 Hello everyone, welcome to a special CUBE conversation here at theCUBE's Palo Alto Studios. I'm John Furrier. Join with me for this special CUBE conversation. Stu Miniman with Wikibon and theCUBE, co-host as well, just up at Amazon Web Services Summit. Stu, great to see you again. Our next guest is Ben Gallup, who's the executive chairman and interim CEO of Store J, pronounced storage. So it's a really hot cryptocurrency blockchain based storage solution. I should say decentralized storage, not necessarily cryptocurrency, but tokens are involved in encryption. Great to see you. Great to see you. It's good to be back. Formerly Docker CEO and now advising at Mayfield Fund. It's a venture partner and also interim CEO of a hot. Yeah, really exciting company. And I think I'm really excited to talk to you about it today. So let's just jump into it. So obviously the ICO craze is awesome. And we've always speculated that the blockchain and the decentralized applications are coming as going to be the real action, but yet it's going to create efficiencies where it's inefficient and venture capital is one of them. And that's why the ICO craze is going, people are raising a boatload of money that they probably wouldn't have gotten. Wouldn't have gotten, yeah, no dilution, things like that. So it's interesting. Give us an update on Store J or storage. How much did ICO they raise? Why papers out there? It's peer to peer. Give a quick minute to explain what the company's doing. Yeah, well, I guess I sort of probably start by saying that I think that blockchain is bigger than just cryptocurrency and decentralized is bigger than blockchain and storage is primarily a decentralized storage company, right? So we're about to centralized apps and the whole thing would absolutely work even if we were just using dollars. But I think it does make it a whole lot more exciting, right? And so the company kind of unique in the now unique in the sort of crypto space and that we actually had a running service that was providing real value before we did the large token sale and the token sale raised about $30 million. Fortunately, they took about 10 of that in Ethereum and Bitcoin, which rose up. So there's a good deal more than that in the bank account right now. Hopefully they convert the fiat currency. And then they converted to fiat along the way, right? Good, well, all the time I have 20,000 now, it's like 7,000. Yeah, yeah, so you know, didn't sell everything at the peak, but you know, didn't sell everything. Yeah, so we've been having many blockchain and crypto or token based economic kind of things, but the real question is, okay, what's happening? Now we know the action's been on the infrastructure side. You look at all the top heads, one's Polychain and amongst others, they love these deals because it's infrastructure. Is that where the action is? And how are you guys looking at that? Because at the same time, there's a wave of decentralized applications also known as Dapps coming on. So there's a relationship going on between how fast the infrastructure can go. And then how applications are going to work with either on-chain or off-chain dynamics. Sure, sure. So maybe it'd be helpful to sort of give you a sense of what it is that we do. Because I think that if you do that, and I think it makes sense in the context of decentralized infrastructure, decentralized Dapps, but also actually traditional infrastructure as well. So I've always been searching for a company that I could describe at Thanksgiving. I've never succeeded, so I always end up saying that I'm in computers and fixing somebody's printer. But I guess if I were to describe storage at Thanksgiving, I'd say it's basically the Airbnb of storage or the Airbnb of disk drives. So Airbnb, people have lots of condos or vacation properties that aren't being used all the time. And so Airbnb brings them together, people who want to rent those. And they're the largest hotel company in the world without owning a single property. And we're kind of doing the same thing with storage in that there is, first of all, there's this explosion of the amount of data that's getting created with a stack of CD-ROMs to Mars and back this year. Yet the price of cloud storage hasn't come down and 90% of all the disk drives that are out there, or sorry, are only about 10% utilized. So it seems like a solution is a problem that needs a solution. And that's what we've done. We've basically brought together a very large network of individuals and companies that have spare storage capacity and match them up with people who need storage. The really cool aspect or the many cool aspects about it, but one of them is that basically if you want to store on the storage network, we take your file, you encrypt it. So we never hold the keys, you encrypt it, it's all scrambled up. We break it up into between 20 and 80 pieces and we spread those out across the 150,000 or so nodes that we have in our network. So it's super cheap, but it's also super secure. Great performance because the data's way