 And we are live. What's up guys? Welcome back to another episode and today's special guest is Jesse Limberg gruber and so his quick bio is he's bootstrapped to businesses to over a million dollars in revenue while still in high school That's fucking impressive and launch an enterprise analytics startup at Stanford serving brands like Walmart Microsoft Amazon And then in another company Neo reached three point five million dollars And now as a co-founder of bloom which we're talking about today because it's a pretty cool initiative and project I just read the white paper about an hour ago. I do have some questions So the first question is I'm gonna come from this as a meal fight and I'm gonna ask you Jesse. What what is that? What is bloom? Yeah, thank you. So thanks for having me on the show bloom Brings credit to the blockchain around the world There's lots of problems with credit in China your political affiliation can influence your credit score In other countries religion can influence your credit score Even in the United States takes years to build up a full credit history And you have to have debt to have a credit score. And so what that means is there's 45 million Americans a lot of Millennials who never opened up a credit card for example, which don't have a credit score and Aside from all the scoring issues. They don't work if you move to a new country in most countries like America the scoring agencies are essentially monopolies FICO is scored on like 90% of loans and The algorithms that score Credit haven't really been updated since like the 1980s. And so they don't use any modern signals They don't look at you know things like Utility bill income cell phone income and so we're taking all of these problems with credit and solving it by bringing credit scores to the blockchain So, how do you solve how it works is it's there's basically a few components Bloom ID first Generates a global identity for everyone if you don't know who you're lending to they can essentially run off with the money And so we once we establish that ID Bloom IQ keeps track of all their debt obligations and pulls in lots of information about that person so It's in addition to their credit report if they have one it also pulls in their Utility bill payments their cell phone payments and any other financial data We can get on an individual to assess them and then balloons score the last component takes in the identity component and The financial data to generate a global single or credit score Okay, so a couple of things I want to talk about over here So you guys are building your own credit courts credit score system. So what's the difference between you and FICO then? You know in the if to a lender virtually nothing to a lender They are you going to use a similar score like they're used to in the exact same process They're used to accept that our score will have FICO as a signal so it'll at least be it'll at least be as good, but it will also have lots of lots of lots of other signals and In countries where you know, there's governments and central banks and monopolies which essentially control the score And make it unfair We will not be subject to those limitations And so from a user experience standpoint very little but from a data standpoint, it'll include a lot more data It'll have billions of additional people that don't currently have a score Well, I'll be able to be scored and lenders will be able to recognize that the score is actually an indicator of credit worthiness Not an indicator of factors that the government arbitrarily decided to So there's two things over here Number one is me as a lender am I lending out tokens or crypto or is this a fiat based lending platform? It's a great question So you can lend out crypto if you want it's perfectly sufficient for that But no most of our I would say the With the exception of a couple exceptions every single lender we've talked to and signed up on the platform is lending out crypto like sorry, sorry lending off the dot like we just Partnership with self-lender which aims to bring credit to the credit lists And so we share a very similar mission and that we're trying to get people loans that don't have them They're a fiat lender. We've got a lot of other fiat lenders that are going to be using bloom as a alternative to you know scores and So essentially for the borrowers, you know, there'll be a lot of borrowers interfaced with bloom that will never even realize They interface to the blue sort of like a behind-the-scenes replacement for the credit bureaus if you will And you have a native utility token on that. That's right. So our token actually has a few use cases in the in the ecosystem The first and probably the most important is it's an anti fraud mechanism for the generation and verification of ideas You have to the lender has to input token which Makes it that a fraudster or bad actor can't just try to Guess and check a thousand IDs until once generated because if there's a little bit of cost associated with that for you Or me or a lender. It's like nominal. It's nothing to Hey, but for a fraudster that would have to do millions of attempts Really high that means that you know as more loans are issued and as more lenders in the system There's a much more demand for tokens One token is Your is the is a vote on the governance of the scoring So that way we keep the score decentralized and we also do use the token as a payment and settlement mechanism for for banks and data providers