 This is Think Tech Hawaii, Community Matters here. Hello, how are you doing? Gordo the Texar here. Welcome to another exciting and thrilling episode of Ibachi Talk. Pull up a chair, grab a live and join us. We're going to talk with Aaron Nakaoka. How are you doing, Aaron? Nice to see you, bud. Aaron is a local, I call you an IT entrepreneur in town. You own two or three businesses the last time I checked. President Trinet Solutions, Aloha Tone and Nimble. And you've got some experience in the cryptocurrency world, which is what we're going to talk about today. First, give me a little background on yourself so our viewers know who you are and where you grew up and how you got where you are today. I graduated from Hawaii Baptist Academy in the late 90s. I went to UOP for college, measured in business, came home, worked for the family telecom business for a while. In 2001, started Trinet Solutions as a ISP. 2005, started Aloha Tone as a VoIP provider. In 2011, we took over Lavinet and still run Lavinet today. And then in 2015, we started a computer support company called Nimble Solutions. So we've slowly been growing into different services that customers need. Right, and you've really taken on the small, medium-sized business as a client base. Which is 98% of Hawaii. I know, 27,000 small businesses in Hawaii. That's a great market to go after. And I truly believe it's a space to be. So anyway, you've been involved in cryptocurrencies. I've done a couple of shows trying to explain how the blockchain works and so on. And a lot of people are following up on Bitcoin now because it's been in the news and so on. So how's your investments going? Without giving numbers, recently it went really well. But it's a long-term game to see if the technology will actually do something in the real world. I mean it's fun right now buying, I have some crypto-kitties. We're doing a lot of fun things with it. But to see where it goes long-term and really if it does change banking or if it changes the world, then that's really where the bet is right now. The technology, the blockchain, the underlying technology that makes this work with the distributed ledger inside. Looking at Bitcoin in the past month, what it's done, it's been up almost $18,000 last week. It's $16,000, something like that today. Ethereum is up, Ripple is up. I'll call them the market cap leaders have been having a pretty good run of late. So what are your thoughts on that? Again, like you said, does this have legs? And we're not investment advisors. I think if you look at it, a lot of it has to do with just from the beginning of this year, March or April, not many people were in it and that increased the price. But after Thanksgiving with all the family dinners and all that and everyone jumping in, the Coinbase, that's going to make it go crazy. And we're only still at 1% of the population doing it. So if 3% get there, it's just going to snowball. Yeah, it was amazing. 300,000 new accounts at Coinbase on the Monday after Thanksgiving. So like you said, sitting around the dinner and all of that. The dinner table conversations, right? Conversation and everybody jumps in it. It would be interesting to find out how many people are in the stock market. Like what percentage of the population are in the stock market. I think Morgan Stanley, I think Coinbase now has more members than Morgan Stanley. So it's an interesting thing. Now, no members from Hawaii, as we know, because our illustrious government officials know how to protect us from ourselves and don't allow them to do business here. We have a petition though. Yes. If everyone can sign the petition to allow Coinbase to operate as a bank under the same banking rules as the regular banks, then we could get Coinbase in Hawaii. Right. Which they were willing to do. They actually were one of the exchanges that came forward, applied for their necessary documents here. And the state put this onerous set of rules on them. Like you have to keep 100% P at money. Which is impossible. Which is impossible. And the banks don't have to do it. Right. So that just drove me insane. And as you know, we all moved our cryptocurrencies elsewhere. Right. And such. I mean, I want to bring in a Bitcoin ATM, but I'm not going to comply with those rules. So why would I bring it in? Right. They're just too onerous. So now the state loses the tax revenue on that. And the growth of development and other businesses. And all the stuff that go by. I know. It's just insane. So as we know, mining is the typical way of authenticating transactions in the cryptocurrency world. But you and I can't mine anymore. Well, we can't mine the big valuable coins right now. We could mine smaller coins. Right. And the two schools of thought are proof of stake and proof of work. So mining is proof of work. Right. I put up a bunch of computers that solve a math problem or create a math problem to inject that block into the blockchain. Proof