 Hello everyone, I'm John Furrier. We are reporting on the ground here in Puerto Rico for Blockchain Unbound Exclusive Conversations at Coin Agenda. Covering all the action at Restart Week, a ton of events. Cryptocurrency, Blockchain. All the people are here with the local ecosystem. The Cube is here. It's great to have you on. Thanks for joining. Blockchain innovation is today global. This is a revolution way bigger than the internet itself. Programmable money, programmable contracts. It wipes out finance. It wipes out legal. It wipes out governance in many ways. There's no central authority. You have access to open-source software. It's fully connected. So now is the time to make it translate. We've all heard about the Steam Digital Transformation. It's businesses that if they don't evolve and adopt Blockchain, AI, all these other things, they have a threat of being put out of business. It is extremely competitive. A new set of stakeholders, investors, global players, governments. Are it's happening now? You have a chance to be a part of an economy without a permission of a centralized organization. You have to pay 200 people in 40 countries and it's an unholy mess with holding taxes and concerns around money transfer costs. To hassle. It's a nightmare. They've got currency control. So you're only allowed to move a certain amount of capital out of the country legally. So what happens now? You buy cryptocurrency and you can effectively invest in assets around the world. This is making it much easier to contribute, to help people, to get help. And you don't have to go to school. There's a very big influx of young talent and talented minds at that, right? And this is really changing the revolution landscape. You've got the radical Burning Man hippie guy all the way to a three-piece suit. And that diversity is very, very rich. A lot of people are scared. They're like, whoa, hold on. Slow down. We're not going to prove it. And then they have to say, no, this is the future. So you have two competing forces colliding. For some reason, crypto really pokes the people's biases. You know, why does it have any value? And I go, well, why does the United States dollar have any value? I mean, you've got full faith and credit of the government that's in debt by $20 trillion. You know, is that a good idea? Most people that come here start with the what, the how, and people are scared. But the young people are like, yo, this is happening. This is not a moment. This is a movement. It's definitely, I would say, 1996, 97 of the internet bubble. It's just starting. People know there's something really magical. They don't quite know what to do. You know, America really grew because Europe used to have all the controls. And so the capital basically left Europe and went to America. And now what's happening 300 years later is America has all the controls and the capital is starting to go elsewhere. So a new liberation is happening. Incredible resources are now being poured in problems that were ignored for many, many years. We need more women in blockchain. All the ladies come join us. And what is beautiful is that blockchain is doing it open source. It's accelerating the tech. These ideas are being freely shared. Whereas before there was bottlenecks in the collaboration aspect. If we're able to write a contract, and a thousand people will be able to verify that contract, and we're able to transfer money from one person to another without the two parties being involved, we've got a perfect scenario. Security and speed and fairness all at the same time. You can create these chains of trust. And that can happen anywhere in the world. You're on a level playing field. If you have 4G connectivity, now you can compete globally and be a part of the global economy. So if you're someone who's in the emerging developing world, and you want to begin to build wealth, and you'd like to own a piece of first world real estate, today the minimum is about $1,000. But by implementing the blockchain further, they want to eventually get down to $1. You can buy a piece of real estate and enjoy the returns on that. I want to solve the wealth gap. And I truly believe we can do it when we can allow anyone anywhere to invest in good quality assets. I can't do it with the current system. There's too many friction costs. The killer app, right, is money. It's paying people. That is the killer app of the blockchain right now. Let's say that money is software, and it is software. So if you buy something with a credit card, what do you think is happening? It's all software. And what has happened is open source software has always eventually won with respect to closed source software. So proprietary money is probably back on its heels because open source money is coming. Something like that will give liquidity to a lot of small business owners. America is a country of small business owners. Across the globe, it's about small business owners. It's an interesting model. You don't have to give up any equity. You don't have to give up any board seats. It's much leaner, much simpler. If you're an investor, you've got to get a pound of flesh somewhere. Is it just getting on the discounted tokens? Is there a little liquidity going