#204 Ben Bollen & Jason Goldberg: Simple Token - Bringing Tokens to Mainstream Consumer Applications

Transcript

[Music] hi welcome to epicenter the show which talks about the technologies projects instead of striving decentralization and the global blockchain revolution my name is Sebastian would you and my name is Frank Levin crane we're here today with Ben Bowlin and Jason Goldberg so they are the founders of a simple tote now of course I've known Ben for a long time because we used to work together at moon axe and so so we recently heard about simple token it's a

really interesting concept so I'm excited to have both of you guys on today thanks for having us you should likewise appreciate it so maybe we can start with you Jason so you have a long and interesting history as a start-up founder and sort of a senior veteran known of many wars most importantly and perhaps best known you were the founder and CEO of company called fab comm which many listeners the summit listeners will probably have some vague memory of because it was once in one of the fastest-growing most hyped most exciting startups and then had a somewhat spectacular and an equally sudden demise

so do you mind sharing us a little bit like how did you originally get into startups and entrepreneurship and what was you kind of churning through that sure sure I mean my my background would like startups technology actually goes back to the mid 90s I was working at Clinton White House basically during the birth of the internet and there were a couple guys in the White House with me I was there from 93 in 98 who started looking at things like browsers and websites and started saying audience could really be kind of a big thing in 1998 I decided that I really wanted to jump into that and so left the White House went on to Stanford Business School in the height of the dot-com bubble and end up working with a number

of startups the 90s and in that worked for AOL back a well west basically the internet for a while and so summer 1998 actually you got I think yesterday they announced that aim is shutting down after twenty years and I remember actually writing a strategy proposal to the executive today well back at 1998 about how they should shut down the dial-up service and make aim the centerpiece of a new communication device that included a media player and group chat and all this kind of stuff they thought it was crazy so anyways maybe maybe something that started what ended up different if we've

gone that direction so we had things in reach at stuff like now but but yeah so after this is school I actually went back to a well and he's helped start the kind of international broadband initiatives very well and that helped launch t-mobile hotspot with a first-time product I've managed which is the nationwide Wi-Fi service rollout across the US and Starbucks airlines clubs I worked in the software side of that's really trying to figure user experience menu on working with a Wi-Fi and this is we take a random right now that our laptops and our phones all that Wi-Fi have a connector but back then was like that it's almost like you can easy draw

some parallels of things were thinking on that right now with have you on work people watching crypto well not so that you know it might seem too commonplace today Wi-Fi way back then it was like you know it was really really hard and so yeah we built like an on-ramp to to Wi-Fi hotspots then and then I wrote I that and started my own company first one that started was in 2002 2003 cobster which is in the social recruiting space and this was before Facebook before the social web and we looked at how do you help from enterprise standpoint how companies hire people through the people that their voice know who knows who those who kind of software for social networking and

then from that I met a guy named Nicias job during the it's initiative is my longtime collaborator now we even went near there since 2007 across a number of companies and he split my co-founders simple token today but so in 2008 January 2008 initiative than I about 12 other guys we started talking about social media which was a pioneer in decentralized collaborative news filtering I mean it was a mission that instead of the news organizations talking about to read every day you can figure out what to do is that you should matters most to you based on what other people that are news chair here compassion tweets are also

reading and always interested and that was again kind of early before its time is before the iPhone app story so it was basically a website and we grew to five million plus users and like five months it was like you say four anyways aspect like you do that and we sold the company after eleven months to seeing you guys probably know it's like dinner it was and yes I became the chief product officer and seeing public company initiative team care with me as well and then in 2010 we started coming called fabulous which was a gay social network and then in 2011 relaunched that s

babcom as a design ecommerce website and yeah I think you're like a weed and this is unbelievable we did 18 million dollars in sales on it first six months and then 112 in the next 12 and we sold over 300 million dollars in merchandise and the meteoric rise of fab and yeah just as just as fast as it rose it fell as well super fast and we could probably spend several hours weeks the podcast about all the mistakes we made on fab and lessons learned but I think you know it's very hard to defy the laws of crap physics and we were way too fast as the number one thing you know it's also

unless amount of you know raising lots of gobs and gobs of venture capital or money doesn't solve everything you've gotta give a blocking tackling right that was a really really good business for the first you know year to 18 months and then we just expand it too fast tried to try to grow the world too fast it just couldn't keep up with it and and then the same time also we ran into something called Amazon which in the early days of fab we founded it was like less than 10% of the products that we were curating on that you can find on Amazon and by about a month 13 piece about a month 30 of the business and it was like 90% plus he'd set something up

that the next day you see them hammers on for lower price free shipping he could be with that yeah so but I obviously learned a lot of lessons from that and after fab we had a spin-out from fat so we sold fab pcs international we sold the u.s. partner company 2014 and then we had a private label design cup basic brand inside of that I was based here in Berlin and we launched that as hem calm HTM calm company whether the Warby Parker or design furniture and that was really cool experience in 2015 we built that up

and sold that to the Beecher corporation which is Swiss German furniture maker billion dollar-plus and revenue beyond all the rights the Eames products and hem comm is live today still beautiful website teams doing really well they're super proud of what they've done that calm is also a lot of websites a 10-8 so you know it's it has sewn ownership now that it's a direction statement and yeah then in early 2016 I started a company called Peppo PEP oh and the idea behind Peppo is the kernel nugget that concept that took us to simple token today the idea was to

democratize the market for expertise and advice on user generated reviews and tips about places and things to do in any year travel and the idea from the beginning was rather than the existing models like TripAdvisor and yell tomahto like where everyone just gives away their content for free we could create kind of a economy around influencers advisers kind of giving people other tips and get even bored of that and selling other services around it and it was you know say eighteen months plus now that we kind of started looking at how to build a token economy inside and really took it on seriously I'd say over