of stake doesn't require the amount of work, but it does require you to fund and say like, if I make a mistake or if I inject something wrong into the blockchain, you can take my funds. Right. Right. As a network. Proof of stake is something that I personally liked because it didn't require a lot of CPU power. Right. And we could get into it for, well, depending on what coin you looked at, you could get into it for a very little amount. Right. So if you look at, so we'll go back to proof of work, which is the mining. And if you go to China, Russia, the big players have got big computer centers that are mining these coins. Right. And you and I can't get in there and compete with those. Yeah. We could put up something, but it would probably be not worth our time. Plus we pay 32 cents a kilowatt hour for electricity. Electricity. Right. I mean, somewhere like Iceland doesn't pay for electricity or pays very little. Right. And that's why China put it, there's in the border of Mongolia. Right. Because the electricity costs were so low. So that's proof of work. Now we go into the master node concept, which is proof of stake. Proof of stake. Proof of stake. I just lost it. So proof of stake where you and I can stand up our own computer. Right. Our own node. Our own node. And then what we do is we fund the node. And the best part is the coins or the money doesn't actually leave my wallet. Right. Because of this, because this is a trustless network, I can say I have 15,000 mementic coins in my wallet and the network can confirm that. Right. Because the network confirms that my node can do transactions and insert information into the blockchain. And because of that, it gets a reward of a small percentage of every transaction. Right. So right now the reward for let's say mementic masternodes is a coin. Right. Because known as Pepe coin, but the reward is anywhere from like 60 to 80% depending on the day. And that reward is when you authenticate proof of stake, the transactions that happen as other individuals are trading these coins. Correct. So as people are buying and selling, we create a block or our server creates a block, puts it into the blockchain and if ever it's found to be that block is incorrect or malicious, they will take our wallet. Right. And you lose whatever. Right. So in this scenario, we lose 15,000 coins. Coins. And whatever their value is at that point in time, it's gone. It's gone. So if a Pepe coin is worth a dollar. Right. You lose 15,000 dollars. You lose 15,000 dollars. And you get to start all over again. Yeah. I mean, you know, there's no, because it's a trustless, they don't know who you are. Right. Start another server. And a lot of this is the best part is you don't have to have even hardware. Right. So all of our servers are on either our cloud or someone else's cloud. Right. As a very inexpensive virtual private server. And it's running the software and the coins are yet on my desktop or in my hardware wallet or wherever. Or it could be in your wallet, your mobile wallet. You could use Amazon Web Services to send this up or any number of those types of providers. So this is an interesting concept to think about it, right? So now I have the ability to stand up a system that will have thought authenticate transactions that goes through the master node proof of stake process. Can't do it for Bitcoin. They are proof of work. They're purely proof of work until, you know, the next 100 something years. And then at that point, they will be tip based only. Right. Right. So whatever you pay for your transaction to be entered into the blockchain will be what the miners are going to be working for. Right. Right. So it's almost like a proof of stake, but it's, you know, there's no penalty if they inject something different. Right. The only way to prove that you're not putting in bad information is that the next chain is longer and that the world is doing more than you. Right. And that has to get authenticated after that. And that creates another transaction that gets injected into the blockchain. So so much fun in this space. So we've seen them, the Bitcoin, Ethereum, Bitcoin Cash, one that's pretty popular now and getting some good legs is Dash and it's been around for a while, but that's proof of stake. Right. And so that's just the very first proof of stake coin. So the master note at the time was a thousand bucks or something ridiculous to get a master note today. You need to have $800,000 USD to buy enough coins to put it into your master note and run it. Right. Right. But it does pay you back 5%. So if you have $800,000, whatever 5%, I'm not going to get that. Right. Yeah. Well, 10 to $80,000, so $40,000. Yeah. Right. So $50,000. But who's got sitting around on $800,000 to buy into the Dash master note complex? Correct. Right. Unless you form a Huey and you get your 5% of whatever you put in, but what bank account is giving you 5%? Right. So there's no savings