out at the edge and super available because there's no storm or power outage or idiot tripping over a power cord that can take out your storage. So Ben, you touched on, first question I was going to ask of course, trust and security. Storage I absolutely have to worry about. So it sounds like that's at the core, but there's a number of dynamics going on in the industry. Object storage was great, let's spread it out, let's make it more decentralized, but most of the kind of core storage industry, it's speeds and feeds and latency is super important and even when you start getting to distributed architecture, I worry about that latency. So what are kind of the use cases? What are some of the key customer issue? Is price a big piece of it? Or what solutions does storage solve that others can't? You know, I always said when I was at Gluster, which was a storage company, that there were sort of four things that mattered in storage, right? There was certainly price, there was security, as in I don't want anybody to be able to access it. There's availability and that I never want to drop or lose files and finally there's performance, how fast I can get at it. And so for a huge range of use cases that involve files, basically everything that object storage is kind of used for today, the design of our system is actually much better, right? Because we've encrypted it locally and then spread it out, you really can't attack it, right? I mean, first of all, you'd have to figure out, so it would be a attacker who wanted to find one of your files in the storage network would have to figure out which of the 80 or the 20 nodes out of 150,000 it's located on. If they found one of those and they got the small portion of the file that's there, they wouldn't be able to do anything with it because it's encrypted, even if they were somehow able to decrypt it by stealing the key from you, not from us. So encryption and immutability. And immutability, right? So you get all of that and so for the security piece, it's great. For the availability piece, I never lose a file, it's really, really good, right? Because if you just look at the math, right? The chance is that somehow you could basically lose 10 out of 20 nodes and so be able to recover your files. And all of our nodes are run by different people, different power supply. So let's take a step back. And you guys, how many nodes are on the network now, you said? So 150,000 now, run by 70,000 farmers is what we call them, right? So they're not miners because they're not just solving math problems, they're actually producing something of value, right? 70,000 farmers and then we have on the network right now over 50 petabytes of data which is a really large amount and yet we don't run a single data center. As you guys have raised any venture at all, is it all ICO processing? So there was a small seed round that was done sort of before the ICO craze, but other than that it's all. And how many people are working on the company? Up to 25. So you guys are like a classic startup and now the working product, how does that look like now? Is it on the blockchain? Is it off the chain? How's it working? Yeah, yeah, so the, so well, so I sort of described to you what the product does, right? And so far nothing that I've described to you involves blockchain. The way the economics work is that as a user, somebody wants to store on our network, you know, you can, we quote a price in dollars, you can either pay us in dollars or in the storage token. And as a farmer you get compensated with the storage token and that's done, of course, using blockchain. We're actually part of Ethereum. And we'll- Is that an ERC 20? ERC 20, yeah, it's ERC 20 token. There are also interesting things though that we are working on using blockchain for things like you just mentioned, right? Data integrity, so I can make sure that, let's say I'm doing a snapshot of a database and I want to make sure that it is exactly what it is, nobody can tamper with it, et cetera, then that's a perfect use of blockchain. But using blockchain for this stuff I was talking about before, like figuring out where the charts are and making sure that they're uptime and reliable, that's actually stuff where blockchain isn't the best answer. Yeah. Ben, tell us a little bit about kind of the customers that you find there. Yeah. Storage administrators, that role's been changing a lot, but the typical storage administrator, if you tell them, oh yeah, I'm doing some distributed things somewhere else and paying in cryptocurrency, they'd be like, are you kidding me? I want this thing that I can lock and hold and guard with a gun. Look, I mean, there's, I think this is like anything else, there's an adoption curve, right? And right now it's clearly very much early adopters and actually sort of similar to Docker and similar to Cloud in general, it's developers were leading the way, right? So developers are saying, oh wow, I can write to the storage network in the same way that I would have written to S3, only it's cheaper for many