and People who are providing services for the network, but definitely the main two are the anti fraud which is tied to every ID and every loan that's generated and the governance of the score So let's run it through say I'm a lender I would hook up my bank account directly to bloom and then lend throughout my bank account onto bloom There would there will be a lending marketplace But if you're a lender you will you do the exact same process that you've done today It'll be no difference except you'll now for the first time ever have the option to either check someone's FICO score or Check someone's FICO score and their Bloom score knowing that the Bloom score includes the FICO score but also lots of other pieces of information and so Lenders, you know, we're not trying to create any new behavior here. We think Visions in crypto but with ours in particular We're trying to go right to what's already Existing in the world trying to tap into the lenders who are already doing an action and are already using a broken system and just give them an alternative with crypto and so Basically lenders won't notice the difference between Bloom score and And bloom and what they're doing today. Just that'll be a more sophisticated decentralized Distributed way for them to pull credit reports And so then me as the receiver from the lender, I'm taking Fiat directly into my bank account So you mentioned there won't be any difference whatsoever Mm-hmm. That's right. So we there will be you know certain interfaces that we're going to be building for users and I end Though though we're building on right now. I'm working on the core protocol. We've been working on that for for quite some time It's just about done. We're launching a Testnet version very soon So this isn't theoretical. I know a lot of token projects are theoretical what we've actually like my co-founders are Studied at Stanford as well and we've been in the space for a while But we will after the protocols built be building like a consumer marketplace for consumers to log in and see loans that are Accessible to them, but our main our main like number one priorities to build the protocol that lenders will use so I Wanted just for everybody listening. I want to kind of reiterate the main difference. So How do you eliminate the centralization of FICO compared to you? What is the decentralized nature of bloom compared to FICO? Yep, right now FICO and the various equivalents around the world FICO is checked on 90% of loans There are factors that That are included in FICO reports, which are proven academically For the last 20 years to not correlate to credit worthiness, you know, we're talking about things like You know The fact that your score drops if your credit gets checked or the fact that you have to use 30% of your line of credit The fact that you know closing out an old credit account that you're not using can damage your score There have been academics that have shown that these things don't matter But they do matter for the business of the the lenders, you know, they you know It's it's very nice if part of your score is to actually use your credit It's very nice if part of your score is to You know align with the political views of the government in China or be registered to vote, you know in the UK and so These are problems from centralization Rather than let the governments or central banks decide what the factors of the score are We let the people decide the lenders the borrowers and the token holders That means that no one party or institution controls the score We at bloom don't even control the score. We're more like Guiders of the open source protocol, you know, we'll have suggestions But ultimately the decision of what data to include and how to weight it is controlled by the people You mentioned token holders. What's their responsibility in the network? Token holders are essentially the checks and balance system of the ecosystem. So The majority of the token holders will be lenders for sure They're they're the ones that have to have the biggest need for the token But also data providers Banks and companies providing information to the network will have a lot of tokens Consumers individually will have a very small number of tokens, but the at scale it'll be a large amount and essentially The they are responsible to ensure that the score is pulling in Accurate information they're responsible to whitelist certain data providers and vendors to make sure that bad actors and fraudsters aren't sending bad information on to the network, but most importantly, they're just responsible to Help oversee the scoring process to make sure that it stays fair and not influenced by any central Government so practically speaking. It's very minimal oversight. We're using Aragon for Governance of this aspect of the protocol, but it's like, you know, occasionally voting on improvement requests is the main responsibility And then I'm assuming your talk and it's going to be on Sorry cut out for a second assuming it's going to be on exchanges on second tier exchanges right now we're mainly focused on Building the token as utility token. I mean, there's there's certainly, you know various things that happen in the ecosystem, but That's not really what we're focused on right now. So the token will stay inside as a utility token based on the governance model Is there any slashing conditions like let's say you find out I'm a bad actor inside the ecosystem. What happens to me? um So basically this