account, no checking account that will give you 5%. And it's also appreciating. So of course, the guy that bought the master note at a thousand bucks and is now sitting on $799,000 of profit is happy. Yeah. And so we'll look at, and since we're talking about Dash, Dash right now is trading at $886 bucks. It's gone up 24% in seven days. So you're making 5% on return. That 5% is also growing. It's also growing or losing depending on what happens. Yeah. It could all go to zero. It could all go to zero tomorrow. I can't see how, but I'll always say, and we're going to talk about it in the second half, how can I turn this into real cash or how can I buy things with it? You know that we can with Bitcoin because I can convert Bitcoin to gift cards for now. Until it goes to zero too. Yeah, who knows? And then I saw McDonald's announced they're going to take Bitcoin starting next year. But who wants to use a Bitcoin right now when it's trading at $169,000? Right. Yeah, use a portion of it obviously, but at $16,900 it could go to $50,000. That Big Mac could have cost you a lot of money. Unless, right, I mean, if you're going to use it transactionally, you don't want something to be skyrocketing. Okay. Yeah. Don't want it to be. Okay. So what we're going to do, we're going to take a short break. We're going to come back and talk about how you created your masternode. And then we'll talk about how we perceive we can move those crypto currencies into fiat dollars. And we think we've worked out some ways to do that. Anyway, this is Gordel the Tech Sauer. I've got Aaron Nackel here. We're talking about cryptocurrencies. One of my favorite subjects will be back in about a minute. This is Think Tech Hawaii, raising public awareness. Match Day is no ordinary day. The pitch, hallowed ground for players and supporters alike. Excitement builds, game plans are made with responsibility in mind, celebrations are underway. Ready for kickoff, MLS clubs and our supporters rise to the challenge. We make responsible decisions while we cheer on our heroes and toast their success. Your Match Day experience. If you drink, never drive. We'll dig into science, dig into the beauty of science, dig into the joy and delight of science. We'll discover why science is indeed fun, why science is interesting, why people should care about science, and care about the research that's being done out there. It's all great, it's all entertaining, it's all educational, so I hope you'll join me for likeable science. Never know what's going to actually stay. Yeah. Aloha. Gordel the Tech Sauer here. Welcome to Ibachi Talk. I'm Michael Oka, president of many companies here in town, and we're talking about cryptocurrencies, and we're going to talk about masternodes, so we're going to take it to the next level. So we talked about proof of work for mining, we're talking about proof of stake for masternodes, okay? So you got into the masternode, I'll call it business win. We started our first masternode April. April, so April or May you started a masternode with a number of your partners, and I got invited to one of your events last week to see what you guys are all doing. But how do you do it? I mean, why do you want to start proving these transactions? The true why is like any other asset, there's money to be made in buying and selling it and trading it, or there's money to be made in cultivating it. I'm a horrible trader. Everyone knows that I'm too emotional, I'll react quickly. So I buy things how I sell them low, which is horrible. What the masternode allowed me to do is make a return that was more than my money sitting in the bank. Five percent. Three, two. Right, and I wanted to look for coins that were high volume, decent market cap, and that we knew the developer. So just word of mouth, Pepe was our first, well actually exclusive was our first one. We made two of those. The ROI is good, it's not crypto good. So it's like volatility in the stock market, it's not crypto good. There's not enough, there's just not crazy swings. So the Pepe, or what they've changed their name to Mementek now, was anywhere from 80 to 60 percent, and I think it's going to come down as more masternodes joined the network because there's more people doing the work. So the returns are going to drop. Right, which is fine because then the network becomes more stable. So there are write ups, and again, a lot of this is word of mouth, a lot of this is bootstrapping, a lot of forums. It's all new stuff. Right, it's all new stuff, so there's no manual for it. People have written blogs on how to do it, and as software is evolving, it's evolving so quickly, the blog is no longer applicable. So I'm going to throw this thing at you because we're thinking out loud now, but I gave this asking question, well, is this legal? Well, the question is, is it illegal? I mean, how can it be illegal? It's not gambling. I make it similar to buying magic cards, right? Or