the last nine months the idea is behind simple token or you know thankfully incubated inside of the investors and peploe very thankful to as well it really supported us doing that from the early days of kind of the concepts of how we would tokenize pep boats you know six months ago when I said hey guys the answer here is not tokenize an app it's to you know build the protocol in the software that makes any app to tokenize and everyone said go work on that keep going keep going that's been really inspiring y'all shut up when you go to ask questions but I'll say like be the one thing I'll say is it's the I've done a lot in my career and this is far and away the most the most intellectually stimulating the most exciting project

that could have the most far-reaching kind of value and and it's also just really great to be back to building tech again you got done ecommerce goods which I felt like in the beginning we build all of our technology fab but I felt like after in the new first year building the technology if Eliquis really just running a store and I ran that store for three years and others for him for a year and peploe is very much a consumer Atlas for and it's really great to be back kind of building technology again cool and I gotta say as a as a young ecommerce project manager working at an agency back in like the late 2000s fab more than once was in my presentations

as like having good UX and like right on the cutting edge of you know user experience in e-commerce and so that was a that was always one of the sites that we would reference as a situs SB Sorna undercutting answer I would say tons of lessons learned from the experience and I would say that you know one of the nice ideas you know I'm a product manager and I love building product designing user experiences and if I just stuck to that perhaps and kind of had someone else run the operations ecommerce business may be turned that's entirely different so so thanks for compliment really proud of what we do there well so we mentioned I'll touch a little bit on on the sort of you know

raising lots of money fast of course this is something that I mean you did back then and that's happening all the time now in the blockchain space what do you thoughts on that I'm a couple pots on I mean first well looking like the broader kind of story of where we're at on the blockchain and decentralized applications is we're kind of in the 99th criminal at the 1993 internet with the 1999 2005 and so it's like it's still so early early early dates I mean if you think might like the internet 1993 it was like you know pre netscape browser 1994 right it's like it's you know before that my friend David Boudia every Thursday night New York you start on Geocities probably most people is

this podcast never heard of but it was like basically the first way to build your own website on the Internet it was like before tumblr or kind of a long long time ago right before blogger or before and and Geocities was like doesn't exist anymore he built he launched I think in 1995 ne6 and then sold to Yahoo it's like you know was think about that we're how many generations past year cities Peres at this point in terms of the consumer internet and I look at the what's happening right now I said the world's gone through this 20 year of evolution of the internet and seen things kind of moved so fast in but it was a 20 year period and a blockchain everyone kind of wants to run to the answer already when it comes to the investment but without

kind of doing the blocking tackling to build the infrastructure and the technology I think there's a lot of good products out there people who are trying to build that infrastructure and you know prove out about it ecology but realistically speaking and it's early early early dates and when what I couldn't rappel from is like the speculators of the height there's way too much money going to the space for the wrong reasons at this point and you know it's because you know how do we get here right we got here because people see that this could be the future decentralize internet that could spawn got a whole new kind of infrastructure for thousands of different types of use cases and applications and whether it's b2b or b2c and new ways of the entire

global payment system could change the entire global legal system to change and and people see that they're like you know they're speculators are driving kind of the hype the money behind it and then frankly you also just have kind of you know you have some like you know Bitcoin which is you know whatever your thoughts are on Bitcoin is the value in Bitcoin is still it's very much kind of a value kind of like currency not a utility and so the value of Bitcoin is how much the next person is going to pay for it and and right now the next person is willing to pay $4,300 per Bitcoin which is come quite a long way superfast but I'm we're excited it is about is

obviously things like if they're gonna come around which is like our how do you go from value chain to utility chain and actually have you build applications and services that make it on this really meaningful searchable but everyone's seen okay so Bitcoin went from basically zero to forty 100 and so fast and then people started the etherium could be kind of undeveloped and popcorn for this and now it's you know don't dependence only to rise and ever in my mind is needs to catch their breath oh that was probably not gonna happen but it's catch your breath that's alright you know let's be practical here and I realize it's you've to build applications to builds you know services to build businesses takes time and a lot of these projects will fail and that's I think one thing

that a lot of people don't have kind of factored into the equation that said you know just because you give someone hundred million dollars two hundred billion dollars to find meters and six to eat in many pieces it means and Leslie likely to succeed and yeah so I mean even takes bad but we raised a lot of money but we raised money over a longer time I mean the the first amount of money we raised with AB you know what back when is fabulous I put seven hundred thousand dollars in myself matched by bcz put in 1.25 million and you know we ran out of that money like you know and right around the same time to realize that we had something in our hands and people liked buying designer

products of we're curating kind of so tippet the business towards this and then we raised literally it was like five hundred thousand dollars to launch that like and that was that was like it was proven time five thousand dollars and then we proved did it like within 30 days we raised I think it was like four million dollars wasn't like anyone said here's 100 million dollars don't have fun right which is kind of this crazy we're all over it today but yes I think you know it's it's it's there's been an extreme amount of hype it's it's all sorts of warning signs I think that you have companies that are considering ICO is for all the wrong reasons they'd to see the dollar signs they just see that they could raise money you know I think good news on that front is the regulators are coming in and I'm very