use cases, more performant and not centralized, right? So I'm not trusting one Cloud provider. So for certain use cases, this is fantastic. Are there certain Cloud native apps that you're finding have strong affinity here? Yeah, so basically what we have affinity with right now, let's be clear, this is early, right? This is early days. I wouldn't recommend that people store their most sensitive data on this as in, but. Not Oracle certified yet is what you're saying. We're not Oracle certified now. But basically anything that's involving a large file that you're not writing to very frequently but you're reading a lot, right? Or that's getting read by lots of people around the world, we're a really good solution. There's one of the things I think I mentioned to you. So we've got 150,000 nodes, they're located in, I think it's now 180 countries, right? And all over the U.S., right? So that if you want to get your data close to the edge, like if you're, the people who are consuming your data, right, are really close to the edge, this is actually really good. And because it's spread across so many, you get the benefit of parallelism. So it's super fast in addition to being super safe and super secure. How does it work for the farmers? Because, you know, one, we have video files. So we would love to like spread our video files on the StoreJ Network, Storage Network. So, let's just say that was the case. I do a special deal for you too. Of course, yeah. Get a little token action going on on both sides, keep coins, but the availability of things concerned, whose computers are being stored on? Is it extra capacity? Is it servers? Is it my own computers? And, you know, what's that kind of model? Sure, so basically, you know, we, you know, just as Airbnb measures reputation, we measure reputation too, right? And so if you don't have good reputation and certain characteristics, we won't send data to you. And so what it basically means is, you know, you've got to have, you know, dedicated hardware and a dedicated connection, right? So we do have people who are, you know, who are running things in their home, but it's, you know, it's not a laptop, right? It's not a laptop, it's not on your phone, right? But, you know, but if you have a disk drive that's connected with reasonably high capacity and reasonably well connected, right? Then you'll establish good reputation. But what we are seeing is we're actually seeing a lot of universities, a lot of small businesses, some data center operators who have spare capacity and actually, or just want to use this like as be both a farmer and a user, right? So back up and get stuff on their capacity, that was a good idea. And interestingly enough, we also are getting a lot of people who were Bitcoin miners and bought equipment, which is good quality equipment, but there's such an arms race in doing that, right? So they abandoned it because it was too hard for them to make good coins. It's too hard to make money, right? And, you know, very expensive specialized equipment. And in our case, basically high quality, you know, general high quality equipment works well. What's the profit model? How do farmers make money? So if I'm going to say, might take our Q videos as an example. So I'm paying you guys and you're just treating those tokens. You're paying us, and we're, well, so you're paying us again. You're paying us either in dollars or tokens. And then farmers get compensated in tokens. And right now about 60 cents on every dollar goes to the farmers. And, you know, farmers get more storage based off of their reputation. And, you know, we charge people based on both how much you're storing as well as sort of how much bandwidth egress that you're doing. And we compensate farmers exactly the same way. And so that's the handle throw through consensus protocol you guys have? Yeah, yeah, yeah. So the payment is, and the payment and assessing reputation, we actually use sort of good distributed blockchain as well there, right? So you're not counting on storage to be in the middle there. Now with the remaining 40 cents, which I think is actually the really interesting part. So obviously, you know, we keep some of that. We put some of it back into the network. But what I'm really excited about is that this is now a way for us to economically empower demand partners as well, right? So the first one we announced was FileZilla, but, you know, we have lots of other open source projects waiting in the wings and we're happy to share with them, right? So as opposed to centralized cloud, where it's really hard to make money as an open source company or an open source project in our case, right? We're happy if you're sending us users and data to give you a really meaningful percentage. Any kind of freemium model you guys playing with, I'm not going to imagine this being pretty interesting because S3 democratized and lowered the cost barrier, obviously with cloud. Yeah, I mean, S3 has been great for many things. How low are you in terms of the disruption? You guys are going to probably