trading. Pogs, remember Pogs years ago? So I mean that got out of hand. Or beanie babies. Beanie babies have value or even breaking, right? If you go to the card stores, you can break a box, throw the whole box away just for one card and sell the card back, right? So that's more gambling than this is. This is really, truly investment in a technology. The knowledge base to create a master node, you need to know Linux, right? You need to know, and most of the master nodes are based on Ubuntu, I think just because it's the most stable and well-known, they went that route. Right. Why don't you say stable? It's the most well-known. It's the most well-known. It's open source. It's $3.99. So all of this is open source, right? So all we do is we go to a virtual service provider or a virtual server provider, we buy a virtual server for five to 10 bucks, we throw some software on there, we load up our wallet, and we link it, and then you start making 5%. You start making 5%. My goal was to stabilize the network for Pepe, especially, or I should call it mementech, and create as many master nodes as I personally could, right? But that comes with the cost, right? And as the cost of the mementech goes up, so does my cost, right? So like the internet or like any other thinking that we do, we wanted to scale it globally, right? So the barrier to entry into getting a master node is Linux knowledge, right? You've got to know that. Because everyone could have cash, right? So you can buy in to one that already exists. If you can find someone to sell you one. Yeah, who will sell you into a master node. Right, someone could create a business model where I'm making 30%, I'll sell you 15% for 20%, right? Yeah, you can buy so many tokens or be part, like Dash, I think you said $800,000 to buy into the master node. So the reason why I've never sold interest in my master nodes is because then I don't know if I become a broker in Hawaii and they come after me. Yeah, now we're all stepping on these other territories, right? So globally what we've done is we've released software that will build you a master node with no Linux knowledge. Yeah, I saw that. So all you have to do is click a button, you get a master node, you go to the website, you fill in your private key because there is still the linking of the wallet to the master node and you're in business. That's it. Now what wallet now do you use a particular wallet? So you use the wallet for that coin. For that coin. So the PEP, you know, the Mementek has its wallet. Zencash has its wallet, Mementek has its wallet, Exclusive has its wallet. And so what I do is I house my wallets on virtual desktops that are only dedicated to that wallet. You don't want to be putting it on the stuff that you're taking with you. Right, so I mean, in case I'm, let's say I get a virus someday, I don't want my computer to crash. So I actually put it on, well, so I have a wallet on Nimble Cloud and I have a wallet on Paperspace. I can take snapshots daily of my whole computer. So even if it were to get a virus or crypto locked or whatever, which would be ironic. Yeah. I can go back to a restored date. Right, and at least get back to where you were. Right. And so what we also, like our code or our script runs on any virtual provider. As long as you can throw up an Ubuntu box. Right. Not even a virtual provider. You could run it on your desktop at home. What about a Chrome stick? What about, as long as it can run Ubuntu. Yeah, so an Intel, an Intel, an Intel stick, which is a PC and a stick, as long as I can run Ubuntu on that particular device, I could have a master node. I could turn that into a master node. And it hardly uses any electricity. You want a static IP address. You want a public static IP address. Right, which you got to pay for, because. Yeah, for if you're a residential, you're going to have to move to a business. To a business account. Which is why, just for the cost of a static IP address in Hawaii, you can get a virtual provider, whole server with the static IP address in the main map. For the same one. So I could go to any one of those third party providers and stand up there and not worry about static IP paying for it. Right. And all of those kinds of things. Right, so we posted the code on CryptoHawaii.com. And all they have to do is click a button. They get the node set up for them on the Linux back end. Right. They link the wallet. They fund their wallet and link it. And they're making 5%. And that's it. So what's that cost me to do that? Nothing. Tree. There's nothing. Right, so I want people to do it because it helps stabilize the network. I'll call it the mining network, but the proof of stake network. Correct. It creates stability within Mementek or Pippicoin, whatever we want to call it. So it also generates percentage back for them. Right, and the more people that get involved in that, the more authenticity it gives to the coins. Now these are not