Pro regulation when comes to this I'm Pro consumer protection when it comes to this I think it's it's like Bridget's in the US right now there's no reputable law firm that will support an IC o---- for a token that's not a utility token unless you go through all the processes actually declaring yourself a security which I don't think anyone the right mind would want to do in a token sale and so that kind of is real slow down on kind of bad kind of deals in the u.s. you see some folks that have been then said okay we just won't sell the US investors or buyers and so they will see if you can't sell the US you can't sell the China who are you selling to and that's a large percentage of the population right they're just pieces cut

out and it's also frankly if you're selling to security its you're gonna you know you're really nail court and so I think you know there's all sorts of freshness that you need to have from both consumer dusters can put anywhere in the world that's gonna come up so whether it's you know US Hong Kong Singapore Germany doesn't you know it's like you it's not gonna last too long so I think what we're going to see is a movement towards good projects that are around providing utility that a token is required in order to provide that utility otherwise there should be a token involved and then we're going to see a lot of people building kind of the necessary on ramps and infrastructure that are enable more application services in the future and that's I

think where we should be at this moment I'm cool well that was and that was insightful analysis well so you've been can you share a little bit about your own journey I know you worked a might safe back then and Mona Slater what what are kind of the most important things that you've learned in that time that you know you want to take with you when it comes to simple hope so yeah actually you you also mention that I started out in mid safe early days like 2014 I quit University and and I really set out for for the open blockchain space privacy on decentralized systems and actually there's some lessons that that we

learned there that can be carried forward I mean we will get to that but then most of from 2015 onwards I joined you and actually thanks to you right like got in touch with you and then you hooked me into then errors and now Mon acts where we really worked on enterprise blockchain technology right and and the reason that I chose that for myself at that point was to separate out the incentive the mechanism design and and really allow myself to sort of study the technology of blockchain and the theorem and and get familiar with that but while I was doing that and learning that I also I mean I I knew this from

the beginning but the frustration there was like without the incentive design without the mechanism design a blockchain doesn't necessarily mean anything right so so we can get into that but it's a whole different discussion and so when I CEO hype if I can call it that like June and I started asking one question namely is it a zero-sum game right like on the one hand you have open systems like it theorem public blockchain they have the actual values of why we want to build lock chain systems but they're very expensive to run on it's it's more of a scheduler it's a simple ledger but it's not really a decentralized computing system and and on the other hand you

have these these these enterprises technologies that are far more powerful but are devoid of of actual meaning if you don't have the stake externalized in a system where you can lose it and so I I fundamentally believe that it's not a zero-sum game and and the thoughts that were arising there is like you can actually combine these two technologies and build something that is far more powerful if you have the value on public etherium but you do the computations on a just helping substrate that in itself doesn't carry any value but but has all its value externalized on public etherium then you can have

best of both worlds you can have the crypto economics of aetherium and you can have enough performance to actually start doing something and and so those thoughts started maturing over over the summer and then I've been friends with Jason for a long time and so I knew he was working on simple token as well so so that would really kick the kicked it off there for us or for me to jump on board full-time with simple token rather because they've been working on this for a long time and so so I'll point to that right like what I found really attractive two simple token the project was that they really worked from a

business case first from from like economic ideas and from legal ideas of how would you use this technology to solve real-world problems for actual existing consumer applications at scale and so to then design the technology for that was was really too exciting to not join you know so moving to the topic of a simple token in the documentation on the website and white paper you explain that simple token will be first deployed in its first use case on a service or a website called Peppo can you tell us about Peppo and then you

know perhaps move into simple hooking and how it will be useful in that context sure so I mean some way to think about Peppo is we wanted to build a democratized user-generated tips and news service where people who are influencers people who have contributed their their tips their content could earn money by helping other people with their advice and that's whether it's where you place the travel place to finish a the walking tours of your favorite city whatever it might be and the notion was that we wouldn't want to build economic model around this where you have kind of like the Instagram

ization of the world everyone thinks they're an influencer you still have people giving away their content for free to these large centralized applications and you have you know very large companies like TripAdvisor yell others like them who basically build their businesses and advertising models on the back sort of all this free contributing content from users and so we had this theory that if we created this platform for people to first to interact and contribute their tips and reviews and then a way for them to actually you know kind of monetize people finding those tips of abuse relevant but then around that you can build an economy around people selling

related services whether it's someone you know creating a personalized itinerary for you or a tour guide or Reverend might be and hopefully it came down to kind of a becomes an economy when the consumer or the end user maybe has a choice when they want to purchase something that they either they understand they either could take out their wallet buy it where they could take up a time or content data and then you have people kind of finally start before like Bitcoin and being a just basically it's one for some form of pavement you go towards more like something we're actually earning a living or earning through a currency and then you start developing economy so we start developing these ideas behind you

know the modernization and economy of Peppo over a year ago it was basically June July of last year we kind of developed some like the economic theory behind it we build out kind of models around things like how do you monetize up boats how when you maybe give people some kind of incentive kind of currency or token or one at a time to work on token Berkeley people point surrender might be that had some economic value to it they could then contribute when they're liking others people's content and that people are earning being a based on seeing that the more they contribute the more people like the contents the more they earn and then

from that they then could use the points or tokens the earning towards buying products that are related to the marketplace so you can see every time did you have an economic choice do I want to you know spend my night writing 50 reviews and hopefully people like them or and I just want to jump the line and buy some points and service and so we fleshed out kind of an economy behind this and to be you know to be fair and folks like you know reddit with some of this they've done but obviously not attached to a cryptocurrency steam it when Steve first came around we looked at this we said okay really cool idea here but gosh there's a lot we could do to prove on kind of the user experience

the transparency and it's we really saw some opportunities there I had like there must be a dozen people especially pcs I know really well when steam launch that said you know look at this and make it 10 times better if you can that's like I get there and try so and and then basically what happened is we kind of said all right let's just focus on the core technology at Peppo for the rest of 2016 it will turn back to the token economy in 2017 and our plan was basically mid 2017 to really take the tokenization of Peppo kind of an artist and a couple things collide at the same time in early 2017 so one is my longtime collaborator collaborator