on? When you think about private sale, pre-sale, it's 99% a token deal, right? Although equity is coming in because a lot of more venture capital is coming in, and they're demanding a piece of the action from a company and equity perspective. Its equity might be future revenue. Sometimes it's dividends or the opportunity to get dividends. So it's a combination of blockers. Do you have a preference? Do you care? You know, at the end of the day, equity is always preferable. There is a provision in the 1934 Securities Act called Section 12G. It allows us basically to go public by telling the SEC we're doing it without having to delay it to wait for their permission. After 60 days, you're in. So we'll continue to clear comments, but the thing is with tokens, who knows how long that'll take? I mean, is the SEC going to shepherd something through with crypto? I wonder, are they going to make it take five years? I don't know. Sheppard from event to event all over the island. This is the new home of crypto. The world is moving too fast today for a big country to keep up. It's all going to happen now in this next century at the city level. And so we work a lot with cities. Four smaller countries. Four smaller countries. Because I know Estonia, Armenia, Bahrain's got, you know, Dubai, Envy, so I mean, every country wants to be the crypto country. Multiple small countries are going to come into the space which they know now they can get the capital flowing into their company and they're going to allow their rules to be lax. They're going to let capital flow through. And then US will have to change or maybe UK will have to change, whoever is against this will have to change. In the first world, a lot of what we're talking about is a nice to have. It's sort of a bit of a game and if I can participate, but where I come from in the emerging world, it's a necessity. They all know other solutions. So if you live in South Africa or China or India and you want to get your money into a first world country like England, Australia or America, it's very, very difficult and virtually no one can do it. But it's a major problem because you want wealth preservation, you want a plan B, you want your children to be able to go to a first world university, et cetera, et cetera, et cetera. Puerto Rico being a free associated states of the United States of America is like the best place to actually test this philosophy and push for that. For infrastructure, for internet, for all sorts of different things, in terms of building the best infrastructure, the newest, best in class. For your business, it's 4% corporate taxes and individual, it's 0%. Now, that's... But you gotta move here. You gotta move here, okay? But you don't have to give away your US citizenship. No taxes are great. At the same time, they fall in love with the island. So it's amazing because to me, Puerto Rico is a combination of LA's, whether San Francisco's open-mindedness and Barcelona's, you know, deep European history. It's just a really beautiful place. And it's US territory, so it's a short hop and a jump to the states if you need to. Most people in America, mainland, sort of think they're going to a foreign country because it's treated that way by our government. How do I come to Puerto Rico? Do it right, not offend the culture, enable them, come together. What's your experience with the playbook? When they come to us, they get their grants, plus their relocation services for their business and themselves. So they write a big check to you guys for the service, but you guide them through the entire process. Yes, we do. And there's real energy here because there's a social movement underneath the entire cryptocurrency movement, and that's to basically help your fellow man or women. All this activity is really going to give a shot in the arm to the Puerto Rican economy. And we're bringing our funds and we're bringing our advisories and we're bringing our business, so thank you. I just want to say I'm really very impressed. Thank you. The hurricane was a horrible atrocity that happened, and now we have this blank canvas to create a vision for Puerto Rico. So what we're doing is we're connecting every single university on the island to work on open source projects to make solutions for the private sector. They know that if they can buy power on a cell phone like they're already doing for other goods and services, now we've got a game changer. This is restart week, and one of the other things that we've done is help all of the conferences come together, collaborate rather than compete, so go into the same week and put all of these satellite groups around it, and then we blanketed a week around it so that we had one place for people to go and look for all of the events and also for them to understand a movement. About the education piece, it's very difficult for people to kind of get caught up to speak because there's some technical things that need to understand to really apply this technology into the business world. The other day we had an event when we taught 50 people how to create a smart contract from scratch. Those are 50 people who are not the same anymore. The ecosystem's developing. You've got entrepreneurs, you've got projects, you've