gets into a little bit of the technical details, but we have a whitelist of data providers that when you query the network you can data of various trusted nodes and trusted data providers and Anybody can be a node or a data provider But whether or not you have a historical track record of success is whether or not you're a trusted node or trusted data provider and To start sending back at informations You'll essentially lose your status of being a trusted provider which means that you could still send information to the network People could still trust your information if they wanted to but it would be sort of like Your email going to spam, you know, the network would advise you not to listen to this information Are you guys having any plans in the future of like Connecting with oracles to kind of streamline kind of this authority like let's say for example You mentioned you have your own bloom queue type of scoring model in conjunction with FICO Are you guys using like social signaling models where depending on the user behavior on social media or how they surf the web? Like for example in M. Pace and Kenya and M. Pace how they look at the usage of cell phone minutes How often do you how often do you get credits for a cell phone where do you use your cell phone? How do you use your cell phone so the behavior of your actual cell phone usage determines your credit rating on getting more cell phone minutes? So I'm wondering if you guys are looking at any other different like social signaling like that as opposed to just looking at standard Variations of FICO, which you just mentioned a second go Yeah, don't work. Um That we're starting with things that are tried like really really tried and true like 20 years of research, but there's actually a lot of Really really fascinating metadata. You mentioned a really great example There's a lot of metadata that you can get from From social media from an actual transaction logs, you know, it's what you're actually buying from the store. There's metadata around Available these days and it's only growing you know and Everything is a data point, you know including things that you wouldn't expect to be a data point can be a data point You know what utility bill provided you have what cell phone bill provider? Do you have you know, what's what types of things you're buying, you know, how it's your activity online and on social media and so focused on ones Social media is going is likely going to be a component in the long run. We don't have that incorporated into what we've actually built so far Just because we're trying to focus on things that are more global But it's something we're definitely looking at and there's a lot of really really really fascinating things we can pull from it Very cool. So obviously you mentioned being built on a theory and you're using IPFS for decentralization What's your guys game plan and roadmap for the whole scaling issue right now with the area and based on just transactions per second The nodes. Yeah, we are built on a theory, but we actually don't Are not a very blockchain intensive application This is most of the difficult processes the things that would normally contribute to a lack of scaling or done an IPFS Certainly this can't have 7 billion credit scores on it tomorrow. We recognize that it's like that would be larger than the whole blockchain itself, but We are more It's more of a concern for us of IPFS being able to scale than it is the ethereum But like I said, you know a theory will have to get bigger to support our network at scale and you know we'll just continue to Support the ethereum foundation work with them You know if we if we ever had to help out on engineering things to contribute to that We absolutely would but it seems to be mostly getting better You know the relighting work and other developments. There's plans to get a lot of it resolved So I see like the biggest hurdle for you guys and it's hurdle for any major Say application like this or initiative like this is user acquisition The whole premise of this is a network effect You need same amount of lenders same amount of receivers people Interacting together through the interactions alone. It's a negative feedback system to get the data on improving the data so where do you see right now the The best low-hanging fruit for you to acquire users for the network. That's great great question So fundamentally, you're definitely right definitely network effect You need lenders and borrowers data providers There's a lot of different players in a lending ecosystem and then even you know behind the lenders There's people funding the lenders. There is you know behind the Identity providers and so a lot of different players a lot of things have to fall in place for bloom to work the technical actual implementation of bloom is a Very minimal aspect of the actual difficulty of building this um So the short answer is we already have a lot of the relationships needed to scale this up and they're already on board the longer answer to that is My co-founder is john and alan built the identity verification and anti fraud company that's used by like Coinbase for example in a large large number of financial institutions and us crypto exchanges and so We're quite familiar with the ecosystem in that Who to target and what we need to where we need to go in order to bootstrap the network So our current plan Is we're going after lenders first In fact, we're not even considering borrowers. We're going