initiative we would take in 2016 off he came back from his year sabbatical and say I'm signing blockchain and I know you're talking about kind of how to create an economy around Peppo and I've been studying a scene last year and really should consider whether we would bring your parts of the blockchain and think about kind of a token economy and say oh I haven't think about this also you know in terms of things like steam and other things we've brought about the fun of me and then we also modeled out kind of user experience of what that might look like started talking to some of the key actors and influencers in the marketplace and seeing how they would want to earn what kind of things regular consumers spend on and that's weird

stuff and then obviously you had the ICO kind of craziness that happened starting since I guess like March or April of this year and a lot of people started to say all right you guys are there in terms of you know having kind of design token economics you've designed user experience you know why should you go ahead and kind of go forward to try to think through how you would you know kind of launch a lot of people point token and there are a couple of aha moments that kind of led to simple token and I say so like one really cool project on Peppo has led to something that's much much much bigger and much greater and that have a much bigger

impact and to the so the two aha moments were one basically spackling starting in May we really started like dig into what would be involved in just tokenizing Peppo and just when and we looked at if you put aside even like the cost of doing an ICO which runs over a million dollars I think it realizes today but just all the all the work you got to put into it legal regulatory tax preparation I mean it's super like it's not easy it's not cheap if you want to do it right I guess if you want to do it a shady project over see what happens but and but then you just put that aside and you look at we look at all the technology that we would

need to build in order to easily tokenize one app and you know we looked at all right things that we would need to overcome we would need to overcome public ethereum isn't yet scalable to consumer applications we need to come to some sonic solution whether its private chain off chain permission chain side chain whatever it is and and that's gonna you know I've know been for a long time here in and we start talking about some of these concepts and how to achieve that and but you know even just and you know most consumer app developers are not gonna figure out that part of the room but then we looked at all right so what would we need in terms of inside of pepper well we had this notion of having kind of warm up or restricted tokens where basically you would give tokens to

users to kind of warm them up to kind of get them used to the kind of spending on certain that activity so they now almost feel like a locked token that you could you couldn't just the user can just cash it out themselves but once they transcript to another party you could say once it's transferred wouldn't you from - two or three parties that maybe something could actually cash it out it's we that see kind of innovations on that front we looked at how innovations we would need to do in terms of you know we would need to build KYC into our app we would need to build our cashing out you're required to know who your customer is when they're turning their points or tokens into real money you would be us it's all real money now you would need to

innovations around user friendly wallets around setting up the various transaction types and maybe sometimes the transactions are you know peer-to-peer completely you know decentralized but no intermediary and no transaction fee maybe other types of transactions are going through kind of a community manager in that case Beppo staying in transaction would be on certain types of transactions maybe you enable users photocell services directly to each other you would need to kind of enable having said that so I was like send an excuse on the Shopify or so like that and we kept unraveling food we have to do this do this do this you know we also have a lot of experience our team on building like internal tools admin dashboards and I think well a lot of people don't realize like if you're

gonna tokenize an app you need to like manage an economy right so you need to understand all the sources and uses understand like our people boarding tokens where they Ernie you want to monitor every single user and kind of look at trends in the token economy and and I know this might sound like a lot of an oversight like decentralize world but from an app developer this is some it's critical for managing your economy not just letting it be a free-for-all and kind of say all right whatever happens happens and so we looked at all this stuff and we would have to build and it was just like this you know died like you know if we're gonna build all this for one app that'd be crazy we should build this for for everyone and I think when it spoke to

was that there is a lot of amazing you know kind of infrastructure plumbing projects that have been going on in the blockchain world and you know even if you know as a simple token you will leverage many of them but for a consumer app developer or any app developer for that standpoint who does not have their own box chain developers you know they would need to first have their developers learn blockchain technology and then cobble together this and this and this with this and bring us together and kind of you know take years for them to kind of build to be able to kind of create their own token economy to be neat way from one app and we realized this needed is kind of this middleware layer that would enable kind of a kind of a an on-ramp for app developers be

able to embrace you know blockchain technology it's almost the equivalent of let's say you know uber and airbnb they didn't have to build their own messaging services but they didn't because it's not in their core business instead they used folio or you know if you're launching an e-commerce site today you you know very few building from scratch the way we did with that most of them would just start with Shopify or a big commerce or like that and we look at it's like one of the things that's kind of missing an opportunity or white space in the tokenization the blockchain world was to create kind of a very robust very useful middleware layer that app developers could use as their on-ramp to both create and manage their token

economy and and I think the other aha which again might not be same religion as everyone in the boxing world that was our project with Pepco is the same approach that I've had her back from lots of other consumer app developers is you know basically you know we don't buy this notion that everything has to be a centralized hat not everything's can be adapt or a Dow or dampen down like it's like it is possible that thousands tens of thousands millions of companies can benefit from having parts of their business on a block team without having the entire business owner watching and that opens up a whole new set of opportunities that you know we thinks

can be critical to taking you know blockchain technologies from what is today a very very very very very small and consumer adoption to more of a mass market adoption that if we if it's just going to be all about the central applications it's I think it's it's a little naive and I think utopian to think the entire world's gonna come to centralise I think there will be both decentralize apps there will be both centralized apps there will be hybrids in between and we see a great opportunity to be kind of a bridge between them cool what Jason can you walk us through an example so let's say now Pippo says okay we gonna we gonna use sample token to create our own token economy and to create a pepper coin like

what would the steps be that they would go through yeah so the simple way to think about simple token is the project consists of three parts so the first is ers each money token which is basically the part of a protocol which is the open st protocol st stands for simple token and the protocol which Ben can espouse more on is basically the process by which a company or an organization or individual would take simple token and stake it against breeding their own branded tokens on my chains in a cryptographically audible manner so that