got funding coming in, but as it's going to be a fight for the ecosystem because you can't have zillion ecosystems. There are definitely some legalities and regulatory aspects that put some concerns on a lot of people's minds. Since its inception, you've seen people and mainstream media, in particular, target Bitcoin, and they're just adopting the government narrative saying, oh, everyone in this industry is corrupt, oh, everyone in this industry is an ICO scammer, oh, everyone in this industry is a drug runner and they're all selling drugs on the dark web. And it's like, you know what? Like, you can do some research and do a bit better than that. Traditional media. They want to take down everybody that they don't consider, you know, like a bird of the same feather. There actually are a lot of scammers and a lot of like dark forces inside of the cryptocurrency movement. So that's why I think we welcome kind of more regulatory influence because none of us want to see bad actors in the space. We've seen folks go out and raise, you know, really big amounts of capital with no product roadmap, no business toilet roadmap, no real way to get from zero to X. Are they trying to shoe-borne a regular business onto the blockchain and just assume that by adding crypto at the end of, you know, toilet paper, they're gonna get something? I had another founder tell me that, you know, my tokens are worth 100 million. I'm like, you don't have a user, you just have a product. Your tokens are worth strike, if you ask me. It's worth zero. I can tell my house is worth $100 million. It's only worth as much as the top buyer. How much is evening to pay? We really need hardcore reputation systems in our industry and for the world. I think 2018 is gonna be the year of clarity on regulation. And I think that's where Puerto Rico comes in and plays a major role. Just to see the thousands of people who have come here to support these several conferences has been amazing. My most surprising thing though is the amount of people that have told me that they bought a one-way ticket and have no intention of going home. So to make Puerto Rico your home, I think is a really amazing first step. When I go to the supermarket, where I go, it's full of American and people from outside and when you ask them where you're from and they will tell you from Puerto Rico. This is gonna become the epicenter of this multi-billion dollar market. We need to have people prepared for this. We have to create the transparency. The beauty of the transparency is there's actually privacy baked in and that's what I love about blockchain is it has all of the good things. All communities need to evolve in my opinion to technology communities. Open networks of governance where we have peer-to-peer distribution of finance and of resources in a way that allows people to aggregate around the marketplaces that are actually benefiting the way that they believe the world should work. We're going to need tools that far surpass what's currently available in terms of the messengers, the websites, all these things. For 20 years the internet has been free. It's a really beautiful thing for consumption and open source is the absolute right methodology for software. When it comes to your own content, a reward makes sense. Everybody is gonna get to play together across every device. The developers are gonna get rewarded for creating content. People are gonna be rewarded for creating things inside the games and the players are gonna get rewarded for getting to the top levels of all the games and we're gonna reward them through our crypto currency. If we begin to own our self-sovereign identity, then when we're owning our data, that's the foundation for universal basic income. Communication, completely frictionless. Payment, completely frictionless. And governance, completely frictionless. And we have to put this all together. Who wins here? The average citizen entrepreneur. That is true. An average citizen player that wants to start something, whether it's a banking, a service provider, some sort, an entrepreneur or a new financial instrument or firm. Yes. All have green field opportunity here. The first thing I would tell founders is to reach out. This community is very, very supportive. Like, you can reach out to me, you can reach out to other guys, LinkedIn, Facebook, or come to these events and say your idea and you need help. Because you will need help. You cannot run this alone, okay? You are running a company, you're running your team. Have a good team. That's the first thing. You gotta be vigilant and you gotta take every precaution possible. Keeping your money in a hard wallet, not keeping your private keys on your computer. If you're using a centralized system, those centralized systems are really easily exploitable. Strategic partnerships, advisors, founding team, and then show the idea to the people. Explain yourself frankly and honestly, and I think the community will reward you to go and find a drink. Whether you're a Fortune 500 company or a startup, it's all about building the community. And I believe that whether it's utility token or security or combination of the two, it provides an incredible vehicle to ultimately be the catalyst