after lenders first who already have methods of knowledge to acquire borrowers Lenders that are that are higher risk lenders. So, you know, they take more risky loans. They're willing to try new things Lenders They're businesses, you know, they they want to grow their profit They want to acquire new users and they're willing to take risks if it means more profit And so we've already announced some on our blog. We just announced one with self lender, which is a credit building lending company They raised a a few million dollar series a they've done over 40,000 loans And they haven't had they're excited about using bloom to potentially get a lot more people But they've already done 40,000 without us and I'm sure Uh, you know integrating bloom into their system. What does make it easier for them to get more then over time? Of course, as you get more lenders, then we'll work on the marketplace then we'll work on some of the network effect components So as a business model, then I'm blooming correct me if I'm wrong. I'm sorry if I get this wrong, but The business model right now is a token appreciation or you actually guys like is there any other form of business model there? Um, there's not really a Uh business model in the traditional sense. We're not trying to build like a high revenue generating company There are some aspects that bloom would generate revenue other than token appreciation Just to fund the development of the protocol Um, you know in terms of there's there's some centralized style apps that we could build, you know, think like a coin based style interface Um, but for the most part, uh, you know, I don't want to call it a non-profit Just because that has a lot of you know legal connotations and whatnot, but we're essentially Not generating any profit as an organization and just generating the minimum minimal amount of revenue Needed to support the you know open source protocol and do you guys uh You guys have figured out your token distribution model yet? We are announcing that really soon. Um we We have a real lot of lenders that have been interested in uh in you know Acquiring tokens and so we're just finishing up our conversations with them. Uh, and we're putting lenders first Definitely, I know that might make the community annoyed But lenders have the the biggest need for our token and so we're really focused on them They're going to be holding a lot of our tokens. Um, but then outside of that we will be doing, um You know, I don't have an exact date yet. Uh, we're we're actually going to we're going to launch the protocol first We're going to get some traction first before we actually announce it But we are going to be doing like a some level of a token distribution at some point And i'm assuming that's like in next year or is it this year? Sooner than later for sure, uh, I I would Much more likely a q4 date than a q1 date But uh, it's just it's just going to depend on uh, when we actually can finish the first version That's publicly usable and has utility to the general public Hmm I know that I know though you mentioned It's going to be fiat based but I have a suspicion that there's going to be a lot of lenders as well for crypto just based on the nature of this Yeah, definitely. I think we've been in touch with I think just about every crypto lender that's ever existed or had aspirations to exist Um, many of them are already building applications on top of bloom. Uh, so we've given them access to you know What we've built so far, which is mostly done and that you know, a lot of them are already Integrating their applications on top of it. Uh, and we haven't even launched the public, uh, you know testing that version yet and so I think they'll There's going to be a lot of business applications to be built on top of bloom um, even if And so I think when it's open source, there's going to be a lot of you know, uh, entrepreneurship I'll give you one example You know, we're we're working with district 0x to build a peer-to-peer lending district That's controlled by no one owned by no one and facilitated by no one peers kid on their own Uh, put up a need for a loan and then the data comes from bloom the information comes from bloom and whether or not Mind to give this loan or not But it connects, you know peers and borrowers directly to each other There's a peer-to-peer marketplace for loans very simple very straightforward nothing crazy complex about it more of a bulletin board style of listings and loans um And it's a set it's a relatively simple application that actually has massive implications around the world Because where the places where there's no financial infrastructure to lenders, uh, you can default to peer-to-peer kind of like You know local bitcoins if you will did for bitcoin trading And so there's a lot of very simple applications that could be built by a developer or two on top of our api That I suspect will be built Cool, I like it. I think we'll wrap it up of that. Uh, jesse if people want to get more information about bloom best resource for them is um, definitely just to read more our blog, but we have We've added over 3 000 people to slack in the last three weeks That may be closer to four weeks now and I'm on there every single day our co-founders are on there every single day Sign up for a newsletter. Join slack. Those are the best two Resources and then of course our blog is the the go-to source for updates lots of information on there Thank you jesse. All right, brother. Thank you