essentially you power your branded economy with simple token behind it we're good is that more detail so part one is the simple token itself part two is the protocol and then part three is the software package that we're building which is basically think about the SAS software that is enables you to create and manage your token economy and so the process that a company would go through I mean the first thing we look at is even before talking about like the functional process like the like we look at is one benefit of the IC o---- height is that a lot of companies for the wrong reason and started thinking about tokenization because they've spent dollar signs we think you know if they don't have a valid token economy or

reason to have a token economy they should just kind of those guys who just fall away but then you had this like the next set who actually a lot of really interesting companies have done a lot of work over the last months to try to figure out how they could use tokenization to create economic incentives rewards to monetize micro transactions to monetize people giving up their content their data their privacy and all sorts of interesting ways to help take say what today is a you know what should be a two sided marketplace but the one one-sided and trying to kind of fuel on the other side the tokenization and so it would go through all sorts of examples for those guys a lot of them then hitless kind of like this wall where they kind of say oh yeah we would have to then build on this stuff and so

we want them to say ok we'll build on civil too because we'll give you everything you need in order to kind of get from here to there once you took an economy and so essentially when they go through is they basically the starting point is you you stay simple token against creating your own branded token and using our dashboard tools you would basically set a exchange rate a fixed exchange rate between simple token in your branded code so let's say you want to start with 1,000 euro of branded simple token and you want to create 101 exchange rate so you create you know a hundred thousand of your branded token so let's say we call Brian for you and

you then basically have a hundred thousand Brian coin that are basically you know disposal that have been created on the side chain and you can you know then kind of set Affairs transaction types within our dashboard you can say we want to enable you to spend those tokens on say a peer-to-peer transaction where Brian's community doesn't take any transaction fee it's entirely between users maybe it's one user saying if you pay me they can set their own prices for its peers but you could buy my service it could be a instead of transaction that you set up that incentivize users so do you think certain actions inside the application it could be rewards that

they unlocked by taking certain certain xx's much like we've seen in games and other things over the years it could be a b2b transaction it could be for an API call it so basically you set up various transaction types and then basically all the transactions that happen within Brian's community are all on that side chain and so they're all you know kind of they're all kind of reported on the chain but they're not on public aetherium and it's only when say a user of Brian's community wants to either cash out so basically wants to take Brian coin and get 10 euro for what they've earned or when that user wants

to buy more Brian 14 then you need to basically go back out to their and maintenance and either acquire and stake more simple token or a drop a stake token in order to support a cash that scenario and what this enables is basically companies involved to have somewhat of a safe environment to have had their transactions on a blockchain to have it and tie to the actual cryptocurrency without having the legal regulatory risk involved in their own ico token sale without a builder a technology to do it and also creating a safe environment for their users get into stuff like we're working on in terms of possibly do price stabilization we provide price Oracle's

so that's 8 users and price and their Lobo Fiat have it converted and prints of equivalent price and simple to open the branch of and so enabling kind of a safe environment for these two hoping to find their needs to to start to take off and flourish and so what we provide them for them you know it is this suite of tools technology though to manage all this as well so how do you analyze your economy see you know kind of where are things you might see certain places where are people who are certain you start hoarding topia and certain people users are these kind of transactions so you can be working really well you might see certain gaps in your economy where you have a lot less demand than you have supply in certain areas how do you as a

community owner how do you act on that so there's a lot of things just in managing and also managing capital progress in that stuff I can see the value in in the sort of the use case here right so I think the the main thing that we can take away here is that we've got this we've got this platform on which we can build tokens without without all these risks right whether it's legal risk or or the risk and associate to having an IC or even having to do an IC o---- makes that that's a that's sort of a thing in itself and and also as a user you know you you don't have to come into this with any sort of prerequisite knowledge

of crypto currencies or even as a company right you're just sort of onboarding this platform that provides you all all the tools and all the all the things that you need to build your your token economy platform what I'm curious here and maybe been you can address this is uh how the side chains are managed so these these these I guess sort of ecosystems within within simple token how those side chains managed and who Valis it who validates their chains what's the trust model they're I have some sort of questions about how well what what the models they're so we we briefly already talked touched on some

of these points right so um what the trust model really starts from is that it is from the protocol itself so the protocol is built to make sure that the value is protected on a tier iam and then once once it's locked there and it's protected by proof of work validation then then you can get more mobility of the coin so so so one way then that I like to think about it if you would go back a hundred years we would have gold in the vault of the banks and we would have issued this more portable IO use these these cash notes the problem there is that you cannot be

sure that the gold is still in the bank what crypto currencies and block chains allow us to do is to issue these sort of cash loads that are far more usable and and have higher utility but for each note individually you can verify that the gold is sitting in the bank and so that's really the mental model sort of bad that we that we build open st for namely that it's two sides of the same token on top of that there's there's a lot of Technology for proof of stake validation right so it's more efficient but the question is what are you staking and so here we can actually very easily solve that problem because

the value that validators are staking on these utility chains that as the function as sort of worker size as replaceable workers for public key theorem the valued and those validators are sticking is held on on it theorem and so so you actually get sort of the best of both worlds where you have a cryptographic protocol that ensures that that all your value is always recoverable and protected by public key theorem but you get to interact with it more easily cheaper costs and and faster by extending it onto this open periphery of utility chains who those validators then are the mental or the model that

were pursuing right now is that for any given utility chain it would be an assertion of member companies potentially auditors but there would be sort of a large pool of verified players that are both capable of running a reliable service and have non non overlapping interests to be these validators and they'd have to actually stake value to be validating on those chains and if something goes wrong with that process they'd lose the value and the users of the utility chains can walk back to aetherium and prove their holdings and recover those without losing any money so that's really the