have to come in and undercut S3, is that the strategy or is that the price value? I think what I learned from my time in storage is price is important, but you have to be really safe and available and reliable, right? Because people's data is really important. But we looked in and across a pretty broad set of use cases and comparing us to the traditional cloud providers, we're probably a third and we could go lower. What I think is really interesting in our case is that the economics just worked really well. So for the most part, if you're a farmer, you've already got, this is spare capacity, you don't need any more electricity to run this thing. You've got your bandwidth, right? You don't need to hire any more people. So it's almost pure margin for a farmer, which is great for them. And so we can give economic value to farmers and give economic value to our customers. We can give economic value to partners. Any kind of like economic models you can share in terms of like what someone would make. Let's just say that I had this big music library that's not being used anymore. As a customer, of course, if you've got data that you want to store in our network, you'll save a lot of money, right? And it's sort of probably a third of what you might pay. But is there any kind of like trigger? If I'm a farmer, I want to join the network. But if you're a farmer, how much am I going to make? So it really depends on how much you're storing and how much, and how good your connection is. But as a farmer, I think you can make decent money. I mean, this could probably be, I don't know, off the top of my head for $20, $30 a month per drive, which isn't bad. And certainly much easier than making money. So it kind of depends like the Airbnb model. It depends how well you're using. How well you're used, right? I mean, so some people more or less, some people will earn more. And again, for most of the farmers, this is pure margin. We've got a couple back-to-back rooms too. We should get some drives up there and get on board, get paid for the cameras. Yeah, and look, I mean, I think for videos, I think you guys would actually be a perfect use case for, you know, with a lot of the stuff that's going to be coming out later this year, right? You know, you get both storage and sort of see the end like things for free, right? In the sense that it's because- I'm really glad you brought that up, because I want to ask you about video coin, because Halsey Miner has video coin, another ICO. He raised $50 million. We covered that on SiliconANGLE, but he's trying to democratize like Akamai. Yeah, yeah. I mean, look guys- Is that similar to what you guys are? Well, I mean, I guess you could just say, we're further democratizing object storage, right? So, democratizing the S3, but I think we can also democratize Akamai. They're sort of, democratize Isilon, right? I mean, there are certain other really exciting things here. What other services, you mentioned CDN, so it's not just storing the information, but that global dispersion- Well, yeah, I mean, it used to be, I think that people had a, there's really big difference between archival, which is, you know, slow, hard to get at, and CDN, right? And, you know, and, but actually, given the way that we're doing this thing, we can be pretty seamless, right? You know, pay archival like, for stuff that's staying in archival, but, you know, go up market if you're going to be, you know, having a lot of people read it. So I got to ask you about the, obviously you have security, you're looking at additional services around redundancy. I can see that being a nice headroom for you. Yeah. On a personal note, you've been involved in a lot of industry, companies that have done very well, entrepreneurial success. Why am I doing this? This is, I mean, I can tell you having fun, how could you not have fun? It's a whole nother generation of innovation and disruption coming at a whole nother price point. So, you know, I'll see, what's it like? Are you having fun? And if you could talk to your 22 year old self right now, because I wish I was 22 right now in this market. Are you saying I'm not 22? How do you explain this? And when you go to parties even in the Valley, and people say, you're crazy, it's a freaking scam out there. How do you explain to them this revolution? Because this is like a special unique wave. Yeah. What's your, how would you talk about this? Well, I mean, actually, I sort of described it the same way that, to people in the Valley right, sort of the same way that I described at the beginning, right? Which is that, you know, blockchain is bigger than cryptocurrency and decentralized is much bigger than blockchain. And storage is first and foremost, decentralized. It's about decentralized computing, decentralized storage, supporting decentralized apps, keeping the internet from ending up in the hands of just three people, right? Which is, you know, three companies, but I think is really important. But also, I feel very good that, to the extent that storage does touch on