to your community. And if you're the catalyst to your community adding value, then you're going to build a company of value. It's always gonna be led by the business model because you need something to act as the power pull to pull the thing along, right? And you can continuously pump capital into something, but if the model is wrong, it's just going to drain. And it's going to go to inefficient systems and in the end maybe do some help but a very small percentage of the capacity of what it could do. Then the advice would be to entrepreneurs, don't fret about the infrastructure, just nail your business model. And because the switching cost might not be as high as you think. That's right. Where in the old days when we grew up, you made a bad technology decision, you're out of business. Yeah. The first advice that I give my clients is to stop. This business has too much FOMO in it. Yeah. Right, if you're missing out. So not just because everybody's out there doing an SEO, you should be doing an SEO, right? Yeah. 46% of ICOs have already failed. Already failed. Start with the business. Got the business mechanics down right. So free cash flow, unique value proposition, product market fit. Once you've done the business, think about the token model, right? The token model has to go in handy now with your business model and revenue model. And once you figure out the business and token models, now it's time to think about compliance. I'm going to raise money in the US and abroad. I've decided to go with the security token, hypothetical instance. Yep, absolutely. What do I do? Is it for you an incentive mechanism or is a fundraising mechanism? Or both. Who's going to be my user? Who's going to use this token, right? Are there going to be moms, dads, hospitals? What's my target? And then how they're going to use it? Are they going to hold it? Are they going to sell it? Are they going to trade it? So all these different things define the token model. Once you get your token actually authenticated, realized everything's transparent and it gets on that secondary market, it's better to use that to invest in anything you need to invest in. Get everybody incentivized around your token, all your employees, all your vendors, everybody incentivized around that token. It's 1,000% more powerful than a dollar because a dollar doesn't go up in value and your token can go up and down. And as soon as you find just one spark that blows up everybody, all boats are as equal. It's awesome. It's not necessarily the time to crack open the champagne. You still have to demonstrate product market fit. You have to build a market in our particular case. So there's a lot of hard work. Launching is just a start line, not a finished line. It's only a step along the whole process. You know what made people get it? You showed them the money. You showed them the money. Sometimes people don't, you can explain these concepts that are world changing, super high level or whatever. People are not actually going to get it until it's useful to them. Average business people and senior business people who have typically been shut off to the idea of blockchain are now seeing this as very real and here to stay. Momentum is just beginning. It's going to be amazing what these guys come up with. That's one of the things I love about doing this thing, right? I'm an old guy and I get to hang around these smart young people. It makes me feel young again. But the other thing that we have, and I think you to share it as well, is we have to offer to these young guys experience. I think we just invented a new category in the ICO category, an advisor token. That's right. At the end of the day, you have to have the stomach for it and I think you just have to be as educated as you can. What government entity can resist for the long term something that's actually trying to provide a better and better and better financial infrastructure? You should be able to participate in many different nations who have many different economies that are all really cooperating interdependently to create the best possible life for all human good. One dollar will not change your life, but if you change your habits, you'll change your financial destiny. And so my philosophy is get it to a dollar so that every single person can participate. And once you start to learn good habits around money and wealth, the rest is, it's a formula like it's a flywheel. The world will become a better place. We'll have better companies. Positive impact is not counter to profit. They go hand in hand. The Puerto Rico movement, it's a movement, a lot of tech entrepreneurs, capital investors, the pioneers in the blockchain, decentralized internet are all here. This is like the Silicon Valley of crypto. Yeah, I think they're calling it Crypto Island. Crypto Island, yes. It sounds like a TV show. We shouldn't be honest. It's not lost, it's Crypto Island. Exclusive coverage from Puerto Rico. This is theCUBE. I'm John Furrier getting the signal here out of all the noise in the market. This is what we do. This is theCUBE's mission. Great trip. We start week, blockchain unbound, coin agenda, open content. That's what it's all about. Community, power to the people. Thanks for watching.