sort of the decentralization model of this is an open network of utility chains that that can expand the that we don't also control obviously can add to that but but obviously we'll try to help the first 10 and 10,000 member companies to get that set up kid because it shouldn't be us right so we provide the protocol we maintain a spur ball we provide software but we do not manage the side chains like that needs to be done yeah I mean I think that's one of the points where this is interesting right because I think we see on a high level like what you guys are explaining I think you know it's obvious things are going this direction it's

obvious a lot of companies want to start doing you know integrating tokens and it's it's quite obvious and correct I think as you guys point out they said you know they're not equipped to do that there's all kinds of problems that have to be solved but where I think this gets interesting and sort of hard to wrap your head around is you know where where's the sort of border between a central application in the central application like where does a block should still make sense and we're not and I think one point where that's interesting is is where you guys write about that on those side chains actually those are kind of like managed accounts and and the users generally don't control their own funds throwing seeds and for example that you're not really

able to have like a secondary market on these targets right you know it will just just sell it for somewhere else and and so there's still like all mo you know very much control off the company so why why is a blockchain really needed here so I think a business perspective a couple of things if one is we first looked at you consumer apps we want to we want to walk them towards since we're aspects of your users we kind of want to walk them towards a lot of the challenges that might happen from having a token economy while enabling some of the benefits right so enabling you know some of the benefits of terms so you

know having the openness transparency the immutability of transactions enabling benefits in terms of interoperability across other member companies that are also using the tokens we will talk about a little bit but at the same that could be example and from a business perspective if a consumer app had token that was freely floating and tradable you know that that could cause all sorts of problems of unintentional consequences that needs to be pampered at the beginning I think a lot of folks don't necessarily appreciate right away they just think you know we're gonna do and I see it happen but you know if you're running a consumer app and you let's say your user earns $10 with the

tokens today and then tomorrow it goes to B where 20 or 25 you have all sorts of boarding effects and massive you know cash outs from users or something they're rich and you know and then if you have the other direction let's say it goes from $10 to $2 you know people lose a tire pay at the economy and they just give up and they don't participate more and so so that's just one notion in terms of we wanted to create an environment where there could be some protection around some of these things like price fluctuation that the company could help mitigate within this as part of a service provide to the users so that they build the economy bit by bit

we also found that you know our you know user research it's basic found that today's crypto wallets are a big impediment to consumer adoption that if a consumer is you know just using one application that they don't it's very hard to explain to them cryptokeys the seeds kind of private keys and all that sorts thought that we understand but and you know it's gonna need to educate users and walk them there bit by bit by bit so we looked at how do we kind of create a path for people to you know so for instance you know how do you get to have the user understand that it is based on a cryptocurrency because they're seeing some fluctuations in its

value but not wild swings and then they start to realize it okay if I want to spend this token that I earned this one community on this other community I see that they're both powered by simple token and I can claim my crypto keys then maybe I could or have some way of taking a commission for my crypto keys then I could do that and kind of cut across these networks and so people down the path towards educating consumers around crypto and crypto wallets and then also to support us from our company's debt but I gotta say that it's kind of madness and I think just silly in my mind to even think that the world's going to the markets going to support tens of thousands of different freely floated consumer tokens that the

Latino market for them so I don't think if they would launch all these I SEOs or all these through tokens or even if they let's say they had them token through us but then it was if there was a secondary market for it there would be no demand for it you know and so it's like you know like the far far far OTC kind of stock market but no one's buying and you know that's gonna have massive negative impact on your your economy as well and so we said you don't have these tokens B have a secondary part don't have them floating to start create a safer environment to build trust with users and walk them down the path of understanding crypto and seeing the benefits of being on a blockchain and then we've also imagined though we've imagined though that we can see ourselves not just as an on-ramp for

these companies and to their users but also that you know if they if a company with its simple tokens kind of ecosystem proves a liquidity they prove that they actually have an economic model and there's demand for their tokens and people are buying them people are trading them people are earning them we can also enable you basically its unlock that we put in that Able's there to be no secondary market we basically like you know unlock that and enable them to float their own token but do so it won't say once they've already proven that there's actually a reason for that token to flow and there be demand for it in the market place so it's almost like think about simple token and that model be kind of a on-ramp or an accelerator or incubator for for tokenization projects so there's a couple of things

here that are very good in your question right so obviously all of us are very much of the philosophy your coin your key your coin at the same time we as were actually we're bridging to consumer applications and so we we need to have a better user experience for people who do not know what private keys and how to properly protect it right and and so recently Vlad Vlad Zamfir coined Hart spooning forcefully giving coins to two users and so this is what we're effectively trying to do right I know that that was the cosmos team neck loan debt ok the small common

Jay honestly this key note actually coded blood for that so so that's why I permitted it to blood anyway cosmos Vlad the concept of heart spooning has arisen where how do we forcefully give users crypto keys but then we have a responsibility right we need to give them a good UX and to deal with these scripts or tokens why do we care about decentralization it's for increased resilience right and so in the white paper we talk about manage keys and and I'd say it's good to stand for a moment and elaborate what we actually mean with that because we definitely do not want member companies to be holding the

private keys of the users that would be just a giant liability for any of them member companies they wouldn't have the expertise just as most users don't have expertise of how to manage private keys nor do most member companies have the expertise to manage them and so there are some smart tricks that you can do because you have these two parties where only in the client side of the application you deterministically recover a private key and then you need to be smart on how you can have users reset their password etc and so I think we've solved that we'll be writing a lot more on that maybe by the time actually