cryptocurrency that we've done it the right way. You know, we had the service working first before we, we did the token sale. We raised what now appears to be a modest amount in the token sale, right? We tried to be very transparent and at the forefront- I could have gotten more if you wanted to. Probably, right? And we're trying to be at the forefront in terms of governance and transparency. And look, I think that, you know, it'll probably be a good thing if, you know, just as a kind of a good thing that the bubble burst in the late 90s, right? And you got rid of a lot of, sort of not such great companies and not such great operators. You know, I think that, you know, the current corrections or whatever in the crypto market, I think will allail the strongholds. PetStock.com is gone, but Dogecoin still exists. So. Right. Yeah, yeah. So I'm, look, I'm sure that somebody has a crypto-based PetStock.com, right? Or Webvan lurking in the wings somewhere, but Kodak just did it. So I got to ask you, because you're super smart. You went to some really good schools. I think Princeton, Harvard Business School. So you got a good education. So I got to get your take on the whole token economics vision. Because this is, I mean, if you look at outside the tech trends, there's actually new economic models that are coming out. If you look at the token economics, new liquidity on the one side, you got sovereignty, you got consensus. These are not just tech issues. This is a society issue. So what's your vision around that? How do you, how do you viewing it? What's the upside? How is this shaping the future? Yeah, look, I mean, I think if you're a token network, you sort of have to have some central bank chops as well, right? And we actually, we have a central banker. So you have a chief economic officer? So we don't, no, we have it. We have an advisor. We have an advisor right now. I mean, I actually had a degree in public policy at one point, but, but no, I mean, listen, we need to think about, you know, the token supply and the same way you think about the money supply, right? We're, we're backed by something real. So it's sort of like having, you know, currencies backed by gold, right? We, you know, we need to make sure that the, the market grows, right? And the network grows. And you know, my, my fundamental belief is that the more the network grows, the more people use it, the more value that we were able to provide, that'll be good for token economics in the long run. In the short run though, I mean, what we've done is, again, we price, we price based off of dollars and we compensate farmers based off of the token based off the, the spot price, right? So, so for farmers, we've sort of tried to remove any need to worry about volatility or, you know, things like that. So I want to give you a reaction. So I've said on theCUBE. Or the price, right. I've said on theCUBE multiple times that in the old days of venture startups, the CTO was everything. Had to get great CTO or VP of engineering and great senior executive team on the entrepreneurial team. Now it's almost like the chief economic officer is the critical piece. Because you got public policy intersecting with economics. You got new kinds of math that's not technical algorithm, but it's kind of business algorithms. It is. Look, it's both business algorithms, right? I mean, if, you know, just like any economy, right? I mean, you know, the money supply matters, right? And people's trust in that, in that money matters, right? And the supply matters, all that sort of stuff like that. And stability matters. So I think, I think absolutely this new breed of, of network based token companies will have to worry about that. And probably should think about it, chief economics officer. But it doesn't mean that you don't also have to great CTO and great technology and things like that. Cause that's how you make the network valuable and grow. And, you know, I, one of the reasons that sort of gave me both excitement and comfort about going to storage is that the economic model works fundamentally, even if the crypto's not there. Yeah. Because of technology and it's just decentralized. Decentralized storage makes sense, even if you're buying and selling it with dollars or pounds or ruffles or whatever. Well, Ben, great to see you. Thanks for coming in and sharing the, we're going to assume go to the Ben Gallup School of Economics, Public Policy for Tokens. He's going to give a class at Stanford on that soon, although it's the different competition school. Maybe, yes. That's slightly different. We still like that, yeah. It's great to see you. Hey. Congratulations. Thank you. Pronounced storage. Great successful ICO. Hot Startup, really an example of the infrastructure opportunities of a new decentralized infrastructure that can be and will soon, we think it will be critical infrastructure in a whole new way. Great to see you. Really good to see you. Great to see you. Good to be back with you. It's a CUBE conversation. I'm John Furrier with Stu Miniman. Thanks for watching.