initial coin offerings. We're not going to get into that. This is just a different way. OK, so here I am. I'm sitting on $1,000. $1,000, well, an equivalent of $1,000 in whatever particular coin it is. And I want to get it to US cash. Now, how would we go about doing that? So in your wallet, you're going to stake your wallet for 15,000 Mementek coins. So the 15,000 Mementek coins have ranged in this last year from $0.06 to $1.30. And you can look at the graphs. And again, we're not making financial decisions for you. But in your wallet, you'll have 15,000 coins. Every three hours or so, you'll get five more coins. From your wallet, you have to make sure that original 15,000 doesn't get touched. But you can transfer out of your wallet every month, every day, whatever term you want into an exchange. That exchange, you can then use to buy either a more common currency, which with Bitcoin, Litecoin, Ethereum, which then you can transfer to, well, hopefully Coinbase someday, or another like Kraken. And you can then transfer that to your bank account. So let's go back and walk through that. So that is one way of taking these coins. And these coins get their value based on the people that are willing to buy in, like they would buying Pogs or beanie babies, and then hoping that that would increase in value and they'd sell those back. Right. And there's also applications that are built on Mementek that will prove that I own a meme. That's the whole point of why it was built. But in the near future, Mementek will be traded on an exchange directly to the Korean won. Because we have to think, this is not a US only thing. Yeah, it's a form of currency. It's a global issue, right? So Mementek will be traded directly to Korean won soon. So from your wallet, you would dump it to your exchange and boom, you're in Korean won. So hopefully Kraken or Coinbase, again, eventually if Mementek gets big enough, Coinbase will take it on. And hopefully if Coinbase gets big enough, Hawaii will allow it. Then from my wallet, I transfer to Coinbase. Coinbase, boom, I have USD. Right, and you got USD. But we also have relatives that live on the mainland. So I can, a trusted relative, have them open up an account and I can just transfer coins to them. And they, in turn, can go to Coinbase. And so like Kraken, because Kraken filed in Hawaii as a stock broker, they're allowed, right? Coinbase came in as a bank, so that's where they got them. So you get your Pipe 2 or your Mementek 2 Kraken by LTC. Send your LTC to your Litecoin, you can sell your Litecoin on Kraken and then Kraken can dump it into your first wine bank account. Right, and the way it goes. Yeah, and there's other exchanges that I use that I can turn around and Dash, one of the exchanges I use, Dash just got recognized by that exchange. So now that Dash is recognized by that exchange, I can take those Dash coins that I have, trade them for cash and move them right into my bank account here in Hawaii. Right, so that's the full circle. The hardest part is getting from a Hawaii bank account into Kraken, because Kraken is so overloaded right now. So you use Ubit, Gemini, all those other exchanges. Right, uphold. And then you got to find an exchange that sells the masternode coins to create the masternode. To create the masternode. But if you hop through those poops, you'll get an ROI that you're not gonna get anywhere else. Yeah, you're not gonna get anywhere else. So anyway, we've actually burned through the whole show and so in this very short period of time. So we tried to make it so that you can understand what we're talking about here, the cryptocurrencies and the mining like the Bitcoins. Now there's a spin-off of that. Well, I'll call it a spin-off, which is a new way of looking at proofs of stake, which is the masternodes, the concepts there. We're not providing any financial advice, we're just telling you how the world is changing because of this blockchain technology, which I equate to when the Netscape browser first came out. Netscape browser first came out in the internet, then next you know, Microsoft came in with theirs and all different flavors and Firefox and Dolphin and all these different browsers just grew up over the time. Tor, as you wanna get deeper into those other black side of the web. So this to me is just another evolving of what's going on in this particularly fun industry. I'm planning to do this about once a month now or so we're gonna do updates on cryptocurrencies because I'm getting a lot of calls on it. So I think we'll continue to do that. But Aaron, thanks a lot. Hope you understand what we're kind of going through here and make sure you look at my previous episodes where I talk about blockchain and how it works. I didn't give you the heads up on this but at the end of every show I have a tagline that's called how you're doing. So anyway, like we say at the end of every show, one, two, three, how you doing? How you doing?