 Hello everyone, welcome to a special CUBE conversation here in the Palo Alto studios for theCUBE. I'm John Furrier, the founder of SiliconANGLE Media theCUBE and co-host theCUBE, my next guest is Adrian Scott, who is the CEO of SOMA Capital, the head of technology of decent.bet. You can get the idea of what that's going to be all about, but industry legend, star, big screen, good to see you. Thanks for coming in. Thank you, John, it's great to see you. I'm glad I wanted to talk to you because I know you've been doing a lot of traveling, you've been living in Panama and overseas outside the US, mainly around the work you've been doing on the crypto side, obviously blockchain and with the start of decent.bet, a lot of great stuff. If congratulations on a successful initial coin offering. Thank you. Great stuff, but also notable in the industry and an investor in Napster, our generation, first P2P, the first renegade, break down the movie business, but the beginning of what we're now seeing as that decentralized revolution, but you've seen many ways of innovation. You've seen them come and go, but this one in particular, blockchain, decentralized internet, decentralized applications, crypto, pretty awesome. And a lot of young guns are coming in, a lot of older experienced alpha entrepreneurs are coming in like yourself and we're looking at it too. What's your take on it? I mean, how do you talk to people that are like, well, hey, this is just a scam on the ICO side. Is this real? Is it a bubble? Share your vision on what this is all about, this whole mega trend, crypto, decentralized. And I'll also add in addition to what you mentioned, the other neat thing here is just the global nature of it because we're so used to being Silicon Valley centric and having to dig around for funding here and also looking only at talent that would move here. Whereas with this whole new industry, it's very global. There's global teams, international teams and some of the Silicon Valley folks are just struggling to stay relevant and stay in the game. But so that's a fascinating aspect to this new revolution as well. Yeah, and also the thing about it, I love about this market, it's very efficient. It takes away inefficiencies, adventure capital right now and private equity are being disrupted. That's where the arbitrage is, hence the ICO bubble. But there is real legit opportunities. You have SOMA capital, you're an investment fund that you're doing token investments on. The global nature is interesting. I want to just ask you about this because my view is it changes valuation, it changes valuation mechanisms, it changes the makeup of the venture architecture. It makes up how people recruit teams, the technology used and with open source. I mean, this is a first time view at a new landscape. You can't take a pattern match model to this. Your thoughts? I agree completely. And the efficiency you mentioned applied to teams and surfacing engineering talent and the mathematical minds that can handle crypto internationally. The formation of teams internationally online is actually something special as well. So with Decent Bet, our founding team includes folks from the US, Panama, Australia as well, who met up in a Facebook chat group. And that's how they initially connected and they didn't know each other physically before this connection online. And that led to this project, Decent Bet, and ICO and so on. So it's- You created value from essentially a digital workforce. But I mean, it reminds me of like in the old days you'd chat and there wasn't a lot of face to face, but then now there's video gaming culture. You come in, hey, you want to play a game, people don't even know each other and get a visual and also an immersive experience with each other. This is now the application for entrepreneurial equations. So this is kind of gaming, the game is startups. So how are you looking at this and how are you investing in it? What are some of the things and what can people learn from what we're seeing in this new gamified, if you will, world of starting companies? Well, I think one of the things you alluded to there is really become visible, which is the importance of video as a medium. And I'm still absorbing and adjusting to that myself. For example, we do video communications, we do conversations at decent bet of the founding team and it really connects to the community and it's so important. And I'm still absorbing it, like I mentioned, because I'm just so used to publishing articles that are very clearly written in detail and so on. We just did an AMA video and ask me anything video in Las Vegas with the executive team and it went for 80 minutes answering the questions that the community had all submitted. And I just try and imagine that five years ago, it's a new way of relating and connecting. There was no blogging, link back for the only thing you can do, a blogging. And then write a perfect blog post or a white paper. And that was who you were. Not anymore, it's more community driven. Exactly, and that video as a piece of it has become so important as a way of communicating the character of the team. Before we get into decent dot bet, I wanted to drill down. I think it's a great use case. And again, it graduates on great work there. I want to ask you about something that I've been fascinated with because