this is out then we bridge right that's the whole point we want to make sure that there is a continuous spectrum from from users who do not yet know what crypto tokens are allowing them to start using it without understanding it and then discovering what they are so starting to write down their seat phrase starting to get a standalone wallet really having their own private keys all the way out to public aetherium so so that we can start having the adoption of hundreds of millions of users onto blockchain systems I think that that would the only way that we can really start moving a

space forward here is by having this continuous spectrum of solutions for all users to learn along their own path then we we actually met this weekend this past weekend in in Berlin for the the 1984 summit I just wanna give a shout out to the big chain DB team for that event it was really really fantastic and when when we were talking about GDP our of course this is the general data protection regulation in Europe that comes into effect in May of this year and so GD P R for those are not familiar is a set of regulations that will impose well certain constraints on European businesses or businesses doing business

in Europe on topics of sort of a data Portability personal data right to be forgotten you know consent to you companies using your data in certain ways so companies will have to come out and be quite open and transparent about how they use customer data before a customer engages in some sort of relationship with that company and so the you know companies in Europe are struggling to figure out how they're gonna be compliant with this just in sort of the regular centralized company model right I'm curious and I because I know we talked about this so what are your thoughts about how you know GD P R will affect your business and your customers businesses and have

you found ways to make simple token effectively a GD P are compatible yes so you're right to point out that for most companies this is already a hard problem to solve like how do you get better more informed user consent about their data being processed and then if you take that to blockchain inspired audiences they'll they allow almost all unanimously to the conclusion that these laws are written in a way incompatible with where this technology is going because the whole point of a blockchain is for there to be an immutable record that that forever stays so the most glaring

example is the right to be forgotten how would that ever be be affected on a blockchain right and so here we actually have an interesting solution to look at because we we don't like Jason said right like not all of your business needs to be on a blockchain for most businesses and what does need to be on a blockchain for talking to our value is namely the balances right like how much money does a given user have and then that user is represented by AB pseudo anonymous addresses and so that is a first concern that that we or criteria that we put forward as like will only store balances and pseudo anonymous

addresses on the chain and we have an additional nice feature namely we're doing this form of functional starting right like pública theorem holds the groupid value for the token economy so the total worth of that value is staked and locked on public key theorem and so as the individual transactions do not need to get registered on public a tear because raw material we cannot erase anything but a utility chain that sort of just functions as a as a substrate to to help this economy register and settle it's it's it's it's transactions in a cryptographic we can have a finite lifetime even if it's after a year and a

half or two years that sort of the use the the chains get recycled they they don't need to live on forever whereas public aetherium for as long as it may live and may live long and prosper will carry on and forever right so so even then you you you start having these very interesting possibilities also the implementation of payment channels is much more simple if you have structure of a company handling the receipt so you have the data ability data availability problem much reduced and on top of that we can be even smart on trying to cut

correlations between pseudo anonymous addresses when they're being settled on on the chain so I'm pretty confident that we can actually connect useful user experiences with blockchain technology externalizing the value of the tokens that you hold without exposing and so forcefully cutting at multiple points you're you're possibly personally identifiable information and forever keeping it off these systems and that will be will be very important if you try to resolve the use of blockchain technology with with data protection regulations and and and again the same

way that we want to build a bridge and on board these users we have a big responsibility right like we're addressing trying to get all these millions of users onto blockchain systems we can't just forcefully have them or it's not going to work if we require them to sign away their privacy neither by the GPRA law or they wouldn't sign up for that so we have a responsibility to to make sure that that it doesn't happen that their person a lot personally identifiable information never gets on to the blockchain yeah that does make sense I mean of course there there is a little bit I don't know it for me this sort of feeling like okay yes so you solving this problem in some way but it's also you know it's really

go it's moving so far away from a blockchain that it's it's hard to grasp I mean I don't know if over time a be simple to my challenge you because what do you mean sure and you say it's moving so far away all the value you're interacting with is actually only on it turn right that's the whole point of the protocol so it's it's on the second largest public blockchain how is it moving far away I I really want to just challenge that that sort of question okay great yeah of course so the the part on the human blockchain but it's just the trust model of that of that private blockchain is seems to be it seems to be so closely vetted to the company almost that there's no no no

that's the whole point right like we wouldn't be building a bridge if it wouldn't be cryptographically audible all the way back to a term and if any user couldn't at any point without permission of either the company or anyone else hard exit back to it here and walk away with this value or if any of those utility change could on whole thing not exit fully onto it then we wouldn't be doing this if this wouldn't be cryptographically verified the whole way yeah you would have a point but I don't think you have a point it's all value is only on it theorem we're just making it efficient so so so throwing these words of like moving away from blockchain technology to me don't really mean something because you can either say like this is the limits of the

technology we have or you can try to use the technology and the core principles that we also hold and share and and try to make them more usable for more people and so yeah that would be my my challenge yeah I mean is we didn't speak about it so much right but you guys have this concept of a standalone wallet right basically where they call the person kind of runs their own mmm I guess it's kind of comparable to a cryptocurrency wallet and I now see how dare you have some some assurance right because you guess locally have these proofs and you can then take them but if you have the kind of normal quote-unquote normal user case where somebody just uses the company's application then well actually can't

read you anything right because you did those proofs that you may be able to take to like unlock the points on the adhere maintained like you don't have access to them right because you could only get them through the application that the company itself is running do you do I'm a missing something here the the proofs to exit you can reach yourself extract from from the chains and the chains are open and you can verify them yourself so so you could do that if if the company doesn't operate or cooperate yeah no I mean that's that is a fair point I guess to the extent that ya the blockchain is audible and and I guess if you can identify the transactions that belong to you how do you do that is

there some kind of seeds that you but then you'd still be as usually need some kind of seed to back up not to see you yeah yeah so I mean but but here's the point right like even if you start out with them what we call the managed Keys the company cannot move your tokens without you being logged in and actually on your client-side interacting with the application right so so even then like there's there's you on your client-side signing the transactions it's true that as a user you're not aware that you have a private key and so storing that private key just randomly in the browser

