I thought each of you brought up some good points,
minus you Al. (chuckles) I'm just kidding.
But what I really wanted to ask you guys is:
so you talk a lot about this,
the tokenized economy and kind of
the roadmap and the things to get there,
you talk about sediment layer, right,
Fiat to crypto, sediment layer,
your identity protocols,
your dApps, X, Y, Z, right?
The whole web 3.0 stack,
I want each of you,
or I want at least input from both of you or all of you,
what are the hurdles
to getting to a full adoption of web 3.0 stack,
and make a bold prediction on the timing
before we have a full web 3.0 stack that we use every day.
>> That is a awesome question actually, timelines.
You could be, being in technology, being in venture,
you could be right,
and you could be off by three, five, seven, 10 years,
and be so wrong, right?
And then at your retirement dinner you could say:
I was right, but Tommy wasn't right.
So, this is really hard technology,
in terms of building systems that are distributed,
creating the economic models, the incentive models,
it takes a lot to go right in the intersection of all this.
But it's not a question like is this happening?
No, this is happening, this is like, it's in motion.
The timelines are going to be a little elusive,
I'm way more pragmatic,
I was one of the early guys in the early internet,
and you know everything was going to be .com
and awesome and fantastic.
But the timelines were a little elusive then, right?
You know, it's like when was,
people are thinking of today's Amazon
was going to be the 2005 Amazon, you know, it's like,
that took about another decade to get there, right?
And people could easily just buy stuff
and a drone or a UPS guy would just deliver it,
and so, similar things apply today.
And you know at the same time we all have
a super computer in our pocket,
and so it's a lot different.
At the same time we're dealing with
trusted mediums right?
The medium of money, the medium of identity,
all these different things they're,
they're things that you know if I say download Instagram,
and let's share cat pictures or whatever,
it's not a big deal, our trust is really low for that,
let's do it.
For money, it's a different mental state,
it's a different dynamic,
especially if you're an individual,
a government, or an enterprise,
you go through a whole different adoption curve on that, so,
you know, it is at grand scale five to 10 years, right?
In any meaningful way.
And so we still have a lot of work to do.
>> My answer to that question, it's a good one,
your question was a good one,
my answer's a little bit weird
because it's multi-generational.
The first generation pivot was
when the internet was born was because of standards, right?
The government had investment.
The OSI model, open system interconnect,
actually never happened,
the seven layers didn't get standardized,
only a few key ones did;
that created a lot of great things.
And then when the we came out,
that was very interesting protocol development there,
the TCP/IP stuff, I mean HTP stuff.
I don't see the standardization happening,
because cloud flipped the stack model upside down
because Amazon and these guys
let the software developers drive the value.
It used to be infrastructure drove the
value of what software could do,
then software became so proliferated
that that drove the value of the infrastructure,
so the whole cloud computing equation is
making the infrastructure programmable for the first time,
not the other way around, so.
The cloud phenomenon's all about software driving the value,
and that's happening, so.
It's interesting because with blockchain you can almost do
levels of services in a cloud-like way
with crypto, I mean with blockchain and token economics,
and have a partial stack.
So think that this whole web 3.0
might be something that no one's every seen before.
So, that's kind of my answer,
I don't really know if that's going to be right or not,
but just looking at the future, connecting the dots,
it's probably not going to look like what we've seen before,
and if the cloud's an indicator
it's probably going to be some weird looking stack
where certain sections are working,
and then evolution might fill in the other ones, so.
I mean, that's my take, I mean,
but standards will play a role,
the communities will have to get involved
around certain things,
and I think that's a timeless concept.
>> Timing.
>> Oh, timing.
I think it's going to be pretty quick,
I think if you look at the years it took
for internet, and then the web,
everything's being compressed down,
but I think it's going to be much shorter.
If it was a 20 year cycle in the past,
that gets shortened down to 15 with the internet,
and this could be five years.
So five to 10 years, that could be the impact in my mind.
The question I always ask is:
what year will banks no longer be involved in anything?
Is that 20 years or 10 years?
(laughs) Exactly, so, yeah, follow the money.
>> So I would say that
in terms of trying to
keep your finger on the pulse with things
and how you kind of things, see things evolve;
things are definitely moving a lot faster,
you know in the past you would probably say seven to 10,
I'm not sure if I would say five, sorry five to 10,
it definitely feels to me that it's five max
til we could start to see some of these
key things fall into place, so.
>> So could you answer the first question?
>> What was the first question?
>> Why didn't you hire me?