obviously our generation, we grew up on open source when it was second class this and now it runs the whole world as first tier, first class citizen in the software world. The role of the community was really important in software development is that kept a balance. It kept those governance, those consensus. These are words that you hear in the crypto world. And now whether it's content and or ICO, the role of the community and certainly areas it's out of control in the ICO side, people are cracking down on it certainly. Like you see Facebook and Twitter trying to do something but you can't stop the wisdom of the crowd. The role of the community in this crypto decentralized market, ICOs and whatnot is super important. Can you share your thoughts and color commentary on why the community is so important? How do you deal with it? Any best practice either through scar tissue or successes, share your thoughts on this. It's totally become a factor and it's 24-7, right? So when you are running a crypto project you need your community management team to be there in the community channels 24-7. You need to have somebody there and they need to be at a certain level that they can handle the challenging questions. And we've definitely had moments where we wonder, we have people who try to create FUD potentially and bring up stuff and bring it up again later and whatnot and we need to be proactive. So when questions come up, we're there to be able to explain, okay, here's where you can see this on the blockchain. You can verify it yourself. And sometimes it happens when the team is just about to get on a plane and be out of internet communication for a while. So it's a real challenge and there's being the voice of experience. So talk about how you guys connect because obviously being connected is important for the community access but also with connection increases the service area for hacks and you guys carry in five burner phones each book, how you handle email. How have you guys dealt with the whole, there is a lot of online activity, certainly people trying to do some spear fishing or whatever tactics there are. Telegram has been littered with a lot of spoofing and whatnot. So all this is going on. You've got to have access communication but there's a safety component that could have really big impacts to these businesses that aren't tokens because hacking can be easy if you don't protect yourself. We really like Signal app as a communications medium. There's a new one starting to grow now called Threema which is pretty interesting. Telegram is just a real challenge and it's unfortunate because it's now become this metric. That investors like to look at the size of the Telegram group we don't actually have a Telegram group for Decent Bet and we've used Slack. We are going to be rolling out a internally hosted Slack replacement soon based on Rocket Chat. We really like Rocket Chat. As you mentioned, there are spear fishing. We do see that and one of the nice things is a few years ago you had trouble convincing a team to take security seriously. But when you have team members who may have lost $10,000 in a hack or more, there's no question that this needs to be a priority and everybody buys in on it. So that is one net positive out of this. Let's talk about Decent Bet. A fascinating use case. It's in the gaming area, gaming as in like betting. My friend Paul Martino invested I think in DraftKings, one of those other companies, I figured which one it was. In the US it was regulatory issues outside of the US where I think you guys are, there's not as much issues. Perfect use case for tokens in my opinion. So take a minute to explain Decent Bet, what you guys are all about and talk about the journey of conception when you guys conceived it to ICO. Yeah. Decent Bet was founded about a year ago by the CEO, Jetta Daya Taylor, who developed an interesting idea and plan. So the neat thing about Decent Bet is first of all, you have all the benefits of the Ethereum blockchain in terms of verifying transactions, verifying the houses take. Additionally, what Decent Bet does is distributes all the profits of the casino back to the token holders. 95% goes as proportionally and then 5% is awarded in a lottery. So there's no profit for any Decent Bet entity. It all goes back to the token holders. So you use the token to play by gambling but you can also use the token to convert into house shares for a quarter and participate in that. So the house always wins. That's a good model, right? Yes. So you can become the house through the tokens. Exactly. So the model we use is our house is your house. Don't bet against the house. All right, so talk about the, so I love the gambling aspect of it. I think that's going to be a winner. Tech-involved, ICO process, bumps, learnings, things you could share with folks. Yeah, so on the technology, one of the neat things we are doing is we do offer a slots game, which is a primary component of online gambling and casinos, a pretty dominant piece of the action. But if you are going to do a simple slots game on the blockchain and wait around for blocks to be mined, you're not going to have a great experience because you're going to be waiting around more than you're going to be clicking that button. So what we use is a technology called state channels, which allows us to do a