would be a bigger security risk than then having it only deterministically generated when you're logged in so so we unless the user realizes it and and makes the action of getting a standalone wallet there's nowhere for that private key to go on the user side right so so there's there's a lot of things we can do but there's no magic involved and until that user realizes that that he needs to get a standalone wallet to further up his his ownership of those private keys he we can't do anything by storing them on any cookies or something I think that would be worse yeah thanks

so much pain so let's let's move to some maybe it's just a few high-level questions again so Jason where do you see this company in ten years like what do you want to look like yeah so you know we look at it so there's there's there's two sides of the project standpoint there's two distinct parts of the project on the one hand there's the open St Foundation which is a and it's an independent run foundation it will have five directors or members of foundation of which myself and Nishat who are running the company can only have a maximum two seats on that board so the other three board members can always have photos of

anything and as opposed to and we've seen a lot of projects out there where it seems like this split between Foundation and company gets more facade and there's really some pass-through we've really set this up with kind of good governance that they you know the company shall receive support from the foundation to the extent that it's beneficial for the foundation and so the foundation is responsible for basically shepherding of the protocol and so to continue to make the point the openness tea protocol valuable if you do pants on it and get work developers to proving it and to to you know kind of continue to expand on this with it's like you know

it's a starting point on a protocol it's not the end and then also to continue to basically ensure that the the SG the simple token economy the St economy is being managed well and so that's been looking at you know what is the demand for st are there good projects they're being built on ste promoting uses of st and it's that's kind of the purpose of michigan foundation so we say like at the very high level and the mission of foundation is to you know to work with developers to help adopt sumer mainstream adoption of botching ecology but how is through the initiatives of st and so that the token in the protocol

from the company standpoint so the company is you know suppose open companies in the independent company it is selling a software package services that are designed to you know help companies with that on-ramp without managing of their token economies and you know we think with one that's great about this project is that incentives are aligned in terms of the software company is heavily dependent on the foundation and build a successful business that is based on the foundation and the foundation this the early days is dependent on the company support in

terms of business development sales marketing PR and software development in terms of you know building software on top of the protocol and that kind of helps more companies embrace st I should point out that you know while simple token company will be the first company developing on st that the foundation endeavors to have many many developers doing as well and so you know one way you could think about it is a linux right now where the foundation is like running you know let's say our equipment Linux and Red Hat is one example of a software company it's been built on kind of promoting in kind of developing tools and services

and software works for Linux does that exact analogy with so much closed that's the foundation of our time to be looking to have more companies that are building application software services like for st but because of our goals with this product is you know look we want it we want to build and we want to help me the consumer on-ramp to you know blockchain technology is interpretation health you know be the service provider the technology provider that you know starting with you know a few dozen to then a few hundred to a few thousand to tens of thousands of applications

developers rely on for their enging their token economies and you know I think our role models and that is whether you look at a company like strike which did something similar in the payment space company Twilio which is something similar patience pace it's b2b service providers who took something that's otherwise very complex and hard for most app developers the to but it could have a very big impact on our applications and in our case it's you know the economy behind an application that we can help and so that's like what we want to to be able to help support and provide and then also think maybe like much bigger goals in terms of you

know if we can be one of the guys out there about the mainstream adoption currency that's good the entire community and we one of the guys out there who's you know making kind of the impetus behind more developers getting closer and closer and closer to learning watching technology and even if they start off with a little bit a little bit a little bit more that we go from you know I think the last number I saw was that maybe there's about 13,000 art or watching developers around the world right now so how do you go to millions of watching developers or developers to understand blockchain and so yeah so we're in the how do we build a bridge company right how build a

bridge between blockchain and cryptocurrencies to mainstream adoption cool well thanks so much for for explaining this vision and coming on today so so we're gonna have a we didn't talk so much today about but are you gonna link to it in the show notes so people should check out their website and resource in the show notes is is that they have a simple token has a token sale coming up which I think when is the token sale happening yeah so we are right now in presale for the token sale and we will be allowing early registration November the first and you must register which me remember first if ever 10th in order to purchase on day one of the token sale and day one until

the seventh house scheduled for November the 14th and so only people who pre-register and good routine why caml checks pass those checks we had a purchase on day one and you know the purpose of our token sale is you know we we need to create the St create the simple token to fuel this this ecosystem that you can't you need the st in order to stake it it's creating these branded tokens otherwise this utility this software doesn't work so it's critical and then also very importantly it's part of me that on ramp we want to you know critical part of our token sale is we're reserving 30% of the token supply what we call our network accelerator program

which a beast anyway think about it is the seed fairly interesting projects where there's developers who had neither thought through a economic model for their there where there their app or they'd like some help thinking went through but they seemed like a pretty good use case and then we can basically use some of the tokens from the token generation event towards helping see these projects and help them get awkward on the symbol token and launch the festival type of comments based on simple token so yes November 14th were really excited for it but to be you know as someone who's raised a lot of money before the purposes this is not a fundraising purpose this is building it down for the community and I really would hope that

everyone who's considering a truck that's you know really thinks through you know what's what are you doing this for it for us you know we we can't have some token without having st and we can't have a network accelerator to program without creating an endowment and those two things are coming together for the tub itself cool excellent yeah so we're gonna link of course territory so this you guys have some nice white papers technical white paper presentations and and quite quite a bit of comprehensive resources so people could check that out so yeah Jason and Ben thanks so much for joining us today thank you so much appreciate it thank you so much - appreciate it very much okay well thanks so much for listening for once again tuning in so we are you

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