(audience cringes)
>> We've met before? Sorry.
(all laugh)
>> I have a question,
this is Dave Vellante, Co-Host of theCUBE.
And I want to pick up on something John you just said,
and Matt you were talking about
Goldman Sachs and Morgan Stanley,
it's not about them saving hundreds of millions of dollars,
it's really about them transforming business, so.
And John, you just asked the question about banks,
I want to actually get your answer to this:
Will traditional banks, in your opinion,
lose control of payment systems?
Not withstanding your bias. (laughter)
>> Yeah, I am definitely biased on this.
But, I mean, I've been in front of
the C-suite of banks, credit card companies, etc,
and I said, you know, in about a decade,
the center of what you do and how you make money
is going to be zero.
And, 'cause there'll be networks,
and ways to transmit money that'll be by far cheaper,
or will be subsidized by other networks, meaning,
and those networks are Apple, Amazon, Alibaba,
you know, Tencent, whatever networks that're out there,
that're engaging in collaboration
and commerce and everything else,
they will give away payments as just a courtesy,
like people give away messaging or email or something,
as a courtesy to that network,
and will harden that network,
and it'll be built and based on blockchain technology
and cryptocurrencies,
so they don't necessarily have to worry about,
you know, kind of subtle payments.
But these new networks will start to encroach on banks,
the banks are not worried about other banks today,
the banks should be worried about
these new networks that're being developed.
>> How many people still have a home phone line?
>> That was elegant, I like that.
>> You know, I mean there's a generation of people
that still like going to banks,
they'll keep them in business for a while.
But I think that comes to an end.
>> I mean, when we covered a lot of the
big data market when it started,
the argument was mobile will kill the banks outlets,
and now with ATMs there's more bank,
more baking branches than ever before,
so I think the services piece is interesting.
>> And also, if you look at even the cloud basis,
the software as a service, SaaS space,
a decade, decade and a half ago,
you would ask SAP, Oracle, what have you,
what's your cloud strategy?
And they'd be like cloud?
That's just more efficient delivery model, not interested.
90 some billion dollars of M and A later,
SAP, Oracle, etc, are cloud companies, right?
And so, if banks kind of get into that same mode
to say well, yeah, we need to play catch up and buy
digital currency exchanges
and multi-currency wallets,
and this infrastructure and plumbing
to be relevant in the next world, that would be interesting.
But I think
technology companies have as much an advantage to do that as
as financial services companies,
so it'll be interesting to see
who kind of goes into that,
goes into the crypto ecosystem to make that their own.
>> It's interesting.
We were talking before we came on
and the OSS market, operational support systems is booming,
and that's traditionally been these big operational
outsource companies would manage big projects, but,
if you look at in the first half of 2018,
there's been a greater than 20 billion dollar
commercial exits of companies
through private equity merchants, IPOs, around OSS,
and that's where we see operational things happening,
CoreOS, Alfresco, MuleSoft, Pivotal went public,
Magneto, GitHub, Treasure Data,
Fastly, Elastic, DataStax, they're all in the pipeline.
These are all companies that aren't cloud,
they're like running stuff in cloud, so,
this could be a tell sign that potentially the
the blockchain operating market
is going to be potentially a big one.
>> Yeah, and then even look at BitMate,
the world's largest miner in crypto.
So, they did about a billion dollars in profit last year,
did about a billion dollars in profit
just in the first quarter going public,
just raised a billion dollars last month,
at a reportedly 50 to 70 billion dollar evaluation
in Hong Kong in the next month,
and the amount of money they'll raise
will eclipse what Facebook raised.
And so I think the institutional,
the hardware, the cloud computing,
the whole ecosystem starts to like resonate
and think about this space a lot differently,
and we need these milestones, we need these,
whether they're room huddles
or data points to kind of like
think about how this is going to affect your business
and what you do tomorrow morning.
>> Any more questions from the crowd? Audience?
Okay, great, well thanks for attending,
appreciate you guys watching and listening,
and guys thanks for the conversation;
cloud and blockchain convergence.
Collision course, or is it going to happen nicely, Al?
>> Yeah, I think it's going to be a convergence,
I don't see it necessarily as a collision course.
>> And a lot of money to be made on this
opportunity these days,
and cloud convergence with blockchain.
>> I concur with Al, I think there's going to be convergence,
I think us most smarter players will engage
and figure out their models in this new
crypto and tokenized era.
>> Thanks so much guys, appreciate it,
give these guys a round of applause.
(audience applause)
Thank you very much.
(bubbly music)