session, kind of on a side channel, so to speak. And through the state channel, at the end of the session, you post back the results. So you get the verifiability of the blockchain, but without the delay. So that's a major difference. That's off-chain, right? Yeah, it's kind of- It's off-chain. Yeah, it's kind of- You're managing the latency of the chain so you still experience and then get to preserve it on the chain. Exactly, yeah. In terms of the ICO experience, we initiated the ICO end of September, ran for a month, raised more than 52,000 ether. So very productive ICO process, but with actually some interesting details. So the ICO structure limited the amount that a particular address could purchase in the first phases to $10,000 worth and then $20,000 worth with the idea of getting the tokens into the hand of people are going to potentially use them for bedding, not just- More the merrier for you. Yeah. No one taking down allocations, big players. Exactly, not just for the whales take all kind of things. So that was an interesting structure and different difference. And that worked well. Yeah. All right, talk about the dynamic of post-ICO. Because now you guys are building, can you give an update on the state of where you guys are at with the product, availability, how that's going? Because obviously you raised the capital through the ICO, democratize it if you will through clever mechanism, which is cool. Thanks for sharing that. Now what happens? Now what's going on? Yeah, I mean, I think we're doing pretty well in terms of hitting milestones and showing progress compared to a lot of projects. We released our test net with slots and then sports book at the beginning of January and mid-January for sports book. And we also did some upgrades with our wallet. We released that for some enhanced usability and handling during high peaks on the ether network, Ethereum network. And then also our moving to main net. So we did some newer versions of the test net. What's the main net coming? Main net is coming out end of April. And we're on track with that. Great, awesome. Congratulations. Congratulations, great job. 52,000 ether, great raise there. An awesome opportunity. SOMA Capital, you're investing now. What do you look for for deals? There's more money chasing good deals now. As we can see, there's been a flight to quality obviously. Great global landscape still. What are you looking for? And advice to folks who are looking to do a token sale? Big thing, we look for our real projects. So, and there are not that many out there. So we do look for a real use case that makes sense because there's a lot of folks out there just sticking blockchain tag on to anything. So it, and it's not just- Like Kodak for instance. Yeah. Kodak's the prime example. Yes. So there are projects out there doing interesting things. Guardium is doing some neat things in terms of 911 response and opening that up and creating an alternative to government services. There's work coin, which is- Did you invest in Guardium? Yeah. Yeah, in Guardium. Yeah, in Puerto Rico. Okay, great. Great project. So very interesting. I was recently giving a talk at university in Guatemala and the students there at business school really resonated, it really resonated the message there to them about, okay, government 911 is maybe not the ultimate solution for getting help when you need it. Well, I think there's a lot of this AI for good concept going to blockchain for good because you're seeing a lot of these easy low hanging fruit applications around these old structural institutions. Yes. And that's where the action is, right? I mean, do you rate? Yes. And the other thing we're looking at is not just blockchain. So I really like talking about the field more as crypto and I have a little video I did on calling it kind of decentralized crypto-enabled applications or platforms. So beyond blockchain, we have DAGs, directed acyclic graphs. One interesting- Like Hashgraph. Yeah. Hashgraphs are DAGs, isn't it? It's kind of a DAG, Hashgraph. Yeah. So I'm not a huge fan of Hashgraph. One that I do like is called Gould G-O-L-D which is, again, thinking beyond the blockchain because we get so tied into blockchain, blockchain, blockchain. What does beyond the blockchain mean to you? Thinking beyond the blockchain, what does that mean to you? So the proof of work process, the mining process, the creating new blocks process is one way of doing things. But we have all these other things going on in crypto like the signing process and so on. You can use those in a DAG in a different architecture than just this mining new blocks mental model. And so that can be used for different use cases for publishing, for group consensus and so on. And so Gould is an example of a project where it looks like there is something real there and that's a very interesting product. Advice for folks that are looking at token raises because, again, we've said this in theCUBE many times. People know this is my, I'm beating this drum. You've got the startups that see an opportunity which is fantastic. And then the other end of the spectrum, you've got the, oh shit, we're out of business. Let's pivot, throw the Hail Mary, put blockchain on it, crypto and get an ICO or get some going. And then you've got these growth companies that are either self-funded and or growing that have decentralized kind of feel to it. It has an architecture that's compatible with tokenization. So we see those three categories. Do you agree by missing anything in terms of the profile and which ones do you like? Well, I think one thing that we need to look at in each of those cases is decentralization actually happening in the project and are people actually thinking about decentralization because it can be scary for a traditional company because if it truly becomes decentralized, you're not controlling it anymore. If you're based on control, then it's incompatible. That's the real Hail Mary, right? When you give up that control, if you give it up. So we have examples coming out where Ripple is running just a few nodes, Neo is running a few more, and things that are not really decentralized and they're saying, well, we're going to be. It's like we're going to be in the future. Yeah, that's always the question. Will they ever be? If they made their money, Ripple's done well, but I mean, what's the incentive to go decentralize? Yeah, so if you are creating a new project, the benefit from this architecture beyond the money is to think about it in that decentralized way and figure out token economics that work in that context and that paradigm. And that's really where the challenge is but also really where some of the benefits can rise because that is what enables truly new ways of doing things. Talk about the dynamic because obviously I live in Silicon Valley, I've been here 19 years, going on 20. You know, I moved from the East Coast and basically if you weren't here, this is where the action is. If you're in the sports of tech, this is where all the athletes are. That's now changed, as you mentioned earlier when we started, it's everywhere. Now also there's jurisdictional issues and the US, one guy's told me, the US is turning into Europe, all these regulations. It's not as much free capital as you think. We certainly know that, SEC and others are putting the clamp down but structuring the token is a concern, right? Our consideration and a concern. So, you know, US entrepreneur, what should they do in your opinion? And if someone's outside the US, what do they do? What's the playbook? What's the, or my playbook, what's the best path right now? Believe the US. Move out of the US. Tell my wife before kids, see you later. But that's, that's religion. Come and check out Panama. One of my friends is building a blockchain incubator, crypto incubator. I mean, I think if you- What's it like to move out of the United States? Give some, I know you just recently went to Panama for this, but what's it like? I mean, is it scary down there? I mean, is it entrepreneurial friendly? What's the vibe? What's the scene like? Take a minute to explain. So I've actually been out there 12 years now in Panama. One of the neat things, you want a place that has an international outlook, an international perspective. So you want to think in terms of a Dubai, a Singapore, a Hong Kong. And so Panama has some aspects of that. It's not perfect, but it does have that international perspective, thanks to the canal. So it has, you know, 100 years- It also has the Panama Papers, which is a negative blowback for those guys. So it's a safe place to do commerce, in your opinion. It is a nice geographic base to do international commerce. So you don't necessarily want to rely on the local jurisdiction, but in terms of a geographic base that is US time zone, US dollar, no hurricanes, it's a very interesting place. Yeah, whatever he goes with the hurricanes, we know that. Yeah. Final thoughts, just overall perspective. You know, you've been around the block. We've been around the block, both of us have. I mean, I kind of have these pinch me most like, Dan, this is a great entire, which I was 22. I mean, do you have those? What's it like? How do you explain this environment? If people ask you, hey, you know, what was it like in the old days? You know, when you had to provision all your own stack and do all this stuff. It's pretty interesting right now. What's your thoughts? Yeah, I mean, I think we're going through an interesting moment right now where we are getting to a point where the forces of centralization are coming against the forces of decentralization. And that includes from the regulatory and as well as the business side. And so I think it is important as we look where to dedicate our efforts to really find ways to increase the decentralization as a factor that encourages creativity and entrepreneurship. Yeah, it really is a personal. I think it's a great environment. Decent.bet, make your bets. Any updates on how to get tokens? What people can expect? A quick plug in for Decent. Yeah, check out our website. We've got links to exchanges. The token is currently listed on Cryptopia, HitBTC and a couple other exchanges. And yeah, please check out the test net. Please check out the white paper and just learn about how this protocol works, this platform works. And I think it is very inspiring as a structure that involves structure. Thanks, Scott, here inside theCUBE. Soma Capital also experienced entrepreneur himself, technologist and has been through the ICO process, head of technology at Decent.bet. We'll be checking it out. It's theCUBE Conversation. I'm John Furrier here in Palo Alto, California. Thanks for watching.